XcelMobility Inc. - FORM 10-K

Attached files

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EX-31.1 - SECTION 302 CERTIFICATION - XcelMobility Inc.	ex31-1.txt
EX-32.1 - SECTION 906 CERTIFICATION - XcelMobility Inc.	ex32-1.txt

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended March 31, 2011

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ______________ to________________

Commission file number 000-54333

XCELMOBILITY INC.
(Exact name of registrant as specified in its charter)

Nevada 98-0561888
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2377 Gold Meadow Way, Suite 100, Gold River, CA 95670
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (916) 526-2662

Securities registered under Section 12(b) of the Act:

None N/A
Title of each class Name of each exchange on which registered

Securities registered under Section 12(g) of the Act:

Common Stock, $0.001 par value
(Title of class)

Indicate by checkmark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by checkmark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Act. Yes [ ] No [X]

Indicate by checkmark whether the registrant has (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated Filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(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 Act). Yes [X] No [ ]

The aggregate market value of voting and non-voting common equity held by
non-affiliates as of June 21, 2010 was approximately $36,000 based upon 720,000
shares held by non-affiliates and a closing market price of $0.05 per share on
September 30, 2010.

As of June 21, 2011, there were 77,700,000 shares of common stock issued and
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Exhibits incorporated by reference are referred to in Part IV.

AVAILABLE INFORMATION

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and all amendments to those reports that we file with the Securities
and Exchange Commission, or SEC, are available at the SEC's public reference
room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains
reports, proxy and information statements and other information regarding
reporting companies.

TABLE OF CONTENTS

Page
----
PART I
ITEM 1. Business 4
ITEM 1A. Risk Factors 10
ITEM 1B. Unresolved Staff Comments 14
ITEM 2. Properties 15
ITEM 3. Legal Proceedings 15
ITEM 4. [Removed and Reserved] 15

PART II
ITEM 5. Market for the Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities 15
ITEM 6. Selected Financial Data 16
ITEM 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 16
ITEM 8. Financial Statements and Supplementary Data 22
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 35
ITEM 9A. Controls and Procedures 35
ITEM 9B. Other Information 36

PART III
ITEM 10. Directors, Executive Officers and Corporate Governance 37
ITEM 11. Executive Compensation 38
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters 39
ITEM 13. Certain Relationships and Related Transactions, and Director
Independence 40
ITEM 14. Principal Accountant Fees and Services 41

PART IV
ITEM 15. Exhibits Financial Statement Schedules 41
Signatures 42

PART I

FORWARD LOOKING STATEMENTS.

This annual report contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors" and the risks set out below, any of which may cause our
or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These risks include, by way of example and not in
limitation:

* the uncertainty that we will not be able to successfully identify and
evaluate a suitable business opportunity;

* risks related to the large number of established and well-financed
entities that are actively seeking suitable business opportunities;

* risks related to the failure to successfully manage or achieve growth
of a new business opportunity; and

* other risks and uncertainties related to our business strategy.

This list is not an exhaustive list of the factors that may affect any of our
forward-looking statements. These and other factors should be considered
carefully and readers should not place undue reliance on our forward-looking
statements.

Forward looking statements are made based on management's beliefs, estimates and
opinions on the date the statements are made and we undertake no obligation to
update forward-looking statements if these beliefs, estimates and opinions or
other circumstances should change. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Except as
required by applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to conform
these statements to actual results.

The safe harbors of forward-looking statements provided by Section 21E of the
Exchange Act are unavailable to issuers of penny stock. As we issued securities
at a price below $5.00 per share, our shares are considered penny stock and such
safe harbors set forth under the Private Securities Litigation Reform Act of
1995 are unavailable to us.

Our financial statements are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting principles.

In this annual report, unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to "common stock" refer to
the common shares in our capital stock.

As used in this annual report, the terms "we," "us," "our" and "Advanced
Messaging" mean XcelMobility Inc. (f/k/a Advanced Messaging Solutions Inc.),
unless otherwise indicated.

ITEM 1. BUSINESS.

GENERAL

We were incorporated in the state of Nevada on December 27, 2007. Our offices
are currently located at 2377 Gold Meadow Way, Suite 100, Gold River, CA 95670.
Our telephone number is (916) 526-2662. Our website,
www.advancedmessagingsolutions.com, is currently under construction and the
information that is or will be contained on our website does not form a part of
this filing.

We intend to develop and market secure instant messaging software for desktop
computer users. Our products will be targeted towards instant messaging and file
sharing using an encrypted transmission format.

We intend to use an e-commerce approach where customers will be able to download
our products from our web site. Marketing and customer service will be driven
through the web site where we plan to offer live online support Monday to Friday
7:00 am to 5:00 pm Pacific Time for customers around the world.

We have not generated any revenue from our business operations to date. We do
not anticipate that we will generate revenues until we complete development and
deployment of our hosted service, client software and enterprise messaging
product. Accordingly, we must raise cash from sources other than our operations
in order to implement our business and marketing plans.

However, to date, we have been unable to raise additional funds to implement our
operations, and we do not believe that we currently have sufficient resources to
do so without additional funding. As a result of the current difficult economic
environment and our lack of funding to implement our business plan, our Board of
Directors has begun to analyze strategic alternatives available to our company
to continue as a going concern. Such alternatives include raising additional
debt or equity financing or consummating a merger or acquisition with a partner
that may involve a change in our business plan.

Although our Board of Directors' preference would be to obtain additional
funding to develop our enterprise messaging product, the Board believes that it
must consider all viable strategic alternatives that are in the best interests
of our shareholders. Such strategic alternatives include a merger, acquisition,
share exchange, asset purchase, or similar transaction in which our present
management will no longer be in control of our Company and our business
operations will be replaced by that of our transaction partner. We believe we
would be an attractive candidate for such a business combination due to the
perceived benefits of being a publicly registered company, thereby providing a
transaction partner access to the public marketplace to raise capital.

We have had preliminary discussions with potential business combination
partners, but have not signed a definitive agreement to engage in a strategic
transaction as of the date of this annual report. Any such business combination
and the selection of a partner for such a business combination involves certain
risks, including analyzing and selecting a business partner that is compatible
to engage in a transaction with us or has business operations that are or will
prove to be profitable. In the event we select a partner for a strategic
transaction and sign a definitive agreement to consummate such a transaction, we
will report this event on a Form 8-K to be filed with the Securities and
Exchange Commission. If we are unable to locate a suitable business combination
partner and are otherwise unable to raise additional funding, we will likely be
forced to cease business operations.

To that end, on March 8, 2011, we entered into a non-binding letter of intent
with Shenzhen CC Power Corporation, a People's Republic of China company ("CC
Power"), in connection with a proposed share exchange transaction by and between
the Company and CC Power whereby the Company will acquire all of the shares of
outstanding capital stock of CC Power in exchange for the issuance of a certain
ownership interest in the Company to the shareholders of CC Power (the "Share
Exchange"). CC Power provides mobile phones and internet products through
monthly subscriptions to large cellular phone carriers and OEM partners. As part
of the Share Exchange, it is contemplated that the Company shall issue to the
shareholders of CC Power or their legal nominees, fifty and one half percent
(50.5%) of the outstanding common stock of the Company. Upon the Closing, CC
Power shall become a wholly-owned subsidiary of the Company. To date, the
parties have not signed a definitive agreement setting forth the terms and
conditions of the Shares Exchange, and a formal definitive agreement is subject
to completion of additional due diligence and further negotiations.

MARKET OPPORTUNITY

Statistics reported by www.internetworldstats.com (available at
http://www.internetworldstats.com/emarketing.htm) indicate that there were over
1.6 billion Internet users as of June 2009 with a global penetration rate of
24.7%. People communicate over the Internet using text messages including
sending attachments and file transfers to and from web sites. The information

transmitted in text messages includes personal, corporate, governmental and
financial information and often times includes sensitive, private or
confidential material.

A report published by the De Groot School of Business (available at
http://www.innovations-report.com/html/reports/information_technology/report-780
33.html) indicates worldwide users send over one trillion text messages each
year. When the information is sent in a text message or file transfer that is
not encrypted, it can easily be read by those who hack into data communication
networks.

Our business was founded on the premise that very few text messaging and file
transfer programs are done in a secure format with encryption that prevents
others from reading their messages. We believe that the lack of message security
constitutes a market segment that is at risk of information piracy.

OUR PRODUCTS AND SERVICES

We can offer no assurance that we will be successful in developing the hosted
service, client software, or the enterprise messaging product, or that these
products will be marketable if developed. Any number of factors may impact our
ability to develop our products, including our ability to obtain financing if
and when necessary; the availability of skilled personnel; market acceptance of
our products, if they are developed; and our ability to gain market share. Our
business will fail if we cannot successfully implement our business plan,
develop our products or successfully market our products and capabilities.
Please see "RISK FACTORS" at page 3 for additional information.

HOSTED SERVICE

Our initial product will be an Internet, subscription based encrypted instant
messaging service where we will host server-side software and the end-user will
purchase a monthly subscription from us. The end-user will download a program
(the "client software") from our web site that will be installed on a Microsoft
Windows-powered personal computer. Our plan contemplates the creation of user
software with characteristics and features similar to existing popular instant
messaging software (such as MSN Messenger). It will communicate with our hosted
server for authentication and supply the server with presence (or information as
to where and how to contact the client, such as an Internet Protocol ("IP")
address) and status (whether the server is available, busy, etc.). The client
software will also download the list of contacts for the user and their status
from our hosted server. The user's contacts will include individuals who are
also registered with our service and have downloaded the user software. Similar
to existing instant messaging services, users of our product will only be able
to chat with individuals who are also users of our product.

The hosted service on the server-side of the software that takes care of the
authentication and stores customer information will be located in a data center
(where we will host our servers) that will be identified by Management. To
acquire the client software product, an Internet user will go to our web site
and select the `Registration' icon. The Internet user will be prompted to sign
up as a subscriber and facilitate the creation of a unique user name and
password. Once registered, the user will be able to download the software
immediately. Financial transaction processing will be handled by PayPal and
integrated into our website's check out/shopping cart feature.

The client software will be compatible with any operating system using Microsoft
XP or newer operating systems. The user will be able to install the software by
double clicking on the "downloaded program" icon. An installation program will
guide the user through easy-to-use installation steps. Once the program is
installed, the user will be able to launch the program in a similar fashion to
launching any Microsoft windows-based application. When launched, the program
will ask the user to log in using an assigned user name (which will be the
customer's email address) and password. If the user name is not correct, the
program will display a warning message and will ask the user to re-enter
information. If the user enters the wrong information three consecutive times,
(s)he will be prompted to contact us. If the username is correct but the
password is not, a warning message will be displayed and the user will be
presented with a standard utility to recover password. Typically, this is a
request to send the password to the user's email address.

When the username and password are entered correctly, the software will launch
an application interface that shows the user's contacts and status (online,
busy, away or not signed in). The user will then be able to double click on a
contact's name from the list of their contacts and initiate a conversation. If
(s)he chooses to do so, a new window will appear with a section where the user
can write in instant messages and another section which displays the two-way
conversation. An "Attach" icon will be displayed on the window which will permit
the user to attach files to the conversation and a "Send" button will permit the
customer to transmit the attachment together with text to the contact with whom
they are corresponding.

ENTERPRISE MESSAGING PRODUCT

We anticipate that our second product will be an enterprise messaging product
that will reside on a customized server assembled by our staff and shipped
directly to the customer. This version of the software will be customized so as
to be able to fit seamlessly onto any network. We will program this software
onto servers that we purchase on behalf of clients (or our clients will provide

their own servers). The benefits of the enterprise messaging product is that it
will be much more scalable then the downloaded version and it will be designed
for 50+ users. We believe that the server installation will result in minimal
disturbance to the customer. Customers will immediately enjoy the benefits of
being able to communicate by instant messaging and file transfers in a secure
environment. By connecting our customized server to the organization's network,
the customer will be able to quickly and efficiently bring the secure
communications program online for all registered members of the network.

LICENSING

The licensing of the products will be available as either a basic license
agreement (which will allow the software to be run on one personal computer) for
the downloaded client software or as an organization license agreement. The
organization license agreement will be customized to suit the needs of the
organization and will be based on the number of users. Every authorized user
will be able to use secure messaging and have an unlimited number of file
transfers.

All customers will be required to pay an annual maintenance fee, which will vary
for personal and enterprise users. Annual fees for personal users will start at
$9.95. Annual fees for enterprise users will start at $795. The fees will enable
the customer to receive technical support Monday to Friday 7:00 am to 5:00 pm
Pacific Time via instant messaging, online support and email. Additionally,
customers will receive software patches and system upgrades at no extra charge,
so long as they continue to pay their annual fees.

PRODUCT DEVELOPMENT

We will initially focus on developing the downloadable client software, and upon
completion of that software, we will focus on developing the enterprise
messaging product. Both software programs will include several common areas such
as the overall architecture that includes the software encryption, the
authentication process and the use of a subscriber database. Both software
programs will use our proprietary Messaging and Presence Server code in their
programs. The Messaging and Presence Server keeps track of all users and their
statuses (online, offline, busy, etc.). It also keeps track of their location on
the Internet to be able to properly direct messaging traffic. A MySQL(R) open
source database will be used to store client information. MySQL(R) databases are
widely used open source databases which we deem best suited for our business
because of their scalability and the availability of programmers who are skilled
with their functions. We intend to implement a privacy policy with respect to
the personal information we collect from our customers.

Our software development will be handled by an outside contractor and will be
closely supervised by our management. We have selected a software development
contractor to develop the client software (which will include secure instant
messaging and file transfer programs) and we have begun full development of our
software. The level of funding that we receive will determine the extent of our
product development and marketing activities. To date, we have raised a total of
$51,000 from the sale of equity, which Management believes will be adequate for
the next 12 months of our operations, and to develop the client software
product. Based on our projected budget, we have received to date our projected
average level of financing which will permit us to develop the downloadable
client software product and the enterprise version as well. If we receive an
additional $10,000, to reach our projected maximum level of funding (which we
estimate to be $60,000), we will budget for greater expenditures on marketing
and sales.

Our development benchmarks include:

* SELECTION OF SOFTWARE DEVELOPMENT CONTRACTOR: We have selected a software
development contractor to develop the client software (which will include secure
instant messaging and file transfer programs) and have commenced the full
development of our software.

* SPECIFICATIONS AND HIGH-LEVEL DESIGN: We expect to complete the high-level
design specifications for the client software in approximately two months after
the selection of a software contractor. The process will include the overall
design of the software products including client side and server side, flow
chart schematics, and human interfaces (GUI Graphical User Interface, which is
where the users input their requirements). This process will be interactive
between our management and the software development contractor.

* SELECTION OF A SERVER LEASING AND HOSTING COMPANY: We plan to evaluate several
server leasing and hosting companies to host our servers. The server leasing and
hosting provider must be located in a reputable data center that includes daily
backup and recovery systems in case of a server failure within a 24 hour period
and must provide cost efficient services within a budget of $200 per month. We
intend to lease two servers: one low end server to be used for development and
one high end server to be used to deploy the client messaging software and web
site. We believe that we will require the development server in month two and
the deployment server in month five.

* MESSAGING AND PRESENCE SERVER: The messaging and the presence server
constitutes the heart of the products. It keeps track of all users and their
statuses (online, offline, busy, etc.). It also keeps track of their locations
on the Internet to be able to properly direct messaging traffic. A MySQL(R) open
source database will be used to store client information. We expect that this
task will take approximately two months.

* CLIENT-SIDE SOFTWARE DEVELOPMENT: We plan to run a Windows-based software
platform which will likely be written in Visual Basic or Visual C++, both are
Microsoft Windows software development languages. This software will be
downloaded by customers who register for the client software from our web site
and will be used to communicate with others using our service. We expect that
developing the client software will take approximately four months.

* ADMINISTRATIVE PORTAL DEVELOPMENT: The administrative portal will enable us to
review the number of sales made and respective details by group including the
corporate clients that order the server software and individual customers who
download software from our web site. The administrative portal will also enable
us to refund a customer, extend the number of days for a subscriber, track the
number of times a customer may download a product and to suspend a subscription.
It will also include a range of management reporting functions. We expect that
this portal will take approximately one month to develop.

* GENERAL PORTAL DEVELOPMENT: The general portal will be our website
www.advancedmessagingsolutions.com. It will include the online store where
customers can learn about the products and services that we will offer, a
customer portal, where customers will be able to log in to check their accounts
and obtain software updates, the shopping cart/payment module, information about
our company, instructions on how to download products and pricing, and a
frequently asked questions page for customers. We expect that this portal will
take approximately one month to complete.

* SHOPPING CART / PAYMENT MODULE DEVELOPMENT: We plan to use the internationally
recognized PayPal.com system, http://www.paypal.com/ for all financial
transactions. PayPal is a credit card merchant and a financial services company
that accepts and clears all customer credit card payments on behalf of
participating merchants, such as our company. We expect that the shopping
cart/payment module will take approximately two weeks to complete.

We will deploy a Beta version of our product and have full versions of the
software products available between months nine and 12 after the date of this
prospectus. We expect to retain the service of the web development contractor on
an ongoing part time basis for three years.

Our management will supervise the development process to ensure that benchmarks
are completed and that there is quality control. All intellectual property
rights will remain with Advanced Messaging Solutions Inc. We plan to protect our
intellectual property by using a variety of means, including non-disclosure
agreements, which we will have executed by all parties involved in the
development of our business.

MARKETING

GOOGLE ADWORDS

We intend to commence our marketing efforts upon the development of our
downloadable client software. Our marketing strategy will focus on using one of
the top-ranked Internet search engines, Google, to drive traffic to our own web
site. We plan to take advantage of the well established Google Adwords marketing
program http://www.google.ca/intl/en/ads/ that combines the placement of online
ads on the search result pages of Internet users. Google uses an advertising
methodology referred to as cost-per-click ("CPC") in its Adwords program. Using
this strategy will allow us to design our own ads, select target locations such
as a city or state and use keywords in our ads. A keyword is a word that is used
by an Internet user who is performing an online search to find out information
on a specific topic.

Our primary target market is focused on Internet users who already send text
messages and use the Internet for file transfers. With CPC advertising, we only
pay for the number of actual clicks on our advertisement. Each time someone
clicks on our Google ad they will be redirected to our web site. A CPC-based
advertising strategy is cost effective because an advertiser only pays for the
leads they receive. The CPC marketing campaign is an integral part of our long
term strategy. Between months 12 and 24 after the date of this prospectus we
will begin to examine other marketing tactics such as participating in trade
shows and industry conferences.

Our marketing campaign will monitor daily statistics and track favorite topics
in order to quickly get in synch with our Internet audience. This is a
significant part of our branding strategy.

OPTIMIZING OUR WEBSITE

We plan to work with the web site development contractor to develop a series of
meta-tags for each of the pages of the web site. Meta-tags are keywords that are
added to a web page to make it easier to find that specific web page by search
engines, web browser software and other applications. The information is not
intended to be seen by the casual Internet user. Search engines like Google and
Yahoo are designed to seek out these keywords when someone is doing an Internet
search for a specific topic. By including meta-tags such as "encryption of text
messages", "file transfer encryption", "secure instant messaging" and "secure
file transfer", we will be able to help drive more traffic to our web site.

As our business begins to gain subscribers and become known in the industry we
plan to conduct our own online survey questionnaires from the home page of our
web site.

REVENUE

Our plan calls for revenue to come from the sale of our secure instant messaging
file transfer software products downloaded from our web site and from the sale
of the corporate / organization wide version loaded onto a dedicated web server
and shipped directly to customers.

OUR HOSTED SERVICE WILL COST:

Personal Use version $ 9.95 annually for one user

Home Office version $ 14.95 annually for 2 - 3 users

Small Business version $ 29.95 annually for 1 - 10 users

$39.95 annually for 11 - 25 users

Custom Pricing for 25 + users

OUR ENTERPRISE SOFTWARE WILL COST:

$2,495.00 for 50 - 100 users (including the
cost of the server)

$2,995.00 for 101 to 200 users (including
the cost of the server)

$3,495.00 for 200 - 300 users (including
the cost of the server)

$4,995.00 unlimited # of users (including
the cost of the server)

Enterprise Annual Maintenance Fees will start at $795.00 for 50 to 100 users and
will increase depending on the number of users within the organization. Custom
pricing will be developed for large organizations.

By offering a tiered pricing schedule we hope to be able to attract a large
client base of individual and small business owners who cannot afford to have
their security compromised.

This sales strategy is designed to gain a large number of subscribers in a short
period of time that will provide us with the cash flow we will need in order to
consider expanding our product lines in the years ahead.

We intend to achieve direct sales from our Google Adwords and our own web site
marketing campaigns that will commence during the first twelve months after the
date of this prospectus and continue each month thereafter.

COMPETITION

There are several other companies that offer a secure instant messenger product.

MICROSOFT

We believe that Microsoft Messenger ("MSN Messenger") is the current product of
choice for instant messaging. This is a free service and only requires the user
to sign up for a free Hotmail.com email address to join. If Microsoft includes
security features on MSN Messenger in the future, it could have a significant
adverse effect on our business.

YAHOO

The Yahoo.com web site includes a number of different Internet properties and
according to MarketingCharts.com (http://www.marketingcharts.com/interactive/
top-10-portal-frontpages-april-2009-9076/) holds the number one ranking for the
most visited web site as of April 2009, with 60.73% market share of visits.
Management believes that the Yahoo Messenger service was developed as
competition for MSN's Messenger service. Available directly from the Yahoo.com
main web page, Yahoo Messenger has garnered a significant following. Management
believes that if Yahoo decides to add security features to their product, it
could have a significant adverse effect on our business.

OFF-THE-RECORD MESSAGING

Off-the-Record Messaging (http://www.cypherpunks.ca/otr/) allows the Internet
user to have private conversations over instant messaging by providing
encryption, authentication, deniability and locked out history.

STANDARD NETWORKS

Standard Networks (http://www.stdnet.com/moveitdmz/securemessaging.htm) offers a
licensed product called MOVEit DMZ that permits an unlimited number of users to
create, exchange and store an unlimited number of messages and attachments. The
MOVEit products first came to market in 2001 and have been evolving since then.

FACE TIME - IM AUDITOR

Face Time (http://www.facetime.com/productservices/imauditor.aspx?adwords_
security_im&gcli d=CNn_gMPmlo8CFVB1OAodxCPHfg) provides an IM Auditor product to
help technology staff control and protect the privacy of instant messaging
within a private network. A private network is one that is self-contained within
an organization and can include remote access using secure login procedures. The
IM Auditor is designed to preserve the integrity of text messages within the
system. According to company reports, IM Auditor deals with both inbound and
outbound security threats that can result in security breaches, productivity
loss and information leakage.

BITWISE IM

Bitwise IM (http://www.bitwiseim.com/) offers encryption products that cross
over various communication platforms. Three products range from the personal use
to BitWise IM Plus edition to BitWise IM Professional for the corporate market.
The company claims to provide encryption for text messages, file transfers,
whiteboards, voice messages and other functions.

OUR ADVANTAGE

The companies described above are only a select portion of the many companies
that are already active in the instant messaging marketplace with a variety of
products and services. There is no one standard way of encrypting text messages
or file transfers. Privacy and security issues have recently been getting high
profile media attention. Efforts to combat spam, phishing and theft identity
appear almost daily which will help keep the topic of privacy and security in
front of potential customers. We believe that (a) this high level of media
coverage will indirectly help our own marketing efforts, and (b) that our
products offer unique solutions for enterprises and business, which are not
replicated by any of our competitors.

ACTIVITIES TO DATE

We have begun the development of our non-functional information-only website and
have commenced planning for the development of our software. We have also
identified a developer and management is working with them to design our
database. We expect to have our non-functional information-only website
operational by the end of October 2009. We have begun the full development of
our software. We will commence our marketing efforts upon the development of our
downloadable client software. Further, we have researched the market for
computer servers and a web hosting service, and we have identified office space
that we deem adequate, although no formal written agreements have been entered
into.

SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES

We believe there are no constraints on the sources or availability of products
and supplies related to our development of our website and Internet-based
business.

PATENTS, TRADEMARKS, LICENSES, FRANCHISE RESTRICTIONS AND CONTRACTUAL
OBLIGATIONS & CONCESSIONS

We intend to protect our website with copyright and trade secrecy laws. Beyond
our trade name, we do not hold any other intellectual property.

EFFECT OF EXISTING OR PROBABLE GOVERNMENT REGULATION

We do not believe that government regulation will have a material impact on the
way we conduct our business.

RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS

We have not incurred any research and development costs to date. We have plans
to undertake certain research and development activities during the first 12
months after the date of this prospectus related to the development of our
website.

EMPLOYEES

We have commenced only limited operations, and therefore currently have no
employees other than our executive officer, who spends approximately 30 hours
per week on our business. We will consider retaining full-time management and
administrative support personnel as our business and operations increase.

ITEM 1A. RISK FACTORS

Much of the information included in this annual report includes or is based upon
estimates, projections or other "forward looking statements". Such "forward
looking statements" involve various risks and uncertainties as outlined below.
We caution the reader that important factors in some cases have affected, and in
the future could materially affect, actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward looking statements".

The securities offered hereby involve a substantial risk of loss. Prospective
investors should carefully consider the risks and uncertainties described below
before making an investment in our securities. The risks and uncertainties
described below are those which management currently believes may significantly
affect us.

RISKS RELATING TO OUR BUSINESS

WE ARE UNCERTAIN OF OUR ABILITY TO FUNCTION AS A GOING CONCERN, INDICATING THE
POSSIBILITY THAT WE MAY NOT BE ABLE TO OPERATE IN THE FUTURE.

To date, we have completed only the initial stages of our business plan and we
can provide no assurance that we will be able to generate a sufficient amount of
revenue, if any, from our business in order to achieve profitability. It is not
possible at this time for us to predict with assurance the potential success of
our business. The revenue and income potential of our proposed business and
operations are apparently unknown. If we cannot continue as a viable entity, you
may lose some or all of your investment in our common stock.

AS A COMPANY IN THE EARLY STAGE OF DEVELOPMENT WITH AN UNPROVEN BUSINESS
STRATEGY, OUR LIMITED HISTORY OF OPERATIONS MAKES EVALUATION OF OUR BUSINESS AND
PROSPECTS DIFFICULT.

We were incorporated on December 27, 2007. Our business is in the development
stage and to date we have not earned any revenues. Our business prospects are
difficult to predict because of our limited operating history, early stage of
development and unproven business strategy. Our primary business activities will
be focused on the development of our software and website. We may not attain
profitable operations and our management may not succeed in realizing our
business objectives.

OUR BUSINESS WILL FAIL IF WE ARE UNABLE TO DEVELOP OUR SOFTWARE AND PRODUCTS OR
IMPLEMENT OUR BUSINESS PLAN SUCCESSFULLY.

The success of our business plan is dependent on the development of our
products. We may not be able to develop our software and products successfully
or in a timely manner. In addition, the success of our business plan is
dependent upon the market acceptance of our software and products. Our business
will fail if we cannot successfully implement our business plan, develop our
software or successfully market our product and capabilities.

WE EXPECT TO SUFFER LOSSES FOR THE FORESEEABLE FUTURE.

We expect to incur operating losses for the foreseeable future. These losses
will occur because we do not yet have any revenues to offset the expenses
associated with the development of our website and our business. We cannot
guarantee that we will ever become successful in generating revenues in the
future. If we are unable to generate revenues, we will not be able to earn
profits or continue operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.

IF THE ONLINE MARKET FOR INTERNET SECURITY SOFTWARE CONTRACTS DOES NOT CONTINUE
TO DEVELOP, OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY SUFFER.

We believe that the online market for instant messaging software is rapidly
developing. As is typical for any rapidly evolving market, demand and market
acceptance for recently introduced products and services are subject to a high
level of uncertainty and risk. It is also difficult to predict the market's
future growth rate, if any. If the market for Internet security software
contracts or does not continue to develop or if our software does not achieve or
sustain market acceptance, our results of operations and financial condition
could be materially and adversely affected.

WE ARE IN A COMPETITIVE MARKET WHICH COULD IMPACT OUR ABILITY TO GAIN MARKET
SHARE WHICH COULD HARM OUR FINANCIAL PERFORMANCE.

The market for providers of instant messaging software is intensely competitive.
There are a number of companies that offer instant messaging software and
programs, including, among others, Microsoft, Google and Yahoo. If our
competitors add security features to their software, their software may be
perceived by consumers as being superior to ours. If we cannot gain market share
for our software, our business and financial performance will be harmed.

WE MAY NOT BE ABLE TO EXECUTE OUR BUSINESS PLAN OR STAY IN BUSINESS WITHOUT
ADDITIONAL FUNDING.

Our ability successfully to develop our software and eventually to generate
commissions and to generate operating revenues depends on our ability to obtain
the necessary financing to implement our business plan. Although we have
adequate capital on hand to fund our minimum projected operations for the
twelve-month period after the date of this prospectus, we will require
additional financing through the issuance of debt and/or equity in order to hire
additional personnel as needed and eventually establish profitable operations.
Such financing may not be forthcoming or on terms that we deem acceptable. We
will require additional funds of approximately $10,000 in order to adequately
fund our expanded development and marketing and sales budget. As has been widely
reported, global and domestic financial markets and economic conditions have
been, and continue to be, disrupted and volatile due to a variety of factors,
including the current weak economic conditions. As a result, the cost of raising
money in the debt and equity capital markets has increased substantially while
the availability of funds from those markets has diminished significantly, even
more so for smaller companies like ours. If such conditions and constraints
continue, we may not be able to acquire additional funds either through credit
markets or through equity markets and, even if additional financing is
available, it may not be available on terms we find favorable. At this time, we
have no anticipated sources of additional funding in place. Failure to secured
additional funding when needed will have an adverse effect on our ability to
meet our obligations and remain in business.

IF OUR ESTIMATES RELATED TO EXPENDITURES ARE ERRONEOUS OR INACCURATE, OUR
BUSINESS WILL FAIL AND YOU COULD LOSE YOUR ENTIRE INVESTMENT.

Our success is dependent in part upon the accuracy of our management's estimates
of expenditures for legal and accounting services, including those we expect to
incur as a publicly reporting company, software development, website development
advertising and administrative expenses, which management estimates to aggregate
a minimum of approximately $40,000 over the next 12 months. If such estimates
are erroneous or inaccurate, or we encounter unforeseen expenses and delays, we
may not be able to carry out our business plan, which could result in the
failure of our business and a loss of your entire investment.

IF WE ARE UNABLE TO IDENTIFY AND RETAIN QUALIFIED PERSONNEL TO DESIGN AND
DEVELOP OUR WEBSITE AND SOFTWARE, OUR BUSINESS AND FINANCIAL PERFORMANCE MAY
SUFFER.

We will be dependent on yet to be established relationships with third parties
for website and software design and development expertise. If we are unable to
identify and retain qualified personnel to design and develop our website and
software, our business and financial performance may suffer.

RAPID CHANGES IN TECHNOLOGY MAY CAUSE OUR SOFTWARE TO BE OBSOLETE.

The computer software market is characterized by rapid technological change and
the frequent introduction of new products and enhancements. While we will strive
to maintain timely new developments related to our software, we can offer no
assurance that we will be successful. If we are unsuccessful, our software may
become or deemed to be obsolete and our business will be harmed.

WE NEED TO RETAIN KEY PERSONNEL TO SUPPORT OUR PRODUCT AND ONGOING OPERATIONS.

The development of our software and website will continue to place a significant
strain on our limited personnel, management, and other resources. Our future
success depends upon the continued service of our sole officer, Jaime Brodeth,
who is coordinating the creation of our software, and website as well as
developing the relationships on which we will rely to implement our business
plan. The loss of the services of Mr. Brodeth could negatively impact our
ability to develop our website and sell our software, which could adversely
affect our financial results and impair our operations.

RISKS RELATING TO OUR COMMON STOCK

THERE IS CURRENTLY NO PUBLIC MARKET FOR OUR SECURITIES, AND THERE CAN BE NO
ASSURANCE THAT ANY PUBLIC MARKET WILL DEVELOP OR THAT OUR COMMON STOCK WILL BE
QUOTED FOR TRADING.

There is no public market for our securities and there can be no assurance that
an active trading market for the securities offered herein will develop after
this offering by the selling stockholders, or, if developed, be sustained. After
the effective date of the registration statement of which this prospectus is a
part, we intend to identify a market maker to file an application with the
Financial Industry Regulatory Authority ("FINRA") to have our common stock
quoted on the Over-the-Counter Bulletin Board. We will have to satisfy certain
criteria in order for our application to be accepted. We do not currently have a
market maker that is willing to participate in this application process, and
even if we identify a market maker, there can be no assurance as to whether we
will meet the requisite criteria or that our application will be accepted. Our
common stock may never be quoted on the Over-the-Counter Bulletin Board, or,
even if quoted, a public market may not materialize.

If our securities are not eligible for initial quotation, or if quoted, are not
eligible for continued quotation on the Over-the-Counter Bulletin Board or a
public trading market does not develop, purchasers of the shares of common stock
may have difficulty selling or be unable to sell their securities should they
desire to do so, rendering their shares effectively worthless and resulting in a
complete loss of their investment.

BECAUSE WE WILL BE SUBJECT TO "PENNY STOCK" RULES IF OUR SHARES ARE QUOTED ON
THE OVER-THE-COUNTER BULLETIN BOARD, THE LEVEL OF TRADING ACTIVITY IN OUR STOCK
MAY BE REDUCED.

Broker-dealer practices in connection with transactions in "penny stocks" are
regulated by penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on some national securities
exchanges). The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and, if the broker-dealer is the sole market
maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
broker-dealers who sell these securities to persons other than established
customers and "accredited investors" must make a special written determination

that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. Consequently, these
requirements may have the effect of reducing the level of trading activity, if
any, in the secondary market for a security subject to the penny stock rules. If
a trading market does develop for our common stock, these regulations will
likely be applicable, and investors in our common stock may find it difficult to
sell their shares.

FINRA SALES PRACTICE REQUIREMENTS MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND
SELL OUR STOCK.

FINRA has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for certain customers. FINRA
requirements will likely make it more difficult for broker-dealers to recommend
that their customers buy our common stock, which may have the effect of reducing
the level of trading activity in our common stock. As a result, fewer
broker-dealers may be willing to make a market in our common stock, reducing a
stockholder's ability to resell shares of our common stock.

STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES
IN WHICH YOU CAN SELL THE SHARES OFFERED BY THIS PROSPECTUS.

If you purchase shares of our common stock sold pursuant to this offering, you
may not be able to resell the shares in a certain state unless and until the
shares of our common stock are qualified for secondary trading under the
applicable securities laws of such state or there is confirmation that an
exemption, such as listing in certain recognized securities manuals, is
available for secondary trading in such state. There can be no assurance that we
will be successful in registering or qualifying our common stock for secondary
trading, or identifying an available exemption for secondary trading in our
common stock in every state. If we fail to register or qualify, or to obtain or
verify an exemption for the secondary trading of our common stock in any
particular state, the shares of common stock could not be offered or sold to, or
purchased by, a resident of that state. In the event that a significant number
of states refuse to permit secondary trading in our common stock, the market for
the common stock will be limited which could drive down the market price of our
common stock and reduce the liquidity of the shares of our common stock and a
stockholder's ability to resell shares of our common stock at all or at current
market prices, which could increase a stockholder's risk of losing some or all
of his investment.

IF QUOTED, THE PRICE OF OUR COMMON STOCK MAY BE VOLATILE, WHICH MAY
SUBSTANTIALLY INCREASE THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT
OR ABOVE THE PRICE THAT YOU MAY PAY FOR THE SHARES.

Even if our shares are quoted for trading on the Over-the-Counter Bulletin Board
following this offering and a public market develops for our common stock, the
market price of our common stock may be volatile. It may fluctuate significantly
in response to the following factors:

* variations in quarterly operating results;
* our announcements of significant commissions and achievement of
milestones;
* our relationships with other companies or capital commitments;
* additions or departures of key personnel;
* sales of common stock or termination of stock transfer restrictions;
* changes in financial estimates by securities analysts, if any; and

* fluctuations in stock market price and volume.

Your inability to sell your shares during a decline in the price of our stock
may increase losses that you may suffer as a result of your investment.

OUR INSIDERS BENEFICIALLY OWN A SIGNIFICANT PORTION OF OUR STOCK, AND
ACCORDINGLY, MAY HAVE CONTROL OVER STOCKHOLDER MATTERS, OUR BUSINESS AND
MANAGEMENT.

As of March 31, 2011, our officer and directors beneficially owned 52,500,000
shares of our common stock in the aggregate, or approximately 67.57% of our
issued and outstanding common stock. As a result, our officer and directors will
have significant influence to:

* elect or defeat the election of our directors;
* amend or prevent amendment of our articles of incorporation or bylaws;
* effect or prevent a merger, sale of assets or other corporate
transaction; and
* affect the outcome of any other matter submitted to the stockholders
for vote.

Moreover, because of the significant ownership position held by our insiders,
new investors may not be able to effect a change in the Company's business or
management, and therefore, shareholders would be subject to decisions made by
management and the majority shareholders.

In addition, sales of significant amounts of shares held by our officer and
directors, or the prospect of these sales, could adversely affect the market
price of our common stock. Management's stock ownership may discourage a
potential acquirer from making a tender offer or otherwise attempting to obtain
control of us, which in turn could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.

WE ARBITRARILY DETERMINED THE PRICE OF THE SHARES OF OUR COMMON STOCK TO BE
RESOLD BY THE SELLING STOCKHOLDERS PURSUANT TO THIS PROSPECTUS, AND SUCH PRICE
MAY NOT REFLECT THE ACTUAL MARKET PRICE FOR THE SECURITIES.

The initial offering price of $0.05 per share of common stock offered by the
selling stockholders pursuant to this prospectus was determined by us
arbitrarily. The price is not based on our financial condition or prospects,
market prices of similar securities of comparable publicly traded companies,
certain financial and operating information of companies engaged in similar
activities to ours, or general conditions of the securities market. The price
may not be indicative of the market price, if any, for our common stock in the
trading market after this offering. The market price of the securities offered
herein, if any, may decline below the initial public offering price. The stock
market has experienced extreme price and volume fluctuations. In the past,
securities class action litigation has often been instituted against various
companies following periods of volatility in the market price of their
securities. If instituted against us, regardless of the outcome, such litigation
would result in substantial costs and a diversion of management's attention and
resources, which would increase our operating expenses and affect our financial
condition and business operations.

BECAUSE WE DO NOT INTEND TO PAY ANY DIVIDENDS ON OUR COMMON STOCK, HOLDERS OF
OUR COMMON STOCK MUST RELY ON STOCK APPRECIATION FOR ANY RETURN ON THEIR
INVESTMENT.

We have not declared or paid any dividends on our common stock since our
inception, and we do not anticipate paying any such dividends for the
foreseeable future. Accordingly, holders of our common stock will have to rely
on capital appreciation, if any, to earn a return on their investment in our
common stock.

ADDITIONAL ISSUANCES OF OUR SECURITIES MAY RESULT IN IMMEDIATE DILUTION TO
EXISTING SHAREHOLDERS.

We are authorized to issue up to 100,000,000 shares of common stock, $0.001 par
value, and 20,000,000 shares of blank check preferred stock, $0.001 par value,
of which 77,700,000 shares of common stock and no shares of preferred stock are
currently issued and outstanding. Our Board of Directors has the authority to
cause us to issue additional shares of common and preferred stock, and to
determine the rights, preferences and privilege of such shares, without consent
of any of our stockholders. We may issue shares in connection with financing
arrangements or otherwise. Any such issuances will result in immediate dilution
to our existing shareholders' interests, which will negatively affect the value
of your shares.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

EXECUTIVE OFFICES

We do not own interests in any real property. We currently rent office space at
a business center located at Suite 100, 2377 Gold Meadow Way, Gold River, CA
95670. We believe this space is sufficient for our purposes and will be
sufficient for the foreseeable future.

ITEM 3. LEGAL PROCEEDINGS.

There are no pending, nor to our knowledge threatened, legal proceedings against
us.

ITEM 4. [REMOVED AND RESERVED].

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET FOR SECURITIES

Our Common Stock is traded on the over-the-counter market and quoted on the
OTCBB under the symbol "XCLL" On March 31, 2011, the closing price for our
Common Stock as reported on the OTCBB was unavailable as our Common Stock has
not traded.

The high and the low bid prices for our Common Stock is based on inter-dealer
prices, without retail mark-up, markdown or commission, and may not represent
actual transactions.

The table below sets forth the range of high and low bid information for our
Common Shares as quoted on the OTCBB for each of the quarters during the fiscal
year ended March 31, 2011 (no quotes are available for the previous fiscal year
as our stock has not traded ):

For the Fiscal Year Ended March 31, 2011

For the Quarter ended High Low
--------------------- ---- ---
June 30 N/A N/A
September 30 N/A N/A
December 31 N/A N/A
March 31 N/A N/A

HOLDERS OF OUR COMMON STOCK

On June 21, 2011, the shareholders' list of our common stock showed 38
registered shareholder and 77,700,000 shares outstanding.

DIVIDEND POLICY

We have not paid any cash dividends on our common stock and have no present
intention of paying any dividends on the shares of our common stock. Our future
dividend policy will be determined from time to time by our board of directors.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

As of March 31, 2011, we had not adopted an equity compensation plan and had not
granted any stock options.

RECENT SALES OF UNREGISTERED SECURITIES

During the fiscal year ended March 31, 2010 we have not sold any equity
securities not registered under the Securities Act.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

During each month within the fourth quarter of the fiscal year ended March 31,
2010, neither we nor any "affiliated purchaser," as that term is defined in Rule
10b-18(a)(3) under the Exchange Act, repurchased any of our Common Stock or
other securities.

ITEM 6. SELECTED FINANCIAL DATA.

Not Applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.

The following discussion should be read in conjunction with our audited
financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include those discussed below and
elsewhere in this annual report.

Our financial statements are stated in United States dollars and are prepared in
accordance with United States generally accepted accounting principles.

OVERVIEW

APPLICATION OF CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts 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 year.
The more significant areas requiring the use of estimates include asset
impairment, stock-based compensation, and future income tax amounts. Management
bases its estimates on historical experience and on other assumptions considered
to be reasonable under the circumstances. However, actual results may differ
from the estimates.

BASIS OF PRESENTATION

The Company's financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP").

DEVELOPMENT STAGE COMPANY

The Company is a development stage company as defined by section 810-10-20 of
the FASB Accounting Standards Codification. The Company is still devoting
substantially all of its efforts on establishing the business and its planned
principal operations have not commenced. All losses accumulated since inception
have been considered as part of the Company's exploration stage activities.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles of the United States requires management to make estimates
and assumptions that affect the reported amounts 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 year.
Actual results may differ from the estimates.

Due to the limited level of operations, the Company has not had to make material
assumptions or estimates other than the assumption that the Company is a going
concern.

FISCAL YEAR END

The Company elected March 31 as its fiscal year ending date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
paragraph 820-10-35-37 of the FASB Accounting Standards Codification ("Paragraph
820-10-35-37") to measure the fair value of its financial instruments. Paragraph
820-10-35-37 establishes a framework for measuring fair value in generally
accepted accounting principles (U.S. GAAP), and expands disclosures about fair
value measurements. To increase consistency and comparability in fair value
measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair
value hierarchy which prioritizes the inputs to valuation techniques used to
measure fair value into three (3) broad levels. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for
identical assets or liabilities and the lowest priority to unobservable inputs.
The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37
are described below:

Level 1 Quoted market prices available in active markets for identical
assets or liabilities as of the reporting date.

Level 2 Pricing inputs other than quoted prices in active markets included
in Level 1, which are either directly or indirectly observable as of
the reporting date.

Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities and the
lowest priority to unobservable inputs. If the inputs used to measure the
financial assets and liabilities fall within more than one level described
above, the categorization is based on the lowest level input that is significant
to the fair value measurement of the instrument.

The carrying amounts of the Company's financial assets and liabilities, such as
cash, prepaid expenses and accrued expenses, approximate their fair values
because of the short maturity of these instruments.

Transactions involving related parties cannot be presumed to be carried out on
an arm's-length basis, as the requisite conditions of competitive, free-market
dealings may not exist. Representations about transactions with related parties,
if made, shall not imply that the related party transactions were consummated on
terms equivalent to those that prevail in arm's-length transactions unless such
representations can be substantiated.

It is not however, practical to determine the fair value of advances from
stockholders due to their related party nature.

CASH EQUIVALENTS

The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.

RELATED PARTIES

The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the
Company; b. entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of Section 825-10-15, to be accounted for by the equity method
by the investing entity; c. trusts for the benefit of employees, such as pension
and profit-sharing trusts that are managed by or under the trusteeship of
management; d.principal owners of the Company; e. management of the Company; f.
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g. other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.

The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: a. the nature of the relationship(s) involvedb. description of the
transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and
such other information deemed necessary to an understanding of the effects of
the transactions on the financial statements; c. the dollar amounts of
transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that
used in the preceding period; and amounts due from or to related parties as of
the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.

COMMITMENT AND CONTINGENCIES

The Company follows subtopic 450-20 of the FASB Accounting Standards
Codification to report accounting for contingencies. Certain conditions may
exist as of the date the consolidated financial statements are issued, which may
result in a loss to the Company but which will only be resolved when one or more
future events occur or fail to occur. The Company assesses such contingent
liabilities, and such assessment inherently involves an exercise of judgment. In
assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings,
the Company evaluates the perceived merits of any legal proceedings or
unasserted claims as well as the perceived merits of the amount of relief sought
or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material
loss has been incurred and the amount of the liability can be estimated, then
the estimated liability would be accrued in the Company's consolidated financial
statements. If the assessment indicates that a potential material loss
contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and material, would be
disclosed.

Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time, that these
matters will have a material adverse effect on the Company's consolidated
financial position, results of operations or cash flows. However, there is no
assurance that such matters will not materially and adversely affect the
Company's business, financial position, and results of operations or cash flows.

REVENUE RECOGNITION

The Company follows paragraph 605-10-S99-1 of the FASB Accounting Standards
Codification for revenue recognition. The Company will recognize revenue when it
is realized or realizable and earned. The Company considers revenue realized or
realizable and earned when it has persuasive evidence of an arrangement that the
services have been rendered to the customer, the sales price is fixed or
determinable, and collectability is reasonably assured.

INCOME TAXES

The Company accounts for income taxes under Section 740-10-30 of the FASB
Accounting Standards Codification. Deferred income tax assets and liabilities
are determined based upon differences between the financial reporting and tax
bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. 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 the statements
of operations in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards
Codification ("Section 740-10-25"). Section 740-10-25 addresses the
determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under Section 740-10-25,
the Company may recognize the tax benefit from an uncertain tax position only if
it is more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical merits of the
position. The tax benefits recognized in the financial statements from such a
position should be measured based on the largest benefit that has a greater than
fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures. The Company had no material adjustments to its
liabilities for unrecognized income tax benefits according to the provisions of
Section 740-10-25.

NET LOSS PER COMMON SHARE

Net loss per common share is computed pursuant to section 260-10-45 of the FASB
Accounting Standards Codification. Basic net loss per common share is computed
by dividing net loss by the weighted average number of shares of common stock
outstanding during the period. Diluted net loss per common share is computed by
dividing net loss by the weighted average number of shares of common stock and
potentially outstanding shares of common stock during the period.

There were no potentially dilutive shares outstanding as of March 31, 2011 or
2010.

CASH FLOWS REPORTING

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards
Codification for cash flows reporting, classifies cash receipts and payments
according to whether they stem from operating, investing, or financing
activities and provides definitions of each category, and uses the indirect or
reconciliation method ("Indirect method") as defined by paragraph 230-10-45-25
of the FASB Accounting Standards Codification to report net cash flow from
operating activities by adjusting net income to reconcile it to net cash flow
from operating activities by removing the effects of (a) all deferrals of past
operating cash receipts and payments and all accruals of expected future
operating cash receipts and payments and (b) all items that are included in net
income that do not affect operating cash receipts and payments.

SUBSEQUENT EVENTS

The Company follows the guidance in Section 855-10-50 of the FASB Accounting
Standards Codification for the disclosure of subsequent events. The Company will
disclose the date through which subsequent events have been evaluated and that
date is the date when the financial statements were issued.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In January 2010, the FASB issued the FASB Accounting Standards Update No.
2010-06 "FAIR VALUE MEASUREMENTS AND DISCLOSURES (TOPIC 820) IMPROVING
DISCLOSURES ABOUT FAIR VALUE MEASUREMENTS", which provides amendments to
Subtopic 820-10 that requires new disclosures as follows:

1. Transfers in and out of Levels 1 and 2. A reporting entity should
disclose separately the amounts of significant transfers in and out of
Level 1 and Level 2 fair value measurements and describe the reasons
for the transfers.
2. Activity in Level 3 fair value measurements. In the reconciliation for
fair value measurements using significant unobservable inputs (Level
3), a reporting entity should present separately information about
purchases, sales, issuances, and settlements (that is, on a gross
basis rather than as one net number).

This Update provides amendments to Subtopic 820-10 that clarify existing
disclosures as follows:

1. Level of disaggregation. A reporting entity should provide fair value
measurement disclosures for each class of assets and liabilities. A
class is often a subset of assets or liabilities within a line item in
the statement of financial position. A reporting entity needs to use
judgment in determining the appropriate classes of assets and
liabilities.
2. Disclosures about inputs and valuation techniques. A reporting entity
should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair
value measurements. Those disclosures are required for fair value
measurements that fall in either Level 2 or Level 3.

This Update also includes conforming amendments to the guidance on employers'
disclosures about postretirement benefit plan assets (Subtopic 715-20). The
conforming amendments to Subtopic 715-20 change the terminology from MAJOR
CATEGORIES of assets to CLASSES of assets and provide a cross reference to the
guidance in Subtopic 820-10 on how to determine appropriate classes to present
fair value disclosures. The new disclosures and clarifications of existing
disclosures are effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about purchases, sales,
issuances, and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after
December 15, 2010, and for interim periods within those fiscal years.

In December 2010, the FASB issued the FASB Accounting Standards Update No.
2010-28 "INTANGIBLES--GOODWILL AND OTHER (TOPIC 350): WHEN TO PERFORM STEP 2 OF
THE GOODWILL IMPAIRMENT TEST FOR REPORTING UNITS WITH ZERO OR NEGATIVE CARRYING
AMOUNTS" ("ASU 2010-28").Under ASU 2010-28, if the carrying amount of a
reporting unit is zero or negative, an entity must assess whether it is more
likely than not that goodwill impairment exists. To make that determination, an
entity should consider whether there are adverse qualitative factors that could
impact the amount of goodwill, including those listed in ASC 350-20-35-30. As a
result of the new guidance, an entity can no longer assert that a reporting unit
is not required to perform the second step of the goodwill impairment test
because the carrying amount of the reporting unit is zero or negative, despite
the existence of qualitative factors that indicate goodwill is more likely than
not impaired. ASU 2010-28 is effective for public entities for fiscal years, and
for interim periods within those years, beginning after December 15, 2010, with
early adoption prohibited.

In December 2010, the FASB issued the FASB Accounting Standards Update No.
2010-29 "BUSINESS COMBINATIONS (TOPIC 805): DISCLOSURE OF SUPPLEMENTARY PRO
FORMA INFORMATION FOR BUSINESS COMBINATIONS" ("ASU 2010-29"). ASU 2010-29
specifies that if a public entity presents comparative financial statements, the
entity should disclose revenue and earnings of the combined entity as though the
business combination(s) that occurred during the current year had occurred as of
the beginning of the comparable prior annual reporting period only. The
amendments in this Update also expand the supplemental pro forma disclosures
under Topic 805 to include a description of the nature and amount of material,
nonrecurring pro forma adjustments directly attributable to the business
combination included in the reported pro forma revenue and earnings. The amended
guidance is effective prospectively for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2010. Early adoption is permitted.

Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying consolidated financial statements.

RESULTS OF OPERATIONS

REVENUES

We had no revenues for the period from December 27, 2007 (date of inception),
through March 31, 2011.

EXPENSES

Our expenses for the twelve month periods ended March 31, 2011 and 2010, were
$12,815and $32,722, respectively. During the period from December 27, 2007 (date
of inception), through March 31, 2011, we incurred expenses of $55,144. These
expenses were comprised primarily of professional fees and general and
administrative expenses.

NET INCOME (LOSS)

Our net loss for the twelve-month periods ended March 31, 2011, and 2010, were
$12,815 and $32,722, respectively. During the period from December 27, 2007
(date of inception), through March 31, 2011, we incurred a net loss of $55,144.
This loss consisted of professional fees and general and administrative
expenses. Since inception, we have sold 77,700,000 shares of common stock.

OFF BALANCE SHEET TRANSACTIONS

We have had no off balance sheet transactions.

SIGNIFICANT EQUIPMENT

We do not intend to purchase or sell any plant or significant equipment for the
next twelve months.

LIQUIDITY AND CAPITAL RESOURCES

Our balance sheet as of March 31, 2011, reflects assets of $3,761 in the form of
cash and prepaid expenses. Since inception, we have sold 77,700,000 shares of
common stock with gross proceeds of $51,000. Cash resources provided from our
capital formation activities have, from inception, been sufficient to provide
the working capital necessary to operate our Company.

We anticipate generating losses in the near term, and therefore, may be unable
to continue operations in the future. We require additional capital, and we may
have to issue debt or equity or enter into a strategic arrangement with a third
party to obtain such capital. There can be no assurance that additional capital
will be available to us. We currently have no agreements, arrangements, or
understandings with any person to obtain funds through bank loans, lines of
credit, or any other sources.

GOING CONCERN CONSIDERATION

Our registered independent auditors included an explanatory paragraph in their
report on the accompanying financial statements regarding concerns about our
ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our registered independent auditors.

Due to this doubt about our ability to continue as a going concern, management
is open to new business opportunities which may prove more profitable to the
shareholders of Advanced Messaging Solutions Inc.. In the past, we have been
able to raise a limited amount of capital through private placements of our
equity stock, but we are uncertain about our continued ability to raise funds
privately. Further, we believe that our company may have difficulties raising
capital unless we locate a prospective new business opportunity through which we
can pursue a new plan of operation. If we are unable to secure adequate capital
to implement our current business plan or to continue our acquisition efforts of
a new business opportunity, our business may fail and our stockholders may lose
some or all of their investment.

Should our original business plan fail, we anticipate that the selection of a
business opportunity in which to participate will be complex and without
certainty of success. Management believes that there are numerous firms in
various industries seeking the perceived benefits of being a publicly registered
corporation. Business opportunities may be available in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. We can provide no assurance that we will be
able to locate compatible business opportunities.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)

March 31, 2011 and 2010

Index to Financial Statements

Contents. Page(s)
--------- -------

Report of Independent Registered Public Accounting Firm................ 23

Balance Sheets at March 31, 2011 and 2010.............................. 24

Statements of Operations for the Fiscal Years Ended March 31, 2011
and 2010 and for the Period from December 27, 2007 (Inception)
through March 31, 2011 ................................................ 25

Statement of Stockholders' Equity (Deficit) for the Period from
December 27, 2007 (Inception) through March 31, 2011 .................. 26

Statements of Cash Flows for the Fiscal Years Ended March 31, 2011
and 2010 and for the Period from December 27, 2007 (Inception)
through March 31, 2011................................................. 27

Notes to the Financial Statements...................................... 28

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of XcelMobility Inc.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)
Gold River, California

We have audited the accompanying balance sheets of XcelMobility Inc., (formerly
Advanced Messaging Solutions Inc.) a development stage company, (the "Company")
as of March 31, 2011 and 2010 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the fiscal years then ended,
and for the period from December 27, 2007 (inception) through March 31, 2011.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of March 31,
2011 and 2010 and the results of its operations and its cash flows for the
fiscal years then ended, and for the period from December 27, 2007 (inception)
through March 31, 2011 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company had a deficit accumulated during the
development stage at March 31, 2011 and had a net loss and net cash used in
operating activities for the fiscal year then ended, with no revenues earned
since inception. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regards to these
matters are also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Li & Company, PC
----------------------------------
Li & Company, PC

Skillman, New Jersey
June 21, 2011

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)

BALANCE SHEETS

March 31, March 31,
2011 2010
-------- --------

ASSETS

CURRENT ASSETS
Cash $ 2,160 $ 20,131
Prepaid expenses 1,601 240
-------- --------
Total current assets 3,761 20,371
-------- --------

Total assets $ 3,761 $ 20,371
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable $ 7,805 $ 11,600
Due to stockholder 100 100
-------- --------
Total current liabilities 7,905 11,700
-------- --------

Total liabilities 7,905 11,700
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: $0.001 par value; 20,000,000 shares authorized;
no shares issued or Outstanding -- --
Common stock: $0.001 par value; 100,000,000 shares authorized;
77,700,000 shares issued and Outstanding 77,700 77,700
Additional paid-in capital (26,700) (26,700)
Deficit accumulated during the development stage (55,144) (42,329)
-------- --------
Total stockholders' equity (deficit) (4,144) 8,671
-------- --------

Total liabilities and stockholders' equity (deficit) $ 3,761 $ 20,371
======== ========

See accompanying notes to the financial statements.

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)

STATEMENTS OF OPERATIONS

From
December 27, 2007
Fiscal Year Fiscal Year (Inception)
Ended Ended through
March 31, March 31, March 31,
2011 2010 2011
------------ ------------ ------------

REVENUE $ -- $ -- $ --
------------ ------------ ------------
OPERATING EXPENSES
Professional fees 5,250 27,132 39,382
General and administrative 7,565 5,590 15,762
------------ ------------ ------------

Loss before income taxes (12,815) (32,722) (55,144)

Provision for income taxes -- -- --
------------ ------------ ------------

Net loss $ (12,815) $ (32,722) $ (55,144)
============ ============ ============
Net loss per common share -
basic and diluted $ (0.00) $ (0.00)
============ ============

Weighted average number of common shares outstanding -
Basic and diluted 77,700,000 77,700,000
============ ============

See accompanying notes to the financial statements.

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the period from December 27, 2007 (Inception) through March 31, 2011

Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
--------------------- Paid in Development Equity
Shares Amount Capital Stage (Deficit)
------ ------ ------- ----- ---------

Inception, December 27, 2007 52,500,000 $52,500 $(37,500) $ -- $ 15,000

Net income -- --
---------- ------- -------- -------- --------

Balance, March 31, 2008 52,500,000 52,500 (37,500) -- 15,000

Shares issued at $0.05 per
share from September 16, 2008
to December 29, 2008 25,200,000 25,200 10,800 -- 36,000

Net loss (9,607) (9,607)
---------- ------- -------- -------- --------

Balance, March 31, 2009 77,700,000 77,700 (26,700) (9,607) 41,393

Net loss (32,722) (32,722)
---------- ------- -------- -------- --------

Balance, March 31, 2010 77,700,000 77,700 (26,700) (42,329) 8,671

Net loss (12,815) (12,815)
---------- ------- -------- -------- --------

Balance, March 31, 2011 77,700,000 77,700 (26,700) $(55,144) $ (4,144)
========== ======= ======== ======== ========

See accompanying notes to the financial statements.

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)

STATEMENTS OF CASH FLOWS

From
December 27, 2007
Fiscal Year Fiscal Year (Inception)
Ended Ended through
March 31, March 31, March 31,
2011 2010 2011
-------- -------- --------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(12,815) $(32,722) $(55,144)
Adjustments to reconcile net loss to net cash
used in operating activities:
Changes in operating assets and liabilities
Prepaid expenses (1,361) 599 (1,601)
Accounts payable (3,795) 7,600 7,805
-------- -------- --------

Net cash used in operating activities (17,971) (24,523) (48,940)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in due to stockholder -- -- 100
Proceeds from issuance of common stock -- -- 51,000
-------- -------- --------

Net cash provided by financing activities -- -- 51,100
-------- -------- --------

Net change in cash (17,971) (24,523) 2,160

Cash, beginning of the period 20,131 44,654 --
-------- -------- --------

Cash, end of the period $ 2,160 $ 20,131 $ 2,160
======== ======== ========

Supplemental disclosures of cash flow information

Cash paid for:
Interest $ -- $ -- $ --
======== ======== ========
Income taxes $ -- $ -- $ --
======== ======== ========

See accompanying notes to the financial statements.

XCELMOBILITY INC.
(Formerly Advanced Messaging Solutions Inc.)
(A Development Stage Company)
March 31, 2011 and 2010

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS

XcelMobility Inc. (formerly Advanced Messaging Solutions Inc.) (a development
stage company) ("Xcel" or the "Company") was incorporated under the laws of the
State of Nevada on December 27, 2007. Initial operations have included
organization and incorporation, target market identification, marketing plans,
and capital formation. A substantial portion of the Company's activities has
involved developing a business plan and establishing contacts and visibility in
the marketplace. The Company is engaged in the development and marketing of
secure text messaging service for desktop computer users. The Company has
generated no revenues since inception.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Company's financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America ("U.S.
GAAP").

DEVELOPMENT STAGE COMPANY

USE OF ESTIMATES

Due to the limited level of operations, the Company has not had to make material
assumptions or estimates other than the assumption that the Company is a going
concern.

FISCAL YEAR END

The Company elected March 31 as its fiscal year ending date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 1 Quoted market prices available in active markets for identical
assets or liabilities as of the reporting date.

Level 2 Pricing inputs other than quoted prices in active markets included
in Level 1, which are either directly or indirectly observable as of
the reporting date.

Level 3 Pricing inputs that are generally observable inputs and not
corroborated by market data.

It is not however, practical to determine the fair value of advances from
stockholders due to their related party nature.

CASH EQUIVALENTS

The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.

RELATED PARTIES

The Company follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and disclosure of related
party transactions.

The financial statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense allowances, and
other similar items in the ordinary course of business. However, disclosure of
transactions that are eliminated in the preparation of consolidated or combined
financial statements is not required in those statements. The disclosures shall
include: a. the nature of the relationship(s) involvedb. description of the
transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and
such other information deemed necessary to an understanding of the effects of
the transactions on the financial statements; c. the dollar amounts of
transactions for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the terms from that
used in the preceding period; and d. mounts due from or to related parties as of
the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.

COMMITMENT AND CONTINGENCIES

REVENUE RECOGNITION

INCOME TAXES

NET LOSS PER COMMON SHARE

There were no potentially dilutive shares outstanding as of March 31, 2011 or
2010.

CASH FLOWS REPORTING

SUBSEQUENT EVENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

This Update provides amendments to Subtopic 820-10 that clarify existing
disclosures as follows:

NOTE 3 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As reflected in the accompanying
financial statements, the Company had a deficit accumulated during the
development stage of $55,144 at March 31, 2011, a net loss of $12,815 and net
cash used in operating activities of $17,971 for the year then ended with no
revenues earned since inception.

While the Company is attempting to generate sufficient revenues, the Company's
cash position may not be enough to support the Company's daily operations.
Management intends to raise additional funds by way of a public or private
offering. Management believes that the actions presently being taken to further
implement its business plan and generate sufficient revenues provide the
opportunity for the Company to continue as a going concern. While the Company
believes in the viability of its strategy to generate sufficient revenues and in
its ability to raise additional funds, there can be no assurances to that
effect. The ability of the Company to continue as a going concern is dependent
upon the Company's ability to further implement its business plan and generate
sufficient revenues.

The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.

NOTE 4 - RELATED PARTY TRANSACTIONS

FREE OFFICE SPACE

The Company has been provided office space by its Chief Executive Officer at no
cost. The management determined that such cost is nominal and did not recognize
the rent expense in its financial statements.

DUE TO STOCKHOLDER

The amount owing to a stockholder is unsecured, non-interest bearing and is
payable on demand.

NOTE 5 - STOCKHOLDERS' EQUITY

SALE OF COMMON STOCK

On December 27, 2007 the Company issued 1,500,000 shares of its common stock at
$0.05 per share to the company's directors for $15,000 in the form of stock
subscription receivables, all of which were collected on April 22, 2008.

For the period from September 16, 2008 to December 29, 2008 the company sold
720,000 shares of its common stock at $0.05 per share for $36,000 to 36
individuals.

On March 29, 2011, the Company effected a 35 for 1 forward stock split of all of
its issued and outstanding shares of common stock. The forward split increased
the number of the Company's issued and outstanding common stock to 77,700,000,
from the current 2,220,000. The financial statements give retroactive effect to
this forward stock split.

NOTE 6 - INCOME TAXES

DEFERRED TAX ASSETS

At March 31, 2011, the Company had net operating loss ("NOL") carry-forwards for
Federal income tax purposes of $55,144 that may be offset against future taxable
income through 2031. No tax benefit has been reported with respect to these net
operating loss carry-forwards in the accompanying financial statements because
the Company believes that the realization of the Company's net deferred tax
assets of approximately $18,749 was not considered more likely than not and
accordingly, the potential tax benefits of the net loss carry-forwards are fully
offset by a valuation allowance of $18,749.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.
The Company has provided a full valuation allowance on the deferred tax assets
because of the uncertainty regarding its realizability. The valuation allowance
increased approximately $4,357 and $11,125 for the fiscal years ended March 31,
2011 and 2010, respectively.

Components of deferred tax assets at March 31, 2011 and 2010 are as follows:

March 31, March 31,
2011 2010
-------- --------
Net deferred tax assets - Non-current:
Expected income tax benefit from NOL carry-forwards $ 18,749 $ 14,392
Less valuation allowance (18,749) (14,392)
-------- --------

Deferred tax assets, net of valuation allowance $ -- $ --
======== ========

INCOME TAXES IN THE STATEMENTS OF OPERATIONS

A reconciliation of the federal statutory income tax rate and the effective
income tax rate as a percentage of income before income taxes is as follows:

For the Fiscal For the Fiscal
Year Ended Year Ended
March 31, March 31,
2011 2010
-------- --------
Federal statutory income tax rate 34.0% 34.0%
Change in valuation allowance on net operating
loss carry-forwards (34.0)% (34.0)
Effective income tax rate 0.0% 0.0%

NOTE 7 - SUBSEQUENT EVENTS

The Company has evaluated all events that occurred after the balance sheet
through the date when the financial statements were issued to determine if they
must be reported. The Management of the Company determined that there were no
reportable subsequent events to be disclosed.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), as of March 31, 2011, we carried out an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures. This evaluation was carried out under the supervision
and with the participation of our management, our President (Principal Executive
Officer and Principal Financial Officer). Based upon the results of that
evaluation, our management has concluded that, as of March 31, 2011, our
disclosure controls and procedures were effective, in that they provide
reasonable assurance that material information related to our Company required
to be disclosed in the reports that 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 management to allow timely decisions on required disclosure.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange
Act of 1934 as a process designed by, or under the supervision of, the company's
principal executive and principal financial officers and effected by the
company's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States of America and
includes those policies and procedures that:

- Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the
assets of the company;
- Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with accounting principles generally accepted in the United States of
America and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and
directors of the company; and
- Provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the company's
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. All internal control systems,
no matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Because of the
inherent limitations of internal control, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are known
features of the financial reporting process. Therefore, it is possible to design
into the process safeguards to reduce, though not eliminate, this risk.

As of March 31, 2011, our principal executive officer and principal financial
officer assessed the effectiveness of our internal control over financial
reporting based on the criteria for effective internal control over financial
reporting established in Internal Control--Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and
SEC guidance on conducting such assessments. Based on that evaluation, he
concluded that, during the period covered by this report, such internal controls
and procedures were not effective. This was due to deficiencies that existed in
the design or operation of our internal controls over financial reporting
described below which adversely affected our internal controls and which may be
considered to be material weaknesses.

The matters involving internal controls and procedures that our principal
executive officer and principal financial officer considered to be material
weaknesses under the standards of the Public Company Accounting Oversight Board
were: (1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our board
of directors, resulting in ineffective oversight in the establishment and
monitoring of required internal controls and procedures; (2) inadequate
segregation of duties consistent with control objectives; and (3) ineffective
controls over period end financial disclosure and reporting processes. The
aforementioned material weaknesses were identified by our principal executive
officer and principal financial officer in connection with the audit of our
financial statements as of March 31, 2011.

Our principal executive officer and principal financial officer believes that
the material weaknesses set forth in items (2) and (3) above did not have an
effect on our financial results. However, our principal executive officer and
principal financial officer believes that the lack of a functioning audit
committee and the lack of a majority of outside directors on our board of
directors result in ineffective oversight in the establishment and monitoring of
required internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.

This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the SEC that
permit the Company to provide only the management's report in this annual
report.

MANAGEMENT'S REMEDIATION INITIATIVES

In an effort to remediate the identified material weaknesses and other
deficiencies and enhance our internal controls, we have initiated, or plan to
initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives
and will increase our personnel resources and technical accounting expertise
within the accounting function when funds are available to us. And, we plan to
appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who
shall be appointed to a fully functioning audit committee, will remedy the lack
of a functioning audit committee and a lack of a majority of outside directors
on our Board.

We anticipate that these initiatives will be at least partially, if not fully,
implemented by December 31, 2011. Additionally, we plan to test our updated
controls and remediate our deficiencies by July 31, 2012.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, which has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE
OFFICER AND DIRECTORS.

Our officers and directors and their ages and positions are as follows:

Name Age Position
---- --- --------

Jaime Brodeth 44 President and Director

Moses Carlo Supera Paez 28 Director

BIOGRAPHICAL INFORMATION

Set forth below is a brief description of the background and business experience
of our executive officer and director for the past five years.

JAIME BRODETH has served as our President and Director since our inception on
December 27, 2007. Since November 2004, Mr. Brodeth has served as a supervisor
at the North American Analytics Research department of Georgeson Shareholder
Analytics where he is responsible for receipt, deployments and tracking of
workload as well as keeping a high level of data integrity while meeting
throughput targets. From February 2004 through June 2004, Mr. Brodeth worked for
Tomas, Vitaly & Partners, as the Administration Manager of the representative
office of the Cyprus-based company, which served as a sub-contractor to Anthony
Frisone, National Futures Association, a United States based foreign exchange
trading company conducting currency trades for clients, where Mr. Brodeth was
responsible for supervising the lead generation department and overseeing the
publication of trading reports. From January 2002 through November 2003 Mr.
Brodeth worked as the Marketing Manager for Folyovolgy, a Hungarian venture
capital firm with an office in the Philippines, where he managed the resource
desk that invited clients to participate in the company's funding initiatives.
Mr. Brodeth graduated from Sillman University, Philippines with a BS Psychology
in 1988.

MOSES CARLO SUPERA PAEZ has served as our Director since our inception on
December 27, 2007. Since March 2007, Mr. Paez has served as a Web
Developer/Programmer and Technical Support person for Supersoft Technology Inc.
While at Supersoft, Mr. Paez has developed and maintained SMS-based systems that
are used for the automation of sending and receiving short message service and
has been involved in developing and maintaining a point-of-sale ("POS") system
for incoming and outgoing sales, printing of receipts and sales invoices. Mr.
Paez is also involved in the maintenance and enhancement of a Multi Level
Marketing system used for handling the payout for multi-level marketers. Mr.
Paez also handles maintenance of computer servers, provides technical support
for users, handles troubleshooting and conducts computer training as needed.
Prior to Supersoft Technology Inc., Mr. Paez was a student and did not have any
significant employment. Mr. Paez graduated from AMA Computer College, Davao
City, Philippines with a B.S. Computer Engineering in 2005.

COMMITTEES OF THE BOARD OF DIRECTORS

To date, our Board of Directors has not established a nominating and governance
committee, a compensation committee, nor an audit committee.

CODE OF ETHICS

We currently do not have a Code of Ethics.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, executive officers, and stockholders holding more than 10% of our
outstanding common stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in beneficial ownership of
our common stock. Executive officers, directors and greater-than-10%
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) reports they file. To our knowledge, based solely on review of the
copies of such reports furnished to us for the period ended March 31, 2010, no
Section 16(a) reports required to be filed by our executive officers, directors
and greater-than-10% stockholders were not filed on a timely basis.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

No director, executive officer, significant employee or control person of the
Company has been involved in any legal proceeding listed in Item 401(f) of
Regulation S-K in the past 10 years.

ITEM 11. EXECUTIVE COMPENSATION.

The particulars of compensation paid to the following persons during the fiscal
period ended March 31, 2010 are set out in the summary compensation table below:

* our Chief Executive Officer (Principal Executive Officer);
* our Chief Financial Officer (Principal Financial Officer);
* each of our three most highly compensated executive officers, other
than the Principal Executive Officer and the Principal Financial
Officer, who were serving as executive officers at the end of the
fiscal year ended March 31, 2011; and
* up to two additional individuals for whom disclosure would have been
provided under the item above but for the fact that the individual was
not serving as our executive officer at the end of the fiscal year
ended March 31, 2011;

(collectively, the "Named Executive Officers"):

SUMMARY COMPENSATION TABLE

Fiscal Non-Equity Nonqualified
Name and Year Incentive Deferred
Principal Ended Stock Option Plan Compensation All Other
Position July 31, Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- -------- --------- -------- --------- --------- --------------- ----------- --------------- ---------

Mr. Jaime 2011 0 0 0 0 0 0 0 0
Brodeth (1) 2010 0 0 0 0 0 0 0 0

Notes:

(1) Mr. Brodeth has been our President and a Director since we were
incorporated on December 27, 2007.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

Option Awards Stock Awards
---------------------------------------------------------------- ----------------------------------------------
Equity
Incentive
Equity Plan
Incentive Awards:
Plan Market or
Awards: Payout
Equity Number of Value of
Incentive Number Unearned Unearned
Plan Awards; of Market Shares, Shares,
Number of Number of Number of Shares Value of Units or Units or
Securities Securities Securities or Units Shares or Other Other
Underlying Underlying Underlying of Stock Units of Rights Rights
Unexercised Unexercised Unexercised Option Option That Stock That That That
Options Options Unearned Exercise Expiration Have Not Have Not Have Not Have Not
Name Exercisable(#) Unexercisable(#) Options(#) Price($) Date Vested(#) Vested($) Vested(#) Vested($)
---- -------------- ---------------- ---------- ----- ---- --------- --------- --------- ---------

Mr. Jaime
Brodeth -- -- -- -- -- -- -- -- --

OPTION GRANTS AND EXERCISES

There were no option grants or exercises by any of the executive officers named
in the Summary Compensation Table above.

EMPLOYMENT AGREEMENTS

We have not entered into employment and/or consultant agreements with our
Directors and officers.

COMPENSATION OF DIRECTORS

All directors receive reimbursement for reasonable out-of-pocket expenses in
attending board of directors meetings and for promoting our business. From time
to time we may engage certain members of the board of directors to perform
services on our behalf. In such cases, we compensate the members for their
services at rates no more favorable than could be obtained from unaffiliated
parties. Our directors have not received any compensation for the fiscal year
ended March 31, 2011.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

BENEFICIAL OWNERSHIP OF HOLDINGS

The table below sets forth the number and percentage of shares of our common
stock owned as of March 31, 2011 , by the following persons: (i) stockholders
known to us who own 5% or more of our outstanding shares, (ii) each of our
Directors, and (iii) our officers and Directors as a group. Unless otherwise
indicated, each of the stockholders has sole voting and investment power with
respect to the shares beneficially owned.

Name and Address of Amount and Nature Percentage of
Title of Class Beneficial Owner(2) of Beneficial Ownership Class(1)
-------------- ------------------- ----------------------- --------

Common Stock Mr. Jaime Brodeth 26,250,000 33.78%

Common Stock Mr. Moses Carlo Supera Paez 26,250,000 33.78%

all officers as
a Group 52,500,000 67.57%

----------
(1) Based on 77,700,000 shares of our common stock outstanding.

CHANGES IN CONTROL

There are no existing arrangements that may result in a change in control of the
Company.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table sets forth information regarding our equity compensation
plans.

Number of Number of securities
securities to be issued Weighted-average remaining available for future
upon exercise of exercise price of issuance under equity
outstanding options, outstanding options, compensation plans (excluding
Plan category warrants and rights warrants and rights securities reflected in column (a)
------------- ------------------- ------------------- ----------------------------------
(a) (b) (c)

Equity compensation
plans approved by
security holders -- -- --

Equity compensation
plans not approved
by security holders -- -- --

Total -- -- --

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.

Other than the transactions discussed below, we have not entered into any
transaction nor are there any proposed transactions in which any of our
Directors, executive officers, stockholders or any member of the immediate
family of any of the foregoing had or is to have a direct or indirect material
interest.

As at March 31, 2011, there is a balance owing to a stockholder of the Company
in the amount of $100.

The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities that become available. They may face a conflict in selecting
between the Company and other business interests. The Company has not formulated
a policy for the resolution of such conflicts.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

For the year ended March 31, 2011, Li & Company, PC billed us for $4,500 in
audit fees. For the March 31, 2010, Li & Company, PC billed us for $4,500 in
audit fees.

REVIEW FEES

Li & Company, PC billed us $2,250 for reviews of our quarterly financial
statements in 2011 that are not reported under Audit Fees above.

TAX AND ALL OTHER FEES

We did not pay any fees to Li & Company, PC for tax compliance, tax advice, tax
planning or other work during our fiscal year ended March 31, 2010.

PRE-APPROVAL POLICIES AND PROCEDURES

We have implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our board of
directors pre-approves all services to be provided by Li & Company, PC and the
estimated fees related to these services.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibit Description
------- -----------

3.1 Articles of Incorporation of Registrant (Attached as an exhibit to our
Registration Statement on Form S-1 originally filed with the SEC on
October 14, 2009, as amended by that Amendment to Articles of
Incorporation attached as an exhibit to our Current Report on Form 8-K
filed with the SEC on March 29, 2011, and incorporated herein by
reference.)

3.2 Amended and Restated Bylaws. (Attached as an exhibit to our Current
Report on Form 8-K filed with the SEC on April 27, 2011 and
incorporated herein by reference.)

10.1 Letter of Intent by and between Shenzhen CC Power Corporation and
Advanced Messaging Solutions, Inc. (n/k/a XcelMobility Inc.), dated
March 8, 2011. (Attached as an exhibit to our Current Report on Form
8-K originally filed with the SEC on March 9, 2011 and incorporated
herein by reference)

31.1 Certification of the Chief Executive and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Officers pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

XCELMOBILITY INC.

June 21, 2011 By: /s/ Jaime Brodeth
----------------------------------
Jaime Brodeth
President and Director
(Principal Executive Officer,
Principal Financial Officer and
Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.

Signatures Title Date
---------- ----- ----

/s/ Jaime Brodeth President and Director June 21, 2011
---------------------------------- (Principal Executive Officer,
Jaime Brodeth Principal Financial Officer and
Principal Accounting Officer)

/s/ Moses Carlo Supera Paez Director June 21, 2011
----------------------------------
Moses Carlo Supera Paez

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