Form 10-Q

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10-Q 1 d231871d10q.htm FORM 10-Q Form 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Nine Months Ended September 30, 2011

Commission File No. 0-8488

TWENTY SERVICES, INC.

(Exact name of Registrant as specified in its Charter)


ALABAMA		63-0372577
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer ID No.)

20 Cropwell Drive, Suite 100		Pell City, Alabama 35128
(Address or principal executive offices)		(City, State, Zip)

Registrant’s telephone number, including area code 205-884-7932

Former name, former address, and former fiscal year, if changed since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

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

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the period of this report.

Par Value $0.10 per share 1,283,068 shares

TWENTY SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2011 Unaudited			December 31, 2010 Audited
ASSETS
Cash and temporary investment	$	134,540			94,206
Marketable securities		3,502,449			4,413,690
Notes receivables, net of allowance		00			28,520
Deferred tax asset		00			—
Other assets		22,553			22,553

Total assets		3,659,542		$	4,558,969

LIABILITIES AND STOCKHOLDER’S EQUITY
Liabilities:
Accounts payable and accrued expenses	$	49,408		$	79,448
Deferred tax liability		134,356			393,114

Total liabilities		183,764			472,562

Stockholder’s equity:
Preferred stock, Cumulative $0.10 par value, 7% cumulative 2,500,000 shares authorized, 505,110 shares issued and outstanding		50,511			50,511
Common stock, $.10 par value, 25,000,000 shares authorized, 1,283,068 issued and outstanding		128,307			128,307
Additional paid-in capital		1,716,074			1,716,074
Retained earnings		1,115,649			1,126,664
Accumulated other comprehensive income		849,924			1,422,716
Less investment in Twenty Services Holding		(60,000	)		(60,000	)
Treasury Stock		(324,687	)		(297,865	)

Net stockholder’s equity		3,475,778			4,086,407

Total liabilities and stockholder’s equity		3,659,542		$	4,558,969

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TWENTY SERVICES, INC.

Statements of Operations


	Nine Months Ended						Three Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011		September 30, 2010
Revenue
Interest	$	63,718		$	56,468		$	26,986	$	26,474
Dividends		8,222			12,680			2,418		2,962
Other		2,486			0			18		0

Total revenue		74,426			69,148			29,422		29,436
Operating Expenses
General and administrative		91,528			94,303			10,524		21,126

Income (loss) from Operations		(17,102	)		(25,155	)		18,898		8,310
Other Income (Loss)
Gain (loss) on sale of marketable securities		6,205			13,500			9,144		0

Loss Before Income Taxes	$	(10,897	)	$	(11,655	)	$	28,042	$	8,310

Net Income (Loss)	$	(10,897	)	$	(11,655	)	$	28,042	$	8,310

Weighted average number of shares outstanding		1,283,068			1,283,068			1,283,068		1,283,068

Income (loss) per Common Shares	$	(0.01	)	$	(0.01	)	$	0.02	$	0.01

*	After giving effect on a pro-rata basis to anticipated preferred dividends of $0.07 per share per annum on 505,110 shares

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TWENTY SERVICES, INC.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30,
	2011			2010
Cash flows from operating activities:
Interest and dividends received		74,426			82,721
Notes receivable repayments		28,520
Cash paid employees and supplier		(61,487	)		(94,303	)

Net cash provided by (used) operating activities		41,459			(11,582	)

Cash flows from investing activities
Net sale (purchase) of securities		61,056			(153,169	)
Purchase of Treasury Stock		(26,822	)		(1,675	)
Preferred Stock Dividend		(35,359	)		(27,187	)

Net cash provided (used) by investing activities		(1,125	)		(182,031	)

Net increase (decrease) in cash		40,334			(193,614	)

Cash and temporary investments, beginning of period		94,206			282,011

Cash and temporary investments, end of period	$	134,540		$	88,397

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

During the nine months ended September 30, 2011 the Registrant’s liquidity remained stable. The Company has neither notes payable nor long-term debt and does not anticipate the need for borrowing in the near future. The Registrant has sufficient cash and temporary cash investments to meet its short-term liquidity needs. Should long-term liquidity needs exceed cash and temporary cash investments, then the Registrant would dispose of marketable securities, as it deems appropriate. Current trends and known demands and commitments do not create a need for liquidity in excess of the Company’s current liabilities to generate liquidity.

The Company anticipates that its operating activities and its investing activities will generate net cash flows and that its financing activities will continue to use cash flows.

RESULTS OF OPERATIONS

The Registrant reported a net loss of $10,897 for the nine months ended September 30, 2011, as compared to the net loss of $11,655 for the corresponding 2010 period.

REVENUES

Revenues for the nine months ended September 30, 2011 of $74,426 were comparable to $69,148 for the corresponding 2010 period.

EXPENSES

General and administrative expenses decreased from $94,303 in 2010 to $ 91,528 for the corresponding 2011 period.

The above financial statements include all the adjustments, which in the opinion of Management, are necessary for a fair presentation of such financial information in conformity with generally accepted accounting principles. All adjustments are of a normal recurring nature.

The Company anticipates that its operating activities and its investing activities will generate net cash flows and that its financing activities will continue to use cash flows.

FAIR VALUE MEASUREMENTS

Accounting Principles emphasize that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, Accounting Principles establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the report entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Twenty’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

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	Fair Value Measurements at Reporting Date Using
Description	Quoted Prices in Active Markets for Identical Assets (Level l) 06/30/2011		Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Available-for-sale securities	$	3,502,448.76

Total	$	3,502,448.76

FINANCIAL DISCLOSURE AND INTERNAL CONTROLS

Twenty Services, Inc. maintains internal controls over financial reporting, which generally include those controls relating to the preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the U.S. As a small public company Twenty Services, Inc. is subject to the internal control reporting and attestation requirements under Section 13(a)-15 and 15(d)-15 of The Securities Exchange Act of 1934.

Twenty Services, Inc. has established processes to ensure appropriate disclosure controls and procedures are maintained. These controls and procedures as defined by the SEC are generally designed to ensure that financial information required to be disclosed in reports filed with the SEC is reported within the time periods specified in the SEC’s rules and regulations, and that such information is communicated to management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) as appropriate, to allow timely decisions regarding required disclosure.

Twenty Services, Inc.’s senior management is involved in the day-to-day operations of the Company. Management’s interaction and monitoring activities evaluate recent internal and external events to determine whether all appropriate disclosures have been made in reports filed with the SEC. The Forms 10-K and 10-Q are presented to the Board of Directors for approval. financial results and other financial information are also reviewed with the Audit Committee annually.

As required by applicable regulatory pronouncements, the CEO and CFO review and make various certifications regarding the accuracy of Twenty Services’ periodic public reports filed with the SEC, as well as the effectiveness of disclosure controls and procedures and internal controls over financial reporting.

Twenty Services, Inc.’s stock is not listed or traded and, therefore, not required to comply with corporate governance listing standards.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Annual Report on Form 10-K , the Company’s management evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on their evaluation of these disclosure controls and procedures, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule of 13a-15(f). The Company’s internal control system is designed to provide reasonable assurance to the Company’ management and the board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2011 based upon criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the assessment, management determined that we maintained effective internal control over financial reporting as of September 30, 2011 based on those criteria.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2011 that have materially affected, or are reasonable likely to materially affect, the Company’ internal control over financial reporting.

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PART II

OTHER INFORMATION


Item 1. Legal Proceedings		NONE

Item 2. Changes in Securities		NONE

Item 3. Defaults Upon Senior Securities		NONE

Item 4. Submission of Matters to a Vote of Securities Holders		NONE

Item 5. Other Information:		NONE

Item 6. EXHIBITS AND REPORTS ON FORM 10-Q

Exhibits:


31.1		SECTION 302 CEO CERTIFICATION
31.2		SECTION 302 VP CERTIFICATION
32.1		SECTION 906 CEO CERTIFICATION
32.2		SECTION 906 VP CERTIFICATION
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

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TWENTY SERVICES, INC.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



Date 11/09/2011				/s/ DAVID J. NOBLE
				David J. Noble
				Chairman/Director And Chief Executive Officer



Date 11/09/2011				/s/ SHIRLEY B. WHITAKER
				Shirley B. Whitaker
				Vice-President

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