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EX-31.2 - EX-31.2 - TWENTY SERVICES INCd507356dex312.htm
EX-31.1 - EX-31.1 - TWENTY SERVICES INCd507356dex311.htm

 

 

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 Three Months Ended March 31, 2013

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

Securities registered pursuant to Section 12(g) of the Act;

 

Title of each class:   COMMON STOCK
  7% Cumulative Preferred Stock *

 

 

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  ¨    No  x

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.

 

Large accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   ¨  (Do not check if a smaller reporting company)    Smaller reporting company   x

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 1,081,327 shares

As of March 31, 2013, the Registrant had 1,283,068 issued and 1,081,327 outstanding shares of common stock, par value of $0.10 per share, and as of March 31, 2013, the aggregate market value of the voting stock of the Registrant held by non-affiliates of the Registrant, based upon the book value of such shares as of such date, was approximately $4,483,662. Documents incorporated by reference: NONE

 

* Includes 7% Cumulative Series A-1980 Preferred Stock, 7% Cumulative Series A-1981 Preferred Stock, 7% Cumulative Series A-1982 Preferred Stock, and 7% Cumulative Series A-1985 Preferred Stock.

 

 

 


TWENTY SERVICES, INC.

BALANCE SHEET

 

     March 31,
2013
    December 31,
2012
 
ASSETS     

Cash and temporary investment

   $ 59,189      $ 90,221   

Marketable securities

     5,065,704        4,440,300   

Other assets

     22,553        22,553   
  

 

 

   

 

 

 

Total assets

   $ 5,147,446      $ 4,553,074   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Liabilities:

    

Accounts payable and accrued expenses

   $ 49,295      $ 48,648   

Accrued dividends payable

     26,786        —     

Deferred tax liability

     555,111        375,138   
  

 

 

   

 

 

 

Total liabilities

     631,192        423,786   

Stockholders’ 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

     1,068,449        1,126,837   

Accumulated other comprehensive income

     1,943,056        1,497,626   

Less investment in Twenty Services Holding

     (60,000     (60,000

Common treasury stock, 201,741 in 2013 and 2012 respectively

     (312,224     (312,224

Preferred treasury stock, , 71,243 and 70,941 in 2013 and 2012 respectively

     (17,919     ( 17,843
  

 

 

   

 

 

 

Net stockholders’ equity

     4,516,254        4,129,288   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 5,147,446      $ 4,553,074   
  

 

 

   

 

 

 

 

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TWENTY SERVICES, INC.

Statements of Income and Comprehensive Income

 

     Three Months Ended
March 31,
 
     2013     2012  

Revenues

    

Interest

   $ 26,416      $ 27,480   

Dividends

     2,961        1,975   
  

 

 

   

 

 

 

Total Revenue

     29,377        29,455   

Operating Expenses

    

General and Administrative

     60,981        42,872   
  

 

 

   

 

 

 

Loss Before Income Taxes

     (31,604     (13,417

Income Tax Benefits (Expense)

     —          —     
  

 

 

   

 

 

 

Net Loss

   $ (31,604   $ (13,417
  

 

 

   

 

 

 

Other Comprehensive Income (net of tax)

    

Unrealized gains on marketable securities

   $ 625,404      $ 590,419   

Income tax related to other comprehensive income

     (179,973     (190,368
  

 

 

   

 

 

 

Other comprehensive income, after tax

   $ 445,431      $ 400,051   
  

 

 

   

 

 

 

Weighted average number of shares outstanding

     1,081,327        1,083,196   

Loss Per Common Share *

   $ (.05   $ (.04

 

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

 

-3-


TWENTY SERVICES, INC.

STATEMENT OF CASH FLOWS

 

     Three Months Ended
March  31,
 
     2013     2012  

Cash flows from operating activities:

    

Interest and dividends received

   $ 29,377      $ 29,455   

Cash paid employees and supplier

     (60,333     (43,068
  

 

 

   

 

 

 

Net cash used in operating activities

     (30,956     (13,613

Cash flows from investing activities

    

Purchase of Preferred Stock for Treasury

     (76     (818
  

 

 

   

 

 

 

Net cash used by investing activities

     (76     (818
  

 

 

   

 

 

 

Net decrease in cash

     (31,032     (14,431
  

 

 

   

 

 

 

Cash and temporary investments, beginning of period

     90,221        104,672   
  

 

 

   

 

 

 

Cash and temporary investments, end of period

   $ 59,189      $ 90,241   
  

 

 

   

 

 

 

 

-4-


MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 2013 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 will continue to use cash flows and investing activities will generate cash flows.

RESULTS OF OPERATIONS

The Registrant reported a net loss of $31,604 for the three months ended March 31, 2013, as compared to the net loss of $13,417 for the corresponding 2012 period.

REVENUES

Revenues for the three months ended March 31, 2013 of $29,377 were comparable to $29,455 for the corresponding 2012 period.

EXPENSES

General and administrative expenses increased from $42,872 in 2012 to $60,981 for the corresponding 2013 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.

COMPREHENSIVE INCOME

Comprehensive income net of tax totaled $413,827 for the first quarter of 2013 as compared to $386,634 in 2012.

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.

 

-5-


 

     Fair Value Measurements at Reporting Date Using

Description

   Quoted Prices in Active
Markets for Identical
Assets

(Level l)
03/31/2013
     Significant  Other
Observable
Inputs
(Level 2)
     Significant
Unobservable
Inputs
(Level 3)

Marketable securities

   $ 3,675,959       $ 1,389,745      
  

 

 

    

 

 

    

Total

   $ 3,675,959       $ 1,389,745      
  

 

 

    

 

 

    

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 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 Principal Executive Officer (“PEO”) who is also the 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 PEO reviews and makes 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-Q , the Company’s management evaluated, with the participation of the Company’s Principal Executive 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 his evaluation of these disclosure controls and procedures, the Company’s Principal Executive Officer has 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.

 

-6-


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 March 31, 2013 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 March 31, 2013 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 March 31, 2013 that have materially affected, or are reasonable likely to materially affect, the Company’ internal control over financial reporting.

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.

 

-7-


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

On February 28, 2013, the Board of Directors of the Registrant declared a cash dividend of SEVEN CENTS ($0.07) PER SHARE, payable March 28, 2013 to holders of record at February 28, 2013 of the Series A-1980, Series a-1981, Series a-1982 and Series A-1985 Preferred Stock, which dividend relates to the year ended December 31, 2012. On March 28, 2013, the dividend so declared was accrued in the amount of $26,786 and paid subsequent to March 31, 2013.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits:

 

31.1    SECTION 302 PEO CERTIFICATION
31.2    SECTION 302 VP CERTIFICATION
32.1    SECTION 906 PEO 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.DEF    XBRL Taxonomy Extension Definition Linkbase
101.LAB    XBRL Taxonomy Extension Label Linkbase
101.PRE    XBRL Taxonomy Extension Presentation Linkbase

 

-8-


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: May 8, 2013       /s/ David J. Noble
      David J. Noble
     

Chairman/Director

Principal Executive Officer

and Chief Financial Officer

Date: May 8, 2013       /s/ Shirley B. Whitaker
      Shirley B. Whitaker
      Vice-President

 

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