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EX-32 - EXHIBIT 32 - EF Hutton America, Inc.f24710q1q14ex32.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


[x]     Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended March 31, 2014


-OR-


[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________


Commission File Number  333-186068


Twentyfour/seven Ventures, Inc.

 (Exact name of registrant as specified in its charter)


 

 

 

Colorado

 

20-8594615

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)


 

 

 

132 W. 11th Avenue, Denver Colorado

 

80204

(Address of principal executive offices)

 

(Zip Code)


(720) 266-6996

 (Registrant's telephone number, including area code)


Indicate by check mark whether the issuer (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 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 (section 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 [ ]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):




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Large accelerated filer        [  ]

 

Non-accelerated filer             [  ]

Accelerated filer                 [  ]

 

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]


The number of outstanding shares of the registrant's common stock as of

May 15, 2014:   Common Stock – 10,000,000

















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TWENTYFOUR/SEVEN VENTURES, INC.

FORM 10-Q

For the quarterly period ended March 31, 2014

INDEX


PART I – FINANCIAL INFORMATION

 

 

 

 

 

Page

Item 1.  Financial Statements (Unaudited)

 

4

Item 2.  Management's Discussion and Analysis of

  Financial Condition and Results of Operations

 

11

Item 3.  Quantitative and Qualitative Disclosure

  About Market Risk

 

12

Item 4.  Controls and Procedures

 

12


PART II – OTHER INFORMATION



 

 

 

Item 1.  Legal Proceedings

 

13

Item 1A.  Risk Factors

 

13

Item 2.  Unregistered Sales of Equity Securities and

  Use of Proceeds

 

13

Item 3.  Defaults upon Senior Securities

 

13

Item 4.  Mine Safety Disclosures

 

13

Item 5.  Other Information

 

13

Item 6.  Exhibits

 

13

 

 

 

SIGNATURES

 

14





3


TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED BALANCE SHEETS


 

March 31, 2014

December 31, 2013

ASSETS

(Unaudited)

 

Current assets

 

 

      Cash

$                   24,467

$                   16,913

      Accounts receivable, net of allowance for bad debt

9,364

18,764

      Customer deposits - held

59,189

82,459

             Total current assets

93,020

118,136

 

 

 

      Fixed assets

3,309

2,850

      Accumulated depreciation

(2,769)

(2,565)

      Restricted cash reserves

216,582

220,444

      Other assets

650

650

      

217,772

221,379

Total Assets

$                 310,792

$                 339,515

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' EQUITY

 

 

Current liabilities

 

 

      Accounts payable

$                    1,189

$                    5,069

       Accrued interest payable, related parties

19,533

16,873

      Income taxes payable

790

1,030

      Customer deposits - owed

59,189

82,459

      Notes payable, related parties

123,000

108,000

             Total current liabilities

203,701

213,431

 

 

 

 

 

 

Stockholders' Equity

 

 

      Common stock, $.001 par value;

 

 

          100,000,000 shares authorized;

 

 

          10,000,000 shares issued & outstanding

10,000

10,000

      Additional paid in capital

73,209

73,209

      Retained earnings

23,882

42,875

Total Stockholders' Equity

107,091

126,084

 

 

 

Total Liabilities and Stockholders' Equity

$                 310,792

$                 339,515


The accompanying notes are an integral part of the consolidated financial statements.



4


TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED STATEMENTS OF OPERATIONS

 (UNAUDITED)


 

Three Months Ended

March 31, 2014

Three Months Ended

March 31, 2013

 

(Unaudited)

(Unaudited)

 

 

 

Revenues

$           119,057

$         146,142

 

 

 

Cost of sales

81,190

92,203

 

 

 

Gross profit

37,867

53,939

 

 

 

Operating expenses:

 

 

Depreciation

204

668

Professional fees

7,128

700

Rent

3,750

2,576

Other operating expense

43,118

29,283

 

54,200

33,227

 

 

 

Income(loss) from operations

(16,333)

20,712

 

 

 

Other income (expense):

 

 

     Interest expense

(2,660)

(1,500)

 

(2,660)

(1,500)

 

 

 

    Income (loss) before provision for income taxes

(18,993)

19,212

 

 

 

Provision for income tax

-

3,811

 

 

 

Net income (loss)

$          (18,993)

$          15,401

 

 

 

Net income (loss) per share - Basic and fully diluted

$              (0.00)

$              0.00

 

 

 

Weighted average number of common shares outstanding

10,000,000

10,000,000



The accompanying notes are an integral part of the consolidated financial statements.




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TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

 

Three Months

Three Months

 

Ended

Ended

 

March 31, 2014

March 31, 2013

 

(Unaudited)

(Unaudited)

 

 

 

Cash Flows From Operating Activities:

 

 

     Net income (loss)

$        (18,993)

$          15,401

          

 

 

     Adjustments to reconcile net income (loss) to net cash

 

 

     provided by (used for) operating activities:

 

 

          Amortization & depreciation

204

668

          Increase in allowance for bad debt

9,400

-

    Changes in current assets and liabilities:

 

 

          Accounts receivable

-

(10,555)

          Accounts payable

(3,880)

91

          Accrued interest payable, related parties

2,660

1,500

         Income taxes payable

(240)

2,601

 

 

 

               Net cash provided by (used for) operating activities

(10,849)

9,706

 

 

 

Cash Flows From Investing Activities:

 

 

          Fixed asset purchases

(459)

(672)

          Restricted cash reserves

3,862

(17,437)

 

 

 

               Net cash provided by (used for) investing activities

3,403

(18,109)

 

 

 

Cash Flows From Financing Activities:

 

 

         Notes payable, related parties

15,000

-

 

 

 

               Net cash provided by (used for) financing activities

15,000

-

 

 

 

Net Increase (Decrease) In Cash

7,554

(8,403)

 

 

 

Cash At The Beginning Of The Period

16,913

24,579

 

 

 

Cash At The End Of The Period

$          24,467

$         16,176

 

 

 

Schedule Of Non-Cash Investing And Financing Activities

 

 

$                   -

$                   -

 

 

 

Supplemental Disclosure

 

 

Cash paid for interest

$                    -

$                   -

Cash paid for income taxes

$               240

$           1,210


The accompanying notes are an integral part of the consolidated financial statements.




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TWENTYFOUR/SEVEN VENTURES, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)


NOTE 1. BASIS OF PRESENTATION


The interim consolidated financial statements of Twentyfour/seven Ventures, Inc. (“we”, “us”, “our”, “Twentyfour/seven”, or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Twentyfour/seven's Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on April 10, 2014. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.


The consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with US GAAP. Accordingly, these consolidated financial statements do not include all of the information and footnotes required by US GAAP for annual consolidated financial statements.


The consolidated financial statements are unaudited, but, in management's opinion, include all adjustments (which, unless otherwise noted, include only normal recurring adjustments) necessary for a fair presentation of such consolidated financial statements. The results of operations for the three months ended March 31, 2014 and 2013 are not necessarily indicative of the entire fiscal year for any other period.


NOTE 2. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Twentyfour/seven Ventures, Inc. (the "Company") was incorporated in the State of Colorado on March 8, 2007. The Company is engaged in the bail bond business.


Principles of consolidation

The accompanying consolidated financial statements include the accounts of Twentyfour/seven Ventures, Inc. and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.


Use of Estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets



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and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.


Restricted cash deposits

The Company is required by regulation to place 1% of the face amount of any bond written into a cash reserve account, called a "buildup fund", as a hedge against potential bond forfeitures. The cash deposited into the buildup fund on any given bond may be released to the Company upon bond release by a court, or after the passing of a statutory time frame, generally 36 months.  The balance in the buildup fund at March 31, 2014 and December 31, 2013 was $216,582 and $220,444.


Accounts receivable

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.  As of March 31, 2014, the Company had an allowance for bad debt of $9,400.


Property and equipment

Property and equipment are recorded at cost and depreciated under accelerated or straight line methods over each item's estimated useful life. During the three months ended March 31, 2014, the Company purchased office equipment in the amount of $459.


Revenue recognition

Revenue is recognized on an accrual basis after services have been performed under contract terms, the service price to the client is fixed or determinable, and collectability is reasonably assured.


Income tax

The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.




8


Net income (loss) per share

The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding during the period.  Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.


Financial Instruments

The carrying value of the Company's financial instruments, as reported in the accompanying balance sheets, approximates fair value.


Recent Accounting Pronouncements

The Company does not believe that any recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.


NOTE. 3 NOTES PAYABLE, RELATED PARTIES


Effective January 30, 2014, an affiliate of a shareholder entered into a note payable agreement with the Company in the amount of $30,000, bearing interest at the rate of $6,000, due in a balloon payment on or before January 30, 2015.  On January 30, 2014, $15,000 was advanced on this note payable.  The loan is guaranteed by the manager of A Alpha Bail Bonds, LLC, a fully owned subsidiary of the Company, and a shareholder of the Company.  The remaining $15,000 has not been drawn on this note.



NOTE 4. CONVERTIBLE DEBT


On March 27, 2014, the Company entered into a Securities Purchase Agreement with an unaffiliated entity.  No amounts have been recorded under this agreement as the loan was not funded until April 11, 2014.


Under this agreement, the Company will sell a convertible note to the entity in the aggregate principal amount of $53,000, which is convertible into common shares of the Company.  This convertible note is due nine months after its issuance.  After 180 days have passed since the issuance of the note and the release of funds to the Company, the note will be convertible into common shares.  The conversion price is 58% of the Company’s market price, which is the average of the lowest three closing bid prices of the Company during the last ten trading days.  The note holder may not convert more than 4.99% of the issued and outstanding common shares at any one time.




9


 

The Company has the right to repay the prepay the note, together with accrued and unpaid interest, at any time within the first 180 days from receipt of funds by paying between 115% and  140% of the outstanding principal amount of the note together with the accrued and unpaid interest. After the initial 180 day period, there is no further right of prepayment.


In addition, there is a sum of $3,000 to be paid by the Company to the note holder's counsel for the preparation of documentation related to the transaction.


Should the Company default on the repayment of the note, it is immediately due and payable.  The minimum amount due is 150% times the outstanding principal and unpaid interest.


NOTE 5.  SUBSEQUENT EVENTS


As described in Note 4 above, the Company received net proceeds of $50,000 from the convertible debt agreement on April 11, 2014.


The Company has evaluated subsequent events through the date these financial statements were available to be issued of May 15, 2014, and determined that there are no other reportable subsequent events.



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ITEM 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Trends and Uncertainties.  


There are no known trends, events or uncertainties that have or are reasonably likely to have a material impact on the registrant’s short term or long term liquidity.  Sources of liquidity both internal and external will come from the sale of the registrant’s services and products as well as the private sale of the registrant’s stock.  There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations.  There are no significant elements of income or loss that do not arise from the registrant’s continuing operations.  There are no known causes for any material changes from period to period in one or more line items of the registrant’s financial statements.


Capital Resources and Source of Liquidity:


Our cash balance is $24,467 as of March 31, 2014.  We believe that our cash balance will be sufficient to fund our operations for the fiscal year ended December 31, 2014 and has no current plans to raise additional equity.  We have two notes payable to shareholders for a total of $75,000 due on June 1, 2014.


For the three months ended March 31, 2014, we spent $459 on fixed asset purchases and maintained $3,862 in our restricted cash reserves.  As a result, we had net cash provided by investing activities of $3,403 for the three months ended March 31, 2014.


For the three months ended March 31, 2013, we spent $672 on fixed asset purchases and invested $17,437 into restricted cash reserves.  As a result, we had net cash used for investing activities of $18,109 for the three months ended March 31, 2013.


For the three months ended March 31, 2014, we received $15,000 from a related party note payable.  As a result, we had net cash provided by financing activities of $15,000 for the three months ended March 31, 2014.


For the three months ended March 31, 2013, we did not pursue any financing activities.


Results of Operations


For the three months ended March 31, 2014, we received revenues of $119,057.  Our cost of sales was $81,190, resulting in a gross profit of $37,867.  We incurred depreciation expenses of $204 and professional fees of $7,128.  We paid rent expenses of $3,750 and other operating expenses of $43,118.  We incurred interest expenses of $2,660.  As a result, we had a net loss of $18,993 for the three months ended March 31, 2014.




11


Comparatively, for the three months ended March 31, 2013, we received revenues of $146,142.  Our cost of sales was $92,203, resulting in a gross profit of $53,939.  We incurred depreciation expenses of $668 and professional fees of $700.  We paid rent expenses of $2,576 and other operating expenses of $29,283.  We incurred interest expenses of $1,500 and paid income taxes of $3,811.  As a result, we had net income of $15,401 for the three months ended March 31, 2013.


Our revenues decreased by $27,085, or 18.5%, during the three months ended March 31, 2014 compared to the three months ended March 31, 2013 as a result of having fewer clients during 2014.  Our cost of sales decreased by $11,013, or 11.9%, for the same period.  We paid $6,428 more for professional expenses during the three months ended March 31, 2014 as a result of becoming a public company and having to include the audited financials for the December 31, 2013 Form 10-K, and we paid $13,044 more for other operating expenses during the three months ended March 31, 2014 as a result of additional costs incurred while initiating a financing deal.


Off-Balance Sheet Arrangements

The registrant had no material off-balance sheet arrangements as of March 31, 2014.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Not applicable for smaller reporting companies.


Item 4.  Controls and Procedures


During the period ended March 31, 2014, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Evaluation of Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2014.  Based on this evaluation, our chief executive officer and principal financial officers have concluded such controls and procedures to be effective as of March 31, 2014 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



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PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

None


Item 1A.  Risk Factors  

Not applicable for smaller reporting companies


Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None


Item 3.   Defaults Upon Senior Securities.

None


Item 4.   Mine Safety Disclosures

Not Applicable


Item 5.   Other Information

None


Item 6.   Exhibits


Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS**   XBRL Instance Document

101.SCH**   XBRL Taxonomy Extension Schema Document

101.CAL**   XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**.  XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**   XBRL Taxonomy Extension Label Linkbase Document

101.PRE**   XBRL Taxonomy Extension Presentation Linkbase Document

*  Filed herewith

**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.






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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: May 15, 2014


TWENTYFOUR/SEVEN VENTURES, INC.


By:  /s/Robert M. Copley, Jr.

Robert M. Copley Jr.

Chief Executive Officer


By:  /s/Danielle Abrahams

Danielle Abrahams

Chief Financial Officer




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