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 September 30, 2014

-OR-

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities 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)

(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):

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 November 14, 2014: 80,919,540

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TWENTYFOUR/SEVEN VENTURES, INC.

FORM 10-Q

For the Nine Month Periods Ended September 30, 2014 and 2013

INDEX

PART I – FINANCIAL INFORMATION

PART II – OTHER INFORMATION

2

TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

3

TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 (UNAUDITED)

 * denotes net income (loss) of less than $0.01 per share.

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

4

TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

5

TWENTYFOUR/SEVEN VENTURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(continued)

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

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TWENTYFOUR/SEVEN VENTURES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013

(UNAUDITED)

Note 1 – Nature of Operations

Nature of Operations

Twentyfour/seven Ventures, Inc. and its wholly owned subsidiary, A Alpha Bail Bonds LLC, (collectively “we,” “our,” “us,” or “Twentyfour/seven”) are engaged in the bail bond business. We were incorporated in the State of Colorado on March 8, 2007.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

We prepared these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2014 and 2013 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our annual report on Form 10-K for the year ended December 31, 2013.

Reclassifications

Certain amounts reported in the Company’s financial statements for the three and nine months ended September 30, 2013 have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of expenses during the periods presented.

We make our estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available. We believe that our significant estimates, assumptions and judgments are reasonable, based upon information available at the time they were made. Actual results could differ from these estimates, making it possible that a change in these estimates could occur in the near term.

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Critical Accounting Policies

Our accounting policies are described in our audited consolidated financial statements and notes thereto contained in our annual report on Form 10-K for the year ended December 31, 2013.

New Accounting Standards

From time to time, the Financial Accounting Standards Board ("FASB") or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification ("ASC") are communicated through issuance of an Accounting Standards Update ("ASU"). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on the condensed consolidated financial statements upon adoption.

Note 3 – Going Concern

Our condensed consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. During the nine months ended September 30, 2014, we incurred losses of $154,506 and used $44,203 of cash in our operating activities. As of September 30, 2014, we had a working capital deficit of $267,415 and an accumulated deficit of $111,631.  Our ability to continue as a going concern depends on our ability to generate profitable operations in the future and, or, obtaining the necessary financing to meet our obligations and repay our liabilities when they come due. There is no assurance that these events will be satisfactorily completed.

Note 4 – Restricted Cash

We are 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 us 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 September 30, 2014, and December 31, 2013, was $249,904 and $220,444, respectively.

Note 5 – Fair Value of Financial Instruments

We have adopted the guidance of ASC 820, “Fair Value Measurement” which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

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ASC 825, “Financial Instruments”, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We have not elected to apply the fair value option to any outstanding instruments.

Our financial instruments primarily consist of cash, accounts receivable, prepaid rent, customer deposits held, accounts and income taxes payable, accrued liabilities, customer deposits owed, deferred purchase agreement, derivative liabilities, and notes payable.  Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount of cash, accounts receivable, prepaid rent, customer deposits held, accounts and income taxes payable, accrued liabilities, customer deposits owed and deferred purchase agreement approximate fair value because of the short-term nature of these financial instruments. The carrying amounts of our notes payable approximates fair value as of the condensed consolidated balance sheets dates presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates.

The following table provides our liabilities carried at fair value measured on a recurring basis as of September 30, 2014:

We did not have any liabilities carried at fair value measured on a recurring basis as of December 31, 2013.

Note 6 – Intangible Assets

On January 15, 2014, we entered into an agreement with an individual to purchase the individual’s bail bond business assets including existing contracts, trade name, logos and phone number for total purchase consideration of $25,000. The $25,000 was payable as follows: $5,000 on execution of the agreement plus $2,000 per month commencing February 15, 2014. As of September 30, 2014, we had made payments under this agreement totaling $18,000 and a balance of $7,000 was due and payable.

The entire purchase consideration of $25,000 has been allocated to the value of the trade name and phone number acquired and this amount is being amortized on a straight-line basis over its anticipated useful life of 5 years.  

Note 7 – Convertible Note Payable and Derivative Liability

From time to time, we issue convertible promissory notes (the “Note” or “Notes”) to an unaffiliated third party. The net proceeds from these transactions are used for general working capital purposes. The difference between the face amount of the Notes and the net proceeds, if any, is recorded as deferred debt issuance costs on our condensed consolidated balance sheets if such difference is the result of payments related to debt issuance costs. Deferred debt issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, over the term of the Notes and this amortization is included in debt discount amortization in our condensed consolidated statements of operations.

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The Notes may be converted into shares of our common stock, par value $0.001 per share (our “Common Stock”), at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of issuance of the Note, at the option of the holder (the “Conversion Feature”). The Conversion Price is equal to 58% (the “Base Conversion Rate”) multiplied by the Variable Conversion Rate which is equal to the average of the three (3) lowest closing bid prices of our Common Stock during the ten (10) trading day period prior to the date of conversion divided by the Closing Price of our Common Stock on the day of conversion.

We evaluated the terms of the Conversion Feature of the Notes in accordance with ASC Topic No. 815 - 40, “Derivatives and Hedging - Contracts in Entity’s Own Stock.” Since there is no explicit limit on the number of shares that can be issued related to this instrument, we cannot assert we have sufficient authorized but unissued shares to settle the instrument over the contract period.  Accordingly, the embedded conversion option cannot be classified within stockholders equity and requires to be bifurcated from the host instrument and accounted for as a derivative liability.

In accordance with GAAP, the derivative liability is recorded at its fair value on the date of issuance and subsequently remeasured to fair value each reporting period with any change in fair value being recognized as gain (loss) on revaluation of derivative liability in our condensed consolidated statement of operations.

The estimated fair value of the compound embedded derivative liability related to the Notes was measured utilizing a binomial lattice pricing model.

Similarly, accrued interest payable applicable to the Notes is convertible into Common Stock, without limit, at the same Conversion Price. The fair value of the embedded derivative liability applicable to accrued interest payable is measured and recognized at each reporting date as a derivative liability with a corresponding charge to interest expense.  As noted above, all derivative liabilities are re-measured in subsequent reporting periods with any change in fair value being included in gain (loss) on revaluation of derivative liability.

At September 30, 2014, we had two Notes outstanding in the principal amounts of $53,000 and $42,500, which mature in January and April 2015, if not converted prior thereto. The net proceeds from these Notes were $50,000 and $40,000, respectively.

The Notes also contain a prepayment option whereby we may, during the first 179 days a Note is outstanding, prepay the Note by paying 115% during the first 30 days, increasing in 5% increments each on the 31^st day and each 30 days thereafter to a maximum of 140% of the then outstanding unpaid principal, interest and any other amounts that might be due for penalties or any event of a default. After the initial 179 day period, there is no further right of prepayment.

The note holder may not make any conversions that would result in the note holder holding more than 4.99% of our issued and outstanding Common Stock at any one time.

At September 30, 2014, we have reserved 19,500,000 shares of our unissued Common Stock for potential conversion of these Notes.

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

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The total fair value of the compound embedded derivative liability applicable to these two Notes on the day of issuance was $148,741 and such amount was recorded as derivative liability. $91,023 of this amount was recorded as debt discount (limited to the face amount of the Notes) and the excess $48,880 was recognized as loss on origination of derivative liability in our condensed consolidated statements of operations.

The total fair value of the compound embedded derivative liability recognized applicable to the accrued interest relating to these two Notes was $3,205 and $4,264 during the three and nine months ending September 30, 2014.

 The embedded derivative liability applicable to the Notes and accrued interest was revalued to $108,302 on September 30, 2014, and a gain (loss) on revaluation of the derivative liability of ($16,493) and $34,547 was recorded during the three and nine months ending September 30, 2014, respectively, in our condensed consolidated statements of operations.

We recognized $5,199 and $8,375 of interest expense applicable to these two Notes during the three and nine months ending September 30, 2014, respectively. We also recognized $26,754 and $44,674 of debt discount amortization during the three and nine months ended September 30, 2014, respectively, relating to these Notes.

On October 13, 2014, the note holder elected to convert $8,000 of the principal on the $53,000 note. The Conversion Price is equal to 58% (the “Base Conversion Rate”) multiplied by the Variable Conversion Rate which is equal to the average of the three (3) lowest closing bid prices of our Common Stock during the ten (10) trading day period prior to the date of conversion divided by the Closing Price of our Common Stock on the day of conversion.  Accordingly, we issued 919,540 shares of common stock for the $8,000 principle conversion.

Note 8 –Notes Payable, Related Parties and Convertible Notes Payable, Related Parties

Our notes payable to related parties and convertible notes payable to related parties consist of the following:

The $108,000 of unsecured, 8% promissory notes to related parties plus accrued interest was due June 1, 2014. On May 30, 2014, the note holders agreed to change the promissory notes from term notes to convertible demand notes. The notes, together with accrued interest, are now due on demand and convertible into our Common Stock, at market price (previous day’s closing price), at the option of the note holder.  All other terms remained the same. On August 1, 2014, we repaid $23,000 of principal and $2,640 of accrued interest payable applicable to these notes.

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On January 30, 2014, we borrowed $15,000 from a principal shareholder and issued a $30,000 unsecured convertible promissory note, plus $6,000 accrued interest, due January 30, 2015. We borrowed the remaining $15,000 on August 1, 2014. At the option of the note holder, the $36,000 of principal and interest is convertible, at a 50% discount to market price, into shares of our Common Stock on January 30, 2015, not to exceed 10 million shares (the “Beneficial Conversion Feature” or “BCF”). This note is guaranteed by the manager of our wholly owned subsidiary who is also a principal shareholder of Twentyfour/seven.   

The intrinsic value of the BCF applicable to the borrowings under this note on the commitment dates totaled $30,000 and this amount was accounted for as additional paid in capital and debt discount on our condensed consolidated balance sheets. The debt discount is being amortized on a straight-line basis, which approximates the effective interest method, over the original term of each borrowing under the note. During the three and nine month periods ending September 30, 2014, we recognized $1,351 and $3,019 of interest expense, related parties, respectively, applicable to these borrowings. Accrued interest payable, related parties, applicable to these borrowings was $3,019 at September 30, 2014.

The accrued interest payable, related parties, is also convertible into shares of our Common Stock at a 50% discount to market price. Accordingly, during the three and nine month periods ending September 30, 2014, we recognized an increase in additional paid in capital and a discount on accrued interest payable, related parties, in the amount of $1,351 and $3,019, respectively, which was the intrinsic value of the BCF applicable to the accrued interest on these borrowings. The discount on accrued interest payable, related parties was immediately amortized in its entirety as debt discount amortization, related parties, in our condensed consolidated statements of operations during the three and nine months ended September 30, 2014.

Total interest expense applicable to notes payable, related parties, and convertible notes payable, related parties was $3,134 and $1,500 during the three months ended September 30, 2014, and 2013, respectively, and $9,862 and $4,500 during the nine months ended September 30, 2014, and 2013, respectively. Accrued interest payable, related parties, was $24,094 and $16,873 as at September 30, 2014, and December 31, 2013, respectively.

Note 9 – Commitments and Contingencies

On August 8, 2014, we entered into a non-binding letter of intent pursuant to which we will effect a business combination pursuant to an asset purchase agreement whereby we will acquire substantially all the assets of EFH Group, Inc. (“EFH Group”), with Twentyfour/seven remaining as the surviving corporation and operating under the name EFH Group, Inc. These assets include the trademarks and Canadian trademark license rights owned by EFH Group, Inc.    The wholly-owned subsidiary, A Alpha Bail Bonds, will be spun-off in this transaction. It is anticipated that closing will occur during the week of November 16, 2014.