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EX-31.2 - EX-31.2 - TWENTY SERVICES INCd351412dex312.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 Six Months Ended June 30, 2012

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.

 

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 1,082,807 shares

 

 

 


TWENTY SERVICES, INC.

BALANCE SHEETS

(Unaudited)

 

     June 30,
2012
    December 31,
2011
 
ASSETS     

Cash and cash equivalents

   $ 71,792      $ 104,672   

Marketable securities

     4,100,643        3,930,601   

Other assets

     22,553        22,553   
  

 

 

   

 

 

 

Total assets

   $ 4,194,988      $ 4,057,826   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Liabilities:

    

Accounts payable and accrued expenses

   $ 45,356      $ 69,962   

Deferred tax liability

     294,649        237,759   
  

 

 

   

 

 

 

Total liabilities

     340,005        307,721   

Stockholders’ equity:

    

Preferred stock, Cumulative $0.10 par value, 7% cumulative 2,500,000 shares authorized, 505,110 shares issued

     50,511        50,511   

Common stock, $0.10 par value, 25,000,000 shares authorized, 1,283,068 issued

     128,307        128,307   

Additional paid-in capital

     1,716,074        1,716,074   

Retained earnings

     1,081,710        1,114,595   

Accumulated other comprehensive income

     1,264,491        1,125,306   

Less investment in Twenty Services Holding

     (60,000     (60,000

Treasury Stock

     (326,110     (324,687
  

 

 

   

 

 

 

Total stockholders’ equity

     3,854,983        3,750,105   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 4,194,988      $ 4,057,826   
  

 

 

   

 

 

 


TWENTY SERVICES, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

     Three months ended     Six months ended  
     June 30, 2012     June 30, 2011     June 30, 2012     June 30, 2011  

Revenue

        

Interest

   $ 8,320      $ 9,709      $ 35,800      $ 36,732   

Dividends

     3,242        2,902        5,216        5,804   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     11,562        12,611        41,016        42,536   

Operating Expenses

        

General and administrative

     31,556        48,971        74,428        81,004   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (19,994     (36,360     (33,412     (38,468

Other Income (Loss)

        

Gain (loss) on sale of marketable securities

     528        (2,939     528        (2,939
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss Before Income Taxes

     (19,466     (39,299     (32,884     (41,407

Income Tax Benefits (Expense)

     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income (Loss)

   $ (19,466   $ (39,299   $ (32,884   $ (41,407

Other Comprehensive Income (Loss) Unrealized gain (loss) on marketable securities and tax

     (365,061     (58,766     139,185        89,289   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Comprehensive Income (Loss)

   $ (384,527   $ (98,065   $ 106,301      $ 47,882   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of shares outstanding

     1,082,949        1,083,561        1,083,031        1,087,109   

Income (loss) per Common Shares*

   $ (0.04   $ (0.06   $ (0.05   $ (0.06

 

* After giving effect on a pro-rata basis to preferred dividends of $0.07 per share per annum.


TWENTY SERVICES, INC.

CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2012     2011     2012     2011  

Cash flows from operating activities:

        

Interest and dividends received

   $ 11,562      $ 12,611      $ 41,016      $ 45,004   

Notes receivable repayments

     00        28,520        00        28,520   

General and administrative expenses paid

     (35,952     (14,029     (79,019     (50,972
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used) by operating activities

     (24,390     27,102        (38,003     22,552   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing and investing activities:

        

Net sale (purchase) of securities

     26,561        11,882        26,561        22,577   

Dividends paid

     (20,015     (35,359     (20,015     (35,359

Purchase of Treasury Stock

     (605     (1,899     (1,423     (26,822
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by investing activities

     5,941        (25,376     5,123        (39,604
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash

     (18,449     1,726        (32,880     (17,052

Cash and temporary investments, beginning of period

     90,241        75,428        104,672        94,206   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and temporary investments, end of period

   $ 71,792      $ 77,154      $ 71,792      $ 77,154   
  

 

 

   

 

 

   

 

 

   

 

 

 


MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

RESULTS OF OPERATIONS

The Registrant reported a net loss of $19,466 for the three months ended June 30, 2012, as compared to the net loss of $39,299 for the corresponding 2011 period. The Registrant reported a net loss of $32,884 for the six months ended June 30, 2012, as compared to a net loss of $41,407 for the corresponding 2011 period.

REVENUES

Revenues for the three months ended June 30, 2012 of $11,562 were comparable to $12,611 for the corresponding 2011 period. Revenues for the six months ended June 30, 2012 of $41,016 were comparable to $42,536 for the corresponding 2011 period.

EXPENSES

General and administrative expenses decreased from $48,971 in 2011 to $31,556 for the corresponding three months period ended June 30, 2012. General and administrative expenses decreased to $74,428 for the six months ended June 30, 2012 from $81,004 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.

During the three months ended June 30, 2012 and the six months ended June 30, 2012 the Registrant’s liquidity remained stable. Twenty Services, Inc. (“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.

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 reporting 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.


 

     Fair Value Measurements at Reporting Date Using  

Description

   Quoted Prices in Active
Markets for Identical
Assets

(Level l)
06/30/2012
     Significant Other
Observable
Inputs

(Level 2)
     Significant
Unobservable
Inputs
(Level 3)
 

Marketable securities

   $ 2,743,255       $ 1,357,379       $ .00   
  

 

 

    

 

 

    

 

 

 

Total

   $ 2,743,255       $ 1,357,379       $ .00   
  

 

 

    

 

 

    

 

 

 

FINANCIAL DISCLOSURE AND INTERNAL CONTROLS

Management of 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 (“Exchange Act”).

Management has established processes to ensure appropriate disclosure controls and procedures are maintained. These controls and procedures as defined by the Securities and Exchange Commission (“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 make various certifications regarding the accuracy of Twenty Services, Inc.’s 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 Quarterly Report on Form 10-Q , the Company’s management evaluated, with the participation of the Company’s Principal Executive Officer (“PEO”), 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 Principal Executive Officer (“PEO”) 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.


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 June 30, 2012 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 June 30, 2012 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 June 30, 2012 that have materially affected or are reasonable likely to materially affect, the Company’s 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.


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 8-K   

Exhibits:

 

  31.1    SECTION 302 PEO/CFO CERTIFICATION
  31.2    SECTION 302 VP CERTIFICATION
  32.1    SECTION 906 PEO/CFO CERTIFICATION
  32.2    SECTION 906 VP CERTIFICATION
101    INTERACTIVE DATA FILE

 


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: August 10, 2012    

/s/ David J. Noble

    David J. Noble
   

Chairman/Director

Principal Executive Officer/Chief Financial Officer

Date: August 10, 2012    

/s/ Shirley B. Whitaker

    Shirley B. Whitaker
    Vice President