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)
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Colorado |
| 20-8594615 |
(State or other jurisdiction of incorporation or organization) |
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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
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Item 1. Financial Statements (Unaudited) |
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosure About Market Risk |
| 12 |
Item 4. Controls and Procedures |
| 12 |
PART II – OTHER INFORMATION
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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 |
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SIGNATURES |
| 14 |
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TWENTYFOUR/SEVEN VENTURES, INC.
CONDENSED BALANCE SHEETS
| March 31, 2014 | December 31, 2013 |
ASSETS | (Unaudited) |
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Current assets |
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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 |
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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 |
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LIABILITIES & STOCKHOLDERS' EQUITY |
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Current liabilities |
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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 |
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Stockholders' Equity |
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Common stock, $.001 par value; |
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100,000,000 shares authorized; |
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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 |
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Total Liabilities and Stockholders' Equity | $ 310,792 | $ 339,515 |
The accompanying notes are an integral part of the consolidated financial statements.
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TWENTYFOUR/SEVEN VENTURES, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended March 31, 2014 | Three Months Ended March 31, 2013 |
| (Unaudited) | (Unaudited) |
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Revenues | $ 119,057 | $ 146,142 |
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Cost of sales | 81,190 | 92,203 |
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Gross profit | 37,867 | 53,939 |
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Operating expenses: |
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Depreciation | 204 | 668 |
Professional fees | 7,128 | 700 |
Rent | 3,750 | 2,576 |
Other operating expense | 43,118 | 29,283 |
| 54,200 | 33,227 |
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Income(loss) from operations | (16,333) | 20,712 |
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Other income (expense): |
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Interest expense | (2,660) | (1,500) |
| (2,660) | (1,500) |
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Income (loss) before provision for income taxes | (18,993) | 19,212 |
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Provision for income tax | - | 3,811 |
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Net income (loss) | $ (18,993) | $ 15,401 |
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Net income (loss) per share - Basic and fully diluted | $ (0.00) | $ 0.00 |
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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) |
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Cash Flows From Operating Activities: |
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Net income (loss) | $ (18,993) | $ 15,401 |
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Adjustments to reconcile net income (loss) to net cash |
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provided by (used for) operating activities: |
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Amortization & depreciation | 204 | 668 |
Increase in allowance for bad debt | 9,400 | - |
Changes in current assets and liabilities: |
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Accounts receivable | - | (10,555) |
Accounts payable | (3,880) | 91 |
Accrued interest payable, related parties | 2,660 | 1,500 |
Income taxes payable | (240) | 2,601 |
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Net cash provided by (used for) operating activities | (10,849) | 9,706 |
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Cash Flows From Investing Activities: |
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Fixed asset purchases | (459) | (672) |
Restricted cash reserves | 3,862 | (17,437) |
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Net cash provided by (used for) investing activities | 3,403 | (18,109) |
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Cash Flows From Financing Activities: |
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Notes payable, related parties | 15,000 | - |
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Net cash provided by (used for) financing activities | 15,000 | - |
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Net Increase (Decrease) In Cash | 7,554 | (8,403) |
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Cash At The Beginning Of The Period | 16,913 | 24,579 |
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Cash At The End Of The Period | $ 24,467 | $ 16,176 |
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Schedule Of Non-Cash Investing And Financing Activities |
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| $ - | $ - |
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Supplemental Disclosure |
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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.
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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.
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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.
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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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