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 Nine Months Ended September 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.

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

TWENTY SERVICES, INC.

BALANCE SHEETS

(Unaudited)


	September 30, 2012			December 31, 2011
ASSETS
Cash and cash equivalents	$	77,836		$	104,672
Marketable securities		4,293,844			3,930,601
Other assets		22,553			22,553

Total assets	$	4,394,233		$	4,057,826

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued expenses	$	90,955		$	69,962
Deferred tax liability		356,474			237,759

Total liabilities		447,429			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		1,072,055			1,114,595
Accumulated other comprehensive income		1,369,834			1,125,306
Less investment in Twenty Services Holding		(60,000	)		(60,000	)
Treasury Stock		(329,977	)		(324,687	)

Total stockholders’ equity		3,946,804			3,750,105

Total liabilities and stockholders’ equity	$	4,394,233		$	4,057,826

TWENTY SERVICES, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)


	Three months ended					Nine months ended
	September 30, 2012		September 30, 2011			September 30, 2012			September 30, 2011
Revenue
Interest	$	21,345	$	26,986		$	57,145		$	63,718
Dividends		9,344		2,418			14,559			8,222
Other		—		18			—			2,486

Total revenue		30,689		29,422			71,704			74,426
Operating Expenses
General and administrative		15,523		10,524			89,951			91,528

Operating income (loss)		15,166		18,898			(18,247	)		(17,102	)
Other Income (Loss)
Gain (loss) on sale of marketable securities		—		9,144			528			6,205

Loss Before Income Taxes		15,166		28,042			(17,719	)		(10,897	)

Income Tax Benefits (Expense)		—		—			—			—

Net Income (Loss)	$	15,166	$	28,042		$	(17,719	)	$	(10,897	)

Other Comprehensive Income (Loss) Unrealized gain (loss) on marketable securities, net of tax		105,343		(662,081	)		244,528			(572,792	)

Total Comprehensive Income (Loss)	$	120,509	$	(634,039	)	$	226,809		$	(583,689	)

Weighted average number of shares outstanding		1,082,067		1,083,359			1,082,631			1,086,075

Income (loss) per Common Shares*	$	0.01	$	0.03		$	(0.04	)	$	(0.04	)

*	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 September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Cash flows from operating activities:

Interest and dividends received	$	30,688		$	29,422		$	71,704		$	74,426
Notes receivable repayments		—						—			28,520

General and administrative expenses paid		(15,972	)		(10,515	)		(94,991	)		(61,487	)

Net cash provided by (used) by operating activities		14,716			18,907			(23,287	)		41,459

Cash flows from financing and investing activities:
Net sale (purchase) of securities		—			38,479			26,561			61,056
Purchase of Treasury Stock		(3,867	)		—			(5,290	)		(26,822	)
Dividends Paid		(4,805	)		—			(24,820	)		(35,359	)

Net cash provided (used) by investing activities		(8,672	)		00			(3,549	)		(1, 125	)

Net increase (decrease) in cash		6,044			57,386			(26,836	)		40,334
Cash and temporary investments, beginning of period		71,792			77,154			104,672			94,206

Cash and temporary investments, end of period	$	77,836		$	134,540		$	77,836		$	134,540

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

RESULTS OF OPERATIONS

The Registrant reported a net income of $15,166 for the three months ended September 30, 2012, as compared to the net income of $28,042 for the corresponding 2011 period. The Registrant reported a net loss of $17,719 for the nine months ended September 30, 2012, as compared to a net loss of $10,897 for the corresponding 2011 period.

REVENUES

Revenues for the three months ended September 30, 2012 of $ 30,689 were comparable to $29,422 for the corresponding 2011 period. Revenues for the nine months ended September 30, 2012 of $71,704 were comparable to $74,426 for the corresponding 2011 period.

EXPENSES

General and administrative expenses increased from $10,524 in 2011 to $15,523 for the corresponding three months period ended September 30, 2012. General and administrative expenses decreased to $89,951 for the nine months ended September 30, 2012 from $91,528 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 September 30, 2012 and the nine months ended September 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) 09/30/2012		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities	$	2,901,389	$	1,392,455	$	.00

Total	$	2,901,389	$	1,392,455	$	.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 September 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 September 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 September 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:	November 5, 2012	/s/ David J. Noble
		David J. Noble
		Chairman/Director Principal Executive Officer/Chief Financial Officer

Date:	November 5, 2012	/s/ Shirley B. Whitaker
		Shirley B. Whitaker
		Vice President

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

TWENTY SERVICES INC 10-Q