Company Quick10K Filing
20 20 Global
10-Q 2020-09-30 Filed 2020-11-16
10-Q 2020-06-30 Filed 2020-08-19
10-Q 2020-03-31 Filed 2020-05-18
10-K 2019-12-31 Filed 2020-03-30

TWGL 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1 - Organization and Description of Business
Note 2 - Summary of Significant Accounting Policies
Note 3 - Going Concern
Note 4 - Related - Party Transactions
Note 5 - Employer Ira Plan
Note 6 - Legal Proceeding
Note 8 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 6. Exhibits
EX-31 twgl_31z01.htm
EX-32 twgl_32z01.htm

20 20 Global Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

20/20 GLOBAL, INC. - Form 10-Q SEC filing
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

 

 

[   ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended

Commission File Number 000-56022

 

20/20 GLOBAL, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

87-0645794

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

480 22nd Street, Box 2, Heyburn, ID 83336

(Address of principal executive offices, including zip code)

 

(208) 677-2020

(Registrant’s telephone number, including area code)

 

Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

None

None

 

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 90 days. Yes  [X]  No [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes  [X]  No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer [  ]

Accelerated filer [  ]

Non-accelerated Filer  [X]

Smaller reporting company 

Emerging growth company 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes   No  [  ]  

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 18, 2020, issuer had 12,425,420 outstanding shares of common stock, par value $0.001.




20/20 GLOBAL, INC.

Form 10-Q for the Quarterly Period Ended March 31, 2020

 

TABLE OF CONTENTS

 

Item

 

Page

 

Part I—Financial Information

 

 

 

 

1

Financial Statements

3

 

Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019 (unaudited)

3

 

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019 (unaudited)

4

 

Condensed Consolidated Statements of Changes in Stockholders Equity for the Three Months Ended March 31, 2020 and 2019 (unaudited)

5

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (unaudited)

6

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

7

2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

12

3

Quantitative and Qualitative Disclosures about Market Risk

14

4

Controls and Procedures

15

 

 

 

 

Part II—Other Information

 

 

 

 

1

Legal Proceedings

15

6

Exhibits

16

 

Signature Page

16


2



PART I–FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

20/20 GLOBAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

March 31, 2020

 

December 31, 2019

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash in bank

$

55,851

 

$

209,164

Prepaid expenses

 

5,022

 

 

7,606

Other deposits and receivables

 

48,932

 

 

50,100

Note receivable

 

-

 

 

1,000

Assets of discontinued operations

 

500,000

 

 

946,715

Total current assets

 

609,805

 

 

1,214,585

 

 

 

 

 

 

Property, plant and equipment, net

 

-

 

 

548

 

 

 

 

 

 

TOTAL ASSETS

$

609,805

 

$

1,215,133

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accrued liabilities

$

-

 

$

55,967

Liabilities of discontinued operations

 

520

 

 

507,263

Total current liabilities

 

520

 

 

563,230

 

 

 

 

 

 

TOTAL LIABILITIES

 

520

 

 

563,230

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized

  and no shares issued or outstanding

 

-

 

 

-

Common stock, $0.001 par value; 100,000,000 shares

  authorized; 12,425,420 shares issued and outstanding

 

12,425

 

 

12,425

Additional paid-in capital

 

26,246

 

 

26,246

Retained earnings

 

570,614

 

 

613,232

 

 

 

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

 

609,285

 

 

651,903

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

609,805

 

$

1,215,133

 

 

 

 

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 


3



20/20 GLOBAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

 

 

For the Three Months Ended

 

March 31,

2020

 

2019

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

General and administration expenses

$

22,464 

 

$

10,288 

Salaries and wages

 

1,378 

 

 

30,574 

Total operating expense

 

23,842 

 

 

40,862 

 

 

 

 

 

 

Loss from Operations

 

(23,842)

 

 

(40,862)

 

 

 

 

 

 

Other Income:

 

 

 

 

 

Interest income

 

1,549 

 

 

3,768 

Total other income

 

1,549 

 

 

3,768 

 

 

 

 

 

 

Net loss before provision for income tax

 

(22,293)

 

 

(37,094)

Provision for income tax expense

 

- 

 

 

- 

Net loss from continuing operations

 

(22,293)

 

 

(37,094)

Net (loss) income from discontinued operations

  before provision for income tax

 

(20,325)

 

 

51,550 

Provision for income tax expense from discontinued operations

 

- 

 

 

- 

Net (loss) income from discontinued operations

 

(20,325)

 

 

51,550 

Net (loss) income

$

(42,618)

 

$

14,456 

 

 

 

 

 

 

Basic and fully diluted earnings per share from continuing operations

$

(0.00)

 

$

(0.00)

Basic and fully diluted (loss) earnings per share

  from discontinued operations

 

(0.00)

 

 

0.00 

Basic and fully diluted (loss) earnings per share

$

(0.00)

 

$

0.00 

 

 

 

 

 

 

Weighted average shares outstanding—basic and diluted

 

12,425,420 

 

 

12,425,420 

 

See accompanying notes to the unaudited condensed consolidated financial statements.


4



 

20/20 Global, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2019

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Preferred Stock

 

Common Stock

 

Paid-in

 

Retained

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2018

-

 

 

-

 

12,425,420

 

$

12,425

 

$

26,246

 

$

608,429

 

$

647,100

Net income

-

 

 

-

 

-

 

 

-

 

 

-

 

 

14,456

 

 

14,456

Balance, March 31, 2019

-

 

$

-

 

12,425,420

 

$

12,425

 

$

26,246

 

$

622,885

 

$

661,556

 

 

 

 

 

 

 

 

 

 

 

20/20 Global, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2020

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Preferred Stock

 

Common Stock

 

Paid-in

 

Retained

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Earnings

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

-

 

 

-

 

12,425,420

 

$

12,425

 

$

26,246

 

$

613,232 

 

$

651,903 

Net loss

-

 

 

-

 

-

 

 

-

 

 

-

 

 

(42,618)

 

 

(42,618)

Balance, March 31, 2020

-

 

$

-

 

12,425,420

 

$

12,425

 

$

26,246

 

$

570,614 

 

$

609,285 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 


5



20/20 GLOBAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

For the Three Months

Ended March 31,

2020

 

2019

 

 

 

 

 

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net (loss) income

$

(42,618)

 

$

14,456 

Less net (income) loss from discontinued operations

 

20,325 

 

 

(51,550)

Depreciation expense

 

548 

 

 

- 

Change in assets and liabilities:

 

 

 

 

 

Prepaids and other receivables

 

6,906 

 

 

1,207 

Accounts payable and accrued liabilities

 

(54,574)

 

 

(17,328)

Operating cash flow from discontinued operations

 

(81,746)

 

 

68,145 

Net cash (used in) provided by operating activities

 

(151,159)

 

 

14,930 

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Payments on note receivable

 

(2,154)

 

 

(4,500)

Net cash used in investing activities

 

(2,154)

 

 

(4,500)

 

 

 

 

 

 

Net (decrease) increase in cash

 

(153,313)

 

 

10,430 

Cash of continuing operations at beginning of period

 

209,164 

 

 

- 

Cash of discontinued operations at beginning of period

 

500,000 

 

 

611,497 

Cash at end of period

$

555,851 

 

$

621,927 

Less: cash of discontinued operations

 

(500,000)

 

 

(500,000)

Cash of continuing operations

$

55,851

 

$

121,927

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

Cash paid for interest

$

- 

 

$

- 

Cash paid for income taxes

$

- 

 

$

21,419 

 

 

 

 

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.


6



20/20 GLOBAL, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2020

(Unaudited)

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

We were incorporated in Nevada on January 21, 2000, under the name RM Investors, Inc. On March 15, 2014, under the terms of an Exchange Agreement and Plan of Reorganization, we acquired 100% of the issued and outstanding shares of our subsidiary 20/20 Produce Sales, Inc., an Idaho corporation that was incorporated on December 22, 1994. Our business operations are conducted through our wholly owned subsidiary. In connection with this reorganization, we obtained a new CUSIP number for our common stock, FINRA approval of our name change from RM Investors, Inc. to 20/20 Global, Inc. and a new trading symbol for our shares on the OTC market place, and effected a 2-for-1 forward split of the then issued and outstanding shares of our common stock.  

 

We were a distributor of fresh produce with a tradition of service for the past 20 years, shipping fresh produce via refrigerated semi-trucks from manufacturing facilities to wholesalers from 10 separate geographical locations in Idaho, Washington, California, New Mexico, and Texas. Based on the loss of business generated through our license agreement with Markon Cooperative, Inc., we discontinued our fresh produce distribution business and closed our facilities at the end of 2019. We are pursuing other business opportunities and believe that we may find another business opportunity, or another active business may be interested in acquiring us.

 

Our accompanying unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. However, we have recently been forced to discontinue our only revenue stream, which raises substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and footnotes for the year ended December 31, 2019. The results of the three months ended March 31, 2020, are not necessarily indicative of the results to be expected for the full year ending December 31, 2020.

 

In the opinion of management, all adjustments necessary to present fairly the financial position as of March 31, 2020, and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

 

Basis of Consolidation

 

The accompanying unaudited condensed consolidated financial statements include the accounts of 20/20 Global, Inc. and our wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in these consolidated financial statements.  


7



 

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our financial statements include, when applicable, disclosures of estimates, assumptions, uncertainties, and markets that could affect our financial statements and future operations.

 

Cash and Cash Equivalents

 

We consider all highly liquid investments with original maturities of less than three months that are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value, to be cash equivalents.

 

Accounts Receivable and Doubtful Accounts

 

Accounts receivable is stated at invoice value, which is net of any off-invoice promotions. A provision for doubtful accounts is recorded and based upon an assessment of credit risk within the accounts receivable portfolio, experience of delinquencies and charge-offs, and current market conditions. Management believes these provisions are adequate based upon the relevant information presently available. The allowance provided for the three months ended March 31, 2020, and for the year ended December 31, 2019, was $0 and $0, respectively. The write-offs for the three months ended March 31, 2020 and 2019, were $0 and $0, respectively.

 

Revenue Recognition

 

Effective January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation.

 

We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to our customer. Once a contract is determined to be within the scope of ASC Topic 606, at contract inception we review the contract to determine which performance obligations we must deliver and which of these performance obligations are distinct. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, our performance obligations are transferred to customers at a point in time, typically upon delivery.


8



 

 

Our shipping terms typically specify FOB origination, at which time title and risk of loss have passed on to the customer as well as shipping and handling fees. Shipping and handling costs and fees are treated as a delivered load. On a delivered load versus an FOB load, we actually take the billing and pay the carriers. We contract with the carrier and, therefore, handle the shipping and handling charges and treat it as a “delivered sale.”

 

For the three months ended March 31, 2020 and 2019, all sales and accounts receivable have been reclassified to discontinued operations.

 

Recent Accounting Pronouncements

 

We have reviewed recently issued accounting pronouncements and plan to adopt those that are applicable to us. We do not expect the adoption of any pronouncements to have an impact on our results of operations or financial position.

 

NOTE 3 – GOING CONCERN

 

The accompanying unaudited condensed consolidated financial statements have been prepared on the assumption that we will continue as a going concern. As discussed in Note 1, we discontinued our produce distribution business in December 2019. We had a net loss of loss of $22,293 from continuing operations for the quarter ended March 31, 2020. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue our operations as a going concern is dependent on management’s plans, which include finding another business opportunity or another active business that may be interested in acquiring us, during the next 12 months. These interim financial statements do not include any adjustments that may result from the outcome of this uncertainty.

 

NOTE 4 – RELATED-PARTY TRANSACTIONS

 

We lease our office from Whistling Pete Enterprises, d/b/a Legacy Center, an Idaho limited liability company. The lease, which commenced on March 2, 2009, presently is a year to year lease, and we currently pay $1,200 per month plus utilities. Whistling Pete Enterprises is owned 50% by Mark Williams, our president. Total lease payments were $3,288 and $4,691 during the three months ended March 31, 2020 and 2019, respectively.

 

NOTE 5 – EMPLOYER IRA PLAN

 

In August 2014, we adopted a Premier Select Simple IRA Plan, which covers all eligible employees who choose to participate. We contribute 2% of compensation, not to exceed certain limits, for employees who participate in the IRA Plan. During the three months ended March 31, 2020 and 2019, we contributed $0 and $1,391, respectively, to the IRA Plan.

 

NOTE 6 – LEGAL PROCEEDING

 

On June 27, 2019, we were served with Petitioner’s Motion to Join 20/20 Global as a Necessary Third-Party Respondent to the Present Action, and to Enforce the Judgment Entered October 9, 2018, by Ordering 20/20 Global, Inc., to Turn Over Marital Securities Earned by Respondent and Awarded to Petitioner and a Subpoena for Deposition (Records only) in the matter of In re the Marriage of Penni Gruenberg v. Myron Gruenberg, Case No. 17 D 3662, pending in the Circuit Court of Cook County, Illinois.


9



 

Petitioner sought return of the shares originally represented by certificates nos. 539 and 540, which were returned by Mr. Gruenberg and cancelled by us after termination of our agreement with him for his failure to perform under the Master Services Agreement. We did not believe Mr. Gruenberg is entitled to the shares and, therefore, they could not be awarded to his spouse in litigation and vigorously defended this position. On March 6, 2020, an agreed order was entered whereby Penni Gruenberg voluntarily withdrew her petition in accordance with the terms of the settlement agreement dated March 4, 2020. Per the terms of the settlement, we accrued $40,000 as of December 31, 2019. We paid the $40,000 to Ms. Gruenberg during the three months ended March 31, 2020.

 

NOTE 7 – DISCONTINUED OPERATIONS

 

On July 1, 2019, Performance Food Group Company (“PFG”) announced that it entered into a definitive agreement to acquire Reinhart Foodservice, LLC (“Reinhart”) from Reyes Holdings, LLC. Reinhart was a principal purchaser of our fresh produce distribution business. On December 20, 2019, PFG received approval from the Federal Trade Commission to acquire Reinhart and closed the transaction on December 30, 2019. Most of our business through our License Agreement with Markon Cooperative was purchased by Reinhart. Although our Markon License Agreement had not been terminated, PFG notified us that it would use its existing suppliers, which did not include us. Since this agreement that generated over half of our existing business was effectively terminated, we decided to discontinue our fresh produce distribution business, and we notified all of our vendors and suppliers that we would not conduct new business with them after December 27, 2019.

 

In accordance with the provisions of ASC 205-20, Presentation of Financial Statements, we have separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheets as of March 31, 2020 and December 31, 2019, and consist of the following:

 

March 31, 2020

 

December 31, 2019

Current Assets of Discontinued Operations:

 

 

 

 

 

Cash

$

500,000 

 

$

500,000 

Accounts receivable

 

- 

 

 

446,715 

Total Current Assets of Discontinued Operations:

$

500,000 

 

$

946,715 

 

 

 

 

 

 

Current Liabilities of Discontinued Operations:

 

 

 

 

 

Accounts payable

$

(873)

 

$

489,863 

Accrual

 

1,393 

 

 

17,400 

Total Current Liabilities of Discontinued Operations:

$

520 

 

$

507,263 


10



 

In accordance with the provisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the consolidated statements of operations. The results of operations from discontinued operations for the three months ended March 31, 2020 and 2019, have been reflected as discontinued operations in the consolidated statements of operations for the three months ended March 31, 2020 and 2019, and consist of the following:

 

 

For the Three Months

 

Ended March 31,

2020

 

2019

 

 

 

 

 

 

Revenues of discontinued operations

$

(1,381)

 

$

2,947,396 

Cost of revenues of discontinued operations

 

207 

 

 

2,778,915 

Gross profit of discontinued operations

 

(1,174)

 

 

168,481 

 

 

 

 

 

 

Operating Expenses of Discontinued Operations:

 

 

 

 

 

General and administration expenses

 

7,855 

 

 

38,374 

Business development

 

- 

 

 

21,392 

Salaries and wages

 

21,250 

 

 

42,500 

Sales/marketing expense

 

- 

 

 

12,845 

Taxes - payroll

 

1,685 

 

 

3,369 

Total operating expense of discontinued operations

 

30,790 

 

 

118,480 

 

 

 

 

 

 

Operating (loss) income from discontinued operations

 

(31,964)

 

 

50,001 

 

 

 

 

 

 

Other Income of Discontinued Operations:

 

 

 

 

 

Other income

 

11,639 

 

 

1,549 

 

 

 

 

 

 

Net (loss) income from discontinued operations before provision

  for income tax

 

(20,325)

 

 

51,550 

Provision for income tax expense from discontinued operations

 

- 

 

 

- 

Net (loss) income from discontinued operations

$

(20,325)

 

$

51,550 

 

In accordance with the provisions of ASC 205-20, we have included the net cash provided by discontinued operations in the consolidated statements of cash flows. The net cash provided by discontinued operations in the consolidated statements of cash flows for the three months ended March 31, 2020 and 2019, consists of the following:

 

 

For the Three Months

 

Ended March 31,

2020

 

2019

Net (loss) income from discontinued operations, net of tax

$

(20,325)

 

$

51,550 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

446,715 

 

 

(251,633)

Inventory

 

 

 

 

505 

Accounts payable and accrued liabilities

 

(508,136)

 

 

267,723 

Net cash provided by discontinued operations

$

(81,746)

 

$

68,145 

 

 

 

 

 

 

 


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NOTE 8 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were issued, and has determined that no material subsequent events exist.

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATION

 

The following discussion of our financial condition and results of operations should be read in conjunction with our audited financial statements for the year ended December 31, 2019, and the notes to those statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in our annual report, which could cause actual results to differ materially from those anticipated in any forward-looking statements.

 

Results of Operations

 

Comparison of the Three Months Ended March 31, 2020 and 2019

 

Sales and Cost of Sales

 

Due to the termination of our fresh produce business, we did not have any revenue or cost of revenue from continuing operations for the three months ended March 31, 2020 and 2019.

 

Operating Expenses from Continuing Operations

 

Operating expenses from continuing operations for the three months ended March 31, 2020 and 2019, consisted of general and administrative expenses of $22,464 and $10,288, respectively, and salaries and wages of $1,378 and $30,574, respectively. General and administrative expenses consisted primarily of rent expense and professional fees.

 

Other Income from Continuing Operations

 

Other income, which is all interest income, was $1,549 and $3,768 for the three months ended March 31, 2020 and 2019, respectively.

 

Net Loss from Continuing Operations

 

We had a net loss from continuing operations for the three months ended March 31, 2020 and 2019, of $22,293 and $37,094, respectively.

 

Net (Loss) Income from Discontinued Operations

 

Net loss from discontinued operations for the three months ended March 31, 2020, was $20,325, compared to net income of $51,550 from discontinued operations for the three months ended March 31, 2019, due to the following:


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From discontinued operations, we had revenue for the three months ended March 31, 2020, of $0, as compared to $2,947,396 for the three months ended March 31, 2019. Our corresponding cost of revenues for the three months ended March 31, 2020, of $0, as compared to $2,778,915 for the three months ended March 31, 2019.

 

Operating expenses from discontinued operations for the three months ended March 31, 2020, was $30,790, as compared to $118,480 for the three months of March 31, 2019, which consisted of general and administrative expenses of $38,374, business development expenses of $21,392, salaries and wages of $42,500, sales/marketing expenses of $12,845, and payroll taxes of $3,369.

 

Liquidity and Capital Resources

 

As of March 31, 2020, we had working capital of $609,285, slightly down from working capital of $651,355 at December 31, 2019. Our current assets of $609,805 consisted mainly of cash and other receivables. We had retained earnings of $570,614 as of March 31, 2020, down from retained earnings of $613,232 as of December 31, 2019.

 

Net loss for the three months ended March 31, 2020, was $42,618, as compared to net income of $14,456 for the three months ended March 31, 2019. Operating activities used net cash of $151,159, as compared to providing net cash of $14,930 for the three months ended March 31, 2019. Investing activities used net cash of $2,154 and $4,500 during the three months ended March 31, 2020 and 2019, respectively. We had a cash balance from continuing operations at March 31, 2020 and 2019, of $55,851 and $121,927, respectively. We had a cash balance from discontinued operations at March 31, 2020 and 2019 of $500,000 and $500,000, respectively.

 

Our monthly operating costs average approximately $21,000 per month for the foreseeable future while we seek other business opportunities. We plan to fund our operations with our cash on hand.

 

Our interim financial statements have been prepared assuming we will continue as a going concern. We have discontinued our produce operations, and we are pursuing other business opportunities. Our ability to continue our operations as a going concern is dependent on management’s plans, which include finding another business opportunity or another active business that may be interested in acquiring us. The accompanying consolidated interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated interim financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.


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Critical Accounting Policies

 

We have identified the policy outlined below as critical to our business operations and an understanding of our results of operations. We have not included a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by generally accepted accounting principles in the United States (GAAP), with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations when such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the notes to our December 31, 2019, financial statements. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. We cannot assure that actual results will not differ from those estimates.

 

Revenue Recognition

 

Effective January 1, 2018, we adopted Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the company expects to receive in exchange for those goods.

 

We apply the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer to the customer. Once a contract is determined to be within the scope of ASC Topic 606, at contract inception we review the contract to determine which performance obligations we must deliver and which of these performance obligations are distinct. We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, our performance obligations are transferred to customers at a point in time, typically upon delivery.

 

Our shipping terms typically specify FOB origination, at which time title and risk of loss, as well as shipping and handling fees, have passed on to the customer. Shipping and handling costs and fees are treated as a delivered load. On a delivered load versus an FOB load, we actually take the billing and pay the carriers. We contract with the carrier and, therefore, handle the shipping and handling charges and treat them as a “delivered sale.”

 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to provide the information required by this item.


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ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive and financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures as of March 31, 2020, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of March 31, 2020, our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II–OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

 

However, on June 27, 2019, we were served with Petitioner’s Motion to Join 20/20 Global as a Necessary Third-Party Respondent to the Present Action, and to Enforce the Judgment Entered October 9, 2018, by Ordering 20/20 Global, Inc., to Turn Over Marital Securities Earned by Respondent and Awarded to Petitioner and a Subpoena for Deposition (Records only) in the matter of In re the Marriage of Penni Gruenberg v. Myron Gruenberg, Case No. 17 D 3662, pending in the Circuit Court of Cook County, Illinois. Petitioner sought return of the shares originally represented by certificates nos. 539 and 540, which were returned by Mr. Gruenberg and cancelled by us after termination of our agreement with him for his failure to perform under the Master Services Agreement. We did not believe Mr. Gruenberg is entitled to the shares and, therefore, they could not be awarded to his spouse in litigation and vigorously defended this position. On March 6, 2020, an agreed order was entered whereby Penni Gruenberg voluntarily withdrew her petition in accordance with the terms of the settlement agreement dated March 4, 2020. Per the terms of the settlement, we paid $40,000 to Ms. Gruenberg.


15



 

 

ITEM 6. EXHIBITS

 

The following exhibits are filed as part of this report:

 

Exhibit

Number*

 

 

Title of Document

 

 

Location

 

 

 

 

 

Item 31

 

Rule 13a-14(a)/15d-14(a) Certifications

 

 

31.01

 

Certification of Principal Executive and Principal Financial Officer Pursuant to Rule 13a-14

 

This filing.

 

 

 

 

 

Item 32

 

Section 1350 Certifications

 

 

 

 

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

This filing.

 

 

 

 

 

Item 101**

 

Interactive Data File

 

 

101.INS

 

XBRL Instance Document

 

This filing.

 

 

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema

 

This filing.

 

 

 

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase

 

This filing.

 

 

 

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase

 

This filing.

 

 

 

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase

 

This filing.

 

 

 

 

 

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase

 

This filing.

_______________

 

*

All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document.

**

Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or Annual Report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

 

 

SIGNATURE

 

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 hereunto duly authorized.

 

 

20/20 GLOBAL, INC.

 

 

 

 

 

 

Date: May 18, 2020

By:

/s/ Mark D. Williams

 

 

Mark D. Williams, President,

 

 

Chief Executive Officer (Principal Executive

 

 

Officer, Principal Financial Officer)


16