Mycotopia Therapies, Inc. - Quarter Report: 2019 September (Form 10-Q)

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 September 30, 2019

☐	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: None
Title of each class		Trading Symbol(s)		Name of each exchange on which registered

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 [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 14, 2019, 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 September 30, 2019

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Item		Page
	Part I—Financial Information

1	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 (unaudited)	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders Equity for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018 (unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (unaudited)	7
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
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

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PART I–FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

20/20 GLOBAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30, 2019		December 31, 2018

ASSETS
Current assets:
Cash in bank	$	754,418	$	611,497
Accounts receivable		665,790		811,761
Prepaid expenses		6,366		3,137
Other deposits		52,538		56,116
Note receivable		2,500		-
Inventory		13,393		16,593
Total current assets		1,495,005		1,499,104

Right of use asset, net		15,638		-
Property, plant and equipment, net		548		871

TOTAL ASSETS	$	1,511,191	$	1,499,975

LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	738,102	$	799,397
Accrued liabilities		12,638		3,238
Lease liability		2,358		-
Income tax payable		-		50,240
Total current liabilities		753,098		852,875

Lease liability – net of current portion		13,280		-

TOTAL LIABILITIES		766,378		852,875

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		706,142		608,429

TOTAL STOCKHOLDERS’ EQUITY		744,813		647,100

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,511,191	$	1,499,975

See accompanying notes to the unaudited condensed consolidated financial statements.

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20/20 GLOBAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018

Revenue	$	3,556,333	$	3,345,834	$	10,411,460	$	9,751,693
Cost of revenues		3,399,083		3,191,769		9,922,771		9,292,905
Gross profit		157,250		154,065		488,689		458,788

Operating Expenses:
General and administration expenses		43,642		37,617		146,719		110,861
Business development		200		11,340		41,726		33,550
Salaries and wages		65,100		69,540		203,024		208,317
Sales/marketing expense		7,953		11,070		25,639		30,488
Taxes - payroll		4,784		5,199		15,314		15,902
Total operating expense		121,679		134,766		432,422		399,118

Income from Operations		35,571		19,299		56,267		59,670

Other Income (Expense):
Interest income		4,697		4,276		13,167		10,807
Interest expense		(8)		(3)		(8)		(31)
Miscellaneous income		3,660		2,610		28,287		2,284
Total other income		8,349		6,883		41,446		13,060

Income before provision for income tax		43,920		26,182		97,713		72,730
Provision for income tax expense		-		(6,620)		-		(6,620)

Net income	$	43,920	$	19,562	$	97,713	$	66,110

Basic and fully diluted earnings per share	$	0.00	$	0.00	$	0.01	$	0.01

Weighted average shares outstanding – basic and diluted		12,425,420		13,136,312		12,425,420		12,721,675

See accompanying notes to the unaudited condensed consolidated financial statements.

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20/20 GLOBAL, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 2018

(Unaudited)

							Additional
	Preferred Stock			Common Stock			Paid-in		Retained
	Shares	Amount		Shares	Amount		Capital		Earnings		Total

Balance, December 31, 2017	-	$	-	12,152,000	$	12,152	$	12,848	$	547,227	$	572,227
Net income	-		-	-		-		-		7,211		7,211
Balance, March 31, 2018	-		-	12,152,000		12,152		12,848		554,438		579,438
Net income	-		-	-		-		-		39,337		39,337
Balance, June 30, 2018	-	$	-	12,152,000	$	12,152	$	12,848	$	593,775	$	618,775
Common shares issued to directors for reimbursement	-		-	984,312		984		12,687		-		13,671
Net income	-		-	-		-		-		19,562		19,562
Balance, September 30, 2018	-	$	-	13,136,312	$	13,136	$	25,535	$	613,337	$	652,008

20/20 GLOBAL, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Nine Months Ended September 30, 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
Net income	-		-	-		-		-		39,337		39,337
Balance, June 30, 2019	-	$	-	12,425,420	$	12,425	$	26,246	$	662,222	$	700,893
Net income	-		-	-		-		-		43,920		43,920
Balance, September 30, 2019	-	$	-	12,425,420	$	12,425	$	26,246	$	706,142	$	744,813

See accompanying notes to the unaudited condensed consolidated financial statements

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20/20 GLOBAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended September 30,
	2019		2018

Cash Flows from Operating Activities:
Net income	$	97,713	$	66,110
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		323		672
Change in assets and liabilities:
Accounts receivable		145,971		(28,087)
Prepaids and other receivables		349		1,064
Inventory		3,200		(7,116)
Accounts payable and accrued liabilities		(51,895)		34,605
Income tax receivable		-		(28,000)
Income tax payable		(50,240)		6,620
Net cash provided by operating activities		145,421		45,868

Cash Flows from Investing Activities:
Proceeds from note receivable		(4,500)		-
Repayment of note receivable		2,000		-
Net cash used in investing activities		(2,500)		-

Net increase in cash		142,921		45,868
Cash at beginning of period		611,497		680,031
Cash at end of period	$	754,418	$	725,899

Supplemental Cash Flow Information:
Cash paid for interest	$	-	$	31
Cash paid for income taxes	$	21,419	$	6,000

Schedule of non-cash Investing and Financing Activities:
Liability for unissued shares – officers settled with common stock	$	-	$	13,671
Shares issued to directors for reimbursement of personally issued shares placed in escrow for Master Services Agreement	$	-	$	711
Establish operating lease right of use asset and related liability	$	15,638	$	-

See accompanying notes to the unaudited condensed consolidated financial statements.

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20/20 GLOBAL, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2019

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Business Activity

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 are a supplier of apples, potatoes, seasonal vegetables, consolidated citrus, and transportation solutions in the food industry. We ship from 10 separate geographical locations across the United States.

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, 2018. The results of the nine months ended September 30, 2019, are not necessarily indicative of the results to be expected for the full year ending December 31, 2019.

In the opinion of management, all adjustments necessary to present fairly the consolidated financial statements as of and for the interim period ended September 30, 2019, have been included. 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 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.

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.

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Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of less than three months, which 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 are 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 nine months ended September 30, 2019, and for the year ended December 31, 2018, was $0 and $0, respectively. The write-offs for the nine months ended September 30, 2019 and 2018, were $0 and $0, respectively.

Inventory

Substantially all inventories are stated at cost at the lower of first-in, first-out (“FIFO”) method or market. Inventory consists of packaging/raw materials.

Fixed Assets and Depreciation

Property, plant, and equipment are stated at cost. For financial reporting, we provide for depreciation on the straight-line method at rates based upon the estimated useful lives of the various assets. Depreciation expense was $323 and $672 for the nine months ended September 30, 2019 and 2018, respectively. The estimated useful lives are as follows: buildings and improvements—30 years; machinery and equipment—10-15 years; computer software—3-5 years; vehicles—3-7 years; and land improvements—10-20 years. We assess our long-lived assets for impairment whenever there is an indicator of impairment. Impairment losses are evaluated if the estimated undiscounted cash flows from using the assets are less than carrying value. A loss is recognized when the carrying value of an asset exceeds its fair value.

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.

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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.

There was no impact on our financial statements as a result of adopting ASC Topic 606 for the three and nine months ended September 30, 2019.

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.”

Sales to our largest customer amounted to approximately 62.4% and 59.8% of our total net sales for the three and nine months ended September 30, 2019, respectively. Our top two customers collectively accounted for approximately 99.9% and 98.7% of our total net sales for the three and nine months ended September 30, 2019, respectively.

Sales to our largest customer amounted to approximately 70.7% and 70% of our total net sales for the three and nine months ended September 30, 2018, respectively. Our top two customers collectively accounted for approximately 99.4% and 90% of our total net sales for the three and nine months ended September 30, 2018, respectively.

Our largest customer amounted to approximately 55% and 39% of our total accounts receivable as of September 30, 2019, and December 31, 2018, respectively.

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. This new guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We have elected to not recognize lease assets and liabilities for leases with a term less than 12 months. For leases greater than 12 months, we have recorded the applicable right-of-use asset and lease liability. There was no material impact on earnings.

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

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NOTE 3 – LEASE

On April 1, 2019, we entered into a lease agreement with Colin Gibson, director, for the lease of an automobile. The lease is considered an operating lease, requires monthly payments of $350, and has a term of six years.

We have accounted for the lease under ASU 842 Leases, as follows:

	Balance Sheet Classification	September 30, 2019
Asset
Operating lease asset	Right of use asset	$	15,638
Total lease asset		$	15,638

Liability
Operating lease liability – current portion	Current operating lease liability	$	2,358
Operating lease liability – noncurrent portion	Long-term operating lease liability		13,280
Total lease liability		$	15,638

Lease obligations at September 30, 2019, consisted of the following:

For the year ended December 31:
2019	$	1,050
2020		4,200
2021		4,200
2022		4,200
2023		4,200
Thereafter		5,250
Total payments	$	23,100
Amount representing interest	$	7,462
Lease obligation, net		15,638
Less current portion		(2,358)
Lease obligation – long term	$	13,280

The lease expense for the three and nine months ended September 30, 2019, was $1,050 and $2,100, respectively, which for the nine months consisted of amortization expense of $1,110 and interest expense of $990. The cash paid under our operating lease during the nine months ended September 30, 2019, was $2,100. We have used a discount rate of 8%, which is our deemed incremental borrowing rate.

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 $12,233 and $14,021 during the nine months ended September 30, 2019 and 2018, 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 nine months ended September 30, 2019 and 2018, we contributed $5,810 and $4,113, respectively, to the IRA Plan.

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NOTE 6 – SUBSEQUENT EVENTS

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, Subsequent Events, 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, 2018, which are included in our Registration Statement on Form 10/A (Amendment No. 2), and our unaudited financial statements for the three and nine months ended September 30, 2019, and the notes to those statements included in this Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. You should specifically consider the various risk factors identified in our registration statement, 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 September 30, 2019 and 2018

Sales and Cost of Sales

We had revenue for the three months ended September 30, 2019, of $3,556,333, as compared to $3,345,834 for three months ended September 30, 2018, an increase of 6.2% period over period. Our corresponding cost of revenues for the three months ended September 30, 2019, was $3,399,083, as compared to $3,191,769, for the three months ended September 30, 2018, an increase of 6.4% period over period. Gross profit for the same periods was $157,250 and $154,065, respectively, an increase of 2.0%. The increase in our gross margin and changes in revenue and costs are due to higher potato and onion commodity prices in the current period.

Operating Expenses

Operating expenses for the three months ended September 30, 2019 and 2018, consist of the following:

General and administrative expenses were $43,642 and $37,617, respectively, an increase of 16% period over period, primarily due to a new automobile lease and other fees. Some of our larger general and administrative expenses include professional fees, rent, insurance, telephone, and dues and subscriptions (which consisted of monthly office subscriptions, server/cloud hosting, electronic data interchange fees).

Business development expenses were $200 and $11,430, respectively, a decrease of $11,230. Business development expenses consist of local community financial contributions, meetings with customers and suppliers, and annual fees charged for corporate-sponsored meetings and events. No such expenses were incurred for the current period.

Salaries and wages were $65,100 and $69,540, respectively, a decrease of 6.3%, which was not material.

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Sales/marketing expenses were $7,953 and $11,070, respectively, a decrease of 28.1% as a result of decreased travel expenses period over period.

Payroll taxes were $4,784 and $5,199, respectively, a decrease of 7.9%, which is not material.

Other Income

Other income for the three months ended September 30, 2019 and 2018, was $8,349 and $6,883, respectively, other income consists of interest and other miscellaneous income.

Net Income

For the above reasons, we had net income of $43,920 for the three months ended September 30, 2019, as compared to $19,562 (after a $6,620 provision for income taxes) for the comparable period in 2018.

Comparison of the Nine Months Ended September 30, 2019 and 2018

Sales and Cost of Sales

We had revenue for the nine months ended September 30, 2019, of $10,411,460, as compared to $9,751,693 for nine months ended September 30, 2018, an increase of 6.7% period over period. Our corresponding cost of revenues for the nine months ended September 30, 2019, was $9,922,771, as compared to $9,292,905 for the nine months ended September 30, 2018, an increase of 6.7% period over period. Gross profit for the same periods was $488,689 and $458,788, respectively, an increase of 6%. The increase in our gross margin is due to a shift to a customer base with slightly more profitable outlets and higher potato and onion commodity prices in the current period.

Operating Expenses

Operating expenses for the nine months ended September 30, 2019 and 2018, consist of the following:

General and administrative expenses were $146,719 and $110,867, respectively, an increase of 32.3% period over period, primarily due to professional fees incurred to become a public reporting company and a new automobile lease. Some of our larger general and administrative expenses include professional fees, rent, insurance, telephone, and dues and subscriptions (which consisted of monthly office subscriptions, server/cloud hosting, electronic data interchange fees).

Business development expenses were $41,726 and $33,550, respectively, an increase of 24.3%, as a result of an annual fee paid to our merchandiser and overall increases to our general business activity. Business development expenses consist of local community financial contributions, meetings with customers and suppliers, and annual fees charged for corporate-sponsored meetings and events.

Salaries and wages were $203,024 and $208,317, respectively, a decrease of 2.5% and not material.

Sales/marketing expenses were $25,639 and $30,488, respectively, a decrease of 15.9% as a result of decreased travel expenses period over period.

Payroll taxes were $15,314 and $15,902, respectively, a decrease of 3.6% and not material.

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Other Income

Other income for the nine months ended September 30, 2019 and 2018, was $41,446 and $13,060, respectively, a substantial increase period over period due to a refund we received from the overpayment of taxes in the prior year.

Net Income

For the above reasons, we had net income of $97,713 for the nine months ended September 30, 2019, as compared to $66,110 (after a $6,620 provision for income taxes) for the comparable period in 2018.

Liquidity and Capital Resources

As of September 30, 2019, we had working capital of $741,907, slightly up from working capital of $646,229 at December 31, 2018. Our current assets of $1,495,005 consisted mainly of accounts receivable and cash. We had retained earnings of $706,142 as of September 30, 2019, up from retained earnings of $608,429 as of December 31, 2018.

Net income for the nine months ended September 30, 2019, was $97,713, compared to a net income of $66,110 for the nine months ended September 30, 2018. Operating activities provided net cash of $145,421 for the nine months ended September 30, 2019, as compared to providing net cash of $45,868 for the same period in 2018. Investing activities used net cash of $2,500 during the nine months ended September 30, 2019, as compared to $0 for the same period in 2018. We had a cash balance of $754,418 and $725,899 as of September 30, 2019 and 2018, respectively. The cash increase period over period is a result of increased income from operations.

Our monthly operating costs average approximately $40,000 per month, which are hard costs and unaffected by revenue fluctuations from market conditions. We plan to continue to fund our operations through the cash flow from our operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

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, 2018, 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.

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Revenue Recognition

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.

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 September 30, 2019, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officer concluded that, as of September 30, 2019, 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 seeks 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 do not believe Mr. Gruenberg is entitled to the shares and, therefore, they could not be awarded to his spouse in litigation. We are vigorously defending our position in this action. We have noted our position with the court and have been provided the opportunity to submit a brief detailing our position.

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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: November 14, 2019	By:	/s/ Mark D. Williams
		Mark D. Williams, President,
		Chief Executive Officer (Principal Executive
		Officer, Principal Financial Officer)