ENOVA HOLDINGS INC
10QSB, 2000-08-18
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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB


(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000


[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE  EXCHANGE ACT


                        Commission file number 000-29069


                              Enova Holdings, Inc.
       (Exact name of small business issuer as specified in its character)



                     Nevada                            33-0803552
        (State or other jurisdiction of        (IRS Employer Identification No.)
         incorporation or organization)



               1196 E. Willow Street, Long Beach California 90806
                    (Address of principal executive offices)


                                  (562) 426-1321
                           (Issuer's telephone number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 __.


As of June 30, 2000,  Enova Holdings,  Inc. had 5,149,712 shares of Common Stock
outstanding.


Transitional Small Business Disclosure Format (check one):

         Yes __                     No  X


                                       1
<PAGE>


                                TABLE OF CONTENTS
                      ENOVA HOLDINGS, INC. AND SUBSIDIARIES


                              Report on Form 10-QSB
                    For the Three Months and Six Months ended
                                  June 30, 2000


                                                                           Page
PART 1 - FINANCIAL INFORMATION

          Item 1. Financial Statements

               Consolidated Balance Sheets - June 30, 2000 (Unaudited)
                 and December 31, 1999                                       3

               Consolidated Statement of Operations - Three Months And
                 Six Months Ended June 30, 2000 and 1999 (Unaudited)         4

               Consolidated Statement of Cash Flows - Six Months Ended
                 June 30, 2000 and 1999 (Unaudited)                          5

               Notes  to   the   Consolidated   Financial   Statements
                 (Unaudited)                                             6 - 7

          Item 2.  Management's  Discussion  and Analysis of Financial
               Condition and Results of Operations                       8 - 9


PART II - OTHER INFORMATION

           Item 1. Legal Proceedings                                        10

           Item 2. Charges in Securities                                    10

           Item 3. Defaults upon Senior Securities                          10

           Item 4. Submission of Matters to Vote of Security holders        10

           Item 5.  Other Information                                       10

           Item 6.  Exhibits and Reports on Form 8-K                        10

           Signatures                                                       11










                                       2
<PAGE>

                     ENOVA HOLDINGS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                                                          June 30,            December 31,
                                                                                            2000                  1999
                                                                                        (Unaudited)
                                                                                     -------------------   -------------------
<S>                                                                                  <C>                   <C>
                                                     ASSETS
CURRENT ASSETS
      Cash and cash equivalents                                                        $         52,841      $         60,373
      Accounts receivable, net                                                                1,200,900             1,177,544
      Inventory                                                                                 707,672               830,783
      Other current assets                                                                        3,509                16,494
                                                                                     -------------------   -------------------
          Total Current Assets                                                                1,964,922             2,085,194
                                                                                     -------------------   -------------------

PROPERTY AND EQUIPMENT, NET                                                                   1,308,390             1,343,883

OTHER ASSETS
       Investments                                                                              818,750             1,506,250
       Intangibles, net                                                                         715,713               734,930
       Receivable from affiliate                                                                 70,256                65,780
                                                                                     -------------------   -------------------
           Total Other Assets                                                                 1,604,719             2,306,960
                                                                                     -------------------   -------------------
TOTAL ASSETS                                                                           $      4,878,031      $      5,736,037
                                                                                     ===================   ===================

                                                           LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
      Accounts payable                                                                 $        935,438      $      1,061,720
      Lines of credit                                                                           262,000               250,000
      Accrued expenses                                                                          424,692               520,248
      Notes payable, current portion                                                          1,025,534               877,156
      Capital lease obligations, current portions                                                13,819                13,112
                                                                                     -------------------   -------------------
             Total Current Liabilities                                                        2,661,483             2,722,236

NOTES PAYABLE, NET OF CURRENT PORTION                                                         1,440,732             1,468,828

CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                                                65,559                71,530
                                                                                     -------------------   -------------------
TOTAL LIABILITIES                                                                             4,167,774             4,262,594
                                                                                     -------------------   -------------------
SHAREHOLDERS' EQUITY
      Preferred stock, $.001 par value, 25,000,000 shares
           authorized, 250 shares issued and outstanding                                              -                     -
      Common stock, $.001 par value, 75,000,000 shares
           authorized, 5,149,712 shares issued and outstanding                                    5,150                 5,150
      Additional paid-in capital                                                              2,332,862             2,332,862
      Accumulated other comprehensive income                                                   (256,250)              431,250
      Accumulated deficit                                                                    (1,371,505)           (1,295,819)
                                                                                     -------------------   -------------------
                Total Shareholders' Equity                                                      710,257             1,473,443
                                                                                     -------------------   -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                             $      4,878,031              5,736,03
                                                                                     ===================   ===================
                                       3
</TABLE>
                 See accompanying notes to financial statements
<PAGE>

                     ENOVA HOLDINGS, INC. AND SUBSIDIARIES
      Consolidated Statement of Operations and Comprehensive Income (Loss)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended                   Six Months Ended
                                                                       June 30,                            June 30,
                                                              2000                1999              2000               1999
                                                       -----------------    ---------------  -----------------   ---------------
<S>                                                        <C>                  <C>              <C>                 <C>
 NET SALES                                                 $  1,536,552         $2,018,309       $  3,242,668        $3,907,073

 COST OF SALES                                                  933,943          1,343,546          2,038,737         2,421,491
                                                       -----------------    ---------------  -----------------   ---------------
 GROSS PROFIT                                                   602,609            674,763          1,203,931         1,485,582
                                                       -----------------    ---------------  -----------------   ---------------
 OPERATING EXPENSES
       Sales and marketing                                       51,426            143,327            384,020           343,970
       General and administrative                               429,829            454,720            717,863           879,222
                                                       -----------------    ---------------  -----------------   ---------------
            Total Operating Expenses                            481,255            598,047          1,101,883         1,223,192
                                                       -----------------    ---------------  -----------------   ---------------

 INCOME (LOSS) FROM OPERATIONS                                  121,354             76,716            102,048           262,390

 OTHER (INCOME) EXPENSES
       Other income
                                                                (7,335)                (39)            (7,336)             (546)
       Interest expense                                         99,998              27,305            182,670            54,671

                                                       -----------------    ---------------  -----------------   ---------------

            Total Other (Income) Expenses                        92,663             27,266            175,334            54,125
                                                       -----------------    ---------------  -----------------   ---------------
 NET INCOME (LOSS) BEFORE
     INCOME TAXES                                                28,691             49,450            (73,286)          208,265

       Income taxes                                                (800)            51,237              2,400            51,237
                                                       -----------------    ---------------  -----------------   ---------------
 NET INCOME (LOSS)                                               29,491             (1,787)           (75,686)          157,028

 OTHER COMPREHENSIVE INCOME
       Unrealized loss on investments                          (381,250)                             (687,500)
                                                       -----------------    ---------------  -----------------   ---------------
 COMPREHENSIVE INCOME (LOSS)                               $   (351,759)        $   (1,787)       $  (763,186)       $  157,028
                                                       =================    ===============  =================   ===============
 Net income (loss) per common share -
   basic and diluted                                       $       0.01         $    (0.00)       $     (0.01)       $     0.03
                                                       =================    ===============  =================   ===============
 Weighted average shares outstanding -
    basic and diluted                                         5,149,712          5,142,936          5,149,712         5,142,936
                                                       =================    ===============  =================   ===============

                 See accompanying notes to financial statements
</TABLE>
                                       4
<PAGE>

                     ENOVA HOLDINGS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                                 June 30,
                                                                            2000         1999
                                                                         ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                      <C>          <C>
      Net income (loss)                                                  $ (75,686)   $ 157,028
      Adjustments to reconcile  net income (loss) to net cash provided
          by (used in) operating activities:
             Depreciation & amortization                                    54,709       58,764
             Changes in assets and liabilities:
               (Increase) decrease in accounts receivable                  (23,356)    (230,800)
               (Increase) decrease in inventory                            123,111      118,436
               (Increase) decrease in other assets                          12,987       (9,508)
               Increase in accounts payable                               (126,285)    (308,636)
               Increase (decrease) in accrued expenses                     (16,177)      27,366
                                                                         ---------    ---------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                        (50,697)    (187,350)
                                                                         ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
      Purchases of property and equipment                                        -      (11,130)
      Advances to affiliate                                                 (4,476)      (8,166)
                                                                         ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                                       (4,476)     (19,296)
                                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
      Net proceeds from lines of credit                                     12,000      200,000
      Proceeds from notes payable                                           46,207         --
      Payments on notes payable                                             (5,302)    (248,123)
      Payments on capital lease                                             (5,264)      (2,293)

                                                                         ---------    ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                         47,641      (50,416)
                                                                         ---------    ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (7,532)    (257,062)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                60,373      345,114
                                                                         ---------    ---------

CASH AND CASH EQUIVALENTS, JUNE 30                                       $  52,841    $  88,052
                                                                         =========    =========


                 See accompanying notes to financial statements
</TABLE>
                                       5

<PAGE>

                      ENOVA HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)

Note 1. Organization

         Enova Holdings, Inc.("Enova" or the "Company") is engaged in the
         distribution, service, and manufacturing of custom process equipment
         packages for the air and gas handling equipment industry. The Company
         operates through two operating subsidiaries: Pego Systems, Inc.("Pego")
         and Pacific Pneumatics, Inc. ("PPI").


Note 2.  Basis of Presentation

         The accompanying  unaudited consolidated financial statements have been
         prepared in accordance with generally  accepted  accounting  principles
         and the rules and regulations of the Securities and Exchange Commission
         for interim financial information. Accordingly, they do not include all
         the   information   and  footnotes   necessary   for  a   comprehensive
         presentation of financial position and results of operations.

         It is  management's  opinion,  however,  that all material  adjustments
         (consisting of normal recurring  adjustments)  have been made which are
         necessary for a fair financial statement presentation.  The results for
         the interim period are not necessarily  indicative of the results to be
         expected for the year.

         For further information, refer to the consolidated financial statements
         and footnotes of Enova Holdings,  Inc. and Subsidiaries included in the
         Company's Form 10 - SB/A for the year ended December 31, 1999.


Note 3. Legal Matters

         On January  14,  2000,  the bank with whom the  Company had its line of
         credit and a term loan,  demanded payment in full of these  obligations
         in the amount of  $924,636,  and filed a complaint  against the Company
         for  alleged  no-payment  of the  promissory  note  and  breach  of the
         security  agreement.  This amount is  recorded  as a  liability  on the
         Company's financial statements at June 30, 2000. Management and counsel
         have reviewed the complaint and have interposed numerous defenses.  The
         Company  continues  to  believe  that  there is no legal  basis for the
         prosecution of this action.


Note 4. Going Concern

         The Company  continues to be in violation of certain debt  covenants in
         connection  with certain  notes  payable to a bank.  In  addition,  the
         Company  has  continuing  losses  from  operations.  The ability of the
         Company to continue as a going  concern is dependent  on the  Company's
         ability  to raise  additional  capital  or obtain  debt  financing  and
         generate  income  from  operations.  The  financial  statements  do not
         include  any  adjustments  that might be  necessary  if the  Company is
         unable to continue as a going concern.

                                       6
<PAGE>


                      ENOVA HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (UNAUDITED)


Note 4. Going Concern (continued)

         Management  plans to sell its investment in Hartcourt common stock upon
         effectiveness of a registration statement filed by Hartcourt,  however,
         it is not currently known when this might occur.  Management  continues
         to believe,  however,  that actions  presently  being taken to generate
         cash and  thus  pay the bank  loans  provide  the  opportunity  for the
         Company to continue as a going concern.




































                                       7

<PAGE>



PART 1 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS:

RESULTS OF OPERATIONS

The  accompanying  financial  statements  of Enova for the three  months and six
months  ended June 30,  2000  include  operations  of Enova,  Pego and PPI.  The
accompanying financial statements for the three months and six months ended June
30, 1999 include operations of Pego and PPI.

Comparison  of the Three  Months  and Six Months  Ended  June 30,  2000 to Three
Months and Six Months Ended June 30, 1999:

Sales:  Sales decreased by approximately  $481,800 and $644,400 during the three
months and six months  ended June 30, 2000 when  compared to the same periods in
1999. The decrease in sales resulted primarily due to Enova not able to complete
shipments of major engineering packages due to back-ordered parts.

Cost of Sales.  Cost of sales decreased by  approximately  $409,600 and $382,750
during the three months and six months ended June 30, 2000 when  compared to the
same  periods  in 1999.  Cost of Sales as a  percentage  of sales  decreased  to
approximately  61% and increased to 62% of sales during the three months and six
months ended June 30, 2000 as compared to approximately 67% and 62% of sales for
the same  periods in 1999.  The decrease in cost of sales was  primarily  due to
sale of product mix with higher gross margin  during the three months ended June
30, 2000 compared to the sale of product mix during the same periods in 1999.

Sales and marketing:  Sales and marketing  expenses  decreased by  approximately
$91,900 and  increased  by $40,050  during the three months and six months ended
June 30, 2000 when  compared to the same  periods in 1999.  Sales and  marketing
expenses as a percentage  of sales  decreased to  approximately  3% of sales and
increased  to 12% of sales during the three months and six months ended June 30,
2000 as compared  to  approximately  7% and 9% of sales for the same  periods in
1999.  Such  decrease  was  primarily  due to  Enova  reducing  advertising  and
marketing  activities during the three months ended June 30, 2000 as compared to
the same period in 1999.  However,  sales and marketing expense increased due to
Enova expanding direct sales and increased  advertising and marketing expense in
the six months ended June 30, 2000 as compared to the same period in 1999.

General  and  administrative  expenses.   General  and  administrative  expenses
decreased by approximately  $24,890 and $161,360 during the three months and six
months ended June 30, 2000 when  compared to the same  periods in 1999.  General
and administrative  expenses as a percentage of sales increased to approximately
28% and 22% of sales during the six months ended June 30, 2000 when  compared to
approximately  23% and 22% of sales for the same periods in 1999.  Such decrease
was primarily due to the increased  administrative,  legal and accounting costs,
and payroll  expenses  incurred in  connection  with the  organization  of Enova
during the three months and six months ended June 30, 1999  compared to the same
periods in 2000.




                                       8

<PAGE>


Interest  Expense:  Interest  expense  increased  by  approximately  $72,690 and
$128,000  during  the three  months  and six  months  ended  June 30,  2000 when
compared to the same  periods in 1999.  The  increase  in  interest  expense was
primarily due to higher rate of interest  charged to Enova on loans  outstanding
to the bank and third party  during the three and six months ended June 30, 2000
as compared to the same periods in 1999. Liquidity and Capital Resources

At June 30, 2000, Enova had cash and cash  equivalents of approximately  $52,840
and working capital deficiency of approximately  $696,560.  The company believes
that its existing  working  capital  deficit  together with funds generated from
operations will not be sufficient to provide for its planned  operations for the
foreseeable  future.  Enova  regularly  examines   opportunities  for  strategic
acquisitions of other  companies or lines of businesses and anticipates  that it
may from time to time issue additional debt and/or equity  securities  either as
direct consideration for such acquisitions or raise additional funds to be used,
in whole or part, in payment of acquired  securities or assets.  The issuance of
such  securities  could  be  expected  to  have a  dilutive  impact  on  Enova's
shareholders,  and there can be no assurances as to whether or when any acquired
business would  contribute  positive  operating  results  commensurate  with the
associated investment.



































                                       9

<PAGE>




                           PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

         There have been no changes since the  Company's  last report in Item 3,
         "Legal  Proceedings"  of Form  10-SB/A for the year ended  December 31,
         1999.

Item 2.   CHANGES IN SECURITIES

         Not applicable.

Item 3.   DEFAULTS UPON SENIOR SECURITIES

         None.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

Item 5.   OTHER INFORMATION

         None.

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits - None.

         (b)   Reports on Form 8-K - None during the quarter.



                                      10
<PAGE>





                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                                     ENOVA HOLDINGS, INC.


Date:  August  17,  2000                  By: /s/  Dr.  Alan V.  Phan
                                             -------------------------------
                                                   Dr.  Alan V.  Phan
                                                  Chairman of the Board
                                                      and President





















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