SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995 Commission File No.: 0-12746
HART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
87-0399267
(I.R.S. Employer Identification Number)
2 Park Plaza, Suite 470, Irvine, California
(Address of principal executive offices)
92614
(Zip Code)
(714) 553-3279
(Registrant's telephone number, including area code)
N/A
Former Address, if changed since last report)
N/A
(Former Zip Code, if changed since last report)
N/A
(Former telephone number, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for 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 No X
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1995, there were 1,730,960 shares of the Registrant's
$.01 par value common stock issued and outstanding.
Total No. of Pages: 13
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HART INDUSTRIES, INC.
INDEX
Page
PART I
Item 1. Financial Statements
Balance Sheets - June 30, 1995 (unaudited) and
December 31, 1994 (audited) ...................................1
Statements of Operations - Three and Six Months Ended
June 30, 1995 and 1994 (unaudited)............................2
Statements of Cash Flows - Six Months Ended June 30, 1995
(unaudited) and June 30, 1994 (unaudited)......................3
Notes to Financial Statements (unaudited)........................4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....................7
PART II
Item 1. Legal Proceedings................................................8
Item 2. Changes In Securities............................................8
Item 3. Defaults Upon Senior Securities..................................8
Item 4. Submission of Matters to a Vote of Security Holders..............8
Item 5. Other Information................................................8
Item 6. Exhibits and Reports on Form 8-K.................................8
I
[HART\10Q\HRT63095]-7
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Balance Sheets
As of June 30, 1995 (Unaudited) and
December 31, 1994 (Audited)
June 30, December 31,
1995 1994
--------------------- ---------------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,894 $ 185
---------------------- ---------------------
Total Current Assets 1,894 185
Property held for sale 6,910 61,910
---------------------- ---------------------
TOTAL ASSETS $ 8,804 $ 62,095
====================== =====================
Current Liabilities:
Accounts payable and accrued expenses $ 58,446 $ 5,474
Due to affiliates 76,500 56,000
---------------------- ---------------------
Total Current Liabilities 134,946 61,474
Stockholders' Deficiency:
Common stock - par value $.01; authorized 50,000,000 shares; 1,730,960 shares
issued and outstanding, as of June 30, 1995
and December 31, 1994 17,310 17,310
Additional paid-in capital 5,252,948 5,252,948
Accumulated deficit (5,396,400) (5,269,637)
---------------------- ----------------------
Total Stockholders' Deficiency (126,142) 621
---------------------- ---------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 8,804 $ 62,095
====================== =====================
</TABLE>
See accompanying notes to these financial statements
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Statements of Operations
For the Three and Six Months Ended
June 30, 1995 and 1994 (Unaudited)
For The Three Months For The Six Months
Ended June 30, Ended June 30,
---------------------------------------------- ----------------------------------------------
1995 1994 1995 1994
--------------------- ----------------------- ----------------------- ---------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Interest and other $ - $ 18,750 $ - $ 37,500
--------------------- ----------------------- ----------------------- ---------------------
Totals - 18,750 - 37,500
--------------------- ----------------------- ----------------------- ---------------------
Costs and expenses:
General and administrative 69,708 19,197 126,763 49,467
--------------------- ----------------------- ----------------------- ---------------------
Totals 69,708 19,197 126,763 49,467
--------------------- ----------------------- ----------------------- ---------------------
Net income (loss) $ (69,708) $ (447) $ (126,763) $ (11,967)
===================== ======================= ======================= =====================
Net income (loss) applicable
to common stock $ (69,708) $ (447) $ (126,763) $ (11,967)
===================== ======================= ======================= =====================
Net loss per common share $ (.040) $ (.001) $ (.073) $ (.025)
===================== ======================= ======================= =====================
Weighted average common
shares outstanding 1,730,960 480,962 1,730,960 480,962
===================== ======================= ======================= =====================
</TABLE>
See accompanying notes to these financial statements
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Statements of Cash Flows
For the Six Months Ended June 30, 1995 and 1994 (Unaudited)
Six Months Ended June 30,
1995 1994
-------------------- -------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Operating activities:
Net income (loss) $ (126,763) $ (11,967)
Adjustments to reconcile net income (loss) to net
cash provided (used) in operating activities: - -
Increase (decrease) from changes in:
Interest receivable - (27,500)
Accounts payable and accrued expenses 52,972 35,519
Due to affiliate 20,500 -
-------------------- --------------------
Net cash provided (used) in operating activities (53,291) (3,948)
-------------------- --------------------
Investing activities:
Disposal of property and equipment 55,000 -
-------------------- --------------------
Net cash provided (used) by investing activities 55,000 -
-------------------- --------------------
Net increase (decrease) in cash and cash equivalents 1,709 (3,948)
Cash and cash equivalents, beginning of period 185 7,531
-------------------- --------------------
Cash and cash equivalents, end of period $ 1,894 $ 3,583
==================== ====================
</TABLE>
See accompanying notes to these financial statements
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HART INDUSTRIES, INC.
Notes to Financial Statements
June 30, 1995
Note 1. Summary of Significant Accounting Policies and Business Activities
Basis Of Presentation
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all normal adjustments, consisting
of normal recurring accruals, considered necessary for a fair
presentation have been included. The financial statements include
the balance sheet and statements of operations and cash flows of
Hart Industries, Inc. ("Company") as of June 30, 1995 and for the
three and six month periods then ended. It is suggested that these
condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's
December 31, 1994 audited financial statements. The results of
operations for the periods ended June 30, 1995 and 1994 are not
necessarily indicative of the operating results for the full year.
Organization
The Company was in the development stage from incorporation in
October, 1982 to September 30, 1990. Activities through September
30, 1990 principally consisted of organizing the Company, issuing
common stock for cash, services, and equipment, negotiation of
license agreements and incurring research and development costs.
All costs, except those associated with the license agreements,
patents, trademarks and equipment costs, were expensed as incurred
during the development stage. In December, 1990, the Company sold
its assets and all rights to the nonelectric dishwasher for a note
receivable and future royalties. During 1990, the Company began
performing sludge dewatering operations through its Transportable
Treatment Unit ("TTU") and was taken out of the development stage
for accounting purposes. The revenue generated in 1990 was from
the Environmental Services Division and the TTU. There was no
revenue generated in 1991 from the TTU. 1992 revenue was generated
through the Environmental Services Division. Since 1992, there
have been no operating revenues through the date of this Report.
Principles of Management Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles 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 amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Reorganization
Effective March 8, 1994 the Company reorganized via a merger with
a newly formed Nevada corporation whose name became Hart
Industries, Inc. at the effective date. The Merger Agreement was
approved by the Company's stockholders at the Annual Meeting held
on January 18, 1994. Under the Merger Agreement each shareholder
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HART INDUSTRIES, INC.
Notes to Financial Statements
June 30, 1995
Note 1. Summary of Significant Accounting Policies (Continued)
received one share in the Nevada corporation for every twenty
shares held in the Company. Any fractional shares resulting from
the merger were rounded up to the nearest whole share. As a result
of the merger, the number of authorized shares of common stock
increased from 10,000,000 to 50,000,000 while retaining the same
$.01 par value. All share and per share amounts have been restated
to give effect to the merger.
Going Concern
The Company has experienced recurring net losses, has limited
liquid resources, negative working capital and has no current
operations. Management's intent is to keep searching for
additional sources of capital and new operating opportunities. In
the interim, the Company will keep operating with minimal overhead
and key administrative functions will be provided by an affiliate.
Accordingly, the accompanying consolidated financial statements
have been presented under the assumption that the Company will
continue as a going concern.
Reclassification of Prior Year Amounts
To enhance comparability, the fiscal 1994 consolidated financial
statements have been reclassified, where appropriate, to conform
with the financial statement presentation used in fiscal 1995.
Note 2. Sale of Manufacturing Assets
In July 1993, the Company acquired certain manufacturing assets
and, in conjunction with its equipment leasing activities, leased
the assets to a third party. The Company terminated the lease due
to the lessee's default, and in May 1995, sold the assets at
auction for $72,710, resulting in a gain on sale of $10,800.
Note 3. Business Condition
The Company has experienced negative cash outflows from operating
activities through 1992 and ceased operations in March 1992, prior
to capital restructuring and change in management. Cash
contributions from SAC provided the financial support necessary
for the Company to satisfy its obligations through 1992. Since
January 1993, NuVen Advisors, Inc., an affiliate ("NuVen"), has
provided financial and administrative support for the Company's
operations. The Company expects to receive continued financial and
administrative support from NuVen until a new business opportunity
is acquired or developed. As of the date of this Report, the
Company has no operations, however, is continuing to seek new
opportunities.
Note 4. Subsequent Events
Effective April 1996, the Company entered into a Consulting
Agreement with Mr. Steven Dong, pursuant to which Mr. Dong is to
perform accounting services and to hold the office of Chief
Financial Officer through June 30, 1996. Pursuant to the agreement
the Company agreed to pay Mr. Dong $10,000 in cash or in the
[HART\10Q\HRT63095]-7
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HART INDUSTRIES, INC.
Notes to Financial Statements
June 30, 1995
Note 4. Subsequent Events (Continued)
Company's common stock, payable monthly in arrears, and granted
him an option to purchase 166,666 shares of the Company's common
stock at an exercise price of $.01 per share. No cash payments
were made to Mr. Dong by the Company during the first six months
of fiscal 1995 for services provided by Mr. Dong prior to his
Consulting Agreement. The Company expensed $0 during the first six
months of fiscal 1995 and had no amounts due as of June 30, 1995.
In July 1996, the Company entered into a Consulting Agreement with
John Desbrow, pursuant to which Mr. Desbrow is to perform legal
services and to hold the office of Secretary and Director.
Pursuant to the agreement the Company agreed to pay Mr. Desbrow
$2,000 per month commencing August 1, 1994. No cash payments have
been made to Mr. Desbrow by the Company during the first six
months of fiscal 1995 for services provided. The Company expensed
$15,500 and $0 during the first six months of fiscal 1995 and 1994
respectively, and had $25,500 and $0 amount due as of June 30,
1995 and 1994 respectively.
[HART\10Q\HRT63095]-7
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended June 30, 1995 Compared to Three Months Ended
June 30, 1994
There were no operations during the three months ended
June 30, 1995. As a result there were no revenues or cost of
revenues recorded during the three months ended June 30, 1995.
The Registrant's general and administrative expenses were
$69,708 for the three months ended June 30, 1995, as compared to
$19,197 for the same period last year. The increase is primarily
attributable to the accrual of continued professional services
provided by consultants under professional advisory and management
agreements.
The Registrant earned $18,750 in interest income for the
three months ended June 30, 1994. There was no such interest
earned for the same period this year.
Six Months Ended June 30, 1995 Compared to Six Months Ended June
30, 1994
The Registrant had no operations for the six months ended
June 30, 1995 or the six months ended June 30, 1994.
The Registrant's general and administrative expenses were
$126,763 for the six months ended June 30, 1995, as compared to
$49,467 for the same period last year. The increase is primarily
attributable to the accrual of continued professional services
provided by consultants under professional advisory and management
agreements.
The Registrant earned $37,500 in interest income for the
six months ended June 30, 1994. There was no such interest earned
for the same period this year.
Liquidity and Capital Resources
The Registrant has continued to incur net losses and
negative cash flows from operating activities. The Registrant had
cash and cash equivalents of approximately $1,894 and $185 as of
June 30, 1995, and December 31, 1994, respectively, and negative
working capital of $133,052 and $61,289 as of June 30, 1995, and
December 31, 1994, respectively. The increase in working capital
deficiency is a direct result of the Registrant incurring
professional, consulting and advisory services and other overhead
during the first six months of fiscal year 1995. As of the date of
this Report, the Registrant has no material commitments for
capital expenditures and no commitments for additional equity or
debt financing, and no assurances can be made that its working
capital needs can be met out of future operations or borrowing.
As a result of the Registrant having no revenue producing
activities, the Registrant had limited cash and cash equivalents
remaining as of June 30, 1995 to finance future operations. The
Registrant has received financial support from an affiliate and is
dependent upon the affiliate for future working capital. The
Registrant's plan is to continue searching for additional sources
of equity and working capital and new operating opportunities. In
the interim, the Registrant's existence is dependent upon
continuing financial support from the affiliate which
[HART\10Q\HRT63095]-7
7
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is estimated to be approximately $99,000 for the remainder of
fiscal year 1995 based upon agreements and obligations the
Registrant has at June 30, 1995. Such conditions raise substantial
doubt about the Registrant's ability to continue as a going
concern.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes In Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission Of Matters To A Vote Of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits And Reports On Form 8-K
(a) Exhibits:
#27 Financial Data Schedule
(b) Reports on Form 8-K: None
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
HART INDUSTRIES, INC.
Dated: January 20, 1997 By: /s/ Fred G. Luke
----------------------------------
Fred G. Luke,
President and Director
Dated: January 20, 1997 By: /s/ John D. Desbrow
----------------------------------
John D. Desbrow,
Secretary and Director
Dated: January 20, 1997 By: /s/ Steven H. Dong
----------------------------------
Steven H. Dong,
Chief Financial Officer
[HART\10Q\HRT63095]-7
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,894
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,894
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,804
<CURRENT-LIABILITIES> 134,946
<BONDS> 0
0
0
<COMMON> 17,310
<OTHER-SE> (143,452)
<TOTAL-LIABILITY-AND-EQUITY> 8,804
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 126,763
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (126,763)
<INCOME-TAX> 0
<INCOME-CONTINUING> (126,763)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (126,763)
<EPS-PRIMARY> (.073)
<EPS-DILUTED> 0
</TABLE>
