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, 1998 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 I.D. Number)
4695 MacArthur Court, Suite 530, Newport Beach, CA
(Address of principal executive offices)
92660
(Zip Code)
(949) 475-6745
(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, 1998, there were 1,730,960 shares of the Registrant's
$.01 par value common stock issued and outstanding.
[HART\10Q:HRT63098]-3
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HART INDUSTRIES, INC.
INDEX
Page
PART I
Item 1. Financial Statements
Condensed Balance Sheet - June 30, 1998 (unaudited) .............1
Condensed Statements of Operations - Three and Six Months Ended
June 30, 1998 and 1997 (unaudited).............................2
Condensed Statements of Cash Flows - Six Months Ended
June 30, 1998 (unaudited) and June 30, 1997 (unaudited)........3
Notes to Condensed 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................................................9
Item 2. Changes In Securities............................................9
Item 3. Defaults Upon Senior Securities..................................9
Item 4. Submission of Matters to a Vote of Security Holders..............9
Item 5. Other Information................................................9
Item 6. Exhibits and Reports on Form 8-K.................................9
I
[HART\10Q:HRT63098]-3
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Balance Sheet
As of June 30, 1998 (Unaudited)
June 30, 1998
(Unaudited)
---------------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 287
---------------------
Total Current Assets 287
---------------------
TOTAL ASSETS $ 287
=====================
Current Liabilities:
Accounts payable and accrued expenses $ 105,486
Due to affiliates 429,717
---------------------
Total Current Liabilities 535,203
Stockholders' Deficiency:
Common stock - par value $.01; authorized 50,000,000 shares;
1,730,960 shares issued and outstanding, as of June 30, 1998 17,310
Additional paid-in capital 5,252,948
Accumulated deficit (5,805,174)
----------------------
Total Stockholders' Deficiency (534,916)
----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 287
======================
</TABLE>
See accompanying notes to these condensed financial statements
[HART\10Q:HRT63098]-3
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Statements of Operations
For the Three and Six Months Ended
June 30, 1998 and 1997 (Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------------------- ------------------ -------------------
1998 1997 1998 1997
------------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Costs and expenses:
General and administrative $ 29,582 $ 55,250 $ 65,599 $ 109,394
------------------- ------------------ ------------------ -------------------
Totals 29,582 55,250 65,599 109,394
------------------- ------------------ ------------------ -------------------
Net loss $ (29,582)$ (55,250) $ (65,599) $ (109,394)
=================== ================== ================== ====================
Net loss applicable to
common stock $ (29,582)$ (55,250) $ (65,599) $ (109,394)
=================== ================== ================== ====================
Net loss per common share $ (.017) $ (.032) $ (.038) $ (.064)
=================== ================== ================== ====================
Weighted average common
shares outstanding 1,730,960 1,730,960 1,730,960 1,730,960
=================== ================== ================== ====================
</TABLE>
See accompanying notes to these condensed financial statements
[HART\10Q:HRT63098]-3
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Statements of Cash Flows
For the Six Months Ended June 30, 1998 and 1997 (Unaudited)
Six Months Ended June 30,
1997 1996
------------------------ ---------------------
(Unaudited) (Unaudited)
------------------------ ---------------------
<S> <C> <C>
Operating activities:
Net income (loss) $ (65,599) $ (109,394)
Adjustments to reconcile net income (loss) to net
cash provided (used) in operating activities:
Increase (decrease) from changes in:
Accounts payable and accrued expenses 92,400 68,774
Due to affiliate (26,581) 40,378
------------------------ --------------------
Net cash provided (used) in operating activities 220 (242)
------------------------ ---------------------
Net increase (decrease) in cash and cash equivalents 220 (242)
------------------------ ---------------------
Cash and cash equivalents, beginning of period 67 242
------------------------ --------------------
Cash and cash equivalents, end of period $ 287 $ -
======================== ====================
</TABLE>
See accompanying notes to these condensed financial statements
[HART\10Q:HRT63098]-3
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
June 30, 1998
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, 1998 and for the three and six month periods
then ended. It is suggested that these condensed financial statements
be read in conjunction with the audited financial statements and notes
thereto included in the Company's Form 10-KSB for the year ended
December 31, 1997. The results of operations for the periods ended June
30, 1998 and 1997 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 non-electric dishwasher for a note receivable and future royalties.
During 1990, the Company began performing sludge de-watering 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.
[HART\10Q:HRT63098]-3
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
June 30, 1998
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 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 incurred recurring net losses, a working capital
deficiency, has limited liquid resources and 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 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 1997 financial statements have
been reclassified, where appropriate, to conform with the financial
statement presentation used in fiscal 1998.
Note 2. 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
its then affiliate 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.
[HART\10Q:HRT63098]-3
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
June 30, 1998
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Three Months Ended June 30, 1998 Compared to Three Months Ended
June 30, 1997
There were no operations during the three months ended June 30,
1998. As a result there were no operating revenues or cost of revenues
recorded during the three months ended June 30, 1998.
The Registrant's general and administrative expenses were $29,582
for the three months ended June 30, 1998, as compared to $64,111 for
the same period last year. The decrease is primarily attributable to
the re-negotiation of advisory and management agreements.
Six Months Ended June 30, 1998 Compared to Six Months Ended June
30, 1997
The Registrant had no operations for the six months ended June 30,
1998 or 1997.
The Registrant's total general and administrative expenses were
$65,599 for the six months ended June 30, 1998, as compared to $109,394
for the same period last year. The decrease is primarily attributable
to the re-negotiation of advisory and management agreements.
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 $287 and $67 as of June 30, 1998, and
December 31, 1997, respectively, and negative working capital of
$534,916 and $46,317 as of June 30, 1998, and December 31, 1997,
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 1998. 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.
[HART\10Q:HRT63098]-3
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
June 30, 1998
As a result of the Registrant having no revenue producing
activities, the Registrant has limited cash and cash equivalents
remaining as of June 30, 1998, to finance future operations. The
Registrant has received financial support from NuVen and is dependent
upon NuVen 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 NuVen for
the remainder of fiscal year 1998. Such conditions raise substantial
doubt about the Registrant's ability to continue as a going concern.
[HART\10Q:HRT63098]-3
7
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
June 30, 1998
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
[HART\10Q:HRT63098]-3
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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: October 27, 1998 By: /s/ Fred G. Luke
-----------------------------
Fred G. Luke,
President and Director
[HART\10Q:HRT63098]-3
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 287
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 287
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 287
<CURRENT-LIABILITIES> 535,203
<BONDS> 0
0
0
<COMMON> 17,310
<OTHER-SE> (552,226)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 29,582
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (29,582)
<INCOME-TAX> 0
<INCOME-CONTINUING> (29,582)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29,582)
<EPS-PRIMARY> (.017)
<EPS-DILUTED> 0
</TABLE>
