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 September 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 September 30, 1998, there were 1,730,960 shares of the
Registrant's $.01 par value common stock issued and outstanding.
[HART\10Q:HRT93098]-3
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HART INDUSTRIES, INC.
INDEX
Page
PART I
Item 1. Financial Statements
Condensed Balance Sheet - September 30, 1998 (unaudited) ........1
Condensed Statements of Operations - Three and Nine Months Ended
September 30, 1998 and 1997 (unaudited)........................2
Condensed Statements of Cash Flows - Nine Months Ended
September 30, 1998 (unaudited) and September 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:HRT93098]-3
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Balance Sheet
As of September 30, 1998 (Unaudited)
September 30,
1998
(Unaudited)
------------------------
<S> <C>
ASSETS
Current Assets:
Cash $ 242
------------------------
Total Current Assets 242
------------------------
TOTAL ASSETS $ 242
========================
Current Liabilities:
Accounts payable and accrued expenses $ 98,970
Due to affiliates 465,444
------------------------
Total Current Liabilities 564,414
Stockholders' Deficiency:
Common stock - par value $.01; authorized 50,000,000 shares;
1,730,960 shares issued and outstanding 17,310
Additional paid-in capital 5,252,948
Accumulated deficit (5,834,430)
------------------------
Total Stockholders' Deficiency (564,172)
------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 242
========================
</TABLE>
See accompanying notes to these condensed financial statements
[HART\10Q:HRT93098]-3
1
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Statements of Operations
For the Three and Nine Months Ended
September 30, 1998 and 1997 (Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------------------- ---------------------------------------
1998 1997 1998 1997
------------------- ------------------ ------------------ -------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------------- ------------------ ------------------ -------------------
<S> <C> <C> <C> <C>
Costs and expenses: $ $ $ $
General and administrative 30,812 31,014 96,411 180,143
------------------- --------------------- ------------------ -------------------
Totals 30,812 31,014 96,411 180,143
------------------- ------------------ ------------------ -------------------
Net loss $ (30,812)$ (31,014) $ (96,411) $ (180,143)
=================== ================== ================== ===================
Net loss per common share $ (.018) $ (.018) $ (.056) $ (.104)
=================== ================== ================== ===================
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:HRT93098]-3
2
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<TABLE>
<CAPTION>
HART INDUSTRIES, INC.
Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 1998 and 1997 (Unaudited)
Nine Months Ended September 30,
1998 1997
------------------------ ---------------------
(Unaudited) (Unaudited)
------------------------ ---------------------
<S> <C> <C>
Operating activities:
Net income (loss) $ (96,411) $ (140,408)
Adjustments to reconcile net income (loss) to net
cash provided (used) in operating activities:
Increase (decrease) from changes in:
Accounts payable and accrued expenses 85,884 70,916
Due to affiliate 10,702 69,593
------------------------ ---------------------
Net cash provided (used) in operating activities 175 101
------------------------ ---------------------
Net increase (decrease) in cash and cash equivalents 175 101
Cash and cash equivalents, beginning of period 67 242
------------------------ ---------------------
Cash and cash equivalents, end of period $ 242 $ 343
======================== =====================
</TABLE>
See accompanying notes to these condensed financial statements
[HART\10Q:HRT93098]-3
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HART INDUSTRIES, INC.
Notes to Condensed Financial Statements
September 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 September 30, 1998 and for
the three and nine 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 10KSB for the year ended December 31, 1997. The
results of operations for the periods ended September 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:HRT93098]-3
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HART INDUSTRIES, INC.
Notes to Financial Statements
September 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, has limited liquid
resources, a working capital deficiency 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:HRT93098]-3
5
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Three Months Ended September 30, 1998 Compared to Three Months
Ended September 30, 1997
There were no operations during the three months ended
September 30, 1998. As a result there were no operating revenues
or cost of revenues recorded during the three months ended
September 30, 1998.
The Registrant's general and administrative expenses were
$30,182 for the three months ended September 30, 1998, as compared
to $31,014for the same period last year. General and
administrative expensed consisted primarily of continued
professional services provided by consultants under professional
advisory and management agreements.
Nine Months Ended September 30, 1998 Compared to Nine Months
Ended September 30, 1997
The Registrant had no operations for the nine months ended
September 30, 1998 or 1997. As a result, there were no operating
revenues or cost of revenues recorded during the nine months ended
September 30, 1998.
The Registrant's total general and administrative expenses
were $96,411 for the nine months ended September 30, 1998, as
compared to $180,143 for the same period last year. The decrease
is primarily attributable to fewer professional services provided
by consultants under professional 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 $242 and $67 as of September 30,
1998, and December 31, 1997, respectively, and negative working
capital of $564,202 and $469,317 as of September 30, 1998, and
December 31, 1997, respectively. The increase in working capital
deficiency is a direct result of the Registrant incurring
continued professional, consulting and advisory services and other
overhead during the first nine 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.
As a result of the Registrant having no revenue producing
activities, the Registrant has limited cash and cash equivalents
remaining as of September 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:HRT93098]-3
6
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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:HRT93098]-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: November 6, 1998 By: /s/ Fred G. Luke
----------------------------------
Fred G. Luke,
President and Director
[HART\10Q:HRT93098]-3
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 242
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 242
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 242
<CURRENT-LIABILITIES> 564,414
<BONDS> 0
0
0
<COMMON> 17,310
<OTHER-SE> (581,482)
<TOTAL-LIABILITY-AND-EQUITY> 242
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 30,812
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (30,812)
<INCOME-TAX> 0
<INCOME-CONTINUING> (30,812)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30,812)
<EPS-PRIMARY> (.018)
<EPS-DILUTED> (.018)
</TABLE>
