Enable Holdings, Inc. - Quarterly Report (10-Q)

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PART I	Financial Information
	Item 1.	Consolidated Condensed Financial Statements (Unaudited)
		Consolidated Condensed Balance Sheets (Unaudited) June 30, 2008 and December 31, 2007	3
		Consolidated Condensed Statements of Operations (Unaudited) Three months and Six months ended June 30, 2008 and 2007	4
		Consolidated Condensed Statement of Shareholders' Equity (Unaudited) Six months ended June 30, 2008	5
		Consolidated Condensed Statements of Cash Flows (Unaudited) Six months ended June 30, 2008 and 2007	6
		Notes to Consolidated Condensed Financial Statements	7-14
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-25
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
	Item 4.	Controls and Procedures	25

PART II	Other Information
	Item 1.	Legal Proceedings	25
	Item 1A.	Risk Factors	25
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	Item 3.	Default Upon Senior Securities	26
	Item 4.	Submission of Matters to a Vote of Security Holders	26
	Item 5.	Other Information	26

	Signatures		27-32

Enable Holdings, Inc. and Subsidiaries

Consolidated Condensed Balance Sheets

(Dollars in Thousands, except par value data)

(Unaudited)

	June 30, 2008			December 31, 2007
Assets

Current Assets
Cash and cash equivalents	$	4,800		$	7,724
Restricted investments		212			212
Accounts receivable, less allowance for doubtful accounts of $467 and $215, respectively		1,284			648
Merchandise inventories, less reserve for obsolesence of $837 and $409, respectively		5,736			5,156
Prepaid expenses and other current assets		841			759

Total Current Assets		12,873			14,499

Property and Equipment, net		997			725
Purchased Intangible Assets, net		203			107

Total Assets	$	14,073		$	15,331

Liabilities and Shareholders' Equity

Current Liabilities
Due on credit line	$	3,911		$	-
Accounts payable		2,626			2,766
Accrued expenses:
Advertising		236			205
Other		1,236			1,194
Flooring facility		116			314

Total Current Liabilities	$	8,125		$	4,479

Shareholders' Equity
Common stock, $.001 par value (200,000,000 shares authorized as of June 30, 2008 and December 31, 2007; 18,446,116 and 18,197,783 shares issued and outstanding, respectively as of June 30, 2008 and December 31, 2007)	$	20		$	20
Treasury stock, 2,135,550 shares of common stock and 580,937 warrants at cost		(2,242	)		(2,242	)
Stock warrants		8,274			8,086
Additional paid-in-capital		37,518			37,248
Accumulated deficit		(37,622	)		(32,260	)

Total Shareholders' Equity	$	5,948		$	10,852

Total Liabilities and Shareholders' Equity	$	14,073		$	15,331

The accompanying notes are an integral part of these consolidated condensed financial statements.

Enable Holdings, Inc. and Subsidiaries

Consolidated Condensed Statements of Operations

(Dollars in Thousands, except for per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net Revenues	$	8,426		$	13,663		$	15,567		$	23,270
Cost of Revenues		7,112			10,794			12,381			17,849

Gross Profit		1,314			2,869			3,186			5,421

Operating Expenses
General and administrative		3,418			3,326			7,171			6,348
Sales and marketing		799			1,131			1,294			2,200
Total operating expenses		4,217			4,457			8,465			8,548

Loss From Operations		(2,903	)		(1,588	)		(5,279	)		(3,127	)
Interest Expense		(95	)		(98	)		(158	)		(210	)
Interest Income		21			149			75			324
Other Income, net		-			-			-			60

Net Loss	$	(2,977	)	$	(1,537	)	$	(5,362	)	$	(2,953	)

Net Loss per share - Basic and Diluted	$	(0.16	)	$	(0.08	)	$	(0.29	)	$	(0.15	)
Weighted Average Shares - Basic and Diluted		18,325,786			18,761,005			18,310,951			19,542,826

The accompanying notes are an integral part of these consolidated condensed financial statements.

Enable Holdings, Inc. and Subsidiaries

Consolidated Statements of Shareholders' Equity

(Dollars in Thousands)

	Common Stock				Stock		Paid-in			Treasury Stock					Accumulated
	Shares		Dollars		Warrants		Capital			Shares		Dollars			Deficit			Total

Balance, December 31, 2007		18,197,783	$	20	$	8,086	$	37,248			2,135,550	$	(2,242	)	$	(32,260	)	$	10,852
Stock compensation expense		—		—		—		109			—		—			—			109
Net Loss		—		—		—		—			—		—			(2,385	)		(2,385	)
Balance, March 31, 2008		18,197,783	$	20	$	8,086	$	37,357			2,135,550	$	(2,242	)	$	(34,645	)	$	8,576
Stock compensation expense		—		—		—		114			—		—			—			114
Warrants issued for services		—		—		188		(156	)		—		—			—			32
Common stock issuance		150,000		—		—		203			—		—			—			203
Net Loss		—		—		—		—			—		—			(2,977	)		(2,977	)
Balance, June 30, 2008		18,347,783	$	20	$	8,274	$	37,518			2,135,550	$	(2,242	)	$	(37,622	)	$	5,948

The accompanying notes are an integral part of these consolidated financial statements.

Enable Holdings, Inc. and Subsidiaries

Consolidated Condensed Statements of Cash Flows

(Dollars in Thousands)

(Unaudited)

	Six Months Ended June 30,
	2008			2007
Cash Flows From Operating Activities
Net loss	$	(5,362	)	$	(2,953	)
Adjustments to reconcile net loss to net cash used in Operating activities
Depreciation and amortization		309			409
Non-cash stock compensation expense		223			365
Warrants issued for services		32			-
Changes in assets and liabilities:
Accounts receivable		(636	)		(304	)
Merchandise inventories		(580	)		(249	)
Prepaid expenses and other current assets		(83	)		152
Accounts payable		(140	)		146
Accrued expenses		73			(479	)

Net cash used in operating activities		(6,164	)		(2,913	)

Cash Flows From Investing Activities
Capital expenditures		(473	)		(100	)
Change in restricted investments		-			(2	)

Net cash used in investing activities		(473	)		(102	)

Cash Flows From financing Activities
Change in flooring facility		(198	)		827
Credit line borrowings		3,911			-
Common stock and warrant repurchase		-			(2,242	)

Net cash provided by (used in) financing activities		3,713			(1,415	)

Net Decrease in Cash and Cash Equivalents		(2,924	)		(4,430	)

Cash and Cash Equivalents, beginning of period		7,724			14,785

Cash and Cash Equivalents, end of period	$	4,800		$	10,355

Supplemented Cash Flow Disclosure
Cash paid for interest	$	97		$	95
Non-cash Investing Activity - Shares issued for domain name acquisition		203			-

The accompanying notes are an integral part of these consolidated condensed financial statements.

1. Basis of Presentation

Enable Holdings, Inc. and subsidiaries (the “Company”) has operated a leading online business to consumer and business to business auction marketplace that enables itself, certified merchants, manufacturers, retailers, distributors and small businesses to offer high quality excess, new, overstock, close-out, refurbished and limited supply brand name merchandise to the consumer and business customers primarily located in the United States. Through the Company’s website, located at www.ubid.com , the Company offers merchandise across a wide range of product categories including, but not limited to, computer products, consumer electronics, apparel, housewares, watches, jewelry, travel, sporting goods, home improvement products and collectibles. The Company’s marketplace employs a combination of auction style and fixed price formats.

In the first quarter of 2008, the Company began transforming its business model to an asset recovery solution. Asset recovery is a rapidly growing industry with revenues of $38.5 billion in 2004 and is expected to climb to over $63.1 billion in 2008, according to D.F. Blumberg Associates Inc., a logistics research and consulting firm.

For manufacturers and retailers, the Company offers excess inventory asset recovery solutions. For consumers, the Company is a connection to excess name brand inventory. The Company has identified seven proprietary inventory selling solutions. These solutions are structured as separate operating divisions and include:

uBid.com – The Company’s historical auction site which has operated for ten years. This division will focus solely on auction format rather than the current auction and fixed price format.

RedTag.com – A fixed price internet site that is currently under development with an expected launch date in the third quarter of 2008.

RedTag Live – An inventory liquidation company dedicated to physical location sales. RedTag Live was launched in the beginning of the third quarter of 2008.

Dibu Trading Co. – A wholesale inventory liquidation company dedicated to Business-to-Business solutions. This division was formed in the fourth quarter of 2007 and dedicated staff was hired in the first quarter of 2008.

Commerce Innovations – A software service company which licenses auction software to third party companies. The Company is currently developing this hosted solution which is expected to launch in the middle of the third quarter of 2008.

The Company’s unaudited consolidated condensed financial statements reflect normal recurring adjustments that are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with that of the prior audited consolidated financial statements. As permitted by rules and regulations of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, the Company has condensed or omitted certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Results for interim periods are not necessarily indicative of the results that may be expected for a full year. These interim financial statements should be read along with the audited consolidated financial statements included in our Form 10-K for the year ended December 31, 2007. The consolidated condensed financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s Consolidated Condensed Financial Statements and accompanying notes. Actual results could differ materially from those estimates.

2. Summary of Significant Accounting Policies

Since December 31, 2007, none of the critical accounting policies, or the Company’s application thereof, as more fully described in the Company’s 2007 Annual Report, has significantly changed. Certain critical accounting policies have been presented below due to the significance of related transactions during the six months ended June 30, 2008.

Revenue Recognition

The Company sells merchandise under two types of arrangements: direct purchase sales and revenue sharing arrangements.

For direct purchase sales to consumer and business customers, the Company is responsible for conducting the auction or listing the fixed sale price for merchandise owned by the Company, billing the customer, shipping the merchandise to the customer, processing merchandise returns and collecting accounts receivable. In accordance with the provisions of Staff Accounting Bulletin 104, the Company recognizes revenue when the following revenue recognition criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped (FOB Shipping Point) and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured.

For sales of merchandise under revenue-sharing agreements, the Company is responsible for conducting the auction for merchandise owned by third parties, billing the customer, arranging for a third party to complete delivery to the customer, processing merchandise returns and collecting accounts receivable. The Company bears no physical inventory loss or return risk related to these sales. The Company records commission revenue at the time of shipment.

Shipping and Handling Costs

Shipping costs that are billable to the customer are included in revenue and all shipping costs that are payable to vendors are included in the cost of revenues in the accompanying consolidated statements of operations. Handling costs consisting primarily of the third party logistics warehouse costs are included in general and administrative expenses and for the quarters ended June 30, 2008 and 2007, were $153 and $126, respectively.

Stock Based Compensation

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R) (“SFAS 123R”). This pronouncement requires companies to measure the cost of employee service received in exchange for a share based award (typically stock options) based on the fair value of the award. The Company has elected to use the “modified prospective” transition method for stock options granted prior to January 1, 2006, but for which the vesting period is not complete. Under this transition method, the Company accounts for such awards on a prospective basis, with expense being recognized in its statement of operations beginning in the first quarter of 2006 and continuing over the remaining requisite service period based on the grant date fair value estimated in accordance with Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (“SFAS 123”). The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award which is generally the option vesting term of four years. The total compensation expense related to the stock option plan for the six months ended June 30, 2008 and 2007 was approximately $223 and $365, respectively.

On February 19, 2008 the Company offered eligible employees the opportunity to exchange on a grant by grant basis, their outstanding eligible options for restricted stock rights.

Options eligible for the exchange in this offer were granted under the Company’s 2005 Equity Incentive Plan (the “2005 Equity Incentive Plan”) in 2005 and 2006 and had an exercise price per share greater than $2.00. Individuals that held 500 or fewer eligible options were cashed out.

The number of restricted stock rights granted in exchange for each eligible option surrendered was based upon an exchange ratio of 3 to 1. The 3 to 1 exchange ratio was determined based on the fair value of the eligible options which approximated the share price at a 3 to 1 conversion rate. The incremental stock compensation expense resulting from the offer is $109 to be amortized over the remaining life of the original options granted of approximately 2.5 years.

Pursuant to the offer, 16,000 options were canceled and cashed out by individuals who had 500 or fewer options. There were an additional 20 individuals that tendered 765,000 options for an aggregate of 255,000 restricted stock rights.

At June 30, 2008 and 2007 the Company had options to purchase 1,693,500 and 1,762,200 shares, respectively, of common stock outstanding to certain officers and other employees.

At June 30, 2008 the Company had restricted stock rights outstanding of 253,333, of which 98,333 are vested. There were no restricted stock rights outstanding at June 30, 2007.

On March 25, 2008, the Company issued warrants to purchase 90,000 shares of its common stock to an unrelated investor relations company. The warrants are exercisable for 10 years at the exercise price of $0.55, $1.20 and $4.50, for each tranche of 30,000 warrants, respectively. These warrants were issued for services to be provided over a period of time, as indicated in the agreement and the Company expensed the entire fair value of these warrants ($32) during the quarter ended June 30, 2008. The fair value was determined in accordance with the Black-Scholes model using an expected volatility of 68%, risk free interest rate of 5% and the warrants expiration of approximately 10 years from the date of issuance.

The compensation costs charged against income was $114 and $127 for the three months ended June 30, 2008 and 2007, respectively. Compensation costs are included in general and administrative expenses in the consolidated Condensed Statement of Operations.

Intangibles

On June 13, 2008, the Company agreed with the Petters Group Worldwide, LLC, a holder of greater than 5% of our voting common stock, for the purchase of an internet domain name or Universal Resource Locator or URL, www.redtag.com , in exchange for 150,000 shares of our common stock. The URL has an indefinite useful life and thus in accordance with the Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”), the intangible asset need not be amortized. Each reporting period, the Company will evaluate the useful life of the intangible asset to determine whether events and circumstances continue to support an indefinite useful life, and record impairment if needed.

3. Net Loss Per Share (“EPS”)

The Company computes loss per share under Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share.” The statement requires presentation of two amounts: basic and diluted loss per share. Basic loss per share is computed by dividing the loss available to common shareholders by the weighted average common shares outstanding. Dilutive earnings per share would include all common stock equivalents unless anti-dilutive.

Due to losses in each period presented, the Company has not included the following common stock equivalents in its computation of diluted loss per share as their input would have been anti-dilutive.

June 30,	2008		2007
Shares subject to stock warrants		3,412,398		3,232,939
Shares subject to stock options		1,693,500		1,762,200
		5,105,898		4,995,139

4. Merger and Private Offerings

On December 29, 2005 (the “Closing Date”), Cape Coastal Trading Corporation (or “Cape Coastal”), uBid Acquisition Co., Inc. (“Acquisition Sub”) and uBid, Inc. entered into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”). Under the Merger Agreement, Acquisition Sub merged with and into uBid, Inc., with uBid, Inc. remaining as the surviving corporation and a 100% owned subsidiary of Cape Coastal Trading Corporation. Just prior to the Closing Date, all outstanding convertible preferred shares and warrants to acquire shares of uBid, Inc. before the merger were converted and exercised such that, just prior to the merger, 3,793 shares of common stock were outstanding which were exchanged on a 2,320 to 1 basis on the closing date into 8,800,000 shares of common stock of Cape Coastal, with up to 444,444 shares of such common stock subject to redemption at a redemption price of $4.50. The stockholders of Cape Coastal before the merger retained 599,331 shares of common stock of Cape Coastal after the merger. Before the merger, Cape Coastal was a public shell company. Concurrent with the merger, the Company amended its Certificate of Incorporation to change its name from Cape Coastal Trading Corporation to “uBid.com Holdings, Inc.”

The merger was treated as a recapitalization of uBid, Inc. for financial accounting purposes. Accordingly, the historical financial statements of Cape Coastal before the merger were replaced with the historical financial statements of uBid, Inc. before the merger. All share and per share data has been retroactively restated to reflect the implicit conversion ratio related to the exchange of shares in the merger.

Concurrent with the merger, the Company completed the first part of a private offering to accredited investors. The Company sold 10,000,003 shares of its common stock (of which 2,222,224 shares were subject to redemption) and warrants to purchase 2,500,003 shares of its common stock at $5.85 for a period of 5 years (the shares and warrants are collectively referred to as “Units”), for aggregate consideration of approximately $45.0 million. These warrants were valued at $2.08 per warrant for an aggregate of $5.2 million using a Black-Scholes option-pricing model using a 5 year expected life, a risk free interest rate of 5.0%, no expected dividends and 68.0% volatility. Some of the investors participating in the first part of the private offering held notes that were issued by uBid before the merger, including $10.5 million of debt held by the Petters Group, a holder greater than 5% of our voting common stock, (“Petters Group”) and $5.0 million of debt held by the bridge loan holders. Rather than accepting cash consideration for the Units acquired by these investors, the Company agreed to issue Units at a rate of one Unit for each $4.50 of debt for consideration of the note holders’ cancellation of the existing notes. Therefore, the consideration the Company received on the Closing Date consisted of approximately $29.5 million in cash and $15.5 million in cancelled debt. In addition, on the Closing Date, the Company issued warrants to purchase 333,333 shares of our common stock to the bridge note holders as a financing fee, which warrants are exercisable for three years at an exercise price of $4.50 and the value of which, $0.6 million, was recorded as interest expense. The Company also issued warrants to purchase 230,000 shares of its common stock to its placement agents in the offering, which warrants are exercisable for five years at an exercise price of $4.50 and the value of which, $0.5 million, was recorded as a cost of the equity issuance. These warrants were valued at $1.80 and $2.27 respectively per warrant for an aggregate of $1.1 million using a Black-Scholes option-pricing model using the warrants respective life, a risk free interest rate of 5.0%, no expected dividends and 68.0% volatility. Issuance costs, including the value of the warrants, were $4.7 million.

On February 3, 2006, the Company completed the second part of the private offering of Units to accredited investors. In this offering, the Company sold 3,000,000 shares of its common stock and warrants to purchase 750,002 shares of its common stock on the same terms as described above for an aggregate of $13.5 million. The Company also redeemed the 2,666,668 shares of common stock issued in connection with the merger and the first private offering that were subject to redemption at a price of $4.50 per share and issued 600,667 shares of common stock (valued at $4.50 per share) to Cape Coastal and uBid’s financial advisor, Calico Capital Group. In addition, the Company issued additional warrants to purchase 90,000 shares of its common stock to its placement agents on the same terms as described above. The second part of the private offering resulted in no net cash proceeds being retained by the Company. Issuance costs, including the value of the warrants and the shares issued to Calico Capital Group, were $4.4 million.

On April 25, 2007, the Company entered into a stock repurchase agreement with a group of private investors under common management to repurchase 2,135,550 shares of the Company’s common stock and warrants to purchase 580,937 shares of the Company’s common stock held by such private investors at a combined price of $1.05 for the company stock and for the warrants for an aggregate purchase price of $2,242,000. These shares and warrants repurchased in this privately negotiated transaction were originally acquired by the private investors in the Company’s private placement that initially closed on December 29, 2005. The repurchase represented 11% of the common stock and warrants outstanding.

5. 2005 Equity Incentive Plan

The 2005 Equity Incentive Plan is an equity-based compensation plan to provide incentives to, and to attract, motivate and retain the highest qualified employees, directors, consultants and other third party service providers. The 2005 Equity Incentive Plan enables the board to provide equity-based incentives through grants or awards of stock options and restricted stock (collectively, “Incentive Awards”) to present and future employees, consultants, directors, and other third party service providers.

A total of 2,500,000 shares of common stock have been reserved for issuance under the 2005 Equity Incentive Plan. If an Incentive Award granted pursuant to the 2005 Equity Incentive Plan expires, terminates, expires and is unexercised or is forfeited, or if any shares are surrendered to the Company in connection with an Incentive Award, the shares subject to such award and the surrendered shares will become available for future awards under the 2005 Equity Incentive Plan. Options generally vest over a period of four years and have a ten year contractual life.

On February 19, 2008 the Company offered eligible employees the opportunity to exchange on a grant by grant basis, their outstanding eligible options for restricted stock rights.

Options eligible for the exchange in this offer were granted under the Company’s 2005 Equity Incentive Plan that were granted in 2005 and 2006 and had an exercise price per share that is greater than $2.00. Individuals that held 500 or fewer eligible options were cashed out.

The number of restricted stock rights to be granted in exchange for each eligible option surrendered was based upon an exchange ratio of 3 to 1. The 3 to 1 exchange ratio was determined because at the origination of the offer the fair value of the eligible options approximated the share price at a 3 to 1 conversion rate. The incremental stock compensation expense resulting from the offer is $109 to be amortized over the remaining life of the original options granted.

At June 30, 2008 the Company had restricted stock rights outstanding of 253,333, due to the forfeiture of 1,667 unvested stock rights during the quarter ended June 30, 2008. There were no restricted stock rights outstanding at June 30, 2007.

	Restricted Stock Rights
Outstanding at 3/31/2008		255,000
Granted		-
Exercised		-
Forfeited		1,667
Outstanding at 6/30/2008		253,333

Vested and Exercisable at 6/30/2008		98,333

At June 30, 2008 and 2007 the Company had options to purchase 1,693,500 and 1,762,200 shares, respectively, of common stock outstanding to certain officers and other employees.

None of the Incentive Awards granted under the 2005 Equity Incentive Plan were issued for cash consideration collected from the participants. The Incentive Awards were granted to participants in the 2005 Equity Incentive Plan on the basis of services to be provided to the Company by the participants.

The fair value of the options awarded for the six months ended June 30, 2008 and 2007, were estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three months ended						Six months ended
	June 30,						June 30,
	2008			2007			2008			2007
Risk -free interest rate		5.0	%		5.0	%		5.0	%		5.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Expected volatility		68.0	%		68.0	%		68.0	%		68.0	%
Expected life (years)		6.0			6.0			6.0			6.0
Weighted average grant date fair value	$	0.56		$	0.85		$	0.51		$	0.92
Estimated forfeiture rate		5	%		5	%		5	%		5	%

The risk-free interest rate is based on the U.S. Treasury Bill rates. The dividend reflects the fact that the Company has never paid a dividend on its common stock and does not expect to in the future. Expected volatility was based on a market-based implied volatility. The expected term of the options is based on what the Company believes will be representative of future behavior. In addition, the Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. If the Company’s actual forfeiture rate is materially different from its estimate, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

The following is a summary of all of the Company’s stock option activity:

				Weighted-average
	Shares under			exercise price per
	option			share
Outstanding at December 31, 2007		1,984,100		$	2.68
Granted		214,000			0.74
Exercised		0.00			0.00
Surrendered		(31,100	)		4.38
Converted		(765,000	)		4.60
Outstanding at March 31, 2008		1,402,000		$	1.30
Granted		296,500			0.92
Excercised		0.00			0.00
Surrendered		(5,000	)		6.74
Outstanding at June 30, 2008		1,693,500		$	1.22

Exercisable at June 30, 2008		131,625		$	1.90

As of June 30, 2008 there was $1,898 of total unrecognized compensation cost related to the non-vested option awards and restricted stock under the 2005 Equity Incentive Plan. That cost is expected to be recognized over the 3.2 year remaining vesting period of the non-vested option awards. The total fair value of the option awards and restricted stock that were vested during the three months ended June 30, 2008 and 2007 was $145 and $224, respectively.

The following table summarizes information about stock options at June 30, 2008:

	Outstanding						Exercisable
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
Exercise	Outstanding at		Contractual		Exercise		Exercisable at		Exercise
Price	June 30, 2008		Life		Price		June 30, 2008		Price
.01 - 2.00		1,619,500		9.3	$	1.13		101,875	$	1.46
2.01 - 4.00		62,000		8.4	$	3.02		21,750	$	2.98
4.01 - 6.00		11,000		7.5	$	4.50		7,500	$	4.50
6.01+		1,000		7.5	$	6.15		500	$	6.15
		1,693,500			$	1.22		131,625	$	1.90

The aggregate intrinsic value of the outstanding options (the difference between the closing stock price on the last trading day of the period ended June 30, 2008 of $1.87 per share and the exercise price, multiplied by the number of in-the-money options) was $1,204. This amount will change based on changes in the fair market value of the Company’s common stock.

6. Note Payable – Bank

On May 9, 2006, the Company and its subsidiaries entered into a Credit and Security Agreement with Wells Fargo Bank, National Association acting through Wells Fargo Business Credit and related security agreements and other agreements described in the Credit and Security Agreement (the “Credit Agreement”). The Credit Agreement provides for advances to the Company of up to a maximum of $25.0 million. The amount actually available to the Company will vary from time to time, depending on, among other factors, the amount of eligible inventory and the amount of eligible accounts receivable. The obligations under the Credit Agreement and all related agreements are secured by all of the Company assets. The initial term of the Agreement is three years, expiring on April 28, 2009. Up to $7.0 million of the maximum amount is available for irrevocable, standby and documentary letters of credit. Advances under the Credit Agreement bear interest at a base rate (Wells Fargo Bank's prime rate) or LIBOR plus 2.5%. The Credit Agreement requires a prepayment fee of $125,000 if the Company terminates the Credit Agreement during the third year. The Credit Agreement requires the Company, among other things, to limit capital expenditures and maintain minimum availability on the line. Also, the Company is obligated contractually by a restrictive lock box arrangement. The Credit Agreement also requires the Company to pay a variety of other fees and expenses, including minimum annual interest of $120,000. The Company, as of June 30, 2008, had $35,000 in deferred financing fees being amortized over the life of the Credit Agreement. As of June 30, 2008, the effective loan rate was 8.25% and the Company had an outstanding balance of $3,911,000.

On July 25, 2008, Wells Fargo Bank notified the Company of the Company’s failure to meet the minimum excess availability requirement of $3.5 million. Since the Company did not meet the minimum excess availability requirement as stated in the agreement, the financial covenants went into effect which required that we demonstrate net earnings at the levels stated in the agreement. Due to the recent restructuring, the Company was unable to meet the covenants. Wells Fargo Bank has not elected to accelerate or call the loan at this point, but has put into effect the default interest rate of 11.25% on the outstanding balance of the loan.

In response to the notification of violation from Wells Fargo, the Company is currently evaluating several options; including, but not limited to, the payment of a waiver fee of $100,000 to Wells Fargo Bank along with resetting the covenants, complete the sale of 2.1 million shares of common stock held in treasury in a private offering, draw upon the Fusion Capital Equity Line or refinance the Wells Fargo credit facility with alternative lenders.

7. Segment Information

The Company is currently organized into four operating segments but is changing its business model as previously discussed in Note 1 (Basis of Presentation): Direct sales channel, uBid Certified Merchant (“UCM”) sales channel, Business to Business sales channel and Other. In classifying its operational entities into a particular segment, the Company segregated its operations with similar economic characteristics, products and services, customers and methods of distribution into distinct operating groups. Prior to March 31, 2007, all operating segments were aggregated into one reportable segment. The Company’s management reviews the four operating segments revenue and gross profits to evaluate segment performance and allocate resources. Operating expenses are not analyzed by segment.

For the Direct sales channel, the Company is responsible for conducting the auction or listing the fixed sale price for merchandise owned by the Company, billing the customer, shipping the merchandise to the customer, processing merchandise returns and collecting accounts receivable.

For the UCM sales channel, the Company is responsible for conducting the auction for merchandise owned by third parties, billing the customer, arranging for a third party to complete delivery to the customer, processing merchandise returns and collecting accounts receivable. The Company bears no physical inventory loss or return risk related to these sales. The Company records commission revenue at the time of shipment.

For the Business to Business sales channel, the Company sells product purchased directly to other businesses. Revenues are recognized upon shipment.

All other revenues consist primarily of advertising revenue. Advertising revenues are derived principally from the sale of online advertisements. Advertising revenues on contracts are recognized as “impressions” (i.e., the number of times that an advertisement appears in pages viewed by users of our websites). Impressions are delivered over the term of the agreement where such agreements provide for minimum monthly, quarterly or annual advertising commitments.

	(Dollars in Thousands)
	Three months Ended June 30,						Six months Ended June 30,
	2008			2007			2008			2007
Net Revenue
Direct	$	4,671		$	9,002		$	8,166		$	16,770
UCM		1,182			1,341			2,460			2,797
Business to Business		2,537			3,035			4,750			3,096
Other		36			285			191			607
Total	$	8,426		$	13,663		$	15,567		$	23,270

Gross Profit
Direct	$	(190	)	$	873		$	(138	)	$	1,633
UCM		1,182			1,341			2,460			2,797
Business to Business		286			370			673			384
Other		36			285			191			607
Total	$	1,314		$	2,869		$	3,186		$	5,421

Gross Profit %
Direct		-4.1	%		9.7	%		-1.7	%		9.7	%
UCM		100.0	%		100.0	%		100.0	%		100.0	%
Business to Business		11.3	%		12.2	%		14.2	%		12.4	%
Other		100.0	%		100.0	%		100.0	%		100.0	%
Total		15.6	%		21.0	%		20.5	%		23.3	%

8. Subsequent Events

On July 15, 2008 the Company signed a $10.0 million common stock purchase agreement with Fusion Capital Fund II, LLC, an Illinois limited liability company (“Fusion Capital”). Concurrently with entering into the common stock purchase agreement, the Company entered into a registration rights agreement with Fusion Capital. Under the registration rights agreement, the Company agreed to file a registration statement related to the transaction with the U.S. Securities and Exchange Commission (“SEC”) covering the shares that have been issued or may be issued to Fusion Capital under the common stock purchase agreement. After the SEC has declared effective the registration statement related to the transaction, the Company has the right over a 24-month period to sell shares of common stock to Fusion Capital from time to time in amounts between $60,000 to $1.0 million, depending on certain conditions set forth in the agreement, up to an aggregate of $10.0 million.

In consideration for entering into the agreement, upon execution of the common stock purchase agreement the Company issued to Fusion Capital 230,074 shares of the Company’s common stock as a commitment fee. Also, the Company will issue to Fusion Capital an additional 230,074 shares as a commitment fee pro rata as the Company receives the $10.0 million of future funding. The purchase price of the shares related to the $10.0 million of future funding will be based on the prevailing market prices of the Company’s common stock at the time of sales without any fixed discount, and the Company will control the timing and amount of any sales of shares to Fusion Capital. Fusion Capital shall not have the right or the obligation to purchase any shares of the Company’s common stock on any business day that the price of the Company’s common stock is below $0.75 per share. The common stock purchase agreement may be terminated by the Company at any time at the Company’s discretion without any cost to the Company. There are no negative covenants, restrictions on future funding, penalties or liquidated damages in the agreement. The proceeds received by the Company under the common stock purchase agreement will be used to provide working capital to further implement the Company’s recently announced strategic change to focus on liquidating excess inventories.

The Company issued the initial 230,074 shares at the agreed upon price of $1.52 per share, determined based on the 20-day moving average as of the date the agreement was accepted. The Company will record the transaction in the quarter ended September 30, 2008.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated condensed financial statements and related notes included in Item 1 of Part 1 of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Enable Holdings, Inc. is a holding company for uBid, Inc., Dibu Trading Corp., RedTag, Inc., RedTag Live, Inc., Enable Payment Systems, Inc. and uSaas, Inc., our operating businesses. For purposes of this Quarterly Report, unless otherwise indicated or the context otherwise requires, all references herein to “Enable,” “we,” “us,” and “our” refer to Enable Holdings, Inc. and our subsidiaries.

Information in the following Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this quarterly report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements provide current expectations or forecasts of future events and can be identified by the use of terminology such as “believe,” “estimate,” “expect,” “intend,” “may,” “could,” “will,” and similar words or expressions. Any statement that is not a historical fact, including statements regarding estimates, projections, future trends and the outcome of events that have not yet occurred, is a forward-looking statement. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including but not limited to the risk factors detailed in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2007. We assume no obligation to update such forward-looking statements or to update the reasons actual results could differ materially from those anticipated in such forward-looking statements.

Overview

We operate a leading online marketplace located at www.ubid.com offering high quality excess, new, overstock, close-out, refurbished and limited supply brand name merchandise to both consumers and businesses using auction style and fixed price formats. We offer consumers a trustworthy buying environment in which we continually monitor and certify activity to eliminate the potential for fraud by certifying all merchants and processing 100% of all transactions between buyers and sellers. Our marketplace offers brand-name merchandise from over 200 product categories including computer products, consumer electronics, apparel, house wares, watches, jewelry, travel, sporting goods, home improvement products and collectibles.

Our current business model provides value for consumers, manufacturers, distributors, retailers and other approved third party merchants. Consumers shop in a trustworthy and secure online marketplace and have the opportunity to bid their own prices on popular, brand-name products realizing product savings of generally 20% to 80% off retail prices. Our online marketplace provides merchants with an efficient and economical distribution channel for maximizing revenue on their merchandise. Merchants can monetize overstock and close-out inventory, expand their customer base and increase sales without compromising existing distribution channels.

Our business model currently consists of four distinct business channels: uBid Direct, UCM, Business to Business and Other.

We purchase merchandise outright in the uBid Direct and Business to Business channels and sell to consumers and businesses. On this merchandise, we bear the inventory, return and credit risk. The full sales amount is recorded as revenue upon verification of the credit card transaction and shipment of the merchandise.

We also sell merchandise through the UCM Program channel by allowing prescreened third party merchants to sell their product through our online marketplace to consumers and business. On this merchandise, we do not take title and therefore do not bear the related inventory risk. In the UCM Program, we are the primary obligor to whom payment is due, but we bear no inventory or returns risk, so we record only our commission as revenue.

In all instances where the credit card authorization has been received but merchandise has not been shipped, we defer revenue recognition until the merchandise is shipped.

Our online marketplace is available 24 hours a day, seven days a week and we currently offer over 200,000 items each day. Since the first offer of product in December 1997, our marketplace has facilitated over $1 billion in net revenues and has registered over five million members.

In the first quarter of 2008, the Company began transforming its business model from a seller marketplace to an asset recovery solution. Asset recovery is a rapidly growing industry with revenues of $38.5 billion in 2004 and is expected to climb to over $63.1 billion in 2008, according to D.F. Blumberg Associates Inc., a logistics research and consulting firm.

As a result, the Company changed its business model from a seller marketplace to an inventory solutions company. The Company began restructuring its business operations in the first quarter of 2008 and continued implementing those changes in the second quarter of 2008. The Company, in combination with the following five restructured operating divisions has identified seven proprietary inventory selling solutions. These operating divisions include:

UBid.com – The Company’s historical auction site which has operated for ten years. This division will focus solely on auction format rather than the current auction and fixed price format.

RedTag.com – A fixed price internet site that is currently under development with an expected launch date in the third quarter of 2008.

RedTag Live – An inventory liquidation company dedicated to physical location sales. RedTag Live was launched in the beginning of the third quarter of 2008.

Dibu Trading Co. – A wholesale inventory liquidation company dedicated to Business-to-Business solutions. This division was formed in the fourth quarter 2007 and dedicated staff was hired in the first quarter of 2008.

The Company’s financial results for the six months ended June 30, 2008 have been negatively impacted by the planned restructuring. To achieve the objective of becoming the leading excess inventory provider, the Company has made significant investments in increased staffing levels and information technology infrastructure. We have also made major changes to our traditional operations as we transition to the new business model.

As part of the restructuring efforts, we significantly reduced our marketing spending while realigning the marketing and advertising resources to better position them to each new operating division. The result was a significant decline in the visitor traffic to our website and decreased revenue volume. The visitor traffic in the quarter ended June 30, 2008 decreased 26.8% compared to the same period of the prior year.

The Company also made the strategic decision to eliminate outside advertisement on its website. Historically advertisement sales have added a revenue stream but have negatively impacted overall sales by redirecting visitor traffic from the Company’s website to competing websites. As a result of the elimination of advertisement sales, outside advertisement revenues decreased $416 or 68.5% in the six months ended June 30, 2008 compared to the same period in 2007.

The transition from an auction marketplace to an asset solutions company also required that operationally we improve the efficiency of our platform to enhance the user experience. The Company significantly decreased the number of listings, eliminating the unprofitable listings, while preparing to migrate fixed price listings to the RedTag platform based on the new business model. The number of listings in the quarter ended June 30, 2008 decreased by 73.2% compared to the quarter ended June 30, 2007. The reduction in the number of unprofitable listings improved our auction success rate and provides efficiencies to both buyers and sellers on our platform.

To further facilitate the restructuring of the business model we are in the process of implementing a new ERP system to enable us to expand both in the U.S. and internationally.

In line with the above changes, we have suffered increased losses compared to the prior year. The losses were consistent with management projections as we strategically transform the Company to a leading excess inventory solutions company. The Company expects all aspects of the new business model will be fully implemented by the end of 2008.

Executive Commentary

Success Measures : Our management believes that the most important financial and non-financial measures that track our progress include sales, website traffic, total average order value, gross margin, customer acquisition costs, advertising expense, personnel costs, and fulfillment costs.

Key Business Metrics : We periodically review key business metrics to evaluate the effectiveness of our operational strategies and the financial performance of our business. These key metrics include the following:

Gross Merchandise Sales (GMS): Gross Merchandise Sales differ from GAAP revenue in that gross bookings represents the gross sales price of goods sold by us (including sales through our UCM Program) before returns, sales discounts, and cancellations.

Number of Orders: This represents the total number of orders shipped in a specified period. We analyze the number of orders by category to evaluate the effectiveness of our merchandising and advertising strategies as well as to monitor our inventory management.

Average Order Value: Average order value is the ratio of gross sales divided by the number of orders shipped within a given time period. We analyze average order value by category primarily to manage costs and other operating expenses.

Visitors: A Visitor is a consumer or business that voluntarily clicks through to the website (uBid.com) using both online and offline advertising stimulus. Visitors don’t include third party site pops, pop unders, or non converting impressions to the website. Examples of online marketing channels we advertise on are: affiliate banner networks, comparison shopping sites, paid and organic search engines, and email.

Bidders: A Bidder is a visitor that places a bid on an item up for auction on the website (uBid.com).

Visitors to Bidder Conversion: The percentage of visitors that bid on an auction item. We use this as a measure of the effectiveness of advertising.

Auctions Closed: A closed auction is an auction that has ended because it reached the scheduled closing time for that auction. Auctions closed includes both successful auctions and auctions with no bids.

Auction Success: A successful auction is a closed auction that received at least one bid.

Auction Success Rate: The percentage of closed auctions that were successful and received at least one bid.

Approved UCM Program Vendors: Vendors that have gone through the approval process to sell merchandise through our website.

Reconciliation of GMS to GAAP

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Direct	$	5,523		$	10,255		$	9,550		$	19,303
UCM		11,594			13,078			24,239			27,370
Business to Business		2,537			3,035			4,750			3,096
Total GMS (1)	$	19,654		$	26,368		$	38,539		$	49,769

Cancellations (2)		(3,240	)		(3,258	)		(6,663	)		(5,935	)

Backlog (3)		(443	)		(791	)		(443	)		(791	)

GAAP Entry (4)		6,913			7,836			13,787			11,383

Returns (5)		(327	)		(379	)		(664	)		(690	)

Net Sales	$	8,426		$	13,663		$	15,567		$	23,270

(1)	GMS	Total revenue in auctions closed and Business to Business transactions
(2)	Cancellations	Auctions that will not be shipped due to credit and other issues
(3)	Backlog	Auctions & orders pending review in credit & approved orders at warehouse pending shipment
(4)	GAAP Entry	Entry required to eliminate sales under revenue sharing and commission arrangements under accounting principles generally accepted in the United States of America ("GAAP")
(5)	Returns	Credits issued to customers for return products and customer satisfaction and related reserves

	In Thousands except Average Order Value and Approved UCM Vendors
	Q2			Q1			Q4			Q3			Q2			Q1			Q4			Q3			Q2
	2008			2008			2007			2007			2007			2007			2006			2006			2006
Measure
GMS (in thousands)
Direct	$	8,061		$	6,240		$	9,646		$	9,296		$	13,289		$	9,110		$	12,477		$	14,952		$	19,735
uBid Certified Merchant		11,593			12,645			13,307			14,408			13,079			14,292			13,799			11,576			10,551
Total GMS	$	19,654		$	18,885		$	22,953		$	23,704		$	26,368		$	23,402		$	26,276		$	26,528		$	30,286
Number of orders (in thousands)
Direct		20			15			21			20			29			21			24			23			37
uBid Certified Merchant		71			73			86			101			98			104			99			89			88
Total orders		91			88			107			121			127			125			123			112			125
Average Order Value
Direct	$	242		$	242		$	370		$	355		$	336		$	390		$	424		$	424		$	416
uBid Certified Merchant	$	151		$	160		$	142		$	129		$	119		$	120		$	126		$	128		$	110
Visitors (in thousands)		5,050			5,755			5,980			7,224			6,901			6,744			6,529			6,488			7,215
Bidders (in thousands)		198			181			173			218			231			235			239			211			255
Bidders to Visitors Percentage		3.9	%		3.1	%		2.9	%		3.0	%		3.3	%		3.5	%		3.7	%		3.3	%		3.5	%
Auctions Closed (in thousands)		181			455			780			715			619			539			579			562			484
Auction Success (in thousands)		56			59			67			78			77			76			65			58			62
Auction Success rate		30.9	%		13.0	%		8.6	%		10.9	%		12.4	%		14.1	%		11.2	%		10.3	%		12.8	%
Approved UCM Vendors		3,854			3,737			3,588			3,321			2,873			2,513			2,049			1,716			1,307

Revenue Source : We derive most of our revenue from sales of products to consumers and businesses as well as commission revenue earned for sales of merchandise under revenue sharing agreements with third party sellers. We believe that the principal drivers of our revenue consist of the average order value placed by our customers, the number of orders placed by both existing and new customers, special offers we make available that result in incremental orders, our ability to attract new customers and advertising that impacts our revenue drivers. Sales consist of orders placed through our uBid.com website and direct business to business sales. We further generate revenue from shipping fees we charge our customers and advertising sales. We record our revenue net of returns and other discounts. Our revenues may fluctuate from period to period as a result of special offers we provide such as free shipping, and other special promotions.

Our revenue is dependent in part on sales of products produced by or purchased from Sony Electronics, Inc. (“Sony”), Hewlett-Packard Company (“HP”), Recoupit, Inc.(“Recoupit”) and Always at Market, Inc.(“Always at Market”). The following table represents the respective vendors’ percentage of sales for the three months and six months ended June 30, 2008 and June 30, 2007. No other supplier represented more than 5% of our net revenues for any period presented.

	Three months ended						Six months ended
	June 30,						June 30,
Vendor	2008			2007			2008			2007
HP		40.2	%		27.1	%		39.5	%		22.9	%
Always at Market		7.1	%		5.2	%		6.9	%		5.8	%
Recoupit		3.2	%		7.9	%		3.9	%		7.4	%
Sony		3.2	%		13.6	%		3.0	%		14.7	%

Cost of Revenues : Cost of revenues primarily consists of the cost of the product and inbound and outbound shipping. There is no cost of revenues for UCM Program revenue. Cost of revenues does not include order fulfillment costs, which are included in general and administrative expenses.

Gross Profits : Our gross profit margins are impacted by a number of factors including the category of merchandise, the introduction of new product categories, the mix of sales among our product categories, pricing of products by our vendors, pricing strategies, promotional programs, market conditions, packaging, excess and obsolete inventory charges and other factors. Gross profits and gross profit percentages are not comparable to gross profit and gross profit percentages reported by companies that include order fulfillment costs in the cost of revenues.

Expenses : Sales and marketing, general and administrative (“SG&A”) expenses consist primarily of sales and marketing expenses, including online marketing activities, order fulfillment and other costs, such as personnel, rent, warehouse and handling, common area maintenance, depreciation, credit card processing charges, insurance, legal and accounting fees. Interest expense charges are from our IBM flooring facility at a rate of 1% per month on the outstanding balances, interest and amortization of loan origination fees related to our credit facility.

Results of Operations (Dollars in Thousands, except per share, order and visitor data)

The following table sets forth, for the periods presented, certain data from our statement of operations as a percentage of net revenues. This information should be read in conjunction with our financial statements and notes thereto included elsewhere in this report.

	(Dollars in Thousands)
	Three months ended June 30,										Six months ended June 30,
	2008					2007					2008					2007
Net Revenues:
Direct	$	4,671		55.4	%	$	9,002		65.9	%	$	8,166		52.5	%	$	16,770		72.1	%
UCM		1,182		14.0	%		1,341		9.8	%		2,460		15.8	%		2,797		12.0	%
Business to Business		2,537		30.1	%		3,035		22.2	%		4,750		30.5	%		3,096		13.3	%
Other		36		0.4	%		285		2.1	%		191		1.2	%		607		2.6	%
Total Net Revenues		8,426		100	%		13,663		100	%		15,567		100	%		23,270		100	%
Gross Profit:
Direct		(190	)	(2.3	)%		873		6.4	%		(138	)	(0.9	)%		1,633		7.0	%
UCM		1,182		14.0	%		1,341		9.8	%		2,460		15.8	%		2,797		12.0	%
Business to Business		286		3.4	%		370		2.7	%		673		4.3	%		384		1.7	%
Other		36		0.4	%		285		2.1	%		191		1.2	%		607		2.6	%
Total Gross Profit		1,314		15.6	%		2,869		21.0	%		3,186		20.5	%		5,421		23.3	%
General and administrative		3,418		40.6	%		3,326		24.3	%		7,171		46.1	%		6,348		27.3	%
Sales and marketing		799		9.5	%		1,131		8.3	%		1,294		8.3	%		2,200		9.5	%
Total operating expenses		4,217		50.0	%		4,457		32.6	%		8,465		54.4	%		8,548		36.7	%
Loss from operations		(2,903	)	(34.5	)%		(1,588	)	(11.6	)%		(5,279	)	(33.9	)%		(3,127	)	(13.4	)%
Interest Income / (Expense) & Other, Net		(74	)	(0.9	)%		51		0.4	%		(83	)	-0.5	%		114		0.5	%
Other Income / (Expense)		-		-	%		-		-	%		-		-	%		60		0.0	%
Net Loss	$	(2,977	)	(35.3	)%	$	(1,537	)	(11.2	)%	$	(5,362	)	(34.4	)%	$	(2,953	)	(12.7	)%

Comparison of Three Months ended June 30, 2008 and June 30, 2007

Net loss for the three months ended June 30, 2008 was $2,977 or $0.16 basic and diluted loss per share. For the three months ended June 30, 2007, the net loss was $1,537 or $0.08 basic and diluted loss per share. The net loss increased by $1,440 or 93.7% from the same period in the prior year.

Direct Channel: Direct channel sales decreased $4,331 or 48.1% to $4,671 for the three months ended June 30, 2008 compared to direct sales of $9,002 in the same period last year. In the current period the number of direct orders decreased 9,000 or 31.0% and the average order value decreased $94.00 or 28.0% to $242.00 per order.

The Direct channel gross profit decreased $1,063 or 121.8% for the three months ended June 30, 2008 compared to the same period in the prior year. The Direct channel gross profit percentage decreased 13.8% to a negative margin of 4.1% for the three months ended June 30, 2008 compared to 9.7% for the three months ended June 30, 2007.

As a result of decreased advertising, the number of direct orders decreased as compared to the quarter ended June 2007. The Company also eliminated unprofitable auctions to eliminate poor performing vendors and unprofitable product categories. The result of these changes was a reduction in auctions closed (181 in the quarter ended June 2008 compared to 619 in the quarter ended June 2007) but due to the realigned marketing and vendor resources, the Company’s auction success rate improved significantly to 30.9% from 12.5% in the quarters ended June 30, 2008 and June 30, 2007, respectively.

The gross profit margin was impacted by certain inventory purchases in the quarter ended June 2008. The Company purchased portable computers from various manufacturers but due to a shift in consumer demand for brand name merchandise, the computers were sold at a negative margin. The negative margin attributable to these computers totaled $215, for the quarter ended June 30, 2008.

UCM Channel: UCM revenues and gross profit decreased $159 or 11.9% to $1,182 for the three months ended June 30, 2008 compared to revenue and gross profit of $1,341 in the same period of the prior year. In the current period the number of UCM orders decreased 27,000 or 27.6% while the average order value increased $32.00 or 26.9% to $151.00 per order. The number of UCM vendors increased 981 or 34.1% to 3,854 vendors compared to 2,873 for the three months ended June 30, 2007.

The decrease in UCM orders and revenues is attributable to the improvements outlined above, where the Company realigned the marketing efforts and eliminated the unprofitable auctions and vendors, resulting in an improved auction success rate and a higher bidder to visitor percentage.

Business to Business: Business to Business revenues decreased $498 or 16.4 % for the three months ended June 30, 2008 compared to the same period in the prior year. Gross profit decreased $84 or 22.7% to $286 for the quarter ended June 30, 2008 compared to $370 for the quarter ended June 30, 2007. The gross profit percentage decreased to 11.3% for the three months ended June 30, 2008 compared to 12.2% in the same period of the prior year.

Included in the Business to Business results are revenues of $406 and gross profit of $137 from the live liquidation events held in two separate physical locations in the State of Florida.

Other Revenue: Other revenue and gross profit primarily comprised of online advertising revenue, decreased $249 or 87.4% for the three months ended June 30, 2008. The decrease was due to the strategic elimination of the advertisement revenue department. In the past, the Company sold advertising space on its website to various companies. Although this strategy added a revenue stream, it impacted sales on the Company’s website since it directed visitors away to competing websites. As a result of the elimination of advertisement revenue, visitors spent more time shopping on the Company’s website, as evidenced by the increased bidder to visitor percentage; 3.9% compared to 3.3% for the quarters ended June, 30 2008 and June 30, 2007, respectively.

Sales and Marketing, General and Administrative Expenses: SG&A expenses for the quarter ended June 30, 2008 were $4,217, a decrease of $240 or 5.4%, compared to the quarter ended June 30, 2007. Non recurring expenses incurred in the quarter ended June 30, 2008 consisted of $81 of recruiting fees, $30 in severance expenses and $32 in investor relations expense for which 90,000 warrants were issued as payment. The recruiting fees were primarily incurred as marketing staffing levels were increased to facilitate strategic marketing initiatives related to the Company’s restructuring plans.

The following table is a comparison of SG&A expenses:

	(Dollars in Thousands)
	Three Month Period Ended
SG&A Expenses:	June 30, 2008		June 30, 2007		Increase (Decrease)
Advertising	$	478	$	993	$	(515	)
Salary and benefits		1,604		1,245		359
Stock-based compensation		114		127		(13	)
Facilities		73		122		(49	)
Warehouse		201		185		16
Credit card fees		392		531		(139	)
Telecommunications, hardware and storage		177		170		7
Legal, audit, insurance, and other regulatory fees		379		276		103
Depreciation & amortization		103		227		(124	)
Bad debt		-		352		(352	)
Consulting and outside services		261		174		87
Redtag Live		298		-		298
Dues & Subscriptions		31		3		28
Travel		57		48		9
Other SG&A		49		4		45
	$	4,217	$	4,457	$	(240	)

Expense increases are summarized as follows:

Salary and benefits expense increased $359 or 28.8% as the result of increased staff levels, primarily in information technology and marketing, $30 of severance and $81 in recruiting fees incurred in the quarter ended June 30, 2008. Stock based compensation decreased $13 due to the increased number of forfeited stock options during the three months ended June 30, 2008.

Warehouse expense increased $16 or 8.6% in the current quarter compared to the same period of the prior year, primarily due to the purchase of warehouse supplies, special warehouse receiving requirements and additional storage costs for the live liquidation events.

Telecommunications, hardware and storage expenses increased $7 or 4.1% as a result of price increases on maintenance contract renewals.

Legal, audit, insurance and other regulatory fees increased $103 or 37.3%. Legal fees increased $116 due to legal expense incurred in patent registrations, infringement defense and the tender offer made to eligible employees to convert eligible options to restricted stock rights. Accounting fees increased $62 primarily due to consulting costs incurred in the evaluation of a new ERP system. Insurance expense increased $62 as a $63 credit was received from prior carriers in the quarter ended June 30, 2007 and insurance coverage was increased in the current quarter.

Consulting and outside services expense increased $87 or 50.0% as new business initiatives were launched and outside services were brought in, including; outside services for the advertising department to facilitate a customer database segmentation project and to provide increased market research & analysis and, outside services for the IT department for software development and restructuring.

RedTag Live, the physical liquidation unit of the Company, was implemented in the first and second quarter of 2008 which resulted in an increase in operating expenses of $298 compared to the quarter ended June 30, 2007. These expenses related to the opening of a new facility for the RedTag Live division and consisted primarily of facility, payroll and advertising expenses.

The increases in expenses were offset by the following decreases:

Depreciation and amortization decreased by $124 or 54.6% primarily as the result of a $43 decrease in amortization of intangible assets. At June 30, 2008 the Bidville intangible asset was fully amortized.

As part of the Company’s restructuring, the Company realigned its marketing and advertising efforts to better position the Company to manufacturers, retailers and consumers. Advertising expense decreased $515 or 51.9% and visitor traffic decreased 1,851,000 or 26.8% as we continued to eliminate the least effective marketing efforts and continue to analyze and segment our database to optimize all future advertising campaigns. The cost per visitor decreased to $0.09 per visitor from $0.14 per visitor in the same period of the prior year. We have increased our advertising in the third quarter of 2008 realigning the resources to better fit the restructured company.

Facilities expense decreased $49 or 40.2% primarily due to the sublet of unused office space at our corporate office partially offset by physical store location rentals.

Credit card fees decreased $139 or 26.2%. The decrease is primarily due to lower sales volumes.

Other Expense: Net interest expense was $47 for the quarter ended June 30, 2008 compared to interest income of $91 for the quarter ended June 30, 2007. The increase in net interest expense is attributed to decreased cash equivalent balances and lower interest rates received in addition to an increased loan balance and borrowing costs under the terms of the credit facility.

Net Losses: The Company experienced a net loss of $2,977 or $0.16 per share for the quarter ended June 30, 2008 compared to a net loss of $1,537 or $0.08 per share for the quarter ended June 30, 2007.

Comparison of Six Months ended June 30, 2008 and June 30, 2007

Net loss for the six months ended June 30, 2008, was $5,362 or $0.29 basic and diluted loss per share. For the six months ended June 30, 2007, the loss was $2,953 or $0.15 basic and diluted loss per share. The loss increased by $2,409 or 81.6% from the same period in the prior year.

Direct Channel: Direct channel sales decreased $8,604 or 51.3% to $8,166 for the six months ended June 30, 2008 compared to Direct channel sales of $16,770 in the same period of the prior year. In the current period the number of direct orders decreased 15,000 or 30.0% and the average order value decreased by $242 or 33.3% per order.

The Direct channel gross profit decreased by $1,771 or 108.5% for the six months ended June 30, 2008 compared to the prior year. The Direct channel gross profit percentage decreased 11.4% to a negative margin of 1.7% for the six months ended June 30, 2008 compared to 9.7% for the six months ended June 30, 2007.

As a result of decreased advertising, the number of direct orders decreased as compared to the six months ended June 30, 2007. The Company also eliminated unprofitable auctions to eliminate unsuccessful vendors but added certified vendors to the list. The result of these changes was a reduction in auctions closed (636 in six months ended June 2008 compared to 1,158 in six months ended June 30, 2007) but due to the realigned marketing and vendor resources, the Company’s auction success rate improved to 18.1% from 13.2%, for the six months ended June 30, 2008 and June 30, 2007, respectively.

The gross profit margin was impacted by certain inventory purchases in the six months ended June 30, 2008. The Company purchased portable computers from various manufacturers but due to a shift in consumer demand for brand name merchandise, the computers were sold at a negative margin. The negative margin attributable to these computers totaled $215, for the six months quarter ended June 30, 2008.

UCM Channel: UCM revenues and gross profit decreased $337 or 12% to $2,460 for the six months ended June 30, 2008 compared to revenue and gross profit of $2,797 in the same period of the prior year. In the current period the number of UCM orders decreased 58,000 or 28.7% while the average order value increased by $72.0 or 30.1% per order. The number of UCM vendors increased 2,205 or 41.0% to 7,591 vendors compared to 5,386 for the six months ended June 30, 2007.

Business to Business: Business to Business revenues increased $1,654 or 53.4% for the six months ended June 30, 2008 compared to the same period in the prior year. Gross profit increased $289 or 75.3% to $673 for the six months ended June 30, 2008 compared to $384 for the six months ended June 30, 2007. The gross profit percentage increased to 14.2% for the six months ended June 30, 2008 compared to 12.4% in the same period of the prior year. Included in the Business to Business results are revenues of $1,086 and gross profit of $377 from the live liquidation events held in three separate physical locations in State of Florida.

Other Revenue: Other revenue and gross profit primarily comprised of online advertising revenue decreased $416 or 68.5% for the six months ended June 30, 2008. The decrease was due to the strategic elimination of the advertisement revenue department. In the past, the Company sold advertising space on its website to various companies. Although this strategy added a revenue stream, it impacted sales on the Company’s website since it directed visitors away to competing websites. As a result of the elimination of advertisement revenue, visitors spent more time shopping on the Company’s website, as evidenced by the increased bidder to visitor percentage; 3.5% compared to 3.4% for the six months ended June, 30 2008 and June 30, 2007, respectively.

Sales and Marketing, General and Administrative Expenses: SG&A expenses for the six months ended June 30, 2008 were $8,465, a decrease of $83 or 1.0%, compared to the six months ended June 30, 2007. Non recurring expenses incurred in the six months ended June 30, 2008 consisted of $206 of recruiting fees, $114 in severance expense and $32 in investor relations expense for which 90,000 warrants were issued as payment. The recruiting fees were primarily incurred as marketing staffing levels were increased to facilitate strategic marketing initiatives related to the Company’s restructuring plans.

The following table is a comparison of SG&A expenses:

	(Dollars in Thousands)
	Six Month Period Ended
SG&A Expenses:	June 30, 2008		June 30, 2007		Increase (Decrease)
Advertising	$	775	$	1,961	$	(1,186	)
Salary and benefits		3,336		2,522		814
Stock-based compensation		223		365		(142	)
Facilities		147		265		(118	)
Warehouse		391		360		31
Credit card fees		793		1,043		(250	)
Telecommunications, hardware and storage		347		324		23
Legal, audit, insurance, and other regulatory fees		722		423		299
Depreciation & amortization		309		409		(100	)
Bad debt		-		352		(352	)
Consulting and outside services		510		343		167
Redtag Live		627		-		627
Dues & Subscriptions		56		8		48
Travel		131		69		62
Other SG&A		98		104		(6	)
	$	8,465	$	8,548	$	(83	)

Expense increases are summarized as follows:

Salary and benefits expense increased $814 or 32.3% as a result of increased staff levels in information technology and marketing, as overall headcount increased to 82 employees from 77 in prior year. The remaining increase in salary and benefits is primarily attributable to an increase of $114 of severance and $206 in recruiting fees incurred in the six months ended June 30, 2008.

Stock based compensation decreased $142 due to the increased number of forfeited stock options during the six months ended June 30, 2008.

Warehouse expense increased $31 or 8.6% primarily driven by increased Business to Business sales volume in the current period compared to the same period of the prior year.

Telecommunications, hardware and storage expenses increased $23 as a result of price increases on maintenance contract renewals.

Legal, audit, insurance and other regulatory fees increased $299 or 70.7%. Legal fees increased $115 due to legal expense incurred in patent registrations, infringement defense and the tender offer made to eligible employees to convert eligible options to restricted stock rights. Accounting fees increased $72 primarily due to consulting costs incurred in the evaluation of a new ERP system. Insurance expense increased $61 as a $63 credit was received from prior carriers in the six months ended June 30, 2007 and insurance coverage was increased in the current quarter.

Consulting and outside services expense increased $167 or 48.7% as new business initiatives were launched and outside services were brought in, including; outside services for the advertising department to facilitate a customer database segmentation project and to provide increased market research & analysis and, outside services for the IT department for software development and restructuring.

RedTag Live, the physical liquidation unit of the Company, was implemented in 2008 which resulted in an increase of $627 of expenses compared to the six months ended June 30 2007. These expenses related to the opening of a new facility for the RedTag Live division and consisted primarily of facility, payroll and advertising expenses.

The increases in expenses were offset by the following decreases:

Depreciation and amortization decreased by $100 or 24.4% primarily as the result of a $118 decrease in amortization of intangible assets, offset by an increase in depreciation of $18. At June 30, 2008 the Bidville intangible asset was fully amortized.

As part of the Company’s restructuring, we realigned our marketing efforts to better position the Company to manufacturers, retailers and the consumers. Advertising expense decreased $1,186 or 60.5% and visitor traffic decreased 2,840,000 or 20.9% as we continued to eliminate the least effective marketing efforts and continue to analyze and segment our database to optimize all future advertising campaigns. The cost per visitor decreased to $0.07 per visitor from $0.14 per visitor in the same period of the prior year. We have increased our advertising in the third quarter of 2008 realigning the resources to better fit the restructured company.

Facilities expense decreased $118 or 44.6% primarily due to the sublet of unused office space at our corporate office partially offset by physical store location rentals.

Credit card fees decreased $250 or 24.0%. The decrease is primarily due to lower sales volumes.

Other Expense: Net interest expense was $35 for the six months ended June 30, 2008 compared to interest income of $186 for the six months ended June 30, 2007. The increase in net interest expense is attributed to decreased cash equivalent balances and lower interest rates received in addition to an increased balance and borrowing costs under the terms of the credit facility.

Net Losses: The Company experienced a net loss of $5,362 or $0.29 per share for the six months ended June 30, 2008 compared to a net loss of $2,953 or $0. 15 per share for the six months ended June 30, 2007.

Liquidity and Capital Resources

Historically, our primary sources of capital have been cash flow from operations and loans from affiliated parties. More recently, our primary sources of cash flow have been from operations and the $29.5 million raised in the December 29, 2005 private offering of our common stock and warrants.

Net cash used in operating activities for the six months ended June 30, 2008 was $6,164 compared to $2,913 used in the six months ended June 30, 2007. The net cash used in operating activities in 2008 increased primarily due to the increase in net loss, increase in cash used of $580 for inventory purchases and a $636 increase in accounts receivable. Also contributing to the increases in cash used was a $83 increase in prepaid expenses and a $140 decrease in accounts payable. Partially offsetting the increases in cash used was a $73 increase in accrued expenses. The increase in inventories is intended to increase products available for auction. Accounts receivable increased $636 primarily due to the increase in credit card receivables and increased open account sales in the Business to Business sales channel. The increase in credit card receivables is attributable to the timing of the payments by the credit card processing companies, which creates a lag between the sale date and the receipt of proceeds from the credit card processing companies.

Net cash used in investing activities was $473 for the six months ended June 30, 2008 due primarily to the purchase of property and equipment. Net cash used in investing activities was $102 for the period ended June 30, 2007. The increase in purchases of property and equipment for the six months ended June 30, 2008 related primarily to hardware and software purchases as IT infrastructure investment increased for the six months ended June 30, 2008.

Net cash provided by financing activities was $3,713 for the six months ended June 30, 2008, compared to the net cash used of $1,415 for the same period last year. The cash inflow in 2008 is due to advances on the Wells Fargo Credit Agreement of $3,911 offset by $198 of inventory purchases financed through the flooring facility.

The non-cash investment transaction relates the purchase of the redtag.com URL which accounted for $203 for the six months ended June 30, 2008. This transaction is discussed in the intangibles section in Note 1, Basis of Presentation.

On May 9, 2006, we entered into a Credit and Security Agreement with Wells Fargo Bank, National Association acting through Wells Fargo Business Credit and related security agreements and other agreements described in the Credit and Security Agreement (the “Credit Agreement”). The Credit Agreement provides for advances to us of up to a maximum of $25.0 million. The amount actually available to the Company will vary from time to time, depending on, among other factors, the amount of eligible inventory and the amount of eligible accounts receivable. The obligations under the Credit Agreement and all related agreements are secured by all of the our assets. The initial term of the Agreement is three years, expiring on April 28, 2009. Up to $7.0 million of the maximum amount is available for irrevocable, standby and documentary letters of credit. Advances under the Credit Agreement bear interest at a base rate (Wells Fargo Bank's prime rate) or LIBOR plus 2.5%. The Credit Agreement requires a prepayment fee of $125,000 if we terminate the Credit Agreement during the third year. The Credit Agreement requires us, among other things, to limit capital expenditures and maintain minimum availability on the line. Also, we are obligated contractually by a restrictive lock box arrangement. The Credit Agreement also requires us to pay a variety of other fees and expenses, including minimum annual interest of $125,000. As of June 30, 2008 we had $35,000 in deferred financing fees being amortized over the life of the Credit Agreement. As of June 30, 2008, the effective loan rate was 8.25%, we had an outstanding balance of $3,911,000.

We believe that the above options in conjunction with the current working capital, cash flows from operations and availability under our new equity facility, discussed below, will be adequate to support our current operating plans for at least the next 12 months.

On July 15, 2008 the Company signed a $10.0 million common stock purchase agreement with Fusion Capital Fund II, LLC, an Illinois limited liability company (“Fusion Capital”). Concurrently with entering into the common stock purchase agreement, the Company entered into a registration rights agreement with Fusion Capital. Under the registration rights agreement, the Company agreed to file a registration statement related to the transaction with the U.S. Securities and Exchange Commission (“SEC”) covering the shares that have been issued or may be issued to Fusion Capital under the common stock purchase agreement. The Company expects to file the registration statement by August 28, 2008. After the SEC has declared effective the registration statement related to the transaction, the Company has the right over a 24-month period to sell shares of common stock to Fusion Capital from time to time in amounts between $60,000 to $1.0 million, depending on certain conditions set forth in the agreement, up to an aggregate of $10.0 million.

In consideration for entering into the agreement, upon execution of the common stock purchase agreement the Company issued to Fusion Capital 230,074 shares of the Company’s restricted common stock as a commitment fee. Also, the Company will issue to Fusion Capital an additional 230,074 shares as a commitment fee pro rata as the Company receives the $10.0 million of future funding. The purchase price of the shares related to the $10.0 million of future funding will be based on the prevailing market prices of the Company’s common stock at the time of sales without any fixed discount, and the Company will control the timing and amount of any sales of shares to Fusion Capital. Fusion Capital shall not have the right or the obligation to purchase any shares of the Company’s common stock on any business day that the price of the Company’s common stock is below $0.75 per share. The common stock purchase agreement may be terminated by the Company at any time at the Company’s discretion without any cost to the Company. There are no negative covenants, restrictions on future funding, penalties or liquidated damages in the agreement. The proceeds received by the Company under the common stock purchase agreement will be used to provide working capital to further implement the Company’s recently announced strategic change to focus on liquidating excess inventories.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has little exposure to risks of fluctuating interest rates or fluctuating currency exchange rates. Accordingly, the Company does not believe that changes in interest or currency rates will have a material effect on our liquidity, financial condition or results of operations. It is the Company’s policy not to enter into derivative financial instruments.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures . The Company maintains disclosure controls and procedures that have been designed to ensure that information related to the Company is recorded, processed, summarized and reported on a timely basis. We review these disclosure controls and procedures on a periodic basis. In connection with this review, we have established a compliance committee that is responsible for accumulating potentially material information regarding its activities and considering the materiality of this information. The compliance committee (or a subcommittee) is also responsible for making recommendations regarding disclosure and communicating this information to our Chief Executive Officer and Vice President, Finance to allow timely decisions regarding required disclosure. Our compliance committee is comprised of our principal risk management officer and other members of our management team.

The Company’s Chief Executive Officer and Chief Financial Officer, with the participation of the compliance committee, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report, as required by Rule 13a-15 of the Securities Exchange Act of 1934. Based on their evaluation of the Company’s disclosure controls and procedures, the Company’s Chief Executive Officer and Chief Financial Officer believe that, as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.

Internal Control Over Financial Reporting. There have been no changes in the Company’s internal control over financial reporting identified in the evaluation that occurred during the first quarter of fiscal year 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims are pending against the Company or involve the Company that, in the opinion of the Company’s management, could reasonably be expected to have a material adverse effect on our business or financial condition.

ITEM 1A. RISK FACTORS

In addition to other information set forth in this report, you should carefully consider the factors discussed in Part 1, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, which could materially affect the Company’s business, financial condition or future results. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that are currently deemed to be immaterial also may materially adversely affect the Company’s business, financial conditions and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

For the three months ended June 30, 2008, options to purchase an aggregate of 296,500 shares of the Company’s common stock were granted to individuals, all employees of Enable. Options to purchase an aggregate of 600,000 shares at $1.14 per share were granted on September 21, 2007. The options have a term of ten years and vest over a three to four year period either quarterly or annually beginning on the first quarter or year respectively after the date of grant. The option grants were exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, which provides an exemption for transactions not involving a public offering.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None

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

None

ITEM 5. OTHER INFORMATION

Effective August 8, 2008, the Company changed its name to Enable Holdings, Inc. from uBid.com Holdings, Inc. The amendment to the Company’s certificate of incorporation was filed with the Secretary of State of the State of Delaware on August 4, 2008.

The name change was recommended by unanimous consent of the Company’s Board of Directors on July 14, 2008, and was approved by the written action of the Company’s stockholders owning more than a majority of the outstanding shares of the Company’s common stock. In connection with such name change, the Company’s ticker symbol on the NASDAQ OTC bulletin board has been changed to ENAB.OB, effective August 12, 2008.

ITEM 6. EXHIBITS

See Exhibit Index on the following page.

Exhibit No.		Description
31.1		Certification of the President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of the President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to requirements of Section 13 or 15(d) 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 as of August 14, 2008.

	ENABLE HOLDINGS, INC.

	By:	/s/ Miguel A. Martinez, Jr.
		Name: Miguel A. Martinez, Jr.
		Title: Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)