UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended August 31, 2006
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to _____________
Commission file number 000-50101
E and S Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 91-2135425
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5046 E. Boulevard, NW, Canton, OH 44718
(Address of principal executive officer)
(330) 966-8120
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 15,100,000
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [ ]
E AND S HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
AUGUST 31, 2006 AND MAY 31, 2006
August 31, 2006 May 31, 2006
--------------- ------------
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash in bank $ 25 $ 54
Accounts receivable 0 178
Inventory 21,365 21,436
--------- ---------
21,390 21,668
OTHER ASSETS
Patent - net of amortization of $4,206 at
August 31, 2006 and $3,958 at May 31, 2006 8,493 8,740
--------- ---------
Total Other Assets 8,493 8,740
--------- ---------
Total Assets $ 29,883 $ 30,408
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 47,451 $ 41,284
Accounts payable - stockholder 22,002 20,603
Note payable - stockholder 18,150 12,250
Accrued interest 1,110 665
Accrued royalties 3 2
Accrued warranty 130 128
--------- ---------
Total Current Liabilities 88,846 74,932
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock - 100,000,000 shares authorized,
15,100,000 outstanding as of August 31 and
and May 31, 2006 at .001 per share 15,100 15,100
Additional paid-in capital 237,999 237,999
Deficit accumulated during the development stage (312,062) (297,623)
--------- ---------
Total Stockholders' Equity (Deficit) (58,963) (44,524)
--------- ---------
Total Liabilities and Stockholders' Equity (Deficit) $ 29,883 $ 30,408
========= =========
Note: The balance sheet at May 31, 2006 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements
See accompanying notes to financial statements.
1
E AND S HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 31, 2006
THE THREE MONTHS ENDED AUGUST 31, 2005 AND
THE PERIOD FROM JUNE 20, 2001 (INCEPTION) TO AUGUST 31, 2006
Three Months Three Months June 20, 2001
Ended Ended (Inception) to
August 31, 2006 August 31, 2005 August 31, 2006
--------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited)
SALES - NET $ 100 $ 1,549 $ 12,683
COST OF SALES
Purchases 47 954 6,080
--------- --------- ---------
GROSS PROFIT 53 595 6,603
OPERATING EXPENSES
Damaged and defective items 12 0 1,100
Wage expense 0 0 118,600
Advertising and marketing 133 0 17,889
Legal and accounting 9,842 10,580 103,828
Professional fees 1,365 1,166 13,010
Product development 0 0 814
Bank charges 106 102 934
Rent - stockholder 0 0 11,000
License and permits 0 0 1,943
Amortization 247 247 4,207
Franchise tax 0 0 219
Workers' compensation 10 10 333
Commission 0 13 75
Royalty expense 15 77 636
Office and administrative expense 0 520 18,657
Travel 0 1,027 4,699
Freight and delivery 0 0 825
Postage 0 80 1,052
Payroll tax 0 0 563
Insurance 0 0 1,587
Supplies 0 0 2,589
Telephone 0 114 2,106
Trade shows 2,220 0 6,110
UCC code 0 0 1,050
Warranty expense 2 31 241
Membership fees 0 0 896
--------- --------- ---------
13,952 13,967 314,963
--------- --------- ---------
NET LOSS FROM OPERATIONS (13,899) (13,372) (308,360)
OTHER INCOME (EXPENSE)
Miscellaneous income 0 0 29
Miscellaneous expense 0 0 (203)
Interest expense (540) (93) (3,457)
Bad debts 0 0 (71)
--------- --------- ---------
(540) (93) (3,702)
NET LOSS BEFORE INCOME TAXES (14,439) (13,465) (312,062)
PROVISION FOR INCOME TAXES 0 0 0
--------- --------- ---------
NET LOSS $ (14,439) $ (13,465) $(312,062)
========= ========= =========
NET LOSS PER COMMON SHARE - BASIC $ (.00) $ (.00) $ (.03)
========= ========= =========
See accompanying notes to financial statements
2
E AND S HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31, 2006,
THE THREE MONTHS ENDED AUGUST 31, 2005 AND
THE PERIOD FROM JUNE 20, 2001 (INCEPTION) TO AUGUST 31, 2006
Three Months Three Months June 20, 2001
Ended Ended (Inception) to
August 31, 2006 August 31, 2005 August 31, 2006
--------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (14,439) $ (13,465) $(312,062)
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 247 247 4,206
Decrease/ (Increase) in accounts receivable 178 1,040 0
Decrease /(Increase) in inventory 70 989 (21,365)
Interest capitalized 0 0 1,296
(Decrease)/Increase in accounts payable 6,167 7,696 47,451
(Decrease)/Increase in accrued interest 445 93 1,110
(Decrease)/ Increase in stockholder payable 1,399 0 22,002
(Decrease)/ Increase in accrued royalties 1 (39) 3
(Decrease)/ Increase in accrued warranty 3 (5) 130
--------- --------- ---------
Net Cash From (Used By) Operating Activities (5,929) (3,444) (257,229)
--------- --------- ---------
CASH FLOWS USED BY INVESTING ACTIVITIES
Purchase of patent 0 0 (10,800)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from stockholders 5,900 4,000 28,950
Repayments of loans - stockholders 0 0 (12,096)
Forgiveness of debt by stockholders 0 0 96,700
Proceeds from issuance of common stock,
Net of issuance costs of $2,500 0 0 154,500
--------- --------- ---------
Net Cash Provided By Financing Activities 5,900 4,000 268,054
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH (29) 556 25
CASH AT BEGINNING OF PERIOD 54 136 0
--------- --------- ---------
CASH AT END OF PERIOD $ 25 $ 692 $ 25
========= ========= =========
See accompanying notes to financial statements.
3
E AND S HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31,2006
THE THREE MONTHS ENDED AUGUST 31, 2005 AND
THE PERIOD FROM JUNE 20,2001 (INCEPTION) TO AUGUST 31, 2006
Three Months Three Months June 20, 2001
Ended Ended (Inception) to
August 31, 2006 August 31, 2005 August 31, 2006
--------------- --------------- ---------------
(Unaudited) (Unaudited) (Unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Interest paid $ 0 $ 0 $ 680
====== ====== ======
Taxes paid $ 0 $ 0 $ 0
====== ====== ======
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
On September 27, 2001, 700,000 shares of stock were issued at a value of
$1,899 in return for contribution of the patent option. The patent was
subsequently purchased for $10,800 in March 2002.
In March of 2003, interest accrued on stockholder loans payable in the
amount of $1,296 was added to the outstanding loan balance when the stockholder
notes due March, 2003 were renewed.
In November of 2004, certain officers, directors, and shareholders of the
company forgave accrued wages, director's fees, and rents totaling $96,700.
These transactions are reflected as increases to paid-in capital.
In February of 2006, an officer of the company forgave accrued wages of
$17,000. This transaction is reflected as an increase to additional paid-in
capital. Also, the officer acquired 100,000 shares of stock in exchange for
accrued wages of $8,000 and $2,000 of compensation. These transactions have been
reflected as increases to common stock and additional paid-in capital.
See accompanying notes to financial statements
4
E AND S HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2006
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form
10-QSB and item 310(b) of Regulation S-B. Accordingly, they do not include all
the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the financial statements and footnotes thereto
included in the E and S Holdings, Inc. Form 10-KSB filing for the year ended May
31, 2006.
NOTE B - DEVELOPMENT STAGE COMPANY
E and S Holdings, Inc. (a Nevada corporation) has been in the development
stage since its formation on June 20, 2001. It is primarily engaged in the
development and marketing of new products on which it holds the patent.
Realization of a major portion of its assets is dependent upon the Company's
ability to successfully develop and market the patent, meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
5
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
E & S Holdings (E & S) is a developmental stage company that has received
revenues of approximately $100 during the three-month period ending August 31,
2006. E & S has received no significant revenues since its inception.
As of August 31, 2006, E & S has cash assets of $25 and no accounts
receivable. The inventory of the company is $21,365. After experiencing initial
favorable response to the company's sole product, the Portable Pipe Vise, E & S
has experienced a continuing decrease in the public interest for its product.
Due to the lack of market response to the product, the management of E & S has
decided that it is necessary to review the focus of the business's operation at
this time. Management does not believe that additional funding of the Portable
Pipe Vise will create sufficient interest in the product to justify raising
additional capital. Instead, management is now focusing its efforts toward
developing another product to market to the public either through the purchase
of the product or through a combination with another existing entity.
Until such time as E & S is in a position to propose to its shareholders a
change in direction of the company, it will continue in its efforts to market
the Portable Pipe Vise to the public. It has no plans, at this time, however, to
order additional units of the Portable Pipe Vise from its manufacturer.
The shares of E & S are currently listed on the OTC Bulletin Board, under
the symbol ESHI.
Over the past three months, E & S has sustained operating losses in the
amount of $14,439. Of this amount, $9,842 involve costs for legal and accounting
fees occurred during the last quarter. As of August 31, 2006, E & S has total
liabilities of $88,846. These liabilities include approximately $41,262 of
liabilities owed to shareholders for advances and loans made to the company.
There are no off balance sheet arrangements involving E & S at this time.
ITEM 3 - CONTROLS AND PROCEDURES
The management of E & S recognize its responsibility for establishing and
maintaining adequate internal controls over financial reporting for E & S. Due
to the small size of E & S, the company's Chief Executive Officer and Chief
Operating Officer is aware of all matters pertaining to the operations of E & S
Holdings, Inc and has reviewed all aspects of the financial information included
in the company's financial reporting. At the present time, management is of the
opinion that the company's internal controls over financial reporting for the
past fiscal year is adequate. However, management has identified a material
weakness in its procedures in that the small size of management causes a lack of
segregation of duties and limits management's ability to recognize potential
inadequacies of the internal controls over the financial reporting.
6
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
To the best of its knowledge, management of E & S is not aware of any legal
proceedings in which E & S is currently involved.
ITEM 2 - CHANGES IN SECURITY
There are no changes in security since the last annual statement for the
year ending May 31, 2006.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
There are no defaults upon any senior securities.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5 - OTHER INFORMATION
There are no items of information required to be disclosed pursuant to this
item at this time.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. The following are filed as Exhibits to this quarter of the report. The
numbers refer to the exhibit table of Item 601 of regulation S-K: Reference is
hereby made to the exhibits contained in the registration statement (Form SB-2)
filed by E & S.
Exhibit 31 - Rule 13a-14(a)/15d-14(a) - Certification
Exhibit 32 - Section 1350 - Certification
B. Reports on Form 8-K - 9/21/2005
Reports on Form 8-K - 12/16/2005
Reports on Form 8-K - 2/10/2006
7
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
E & S HOLDINGS, INC.
Date: October 12, 2006 By: /s/ Edward A. Barth
--------------------------------------------
Edward A. Barth, Principal Financial Officer
Date: October 12, 2006 By: /s/ Edward A. Barth
--------------------------------------------
Edward A. Barth, Principal Executive Officer
8