- Quarterly Report (10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the period ended March 31, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file Number: 000-50995

Enable Holdings, Inc.

(Formerly known as uBid.com Holdings, Inc.)

(Exact name of registrant as specified in its charter)

Delaware	52-2372260
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

1140 W. Thorndale Avenue, Itasca, Illinois 60143

(Address of principal executive offices and zip code)

Registrant’s telephone number including area code:

(773) 272-5000

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such a shorter period that the registrant was required to submit and post such files.) Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No x

The number of shares outstanding of the registrant’s Common Stock, par value $0.001, as of April 30, 2010 was 19,726,678.

ENABLE HOLDINGS, INC.

TABLE OF CONTENTS

	PART I. FINANCIAL INFORMATION
Item 1	Financial Statements
	Consolidated Condensed Balance Sheets - March 31, 2010 (unaudited) and December 31, 2009	3
	Consolidated Condensed Statements of Operations – Three Months Ended March 31, 2010 and 2009 (unaudited)	4
	Consolidated Condensed Statement of Shareholders’ Equity – Three Months Ended March 31, 2010 (unaudited)	5
	Consolidated Condensed Statements of Cash Flows – Three Months ended March 31, 2010 and 2009 (unaudited)	6
	Notes to Unaudited Consolidated Condensed Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27

	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	27
Item 1A	Risk Factors	27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3	Default Upon Senior Securities	28
Item 4	Submission of Matters to a Vote of Security Holders	28
Item 5	Other Information	28
Item 6	Exhibits Index	28
	Signatures	29

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENABLE HOLDINGS, INC. and Subsidiaries

Consolidated Condensed Balance Sheets

(Dollars in Thousands, except per share amounts)

	As of
	March 31,2010			December 31,2009
	(unaudited)

Assets

Current Assets
Cash and cash equivalents	$	86		$	1,018
Accounts receivable, less allowance for doubtful accounts of $3 and $3, respectively		92			200
Merchandise inventories, less reserve for obsolescence of $33 and $25, respectively		1,185			433
Reserve deposit		297			569
Prepaid expenses and other current assets		257			172

Total Current Assets		1,917			2,392

Property and Equipment, net		2,188			2,337
Purchased Intangible Assets, net		202			202

Total Assets	$	4,307		$	4,931

Liabilities and Shareholders' Deficit

Current Liabilities
Accounts payable	$	5,747		$	6,977
Accrued expenses:
Other		721			1,458
Due to former bridge note holder		-			700
Deferred rent		38			42
Flooring facility		1,633			535

Total Current Liabilities		8,139			9,712
Long-term notes payable		1,904			1,904
Shareholders' Deficit
Common stock, $.001 par value (200,000,000 shares authorized; 19,726,678 outstanding at March 31, 2010 and December 31,2009)	$	22		$	22
Preferred stock, $.002 par value (2,697,205 and 2,497,205 issued and outstanding at March 31, 2010 and December 31, 2009, respectively)		5			5
Stock subscription receivable		-			(1,354	)
Treasury stock, 2,135,550 shares of common stock		(2,242	)		(2,242	)
Additional paid-in-capital		51,141			50,625
Accumulated deficit		(54,662	)		(53,741	)

Total Shareholders' Deficit	$	(5,736	)	$	(6,685	)

Total Liabilities and Shareholders' Deficit	$	4,307		$	4,931

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 per share amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Net Revenues	$	2,990		$	5,094
Cost of Revenues		2,242			3,865

Gross Profit		748			1,229

Operating Expenses
General and administrative		1,459			2,867
Sales and marketing		144			295
Total operating expenses		1,603			3,162

Loss From Operations		(855	)		(1,933	)

Other Income (Expense)
Interest (Expense) Income, net		(121	)		(692	)
Miscellaneous Income		55			-
Loss on financial instruments		-			(48	)
Total Other Expense		(66	)		(740	)

Net Loss	$	(921	)	$	(2,673	)

Net Loss per share - Basic and Diluted	$	(0.05	)	$	(0.14	)

Weighted Average Shares - Basic and Diluted		19,726,678			18,986,678

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

ENABLE HOLDINGS, INC. and Subsidiaries

Consolidated Statement of Shareholders’ Equity

(Dollars in Thousands)

(Unaudited)

	Common Stock				Preferred Stock				Paid-in		Treasury Stock					Subscriptions			Accumulated
	Shares		Dollars		Shares		Dollars		Capital		Shares		Dollars			Receivable			Deficit			Total
Balance, December 31, 2009		19,726,678	$	22		2,497,205	$	5	$	50,625		2,135,550	$	(2,242	)	$	(1,354	)	$	(53,741	)	$	(6,685	)
Stock compensation expense		-		-		-		-		16		-		-			-			-			16
Preferred stock issuance (1)		-		-		-		-		-		-		-			1,354			-			1,354
Preferred stock issuance (2)		-		-		200,000		-		500		-		-			-			-			500
Net Loss		-		-		-		-		-		-		-			-			(921	)		(921	)
Balance, March 31, 2010		19,726,678	$	22		2,697,205	$	5	$	51,141		2,135,550	$	(2,242	)	$	-		$	(54,662	)	$	(5,736	)

(1) Proceeds received from preferred stock subscriptions receivable.

(2) Issued 200,000 shares of preferred stock at $2.50 per share. Proceeds of $500 received.

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

ENABLE HOLDINGS, INC. and Subsidiaries

Consolidated Condensed Statement of Cash Flows

(Dollars in Thousands, except per share data)

(Unaudited)

	Three months ended March 31,
	2010			2009
Cash Flows From Operating Activities
Net loss	$	(921	)	$	(2,673	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		168			119
Provision for bad debts		-			(138	)
Non-cash stock compensation expense		16			30
Interest on warrants issued 90-day bridge loan		-			455
Common stock and warrants issued for services		-			315
Loss on derivative liability		-			48
Changes in assets and liabilities:
Accounts receivable		108			612
Merchandise inventories		(753	)		1,579
Prepaid expenses and other current assets		189			(261	)
Accounts payable		(1,230	)		477
Accrued expenses		(738	)		(545	)
Deferred rent		(4	)		(17	)

Net cash (used in) provided by operating activities		(3,165	)		1

Cash Flows From Investing Activities
Capital expenditures		(19	)		(251	)
Change in restricted cash		-			179

Net cash used in investing activities		(19	)		(72	)

Cash Flows From Financing Activities
Change in flooring facility		1,098			175
Payments on 90-day bridge loan		-			(100	)
Payment to bridge note holder		(700	)		-
Proceeds from preferred stock issuance		1,854			-

Net cash provided by financing activities		2,252			75

Net (Decrease) Increase in Cash and Cash Equivalents		(932	)		4

Cash and Cash Equivalents, beginning of period		1,018			99

Cash and Cash Equivalents, end of period	$	86		$	103

Supplemented Cash Flow Disclosure
Cash paid for interest	$	315		$	290

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

Notes to Unaudited Consolidated Financial Statements

Note 1. Basis of presentation

Enable Holdings, Inc. (the "Company" or "Enable"), operates leading on-line websites that allow 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 consumer and business customers. Through the Company's websites, located at www.uBid.com and www.RedTag.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, automobiles, home improvement products and collectibles. The Company's marketplace employs a combination of auction style and fixed price formats.

Each of the Company’s current business segments provides a combination of solutions for sellers to efficiently liquidate their excess inventory. The segments are listed below:

1)	uBid.com: The Company’s flagship website, which has operated for 12 years. The website allows merchants to sell excess inventory and allows consumers to buy products in an auction or fixed price format.

2)	RedTag.com: The Company’s fixed price internet site offers name brand merchandise with a low shipping and handling fee of only $1.95.

3)	RedTag Live: The Company’s live liquidation group, dedicated to selling through the traditional in-store sales and live liquidation sales.

Dibu Trading Company: A wholesale inventory liquidation company dedicated to Business-to-Business (“B2B”) solutions, providing manufacturers and distributors the ability to sell large quantities of excess inventory. For example, when a retailer needs to liquidate a large quantity of inventory, they contact the Company to find a buyer that will buy the entire inventory in a single transaction. Our B2B experience allows us to present deals to multiple interested buyers to attain the highest possible recovery for the seller.

Commerce Innovations: A software service company which licenses auction software to third party companies. Companies, businesses and governments can use the Company’s platform to sell excess furniture, appliances, autos, and other surplus. This allows them to utilize a trusted platform while reducing live auction costs, as well as an efficient way to reach a wider target audience.

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, 2009. 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.

Note 2. New accounting pronouncements

In January 2010, the FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.” ASU 2010-06 requires reporting entities to make new disclosures about recurring or nonrecurring fair value measurements including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances, and settlements on gross basis in the reconciliation of Level 3 fair value measurements. ASU 2010-06 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a material impact on the Company’s financial statements.

Note 3. Summary of significant accounting policies

1)	Revenue recognition

The Company’s business currently consists of three distinct channels: Certified Merchant (CM), Managed Supply and Cash Recovery. The Company sells merchandise through the CM Program channel by allowing prescreened third party merchants to sell their product through our online marketplace to consumers and businesses. The Company does not take title to this merchandise and therefore does not bear the related inventory risk. In the CM Program, the Company is the primary obligor to whom payment is due, but it bears no inventory or returns risk, so the Company records only its commission as revenue. Through the Managed Supply channel, the Company sells inventory that is consigned to it. The inventory is either stored at the Company’s warehouse or the sellers’. The Company purchases merchandise outright in the Cash Recovery channel and sells to consumers and businesses. On this merchandise, the Company bears 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. In all instances where the credit card authorization has been received but merchandise has not been shipped, the Company defers revenue recognition until the merchandise is shipped.

2)	Shipping and handling costs

Shipping costs that are billable to the customer are included in revenue and 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 during 2009 and direct warehouse costs in 2010 are included in general and administrative expenses and totaled $26 and $160 for the quarters ended March 31, 2010 and 2009, respectively.

3)	Intangibles

Each reporting period, the Company evaluates its intangible assets to determine whether events and circumstances continue to support an indefinite useful life, and record an impairment charge if needed. No impairment was recorded at March 31, 2010.

Note 4. Earnings (loss) per share

The Company computes both the 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.

March 31,	2010		2009
Shares subject to stock warrants		-		49,589,970
Shares subject to stock options		1,000,000		1,544,500

		1,000,000		51,134,470

EPS for the three months ended March 31, 2010 and 2009 were $(0.05) and $(0.14), respectively.

4)	Derivative financial instruments

As a result of the adoption of ASC 815 (formerly EITF 07-5), the Company is required to “Determine the Fair Value of a Financial Asset When the Market for That Asset Is Not Active”, and to disclose the fair value measurements required by ASC 820-10, “Fair Value Measurements and Disclosures.” The derivative liability recorded at fair value in the balance sheet as of March 31, 2009 is categorized based upon the level of judgment associated with the inputs used to measure its fair value. Hierarchical levels, defined by ASC 820-10, are directly related to the amount of subjectivity associated with the inputs to fair valuations of these liabilities are as follows:

Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 — Unobservable inputs, for which little or no market data exist, therefore require an entity to develop its own assumptions.

The following table summarizes the financial liabilities that are measured at fair value on a recurring basis as of March 31, 2009, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value. There were no financial liabilities measured at fair value as of March 31, 2010:

		Level 1				Level 2				Level 3				Total
Derivative Liability			-			$	48				-			$	48

The derivative liability consists of stock warrants issued by the Company that contain a strike price adjustment feature, as stated below. In accordance with ASC 815, the Company calculated the fair value of the warrants using the Black–Scholes–Merton valuation model, at January 1, 2009, with a corresponding reduction of additional paid in capital of $5,386 and $2,028 to accumulated deficit.

The Company used the following assumptions in calculation of the Black-Scholes model: no expected dividend yield, estimated volatility 66.7%, risk-free interest rate of 1.82% and maturity of two years. All warrants were canceled effective December 31, 2009.

Note 5. Financing Arrangements

On January 16, 2009, the Company received extensions from certain accredited investors who previously made commitments for an aggregate of $2,550 in the form of 90-day bridge loans which extended the original maturity date of January 12, 2009 by an additional 90 days. During the first quarter of 2009, the Company paid off $100 associated with the bridge loans and negotiated further extensions. On December 11, 2009, the Company entered into a restructuring agreement under which the Bridge Note Holders were paid $700 in cash and received a note for $900 with interest payable at 6% annually. The interest is paid quarterly and the principal is due quarterly starting in the second year of the loan. The Bridge Note Holders forgave all principal and interest due under the original notes in exchange for 877,511 shares of Series 1 Preferred Stock.

In March 2009, the Company completed a private placement offering to accredited investors. Investors purchased units, with each unit consisting of a senior convertible debenture for one share of common stock of the Company, and a warrant, depending on the date of investment, to acquire either two shares or one share of common stock for ten years at a purchase price of $0.25 per share. The debentures paid interest at a rate of 12% per annum, had a term of 30 months and were convertible into the Company’s common stock at any time at the option of the investor. The Company received $1,315 which was held in an escrow account until April 29, 2009. The Company used the proceeds to pay operating expenses and to fulfill immediate inventory requirements. Of the $1,315 proceeds received, $25 was used for legal expenses while $60 was paid to the brokers who assisted with the offering. On December 11, 2009, the Company entered into a restructuring agreement with the secured debenture holders and as part of the restructuring the secured debenture holders received interest due under the 12% debenture and a note for $822 which bears interest at an annual rate of 6%. Interest is payable quarterly and the note is due in 24 months. The secured debenture holders also received 119,694 shares of Series 1 Preferred Stock and forgave previously issued debt.

On October 9, 2009, the Company received a $500 loan in the form of 2009 convertible promissory notes provided from a group of accredited investors. The Company repaid the loan in full on December 2, 2009.

During the fourth quarter of 2009 the Company entered into a restructuring agreement with the Bridge Note Holders. As part of the restructuring, the Bridge Note Holders received $700 in cash and were issued a $900 note that is due in 24 months. The note bears interest at a 6% annual rate. The note and accrued interest are payable starting 15 months from the closing date. The Bridge Note Holders forgave previously issued debt, canceled all the warrants received and received 877,511 shares of Series 1 Preferred Stock. Per ASC 470-60 – Accounting for Troubled Debt Restructuring, a gain was recorded for the difference between the fair market value of the preferred stock issued and the fair value of the debt forgiven and warrants surrendered.

In connection with the debt restructuring, two long term notes for $900 and $822 both of which both bear interest at a rate of 6% per annum, were issued by the Company. The $900 note was issued to the Bridge Note Holders and is payable in quarterly installments starting in March, 2011. The $822 note was issued to the 12% debenture holders and is due, along with accrued interest in 24 months. All previously issued debt was forgiven in conjunction with the restructuring agreement.

March 31,	Note 1		Note 2		Total
Face Value	$	900	$	822	$	1,722

Interest		83		99		182

Note Value	$	983	$	921	$	1,904

There were 1,500,000 shares of Series 1 Preferred Stock sold to accredited investors at $2.50 per share. At December 31, 2009 the Company had commitments to purchase all 1,500,000 shares. The Company received $2,396 in cash and the remaining $1,354 was recorded as a subscription receivable. All monies were received by February 24, 2010. Each share of Series 1 Preferred Stock is convertible into 66.83 shares of common stock. The Series 1 Preferred Stock has a liquidation preference equal to a minimum Internal Rate of Return of 25%, but cannot exceed three times the investment amount.

Note 6. 2005 Equity Incentive Plan and Stock Based Compensation

The Company’s 2005 Equity Incentive Plan is an equity-based compensation plan to provide incentives, 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”).

At December 31, 2009 all outstanding options were canceled. In connection with the recent restructuring and fund raising a substantial amount of equity was issued. The number of shares authorized to be issued under the plan as approved by the Company’s stockholders on May 11, 2010 is 25,000,000. If an Incentive Award granted pursuant to the 2005 Equity Incentive Plan expires, terminates, 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.

The Company measures the cost of employee service received in exchange for a share based award (stock options and restricted stock) based on the fair value of the award. The Company recognizes stock-based 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.

Stock options

Stock option activity under the Company’s Equity Incentive Plan for the three months ended March 31, 2010 follows:


	Shares		Weighted- Average exercise price per share
Outstanding at December 31, 2009		-	$	-
Granted		1,000,000		0.07
Exercised		-		-
Forfeited/Cancelled/Surrendered		-		-
Outstanding at March 31, 2010		1,000,000	$	0.07

Exercisable at March 31, 2010		250,000	$	0.07

The fair value of the stock options granted under the Company’s Equity Incentive Plan was estimated using the Black-Scholes option pricing model with the following weighted average assumptions:

	March 31,
	2010			2009
Risk - free interest rate		5.0	%		4.0	%
Dividend yield		0.0	%		0.0	%
Expected volatility		70.0	%		85.8	%
Expected life (years)		10.0			6.0
Weighted average grant date fair value	$	0.04		$	0.22
Estimated forfeiture rate (1)		0.0	%		0.0	%

(1) The stock compensation expensed during the quarters ended March 31, 2009 and March 31, 2010 were insignificant, thus the Company forgoed adjusting the expense for estimated forfeitures. The Company will evaluate the expense for future periods for actual forfeitures

The risk-free interest rate is based on 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 do so in the foreseeable-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 table presents additional information regarding outstanding and exercisable options at March 31, 2010.

Outstanding							Exercisable
Exercise Price	Number Outstanding at March 31, 2010		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Number Exercisable at March 31, 2010		Weighted Average Exercise Price
.01 - 2.00		1,000,000	$	0.07		9.60		250,000	$	0.07
		1,000,000	$	0.07		9.60		250,000	$	0.07

As of March 31, 2010 there was $56,000 of total unrecognized compensation cost related to the non-vested option awards under the Equity Incentive Plan that is expected to be recognized over the remaining vesting period of the non-vested option awards.

Restricted Stock

As of March 2010, there was no unvested restricted common stock outstanding.

Stock–based Compensation Expense

Stock-based compensation expense recognized under the Equity Incentive Plan for the three months ended March 31, 2010 and 2009 was as follows:

	(Dollars in Thousands)
	Three Months Ended March 31,
	2010
	2010		2009
Stock Options	$	16	$	30

Note 7. Common Stock warrants and Series A Convertible Preferred Stock

There are no warrants outstanding as of March 31, 2010. All warrants were canceled in December 2009 in conjunction with the debt restructuring described in Note 5.

Series A Convertible Preferred Stock

There are 25,000,000 shares authorized of preferred stock with preferences and rights to be determined by our Board of Directors. In December 2009, as part of a debt restructuring, the Board of Directors approved the issuance of 3,000,000 shares of Series 1 Preferred Stock. At December 31, 2009 there were 2,497,205 shares of Series 1 Preferred Stock issued and outstanding. During the first quarter of 2010 an additional 200,000 shares of Series 1 Preferred Stock were issued for a total of 2,697,205 shares of Series 1 Preferred Stock issued and outstanding at March 31, 2010.

The Series 1 Preferred Stock was issued to the Bridge Note Holders and the 12% debenture holders as part of a debt restructuring during the fourth quarter of 2009. The Bridge Note Holders received 877,511 shares of Series 1 Preferred Stock and forgave all previously issued debt. In addition to the receipt of Series 1 Preferred Stock, the Bridge Note Holders received $700 in cash and received a note for $900 which bears interest at an annual rate of 6%. The Bridge Note Holders also agreed to cancel all their outstanding warrants.

In conjunction with the restructuring, the 12% debenture holders received 119,694 shares of Series 1 Preferred Stock. In addition, they received a note for $822 which bears interest at an annual rate of 6%. The 12% debenture holders received all interest accrued and payable. The 12% debenture holders also agreed to cancel all their outstanding warrants.

The remaining 1,500,000 shares of Series 1 Preferred Stock were sold to accredited investors at $2.50 per share. At December 31, 2009 we had commitments to purchase all 1,500,000 shares. The Company received $2,396 in cash and the remaining $1,354 was recorded as a subscription receivable. All monies were received by February 24, 2010. During the quarter ended March 31, 2010 an additional 200,000 shares of Series 1 Preferred Stock were sold to accredited investors at $2.50 per share. The Series 1 Preferred Stock is convertible into 66.83 shares of common stock per share of Series 1 Preferred Stock. The Series 1 Preferred Stock has a liquidation preference of a minimum Internal Rate of Return of 25% but no more than three times the investment amount.

As part of the debt restructuring, all options issued to employees under the 2005 Equity Incentive Plan were canceled. Employees received no consideration for the cancellations.

The restructuring of the bridge note and 12% debenture was accounted for in accordance with ASC 470-60 – Accounting for Troubled Debt Restructuring, and resulted in a gain being recorded for the difference between the fair market value of the preferred stock issued and the fair value amount of the debt forgiven and warrants surrendered.

Note 8. Long-Term Debt

During the fourth quarter of 2009 the Company entered into a restructuring agreement with the Bridge Note Holders. As part of the restructuring, the Bridge Note Holders received $700 in cash and were issued a $900 note that is due in 24 months. The note bears interest at a 6% annual rate. The note and accrued interest are payable starting 15 months from the closing date. The Bridge Note Holders forgave previously issued debt, canceled all the warrants received and received 877,511 shares of Series 1 Preferred Stock. Per ASC 470-60 – Accounting for Troubled Debt Restructuring a gain was recorded for the difference between the fair market value of the preferred stock issued and the fair value of the debt forgiven and warrants surrendered.

In connection with the debt restructuring, two long term notes for $900 and $822 both of which bear interest at a rate of 6% per annum, were issued by the Company. The $900 note was issued to the Bridge Note Holders and is payable in quarterly installments starting in March, 2011. The $822 note was issued to the 12% debenture holders and is due, along with accrued interest in 24 months. All previously issued debt was forgiven in conjunction with the restructuring agreement.

The revenue and gross profit breakdown based on the Company’s five business segments is as follows:

(The Company does not summarize expenses based on the segments).

	(Dollars in Thousands)
	Three months Ended March 31,
Net Revenue	2010					2009
uBid,com	$	2,089		69.9	%	$	2,686		52.7	%
RedTag.com		359		12.0	%		127		2.5	%
RedTag Live		-		0.0	%		792		15.5	%
Dibu Trading Co.		542		18.1	%		1,489		29.2	%
Commerce Innovations		-		-			-		-
Total	$	2,990		100.0	%	$	5,094		100.0	%

Gross Profit
uBid,com	$	651		87.0	%	$	914		74.4	%
RedTag.com		42		5.6	%		17		1.4	%
RedTag Live		(6	)	(0.8	)%		185		15.1	%
Dibu Trading Co.		61		8.2	%		113		9.2	%
Commerce Innovations		-		-			-		-
Total	$	748		100.0	%	$	1,229		100.0	%

Gross Profit %
uBid,com		31.2	%				34.0	%
RedTag.com		11.7	%				13.4	%
RedTag Live		0.0	%				23.4	%
Dibu Trading Co.		11.3	%				7.6	%
Commerce Innovations		-					-
Total		25.0	%				24.1	%

Note 9. Related Party Transactions

A member of the Company’s Board of Directors has provided inventory financing during the current period. The Board member was paid $18 in interest during the quarter ended March 31, 2010.

Note 10. Going Concern

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, considering we realize the assets and liquidate the liabilities in the normal course of business. As of March 31, 2010 we had accumulated a deficit of approximately $55 million. Over the last twelve years and through the first quarter of 2010, we have incurred losses due to operational problems, capital constraints and a change in our business model. During 2006 and 2007 the Company’s operations were funded by the capital raised during our 2005/2006 private offerings. During 2008 the Company had fully utilized these funds and drew on our bank line of credit. However, after the second quarter of 2008 the Company did not meet the established bank covenants and was required to pay off the outstanding balance. Due to the Company’s recurring losses we could not obtain new bank financing. Instead during 2008, 2009 and 2010 we received financing from our investors to fund our operations through the issuance of various debt instruments. We have also utilized short term financing deals in order to make inventory purchases. During 2009 the Company restructured our financing, reducing our debt from $4.6 million to $1.9 million. We also issued preferred stock, raising approximately $4.2 million. Most of this capital raised was used to pay off our outside vendors therefore we need to either raise additional capital, obtain financing or increase revenue in order for operations to continue. The current credit market remains volatile which affects our ability to raise long-term capital financing and inventory financing needed to run our business. This, coupled with our lack of cash, significantly reduces the Company’s ability to pursue the plans noted below. This creates substantial doubt about our ability to continue as a going concern.

Management’s plans to continue operations consist of the following:

Increase available inventory for sale through establishing an asset based lending credit line (ABL) of approximately $3,000,

Raise additional long term equity capital,

Increase revenues through focused marketing to customers in our robust data base reestablishing our sites as ones that appeal to the diversified demographics of the group,

Increase revenues through the introduction of diversified product lines to serve the asset recovery industry,

Increase revenues by completing the installation of our ERP application allowing us to provide all the requirements necessary for our vendors and Certified Merchants to sell product through us both domestically and globally,

Increase revenues through the introduction of transaction fees and restructuring of CM vendor rate card,

Execute revised business plan under new leadership and expanded board.

As a result of the conditions discussed above, and in accordance with generally accepted accounting principles in the United States, there exists substantial doubt about our ability to continue as a going concern. Our continued operations are contingent on our ability to be successful in implementing the above plans. There is no assurance that we will be successful in these efforts, therefore there is substantial doubt as to our ability to have sufficient cash to meet our operating requirements and continue as a going concern. The accompanying consolidated financial statements do not reflect adjustments relating to the recoverability and classification of assets or liabilities that might result from the outcome of these uncertainties.

Note 11. Subsequent Events

The Company has evaluated subsequent events through the date financial statements were issued.

The annual meeting of stockholders of the Company was held on Tuesday May 11, 2010 in Itasca, Illinois. At the meeting stockholders approved ( i) an amendment to the Certificate of Incorporation to increase the number of authorized shares of Common Stock from 200,000,000 to 300,000,000. ( ii) an increase in the number of shares authorized for issuance under the Company 2005 Equity Incentive Plan from 10,000,000 to 25,000,000 ( iii) the election of four directors and (iv) the ratification of the appointment of BDO Seidman, LLP for the year ending December 31, 2010.

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, 2009. 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, 2009. 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 leading online websites located at www.uBid.com and www.RedTag.com , respectively. The two websites offer high quality excess, new, overstock, close-out, recertified 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 minimize the potential for fraud by certifying all merchants and processing 100% of all transactions between buyers and sellers. Our online properties offer 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 environment 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 properties provide 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 three distinct business channels: Certified Merchant (CM), Managed Supply and Cash Recovery.

We sell merchandise through the CM 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 CM 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. Through the Managed Supply channel, we sell inventory that is consigned to us. The inventory is either stored at our warehouse or at the sellers’. We purchase merchandise outright in the Cash Recovery channel 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. 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 properties are 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.

We conduct live liquidation events at various times throughout the year. Live sales are conducted over a short period of time (usually a week) and all the merchandise is sold locally.

Our current seven proprietary selling solutions within the five operating divisions are:

uBid.com : Our flagship website, which has operated for 12 years. The website allows merchants to sell excess inventory and allows consumers to buy products in an auction price format.

RedTag.co m: Our fixed price internet site offers name brand merchandise with a low shipping and handling fee of only $1.95.

RedTag Live : Our live liquidation group, dedicated to selling through the traditional in-store sales and live liquidation sales.

Dibu Trading Co.: A wholesale inventory liquidation company dedicated to Business-to-Business solutions, providing manufacturers and distributors the ability to sell large quantities of excess inventory. For example, when a retailer needs to liquidate a large quantity of inventory, they contact us to find a buyer that will buy the entire inventory in a single transaction. Our B2B experience allows us to present deals to multiple interested buyers to attain the highest possible recovery for the seller.

Commerce Innovations: A software service company which licenses auction software to third party companies. Companies, businesses and governments can use our platform to sell excess furniture, appliances, autos, and other surplus. This allows them to utilize a trusted platform while reducing live auction costs, as well as an efficient way to reach a wider target audience.

The Company’s current financial results during the first quarter of 2010 as well as results in 2008 and 2009 were negatively impacted by the planned change in the business model and the severe global economic downturn. We have made major changes to our traditional operations as we transition to the new business model.

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 migrating fixed price listings to the RedTag platform based on the new business model. The reduction in the number of unprofitable listings improved our auction success rate and provides efficiencies to both buyers and sellers on our platform.

Executive Commentary

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:

Net Revenue

	2010			2009												2008
	Quarter 1			Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
uBid.com
GMS (in thousands)	$	4,604		$	4,103		$	5,113		$	9,555		$	11,821		$	12,374		$	14,385		$	17,117
Number of Orders (in thousands)		36			43			52			70			81			94			95			97
Average Order Value	$	126		$	95		$	98		$	137		$	145		$	131		$	152		$	176
Visitors to Bidders %		3.2	%		2.5	%		1.8	%		3.3	%		3.1	%		2.9	%		3.3	%		3.6	%
Auctions Closed (in thousands)		441			367			371			373			377			383			215			181
Auction Success Rate		6.6	%		9.1	%		10.0	%		13.0	%		14.4	%		15.0	%		26.6	%		30.9	%

RedTag.com 1
GMS (in thousands)	$	399		$	288		$	386		$	140		$	143		$	474		$	304			-
Number of Orders (in thousands)		4			3			3			2			2			5			3			-
Average Order Value	$	101		$	86		$	122		$	88		$	83		$	96		$	119			-
Visitors to Bidders %		15.0	%		17.0	%		10.4	%		3.5	%		9.6	%		30.2	%		15.1	%		-

(1)	RedTag.com was first launched in August 2008.

(Auctions in these metrics refer to auctions and fixed price listings)

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 CM 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 to Bidder %: 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 include both successful auctions and auctions with no bids.

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

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 and RedTag.com websites, live sales events 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 several vendors. The following vendors accounted for revenues greater than 5% of our total revenues in the three months ended March 2010 and 2009. No other supplier represented more than 5% of our net revenues for any period presented.

	Three Months Ended
	March 31,
Vendor	2010			2009
Always - at - Market		0.8	%		6.5	%
Hewlett Packard Company		35.5	%		42.2	%
Dealtree		9.6	%		0.0	%

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.

Results of Operations (Dollars in Thousands)

Comparison of three months ended March 31, 2010 and 2009

(Dollars in thousands, except per share data and average order value)

The below sets forth certain data from our statement of operations as a percentage of net revenues as well as the increase (decrease) in quarter ended March 2010 as compared to March 2009. 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 March 31,
	2010					2009					Increase (Decrease)
Net Revenues:
uBid.com $		2,089		69.9	%	$	2,686		52.7	%	$	(597	)	(22.2	)%
RedTag.com		359		12.0	%		127		4.2	%		232		182.7	%
RedTag LIVE		-		0.0	%		792		15.5	%		(792	)	(100.0	)%
Dibu Trading Co.		542		18.1	%		1,489		29.2	%		(947	)	(63.6	)%
Total Net Revenues		2,990		100.0	%		5,094		100.0	%		(2,104	)	(41.3	)%

Gross Profit:
uBid.com		651		21.8	%		914		17.9	%		(263	)	(28.8	)%
RedTag.com		42		1.4	%		17		-			25		(147.1	)%
RedTag LIVE		(6	)	(0.2	)%		185		3.6	%		(191	)	(103.2	)%
Dibu Trading Co.		61		2.0	%		113		2.2	%		(52	)	46.0	%
Total Gross Profit		748		25.0	%		1,229		24.1	%		(481	)	(39.1	)%

General and administrative		1,459		48.8	%		2,867		56.3	%		(1,408	)	(49.1	)%
Sales and marketing		144		4.8	%		295		5.8	%		(151	)	(51.2	)%
Total operating expenses		1,603		53.6	%		3,162		62.1	%		(1,559	)	(49.3	)%
Loss from operations		(855	)	(28.6	)%		(1,933	)	(37.9	)%		1,078		(55.8	)%
Interest Expense, net		(121	)	(4.0	)%		(692	)	(13.6	)%		571		82.5	%
Miscellaneous Income		55		1.8	%		(48	)	-			103		(100.0	)%
Net Loss $		(921	)	(30.8	)%	$	(2,673	)	(52.5	)%	$	1,752		(65.5	)%

Revenue

Web Properties: uBid.com and RedTag.com

Net revenue for the web properties decreased $365 or13.0% and gross profit decreased $238 or 25.6% in the quarter ended March 31, 2010 compared to the same period in 2009. Revenues decreased as a result of a decrease in visitors to the site. Visitors to the two web properties decreased 863 or 38.1%. The decrease in the visitors and the resulting revenue decline were due to the lack of capital to promote the sites and to obtain inventory for posting. The decline in revenue was primarily in the direct channel. The Certified Merchant channel also decreased as merchants experienced slower payments and reduced the amount of postings. The inventory at March 31, 2010 increased $785 or 316% over the same period in the prior year as we began to increase inventories with the capital raise that was completed on February 24, 2010.

The gross margin dollars decreased $238 on the lower sales volumes. The gross margin percentage increased to 26.6% from 17.9% as a result of eliminating some of the unprofitable listings and reducing the number of auctions for the reduced number of visitors.

Offline Sales Channels: Dibu Trading Co. and RedTag Live

Net revenue for the offline sales channels decreased approximately 76.2% in the first quarter of 2010 as compared to 2009, which was due to a live liquidation event held in 2009 versus none in 2010. Dibu trading revenues decreased $947 or 63.6% as a result of the liquidity constraints.

Sales, General and Administrative 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. The following is a summary of the SG&A expenses:

	Three months ended
	March 31,
	2010		2009		Increase (Decrease)
Salary and Benefits	$	630	$	1,187	$	(557	)
Advertising		121		205		(84	)
RedTag Live Events		-		362		(362	)
Credit Card Fees		170		281		(111	)
Legal, Audit, Insurance & Regulatory Fees		226		344		(118	)
Consulting and Outside Services		9		136		(127	)
Warehouse		26		187		(161	)
Stock Based Compensation		16		30		(14	)
Telecommucations, Hardware and Storage		128		152		(24	)
Depreciation & Amortization		168		119		49
Other SG&A		24		20		4
Facility Fees		63		63		-
Travel		21		31		(10	)
Dues & Subscriptions		1		45		(44	)

	$	1,603	$	3,162	$	(1,559	)

SG&A expenses decreased $1,559 or 49.30% in the quarter ended March 2010 as compared to the quarter ended March 2009. The primary reason for the decrease in these expenses was the implementations of several cost reduction projects starting in November 2009. The primary categories contributing to the decrease are as follows:

·	Advertising expenses decreased $84 or 40.98% due to the continued elimination of unprofitable and ineffective advertising campaigns.

·	Salary and benefits expenses decreased $557 or 46.93% due to staff reductions and salary reductions. Most senior managers and other managers took pay reductions starting in November 2009 ranging from 10% to over 60%.

·	RedTag Live event expenses decreased $362 or100.0% no live liquidation events were held during the period.

·	Credit card fees decreased $111 or 39.5% due to decreased sales volume at the web properties.

·	Legal, audit, insurance, and other regulatory fees decreased $118 or 34.3% primarily due to fees incurred in the convertible debt issuance in the first quarter of 2009.

·	Consulting and outside services decreased $127 or 93.38% as we continued to eliminate outside services and consulting contracts.

·	Warehouse expense decreased $161 or 86.1% as a result of the lower sales volumes and the move to a multi-use facility that includes a warehouse.

Net Losses

The Company experienced a net loss of $921 or $0.05 per share for the three months ended March 31, 2010 compared to a net loss of $2,673 or $0.14 per share for the three months ended March 31, 2009. Net loss decreased due to lower operating costs resulting from cost reduction measures imposed starting in the fourth quarter of 2009. The first quarter ending March 31, 2010 was the first full quarter with all the cost reductions completed. The delay in closing the capital raise also impacted the loss.

Interest expense

Interest expense decreased $571 due to interest on warrants issued incurred during the three months ended March 31, 2009. All warrants were canceled in 2009 in conjunction with the restructure.

Liquidity and Capital Resources

Net cash used in operating activities for the three months ended March 31, 2010 was $3,165 compared to $1 provided by in the three months ended March 31, 2009. The significant change in net cash provided by operating activities was primarily due to the decrease in accounts payable and accrued expenses of $1,230 and $738 respectively. The increase in inventories of $753 also contributed to the net cash used in operating activities. Cash raised in the financing that closed on February 24, 2010 was used to pay vendors and purchase inventories to impact the sales generated. The improvement in the net loss compared to the same period in the prior year also reduced the net cash required for operating activities.

Net cash used in investing activities was $19 and $72 for the three months ended March 31, 2010 and 2009, respectively. The decrease in net cash used was due to lower capital spending.

Net cash provided by financing activities was $2,252 for the three months ended March 31, 2010, compared to $75 for the same period last year. The increase in cash provided is a result of the sale of preferred stock and increased borrowing to purchase inventories on the flooring facility.

As a result of the tightening credit market (including uncertainties with respect to financial institutions and the global credit markets), extreme volatility in energy costs and other macro-economic challenges currently affecting the economy of the United States and other parts of the world, customers or vendors may experience serious cash flow problems and as a result, may modify, delay or cancel plans to purchase the Company’s products and vendors may significantly and quickly increase their prices or reduce their output. Additionally, if the Company is not successful in securing financing, we may not be able to pay, or may delay payment of, accounts payables owed to our vendors which may adversely affect the Company’s ability to procure additional materials and services needed to meet our customers’ requirements. If the Company is unable to secure long-term financing or capital, the operations will be difficult to continue for the near term. However, there is no assurance that we will be successful in these efforts, which raises substantial doubt as to our ability to continue as a going concern.

In the fourth quarter of 2009 the Company received commitments to purchase 1,700,000 shares of preferred for $3,750 from accredited investors many of which had invested in the previous bridge loan and convertible debentures. The Company raised an additional $500 during the first quarter of 2010. These proceeds were used to pay the October 9, 2009 $500 loan, to restructure the bridge loan and convertible debenture, pay the $700 owed to the bridge loan holders, pay down vendor balances and to fund operations.

Throughout 2009 negotiations with vendors were undertaken and for the most part successfully completed with all creditors to partially settle outstanding balances and or establish extended payment terms.

On March 31, 2010, in conjunction with the issuance of our annual report, our auditors issued a qualified opinion which raised substantial doubt about our ability to continue as a going concern. Management’s plans to alleviate this condition consist of, but are not limited to the following:

Increase available inventory for sale through establishing an asset based lending credit line (ABL) of approximately $3,000,

Raise additional long term equity capital,

Increase revenues through focused marketing to customers in our robust data base reestablishing our sites as ones that appeal to the diversified demographics of the group,

Increase revenues through the introduction of diversified product lines to serve the asset recovery industry,

Increase revenues through the introduction of transaction fees and restructuring of CM vendor rate card,

Execute revised business plan under new leadership and expanded board.

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 the Company’s 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

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recently completed fiscal quarter. Based on that evaluation, our principal executive officer and principal financial officer concluded that there has not been any change in our internal control over financial reporting during that quarter that ended March 31, 2010 has materially affected, or is reasonably likely to materially affect, our 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 its business or financial condition.

ITEM 1A. RISK FACTORS

As a result of the tightening credit market (including uncertainties with respect to financial institutions and the global credit markets), increases in energy costs and other macro-economic challenges currently affecting the economy of the United States and other parts of the world, customers and vendors may experience serious cash flow problems and as a result, may modify, delay or cancel plans to purchase the Company’s products and vendors may significantly and quickly increase their prices or reduce their output. Additionally, if the Company is not successful in securing financing, when and as needed, we may not be able to pay, or may delay payment of, accounts payables owed to our vendors which may adversely affect the Company’s ability to procure additional materials and services needed to meet our customer’s requirements. If economic conditions in the United States and other key parts of the world deteriorate further or do not show improvement, the Company may experience material adverse impacts to its business and operating results.

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, 2009, 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 March 31, 2010, options to purchase an aggregate of 1,000,000 shares of the Company’s common stock were granted to an individual who became the Chief Executive Officer of Enable Holdings, Inc. The options have a term of ten years and vest over a four year period annually beginning 25% on the date of grant and 25% over the next three anniversaries of the date of grant.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

There are no events of default as of March 31, 2010.

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

The Company did not submit any matters to a vote of its security holders during the three months ended March 31, 2010.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

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 May 14, 2010.


	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)

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