Lilis Energy 10Q 2009 Q2 Quarterly report

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 quarterly period ended July 31, 2009

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

For the transition period from ______to______.

Universal Holdings, Inc.

(Exact name of registrant as specified in Charter)

NEVADA		333-152571
(State or other jurisdiction of incorporation or organization)		(Commission File No.)		(IRS Employee Identification No.)

PO Box 8851, Rocky Mount, NC 27804

(Address of Principal Executive Offices)

_______________

(252) 407-7782

(Issuer Telephone number)

_______________

(Former Name or Former Address if Changed Since Last Report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such 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 shorter period that the registrant was required to submit and post such files).

Yes ¨No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. 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 Rule 12b-2 of the Exchange Act.

Yes x No o

State the number of shares outstanding of each of the issuer’s classes of common equity, as of September 2, 2009: 7,099,000 shares of Common Stock.

Universal Holdings, Inc.

FORM 10-Q

July 31, 2009

INDEX

PART I-- FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4T.	Control and Procedures	15

PART II-- OTHER INFORMATION

Item 1	Legal Proceedings	16
Item 1A	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits and Reports on Form 8-K	16

SIGNATURE

Item 1. Financial Information

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

CONTENTS



PAGE	1	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JULY 31, 2009 (UNAUDITED) AND APRIL 30, 2009

PAGE	2	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2009 AND 2008, AND FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO JULY 31, 2009 (UNAUDITED)

PAGE	3	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY(DEFICIENCY) FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO JULY 31, 2009 (UNAUDITED)

	4	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JULY 31, 2009 AND 2008, AND FOR THE PERIOD FROM AUGUST 31, 2007 (INCEPTION) TO JULY 31, 2009 (UNAUDITED)

PAGE	5-11	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Universal Holdings, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Balance Sheets




ASSETS
	July 31, 2009			April 30, 2009
	(Unaudited)

Current Assets
Cash	$	140		$	1,049

Total Assets	$	140		$	1,049

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities
Accounts payable	$	12,646		$	1,550
Total Liabilities		12,646			1,550

Commitments and Contingencies


Stockholders' Equity (Deficiency)
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, none issued and		-			-
outstanding
Common stock, $0.0001 par value; 100,000,000 shares authorized, 7,099,000
issued and outstanding, respectively		710			710
Additional paid-in capital		217,640			216,340
Deficit accumulated during the development stage		(230,856	)		(217,551	)
Total Stockholders' Equity (Deficiency)		(12,506	)		(501	)

Total Liabilities and Stockholders' Equity (Deficiency)	$	140		$	1,049

See accompanying notes to condensed consolidated unaudited financial statements

Universal Holdings, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)


							For the period from
							August 31, 2007
	For the Three Months			For the Three Months			(inception) to
	Ended July 31, 2009			Ended July 31, 2008			July 31, 2009

Revenue	$	-		$	-		$	-

Cost of Revenue		-			-			30,000

Gross Loss		-			-			(30,000	)

Operating Expenses
Professional fees	$	10,342		$	33,503		$	118,708
Loss on Impairment	$	-		$	-			55,831
General and administrative		2,963			3,293			26,317
Total Operating Expenses		13,305			36,796			200,856

LOSS FROM OPERATIONS BEFORE INCOME TAXES		(13,305	)		(36,796	)		(230,856	)

Provision for Income Taxes		-			-			-

NET LOSS	$	(13,305	)	$	(36,796	)	$	(230,856	)

Net Loss Per Share - Basic and Diluted	$	(0.00	)	$	(0.01	)

Weighted average number of shares outstanding
during the year/period - Basic and Diluted		7,099,000			7,084,714

See accompanying notes to condensed consolidated unaudited financial statements

Universal Holdings, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
For the Period from August 31, 2007 (Inception) to July 31, 2009
(Unaudited)



												Deficit
	Preferred stock				Common stock				Additional			accumulated during			Total
									paid-in			development			Stockholder's
	Shares		Amount		Shares		Amount		capital			stage			Equity (Deficiency)

Balance August 31, 2007		-	$	-		-	$	-	$	-		$	-		$	-

Common stock issued for services to founder ($0.0001/Sh)		-		-		4,000,000		400		-			-			400

Common stock issued for cash to founder ($0.0001/Sh)		-		-		1,000,000		100		-			-			100

Common stock issued for cash ($0.10/Sh)		-		-		1,999,000		200		199,700			-			199,900

In kind contribution of services		-		-		-		-		3,500			-			3,500

Net loss for the period August 31, 2007 (inception) to April 30, 2008		-		-		-		-		-			(16,562	)		(16,562	)

Balance, April 30, 2008		-		-		6,999,000		700		203,200			(16,562	)		187,338

Common stock issued for cash ($0.10/Sh)		-		-		100,000		10		9,990			-			10,000

In kind contribution of services		-		-		-		-		5,200			-			5,200

Stock offering costs		-		-		-		-		(2,050	)		-			(2,050	)

Net loss, for the year ended April 30, 2009		-		-		-		-		-			(200,989	)		(200,989	)

Balance, April 30, 2009		-		-		7,099,000		710		216,340			(217,551	)		(501	)

In kind contribution of services										1,300						1,300

Net loss, for the period ended July 31, 2009													(13,305	)		(13,305	)

Balance, July 31, 2009 (Unaudited)		-	$	-		7,099,000	$	710	$	217,640		$	(230,856	)	$	(12,506	)

See accompanying notes to condensed consolidated unaudited financial statements

Universal Holdings, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
(Unaudited)




	For the Three Months			For the Three Months			For the Period From August 31, 2007
	Ended July 31, 2009			Ended July 31, 2008			(Inception) to July 31, 2009


Cash Flows Used In Operating Activities:
Net Loss	$	(13,305	)	$	(36,796	)	$	(230,856	)
Adjustments to reconcile net loss to net cash used in operations
Common stock issued for services		-			-			400
Reserve for impairment		-			-			30,000
In-kind contribution of services		1,300			1,300			10,000
Amortization expense		-			1,387			4,169
Loss on impairment		-			-			55,831
Changes in operating assets and liabilities:
Increase in inventory		-			(30,000	)		(30,000	)
Increase/(Decrease) in accounts payable and accrued expenses		11,096			(8,564	)		12,646
Net Cash Used In Operating Activities		(909	)		(72,673	)		(147,810	)

Cash Flows From Investing Activities:
Payment for intellectual property rights		-			-			(60,000	)
Net Cash Used In Investing Activities		-			-			(60,000	)

Cash Flows From Financing Activities:
Net proceeds from issuance of common stock		-			7,950			207,950
Net Cash Provided by Financing Activities		-			7,950			207,950

Net Increase/(Decrease) in Cash		(909	)		(64,723	)		140

Cash at Beginning of Year/Period		1,049			139,838			-

Cash at End of Year/Period	$	140		$	75,115		$	140

Supplemental disclosure of cash flow information:

Cash paid for interest	$	-		$	-		$	-
Cash paid for taxes	$	-		$	-		$	-

See accompanying notes to condensed consolidated unaudited financial statements

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

(A) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

It is management's opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

Activities during the development stage include developing the business plan and raising capital.

Universal Holdings, Inc. and Subsidiary (a development stage company) (the "Company") was incorporated under the laws of the State of Nevada on August 31, 2007. Universal Holdings, Inc. is planning to manufacture, import, market and distribute a patented automotive maintenance and repair mechanism known as the Turn-Key Tool TM. Activities during the development stage include developing the business plan and raising capital.

(B) Principles of Consolidation

The accompanying 2009 condensed consolidated financial statements include the accounts of Universal Holdings, Inc. from August 31, 2007 (inception) and its 100% owned subsidiary Universal Product Marketing, Inc. All inter-company accounts have been eliminated in the consolidation (See Note 4(C)).

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

(D) Cash and Cash Equivalents

The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At July 31, 2009 and April 30 2009, the Company had no cash equivalents.

(E) Inventory

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. As of July 31, 2009 and April 30, 2009, finished goods inventory is $0 and $0, respectively. Provision for potentially obsolete or slow moving inventory is made based on management's analysis of inventory levels and future sales forecasts. For the year ended April 30, 2009, the Company recorded an inventory impairment of $30,000.

(F) Long Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

In accordance with Statement of Financial Statements (“SFAS”) No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”, the Company carries long-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.

There were no impairment losses recorded during the period ended July 31, 2009.

(G) Intangible Assets

In accordance with Statement of Financial Accounting Standards, or SFAS, No. 142, Goodwill and Other Intangible Assets, requires that intangible assets with a finite life are amortized over its life and requires that goodwill and intangible assets be reviewed for impairment annually, or more frequently if impairment indicators arise. During the year ended April 30, 2009, the Company recognized an impairment loss of $55,831. This impairment loss was included as a component of operating expenses. There were no impairment charges taken during the period ended July 31, 2009.

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

(H) Loss Per Share

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by Financial Accounting Standards No. 128, “Earnings Per Share.” As of July 31, 2009 and April 30, 2009 there were no common share equivalents outstanding.

(I) Income Taxes

The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(J) Business Segments

The Company operates in one segment and therefore segment information is not presented.

(K) Revenue Recognition

The Company will recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the product is delivered and collectibility of the resulting receivable is reasonably assured.

(L) Recent Accounting Pronouncements

In May 2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 sets forth (1) The period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) The circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) The disclosures that an entity should make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. The adoption of this statement did not have a material effect on the Company’s financial statements.

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

In June 2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). SFAS 166 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. SFAS 166 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 166 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”). SFAS 167 improves financial reporting by enterprises involved with variable interest entities and to address (1) the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”, as a result of the elimination of the qualifying special-purpose entity concept in SFAS 166 and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. SFAS 167 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of SFAS 167 will have on its financial statements.

In June 2009, the FASB issued SFAS No. 168 “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162”. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. The Codification is not expected to have a significant impact on the Company’s financial statements.

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

NOTE 2

GOING CONCERN

As reflected in the accompanying financial statements, the Company is in the development stage with no operations and has a net loss since inception of $230,856 and used cash in operations of $147,810 for the period from August 31, 2007 (inception) to July 31, 2009. In addition, the Company has a working capital deficiency and stockholders’ deficiency of $12,506 as of July 31, 2009. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

NOTE 3

INTANGIBLE ASSETS

Intangible assets consist of a patent for the turn key tools:

	July 31, 2009			April 30, 2009

Patent	$	60,000		$	60,000
Less accumulated amortization		(4,169	)		(4,169	)
Less impairment loss		(55,831	)		(55,831	)
Net	$	-		$	-

The patent was acquired on March 17, 2008 at which point the patent had a remaining life of approximately 16 years. Amortization expense of $0 and $935 was recorded for the period ended July 31, 2009 and 2008, respectively.

NOTE 4

STOCKHOLDERS’ EQUITY

(A) Common Stock Issued for Cash

For the year ended April 30, 2009, the Company issued 100,000 shares of common stock for $10,000 ($0.10/share) and paid offering costs of $2,050 for total net proceeds of $7,950.

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

For the period from August 31, 2007 (inception) through April 30, 2008, the Company issued 1,999,000 shares of common stock for $199,900 ($0.10/share).

On September 14, 2007, the Company issued 1,000,000 founder shares of common stock for $100 ($0.0001/share) (See Note 5).

(B) In-Kind Contribution of Services

For the period ended July 31, 2009, the shareholder of the Company contributed services having a fair value of $1,300 (See Note 5).

For the year ended April 30, 2009, the shareholder of the Company contributed services having a fair value of $5,200 (See Note 5).

For the year ended April 30, 2008, the shareholder of the Company contributed services having a fair value of $3,500. (See Note 5)

On September 13, 2007, Universal Holdings, Inc. consummated an agreement with Universal Product Marketing, Inc., pursuant to which Universal Product Marketing, Inc. exchanged all of its members’ interest for 4,000,000 shares or approximately 100% of the common stock of Universal Holdings, Inc. The Company has accounted for the transaction as a combination of entities under common control and accordingly, recorded the merger at historical cost.

NOTE 5

RELATED PARTY TRANSACTIONS

For the period ended July 31, 2009, the shareholder of the Company contributed services having a fair value of $1,300 (See Note 5).

For the year ended April 30, 2009 the shareholder of the Company contributed services having a fair value of $5,200 (See Note 4(B)).

For the year ended April 30, 2008 the shareholder of the Company contributed services having a fair value of $3,500 (See Note 4(B)).

On September 14, 2007, the Company issued 1,000,000 founder shares of common stock for $100 ($0.0001/share) (See Note 4(A)).

UNIVERSAL HOLDINGS, INC. AND SUBSIDIARY

(A DEVELOPMENT STAGE COMPANY)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JULY 31, 2009

(UNAUDITED)

NOTE 6

COMMITMENT

On April 14, 2008 the Company entered into a consulting agreement which provides for administrative and other miscellaneous services. The Company is required to pay $5,000 a month beginning May 1, 2008. This agreement was terminated on February 28, 2009. There are no amounts owed to the consultant as of July 31, 2009.

NOTE 7

SUBSEQUENT EVENT

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through September 2, 2009, the date the financial statements were issued.

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

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

Plan of Operation

We have begun limited operations, and we require outside capital to implement our business model.

1. We believe we can begin to implement our business plan to prioritize the 7 market initiatives.

2. All business functions will be coordinated and managed by the founder of our company and consultants to the founder, including facilitating distribution contracts, organizing the 7 selling initiatives and assisting in targeted marketing implementation.

3. We intend to support these marketing by the development of high-quality marketing materials; a wide spread public relations and advertising program and an attractive and informative trade and consumer friendly Web site, www.Turnkeytool.com.

4. Within 120 days of the initiation of its distribution and marketing campaign, we believe that we will begin to generate expanded revenues from its targeted distribution approach.

Our goal is to commence generating sales revenues from our new product distribution and sales programs by the end of the fiscal year.

We are still pursuing this plan but to date we have not been able to raise additional funds through either debt or equity offerings, without additional cash we will not be able to pursue our plan of operations and will not be able to begin generating revenue. We believe that we may not be able to raise the necessary funds to continue to pursue our business operations. As a result of the foregoing, we have recently begun to explore our options regarding the development of a new business plan and direction. We are currently engaged in discussions with a company regarding the possibility of a reverse merger involving our company. At this stage, no definitive terms have been agreed to and neither party is currently bound to proceed with the merger.

Limited Operating History

We have generated no independent financial history and have not previously demonstrated that we will be able to expand our business through an increased investment in increased production and/ or marketing efforts. We cannot guarantee that the expansion efforts described in this quarterly report will be successful. The business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of the product and/or our distribution and sales methods.

Future financing may not be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue expanding its operations. Equity financing will result in a dilution to existing shareholders.

Results of Operations

Because we did not generate any revenue, our net revenue stayed the same at $0 for the six months ended July 31, 2009 as compared to the six months ended July 31, 2008.

Liquidity and Capital Resources

As of July 31, 2009, we had $140 in cash.

We believe we cannot satisfy our cash requirements for the next twelve months with our current cash. If we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations. We are still pursuing this plan but, to date, we have not been able to raise additional funds through either debt or equity offerings. Without additional cash we will be unable to pursue our plan of operations and begin generating revenue. As a result, we have recently begun to explore our options regarding the development of a new business plan and direction. We are currently engaged in discussions with a company regarding the possibility of a reverse merger involving our company. At this stage, no definitive terms have been agreed to and neither party is currently bound to proceed with the merger.

We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

Our significant accounting policies are summarized in Note 1 of our financial statements.

We have adopted the following accounting standards. While all of these significant accounting policies impact our financial condition, our views of these policies are critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report:

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. Provision for potentially obsolete or slow moving inventory is made based on management's analysis of inventory levels and future sales forecasts.

In accordance with Statement of Financial Statements (“SFAS”) No. 144, “Accounting forImpairment or Disposal of Long-Lived Assets”, the Company carries long-lived assets at the lower of the carrying amount or fair value. Impairment is evaluated by estimating future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flow is less than the carrying amount of the assets, an impairment loss is recognized. Fair value, for purposes of calculating impairment, is measured based on estimated future cash flows, discounted at a market rate of interest.

The Company will recognize revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition”. In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the product is delivered and collectability of the resulting receivable is reasonably assured.

Recent Accounting Pronouncements

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required for smaller reporting companies.

Item 4T. Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Chief Financial Officer carried out this evaluation.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Currently we are not aware of any litigation pending or threatened by or against the Company.

Item 1A. Risk Factors.

Not applicable for smaller reporting companies.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None

Item 6. Exhibits and Reports of Form 8-K.

(a) Exhibits

31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002

(b) Reports of Form 8-K

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Universal Holdings, Inc.

Date: September 4, 2009	By:	/s/ Lanny M. Roof
		Lanny M. Roof
		CPA/CEO, President and Treasurer


	By:	/s/ Judith Lee
		Judith Lee
		Secretary

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Lilis Energy (LLEX) 10-Q2009 Q2 Quarterly report

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