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, 2008. 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, 2008. 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. 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 but not limited to, computer products, consumer electronics, apparel, housewares, watches, jewelry, travel, sporting goods, automobiles, 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%-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 products through our online marketplace to consumers and businesses. 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.

In the first quarter of 2008, the Company began transforming its business model from a seller marketplace to an asset recovery solution. Asset recovery is a rapidly growing industry with revenues of $38.5 billion in 2004 and is expected to climb to over $63.1 billion in 2009, according to D.F. Blumberg Associates Inc., a logistics research and consulting firm.

We began changing our business model in the first quarter of 2008 and continued implementing those changes through the end of 2008. The seven proprietary selling solutions within the five operating divisions are:

· uBid.com: Our flagship website, which has operated for 11 years. The website allows merchants to sell excess inventory and allows consumers to buy products in an auction as well as fixed price format.

· RedTag.com: Our fixed price internet site launched in August 2008 and 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 achieve the most profitable transaction.

· 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.

Our financial results in 2008 and the first half of 2009 were negatively impacted by the planned change in the business model and the severe global economic downturn. To achieve the objective of becoming the leading excess inventory provider, we made significant investments in increased staffing levels and information technology infrastructure, specifically in the first nine months of 2008. We also made major changes to our traditional operations as we transition to the new business model.

As part of the transition to a new business model, we significantly reduced our marketing spending while realigning the marketing and advertising resources to better position them to each new operating division. We also made the strategic decision to eliminate outside advertisement on our website. Historically advertisement sales have added a revenue stream but have negatively impacted overall sales by redirecting visitor traffic from our website to competing websites.

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. We significantly decreased the number of listings, eliminating the unprofitable listings, while preparing to migrate fixed price listings to the RedTag platform based on the new business model. The 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:

                                          2009                                  2008                                   2007
                                     Q2           Q1           Q4           Q3           Q2           Q1           Q4           Q3
uBid.com
GMS (in Thousands)                $ 9,555     $ 11,821     $ 12,374     $ 14,385     $ 17,117     $ 16,671     $ 21,765     $ 22,731
Number of orders (in thousands)        70           81           94           95           97           95          115          129
Average Order Value               $   137     $    145     $    131     $    152     $    176     $    175     $    188     $    177
Visitors to Bidders Percentage        3.3 %        3.1 %        2.9 %        3.3 %        3.6 %        4.1 %        3.1 %        2.7 %
Auctions Closed (in Thousands)        373          377          383          215          181          455          780          715
Auction Success rate                 13.0 %       14.4 %       15.0 %       26.6 %       30.9 %       12.9 %        8.6 %       10.9 %

RedTag.com
GMS (in Thousands)                $   140     $    143     $    474     $    304     $      -     $      -     $      -     $      -
Number of orders (in thousands)         2            2            5            3            -            -            -            -
Average Order Value               $    88     $     83     $     96     $    119     $      -     $      -     $      -     $      -
Visitors to Bidders Percentage        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 six months ended June 2009 and 2008. No other supplier represented more than 5% of our net revenues for any period presented.

                            Three months ended          Six months ended
                                 June 30,                   June 30,
Vendor                      2009           2008         2009          2008
Hewlett Packard Company        42.2 %        38.7 %        42.1 %      39.5 %
Always-at-Market                6.5 %         6.7 %         6.4 %       6.9 %

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 June 30, 2009 and 2008
(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 June 2009 as compared to June 2008. This information should be read in conjunction with our financial statements and notes thereto included elsewhere in this report.

                                                       (Dollars in Thousands)
                                                    Three months ended June 30,
                                 2009                         2008                   Increase (Decrease)
Net Revenues:
uBid.com                $   1,579          53.0 %    $   5,889          69.9 %    $    (4,310 )        (73.2 %)
RedTag.com                    119           4.0 %            -             -              119          100.0 %
RedTag LIVE                    11           0.4 %            -             -               11          100.0 %
Dibu Trading Co.            1,270          42.6 %        2,537          30.1 %         (1,267 )        (49.9 %)
Total Net Revenues          2,979         100.0 %        8,426         100.0 %         (5,447 )        (64.6 %)

Gross Profit:

uBid.com                      887          29.8 %        1,028          12.2 %           (141 )        (13.7 %)
RedTag.com                     17           0.6 %            -             -               17          100.0 %
RedTag LIVE                     2           0.1 %            -             -                2          100.0 %
Dibu Trading Co.              139           4.7 %          286           3.4 %           (147 )        (51.4 %)
Total Gross Profit          1,045          35.1 %        1,314          15.6 %           (269 )        (20.5 %)

General and
administrative              2,857          95.9 %        3,418          40.6 %           (561 )        (16.4 %)
Sales and marketing           293           9.8 %          799           9.5 %           (506 )        (63.3 %)
Total operating
expenses                    3,150         105.7 %        4,217          50.0 %         (1,067 )        (25.3 %)
Loss from operations       (2,105 )       (70.7 %)      (2,903 )       (34.5 %)           798          (27.5 %)
Interest Expense, net        (537 )       (18.0 %)         (74 )        (0.9 %)          (463 )        625.7 %
Miscellaneous Income          (22 )        (0.7 %)           -             -              (22 )            -
Loss on financial
instruments                  (356 )       (12.0 %)           -             -             (356 )            -
Net Loss                $  (3,020 )      (101.4 %)   $  (2,977 )       (35.3 %)   $       (43 )          1.4 %

Revenue

Web Properties: uBid.com and RedTag.com

Net revenue decreased 73.2% and gross profit decreased 13.7% in the quarter ended June 30, 2009 compared to the same period in 2008. The decreased revenue was primarily attributable to capital constraints impacting the Company's ability to purchase inventory for sale. Inventory available for website sales decreased 88% to $246 at June 30, 2009 compared to $2,084 at June 30, 2008. The liquidity constraints were the primary factor causing a decrease in the number of orders to 70 in the three months ended June 30, 2009 compared to 97 in the three months ended June 30, 2008. Reduced product offerings due to inventory availability during the three months ended June 2009 resulted in a decrease in the number of visitors which negatively impacted the average order value, visitor to bidder ratio and auctions closed. The Company launched a fixed price online property (RedTag.com) in August 2008 which added $127 in revenue for the three months ended June 2009.

The Company also made the strategic decision to eliminate outside advertising on its website. In the past, the Company sold advertising space on its website to various companies. Although this strategy added a revenue stream, it impacted sales on the Company's website since it directed visitors away to competing websites. As a result of the elimination of advertisement revenues, visitors spent more time shopping on the Company's website, as evidenced by the increase in auction success rate. The advertising revenues were $11 and $28 for the three months ended June 30, 2009 and 2008, respectively, and are included with uBid.com revenues in the above table.

Offline Sales Channels: Dibu Trading Co. and RedTag Live

Net revenue for the offline sales channels decreased approximately 50% in the second quarter of 2009 as compared to 2008, which was due to the winding down of the live store location opened in the first quarter of 2008.

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:

                                                               (Dollars in Thousands)
                                                             Three Months Ended June 30,
                                                                                      Increase
SG&A Expenses:                                          2009            2008         (Decrease)
Advertising                                          $      230       $     478     $       (248 )
Salary and benefits                                       1,189           1,604             (415 )
RedTag Live Event                                            99             298             (199 )
Stock-based compensation                                     69             114              (45 )
Facilities                                                   98              73               25
Warehouse                                                   128             201              (73 )
Credit card fees                                            258             392             (134 )
Telecommunications, hardware and storage                    187             177               10
Legal, audit, insurance, and other regulatory fees          554             379              175
Depreciation & amortization                                 159             103               56
Consulting and outside services                              98             261             (163 )
Travel                                                       38              57              (19 )
Dues & Subscriptions                                         18              31              (13 )
Other SG&A                                                   25              49              (24 )

                                                     $    3,150       $   4,217     $     (1,067 )

SGA expenses decreased $1,067 or 25.3% in the quarter ended June 2009 as compared to the quarter ended June 2008. The primary reason for the decrease in these expenses was the company-wide transition to an asset recovery model. The primary categories contributing to the decrease are as follows:

· Advertising expenses decreased $248 or 51.9% due to the elimination of unprofitable and ineffective advertising campaigns, as previously described.

· Salary and benefits expenses decreased $415 or 25.8% due to staff reductions.

· RedTag Live event expenses decreased $199 or 66.8% as a result of closing the outlet store in Florida. Staff for current events is temporary and not kept on the payroll while future events are being planned.

· Credit card fees decreased $134 or 34.1% due to the decrease in sales volume at the web properties.

· Legal, audit, insurance, and other regulatory fees increased $175 or 46% primarily due to fees incurred in the convertible debt issuance.

· Consulting and outside services decreased $163 or 62.4% as we eliminated outside services related to market research and analysis that were engaged in 2008.

Net Losses

The Company experienced a net loss of $3,020 or $0.16 per share for the three months ended June 30, 2009 compared to a net loss of $2,977 or $0.16 per share for the three months ended June 30, 2008. Net loss increased due to the aforementioned change in the business model and the capital constraints resulting in an increase in interest expense. The interest expense related to the amortization of bridge loan amortization is $356 and $0 for the three months ended June 2009 and 2008, respectively.

Comparison of six months ended June 30, 2009 and 2008
(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 the six months ended June 2009 as compared to June 2008. This information should be read in conjunction with our financial statements and notes thereto included elsewhere in this report.

                                                      (Dollars in Thousands)
                                                     Six months ended June 30,
                                 2009                         2008                   Increase (Decrease)
Net Revenues:
uBid.com                $   4,264          52.8 %    $  10,626          68.3 %    $    (6,362 )       (59.9 %)
RedTag.com                    246           3.0 %            -             -              246
RedTag LIVE                   803           9.9 %            -             -              803
Dibu Trading Co.            2,760          34.2 %        4,750          30.5 %         (1,990 )       (41.9 %)
Other                           -             -            191             -             (191 )       100.0 %
Total Net Revenues          8,073         100.0 %       15,567         100.0 %         (7,494 )       (48.1 %)


Gross Profit:

uBid.com                    1,801          22.3 %        2,322          14.9 %           (521 )       (22.4 %)
RedTag.com                     34           0.4 %            -             -               34
RedTag LIVE                   187           2.3 %            -             -              187
Dibu Trading Co.              252           3.1 %          673           4.3 %           (421 )       (62.6 %)
Other                           -             -            191             -             (191 )       100.0 %
Total Gross Profit          2,274          28.2 %        3,186          20.5 %           (912 )       (28.6 %)

General and
administrative              5,724          70.9 %        7,171          46.1 %         (1,447 )       (20.2 %)
Sales and marketing           588           7.3 %        1,294           8.3 %           (706 )       (54.6 %)
Total operating
expenses                    6,312          78.2 %        8,465          54.4 %         (2,153 )       (25.4 %)
Loss from operations       (4,038 )       (50.0 %)      (5,279 )       (33.9 %)         1,241         (23.5 %)
Interest Income /
(Expense), net             (1,229 )       (15.2 %)         (83 )        (0.5 %)        (1,146 )      1380.7 %
Loss on warrant
liability                    (426 )        (5.3 %)           -             -             (426 )       100.0 %
Net Loss                $  (5,693 )      (70.52 %)   $  (5,362 )       (34.4 %)   $      (331 )         6.2 %

Revenue

Web Properties: uBid.com and RedTag.com

Net revenue decreased 59.9% and gross profit decreased 22.4% in the quarter ended June 30, 2009 compared to the same period in 2008. The decreased revenue was primarily attributable to capital constraints impacting the Company's ability to purchase inventory for sale. The liquidity constraints were the primary factor causing a decrease in the number of orders to 151 in the six months ended June 30, 2009 compared to 192 in the six months ended June 30, 2008. The Company launched a fixed price online property (RedTag.com) in August 2008 which added $246 in revenue for the six months ended June 2009.

Offline Sales Channels: Dibu Trading Co. and RedTag Live

Net revenue for the offline sales channels decreased 41.9% in the six months ended June 30, 2009 as compared to 2008. The lower inventories in the offline channels resulted in lower revenues. The addition of RedTag live format in late 2008 offset this decrease.

Sales, General and Administrative Expenses
. . .