UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _________________
Commission file number 0-28555
VOLT INC.
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(Exact name of small business issuer as specified in its charter)
NEVADA 86-0960464
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(State or other jurisdiction of incorporation or organization) (IRS
Employer Identification No.)
41667 Yosemite Pines Drive, Oakhurst, CA 93644
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(Address of principal executive offices)
(559) 692-3485
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(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 3,919,422 Common Shares $0.001 par
value as of December 31, 2002
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
VOLT, INC. AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED):
BALANCE SHEETS AS OF DECEMBER 31, 2002 (UNAUDITED)
AND SEPTEMBER 30, 2002 (AUDITED)
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
STATEMENTS OF CASH FLOWS FOR THREE MONTHS
ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 (UNAUDITED) AND SEPTEMBER 30, 2002 (AUDITED)
ASSETS
(Unaudited) (Audited)
December 31, September 30,
2002 2002
------------ -------------
Current Assets:
Cash and cash equivalents $ 264,874 $172,521
------------ -------------
Total Current Assets 264,874 172,521
Property and equipment,net 5,752,196 5,756,339
Other Assets:
Goodwill 3,000,000 3,000,000
Deferred financing fees, net 2,500 5,000
Advances receivable 204,000 204,000
----------- -------------
Total Other Assets 3,206,500 3,209,000
----------- -------------
Total Assets $9,223,570 $9,138,460
=========== ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 2002 (UNAUDITED) AND SEPTEMBER 30, 2002 (AUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) (Audited)
December 31, September 30,
2002 2002
----------------------------------
Current Liabilities:
Accounts payable $ 14,949 $ 36,949
----------------------------------
Total Current Liabilities 14,949 36,949
Commitments and Contingencies
Stockholders' Equity (Deficit):
Series One Voting Convertible Preferred
Stock, $.001 par value 10,000,000
shares authorized, at December 31,2002
and September 30, 2002, repectively, and
1,000,000 shares issued and outstanding
at December 31, 2002 and September 30,
2002, respectively 1,000 1,000
Common Stock - $.001 par value; 25,000,000
shares authorized at December 31, 2002
and September 30, 2002, respectively and
3,919,422 shares issued and outstanding
at December 31, 2002 and September 30,
2002, respectively 3,919 3,919
Additional paid-in capital 12,803,619 12,778,619
Accumulated deficit (3,599,917) (3,682,027)
------------------------------------
Total stockholders' equity 9,208,621 9,101,511
------------------------------------
Total Liabilities and Stockholders' Equity $9,223,570 $9,138,640
====================================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
--------------- ---------------
Revenues $ 543,966 $ 34,500
Cost of Revenue 221,810 -
--------------- ---------------
Gross Profit (Loss) 322,156 34,500
Other (Expenses)
General and administrative costs 240,046 6,706
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Total operating expenses 240,046 6,706
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LOSS FROM CONTINUIING OPERATIONS
BEFORE INCOME TAXES 82,110 27,794
Income taxes - -
-------------- --------------
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $82,110 $ 27,794
============== ==============
BASIS AND DILUTED EARNINGS PER SHARE:
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 0.02 $ 0.02
============== ===============
WEIGHTED NUMBER OF COMMON SHARES
OUTSTANDING 3,919,422 1,844,422
============== ===============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
----------------------------------
Net income $ 82,110 $ 27,794
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization 7,243 1,600
Changes in assets and liabilities
Accounts payable (22,000) (5,000)
---------------------------------
Total adjustments (14,757) (3,400)
---------------------------------
Net cash provided by
operating activities 67,353 24,394
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions of equity 25,000 -
Advances receivable - other - (83,500)
---------------------------------
Net cash provided by (used in)
financing activities 25,000 (83,500)
---------------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 92,353 (59,106)
CASH AND CASH EQUIVALENTS - BEGINNING OF
YEAR 172,521 85,792
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CASH AND CASH EQUIVALENTS - END OF YEAR $ 264,874 $ 26,686
==================================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION
Volt Inc. and Subsidiaries is a power provider and marketer of
alternative energy and financial services. The Company is in
the initial stages of implementing its business plan.
On April 25, 2001, Denis C. Tseklenis acquired 127,995 shares
of the Company's common stock, $.001 par value per share,
which constituted approximately 53% of the Company's issued
and outstanding common stock for $255,000.
On May 17, 2002, the Company acquired First Washington
Financial Corporation, a company which provides financial
services in Bethesda, Maryland ("First Washington"). First
Washington, is a mortgage company whose emphasis lies in
residential mortgages in the greater Washington D.C. service
area. First Washington was acquired for 2,000,000 shares of
the Company's common stock.
The Company has completed the acquisition of Opportunity
Knocks, Inc. during the third fiscal quarter of 2002 to rehab
HUD homes and other properties in Washington, D.C., Maryland
and Virginia under the HUD Gift Program. This acquisition was
done simultaneously with the acquisition of First Washington.
The Company has two other power related wholly-owned
subsidiaries, Sun Volt, Inc. and Sun Electronics, Inc. besides
Arcadian Renewable Power, Inc. Arcadian Renewable Power, Inc.
is the corporation that holds the Altamont Wind Farm in the
Altamont Pass in Livermore, California.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated balance sheets for December 31,
2002 and 2001 and condensed consolidated statements of
operations, changes in stockholders' equity and cash flows for
the three months then ended includes Volt Inc. and its wholly-
owned subsidiaries, Sun Volt, Inc., Sun Electronics, Inc.,
Arcadian Renewable Power, Inc., First Washington and
Opportunity Knocks.
Intercompany transactions and balances have been eliminated in
consolidation.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America, requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and
other short-term investments with an initial maturity of three
months or less to be cash or cash equivalents.
The Company maintains cash and cash equivalent balances at
several financial institutions which are insured by the
Federal Deposit Insurance Corporation up to $100,000.
Property and Equipment
Property and equipment are stated at cost. Depreciation is
computed primarily using the straight-line method over the
estimated useful life of the assets.
Furniture and fixtures 7 years
Office and computer equipment 3-5 years
Wind Farm 40 years
Revenue Recognition
The Company sold merchandise and revenue was recorded under
the accrual method of accounting.
First Washington records commission income upon the closing of
their respective transactions.
Advertising
Advertising costs are typically expensed as incurred.
Advertising expense was approximately $-0- and $830 for the
three months ended December 31, 2002 and 2001, respectively.
Income Taxes
The income tax benefit is computed on the pretax loss based on
the current tax law. Deferred income taxes are recognized for
the tax consequences in future years of differences between
the tax basis of assets and liabilities and their financial
reporting amounts at each year-end based on enacted tax laws
and statutory tax rates.
Fair Value of Financial Instruments
The carrying amount reported in the consolidated balance
sheets for cash and cash equivalents, notes receivable,
accounts payable and accrued expenses approximate fair value
because of the immediate or short-term maturity of these
financial instruments.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings Per Share of Common Stock
Historical net income per common share is computed using the
weighted average number of common shares outstanding. Diluted
earnings per share (EPS) includes additional dilution from
common stock equivalents, such as stock issuable pursuant to
the exercise of stock options and warrants.
The following is a reconciliation of the computation for basic
and diluted EPS:
2002 2001
---- ----
Net income $82,110 $27,794
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Weighted- average common shares
Outstanding (Basic) 3,919,422 1,844,422
Weighted-average common stock Equivalents:
Stock options - -
Warrants - -
Weighted-average common shares
Outstanding (Diluted) 3,919,422 1,844,422
Deferred Financing Fees
The Company paid a $10,000 financing fee in connection with a
line of credit in April 2002. This fee will be written off
over a one-year period of time. The unamortized balance at
December 31, 2002 is $2,500.
Goodwill
In June 2001, the FASB issued Statement No. 142 "Goodwill and
Other Intangible Assets". This Statement addresses financial
accounting and reporting for acquired goodwill and other
intangible assets and supersedes APB Opinion No. 17,
Intangible Assets. It addresses how intangible assets that are
acquired individually or with a group of other assets (but not
those acquired in a business combination) should be accounted
for in financial statements upon their acquisition. This
Statement also addresses how goodwill and other intangible
assets should be accounted for after they have been initially
recognized in the financial statements. This statement has
been considered when determining impairment of goodwill in
certain transactions. As of December 31, 2002, there are no
adjustments of goodwill due to impairment.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain amounts for the three months ended December 31, 2001
have been reclassified to conform with the presentation of the
December 31, 2002 amounts. The reclassifications have no
effect on net income for the three months ended December 31,
2001.
NOTE 3- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at December
31, 2002:
Wind Farm $5,700,000
Furniture and fixtures 3,000
Computer and office equipment 67,417
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5,770,417
Less: accumulated depreciation 18,221
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Net book value $5,752,196
==========
Depreciation expense for the three months ended December 31,
2002 and 2001 was $4,743 and $1,600, respectively. There is no
depreciation recognized on the Wind Farm in 2002 or 2001 as it
is non operational until placed in service.
NOTE 4- ADVANCES RECEIVABLE
As of December 31, 2002, notes receivable were $204,000. There
was no interest due the Company on these loans, and the
amounts due at December 31, 2002, are deemed by management to
have no specific repayment terms.
NOTE 5- COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement in April 2001 in
Pleasanton, California. The Company paid $2,800 per month for
rent. This lease was terminated by the Company in October
2001, and all operations now run through the Oakhurst,
California location. The security deposit was expensed as part
of a rent payment in 2002.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002 AND 2001
NOTE 6- STOCKHOLDERS' EQUITY
Common and Preferred Stock
The Company issued 1,000,000 shares of preferred stock to
Denis C. Tseklenis in consideration for the Wind Farm. This
preferred stock is convertible by the preferred stockholders
at their discretion and they will receive 5 shares of common
stock for each share of preferred stock.
On April 25, 2001, Denis C. Tseklenis acquired 127,995
original issue shares of the Company's common stock, $.001 par
value per share, which constituted approximately 53% of the
Company's issued and outstanding common stock. Mr. Tseklenis
paid the Company $255,000 for the common stock.
During the year ended September 30, 2001, in addition to the
initial acquisition by Denis C. Tseklenis, the Company had
issued 1,678,000 shares and cancelled 225,000 of common stock
for $366,711.
Prior to the initial acquisition by Denis C. Tseklenis, the
Company had issued 1,850,000 shares of common stock for
accrued payroll, accounts payable and services.
During the quarter ended December 31, 2001, 225,000 shares
were reissued that were cancelled from the prior year ended
September 30, 2001.
On May 17, 2002, the Company issued 2,000,000 shares of common
stock to acquire First Washington and thus it became a
wholly-owned subsidiary. The shares were valued at a fair
value at the time of the transaction ($1.50 per share) or
$3,000,000.
NOTE 7- LITIGATION
In September of 1999, the Deerbrook Publishing Group, Inc.
("Deerbrook") leased a computer driven aspect image center
(printer for film) used to make separation for printing (the
"aspect image center") and certain other computer equipment
from Copelco Capital, Inc. ("Copelco"). All of the equipment
was delivered to the Deerbrook's then printing operation in
Phoenix, Airzona, and installed. Shortly thereafter, Deerbrook
ceased printing for itself and its customers. The equipment
was returned to Copelco. In August of 2000, Copelco brought
suit in the United States District Court for the District of
Arizona, cause no. CIV '00-1620 PHX ROS, to recover its
alleged damages $155,398 for Deerbrook's return of the leased
equipment plus continuing interest at the rate of one and
one-third percent per month and attorneys fees and costs. The
Company does not believe that Copelco has mitigated its
damages and further believes that Copelco has either sold the
equipment or otherwise disposed of same in a manner which was
not commercially reasonable. The Copelco claims will be
vigorously defended against. Any possible loss from this
litigation will be less than one percent (1%) of the Company's
net assets and will be immaterial. Since the change in control
of the Company on April 6, 2001, there have been no legal
proceedings brought against Volt.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2002 AND 2001
NOTE 8- PROVISION FOR INCOME TAXES
Deferred income taxes will be determined using the liability
method for the temporary differences between the financial
reporting basis and income tax basis of the Company's assets
and liabilities. Deferred income taxes will be measured based
on the tax rates expected to be in effect when the temporary
differences are included in the Company's consolidated tax
return. Deferred tax assets and liabilities are recognized
based on anticipated future tax consequences attributable to
differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
At December 31, 2002 and 2001, deferred tax assets consist of
the following:
2002 2001
---- -----
Net operating loss carryforwards $165,889 $ 257,670
Less: valuation allowance (165,889) (257,670)
---------- ---------
$ -0- $ -0-
========== ===========
At December 31, 2002 and September 30, 2002, the Company had
federal net operating loss carryforwards in the approximate
amounts of $414,723 and $496,833, respectively, available to
offset future taxable income. The Company established
valuation allowances equal to the full amount of the deferred
tax assets due to the uncertainty of the utilization of the
operating losses in future periods.
NOTE 9- NOTE PAYABLE - BANK
In November 2002, the Corporation closed on a line of credit
with a bank in the amount of $750,000. The loan proceeds will
be used to commence the operations of Opportunity Knocks. As
of December 31, 2002, the Company had $10,000 outstanding.
PART II - - OTHER INFORMATION
Item 1. Legal Proceedings.
In September of 1999, the Deerbrook Publishing Group, Inc. ("Deerbrook") leased
a computer driven aspect image center (printer for film) used to make separation
for printing (the "aspect image center") and certain other computer equipment
from Copelco Capital, Inc. ("Copelco"). All of the equipment was delivered to
the Deerbrook's then printing operation in Phoenix, Arizona, and installed.
Shortly thereafter, Deerbrook ceased printing for itself and its customers. The
equipment was returned to Copelco. In August of 2000, Copelco brought suit in
the United States District Court for the District of Arizona, cause no. CIV
`00-1620 PHX ROS, to recover its alleged damages $155,398.02 for Deerbrook's
return of the leased equipment plus continuing interest at the rate of one and
one-third percent per month and attorneys fees and costs. The Company does not
believe that Copelco has mitigated its damages and further believes that Copelco
has either sold the equipment or otherwise disposed of the same in a manner
which was not commercially reasonable. The Copelco claims will be vigorously
defended against. Any possible loss from this litigation will be less than one
percent (1%) of the Company's net assets and will be immaterial.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Controls and Procedures
Within 90 days prior to the filing of this Quarterly Report on Form 10-Q, the
chief executive officer of the Company evaluated the effectiveness of the
Company's disclosure controls and procedures and have concluded that the
Company's controls and procedures are effective in timely alerting them to
material information required to be disclosed in the reports that are filed or
submitted under the Securities and Exchange Act of 1934. There have been no
significant changes in internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation.
Item 5. Other Information.
NONE
Item 6. Exhibits and Reports on Form 8-K.
INDEX TO EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
99.3 Certifications Required Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VOLT INC.
(Registrant)
Date February 20, 2003 /s/ Denis C. Tseklenis
----------------------------------
Denis C. Tseklenis, Sole Director
CERTIFICATION
I, Denis C. Tseklenis, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Volt Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and I have:
(a)......designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this annual report is being prepared;
(b)......evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
(c)......presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent function):
(a)......all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. I have indicated in this annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: February 20, 2003
/s/Denis C. Tseklenis
Denis C. Tseklenis
Chief Executive Officer