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, 2001
[ ] 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.)
5009 Indian Gulch Road, Catheys Valley CA 95306
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(Address of principal executive offices)
(209) 374-3485
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(Issuer's telephone number)
DEERBROOK PUBLISHING GROUP, INC.,
12919 S.W. Freeway, Suite 170, Stafford, Texas
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(Former name, former address and former fiscal year, if changed since last
report)
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: 1,919,422 Common Shares $0.001 par
value as of December 31, 2001
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC.
AND SUBSIDIARIES)
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED):
BALANCE SHEETS AS OF DECEMBER 31, 2001 (UNAUDITED)
AND SEPTEMBER 30, 2001 (AUDITED)
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED DECEMBER 31, 2001 AND 2000 (UNAUDITED)
STATEMENTS OF CASH FLOWS FOR THREE MONTHS
ENDED DECEMBER 31, 2001 AND 2000 (UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
VOLT INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 (UNAUDITED) AND SEPTEMBER 30, 2001
ASSETS
(Unaudited)
December 31, September 30,
2001 2001
------------ -------------
Current Assets:
Cash and cash equivalents $ 26,686 $ 85,792
Prepaid expenses and other assets 2,800 2,800
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Total Current Assets 29,486 88,592
Property and equipment,net 5,722,799 5,724,399
Other Assets:
Notes receivable 154,500 71,000
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Total Assets $5,906,785 $5,883,991
=========== ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 2001 (UNAUDITED) AND SEPTEMBER 30, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited)
December 31, September 30,
2001 2001
----------------------------------
Current Liabilities:
Accounts payable $ 38,500 $ 43,500
----------------------------------
Total Current Liabilities 38,500 43,500
Commitments and Contingencies
Stockholders' Equity (Deficit):
Preferred Stock, $.001 par value 10,000,000
shares authorized, 1,000,000 shares
issued and outstanding at December 31,
2001 (Unaudited) and September 30, 2001,
respectively 1,000 1,000
Common Stock - $.001 par value; 2,500,000
shares authorized; 1,919,422 and
1,694,422 shares issued and outstanding
at December 31, 2001(unaudited) and
September 31, 2001, respectively 1,919 1,694
Additional paid-in capital 9,780,619 9,780,844
Accumulated deficit (3,915,253) (3,943,047)
------------------------------------
Total stockholders' equity 5,868,285 5,840,491
------------------------------------
Total Liabilities and Stockholders' Equity $5,906,785 $5,883,991
====================================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
--------------- ---------------
Revenues $ 34,500 $ -
Cost of Revenue - -
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Gross Profit (Loss) 34,500 -
Other (Expenses)
General and administrative costs (6,706) (13,852)
Impairment of intangible asset - (778)
Loss on disposal of assets - (7,845)
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LOSS FROM CONTINUIING OPERATIONS
BEFORE INCOME TAXES AND LOSS FROM
DISCONTINUED OPERATIONS 27,794 (22,475)
Income taxes - -
Loss form discontinued operations - (2,235)
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NET LOSS AVAILABLE TO COMMON
STOCKHOLDERS $27,794 $(24,710)
============== ==============
BASIS AND DILUTED EARNINGS PER SHARE:
Loss from continuing operations
available to common stockholders $ 0.02 $ (0.01)
Loss from discontinued operations - -
Extraordinary item - -
-------------- ---------------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ 0.02 $ (0.01)
============== ===============
WEIGHTED NUMBER OF COMMON SHARES
OUTSTANDING 1,844,422 9,490,548
============== ===============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC AND SUBSIDIARIES)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
2001 2000
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Net loss $ 27,794 $ (24,710)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 1,600 -
Loss on disposal of assets - 7,845
Non cash interest expense - 778
Discontinued operations - 2,235
Changes in assets and liabilities
Prepaid expenses and other - 45,193
Accounts payable (5,000) -
Other liabilities - (31,492)
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Total adjustments (3,400) 24,559
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Net cash provided by (used in)
operating activities 24,394 (151)
CASH FLOWS FROM FINANCING ACTIVITIES
Stockholders advance (83,500) -
Proceeds from debt - -
Proceeds from issuance of common stock
and warrants - -
---------------------------------
Net cash provided by financing
activities (83,500) -
---------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (59,106) (151)
CASH AND CASH EQUIVALENTS - BEGINNING OF
YEAR 85,792 596
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CASH AND CASH EQUIVALENTS - END OF YEAR $ 26,686 $ 445
==================================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION
The condensed consolidated unaudited interim financial statements included
herein have been prepared, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. The consolidated financial statements
and notes are presented as permitted on Form 10-QSB and do not contain
information included in the Company's annual consolidated statements and notes.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. The results for the
three months ended December 31, 2001 may not be indicative of the results for
the entire year.
These statements reflect all adjustments, consisting of normal recurring
adjustments which, in the opinion of management, are necessary for fair
presentation of the information contained herein.
Volt, Inc., formerly Deerbrook Publishing Group, Inc. and Subsidiaries is a
power provider and marketer of alternative energy and back-up power systems. The
Company is in the initial stages of implementing its business plan.
Deerbrook Publishing Group, Inc. was a distributor of fine arts. Effective March
31, 2001, Deerbrook Publishing Group, Inc. entered into an agreement to spin off
its subsidiaries; Inter Arts, Inc. and Cimmaron Studios, Inc. On April 23, 2001,
the Company effected a 1 for 100 reverse stock split for its $.001 par value
common stock. Upon this spin off, the name was officially changed to Volt, Inc.
when 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.
In the Company's fiscal third quarter of 2001, two inactive wholly-owned
subsidiaries, Sun Volt, Inc. and Sun Electronics, Inc. were incorporated. The
other wholly-owned subsidiary is Arcadian Renewable Power, Inc. This subsidiary
is the corporation that holds the Altamont Wind Farm in the Altamont Pass in
Livermore, California.
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The unaudited condensed consolidated balance sheet as of December 31, 2001 and
the audited condensed consolidated balance sheet as of September 30, 2001 and
unaudited statements of operations, and cash flows for the three months ended
December 31, 2001 includes Volt, Inc. and its wholly-owned subsidiaries, Sun
Volt, Inc., Sun Electronics, Inc. and Arcadian Renewable Power, Inc.
The unaudited statements of operations, and cash flows for the three months
ended December 31, 2000 include Deerbrook Publishing Group, Inc., and its
wholly-owned subsidiaries, Signature Editions, Inc., Inter Arts, Incorporated,
and Cimmaron Studios, Inc.
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 consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
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.
Office and Computer 5 years
Furniture and Fixtures 7 years
Wind Farm 40 years
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
Volt, Inc. had no revenues for the year ended September 30, 2001. For the first
quarter ended December 31, 2001, the Company sold merchandise and revenue was
recorded under the accrual method of accounting.
Advertising
Advertising costs are typically expensed as incurred.
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, and accounts payable approximate fair
value because of the immediate or short-term maturity of these financial
instruments.
Earnings (Loss) Per Share of Common Stock
Historical net income (loss) 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. Common
stock equivalents were not included in the computation of diluted earnings
per share when the Company reported a loss because to do so would be
antidilutive for periods presented.
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings (Loss) Per Share of Common Stock (Continued)
The following is a reconciliation of the computation for basic and diluted EPS:
December 31, December 31,
2001 2000
Net income (loss) $ 27,794 ($24,710)
Weighted- average common shares
Outstanding (Basic) 1,844,422 9,490,548
Weighted-average common stock
Equivalents:
Stock options - -
Warrants - -
Weighted-average common shares
Outstanding (Diluted) 1,844,422 9,490,548
Options and warrants outstanding to purchase stock were not included in the
computation of diluted EPS because inclusion would have been antidilutive.
Reclassifications
Certain amounts for the three months ended December 31, 2000 have been
reclassified to conform with the presentation of the December 31, 2001 amounts.
The reclassifications have no effect on net income for the three months ended
December 31, 2000.
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 3- NOTES RECEIVABLE
The Company, at September 30, 2001, had notes receivable outstanding of $71,000.
There was no interest due the Company on these loans, and the amounts due at
September 30, 2001, are deemed by management to have no specific repayment
terms. As of December 31, 2001, notes receivable was $154,500.
NOTE 4- COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement in April, 2001 in Pleasanton,
California. The Company pays $2,800 per month for rent. This lease was
terminated by the Company in October, 2001, and all operations now run through
the Cathey's Valley, California location.
NOTE 5- STOCKHOLDERS' EQUITY
Common and Preferred Stock
Effective April 23, 2001, the Registrant effected a 1 for 100 reverse stock
split for its common stock, $.001 par value per share.
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 Compan's issued and outstanding common stock. Mr.
Tseklenis paid the Company $255,000 for the common stock.
The Company also issued 1,000,000 shares of preferred stock to Denis C.
Tseklenis in consideration for the Wind Farm.
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 issued as a
share exchange with American Powerhouse.
VOLT, INC. AND SUBSIDIARIES
(FORMERLY DEERBROOK PUBLISHING GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DECEMBER 31, 2001 AND 2000
NOTE 6- LITIGATION
At September 30, 2000, Inter Arts, Inc. was involved in litigation with Copelco
Capital, Inc. ("Copelco") the lessor of silk screens. Copelco brought suit
against the company to recover its damages for the return of the leased
equipment. Inter Arts filed a motion to dismiss presenting defenses of improper
value and insufficiency of service of process and alternatively for change of
venue. In April, 2001 upon the recapitalization by Volt, Inc., the subsidiary,
Inter Arts was not part of the transaction. Management, with the advice of legal
counsel, has written off the liability.
NOTE 7- PENDING ACQUISITIONS, MERGERS AND BUSINESS COMBINATIONS
The Company is currently negotiating and concluding its due diligence with
Wolverine Power Corporation, which owns hydroelectric plants in Michigan.
Wolverine has long-term power sales contracts to Consumers Electric Corp., a
NYSE company. Revenue approximating $1,000,000 annually will be realized by the
Company when and if the transaction is completed.
A non-circumvention and non-disclosure agreement has been signed with an
existing independent electricity supplier with over 100,000 retail customers
located in the United States. Negotiations between the parties are continuing.
The Company has completed a joint venture and partnership with Opportunity
Knocks, Inc., during the second quarter of 2002 to rehab HUD and other
properties in Washington, D.C., Maryland and Virginia under the HUD gift
program.
Item 2. Management's Discussion and Analysis or Plan of Operation.
The Company is continuing to diversify its core business of power generation
through acquisition while it redevelops the Altamonte Wind Power facility.
Current strategy remains to acquire profitable projects with long-term revenue
and minimal downside risk. Mmnagement expects to complete some of these
transactions during the second quarter of 2002 and also plans to announce a full
board of directors and officers in the same period.
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. The range of possible loss should not exceed $100,000. The
outcome of this litigation is unascertainable at this time.
Inter Arts filed a motion to dismiss presenting defenses of improper
value and insufficiency of service of process and alternatively for change of
venue. In April, 2001 upon the recapitalization by Volt, Inc., the subsidiary,
Inter Arts was not part of the transaction. Management, with the advice of legal
counsel, has written off the liability.
Item 2. Changes in Securities.
Effective April 23, 2001, the Registrant effected a 1 for 100 reverse stock
split for its common stock, $.001 par value per share.
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 Compan's issued and outstanding common stock. Mr.
Tseklenis paid the Company $255,000 for the common stock.
The Company also issued 1,000,000 shares of preferred stock to Denis C.
Tseklenis in consideration for the Wind Farm.
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 issued as a
share exchange with American Powerhouse.
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 on Form 8-K.
INDEX TO EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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 21, 2002 /s/ Denis C. Tseklenis
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Denis C. Tseklenis, Sole Director