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 June 30, 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 Employer Identification No.)
or organization) (IRS
P.O. Box 116, Catheys Valley CA 95306
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(Address of principal executive offices)
(209) 374-3485
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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 June 30, 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
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED):
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2002 (UNAUDITED)
AND SEPTEMBER 30, 2001 (AUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE AND
THREE MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR NINE MONTHS
ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
VOLT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2002 (UNAUDITED) AND SEPTEMBER 30, 2001
ASSETS
(Unaudited) (Audited)
--------------------------------------------- ----------------- ----------------
June 30, September 30
2002 2001
---- ----
CURRENT ASSETS
Cash and cash equivalents $ 6,572 $ 85,792
Commissions receivable 50,000 -
Prepaid expenses and other assets 2,800 2,800
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TOTAL CURRENT ASSETS 59,372 88,592
PROPERTY AND EQUIPMENT - Net 5,751,047 5,724,399
OTHER ASSETS
Goodwill 1,500,000 -
Deferred financing fees, net of amortization 7,500 -
Loans receivable 154,500 71,000
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TOTAL ASSETS $ 7,472,419 $ 5,883,991
============= ==============
See accompanying notes to condensed
consolidated financial statements.
VOLT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30 2002 (UNAUDITED) AND SEPTEMBER 30, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited) (Audited)
June 30 September 30,
2002 2001
---- ----
CURRENT LIABILITIES
Accounts payable $ 26,649 $ 43,500
----------------- ------------------
TOTAL CURRENT LIABILITIES 26,649 43,500
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 10,000,000
shares authorized; 1,000,000 shares and -0-
shares issued and outstanding at June 30,
2002 and September 30, 2001 respectively 1,000 1,000
Common stock, $.001 par value 25,000,000
shares authorized; 3,919,422 shares
and 1,694,442 issued and outstanding at
June 30, 2002 and September 30, 2001
respectively 3,919 1.694
Additional paid-in capital 11,278,619 9,780,844
Accumulated deficit (3,837,768) (3,943,047)
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Total stockholders' equity 7,445,770 5,840,491
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,472,419 $ 5,883,991
============ =============
See accompanying notes to condensed
consolidated financial statements.
VOLT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 2002 AND 2001
(UNAUDITED) (UNAUDITED)
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
2002 2001 2002 2001
------------ -------------- ---------------
REVENUE $359,111 $ - $ 317,711 $ -
COST OF REVENUE 112,065 - 112,065 -
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GROSS PROFIT 247,046 - 205,646 -
OTHER EXPENSES
General and administrative 157,767 124,161 138,665 75,179
Interest expense - 5,934 - 5,156
Loss on disposal of assets - 7,845 - -
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INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 87,279 (137,940) 66,981 (80,335)
Income taxes - - - -
LOSS FROM DISCONTINUED OEPRATIONS - (2,235) - -
EXTRAORDINARY ITEM
Reveersal of debt and payables 18,000 379,476 - 116,876
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NET INCOME 105,279 239,301 66,981 36,541
Dividends - (167,435) - -
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NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 105,279 $ 71,866 $66,981 $ 36,541
======== ======== ======= =======
BASIC AND DILUTED EARNINGS PER SHARE:
Income from continuing operations
available to common stockholders 0.04 (0.14) 0.02 (0.08)
Extraordinary item 0.01 0.40 - 0.12
---- ---- ---- ----
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 0.05 $0.26 $ 0.02 $ 0.04
========= ===== ======= ======
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 2,219,422 952,411 2,919,422 952,411
========= ======= ========= =========
See accompanying notes to condensed
consolidated financial statements.
VOLT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001
NINE MONTHS ENDED
JUNE 30
2002 2001
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CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $ 105,279 $ 239,301
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation 6,293 1,732
Loss on disposal of assets - 7,845
Inventory distributed as dividend - (112,246)
Common stock issued for acquisition
costs, services, payables and accrued
payroll - 278,000
Non cash interest expense - 5,934
Change in net assets of discontinued
operations - (42,645)
Discontinued operations - 44,880
Reversal of debt and payables (18,000) (116,876)
Changes in assets and liabilities:
Prepaid expenses and other - 41,000
Commissions receivable (50,000) -
Inventory - 107,571
Accounts payable 1,149 (68,694)
Accrued payroll - (513,647)
Other liabilities - (31,492)
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Total adjustments (60,558) (398,638)
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Net cash provided by (used in)
operating activities 44,721 (159,337)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (30,441) (40,300)
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Net cash used by investing activities (30,441) (40,300)
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See accompanying notes to condensed
consolidated financial statements.
VOLT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED JUNE 30, 2002 AND 2001
NINE MONTHS ENDED
JUNE 30
2002 2001
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CASH FLOWS FROM FINANCING
ACTIVITIES:
Stockholders advance (83,500) (71,000)
Deferred financing fees (10,000) -
Proceeds from issuance of common stock - 280,808
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Net cash provided by financing activities (93,500) 209,808
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NET CHANGE IN CASH AND CASH EQUIVALENTS (79,220) 10,171
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 85,792 596
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CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 6,572 $ 10,767
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NON CASH INVESTING AND FINANCING
ACTIVITIES
Common stock issued for the acquisition of
First Washington $1,500,000 $ -
============ ============
See accompanying notes to condensed
consolidated financial statements.
VOLT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2002 AND 2001
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
nine and three months ended June 30, 2002 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., 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.
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.
On May 17, 2002, the Company acquired First Washington
Financial Corporation, a mortgage company in Bethesda,
Maryland ("First Washington"). First Washington, is a mortgage
company thats 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.
In the Company's fiscal third quarter of 2001, two inactive
wholly-owned subsidiaries, Sun Volt, Inc. and Sun Electronics,
Inc. were incorporated. Another 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
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The unaudited condensed consolidated balance sheet as of June
30, 2002, and unaudited statements of operations for the nine
and three months ended June 30, 2002, and unaudited cash flows
for the nine months ended June 30, 2002 includes Volt, Inc.
and its wholly-owned subsidiaries, First Washington, Sun Volt,
Inc., Sun Electronics, Inc. and Arcadian Renewable Power, Inc.
The unaudited condensed consolidated statements of operations
for the nine months ended June 30, 2001, and cash flows for
the nine months ended June 30, 2001 also include the
wholly-owned subsidiaries of Deerbrook Publishing Group, Inc.,
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
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
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
June 30, 2002 is $7,500.
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.
VOLT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 2002 AND 2001
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:
June 30, June 30,
2002 2001
---- -----
Net income $ 105,279 $ 71,866
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Weighted- average common
shares Outstanding (Basic) 2,219,422 952,411
Weighted-average common
stock Equivalents:
Stock options - -
Warrants - -
Weighted-average common
shares Outstanding (Diluted) 2,219,422 952,411
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 June 30, 2002, there are no
adjustments of goodwill due to impairment.
Reclassifications
Certain amounts for the nine and three months ended June 30,
2001 have been reclassified to conform with the presentation
of the June 30, 2002 amounts. The reclassifications have no
effect on net income for the nine and three months ended June
30, 2001.
VOLT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 3- NOTES RECEIVABLE
As of June 30, 2002, notes receivable were $154,500 . There
was no interest due the Company on these loans, and the
amounts due at June 30, 2002, are deemed by management to have
no specific repayment terms.
NOTE 4- 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 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
Company'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 $366,711.
Prior to the initial acquisition by Denis C. Tseklenis, the
Company had issued 1,850,000 shares of common stock for
accrued payroll, accounts payable and services.
During the quarter ended December 31, 2001, 225,000 shares
were issued as a share exchange With American Powerhouse.
On May 17, 2002, the Company issued 2,000,000 shares of
restricted common stock to acquire First Washington and thus
it became a wholly-owned subsidiary. The shares were valued at
a sixty percent discount of the Company's fair value at the
time of the transaction ($.75 per share) or $1,500,000.
VOLT, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 2002 AND 2001
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 Power Corporation
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.
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.
Item 2. Management Discussion and Analysis or Plan of Operation
The company is continuing its focus on the mortgage and real estate segment of
the business because that is where it believes it will experience the most
growth and profit potential at this time in the current market. Our mortgage
subsidiary, First Washington Financial Corporation (FWF) is currently licensed
in 18 states. We are undergoing the normal regulatory review, and through our
banking affiliates, expect to be licensed in 50 states by the end of our fiscal
year, which is September 30th. This will allow us to substantially increase the
number of loans we can book per month. The economic indicators for FHA and first
time homebuyers which we concentrate on show strong demand now and for the
foreseeable future. Because the First Washington acquisition occurred on May
17th we could only book one half (1/2) of the quarter's revenue and earnings.
Fourth quarter business is growing and we expect it to continue to grow into the
next fiscal year and beyond. The energy division remains slow and we do not plan
to continue construction on the new wind facilities or incur any debt until the
political climate in California clears and we know the long term power contracts
will be secure. The real estate and construction rehab business through our
Opportunity Knocks subsidiary should show strong growth through strategic
alliances and partnerships which we feel will benefit earnings with a positive
impact both short and long term. Updates on the progress of the company can be
found on our website: www.voltinc.com.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
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.
Item 2. Changes in Securities.
On May 17, 2002, the Company issued 2,000,000 shares of restricted common stock
to acquire First Washington and thus it became a wholly-owned subsidiary. The
shares were valued at a sixty percent discount of the Company's fair value at
the time of the transaction ($.75 per share) or $1,500,000.
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
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NONE
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 August 20, 2002
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Denis Costa Tseklenis, Sole Director