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 March 31, 2004
[ ] 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 (IRS
incorporation or organization) Employer Identification No.)
41667 Yosemite Pines Dr., Oakhurst CA 93644
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(Address of principal executive offices)
(559) 692-2474
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(Issuer's telephone number)
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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: 4,919,422 Common Shares $0.001 par
value as of March 31, 2004
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Item 310(b) of Regulation S-B is attached hereto as
Exhibit One.
Item 2. Management's Discussion and Analysis or Plan of Operation.
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND
NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, AND THE COMPANY'S ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET AND ECONOMIC
CONDITIONS.
RESULTS OF CONTINUING OPERATIONS
The Company generated $1,212,216 of revenue, $541,624 of gross profit, $172,564
of net earnings from continuing operations, and $0.04 in earnings per
weighted-average common share from continuing operations for the six months
ended March 31, 2004.
For total operations, net income for the six months ended March 31, 2004, was
$172,564 or $0.04 in earnings per weighted-average common share with 4,669,422
weighted average common shares outstanding compared with net income of $136,731
or $0.03 in earnings per weighted-average common share with 3,919,422 weighted
average common shares outstanding for the six months ended March 31, 2003.
Six Months Ended
March 31
2004 2003
Revenue $1,212,216 $1,762,777
Cost of Revenue 670,592 982,336
--------- ---------
Gross profit 541,624 780,441
Operating Expenses 369,060 643,710
--------- ---------
Income from
continuing operations $ 172,564 $ 136,731
========== ==========
Gross profit margin 45% 44%
Earnings per share
of common stock $ 0.04 $ 0.03
The Company generated $600,044 of revenue, $300,508 of gross profit, $137,331 of
net earnings from continuing operations and $0.03 in earnings per
weighted-average common share from continuing operations for the three months
ended March 31, 2004.
For total operations, net income for the three months ended March 31, 2004, was
$137,331 or $0.03 in earnings per weighted-average common share with 4,919,422
weighted average common shares outstanding compared with net income of $54,621
or $0.01 in earnings per weighted-average common with 3,919,422 weighted average
common shares outstanding for the three months ended March 31, 2003.
Three Months Ended
March 31
2004 2003
Revenue $600,044 $1,218,811
Cost of Revenue 299,536 760,526
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Gross profit 300,508 458,285
Operating Expenses 163,177 403,644
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Income from
continuing operations $137,331 $ 54,621
======== =========
Gross profit margin 50% 38%
Earnings per share
of common stock $ 0.03 $ 0.01
Revenue for the six months ended March 31, 2004, decreased $550,561 from the
same period last year. Cost of revenue for the six months ended March 31, 2004,
decreased $311,744 from the same period last year. Operating expenses for the
six months ended March 31, 2004, decreased $274,650 from the same period last
year. Income from continuing operations for the six months ended March 31, 2004,
increased $35,833 from the same period last year.
Revenue for the three months ended March 31, 2004, decreased $618,767 from the
same period last year. Cost of revenue for the three months ended March 31,
2004, decreased $460,990 from the same period last year. Operating expenses for
the three months ended March 31, 2004, decreased $240,467 from the same period
last year. Income from continuing operations for the three months ended March
31, 2004, increased $82,710 from the same period last year.
Earnings per weighted-average common share was $0.04 for the six months ended
March 31, 2004 based on weighted-average common shares outstanding of 4,669,422,
and earnings per weighted average common share was $0.03 for the six months
ended March 31, 2003, based on per weighted-average common shares outstanding of
3,919,422.
Earnings per weighted-average common share was $0.03 for the three months ended
March 31, 2004, based on weighted-average common shares outstanding of
4,919,422, and earnings per weighted-average common share was $0.01 for the
three months ended March 31, 2003 based upon weighted-average common shares
outstanding of 3,919,422.
The Company attributes the decrease in Cost of Revenue and Operating Expenses
and the corresponding increase Income From Continuing Operations for the periods
reflected to the consolidation of the Company's mortgage business in the Central
Valley of California where the Company's senior management is located.
The company has consolidated its mortgage business to the Central California
Valley where senior management is located and is also focusing on real estate
development in this fast growing area and has several projects in the
development and due diligence phase. The energy side of the business is
currently processing several deals as well and expects to complete both
company's pending transaction by year end.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
There are no pending or threatened legal proceedings against the Company or any
of its subsidiaries.
Item 2. Changes in Securities.
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders.
NONE
Item 5. Other Information.
During the year ended September 30, 2003, the Company closed in escrow on the
purchase of Wolverine Power Corporation, a Michigan hydroelectric facility.
However, the escrow conditions were not satisfied and therefore the escrow was
terminated and the purchase of the hydroelectric facility was not consummated.
The Company is still in the due diligence phase of the purchase of the Franklin
Hydro facility located in Malone New York.
The Company's purchase of Tract #4 of the Fiatt Coal Mine in Fulton County,
Illinois is in escrow subject to the satisfaction of certain contingencies by
the seller. There can be no guarantee that the contingencies will be satisfied
or that the closing of the purchase will be finalized. The purchase of
additional coal tracts pursuant to existing options is contingent upon
satisfaction of the escrow by the seller to the satisfaction of the Company.
Item 6. Exhibits and Reports on Form 8-K.
INDEX TO EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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1 VOLT INC. AND SUBSIDIARIES FINANCIAL STATEMENTS
On April 1,2004, the Company filed a Form 8-K reflecting the resignation of a
director of the Company on March 27, 2004.
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 May 14, 2004 /s/ Denis C. Tseklenis
Denis C. Tseklenis
Chief Executive Officer
Chairman of the Board
EXHIBIT 1
VOLT INC. AND SUBSIDIARIES
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
BALANCE SHEETS AS OF MARCH 31, 2004 (UNAUDITED)
AND SEPTEMBER 30, 2003 (AUDITED)
STATEMENTS OF INCOME FOR THE SIX MONTHS AND THREE MONTHS ENDED
MARCH 31, 2004 AND 2003 (UNAUDITED)
STATEMENTS OF CASH FLOWS FOR SIX MONTHS ENDED
MARCH 31, 2004 AND 2003 (UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2004 (UNAUDITED) AND SEPTEMBER 30, 2003 (AUDITED)
ASSETS
(Unaudited) (Audited)
March 31, September 30,
2004 2003
------------ -------------
Current Assets:
Cash and cash equivalents $ 524,463 $249,993
Commissions receivable 88,000 30,022
Prepaid expenses and other assets 2,000 2,000
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Total Current Assets 614,463 282,015
Property and equipment, net 5,792,362 5,806,927
Other Assets:
Goodwill 3,031,840 3,031,840
Advances receivable 342,826 347,326
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Total Other Assets 3,374,666 3,379,166
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Total Assets $9,781,491 $9,468,108
=========== ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
MARCH 31, 2004 (UNAUDITED) AND SEPTEMBER 30, 2003 (AUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) (Audited)
March 31, September 30,
2004 2003
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Current Liabilities:
Accounts payable $ 48,982 $ 51,663
-------------- ---------------
Total Current Liabilities 48,982 51,663
Commitments and Contingencies
Stockholders' Equity (Deficit):
Class A Preferred Stock, $.001 par value,
10,000,000 shares authorized at March 31,
2004 and September 30, 2003, respectively,
and 1,000,000 issued and outstanding at
March 31, 2004 and September 30, 2003,
respectively 1,000 1,000
Class B Preferred Stock, no par value,
125,000 shares authorized at March 31,
2004 and September 30, 2003, respectively,
and 0 shares issued and outstanding at
March 31, 2004 and September 30, 2003,
respectively - -
First Washington Class A Preferred Stock,
no par value, 500,000 shares authorized at
March 31, 2004 and September 30, 2003,
respectively, and 500,000 shares issued
and outstanding at March 31, 2004 and
September 30, 2003, respectively - -
Common Stock - $.001 par value; 25,000,000
shares authorized at March 31, 2004
and September 30, 2003, respectively and
4,919,422 and 3,919,422 shares issued and
outstanding at March 31, 2004 and
September 30, 2003, respectively 4,919 3,919
Additional paid-in capital 13,166,519 13,024,019
Accumulated deficit (3,439,929) (3,612,493)
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Total stockholders' equity 9,732,509 9,416,445
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Total Liabilities and Stockholders' Equity $9,781,491 $9,468,108
============ ==================
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 SIX MONTHS AND THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(UNAUDITED) (UNAUDITED)
SIX MONTHS ENDED THREE MONTHS ENDED
MARCH 31 MARCH 31
2004 2003 2004 2003
-------- --------- --------- --------
Revenues $ 1,212,216 $ 1,713,777 $ 600,044 $ 1,218,811
Cost of Revenue 670,592 982,336 299,536 760,526
---------- ----------- ---------- ----------
Gross Profit (Loss) 541,624 780,441 300,508 458,285
Operating Expenses
General and administrative 369,060 643,710 163,177 406,664
---------- ----------- --------- ---------
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 172,564 136,731 137,331 54,621
Income taxes - - - -
----------- ----------- -------- --------
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 172,564 $ 136,731 $ 137,331 $ 54,621
=========== =========== ========= ==========
BASIS AND DILUTED EARNINGS
PER SHARE:
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 0.04 $ 0.03 $ 0.03 $ 0.01
========== ========= ======== =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,469,422 3,919,422 4,919,422 3,919,422
========== ========= ========= =========
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 SIX MONTHS ENDED MARCH 31, 2004 AND 2003
SIX MONTHS ENDED
(UNAUDITED) (UNAUDITED)
MARCH 31, 2004 MARCH 31, 2003
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 172,564 $ 136,731
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization 14,465 14,428
Acquisition of Mortgage-Matic - 177,348
Changes in assets and liabilities
Prepaid expenses and other current assets - 2,000
Commissions receivable (57,978) -
Accounts payable (2,681) (3,750)
--------------- -------------
Total adjustments (46,094) 186,062
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Net cash provided by (used in)
operating activities 126,470 322,793
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment - (45,500)
Net change in advances receivable 4,500 -
---------------- --------------
Net cash provided by investing
activities 4,500 (45,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions of equity 143,500 25,000
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Net cash provided by (used in)
financing activities 143,500 25,000
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 274,470 302,293
CASH AND CASH EQUIVALENTS - BEGINNING OF
YEAR 249,993 172,521
--------------- --------------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 524,463 $ 474,814
=============== ==============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004 AND 2003
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
six months ended March 31, 2004 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. As of March 31,
2001, the Company ceased it's printing and publishing business
and the shares of stock of its former operating subsidiaries
were distributed to certain shareholders. The Company did not
spin off Deerbrook Publishing, Deerbrook Publishing changed
its name to Volt, Inc. when on April 6, 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 and there was a change in control.
At this time, the Company effected a 1 for 100 reverse stock
split for its $.001 par value common stock.
In May, 2001, Mr. Tseklenis sold shares of stock of Arcadian
Renewable Power which owns the wind farm to the Company in
exchange for 1,000,000 shares of Preferred Convertible Stock.
The wind farm had a historical value of $5,700,000.
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. The combination was treated as a purchase with First
Washington becoming a wholly owned subsidiary of Volt, Inc.
Volt, Inc. recognized an intangible asset (goodwill) which
represented the amount of value received over the net assets
acquired. The operations of First Washington are included in
the consolidated statements of income for the year ended
September 30, 2002 from the date of inception May 17, 2002 to
September 30, 2002. There was no predecessor entity of First
Washington. The fair value of the transaction was recorded
based on the number of shares issued to First Washington
(2,000,000) at the fair value of the stock of Volt on the date
of acquisition net of a discount since the stock issued in the
acquisition was restricted stock ($1.50).
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2004 AND 2003
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
The cost of the net assets purchased and liabilities assumed
approximated zero, however, the value of $3,000,000 was based
on the mortgage company's future earnings.
The Company acquired Opportunity Knocks, LLC. 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, and Opportunity Knocks is a
wholly owned subsidiary of the Company.
In fiscal 2003, the Company expanded its financial services
business, and brought in two businesses, that operationally
failed to meet the Company's business model. Subsequent to
these agreements being in force, the Company spun them out.
Additionally, the Washington Metropolitan Area market had not
met Company expectations, so the Company's subsidiary First
Washington acquired Yosemite Brokerage, Inc. in Oakhurst,
California, a few miles from the Company's headquarters. The
Company had issued Preferred Stock Class B, which has been
cancelled by the Company.
In July 2003 (effective August 1, 2003), First Washington
acquired Yosemite Brokerage, Inc. ("Yosemite"), a California
corporation for 500,000 shares of First Washington Class A
Preferred Stock. The acquisition was recorded for accounting
purposes as a purchase acquisition. The Company valued this
transaction at $200,000 ($.40 per share), which included the
recognition of $31,840 in goodwill.
The Company has three other power related wholly-owned
subsidiaries, Sun Volt, Inc., Sun Electronics, Inc. and
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 (CONTINUED)
Principles of Consolidation
The condensed consolidated balance sheet for March 31, 2004
and consolidated balance sheet for September 30, 2003 and
condensed consolidated statements of income and cash flows for
the six months ended March 31, 2004 includes Volt Inc. and its
wholly-owned subsidiaries. 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)
MARCH 31, 2004 AND 2003
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 5-7 years
Office and computer equipment 3-5 years
Wind Farm 40 years
Revenue Recognition
For the Company's power division, sold merchandise and revenue
was recorded under the accrual method of accounting.
For the Company's financial services division, they record
commission income upon the closing of their respective
transactions.
Advertising
Advertising costs are typically expensed as incurred.
Advertising expense was approximately $10,720 and $80,655 for
the six months ending March 31, 2004 and 2003, 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 condensed consolidated
balance sheet for cash and cash equivalents, advances
receivable, commissions 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)
MARCH 31, 2004 AND 2003
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:
2004 2003
---- ----
Net income $172,564 $136,731
-------- --------
Weighted- average common shares
Outstanding (Basic) 4,669,422 3,919,422
Weighted-average common stock Equivalents:
Stock options - -
Warrants - -
---------- -----------
Weighted-average common shares
Outstanding (Diluted) 4,669,422 3,919,422
========= =========
Deferred Financing Fees
The Company paid a $10,000 financing fee in connection with a
line of credit in April 2002. This fee was written off over a
one-year period of time. The unamortized balance at March 31,
2004 was $ -0-. Amortization of these fees were $-0- and
$5,000, respectively for the six months ended March 31, 2004
and 2003.
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. During fiscal 2003, the Company
recognized $31,840 of goodwill acquired in the Yosemite
transaction. There was no recognition of impairment of
goodwill during the six months ended March 31, 2004 and 2003.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2004 AND 2003
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent Accounting Pronouncement
On October 3, 2001, the FASB issued Statement of Financial
Accounting Standards No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets" ("SFAS 144"), that is
applicable to financial statements issued for fiscal years
beginning after December 15, 2001. The FASB's new rules on
asset impairment supersede SFAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," and portions of Accounting Principles Board
Opinion 30, "Reporting the Results of Operations." This
Standard provides a single accounting model for long-lived
assets to be disposed of and significantly changes the
criteria that would have to be met to classify an asset as
held-for-sale. Classification as held-for-sale is an
important distinction since such assets are not depreciated
and are stated at the lower of fair value and carrying amount.
This Standard also requires expected future operating losses
from discontinued operations to be displayed in the period (s)
in which the losses are incurred, rather than as of the
measurement date as presently required.
Reclassifications
Certain amounts for the six months ended March 31, 2003 have
been reclassified to conform with the presentation of the
March 31, 2004 amounts. The reclassifications have no effect
on net income for the six months ended March 31, 2003.
NOTE 3- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at March 31,
2004:
Wind Farm $5,700,000
Furniture and fixtures 16,000
Leasehold improvements 8,885
Computer and office equipment 116,293
-----------
5,841,178
Less: accumulated depreciation 48,816
-----------
Net book value $5,792,362
==========
Depreciation expense for the six months ended March 31, 2004
and 2003 was $14,565 and $9,428, respectively. There is no
depreciation recognized on the Wind Farm as it is non
operational until placed in service. In the Company's
acquisition of Yosemite in their fourth quarter of 2003, they
acquired $55,261 office and computer equipment.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2004 AND 2003
NOTE 4- ADVANCES RECEIVABLE
As of March 31, 2004, advances receivable were $342,826. There
was no interest due the Company on these loans, and the
amounts due at March 31, 2004, are deemed by management to
have no specific repayment terms.
NOTE 5- DEPOSITS
During the quarter ended March 31, 2003, the Company's
subsidiary, Opportunity Knocks placed deposits down on four
homes in Virginia Beach, Virginia. Opportunity Knocks placed
$500 down per home for a total of $2,000.
NOTE 6- 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.
The Company issued 1,000,000 shares of Class A Preferred Stock
to Denis C. Tseklenis in consideration for the Wind Farm.
On April 6, 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.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2004 AND 2003
NOTE 6- STOCKHOLDERS' EQUITY (CONTINUED)
Common and Preferred Stock (Continued)
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.
On January 1, 2003, the Company issued a board resolution for
the authorization of a new class of preferred stock, Class B
Preferred Stock, no par value. The Company authorized the
issuance of 125,000 shares of Class B Preferred Stock.
On July 1, 2003, First Washington issued a board resolution
for the authorization of a new class of preferred stock, Class
A Preferred Stock, no par value. First Washington authorized
the issuance of 500,000 shares of Class A Preferred Stock.
During fiscal 2003, the Company had issued shares of Class B
Preferred Stock, only to cancel them later in that fiscal
year. As of September 30, 2003, there were no shares of Class
B Preferred Stock issued and outstanding.
In July 2003 (effective August 1, 2003), First Washington
issued 500,000 shares of the Class A Preferred Stock, to
acquire Yosemite Brokerage, Inc. ("Yosemite"). The acquisition
was recorded for accounting purposes as a purchase
acquisition. The transaction was valued at $200,000 ($.40 per
share), which included goodwill of $31,840.
In November 2003, the Company issued 1,000,000 shares of
common stock. The stock was an additional payment on the Wind
Farm. The Company charged additional paid-in capital.
NOTE 7- RELATED PARTY TRANSACTIONS
On January 1, 2003, the Company entered into a lease agreement
for the rental of office space for its home office. An officer
of the Company is a partner in the partnership that rents this
space to the Company. The lease is a five-year lease with a
five-year option, with rent of $2,750 per month.
Yosemite Brokerage, rents space from its officer. The lease
commenced February 1, 2000 and runs through January 31, 2005.
The monthly rents commenced at $5,600 per month and calls for
increase annually up to 3%. Rent expense for the six months
ended March 31, 2004 was $16,800. No rent expense was incurred
for the six months ended March 31, 2003.
The President of the Company owns a controlling percentage of
the common stock outstanding.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2004 AND 2003
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 March 31, 2004 and 2003, deferred tax assets consist of the
following:
2004 2003
---- -----
Net operating loss carryforwards $139,963 $165,889
Less: valuation allowance (139,963) (165,889)
---------- ---------
$ -0- $ -0-
========== =========
At March 31, 2004 and 2003, the Company had federal net
operating loss carryforwards in the approximate amounts of
$424,129 and $414,723, 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- PENDING ACQUISITION
The Company in January 2004 reached an agreement to purchase
all of the outstanding shares of the Whittlesey hydro-electric
project on the Salmon River in Malone, New York from Franklin
Hydro for cash. The purchase will include the real estate,
turbines and power purchase agreement which runs approximately
seven more years at 8.25 cents per KWH produced.