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. ----------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) NEVADA 86-0960464 --------------------------------------------- ---------------------------- (State or other jurisdiction of incorporation Employer Identification No.) or organization) (IRS P.O. Box 116, Catheys Valley CA 95306 ----------------------------------------------------------------------------- (Address of principal executive offices) (209) 374-3485 ----------------------------------------------------------------------------- (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 ------------- ---------------- 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 ------------- ---------------- 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) ------------ ----------- Total stockholders' equity 7,445,770 5,840,491 ------------ ----------- 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 - --------------------------------- ------ 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 - - ------------------------------------------ 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 ------------------------------------------- NET INCOME 105,279 239,301 66,981 36,541 Dividends - (167,435) - - ------------------------------------------- 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 -------------- -------------- 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) -------- -------- Total adjustments (60,558) (398,638) ------- -------- 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) --------- ---------- Net cash used by investing activities (30,441) (40,300) ----------- ----------- 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 -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Stockholders advance (83,500) (71,000) Deferred financing fees (10,000) - Proceeds from issuance of common stock - 280,808 ---------- ---------- Net cash provided by financing activities (93,500) 209,808 ------------------------------ NET CHANGE IN CASH AND CASH EQUIVALENTS (79,220) 10,171 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 85,792 596 ----------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,572 $ 10,767 ========== ============= 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 --------- ---------- 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 ------------------------------------------------------- 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 ---------------------------------- Denis Costa Tseklenis, Sole Director