7
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, 2003
[ ] 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 (IRS Employer Identification No.)
or organization)
41667 Yosemite Pines Dr., Oakhurst CA 93644
-----------------------------------------------------------------------------
(Address of principal executive offices)
(559) 692-2474
-----------------------------------------------------------------------------
(Issuer's telephone number)
-----------------------------------------------------------------------------
(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: 3,919,422 Common Shares $0.001 par
value as of March 31, 2003
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 Company continues to diversify its operations for the benefit of the
shareholders. Growth through the subsidiaries in the mortgage, real estate,
construction and energy divisions has been achieved through acquisitions and
internal restructuring for the long term. The Company intends to change its name
from Volt Inc to Kore Holdings, Inc. to better reflect its broadening base of
business.
The Company generated $1,762,777 of revenue, $136,731 of net earnings from
continuing operations and $0.035 in earnings per fully diluted common share from
continuing operations for the six months ended March 31, 2003.
The Company generated $1,218,811 of revenue, $54,621 of net earnings from
continuing operations and $0.014 in earnings per fully diluted common share from
continuing operations for the three months ended March 31, 2003.
For total operations, net income for the six months ended March 31, 2003, was
$136,731 or $0.035 in earnings per fully diluted common share compared with net
income of $20,298 or $0.011 in earnings per weighted-average common share for
the six months ended March 31, 2002.
For total operations, net income for the three months ended March 31, 2002, was
$54,621 or $0.014 in earnings per fully diluted common share compared with net
income of ($2,496) or ($0.001) in earnings per weighted-average common share for
the three months ended March 31, 2002.
RESULTS OF CONTINUING OPERATIONS
Six Months Ended
March 31
-------------- -----------
2003 2002
Revenue $1,762,777 $41,400
Cost 982,336 0
----------- -----------
Gross profit 780,441 41,400
=========== ===========
Gross profit margin 44% 100%
Income from
continuing operations $ 136,731 $41,400
Earnings per share per
share of common stock $ 0.035 $ 0.011
Three Months Ended
March 31
----------- -----------
2003 2002
Revenue $1,218,811 $11,900
Cost 760,526 0
----------- -----------
Gross profit 458,664 11,900
=========== ===========
Gross profit margin 38.0% 100%
Income from
continuing operations $ 54,621 $(2,496)
Earnings per share per
share of common stock $ 0.014 $(0.001)
Revenue for the six months ended March 31, 2003 increased $1,721,377 from the
same period last year. Revenue for the three months ended March 31, 2003
increased $1,206,911 from the same period last year. The reason for this
increase was that the Company had not yet acquired First Washington Financial
Corporation ("First Washington") as of the six months and three months ended
March 31, 2002. After the end of the six months and three months ended March 31,
2002, on May 17, 2002, the Company acquired all of the issued and outstanding
stock of First Washington Financial and thereby acquired control of all of the
assets of First Washington. First Washington is a mortgage loan originator in
the home mortgage loan industry and currently concentrates its business in
Washington, D.C., Maryland and Virginia. All of the increase in revenue is
attributable to revenues generated by First Washington.
Cost of revenue and operating expenses increased for these periods solely as a
result of the acquisition by the Company of First Washington.
Earnings per fully diluted common share was $0.035 for the six months ended
March 31, 2003 based upon fully diluted common shares outstanding of 3,919,422,
and earnings per common share was $0.011 for the six months ended March 31, 2002
based upon weighted-average common shares outstanding of 3,919,422.
Earnings per fully diluted common share was $0.014 for the three months ended
March 31, 2003 based on fully diluted common shares outstanding of 3,919,422,
and earnings per common share was $(0.001) for the three months ended March 31,
2002 based upon weighted-average common shares outstanding of 3,919,422.
In October 2002, the Company reached an agreement with Mortgage-Matic of
Greeenbelt, MD to acquire all of the issued and outstanding shares of stock of
Mortgage-Matic. Mortgage-Matic concentrates their business on FHA insured loans
in the $200,000 range. This accounts for approximately 70% of Mortgage-Matic's
business. The acquisition of Mortgage-Matic should facilitate a streamlining of
the processing and underwriting procedures of First Washington and
Mortgage-Matic. The acquisition became effective as of January 1, 2003. The
Company acquired all of the issued and outstanding shares of Mortgage-Matic in
exchange for 75,000 shares of Series II Convertible Preferred Voting Stock. The
Series II Preferred Voting Stock is convertible into the common stock of the
Company on a one for one basis. Mortgage-Matic's net assets consisted of
restricted cash in the amount of $177,384 and other assets.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
In September of 1999, the Deerbrook Publishing Group, Inc. ("Deerbrook") leased
a computer driven aspect image center (printer for film) used to make separation
for printing (the "aspect image center") and certain other computer equipment
from Copelco Capital, Inc. ("Copelco"). All of the equipment was delivered to
the Deerbrook's then printing operation in Phoenix, Arizona, and installed.
Shortly thereafter, Deerbrook ceased printing for itself and its customers. The
equipment was returned to Copelco. In August of 2000, Copelco brought suit in
the United States District Court for the District of Arizona, cause no. CIV
`00-1620 PHX ROS, to recover its alleged damages $155,398.02 for Deerbrook's
return of the leased equipment plus continuing interest at the rate of one and
one-third percent per month and attorneys fees and costs. The Company does not
believe that Copelco has mitigated its damages and further believes that Copelco
has either sold the equipment or otherwise disposed of the same in a manner
which was not commercially reasonable. The Copelco claims will be vigorously
defended against. Any possible loss from this litigation will be less than one
percent (1%) of the Company's net assets and will be immaterial.
Item 2. Changes in Securities.
Effective January 1, 2003, the Company issued 75,000 shares of Series II
Convertible Preferred Voting Stock (the "Convertible Preferred") in connection
with an acquisition of another company. Each share of the Convertible Preferred
is entitle to one vote on all matters which holders of the Company's common
stock are entitled to vote. The Convertible Preferred Stock is into convertible
the common stock of the Company on a one for one basis.
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
-------------------------------------------------------
1 VOLT INC AND SUBSIDIARIES FINANCIAL STATEMENTS
No Forms 8-K were filed during the quarter for which this report is filed.
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 20, 2003 /s/Denis C. Tseklenis
------------ ------------------------
Denis Costa Tseklenis
Chief Executive Officer
Chairman of the Board
CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14
OF THE SECURITIES EXCHANGE ACT OF 1934
I, Denis C. Tseklenis, Chief Executive Officer certify that:
1. I have reviewed this annual report on Form 10QSB of Volt Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The Registrant's other certifying officers and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The Registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated: May 20, 2003
/s/Denis C. Tseklenis
Denis C. Tseklenis
Chief Executive Officer
I, Robert F. Rood, Treasurer and Chief Financial Officer certify that:
1. I have reviewed this annual report on Form 10QSB of Volt Inc.
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The Registrant's other certifying officers and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the "Evaluation Date"); and
(c) presented in this annual report my conclusions about the
effectiveness of the disclosure controls and procedures based on my evaluation
as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The Registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Dated: May 20, 2003
/s/ Robert F. Rood
Robert F. Rood
Treasurer
Chief Financial Officer
EXHIBIT ONE
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2003 (UNAUDITED) AND SEPTEMBER 30, 2002 (AUDITED)
ASSETS
(Unaudited) (Audited)
March 31, September 30,
2003 2002
------------ -------------
Current Assets:
Cash and cash equivalents $ 474,814 $172,521
Deposits 2,000 -
------------ -------------
Total Current Assets 476,814 172,521
Property and equipment,net 5,793,011 5,756,339
Other Assets:
Goodwill 3,000,000 3,000,000
Deferred financing fees, net - 5,000
Advances receivable 204,000 204,000
----------- -------------
Total Other Assets 3,204,000 3,209,000
----------- -------------
Total Assets $9,473,825 $9,138,460
=========== ============
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
MARCH 31, 2003 (UNAUDITED) AND SEPTEMBER 30, 2002 (AUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) (Audited)
March 31, September 30,
2003 2002
----------------------------------
Current Liabilities:
Accounts payable $ 33,199 $ 36,949
----------------------------------
Total Current Liabilities 33,199 36,949
Commitments and Contingencies
Stockholders' Equity (Deficit):
Preferred stock, $.001 par value,
10,000,000 shares authorized,
1,000,000 shares issued and outstanding
at March 31, 2003 and September 30,
2002, respectively 1,000 1,000
Preferred stock Class B, $.001 par value,
10,000,000 shares authorized, 75,000
and 0 shares issued and outstanding
at March 31, 2003 and September 30,
2002, respectively 75 -
Common Stock, $.001 par value, 25,000,000
shares authorized; 3,919,422 shares
issued and outstanding at March 31,
2003 and September 30, 2002,
respectively 3,919 3,919
Additional paid-in capital 12,980,928 12,778,619
Accumulated deficit (3,545,296) (3,682,027)
------------------------------------
Total stockholders' equity 9,440,626 9,101,511
------------------------------------
Total Liabilities and Stockholders' Equity $9,473,825 $9,138,640
====================================
The accompanying notes are an integral part of the condensed consolidated
financial statements.
VOLT INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(UNAUDITED) (UNAUDITED)
SIX MONTHS ENDED THREE MONTHS ENDED
2003 2002 2003 2002
---------- -------- -------- ----------
Revenues $ 1,762,777 $ 41,400 $1,218,811 $ 11,900
Cost of Revenue 982,336 - 760,526 -
----------- -------- ---------- -------
Gross Profit 780,441 41,400 458,285 11,900
Operating Expenses
General and administrative 643,710 21,102 403,664 14,396
----------- -------- --------- -------
Income (loss) from continuing
operations before income taxes 136,731 20,298 54,621 (2,496)
Income taxes - - - -
----------- -------- --------- ------
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 136,731 $ 20,298 $ 54,621 $ (2,496)
=========== ======== ========= =======
BASIS AND DILUTED EARNINGS PER SHARE:
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS $ 0.035 $ 0.011 $ 0.014 $ (0.001)
============ ======== ========= =======
WEIGHTED NUMBER OF COMMON SHARES
OUTSTANDING 3,919,422 1,869,422 3,919,422 1,894,422
============ ========= ========= ========
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, 2003 AND 2002
2003 2002
----------------------------------
CASH FLOWS FROM OPERAITNG ACTIVITIES
Net income $ 136,731 $ 38,298
Adjustments to reconcile net income to net
cash used by operating activities:
Depreciation and amortization 14,428 3,200
Amortization of Mortgage-Matic 177,384 -
Changes in assets and liabilities
Deposits (2,000) -
Accounts payable (3,750) (18,000)
---------------------------------
Total adjustments 186,062) (14,800)
---------------------------------
Net cash provided by
operating activities 322,793 23,498
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (45,500) (12,549)
--------------------------------
Net cash used in investing activities (45,500) (12,549)
CASH FLOWS FROM FINANCING ACTIVITIES
Contributions of equity 25,000 -
Advances receivable - other - (83,500)
---------------------------------
Net cash provided by (used in)
financing activities 25,000 (83,500)
---------------------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 302,293 (72,551)
CASH AND CASH EQUIVALENTS - BEGINNING OF
YEAR 172,521 85,792
----------------------------------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 474,814 $ 13,241
==================================
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, 2003 AND 2002
NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION
Volt Inc. and Subsidiaries is a power provider and marketer of
alternative energy and financial services. The Company is in
the initial stages of implementing its business plan.
On April 25, 2001, Denis C. Tseklenis acquired 127,995 shares
of the Company's common stock, $.001 par value per share,
which constituted approximately 53% of the Company's issued
and outstanding common stock for $255,000.
On May 17, 2002, the Company acquired First Washington
Financial Corporation, a company which provides financial
services in Bethesda, Maryland ("First Washington"). First
Washington, is a mortgage company whose emphasis lies in
residential mortgages in the greater Washington D.C. service
area. First Washington was acquired for 2,000,000 shares of
the Company's common stock.
On May 17, 2002, the Company acquired Opportunity Knocks, LLC
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 the Company paid no additional
consideration for Opportunity Knocks.
In October 2002, the Company reached an agreement with
Mortgage-Matic of Greeenbelt, MD to acquire all of the issued
and outstanding shares of stock of Mortgage-Matic.
Mortgage-Matic concentrates their business on FHA insured
loans in the $200,000 range. This accounts for approximately
70% of Mortgage-Matic's business. The acquisition of
Mortgage-Matic should facilitate a streamlining of the
processing and underwriting procedures of First Washington and
Mortgage-Matic. The acquisition became effective as of January
1, 2003. The Company acquired all of the issued and
outstanding shares of Mortgage-Matic in exchange for 75,000
shares of Series II Convertible Preferred Voting Stock. The
Series II Preferred Voting Stock is convertible into the
common stock of the Company on a one for one basis.
Mortgage-Matic's net assets consisted of restricted cash in
the amount of $177,384 and other assets.
The Company's wholly owned subsidiary Arcadian Renewable
Power, Inc. holds the Company's Wind Farm in the Altamont Pass
in Livermore, California. The Company has two other wholly-
owned subsidiaries, Sun Volt, Inc. and Sun Electronics, Inc.
In January of 2003, the Company entered into an agreement to
acquire Greenlight Lending.com. The transaction was closed in
escrow pending resolution of certain matters.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated balance sheets for March 31, 2003
and 2002 and condensed consolidated statements of operations,
changes in stockholders' equity and cash flows for the six
months then ended includes Volt Inc. and its wholly-owned
subsidiaries, Sun Volt, Inc., Sun Electronics, Inc., Arcadian
Renewable Power, Inc., First Washington and Opportunity
Knocks.
Intercompany transactions and balances have been eliminated in
consolidation.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and
other short-term investments with an initial maturity of three
months or less to be cash or cash equivalents.
The Company maintains cash and cash equivalent balances at
several financial institutions which are insured by the
Federal Deposit Insurance Corporation up to $100,000.
Property and Equipment
Property and equipment are stated at cost. Depreciation is
computed primarily using the straight-line method over the
estimated useful life of the assets.
Furniture and fixtures 7 years
Office and computer equipment 3-5 years
Wind Farm 40 years
Revenue Recognition
The Company sold merchandise and revenue was recorded under
the accrual method of accounting.
First Washington records commission income upon the closing of
their respective transactions.
Advertising and Marketing
Advertising and marketing costs are typically expensed as
incurred. Advertising and marketing expense was approximately
$80,655 and $830 for the six months ended March 31, 2003 and
2002, 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.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fair Value of Financial Instruments
The carrying amount reported in the consolidated balance
sheets for cash and cash equivalents, notes receivable,
accounts payable and accrued expenses approximate fair value
because of the immediate or short-term maturity of these
financial instruments.
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:
2003 2002
---- ----
Net income $136,731 $27,794
-------- -------
Weighted- average common shares
Outstanding (Basic) 3,919,422 1,844,422
Weighted-average common stock Equivalents:
Stock options - -
Warrants - -
Weighted-average common shares
Outstanding (Diluted) 3,919,422 1,844,422
Deferred Financing Fees
The Company paid a $10,000 financing fee in connection with a
line of credit in April 2002. This fee will be written off
over a one-year period of time. As of March 31, 2003, the
entire balance has been amortized.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 March 31, 2003, there are no
adjustments of goodwill due to impairment.
Reclassifications
Certain amounts for the six months ended March 31, 2002 have
been reclassified to conform with the presentation of the
March 31, 2003 amounts. The reclassifications have no effect
on net income for the six months ended March 31, 2002.
NOTE 3- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at March 31,
2003:
Wind Farm $5,700,000
Furniture and fixtures 16,000
Computer and office equipment 99,917
-------------
5,815,917
Less: accumulated depreciation 22,906
-------------
Net book value $5,793,011
==========
Depreciation expense for the six months ended March 31, 2003
and 2002 was $14,428 and $1,600, respectively. There is no
depreciation recognized on the Wind Farm in 2003 or 2002 as it
is non operational until placed in service.
NOTE 4- ADVANCES RECEIVABLE
As of March 31, 2003, notes receivable were $204,000. There
was no interest due the Company on these loans, and the
amounts due at March 31, 2003, are deemed by management to
have no specific repayment terms.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
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. Opportunity Knocks
anticipates closing on these homes by the end of its third
fiscal quarter.
NOTE 6- COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement in April 2001 in
Pleasanton, California. The Company paid $2,800 per month for
rent. This lease was terminated by the Company in October
2001, and all operations now run through the Oakhurst,
California location. The security deposit was expensed as part
of a rent payment in 2002.
NOTE 7- STOCKHOLDERS' EQUITY
Common and Preferred Stock
The Company issued 1,000,000 shares of preferred stock to
Denis C. Tseklenis in consideration for the Wind Farm. This
preferred stock is convertible by the preferred stockholders
at their discretion and they will receive 5 shares of common
stock for each share of preferred stock.
On April 25, 2001, Denis C. Tseklenis acquired 127,995
original issue shares of the Company's common stock, $.001 par
value per share, which constituted approximately 53% of the
Company's issued and outstanding common stock. Mr. Tseklenis
paid the Company $255,000 for the common stock.
During the year ended September 30, 2001, in addition to the
initial acquisition by Denis C. Tseklenis, the Company had
issued 1,678,000 shares and cancelled 225,000 of common stock
for $366,711.
Prior to the initial acquisition by Denis C. Tseklenis, the
Company had issued 1,850,000 shares of common stock for
accrued payroll, accounts payable and services.
During the quarter ended December 31, 2001, 225,000 shares
were reissued that were cancelled from the prior year ended
September 30, 2001.
On May 17, 2002, the Company issued 2,000,000 shares of common
stock to acquire First Washington and thus it became a
wholly-owned subsidiary. The shares were valued at a fair
value at the time of the transaction ($1.50 per share) or
$3,000,000.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
NOTE 7- STOCKHOLDERS' EQUITY (CONTINUED)
Common and Preferred Stock (Continued)
On January 1, 2003, the Company issued a board resolution for
the authorization of a new class of preferred stock, Series II
Convertible Preferred Voting Stock. The Company authorized the
issuance of 10,000,000 shares with a par value of $.001.
Simultaneously with this authorization, the Company issued
75,000 shares of the Preferred Stock Class B, to acquire
Mortgage-Matic. The acquisition was for the net assets of
Mortgage-Matic which consisted of restricted cash in the
amount of $177,384 and other assets. There was no goodwill in
this transaction.
NOTE 8- LITIGATION
In September of 1999, the Deerbrook Publishing Group, Inc.
("Deerbrook") leased a computer driven aspect image center
(printer for film) used to make separation for printing (the
"aspect image center") and certain other computer equipment
from Copelco Capital, Inc. ("Copelco"). All of the equipment
was delivered to the Deerbrook's then printing operation in
Phoenix, Airzona, and installed. Shortly thereafter, Deerbrook
ceased printing for itself and its customers. The equipment
was returned to Copelco. In August of 2000, Copelco brought
suit in the United States District Court for the District of
Arizona, cause no. CIV '00-1620 PHX ROS, to recover its
alleged damages $155,398 for Deerbrook's return of the leased
equipment plus continuing interest at the rate of one and
one-third percent per month and attorneys fees and costs. The
Company does not believe that Copelco has mitigated its
damages and further believes that Copelco has either sold the
equipment or otherwise disposed of the same in a manner which
was not commercially reasonable. The Copelco claims will be
vigorously defended against. Any possible loss from this
litigation will be less than one percent (1%) of the Company's
net assets and will be immaterial. Since the change in control
of the Company on April 6, 2001, there have been no legal
proceedings brought against Volt.
VOLT INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 2003 AND 2002
NOTE 9- 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, has a two percent (2%) partnership interest in
the partnership that rents this space to the Company. The
lease is a five-year lese with a five-year option, with rent
of $2,750 per month. Rent expense for the six months ended
March 31, 2003 is $8,250. The rental paid by the Company is
comparable to rental paid for comparable properties in the
area.
NOTE 10- 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, 2003 and 2002, deferred tax assets consist of the
following:
2003 2002
---- -----
Net operating loss carryforwards $165,889 $ 257,670
Less: valuation allowance (165,889) (257,670)
--------- ---------
$ -0- $ -0-
========= ==========
At March 31, 2003 and September 30, 2002, the Company had
federal net operating loss carryforwards in the approximate
amounts of $414,723 and $496,833, respectively, available to
offset future taxable income. The Company established
valuation allowances equal to the full amount of the deferred
tax assets due to the uncertainty of the utilization of the
operating losses in future periods.
NOTE 11- NOTE PAYABLE - BANK
In November 2002, the Corporation closed on a line of credit
with a bank in the amount of $750,000. The loan proceeds will
be used to acquire properties for Opportunity Knocks. As of
March 31, 2003, the Company had no amounts outstanding.
NOTE 12- SUBSEQUENT EVENTS
On April 3, 2003, the Company reached an agreement to acquire
Heritage Mortgage for cash and restricted securities. The
acquisition enhances the Company's financial services division
in an effort to provide nationwide coverage for its financial
products.