UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to _________________
Commission file number: 0-28555
VOLT INC.
(Name of small business issuer in its charter)
Nevada 86-0960464
(State or other jurisdiction of incorporation I.R.S. Employer Identification
or organization Number
41667 Yosemite Pines Drive, Oakhurst, CA 93644
(Address of principal executive offices) (Zip Code)
Issuer's telephone number is (559) 692-2474
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
$.001 Par Value Common Stock
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this from, and no disclosure will be
contained to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10KSB
or any amendment to this Form 10KSB. [X]
The issuer's revenues for the most recent fiscal year were $926,128.
The aggregate value of the voting and non-voting common equity held by
non-voting affiliates as of January 10, 2003, was $5,842,651.
The number of shares outstanding of the issuer's common equity as of January 10,
2003 was 3,919,422, $.001 Par Value.
Portions of the following documents are incorporated by reference into Part II,
Item 5 and Part III, Item 10 respectively of this Form 10KSB: Applicable
portions of the Company's Form 10SB12G filed with the Securities and Exchange
Commission on December 17, 1999 and applicable portions of the Company's Form
10KSB filed with the Securities and Exchange Commission on January 16, 2002.
Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]
TABLE OF CONTENTS
PART I.........................................................................1
ITEM 1. DESCRIPTON OF BUSINESS.............................................1
History..................................................................1
The Company..............................................................1
The Alternative Energy Business..........................................2
The Mortgage Business....................................................2
The Real Estate Business.................................................2
ITEM 2. DESCRIPTION OF PROPERTY............................................2
Corporate Offices........................................................2
Energy Properties........................................................3
ITEM 3. LEGAL PROCEEDINGS..................................................3
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................3
PART II........................................................................3
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........3
Market Information.......................................................3
Holders of Stock.........................................................4
Dividends................................................................4
Securities Authorized for Issuance Under Equity Compensation Plans.......4
Recent Sales of Unregistered Securities..................................4
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........5
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS......................6
PART III.......................................................................6
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS...................................6
ITEM 10. EXECUTIVE COMPENSATION............................................7
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....7
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TANSACTIONS.....................8
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K..................................9
ITEM 14. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES..................9
PART I
ITEM 1. DESCRIPTON OF BUSINESS
History
The Company was incorporated in the state of Colorado on March 31, 1997, under
the name Biovid Corporation for the purpose of entering into the printing and
publishing business. The Company did not commence active business operations in
the publishing industry until August 1998, when began acquiring existing
printing and publishing businesses as subsidiaries. From August, 1998, until
December 31, 1999, the Company derived its revenue primarily from providing
printing and publishing services to artists and publishers. The Company
discontinued its printing and publishing operations effective December 31, 1999,
to concentrate its efforts on Internet-based publishing initiatives. In December
1999, the company effected a merger whereby it became a Nevada corporation and
changed its name to Deerbrook Publishing Group, Inc and continued as a holding
company looking for other business to acquire.
On April 1, 2001, the Company disposed of its printing and publishing
subsidiaries and ceased active business operations. On April 6, 2001, control of
the Company changed and the Company determined to explore new business
opportunities including but not limited to the acquisition of alternative energy
sources in the State of California and other states for resale to the public.
Also on April 6, 2001, the Company changed its name to Volt Inc.
On May 15, 2001, the Company acquired all of the stock of Arcadian Renewable
Power, Inc., a Delaware corporation ("Arcadian") and thereby acquired control of
all of the assets of Arcadian. Arcadian is in the business of alternative energy
production.
In May, 2001, the Company acquired all of the stock of Sun Volt, Inc., a Nevada
corporation ("Sun Volt") and there by acquired control of all of the assets of
Sun Volt. Sun Volt is engaged in the business of construction and sale of energy
products and energy projects.
In May, 2001, the Company acquired all of the stock of Sun Electronics, Inc., a
Nevada corporation ("Sun Electronics") and there by acquired control of all of
the assets of Sun Electronics. Sun Electronics is engaged in the research and
development of alternative energy products.
On May 17, 2002, the Company acquired all of the stock of First Washington
Financial Corporation, a Nevada corporation ("First Washington") 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.
On May 17, 2002, the Company acquired Opportunity Knocks, LLC, a Maryland
limited liability company ("Opportunity Knocks"). Opportunity Knocks is in the
business of acquiring, refurbishing and selling real estate in the Washington
D.C. area. Opportunity Knocks specializes in HUD properties.
The Company
The Company is a holding company formed in the Sate of Nevada whose subsidiaries
include Arcadian, Sun Volt, Sun Electronics, First Washington, and Opportunity
Knocks.
The Company is listed on the NASD-OTC Bulletin Board and its common stock trades
under the stock symbol "VOLT".
The Alternative Energy Business
Arcadian's major asset is the Altamont Wind Generation Facility, which is an
existing electricity generation facility located on approximately 4000 acres in
the Altamonte Pass, east of San Francisco, CA (the "Wind Farm"). The Wind Farm
has about 1300 wind turbines at present which were installed in the 1980's,
approximately 600 of which are still operable. The Wind Farm will be re-powered
with new 950 KW state-of-the-art turbines. The Wind Farm is zoned and permitted
for up to 114 megawatts, and the infrastructure includes the wind turbines, 300
miles of transmission lines, a 150 MW substation and an interconnection to the
PG&E grid. The ground leases extend to 2036 with options to renew. The Wind Farm
will be re-powered with a $150 million credit facility. Financing for the
initial 60 MW re-power is $68 million, with 20% equity supplied by the $14
million value of the existing plant. The cost to produce electricity is
approximately 4.5 cents per KWH, and is eligible for up to 3.5 cents of tax
credits. Sale price of the electricity should be in the range of 6.9 cents per
KWH with annual revenue in the $5 Million range without calculating green
tickets or tax credits and other incentives.
The Company is in the planning stages to re-power and activate its Wind Farm.
However, due to the uncertainty surrounding the Chapter 11 Reorganization
Proceeding of Pacific Gas and Electric Company pending in the United States
Bankruptcy Court in the Northern District of California, the Company is unsure
of when it will be able to activate the Wind farm.
Sun Electronics is conducting Photovoltaics research and development of a
patented paint on cellprocess licensed to the company and other solar and energy
related technologies.
Sun Volt is currently engaged in the sale and construction of alternative energy
products such as electric generators for homes and businesses and.
The Mortgage Business
First Washington earns fees on the origination of real estate mortgage loans in
the Washington D.C. area. First Washington leases a seven thousand four hundred
square foot office in Bethesda Maryland. First Washington specializes in
residential mortgage loans. First Washington has eighteen full time employees.
First Washington obtains its customers through direct contact by telephone, the
internet and referrals from existing customers.
The Real Estate Business
Opportunity Knocks is in the business of acquiring, refurbishing and selling
real estate in the Washington D.C. area. Initially, Opportunity Knocks will
utilize the expertise and some of the employees of First Washington to operate
its business. Opportunity Knocks specializes in acquiring, refurbishing and
selling of HUD properties. Opportunity Knocks will utilize the HUD gifting
program to attract first time home buyers who might not otherwise be able to
qualify for a home mortgage. Opportunity Knocks shares office space with First
Washington.
ITEM 2. DESCRIPTION OF PROPERTY
Corporate Offices
The Company leases its corporate and executive offices at 41667 Yosemite Pines
Drive, Oakhurst, CA 93644. The Company considers its offices to be adequate.
First Washington leases its corporate offices at 7200 Wisconsin Ave., Ste 410,
Bethesda MD 20814. The Company considers First Washington's offices to be
adequate.
Energy Properties
The Company's Wind Farms are all located on leased property in the Altamonte
Pass east of San Francisco, California.
ITEM 3. 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.
There have been no legal proceedings brought against Volt.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fiscal year
ended September 30, 2002.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The company's Common Stock trades under the stock symbol VOLT on the NASDAQ'S
OTC Bulletin Board. The following table sets forth the quarterly high and low
closing bid prices for the Company's common stock for the periods indicated:
For the year ended September 30, 2001:
High Low
Deerbrook:
Quarter ended December 31, 2000 $ 0.07 $ 0.005
Quarter ended March 31, 2001 0.08 0.01
VOLT:
Quarter ended June 30, 2001 10.25 0.015
Quarter ended September 30, 2001 9.00 2.50
For the year ended September 30, 2002:
High Low
Quarter ended December 31, 2001 $ 4.30 2.25
Quarter ended March 31, 2002 4.20 1.50
Quarter ended June 30, 2002 2.00 1.55
Quarter ended September 30, 2002 2.05 1.43
The quotations reflect inter-dealer price, without mark-up, mark-down or
commission and may not represent actual transactions.
Holders of Stock
As of September 30, 2002 there were approximately 553 holders of record of the
Company's common stock and one holder of record of the Company's Series One
Voting Convertible Preferred Stock.
Dividends
The company has not declared or paid any cash dividends on its common stock and
does not intend to declare or pay any cash dividends in the foreseeable future.
The payment of dividends, if any is within the discretion of the Board of
Directors and will depend on the Company's earnings, if any, its capital
requirements, and financial condition and other such factors as the Board of
Directors may consider.
Securities Authorized for Issuance Under Equity Compensation Plans.
None.
Recent Sales of Unregistered Securities
Sales of securities by the Company within the past three years without
registration under the Securities Act were as follows:
With respect to such sales within the fiscal years ended September 30, 2002 and
2001, see Note 7 to the Company's Consolidated Financial Statements contained
herein. Each share of the Series One Voting Convertible Preferred Stock referred
to in Note 7 is convertible into five shares of the Company's common stock at
the option of the holder(s) thereof.
With respect to such sales within the fiscal year ended September 30, 2000,
refer to the applicable portions of the Company's Form 10SB12G filed with the
Securities and Exchange Commission December 17, 1999 which by this reference are
incorporated herein by reference for this specific purpose.
The Company claims exemption from registration for these securities under
Section 4(2) of the Securities Act in as much as all of the purchasers were
"accredited investors" as that term is defined in Regulation D as promulgated by
the Securities and Exchange Commission and all of the purchasers either alone or
with their purchaser representative(s) had such knowledge and experience in
financial and business matters that they were capable of evaluating the merits
and risks of the purchase of the Company's securities.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OFOPERATIONS 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 FACTIORS,
INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET AND ECONOMIC
CONDITIONS.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company continues to diversify the operating subsidiaries to take advantage
of profitable opportunities in both the alternative energy field, loan
origination and real estate. The first year of operations were devoted to
research and development of a forwarding moving business plan targeting the
acquisition of asset based projects with long term revenue streams and related
businesses which can produce consistent revenues with high earnings and good
future growth with minimal risk.
The Company is proceeding with the redevelopment planning of the Altamaont Pass
Wind Farm. However, the redevelopment is not expected to be completed in the
near term due to the uncertainty of both the state of California's energy
problems and legislative solutions and the Chapter 11 Reorganization Proceeding
of Pacific Gas and Electric Company pending in the United States Bankruptcy
Court in the Northern District of California.
The Wolverine Power Hydroelectric acquisition is still being pursued. However,
the Federal Energy Regulatory Commission (FERC) and other due diligence issues
need to be resolved before the transaction could be completed. The Wolverine
Power Hydroelectric acquisition would add approximately $1,000,000 in annual
revenue.
Research and development is continuing in the Company's photovoltaic division
for the patented paint-on solar electric cell process of which the licensing
rights were acquired last year.
In January, 2002, the company entered into a joint venture with Opportunity
Knocks, LLC to purchase, refurbish and then sell residential real estate in
Washington, D.C., Virginia and Maryland. Opportunity Knocks specializes in HUD
homes and in particular the HUD gifting program which allows first time
homeowners to qualify for a HUD insured mortgage. The purchasers will be
pre-approved for mortgages. Opportunity Knocks' clients are primarily police
officers, firefighters, and government and union workers who are first time home
buyers. The Company plans to expand this business to New York, New Jersey,
Pennsylvania, California, Florida and other selected states. In March, 2002, the
Company obtained approval from two banks for a revolving credit line in the
amount of $2,250,000 to purchase homes in bulk from HUD, the Veterans
Administration banks and others. The Company expects to increase its credit line
to $5,000,000 and is actively engaged in procuring properties for clients. The
estimated turn-around from purchase to rehab to resale should be 45 to 90 days
average. The Company currently has pre-approved mortgage applicants on the
waiting list and will process additional applicants as needed. A typical
transaction usually averages $200,000 and yields a projected net profit of 18%
to 22% to the companies.
On May 17, 2002, the Company acquired Opportunity Knocks and First Washington
Financial Corporation for cash and stock. First Washington is a mortgage company
and processes Opportunity Knocks' clients as well as outside mortgage
originations in their normal course of business.
The Company is currently in negotiations to acquire other related businesses and
projects and entities.
ITEM7. FINANCIAL STATEMENTS
The financial statements of the Company are attached hereto.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in or disagreements with the Company's accountants on
any matter.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the Company's
directors, executive officers, and certain key employees:
Name ......... Age Position With the Company
Denis C. Tseklenis 53 Chairman, President, Chief Executive
......... Officer and Secretary
Robert F. Rood.... 35 Director, Treasurer
James A. Sharon... 51 Director
Denis C. Tseklenis Mr. Tseklenis has served as a the chairman of the board of
directors, president, chief executive office and secretary of the Company since
April 6, 2001. Mr. Tseklenis has a Masters of Science Degree from Boston
University and an extensive background in marketing, finance and public
corporate development. Mr. Tseklenis has previously served as president and
chairman of other public companies in which revenues exceeded One Hundred
Million Dollars ($100,000,000) per year and which had rapid growth in multiple
locations. In the 1980's Mr. Tseklenis' companies sold and leased over 60,000
solar systems to home owners at a cost of approximately $4,000 per unit. Mr.
Tseklenis has extensive experience in real estate management and construction
having managed over 2, 500 apartment and condominium units.
Robert F. Rood....Mr. Rood has been a director and the treasurer of the Company
since March 17, 2002. Mr. Rood has been in the finance industry since 1991. Mr.
Rood has managed and consulted and has served as a financial consultant for
unions and REITS. In conjunction with Donaldson, Lufkin and Jeanerette, Mr. Rood
participated in the designing of secondary market products. In 1997, Mr. Rood
entered the mortgage lending industry at Wall Street Mortgage Corporation as
head of the sales force and was responsible for promoting custom-made mortgage
products and FHA lending. In 2000, Mr. Rood went to F&M Bank in Bethesda
Maryland to start and supervise the newly formed wholesale mortgage division.
When F&M Bank was acquired, Mr. Rood left to become manager of the Bethesda
office of Fidelity & Trust Mortgage, Inc. In 2000, Mr. Rood helped found First
Washington, now a wholly owned subsidiary of the Company.
James A. Sharon...Mr. Sharon has been a director of the Company since September
15, 2002. Mr. Sharon was an exchange student a City University in London in 1972
and holds a Bachelor of Science Degree in Civil Engineering with Honors from
Worcester Polytechnic Institute. Mr. Sharon is licensed by the State of Florida
as a Certified Building Contractor and a Certified Solar Energy Contractor. Mr.
Sharon has public company experience as a former president of a public company
and has experience in lease negotiations with major tenants such as Mobil Oil,
Cellular-One and Marriott Corp. Mr. Sharon has extensive experience in the
installation of large commercial renewable energy projects.
There are no family relationships among directors, or executive officers.
ITEM 10. EXECUTIVE COMPENSATION
With respect to executive compensation for within the fiscal years ended
September 30, 2001 and 2000, refer to the applicable portions of the Company's
Form 10KSB filed with the Securities and Exchange Commission January 16, 2002
which by this reference are incorporated herein by reference for this specific
purpose.
The Company paid no executive compensation for the fiscal year ended September
30, 2002. The Company has no employment contracts. The company does not have a
bonus or stock option plan at this time.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following is a listing of security ownership of management and certain
beneficial owners of the Issuer's securities as of January 14, 2003. On that
date there were 3,919,422 shares of the Company's common stock issued and
outstanding and 1,000,000 shares of the Company's Series One Voting Convertible
Preferred Stock outstanding.
Title Name and Position Amount Percent
Of Class of Beneficial Owner and of Class
......... Nature of
......... Beneficial
......... Ownership(1)
------ ...--------------------------- ---------- --------
Common Denis C. Tseklenis, Chairman,
President, CEO and Secretary 1,627,995 42%
Common Robert F. Rood, Director and
Treasurer 500,000 13%
--------- ---
Total Officers and
Directors as a Group 2,127,995 55%
========= ===
Series One
Preferred Denis C. Tseklenis, Chairman,
President CEO and Secretary 1,000,000 100%
--------- ----
Total Officers and
Directors as a Group 1,000,000 100%
========= ====
(1) Subject to community property laws when applicable, the persons named in the
above table have sole voting and investing power with respect to all shares of
stock beneficially owned by them.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TANSACTIONS
In November 1999, the Company executed a letter of intent with Mark Eaker, then
an officer and director of the Company to acquire 80% of the outstanding stock
of Gregory Editions, Inc., a publisher and distributor of fine art
reproductions. The letter of intent provided for a total purchase price of
$3,300,000, consisting of $2,700,000 cash and 400,000 shares of the Company's
common stock. The Company paid Mr. Eaker a non-refundable deposit of $225,000 in
cash and 266,000 shares of common stock in connection with the letter of intent.
Because the Company was unable to fulfill its obligations in order to consummate
the transaction, the letter of intent expired and Mr. Eaker retained the
non-refundable deposit. In addition, as of September 30, 2000, Mr. Eaker had
paid expenses totaling approximately $50,000 on behalf of the Company and
deferred payment of his salary and other benefits. Beginning January 1, 2000,
Mr. Eaker provided office space, staff, and other operating expenses for the
Company's corporate headquarters at the headquarters of Gregory Editions, Inc.,
which is owned and operated by Mr. Eaker. Mr. Eaker's employment contract with
the Company was terminated on April 6, 2001. The Company no longer utilizes
office space provided by Mr. Eaker. Mr.Eaker is no longer an officer or director
of the Company.
Through December 31, 1999, the Company leased printing equipment from Michael
Raburn, a former officer and director of the Company, pursuant to an oral
agreement under which it paid $10,000 per month. The Company incurred expenses
of $50,000 in fiscal 1999 and $0 in fiscal 2000 under this agreement. Through
December 31, 1999, the Company also conducted its operations in a building
leased by Michael Raburn. The Company paid a total of approximately $27,200 of
lease obligations for this building, although it was not a party to the lease
and occupied the building at the pleasure of Mr. Raburn. Effective December 31,
1999, the Company discontinued its printing and publishing operations and moved
its remaining Internet-based operations out of the building leased by Mr.
Raburn. Michael. Raburn is no longer an officer or director of the Company.
In November 1999, Keith Chesser, Mike Santellanes, and Michael Raburn returned
an aggregate of 2,345,000 shares of common stock to the Company. The Company did
not pay Messrs. Chesser, Santellanes, and Raburn any consideration for these
shares. Keith Chesser, Mike Santellanes, and Michael Raburn are no longer
officers or directors of the Company.
In January 2000, the Company issued 1,000,000 shares of common stock to Mark
Eaker pursuant to his employment agreement. The Company also issued 250,000
shares of common stock to Joseph Patterson in January 2000 for his services as a
director of the Company. Mark Eaker is no longer an officer or director of the
Company. Joseph Patterson is no longer an office or director of the Company
On May 15, 2001, the Company acquired all of the issued and outstanding shares
of stock of Arcadian Renewable Power Corporation, a Delaware corporation from
Denis C. Tseklensi, an office and director, for 1,000,000 shares of the
Company's restricted common stock and 1,000,000 shares of the Company's
restricted Series One Voting Preferred Convertible Stock.
On May 17, 2002, the Company acquired 500,000 shares of the stock of First
Washington Financial Corporation, a Nevada corporation from Denis C. Tseklenis,
an officer and director, for 500,000 shares of the Company's restricted common
stock.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Index to Exhibits
Exhibit No...... Description of Document
2.1(1) .......Articles of Merger merging Artup.com Network, Inc., a Colorado corporation,
with and into the Registrant
3.1(1) ...... Articles of Incorporation of the Registrant
3.2(1) ...... Bylaws of the Registrant
4.1(1) ...... Specimen of Common Stock Certificate
4.2(1) ...... Specimen of Certificate for Common Stock Purchase Warrants
4.3(1) ...... Common Stock Purchase Warrant dated January 3, 2000, issued to Gene Bowlds
4.4(1) ...... Non-Statutory Stock Option Certificate dated February 16, 2000, issued to
Michael Paloma
10.1(1) .......Master Consulting Services Agreement dated as of
July 28, 1999 between the Registrant and Integrated
Information Systems, Inc.
10.2(1) ..... Equipment Lease dated September 15, 1999 between
the Registrant and Copelco Capital, Inc.
10.3(1) ...... Employment Agreement between the Registrant and
Mark L. Eaker 10.4(1) ...... Employment Agreement
between the Registrant and Keith M. Chesser 10.5(1)
.......1999 Incentive Stock Plan 16.1(1) .......Letter
on change in certifying accountant from Alvin H. Bender,
C.P.A. 16.2(1) .......Letter on change in certifying
accountant from Mark Shelley, CPA 16.3(1) .......Letter
on change in certifying accountants from Semple and
Cooper, LLP 21.1(1) .......Subsidiaries of registrant
21.2(2) .......Subsidiaries of registrant
(1) Previously filed with the Securities and Exchange
Commission. (2) Attached hereto as Exhibit 21.2.
Reports on Form 8-K:
On May 30, 2002, the Company filed a Form 8-K to report the acquisition of First
Washington Financial Corporation.
ITEM 14. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures. The Company's principal
executive officer, after evaluating the effectiveness of the Company's
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date (the "Evaluation Date")
within 90 days before the filing date of this annual report, has concluded that
as of the Evaluation Date, the Company's disclosure controls and procedures were
adequate and designed to ensure that material information relating to the
Company and the Company's consolidated subsidiaries would be made known to him
by others within those entities.
Changes in internal controls. There were no significant changes in the Company's
internal controls or to the Company's knowledge, in other factors that could
significantly affect the Company's disclosure controls and procedures subsequent
to the Evaluation Date.
FINANCIAL STATEMENTS
PAGE(S)
INDEPENDENT AUDITORS' REPORT F-1
CONSOLIDATED FINANCIAL STATEMENTS:
BALANCE SHEETS AS OF SEPTEMBER 30, 2002
AND 2001 F- 2-3
STATEMENTS OF INCOME FOR THE YEARS ENDED
SEPTEMBER 30, 2002 AND 2001 F-4
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DEFICIT) FOR THE YEARS ENDED SEPTEMBER 30, 2002
AND 2001 F-5
STATEMENTS OF CASH FLOWS FOR YEARS ENDED
SEPTEMBER 30, 2002 AND 2001 F-6-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-8-15
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Volt Inc. and Subsidiaries
Cathey's Valley, California
We have audited the accompanying consolidated balance sheets of Volt Inc. and
Subsidiaries (the "Company') as of September 30, 2002 and 2001 and the related
consolidated statements of income, changes in stockholders' equity (deficit),
and cash flows for the years then ended. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Volt
Inc. and Subsidiaries as of September 30, 2002 and 2001, and the consolidated
results of its statements of operations, changes in stockholders' equity
(deficit), and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
BAGELL, JOSEPHS & COMPANY, L.L.C.
BAGELL, JOSEPHS & COMPANY, L.L.C.
Gibbsboro, New Jersey
December 9, 2002
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2002 AND 2001
ASSETS
2002 2001
---- ----
CURRENT ASSETS
Cash and cash equivalents 172.521 85,792
Prepaid expenses and other assets - 2,800
----- ------
Total Current Assets 172,521 88,592
PROPERTY AND EQUIPMENT - Net 5,756,939 5,724,399
OTHER ASSETS
Gooddwill 3,000,000 -
Deferred financing fees, net - -
Note receivable 204,000 71,900
------ ------
TOTAL ASSETS $9,138,460 $5,883,991
========== ========
The accompanying notes are an integral part of the consolidated financial
statements.
F-2
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2002 AND 2001
2002 2001
---- ----
CURRENT LIABILITIES
Accounts payable 36,949 43,500
----- ------
Total Current Liabilities 36,949 43,500
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Series One voting Convertible Preferred Stock.
$.001 par value, 10,000,000 shares authorized,
at September 30, 2002 and 2001 1,000,000
shares and 1,000,000 shares issued and
outstanding at September 30, 2002 and
September 30, 2001, respectively 1,000 1,000
Common stock, $.001 par value 25,000,000
shares authorized at September 30, 2002
and 2001, respectively; and 3,919,422 and
1,694,422 issued and outstanding at
September 30,2002 and September 30, 2001,
respectively 3,919 1,694
Additional paid-in capital 12,778,619 9,780,844
Accumulated deficit (3,682,027) (3,943,047)
---------- ----------
Total stockholders' equity (deficit) 9,101,511 5,840,491
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $9,138,460 $5,883,991
========== ========
The accompanying notes are an integral part of the consolidated financial
statements.
F-3
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2002
2002 2001
---- ----
REVENUE $ 926,128 $ -
COST OF REVENUE 302,878 -
------- --------
GROSS PROFIT (LOSS) 623,250 -
OPERATING EXPENSES
General and administrative 362,230 189,730
------- ---------
Total operating expenses 362,230 189,730
------- ---------
OPERATING LOSS 261,020 (189,730)
OTHER INCOME - Reversal of debt and payables - 711,628
------- ----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 261,020 521,898
Income taxes - -
------- --------
NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS $261,020 $521,898
======== ==========
BASIC AND DILUTED EARNINGS PER SHARE:
NET INCOME (LOSS) AVAILABLE TO COMMON
STOCKHOLDERS $ 0.10 $ 0.58
======== ==========
WEIGHTED NUMBER OF COMMON SHARES OUTSTANDING 2,644,422 897,704
========= ==========
The accompanying notes are an integral part of the consolidated financial
statements.
F-4
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
Additional
Preferred Stock Common Stock Paid-In
Shares Amount Shares Amount Capital
------ ------ ------ ------ -------
Balance, September 30,
2000 (Unaudited) - - 9,490,548 9,490 2,878,337
Issuance of common stock
for accrued payroll - - 1,350,000 1,350 243,650
Issuance of common stock
for accounts payable and
services - - 500,000 500 32,500
Reverse stock split - - (11,227,121) (11,227) 11,227
Cancellation of warrants
and subscriptions * - - - -
Issuance of preferred
stock for Wind Farm 1,000,000 1,000 - - 5,699,000
Issuance of common stock
for acquisition - - 127,995 128 254,872
Issuance of common stock - - 1,678,000 1,678 661,258
Caancelled shares - - (225,000) (225) -
Dividends paid` - - - - -
Net Income - - - - -
-------- --------- --------- ------- ---------
Balance, September 30,
2001 1,000,000 1,000 1,694,422 1,694 9,780,844
Common shares issued
from cancelled shares in
2001 put in wrong names
originally - - - 225,000 225 (225)
Acquisition of First
Washington Financial - - 2,000,000 2,000 2,998,000
Net Income - - - - -
-------- --------- --------- ------- ---------
Balance, September 30,
2002 1,000,000 1,000 3,919,422 3,919 12,778,619
========= ======= ========= ====== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
F-5
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - Continued
FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001
Common
Stock Accumulated
Warrants Subscribed Deficit Total
------ ------ ------ -------
Balance, September 30,
2000 451,000 100,000 (4,297,510) ( 858,683)
Issuance of common stock
for accrued payroll - - - 245,000
Issuance of common stock
for accounts payable and
services - - - 33,000
Reverse stock split - - - -
Cancellation of warrants
and subscriptions (451,000) (100,000) - (451,000)
Issuance of preferred
stock for Wind Farm - - - 5,700,000
Issuance of common stock
for acquisition - - - 255,000
Issuance of common stock - - - 662,936
Caancelled shares - - - (225)
Dividends paid` - - (167,435) (167,435)
Net Income - - 521,898 521,898
-------- --------- --------- --------
Balance, September 30,
2001 - - (3,943,047) 5,840,491
======== ========= =========== =========
Common shares issued
from cancelled shares in
2001 put in wrong names
originally - - - -
Acquisition of First
Washington Financial - - - 3,000,000
Net Income - - 261,020 260,020
-------- --------- --------- --------
Balance, September 30,
2002 $ - $ - $(3,682,027) 9,101,511
======== ========= =========== =========
The accompanying notes are an integral part of the consolidated financial
statements.
F-6
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2002 AND 2001
2002 2001
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) $ 261,898 $ 521,898
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 15,077 3,077
Loss on disposal of assets - 22,121
Impairment of long-term assets - -
Common stock issued for inventory,
acquisition costs, services, payables
and accrued payroll - 278,000
Change in net assets of discontinued
operaitons - -
Forfeit of deposit - -
Reversal of debt and payables - (711,628)
Discontinued operations - 44,880
Changes in assets and liabilities:
Prepaid expenses and other 2,600 46,600
Accounts payable ( 6,551) (206,123)
Accrued payroll - (245,000)
Other liabilities - (107,437)
-------- ------
Total adjustments 11,650 (875,510)
-------- ---------
Net cash used in operating activities 272,670 (353,612)
-------- --------
CASH FLOWS FROM INVESTIMMG ACTIVITIES
Purchases of property and equipment (42,941) (27,476)
Deposit - -
--------- --------
Net cash used in investing activities (42,941) ( 27,476)
The accompanying notes are an integral part of the consolidated financial
statements.
F-7
VOLT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2002 AND 2001
2002 2001
---- ----
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable $ - $ 225,762
Notes receivable (133,000) ( 71,000)
Deferred financiag fees ( 10,000) -
Proceeds from issuance of common stock
and warrants - 366,711
Dividends paid - ( 55,189)
--------- -------
Net cash provided from financing activities (143,000) 466,284
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 86,729 86,196
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 85,792 596
--- ------
CASH AND CASH EQUIVALENTS - END OF YEAR $172,521 $85,792
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the year for interest $ - $ -
======= =======
SUPPLEMENTAL DISCLOSURE OF NONCASH
INFORMATION
Common stock issued for acquisiiton
costs and services $3,000,000 $278,000
======== ========
Inventory distributed as a dividend $ - $112,246
========= ========
Capital contribution of Wind Farm $ - $5,700,000
======== ==========
Write off of common stock and warrants $ - $ 551,000
========= ==========
The accompanying notes are an integral part of the consolidated financial
statements.
F-8
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
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.
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.
In December, 1999, Deerbrook Publishing Group, Inc. closed its
printing and publishing operation. 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 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.
The Company has completed the formation 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 formation was done
simultaneously with the acquisition of First Washington.
The Company has two other power related wholly-owned
subsidiaries, Sun Volt, Inc. and Sun Electronics, Inc.
besides 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
Principles of Consolidation
The consolidated balance sheets for September 30, 2002 and
2001 and consolidated statements of operations, changes in
stockholders' equity and cash flows for the years then ended
includes Volt Inc. and its wholly-owned subsidiaries, Sun
Volt, Inc., Sun Electronics, Inc., Arcadian Renewable Power,
Inc. and First Washington.
F-8-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
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.
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
F-9-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 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.
Advertising expense was approximately $-0- and $830 for the
years ending September 30, 2002 and 2001, 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 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.
F-10-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings Per Share of Common Stock (Continued)
The following is a reconciliation of the computation for basic
and diluted EPS:
2002 2001
---- ----
Net income $261,020 $521,898
-------- --------
Weighted- average common shares
Outstanding (Basic) 2,644,422 897,704
Weighted-average common stock Equivalents:
Stock options - -
Warrants - -
Weighted-average common shares
Outstanding (Diluted) 2,644,422 897,704
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
September 30, 2002 is $5,000.
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 September 30, 2002, there are no
adjustments of goodwill due to impairment.
F-11-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Reclassifications
Certain amounts for the year ended September 30, 2001 have
been reclassified to conform with the presentation of the
September 30, 2002 amounts. The reclassifications have no
effect on net income for the year ended September 30, 2001.
NOTE 3- PROPERTY AND EQUIPMENT
Property and equipment consist of the following at September
30, 2002 and 2001:
2002 2001
---- ----
Wind Farm $5,700,000 $ 5,700,000
Furniture and fixtures 3,000 3,000
Computer and office equipment 67,417 24,476
---------- ---------
5,770,417 5,727,476
Less: accumulated depreciation 13,478 3,077
------------- ----------
Net book value $5,756,939 $ 5,724,399
========== ===========
The $22,121 of property and equipment at September 30, 2000
was disposed of in 2001. Depreciation expense for the years
ended September 30, 2002 and 2001 was $10,401 and $3,077,
respectively. There is no depreciation recognized on the Wind
Farm in 2002 or 2001 as it is non operational until placed in
service.
NOTE 4- NOTES RECEIVABLE
As of September 30, 2002 and 2001, notes receivable were
$204,000 and $71,000, respectively . There was no interest due
the Company on these loans, and the amounts due at September
30, 2002 and 2001, are deemed by management to have no
specific repayment terms.
NOTE 5- 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. The security deposit was expensed as part
of a rent payment in 2002.
F-12-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
NOTE 6- REVERSAL OF DEBT AND PAYABLES
In the year ended September 30, 2001, The Company recognized
$711,628 of reversals of debt and payables. This amount is
reflected in the consolidated statements of operations. Of
this amount $251,696 represents loans payable, $197,332
represents accounts payable and $262,600 represents accrued
payroll. Of those amounts written-off and taken into income,
there has not been any claims from creditors in the year ended
September 30, 2002.
NOTE 7- 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 preferred stock to
Denis C. Tseklenis in consideration for the Wind Farm.
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.
F-13-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
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 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.
NOTE 9- 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 September 30, 2002 and 2001, deferred tax assets consist of
the following:
2002 2001
---- -----
Net operating loss carryforwards $168,923 $ 257,670
Less: valuation allowance (168,923) (257,670)
---------- --------
$ -0- $ -0-
========== ==========
At September 30, 2002 and 2001, the Company had federal net
operating loss carryforwards in the approximate amounts of
$496,833 and $757,853, 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.
F-14-
VOLT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2002 AND 2001
NOTE 10- 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.
NOTE 11- SUBSEQUENT EVENT
In October 2002, the Company reached an agreement with
Mortgage-Matic of Greenbelt, MD to merge the operations of
Mortgage-Matic with First Washington. Mortgage-Matic
concentrates their business on FHA insured loans in the
$200,000 range. This accounts for approximately 70% of its
business. The merger should facilitate a streamlining of the
processing and underwriting procedures of the companies.
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 commence the operations of Opportunity Knocks.
F-15-
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VOLT INC.
(Registrant)
/s/ Denis C. Tseklenis
Chief Executive Officer
Director
January 14, 2003
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated
/s/ Denis C. Tseklenis
Director
January 14, 2003
/s/ Robert F. Rood
Director
January 14, 2003
/s/ James A. Sharon
Director
January 14, 2003
CERTIFICATION
I, Denis C. Tseklenis, certify that:
1. I have reviewed this annual report on Form 10KSB 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. 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. I have disclosed, based on my 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. 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: January 14, 2003
/s/Denis C. Tseklenis
Denis C. Tseklenis
Chief Executive Officer