Diversified Thermal Solutions 10QSB/A 2002 Q2 Quarterly report (small business) (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB/A

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter report ended June 30, 2002
or

( ) 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 000-28047

DIVERSIFIED THERMAL SOLUTIONS, INC.
(Exact name of small business issuer as registrant as specified in charter)


Nevada (State or other jurisdiction of incorporation or organization)		86-0880742 (I.R.S. Employer Identification No.)

4162 Delp St., Memphis, TN 83118
(Address of principal executive office)

Registrants telephone no., including area code (901) 365-7650

VOIP TELECOM, INC.
(Former name, changed since last report)

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), Yes [X] No [ ] and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date.


Class Common Stock, $0.0001		Outstanding as of June 30, 2002 4,776,149

TABLE OF CONTENTS


PART 1 FINANCIAL INFORMATION
	Item 1. Financial Statements
		Balance Sheets
		Statements of Operations
		Statement of Changes in Stockholders’ Equity
		Statements of Cash Flows
		NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGES IN SECURITIES
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON 8-K
SIGNATURES
CONSENT OF ARMANDO C. IBARRA

TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION


Heading		Page
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheets June 30, 2002 And December 31, 2001	5-6
	Consolidated Statements of Operations six months Ended June 30, 2002 and June 30, 2001	7
	Statement of Changes in Stockholders Equity	8-10
	Consolidated Statements of Cash Flows for the six months Ended June 30, 2002 and June 30, 2001	14
	Notes to Consolidated Financial Statements	16-22
Item 2.	Managements Discussion and Analysis and Result of Operations	23-24

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 2.	Changes in Security	24
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matter to be a Vote of Securities Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits and Reports on Form 8-K	25
	Signatures	S-1

PART 1 FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnotes necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

The unaudited balance sheet of the Company as of June 30, 2002, and the balance sheet derived from the Companys audited financial statement as of December 31, 2001, the unaudited statement of operations and cash flows for the six months ended June 30, 2002 and 2001, the statements of stockholders equity for the period from May 4, 1987 through June 30, 2002 are attached hereto and incorporated herein by this reference.

Operating results for the quarters ended June 30, 2002 are not necessarily indicative of the results that can be expected for the year ending December 31, 2002.

VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc)
Notes to Consolidated Financial Statements
As of June 30, 2002

ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
(A Professional Corporation)

Armando C. Ibarra,
C.P.A.
Members of the California Society of
Armando Ibarra, Jr.,
C.P.A.
Certified Public Accountants

The Board of Directors
VoIP Telecom, Inc.
(Formerly Presidents Telecom, Inc.)

We have reviewed the accompanying consolidated balance sheets of VoIP Telecom, Inc. (Formerly Presidents Telecom, Inc.) as of June 30, 2002 and December 31, 2001 and the related statements of operations, changes in stockholders equity, and cash flows for the three and six months ended June 30, 2002 and 2001, in accordance with Statements on Standards for Accounting Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of VoIP Telecom, Inc.

A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do no express such an opinion.

Based on our review, we are not aware of any modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.

ARMANDO C. IBARRA, CP

Chula Vista, California
July 25, 2002
24

296 H Street 2^nd floor, Chula Vista, CA 91910
Tel: (619) 422-1348 Fax: (619) 422-1465

VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Balance Sheets
As of June 30, 2002 and December 31, 2001

ASSETS


					2002		2001

CURRENT ASSETS
	Cash				$	—	$	8,743
	Note receivable					—		269,591
	Receivable — related party					—		28,781
	Loan receivable					—		200,822

		Total Current Assets				—		507,938
NET PROPERTY & EQUIPMENT						8,857		323,317
OTHER ASSETS
	Deposits					—		55,354
	Note receivable					399,057		—

			Total Other Assets			399,057		55,354
				TOTAL ASSETS	$	407,914	$	886,609

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)


	2002			2001

CURRENT LIABILITIES
Accounts payable	$	162,719		$	1,104,219
Loans payable		43,398			625,224

Total Current Liabilities		206,117			1,729,443

TOTAL LIABILITIES		206,117			1,729,443
STOCKHOLDERS’ EQUITY (DEFICIT)
Common stock ($0.0001 par value, 100,000,000 shares authorized; 4,776,149 and 40,722,972 shares issued and outstanding for June 30, 2002 and December 31, 2001, respectively.)		477			4,073
Paid-in capital		12,969,684			12,424,067
Deficit accumulated during development stage		(95,911	)		(95,911	)
Deficit		(12,672,453	)		(13,175,063	)

Total Stockholders’ Equity		201,797			(842,834	)

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)	$	407,914		$	886,609

Statements of Operations
For the Six and Three Months Ended June 30, 2002 and 2001


	Six Months			Three Months
	Ended			Ended
	June 30,			March 31,
	2002			2001
REVENUES
Sales	$	18,700		$	440,699
Cost of revenues		(17,840	)		—
Total Revenues		860			440,699
OPERATING COSTS
Depreciation & amortization		28,928			53,515
Bank charges		142			774
Bad debt expense		561			—
Administrative expenses		697,216			594,690
Total Operating Costs		726,847			648,979
OPERATING INCOME (LOSS)		(725,987	)		(208,280	)
OTHER INCOME & (EXPENSES)
Interest income		—			308
Loss on investment		—			(150,260	)
Exchange gain or loss		—			16
Gain on disposal of assets		1,229,809			—
Other expenses		(1,175	)		(632	)
Interest expense		(37	)		(63,066	)
Total Other Income & (Expenses)		1,228,597			(213,634	)
NET INCOME (LOSS)		502,610			(421,914	)
BASIC EARNINGS (LOSS) PER SHARE	$	0.13		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		3,942,005			31,946,725


	Three Months			Months
	ended			ended
	June 30			June 30
	2002			2001

REVENUES
Sales	$	—		$	256,070
Cost of revenues		—
Total Revenues		—			256,070
OPERATING COSTS
Depreciation & amortization		1,060			26,762
Bank charges		—			84
Bad debt expense		—			—
Administrative expenses		134,999			194,375
Total Operating Costs		136,059			221,221
OPERATING INCOME (LOSS)		(136,059	)		34,849
OTHER INCOME & (EXPENSES)
Interest income		—			301
Loss on investment		—			(12,867	)
Exchange gain or loss		—			1
Gain on disposal of assets		—			—
Other expenses		—			(632	)
Interest expense		—			(216	)
Total Other Income & (Expenses)		—			(13,413	)
NET INCOME (LOSS)	$	(136,059	)	$	21,436
BASIC EARNINGS (LOSS) PER SHARE	$	(0.03	)	$	0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		4,776,149			32,475,549

VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Statement of Changes in Stockholders’ Equity
From May 4, 1987(Inception) through June 30, 2002


			Common		Additional
	Common		Stock		Paid-In
	Shares		Amount		Capital

Inception, May 4, 1987		—	$	—		—
Common stock issued for cash		600,000		60		940
Net loss from inception on May 4, 1987 through December 31, 1997		—		—		—
Balance, December 31, 1997		600,000		60		940
Net loss for the year ended December 31, 1998		—		—		—
Balance, December 31, 1998		600,000		60		940
Common stock issued December 31, 1998 for cash at $0.15		60,000		6		149,994
Contributed capital		—		—		67
Common stock issued June 17, 1998 for cash at $0.84 per share		5,400		1		89,999
Stock issued on June 2, 2000 for services valued at $0.84		300		1		4,999
Net loss for the year ended December 31, 1999		—		—		—
Balance, December 31, 1999		665,700		68		245,999
Common stock issued on March 31, 2000 for cash at $0.54 per share		137,614		13		2,752,263
Common stock issued on March 31, 2000 for cash at $0.20		190,500		19		761,981
Stock offering costs		—		—		(607,928	)
Common stock issued on April 20, 2000 for services valued at $3.00 per share		3,000		1		179,999
Common stock issued on April 28, 2000 for services valued at $1.00 per share		54,030		5		1,080,595
Common stock issued on May 17, 2000 for services valued at $0.50 per share		1,250		1		12,499


	Stock
	Subscription			Retained
	Receivable			Earnings			Total

Inception, May 4, 1987	$	—		$	—		$	—
Common stock issued for cash		—			—			1,000
Net loss from inception on May 4, 1987 through December 31, 1997		—			(1,000	)		(1,000	)
Balance, December 31, 1997		—			(1,000	)		—
Net loss for the year ended December 31, 1998		—			(1,450	)		(1,450	)
Balance, December 31, 1998		—			(2,450	)		(1,450	)
Common stock issued December 31, 1998 for cash at $0.15		(150,000	)		—			—
Contributed capital		—			—			67
Common stock issued June 17, 1998 for cash at $0.84 per share		—			—			90,000
Stock issued on June 2, 2000 for services valued at $0.8		—			—			5,000
Net loss for the year ended December 31, 1999		—			(93,461	)		(93,461	)
Balance, December 31, 1999		(150,000	)		(95,911	)		156
Common stock issued on March 31, 2000 for cash at $0.54 per share		—			—			2,752,276
Common stock issued on March 31, 2000 for cash at $0.20		—			—			762,000
Stock offering costs		—			—			(607,928	)
Common stock issued on April 20, 2000 for services valued at $3.00 per share		—			—			180,000
Common stock issued on April 28, 2000 for services valued at $1.00 per share		—			—			1,080,600
Common stock issued on May 17, 2000 for services valued at $0.50 per share		—			—			12,500


			Common		Additional
	Common		stock		paid in
	Shares		Amount		capital
continued
Common stock issued on May 19, 2000 for services valued at $0.17 per share		8,642		1		28,804
Common stock issued to acquire 100% of Central America Fuel Technologies, Inc. on March 15, 2000		300		1		14,999
Options exercised at $0.42 per share		3,750		1		31,249
Options exercised at $0.21 per share		3,000		1		12,499
Options exercised at $0.21 per share		3,000		1		12,499
Common stock issued on June 30, 2000 for acquisition of ICE at $0.83 per share		150,000		15		2,499,985
Common stock issued on June 30, 2000 Access Network Limited at $0.83 per share		240,000		24		3,999,976
Common stock issued on August 30, 2000 for debt settlement at $0.20 per share		107,607		10		358,680
Common stock issued for debt settlement at $0.83 per share		5,467		1		90,751
Receipt of subscription receivable
Options exercised at $0.2084		600		1		2,499
Options exercised at $0.4167		2,130		1		17,749
Options exercised at $0.4167		120		1		999
Common stock issued for cash at $0.10 per share		6,000		1		11,999
Common stock issued for cash at $0.10 per share		25,000		2		49,998
Common stock issued for services at $0.16827 per share		26,000		2		87,498
Net loss for the year ended December 31, 2000
Balance, December 31, 2000		1,633,710		170		11,645,592


	Stock
	Subscription		Retained
	Receivable		earnings			Total
continued
Common stock issued on May 19, 2000 for services valued at $0.17 per share		—		—			28,805
Common stock issued to acquire 100% of Central America Fuel Technologies, Inc. on March 15, 2000		—		—			15,000
Options exercised at $0.42 per share		—		—			31,250
Options exercised at $0.21 per share		—		—			12,500
Options exercised at $0.21 per share		—		—			12,500
Common stock issued on June 30, 2000 for acquisition of ICE at $0.83 per share		—		—			2,500,000
Common stock issued on June 30, 2000 Access Network Limited at $0.83 per share		—		—			4,000,000
Common stock issued on August 30, 2000 for debt settlement at $0.20 per share		—		—			358,690
Common stock issued for debt settlement at $0.83 per share		—		—			90,752
Receipt of subscription receivable		150,000		—			150,000
Options exercised at $0.2084		—		—			2,500
Options exercised at $0.4167		—		—			17,750
Options exercised at $0.4167		—		—			1,000
Common stock issued for cash at $0.10 per share		—		—			12,000
Common stock issued for cash at $0.10 per share		—		—			50,000
Common stock issued for services at $0.16827 per share		—		—			87,500
Net loss for the year ended December 31, 2000		—		(11,281,619	)		(11,281,619	)
Balance, December 31, 2000		—		(11,377,530	)		268,232


				Common			Additional
	Common			Stock			Paid in
	stock			amount			capital
continued
Rescission of ICE at $0.10 per share		(150,000	)		(22	)		(299,978	)
Common stock issued on January 25, 2001 for services at $0.10 per share		90,000			9			179,991
Common stock issued on February 9, 2001 for debt service at $0.10 per share		31,425			2			62,848
Common stock issued on February 20, 2001 for services at $0.10 per share		1,014			1			2,027
Common stock issued on March 9, 2001 for services valued at $0.10 per share		12,500			1			24,999
Common stock issued March 10, 2001 for services valued at $0.10 per share		5,000			1			9,999
Common stock issued on June 30, 2001 for services valued at $0.10 per share		12,500			1			2,499
Common stock issued on July 17, 2001 at $0.10 per share		400,000			40			799,960
Net loss for the year ended December 31, 2001		—			—			—
Balance, December 31, 2001		2,036,149			203			12,427,937

Common stock issued on February 11, 2002 for services at $0.01 per share		100,000			10			19,990
Common stock issued on February 25, 2002 for services at $0.12 per share		20,000			2			47,998
Common stock issued on February 25, 2002 for services at $0.12 per share		2,200,000			220			263,801
Common stock issued on March 1, 2002 for services at $0.50 per share		420,000			42			209,958
Net income for the period ended June 30, 2002		—			—			—

Balance, June 30, 2002		2,036,149			203			12,427,937


	Stock
	Subscription		Retained
	Receivable		earnings			Total
continued
Recission of ICE at $0.10 per share		—		—			(300,000	)
Common stock issued on January 25, 2001 for services at $0.10 per share		—		—			180,000
Common stock issued on February 9, 2001 for debt service at $0.10 per share		—		—			62,850
Common stock issued on February 20, 2001 for services at $0.10 per share		—		—			2,028
Common stock issued on March 9, 2001 for services valued at $0.10 per share		—		—			25,000
Common stock issued March 10, 2001 for services valued at $0.10 per share		—		—			10,000
Common stock issued on June 30, 2001 for services valued at $0.10 per share		—		—			2,500
Common stock issued on July 17, 2001 at $0.10 per share		—		—			800,000
Net loss for the year ended December 31, 2001		—		(1,893,444	)		(1,893,444	)
Balance, December 31, 2001		—		(13,270,974	)		(842,834	)
Common stock issued on February 11, 2002 for services at $0.01 per share		—		—			20,000
Common stock issued on February 25, 2002 for services at $0.12 per share		—		—			48,000
Common stock issued on February 25, 2002 for services at $0.12 per share		—		—			264,021
Common stock issued on March 1, 2002 for services at $0.50 per share		—		—			210,000
Net income for the period ended June 30, 2002		—		502,610			502,610
Balance, June 30, 2002		—		(12,768,364	)		201,797

VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Statements of Cash Flows
For the Six and Three Months Ended June 30, 2002 and 2001


	Six Months			Three Months
	Ended			Ended
	June 30,			March 31,
	2002			2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	502,610		$	(421,914	)
Depreciation & amortization expense		28,928			53,515
(Increase) decrease in accounts receivable		298,372			(235,851	)
(Increase) decrease in loans receivable		(198,246	)		—
(Increase) decrease in officers advances		—			—
(Increase) decrease in accrued expenses		—			34,026
(Increase) decrease in deposits		55,354			—
Increase (decrease) in accounts payable		(894,288	)		(387,427	)
Increase (decrease) in accrued accounts payable		(47,211	)		—
Increase (decrease) in interest payable		—			3,266
Common stock issued for services		542,021			282,378
		287,540			(672,007	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of fixed assets		—			(6,000	)
Common stock retired in ICE rescission		—			(300,000	)
Disposal of equipment		285,543			1,050,156
Net cash provided (used) by investing activities		285,543			744,156
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loans payable		(581,826	)		(89,941	)
Net cash provided (used) by financing activities		(581,826	)		(89,941	)
Net increase (decrease) in cash		(8,743	)		(17,792	)
Cash at beginning of period		8,743			50,392
Cash at end of period	$	—		$	32,600
Supplemental Cash Flow Disclosures
Cash paid during year for interest	$	37		$	63,066
Schedule of Non-Cash Activities
Common stock issued for services	$	542,021		$	282,469
Common stock issued for acquisition of subsidiaries	$	—		$	—
Common stock retired in ICE rescission	$	—		$	—
	$	—		$	(300,000	)
Gain on disposal of Assets	$	1,229,809		$	—


	Three months			Three months
	ended			ended
	June 30			June 30
	2002			2001

CASH FLOWS FROM OPERATING ACTIVITIES	$	(136,059	)	$	21,436
Depreciation & amortization expense		1,060			26,762
(Increase) decrease in accounts receivable		—			(202,567	)
(Increase) decrease in loans receivable		—			—
(Increase) decrease in officers advances		—			—
(Increase) decrease in accrued expenses		—			34,026
(Increase) decrease in deposits		—			—
Increase (decrease) in accounts payable		2,100			156,220
Increase (decrease) in accrued accounts payable		113,371			—
Increase (decrease) in interest payable		—			3,266
Common stock issued for services		—			2,500
Net cash provided (used) by operating activities		(19,528	)		41,643
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of fixed assets		—			—
Common stock retired in ICE rescission		—			—
Disposal of equipment		—			(3,440	)
Net cash provided (used) by investing activities		—			(3,440	)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loans payable		19,528			(45,960	)
Net cash provided (used) by financing activities		19,528			(45,960	)
Net increase (decrease) in cash		—			(7,758	)
Cash at beginning of period		—			40,358
Cash at end of period	$	—		$	32,600
Supplemental Cash Flow Disclosures
Cash paid during year for interest	$	—		$	216
Schedule of Non-Cash Activities
Common stock issued for Services		—		$	2,591
Common stock issued for acquisition of subsidiaries	$	—			—
Gain on disposal of assets	$	—		$	—

NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS

VoIP Telecom, Inc. (the Company) was incorporated, May 4, 1987, under the laws of the state of Nevada, as Energy Realty Corporation. On July 31, 1993 the Companys name changed to Balcor International and on December 18, 1998 the name was again changed to Dimension House, Inc. As of December 31, 1998 the Company had no operations and in accordance with SFAS # 17 was considered a development stage company. As of December 31, 1998 the Company was authorized to issue 100,000,000 shares of $0.0001 par value of which 10,000,000 shares were outstanding. On October 28, 1999 the Company changed its name to Presidents Telecom, Inc.

Pursuant to an acquisition agreement and plan of merger dated as of March 15, 2000 between the Company then known as Presidents Telecom, Inc. and Central America Fuel Technology, Inc. (CAFT), a Nevada corporation, all the outstanding common shares of CAFT were exchanged for 5,000 restricted common shares of VoIP.

On April 17, 2000, the Company changed its name to VoIP Telecom, Inc.

On March 29, 2002 the Company sold Access Network Limited their subsidiary for a net gain of $1,229,809.

The Company delivers international long distance services via flexible, server-based networks consisting of re-sale arrangements with other long distance providers, various foreign termination relationships, VoIPs own international servers and leased/owned transmission facilities. Employing digital switching and transmission technologies supported by comprehensive monitoring and technical support personnel, the Company provides services in foreign countries.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The Company’s financial statements are prepared using the accrual method of accounting. The company has elected a December 31, year end.

b. Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

c. Basic Loss per Share

In February 1997, the FASB issued SFAS No. 128, Earnings Per Share, which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. SFAS No. 128 supersedes the provisions of APB No. 15, and requires the presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of SFAS No. 128 effective December 6, 1993 (inception).

Basic net loss per share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the reported periods. Diluted net loss per share reflects the potential dilution that could occur if a stock option and other commitments to issue common stock were exercised.

d. Estimates and Adjustments

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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.

e. Basis of Presentation and Considerations Related to Continued Existence (going concern)

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company’s management intends to raise additional operating funds through operations and/or debt offerings.

f. Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. See note 3 regarding income tax benefit.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

g. Property & Equipment

Property and equipment are recorded at cost. Minor additions renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives. Depreciation and amortization is calculated using straight-line and accelerated methods for income tax purposes (five years for vehicles and equipment, and seven years for office furniture).

Total depreciation for the six months ended June 30, 2002 is $28,928.

NOTE 3 — INCOME TAXES


	As of June 30,			As of December 31,
	2002			2001

Deferred tax assets:
Net operating loss carryforwards	$	4,368,927		$	4,544,840
Other		-0-			-0-
Valuation allowance		(4,368,927	)		(4,544,840	)
Net deferred tax assets	$	-0-		$	-0-

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.

NOTE 4 — NOTE RECEIVABLE

This Company sold various assets to Universal Commerce Limited in the amount of $399,057. The receivable is due on or before March 29, 2012. As of March 31, 2002 the note bears no interest rate.

NOTE 5 — RELATED PARTY TRANSACTION

At June 30, 2002 the corporation was indebted to a majority shareholder in the amount of $43,398. As of June 30, 2002 no interest has been accrued.

NOTE 6 — GOING CONCERN

As shown in the accompanying financial statements the Company has incurred a deficit of $12,768,364 since its inception in 1987. The ability of the Company to continue as a going concern is dependent on the significant generation of revenue from the Companys international long distance services. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 7 — PROPERTY & EQUIPMENT

Property is stated at cost. Additions, renovations, and improvements are capitalized. Maintenance and repairs, which do not extend asset lives, are expensed as incurred. Depreciation is provided on a straight-line basis over the estimated useful lives ranging from 27.5 years for commercial rental properties, 5 years for tenant improvements, and 5 — 7 years on furniture and equipment.


	March 31, 2002

Equipment	$	12,728

Total Equipment	$	12,728
Less Accumulated Depreciation		(3,871	)

Net Property and Equipment	$	8,857

NOTE 8 — STOCK TRANSACTIONS

As of December 31, 1998 the Company had 12,000,000 shares outstanding. On June 17, 1998, the Company issued 1,200,000 shares of common stock valued at $0.15 per share for cash.

On June 17, 1998 the Company issued 108,002 shares of common stock for cash valued at $1.00 per share.

On June 17, 1998. The Company issued 6,000 shares of common stock for services valued at $1.00 per share.

As of December 31, 1999 the Company had 13,314,002 shares of common stock outstanding.

On March 31, 2000, the Company issued 2,752,276 shares of common stock for cash valued at $0.54 per share.

On March 31, 2000, the Company issued 3,810,000 shares of common stock for cash valued at $0.20 per share.

On April 20, 2000 the Company issued 60,000 shares of common stock for services valued at $3.00 per share.

On April 28, 2000, the Company issued 1,080,600 shares of common stock for services valued at $1.00 per share.

On May 17, 2000, the Company issued 25,000 shares of common stock for services valued at $0.50 per share.

On May 19, 2000, the Company issued 172,834 shares of common stock for services valued at $0.17 per share.

On June 2, 2000 the Company issued 6,000 shares of common stock to acquire 100% of Central America Fuel Technologies, Inc. valued at $2.50 per share.

On June 30, 2000 the Company had 75,000 shares of common stock exercised valued at $0.42 per share.

On June 30, 2000 the Company had 60,000 shares of common stock exercised valued at $0.21 per share.

On June 30, 2000 the Company issued 3,000,000 shares of common stock to acquire ICE valued at $0.83 per share.

On June 30, 2000 the Company issued 4,800,000 shares of common stock to acquire Access Network Limited valued at $0.83 per share.

On August 30, 2000 the Company issued 2,152,140 shares of common stock for debt settlement valued at $0.20 per share.

On August 30, 2000 the Company issued 109,340 shares of common stock for debt settlement valued at $0.83 per share.

On October 1, 2000 the Company had 12,000 shares of common stock exercised valued at $0.2084 per share.

On October 4, 2000 the Company had 42,600 shares of common stock exercised at $0.4167 per share.

On October 12, 2000 the Company had 2,400 shares of common stock exercised valued at $0.4167 per share.

On December 27, 2000 the Company issued 120,000 shares of common stock for cash valued at $0.10 per share.

On December 27, 2000 the Company issued 500,000 shares of common stock for cash valued at $0.10 per share.

On December 31, 2000 the Company issued 525,000 shares of common stock for cash valued at $0.17 per share.

On January 1, 2001 the Company rescinded the issuance of 3,000,000 shares for the acquisition of ICE at a value of $0.10.

On January 25, 2001 the Company issued 1,800,000 shares of common stock for services valued at $0.10 per share.

On February 9, 2001 the Company issued 628,500 shares of common stock for debt settlement valued at $0.10 per share.

On February 20, 2001 the Company issued 20,280 shares of common stock for services valued at $0.10 per share.

On March 9, 2001 the Company issued 100,000 shares of common stock for services valued at $0.10 per share.

On March 10, 2001 the Company issued 250,000 shares of common stock for services valued at $0.10 per share. As of March 31, 2001 there were 35,472,972 shares of common stock outstanding.

On June 30, 2001 the Company issued 250,000 shares of common stock for services valued at $0.01 per share.

On July 17, 2001 the Company issued 8,000,000 shares of common stock for services valued at $0.10 per share.

On February 11, 2002 the Company issued 2,000,000 shares of common stock for services valued at $0.10 per share.

On February 25, 2002 the Company declared a 20:1 split of its outstanding common stock.

On February 25, 2002 the Company issued 20,000 shares of common stock for services valued at $0.12 per share.

On February 25, 2002 the Company issued 2,200,000 shares of common stock for services valued at $0.12 per share.

On March 1, 2002 the Company issued 420,000 shares of common stock for services valued at $0.50 per share. As of June 30, 2002 the Company had 4,776,149 shares of common stock outstanding.

NOTE 9 — ISSUANCE OF SHARES FOR SERVICES STOCK OPTIONS

The company has a nonqualified stock option plan, which provides for the granting of options to key employees, consultants, and nonemployees directors of the Company. The valuations of shares for services are based on the fair market value of services. The Company has elected to account for the stock option plan in accordance with paragraph 30 of SFAS 123 where the compensation to employees should be recognized over the period(s) in which the related employee services are rendered. In accordance with paragraph 19 of SFAS 123 the fair value of a stock option granted is estimated using an option-pricing model.

A total of 2,740,000 shares were issued for services to management and key employees for the six months ended June 2002.

NOTE 10 — SUBSEQUENT EVENT

In compliance with a board meeting held in May 2002, the Company on July 1, 2002 issued 15 million shares of common stock to acquire Global Holding , Inc.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Going Concern and Ability of the Company to Continue

The Company has a net operating loss carry forward of $12,768,364 since inception through June 30, 2002.

The Company’s consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established revenues sufficient to cover its operating costs and allow it to continue as a going concern. Management believes that the Company will soon be able to generate revenues sufficient to cover its operating costs. In the interim, the Company intends to raise additional capital through private placements of its common stock.

Liquidity and Capital Resources

As of June 30, 2002 the Company has $0 in current assets compared to current liabilities of $206,117. This is compared to current assets of $507,938 and current liabilities of $1,729,443 as of December 31, 2001. Management recognizes there is a severe impairment to the Company’s financial statements. The current liabilities are comprised of $206,117 in accounts and notes payable. Of this amount $43,398 is due to B. Grant Hunter, the Company’s President for cash he advanced for Company expenses.

Results of Operations

For the three months ended June 30, 2002 the Company had revenues of $0 and operating expenses including costs of revenues of $136,059 compared to revenues of $256,070 and operating expenses including costs of revenues of $221,221 as of June 30, 2001. General and Administrative costs decreased $59,376 for the three months ended June 30, 2002 due to the Company changing direction to enter the refractory services business. Depreciation and Amortization also decreased by $25,702 due to the fact all of the telecom equipment no longer being present on the Company’s financial statements. For the three months ended June 30, 2002 the Company had a net loss of $136,059 compared to a net gain of $21,436 for the same period the year before.

For the six months ended June 30, 2002 the Company had revenues of $18,700 and operating expenses including costs of revenues of $744,687 compared to revenues of $440,699 and operating expenses including costs of revenues of $648,979 as of June 30, 2001. General and Administrative expenses increased by $102,526 for the six months ended June 30, 2002. This can be attributed to the company ridding itself of the telecom assets in

the first quarter of 2002. Depreciation and Amortization decreased by $24,587 mostly due to the same reason. Interest expense decreased by approximately $63,000 due to the Company not having to finance any telecom equipment. The Company did have a gain of $1,229,809 on the disposition of the Access Communications subsidiary. For the six months ended June 30, 2002 the Company had net income of $502,610 compared to a net loss of $421,914 for the same period the year before.

Net Operating Loss

The Company has accumulated approximately $12,768,364 of net operating losses caryforwards as of June 30, 2002, which maybe offset against taxable income and income taxes in future years. The use of these to losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net loss carryforwards. The carryforwards expire in the year 2022. In the event of certain changes in control of the Company, there will be an annual limitation on the amount of carryforwards, which can be used.

Sale of Common Capital Stock

None to report.

Risk Factors and Cautionary Statements

Forward-looking statements in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company wished to advise readers that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed on or implied by the statements, including, but not limited to, the following: the ability of the Company to successfully meet its cash and working capital needs, the ability of the Company to successfully market its product, and other risks detailed in the Company’s periodic report filings with the Securities and Exchange Commission.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are presently no pending legal proceedings to which the Company or any of its subsidiaries are a party, to the best of knowledge of the Company. No actions against the Company are contemplated or threatened.

ITEM 2. CHANGES IN SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS

At a Special Meeting of the Shareholders on May 31, 2002 the security holders were asked to vote on the following:

The acquisition of Global Holdings, Inc.:

For Against Abstain

2,811,626

After the acquisition of Global Holdings, Inc. was ratified a motion was made to change the Company’s name to Diversified Thermal Solutions, Inc..

For Against Abstain

2,811,626

All motions at the Special Meeting of Shareholders were approved.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON 8-K

23.1 Consent of the firm of Armando C. Ibarra, Certified Public Accountant

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed in its behalf by the undersigned hereto duly authorized.


	DIVERSIFIED THERMAL SOLUTIONS, INC.



Dated: October 21, 2002



	By:	/s/ B. Grant Hunter
		B. Grant Hunter President

S-1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Voip Telecom, Inc,/Diversified Thermal Solutions, Inc. (the Company) on Form 10-Q(SB) for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Grant Hunter, Chief Executive Officer (or Chief Financial Officer) of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Grant Hunter
———————
Grant Hunter
Chief Executive Officer (Chief Financial Officer)

Date October 21, 2002

Diversified Thermal Solutions (DVTS) Inactive 10QSB/A2002 Q2 Quarterly report (small business) (amended)

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