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SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 (Mark
One)
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2004
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from
  
to
 Commission
File No. 811-08469
 ACORN HOLDING CORP.
  Delaware
    
    59-2332857(State or other jurisdiction of
incorporation or organization)
    
    (IRS Employer Identifi-
cation No.)2618 York Avenue, Minden, LA
    
    71055(Address of principal executive offices)
    
    (Zip code)
   
   o þ
 þ o




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TABLE OF CONTENTS  ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONITEM 3. CONTROLS AND PROCEDURESPART II OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESCertification of the CEOCertification of the CFOCertification of the CEO - Section 906Certification of the CFO - Section 906    Table of Contents  ACORN HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET AS OF
MARCH 31, 2004
(UNAUDITED)
 2004ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    303,161Total assets
    
    $
    303,161LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    1,883Total current liabilities
    
    
    1,883STOCKHOLDERS EQUITYCommon stock, $0.01 par value, 20,000,000 shares
authorized, 1,573,946 shares issued and outstanding
    
    
    15,739Additional paid-in capital
    
    
    11,772,377Accumulated deficit
    
    
    (11,486,838
    )Total stockholders equity
    
    
    301,278$
    303,161
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ACORN HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(UNAUDITED)
 March 31,2004
    
    
    2003Net sales
    
    $
    
    
    
    $
    Costs of Sales
    
    
    
    
    
    
    Gross (loss) profit
    
    
    
    
    
    
    Selling, general and administrative
    
    
    23,878
    
    
    
    316,660Loss from operations
    
    
    (23,878
    )
    
    
    (316,660
    )Other income (expense)Interest income / (expense)
    
    
    356
    
    
    
    (3,423
    )Total Other Income (Expense)
    
    
    356
    
    
    
    (3,423
    )Loss from
continuing operation
    
    
    (23,522
    )
    
    
    (320,083
    )Discontinued
operationsOperations
of discontinued component
    
    
    
    
    
    
    (299,505
    )Income tax expense
    
    
    
    
    
    
    Net Loss
    
    $
    (23,522
    )
    
    $
    (619,588
    )Loss per
share (basic and diluted) from continued operations
    
    $
    (0.01
    )
    
    $
    (0.20
    )Loss per
share (basic and diluted) from discontinued operations
    
    $
    
    
    
    $
    (0.19
    )Loss per
share (basic and diluted)
    
    $
    (0.01
    )
    
    $
    (0.39
    )Weighted average shares outstanding
- basic and diluted
    
    
    1,573,946
    
    
    
    1,573,946
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ACORN HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(UNAUDITED)
 March 31,2004
    
    
    2003Cash flows from operating activitiesNet (loss)
    
    $
    (23,522
    )
    
    $
    (619,588
    )Adjustments to reconcile net (loss) to net cash
(used in) operating activitiesDepreciation and amortization
    
    
    
    
    
    
    124,641(Increase) decrease in assetsAccounts receivable
    
    
    
    
    
    
    41,868Inventories
    
    
    
    
    
    
    139,397Prepaid expenses and other assets
    
    
    
    
    
    
    (81,678
    )Increase (decrease) in liabilitiesAccounts payable
    
    
    (3,415
    )
    
    
    99,083Accrued expenses
    
    
    
    
    
    
    114,717Net cash used in operating activities
    
    
    (26,937
    )
    
    
    (181,560
    )NET DECREASE IN CASH AND
CASH EQUIVALENTS
    
    
    (26,937
    )
    
    
    (181,560
    )Cash and cash equivalents at beginning of year
    
    
    330,098
    
    
    
    753,785Cash and cash equivalents at end of year
    
    $
    303,161
    
    
    $
    572,225Supplemental disclosure of cash flow informationCash paid for interest expense
    
    $
    
    
    
    $
    
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ACORN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(UNAUDITED)
 NOTE 1
    
    ORGANIZATION AND PURPOSEAcorn Holding Corp. (the Company) was incorporated under the laws of the State of
Delaware on September 8, 1983. Acorn is a holding company for its wholly-owned
subsidiaries, Recticon Enterprises, Inc. (Recticon) and AI Liquidating Corp. Recticon was
organized to engage in the business of manufacturing and processing of silicon wafers for
the semiconductor industry. AI Liquidating Corp. is an inactive subsidiary.NOTE 2
    
    BASIS OF PRESENTATIONInterim financial statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the financial position and results for the
periods. The 2004 balance sheet has been derived from the audited financial statements
contained in the 2003 Annual Report to Stockholders. These interim financial statements
conform with the requirements for interim financial statements and consequently do not
include all the disclosures normally required by accounting principles generally accepted
in the United States. The results for the three months ended March 31, 2004 are not
necessarily indicative of the results to be expected for the full year. Reporting
developments have been updated where appropriate.NOTE 3
    
    ACCOUNTING POLICIES(A) Use of EstimatesIn preparing financial statements in conformity with generally accepted accounting
principles, management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and expenses during the
reported period. Actual results could differ from those estimates.(B) Cash and Cash
EquivalentsThe Company considers all highly
liquid debt securities purchased with original or remaining
maturities of three months or less to be cash equivalents. The
carrying value of cash equivalents approximates fair value.(C) Loss Per ShareBasic and diluted net loss per common share is computed based upon the weighted average
common shares outstanding as defined by Financial Accounting Standards No. 128, Earnings
Per Share. As of March 31, 2004 and 2003, there were no common share equivalents
outstanding.(D) Income TaxesThe Company accounts for income taxes under the Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes (Statement 109). Under Statement 109, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying
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ACORN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(UNAUDITED)
 amounts of existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the enactment date.(E) Concentration of Credit RiskThe Company at times has cash in banks in excess of FDIC insurance limits and places its
temporary cash investments with high credit quality financial institutions. At March 31,
2004, the Company had approximately $176,000 in cash balances at financial institutions
which were in excess of the FDIC insured limits.(F) Business SegmentsThe Company operates in one segment and therefore segment information is not presented.(G) Recent Accounting PronouncementsStatement of Financial Accounting Standards (SFAS) No. 151, Inventory Costs  an
amendment of ARB No. 43, Chapter 4 SFAS No. 152, Accounting for Real Estate Time-Sharing
Transactions  an amendment of FASB Statements No. 66 and 67, SFAS No. 153, Exchanges of
Non-monetary Assets  an amendment of APB Opinion No. 29, and SFAS No. 123 (revised 2004),
Share-Based Payment, were recently issued. SFAS No. 151, 152, 153 and 123 (revised 2004)
have no current applicability to the Company and have no effect on the financial
statements.In January 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46, Consolidation of Variable Entities, (FIN No. 46) an interpretation
of Accounting Research Bulletin No. 51. FIN No. 46 requires that variable interest
entities be consolidated by a company if that company is subject to a majority of the risk
and loss from the variable interest entitys activities or is entitled to receive a
majority of the entitys residual returns or both. FIN No. 46 requires disclosures about
variable interest entities that companies are not required to consolidate but which the
company has a significant variable interest. The consolidation requirements will apply
immediately for newly formed variable interest entities created after January 31, 2003 and
entities established prior to January 31, 2003, in the first fiscal year or interim period
beginning after June 30, 2003. The adoption of FIN No. 46 is not expected to have a
material impact on our consolidated results of operations and financial position.
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ACORN HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
(UNAUDITED)
 In April 2003, the FASB issued Statements of Financial Accounting Standards No. 149 (SFAS
No. 149), an amendment to SFAS No. 133. SFAS No. 149 clarifies under what circumstances a
contract with initial investments meets the characteristics of a derivative and when a
derivative contains a financing component. This SFAS is effective for contracts entered
into or modified after June 30, 2003.NOTE 4
    
    SUBSEQUENT EVENTSOn June 6, 2005, the transactions contemplated under the Stock Purchase and Share Exchange
Agreement (the Purchase Agreement), dated May 27, 2005, by and among the Company, Valentec
and the two stockholders of Valentec (the Valentec Stockholders) were consummated.
Pursuant to the terms of the Purchase Agreement, the Company purchased all of the
outstanding shares of common stock of Valentec (i.e., 100 shares) in exchange for the
issuance by the Company to the Valentec Stockholders on a pro rata basis of 5,423,130
newly-issued shares of the Companys common stock, par value $.01 per share (the Common
Stock). The transaction will be treated as a reverse merger by the Company. The shares of
Common Stock are restricted securities that are exempt from the registration requirements of
the Securities Act of 1933, as amended, in reliance on the exemption provided by Rule 506 of
Regulation D, promulgated under the Securities Act of 1933, as amended. Following the
consummation of such transactions, the Valentec Stockholders, on an aggregate basis, own
approximately 77.47% of the issued and outstanding Common Stock of the Company. For a
detailed description of the transaction, see the Companys current report on Form 8-K, filed
on May 27, 2005.Pursuant to the terms of the Purchase Agreement, five of the six members of the board of
directors of the Company, namely Paula Berliner, George Farley, Ronald J. Manganiello,
Stephen A. Ollendorff and Bert Sager, resigned effective as of June 6, 2005. In addition,
Edward N. Epstein resigned as the Companys Chief Executive Officer and Larry V. Unterbrink
resigned as the Companys Secretary and Treasurer effective as of June 6, 2005. Mr. Epstein
is the sole remaining member of the Companys board of directors.Effective as of June 6, 2005, Mr. Zummo was appointed President and Chief Executive Officer
of the Company. Since 2000, Mr. Zummo has been Chairman of the Board, President and Chief
Executive Officer of Valentec.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 Cautionary Statement Regarding Forward-Looking Statements
  Nature of the Companys Present Operation and Plan of Operation
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ITEM 3. CONTROLS AND PROCEDURES
  
 PART II
OTHER INFORMATION
 
 ITEM 6. EXHIBITS
 3.1
    
    Certificate of Incorporation as filed and recorded with the Secretary of State
of Delaware, as amended  incorporated by reference to Exhibit 3.1 to the Companys
Annual Report on Form 10-KSB for the year ended December 31, 1997.3.3
    
    Bylaws, as amended, effective November 7, 1996  incorporated by reference to
Exhibit 3 to the Companys Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1996.31.1
    
    Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the
Exchange Act (furnished herewith).31.2
    
    Certification by the Chief Financial Officer pursuant to
Rule 13a-14(a) of the Exchange Act (furnished herewith).32.1
    
    Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (furnished herewith).32.2
    
    Certification of the Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (furnished herewith).
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ACORN HOLDING CORP.Date: October 21, 2005/s/ Robert A. ZummoRobert A. Zummo
Chairman, President
and Chief Executive Officer
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