##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

For the period ended September 30, 2002

Commission File Number: 000-28047

DIVERSIFIED THERMAL SOLUTIONS, INC.

---

(Exact name of issuer as specified in charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Nevada                                         |  | 94-3342064                          
|                                               |  |                                     
|(State or other jurisdiction
of incorporation) |  | (I.R.S. Employer
Identification No.)

4126 Delp Street, Memphis, Tennessee 38181

---

(Address of principal executive offices)


Registrants telephone number, including area code (901) 365-7650

Indicate by check mark 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), 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 issuers classes of
common stock, as of the latest practicable date.

|                                |  |                                             
|------------------------------- |  | --------------------------------------------
|Common Stock, $0.0001 Par value |  | 20,242,571 shares                           
|                                |  |                                             
|(Class of Stock)                |  | (Shares outstanding as of November 11, 2002)





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TABLE OF CONTENTS



|                                     |                                                                    |                                                                  |  |  |  |  |  | 
|------------------------------------ | ------------------------------------------------------------------ | ---------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION       
|                                     | Item 1. Financial Statements                                      
|                                     |                                                                    | Condensed Consolidated Balance Sheets                           
|                                     |                                                                    | Condensed Consolidated Statements of Operations (Unaudited)     
|                                     |                                                                    | Condensed Consolidated Statements of Cash Flows (Unaudited)     
|                                     |                                                                    | Notes to Condensed Consolidated Financial Statements (Unaudited)
|                                     | ITEM 2. Managements Discussion and Analysis or Plan of Operation.
|                                     | Item 3. Controls and Procedures                                   
|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 a Vote of Security Holders       
|                                     | Item 5. Other Information                                         
|                                     | Item 6. Exhibits and Reports on Form 8-K                          
|                                     | SIGNATURES                                                        
|                                     | CERTIFICATION                                                     
|Section 906 Certification of the CEO
|Section 906 Certification of the CFO



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##### Table of Contents



Diversified Thermal Solutions, Inc.INDEX TO FORM 10-QSB

|                              |  |                |  |                                                           |  |   
|----------------------------- |  | -------------- |  | --------------------------------------------------------- |  | --
|Part I. Financial Information |  |               
|                              |  |                |  |                                                           |  |   
|                              |  | Item 1.        |  | Financial Statements.                                     |  |   
|                              |  |                |  |                                                           |  |   
|                              |  |                |  | Condensed Consolidated Balance Sheet                      |  | 2 
|                              |  |                |  | Condensed Consolidated Statements of Operations           |  | 3 
|                              |  |                |  | Condensed Consolidated Statements of Cash Flows           |  | 4 
|                              |  |                |  | Notes to Condensed Consolidated Financial Statements      |  | 6 
|                              |  |                |  |                                                           |  |   
|                              |  | Item 2.        |  | Managements Discussion and Analysis or Plan of Operation |  | 10
|                              |  |                |  |                                                           |  |   
|                              |  | Item 3.        |  | Controls and Procedures.                                  |  | 11
|                              |  |                |  |                                                           |  |   
|Part II. Other Information    |  |               
|                              |  |                |  |                                                           |  |   
|                              |  | Item 1.        |  | Legal Proceedings.                                        |  | 11
|                              |  |                |  |                                                           |  |   
|                              |  | Item 2.        |  | Changes in Securities.                                    |  | 11
|                              |  |                |  |                                                           |  |   
|                              |  | Item 3.        |  | Defaults Upon Senior Securities.                          |  | 11
|                              |  |                |  |                                                           |  |   
|                              |  | Item 4.        |  | Submission of Matters to a Vote of Security Holders.      |  | 11
|                              |  |                |  |                                                           |  |   
|                              |  | Item 5.        |  | Other Information.                                        |  | 11
|                              |  |                |  |                                                           |  |   
|                              |  | Item 6.        |  | Exhibits and Reports on Form 8-K.                         |  | 12
|                              |  |                |  |                                                           |  |   
|                              |  | Signatures     |  | 13                                                       
|                              |  |                |  |                                                           |  |   
|                              |  | Certifications |  | 14                                                       

1



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements


Diversified Thermal Solutions, Inc.




Condensed Consolidated Balance Sheets

|                                            |                                                                                                                                                |                 |          |              |         |             |           |             |         | 
|------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------- | --------------- | -------- | ------------ | ------- | ----------- | --------- | ----------- | ------- | 
|                                            |                                                                                                                                                |                 |          | September 30 |         | December 31
|                                            |                                                                                                                                                |                 |          | 2002         |         | 2001       
|                                            |                                                                                                                                                |                 |          |              |         |            
|                                            |                                                                                                                                                |                 |          | (Unaudited)  |         | (Restated) 
|Assets                                      |                                                                                                                                                |                 |          |              |         |             |           |            
|Current assets:                             |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Cash                                                                                                                                           |                 | $        | 4,870        |         |             | $         | 8,790       |        
|                                            | Receivables:                                                                                                                                   |                 |          |              |         |             |           |             |        
|                                            |                                                                                                                                                | Trade, net      |          |              |        |             |           |             | 269,591 | 
|                                            |                                                                                                                                                | Related party   |          |              |        |             |           |             | 28,781  | 
|                                            |                                                                                                                                                | Note            |          |              |        |             |           |             | 200,823 | 
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Total receivables                                                                                                                              |                 |          |             |         |             |           | 499,195     |        
|                                            | Refundable income taxes                                                                                                                        |                 |          | 8,068        |         |             |           | 8,068       |        
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Total current assets                        |                                                                                                                                                |                 | 12,938   |              |         |             | 516,053   |            
|Equipment, furniture and fixtures           |                                                                                                                                                |                 |         |              |         |             | 569,448   |            
|Less accumulated depreciation               |                                                                                                                                                |                 |         |              |         |             | (246,131  | )          
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Net equipment, furniture and fixtures       |                                                                                                                                                |                 |         |              |         |             | 323,317   |            
|Other:                                      |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Restricted cash                                                                                                                                |                 |          | 27,535       |         |             |           |            |        
|                                            | Deferred bond and acquisition costs                                                                                                            |                 |          | 46,073       |         |             |           |            |        
|                                            | Other                                                                                                                                          |                 |          |             |         |             |           | 55,354      |        
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Total other assets                          |                                                                                                                                                |                 | 73,608   |              |         |             | 55,354    |            
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Total assets                                |                                                                                                                                                | $               | 86,546   |              |         | $           | 894,724   |            
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Liabilities and shareholders deficit       |                                                                                                                                                |                 |          |              |         |             |           |            
|Current liabilities:                        |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Accounts payable and accrued expenses                                                                                                          |                 | $        | 41,519       |         |             | $         | 1,104,319   |        
|                                            | Advances from related parties:                                                                                                                 |                 |          |              |         |             |           |             |        
|                                            |                                                                                                                                                | Shareholder     |          |              | 120,184 |             |           |             | 702,010 | 
|                                            |                                                                                                                                                | Related company |          |              | 92,107  |             |           |             |        | 
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Total advances from related parties                                                                                                            |                 |          | 212,291      |         |             |           | 702,010     |        
|                                            | Deferred revenue from related company                                                                                                          |                 |          | 20,385       |         |             |           |            |        
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Total current liabilities                   |                                                                                                                                                |                 | 274,195  |              |         |             | 1,806,329 |            
|Shareholders deficit:                      |                                                                                                                                                |                 |          |              |         |             |           |            
|                                            | Common stock, par value $0.0001, authorized
100,000,000 shares, issued and outstanding
20,242,571 shares in 2002 and 17,036,149
shares in 2001 |                 |          | 2,024        |         |             |           | 1,704       |        
|                                            | Additional paid-in capital                                                                                                                     |                 |          | 10,870,767   |         |             |           | 10,226,536  |        
|                                            | Accumulated deficit                                                                                                                            |                 |          | (11,060,440  | )       |             |           | (11,139,845 | )      
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Net shareholders deficit                   |                                                                                                                                                |                 | (187,649 | )            |         |             | (911,605  | )          
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            
|Total liabilities and shareholders deficit |                                                                                                                                                | $               | 86,546   |              |         | $           | 894,724   |            
|                                            |                                                                                                                                                |                 |          |              |         |             |           |            

See accompanying Notes to Condensed Consolidated Financial Statements.

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##### Table of Contents



Diversified Thermal Solutions, Inc.




Condensed Consolidated Statements of Operations (Unaudited)

|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |            |  
|------------------------------------------ | ----------------------------------------------------- | - | ------------------ | ------ | ----------------- | - | ---------- | ---------- | ---- | - | -------- | -------- | ---------- | - | ---------- | ---------- | -
|                                           |                                                       |   | Three Months Ended |        | Nine Months Ended
|                                           |                                                       |   | September 30       |        | September 30     
|                                           |                                                       |   |                    |        |                  
|                                           |                                                       |   | 2002               |        | 2001              |   | 2002       |            | 2001
|                                           |                                                       |   |                    |        |                   |   |            |            |     
|                                           |                                                       |   |                    |        |                   |   | (Restated) |            |      |   |          |          | (Restated)
|Revenues                                   |                                                       | $ | 38,939             |        |                   | $ |           |            |      | $ | 38,939   |          |            | $ |           |           
|Costs of goods sold                        |                                                       |   | 32,139             |        |                   |   |           |            |      |   | 32,139   |          |            |   |           |           
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Gross profit                               |                                                       |   | 6,800              |        |                   |   |           |            |      |   | 6,800    |          |            |   |           |           
|Operating expenses:                        |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|                                           | Management fees                                       |   |                    |       |                   |   |            | 7,500      |      |   |          |         |            |   |            | 55,000     |  
|                                           | Professional services                                 |   |                    | 49,637 |                   |   |            | 4,800      |      |   |          | 320,142  |            |   |            | 72,833     |  
|                                           | Salaries                                              |   |                    |       |                   |   |            |           |      |   |          | 208,729  |            |   |            |           |  
|                                           | General and administrative                            |   |                    | 20,454 |                   |   |            | 12,458     |      |   |          | 47,824   |            |   |            | 44,456     |  
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Total operating expenses                   |                                                       |   | 70,091             |        |                   |   | 24,758     |            |      |   | 576,695  |          |            |   | 172,289    |           
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Operating loss                             |                                                       |   | (63,291            | )      |                   |   | (24,758    | )          |      |   | (569,895 | )        |            |   | (172,289   | )         
|Other expenses:                            |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|                                           | Loss on disposal of equipment                         |   |                    | 8,857  |                   |   |            |           |      |   |          | 8,857    |            |   |            | 12,867     |  
|                                           | Other                                                 |   |                    |       |                   |   |            |           |      |   |          | 1,212    |            |   |            | 216        |  
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Total other expenses                       |                                                       |   | 8,857              |        |                   |   |           |            |      |   | 10,069   |          |            |   | 13,083     |           
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Loss from continuing operations            |                                                       |   | (72,148            | )      |                   |   | (24,758    | )          |      |   | (579,964 | )        |            |   | (185,372   | )         
|Discontinued operations:                   |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|                                           | Loss from operations of
discontinued business
segment |   |                    |       |                   |   |            | (1,095,497 | )    |   |          | (171,383 | )          |   |            | (1,356,797 | )
|                                           | Gain on disposal of business
segment                  |   |                    |       |                   |   |            |           |      |   |          | 830,752  |            |   |            |           |  
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Income (loss) from discontinued
operations |                                                       |   |                   |        |                   |   | (1,095,497 | )          |      |   | 659,369  |          |            |   | (1,356,797 | )         
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           
|Net income (loss)                          |                                                       | $ | (72,148            | )      |                   | $ | (1,120,255 | )          |      | $ | 79,405   |          |            | $ | (1,542,169 | )         
|                                           |                                                       |   |                    |        |                   |   |            |            |      |   |          |          |            |   |            |           

See accompanying Notes to Condensed Consolidated Financial Statements.

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Diversified Thermal Solutions, Inc.




Condensed Consolidated Statements of Cash Flows (Unaudited)

|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |            |          |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | -------------------------------------- | -------- | ------------------------------ | -------- | ---- | ---------- | ---------- | -------- | -
|                                                                                                   |                                                                      |                                        |          | Nine months ended September 30
|                                                                                                   |                                                                      |                                        |          |                               
|                                                                                                   |                                                                      |                                        |          | 2002                           |          | 2001
|                                                                                                   |                                                                      |                                        |          |                                |          |     
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            | (Restated)
|Operating activities                                                                               |                                                                      |                                        |          |                                |          |      |            |           
|Net income (loss)                                                                                  |                                                                      | $                                      | 79,405   |                                |          | $    | (1,542,169 | )         
|Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities: |                                                                      |                                        |          |                                |          |      |            |           
|                                                                                                   | Gain on sale of subsidiary                                           |                                        |          | (830,752                       | )        |      |            |           |         
|                                                                                                   | Depreciation and amortization                                        |                                        |          | 34,720                         |          |      |            | 80,297     |         
|                                                                                                   | Write-off of equipment                                               |                                        |          | 8,857                          |          |      |            |           |         
|                                                                                                   | Stock issued for services                                            |                                        |          | 644,551                        |          |      |            | 1,082,378  |         
|                                                                                                   | Changes in operating assets and liabilities,
net of subsidiary sale: |                                        |          |                                |          |      |            |            |         
|                                                                                                   |                                                                      | Receivables                            |          |                                | 71,984   |      |            |            | (255,055 | )
|                                                                                                   |                                                                      | Prepaid
expenses                       |          |                                |         |      |            |            | 2,906    |  
|                                                                                                   |                                                                      | Restricted cash                        |          |                                | (27,535  | )    |            |            |         |  
|                                                                                                   |                                                                      | Deferred bond and acquisition costs    |          |                                | (46,073  | )    |            |            |         |  
|                                                                                                   |                                                                      | Checks outstanding in excess of cash   |          |                                | 346,868  |      |            |            |         |  
|                                                                                                   |                                                                      | Accounts payable and accrued expenses  |          |                                | (130,089 | )    |            |            | (207,189 | )
|                                                                                                   |                                                                      | Deferred revenues from related company |          |                                | 20,385   |      |            |            |         |  
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Net cash provided by (used in) operating activities                                                |                                                                      |                                        | 172,321  |                                |          |      | (838,832   | )         
|Investing activities                                                                               |                                                                      |                                        |          |                                |          |      |            |           
|Purchases of equipment, furniture and fixtures                                                     |                                                                      |                                        | (15,542  | )                              |          |      | (6,000     | )         
|Proceeds from sale of equipment, furniture and
fixtures                                            |                                                                      |                                        |         |                                |          |      | 1,055,583  |           
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Net cash (used in) provided by investing activities                                                |                                                                      |                                        | (15,542  | )                              |          |      | 1,049,583  |           
|Financing activities                                                                               |                                                                      |                                        |          |                                |          |      |            |           
|Net (repayments) advances from related parties                                                     |                                                                      |                                        | (160,699 | )                              |          |      | 55,772     |           
|Common stock retired in rescission of previous
acquisition                                         |                                                                      |                                        |         |                                |          |      | (300,000   | )         
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Net cash used in financing activities                                                              |                                                                      |                                        | (160,699 | )                              |          |      | (244,228   | )         
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Net decrease in cash                                                                               |                                                                      |                                        | (3,920   | )                              |          |      | (33,477    | )         
|Cash at beginning of period                                                                        |                                                                      |                                        | 8,790    |                                |          |      | 50,439     |           
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Cash at end of period                                                                              |                                                                      | $                                      | 4,870    |                                |          | $    | 16,962     |           
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Supplemental disclosure of cash flow information                                                   |                                                                      |                                        |          |                                |          |      |            |           
|Cash paid for interest during the period                                                           |                                                                      | $                                      | 37       |                                |          | $    | 63,066     |           
|                                                                                                   |                                                                      |                                        |          |                                |          |      |            |           

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Diversified Thermal Solutions, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)

Supplemental schedule of noncash activities

During March 2002, the Company sold its wholly-owned subsidiary, Access
Communications, Inc. as further discussed in Note 2. This sale is summarized
as follows:

|                                         |                                              |   |          |          |  
|---------------------------------------- | -------------------------------------------- | - | -------- | -------- | -
|Net assets sold and liabilities assumed: |                                              |   |          |         
|                                         | Receivables                                  |   | $        | 427,211  |  
|                                         | Equipment, furniture and fixtures            |   |          | 295,282  |  
|                                         | Other assets                                 |   |          | 55,354   |  
|                                         | Checks outstanding in excess of bank balance |   |          | (346,868 | )
|                                         | Accounts payable and accrued expenses        |   |          | (932,711 | )
|                                         | Advances from related parties                |   |          | (329,020 | )
|                                         |                                              |   |          |         
|Net assets sold and liabilities assumed  |                                              | $ | (830,752 | )       
|                                         |                                              |   |          |         

Additionally, during the nine-months ended September 30, 2001, the Company
retired $300,000 in common stock as a result of the rescission of a previous
acquisition.

See accompanying Notes to Condensed Consolidated Financial Statements.

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Diversified Thermal Solutions, Inc.




Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
Diversified Thermal Solutions, Inc. (the Company), formerly known as VoIP
Telecom, Inc., have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information
and footnotes required by accounting principles generally accepted in the
United States of America for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three- and nine-month periods ended September 30, 2002 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2002.

The condensed consolidated financial statements include the accounts of
Diversified Thermal Solutions, Inc. and its wholly-owned subsidiaries, DT
Solutions, Inc. (formerly Global Holdings, Inc.) and Refractory & Industrial
Supply Group, Inc. All inter-company balances and transactions have been
eliminated.

Additionally, the condensed consolidated financial statements have been
retroactively restated as of December 31, 2001, and for the three- and
nine-month periods ended September 30, 2001, to reflect the Companys
acquisition of Global Holdings, Inc. discussed in Note 2 and the discontinued
operations discussed in Note.

The restated balance sheet at December 31, 2001, has been derived from the
audited financial statements at that date but does not include all of the
information and formats required by accounting principles generally accepted in
the United States of America for complete financial statements.

For further information, refer to the consolidated financial statements and
notes thereto included in the Companys annual report on Form 10-KSB for the
year ended December 31, 2001.

2. Discontinued Operations

Prior to March 29, 2002, the Company delivered international long distance
service via flexible, server-based networks consisting of re-sale arrangements
with other long distance providers, primarily through its wholly-owned
subsidiary, Access Communications, Inc. On March 29, 2002, the Company sold
100% of the common stock of Access Communications, Inc. to an independent third
party in exchange for a note receivable of $399,057. At the time of the sale,
the subsidiary had a net liability of $830,752 and, accordingly, the Company
reported a gain on sale of subsidiary of $1,229,809. Subsequent to this sale,
the Company determined the note receivable was not collectible and decreased
the receivable and the previously reported gain by $399,057. The sale of
Access Communications, Inc. represents the disposal of a business segment under
Financial Accounting Standards Board (FASB) Statement No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets. Accordingly, results of
this operation have been classified as discontinued and prior periods have been
restated.

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Diversified Thermal Solutions, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

2. Discontinued Operations (continued)

Operating results of this discontinued business segment are as follows:

|                                           |  |                    |            |                   |  |      |          |   |  |   |            |  
|------------------------------------------ |  | ------------------ | ---------- | ----------------- |  | ---- | -------- | - |  | - | ---------- | -
|                                           |  | Three Months Ended |            | Nine Months Ended
|                                           |  | September 30       |            | September 30     
|                                           |  | 2001               |            | 2002              |  | 2001
|                                           |  |                    |            |                   |  |     
|Revenues                                   |  | $                  | 206,772    |                   |  | $    | 18,700   |   |  | $ | 647,471    |  
|                                           |  |                    |            |                   |  |      |          |   |  |   |            |  
|Loss from discontinued operations          |  | $                  | (1,095,497 | )                 |  | $    | (171,383 | ) |  | $ | (1,356,797 | )
|Gain on disposal of business
segment       |  |                    |           |                   |  |      | 830,752  |   |  |   |           |  
|                                           |  |                    |            |                   |  |      |          |   |  |   |            |  
|Income (loss) from discontinued
operations |  | $                  | (1,095,497 | )                 |  | $    | 659,369  |   |  | $ | (1,356,797 | )
|                                           |  |                    |            |                   |  |      |          |   |  |   |            |  

Assets and liabilities of the discontinued operations were as follows as of
December 31, 2001:

|                                      |  |   |            |  
|------------------------------------- |  | - | ---------- | -
|Current assets                        |  | $ | 507,938    |  
|Net equipment, furniture and fixtures |  |   | 323,317    |  
|Other assets                          |  |   | 55,354     |  
|Current liabilities                   |  |   | (1,729,443 | )
|                                      |  |   |            |  
|Net liabilities                       |  | $ | (842,834   | )
|                                      |  |   |            |  

3. Ongoing Company Operations

Subsequent to the sale of Access Communications, Inc. discussed above,
the Company operated essentially as a shell company for the purpose of
acquiring businesses related to the manufacturing, installation and
distribution of materials used in the refractory industry.

On July 1, 2002, the Company acquired all of the outstanding stock of
Global Holdings, Inc., a related entity by common ownership and control,
via the issuance of 15 million shares of common stock. In accordance
with FASB Statement No. 141, Business Combinations, as a result of the
companies being under common control, the net liabilities of Global
Holdings, Inc. were recorded at their carrying amount of $166,665 as of
the date of the acquisition.

4. Related Party Transactions

All of the Companys revenues for the three months ended September 30,
2002, were from a related company. The Company has also recorded $20,385
in deferred revenues from this related company related to a pending sales
transaction with an international customer who required the Company to
maintain a certain balance in a restricted cash account. Additionally,
the Company has received advances from this related company and a
shareholder in order to meet its current obligations. These advances are
noninterest bearing and have no stated repayment terms.

7



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Diversified Thermal Solutions, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

5. Company Equity Transactions

During February 2002, the Companys Board of Directors declared a
twenty-for-one reverse stock split of the Companys common stock. All
references to the number of shares and per share amounts in the
accompanying condensed consolidated financial statements have been
adjusted to reflect the split on a retroactive basis.

During 2000, the Company recognized a $2.2 million write-off of goodwill
on a business acquisition that was rescinded in 2001. Accordingly, the
Companys accumulated deficit previously reflected the write-off. The
Company has reclassified this $2.2 million write-off from accumulated
deficit to additional paid-in capital to properly reflect the rescission
of this business acquisition.

During the nine months ended September 30, 2001, the Company issued
552,439 shares of common stock valued at $1,082,378 to certain
shareholders, employees and debtors for services and payments of debt.
The values were determined based on reported market price of the stock.

During the nine months ended September 30, 2002, the Company issued
3,206,422 shares of common stock valued at $644,551 to certain
shareholders and employees for their services. The values were
determined based on reported market price of the stock.

6. Commitments

The Company has entered into a letter of intent to acquire substantially
all of the assets of a company that manufactures specialized brick used
in the refractory business for approximately $9 million. The funding of
the acquisition is to be provided through industrial revenue bonds and
seller financing. The Company has received approval from the bond
issuing authority and expects to fund the acquisition during December
2002. The Company has incurred $46,073 in acquisition and bond costs
related to this acquisition which have been recorded as an asset pending
the completion of the acquisition.

7. Earnings (Loss) Per Share Data

Basic earnings (loss) per share assumes no dilution and is computed by
dividing income (loss) available to common shareholders by the weighted
average number of common stock outstanding during each period. Diluted
earnings per share reflect, in periods in which they have a dilutive
effect, the effect of common shares issuable upon the exercise of stock
options or warrants, using the treasury stock method of computing such
effects and contingent shares. As the Company has no outstanding stock
options or warrants, there is no diluted earnings (loss) per share.

8



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Diversified Thermal Solutions, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited) (continued)

7. Earnings (Loss) Per Share Data (continued)

The following table sets forth the computation of basic earnings (loss)
per share for the periods indicated:

|                                                     |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|---------------------------------------------------- |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                     |  | Three Months Ended |            | Nine Months Ended
|                                                     |  | September 30       |            | September 30     
|                                                     |  |                    |            |                  
|                                                     |  | 2002               |            | 2001              |  | 2002 |            | 2001
|                                                     |  |                    |            |                   |  |      |            |     
|Average shares outstanding                           |  |                    | 20,121,013 |                   |  |      | 16,936,149 |      |  |   | 19,316,171 |   |  |   | 16,727,911 |  
|Loss from continuing
operations per share            |  | $                  |           |                   |  | $    |           |      |  | $ | (0.03      | ) |  | $ | (0.01      | )
|                                                     |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|Income (loss) from
discontinued operations
per share |  |                    |           |                   |  |      | (0.07      | )    |  |   | 0.03       |   |  |   | (0.08      | )
|                                                     |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  
|Net income (loss) per share                          |  | $                  |           |                   |  | $    | (0.07      | )    |  | $ |           |   |  | $ | (0.09      | )
|                                                     |  |                    |            |                   |  |      |            |      |  |   |            |   |  |   |            |  

8. Going Concern

The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Companys continuing cash requirements, among other things, may indicate
the Company will be unable to continue as a going concern for a
reasonable period of time. Management recognizes the Company must
maintain profitable operations and generate additional funds in order to
continue as a going concern. The Company anticipates the recent changes
made in its operations will provide the Company future positive cash
flows necessary to continue as a going concern.

9



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ITEM 2. Managements Discussion and Analysis or Plan of Operation.

During 2001 and the first quarter of 2002, the Company operated in the
telecommunications industry, primarily through its wholly-owned
subsidiary Access Communications, Inc. On March 29, 2002, the Company
sold 100% of the stock of this subsidiary after which the Company
operated essentially as a shell company for the purpose of acquiring
businesses related to the manufacturing, installation and distribution of
materials used in the refractory business. The sale of the subsidiary
was treated for accounting purposes as a disposal of a business segment
and operations prior to the sale have been restated to reflect the
discontinued operations. On July 1, 2002, the Company acquired 100% of
the outstanding stock of Global Holding, Inc., a related company by
common ownership, via the issuance of 15 million shares of common stock.
As a result of the companies being under common control, in accordance
with generally accepted accounting principles, the assets and liabilities
of Global Holdings, Inc. were recorded at their carrying amount and the
financial statements prior to the acquisition have also been
retroactively restated to reflect this acquisition as if it had occurred
prior to the earliest period presented. Additionally, the Company formed
a second subsidiary during the third quarter of 2002, Refractory &
Industrial Supply Group, Inc., to specialize in the marketing and
distribution of refractory products.

As a result of the transactions occurring in 2002 discussed above,
significant changes have occurred in the Companys financial position and
operations between 2001 and 2002 and a detailed comparison is not
considered beneficial in regards to the Companys future operations.
Emphasis of the Company is now on growth through its refractory
businesses. The Company is in the process of obtaining a line of credit
with a financial institution that will fund future operating costs until
revenues can support the Companys operations. Additionally, the Company
has entered into a letter of intent to acquire substantially all of the
assets of a company that manufactures specialized brick used in the
refractory business for approximately $9 million. The funding of this
acquisition is to be provided through industrial revenue bonds and seller
financing and this purchase is expected to be completed in December 2002.

Forward-Looking Statements

This Form 10-QSB includes forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical facts, included or incorporated by
reference in this Form 10-QSB which address activities, events or
developments which the Company expects or anticipates will or may occur
in the future, expansion and growth of the Companys business and
operations, and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made made by the
Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as
other factors it believes are appropriate in the circumstances. However,
whether actual results or developments will conform with the Companys
expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the
business opportunities (or lack thereof) that may be presented to and
pursued by the Company; changes in laws or regulation; and other factors,
most of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Form 10-QSB are qualified
by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be
realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or
operations. The Company assumes no obligations to update any such
forward-looking statements.

10



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##### Table of Contents






Item 3. Controls and Procedures

(a)  Evaluation of Disclosure Controls and Procedures.

As required by new Rule 13a-15 under the Securities Exchange Act of
1934, within 90 days prior to the date of this report, the Company
carried out an evaluation under the supervision and with the
participation of the Companys management, including the Companys Chief
Executive Officer and acting Chief Financial Officer, of the effectiveness
of the design and operation of the Companys disclosure controls and
procedures. Based upon that evaluation and the limited nature of the
Companys current financial statements, the Chief Executive Officer and
acting Chief Financial Officer concluded that the Companys disclosure
controls and procedures are effective to ensure that information required
to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Securities and Exchange Commissions
rules and forms. In connection with the new rules governing this area,
we currently are in the process of further reviewing and documenting our
disclosure controls and procedures, including our internal controls and
procedures for financial reporting, and may from time-to-time make
changes aimed at enhancing their effectiveness and to ensure that our
systems evolve with our business.

(b)  Changes in Internal Controls.

None.




PART II. OTHER INFORMATION




Item 1. Legal Proceedings

The Company knows of no legal proceedings to which it is a party or
to which any of its property is the subject which are pending, threatened
or contemplated or any unsatisfied judgments against the Company.




Item 2. Changes in Securities

On July 1, 2002, the Company completed a stock exchange with the
shareolders of Global Holdings, Inc., in which the Company issued and
exchanged fifteen million shares (15,000,000) of common stock in exchange
for all of the issued and outstanding shares of Global Holdings, Inc.
The two shareholders of Global Holdings, Inc. were B. Grant Hunter, the
Companys Chief Executive Officer, and John Curry who is the
Secretary/Treasurer and also Director of the Company. The Company relied
upon Section 4(2) of the Securities Act as its exemption from
registration. The Company relied upon Section 4(2) of the Securities Act
because the offering did not involve a public offering and the investors
who received the Company common stock had detailed knowledge about the
Company by virtue of their positions with the Company and were capable of
evaluating the merits of their investment.




Item 3. Defaults Upon Senior Securities

None.




Item 4. Submission of Matters to a Vote of Security Holders

None.




Item 5. Other Information

None.

11



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Item 6. Exhibits and Reports on Form 8-K

(a). Exhibits

|     |  |                                                                                                                                                                                                                                                         
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1  |  | Agreement and Plan of Reorganization entered into as of July 1,
2002 by and between the Registrant and Global Holdings, Inc. is
incorporated herein by reference from Exhibit 2.1 to the
Registrants Report on Form 8-K/A dated as of October 16, 2002.
|     |  |                                                                                                                                                                                                                                                         
|99.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                                                                                                                                  
|     |  |                                                                                                                                                                                                                                                         
|99.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                                                                                                                                  

(b). Reports on Form 8-K

The Company filed a report on Form 8-K on July 16, 2002, as amended on
Form 8-K/A on October 16, 2002 regarding the Companys stock exchange
with Global Holdings, Inc.

The Company filed a report on Form 8-K on November 15, 2002 regarding its
dismissal of the firm of Armando C. Ibarra, Certified Public Accountants,
as its independent auditors and the Companys engagement of Coulter &
Justus, PC as its independent auditors.

12



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |                                                                         
|----------------------- |  | ------------------------------------------------------------------------
|                        |  | DIVERSIFIED THERMAL SOLUTIONS, INC.
Registrant                          
|                       
|Date: November 19, 2002 |  | /s/ B. Grant HunterB. Grant Hunter
President and Chief Executive Officer
|                       
|Date: November 19, 2002 |  | /s/ Julie DeanJulie Dean
Acting Chief Financial Officer                 

13



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##### Table of Contents






CERTIFICATION

I, B. Grant Hunter, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Diversified
Thermal Solutions, Inc.;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
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 us by others within those
entities, particularly during the period in which this quarterly
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 quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly 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.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                                                          
|----------------------- |  | -------------------------------------------------------------------------
|Date: November 19, 2002 |  | /s/ B. Grant HunterB. Grant Hunter
President, and Chief Executive Officer

14



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##### Table of Contents



CERTIFICATION

I, Julie Dean, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-QSB of Diversified
Thermal Solutions, Inc.;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
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 us by others within those
entities, particularly during the period in which this quarterly
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 quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material weaknesses
in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly 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.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                                        
|----------------------- |  | -------------------------------------------------------
|Date: November 19, 2002 |  | /s/ Julie DeanJulie Dean
Acting Chief Financial Officer

15