UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended October 31, 2002
--------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission File Number 0-30653
--------
Secured Diversified Investment, Ltd.
------------------------------------
(Name of small business issuer in its chapter)
Nevada 87-0375228
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1000 Quail Street, Suite 190, Newport Beach, California 92660
- ------------------------------------------------------- ----------
(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (949) 851-1069
---------------
Securities registered pursuant to section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
$.001 par value, common voting shares
-------------------------------------
(Title of class)
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [X ] No [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this form
10-KSB or any amendment to this Form 10-KSB. [ ]
The issuer's revenue for its most recent fiscal year was: -0-
The aggregate market value of the issuer's voting stock held as of February
11, 2003, by non-affiliates of the issuer was approximately $10,486.
As of February 11, 2003, the issuer had 2,349,540 shares of its $.001 par
value common stock outstanding.
Transitional Small Busines Disclosure Format. Yes [ ] No [X]
Documents incorporated by reference: See Exhibits
This Form 10-KSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. For
this purpose any statements contained in this Form 10-KSB that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may," "will,"
"expect," "believe," "anticipate," "estimate" or "continue" or comparable
terminology is intended to identify forward-looking statements. These
statement by their nature involve substantial risks and uncertainties, and
actual results may differ materially depending on a variety of factors,
many of which are not within the Company's control. These factors include
but are not limited to economic conditions generally and in the industries
in which the Company may participate; competition within the Company's
chosen industry, including competition from much larger competitors;
technological advances and failure by the Company to successfully develop
business relationships.
Item 1. Description of Business
Book Corporation of America ("Book") was incorporated under the laws
of the State of Utah on November 22, 1978 for the purpose of (1) engaging
primarily in the specific business of acquiring, developing, owning,
selling, leasing, licensing, and otherwise dealing with literary properties
and materials, copyrights, licenses, and other tangible and intangible
properties in connection with artistic ideas and endeavors, and to carry on
a negotiation for, production of, purchase of, sale, licensing,
distribution, advertising, and promotion of all rights, privileges, and
properties in the entertainment industry, including, but not limited to,
all types of theatrical motion pictures, theatrical stage plays, television
films, programs and commercials, radio recordings, books, and music
publications and music recordings and (2) acting as principal, agent, joint
venturer, partner, or in any other capacity which may be authorized or
approved by the Board of Directors of Book. Book had no "parents" or
"predecessors," as those terms are defined under the federal securities
laws.
In 1979, Book conducted an intrastate public offering of its common
stock. On October 10, 1988, the common stock of the Book was reverse split
50 to 1, and the par value was changed from $0.01 to $.005 per share. Also
in October 1988, Book acquired Sun Television Entertainment, Inc., bringing
assets of 36 motion picture screenplays (subsequently valued at
$-0-) and motion picture production equipment was transferred to Book by
Visto International, Inc.
Book filed a Form 10-SB Registration Statement with the United State
Securities and Exchange Commission ("SEC") on May 18, 2000, which
registration became effective on July 18, 2000.
On July 23, 2002, Book held a special shareholder meeting. At the
meeting, the shareholders approved a proposal to redomicle Book from Utah
to Nevada and to change its name. In accordance with Nevada corporate law,
a change of domicile is affected by merging the foreign corporation with
and into a Nevada corporation. For the sole purpose of changing domicile
from Utah to Nevada, Book formed Secured Diversified Investment, Ltd., a
Nevada corporation (the "Company"). On August 9, 2002, a merger between
Secured Diversified Investment, Ltd., and Book was completed. Upon
completion of merger Secured Diversified Investment, Ltd., became the
surviving corporation and Book was dissolved.
2
On September 18, 2002, the OTCBB symbol for the Company's common stock
was changed from BCAM to SCDI to reflect the name change.
In addition to approving the change of domicile, the shareholders also
approved amendments to the Company's Articles of Incorporation to change
the par value of the Company's Common Stock from $.005 to $.001 and to
authorize 50,000,000 shares of Preferred Stock, par value $.01.
Since its inception the Company has sustained continued losses and
currently has liabilities in excess of current assets. In addition, the
Company currently has no revenue producing activities and is dependent upon
its officers and directors to provide for its cash requirements. These
factors indicate considerable doubt as to the Company's ability to continue
as a going concern. To date the Company has been unsuccessful in its
efforts to develop its entertainment business.
As the Company has been unsuccessful in its pursuits to develop its
entertainment business, it has been determined that the Company will pursue
other business opportunities. Specifically, the Company has decided to
pursue the acquisition of ownership interests in a portfolio of properties
that are geographically and functionally diverse. The Company believes
that by acquiring interests in properties that are geographically and
functionally diverse its portfolio will be more stable and less susceptible
to devaluation resulting from regional economic downturns and market
shifts. The Company is currently focusing on acquiring properties in
markets with strong regional economies and where a sufficient number of
properties are available to help insure a liquid market. To this end, the
Company has entered into negotiations with Seashore Diversified Investment
Company ("Seashore"), a Maryland corporation, to acquire real estate
holdings from Seashore in exchange for restricted shares of our Preferred
and Common Stock. Seashore is a real estate investment trust and is in the
business of acquiring, selling and managing real estate holdings.
While the parties have not finalized all the terms of the agreement,
it is anticipated that the Company will acquire two properties, interests
in two limited liability companies, and a general partnership interest in a
limited partnership in exchange for 3,630,000 shares of restricted common
stock of the Company and 7,370,000 shares of Preferred Convertible Stock of
the Company. The Preferred shares will have the same voting rights as the
Common Stock. The primary assets of the limited liability companies and
the limited partnership are real estate holdings. Following is a brief
description of the assets the Company is proposing to acquire.
3
Strip Mall, Orange, California
------------------------------
The Company is seeking to acquire a strip mall which consists of six
retail rental units totaling approximately 9,500 square feet located on
Katella Avenue in Orange, California. Currently, five of the six units are
rented. Upon acquisition, the Company intends to rent the final unit. The
rental units are of varying sizes. One tenant, a clothing manufacturer,
currently occupies 4,320 square feet or 45% of the strip mall. The strip
mall is currently generating total monthly income of about $10,350 or $1.08
per square foot. The rental rates for the individual units range from
$1.04 to $1.41 per square foot.
The strip mall is located on approximately 35,800 square feet of
leased ground owned by a non-affiliated third party. The lease has a 52
year term that expires in March 2017. The lease payment is $3,000 per
month. Commencing June 1, 2007, the annual rent shall revert to 7% of the
fair market value of the land. There is a first trust deed in the amount
of $350,000, which is due and payable on August 15, 2003. The current
monthly payment, which covers only interest, is $3,500. The interest rate
is 12% per annum. There is also a second trust deed in the amount of
$15,500. The monthly payment is $155 per month. This payment covers only
the interest on the loan. The outstanding balance is approximately
$5,000.00. Delinquent real property taxes for the 2001-2002 tax year in
the amount of approximately $8,500 are due and owing.
The fair market value of this strip mall is estimated to be
approximately $600,000.
Shopping Mall, Dickinson, North Dakota
--------------------------------------
The Company is seeking to acquire a 100% interest in the nearly 90,000
square foot enclosed T-Rex Mall Plaza in Dickinson, North Dakota. The T-
Rex Mall is approximately 80% occupied at this time. The purchase price of
the T-Rex Mall is $3,400,000.00. The Mall was recently appraised at
$3,200,000.00. The outstanding indebtedness on the Mall is $1,475,000.00.
Currently the ground on which the Mall is located is under contract
for deed. Seashore has negotiated to sell the ground on which the Mall is
built for $1,600,000.00 with a leaseback of the ground from the buyer. For
the first year of the lease, the payment will be $13,708. Beginning the
second year of the lease, the monthly lease payment will be adjusted
annually in step with the consumer pricing index, but such increases shall
not exceed 3% nor be less than 2% in any given year. The term of the
ground lease will be 50 years. Between the 24th month and the 48th month
of the lease, the Company will have the option to repurchase the ground.
The price to buy back the ground will be $1,745,000. Following execution
of the deed all outstanding obligations on the Mall structure will be paid
in full and it will be owned free of all encumbrances.
Travelodge, Dickinson, North Dakota
-----------------------------------
The Company is also negotiating the acquisition of a general
partnership interest in a limited partnership. The primary asset of the
limited partnership is a Travelodge Hotel in Dickinson, North Dakota. The
general partnership interest represents a 49% interest in the limited
partnership. The Travelodge is a 149 unit full service hotel and has the
largest meeting facilities in Dickinson. A 125 seat restaurant and a 110
seat cocktail lounge are located in the Hotel. The Hotel is approximately
318,500 square feet.
4
The Hotel is located just off of I-94 at exit 61 and Highway 22, and
is near such attractions as the Theodore Roosevelt National Park, the
Badlands, Dickinson State University, Dakota Dinosaur Museum, and a golf
course.
The limited partnership purchased the Travelodge for $4,000,000 in
2001. The total outstanding indebtedness is approximately $1,200,000.00.
The first trust deed is $800,000.00 and the second trust deed is
$400,000.00. The notes mature August and June 2003, respectively.
The Hotel is currently losing money on a monthly basis. The Hotel
will require approximately $250,000 in deferred maintenance in the
immediate future.
Strip Mall, Spencer Springs, Las Vegas, Nevada
----------------------------------------------
The Company is seeking to acquire a 50% interest in a limited
liability company that owns a strip mall in the Spencer Springs area of Las
Vegas, Nevada. The strip mall is located near McCarren International
Airport in an area surrounded by new complexes, high end residential
developments, apartments and condominium projects. It is the only retail
center in the immediate area. Spencer Springs has 14 retail rental units
totaling 24,336 square feet. Currently approximately 23,136 square feet or
95% of the strip mall is currently occupied. The strip mall enjoys a mix
of national, regional and local tenants.
The strip mall was built in the early 1990's and has been well
maintained. No significant renovations are anticipated in the immediate
future.
Spencer Springs is managed by Equity Group of Las Vegas, a
professional property management group. The Company pays Equity Group a
monthly fee of approximately $1,740 to manage Spencer Springs. The Company
anticipates the retention of Equity Group to manage the properties.
Spencer Springs has an estimated market value of $3,750,000. The
outstanding indebtedness on Spencer Springs was approximately $2,135,000 on
December 31, 2002. The note on the property matures in August 2008, with a
balloon payment of approximately $1,900,000 due on maturity. The annual
interest rate on the note is 9.7%.
Pursuant to an agreement between Seashore and the other two members of
the limited liability company that own Spencer Springs, Seashore is
required to purchase the other 50% interest in the limited liability
company by August 2003 for $1,800,000. The purchase price may be paid in
cash or securities at the option of the other two members, one of whom is
an officer and director of the Company. If Seashore is unable to meet this
obligation by August 2003, the owners of the other 50% interest in the
limited liability company are entitled to acquire Seashore's 50% interest
for $100. If the Company acquires Seashore's interest in the limited
liability company, the Company will be subject to this agreement.
5
Decatur Square, Las Vegas, Nevada
---------------------------------
Finally, the Company is seeking to acquire a 50% interest in a limited
liability company that owns a strip mall known as Decatur Square. This
strip mall is located on the corner of Decatur and Lake Mead Boulevard in
Las Vegas, Nevada. It is in a prominent location with a high traffic
count. Decatur Square is surrounded by mid to high end residential
developments.
Decatur Square currently has 12 retail rental units totaling approximately
16,500 square feet. Currently, approximately 13,500 square feet or 82% of
the strip mall is occupied. Upon acquisition, the Company will seek to
lease the remaining unoccupied space. The units vary in size from 950
square feet to 2,000 square feet. Currently, there are three individual
tenants that each rent more than 10% of our total square footage.
Decatur Square was built in 1990 and has been well maintained. No
significant renovations are anticipated in the immediate future.
Decatur Square is also managed by Equity Group of Las Vegas, a
professional property management group for a monthly fee of approximately
$1,000. The Company anticipates the retention of Equity Group to manage
the properties.
The estimated fair market value of the property is $1,500,000. As of
December 31, 2002, the property was encumbered for approximately
$1,090,000. The rate of interest on this encumbrance is 9%.
Pursuant to an agreement between Seashore and the other members of the
limited liability company, with the acquisition of the Seashore's interest
in the limited liability company, Seashore is required to purchase the
other 50% interest in the limited liability company from its other two
members by August 2003 for $770,000. The purchase price may be paid in
cash or securities, at the option of the other two members, one of whom is
an officer and director of the Company. If Seashore is unable to meet this
obligation by August 2003, the owners of the other 50% interest in the
limited liability company are entitled to acquire Seashore's 50% interest
for $100. If the Company acquires Seashore's interest in the limited
liability company, the Company will be subject to this agreement.
Employees
The Company currently has 3 full time employees including its
officers.
6
Reports to Security Holders
- ---------------------------
The public may read and copy any materials filed by the Company with
the SEC at the SEC's Public Reference Room at 150 Fifth Street, N.W.,
Washington, D.C. 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
Company is an electronic filer and the SEC maintains an Internet site that
contains reports and other information regarding the Company which may be
viewed at http://www.sec.gov.
Item 2. Description of Property
The Company currently uses one-half of a 600 square foot office
condominium located at 1000 Quail Street, Suite 190, in Newport Beach
California for its corporate offices. The Company pays no rent for this
space pursuant to a verbal agreement with its chief executive officer,
Clifford L. Strand, who holds the lease on the office condominium. This
free rent is of nominal value. The Company has no lease agreement with Mr.
Strand and occupies the space subject to his will. If at any time Mr.
Strand decides he needs or wants the space, the Company has no right to
continue to occupy the space and could be forced to move. The Company is
currently seeking new office space.
The Company owns filming equipment, including a filming truck,
cameras, lights, editing equipment, and other equipment valued at a total
depreciated value of $-0-.
The Company holds nine films in its inventory for licensing or market
exploitation. These films have been valued at historical cost of
$2,407,000. In 1999, the films were revalued to $-0- because the Company
was unable to market them.
Additionally, the Company owns 412 NTSC 3/4 inch format master video
cassettes. These cassettes were valued at a historical cost of $40,000,
and have been revalued to $-0-.
The Company holds the motion picture rights to thirty-six screen
plays, three novels, two short stories and fifty story titles and synopses.
These rights and screen plays have no current net asset value.
As disclosed in Item 1 above, the Company is currently negotiating the
acquisition of five properties from Seashore Diversified Investment, Ltd.,
for more information regarding the properties the Company is seeking to
acquire, see Item 1, above.
Item 3. Legal Proceedings.
To the knowledge of management, there is no material litigation
pending or threatened against the Company or its management. Further, the
Company is not aware of any material pending or threatened litigation to
which the Company or any of its directors, officers or affiliates are or
would be a party.
7
Item 4. Submission of Matters to a Vote of Securities Holders
No matters were submitted to a vote of security holders during the
quarter ended October 31, 2002.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
Market Price of and Dividends on the Company's Common Equity and Other
Shareholder Matters.
The Company's shares are currently traded on the Over-the-Counter
Bulletin Board ("OTCBB") under the symbol SCDI. As of January 24, 2003,
the Company had approximately 247 shareholders holding 2,349,540 common
shares. Of the issued and outstanding common stock, approximately 349,540
are free trading, the balance are "restricted securities" as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission.
The Company has never declared a dividend on its common shares.
The published bid and ask quotations from the first available date
through the first available price are included in the chart below. These
quotations represent prices between dealers and do not include retail
markup, markdown or commissions. In addition, these quotations do not
represent actual transactions.
Closing Bid Closing Ask
2001 High Low High Low
- ---- --------- --------- --------- ---------
Oct. 4 (First Available) .07 .03 None None
thru Dec. 31
2002
- ----
Jan. 2 thru .07 .05 None None
Mar. 28
Apr. 1 thru .06 .06 None None
June 28
July 1 thru .08 .06 None None
Sept. 30
Oct. 1 thru .08 .08 None None
Dec 31
The above information was obtained from Pink Sheets, LLC, located at
304 Hudson Street, 2nd Floor, New York, New York 10013.
8
Currently, none of the Company's common shares are subject to
outstanding options or warrants to purchase, or securities convertible
into, common equity of the Company. The Company has no agreements to
register shares on behalf of shareholders currently holding unregistered
securities. The Company has not paid, nor declared, any dividends since
its inception and does not intend to declare any such dividends in the
foreseeable future. The Company's ability to pay dividend is subject to
limitations imposed by Nevada law.
Recent Sales of Unregistered Securities
None.
Item 6. Plan of Operation
Our plan of operation for the next twelve months is to acquire
ownership interests in a portfolio of properties that are geographically
and functionally diverse. The Company believes that by acquiring
properties that are geographically and functionally diverse its portfolio
will be more stable and less susceptible to devaluation resulting from
regional economic downturns and market shifts. The Company is currently
focusing on acquiring properties in markets with strong regional economies
and where a sufficient number of properties are available to help insure a
liquid market.
Specifically, as discussed above, the Company is currently in
negotiations with Seashore Diversified Investment Company ("Seashore"), a
Maryland corporation, certain real estate holdings from Seashore in
exchange for restricted shares of our Preferred and Common Stock. Seashore
is a real estate investment trust and is in the business of acquiring,
selling and managing real estate holdings.
While the parties have not finalized all the terms of an agreement,
the Company is seeking to acquire two properties, interests in two limited
liability companies, and a general partnership interest in a limited
partnership in exchange for 3,630,000 shares of restricted common stock of
the Company and 7,370,000 shares of Preferred Convertible Stock of the
Company. The Preferred shares will have the same voting rights as the
Common Stock. The primary assets of the limited liability companies and
the limited partnership are real estate holdings.
In addition to acquiring real estate holdings from Seashore, the
Company will seek to acquire up to twelve additional real estate properties
in the next twelve months. The Company has identified potential
acquisition properties in Newport Beach, California, Bismark North Dakota,
Las Vegas, Nevada, Wichita, Kansas and Texas. The Company will primarily
seek to acquire properties either through the issuance of its preferred and
common stock or through the use of tenants in common agreements. The
Company will rely on the experience and contacts of current management and
the board of directors to assist it in identifying suitable acquisition
candidates.
9
As of October 31, 2002, the Company had $20,074 cash on hand and has
experienced losses from inception. As of October 31, 2002, the Company had
total liabilities amounting to $75,958. Since inception the Company has
sustained continued losses. Currently, the Company currently has no
revenue producing activities and is completely dependent upon its officers
and directors to provide for its cash requirements. These factors
indicate considerable doubt as to the Company's ability to continue as a
going concern. Moreover, while the Company hopes to be successful in its
efforts to acquire and manage real estate holdings, there is no guarantee
that the Company will be successful. Many factors, some of which may be
beyond the control of the Company, may make it difficult or impossible for
the Company to be successful in its new business pursuits. These factors
include, but are not limited to the ability of the Company to locate,
identify and acquire properties that can be operated or sold at a profit;
the ability of the Company to acquire properties for its securities or
pursuant to tenants in common agreements, as noted herein, the Company has
very limited cash or other assets available to it to use for the
acquisition of properties; the ability of management to efficiently manage
and operate the properties it acquires, particularly given that the Company
will seek to acquire properties in diverse markets; changes in interest
rates; regional economic downturns in markets where the Company owns
properties or a general economic downturn across the country; and the
inability of the to liquidate properties in downturning markets.
Item 7. Financial Statements
[This space intentionally left blank.]
10
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Financial Statements
October 31, 2002
/Letterhead/
INDEPENDENT AUDITOR'S REPORT
- ----------------------------
Stockholders and Directors
Secured Diversified Investment, Ltd.
We have audited the accompanying balance sheet of Secured Diversified
Investment, Ltd., as of October 31, 2002 and 2001, and the related
statements of operations, stockholders' equity, and cash flows for the
years then ended. These financial statements are the responsibility of the
company's management. Our responsibility is to express and opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards, in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Secured Diversified
Investment, Ltd., at October 31, 2002 and 2001, and the results of its
operations and cash flows for the years then ended in conformity with
generally accepted accounting principles, in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6, the
Company's recurring operating losses and lack of working capital raise
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to those matters are also described in Note 6.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/S/ Bierwolf, Nilson & Associates
Salt Lake City, UT
February 7, 2003
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Balance Sheet
October October
31, 2002 31, 2001
---------- ----------
Assets
Current Assets
- --------------
Cash $ 20,074 $ -
---------- ----------
Total Assets $ 20,074 $ -
========== ==========
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ 20,532 $ 37,336
Taxes Payable - 450
Interest Payable 426 -
Related Party Note Payable (Note #3) 55,000 -
---------- ----------
Total Current Liabilities 75,958 37,786
Stockholders' Equity
- --------------------
Preferred Shares 50,000,000 Authorized;
$0.01 Par Value, Zero Issued & Outstanding - -
Common Shares 100,000,000 Authorized;
$0.001 & $0.005 Par Value Respectively
2,349,540 Shares Issued & Outstanding 2,350 11,748
Paid In Capital 3,051,109 3,041,711
Contributed Capital 61,189 -
Accumulated Deficit (3,170,532) (3,091,245)
---------- ----------
Total Stockholders' Equity (55,884) (37,786)
---------- ----------
Total Liabilities & Stockholders' Equity $ 20,074 $ -
========== ==========
See accompanying notes to financial statements
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Statement of Operations
October October
31, 2002 31, 2001 Accumulated
------------ ------------ ------------
Revenues $ - $ - $ 250,000
- -------- ------------ ------------ ------------
Total Revenues - - 250,000
Operating Expenses
- ------------------
Bad Debt - - 200,000
Depreciation - - 200,000
Failed Offering Costs - - 5,917
General & Administrative 14,473 21,229 53,256
Production Costs - - 132,448
Professional Fees 64,381 - 64,381
Write Down of Film Inventory - - 2,563,500
Write Off of Investments &
Other Assets - - 200,247
------------ ------------ ------------
Total Operating Expenses 78,854 21,229 3,419,749
------------ ------------ ------------
Operating Income (Loss) (78,854) (21,229) (3,169,749)
Other Income (Expense)
- ----------------------
Interest (Expense) (433) - (433)
------------ ------------ ------------
Total Other (Expense) (433) - (433)
Income Tax Expense - 250 350
------------ ------------ ------------
Net (Loss) $ (79,287) $ (21,479) $ (3,170,532)
============ ============ ============
Basic and Diluted Income
(Loss) per Share $ (0.03) $ (0.00)
Weighted Average
Common Shares 2,349,540 2,349,540
See accompanying note to financial statements
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Statements of Stockholders' Equity
For the Period November 1, 2000 to October 31, 2002
Common Common Paid in Contributed Accumulated
Shares Stock Capital Capital Deficit
-----------------------------------------------------------
Balance, November
1, 2000 2,349,540 $ 11,748 $3,041,711 $ - $ (3,069,766)
Net Loss for the
Year Ended
October 31, 2001 - - - - (21,479)
-----------------------------------------------------------
Balance, October
31, 2001 2,349,540 11,748 3,041,711 - (3,091,245)
Contributions to
Capital - - - 61,189 -
Change in Par Value
from $.005 to $.001 - (9,398) 9,398 - -
Net Loss for the
Year Ended
October 31, 2002 - - - - (79,287)
-----------------------------------------------------------
Balance,
October 31, 2002 2,349,540 $ 2,350 $3,051,109 $ 61,189 $ (3,170,532)
===========================================================
See accompanying note to financial statements
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Statement of Cash Flows
October October
31, 2002 31, 2001 Accumulated
------------ ------------ ------------
Cash Flows from Operating Expenses
- ----------------------------------
Net (Loss) $ (79,287) $ (21,479) $ (3,170,532)
Contributions to Capital 61,189 - 61,189
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
Depreciation - - 200,000
Write Down of Film Inventory - - 2,593,500
Changes in Operating Assets & Liabilities
Increase in Interest Payable 426 - 426
Increase (Decrease) in Accounts Payable (17,254) 21,479 20,532
------------ ------------ ------------
Net Cash (Used) by Operating Expenses (34,926) - (294,885)
Cash Flows from Investing Activities - - -
- ------------------------------------ ------------ ------------ ------------
Net Cash Flows from
Investing Activities - - -
Cash Flows from Financing Activities
- ------------------------------------
Proceeds from the Sale of Common Stock - - 127,500
Contributed Capital - - 60,517
Debt to Equity Conversion - - 71,942
Issuance of Note Payable - Related Party 55,000 - 55,000
------------ ------------ ------------
Net Cash Provided (Used) by
Financing Activities 55,000 - 314,959
------------ ------------ ------------
Increase (Decrease) in Cash 20,074 - 20,074
Cash at Beginning of Period - - -
------------ ------------ ------------
Cash at End of Period $ 20,074 $ - $ 20,074
============ ============ ============
Disclosures for Operating Activities
- ------------------------------------
Interest $ 7 $ - $ 7
Taxes - - -
Significant Noncash Transactions
- --------------------------------
Acquisition of Films and Video
Cassettes as Contributed Capital $ - $ - $ 2,447,000
See accompanying note to financial statements
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Notes to Financial Statements
October 31, 2002
NOTE 1 - Nature of Operations
- -----------------------------
The Company was incorporated under the laws of the state of Utah on
November 22, 1978. The Company amended its Articles of Incorporation,
authorizing 100,000,000 shares of common stock having a par value of $0.001
per share.
The Articles of Incorporation grants the Company unlimited power to engage
in and to do any lawful act concerning any and all lawful businesses for
which corporations may be organized. The Company currently seeks to
license films to television and to engage in market-by-market exploitation
of the films it holds in its film inventory.
On July 23, 2002, the Shareholders approved a change in domicile from Utah
to Nevada. In accordance with Nevada corporate law, a change of domicile
is affected by merging the foreign corporation with and into a Nevada
corporation. On September 9, 2002, a merger between Secured Diversified
Investment, Ltd., and Book Corporation of America was completed. Upon
completion of the merger Secured Diversified Investment, Ltd., became the
surviving corporation and Book Corporation of America was dissolved.
In accordance with FASB 7 the Company is considered to be a development
stage company.
NOTE 2 - Significant Accounting Policies
- ----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period in
which the sales are finalized with customers.
C. The Company considers all short term, highly liquid investments, that
are readily convertible to known amounts within ninety days as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. As a licensor of films to television or other markets the Company
shall recognize revenues on the dates of the exhibition for both
percentage and flat fee engagements. Revenues from license agreements
that meet the requirements of FASB 53 shall be recognized when the
license period begins.
Continued
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Notes to Financial Statements
October 31, 2002
NOTE 2 - Significant Accounting Policies (Continued)
- ----------------------------------------
F. Costs to produce a film shall be capitalized as film costs inventory
and shall be amortized using the individual film forecast computation
method.
G. Operating expenses and all type of income are recognized in the period
in which the activities occur.
H. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of
leasehold improvements is amortized over the lesser of the length of
the lease of the related assets for the estimated lives of the assets.
Depreciation and amortization is computed on the straight line method.
NOTE 3 - Related Party Note Payable
- -----------------------------------
During the year, the Company issued a promissory note to a company whose
shareholders are directors of Secured Diversified Investment, Ltd. The
principal sum of the unsecured note is $55,000. The note is due and
payable on September 30, 2003 together with interest accruing on the
outstanding principal balance at the rate of 9% per annum. As of October
31, 2002 the total accrued interest on the note was $426.
October October
The Company has the following notes payable obligations: 2002 2001
----------- -----------
Convertible note payable to investor is due on demand
plus accrued interest at a rate of 5% per annum. $ 55,000 $ -
----------- -----------
Totals $ 55,000 $ -
Less Current Maturities (55,000) -
----------- -----------
Total Long-Term Notes Payable $ - $ -
=========== ===========
Following are maturities of long-term debt for each of the next five years:
Year Amount
---------- -----------
2003 $ 55,000
2004 -
2005 -
2006 -
Thereafter -
-----------
Total $ 55,000
===========
Continued
SECURED DIVERSIFIED INVESTMENT, LTD.
Formerly Book Corporation of America
Notes to Financial Statements
October 31, 2002
NOTE 4 - Stockholders' Equity
- -----------------------------
During the year, the Company changed it's Articles of Incorporation to
change the par value of the Company's common stock from $.005 to $.001 and
authorized 50,000,000 shares of Preferred Stock at a par value of $.01.
NOTE 5 - Contributed Capital
- ----------------------------
During the quarter ended April 30, 2002, an unrelated party contributed
$61,189 in cash to the Company which was used to satisfy debts incurred
during the course of business.
NOTE 6 - Going Concern
- ----------------------
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. Currently, the Company does not have significant cash or
other material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. The Company does not currently possess a financial
institution source of financing and the Company cannot be certain that it's
existing sources of cash will be adequate to meet its liquidity
requirements.
NOTE 7 - Subsequent Events
- ---------------------------
While the parties have not finalized all the terms of the agreement, it is
anticipated that the Company will acquire two properties, interests in two
limited liability companies, and a general partnership interest in a
limited partnership in exchange for 3,630,000 shares of restricted common
stock of the Company and 7,370,000 shares of Preferred Convertible Stock of
the Company. The Preferred shares will have the same voting rights as the
Common Stock. The primary assets of the limited liability companies and
the limited partnership are real estate holdings.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons.
The following table sets forth the name, age and position of each
director and executive officer and the term of office of each.
DIRECTOR OR
NAME AGE POSITION OFFICER SINCE
---------------- ---- -------------------- ---------------
William Biddle 73 Director September 2002
Vice President September 2002
Munjit Johal 47 Chief Financial Officer September 2002
Secretary September 2002
Jay Kister 28 Director September 2002
Sumyie Onodera-Leonard 74 Director September 2002
Pamela Padgett 47 Director September 2002
Clifford L. Strand 56 Chairman of the Board September 2002
President September 2002
Gernot Trolf 59 Vice President September 2002
Chief Operating Officer September 2002
Each director serves for a period of one year or until his successor
is duly elected and qualified. Officers serve at the will of the Board of
Directors.
William S. Biddle. Director and Vice President, Marketing. Mr.
Biddle has over 37 years experience in the real estate industry, he is a
member of the Society of Exchange Counselors. Mr. Biddle is a past
recipient of the Clifford P. Weaver Memorial Award a national award for the
most creative exchange. He is also a past president of National Exchange
Counselors. In 1979, he received the designation of Certified Commercial
Investment Member from the National Association of Realtors. Mr. Biddle
currently owns two brokerages. He purchased Commercial Brokers, a
commercial real estate brokerage firm in Las Vegas, Nevada, in 1993. He
founded Friendly Hills Realty, a brokerage specializing in high end
residential real estate in 1987. Friendly Hills Realty's principal office
is located in Whittier, California.
20
Munjit Johal. Chief Financial Officer and Secretary. Mr. Johal has
broad experience in accounting, finance and management in the public
sector. Since 1998, Mr. Johal has served as the Chief Financial Officer
for Diffy Foods, Inc. Mr. Johal held the same position with Bengal
Recycling from 1996 to 1997. As the Chief Financial Officer for these
companies, Mr. Johal was primarily responsible for overseeing the financial
affairs of these entities and ensuring that their financial statements of
these were accurate and complete and complied with all applicable reporting
requirements. From 1990 to 1995, Mr. Johal serves as the Executive VP for
Pacific Heritage Bank in Torrance, California. Mr Johal earned his MBA
degree from the University of San Francisco in 1980. He received his BS
degree in History from the University of California in Los Angeles in 1978.
Jay Kister. Director. Since June 2001, Mr. Kister has been employed
with Blossom Valley Mortgage, Inc. Mr. Kister currently serves as a Loan
Broker. From April 1999 to June 2001, Mr. Kister was a Personal Banker for
San Diego National Bank. He was primarily responsible opening and
servicing commercial accounts and commercial loans. From May 1998 to April
1999, Mr. Kister worked for Bank of America performing essentially the same
functions as he performed for San Diego National Bank. Mr. Kister earned a
Bachelor of Arts degree in Spanish from Weber State University in Ogden,
Utah in August 1997.
Sumyie Onodera-Leonard. Director. From 1967 to 1986, Mrs. Onodera-
Leonard served as a professor at California State University, Los Angeles,
specializing in the areas in family finance and home management. She has a
BA in Business Administration and a Masters degree in Secondary Education
in 1957 and 1967 respectively from California State University, Los
Angeles. Mrs. Onodera-Leonard also earned a Masters degree in Home
Management from Michigan State University in East Lansing, Michigan in
1961. She is also a senior gold medalist, U.S. National Champion and
world-record holder in her age group in the 800 meter run.
Pamela Padgett. Director. Since 1994, Ms. Padgett has worked as a
real estate broker. Since March 2002, Ms. Padgett has been affiliated with
The Phoenix Group Realtors as an independent real estate agent. From 2000
through March 2002, she was affiliated as Keller Williams Realty. Ms.
Padgett also works as an independent agent for Uncommon Sense Enterprises a
company she founded in 1994 and continues to own.
Clifford L. Strand. Chairman of the Board of Directors and President.
Mr. Strand has 35 years experience in the real estate industry as a broker,
investor and strategist. Since January 2001, Mr. Strand has served as
Senior Vice President, Interim President and President of Seashore
Diversified Investment Company, a Maryland real estate investment trust,
where he was primarily responsible for managing and directing the affairs
of the Company. Seashore specializes in the acquisition, disposition and
management of real estate and investment properties. From 1984 to 2001,
Mr. Strand was self employed as an independent real estate broker. During
that time, Mr. Strand represented a diverse clientele consisting of banks,
savings and loan institutions, universities, celebrities and corporations.
From 1979 to 1984, Mr. Strand served as president of Capital Newport
Mortgage Company, which became part of the Capital Companies. Mr. Strand
has a Certificate in Real Estate from East Los Angeles Community College.
21
Gernot Trolf. Vice President and Chief Operating Officer. Since
1996, Mr Trolf has served as the Chief Operating Officer of Seashore
Diversified Investment Company, a real estate investment trust. As the
Chief Operating Officer, Mr. Trolf was primarily responsible for overseeing
the day-to-day operations of the company. In 1993, he founded and
continues to own AATIC a private commodity brokerage. From 1994 to 1997,
Mr. Trolf owned The Stagecoach Restaurant a continental restaurant
specializing in Austrian, German and continental fare in Alpine,
California. From 1994 to 1996, Mr. Trolf was the Director of Food and
Beverage for the Algonquin Hotel in New York and held to same position at
the Regency Hotel in New York from 1991 to 1994. Mr. Trolf was the General
Manager of the Nova Park Hotel in New York from 1979 to 1982. Mr. Trolf is
a former vice president of the Food & Beverage Association of America and a
member of the Board of Directors of The 400,000 Committee for Austrians
living abroad. Mr. Trolf speaks German, French, English, Spanish and
Norwegian.
To the knowledge of management, during the past five years, no present
or former director, executive officer or person nominated to become a
director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer
appointed by a court for the business or property of such person, or
any partnership in which he was a general partner at or within two
years before the time of such filing, or any corporation or business
association of which he was an executive officer at or within two
years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations or other
minor offenses);
(3) was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from or
otherwise limiting, the following activities;
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliate person, director or
employee of any investment company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
22
(4) was the subject of any order, judgment, or decree, not
subsequently reversed, suspended, or vacated, of any federal or state
authority barring, suspending, or otherwise limiting for more than 60
days the right of such person to engage in any activity described
above under this Item, or to be associated with persons engaged in
any such activity;
(5) was found by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission to have violated any
federal or state securities law, and the judgment in such civil action
or finding by the Securities and Exchange Commission has not been
subsequently reversed, suspended, or vacated
(6) was found by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or
finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
Directors and executive officers are required to comply with Section
16(a) of the Securities Exchange Act of 1934, which requires generally that
such persons file reports regarding ownership of and transactions in
securities of the Company on Forms 3, 4, and 5. A Form 3 is an initial
statement of ownership of securities, which is to be filed by the officers
and directors owning shares in the Company within 10 days after the
effective date of the Company's filing on Form 10-SB. Form 4 is to report
changes in beneficial ownership and is due on or before the tenth day of
the month following any month in which they engage in any transaction in
the Company's common stock. Form 5 covers annual statement of changes in
beneficial ownership which is due 90 days after the fiscal year end of the
Company.
Based solely on a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year, and Forms 5
and amendments thereto furnished to the Company with respect to the most
recent fiscal year, it appears that the officers and directors of the
Company inadvertently failed to timely file Form 5s for the fiscal year
ended October 31, 2002. They are currently in the process of preparing and
filing those forms.
Item 10. Executive Compensation
The following chart sets forth certain summary information concerning
the compensation paid or accrued for each of the Registrant's last two
completed fiscal years to the Registrant's or its principal subsidiaries'
chief executive officers and each of its other executive officers that
received compensation in excess of $100,000 during such period and the
expected compensation for the next twelve months.
[This space intentionally left blank.]
23
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards ----------------------
------------------------ ------- Payouts
Other Restr -------------- All
Name and Annual icted Other
Principal Bonus Compen Stock Options LTIP Compen
Position Year Salary $ sation Awards /SARS Payout sation
- ------------------ ---- --------- ------ ------ ------ ------ ------ ------
Clifford L. Strand 2002 -0- -0- -0- -0- -0- -0- -0-
President & Chairman
of the Board of
Directors
William Messerli 2002 -0- -0- -0- -0- -0- -0- -0-
Former President 2001 -0- -0- -0- -0- -0- -0- -0-
Former Director 2000 -0- -0- -0- -0- -0- -0- -0-
- -------------------------------------------------------------------------------------
Compensation of Directors
None.
Employment Contracts and Termination of Employment and Change in Control
Arrangements.
Currently, there are no employment contracts between the Company and
any of its officers or directors. The Company, however, has formed a
compensation committee to consider extending employment contracts to some
or all of the Company's officers.
There are no compensatory plans or arrangements, including payments to
be received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person because of his resignation, retirement, or other termination of
such person's employment with the Company or its subsidiaries, or any
change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
The Company has no retirement, pension, profit-sharing, insurance, or
medical reimbursement plan covering its officers and directors, and does
not contemplate implementing any such plan at this time. None of the
officers or directors of the Company has any options or warrants to
purchase shares of the Company's common stock.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of February 11, 2002, the name and
the number of shares of the Registrant's Common Stock, par value of $0.001
per share, held of record or beneficially by each person who held of
record, or was known by the Registrant to own beneficially, more than 5% of
the 2,349,540 issued and outstanding shares of the Company's Common Stock,
and the name and shareholdings of each director and of all officers and
directors as group.
24
Title of Name and Address of Amount and Nature of Percentage of
Class Beneficial Owner Beneficial Ownership Class
- -------- ------------------- -------------------- --------------
Common William S. Biddle(2) -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common Munjit Johal -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common Jay Kister -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common Sumyie Onodera-Leonard(2) -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common Pamela Padgett -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common REIT Consultants, LLC(2) 2,000,000 85%
1725 East Warm Springs Road
Suite 10
Las Vegas, Nevada 89119
Common Clifford L. Strand(2) -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
Common Gernot Trolf -0- -0-
1000 Quail Street, Suite 190
Newport Beach California 92660
- -----------------------------------------------------------------------------
Officers, Directors and Nominees
as a Group: -0- -0-
(6 people)
- -----------------------------------------------------------------------------
(1) Officer and/or director of the Company.
(2) The term "beneficial owner" refers to both the power of investment (the
right to buy and sell) and rights of ownership (the right to receive
distributions from the Company and proceeds from sales of shares). REIT
Consultants, LLC ("REIT") is the registered owner of 2,000,000 shares of
Company common stock. REIT is a manager managed limited liability company.
Ronald Robinson is the manager of REIT. The profits and losses of the
limited liability company are allocated according to the percentage
ownership of the total member interests. No member has the right to demand
or receive any distribution from a limited liability company in any form
other than cash.
25
REIT has five members all of which are trusts. The trustees of the
trusts, which are members of REIT, are as follows: William S. Biddle is
the trustee of the William S. Biddle Family Trust, which owns a 16.7%
interest in ; Sumyie Onodera-Leonard is the trustee of the Sumyie N.
Onodera Family Trust, which owns a 25% interest in ; Robert J. Leonard is
the trustee of the Robert J. Leonard Family Trust, which owns a 25%
interest in Robert J. Leonard is the spouse of Sumyie Onodera-Leonard;
Clifford L. Strand is the trustee of the C. L. Strand Trust, which owns a
16.7% interest in ; and Myra and Wayne Sutterfield are the trustees of the
Wayne Sutterfield Family Trust which owns a 16.6% interest in . These
individuals, in their capacity as trustees, or spouses of trustees, could
be deemed to have beneficial ownership in the number of shares of the
Company owned by that corresponds to the trust's percentage ownership in
because of the respective trust's rights of ownership.
There are no contracts or other arrangements that could result in a
change of control of the Company.
Item 12. Certain Relationships and Related Transactions
During the quarter ended October 31, 2002, the Company issued a
promissory note to a company whose shareholders are directors of the
Company. The principal sum of the unsecured note is $55,000. The note is
due and payable on September 30, 2002, together with interest accruing on
the outstanding principal balance at the rate of 9% per annum. As of
October 31, 2002, the total accrued interest was $426.
The Company currently uses one-half of a 600 square foot office
condominium located at 1000 Quail Street, Suite 190, in Newport Beach
California for its corporate offices. The Company pays no rent for this
space pursuant to a verbal agreement with its chief executive officer,
Clifford L. Strand, who holds the lease on the office condominium. This
free rent is of nominal value. The Company has no lease agreement with Mr.
Strand and occupies the space subject to his will. If at any time Mr.
Strand decides he needs or wants the space, the Company has no right to
continue to occupy the space and could be forced to move.
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K.
On September 19, 2002, the Company filed a Current Report on Form 8-K
disclosing that pursuant to approval of the Company's shareholders at a
special meeting of shareholders on July 23, 2002, the Company had merged
with Secured Diversified Investment, Ltd., a Nevada corporation, for
purposes of redomiciling the Company to Nevada. The Current Report also
disclosed a change in the par value of the Company's common stock from
$.005 to $.001, and the authorization of 50,000,000 shares of Preferred
Stock with a $.01 par value. Finally, the Current Report disclosed an
increase in the board of directors from one to five directors and disclosed
the names and biographical information of new board members of the Company.
On October 2, 2002, the Company filed a Current Report on Form 8-K
disclosing that the Company had determined it to be in the best interest of
the Company to change its fiscal year end from October 31, 2002 to December
31, 2002. Subsequent amendments to the October 2, 2002, Current Report
were filed on October 3, 2002 and November 18, 2002, to supplement the
disclosure of the October 2, 2002 Current Report.
26
(b) Exhibits. The following exhibits are included as part of this report:
Exhibit 99.1 Certification Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
Item 14. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer and Chief Financial Officer has conducted an
evaluation of the Company's disclosure controls and procedures as of a date
(the "Evaluation Date") within 90 days before the filing of this quarterly
report. Based on his evaluation, the Company's Chief Executive Officer and
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 reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the applicable Securities and
Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures. Subsequent to the
Evaluation Date, there were no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls, nor were any corrective actions required with regard to
significant deficiencies and material weaknesses.
27
- --------------------------------------------------------------------------
SIGNATURES
- --------------------------------------------------------------------------
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf, thereunto duly authorized.
Secured Diversified Investment, Ltd.
Date: February 12, 2003 /s/ Clifford L. Strand
------------------------------------
Clifford L. Strand,
Chief Executive Officer
Date: February 12, 2003 /s/ Munjit Johal
-----------------------------------
Munjit Johal,
Chief Financial Officer
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Clifford L. Strand, hereby, certify that:
(1) I have reviewed this annual report on Form 10-KSB of Secured
Diversified Investment, Ltd., (the "Company");
(2) Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this annual
report;
(4) The Company's other certifying officer 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 Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company'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 Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: February 12, 2003 /s/ Clifford L. Strand
-----------------------------
Clifford L. Strand,
Chief Executive Officer
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Munjit Johal, hereby, certify that:
(1) I have reviewed this annual report on Form 10-KSB of Secured
Diversified Investment, Ltd., (the "Company");
(2) Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this annual report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Company as of, and for, the periods presented in this annual
report;
(4) The Company's other certifying officer 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 Company and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the Company is made known
to us by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the Company's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
(5) The Company's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Company's auditors and the
audit committee of the Company's board of directors (or persons fulfilling
the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data
and have identified for the Company'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 Company's
internal controls; and
(6) The Company's other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: February 12, 2003 /s/ Munjit Johal
----------------------------
Munjit Johal,
Chief Financial Officer