Secured
Diversified Investment, Ltd.
|
(Name
of small business issuer in its
charter)
|
Nevada
|
80-0068489
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
|
12202
North Scottsdale Road, Phoenix, AZ
|
85054
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Issuer’s
telephone number: 949
851-1069
|
|
Securities
registered under Section 12(b) of the Exchange Act:
|
|
Title
of each class
|
Name
of each exchange on which registered
|
None
|
Not
Applicable
|
Securities
registered under Section 12(g) of the Exchange Act:
|
|
Common
Stock, par value $0.001
|
|
(Title
of class)
|
|
|
Page
|
PART
I
|
||
PART
II
|
||
PART
III
|
||
Property
|
Occupancy
Rate
|
Average
Rent/Sq. Ft.
|
The
Katella Center*
|
100%
|
$1.34
|
Campus
Drive Office Building
|
100%
|
$1.77
|
Lincoln
Drive property
|
100%
|
$3.69
|
Cactus
Road property
|
Vacant
|
N/A
|
Property
|
Year
|
Number
of Leases Expiring
|
Total
Square Footage of Expiring Leases
|
Total
Annual Rental Covered by Expiring Leases
|
%
of Gross Annual Rental
|
The
Katella Center
|
2007
2008
2009
2010
2011
|
4
3
-
-
-
|
3,048
7,212
-
-
-
|
$50,715
$109,289
-
-
|
27.2%
72.8%
-
-
-
|
Campus
Drive Office Building(1)
|
2007
2008
2009
2010
2011
|
3
1
-
1
-
|
1,889
1,306
-
3,463
-
|
$56,760
$31,200
-
$77,616
-
|
30.9%
16.5%
-
42.2%
-
|
Lincoln
Drive property
|
2007
2008
2009
2010
2011
|
1
-
2
-
-
|
1,024
-
3,391
-
-
|
$36,000
-
$159,600
-
-
|
18.4%
-
81.6%
-
-
|
Cactus
Road property
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
(1)
|
We
have four month-to-month leases on the Campus Drive Office Building.
These
leases account for a total of 1,035 square feet, total annual rent
in the
amount of $49,500, and 26.9% of the gross annual rental for the property.
|
Property
|
Tenants
|
Business
|
Sq.
Ft. Rental (% of Total)
|
Rent/Sq.
Ft.
|
The
Katella Center
|
Strings
by Judith
Ted
Nguyen
Bloomers
Cookies
|
Clothing
mfg
Remodelling
Retail
and Baking
|
4,445
/ 46.0%
2,170
/ 22.5%
1,262
/ 13.1%
|
$1.30
$1.34
$1.37
|
Campus
Drive Office Building
|
Borders
& Associates
Coast
to Coast
|
Architects
Copying
Office
|
3,463
/ 40.0%
1,306/
15.1%
|
$1.97
$2.00
|
Lincoln
Drive property
|
Joel
D. Designs
Fazoql
Hague
Showcase
|
Florists
& Gift Shop
Furniture
Sales
Furniture
& Gift Shop
|
1,024
/ 23.2%
1,472
/ 33.3%
1,919
/ 43.5%
|
$2.93
$4.96
$3.13
|
Cactus
Road property
|
N/A
|
N/A
|
N/A
|
N/A
|
Fiscal
Year Ending December 31, 2006
|
||||
Quarter
Ended
|
|
High
$
|
|
Low
$
|
March
31, 2006
|
|
0.1495
|
|
0.02
|
June
30, 2006
|
|
0.03
|
|
0.03
|
September
30, 2006
|
|
0.03
|
|
0
|
December
31, 2006
|
|
0.15
|
|
0
|
|
||||
Fiscal
Year Ended December 31, 2005
|
||||
Quarter
Ended
|
|
High
$
|
|
Low
$
|
March
31, 2005
|
|
0.45
|
|
0.30
|
June
30, 2005
|
|
0.30
|
|
0.25
|
September
30, 2005
|
|
0.25
|
|
0.25
|
December
31, 2005
|
|
0.25
|
|
0.05
|
|
1.
|
We
would not be able to pay our debts as they become due in the usual
course
of business; or
|
|
2.
|
Our
total assets would be less than the sum of our total liabilities,
plus the
amount that would be needed to satisfy the rights of shareholders
who have
preferential rights superior to those receiving the
distribution.
|
|
A
|
B
|
C
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(A))
|
Equity
compensation plans
approved
by security
holders
|
0
|
0
|
1,000,000
|
Equity
compensation plans
not
approved by security
holders
|
400,000
|
$0.50-$2.00
|
0
|
Total
|
400,000
|
$0.50-$2.00
|
1,000,000
|
1.
|
a
significant negative industry or economic trend;
|
2.
|
a
significant underperformance relative to historical or projected
future
operation results; and
|
3.
|
a
significant change in the manner in which the asset is used.
|
Audited
Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Properties,
net of accumulated depreciation of $167,298
|
$
|
1,531,661
|
Cash
and cash equivalents
|
|
12,885
|
Prepaid
expenses
|
|
10,907
|
Restricted
cash
|
|
72,288
|
Net
assets held for sale
|
|
23,544
|
Total
Assets
|
$
|
1,651,285
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Mortgages
payable
|
$
|
1,141,174
|
Mortgages
payable, related parties
|
|
138,630
|
Notes
payable, related parties
|
|
3,275
|
Interest
payable
|
|
39,433
|
Payroll
liabilities
|
|
3,465
|
Accounts
payable, accrued expenses and other liabilities
|
|
145,861
|
Total
Liabilities
|
|
1,471,838
|
|
|
|
Commitments
& contingencies
|
|
-
|
|
|
|
Minority
Interest
|
|
89,870
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
Series
A Preferred Stock, 375,000 shares authorized,
$0.01
par value, 355,978 issued & outstanding
|
|
3,559
|
Series
B Preferred Stock, 1,000,000 shares authorized,
$0.01
par value, 8,044 issued & outstanding
|
|
80
|
Series
C Preferred Stock, 1,125,000 shares authorized,
$0.01
par value, none outstanding
|
|
-
|
Common
Stock, 100,000,000 shares authorized, $0.001
par
value, 2,896,820 issued and outstanding
|
|
2,897
|
Paid
In Capital
|
|
8,812,272
|
Unissued
Shares
|
|
5,830
|
Accumulated
Deficit
|
|
(8,735,061)
|
Total
Stockholders' equity
|
|
89,577
|
Total
Liabilities & Stockholders' equity
|
$
|
1,651,285
|
|
2006
|
|
2005
|
||
REVENUES
|
|
|
|
||
Rental
income
|
$
|
336,945
|
|
$
|
549,205
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
Litigation
expense
|
|
-
|
|
|
60,000
|
Impairment
loss
|
|
248,137
|
|
|
214,977
|
General
and administrative costs
|
|
850,600
|
|
|
2,431,903
|
Total
operating expenses
|
|
1,098,737
|
|
|
2,706,880
|
|
|
|
|
|
|
Operating
loss
|
|
(761,792)
|
|
|
(2,157,675)
|
|
|
|
|
|
|
Other
Income and Losses
|
|
|
|
|
|
Interest
expense
|
|
(137,921)
|
|
|
(193,894)
|
Interest
income
|
|
574
|
|
|
28,846
|
Gain
on disposal of equity investment
|
|
33,803
|
|
|
1,634,238
|
Gain
on equity investment
|
|
-
|
|
|
104,838
|
Gain
on sale of real estate
|
|
-
|
|
|
339,873
|
Loss
on sale of note
|
|
-
|
|
|
(7,500)
|
Minority
interest
|
|
25,254
|
|
|
36,070
|
Debt
forgiveness
|
|
268,768
|
|
|
-
|
Other
income
|
|
(15,216)
|
|
|
666,385
|
Total
other income (losses)
|
|
175,262
|
|
|
2,608,856
|
|
|
|
|
|
|
Net
income (loss) from continuing operations
|
|
(586,530)
|
|
|
451,181
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
Loss
from discontinued operations including gain (loss) on disposal of
subsidiary
|
|
(153,672)
|
|
|
342,647
|
|
|
|
|
|
|
Net
income (loss)
|
$
|
(740,202)
|
|
$
|
793,828
|
|
|
|
|
|
|
Net
income (loss) per share, continuing operations
|
$
|
(0.35)
|
|
$
|
0.59
|
Net
income (loss) per share, discontinued operations
|
$
|
(0.09)
|
|
$
|
0.45
|
Basic
earnings (loss) per common share
|
$
|
(0.44)
|
|
$
|
1.04
|
Basic
weighted average number of shares of common stock
outstanding
|
|
1,697,249
|
|
|
765,278
|
|
|
|
|
|
|
Diluted
earnings (loss) per common shares
|
$
|
(0.44)
|
|
$
|
0.68
|
*Diluted
weighted average number of shares of common stock
outstanding
|
|
1,697,249
|
|
|
1,162,280
|
|
|
|
|
|
|
*Basic
& diluted weighted average number of shares are same for the year
ended December 31, 2006 due to its anti-dilutive nature
|
|
|
Preferred
Stock
Series
A
|
|
Preferred
Stock
Series
B
|
|
Preferred
Stock
Series
C
|
|
Common
Stock
|
|
Additional
Paid
in
|
|
Unissued
|
|
Prepaid
|
|
Accumulated
|
|
Shareholders'
Equity
|
|||||||||||||||||||||
|
Shares
|
|
Par
Value
|
|
Shares
|
|
Par
Value
|
|
Shares
|
|
Par
Value
|
|
Shares
|
|
Par
Value
|
|
Capital
|
|
Shares
|
|
Consulting
|
|
Deficit
|
|
(Deficit)
|
|||||||||||||
Balance,
December 31, 2004
|
|
353,918
|
|
$
|
3,539
|
|
|
8,044
|
|
$
|
80
|
|
|
12,500
|
|
$
|
125
|
|
|
750,849
|
|
$
|
751
|
|
$
|
8,462,836
|
|
|
|
|
$
|
(140,000)
|
|
$
|
(8,788,687)
|
|
$
|
(461,356)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment
to share capital
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8
|
|
|
(8)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Prepaid
consulting
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
140,000
|
|
|
-
|
|
|
140,000
|
Shares
issued for debt settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,195
|
|
|
2
|
|
|
10,974
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,976
|
Shares
issued for services
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
28,625
|
|
|
29
|
|
|
143,096
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
143,125
|
Shares
to be issued for services
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
125,000
|
|
|
-
|
|
|
-
|
|
|
125,000
|
Shares
issued for real estate settlement
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
938
|
|
|
1
|
|
|
18,749
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,766
|
Shares
issued for real estate settlement
|
|
1,563
|
|
|
16
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,233
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,233
|
Shares
cancelled
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,250)
|
|
|
(1)
|
|
|
(36,749)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(36,750)
|
Shares
cancelled
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,500)
|
|
|
(13)
|
|
|
(5,003)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,000)
|
Options
issued to directors
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,251
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,251
|
Warrants
issued to President
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,663
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
15,663
|
Net
income
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
793,828
|
|
|
793,828
|
Balance,
December 31, 2005
|
|
355,480
|
|
|
3,555
|
|
|
8,044
|
|
|
80
|
|
|
12,500
|
|
|
125
|
|
|
768,857
|
|
|
777
|
|
|
8,672,041
|
|
|
125,000
|
|
|
-
|
|
|
(7,994,859)
|
|
|
806,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services, previously unissued
|
|
6,250
|
|
|
63
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
124,937
|
|
|
(125,000)
|
|
|
-
|
|
|
-
|
|
|
-
|
Shares
cancelled - Common stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,037)
|
|
|
(2)
|
|
|
(11,248)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(11,250)
|
Shares
cancelled - Preferred stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,500)
|
|
|
(125)
|
|
|
-
|
|
|
-
|
|
|
(367,375)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(367,500)
|
Shares
issued for conversion of Series C preferred stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
750,000
|
|
|
750
|
|
|
366,750
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
367,500
|
Shares
to be issued for fractional shares adjustment
|
|
(5,752)
|
|
|
(58)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(8)
|
|
|
(5,694)
|
|
|
5,830
|
|
|
-
|
|
|
-
|
|
|
70
|
Shares
issued to officers
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
600,000
|
|
|
600
|
|
|
17,400
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
18,000
|
Shares
issued for consulting services
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
400,000
|
|
|
400
|
|
|
11,600
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12,000
|
Shares
issued to adjust for anti-dilution
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
380,000
|
|
|
380
|
|
|
(380)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Stock
options expense
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,240
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,240
|
Net
loss
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(740,202)
|
|
|
(740,202)
|
Balance,
December 31, 3006
|
|
355,978
|
|
$
|
3,559
|
|
|
8,044
|
|
$
|
80
|
|
|
-
|
|
$
|
-
|
|
|
2,896,820
|
|
$
|
2,897
|
|
$
|
8,812,272
|
|
$
|
5,830
|
|
$
|
-
|
|
$
|
(8,735,061)
|
|
$
|
89,577
|
|
2006
|
|
2005
|
||
Cash
flows from operating activities:
|
|
|
|
||
Net
income (loss)
|
$
|
(740,202)
|
|
$
|
793,827
|
Adjustment
to reconcile net income (loss) to net cash used by operating
activities:
|
|
|
|
|
|
Depreciation
and amortization
|
|
42,583
|
|
|
43,950
|
Minority
interest
|
|
(25,254)
|
|
|
(36,070)
|
Impairment
of real estate
|
|
248,137
|
|
|
214,977
|
Gain
on equity investment
|
|
-
|
|
|
(104,837)
|
Gain
on disposal of equity investment
|
|
(33,803)
|
|
|
(1,634,238)
|
(Gain)
Loss on disposal of subsidiary
|
|
153,672
|
|
|
(342,646)
|
Loss
on sale of note receivable
|
|
-
|
|
|
7,500
|
Gain
on sale of real estate
|
|
-
|
|
|
(339,873)
|
Stocks
issued for services
|
|
12,000
|
|
|
143,125
|
Shares
issued for real estate settlement
|
|
-
|
|
|
49,999
|
Shares
issued officers
|
|
18,000
|
|
|
-
|
Shares
cancelled
|
|
(11,250)
|
|
|
(41,750)
|
Options
granted
|
|
4,240
|
|
|
31,251
|
Warrants
granted
|
|
-
|
|
|
15,663
|
Forgiveness
of debt
|
|
(268,768)
|
|
|
(658,950)
|
Prepaid
consulting
|
|
-
|
|
|
140,000
|
Unissued
shares for real estate services
|
|
-
|
|
|
125,000
|
Increase
(decrease) in assets and liabilities
|
|
|
|
|
|
Receivables
|
|
-
|
|
|
(163,161)
|
Prepaid
expenses
|
|
(1,133)
|
|
|
3,708
|
Other
assets
|
|
16,961
|
|
|
(216,881)
|
Accrued
interest added to notes payable
|
|
15,042
|
|
|
27,513
|
Accounts
payable and accrued expenses
|
|
(316,034)
|
|
|
259,109
|
Payroll
liabilities
|
|
2,459
|
|
|
114,503
|
Net
cash used by operating activities
|
|
(883,350)
|
|
|
(1,568,281)
|
|
|
|
|
|
|
Cash
flow from investing activities:
|
|
|
|
|
|
Collection
of notes receivable
|
|
-
|
|
|
71,000
|
Proceeds
from sale of subsidiary, net of cash
|
|
-
|
|
|
639,357
|
Proceeds
from (payment of) equipment and tenant improvements
|
|
-
|
|
|
1,000
|
Investment
in real estate
|
|
(200,000)
|
|
|
-
|
Increase
in restricted cash
|
|
574
|
|
|
-
|
Decrease
in restricted cash
|
|
-
|
|
|
403,767
|
Proceeds
from sale of real estate
|
|
-
|
|
|
1,869,044
|
Net
cash (used in) provided by investing activities
|
|
(199,426)
|
|
|
2,984,168
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
Proceeds
from line of credit
|
|
-
|
|
|
144,940
|
Payment
of line of credit
|
|
-
|
|
|
(396,920)
|
Cash
advanced to discontinued entity
|
|
(122,215)
|
|
|
|
Proceeds
from notes receivable
|
|
32,277
|
|
|
(9,907.00)
|
Payment
of mortgage payable
|
|
(19,805)
|
|
|
(246,310)
|
Payment
of mortgage payable - related party
|
|
(25,000)
|
|
|
(60,000)
|
Proceeds
on notes payable - related party
|
|
-
|
|
|
358,811
|
Payments
on notes payable - related party
|
|
-
|
|
|
(2,526)
|
Proceeds
from notes payable
|
|
-
|
|
|
(9,004)
|
Net
cash used in financing activities
|
|
(134,743)
|
|
|
(220,916)
|
|
|
|
|
|
|
Net
increase (decrease) in cash & cash equivalents
|
|
(1,217,519)
|
|
|
1,194,971
|
|
|
|
|
|
|
Cash
& cash equivalents, beginning period
|
|
1,230,404
|
|
|
35,433
|
|
|
|
|
|
|
Cash
& cash equivalents, end of period
|
$
|
12,885
|
|
$
|
1,230,404
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
Cash
paid for interest
|
$
|
104,592
|
|
$
|
144,134
|
Cash
paid for income tax
|
$
|
800
|
|
$
|
800
|
Non-cash
investing and financing activities:
|
|
|
|
|
|
Shares
issued for debt
|
$
|
-
|
|
$
|
10,976
|
1.
|
Requires
an entity to recognize a servicing asset or servicing liability each
time
it undertakes an obligation to service a financial asset by entering
into
a servicing contract.
|
2.
|
Requires
all separately recognized servicing assets and servicing liabilities
to be
initially measured at fair value, if practicable.
|
3.
|
Permits
an entity to choose ‘Amortization method’ or Fair value measurement
method’ for each class of separately recognized servicing assets and
servicing liabilities:
|
4.
|
At
its initial adoption, permits a one-time reclassification of
available-for-sale securities to trading securities by entities with
recognized servicing rights, without calling into question the treatment
of other available-for-sale securities under Statement 115, provided
that
the available-for-sale securities are identified in some manner as
offsetting the entity’s exposure to changes in fair value of servicing
assets or servicing liabilities that a servicer elects to subsequently
measure at fair value.
|
5.
|
Requires
separate presentation of servicing assets and servicing liabilities
subsequently measured at fair value in the statement of financial
position
and additional disclosures for all separately recognized servicing
assets
and servicing liabilities.
|
|
|
|
Estimated
Life
|
||
Buildings
and improvements
|
$
|
1,648,037
|
|
|
39
years
|
Less
accumulated depreciation
|
|
(116,376)
|
|
|
|
|
$
|
1,531,661
|
|
|
|
Mortgage
note, bearing interest at 11.5%, due on June 25, 2007, secured by
1st
trust deed on Katella Center
|
$
|
370,000
|
Mortgage
note, bearing interest at the “1 year constant maturity treasury rate”
plus 3.5%, adjusting annually, currently 8.0%, principal and interest
monthly, maturing February 2, 2013, secured by 1st
trust deed on 5030 Campus
|
|
661,174
|
Mortgage
note, bearing interest at 8%, due on Feb. 4, 2008, secured by
2nd
trust deed on 5030 Campus
|
|
110,000
|
Total
mortgages payable
|
$
|
1,141,174
|
Mortgage
note, bearing interest at 8%, due on Feb. 17, 2007, secured by 5030
Campus
Drive
|
$
|
67,000
|
Mortgage
note, bearing interest at 8%, due on Dec. 31, 2006, secured by
3rd
trust deed on 5030 Campus
|
|
71,630
|
Total
mortgages payable- related parties
|
$
|
138,630
|
Date
|
Number
of Warrants
|
Exercise
Price
|
Expiration
Date
|
April
4, 2005
|
400,000
|
Range
from $0.50 to $2.00
|
April
4, 2010
|
|
Warrants
Outstanding
|
|
Aggregate
Intrinsic
Value
|
||
Outstanding
at December 31, 2005
|
|
400,000
|
|
$
|
-
|
Granted
|
|
-
|
|
|
|
Forfeited
|
|
-
|
|
|
|
Exercised
|
|
-
|
|
|
|
Outstanding
at December 31, 2006
|
|
400,000
|
|
$
|
-
|
Outstanding
Warrants
|
|
Exercisable
Warrants
|
||||
Exercise
Price
|
Number
|
Remaining
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
Number
|
Weighted
Average
Exercise
Price
|
$
0.50 - $2.00
|
400,000
|
3.25
years
|
|
$
1.25
|
75,000
|
$1.25
|
|
|
Options
Outstanding
|
|
|
Weighted
Average
Exercise
Price
|
|
|
Agregate
Intrinsic
Value
|
Outstanding
at December 31, 2005
|
|
-
|
|
$
|
-
|
|
$
|
-
|
Granted
|
|
7,500
|
|
$
|
0.01
|
|
|
-
|
Forfeited
|
|
-
|
|
|
-
|
|
|
-
|
Exercised
|
|
-
|
|
|
-
|
|
|
-
|
Expired
|
(7,500)
|
|
|
|||||
Outstanding
at December 31, 2006
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
2006
|
|
2005
|
||
Net
income (loss)
|
$
|
(740,202)
|
|
$
|
793,828
|
Less
preferred stock dividends
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Net
income (loss) available to common shareholders
|
$
|
(740,202)
|
|
$
|
793,828
|
|
|
|
|
|
|
Basic
weighted average shares outstanding
|
|
1,697,249
|
|
|
765,278
|
Dilutive
potential common shares
|
|
-
|
|
|
397,000
|
Diluted
weighted average shares outstanding
|
|
1,697,249
|
|
|
1,162,278
|
|
|
|
|
|
|
Basic
weighted net income (loss) per share
|
$
|
(0.44)
|
|
$
|
1.04
|
Basic
and diluted net income (loss) per share
|
$
|
(0.44)
|
|
$
|
0.68
|
|
|
|
|
|
|
Potential
common shares excluded from diluted
weighted
average shares outstanding because of
their
anti-dilutive nature:
|
|
|
|
|
|
Convertible
Series A, B and C preferred stock
and
warrants granted, not yet exercised
|
|
620,000
|
|
|
20,000
|
|
|
620,000
|
|
|
20,000
|
|
3rd
Party Lease Obligation
|
|
Related
Party Debt
|
|
3rd
Party Debt
|
|
Officer
Salaries
|
|
Total
|
|||||
2007
|
92,472
|
|
67,000
|
|
370,000
|
|
21,000
|
|
550,472
|
|||||
2008
|
92,472
|
|
-
|
|
110,000
|
|
-
|
|
202,472
|
|||||
2009
|
92,472
|
|
-
|
|
22,764
|
|
-
|
|
115,236
|
|||||
2010
|
92,472
|
|
-
|
|
22,764
|
|
-
|
|
115,236
|
|||||
2011
|
92,472
|
|
-
|
|
22,764
|
|
-
|
|
115,236
|
|||||
|
$
|
369,888
|
|
$
|
67,000
|
|
$
|
525,528
|
|
$
|
21,000
|
|
$
|
983,416
|
|
December
31, 2006
|
|
December
31, 2005
|
||
Deferred
tax asset
|
|
|
|
||
Net
operating losses
|
$
|
2,050,258
|
|
$
|
1,710
000
|
Less:
valuation allowance
|
|
(2,050,258)
|
|
(1,710,000)
|
|
|
$
|
-
|
|
$
|
-
|
December
31, 2006
|
|
December
31, 2005
|
|||
|
|
|
|
||
Tax
expense (credit) at statutory rate-federal
|
|
(34)
%
|
|
|
(34)
%
|
State
tax expense net of federal tax
|
|
(6)
|
|
(6)
|
|
Changes
in valuation allowance
|
|
40
|
|
|
40
|
Tax
expense at actual rate
|
|
-
|
|
|
-
|
|
2006
|
|
2005
|
||
Current
tax expense:
|
|
|
|
||
Federal
|
$
|
-
|
|
$
|
-
|
State
|
|
800
|
|
|
800
|
Total
Current
|
$
|
800
|
|
$
|
800
|