UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the Quarter Ended: Commission File Number: - ---------------------- ----------------------- July 31, 2002 0-30653 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Known as Book Corporation of America ----------------------------------------------- (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 offices) (Zip Code) Issuer's telephone number, including area code (949) 851-1069 --------------- Securities registered pursuant to section 12(b) of the Exchange Act: None 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 [ ] State the number of shares outstanding of each of the registrants classes of common equity, as of the latest practicable date: As of September 1, 2002, issuer had 2,349,540 shares of its $.001 par value common stock outstanding. This Form 10-QSB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which act contains a safe harbor for forward looking statements. The Company believes that investors would be benefitted by the cautionary language included in this paragraph. For this purpose any statements contained in this Form 10-QSB 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 are intended to identify forward- looking statements. These statements 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. PART I FINANCIAL INFORMATION SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America Financial Statements July 31, 2002 2 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America (A Development Stage Company) Balance Sheet
July October 31, 2002 31, 2001 ----------- ----------- (Unaudited) ASSETS Current Assets $ - $ - - -------------- =========== =========== LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities - ------------------- Accounts Payable $ 20,752 $ 37,336 Taxes Payable 450 450 ----------- ----------- Total Current Liabilities 21,202 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 (3,135,850) (3,091,245) ----------- ----------- Total Stockholders' Equity (21,202) (37,786) ----------- ----------- Total Liabilities & Stockholders' Equity $ - $ - =========== ===========
See accompanying notes to financial statements. 3 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America (A Development Stage Company) Statement of Operations (Unaudited)
For the Three For the Nine Months Ended Months Ended July July July July 31, 2002 31, 2001 31, 2002 31, 2001 ---------- ---------- ---------- ---------- Revenues $ - $ - $ - $ - - -------- ---------- ---------- ---------- ---------- Expenses - -------- Administrative Expenses 20,752 721 44,605 3,959 ---------- ---------- ---------- ---------- Total Expenses 20,752 721 44,605 3,959 ---------- ---------- ---------- ---------- Net Loss $ (20,752) $ (721) $ (44,605) $ (3,959) ========== ========== ========== ========== Net Loss Per Share of Common Stock $ (0.01) $ (0.00) $ (0.02) $ (0.00) Weighted Average Number Of Shares Outstanding During Period 2,349,540 2,349,540 2,349,540 2,349,540
See accompanying notes to financial statements. 4 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America (A Development Stage Company) Statement of Cash Flows (Unaudited)
For the Nine Months Ended July 31, July 31, 2002 2001 ----------- ----------- Cash Flows from Operating Expenses - ---------------------------------- Net (Loss) $ (44,605) $ (3,959) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities: Changes in Operating Assets & Liabilities Increase (Decrease) in Accounts Payable (16,584) 3,959 ----------- ----------- Net Cash (Used) by Operating Expenses (61,189) - Cash Flows from Investing Activities - ------------------------------------ Contributions to Capital 61,189 - ----------- ----------- Net Cash Flows from Investing Activities 61,189 - Cash Flows from Financing Activities - ------------------------------------ Net Cash Provided (Used) by Financing Activities - - ----------- ----------- Increase (Decrease) in Cash - - Cash at Beginning of Period - - ----------- ----------- Cash at End of Period $ - $ - =========== =========== Disclosures for Operating Activities - ------------------------------------ Interest $ - $ - Taxes - -
See accompanying notes to financial statements. 5 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America (A Development Stage Company) Notes to Financial Statements July 31, 2002 NOTE 1 - Organization - --------------------- 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 $0.005 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. 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. 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. Continued 6 SECURED DIVERSIFIED INVESTMENT, LTD. Formerly Book Corporation of America (A Development Stage Company) Notes to Financial Statements July 31, 2002 NOTE 3 - Non Cash Investing and Non Cash Financing Activities - ------------------------------------------------------------- In 1988, the Company issued 200,000 shares of its common stock to a related entity for assets valued at historical cost of $200,000. The Company currently holds in its film inventory, films contributed to the Company by principal stockholders. In the year ended October 31, 1999, the Company wrote off 100% of the cost of these films, because it has not and has no plans to aggressively market the films. NOTE 4 - Public Stock Offering - ------------------------------ In 1979, the Company conducted an intrastate public offering of its common stock shares and issued 15,000,000 pre split, 300,000 post split shares for net proceeds of $127,500. NOTE 5 - Subsequent Event - ------------------------- 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 addition to approving the change in 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 authorized 50,000,000 shares of Preferred Stock at a par value of $.01. 7 ITEM 2 PLAN OF OPERATION For a complete understanding, this Plan of Operations should be read in conjunction with Part I- Item 1. Financial Statements to this Form 10- QSB. Book Corporation of America (the "Company"), 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, exploiting, 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 the Company. The Company has no "parents" or "predecessors," as those terms are defined under the federal securities laws. In 1979 the Company conducted an intrastate public offering of its common stock. On October 10, 1988, the common stock of the Company was reverse split 50 to 1, and the par value was changed from $0.01 to $.005 per share. Also in October 1988, the Company acquired Sun Television Entertainment, Inc., bringing assets of 36 motion picture screenplays (subsequently valued at $-0-) and motion picture production equipment was transferred to the Company by Visto International, Inc. On July 23, 2002, Book Corporation of America ("Book") held a special shareholder meeting. At the meeting, the shareholders approved a proposal to redomicle the Company from Utah to Nevada and to change the name of the Company. 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 ("SDI"). On September 9, 2002, a merger between Secured Diversified Investment, Ltd., and Book was completed. Upon completion of the merger SDI became the surviving corporation and Book was dissolved. 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 has no revenue producing activities and is dependent upon contributions to capital 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 and therefore is seeking other business opportunities. 8 In March 2002, REIT Consultants, LLC, a Nevada limited liability company acquired the controlling interest in the Company. In April 2002, the Company entered into a non-binding letter of intent with Seashore Diversified Investment Company ("Seashore"), a Maryland corporation, to negotiate the possible acquisition of real estate holdings from Seashore in exchange for restricted shares of the Company's capital stock. Seashore is a real estate investment trust and is in the business of acquiring, selling and managing real estate holdings. By its terms, the letter of intent automatically terminated on June 30, 2002, without a definitive agreement being reached. The Company and Seashore are continuing negotiations of a definitive agreement to set forth the specific terms for the acquisition of real estate holdings. The Company intends to primarily acquire partial interests in a number of income producing properties throughout the United States. Given that Seashore is continuously buying and selling real estate, and the fact that the Company has not negotiated specific terms of a definitive agreement, it is unclear at this time what properties the Company may acquire from Seashore. If the Company does not negotiate a definitive agreement with Seashore, it has unrestricted discretion in seeking and participating in any other business opportunity, subject to the availability of such opportunities, economic conditions and other factors. The selection of a business opportunity is complex and extremely risky and will be made by management in the exercise of its business judgment. There is no assurance that the Company will be able to identify and acquire a business opportunity which will ultimately prove to be beneficial to the Company and its shareholders. The risks inherent in seeking a business interest are further complicated as a result of the fact that the Company is a dormant company, has limited resources and is unable to provide a prospective business opportunity with capital. The Company's limited resources include property and equipment that have been completely depreciated. In addition, the Company has been unable to market its films which are now more than twenty-five years old. The Company does not anticipate any future market developing for the films, and subsequently, in October 1999 the value of the films was written down to $-0-. SOURCES OF OPPORTUNITIES If the Company is unable to negotiate a definitive agreement to acquire real estate holdings from Seashore, it is anticipated that business opportunities may be available to the Company from other sources, including its officers and directors, professional advisers, securities broker- dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals. If the Company has to seek other opportunities, it will investigate potential business opportunity from all known sources, but will rely principally on personal contacts of its officers and directors as well as indirect associations with other businesses and professional people. Although the Company does not anticipate engaging professional firms specializing in business acquisitions or reorganizations, if management deems it in the best interest of the Company, such firms may be retained. In some instances, the Company may publish notices or advertisements seeking a potential business opportunity in financial or trade publications. 9 CRITERIA Should the Company be unable to negotiate a definitive agreement with Seashore, it intends to focus its search for prospective business opportunities to the area of acquisition or interests in real estate holdings. However, should other opportunities become available, the Company may also consider opportunities outside the real estate industry based on criteria outlined below. In analyzing prospective business opportunities, management will consider such matters as the available technical, financial and managerial resources; working capital and other financial requirements; the history of operations; prospects for the future; the nature of present and expected competition; the quality and experience of management services which may be available and the depth of the management; the potential for success of the opportunity; the potential for growth and expansion; the potential for profit; and other relevant factors. To a large extent, a decision to participate in a specific business opportunity may be made upon management's analysis of the quality of the other firm's management and personnel, the ability to market products, and numerous other factors which are difficult if not impossible to analyze through the application of any objective criteria. In many instances, it is anticipated that the results of operations of a specific firm may not necessarily be indicative of the potential for the future. Generally, the Company will analyze all factors and circumstances and make a determination based upon a composite of available facts, without reliance upon any single fact as controlling. EMPLOYEES The Company does not currently have any employees but relies upon the efforts of its officers and directors to conduct the business of the Company. Should a business opportunity become available to the Company, the Company's management may seek to raise additional capital by investment from outsiders in the Company's common stock. PART II OTHER INFORMATION ITEM 1 LEGAL PROCEEDINGS None. ITEM 2 CHANGES IN SECURITIES None. ITEM 3 DEFAULTS UPON SENIOR SECURITIES None. 10 ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On July 23, 2002, Book Corporation of America ("Book") held a special shareholder meeting. At the meeting, the shareholders approved a proposal to redomicle the Company from Utah to Nevada and to change the name of the Company to Secured Diversified Investment, Ltd. In addition to approving the change of domicile and name, 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. ITEM 5 OTHER INFORMATION See Items 4 and 6. ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 99.01 Certification of Ronald Robinson, President (Chief Executive Officer) (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended July 31, 2002. Subsequent to July 31, 2002, the Company filed a Current Report on Form 8-K on September 19, 2002. That Report is incorporated herein by this reference. The Current Report filed on September 19, 2002, disclosed that the Company had changed its domicile from Utah to Nevada and had changed its name to Secured Diversified Investment, Ltd. The Current Report also disclosed the appointment of new members to the Board of Directors, the resignation of Ronald Robinson as a director and officer of the Company and the appointment of new officers. Finally, the Current Report disclosed that at a Special Meeting of Shareholders held on July 23, 2002, the Company's shareholders had 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. 11 ___________________________________________________________________________ SIGNATURES ___________________________________________________________________________ In accordance with the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf, thereunto duly authorized. SECURED DIVERSIFIED INVESTMENT, LTD. Date: September 11, 2002 By: /S/ Ronald Robinson ------------------------------------ Ronald Robinson, President and Secretary 12