UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: March 31, 2008
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-23446
Diversified Opportunities, Inc.
(Name of small business issuer in its charter)
Delaware 94-3008888
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
330 Clematis Street, Suite 217, West Palm Beach, Florida, 33401
(Address of principal executive offices) (zip code)
Indicate by check mark whether the registrant (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
reports) and (2) has been subject to such filing requirements for the past 90
days. YES [ ] NO [X]
Indicate by checkmark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
[X} Smaller Reporting Company
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) YES [X] NO [ ]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. 9,199,221 as of May 15, 2008
DIVERSIFIED OPPORTUNITIES
TABLE OF CONTENTS
Page
Part I
Item 1. Financial Statements................................................ 3
Item 2. Management's Discussion and Analysis................................ 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk.......... 16
Item 4T. Controls and Procedures............................................. 16
Part II
Item 1. Legal Proceedings................................................... 16
Item 1A. Risk Factors........................................................ 16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds......... 20
Item 3. Default Upon Senior Securities...................................... 20
Item 4. Submission of Matters to a Vote of Security Holders................. 20
Item 5. Controls and Procedures............................................. 20
Item 6. Exhibits............................................................ 21
Signatures................................................................... 22
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Balance Sheet
(Successor Company)
MARCH 31,
2008 DECEMBER
(UNAUDITED) 31, 2007
-------- --------
ASSETS
Current assets
Cash $ 26,407 $ 0
Prepaid expenses 0 0
-------- --------
Total current assets 26,407 0
-------------------------------------------------------------------------------
Total Assets $ 26,407 $ 0
-------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable-trade $ 10,828 $ 6,268
Accrued expenses 0 0
Due to related parties 22,049 16,049
Current portion of long term debt 0 0
-------- --------
Total current liabilities 32,877 22,317
Stockholders' Deficiency:
Common stock-300,000,000 authorized $0.001 par value
9,199,192 issued & outstanding 9,199 9,199
Additional paid-in capital 33,000 33,000
Common stock subscriptions receivable 0 (30,000)
Accumulated Deficit (49,029) (34,516)
-------- --------
Total Stockholders' Deficiency (6,830) (22,317)
-------------------------------------------------------------------------------
Total Liabilities & Stockholders' Deficiency $ 26,047 $ 0
-------------------------------------------------------------------------------
See notes to unaudited interim financial statements.
3
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Statement of Operations
(Successor Company)
(unaudited)
Three Months Ended
March 31
---------- ---------
2008 2007
---------- ---------
Revenue $ 0 $ 0
Costs & Expenses:
General & administrative 14,513 0
Impairment of Long Lived Assets 0 0
Interest 0 0
---------- ---------
Total Costs & Expenses 14,513 0
Income taxes 0 0
--------------------------------------------------------------------------------
Net Loss $ (14,513) $ 0
--------------------------------------------------------------------------------
Basic and diluted per share amounts:
Continuing operations Nil Nil
Discontinued operations Nil Nil
--------------------------------------------------------------------------------
Basic and diluted net loss Nil Nil
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Weighted average shares outstanding (basic & diluted) 9,199,192 199,192
--------------------------------------------------------------------------------
See notes to unaudited interim financial statements.
4
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Statement of Cash Flows
(Successor Company)
(unaudited)
Three Months Ended
March 31
-------- ------
2008 2007
-------- ------
Cash flows from operating activities:
Net Loss ($14,513) $ 0
Adjustments required to reconcile net loss
to cash used in operating activities:
Fair value of services provided by related parties 6,000 0
Increase (decrease) in accounts payable & accrued expenses 4,560 0
--------------------------------------------------------------------------------
Cash used by operating activities: (3,953) 0
--------------------------------------------------------------------------------
Cash used in investing activities 0 0
--------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 30,000 0
--------------------------------------------------------------------------------
Cash generated by financing activities 30,000 0
--------------------------------------------------------------------------------
Change in cash 26,047 0
Cash-beginning of period 0 0
--------------------------------------------------------------------------------
Cash-end of period $ 26,047 $ 0
--------------------------------------------------------------------------------
See notes to unaudited interim financial statements.
5
DIVERSIFIED OPPORTUNITIES, INC.
(F/K/A ENLIGHTEN SOFTWARE SOLUTIONS, INC.)
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
On September 13, 2001 all of the company assets were transferred to the chapter
7 trustee in settlement of all outstanding corporate obligations. We adopted
"fresh-start" accounting as of September 14, 2001 in accordance with procedures
specified by AICPA Statement of Position ("SOP") No. 90-7, "Financial Reporting
by Entities in Reorganization under the Bankruptcy Code."
All results for periods subsequent to September 13, 2001 are referred to as
those of the "Successor Company". The successor company had no transactions
between September 13, 2001 and the end of the reporting period, December 31,
2001 and was inactive in years 2002-2006.
In accordance with SOP No. 90-7, the reorganized value of the Company was
allocated to the Company's assets based on procedures specified by SFAS No. 141,
"Business Combinations". Each liability existing at the plan sale date, other
than deferred taxes, was stated at the present value of the amounts to be paid
at appropriate market rates. It was determined that the Company's reorganization
value computed immediately before September 14, 2001 was $0. The Company had
been inactive since September 13, 2001. We adopted "fresh-start" accounting
because holders of existing voting shares immediately before filing and
confirmation received less than 50% of the voting shares of the emerging entity
and its reorganization value is less than its post-petition liabilities and
allowed claims.
The Financial Statements presented herein have been prepared by us in accordance
with the accounting policies described in our December 31, 2007 audited
financial statements and should be read in conjunction with the Notes to
Financial Statements which appear in that report.
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities. On an
on going basis, we evaluate our estimates, including those related intangible
assets, income taxes, insurance obligations and contingencies and litigation. We
base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other resources. Actual results
may differ from these estimates under different assumptions or conditions.
In the opinion of management, the information furnished in these interim
financial statements reflect all adjustments necessary for a fair statement of
the financial position and results of operations and cash flows as of and for
the three-month periods ended March 31, 2008 and 2007. All such adjustments are
of a normal recurring nature. The financial statements have been prepared in
accordance with the instructions to Form 10-QSB and therefore do not include
some information and notes necessary to conform with annual reporting
requirements.
2. RECENT COURT PROCEEDINGS:
On April 3, 2007, the Superior Court approved an Order requiring a shareholder
meeting be held within 60 days. The court ordered meeting was held July 2, 2007
The accounts of any former subsidiaries were not included and have not been
carried forward.
6
RESULTANT CHANGE IN CONTROL: In connection with the Order and subsequent
shareholder meeting, Michael Anthony became our sole director and President on
July 2, 2007. As sole officer and director, Michael Anthony entered into an
agreement with Corporate Services International Profit Sharing Plan (CSIPSP)
whereby CSIPSP agreed to make an investment of paid in capital of $30,000 to be
used to pay for costs and expenses necessary to bring the Company back into
compliance with state and federal securities laws and bring current all
Securities and Exchange disclosure obligations. In exchange for the $30,000
CSIPSP was issued 9,000,000 post split shares of common stock on October 9, 2007
3. EARNINGS/LOSS PER SHARE
Basic earnings per share is computed by dividing income available to common
shareholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. Diluted earnings per share assume
that any dilutive convertible securities outstanding were converted, with
related preferred stock dividend requirements and outstanding common shares
adjusted accordingly. It also assumes that outstanding common shares were
increased by shares issuable upon exercise of those stock options for which
market price exceeds the exercise price, less shares which could have been
purchased by us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as the inclusion
of any other potential shares outstanding would be anti-dilutive.
4. NEW ACCOUNTING STANDARDS
In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
CONSIDERING THE EFFECTS OF PRIOR YEAR MISSTATEMENTS WHEN QUANTIFYING
MISSTATEMENTS IN CURRENT YEAR FINANCIAL STATEMENTS ("SAB 108"). SAB 108
establishes an approach that requires quantification of financial statement
misstatements based on the effects of the misstatements on each of the Company's
consolidated financial statements and the related financial statement
disclosures. SAB 108 is effective for the year beginning July 1, 2007. We are
currently evaluating the effect that the adoption of SAB 108 will have on our
results of operations and financial
In June 2006, the FASB issued FASB Interpretation No. 48, ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES--AN INTERPRETATION OF FASB STATEMENT 109 ("FIN 48"),
which clarifies the accounting for uncertain tax positions. This Interpretation
allows the tax effects from an uncertain tax position to be recognized in the
Company's financial statements if the position is more likely than not to be
sustained upon audit, based on the technical merits of the position. FIN 48 also
provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. We do not expect the
adoption of FIN 48 to have a material impact on our financial statements.
5. RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE:
FAIR VALUE OF SERVICES:
The principal stockholder provided, without cost to the Company, his services,
valued at $1,800 per month through March 31, 2008, which totaled $5,400 for the
three-month period then ended. The principal stockholder also provided, without
cost to the Company, office space valued at $200 per month, which totaled $600
for the three-month period ended March 31, 2008. The total of these expenses was
$6,000 and was reflected in the statement of operations as general and
administrative expenses with a corresponding contribution of paid-in capital.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
BUSINESS
This quarterly report on Form 10-Q contains forward-looking statements
that are based on current expectations, estimates, forecasts and projections
about the Company, us, our future performance, our beliefs and our Management's
assumptions. In addition, other written or oral statements that constitute
forward-looking statements may be made by us or on our behalf. Words such as
"expects," "anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
7
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict or assess.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecast in such forward-looking statements. Except as required
under the federal securities laws and the rules and regulations of the SEC, we
do not have any intention or obligation to update publicly any forward-looking
statements after the filing of this Form 10-Q, whether as a result of new
information, future events, changes in assumptions or otherwise.
Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of the date
hereof. We believe the information contained in this Form 10-Q to be accurate as
of the date hereof. Changes may occur after that date. We will not update that
information except as required by law in the normal course of its public
disclosure practices.
Additionally, the following discussion regarding our financial
condition and results of operations should be read in conjunction with the
financial statements and related notes.
History
Diversified Opportunities, Inc., (the "Company" or "Diversified
Opportunities"), was originally incorporated on June 5, 1986 in California as
Lab, Inc. and later the same month, on June 24, 1986, changed its name to
Software Professionals, Inc. At the time of formation the Company was authorized
to issue 1,000,000 shares of no par value common stock.
On October 16, 1992, the Company filed Amended Articles of
Incorporation increasing its authorized common stock to 10,000,000 no par value
shares and contemporaneously enacted a forward split of 25:1.
On January 12, 1994, the Company filed Amended and Restated Articles of
Incorporation creating a class of 1,000,000 shares of blank check preferred
stock, no par value, and enacting a reverse split of 1:2.77778.
On April 20, 1994, following the filing of a registration statement on
Form S-1 the Company began quoting its stock on the NASDAQ National Market under
the symbol "SFTW".
During this time the Company was in the software solutions business. In
particular, the Company developed, marketed, and supported software products
designed to automate the management of computer systems for companies in
banking, finance, telecommunications, information technology, and other major
industries. The Company offered systems management and administration solutions
for the UNIX and NT as well as the Tandem systems market. In October, 1997, the
Company changed its business model to focus solely on UNIX/NT products and to
market solely through third party distributors.
On May 21, 1996 the Company filed a Certificate of Amendment to its
Amended and Restated Articles of Incorporation changing its name to Enlighten
Software Solutions, Inc.
On October 23, 1998, the Company's common stock began trading on the
NASDAQ SmallCap Market.
On January 23, 2001, the Company filed a Certificate of Amendment to
its Amended and Restated Articles of Incorporation increasing the authorized
capital stock to 20,000,000 common shares, no par value and 1,000,000 preferred
shares, no par value.
In February 2001, the Company entered into a loan agreement with Maden
Tech Consulting, Inc. or Maden Tech, a privately held Delaware corporation,
through which we obtained a credit facility from Maden Tech. Under the loan
agreement, Maden Tech agreed to provide us an initial advance of $100,000 and,
in the sole discretion of Maden Tech, additional advances under a credit
facility providing for total borrowings in the aggregate amount of up to
$1,118,250. All amounts extended under the credit facility were secured by what
at that time were our core products, technology and intellectual property and
was evidenced by a convertible note repayable upon demand by Maden Tech after
July 15, 2001. Interest was to be paid quarterly at a rate equal to the Federal
short-term rate announced by the Internal Revenue Service, calculated monthly.
8
To satisfy certain of the conditions precedent specified in the loan
agreement, on March 6, 2001, we (1) expanded the size of our board of directors
from four to seven members, (2) caused one of our incumbent directors to resign
effective upon the receipt of the initial advance, and (3) appointed four
individuals designated by Maden Tech to serve on our board of directors. In
addition, Omar Maden, the sole stockholder, Chief Executive Officer and a
director of Maden Tech, was appointed to serve as our Chief Executive Officer
effective immediately following the initial advance.
Subject to adjustment upon the occurrence of certain events, Maden Tech
was entitled to convert amounts extended under the credit facility into shares
of our common stock at a conversion price of $0.225 per share. In addition, we
granted Maden Tech a warrant to purchase up to 2,000,000 shares of our common
stock. Accordingly, by May, 2001 Maden Tech beneficially owned 4,222,222 shares
of our common stock, representing 45.9% of the total shares of common stock
outstanding at that time.
By that time the Company was struggling financially, with revenues not
supporting the cost of maintaining compliance with the reporting requirements of
the Securities Exchange Act of 1934, as amended. Accordingly, rather than become
delinquent in our filing obligations, in August 2001 the Company filed a Form 15
for the purpose of deregistering its securities.
Ultimately, the business of the Company failed and on September 13,
2001, the Company filed a voluntary petition under Chapter 7, in the U.S.
Bankruptcy Court, Northern District of California. On November 2, 2004, the
Trustee filed its Report of Distribution and on January 4, 2005 a final decree
was entered and the case was closed.
As a result of the bankruptcy, Diversified Opportunities ceased all
business operations and has not engaged in any operations since that time. In
addition, on or about November 25, 2002 the California Secretary of State
revoked Diversified Opportunities' corporate charter.
Diversified Opportunities has not conducted any business operations
since the end of 2001.
On April 3, 2007, in its Court Order, the Superior Court of the State
of California, County of Sacramento granted the application of Corporate
Services International, Inc. to hold a shareholder's meeting for the purpose of
electing a new board of directors. Mr. Michael Anthony is the sole officer,
director and shareholder of Corporate Services International.
In accordance with the Order and in furtherance of the purposes
thereof, on May 31, 2007 Corporate Services International mailed, or caused to
be mailed, a notice of meeting and proxy card to the shareholders of Diversified
Opportunity setting a meeting which was held on July 2, 2007. The notice of
meeting and proxy card requested that the shareholders vote on the appointment
of Michael Anthony as sole Director.
Michael Anthony was voted as the sole director by majority of those
shareholders that attended the meeting, either in person or by proxy. On July 2,
2007 Mr. Anthony was appointed President, Secretary and Treasurer of Diversified
Opportunities. In addition, Diversified Opportunities hired Corporate Services
International for the purpose of assisting the Company in its efforts to salvage
value for the benefit of its shareholders, including assisting in the
preparation of this Registration Statement. Corporate Services International has
also agreed to advise Diversified Opportunities as to potential business
combinations. The agreement between Diversified Opportunities and Corporate
Services International has not been reduced to writing.
On or near October 1, 2007, Corporate Services International Profit
Sharing Plan agreed to contribute $30,000 as paid in capital to Diversified
Opportunities, the entire amount of which was paid to Diversified Opportunities
on January 10, 2008. Diversified Opportunities has used and shall continue to
use these funds to pay the costs and expenses necessary to revive the Company's
business and implement the Company's business plan. Such expenses include,
without limitation, fees to redomicile the Company to the state of Delaware;
payment of all past due franchise taxes; settling all past due accounts with the
Company's transfer agent; calling and holding a shareholder's meeting;
accounting and legal fees; and costs associated with preparing and filing this
Registration Statement, etc.
9
On or near July 10, 2007, Mr. Anthony filed the requisite documents the
State of California for the purposes of reinstating the corporate charter.
However, it was soon learned that the Company name "Enlighten Software
Solutions, Inc." was no longer available, and accordingly on August 2, 2007 a
Certificate of Amendment to the Articles of Incorporation were filed changing
the name of the Company to Enlighten Softwear Solutions, Inc. The only
difference in the name being the spelling of SOFTWARE.
In consideration for the capital contribution, on or near October 9,
2007 Diversified Opportunities issued to Corporate Services International Profit
Sharing Plan 225,000,000 shares of its common stock (pre split, 9,000,000 post
split) representing approximately 97.835% of its common stock outstanding on
that date.
Corporate Services International Profit Sharing Plan is an entity, for
which Michael Anthony is beneficiary. Corporate Services International, Inc. is
a private services corporation for which Michael Anthony is the sole
shareholder, officer and director.
Moreover, from April, 2007 through January, 2008 Corporate Services
International lent Diversified Opportunities $5,371 which funds were used to pay
ongoing administrative expenses, including the costs associated with calling and
holding the shareholders' meeting.
On June 20, 2007, Enlighten Software Solutions, Inc. was incorporated
in Delaware for the purpose of merging with Enlighten Softwear Solutions, Inc. a
California Corporation so as to effect a redomicile to Delaware. The Delaware
Corporation was authorized to issue 250,000,000 shares of $.001 par value common
stock and 2,000,000 shares of $.001 par value preferred stock. On July 30, 2007
both Enlighten Softwear Solutions the California corporation and Enlighten
Software Solutions the Delaware corporation signed and filed Articles of Merger,
with the respective states, pursuant to which the California Corporation's
shareholders received one share of new (Delaware) common stock for every one
share of old (California) common stock they owned. All outstanding shares of the
California Corporation's common stock were effectively purchased by the new
Delaware Corporation, effectively merging the California Corporation into the
Delaware Corporation, and making the Delaware Corporation the surviving entity.
On October 1, 2007, the Board of Directors adopted Amended and Restated
By-laws of Enlighten Software Solutions (now Diversified Opportunities).
On January 14, 2008, the Company changed its name to Diversified
Opportunities, Inc. The name is not meant to be indicative of the Company's
business plan or purpose. As more fully described herein under the heading
"Current Business Plan", Diversified Opportunities' current business plan is to
seek, investigate and, if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms who or which desire
to seek the perceived advantages of an Exchange Act registered corporation.
On February 11, 2008 Diversified Opportunities enacted a reverse split
of its common stock on a 1:25 basis and concurrently increased its authorized
capital stock to 310,000,000 shares comprised of 300,000,000 shares of common
stock, $.001 par value and 10,000,000 shares of blank check preferred stock,
$.001 par value. The Shareholders of Diversified Opportunities approved the
amendment to the Articles of Incorporation to effectuate the name change,
reverse split, and increase in authorized capital stock, by consent.
Current Business Plan
---------------------
Diversified Opportunities is a shell company in that it has no or
nominal operations and either no or nominal assets. At this time, Diversified
Opportunities' purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the perceived advantages of an
Exchange Act registered corporation. The Company will not restrict its search to
any specific business, industry, or geographical location and the Company may
participate in a business venture of virtually any kind or nature. This
10
discussion of the proposed business is purposefully general and is not meant to
be restrictive of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. Management anticipates that it may
be able to participate in only one potential business venture because the
Company has nominal assets and limited financial resources. This lack of
diversification should be considered a substantial risk to shareholders of the
Company because it will not permit the Company to offset potential losses from
one venture against gains from another.
Diversified Opportunities' common stock has been subject to quotation
on the pink sheets. There is not currently an active trading market in the
Company's shares nor do we believe that any active trading market has existed
for the last 2 years. There can be no assurance that there will be an active
trading market for our securities following the effective date of this
Registration Statement. In the event that an active trading market commences,
there can be no assurance as to the market price of our shares of common stock,
whether any trading market will provide liquidity to investors, or whether any
trading market will be sustained.
Management has substantial flexibility in identifying and selecting a
prospective new business opportunity. Diversified Opportunities would not be
obligated nor does management intend to seek pre-approval by our shareholders.
Diversified Opportunities may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize the public
marketplace in order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for other corporate
purposes. Diversified Opportunities may acquire assets and establish wholly
owned subsidiaries in various businesses or acquire existing businesses as
subsidiaries.
Diversified Opportunities intends to promote itself privately. The
Company has not yet begun such promotional activities. The Company anticipates
that the selection of a business opportunity in which to participate will be
complex and risky. Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available capital,
management believes that there are numerous firms seeking the perceived benefits
of a publicly registered corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing may be
sought, providing liquidity for incentive stock options or similar benefits to
key employees, providing liquidity (subject to restrictions of applicable
statutes), for all shareholders, and other factors. Potentially, available
business opportunities may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities difficult and complex.
Diversified Opportunities has, and will continue to have, little or no
capital with which to provide the owners of business opportunities with any
significant cash or other assets. On March 31, 2008 Diversified Opportunities
had a cash balance of $26,407. However, management believes the Company will be
able to offer owners of acquisition candidates the opportunity to acquire a
controlling ownership interest in a publicly registered company without
incurring the cost and time required to conduct an initial public offering. The
owners of the business opportunities will, however, incur significant legal and
accounting costs in connection with the acquisition of a business opportunity,
including the costs of preparing Form 8K's, 10K's or 10Q's, agreements and
related reports and documents. The Securities Exchange Act of 1934 (the "34
Act"), specifically requires that any merger or acquisition candidate comply
with all applicable reporting requirements, which include providing audited
financial statements to be included within the numerous filings relevant to
complying with the `34 Act. Nevertheless, the officer and director of
Diversified Opportunities has not conducted market research and is not aware of
statistical data which would support the perceived benefits of a merger or
acquisition transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by, or
under the supervision of, the officer and director of the Company with such
outside assistance as he may deem appropriate. Management intends to concentrate
on identifying preliminary prospective business opportunities, which may be
brought to its attention through present associations of the Company's officer
and director. In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and managerial
resources; working capital and other financial requirements; history of
11
operations, if any; prospects for the future; nature of present and expected
competition; the quality and experience of management services which may be
available and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then may be anticipated to impact the proposed activities of the Company; the
potential for growth or expansion; the potential for profit; the perceived
public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. Management of Diversified
Opportunities expects to meet personally with management and key personnel of
the business opportunity as part of the investigation. To the extent possible,
the Company intends to utilize written reports and investigation to evaluate the
above factors. The Company will not acquire or merge with any company for which
audited financial statements are not available.
The foregoing criteria are not intended to be exhaustive and there may
be other criteria that management may deem relevant. In connection with an
evaluation of a prospective or potential business opportunity, management may be
expected to conduct a due diligence review.
The Officer of Diversified Opportunities has some, but not extensive
experience in managing companies similar to the Company and shall mainly rely
upon his own efforts, in accomplishing the business purposes of the Company. The
Company may from time to time utilize outside consultants or advisors to
effectuate its business purposes described herein. No policies have been adopted
regarding use of such consultants or advisors, the criteria to be used in
selecting such consultants or advisors, the services to be provided, the term of
service, or regarding the total amount of fees that may be paid. However,
because of the limited resources of the Company, it is likely that any such fee
the Company agrees to pay would be paid in stock and not in cash.
The Company will not restrict its search for any specific kind of
business, but may acquire a venture which is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is impossible to predict at this time the status of any
business in which the Company may become engaged, in that such business may need
to seek additional capital, may desire to have its shares publicly traded, or
may seek other perceived advantages which the Company may offer. However,
Diversified Opportunities does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business opportunity until
such time as the Company has successfully consummated such a merger or
acquisition.
The time and costs required to pursue new business opportunities, which
includes due diligence investigations, negotiating and documenting relevant
agreements and preparing requisite documents for filing pursuant to applicable
securities laws, can not be ascertained with any degree of certainty.
Management intends to devote such time as it deems necessary to carry
out the Company's affairs. The exact length of time required for the pursuit of
any new potential business opportunities is uncertain. No assurance can be made
that we will be successful in our efforts. We cannot project the amount of time
that our management will actually devote to our plan of operation.
Diversified Opportunities intends to conduct its activities so as to
avoid being classified as an "Investment Company" under the Investment Company
Act of 1940, and therefore avoid application of the costly and restrictive
registration and other provisions of the Investment Company Act of 1940 and the
regulations promulgated thereunder.
Diversified Opportunities is a Blank Check Company
--------------------------------------------------
At present, Diversified Opportunities is a development stage company
with no revenues and has no specific business plan or purpose. Diversified
Opportunities' business plan is to seek new business opportunities or to engage
in a merger or acquisition with an unidentified company. As a result,
Diversified Opportunities is a blank check company and any offerings of our
securities would need to comply with Rule 419 under the Act. Diversified
Opportunities has no current plans to engage in any such offerings.
12
Diversified Opportunities' Common Stock is a Penny Stock
--------------------------------------------------------
Diversified Opportunities' common stock is a "penny stock," as defined
in Rule 3a51-1 under the Exchange Act. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its sales person in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure rules have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as the common stock of Diversified
Opportunities is subject to the penny stock rules, it may be more difficult to
sell our common stock.
Acquisition of Opportunities
----------------------------
Management owns 9,000,000 post reverse shares or 97.835% of the total
issued and outstanding shares of Diversified Opportunities. As a result,
management will have substantial flexibility in identifying and selecting a
prospective new business opportunity. In implementing a structure for a
particular business acquisition, the Company may become a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement with
another corporation or entity. It may also acquire stock or assets of an
existing business. On the consummation of a transaction, it is probable that the
present management and shareholders of the Company will no longer be in control
of the Company. In addition, the Company's directors may, as part of the terms
of the acquisition transaction, resign and be replaced by new directors without
a vote of the Company's shareholders or may sell their stock in the Company. Any
and all such sales will only be made in compliance with the securities laws of
the United States and any applicable state.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon an exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, the Company may agree to register all or
a part of such securities immediately after the transaction is consummated or at
specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company
has successfully consummated a merger or acquisition.
As part of Diversified Opportunities' investigation, the officer and
director of the Company may personally meet with management and key personnel,
may visit and inspect material facilities, obtain analysis and verification of
certain information provided, check references of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.
With respect to any merger or acquisition, negotiations with target
company management are expected to focus on the percentage of the Company which
the target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.
Diversified Opportunities will participate in a business opportunity
only after the negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted, generally such
agreements will require some specific representations and warranties by all of
the parties thereto, will specify certain events of default, will detail the
terms of closing and the conditions which must be satisfied by each of the
parties prior to and after such closing, will outline the manner of bearing
costs, including costs associated with the Company's attorneys and accountants,
will set forth remedies on default and will include miscellaneous other terms.
13
Diversified Opportunities does not intend to provide its security
holders with any complete disclosure documents, including audited financial
statements, concerning an acquisition or merger candidate and its business prior
to the consummation of any acquisition or merger transaction.
Conflicts of Interest
---------------------
Our management is not required to commit his full time to our affairs.
As a result, pursuing new business opportunities may require a greater period of
time than if he would devote his full time to our affairs. Management is not
precluded from serving as an officer or director of any other entity that is
engaged in business activities similar to those of Diversified Opportunities.
Moreover, management is currently an officer and director of Apogee Robotics,
Inc. and Diversified Opportunities, companies substantially similar to
Diversified Opportunities. Management has not identified and is not currently
negotiating a new business opportunity for us. In the future, management may
become associated or affiliated with entities engaged in business activities
similar to those we intend to conduct. In such event, management may have
conflicts of interest in determining to which entity a particular business
opportunity should be presented. In general, officers and directors of a
Delaware corporation are required to present certain business opportunities to a
corporation for which they serve as an officer of director. In the event that
our management has multiple business affiliations, he may have similar legal
obligations to present certain business opportunities to multiple entities. In
the event that a conflict of interest shall arise, management will consider
factors such as reporting status, availability of audited financial statements,
current capitalization and the laws of jurisdictions. If several business
opportunities or operating entities approach management with respect to a
business combination, management will consider the foregoing factors as well as
the preferences of the management of the operating company. However, management
will act in what he believes will be in the best interests of the shareholders
of Diversified Opportunities and other respective public companies. Diversified
Opportunities shall not enter into a transaction with a target business that is
affiliated with management.
Competition
-----------
Diversified Opportunities will remain an insignificant participant
among the firms which engage in the acquisition of business opportunities. There
are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Company. In view of Diversified Opportunities' combined extremely
limited financial resources and limited management availability, the Company
will continue to be at a significant competitive disadvantage compared to the
Company's competitors
Employees
---------
Diversified Opportunities currently has no employees. The business of
the Company will be managed by its sole officer and director and such officers
or directors which may join the Company in the future, and who may become
employees of the Company. The Company does not anticipate a need to engage any
fulltime employees at this time.
OVERVIEW
Our current activities are related to seeking new business
opportunities. We will use our limited personnel and financial resources in
connection with such activities. It may be expected that pursuing a new business
opportunity will involve the issuance of restricted shares of common stock. At
March 31, 2008, we had $26,407 of cash assets. At March 31, 2008 the Company had
current liabilities of $32,877.
We have had no revenues in either the quarter end March 31, 2008 or
2007. Our operating expenses for the quarter end March 31, 2007 were $0 and for
the quarter end March 31, 2008 were $14,513, comprised of general and
administrative expenses. Accordingly, we had a net loss of $0 and a net loss per
share of $Nil for the quarter end March 31, 2007 and a net loss of $14,513 and a
net loss per share of $Nil for the quarter end March 31, 2008.
14
CONTINUING OPERATIONS, LIQUIDITY AND CAPITAL RESOURCES
On January 7, 2008, we received $30,000 through the sale of a total of
9,000,000 post split restricted shares to Corporate Services International
Profit Sharing Plan an entity owned and controlled by our officer and director,
Michael Anthony. In addition to the $30,000 capital investment, Corporate
Services International, another entity owned and controlled by Mr. Anthony, has
loaned the Company a total of $5,371 as of the date of this quarterly report. As
of March 31, 2008 we have cash of $26,407. While we are dependent upon interim
funding provided by management to pay professional fees and expenses, we have no
written finance agreement with management to provide any continued funding. As
of March 31, 2008 the Company had current liabilities of $32,877. Although we
believe management will continue to fund the Company on an as needed basis, we
do not have a written agreement requiring such funding. In addition, future
management funding, will more than likely be in the form of loans, for which the
Company will be liable to pay back.
Through the date of this quarterly report management related parties
have made a capital investment of $30,000 into the Company and have loaned the
Company an additional $5,371 for ongoing expenses.
The Board of Directors of the Company has determined that the best
course of action for the Company is to complete a business combination with an
existing business. The Company has limited liquidity or capital resources. As of
March 31, 2008, the Company had a cash balance of $26,407. In the event that the
Company cannot complete a merger or acquisition and cannot obtain capital needs
for ongoing expenses, including expenses related to maintaining compliance with
the Securities laws and filing requirements of the Securities Exchange Act of
1934, the Company could be forced to cease operations.
Diversified Opportunities currently plans to satisfy its cash
requirements for the next 12 months though it's current cash and by borrowing
from its officer and director or companies affiliated with its officer and
director and believes it can satisfy its cash requirements so long as it is able
to obtain financing from these affiliated entities. Diversified Opportunities
currently expects that money borrowed will be used during the next 12 months to
satisfy the Company's operating costs, professional fees and for general
corporate purposes. The Company may explore alternative financing sources,
although it currently has not done so.
Diversified Opportunities will use its limited personnel and financial
resources in connection with seeking new business opportunities, including
seeking an acquisition or merger with an operating company. It may be expected
that entering into a new business opportunity or business combination will
involve the issuance of a substantial number of restricted shares of common
stock. If such additional restricted shares of common stock are issued, the
shareholders will experience a dilution in their ownership interest in the
Company. If a substantial number of restricted shares are issued in connection
with a business combination, a change in control may be expected to occur.
In connection with the plan to seek new business opportunities and/or
effecting a business combination, the Company may determine to seek to raise
funds from the sale of restricted stock or debt securities. The Company has no
agreements to issue any debt or equity securities and cannot predict whether
equity or debt financing will become available at acceptable terms, if at all.
There are no limitations in the certificate of incorporation on the
Company's ability to borrow funds or raise funds through the issuance of
restricted common stock to effect a business combination. The Company's limited
resources and lack of recent operating history may make it difficult to borrow
funds or raise capital. Such inability to borrow funds or raise funds through
the issuance of restricted common stock required to effect or facilitate a
business combination may have a material adverse effect on the Company's
financial condition and future prospects, including the ability to complete a
business combination. To the extent that debt financing ultimately proves to be
available, any borrowing will subject the Company to various risks traditionally
associated with indebtedness, including the risks of interest rate fluctuations
and insufficiency of cash flow to pay principal and interest, including debt of
an acquired business.
15
The Company currently has no plans to conduct any research and
development or to purchase or sell any significant equipment. The Company does
not expect to hire any employees during the next 12 months.
OFF BALANCE SHEET ARRANGEMENTS
None
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable to Diversified Opportunities as a smaller reporting company.
ITEM 4T. CONTROLS AND PROCEDURES
It is the responsibility of the chief executive officer and chief
financial officer of Diversified Opportunities to establish and maintain a
system for internal controls over financial reporting such that Diversified
Opportunities properly reports and files all matters required to be disclosed by
the Securities Exchange Act of 1934 (the "Exchange Act"). Michael Anthony is the
Company's chief executive officer and chief financial officer. The Company's
system is designed so that information is retained by the Company and relayed to
counsel as and when it becomes available. As the Company is a shell company with
no or nominal business operations, Mr. Anthony immediately becomes aware of
matters that would require disclosure under the Exchange Act. After conducting
an evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of March 31, 2008, he has concluded that
the Company's disclosure controls and procedures were effective to ensure that
information required to be disclosed by it in its reports filed or submitted
under the Exchange Act is recorded, processed summarized and reported within the
time periods specified in the rules and forms of the Securities and Exchange
Commission (the "SEC").
This quarterly report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this quarterly report.
There were no significant changes in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
that evaluation, and there were no significant deficiencies or material
weaknesses in such controls requiring corrective actions.
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
On September 13, 2001, the Company filed a voluntary petition under
Chapter 7, in the U.S. Bankruptcy Court, Northern District of California. On
November 2, 2004, the Trustee filed its Report of Distribution and on January 4,
2005 a final decree was entered and the case was closed.
On April 3, 2007, in its Court Order, the Superior Court of the State
of California, County of Sacramento granted the application of Corporate
Services International, Inc. to hold a shareholder's meeting for the purpose of
electing a new board of directors. Mr. Michael Anthony is the sole officer,
director and shareholder of Corporate Services International.
Diversified Opportunities' officers and directors are not aware of any
threatened or pending litigation to which the Company is a party or which any of
its property is the subject and which would have any material, adverse effect on
the Company.
ITEM 1A: RISK FACTORS
16
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements
that are based on current expectations, estimates, forecasts and projections
about us, our future performance, the market in which we operate, our beliefs
and our management's assumptions. In addition, other written or oral statements
that constitute forward-looking statements may be made by us or on our behalf.
Words such as "expects", "anticipates", "targets", "goals", "projects",
"intends", "plans", "believes", "seeks", "estimates", variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions that are difficult to
predict or assess. Therefore, actual outcomes and results may differ materially
from what is expressed or forecast in such forward-looking statements.
DEPENDENCE ON KEY PERSONNEL
Diversified Opportunities is dependent upon the continued services of
its sole officer and director, Michael Anthony. To the extent that his services
become unavailable, Diversified Opportunities will be required to obtain other
qualified personnel and there can be no assurance that it will be able to
recruit and hire qualified persons upon acceptable terms.
LIMITED RESOURCES; NO PRESENT SOURCE OF REVENUES.
At present, our business activities are limited to seeking potential
business opportunities. Due to our limited financial and personnel resources,
there is only a limited basis upon which to evaluate our prospects for achieving
our intended business objectives. We have only limited resources and have no
operating income, revenues or cash flow from operations. Our management is
providing us with funding, on an as needed basis, necessary for us to continue
our corporate existence and our business objective to seek new business
opportunities, as well as funding the costs, including professional accounting
fees, of registering our securities under the Exchange Act and continuing to be
a reporting company under the Exchange Act. We have no written agreement with
our management to provide any interim financing for any period. In addition, we
will not generate any revenues unless and until we enter into a new business, of
which there can be no assurance. As of December 31, 2007 we had no cash, however
as of March 12, 2008 we had cash of $26,491.50.
BROAD DISCRETION OF MANAGEMENT
Any person who invests in our securities will do so without an
opportunity to evaluate the specific merits or risks of any potential new
prospective business in which we may engage. As a result, investors will be
entirely dependent on the broad discretion and judgment of management in
connection with the selection of a prospective business. There can be no
assurance that determinations made by our management will permit us to achieve
our business objectives.
ABSENCE OF SUBSTANTIVE DISCLOSURE RELATING TO PROSPECTIVE BUSINESS
As of the date of this registration statement, we have not yet
identified any prospective business or industry in which we may seek to become
involved and at present we have no information concerning any prospective
business. There can be no assurance that any prospective business opportunity
will benefit shareholders or prove to be more favorable to shareholders than any
other investment that may be made by shareholders and investors.
THERE IS NO ACTIVE MARKET FOR OUR COMMON STOCK AND NONE MAY DEVELOP OR BE
SUSTAINED
There is currently no active trading market in our shares. There can be
no assurance that there will be an active trading market for our securities
following commencement of a new business. In the event that an active trading
market commences, there can be no assurance as to the market price of our shares
of common stock, whether any trading market will provide liquidity to investors,
or whether any trading market will be sustained.
17
UNSPECIFIED INDUSTRY FOR NEW PROSPECTIVE BUSINESS OPPORTUNITIES; UNASCERTAINABLE
RISKS
There is no basis for shareholders to evaluate the possible merits or
risks of potential new business opportunities or the particular industry in
which we may ultimately operate. To the extent that we effect a business
combination with a financially unstable entity or an entity that is in its early
stage of development or growth, including entities without established records
of revenues or income, we will become subject to numerous risks inherent in the
business and operations of that financially unstable company. In addition, to
the extent that we effect a business combination with an entity in an industry
characterized by a high degree of risk, we will become subject to the currently
unascertainable risks of that industry. A high level of risk frequently
characterizes certain industries that experience rapid growth. Although
management will endeavor to evaluate the risks inherent in a particular new
prospective business or industry, there can be no assurance that we will
properly ascertain or assess all such risks or that subsequent events may not
alter the risks that we perceive at the time of the consummation of any new
business opportunity.
CONFLICTS OF INTEREST
Our management is not required to commit his full time to our affairs.
There may be a conflict of interest in allocating his time in the event that
management engages in similar business efforts for other entities. Our
management will devote such time, in his sole discretion, to conduct our
business, including the evaluation of potential new business opportunities. As a
result, the amount of time devoted to our business and affairs may vary
significantly depending upon whether we have identified a new prospective
business opportunity or are engaged in active negotiations related to a new
business. In the event that a conflict of interest shall arise, management will
consider factors such as reporting status, availability of audited financial
statements, current capitalization and the laws of jurisdictions. If several
business opportunities or operating entities approach management with respect to
a business combination, management will consider the foregoing factors as well
as the preferences of the management of the operating company. However,
management will act in what they believe will be in the best interests of the
shareholders of Diversified Opportunities and other respective public companies.
Diversified Opportunities shall not enter into a transaction with a target
business that is affiliated with management.
COMPETITION
Diversified Opportunities expects to encounter intense competition from
other entities seeking to pursue new business opportunities. Many of these
entities are well-established and have extensive experience in identifying new
prospective business opportunities. Many of these competitors possess greater
financial, technical, human and other resources than we do and there can be no
assurance that we will have the ability to compete successfully. Based upon our
limited financial and personnel resources, we may lack the resources as compared
to those of many of our potential competitors.
ADDITIONAL FINANCING REQUIREMENTS
Diversified Opportunities has no revenues and is dependent upon the
willingness of management and management controlled entities to fund the costs
associated with the reporting obligations under the Exchange Act, and other
administrative costs associated with our corporate existence. As of December 31,
2007, Diversified Opportunities has incurred approximately $33,050 for general
and administrative expenses, including accounting fees, reinstatement fees, and
other professional fees related to the preparation and filing of this
registration statement under the Exchange Act. In addition, as of December 31,
2007 Diversified Opportunities has current liabilities of $22,317 and has
incurred additional expenses since that date. We may not generate any revenues
unless and until the commencement of new business operations. We believe that
management will continue to provide sufficient funds to pay accounting and
professional fees and other expenses to fulfill our reporting obligations under
the Exchange Act until we commence business operations. Through the date of this
Registration Statement management related parties have made a capital investment
of $30,000 into the Company and have loaned the Company an additional $5,371 for
ongoing expenses. In the event that our available funds from our management and
affiliates prove to be insufficient, we will be required to seek additional
financing. Our failure to secure additional financing could have a material
adverse affect on our ability to pay the accounting and other fees in order to
continue to fulfill our reporting obligations and pursue our business plan. We
do not have any arrangements with any bank or financial institution to secure
additional financing and there can be no assurance that any such arrangement
would be available on terms acceptable and in our best interests. We do not have
any written agreement with our affiliates to provide funds for our operating
expenses.
18
STATE BLUE SKY REGISTRATION; POTENTIAL LIMITATIONS ON RESALE OF THE SECURITIES
The holders of our shares of common stock and those persons who desire
to purchase our stock in any trading market that might develop, should be aware
that there may be state blue-sky law restrictions upon the ability of investors
to resell our securities. Accordingly, investors should consider the secondary
market for Diversified Opportunities' securities to be a limited one.
It is the present intention of Diversified Opportunities' management,
after the commencement of new business operations, to seek coverage and
publication of information regarding our Company in an accepted publication
manual which permits a manual exemption. The manual exemption permits a security
to be distributed in a particular state without being registered if the Company
issuing the security has a listing for that security in a securities manual
recognized by the state. However, it is not enough for the security to be listed
in a recognized manual. The listing entry must contain (1) the names of issuer's
officers, and directors, (2) an issuer's balance sheet, and (3) a profit and
loss statement for either the fiscal year preceding the balance sheet or for the
most recent fiscal year of operations. Furthermore, the manual exemption is a
non-issuer exemption restricted to secondary trading transactions, making it
unavailable for issuers selling newly issued securities.
Most of the accepted manuals are those published in Standard and
Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's
Insurance Reports, and many states expressly recognize these manuals. A smaller
number of states declare that they "recognize securities manuals" but do not
specify the recognized manuals. The following states do not have any provisions
and therefore do not expressly recognize the manual exemption: Alabama, Georgia,
Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and
Wisconsin.
DIVIDENDS UNLIKELY
We do not expect to pay dividends for the foreseeable future because we
have no revenues. The payment of dividends will be contingent upon our future
revenues and earnings, if any, capital requirements and overall financial
condition. The payment of any future dividends will be within the discretion of
our board of directors. It is our expectation that after the commencement of new
business operations that future management will determine to retain any earnings
for use in business operations and accordingly, we do not anticipate declaring
any dividends in the foreseeable future.
POSSIBLE ISSUANCE OF ADDITIONAL SECURITIES
Our Articles of Incorporation, as amended, authorize the issuance of
300,000,000 shares of common stock, par value $0.001. As of March 12, 2008, we
have 9,199,192 shares issued and outstanding. We may be expected to issue
additional shares in connection with our pursuit of new business opportunities
and new business operations. To the extent that additional shares of common
stock are issued, our shareholders would experience dilution of their respective
ownership interests. If we issue shares of common stock in connection with our
intent to pursue new business opportunities, a change in control of our Company
may be expected to occur. The issuance of additional shares of common stock may
adversely affect the market price of our common stock, in the event that an
active trading market commences.
COMPLIANCE WITH PENNY STOCK RULES
Our securities will be considered a "penny stock" as defined in the
Exchange Act and the rules thereunder, unless the price of our shares of common
stock is at least $5.00. We expect that our share price will be less than $5.00.
Unless our common stock is otherwise excluded from the definition of "penny
stock", the penny stock rules apply. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
19
and its sales person in the transaction, and monthly account statements showing
the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that the broker-dealer, not otherwise
exempt from such rules, must make a special written determination that the penny
stock is suitable for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure rules have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as the common stock is subject to the
penny stock rules, it may become more difficult to sell such securities. Such
requirements could limit the level of trading activity for our common stock and
could make it more difficult for investors to sell our common stock.
GENERAL ECONOMIC RISKS
Diversified Opportunities' current and future business plans are
dependent, in large part, on the state of the general economy. Adverse changes
in economic conditions may adversely affect our plan of operation.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following is a list of unregistered securities sold by the Company
within the last three years including the date sold, the title of the
securities, the amount sold, the identity of the person who purchased the
securities, the price or other consideration paid for the securities, and the
section of the Securities Act of 1933 under which the sale was exempt from
registration as well as the factual basis for claiming such exemption.
Corporate Services International Profit Sharing Plan agreed to
contribute $30,000 as paid in capital to Diversified Opportunities, the entire
amount of which was paid to Diversified Opportunities on January 108, 2008. In
consideration for the agreed upon capital contribution, on or near October 9,
2007 Diversified Opportunities issued to Corporate Services International Profit
Sharing Plan 225,000,000 shares of its common stock (pre split, 9,000,000 post
split) representing approximately 97.835% of its common stock outstanding on
that date.
The Company believes that the issuance and sale of the restricted
shares was exempt from registration pursuant to Section 4(2) of the Act as
privately negotiated, isolated, non-recurring transactions not involving any
public solicitation. An appropriate restrictive legend is affixed to the stock
certificates issued in such transactions.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 31, 2007 Corporate Services International mailed, or caused to
be mailed, a notice of meeting and proxy card to the shareholders of Diversified
Opportunity setting a meeting which was held on July 2, 2007. The notice of
meeting and proxy card requested that the shareholders vote on the appointment
of Michael Anthony as sole Director. Pursuant to Court Order quorum was set at
those that attended the meeting either in person or by proxy.
Michael Anthony was voted as the sole director by majority of those
shareholders that attended the meeting, either in person or by proxy. On July 2,
2007 Mr. Anthony was appointed President, Secretary and Treasurer of Diversified
Opportunities. The total votes in favor of Mr. Anthony's election were 94,785;
those against were 8,430; and those abstaining were none; and those that did not
participate were 4,871,797.
ITEM 5. OTHER INFORMATION
None.
20
ITEM 6. EXHIBITS
EXHIBITS
NUMBER DESCRIPTION
------ -----------
3.1.1 Original Articles of Incorporation dated June 5, 1986*
3.1.2 Amendment to Articles of Incorporation - June 24, 1986*
3.1.3 Amendment to Articles of Incorporation - October 16, 1992*
3.1.4 Amended and Restated Articles of Incorporation - January 12,
1994*
3.1.5 Amendment to Articles of Incorporation - May 21, 1996*
3.1.6 Amendment to Articles of Incorporation - January 23, 2001*
3.1.7 Articles of Incorporation - Delaware - June 20, 2007*
3.1.8 Amendment to California Articles of Incorporation - August 2,
2007*
3.1.9 Agreement of Merger - July 30, 2007*
3.1.10 Certificate of Merger - Delaware - July 30, 2007*
3.1.11 Certificate of Merger - California - October 1, 2007*
3.1.12 Amendment to Articles of Incorporation - January 14, 2008*
3.2 Amended and Restated By-Laws*
31.1 Certification of the Chief Executive Officer and Chief
Financial Officer of the Company pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer and Chief
Financial Officer of the Company pursuant to Section 906 of
the Sarbanes Oxley Act of 2002
* Filed with the Company's Form 10 filed on March 14, 2008.
21
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: May 15, 2008 DIVERSIFIED OPPORTUNITIES
By: /s/ Michael Anthony
------------------------------
Name: Michael Anthony
Title: Chief Executive Officer
22