UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934
Diversified Opportunities, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 94-3008888
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
330 Clematis Street, Suite 217 West Palm Beach, FL 33401
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(Address of Principal Executive Offices) (Zip Code)
Issuer's Telephone Number: 800-341-2684
Securities to be registered under Section 12(b) of the Exchange Act:
Title of class Name of each exchange on which
to be so registered each class is to be registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common stock, $.001 par value
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(Title of class)
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(Title of class)
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [_] Smaller reporting company [X]
(Do not check if a smaller reporting company)
TABLE OF CONTENTS
PAGE
PART I
Forward-Looking Statements................................................. 1
Item 1. Description of Business............................................ 1
Item 2. Management's Discussion and Analysis or Plan of Operation.......... 10
Item 3. Description of Property............................................ 12
Item 4. Security Ownership of Certain Beneficial Owners and Management..... 12
Item 5. Directors and Executive Officers, Promoters and Control Persons.... 13
Item 6. Executive Compensation............................................. 13
Item 7. Certain Relationships and Related Transactions And Director
Independence..................................................... 14
Item 8. Description of Securities.......................................... 14
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity
and Related Stockholder Matters.................................. 15
Item 2. Legal Proceedings.................................................. 17
Item 3. Changes in and Disagreements with Accountants...................... 17
Item 4. Recent Sale of Unregistered Securities............................. 17
Item 5. Indemnification of Directors and Officers.......................... 17
PART F/S
PART III
Item 1. Index to Exhibits.................................................. 18
Item 2. Description of Exhibits............................................
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this registration statement on Form
10-SB/12g of Diversified Opportunities, Inc. (hereinafter the "Company", "We" or
"Diversified Opportunities") discuss future expectations, contain projections of
our plan of operation or financial condition or state other forward-looking
information. In this registration statement, forward-looking statements are
generally identified by the words such as "anticipate", "plan", "believe",
"expect", "estimate", and the like. Forward-looking statements involve future
risks and uncertainties, there are factors that could cause actual results or
plans to differ materially from those expressed or implied. These statements are
subject to known and unknown risks, uncertainties, and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and is
derived using numerous assumptions. A reader whether investing in the Company's
securities or not, should not place undue reliance on these forward-looking
statements, which apply only as of the date of this Registration Statement.
Important factors that may cause actual results to differ from projections
include, for example:
- the success or failure of management's efforts to implement the Company's
plan of operation;
- the ability of the Company to fund its operating expenses;
- the ability of the Company to compete with other companies that have a
similar plan of operation;
- the effect of changing economic conditions impacting our plan of
operation;
- the ability of the Company to meet the other risks as may be described in
future filings with the SEC.
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-SB 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.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
History
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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.
1
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.
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.
2
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.
As of March 12, 2008, Diversified Opportunities is not in negotiations
with, nor does it have any agreements with any potential merger candidate.
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.
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.
3
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
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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
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 December 31, 2007 Diversified Opportunities
had a cash balance of $0 and on March 12, 2008 the cash balance was $26,491.50.
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 10KSB'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.
4
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
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
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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.
5
Diversified Opportunities' Common Stock is a Penny Stock
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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
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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.
6
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 Aim Smart Corporation, 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
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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.
RISK FACTORS
FORWARD-LOOKING STATEMENTS
This registration statement on Form 10-SB 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.
7
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.
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.
8
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.
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.
9
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
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.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following presentation of management's discussion and analysis of the
Company's financial condition and results of operations should be read in
conjunction with the Company's consolidated financial statements, the
accompanying notes thereto and other financial information appearing elsewhere
in this report. This section and other parts of this report contain
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ significantly from the results discussed in the
forward-looking statements.
10
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 December 31,
2007, we had $0 of cash assets, however as of March 12, 2008, we had $26,491.50
cash assets. At December 31, 2007 the Company had current liabilities of
$22,317.
We have had no revenues in either the year end December 31, 2007 or 2006.
Our operating expenses for the year end December 31, 2006 were $1,268 and for
the year end December 31, 2007 were $33,050, comprised of general and
administrative expenses. Accordingly, we had a net loss of $1,268 and a net loss
per share of $Nil for the year end December 31, 2006 and a net loss of $33,050
and a net loss per share of $.01 for the year end December 31, 2007.
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 Registration
Statement. 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 December 31, 2007 the Company
had current liabilities of $22,317. 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 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.
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 December
31, 2007, the Company had a cash balance of $0, however as of March 12, 2008,
the Company has a cash balance of $26,491.50. 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.
The principal stockholder provided, without cost to the Company, his
services, valued at $1,800 per month for July through December, which totaled
$10,800 for the six-month period ended December 31, 2007. The principal
stockholder also provided, without cost to the Company, office space valued at
$200 per month, which totaled $1,200 for the six-month period ended December 31,
2007. The total of these expenses was $12,000 and was reflected in the statement
of operations as general and administrative expenses with a corresponding
contribution of paid-in capital.
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.
11
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.
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. DESCRIPTION OF PROPERTY
Diversified Opportunities shares office space with its officer and
director at 330 Clematis Street, Suite 217, West Palm Beach, Florida 33401. The
Company does not have a lease and the Company pays no rent for the leased space.
The Company does not own any properties nor does it lease any other properties.
The Company does not believe it will need to maintain an office at any time in
the foreseeable future in order to carry out its plan of operations as described
herein.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 12, 2008 the number and
percentage of outstanding shares of common stock which, according to the
information supplied to the Company, were beneficially owned by (i) each current
director of the Company, (ii) each current executive officer of the Company,
(iii) all current directors and executive officers of the Company as a group,
and (iv) each person who, to the knowledge of the Company, is the beneficial
owner of more than 5% of the Company's outstanding common stock. Except as
otherwise indicated, the persons named in the table below have sole voting and
dispositive power with respect to all shares beneficially owned, subject to
community property laws (where applicable).
Owner Common Shares Percentage(1)
---------------------------------------------------------------
Michael Anthony(2) 9,000,040 97.835%
----------------------------------------------------------------
Officers and directors as 9,000,040 97.835%
a group (1 persons)
----------------------------------------------------------------
(1) Based on 9,199,192 shares of common stock outstanding as of March 12, 2008,
and taking into effect the 1:25 reverse split effectuated on February 11, 2008.
(2) Held by Corporate Services International Profit Sharing, a private services
corporation of which Mr. Anthony is the sole beneficiary.
There are no arrangements which may result in a change in control of
Diversified Opportunities.
12
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age and position held with
respect to our present directors and executive officers:
NAME AGE POSITION EXECUTIVE OFFICER
AND DIRECTOR SINCE
Michael Anthony 42 Chief Executive Officer, July 2, 2007
President, Secretary,
Treasurer, Director
Our directors are elected to serve until the next annual meeting of
shareholders and until their respective successors will have been elected and
will have qualified. Officers are not elected for a fixed term of office but
hold office until their successors have been elected.
Mr. Anthony, age 42, has been an officer and director of the Company
since July 2, 2007. Mr. Anthony is the sole officer and director of Corporate
Services International, Inc. a personal use business consulting company.
In addition, since November 2004, Mr. Anthony has been President and CEO
of Union Equity, Inc. and its wholly owned subsidiary Home Sales 24/7, Inc.
Union Equity, Inc. is an Internet based real estate marketing firm.
On or about July 15, 2005 Mr. Anthony became an officer and director of
Ubrandit.com, Inc. a reporting blank check company and resigned his position on
October 31, 2006. On or about July 30, 2006 Mr. Anthony became an officer and
director of Standard Commerce, Inc. a reporting blank check company and resigned
his position effective August 24, 2007. On or about March 15, 2007, Mr. Anthony
became an officer and director Apogee Robotics, Inc. a reporting blank check
company. On or about May 25, 2007, Mr. Anthony became an officer and director or
Aim Smart Corporation, a reporting blank check company.
ITEM 6. EXECUTIVE COMPENSATION
No executive compensation was paid during the fiscal period ended
December 31, 2007 or 2006 by Diversified Opportunities. Diversified
Opportunities has no employment agreement with any of its officers and
directors.
The following tables show, as to the named executive officers, certain
information concerning stock options:
SUMMARY COMPENSATION TABLE
Nonqualified
Name and Non-Equity Deferred
principal Stock Option Incentive Plan Compensation All Other
position Year Salary Bonus Awards Awards Compensation Earnings Compensation Total
--------------------------------------------------------------------------------------------------------------
Michael 0 0 0 0 0 0 0
Anthony, 2007
Pres. and and
Chairman 2006 0
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2007
OPTION AWARDS STOCK AWARDS
------------------------------------------------ ---------------------------------------------------------------
Equity
Incentive
Plan
Awards:
Equity Equity Market or
Incentive Incentive Payout
Plan Plan Awards: Value of
Awards: Market Number of Unearned
Number of Number of Number of Number of Value of Unearned Shares,
Securities Securities Securities Shares or Shares or Shares, Units Units or
Underlying Underlying Underlying Units of Units of or Other Other
Unexercised Unexercised Unexercise Option Stock That Stock That Rights That Rights
Options Options Unearned Exercise Option Have Not Have Not Have Not That Have
(#) (#) Options Price Expiration Vested Vested Vested Not Vested
Name Exercisable Unexercisable (#) ($) Date (#) ($) (#) (#)
----------------------------------------------------------------------------------------------------------------------------------
Michael Anthony 0 0 0 0 0 0 0 0 0
13
COMPENSATION OF DIRECTORS
Diversified Opportunities' directors are not compensated for their
services as directors of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
During the last three years, to the knowledge of the Company, there was
no person who had or has a direct or indirect material interest in any
transaction or proposed transaction to which the Company was or is a party.
Transactions in this context relate to any transaction which exceeds $120,000 or
one percent of the average of the Company's total assets at year end for the
last three completed fiscal years.
Laura Anthony, Esquire is corporate and securities counsel to the
Company. Laura Anthony is Michael Anthony's wife and a non-voting minority
member of Century Capital Partners, LLC. Ms. Anthony's total legal fees for
period ending December 31, 2007 totaled $10,678.
Diversified Opportunities does not have any outside directors.
ITEM 8. DESCRIPTION OF SECURITIES
General
-------
The Company's authorized capital stock consists of 300,000,000 shares of
Common Stock, $.001 par value, and 10,000,000 shares of Preferred stock, $.001
par value. As of March 12, 2008 there were 9,199,192 shares of Common Stock
issued and outstanding and no shares of Preferred Stock, $0.001 par value,
issued and outstanding.
Common Stock
------------
Each holder of Common Stock is entitled to one vote for each share owned
of record on all matters voted upon by shareholders, and a majority vote is
required for all actions to be taken by shareholders. In the event of a
liquidation, dissolution or winding-up of the Company, the holders of Common
Stock are entitled to share equally and ratably in the assets of the Company, if
any, remaining after the payment of all debts and liabilities of the Company.
The Common Stock has no preemptive rights, no cumulative voting rights and no
redemption, sinking fund or conversion provisions.
Dividends
---------
Holders of Common Stock are entitled to receive dividends if, as and when
declared by the Board of Directors out of funds legally available therefore,
subject to any dividend restrictions imposed by the Company's creditors. No
dividend or other distribution (including redemptions or repurchases of shares
of capital stock) may be made if, after giving effect to such distribution, the
Company would not be able to pay its debts as they become due in the normal
course of business, or the Company's total assets would be less than the minimum
of its total liabilities.
Preferred Stock
---------------
The Board of Directors of the Company is authorized (without any further
action by the shareholders) to issue Preferred Stock in one or more series and
to fix the voting rights, liquidation preferences, dividend rates, conversion
rights, redemption rights and terms, including sinking fund provisions, and
certain other rights and preferences. Satisfaction of any dividend preferences
of outstanding Preferred Stock would reduce the amount of funds available for
the payment of dividends, if any, on the Common Stock. In addition, holders of
the Preferred Stock would normally be entitled to receive a preference payment
in the event of any liquidation, dissolution or winding up of the Company before
any payment is made to holders of Common Stock. In addition, under certain
circumstances, the issuance of Preferred Stock may render more difficult or tend
to discourage a merger, tender offer or proxy contest, the assumption of control
by a holder of a large block of the Company's securities, or the removal of
incumbent management. The Board of Directors of the Company, without shareholder
approval, may issue Preferred Stock with dividend, liquidation, redemption,
voting and conversion rights which could adversely affect the holders of Common
Stock.
14
At present, Diversified Opportunities has no intention to issue any
preferred shares nor adopt any series, preferences or other classification of
its preferred shares.
Options and Warrants
--------------------
None
Transfer Agent
--------------
The transfer agent for the Company's shares of common stock is Island
Stock Transfer, 100 Second Avenue South, Suite 104N, St. Petersburg, Florida
33701.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
MARKET INFORMATION
The Company's common stock is traded on the "Pink Sheets" under the
symbol "DVOP". Such trading of our common stock is limited and sporadic. To the
best knowledge of the Company, there has been no active trading activity for
approximately the past two years.
The table below sets forth the high and low bid quotations for the
Company's Common Stock for each quarter of fiscal 2007 and fiscal 2006. The
quotations below reflect inter-dealer prices, without retail mark-up, mark-down
or commission and may not represent actual transactions. Moreover, the following
quotations are based on publically available historical charts.
Closing Bids
------------
HIGH LOW
---- ---
2007
----
Quarter ended December 31, 2007 $15.00 $3.00
Quarter ended September 30, 2007 $11.00 $1.00
Quarter ended June 30, 2007 $1.00 $1.00
Quarter ended March 31, 2007 $1.00 $3.00
2006
----
Quarter ended December 31, 2006 $25.00 $1.00
Quarter ended September 30, 2006 $68.00 $0.00
Quarter ended June 30, 2006 $0.15 $0.00
Quarter ended March 31, 2006 $0.00 $0.00
At the time of filing of this registration statement on Form 10-SB/12g,
there is no common stock that is subject to outstanding options or warrants to
purchase or securities convertible into, common equity of the Company.
It is the position of the Securities and Exchange Commission, in a No
Action Letter to OTC Compliance at the NASD, dated January 21, 2000, that Rule
144 is not available for resale transactions involving securities sold by
promoters and affiliates of a blank check company, and their transferees, and
anyone else who has been issued securities from a blank check company, and that
securities issued by a blank check company to promoters and affiliates, and
their transferees, can only be resold through registration under the Act.
Promoters and affiliates of a blank check company will be considered
underwriters under the Securities Act when reselling the securities of a blank
check company. At present, the Company is a development stage company with no
revenues and has no specific business plan or purpose. The Company's business
plan is to seek new business opportunities or to engage in a merger or
acquisition with an unidentified company. As a result, the Company is a blank
check company.
15
At the time of filing of this registration statement on Form 10-SB/12g,
there are approximately 29,295 shares of common stock that have been held in
access of one year and could be sold pursuant to Rule 144(b) without
restriction.
The ability of individual shareholders to trade their shares in a
particular state may be subject to various rules and regulations of that state.
A number of states require that an issuer's securities be registered in their
state or appropriately exempted from registration before the securities are
permitted to trade in that state.
Diversified Opportunities is not and is not proposing to publicly offer
any securities at this time.
From time-to-time the Company may grant options or warrants, or promise
registration rights to certain shareholders. The Company has no control over the
number of shares of its common stock that its shareholders sell. The price of
the Company's stock may be adversely affected if large amounts are sold in a
short period.
The Company's shares most likely will be subject to the provisions of
Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the
"penny stock" rule. Section 15(g) sets forth certain requirements for
transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of
penny stock as that used in Rule 3a51-1 of the Exchange Act.
The SEC generally defines penny stock to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the SEC; authorized for quotation on The
NASDAQ Stock Market; issued by a registered investment company; excluded from
the definition on the basis of price (at least $5.00 per share) or the issuer's
net tangible assets; or exempted from the definition by the SEC. Broker-dealers
who sell penny stocks to persons other than established customers and accredited
investors (generally persons with assets in excess of $1,000,000 or annual
income exceeding $200,000, or $300,000 together with their spouse), are subject
to additional sales practice requirements.
For transactions covered by these rules, broker-dealers must make a
special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent to clients disclosing recent price information
for the penny stocks held in the account and information on the limited market
in penny stocks. Consequently, these rules may restrict the ability of
broker-dealers to trade and/or maintain a market in our common stock and may
affect the ability of shareholders to sell their shares.
As of March 12, 2008, there were approximately 60 holders of record of
our common stock. This number does not include an indeterminate number of
shareholders whose shares are held by brokers in street name.
Dividends
---------
The Company has not declared any dividends since inception and does not
anticipate paying any dividends in the foreseeable future. The payment of
dividends is within the discretion of the Board of Directors and will depend on
the Company's earnings, capital requirements, financial condition, and other
relevant factors. There are no restrictions that currently limit the Company's
ability to pay dividends on its Common Stock other than those generally imposed
by applicable state law.
Equity Compensation Plans
-------------------------
We have no equity compensation plans.
16
ITEM 2. 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 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
In its two most recent fiscal years or any later interim period, the
Company has had no disagreements with its independent accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
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 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Diversified Opportunities Inc. is a Delaware corporation. Section 252 of
the Delaware General Corporation Law (DGCL) provides that the articles of
incorporation of a Delaware corporation may contain a provision eliminating or
limiting the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except that any such provision may not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) acts specified in
Section 7-108-403 (concerning unlawful distributions), or (iv) any transaction
from which a director directly or indirectly derived an improper personal
benefit. The Company's articles of incorporation contain a provision eliminating
the personal liability of directors to Standard Commerce or Standard Commerce
shareholders for monetary damages to the fullest extent provided by the DGCL.
Section 242 of the DGCL provides that a Delaware corporation must
indemnify a person who was wholly successful, on the merits or otherwise, in
defense of any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative and whether formal or
informal (a "Proceeding"), in which he or she was a party because the person is
or was a director, against reasonable expenses incurred by him or her in
connection with the Proceeding, unless such indemnity is limited by the
corporation's articles of incorporation. The Company's articles of incorporation
do not contain any such limitation.
17
Section 242 of the DGCL provides that a Delaware corporation may
indemnify a person made a party to a Proceeding because the person is or was a
director against any obligation incurred with respect to a Proceeding to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to an employee benefit plan) or reasonable expenses incurred in the
Proceeding if the person conducted himself or herself in good faith and the
person reasonably believed, in the case of conduct in an official capacity with
the corporation, that the person's conduct was in the corporation's best
interests and, in all other cases, his or her conduct was at least not opposed
to the corporation's best interests and, with respect to any criminal
proceedings, the person had no reasonable cause to believe that his or her
conduct was unlawful. The Company's articles of incorporation and bylaws allow
for such indemnification. A corporation may not indemnify a director in
connection with any Proceeding by or in the right of the corporation in which
the director was adjudged liable to the corporation or, in connection with any
other Proceeding charging that the director derived an improper personal
benefit, whether or not involving actions in an official capacity, in which
Proceeding the director was judged liable on the basis that he or she derived an
improper personal benefit. Any indemnification permitted in connection with a
Proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with such Proceeding.
Under 242 of the DGCL, unless otherwise provided in the articles of
incorporation, a Delaware corporation may indemnify an officer, employee,
fiduciary, or agent of the corporation to the same extent as a director and may
indemnify such a person who is not a director to a greater extent, if not
inconsistent with public policy and if provided for by its bylaws, general or
specific action of its board of directors or shareholders, or contract. The
Company's articles of incorporation provide for indemnification of directors,
officers, employees, fiduciaries and agents of Diversified Opportunities to the
full extent permitted by Delaware law.
PART F/S
The Company's audited financial statements for the fiscal years ended
December 31, 2007 and 2006 are attached hereto as F-1 through F-
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit No. Document
--------------------------------------------------------------------------------
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
23.1 Consent of Michael Cronin, CPA
18
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this amended registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Diversified Opportunities, Inc.
/s/ Michael Anthony
------------------------------------
Name: Michael Anthony
Title: President/CEO and Director
March 12, 2008
19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MICHAEL F. CRONIN
CERTIFIED PUBLIC ACCOUNTANT
ORLANDO, FL 32708
Board of Directors and Shareholders
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
West Palm Beach, Florida
I have audited the accompanying balance sheets of Diversified Opportunities,
Inc. (f/k/a Enlighten Software Solutions, Inc.) as of December 31, 2007 and 2006
and the related statements of operations, stockholders' deficiency and cash
flows for the years then ended. The financial statements are the responsibility
of the directors. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (UNITED STATES). Those standards require that I plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor was I engaged to perform, an audit of its internal control
over financial reporting. My audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Diversified
Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.) as of December
31, 2007 and 2006 and the results of its operations, its cash flows and changes
in stockholders' deficiency for the years then ended in conformity with
accounting principles generally accepted in the United States.
March 10, 2008
/s/ Michael F. Cronin
-------------------------------
Michael F. Cronin
Certified Public Accountant
F-1
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Balance Sheet
(Successor Company)
December 31,
------------------------------------------------------------------------------------
2007 2006
------------------------------------------------------------------------------------
ASSETS 2007 2006
Current assets
Cash $ 0 $ 0
Prepaid expenses 0 0
-------- --------
Total current assets 0 0
-------------------------------------------------------------------------------------
Total Assets $ 0 $ 0
-------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable-trade $ 6,268 $ 0
Accrued expenses 0 0
Due to related parties 16,049 1,268
Current portion of long term debt 0 0
-------- --------
Total current liabilities 22,317 1,268
Stockholders' Deficiency:
Common stock-300,000,000 authorized $0.001 par value
9,199,192 issuable or issued & outstanding (199,192 in 2006) 9,199 199
Additional paid-in capital 33,000 0
Common stock subscriptions receivable (30,000) 0
Accumulated Deficit (34,516) (1,467)
-------- --------
Total Stockholders' Deficiency (22,317) (1,268)
-------------------------------------------------------------------------------------
Total Liabilities & Stockholders' Deficiency ($ 0) $ 0
-------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
F-2
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Statement of Operations
(Successor Company)
Years Ended December 31,
2007 2006
----------- -----------
Revenue $ 0 $ 0
Costs & Expenses:
General & administrative 33,050 1,268
Interest 0 0
----------- -----------
Total Costs & Expenses 33,050 1,268
Loss from continuing operations before income taxes,
extraordinary gain and discontinued operations (33,050) (1,268)
Income taxes 0 0
-----------------------------------------------------------------------------------
Net Loss ($ 33,050) ($ 1,268)
-----------------------------------------------------------------------------------
Basic and diluted per share amounts:
Continuing operations ($ 0.01) 0
-----------------------------------------------------------------------------------
Basic and diluted net loss ($ 0.01) 0
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Weighted average shares outstanding (basic & diluted) 2,245,768 199,192
-----------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
F-3
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Statement of Cash Flows
(Successor Company)
Year Ended December 31,
--------------------------
2007 2006
----------- -----------
Cash flows from operating activities:
Net Loss ($ 33,050) ($ 1,268)
Adjustments required to reconcile net loss
to cash used in operating activities:
Fair value of services provided by related parties 22,678
Expenses paid by related parties 4,103 1,268
Increase (decrease) in accounts payable & accrued expenses 6,268 0
----------------------------------------------------------------------------------------
Cash used by operating activities: (0) 0
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Cash used in investing activities 0 0
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Cash generated by financing activities 0 0
----------------------------------------------------------------------------------------
Change in cash (0) 0
Cash-beginning of period 0 0
----------------------------------------------------------------------------------------
Cash-end of period ($ 0) $ 0
----------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
F-4
Diversified Opportunities, Inc. (f/k/a Enlighten Software Solutions, Inc.)
Statement of Stockholders' Deficiency
(Successor Company)
Common Stock
----------------------------------------------------------------------------
Additional
Common paid-in Subscriptions Deficit
Shares Stock capital Receivable Accumulated
-------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2005-
(restated to reflect 1:25
reverse stock split effective
February 11, 2008) 199,192 199 0 0 (199)
-------------------------------------------------------------------------------------------------------------------------
Net Loss (1,267)
-------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2006 199,192 199 $0 $0 ($1,466)
-------------------------------------------------------------------------------------------------------------------------
Stock issued for cash 9,000,000 9,000 21,000 (30,000)
Fair value of services provided by
related party 12,000
Net Loss (33,050)
-------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2007 9,199,192 9,199 $33,000 ($30,000) ($34,516)
-------------------------------------------------------------------------------------------------------------------------
See Summary of Significant Accounting Policies and Notes to Financial Statements.
F-5
DIVERSIFIED OPPORTUNITIES, INC.
(F/K/A ENLIGHTEN SOFTWARE SOLUTIONS, INC.)
BACKGROUND AND
SIGNIFICANT ACCOUNTING POLICIES
December 31, 2007
THE COMPANY
ORGANIZATIONAL BACKGROUND: Diversified Opportunities, Inc., (the "Company"), was
originally formed in California In June 1986 and ceased all operations in 2001.
The Company changed its name from Enlighten Software Solutions, Inc in 2007.
BANKRUPTCY PROCEEDINGS: On September 13, 2001 the Company filed voluntary
Chapter 7 petitions under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
for the Northern District of California, San Francisco Division (case no.
01-32337). As a result of the filing, all of our properties were transferred to
a United States Trustee and we terminated all of our business operations. The
Bankruptcy Trustee has disposed of all of the assets. On January 4, 2005 the
Chapter 7 bankruptcy was closed.
CALIFORNIA SUPERIOR COURT COUNTY OF SACRAMENTO 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.
BASIS OF PRESENTATION: 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. The results of the discontinued component have been
reclassified from continuing operations to discontinued operations. The
reclassification had no impact as the company had no sales or operating expenses
from discontinued operations for the period ended December 31, 2007 or 2006.
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from the estimates.
CASH AND CASH EQUIVALENTS: For financial statement presentation purposes, the
Company considers those short-term, highly liquid investments with original
maturities of three months or less to be cash or cash equivalents.
PROPERTY AND EQUIPMENT New property and equipment are recorded at cost. Property
and equipment included in the bankruptcy proceedings and transferred to the
Trustee had been valued at liquidation value. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally 5
years. Expenditures for renewals and betterments are capitalized. Expenditures
for minor items, repairs and maintenance are charged to operations as incurred.
Gain or loss upon sale or retirement due to obsolescence is reflected in the
operating results in the period the event takes place.
VALUATION OF LONG-LIVED ASSETS: We review the recoverability of our long-lived
assets including equipment, goodwill and other intangible assets, when events or
changes in circumstances occur that indicate that the carrying value of the
asset may not be recoverable. The assessment of possible impairment is based on
our ability to recover the carrying value of the asset from the expected future
pre-tax cash flows (undiscounted and without interest charges) of the related
operations. If these cash flows are less than the carrying value of such asset,
an impairment loss is recognized for the difference between estimated fair value
and carrying value. Our primary measure of fair value is based on discounted
cash flows. The measurement of impairment requires management to make estimates
of these cash flows related to long-lived assets, as well as other fair value
determinations.
F-6
STOCK BASED COMPENSATION: Stock-based awards to non-employees are accounted for
using the fair value method in accordance with SFAS No. 123R, ACCOUNTING FOR
STOCK-BASED COMPENSATION, and EITF Issue No. 96-18, ACCOUNTING FOR EQUITY
INSTRUMENTS THAT ARE ISSUED TO OTHER THAN EMPLOYEES FOR ACQUIRING, OR IN
CONJUNCTION WITH SELLING GOODS OR SERVICES.
On January 1, 2006, we adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") 123R, "Share-Based Payment" ("SFAS 123(R)"), which
requires that companies measure and recognize compensation expense at an amount
equal to the fair value of share-based payments granted under compensation
arrangements. Prior to January 1, 2006, we accounted for our stock-based
compensation plans under the recognition and measurement principles of
Accounting Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to
Employees," and related interpretations, and would typically recognize no
compensation expense for stock option grants if options granted had an exercise
price equal to the market value of the underlying common stock on the date of
grant.
We adopted SFAS 123(R) using the "modified prospective" method, which results in
no restatement of prior period amounts. Under this method, the provisions of
SFAS 123(R) apply to all awards granted or modified after the date of adoption.
In addition, compensation expense must be recognized for any unvested stock
option awards outstanding as of the date of adoption on a straight-line basis
over the remaining vesting period. We calculate the fair value of options using
a Black-Scholes option pricing model. We do not currently have any outstanding
options subject to future vesting therefore no charge is required for the years
ended December 31, 2007 or 2006. SFAS 123(R) also requires the benefits of tax
deductions in excess of recognized compensation expense to be reported in the
Statement of Cash Flows as a financing cash inflow rather than an operating cash
inflow. In addition, SFAS 123(R) required a modification to the Company's
calculation of the dilutive effect of stock option awards on earnings per share.
For companies that adopt SFAS 123(R) using the "modified prospective" method,
disclosure of pro forma information for periods prior to adoption must continue
to be made.
ACCOUNTING FOR OBLIGATIONS AND INSTRUMENTS POTENTIALLY TO BE SETTLED IN THE
COMPANY'S OWN STOCK: We account for obligations and instruments potentially to
be settled in the Company's stock in accordance with EITF Issue No. 00-19,
ACCOUNTING FOR DERIVATIVE FINANCIAL INSTRUMENTS INDEXED TO, AND POTENTIALLY
SETTLED IN A COMPANY'S OWN STOCK. This issue addresses the initial balance sheet
classification and measurement of contracts that are indexed to, and potentially
settled in, the Company's own stock.
FAIR VALUE OF FINANCIAL INSTRUMENTS: Statements of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments. Fair
value estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of December 31 2007. The
respective carrying value of certain on-balance sheet financial instruments
approximated their fair values.
These financial instruments include cash and cash equivalents, accounts payable
and accrued expenses. Fair values were assumed to approximate carrying values
for these financial instruments since they are short-term in nature and their
carrying amounts approximate fair values or they are receivable or payable on
demand.
EARNINGS PER COMMON SHARE: Basic net loss per share is computed using the
weighted average number of common shares outstanding during the period. Diluted
net loss per common share is computed using the weighted average number of
common and dilutive equivalent shares outstanding during the period. Dilutive
common equivalent shares consist of options to purchase common stock (only if
those options are exercisable and at prices below the average share price for
the period) and shares issueable upon the conversion of our Preferred Stock. Due
to the net losses reported, dilutive common equivalent shares were excluded from
the computation of diluted loss per share, as inclusion would be anti-dilutive
for the periods presented. Except as otherwise noted, all share, option and
warrant numbers have been restated to give retroactive effect to our reverse
split. All per share disclosures retroactively reflect shares outstanding or
issuable as though the reverse split had occurred January 1, 2006.
There were no common equivalent shares required to be added to the basic
weighted average shares outstanding to arrive at diluted weighted average shares
outstanding in 2007 or 2006.
F-7
INCOME TAXES: We must make certain estimates and judgments in determining income
tax expense for financial statement purposes. These estimates and judgments
occur in the calculation of certain tax assets and liabilities, which arise from
differences in the timing of recognition of revenue and expense for tax and
financial statement purposes.
Deferred income taxes are recorded in accordance with SFAS No. 109, "ACCOUNTING
FOR INCOME TAXES," or SFAS 109. Under SFAS No. 109, deferred tax assets and
liabilities are determined based on the differences between financial reporting
and the tax basis of assets and liabilities using the tax rates and laws in
effect when the differences are expected to reverse. SFAS 109 provides for the
recognition of deferred tax assets if realization of such assets is more likely
than not to occur. Realization of our net deferred tax assets is dependent upon
our generating sufficient taxable income in future years in appropriate tax
jurisdictions to realize benefit from the reversal of temporary differences and
from net operating loss, or NOL, carryforwards. We have determined it more
likely than not that these timing differences will not materialize and have
provided a valuation allowance against substantially all of our net deferred tax
asset. Management will continue to evaluate the realizability of the deferred
tax asset and its related valuation allowance. If our assessment of the deferred
tax assets or the corresponding valuation allowance were to change, we would
record the related adjustment to income during the period in which we make the
determination. Our tax rate may also vary based on our results and the mix of
income or loss in domestic and foreign tax jurisdictions in which we operate.
In addition, the calculation of our tax liabilities involves dealing with
uncertainties in the application of complex tax regulations. We recognize
liabilities for anticipated tax audit issues in the U.S. and other tax
jurisdictions based on our estimate of whether, and to the extent to which,
additional taxes will be due. If we ultimately determine that payment of these
amounts is unnecessary, we will reverse the liability and recognize a tax
benefit during the period in which we determine that the liability is no longer
necessary. We will record an additional charge in our provision for taxes in the
period in which we determine that the recorded tax liability is less than we
expect the ultimate assessment to be.
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," ("SFAS 109") which
requires recognition of estimated income taxes payable or refundable on income
tax returns for the current year and for the estimated future tax effect
attributable to temporary differences and carry-forwards. Measurement of
deferred income tax is based on enacted tax laws including tax rates, with the
measurement of deferred income tax assets being reduced by available tax
benefits not expected to be realized.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS (SFAS
157). SFAS 157 provides guidance for using fair value to measure assets and
liabilities. It also responds to investors' requests for expanded information
about the extent to which companies measure assets and liabilities at fair
value, the information used to measure fair value, and the effect of fair value
measurements on earnings. SFAS 157 applies whenever other standards required (or
permit) assets or liabilities to be measured at fair value, and does not expand
the use of fair value in any new circumstances. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007.
We are currently evaluating the effect that the adoption of SFAS 157 will have
on our results of operations and financial condition and are not yet in a
position to determine such effects.
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 ending December 31, 2006. We are
currently evaluating the effect that the adoption of SAB 108 will have on our
results of operations and financial.
F-8
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.
F-9
DIVERSIFIED OPPORTUNITIES, INC.
(F/K/A ENLIGHTEN SOFTWARE SOLUTIONS, INC.)
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
1. "FRESH START" ACCOUNTING:
On September 13, 2001 all of the Company's 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.
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.
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 225,000,000 (9,000,000 post split) shares of common stock on
October 9, 2007.
Mr. Anthony is the sole beneficiary of CSIPSP and has sole voting and
dispositive control.
3. INCOME TAXES:
We have adopted SFAS 109 which provides for the recognition of a deferred tax
asset based upon the value the loss carry-forwards will have to reduce future
income taxes and management's estimate of the probability of the realization of
these tax benefits. Our net operating loss carryovers incurred prior to 2005
considered available to reduce future income taxes were reduced or eliminated
through our recent change of control (I.R.C. Section 382(a)) and the continuity
of business limitation of I.R.C. Section 382(c).
We have a current operating loss carry-forward of $ 20,000 resulting in deferred
tax assets of $3,000. We have determined it more likely than not that these
timing differences will not materialize and have provided a valuation allowance
against substantially all our net deferred tax asset.
F-10
Future utilization of currently generated federal and state NOL and tax credit
carry forwards may be subject to a substantial annual limitation due to the
ownership change limitations provided by the Internal Revenue Code of 1986, as
amended and similar state provisions. The annual limitation may result in the
expiration of NOL and tax credit carry forwards before full utilization.
4. COMMITMENTS:
The Company is not a party to any leases and does not have any commitments
5. STOCKHOLDERS' EQUITY:
REVERSE STOCK SPLIT
On January 14, 2008 we declared a reverse split of our common stock. The formula
provided that every twenty (25) issued and outstanding shares of common stock of
the Corporation be automatically split into 1 share of common stock. Any
resulting share ownership interest of fractional shares was rounded up to the
first whole integer in such a manner that all rounding was done to the next
single share and each and every shareholder would own at least 1 share. The
reverse stock split was effective February 11, 2008 for holders of record at
February 11, 2008. Except as otherwise noted, all share, option and warrant
numbers have been restated to give retroactive effect to this reverse split. All
per share disclosures retroactively reflect shares outstanding or issuable as
though the reverse split had occurred January 1, 2006.
COMMON STOCK
We are currently authorized to issue up to 300,000,000 shares of $ 0.001 par
value common stock. All issued shares of common stock are entitled to vote on a
1 share/1 vote basis. On October 9, 2007 Corporate Services International Profit
Sharing Plan agreed to contribute a total of $30,000 as paid in capital in
exchange for 9,000,000 post-split shares of restricted common stock. The company
is to use these funds to pay the costs and expenses necessary to revive business
operations. Such expenses include fees to reinstate the corporate charter;
payment of all past due franchise taxes; settling all past due accounts with the
transfer agent; accounting and legal fees; costs associated with bringing
current its filings with the Securities and Exchange Commission, etc. As of
December 31, 2007 such expenses aggregating $4,103 have been paid. In January,
2008 the full subscription of $30,000 was received.
PREFERRED STOCK
We are currently authorized to issue up to 10,000,000 shares of $ 0.001
preferred stock. On January 25, 2007 the board of directors approved the
cancellation of all previously issued preferred shares and approved the
cancellation and extinguishment of all common and preferred share conversion
rights of any kind, including without limitation, warrants, options, convertible
debt instruments and convertible preferred stock of every series and
accompanying conversion rights of any kind.
FAIR VALUE OF SERVICES:
The principal stockholder provided, without cost to the Company, his services,
valued at $1,800 per month for July through December, which totaled $10,800 for
the six-month period ended December 31, 2007. The principal stockholder also
provided, without cost to the Company, office space valued at $200 per month,
which totaled $1,200 for the six-month period ended December 31, 2007. The total
of these expenses was $12,000 and was reflected in the statement of operations
as general and administrative expenses with a corresponding contribution of
paid-in capital.
There are no employee or non-employee options grants.
6. RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE:
DUE RELATED PARTIES: Amounts due related parties consist of corporate
reinstatement expenses paid by the principal shareholder prior to the
establishment of a bank account. Such items totaled $5,371 and $1,268 at
December 31, 2007 and 2006 respectively. Legal services provided to the company
by Laura Anthony through Legal & Compliance, LLC (Michael Anthony's spouse) were
valued at $10,678 and was unpaid at December 31, 2007.
F-11