FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE 1934 ACT
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
DIVERSIFIED INVESTORS CORPORATION.
( Name of Small Business Issuer in its charter)
DELAWARE (13-2624828)
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
236 East 36th Street, Suite 1E, NY, NY. 10016
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (212)684-0401
Securities to be registered under section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
--------------------------------- ---------------------------------
--------------------------------- ---------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
50,000,000 Shares of Common Stock, Par Value $0.0001
(Title of class)
Noncumulative Voting of DIVERSIFIED INVESTORS CORPORATION.
(Title of class)
<PAGE>
INFORMATION REQUIRED
IN REGISTRATION
STATEMENT
PART I
Item 1. Description of Business
DIVERSIFIED INVESTORS CORPORATION (hereinafter the "Company") was
incorporated under the laws of the State of Delaware on December 30, 1968. The
Company name at that time was Diversified Medical Corporation. The Company went
public with a Regulation A offering, with its prospectus becoming effective in
January of 1969. The Company sold 100,000 shares at $3.00 per share.
The Company was in the business of developing the DM Gastricamer, a device
that took pictures of the inside of the stomach. In August of 1970 the Company
opened an abortion center.
On December 30, 1981 the Company changed its name to Diversified Investors
Corporation, and its business changed to a holding company. At the time the
Company acquired several subsidiaries. They were Pacad, Inc, Riteloc, Inc, and
National Medical Management, Inc. By 1989 interest in all had been sold.
On August 6, 1987 the Company formed a wholly owned subsidiary named
Diversified Distributing and Marketing Corp. The purpose of the business was
selling fax machines. The business was closed by 1992.
On February 14, 1989 the Company formed a wholly owned subsidiary named
Diversified Transactions, Inc. The purpose of the business was data processing.
The business was closed by 1994.
On February 28, 1989 the Company formed a wholly owned subsidiary named
Diversifax, Inc. The purpose of the business was owning, operating, and selling
self-service, credit card activated, public access combination telephone and
facsimile machines. All interest in the Company was sold by 1995.
In June of 1990 the Company formed a wholly owned subsidiary named
Transaction Network Plus, Inc. The purpose of the business was processing debit
and credit cards. All interest in the Company was sold by November of 1996.
On February 25, 1994 the Company formed a wholly owned subsidiary named
Diversified Colorado, Inc. The purpose of the business was to invest in real
estate in the State of Colorado. On December 1, 1998 Diversified Investors
Corporation declared a dividend to its shareholders of all the shares of
Diversified Colorado, Inc.
On November 19, 1996, the Board of Directors authorized a 1 for 20 reverse
common stock split effective as to stockholders of record at the close of
business on January 2, 1997.
On November 12, 1997 the Company formed a wholly owned subsidiary named
Internet Marketing Corp. The purpose of the business was the provision of
advertising, marketing and other services to an international sports wagering
service located in Costa Rica. The business was closed by 1998.
On January 26, 1998 the Company bought a small interest in Direct
Brokerage, Inc. Which is an N.A.S.D. member firm. The Company sold its interest
in April 1998.
At a meeting of the Stockholders held on November 17, 1998, a new Slate of
Directors were elected and the authorized shares were increased to 50,000,000
shares with a par value of .0001 cents per share. Following the
<PAGE>
Stockholder Meeting the new Board of Directors met and elected Officers. The old
Board of Directors and Officers resigned. The new directors issued 46,421,167
shares of common stock to Gregory Aurre, the new President and Director, for
services rendered and expenses paid. This gave Mr. Aurre the controlling
interest in the company. The Board also issued 400,000 shares to other
affiliated parties for services rendered.
The Company presently has no material tangible assets or property. The
Company intends to continue to seek out the acquisition of assets, property or
business that may be beneficial to the Company and its stockholders. In
considering whether to complete any such acquisition, the Board of Directors
shall make the final determination, and the approval of stockholders will not be
sought unless required by applicable law, the Articles of Incorporation or by
laws of the Company or contract. The Company is a development stage company and
is currently seeking business opportunities believed to hold a potential for
profit. The Company has not presently identified a specific business area of
direction that it will follow. Therefore, no principal operation has yet begun.
The Company has no products and offers no services.
Item 2. Plan of Operation
The Company presently has no material tangible assets or property. The
Company intends to seek out the acquisition of an operating company through the
reverse merger process, whereby the officers and or directors of the private
operating company would gain control of the Company and the present officers and
directors would resign. Hopefully this would be beneficial to the Company and
its stockholders. There is no assurance that such an acquisition will take
place. The only efforts taking place are through the Company's President and his
personal contacts. The Company is a development stage company and has not
presently identified a specific business area of direction that it will follow.
Therefore, no principal operation has yet begun. The Company has no products and
offers no services. The Registrant has had no business operation since 1998. It
is not anticipated that any business operation will develop unless and until the
Company acquires or merges with an operating company. There is no assurance that
such an acquisition or merger will occur. The Registrant has no revenues. The
general trend in the Registrant's lack of operation is expected to continue, and
no revenue is expected.
Item 3. Description of Property
The Company has no property or assets; its principal executive office
address and telephone number are the office and telephone of the President and
provided at no cost. The Company is in a development stage and has no products
or services.
Item 4. Security Ownership of Certain Beneficial Owners and Management
As of November 30, 1999, the only persons known to the Registrant to be the
beneficial owner of more than 5% of the Registrant's common voting securities is
set forth as follows:
Title of Class Name & Address of Amount & Nature of Percent of
Beneficial Owner Beneficial Owner Class
Common Gregory Aurre 46,421,167 92%
236 East 36th Street
Suite 1E
New York, New York 10016
Common Amerika Aurre 100,000 1%
259 West 10th Street
Apt. 2F
New York, New York 10014
<PAGE>
Common Gregory Aurre III 300,000 1%
200 East 33rd Street
Apt 26-I
New York, NY 10016
Security Ownership of Management
The following table sets forth, as of November 30, 1999, certain
information regarding the ownership of the common stock, $0.0001 par value,
which is the only class of securities authorized, issued and outstanding of the
Registrant by its Officers and Directors, and as a group.
Title of Class Name of Beneficial Amount & Nature of Percent of
Owner Beneficial Ownership Class
Common Gregory Aurre 46,421,167 92.84%
Common Amerika Aurre 100,000 .002%
Common Gregory Aurre III 300,000 .006%
Common Officers & Directors 46,821,167 92.848%
as a Group
To the best knowledge of the Registrant, there are no arrangements,
understanding's or agreements relative to the disposition of any of the
Registrant's securities, the operation of which would at a subsequent date
result in a change in control of the Registrant.
Item 5. Directors, Executive Officers,
Promoters and Control Persons
The following table sets forth the names and ages of all the directors and
executive officers of the Registrant. Further more, the table shows the
positions held by each such person, length of service, date of initial
appointment of election to office, and the term of office:
Name and Age Position First Elected Director Term
Or Appointed of Office
Gregory Aurre President & 17-Nov-98 Until 2000
Age 51 Director Shareholders Meeting
Gregory Aurre III Secretary, 17-Nov-98 Until 2000
Age 27 Treasurer & Shareholders Meeting
(Son of Gregory Aurre)Director
Amerika Aurre Director 17-Nov-98 Until 2000
Age 28 Shareholders Meeting
(Daughter of
Gregory Aurre)
Gregory Aurre, Director and President
<PAGE>
Mr. Aurre is 51 years old and is an independent financial consultant. From
1990 to present he has acted as a financial consultant. From 1986 to 1990, Mr.
Aurre was the President of Texas Coastal Exploration, Inc., a company involved
in oil and gas exploration. From 1981 to 1986, Mr. Aurre was the President of
United Petroleum Corporation, a company involved in oil and gas exploration.
From 1970 to 1981, Mr. Aurre was the President of Aurre Management Co., Inc., a
company involved in financial consulting.
Amerika Aurre, Director
Ms. Aurre is 28 years old and the daughter of the President of the Company,
Gregory Aurre. She has been employed in the fashion merchandising industry for
eight years.
Gregory Aurre III, Director and Secretary-Treasurer
Mr. Aurre is 27 years old and the son of the President of the Company,
Gregory Aurre. He is a Licensed Securities Sales Person with an N.A.S.D. member
firm.
Family Relationships
Amerika Aurre is the daughter of Gregory Aurre. Gregory Aurre III is the
son of Gregory Aurre.
Item 6. Executive Compensation
None of the officers or directors of the Registrant has been, or is being
paid any cash compensations, or is otherwise subject to any deferred
compensation plan, bonus plan, or is the subject of any option agreement or any
other arrangement or understanding whereby such person would obtain any cash or
non-cash compensation for their services for and on behalf of the Registrant,
except for the common stock that the directors have received as set forth in
Item 1.
Item 7. Certain Relationships and Related Transactions
Transactions with Management and Others:
On November 17, 1998, the date under which present management took control
of the Registrant, and Mr. Aurre, the Registrant's President, acquired
controlling interest of the Company, 46,421,167 shares of common stock were
issued to him for services rendered and expenses paid.
On November 17, 1998, the Board of Directors acquired an additional 400,000
shares of common stock for services rendered, whereby the directors as a group
control 92.848% of the common voting shares of the company.
Certain Business Relationships
Mr. Gregory Aurre, the Registrant's President, director and owner of the
controlling interest in the company (92.84%) is the father of the Registrant's
Secretary-Treasurer and director, Gregory Aurre III. Mr. Gregory Aurre is also
the father of the only other director of the Registrant, Amerika Aurre.
Indebtedness of Management
None of the Registrant's officers and directors are indebted to the
Company, and have not been at any time.
Transaction with Promoters
The names of the Promoters and the nature and amount of anything of value
received are as follows:
<PAGE>
Names Common Stock Cash Property, Contracts,
Received Received Options Received or
Due in the Future
Gregory Aurre 46,421,167 -0- -0-
Amerika Aurre 100,000 -0- -0-
Gregory Aurre III 300,000 -0- -0-
The promoters of the Registrant received no cash compensation. The only
compensation was the shares of common stock listed above.
Item 8. Description of Securities
The aggregate number of shares which the Registrant is authorized to issue
is fifty million (50,000,000) shares of common stock of par value $0.0001 per
share. All stock of the corporation shall have the same rights and preferences,
all are fully-paid and non-assessable.
In 1969, The Company went public with an exemption from registration
pursuant to a Regulation A offering. The company sold 100,000 shares at $3.00
per share. On November 19, 1996, the Board of Directors authorized a 1 for 20
reverse common stock split effective as to shareholders of record at the close
of business on January 2, 1997.
On November 17, 1998 the Board of Directors issued 46,821,167 of restricted
common stock to them selves for services rendered and expenses paid by its new
president. This gave Mr. Gregory Aurre, control of the Company. The shares
issued are restricted and unregistered.
Dividend Rights
Holders of shares of Common Voting Stock of the Registrant are entitled to
receive, out of funds legally available, such dividends as may be declared by
the Board of Directors. The Registrant does not foresee any dividends being paid
in the reasonably foreseeable future, as it does not expect to generate revenues
from operations for at least a period of one (1) year or more, and the Board of
Directors decision to declare such a dividend subsequent thereto will depend
upon the capital resource needs of the Registrant at that time.
Voting Rights
Holders of shares of Common Voting Stock are entitled to one (1) vote per
outstanding share held on each matter submitted to a vote at a meeting of
shareholders. Each holder may exercise such vote either through proxy or in
person. Holders of a majority of the shares issued and outstanding, present in
person or by proxy, constitute a quorum for shareholder meetings.
No Cumulative Voting
Shareholders are not entitled to cumulative voting as regards the election
of Directors.
Liquidation Rights
Upon liquidation, dissolution or winding up of the Registrant, the
Shareholders would be entitled to share ratably in any assets available for
distribution to Shareholders.
<PAGE>
Purchase and Redemption
Subject to special rights and restrictions attached to any class of shares,
the Registrant may, in compliance with the corporate law of Delaware, repurchase
shares which are redeemable, unless a proposed purchase or redemption would
render the Registrant unable to meet its liabilities as they mature. The
Registrant is not aware of any restrictions in purchasing shares of its Common
Stock on the open market.
Miscellaneous
The shares of Common Stock of the Registrant have no conversion,
subscription, sinking fund or pre- emptive rights. All issued and outstanding
shares are fully paid and non-assessable and not liable to further calls or
assessments.
There are no warrants, rights, or options outstanding as of November 30,
1999. There are 590 shareholders from all issues, as of November 30, 1999.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters
The Company shares are traded on the pink sheets, the symbol is DIVN. The
Company shares were traded on the Over-the-Counter Bulletin Board until October
1999.
The following quotes were provided to the Company from the National
Quotation Bureau:
<TABLE>
<CAPTION>
CLOSING BID CLOSING ASK
1998 HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
DEC 1
THRU .13 .13 .16 .16
FEB 26, 1999
1999
MAR 1
THRU .13 .13 .16 .16
MAY 31
JUNE 1
THRU .13 .13 .16 .15
AUG 31
SEPT 1
THRU .13 .001 .51 .135
NOV 30
DEC 1
THRU .01 .001 .51 .51
FEB 29, 2000
2000
<PAGE>
MAR 1
THRU .01 .001 .51 .51
MAY 31
JUNE 1
THRU .14 .01 .20 .05
JULY 19
</TABLE>
Dividends
There have been no cash dividends declared at any time, and no dividends
are contemplated to be paid in the foreseeable future, particularly in view of
the uncertainty of generating revenue from future operations.
Item 2. Legal Proceedings
The Registrant is a party in litigation with a former officer of a
subsidiary. The Company has reached a tentative agreement to settle for the sum
of $25,000. The Company has no knowledge of any other pending legal proceedings
in any court or agency of government, or government authorities.
On December 2, 1998 the Company filed a voluntary petition of Bankruptcy,
in the United States Bankruptcy Court Southern District of New York. On March 2,
1999 the case was closed.
Item 3. Changes in and Disagreements
With Accountants
The Registrant retained the services of: HJ & Associates, LLC Certified
Public Accountants. There are no disagreements with any accounting or financial
disclosure.
Item 4. Recent Sales of Unregistered Securities
On November 17, 1998, there was a special meeting of the Board of Directors
of the Registrant, Diversified Investors Corporation (Delaware). At that
meeting, the present management took control and issued forty six million four
hundred and twenty one thousand one hundred and sixty seven shares of common
stock with a par value of $0.0001 per share to the new President, Mr. Gregory
Aurre, for services rendered and expenses paid, which represented 92.84% of the
common stock. These securities are restricted and unregistered. Also at that
meeting the Board of Directors issued 400,000 shares to the other two Directors.
These securities are restricted and unregistered. With respect to all the above
transactions, the number of shares issued by the Registrant were arbitrarily
determined, and were not a result of negotiations. These transactions were not
arm's-length and no fair market value was established.
On January 21, 2000 the Division of Corporate Finance issued an
interpretive letter to the National Association of Securities Dealers, Inc.
Wherein the Division of Corporate Finance concluded that promoters or affiliates
of blank check companies and their transferees would act as "underwriters" under
the Securities Act of 1933 (the "Act") when reselling or otherwise transferring
the securities of blank check companies. The letter also indicated that the
Division of Corporate Finance (the "Division") believed that those securities
could only be resold through registration under the Act and that Rule 144 of the
Act would not be available for resale transactions despite technical compliance
with the requirements of the Rule.
Item 5. Indemnification of Directors
And Officers
In accordance with the General Corporation Laws of the State of Delaware,
the Registrant's Board of Directors has adopted by resolution provisions
relative to indemnification of its Officers and Directors against expenses,
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with the
<PAGE>
defense of any proceeding or threatened proceeding to which such person was or
is a party, or is threatened to be made a party by reason of the fact that such
person was or is an officer or director, provided that (I) such officer or
director acted in good faith and in manner reasonably believed by him/her to be
in the interests of the corporation, or in the case in criminal proceeding, had
no reasonable cause to believe his/her conduct was unlawful and (II) such
proceedings was not brought by or in the right of such corporation to procure a
judgment in its favor. In the latter case, the power to indemnify extends to
expenses actually and reasonably incurred by such officer or director in
connection with the defense or settlement of any proceeding if such person (I)
acted in good faith and (II) in a manner such officer and director believed to
be in the best interests of such corporation and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances. No indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that the court in which such action
or suit was brought shall determine upon an application of that, despite the
adjudication of liability, but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper. Otherwise, indemnification for an officer or
director meeting the applicable standard of conduct is determined by a majority
vote of the disinterested directors or Shareholders or upon application by the
corporation, such officer or director or his/her attorney, to the court in which
such proceeding was pending.
The Registrant has agreed to indemnify its officers and directors to the
full extent as provided by Delaware law.
PART F/S
The following discussion should be read in conjunction with the Financial
Statements and related notes included elsewhere in this Registration Statement.
<TABLE>
<CAPTION>
YEARS ENDED November 30
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Revenue -0- -0- $594,613 $305,139 426,630
Income (loss) ($25,445) ($4,616,826) ($55,636) (359,721) (333,344)
Income (loss) -0- (1.44) (.03) (.35) (0.01)
Per Common Share
Total Assets -0- $444. 4,409,693 4,539,311 5,540,560
Long Term Obligation -0- 2,821,178 2,624,352 2,441,258 2,270,938
Redeemable Preferred Stock -0- -0- -0- 450,000 450,000
Long Term Debt -0- -0- -0- -0- -0-
</TABLE>
The Registrant has not paid a cash dividend since inception, and does not
anticipate doing so in the foreseeable future.
Management's Discussion and Analysis of Financial Condition and Results of
Operation.
Liquidity
The Registrant has no assets, no cash, and no liquidity. Its president has
personally paid all expenses for the Company. The Company plans no operations,
and has no source of funds required to meet its obligations. The President of
the Registrant plans to pay the expenses of the Company until such time that the
Company acquires or mergers with an active business. Their is no assurance the
President will continue this relationship.
<PAGE>
Capital Resources
The Registrant has no material commitments for capital expenditures as of
November 30, 1999. The Registrant has no assets, no cash, and no capital
resources. The Registrant has no anticipated source of funds needed to fulfill
its commitments. The Registrant has had no business operations since 1998. The
Registrant's President has been the primary entity funding the Company's
operation.
Results of Operations
The Registrant has had no business operations since 1998. It is not
anticipated that any business operation will develop unless and until the
Company acquires or merges with an operating company. There is no assurance that
such an acquisition or merger will occur. The Registrant has no revenues. The
general trend in the Registrant's lack of operation is expected to continue, and
no revenue is expected.
PART III.
Item 1. Index to Exhibits
EXHIBITS
The exhibits referred to here in above are more particularly described
below. In addition to these exhibits, certain other exhibits have been attached
hereto as supplementary information, and may assist in a further understanding
of the information presented.
Exhibit No. Description of Exhibits
3.1 Artlices of Incorporation
3.2 Amendment to the Aticles of Incorporation
3.3 Amendment to the Aticles of Incorporation
3.4 Amendment to the Aticles of Incorporation
3.5 Amendment to the Aticles of Incorporation
27 Financial Data Schedule
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Diversified Investors Corporation.
Date: AUGUST 30, 2000
By /S/ GREGORY AURRE
Gregory Aurre - President
<PAGE>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1999
<PAGE>
<TABLE>
<CAPTION>
C O N T E N T S
<S> <C>
Independent Auditors' Report................................................................................... 3
Consolidated Balance Sheet..................................................................................... 4
Consolidated Statements of Operations.......................................................................... 5
Consolidated Statements of Stockholders' Equity (Deficit)...................................................... 6
Consolidated Statements of Cash Flows...........................................................................7
Notes to the Consolidated Financial Statements..................................................................8
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Diversified Investors Corporation and Subsidiaries
(A Development Stage Company)
New York City, New York
We have audited the accompanying consolidated balance sheet of Diversified
Investors Corporation and Subsidiaries (a development stage company) as of
November 30, 1999, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the years ended November 30,
1999 and 1998 and from the inception of the development stage on December 1,
1998 through November 30, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Diversified Investors Corporation and Subsidiaries (a development stage company)
as of November 30, 1999, and the consolidated results of their operations and
their cash flows for the years ended November 30, 1999 and 1998 and from the
inception of the development stage on December 1, 1998 through November 30, 1999
in conformity with generally accepted accounting principles.
The accompany consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 5 to the
consolidated financial statements, the Company's recurring losses from
operations and net accumulated deficit raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning these matters are
also described in Note 5. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
HJ & Associates, LLC
Salt Lake City, Utah
June 18, 2000
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
November 30,
1999
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable (Note 4) $ 42,649
Total Current Liabilities 42,649
Total Liabilities 42,649
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.0001 par value, authorized
50,000,000 shares, issued 50,000,000 5,000
Additional paid-in capital 7,667,426
Treasury stock, at cost, 20,000 shares (1,000)
Accumulated deficit prior to development stage (7,688,630)
Accumulated deficit from inception of development stage on
December 1, 1998 (25,445)
Total Stockholders' Equity (Deficit) (42,649)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
From
Inception of
Development
Stage on
For the December 1,
Years Ended 1998 Through
November 30, November 30,
1999 1998 1999
<S> <C> <C> <C>
REVENUES $ - $ - $ -
EXPENSES 25,445 - 25,445
NET LOSS BEFORE DISCONTINUED
OPERATIONS (25,445) - (25,445)
LOSS FROM DISCONTINUED OPERATIONS
(Note 2) - (4,616,826) -
NET LOSS $ (25,445) $ (4,616,826) $ (25,445)
BASIC LOSS PER SHARE $ (0.00) $ (1.44)
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
Additional
Common Stock Paid-in Treasury Stock Accumulated
Shares Amount Capital Shares Amount Deficit
<S> <C> <C> <C> <C> <C> <C>
Balance,
November 30, 1997 3,163,833 $ 316 $ 4,759,577 27,500 $ (1,375) $(3,071,804)
Common stock issued for
cash at $0.10 per share 15,000 2 1,498 - - -
Contributed capital
for expenses - - 43,408 - - -
Net loss for the year ended
November 30, 1998 - - - - - (4,616,826)
Balance,
November 30, 1998 3,178,833 318 4,804,483 27,500 (1,375) (7,688,630)
Common stock issued in lieu of
debt at $0.001 per share 46,821,167 4,682 42,139 - - -
Cancellation of shares held
in treasury - - (375) (7,500) 375 -
Disposition of subsidiary (Note 1) - - 2,821,179 - - -
Net loss for the year ended
November 30, 1999 - - - - - (25,445)
Balance,
November 30, 1999 50,000,000 $ 5,000 $ 7,667,426 20,000 $ (1,000) $(7,714,075)
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
From
Inception of
Development
Stage on
For the December 1,
Years Ended 1998 Through
November 30, November 30,
1999 1998 1999
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (25,445) $ (4,616,826) $ (25,445)
Adjustments to reconcile net loss to
net cash used by operating activities:
Loss on disposition of fixed assets - 26,669 -
Contributed capital for expenses - 43,408 -
Loss on investment property - 4,000,000 -
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable - 48,478 -
(Increase) decrease in other current assets - 99,295 -
Increase (decrease) in accounts payable 25,001 209,418 25,001
Net Cash Used by Operating Activities (444) (189,558) (444)
CASH FLOWS FROM INVESTING ACTIVITIES - - -
CASH FLOWS FORM FINANCING ACTIVITIES
Repayment of stockholders' loans - (46,749) -
Issuance of common stock for cash - 1,500 -
Net Cash Provided by Financing Activities - (45,249) -
NET INCREASE (DECREASE) IN CASH (444) (234,807) (444)
CASH AT BEGINNING OF YEAR 444 235,251 444
CASH AT END OF YEAR $ - $ 444 $ -
CASH PAID FOR:
Interest expense $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for debt $ 46,821 $ - $ 46,821
Disposition of subsidiary $ 2,821,178 $ - $ 2,821,178
Contributed capital for expenses $ - $ 43,408 $ -
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
November 30, 1999
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY
a. Organization
The consolidated financial statements presented are those of
Diversified Investors Corporation and its wholly-owned
subsidiaries, Internet Marketing Corp., Diversified Colorado,
Inc., Diversified Distributing and Marketing, and Diversified
Transactions, Inc. Collectively, they are referred to herein as
the "Company." Diversified Investors Corporation was incorporated
under the name of Diversified Medical Corporation on December 30,
1968 under the laws of the State of Delaware for the purpose of
engaging in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
Effective December 30, 1981, Diversified Medical Corporation
changed its name to Diversified Investors Corporation.
Internet Marketing Corp. (IMC) was incorporated on November 12,
1997 under the laws of the State of Delaware for the purpose of
engaging in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
Diversified Colorado, Inc. (DCI) was incorporated on February 25,
1994 under the laws of the State of Delaware for the purpose of
engaging in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
Diversified Distributing & Marketing Corp. (DDMC) was incorporated
on August 4, 1987 under the laws of the State of Delaware for the
purpose of engaging in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
Diversified Transactions, Inc. (DTI) was incorporated on February
14, 1989 under the laws of the State of Delaware for the purpose
of engaging in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
On December 1, 1998, the Board of Directors of the Company
divested itself of DCI, a wholly- owned subsidiary, by authorizing
a fully liquidating stock dividend of the common stock of DCI on a
pro-rata basis to the shareholders of Diversified Investors
Corporation. As part of this transaction, additional capital of
$2,821,179 was recorded as a result of the transfer of certain
liabilities of DCI to the shareholders.
b. Accounting Method
The Company's consolidated financial statements are prepared using
the accrual method of accounting. The Company has elected a
November 30, year end.
c. Principles of Consolidation
The consolidated financial statements include those of Diversified
Investors Corporation and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated.
<PAGE>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
November 30, 1999
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY (Continued)
d. Cash and Cash Equivalents
For purposes of financial statement presentation, the Company
considers all highly liquid investments with a maturity of three
months or less, from the date of purchase to be cash equivalents.
e. Basic Loss Per Share
The computation of basic loss per share of common stock is based
on the weighted average number of shares issued and outstanding
during the period of the financial statements as follows:
<TABLE>
<CAPTION>
November 30,
1999 1998
<S> <C> <C>
Numerator - loss $ (25,445) $ (4,616,826)
Denominator - weighted average number of
shares outstanding 50,000,000 3,176,333
Loss per share $ (0.00) $ (1.44)
</TABLE>
Dilutive loss per share is not presented as there are no
potentially dilutive items outstanding.
f. Use of Estimates
The use of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
g. Provision for Taxes
At November 30, 1999, the Company had net operating loss
carryforwards of approximately $7,600,000 that may be offset
against future taxable income through 2019. No tax benefit has
been reported in the consolidated financial statements, because
the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax
benefits of the net operating loss carryforwards are offset by a
valuation allowance of the same amount
<PAGE>
DIVERSIFIED INVESTORS CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
November 30, 1999
NOTE 2 - DISCONTINUED OPERATIONS
During December 1998, the Board of Directors of the Company
decided to discontinue the operations of Diversified Investors
Corporation and each of its subsidiaries. The Company is now
considered a development stage company until it identifies and
commences future principal operations.
For the presentation in this financial statement, all revenues and
expenses have been netted and are included in the line item loss
from discontinued operations on the statement of operations for
the year ended November 30, 1998.
NOTE 3 - CAPITAL STOCK
On November 19, 1996, the Board of Directors authorized a 1
for 20 reverse common stock split effective as to stockholders of
record at the close of business on January 2, 1997. All per share
amounts and numbers of shares have been restated to reflect the
stock split.
During December 1998, the Company issued 46,821,167 shares of
common stock to officers in lieu of outstanding debt of $46,821.
This amount approximates the fair market value of the stock on the
date of issuance.
NOTE 4 - ACCOUNTS PAYABLE
The Company's accounts payable includes an amount of $25,000 which
has been accrued pursuant to a proposed settlement agreement with
a private, unrelated party. The original claim was for $200,000,
although management believes that a settlement has been reached
for the $25,000. It is remotely possible, however, that the
Company will be liable for the entire $200,000 if final
settlements are not reached. The Company has not recently engaged
legal
<PAGE>
counsel on this matter and is facilitating all settlement
negotiations internally.
NOTE 5 - GOING CONCERN
The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company does not have significant cash or other
material assets, nor does it have an established source of
revenues sufficient to cover its operating costs and to allow it
to continue as a going concern. It is the intent of the Company to
seek a merger with an existing, operating company. Until that
time, the majority stockholder has committed to covering the
operating costs of the Company.
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
BALANCE SHEETS
May 31, 2000 and November 30, 1999
5/31/00 11/30/99
[Unaudited]
ASSETS
<S> <C> <C>
Assets $ 0 $ 0
Total Assets ................................ $ 0 $ 0
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Loans from stockholders .............................. $ 1,679 $ 0
Accounts Payable ..................................... 42,649 42,649
Total Current Liabilities ................... 44,328 42,649
Total Liabilities ........................... 44,328 42,649
Stockholders' Deficit:
Common Stock, $.0001 par value;
authorized 50,000,000 shares; issued and
outstanding, 50,000,000 shares .............. 5,000 5,000
Additional Paid-in Capital ........................... 7,667,426 7,667,426
Treasury stock, at cost, 20,000 ...................... (1,000) (1,000)
Accumulated Deficit Prior to Development Stage ....... (7,688,630) (7,688,630)
Deficit accumulated during development stage ......... (27,124) (25,445)
Total Stockholders' Deficit ................. (44,328) (42,649)
Total Liabilities and Stockholders' Deficit $ 0 $ 0
</TABLE>
NOTE TO FINANCIAL STATEMENTS: Interim financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the periods. The November 30, 1999 balance sheet
has been derived from the audited financial statements. These interim financial
statements conform with the requirements for interim financial statements and
consequently do not include all the disclosures normally required by generally
accepted accounting principles.
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
STATEMENTS OF OPERATIONS
For the Three and Six Month Periods Ended May 31, 2000 and 1999
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
5/31/00 5/31/99 5/31/00 5/31/99
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
REVENUE
Income ................................. $ 0 $ 0 $ 0 $ 0
NET REVENUE ..................................... 0 0 0 0
Operating Expenses
General and Administrative Expenses 1,000 0 1,679 0
Total Operating Expenses ........................ 1,000 0 1,679 0
Net Income Before Taxes ......................... $ (1,000) $ 0 $ (1,679) $ 0
Income/Franchise taxes .......................... 0 0 0 0
Net loss ........................................ (1,000) 0 (1,679) 0
Loss Per Share .................................. $ (0.01) $ 0.00 $ (0.01) $ 0.00
Weighted Average Shares Outstanding 50,000,000 .. 50,000,000 50,000,000 50,000,000 50,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INVESTORS CORPORATION
STATEMENTS OF CASH FLOWS
For the Three and Six Month Periods Ended May 31, 2000 and 1999
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
5/31/00 5/31/99 5/31/00 5/31/99
[Unaudited] [Unaudited] [Unaudited] [Unaudited]
<S> <C> <C> <C> <C>
Cash Flows Used For Operating Activities
Net Loss ...................................... $(1,000) $ 0 $(1,679) $ 0
Adjustments to reconcile net loss to net cash
used in operating activities:
Increase/(Decrease) in Accounts Payable 0 ... 0 0 0
Increase/(Decrease) in loans from shareholder 1,000 0 1,679 0
Net Cash Used For Operating Activities .... 0 0 0 0
Cash Flows Provided by Financing Activities 0 ... 0 0 0
Net Increase In Cash ...................... 0 0 0 0
Beginning Cash Balance .................... 0 0 0 0
Ending Cash Balance ....................... $ 0 $ 0 $ 0 $ 0
</TABLE>
