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SECURED
DIVERSIFIED INVESTMENT, LTD.
(Name
of
Registrant as Specified in its Charter)
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SECURED
DIVERSIFIED INVESTMENT, LTD.
5205
East Lincoln Drive
Paradise
Valley, Arizona 85253
Notice
of Written Consent of Shareholders in Lieu of
Special
Meeting of Shareholders
Dear
Stockholder:
On
October 24, 2006, our Board of Directors unanimously approved, subject to
stockholder approval, an amendment of our Articles of Incorporation to increase
our total authorized capital stock from 7,500,000 shares to 102,500,000 shares
in connection with an increase in our authorized common stock from 5,000,000
shares to 100,000,000 shares. The amendment will not effect a change to our
2,500,000 shares of authorized preferred stock. On October 27, 2006, holders
of
a majority of the outstanding shares of voting captial stock executed a written
stockholder consent approving the amendment.
Pursuant
to the provisions of the General Corporation Law of Nevada and our Articles
of
Incorporation, the holders of at least a majority of the outstanding shares
of
common stock are permitted to approve the amendment by written consent in lieu
of a meeting, provided that prompt notice of such action is given to the other
shareholders of our company. This written consent assures that the amendment
will occur without your vote. Pursuant to the rules and regulations promulgated
by the Securities and Exchange Commission (the “SEC”) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), an information statement
must be sent to our holders of common stock who do not sign the written consent
at least twenty (20) days prior to the effective date of the action. This
notice, which is being sent to all holders of common stock of record on November
9, 2006, is intended to serve as such notice under Nevada law and as the
information statement required by the Exchange Act.
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY
BY
ORDER
OF THE BOARD OF DIRECTORS
/s/
Jan Wallace
President,
Chief Executive Officer, and Director
2
SECURED
DIVERSIFIED INVESTMENT, LTD.
5205
East Lincoln Drive
Paradise
Valley, Arizona 85253
INFORMATION
STATEMENT
This
information statement is being furnished to our holders of common stock in
connection with our prior receipt of approval by written consent of the holders
of a majority of our common stock of a proposal to increase the number of shares
of capital stock that we have authority to issue from 7,500,000 to 102,500,000
in connection with an increase in our authorized common stock from 5,000,000
shares to 100,000,000 shares. Accordingly, all necessary corporate approvals
in
connection with the matter referred to herein have been obtained and this
information statement is furnished solely for the purpose of informing our
holders of common stock, in the manner required under the Exchange Act, of
the
corporate action before it takes effect.
The
mailing of this information statement is first being mailed to holders of common
stock on or about November 9, 2006. Under applicable federal securities laws,
the amendment of our Articles of Incorporation cannot be effected until at
least
20 days after this information statement is sent or given to our holders of
common stock. We will pay the expenses of furnishing this information statement,
including the cost of preparing, assembling and mailing this information
statement. We may use our transfer agent to assist us in this endeavor.
Action
By Written Consent, Record Date, Outstanding Shares and Required
Vote
Pursuant
to the provisions of the General Corporation Law of Nevada and our Articles
of
Incorporation, the holders of at least a majority of the outstanding common
stock are permitted to approve the amendment by written consent in lieu of
a
meeting, provided that prompt notice of such action is given to the other
shareholders of our company.
Our
Board
of Directors fixed the close of business on October 27, 2006 as the record
date
for the determination of holders of common stock entitled to receive notice
of
the amendment of our Articles of Incorporation by written stockholder consent.
As of the record date, we had 2,896,846 shares of common stock outstanding.
Each
outstanding share of common stock is entitled to one vote per share. The
affirmative vote of a majority of the outstanding shares of common stock was
required to approve the amendment of our Articles of Incorporation increasing
our total authorized capital stock and the number of authorized shares of our
common stock.
Amendment
of Articles of Incorporation to Increase Authorized Common
Stock
We
are
currently authorized to issue 5,000,000 shares of common stock, par value $0.001
per share, and 2,500,000 shares of preferred stock, par value $0.01 per share.
Subject to the approval of the stockholders, on October 24, 2006, our Board
of
Directors approved an amendment to our Articles of Incorporation to increase
our
total authorized capital stock from 7,500,000 shares to 102,500,000 shares
in
connection with an increase in the number of authorized shares of common stock
from 5,000,000 shares to 100,000,000 shares. No changes will be made to the
number of authorized shares of our preferred stock. As of October 27, 2006,
the
proposal was
3
approved
by written consent of the holders of a majority of our common stock. The
proposal will be effectuated by amending the first sentence of Article III
“Capital Stock” Section A. “Common Stock” of our Articles of Incorporation to
read as follows:
“The
total number of shares of Common Stock the Corporation is authorized to issue
is
ONE HUNDRED MILLION (100,000,000) shares $.001 par value per
share.”
The
increase in our authorized capital stock and the number of authorized shares
of
our common stock will be effective upon filing the amendment to our Articles
of
Incorporation, attached hereto as Exhibit “A,” with the Secretary of State of
the State of Nevada, which we anticipate to be on or about November 30, 2006,
which is approximately 20 days after this information statement has been
distributed to our stockholders.
Vote
Obtained
On
October 24, 2006, our Board of Directors adopted resolutions authorizing and
approving the amendment to increase our authorized common stock. The Board
of
Directors directed management to submit the amendment to our stockholders for
approval and reserved the right to abandon the amendment at any time prior
to
the effective date (as defined below).
By
written consent in lieu of a meeting, the holders of a majority of the
outstanding shares of common stock approved the amendment to our Articles of
Incorporation. The holders of a majority of the outstanding shares of common
stock include those listed in the below table:
|
Holders
of Common Stock
|
Number
of Shares Held
|
|
Jan
Wallace
|
600,000
|
|
Munjit
Johal
|
200,000
|
|
Kelly
Black
|
200,000
|
|
Donald
Schwall
|
400,000
|
|
Helen
West
|
125,000
|
The
members listed in the above table have approved the amendment by written consent
dated as of October 27, 2006. Accordingly, your consent is not required and
is
not being solicited in connection with the amendment.
Purpose
of Increasing the Authorized Shares of Our Common Stock
Our
Board
of Directors has determined that it is in our best interest to increase the
number of authorized shares of common stock. The Board of Directors believes
that the amendment will provide us with greater flexibility by increasing our
authorized capital to allow us to issue additional shares of common stock as
the
Board of Directors deems necessary or advisable.
Prior
to
the amendment, we had 5,000,000 authorized shares of common stock, 2,896,820
of
which are issued and outstanding, with 2,103,180 available for issuance. We
currently have
4
outstanding
shares of preferred stock, stock options, and warrants in the aggregate that
are
convertible into or exercisable for an amount of common stock that may exceed
that currently available for issuance. As a result, we may not have sufficient
shares of common stock available for issuance upon exercise or conversion of
our
preferred stock, stock options, and warrants. Consequently, the amendment to
increase our authorized shares of common stock is necessary in order to validly
issue shares of common stock upon the conversion or exercise of these
securities.
In
addition, the amendment to increase our authorized common stock will provide
us
with additional authorized but unissued shares for general corporate purposes,
including raising additional capital through equity and/or convertible debt
financings, issuances pursuant to stock incentive plans for employees, directors
and consultants and possible future acquisitions. The Board of Directors
believes that an increase in the total number of shares of authorized common
stock will give us greater flexibility in responding quickly to advantageous
financing and business opportunities that involve the direct or indirect
issuance of additional shares of common stock and attracting and retaining
key
personnel through the issuance of stock incentive awards.
Effect
of the Increase in Our Authorized Common Stock
The
amendment to increase our authorized common stock will not have any immediate
effect on the rights of existing stockholders. However, our Board of Directors
will have the authority to issue authorized common stock or other securities
convertible into or exercisable or exchangeable for common stock without
requiring future stockholder approval of such issuances, except as may be
required by our Articles of Incorporation or applicable law. To the extent
that
additional authorized shares are issued in the future, they may decrease the
existing stockholders’ percentage equity ownership and, depending on the price
at which they are issued, could be dilutive to the existing
stockholders.
The
increase in the authorized number of shares of common stock and the subsequent
issuance of such shares could have the effect of delaying or preventing a change
in control of our company without further action by our stockholders. Shares
of
authorized and unissued common stock could, within the limits imposed by
applicable law, be issued in one or more transactions which would make a change
in control of our company more difficult, and therefore less likely. Any such
issuance of additional stock could have the effect of diluting the earnings
per
share and book value per share of outstanding shares of common stock and such
additional shares could be used to dilute the stock ownership or voting rights
of a person seeking to obtain control of our company.
The
Board
of Directors is not currently aware of any attempt to take over or acquire
our
company. While it may be deemed to have potential anti-takeover effects, the
amendment is not prompted by any specific effort or takeover threat currently
perceived by management.
Description
of Common Stock
The
holders of outstanding shares of our common stock are entitled to receive
dividends out of assets legally available at times and in amounts as the board
of directors may from time to time determine, subordinate to any preferences
that may be granted to the holders of preferred stock. Holders of common stock
are entitled to one vote per share on all matters on which the holders of common
stock are entitled to vote.
5
Our
common stock is not entitled to preemptive rights and may not be redeemed or
converted. Upon our liquidation, dissolution or winding up, after payment of
all
of our debts and liabilities and fulfillment of the rights of any outstanding
class or series of preferred stock that has priority to distributed assets,
the
assets legally available for distribution to our shareholders are divided among
the holders of the common stock, in proportion to the number of shares of common
stock held by them. The rights of holders of common stock are subordinate to
those of holders of any series of preferred stock.
Dissenters’
Right of Appraisal
Under
the
General Corporation Law of Nevada, our stockholders are not entitled to
appraisal rights with respect to the amendment to increase the amount of our
authorized common stock, and we will not independently provide stockholders
with
any such right.
Interest
of Certain Persons in Matter to Be Acted Upon
None
of
our officers or directors, nor any of their associates, has a substantial
interest, direct or indirect, by security holdings or otherwise, in the
amendment to increase the amount of our common stock.
Estimated
Effective Time
We
anticipate that the amendment will be filed with the Nevada Secretary of State
and the increase in our common stock will become effective on or about November
30, 2006. However, in no event will the amendment to increase the amount of
our
common stock be consummated earlier than that twentieth day after this
information statement is sent or given to those persons or entities that held
our common stock as of the record date.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THE CAPITAL STOCK INCREASE, PASSED UPON THE MERITS
OR
FAIRNESS OF THE CAPITAL STOCK INCREASE, OR PASSED UPON THE ADEQUACY OR ACCURACY
OF THE DISCLOSURE IN THIS INFORMATION STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
6
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth the beneficial ownership of our outstanding common
stock by each executive officer and director, by each person known by us to
beneficially own more than 5% of the outstanding shares of our common stock
and
by the executive officers and directors as a group. As used in this table,
"beneficial ownership" means the sole or shared power to vote, or to direct
the
voting of, a security, or the sole or shared investment power with respect
to a
security (i.e., the power to dispose of, or to direct the disposition of, a
security). In addition, for purposes of this table, a person is deemed, as
of
any date, to have "beneficial ownership" of any security that such person has
the right to acquire within 60 days after such date.
|
Title
of class
|
Name
and address
of
beneficial owner
|
Amount
of
beneficial
ownership
|
Percent
of
class(1)
|
|
Executive
Officers & Directors:
|
|||
|
Common
|
Jan
Wallace(2)
5205
East Lincoln Drive
Paradise
Valley, Arizona 85253
|
1,000,000
shares
|
30.3%
|
|
Common
|
Peter
Richman
5205
East Lincoln Drive
Paradise
Valley, Arizona 85253
|
0
shares
|
0%
|
|
Common
|
Jay
Kister(3)
1569
Souvenir Drive
El
Cajon, California 92021
|
5,998
shares
|
Less
than 1%
|
|
Common
|
Munjit
Johal
5030
Campus Drive
Newport
Beach, California 92663
|
200,000
shares
|
6.9%
|
|
Total
of All Directors and Executive Officers:
Common
|
1,205,998
shares
|
36.5%
|
|
|
More
Than 5% Beneficial Owners:
|
|||
|
Common
|
Kelly
Black
7349
N. Scottsdale Road #515 Scottsdale, Arizona 85283
|
200,000
shares
|
6.9%
|
|
Common
|
Donald
Schwall
8326
Geary Boulevard
San
Francisco, California 94121
|
400,000
shares
|
13.8%
|
| (1) |
The
percentage shown is based on denominator of 2,896,846 shares of common
stock issued and outstanding for the company as of October 27, 2006,
plus
the particular beneficial owner’s right to acquire common stock
exercisable within 60 days.
|
| (2) |
Includes
600,000 shares of Common Stock held in her name and warrants to purchase
400,000 shares of Common Stock held in Wallace Black Financial &
Investment Services.
|
| (3) |
Includes
5,000 shares of Common Stock held in his name and 998 shares held
in joint
tenancy with his wife Alicia Kister.
|
Other
than the shareholders listed above, we know of no other person who is the
beneficial owner of more than five percent of our common stock.
7
Financial
and Other Information
The
following documents, filed by us with the Commission, are incorporated herein
by
reference:
|
(i)
|
Our
Annual Report filed on Form 10-KSB, filed with the Commission on
April 15,
2006 for the fiscal year ended December 31,
2005;
|
|
(ii)
|
Our
Quarterly Reports filed on Form 10-QSB with the Commission on May
15, 2006
for the three month period ended March 31, 2006 and on August 21,
2006 for
the six month period ended June 30, 2006.
|
Any
statement contained in a document incorporated or deemed to be incorporated
in
this information statement shall be deemed to be modified or superseded for
purposes of this information statement to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed
to
be incorporated by reference modifies or supersedes such statement.
A
copy of
the documents incorporated herein by reference (excluding exhibits unless such
exhibits are specifically incorporated by reference into the information
incorporated herein) that are not presented with this document or delivered
herewith, will be provided without charge to each person, including any
beneficial owner, to whom an Information Statement is delivered, upon oral
or
written request of any such person and by first-class mail or other equally
prompt means. Requests should be directed to the Company at 5205 East Lincoln
Drive Paradise Valley, Arizona 85253.
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY
BY
ORDER
OF THE BOARD OF DIRECTORS,
/s/
Jan Wallace
President,
Chief Executive Officer, and Director
8
EXHIBIT
"A"
