UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
FORM 8-K
---------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934 Date of
Report (Date of earliest event reported): August 19, 2004
---------------
SECURED DIVERSIFIED INVESTMENT, LTD.
-------------------------------------
(Exact name of registrant as specified in its charter)
Nevada
-------
(State or other jurisdiction of incorporation or organization)
0-30653 80-0068489
(Commission File Number) (IRS Employer Identification No.)
5030 Campus Drive
Newport Beach, California 92660
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 851-1069
--------------
Item 1.01. Entry into a Material Definitive Agreement.
(a) On August 19, 2004, the Company entered into an Investor Relations
Agreement with Round II Inc. and its principal, Andrew Austin, El
Cajon, California, pursuant to which the Company will issue 500,000
shares of restricted common stock to Round II in exchange for
providing various investor relations services. Round II will perform
certain mailings to the Company's investor base, initiate and
respond to telephone calls with such investor base, monitor internet
threads regarding the Company, regularly update the Company's
profile, supervise press releases and other public communications
and other related matters. Additionally, the Company will pay Round
II $1,500 per month to cover expenses of such activities. The
Company and Round II have not previously engaged in any material
relationship and Round II is not an affiliate of the Company.
(b) On August 19, 2004, the Company also entered into a Stock Purchase
Agreement with Seaside Investments, PLC, an Investment Company
located in London, England. The stock Purchase Agreement provides
that the Company will issue and sell up to 1,400,000 shares of
restricted common stock in exchange for a number of Seaside Ordinary
Shares. The number of Ordinary Shares to be received will be
determined by the fair market value of the Company common stock
divided by(pound)1. The fair market value of Company common stock
will be the average trading price during the ten trading days
preceding the Closing. The Closing is conditioned upon Seaside
completing the listing of its Ordinary Shares of the London Stock
Exchange and is expected to occur on or before September 30, 2004.
If such listing is not completed before September 30, 2004, then the
Company may terminate the Stock Purchase Agreement without further
obligation or liability. After the Closing, it is anticipated that
Seaside will own less than 10% of the outstanding shares of Company
common stock and, therefore, will not be deemed to be an affiliate
of the Company as such term is defined in the rules and regulations
of the Securities and Exchange Commission.
Commencing in the month during which the Seaside Ordinary Shares are
listed on the London Stock Exchange, the Company may sell up to 10%
of the Ordinary Shares. Any shares eligible for sale but not sold,
may be cumulated and sold in the following month.
Seaside may not sell the Company's common stock for a period of one
year. The Company has agreed to register the shares of common stock
for resell by Seaside within one year. If such registration is not
timely made, the Company will incur liquidated damages of 3% of the
total outstanding shares of Company common stock. Commencing one
year after the closing, in any calendar month Seaside may sell
shares of Company common stock equal to 15% of the prior month's
trading volume; however, Seaside may also sell blocks of 50,000
shares that will not be included in such 15%.
Seaside will withhold and place into escrow with its counsel, 30% of
the Seaside Ordinary Shares that the Company would otherwise receive
(the "Downside Protection Shares"). If the shares of Company common
stock sold to Seaside declines in value prior to the date that is
one year after the Closing, then Seaside will retain one percent of
the Downside Protection Shares for each one percent decline in the
price of Company common stock. If no decline occurs, the Downside
Protection Shares will be delivered to the Company.
The Company has engaged Hunter Wise Financial Group, Inc. as an
advisor in this transaction and has agreed to pay a fee equal to
five percent of the Ordinary Shares received (including the Downside
Protection Shares) and five percent of the shares of Company common
stock issued to Seaside.
The Company and Seaside have not previously engaged in any material
relationship and Seaside is not, as of the date of the Agreement, an
affiliate.
Item 3.02. Unregistered Sales of Equity Securities.
Pursuant to the two agreements described above under Item 1.01, the
Company has agreed to issue 500,000 shares of restricted common
stock to Round II, Inc. in exchange for investor relations services
and up to 1,400,000 shares of restricted common stock, with
registration rights, to Seaside Investments, PLC. Such shares have
been issued without registration pursuant to one or more exemptions
from registration under the Securities Act of 1933.
99.1 Press Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 25, 2004
SECURED DIVERSIFIED INVESTMENT, LTD.
By: /s/CLIFFORD L. STRAND
-------------------------------------------
Clifford L. Strand, Chief Executive Officer
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
99.1 Press Release