UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-KSB





[X]
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended  December 31, 2007[  ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACTFor
      the transition period from _________ to ________Commission
      file number:000-30653





Secured Diversified
      Investment Ltd.(Name
      of small business issuer in its
charter)




Nevada
            80-0068489(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)3416 Via Lido Suite F, Newport
      Beach, CA
            92663(Address
      of principal executive offices)
            (Zip
      Code)Issuer’s
      telephone number:  949
      851-1069Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
            Name
      of each exchange on which registerednone
            not
      applicableSecurities
      registered under Section 12(g) of the Exchange Act:Title
      of each class
            Name
      of each exchange on which registeredCommon Stock, par
      value $0.001
            not
      applicable




Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.  Yes
[x]       No
[   ]





Check if
disclosure of delinquent filers in response to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [   ]





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes [ ]   No
[X]





State
issuer’s revenue for its most recent fiscal year.  $0





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity, as of a specified date within the past 60 days: Not
available.





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date: 162,862 as of December 31,
2007.





Transitional
Small Business Disclosure Format (Check One):  Yes: __; NoX


Table of Contents





TABLEOF
CONTENTS





PagePART
      IItem 1.
            Description of Business
            3Item 2.
            Description of Property
            5Item 3.
            Legal Proceedings
            6Item 4.
            Submission of Matters to a Vote of Security
      Holders
            7PART
      IIItem 5.
            Market for Common Equity and Related Stockholder Matters and
      Small Business Issuer Purchases of Equity Securities
            8Item 6.
            Management’s Discussion and Analysis or Plan of
      Operation
            10Item 7.
            Financial Statements
            13Item 8.
            Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure
            14Item 8A.
            Controls and Procedures
            14PART
      IIIItem 9.
            Directors, Executive Officers, Promoters and Control Persons;
      Compliance With Section 16(a) of the Exchange Act
            15Item 10.
            Executive Compensation
            18Item 11.
            Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
            20Item 12.
            Certain Relationships and Related Transactions, and Director
      Independence
            21Item 13.
            Exhibits
            21Item 14.
            Principal Accountant Fees and Services
            21


2
 Table of Contents


PART I


Item1.   Description of Business





Overview





Since our
inception, we have been unsuccessful in pursing revenues with our investment
properties the majority of which were acquired in an asset purchase from Secured
Diversified Investment Company, a related party. Several of our acquired
properties, including the T-Rex Plaza, the Hospitality Inn, and the Katella
Center, among others, became impaired and /or were assets that underperformed.
These properties were incapable of generating sufficient revenues. A major
contributing factor to the lack revenues from these properties was high-cost
ground lease obligations underlying these properties. The assets that were
cash-producing such as the Decatur Center, Spencer Springs and the Cannery, had
to be sold to continue our operations, including the high costs associated with
being a public company, in addition to absorbing the costs associated with our
impaired and underperforming assets. At the date of this report, these
underperforming properties have been disposed.  We have exhausted all
available venues to raise capital and therefore will not be able to continue as
a going concern.  The Company has effectively ceased
operations.





Katella
Center, Orange, California





On
September 4, 2007, Val-Chris Investments, Ltd., trustee for the first trust deed
filed a Notice of Default.  We agreed to grant deed the property to
the first trust deed, the Cornish Construction Pension Plan
("Cornish")





On
October 23, 2007, we entered into a Grant Deed in Lieu of Foreclosure with
Cornish and granted Cornish our interest in the “Katella Center,” a strip mall
consisting of six retail rental units of various sizes totaling approximately
9,500 square feet, located at 632-650 E. Katella Avenue in Orange, California.
We were in default of the first trust deed with Cornish, and granted ownership
in the Katella Center to avoid foreclosure proceedings.





Campus
Drive Office Building, Newport Beach, California





During
the reporting period, we agreed to sell our (53.8%) interest in Diversified
Commercial Brokers, LLC ("DCB") to the Sutterfield Family Trust and Wayne
Sutterfield (together "Sutterfield").  Sutterfield had a 46.2%
interest in DCB.  The Company was in default of debt owed to
Sutterfield and the Operating Agreement for DCB.





On
October 25, 2007, we signed an agreement conveying our 53.8% membership interest
in Diversified Commercial Brokers, LLC (“DCB”) to Sutterfield. The primary asset
of DCB is an 8,685 square foot office building located at 5030 Campus Drive in
Newport Beach, California 92660 (the “Campus Property”). In exchange for the
sale of our membership interest in DCB, we received: (a) an indemnity on certain
obligations pertaining to the Campus Property, including a ground lease, first
and second trust deeds, and property taxes; and (b) a release from Sutterfield
on any debt we owe, including two promissory notes in the principal amount of
$138,630.32 and all accrued interest thereon.




3
 Table of Contents





Lincoln
Drive Property





We own a
25% tenant -in-common interest in three buildings located at 5203 - 5205 East
Lincoln Drive in Paradise Valley, Maricopa County, Arizona 85253. We acquired
our 25% interest from Fazoql, Inc. as a joint venture investment with Fazoql and
Willowpoint, LLC, an Arizona limited liability company. Fazoql had previously
obtained a 50% interest from Willowpoint, which retained a 50% ownership
interest in the property. We then obtained our 25% interest directly from
Fazoql. Patrick McNevin, a former member of our board of directors, is President
of Fazoql. Currently, the property is subject to a first trust deed held by
Marshall & Ilsey Bank with a principal balance of approximately $852,146
bearing an annual interest rate of 6.5% per annum. The loan matures May 1, 2010.
The property is in very good condition. There is no ground lease on the
property. The property is 100% leased and situated between two new
residential/hospitality developments.





We do not
receive any rental income from the leased units. We believe the property’s
adjacent developments and scheduled city improvements to the walkways in the
front area are positive indicators that we will experience appreciable gain in
any future sale of the property. Fazoqland Willowpoint are jointly responsible
for all costs of operating the buildings including landscaping, exterior
maintenance, property management, and the payment of taxes, insurance and loan
payments. We are not responsible for these items.





The
current real estate tax rate for the Lincoln Drive property is unknown at this
time. Property taxes due for the Lincoln Drive property for the 2007 tax year
are $6,158. We are not responsible for the payment of taxes.





In light
of the ongoing economic downward trend, the real estate market has been one of
the sectors greatly affected.  This sector has experienced a
consistent decline downward for the past year.  According we have
impaired our investment by $100,000 to $200,000.  If this sector does
not improve we may have to impair it further.





Cactus
Road Property





On
February 15, 2006, we acquired a 33 1/3% tenant-in-common interest in property
located at 12202 North Scottsdale Road, Phoenix, Arizona 85054. We acquired our
interest for $200,000 from Ms. Jan Wallace, our officer and director, who holds
the remaining 66 2/3% ownership in the property. Currently, the property is
subject to a first trust deed held by Chase Manhattan Mortgage with a principal
balance of $529,950. There are no ground leases on the property.





The
property consists of 2,180 square feet situated on approximately 38,587 square
feet of land strategically located on a heavily trafficked corner. The property
was remodelled and retrofitted to house our headquarters. We also leased a
portion of the building to a mortgage company until it ceased operations in
December 2006. Because of the property’s heavily trafficked location, we
believed that it would appreciate and provide us a profit upon its sale at some
future date.








4
 Table of Contents


The
property was repaired and renovated at a cost of $46,950, which include a
complete repair and replacement of the roof, electrical retrofitting, plumbing
repairs, HVAC repairs renovation and remodelling of the kitchen area to
accommodate new tenants. Ms. Wallace will be responsible for these costs. The
property is adequately covered by insurance.





The
property taxes for 2007 were $2,523.





Item2.   Description of Property




We currently occupy space at 3416 Via Lido Suite F,
Newport Beach, CA 92663.  The company does not pay rent for this
location.





Lincoln
Drive Property





See above
Item 1. Overview





Cactus
Road Property





See above
Item 1. Overview





Property
Information





The
following table sets forth the average annual occupancy rate and rent per square
foot for our properties held as of March 31, 2008:





Property
            Occupancy
      Rate
            Average
      Rent/Sq. Ft.Lincoln
      Drive property
            100%
            $3.69Cactus
      Road property
            Vacant
            N/A





The
following chart sets forth certain information concerning lease expirations
(assuming no renewals) for our properties held as of March 31,
2008:





Property
            Year
            Number
      of
              Leases
      Expiring
            Total
      Square
              Footage
      of
              Expiring
      Leases
            Total
      Annual
              RentalCovered
      by
              Expiring
      Leases
            %
      of Gross
              Annual
      RentalLincoln
      Drive property
            2007
              2008
              2009
              2010
              2011
            1
              -
              2
              -
              -
            1,024
              -
              3,391
              -
              -
            $36,000
              -
              $159,600
              -
              -
            18.4%
              -
              81.6%
              -
              -Cactus
      Road property
            N/A
            N/A
            N/A
            N/A
            N/A





The
following table sets forth those tenants at our properties, as of March 31, 2008
that occupied more than 10% of the rentable square footage at the respective
properties, the square feet occupied, the average rent per square feet for such
tenant.




5
 Table of Contents





Property
            Tenants
            Business
            Sq.
      Ft. Rental
              (%
      of Total)
            Rent/Sq.
      Ft.Lincoln
      Drive property
            Joel
      D. Designs
              Fazoql
              Hague
      Showcase
            Florists
      & Gift Shop
              Furniture
      Sales
              Furniture
      & Gift Shop
            1,024
      / 23.2%
              1,472
      / 33.3%
              1,919
      / 43.5%
            $2.93
              $4.96
              $3.13Cactus
      Road property
            N/A
            N/A
            N/A
            N/A





Item3.   Legal Proceedings





Other
than as described below, we are not aware of any pending or threatened legal
proceeding to which any of our officers, directors, or any beneficial holders of
5% or more of our voting securities are adverse to us or have a material
interest adverse to us.





On
January 13, 2006, Alliance Title Company, Inc. (“Alliance”) filed a complaint in
the matter of Alliance Title Company, Inc. v. Secured Diversified Investment,
Ltd. (case no. 06CC02129) in the Superior Court of California, County of
Orange.  The complaint alleges that Alliance, our escrow agent, was
entrusted with $267,000 pursuant to escrow instructions, and that a mutual
written agreement among the parties to the escrow was required to properly
disperse the funds.  Alliance further alleges that no instructions
were provided to disperse the funds, but instead, competing claims for the funds
were made by Secured Diversified Investment, Ltd., Clifford L. Strand, William
S. Biddle, Gernot Trolf, Nationwide Commercial Brokers, Inc., and Prime Time
Auctions, Inc. Alliance has deposited the funds with the court and has asked for
a declaration of rights regarding the funds.  Alliance has requested
that its reasonable costs and attorney’s fees be paid from the deposited
funds.




This
matter was dismissed by Alliance Title Company in open court in February
2007.




The
Company received $33,803 as its share out of the funds and recognized as gain on
equity investment as of December 31, 2006.




On
January 20, 2006, Clifford L. Strand, William S. Biddle, Gernot Trolf, our
former management, and Nationwide Commercial Brokers, Inc., our former
subsidiary (collectively, “Plaintiffs”), filed a complaint in the matter of
Clifford L. Strand v. Secured Diversified Investment, Ltd. (case no. 06CC02350)
in the Superior Court of California, County of Orange.  The complaint
contains causes of action for fraud and misrepresentation, negligent
misrepresentation, breach of contract, breach of the covenant of good faith and
fair dealing, conversion, common counts, money had and received, and declaratory
relief.  These allegations arise out of the hold over of funds at
issue in Alliance Title Company, Inc. v. Secured Diversified Investment, Ltd.
(case no. 06CC02129), described above.  To date, however, the matters
have not been consolidated.  The Company has set aside $177,000 in
contingent liabilities as potential payout and settlement to these officers. As
of December 31, 2006 the Company paid $45,000 to William S. Biddle and $42,000
to Gernot Trolf.





This matter has been settled as of
April 5, 2007.On January 5, 2007, the Company entered into a
Confidential Settlement and General Release Agreement (the “Settlement
Agreement”) with Mr. Clifford L. Strand to resolve litigation in the matters of
Clifford L. Strand v. Secured Diversified Investment, Ltd. (case no. 06CC02350)
in the Superior Court of California, County of Orange, as well as other claims
involving Mr. Strand and our company as set forth in the Agreement. The
Settlement Agreement with Mr. Strand provides that a stipulation and order of
disbursement will




6
 Table of Contents




be filed
on the remaining $89,998 as follows: $80,000 to Mr. Strand and $9,998 to our
company. In addition, Mr. Strand expressly waived any and all rights he may have
had in connection with reemployment with our company, and agreed to refrain from
pursuing complaints against our company and our officers and directors in any
court or government agency. Further, Mr. Strand granted an irrevocable proxy in
connection with any shares of stock beneficially owned by him.





On March
10, 2006, some of our shareholders, including Clifford L. Strand, Robert J.
Leonard, William S. Biddle, and Gernot Trolf (collectively, “Plaintiffs”) filed
a complaint in the matter of William S. Biddle v. Secured Diversified
Investment, Ltd. (case no. 06CC03959) in the Superior Court of California,
County of Orange.  Plaintiff seek declaratory relief as to whether we
are a foreign corporation under California Corporation Code Section 2115(a) and
whether Plaintiff’s alleged demand for our shareholder list and for an
inspection of the accounting books and records and minutes of shareholders ,
board of directors and committees of such board is governed under California
Corporation Code Sections 1600 and 1601.  The Company is contesting
this case vigorously and is proceeding with discovery.  At this time,
the Company cannot make any evaluation of the outcome of this
litigation.




Item4.   Submission of Matters to a Vote of Security
Holders





On July
3, 2007 at our annual meeting of the shareholders, our shareholders approved a
grant of authority to our Board of Directors to reverse split our outstanding
preferred and common stock at a ratio of up to 10 to 1, as determined at a later
date in the discretion of the Board of Directors. Since that time, all of our
outstanding preferred stock was converted into shares of our common stock, such
that our only remaining outstanding capital stock now consists of common
shares.  On September 25, 2007, our Board of Directors unanimously
approved, subject to stockholder approval, an increase in the original grant of
authority to our Board of Directors to reverse split our outstanding capital
stock for a total ratio of up to 20 to 1, as determined at a later date in the
discretion of the Board of Directors. On October 5, 2007, holders of a majority
of the outstanding shares of voting capital stock executed a written stockholder
consent approving the action of the Board of Directors.





The total
number of shares of common stock outstanding at the record date, October 5,
2007, was 3,257,238 shares. Shareholders holding a total of 1,663,415 shares of
common stock (approximately 51% of the issued and outstanding shares of common
stock) approved the reverse split.


7
 Table of Contents


PART II





Item5.    Market for Common Equity and Related
Stockholder Matters and Small Business Issuer Purchases of Equity
Securities





Market
Information




Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by the FINRA. The OTCBB is a network of security dealers who buy and
sell stock. The dealers are connected by a computer network that provides
information on current "bids" and "asks", as well as volume information. Our
shares are quoted on the OTCBB under the symbol “SDFD.OB.” The following are the
high and low sale prices for the common stock by quarter as reported by the OTC
Bulletin Board fort he periods indicated.





Fiscal
      Year Ending December 31, 2006Quarter
      Ended
            
            High
      $
            
            Low
      $March
      31
            
            0.1495
            
            0.02June
      30
            
            0.03
            
            0.03September
      30
            
            0.03
            
            0December
      31
            
            0.15
            
            0





August
      31, 2007 - February 29, 2008Quarter
      Ended
            
            High
      $
            
            Low
      $February
      29, 2008
            
            .51
            
            .029November
      30, 2007
            
            .84
            
            .5August
      31, 2007
            
            0
            
            0May
      31, 2007
            
            0
            
            0





The
quotations and ranges listed above were obtained from OTCBB.  The
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.





Holders
of Our Common Stock





As of
December 31, 2007, we had 162,862 shares of our common stock issued and
outstanding, held by 453 shareholders of record.





Dividends





The
Company has not declared, or paid, any cash dividends since inception and does
not anticipate declaring or paying a cash dividend for the foreseeable
future.





Nevada
law prohibits our board from declaring or paying a dividend where, after giving
effect to such a dividend, (i) we would not be able to pay our debts as they
came due in the ordinary course of our business, or (ii) our total assets would
be less than the sum of our total liabilities




8
 Table of Contents




plus the
amount that would be needed, if the corporation were to be dissolved at the time
of distribution, to satisfy the rights of any creditors or preferred
stockholders.





Securities
Authorized for Issuance Under Equity Compensation Plans





Equity
      Compensation Plan Information
              As
      of December 31, 2007Plan
      category
            Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
              
              (a)
            Weighted-average
      exercise price of outstanding options, warrants and rights
              
              (b)
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              
              (c)1Equity
      compensation plans approved by security holdersEquity
      compensation plans not approved by security holdersTotal





1On March 8, 2006, our
Board of Directors adopted the 2006 Stock Option Plan of Secured Diversified
Investment, Ltd (the “2006 Plan”). The 2006 plan authorizes the grant of stock
options during any 12 month period that does not exceed the greater of: (1) $1
million, (2) 15% of our total assets, or (3) 15% of our issued and outstanding
common stock of the company. No options have been issued under the 2006
Plan.


9
 Table of Contents


Item6.  Management’s Discussion and Analysis or Plan of
Operation





Forward-Looking
Statements





Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934.   These forward-looking statements generally are identified
by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions.  We intend
such forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of complying with
those safe-harbor provisions.  Forward-looking statements are based on
current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a material
adverse affect on our operations and future prospects on a consolidated basis
include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and
uncertainties should also be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements. We undertake no
obligation to update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.  Further
information concerning our business, including additional factors that could
materially affect our financial results, is included herein and in our other
filings with the SEC.





Plan of Operation in the Next Twelve
Months





Since our
inception, we have been unsuccessful in pursing revenues with our investment
properties. At the date of this report, our underperforming properties have been
disposed of and our company remains in financial jeopardy and may not continue
as a going concern. Management has determined that it is not feasible to
continue our current line of business. We have exhausted our capital on
operating expenses. Our efforts to obtain additional capital in order to further
pursue our business plan have been unsuccessful. Our management is now actively
looking for other business opportunities for us to pursue.





As
reflected in this annual report on Form 10-KSB, we experienced a total net loss
of $309,066 for the year ended December 31, 2007. Our history of net losses is
due to significant general and administrative expenses, professional fees, and
other expenses related to the pursuit of our business plan and maintenance of
our business operations, coupled with limited revenue. This history of
unprofitable operations has made it difficult to raise capital, to hire and
retain employees and consultants, to contract for third party services, and to
otherwise execute on our business plan.





10
 Table of Contents





For these
reasons, it has become clear to management that our current business plan is no
longer viable. Therefore, we are currently working to identify and evaluate
other business opportunities and make arrangements to acquire one that is
consistent with our expertise and income needs.





We can
provide no assurance that we will be successful in acquiring any business
opportunity due to our limited working capital. We anticipate that even if we
were to successfully negotiate an agreement to acquire a new business
opportunity, we may require additional financing in order to enable us to
complete the transaction. However, we can provide no assurance that we will be
able to obtain any financing on acceptable terms, or at all. We do not have any
formal commitments or arrangements for the sales of stock or the advancement or
loan of funds.





Results
of Operations





Income.We recorded no income for
either December 31, 2007 or 2006 from our continuing operations. In our
financial statements we reclassified our 2006 income for comparative purposes.
We recorded $397,298 in discontinued operations as compared with $309,239 for
the same period ended 2006. Income from discontinued operations consists
primarily of rental income from commercial properties pursuant to tenant leases.
Our operations were discontinued because we were in default on both the Katella
and Campus properties.  We disposed of the properties in exchange for
satisfaction of the debt owed.





Operating
Expenses.Operating and
administrative expenses consist primarily of payroll expenses, legal and
accounting fees and costs associated with the acquisition and ownership of real
properties. These expenses decreased by $507,740 to $411,859 for the fiscal year
ended December 31, 2007, compared to $919,599 for the fiscal year ended December
31, 2006. The decrease is attributable to the reduction of overhead including
payroll, payroll taxes, office rent, professional fees, and the sale of poorly
performing properties resulting in the reduction of leasing commissions, land
lease payments, property taxes and related carrying costs.





Other
Expenses.Because
of the slowdown of the real estate market and decline in value of properties we
impaired our investment in the Lincoln Drive property from $300,000 to $200,000
and recorded an impairment loss of $100,000.  Additionally, the
Company has impaired its Phoenix Cactus Street property 100% recording an
impaired loss of $200,000.  In light of the current real estate market
and projected trends, the Company does not see recovery of these investments in
the foreseeable future.  As such, we recorded an impairment of
$300,000 for the year ended December 31, 2007 compared with $248,137 for the
year ended December 31, 2006.





Interest
expense consists of mortgage interest paid on our properties. Interest expense
was $6,144 for the fiscal year ended December 31, 2007 compared to $1,888 for
the fiscal year ended December 31, 2006. The increase in interest expense is
attributable to nonpayment of payables.




11
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Net
Loss.We
reported a net loss of $309,066 or $2.01 per share for the fiscal year ended
December 31, 2007 compared to a net loss of $719,331 or $7.85 per share for the
fiscal year ended December 31, 2006. Net loss from continuing operations was
$706,364 for the fiscal year ended December 31, 2007 compared to a net loss of
$1,028,570 for the fiscal year ended December 31, 2006. Discontinued operations
accounted for net income of $397,298 for the fiscal year ended December 31,
2007. The net income from disposal of discontinued operations was $309,239 for
the fiscal year ended December 31, 2006.





Liquidity
and Capital Resources





As stated
in financial statement Note 1 - Going Concern, we do not have an established
source of revenues sufficient to continue to cover our operating costs over an
extended period of time allowing us to continue as a going concern. Moreover, we
do not currently possess a financial institution source of financing or an
adequate principal source of financing and it does not appear likely that we
will be able to obtain such a source.





At
December 31, 2007, we had $1,684 of cash and cash equivalents as compared to
$7,667 of cash and cash equivalents at December 31, 2006 to meet our immediate
short-term liquidity requirements. As noted earlier in this report, we have been
unsuccessful in pursing revenues with our investment properties the majority of
these properties were acquired in an asset purchase from Seashore Investment
Company, Inc. a related party. Several of our acquired properties, including the
T-Rex Plaza, the Hospitality Inn, and the Katella Center, among others, became
impaired and or were assets that underperformed. These properties were incapable
of generating sufficent revenues. A major contributing factor to the lack
revenues from these properties was high-cost ground lease obligations underlying
these properties. The assets that were cash-producing such as the Decatur
Center, Spencer Springs and the Cannery, had to be sold to continue our
operations, including the high costs associated with being a public company, in
addition to absorbing the costs associated with our impaired and underperforming
assets. The difference in our cash position from December 31, 2007 to December
31, 2006 has been the inability of the remaining assets to generate necessary
revenues.  The cash position would have been substantially worst had
management not agreed to defer compensation. As a result of the problems with
our properties, our ability to raise capital was met with failure in several
instances prior to and during the reporting period. At the date of this annual
report, the Company has essentially ceased operations and is not a going
concern. We are not likely to raise capital and therefore are forced to consider
other business opportunities.





To date,
we have paid no dividends and do not anticipate paying dividends into the
foreseeable future.





Cash Flows from
Operating Activities.Net cash used by
operating activities was $16,133 for the fiscal year ended December 31, 2007
comparable to net cash used by operating activities of $940,015 for the fiscal
year ended December 31, 2006.





Cash Flows from
Investing Activities.Net cash from investing activities amounted to $4,932 for the fiscal year
ended December 31, 2007 compared to net cash used investing activities in the
amount of $242,868 for the fiscal year ended December 31, 2006.


Cash Flows from
Financing Activities.Cash used in financing
activities amounted to $-0- for the fiscal year ended December 31, 2007 compared
to $39,854 for the fiscal year ended December 31, 2006.





Off
Balance Sheet Arrangements





As of
December 31, 2007, there were no off balance sheet arrangements.




12
 Table of Contents





Item7.   Financial Statements





Index to
Financial Statements:





Audited
      Financial Statements:F-1
            Report of Independent Registered Public Accounting
      FirmF-2
            Consolidated Balance Sheets – Years Ended December 31, 2007 and
      2006F-3
            Statements of Operations – Years Ended December 31, 2007 and
      2006F-4
            Statement of Stockholders’ Equity (Deficit) for the Years Ended
      December 31, 2007 and December 31, 2006F-5
            Statements of Cash Flows - Years Ended December 31,
      2007  and 2006F-6
            Notes to Financial
Statements




13
 Table of Contents
 MOORE& ASSOCIATES, CHARTERED
 ACCOUNTANTS AND
ADVISORS
 PCAOB REGISTERED
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 Secured
Diversified Investment, LTD
 
 
 We have
audited the accompanying balance sheets of Secured Diversified Investment, LTD
as of December 31, 2007 and 2006, and the related statements of operations,
stockholders’ equity and cash flows for the years ended December 31, 2007 and
December 31, 2006. These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits 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 financial statements referred to above present fairly, in all
material respects, the financial position of Secured Diversified Investment, LTD
as of December 31, 2007 and 2006, and the related statements of operations,
stockholders’ equity and cash flows for the years ended December 31, 2007 and
December 31, 2006, in conformity with accounting principles generally accepted
in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 1 to the
financial statements, the Company has an accumulated deficit of $9,026,256 and
reported a net loss of $309,066, which raises substantial doubt about its
ability to continue as a going concern.  Management’s plans concerning
these matters are also described in Note 1.  The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
 
 /s/
Moore & Associates, Chartered
 
 Moore
& Associates Chartered
 Las
Vegas, Nevada
 April 8,
2008
 
 2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253-7499 Fax (702)
253-7501
 F-1
 Table of Contents
 SECURED
DIVERSIFIED INVESTMENT, LTD.
 BalanceSheets


ASSETSDecember
      31,2007
              
              December
      31, 2006CURRENT
      ASSETSCash
      and cash equivalents
              $
              1,684
              
              $
              7,667Prepaid
      expenses
              
              -
              
              
              10,907Net
      assets held for sale
              
              18,612
              
              
              23,544Real
      estate investments
              
              200,000
              
              
              500,000Assets
      from discontinued operations
              
              -
              
              
              1,109,167Total
      Current Assets
              
              170,296
              
              
              1,651,285TOTAL
      ASSETS
              $
              170,296
              
              $
              1,651,285LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)CURRENT
      LIABILITIESAccounts
      payable
              $
              173,745
              
              $
              27,138Accrued
      expenses
              
              154,741
              
              
              187,722Accrued
      payroll liabilities
              
              90,426
              
              
              3,465Liabilities
      from discontinued operations
              
              -
              
              
              1,322,512Total
      Current Liabilities
              
              418,912
              
              
              1,540,837STOCKHOLDERS'
      EQUITY (DEFICIT)Preferred
      stock, $0.001 par value, 5,000,000
                shares
      authorized, -0- and 18,201
                shares
      issued and outstanding, respectively
              
              -
              
              
              182Common
      stock, $0.001 par value, 50,000,000
                shares
      authorized, 162,862 and 144,841
                shares
      issued and outstanding, respectively
              
              163
              
              
              145Unissued
      shares
              
              5,830
              
              
              5,830Additional
      paid-in capital
              
              8,818,647
              
              
              8,818,481Accumulated
      deficit
              
              (9,023,256)
              
              
              (8,714,190)Total
      Stockholders' Equity (Deficit)
              
              (248,616)
              
              
              110,448TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY (DEFICIT)
              $
              170,296
              
              $
              1,651,285


The
accompanying notes are an integral part of these financial
statements.
 F-2
 Table of Contents
 SECURED DIVERSIFIED INVESTMENT,
LTD.
 Statementsof
Operations
 For
      the Years Ended
                      December 31,2007
                  
                  2006REVENUES
                  $
                  -
                  
                  $
                  -OPERATING
      EXPENSESGeneral
      and administrative
                  
                  411,859
                  
                  
                  919,599Total
      Operating Expenses
                  
                  411,859
                  
                  
                  919,599INCOME
      (LOSS) FROM OPERATIONS
                  
                  (411,859)
                  
                  
                  (919,599)OTHER
      EXPENSESImpairment
      loss
                  
                  (300,000)
                  
                  
                  (248,137)Interest
      expense
                  
                  (6,144)
                  
                  
                  (1,888)Gain
      on disposal of equity investment
                  
                  -
                  
                  
                  33,803Debt
      forgiveness
                  
                  -
                  
                  
                  268,768Other
      income (expense)
                  
                  11,639
                  
                  
                  (161,517)Total
      Other Expenses
                  
                  (294,505)
                  
                  
                  (108,971)NET
      INCOME FROM CONTINUING OPERATIONS
                  
                  (706,364)
                  
                  
                  (1,028,570)Discontinued
      operations
                  
                  397,298
                  
                  
                  309,239NET
      INCOME BEFORE TAXES
                  
                  (309,066)
                  
                  
                  (719,331)Income
      taxes
                  
                  -
                  
                  
                  -NET
      LOSS
                  $
                  (309,066)
                  
                  $
                  (719,331)BASIC
      LOSS PER COMMON SHARE
                  $
                  (2.01)
                  
                  $
                  (7.85)WEIGHTED
      AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING
                  
                  153,852
                  
                  
                  91,642
 The
accompanying notes are an integral part of these financial
statements.
 F-3
 Table of Contents
 SECURED DIVERSIFIED
INVESTMENT, LTD.
 Statementof Stockholders' Equity (Deficit)
  Preferred
      Stock
                          Series A
                      
                      Preferred
      Stock
                          Series B
                      
                      Preferred
      Stock
                          Series C
                      
                      Common
      Stock
                      
                      Additional
                          Paid-In
                      
                      Unissued
                      
                      AccumulatedShares
                      
                      Amount
                      
                      Shares
                      
                      Amount
                      
                      Shares
                      
                      Amount
                      
                      Shares
                      
                      Amount
                      
                      Capital
                      
                      Shares
                      
                      DeficitBalance,
      December 31, 2005
                      
                      17,774
                      
                      $
                      178
                      
                      
                      402
                      
                      $
                      4
                      
                      
                      12,500
                      
                      $
                      125
                      
                      
                      38,443
                      
                      $
                      38
                      
                      $
                      8,676,352
                      
                      $
                      125,000
                      
                      $
                      (7,994,859)Shares
      to be issued for services
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (125,000)
                      
                      
                      -Shares
      issued for services,previously unissued
                      
                      313
                      
                      
                      3
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      124,937
                      
                      
                      -
                      
                      
                      -Shares
      cancelled
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (12,500)
                      
                      
                      (125)
                      
                      
                      (102)
                      
                      
                      (0)
                      
                      
                      (378,623)
                      
                      
                      -
                      
                      
                      -Shares
      issued for conversion ofseries C preferred stock
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      37,500
                      
                      
                      38
                      
                      
                      366,750
                      
                      
                      -
                      
                      
                      -Shares
      to be issued for fractionalshares adjustment
                      
                      (288)
                      
                      
                      (3)
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (5,694)
                      
                      
                      5,830
                      
                      
                      -Shares
      issued for services
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      50,000
                      
                      
                      50
                      
                      
                      29,950
                      
                      
                      -
                      
                      
                      -Shares
      issued to adjustfor anti-dilution
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      19,000
                      
                      
                      19
                      
                      
                      (19)
                      
                      
                      -
                      
                      
                      -Stock
      options expense
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      4,240
                      
                      
                      -
                      
                      
                      -Net
      income (loss) for the year ended December 31,
    2006
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (719,331)Balance,
      December 31, 2006
                      
                      17,799
                      
                      
                      178
                      
                      
                      402
                      
                      
                      4
                      
                      
                      -
                      
                      
                      -
                      
                      
                      144,841
                      
                      
                      145
                      
                      
                      8,817,893
                      
                      
                      5,830
                      
                      
                      (8,714,190)Conversion
      of preferred stockcommon stock
                      
                      (17,799)
                      
                      
                      (178)
                      
                      
                      (402)
                      
                      
                      (4)
                      
                      
                      -
                      
                      
                      -
                      
                      
                      18,021
                      
                      
                      18
                      
                      
                      754
                      
                      
                      -
                      
                      
                      -Net
      income (loss) for the yearended December 31, 2007
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (309,066)Balance,
      December 31, 2007
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      162,862
                      
                      $
                      163
                      
                      $
                      8,818,647
                      
                      $
                      5,830
                      
                      $
                      (9,023,256)
 The
accompanying notes are an integral part of these financial
statements.
 F-4
 Table of Contents
 SECURED DIVERSIFIED
INVESTMENT, LTD.
 Statementsof Cash Flows
 For
      the Years Ended
                      December 31,2007
                  
                  2006OPERATING
      ACTIVITIESNet
      income (loss)
                  $
                  (309,066)
                  
                  $
                  (719,331)Adjustments
      to Reconcile Net Loss to NetCash
      Used by Operating Activities:Impairment
      of real estate
                  
                  300,000
                  
                  
                  248,137Shares
      to be issued
                  
                  -
                  
                  
                  5,830Gain
      on settlement of debt and litigation
                  
                  -
                  
                  
                  (302,409)Shares
      issued officers
                  
                  -
                  
                  
                  18,000Shares
      cancelled
                  
                  -
                  
                  
                  (11,250)Options
      granted
                  
                  -
                  
                  
                  4,240Changes
      in operating assets and liabilities:Prepaid
      expenses
                  
                  10,907
                  
                  
                  (1,133)Other
      assets
                  
                  -
                  
                  
                  16,961Accounts
      payable and accrued expenses
                  
                  113,628
                  
                  
                  (316,034)Payroll
      liabilities
                  
                  86,961
                  
                  
                  2,459Net
      Cash Used by Operating Activities ofContinuing
      Operations
                  
                  202,430
                  
                  
                  (1,054,530)Net
      Cash Used by Operating Activities of  Discontinued
      Operations
                  
                  (218,563)
                  
                  
                  114,515Net
      Cash Used by Operating Activities
                  
                  (16,133)
                  
                  
                  (940,015)INVESTING
      ACTIVITIESInvestment
      in real estate
                  
                  -
                  
                  
                  (200,000)Assets
      held for sale
                  
                  4,932
                  
                  
                  -Net
      Cash Used by Investing Activitiesof Continuing
      Operations
                  
                  4,932
                  
                  
                  (200,000)Net
      Cash Used by Investing Activitiesof Discontinued
      Operations
                  
                  -
                  
                  
                  (42,868)Net
      Cash Used (Provided by) by Investing Activities
                  
                  4,932
                  
                  
                  (242,868)FINANCING
      ACTIVITIESNet
      Cash Used by Financing Activities of Continuing
      Operations
                  
                  -
                  
                  
                  -Net
      Cash Used by Financing Activities of Discontinued
      Operations
                  
                  -
                  
                  
                  (39,854)Net
      Cash Used by Financing Activities
                  
                  -
                  
                  
                  (39,854)NET
      DECREASE IN CASH
                  
                  (11,201)
                  
                  
                  (1,222,737)CASH
      AT BEGINNING OF PERIOD
                  
                  12,885
                  
                  
                  1,230,404CASH
      AT END OF PERIOD
                  $
                  1,684
                  
                  $
                  7,667SUPPLEMENTAL
      DISCLOSURES OF CASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
                  $
                  30,394
                  
                  $
                  88,906Income
      Taxes
                  $
                  -
                  
                  $
                  -NON-CASH
      INVESTING AND FINANCING ACTIVITIES:The
      Company settled following debts through transfer of property/ownership
      interest as of December 31, 2007:Mortgage
      note payable
                  $
                  370,000
                  
                  $
                  -Mortgage
      note payable
                  $
                  646,340
                  
                  $
                  -Mortgage
      note payable
                  $
                  110,000
                  
                  $
                  -Mortgage
      note payable - related party
                  $
                  71,630
                  
                  $
                  -Mortgage
      note payable - related party
                  $
                  67,000
                  
                  $
                  -
  The
accompanying notes are an integral part of these financial
statements.
 F-5
 Table of Contents


SECUREDDIVERSIFIED INVESTMENT, LTD.
 Notes to
Audited Financial Statements
 December
31, 2007 and 2006




NOTE 1 – Basis of
presentation and Going Concern





Basis
of presentation:





The
accompanying consolidated financial statements have been prepared in accordance
with the rules and regulations of the Securities and Exchange Commission for the
presentation of financial information, and include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments
considered necessary for a fair presentation have been included.





Going
concern:





The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern.  However, the Company has accumulated
deficit of $9,023,256 as of December 31, 2007.  The Company reported
net loss of $309,066 at December 31, 2007. The Company has no cash reserves to
pay its existing obligations and has exhausted all possibilities in efforts to
raise the necessary capital to meet its obligations for the next 12
months.  Since our inception we have been unsuccessful in pursing
revenues with our investment properties.  Several of our acquired
properties, including the T-Rex Plaza, the Hospitality Inn, and the Katella
Center, among others, were or became impaired assets that were
underperforming.  These properties were incapable of generating
adequate revenues.  A major contributing factor to the lack of
revenues for these properties was high-cost of debt and ground lease obligations
underlying these properties.  The assets that sufficiently produced
cash to service their obligations, but not sufficient cash to support the
Company’s overhead, such as Decatur Center, Spencer Springs and the Cannery
West, had to be sold to continue our operations, including the high costs
associated with being a public company, in addition to absorbing the costs
associated with our impaired assets. Current management has restructured the
Company’s operations by selling many of its poorly performing properties and
reducing the associated high cost of debt and ground leases.  The
Company significantly reduced overhead and rolled backed the stock in order to
restructure the Company’s capital structure.  As of September 30,
2007, the Company discontinued its Katella & DCB (real estate)
operations.  Katella Center and Campus Drive have been disposed in
exchange for settlement of debt.  (See note 5 &
10).  While management continues with efforts to find business
partners, it is unlikely that we will succeed.





In view
of the matters described in the preceding paragraph, recoverability of a major
portion of the recorded asset amounts shown in the accompanying balance sheet is
dependent upon continued operations of the Company, which in turn is dependent
upon the Company’s ability to raise additional capital to succeed in its future
operations.  The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.





NOTE 2 – Nature of
Operations




The
Company was incorporated under the laws of the state of Utah on November 22,
1978.  On July 23, 2002, the shareholders approved a change in
domicile from Utah to Nevada.




F-6
 Table of Contents




In
accordance with Nevada corporate law, a change of domicile is effected by
merging the foreign corporation with and into a Nevada
corporation.  On August 9, 2002, a merger between the Company and Book
Corporation of America was completed.  Upon completion of the merger
Book Corporation of America was dissolved.  On September 18, 2002, the
OTCBB symbol for the Company’s common stock was changed from BCAM to
SCDI.  The shareholders also approved amendments to the Company’s
Articles of Incorporation to change the par value of the Company’s Common Stock
from $.005 to $.001 and to authorize 50,000,000 shares of Preferred Stock
(Series A, B and C), par value $0.01.  On November 15, 2002, the
Company changed its fiscal year end from October 31 to December 31.




During
2002, the Company began pursuing the acquisition of ownership interests in real
estate properties that are geographically and functionally diverse in order to
be more stable and less susceptible to devaluation resulting from regional
economic downturns and market shifts.  Currently, the Company owns two
properties in Phoenix, Arizona which were acquired in the first quarter of
2006.




NOTE 3 – Significant
Accounting Policies




Reclassifications.Certain prior
period amounts in the accompanying consolidated financial statements have been
reclassified to conform to the current period’s presentation. These
reclassifications had no effect on the consolidated results of operations or
financial position for any period presented.





Income (Loss) per
share. Basic loss per share is based on the weighted average number of
common shares outstanding during the period.  Diluted loss per share
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common
stock.  At December 31, 2007 and 2006, all potential common shares are
excluded from the computation of diluted loss per share, as the effect of which
was anti-dilutive.





Income
Taxes.Deferred income tax
assets and liabilities are computed annually for differences between the
consolidated financial statements and tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted laws
and rates applicable to the periods in which the differences are expected to
affect taxable income (loss). Valuation allowance is established when necessary
to reduce deferred tax assets to the amount expected to be
realized.





Segment
Reporting.Statement of Financial Accounting Standards No. 131 ("SFAS
131"), "Disclosure about Segments of an Enterprise and Related Information"
requires use of the "management approach" model for segment reporting. The
management approach model is based on the way a company's management organizes
segments within the company for making operating decisions and assessing
performance. Reportable segments are based on products and services, geography,
legal structure, management structure, or any other manner in which management
disaggregates a company.





During
the first quarter of 2006, the Company acquired investment interest in two
separate properties in Arizona.




F-7
 Table of Contents




On
January 6, 2006, the Company acquired a 25 percent Tenant-in-Common interest in
a commercial property located in Paradise Valley, Arizona for
$300,000.  The tenant-in common partners include a director of the
Company, 25 percent, and an unrelated third party, 50 percent and SDI
25%.  The unrelated third party will be responsible for all costs of
operation including, but not limited to, landscaping, maintenance, taxes,
insurance, property management and debt payments.




On
February 15, 2006, the Company acquired a 33.3 percent interest in a property
located in Phoenix, Arizona for $200,000.  The property consists of a
2,180 square foot structure on approximately 38,587 square feet of
land.  The Company’s interest was purchased from Ms Jan Wallace, an
officer and director of the Company.  The property will be used to
house the Company’s headquarters.  The Company is not responsible for
any of the expenses and does not share in the revenue stream associated with
these properties.




For the
years ended December 31, 2007, and 2006 all of the Company’s investment
properties are located in Arizona. Properties in Arizona do not contribute to
the income or expense stream of the Company.





Investment
in real estate.





The
Company reports its investment in real estates at historical
cost.  Those properties were acquired with the intention that when the
value of properties will appreciate the Company will sell its share in those
properties. The Company used cost method of accounting based on SOP 78-9
paragraph .08 which states that





“The
division believes that the accounting recommendations for use of the equity
method of accounting for investments in general partnerships are generally
appropriate for accounting by limited partners for their investments in limited
partnerships. A limited partner's interest may be so minor that the limited
partner may have virtually no influence over partnership operating and financial
policies. Such a limited partner is, in substance, in the same position with
respect to the investment as an investor that owns a minor common stock interest
in a corporation, and, accordingly, accounting for the investment using the cost
method may be appropriate.”





Recent accounting
pronouncements.




In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning January 1, 2008. The Company is
currently assessing the potential impact that adoption of SFAS No. 157
would have on the financial statements.





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective beginning January 1, 2008, although early adoption is permitted.
The Company is currently assessing the potential impact that adoption of SFAS
No. 159 will have on the financial statements.




F-8
 Table of Contents





The FASB
has revised SFAS No. 141.  This revised statement establishes uniform
treatment for all acquisitions.  It defines the acquiring
company.  The statement further requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired at the acquisition date, measured at their fair market values as of
that date.  It requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquired, at the full amounts of their
fair values. This changes the way that minority interest is recorded and
modified as a parent’s interest in a subsidiary changes over
time.  This statement also makes corresponding significant amendments
to other standards that related to business combinations, namely, 109, 142 and
various EITF’s.  This statement applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after 12/15/08.  The
Company believes the implementation of this standard will have no effect on our
financial statements.





NOTE 4 – Real Estate
Investments




At
December 31, 2007, the Company held investments in two separate properties
(see Note 3 Significant
Accounting Policies – Segment Reporting).  These properties do
not contribute to the income or expense stream of the Company.





It is the
Company’s policy to assess its long lived assets for impairment on an annual
basis, or more frequently if warranted by circumstances.  Because of
the slow down of the real estate market and decline in value of properties the
Company impaired its investment in Paradise Valley, Arizona property from
$300,000 to $150,000 and recorded an impairment loss of
$150,000.  Additionally, the Company has impaired its Phoenix Cactus
Street property 100% recording an impaired loss of $200,000.  In light
of the current real estate market and projected trends, the Company does not see
recovery of these investments in the foreseeable future.





NOTE 5 – Related Party
Transactions




Sutterfield Family Trust and C.
Wayne Sutterfield (Sutterfield). At December 31, 2005, the Company owed
Sutterfield, a former director and shareholder, two notes, $67,000 and $71,630
both secured by  trust deeds on 5030 Campus Drive.  The
notes bear interest at 8% and mature on February 17 2007, and December 31, 2006,
respectively. The Company is in default on the $71,630 note and the other note
of $67,000. Sutterfield was a minority owner (46.2%) in DCB.  In
addition to the interest payment on the 3rd trust
deed, the Company, pursuant to the terms of the operating agreement, liable to
pay Sutterfield a preferred return on his investment.  The Company has
not made payments to Sutterfield pursuant to the terms of the operating
agreement.  Sutterfield has advised the Company of its
default.  As a result of our default, the Company on October 17, 2007,
transferred its 53.8% membership interest in DCB, in exchange for: (a) an
indemnity on certain obligations pertaining to the Campus Property, including a
ground lease, first and second trust deeds, and property taxes; and (b) a
release from Sutterfield on any debt we owe, including two promissory notes in
the principal amount of $138,630.32 and all accrued interest
thereon.




F-9
 Table of Contents





As at
December 31, 2007, the Company eliminated the operations and cash flows of DCB
from its ongoing operations and it is not involved in the continuing operations
of DCB and reported as discontinued operations in the accompanying financial
statements.




NOTE 6 –
Mortgages Payable




As of
December 31, 2007, the Company settled its mortgages payable as
follows:.




1.
Mortgage note payable $370,000




The
Company had note payable of $370,000 with 11.5% interest and maturity date of
June 25, 2007. The note was secured on 1st trust
deed on the Katella property and was in default due to non payment. On October
8, 2007 the Board of Directors authorized the disposal of property in exchange
for the settlement of debt including interest. On October 23, 2007, the Company
transferred the property in full satisfaction of all obligations secured by the
deed of trust.




2. Mortgage note payable
$646,340




The
Company had note payable of $646,340 with 8% interest and maturity date of
February 2, 2013. The note was secured on 1st trust
deed on the 5030 Campus (DCB) property. The note was settled as part of transfer
of interest in DCB to Suttefiled (See note 5).




3. Mortgage note payable
$110,000




The
Company had note payable of $110,000 with 8% interest and maturity date of
February 4, 2008. The note was secured on 2nd trust deed on the 5030 Campus
(DCB) property. The note was settled as part of transfer of interest in DCB to
Suttefiled (See note 5).




NOTE 7 – Mortgages Payable –
Related Parties




The
Company had note payable of $71,630 and $67,000 to a related party Wayne
Sutterfiled. The notes had 8% interest and matured on December 31, 2006 and
February 17, 2007 respectively. Both the notes were secured by trust deed on
5030 Campus (DCB) property respectively. The Company was in default on the notes
payment including interest. On October 17, 2007, the Company transferred its
100% interest in DCB property to its minority shareholder Wayne Sutterfiled in
full settlement of its note payable including interest (See note
5).




NOTE 8 – Stock
Options




On April
7, 2006, the Company settled its litigation with Luis Leon.  The
settlement included a grant of 7,500 (adjusted for post split effect) stock
options.  The Company adopted 2006 stock option plan in June 2006 and
on August 8, 2006 issued 7,500 (adjusted for post split effect) options at a
strike price of $0.01 to Luis Leon under the ‘2006 Stock Option Plan of Secured
Diversified Investment, Ltd.





As of
December 31, 2006, the following is a summary of the stock option
activity:




F-10
 Table of Contents




Options
                Outstanding
              Weighted
                Average
                Exercise
                Price
              Agregate
                Intrinsic
                ValueOutstanding
      at December 31, 2005
              -
              $       -
              $       -Granted
              7,500
              $0.01
              -Forfeited
              -
              -
              -Exercised
              -
              -
              -Expired
              (7,500)Outstanding
      at December 31, 2006
              -
              $       -
              $     -




As of
December 31, 2006 the Company recorded $4,240 in stock options
expense.


The fair
value was calculated using the Black-Scholes option pricing model assuming no
dividends, a risk-free interest rate of 6.5%, an expected life of 0.6 years and
expected volatility of 100%.




NOTE 9 –
Warrants




At
December 31, 2007, the Company had the following subscriptions for warrants
outstanding:




Date
            Number
      of Warrants
            Exercise
      Price
            Expiration
      DateApril
      4, 2005
            400,000
            Range
      from $0.50 to $2.00
            April
      4, 2010





Following
is a summary of the warrant activity:






Warrants
              Outstanding
            Aggregate
              Intrinsic
      ValueOutstanding at
      December 31, 2006
            400,000
            $          -GrantedForfeited
            -Exercised
            -Outstanding at
      December 31, 2007
            400,000
            $          -




F-11
 Table of Contents




Following
is a summary of the status of warrants outstanding at December 31,
2007:




Outstanding
      Warrants
              Exercisable
      WarrantsExercise
      Price
              Number
              Remaining Contractual
                Life
              Weighted
                Average
                Exercise
                Price
              Number
              Weighted

                Average
                Exercise
                Price$
      0.50 - $2.00
              400,000
              2
      years
              $
      1.25
              400,000
              $1.25
  The fair
value was calculated using the Black-Scholes option pricing model assuming no
dividends, a risk-free interest rate of 6.5%, an expected life of 5 years and
expected volatility of 100%.




NOTE 10 – Loss Per
Share




Following
is a reconciliation of net income (loss) and weighted average number of shares
outstanding, in the computation of income (loss) per share for the years ended
December 31, 2007 and 2006.




2007
              
              2006Net
      income (loss)
              $
              (309,066)
              
              $
              (719,331)Less
      preferred stock dividends
              
              -
              
              
              -Net
      income (loss) available to common shareholders
              $
              (309,066)
              
              $
              (719,331)Basic
      weighted average shares outstanding
              
              153,852
              
              
              91,642Dilutive
      potential common shares
              
              -
              
              
              -Diluted
      weighted average shares outstanding
              
              153,852
              
              
              91,642Basic
      weighted net income (loss) per share
              $
              (2.01)
              
              $
              (7.85)Basic
      and diluted net income (loss) per share
              $
              (2.01)
              
              $
              (7.85)Potential
      common shares excluded from dilutedweighted
      average shares outstanding because oftheir
      anti-dilutive nature:Convertible
      Series A, B and C preferred stock
              
              -
              
              
              -and
      warrants granted, not yet exercised
              
              -
              
              
              --
              
              
              -




F-12
 Table of Contents




NOTE 11 -
Litigation




On
January 13, 2006, Alliance Title Company, Inc. (“Alliance”) filed a complaint in
the matter of Alliance Title Company, Inc. v. Secured Diversified Investment,
Ltd. (case no. 06CC02129) in the Superior Court of California, County of
Orange.  The complaint alleges that Alliance, our escrow agent, was
entrusted with $267,000 pursuant to escrow instructions, and that a mutual
written agreement among the parties to the escrow was required to properly
disperse the funds.  Alliance further alleges that no instructions
were provided to disperse the funds, but instead, competing claims for the funds
were made by Secured Diversified Investment, Ltd., Clifford L. Strand, William
S. Biddle, Gernot Trolf, Nationwide Commercial Brokers, Inc., and Prime Time
Auctions, Inc. Alliance has deposited the funds with the court and has asked for
a declaration of rights regarding the funds.  Alliance has requested
that its reasonable costs and attorney’s fees be paid from the deposited
funds.




This
matter was dismissed by Alliance Title Company in open court in February
2007.




The
Company received $33,803 as its share out of the funds and recognized as gain on
equity investment as of December 31, 2006.




On
January 20, 2006, Clifford L. Strand, William S. Biddle, Gernot Trolf, our
former management, and Nationwide Commercial Brokers, Inc., our former
subsidiary (collectively, “Plaintiffs”), filed a complaint in the matter of
Clifford L. Strand v. Secured Diversified Investment, Ltd. (case no. 06CC02350)
in the Superior Court of California, County of Orange.  The complaint
contains causes of action for fraud and misrepresentation, negligent
misrepresentation, breach of contract, breach of the covenant of good faith and
fair dealing, conversion, common counts, money had and received, and declaratory
relief.  These allegations arise out of the hold over of funds at
issue in Alliance Title Company, Inc. v. Secured Diversified Investment, Ltd.
(case no. 06CC02129), described above.  To date, however, the matters
have not been consolidated.  The Company has set aside $177,000 in
contingent liabilities as potential payout and settlement to these officers. As
of December 31, 2006 the Company paid $45,000 to William S. Biddle and $42,000
to Gernot Trolf.





This matter has been settled as of
April 5, 2007.On January 5, 2007, the Company entered into a
Confidential Settlement and General Release Agreement (the “Settlement
Agreement”) with Mr. Clifford L. Strand to resolve litigation in the matters of
Clifford L. Strand v. Secured Diversified Investment, Ltd. (case no. 06CC02350)
in the Superior Court of California, County of Orange, as well as other claims
involving Mr. Strand and our company as set forth in the Agreement. The
Settlement Agreement with Mr. Strand provides that a stipulation and order of
disbursement will be filed on the remaining $89,998 as follows: $80,000 to Mr.
Strand and $9,998 to our company. In addition, Mr. Strand expressly waived any
and all rights he may have had in connection with reemployment with our company,
and agreed to refrain from pursuing complaints against our company and our
officers and directors in any court or government agency. Further, Mr. Strand
granted an irrevocable proxy in connection with any shares of stock beneficially
owned by him.





On March
10, 2006, some of our shareholders, including Clifford L. Strand, Robert J.
Leonard, William S. Biddle, and Gernot Trolf (collectively, “Plaintiffs”) filed
a complaint in the matter of William S. Biddle v. Secured Diversified
Investment, Ltd. (case no. 06CC03959) in the Superior Court of California,
County of Orange.  Plaintiff seek declaratory relief as to whether we
are a foreign corporation under California Corporation Code Section 2115(a) and
whether Plaintiff’s alleged demand for our shareholder list and for an
inspection of the accounting books and records and minutes of shareholders ,
board of directors and committees of such board is governed under California
Corporation Code Sections 1600 and 1601.  The Company is contesting
this case vigorously and is proceeding with discovery.  At this time,
the Company cannot make any evaluation of the outcome of this
litigation.




F-13
 Table of Contents




NOTE
12 - Discontinued Operations





As of
December 31, 2007 the Company discontinued following operations:





1. Katella
Center





On
October 8, 2007 the Board of Directors of the Company approved to sign the Deed
and Lieu of Foreclosure on the Katella Center.




On
October 23, 2007 the Grant Deed in Lieu of Foreclosure was assigned in full
satisfaction of all obligations secured by the deed of trust including note
payable of $370,000 with any accrued and unpaid interest thereon.




As of
December 31, 2007, the Company has eliminated the operations and cash flows of
Katella Center from its ongoing operations and it is not involved in the
continuing operations of Katella Center and reported as discontinued operations
in the accompanying financial statements.







2. 5030 Campus (DCB)
Property




On
September 29, 2007 the Board of Directors of the Company approved to transfer
its 53.8% membership interest in DCB, LLC to the Sutterfield Family Trust and
Wayne Sutterfiled in exchange for (a) an indemnity on certain obligations
pertaining to the Campus Property, including a ground lease, first and second
trust deeds, and property taxes; and (b) a release from Sutterfield on any debt
we owe, including two promissory notes in the principal amount of $138,630.32
and all accrued interest thereon.





As of
December 31, 2007, the Company has eliminated the operations and cash flows of
DCB from its ongoing operations and it is not involved in the continuing
operations of DCB and reported as discontinued operations in the accompanying
financial statements.





3. Secured
Lending





During 2006 the Company established a
new wholly owned subsidiary, Secured Lending, LLC, to engage in mortgage banking
activities in the state of Arizona. The new subsidiary was incorporated on June
15th, 2006 and it began funding loans in July. However, Secured Lending was not
able to sustain its mortgage banking activities and these relationships were
mutually terminated. The Company discontinued its mortgage banking activity at
December 31, 2006.The Company recognized a loss of $153,672 as a result
of discontinued operations and recorded net assets held for sale of $23,544 at
December 31, 2006.  During 2007 the Company recognized a loss of $6,547
as a result of discontinued operations and recorded net assets held for sale of
$19,129 in the accompanying financial statements.




F-14
 Table of Contents




NOTE 13 – Forgiveness of
Debt





During
2006 the Company recorded debt forgiveness of $268,768 against reversal of
various old debts which passed statute of limitations.




NOTE 14 –Stockholders’
Equity




In
February 2003, the Company created three series of preferred stock, all of which
are convertible at the option of the holder: (1) Series A consisting of
7,500,000 shares with a par value of $0.01, a liquidation preference of $1.00
per share, convertible into an equal number of common shares 36 months after
issuance, with the same voting rights as common stock; (2) Series B consisting
of 20,000,000 shares with a par value of $0.01, a liquidation preference of
$0.50 per share, and convertible into an equal number of common shares 24 months
after issuance; and (3) Series C consisting of 22,500,000 shares with a par
value of $0.01, a liquidation preference of $3.00 per share, and convertible
into an equal number of common shares 24 months after issuance.  In
the event the price of common stock is less than the purchase price of the
preferred stock on the conversion date, the holder is entitled to convert at a
rate equal to the purchase price divided by the common stock price.




On August
19, 2004, the Company obtained a written consent from the holders of a majority
of its outstanding shares of Common Stock and Series B Preferred Stock to amend
the Certificate of Designation.  Such consent amends the terms of the
Series B Preferred Stock to permit the Board of Directors to permit conversion
of the Series B Preferred Stock into Common Stock prior to the expiration of the
two-year prohibition on conversion.  All 250,000 shares of Series C
Preferred Stock also consented to the amendment.  The amendment to the
Certificate of Designation became effective October 28, 2004.  After
approval to amend the Certificate of Designation, 5,839,479 shares of Series B
Preferred Stock were converted to Common Stock.




On August
1, 2006, our Board of Directors resolved to amend the Articles of Incorporation
pursuant to Nevada Revised Statues 78.207 to decrease the number of authorized
shares of our common stock, par value $.001, from 100,000,000 to 5,000,000
shares. Correspondingly, our Board of Directors affirmed a reverse split of
twenty to one in which each shareholder will be issued one common share in
exchange for each twenty common share of their currently issued common stock. At
the same time and under the same authority, our Board of Directors resolved to
amend the Articles of Incorporation to decrease the number of authorized shares
of our preferred stock, par value $0.01, from 50,000,000 to 2,500,000 shares.
Correspondingly, our Board of Directors affirmed a reverse split of twenty to
one in which each shareholder will be issued one common share in exchange for
each twenty common share of their currently issued common stock. A record date
of August 14, 2006 was established in order to provide the NASD ten days notice
pursuant to Rule 10b-17 of the Securities and Exchange Act of 1934 as amended.
All shareholders of this record date will receive one share of our common stock
for each twenty shares owned. These share certificates will be issued upon
surrender. On August 1, 2006, we filed a Certificate of Amendment to the
Articles of Incorporation with the Nevada Secretary of State to reflect the
decrease in authorized shares. Under Nevada Revised Statutes 78.207, shareholder
approval was not required.




All the
issued and outstanding shares have been retroactively restated for the effect of
the reverse stock split of 20:1.




During
the year ended December 31, 2007 and 2006, the Company had the following equity
transaction:




On
February 2, 2006, Iomega converted its 250,000 shares of Series C Preferred
Stock for 15,000,000 shares of the Company’s common stock. The shares were
converted at a price of $0.05 per share.




On
October 23, 2006, the Company issued 400,000 bonus shares to its Chief Executive
Officer and 200,000 bonus shares to its Chief Financial
Officer.  These shares were recorded at the fair market value close to
the date of issuance and charged to operations.




F-15
 Table of Contents




On
October 24, 2006, the Company issued 400,000 shares for consulting
services.  These shares were issued at the fair market value close to
the date of issuance and charged to operations.




On
September 24, 2007, the Company converted it Series A and Series B preferred
shares to common stock.  The total outstanding shares of Series A
preferred stock, 355,978 shares, where converted to 352,453 shares of common
stock at a conversion ratio of 1:1.01.  The total outstanding shares
of Series B preferred stock, 8,044 shares, were converted to 7,954 shares of
common stock at a conversion ratio of 1:1.01.  The conversion
increased the total number of common shares outstanding from 2,896,820 to
3,257,237.




On
October 24, 2007, the Company completed a 20 to 1 reverse stock split of its
outstanding common shares thereby reducing its outstanding common shares from
3,257,237 to 162,862.




NOTE
15-   Income Taxes




No
provision was made for Federal income tax for the year ended December 31, 2007
and 2006, since the Company had significant net operating loss. For the year
ended December 31, 2007, the Company incurred net loss carry forward for tax
purposes of $9,023,256. However, for the year ended December 31, 2005 the
Company incurred net loss carry forward for tax purposes of approximately
$2,990,000.  The net operating losses carry forwards may be used to
reduce taxable income through the year 2025.   The availability
of the Company’s net operating loss carry forwards are subject to limitation if
there is a 50% or more positive change in the ownership of the Company’s stock.
The provision for income taxes consists of the state minimum tax imposed on
corporations.





Temporary
differences that give rise to deferred tax assets and liabilities at December
31, 2007 and 2006, comprised of depreciation and amortization and net operating
loss carry forward. The gross deferred tax asset balance as of December 31, 2007
is approximately $3,067,907.  A 100% valuation allowance has been
established against the deferred tax assets, as the utilization of the loss
carry forwards cannot reasonably be assured.





The
components of the net deferred tax asset are summarized below:


December
      31, 2007
              
              December
      31, 2006Deferred
      tax asset
              $
              3,067,907
              
              $
              2,962,825Net
      operating losses
              
              (3,067,907)
              
              
              (2,962,825)Less:
      valuation allowance
              $
              -
              
              
              -


The
following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Statement of
Operations:




December
      31, 2007
              December
      31, 2006Tax
      expense (credit) at statutory rate-federal
              (34)
      %
              (34)
      %State
      tax expense net of federal tax
              (6)
              (6)Changes
      in valuation allowance
              40
              40Tax
      expense at actual rate
              -
              -




NOTE
16-   Subsequent Events




The comany
has borrowed $40,000 to pay for the filing of the Annual Report and other
related expenses and costs.





F-16
 Table of Contents




Item8.   Changes In and Disagreements with
Accountants on Accounting and Financial Disclosure





None





Item 8A.  Controls and Procedures





Management’s
Report On Internal Control Over Financial Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a-15(f) under the Exchange Act.
This rule defines internal control over financial reporting as a process
designed by, or under the supervision of, the Company’s Chief Executive Officer
and Chief Financial Officer, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with U.S. GAAP. Our internal control over
financial reporting includes those policies and procedures that:




•
            
            Pertain
      to the maintenance of records that, in reasonable detail, accurately and
      fairly reflect the transactions and dispositions of the assets of the
      Company;




•
            
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with U.S. GAAP, and that
      receipts and expenditures of the Company are being made only in accordance
      with authorizations of management and directors of the
      Company; and




•
            
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the Company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





With the
participation of the Chief Executive Officer and the Chief Financial Officer,
our management conducted an evaluation of the effectiveness of our internal
control over financial reporting.   Based on this evaluation, our
management has concluded that our internal control over financial reporting was
not effective as of December 31, 2007 as the result of a material
weakness.   The material weakness results from significant
deficiencies in internal control that collectively constitute a material
weakness.





A
significant deficiency is a deficiency, or combination of deficiencies, in
internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those responsible for
oversight of the registrant’s financial reporting.   The Company
had the following significant deficiencies at December 31, 2007:




14
 Table of Contents





·
            The
      company is effectively insolvent, and only has one employee to oversee
      bank reconciliations, posting payables, and so forth, so there are no
      checks and balances on internal
controls.





Remediation
of Material Weakness





We are
unable to remedy our internal controls until we are able to locate another
business opportunity, or receive financing to hire additional
employees.  At this time, we are effectively not a going
concern.





Limitations
on the Effectiveness of Internal Controls





Our
management, including our Chief Executive Officer and our Chief Financial
Officer, does not expect that our disclosure controls and procedures or our
internal control over financial reporting are or will be capable of preventing
or detecting all errors or all fraud. Any control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that
the control system’s objectives will be met. The design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements, due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns may occur
because of simple error or mistake. Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of controls. The design of any system of controls is based
in part on certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Projections of any evaluation of controls
effectiveness to future periods are subject to risk.





PART III





Item9.  Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section
16(a) of the Exchange Act





The
following information sets forth the names of our current directors and
executive officers, their ages as of December 31, 2007 and their present
positions.




Name
            Age
            Position
      Held with the CompanyJan
      Wallace
            52
            DirectorMunjit
      Johal
            52
            Chief
      Executive Officer, Chief Financial Officer and
  Director





Set forth
below is a brief description of the background and business experience of our
significant employees, executive officers and directors.




15
 Table of Contents





Ms. Wallaceis our director.
She is also serving as the President, CEO and Director of Davi Skin, Inc., a
public company. She is also the President of Wallace Black Financial &
Investment Services, a private consulting company to private and public
companies and individuals for business, financial and Investment strategies. Ms.
Wallace has served as the President and CEO of three public companies listed on
the Over-The-Counter Bulletin Board: MW Medical (predecessor in interest of Davi
Skin, Inc.) from 1998 to 2001; Dynamic and Associates, Inc.; and Claire
Technologies, Inc. from 1994 to 1995. From 1987 to 1996, Ms. Wallace was
associated with four Canadian companies: Active Systems as Executive Vice
President; The Heafey Group, as financial consultant; Mailhouse Plus, Ltd.,
owner and President; and Pitney Bowes, first female sales executive. Ms. Wallace
was educated at Queens University in Kingston, Ontario and
Carleton University, Ottawa, Ontario in Political Science with a minor in
Economics.





Munjit Johalis our CEO, CFO
and Director.  Mr. Johal has broad experience in accounting, finance
and management in the public sector. Since 2002, Mr. Johal has served as the
Chief Financial Officer for Secured Diversified Investment, Ltd. and is also
serving as the Chief Financial Officer of Makeup.com, Ltd.  Since
1998, Mr. Johal has served as the Chief Financial Officer for Dippy Foods, Inc.
Mr. Johal held the same position with Bengal Recycling from 1996 to 1997. As the
Chief Financial Officer for these companies, Mr. Johal was primarily responsible
for overseeing the financial affairs of these entities and ensuring that their
financial statements of these were accurate and complete and complied with all
applicable reporting requirements. From 1990 to 1995, Mr. Johal serves as the
Executive VP for Pacific Heritage Bank in Torrance, California. Mr. Johal earned
his MBA degree from the University of San Francisco in 1980. He received his BS
degree in History from the University of California in Los Angeles in
1978.





Family
Relationships





There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.





Involvement
in Certain Legal Proceedings





To  the
best of our knowledge, during the past five years, none of the
following  occurred  with  respect  to a
present or former director, executive officer, or  employee: (1) any
bankruptcy petition filed by or against any business  of which such
person was a general partner or executive officer either
at  the  time  of the bankruptcy or within two
years prior to that time; (2) any conviction in a
criminal  proceeding  or  being subject to a
pending criminal
proceeding  (excluding  traffic  violations and
other minor offenses); (3) being subject  to  any order,
judgment or decree, not subsequently reversed, suspended
or  vacated,  of  any  court  of  competent  jurisdiction,  permanently  or
temporarily enjoining, barring, suspending or otherwise limiting his or her
involvement in  any  type of business, securities or banking
activities; and (4) being found
by  a  court  of  competent  jurisdiction  (in  a  civil
action), the SEC or the
Commodities  Futures  Trading  Commission  to  have  violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.





16
 Table of Contents




Committees





We
currently do not have an audit committee, compensation committee, nominating
committee, executive committee, Stock Plan Committee, or any other committees.
There has been no need to delegate functions to these committees in our present
financial circumstance.





Audit
Committee





We do not
have a separately-designated standing audit committee. The entire board of
directors performs the functions of an audit committee, but no written charter
governs the actions of the board of directors when performing the functions of
that would generally be performed by an audit committee. The board of directors
approves the selection of our independent accountants and meets and interacts
with the independent accountants to discuss issues related to financial
reporting. In addition, the board of directors reviews the scope and results of
the audit with the independent accountants, reviews with management and the
independent accountants our annual operating results, considers the adequacy of
our internal accounting procedures and considers other auditing and accounting
matters including fees to be paid to the independent auditor and the performance
of the independent auditor.





We do not
have an audit committee financial expert because of the size of our company and
our board of directors at this time. We believe that we do not require an audit
committee financial expert at this time because we retain outside consultants
who possess these attributes.





For the
fiscal year ending December 31, 2007, the board of directors:





§
            Reviewed
      and discussed the audited financial statements with management,
      and





§
            Reviewed
      and discussed the written disclosures and the letter from our independent
      auditors on the matters relating to the auditor's
      independence.





Based
upon the board of directors’ review and discussion of the matters above, the
board of directors authorized inclusion of the audited financial statements for
the year ended December 31, 2007 to be included in this Annual Report on Form
10-KSB and filed with the Securities and Exchange Commission.





Significant
Employees





We have
no significant employees other than our officers and directors.





Section
16(a) Beneficial Ownership Reporting Compliance





Section
16(a) of the Exchange Act requires our directors and executive officers and
persons who beneficially own more than ten percent of a registered class of the
Company’s equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company.  Officers, directors and greater than ten percent
beneficial shareholders are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file.  To the best of our
knowledge based solely on a review of Forms 3, 4, and 5




17
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(and any
amendments thereof) received by us during or with respect to the year ended
December 31, 2007, the following persons have failed to file, on a timely basis,
the identified reports required by Section 16(a) of the Exchange Act during
fiscal year ended December 31, 2007:





Name
      and
              principal
      position
            Number
      of
              late
      reports
            Transactions
      not
              timely
      reported
            Known
      failures to
              file
      a required formJay
      Kister
            0
            0
            0Peter
      Richman
            0
            0
            0Jan
      Wallace
            0
            0
            0Munjit
      Johal
            0
            0
            0





Code
of Ethics Disclosure





As of
December 31, 2007, we have not adopted a Code of Ethics for Financial
Executives, which include our principal executive officer, principal financial
officer, principal accounting officer or controller, or persons performing
similar functions.





Item10.  Executive Compensation





Summary
Compensation Table





The table
below summarizes all compensation awarded to, earned by, or paid to our former
or current executive officers for the fiscal years ended 2006 and
2007.




SUMMARY
      COMPENSATION TABLEName
              and
              principal
              position
            Year
            Salary($)
            Bonus
              ($)
            Stock
              Awards
              ($)
            Option
              Awards
              ($)
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            All
      Other
              Compensation
              ($)
            Total
              ($)Jan
      Wallace(1)
              Former
      President,CEO
            2007
              2006
            180,000
              180,000
            
            600,000Munjit
      Johal(2)
              President,
      CEO and CFO
            2007
              2006
            84,000
              84,000
            
            200,000


(1)
            Effective
      January 17, 2008, Ms. Jan Wallace resigned from all positions as officer
      of our company. Ms. Wallace is still a member of our board of directors.
      Ms. Wallace did not obtain any payment for her services in 2007; all such
      monies noted in “salary” are being accrued by the
  company.




(2)
            On
      January 17, 2008, our board of directors appointed Mr. Munjit Johal to
      serve as a member of the board of directors and shall serve until the next
      annual meeting of the shareholders or until removed by other action as
      allowed by the corporate bylaws. Also on January 17, 2008, our board of
      directors appointed Mr. Munjit Johal to act as our President and Chief
      Executive Officer. Mr. Johal did not obtain any payment for her services
      in 2007; all such monies noted in “salary” are being accrued by the
      company.




18
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Narrative
Disclosure to the Summary Compensation Table




Options





The Board
of Directors administers our stock option plan which provides for the granting
of rights to purchase shares to our directors (including non-employee
directors), executive officers, key employees, and outside consultants. The
Board of Directors sets the vesting period and exercise price per issuance basis
as determined by the purpose of the individual issuance.





Employment
Agreements





On
January 16, 2008, we extended an employment agreement to Mr. Johal to serve as
our President and Chief Executive Officer with a salary of $3,000 and 5,000
shares of our common stock per month. We also owe Mr. Johal certain monies under
a prior employment agreement and certain reimbursements.





Outstanding
Equity Awards at Fiscal Year-End





The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer as of December 31,
2007.





OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
            STOCK
      AWARDSName
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Exercisable
            Number
      of
              Securities
              Underlying
              Unexercised
              Options
              (#)
              Unexercisable
            Equity
              Incentive
              Plan
              Awards:
              Number
      of
              Securities
              Underlying
              Unexercised
              Unearned
              Options
              (#)
            Option
              Exercise
              Price
              ($)
            Option
              Expiration
              Date
            Number
              of
              Shares
              or
      Units
              of
              Stock
      That
              Have
              Not
              Vested
              (#)
            Market
              Value
              of
              Shares
              or
              Units
              of
              Stock
              That
              Have
              Not
              Vested
              ($)
            Equity
              Incentive
              Plan
              Awards:
              Number
              of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
      Have
              Not
              Vested
              (#)
            Equity
              Incentive
              Plan
              Awards:
              Market
      or
              Payout
              Value
      of
              Unearned
              Shares,
              Units
      or
              Other
              Rights
              That
              Have
      Not
              Vested
              (#)Jan
      WallaceMunjit
      Johal





Compensation
of Directors





The table
below summarizes all compensation of our directors as of December 31,
2007.





DIRECTOR
      COMPENSATIONName
            Fees
      Earned or
              Paid
      in
              Cash
              ($)
            Stock
      Awards
              ($)
            Option
      Awards
              ($)
            Non-Equity
              Incentive
              Plan
              Compensation
              ($)
            Non-Qualified
              Deferred
              Compensation
              Earnings
              ($)
            All
              Other
              Compensation
              ($)
            Total
              ($)Peter
      Richman Former
      Director(1)
            -
            -
            -
            -
            -
            -
            -Jay
      Kister Director(2)
            -
            -
            -
            -
            -
            -
            -


(1)
Effective January 7, 2008, Dr. Peter Richman resigned as a member of our board
of directors


(2)
Effective January 15, 2008, Mr. Jay Kister resigned as a member of our board of
directors.




19
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Narrative
Disclosure to the Director Compensation Table





We do not
pay any cash compensation to our directors.





Item11.  Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder
Matters





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
            430,000
      shares
            27.3%Common
            Munjit
      Johal
              5030
      Campus Drive
              Newport
      Beach, California 92663
            10,000
      shares
            6.1%Total
      of All Directors and Executive Officers:Common
            1,200,000
      shares
            32.9%More
      Than 5% Beneficial Owners:Common
            Kelly
      Black
              7349
      N. Scottsdale Road #515 Scottsdale, Arizona 85283
            201,250
      shares
            6.2%Common
            Donald
      Schwall
              8326
      Geary Boulevard
              San
      Francisco, California 94121
            400,000
      shares
            12.3%





(1)
            The
      percentage shown is based on denominator of 162,862 shares of common stock
      issued and outstanding for the company as of October 5, 2007, 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.





20
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Item12.   Certain Relationships and Related
Transactions





Except as
disclosed below, none of our directors or executive officers, nor any proposed
nominee for election as a director, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction since our incorporation or in any presently proposed transaction
which, in either case, has or will materially affect us.





On
February 15, 2006, we acquired a 33 1/3% tenant-in-common interest in property
located at 12202 North Scottsdale Road, Phoenix, Arizona 85054. We acquired
our interest for $200,000 from Ms. Jan Wallace, our officer and director, who
holds the remaining 66 2/3% ownership in the property.





On
October 25, 2007, we signed an agreement conveying our 53.8% membership interest
in Diversified Commercial Brokers, LLC (“DCB”) to the Sutterfield Family Trust
and Wayne Sutterfield (together, “Sutterfield”). Mr. Sutterfield is a former
director of the company. The primary asset of DCB is an 8,685 square foot office
building located at 5030 Campus Drive in Newport Beach, California 92660 (the
“Campus Property”). In exchange for the sale of our membership interest in DCB,
we received: (a) an indemnity on certain obligations pertaining to the Campus
Property, including a ground lease, first and second trust deeds, and property
taxes; and (b) a release from Sutterfield on any debt we owe, including two
promissory notes in the principal amount of $138,630.32 and all accrued interest
thereon.




Item13.   Exhibits





Exhibit
      Number
            Description3.1
            Articles
      of Incorporation, as amended (1)3.2
            By-laws,
      as amended (1)10.1
            Promissory Note31.1
            Certification of Chief Executive Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200231.2
            Certification of Chief Financial Officer pursuant to
      Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232.1
            Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of
  2002





(1)
            Previously
      filed with the Securities and Exchange
  Commission.




Item 14.   Principal Accountant Fees and
Services





Audit
Fees





The
aggregate fees billed by our auditors for professional services rendered in
connection with a review of the financial statements included in our quarterly
reports on Form 10-QSB and the audit of our annual consolidated financial
statements for the fiscal years ended December 31, 2007 and December 31, 2006
were approximately $20,500 and $9,500 respectively.





Audit-Related
Fees





Our
auditors did not bill any additional fees for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements.





Tax
Fees





The
aggregate fees billed by our auditors for professional services for tax
compliance, tax advice, and tax planning were $0 and $13,465 for the fiscal
years ended December 31, 2007 and 2006.





All
Other Fees





The
aggregate fees billed by our auditors for all other non-audit services, such as
attending meetings and other miscellaneous financial consulting, for the fiscal
years ended December 31, 2007 and 2006 were $0 and $0 respectively.


21
 Table of Contents




SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.





Secured Diversified Investment,
      Ltd.By:
              /s/
      Munjit JohalMunjit
      Johal
                Chief
      Executive Officer, President, and Director
                April
      14, 2008


In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:




By:
            /s/
      Jan Wallace
            By:
            /s/
      Munjit JohalJan
      Wallace
              Director
              April
      14,
      2008
            
            Munjit
      Johal
              Director
              April 14,
      2008