UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





o     ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
fiscal year ended





OR





ý    TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934





For the
transition period from December 31, 2008 to April 30, 2009





Commission
file number:  0-25429





Diversified
Product Inspections, Inc.


(Exact
name of registrant as specified in its charter)





Delaware
            
            56-3087128(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)





c/o
      Williams, Williams, Ratner and Plunkett,
                PC
                380
      North Old Woodward Ave.
                Suite
      300
                Birmingham,
      Michigan
              
              48009(Address
      of principal executive offices)
              
              (Zip
      Code)





Registrant’s
telephone number, including area code:  (248)
530-0725




Securities
registered pursuant to Section 12(b) of the Act:




Title
      of each class
              
              Name
      of each exchange on which registered




Securities
registered pursuant to Section 12(g) of the Act:  Common
Stock





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes  ̈No  x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.


Yes  ̈No  x





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 xNo   ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).


Yes  ̈No   ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.   ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large accelerated filer o
              Accelerated filer oNon-accelerated filer o (Do not check if a smaller reporting company)
              Smaller
      reporting company ý





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  ̈No  x





As of
June 30, 2008, the aggregate market value of the registrant’s common stock held
by non-affiliates of the registrant was $136,352 based on the closing price of
such stock on June 30, 2008.  For purposes of the computation we
consider all directors, management and holders of 10% or more of our common
stock to be affiliates. Therefore, the number of shares of our common stock held
by non-affiliates as of June 30, 2008 was 5,244,293. The registrant has no
outstanding non-voting stock.





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date.





Class
              
              Outstanding
      at July 20, 2009Common
      Stock, $0.0001 par value per share
              
              19,890,047
      shares





DOCUMENTS
INCORPORATED BY REFERENCE





Document
                
                Parts Into Which
    Incorporated





APPLICABLE
ONLY TO ISSUERS INVOLVED IN


BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS


(insert
after disclosure of aggregate market value of securities as of last day of
second fiscal quarter):





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.


Yes  ̈No  ̈








INDEX





PART
      I
                
                
                1Item
      1.
                Business.
                
                1Item
      1A.
                Risk
      Factors.
                
                5Item
      1B.
                Unresolved
      Staff Comments.
                
                11Item
      2.
                Properties.
                
                11Item
      3.
                Legal
      Proceedings.
                
                11Item
      4.
                Submission
      of Matters to a Vote of Security Holders.
                
                11PART
      II
                
                
                12Item
      5.
                Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
                
                12Item
      6.
                Selected
      Financial Data.
                
                13Item
      7.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation.
                
                13Item
      7A.
                Quantitative
      and Qualitative Disclosures About Market Risk.
                
                17Item
      8.
                Financial
      Statements and Supplementary Data.
                
                17Item
      9.
                Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
                
                17Item
      9A.
                Controls
      and Procedures.
                
                17Item
      9A(T)
                Controls
      and Procedures.
                
                18Item
      9B.
                Other
      Information.
                
                20PART
      III
                
                
                21Item
      10.
                Directors,
      Executive Officers and Corporate Governance.
                
                21Item
      11.
                Executive
      Compensation.
                
                22Item
      13.
                Certain
      Relationships and Related Transactions, and Director
      Independence.
                
                26PART
      IV
                
                
                28Item
      15.
                Exhibits,
      Financial Statement Schedules.
                
                28SIGNATURES
                
                
                30


i


FORWARD
LOOKING STATEMENTS





This
Report contains forward-looking statements within the meaning of the Private
Securities Reform Act of 1995 including  the adequacy of our working
capital and our acquisition plans.  In addition to these statements,
trend analyses and other information including words such as “seek,”
“anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend” and other
similar expressions are forward looking statements. These statements are based
on our beliefs as well as assumptions we made using information currently
available to us. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise. Because these statements reflect our current views
concerning future events, these statements involve risks, uncertainties, and
assumptions. Actual future results may differ significantly from the results
discussed in the forward-looking statements.  We anticipate that some
or all of the results may not occur because of factors which we discuss in the
“Risk Factors” section.




PART
I




Item
      1.
            Business.




General





Diversified
Product Inspections, Inc. (the “Company”) was incorporated in Florida on April
23, 1998 and reincorporated in Delaware on December 12, 2008.  The
Company maintained operations as described below until closing a Settlement and
Asset Purchase Agreement (the “Agreement”) and was a shell corporation with no
assets, revenues or operations until the acquisition of a condominium unit on
July 28, 2009.  The purchase of this condominium unit initiated our
planned new business operations directed at purchasing income-producing
residential real estate apartment homes, condominiums and houses in the State of
Michigan, where we believe favorable investment opportunities exist based on
current market conditions.


1


Recent
Developments




Settlement Agreement and
Asset Purchase Agreement




On April
30, 2009 we ceased operations and closed the Agreement pursuant to which
$230,000 was paid to a plaintiff to settle material litigation, and our
remaining assets and liabilities were transferred to a separate entity owned by
the previous executive officers of the Company.


Prior to
the closing of the Agreement, the Company specialized in conducting
investigations and laboratory analysis of a wide variety of products to
determine the cause and origin of product failures.  The Company’s
primary customers consisted of national insurance companies that were interested
in subrogating claims to recover losses.  Subrogation is a legal
principle, which provides that, to the extent an insurer has paid for a loss,
the insurer receives the policyholder’s right to recover from any third party
that caused the loss.  The Company is now controlled by the former
plaintiffs in the now settled litigation.





Amendments to our Articles
of Incorporation




On July
8, 2009, the Company filed a Certificate of Amendment to the Certificate of
Incorporation increasing the number of authorized shares of common stock from
50,000,000, par value $.01 per share to 250,000,000, par value $.0001 per
share.  The Certificate of Amendment also authorized the issuance of
10,000,000 shares of a new class of preferred stock, par value $.0001 per share,
with such rights, preferences and limitations as the Board of Directors may
designate.




On July
23, 2009, the Company filed a Certificate of Ownership in the State of Delaware
providing for the merger of its wholly-owned subsidiary, ProGreen Properties,
Inc. into the Company, and in this merger changing the name of the Company from
Diversified Product Inspections, Inc. to ProGreen Properties,
Inc.  The change of the Company’s name to ProGreen Properties, Inc.
will not become effective until it is approved by the Financial Industry
Regulatory Authority as effective for trading purposes in the OTC Bulletin Board
market.


2


Stock
Subscription




On July
22, 2009, we entered into a Subscription Agreement with EIG Venture Capital,
Ltd. (“EIG”), an investment company controlled by Jan Telander, our Chief
Executive Officer and controlling stockholder for the sale by the Company to EIG
of an aggregate of  97,751,710 shares of the Company’s Common Stock,
par value $0.0001 per share (the “Common Stock”), at a fixed price of $0.01023
per share, in three tranches: (1) the Phase I tranche consisted of 5,767,350
shares of Common Stock for a total purchase price of $59,000, to be purchased by
the EIG on or before July 16, 2009; (2)  the Phase II tranche consists
of 43,108,504 shares of Common Stock for a total purchase price of $441,000, to
be purchased by the EIG on or before December 31, 2009; and the Phase III
tranche consists of 48,875,855 shares of Common Stock for a total purchase price
of $500,000 to be purchased by the EIG on or before July 16, 2010. The shares
compromising each of the tranches in Phases I through III may be purchased in
one or more installments by the EIG; provided, that the number of shares
required to be purchased in each tranche is purchased in its entirety by the
final purchase date specified for the entire tranche.  EIG has
completed its purchase of the first tranche of 5,767,350 shares.




Our Planned
Business





Our plan
is to purchase income-producing residential real estate apartment homes,
condominiums and houses where we believe favorable investment opportunities
exist based on market conditions at the time of the investment. We are initially
concentrating on the Michigan market, and on July 28, 2009, have purchased our
initial property, a condominium located in Oakland County, Michigan. Our cost
was approximately $52,000; we paid cash rather than incur mortgage
debt.


3





We will
have to raise additional capital to purchase residential properties. We have no
third party commitments for the capital we will require for these planned
investments. Despite the very challenging economic conditions, we believe this
is a good time to purchase income producing residential properties for the
rental market. Our investment objectives are to acquire properties that will
generate stable rental cash flow and, over time, result in capital appreciation
if, as and when the housing market improves. Although real estate investing is
marked by its cycles, there can be no assurances that the housing market in
general and the market in the greater Detroit, Michigan area will improve in the
future.





We expect
to own each property separately through a wholly-owned limited liability company
for that particular property. This will permit us to limit our risk by isolating
risks relating to a particular property solely to that property. Our property
management strategy will be to deliver quality services, thereby promoting
tenant satisfaction, maintaining high tenant retention, and enhancing the value
of each of our operating real estate assets through eco-friendly
improvements.





In
analyzing the potential development of a particular project, we evaluate the
geographic, demographic, economic, and financial data, including:


·
            Households,
      population and employment growth;


·
            Prevailing
      rental and occupancy rates in the market area, and possible growth in
      those rates; and


·
            Location
      of the property in respect to schools and public
      transportation.





Environmental and Other Regulatory
Matters




Under
various federal, state, and local laws and regulations, an owner of real estate
is liable for the costs of removal or remediation of hazardous or toxic
substances on the property. Those laws often impose liability without regard to
whether the owner knew of, or was responsible for, the presence of the hazardous
or toxic substances. The costs of remediation or removal of the substances may
be substantial, and the presence of the substances, or the failure to remediate
the substances promptly, may adversely affect the owner’s ability to sell the
real estate or to borrow using the real estate as collateral.


4


Insurance





We will
carry comprehensive property, general liability, fire, and extended coverage on
all of our existing properties, with policy specifications, insured limits, and
deductibles customarily carried for similar properties.





Item
1A.     Risk Factors.




Investing in our common stock involves
a high degree of risk. You should carefully consider the following risk factors
before deciding whether to invest in the Company. Additional risks and
uncertainties not presently known to us, or that we currently deem immaterial,
may also impair our business operations or our financial condition. If any of
the events discussed in the risk factors below occur, our business, consolidated
financial condition, results of operations or prospects could be materially and
adversely affected. In such case, the value and marketability of the common
stock could decline.





Risks
Relating to Our Business




Because
we have a limited operating history to evaluate our company, the likelihood of
our success must be considered in light of the problems, expenses, difficulties,
complications and delay frequently encountered by a new company.





We were a
shell company since the closing of the Agreement on April 30, 2009 until our
initial purchase of the condominium discussed above on July 28, 2009 in pursuit
of our new business plan. Since we have a limited operating history, we cannot
assure you that our business will be profitable or that we will ever generate
sufficient revenues to meet our expenses and support our anticipated activities.
Start-up companies often are unsuccessful and encounter unanticipated expenses
and difficulties, investors should consider this risk in determining whether to
purchase or sell our common stock.


5


If
we need additional capital to fund our growing operations, we may not be able to
obtain sufficient capital and may be forced to limit the scope of our
operations.




The
severe recession, freezing of the global credit markets and the decline in the
stock market which continues to affect smaller companies like us may adversely
affect our ability to raise capital if we need additional working
capital.Because we have not reported profitable operations to date, we may need
to raise working capital. If adequate additional financing is not available on
reasonable terms or at all, we may not be able to undertake expansion, and we
will have to modify our business plans accordingly. Even if
we do find a source of additional capital, we may not be able to negotiate terms
and conditions for receiving the additional capital that are acceptable to us.
Any future capital investments will dilute or otherwise materially and adversely
affect the holdings or rights of our existing shareholders. In addition, new
equity or convertible debt securities issued by us to obtain financing could
have rights, preferences and privileges senior to our common stock. We cannot
give you any assurance that any additional financing will be available to us, or
if available, will be on terms favorable to us.




Because our business plan is to
acquire residential housing, we are subject to all of the risks which affect
residential real estate including the current severe decline




Real
property investments are subject to varying degrees of risk and are relatively
illiquid. Several factors may adversely affect the economic performance and
value of our property and any properties acquired in the future. These factors
include changes in the national, regional and local economic climates, local
conditions such as, the attractiveness of our properties to residents,
competition from other available property owners and changes in market rental
rates. Our performance also will depend on our ability to collect rent from
residents and to pay for adequate maintenance, insurance and other operating
costs, including real estate taxes, which could increase over time. Sources of
labor and materials required for maintenance, repair, capital expenditure or
development may be more expensive than anticipated. Also, the expenses of owning
and operating a property are not necessarily reduced when circumstances such as
market factors and competition cause a reduction in income from the
property.


6


Because real estate properties are
illiquid and may be difficult to sell, particularly in a poor market environment
like the present, we face future difficulties in selling these properties and
may not be able to sell them at a profit.





Real
estate investments are relatively illiquid, which limits our ability to react
quickly to adverse changes in economic or other market conditions. Our ability
to dispose of assets in the future will depend on prevailing economic and market
conditions. The current credit crunch may make it particularly difficult to sell
our properties, because interested buyers may be unable to obtain the financing
they need. We may be unable to sell our properties when we would prefer to do so
to raise capital we need to fund our planned development and construction
program or to fund distributions to investors.





As a company investing in residential
real estate, we face leasing risks in our proposed residential real estate
investment program.





Our
success will depend in part on leasing to residents or tenants with acceptable
terms. If our residential apartment homes, condominiums or houses are not leased
on schedule and on the expected terms and conditions, the returns on the
property could be adversely affected. Whether or not residential tenants are
willing to enter into leases on the terms and conditions we project and on the
timetable we expect will depend on a large variety of factors, many of which are
outside our control.





Because
our business model is to acquire residential property in the Detroit, Michigan
area, we are subject to risks that affect that local area.





General
economic conditions and other factors beyond our control may adversely affect
real property income and capital appreciation in the greater Detroit market .
The current economic climate, punctuated by a slumping housing market and rapid
tightening of available credit, has resulted in a weak real estate market in
this area, and these conditions may continue or become more severe in the
future. In particular, unemployment is higher than  in other areas of
the United States.


7


Because of environmental laws, we may
have liability under environmental laws even though we did not violate these
laws.





Under
federal, state, and local environmental laws, ordinances, and regulations, we
may be required to investigate and clean up the effects of releases of hazardous
or toxic substances or petroleum products at our properties, regardless of our
knowledge or responsibility, simply because of our current or past ownership or
operation of the real estate. If environmental problems arise, we may have to
take extensive measures to remedy the problems, which could adversely affect our
cash flow and operating results. The presence of hazardous or toxic substances
or petroleum products and the failure to remediate that contamination properly
may materially and adversely affect our ability to borrow against, sell, or
lease an affected property. In addition, applicable environmental laws create
liens on contaminated sites in favor of the government for damages and costs it
incurs in connection with a contamination.





As an owner of real property, we will
face risks related to ownership including mold and Chinese
drywall.





Recently,
there have been a large number of lawsuits against owners and managers of
properties alleging personal injury and property damage caused by the presence
of mold in real estate. Some of these lawsuits have resulted in substantial
monetary judgments or settlements. We cannot provide any assurance that we will
be able to obtain insurance coverage in the future for mold-related claims at a
commercially reasonable price or at all. The presence of significant mold could
expose us to liability to residents, tenants, and others if allegations
regarding property damage, health concerns, or similar claims arise. Remediation
of mold is expensive  and involves hiring a specialty contractor and
may involve extensive renovations, which costs can not be passed on to tenants.
Additionally, although still evolving, drywall from China has posed a major
health risk and has rendered homes uninhabitable. This problem is relatively new
and still evolving. We do not know if it will affect properties in our target
market. If it affects properties we acquire, we will incur substantial
remediation costs and the loss of income.


8


Failure to comply with the Americans
with Disabilities Act or other similar laws could result in substantial
costs.





A number
of federal, state, and local laws and regulations (including the Americans with
Disabilities Act) may require modifications to existing buildings or restrict
certain renovations by requiring improved access to such buildings by disabled
persons and may require other structural features that add to the cost of
buildings under construction. Legislation or regulations adopted in the future
may impose further burdens or restrictions on us with respect to improved access
by disabled persons. The costs of compliance with these laws and regulations may
be substantial, which could have a material adverse effect on our results of
operation.





Risks
Related to Our Common Stock




Since
we expect to incur expenses in excess of revenues for the near future, we may
not become profitable and your investment may be lost.





We expect
to incure losses for the foreseeable future.  We have not had revenues
since the Agreement which closed on April 30, 2009, and may never be profitable,
or, if we become profitable, we may be unable to sustain
profitability.  As a result, your investment in our securities may be
lost.





We
may issue preferred stock without the approval of our stockholders with
features, which could make it more difficult for a third party to acquire us and
could depress our Common Stock price.





In the
future, our board of directors may issue one or more series of preferred stock
that has more than one vote per share without a vote of our stockholders. This
can prevent a third party from acquiring us even when it is in our stockholders’
best interests and reduce the price of our Common Stock.


9





Because
the market for our common stock is limited, persons who purchase our common
stock may not be able to resell their shares at or above the purchase price paid
by them.





Our
common stock trades on the Over-the-Counter Bulletin Board which is not a liquid
market. There is currently only a limited public market for our common stock. We
cannot assure you that an active public market for our common stock will develop
or be sustained in the future. If an active market for our common stock does not
develop or is not sustained, the price may continue to decline.





Because
we are subject to the “penny stock” rules, brokers cannot generally solicit the
purchase of our common stock which adversely affects its liquidity and market
price.





The
Securities and Exchange Commission or SEC has adopted regulations which
generally define “penny stock” to be an equity security that has a market price
of less than $5.00 per share, subject to specific exemptions. The market price
of our common stock on the Bulletin Board has been substantially less than $5.00
per share and therefore we are currently considered a “penny stock” according to
SEC rules. This designation requires any broker-dealer selling these securities
to disclose certain information concerning the transaction, obtain a written
agreement from the purchaser and determine that the purchaser is reasonably
suitable to purchase the securities.





Due
to factors beyond our control, our stock price may be volatile.





The
market price for our Common Stock has been highly volatile at
times.  As long as the future market for our Common Stock is limited,
investors whol purchase our Common stock may only be able to sell them at a
loss.


10





Because
we may not be able to attract the attention of major brokerage firms, it could
have a material impact upon the price of our common stock.





It is not
likely that securities analysts of major brokerage firms will provide research
coverage for our common stock since the firm itself cannot recommend the
purchase of our common stock under the penny stock rules referenced in an
earlier risk factor. The absence of such coverage limits the likelihood that an
active market will develop for our common stock. It may also make it more
difficult for us to attract new investors at times when we acquire additional
capital.




Item
      1B.
            Unresolved
      Staff Comments.




None.




Item
      2.
            Properties.




We do not
currently have a physical principal office as all correspondence is temporarily
ran through our corporate attorneys at c/o Williams, Williams, Ratner and
Plunkett, PC, 380 North Old Woodward Ave., Suite 300 Birmingham, Michigan
48009.




Item
      3.
            Legal
      Proceedings.




The previously disclosed litigation
brought against the Company by its current sole officer and director was settled
as of April 30, 2009 as part of the closing of the Agreement. Final dismissal
occurred in May 2009.




Item
      4.
            Submission
      of Matters to a Vote of Security
Holders.




On March 26, 2009, our shareholders
approved the Agreement, which permitted us to complete the asset sale, permit
the litigation to be settled and effect a change in our control. The details of
the shareholder vote were disclosed in our Form 10-Q for the quarter ended March
31, 2009, which is incorporated by reference.


11


PART
II




Item
      5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.




Our
common stock is quoted on the Over-the-Counter Bulletin Board under the symbol
DPRI. The following table provides the high and low bid price information for
our common stock for the periods indicated as reported by the Bulletin
Board.  The last reported sale price of our common stock as reported
by the Bulletin Board on July 1, 2009 was $0.031 per share.  As of
that date, there were 530 record holders.





Year
                      
                      Quarter Ended
                      
                      Bid PricesHigh
                      
                      
                      Low2009
                      
                      March
      31, 2009
                      
                      $
                      0.04
                      
                      
                      $
                      0.01April
      30, 2009
                      
                      $
                      0.06
                      
                      
                      $
                      0.012008
                      
                      March 31,
      2008
                      
                      $
                      0.05
                      
                      
                      $
                      0.03June 30,
      2008
                      
                      $
                      0.04
                      
                      
                      $
                      0.041September 30,
      2008
                      
                      $
                      0.04
                      
                      
                      $
                      0.35December 31,
      2008
                      
                      $
                      0.04
                      
                      
                      $
                      0.0322007
                      
                      March 31,
      2007
                      
                      $
                      0.05
                      
                      
                      $
                      0.03June
      30, 2007
                      
                      $
                      0.09
                      
                      
                      $
                      0.041September
      30, 2007
                      
                      $
                      0.041
                      
                      
                      $
                      0.035December
      31, 2007
                      
                      $
                      0.036
                      
                      
                      $
                      0.032





Dividend
Policy




We have
not paid any cash dividends on our common stock and do not plan to pay any such
dividends in the foreseeable future. We currently intend to use all available
funds to develop our business. We can give no assurances that we will ever have
excess funds available to pay dividends.


12





Recent
Sales of Unregistered Securities




We have
sold securities without registration under the Securities Act of 1933 in
reliance upon the exemption provided in Section 4(2) and Rule 506
thereunder described below.





Name or Class of
                                        Investor
                                      
                                      Date Sold
                                      
                                      Title of
                                        Security
                                      
                                      No. of Securities
                                      
                                      Offering PriceEIG
      Venture Capital, Ltd.
                                      
                                      July
      21, 2009
                                      
                                      Common
      Stock
                                      
                                      
                                      5,767,350
                                      
                                      $0.01023
      per
share





There
were no issuances or repurchases by the Company of equity securities of the
Company during the transition period ended April 30, 2009.




Item
      6.
            Selected
      Financial Data.




Not required for smaller reporting
companies.




Item
      7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operation.




Company
Overview




We were
inactive from April 30, 2009 through July 28, 2009 when we acquired a
condominium unit in suburban Detriot, Michigan.  We plan to focus our
efforts on acquiring additional residential real estate properties in Michigan
where the severe economic conditions present what we believe is an undervalued
opportunity.  We believe that once the recession ends, improved local
conditions will lead to appreciation in the real estate
market.  Pending resale, our goal is to acquire properties that can be
rented with positive cash flow.





Our primary expenses relate to our
reporting obligations under the Securities Exchange Act of 1934 (“Exchange
Act”), any costs relating to maintaining our current condominium investment
including taxes and insurance and expenses related to the future acquisition of
additional properties.




We currently have no
employees.  Our management expects to confer with consultants,
attorneys and accountants as necessary.


13





Critical
Accounting Estimates





Our significant accounting policies
during the periods presented are discussed in Note 1 to the financial
statements.  These relate to our former business and may not be
applicable in the future.  We consider the following accounting
policies to have been the most critical:





·
            Revenue
      Recognition - We recognized inspection report revenue when the earnings
      process was complete, which was typically after an investigation had been
      completed and the final written report had been reviewed and approved by
      management and submitted to the customer. Once the final report had
      been approved by management and submitted to the customer, the we had no
      further obligation to the customer in regards to this matter. Storage
      fee revenue was recognized on a pro-rata basis as
  earned.





·
            Stock
      Options – We account for our stock options under the fair value
      recognition provisions of Financial Accounting Standards Board Statement
      No. 123(R),Share-Based Payment(“FAS 123(R)”), using the modified-prospective-transition method.
      Under that transition method, compensation costs recognized include: (a)
      compensation cost for all share-based payments granted prior to, but not
      yet vested as of January 1, 2006, based on the grant date fair value
      estimated in accordance with the original provisions of FAS 123, and (b)
      compensation cost for all share-based payments granted subsequent to
      January 1, 2006, based on the grant-date fair value estimated in
      accordance with the provisions of FAS
  123(R).




·
            Property
      and Equipment - Our property and equipment is recorded at cost and
      depreciation is computed using the straight-line method over the estimated
      useful lives of the assets. We charge repairs and maintenance to expense
      as it is incurred.




14




·
            Estimates
      - The preparation of financial statements required us to make estimates
      and judgments that affect the reported amounts of assets and liabilities
      and the disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reported periods. We based our estimates and judgments on
      historical experience and on various other factors that we believe to be
      reasonable under the circumstances, the results of which form the basis
      for making judgments about the carrying values of assets and liabilities
      that are not readily apparent from other sources. There can be no
      assurances that actual results will not differ from those estimates. On an
      ongoing basis, we will evaluate our accounting policies and disclosure
      practices as necessary.


Results of
Discontinued Operations





Results
of Operations for the Four Month Transition Period Ended April 30, 2009 as
Compared to Four Months Ended April 30, 2008





Our
revenues increased from $767,070 for the four months ended April 30, 2008 to
$924,024 for the four months ended April 30, 2009, or by 20.5% due to our
performing more engineering investigations over the same period in 2008,
continuing our trend of the second half of calendar 2008.





Our total
operating expenses for the three months ended April 30, 2009, were $1,029,930,
an increase of $209,698, or 25.6% compared to the same period in
2008.  Salary expense increased $40,156 or 8.5%, primarily due to
additional employees needed to support additional investigations.  Our
professional fees increased $126,437 or 93.4%, mainly due to professional fees
related to the Agreement discussed above.  Our other general and
administrative expenses increased by $51,908 or 43.2% due to additional costs to
support higher revenue levels and timing of bad debt recognition.





Net loss
for the four months ended April 30, 2009 was $118,888 or $0.01 per share
compared to a net loss of $37,973 or less than $0.01 per share for the four
months ended April 30, 2008, mainly reflecting our increased professional fees
offset somewhat by our increase in revenues.




15


Results
of Operations for the Fiscal Year Ended December 31, 2008 as Compared to the
Fiscal Year Ended December 31, 2007




Our revenues for 2008 increased
$161,239 or 6.4% to $2,682,640 from $2,521,401 in 2007. This increase reflects
our continuance of increased sales levels over the past three years. The
increases were due to our performing more engineering investigations offset
somewhat by the absence of use agreement revenue in 2008.





Our total operating expenses for 2008
were $2,519,009, a slight increase of $6,299 or 0.3% compared to
2007.  Our salary expense increased by $61,810, or 4.0%, primarily due
to compensation raises and additional employees in 2008 to support increased
revenues, offset by lower bonuses in 2008.  Other general and
administrative expenses decreased by $60,856 or 12.8%, primarily due to lower
discretionary spending on office supplies and maintenance purchases in
2008.





Other income and expense variances are
mainly due to a $146,250 gain on the sale of 2.15 acres of vacant land in 2007,
along with the accrued settlement of a lawsuit for $250,000, more fully
described in Note 2 of our audited financial statements, that we recorded as a
liability in 2008.  During 2007 we had an unrelated lawsuit settlement
expense of $30,000.





Also, since, as more fully described in
Note 2 of our audited financial statements, following the April 30, 2009 closing
date of our Agreement, we have no assets and no
liabilities.  Therefore, at December 31, 2008, we recognized $369,010
of deferred tax expense mainly to fully reserve our net deferred tax assets, as
we cannot presently determine when we will be able to generate sufficient
taxable income to realize these deferred tax assets.





Net loss for 2008 was $480,810 or $0.02
per share compared to a 2007 net income of $44,750 or less than $0.01 per share
mainly reflecting our 2008 recognition of lawsuit settlement and deferred tax
expenses offset by our improved operating results.


16


Liquidity
and Capital Resources





We have
limited working capital.  EIG Venture Capital Ltd., a company
controlled by our Chief Executive Officer, has agreed to invest $1,000,000
through the purchase of 97,751,710 shares of common stock for $0.01023 per share
in three equal installments with the first installment paid in July 2009 and the
remaining installments due December 31, 2009 and July 16, 2010.





New
Accounting Pronouncements





Note 1 to the accompanying audited
Consolidated Financial Statements contained in this Report.





Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market
Risk.




Not required for smaller reporting
companies.




Item
      8.
            Financial
      Statements and Supplementary Data.




See pages
F-1 through F-7.





Item
      9.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.




Not applicable.




Item
      9A.
            Controls
      and Procedures.




Not applicable.


17


Item
      9A(T)
            Controls
      and Procedures.




We maintain disclosure controls and
procedures that are designed to ensure that information required to be disclosed
in our Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to our management to allow timely
decisions regarding required disclosure. Management necessarily applied its
judgment in assessing the costs and benefits of such controls and procedures,
which, by their nature, can provide only reasonable assurance regarding
management's control objectives.





In
connection with this report, our former chief executive officer, who was also
the chief financial officer, evaluated the effectiveness of the design and
operation of our disclosure controls and procedures. Based upon that evaluation
he concluded that our disclosure controls and procedures were not effective in
alerting him in a timely manner to information relating to the Company required
to be disclosed in this report.  However, as more fully described in
this transition report, on April 30, 2009, the Company closed on its Settlement
Agreement and Asset Purchase Agreement leaving the Company with no assets or
liabilities and no employees, and presently, with the lack of operations, the
current principal executive officer believes that the disclosure controls and
procedures in place are effective.





Management’s Report on
Internal Control Over Financial Reporting





Our management is responsible for
establishing and maintaining adequate internal control over financial reporting
as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:





(1)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of our assets;


18


(2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with U.S. GAAP, and
that our receipts and expenditures are being made only in accordance with the
authorization of our management and directors; and




(3)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our 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. Also, 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.




As of the end of the period covered by
this report, we conducted an evaluation, under the supervision and with the
participation of our former chief executive officer, who was also the chief
financial officer, of the effectiveness of our internal control over financial
reporting. In making this assessment, management used the framework set forth in
the report entitled Internal
Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission, or COSO. The COSO framework summarizes
each of the components of a company’s internal control system, including
(i) the control environment, (ii) risk assessment, (iii) control
activities, (iv) information and communication, and
(v) monitoring.





Based on
its evaluation of our disclosure controls and procedures, our management has
concluded that during the period covered by this report, such disclosure
controls and procedures were not effective and there was a material weakness in
our internal control over financial reporting. A material weakness is a
deficiency, or a combination of control deficiencies, in internal control over
financial reporting such that there is a reasonable possibility that a material
misstatement of the Company’s annual or interim financial statements will not be
prevented or detected on a timely basis.


19


The
material weakness mainly related to the lack of accounting staff that results in
a lack of segregation of duties and the absence of accounting technical
expertise necessary to maintain an effective internal control over financial
reporting including preparation of financial statements, footnotes and financial
data provided to the Company’s registered public accounting firm in connection
with the annual audit, and we do not have an audit committee.





In order
to mitigate this material weakness to the fullest extent possible, for the
period covered by this report, the Company engaged external assistance in the
recording of certain transactions and the preparation of all financial reports
included in our quarterly and annual financial statements. As more fully
described in this annual report, on April 30, 2009, the Company closed on its
Settlement Agreement and Asset Purchase Agreement leaving the Company with no
assets or liabilities and no employees.  Presently, with the lack of
operations, the current principal executive officer believes that the internal
controls and procedures in place are effective.




This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permits us to provide only management's report in this annual
report.




Item
      9B.
            Other
      Information.




None.


20


PART
III




Item
      10.
            Directors,
      Executive Officers and Corporate
Governance.





The following is a list of our
directors and executive officers. All directors serve one-year terms or until
each of their successors are duly qualified and elected. The officers are
elected by the Board of Directors.  There are no family relationships
among our directors or executive officers.





Name
                        
                        Age
                        
                        PositionJan
      Telander
                        
                        59
                        
                        Chief
      Executive Officer, Chief Financial Officer, Secretary and
      Treasurer





Director
Biography




Jan Telander  is the
Company’s sole officer and sole director.  He has been the president
of  EIG Venture Capital Ltd (“EVC”) since 2001.  EVC was
founded by Mr. Telander and two other family members as a private investment
company with an aim to purchase early stage companies and build these into
larger entities with a view to seek exit through public listing on a suitable
stock exchange.  From 2001 until May 31, 2008, Mr. Telander was a
member of the Board of Directors of Gas Turbine Efficiency, Inc., an EIG
portfolio company.  Mr. Telander also controls the other Plaintiffs in
the litigation which was settled as part of the closing of the
Agreement.





Audit
Committee





We do not
have an audit committee.




Audit
Committee Financial Expert




Not
Applicable.


21




Code
of Ethics




Since we
have no employees and only one officer and director, we have not adopted a code
of ethics.




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 10% of a registered class of our equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock and the other equity securities. Officers,
directors and 10% owners are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file.





Based
solely on a review of the copies of the forms filed with the SEC, we have
determined that Matthew Walters and Warren Wankelman, each of whom
were  directors of the Company through April 30, 2009, have not filed
their Form 4’s in relation to stock options that they each cancelled as part of
the Agreement.





Item
      11.
            Executive
      Compensation.




The
following information is related to the compensation paid, distributed or
accrued by us for the transition period from January 1, 2009 through April 30,
2009, and the fiscal years ended December 31, 2008 and December 31, 2007, to the
person who served as our Chief Executive Officer (principal executive officer)
through April 30, 2009.  No other executive officer of the Company or
any other person serving at the end of the last fiscal year received total
compensation exceeding $100,000.


22


2008
Summary Compensation Table





Name and
                                                Principal Position
                                              
                                              Year
                                              
                                              Salary
                                              
                                              
                                              Bonus
                                              
                                              
                                              Total(a)
                                              
                                              (b)
                                              
                                              ($)(c)
                                              
                                              
                                              ($)(d)
                                              
                                              
                                              ($)(j)John
      Van Zyll,CEO,CFO,Director
                                              
                                              April
      30,2009
                                              
                                              
                                              20,977
                                              
                                              
                                              
                                              
                                              
                                              
                                              20,977December
      31,2008
                                              
                                              
                                              69,108
                                              
                                              
                                              
                                              0
                                              
                                              
                                              
                                              69,108December
      31,2007
                                              
                                              
                                              71,435
                                              
                                              
                                              
                                              15,000
                                              
                                              
                                              
                                              86,435







Executive
Employment Agreements




For
purposes of this Report, the phrase “Named Executive Officer” refers to Mr. Van
Zyll.  All employment arrangements ended with the April 30, 2009
closing.  We currently have no employees and do not compensate our
sole officer and director.  Outstanding Equity Awards at Fiscal Year
End




Outstanding
Equity Awards at Fiscal Year End




There
were no outstanding equity awards held by our Named Executive Officer as of
April 30, 2009.




23


Director
Compensation





During
the fiscal year ended April 30, 2009, no director received any type of
compensation from our Company for serving as a director. No arrangements are
presently in place regarding compensation to directors for their services as
directors or for committee participation or special
assignments.


24


Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters





The
following table sets forth the number of shares of the Company’s common stock
beneficially owned as of July 17, 2009 by (i) those persons known by the Company
to be owners of more than 5% common stock, (ii) directors, (iii) Named Executive
Officer, and (iv) all executive officers and directors as a group:





Amount
      andNature
      ofName
      and
                              
                              Beneficial
                              
                              
                              Percent ofTitle
      of Class
                              
                              Address of Beneficial Owner
                              
                              Owner
                              
                              
                              ClassDirectors
      and Executive Officers:
                              
                              
                              
                              
                              13,985,797
                              
                              
                              
                              70.32
                              %Common
      Stock
                              
                              Jan
      Telander (1)All
      directors and executive officers  as a group
                              
                              
                              13,985,797
                              
                              
                              
                              70.32
                              %5%
      Shareholders:Common
      Stock
                              
                              EIG
      Capital Ltd.
                              
                              
                              13,834,597
                              
                              
                              
                              69.56
                              %








*
            Less
      than 1%


(1)            The
business address of Jan Telander is 380 North Old Woodard Ave., Suite300,
Birmingham, MI 48009. In addition to 151,200 shares owned directly, Mr. Telander
beneficially owns a total of 13,834,597 shares indirectly through EIG Capital,
Ltd., a controlled corporation. EIG Capital is the sole shareholder of EIG
Venture Capital, Ltd., EIG Capital Investments, Ltd. and Sofcon, Ltd., which own
directly 12,809,915, 270,100 and 754,582 shares of the Company’s Common Stock,
respectively. Mr. Telander is the President and a director of each of EIG
Venture Capital, Ltd., EIG Capital Investments, Ltd. and Sofcon, Ltd. and a
director of EIG Capital, Ltd. and may therefore be deemed to beneficially own
all of the securities owned by each of these entities.  This does not
include 91,984,360 shares to be issued to EIG Venture Capital Ltd. upon future
payment for Tranches II and III under the Subscription Agreement mentioned
above.


25


Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence.





As part of the Agreement, the Company
transferred substantially all of its assets to Diversified Product Inspections,
LLC, a Tennessee limited liability company controlled by the former management
of the Company (the “Buyer”), and the Buyer assumed all of the Company’s
liabilities.  At the same time, the plaintiffs in the pending
litigation dismissed the litigation against the Company and its
management.  Additionally, the former management sold 3,000,000 shares
of common stock for $300 to one of the plaintiffs, which is controlled by Jan
Telander.





On July
21, 2009 a company controlled by our Mr. Jan Telander, Chief Executive Officer
entered into a Subscription Agreement with the Company for the purchase of
97,751,710 shares of the Company’s common stock at a price of $0.01023 per share
to be purchased in three phases.  Phase one was paid in July, 2009 and
the remaining two payments will be made by December 31, 2009 and July 16,
2010.





26




Principal
Accountants Fees and Services





Coulter
      &
                  
                  
                  Coulter
      &
                  
                  
                  Coulter
      &Justus, P.C.
                  
                  
                  Justus, P.C.
                  
                  
                  Justus, P.C.Four
      Months
                  
                  
                  Fiscal
      Year
                  
                  
                  Fiscal
      YearEnded
      April
                  
                  
                  Ended
                  
                  
                  Ended30,
      2009
                  
                  
                  December
      31,
                  
                  
                  December2008
                  
                  
                  
                  31, 2008Audit
      Fees (1)
                  
                  $
                  34,713
                  
                  
                  $
                  66,824
                  
                  
                  $
                  47,073Audit
      Related Fees
                  
                  $
                  –
                  
                  
                  $
                  –
                  
                  
                  $
                  –Tax
      Fees  (2)
                  
                  $
                  2,847
                  
                  
                  $
                  4,074
                  
                  
                  $
                  4,363All
      Other Fees(3)
                  
                  $
                  –
                  
                  
                  $
                  –
                  
                  
                  $
                  322





(1)
            Audit
      fees – these fees relate to professional services rendered for the audit
      of the financial statements of the Company as of April 30, 2009, December
      31, 2008, and December 31, 2007, and reviews of the financial statements
      included in the Company’s Quarterly Reports on Form 10-QSB or Form 10-Q
      during such transitional period or fiscal years,
    respectively.


(2)
            Tax
      fees – these fees relate to tax flings, tax related compliance and other
      advisory services.


(3)
            All
      other fees – these fees relate an annual renewal fee for software provided
      to the Company.


27


PART
IV




Item
      15.
            Exhibits,
      Financial Statement Schedules.




(a)
Documents filed as part of the report.




(1) All
Financial Statements




(2)
Financial Statements Schedule




(3)
Exhibits




No.
                              
                              Description
                              
                              Incorporated
      By Reference2.1
                              
                              Share
      Exchange with Diversified Product Inspections, Inc., a Florida
      corporation
                              
                              Form
      8-K filed March 6, 20013.1
                              
                              Certificate
      of Incorporation
                              
                              Form
      10-K filed March 31, 20093.2
                              
                              Certificate
      of Amendment to the Certificate of Incorporation
                              
                              Form
      8-K filed July 28, 20093.3
                              
                              Certificate
      of Ownership
                              
                              Form
      8-K filed July 28, 20093.4
                              
                              By
      Laws
                              
                              Form
      10-K filed March 31, 20093.5
                              
                              Agreement
      and Plan of Merger between the Company and Diversified Product
      Inspections, Inc., a Florida corporation
                              
                              Form
      10-K filed March 31, 20093.6
                              
                              Certificate
      of Merger of Diversified Product Inspections, Inc., a Florida corporation
      filed into the Company filed with the Florida Secretary of
      State
                              
                              Form
      10-K filed March 31, 20093.7
                              
                              Certificate
      of Merger of Diversified Product Inspections, Inc., a Florida corporation
      filed into the Company filed with the Delaware Secretary of
      State
                              
                              Form
      10-K filed March 31,
2009




28




10.1
                            
                            Settlement
      and Asset Purchase Agreement dated September 30, 2009
                            
                            Contained
      as Annex A to the Schedule 14A filed on February 13,
  200910.2
                            
                            Bill
      of Sale
                            
                            Contained
      as Exhibit A to Annex A to the Schedule 14A filed on February 13,
      200910.3
                            
                            First
      Amendment to the Settlement and Asset Purchase Agreement dated September
      30, 2009
                            
                            Contained
      as Annex B to the Schedule 14A filed on February 13,
  200910.4
                            
                            Second
      Amendment to the Settlement and Asset Purchase Agreement dated September
      30, 2009
                            
                            Contained
      as Annex C to the Schedule 14A filed on February 13,
  200910.5
                            
                            Subscription
      Agreement with EIG Venture Capital, Ltd. dated July 21,
    2009
                            
                            Form
      8-K filed July 28, 200931.1
                            
                            Certification
      of Principal Executive and Financial Officer (Section 302)
                            
                            Filed
      with this Report32.1
                            
                            Certification
      of Principal Executive and Financial Officer (Section 906)
                            
                            Furnished
      with this Report99.1
                            
                            Mortgage
      Release
                            
                            Form
      10-Q filed May  , 200999.2
                            
                            Mortgage
      Release
                            
                            Form
      10-Q filed May  , 200999.3
                            
                            Acknowledgement
      of Payment of Line of Credit and Note
                            
                            Form
      10-Q filed May  ,
2009


29


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





Date:
August 13, 2009


Diversified
      Product Inspecitons, Inc.By:
                  /s/
      Jan TelanderJan
      TelanderChief
      Executive Officer (Principal
                    Executive
      Officer) and Chief Financial
                    Officer
      (Principal Financial
Officer)





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Signature
                  
                  Title
                  
                  Date/s/ Jan Telander
                  
                  Director
                  
                  August
      13, 2009Jan
      Telander


30


Diversified
Product Inspections, Inc.
 
 Financial
Statements
 
 April 30,
2009
 
 Index
to Financial Statements
 
 Report of Independent Registered Public Accounting
      Firm
                                F-1Audited
      Financial StatementsBalance
      Sheets as of April 30, 2009 and December 31, 2008 and 2007
                                F-2Statements
      of Operations for the four months ended April 30, 2009 and 2008
      (Unaudited), and the years ended December 31, 2008 and
2007
                                F-3Statements
      of Stockholders’ Equity for the four months ended April 30, 2009 and 2008
      (Unaudited), and the years ended December 31, 2008 and
2007
                                F-4Statements of Cash Flows for the four months ended April 30,
      2009 and 2008 (Unaudited), and the years ended December 31, 2008 and
      2007
                                F-6Notes
      to Financial Statements
                                F-7
  
 
 Report of
Independent Registered Public Accounting Firm
 
 The
Director and Stockholders
 Diversified
Product Inspections, Inc.
 
 We have
audited the accompanying balance sheets of Diversified Product Inspections, Inc.
(the “Company”), as of April 30, 2009, December 31, 2008 and December 31, 2007,
and the related statements of operations, stockholders’ equity and cash flows
for the four months ended April 30,
2009 and the years ended December 31, 2008 and December 31,
2007.  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 the standards of the Public Company
Accounting Oversight Board (United States of America).  Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  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 Diversified Product Inspections,
Inc. as of April 30, 2009, December 31, 2008 and December 31, 2007, and the
results of its operations and its cash flows for the four months ended April 30,
2009 and the years ended December 31, 2008 and December 31, 2007 in conformity
with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that Diversified
Product Inspections, Inc. will continue as a going concern. As discussed in Note
10 to the financial statements, the Company’s disposal of its operating business
raises substantial doubt about its ability to continue as a going concern.
Management’s plans concerning these matters are also discussed in Note 10 to the
financial statements. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
 
 August 4,
2009
 Knoxville,
Tennessee
  F-1
 
 Diversified
Product Inspections, Inc.
 
 Balance
Sheets
 
 April
      30
                                                  
                                                  
                                                  December
      31
                                                  
                                                  
                                                  December
      312009
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2007AssetsCash
                                                  
                                                  $
                                                  –
                                                  
                                                  
                                                  $
                                                  505,812
                                                  
                                                  
                                                  $
                                                  462,442Accounts
      receivable, net of reserve for doubtful accounts of $30,000 in 2008 and
      $50,000 in 2007
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  225,943
                                                  
                                                  
                                                  
                                                  276,482Note
      receivable
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  74,885
                                                  
                                                  
                                                  
                                                  –Deferred
      income taxes
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  369,010Prepaid
      expenses and other assets
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  32,615
                                                  
                                                  
                                                  
                                                  23,655Property
      and equipment:Land
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  96,250
                                                  
                                                  
                                                  
                                                  96,250Building
      and building improvements
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  757,645
                                                  
                                                  
                                                  
                                                  735,318Equipment,
      furniture and fixtures
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  359,940
                                                  
                                                  
                                                  
                                                  402,058Vehicles
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  132,949
                                                  
                                                  
                                                  
                                                  132,949–
                                                  
                                                  
                                                  
                                                  1,346,784
                                                  
                                                  
                                                  
                                                  1,366,575Less
      accumulated depreciation and amortization
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  430,437
                                                  
                                                  
                                                  
                                                  409,700Net
      property and equipment
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  916,347
                                                  
                                                  
                                                  
                                                  956,875Total
      assets
                                                  
                                                  $
                                                  –
                                                  
                                                  
                                                  $
                                                  1,755,602
                                                  
                                                  
                                                  $
                                                  2,088,464Liabilities
      and stockholders’ equityLiabilities:Accounts
      payable and accrued expenses
                                                  
                                                  $
                                                  –
                                                  
                                                  
                                                  $
                                                  60,026
                                                  
                                                  
                                                  $
                                                  78,423Accrued
      salaries
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  27,631
                                                  
                                                  
                                                  
                                                  28,783Accrual
      for settlement of lawsuit
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  250,000
                                                  
                                                  
                                                  
                                                  30,000Deferred
      revenue
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  130,000
                                                  
                                                  
                                                  
                                                  127,000Notes
      payable
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  715,237
                                                  
                                                  
                                                  
                                                  768,807Capital
      lease obligation
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  1,933Total
      liabilities
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  1,182,894
                                                  
                                                  
                                                  
                                                  1,034,946Stockholders’
      equity:Common
      stock:Par
      value—$0.01 per share
                                                    Authorized
      shares—50,000,000Issued
      and outstanding shares—13,645,990 in 2009 and 20,105,867 in 2008 and
      2007
                                                  
                                                  
                                                  136,460
                                                  
                                                  
                                                  
                                                  201,058
                                                  
                                                  
                                                  
                                                  201,058Additional
      paid-in capital
                                                  
                                                  
                                                  1,609,364
                                                  
                                                  
                                                  
                                                  1,998,586
                                                  
                                                  
                                                  
                                                  1,998,586Accumulated
      deficit
                                                  
                                                  
                                                  (1,745,824
                                                  )
                                                  
                                                  
                                                  (1,626,936
                                                  )
                                                  
                                                  
                                                  (1,146,126
                                                  )Net
      stockholders’ equity
                                                  
                                                  
                                                  –
                                                  
                                                  
                                                  
                                                  572,708
                                                  
                                                  
                                                  
                                                  1,053,518Total
      liabilities and stockholders’ equity
                                                  
                                                  $
                                                  –
                                                  
                                                  
                                                  $
                                                  1,755,602
                                                  
                                                  
                                                  $
                                                  2,088,464
 
 See
accompanying Notes to Financial Statements.
  F-2
  Diversified
Product Inspections, Inc.
 
 Statements
of Operations
 
 Four months ended
                        April 30
                      
                      
                      Year ended
                        December 312009
                      
                      
                      2008
                      
                      
                      2008
                      
                      
                      2007(Unaudited)Revenues:Inspections
                      
                      $
                      825,080
                      
                      
                      $
                      668,068
                      
                      
                      $
                      2,383,029
                      
                      
                      $
                      2,147,771Storage
      fees
                      
                      
                      98,944
                      
                      
                      
                      99,002
                      
                      
                      
                      299,611
                      
                      
                      
                      291,463Use
      agreement
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      82,167Total
      revenues
                      
                      
                      924,024
                      
                      
                      
                      767,070
                      
                      
                      
                      2,682,640
                      
                      
                      
                      2,521,401Operating
      expenses:Salaries
      and related benefits
                      
                      
                      514,125
                      
                      
                      
                      473,969
                      
                      
                      
                      1,607,200
                      
                      
                      
                      1,545,390Professional
      fees
                      
                      
                      261,755
                      
                      
                      
                      135,318
                      
                      
                      
                      255,815
                      
                      
                      
                      261,356Shipping
      and handling costs
                      
                      
                      60,957
                      
                      
                      
                      64,161
                      
                      
                      
                      168,105
                      
                      
                      
                      158,714Depreciation
      and amortization
                      
                      
                      21,044
                      
                      
                      
                      26,643
                      
                      
                      
                      74,638
                      
                      
                      
                      73,143Other
      general and administrative
                      
                      
                      172,049
                      
                      
                      
                      120,141
                      
                      
                      
                      413,251
                      
                      
                      
                      474,107Total
      operating expenses
                      
                      
                      1,029,930
                      
                      
                      
                      820,232
                      
                      
                      
                      2,519,009
                      
                      
                      
                      2,512,710Operating
      (loss) income
                      
                      
                      (105,906
                      )
                      
                      
                      (53,162
                      )
                      
                      
                      163,631
                      
                      
                      
                      8,691Other
      income (expense):Interest expense
                      
                      
                      (12,982
                      )
                      
                      
                      (15,844
                      )
                      
                      
                      (47,931
                      )
                      
                      
                      (49,944
                      )Rent income
                      
                      
                      –
                      
                      
                      
                      10,000
                      
                      
                      
                      22,500
                      
                      
                      
                      7,500Gain on sale of
    land
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      146,250Settlement of
      lawsuits
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      (250,000
                      )
                      
                      
                      (30,000
                      )Net
      other (expenses) income
                      
                      
                      (12,982
                      )
                      
                      
                      (5,844
                      )
                      
                      
                      (275,431
                      )
                      
                      
                      73,806(Loss)
      income before income taxes
                      
                      
                      (118,888
                      )
                      
                      
                      (59,006
                      )
                      
                      
                      (111,800
                      )
                      
                      
                      82,497Income
      tax benefit (expense):Current
      state income taxes
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      –
                      
                      
                      
                      (3,741
                      )Deferred
      income tax benefit (expense)
                      
                      
                      –
                      
                      
                      
                      21,033
                      
                      
                      
                      (369,010
                      )
                      
                      
                      (34,006
                      )Total
      income tax benefit (expense)
                      
                      
                      –
                      
                      
                      
                      21,033
                      
                      
                      
                      (369,010
                      )
                      
                      
                      (37,747
                      )Net
      (loss) income
                      
                      $
                      (118,888
                      )
                      
                      $
                      (37,973
                      )
                      
                      $
                      (480,810
                      )
                      
                      $
                      44,750(Loss)
      earnings per share:Basic
                      
                      $
                      (0.01
                      )
                      
                      $
                      0.00
                      
                      
                      $
                      (0.02
                      )
                      
                      $
                      0.00Diluted
                      
                      $
                      (0.01
                      )
                      
                      $
                      0.00
                      
                      
                      $
                      (0.02
                      )
                      
                      $
                      0.00
 
 See
accompanying Notes to Financial Statements.
  F-3
  Diversified
Product Inspections, Inc.
 
 Statements
of Stockholders’ Equity
 
 Number
      of
                    Shares
                    Issued
      and
                    Outstanding
                  
                  
                  Common
                    Stock
                  
                  
                  Additional
                    Paid-in
                    Capital
                  
                  
                  Accumulated
                    Deficit
                  
                  
                  Net
                    Stockholders’
                    EquityBalance
      at January 1, 2007
                  
                  
                  20,180,867
                  
                  
                  $
                  201,808
                  
                  
                  $
                  1,997,836
                  
                  
                  $
                  (1,190,876
                  )
                  
                  $
                  1,008,768Retired
      stock
                  
                  
                  (75,000
                  )
                  
                  
                  (750
                  )
                  
                  
                  750
                  
                  
                  
                  –
                  
                  
                  
                  –Net
      income for 2007
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  44,750
                  
                  
                  
                  44,750Balance
      at December 31, 2007
                  
                  
                  20,105,867
                  
                  
                  
                  201,058
                  
                  
                  
                  1,998,586
                  
                  
                  
                  (1,146,126
                  )
                  
                  
                  1,053,518Net
      loss for 2008
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  (480,810
                  )
                  
                  
                  (480,810
                  )Balance
      at December 31, 2008
                  
                  
                  20,105,867
                  
                  
                  
                  201,058
                  
                  
                  
                  1,998,586
                  
                  
                  
                  (1,626,936
                  )
                  
                  
                  572,708Stock
      canceled in settlement agreement
                  
                  
                  (6,459,877
                  )
                  
                  
                  (64,598
                  )
                  
                  
                  (389,222
                  )
                  
                  
                  –
                  
                  
                  
                  (453,820
                  )Net
      loss for four months ended April 30, 2009
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  (118,888
                  )
                  
                  
                  (118,888
                  )Balance
      at April 30, 2009
                  
                  
                  13,645,990
                  
                  
                  $
                  136,460
                  
                  
                  $
                  1,609,364
                  
                  
                  $
                  (1,745,824
                  )
                  
                  $
                  –
 
 See
accompanying Notes to Financial Statements.
  F-4
  Diversified
Product Inspections, Inc.
 
 Statements
of Stockholders’ Equity
 
 For the
Four Months Ended April 30, 2008 (Unaudited)
 
 Number
      of
                    Shares
                    Issued
      and
                    Outstanding
                  
                  
                  Common
                    Stock
                  
                  
                  Additional
                    Paid-in
                    Capital
                  
                  
                  Accumulated
                    Deficit
                  
                  
                  Net
                    Stockholders’
                    EquityBalance
      at January 1, 2008
                  
                  $
                  20,105,867
                  
                  
                  $
                  201,058
                  
                  
                  $
                  1,998,586
                  
                  
                  $
                  (1,146,126
                  )
                  
                  $
                  1,053,518Net
      loss
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  –
                  
                  
                  
                  (37,973
                  )
                  
                  
                  (37,973
                  )Balance
      at April 30, 2008
                  
                  $
                  20,105,867
                  
                  
                  $
                  201,058
                  
                  
                  $
                  1,998,586
                  
                  
                  $
                  (1,184,099
                  )
                  
                  $
                  1,015,545
 
 See
accompanying Notes to Financial Statements.
  F-5
  Diversified
Product Inspections, Inc.
 
 Statements
of Cash Flows
 
 Four
      months ended
                                                            April
      30
                                                          
                                                          
                                                          Year
      ended
                                                            December
      302009
                                                          
                                                          
                                                          2008
                                                          
                                                          
                                                          2008
                                                          
                                                          
                                                          2007(Unaudited)Operating
      activitiesNet
      (loss) income
                                                          
                                                          $
                                                          (118,888
                                                          )
                                                          
                                                          $
                                                          (37,973
                                                          )
                                                          
                                                          $
                                                          (480,810
                                                          )
                                                          
                                                          $
                                                          44,750Adjustments
      to reconcile net (loss) income to net cash
      (used in) provided by operating activities:Deferred
      income tax benefit
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          (21,033
                                                          )
                                                          
                                                          
                                                          369,010
                                                          
                                                          
                                                          
                                                          34,006Change
      in provision for bad debts
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          (20,000
                                                          )
                                                          
                                                          
                                                          (20,000
                                                          )
                                                          
                                                          
                                                          –Depreciation
                                                          
                                                          
                                                          21,044
                                                          
                                                          
                                                          
                                                          25,459
                                                          
                                                          
                                                          
                                                          72,862
                                                          
                                                          
                                                          
                                                          69,591Amortization
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          1,184
                                                          
                                                          
                                                          
                                                          1,776
                                                          
                                                          
                                                          
                                                          3,552Gain
      on sale of land
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          (146,250
                                                          )Changes
      in operating assets and liabilities:Accounts
      receivable
                                                          
                                                          
                                                          (58,201
                                                          )
                                                          
                                                          
                                                          120,066
                                                          
                                                          
                                                          
                                                          70,539
                                                          
                                                          
                                                          
                                                          9,991Note
      receivable
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          (74,885
                                                          )
                                                          
                                                          
                                                          –Prepaid
      expenses and other assets
                                                          
                                                          
                                                          (1,561
                                                          )
                                                          
                                                          
                                                          (20,003
                                                          )
                                                          
                                                          
                                                          (8,960
                                                          )
                                                          
                                                          
                                                          (15,741
                                                          )Accounts
      payable and accrued expenses
                                                          
                                                          
                                                          174,043
                                                          
                                                          
                                                          
                                                          11,676
                                                          
                                                          
                                                          
                                                          (18,397
                                                          )
                                                          
                                                          
                                                          20,630Accrued
      salaries
                                                          
                                                          
                                                          (1,804
                                                          )
                                                          
                                                          
                                                          (9,190
                                                          )
                                                          
                                                          
                                                          (1,152
                                                          )
                                                          
                                                          
                                                          7,008Accrual
      for settlement of lawsuit
                                                          
                                                          
                                                          (250,000
                                                          )
                                                          
                                                          
                                                          (30,000
                                                          )
                                                          
                                                          
                                                          220,000
                                                          
                                                          
                                                          
                                                          30,000Deferred
      revenue
                                                          
                                                          
                                                          (5,524
                                                          )
                                                          
                                                          
                                                          (11,000
                                                          )
                                                          
                                                          
                                                          3,000
                                                          
                                                          
                                                          
                                                          (31,333
                                                          )Net
      cash (used in) provided by operating activities
                                                          
                                                          
                                                          (240,891
                                                          )
                                                          
                                                          
                                                          9,186
                                                          
                                                          
                                                          
                                                          132,983
                                                          
                                                          
                                                          
                                                          26,204Investing
      activitiesProceeds
      from sale of land
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          200,000Purchases
      of property and equipment
                                                          
                                                          
                                                          (1,420
                                                          )
                                                          
                                                          
                                                          (10,478
                                                          )
                                                          
                                                          
                                                          (34,110
                                                          )
                                                          
                                                          
                                                          (95,206
                                                          )Net
      cash (used in) provided by investing activities
                                                          
                                                          
                                                          (1,420
                                                          )
                                                          
                                                          
                                                          (10,478
                                                          )
                                                          
                                                          
                                                          (34,110
                                                          )
                                                          
                                                          
                                                          104,794Financing
      activitiesProceeds
      from note payable
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          56,513Principal
      payments on notes payable and capital lease obligations
                                                          
                                                          
                                                          (55,615
                                                          )
                                                          
                                                          
                                                          (23,584
                                                          )
                                                          
                                                          
                                                          (55,503
                                                          )
                                                          
                                                          
                                                          (56,862
                                                          )Cash
      transferred in settlement agreement
                                                          
                                                          
                                                          (207,886
                                                          )
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –
                                                          
                                                          
                                                          
                                                          –Net
      cash used in financing activities
                                                          
                                                          
                                                          (263,501
                                                          )
                                                          
                                                          
                                                          (23,584
                                                          )
                                                          
                                                          
                                                          (55,503
                                                          )
                                                          
                                                          
                                                          (349
                                                          )Net
      (decrease) increase in cash
                                                          
                                                          
                                                          (505,812
                                                          )
                                                          
                                                          
                                                          (24,876
                                                          )
                                                          
                                                          
                                                          43,370
                                                          
                                                          
                                                          
                                                          130,649Cash
      at beginning of year
                                                          
                                                          
                                                          505,812
                                                          
                                                          
                                                          
                                                          462,442
                                                          
                                                          
                                                          
                                                          462,442
                                                          
                                                          
                                                          
                                                          331,793Cash
      at end of year
                                                          
                                                          $
                                                          –
                                                          
                                                          
                                                          $
                                                          437,566
                                                          
                                                          
                                                          $
                                                          505,812
                                                          
                                                          
                                                          $
                                                          462,442Supplemental
      disclosures of cash flow informationCash
      paid for interest
                                                          
                                                          $
                                                          12,982
                                                          
                                                          
                                                          $
                                                          15,844
                                                          
                                                          
                                                          $
                                                          47,931
                                                          
                                                          
                                                          $
                                                          49,944
 See
accompanying Notes to Financial Statements.
  F-6
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements
 
 April 30,
2009
 
 1.
Significant Accounting Policies
 
 Description
of Business
 
 As more
fully described in Note 2, on April 30, 2009, Diversified Product Inspections,
Inc. (the “Company”) ceased operations and closed on the Settlement Agreement
and Asset Purchase Agreement (the “Agreement”) pursuant to which $250,000 was
paid to settle material litigation.  The remaining assets and
liabilities were transferred to a separate entity owned by the previous
executive officers of the Company.
 
 As a
shell corporation controlled by the former plaintiffs in the now settled
litigation, the current officer and director of the Company expects to make one
or more acquisitions in order to seek to provide shareholdervalue. He may or may not
have an interest in any future companies acquired by the Company. There can be
no assurances any acquisitions will be consummated or, if they are,
successful.
 
 Many of
the following disclosures relate to our prior business and have no relevance to
our current or future operations.
 
 During
the periods presented, the Company specialized in conducting investigations and
laboratory analysis of a wide variety of products to determine the “cause and
origin” of product failures.  The Company’s primary customers
consisted of national insurance companies that were interested in subrogating
claims to recover losses.  Subrogation is a legal principle which
provides that, to the extent an insurer has paid for a loss, the insurer
receives the policyholder’s right to recover from any third party that caused
the loss.  The Company accumulated a large database of known defective
products that included photos and other documentation that were used in their
investigations.  After an investigation was completed, the Company
issued an inspection report related to the product failure.  The
Company also provided storage of the evidence collected during the
investigation, until it was requested by the customer to be
disposed.
 
 Change
in Fiscal Year
 
 On April
30, 2009, the Company’s Board of Directors approved a change in the Company’s
fiscal year end from December 31 to April 30 in order to better align the
Company’s future operations and financial results with the closing date of its
Agreement as more fully described in Note 2.
 
 Major
Customers and Credit Concentration
 
 During
the periods presented, the Company’s largest customers were national insurance
customers.  During the four months ended April 30, 2009 and 2008, and
the years ended December 31, 2008 and 2007, revenues from the largest of these
individual customers accounted for approximately 29%, 13% and 11%; 21%, 13% and
12% (Unaudited); 23%, 13% and 10%; and 17% and 14%, of total revenues,
respectively.
  F-7
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 1.  Significant
Accounting Policies (continued)
 
 Legal
Costs
 
 Legal
costs associated with loss contingencies are expensed as incurred.
  Advertising
Costs
 
 Advertising
costs are expensed as incurred and the four months ended April 30, 2009 and
2008, and the years ended December 31, 2008 and 2007, totaled $2,351, $1,520
(Unaudited), $3,350 and $16,697, respectively.
 
 Revenue
Recognition
 
 During
the periods presented, the Company recognized inspection report revenue when the
earnings process was complete, which was typically after an investigation had
been completed and the final written report had been reviewed and approved by
management and submitted to the customer.  Once the final report had
been approved by management and submitted to the customer, the Company had no
further obligation to the customer in regards to this
matter.   Storage fee revenue was recognized on a pro-rata basis
as earned.
 
 Accounts
Receivable
 
 At April
30, 2009 the Company has no accounts receivable and no customers.  Two
customers account for 25% and 11% each of total accounts receivable at December
31, 2008 and three customers accounted for 13% each of total accounts receivable
at December 31, 2007.  During the periods presented, the Company
charged accounts to bad debt expense as they were determined to be uncollectible
based upon a review of aging and collections.  Credit losses, when
realized, have been within the range of the Company’s expectations and,
historically, have not been significant.
  F-8
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements
 
 1.  Significant
Accounting Policies (continued)
 
 Property
and Equipment
 
 At April
30, 2009, the Company has no property and equipment.  During the other
periods presented, property and equipment was carried at
cost.  Repairs and maintenance were charged to expense as
incurred.  Depreciation was computed using the straight-line method
over the estimated useful lives of the assets as follows:
 
 Building
              39
      yearsBuilding
      improvements
              20-39
      yearsEquipment,
      furniture and fixtures
              3-7
      yearsVehicles
              5
      years
 
 Stock
Options
 
 The
Company accounts for its stock options under the fair value recognition
provisions of Financial Accounting Standards Board (“FASB”) Statement No.
123(R),Share-Based Payment(“FAS
123(R)”), using the modified-prospective-transition method.  Under
that transition method, compensation costs recognized include:  (a)
compensation cost for all share-based payments granted prior to, but not yet
vested as of January 1, 2006, based on the grant date fair value estimated in
accordance with the original provisions of FASB Statement No. 123, and (b)
compensation cost for all share-based payments granted subsequent to January 1,
2006, based on the grant-date fair value estimated in accordance with the
provisions of FAS 123(R).
 
 Income
Taxes
 
 The
Company files federal and state income tax
returns.  The Company’s major tax jurisdictions in which it currently
files income tax returns include federal (United States of America) and the
state of Tennessee.   Tax jurisdictions subsequent to April 30,
2009, will depend upon the location of future operations.  The tax
years that remain subject to examination for the Company’s major tax
jurisdictions at April 30, 2009 include 2005 through 2009.  The
Company’s policy is to classify penalties and interest associated with uncertain
tax positions, if required, as a component of its income tax
provision.
 
 Fair
Value of Financial Instruments
 
 The fair
value of the Company’s financial instruments approximates their carrying value
based upon the type and nature of the financial instruments.
  F-9
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements
 
 1.  Significant
Accounting Policies (continued)
 
 Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures.  Accordingly, actual results could differ from those
estimates.
 
 Reclassifications
 
 Certain
amounts in previous periods have been reclassified to conform to 2009
classifications.
 
 2.  Settlement
Agreement
 
 On April
30, 2009, the Company closed on its Settlement Agreement and Asset Purchase
Agreement dated September 29, 2009, as amended (the “Agreement”) pursuant to
which $250,000 was paid to the plaintiffs and the Company transferred all of its
remaining assets to a Tennessee limited liability company (the “Tennessee
Company”) which also assumed all of the Company’s liabilities.  The
Company has a liability of $250,000 related to this matter recorded at December
31, 2008
 
 The
Tennessee Company is owned by three of the Company’s former directors, who were
defendants in the litigation.  As part of the settlement, the pending
litigation against the Company and its former directors was dismissed and the
Company’s management resigned, canceled 6,459,877 shares of common stock of the
Company, sold to the plaintiffs 3,000,000 shares of common stock for nominal
consideration and canceled all options to purchase shares of the Company’s
common stock.  Following the closing on April 30, 2009, the Company
had no assets and no liabilities and 13,645,990 shares of common stock
outstanding in contrast to the 20,105,867 shares outstanding prior to the
closing.
  F-10
 Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements
 
 2. Settlement
Agreement (continued)
 
 In
accordance with the Agreement, the transferred assets and assumed liabilities
are summarized as follows:
 
 AssetsCash
                        
                        $
                        207,886Accounts
      and notes receivable
                        
                        
                        359,029Prepaid
      and other assets
                        
                        
                        34,176Property,
      plant and Equipment, net
                        
                        
                        896,723Total
      assets
                        
                        $
                        1,497,814LiabilitiesAccounts
      payable and accrued liabilities
                        
                        $
                        259,896Deferred
      revenue
                        
                        
                        124,476Note
      payable
                        
                        
                        659,622Total
      liabilities
                        
                        $
                        1,043,994
 
 3.  Note
Receivable
 
 During
December 2008, the Company entered into an unsecured promissory note with a
customer for payment of services rendered.  As more fully described in
Note 2, this note receivable was transferred on April 30, 2009, in accordance
with the Company’s Agreement.
 
 4.  Line
of Credit and Notes Payable
 
 During
April 2009, the Company mutually terminated without penalty its $400,000 line of
credit agreement with a financial institution.  At April 30, 2009, the
Company owed no amounts related to this agreement
 
 During
April 2009, the Company paid in full its vehicle note payable.  As
more fully described in Note 2, the Company’s real estate note payable was
assumed on April 30, 2009, in accordance with the Company’s
Agreement.  The Company has obtained releases from the respective
financial institution and owes no amount related to these notes payable at April
30, 2009.
 
 5.  Lease
 
 The
Company leased certain office space at its main office to a tenant who also
served as the Company’s general counsel.  The lease agreement was
mutually terminated during 2008.  Rental income under this agreement
was $10,000, $22,500, and $7,500 during the four months ended April 30, 2008
(Unaudited), and the years ended December 31, 2008 and 2007,
respectively.
  F-11
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 6.  Income
Taxes
 
 For tax
purposes the Company has federal net operating loss (“NOL”) carryovers which are
available to offset future taxable income.  These NOL carryovers
expire as follows:
 
 Year
                      
                      Year
      of
                      
                      NOLGenerated
                      
                      Expiration
                      
                      Carryover2000
                      
                      2020
                      
                      $
                      12,6962001
                      
                      2021
                      
                      
                      88,5082002
                      
                      2022
                      
                      
                      114,5972004
                      
                      2024
                      
                      
                      53,2382005
                      
                      2025
                      
                      
                      89,9932009
                      
                      2029
                      
                      
                      369,284$
                      728,316
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.
 
 Significant
components of the Company’s deferred tax assets and liabilities are as
follows:
 
 April
      30
                  
                  
                  December
      31
                  
                  
                  December
      312009
                  
                  
                  2008
                  
                  
                  2007Deferred
      tax assets:NOL
      carryovers
                  
                  $
                  247,627
                  
                  
                  $
                  122,071
                  
                  
                  $
                  167,122Deferred
      revenue
                  
                  
                  –
                  
                  
                  
                  49,777
                  
                  
                  
                  48,628Expenses
      not currently deductible
                  
                  
                  –
                  
                  
                  
                  138,966
                  
                  
                  
                  138,966Accrued
      legal settlement
                  
                  
                  –
                  
                  
                  
                  95,725
                  
                  
                  
                  11,487Reserve
      for doubtful accounts
                  
                  
                  –
                  
                  
                  
                  11,487
                  
                  
                  
                  19,145Other
                  
                  
                  –
                  
                  
                  
                  523
                  
                  
                  
                  523Total
      deferred tax assets
                  
                  
                  247,627
                  
                  
                  
                  418,549
                  
                  
                  
                  385,871Valuation
      allowance
                  
                  
                  (247,627
                  )
                  
                  
                  (382,503
                  )
                  
                  
                  –Net
      deferred tax assets
                  
                  
                  –
                  
                  
                  
                  36,046
                  
                  
                  
                  385,871Deferred
      tax liability – tax over book depreciation
                  
                  
                  –
                  
                  
                  
                  (36,046
                  )
                  
                  
                  (16,861
                  )Net
      deferred tax assets
                  
                  $
                  –
                  
                  
                  $
                  –
                  
                  
                  $
                  369,010
  F-12
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 6.  Income
Taxes (continued)
  As a
result of the transfer of depreciable assets to a Tennessee limited liability
company (Note 2), the
Company may have to recognize a taxable gain for the difference between the fair
value of the fixed assets transferred and their net tax basis under applicable
Internal Revenue Service codes, subject to the completion of an appraisal. 
The estimate of this gain has not been included in the NOL carryover or related
valuation allowance as the amount cannot be reasonably estimated.  Upon
filing of the return and determination of the realized gain, the actual NOL
carryover could change by a material amount, however, there would be no
effect on  the net deferred tax asset recorded at April 30, 2009 as all
benefits related to the NOL carryforward have been fully reserved.
 FASB
Statement No. 109, Accounting
for Income Taxes, requires the Company to periodically assess whether it
is more likely than not that it will generate sufficient taxable income to
realize the deferred income tax assets.  The ultimate realization of
these assets is dependent upon the generation of future taxable income
sufficient to offset the related deductions and NOL carryovers within the
applicable carryover periods as previously discussed.  As more fully
described in Note 2, on April 30, 2009, the Company transferred all of its
assets to a Tennessee limited liability company which also assumed all of the
Company’s liabilities, in accordance with the Company’s Agreement.  As
such, management cannot presently determine when the Company will be able to
generate sufficient taxable income to realize the deferred tax
assets.  The valuation allowance was decreased by $134,876 to $247,627
in 2009 and increased to $382,503 in 2008.
 
 The
reconciliation of income tax expense attributable to continuing operations
computed at the U.S. federal statutory tax rates to the income tax (benefit)
expense recorded is as follows:
 
 Four months ended
                      April 30
                    
                    
                    Year ended
                      December 312009
                    
                    
                    2008
                    
                    
                    2008
                    
                    
                    2007(Unaudited)Income
      tax at U.S. statutory rates of 34%
                    
                    $
                    (40,421
                    )
                    
                    $
                    (20,062
                    )
                    
                    $
                    (38,012
                    )
                    
                    $
                    28,049Effect
      of permanent differences
                    
                    
                    1,137
                    
                    
                    
                    577
                    
                    
                    
                    1,259
                    
                    
                    
                    3,630State
      income taxes
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    3,741Settlement
      agreement permanent differences
                    
                    
                    163,275
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –Decrease
      in valuation allowance
                    
                    
                    (134,876
                    )
                    
                    
                    –
                    
                    
                    
                    382,503
                    
                    
                    
                    –Other
                    
                    
                    10,885
                    
                    
                    
                    (1,548
                    )
                    
                    
                    23,260
                    
                    
                    
                    2,327Income
      tax (benefit) expense
                    
                    $
                    –
                    
                    
                    $
                    (21,033
                    )
                    
                    $
                    369,010
                    
                    
                    $
                    37,747
 
 7.  Employee Stock
Options
 
 The
Company has no formal stock option plan. However, in November 2002, the Company
issued to employees options to acquire 8,028,000 shares of the Company’s common
stock (8,000,000 of which were issued to five employees who were also board
members).  These options vested at the rate of 20% annually beginning
at the grant date and expire upon termination of employment.  As of
December 31, 2008, the Company had outstanding options to purchase 8,000,000
shares of the Company’s common stock.  In
connection with the execution of the Company’s Agreement (Note 2) on April 30, 2009 all
options outstanding were canceled.There are no outstanding stock
options at April 30, 2009.
  F-13
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 8.  Loss
Per Share Data
 
 Basic
loss per share assumes no dilution and is computed by dividing net income
available to common stockholders by the weighted average number of common shares
outstanding during each period.  Diluted loss per share reflect, in
periods in which they have a dilutive effect, the effect of common shares
issuable upon the exercise of stock options and warrants, using the treasury
stock method of computing such effects.
 
 The
following table sets forth the computation of basic and diluted (loss) earnings
per share:
 
 Four months ended
                        April 30
                      
                      
                      Year ended
                        December 312009
                      
                      
                      2008
                      
                      
                      2008
                      
                      
                      2007(Unaudited)Basic
      and diluted:Net
      (loss) earnings
                      
                      $
                      (118,888
                      )
                      
                      $
                      (37,973
                      )
                      
                      $
                      (480,810
                      )
                      
                      $
                      (44,750
                      )Average
      shares outstanding
                      
                      
                      18,813,892
                      
                      
                      
                      20,105,567
                      
                      
                      
                      20,105,867
                      
                      
                      
                      20,157,790Basic
      and diluted (loss) earnings per share
                      
                      $
                      (0.01
                      )
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.02
                      )
                      
                      $
                      (0.00
                      )
 
 9.  Selected
Financial Data (Unaudited)
 
 Selected
unaudited financial data for the twelve months ended April 30, 2009 is as
follows:
 
 Total
      revenues
                  
                  $
                  2,839,594Operating
      income
                  
                  
                  110,887Net
      loss
                  
                  
                  (561,725
                  )Loss
      per basic share
                  
                  
                  (0.03
                  )Loss
      per diluted share
                  
                  
                  (0.03
                  )
 
 10.  Going
Concern
 
 The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. As described in Note 2, the Company has
disposed of its operating business. The Company will continue to incur costs
that are necessary for it to remain an active public company. These ongoing
costs are expected to be funded by a related party, and the resultant
obligations will accrue interest until repaid.
 
 The
Company’s primary plan and objective going forward is to seek out and pursue a
transaction with a business enterprise that might have a desire to take
advantage of the Company’s status as a public corporation. There is no assurance
that the Company will acquire a favorable business opportunity through such a
transaction. In addition, even if the Company is involved in such a business
opportunity, there is no assurance that it will generate revenues or profits, or
that the market price of the Company’s common stock will be increased
thereby.
  F-14
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 10.  Going
Concern (continued)
 
 The
financial statements do not include any adjustments relating to the
recoverability of assets and the classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern.
 
 11.  Proposed
Certificate of Incorporation Amendments
 
 On May
21, 2009, our Board of Directors approved the amendments to our Certificate of
Incorporation to increase our authorized Common Stock from 50,000,000 shares to
250,000,000 shares and to authorize a new class of 10,000,000 shares of
Preferred Stock, as more fully described below.  Our Company also
received the written consent for this amendment from a stockholder of our
Company who is the beneficial owner of a majority of the outstanding shares of
our Common Stock on May 21, 2009.  We have filed the Information
Statement with the Securities and Exchange Commission and delivered the
Information Statement to our stockholders of record and have met the 20 day
period required by Rule 14c-2.  In accordance with the provisions of
the General Corporation
Law of the State of Delaware, our Company has filed a Certificate of
Amendment to our Certificate of Incorporation to effect the amendment to
increase our authorized Common Stock which will become effective upon acceptance
of the filing by the Secretary of State of the State of Delaware
 
 Increase in Authorized
Common Stock
 
 The
amendment to the Company’s Certificate of Incorporation provides for an increase
of the number of shares of Common Stock that the Company is authorized to issue
from 50,000,000, par value $0.01 per share, to 250,000,000 par value
$0.001.
 
 The Board
of Directors recommended the proposed increase in the authorized number of
shares of Common Stock to insure that a sufficient number of authorized and
unissued shares is available (i) to raise additional capital for the operations
of the Company; (ii) to make options and shares available to employees, future
non-employee directors and consultants of the Company as an incentive for
services provided to the Company; and (iii) to have shares of Common Stock
available for possible acquisitions. Such shares would be available for issuance
by the Board of Directors of the Company without further action by the
stockholders, unless required by the Company’s Certificate of Incorporation or
by the laws of the State of Delaware.  Neither the presently
authorized shares of Common Stock nor the additional shares of Common Stock that
may be authorized pursuant to the proposed amendment carry preemptive
rights.
 
 There are
currently no set plans or arrangements relating to the possible issuance of any
additional shares of Common Stock proposed to be authorized.  We are
not party to any agreements or understandings regarding any acquisitions, nor
are any acquisitions under negotiation.
  F-15
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 11.  Proposed
Certificate of Incorporation Amendments (continued)
 
 Authorization of New Class
of 10,000,000 shares of Preferred Stock
 
 The
amendment to the Company’s Certificate of Incorporation authorizes a new class
of 10,000,000 shares of preferred stock, par value $0.001 per share, and
authorizes the Board of Directors to issue one or more series of the preferred
stock with such designations, rights, preferences, limitations and/or
restrictions as it should determine by vote of a majority of such
directors.
 
 The
Company’s Certificate of Incorporation currently only permits the Company to
issue shares of Common Stock.  This, the Company believes, has limited
the Company’s flexibility in seeking additional working capital.  The
Board of Directors has recommended that the Certificate of Incorporation be
amended to authorize a class of 10,000,000 shares of Preferred Stock and to
allow the Board of Directors of the Company the widest possible flexibility in
setting the terms of Preferred Stock that may be issued in the
future.  The Company will, therefore, be afforded the greatest
flexibility possible in seeking additional financing, as the Board of Directors
deems appropriate in the exercise of its reasonable business judgment. The
Company currently has no commitments or plans for the issuance of any shares of
Preferred Stock.
 
 Under
the Amendment, the Board of Directors has the right, without further stockholder
approval or action, to issue up to 10,000,000 shares of Preferred Stock, having
such rights and preferences, including voting rights, as the Board of Directors
may determine.  The ability of the Company to issue such shares of
Preferred Stock may, under certain circumstances, make it more difficult for a
third party to gain control of the Company (e.g., by means of a tender offer),
prevent or substantially delay such a change of control, discourage bids for the
Common Stock at a premium, or otherwise adversely affect the market price of the
Common Stock.
 
 12.  Other
Subsequent Events
  In
connection with the increase in authorized Common Stock (Note 11), on July 22, 2009,
we entered into a Subscription Agreement with EIG Venture Capital, Ltd. (“EIG”),
an investment company controlled by Jan Telander, our Chief Executive
Officer and controlling stockholder for the sale by the Company to EIG of an
aggregate of  97,751,710 shares of the Company’s Common Stock, par
value $0.0001 per share (the “Common Stock”), at a fixed price of $0.01023 per
share, in three tranches.  The Phase I tranche consisted of 5,767,350
shares of Common Stock for a total purchase price of $59,000, to be purchased by
the EIG on or before July 16, 2009.  The Phase II tranche consists of
43,108,504 shares of Common Stock for a total purchase price of $441,000, to be
purchased by the EIG on or before December 31, 2009; and the Phase III tranche
consists of 48,875,855 shares of Common Stock for a total purchase price of
$500,000 to be purchased by the EIG on or before July 16, 2010. The shares
compromising each of the tranches in Phases I through III may be purchased in
one or more installments by the EIG; provided, that the number of shares
required to be purchased in each tranche is purchased in its entirety by the
final purchase date specified for the entire tranche.  EIG has
completed its purchase of the first tranche of 5,767,350
shares.
  F-16
  Diversified
Product Inspections, Inc.
 
 Notes to
Financial Statements (continued)
 
 12.  Other
Subsequent Events (continued)
  In July
2009, the Company formed ProGreen Properties, Inc. (ProGreen) as a wholly-owned
subsidiary and merged ProGreen into the Company. In connection with the merger,
the Company intends to change its name from Diversified Product Inspections,
Inc. to ProGreen Properties, Inc.
  In
association with other restructuring plans, the Company has initiated a new
business plan directed at purchasing income-producing residential real estate
apartment homes, condominiums and houses in the State of Michigan where we
believe favorable investment opportunities exist based on current market
conditions.  On July 28, 2009, the Company paid approximately $50,000
cash for a condominium.
  F-17