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EX-32.1 - DIVERSIFIED RESOURCES 10Q, CERTIFICATION 906, CEO - Diversified Resources Inc.diversifiedexh32_1.htm
EX-32.2 - DIVERSIFIED RESOURCES 10Q, CERTIFICATION 906, CFO - Diversified Resources Inc.diversifiedexh32_2.htm
EX-31.2 - DIVERSIFIED RESOURCES 10Q, CERTIFICATION 302, CFO - Diversified Resources Inc.diversifiedexh31_2.htm
EX-31.1 - DIVERSIFIED RESOURCES 10Q, CERTIFICATION 302, CEO - Diversified Resources Inc.diversifiedexh31_1.htm


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant To Section 13 or 15(D) Of The Securities Exchange Act Of 1934

For the quarterly period ended January 31, 2016

o Transition Report Under Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the transition period from _______________ to _______________

COMMISSION FILE NUMBER    333-175183

DIVERSIFIED RESOURCES INC.
(Exact name of registrant as specified in its charter)
 
NEVADA
98-0687026
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
1789 W. Littleton Blvd., Littleton, CO 80120
(Address of principal executive offices, including zip code)

303-797-5417
(Issuer’s telephone number, including area code)
 
 
Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x  No o

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 
Large accelerated filer
o
Accelerated filer
o
 
Non-accelerated filer
o
Smaller reporting company
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o  No x
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 43,398,636 shares of common stock as of March 1, 2016.
 
 
 
 
 
 
 
DIVERSIFED RESOURCES, INC.

Index

 
Page
   
   
     
 
     
 
     
 
     
 
     
     
     
     
17
     
     
     

 
 
 
 
 
PART I
 
ITEM 1.  FINANCIAL STATEMENTS

Diversified Resources, Inc.
CONSOLIDATED BALANCE SHEETS

   
January 31,
   
October 31,
 
   
2016
   
2015
 
   
(unaudited)
       
             
ASSETS
           
CURRENT ASSETS
           
Cash
  $ 164,421     $ 21,706  
Accounts receivable, trade
    -       67,189  
Accounts receivable, other
    -       313,989  
Total current assets
    164,421       402,884  
                 
LONG-LIVED ASSETS
               
Property and Equipment, net of accumulated depreciation
               
of $367,951 and $322,281
    1,800,441       1,846,111  
Bonds and deposits
    167,867       167,867  
Oil and gas properties - proved (successful efforts method)
               
net of accumulated depletion and impairment of $2,659,950 and $2,623,339
    1,246,266       1,282,876  
Oil and gas properties - proved undeveloped (successful efforts method)
    1,241,880       1,241,724  
Oil and gas properties - unproved (successful efforts method)
    2,932,730       2,932,730  
                 
Total assets
  $ 7,553,605     $ 7,874,192  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable
  $ 360,113     $ 387,028  
Accounts payable, related party
    147,736       147,736  
Current portion of notes payable
    319,632       319,632  
Note payable – related party
    107,070       107,070  
Accrued interest, related party
    17,984       15,287  
Accrued expenses
    376,194       405,669  
Total current liabilities
    1,328,729       1,382,422  
                 
LONG TERM LIABILITIES
               
Long term debt, notes payable
    3,709,306       3,498,108  
Asset retirement obligation
    329,837       321,101  
                 
COMMITMENTS AND CONTINGENT LIABILITIES
            -  
                 
STOCKHOLDERS' EQUITY
               
Preferred stock, $0.001 par value  50,000,000 shares authorized:
    301       301  
301,000 shares issued and outstanding
               
Common stock, $0.001 par value, 450,000,000 shares authorized,
               
 23,215,926 shares issued and outstanding in 2016 and 2015
    23,216       23,216  
Additional paid in capital
    9,741,759       9,741,759  
Accumulated deficit
    (7,579,544 )     (7,092,714 )
Total stockholders' equity
    2,185,732       2,672,562  
                 
Total liabilities and stockholders' equity
  $ 7,553,605     $ 7,874,192  


 
See accompanying notes to the consolidated financial statements.
 
 
 
Diversified Resources, Inc.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
   
   
Three Months Ended
 
   
January 31,
   
January 31,
 
   
2016
   
2015
 
             
Operating revenues
           
Oil and gas sales
  $ 34,548     $ 240,274  
      34,548       240,274  
Operating expenses
               
Lease operating expenses
    81,688       150,078  
General and administrative
    277,061       552,368  
Depreciation expense
    74,502       41,768  
Depletion expense
    7,778       38,775  
Production tax and royalty expense
    12,830       93,046  
Accretion expense
    8,736       6,709  
Total operating expenses
    462,595       882,744  
                 
Loss from operations
    (428,047 )     (642,470 )
                 
Other income (expense)
               
Interest expense
    (58,783 )     (8,886 )
Other income (expense)
    (58,783 )     (8,886 )
                 
Net loss
  $ (486,830 )   $ (651,356 )
                 
Net loss per common share
               
Basic and diluted
  $ (0.02 )   $ (0.03 )
                 
Weighted average shares outstanding
               
Basic and diluted
    22,904,666       20,198,075  
 
 
 
 
 
 
 
 
 
See accompanying notes to the consolidated financial statements.
 
 
4

 
 
Diversified Resources, Inc.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
             
   
Three Months Ended
 
   
January 31,
   
January 31,
 
   
2016
   
2015
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net cash (used in) operating activities
  $ (50,483 )   $ (702,559 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Net cash (used in) investing activities
    -       -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from sale of common stock
    -       663,720  
Proceeds from notes payables
    200,000       -  
Payment on notes payable
    (6,802 )     (40,891 )
Net cash provided by financing activities
    193,198       622,829  
                 
INCREASE (DECREASE) IN CASH
    142,715       (79,730 )
                 
BEGINNING BALANCE
    21,706       209,054  
                 
ENDING BALANCE
  $ 164,421     $ 129,054  
                 
Cash paid for income taxes
  $ -     $ -  
                 
Cash paid for interest
  $ 2,196     $ 6,186  
 
 
 
 
 
 
 
 
 
 
See accompanying notes to the consolidated financial statements.
 
 
 
DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
NOTE 1 – BASIS OF PRESENTATION

The interim consolidated financial statements of Diversified Resources, Inc. (“we”, “us”, “our”, “Diversified”, or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, interest rates, drilling risks, geological risks, the timing of acquisitions, and our ability to obtain additional capital. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Diversified’s Annual Report on Form 10-K for the year ended October 31, 2015 as filed with the Securities and Exchange Commission (“SEC”) on February 16, 2016.  The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with US GAAP. Accordingly, these consolidated financial statements do not include all of the information and footnotes required by US GAAP for annual consolidated financial statements.

Although, from a legal standpoint, we acquired Natural Resource Group, Inc. (“NRG”) on November 21, 2013, for financial reporting purposes the acquisition of NRG constituted a recapitalization, and the acquisition was accounted for as a reverse merger, whereby NRG was deemed to have acquired us.  Consequently, this report contains only the historical financial statements of NRG prior to November 21, 2013.  From and after November 21, 2013, NRG’s financial statements have been consolidated with our financial statements.

NOTE 2 – ORGANIZATION AND GOING CONCERN

Diversified Resources Inc. (“the Company”) was incorporated in the State of Nevada on March 19, 2009 to pursue mineral extraction in the United States.

Effective November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,558,150 shares of our common stock. In connection with this acquisition, the then President of the Company sold 2,680,033 shares of the Company’s common stock to the Company for nominal consideration.  The shares purchased from the President were returned to the status of authorized but unissued shares. Additionally, the former principals of the Company assumed all of the debts of the Company at the date of the exchange.

As shown in the accompanying financial statements, the Company has incurred significant operating losses since inception, has an accumulated deficit of $7,561,544 and has negative working capital of $1,164,308 at January 31, 2016.  As of January 31, 2016, the Company has limited financial resources.  These factors raise substantial doubt about the Company's ability to continue as a going concern.  The Company's ability to achieve and maintain profitability and positive cash flow is dependent upon its ability to locate profitable mineral properties, generate revenue from planned business operations, and control exploration costs. Management plans to fund its future operations by joint venturing and obtaining additional financing, and commercial production. However, there is no assurance that the Company will be able to obtain additional financing from investors or private lenders, or that additional commercial production can be attained. 
 
The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiaries, Natural Resource Group, Inc. and BIYA Operators, Inc. Any inter-company accounts and transactions have been eliminated.

Cash and cash equivalents
 
The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.
 
 


DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
Use of estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.

Revenue Recognition
 
We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at January 31, 2016 and 2015 was immaterial.
 
Accounting for Oil and Gas Activities
 
Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.
 
 Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.

Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate undiscounted future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Our valuation of Garcia field resulted in impairment expense of $2,427,968 at the year ended October 31, 2015.
 
Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.

Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset, if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  We did not have incur any Geological and geophysical costs for the three months ended January 31, 2016 and 2015.
 
 

 
DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.

The following table reconciles the asset retirement obligation for three months ended January 31, 2016 and year ended October 31, 2015:

   
2016
   
2015
 
                 
Asset retirement obligation as of beginning of period
  $ 321,101     $ 290,312  
Liabilities added
    -       -  
Liabilities settled
    -       -  
Revision of estimated obligation
    -       -  
Accretion expense on discounted obligation
    8,736       30,789  
                 
Asset retirement obligation as of end of period
  $ 329,837     $ 321,101  


Property and Equipment
 
Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.
 
Maintenance and repairs are charged to expense as incurred.

Income Taxes
 
We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes which prescribes a threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Contingent Liabilities
 
The Company records contingent liabilities when the amounts were incurred and determinable.  Otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of January 31, 2016 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of January 31, 2016, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.
 
 


DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
Loss Per Share

The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.
 
Recent Accounting Pronouncements

In August 2015, the FASB issued Update No. 2015-14 - Revenue from Contracts with Customers to defer the effective date of the new revenue recognition standard by one year. The new revenue recognition standard is now effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted but only for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The Company has started going through its contracts and is assessing their impact, but does not currently believe this guidance will have a material effect on the Company’s financial statements or disclosures.
 
The Company does not believe that any other recently issued or proposed accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.
 
NOTE 4 – Participation Agreement
 
In connection with the convertible promissory note described in Note 6, the Company entered into a participation agreement with a nonaffiliated company whereby the nonaffiliated company would advance up to $350,000 to conduct additional development of the underlying leases at the Garcia Field and drill and complete three additional wells on the acreage. During 2012, $250,000 was advanced to the Company. In consideration for extending this credit arrangement, the lender was assigned a 1% overriding royalty interest in the 4,600 acre field, a 20% modified net profits interest in the existing four producing wells in the Garcia Field and a 20% modified net profits interest in three additional wells to be drilled on the acreage. The Company valued the net profits interest and the overriding royalty interest at $136,599 using 10% present value over the estimated life of the wells. The amount was recorded as a debt discount and was amortized using the effective interest rate method over the life of the promissory note (3 years). Additionally, the lender has the right, at any point during the period of the note, to convert the remaining principal balance on the note to a working interest (see Note 6).
 
The modified net profits interest is based on the gross proceeds from the sale of oil, gas and other minerals in the four producing wells in the Garcia Field and three additional wells to be drilled. The 20% is applied to 100% of the Company’s net revenue interest in the wells which cannot be less than 80% and is reduced by any of the following expenditures:
 
 
any overriding royalties or other burden on production in excess of the 80% net revenue interest;
 
production, severance and similar taxes assessed by any taxing authority based on volume or value of the production;
 
direct costs incurred in producing oil or natural gas, or the operation of the wells excluding administrative, supervisory or other indirect costs;
 
costs reasonably incurred to process the production for market;
 
costs reasonably incurred in transportation, delivery, storage or marketing the production.
 
NOTE 5 – Notes Payable – Related Party
 
In December 2010, the Company entered into a purchase and sale agreement to acquire certain oil and gas assets located in Adams, Broomfield, Huerfano, Las Animas, Morgan and Weld counties, Colorado. The Company issued 2,500,000 shares of its $0.0001 par value common stock and a promissory note for $360,000 bearing interest at 10% with an original maturity date of March 1, 2011. The shares were valued at $1 per share based on sales of the Company’s common stock to third-parties. The promissory note is collateralized by the property and equipment transferred and was subsequently subrogated to a convertible promissory note on January 12, 2012 and matures on December 11, 2016.  The balance on the note is $107,070 at January 31, 2016 with interest accrued in the amount of $17,984.

NOTE 6 – Long Term Debt and Note Payable
 
Convertible Promissory Note—On January 12, 2012 the Company entered into a convertible promissory note bearing interest at 10%, due January 11, 2014 which was extended to July 17, 2016.  The note is collateralized by a first priority deed of trust on approximately 4,600 acres of oil and gas leasehold interests in the Garcia Field, together with the existing wells and equipment in the field. The balance at January 31, 2016 was $248,895. The lender has the right to convert the principal to a 10% working interest
 
 

 
DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
in the collateral as well as a 10% interest in all wells owned by the Company in the Garcia Field in which the lender does not have the 20% modified net profits interest described in Note 4. In the event the principal is less than $350,000, the conversion percentage shall be reduced proportionately. The Company has the right to prepay the note without penalties or fees after giving the lender ten days’ notice of its intent. If lender does elect to convert within 10 days after receiving said notice, the conversion rights terminate.  The Company recorded a discount to the debt of $136,599 and recognized accretion of the discount.   The Company reviewed the note for beneficial conversion features and embedded derivatives and determined that neither applied. 
 
On October 14, 2014 the Company acquired approximately 98% of the outstanding shares of BIYA Operators, Inc. (“BIYA”) an independent oil and gas company. The Company issued a promissory note in the principal amount of approximately $1,860,000 (subject to adjustment for unknown liabilities).  The note will be effective when certain leases covering Indian tribal lands have been issued.  The note will bear interest at 5% a year and will be payable in October 2016.
 
In May 2012 BIYA entered into a settlement agreement with a previous partner for $1.2 million. The amount is non-interest bearing and has a minimum monthly payment of $10,000, plus one third of BIYA’s net profits, as defined in the agreement. On April 1, 2015, the agreement was amended, where the balance due will bear interest at 6% a year and has a fixed monthly payment of $5,500 until paid in full. The balance due was $489,154 at January 31, 2016.
 
Secured Notes —In 2015, the Company issued secured notes in the principal amounts of $1,250,000, bearing interest at 12% payable quarterly beginning June 1, 2015 with a two year maturity date.  In January 2016, the Company issued secured notes in the principal amounts of $200,000, bearing interest at 12% payable quarterly beginning January, 2016 with a two year maturity date. The notes are collateralized by a first priority deed of trust on certain producing wells and their spacing units located in the Horseshoe Gallup Field. The notes and any interest outstanding may be converted, one time only, for new securities offered by the Company. The notes guarantee one year of interest which would be due even upon prepayment of the notes during the first year. The lenders received two year warrants which entitles the holders to purchase up to 360,000 shares of the Company’s common stock at a price of $0.80 and $1.50 per common share, valued at approximately $126,000 at October 31, 2015, using the Black Scholes method. The value of the warrants has been recorded as discount on the note and a credit to additional paid in capital. The company recorded accretion of the discount in the amount of $18,000 for three months ended January 31, 2016. The secured notes had accrued interest payable of approximately $72,847 at January 31, 2016.
 
Installment Loan—The Company entered into an installment loan on July 4, 2013 bearing interest of 5.39%. The loan is payable in monthly installments of $464 over 48 months commencing August 4, 2013.  The loan is collateralized by a vehicle. On July 5, 2015, the Company entered into installment loans bearing interest of 3.62%. The loans are payable in monthly installments of $2,118 over 48 months. The loans are collateralized by two vehicles.
 
The following summarizes the notes payable at:
 
   
January 31,
2016
   
October 31,
2015
 
             
Convertible promissory note
  $ 248,895     $ 248,895  
BIYA note
    1,860,000       1,860,000  
BIYA settlement
    489,154       489,154  
Convertible promissory notes
    1,450,000       1,250,000  
Discount on convertible promissory notes
    (108,000 )     (126,000 )
Installment loan
    88,889       95,691  
      4,028,938       3,817,740  
Current portion
    (319,632 )     (319,632 )
    $ 3,709,306     $ 3,498,108  
 
NOTE 7 – INCOME TAXES

No provision was made for federal income tax for the three months ended January 31, 2016 and 2015, since the Company had net operating losses.

NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 450,000,000 common shares of par value at $0.001 and 50,000,000 preferred shares of par value at $0.001. As of January 31, 2016, 23,215,926 shares of common stock and 301,000 preferred shares were issued and outstanding.
 
 

 
DIVERSIFIED RESOURCES INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 2016
 
NOTE 9 – RELATED PARTY TRANSACTIONS
 
Natural Resource Group, Inc. has a lease for office space in Littleton, Colorado, with Spotswood Properties, LLC, a Colorado limited liability company (“Spotswood”), and an affiliate of the president, effective January 1, 2009, for a three-year term. Commencing July 1, 2010 the Company entered into a new lease for office space for a 3 year period ending July 1, 2013. The lease provides for the payment of $2,667 per month plus utilities and other incidentals. The president of the Company owns 50% of Spotswood. The Company is of the opinion that the terms of the lease are no less favorable than could be obtained from an unaffiliated party. Spotswood was paid $10,667 in each of the three months ended January 31, 2016 and 2015.  Natural Resource Group, Inc. is currently leasing the office space on a month to month basis under the same terms and conditions as the lease that expired July 31, 2013.
 
The Company paid a director and shareholder $31,250 and $48,000 during the three months ended January 31, 2016 and 2015, respectively for financial public relations consulting.
 
The Company paid the President’s brother $17,395 and $16,270 during the three months ended January 31, 2016 and 2015, respectively for landman consulting services. 
 
The Company paid $2,707 and $7,725 to companies owned by President of BIYA Operators Inc., the Company’s wholly owned subsidiary and by his son during three months ended January 31, 2016 and 2015, respectively for field services.

NOTE 10 – COMMITMENTS AND CONTINGENCIES
 
LegalThe Company is subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. The Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.  
 
EnvironmentalThe Company accrues for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable.

ConcentrationThe Company sells production to a small number of customers, as is customary in the industry. Yet, based on the current demand for oil and natural gas, the availability of other buyers, and the Company having the option to sell to other buyers if conditions so warrant, the Company believes that its oil and gas production can be sold in the market in the event that it is not sold to the Company’s existing customers. However, in some circumstances, a change in customers may entail significant transition costs and/or shutting in or curtailing production for weeks or even months during the transition to a new customer.

NOTE 11 – SUBSEQUENT EVENTS
 
On February 5, 2016, the Company entered into an Agreement to Exchange Securities with Diversified Energy Services, Inc. (“DESI”) a Colorado based company. The Company issued 20,032,710 shares of its common stock in exchange for all the outstanding shares of DESI and assumed DESI’s liabilities effective February 1, 2016.
 
DESI offers a full range of services to the Rocky Mountain energy and construction industries and is dedicated to becoming the “one call, last call” solution to a full range of oil field service needs. DESI offers Crane Service, Well Site Construction, Materials Handling and Disposal, Trucking Services, Equipment Operation, and Rigging to the energy industry in the Denver Julesburg Basin and the Rockies. DESI employs upwards of 140 highly qualified, safety focused professionals and operators.
 
DESI operates as a wholly owned subsidiary of the Company and is not expected to experience any change in management, operations, policies or business practices.
 
 
 
 

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements included as part of this report.

Unless the context otherwise requires, references to the “Company”, “Diversified”, “we”, “us” or “our” mean Diversified Resources, Inc. and its consolidated subsidiaries.

Cautionary Statements Regarding Forward-Looking Statements.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Forward-looking statements include statements regarding our plans, beliefs or current expectations and may be signified by the words “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “budget”, “plan”, “forecast”, “predict” and other similar expressions.  Forward-looking statements appear throughout this Form 10-Q with respect to, among other things:  profitability; planned capital expenditures; estimates of oil and gas production; future project dates; estimates of future oil and gas prices; estimates of oil and gas reserves; our future financial condition or results of operations; and our business strategy and other plans and objectives for future operations.  Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement.

While we have made assumptions that we believe are reasonable, the assumptions that support our forward-looking statements are based upon information that is currently available and is subject to change.  All forward-looking statements in the Form 10-Q are qualified in their entirety by the cautionary statement contained in this section.  We do not undertake to update, revise or correct any of the forward-looking information.  These financial statements should be read in conjunction with the financial statements and notes thereto included in our Form 10-K for our fiscal year ended October 31, 2015.

We were incorporated on March 19, 2009 in Nevada.  In 2009, we leased two unpatented mining claims located in Esmeralda County, Nevada.  In January 2011, we staked an additional twenty unpatented mining claims in the same area.  Due to the lack of capital, we terminated the mining lease in November 2013. We have no plans to conduct any work on the unpatented mining claims.

On November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,558,150 shares of our common stock.

Included as part of the acquisition were:

Garcia Field

 
leases covering 4,600 gross (4,600 net) acres,
 
four wells which produce natural gas and naturals gas liquids;
 
a refrigeration/compression plant which separates natural gas liquids from gas produced from the four wells; and
 
one injection well;

The Garcia Field is located in Las Animas County, Colorado, approximately 10 miles from Trinidad, Colorado.  Due to NG liquid prices, the field was shut in on October 31, 2015 and based on an impairment evaluation of the field the Company recorded impairment expense of $2,427,968 at October 31, 2015.

Denver-Julesburg Basin

 
leases covering 1,400 gross (1,400 net) acres,
 
three shut-in wells which need to be recompleted; and
 
three producing oil and gas wells.

Subsequent to December 2010, leases covering 160 acres in the Garcia Field were sold and leases covering 960 acres in the Garcia Field expired.  In 2013, we acquired a 640 acre lease (100% working interest, 80% net revenue interest) in the D-J Basin. The Denver/Julesburg (“D-J”) Basin is located in Northeastern Colorado.
  
During the twelve months ending December 31, 2016, we plan to drill one new well at a cost of approximately $750,000.

Horseshoe - Gallup Field

On October 14, 2014 we acquired approximately 98% of the outstanding shares of BIYA Operating, Inc. (“BIYA”) for cash of $174,000, 900,000 restricted shares of our common stocks having a value of approximately $900,000, a promissory note in the principal amount of approximately $1,860,000 (subject to adjustment for unknown liabilities) and the assumption of liabilities of BIYA in the approximate amount of $2,000,000.  The note will be effective when certain leases covering Indian tribal lands have been issued.  The note will bear interest at 5% a year and will be payable in October 2016.
 
 
 

Included as part of the acquisition were:
 
  48 producing oil and gas wells, all of which we operate,
     
 
leases covering approximately 10,000 gross and net acres, and
     
 
miscellaneous equipment.
 
BIYA’s has oil and gas leases covering approximately 10,100 acres and 48 producing wells. The majority of the leased acreage and producing wells are on Mountain Ute tribal land and are leased under an operating agreement with the tribe., Under the agreement, BIYA is to drill 3 wells by April, 2016, and 2 additional wells by April 2017 and April 2018, respectively. After April 2018, BIYA is required to drill 1 well per year. Per the agreement, if BIYA drills and completes a well, and establishes production from that well, it will own a lease of that well plus the applicable well spacing unit acreage surrounding that well, ranging from 40 acres to 320 acres based on the formation drilled, from the date of filing an application for permit to drill and for as long as hydrocarbons are produced in paying quantities. These leases carry royalties between 12.5% and 20%.
 
During the twelve months ending December 31, 2016, we plan to:
 
 
rework 50 producing and shut-in wells at a total cost of approximately $400,000
     
 
drill 5 new well at a cost of approximately $150,000 per well
 
On January 29, 2015, we entered into a participation agreement with Palo Petroleum, Inc. (“Palo”), where Palo acquired the right to participate in all of our future operations in the Horseshoe Gallup Field, not related to the existing wells or existing production, but including the drilling of any future wells. Palo also has the right to participate in such future operations as a 40.00% of 8/8 Working Interest owner on a heads-up or non-promoted basis.
 
In addition, we entered into an Area of Mutual Interest Agreement (“AMI”) with Palo relating to all lands in San Juan County, New Mexico outside the Horseshoe Gallup Field. Under this agreement, we or Palo will be entitled to participate in up to 50% in any leasehold or fee mineral interest within the AMI which is acquired by either Palo or us.
 
On September 1, 2015, we executed a non-binding letter of intent (“LOI”) with Bayou City Energy, L.P. (“BCE”) to jointly form an entity (“DrillCo”) for development drilling on our San Juan Basin properties in northwestern New Mexico.
 
The LOI covers BCE’s intent to fund a portion of 55 wells located across the Company’s existing 10,000 gross acre leasehold, as well as any future wells drilled during the ensuing three years (“Expansion Phase”) across an AMI in the Four Corner’s Uplift region of the San Juan Basin. The terms of the LOI call for the establishment and funding of an entity formed by the Company and BCE through which, BCE will fund between 50% and 90% of the wells’ costs in exchange for a preferred return and reversionary economic interests.  The drilling program is delineated into three phases a “Test Phase”, a “Development Phase” and an “Expansion Phase”. After a preferred return has been reached for BCE in each Phase, the Company’s percentage of net revenues from the wells increases to between 65% and 85%, depending under which Phase the wells are drilled.
 
Completion of this agreement will depend upon a number of conditions, including, but not limited to: completion of due diligence, approval of the final terms of definitive agreements by BCE’s Investment Committee and the Company, receipt of all necessary regulatory and third party consents and approvals, regulatory and permitting approval of all “Test Phase” wells and the successful fundraise by the Company of no less than $1,000,000.
 
Acquisition of Diversified Energy Services, Inc
 
On February 5, 2016, the Company entered into an Agreement to Exchange Securities of Diversified Energy Services, Inc. (“DESI”) a Colorado based company. The Company issued 20,032,710 shares in exchange for all the outstanding shares of DESI and assumed DESI’s liabilities effective February 1, 2016.
 
DESI offers a full range of services to the Rocky Mountain energy and construction industries and is dedicated to becoming the “one call, last call” solution to a full range of oil field service needs. DESI offers Crane Service, Well Site Construction, Materials Handling and Disposal, Trucking Services, Equipment Operation, and Rigging to the energy industry in the Denver Julesburg Basin and the Rockies. DESI employs upwards of 140 highly qualified, safety focused professionals and operators.
 
DESI will operate as a wholly owned subsidiary of Diversified Resources and is not expected to experience any change in management, operations, policies or business practices.
 
 
 
 
Production, Drilling Activity and Oil and Gas Leases
 
The following table shows our net production of oil, gas and natural gas liquids for the periods indicated:

   
Three Months Ended
January31,
 
   
2016
   
2015
 
             
Production:
           
Oil (Bbls)
    1,159       4,919  
Gas (Mcf)
    -       516  
 
The following table shows, as of January 31 2016, our producing wells, developed acreage, and undeveloped acreage, excluding service (injection and disposal) wells:
 
   
 
Productive Wells
 
Developed Acreage
 
Undeveloped Acreage(1)
 
Location
 
Gross
   
Net
 
Gross
   
Net
 
Gross
   
Net
 
                                 
New Mexico:
                               
Horseshoe
                               
Gallup Field
 
48
   
48
 
4,440
   
3,560
 
5,672
   
3,403
 
Colorado:
                               
Garcia Field
 
5
   
5
 
200
   
 200
 
 4,400
   
 4,400
 
D-J Basin
 
 4
   
 3.75
 
 160
   
 128
 
 760
   
 608
 
 
(1)
Undeveloped acreage includes leasehold interests on which wells have not been drilled or completed to the point that would permit the production of commercial quantities of natural gas and oil regardless of whether the leasehold interest is classified as containing proved undeveloped reserves.
 
Results of Operations
 
Material changes of certain items in our statements of operations included in our financial statements for the periods presented are discussed below. 
 
For the three months ended January 31, 2016 compared to the three months ended January 31, 2015

For the three months ended January 31, 2016 we reported a loss of $468,830 or $(0.02) per share compared to a net loss of $651,356 or $(0.03) per share for the three months ended January 31, 2015. The decrease in the net loss of $214,423 principally resulted from decrease of $275,307 in general and administrative expenses due to having fewer contractors/consultants.

Oil and gas sales were $34,548 and $240,274 for the three months ending January 31, 2016 and 2015, respectively; a decrease of $205,726 (86 %).  The decrease is principally attributable decrease in production and oil prices.
 
Lease operating expenses were $81,688 and $150,078 for the three months ending January 31, 2016 and 2015, respectively; a decrease of $68,890 (46%).  The decrease is principally attributable to decrease in production activates.
 
General and administrative expenses were $277,061 and $552,368 for the three months ending January 31, 2016 and 2015, respectively; a decrease of $275,307 (50%).  Consulting fee decreased by $185,525, due to decrease in equity investment activities and using fewer consultants, legal and accounting expense decreased by $41,151.
 
Depreciation expense was $74,502 and $41,768 for the three months ending January 31, 2016 and 2015, respectively; an increase of $32,734 (13%). The increase arises from additional assets added during 2015.
 
Depletion expense was $7,778 and $38,775 for the three months ending January 31, 2016 and 2015, respectively; a decrease of $30,997 (80%). The decrease is consistent with the decrease in production.
 
Production tax and royalty expense was $12,830 and $93,046 for the three months ending January 31, 2016 and 2015, respectively; a decrease of $80,216 (86%). The decrease is consistent with decrease in production and revenue.
 
Interest expense was $58,783 and $8,886 for the three months ending January 31, 2016 and 2015, respectively; an increase of $49,897 (359%). The increase arises from increase in interest bearing loan and amortization of discount on secured notes.
 
 
 
 
Liquidity and Capital Resources
 
Our sources and (uses) of funds for the three months ended January 31, 2016 and 2015 are shown below:
 
   
2015
   
2014
 
             
Cash used in operations
  $ (50,483 )   $ (702,559 )
Sale of common stock
    -       663,720  
Proceeds from notes payable
    200,000       -  
Payment on notes payable
    (6,802 )     (40,891 )
 
As of January 31, 2016, operating expenses were approximately $92,000 per month, which amount includes salaries and other corporate overhead, but excludes expenses associated with drilling, completing or reworking wells, lease operating expenses and interest expense.
 
Our material future contractual obligations as of January 31, 2016 are summarized as follows:

 
Total
   
10/31/16
   
10/31/2017
   
Thereafter
 
 
$
4,136,008
     
426,702
     
3,709,306
   
$
-
 

Any cash generated by operations, after payment of general, administrative and lease operating expenses, will be used to drill and, if warranted, complete oil/gas/ngl wells, acquire oil and gas leases covering lands which are believed to be favorable for the production of oil, gas, and natural gas liquids, and to fund working capital reserves.  Our capital expenditure plans are subject to periodic revision based upon the availability of funds and expected return on investment.
  
Trends
 
The factors that will most significantly affect future operating results will be:

 
the sale prices of crude oil and gas;
 
the amount of production from oil and gas wells in which we have an interest;
 
lease operating expenses;
 
the availability of drilling rigs, drill pipe and other supplies and equipment required to drill and complete wells; and
 
corporate overhead costs.

Revenues will also be significantly affected by our ability to maintain and increase oil, gas and natural gas liquids production.

Other than the foregoing, we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.
 
It is expected that our principal source of cash flow will be from the sale of crude oil and natural gas which are depleting assets. Cash flow from the sale of oil/gas production depends upon the quantity of production and the price obtained for the production. An increase in prices will permit us to finance operations to a greater extent with internally generated funds, may allow us to obtain equity financing more easily or on better terms. However, price increases heighten the competition for oil and gas prospects, increase the costs of exploration and development, and, because of potential price declines, increase the risks associated with the purchase of producing properties during times that prices are at higher levels.

A decline in hydrocarbon prices (i) will reduce cash flow which in turn will reduce the funds available for exploring for and replacing reserves, (ii) will increase the difficulty of obtaining equity and debt financing and worsen the terms on which such financing may be obtained, (iii) will reduce the number of  prospects which have reasonable economic terms, (iv) may cause us to permit leases to expire based upon the value of potential  reserves in relation to the costs of exploration, (v) may result in marginally productive wells being abandoned as non-commercial, and (vi) may increase the difficulty of obtaining financing. However, price declines reduce the competition for oil and gas properties and correspondingly reduce the prices paid for leases and prospects.

We plan to generate profits by acquiring, drilling and/or completing productive wells. We plan to obtain the funds required to drill, and if warranted, complete new wells with any net cash generated by operations, through the sale of securities, from loans from third parties or from third parties willing to pay our share of the cost of drilling and completing the wells as partners/participants in the resulting wells.  We do not have any commitments or arrangements from any person to provide us with any additional capital.  We may not be successful in raising the capital needed to drill wells.  Any wells which may be drilled may not produce oil or gas in commercial quantities.
 
 

 
As shown in the accompanying financial statements, the Company has incurred significant operating losses since inception, has an accumulated deficit of $7,561,544 and has negative working capital of $1,164,308 at January 31, 2016.  As of January 31, 2016, the Company has limited financial resources.  These factors raise substantial doubt about the Company's ability to continue as a going concern.  The Company's ability to achieve and maintain profitability and positive cash flow is dependent upon its ability to locate profitable mineral properties, generate revenue from planned business operations, and control exploration costs. Management plans to fund its future operations by joint venturing and obtaining additional financing, and commercial production. However, there is no assurance that the Company will be able to obtain additional financing from investors or private lenders, or that additional commercial production can be attained. 

Other than as disclosed above, we do not know of any:

 
trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, any material increase or decrease in liquidity; or
 
significant changes in expected sources and uses of cash.

 Critical Accounting Policies and Estimates
 
See Notes 3 to the financial statements included as part of this report for a description of our significant accounting policies.

Recent Accounting Pronouncements
 
We do not believe that any recently issued accounting pronouncements will have a material impact on our financial position, results of operations or cash flows.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
 
Not applicable.
 
ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our
Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q.  Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.  Based on that evaluation, our management concluded that, as of January 31, 2016, our disclosure controls and procedures were not effective due to the following:

 
1.
We do not have an audit committee;

 
2.
We did not have the proper segregation of duties with respect to our finance and accounting functions due to limited personnel. During the three months ended January 31, 2016 we had CFO/CAO that performed nearly all aspects of our financial reporting process, including but not limited to, preparation of underlying account records and systems, the ability to posting and recording journal entries and the preparation of the financial statements.  Accordingly, this created certain incompatible duties and a lack of review over the  financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations or assumptions used to compile the financial statements and related disclosures as filed with the SEC.  These control deficiencies could result in a material misstatement of our interim or annual financial statements that would not be prevented or detected; and

 
3.  
Our corporate governance activities and processes are not always formally documented.

As a result of the aforementioned deficiencies, our Principal Executive and Financial Officer concluded that the design and operation of our disclosure controls and procedures was not effective and that our internal control over financial reporting was not effective.
 
 
 
 
We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies. Since the acquisition of Natural Resource Group, Inc. on November 21, 2013, the board, as a whole, has been acting as the audit committee and independent board members constitute the compensation committee.  We have adopted a code of ethics and other procedures and changes in our internal controls in response to the requirements of Sarbanes Oxley § 404.  Effective February 15, 2016 we have hired a fulltime CFO/CAO and separated the accounting and reporting functions from our CEO. During the fiscal year ending October 31, 2016, we will continue to implement appropriate changes as they are identified, including changes to remediate the significant deficiencies in our internal controls.  There can be no guarantee that we will be successful in making these changes as they may be considered cost prohibitive.

Changes in Internal Control Over Financial Reporting
 
There were no changes in our internal control over financial reporting during the quarter ended January 31, 2016, that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the three months ended January 31, 2016 we did not sell any shares of our common stock or preferred stock to private investors.

ITEM 6.  EXHIBITS
 
   
   
   
   
101
The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing.

 
 
 
 
 
 
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
 
DIVERSIFIED RESOURCES, INC.
 
       
       
Date: March 14, 2016
By:
/s/ Paul Laird
 
   
Paul Laird, Principal Executive Officer
 
 
 
 
Date: March 14, 2016
By:
/s/ Abdul Khan
 
   
Abdul Khan, Principal Financial and Accounting Officer
 


 
 
 

 

 
 
 
 
 

 




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