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SI: StockTalk: Five Dollars and Under: DRGI (Diversified Resources Group)
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To: george eberting who wrote (748)
From: D. RUTTER
Monday, Aug 23 1999 12:13AM ET
Reply # of 749
NEW INVESTORS****MUST READ*************
reposted from yeasterday
Feature Article on DRGI in todays Raleigh News&Observer!!
Angling for piece of housing pie
A Cary developer and a penny stock company find room for another North Raleigh
community.
By DUDLEY PRICE, Staff Writer
RALEIGH -- Cary developer Mike Matheny and a Florida penny stock company,
which emerged recently from bankruptcy reorganization, want to build an upscale
golf-course community with as many as 1,600 homes in the Falls River area in North
Raleigh.
The question of whether they can succeed is nearly as big as their plans.
Diversified Resources Group of Sarasota, Fla., and Matheny Development of Cary have
contracted to buy 607 acres bounded by Falls of the Neuse, Durant and Dunn roads.
The tract is just north of the 600-acre Falls River subdivision that East West Partners of
Chapel Hill began developing in 1996.
The 607-acre site is owned by PCF Falls, an investment group headed by apartment
magnate David Falk Sr. PCF Falls bought the land in November for $9.5 million from
Duke Management.
Diversified Resources plans to close on the property in December and is planning a mix
of apartments, townhouses and single-family homes priced from $200,000 to $400,000,
as well as retirement housing, a commercial area and 200-room hotel, offices and a
championship golf course, according to company news releases. The project would
begin next year, be built over five years and bring in an estimated $5 million a year in
profits from land sales, the company said.
Diversified Resources said it has contracted with Westminster Homes, a division of
Washington Homes, to buy 300 single-family and multi-family building lots valued at
more than $15 million, and has an agreement with Ocean Golf Group to buy the
golf-course property and hotel site for $2 million.
Diversified said it also has a letter of intent from Drucker & Falk, the Triangle's largest
apartment management and development company, to buy land for 800 apartments in the
project. According to the Diversified Web site, it has commitments from national tract
builders for the remainder of the property.
But will it happen?
Neither Matheny nor Diversified officials could be reached for comment.
Several people active in Cary's real-estate community said it would be Matheny's largest
project in this region. They said Matheny, who has been made director of real estate for
Diversified Resources, has developed smaller projects in Cary such as Heritage Pines, a
96-acre, adults-only community on Carpenter Upchurch Road; Ivy Creek, a
150-townhome project off Kildaire Farm Road; and a townhouse project on about 18
acres at the Preston development.
And Diversified Resources only emerged from a Chapter 11 reorganization on July 13.
The company, which had filed for bankruptcy protection in September 1997, said it had
reduced nearly $6 million in debt to less than $500,000 but had assets of only $42,576.
The company, which formerly operated under the name Data 1 Inc., was founded in
1984 and has offered a variety of products and services, including a marketing operation
for MCI, computer chips and sports marketing for NASCAR. It now sells electronic
batteries and a saliva-based HIV screening test.
The company changed its name to Diversified Resources in May, the same month it paid
its president and chief operating officer $100,000 for his resignation. Two months later,
the vice president of finance received the same buyout.
According to an audit done in June by Jones, Jensen & Co., a Salt Lake City accounting
firm, Diversified "essentially has reverted to the status of a start-up company."
Diversified Resources apparently is banking on the North Raleigh land deal along with its
battery sales and HIV tests to raise its stock price. Over the past year, its shares have
fluctuated from a high of 29.5 cents to a low of 1.5 cents and closed Friday at 9 cents,
up .9 cents from the day before. Shares are traded on the OTC Bulletin Board, an
electronic quotation service.
In an Aug. 6 news release, Diversified Resources said it was in the process of filing
documents to be listed on the Nasdaq Stock Exchange and that one requirement was
having a minimum share price of $5.
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DRGI: DIVERSIFIED RESOURCES GRP INC(OTC)
Monday Aug 23, 1999 3:44PM ET
Symbol
Last Trade
Change
High
Low
Volume
DRGI
3:19PM
0.092
+ 0.002
2.22%
0.096
0.090
93,809,000
Prev Close
Open
Bid
Ask
Last Tick
Avg Volume
52-week range
0.090
0.094
0.090
0.092
-
2,716,800
0.015 - 0.295
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