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Well I bought 900,000 shares today between .0019 and .002. Hope this runs good or I won't stop hearing it from my loud mouth but beautiful Cuban wife.
-------------------- Rule 1: Always Protect Your Capital Rule 2: Earn slow, Don't lose fast
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Well folks, here is to tomorrow! I bet the real run will happen going into tomorrow's close as the conference call at 3 pm is going to bring a lot of excitement and more buying once McMillen addresses shareholders. Now all we need is some institutional buying and we will be set.
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quote:Originally posted by Hustla: 50 gun salute to Juice for all the timely and money makin PR's. Oh make sure you all fire in the air, not at Juice we really need him here.
I don't want to have to go out with a bullet proof vest and an arsenal of weapons like Maurice Clarett
-------------------- The difference between genius and stupidity is that genius has its limits
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Introductory Statements
Forward-Looking Statements and Associated Risks. This Report contains forward-looking statements. Such forward-looking statements include statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans, (e) our anticipated needs for working capital, (f) our lack of operational experience, and (g) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based largely on our company's expectations and are subject to a number of risks and uncertainties, including those described in "Business Risk Factors" of our Form 10-K for the year ended December 31, 2005. Actual results could differ materially from these forward-looking statements as a result of changes in trends in the economy and our company's industry, demand for our products, competition, reductions in the availability of financing and availability of raw materials, and other factors. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Report will in fact occur as projected.
Overview
Homeland Security Capital Corporation (together with any subsidiaries shall be referred to as the `Company,' `we,' `us' and `our') was incorporated in Delaware on August 12, 1997, and is located in Arlington, Virginia. The Company focuses on the acquisition and development of homeland security businesses.
The Company's original business was to develop and manufacture, at third party plants, digital set top boxes and digital video servers for the interactive television and high speed Internet markets.
On June 3, 2003, the Company elected to become a business development company ("BDC"), to be regulated pursuant to Section 54 of the Investment Company Act of 1940, as amended (the "Investment Company Act"). A business development company is an investment company designed to assist eligible portfolio companies with capital formation and management advice. The Company then changed its business plan to primarily seek investments in developing companies.
On December 30, 2005, at a special stockholders meeting (the "Special Meeting"), the stockholders of the Company voted to amend the Certificate of Incorporation of the Company to change the name to `Homeland Security Capital Corporation' and voted to withdraw the Company's election as a BDC. Accordingly, the Company has changed its business plan to primarily seek acquisition of companies that provide homeland security products and services.
The Company is seeking to build consolidated enterprises through the acquisition and integration of multiple businesses in the homeland security industry. We will seek to create long-term shareholder value by taking controlling interests in companies that provide homeland security products and services and helping them develop through superior operations, management and acquisitions. Our value creation strategy is designed to foster significant growth at our platform companies by providing leadership and counsel, capital support and financial expertise, strategic guidance and operating discipline, access to best practices and industry knowledge. We are targeting emerging companies in fragmented sectors of the homeland security industry. These target companies are generating revenues from promising security products and services but face challenges in scaling their businesses to capitalize on opportunities in the homeland security industry.
As part of the Company's new business strategy, the Company acquired a majority interest in Nexus Technologies Group, Inc. ("Nexus") on February 8, 2006 through the purchase of $3.4 million in preferred stock of Nexus. Nexus is a mid-Atlantic security integrator for the corporate and governmental security markets. Based in Hawthorne, N.Y., Nexus' subsidiaries began operations in 2001. Nexus specializes in non-proprietary integrated security solutions, including access control, alarm, video, communication, perimeter protection and bomb and metal detection security systems. Where applicable in this annual report, references to the `Company,' `we,' `us' and `our' shall include Nexus.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that are complex and those that require significant judgments and estimates in the preparation of our financial statements, including valuation of our investments. Management relies on historical experience and on other assumptions believed to be reasonable under the circumstances in making its judgment and estimates. Actual results could differ materially from those estimates.
Revenue Recognition - Nexus recognizes revenues on its security system installation and integration contracts using the percentage of completion method.
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 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. Actual results could differ from those estimates.
Fair Value of Financial Instruments - The carrying amount of items included in working capital approximates fair value because of the short maturity of those instruments. The carrying value of the Company's debt approximates fair value because it bears interest at rates that are similar to current borrowing rates for loans of comparable terms, maturity and credit risk that are available to the Company.
Debt Offering Costs - Debt offering costs are related to private placements and are being amortized on a straight line basis over the term of the related debt, most of which is in the form of convertible debentures. Should conversion occur prior to the stated maturity date the remaining unamortized cost is expensed.
Investment Valuation - Investments in equity securities are recorded at fair value, represented as cost, plus or minus unrealized appreciation or depreciation, respectively. The fair value of investments that have no ready market, are determined in good faith by management, and approved by the Board of Directors, based upon assets and revenues of the underlying investee companies as well as general market trends for businesses in the same industry. Because of the inherent uncertainty of valuations, management's estimates of the values of the investments may differ significantly from the values that would have been used had a ready market for the investments existed and the differences could be material.
Income Taxes - The Company accounts for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are determined based upon the differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance related to the deferred tax assets is also recorded when it is more likely than not that some or all of the deferred tax asset will not be realized.
Results of Operations
Three Months Ended June 30, 2006 Compared With the Three Months Ended June 30, 2005
Revenues
For the three months ended June 30, 2006, the Company had sales of $2,053,707 consisting of fees earned by Nexus on security systems installation and integration contracts. The Company had no sales for the three month period ended June 30, 2005. The increase in sales is due to the implementation of the Company's new business strategy of acquiring and integrating businesses that provide homeland security products and services.
Cost of goods sold
For the three months ended June 30, 2006, cost of sales was $1,166,315 consisting of materials, labor and other costs incurred by Nexus associated with security systems installation and integration contracts. The Company had no cost of sales for the three months ended June 30, 2005. The increase in cost of sales is due to the implementation of the Company's new business strategy of acquiring and integrating businesses that provide homeland security products and services.
General and administrative expenses
General and administrative expenses for the three months ended June 30, 2006 were $1,273,635 compared to $192,239 for the three months ended June 30, 2005. The increase of $1,081,396 or 562% in general and administrative expenses is primarily due to general and administrative expenses that were incurred in the acquisition of Nexus. The increase consisted of additional professional fees of $38,125 for the acquisition of Nexus, additional personnel costs of $701,138, increases in facility and insurance expenses of $188,085 and general administrative costs of $154,048. These costs and other expenses were incurred in connection with the Company's change in business strategy for the three month period.
Other income and expense
The Company had net other income of $860,016 for the three months ended June 30, 2006 compared to net other expenses of $(179,547) for the three months ended June 30, 2005 for an increase of $1,039,563 or 579%. Income was increased by a positive change in the derivative valuation of $1,194,955, settlement of trade payables of $169,684 and interest income of $5,761. Other income and expense was decreased by increases in interest expense of $42,560, amortization of debt discounts of $236,291, amortization of debt offering costs of $43,332 and recording of minority interest in the consolidated Nexus subsidiaries of $8,654.
Net income (loss)
As a result of the foregoing, the Company recorded a net income of $473,773 for the three months ended June 30, 2006 compared to a net loss of $371,786 for the three months ended June 30, 2005. This represents an increase in the net income of $845,559 or 227%.
Six Months Ended June 30, 2006 Compared With the Six Months Ended June 30, 2005
Revenues
For the six months ended June 30, 2006, the Company had sales of $2,741,737, consisting of fees earned by Nexus on security systems installation and integration contracts. The Company had no sales for the six month period ended June 30, 2005. The increase in sales is due to the implementation of the Company's new business strategy of acquiring and integrating businesses that provide homeland security products and services.
Cost of goods sold
For the six months ended June 30, 2006, cost of sales was $1,931,386, consisting of materials, labor and other costs incurred by Nexus associated with security systems installation and integration contracts. The Company had no cost of sales for the six months ended June 30, 2005. The increase in cost of sales is due to the implementation of the Company's new business strategy of acquiring and integrating businesses that provide homeland security products and services.
General and administrative expenses
General and administrative expenses for the six months ended June 30, 2006 were $2,329,966 compared to $392,920 for the six months ended June 30, 2005. The increase of $1,937,046 or 493% in general and administrative expenses is primarily due to general and administrative expenses that were incurred in the acquisition of Nexus. The increase consisted of additional professional fees of $242,089 for the acquisition of Nexus, additional personnel costs of $1,255,457, increases in facility and insurance expenses of $184,604 and general administrative costs of $254,896. These costs and other expenses were incurred in connection with the Company's change in business strategy for the six month period.
Other income and expense
The Company had net other income of $248,044 for the six months ended June 30, 2006 compared to net other expenses of $(279,647) for the six months ended June 30, 2005 for an increase of $527,691 or 189%. Income was increased by a positive change in the derivative valuation of $805,077, recording a minority interest in the loss of the consolidated Nexus subsidiary of $60,225, and interest income of $15,554. Other income and expense was decreased by increases in interest expense of $22,423, amortization of debt discounts of $240,345, amortization of debt offering costs of $31,691, a reduction in the settlement of trade payables of $18,762 and a reduction in investment income of $39,944.
Net loss
As a result of the foregoing, the Company recorded a net loss of $1,271,571 for the six months ended June 30, 2006 and a net loss of $672,567 for the six months ended June 30, 2005. This represents an increase in the net loss of $599,004 or 89%.
Liquidity and Capital Resources
The primary source of financing for the Company since its inception has been through the issuance of common and preferred stock and debt. The Company had cash on hand of $646,280 at June 30, 2006 and $1,094,061 at December 31, 2005. Our primary needs for cash are to fund our ongoing operations until such time as they begin to generate sufficient cash to fund operations and to have cash available to make additional acquisitions of businesses that provide homeland security products and services. While we believe that we have sufficient cash on hand to satisfy our current operating commitments, we will require significant additional funding in order to make additional acquisitions.
While we currently do not have any commitments in place for additional funding, on August 29, 2005, the Company entered into term sheet agreement with Cornell Capital Partners to enter into a $50 million standby equity distribution agreement (the "SEDA Financing"). Based on the SEDA term sheet, Cornell Capital Partners shall commit to purchase up to $50 million of Common Stock of the Company over the course of 24 months after an effective registration of the Company's common stock, par value $.001 per share (the "Common Stock"). The Company shall have the right, but not the obligation, to sell Common Stock to Cornell Capital Partners, in advances up to $1,000,000 each. Upon closing, the Company shall issue to Cornell restricted shares and/or warrants of the Company's Common Stock in an amount equal to 2% of the commitment amount based on a share price of $0.001 per share. The number of restricted shares issued shall be limited to less than 4.9% of the total outstanding shares of the Company at closing. Upon each advance, Cornell Capital Partners shall receive directly from escrow cash compensation equal to 5% of the gross proceeds of such advance. The Company shall sell to Cornell Capital Partners the Common Stock at a purchase price equal to 98% of the market price, which is defined as the lowest closing bid price of the Common Stock during the five consecutive trading days after the date an advance notice is given to Cornell Capital Partners. As of August 14, 2006, the Company has not received any definitive documents in connection with the SEDA Financing. The final terms and conditions of the SEDA Financing may be subject to modification as mutually agreed upon by the Company and Cornell Capital Partners at the time of entering into definitive agreements.
The Company entered into a Securities Purchase Agreement with Cornell Capital Partners, dated as of February 6, 2006, which provided for the purchase by Cornell Capital Partners of a Convertible Debenture (the "Debenture") in the amount of $4,000,000, which debenture is convertible into Common Stock. The conversion price of the Debenture shall be equal to the lesser of (1) $0.01 or (2) a ten percent discount to the lowest daily volume weighted average price of the Common Stock for the thirty days preceding conversion. Cornell Capital Partners will be entitled to convert the Debenture at a conversion price into Common Stock, provided that Cornell Capital Partners cannot convert into shares of Common Stock that would cause Cornell Capital to own more than 4.9% of the issued and outstanding Common Stock. The Debenture will bear interest at 5% per annum and the principal amount will be payable on the third anniversary of the effective date of the Debenture. If the Common Stock is trading below the conversion price, the Company may redeem the Debenture at any time upon the payment of a redemption premium equal to twenty percent of the amounts redeemed.
On February 6, 2006, the Company entered into an Investment Agreement with Cornell Capital Partners, pursuant to which the Company exchanged with Cornell Capital Partners 1,000,000 shares of Series G Convertible Preferred Stock (the "Series G Preferred Shares") for 450,000,000 shares of the Company's Common Stock owned by Cornell Capital Partners. Each share of Series G Preferred Shares may be converted, at Cornell Capital Partners' discretion, into 450 shares of the Common Stock. The Series G Preferred Shares are senior to all Common Stock and all series of preferred stock of the Company. Each share of Series G Preferred Share has a liquidation preference of $0.10 plus any accrued and unpaid dividends. The holders of Series G Preferred Shares are not entitled to receive any dividends. The Company paid a $10,000 structuring fee to Yorkville Advisors Management, LLC in connection with the transaction.
During the six months ended June 30, 2006, we had a net decrease in cash of $(447,781). Our sources and uses of funds were as follows:
Cash Flows from Operating Activities
We used net cash of $(3,788,018) in our operating activities during the six month period ended June 30, 2006. Our net cash used in operating activities resulted primarily from the Company's net loss of $(1,271,571) for the six months ended June 30, 2006, a use of $(2,547,690) from net changes in operating assets and liabilities for the six months ended June 30, 2006 and the net change in derivative and debt discounts of $321,744. These uses have been offset by $271,216 from the use of stock issued as compensation and for payment of expenses, $21,065 in depreciation and amortization and $72,220 in amortization of debt offering costs for the six months ended June 30, 2006.
Cash Flows from Investing Activities
We used net cash of $(237,492) in our investing activities during the six month period ended June 30, 2006, consisting primarily $202,991 in purchases of fixed assets and an increase of $240,000 in other assets, offset by an increase of $205,499 in minority interest in consolidated subsidiaries.
Cash Flows from Financing Activities
We provided cash of $3,577,729 from financing activities during the six month period ended June 30, 2006, consisting of $4,000,000 in proceeds from convertible debentures issued less $430,000 in costs associated with the issuance of those debentures. We also converted debentures and received net proceeds of $7,729 in cash.
As of June 30, 2006, we had positive net working capital of $176,914.
-------------------- Rule 1: Always Protect Your Capital Rule 2: Earn slow, Don't lose fast
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As a result of the foregoing, the Company recorded a net loss of $1,271,571 for the six months ended June 30, 2006 and a net loss of $672,567 for the six months ended June 30, 2005. This represents an increase in the net loss of $599,004 or 89%.
THAT CANT BE GOOD !!!!!!!!!!!!!!!!!!!!!!!!
-------------------- GOD BLESS AMERICA, THE UNION, AND ALL OF OUR VETERANS!!!!!!!
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Actually this is very good! This is the overall end result:
Net income (loss)
As a result of the foregoing, the Company recorded a net income of $473,773 for the three months ended June 30, 2006 compared to a net loss of $371,786 for the three months ended June 30, 2005. This represents an increase in the net income of $845,559 or 227%.
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This means the company is going green sooner than originally expected. I think what everyone is missing is that HMSC has decided to tap into the $50 million in financing so they can continue to acquire companies. What does that mean for us investors??? Easy, Cornell has to purchase HMSC stock in the open market that is only going to drive the price up. Cornell cannot sell that stock until a later date as it will be restricted. Usually the rule of thumb is 2 years!
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OK so this is what I'm getting here, since this is a quarterly report, its the three months from April to June that really matters. So they had a net income and not a loss during those three months compared to that same period in 2005.
Well this is good news. They are definitely making more money each quarter that passes.
Let it sprint MMs!!!!!
-------------------- Rule 1: Always Protect Your Capital Rule 2: Earn slow, Don't lose fast
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quote:Originally posted by TINPOZ: whats whats the speculative short term on this???????????????????
Well it looks like they didn't close out the acquisitions from March like I had hoped. Either those deals fell through or it is still ongoing. As for the short term, HMSC should be completely green this 3rd quarter as their Nexus revenue is going to exceed their overall expenses. If HMSC is able to complete the two prior acquistions, then they will be fully profitable for the rest of this year giving them more working capital to acquire more Homeland companies. I really thought the company was going to be in the red by a much wider margin than what I am reading with this news release.
The short term outlook looks good, not great, but good. They need to complete those deals or have other ones on the table to increase their working capital for the rest of this year. Nexus alone will likley put them profitable but I would like to see the originally project revenue of 30-36 million. Right now, all I see is about 9 million for the year. Sure that is fantastic for a new subpenny company but the sooner they can boost revenue the sooner they can take those shares off the market and truly increase shareholder value.
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quote:Originally posted by Hustla: OK so this is what I'm getting here, since this is a quarterly report, its the three months from April to June that really matters. So they had a net income and not a loss during those three months compared to that same period in 2005.
Well this is good news. They are definitely making more money each quarter that passes.
Let it sprint MMs!!!!!
Correct, just focus on the quarter as they are getting stronger and stronger each time. Remember, for the 6 month figures they included was mostly to retiring the previous debt that McMillen had to deal with when he took over Celerity and then transitioned the company into the Homeland Security sector. With that came expensive write offs of all prior equipment, debt, and various things such as transitioning and moving operations to Washington DC. Can't wait to hear what McMillen has to say during the shareholders conference call. This news released early is a good sign as I think HMSC is on their way up!
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Any expenses you see compared to last year is the result of acquiring Nexus and their employees. The bottom line is that Revenue is increasing and is exceeding expenses even with having to write off prior debt before McMillen came on board. Very good news folks! McMillen is the real deal.
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First off, I missed the N54C in Jan '06. This type filing allows the company to pursue financing aggressively, but in exchange for that shareholders have less protection. (This is what PISSES me off about people opening a thread every other PR. I had a detailed write up of PXIT / UNCN N54C actions on a PXIT thread, now I have to go search for it. Is a N54C poisonous or bad? No, but neither PXIT or UNCN has faired well changing to a non BDC. Of course UNCN was under the threat of a R/S for 6 months before finally filing it to take place this month. PXIT appear to be diluting whores. I will find the PXIT thread and post, and repost it here.
The financials : One important thing there is the ratio between current assests and current liabilities. 1.04 to 1 isn't really bad. (Current Ratio - Divide Current Liabilities into Current Assets Also called the Working Capital Ratio, it measures the extent to which current assets are available to meet current liabilities (due within the next 12 months). The Current Ratio indicates whether the business has ample working capital i.e. the excess of current liabilities over current assets used to meet short-term obligations, quickly take advantage of opportunities, and qualify for favourable credit terms.
Ratio of a company's current assets to its current liabilities (aka short term debt). Used as a measure of a company's ability to survive over the near term, by being able to meet obligations with available funds. A current ratio of 1.0 means that the company could theoretically survive for one year, even if it made no sales. NOTE: A Current Ratio of 1.0 (also written as 1:1) is acceptable. I prefer 2.0 or higher....less risk)
To the Income Statements (aka Statement of Operations). With these statements, you will always see comparative figures from one reporting period to the next identical period (one year to the previous year, 1st qtr to the previous 1st qtr, etc.). It is important to look at both periods to determine corporate growth or declines in revenues which affect Net Income. From Second quarter to second quarter comparison, this shows good growth, From 2005 1st half yr to 2006 1st half yr, we see an 89% increase in losses, that is due to probably an acquisition. They spent money in early 2006, to make money in 2nd quarter 2006. Nothing to panic over.
Read the NOTES in the Form 10. I haven't yet, but that is where the snakes usually are, Read them for yourselves. Learn to do things for yourselves, it can only make you better.
Although I can read financials some, I tend to discount them when we are down in the dirt dealing with pennies. They are good if you find a penny company with sterling financials, but really fundementals down here don't make penny stocks run.
If I may, call your attention to IGAI, (not that this will run like that one did), but they had good financials, but the stock did not react to them until they PR'd a synopsis of those financials, highlighting the positives. We are somewhat in the same position with the CEO being interviewed tomorrow near close. Hopefully he will drill the positives, and slather on some nice future actions pointing to future growth. If he dares whispers the words, "buy back", this will go more then one might expect. We will have to see how well he handles the interview. He being a former Congressman, should certainly know how to spin the yarn.
Not sure exactly what to expect tomorrow. Might hold tight in this .0019 / .0021 trading range for most of the day. Could gap, (that be good, especially if it gaps past that .0029 resistance), I don't really expect that. I think it will really come down to EOD or Wednesday to see the reaction of the CEO being interviewed.
-------------------- A million seconds is 13 days. A billion seconds is 31 years.
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Will~ you hit the nail on the head. The overall market is NOT going to understand this report as there is a lot of small print forcing even the best to read between the lines. I agree that we will most likely trade sideways, a little up, a little down, until McMillen can break it down for the average investor to understand.
For me, I want to know what McMillen's plans for HMSC for the rest of this year. I want to know the status of the prior two acquisitions and when we can expect to see further acquisitions and deals to boost the company value.
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I would be remiss if I didn't mention a good friend that taught me to read financials. Wallace#1, a pretty good trader, and a good and decent person, who had his posting privaledges revoked here at All Stocks.
-------------------- A million seconds is 13 days. A billion seconds is 31 years.
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Now let me vent a bit. You all see the value in keeping a thread intact, and current. Next time someone that is not familar with reading financials can reference this thread, and come here to to learn a few things that might help them. If this takes off like a scaleded dog, you will always remember where you learned a little more about something you weren't familar with, on the HMSC thread. If it doesn't take off, well, you'll probably forget all about HMSC. LOL
-------------------- A million seconds is 13 days. A billion seconds is 31 years.
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Here's my post regarding BDC vs. nonBDC. I think any impact the N54C had on HMSC has already been factored into the PPS since beginning '06. It is irrelevent at this time, but might benefit someone to understand what a N54C is next time they see one filed.
will Member
posted March 25, 2006 14:47 -------------------------------------------------------------------------------- PXIT has file a form N-54C.
Definition:
N-54C Notification of withdrawal of election to be subject to Sections 55 through 65 of the Investment Company Act of 1940 pursuant to Section 54[c] of the Act.
I am not going to attempt to interpret sections 55 through to 65 but will post the links, so that everyone can read them for themselves :
A company to conduct business as an Investment company rather than as a BDC subject to the Investment Company Act.
It uusally gives a company a greater number of funding options, and allows capital to be applied directly to its operations and the expansion of its business. Structured as an investment company should provide a more suitable environment to raise capital.
As a BDC companies are more regulated and have a higher standard of financial requirements they must meet.
Here's a section from the PXIT filing :
Our ceasing to be a BDC would result in our shareholders losing certain protections, including the following:
• We would no longer be subject to the requirement that we maintain a ratio of assets to senior securities (such as senior debt or preferred stock) of at least 200%.
• We would no longer be prohibited from protecting any director or officer against any liability to our company or our shareholders arising from willful malfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of that person’s office.
• We would no longer be required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement.
• We would no longer be required to ensure that a majority of our directors are persons who are not “interested persons,” as that term is defined in section 56 of the Investment Company Act, and certain persons that would be prevented from serving on our board if were a BDC (such as investment bankers) would be able to serve on our board.
• We would no longer be subject to provisions of the Investment Company Act regulating transactions between BDCs and certain affiliates and restricting our ability to issue warrants and options.
• We would be able to change the nature of our business and fundamental investment policies without having to obtain the approval of our shareholders.
• We would no longer be subject to provisions of the Investment Company Act prohibiting the issuance of securities at below net asset value.
• We would be no longer be subject to the other provisions and protections set forth in Sections 55 through 64 of the Investment Company Act and the rules and regulations promulgated thereunder.
• Our ceasing to be a BDC will not absolve us for any actions taken by us while a BDC and we could still become liable for such prior actions.
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