Investment Company


The Company operates as public venture capital fund.  Although this business plan inherently means our portfolio will be risky, we believe a portfolio of this nature can generate significant returns.  We have an extraordinary attribute in the form of an estimated $40 million net operating loss carry-forward ("NOL"). A majority of this NOL expires in 2020 but has a few million dollar tail thereafter. This NOL still has a life of about two years when it is reduced to about $5 Million and allows for the very effective accumulation of investment capital.

Because of our bankruptcy antecedents, even though we have more than 100 shareholders, we can operate as an "exempt" investment company. This means that we are exempt from regulation under the Investment Company Act of 1940 (the "40 Act"). This exemption allows us to "mark to market" our investment portfolio as an investment company, yet does not constrain our concentration in any single investment or subject us to other complex regulatory restrictions and reporting requirements of the 40 Act. To maintain this exemption we are restricted from making a public sale of additional shares and must also maintain certain ownership concentrations. We believe neither of these requirements will seriously restrict the continued execution of our business plan. (See "Regulation").

Our primary investment objective is to achieve capital appreciation rather than current income. Our business is to invest or lend money to either high growth and/or financially extended companies. These are higher risk situations and we will select our "Portfolio Companies" if we believe they are poised for rapid changes in value. We generally only act as a lender if we have or can obtain a significant "Equity Participations" in the companies to which we lend.  Our Equity Participations in the Portfolio Companies could include equity, warrants, or other conversion rights.  Often we take a combination of Equity Participations in any one transaction. We also perform consulting assignments for a fee to determine if we should seek a long-term relationship with a particular company. In many cases, we acquire investments at very low prices in conjunction with our consulting engagements.

Our strategy is to invest in Portfolio Companies that are generally public companies, or companies that are positioned to become public in the foreseeable future through an offering or merger into a public company.  To realize on our equity participations, a secondary market must exist or develop for a Portfolio Company's common stock.  We will likely assist Portfolio Companies in this secondary market development.