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Investment Objective
Our primary investment objective is to achieve dramatic capital appreciation of our Equity Participations, rather than current income. We believe that our investment strategy can produce dramatic rates of return. We also believe that there are a sufficient number of potential investment opportunities available to enable us to achieve our investment objective.
Investment strategies. We believe we will achieve our investment objective by targeting either (i) our current Portfolio Companies, (ii) companies which we believe will grow rapidly and are committed to a merger with a public company or other public offering as soon as feasible or (iii) companies that are financially extended but which are in the process of turning around and require formal or informal restructuring. By focusing on public or soon-to-be public companies or requiring mergers with public companies, we believe we can efficiently "harvest" our gains and be in a position to reinvest our gains in our transactions. We expect to have equity participations as a component to almost all investments. As we accumulate capital, we expect to make the following investments:
Secured or unsecured loans and advances, bearing interest, or the use of our credit to guarantee performance, to Portfolio Companies where we already have a significant equity interest or if such loans or guarantees are accompanied by significant Equity Participations or equity inducements such as common stock, preferred stock, preferred stock convertible into common stock, warrants to acquire common stock and/or the capability to convert these loans or advances into equity;
Secured loans to, or guarantees of performance to secured lenders of, financially troubled private companies that have agreed in advance to merge, at our option, with an existing Portfolio Company or other public company;
Secured or unsecured loans to companies contemplating a specific financing activity which will provide us with a source of repayment (a "Bridge" loan);
Secured or unsecured, post-petition loans and advances to companies under the protection of the bankruptcy court if such companies have otherwise agreed to participate in our Equity Participation strategy;
Sale-lease back of technology rights and/or the leasing of equipment if such financial arrangements are related to our Portfolio Companies or have related Equity Participations;
Equity securities, including common equity and preferred equity, which may have additional equity features such as attached warrants or the preferred shares may be convertible into common equity. Such investments may be in exchange for fees or services or may be additional investments or an inducement for others to invest; and
Marketable securities of public companies with low market capitalization's, characterized as "Micro-Cap Companies" or private placements in such companies.
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