UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current
Report Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
October
5, 2015
BDCA
VENTURE, INC.
(Exact
name of registrant as specified in its charter)
Maryland
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000-53504
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26-2582882
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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405 Park Avenue
New York, New York 10022
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(Address
of principal executive offices and zip code)
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Registrant’s
telephone number, including area code: (720) 889-0139
Check the
appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the
following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.02 Termination of a Material Definitive Agreement.
On October 5, 2015, the Board of Directors of BDCA Venture, Inc. (“BDCA
Venture” or the “Company”) implemented the initial phase of its plan to
attempt to maximize value for BDCA Venture’s shareholders by approving
the termination of the Investment Advisory and Administrative Services
Agreement dated July 1, 2014 (the “Investment Advisory Agreement”)
between the Company and BDCA Venture Adviser, LLC, the Company’s
investment adviser (the “Adviser”). The Board of Directors also
determined that the Company will no longer make investments in new
venture companies and will now shift its focus to the orderly
monetization of the Company’s current holdings. However, the Company
may consider making opportunistic follow-on investments in its existing
portfolio companies.
The Board of Directors is continuing to assess the Company's investment
objective and strategy, use of available cash resources (including
distributions and stock repurchases) and its business operations going
forward.
According to the notice of termination of the Investment Advisory
Agreement delivered to the Adviser on October 5, 2015, the effective
date of termination of the Investment Advisory Agreement will be
December 6, 2015, unless shortened or extended by mutual written
agreement of the Company and the Adviser. Under the terms of the
Investment Advisory Agreement, the Adviser: (i) determines the
composition of the Company’s investment portfolio, (ii) determines which
securities the Company will purchase, retain or sell, (iii) identifies,
evaluates and negotiates the structure of investments the Company makes,
including performing due diligence on prospective portfolio companies,
and (iv) closes, monitors and services the investments the Company
makes.
The Company pays the Adviser a fee for its investment advisory services
under the Investment Advisory Agreement consisting of two
components: (i) a base management fee and (ii) an incentive fee. The
base management fee is calculated at an annual rate of 2% of the
Company’s gross assets and is paid quarterly. The incentive fee is
determined and payable in arrears as of the end of each calendar year
(or upon termination of the Investment Advisory Agreement, as of the
termination date), and equals 20% of the Company’s realized capital
gains, if any, on a cumulative basis from inception through the end of
each calendar year, computed net of all realized capital losses and
unrealized capital depreciation on a cumulative basis, less the
aggregate amount of any previously paid incentive fees, with respect to
each of the investments in the Company’s portfolio.
The Company will continue to pay the base management fee through the
effective date of termination. The Company will also calculate the
incentive fee due and payable to the Adviser as of the effective date of
termination. Based on the Company’s financial results through June 30,
2015, no incentive fee would be due and payable to the Adviser.
Pursuant to the Investment Advisory Agreement, the Adviser also
performs, or causes to be performed by other persons, all administrative
services in connection with the operation of the Company, including with
respect to its portfolio accounting and bookkeeping, performing
stockholder and investor relations services, determining and publishing
its net asset value, overseeing the preparation and filing of reports
filed with the SEC and its tax returns, and generally overseeing the
payment of its expenses and performance of administrative and
professional services rendered to the Company by others.
The Company currently reimburses the Adviser for the allocable portion
of expenses incurred by the Adviser in performing its administrative
obligations under the Investment Advisory Agreement, including the
allocable portion of compensation of the Company’s Chief Financial
Officer and Chief Compliance Officer, and their respective staff. The
Company will continue to reimburse the Adviser for its allocable share
of administrative expenses through the effective date of termination.
Following the effective date of termination, the Company will become
internally managed and the Adviser will no longer be obligated to
perform the services described above or provide personnel to serve as
officers of the Company. However, the Company currently intends to
engage one or more third parties, which may include the Adviser or one
of its affiliates, to provide certain administrative and other services
to the Company. The Adviser intends to cooperate with the Company to
provide an orderly management transition.
Item 7.01 Regulation FD Disclosure.
The Company issued a press release on October 7, 2015 announcing the
termination of the Investment Advisory Agreement. A copy of the press
release is attached as Exhibit 99.1, and is incorporated herein by this
reference.
Item 9.01 Financial Statements and Exhibits.
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(a)
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Not applicable.
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(b)
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Not applicable.
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(c)
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Not applicable.
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(d)
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Exhibits.
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Exhibit No. Description
99.1 Press
Release dated October 7, 2015
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 hereunto duly authorized.
Date:
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October 7, 2015
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BDCA VENTURE, INC.
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By:
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/s/ Frederic M. Schweiger
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Frederic M. Schweiger
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President and Chief Executive Officer
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4
Exhibit 99.1
BDCA
Venture Announces Termination of Investment Advisory Agreement
Board
Implements Plan to Become Internally Managed
NEW YORK--(BUSINESS WIRE)--October 7, 2015--BDCA Venture, Inc. (“BDCA
Venture” or the “Company”) (Nasdaq: BDCV), a closed-end fund that has
elected to be regulated as a business development company under the
Investment Company Act of 1940, as amended (the “1940 Act”), announced
today that its Board of Directors, on October 5, 2015, approved the
termination of the Investment Advisory and Administrative Services
Agreement dated July 1, 2014 (the “Investment Advisory Agreement”)
between the Company and BDCA Venture Adviser, LLC, the Company’s
investment adviser (the “Adviser”). The effective date of termination
will be December 6, 2015, unless shortened or extended by mutual written
agreement of the Company and the Adviser.
Following the effective date of termination, the Company will become
internally managed. However, the Company currently intends to engage one
or more third parties to provide certain administrative and other
services to the Company.
At the Company’s Annual Meeting held on July 9, 2015, stockholders
approved a proposal to have the Company’s Board of Directors consider
adopting a plan to maximize shareholder value within a reasonable period
of time.
Andrew Dakos, Chairman of the Board of Directors, commented: “Since
July, the new Board of Directors has been working on the development of
a plan to attempt to maximize value for BDCA Venture’s shareholders and
we believe today’s cost saving actions are an important first step in
accomplishing that goal. The Company will no longer make investments in
new venture companies and will now shift its focus to the orderly
monetization of its current holdings. While the expected timeline for
monetization is longer than we would like, we are fully committed to
managing the Company in the most streamlined fashion possible going
forward and using the Company’s current cash resources to optimize value
for shareholders. We look forward to reporting further details of our
plan as soon as they are developed.”
For additional information concerning the Company’s termination of the
Investment Advisory Agreement, please refer to the Company’s Current
Report on Form 8-K, which was filed with the SEC on October 7, 2015.
About BDCA Venture, Inc.
BDCA Venture, Inc. (www.BDCV.com) is a closed-end fund regulated
as a business development company under the Investment Company Act of
1940 that seeks to maximize total return by generating current income
through debt investments in growth companies and, to a lesser extent,
through capital appreciation. BDCA Venture’s shares are listed on Nasdaq
under the ticker symbol “BDCV.”
Forward-Looking Statements
This press release may contain statements of a forward-looking nature
relating to future events. These forward-looking statements are subject
to the inherent uncertainties in predicting future results and
conditions. These statements reflect BDCA Venture’s current beliefs, and
a number of important factors could cause actual results to differ
materially from those expressed in this press release, including the
factors set forth in “Risk Factors” set forth in BDCA Venture’s Form
10-K and Form 10-Q filed with the Securities and Exchange Commission
(“SEC”), and subsequent filings with the SEC. Please refer to BDCA
Venture’s SEC filings for a more detailed discussion of the risks and
uncertainties associated with its business, including but not limited to
the risks and uncertainties associated with investing in micro- and
small-cap companies. Except as required by the federal securities laws,
BDCA Venture undertakes no obligation to revise or update any
forward-looking statements, whether as a result of new information,
future events or otherwise. The reference to BDCA Venture’s website has
been provided as a convenience, and the information contained on such
website is not incorporated by reference into this press release.
CONTACT:
BDCA Venture, Inc.
Investor Relations:
Frederic
(Rick) M. Schweiger, 720-489-4912
Chief Executive Officer and
President
rschweiger@bdcv.com
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