Thursday December 14, 12:18 pm Eastern Time
Press Release
Harris & Harris Group Declares Deemed Dividend
NEW YORK--(BUSINESS WIRE)--Dec. 14, 2000--Harris & Harris Group, Inc. announced today that its Board of Directors, in accordance with rules governing a Regulated Investment Company (``RIC'') under Sub-Chapter M of the Internal Revenue Code, has declared a designated undistributed capital gain dividend (also known as a deemed dividend) for 2000. The Company intends to elect treatment as a RIC for 2000. There can be no assurance that the Company will qualify as a RIC for 2000.
This deemed dividend will be an amount equal to 100 percent of its 2000 net capital gain, minus $479,569. It is payable to shareholders of record as of December 29, 2000. The exact amount of the deemed dividend will not be known until the Company completes its year-end audit. Shareholders of record on the record date will be provided with the exact amount of the per share deemed dividend no later than March 1, 2001. At the present time, the unaudited amount of the 2000 net capital gain (minus $479,569) is approximately $15,827,822, or $1.73 per share. The full-year net capital gain and thus the deemed dividend will change to reflect full-year audited results.
The following simplified example illustrates the tax treatment under Sub-Chapter M of the Internal Revenue Code for the Company and its individual shareholders with regard to a theoretical $9,175,431 or $1.00 per share net long-term capital gain retained by the Company and designated as an undistributed capital gain or deemed dividend:
1. The Company would pay a corporate-level federal income tax of 35
percent or $3,211,401 on the undistributed capital gain, or $0.35
per share. 2. Individual shareholders who are taxable at the highest marginal
rate would increase their cost basis in their stock by $0.65 per
share. They would pay a 20 percent federal capital gains tax on
100 percent of the undistributed capital gain of $1.00 per share
or $0.20 per share in tax. Offsetting this tax, shareholders would
receive a tax credit from the Company equal to 35 percent of the
undistributed capital gain, or $0.35 per share.
For more complete information about the Company's tax status and the implications for the Company's shareholders, please see the Company's 1999 Annual Report on Form 10-K.
Harris & Harris Group is a Business Development Company with 9,175,431 common shares outstanding.
Detailed information about Harris & Harris Group and its holdings can be found on its website at hhgp.com.
This press release may contain statements of a forward-looking nature relating to future events. Statements contained in this press release that are forward looking statements are intended to be made pursuant to the Safe Harbor Provisions for the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release. Please see the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company's actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. |
