I kinda enjoyed:
ITEM 1. DESCRIPTION OF BUSINESS
Nicholas Investment Company, Inc. ("the Company" or "NIVI") was incorporated under the laws of Nevada on January 22, 1998 to engage in any lawful activity as shall be appropriate under laws of the State of Nevada. Until April 2003 Nicholas Investment Company was in the business of acquiring and leasing real estate. Nicholas Investment raised $202,800.00 in 1998 and purchased four single-family dwellings, which were subsequently sold.
On April 1, 2002, Nicholas Investment Company, Inc. (Nicholas), and Virgin Lakes Development Corporation (Virgin Lakes), completed an Agreement of Reorganization whereby Nicholas issued 30,000 shares of its common stock in exchange for all of the outstanding common stock of Virgin Lakes. Immediately prior to the Agreement of Reorganization, Nicholas had 56,727 shares of common stock issued and outstanding. The acquisition was accounted for as a recapitalization of Virgin Lakes because the management of Virgin Lakes controlled Nicholas after the acquisition was completed. At the effective date of the transaction, each share of Virgin Lakes was converted into 2.89 shares of Nicholas. Virgin Lakes was treated as the acquiring entity for accounting purposes and Nicholas was the surviving entity for legal purposes. There was no adjustment to the carrying value of the assets or liabilities of Virgin Lakes and its wholly owned subsidiaries, nor was there any adjustment to the carrying value of the net assets of Nicholas. Virgin Lakes Development Corporation, had three subsidiaries, The Town Square, LLC (100% owned), Shadow Ridge Water Company (86% owned), and H & L Specialties (70% owned).
As of December 31, 2002, Management determined that the value of these businesses was substantially below book and determined to liquidate each of these holdings. As such, all assets, liabilities, and activities of these businesses have been included as discontinued operations. An impairment loss of $125,521 has been recorded to reduce the value of the assets associated with the discontinued operations to zero. In April 2003, the Company exchanged all of its ownership in each of these companies in exchange for the forgiveness of the related party debts and the assumption of trade payables associated with the businesses.
On May 14, 2003, two of the Company's officers and Directors submitted their resignations. The Company's remaining Director, Darryl Schuttloffel, appointed two new Directors and officers and charged them with developing and implementing a business strategy. On May 20, 2003, Mr. Schuttloffel also resigned as an officer and director of the Company.
On June 4, 2003, the Company issued two million (2,000,000) shares of Series B Preferred Stock to MRG California in exchange for $5,000 and a further commitment to provide working capital to the Company. These preferred Series B shares entitled the holder to 100 votes per share of preferred stock, effectively giving voting control of the Company to MRG California. On September 17, 2003, MRG sold all of the Preferred Series B stock to Shane Traveller, the Company's Chief Financial Officer, in exchange for $5,000. In addition, the Company repaid to MRG a total of $28,500 representing all monies advanced to the Company by MRG and legal expenses incurred. On November 10, 2003, the Company issued 8,450,000 shares of Series C Convertible Preferred Stock to Mr. Traveller in exchange for all of the outstanding shares of Series B Preferred Stock, which were then cancelled. The Series C Preferred Stock is non-voting stock, but can convert into common stock on a 1:1 basis.
On November 18, 2003, the Company acquired 100% of the common stock of Javelin Holdings, Inc., a California-based private company that provides management consulting, accounting, and financial services to public companies, in exchange for 200,000 shares of the Company's restricted common stock. Prior to the acquisition by the Company, Javelin Holdings was controlled by members of the Company's board of directors.
On November 20, 2003, the Company's Board of Directors elected to be regulated as a business investment company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company is required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded or that has assets less than $4 million.
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Investment Strategy
Nicholas Investments intends to make strategic investments in cash-flow positive companies with perceived growth potential. The Investment Committee has adopted a charter wherein these two criteria a weighed against other criteria including strategic fit, investment amount, management ability, etc. In principle, the Company will prefer to make investments in companies where Nicholas can acquire at least a 51% ownership interest in the outstanding capital of the portfolio company.
As a Business Development Company, the Company is required to have at lease 70% of its assets in "eligible portfolio companies." It is stated in the Investment Committee Charter that the Company will endeavor to maintain this minimum asset ratio.
Portfolio Investments
The Company presently has two portfolio investments: Javelin Holdings, Inc., a California company specializing in management and financial services, and SINO UJE, a Hong Kong company headquartered out of Temecula, California that engages in distribution activities throughout Asia. The Company owns 100% of the common stock of Javelin Holdings, which it acquired in exchange for 200,000 shares of the Company's restricted common stock. As of December 31, 2003, the Company's investment in Javelin Holdings was valued at $376,000, based on a combination of Javelin's 2003 net revenues plus its net assets.
As of December 31, 2003, the Company had not completed its investment transaction with SINO UJE, but had advanced SINO UJE approximately $94,000, which amount is reflected as a Note Receivable in the accompanying financial statements. In January 2004, the Company acquired approximately 95% of the total capital stock of SINO UJE in exchange for 150,000 shares of the Company's common stock plus a commitment to provide a line of credit to SINO of up to $1,000,000. As this transaction occurred subsequent to 12/31/03, the Company has valued its investment in SINO at $94,000, representing the amount of the advance to SINO, as of 12/31/03.
A discussion of each of the Company's portfolio investments is as follows:.....
sec.gov
and from the same source:
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
Market Information
The Company's Common Stock has been traded on the Pink Sheets since March 2002 under the symbol "NIVI" and since November 2003 under the symbol "NIVM." The following table sets forth the trading history of the Common Stock on the Pink Sheets for each quarter since March 2002 through December 31, 2003, as reported by Dow Jones Interactive. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
Quarter Endings
Quarterly High
Quarterly Low
Quarterly Close
3/29/2002 60.00 20.00 60.00
6/28/2002 90.00 1.40 1.40
9/30/2002 20.00 0.30 0.30
12/31/2002 8.00 0.20 0.20
3/31/2003 2.00 0.12 1.60
6/30/2003 0.20 0.12 0.12
09/30/03 28.00 4.00 16.00
12/31/03 .80 0.21 0.21 |
