The Company received its holdings in TIO, consisting of common stock, Series A convertible preferred stock (“Series A Preferred Stock”), and Series B convertible preferred stock (“Series B Preferred Stock”) in connection with its sale to TIO of
Based on the number of shares of TIO common stock outstanding as of the date of the Merger, if the Series B Preferred Stock are converted into TIO common stock, the Company would hold common stock of TIO equal to 75.0% of TIO’s issued and outstanding common stock. However, because the conversion of the Series B Preferred Stock will result in the Company becoming the controlling shareholder of TIO, such conversion will require approval of the TIO shareholders, in addition to the consent of Nasdaq to the change of control of TIO.
Under
Following the Distribution, Dozy Mmobuosi, the controlling beneficial holder of the Company, is still expected to beneficially hold a majority of the voting shares of TIO and become its controlling shareholder following the distribution. Consequently, Nasdaq approval of the change of control of TIO will still be required.
Further, because the liquidation of the Company may occur prior to Nasdaq approval of a change of control of TIO, the Company intends to cause a trust to be established which will hold the Series B Preferred Stock and subsequently distribute shares of TIO common stock to Company shareholders when the Series B Preferred Stock is ultimately converted. The trust is expected to work with TIO to achieve Nasdaq approval and will terminate following the Distribution.
The Board’s decision to liquidate the Company and distribute its holding in TIO is the result of the pending expiration of a one-year grace period provided to the Company under the Investment Company Act of 1940 (“1940 Act”). Under the 1940 Act, a company holding investment securities constituting 40% or more of its unconsolidated assets may be considered a temporary investment company and not subject to the requirements of the 1940 Act for a one-year period if certain conditions are met.
About The Company
Safe Harbor and Forward-Looking Statements
This press release contains certain forward-looking statements regarding possible future circumstances. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, any risks and uncertainties with respect to the Company’s operations, as well as those contained in the Company’s quarterly, annual, and periodic filings with the
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