NEW YORK, Jan. 20 /PRNewswire-FirstCall/ -- Blackhawk Capital Group BDC,
Inc., ("Blackhawk") (OTC Bulletin Board: BHCG.OB), a Delaware corporation
registered as a business development company under the Investment Company Act
of 1940, as amended ("Investment Company Act") announced that on January 15,
2009 it entered into a Subscription Agreement and Purchaser Questionnaire
("Agreement") with EquitySmith, Inc. ("ESI") pursuant to which ESI agreed to
purchase 600,000 shares ("Shares") of common stock, $0.00001 par value per
share ("Common Stock") at a purchase price of $5.00 per share, for an
aggregate purchase price of $3,000,000. Blackhawk's offering ("Offering") of
the Shares to ESI was pursuant to a Rule 506 private placement offering being
conducted by Blackhawk under Regulation D of the Securities Act of 1933, as
amended ("Securities Act"). The Offering is being made pursuant to Rule 506
and only to "qualified institutional buyers" ("QIBs") and "accredited
investors" as those terms are defined under the Securities Act. The Shares
ESI will purchase pursuant to the Agreement represent approximately 1.81% of
Blackhawk's outstanding shares of Common Stock. ESI has the right to
syndicate all or part of its $3,000,000 investment to third-party QIBs. There
are no conditions for the closing of the purchase of the Shares by ESI. As of
the date of this Form 8-K, the closing has not occurred.
Craig A. Zabala, Chairman and President of Blackhawk noted: "ESI's
participation is important for Blackhawk." He stated that Blackhawk had also
retained John W. Loofbourrow Associates, Inc. ("JWL") and ESI to act as
placement agents to raise equity capital for Blackhawk pursuant to a placement
agreement dated January 16, 2009 ("Placement Agreement"). JWL and ESI will
solicit interest from a limited number of potential investors who are QIBs and
"accredited investors" in connection with raising equity capital for
Blackhawk. In return for the placement agents' services, subject to the
provisions of this paragraph and the Placement Agreement, Blackhawk will pay a
placement agent a cash fee equal to ten percent (10%) of the purchase price
($5.00 per share) of any securities placed with a prospective investor by a
placement agent and purchased by the investor. The placement fee for any
shares of Common Stock purchased by ESI shall be payable to JWL. Thus, ESI
shall not receive any placement fees on shares purchased by it. The placement
fees associated with the sale of shares up to $3,000,000 to ESI shall be
payable to Loofbourrow. Placement fees for all remaining shares sold in the
Offering will be split 70% to Loofbourrow and 30% to ESI for sales of shares
of $3,000,001 to $4,000,000, and 100% to ESI for the sales of the remaining
shares up to the maximum Offering of $10,000,000. Blackhawk does not have to
reimburse a placement agent for its expenses. The Placement Agreement
commenced on January 16, 2009 and terminates on the earliest to occur of: (i)
ten (10) calendar days after written notice given to Blackhawk by Loofbourrow
or ESI of a potential investor purchasing at least 600,000 shares that will
close on the purchase of shares within five (5) calendar days of the date of
such written notice; (ii) twenty-eight (28) calendar days from January 15,
2009; or (iii) the date of closing and funding by any investor of a
subscription agreement for a minimum of 600,000 Shares (the "Term"). The
parties may extend the Term by mutual agreement.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any security. The securities are being
offered pursuant to a private placement memorandum to be filed with the
Securities and Exchange Commission and pursuant to Rule 506 under Regulation D
under the Securities Act of 1933. The securities have not been registered
under any state securities laws. Neither the Securities and Exchange
Commission nor any state securities commission has in any way passed upon the
merits of, or given approval to, guaranteed or recommended the securities
offered by Blackhawk or the terms of the offering or has determined that the
securities are exempt from registration, or made any finding that the
statements in the offering circular are accurate or complete.
For additional information, please refer to Blackhawk's Form 8-K filed
with the Securities and Exchange Commission with respect to the transactions
described above.
Safe Harbor Statement
Information contained in this release, other than historical information,
should be considered forward-looking, and may be subject to inherent
uncertainties in predicting future results and conditions. These statements
reflect Blackhawk's current beliefs and are subject to a number of
risk-factors, including: general economic and investment conditions which
affect Blackhawk and its operations (including its portfolio company); need
for equity capital and no assurance it can be obtained; valuation and illiquid
nature of any portfolio investments; high degree of risk from investing in
private companies; the regulated environment in which we operate; and the
competitive market for investment capital and opportunities. Please see
Blackhawk's Form 10-K for the fiscal year ended December 31, 2007, and its
Form 10-Q for the fiscal quarter ended September 30, 2008, previously filed
with the Securities and Exchange Commission, for a detailed discussion of the
risks and uncertainties associated with Blackhawk's business. Except as
otherwise required by Federal securities laws, Blackhawk undertakes no
obligation to update or revise forward-looking statements for new events and
uncertainties.
Contact:
Blackhawk Capital Group BDC, Inc.
Dr. Craig A. Zabala
President and Chief Executive Officer
(212) 566-8300
SOURCE Blackhawk Capital Group BDC, Inc.