Support from Private Equity Firm Partners

Morris Business Development Company (“MBDE”) has filed a Form NT-54A to elect to be regulated as a Business Development Company (“BDC”) as outlined in the Investment Company Act of 1940. Current economic and financial market conditions along with the Securities Exchange Commission (“SEC”) regulations have created a new relevance for this financial growth model for American Business.

Alternative financial strategies for growth through reverse merger with an existing public company shell or an initial public offering (“IPO”) as discussed above in the sections (Is a Reverse Merger, IPO or BDC Spin-Out the Best Way for You to Raise Capital?” have become more difficult to evaluate due to a lack of underwriter interest and SEC scrutiny for fraud and manipulation.

The Morris Business Development Company (“MBDE”) business model focuses both on your needs and on the investment community needs that will feed your growth in full compliance with SEC requirements.

And, the intrinsic value of your company is increased by fostering growth in revenue, profits and dividends. The main services provided to our Portfolio companies to help you are as follows:

*raise capital for the initial stages of development as a private or public company

*develop a corporate financial structure that is appealing to the financial community for continued investment

*create investor and market communication systems that will continue to generate interest in the current and future performance of the company

*develop and improve the business model that will drive the growth of sales, profits and dividend

*understand, prepare for and comply with SEC Government accounting and reporting regulations including Sarbanes Oxley rules for reporting public companies.

*spin-off shares of the portfolio company and pursue registration and listing for trading

*raise significant capital as a public company through institutional PIPE funding.

Support from Private Equity Firm Partners

Some of the MorrisBDC portfolio investments will also be supported by our Private Equity Firm partners, Morris Capital Fund I and other independent private funds. Both affiliated and non-affiliated funds may participate in funding the spin-off and mentoring process followed by a larger cash investment round or PIPE financing.

The (“PIPE’) or “Private Investment in Public Equity” by funds is predicated on the portfolio company’s stock being publicly traded. Once questions of due diligence and portfolio company valuation are answered, then significant additional capital should become available to our public portfolio company versus any private stock company. In addition, the value of the public portfolio company should be significantly higher as a public versus private owned company due to the securities higher price earnings (“PE”) multiple generally associated with more liquid investments that can be sold into the public stock market. Further, earlier investments in the portfolio company by private equity fund should help maintain interest by the funds in additional equity investment along with funding other events that increase the value of the portfolio company. (See section on “Increase the Value of Your Company 3 to 5 Times.”

How Morris Business Development Company Values a Portfolio Company

IInvestment of time and resources other than money by Morris Business Development Company in your Company is made to increase the amount and certainty of the return on the MBDE and investor capital invested.

Investors in a portfolio company including MBDE expect your portfolio company to grow sales and profits. That growth enables us to spin you out as a successful public company. Your company shares will be dividend out to our MBDE shareholders by MBDE. Also, MBDE retains some of your shares to build the value and expand the capabilities of MBDE to further assist your company and other portfolio companies. MBDE will retain from 10% to 50% of the shares it acquired from these companies as part of its stock portfolio.
Multiple investments by MBDE will provide diversification of investments to investors with the amount of ownership acquired in any portfolio company ranging from a minority interest of 10% to total acquisition of 100% of the portfolio company. However, it is expected that a minority interest will be more typical.

We may help you raise convertible debt capital on a staged basis to match your need and the ability to use and manage the new investment. In addition, the MBDE will continue to mentor your company throughout our investment period and assist in the achievement of both business and financial goals.