Notice2022-02523
Millennium Investment & Acquisition Co Inc.
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 8, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 26 (Tuesday, February 8, 2022)</title>
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[Federal Register Volume 87, Number 26 (Tuesday, February 8, 2022)]
[Notices]
[Pages 7215-7217]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-02523]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 34495; 811-22156]
Millennium Investment & Acquisition Co Inc.
February 2, 2022.
AGENCY: Securities and Exchange Commission (``Commission'').
ACTION: Notice.
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Notice of application for deregistration under Section 8(f) of the
Investment Company Act of 1940 (the ``Act'').
Summary of Application: Millennium Investment & Acquisition Co Inc.
requests an order declaring that it has ceased to be an investment
company.
Applicant: Millennium Investment & Acquisition Co Inc.
Filing Dates: The application was filed on March 1, 2021 and was
amended on May 11, 2021, December 9, 2021 and January 21, 2022.
Hearing or Notification of Hearing: An order granting the request will
be issued unless the Commission orders a hearing. Interested persons
may request a hearing by emailing the Commission's Secretary at
<a href="/cdn-cgi/l/email-protection#c093a5a3b2a5b4a1b2b9b3ed8fa6a6a9a3a580b3a5a3eea7afb6"><span class="__cf_email__" data-cfemail="a6f5c3c5d4c3d2c7d4dfd58be9c0c0cfc5c3e6d5c3c588c1c9d0">[email protected]</span></a> and serving Applicant with a copy of the
request by email. Hearing requests should be received by the Commission
by 5:30 p.m. on February 28, 2022 and should be accompanied by proof of
service on Applicant, in the form of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by emailing to the
Commission's Secretary at <a href="/cdn-cgi/l/email-protection#e6b5838594839287949f95cba980808f8583a6958385c8818990"><span class="__cf_email__" data-cfemail="5201373120372633202b217f1d34343b3137122137317c353d24">[email protected]</span></a>.
ADDRESSES: The Commission: <a href="/cdn-cgi/l/email-protection#bae9dfd9c8dfcedbc8c3c997f5dcdcd3d9dffac9dfd994ddd5cc"><span class="__cf_email__" data-cfemail="a6f5c3c5d4c3d2c7d4dfd58be9c0c0cfc5c3e6d5c3c588c1c9d0">[email protected]</span></a>. Applicants:
<a href="/cdn-cgi/l/email-protection#6d090c1b04092d0901081e1e081f430e0200"><span class="__cf_email__" data-cfemail="90f4f1e6f9f4d0f4fcf5e3e3f5e2bef3fffd">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel; Lisa
Reid Ragen, Branch Chief, at (202) 551-6825 (Division of Investment
Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's website by searching for the file number, or for an
applicant using the Company name box, at <a href="http://www.sec.gov/search/search.htm">http://www.sec.gov/search/search.htm</a> or by calling (202) 551-8090.
[[Page 7216]]
Applicant's Representations
1. Applicant is a Delaware corporation and is an internally
managed, non-diversified, closed-end management investment company
registered under the Act. Applicant states that it is in the business
of owning and operating businesses that produce activated carbon and
sustainably cultivate cannabis in greenhouses and that it is no longer
engaged or proposing to engage, or holding itself out as being, in the
business of investing, reinvesting, owning, holding, or trading in
securities.
2. On August 14, 2020, Applicant announced that its Board of
Directors (the ``Board'') unanimously approved a proposal to deregister
as a registered investment company with the Commission (the
``Deregistration Proposal'') in its filing of a preliminary proxy
statement with the Commission (the ``Proxy Statement''). On or about
September 3, 2020, Applicant mailed to shareholders the Proxy Statement
soliciting shareholder approval of the Deregistration Proposal. The
Proxy Statement also stated that, after deregistering as an investment
company, Applicant would no longer be subject to regulation under the
Act. In addition, the Proxy Statement explained that Applicant would
continue to be managed by Applicant's sole current officer and overseen
by the Board, which would maintain substantially similar power,
authority and discretion as the Board had before deregistration and be
subject to the same duties under state law. Applicant held a meeting of
shareholders (the ``Shareholder Meeting'') on October 14, 2020, at
which the Deregistration Proposal was approved.
3. Applicant states that as of September 30, 2021, Applicant's
unconsolidated assets were comprised solely of (i) ``cash items'' (as
that term has been interpreted for purposes of Section 3(a)(1)(C) of
the Act) and (ii) interests in consolidated subsidiaries. Applicant
further states that it owns greater than 50% of the voting securities
of each of the consolidated subsidiaries (other than a newly formed
cannabis operator, Walsenburg Cannabis LLC (``WC''), where it will own
greater than 50% of WC's outstanding voting securities once it receives
approval for holding cannabis licenses in Colorado) and controls
(within the meaning of Section 2(a)(9) of the Act) each of the
consolidated subsidiaries. Applicant represents that no consolidated
subsidiary is an ``investment company'' within the meaning of Section
3(a) of the Act, and that no consolidated subsidiary is relying on the
exception from the definition of ``investment company'' in Sections
3(c)(1) or 3(c)(7) of the Act.
4. Applicant states that as of September 30, 2021, the value of
securities issued by the consolidated subsidiaries and owned by
Applicant was 100% of the value of Applicant's total assets, exclusive
of ``Government securities'' (as defined in the Act) and ``cash items''
(as that term has been interpreted for purposes of Section 3(a)(1)(C)
of the Act), on an unconsolidated basis (``Adjusted Total Assets''). As
of September 30, 2021, the assets of the consolidated subsidiaries were
collectively comprised of (i) ``cash items'' (as that term has been
interpreted for purposes of Section 3(a)(1)(C) of the Act), (ii)
security deposits and other assets, (iii) property, plant and
equipment, (iv) inventory and (v) right-of use (lease) assets.
Applicant represents that no consolidated subsidiary owns any
``investment securities'' (as defined in Section 3(a)(2) of the Act),
and that no consolidated subsidiary is therefore an investment company
within the meaning of Section 3(a)(1)(C) of the Act. Applicant states
that the consolidated subsidiaries are operating companies primarily
engaged in the production of activated carbon or the cultivation of
cannabis. Applicant states that it may establish other controlled
subsidiaries to carry out specific activities, as noted below,
consistent with Applicant's business of owning and operating businesses
focused on activated carbon, cannabis cultivation and other private
businesses it may acquire.
5. Applicant represents that it is anticipated that deregistration
will have no unfavorable tax consequences to Applicant or its
shareholders. Applicant states that it is currently taxed at the entity
level as a ``C-corporation'' by Federal and State tax authorities, and
anticipates that it will continue to be taxed as a C-corporation after
deregistration.
6. Applicant states that its periodic reports to shareholders,
investor presentations, press releases and website all indicate that
Applicant is implementing the Deregistration Proposal in accordance
with the disclosure in the Proxy Statement, and describe Applicant's
activated carbon and cannabis cultivation businesses. As a result of
these efforts, Applicant states that it is and holds itself out as a
holding company in the business of owning and operating businesses that
produce activated carbon and sustainably cultivate cannabis in
greenhouses.
7. In addition, Applicant represents that on October 1, 2021 it
filed a name change application with FINRA seeking to change its name
to Millennium Sustainable Ventures Corp. Applicant states that there
can be no assurance as to when, or if, FINRA will approve the name
change, and represents that it will not raise new capital until it has
completed its name change.
8. Applicant states that its current business activities will not
materially change upon receipt of the requested Order and completion of
the deregistration process. Applicant states that it currently operates
in the activated carbon and cannabis cultivation industries, and the
activities of Applicant and Applicant's directors and officers reflect
these operations and indicate that Applicant no longer operates as an
investment company, but rather is currently focused on owning and
operating businesses that produce activated carbon and sustainably
cultivate cannabis in greenhouses. Applicant states that it is
currently internally managed with David H. Lesser serving as Chairman
of the Board, CEO, Secretary and Treasurer. Applicant states that Mr.
Lesser is responsible for managing the business affairs and day-to-day
activities of Applicant. Applicant states that since Mr. Lesser became
Applicant's sole officer and a director on October 3, 2013, he been
working to shift Applicant's business to that of an operating company
focused on operating businesses. As part of this shift, Mr. Lesser has
led the acquisition and development of Applicant's activated carbon and
cannabis cultivation businesses, together with the divestment of
Applicant's ``investment securities'' (as defined in Section 3(a)(2) of
the Act).
9. Applicant states that it fully liquidated its sole investment
security position on June 1, 2021. Applicant states that it presently
operates businesses in the activated carbon and cannabis cultivation
industries and is seeking to generate income from the existing and
future operations of these businesses. Applicant further represents
that it presently is not generating revenue and is in a net loss
position and that substantially all of Applicant's net loss for the
three and nine months ended September 30, 2021 was attributable to
operating expenses. Applicant represents that it derives no material
portion of its net income after taxes from investment securities, and
Applicant represents that no subsidiary of Applicant expects to derive
a material portion of its net income after taxes from investment
securities. Applicant
[[Page 7217]]
represents that upon deregistering as an investment company, Applicant
and its consolidated subsidiaries will not derive a material portion of
their gross income from investment security assets.
10. Upon the issuance of the requested Order, Applicant represents
that it will issue a press release to shareholders indicating that it
is no longer a registered investment company and will cease indicating
in its financial statements that it is a registered investment company.
11. Applicant states that it is not currently a party to any
administrative proceeding or material litigation.
Applicant's Legal Analysis
1. Section 8(f) of the Act provides that whenever the Commission,
upon application or its own motion, finds that a registered investment
company has ceased to be an investment company, the Commission shall so
declare by order and upon the taking effect of such order, the
registration of such company shall cease to be in effect.
2. Section 3(a)(1)(A) of the Act defines an ``investment company''
as any issuer which ``is or holds itself out as being engaged
primarily, or proposes to engage primarily, in the business of
investing, reinvesting, or trading in securities.'' Section 3(a)(1)(B)
of the Act defines an ``investment company'' as any issuer which ``is
engaged or proposes to engage in the business of issuing face-amount
certificates of the installment type, or has been engaged in such
business and has any such certificate outstanding.''
3. Section 3(a)(1)(C) of the Act defines an ``investment company''
as any issuer which ``is engaged or proposes to engage in the business
of investing, reinvesting, owning, holding, or trading in securities,
and owns or proposes to acquire investment securities having a value
exceeding 40 per centum of the value of such issuer's total assets
(exclusive of Government securities and cash items) on an
unconsolidated basis.'' Section 3(a)(2) of the Act defines ``investment
securities'' as ``all securities except (A) Government securities, (B)
securities issued by employees' securities companies, and (C)
securities issued by majority-owned subsidiaries of the owner which (i)
are not investment companies, and (ii) are not relying on the exception
from the definition of investment company in paragraph (1) or (7) of
subsection (c).''
4. Applicant states that it is no longer an investment company as
defined in section 3(a)(1)(A), 3(a)(1)(B) or section 3(a)(1)(C). With
regard to section 3(a)(1)(A), Applicant represents that it is currently
focused primarily on owning and operating businesses that produce
activated carbon or cultivate cannabis, and argues that its historical
development, its public representations, the activities of its
directors and officers, and the nature of its present assets support
this assertion.
5. With regard to section 3(a)(1)(B), Applicant represents that it
is not engaged, and does not propose to engage, in the business of
issuing face-amount certificates of the installment type, has not been
engaged in such business and does not have any such certificate
outstanding.
6. With regard to section 3(a)(1)(C), Applicant represents that it
owns more than 50% of the voting securities of each of its consolidated
subsidiaries (other than WC until Applicant receives approval for
Colorado regulators to hold cannabis licenses at which point it will
own more than 50% of the voting securities of WC) and will own at least
50% of the voting securities of other non-investment company
subsidiaries it may form or acquire to ensure the value of investment
securities owned by Applicant is less than 40% of the value of
Applicant's Adjusted Total Assets.\1\
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\1\ Applicant represents that it possess an economic interest in
WC, through a convertible loan arrangement, that results in
Applicant having the right to substantially all of the rewards and
bearing substantially all of the risks of ownership of WC through
this convertible loan arrangement. Applicant states that WC has no
steady income, that Applicant funds virtually all of WC's expenses
through the convertible loan arrangement, and that WC's sole
managing member is the president of Millennium Cannabis, LLC, a
wholly-owned subsidiary of Applicant. Applicant further states that
even if its interest in WC were not considered sufficient to make WC
the equivalent of a majority-owned subsidiary of Applicant for
purposes of the Act, Applicant would (a) consider the fair value of
its loan to WC as of September 30, 2021 to be $671,000, which is the
value advanced under the loan as of September 30, 2021 and (b)
remove the ``right of use'' asset on its balance sheet attributable
to WC of $5,325,848. Applicant states that this would result in the
WC loan representing approximately 1.71% of Applicant's Adjusted
Total Assets, which is less than 40% of the value of Applicant's
Adjusted Total Assets. Therefore, Applicant represents that the
treatment of WC is immaterial to the analysis of whether Applicant
is an investment company within the meaning of Section 3(a)(1)(C) of
the Act.
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7. Applicant states that none of its consolidated subsidiaries is
an ``investment company'' within the meaning of Section 3(a) of the
Act, and no consolidated subsidiary is relying on the exception from
the definition of investment company for private funds set forth in
Section 3(c)(1) or 3(c)(7) of the Act.
8. Applicant states that it is thus qualified for an order of the
Commission pursuant to section 8(f) of the Act.
For the Commission, by the Division of Investment Management,
under delegated authority.
J. Matthew DeLesDernier,
Assistant Director.
[FR Doc. 2022-02523 Filed 2-7-22; 8:45 am]
BILLING CODE 8011-01-P
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