SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-K  x
        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934o
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended: March 31, 2006  Commission File Number: 0-16734  ADVANTAGE CAPITAL DEVELOPMENT CORP. (Exact name of registrant as specified in its charter)   Nevada
        87-0217252(State or other jurisdiction of  incorporation or organization)
        (I.R.S. Employer Identification No.)19066 N.E. 29thAvenue, Aventura, FL
        33180(Address of principal executive offices)
        (Zip Code)   Registrants telephone number including area code:
        (305) 749-1186  Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.001 par value  Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value  Indicate by check mark whether the registrant (a) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxNoo  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o  The aggregate market value (the average bid and asked prices) of the voting stock held by non-affiliates of the registrant on August 4, 2006 was approximately $347,727.38.  The number of shares of Common Stock, $0.001 par value, outstanding on August 8, 2006 was 19,900,090 shares*.      PART I



ITEM 1. BUSINESS



OVERVIEW



The U.S. capital markets have traditionally had many sources of capital available for small businesses formation. These have ranged from self-financing by entrepreneurs to financing through friends and family members, financing by wealthy individual investors, often referred to as angel investors, and venture capitalists. Government programs have offered entrepreneurs funding through the Small Business Administration (SBA), Small Business Investment Companies (SBICs), and other programs. Many other disparate funding sources exist today.



We believe the collapse of the technology sector of the stock market has contributed to consolidation of financial services firms, as well as a more vigilant and aggressive regulatory environment. Additionally, many angel investors and friends and family have become more risk averse. We believe even sophisticated investors have, for a number of reasons, been more reluctant to commit capital to help fund private and public company needs. These changes have limited the sources for start up or expansion capital for both private and public companies.



We believe this new environment has created a market opportunity for companies like ours. We believe that we can help meet the short and medium term financing needs of these companies by utilizing a variety of financing structures to obtain returns in excess of risk adjusted market returns.



THE COMPANY

We were incorporated as Justheim Petroleum Company in Nevada in 1952. C.E.C. Management Corp. was merged into Justheim Petroleum Company on December 31, 1986, and was renamed C.E.C. Industries Corp. Prior to the merger, Justheim had historically engaged in the business of acquiring, holding and selling oil and gas leaseholds and retaining overriding royalty rights. C.E.C. Management Corp. was primarily in the business of engineering consulting and designing and marketing customized minerals processing systems and equipment. C.E.C.s primary business had been the manufacture and sale of minerals processing equipment through its wholly-owned subsidiary, CEI, formerly Custom Equipment Corporation.



We completed a corporate restructuring on July 16, 2004, following the resignation of Brian Dvorak, the previous President, Chief Executive Officer and Chief Financial Officer of C.E.C. Industries Corp. As part of our restructuring, we changed the name of the Company to Advantage Capital Development Corp. on August 19, 2004.



We are an internally managed, non-diversified, closed-end investment company that elected on August 12, 2004 to be regulated as a business development company under the 1940 Act. The decision to be regulated pursuant to Section 54 of the 1940 Act was made primarily to better reflect our anticipated future business and for developing relationships. As a business development company, we are required to meet regulatory tests, the most significant of which relate to our investments and borrowings. A business development company is required to invest at least 70% of its total assets in private or thinly traded public U.S.-based companies. A business development company also must meet a coverage ratio of total assets to total senior securities, which include all of our borrowings and any preferred stock we may issue in the future, of at least 200%. See Regulation as a Business Development
Company. In addition, we intend to elect to be treated for federal income tax purposes as a RIC under the Internal Revenue Code with the filing of our federal corporate income tax return for 2004, which election would be effective as of January 1, 2004. See Certain U.S. Federal Income Tax Considerations. We have focused our investments in developing companies, but have not limited our focus on investments in any particular industry.










We have pursued what we believe to be an opportunity within the market for meeting the short and medium term financing needs of small private and public companies. Weutilized the funding commitment we received from Cornell Capital to pursue our business plan of (i) investing in small public companies through the issuance by them of secured convertible debentures in the $200,000 to $750,000 range and (ii) investing in private companies that may be good targets for spin offs or registration. We also intend to provide the Company with the flexibility to pursue special situations that provide good opportunities for our stockholders. We have attempted to meet those needs by utilizing a variety of financing structures while trying to achieve returns in excess of risk adjusted market returns.



The financing structures we utilize are debt or convertible debt, equity or convertible equity as well as follow on investments in the form of warrants and other convertible instruments. We may also purchase aged convertible securities, take over existing financing facilities such as private investments in public entities (often referred to as PIPEs), equity lines, bridge loans and other similar debt instruments. We expect many of our investments will be made in conjunction with other institutional and private investors and expect to structure investments with these groups or on a stand alone basis. We have attempted to maintain investments that have liquidity and to limit bridge or mezzanine financing to a maximum term of 270 days except in extraordinary circumstances. We have also outlined our goal of having a clearly defined exit strategy for each investment with a cash on cash return
of 25% per annum. We attempt to diversify our portfolio to limit our exposure to any one investment based on size, term, liquidity or structure. We will also offer managerial assistance to each of our portfolio companies and reserve the right to be compensated by the portfolio companies at market rates for such services.



In August 2004, the Company entered into a Business Development Agreement with Global IT Holdings, Inc. (Global), a New York-based holding company created to acquire targeted internet technology (IT) staffing firms. The Company received a twenty one percent (21%) or 593,250,000 shares of Globals common stock, in exchange for its commitment to provide business development services to Global. On March 6, 2006, the Company issued a stock dividend distribution dividend of 331,799,021 of its common shares of Global IT Holdings, Inc. to shareholders of record on February 20, 2006. The Company will still retain a 9.9 percent stake in Global the IT staffing holding company. The fair market value of the common stock retained by the Company was $50,246 at March 31, 2006 and is recorded as an unrealized gain. The Company invested $500,000 through a collateralized senior debenture.
The note bears interest at six and one-half percent (6.5%) and matures on December 31, 2004. The Company advanced Global an additional total of $165,000 with similar terms as above with an interest rate of 10%. In February 2005, the Company extended the due date of its Series A 6.5% notes with Global IT Holdings, Inc. until March 31, 2006. The Company has extended the due date of the notes to December 31, 2006. During the year ended March 31, 2006 the Company advanced an additional $76,300 with similar terms as above The Company recognized capital raising of $7,000 associated with this transaction. For the year ended March 31, 2006 the Company recognized interest income of $28,826 associated with these debentures. In July, 2005 the Company received a repayment of $250,000 of principal. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $61,855 and interest income of $24,268 associated with these debentures. As of March 31, 2006 and 2005,
Global owed the Company $491,300 and $615,000, respectively.



In October 2004 the Company entered into a promissory note and security agreement in the amount of $50,000 with a company. In February 2006 the Company received a $10,000 payment on the note. The note bears interest at a rate of 10% per annum. The third party has agreed that the return on the note will be 25% and will have 90 days from the date of the note repayment to pay the difference. For the year ended March 31, 2006 the Company recognized $4,754 of interest income associated with this promissory note. For the year ended March 31, 2005 the Company recognized $2,069 of interest income associated with this promissory note. As of March 31,2006 and 2005, the Company was due $40,000 and $50,000, respectively.








In October 2004, the Company purchased a convertible debenture of American Publishing, Inc. from an unrelated third party in the amount of $18,259. The debenture is convertible into $36,518 of common stock upon demand by the Company. During the year ended March 31, 2005 the Company converted a total of $10,000 into common stock and recognized gains of $26,592 on the sale of the common stock. As of March 31, 2006 the Company still retains common stock with a basis pf $1,244 and a fair market value of $8,481. In addition, on March 29, 2006 the Company loaned American Publishing an additional $17,000 at a rate of 10% per annum due June 29, 2006 or is convertible into common stock at a price of 75% of market value. For the year ended March 31, 2005 the Company recognized gains of $5,870 associated with the sale of common stock.



In November 2004 the Company purchased a $200,000 8% secured convertible debenture from Colmena Corp. (Colmena). The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the thirty (30) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.30 per share. The warrants expire 2 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. In March 2005 the Company purchased an additional $200,000 of 8% secured convertible debenture of
Colmena Corp from an unrelated third party. Colmena is currently in default on filing its registration and is subject to a 2% per month penalty. For the year ended March 31, 2006 the Company recognized income from penalties of $96,000 and interest income of $32,002 associated with these secured debentures. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $20,000 and interest income of $6,839 associated with these secured debentures. As of March 31,2006 and 2005, Colmena owed the Company $400,000.



In December 2004 the Company purchased $250,000 of 5% convertible debenture from Cinema Ride, Inc.(Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a)an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance.



In January 2005 the Company purchased an additional $280,000 of 5% convertible debenture from Cinema Ride, Inc.(Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006
the Company recognized interest income of $27,998 associated with these convertible debentures. In March, 2006 the Company converted $25,000 of the debenture into common stock, the Company recognized a gain of $3,115 on the sale of the common stock.



Cinema Ride defaulted on the Secured Note issued to the Company in the
principal amount of $530,000 for failing to have its registration statement
declared effective by the specified Filing Date according to the terms of the
Note. The Company rescinded such default and entered into a settlement with
Cinema Ride to cure the liquidated damages owed to Advantage Capital.
The terms of the Agreement consisted of three equal installments of
$10,600.00, payable on the 18thday of each month beginning October 18, 2005 and ending December 18,
2005 (Payment Plan). The Company further agreed to extend the date
on which Borrower must have its registration statement declared effective
by the United States Securities and Exchange Commission to November 30,
2005. If the Borrowers registration statement is declared effective by
November 30, 2005, the Company agreed to forgo the October and
November payments due from the Borrower according to the Payment Plan. If the
Borrowers registration statement is not declared effective
by November 30, 2005, the Default shall be reinstated and all amounts due
and owing to the Company shall immediately become payable. For the year
ended March 31, 2006 the Company recognized $175,200 in financing revenue as a
result of those penalties. For the year ended March 31,








2005 the Company recognized income from capital raising fees of $53,000 and interest income of $8,066 associated with these convertible debentures. As of March 31,2006 and 2005, Cinema Ride owed the Company $505,000 and $530,000, respectively.



For the year ended March 31, 2006 the Company purchased an additional $40,750 of common stock of Global Triad, Inc. (Global Triad). The Company sold a total of $68,988 of the common stock for the year ended March 31, 2006, the Company recognized gains of $20,133 associated with sale of sale of these securities. For the year ended March 31, 2005 the Company recognized gains of $7,766 associated with sale of sale of these securities.



In July 2005, the Company entered into a 30 day promissory note and security agreement in the amount of $30,000 with a company. The note bears interest at a rate of 18% per annum. The note was repaid in September 2005. The Company received a total of $39,000 which included legal fees, capital raising fees and interest.



In September 2005, the Company purchased a convertible debenture of Cargo Connection, Inc. from an unrelated third party in the amount of $50,000. The debenture is convertible into common stock upon demand by the Company at a 80% of the average 3 lowest closing bid prices over the five days prior to conversion. During the year ended March 31, 2006 the Company converted a total of $30,000 and recognized a gain of $20,294 on sale of the stock. In addition the Company recognized interest income of $8,140 on the notes and capital raising fees of $3,174. In March, 2006 the Company was repaid the outstanding debenture balance of $20,000 and the interest of $8,140.



In March, 2006 the Company purchased $100,000 of 12% secured convertible debenture from Global Imports and Trading, Inc. (Global Imports). The debenture is due 18 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received common stock warrants to purchase a total of 2.99% of the fully diluted shares of Global Imports common stock The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006
the Company recognized interest income of $2,333 associated with this debenture.



In March 2006, the Company entered into a one year promissory note and security agreement in the amount of $16,000 with Pryaer Haute Couture, Inc. The note bears interest at a rate of 10% per annum.



On March 6, 2006, the Company received written consents in lieu of a meeting of Stockholders from holders of 10,586,264 shares (representing approximately 51.09% of the 20,719,699 issued and outstanding shares of the Companys common stock as of the date hereof), approving and authorizing the withdrawal of the Companys election to be treated as a Business Development Company (BDC) under the Investment Company Act of 1940 (the Investment Company Act); and the Board plans on filing a Withdrawal Notice with the Securities and Exchange Commission (the SEC) to withdraw the Companys election to be treated as a BDC.



Our principal offices are located at 19066 N.E. 29thAvenue, Aventura, Florida. Our phone number is 305-749-1186.



Competition



We believe that we compete in a highly fragmented market. We expect to encounter substantial competition in its efforts to locate attractive opportunities, primarily from business development companies, venture capital partnerships and corporations, venture capital affiliates of large industrial and financial companies, small investment companies, and wealthy individuals. Many of these entities will have significantly greater experience, resources and managerial capabilities than we do and will therefore be in a better position than us to obtain access to attractive business opportunities.



Investment Policies



All of the investment and lending guidelines set by our board of directors or any committees, including our investment objectives are not fundamental as defined under the 1940 Act. Therefore, our board may change them without notice to or approval by our stockholders, but any change may require the consent of our lenders.












Other than the restriction pertaining to the issuance of senior securities, the percentage restrictions on investments generally apply at the time a transaction is effected. A subsequent change in a percentage resulting from market fluctuations or any cause other than an action by us will not require us to dispose of portfolio securities or to take other action to satisfy the percentage restriction.



We will at all times conduct our business so as to retain our status as a business development company. In order to retain that status, we may not acquire any assets, other than non-investment assets necessary and appropriate to our operations as a business development company, if after giving effect to such acquisition the value of our qualifying assets is less than 70% of the value of our total assets.



Employees

We employ one full-time employee and two part-time consultants. We have no collective bargaining agreements with our employees. We expect to use consultants, attorneys and accountants as necessary, and do not anticipate a need to engage any additional full-time employees so long as we are seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.

Investment Advisor

We have no investment adviser and are internally managed by our executive officers under the supervision of the board of directors. Our investment decisions are made by our officers, directors and senior investment professionals. None of our executive officers or other employees have the authority to individually approve any investment.

Brokerage Allocation and Other Practices

Since we generally acquire and dispose of our investments in privately negotiated transactions, we rarely use brokers in the normal course of business. In those cases where we do use a broker, we do not execute transactions through any particular broker or dealer, but will seek to obtain the best net results for Advantage Capital, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firms risk and skill in positioning blocks of securities. While we generally seek reasonably competitive trade execution costs, we may not necessarily pay the lowest spread or commission available. Subject to applicable legal requirements, we may select a broker based partly upon brokerage or research services provided to us. In return for such services, we may
pay a higher commission than other brokers would charge if we determine in good faith that such commission is reasonable in relation to the services provided. We did not pay any money in brokerage commissions in the years ended March 31, 2005, 2004 and 2003.

PORTFOLIO COMPANIES

The following table sets forth certain information as of March 31, 2006, regarding each portfolio company in which we had a debt or equity investment. We make available significant managerial assistance to our portfolio companies. No portfolio company accounts for more than 5% of our assets. Other than these investments, our only relationships with our portfolio companies are:





        the consulting services we provide separately to the portfolio companies indicated by footnote 2 in the table below, which services are typically ancillary to our investments; and








Portfolio Company
        Industry
        Title of Securities Held by the Company
        Percentage of Class Held on a Fully Diluted Basis (1)
        March 31, 2006Cost
        Fair ValueGlobal IT Holdings, Inc. (2)
535-5th Avenue
New York, NY 10017
        Staffing
        Common Stock
Senior Debt
        15%
        $491,300
        $541,546Colmena Corp. (Net Worth Systems)
6499 NW 9thAve.
Suite 304
Ft. Lauderdale, FL 33309
        Information Technology
        Senior Debt
Warrants
        N/A
        $400,000
        $400,000Cinema Ride, Inc. (2)
TIX4TONIGHT
12001 Ventura Pl.
Suite 340
Studio City, CA 91604
        Entertainment
        Convertible Debt
        N/A
        $505,000
        $505,000College Partners
1744 Sam Rittenberg Blvd.
Suite D
Charleston, SC 29407
        Educational
        Debt
        N/A
        $40,000
        $40,000Americana Publishing, Inc.
303 San Mateo NE
Suite 104A
Albuquerque, NM 87108
        Entertainment
        Convertible Debt
        N/A
        $11,112
        $30,348CES Industries
3500 Sunrise Highway
Suite T211
Great River, NY11739
        Building/Construction
        Convertible Debt
        N/A
        $41,621
        $41,621Prayer Haute Couture, Inc
16311 Ventura Blvd.
Suite 1275
Encino, CA 91436
        Garment design
        Convertible Debt
        N/A
        $16,000
        $16,000Global Imports and Trading, Inc.
8000 Excelsior Boulevard
Hopkins, MN 55343
        Domestic goods
        Convertible Debt
        N/A
        $100,000
        $100,000

(1) The percentage of class held on a fully diluted basis represents
the percentage of the class of security we may own assuming we exercise our
warrants or options (whether or not they are in-the-money) and assuming that
warrants, options or convertible securities held by others are not exercised or
converted. We have not included any security which is subject to significant
vesting contingencies. Common stock, preferred stock, warrants, options and
equity interests are generally non-income producing and restricted. The
percentage was calculated based on the most current outstanding share
information available to us (i) in the case of private companies, provided by
that company, and (ii) in the case of public companies, provided by that
companys most recent public filings with the SEC.

(2) We provide business development services to this portfolio company.








CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS



The following discussion is a general summary of the material U.S. federal income tax considerations applicable to us and to an investment in shares of our common stock. This summary does not purport to be a complete description of the income tax considerations applicable to such an investment. For example, we have not described tax consequences that we assume to be generally known by investors or certain considerations that may be relevant to certain types of holders subject to special treatment under U.S. federal income tax laws, including stockholders subject to the alternative minimum tax, tax-exempt organizations, insurance companies, dealers in securities, pension plans and trusts, and financial institutions. This summary assumes that investors hold our common stock as capital assets (within the meaning of the Internal Revenue Code of 1986 or the Code. The discussion is
based upon the Code, Treasury Regulations, and administrative and judicial interpretations, each as of the date of this prospectus and all of which are subject to change, possibly retroactively, which could affect the continuing validity of this discussion. This summary does not discuss any aspects of U.S. estate or gift tax or foreign, state or local tax. It does not discuss the special treatment under U.S. federal income tax laws that could result if we invested in tax-exempt securities or certain other investment assets.



Tax matters are very complicated and the tax consequences to an investor of an investment in shares of our common stock will depend on the facts of his, her or its particular situation. We encourage investors to consult their own tax advisors regarding the specific consequences of such an investment, including tax reporting requirements, the applicability of federal, state, local and foreign tax laws, eligibility for the benefits of any applicable tax treaty and the effect of any possible changes in the tax laws.



We are currently taxed as an ordinary corporation under Subchapter C of the Internal Revenue Code. We intend to elect to be treated
as a "regulated investment company" or "RIC" under Subchapter M of the Internal Revenue Code with the filing of our federal corporate
income tax return for 2005, which election would be effective as of 2005. As a RIC, we generally will not have to pay corporate taxes
on any income we distribute to our stockholders as dividends, which will allow us to reduce or eliminate our corporate-level tax
liability.



Taxation as a Regulated Investment Company



If we:





        qualify as an RIC, and distribute each year to stockholders at least 90% of our investment company taxable income (which is defined in the Internal Revenue Code generally as ordinary income plus net short-term capital gains in excess of net long-term capital losses), and 90% of any ordinary pre-RIC built-in gains we recognize between January 1, 2004 and December 31, 2013, less our taxes due on those gains (collectively, the 90% distribution requirement), we will be entitled to deduct, and therefore will not be subject to U.S. federal income tax on, the portion of our income we distribute to stockholders other than any built-in gain recognized between January 1, 2004 and December 31, 2013. We will be subject to U.S. federal income tax at the regular corporate rate on any income not distributed (or deemed distributed) to our stockholders. We will be subject to a 4% nondeductible
U.S. federal excise tax to the extent we do not distribute (actually or on a deemed basis) in a timely manner 98% of our ordinary income for each calendar year, 98% of our capital gain net income for the one-year period ending October 31 in that calendar year, and any income realized but not distributed in prior calendar years. We generally will endeavor in each taxable year to avoid any U.S. federal excise taxes on our earnings.

In order to qualify as an RIC for federal income tax purposes, we must, among other things:

times during each taxable year;







        continue to qualify as a business development company under the 1940 Act at all derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities, loans, gains from the sale of stock or other securities, or other income derived with respect to our business of investing in such stock or securities (known as the 90% Income Test); and



        diversify our holdings so that at the end of each quarter of the taxable year:



        at least 50% of the value of our assets consists of cash, cash items, U.S. government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer, and no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer or of two or more issuers that are controlled, as determined under applicable Internal Revenue Code rules, by us and are engaged in the same or similar or related trades or businesses (known as the Diversification Tests).

We may be required to recognize taxable income in circumstances in which we do not receive cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount, we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We also may have to include in income other amounts that we have not yet received in cash, such as payment-in-kind interest and deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. Additionally, we will have to include in income amounts previously deducted with respect to certain restricted stock granted to our employees, if such stock is forfeited. Because any original issue
discount or other amounts accrued will be included in our investment company taxable income for the year of accrual, we may be required to make a distribution to our stockholders in the amount of that non-cash income in order to satisfy the 90% Distribution Requirement, even though we will not have received any cash representing such income.



If we fail to satisfy the 90% Distribution Requirement or otherwise fail to qualify as an RIC in any taxable year, we will be subject to tax in that year on all of our taxable income, regardless of whether we make any distributions to our stockholders. In that case, all of our income will be subject to corporate-level tax, reducing the amount available to be distributed to our stockholders, and all of our distributions to our stockholders will be characterized as ordinary dividends (to the extent of our current and accumulated earnings and profits). Such dividends generally will be subject to tax to non-corporate U.S. Stockholders (as defined below) at a maximum rate of 15 percent.



Treatment of Pre-Conversion Built-in Gain



As of August 12, 2004, we held substantial assets (including intangible assets not reflected on the balance sheet, such as goodwill) with built-in gain (i.e., with a fair market value in excess of tax basis). Under a special tax rule that applies to corporations that convert from taxation under Subchapter C of the Internal Revenue Code to taxation as an RIC, we are required to pay corporate level tax on the amount of any net built-in gains we recognize within ten years after the effective date of our election to be treated as an RIC. Any such corporate level tax will be payable at the time those gains are recognized (which, generally, will be the years in which we sell or dispose of the built-in gain assets in a taxable transaction). Based on the assets we currently anticipate selling within the ten-year period beginning January 1, 2004 and ending December 31, 2013, we do not expect that
we will have to pay a built-in gain tax. The amount of this tax will vary depending on the assets that are actually sold by us in this ten-year period and applicable tax rates. Under Treasury Regulations, recognized built-in gains (or losses) will generally retain their character as capital gain or ordinary income (or capital or ordinary losses). Recognized built-in gains that are ordinary in character will be included in our investment company taxable income, and we must distribute to our stockholders at least 90% of any such built-in gains recognized within the ten-year period, net of the corporate taxes paid by us on the built-in gains. Any such amount distributed will be taxable to stockholders as ordinary income.



Recognized built-in gains within the ten-year period, net of taxes, that are capital gains will be distributed or deemed distributed to our stockholders. Any such amount distributed or deemed distributed will be taxable to stockholders as a capital gain.










Taxation of U.S. Stockholders



For purposes of the following discussion, a U.S. Stockholder is a stockholder who is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any State or the District of Columbia or otherwise treated or taxed as a United States corporation for U.S. federal income tax purposes, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (v) a certain electing trust. If a partnership
holds shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of partnerships holding shares should consult their tax advisor as to whether they are Non-U.S. Stockholders and with respect to the purchase, ownership and disposition of our common stock.

Distributions by us generally will be taxable to U.S. Stockholders as ordinary income or capital gains. Distributions of our investment company taxable income (which is, generally, our ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses) will be taxable as ordinary income to U.S. Stockholders to the extent of our current or accumulated earnings and profits, whether paid in cash or reinvested in additional common stock. Under new legislation, ordinary dividends that consist of dividends we have received from qualifying corporations will be taxed to non-corporate U.S. Stockholders at a maximum rate of 15 percent. Dividends distributed by us generally will not be eligible for this lower rate of taxation.



Distributions of our net capital gains (which is, generally, our realized net long-term capital gains in excess of realized net short-term capital losses) properly designated by us as capital gain dividends will be taxable to a U.S. Stockholder as long-term capital gains regardless of the U.S. Stockholders holding period for his or her common stock and regardless of whether paid in cash or reinvested in additional common stock. Distributions in excess of our current and accumulated earnings and profits first will reduce a U.S. Stockholders adjusted tax basis in such U.S. Stockholders common stock and, after the adjusted basis is reduced to zero, will constitute capital gains to such U.S. Stockholder. Under new legislation, capital gain dividends will be taxed to non-corporate U.S. Stockholders at a maximum rate of 15 percent.



We intend to retain some or all of our capital gains, but to designate the retained amount as a deemed distribution. In that case, among other consequences, we will pay corporate-level tax on the retained amount, each U.S. Stockholder will be required to include his or her share of the deemed distribution in income as if it had been actually distributed to the U.S. Stockholder, and the U.S. Stockholder will be entitled to claim a credit or refund equal to its allocable share of the corporate-level tax we pay on the retained capital gain. The amount of the deemed distribution net of such tax will be added to the U.S. Stockholders cost basis for his or her common stock. Since we expect to pay tax on any retained capital gains at our regular corporate capital gain tax rate, and since that rate is in excess of the maximum rate currently payable by individuals on long-term
capital gains, the amount of tax that individual U.S. Stockholders will be treated as having paid will exceed the tax they owe on the capital gain dividend and such excess generally may be refunded or claimed as a credit against the U.S. Stockholders other U.S. federal income tax obligations. A U.S. Stockholder that is not subject to U.S. federal income tax or otherwise required to file a U.S. federal income tax return would be required to file a U.S. federal income tax return on the appropriate form in order to claim a refund for the taxes we paid. In order to utilize the deemed distribution approach, we must provide written notice to our stockholders prior to the expiration of 60 days after the close of the relevant tax year.



We will be subject to the alternative minimum tax (AMT), but any items that are treated differently for AMT purposes must be apportioned between us and our stockholders, and this may affect the stockholders AMT liabilities. Although regulations explaining the precise method of apportionment have not yet been issued by the Internal Revenue Service, the Company intends in general to apportion these items in the same proportion that dividends paid to each stockholder bear to our taxable income (determined without regard to the dividends paid deduction), unless we determine that a different method for a particular item is warranted under the circumstances.




You should consult your own tax advisor to determine how an investment in our stock could affect your AMT liability.








For purposes of determining (i) whether the 90% distribution requirement is satisfied for any year and (ii) the amount of capital gains dividends paid for that year, we may, under certain circumstances, elect to treat a dividend that is paid during the following taxable year as if it had been paid during the taxable year in question. If we make such an election, the U.S. Stockholder will still be treated as receiving the dividend in the taxable year in which the distribution is made, and any capital gain dividend will be treated as a capital gain dividend to the U.S. Stockholder. Any dividend declared by us in October, November, or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following year, will be treated as if it had been received by our U.S. Stockholders on December 31 of the year in which
the dividend was declared.



You should consider the tax implications of buying common stock just prior to a distribution. Even if the price of the common stock includes the amount of the forthcoming distribution, you will be taxed upon receipt of the distribution and will not be entitled to offset the distribution against the tax basis in your common stock.



You may recognize taxable gain or loss if you sell or exchange your common stock. The amount of the gain or loss will be measured by the difference between your adjusted tax basis in your common stock and the amount of the proceeds you receive in exchange for such stock. Any gain or loss arising from, or, in the case of distributions in excess of the sum of our current and accumulated earnings and profits and your tax basis in the stock, treated as arising from, the sale or exchange of our common stock generally will be a capital gain or loss. This capital gain or loss normally will be treated as a long-term capital gain or loss if you have held your common stock for more than one year. Otherwise, it will be classified as short-term capital gain or loss. However, any capital loss arising from the sale or exchange of common stock held for six months or less generally will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends received, or treated as deemed distributed, with respect to such stock and, for this purpose, the special rules of Section 852(b)(4)(C) of the Internal Revenue Code generally apply in determining the holding period of such stock.



On May 28, 2003, a new federal tax law was enacted that generally reduces the maximum rate of taxation on non-corporate taxpayers for certain dividends and net long-term capital gains (i.e., the excess of net long-term capital gains over net short-term capital losses for a taxable year) from 20% to 15% (from May 6, 2003 through December 31, 2008). The 15% tax rate for net long-term capital gains and dividends will generally apply to: (1)U.S. Stockholders long-term capital gains, if any, recognized on the disposition of our shares; (2)our distributions designated as capital gain dividends; and (3)our distributions consisting of dividends we have received from qualifying corporations (which we generally do not receive). Corporate U.S. Stockholders currently are subject to U.S. federal income tax on net capital gain at the maximum 35% rate also applied to ordinary income. Tax rates
imposed by states and local jurisdictions on capital gain and ordinary income may differ.



We will send to each of our U.S. Stockholders, as promptly as possible after the end of each calendar year, a notice detailing, on a per share and per distribution basis, the amounts includible in such U.S. Stockholders taxable income for such year as ordinary income (including the portion, if any, taxable at the lower effective rate applicable to dividends consisting of dividends we have received) and as long-term capital gain. In addition, the U.S. federal tax status of each years distributions generally will be reported to the Internal Revenue Service. Distributions may also be subject to additional state, local, and foreign taxes depending on a U.S. Stockholders particular situation. Dividends distributed by us generally will not be eligible for the dividends-received deduction.



Backup withholding may apply to taxable distributions on the common stock with respect to certain non-corporate U.S. Stockholders. Such U.S. Stockholders generally will be subject to backup withholding unless the U.S. Stockholder provides its correct taxpayer identification number and certain other information, certified under penalties of perjury, to the dividend paying agent, or otherwise establishes an exemption from backup withholding. Any amount withheld under backup withholding is allowed as a credit against the U.S. Stockholders U.S. federal income tax liability, provided the proper information is provided to the Internal Revenue Service.

Taxation of Non-U.S. Stockholders



For purposes of the following discussion, a Non-U.S. Stockholder is a person who is not a U.S. Stockholder.












Whether an investment in our common stock is appropriate for a Non-U.S. Stockholder will depend upon that persons particular circumstances. Non-U.S. Stockholders should consult their tax advisors before investing in our common stock.



Distributions of our investment company taxable income to Non-U.S. Stockholders (including interest income and realized net short-term capital gains in excess of realized long-term capital losses, which generally would be free of withholding if paid to Non-U.S.



Stockholders directly) will be subject to withholding of federal tax at a 30% rate (or lower rate provided by an applicable treaty) to the extent of our current and accumulated earnings and profits unless an applicable exception applies. If the distributions are effectively connected with a U.S. trade or business of the Non-U.S. Stockholder, and, if an income tax treaty applies, attributable to a permanent establishment in the United States, we will not be required to withhold federal tax if the Non-U.S. Stockholder complies with applicable certification and disclosure requirements, although the distributions will be subject to federal income tax at the rates applicable to U.S. persons. (Special certification requirements apply to a Non-U.S. Stockholder that is a foreign partnership or a foreign trust, and such entities are urged to consult their own tax advisors.)



In addition, with respect to certain distributions made to Non-U.S. stockholders in our taxable years beginning after December 31, 2004 and before January 1, 2008, no withholding will be required and the distributions generally will not be subject to U.S. federal income tax if (i) the distributions are properly designated in a notice timely delivered to our stockholders as interest-related dividends or short-term capital gain dividends, (ii) the distributions are derived from sources specified in the Code for such dividends and (iii) certain other requirements are satisfied. Any distributions of any pre-conversion built-in gains recognized between January 1, 2004 and December 31, 2013 (as discussed under --Treatment of Pre- Conversion Built-In Gain above) that are ordinary income will also be taxable to Non-U.S. Stockholders in the same manner as
distributions of our investment company taxable income.



Actual or deemed distributions of our net capital gains to a Non-U.S. Stockholder (including any distributions of any pre-conversion built-in gains recognized between January 1, 2004 and December 31, 2013 that are capital gains), and gains realized by a Non-U.S. Stockholder upon the sale or redemption of our common stock, will not be subject to U.S. federal income tax unless the distributions or gains, as the case may be, are effectively connected with a U.S. trade or business of the Non-U.S. Stockholder and, if an income tax treaty applies, are attributable to a permanent establishment maintained by the Non-U.S. Stockholder in the United States, or, in the case of an individual, the Non-U.S. Stockholder was present in the U.S. for 183 days or more during the taxable year and certain other conditions are met.



If we distribute our net capital gains in the form of deemed rather than actual distributions (which we currently intend to do), a Non-U.S. Stockholder will be entitled to a U.S. federal income tax credit or tax refund equal to the stockholders allocable share of the corporate-level tax we pay on the capital gains deemed to have been distributed; however, in order to obtain the refund, the Non-U.S. Stockholder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return even if the Non-U.S. Stockholder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. federal income tax return. For a corporate Non-U.S. Stockholder, distributions (both actual and deemed), and gains realized upon the sale or redemption of our common stock that are effectively connected to a U.S. trade or business may, under certain
circumstances, be subject to an additional branch profits tax at a 30% rate (or at a lower rate if provided for by an applicable treaty). Accordingly, investment in our stock may not be appropriate for a Non-U.S. Stockholder.



A Non-U.S. Stockholder who is a nonresident alien individual, and who is otherwise subject to withholding of U.S. federal income tax, may be subject to information reporting and backup withholding of U.S. federal income tax on dividends unless the Non-U.S. Stockholder provides us or the dividend paying agent with an IRS Form W-8BEN (or an acceptable substitute form) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. Stockholder or the Non-U.S. Stockholder otherwise establishes an exemption from backup withholding.






Non-U.S. Stockholders should consult their own tax advisors with respect to the U.S. federal income tax and withholding tax, and state, local, and foreign tax, consequences of an investment in our common stock.



REGULATION AS A BUSINESS DEVELOPMENT COMPANY



A business development company is regulated by the 1940 Act. A business development company must be organized in the United States for the purpose of investing in or lending to primarily private companies and making managerial assistance available to them. A business development company may use capital provided by public shareholders and from other sources to invest in long-term, private investments in businesses. A business development company provides stockholders the ability to retain the liquidity of a publicly traded stock, while sharing in the possible benefits, if any, of investing in primarily privately owned companies.



As a business development company, we may not acquire any asset other than qualifying assets unless, at the time we make the acquisition, the value of our qualifying assets represents at least 70% of the value of our total assets.



The principal categories of qualifying assets relevant to our business are:





        Securities of an eligible portfolio company that are purchased in transactions not involving any public offering. An eligible portfolio company is defined under the 1940 Act to include any issuer that:



        is organized and has its principal place of business in the U.S.,
        is not an investment company or a company operating pursuant to certain exemptions under the 1940 Act, other than a small business investment company wholly owned by a business development company; and
        does not have any class of publicly traded securities with respect to which a broker may extend margin credit;
        Securities received in exchange for or distributed with respect to securities described in the bullet above or pursuant to the exercise of options, warrants, or rights relating to those securities; and
        Cash, cash items, government securities, or high quality debt securities (as defined in the 1940 Act), maturing in one year or less from the time of investment.

To include certain securities described above as qualifying assets for the purpose of the 70% test, a business development company must offer to make available to the issuer of those securities significant managerial assistance such as providing guidance and counsel concerning the management, operations, or business objectives and policies of a portfolio company. We offer to provide managerial assistance to each portfolio company.



As a business development company, we are required to meet a coverage ratio of the value of total assets to total senior securities, which include all of our borrowings and any preferred stock we may issue in the future, of at least 200%. We may also be prohibited under the 1940 Act from knowingly participating in certain transactions with our affiliates without the prior approval of our directors who are not interested persons and, in some cases, prior approval by the Securities and Exchange Commission.



As with other companies regulated by the 1940 Act, a business development company must adhere to certain substantive regulatory requirements. A majority of our directors must be persons who are not interested persons, as that term is defined in the 1940 Act. Additionally, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect the business development company. Furthermore, as a business development company, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such persons office.








As required by the 1940 Act, we maintain a code of ethics that establishes procedures for personal investments and restricts certain transactions by our personnel. Our code of ethics generally does not permit investments by our employees in securities that may be purchased or held by us. You may read and copy the code of ethics at the Securities and Exchange Commissions Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-202-942-8090. In addition, the code of ethics is available on the EDGAR Database on the Securities and Exchange Commissions Internet site at http://www.sec.gov. You may obtain copies of the code of ethics, after paying a duplicating fee, by electronic request at the following Email address: publicinfo@sec.gov, or by writing the Securities and
Exchange Commissions Public Reference Section, Washington, D.C. 20549.



We may not change the nature of our business so as to cease to be, or withdraw our election as, a business development company unless authorized by vote of a majority of the outstanding voting securities, as required by the 1940 Act. A majority of the outstanding voting securities of a company is defined under the 1940 Act as the lesser of: (i) 67% or more of such companys shares present at a meeting if more than 50% of the outstanding shares of such company are present or represented by proxy, or (ii) more than 50% of the outstanding shares of such company. We do not anticipate any substantial change in the nature of our business.



On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act imposes a wide variety of new regulatory requirements on publicly-held companies and their insiders. Many of these requirements will affect us.



For example:





        Our chief executive officer and chief financial officer must now certify the accuracy of the financial statements contained in our periodic reports;
        Our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures;
        Our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses; and
        We may not make any loan to any director or executive officer and we may not materially modify any existing loans.

The Sarbanes-Oxley Act has required us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the new regulations promulgated thereunder. We will continue to monitor our compliance with all future regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.

RISK FACTORS

An investment in our securities involves certain risks relating to our structure and investment objectives. The risks set out below are not the only risks we face, and we face other risks which are not yet predictable. If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected. In such case, our net asset value and the trading price of our common stock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

We Have A Limited Operating History As A Business Development Company And As A Regulated Investment Company, Which May Impair Your Ability To Assess Our Prospects.



Prior to our August 2004 election to be regulated as a business development company under the Investment Company Act, we had not operated as a business development company or as a regulated investment company under Subchapter M of the Internal Revenue Code. As a result, we have limited operating results under these








regulatory frameworks that can demonstrate to you either their effect on our business or our ability to manage our business under these frameworks. In addition, prior to our initial public offering, our management had no prior experience managing a business development company or regulated investment company. We cannot assure you that we will be able to operate successfully as a business development company and a regulated investment company.



We Are Dependent Upon Our Key Management Personnel For Our Future Success, Particularly Jeffrey Sternberg.



We depend on the diligence, skill and network of business contacts of our sole officer Jeffrey Sternberg. Jeffrey Sternberg, together with other investment professionals, will evaluate, negotiate, structure, close, monitor and service our investments. Our future success will depend to a significant extent on the continued service and coordination of Mr. Sternberg who devotes substantially all of his business time to our operations. Although Mr. Sternberg is subject to an employment contract, his departure could have a material adverse effect on our ability to achieve our investment objective.



Because There Is Generally No Established Market For Which To Value Our Investments, Our Board Of Directors Determination Of The Value Of Our Investments May Differ Materially From The Values That A Ready Market Or Third Party Would Attribute To These Investments.



Under the 1940 Act, we are required to carry our portfolio investments at market value or, if there is no readily available market value, at fair value as determined by our board. We are not permitted to maintain a general reserve for anticipated loan losses. Instead, we are required by the 1940 Act to specifically value each individual investment and to record any unrealized depreciation for any asset that we believe has decreased in value. Because there is typically no public market for the loans and equity securities of the companies in which we invest, our board will determine the fair value of these loans and equity securities on a quarterly basis pursuant to our valuation policy. These determinations of fair value necessarily will be somewhat subjective. Accordingly, these values may differ significantly from the values that would be determined by a third party or placed on the
portfolio if there existed a market for our loans and equity securities.



We May Not Effectively Manage The Growth Necessary To Execute Our Business Plan, Including Successfully Identifying Companies In Which To Invest, Which Could Adversely Affect Our Operations And Increase Our Costs.

In order to achieve an increased level of investment activity necessary to successfully execute our business plan, we must significantly increase the number of investments that we make and the companies that utilize our financial products and services. This growth will place significant strain on our personnel, systems and resources. We also expect that we will continue to hire employees, including finance and management-level employees for the foreseeable future. To successfully implement our business plan, we need to successfully identify companies in which to invest. We have only started investing in companies and can provide no assurances that we will be successful identifying prospects. Further, we will have to quickly rely on new employees to assist us with the execution of our business plan and we will not know for months or years, how successful they or we are at identifying such prospects.

Additionally, this growth will require us to improve management, information technology and accounting systems, controls and procedures. We may not be able to maintain the quality of our operations, control our costs, continue complying with all applicable regulations and expand our internal management, information technology and accounting systems in order to support our desired growth. We cannot be sure that we will manage our growth effectively, and our failure to do so could cause us to reduce or cease operations.

We depend on recruiting and retaining qualified personnel and our inability to
do so would seriously harm our business. Because of the specialized nature of
our services and the market in which we compete, our success depends on the
continued services of our current executive officers and our ability to attract
and retain qualified personnel with significant expertise. New employees
generally require substantial training, which requires significant resources and
management attention. Even if we invest significant resources to recruit, train
and retain qualified personnel, we may not be successful in our
efforts.












We Make Loans To And Invest In Primarily Small And Medium-Sized Privately Owned Companies, Which May Default On Their Loans, Thereby Reducing Or Eliminating The Return On Our Investments.

Our portfolio primarily consists of loans to and securities issued by small- and medium-sized privately owned businesses. Compared to larger publicly owned firms, these companies may be more vulnerable to economic downturns, may have more limited access to capital and higher funding costs, may have a weaker financial position, and may need more capital to expand or compete. These businesses also may experience substantial variations in operating results. They may face intense competition, including from companies with greater financial, technical and marketing resources. Typically, they also depend for their success on the management talents and efforts of an individual or a small group of persons. The death, disability or resignation of any of their key employees could harm their financial condition. Furthermore, some of these companies do business in regulated industries and could be
affected by changes in government regulation. Accordingly, these factors could impair their cash flow or result in other events, such as bankruptcy, which could limit their ability to repay their obligations to us, and may adversely affect the return on, or the recovery of, our investment in these businesses. Deterioration in a borrowers financial condition and prospects may be accompanied by deterioration in any collateral for the loan.



Some of these companies may be unable to obtain financing from public capital markets or from traditional credit sources, such as commercial banks. Accordingly, advances made to these types of customers may entail a higher risk of loss than advances made to customers who are able to utilize traditional credit sources. These conditions may also make it difficult for us to obtain repayment of our loans.



Furthermore, there is generally no publicly available information about such companies and we must rely on the diligence of our employees to obtain information in connection with our investment decisions. If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision and we may lose money on our investments.



Because We Generally Do Not Hold Controlling Equity Interests In Our Portfolio Companies, We May Not Be In A Position To Exercise Control Over Our Portfolio Companies Or To Prevent Decisions By Management Of Our Portfolio Companies That Could Decrease The Value Of Our Investments.



Although we may do so in the future, to date we have generally not taken controlling equity positions in our portfolio companies. As a result, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the value of our investments.



We May Change Our Investment Policies Without Further Stockholder Approval.

Although we are limited by the Investment Company Act of 1940 with respect to the percentage of our assets that must be invested in qualified investment companies, we are not limited with respect to the minimum standard that any investment company must meet, nor the industries in which those investment companies must operate. We may make investments without shareholder approval and such investments may deviate significantly from our historic operations. Any change in our investment policy or selection of investments could adversely affect our stock price, liquidity, and the ability of our shareholders to sell their stock.

Our Investments May Not Generate Sufficient Income to Cover Our Operations.

We intend to make investments into qualified companies that will provide the
greatest overall return on our investment. However, certain of those investments
may fail, in which case we will not receive any return on our investment. In
addition, our investments may not generate income, either in the immediate
future, or at all. As a result, we may have to sell additional stock, or borrow
money, to cover our operating expenses. The effect of such actions could cause
our stock price to decline or, if we are not successful in raising additional
capital, we could cease to continue as a going concern.












If We Fail To Qualify As A Regulated Investment Company, We Will Have To Pay Corporate-Level Taxes On Our Income And Our Income Available For Distribution Would Be Reduced.



We intend to elect to be taxed for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code with the filing of our federal corporate income tax return for 2004, which election would be effective as of January 1, 2004. If we can meet certain requirements, including source of income, asset diversification and distribution requirements, as well as if we continue to qualify as a business development company, we will qualify to be a regulated investment company and will not have to pay corporate-level taxes on any income we distribute to our stockholders as dividends, allowing us to substantially reduce or eliminate our corporate-level tax liability. In addition, we may have difficulty meeting the requirement to make distributions to our stockholders because in certain cases we may recognize income before or without receiving cash
representing such income. If we fail to qualify as a regulated investment company, we will have to pay corporate-level taxes on all of our income whether or not we distribute it, which would substantially reduce the amount of income available for distribution to our stockholders. Even if we qualify as a regulated investment company, we generally will be subject to a corporate-level income tax on the income we do not distribute. Moreover, if we do not distribute at least 98% of our income, we generally will be subject to a 4% excise tax. See Regulation as a Business Development Company and Certain U.S. Federal Income Tax Considerations--Taxation as a Regulated Investment Company.



Regulations Governing Our Operation As A Business Development Company Will Affect Our Ability To, And The Way In Which We, Raise Additional Capital.

We have issued debt securities and may issue debt securities and/or borrow money from banks or other financial institutions, which we refer to collectively as senior securities, up to the maximum amount permitted by the 1940 Act. Under the provisions of the 1940 Act, we are permitted, as a business development company, to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock, or warrants, options or rights to acquire our common stock, at a price below the current net asset value of the common stock if our board of directors determines that such sale is in the best interests of Advantage Capital and its stockholders, and our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price which, in the determination of our board of directors, closely approximates the market value of such securities (less any distributing commission or discount).

FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this annual report on Form 10-K may contain forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words may, should, expect, anticipate, estimate, believe, intend or project or the negative of these words or other variations on these words or comparable terminology.

This Form 10-K contains forward-looking statements, including statements
regarding, among other things, (a)our projected sales and profitability, (b) our
growth strategies, (c) anticipated trends in our industry, (d) our future
financing plans and (e) our anticipated needs for working capital. These
statements may be found under Managements Discussion and Analysis or
Plan of Operations and Business, as well as in this Form 10-K
generally. Actual events or results may differ materially from those discussed
in forward-looking statements as a result of various factors, including, without
limitation, the risks outlined under Risk Factors and matters
described








in this Form 10-K generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements will in fact occur.

ITEM 2. PROPERTIES



We do not own any real estate or other physical properties important to our operation. Our principal executive offices are located at 19066 N.E. 29th Avenue, Aventura, Florida. We currently operated on a month-to-month basis without a written lease. The landlord is Re-Max Reality Group and we pay $500.00 per month. Our office facilities are suitable and adequate for our business as it is presently conducted.



ITEM 3. LEGAL PROCEEDINGS



On October 12, 2004, the Company was served with a Third Party Complaint by American Motorists Insurance Company in Victory Village Limited III v. Builders Control Services Company, Inc. and American Motorist Insurance Company (AMIC), District Court, Clark County, Nevada. The Complaint is based on alleged bond made by the Company to American Motorist in 1995. The complaint is based on an agreement signed by the Company that required the Company to indemnify the issuer of a bond in which a wholly owned subsidiary of the Company was a principle. The bond was issued in connection with a real estate transaction that began in 1995. The events that led to the default on the bond occurred between the years of 1995 and 2004.



According to the complaint, the Company, while known as C.E.C. Industries Corp. and controlled by a prior management, agreed to indemnify the issuer of the bond for all claims arising against the bond. On June 29, 2006 a judgment in the amount of $7,796,147 was levied against the Company. For the year ended March 31, 2006 the Company recorded an accrued judgment of $7,796,147.



In a letter from the Securities and Exchange Commission (SEC or Commission) dated June 17, 2005, management learned that due to certain actions taken by previous management some seven years ago and the subsequent settlement with the Commission relating to those activities, we might not be eligible to rely on the exemption offered in Regulation E for the offering that we initiated in October 2004. Section 230.602(b)(4) of Regulation E prohibits any issuer from relying on Regulation E as an exemption for its securities if the issuer is subject to an injunction or restraining order within five years prior to the filing of notification with the Commission that the Company intends to elect to be regulated as a business development company. An injunction was implemented against the Company by the United States District Court of Columbia based on actions that occurred by previous management
in 1996 and 1997 as set forth in SEC Litigation Release No. 17139 (the Release) dated September 19, 2001. The Company subsequently filed our Notification of Election to be regulated as a business development company on August 20, 2004. Current management was not aware of any facts that would have precluded reliance on the exemption from registration promulgated under Regulation E with respect to our offering commenced October 1, 2004. Specifically, management of the Company was not aware of the injunction against the Company dated September 19, 2001. Accordingly, the Company, in good faith, relied upon such exemption. After being made aware of such facts that would preclude the Company from reliance upon such exemption in the SEC letter dated June 17, 2005, we immediately ceased the offering. The Company has offered a right of rescission to all investors who purchased securities in the Regulation E offering in consideration for, generally, their investment price plus
interest. As of February 9, 2006, three investors with a total of 550,082 shares of common stock with a value of $82,512 have requested there investment returned.



In August, 2006, the Company was served with a Complaint by Mark B. Aronson v. Advantage Capital Development, Corp., In the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division, Arbitration Docket. The Complaint is based on an allegation of unlawful solicitation by spam mail. The Company denies all such claims and has retained counsel to respond to such complaint.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



On or about March 6, 2006, the Company received written consents in lieu of a
meeting of Stockholders from holders of 10,586,264 shares (representing
approximately 51.09% of the 20,719,699 issued and outstanding shares of the
Companys common stock as of the date hereof), approving and authorizing
(1) the withdrawal of the Companys election to be treated as a Business
Development Company (BDC) under the Investment Company Act of 1940
(the Investment Company Act); (2) the sale of any and all of the
assets of the Company, if the business operations of the Company are not
successful or such sale is necessary in the sole discretion of the Board to
either assist in compliance or to withdraw the Companys election to be
treated as a BDC, or if the Board of Director deems such sale to be in the best
interest of the Company and its shareholders; and up to a 1 to 20 reverse split
of the Companys common stock, contingent upon the effectiveness of the
withdrawal of election to be treated as a BDC.












PART II



ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



The Companys Common Stock is quoted on the Pink Sheets under the symbol AVCP. One of the Companys market makers has submitted a 15c211 application to the OTC Bulletin Board to have the Companys common stock quoted on the OTC. Such application is currently pending. The following table sets forth the quarterly high and low bid prices for the Companys Common Stock during the last two fiscal years of the Company, as reported by the National Quotations Bureau. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not necessarily represent actual transactions.




Bid Price Per ShareHigh
        Low2003March 31, 2003
        $1.70
        $0.40June 30, 2003
        $5.20
        $0.50September 30, 2003
        $4.00
        $1.80December 31, 2003
        $2.50
        $1.202004March 31, 2004
        $1.70
        $0.13June 30, 2004
        $0.60
        $0.10September 30, 2004
        $0.72
        $0.10December 31, 2004
        $0.67
        $0.402005March 31, 2005
        $0.50
        $0.13June 30, 2005
        $0.029
        $.017September 30, 2005
        $.0.29
        $0.13December 31, 2005
        $0.15
        $.012006March 31, 2006
        $0.03
        $.02

The Company issued a stock dividend of 331,799,021 of its common shares of Global IT Holdings, Inc. to Advantage Capitals shareholders of record on February 20, 2006 pro rata that held greater than 1,000 shares of Advantage Capital common stock. All shareholders of record holding 1,000 shares or less of Advantage Capitals common stock were entitled to receive a cash dividend equal to the value of the stock dividend that they would otherwise have been entitled to receive. For every share of Advantage Capital Development Corp. held, Advantage Capital shareholders holding greater than 1,000 shares of Advantage Capital common stock received 16.1471285 shares of Global IT Holdings, Inc. common stock.



No dividend was declared or paid by the Company during fiscal year 2005 or 2004. A decision to pay dividends in the future will depend upon the Companys profitability, need for liquidity and other financial considerations. There are approximately 1,698 shareholders of the 19,900,090 outstanding shares, as of August 4, 2006. The total shares outstanding for the Company reflects the cancellation of 2,475,000 shares (pre 10-1 forward split undertaken in September 2004) held by Mr. Dvorak although these shares have not been cancelled of record. The 3,330,050 shares held in escrow pursuant to the stock purchase agreement with Alpha Capital Aktiengesellschaft are not included in our total shares outstanding. The last reported price for our common stock on August 4, 2006 was $0.018 per share.



Recent Sales of Unregistered Securities




In July 2004 the Company reached a settlement with its former director and several consultants for the return of common stock and settlement of amounts owed. The Company received and subsequently cancelled a total of 670,000 shares of common stock from those individuals and recorded a gain of $159,512 of amounts owed to them and a contribution of capital of $595,516.



On August 26, 2004, the Company issued 1,659,500 shares to David Goldberg and 1,659,500 shares to Craig Press. Such shares were issued for services rendered by Knightsbridge Holdings, LLC pursuant to its Engagement Agreement with the Company and Knightsbridge subsequently assigned such shares to David Goldberg and Craig Press. The fair market value of theses shares on the date of issuances was $46,466. On August 31, 2004, the Company effectuated a 1-10 reverse split of its issued and outstanding common stock.












In August through November 2004 the Company sold a total of 4,668,727 shares of common stock at a price of $.15 per shares for net proceeds of $700,312.



In August 2004, the Company entered into a Standby Equity Distribution Agreement with Cornell Capital Partners. Under this agreement, we may issue and sell to Cornell Capital, Common Stock for a total purchase price of up to $25.0 million. The Company will be entitled to commence drawing down on the Standby Equity Distribution Agreement when the sale of the Common Stock under the Standby Equity Distribution Agreement is registered with the SEC and for two years thereafter. The purchase price for the shares will be equal to 98% of the market price, which is defined as the lowest closing bid price of the Common Stock during the five trading days following the notice date. A cash fee equal to ten percent (10%) of the cash proceeds of the draw down is also payable at the time of funding. To date, the Company has not received any funding under the Standby Equity Distribution Agreement. In March 2005 the Company
issued 1,695,866 shares common stock valued at $370,000 to Cornell Capital Partners as a commitment fee in connection with the Standby Equity Distribution Agreement.



On August 25, 2004, we issued $1,000,000 in convertible debentures to Cornell Capital. These debentures are convertible into shares of our Common Stock at the price per share price equal to the volume weighted average price of the Common Stock as listed on Pink Sheets or OTC Bulletin Board (or Nasdaq SmallCap Market or American Stock Exchange), as quoted by Bloomberg L.P. during the three (3) trading days immediately preceding the conversion date. These convertible debentures bear interest at 5% and are convertible at the holders option. These convertible debentures have a term of three years and may be redeemed, at our option at a 20% premium. We were obligated to pay a $100,000 financing fee to Cornell for the note. The financing fees were being amortized over the life of the note. We were amortizing the beneficial conversion expense of $157,333 over the life of the note. In February, 2005 we
converted the debenture and accrued interest of $23,151 into 10,231,510 shares of our preferred stock. The un-amortized expenses of $202,513 were classified to additional paid in capital at the time of the conversion. We were obligated to file a SB-2 registration statement within 30 days of the initial funding or pay a 2% penalty per month and we have recorded penalties of $120,000 as of March 31, 2005.



In March 2005, we sold an additional 4,750,000 shares of preferred stock valued at $475,000 to Montgomery Equity Partners, LTD, for proceeds of $200,000, assignment of a note receivable in Colmena Corp. of $200,000, accrued interest of $4,339 and fees of $70,661.



In September 2004, the Company issued a total of 500,000 shares of common stock for past services of $13,500.



In December 2004, the Company issued a total of 521,739 shares of common stock valued at $228,000 for satisfaction of the judgment and penalties.



In December 2004 the Company issued 1,277,029 shares of Common stock valued at $255,406 for full satisfaction of a convertible note and accrued interest entered into in November 2003.



In January 2005, the Company amended its consulting services agreement dated September 20, 2004 with Triple Crown Consulting Inc. (Triple Crown). The Agreement was extended until May 31, 2005. As compensation, The Company agreed to issue Triple Crown a total of 850,000 shares of common stock valued at $250,000. The Company issued a total of 575,000 shares of common stock valued at $240,000 pursuant to this agreement. In June 2005 the Company and Triple Crown agreed to terminate the agreement.



The securities described in this Item were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933. Each such issuance was made pursuant to individual contracts which are discrete from one another and are made only with persons who were sophisticated in such transactions and who had knowledge of and access to sufficient information about Advantage Capital to make an informed investment decision. Among this information was the fact that the securities were restricted securities.










ITEM 6. SELECTED FINANCIAL DATA



The following selected financial data for the years ended March 31, 2001, 2002, 2003, 2004, 2005 and 2006 is derived from our financial statements. The data should be read in conjunction with our financial statements and related notes thereto and Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report.




2006
        2005
        2004
        2003
        2002
        2001Operating Revenues
(Capital raising fees and interest income)
        $421,991
        $176,128
        0
        0
        $1,721
        $10,305Net income (loss) from continuing operations
        ($9,424,833)
        ($764,407)
        ($1,317,947)
        ($241,471)
        ($5,536)
        ($167,953)Income/loss per common share:
Continuing operations
        (.47)
        (.08)
        (.03)
        (.00)
        (.01)
        (.01)Total Assets
        $2,087,966
        $2,332,486
        $384,922
        $116,910
        $116,891
        $117,727Long term obligations/ Preferred stock
        $1,423,151
        1,498,151
        0
        0
        0
        0Cash dividends per common share
        0
        0
        0
        0
        0
        0



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



This Annual Report on Form 10-K contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in or incorporated by reference into this Form 10-K, are forward-looking statements. In addition, when used in this document, the words anticipate, estimate, project and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to certain risks, uncertainties and assumptions including risks relating to our limited operating history and operations losses; significant capital requirements; development of markets required for successful performance by the Company as well as other risks described in the Companys Annual Report on
this Form 10-K. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Although the Company believes that the expectations we include in such forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct.












CRITICAL ACCOUNTING POLICIES



Advantage Capital Development Corp. financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States of America (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures, including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis. Primary areas where our financial information is subject to the use of estimates,
assumptions and the application of judgment include acquisitions, valuation of investments, and the realizability of deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.



VALUATION OF LONG-LIVED AND INTANGIBLE ASSETS



The recoverability of long-lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules as required by SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of as amended by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus, the recoverability of the asset.



INCOME TAXES



We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of March 31, 2006, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.



VALUATION OF INVESTMENTS



As required by ASR 118, the investment committee of the company is required to assign a fair value to all investments. To comply with Section 2(a) (41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the boards direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the companys portfolio. The directors must
recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the findings of such intervals must be carefully reviewed by the directors in order to satisfy themselves that the resulting valuations are fair.



No single standard for determining fair value...in good faith can be
laid down, since fair value depends upon the circumstances of each individual
case. As a general principle, the current fair value of an issue of
securities being valued by the board of directors would appear to be the amount
which the owner might reasonably expect to receive for them upon their current
sale. Methods, which are in accord with this principle, may, for example, be
based on a multiple of earnings, or a discount from market of a similar freely
traded security, or yield to maturity with respect to debt issues, or a
combination of these and other methods. Some of the general factors, which the
directors should consider in determining a valuation method for an individual
issue of securities, include:












1) the fundamental analytical data relating to the investment, 2) the nature and duration of restrictions on disposition of the securities, and 3) an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters.



Our board has arrived at the following valuation method for our investments. Where there is not a readily available source for determining the market value of any investment, either because the investment is not publicly traded, or is thinly traded, or in absence of a recent appraisal, the value of the investment shall be based on the following criteria:




1.
        Total amount of the Companys actual investment (AI). This amount shall include all  loans, purchase price of securities, and fair value of securities given at the time of exchange.2.
        Total revenues for the preceding twelve months (R).3.
        Earnings before interest, taxes and depreciation (EBITD)4.
        Estimate of likely sale price of investment (ESP)5.
        Net assets of investment (NA)6.
        Likelihood of investment generating positive returns (going concern).

The estimated value of each investment shall be determined as follows:



o Where no or limited revenues or earnings are present, then the value shall be the greater of the investments a) net assets, b) estimated sales price, or c) total amount of actual investment.



o Where revenues and/or earnings are present, then the value shall be the greater of one time (1x) revenues or three times (3x) earnings, plus the greater of the net assets of the investment or the total amount of the actual investment.



o Under both scenarios, the value of the investment shall be adjusted down if there is a reasonable expectation that the Company will not be able to recoup the investment or if there is reasonable doubt about the investments ability to continue as a going concern.



We have not retained independent appraises to assist in the valuation of the portfolio investments because the cost was determined to be prohibitive for the current levels of investments.



EXPENSES AND REVENUE



On August 12, 2004, Advantages Board of Directors voted to be regulated pursuant to Section 54 of the Investment Act. As such all expenses incurred prior to August 12, 2004 have been reclassified to Cumulative Effect of Change in Accounting Principle in the accompanying Statement of Operation.



Capital raising fees increased for the year ended March 31, 2006 to $284,004 from $134,855 for the year ended March 31, 2005. The Company typically charges a 10% up front non refundable fee for most financing transactions.



Factoring fees increased for the year ended March 31, 2006 to $28,875 from $0 for the year ended March 31, 2005.

Interest income increased for the year ended March 31, 2006 to $109,112 from $41,273 for the year ended March 31, 2005. The Company typical charges interest at a rate of between 5% to 10% on convertible notes it purchases. The Company may also receive warrants as part of the financing. No value has been recorded for these warrants until they are exercised.



General and administrative expenses were $64,550 for the year ended March 31,
2006 compared to $0 for the year ended March 31, 2005.. Consulting was $809,210
for the year ended March 31, 2006 compared to $384,854 for the year ended March
31, 2005. The increase was caused by $802,000 which was paid by the issuance of
3,475,000 shares of common stock. This was mainly attributable to the change in
management of the Company and an election to become a business development
corporation This was mainly attributable to the change in management of the
Company and an election to become a business development corporation.. Legal and
professional fees were








$174,519 for the year ended March 31, 2006 compared to $80,309 for the year ended March 31, 2005, this was a result of the Company becoming a Business Development corporation. Management fees were $90,000 for the year ended March 31, 2006 compared to $73,500 for the year ended March 31, 2005, Company utilizes and unrelated third party for business development services.



Interest expense for year ended March 31, 2006 was $99,655 compared to $70,156 for year ended March 31, 2005. The increase in interest was a direct result of the Companys financing through a $1,000,000, 5% convertible note.



Penalties expense was $300,000 for the year ended March 31, 2006 compared to $120,000 for the year ended March 31, 2005. The Company was obligated to file a SB-2 registration statement within 30 days of the initial funding of it convertible debenture or pay a 2% penalty per month. The Company has recorded penalties of $327,500 as of March 31, 2006.



Settlement increased to $7,796,147 for the year ended March 31, 2006 from $40,694 for the year ended March 31, 2005. On October 12, 2004, the Company was served with a Third Party Complaint by American Motorists Insurance Company in victory Village Limited III v. Builders Control Services Company, Inc. and American Motorist Insurance Company (AMIC), District Court, Clark County, Nevada. The Complaint is based on alleged bond made by the Company to American Motorist in 1995  The complaint is based on an agreement signed by the Company that required the Company to indemnify the issuer of a bond in which a wholly owned subsidiary of the Company was a principle. The bond was issued in connection with a real estate transaction that began in 1995. The events that led to the default on the bond occurred between the years of 1995 and 2004. According to the complaint, the Company, while known as
C.E.C. Industries Corp. and controlled by a prior management, agreed to indemnify the issuer of the bond for all claims arising against the bond. On June 29, 2006 a judgment in the amount of $7,796,147 was levied against the Company.



CHANGES TO THE BOARD OF DIRECTORS



On September 9, 2005, Alex Roytman and Jami Agins were appointed as members of the Companys Board of Directors. On September 30, 2005, David Goldberg and Craig Press resigned as member of the Companys Board of Directors.



PLAN OF OPERATIONS



We are a Nevada corporation with our principal and executive offices located at 2999 N.E. 191st Street, Penthouse 2, Aventura, FL 33180, telephone (866) 820-5139. We were incorporated as Justheim Petroleum Company in Nevada in 1952. C.E.C. Management Corp. was merged into Justheim Petroleum Company effective December 31, 1986, and was renamed C.E.C. Industries Corp. Prior to the merger, Justheim had historically engaged in the business of acquiring, holding and selling oil and gas leaseholds and retaining overriding royalty rights. C.E.C. Management Corp. primarily was in the business of engineering consulting and designing and marketing customized minerals processing systems and equipment.



On November 30, 2003, we entered into an Acquisition and Financing Agreement with PayCard Solutions, Inc., pursuant to which our subsidiary, Paycard Unlimited, Inc. purchased all of the outstanding shares of PayCard in consideration for the issuance of 3,000,000 CEC shares to the PayCard shareholders and 200 shares or twenty (20%) percent of the Subsidiarys outstanding shares, whichever is greater. Pursuant to the Agreement, we agreed to lend a total of $250,000 to PayCard for a term of one year with eight (8%) interest which shall be secured by Paycard. A total of $250,000 was loaned to PayCard pursuant to this agreement through loan secured by CEC and of such amount a total of $53,150 was provided by an independent entity.



We subsequently discovered that a shareholder of such entity was indicted for
bank fraud and related charges in federal court in California. The individual
has provided information confirming that loan proceeds from the entity have no
connection to the pending criminal case against the individual. As a
precautionary measure, we determined that it was appropriate to take immediate
steps to sever its relationship with both the individual and the entity as well
as any other companies affiliated with the individual, and return, to the extent
practicable, the parties to the original positions they were in before the
transactions were effected. To effect this separation, both the individual and
the entity have agreed to assign the portion of the note ($53,150) paid by the
entity to the entity. The entity, the individual and any other companies
affiliated with the individual have also agreed to return all of the CEC shares








owed by them to us and have agreed to release us from any obligations owed to the entity, the individual and his affiliated entities.



Due to this situation, Paycard refused to provide its Financial Statements to us so that we could complete its audited financial statements for our March 31, 2004 10KSB. Therefore, we assigned eighty-five (85%) percent of our ownership interest in Paycard to Knightsbridge Holding, LLC, which has been providing and will continue to provide funding to us. Upon completion of such assignment, we now only own fifteen (15%) percent of PayCard and are no longer required to provide an audit for PayCard.



We also entered into an Asset Purchase Agreement with CEC Asset Reclamation Corp. to sell the balance of its remaining assets for a total purchase price of 80% of net proceeds in the liquidation of these assets.



On August 12, 2004, Advantages Board of Directors voted to be regulated pursuant to Section 54 of the Investment Act. The decision to be regulated pursuant to Section 54 of the Investment Act was made primarily to better reflect Advantages anticipated future business and for developing relationships. As a business development company under Section 54 of the Investment Act, Advantage is required to invest a portion of its assets into developing companies. Advantage is focusing its investments in developing companies, but does not intend to limit its focus its investments in any particular industry. Advantage intends to seek investments in companies that offer attractive investment opportunities.



We now focus on our business plan of (i) investing in small public companies through the issuance by them of secured convertible debentures in the $200,000 to $750,000 range and (ii) investing in private companies that may be good targets for spin offs or registration. We also intend to provide the Company with the flexibility to pursue special situations that provide good opportunities for our stockholders.



We have elected to pursue what we believe to be an opportunity within the market for meeting the short and medium term financing needs of small private and public companies. We believe we will be well positioned to meet those needs by utilizing a variety of financing structures while trying to achieve returns in excess of risk adjusted market returns.



In August 2004, the Company entered into a Business Development Agreement with Global IT Holdings, Inc. (Global), a New York-based holding company created to acquire targeted internet technology (IT) staffing firms. The Company received a twenty one percent (21%) or 593,250,000 shares of Globals common stock, in exchange for its commitment to provide business development services to Global. On March 6, 2006, the Company issued a stock dividend distribution dividend of 331,799,021 of its common shares of Global IT Holdings, Inc. to shareholders of record on February 20, 2006. The Company will still retain a 9.9 percent stake in Global the IT staffing holding company. The fair market value of the common stock retained by the Company was $50,246 at March 31, 2006 and is recorded as an unrealized gain. The Company invested $500,000 through a collateralized senior debenture. The note bears
interest at six and one-half percent (6.5%) and matures on December 31, 2004. The Company advanced Global an additional total of $165,000 with similar terms as above with an interest rate of 10%. In February 2005, the Company extended the due date of its Series A 6.5% notes with Global IT Holdings, Inc. until March 31, 2006. In March 2006 the Company extended the due date of the notes to December 31, 2006. During the year ended March 31, 2006 the Company advanced an additional $76,300 with similar terms as above The Company recognized capital raising of $7,000 associated with this transaction. For the year ended March 31, 2006 the Company recognized interest income of $28,826 associated with these debentures. In July, 2005 the Company received a repayment of $250,000 of principal. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $61,855 and interest income of $24,268 associated with these debentures. As of March 31, 2006 and 2005, Global
owed the Company $491,300 and $500,000, respectively.



In October 2004 the Company entered into a promissory note and security
agreement in the amount of $50,000 with a company. In February 2006 the Company
received a $10,000 payment on the note. The note bears interest at a rate of 10%
per annum. The third party has agreed that the return on the note will be 25%
and will have 90 days from the date of the note repayment to pay the difference.
For the year ended March 31, 2006 the Company recognized $4,754 of interest
income associated with this promissory note. For the year ended March 31, 2005
the Company recognized $2,069 of interest income associated with this promissory
note. As of March 31,2006 and 2005, the Company was due $40,000 and $50,000,
respectively.












In October 2004, the Company purchased a convertible debenture of American Publishing, Inc. from an unrelated third party in the amount of $18,259. The debenture is convertible into $36,518 of common stock upon demand by the Company. During the year ended March 31, 2005 the Company converted a total of $10,000 into common stock and recognized gains of $26,592 on the sale of the common stock. As of March 31, 2006 the Company still retains common stock with a basis pf $1,244 and a fair market value of $8,481. In addition, on March 29, 2006 the Company loaned American Publishing an additional $17,000 at a rate of 10% per annum due June 29, 2006 or is convertible into common stock at a price of 75% of market value. For the year ended March 31, 2005 the Company recognized gains of $5,870 associated with the sale of common stock.



In November 2004 the Company purchased a $200,000 8% secured convertible debenture from Colmena Corp. (Colmena). The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the thirty (30) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.30 per share. The warrants expire 2 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. In March 2005 the Company purchased an additional $200,000 of 8% secured convertible debenture of Colmena Corp from an
unrelated third party. Colmena is currently in default on filing its registration and is subject to a 2% per month penalty. For the year ended March 31, 2006 the Company recognized income from penalties of $96,000 and interest income of $32,002 associated with these secured debentures. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $20,000 and interest income of $6,839 associated with these secured debentures. As of March 31,2006 and 2005, Colmena owed the Company $400,000.



In December 2004 the Company purchased $250,000 of 5% convertible debenture from Cinema Ride, Inc.(Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a)an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance.



In January 2005 the Company purchased an additional $280,000 of 5% convertible debenture from Cinema Ride, Inc. (Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006 the Company
recognized interest income of $27,998 associated with these convertible debentures. In March, 2006 the Company converted $25,000 of the debenture into common stock, the Company recognized a gain of $3,115 on the sale of the common stock.



Cinema Ride defaulted on the Secured Note issued to the Company in the
principal amount of $530,000 for failing to have its registration statement
declared effective by the specified Filing Date according to the terms of the
Note. The Company rescinded such default and entered into a settlement with
Cinema Ride to cure the liquidated damages owed to Advantage Capital.
The terms of the Agreement consisted of three equal installments of
$10,600.00, payable on the 18thday of each month beginning October 18, 2005 and ending December 18,
2005 (Payment Plan). The Company further agreed to extend the date
on which Borrower must have its registration statement declared effective
by the United States Securities and Exchange Commission to November 30,
2005. If the Borrowers registration statement is declared effective by
November 30, 2005, the Company agreed to forgo the October and
November payments due from the Borrower according to the Payment Plan. If the
Borrowers registration statement is not declared effective
by November 30, 2005, the Default shall be reinstated and all amounts due
and owing to the Company shall immediately become payable. For the year
ended March 31, 2006 the Company recognized $175,200 in financing revenue as a
result of those penalties. For the year ended March 31, 2005 the Company
recognized income from capital raising fees of $53,000 and interest income of
$8,066 associated








with these convertible debentures. As of March 31,2006 and 2005, Cinema Ride owed the Company $505,000 and $530,000, respectively.



For the year ended March 31, 2006 the Company purchased an additional $40,750 of common stock of Global Triad, Inc. (Global Triad). The Company sold a total of $68,988 of the common stock for the year ended March 31, 2006, the Company recognized gains of $20,133 associated with sale of sale of these securities. For the year ended March 31, 2005 the Company recognized gains of $7,766 associated with sale of sale of these securities.



In July 2005, the Company entered into a 30 day promissory note and security agreement in the amount of $30,000 with a company. The note bears interest at a rate of 18% per annum. The note was repaid in September 2005. The Company received a total of $39,000 which included legal fees, capital raising fees and interest.



In September 2005, the Company purchased a convertible debenture of Cargo Connection, Inc. from an unrelated third party in the amount of $50,000. The debenture is convertible into common stock upon demand by the Company at a 80% of the average 3 lowest closing bid prices over the five days prior to conversion. During the year ended March 31, 2006 the Company converted a total of $30,000 and recognized a gain of $20,294 on sale of the stock. In addition the Company recognized interest income of $8,140 on the notes and capital raising fees of $3,174. In March, 2006 the Company was repaid the outstanding debenture balance of $20,000 and the interest of $8,140.



In March, 2006, the Company purchased $100,000 of 12% secured convertible debenture from Global Imports and Trading, Inc. (Global Imports). The debenture is due 18 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received common stock warrants to purchase a total of 2.99% of the fully diluted shares of Global Imports common stock The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006 the Company
recognized interest income of $2,333 associated with this debenture.



In March 2006, the Company entered into a one year promissory note and security agreement in the amount of $16,000 with Pryaer Haute Couture, Inc. The note bears interest at a rate of 10% per annum.



We terminated our Engagement Agreement with Knightsbridge Holdings, LLC and our consulting services agreement dated September 20, 2004 with Triple Crown Consulting Inc.



Pursuant to the requirements of the 1940 Investment Act, we have obtained a fidelity bond and our board of directors adopted a compliance manual.



On March 6, 2006, the Company received written consents in lieu of a meeting of Stockholders from holders of 10,586,264 shares (representing approximately 51.09% of the 20,719,699 issued and outstanding shares of the Companys common stock as of the date hereof), approving and authorizing the withdrawal of the Companys election to be treated as a Business Development Company (BDC) under the Investment Company Act of 1940 (the Investment Company Act); and the Board plans on filing a Withdrawal Notice with the Securities and Exchange Commission (the SEC) to withdraw the Companys election to be treated as a BDC.



LIQUIDITY AND CAPITAL RESOURCES



In August 2004, we entered into a Standby Equity Distribution Agreement with
Cornell Capital. Under this agreement, we may issue and sell to Cornell Capital,
Common Stock for a total purchase price of up to $25.0 million. We will be
entitled to commence drawing down on the Standby Equity Distribution Agreement
when the sale of the Common Stock under the Standby Equity Distribution
Agreement is registered with the SEC and for two years thereafter. The purchase
price for the shares will be equal to 98% of the market price, which is defined
as the lowest closing bid price of the Common Stock during the five trading days
following the notice date. A cash fee equal to ten percent (10%) of the cash
proceeds of the draw down is also payable at the time of funding. To date, we
have not received any funding under the Standby Equity Distribution Agreement,
and no shares have been issued. The parties have agreed to cancel the Standby
Equity Distribution Agreement, and all rights and obligations thereunder were
terminated.



On August 25, 2004, we issued $1,000,000 in convertible debentures to Cornell Capital. These debentures are convertible into shares of our Common Stock at the price per share price equal to the volume weighted average price of the Common Stock as listed on Pink Sheets or OTC Bulletin Board (or Nasdaq SmallCap Market or American Stock Exchange), as quoted by Bloomberg L.P. during the three (3) trading days immediately preceding the conversion date. These convertible debentures bear interest at 5% and are convertible at the holders option. These convertible debentures have a term of three years and may be redeemed, at our option at a 20% premium. In








February 2005, the parties entered into an Investment Agreement pursuant to which the parties agreed to terminate the convertible debentures, and Cornell Capital agreed to purchase 14,981,510 shares of Series A Preferred Stock.



On September 20, 2004, we filed a Form 1E Notification under Regulation E of the Securities Act of 1933 to raise up to $5,000,000 in a Regulation E offering. The Shares were offered by the officers and directors of the Company on a best efforts basis with no minimum. The offering price may change during this offering, at the discretion of the Board of Directors based on terms that can be negotiated, but not will not be less than $0.001 per share nor more than $2.00 per share. The Company has not engaged any broker/dealers licensed by the National Association of Securities Dealers, Inc. for the sale of these shares and has no intention to do so. To date the Company has raised almost $700,000 in this offering.



On October 5, 2004 the Company entered an agreement with Alpha Capital Aktiengesellschaft to issue a total of 4,000,000 shares of common to be held in escrow as part of a purchase option agreement. The purchaser has the right to purchase shares a price of 70% of the lowest 5 day closing price for the 20 days prior to the closing date. This option has expired and the balance of the shares which were held in escrow were returned to the Company.



In March 2005, the Company sold an additional 4,750,000 shares of preferred stock valued at $475,000 to Montgomery Equity Partners, LTD, for proceeds of $200,000, assignment of a note receivable in Colmena Corp. of $200,000, accrued interest of $4,339 and fees of $70,661.



During the year ended March 31, 2006, Montgomery Equity Partners, LTD redeemed 750,000 shares of its Preferred Stock for proceeds of $75,000. The Company also paid an additional $25,000 in accrued penalties it owed on the Preferred Stock.



On March 6, 2006, the Company received written consents in lieu of a meeting of Stockholders from holders of 10,586,264 shares (representing approximately 51.09% of the 20,719,699 issued and outstanding shares of the Companys common stock as of the date hereof), approving and authorizing the withdrawal of the Companys election to be treated as a Business Development Company (BDC) under the Investment Company Act of 1940 (the Investment Company Act); and the Board plans on filing a Withdrawal Notice with the Securities and Exchange Commission (the SEC) to withdraw the Companys election to be treated as a BDC.



Except for these financing agreements, other than through its operations, the Company has no other significant sources of working capital or cash commitments. However, no assurance can be given that we will raise sufficient funds from such financing arrangements, or that we will ever produce sufficient revenues to expand our operations to a desirable level, or that a market for our common stock will be further developed for which a significant amount of our financing is dependant.



Management believes that the financing arrangements in place are sufficient to satisfy Advantage Capitals cash requirements for the next twelve months. If Advantage Capital is unable to recognize sufficient proceeds from these arrangements, Management believes that Advantage Capital can limit its operations, defer payments to Management and maintain its business at nominal levels until it can identify alternative sources of capital.












ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders

Advantage Capital Development Corporation

19066 NE 29thStreet

Aventura, FL 33180



We have audited the accompanying statement of net assets, including the schedule of investments, of Advantage Capital Development Corporation as of March 31, 2006 and 2005 and the related statements of operations, and changes in net assets for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.



We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the 2006 and 2005 financial statements referred to above present fairly, in all material respects, the financial position of Advantage Capital Development Corporation as of March 31, 2006 and 2005, and the results of its operations and its changes in net assets for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As more fully explained in Note 1 to the financial statements, a judgment in the amount of approximately $8 million was levied against the Company. This uncertainty to satisfy the judgment raises substantial doubt about the Companys ability to continue as a going concern. Managements plans are also described in Note 1. The Companys financial statements do not include any adjustments that might result from the outcome of this uncertainty should the Company be unable to continue as a going concern.



Wiener, Goodman & Company, P.C.

Eatontown, New Jersey



July 28, 2006
















ADVANTAGE CAPITAL DEVELOPMENT CORPStatement of Net AssetsMarch 31,2006
        
        2005ASSETS:Loans and investments in portfolio securitiesat market or fair value:Affiliate companies (cost of $1,605,033 and $1,619,019, respectively)
        $
        1,674,515
        $
        1,627,477Cash
        
        114,726
        
        307,391Interest receivable
        
        279,930
        
        27,618Prepaid expenses
        
        18,825
        
        -Deferred financing costs
        
        -
        
        370,000Total Assets
        
        2,087,996
        
        2,332,486LIABILITIES:Accounts payable
        
        55,672
        
        36,978Accrued expenses
        
        531,470
        
        152,668Accrued judgment
        
        7,796,147
        
        -Total Liabilities
        
        8,383,289
        
        189,646NET ASSETSPreferred stock, $.001 par value; 100,000,000 authorized,14,231,510 and 14,981,511 issued and outstanding, repectively
        
        1,423,151
        
        1,498,151Common stock, $.001 par value; 5,000,000,000shares authorized, 19,900,090 shares and 15,437,648issued and outstanding, respectively
        
        19,900
        
        15,438Additional paid-in capital
        
        13,177,763
        
        12,240,236Accumulated deficit
        
        (20,916,107)
        
        (11,610,985)Net Assets
        $
        (6,295,293)
        $
        2,142,840Net assets per share
        $
        (0.32)
        $
        0.14See notes to financial statements












ADVANTAGE CAPITAL DEVELOPMENT CORPSTATEMENTS OF OPERATIONSFor the years endedMarch 31,2006
        
        
        2005REVENUES:Capital raising fees
        $
        284,004
        
        $
        134,855Factoring fees
        
        28,875
        
        
        -Interest income
        
        109,112
        
        
        41,273Total Revenue
        
        421,991
        
        
        176,128COST AND EXPENSES:General and administrative
        
        64,550
        
        
        62,196Consulting
        
        809,210
        
        
        384,854Amortization
        
        -
        
        
        24,986Warrants expense
        
        -
        
        
        20,020Advertising
        
        17,651
        
        
        -Travel
        
        8,835
        
        
        16,909Salaries
        
        116,257
        
        
        43,750Legal and prefessional
        
        174,519
        
        
        80,309Management fees
        
        90,000
        
        
        73,500Interest expense
        
        99,655
        
        
        70,156Settlements
        
        7,796,147
        
        
        40,694Financing fees
        
        370,000
        
        
        3,161Penalties
        
        300,000
        
        
        120,000Total operating expenses
        
        9,846,824
        
        
        940,535(9,424,833)
        
        
        (764,407)Net unrealized appreciation on Investment transactions
        49,026
        
        
        8457Net realized appreciation on Investment transactions
        70,685
        
        
        13,623Net (decrease) in net assetsresulting from operations and beforecumulative effect of change in accountingprinciples
        
        (9,305,122)
        
        
        (742,327)Cumulative effect of change in accountingprinciples
        
        -
        
        
        (248,999)Net (decrease) in net assetsresulting from operations aftercumulative effect of change in accountingprinciples
        $
        (9,305,122)
        
        $
        (991,326)






WEIGHTED AVERAGE NUMBER OF COMMONSHARES OUTSTANDING - basic and diluted
        19,900,090
        
        
        9,456,811.NET LOSS PER SHARE - basic and diluted beforecumulative effect of change in accountingprinciples
        $
        (0.47)
        
        $
        (0.08)Cumulative effect of change in accountingprinciples
        $
        -
        
        $
        (0.03)NET LOSS PER SHARE - basic and diluted aftercumulative effect of change in accountingprinciples
        $
        (0.47)
        
        $
        (0.11)See notes to financial statements








ADVANTAGE CAPITAL DEVELOPMENT CORPSchedule of InvestmentsBalance March 31, 2005Percentage of
        
        FairCompany
        Description of Business
        Investments
        Cost
        Market value
        AffiliationInvestments equal 69% of net assetsDebtGlobal IT Holdings
        IT Staffing
        38%
        $ 615,000
        $ 615,000
        NoneCollege Partners
        Education
        3%
        50,000
        50,000
        NoneCinema Ride, Inc.
        Entertainment
        33%
        530,000
        530,000
        NoneColmena Corp
        Software
        24%
        400,000
        400,000
        None98%
        1,595,000
        1,595,000EquityGlobal IT Holdings
        IT StaffingAmericana Publishing
        Books
        1%
        14,867
        19,867
        NoneGlobal Triad, Inc.
        Communication
        1%
        9,152
        12,610
        None2%
        24,019
        32,477100%
        $ 1,619,019
        $1,627,477Balance March 31, 2006Percentage of
        
        FairCompany
        Description of Business
        Investments
        Cost
        Market value
        AffiliationInvestments equal 80% of net assetsDebtGlobal IT Holdings
        IT Staffing
        30%
        $ 491,300
        $ 491,300
        NoneCollege Partners
        Education
        2%
        40,000
        40,000
        NoneCinema Ride, Inc.
        Entertainment
        30%
        505,000
        505,000
        NoneAmericana Publishing
        Books
        1%
        9,868
        21,867
        NoneGlobal Imports
        Domestic goods
        6%
        100,000
        100,000
        NoneCES International, Inc
        Software
        2%
        41,621
        41,621
        NonePrayer Haute Couture, Inc.
        Garment design
        1%
        16,000
        16,000
        NoneColmena Corp
        Software
        24%
        400,000
        400,000
        None96%
        1,603,789
        1,615,788EquityAmericana Publishing
        Books
        1%
        1,244
        8,481
        NoneGlobal IT Holdings
        IT Staffing
        3%
        -
        50,246
        None4%
        1,244
        58,727100%
        $ 1,605,033
        $1,674,515See notes to financial statements






ADVANTAGE CAPITAL DEVELOPMENT CORP.STATEMENT OF CHANGES IN NET ASSETSFor the Years EndedMarch 31,2006
        
        2005Decrease in net assets from operationsInvestment loss - net
        
        $
        (9,424,833)
        $
        (764,407)Cumulative effect of change in accounting principles
        -
        
        (248,999)(9,424,833)
        
        (1,013,406)Net change is unrealized appreciation of investments
        49,026
        
        8,457Net change is realized appreciation of investments
        70,685
        
        13,623Net decrease in net assets resultingfrom operations
        
        (9,305,122)
        
        (991,326)Capital Share Transactions
        
        866,989
        
        3,965,200Total Increase / (Decrease)
        
        (8,438,133)
        
        2,973,874Beginning of the year
        
        
        2,142,840
        
        (831,034)End of Year
        
        $
        $ (6,295,293)
        $
        2,142,840.See notes to financial statements








ADVANTAGE CAPITAL DEVELOPMENT CORP.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2006



1. BASIS OF PRESENTATION



Advantage Capital Development Corp. (Advantage or the Company) was incorporated as Justheim Petroleum Company in Nevada in 1952. C.E.C. Management Corp. was merged into Justheim Petroleum Company effective December 31, 1986, and was renamed C.E.C. Industries Corp. Prior to the merger, Justheim had historically engaged in the business of acquiring, holding and selling oil and gas leaseholds and retaining overriding royalty rights. C.E.C. Management Corp. primarily was in the business of engineering consulting and designing and marketing customized minerals processing systems and equipment.



On August 12, 2004, the Companys board of Directors voted to be regulated pursuant to Section 54 of the Investment Act. The decision to be regulated pursuant to Section 54 of the Investment Act was made primarily to better reflect Advantages anticipated future business and for developing relationships. As a business development company under Section 54 of the Investment Act, Advantage is required to invest a portion of its assets into developing companies. Advantage is focusing its investments in developing companies, but does not intend to limit its focus or its investments in any particular industry. Advantage intends to seek investments in companies that offer attractive investment opportunities.



On March 6, 2006, the Company received written consents in lieu of a meeting of Stockholders from holders of 10,586,264 shares (representing approximately 51.09% of the 20,719,699 issued and outstanding shares of the Companys common stock as of the date hereof), approving and authorizing the withdrawal of the Companys election to be treated as a Business Development Company (BDC) under the Investment Company Act of 1940 (the Investment Company Act); and 20 calendar days after the mailing of this Information Statement, the Board will be filing a Withdrawal Notice with the Securities and Exchange Commission (the SEC) to withdraw the Companys election to be treated as a BDC.



The Companys financial statements for the year ended March 31, 2006 have been prepared on a going concern basis which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. Management recognizes that the Companys continued existence is dependent upon its ability to obtain needed working capital through additional equity and/or debt financing and revenue to cover expenses as the Company continues to incur losses.



The Company presently does not have sufficient liquid assets to finance its anticipated funding needs and obligations. A judgment in
the amount of approximately $8 million was levied against the Company in connection with events that occurred while the Company was
controlled by prior management. All present assets are secured by the preferred shareholders. At this time, the Company does not have
the ability to liquidate or satisfy the judgment. Management is actively seeking negotiations to settle the claim. This uncertainty
leaves substantial doubt about the ability of the Company to continue as a going concern. The accompanying financial statements do
not include any adjustments that might result from the outcome of this uncertainty should the Company not be able to continue as a
going concern.



2. SIGNIFICANT ACCOUNTING POLICIES



Basis of Accounting



These financial statements are presented on the accrual method of accounting in accordance with generally accepted accounting principles. Significant accounting principles followed by the Company and the methods of applying those principles, which materially affect the determination of financial position and cash flows, are summarized below.






The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates.



Cumulative Effect of Change in Accounting Principle



On August 12, 2004, Advantages Board of Directors voted to be regulated pursuant to Section 54 of the Investment Act. As such, all expenses incurred prior to August 12, 2004 have been reclassified to Cumulative Effect of Change in Accounting Principle in the accompanying Statement of Operations.



Cash and Cash Equivalents



The Company considers all highly liquid debt instruments and investments, purchased with an original maturity date of three months or less, to be cash equivalents.



Income Taxes



The Company accounts for income taxes under SFAS No. 109, which requires the asset and liability approach to accounting for income taxes. Under this method, deferred assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse.



The Company is currently taxed as a corporation under Subchapter C of the Internal Revenue Code. We intend to elect to be treated as a regulated investment company or RIC under Subchapter M of the Internal Revenue Code with the filing of our federal corporate income tax return for 2005, which election would be effective as of 2005. As a RIC, the Company generally will not have to pay corporate taxes on any income it distributes to its stockholders as dividends, which will allow us to reduce or eliminate our corporate-level tax liability.



Net earnings (loss) per share



Basic and diluted net loss per share information is presented under the requirements of SFAS No. 128, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period, less shares subject to repurchase. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, shares subject to repurchase, warrants and convertible preferred stock, in the weighted-average number of common shares outstanding for a period, if dilutive. Potentially dilutive securities of 139,066,750 have been excluded from this computation, as their effect is anti-dilutive.



Stock Based Compensation



The Company issues shares of common stock to non-employees as stock based compensation. The Company accounts for the services using the fair market value of the services rendered. For the year ended March 31, 2006 and 2005 the Company issued 3,475,000 and 3,101,733 shares of common stock and recorded compensation expense of $802,000 and $646,000 ,respectively, in connection with the issuance of these shares.



Fair Value of Financial Instruments



The carrying amount of cash and accounts payable are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.










Revenue Recognition



Revenue is recognized in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101 (SAB 101), Revenue Recognition in Financial Statements. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured.



Investments



As required by ASR 118, the investment committee of the Company is required to assign a fair value to all investments. To comply with Section 2(a) (41) of the Investment Company Act and Rule 2a-4 under the Investment Company Act, it is incumbent upon the board of directors to satisfy themselves that all appropriate factors relevant to the value of securities for which market quotations are not readily available have been considered and to determine the method of arriving at the fair value of each such security. To the extent considered necessary, the board may appoint persons to assist them in the determination of such value, and to make the actual calculations pursuant to the boards direction. The board must also, consistent with this responsibility, continuously review the appropriateness of the method used in valuing each issue of security in the companys portfolio. The directors must
recognize their responsibilities in this matter and whenever technical assistance is requested from individuals who are not directors, the directors must carefully review the findings of such intervals in order to satisfy themselves that the resulting valuations are fair.



No single standard for determining fair value...in good faith can be laid down, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the board of directors would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods, which are in accord with this principle, may, for example, be based on a multiple of earnings, or a discount from market of a similar freely traded security, or yield to maturity with respect to debt issues, or a combination of these and other methods. Some of the general factors, which the directors should consider in determining a valuation method for an individual issue of securities, include:




1)
        the fundamental analytical data relating to the investment,2)
        the nature and duration of restrictions on disposition of the securities, and3)
        an evaluation of the forces which influence the market in which these securities are purchased and sold. Among the more specific factors which are to be considered are: type of security, financial statements, cost at date of purchase, size of holding, discount from market value of unrestricted securities of the same class at time of purchase, special reports prepared by analysis, information as to any transactions or offers with respect to the security, existence of merger proposals or tender offers affecting the securities, price and extent of public trading in similar securities of the issuer or comparable companies, and other relevant matters.



The board has arrived at the following valuation method for its investments. Where there is not a readily available source for determining the market value of any investment, either because the investment is not publicly traded, or is thinly traded, and in absence of a recent appraisal, the value of the investment shall be based on the following criteria:




1.
        Total amount of the Companys actual investment (AI). This amount shall include all loans, purchase price of securities, and fair value of securities given at the time of exchange.2.
        Total revenues for the preceding twelve months (R).3.
        Earnings before interest, taxes and depreciation (EBITD)4.
        Estimate of likely sale price of investment (ESP)5.
        Net assets of investment (NA)6.
        Likelihood of investment generating positive returns (going concern).












The estimated value of each investment shall be determined as follows:




o
        Where no or limited revenues or earnings are present, then the value shall be the greater of the investments a) net assets, b) estimated sales price, or c) total amount of actual investment.o
        Where revenues and/or earnings are present, then the value shall be the greater of one time (1x) revenues or three times (3x) earnings, plus the greater of the net assets of the investment or the total amount of the actual investment.o
        Under both scenarios, the value of the investment shall be adjusted down if there is a reasonable expectation that the Company will not be able to recoup the investment or if there is reasonable doubt about the investments ability to continue as a going concern.

Based on the previous methodology, the Company determined that the Company valued all its debt investments at cost and common stock at fair market value as of March 31, 2006.




3.
        RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued SFAS No. 123(R), that will require compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, if granted, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the period that an employee provides service in exchange for the reward. SFAS No. 123(R) is effective as to the Company as of the beginning of the Companys 2006 fiscal year. The Company is currently evaluating its position and will make its determination to account for stock-based compensation costs either prospectively or retroactively at the time of adoption. The adoption of SFAS 123(R) is expected to have a material effect on the Companys
results of operations.



In December 2004, the FASB issued SFAS No. 153, an amendment of APB Opinion No. 29 Exchanges of Nonmonetary Assets. SFAS No. 153 amends APB Opinion No. 29 by eliminating the exception under APB No. 29 for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material effect on the Companys financial position or results of operations.



In November 2004, the FASB issued SFAS No. 151, an amendment to Accounting Research Bulletin No. 43 chapter 4 Inventory Costs. SFAS No. 151 requires that abnormal costs of idle facility expenses, freight, handling costs and wasted material (spoilage) be recognized as current-period charges. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 is not expected to have a material impact on the Companys results of operations or financial position.



In May 2005 the FASB issued SFAS No. 154, Accounting Changes and Error Correction - a replacement of APB Opinion No. 20 and FASB Statement No. 3. This statement applies to all voluntary changes in accounting principles. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. This statement requires retrospective application to prior periods financial statements of changes in accounting principles, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This statement is effective for accounting changes and corrections made in fiscal years beginning after December 31, 2005.










4. FINANCIAL HIGHLIGHTS




March 31,2005
        
        2006Per Share Operating Performance:Net asset value beginning of period
        
        
        
        $  (0.14)
        
        $    0.14Income from investment operationsNet investment loss
        
        (0.05)
        
        (0.48)Net realized and unrealized gain (loss)On investment transactions
        -
        
        0.01Cumulative effect of change in accounting principle
        
        
        (0.02)
        
        -Total from investment operations
        
        
        
        (0.07)
        
        (0.47)Sale of Stock
        0.35
        
        0.01Net asset value, Year ended March 31, 2006
        
        $   0.14
        
        $  (0.32)Total Return
        
        
        275%
        
        -329%Ratios as a Percent of Average Net Assets:Expenses
        
        
        44%
        
        472%Net investment loss
        
        
        36%
        
        446%



5. INVESTMENTS



In August 2004, the Company entered into a Business Development Agreement with Global IT Holdings, Inc. (Global), a New York-based holding company created to acquire targeted internet technology (IT) staffing firms. The Company received a twenty one percent (21%) or 593,250,000 shares of Globals common stock, in exchange for its commitment to provide business development services to Global. On March 6, 2006, the Company issued a distribution in the form of a stock dividend of 331,799,021 of its common shares of Global IT Holdings, Inc. to shareholders of record on February 20, 2006. The Company will still retain a 9.9 percent stake in Global the IT staffing holding company. The fair market value of the common stock retained by the Company was $50,246 at March 31, 2006 and is recorded as an unrealized gain. The Company invested $500,000 through a collateralized senior debenture. The note
bears interest at six and one-half percent (6.5%) and matures on December 31, 2004. The Company advanced Global an additional total of $165,000 with similar terms as above with an interest rate of 10%. In February 2005, the Company extended the due date of its Series A 6.5% notes with Global IT Holdings, Inc. until March 31, 2006. In March 2006 the Company extended the due date of the notes to December 31, 2006. During the year ended March 31, 2006 the Company advanced an additional $76,300 with similar terms as above. The Company recognized capital raising fees of $7,000 associated with this transaction. For the year ended March 31, 2006 the Company recognized interest income of $28,826 associated with these debentures. In July, 2005 the Company received a repayment of $250,000 of principal. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $61,855 and interest income of $24,268 associated with these debentures. As of March 31, 2006 and
2005, Global owed the Company $491,300 and $615,000 respectively.



In October 2004 the Company entered into a promissory note and security
agreement in the amount of $50,000 with a company. In February 2006 the Company
received a $10,000 payment on the note. The note bears interest at a rate of 10%
per annum. The third party has agreed that the return on the note will be 25%
and will have 90 days from the date of the note repayment to pay the difference.
For the year ended March 31, 2006 the Company recognized $4,754 of interest
income associated with this promissory note. For the year ended March 31, 2005
the Company recognized $2,069 of interest income associated with this promissory
note. As of March 31, 2006 and 2005, the Company was due $40,000 and $50,000,
respectively.












In October 2004, the Company purchased a convertible debenture of American Publishing, Inc. from an unrelated third party in the amount of $18,259. The debenture is convertible into $36,518 of common stock upon demand by the Company. During the year ended March 31, 2005 the Company converted a total of $10,000 into common stock and recognized gains of $26,592 on the sale of the common stock. As of March 31, 2006 the Company still retains common stock with a basis pf $1,244 and a fair market value of $8,481. In addition on March 29, 2006 the Company loaned American Publishing an additional $17,000 at a rate of 10% per annum due June 29, 2006 or is convertible into common stock at a price of 75% of market value. For the year ended March 31, 2005 the Company recognized gains of $5,870 associated with the sale of common stock.



In November 2004 the Company purchased a $200,000 8% secured convertible debenture from Colmena Corp. (Colmena). The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the thirty (30) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.30 per share. The warrants expire 2 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. In March 2005 the Company purchased an additional $200,000 of 8% secured convertible debenture of Colmena Corp from an
unrelated third party. Colmena is currently in default on filing its registration and is subject to a 2% per month penalty. For the year ended March 31, 2006 the Company recognized income from penalties of $96,000 and interest income of $32,002 associated with these secured debentures. For the year ended March 31, 2005 the Company recognized income from capital raising fees of $20,000 and interest income of $6,839 associated with these secured debentures. As of March 31, 2006 and 2005, Colmena owed the Company $400,000.



In December 2004 the Company purchased $250,000 of 5% convertible debenture from Cinema Ride, Inc. (Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance.



In January 2005 the Company purchased an additional $280,000 of 5% convertible debenture from Cinema Ride, Inc.(Cinema Ride). The debenture is due 9 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received 40,000 common stock warrants at a price of $.25 per share. The warrants expire 3 years for the date of the convertible note. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006 the Company
recognized interest income of $27,998 associated with these convertible debentures. In March, 2006 the Company converted $25,000 of the debenture into common stock, the Company recognized a gain of $3,115 on the sale of the common stock.



Cinema Ride defaulted on the Secured Note issued to the Company in the
principal amount of $530,000 for failing to have its registration statement
declared effective by the specified Filing Date according to the terms of the
Note. The Company rescinded such default and entered into a settlement with
Cinema Ride to cure the liquidated damages owed to Advantage Capital.
The terms of the Agreement consisted of three equal installments of
$10,600.00, payable on the 18thday of each month beginning October 18, 2005 and ending December 18,
2005 (Payment Plan). The Company further agreed to extend the date
on which Borrower must have its registration statement declared effective
by the United States Securities and Exchange Commission to November 30,
2005. If the Borrowers registration statement is declared effective by
November 30, 2005, the Company agreed to forgo the October and
November payments due from the Borrower according to the Payment Plan. If the
Borrowers registration statement is not declared effective
by November 30, 2005, the Default shall be reinstated and all amounts due
and owing to the Company shall immediately become payable. For the year
ended March 31, 2006 the Company recognized $175,200 in financing revenue as a
result of those penalties. For the year ended March 31, 2005 the Company
recognized income from capital raising fees of $53,000 and interest income of
$8,066 associated








with these convertible debentures. As of March 31, 2006 and 2005, Cinema Ride owed the Company $505,000 and $530,000, respectively.



For the year ended March 31, 2006 the Company purchased an additional $40,750 of common stock of Global Triad, Inc. (Global Triad). The Company sold a total of $68,988 of the common stock for the year ended March 31, 2006, the Company recognized gains of $20,133 associated with sale of sale of these securities. For the year ended March 31, 2005 the Company recognized gains of $7,766 associated with sale of sale of these securities.



In July 2005, the Company entered into a 30 day promissory note and security agreement in the amount of $30,000 with a company. The note bears interest at a rate of 18% per annum. The note was repaid in September 2005. The Company received a total of $39,000 which included legal fees, capital raising fees and interest.



In September 2005, the Company purchased a convertible debenture of Cargo Connection, Inc. from an unrelated third party in the amount of $50,000. The debenture is convertible into common stock upon demand by the Company at a 80% of the average 3 lowest closing bid prices over the five days prior to conversion. During the year ended March 31, 2006 the Company converted a total of $30,000 and recognized a gain of $20,294 on sale of the stock. In addition the Company recognized interest income of $8,140 on the notes and capital raising fees of $3,174. In March, 2006 the Company was repaid the outstanding debenture balance of $20,000 and the interest of $8,140.



In March, 2006 thee Company purchased $100,000 of 12% secured convertible debenture from Global Imports and Trading, Inc.(Global Imports). The debenture is due 18 months from the date of issuance. The note plus accrued interest is convertible into common stock at (a) an amount equal to one hundred twenty percent (120%) of the final closing bid price of the Common Stock as or (b) an amount equal to eighty percent (80%) of the lowest volume weighted average price of the Companys Common Stock, for the five (5) trading days immediately preceding the conversion rate. The Company also received common stock warrants to purchase a total of 2.99% of the fully diluted shares of Global Imports common stock. The Company has not assigned any value to these warrants as they were issued at above market value of the common stock on the date of issuance. For the year ended March 31, 2006 the Company
recognized interest income of $2,333 associated with this debenture.



In March 2006, the Company entered into a one year promissory note and security agreement in the amount of $16,000 with Pryaer Haute Couture, Inc. The note bears interest at a rate of 10% per annum.



6. FACTORING AGREEMENT



The Company extended a six month Factoring Agreement (the Agreement) to CES International, Inc. (CES) in September 2005. Under the Agreement, the Company agreed to provide weekly advances to CES at 75% of the face value of specific approved customers for all closing dates occurring in the month of September 2005 up to a maximum of $300,000, with a monthly minimum of $50,000 based on a rolling three-month average. The Company agreed to provide advances to CES at 85% of the face value of the purchased invoices for all closing dates occurring in the month of October 2005, and 90% of all purchased invoices thereafter. The Company received a facility fee of 1% on the total committed factoring facility, which was paid at closing. Pursuant to the terms of the Agreement, CES issued to the Company a Warrant to purchase Two
Hundred and Fifty Thousand (250,000) shares of CES Common Stock (the Warrant Shares) for a period of five (5) years at the exercise price of $0.001 per share. The Warrant Shares shall have piggy-back and demand registration rights. At March 31, 2006, the Company has advanced $41,621 to CES. As of March 31, 2006 the factored amounts owed were converted in a note receivable by the Company. The factor agreement is secured by a lien on all of CESs tangible assets. The Companys factoring income of $8,380 for the year ended March 31, 2006 related to this factoring agreement. In addition the Company recognized interest income of $1,220 associated with the note.



7. INTEREST RECEIVABLE



Interest receivable of $279.930 consist of amounts owed to the Company from its investments in various debt instruments.






8. DEFERRED FINANCING COSTS



On August 2004, the Company entered into a Standby Equity Distribution Agreement with Cornell Capital Partners. The Company will be entitled to commence drawing down on the Standby Equity Distribution Agreement when the sale of the Common Stock under the Standby Equity Distribution Agreement is registered with the SEC and for two years thereafter. The purchase price for the shares will be equal to 98% of the market price, which is defined as the lowest closing bid price of the Common Stock during the five trading days following the notice date. A cash fee equal to ten percent (10%) of the cash proceeds of the draw down is also payable at the time of funding. To date, the Company has not received any funding under the Standby Equity Distribution Agreement. In connection with the Standby Equity Distribution Agreement, the Company issued 1,695,866 shares of its common stock valued at $370,000 to Cornell
Capital Partners as a commitment fee. The Company is obligated to issue Cornell Capital Partner an additional $370,000 commitment fee one year after the Standby Equity Distribution Agreement is declared effective.



In October 2005 the Company cancelled the agreement and expensed the deferred financing fees of $370,000.



9. PREFERRED STOCK



On August 25, 2004, the Company issued $1,000,000 in convertible debentures to Cornell Capital. These debentures are convertible into shares of our Common Stock at the price per share price equal to the volume weighted average price of the Common Stock as listed on Pink Sheets or OTC Bulletin Board (or Nasdaq SmallCap Market or American Stock Exchange), as quoted by Bloomberg L.P. during the three (3) trading days immediately preceding the conversion date. These convertible debentures bear interest at 5% and are convertible at the holders option. These convertible debentures have a term of three years and may be redeemed, at our option at a 20% premium. The Company was obligated to pay a $100,000 financing fee to Cornell for the note. The financing fees were being amortized over the life of the note. The Company was amortizing the beneficial conversion expense of $157,333 over the life of the note. In
February, 2005 the Company converted the debenture and accrued interest of $23,151 into 10,231,510 shares of the Companys preferred. The un-amortized expenses of $202,513 were reclassified to additional paid in capital at the time of the conversion. The Company was obligated to file a SB-2 registration statement within 30 days of the initial funding or pay a 2% penalty per month. The Company has recorded additional penalties of $300,000 for the year ended March 31, 2006 . As of March 31, 2006, the Company owed a total of $372,500. In August 2005, the Company issued a total of 225,000 shares of common stock as payment for $22,500 of accrued penalties. The Company to raises the dividend rate to 12% in January 2006.



In March 2005, the Company sold an additional 4,750,000 shares of preferred stock valued at $475,000 to Montgomery Equity Partners, LTD, for proceeds of $200,000, assignment of a note receivable in Colmena Corp. of $200,000, accrued interest of $4,339 and fees of $70,661.



During the year ended March 31, 2006, Montgomery Equity Partners, LTD redeemed 750,000 shares of its Preferred Stock for proceeds of $75,000. The Company also paid an additional $25,000 in accrued penalties it owed on the Preferred Stock.



On April 26, 2006, Montgomery Equity Partners, LP redeemed an additional 1,683,333 shares of Series A Preferred Stock for proceeds of $202,000.




Preferred Stock
        
        Amount2006
        
        2005
        
        2006
        
        2005Balance beginning of year
        
        
        14,981,511
        
        -
        $
        1,498,151
        $
        -Shares sold
        
        
        -
        
        14,981,511
        
        -
        
        1,498,151Shares redeemed
        
        
        (750,000)
        
        
        
        (75,000)
        
        -Balance March 31, 2006
        
        
        14,231,511
        
        -14,981,511
        
        1,423,151
        
        1,498,151








10  CAPITAL SHARE TRANSACTIONSAs of March 31, 2006, 5,000,000,000 shares of $.001 par value capital stock were authorized.Transactions in capital stock were as follows:Common Stock
        
        Amount2006
        
        2005
        
        2006
        
        2005Balance beginning of period
        
        
        15,437,648
        
        5,872,470
        $
        12,255,674
        $
        9,788,625Shares cancelled
        
        
        (550,058)
        
        (670,000)
        
        (82,511)
        
        468,377Shares sold
        
        
        225,000
        
        5,334,677
        
        22,500
        
        868,800Shares issued for accrued expenses
        
        1,312,500
        
        1,798,768
        
        200,000
        
        483,406Shares issued for services
        
        
        3,475,000
        
        3,101,733
        
        802,000
        
        646,466Balance March 31,
        
        
        19,900,090
        
        15,437,648
        $
        13,197,663
        $
        12,255,674



11 LEGAL PROCEEDINGS



On October 12, 2004, the Company was served with a Third Party Complaint by American Motorists Insurance Company in Victory Village Limited III v. Builders Control Services Company, Inc. and American Motorist Insurance Company (AMIC), District Court, Clark County, Nevada. The Complaint is based on alleged bond made by the Company to American Motorist in 1995. The complaint is based on an agreement signed by the Company that required the Company to indemnify the issuer of a bond in which a wholly owned subsidiary of the Company was a principle. The bond was issued in connection with a real estate transaction that began in 1995. The events that led to the default on the bond occurred between the years of 1995 and 2004.



According to the complaint, the Company, while known as C.E.C. Industries Corp. and controlled by a prior management, agreed to indemnify the issuer of the bond for all claims arising against the bond. On June 29, 2006 a judgment in the amount of $7,796,147 was levied against the Company. For the year ended March 31, 2006 the Company recorded an accrued judgment of $7,796,147.



In a letter from the Securities and Exchange Commission (SEC or
Commission) dated June 17, 2005, management learned that due to
certain actions taken by previous management some seven years ago and the
subsequent settlement with the Commission relating to those activities, we might
not be eligible to rely on the exemption offered in Regulation E for the
offering that we initiated in October 2004. Section 230.602(b)(4) of Regulation
E prohibits any issuer from relying on Regulation E as an exemption for its
securities if the issuer is subject to an injunction or restraining order within
five years prior to the filing of notification with the Commission that the
Company intends to elect to be regulated as a business development company. An
injunction was implemented against the Company by the United States District
Court of Columbia based on actions that occurred by previous management in 1996
and 1997 as set forth in SEC Litigation Release No. 17139 (the
Release) dated September 19, 2001. The Company subsequently filed
our Notification of Election to be regulated as a business development company
on August 20, 2004. Current management was not aware of any facts that would
have precluded reliance on the exemption from registration promulgated under
Regulation E with respect to our offering commenced October 1, 2004.
Specifically, management of the Company was not aware of the injunction against
the Company dated September 19, 2001. Accordingly, the Company, in good faith,
relied upon such exemption. After being made aware of such facts that would
preclude the Company from reliance upon such exemption in the SEC letter dated
June 17, 2005, we immediately ceased the offering. The Company has offered a
right of rescission to all investors who purchased securities in the Regulation
E offering in consideration for, generally, their investment price plus
interest. As of March 31, 2006 three investors with a total of 550,058 shares of
common stock with a value of $82,512 have had their investment
returned.



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



None.












ITEM 9A. CONTROLS AND PROCEDURES




(a)
        Evaluation of disclosure controls and procedures.

Our Chief Executive Officer and Chief Financial Officer (collectively the Certifying Officers) maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management timely. Under the supervision and with the participation of management, the Certifying Officers evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)] under the Exchange Act) within 90 days prior to the filing date of this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures are effective in timely alerting them to material information relative to our company required to be disclosed in our periodic filings with the SEC.




(b)
        Changes in internal controls.

Our Certifying Officer has indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of his evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.





PART III



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



Our board of directors is responsible for managing our business and affairs and supervises the management of our company. The responsibilities of each director include, among other things, the oversight of the loan and investment approval process, the quarterly valuation of our assets, and oversight of our financing arrangements. Our portfolio is managed almost exclusively by Jeff Sternberg, our Chief Executive Officer. Because we are internally managed, we have not entered into any advisory agreement and pay no investment advisory fees to any outside investment adviser, but instead we pay the operating costs associated with employing investment management professionals. The Directors and Officers of the Company as of August 4, 2006 are set forth below.



Structure of Board of Directors

Our bylaws provide that the number of members of our board of directors shall be no more than ten nor less than one and any vacancy may be filled by the board of directors. There are no family relationships between any of our directors or officers.

Certain of our directors who are also officers may serve as directors of, or on the board of managers of, certain of our portfolio companies. The business address of each director is the same as the Company, 2999 N.E. 191st Street, PH2, Aventura, FL 33180.



Directors

Our directors have been divided into two groups  interested directors and independent directors. Interested directors are interested persons as defined in the Investment Company Act of 1940.








Name
        Age
        PositionIndependent DirectorsAlex Roytman
        44
        DirectorJami Agans
        46
        DirectorInterested DirectorsJeffrey I. Sternberg
        60
        President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors

Executive Officers

Each executive officer has the same business address as the Company.


Jeffrey I. Sternberg
        60
        President, Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors

The following is a brief description of the background of our directors and executive officers.

Background Information

Jeffrey I. Sternberg.Mr. Sternberg was appointed as our Executive Vice President and as a member of our Board of Directors in March 2004 and was appointed as our President, Chief Executive Officer, Chief Financial Officer and as a the Chairman of our Board of Directors on July 16, 2004. Since June 2002, Mr. Sternberg has been the managing member of Phoenix Capital Partners, LLC a financial investment company located in Hollywood, Florida. Prior to his acquiring Phoenix Capital Partners, LLC, between August 2002 and November 2002, he worked for Atico International based in South Florida. Atico is a specialty importer of goods. Immediately prior to that time, Mr. Sternberg had worked for seven years as a Senior Vice President at Herbko International, a worldwide manufacturer of general merchandise.
Mr. Sternberg spent over two decades working with mass merchandisers, drug chains and specialty stores and consulting with regional and national buyers to distribute goods throughout the United States and Asia. Additionally, Mr. Sternberg served these and other customers by managing their imports and exports of products and arranging for the financing and the manufacturing of a wide variety of retail merchandise.

Alex Roytman.Mr. Roytman was appointed to our Board of Directors on September 6, 2005. Alex Roytman is a real estate professional with 16 years experience in all facets of the industry including facilities management and commercial and residential sales. He currently serves as the principal of Premiere Estates Realty, Inc. which is a real estate firm based in Pembroke Pines, Florida. Premiere specializes in high-end, residential sales in the Western Broward County region including Weston, Pembroke Pines, Davie, Grand Palms, etc. Prior to establishing his own firm, Mr. Roytman was the sales director and managing broker for Grand Palms Realty, Inc., an upscale community in Western Broward County where he was responsible during his tenure for overseeing sales in excess of $20 million. He honed his commercial real estate
skills at Transworld Realty where he initially served as a consultant and eventually became president. He began his career at Brickell Investment Realty where he specialized in facilities management. Mr. Roytman earned a Bachelor of Arts degree from Florida International University where he also attended the graduate honors program and is a graduate of the Hebrew Academy, Miami Beach. He is a member of the South Broward Board of Realtors as well as a member of the National Association of Realtors (NAR).








Jami Agins.Ms. Agins was appointed to our Board of Directors on September 6, 2005. She is a Massachusetts native, earned a BS degree in marketing and political science from Boston College. She relocated to South Florida in 1979 and is currently the managing broker and a franchisee of an international real estate company. Ms. Agains has an extensive background in finance as well as structured finance as it relates to commercial and residential real estate. She has been involved in tens of millions of dollars of transactions and consistently ranks in the top 5 percent nationwide in completed transactions versus her peers. Jamie is a member of several professional organizations including the National Association of Realtors



ITEM 11. EXECUTIVE COMPENSATION



The following table sets forth the annual and long-term compensation for services in all capacities for the fiscal years ended March 31, 2006, 2005 and 2004, paid to our most highly compensated executive officers.




Summary Compensation TableAnnual Compensation
        Long Term CompensationAwardsName and Principal Position
        Year
Ending
March 31,
        Salary
        Bonus
        RestrictedStockAward(s)
        SecuritiesUnderlyingOptions
        All OtherCompensationJeffrey I. Sternberg (1)
        2006
        $116,257
        --
        -
        --
        --President, CEO, CFO
        2005
        $43,750
        --
        175,000 shares
        --
        --and Chairman of the Board of Directors
        2004
        $0
        --
        --
        --
        --Brian Dvorak (2)
        2005
        $0
        --
        --
        --
        --Former Executive Officer and Director
        2004
        $0
        --
        --
        --
        --2003
        $0
        --
        300,000
        --
        --

_________________________




(1)
        Mr. Sternberg was appointed as an Executive Vice President and Director in March 2004. Subsequently, in August 2004, Mr. Sternberg
was appointed as President, Chief Executive Officer, and Chief Financial Officer. He received $116,257 as a cash salary in the fiscal
year ending March 31, 2006, and $43,750 as a cash salary in the fiscal year ending March 31, 2005, as well as 1,750,000 shares of our
common stock for services rendered as our officer and director. Such shares were subsequently subject to the 10-1 reverse split
undertaken by the Company. Additionally, Phoenix Capital Partners, LLC received 75,000 shares of our common stock for consulting
services rendered in the fiscal year ending March 31, 2004. Mr. Sternberg is the controlling member of Phoenix Capital Partners, LLC.(2)
        Mr. Dvorak resigned from the positions of President, Chief Executive Officer, Chief Financial Officer and his position on the Board of Directors in July 2004. Mr. Dvoraks received 300,000 shares of Common Stock valued at $210,000 in lieu of salary in the fiscal year ending March 31, 2003.

Stock Award Plan



On November 29, 2002, the company established a Stock Award Plan to promote the interests of the Company and its Subsidiaries and shareholders by using investment interests in the Company to attract, retain and motivate its key officers, employees, directors, advisors and consultants to encourage and reward their contributions to the long range performance goals of the Company and to link their compensation interests with the long term interests of the




Company and its shareholders. The Company had issued 3,900,000 shares of its common stock under the plan as at March 31, 2004. No additional shares were recorded in 2004, 2005 or 2006.












Employment Agreements

Mr. Jeffrey Sternberg joined us in March 2004 as Executive Vice President and a member of our Board of Directors. Mr. Sternberg was subsequently appointed the Chief Executive Officer, Chief Financial Officer and the Chairman of our Board of Directors on July 16, 2004. On October 1, 2004, Mr. Sternberg was also appointed as our President. Mr. Sternberg is paid a base salary of $75,000 per year until October 1, 2005 at which time his salary will be increased to $100,000 per year and to $110,000 per year effective October 1, 2006. Mr. Sternberg is also eligible for a cash bonus and a private equity bonus. Mr. Sternbergs cash bonus is based in part on the Companys annual net after-tax profit as reported on this Annual Report on Form 10-K. Payment of Mr. Sternbergs cash bonus is at the discretion of the board of directors.
Mr. Sternberg is also entitled to receive 5% of any equity received by the Company resulting from a Company financed investment in a private company. If Mr. Sternberg is terminated for any reason other than for Cause (as defined in his Employment Agreement) on or after April 1, 2004, Mr. Sternberg is entitled to continue receiving his base salary for a period of three months following the date he receives a notice of termination.

Employee Benefit Plan



None.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



BENEFICIAL STOCK OWNERSHIP



The following table sets forth, as of August 8, 2006, Common Stock ownership of (1) the directors of the Company, (2) the only persons known to management to be the beneficial owners of more than five percent of the Common Stock of the Company, and (3) the Companys directors and officers as a group:






SharesBeneficially
        PercentName and Address
        Title of Class
        Owned (1)
        of Class(1)Jeffrey I. Sternberg (2)
3450 Park Central Blvd.
N. Pompano Beach, FL 33064
        Common
        250,000
        1.26%Craig Press
3450 Park Central Blvd.
N. Pompano Beach, FL 33064
        Common
        165,951
        0.83%David Goldberg
3450 Park Central Blvd.
N. Pompano Beach, FL 33064
        Common
        165,951
        0.83%Brian Dvorak (3)
        Common
        562,286
        2.83%Officers and Directors as a Group
(3 Persons)
        Common
        581,902
        2.92%

_______________________












(1)
        Applicable percentage of ownership is based on 19,900,090 shares of common stock outstanding as of August 4, 2006, together with applicable options for each shareholder. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options that are currently exercisable or exercisable within sixty days of August 4, 2006 are deemed to be beneficially owned by the person holding such options for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.(2)
        Mr. Sternberg received 1,750,000 shares of our common stock for services rendered as our officer and director. Such shares were subsequently subject to the 10-1 reverse split undertaken by the Company in September 2004. Additionally, Phoenix Capital Partners, LLC received 75,000 shares of our common stock for consulting services rendered in the fiscal year ending March 31, 2004. Mr. Sternberg is the controlling member of Phoenix Capital Partners, LLC.(3)
        In July 2004, Mr. Dvorak entered into a resignation agreement and release agreement with the Company pursuant to which he has resigned as President, CEO, CFO, Secretary and Board of Directors of the Company. In addition, pursuant to such agreement, Mr. Dvorak agreed to return 2,475,000 shares of the 7,475,000 shares that he held in the Company. To date the agreement has been entered into but the shares have not been cancelled of record. The total shares outstanding for the Company reflects the cancellation of the 2,475,000 shares (pre 10-1 forward split undertaken in September 2004) although these shares have not been cancelled of record.(4)
        On October 5, 2004, the Company entered a stock purchase agreement with Alpha Capital Aktiengesellschaft to issue a total of 4,000,000 shares of common to be held in escrow as part of a purchase option agreement. Any shares still held in escrow on September 21, 2005 will be returned to the Company. In December 2004, Alpha Capital Aktiengesellschaft purchased 669,950 shares of common stock pursuant to this agreement. The balance of the 3,330,050 shares held in escrow are not included in our total shares outstanding.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



On January 16, 2003, the Company issued 300,000 shares of its common stock to its then president, Mr. Brian Dvorak for executive compensation amounting to $210,000.



On June 17, 2003, the Company issued 15,000 shares of its common stock to its then president, Mr. Brian Dvorak for executive compensation amounting to $10,500.



On September 28, 2003, the Company entered into an Engagement Agreement with Knightsbridge Holdings, LLC pursuant to which Knightsbridge would provide certain services to the Company. The Engagement Agreement was amended on September 27, 2004. As consideration for the services rendered by Knightsbridge, the Company is required to pay Knightsbridge a retainer of $7,500 per month, which Knightsbridge may take in the form of registered shares of the Companys common stock. Additionally, the Company agreed to pay Knightsbridge, or its assignees, common stock of the Company, upon the closing of a financing transaction, equal to 10.00% of the equity received by the Company in connection with the financing transactions. The shares issuable pursuant to the agreement carry full ratchet anti-dilution protection for Knightsbridge.



In July 2004 the Company reached a settlement with its former director and several consultants for the return of common stock and settlement of amounts owed. The Company received and subsequently cancelled a total of 670,000 shares of common stock from those individuals and recorded a gain of $159,512 of amounts owed to them and a contribution of capital of $595,516.



On August 20, 2004 the Company issued 331,900 shares of common stock to
Knightsbridge Holdings, LLC for services rendered pursuant to the terms of an
Engagement Agreement between the Company and Knightsbridge Holdings, LLC.
Knightsbridge Holdings, LLC subsequently transferred 165,950 shares of common
stock to Craig Press and 165,950 shares of common stock to David Goldberg.













We believe that each of the above referenced transactions was made on terms no less favorable to us than could have been obtained from an unaffiliated third party. Furthermore, any future transactions or loans between us and our officers, directors, principal stockholders or affiliates, and any forgiveness of such loans, will be on terms no less favorable to us than could be obtained from an unaffiliated third party, and will be approved by a majority of our directors.

ITEM 14. PRINCIPAL ACCOUNTANTING FEES AND SERVICES



Audit Fees



For the Companys fiscal year ended March 31, 2006 and March 31, 2005, we were billed approximately $20,000 and $4,500.00 for professional services rendered for the audit of our financial statements. We also were billed approximately $8,597 and $3,000.00 for the review of financial statements included in our periodic and other reports filed with the Securities and Exchange Commission for our year ended March 31, 2006 and March 31, 2005, respectively.



Tax Fees



For the Companys fiscal year ended March 31, 2006 and March 31, 2005, we were billed $-0- for professional services rendered for tax compliance, tax advice, and tax planning.



All Other Fees



The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal year ended March 31, 2006 and March 31, 2005.



ITEM 15. EXHIBITS AND REPORTS ON FORM 8K




(a) Exhibits:


None


(b) Reports of Form 8-K filed in the fourth quarter of the fiscal year:

On March 6, 2006, the Company filed an 8K based upon the issuance of a press release regarding a special distribution of its Global It Holdings, Inc. shares.



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



ADVANTAGE CAPITAL DEVELOPMENT CORP.






By:
        /s/ Jeffrey Sternberg
        Dated: August 8, 2006Jeffrey Sternberg,Chief Executive Officer