UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the Fiscal Year ended December 31, 2006

                          Commission File No. 814-00716

                              INTERIM CAPITAL CORP.
             (Exact name of registrant as specified in its charter)

             Nevada                                               02-0638350
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

         3960 Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89109
                    (Address of principal executive offices)

                                 (972) 745-3020
              (Registrant's telephone number, including area code)

Securities registered under Section 12(b) of the Act: None

Securities registered under Section 12 (g) of the Act: COMMON, par value $.001

Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for such shorter  period that the Company was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-B is not contained in this form,  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. Yes [ ] No [X]

<PAGE>

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one):

   Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The aggregate  market value of the voting  common equity held by  non-affiliates
computed by reference to the price at which the common  equity was last sold, as
of December 31, 2006, was approximately $56,000.

The number of shares  outstanding of the issuer's Common Stock, $.001 par value,
as of December 31, 2006 was 10,505,000 shares.




















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<PAGE>

                              INTERIM CAPITAL CORP.
                                      INDEX

                                                                            Page

                                     PART I

ITEM 1:   BUSINESS                                                             4
ITEM 1A:  RISK FACTORS                                                        14
ITEM 2:   PROPERTIES                                                          34
ITEM 3:   LEGAL PROCEEDINGS                                                   34
ITEM 4:   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 35

                                     PART II

ITEM 5:   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
          MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES                   35
ITEM 6:   SELECTED FINANCIAL DATA                                             36
ITEM 7:   MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS                                           37
ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          46
ITEM 8:   FINANCIAL STATEMENTS                                                47
          SCHEDULE OF FINANCIAL RATIOS                                        62
ITEM 9:   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
          AND FINANCIAL DISCLOSURE                                            63
ITEM 9A:  CONTROLS AND PROCEDURES                                             63
ITEM 9B:  OTHER INFORMATION                                                   63

                                    PART III

ITEM 10:  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE              64
ITEM 11:  EXECUTIVE COMPENSATION                                              65
ITEM 12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS                                     67
ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
          INDEPENDENCE                                                        68
ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES                              68

                                     PART IV

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                          69





                                       3
<PAGE>

                                  INTRODUCTION

This report contains forward-looking statements and the Company's actual results
could  differ  materially  from  those  anticipated  in  these  forward  looking
statements as a result of numerous factors,  including those set forth below and
elsewhere in this report.


                                     PART I

ITEM 1:   DESCRIPTION OF BUSINESS

Business History

Interim Capital Corp. (the "Company,"  "we," "us" or "ICC") has its headquarters
in Las Vegas, Nevada, with an office in Dallas,  Texas, and was organized by the
filing of articles of incorporation  with the Secretary of State of the State of
Nevada on August 21, 2002. We were formed with the express  purpose of assisting
private  companies  through  the  preparation  and  filing  of all the  required
documents  with  regards  to the  listing  of the  client  company on the public
markets.

Our objectives were to:

o    Assist our client  companies  in  achieving  their fair  market  value both
     internally and externally;

o    Become the intermediary to facilitate the steps involved, from inception to
     completion, with small public offerings;

o    Orchestrate the client's conversion from private to public; and

o    Utilize a thorough  network of contacts to manage small public offerings in
     a timely and profitable manner.

We intended to create  these  opportunities  through the close  relationship  we
intended  to  develop  with  prospective  client  companies  by  providing  them
cost-saving  personal services.  As an extension of this service, we intended to
then be able to offer the prospective  client company  opportunities to not only
save money but actually increase their time value by allowing the client company
to maintain a strict focus on its day to day operations.

Our  business  was to  consult  with and help to develop  established  companies
seeking to become  publicly  traded by providing or arranging  for the necessary
financing,  management,  legal,  accounting  and related  services  and a public
vehicle. We expected to generate revenue by providing our consulting services to
our portfolio  companies.  After a client company becomes  publicly  traded,  we
planned to continue to provide strategic, managerial and operational support and
we also  might  have  sought  representation  on the board of  directors  of the


                                       4
<PAGE>

company.  We  intended  to  provide  or  arrange  for our  portfolio  companies'
financial,  operations and management  needs to facilitate their shares becoming
publicly  traded.  We might  have also  engaged  investment  banks and others to
provide  alternate  methods of financing  for the ongoing  operations  of or, if
desired,  exit  strategies for our portfolio  companies  through  initial public
offerings or finding suitable acquiring  companies.  Typical  transaction values
were  expected  to range from  approximately  $50,000 to $300,000 in addition to
receiving a percentage of the company's stock.

On  February  14,  2006,  we filed a  notification  on Form  N54a  with the U.S.
Securities  and  Exchange  Commission  ("SEC"),  indicating  our  election to be
regulated as a Business Development Company ("BDC") under the Investment Company
Act of 1940, as amended.  Under this election, we have been organized to provide
investors with the opportunity to  participate,  with a modest amount in venture
capital,  in investments that are generally not available to the public and that
typically require  substantially larger financial  commitments.  In addition, we
will provide professional  management and administration that might otherwise be
unavailable  to  investors  if they were to engage  directly in venture  capital
investing.

We are currently seeking to identify  portfolio or client companies whose shares
are capable of being publicly  traded which are at a stage of  development  that
would benefit from our business  development,  management support, our financing
services, and market knowledge.  We will generally invest in client companies in
which we can  purchase  a large  enough  stake to enable us to have  significant
influence over the management and policies of such client companies,  to realize
a large enough return to compensate us for our investment of management services
provided to it and facilitating the provision of capital.

We hope to realize  value for our  investors  through  the  appreciation  of the
equity  positions,  which we will  take in client  companies,  and  through  our
consulting income. We anticipate that the average target length of our ownership
in the equity of a particular  investment will be  approximately 3 to 24 months,
although actual ownership periods may vary.

Business Summary

Under the recent election to be governed as a business development company under
the 1940 Act, we have been organized to provide  investors with the  opportunity
to participate, with a modest amount in venture capital, in investments that are
generally not available to the public and that typically  require  substantially
larger  financial  commitments.   In  addition,  we  will  provide  professional
management and  administration  that might otherwise be unavailable to investors
if they were to engage directly in venture capital investing. We have decided to
be  regulated  as a business  development  company  under the 1940 Act, and will
operate as a non-diversified  company as that term is defined in Section 5(b)(2)
of the 1940 Act. We will, at all times, conduct our business so as to retain our
status as a BDC. We may not change the nature of our  business so as to cease to
be, or withdraw  our election as, a BDC without the approval of the holders of a
majority of our outstanding voting stock as defined under the 1940 Act.

As a business development company, we are required to invest at least 70% of our
total assets in qualifying assets, which,  generally,  are securities of private
companies or securities of public  companies  whose  securities are not eligible
for  purchase on margin  (which  includes  many  companies  with  thinly  traded
securities that are quoted in the pink sheets or the NASD  Electronic  Quotation


                                       5
<PAGE>

Service.) We must also offer to provide  significant  managerial  assistance  to
these portfolio companies. Qualifying assets may also include:

o    cash,
o    cash equivalents,
o    U.S. Government securities, or
o    high-quality debt investments maturing in one year or less from the date of
     investment.

We may invest a portion of the  remaining 30% of our total assets in debt and/or
equity securities of companies that may be larger or more stabilized than target
portfolio companies.

Nature of a BDC

The 1940 Act defines a BDC as a closed-end  management  investment  company that
provides small  businesses  that qualify as an eligible  portfolio  company with
investment capital and also significant managerial assistance. A BDC is required
under the 1940 Act to invest  at least  70% of its  total  assets in  qualifying
assets consisting of eligible portfolio companies as defined in the 1940 Act and
certain other assets including cash and cash equivalents.

An eligible  portfolio  company generally is a United States company that is not
an investment company and that:

o    does not have a class of  securities  registered on an exchange or included
     in the Federal Reserve Board's over-the-counter margin list;
o    is actively  controlled by a BDC and has an affiliate of a BDC on its board
     of directors; or
o    meets such other criteria as may be established by the SEC.

Control  under the 1940 Act is  presumed to exist where a BDC owns more than 25%
of the outstanding voting securities of the eligible  portfolio company.  We may
or may not control our portfolio companies.

An  example  of an  eligible  portfolio  company  is a new start up company or a
privately  owned  company  that has not yet gone public by selling its shares in
the open market and has not applied for having its shares listed on a nationally
recognized  exchange  such as the NYSE the  American  Stock  Exchange,  National
Association of Securities  Dealers' Automated  Quotation System, or the National
Market System. An eligible portfolio company can also be one which is subject to
filing, has filed, or has recently emerged from reorganization  protection under
Chapter 11 of the Bankruptcy Act.

A BDC may invest the remaining 30% of its total assets in non-qualifying assets,
including  companies that are not eligible  portfolio  companies.  The foregoing
percentages will be determined, in the case of financings in which a BDC commits
to provide financing prior to funding the commitment, by the amount of the BDC's
total assets  represented by the value of the maximum amount of securities to be
issued by the  borrower or lessee to the BDC pursuant to such  commitment.  As a
BDC, we must invest at least 70% of our total  assets in  qualifying  assets but
may invest more in such qualifying assets.


                                       6
<PAGE>

Primary Strategy

We will have significant  relative  flexibility in selecting and structuring our
investments.  We will not be subject to many of the regulatory  limitations that
govern traditional lending institutions such as banks. We will seek to structure
our  investments  so as to take  into  account  the  uncertain  and  potentially
variable financial  performance of our portfolio  companies.  This should enable
our  portfolio  companies  to retain  access to  committed  capital at different
stages in their  development and eliminate some of the  uncertainty  surrounding
their  capital  allocation  decisions.  We will  calculate  rates of  return  on
invested capital based on a combination of up-front commitment fees, current and
deferred  interest rates and residual values,  which may take the form of common
stock,  warrants,  equity  appreciation  rights or future contract payments.  We
believe that this flexible  approach to structuring  investments will facilitate
positive,  long-term relationships with our portfolio companies and enable us to
become a  preferred  source of capital to them.  We also  believe  our  approach
should enable debt financing to develop into a viable alternative capital source
for  funding  the  growth of target  companies  that wish to avoid the  dilutive
effects of equity financings for existing equity holders.

Longer  Investment  Horizon - We will not be subject to periodic  capital return
requirements. These requirements, which are standard for most private equity and
venture  capital funds,  typically  require that these funds return to investors
the initial  capital  investment  after a  pre-agreed  time,  together  with any
capital  gains on such capital  investment.  These  provisions  often force such
funds to seek the return of their  investments  in portfolio  companies  through
mergers,  public equity  offerings or other  liquidity  events more quickly than
they  otherwise  might,  which can result in a lower overall return to investors
and adversely affect the ultimate viability of the affected portfolio companies.
Because we may invest in the same  portfolio  companies as these  funds,  we are
subject to these risks if these funds  demand a return on their  investments  in
the portfolio  companies.  We believe that our flexibility to take a longer-term
view should  help us to maximize  returns on our  invested  capital  while still
meeting the needs of our portfolio companies.

Established Deal Sourcing Network - We believe that,  through our management and
directors,  we have solid contacts and sources from which to generate investment
opportunities. These contacts and sources include:

o    public and private companies,
o    investment bankers,
o    attorneys,
o    accountants,
o    consultants, and
o    commercial bankers.

However,  we  cannot  assure  you  that  such  relationships  will  lead  to the
origination of debt or other investments.


                                       7
<PAGE>

Investment Criteria

As a matter of policy,  we will not purchase or sell real estate or interests in
real estate or real estate investment trusts except that we may:

o    purchase  and sell real estate or  interests  in real estate in  connection
     with  the  orderly  liquidation  of  investments,  or  in  connection  with
     foreclosure on collateral;
o    own the securities of companies that are in the business of buying, selling
     or developing real estate; or
o    finance the purchase of real estate by our portfolio companies.

We will limit our  investments in more  traditional  securities  (stock and debt
instruments) and will not, as a matter of policy:

o    sell securities  short except with regard to managing the risks  associated
     with publicly-traded securities issued by our portfolio companies;
o    Purchase  securities  on margin  (except to the extent that we may purchase
     securities with borrowed money); or
o    engage in the  purchase  or sale of  commodities  or  commodity  contracts,
     including   futures   contracts  except  where  necessary  in  working  out
     distressed loan; or
o    investment situations or in hedging the risks associated with interest rate
     fluctuations, and, in such cases, only after all necessary registrations or
     exemptions from registration with the Commodity Futures Trading  Commission
     have been obtained.

Prospective  Portfolio  Company  Characteristics  - We have  identified  several
criteria  that we  believe  will  prove  important  in  seeking  our  investment
objective with respect to target companies.  These criteria will provide general
guidelines for our investment  decisions;  however,  we caution readers that not
all of these criteria will be met by each prospective portfolio company in which
we choose to invest.

Experienced  Management - We will generally require that our portfolio companies
have an  experienced  president  or  management  team.  We will also require the
portfolio  companies to have in place proper  incentives to induce management to
succeed and to act in concert with our interests as investors,  including having
significant  equity  interests.  We intend to  provide  assistance  in this area
either  supervising   management  or  providing  management  for  our  portfolio
companies.

Products or Services - We will seek  companies  that are involved in products or
services  that  do  not  require  significant  additional  capital  or  research
expenditures. In general, we will seek target companies that make innovative use
of proven technologies or methods.

Proprietary  Advantage - We expect to favor companies that can demonstrate  some
kind of proprietary  sustainable  advantage  with respect to their  competition.
Proprietary advantages include, but are not limited to:

o    patents  or trade  secrets  with  respect  to owning or  manufacturing  its
     products, and
o    a demonstrable and sustainable marketing advantage over its competition


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<PAGE>

Marketing  strategies  impose unusual  burdens on management to be  continuously
ahead of its competition, either through some kind of technological advantage or
by being continuously more creative than its competition.

Profitable or Nearly Profitable  Operations Based on Cash Flow from Operations -
We will focus on target companies that are profitable or nearly profitable on an
operating cash flow basis.  Typically, we would not expect to invest in start-up
companies unless there is a clear exit strategy in place.

Potential  for Future  Growth - We will  generally  require  that a  prospective
target  company,  in addition to  generating  sufficient  cash flow to cover its
operating  costs and service its debt,  demonstrate  an ability to increase  its
revenues and operating  cash flow over time.  The  anticipated  growth rate of a
prospective target company will be a key factor in determining the value that we
ascribe  to any  warrants  or other  equity  securities  that we may  acquire in
connection with an investment in debt securities.

Exit Strategy - Prior to making an investment  in a portfolio  company,  we will
analyze the  potential  for that company to increase the liquidity of its common
equity through a future event that would enable us to realize  appreciation,  if
any, in the value of our equity interest. Liquidity events may include:

o    an initial public offering,
o    a private sale of our equity interest to a third party,
o    a merger or an acquisition of the portfolio company, or
o    a purchase of our equity  position by the  portfolio  company or one of its
     stockholders.

We may  acquire  warrants  to  purchase  equity  securities  and/or  convertible
preferred stock of the eligible portfolio companies in connection with providing
financing.  The terms of the warrants,  including the expiration date,  exercise
price and terms of the equity  security for which the warrant may be  exercised,
will be negotiated  individually with each eligible portfolio company,  and will
likely be affected by the price and terms of  securities  issued by the eligible
portfolio company to other venture  capitalists and other holders. We anticipate
that most  warrants  will be for a term of five to ten  years,  and will have an
exercise price based upon the price at which the eligible portfolio company most
recently  issued  equity  securities  or, if a new equity  offering is imminent,
equity securities. The equity securities for which the warrant will be exercised
generally  will be common  stock of which  there may be one or more  classes  or
convertible  preferred  stock.  Substantially  all the warrants  and  underlying
equity  securities will be restricted  securities under the 1933 Act at the time
of the issuance.  We will generally  negotiate for registration  rights with the
issuer that may provide:

o    "piggyback"  registration  rights,  which  will  permit  us  under  certain
     circumstances,  to include some or all of the  securities  owned by us in a
     registration statement filed by the eligible portfolio company, or
o    in circumstances,  "demand" registration rights permitting us under certain
     circumstances,  to require the eligible  portfolio  company to register the
     securities  under  the 1933  Act,  in some  cases at our  expense.  We will
     generally  negotiate net issuance  provisions  in the warrants,  which will
     allow us to receive  upon  exercise of the warrant  without  payment of any


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<PAGE>

     cash a net amount of shares  determined by the increase in the value of the
     issuer's stock above the exercise price stated in the warrant.

Liquidation  Value of  Assets -  Although  we do not  intend  to  operate  as an
asset-based  lender,  the prospective  liquidation  value of the assets, if any,
collateralizing  any debt securities that we hold will be an important factor in
our credit analysis. We will emphasize both tangible assets, such as:

o    accounts receivable,
o    inventory, and
o    equipment,

and intangible assets, such as:

o    intellectual property,
o    customer lists,
o    networks, and
o    databases.

Investment Process

Due  Diligence  -  If a  target  company  generally  meets  the  characteristics
described above, we will perform initial due diligence, including:

o    company and technology assessments,
o    existing management team,
o    market analysis,
o    competitive analysis,
o    evaluation of management, risk analysis and transaction size,
o    pricing, and
o    structure analysis.

Much of this  work will be done by  management  and  professionals  who are well
known by management.  The criteria  delineated above provide general  parameters
for our  investment  decisions.  We intend to pursue an  investment  strategy by
further  imposing  such  criteria and reviews that best insures the value of our
investments.  As unique circumstances may arise or be uncovered, not all of such
criteria will be followed in each instance but the process  provides a guideline
by  which  investments  can be  prudently  made  and  managed.  Upon  successful
completion of the  preliminary  evaluation,  we will decide whether to deliver a
non-binding  letter of intent  and move  forward  towards  the  completion  of a
transaction.

In our review of the management team, we look at the following:

o    Interviews  with  management and  significant  shareholders,  including any
     financial or strategic sponsor;
o    Review of financing history;
o    Review of management's track record with respect to:
          o    product development and marketing,


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<PAGE>

          o    mergers and acquisitions,
          o    alliances,
          o    collaborations,
          o    research  and   development   outsourcing   and  other  strategic
               activities;
o    Assessment of competition; and
o    Review of exit strategies.

In our review of the financial conditions, we look at the following:

o    Evaluation of future financing needs and plans;
o    Detailed analysis of financial performance;
o    Development of pro forma financial projections; and
o    Review of assets and liabilities, including contingent liabilities, if any,
     and legal and regulatory risks.

In our review of the products and services of the portfolio company,  we look at
the following:

o    Evaluation of intellectual property position;
o    Review of existing customer or similar agreements and arrangements;
o    Analysis of core technology;
o    Assessment of collaborations;
o    Review of sales and marketing procedures; and
o    Assessment of market and growth potential.

Upon  completion  of these  analyses,  we will conduct  on-site  visits with the
target company's management team. Also, in cases in which a target company is at
a mature  stage  of  development  and if  other  matters  that  warrant  such an
evaluation, we will obtain an independent appraisal of the target company.

Ongoing Relationships with Portfolio Companies

Monitoring - We will  continuously  monitor our portfolio  companies in order to
determine  whether they are meeting our financing  criteria and their respective
business  plans.  We may decline to make  additional  investments  in  portfolio
companies that do not continue to meet our financing  criteria.  However, we may
choose to make additional  investments in portfolio companies that do not do so,
but we believe that we will nevertheless perform well in the future.

We will monitor the  financial  trends of each  portfolio  company to assess the
appropriate  course of action for each company and to evaluate overall portfolio
quality. Our management team and consulting professionals, who are well known by
our management  team,  will closely  monitor the status and  performance of each
individual company on at least a quarterly and, in some cases, a monthly basis.

We will use several  methods of evaluating and monitoring  the  performance  and
fair value of our debt and equity  positions,  including  but not limited to the
following:


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<PAGE>

o    Assessment of business development success,  including product development,
     financings,  profitability and the portfolio company's overall adherence to
     its business plan;
o    Periodic and regular contact with portfolio  company  management to discuss
     financial position, requirements and accomplishments;
o    Periodic  and regular  formal  update  interviews  with  portfolio  company
     management and, if appropriate, the financial or strategic sponsor;
o    Attendance at and participation in board meetings;
o    Review  of  monthly  and  quarterly  financial   statements  and  financial
     projections for portfolio companies.

Managerial Assistance - As a business development company, we will offer, and in
many cases may  provide,  significant  managerial  assistance  to our  portfolio
companies. This assistance will typically involve:

o    monitoring the operations of our portfolio companies,
o    participating in their board and management meetings,
o    consulting with and advising their officers, and
o    providing other organizational and financial guidance.


Diversification

As a BDC, we must invest at least 70% of our total assets in  qualifying  assets
consisting  of  investments  in eligible  portfolio  companies and certain other
assets  including  cash and cash  equivalents.  In  order to  receive  favorable
pass-through tax treatment on its distributions to our  shareholders,  we intend
to  diversify  our pool of  investments  in such a manner so as to  qualify as a
diversified closed end management  investment company.  However,  because of the
limited  size of the  funding  which is  likely to be  available  to us, we will
likely be classified as a  non-diversified  closed end investment  company under
the 1940 Act. Until we qualify as a registered  investment  company, we will not
be  subject to the  diversification  requirements  applicable  to RICs under the
Internal Revenue Code. Therefore, we will not receive favorable pass through tax
treatment on distributions to our  shareholders.  In the future, we will seek to
increase the  diversification of our portfolio so as to make it possible to meet
the RIC diversification  requirements, as described below. We cannot assure you,
however, that we will ever be able to meet those requirements.

To qualify as a RIC, we must meet the issuer diversification standards under the
Internal  Revenue  Code that require  that,  at the close of each quarter of our
taxable year,

o    not more than 25% of the market  value of our total  assets is  invested in
     the securities of a single issuer, and
o    at least 50% of the  market  value of our total  assets is  represented  by
     cash,  cash items,  government  securities,  securities of other RICs,  and
     other securities.

Each investment in these other securities is limited so that not more than 5% of
the market value of our total assets is invested in the  securities  of a single
issuer and we do not own more than 10% of the outstanding voting securities of a


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<PAGE>

single  issuer.  For  purposes  of the  diversification  requirements  under the
Internal Revenue Code, the percentage of our total assets invested in securities
of a portfolio  company will be deemed to refer,  in the case of  financings  in
which we commit to provide  financing  prior to funding the  commitment,  to the
amount of our total assets  represented by the value of the securities issued by
the eligible  portfolio company to us at the time each portion of the commitment
is funded.

Investment Amounts

The  amount  of  funds  committed  to a  portfolio  company  and  the  ownership
percentage  received  will  vary  depending  on the  maturity  of the  portfolio
company,  the quality and  completeness  of the portfolio  company's  management
team,  the perceived  business  opportunity,  the capital  required  compared to
existing capital,  and the potential return.  Although  investment  amounts will
vary considerably,  we expect that the average  investment,  including follow-on
investments, will be between $25,000 and $1,000,000.

Competition

Our primary  competitors to provide  financing to target  companies will include
private  equity and venture  capital funds,  other equity and  non-equity  based
investment funds and investment banks and other sources of financing,  including
traditional  financial services companies such as commercial banks and specialty
finance companies.  Many of these entities have substantially  greater financial
and  managerial  resources  than we will have.  We believe that our  competitive
advantage  with  regard to quality  target  companies  relates to our ability to
negotiate  flexible  terms and to complete our review process on a timely basis.
We cannot assure you that we will be successful in implementing our strategies.

Current Portfolio Companies

As of December 31, 2006, we have three  investments  in  unaffiliated  companies
included in our  investment  portfolio.  Our valuation of these  investments  is
included in Item 7 and Item 8 herein.

Valuation Methodology

As an investment  company under the  Investment  Company Act of 1940, all of the
Company's  investments  must  be  carried  at  market  value  or fair  value  as
determined by Management for investments which do not have readily  determinable
market  values.  Prior to this  conversion,  only  marketable  debt  and  equity
securities  and certain  derivative  securities  were  required to be carried at
market value.

Beginning  February  15,  2006,  portfolio  assets for which  market  prices are
available  are  valued  at  those  prices.  Securities  that are  traded  in the
over-the-counter  market or on a stock exchange  generally will be valued at the
prevailing  bid price on the valuation  date.  However,  the  Company's  current
investments  were  acquired in  privately  negotiated  transactions  and have no
readily  determinable market values.  These securities are carried at fair value
as determined by Management  and outside  professionals  as necessary  under the
Company's  valuation  policy.  Currently,  the  valuation  policy  provides  for
Management's review of the management team, financial  conditions,  and products


                                       13
<PAGE>

and  services of the  portfolio  company.  In  situations  that  warrant such an
evaluation, an independent business valuation may be obtained.

Value,  as defined in Section  2(a)(41) of 1940 Act, is (i) the market price for
those securities for which a market quotation is readily  available and (ii) for
all other  securities  and assets,  fair value is as determined in good faith by
Management.  There is no single  standard  for  determining  fair  value in good
faith. As a result,  determining fair value requires that judgment be applied to
the specific facts and circumstances of each portfolio  investment.  The Company
must  determine  the fair value of each  individual  investment  on a  quarterly
basis.  The Company will record  unrealized  depreciation on investments when it
believes that an investment has become impaired,  including where realization of
an equity security is doubtful.  Conversely,  the Company will record unrealized
appreciation if the Company believes that the underlying  portfolio  company has
appreciated in value and,  therefore,  its  investment  has also  appreciated in
value, where appropriate.

As an investment  company,  the Company invests primarily in illiquid securities
including equity securities of private  companies.  The structure of each equity
security  is  specifically  negotiated  to enable the  Company  to  protect  its
investment and maximize its returns.  The Company generally  includes many terms
governing ownership parameters,  dilution parameters,  liquidation  preferences,
voting rights, and put or call rights.  The Company's  investments are generally
subject to some restrictions on resale and generally have no established trading
market. Because of the type of investments that the Company makes and the nature
of its business, the Company's valuation process requires an analysis of various
factors. The Company's fair value methodology includes the examination of, among
other things, the underlying  investment  performance,  financial  condition and
market changing events that impact valuation.


ITEM 1A:  RISK FACTORS

On  February  14,  2006,  we filed a  notification  on Form  N54a  with the U.S.
Securities  and  Exchange  Commission  ("SEC"),  indicating  our  election to be
regulated as a business  development company under the Investment Company Act of
1940,  as  amended.  Following  are the  risk  factors  associated  with our new
business.

In the normal course of business in an effort to keep our  shareholders  and the
public informed about our operations and portfolio of  investments,  we may from
time-to-time issue certain statements, either in writing or orally, that contain
or may contain forward-looking  information.  Generally, these statements relate
to our  business  plans or  strategies  or  portfolio  companies,  projected  or
anticipated  benefits or consequences of such plans or strategies,  projected or
anticipated  benefits of new or follow-on  investments  made by or to be made by
us, or  projections  involving  anticipated  purchases or sales of securities or
other  aspects of our  operating  results.  Forward-looking  statements  are not
guarantees of future performance and are subject to risks and uncertainties that
could cause  actual  results to differ  materially.  As noted  elsewhere in this
report,  our operations and portfolio of investments  are subject to a number of
uncertainties,  risks,  and  other  influences,  many of which are  outside  our
control,  and any one of which,  or a  combination  of which,  could  materially
affect the results of our operations, or our NAV, the market price of our common
stock, and whether any forward-looking statements made by us ultimately prove to
be accurate.


                                       14
<PAGE>

Investing in us involves a number of significant  risks relating to our business
and investment  objective.  As a result,  there can be no assurance that we will
achieve our investment  objective.  In addition,  the following risk factors are
applicable to an investment in our common stock.

GENERAL RISK FACTORS

Investments in the Company by new shareholders will be diluted immediately.

Some of our present  shareholders  have acquired an interest in our common stock
at a total cost substantially less than the total cost that newer investors will
likely pay for their shares.  Therefore, the newer investors will bear a greater
proportion of the risk of loss (measured by the cost of shares).  As of December
31,  2006,  there  were  225,000,000  shares  of  common  stock  authorized  and
10,505,000 common shares outstanding.

We may sell additional equity in the future that may further dilute the value of
your investment.

Reductions  in the  price of our stock  resulting  from the  performance  of our
portfolio  or other  market  conditions  might result in stock being sold to new
investors,  including management,  at prices below the price paid by you. Senior
management  may be  granted  the right,  and  others  may have the right,  under
certain  circumstances,  to acquire  additional  shares of our common stock at a
price equal to the market price as it exists at a point in the future. If such a
grant of a right  occurred  at a time when the  price of the  stock  has  fallen
relative  to the  current  market  value and falls  below the price paid by you,
management  might be given the right to  purchase  stock at a price  below  your
cost. In either of these cases,  the value of your  investment  would be further
diluted.

Limitation of liability and indemnification of management.

While limitations of liability and  indemnification  are themselves  limited, we
have instituted provisions in our bylaws indemnifying,  to the extent permitted,
against and not making management liable for, any loss or liability  incurred in
connection  with our affairs,  so long as such loss or liability arose from acts
performed in good faith and not involving any fraud, gross negligence or willful
misconduct.   Therefore,  to  the  extent  that  these  provisions  provide  any
protection to management,  that  protection may limit the right of a shareholder
to collect damages from members of management.  Management is accountable to the
shareholder as a fiduciary and, consequently, members of management are required
to exercise good faith and integrity in handling our affairs.

Our business may become subject to extensive regulation at the federal and state
levels.  The value of securities we own may be adversely  impacted by subsequent
regulatory changes.

Our operations are and will be affected by current and future legislation and by
the  policies  established  from  time to  time by  various  federal  and  state
regulatory authorities. It is not possible to predict what changes, if any, will
be made to existing federal and state  legislation and regulations or the effect
that such changes may have on our future  business and earnings  prospects.  Our


                                       15
<PAGE>

current investment strategy includes purchase of unregistered securities in both
private companies as well as private placements offered by public companies.  We
are able to purchase  securities  pursuant  to  exemptions  to the  registration
requirements of United States Federal  securities laws.  Changes in such laws or
their   interpretation  could  adversely  impact  our  ability  to  resell  such
securities which would have a negative effect on the value of such securities as
well  as  impact  our  overall  investment  strategy  and the  liquidity  of our
investments.  In such  an  event,  we may  need to  reformulate  our  investment
strategy or we may choose to liquidate.

We cannot guarantee paying dividends to our stockholders.

We are allowed by our articles of incorporation  and/or by-laws to pay dividends
to our stockholders.  However, there can be no guarantee we will have sufficient
revenues to pay dividends  during any period.  We currently intend to retain our
capital for use in growing our business and not make dividend distributions.  We
cannot  assure you that we will  achieve  investment  results or  maintain a tax
status that will allow or require any specified level of cash distributions.  In
addition,  due  to  the  asset  coverage  test  applicable  to us as a  business
development  company,  we may be limited in our  ability to make  distributions.
Investors in need of liquidity  through the payment of dividends  should refrain
from common stock which does not have a dividend requirement.

Investing in our shares may involve a high degree of risk.

The investments we make in accordance  with our investment  objective may result
in a higher amount of risk than alternative investment options and volatility or
loss of principal. Our investments in portfolio companies may be speculative and
aggressive,  and therefore,  an investment in our shares may not be suitable for
someone with low risk tolerance.

There is no current public market for our common stock,  if and/or when a public
market  were to develop,  the market  price for our common  stock may  fluctuate
significantly.

The market price and  liquidity of the market for shares of our common stock may
be  significantly  affected  by numerous  factors,  some of which are beyond our
control  and may not be directly  related to our  operating  performance.  These
factors, may adversely affect our ability to raise capital through future equity
financings. These factors include:

o    significant volatility in the market price and trading volume of securities
     of business  development  companies or other  companies  in the  investment
     industry, which are not necessarily related to the operating performance of
     these companies;

o    changes in regulatory policies or tax guidelines, particularly with respect
     to RICs or business development companies;

o    our common  stock is unlikely to be  followed by any market  analysts,  and
     there may be few institutions  acting as market makers for the common stock
     which can adversely affect its price;

o    loss of or inability to qualify for RIC status or BDC status;


                                       16
<PAGE>

o    changes in earnings or variations in operating results;

o    changes in the value of our portfolio of investments;

o    any  shortfall  in  revenue or net income or any  increase  in losses  from
     levels expected by investors or securities analysts;

o    departure of one or more of our key personnel;

o    operating performance of companies comparable to us;

o    potential legal and regulatory matters;

o    changes in prevailing interest rates;

o    general economic trends and other external factors; and

o    loss of a major funding source.

Sales of  substantial  amounts of our common stock may have an adverse effect on
the market price of our common stock.

We currently  have  10,505,000  shares of common stock  outstanding.  We plan to
raise  funds  in the  future  through  sales of our  common  stock  pursuant  to
Regulation  E, which  provides in part for  issuance of freely  trading  shares.
Sales of  substantial  amounts of our common stock or the  availability  of such
shares  for sale could  adversely  affect the  prevailing  market  price for our
common stock. If this occurs and continues, it could impair our ability to raise
additional  capital through the sale of equity securities should we desire to do
so.

Our  board  of  directors  also has  authority,  without  action  or vote of the
shareholders,  to issue all or part of our authorized but unissued  shares.  Any
such  issuance will dilute the  percentage  ownership of  shareholders  and may,
subject to the regulations pertaining to the minimum prices for which shares may
be sold,  further dilute the book value of the common stock. These issuances may
also serve to enhance existing  management's  ability to maintain control of the
Company.

We have the right, but do not intend to issue senior securities, including debt.
If we were to reverse  that  decision  and offer for sale  and/or  issue  senior
securities, you will be exposed to additional risks, including the typical risks
associated with leverage.

You  will  be  exposed  to  increased  risk of  loss  if we  incur  debt to make
investments.  If we do incur debt,  a decrease  in the value of our  investments
would have a greater negative impact on the value of our common stock than if we
did not use debt.

o    Our ability to pay  dividends  would be  restricted  if our asset  coverage
     ratio were not at least  200% and any  amounts  that we use to service  our
     indebtedness   would  not  be  available   for   dividends  to  our  common
     stockholders.


                                       17
<PAGE>

o    It is likely  that any debt we incur will be governed  by an  indenture  or
     other   instrument   containing   covenants   restricting   our   operating
     flexibility.

o    We and you as shareholders  will bear the cost of issuing and servicing our
     senior securities.

o    Any convertible or exchangeable  securities that we issue in the future may
     have rights,  preferences  and privileges  more favorable than those of our
     common stock.

Our investments may require us to raise additional capital on different terms.

We will require additional  capital in the future. For additional  requirements,
we may raise capital by issuing equity or convertible debt securities,  and when
we do, the percentage ownership of our existing stockholders will be diluted. In
addition,  any new  securities  we issue  could  have  rights,  preferences  and
privileges senior to our existing equity (although we do not intend to sell debt
or preferred equity interests).

Our ability to raise capital as a BDC is limited by the requirement  that we not
sell shares below the NAV/S without approval of a majority of our  shareholders.
While we do not  anticipate  that the NAV/S  calculation  will ever  result in a
negative number or a nominally  positive  number,  the Company would be severely
limited in its ability to sell  shares if such a negative  number or a nominally
positive number were to be the result of a NAV/S calculation.

Increases in market  interest  rates may both reduce the value of our  portfolio
investments and increase our cost of capital.

We expect that we may offer loans to our  portfolio  companies  with interest at
fixed rates and the value of these investments  could be negatively  affected by
increases in market interest  rates. In addition,  an increase in interest rates
would  make it more  expensive  to use debt to  finance  our  investments.  As a
result,  a significant  increase in market  interest rates could both reduce the
value of our portfolio investments and increase our cost of capital, which would
reduce our net investment income.

The lack of liquidity in our investments may adversely affect our business.

We will generally make investments in private  companies.  Substantially  all of
these  securities  will be subject to legal and other  restrictions on resale or
will otherwise be less liquid than publicly traded  securities.  The illiquidity
of our investments may make it difficult for us to sell such  investments if the
need arises.  In addition,  if we are required to liquidate  all or a portion of
our portfolio  quickly,  due to changes in capital  needs or  otherwise,  we may
realize  significantly less than the value at which we have previously  recorded
our investments.  In addition,  we may face other restrictions on our ability to
liquidate  an  investment  in a  portfolio  company to the extent that we or our
investment adviser has material non-public  information regarding such portfolio
company.


                                       18
<PAGE>

We may experience fluctuations in our quarterly and annual results.

We could experience  fluctuations in our quarterly and annual operating  results
due to a number of factors,  including the interest or dividend rates payable on
the debt or equity  securities we acquire,  performance  and/or  default rate on
securities we acquire,  the level of our expenses,  variations in and the timing
of the  recognition  of realized and unrealized  gains or losses,  the degree to
which  we  encounter  competition  in our  markets,  changes  in the  investment
industry, and general economic conditions. As a result of these factors, results
for any period should not be relied upon as being  indicative of  performance in
future periods.

We may not realize gains or income from our investments.

We seek to generate both current income and capital  appreciation.  However, the
securities,  in which we invest, may not appreciate and, in fact, may decline in
value,  and the issuers of debt securities,  in which we invest,  may default on
interest and/or principal payments.  Accordingly,  we may not be able to realize
gains  from  our  investments,  and  any  gains  that we do  realize  may not be
sufficient to offset any losses we experience.

Your influence in matters requiring  shareholder action will be limited due to a
significant position held by a single shareholder.

There  is a single  shareholder  with a  controlling  interest  and this  single
shareholder  would likely  exercise  voting control over all matters that may be
submitted for approval by our shareholders.  This shareholder has a material and
significant  position of control.  The Company's  officers or directors own less
than 1% of the issued and  outstanding  shares of our voting  securities but, to
the extent that this single controlling shareholder votes to affirm decisions of
management, notwithstanding the fact that the number of shares controlled by the
officers  and  directors is less than a majority,  their  position of control is
also material and significant.

Pursuant  to our  articles  of  incorporation,  our Board of  Directors  has the
authority  to issue  shares of stock  without any further  vote or action by the
stockholders.  The issuance of stock under certain  circumstances could have the
effect of delaying or preventing a change in control of the Company or may deter
takeover attempts.

Our articles of  incorporation  contain  provisions  that may have the effect of
discouraging,  delaying  or  making  more  difficult  a change  in  control  and
preventing the removal of incumbent directors. The existence of these provisions
may reduce any premiums over market price that a potential  acquirer would offer
to  shareholders  for their  shares of our  common  stock.  Furthermore,  we are
subject to provisions of the Nevada Revised  Statutes that may make it difficult
for a potential  acquirer to exert  control over our Board of Directors  and may
discourage  attempts  to gain  control  without  the  consent  of the  Board  of
Directors.


GENERAL RISKS ASSOCIATED WITH BUSINESS DEVELOPMENT COMPANIES

BDCs generally require  substantial amounts of time to realize the benefits from
investments.

Venture  capital  investments  typically  take from four to eight years from the
date of initial investment to reach a state of maturity at which liquidation can


                                       19
<PAGE>

be considered practical.  We have not completed funding of some of our portfolio
companies  and we  anticipate  that  there may be an  additional  period of time
ranging from three to six months before we have  obtained  funding and completed
investing that funding in our portfolio  companies for our first round of equity
investments.  In light of the  foregoing,  it is unlikely  that any  significant
distributions of the proceeds from the liquidation of equity investments will be
made for several years after inception, if at all.

Our present senior  management team has limited  experience  managing a business
development company under the Investment Company Act of 1940.

The  1940  Act  imposes  numerous  constraints  on the  operations  of  business
development companies. For example,  business development companies are required
to  invest  at least  70% of their  total  assets  primarily  in  securities  of
privately held or thinly traded U.S. public  companies,  cash, cash equivalents,
U.S.  government  securities and other high quality debt investments that mature
in one year or less.  The lack of  experience of our senior  management  team in
managing a portfolio of assets under such  constraints  may hinder their ability
to take  advantage  of  attractive  investment  opportunities  and, as a result,
achieve our investment  objective.  Within the BDC format, the information about
deals and deal flow generated by our senior  management in connection with their
investment and portfolio management activities will have a significant impact on
our  future  success  as a  BDC.  The  senior  management  team  will  evaluate,
structure,  negotiate  terms and close  investments on those terms,  monitor and
service our  investments  and their  abilities  to perform  these  functions  as
members of a BDC will also have a significant  impact on our future success as a
BDC.

We  will be  wholly  dependent  for  the  selection,  structuring,  closing  and
monitoring  of  all  of  our  investments  on the  diligence  and  skill  of our
management,  acting under the  supervision  of our Board of  Directors.  None of
these individuals has substantial  experience,  within or under a BDC investment
and management format, in acquiring and investing in growth stage companies, the
negotiation  of the  terms  of  such  investments  and  the  monitoring  of such
investments after they are made. In addition, we will engage outside consultants
and  professionals  known to management to assist in evaluating  and  monitoring
portfolio companies and maintaining regulatory compliance.

While we believe that our  management  possesses  certain  fundamental  business
skills that will increase our  likelihood to succeed,  our  management  team has
never  operated a BDC and must be considered as  inexperienced  when it comes to
the both the day to day  operations of an investment  company and the management
of  investments.  We intend to rely on the general skills and business acumen of
our management team as well as engaging other professionals and consultants from
time to time to insure that it gains the expertise to manage a BDC.


We may change our investment policies without further shareholder approval.

Although we are limited by the 1940 Act with  respect to the  percentage  of our
assets  that must be  invested  in  qualified  portfolio  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


                                       20
<PAGE>

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.

We may allocate the net proceeds from stock sales in ways with which you may not
agree.

We will have significant  flexibility in investing the net proceeds of our stock
sales.  We may use the net  proceeds in ways with which you may not agree or for
investments other than those contemplated at the time we sell the stock,  unless
such  change in the use of  proceeds  is subject to  stockholders'  approval  or
prohibited by law.

We will have broad discretion in using the proceeds from any offering

Our management has broad discretion with respect to the specific  application of
the net proceeds of any funding that we obtain.  While our corporate  governance
resolutions require the Board of Directors and Investment Committee to adhere to
certain standards, even acting in compliance with those guidelines, our Board of
Directors and Investment  Committee have discretion.  We do not permit the Board
of Directors and Investment  Committee to use proceeds in a manner  inconsistent
with the operation of a BDC. Although substantially all of the net proceeds from
any  offering is intended to be applied for  investments  in eligible  portfolio
companies  which  satisfy  our  investment  criteria,  we may invest some of the
proceeds in the  provision of services to our  portfolio  companies  rather than
invest directly.  Therefore, we can not accurately predict costs associated with
such professionals and consultants. For that reason, the use of proceeds can not
be  determined  with absolute  certainty.  You will not have an  opportunity  to
evaluate the basis for our decisions on the use of the proceeds, and will not be
able to participate in such decisions.

Our investments may not generate sufficient income to cover our operations.

While we intend to make  investments  into those  qualified  companies that will
provide the greatest  overall return on our investment,  we are required to make
investments  into those  companies  which,  whether due to lack of experience or
financial  instability  (including  insolvency),  may present the greatest risk.
This is in conformity with the Small Business  Investment  Incentive Act of 1980
which amended the 1940 Act and permitted the creation of BDC's. 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.  It
should be noted that our operational  costs are higher as a result of our having
elected to be governed as a BDC.

Shares in a BDC will likely trade at a discount.

Shares of many closed-end  investment  companies and most BDC's frequently trade
at a discount to their net asset  value.  This  characteristic  is separate  and
distinct  from the risk that our net asset value  could  decrease as a result of
investment  activities.  This likely discount in share pricing in the market may
pose a greater risk to investors  expecting to sell their shares in a relatively


                                       21
<PAGE>

short period after purchase.  We cannot predict whether our shares will trade at
prices above, at or below our net asset value.

Regulations governing our operation as a business development company affect our
ability to raise, and the way in which we raise, additional capital.

We have the right to issue debt  securities  or preferred  stock  and/or  borrow
money from banks or other financial institutions, which we refer to collectively
as "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,
the  maximum  amount  permitted  by the 1940  Act.  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  or sell  additional  shares of
common stock and, depending on the nature of our leverage, to repay a portion of
our indebtedness at a time when such sales may be disadvantageous.  In addition,
any future  issuance of  additional  shares of our common stock could dilute the
percentage ownership of our current stockholders in us.

As a business development company regulated under provisions of the 1940 Act, 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 our common  stock (1) if our Board of Directors  determines  that
such  sale is in the  best  interests  of us and our  stockholders,  and (2) 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 sales load).

In  addition,  we may in the future  seek to  securitize  or  hypothecate  loans
previously  made  by us  to  generate  cash  for  funding  new  investments.  To
securitize or hypothecate these loans, we may contribute a pool of such loans to
a  wholly-owned  subsidiary.  This could  include the sale of  interests  in the
subsidiary  on a  non-recourse  basis to  purchasers  who we would  expect to be
willing to accept a lower interest rate to invest in investment grade loan pools
although  we would  expect to retain a portion of the equity in the  securitized
pool of loans. An inability to  successfully  securitize and sell all or part of
such a loan  portfolio  could  limit our  ability  to grow our  business,  fully
execute our business strategy and could decrease our earnings, if any. Moreover,
the successful  securitization  of our loan portfolio  might expose us to losses
because the  residual  loans in which we do not sell  interests  will tend to be
those that are riskier and more likely to generate losses.

Our election to be governed as a BDC will require us to comply with  significant
regulatory requirements.

We elected to be regulated as a Business  Development Company under the 1940 Act
and be  subject  to  Sections  54  through  65 of said Act.  As a result of this
election,  the Company is subject to the provisions of 1940 Act as it applies to
BDCs as of the  date of  such  election.  Being  subject  to the BDC  provisions
requires  us  to  meet   significant   numbers  of   regulatory   and  financial
requirements.  Compliance  with these  regulations  is expensive  and may create
financial problems for us in the future. These laws and regulations,  as well as
their interpretation,  may be changed from time to time. Accordingly, any change
in these  laws or  regulations  could  have a  material  adverse  effect  on our
business.


                                       22
<PAGE>

Specifically,  it must be noted that there are increased  costs  associated with
compliance  with the 1940 Act as a result of our election to become a BDC. These
costs  include  costs  associated  with  the  increased  demand  for  compliance
including  oversight by our Chief Compliance  Officer and counsel to the Company
as well as increased costs due to accounting  methodology  and valuations  which
increase the time and work required of both our accounting service providers and
independent  auditors.  These costs  require us to expend  capital and resources
that might  otherwise  be used to meet the needs or  opportunities  relating  to
investments and/or our portfolio companies or other income-producing assets.

If we do not remain a business  development  company,  we might  continue  to be
regulated as a closed-end  investment  company  under the 1940 Act,  which would
decrease  our  operating  flexibility.   We  cannot  assure  you  that  we  will
successfully retain our BDC status.

If our primary investments are deemed not to be qualifying assets, we could lose
our status as a business  development  company or be  precluded  from  investing
according to our current business plan.

Under the 1940 Act,  in order to maintain  our status as a business  development
company,  we must not acquire any assets other than "qualifying  assets" unless,
at the time of and after giving effect to such acquisition,  at least 70% of our
total  assets  are  qualifying   assets.   If  we  acquire  mezzanine  loans  or
dividend-paying equity securities from an issuer that has outstanding marginable
securities at the time we make an investment,  these  acquired  assets cannot be
treated  as  qualifying  assets  since the  issuer  might not be  considered  an
"eligible portfolio company" under the 1940 Act. "Marginable securities" include
any  non-equity  security,  pursuant to certain 1998  amendments to Regulation T
under the Securities Exchange Act of 1934, as amended, which raises the question
as to whether a private  company  that has  outstanding  debt  securities  would
qualify as an eligible portfolio company.

We operate in a highly competitive market for investment opportunities.

A large number of entities will compete with us to make the types of investments
that we plan to make in target portfolio  companies.  We will compete with other
business  development  companies,  public  and  private  funds,  commercial  and
investment banks and commercial financing companies. Many of our competitors are
substantially  larger and have  considerably  greater  financial,  technical and
marketing  resources than we do. For example,  some competitors may have a lower
cost of funds and access to funding  sources  that are not  available  to us. In
addition,  some of our  competitors may have higher risk tolerances or different
risk  assessments,  which  could  allow  them to  consider  a wider  variety  of
investments and establish more relationships than us.  Furthermore,  many of our
competitors  are not subject to the  regulatory  restrictions  that the 1940 Act
imposes on us as a business  development  company. We cannot assure you that the
competitive  pressures  we face will not have a material  adverse  effect on our
business,  financial  condition and results of operations.  Also, as a result of
this competition,  we may not be able to take advantage of attractive investment
opportunities  from time to time,  and we can offer no assurance that we will be
able to identify and make  investments  that are consistent  with our investment
objective.


                                       23
<PAGE>

We may never be able to qualify for the income tax benefits offered to RICs.

We will be classified  as a  non-diversified  investment  company under the 1940
Act.  Until we  achieve a  threshold  level of  diversification,  we will not be
subject to the applicable  provisions for RICs under the Internal  Revenue Code.
Therefore,  we  will  not  receive  favorable  pass  through  tax  treatment  on
distributions  to our  shareholders.  This  means  that we will be  taxed  as an
ordinary corporation on our taxable income even if that income is distributed to
shareholders,  and all  distributions  out of our  earnings  and profits will be
taxable to  shareholders  as dividends.  Thus,  this income will be subject to a
double layer of taxation.

RISKS ASSOCIATED WITH INVESTMENTS AND PORTFOLIO COMPANIES

There are costs associated with the purchase and sale of securities.

While the general approach of a BDC may suggest a long-term  holding position of
the  securities of its portfolio  companies,  some of our strategies may include
purchases of different  classes of  securities  or frequent  trading to maximize
profits  and, as a  consequence,  risks  related to  turnover  and costs such as
brokerage  commissions  may be greater than for an investment in a single entity
for a single class of security held for a longer  period of time.  Our operating
expenses,  including,  but not limited to, fees paid to accountants,  attorneys,
fees to  execute  trades,  manage  investments  and fees paid to any  investment
advisor  may, in the  aggregate,  constitute a high  percentage  relative to the
expenses and fees than for an  investment  in a single entity for a single class
of security held for a longer period of time.

There are numerous risks arising from investing in securities.

The  securities  industry is  generally  competitive  and methods of  investment
strategy involve a degree of risk. We will compete with firms, including many of
the larger  securities and investment  banking firms,  which have  substantially
greater financial resources and research staffs. Where we purchase securities in
portfolio companies for appreciation,  our profitability  substantially  depends
upon our ability to correctly assess the future price movements of stocks. There
can be no assurance that we will be able to accurately  predict price  movements
of securities purchased.

Security investments generally involve a high degree of risk. The performance of
securities  in which we may invest are  subject to  numerous  factors  which are
neither within the control of nor  predictable by us. Such factors can include a
wide range of economic,  political,  competitive and other  conditions which may
affect  investments  in general or specific  industries or companies.  In recent
years,  the  securities  markets  have  become  increasingly  volatile  and this
volatility has increased the degree of risk.

Our  investments in prospective  portfolio  companies may be risky and you could
lose all or part of your investment.

We will invest primarily in private or thinly-traded  public companies,  most of
which have relatively short or no operating  histories.  These companies will be
subject to all of the business risk and  uncertainties  associated  with any new
business enterprise, including the risk that these companies may not reach their
investment  objective  and the  value  of our  investment  in them  may  decline


                                       24
<PAGE>

substantially  or fall to zero.  Most of the portfolio  companies  into which we
intend to invest will be considered "growth stage" companies.

Investments in growth stage  companies  offer the  opportunity  for  significant
gains. However, each investment involves a high degree of business and financial
risk that can result in substantial losses. Among these are the risks associated
with:

o    these companies may have limited  financial  resources and may be unable to
     meet their  obligations  under their  securities that we hold, which may be
     accompanied by a deterioration  in the value of their equity  securities or
     of any  collateral  with respect to debt  securities and a reduction in the
     likelihood  of us  realizing  on any  guarantees  we may have  obtained  in
     connection with our investment;

o    they may have  shorter  operating  histories,  narrower  product  lines and
     smaller  market  shares than larger  businesses,  which tend to render them
     more vulnerable to competitors'  actions and market conditions,  as well as
     general economic downturns;

o    because  many of these  companies  are  privately  held  companies,  public
     information is generally not available about these companies.  As a result,
     we will  depend  on the  ability  of our  investment  committee  to  obtain
     adequate  information  to evaluate  these  companies  in making  investment
     decisions.  If our  investment  committee is unable to uncover all material
     information  about  these  companies,  it may  not  make a  fully  informed
     investment decision, and we may lose money on our investments;

o    they are more likely to depend on the  management  talents and efforts of a
     small group of persons;  therefore, the death,  disability,  resignation or
     termination  of one or more of these persons could have a material  adverse
     impact on our portfolio company and, in turn, on us;

o    companies  operating at a loss or with substantial  variations in operating
     results  from period to period,  with the need for, but  generally  limited
     ability  to  provide  for  internally,  substantial  additional  capital to
     support expansion or to achieve or maintain a competitive position;

o    these companies may face intense  competition,  including  competition from
     companies with greater  financial  resources,  more extensive  development,
     manufacturing,  marketing,  and service capabilities,  and larger number of
     qualified managerial and technical personnel; and

o    they may have less predictable  operating results, may from time to time be
     parties to litigation,  may be engaged in changing businesses with products
     subject to a risk of obsolescence  and may require  substantial  additional
     capital to support their  operations,  finance  expansion or maintain their
     competitive  position. In addition,  our executive officers,  directors and
     our investment adviser could, in the ordinary course of business,  be named
     as defendants in litigation  arising from our  investments in the portfolio
     companies.


                                       25
<PAGE>

Economic  recessions or downturns could impair our portfolio  companies and harm
our operating results.

Our portfolio companies will generally be affected by the conditions and overall
strength of the national, regional and local economies,  including interest rate
fluctuations,  changes in  markets  and  changes in the prices of their  primary
commodities and products. These factors could adversely impact the customer base
of our portfolio companies.  As a result, many of our portfolio companies may be
susceptible to economic slowdowns or recessions and may be unable to repay loans
or meet other obligations  during these periods.  Therefore,  our non-performing
assets  are  likely to  increase,  and the value of our  portfolio  is likely to
decrease,  during these periods.  Adverse economic  conditions also may decrease
the value of  collateral  securing some of our loans and the value of our equity
investments.  Economic slowdowns or recessions could lead to financial losses in
our  portfolio  and a decrease in revenues,  net income and assets.  Unfavorable
economic  conditions also could increase our funding costs,  limit our access to
the capital  markets or result in a decision by lenders not to extend  credit to
us. These  events  could  prevent us from  increasing  investments  and harm our
operating results.

A  portfolio  company's  failure to satisfy  financial  or  operating  covenants
imposed  by us or  other  investors  or  lenders  could  lead to  defaults  and,
potentially, termination of loans and foreclosure on secured assets, which could
trigger  cross-defaults  under other  agreements  and  jeopardize  our portfolio
company's  ability to meet its obligations  under the debt or equity  securities
that we hold.  We may incur  expenses to the extent  necessary to seek  recovery
upon default or to negotiate new terms,  which may include the waiver of certain
financial covenants, with a defaulting portfolio company. In addition, if one of
our portfolio companies were to go bankrupt,  even though we may have structured
our  interest as senior debt or  preferred  equity,  depending  on the facts and
circumstances,  including  the extent to which we actually  provided  managerial
assistance to that portfolio company,  a bankruptcy court might  re-characterize
our debt or equity  holding  and  subordinate  all or a portion  of our claim to
those of other creditors.

Our  portfolio  companies  may incur debt or issue equity  securities  that rank
equally with, or senior to, our investments in such companies.

We intend to invest  primarily  in  mezzanine  debt and  dividend-paying  equity
securities issued by our portfolio  companies.  Our portfolio  companies usually
will have,  or may be  permitted  to incur,  other debt,  or issue other  equity
securities,  that rank equally  with,  or senior to, the  securities in which we
invest.  By their  terms,  such  instruments  may  provide  that the holders are
entitled to receive payment of dividends, interest or principal on or before the
dates on which we are entitled to receive  payments in respect of the securities
in which we invest. Also, in the event of insolvency, liquidation,  dissolution,
reorganization  or  bankruptcy  of a portfolio  company,  holders of  securities
ranking senior to our investment in that  portfolio  company would  typically be
entitled  to receive  payment  in full  before we receive  any  distribution  in
respect of our  investment.  After  repaying the senior  security  holders,  the
portfolio  company may not have any  remaining  assets to use for  repaying  its
obligation to us. In the case of securities  ranking  equally with securities in
which we invest, we would have to share on an equal basis any distributions with
other security holders in the event of an insolvency, liquidation,  dissolution,
reorganization or bankruptcy of the relevant portfolio company. In addition,  we
may not be in a position to control any portfolio company in which we invest. As
a result, we are subject to the risk that a portfolio company in which we invest
may make business  decisions  with which we disagree and the  management of such


                                       26
<PAGE>

company,  as  representatives  of the holders of their common  equity,  may take
risks or  otherwise  act in ways  that do not  serve  our  interests  as debt or
preferred equity investors.

We may not be able to fully  realize the value of any  collateral  securing  any
debt investments made into portfolio companies.

Although we expect that a  substantial  amount of our debt  investments  will be
protected  by  holding  security  interests  in  the  assets  of  the  portfolio
companies,  we may not be able to fully  realize  the  value  of the  collateral
securing any such investments due to one or more of the following factors:

o    since  these  debt  investments  will  be  primarily  made  in the  form of
     unsecured  or  wrap-loans,  the liens on the  collateral,  if any,  will be
     subordinated  to  those  of  the  senior  secured  debt  of  the  portfolio
     companies, if any. As a result, we may not be able to control remedies with
     respect to the collateral;

o    the collateral may not be valuable enough to satisfy all of the obligations
     under our secured loan,  particularly  after giving effect to the repayment
     of secured debt of the portfolio company that ranks senior to our loan;

o    bankruptcy  laws may limit our ability to realize value from the collateral
     and may delay the realization process;

o    our rights in the  collateral  may be adversely  affected by the failure to
     perfect security interests in the collateral;

o    how effectively  the collateral  would be liquidated and the value received
     could  be  impaired  or  impeded  by the  need  to  obtain  regulatory  and
     contractual consents; and

o    by its nature,  some or all of the  collateral may be illiquid and may have
     no readily  ascertainable  market  value.  The  liquidity  and value of the
     collateral could be impaired as a result of changing  economic  conditions,
     competition,  and other  factors,  including the  availability  of suitable
     buyers.

Our success  will depend upon the  success of the  portfolio  companies  and, in
great part, upon the abilities of their management.

Although our management  expects to provide portfolio  companies with assistance
(particularly with regard to capital formation,  major personnel decisions,  and
strategic  planning),  the  day-to-day  operations  will  be  controlled  by the
management of the portfolio  companies.  As the portfolio companies have not all
been  identified,  investors must rely upon our  management to select  portfolio
companies that have, or can obtain, the necessary management resources.  We will
depend on the  diligence,  skill and network of business  contacts of the senior
management  of each of the  portfolio  companies  in  which  we  invest  and the
professionals chosen by them, subject to the oversight of our senior management,
and  the  information  and  interaction  between  management  of  the  portfolio
companies and our  management.  Our future  success will depend to a significant
extent on the continued  service of the senior management team of each portfolio


                                       27
<PAGE>

company,  the departure of any of whom could have a material  adverse  effect on
our ability to achieve our investment objective. Problems may arise at portfolio
companies that local management do not recognize or cannot resolve. In addition,
the management of portfolio companies may conceal the existence of problems from
us.

Many of our portfolio  investments  will be recorded at fair value as determined
in good  faith  by our  board of  directors  and,  as a  result,  there  will be
uncertainty as to the value of our portfolio investments.

A large  percentage of our portfolio  investments  will consist of securities of
privately  held or  thinly  traded  public  companies.  The fair  value of these
securities  may not be  readily  determinable.  We will value  these  securities
quarterly  at fair value as  determined  in good faith by our Board of Directors
based on input  from our audit  committee  with or  without  the  benefit  of an
opinion from a third party  independent  valuation firm. We may also be required
to value any publicly  traded  securities  at fair value as  determined  in good
faith by our Board of Directors to the extent  necessary to reflect  significant
events affecting the value of those  securities.  Our Board of Directors may, to
the extent  circumstances  warrant it,  utilize the  services of an  independent
valuation firm to aid it in determining  the fair value of any  securities.  The
types of factors that may be considered in fair value pricing of our investments
include  the  nature  and  realizable  value of any  collateral,  the  portfolio
company's  ability to make payments and its  earnings,  the markets in which the
portfolio  company  does  business,  comparison  to publicly  traded  companies,
discounted cash flow and other relevant  factors.  Because such valuations,  and
particularly  valuations  of  private  securities  and  private  companies,  are
inherently  uncertain,  valuations  may fluctuate over short periods of time and
may be based on  estimates,  the  determinations  of fair  value by our Board of
Directors may differ  materially  from the values that would have been used if a
ready  market  for  these  securities  existed.  Our net  asset  value  could be
adversely  affected  if the  determinations  regarding  the  fair  value  of our
investments  were materially  higher than the values that we ultimately  realize
upon the disposal of such securities.

Limitations on  availability  of investment  capital may adversely  affect other
investments.

We may be reliant on the  availability of capital to generate  profits under our
investment  strategy and such  availability will depend, in part, on our ability
to  timely  liquidate  existing  positions  in order to  reinvest  the  proceeds
thereof.  To the extent that we own securities  which are not subject to a valid
registration  statement  or otherwise  available  for trading  under  applicable
securities laws, our ability to liquidate our position in such securities may be
limited.  We intend to require some of our portfolio companies to use their best
efforts to cause a registration  statement covering the resale of the securities
purchased  by us to be  filed  and  declared  effective  by the  SEC  or  become
otherwise freely tradeable.  However,  there can be no guarantee that the SEC or
other  regulating body will declare such a registration  statement  effective or
permit  such  security to become  free of  restrictions  within such period and,
until such securities become freely tradable, we will likely be unable to freely
liquidate  such  interests  in  restricted  securities  in the manner and at the
prices  desired.  This resulting  lack of liquidity  could impair our ability to
generate  the cash flow from these  positions to timely pay our  liabilities  or
obtain  funds for the  purpose of  reinvestment.  Although we intend to maintain
adequate liquidity to achieve our future investment objectives,  there can be no
assurance this can be accomplished in all circumstances.


                                       28
<PAGE>

Portfolio companies are likely to need additional funding.

We expect that many  portfolio  companies will require  additional  financing to
satisfy their working capital  requirements.  The amount of additional financing
needed will depend upon the maturity and objectives of the  particular  company.
Each round of venture financing, whether from us or other investors is typically
intended to provide a portfolio  company  with enough  capital to reach the next
major valuation milestone. If the funds provided are not sufficient, a portfolio
company may have to raise  additional  capital at a price  unfavorable to us and
the other  existing  investors.  The  availability  of  capital is  generally  a
function of capital market conditions that are beyond our control or the control
of any  portfolio  company.  We cannot  assure  you that our  management  or the
managements of portfolio companies will be able to predict accurately the future
capital  requirements  necessary  for success or that  additional  funds will be
available to portfolio  companies from any source.  If funding is not available,
some portfolio companies may be forced to cease operations.

BDC investments are generally illiquid.

We  anticipate  that  most  of our  holdings  in  portfolio  companies  will  be
securities  that are subject to restrictions  on resale.  Generally,  unless the
securities are  subsequently  registered under the 1933 Act, we will not be able
to sell these  securities  unless we meet all of the  conditions  of Rule 144 or
another  rule under the 1933 Act that  permits  limited  sales  under  specified
conditions.  When restricted securities are sold to the public, we may be deemed
an underwriter,  or possibly a controlling  person, with respect thereto for the
purpose of the  Securities Act and may be subject to liability as such under the
1933 Act. These restrictions could require us to hold securities or refrain from
sale and be unable to liquidate a position even at a loss.

Even if we meet all of the  conditions  of the 1933 Act,  there may be no market
for the  securities  that we hold.  These  limitations  on  liquidity of a BDC's
investments  could  prevent a successful  sale  thereof,  result in delay of any
sale, or  substantially  reduce the amount of proceeds  that might  otherwise be
realized.  It is possible  that one or more of the  portfolio  companies may not
qualify to rely on such exemptions or to use a registration  statement.  In such
event, we would end up owning  "restricted"  securities  subject to resale under
Rule 144

There are risks which  result from the  inherent  concentration  of  investments
prior to diversification.

While we intend to allocate our investments among different portfolio companies,
it is possible  that,  prior to our  achieving  diversification,  a  significant
amount of or all of our investments  and, hence, our NAV could, at any one time,
be invested in the  securities  of just a few  portfolio  companies.  Thus,  our
success  and NAV  would be  dependent  on the  success  of just a few  portfolio
companies  and all of the risks  associated  with  ownership  of such  portfolio
companies including success dependent on management, success dependent on market
conditions  within the industry or field of such  portfolio  companies,  success
dependent on achieving the business  objectives of such portfolio  companies and
success  dependent on economic  conditions and other conditions  relative to the
operation of such portfolio companies, would become risks borne by us.


                                       29
<PAGE>

There  are  risks   associated   with   investments   in  companies  with  small
capitalization.

The portfolio  companies that we expect to invest in are thinly  capitalized and
generally will have a market  capitalization  below $100 million (and frequently
substantially  less). These companies  generally do not have experience,  market
awareness,  tracking by analysts,  institutional investors and other benefits of
larger  companies  that result in more  marketability  and more stability in the
pricing of their securities.  This impacts the liquidity of securities issued by
those  portfolio  companies.  It is expected that the securities of most, if not
all, of the  portfolio  companies  will be thinly  traded.  This could present a
problem when we determine to liquidate our position.  We may not be able to sell
the securities in the time frame and at the price we would like. Furthermore, in
certain  situations,  as a result of a security  being thinly  traded,  we could
experience a  significant  loss in value  should we be forced to  liquidate  our
investment as a result of rapidly changing market conditions or other factors.

There are risks  associated  with  investments in companies with securities that
are not readily marketable.

We may  invest in  securities  that are  initially,  or that later  become,  not
readily  marketable.  For example,  we may acquire  restricted  securities of an
issuer in a private  placement  pursuant  to an  arrangement  whereby the issuer
agrees  to  register  the  resale  of those  securities,  or,  in the case of an
investment in convertible or exchangeable securities,  the securities underlying
such  securities,  within a certain period of time. Such  registration  requires
compliance with United States Federal and state securities laws and the approval
of the SEC.  Unless and until such  registration  or compliance  with applicable
regulation  occurs,  there  is  likely  to  be  no  market  for  the  restricted
securities.  No  assurance  can be given  that  issuers  will not  breach  their
obligation to obtain or meet such  registration or other compliance  obligation.
Similarly,  securities that are at one time  marketable may become  unmarketable
(or more difficult to market) for a number of reasons.  For example,  securities
traded on a securities  exchange or quotation system may become  unmarketable if
delisted from such exchange or quotation system for among other reasons, failing
to satisfy the  requirements  for continued  listing,  which may include minimum
price requirements. In addition, we may acquire restricted securities, for which
no market exists, which are convertible or exchangeable into common stock of the
issuer.  No  assurances  can be given that a portfolio  company which has sold a
convertible  security  requiring  exchange  or  conversion,  will not breach its
obligation to convert or exchange such securities upon demand, in which case our
liquidity may be adversely affected.  In general, the stability and liquidity of
the   securities   in  which  we  invest  will  depend  in  large  part  on  the
creditworthiness of the issuers.  Issuers' creditworthiness will be monitored on
an  ongoing  basis by us.  If  there is a  default  by the  issuer,  we may have
contractual  remedies  under  the  applicable  transaction  documents.  However,
exercising  such  contractual  rights  may  involve  delays in  liquidating  our
position and the incurrence of additional costs.

Portfolio  companies  in which  investments  are  made may have  publicly-traded
securities  but those  companies  or their  securities  may  become  subject  to
restrictions  due to  non-compliance.  Our ability to generate  profits from our
investment  activities  may be  adversely  affected  by a failure  of  portfolio
companies to comply with registration, conversion, exchange or other obligations
under the agreements pursuant to which such securities have been sold to us. The
failure of an issuer to  register  the resale of its  securities  sold to us may
decrease  the  amount  of  available  capital  with  which we may  pursue  other
investment  opportunities  or  meet  current  liabilities.   We  may  invest  in


                                       30
<PAGE>

securities  that are convertible  into or  exchangeable  for common stock of the
issuer,  the  resale  of which by us is (or is to be)  registered.  If an issuer
refuses,  is unable to, or delays in timely  honoring  its  obligation  to issue
conversion or exchange securities, our ability to liquidate our position will be
adversely affected, and our profits may be adversely affected.

We have not yet identified all of the potential investments for our portfolio.

We have not yet identified all of the potential  investments  for our portfolio,
and,  thus,  you will not be able to evaluate all of our  potential  investments
prior to purchasing  shares of our common  stock.  This factor will increase the
uncertainty, and thus the risk, of investing in our shares.

We may sustain losses from fraud within our portfolio companies.

The risk of fraud losses on our assets  varies  with,  among other  things,  the
effectiveness of security procedures utilized. Management anticipates that fraud
losses,  if any, will be unlikely as controls and other  security  measures will
have been adopted by each portfolio  company as a condition to our investment to
protect against fraudulent  misappropriation of cash and other assets.  However,
although our  management  believes  that any loss due to fraud will be unlikely,
there can be no assurance that fraud loss experience will not become material in
amount.  Fraud at the BDC level is far less likely as BDC's are required to have
and to have tested controls to limit this possibility. It must be noted that, in
addition to basic controls as to financial  data,  BDC's are required to have in
place certain  safeguards which may render risks to investment assets from fraud
to be nominal  but these  risks do exist and even  requirements  such as holding
physical  certificates of shares in portfolio companies in a safe do not, in and
of themselves, eliminate the possibility of fraud.


RISKS OF THE COMPANY AT ITS PRESENT STAGE

Although  we have  been in  existence  for a number  of  years,  we may still be
considered to have a limited operating history as a BDC. We are a relatively new
business development company with limited resources and sources of revenues.

We were  incorporated  on August  21,  2002,  and we have  commenced  investment
operations but the extent of our investment activities will characterize us as a
newer investment  company.  We made our election to become a BDC on February 14,
2006, and, while we have owned shares in some portfolio  companies,  we have not
realized  any  significant  revenues  from  the sale or  other  liquidity  event
involving our past or present portfolio  companies.  As we have made investments
only in four portfolio  companies,  we have limited  experience  relating to the
identification,   evaluation   and   acquisition  of  target   businesses   and,
accordingly,  there is only a limited basis upon which to evaluate our prospects
for achieving our intended  business  objectives.  We have limited resources and
have realized  limited  revenues to date.  In addition,  we will not achieve any
revenues until, at the earliest, we are able to obtain funding, make investments
and sell our position of  securities in an  underlying  portfolio  company for a
profit. We will be wholly dependent for the selection,  structuring, closing and
monitoring  of  all  of  our  investments  on the  diligence  and  skill  of our
management,  acting under the  supervision  of our Board of  Directors.  None of
these individuals has substantial experience, within the BDC business format, in


                                       31
<PAGE>

acquiring and investing in growth stage companies,  the negotiation of the terms
of such investments and the monitoring of such investments  after they are made.
We cannot assure you that we will attain our investment objective.

We are subject to all of the business risks and  uncertainties  associated  with
any new  business  enterprise,  including  the risk that we will not achieve our
investment  objective and that the value of your  investment in us could decline
substantially or fall to zero.

We will be confronted by competition from entities having substantially  greater
resources and experience.

Other entities and individuals compete for investments similar to those proposed
to be made by us,  many of whom  will  have  greater  financial  and  management
resources than we do.  Furthermore,  we must comply with  provisions of the 1940
Act  pertaining to BDCs and, if we qualify as a RIC,  provisions of the Internal
Revenue Code  pertaining to RICs might restrict our flexibility as compared with
our competitors.  The need to compete for investment  opportunities  may make it
necessary for us to offer portfolio companies more attractive  transaction terms
than  otherwise  might be the  case.  These  factors  may  prevent  us from ever
becoming profitable.

Distributions  to  shareholders  may never  equal  the  amount  invested  by the
shareholders.

We cannot assure you that any  distributions to shareholders  will be made by us
or that aggregate distributions,  if any, will equal or exceed the shareholders'
investment  in us. Sales of  portfolio  company  securities  will be a principal
source  of  distributable  cash to  shareholders.  The  Board of  Directors  has
absolute  discretion in the timing of distributions to shareholders.  Securities
acquired by us through equity investments will be held by us and will be sold or
distributed at the sole discretion of the Board of Directors.

There are significant  potential  conflicts of interest,  which could impact our
investment returns.

Our  executive  officer(s)  and  Director(s)  serve or may serve as officers and
directors  of entities who operate in the same or related line of business as we
do. Accordingly,  they may have obligations to investors in those entities,  the
fulfillment  of  which  might  not  be in  the  best  interests  of  us  or  our
stockholders.  It is  possible  that new  investment  opportunities  that  would
otherwise meet our  investment  objective may come to the attention of one these
entities,  and, if so, such opportunity might not be offered,  or otherwise made
available,  to us.  However,  our executive  officer(s) and  Director(s) do have
fiduciary  obligations  to  act  in our  best  interests  and  must,  in  such a
circumstance or conflict,  endeavor to allocate  investment  opportunities  in a
fair and  equitable  manner  over  time so as not to  discriminate  one  company
against another,  where equal fiduciary obligations are owed. In addition,  they
may not be available to us if there are time conflicts involving other entities.

Our  common  stock is  subject  to the  "Penny  Stock"  rules of the SEC and the
trading market in our  securities is limited,  which makes  transactions  in our
stock cumbersome and may reduce the value of an investment in our stock.

The Securities and Exchange  Commission has adopted Rule 15g-9 which establishes
the  definition  of a "penny  stock,"  for the  purposes  relevant to us, as any


                                       32
<PAGE>

equity  security  that has a market price of less than $5.00 per share or option
to acquire any equity  security  with an  exercise  price of less than $5.00 per
share,  subject to certain  exceptions.  For any  transaction  involving a penny
stock, unless exempt, the rules require:

o    that a broker or dealer  approve a person's  account  for  transactions  in
     penny stocks; and

o    the broker or dealer  receive from the investor a written  agreement to the
     transaction,  setting forth the identity and quantity of the penny stock to
     be purchased.

In order to approve a person's  account for  transactions  in penny stocks,  the
broker or dealer must:

o    obtain financial  information and investment  experience  objectives of the
     person; and

o    make a reasonable  determination  that the transactions in penny stocks are
     suitable  for that  person  and the  person has  sufficient  knowledge  and
     experience in financial  matters to be capable of  evaluating  the risks of
     transactions in penny stocks.

The broker or dealer  must also  deliver,  prior to any  transaction  in a penny
stock, a disclosure  schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

o    sets  forth the basis on which the  broker or dealer  made the  suitability
     determination; and

o    that the broker or dealer  received a signed,  written  agreement  from the
     investor prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

Disclosure  also has to be made about the risks of  investing in penny stocks in
both public offerings and in secondary trading and about the commissions payable
to both the broker-dealer and the registered representative,  current quotations
for the securities and the rights and remedies available to an investor in cases
of fraud in penny stock  transactions.  Finally,  monthly  statements have to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks.

We have limited operating history upon which to base your investment decision.

While we started  operations  on August 21,  2002,  we have a limited  operating
history available to evaluate the likelihood of the success of our business.  We
became a BDC on February 14, 2006.  Our prospects  should be considered in light
of the risks,  expenses and uncertainties that may be encountered by development
stage companies. Among other things, we must build our customer base, respond to
competitive  developments,  attract, retain and motivate qualified employees and
establish and maintain our  technologies,  products,  and services on an ongoing
basis.  There can be no assurance that we will be successful in addressing  such
risks and implementing our business strategy.


                                       33
<PAGE>

As a result of our lack of  operating  history,  and the other  risks  described
herein,  we are unable to accurately  forecast our revenues.  Our future expense
levels are based  predominately  on our operating  plans and estimates of future
revenues,  and to a large extent are fixed.  We may be unable to adjust spending
in a  timely  manner  to  compensate  for  revenues  that  do  not  materialize.
Accordingly,  any  significant  shortfall  in revenues or lack of revenue  would
likely have an immediate  material  adverse  effect on our  business,  operating
results and financial condition.

Our ability to generate  revenues  will  depend  upon many  factors.  We will be
required  to build our  business by  implementing  operational  systems,  hiring
additional employees, developing and implementing a marketing and sales strategy
and implementing our technology applications. Our expenses will initially exceed
our revenues and no  assurances  can be made that we will become  profitable  or
provide positive cash flows.

We cannot assure you that we will be successful in selling the common shares or,
if sold, at what price.  We have limited assets without the sale of these common
shares and we cannot assure you that we will attain our investment objective.

As of the date of filing of our Form 10-Q,  we have minimal cash or other assets
and net worth from which to invest in successful  portfolio  companies to insure
our success.  Our success will depend, in part, upon raising the necessary funds
to fund investments.

Restrictions  imposed  upon the resale of our  capital  stock may require you to
hold your stock for an indefinite period of time.

None of the  securities  to be issued based upon future sales will be registered
under the  Securities  Act. The common stock to be sold is intended to be exempt
from  registration  pursuant  to  Regulation  E  which  permits,  in  conformity
therewith,  issuance of shares without restriction on further transfer. While we
do not anticipate such an adverse  decision or  determination on the part of the
Securities and Exchange Commission, the SEC has the right, even after permitting
the offering to become effective,  to enjoin the sale of securities or determine
that such  sales are not  exempt  under  Regulation  E. While we will make every
effort to insure our compliance with the requirements  under Regulation E, there
can be no  assurance  of such  exemption;  as the SEC does  not,  as a matter of
policy,  affirmatively  indicate the  effectiveness  of the  notification  under
Regulation E.


ITEM 2:   PROPERTIES

We rent an office located at 3960 Howard Hughes Parkway, Suite 500 in Las Vegas,
Nevada and pay $250.00 a month for rent, on a month to month basis.


ITEM 3:   LEGAL PROCEEDINGS

There is no current or pending litigation, claims or counter claims involving us
as a Defendant.


                                       34
<PAGE>

While  acting as General  Partner  to Shocker  100  Index,  LP  ("Shocker"),  we
initiated litigation against Robert Taccia, Alex Tandy, Vincenzo Arcobelli,  and
Tony Cammarano  ("Taccia  Group").  Shocker's claim is that the Taccia Group did
not  perform  under  contractual  obligations.  Shocker  is asking for return of
1,200,000 shares of Mircotrakgps  common stock, return of $50,000 cash loaned to
American Beauty College of Ft. Worth,  Texas,  and attorney's  fees. The lawsuit
was recently  filed and no outcome can be estimated.  No  counterclaim  has been
made against us in this action and we do not believe that there exists any claim
or  counterclaim  which might be made against us. In the fourth quarter of 2005,
we sold our interest in Shocker to another entity owned by the President.

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

There were no matters  submitted to a vote of security holders during the fourth
quarter.

                                     PART II

ITEM 5:   MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
          ISSUER PURCHASES OF EQUITY SECURITIES

MARKET

Our Common Stock is not currently traded on any exchange.

NUMBER OF SHAREHOLDERS AND TOTAL OUTSTANDING SHARES

As  of  December  31,  2006,  there  were  10,505,000  shares  of  Common  Stock
outstanding  held  by  thirty-seven  (37)  shareholders  of  record  and one (1)
business trust.

DIVIDENDS

We have paid no cash  dividends  to date and do not  anticipate  paying any cash
dividends on our Common Stock in the foreseeable future. We intend to retain our
earnings,  if any, to finance the expansion of its business,  to make additional
investments and/or  acquisitions and for other general corporate  purposes.  Any
payment of future  dividends will be at the discretion of the Board of Directors
and will depend upon, among other factors,  our earnings,  financial  condition,
capital  requirements,  level of  indebtedness,  contractual  restrictions  with
respect  to the  payment  of  dividends  and other  considerations  the Board of
Directors deems relevant.

PREFERRED SHARES

None authorized.

OPTIONS

As of December 31, 2005,  there were 3,555,000  outstanding  options to purchase
common stock held by two (2) individuals and one (1) business trust. None of the
options were  exercised by the end of their term and all expired on December 31,
2006.


                                       35
<PAGE>
<TABLE>
<CAPTION>

ITEM 6:  SELECTED FINANCIAL DATA

The following table sets forth selected financial data as of and for each of the
three fiscal years ended  December 31, 2006,  2005 and 2004, and is derived from
our audited  financial  statements.  The data set forth below  should be read in
conjunction  with "Item 8: Financial  Statements" and related Notes to Financial
Statements appearing elsewhere herein and "Item 7: "Management's  Discussion and
Analysis of Financial Condition and Results of Operations".

                                                                              Prior to becoming a Business
                                                                                       Development Company
                                                Feb 15, to      Jan 1, to
                                                  Dec 31,         Feb 14,
                                                   2006            2006            2005           2004
                                               ------------    ------------    ------------   ------------
<S>                                            <C>             <C>             <C>            <C>
Statement of Operations Data - Amounts in thousands except per share amounts:

Revenues                                       $       --      $         40    $        310   $        479
Administrative expenses                                  53              46             252            461
Net earnings (loss) from operations
     Before income taxes                                (53)             (6)             58             18
Net earnings (loss) from operations                     (42)            (17)             46             15
Net realized gain (loss) on investments, net             (1)           --              --             --
Change in unrealized depreciation of
     Investments, net                                   (46)           --              --             --

Net increase (decrease) in net assets
     From operations                           $        (89)   $        (17)   $         46   $         15

Net  increase (decrease) in net assets
     Per share:
       Basic                                   $     (.0085)   $     (.0016)   $      .0043   $      .0014
       Diluted                                 $     (.0085)   $     (.0016)   $      .0032   $      .0010

Balance Sheet Data:
Investments at fair value                      $     19,600    $     66,112
Cash                                                  5,066          60,379
Total assets                                         41,423         131,198
Total liabilities                                    27,802          11,353
Net assets                                           13,621         119,845
Net assets per share                           $      .0013    $      .0114
Common stock outstanding
  at year end                                    10,505,000      10,505,000
</TABLE>


                                       36
<PAGE>

ITEM 7:   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

This  information  statement  contains  forward-looking   statements.  For  this
purpose,  any statements  contained herein that are not statements of historical
fact may be deemed to be forward-looking statements.  These statements relate to
future  events or our  future  financial  performance.  In some  cases,  you can
identify  forward-looking  statements  by  terminology  such as  "may",  "will",
"should",   "expects",   "plans",   "anticipates",    "believes",   "estimates",
"predicts",  "potential",  "continue"  or the  negative  of such  terms or other
comparable terminology. These statements are only predictions.  Actual events or
results may differ  materially.  There are a number of factors  that could cause
our  actual  results  to  differ   materially   from  those  indicated  by  such
forward-looking statements.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity, performance or achievements. Moreover, we do not assume responsibility
for the accuracy and  completeness of such  forward-looking  statements.  We are
under no duty to update any of the forward-looking  statements after the date of
this  information  statement  to  conform  such  statements  to actual  results.
Management's  discussion  and analysis  should be read in  conjunction  with our
financial statements and the notes herein.

OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS
------------------------------------------------

MANAGEMENT'S ANALYSIS OF BUSINESS

OUR ABILITY TO DEVELOP OUR BUSINESS PLAN IS CONTINGENT UPON OUR ABILITY TO RAISE
SUFFICIENT  FUNDS TO INVEST IN PORTFOLIO  COMPANIES  AND TO COVER OUR  OPERATING
OVERHEAD REQUIREMENTS.

We will have significant  relative  flexibility in selecting and structuring our
investments.  We will not be subject to many of the regulatory  limitations that
govern traditional lending institutions such as banks. We will seek to structure
our  investments  so as to take  into  account  the  uncertain  and  potentially
variable financial  performance of our portfolio  companies.  This should enable
our  portfolio  companies  to retain  access to  committed  capital at different
stages in their  development and eliminate some of the  uncertainty  surrounding
their  capital  allocation  decisions.  We will  calculate  rates of  return  on
invested capital based on a combination of up-front commitment fees, current and
deferred  interest rates and residual values,  which may take the form of common
stock,  warrants,  equity  appreciation  rights or future contract payments.  We
believe that this flexible  approach to structuring  investments will facilitate
positive,  long-term relationships with our portfolio companies and enable us to
become a  preferred  source of capital to them.  We also  believe  our  approach
should enable debt financing to develop into a viable alternative capital source
for  funding  the  growth of target  companies  that wish to avoid the  dilutive
effects of equity financings for existing equity holders.

Longer  Investment  Horizon - We will not be subject to periodic  capital return
requirements. These requirements, which are standard for most private equity and
venture  capital funds,  typically  require that these funds return to investors
the initial  capital  investment  after a  pre-agreed  time,  together  with any
capital  gains on such capital  investment.  These  provisions  often force such


                                       37
<PAGE>

funds to seek the return of their  investments  in portfolio  companies  through
mergers,  public equity  offerings or other  liquidity  events more quickly than
they  otherwise  might,  which can result in a lower overall return to investors
and adversely affect the ultimate viability of the affected portfolio companies.

Because we may invest in the same  portfolio  companies as these  funds,  we are
subject to these risks if these funds  demand a return on their  investments  in
the portfolio  companies.  We believe that our flexibility to take a longer-term
view should  help us to maximize  returns on our  invested  capital  while still
meeting the needs of our portfolio companies.

Established Deal Sourcing Network - We believe that,  through our management and
directors,  we have solid contacts and sources from which to generate investment
opportunities. These contacts and sources include:

o    public and private companies,
o    investment bankers,
o    attorneys,
o    accountants,
o    consultants, and
o    commercial bankers.

However,  we  cannot  assure  you  that  such  relationships  will  lead  to the
origination of debt or other investments.

INVESTMENT CRITERIA

As a matter of policy,  we will not purchase or sell real estate or interests in
real estate or real estate investment trusts except that we may:

o    purchase  and sell real estate or  interests  in real estate in  connection
     with  the  orderly  liquidation  of  investments,  or  in  connection  with
     foreclosure on collateral;
o    own the securities of companies that are in the business of buying, selling
     or developing real estate; or
o    finance the purchase of real estate by our portfolio companies.

We will limit our  investments in more  traditional  securities  (stock and debt
instruments) and will not, as a matter of policy:

o    sell securities  short except with regard to managing the risks  associated
     with publicly-traded securities issued by our portfolio companies;

o    purchase  securities  on margin  (except to the extent that we may purchase
     securities with borrowed money); or

o    engage in the  purchase  or sale of  commodities  or  commodity  contracts,
     including   futures   contracts  except  where  necessary  in  working  out
     distressed loans; or in those investment situations where hedging the risks
     associated with interest rate  fluctuations  is  appropriate,  and, in such
     cases,   only  after  all  necessary   registrations   or  exemptions  from
     registration  with the  Commodity  Futures  Trading  Commission  have  been
     obtained.


                                       38
<PAGE>

Prospective  Portfolio  Company  Characteristics  - We have  identified  several
criteria  that we  believe  will  prove  important  in  seeking  our  investment
objective with respect to target companies.  These criteria will provide general
guidelines for our investment  decisions;  however,  we caution readers that not
all of these criteria will be met by each prospective portfolio company in which
we choose to invest.

Experienced  Management - We will generally require that our portfolio companies
have an  experienced  president  or  management  team.  We will also require the
portfolio  companies to have in place proper  incentives to induce management to
succeed and to act in concert with our interests as investors,  including having
significant  equity  interests.  We intend to  provide  assistance  in this area
either  supervising   management  or  providing  management  for  our  portfolio
companies.

Products or Services - We will seek  companies  that are involved in products or
services  that  do  not  require  significant  additional  capital  or  research
expenditures. In general, we will seek target companies that make innovative use
of proven technologies or methods.

Proprietary  Advantage - We expect to favor companies that can demonstrate  some
kind of proprietary  sustainable  advantage  with respect to their  competition.
Proprietary advantages include, but are not limited to:

o patents or trade secrets with respect to owning or manufacturing its products,
and o a demonstrable and sustainable marketing advantage over its competition.

Marketing  strategies  impose unusual  burdens on management to be  continuously
ahead of its competition, either through some kind of technological advantage or
by being continuously more creative than its competition.

Profitable or Nearly Profitable  Operations Based on Cash Flow from Operations -
We will focus on target companies that are profitable or nearly profitable on an
operating cash flow basis.  Typically, we would not expect to invest in start-up
companies unless there is a clear exit strategy in place.

Potential  for Future  Growth - We will  generally  require  that a  prospective
target  company,  in addition to  generating  sufficient  cash flow to cover its
operating  costs and service its debt,  demonstrate  an ability to increase  its
revenues and operating  cash flow over time.  The  anticipated  growth rate of a
prospective target company will be a key factor in determining the value that we
ascribe  to any  warrants  or other  equity  securities  that we may  acquire in
connection with an investment in debt securities.

Exit Strategy - Prior to making an investment  in a portfolio  company,  we will
analyze the  potential  for that company to increase the liquidity of its common
equity through a future event that would enable us to realize  appreciation,  if
any, in the value of our equity interest. Liquidity events may include:

o    an initial public offering,
o    a private sale of our equity interest to a third party,


                                       39
<PAGE>

o    a merger or an acquisition of the portfolio company, or
o    a purchase of our equity  position by the  portfolio  company or one of its
     stockholders.

We may  acquire  warrants  to  purchase  equity  securities  and/or  convertible
preferred stock of the eligible portfolio companies in connection with providing
financing.  The terms of the warrants,  including the expiration date,  exercise
price and terms of the equity  security for which the warrant may be  exercised,
will be negotiated  individually with each eligible portfolio company,  and will
likely be affected by the price and terms of  securities  issued by the eligible
portfolio company to other venture  capitalists and other holders. We anticipate
that most  warrants  will be for a term of five to ten  years,  and will have an
exercise price based upon the price at which the eligible portfolio company most
recently issued its equity  securities or, if a new equity offering is imminent,
the price at which  such new  equity  securities  will be  offered.  The  equity
securities  for which the warrant  will be  exercised  generally  will be common
stock of which there may be one or more classes or convertible  preferred stock.
Substantially  all  the  warrants  and  underlying  equity  securities  will  be
restricted  securities  under the 1933 Act at the time of the issuance.  We will
generally negotiate for registration rights with the issuer that may provide:

o    "piggyback"  registration  rights,  which  will  permit  us  under  certain
     circumstances,  to include some or all of the  securities  owned by us in a
     registration statement filed by the eligible portfolio company, or
o    in circumstances,  "demand" registration rights permitting us under certain
     circumstances,  to require the eligible  portfolio  company to register the
     securities  under  the 1933  Act,  in some  cases at our  expense.  We will
     generally  negotiate net issuance  provisions  in the warrants,  which will
     allow us to receive  upon  exercise of the warrant  without  payment of any
     cash a net amount of shares  determined by the increase in the value of the
     issuer's stock above the exercise price stated in the warrant.

Liquidation  Value of  Assets -  Although  we do not  intend  to  operate  as an
asset-based  lender,  the prospective  liquidation  value of the assets, if any,
collateralizing  any debt securities that we hold will be an important factor in
our credit analysis. We will emphasize both tangible assets, such as:

o    accounts receivable,
o    inventory, and
o    equipment,

and intangible assets, such as:

o    intellectual property,
o    customer lists,
o    networks, and
o    databases.

INVESTMENT PROCESS

Due  Diligence  -  If a  target  company  generally  meets  the  characteristics
described above, we will perform initial due diligence, including:


                                       40
<PAGE>

o    company and technology assessments,
o    evaluation of existing management team,
o    market analysis,
o    competitive analysis,
o    evaluation of management, risk analysis and transaction size,
o    pricing, and
o    structure analysis.

Much of this  work will be done by  management  and  professionals  who are well
known by management.  The criteria  delineated above provide general  parameters
for our  investment  decisions.  We intend to pursue an  investment  strategy by
further  imposing  such  criteria and reviews that best insures the value of our
investments.  As unique circumstances may arise or be uncovered, not all of such
criteria will be followed in each instance but the process  provides a guideline
by  which  investments  can be  prudently  made  and  managed.  Upon  successful
completion of the  preliminary  evaluation,  we will decide whether to deliver a
non-binding  letter of intent  and move  forward  towards  the  completion  of a
transaction.

In our review of the management team, we look at the following:

o    Interviews  with  management and  significant  shareholders,  including any
     financial or strategic sponsor;
o    Review of financing history;
o    Review of management's track record with respect to:
          o    product development and marketing,
          o    mergers and acquisitions,
          o    alliances,
          o    collaborations,
          o    research  and   development   outsourcing   and  other  strategic
               activities;
o    Assessment of competition; and
o    Review of exit strategies.

In our review of the financial conditions, we look at the following:

o    Evaluation of future financing needs and plans;
o    Detailed analysis of financial performance;
o    Development of pro forma financial projections; and
o    Review of assets and liabilities, including contingent liabilities, if any,
     and legal and regulatory risks.

In our review of the products and services of the portfolio company,  we look at
the following:

o    Evaluation of intellectual property position;
o    Review of existing customer or similar agreements and arrangements;
o    Analysis of core technology;
o    Assessment of collaborations;


                                       41
<PAGE>

o    Review of sales and  marketing  procedures;  and
o    Assessment of market and growth potential.

Upon  completion  of these  analyses,  we will conduct  on-site  visits with the
target company's management team. Also, in cases in which a target company is at
a mature  stage  of  development  and if  other  matters  that  warrant  such an
evaluation, we will obtain an independent appraisal of the target company.

ONGOING RELATIONSHIPS WITH PORTFOLIO COMPANIES

Monitoring - We will  continuously  monitor our portfolio  companies in order to
determine  whether they are meeting our financing  criteria and their respective
business  plans.  We may decline to make  additional  investments  in  portfolio
companies that do not continue to meet our financing  criteria.  However, we may
choose to make additional  investments in portfolio companies that do not do so,
but we believe that they will nevertheless perform well in the future.

We will monitor the  financial  trends of each  portfolio  company to assess the
appropriate  course of action for each company and to evaluate overall portfolio
quality. Our management team and consulting professionals, who are well known by
our management  team,  will closely  monitor the status and  performance of each
individual company on at least a quarterly and, in some cases, a monthly basis.

We will use several  methods of evaluating and monitoring  the  performance  and
fair value of our debt and equity  positions,  including  but not limited to the
following:

o    Assessment of business development success,  including product development,
     financings,  profitability and the portfolio company's overall adherence to
     its business plan;
o    Periodic and regular contact with portfolio  company  management to discuss
     financial position, requirements and accomplishments;
o    Periodic  and regular  formal  update  interviews  with  portfolio  company
     management and, if appropriate, the financial or strategic sponsor;
o    Attendance at and participation in board meetings;
o    Review  of  monthly  and  quarterly  financial   statements  and  financial
     projections for portfolio companies.

Managerial Assistance - As a business development company, we will offer, and in
many cases may  provide,  significant  managerial  assistance  to our  portfolio
companies. This assistance will typically involve:

o    monitoring the operations of our portfolio companies,
o    participating in their board and management meetings,
o    consulting with and advising their officers, and
o    providing other organizational and financial guidance.


                                       42
<PAGE>

INVESTMENT AMOUNTS

The  amount  of  funds  committed  to a  portfolio  company  and  the  ownership
percentage  received  will  vary  depending  on the  maturity  of the  portfolio
company,  the quality and  completeness  of the portfolio  company's  management
team,  the perceived  business  opportunity,  the capital  required  compared to
existing capital,  and the potential return.  Although  investment  amounts will
vary considerably,  we expect that the average  investment,  including follow-on
investments, will be between $25,000 and $1,000,000.

COMPETITION

Our primary  competitors to provide  financing to target  companies will include
private  equity and venture  capital funds,  other equity and  non-equity  based
investment funds and investment banks and other sources of financing,  including
traditional  financial services companies such as commercial banks and specialty
finance companies.  Many of these entities have substantially  greater financial
and  managerial  resources  than we will have.  We believe that our  competitive
advantage  with  regard to quality  target  companies  relates to our ability to
negotiate  flexible  terms and to complete our review process on a timely basis.
We cannot assure you that we will be successful in implementing our strategies.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations section discusses our condensed financial statements, which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States  of  America.   The  preparation  of  these  condensed  financial
statements  requires  us to make  estimates  and  assumptions  that  affect  the
reported  amounts  of  assets  and  liabilities  at the  date  of the  condensed
financial  statements and the reported  amounts of revenues and expenses  during
the reporting periods.  On an on-going basis, we will evaluate our estimates and
judgments,  including  those  related  to  revenue  recognition,   valuation  of
investments in portfolio  companies,  accrued  expenses,  financing  operations,
contingencies  and  litigation.  We will base our  estimates  and  judgments  on
historical  experience  and on various  other  factors  that are  believed to be
reasonable  under the  circumstances,  the  results  of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily  apparent  from other  sources.  Actual  results  may differ  from these
estimates  under  different  assumptions  or  conditions.  The most  significant
accounting  estimates  inherent in the  preparation of our financial  statements
include  estimates as to the  appropriate  carrying  value of certain assets and
liabilities  which are not  readily  apparent  from other  sources,  such as the
investments in portfolio companies.


RESULTS OF OPERATIONS

Year ended December 31, 2006 as compared to the year ended December 31, 2005 -

We filed a  notification  on Form  N54a with the SEC to elect to become a BDC on
February  14,  2006.  Prior to that time we  operated  as a business  consulting
company.

As of  December  31,  2006,  we  have  not  established  any  revenue  from  our
investments in portfolio companies. We realized $40,000 in consulting revenue in


                                       43
<PAGE>

2006 before we began operating as a BDC. We had $310,215 in consulting income in
2005. The decline in revenue is primarily due to our change in business.

During 2006, we had total  expenses of $52,716 after  becoming a BDC and $46,376
before  becoming a BDC, a total of  $99,092.  In 2005,  we had net  expenses  of
$251,702 or $152,610 more than in 2006. The decline in expenses is primarily the
result of eliminating the $96,000 consulting expense for 2005.

We sold  investments  in 2005 for $15,600 and recognized a gain of $8,100 before
we  became a  business  development  company.  This  amount is  included  in net
expenses since it occurred before we became a BDC.

Income  tax  expense  attributed  to  operations  amounted  to ($380) in 2006 as
compared to $12,371 in 2005. The 2006 tax expense  included an  under-accrual of
$10,605 from 2005 relating to a change in the effective rate which resulted from
our being a member of a controlled group for Federal income tax purposes.

We  recognized  unrealized  depreciation  of  $46,512  from our  investments  in
portfolio  companies  in 2006.  We recorded a valuation  allowance  equal to the
expected  deferred tax benefit  from the  unrealized  loss.  We used a different
accounting method in 2005.

Year ended December 31, 2005 as compared to the year ended December 31, 2004 -

We  realized  $310,215  in  consulting  revenue  in  2005  and had  $479,210  in
consulting income in 2004. Our consulting  revenue  fluctuated  primarily due to
the size of  contracts  we  obtained  and the  number of  contracts.  Generally,
expenses tended to fluctuate at similar rates.

During  2005,  we had total  expenses of $251,702 and in 2004 we had expenses of
$460,998 or $209,296 more than in 2005. The decline in expenses is primarily the
result of lower  revenues  which  corresponded  to a  reduction  of  $42,390  in
consulting  expense, a reduction of $85,818 in professional fees and a reduction
of $87,228 in other general and administrative expenses.

We sold  investments in 2005 and 2004 and recognized a gain of $8,100 and a loss
of $875,  respectively,  before we became a business development  company.  This
amount is included in net expenses since it occurred before we became a BDC.

Income  tax  expense  attributed  to  operations  amounted  to 12,371 in 2005 as
compared to $3,451 in 2004. Our net income before income taxes was $40,311 lower
in 2004 than in 2005.


LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2006, we had total assets of $42,423 as compared to total assets
of $131,198 at December 31, 2005.  During 2006, cash decreased $55,313 to $5,066
and investments decreased $45,512 from $66,112 to $20,600,  which represents the
majority of the decline in total assets of $88,775.


                                       44
<PAGE>

Liabilities have increased  $16,449 during 2006 from $11,353 at year-end 2005 to
$27,802 as of  December  31,  2006;  this change is the result of our paying the
federal income taxes payable balance at December 31, 2005, and borrowing $25,000
from Shocker during 2006.

Accordingly, net assets decreased from $119,845 to $14,621 during the year ended
December  31, 2006.  The  decrease in net assets is  primarily  due to operating
losses of $58,712 and an increase in unrealized  depreciation  of investments in
the amount of $46,512 during the year ended December 31, 2006.

NET ASSET VALUE

As a Business Development Company, certain of our activities and disclosures are
made in reference to Net Asset Value which is the value of our portfolio  assets
less debt and preferred stock.  This may be viewed,  simply and generalized,  as
the  value  of our  assets  to our  common  shareholders.  As of the date of the
financial  information  in this  report,  the value of our  portfolio  of assets
including investments in equity securities,  receivables and cash is $41,423 and
from this, are subtracted  liabilities and debts of $27,802. There are no shares
of preferred stock outstanding but the rights of preferred stockholders would be
included if there were. The Net Asset Value is therefore $13,621.  The Net Asset
Value per Share is $.0014.


OFF BALANCE SHEET ARRANGEMENTS

     o    None.


CONTRACTUAL OBLIGATIONS

     o    None.












                                       45
<PAGE>

ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates and
prices.  We are  primarily  exposed to equity  price risk.  The  following  is a
discussion of our equity market risk.

Equity price risk arises from exposure to securities that represent an ownership
interest in our portfolio companies.  The value of our equity securities and our
other  investments  are based on quoted market prices or our Board of Directors'
good faith determination of their fair value (which is based, in part, on quoted
market  prices).  Market prices of common  equity  securities,  in general,  are
subject to  fluctuations,  which could cause the amount to be realized upon sale
or exercise of the instruments to differ significantly from the current reported
value.  The  fluctuations  may result from  perceived  changes in the underlying
economic  characteristics  of our  portfolio  companies,  the relative  price of
alternative  investments,  general  market  conditions  and  supply  and  demand
imbalances for a particular security.


Basis of presentation

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  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.















                                       46
<PAGE>

ITEM 8:   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                              INTERIM CAPITAL CORP.

                                TABLE OF CONTENTS



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM....................48

STATEMENTS OF NET ASSETS...................................................49

STATEMENTS OF OPERATIONS...................................................50

STATEMENTS OF CASH FLOWS...................................................51

STATEMENTS OF CHANGES IN NET ASSETS........................................52

SCHEDULE OF INVESTMENTS....................................................53

NOTES TO FINANCIAL STATEMENTS..............................................54-61




















                                       47
<PAGE>

MOORE & ASSOCIATES, CHARTERED
ACCOUNTANTS AND ADVISORS
PCAOB REGISTERED



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Interim Capital Corp.
Las Vegas, Nevada


We have audited the  accompanying  statements  of net assets of Interim  Capital
Corp. including the schedule of investments as of December 31, 2006 and 2005 and
the related  statements of operations,  cash flows and changes in net assets for
the three years ended  December 31, 2006.  These  financial  statements  are the
responsibility  of 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 of the Public
Company Accounting Oversight Board (PCAOB). 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 financial  statements and schedules of investments referred
to above present fairly,  in all material  respects,  the financial  position of
Interim  Capital Corp. as of December 31, 2006 and 2005,  and the results of its
operations,  cash flows and  changes in net  assets  for the three  years  ended
December 31, 2006, in conformity with accounting  principles  generally accepted
in the United States of America.

Moore & Associates, Chartered


/s/ Moore & Associates, Chartered

February 14, 2007





                                       48
<PAGE>
<TABLE>
<CAPTION>

                              Interim Capital Corp.
                            Statements of Net Assets
                        As of December 31, 2006 and 2005

                                                                    2006        2005
                                                                  --------    --------
<S>                                                               <C>         <C>
ASSETS
Investments in unaffiliated portfolio companies; cost $66,112
  at both December 31, 2006 and 2005                              $ 19,600    $ 66,112
Cash and cash equivalents                                            5,066      60,379
Income tax refunds receivable                                       12,523        --
Prepaid expenses and other assets                                     --         4,707
Advance to related party                                             4,234        --
                                                                  --------    --------
  TOTAL ASSETS                                                      41,423     131,198
                                                                  --------    --------

LIABILITIES
  Advances from affiliate, non-interest bearing                     25,000        --
  Accounts payable and accrued expenses                              2,802        --
  Income taxes payable                                                --        11,353
                                                                  --------    --------
  TOTAL LIABILITIES                                                 27,802      11,353
                                                                  --------    --------
NET ASSETS                                                        $ 13,621    $119,845
                                                                  ========    ========

Commitments and contingencies

COMPOSITION OF NET ASSETS
  Common stock, $.001 par value; authorized 225,000,000 shares;
    issued and outstanding 10,505,000 shares at
    December 31, 2006 and 2005, respectively                      $ 10,505    $ 10,505
  Additional paid in capital                                        51,175      51,175
  Accumulated deficit:
    Accumulated net operating earnings (loss)                         (547)     58,165
    Net realized gain (loss) on investments                         (1,000)       --
    Net unrealized appreciation (depreciation) of investments      (46,512)       --
                                                                  --------    --------
NET ASSETS                                                        $ 13,621    $119,845
                                                                  ========    ========
NET ASSET VALUE PER SHARE                                         $ 0.0013    $ 0.0114
                                                                  ========    ========
</TABLE>

See accompanying notes to financial statements.


                                       49
<PAGE>
<TABLE>
<CAPTION>

                              Interim Capital Corp.
                            Statements of Operations
              For the Years Ended December 31, 2006, 2005 and 2004

                                                                                Prior to becoming a Business
                                                                                     Development Company
                                              February 15, to    January 1, to
                                                December 31,       February 14,
                                                    2006               2006               2005               2004
                                              ---------------    ---------------    ---------------    ---------------
<S>                                           <C>                <C>                <C>                <C>
Earnings from operations:
  Consulting income                           $          --      $        40,000    $       310,215    $       479,210
  Interest income                                        --                 --                   10               --
                                              ---------------    ---------------    ---------------    ---------------
                                                         --               40,000            310,225            479,210
Expenses:
  Consulting expense                                     --                 --               96,000            138,390
  Advertising                                            --                1,625                750                200
  Compensation and benefits                            16,310             20,424             39,673             43,142
  Professional fees                                    10,273              4,663             31,682            117,500
  Travel and entertainment                             14,600             13,971             47,966             35,099
  Transfer agent fees                                   4,256               --                5,167               --
  Loss (gain) on sale of investment                      --                 --               (8,100)               875
  Other general and administrative expenses             7,277              5,693             38,564            125,792
                                              ---------------    ---------------    ---------------    ---------------
                                                       52,716             46,376            251,702            460,998
                                              ---------------    ---------------    ---------------    ---------------
Earnings (loss) before income taxes                   (52,716)            (6,376)            58,523             18,212
Income taxes                                          (10,920)            10,540             12,371              3,451
                                              ---------------    ---------------    ---------------    ---------------
Net earnings (loss) from operations                   (41,796)           (16,916)            46,152             14,761
                                              ---------------    ---------------    ---------------    ---------------

Net realized and unrealized losses in
  unaffiliated investments:
Net realized gain (loss) on investments,
   net of income tax benefit of $0                     (1,000)              --                 --                 --
Change in unrealized depreciation of
  investments, net of deferred tax expense
   of $0 in 2006                                      (46,512)              --                 --                 --
                                              ---------------    ---------------    ---------------    ---------------
Net increase (decrease) in net assets
     from operations                          $       (89,308)   $       (16,916)   $        46,152    $        14,761
                                              ===============    ===============    ===============    ===============

Net increase (decrease) in net assets
 from operations per share:
    Basic                                     $       (0.0085)   $       (0.0016)   $        0.0044    $        0.0014
                                              ===============    ===============    ===============    ===============
    Diluted                                   $       (0.0085)   $       (0.0016)   $        0.0033    $        0.0010
                                              ===============    ===============    ===============    ===============
Weighted average shares outstanding
     Basic                                         10,505,000         10,505,000         10,505,000         10,826,000
                                              ===============    ===============    ===============    ===============
     Diluted                                       10,505,000         10,505,000         14,060,000         14,381,000
                                              ===============    ===============    ===============    ===============
</TABLE>

See accompanying notes to financial statements.


                                       50
<PAGE>
<TABLE>
<CAPTION>

                              Interim Capital Corp.
                            Statements of Cash Flows
                  Years ended December 31, 2006, 2005 and 2004

                                                                                           Prior to becoming a Business
                                                                                                Development Company
                                                         February 15, to    January 1, to
                                                           December 31,       February 14,
                                                               2006               2006               2005               2004
                                                         ---------------    ---------------    ---------------    ---------------
<S>                                                      <C>                <C>                <C>                <C>
Cash flows from operating activities:
 Net increase (decrease) in net assets from operations   $       (89,308)   $       (16,916)   $        46,152    $        14,761
 Adjustments to reconcile net increase (decrease)
   in net assets from operations to net cash
   provided by (used) in operating activities:
     Change in unrealized depreciation (appreciation)
        of investments                                            46,512               --                 --                 --
     Deferred income taxes                                       (10,613)              --                 --                 --
     Loss (gain) on sale of investments                            1,000               --               (8,100)              --
     (Increase) decrease in accounts receivable                   25,000            (25,000)              --                 --
     (Increase) decrease in other assets                             473               --               (4,707)              --
     (Increase) decrease in prepaid income taxes                  (1,910)              --                 --                 --
     (Increase) decrease in note receivable                         --                 --               11,000            (17,644)
     Increase (decrease) in accounts payable                      (4,509)             4,509               --                 --
     Increase (decrease) in accrued expenses                       2,802               --                 --                 --
     Increase (decrease) in accrued income taxes                 (21,958)            10,605              7,903              3,451
     Increase (decrease) in unearned revenue                        --                 --              (80,000)            80,000
                                                         ---------------    ---------------    ---------------    ---------------
          Net cash used in operating activities                  (52,511)           (26,802)           (27,752)            80,568
                                                         ---------------    ---------------    ---------------    ---------------

Cash flows from investing activities:
  Purchase of investments                                         (1,000)              --               (1,000)           (71,613)
  Proceeds from sale of investments                                 --                 --               15,600               --
  Collections on stock subscriptions receivable                     --                 --               40,000               --
                                                         ---------------    ---------------    ---------------    ---------------
          Net cash used by investing activities                   (1,000)              --               54,600            (71,613)
                                                         ---------------    ---------------    ---------------    ---------------

Cash flows from financing activities:
  Proceeds from sale of common stock                                --                 --                 --               64,500
  Less stock subscriptions receivable                               --                 --                 --              (40,000)
  Loan proceeds                                                   25,000               --                 --                 --
                                                         ---------------    ---------------    ---------------    ---------------
          Net cash provided by financing activities               25,000               --                 --               24,500
                                                         ---------------    ---------------    ---------------    ---------------
Net increase in cash and cash equivalents                        (28,511)           (26,802)            26,848             33,455
Cash and cash equivalents, beginning of period                    33,577             60,379             33,531                 76
                                                         ---------------    ---------------    ---------------    ---------------
Cash and cash equivalents, end of period                 $         5,066    $        33,577    $        60,379    $        33,531
                                                         ===============    ===============    ===============    ===============

Supplemental cash flow information:
  Cash paid for interest and income taxes:
    Interest                                             $          --      $          --      $          --      $          --
    Income taxes                                                  21,958               --                3,451               --
</TABLE>

See accompanying notes to financial statements.


                                       51
<PAGE>
<TABLE>
<CAPTION>

                              Interim Capital Corp.
                       Statements of Changes in Net Assets
                  Years Ended December 31, 2006, 2005 and 2004

                                                                                         Prior to becoming a Business
                                                                                              Development Company
                                                        February 15, to    January 1, to
                                                          December 31,       February 14,
                                                              2006              2006              2005             2004
                                                         --------------    --------------    --------------   --------------
<S>                                                      <C>               <C>               <C>              <C>
Changes in net assets from operations:
 Net earnings (loss) from operations                     $      (41,796)   $      (16,916)   $       46,152   $       14,761
 Net realized loss on sale of investments, net                   (1,000)             --                --               --
 Change in net unrealized appreciation
  of investments, net                                           (46,512)             --                --               --
                                                         --------------    --------------    --------------   --------------
    Net decrease in net assets from operations                  (89,308)          (16,916)           46,152           14,761
                                                         --------------    --------------    --------------   --------------

Capital stock transactions
 Common stock issued for cash                                      --                --                --             64,500
 Common stock subscriptions receivable                             --                --              40,000          (40,000)
    Net increase in net assets from stock transactions             --                --              40,000           24,500
                                                         --------------    --------------    --------------   --------------
Net increase in net assets                                      (89,308)          (16,916)           86,152           39,261
Net assets at beginning of period                               102,929           119,845            33,693           (5,568)
                                                         --------------    --------------    --------------   --------------
Net assets at end of period                              $       13,621    $      102,929    $      119,845   $       33,693
                                                         ==============    ==============    ==============   ==============
</TABLE>


See accompanying notes to financial statements.









                                       52
<PAGE>
<TABLE>
<CAPTION>

                              Interim Capital Corp.
                            Schedules of Investments
                               December 31, 2006

             Date of                                                Original    Fair       Percent
  Shares   Acquisition                                                Cost      Value     Net Assets
<S>        <C>                                                      <C>        <C>        <C>

NON-INCOME PRODUCING INVESTMENTS
 112,500   Brinkman Outdoors, Inc. - (Pink Sheets:BKOU); sporting   $    112   $  2,250       16.52%
             and athletic goods
   1,000   Chanticleer Holdings, Inc. (OTCBB:CEEH); business           1,000      1,100        8.08%
             development company
  65,000   Saguaro Holdings Corp. (Pink Sheets:SGUJ); oil and gas     65,000     16,250      119.30%
             remediation and treatment
                                                                    --------   --------   ----------
             Total investments at December 31, 2006                 $ 66,112   $ 19,600      143.90%
                                                                    ========
             Cash and other assets, less liabilities                             (5,979)     -43.90%
                                                                               --------   ----------
             Net assets at December 31, 2006                                   $ 13,621      100.00%
                                                                               ========   ==========
</TABLE>



See accompanying notes to financial statements.















                                       53
<PAGE>

                              INTERIM CAPITAL CORP.
                          NOTES TO FINANCIAL STATEMENTS

1.   GENERAL ORGANIZATION AND BUSINESS

Interim Capital Corp. (the Company) was incorporated under the laws of the state
of Nevada on  November  12,  2002.  The  Company  was formed to assist  emerging
companies in capital formation.

Beginning February 15, 2006, the accompanying  financial  statements reflect the
separate  accounts  of  Interim  Capital  Corp.,  and  the  related  results  of
operations.  In accordance with Article 6 of Regulation S-X under the Securities
Act of  1933  and  Securities  Exchange  Act  of  1934,  the  Company  does  not
consolidate portfolio company investments in which the Company has a controlling
interest.

Prior to February 15, 2006, the accompanying  financial  statements included the
accounts  of the  Company  presented  as an  operating  company.  The  board  of
directors  of the  Company  valued the  securities  which the  Company  owned on
February 15, 2006,  at their cost,  which was equal to their market value at the
time.   Accordingly,   there  was  no  cumulative  effect   recognition  in  the
accompanying financial statements upon becoming an investment company.

Although  the nature of the  Company's  operations  and its  reported  financial
position,  results  of  operations,  and its cash flows are  dissimilar  for the
periods  prior to and  subsequent  to its becoming an  investment  company,  its
financial  position  for the  years  ended  December  31,  2006 and 2005 and its
operating  results,  cash flows and  changes in net assets for each of the years
ended  December  31, 2006  (separated  as  indicated  above),  2005 and 2004 are
presented  in the  accompanying  financial  statements  pursuant to Article 6 of
Regulation S-X. In addition, the accompanying  footnotes,  although different in
nature as to the required disclosures and information reported therein, are also
presented as they relate to each of the above referenced periods.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Accounting Basis
The basis is accounting  principles  generally  accepted in the United States of
America.

Conversion to a Business Development Company
The operating  results for the period from February 15, 2006,  through  December
31, 2006,  reflect the Company's  results as a BDC under the Investment  Company
Act of 1940, as amended,  whereas the operating  results for the two years ended
December 31, 2005 and 2004, and the period from January 1, 2006 through February
14, 2006,  reflect the  Company's  results prior to operating as a BDC under the
Investment  Company Act of 1940, as amended.  Accounting  principles used in the
preparation of the financial statements for these two periods are different, and
therefore,  the results of operations are not directly  comparable.  The primary
differences in accounting principles relate to the carrying value of investments
- see corresponding sections below for further discussions.

On February 15, 2006,  the date the Company began  operating as a BDC, the board
of directors of the Company  determined  the fair value of its  investments  was


                                       54
<PAGE>

equal  to  the  original  cost.  Accordingly,  there  was no  cumulative  effect
recognition in the accompanying financial statements upon becoming an investment
company.

Net Increase (Decrease) in Net Assets from Operations Per Share
The  net  increase  (decrease)  in net  assets  from  operations  per  share  is
calculated  by dividing the Company's  net earnings  (loss)  available to common
shareholders by the weighted  average number of common shares during the period.
The diluted  earnings  (loss) per share is  calculated by dividing the Company's
net earnings (loss)  available to common  shareholders  by the diluted  weighted
average number of shares  outstanding  during the period.  The diluted  weighted
average  number of shares  outstanding  is the basic  weighted  number of shares
adjusted each period for any potentially dilutive debt or equity

On January 1, 2004 the Company issued 3,555,000 options to purchase common stock
at $0.001 per share. These options are considered non-compensatory.  The options
were not exercised by the end of their term on December 31, 2006 and expired.

Income Taxes
The  Company  has  not  elected  to  be a  regulated  investment  company  under
Subchapter M of the Internal Revenue Code of 1986, as amended.  Accordingly, the
Company will be subject to U.S. federal income taxes on sales of investments for
which the fair values are in excess of their tax basis (Note 5).

Income  taxes  are  accounted  for  using an asset and  liability  approach  for
financial reporting.  The Company recognizes deferred tax liabilities and assets
for the expected future tax  consequences of temporary  differences  between the
financial  statement carrying amount and the tax basis of assets and liabilities
and net operating loss and tax credit carry forwards.  Valuation  allowances are
established when necessary to reduce deferred tax assets to the amounts expected
to be realized.

Advertising
Advertising is expensed when incurred.  Advertising  expense was $1,625 and $750
for the years ended December 31, 2006 and 2005, respectively.

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and 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 could differ from those estimates.

Revenue Recognition (Prior to becoming a Business Development Company)
Revenue  for  consulting  is  recorded  when  earned.  Revenue  from  investment
securities sold is recognized when the securities are sold.


                                       55
<PAGE>

Cash and Cash Equivalents
For purposes of the statements of cash flows,  the Company  considers all highly
liquid  investments  purchased with an original maturity date of three months or
less to be cash equivalents. None of the Company's cash is restricted.

Valuation of Investments (As a Business Development Company)
As a BDC  under  the  Investment  Company  Act of  1940,  all  of the  Company's
investments  must be carried  at market  value or fair  value as  determined  by
management for investments which do not have readily determinable market values.
Prior to this conversion, only marketable debt and equity securities and certain
derivative securities were required to be carried at market value.

Beginning  February  15,  2006,  portfolio  assets for which  market  prices are
available  are  valued  at  those  prices.  Securities  that are  traded  in the
over-the-counter  market or on a stock exchange  generally will be valued at the
prevailing  bid  price  on  the  valuation  date.   However,   potential  future
investments  by  the  Company  may  be  acquired  through  privately  negotiated
transactions and,  therefore,  have no readily  determinable market values, thus
these  securities would be carried at fair value as determined by management and
outside professionals as necessary under the Company's valuation policy.

Currently,  the  valuation  policy  provides  for  management's  review  of  the
management  team,  financial  conditions,  and  products  and  services  of  the
portfolio company. In situations that warrant such an evaluation, an independent
business valuation may be obtained.

Value,  as defined in Section  2(a)(41) of 1940 Act, is (i) the market price for
those securities for which a market quotation is readily  available and (ii) for
all other  securities  and assets,  fair value is as determined in good faith by
management.  There is no single  standard  for  determining  fair  value in good
faith. As a result,  determining fair value requires that judgment be applied to
the specific facts and circumstances of each portfolio  investment.  The Company
must  determine  the fair value of each  individual  investment  on a  quarterly
basis.  The Company will record  unrealized  depreciation on investments when it
believes that an investment has become impaired,  including where realization of
an equity security is doubtful.  Conversely,  the Company will record unrealized
appreciation if the Company believes that the underlying  portfolio  company has
appreciated in value and,  therefore,  its  investment  has also  appreciated in
value, where appropriate.

As a BDC, the Company invests primarily in illiquid securities  including equity
securities  of private  companies.  The  structure  of each  equity  security is
specifically  negotiated  to enable the  Company to protect its  investment  and
maximize  its  returns.  The Company  generally  includes  many terms  governing
ownership  parameters,  dilution  parameters,  liquidation  preferences,  voting
rights, and put or call rights. The Company's  investments are generally subject
to some restrictions on resale and generally have no established trading market.
Because of the type of investments  that the Company makes and the nature of its
business,  the  Company's  valuation  process  requires  an  analysis of various
factors. The Company's fair value methodology includes the examination of, among
other things, the underlying  investment  performance,  financial  condition and
market changing events that impact valuation.


                                       56
<PAGE>

Comprehensive Income
SFAS  No.  130,  Reporting  Comprehensive  Income,   establishes  standards  for
reporting  and display of  comprehensive  income and its  components  (revenues,
expenses,  gains,  and  losses)  in a  full  set  of  general-purpose  financial
statements.  It requires that all items that are required to be recognized under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial  statements.  SFAS No. 130 requires  that an  enterprise  (a) classify
items of other comprehensive  income by their nature in financial statements and
(b) display the accumulated balance of other comprehensive  income separately in
the equity section of the balance sheet for all periods presented. The Company's
comprehensive income (loss) does not differ from its reported net income (loss).

As a BDC, the Company must report  changes in the fair value of its  investments
outside of its operating  income on its statement of operations  and reflect the
accumulated appreciation or depreciation in the fair value of its investments as
a separate component of its stockholders'  equity.  This treatment is similar to
the treatment required by SFAS No. 130.

Reclassifications
Certain  reclassifications  have been made to the 2005  balances to conform with
the 2006 financial statement presentation.

Recent Accounting Pronouncements

In February 2006, the FASB issued SFAS No. 155,  "Accounting  for Certain Hybrid
Financial  Instruments  - an amendment of FASB  Statements  No. 133 and 140", to
simplify  and  make  more  consistent  the  accounting  for  certain   financial
instruments.  SFAS No. 155  amends  SFAS No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities", to permit fair value re-measurement for any
hybrid  financial  instrument  with an embedded  derivative that otherwise would
require  bifurcation,  provided that the whole  instrument is accounted for on a
fair  value  basis.  SFAS No.  155  amends  SFAS No.  140,  "Accounting  for the
Impairment   or  Disposal  of   Long-Lived   Assets",   to  allow  a  qualifying
special-purpose  entity to hold a derivative  financial instrument that pertains
to beneficial interest other than another derivative financial instrument.  SFAS
No. 155  applies  to all  financial  instruments  acquired  or issued  after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with  earlier  application  allowed.  This  standard  is not  expected to have a
significant  effect on the  Company's  future  reported  financial  position  or
results of operations.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial  Assets,  an  amendment  of FASB  Statement  No. 140,  Accounting  for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent  measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization  and impairment  requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and  servicing  liabilities  at fair value  eliminates  the necessity for
entities  that  manage the risks  inherent  in  servicing  assets and  servicing
liabilities  with  derivatives  to qualify for hedge  accounting  treatment  and
eliminates  the  characterization  of  declines in fair vale as  impairments  or
direct write-downs.  SFAS No. 156 is effective for an entity's first fiscal year


                                       57
<PAGE>

beginning  after  September  15,  2006.  The  adoption of this  statement is not
expected to have any effect on the Company's future reported  financial position
or results of operations.

In September  2006,  the FASB issued SFAS No. 157, "Fair Value  Measures".  This
Statement  defines fair value,  establishes a framework for measuring fair value
in generally  accepted  accounting  principles,  expands  disclosures about fair
value  measurements,  and applies  under other  accounting  pronouncements  that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements.  However,  the FASB anticipates that for some entities,
the  application of SFAS No. 157 will change current  practice.  SFAS No. 157 is
effective  for fiscal years  beginning  after  November 15, 2007,  which for the
Company  would be its fiscal  year  beginning  January 1, 2008.  The  Company is
currently evaluating the impact of SFAS No. 157 but does not expect that it will
have a material impact on its financial statements.

In September  2006,  the FASB issued SFAS No. 158,  "Employers'  Accounting  for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to  recognize  the over funded or under  funded  status of a defined
benefit post retirement  plant (other than a multiemployer  plan) as an asset or
liability in its statement of financial  position,  and to recognize  changes in
that funded status in the year in which the changes occur through  comprehensive
income.  SFAS No. 158 is effective  for fiscal  years ending after  December 15,
2006. The Company does not expect that the  implementation  of SFAS No. 158 will
have any impact on its financial position and results of operations.

In September  2006, the SEC issued Staff  Accounting  Bulletin  ("SAB") No. 108,
"Considering   the  Effects  of  Prior  Year   Misstatements   when  Quantifying
Misstatements  in Current Year Financial  Statements." SAB No. 108 addresses how
the effects of prior year  uncorrected  misstatements  should be considered when
quantifying  misstatements  in current year  financial  statements.  SAB No. 108
requires  companies to quantify  misstatements  using a balance sheet and income
statement   approach  and  to  evaluate   whether  either  approach  results  in
quantifying  an error that is  material in light of  relevant  quantitative  and
qualitative  factors. SAB No. 108 is effective for periods ending after November
15,  2006.  The Company does not expect that the  implementation  of SAB No. 108
will have any impact on its financial position and results of operations.


3.   STOCKHOLDERS' EQUITY

Common Stock
During the year 2002 the  Company  issued to its two  founders  1,000  shares of
stock each for services  rendered.  These shares were valued at $1.00 each for a
total of $2,000.

On October 10, 2003 the Company  purchased  from one of its  founders  his stock
(1,000 shares) for $6,000. The Founder was paid $1,000 in 2003 and the remainder
paid in 2004.

On December 31, 2005 a  shareholder  relinquished  his shares of common stock to
the  Company.  No value was  given to the  shareholder  for his  stock  (321,000
shares).  These shares have been cancelled by the transfer  agent,  reducing the
number of issued and  outstanding  shares of common  stock at December  31, 2005
from 10,826,000 to 10,505,000 shares.


                                       58
<PAGE>

Sales conducted under Regulation D
On December  31,  2004,  the Company  completed  an offering of shares of common
stock in accordance  with  Regulation D, Rule 504 of the Securities Act, and the
registration  by  qualification  of the  offering  in the State of  Nevada.  The
Company sold 3,225,000 shares of common stock,  par value $0.001,  at a price of
$0.02 per share to 38 investors,  of which 37 are  unaffiliated  shareholders of
record and one is a trust managed by the Secretary,  Jason Freeman.  Mr. Freeman
disclaims  any  beneficial  ownership  in the trust,  but does  exercise  voting
control. The 37 non-affiliated  shareholders hold 3,125,000 shares of the common
stock. The one affiliated  shareholder holds 100,000 shares of common stock. The
offering  was sold for  $64,500  in cash.  All  investors  were,  at the time of
purchase, residents of the State of Nevada or the complete offer and sale of the
security was conducted in the State of Nevada as per their guidelines.

This  offering  was made in reliance  upon an  exemption  from the  registration
provisions  of the  Securities  Act of 1933,  as  amended,  in  accordance  with
Regulation  D, Rule 504 of the Act. In  addition,  this  offering  was on a best
efforts basis.

4.   RELATED PARTY TRANSACTIONS

The  officers  and  directors  of the  Company are  involved  in other  business
activities  and  may,  in  the  future,   become   involved  in  other  business
opportunities  as they become  available,  The officers and directors may face a
conflict in selecting  between the Company and their other  business  interests.
The Company has not formulated a policy for the resolution of such conflicts.

During the year ended  December 31, 2006,  the Company  received a  non-interest
bearing advance from a company related to its principal shareholder.

5.   PROVISION FOR INCOME TAXES

The Company  provides for income taxes under  Statement of Financial  Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and  liability  approach in accounting  for income taxes.  Deferred tax
assets  and  liabilities  are  recorded  based on the  differences  between  the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse.

SFAS No. 109  requires  the  reduction  of  deferred  tax assets by a  valuation
allowance if, based on the weight of available evidence,  it is more likely than
not that some or all of the deferred  tax assets will not be  realized.  For the
years 2003 and prior, In the Company's  opinion,  it was uncertain  whether they
will generate  sufficient  taxable income in the future to fully utilize the net
deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax
asset has been recorded.

A reconciliation  of income tax expense at the statutory  federal rate of 34% to
income  tax  expense at the  Company's  effective  tax rate for the period  from
February  15,  2006 to December  31,  2006,  the period from  January 1, 2006 to
February 14, 2006, and for each of the years ended December 31, 2005 and 2004 is
as follows.


                                       59
<PAGE>
<TABLE>
<CAPTION>

                                               Feb 15, 2006        Jan. 1, 2006
                                             to Dec. 31, 2006    to Feb 15, 2006        12/31/2005          12/31/2004
                                             ----------------    ----------------    ----------------    ----------------
<S>                                          <C>                 <C>                 <C>                 <C>
Tax expense (benefit) computed at
statutory rate                               $        (34,100)   $         (2,200)   $         19,900    $          6,200
Reduction due to paying at 15% rate                      --                  --               (13,301)             (5,530)
Non-deductible expenses                                 1,400               2,000               5,772               3,900
Capital loss carryforward                                 300                --                  --                  --
Prior year underaccrual                                  --                10,600                --                  --
Increase (decrease) in valuation allowance             21,480                 140                --                (1,119)
                                             ----------------    ----------------    ----------------    ----------------

Current tax expense (benefit)                $        (10,920)   $         10,540    $         12,371    $          3,451
                                             ================    ================    ================    ================
</TABLE>


At December 31, 2006 and 2005,  significant components of the Company's deferred
tax assets (benefits) are summarized below.

                                                        12/31/2006    12/31/2005
                                                        ----------    ----------

     Deferred Tax Assets:
     Marketable securities                              $   15,800    $       --
     Less Valuation Allowance                              (15,800)           --
                                                        ----------    ----------

                                                        ----------    ----------

     Deferred Tax Liabilities                                 --              --
                                                        ----------    ----------

     Net Deferred Tax Assets                            $     --      $       --
                                                        ==========    ==========

Income tax refunds receivable at December 31, 2006, consist of the following:

     NOL carryback from 2006 to 2004                            $  3,451
     NOL carryback from 2006 to 2005                               7,162
                                                                --------
          Total NOL carrybacks                                    10,613
     Prepaid 2006 income tax                                       1,910
                                                                --------
          Income tax refunds receivable                         $ 12,523
                                                                ========


6.   OPTIONS

On January 1, 2004 the Company  issued  options to purchase  its common stock to
two of its new employees and a business trust.

     Number of shares              Option Purchase Price
     ----------------              ---------------------
     1,200,000                                    $0.001
     1,200,000                                     0.001
     1,155,000                                     0.001

These  non-compensatory  options vested 50% on July 1, 2004 and 100% on December
31, 2004. They expired on December 31, 2006.


                                       60
<PAGE>

7.       INVESTMENTS

The Company's  investments,  all of which are  unaffiliated,  as of December 31,
2006, are included in the Schedule of Investments.

Prior  to  February  15,  2006 and  becoming  a BDC,  the  Company  carried  its
investments in equity securities at cost. These shares were purchased, for cash,
in  private  transactions  . Due  to the  limited  marketability  and  extremely
volatile  prices  of  theses  thinly  traded  securities,  the  Company  felt  a
reasonable  fair market value was not readily  available.  However,  the Company
disclosed in the notes to the financial statements the potential unrealized gain
or loss based on fair market value, as determined by the most recent close price
as quoted on the balance sheet date, if available, otherwise valued at cost.

Investments  at December 31, 2006 and December 31, 2005,  may be  summarized  as
follows:

                                                          Cost       Fair Value

Balance, December 31, 2005                             $   66,112    $   66,112
Acquisition                                                 1,000         1,000
Write-off worthless investment                             (1,000)       (1,000)
Investment depreciation                                      --         (46,512)
                                                       ----------    ----------
Balance, December 31, 2006                             $   66,112    $   19,600
                                                       ==========    ==========

Investments  are valued at fair value as  determined  by the board of directors.
The values assigned to these securities are based upon available information and
may not reflect amounts that could be realized if the Company found it necessary
to immediately sell such securities, or amounts that ultimately may be realized.
Accordingly,   the  fair  values  included  in  the  accompanying  schedules  of
investments  may differ  from the  values  that would have been used had a ready
market  existed for these  securities  and such  difference  could be  material.
Elitegroup  Ventures  Nevada,  Inc. is a recent real estate  investment  with no
trading  market  that was unable to raise  sufficient  capital to  initiate  its
business plan. Accordingly,  the Company wrote off its investment of $1,000. The
three  remaining  securities were valued at their most recent posted price as of
December 31, 2006.









                                       61
<PAGE>
<TABLE>
<CAPTION>

                              INTERIM CAPITAL CORP.
                          Schedules of Financial Ratios
               Three Years Ended December 31, 2006, 2005 and 2004

                                                                                Prior to becoming an Investment Company
                                                                         ------------------------------------------------------
                                                       Period from         Period from
                                                     Feb 15, 2006 to      Jan. 1, 2006         Year Ended         Year Ended
                                                      Dec 31, 2006       to Feb 14, 2006      Dec. 31, 2005      Dec. 31, 2004
                                                     ---------------     ---------------     ---------------    ---------------
<S>                                                  <C>                 <C>                 <C>                <C>
Per share information:
Net asset value, beginning of period                 $        0.0098     $        0.0114     $        0.0032    $       (0.0005)
Net increase (decrease) from operations                      (0.0040)            (0.0016)             0.0044             0.0014
Net change in realized and unrealized appreciation
     (depreciation) on investments                           (0.0045)               --                  --                 --
Net increase (decrease) from stock transactions                 --                  --                0.0038             0.0023
                                                     ---------------     ---------------     ---------------    ---------------
Net asset value, end of period                       $        0.0013     $        0.0098     $        0.0114    $        0.0032
                                                     ===============     ===============     ===============    ===============

Per share market value:
  Beginning of period                                $        0.0200     $        0.0200     $        0.0200    $        0.0200
  End of period                                               0.0200              0.0200              0.0200             0.0200
Investment return, based on market price at end of
  period (1)                                                       0%                  0%                  0%                 0%

Ratios/supplemental data:
Net assets end of period                             $        14,621     $       102,929     $       119,845    $        33,693
Average net assets                                            59,043             111,387              76,769             14,063

Ratio of expenses to average net assets                           89%                 42%                328%              3278%
Ratio of increase (decrease) in net assets from
     operations to average net assets                           -150%                -15%                 60%               105%

Weighted average number of shares outstanding:
     Basic                                                10,505,000          10,505,000          10,505,000         10,826,000
     Diluted                                              10,505,000          10,505,000          14,060,000         14,381,000

Number of shares outstanding, end of period               10,505,000          10,505,000          10,505,000         10,826,000
</TABLE>

(1) Periods of less than one year are not annualized. There is no market for the
common stock. Accordingly,  the Company has used the price at which common stock
was last sold for all periods presented as the market value.





                                       62
<PAGE>

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

None.


ITEM 9A:  CONTROLS AND PROCEDURES

Disclosure  controls and procedures are controls and other  procedures  that are
designed  to ensure  that  information  required  to be  disclosed  by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and  communicated  to our management,  including our
principal  executive  and  financial  officer,  as  appropriate  to allow timely
decisions regarding required disclosure.

Evaluation of disclosure and controls and procedures

Based on their  evaluation of the Company's  disclosure  controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e)  under the Securities  Exchange Act
of 1934) as of the end of the  period  covered  by this  annual  report  on Form
10-KSB the Company's  chief  executive  officer has concluded that the Company's
disclosure  controls  and  procedures  are  designed to ensure that  information
required to be  disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified in the SEC's rules and forms and are operating in an
effective manner.

Changes in internal controls over financial reporting

There  were  no  changes  in the  Company's  internal  controls  over  financial
reporting or in other factors that have materially  affected,  or are reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.


ITEM 9B:  OTHER INFORMATION

None.


                                       63
<PAGE>

                                    PART III



ITEM 10:  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table includes the names,  ages and positions of our directors and
executive  officers as of December  31, 2006.  A summary of the  background  and
experience of each of these individuals immediately follows the table.

The following sets forth certain information with respect to executive officers,
directors, key employees and advisors of ICC as of December 31, 2006:

NAME                    AGE                POSITION                OFFICER SINCE
----                    ---                --------                -------------

Mark Lindberg           39            President, Director               2002
                                    Chief Financial Officer

Jason Freeman           31               Vice President                 2003
                                            Director

Mark Lindberg has been President,  Chief Financial  Officer,  a Director,  and a
stockholder of Interim  Capital Corp.  since November 2002. Mr. Lindberg is also
the  Audit  Committee  Financial  Expert  for  the  Company  although  he is not
independent.  Since  1996 he has served as an officer  and  director  of several
publicly traded companies,  many in the start-up or development  phase.  Between
1991 and 1996, he was an executive  with National  Health Care  Discount,  Inc.,
Dallas,  a direct marketer of health care and wellness  services.  An accounting
graduate of Baker University, Baldwin City, Kansas, he began his business career
as a tax specialist with the worldwide accounting firm of Deloitte and Touche.

Jason  Freeman is Vice  President  and a Director  of the  Company  and has been
instrumental  in  assisting  with  investor  relations   development,   business
plan/marketing plan development, and strategic business planning for private and
public companies.  He also has 8 years experience with Marketing & Management in
the retail industry. Mr. Freeman has also consulted with various companies, both
public and  private,  on ways to be more  efficient  in their use of capital and
manpower,  assisting  management  and  sales  staff in  mapping  out  plans  and
strategies  for companies to reach specific  goals and  thresholds.  Mr. Freeman
graduated from Texas A & M University at Commerce in 1998.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section  16(a) of the Exchange Act  requires  our  officers and  directors,  and
persons who own more than 10% of a registered class of our equity securities, to
file reports of ownership  and change in ownership  with the SEC. Our  officers,
directors and greater than 10%  stockholders  are required by SEC regulations to
furnish us with copies of all Section  16(a)  forms they file.  We believe  that
from  January  1, 2006  through  December  31,  2006,  the  filing  requirements
applicable to our officers,  directors  and greater than 10%  stockholders  were
timely met.


                                       64
<PAGE>

Our  board of  directors  has  determined  that it does not have an  independent
financial  expert on its Audit  Committee.  Due to the limited  transactions and
current  circumstances,  the board  has  determined  that it is not  financially
prudent to have an audit  committee.  Once a merger  candidate is  discovered or
operations for the Company expand,  the board will include a financial expert on
its Audit Committee.

CODE OF ETHICS

We have adopted a code of ethics for our officers and directors. We will provide
to any person without charge,  upon written request to our above address, a copy
of such code of ethics.


ITEM 11:  EXECUTIVE COMPENSATION

The following  table sets forth the cash and other  compensation  we paid during
the last three fiscal years to our chief executive officer,  president and other
individuals who served as executive  officers and whose total  compensation  was
$100,000 or more.

Name and Principal Position                      Year       Salary         Total
---------------------------                      ----       ------         -----

Mark Lindberg                                    2006     $ 25,000      $ 25,000
President, CEO, CFO and                          2005       25,000        25,000
Director                                         2004       25,000        25,000

Jason Freeman                                    2006        6,000         6,000
Vice President and Director                      2005        6,000         6,000
                                                 2004        5,000         5,000


Required columns for bonus, stock awards,  option awards,  non-entity  incentive
plan   compensation,   change  in  pension  value  and   nonqualified   deferred
compensation  earnings  and all other  compensation  are omitted  from the table
above as the amounts are all zero.

EMPLOYMENT AGREEMENTS

The Company does not have any current  employment  agreements  with its officers
and directors. The company intends to pay its Executives and Directors salaries,
wages,  or  fees  commensurate   with  experience  and  industry   standards  in
relationship to the success of the company.

     (a) Grants of plan-based awards table

There  were no  grants  of  plan-based  awards  during  the year  for the  named
individuals.


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<PAGE>

     (b) Outstanding equity awards at fiscal year-end table

There  were no  outstanding  equity  awards  at  fiscal  year-end  for the named
individuals.

     (c) Option exercises and stock vested table

There were no option  exercises  during  the year and no stock  vested at fiscal
year-end  for the named  individuals.  Mr.  Freeman had an option for  1,200,000
shares with an exercise price of $.001 which expired on December 31, 2006.

     (d) Pension benefits

There are no pension plans.

     (e)  Nonqualified  defined  contribution  and other  nonqualified  deferred
     compensation plans

There are no nonqualified  defined  contribution or other nonqualified  deferred
compensation plans.

     (f) Potential payments upon termination or changes-in-control

There are no potential payments upon termination or  changes-in-control  for the
named individuals.

     (g) Compensation of directors

Mr.  Lindberg and Mr.  Freeman are the Company's two  remaining  directors.  Ms.
Thompson was a director and  secretary of the Company until she resigned in June
2006.   Directors  are  not  separately   compensated  as  directors  and  their
compensation is included in total compensation in the table above.












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ITEM 12:  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

The following table sets forth certain  information as of December 31, 2006 with
respect to the beneficial ownership of the Company's Common Stock by all persons
known  by the  Company  to be  beneficial  owners  of more  than 5% of any  such
outstanding  classes,  and by each  director and executive  officer,  and by all
officers  and  directors  as a group.  Unless  otherwise  specified,  the  named
beneficial  owner has, to the Company's  knowledge,  sole voting and  investment
power. No beneficial owner, as defined by NASD Rule 2720(b)(2), of the Company's
Common Stock has any direct or indirect affiliation or association with any NASD
member.


Title of                                               Number of       % of
  Class      Name of Beneficial Owner (1)               Shares        Class
  -----      ----------------------------               ------        -----


Common       Mark Lindberg                                 1,000       .01%
Stock        President

Common       Shocker 200 Index, LP (3)                 7,600,000     72.35%
Stock        Attn: Jason Freeman

Common       Jason Freeman                                  --         --
Stock        Vice-President

Common       BBX Unit Investment Business Trust(2)       100,000       .95%
Stock

Common       Officers and Directors as a Group         7,701,000     73.31%
Stock        (2) persons

     1.   The address of Mark  Lindberg,  Shocker 200 Index,  LP, Jason Freeman,
          and BBX UIT is c/o Interim Capital Corp.,  3960 Howard Hughes Parkway,
          Suite 500, Las Vegas, Nevada 89109.
     2.   BBX Unit Investment Business Trust is a trust organized under the laws
          of Nevada and its  general  partner is Pecos  Financial,  LLC, a Texas
          limited  liability  company.  Jason  Freeman  is  president  of  Pecos
          Financial  and is deemed to control  the Trust for the  benefit of the
          trust  unit  holders.  Jason  Freeman  is the  sole  member  of  Pecos
          Financial, but does not personally own any interest in the BBX UIT.
     3.   Shocker 200 Index, LP is a limited  partnership  whose general partner
          is also Pecos  Financial.  Jason  Freeman is the sole  member of Pecos
          Financial  and is deemed to control  the limited  partnership  for the
          benefit  of the  limited  partners,  but does not  personally  own any
          interest in Shocker 200 Index, LP.


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<PAGE>

ITEM 13:  CERTAIN   RELATIONSHIPS   AND  RELATED   TRANSACTIONS,   AND  DIRECTOR
          INDEPENDENCE

In  lieu  of cash  consideration  for the  officers  and  directors,  we  issued
7,600,000 shares of common stock to ACL Consulting Corp, an entity controlled by
the president of the Company,  at par value $0.001,  for total  consideration of
$7,600.  ACL sold this  interest in March 2006 to Shocker 200 Index,  LP,  whose
general  partner is Pecos  Financial,  LLC.  Jason Freeman is the sole member of
Pecos Financial and is deemed to control the limited partnership for the benefit
of the limited partners, but does not personally own any interest in Shocker 200
Index, LP.


The  Company  issued  options to purchase  1,200,000  shares,  each,  to Chasity
Thompson, a former director, and Jason Freeman, at par value $0.001. The Company
also  issued  1,155,000  options  to  purchase  common  stock  to the  BBX  Unit
Investment Business Trust at par value $0.001. Jason Freeman is the President of
the trustee of the BBX UIT and Pecos  Financial,  but disclaims  any  beneficial
ownership in the trust. Mr. Freeman does have control over the sale of the UIT's
shares in the  Company.  These  options  vested  50% on July 1, 2004 and 100% on
December 31, 2004.  None of the options were  exercised by the end of their term
and expired on December 31, 2006.

During the year ended  December 31, 2006,  the Company  received a  non-interest
bearing advance from a company related to its principal shareholder.

We rent an office located at 3960 Howard Hughes Parkway, Suite 500 in Las Vegas,
Nevada and pay $200.00 a month for rent on a month to month basis.


ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees. The aggregate fees billed for professional  services rendered by our
current principal  accountants for the audit of our annual financial  statements
and review of our quarterly financial  statements through January 20, 2007, were
$1,500 and $3,500 for the years ended December 31, 2006 and 2005, respectively.

Audit-Related Fees: None

Tax Fees: The aggregate fees billed for  professional  services  rendered by our
current principal  accountants for the audit of our annual financial  statements
and review of our quarterly  financial  statements were $11,889 and $500 for the
years ended December 31, 2004 and 2003, respectively.

All Other Fees: None


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<PAGE>

                                     PART IV

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:

          1.   Financial  Statements - The  following  financial  statements  of
               Interim Capital Corp. are contained in Item 8 of this Form 10-K:
                    o    Report of Independent Registered Public Accountant
                    o    Statements of Net Assets at December 31, 2006 and 2005
                    o    Statements  of  Operations - For the fiscal years ended
                         December 31, 2006, 2005 and 2004
                    o    Statements  of Cash Flows - For the fiscal  years ended
                         December 31, 2006, 2005 and 2004
                    o    Statements  of  Changes  in Net Assets - For the fiscal
                         years ended December 31, 2006, 2005 and 2004
                    o    Schedules  of  Investments  - At December  31, 2006 and
                         2005
                    o    Notes to the Financial Statements
                    o    Financial  Highlights  - For  the  fiscal  years  ended
                         December 31, 2006, 2005 and 2004

          2.   Financial  Statement  Schedules  were  omitted,  as they  are not
               required or are not  applicable,  or the required  information is
               included in the Financial Statements.

          3.   Exhibits - The  following  exhibits are filed with this report or
               are  incorporated  herein  by  reference  to a prior  filing,  in
               accordance with Rule 12b-32 under the Securities  Exchange Act of
               1934.

Exhibit        Description
-------        -----------

Exhibit 31 -   Certificate   of  Principal   Executive   Officer  and  Principal
               Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of
               the  Securities  Exchange  Act of 1934,  as adopted  pursuant  to
               Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).


Exhibit 32 -   Certificate  of  Chief  Executive  Officer  and  Chief  Financial
               Officer  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
               to  Section  906  of  the   Sarbanes-Oxley  Act  of  2002  (filed
               herewith).


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<PAGE>

                                    SIGNATURE

Pursuant to the  requirements  of Section 3 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

DATE:    February 14, 2007                        INTERIM CAPITAL CORP.


                                                  BY: /s/ Mark Lindberg
                                                     ---------------------------
                                                     Mark Lindberg
                                                     President, CEO and CFO


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



February 14, 2007                                 /s/ Mark Lindberg
                                                  ------------------------------
                                                  Mark Lindberg, President, CEO,
                                                  CFO and Director


February 14, 2007                                 /s/ Jason Freeman
                                                  ------------------------------
                                                  Jason Freeman, Vice-President
                                                  And Director












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