----

----

|  | |                  X                  | | QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|--|-----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

|  | |__| | TRANSITION                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                  OF                  1934 |
|--|------|---------------------------------------------------------------------------------------------------------------------------------------|

*000-27225*

| Minnesota                                                                       | 41-1427445                                            |
|---------------------------------------------------------------------------------|-------------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (I.R.S.                  Employer Identification No.) |
|                                                                            |                                                  |
| 11974                  Portland Avenue, Burnsville, Minnesota                   | 55337                                                 |
| (Address                  of principal executive offices)                       | (Zip                  Code)                           |
|                                                                            |                                                  |
| Registrant's                  telephone number: (952)                  890-2362 |

| Large                  Accelerated Filer [  ] | Accelerated                  Filer [  ] | Non-Accelerated                  Filer [X] |
|----------------------------------------------------|----------------------------------------------|--------------------------------------------|

----

| PART                  I  |                                                                              |   |
|--------------------------|-----------------------------------------------------------------------------------|--------|
|                     |                                                                              |   |
| Item                  1. | Financial                  Statements                                             | 1-12   |
|                     |                                                                              |   |
| Item                  2. | Management’s                  Discussion and Analysis and Plan of Operation | 13-15  |
|                     |                                                                              |   |
| Item                  3. | Quantitative                  and Qualitative Disclosures About Market Risk       | 15     |
|                     |                                                                              |   |
| Item                  4. | Controls                  and Procedures                                          | 15-16  |
|                     |                                                                              |   |
| PART                  II |                                                                              |   |
|                     |                                                                              |   |
| Item                  1. | Legal                  Proceedings                                                | 16     |
|                     |                                                                              |   |
| Item                  1A | Risk                  Factors                                                     | 16     |
|                     |                                                                              |   |
| Item                  2. | Unregistered                  sales of Equity Securities and Use of Proceeds      | 16     |
|                     |                                                                              |   |
| Item                  3. | Defaults                  Upon Senior Securities                                  | 16     |
|                     |                                                                              |   |
| Item                  4. | Submission                  of Matters to a Vote of Security Holders              | 16     |
|                     |                                                                              |   |
| Item                  5. | Other                  Information                                                | 16     |
|                     |                                                                              |   |
| Item                  6. | Exhibits                                                                          | 17     |
|                     |                                                                              |   |

----

|                                           | Page   |
|------------------------------------------------|--------|
|                                           |   |
| Financial                  Statements:         |   |
| Balance                  Sheets                | 1      |
| Statements                  of Operations      | 2      |
| Statements                  of Cash Flows      | 3      |
| Notes                  to Financial Statements | 4-12   |

----

| **ASSETS**                                                                                                                                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                  |   | November                  30,2006(unaudited)  |   |  February                  28,2006Retrospectivelyadjusted(unaudited)  |   |
| Current                  assets:                                                                                                                                                                                                                                      |   |   |   |    |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Cash                                                                                                                                                                                                                                                                  |   | $ | 11,195 |   | $ | 17,765 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Prepaid                  expense                                                                                                                                                                                                                                      |   |   | - |   |   | 2,019 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Total                  current assets                                                                                                                                                                                                                                 |   |   | 11,195 |   |   | 19,784 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Property                  and equipment, net                                                                                                                                                                                                                          |   |   | 1,875 |   |   | 2,764 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Intangible                  assets - domain names                                                                                                                                                                                                                     |   |   | 438,161 |   |   | 217,495 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Total                  assets                                                                                                                                                                                                                                         |   | $ | 451,231 |   | $ | 240,043 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                                                     |   | $ | 37,043 |   | $ | 10,664 |   |
| Advances                  from stockholders                                                                                                                                                                                                                           |   |   | 16,354 |   |   | 798 |   |
| Accrued                  expenses:                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Accrued                  payroll                                                                                                                                                                                                                                      |   |   | 4,136 |   |   | - |   |
| Accrued                  interest                                                                                                                                                                                                                                     |   |   | 8,076 |   |   | 3,876 |   |
| Deferred                  officer salaries                                                                                                                                                                                                                            |   |   | 33,000 |   |   | - |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Total                  current liabilities                                                                                                                                                                                                                            |   |   | 98,609 |   |   | 15,338 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Notes                  payable - stockholder                                                                                                                                                                                                                          |   |   | 70,000 |   |   | 70,000 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Total                  liabilities                                                                                                                                                                                                                                    |   |   | 168,609 |   |   | 85,338 |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Commitments                  and contingencies                                                                                                                                                                                                                        |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Stockholders’                  equity:                                                                                                                                                                                                                          |   |   |  |   |   |  |   |
| Preferred                  stock, $.01 par value, 20,000,000 shares authorized, none and 20,000,000                  issued and outstanding at November 30, 2006 and February 28, 2006,                  respectively                                                 |   |   | - |   |   | 200,000 |   |
| Common                  stock, $.01 par value, 2,000,000,000 shares authorized, 25,701,500                  and                  427,572,138 shares issued and outstanding at November 30, 2006                  and                  February 28, 2006, respectively |   |   | 257,010 |   |   | 4,275,721 |   |
| Additional                  paid-in-capital                                                                                                                                                                                                                           |   |   | 14,497,584 |   |   | 5,149,389 |   |
| Subscription                  receivable                                                                                                                                                                                                                              |   |   | (2,984,720 | ) |   | (3,550,000 | ) |
| Accumulated                  deficit                                                                                                                                                                                                                                  |   |   | (11,487,252 | ) |   | (5,920,405 | ) |
| Total                  stockholders’ equity                                                                                                                                                                                                                     |   |   | 282,622 |   |   | 154,705 |   |
| Total                  liabilities and stockholders’ equity                                                                                                                                                                                                     |   | $ | 451,231 |   | $ | 240,043 |   |

----

|                                                                            |   | Three                    Months EndedNovember 30, 2006(unaudited) |       | Nine                    Months EndedNovember 30, 2006(unaudited) |   |
|---------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|------------------------------------------------------------------|--------|
|                                                                            |   |                                                              |       |                                                             |   |
| Operating                  expenses:                                            |   |                                                              |       |                                                             |   |   |   |
| Selling,                  general and administrative expenses                   |   | $                                                                 | 5,348,597  |                                                             | $      | 5,563,900 |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Loss                  from operations                                           |   |                                                              | (5,348,597 | )                                                                |   | (5,563,900 | ) |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Other                  income (expense)                                         |   |                                                              |       |                                                             |   |   |   |
| Interest                  expense                                               |   |                                                              | (1,400     | )                                                                |   | (4,200 | ) |
| Other                  income                                                   |   |                                                              | 398        |                                                             |   | 1,253 |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Total                  other income (expense)                                   |   |                                                              | (1,002     | )                                                                |   | (2,947 | ) |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Net                  loss                                                       |   | $                                                                 | (5,349,599 | )                                                                | $      | (5,566,847 | ) |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Loss                  per common share - basic and diluted                      |   | $                                                                 | (0.31      | )                                                                | $      | (0.59 | ) |
|                                                                            |   |                                                              |       |                                                             |   |   |   |
| Weighted                  average common shares outstanding - basic and diluted |   |                                                              | 17,129,533 |                                                             |   | 9,500,517 |   |
|                                                                            |   |                                                              |       |                                                             |   |   |   |

----

**BDC        Capital, Inc.**

**STATEMENT        OF CASH FLOWS**

|                                                                                                                                            |   | **Nine                  months ended****November                  30, 2006****(unaudited)** |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|------------|
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                                                          |   |                                                                                        |       |   |
| Net                  loss                                                                                                                       |   | $                                                                                           | (5,566,847 | ) |
| Adjustments                  to reconcile net loss to net cash flows from operating                  activities                                 |   |                                                                                        |       |   |
| Depreciation                                                                                                                                    |   |                                                                                        | 889        |   |
| Stock                  based compensation expense                                                                                               |   |                                                                                        | 5,149,484  |   |
| Changes                  in operating assets and liabilities:                                                                                   |   |                                                                                        |       |   |
| Prepaid                  expenses                                                                                                               |   |                                                                                        | 2,019      |   |
| Accounts                  payable                                                                                                               |   |                                                                                        | 26,379     |   |
| Accrued                  expenses:                                                                                                              |   |                                                                                        |       |   |
| Accrued                  payroll                                                                                                                |   |                                                                                        | 4,136      |   |
| Accrued                  interest                                                                                                               |   |                                                                                        | 4,200      |   |
| Deferred                  officer salaries                                                                                                      |   |                                                                                        | 33,000     |   |
|                                                                                                                                            |   |                                                                                        |       |   |
| Net                  cash used in operating activities                                                                                          |   |                                                                                        | (346,740   | ) |
|                                                                                                                                            |   |                                                                                        |       |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                                          |   |                                                                                        |       |   |
| Payments                  for intangible assets - domain names                                                                                  |   |                                                                                        | (220,666   | ) |
|                                                                                                                                            |   |                                                                                        |       |   |
| Net                  cash used in financing activities                                                                                          |   |                                                                                        | (220,666   | ) |
|                                                                                                                                            |   |                                                                                        |       |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                                          |   |                                                                                        |       |   |
| Advances                  from officer/stockholder                                                                                              |   |                                                                                        | 15,556     |   |
| Payments                  received on stockholder subscription receivable net of $20,000                  in                  transaction costs |   |                                                                                        | 545,280    |   |
|                                                                                                                                            |   |                                                                                        |       |   |
| Net                  cash provided by financing activities                                                                                      |   |                                                                                        | 560,836    |   |
|                                                                                                                                            |   |                                                                                        |            |   |
| Net                  change in cash and cash equivalents for the period                                                                         |   |                                                                                        | (6,570     | ) |
| Cash                  and cash equivalents at beginning of period                                                                               |   |                                                                                        | 17,765     |   |
| Cash                  and cash equivalents at end of period                                                                                     |   | $                                                                                           | 11,195     |   |
|                                                                                                                                            |   |                                                                                        |            |   |
| SUPPLEMENTAL                  DISCLOSURES OF CASH FLOW INFORMATION:                                                                             |   |                                                                                        |       |   |
| Cash                  payments for interest                                                                                                     |   | $                                                                                           | -          |   |

----

**BDC        Capital, Inc.**

**Note        1. Nature of Business and Summary of Significant Accounting        Policies**

*Nature        of business*

*Basis        of presentation*

----

*Principles        of Consolidation*

*Use        of estimates*

*Cash        and cash equivalents*

*Long-Lived        Assets*

----

*Income        taxes*

*Stock-based        compensation *

----

|                                              |   | Number                  ofoptions |      | Weighted                  average exercise                  price |   | Aggregate                  intrinsic                  value |   | Weighted                  average remaining contractual term (years) |    |
|---------------------------------------------------|--------|-----------------------------------|-----------|-------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|----------------------------------------------------------------------|---------|
| Outstanding                  at February 28, 2006 |   |                              | -         |                                                              |   | -                                                           |   |                                                                 |    |   |   |   |   |
| Granted                  - October 2006           |   |                              | 3,125,000 |                                                              | $      | 1.725                                                       |   |                                                                 |    |   |   | 4.75 |   |
| Exercised                                         |   |                              | -         |                                                              |   | -                                                           |   |                                                                 |    |   |   |   |   |
| Forfeited                  or expired             |   |                              | -         |                                                              |   | -                                                           |   |                                                                 |    |   |   |   |   |
| Outstanding                  at November 30, 2006 |   |                              | 3,125,000 |                                                              | $      | 1.725                                                       |   | $                                                                    | 859,375 |   |   | 4.75 |   |
| Exercisable                  at November 30, 2006 |   |                              | 2,990,000 |                                                              | $      | 1.725                                                       |   | $                                                                    | 822,250 |   |   | 4.75 |   |

*Net        loss per share*

*Recently        issued accounting pronouncements*

----

**Note        2. **
**Withdrawal        of Election to be regulated as a Business Development        Company**
*** ***

| Adjust                  investment in BDC Partners, Inc. from fair value to historical                  cost                  values |   | $      | (607,597 | ) |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|---|
| Accumulated                  deficit from BDC Partners, Inc.                                                                         |   |   | (189,459 | ) |
| Net                  adjustment                                                                                                      |   | $      | (797,056 | ) |

**Note        3. Property and Equipment**

|                                            |   | **2006** |     |
|-------------------------------------------------|--------|----------|----------|
| Office                  equipment and furniture |   | $        | 473,219  |   |
| Less                  accumulated depreciation  |   |     | (456,706 | ) |
| Less                  impairment of equipment   |   |     | (14,638  | ) |
|                                            |   | $        | 1,875    |   |

**Note        4. Intangible Assets - domain names**

**Note        5. Debt Financing**

**Note        6. Notes payable - stockholder**

----

**Note        7. Stockholders Equity**

**Note        8. Related Party Transactions**

**Note        9. Commitments and Contingencies**

**Note        10. **
**Prior        Period Financial Statement Presentation**

|   | · | Balance                  Sheet as of February 28, 2006 |
|--------|--------|--------------------------------------------------------|

|   | · | Statement                  of Operations for the three and nine months ended November 30,                  2005 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Statement                  of Cash Flows for the nine months ended November 30,                  2005 |
|--------|--------|-------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                        |   | As                  a Business Development Company |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                                                        |   | 2006                                               |       |
| Current                  assets:                                                                                                                            |   |                                               |       |   |
| Cash                                                                                                                                                        |   | $                                                  | 15,346     |   |
| Prepaid                  expense                                                                                                                            |   |                                               | 2,019      |   |
| Total                  current assets                                                                                                                       |   |                                               | 17,365     |   |
| Property                  and equipment, net                                                                                                                |   |                                               | -          |   |
| Investment                  in securities, at fair value (cost of $406,303)                                                                                 |   |                                               | 1,013,900  |   |
| Total                  assets                                                                                                                               |   | $                                                  | 1,031,265  |   |
|                                                                                                                                                        |   |                                               |       |   |
| Current                  liabilities:                                                                                                                       |   |                                               |       |   |
| Accounts                  payable                                                                                                                           |   | $                                                  | 4,420      |   |
| Advance                  from stockholder                                                                                                                   |   |                                               | 798        |   |
| Accrued                  liabilities                                                                                                                        |   |                                               | 3,876      |   |
| Due                  to BDC Partners, Inc.                                                                                                                  |   |                                               | 410        |   |
|                                                                                                                                                        |   |                                               |       |   |
| Total                  current liabilities                                                                                                                  |   |                                               | 9,504      |   |
|                                                                                                                                                        |   |                                               |       |   |
| Notes                  payable - related party                                                                                                              |   |                                               | 70,000     |   |
|                                                                                                                                                        |   |                                               |       |   |
| Total                  liabilities                                                                                                                          |   |                                               | 79,504     |   |
|                                                                                                                                                        |   |                                               |       |   |
| Commitments                  and contingencies                                                                                                              |   |                                               |       |   |
|                                                                                                                                                        |   |                                               |       |   |
| Stockholders’                  equity:                                                                                                                |   |                                               |            |   |
| Preferred                  stock, $.01 par value, 20,000,000 shares authorized, 20,000,000                  issued and                  outstanding         |   |                                               | 200,000    |   |
| Common                  stock, $.01 par value, 2,000,000,000 shares authorized, 427,572,138                  shares                  issued and outstanding |   |                                               | 4,275,721  |   |
| Additional                  paid-in-capital                                                                                                                 |   |                                               | 5,149,389  |   |
| Subscription                  receivable                                                                                                                    |   |                                               | (3,550,000 | ) |
| Accumulated                  deficit                                                                                                                        |   |                                               | (5,123,349 | ) |
|  Total                  stockholders’ equity                                                                                                     |   |                                               | 951,761    |   |
|  Total                  liabilities and stockholders’ equity                                                                                     |   | $                                                  | 1,031,265  |   |

----

|                                                                                                                                                                           |   | As                  a Business Development Company                  |     | As                  a Business Development Company                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|----------|--------------------------------------------------------------------|--------|
|                                                                                                                                                                           |   | Three                  monthsendedNovember                  30,2005 |     | Nine                  monthsendedNovember                  30,2005 |   |
| **Investment                  income**                                                                                                                                         |   | $                                                                   | 2        |                                                               | $      | 821 |   |
|                                                                                                                                                                           |   |                                                                |          |                                                               |   |   |   |
| **Operating                  Expenses:**                                                                                                                                       |   |                                                                |          |                                                               |   |   |   |
| Professional                  fees                                                                                                                                             |   |                                                                | 11,045   |                                                               |   | 73,687 |   |
| Administrative                  expenses                                                                                                                                       |   |                                                                | 47,181   |                                                               |   | 108,094 |   |
| Rent                                                                                                                                                                           |   |                                                                | 1,125    |                                                               |   | 3,375 |   |
| Printing                  and reproduction                                                                                                                                     |   |                                                                | -        |                                                               |   | 51 |   |
| Other                                                                                                                                                                          |   |                                                                | 1,941    |                                                               |   | 5,580 |   |
| Interest                  expense                                                                                                                                              |   |                                                                | 108,592  |                                                               |   | 554,432 |   |
|                                                                                                                                                                           |   |                                                                |     |                                                               |   |   |   |
| Total                  Operating expenses                                                                                                                                      |   |                                                                | 169,884  |                                                               |   | 745,219 |   |
|                                                                                                                                                                           |   |                                                                |     |                                                               |   |   |   |
| **Net                  investment loss**                                                                                                                                       |   |                                                                | (169,882 | )                                                                  |   | (744,398 | ) |
|                                                                                                                                                                           |   |                                                                |          |                                                               |   |   |   |
| **Net                  change in unrealized appreciation on investment**                                                                                                       |   |                                                                | -        |                                                               |   | - |   |
|                                                                                                                                                                           |   |                                                                |     |                                                               |   |   |   |
| **Net                  decrease in net assets resulting from operation**                                                                                                       |   | $                                                                   | (169,882 | )                                                                  | $      | (744,398 | ) |
|                                                                                                                                                                           |   |                                                                |          |                                                               |   |   |   |
| Loss                  per common share - basic and diluted                                                                                                                     |   | $                                                                   | (.25     | )                                                                  | $      | (1.70 | ) |
|                                                                                                                                                                           |   |                                                                |     |                                                               |   |   |   |
| Weighted                  average shares outstanding - basic and diluted as restated for                  the 1 for                  75 reverse stock split on October 4, 2006 |   |                                                                | 666,349  |                                                               |   | 438,109 |   |

----

**BDC        Capital, Inc.**

**STATEMENT        OF CASH FLOWS**

|                                                                                                                                                                    |   | **As                  a Business Development****Company**                    |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|----------|
|                                                                                                                                                                    |   | **Nine                  months ended****November                  30, 2005** |     |
| **CASH                  FLOWS FROM OPERATING AND INVESTING ACTIVITIES**                                                                                                 |   |                                                                         |          |   |
| Net                  decrease in net assets resulting from operations as a business                  development                  company                               |   | $                                                                            | (744,398 | ) |
| Adjustments                  to reconcile net assets resulting from operations and net loss                  to net cash                  used by operating activities: |   |                                                                         |     |   |
| Depreciation                  and amortization                                                                                                                          |   |                                                                         | -        |   |
| Amortization                  of original issue discount                                                                                                                |   |                                                                         | 523,879  |   |
| Administrative                  fees paid by issuance of convertible debt                                                                                               |   |                                                                         | 60,000   |   |
| Prepaid                  expenses                                                                                                                                       |   |                                                                         | (2,778   | ) |
| Accounts                  payable                                                                                                                                       |   |                                                                         | 3,596    |   |
| Accrued                  liabilities                                                                                                                                    |   |                                                                         | 20,647   |   |
| Investment                  in BDC Partners, Inc.                                                                                                                       |   |                                                                         | (320,900 | ) |
| Due                  to BDC Partners, Inc.                                                                                                                              |   |                                                                         | (1,690   | ) |
|                                                                                                                                                                    |   |                                                                         |     |   |
| Net                  cash used in operating and investing activities                                                                                                    |   |                                                                         | (461,644 | ) |
|                                                                                                                                                                    |   |                                                                         |     |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES**                                                                                                               |   |                                                                         |     |   |
| Proceeds                  from issuance of common stock                                                                                                                 |   |                                                                         | 109,303  |   |
| Net                  proceeds from subscription receivable                                                                                                              |   |                                                                         | 56,615   |   |
| Payments                  made on convertible debentures                                                                                                                |   |                                                                         | (278,313 | ) |
| Proceeds                  from issuance of notes payable                                                                                                                |   |                                                                         | 70,000   |   |
| Proceeds                  from issuance of convertible debentures                                                                                                       |   |                                                                         | 250,000  |   |
|                                                                                                                                                                    |   |                                                                         |     |   |
| Net                  cash provided by financing activities                                                                                                              |   |                                                                         | 207,605  |   |
|                                                                                                                                                                    |   |                                                                         |     |   |
| **Net                  change in cash and cash equivalents for the                  period**                                                                            |   |                                                                         | (254,039 | ) |
|                                                                                                                                                                    |   |                                                                         |     |   |
| **Cash                  and cash equivalents at beginning of period**                                                                                                   |   |                                                                         | 260,179  |   |
|                                                                                                                                                                    |   |                                                                         |     |   |
| **Cash                  and cash equivalents at end of period**                                                                                                         |   | $                                                                            | 6,140    |   |

----

**Withdrawal        as a Business Development Company**

|   | · | BDCs                  are subject to restrictions in the 1940 Act on the type and amount                  of                  securities, other than Common Stock, that they can issue. We believe                  that                  the Company would be better served by greater flexibility in our                  capital                  structure. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                  closely regulated nature of BDCs causes them to be subject to greater                  legal and accounting expenses. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**Critical        Accounting Policies **

**Recently        issued accounting pronouncements**

----

**PART        II**

|   | (a) | All                  information required to be disclosed on a report on Form 8-K during                  the                  period ended November 30, 2006 has previously been                  reported. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|
|   | (b) | There                  have been no material changes to the procedures by which security                  holders                  may recommend nominees to the registrant’s board of                  directors. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 3.1  | Articles                  of Incorporation, as amended (1)                                | Previously                  Filed |
|--------|------|-------------------------------------------------------------------------------------------|-----------------------------------|
|   | 3.2  | Bylaws                  (1)                                                               | Previously                  Filed |
|   | 31.1 | Certifications                  of Chief Executive Officer under Rule 13a-14(a)/15d-14(a) | Included                          |
|   | 31.2 | Certifications                  of Chief Financial Officer under Rule 13a-14(a)/15d-14(a) | Included                          |
|   | 32.1 | Certifications                  under Section 1350 - CEO                                  | Included                          |
|   | 32.2 | Certifications                  under Section 1350 - CFO                             | Included                          |

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|                                    | BDC                  CAPITAL, INC.                                                                                                                                                                                                                                                                                             |
|-----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |                                                                                                                                                                                                                                                                                                                           |
|                                    |                                                                                                                                                                                                                                                                                                                           |
| Date:                  January 16, 2007 | /s/                  David R..                  Pomije                                             |
|                                    | David                  R.. Pomije, CEO                                                                                                                                                                                                                                                                                         |

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