**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington,DC 20549**

 

**FORM10-K**

 

| ☐ | **ANNUAL                                         REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---------|----------------------------------------------------------------------------------------------------------------------------------|

 

**Forthe fiscal year ended December 31, 2018**

 

**OR**

 

| ☐ | **TRANSITION                                         REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---------|--------------------------------------------------------------------------------------------------------------------------------------|

 

**Commissionfile number: 000-53504***

 

**CrossroadsLiquidating Trust**

 

(ExactName of Registrant as Specified in its Charter)

 

| **Maryland**                                                                                           |   | **82-6403908**                                                               |
|--------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|
| (State                                         or Other Jurisdiction of

Incorporationor Organization) |   | (I.R.S.                                         Employer

IdentificationNo.) |

 

| **128                                         N. 13th Street, Suite #1100**

**Lincoln,Nebraska 68508**

**(Addressof principal executive offices)**

**(402)261-5345 (Registrant’s telephone number, including area code)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Securitiesregistered pursuant to Section 12(b) of the Act: None**

 

**Securitiesregistered pursuant to Section 12(g) of the Act:  None**

 

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicateby check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐ No ☐ *

 

Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports),and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No☐ *

 

Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuantto Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit such files).  Yes ☐ No ☐*

 

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by referencein Part III of this Form 10-K or any amendment to this Form 10-K. ☐ *

 

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company.  See definition of “accelerated filer,” “large accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act.

 

| Large accelerated filer ☐                                     | Accelerated filer ☐              |
|------------------------------------------------------------------------------------|--------------------------------------------------|
| Non-accelerated                                         filer ☒    | Smaller reporting company ☐ |
| Emerging                                         growth company ☐  |                                             |

 

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐ No ☒.

 

Statethe aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the priceat which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2018. Not applicable.

 

Asof March 28, 2019, the number of outstanding units of beneficial interest in Crossroads Liquidating Trust was 9,563,130.

 

**DOCUMENTSINCORPORATED BY REFERENCE**

 

None.

 

| * | Crossroads                                         Capital, Inc. converted to Crossroads Liquidating Trust on June 23, 2017. Accordingly,                                         Crossroads Liquidating Trust files reports under the Commission file number for Crossroads                                         Capital, Inc.  Crossroads Capital, Inc. filed a Form N-54C on June 23, 2017, indicating                                         the withdrawal of its election to be subject to sections 55 through 65 of the Investment                                         Company Act of 1940 (the “Act”), pursuant to the provisions of section 54(c)                                         of the Act. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

**TABLEOF CONTENTS**

 

|                                             |                                                                                                                                                                                               | Page   |
|--------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                             | **Part                                         I**                                                                                                                                                 |   |
| Item                                         1.  | Business                                                                                                                                                                                           | 3      |
| Item                                         1A. | Risk                                         Factors                                                                                                                                               | 4      |
| Item                                         1B. | Unresolved                                         Staff Comments                                                                                                                                  | 8      |
| Item                                         2.  | Properties                                                                                                                                                                                         | 8      |
| Item                                         3.  | Legal                                         Proceedings                                                                                                                                          | 8      |
| Item                                         4.  | Mine                                         Safety Disclosures                                                                                                                                    | 8      |
|                                             |                                                                                                                                                                                               |   |
|                                             | **Part                                         II**                                                                                                                                                |   |
| Item                                         5.  | Market                                         for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases                                         of Equity Securities | 9      |
| Item                                         6.  | Selected                                         Financial Data                                                                                                                                    | 9      |
| Item                                         7.  | Management’s                                         Discussion and Analysis of Financial Condition and Results of Operations                                                                | 9      |
| Item                                         7A. | Quantitative                                         and Qualitative Disclosures About Market Risk                                                                                                 | 12     |
| Item                                         8.  | Financial                                         Statements and Supplementary Data                                                                                                                | 13     |
| Item                                         9.  | Changes                                         in and Disagreements with Accountants on Accounting and Financial Disclosure                                                                       | 14     |
| Item                                         9A. | Controls                                         and Procedures                                                                                                                                    | 14     |
| Item                                         9B. | Other                                         Information                                                                                                                                          | 14     |
|                                             |                                                                                                                                                                                               |   |
|                                             | **Part                                         III**                                                                                                                                               |   |
| Item                                         10. | Directors,                                         Executive Officers and Corporate Governance                                                                                                     | 15     |
| Item                                         11. | Executive                                         Compensation                                                                                                                                     | 15     |
| Item                                         12. | Security                                         Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                                                             | 15     |
| Item                                         13. | Certain                                         Relationships and Related Transactions, and Director Independence                                                                                  | 16     |
| Item                                         14. | Principal                                         Accountant Fees and Services                                                                                                                     | 16     |
|                                             |                                                                                                                                                                                               |   |
|                                             | **Part                                         IV**                                                                                                                                                |   |
| Item                                         15. | Exhibits                                         and Financial Statement Schedules                                                                                                                 | 17     |
| Item                                         16. | Form                                         10-K Summary                                                                                                                                          | 17     |
| Signatures                                       | 18                                                                                                                                                                                                 |

 

**INTRODUCTORYNOTE**

 

Asused in this annual report on Form 10-K, unless otherwise indicated, the “Trust”, “Liquidating Trust”,“we”, “us” or “our” refer to Crossroads Liquidating Trust.

 

**Forward-LookingStatements**

 

Thisannual report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties.  These forward-lookingstatements represent our current expectations, assumptions, estimates and projections regarding Crossroads Liquidating Trust,including estimates of the net assets of the Trust, statements about the amount and timing of the payment of additional liquidatingdistributions and statements about the Trust’s operating costs through termination of the Trust, which will vary with thelength of time it operates.  These forward-looking statements are subject to substantial risks, uncertainties, and otherfactors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially fromthose expressed in, or implied by, these forward-looking statements.

 

Althoughwe believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions couldprove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be materially inaccurate. In light of these and other uncertainties, the inclusion of projections or forward-looking statements in this annual report onForm 10-K should not be regarded as a representation by us that our Plan of Liquidation will be achieved.  These risks anduncertainties include those described or identified in “Risk Factors” in this annual report on Form 10-K.  Youshould not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report onForm 10-K.  Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-lookingstatements, whether as a result of new information, future events or otherwise, to reflect events or circumstances occurring afterthe date of this annual report on Form 10-K. 

 

2 

**PARTI**

 

**Item1.  Business**

 

**Overview**

 

CrossroadsLiquidating Trust (the “Liquidating Trust” or the “Trust”) operates as a statutory trust under the generallaws of the State of Maryland following the conversion of Crossroads Capital, Inc. (“Crossroads Capital”) into CrossroadsLiquidating Trust pursuant to a Plan of Liquidation (the “Plan”).  The sole purpose of the Trust is the liquidationof its assets and distribution of its proceeds to the holders of the beneficial interests in the Liquidating Trust. 

 

Priorto conversion, Crossroads Capital, Inc. (“Crossroads Capital”) elected to be regulated as a business development company(“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).  On June 23, 2017,Crossroads Capital and each of the trustees of the Liquidating Trust (the “Trustees”) executed the Liquidating TrustAgreement (the “Liquidating Trust Agreement”) in connection with the conversion of Crossroads Capital into CrossroadsLiquidating Trust pursuant to the Plan.  On June 23, 2017, Crossroads Capital filed Articles of Conversion with the Stateof Maryland and all of the assets and liabilities of Crossroads Capital became assets and liabilities of the Trust (the “Conversion”). Stockholders of Crossroads Capital received one unit of beneficial interest for each share of common stock held by such stockholderon the date of conversion. 

 

TheLiquidating Trust will terminate upon payment to the holders of the beneficial interests in the Liquidating Trust (“TrustUnits”) of all the Liquidating Trust’s assets and in any event upon the third anniversary of the effectiveness ofthe Conversion.  The life of the Liquidating Trust may, however, be extended to more than three years if the Trustees thendetermine that an extension is reasonably necessary to fulfill the purposes of the Trust.  The Trustees are authorized toengage the services of other professionals or service organizations to assist in managing the Liquidating Trust’s affairs. Under the Liquidating Trust Agreement, Trust Units are not transferable or assignable, except for certain exceptions describedin the Liquidating Trust Agreement.  The Trust Units are not certificated, listed on any exchange or quoted on any quotationsystem.  The Liquidating Trust Agreement provides that neither the Trustees nor anyone associated with the Liquidating Trustmay take any action to facilitate or encourage any trading in the Trust Units.  The Liquidating Trust’s activitiesare specifically limited to conserving, protecting and selling its assets and distributing the proceeds therefrom. These activitiesinclude holding the Liquidating Trust’s assets for the benefit of the holders of the Trust Units and enforcing their rights,temporarily investing asset sale proceeds and collecting income therefrom, providing for the liabilities of the Liquidating Trust,making liquidating distributions to the holders of Trust Units, and taking such other actions as may be necessary to conserveand protect the assets of the Liquidating Trust.  

 

TheLiquidating Trust remains subject to the restrictions under the 1940 Act from engaging in transactions with affiliated parties,except under certain circumstances.  The Liquidating Trust is required to file with the U.S. Securities and Exchange Commission(the “SEC”) annual reports showing the assets and liabilities of the Liquidating Trust at the end of each calendaryear and its receipts and disbursements for the period.  The annual reports will describe the changes in the LiquidatingTrust’s assets during the reporting period and the actions taken by the Trustees during the period.  The financialstatements contained in such reports will be prepared in accordance with generally accepted accounting principles and will bereviewed by the Liquidating Trust’s independent registered public accounting firm. The financial statements, however, willnot be audited.  The Liquidating Trust will file with the SEC a Form 8-K whenever an event occurs that requires such a reportto be filed for or whenever, in the opinion of the Trustees, any other material event relating to the Liquidating Trust has occurred.

 

**Distributions**

 

ThePlan provides that liquidating distributions will be made at such times as determined by the Trustees in their sole discretion.Consideration of potential liquidating distributions shall occur no less frequently than annually and in any event within a reasonableperiod of time following the disposition of the Liquidating Trust’s assets. 

 

TheTrust did not make any liquidating distributions during 2018.

 

OnJuly 12, 2017, the Trust made an initial liquidating distribution of $1.60 per Trust Unit to the holders of beneficial interestin the Trust, pursuant to the Plan.  This initial liquidating distribution was apportioned pro rata according to the beneficialunit holders’ respective interest in the Trust. 

 

**TaxTreatment**

 

ForFederal income tax purposes, the Trust is treated as a “grantor” trust.  As such, the Trust itself is not subjectto federal or state income tax.  Instead, each beneficiary will be treated as having a direct interest in an allocable prorata share of each asset and liability of the Trust.  As a result, an allocable portion of all items of Trust income (includingany gains and losses recognized by the Trust), deductions and credits must be reported by beneficiaries on their income tax return(s). 

 

3 

TheTrust will issue an annual information statement to its beneficiaries with information for their tax returns. Beneficiaries areurged to consult with their tax advisers as to their own filing requirements and the appropriate tax reporting of this informationon their returns.

 

**Employees**

 

Wehave no employees or executive officers.  All of our work is performed by the Trustees directly or through contract services.  1100Capital Consulting, LLC (the “Administrator”) serves as our administrator, performing the administrative servicesnecessary for our operation, including without limitation, providing equipment, clerical, bookkeeping, accounting and record keepingservices.

 

**Item1A. Risk Factors**

 

Inaddition to other information in this annual report on Form 10-K, the following risk factors should be carefully reviewed becausesuch factors may have a significant impact on the execution of the Plan and the timing and amount of future liquidating distributions,if any, to the holders of beneficial interest in the Trust.  As a result of the risk factors set forth below and elsewherein this Form 10-K, actual results could differ materially from those projected herein.

 

**RisksRelated to our Liquidation**

 

***Wecannot assure you of the amount or timing of future distributions, if any.***

 

Ourestimate of net assets in liquidation at December 31, 2018 of $8,093,375, or $0.85 per Trust Unit is based on a number of estimatesand assumptions. These include asset hold periods, expected revenues and expenses and other factors not within our control, suchas capitalization rates and market conditions. In addition, the liquidation and dissolution process is subject to numerous uncertaintiesand may result in smaller distributions than anticipated or no capital available for future distribution to our beneficial unitholders.The precise nature, amount and timing of any future distribution will depend on and could be delayed by a number of factors including:

 

|   | ● | Adverse                                         changes in general and local economic conditions which affect the market for our portfolio                                         companies; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | ● | Longer                                         than anticipated hold periods for our assets; |
|--------|---------|----------------------------------------------------------------------------------------------|

 

|   | ● | Adverse                                         changes in the performance of our portfolio companies; |
|--------|---------|--------------------------------------------------------------------------------------------------------|

 

|   | ● | Competition                                         from other companies; |
|--------|---------|---------------------------------------------------------------------------|

 

|   | ● | Fluctuations                                         in interest rates; |
|--------|---------|-------------------------------------------------------------------------|

 

|   | ● | The                                         financial condition of our portfolio companies; or |
|--------|---------|------------------------------------------------------------------------------------------------|

 

|   | ● | Increase                                         in the Trust’s maintenance, insurance and operating costs. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|

 

***Therecan be no guarantee that the holders of beneficial interests will realize the current******estimatedliquidation values of our assets under the Plan.***

 

Wecannot accurately estimate the expected proceeds that the Liquidating Trust might realize from the sale of our portfolio investmentspursuant to the Plan or the timing thereof.  The amounts realized may be less than the estimated liquidation values as ofDecember 31, 2018.  It is possible that the final liquidation value or the proceeds received from the sale of our portfolioinvestments may be less than the value or proceeds an investor might receive from pursuing a strategy of holding such investmentsthrough any potential initial public offering or other sale or liquidity event. It is possible that we will experience substantialdifferences in the exit prices ultimately achieved by the Liquidating Trust on our portfolio investments as compared to the respectivecurrent estimated liquidation values.We cannot provide any assurance as to the proceeds we will receive from the disposition of our portfolio company investment orthe net proceeds, if any, therefrom.

 

***Ourperiod of liquidation may be extended beyond the current three-year liquidation period.***

 

Wemay have to extend our period of liquidation beyond the three-year liquidation period permitted under IRS rules, which might requireus to seek an IRS letter ruling for an extension.  Seeking such a letter ruling may result in an increase in our administrativeexpenses.  If such a letter ruling is denied, we may be required to sell our assets at below fair market value.  

 

***Ourunits are not transferable or assignable except for certain exceptions and lack liquidity.***

 

TheTrust Units are not certificated, listed on any exchange or quoted on any quotation system.  The Liquidating Trust Agreementprovides that neither the Trustees nor anyone associated with the Liquidating Trust may take any action to facilitate or encourageany trading in the Trust Units.  Under the Liquidating Trust Agreement, Trust Units are not transferable or assignable, exceptfor certain exceptions described in the Liquidating Trust Agreement.  Thus, our beneficiaries do not have authority or powerto sell or in any other manner dispose of their beneficial interests.  

 

4 

***Wemay be delayed in completing our liquidation.***

 

Ourability to accomplish the Plan is contingent upon the disposition of our portfolio company investments.  Our current timeframefor liquidating is to conclude within three years from our conversion to a liquidating trust.  Remaining contingent liabilitiesand other factors could cause us to extend liquidation beyond this period.  If liquidation is delayed, your beneficial interestswill continue to be illiquid.

 

***Ifour liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions to our beneficiaries maybe delayed or reduced.***

 

Beforemaking the final liquidating distribution to our beneficiaries, we will need to pay or arrange for the payment of all of our transactioncosts in the liquidation, and all other costs and all valid claims of our creditors. The total amount of transaction costs inthe Plan is not yet known and, therefore, we have used estimates of these costs in calculating the amount of our projected liquidatingdistributions to our beneficiaries. Estimates are based on assumptions regarding costs to be incurred in executing the Plan. Theactual costs incurred during liquidation may differ, which could reduce net assets available for distribution. To the extent thatwe have underestimated these costs in calculating our projections, our actual net liquidation values may be lower than our estimates.In addition, if the claims of our creditors are greater than we have anticipated, payment of liquidating distributions to ourbeneficiaries may be delayed, reduced and/or eliminated.

 

***Thedisposition of our portfolio investments will be subject to contingent liabilities.***

 

Wecontinue to incur liabilities and expenses from operations as we complete the liquidation of our assets. To the extent that theseexpenses and liabilities exceed our current estimates, they will reduce the amount of assets available for future distributionto beneficiaries. While we anticipate that our existing cash and cash equivalents will be sufficient to fund our cash needs forexpenses related to completion of the Plan, we cannot provide any assurances that this will be the case.

 

***Liquidationbasis accounting requires certain assumptions that may result in actual results being materially different from those that havebeen estimated.***

 

TheLiquidating Trust presents its financial statements in accordance with liquidation basis accounting, which requires us to makeestimates and judgments that affect the reported amounts of assets (including net assets in liquidation), liabilities, revenuesand expenses, and related disclosure of contingent assets and liabilities. Valuation of assets requires management to make difficultestimates and judgments with incomplete information. Estimates necessarily require assumptions, and changes in such assumptionscould materially affect reported results. Estimates are made and evaluated on an on-going basis using information that is currentlyavailable, as well as various other assumptions believed to be reasonable under the circumstances. Due to the inherently uncertainnature of estimates and the underlying assumptions, the actual values realized for assets and settlement of liabilities may differmaterially, perhaps in adverse ways, from the estimated amounts.  The determination of the estimated liquidation value ofa portfolio company may be based on an analysis of available financial results, public market comparables, market conditions and/orother factors related to such portfolio company.  Additionally, because of uncertainty in the timing and proceeeds of anyanticipated sale, actual results may differ materially from estimated amounts.

 

***Wedepend on our Trustees and Administrator and the loss of our Trustees or our Administrator’s key personnel could harm ouroperations and adversely affect the value of our Trust Units.***

 

Wehave no employees or executive officers. All of our work is performed by the Trustees directly, through contract services or throughour Administrator. We have no separate facilities and are completely reliant on our Trustees who have significant discretion asto the sale of our assets. We are subject to the risk that the Administrator may terminate its Administrator Consulting Agreementwith us and that no suitable replacement will be found. Furthermore, we are dependent on the efforts, diligence, skill, networkof business contacts and close supervision of all aspects of our business by our Trustees and our Administrator. While we believethat we could find replacements for these key personnel, the loss of their services could have a negative impact on our operationsand the value of the Trust Units.

 

***Paymentof fees to our Trustees and Administrator will reduce cash available for distribution.***

 

OurTrustees and Administrator will perform services for us in connection with the liquidation of our assets. They will be paid feesfor these services, which will reduce the amount of cash available for distribution to our beneficiaries.

 

5 

**RisksRelated to Existing Trust Assets**

 

***Ourportfolio companies are subject to many risks, including volatility, intense competition, current operating losses, shortenedproduct life cycles and periodic downturns.***

 

Ourportfolio companies consist primarily of investments in companies in industries that our former investment adviser believed werepoised to grow at above-average rates relative to other sectors, which may have relatively limited operating histories and maybe particularly vulnerable to fluctuations in U.S. and foreign economic environments.These companies may experience operatinglosses, have limited access to capital and higher funding costs, have a weaker financial position and may need additional capitalto expand, complete their business plans or remain in business. They may face intense competition, including from larger, moreestablished companies with greater financial, technical and marketing resources. These companies generally have less predictableoperating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with productssubject to a substantial risk of obsolescence, and require substantial additional capital to support their operations, financeexpansion or maintain their competitive position. The revenues, income (or losses) and valuations of these companies can and oftendo fluctuate suddenly and dramatically. For these reasons, our portfolio companies, if rated by one or more ratings agencies,would typically be rated below “investment grade.” In addition, the companies that were selected for investment bythe former investment adviser were in industries generally characterized by abrupt business cycles and intense competition, andthe competitive environment can change abruptly due to rapidly evolving technology. Therefore, these portfolio companies may faceconsiderably more risk than companies in other industry sectors. Accordingly, these factors could impair their cash flow or resultin other events, such as bankruptcy, which could limit their ability to repay their obligations to us and may materially adverselyaffect the return on, or the recovery of, our investments in these businesses.

 

Becauseof rapid technological change, the average selling prices of products and some services provided by our portfolio companies maydecrease with corresponding rapid speed over their productive lives. These decreases could adversely affect their operating resultsand cash flow, their ability to meet obligations under their debt securities and the value of their equity securities. This could,in turn, materially adversely affect our ability to sell the Trust’s assets and ability to make distributions to holdersof beneficial interests.

 

***Ourinvestments in private companies present certain challenges, including the lack of available company information, a dependenceon the talents and efforts of only a few key personnel at a given portfolio company, a lack of a diversified product line, a dependenceon several key customers and a greater vulnerability to fluctuating economic conditions.***

 

Thevalue of our portfolio companies is dependent in large part, upon the abilities of the key management personnel of our portfoliocompanies, who are responsible for their day-to-day operations. Competition for qualified personnel is intense at any stage ofa company’s development, particularly so in the growth industries in which we hold investments. The loss of one or morekey managers can hinder or delay a company’s implementation of its business plan and harm its financial condition. Our portfoliocompanies may not be able to attract and retain qualified managers and personnel. Any inability to do so may negatively affectthe value of the companies, our ability to sell our interest in such companies, and thus the amount of cash available to distributeto our holders of beneficial interests.

 

***Theamount of cash available for distribution could be negatively affected if a significant portfolio investment fails to performas expected.***

 

Ourtotal investment in companies may be significant individually or in the aggregate. As a result, if a significant investment inone or more companies fails to perform as expected, our financial results could be negatively affected and the magnitude of theloss could be more significant than if we had smaller investments in more companies.

 

Wecannot assure you that any of our investments in our portfolio companies will be successful. There can be no assurance as to thelevels of defaults or recoveries that may be experienced on our debt investments. We may lose our entire investment in any orall of our portfolio companies.

 

***Mostof our portfolio companies will need additional capital, which may not be readily available.***

 

Mostof the portfolio companies targeted under our former investment strategy may have limited financial resources and typically requiresubstantial additional financing to satisfy their continuing working capital and other capital requirements. We cannot predictthe circumstances or market conditions under which these portfolio companies will seek additional capital. Each round of institutionalequity financing is typically intended to provide a company with only enough capital to reach the next stage of development. Itis possible that one or more of our portfolio companies will not be able to raise additional financing or may be able to do soonly at a price or on terms that are unfavorable to the portfolio company, either of which would negatively impact our abilityto make distributions to our beneficiaries. In some cases, financing may be arranged in a manner that would have the interestsof current shareholders reduced if they do not participate in the financing. Some of these companies may be unable to obtain sufficientfinancing from any provider of capital under any terms, thereby requiring these companies to cease or curtail operations. Accordingly,investments in these types of companies generally entails a higher risk of loss than investments in companies that have the abilityto raise capital. 

 

**RisksRelated to Our Business in General**

 

***Globaleconomic conditions may affect our operations and financial condition, including our ability to make distributions to beneficialinterest holders.***

 

Ourbusiness is subject to a number of general econocmic conditions and uncertainties that are largely out of our control and may contribute to increased market volatility and instability, which could have a material adverse effect on our business, resultsof operations and financial condition. These include the current worldwide financial markets, recessionary economic cycles, variouschanges in U.S. regulatory conditions, tariff and trade discussions and various social, regulatory and political uncertainitesin the U.S. and around the world. In addition, the fiscal and monetary policies of foreign nations may have a severe impact onthe U.S. and worldwide financial markets.  These conditions may adversely affect the value of our portfolio companies andour ability to sell them at acceptable prices.

 

6 

***Weface cyber-security risks.***

 

Ourbusiness operations rely upon secure information technology systems for data processing, storage and reporting. Despite our securitycontrols,  hardware and implementation and updating of security programs, our information and data systems or the similarsystems of our vendors and agents could become subject to cyber-attacks. Network, system, application and data breaches couldresult in operational disruptions or information misappropriation, which could have a material adverse effect on our business,results of operations and financial condition.

 

***Thefailure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and managementcontinuity planning could impair our ability to conduct business effectively.***

 

Theoccurrence of a disaster such as a cyber-attack, a natural catastrophe, an industrial accident, a terrorist attack or war, eventsunanticipated in our disaster recovery systems, or a support failure from external providers, could have an adverse effect onour ability to conduct business and on our results of operations and financial condition, particularly if those events affectour computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of ourprofessional staff were unavailable in the event of a disaster, our ability to effectively conduct our business could be severelycompromised.

 

Wedepend upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures,our computer systems could be subject to cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorizedtampering. Like other companies, we may experience threats to our data and systems, including malware and computer virus attacks,unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize theconfidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks,or otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financiallosses, litigation, increased costs, regulatory penalties and/or customer dissatisfaction or loss.

 

***Weare dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negativelyaffect our ability to make distributions.***

 

Ourbusiness is dependent on our and third parties’ communications and information systems. Any failure or interruption of thosesystems, including as a result of the termination of an agreement with any third-party service providers, could cause delays orother problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilitiesmay fail to operate properly or become disabled or damaged as a result of a number of factors including events that are whollyor partially beyond our control and adversely affect our business. For example, there could be:

 

|   | ● | sudden                                         electrical or telecommunication outages; |
|--------|---------|-----------------------------------------------------------------------------------------|

 

|   | ● | natural                                         disasters such as earthquakes, tornadoes and hurricanes; |
|--------|---------|----------------------------------------------------------------------------------------------------------|

 

|   | ● | disease                                         pandemics; |
|--------|---------|------------------------------------------------------------|

 

|   | ● | events                                         arising from local or larger scale political or social matters, including terrorist acts;                                         and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | ● | cyber-attacks. |
|--------|---------|----------------|

 

Theseevents, in turn, could negatively affect our ability to make distributions to our holders of beneficial interest.

 

***Weincur public reporting costs.***

 

TheLiquidating Trust is subject to certain disclosure requirements. Consequently, we incur legal, accounting and other expenses,including costs associated with reporting requirements applicable to a company whose securities were registered under the ExchangeAct, as well as additional corporate governance requirements and other rules implemented by the SEC, including those imposed bythe SEC staff in connection with our plan to convert into a liquidating trust.

 

***Ouroperations could be negatively affected if we become subject to any material legal proceedings, which could cause us to incursignificant expense, hinder execution of the Plan and impair the amount of any distributions made to holders of beneficial interests.***

 

Weand our Trustees are not currently a party to any material legal proceedings.  However, from time to time, we may be partyto certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contractswith our portfolio companies, which could cause us to incur substantial expense and negatively impact our operations by distractingthe Trustees, hinder the execution of the Plan and reduce the amount of any distributions made to holders of beneficial interests.

 

7 

**FederalIncome Tax Risks**

 

***Investorsmay realize taxable income without cash distributions, and may have to use funds from other sources to pay their tax liabilities.***

 

ForFederal income tax purposes, the Trust is treated as a “grantor” trust. As such, the Trust itself is not subject tofederal or state income tax. Instead, each beneficiary is treated as having a direct interest in an allocable pro rata share ofeach asset and liability of the Trust. As a result, an allocable portion of all items of Trust income (including any gains andlosses recognized by the Trust), deductions and credits must be reported by beneficiaries on their income tax return(s). Beneficiaries will be required to report their allocable share of our taxable income on their personal income tax return regardlessof whether they have received any cash distributions from us. It is possible that units of beneficial interest will be allocatedtaxable income in excess of their cash distributions. We cannot assure beneficiaries that cash flow will be available for distributionin any year. As a result, beneficiaries may have to use funds from other sources to pay their tax liability.

 

**Item1B.  Unresolved Staff Comments**

 

Notapplicable.

 

**Item2.   Properties**

 

Wedo not own any real estate or other physical properties.  Our principal office is located at 128 North 13thStreet, Suite 1100, Lincoln, Nebraska 68508.  

 

**Item3. Legal Proceedings**

 

Weare not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatenedagainst us.  

 

**Item4. Mine Safety Disclosures**

 

Notapplicable.

 

8 

**PARTII**

 

**Item5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**

 

**MarketInformation**

 

TheTrust Units are not certificated, listed on any exchange or quoted on any quotation system.  The Liquidating Trust Agreementprovides that neither the Trustees nor anyone associated with the Liquidating Trust may take any action to facilitate or encourageany trading in the Trust Units.  The Trust Units are not transferable or assignable, except for certain exceptions describedin the Liquidating Trust Agreement.  

 

**Beneficiaries**

 

Asof March 28, 2019, there were approximately 700 record holders of beneficial interest in the Trust.  

 

**Item6.  Selected Financial Data**

 

Notapplicable.

 

**Item7. Management’s Discussion and Analysis of Financial Condition and Results of Operations**

 

Thefollowing discussion should be read in conjunction with our financial statements and notes and other information contained elsewherein this annual report on Form 10-K.  

 

**Overview**

 

OnJune 23, 2017, Crossroads Capital converted into Crossroads Liquidating Trust and all of the assets and liabilities of CrossroadsCapital, including eight portfolio company investments, became assets and liabilities of the Trust pursuant to the Plan and theLiquidating Trust Agreement.  Crossroads Liquidating Trust is responsible for liquidating its assets and distributing theproceeds to the holders of beneficial interests in the Trust.    

 

**PortfolioCompany Activity**

 

Wedid not have any portfolio company dispositions during the year ended December 31, 2018.  During the year ended December31, 2018, we received the proceeds from our sale of Harvest Power, which was completed during the prior year and held as a receivablefor investments sold as of December 31, 2017. See also “Recent Developments” below.

 

Thefollowing table summarizes the estimated liquidation value of our portfolio company holdings as of December 31, 2018 and 2017and the change in estimated liquidation value, proceeds received and the net change in net assets in liquidation for our portfoliocompany investments for the year ended December 31, 2018. 

 

| ** **                                                            |   | **Estimated****Liquidation                                         Value**                                     |      |   | **For                                         the Year Ended****December                                         31, 2018** |   |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------|--------|
| ** **                                                            |   | **As                                         of****December                                         31, 2017** |      |   | **As                                         of****December                                         31, 2018**              |   |   | **Net                                         Change in Estimated Liquidation Value** |   |   | **Total                                         Proceeds****Received** |   |   | **Net                                         Change in Net****Assets                                         in Liquidation** |   |
| Portfolio                                         Company Investments |   | $                                                                                                              | 6,650,687 |   |                                                                                                                        | $      | 6,027,000 |   |   | $ | (623,687 | ) |   | $ | — |   |   | $ | (623,687 | ) |

 

Wehad the following portfolio company activity during the period June 23, 2017 to December 31, 2017:

 

OnAugust 29, 2017, we acquired a $13,902 senior secured promissory note in BrightSource Energy, Inc. as part of a rights offeringto BrightSource Energy’s Series 1 Preferred Stock and note holders.  The maturity date of the note is March 1, 2018or a later date as approved by a majority of the noteholders, or upon the consummation of certain actions as detailed therein.

 

OnNovember 13, 2017, Harvest Power, Inc. completed a merger transaction that resulted in our receipt of $7,044 in total proceedsin exchange for the cancellation of our Series B convertible preferred and Series A-2 preferred shares.  

 

OnDecember 8, 2017, funds held in escrow from the sale of our prior Xtime investment totaling $103,148 were released to us withoutany offset for indemnity claims.

 

9 

 

The                                         following table summarizes the estimated liquidation value of our portfolio company holdings                                         as of June 23, 2017 and December 31, 2017 and the change in estimated liquidation value,                                         proceeds received and the net change in net assets in liquidation for our portfolio company                                         investments for the period June 23, 2017 through December 31, 2017.
| ** **                                                                           |   | **Estimated****Liquidation                                         Value**                                    |      |   | **For                                         the Period****June                                         23, 2017 through December 31, 2017** |   |
|--------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ** **                                                                           |   | **As                                         of****June                                         23,****2017** |      |   | **As                                         of****December                                         31, 2017**                                |   |   | **Net                                         Change in Estimated Liquidation Value** |   |   | **Total                                         Proceeds****Received** |   |   | **Net                                         Change in Net****Assets                                         in Liquidation** |   |
| Portfolio                                         Company Investments                |   | $                                                                                                             | 8,060,505 |   |                                                                                                                                          | $      | 6,650,687 |   |   | $ | (1,409,818 | ) |   | $ | 7,044 |   |   | $ | (1,402,774 | ) |
| Funds                                         Held in Escrow from Sale of Investment |   |                                                                                                          | 95,768    |   |                                                                                                                                          |   | — |   |   |   | (95,768 | ) |   |   | 103,148 |   |   |   | 7,380 |   |
| **Total**                                                                            |   |                                                                                                          | 8,156,273 |   |                                                                                                                                          |   | 6,650,687 |   |   |   | (1,505,586 | ) |   |   | 110,192 |   |   |   | (1,395,394 | ) |

 

**Changesin Net Assets in Liquidation**

 

Netassets in liquidation were $8,093,375 and $8,684,201 as of December 31, 2018 and 2017, respectively.

 

***Assets***

 

Asof December 31, 2018, the Trust held seven portfolio company investments and had total assets of $9,303,072 which were comprisedof $6,027,000 in portfolio company investments at estimated liquidation value, $3,246,072 in cash and cash equivalents and $30,000in prepaid expenses and other assets.

 

Asof December 31, 2017, the Trust held seven portfolio company investments and had total assets of $10,367,865 which were comprisedof $6,650,687 in portfolio company investments at estimated liquidation value, $3,697,634 in cash and cash equivalents and $19,544in prepaid expenses and other assets.

 

***Liabilities***

 

Asof December 31, 2018, the Trust had $1,209,697 in total liabilities, comprised of $26,373 in accounts payable and accrued expensesand $1,183,324 in estimated costs related to the liquidation, including legal expenses, portfolio selling costs, accounting expenses,tax reporting expenses, contractor services, and miscellaneous other expected future costs.  As of December 31, 2018, theliability for estimated costs during liquidation included a total of $90,000 of fees to be paid to our Board of Trustees overthe remaining liquidation period.

 

Asof December 31, 2017, the Trust had $1,683,664 in total liabilities, comprised of $41,324 in accounts payable andaccrued expenses and $1,642,340 in estimated costs related to the liquidation.  As of December 31, 2017, the liabilityfor estimated costs during liquidation included a total of $150,000 of fees to be paid to our Board of Trustees over theremaining liquidation period.

 

***Changesin Net Assets***

 

Netassets in liquidation decreased $590,826, or $0.06 per Trust Unit, for the year ended December 31, 2018.  This decrease inour net assets was due primarily to: (i) a net decrease of $623,687, or $0.06 per Trust Unit, in the net estimated liquidationvalue of our portfolio company investments during the period, and (ii) an increase of $32,861, or a de minimis amount per TrustUnit, as a result of current operating expenses and other operating activities.

 

Netassets in liquidation decreased $16,885,510, or $1.76 per Trust Unit, during the period June 23, 2017 to December 31, 2017. This decrease in our net assets was due primarily to: (i) a liquidating distribution of $15,301,008, or $1.60 per Trust Unit,in July 2017, (ii) a net decrease of $1,505,586, or $0.16 per Trust Unit, in the net estimated liquidation value of our portfoliocompany investments during the period and a decrease of $78,916, or a de minimis amount per Trust Unit, as a result of currentoperating expenses and other operating activities.

 

Thefollowing table sets forth the net assets in liquidation and net asset value per Trust Unit as of December 31, 2018 and 2017.

 

|                                                                           |   | **December                                         31, 2018** |      |   | **December                                         31, 2017** |   |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------|-----------|--------|---------------------------------------------------------------|--------|
| Net                                         assets in liquidation              |   | $                                                             | 8,093,375 |   |                                                          | $      | 8,684,201 |   |
| Number                                         of beneficial units outstanding |   |                                                          | 9,563,130 |   |                                                          |   | 9,563,130 |   |
| Net                                         asset value per unit               |   | $                                                             | 0.85      |   |                                                          | $      | 0.91 |   |

 

10 

**Liquidityand Capital Resources**

 

***Cashand Cash Equivalents***

 

Asof December 31, 2018, we had cash and cash equivalents of $3,246,072. Our ability to accomplish the Plan is contingent uponthe disposition of our portfolio company investments.  While we anticipate that our existing cash and cash equivalents willbe sufficient to fund our cash needs for expenses related to the completion of the Plan, we cannot provide any assurances thatthis will be the case.  Further, we cannot provide any assurance as to the proceeds, if any, we will receive from the dispositionof our portfolio company investments.

 

Asof December 31, 2018, our cash and cash equivalents were held in bank deposit accounts.  We expect to continue to hold ourcash and cash equivalents primarily in bank deposit accounts while we execute the Plan.

 

**Commitmentsand Contingencies**

 

OnNovember 13, 2017, Harvest Power completed a merger transaction with a third party.  In connection with the merger transaction,we entered into a Contingent Payment and Release Agreement with the company, the acquirers and certain other stockholders entitlingus to our pro rata interest of certain contingent payments over a four-year period in consideration of and as a condition to therelease of certain actions and claims related to Harvest Power.  

 

Wemaintain a directors and officers liability insurance policy that provides liability insurance coverage for our Trustees and otherspecified parties.  We have also agreed to indemnify our Trustees to the maximum extent permitted by Maryland law subjectto the restrictions in the 1940 Act.

 

Asof December 31, 2018, we and our Trustees are not a party to any material legal proceedings.  However, from time to time,we may be party to certain legal proceedings incidental to the normal course of our business including the enforcement of ourrights under contracts with our portfolio companies.

 

**RecentDevelopments**

 

***PortfolioCompany Activity***

 

OnJanuary 28, 2019, Deem, Inc. completed a merger transaction and our 46,461 shares of common stock were canceled.  We didnot receive any proceeds or have any realized gain or loss as a result of the merger transaction.

 

OnMarch 21, 2019, Zoosk, Inc. (“Zoosk”) entered into a definitive agreement for its acquisition by Spark Networks SE(“Spark”) (NYSE: LOV) (the “Transaction”).  The Transaction, which is expected to close early inthe third quarter of 2019, would provide the Trust a combination of cash and Spark American Depository Shares (“ADSs”)in exchange for its Series E convertible preferred stock in Zoosk, in addition to a deferred, contingent cash payment expectedto be paid on or around December 31, 2020.  The total value of the consideration expected to be received by the Trust asa result of the Transaction, if the Transaction closes, will not be known until receipt of the cash and ADS consideration at closing,and the receipt of the deferred cash payment, if any.  Because a portion of the expected consideration is in the form ofSpark ADSs, the value of the consideration is materially dependent upon the market performance of Spark between now and the ultimateliquidation of the ADSs once received, in addition to other factors, including: (i) the amount of cash on Zoosk’s balancesheet at closing, and (ii) other payments related to the Transaction, which may be material.  

 

**TabularDisclosure of Contractual Obligations**

 

Weare currently not a party to any long-term debt obligations, purchase obligations or other long-term liabilities and thus haveomitted the tabular disclosure of contractual obligations. 

 

**OffBalance Sheet Arrangements**

 

Asof December 31, 2018, we had no off-balance sheet arrangements.

 

**CriticalAccounting Policies**

 

***Useof Estimates***

 

11 

Thepreparation of financial statements in accordance with GAAP and under the liquidation basis of accounting requires us to makeestimates and judgments that affect the reported amounts of assets (including net assets in liquidation), liabilities, revenuesand expenses, and related disclosure of contingent assets and liabilities.  We believe that our critical accounting policiesare those that require significant judgments and estimates.  These estimates are made and evaluated on an on-going basisusing information that is currently available as well as various other assumptions believed to be reasonable under the circumstances.Actual results could vary from those estimates, perhaps in material adverse ways, and those estimates could be different underdifferent assumptions or conditions. 

 

***LiquidationBasis of Accounting***

 

Underthe liquidation basis of accounting, all assets are stated at their estimated liquidation values.  Liabilities, includingestimated costs associated with implementing and completing our plan of liquidation, are stated at their estimated settlementamounts.  These amounts are presented in the accompanying statement of net assets in liquidation.  The net assets inliquidation represent the estimated liquidation value of our assets available to our beneficiaries upon liquidation.  Theactual values realized for assets and settlement of liabilities may differ materially, perhaps in adverse ways, from the estimatedamounts.  The determination of the estimated liquidation value of a portfolio company may be based on an analysis of availablefinancial results, public market comparables and other factors of such portfolio company.  Due to the uncertainty in thetiming of any anticipated sale date and the proceeds, if any, therefrom, results may differ materially from estimated amounts. Our portfolio company investments are continually evaluated and we adjust our net estimated liquidation value accordingly. 

 

***EstimatedCosts During Liquidation***

 

Underthe liquidation basis of accounting, we are required to estimate the cash flows from operations and accrue the costs associatedwith implementing and completing our plan of liquidation.  These costs are estimated and are expected to be paid over theremaining liquidation period.

 

**Item7A. Quantitative and Qualitative Disclosures about Market Risk**

 

Marketrisks include risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity pricesand other market changes that affect market sensitive instruments that are beyond our control.  We are exposed to interestrate risk through our portfolio of cash and cash equivalents. As of December 31, 2018, we had no debt or borrowed money. Additionally, none of our income-bearing debt investments in portfolio companies bore interest based on floating rates.

 

12 

**I****tem8. Financial Statements**

 

**CROSSROADSCAPITAL, INC.**

 

**INDEXTO FINANCIAL STATEMENTS**

 

| **Financial                                         Statements**                                                                        | **Page** |
|-----------------------------------------------------------------------------------------------------------------------------------------|----------|
| Unaudited Statement of Net Assets in Liquidation as of December 31, 2018 and 2017                                                       | F-1      |
| Unaudited Statement of Changes in Net Assets for the year ended December 31, 2018 and for the period June 23, 2017 to December 31, 2017 | F-2      |
| Notes to Unaudited Financial Statements                                                                                                 | F-3      |

 

13 

**CrossroadsLiquidating Trust**

**Statementof Net Assets in Liquidation (Unaudited)**

**LiquidationBasis**

 

|                                                                                     |   | **As                                         of****December                                         31,** |      |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|-----------|
|                                                                                     |   | **2018**                                                                                                  |      |   | **2017** |   |
| **Assets**                                                                               |   |                                                                                                      |      |   |   |   |   |   |
| Investments                                         in portfolio company securities      |   | $                                                                                                         | 6,027,000 |   |   | $ | 6,650,687 |   |
| Cash                                         and cash equivalents                        |   |                                                                                                      | 3,246,072 |   |   |   | 3,697,634 |   |
| Prepaid                                         expenses and other assets                |   |                                                                                                      | 30,000    |   |   |   | 12,500 |   |
| Receivable                                         for investments sold                  |   |                                                                                                      | —   |   |   |   | 7,044 |   |
| Total                                         assets                                     |   |                                                                                                      | 9,303,072 |   |   |   | 10,367,865 |   |
|                                                                                     |   |                                                                                                      |      |   |   |   |   |   |
| **Liabilities**                                                                          |   |                                                                                                      |      |   |   |   |   |   |
| Accounts                                         payable and accrued expenses            |   |                                                                                                      | 26,373    |   |   |   | 41,324 |   |
| Liability                                         for estimated costs during liquidation |   |                                                                                                      | 1,183,324 |   |   |   | 1,642,340 |   |
| Total                                         liabilities                                |   |                                                                                                      | 1,209,697 |   |   |   | 1,683,664 |   |
| **Commitments                                         and contingencies (Note 7)**       |   |                                                                                                      |      |   |   |   |   |   |
| Net                                         assets in liquidation                        |   | $                                                                                                         | 8,093,375 |   |   | $ | 8,684,201 |   |

 

*Theaccompanying notes are an integral part of these statements.*

 

F-1 

**CrossroadsLiquidating Trust**

**Statementof Changes in Net Assets (Unaudited)**

**(LiquidationBasis)**

 

|                                                                                            |   | **Year                                         Ended****December                                         31, 2018** |      |   | **Period                                         from****June                                         23, 2017 through****December 31, 2017** |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Net                                         assets in liquidation, beginning of period          |   | $                                                                                                                   | 8,684,201 |   |                                                                                                                                          | $      | 25,569,711 |   |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Cash                                         receipts:                                          |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Proceeds                                         from sales of portfolio investments            |   |                                                                                                                | 7,044     |   |                                                                                                                                          |   | — |   |
| Release                                         of funds held in escrow from sale of investment |   |                                                                                                                | —   |   |                                                                                                                                          |   | 103,148 |   |
| Interest                                         income                                         |   |                                                                                                                | 32,860    |   |                                                                                                                                          |   | 37,610 |   |
| Total                                         cash receipts                                     |   |                                                                                                                | 39,904    |   |                                                                                                                                          |   | 140,758 |   |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Cash                                         disbursements:                                     |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Liquidating                                         distributions to beneficiaries              |   |                                                                                                                | —   |   |                                                                                                                                          |   | (15,301,008 | ) |
| Operating                                         expenses                                      |   |                                                                                                                | (491,466  | )      |                                                                                                                                          |   | (526,390 | ) |
| Total                                         cash disbursements                                |   |                                                                                                                | (491,466  | )      |                                                                                                                                          |   | (15,827,398 | ) |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Changes                                         in portfolio assets:                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Change                                         in portfolio investment cost basis               |   |                                                                                                                | —   |   |                                                                                                                                          |   | (1,326,098 | ) |
| Change                                         in estimated liquidation value                   |   |                                                                                                                | (623,687  | )      |                                                                                                                                          |   | (83,720 | ) |
| Change                                         in funds held in escrow from sale of investment  |   |                                                                                                                | —   |   |                                                                                                                                          |   | (95,768 | ) |
| Total                                         changes in portfolio assets                       |   |                                                                                                                | (623,687  | )      |                                                                                                                                          |   | (1,505,586 | ) |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Other                                         items:                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Change                                         in receivable for investments sold               |   |                                                                                                                | (7,044    | )      |                                                                                                                                          |   | 7,044 |   |
| Change                                         in estimated costs during liquidation            |   |                                                                                                                | 459,016   |   |                                                                                                                                          |   | 230,808 |   |
| Changes                                         in other assets/liabilities                     |   |                                                                                                                | 32,451    |   |                                                                                                                                          |   | 68,864 |   |
| Total                                         other items                                       |   |                                                                                                                | 484,423   |   |                                                                                                                                          |   | 306,716 |   |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Total                                         changes in net assets in liquidation              |   |                                                                                                                | (590,826  | )      |                                                                                                                                          |   | (16,885,510 | ) |
|                                                                                            |   |                                                                                                                |      |   |                                                                                                                                          |   |   |   |
| Net                                         assets in liquidation, end of period                |   | $                                                                                                                   | 8,093,375 |   |                                                                                                                                          | $      | 8,684,201 |   |

 

*Theaccompanying notes are an integral part of these statements.*

 

F-2 

**CrossroadsLiquidating Trust**

**Notesto Financial Statements**

**(Unaudited)**

 

**Note1 - Description of Business **

 

CrossroadsLiquidating Trust (the “Liquidating Trust” or the “Trust”) operates as a statutory trust under the generallaws of the State of Maryland following the conversion of Crossroads Capital, Inc. (“Crossroads Capital”) into CrossroadsLiquidating Trust pursuant to a Plan of Liquidation (the “Plan”).  The sole purpose of the Trust is the liquidationof its assets and distribution of its proceeds to the holders of the beneficial interests in the Liquidating Trust. 

 

Priorto conversion, Crossroads Capital, Inc. (“Crossroads Capital”) elected to be regulated as a business development company(“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).  On June 23, 2017,Crossroads Capital and each of the trustees of the Liquidating Trust (the “Trustees”) executed the Liquidating TrustAgreement (the “Liquidating Trust Agreement”) in connection with the conversion of Crossroads Capital into CrossroadsLiquidating Trust pursuant to the Plan.  On June 23, 2017, Crossroads Capital filed Articles of Conversion with the Stateof Maryland and all of the assets and liabilities of Crossroads Capital became assets and liabilities of the Trust (the “Conversion”). Stockholders of Crossroads Capital received one unit of beneficial interest for each share of common stock held by such stockholderon the date of conversion. 

 

TheLiquidating Trust will terminate upon payment to the holders of the beneficial interests in the Liquidating Trust (“TrustUnits”) of all the Liquidating Trust’s assets and in any event upon the third anniversary of the effectiveness ofthe Conversion.  The life of the Liquidating Trust may, however, be extended to more than three years if the Trustees thendetermine that an extension is reasonably necessary to fulfill the purposes of the Trust.  The Trustees are authorized toengage the services of other professionals or service organizations to assist in managing the Liquidating Trust’s affairs. Under the Liquidating Trust Agreement, Trust Units are not transferable or assignable, except for certain exceptions describedin the Liquidating Trust Agreement.  The Trust Units are not certificated, listed on any exchange or quoted on any quotationsystem.  The Liquidating Trust Agreement provides that neither the Trustees nor anyone associated with the Liquidating Trustmay take any action to facilitate or encourage any trading in the Trust Units.  The Liquidating Trust’s activitiesare specifically limited to conserving, protecting and selling its assets and distributing the proceeds therefrom.  Theseactivities include holding the Liquidating Trust’s assets for the benefit of the holders of the Trust Units and enforcingtheir rights, temporarily investing asset sale proceeds and collecting income therefrom, providing for the liabilities of theLiquidating Trust, making liquidating distributions to the holders of Trust Units, and taking such other actions as may be necessaryto conserve and protect the assets of the Liquidating Trust.  

 

TheLiquidating Trust remains subject to the restrictions under the 1940 Act from engaging in transactions with affiliated parties,except under certain circumstances.  The Liquidating Trust is required to file with the U.S. Securities and Exchange Commission(the “SEC”) annual reports showing the assets and liabilities of the Liquidating Trust at the end of each calendaryear and its receipts and disbursements for the period.  The annual reports will describe the changes in the LiquidatingTrust’s assets during the reporting period and the actions taken by the Trustees during the period.  The financialstatements contained in such reports will be prepared in accordance with generally accepted accounting principles and will bereviewed by the Liquidating Trust’s independent registered public accounting firm; the financial statements, however, willnot be audited. The Liquidating Trust will file with the SEC a Form 8-K whenever an event occurs that requires such a report tobe filed or whenever, in the opinion of the Trustees, any other material event relating to the Liquidating Trust has occurred.

 

TheTrust has entered into agreements with MidFirst Bank to be the custodian of its portfolio securities and Frontier Bank to be thecustodian of the majority of its cash and cash equivalent assets.  1100 Capital Consulting, LLC (the “Administrator”)serves as the Trust’s administrator, performing the administrative services necessary for its operation, including withoutlimitation providing it with equipment, clerical, bookkeeping, accounting and record keeping services.

 

**Note2 - Summary of Significant Accounting Policies**

 

**Basisof Presentation**

 

Theaccompanying financial statements have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America, (“U.S. GAAP”).

 

**LiquidationBasis of Accounting**

 

Underthe liquidation basis of accounting, all assets are stated at their estimated liquidation value and liabilities, including estimatedcosts associated with implementing the Plan, are stated at their estimated settlement amounts over the remaining liquidation period. The net assets in liquidation represent the estimated liquidation value of our remaining assets available to our beneficiariesupon liquidation. The actual amounts realized for assets and settlement of liabilities may differ materially, perhaps in adverseways, from the estimated amounts. 

 

F-3 

**CrossroadsLiquidating Trust**

**Notesto Financial Statements**

**(Unaudited)**

 

Thedetermination of the estimated liquidation value of a portfolio company may be based on an analysis of available financial results,public market comparables and other factors relating to such portfolio company.  The Trust may also consider other events,including the transaction in which the securities were acquired, subsequent equity sales by the portfolio company or mergers,acquisitions or other exit events affecting the portfolio company.  The Trust considers the rights, preferences and limitationsof the securities owned in each portfolio company.  Due to the uncertainty in the timing of any anticipated sales dates ofthe Trust’s portfolio company investments and the proceeds, if any, therefrom, results may differ materially from estimatedamounts.

 

Anindependent valuation firm assisted the Trust in its determination of the estimated liquidation value of two investments as ofDecember 31, 2018.  The Administrator assisted the Trust in its determination of the estimated liquidation value of all ofthe Trust’s portfolio company investments as of December 31, 2018. 

 

**Useof Estimates**

 

Thepreparation of financial statements in conformity with U.S. GAAP and under the liquidation basis of accounting requires the Trustto make estimates and assumptions that affect the reported amounts of assets (including net assets in liquidation) and liabilitiesat the date of the financial statements and the reported amounts of income and expenses during the reported period. Such estimatesand judgments could change in the future as more information becomes known, and actual results could differ from these estimatesand the differences could be material. 

 

**Cashand Cash Equivalents**

 

Cashand cash equivalents include short-term liquid investments in demand deposit accounts and money market funds.  Cash and cashequivalents are carried at amortized cost which approximates market value. 

 

**Coststo be Incurred During Liquidation**

 

Underthe liquidation basis of accounting, an accrual is made for the estimated remaining costs to be incurred duringliquidation, including legal expenses, portfolio selling costs, accounting expenses, tax reporting expenses, contractorservices, and miscellaneous other expected future costs.  Estimates are based on assumptions regarding costs to beincurred in executing the Liquidating Trust Agreement.  The actual costs incurred during liquidation may differ, whichcould reduce net assets available in liquidation.

 

**Interestand Dividend Income**

 

Interestincome from certificates of deposit and other short-term investments is recorded on an accrual basis to the extent such amountsare expected to be collected and accrued interest income is evaluated periodically for collectability.  Payment-in-kind (“PIK”)interest represents contractually deferred interest computed at a contractual rate specified in the loan agreement.  PIKinterest may be prepaid by either contract or the portfolio company’s election, but generally is paid at the end of theloan term.  PIK interest is added to the principal balance of the loan and is generally recorded as interest income on anaccrual basis to the extent such PIK interest is expected to be collected.  The Trust did not accrue PIK interest on anyof its notes for the year ended December 31, 2018 or for the period June 23, 2017 to December 31, 2017.  As of December 31,2018, all of the Trust’s notes were on non-accrual status.

 

**IncomeTaxes**

 

TheTrust is treated as a grantor trust for federal income tax purposes and accordingly, will not be subject to federal or state incometax on any income earned or gain recognized.  The Trust beneficiaries will be treated as the owner of a pro rata portionof each asset held by us and will be required to report on his or her federal, state or foreign tax return his or her pro ratashare of taxable income, including any gains and losses recognized by the Trust.  Accordingly, there is no provision forfederal or state income taxes in the accompanying financial statements.

 

**RecentlyIssued Accounting Pronouncements**

 

Thereare no previously issued or new accounting pronouncements or changes in accounting pronouncements that have had or are expectedto have a material impact on the Trust’s financial statements.

 

F-4 

**CrossroadsLiquidating Trust**

**Notesto Financial Statements**

**(Unaudited)**

 

**Note3 - Portfolio Investments**

 

Thefollowing table outlines the type of securities held in each of the Trust’s seven portfolio companies as of December 31,2018.  See Note 7 – Subsequent Events.

 

| **Portfolio                                         Company**     | ** ** | **Shares                                         / Principal** | ** ** | **Type                                         of Investment** |
|-------------------------------------------------------------------|------------|----------------------------------------------------------------|------------|----------------------------------------------------------------|
| Agilyx                                         Corporation        |       | 16                                                             |       |                                                           | Common                                         Stock |   |
| BrightSource                                         Energy, Inc. |       | 132,972                                                        |       |                                                           | Common                                         Stock |   |
|                                                              |       | 2,134,523                                                      |       |                                                           | Series                                         1A Preferred Stock |   |
|                                                              |       | 108,136                                                        |       |                                                           | Series                                         1 Convertible Preferred Stock |   |
|                                                              | $          | 205,193                                                        |       |                                                           | Subordinated                                         Convertible Bridge Notes;PIK                                         interest 11.5%, compounded annually |   |
|                                                              | $          | 107,977                                                        |       |                                                           | Subordinated                                         Secured Notes;PIK                                         interest 11.5%, compounded annually |   |
|                                                              | $          | 44,361                                                         |       |                                                           | Senior                                         Secured Notes;PIK                                         interest 11.5%, compounded annually |   |
| Deem,                                         Inc.(1)             |       | 46,461                                                         |       |                                                           | Common                                         Stock |   |
| Metabolon,                                         Inc.           |       | 890,719                                                        |       |                                                           | Series                                         D Convertible Preferred Stock |   |
| Mode                                         Media Corporation(2) |       | 1,196,315                                                      |       |                                                           | Series                                         F Convertible Preferred Stock |   |
| Suniva,                                         Inc.(3)           |       | 2,844                                                          |       |                                                           | Class                                         A Common Stock |   |
| Zoosk,                                         Inc.(4)            |       | 715,171                                                        |       |                                                           | Series                                         E Convertible Preferred Stock |   |

 

| (1) | OnJanuary 28, 2019, Deem completed a merger transaction and the Trust’s 46,461 shares of common stock were canceled.                                     |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | ModeMedia ceased operations and subsequently announced the assignment of substantially all the assets of Mode Media to its liquidatingagent in September 2016. |
| (3) | Sunivafiled for Chapter 11 bankruptcy in April 2017.                                                                                                           |
| (4) | OnMarch 21, 2019, Zoosk entered into a definitive agreement for its acquisition by Spark Networks SE (NYSE: LOV).                                              |

 

TheTrust did not have any portfolio company activity during the year ended December 31, 2018.

 

Thefollowing table summarizes the estimated liquidation value of our portfolio company holdings as of December 31, 2018 and 2017and the change in estimated liquidation value, proceeds received and the net change in net assets in liquidation for our portfoliocompany investments for the year ended December 31, 2018. 

 

| ** **                                                            |   | **Estimated****Liquidation                                         Value**                                     |      |   | **For                                         the Year Ended****December                                         31, 2018** |   |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------|--------|
| ** **                                                            |   | **As                                         of****December                                         31, 2017** |      |   | **As                                         of****December                                         31, 2018**              |   |   | **Net                                         Change in Estimated Liquidation Value** |   |   | **Total                                         Proceeds****Received** |   |   | **Net                                         Change in Net****Assets                                         in Liquidation** |   |
| Portfolio                                         Company Investments |   | $                                                                                                              | 6,650,687 |   |                                                                                                                        | $      | 6,027,000 |   |   | $ | (623,687 | ) |   | $ | — |   |   | $ | (623,687 | ) |

 

TheTrust had the following portfolio company activity during the period June 23, 2017 to December 31, 2017:

 

OnAugust 29, 2017, the Trust acquired a $13,902 senior secured promissory note in BrightSource Energy, Inc. as part of a rightsoffering to BrightSource Energy’s Series 1 Preferred Stock and note holders.  The maturity date of the note is March1, 2018 or a later date as approved by a majority of the noteholders, or upon the consummation of certain actions as detailedtherein.

 

OnNovember 13, 2017, Harvest Power, Inc. completed a merger transaction that resulted in the receipt of $7,044 in total proceedsin exchange for the cancellation of the Trust’s Series B convertible preferred and Series A-2 preferred shares.

 

OnDecember 8, 2017, funds held in escrow from the sale of the prior Xtime investment totaling $103,148 were released to the Trustwithout any offset for indemnity claims.

 

F-5 

**CrossroadsLiquidating Trust**

**Notesto Financial Statements**

**(Unaudited)**

 

Thefollowing table summarizes the estimated liquidation value of the Trust’s portfolio company holdings as of June 23, 2017and December 31, 2017 and the change in estimated liquidation value, proceeds received and the net change in net assets in liquidationfor the Trust’s portfolio company investments for the period June 23, 2017 through December 31, 2017.

 

| ** **                                                                           |   | **Estimated****Liquidation                                         Value**                                    |      |   | **For                                         the Period****June                                         23, 2017 through December 31, 2017** |   |
|--------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ** **                                                                           |   | **As                                         of****June                                         23,****2017** |      |   | **As                                         of****December                                         31, 2017**                                |   |   | **Net                                         Change in Estimated Liquidation Value** |   |   | **Total                                         Proceeds****Received** |   |   | **Net                                         Change in Net****Assets                                         in Liquidation** |   |
| Portfolio                                         Company Investments                |   | $                                                                                                             | 8,060,505 |   |                                                                                                                                          | $      | 6,650,687 |   |   | $ | (1,409,818 | ) |   | $ | 7,044 |   |   | $ | (1,402,774 | ) |
| Funds                                         Held in Escrow from Sale of Investment |   |                                                                                                          | 95,768    |   |                                                                                                                                          |   | — |   |   |   | (95,768 | ) |   |   | 103,148 |   |   |   | 7,380 |   |
| **Total**                                                                            |   |                                                                                                          | 8,156,273 |   |                                                                                                                                          |   | 6,650,687 |   |   |   | (1,505,586 | ) |   |   | 110,192 |   |   |   | (1,395,394 | ) |

 

**Note4 - Distributions**

 

ThePlan provides that liquidating distributions will be made at such times as determined by the Trustees in their sole discretion.Consideration of potential liquidating distributions shall occur no less frequently than annually and in any event within a reasonableperiod of time following the disposition of the Liquidating Trust’s assets.

 

TheTrust did not make any liquidating distributions during 2018.

 

OnJuly 12, 2017, the Trust made an initial liquidating distribution of $1.60 per Trust Unit to the holders of beneficial interestin the Trust, pursuant to the Plan.  This initial liquidating distribution was apportioned pro rata according to the beneficialunit holders’ respective interest in the Trust.

 

**Note5 - Net Assets in Liquidation**

 

Netassets in liquidation were $8,093,375 and $8,684,201 as of December 31, 2018 and 2017, respectively.

 

***Assets***

 

Asof December 31, 2018, the Trust held seven portfolio company invesetments and had total assets of $9,303,072 which were comprisedof $6,027,000 in portfolio company investments at estimated liquidation value, $3,246,072 in cash and cash equivalents and $30,000in prepaid expenses and other assets.

 

Asof December 31, 2017, the Trust held seven portfolio company invesetments and had total assets of $10,367,865 which were comprisedof $3,697,634 in cash and cash equivalents, $6,650,687 in portfolio company investments at estimated liquidation value and $19,544in prepaid expenses and other assets.

 

***Liabilities***

 

Asof December 31, 2018, the Trust had $1,209,697 in total liabilities, comprised of $26,373 in accounts payable and accrued expensesand $1,183,324 in estimated costs related to the liquidation, including legal expenses, portfolio selling costs, accounting expenses,tax reporting expenses, contractor services, and miscellaneous other expected future costs.  As of December 31, 2018, theliability for estimated costs during liquidation included a total of $90,000 of fees to be paid to our Board of Trustees overthe remaining liquidation period.

 

Asof December 31, 2017, the Trust had $1,683,664 in total liabilities, comprised of $41,324 in accounts payable andaccrued expenses and $1,642,340 in estimated costs related to the liquidation.  As of December 31, 2017, the liabilityfor estimated costs during liquidation included a total of $150,000 of fees to be paid to the Board of Trustees over theremaining liquidation period.

 

***Changesin Net Assets***

 

Netassets in liquidation decreased $590,826, or $0.06 per Trust Unit, for the year ended December 31, 2018.  This decrease inour net assets was due primarily to: (i) a net decrease of $623,687, or $0.06 per Trust Unit, in the net estimated liquidationvalue of our portfolio company investments during the period, and (ii) an increase of $32,861, or a de minimis amount per TrustUnit, as a result of current operating expenses and other operating activities.

 

Netassets in liquidation decreased $16,885,510, or $1.76 per Trust Unit, during the period June 23, 2017 to December 31, 2017. This decrease in our net assets was due primarily to a liquidating distribution of $15,301,008, or $1.60 per Trust Unit, in July2017, a decrease of $1,505,586, or $0.16 per Trust Unit, in the net estimated liquidation value of the Trust’s portfoliocompany investments during the period and a decrease of $78,916, a de minimis amount per Trust Unit, as a result of the paymentof current operating expenses and other operating activities.

 

F-6 

**CrossroadsLiquidating Trust**

**Notesto Financial Statements**

**(Unaudited)**

 

**Note6 – Estimated Costs of Liquidation**

 

Underthe liquidation basis of accounting, the Trust is required to estimate the cash flows from operations and accrue the costs associatedwith completing the Plan, including legal expenses, portfolio selling costs, accounting expenses, tax reporting expenses, contractorservices, and miscellaneous other expected future costs.  For the year ended December 31, 2018 and for the period June 23,2017 to December 31, 2017, the Trust completed cash payments, and therefore reversed the related accrual, for $459,016 and $230,808,respectively, of liquidation costs.  The Trustees believe that the estimated costs of liquidation determined upon Conversionare still applicable as of December 31, 2018.  As a result, the Trust estimates that $1,183,324 of liquidation expenses areexpected to be paid over the remaining liquidation period.

 

**Note7 - Commitments and Contingencies**

 

OnNovember 13, 2017, Harvest Power completed a merger transaction with a third party.  In connection with the merger transaction,the Trust entered into a Contingent Payment and Release Agreement with the company, the acquirers and certain other stockholdersentitling the Trust to its pro rata interest of certain contingent payments over a four-year period in consideration of and asa condition to the release of certain actions and claims related to Harvest Power.  

 

TheTrust maintains a directors and officers liability insurance policy which provides liability insurance coverage for its Trusteesand other specified parties.  The Trust has also agreed to indemnify its Trustees to the maximum extent permitted by Marylandlaw subject to the restrictions in the 1940 Act.

 

Asof December 31, 2018, neither the Trust nor its Trustees was a party to any material legal proceedings.  However, from timeto time, the Trust may be party to certain legal proceedings incidental to the normal course of its business including the enforcementof its rights under contracts with its portfolio companies. 

 

**Note8 - Subsequent Events**

 

Inpreparing these financial statements, the Trust has evaluated events after December 31, 2018.  Except as set forth below,there were no subsequent events since December 31, 2018 that would require adjustment to or additional disclosure in thesefinancial statements. 

 

***PortfolioCompany Activity***

 

OnJanuary 28, 2019, Deem completed a merger transaction and the 46,461 shares of common stock held by the Trust were canceled. The Trust did not receive any proceeds or recognize any realized gain or loss as a result of the merger transaction.

 

OnMarch 21, 2019, Zoosk, Inc. (“Zoosk”) entered into a definitive agreement for its acquisition by Spark Networks SE(“Spark”) (NYSE: LOV) (the “Transaction”).  The Transaction, which is expected to close early inthe third quarter of 2019, would provide the Trust a combination of cash and Spark American Depository Shares (“ADSs”)in exchange for its Series E convertible preferred stock in Zoosk, in addition to a deferred, contingent cash payment expectedto be paid on or around December 31, 2020.  The total value of the consideration expected to be received by the Trust asa result of the Transaction, if the Transaction closes, will not be known until receipt of the cash and ADS consideration at closing,and the receipt of the deferred cash payment, if any.  Because a portion of the expected consideration is in the form ofSpark ADSs, the value of the consideration is materially dependent upon the market performance of Spark between now and the ultimateliquidation of the ADSs once received, in addition to other factors, including: (i) the amount of cash on Zoosk’s balancesheet at closing, and (ii) other payments related to the Transaction, which may be material.  

 

F-7 

**Item9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**

 

None.

 

**Item9A. Controls and Procedures**

 

**Evaluationof Disclosure Controls and Procedures**

 

Asof December 31, 2018 (the end of the period covered by this annual report), we evaluated the effectiveness of our disclosure controlsand procedures as defined in Rule 13a-15(e) of the Exchange Act.  Based on that evaluation, we concluded that our disclosurecontrols and procedures were effective and provided reasonable assurance that information required to be disclosed by us in thereports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, asappropriate, to allow timely decisions regarding required disclosure.  However, in evaluating the disclosure controlsand procedures, we believe that a controls system, no matter how well designed and operated, can provide only reasonable assuranceof achieving the desired control objectives, and no evaluation of controls can provide absolute assurance that all control issuesand instances of fraud or error, if any, within an entity have been detected.

 

**Management’sReport on Internal Control over Financial Reporting**

 

TheTrustees, with the Administrator, are responsible for establishing and maintaining adequate internal control over financial reportingand performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018 basedupon the criteria set forth in *Internal Control - Integrated Framework* issued by the Committee of Sponsoring Organizationsof the Treadway Commission.  Based on that assessment, management determined that our internal control over financial reportingwas effective as of December 31, 2018.

 

**Changesin Internal Control over Financial Reporting**

 

Therehas been no change in internal control over financial reporting that occurred during the year ended December 31, 2018 that hasmaterially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

**Item9B. Other Information**

 

None.

 

14 

**PARTIII**

 

**Item10.  Directors, Executive Officers and Corporate Governance**

 

Wehave no directors or executive officers.  The Trustees manage the business affairs and assets of the Trust.

 

**Responsibilitiesof our Trustees**

 

Pursuantto the Liquidating Trust Agreement, the Trustees shall be responsible for the general policies of the Trust and for the generalsupervision of the activities of the Trust.  The Trustees shall have the power to contract third parties to assist with managementof our operations.

 

**AuditCommittee**

 

TheTrust does not have an audit committee or other committee that performs similar functions and, consequently, has not designatedan audit committee financial expert.  

 

**Sections16(a) Beneficial Ownership Reporting Compliance**

 

Section16(a) of the Exchange Act requires that each director, officer, and individual beneficially owning more than 10% of a registeredsecurity report their ownership of such securities and any subsequent changes in that ownership to the SEC.  Based solelyon a review of the written statements and copies of such reports furnished to us pursuant to Section 16(a) of the Exchange Act,to the best of our knowledge, we believe that all Section 16(a) filing requirements applicable to the Trust, if any, were timelysatisfied.

 

**Codeof Ethics**

 

Wehave not adopted a code of ethics nor do we currently intend to due to the fact that we have no employees and our Trustees manageour business and affairs subject to fiduciary duties.  Our Trustees intend to promote honest and ethical conduct, full andfair disclosure in our reports to the SEC and compliance with applicable governmental laws and regulations.

 

**Item11.  Executive Compensation**

 

Asof December 31, 2018, we had no directors or executive officers.  The Trustees manage the business affairs and assets ofthe Trust.  Pursuant to the Liquidating Trust Agreement, the Trustees are entitled to receive fees and compensation for theirservices as Trustees.  The following table sets forth compensation to the Trustees for the year ended December 31, 2018.

 

| **Trustee**                                               |   | **Fees                                         Earned or Paid in Cash** |   |   | **All                                         Other Compensation** |    |          | **Total** |   |
|-----------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|---------|---------------|-----------|--------|
| Andrew                                         Dakos      |   | $                                                                       | 20,000 |   |                                                               | $  |  — |      |   | $ | 20,000 |   |
| Phillip                                         Goldstein |   | $                                                                       | 20,000 |   |                                                               | $  |  — |      |   | $ | 20,000 |   |
| Gerald                                         Hellerman  |   | $                                                                       | 20,000 |   |                                                               | $  |  — |      |   | $ | 20,000 |   |

 

**Item12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters**

 

**PrincipalBeneficiaries**

 

TheTrust does not have any “voting securities” within the meaning of the Exchange Act and the regulations thereunderapplicable to the disclosure of 5% holders of voting securities.

 

Thefollowing table sets forth information as of December 31, 2018 regarding the beneficial ownership of units by each of our Trustees. The percentage of beneficial ownership is calculated based on 9,563,130 units of beneficial interest. 

 

| **Beneficial                                         Owner** |   | **Beneficial                                         Interest Units Owned Beneficially** |       |   | **Percentage                                         of Class** |   |
|--------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|------------|--------|-----------------------------------------------------------------|--------|
| ** **                                                   |   |                                                                                     | ** ** |   |                                                            |   | ** ** |   |
| **Trustees**                                                 |   |                                                                                     | ** ** |   |                                                            |   | ** ** |   |
| Phillip                                         Goldstein(1) |   |                                                                                     | 1,119,008  |   |                                                            |   | 11.70 | % |
| Andrew                                         Dakos(1)      |   |                                                                                     | 1,119,008  |   |                                                            |   | 11.70 | % |
| Gerald                                         Hellerman     |   |                                                                                     | —    |   |                                                            |   | — | % |

 

15 

| (1)
  | As                                         of December 31, 2018, Bulldog Investors, LLC is deemed to be the beneficial owner of                                         1,119,008 units of the Trust. These 1,119,008 units of the Trust include 596,438 units                                         that are beneficially owned by the following entities over which Messrs. Goldstein, Dakos                                         and Samuels exercise control: Opportunity Partners LP, Calapasas West Partners LP, Full                                         Value Special Situations Fund, LP, Full Value Partners, LP, and MCM Opportunity Partners,                                         LP (collectively, “Bulldog Investors Group of Funds”). Bulldog Investors                                         Group of Funds may be deemed to constitute a group. All other units included in the aforementioned                                         1,119,008 units of the Trust beneficially owned by Bulldog Investors, LLC are also beneficially                                         owned by clients of Bulldog Investors, LLC who are not members of any group. The total                                         number of these “non-group” units is 522,570 units. |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 **EquityCompensation Plan Information**

 

TheTrust does not have any equity compensation plans.

 

**Item13.  Certain Relationships and Related Transactions, and Director Independence**

 

**Transactionswith Related Persons**

 

Pursuantto the Liquidating Trust Agreement, the Trustees are entitled to receive fees and compensation for their services as Trusteescomparable to that paid by Crossroads Capital to its independent directors prior to the Conversion.  Each Trustee previouslyserved on the Board of Directors of Crossroads Capital, Inc.  For the year ended December 31, 2018 and for the period June23, 2017 to December 31, 2017, we paid a total of $60,000 and $30,000, respectively, in trustee fees to the Trustees.  Wehad no payables to related parties as of December 31, 2018 or 2017.  As of December 31, 2018, the liability for estimatedcosts during liquidation included a total of $90,000 of fees to be paid to the Board of Trustees over the remaining liquidationperiod.

 

**TrusteeIndemnification**

 

Pursuantto the Liquidating Trust Agreement, the Trust shall, to the maximum extent permitted by law, indemnify the Trustees against, andhold the Trustees harmless as to, any and all claims, actions, liabilities and expenses (including reasonable attorneys’fees), arising out of or in connection with their service as trustee under the Liquidating Trust Agreement or any acts or omissionstaken or omitted to be taken as trustee under the Liquidating Trust Agreement, except to the extent that it is finally determinedthat the Trustee did not act in good faith or such actions or omissions constitute gross negligence or willful misconduct on thepart of the Trustee.  

 

**I****tem14.  PrincipalAccountant Fees and Services**

 

Notapplicable.

 

16 

**PARTIV**

 

**Item15.  Exhibits and Financial Statement Schedules**

 

Thefollowing exhibits are included, or incorporated by reference, in this Annual Report on Form 10-K for the year ended December31, 2018 (and are numbered in accordance with Item 601 of Regulation S-K).

 

**a.Financial Statement Schedules**

 

Seethe Index to the Financial Statements at page 13 of this report.

 

**b.Exhibits**

 

Thefollowing exhibits are filed as part of this Annual Report or hereby incorporated by reference to exhibits previously filed withthe SEC:

 

| Exhibit                                         No. |   | Description                                                                                                                                                                                                                                                                                                                               |
|-----------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                                                 |   | Plan                                         of Liquidation, dated May 3, 2016 (Incorporated by reference to Current Report on Form                                         8-K filed on June 23, 2017)                                                                                                                                   |
| 3.1                                                 |   | Articles                                         of Conversion, as filed with the State Department of Assessments and Taxation of the                                         State of Maryland on June 23, 2017 (Incorporated by reference to Current Report on Form                                         8-K filed on June 23, 2017) |
| 3.2                                                 |   | Certificate                                         of Trust, as filed with the State Department of Assessments and Taxation of the State                                         of Maryland on June 23, 2017 (Incorporated by reference to Current Report on Form 8-K                                         filed on June 23, 2017)   |
| 10.1                                                |   | Liquidating                                         Trust Agreement, dated June 23, 2017 (Incorporated by reference to Current Report on                                         Form 8-K filed on June 23, 2017)                                                                                                                         |
| 31.1*                                               |   | Certification of Trustee pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        |
| 31.2*                                               |   | Certification of Trustee pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        |
| 31.3*                                               |   | Certification of Trustee pursuant to Section 302 of The Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        |
| 32.1*                                               |   | Certification of Trustee pursuant to Section 906 of The Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                        |

 

*Filedherewith.

 

**c.Financial statement schedules**

 

Nofinancial statement schedules are filed herewith because (i) such schedules are not required, or (ii) the information has beenpresented in the aforementioned financial statements.

 

**Item16.  Form 10-K Summary**

 

**None.**

 

17 

**SIGNATURES**

 

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

 

|                                                   | CROSSROADS                                         LIQUIDATING TRUST  |
|--------------------------------------------------------|-----------------------------------------------------------------------|
|                                                   |                                                                  |
| March                                         28, 2019 | /s/                                         Andrew Dakos              |
|                                                   | **Andrew                                         Dakos**

**Trustee** |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalfof the registrant and in the capacity and on the dates indicated.

 

|                                                   | /s/                                         Andrew Dakos                   |
|--------------------------------------------------------|----------------------------------------------------------------------------|
| March                                         28, 2019 | **Andrew                                         Dakos**

**Trustee**      |
|                                                   |                                                                       |
|                                                   | /s/                                         Phillip Goldstein              |
| March                                         28, 2019 | **Phillip                                         Goldstein**

**Trustee** |
|                                                   |                                                                       |
|                                                   | /s/                                         Gerald Hellerman               |
| March                                         28, 2019 | **Gerald                                         Hellerman**

**Trustee**  |

 

18