Document ID: SEC-2022-0194-0001
Agency: sec
Document Type: Notice
Title: Application: Millennium Investment and Acquisition Co., Inc.
Posted Date: 2022-02-08T05:00Z

[Federal Register Volume 87, Number 26 (Tuesday, February 8, 2022)]
[Notices]
[Pages 7215-7217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-02523]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34495; 811-22156]

Millennium Investment & Acquisition Co Inc.

February 2, 2022.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of application for deregistration under Section 8(f) of the 
Investment Company Act of 1940 (the ``Act'').

Summary of Application: Millennium Investment & Acquisition Co Inc. 
requests an order declaring that it has ceased to be an investment 
company.

Applicant: Millennium Investment & Acquisition Co Inc.

Filing Dates: The application was filed on March 1, 2021 and was 
amended on May 11, 2021, December 9, 2021 and January 21, 2022.

Hearing or Notification of Hearing: An order granting the request will 
be issued unless the Commission orders a hearing. Interested persons 
may request a hearing by emailing the Commission's Secretary at 
[email protected] and serving Applicant with a copy of the 
request by email. Hearing requests should be received by the Commission 
by 5:30 p.m. on February 28, 2022 and should be accompanied by proof of 
service on Applicant, in the form of an affidavit, or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by emailing to the 
Commission's Secretary at [email protected].

ADDRESSES: The Commission: [email protected]. Applicants: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel; Lisa 
Reid Ragen, Branch Chief, at (202) 551-6825 (Division of Investment 
Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

[[Page 7216]]

Applicant's Representations

    1. Applicant is a Delaware corporation and is an internally 
managed, non-diversified, closed-end management investment company 
registered under the Act. Applicant states that it is in the business 
of owning and operating businesses that produce activated carbon and 
sustainably cultivate cannabis in greenhouses and that it is no longer 
engaged or proposing to engage, or holding itself out as being, in the 
business of investing, reinvesting, owning, holding, or trading in 
securities.
    2. On August 14, 2020, Applicant announced that its Board of 
Directors (the ``Board'') unanimously approved a proposal to deregister 
as a registered investment company with the Commission (the 
``Deregistration Proposal'') in its filing of a preliminary proxy 
statement with the Commission (the ``Proxy Statement''). On or about 
September 3, 2020, Applicant mailed to shareholders the Proxy Statement 
soliciting shareholder approval of the Deregistration Proposal. The 
Proxy Statement also stated that, after deregistering as an investment 
company, Applicant would no longer be subject to regulation under the 
Act. In addition, the Proxy Statement explained that Applicant would 
continue to be managed by Applicant's sole current officer and overseen 
by the Board, which would maintain substantially similar power, 
authority and discretion as the Board had before deregistration and be 
subject to the same duties under state law. Applicant held a meeting of 
shareholders (the ``Shareholder Meeting'') on October 14, 2020, at 
which the Deregistration Proposal was approved.
    3. Applicant states that as of September 30, 2021, Applicant's 
unconsolidated assets were comprised solely of (i) ``cash items'' (as 
that term has been interpreted for purposes of Section 3(a)(1)(C) of 
the Act) and (ii) interests in consolidated subsidiaries. Applicant 
further states that it owns greater than 50% of the voting securities 
of each of the consolidated subsidiaries (other than a newly formed 
cannabis operator, Walsenburg Cannabis LLC (``WC''), where it will own 
greater than 50% of WC's outstanding voting securities once it receives 
approval for holding cannabis licenses in Colorado) and controls 
(within the meaning of Section 2(a)(9) of the Act) each of the 
consolidated subsidiaries. Applicant represents that no consolidated 
subsidiary is an ``investment company'' within the meaning of Section 
3(a) of the Act, and that no consolidated subsidiary is relying on the 
exception from the definition of ``investment company'' in Sections 
3(c)(1) or 3(c)(7) of the Act.
    4. Applicant states that as of September 30, 2021, the value of 
securities issued by the consolidated subsidiaries and owned by 
Applicant was 100% of the value of Applicant's total assets, exclusive 
of ``Government securities'' (as defined in the Act) and ``cash items'' 
(as that term has been interpreted for purposes of Section 3(a)(1)(C) 
of the Act), on an unconsolidated basis (``Adjusted Total Assets''). As 
of September 30, 2021, the assets of the consolidated subsidiaries were 
collectively comprised of (i) ``cash items'' (as that term has been 
interpreted for purposes of Section 3(a)(1)(C) of the Act), (ii) 
security deposits and other assets, (iii) property, plant and 
equipment, (iv) inventory and (v) right-of use (lease) assets. 
Applicant represents that no consolidated subsidiary owns any 
``investment securities'' (as defined in Section 3(a)(2) of the Act), 
and that no consolidated subsidiary is therefore an investment company 
within the meaning of Section 3(a)(1)(C) of the Act. Applicant states 
that the consolidated subsidiaries are operating companies primarily 
engaged in the production of activated carbon or the cultivation of 
cannabis. Applicant states that it may establish other controlled 
subsidiaries to carry out specific activities, as noted below, 
consistent with Applicant's business of owning and operating businesses 
focused on activated carbon, cannabis cultivation and other private 
businesses it may acquire.
    5. Applicant represents that it is anticipated that deregistration 
will have no unfavorable tax consequences to Applicant or its 
shareholders. Applicant states that it is currently taxed at the entity 
level as a ``C-corporation'' by Federal and State tax authorities, and 
anticipates that it will continue to be taxed as a C-corporation after 
deregistration.
    6. Applicant states that its periodic reports to shareholders, 
investor presentations, press releases and website all indicate that 
Applicant is implementing the Deregistration Proposal in accordance 
with the disclosure in the Proxy Statement, and describe Applicant's 
activated carbon and cannabis cultivation businesses. As a result of 
these efforts, Applicant states that it is and holds itself out as a 
holding company in the business of owning and operating businesses that 
produce activated carbon and sustainably cultivate cannabis in 
greenhouses.
    7. In addition, Applicant represents that on October 1, 2021 it 
filed a name change application with FINRA seeking to change its name 
to Millennium Sustainable Ventures Corp. Applicant states that there 
can be no assurance as to when, or if, FINRA will approve the name 
change, and represents that it will not raise new capital until it has 
completed its name change.
    8. Applicant states that its current business activities will not 
materially change upon receipt of the requested Order and completion of 
the deregistration process. Applicant states that it currently operates 
in the activated carbon and cannabis cultivation industries, and the 
activities of Applicant and Applicant's directors and officers reflect 
these operations and indicate that Applicant no longer operates as an 
investment company, but rather is currently focused on owning and 
operating businesses that produce activated carbon and sustainably 
cultivate cannabis in greenhouses. Applicant states that it is 
currently internally managed with David H. Lesser serving as Chairman 
of the Board, CEO, Secretary and Treasurer. Applicant states that Mr. 
Lesser is responsible for managing the business affairs and day-to-day 
activities of Applicant. Applicant states that since Mr. Lesser became 
Applicant's sole officer and a director on October 3, 2013, he been 
working to shift Applicant's business to that of an operating company 
focused on operating businesses. As part of this shift, Mr. Lesser has 
led the acquisition and development of Applicant's activated carbon and 
cannabis cultivation businesses, together with the divestment of 
Applicant's ``investment securities'' (as defined in Section 3(a)(2) of 
the Act).
    9. Applicant states that it fully liquidated its sole investment 
security position on June 1, 2021. Applicant states that it presently 
operates businesses in the activated carbon and cannabis cultivation 
industries and is seeking to generate income from the existing and 
future operations of these businesses. Applicant further represents 
that it presently is not generating revenue and is in a net loss 
position and that substantially all of Applicant's net loss for the 
three and nine months ended September 30, 2021 was attributable to 
operating expenses. Applicant represents that it derives no material 
portion of its net income after taxes from investment securities, and 
Applicant represents that no subsidiary of Applicant expects to derive 
a material portion of its net income after taxes from investment 
securities. Applicant

[[Page 7217]]

represents that upon deregistering as an investment company, Applicant 
and its consolidated subsidiaries will not derive a material portion of 
their gross income from investment security assets.
    10. Upon the issuance of the requested Order, Applicant represents 
that it will issue a press release to shareholders indicating that it 
is no longer a registered investment company and will cease indicating 
in its financial statements that it is a registered investment company.
    11. Applicant states that it is not currently a party to any 
administrative proceeding or material litigation.

Applicant's Legal Analysis

    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an ``investment company'' 
as any issuer which ``is or holds itself out as being engaged 
primarily, or proposes to engage primarily, in the business of 
investing, reinvesting, or trading in securities.'' Section 3(a)(1)(B) 
of the Act defines an ``investment company'' as any issuer which ``is 
engaged or proposes to engage in the business of issuing face-amount 
certificates of the installment type, or has been engaged in such 
business and has any such certificate outstanding.''
    3. Section 3(a)(1)(C) of the Act defines an ``investment company'' 
as any issuer which ``is engaged or proposes to engage in the business 
of investing, reinvesting, owning, holding, or trading in securities, 
and owns or proposes to acquire investment securities having a value 
exceeding 40 per centum of the value of such issuer's total assets 
(exclusive of Government securities and cash items) on an 
unconsolidated basis.'' Section 3(a)(2) of the Act defines ``investment 
securities'' as ``all securities except (A) Government securities, (B) 
securities issued by employees' securities companies, and (C) 
securities issued by majority-owned subsidiaries of the owner which (i) 
are not investment companies, and (ii) are not relying on the exception 
from the definition of investment company in paragraph (1) or (7) of 
subsection (c).''
    4. Applicant states that it is no longer an investment company as 
defined in section 3(a)(1)(A), 3(a)(1)(B) or section 3(a)(1)(C). With 
regard to section 3(a)(1)(A), Applicant represents that it is currently 
focused primarily on owning and operating businesses that produce 
activated carbon or cultivate cannabis, and argues that its historical 
development, its public representations, the activities of its 
directors and officers, and the nature of its present assets support 
this assertion.
    5. With regard to section 3(a)(1)(B), Applicant represents that it 
is not engaged, and does not propose to engage, in the business of 
issuing face-amount certificates of the installment type, has not been 
engaged in such business and does not have any such certificate 
outstanding.
    6. With regard to section 3(a)(1)(C), Applicant represents that it 
owns more than 50% of the voting securities of each of its consolidated 
subsidiaries (other than WC until Applicant receives approval for 
Colorado regulators to hold cannabis licenses at which point it will 
own more than 50% of the voting securities of WC) and will own at least 
50% of the voting securities of other non-investment company 
subsidiaries it may form or acquire to ensure the value of investment 
securities owned by Applicant is less than 40% of the value of 
Applicant's Adjusted Total Assets.\1\
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    \1\ Applicant represents that it possess an economic interest in 
WC, through a convertible loan arrangement, that results in 
Applicant having the right to substantially all of the rewards and 
bearing substantially all of the risks of ownership of WC through 
this convertible loan arrangement. Applicant states that WC has no 
steady income, that Applicant funds virtually all of WC's expenses 
through the convertible loan arrangement, and that WC's sole 
managing member is the president of Millennium Cannabis, LLC, a 
wholly-owned subsidiary of Applicant. Applicant further states that 
even if its interest in WC were not considered sufficient to make WC 
the equivalent of a majority-owned subsidiary of Applicant for 
purposes of the Act, Applicant would (a) consider the fair value of 
its loan to WC as of September 30, 2021 to be $671,000, which is the 
value advanced under the loan as of September 30, 2021 and (b) 
remove the ``right of use'' asset on its balance sheet attributable 
to WC of $5,325,848. Applicant states that this would result in the 
WC loan representing approximately 1.71% of Applicant's Adjusted 
Total Assets, which is less than 40% of the value of Applicant's 
Adjusted Total Assets. Therefore, Applicant represents that the 
treatment of WC is immaterial to the analysis of whether Applicant 
is an investment company within the meaning of Section 3(a)(1)(C) of 
the Act.
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    7. Applicant states that none of its consolidated subsidiaries is 
an ``investment company'' within the meaning of Section 3(a) of the 
Act, and no consolidated subsidiary is relying on the exception from 
the definition of investment company for private funds set forth in 
Section 3(c)(1) or 3(c)(7) of the Act.
    8. Applicant states that it is thus qualified for an order of the 
Commission pursuant to section 8(f) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
J. Matthew DeLesDernier,
Assistant Director.
[FR Doc. 2022-02523 Filed 2-7-22; 8:45 am]
BILLING CODE 8011-01-P