text:
To embed, copy and paste the code into your website or blog:
A Small Business Investment Company (SBIC) is a privately owned and operated company that makes long-term investments in American small businesses and is licensed by the United States Small Business Administration (SBA).
A principal reason for a company to become licensed as an SBIC is access to financing (Leverage) provided by SBA. In addition, banks and Federal savings associations (as well as their holding companies) have the ability to own or to invest in SBICs and thereby to own indirectly more than 5 percent of the voting stock of a small business,1 and can receive Community Reinvestment Act credit for SBIC investments. Banks and their holding companies also receive exemptions from certain capital charge regulations and lending "affiliation" rules under the Gramm-Leach-Bliley Act. A business seeking a U.S. Government contract that is a set aside for small businesses does not lose its status as a small business by reason of a control investment by an SBIC. Many Business Development Companies (BDCs) also have formed SBIC "subsidiaries" as part of their business strategies.
This document provides a summary description of the SBIC Debenture program, SBA Leverage in the form of Debentures and a general overview of SBA regulations and policies applicable to Debenture SBICs.
The U.S. Small Business Administration
SBA, an independent Federal agency, administers the SBIC Program through its Investment Division (which employs approximately 80 people). SBA is an independent Federal agency, located at 409 Third Street, SW, Washington, DC 20006. Useful information about the SBIC Program is available on SBA's Web site at www.sba.gov/INV or may be obtained by contacting Samuel J. Boyd, Jr. (202.205.7546) or Scott Schaefer (202.205.6514).
The SBIC industry is served by an active trade association, the Small Business Investor Alliance (SBIA) (formerly known as the National Association of Small Business Investment Companies), which is located at 1100 H Street, NW, Suite 610, Washington, DC 20005 (202.628.5055), http://www.sbia.org. SBIA's President is Brett Palmer. Kristi Craig is SBIA's Vice President of Business Development and formerly served as SBA's Director of Program Development. SBIA provides a variety of information and services to its members and represents the industry with SBA and on Capitol Hill. SBIA publishes a regular newsletter and is a resource for information concerning the SBIC Program.
Development of SBIC Program
Established by the United States Congress in 1958 to stimulate long-term investment in American small businesses, the SBIC Program has evolved into a significant factor in financing smaller American businesses. Over the years, SBICs have provided over $63 billion of funding to more than 115,000 businesses, including well-known companies such as Apple Computer, Federal Express, Cray Computers, Callaway Golf and Outback Steakhouse.
The SBIC Program has undergone significant changes since its creation in 1958. The original Program permitted only Debenture Leverage. The Small Business Equity Enhancement Act of 1992 drastically changed the SBIC program. It created a new form of SBA Leverage known as "Participating Securities" (essentially preferred limited partnership interests); increased the amount of Leverage available to an SBIC to $90 million (which subsequently was indexed to reflect changes in the cost of living since March 31, 1993 and then modified in 2009 to be $150 million); required minimum private capital of $10 million for SBICs using Participating Securities and $5 million for SBICs using Debentures; provided for stricter SBA licensing standards; and enacted other changes to make the program more consistent with the private venture capital industry. Unlike the Debenture program which requires periodic interest payments, the Participating Securities program required an SBIC to pay SBA a prioritized payment (preferred return) and a profit share when the SBIC realized profits. As a consequence, the Participating Securities program was designed to permit investing in equity securities whether or not those securities had a current pay component. This new program resulted in a large expansion of the number of SBIC licenses granted. Following the burst of the "technology bubble" in 2002, the Administration decided there was no longer a need for an equity SBIC program and that the existing Participating Securities program would result in significant losses to SBA. Accordingly, SBA decided to terminate the program and announced that beginning on October 1, 2004, it would neither issue commitments to use Participating Securities Leverage nor license new SBICs using that Leverage.
SBA officials continue to emphasize that they believe the SBIC Debenture program is working well and they want to expand it. During the last three years SBA has conducted significant outreach to institutional investors, bank regulators and prospective applicants in order to enlarge the existing Debenture program and to create ways for SBICs to make certain kinds of equity investments without undermining the financial integrity of the Debenture program.
As of March 31, 2013,2 there were 296 licensed SBICs with approximately $12.7 billion of private capital and $7.16 billion of outstanding SBA Leverage. 165 of these SBICs use Debentures; 76 use Participating Securities; 44 do not use Leverage; and 11 are specialized SBICs.
In the Federal fiscal year (October 1 – September 30) (FY) ended September 30, 2012, SBA licensed a total of 30 SBICs with approximately $1 billion of private capital. Twelve new SBIC licenses were issued in the first half of FY 2013 with aggregate private capital of $450 million.
SBA Leverage
SBA currently provides financing (called "Leverage") to SBICs in the form of "Debentures." Debentures are unsecured ten-year loans issued by the SBIC that have interest only payable semi-annually. Most Debentures bear a temporary interest rate based on LIBOR. The interest rate on these Debentures is fixed when the SBA pools Debentures from various SBICs and sells them to the public, with the pooled Debentures having a 10-year maturity from the sale date. The interest rate recently has been between 85 and 130 basis points in excess of the interest swap rate on Treasury Notes with 10-year maturities (the "Treasury Note Rate"). As of March 31, 2013, there were $5.85 billion of Debentures outstanding, plus $2.2 billion of undrawn commitments to issue Debentures.
LMI and Energy Saving Debentures
More than a decade ago SBA created "LMI Debentures" for use by SBICs making equity investments in Low and Moderate Income Zones (LMI Zones) or in companies with significant numbers of employees in LMI Zones that are more fully described below under the heading "LMI Debentures." As of the present time, less than $87 million of LMI Debentures have been issued and only $33.05 million are outstanding. In addition, on April 19, 2012, SBA published final regulations authorizing a limited amount of so-called energy saving Debentures which would enable SBICs licensed after 2008 to acquire equity securities in energy saving qualified investments using Debentures. No Energy Saving Debentures have been issued.
Early Stage SBIC Initiative
On January 31, 2011, the Administration announced its "Start-Up America Initiative," which, among other things, had as its purpose to promote high-growth entrepreneurship across the country with new programs to help encourage private sector investment in startups and small firms. As part of this initiative, the SBA published final regulations on April 27, 2012, that established a new type of SBIC called an "Early Stage SBIC." An Early Stage SBIC must have at least 50 percent of its financings in companies that have never achieved positive cash flow from operations in any fiscal year at the time of initial investment. Licensees must have a minimum of $20 million of "Regulatory Capital" and may use SBA Leverage at a ratio of Leverage to Regulatory Capital that does not exceed 1:1. The maximum amount of Leverage available to an Early Stage SBIC is limited to $50 million. Early Stage SBICs may use one of two kinds of special Debentures: (a) Debentures similar to ordinary Debentures described herein except that interest is payable quarterly and the SBIC must establish an interest reserve sufficient to pay 21 quarters of interest at the time the Debentures are issued, or (b) "zero coupon" Debentures that deduct the first 5 years of interest at the time of issuance and have interest payable quarterly during the last 5 years of their 10 year term. SBA has set aside $1 billion of Debentures to be allocated to Early Stage SBICs in the five FYs starting in FY 2012. The Regulations provide that Early Stage SBICs are subject to all the regulations that pertain to SBICs using traditional SBA Debentures, but with specified changes.3 To date, SBA has licensed only two Early Stage SBICs but expects to license an additional 2-3 by the end of FY 2013.
Impact Investment Program
As part of the Start-Up American Program, the SBA also approved the creation of an Impact Investment Fund Program and set aside an aggregate of $1 billion of Debenture Leverage to be distributed over five years, commencing with FY 2011. The impact investment fund program would license funds that invest growth capital in companies located in underserved communities (including economically distressed areas) and in designated sectors, including clean energy and education. An SBIC in this program may be limited in the amount of Debentures it is permitted to reserve and draw. Only two SBICs have been licensed under this program, only one of which uses SBA Leverage.
Business Development Companies
A significant number of the 31 publicly traded BDCs which are characterized as secured lenders have SBIC "subsidiaries" using Debentures or are actively considering their formation. BDC owned SBICs are generally able to use up to $150 million of Debentures on a 2:1 ratio to the amount of capital contributed to the SBIC. BDCs also may form more than one SBIC and thereby use up to $225 million of Debentures at one time (which is expected to be increased by Congress within the next year to $350 million). Formation of a second SBIC is subject to SBA policies that generally apply to the formation of second funds (requiring successful operations of the first fund for at least two years, among other requirements). SBIC subsidiaries of BDCs, like other SBICs, are required to have a limited life, typically with a five year investment period followed by a 5 year harvest period, and may not be formed with perpetual existence.
Reserving and Drawing Leverage
SBICs obtain Leverage by obtaining a "Leverage Commitment" and then drawing down Leverage from the Commitment. Leverage Commitments may be obtained at the time of licensing for an amount up to one tier4 of Leverage (subject to availability) and as needed thereafter, but not more than twice in any FY. When a Leverage Commitment is issued, the SBIC pays a "one time" commitment fee that is 1 percent of the amount of the Commitment. A Commitment expires on September 30 of the fourth FY following the fiscal year of its issuance.
SBICs may apply twice a month to draw down Leverage Commitments. SBA's approval of a draw request is good for 58 days, and an SBA can make a draw against the approval on one day's notice. SBA only permits draws of "one-half tier" of Leverage to a newly licensed SBIC before SBA conducts its first regulatory examination (6-10 months after licensure).
Typical Use of Leverage
A management team may hold a closing and form its fund at any time before or after it files its formal SBIC application.5 However, it may not obtain Leverage until it receives its license, a process that is currently taking about six months from the date that SBA accepts for filing a license application.6 After the license application is accepted by SBA for processing, most applicants draw their private capital to pay organization expenses, management fees and make investments. In any event, an SBIC is required to have drawn at least $2.5 million of private investors' capital prior to licensing. Once licensed, most SBICs fund their operations solely by using SBA Leverage until the ratio of outstanding Leverage to paid-in capital from private investors (called "Leverageable Capital") reaches two-to-one, and they then coordinate capital calls from private investors with the use of Leverage to maintain a two-to-one Leverage-to-drawn Private Capital ratio.7 SBICs are permitted to borrow money from banks or other unaffiliated third parties prior to their initial Leverage draw which SBA requires to be repaid when Leverage is first drawn.
Leverage Availability
The stimulus legislation enacted in 2009 increased available Leverage for a single SBIC to $150 million and Leverage for a group of commonly managed SBICs to an aggregate of $225 million (this aggregate amount would increase to $350 million if proposed legislation is adopted, which industry leaders believe likely in 2013).8 The amount of Leverage Commitments available to an SBIC is its Regulatory Capital (this is defined in footnote 4) multiplied by the tiers of Leverage that SBA has approved for the SBIC.
SBA generally obtains funding for these draws from an interim credit facility provided by the Federal Home Loan Bank of Chicago. At the time of each disbursement, fees totaling 2.425 percent are deducted from the amount the SBIC receives (a 2 percent "user" fee payable to SBA, 37.5 basis points of underwriting fees and 5 basis points as an administrative fee to the Selling Agent).9 The SBIC pays an interim interest rate on most Debenture Leverage equal to the sum of LIBOR (based on the number of days to the expected pooling and sale date), plus 30 basis points and the amount of SBA's "Charge" described below. Every six months, Leverage using the interim loan facility is pooled by SBA and a new interest rate for the pooled Debentures is established which is then fixed until the Leverage is repaid. Debentures are currently pooled and sold to the public in March and September of each year. Certain Debentures, such as those issued to Early Stage SBICs, are not pooled but rather are funded by the Federal Home Loan Bank of Chicago, with the Debentures pledged as collateral.
The amount of Debenture Commitments that may be issued each year is subject to the amount authorized by Congress. In recent years, Congress has enacted authorized levels in three-year cycles. For FY 2013, $3 billion of Debenture Commitments is available.
Trust Certificates representing an interest in the pooled Debentures are sold with the assistance of investment bankers (who receive a 37.5 basis point fee) to institutional purchasers of government-guaranteed, fixed rate notes with 10-year maturities. The interest rate on Trust Certificates is a premium over the 10-year Treasury Note Rate. Recently the premium has been as high as 2.273 percent in the pooling in September 2008, but in the September 2012 pooling it was 0.550 percent and in the March 2013 pooling it was 0.412 percent.
Historically, the amount of Debenture Commitments that could be issued each year was subject to an annual Congressional appropriation of an amount necessary to cover anticipated losses on the Leverage issued. Thus, the amount of Congressional appropriation and the rate of loss anticipated on the issued Leverage (referred to as the "Subsidy Rate") determined the actual amount of available Leverage each year, typically resulting in significantly less Leverage availability than the level "authorized" by Congress. Beginning on September 1, 1996, SBA charged a 1.00 percent annual "Charge" on Leverage it provided to SBICs, causing significant reductions in required Congressional appropriations needed to support increasing amounts of available Leverage. The amount of the "Charge" is determined in the fiscal year in which a Leverage Commitment is issued and applies to all Leverage issued pursuant to that Commitment. The Subsidy Rate was substantially reduced in the case of Debentures to less than 1.00 percent with the result that no appropriations were required to support their issuance beginning in FY 2000.
In December 2000 legislation was enacted requiring SBA to set the amount of the Charge it imposed on Commitments issued each fiscal year at the rate necessary so that the sum of all fees charged (including 1 percent commitment fees, 2 percent user fees, the annual "Charge" and anticipated profit distributions) would equal the amount of anticipated losses. The Charge for Debenture Commitments issued in FY 2007 was approximately 0.91 percent, and was 0.72 percent in FY 2008. The Charge declined to 0.41 percent for FY 2009 and declined further to 0.285 percent for FY 2010 and then rose to 0.515 percent for FY 2011. The Charge for Debenture Commitments issued in FY 2012 was 0.804 percent and is 0.760 percent in FY 2013. The recent increased Charges reflect SBA's belief that the Early Stage SBIC Program, the Energy Saving Debentures and the Impact Investment Program SBICs will have higher loss rates than the users of traditional Debentures.
The annual amount of Debenture Leverage available since FY 2003 has been $3 billion. Commitments issued by SBA each year have been well below these authorized amounts. In FY 2012, SBA issued total Commitments for $1.924 billion, an all-time high for Debentures. In the first half of FY 2013, SBA issued total Debenture commitments of $876 million. During FY 2012, SBICs drew $1.42 billion of Debenture Leverage, and in the first half of FY 2013 they drew $1.04 billion of Debenture Leverage.
SBA's Web site (www.sba.gov/INV) contains historical information concerning the amount and pricing of Leverage committed and issued since the SBIC Program was restructured in 1994.
Summary of Calculation of Interest Rate Charged on Debentures
The rate of interest payable by an SBIC on Debentures is the sum of the following:
Thus, for example, the interest rate for Debentures issued in the March 2013 pooling pursuant to a Leverage Commitment issued during FY 2013 was:
Debenture Leverage
Debentures have 10-year maturities from the date of pooling, are not amortized prior to maturity, and bear interest payable semi-annually.10 Debentures are unsecured, and the General Partner of the SBIC is not personally liable for their repayment absent certain regulatory violations. Beginning with the September 2006 issuance, Debentures may be prepaid without penalty, but a Debenture must be repaid in whole and Debentures must be prepared in the order drawn by an SBIC. Repayment of Debentures is subordinate to repayment of loans from non-Associate lenders up to the lesser of $10 million or twice the amount of the SBIC's Regulatory Capital.11 SBA is able to issue Debentures with maturities shorter than 10 years, but has not done so since 1991. Historically, SBA has restricted use of the "third tier" of Debentures until the SBIC has demonstrated it is operating profitably. The maximum Leverage available to a single SBIC is $150 million and to a group of commonly managed SBICs is $225 million.12
Unrelated Business Taxable Income Exemption
Prior to October 2004, certain tax-exempt entities that invested in SBICs were subject to recognition of unrelated business taxable income (UBTI) as a result of the issuance of Debentures, because Debentures generated debt-financed income. Tax legislation adopted in October 2004 exempts tax-exempt investors from UBTI that otherwise would result from the use of Debentures by an SBIC licensed after enactment of the legislation, provided (i) no tax-exempt investor (other than a governmental unit) owns more than 25 percent of the capital or profits interest of the SBIC and (ii) all tax-exempt investors (including governmental units, other than any agency or instrumentality of the United States) own less than 50 percent of the capital and profits interest of the SBIC.
Distributions by Debenture SBICs
An SBIC using Debentures makes distributions among its Partners as provided in the SBIC's limited partnership or operating agreement. The sources of those distributions are limited as follows:
SBICs can make distributions before the end of a fiscal year. If, however, an SBIC were to make a distribution mid-year from READ that then existed, but at the end of the year the SBIC did not have READ for the year (for example, if the SBIC wrote off an investment after mid-year), then the SBIC's distribution would be considered improper and be an event of default under the Debenture Leverage. The SBIC would be give a specified period of time to cure the default, not less than fifteen days. The failure to cure could result in SBA declaring all Debentures immediately due and payable and seeking the appointment of SBA or its designee as a receiver.
Just in Time Financing
The SBIC Program permits the funds from investors and SBA Leverage to be taken down by the Partnership in "lock step", thereby delaying investor capital calls and increasing potential investor returns. An SBIC using Debentures is required to have total "Regulatory Capital" (paid-in capital plus unfunded binding commitments from "Institutional Investors") of at least $5 million.14 While an applicant needs to have binding subscriptions for the full amount of its "Regulatory Capital", only $2.5 million of the SBIC's Regulatory Capital needs to be paid-in prior to issuance of the SBIC License. Once at least one-half of this $2.5 million is invested, the SBIC will be eligible to use SBA Leverage prior to making another capital call from investors.
LMI Debentures
On September 30, 1999, SBA adopted regulations providing incentives for SBICs to invest in Low and Moderate Income Zones (LMI Zones). An LMI Zone is a geographic area that satisfies one of five definitions that currently are used by different Federal agencies in determining areas requiring special attention. Debenture SBICs also may use LMI Debentures. Highlights of the regulations are as follows:
Community Reinvestment Act Credit
Current Community Reinvestment Act (CRA) regulations present banks (other than certain "small banks") with a continuing need to make investments that qualify for CRA purposes. Investment in an SBIC is specifically identified in the CRA regulations as a type of investment that will be presumed by the regulatory agencies to be a "qualified investment" for CRA purposes. The investment should be in an SBIC that is located in or doing substantial business in the region in which the bank's assessment area is located, but the SBIC is not required to be headquartered within the assessment area itself. The SBIC Act and other Federal statutes explicitly permit banks, bank holding companies, Federal savings associations and savings and loan holding companies to invest in SBICs.
Gramm-Leach-Bliley Act and Dodd-Frank Act Exemptions
As part of the implementation of the Gramm-Leach-Bliley Act (the GLB Act), effective April 1, 2002, the Federal Reserve Board, the FDIC and the Office of the Comptroller of the Currency adopted new regulations governing regulatory capital treatment for certain equity investments held by banks, bank holding companies and financial holding companies. Under the regulations, an 8 percent Tier 1 capital deduction applies on covered investments that in the aggregate are less than 15 percent of an organization's Tier 1 capital, a 12 percent deduction applies to investments aggregating 15-24.99 percent of Tier 1 capital, and a 25 percent deduction applies to investments aggregating 25 percent and above of Tier 1 capital. The regulations exempt SBIC investments from such capital charges so long as their value is less than 15 percent of Tier 1 capital. However, the amount of SBIC investments will be considered when determining capital charges with respect to other investments. These rules, however, may be affected by contemplated changes to bank capital requirements to conform to the Basel III Accords.
In addition, ownership of a 15 percent equity interest in a portfolio company by a bank-affiliated SBIC will not give rise to a presumption that the portfolio company is an Affiliate under Sections 23(a) and (b) of the GLB Act.
The Dodd-Frank Act generally prohibits a banking entity from acquiring or retaining any equity, partnership or other ownership interest in or sponsoring a private equity fund. In addition, non-bank financial companies that engage in proprietary trading or ownership or sponsorship of a private equity fund may be subject to additional capital and quantitative limits. These prohibitions are not applicable to investments in SBICs, absent new bank regulatory or SEC restrictions.
Investment Advisers Act Exemption
An adviser that solely advise SBICs, entities that have received a "green light letter" authorizing them to submit their formal SBIC license applications to SBA and applicants that are affiliated with one or more SBICs that have applied for another SBIC license is expressly exempted from the new requirements under the Dodd-Frank Act amendments to the Investment Advisers Act of 1940 which generally require advisers to certain types of private funds to register with the Securities and Exchange Commission or to become exempt reporting advisers.
SBIC Investments
An SBIC can only invest in "Small Businesses" and must invest at least 25 percent of its invested funds in "Smaller Enterprises."15 SBA regulations define a "Small Business" as a company with tangible net worth (total net worth less goodwill) of less than $18 million and average after-tax income (exclusive of loss carry-forwards) for the prior 2 years of less than $6 million. A company failing that test can still qualify as a Small Business if it meets the size standards for its industry group under an alternative test. The size standards for industry groups under this alternative test are based on the number of employees (typically 500 to 1,000 for a manufacturing company) or gross revenues.16 A "Smaller Enterprise" is a company with a net worth (excluding goodwill) of less than $6 million and average after-tax income for the prior 2 years of less than $2 million or which meets the alternative test. Certain debt-to-equity ratios must also be met if the Partnership finances the change of ownership of a Small Business with more than 500 employees. Importantly, in making a determination whether a company meets the size test and the alternative test, the company and all Affiliates of the company must be counted. Entities are "Affiliates" of each other if one controls or has the power to control the other or a third party or parties control or have the power to control both. An SBIC or a private fund exempted from registration under certain sections of the Investment Company Act of 1940 are not considered Affiliates of a company in determining whether that company qualifies as a Small Business or Smaller Enterprise.
SBIC regulations restrict the amount that an SBIC can invest in any company and its affiliates (the so-called "overline limit"). The Stimulus Legislation of 2009 changed the overline limit from 20 percent of "Regulatory Capital" to 10 percent of the sum of Regulatory Capital17 multiplied by the leverage ratio approved at the time of licensing (i.e., 30 percent of Regulatory Capital if Regulatory Capital is proposed to be fully leveraged with two tiers of Leverage). By way of example, if an SBIC has Regulatory Capital of $20 million, it may not invest more than $6 million in a single company without SBA's approval (assuming the SBIC was approved for two tiers of Leverage at the time it was licensed as an SBIC). SBA may approve a larger percentage if necessary to protect the SBIC's investment, but SBA has indicated it will only give such consent in unusual circumstances.
SBIC regulations preclude investment in the following types of businesses: companies whose principal business is re-lending or re-investing (venture capital firms, leasing companies, factors, banks); many kinds of real estate projects; single-purpose projects that are not continuing businesses; companies that will use the proceeds outside of the United States or have more than 49 percent of their tangible assets or employees outside the United States at the time of financing or within one year following the financing (unless the funding is used for a specific U.S. purpose that is acceptable to SBA); businesses that are passive and do not carry on an active trade or business; and businesses that use 50 percent or more of the funds to buy goods or services from an associated supplier.
Historically, SBA regulations prevented an SBIC (or two or more SBICs acting together) and its Associates (controlled or related persons) from controlling a business, except on a temporary basis to protect its investment or if the small business was a "start-up." In December 2000, legislation was enacted eliminating the legislative basis for regulating "control during the investment period." Effective November 21, 2002, SBA adopted final regulations indicating that an SBIC and its Associates may control a small business for up to 7 years, and with SBA's consent, for a longer period, to permit an orderly sale of the investment or to ensure the financial stability of the small business.
SBICs are precluded from making investments in a Small Business if it would give rise to a conflict of interest. Generally, a conflict of interest may arise if an Associate18 of the SBIC has or makes an investment in the Small Business or serves as one of its officers or directors or would otherwise benefit from the financing. Joint investing with an Associate (such as another fund controlled by affiliates of the General Partner) may be made on the same terms and conditions and at the same time or on terms that are fair to the SBIC.
Terms of Portfolio Company Financings
An SBIC may make investments in the form of debt with no equity features (Loans), debt with equity features (Debt Securities), or stock, rights to acquire stock, and interests in limited partnerships, limited liability companies and joint ventures (Equity Securities). Investments must be made for a term of not less than one year (except for bridge loans in anticipation of a permanent financing in which the SBIC intends to participate or to protect the SBIC's prior investment). Loans and Debt Securities must have amortization not exceeding "straight line." The permissible interest rate depends on the type of debt. For straight Loans, the permitted rate is the higher of (i) 19 percent or (ii) 11 percent over the higher of the SBIC's weighted cost of Debenture Leverage or the current Debenture Rate. For Debt Securities, the permitted rate is the higher of (i) 14 percent or (ii) 6 percent over the higher of the SBIC's weighted cost of Debenture Leverage or the current Debenture Rate. Regulations define an SBIC's weighted cost of Debenture Leverage and describe the permitted rate when more than one SBIC participates in the financing.
The applicable interest rate is calculated adding in all points, fees, discounts and other costs of money, other than (i) application and closing fees of up to 5 percent of the financing if it is a Debt Security, or 3 percent for Loans, (ii) permitted prepayment penalties, and (iii) reasonable monitoring expenses, each of which may be charged in addition to the permitted interest. In addition, an SBIC may be reimbursed for its reasonable closing costs (including legal fees). An SBIC may also charge a default rate of interest of up to 7 percent and a royalty based on improvement in the performance of a portfolio company after the financing.
An SBIC can require a Small Business to redeem Equity Securities, but only after one year and only for a price equal to either (i) the purchase price or (ii) a price determined at the time of redemption based on (a) a reasonable formula that reflects the performance of the company (e.g., based on the book value or earnings) or (b) fair market value determined by a professional, third party appraiser. Mandatory redemptions not complying with these requirements will result in the investment being treated as a Debt Security, subject to the interest restrictions described above. However, the Small Business can be required to redeem the SBIC's equity security if the Small Business has a public offering, has a change of control or management or defaults under its investment agreement.
An SBIC can retain its investment in a business that ceases to be a Small Business and can continue to invest in such a "large" business until the company has a public offering. Following a public offering, the SBIC still can exercise rights to acquire securities that were obtained prior to the public offering.
If within one year of the initial financing by an SBIC a portfolio company changes its business to one in which an SBIC is prohibited from investing, then the SBIC must divest itself of the investment absent SBA's approval.
SBIC Operations
SBA has adopted a number of regulations and policies concerning operating requirements of SBICs intended to assure their proper management. Principal regulations and policies include:
An SBIC using Leverage must invest its "idle funds" not invested in Small Businesses, in liquid, safe, short-term investments specified in the regulations: principally, U.S. government obligations, repurchase obligations with federally insured institutions with a maturity of 7 days or less and whose underlying securities are direct U.S. government obligations, federally-insured deposits, and deposits in "well-capitalized" federally-insured financial institutions.
An SBIC and its Associates may provide management services to Small Businesses in which the SBIC invests, but only may charge for services at competitive rates for services actually rendered. SBA requires that SBICs applying for a license after April 1, 2004, must credit all such fees against the management fee otherwise payable by the SBIC (except for placement fees paid to associated licensed broker-dealers).
The General Partner or Board of Directors is required to value the SBIC's assets annually (semi-annually, if Leverage is used) pursuant to valuation guidelines approved by SBA. SBA has issued model valuation guidelines that are similar to those customarily used by venture capital firms, but do not conform with generally accepted accounting principles.
An SBIC's ability to borrow funds from third parties is subject to SBA regulation. SBICs may only incur unsecured debt.
SBICs are required to file a variety of reports with SBA, none of which generally are considered burdensome. These reports include an annual financial statement which is certified to by the SBIC's independent certified public accountants (and contains information concerning each portfolio company), valuation reports as described above, capital certificates reporting, among other things, changes in "Regulatory Capital" and "Leverageable Capital", reports as to changes in the SBIC's management, material litigation, a brief report describing each investment, and copies of reports sent to investors and, if applicable, to the SEC. SBA will conduct regulatory examinations of each SBIC on an annual basis.
A key regulatory metric for SBA is the extent of "Capital Impairment," which is the extent of realized (and, in certain circumstances, net unrealized) losses of an SBIC compared with the SBIC's private capital commitments. Interest payments, management fees, organization and other expenses are included in determining "realized losses." SBA regulations preclude the full amount of "unrealized appreciation" from portfolio companies from being considered when calculating Capital Impairment in certain circumstances. If an SBIC issues Leverage, it will be required to avoid Capital Impairment. Capital Impairment will be considered to exist if the SBIC's "Capital Impairment Ratio" (calculated by adding the SBIC's realized losses and net unrealized depreciation19 and dividing the result by the SBIC's private capital) exceeds permitted levels detailed in the regulations and which vary depending on the proportion of equity investments made by the SBIC and the ratio of outstanding Leverage to Leverageable Capital.
SBA has certain rights and remedies if the SBIC violates SBA regulations, which include being in a condition of Capital Impairment. Remedies for regulatory violations are graduated in severity depending on the seriousness of Capital Impairment or other regulatory violation. For minor regulatory infractions, warnings are given. For serious infractions the use of Debentures may be limited or prohibited, outstanding Debentures can be declared to be immediately due and payable, restrictions on distributions and making new investments may be imposed, management fees may be required to be reduced, and investors may be required to pay their unfunded capital commitments to the SBIC. In severe cases, SBA may require the Limited Partners to remove the Partnership's general partner or manager or its officers, directors, managers or partners, or SBA may obtain appointment of a receiver for the Partnership.
SBICs are organized under state law as corporations, limited partnerships or limited liability companies. SBA strongly encourages Debenture SBICs to be organized as limited partnerships.
Investors may be either domestic or foreign individuals or entities. The SBIC Act specifically authorizes banks and Federal savings associations to invest up to 5 percent of their capital and surplus in SBICs. Certain investors owning 33 percent or more of an SBIC are required to submit certain background information to SBA and are subject to SBA's fingerprinting requirements. All investors in an SBIC and anyone owning 10 percent or more of any investor owning 10 percent of an SBIC must be identified to SBA in the SBIC's application for licensure.
Diversity of Ownership
SBA has regulations and policies designed to assure that an SBIC receives significant investments from investors who do not participate in or otherwise control its management. Additionally, an SBIC must receive at least 30 percent of its private capital from a total of three or more investors who are unrelated to the management or from a single such investor meeting certain limited qualifications (such as a bank, insurance company or certain publicly traded corporations). No single investor may own more than 70 percent of an SBIC's private capital.
Restrictions on Transfer
Investors in an SBIC may not transfer their interests without SBA's prior consent. Additionally, as a condition to providing Leverage to the SBIC, SBA presently requires investors owning 50 percent or more of an SBIC that uses Leverage (as well as the SBIC's managers and other "control persons") to enter into a written agreement with SBA providing for personal liability for repayment of Leverage for directly or indirectly participating in a change of control of an SBIC without SBA's prior consent. Additionally, without SBA's consent, an SBIC may not release any of its investors from the liability to make the full amount of the investor's capital contribution.
Management Fee
Management fees paid by SBICs using Leverage are subject to SBA's prior approval. Leveraged SBICs that submit license applications from and after April 1, 2004, are permitted to charge an annual management fee of up to 2.5 percent on three times (assuming the SBIC's approved business plan calls for the use of two tiers of Leverage) the amount of "Regulatory Capital" (without subtracting certain distributions made) for five years, and thereafter 2.5 percent of the cost basis of loans and investments in active portfolio companies. However, if the base on which the fee is calculated exceeds $60 million, the permissible rate declines to 2 percent when the base is $120 million or more. SBA policies require that management fees be reduced by all consulting, board and other fees received from portfolio companies by affiliates of the SBIC's general partner (except for fees paid to licensed broker-dealers). SBA only permits increases in Regulatory Capital to create a prospective entitlement to increased management fees (i.e., the increased level of management fees only may be charged from the beginning of the calendar quarter in which the Regulatory Capital is increased, not the date of the initial closing). SBA's policies concerning Management Fees are quite detailed and are set forth in Tech Note 7A.
SBA uses a two-step licensing process for "first time" SBICs. In the first phase, an applicant completes and submits to SBA a form entitled Management Assessment Questionnaire (MAQ). This contains the elements of the applicant's business plan as well as detailed information concerning the experience of each of the "Principals" to carry out the business plan.
SBA generally requires that at least two, substantially full-time, members of the team have at least five years of successful private equity investment experience at a decision-making level in the types of investments the applicant is proposing to make. Generally each individual's track record should include at least 10-15 investments with a reasonable number of complete realizations during the last ten years (and preferably including some that are quite recent). SBA also considers how long and in what ways the investment team has worked together. SBA views the track record of the Principals and the "cohesiveness" of the key Principals as being fundamentally important. Additionally, SBA is concerned about the internal management of the SBIC. They prefer a team composed of 3 to 5 Principals, although as few as two and as many as six also are acceptable. However, SBA does not want dominance by a single Principal over investment and other management decisions (including personnel matters). They do not want to license a "one man band." SBA looks at the division of the SBIC's carried interest to evaluate relationships. They have an informal rule that no Principal may own 50 percent or more of the carried interest, unless there are only two Principals and they each have 50 percent.
The MAQ is reviewed by SBA's "Investment Committee", after which the Principals, if appearing qualified, are invited to meet with the members of the Investment Committee. After the meeting with the applicant's Principals, SBA's Investment Committee may turn the application down or issue a "green light" letter indicating that the applicant has passed the first part of the application process and now is authorized to file a formal application. At the present time, a "green light" letter usually is issued three to four months following submission of the MAQ and immediately after the interview.
After receipt of the "green light" letter and obtaining commitments for at least the minimum required Regulatory Capital from investors satisfying the "diversity" requirement, the applicant files a formal application which contains additional information about the applicant and the management team, as well as the applicant's and its general partner's or manager's organizational applicant documents. While the Regulations require a Debenture SBIC to have at least $5 million of Regulatory Capital, SBA generally requires an SBIC to have firm commitments when its formal license application is filed for an amount of capital that is sufficient to enable the SBIC to have a first closing and conduct its operations, even if it does not subsequently raise additional funds. Depending on the projected size of the SBIC, SBA could require $15 – 20 million of private commitments, or more, at the time the application is filed. In processing the license application, SBA seeks to determine that there is a qualified management team and that the SBIC has a good chance of operating profitably. SBA reviews the applicant's business plan, projections and organizational documents, and conducts reference and other background checks (including litigation searches and an FBI fingerprint check) on the management team. The process presently is taking approximately six months. SBA requires an applicant to advise its investors that the investors are not entitled to rely on SBA's review of the applicant in deciding whether to invest.
After a license application is filed and accepted for processing by SBA, an applicant may make "pre-licensing investments", each of which will be included in the applicant's Regulatory Capital if it was submitted to and approved by SBA prior to the investment being made. SBA requires 10 business days to review such pre-licensing investments (but often approvals take longer). SBA does not determine the quality or wisdom of the investment. Rather, SBA simply seeks to determine if the investment terms comply with SBA Regulations. Once licensed, pre-approval of investments is not required. SBA requires all principal members of the management team to attend a one-day regulations class run by SBA and will only permit one "pre-licensing" investment to be made prior to at least one person from applicant attending the class. Arrangements for attending the regulations class are made by contacting SBIA.
Applicants should assume the following timeline for securing a license and Leverage.
Management Assessment Questionnaire
3-4 months
Formal License Approval
6 months
Receipt of Leverage Following Licensing
1-2 months
10-12 months
This timeline assumes the license application is filed immediately upon receipt of the "green light" letter.
Licensing Second Funds
For "second" SBIC funds, SBA follows a process that is similar to licensing new funds. After submission of a request outlining the proposed new SBIC, SBA's Office of Operations compares the new fund and the prior fund(s) (similarity of business plan, changes in management team, track record, profitability, liquidity and prior SBA compliance record) and makes a recommendation to the Investment Committee that in turn makes a decision whether to issue a "green light" letter for the new fund. Following receipt of that letter, when the new fund has received commitments for the minimum required capital that also satisfies the "diversity" requirement, the fund may submit a formal application for processing. If the "second" fund continues the investment strategy of a successful SBIC and the management team is basically the same, SBA has adopted a new "fast track" licensing process designed to shorten the process to less than six months. Under a recently adopted SBA policy, the prior SBIC and the follow-on SBIC must each agree not to co-invest more than 30 percent of its investable capital with the other SBIC.
1 This longtime ability of banks, Federal savings associations and their holdings companies to invest in SBICs was preserved in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).
2 SBICs that have surrendered their licenses or have been transferred to the Office of Liquidation are not included in these figures.
3 A more detailed description of this program is available from Pepper Hamilton LLP.
4 A "tier" is SBA jargon for the amount of an SBIC's "Regulatory Capital" (paid-in private capital plus unfunded commitments from investors, both individuals and entities, having sufficient financial means to qualify as Institutional Investors). SBA permits Debenture SBICs that are performing well and have seasoned portfolios to use a "third tier" of Leverage in certain circumstances. See the section below entitled "Just in Time Financing." SBA regulations describe the qualifications of "Institutional Investors." They can be most forms of business entities with a net worth of at least $10 million, or banks or savings and loan associations or their holding companies, insurance companies, pension plans for private or public sector employees, and tax-exempt foundations or trusts, in each case with a net worth of at least $1 million. Institutional Investors also include individuals with a net worth of at least $10 million (exclusive of the equity of their most valuable residence) or $2 million if the amount committed to the SBIC does not exceed 10 percent of their net worth. Not more than 33 percent of the SBIC's Regulatory Capital may be invested by state or local government entities. If an Institutional Investor has a net worth of less than $10 million, only that part of its unfunded commitment that is less than 10 percent of its net worth will be included in Regulatory Capital.
5 See the section below entitled "Licensing."
6 An SBIC that makes an investment prior to the acceptance of its license application by SBA will not be able to include the amount so invested in the SBIC's Regulatory Capital.
7 SBA policies, however, require that an SBIC must have invested in portfolio companies at least 50 percent of the Private Capital that it had drawn prior to receipt of Leverage. Some SBICs that have incurred sizeable organization expenses and/or management fees prior to making investments have found it necessary to draw more than $2.5 million of Private Capital in order to comply with this policy. Additionally, Debenture funds may draw at a three-to-one ratio in certain circumstances.
8 The regulations implementing the New Markets Venture Capital Program Act of 2000 provide that an SBIC may have outstanding Leverage in excess of the generally applicable Leverage ceiling based on investments in "low income geographic areas." For SBIC's licensed before October 1, 2009, the Leverage ceiling is calculated without regard to the amount of the cost basis of equity investments in "Smaller Enterprises" located in a "low income geographic area" (but only to the extent that such amounts do not exceed 50 percent of the SBIC's "Leverageable Capital"). For SBIC's licensed from and after October 1, 2009, the single SBIC leverage ceiling is increased to $175 million and the aggregate ceiling for a group of commonly managed SBIC's is increased to $250 million if at least 50 percent of each such SBIC's financings has been and will be invested in "Small Businesses" located in "low income geographic areas."
9 Prior to February 2006 the underwriter's fee was 50 basis points.
10 Early Stage SBIC Debentures require quarterly interest payments.
11 Currently SBA does not permit SBICs with outstanding Leverage to have secured debt.
12 See footnote 8 which described when SBIC's may have outstanding Leverage in excess of these amounts based on investments made in "low income geographic areas."
13 The restrictions on distributions set forth in paragraphs 1 and 2 may cause a "phantom income" issue when an SBIC using Debentures realizes income in a year that does not exceed the amount of prior cumulative net losses. Distribution of such "income" would reduce the amount of the SBIC's Regulatory Capital and, therefore, is subject to the 2 percent limitation. While investors may have received the benefit of deductions for these losses in prior years (although use of such losses is severely restricted for individuals), they may incur phantom income in the year in which such profits arise. These restrictions also may cause operating issues for SBICs whose limited partnership agreements restrict the reinvestment of realized investment proceeds.
14 See "Licensing" for a discussion of the minimum private capitalization required to file a license application.
15 This percentage may be lower for certain SBICs licensed before February 17, 2009.
16 The alternative size test uses the predominant industry for the company together with its Affiliates taken together.
17 Regulatory Capital has a somewhat more expansive definition in determining overline limits because certain distributions may be added back in.
18 The definition of an Associate is complex, generally covering all control persons and their control persons.
19 The actual calculation is complex as certain types of unrealized appreciation are not fully credited.
See more »
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Pepper Hamilton LLP | Attorney Advertising
Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up to create your digest using LinkedIn*
JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.
JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.
The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.
JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.
If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.
Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.
JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.
If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at email@example.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.
Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.
In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.
This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.
We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.
If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: email@example.com.
Already signed up? Log in here


text:
Artist description:
Happy Bday, Bun [Link] Sorry. I'm losing my drawing skills & no curry :( Yes, he's missing his arm & leg because of the
"Messy Destruction" If you don't like it, I'll delete this one & draw you another one
Java Draw Created Jul 13, 2010 338 x 470px Unless noted Copyright 2010 Overik.
We encourage you to submit a comment and let the artist know what you think of this drawing. Please log in or join to post a comment.
Post a comment
such pretty shading *jealous* i love how soft it looks and cough cough bishounen alert bishounen alert xD i would give him my arm and leg keke
aw, this is such a sweet draw. D:. his expression is so serene. . . T.T *favs*
wow you are awesome O: i love how you colour your drawings and how you draw big hair ;D they look like BJDs 5h
Gosh, I love your art. A lot. I love the eyes ..5/5 and I'm going to favorite this one too. XD

subset: commoncrawl


text: Missing Jefferson County girl found By Staff reports January 22, 2014 CHARLESTON, W.Va. -- State police from West Virginia and Maryland teamed up to find a mentally disabled girl who went missing near Charles Town on Monday.West Virginia State Police spokesman Sgt. Michael Baylous said the 8-year-old girl was last seen on Big Spring Drive near Middleway at about 7 p.m. Her parents called troopers from the Charles Town State Police detachment a short time later.Because the girl was mentally disabled, troopers began a search immediately, Baylous said. Troopers asked the Maryland State Police Aviation Unit for help, and a helicopter was sent to help find the girl. Baylous said thermal imaging equipment on the helicopter spotted the girl at about 9 p.m. She was found lying in the fetal position on the ground outside a house nearby, he said. Baylous said the girl was treated for exposure and returned to her parents.


text:
Ability Std Condensed Light
- Designer: Anton Scholtz
- Foundry: Scholtz Fonts
- Classifications: Script, Handwriting, Casual Script
Try this font now! Use the controls below to customize your text string and its appearance.
Try this web font now! Simply edit the sample text below or change colors and size.


text:
It's going to be fairly difficult, but since you asked: Step 1: Develop a sufficiently large following among Baltimoreans such that getting featured on mybmore.net meaningfully moves the needle for a business.
Its pop-up souvenir shop in a vacant retail space within the Denver Pavilions, for example, features goods exclusively designed in Colorado by local craftspeople, including furniture, paper goods, clothing, jewelry, prints and art.
Supportland has developed a rewards card that works at any of the company's network of some 50 locally owned Portland-area businesses.
The book Big Box Swindle:The True Cost of Mega-Retailers and the Fight for America's Independent Businesses raises important questions and suggests some interesting ideas that should be of interest to work at home entrepreneurs who struggle to overcome the "Big Boys'" economies of scale.
OpenForum.com: When comedian Steve Martin declared, "Let's get small," he could have been coining today's consumer mantra.
The local Web is rapidly evolving amid the converging forces of online social networking, location-savvy smart phones and an array of new business models.
The "While You Were Out" form is a simple way to communicate with your local businesses.
NPR has received $3 million in funding to launch a new journalism project that will focus on providing in-depth, hyper-local coverage on community-specific issues on an online platform.
Outside the local train station, the Maplewood Civic Association maintains a bulletin board plastered with news of jazz festivals and yoga classes for this small, affluent New Jersey town.
photo by Angie Carlson
Last Sunday, I had a minor accident that as I attempted to remedy illustrated some basic failing that many small businesses suffer from.


text:
Mary Betty Baldwin, 91, died Nov. 17, 2008, at her home in Newhall, Calif. Born July 8, 1917, to Roy and Jessie Roland of Owenton, Mary was preceded in death by her husband of 42 years, John Howard Baldwin; a sister, Alma Jean Allnutt; and a brother, Roy Cecil Roland. She is survived by a son, Billy H. Baldwin of Newhall, Calif.; a daughter, Bonita Sue Mayne of El Cajon, Calif.; a sister, Thelma Marston of Owenton; four grandchildren; and two great-grandchildren.
A memorial service will be conducted in Newhall, Calif., on Nov. 28, 2008.
If you currently subscribe or have subscribed in the past to the Owenton News, then simply find your account number on your mailing label and enter it below.
Click the question mark below to see where your account ID appears on your mailing label.
If you are new to the award winning Owenton News and wish to get a subscription or simply gain access to our online content then please enter your ZIP code below and continue to setup your account.
ZIP Code: | |


text:
In meeting its mission to strengthen knowledge and understanding of dietary supplements, ODS invests intellectual leadership and dollars. ODS extramural investments can be categorized into four broad areas:
ODS's key activities are grouped into 15 programs under the four categories. An ODS staff member is responsible for overseeing each program and most ODS staff members are active in more than one program. Each program interacts with one or more stakeholder communities, including: research investigators; educators and teachers; health practitioners; research and educational institutions; federal agencies; dietary supplement, food, and related industries; media; consumer and public interest groups; and members of the public. For detailed information, see the section on ODS programs and activities on the ODS website.
The ODS budget grew rapidly from 2000 to 2004; since 2004, the ODS budget has been relatively stable.
ODS's FY2014 budget is $26.8 million. This budget was largely targeted to extramural investments in research.
In FY2014, ODS awarded $21.1 million to research projects. The distribution of these funds by project type—grants, contracts, and interagency agreements—is shown in Figure 1. The largest allocation was for research grants. ODS does not award research grants directly but selectively cofunds meritorious peer-reviewed research relevant to dietary supplements that NIH institutes and centers submit.
Figure 1. ODS total research portfolio in FY2014
Figure 2. Supplement Category Breakout of ODS Co-funded Grants


text:
Sauteed Leeks with Horseradish, Fennel and Apple Chutney
Author Notes: I just bought a huge piece of fresh horseradish the other day and have been thinking of something to make with it.
I was making leeks and thought to make a creamy horseradish sauce to go with it. Instead I somehow ended up with this, which turned out to be really delicious.
It was supposed to be a side dish to a roasted chicken but I ended up eating just the leeks because they were so good. My husband took some of the leftover chutney and smeared it all over the roasted chicken. It would be delicious on fish too. —bethmichelle
Serves 2
- 2 Leeks, trimmed and cut down the middle
- 2 tablespoons Butter
- 3 tablespoons Fresh Horseradish, grated
- 1/2 Fennel Bulb, chopped
- 1/2 Apple, chopped
- 1/3 cup Cream
- Salt and Pepper to taste
- Melt butter in a large skillet over medium heat. Add leeks, coat in butter.
- Sauté leeks until tender and starting to brown.
- Remove leeks from pan and set aside.
- Add 2 tablespoons horseradish, chopped fennel and chopped apple to the pan and sauté until tender about 5 minutes.
- Add cream and heat through, about 3 minutes.
- Put mixture into a blender and pulse until thick but not smooth (you want the mixture to stay chunky)
- Stir last tablespoon of horseradish into mixture.
- Season to taste with salt and pepper.
- Serve leeks with horseradish, fennel and apple chutney on top.
- This recipe was entered in the contest for Your Best Recipe with Horseradish
More Great Recipes:
Fruit|Side Dishes|Vegetables|Fennel


text:
Spinach Ball Appetizers
Spinach Balls
- 3 packages chopped frozen spinach, thawed and well drained
- 2 cups herbed stuffing
- 1 cup parmesan cheese
- 1 stick melted butter
- 4 eggs
- 1 cup finely chopped onion
- 1 rounded tablespoon nutmeg
- Pre-heat oven to 350 F.
- Combine all ingredients. Best done in a mixer until well combined.
- Shape into golf ball sized balls.
- Place on a cookie sheet.
- Bake for 25 minutes.
- Serve warm and use dijon mustard as a dipping sauce.
This recipe can be easily doubled and the baked spinach balls can be frozen for up to one month. To reheat: Place in oven at 350 f for 5 minutes.
This recipe is from my dear friend Ruth C.


text:
Hello everyone. I am Mike McCourt, a Visiting Assistant Professor at CU-Denver, and I am teaching
several classes for the Mathematics and Statistical Sciences Department.
Below you can see information related to those classes, as well as research and professional content. Beneath that, you can see things I found on the internet that I think are awesome; they are mostly sports related. My research is focused on numerical methods, primarily applied to approximation theory involving positive definite kernels. I also enjoy numerical linear algebra, statistics and topics involving math education. |
Best. Tag. Ever.
| |
Always check the runner.
| |
That's the same way I putt.
| |
These kids are adorable, and they love It's Always Sunny in Philadelphia.
| |
This hit-and-run artist is hilarious. I miss living in Chicago.
| |
Old School Faceoff
Branko Milanovic - CUNY Graduate Center
Jean-Claude Van Damme - how awesome.
| |
From Mark Duggan, top health economist in the White House's
Council of Economic Advisers from 2009 to 2010, regarding the potential for
health care reform to destroy the economy:


text:
I've been facilitating workshops on international selling in Ireland since 2003. My audiences are sales executives, VPs of sales, and CEOs of Irish companies across all sectors.
To backtrack a bit: In 2002, I delivered a keynote speech to 300 technology executives and CEOs in Dublin on the subject of competitive selling. The Irish audience knew they were at a disadvantage selling in the international arena. Their business culture—specifically, the clear and present distaste for sales, selling, and salespeople—was a serious obstacle. However negatively salespeople are perceived in the U.S., it was much worse in Ireland.
Three people came to the rescue: Aidan Stack, a key player at Enterprise Ireland (Ireland's Department of Commerce); Paul O'Dea, co-founder of a small but very well-respected sales consultancy; and Kathryn Raleigh, president of the Irish Software Association.
These three drove the development of an innovative program called SalesSTAR. During its five-year run, we delivered our module program on building an competitive sales infrastructure to well over 100 technology CEOs and 50 VPs of sales. So successful was the program, Enterprise Ireland enlisted the help of the Dublin Institute of Technology (where I am now an adjunct professor of sales and sales management) to expand the program across all sectors. Participants pay a per-attendee fee, but the program is funded in part by Enterprise Ireland.
That fully accredited program, now in its third year, has graduated nearly 200 to date. The initial draft of the evaluation of the pilot program showed clear and measurable impact as a result of participation, with 100 percent of respondents to the survey element citing in excess of €500,000 new sales as a direct result of participation. The icing on the cake? Fifty percent of the respondents cited €1 million additional sales.
This is significant. It puts the Enterprise Ireland and Dublin Institute of Technology course in the leadership category among sales performance improvement programs anywhere.
Even after seven years, I continue to be amazed by Enterprise Ireland. The support they provide start-ups and high-potential Irish companies is something we all can learn a lot from. EI provides funding, programs, advisors, resources, introductions to key decision-makers, market research, competitive intelligence, advice on market entry strategies, partnering and acquisition strategies, and what appears to be endless support.
They have offices in 31 countries with support in an additional 39. They are serious about driving business growth, and understand sales effectiveness is at the core of their strategy.
Although Ireland is suffering through the same recession as us, Enterprise Ireland continues to invest. That investment in many hundreds of companies run by smart, hardworking, and determined CEOs will continue to leave Ireland in the best possible situation now…and in a better position than many coming out of the recession.
No question, all this costs a lot of money. But Ireland depends on exporting its goods and services to grow its GDP and increase their presence as a European, if not global, player. Evidently this country of only four million considers the significant ongoing investment in Enterprise Ireland, coming out of the pockets of the Irish people, to be worthwhile.
Dave Stein is the author of "How Winners Sell" and CEO and founder of ES Research Group in West Tisbury, MA. In addition, he delivers keynote speeches and workshops on sales performance.


text: Sword-wielding Skateboarder Gets Tased by the CopsCasey Chan5/04/11 10:20amFiled to: WtfCrazyswordSkateboardSwordwieldingskateboarderFantasyswordTaserTasedTazed144EditPromoteShare to KinjaToggle Conversation toolsGo to permalinkPoor Deandre Irby! Dude was just trying to enjoy the day like any young person would—hanging out at the outdoor mall, skating around with his backpack on, maybe think about getting a pretzel and oh, swinging his 'fantasy sword' with a 26-inch blade around. What the hell?AdvertisementThat's how the police describe the sword Irby was carrying around. They said that when arrived on scene, Irby tried to flee and hide his sword in the dumpster but couldn't do it in time. When caught, he refused to cooperate with them and "attempted to grab his sword", which resulted it him getting tased. Ouch. Unfortunately, Irby didn't have a concealed weapons permit to carry his sword (which begs the question, who the hell has a concealed weapons permit for a sword?) so he's been charged with that. Next time, leave the sword at home dude. You'll have a much better day that way. [Press Citizen via Fark]


text:
A nine-vehicle pileup on Interstate 35 near Rector Road at about 10:45 a.m. Thursday caused major traffic backups as first responders and tow trucks moved to clear the site.
Two people were taken by ambulance to area hospitals with injuries that were not expected to be life-threatening, said Lonny Haschel, a spokesman for the Texas Department of Public Safety.
"We got lucky on this one," Haschel said.
The southbound lanes were reopened in the early afternoon, he said, after heavy-duty wreckers cleared two recreational vehicles that were involved in the accident.
The chain reaction began after the driver of a Ford Focus slowed for some reason where the freeway reaches the crest of a large hill, Haschel said.
A strong line of storms, bringing winds and heavy rain in advance of a strong cold front, was moving through the area at the time. Many drivers reported their windows suddenly fogging over during that time.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is email@example.com .


text: Honda Honda Honda Honda! Madness Goes JDM To Pitch The '83 CityMurilee Martin6/28/09 2:00pmFiled to: classic ad watchHonda CityJapan1980S1983HondaCity1983 Honda CitymadnessMusicjdmFithonda fit45EditPromoteShare to KinjaToggle Conversation toolsGo to permalinkWhat's the best way to sell the 1983 Honda City Hyper Turbo? Honda's Japanese-market admen figured that the ska popmasters of Madness would be just perfect for a series of super-frantic TV spots.These ads may not be quite as punishingly 80s as the legendary Cocaine Factory Duster commercial, but they're up there with the rest of the 80s Car Ad contenders. Check out the special scooter, designed to fit in the back of the City! Reply45 repliesLeave a reply


text:
Adaptive M suspension.
The ideal suspension for even more dynamic handling – the electronically controlled dampers in the Adaptive M Suspension adapt to suit the current driving style and road conditions.
The damper characteristics can be modified using the Driving Experience Control.
A noticeably firmer damper setting is activated when the Sport mode is selected via the Driving Experience Control. In Sport+ mode, the Dynamic Stability Control (DSC) is replaced by the Dynamic Traction Control (DTC), which allows for even more dynamic driving.