UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed
by the Registrant ☒
Filed
by a Party other than the Registrant
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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Princeton
Capital Corporation
(Name
of Registrant as Specified in Its Charter)
(Name
of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title
of each class of securities to which transaction applies:
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number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date
of its filing.
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previously paid:
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PRINCETON
CAPITAL CORPORATION
800 Turnpike Street
Suite
300
North
Andover, Massachusetts 01845
(978) 794-3366
April
[25], 2018
Dear
Stockholder:
You
are cordially invited to attend the 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Princeton Capital
Corporation to be held on Wednesday, May 30, 2018 at 1:00pm, Eastern Time, at 250 West Pratt Street, Suite 2000, Baltimore, Maryland
21201. Only stockholders of record at the close of business on April 16, 2018 are entitled to the notice of, and to vote at, the
Annual Meeting, including any postponement or adjournment thereof.
Details
regarding the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.
It
is important that you be represented at the Annual Meeting, and you are encouraged to vote your shares as soon as possible. If
you are unable to attend the meeting in person, I urge you to complete, date and sign the enclosed proxy card and promptly return
it in the envelope provided. If you prefer, you can save time by voting through the Internet or by telephone as described in the
proxy statement and on the enclosed proxy card. Your vote is important.
Sincerely
yours,
Mark
DiSalvo
Interim Chief Executive Officer
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 30, 2018.
Our
proxy statement and our annual report on Form 10-K for the year ended December 31, 2016 are available at the following cookies-free
website that can be accessed anonymously:
www.voteproxy.com
.
PRINCETON
CAPITAL CORPORATION
800 Turnpike Street
Suite
300
North
Andover, Massachusetts 01845
(978) 794-3366
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 2018
To
the Stockholders of Princeton Capital Corporation:
The
2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Princeton Capital Corporation, a Maryland corporation
(the “Company”), will be held at 250 West Pratt Street, Suite 2000, Baltimore, Maryland 21201 on Wednesday, May 30,
2018, at 1:00pm Eastern Time, to consider and vote on the following proposals:
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1.
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The
election of four (4) directors of the Company;
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2.
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To
ratify the selection of WithumSmith&Brown, PC as the Company’s independent
registered public accounting firm for the year ending December 31, 2018;
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3.
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To
approve the new investment advisory agreement between the Company and House Hanover,
LLC, a Delaware limited liability company, pursuant to which House Hanover, LLC will
be appointed as the Company’s investment advisor;
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4.
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To
approve the adjournment of the Annual Meeting, if necessary or appropriate, to solicit
additional proxies; and
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5.
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To
transact such other business as may properly come before the meeting, or any postponement
or adjournment thereof.
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THE
BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT YOU VOTE “FOR” EACH OF THESE PROPOSALS.
The
enclosed proxy statement is also available at
www.princetoncapitalcorp.com
(under the “Investor Relations”
section). This website also includes copies of the form of proxy and the Company’s Annual Report on Form 10-K for the year
ended December 31, 2016 (the “Annual Report”). Stockholders may request a copy of the proxy statement and the Company’s
Annual Report by contacting our main office at
(978) 794-3366
. As of the date of this proxy statement, the Company
has failed to timely file its quarterly reports on Form 10-Q for the quarters ended on March 31, 2017, June 30, 2017, and September
30, 2017, and its Annual Report on Form 10-K for the year ended December 31, 2017. The Company is working diligently to complete
the past due Form 10-K and the past due Form 10-Qs.
You
have the right to receive notice of and to vote at the Annual Meeting if you were a stockholder of record at the close of business
on April 16, 2018. Whether or not you expect to be present in person at the Annual Meeting, please sign the enclosed proxy and
return it promptly in the self-addressed envelope provided. As a registered stockholder, you may also authorize your proxy by
telephone or over the Internet by following the instructions included with your proxy card. Instructions are shown on the proxy
card. In the event there are not sufficient votes for a quorum or to approve any of the foregoing proposals at the time of the
Annual Meeting, the Annual Meeting may be postponed or adjourned in order to permit further solicitation of the proxies by the
Company.
By
Order of the Board,
Gregory
J. Cannella
Chief Financial Officer, Secretary and Treasurer
April [25], 2018
This
is an important meeting. To ensure proper representation at the Annual Meeting, please complete, sign, date and return the proxy
card in the enclosed, self-addressed envelope. You may also authorize your proxy by telephone or over the Internet by following
the instructions included with your proxy card. Even if you vote your shares prior to the Annual Meeting, you still may attend
the Annual Meeting and vote your shares in person.
TABLE
OF CONTENTS
PRINCETON
CAPITAL CORPORATION
800 Turnpike Street
Suite 300
North Andover, Massachusetts 01845
(978) 794-3366
PROXY
STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
GENERAL
Preliminary
Copies – Subject to Completion
This
proxy statement is furnished in connection with the solicitation of proxies by the board of directors (the “Board”)
of Princeton Capital Corporation, a Maryland corporation (the “Company,” “we,” “us” or “our”),
for use at the Company’s 2018 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 250 West Pratt
Street, Suite 2000, Baltimore, Maryland 21201 on Wednesday, May 30, 2018, at 1:00 p.m., Eastern Time and at any postponements
or adjournments thereof. This proxy statement, the accompanying proxy card and the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2016 (the “Annual Report”) are first being sent to stockholders on or about
April [25], 2018.
On
or about March 15, 2016, the Company engaged WithumSmith&Brown, PC (“WithumSmith”) as its independent registered
public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2015 and to perform
procedures related to the financial statements included in the Company’s quarterly reports on Form 10-Q, beginning with
the quarter ended March 31, 2015. The Company’s stockholders, at the 2017 Annual Meeting, ratified the selection of WithumSmith
for the years ending December 31, 2016 and December 31, 2017.
The
engagement of WithumSmith and the delay in the filings of our Form 10-Q’s and Form 10-K’s arose following litigation
involving the Company and other events in 2015, 2016 and 2017. The litigation, captioned
Capital Link Fund I, LLC, et al. v.
Capital Point Management, LP, et al.
, C.A. No. 11483-VCN (the “Litigation”) has been disclosed in numerous of
the Company’s filings with the Securities and Exchange Commission. As previously disclosed, on June 17, 2016, following
our 2016 Annual Meeting (at which certain matters relating to the settlement of the Litigation were approved by our stockholders),
a Stipulation and Order of Dismissal of Claims (the “Dismissal Order”) against the Company, Princeton Advisory Group,
Inc. (the Company’s former investment advisor, “PAG”), Gregory J. Cannella, Munish Sood, Thomas Jones, Jr. and
Trennis L. Jones (together the “Settling Defendants”) and Martin Tuchman (collectively, the “Dismissed Defendants”)
was entered in the Delaware Court of Chancery. The Dismissal Order, which was dated June 10, 2016, dismissed with prejudice the
claims brought against the Dismissed Defendants.
As
previously reported by the Company, on February 24, 2017, a Stipulation and Order of Dismissal of Claims (the “Dismissal
Order II”) against Alfred Jackson (“Jackson”), Capital Point Management, LP (“CPM”), Capital Point
Advisors, LP (“CPA”), and Princeton Investment Advisors, LLC (“PIA”) was entered in the Delaware Court
of Chancery. The Dismissal Order II dismissed with prejudice the claims brought against Jackson, CPM, CPA and PIA. Terms of any
settlement were not disclosed, all claims with respect to the Litigation have now been dismissed, and the status quo order that
had included the Company has been lifted.
On
September 25, 2017, as previously disclosed by the Company, the United States of America filed Complaints against Munish Sood
and others captioned
U.S. v. Lamont Evans, et al.
and
U.S. v. James Gatto, et al.
, in the Southern District of New
York. At the time of the allegations, Mr. Sood was a member of the Board, the Chief Executive Officer of the Company, and the
President of the Company. As previously disclosed, as a result of the allegations, Mr. Sood resigned from his positions as a director,
Chief Executive Officer, and President, effective September 27, 2017.
As
a result of the allegations contained in the Complaints, also on September 27, 2017 and as previously disclosed, the Board authorized
and directed its Audit Committee (which consists of the Board’s three independent board members) to conduct an independent
investigation into whether such events impacted the Company, and the extent to which any officer or employee of the Company may
have been involved, and whether any corporate funds may have been utilized in the conduct alleged.
Also
as a result of these developments and as previously disclosed, the Board determined that it would be in the best interests of
the Company to terminate the Investment Advisory Agreement between the Company and PAG dated as of June 9, 2016 (the “PAG
Investment Advisory Agreement”). On December 27, 2017 and as previously disclosed, the Board sent a formal Notice of Termination
to PAG notifying PAG of its termination as the Company’s investment advisor, effective as of December 31, 2017 at 11:59
p.m. Eastern Time. Also on December 27, 2017, the Board approved (specifically in accordance with Rule 15a-4(b)(1)(ii) of the
Investment Company Act of 1940, as amended (the “Investment Company Act)) and authorized the Company to enter into an Interim
Investment Advisory Agreement between the Company and House Hanover, LLC, a Delaware limited liability company (“House Hanover”)
(the “Interim Investment Advisory Agreement”), in accordance with Rule 15a-4 of the Investment Company Act. The effective
date of the Interim Investment Company Agreement was January 1, 2018. In accordance with Rule 15a-4(a)(2) of the Investment Company
Act, the Interim Investment Advisory Agreement did not need to be approved by the Company’s stockholders and the duration
of the interim contract is not greater than 150 days following the date on which the PAG Investment Advisory Agreement terminated.
The
Audit Committee conducted its independent investigation with the assistance of outside advisors. As previously disclosed, the
investigation concluded on January 24, 2018. The investigation uncovered (i) no evidence that the allegations contained in the
Complaints impacted the Company (other than the resignation of Mr. Sood), (ii) no evidence that any officer or employee of the
Company, other than (as has been alleged) Mr. Sood, had any involvement in the allegations contained in the Complaints, and (iii)
no evidence that any corporate or portfolio company funds were utilized in the conduct alleged in the Complaints. In respect to
Mr. Sood, the Audit Committee did not make any judgment regarding the criminal allegations made by the U.S. Attorney in its Complaints.
As a result of the investigation, the Company, its Audit Committee, and its advisors concluded that the Company’s internal
controls over financial reporting are effective and no recommendations were made to implement any additional procedures or controls.
To the Company’s knowledge, as of the date of this filing, the allegations against Mr. Sood are still pending.
At
the request of WithumSmith, the Company put its financial filings on hold until the Audit Committee concluded its investigation.
The
Company and WithumSmith are working diligently to complete the remaining past due Form 10-Q’s and the past due Form 10-K.
The Company plans to file the past due Form 10-Q for the quarter ended March 31, 2017 by mid-May, the past due Form 10-Q for the
quarter ended June 30, 2017 by mid-June, the past due Form 10-Q for the quarter ended September 30, 2017 by mid-July, and the
past due Form 10-K for the fiscal year ended December 31, 2017 by the end of September.
We
encourage you to vote your shares, either by voting in person at the Annual Meeting or by granting a proxy
(i.e.,
authorizing
someone to vote your shares). If you properly sign and date the accompanying proxy card and the Company receives it in time for
the Annual Meeting, the persons named as proxies will vote the shares registered directly in your name in the manner that you
specified. This proxy statement is also available via the Internet at
www.princetoncapitalcorp.com
(under the “Investor
Relations” section). The website also includes electronic copies of the form of proxy and the Annual Report.
ANNUAL
MEETING INFORMATION
Date
and Location
We
will hold the 2018 Annual Meeting on Wednesday, May 30, 2018, at 1:00pm Eastern Time at 250 West Pratt Street, Suite 2000, Baltimore,
Maryland 21201.
Admission
Only
record or beneficial owners of the Company’s common stock as of the close of business on April 16, 2018 or their proxies
may attend the Annual Meeting. Beneficial owners must also provide evidence of stock holdings, such as a recent brokerage account
statement.
Purpose
of the Annual Meeting
At
the Annual Meeting, you will be asked to vote on the following proposals:
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1.
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The
election of four (4) directors of the Company;
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2.
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The
ratification of the selection of WithumSmith&Brown, PC as the Company’s independent
registered public accounting firm for the year ending December 31, 2018;
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3.
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To
approve the new investment advisory agreement between the Company and House Hanover,
LLC, a Delaware limited liability company, pursuant to which House Hanover LLC will be
appointed as the Company’s investment advisor;
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4.
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To
approve the adjournment of the Annual Meeting, if necessary or appropriate, to solicit
additional proxies; and
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5.
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To
transact such other business as may properly come before the meeting, or any postponement
or adjournment thereof.
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VOTING
INFORMATION
Record
Date and Quorum Required
The
record date of the Annual Meeting is the close of business on April 16, 2018 (the “Record Date”). You may cast one
vote for each share of our common stock that you own of record as of the Record Date.
A
quorum of stockholders must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting,
in person or by proxy, of stockholders entitled to cast a majority of the votes entitled to be cast as of the Record Date will
constitute a quorum. Abstentions will be treated as shares present for quorum purposes. Shares held in “street name”
by a bank, broker, or other nominee, and for which the nominee is present (in person or by proxy) and has not received voting
instructions from the beneficial owner and does not have discretionary authority to vote the shares on certain proposals (“Broker
Non-Votes”) will be treated as shares present for quorum purposes. On the Record Date, there were
[120,486,061]
shares of our common stock outstanding and entitled to vote. Thus,
[60,243,031]
shares of our common stock must
be present at the Annual Meeting in person or by proxy to have a quorum.
If
a quorum is not present at the Annual Meeting, the stockholders who are represented may adjourn the Annual Meeting until a quorum
is present. The persons named as proxies may vote those proxies for such adjournment if Proposal 4 on the attached Proxy Card
is marked for such adjournment.
Submitting
Voting Instructions for Shares Held Through a Broker
If
you hold shares of common stock in “street name” through a broker, bank, or other nominee, you must follow the instructions
you receive from your broker, bank, or nominee in order to provide voting instructions to your broker, bank, or nominee. If you
hold shares of our common stock through a broker, bank or other nominee and you want to vote in person at the Annual Meeting,
you must obtain a legal proxy from the record holder of your shares and present it at the meeting. If you do not submit voting
instructions to your broker, bank, or other nominee, your broker, bank, or other nominee will be permitted to vote in its discretion
on Proposal 2, to ratify the selection of WithumSmith&Brown, PC as the Company’s independent registered public accounting
firm for the year ending December 31, 2018, but will not be permitted to vote your shares on any other proposal considered at
the Annual Meeting.
Authorizing
a Proxy for Shares Held in Your Name
If
you are a record holder of shares of our common stock, you may authorize a proxy to vote on your behalf by mail, as described
on the enclosed proxy card. If you are a stockholder of record, you may also authorize a proxy and provide voting instructions
via telephone or Internet by following the instructions on the proxy card. Authorizing a proxy will not limit your right to vote
in person at the Annual Meeting. A properly completed, executed and submitted proxy will be voted in accordance with your instructions,
unless you subsequently revoke the proxy. If you authorize a proxy without indicating your voting instructions, the proxy holder
will vote your shares according to the Board’s recommendations.
Revoking
Your Proxy
If
you are a stockholder of record, you can revoke your proxy by (1) delivering a written revocation notice prior to the Annual Meeting
to our Secretary, Gregory J. Cannella, at 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845; (2) delivering a
later-dated proxy that we receive no later than the opening of the polls at the Annual Meeting; or (3) voting in person at the
Annual Meeting. If you hold shares of common stock through a broker, bank or other nominee, you must follow the instructions you
receive from your nominee in order to revoke your voting instructions. Attending the Annual Meeting does not revoke your proxy
unless you also vote in person at the Annual Meeting.
Vote
Required
Proposal
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Vote
Required
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Broker
Discretionary Voting Allowed
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Effect
of Abstentions and Broker Non-Votes
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Proposal
1 —
The election of four (4) directors.
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Affirmative
vote of the holders of a plurality
1
of the votes cast in the election of directors at the Annual Meeting.
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No
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Abstentions
and broker non-votes, if any, are not votes cast and, as a result, will have no effect on the outcome of the election of directors.
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Proposal
2 —
To ratify the selection of WithumSmith&Brown, PC as the Company’s independent registered public
accounting firm for the year ending December 31, 2018.
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Affirmative
vote of a majority of the votes cast at the Annual Meeting.
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Yes
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Abstentions
and broker non-votes, if any, are not votes cast and, as a result, will have no effect on this proposal.
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Proposal
3 —
The approval of the new investment advisory agreement between the Company
and House Hanover, LLC, a Delaware limited liability company, pursuant to which House
Hanover, LLC will be appointed as the Company’s investment advisor
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Affirmative
vote of a majority of the outstanding shares of the Company’s common stock entitled to vote at the Annual Meeting
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No
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Abstentions
and broker non-votes, if any, will have the same effect of a vote against this proposal.
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Proposal
4 —
To approve the adjournment of the Annual Meeting, if necessary or appropriate, to solicit additional proxies.
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Affirmative
vote of a majority of the votes cast on the proposal at the Annual Meeting.
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No
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Abstentions
and broker non-votes, if any, are not votes cast and, as a result, will have no effect
on this proposal.
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Ownership
by Capital Point Partners, LP and Capital Point Partners II, LP
Capital
Point Partners, LP and Capital Point Partners II, LP (the “Partnerships”) beneficially own
[104,562,000]
and
[10,922,327]
shares of the Company’s common stock, respectively, representing approximately
[96%]
of the Company’s outstanding common stock and voting power. We entered into an agreement with the Partnerships concerning
their obligations pursuant to Section 12(d)(1)(e) of the Investment Company Act of 1940, as amended (the “1940 Act”).
Under this agreement, the Partnerships will either (i) seek instructions from those holding interests in the Partnerships with
regards to voting proxies issued by the Company or (ii) vote the shares of the Company’s common stock they own in the same
proportion “for” and “against” each proposal as all of our other stockholders vote their shares of the
Company’s common stock on each of the matters to be voted on by stockholders at the Annual Meeting.
1
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Plurality means the individual who gets the most votes, regardless of
whether or not such individual obtains a majority of the votes.
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INFORMATION
REGARDING THIS SOLICITATION
Our
Board is making this solicitation and the Company will bear the expense of the solicitation of proxies for the Annual Meeting,
including the cost of preparing, printing, and mailing this proxy statement, the accompanying Notice of Annual Meeting of Stockholders,
and the proxy card. If brokers, trustees, or fiduciaries and other institutions or nominees holding shares in their names, or
in the name of their nominees, which are beneficially owned by others, forward the proxy materials to, and obtain proxies form,
such beneficial owners, we will reimburse such persons for their reasonable expenses in so doing.
In
addition to the solicitation of proxies by the use of the mail, proxies may be solicited in person and/or by telephone or facsimile
transmission by directors, officers or employees of the Company. No additional compensation will be paid to directors, officers
or employees of the Company for such services.
Stockholders
may also authorize a proxy and provide their voting instructions by telephone and through the Internet. This option requires stockholders
to input the Control Number which is located on each proxy card. After inputting this number, stockholders will be prompted to
provide their voting instructions. Stockholders authorizing a proxy via the Internet will have an opportunity to review their
voting instructions and make any necessary changes before submitting their voting instructions and terminating their Internet
link. Stockholders who authorize a proxy via the Internet, in addition to confirming their voting instructions prior to submission,
will also receive an e-mail confirming their instructions upon request.
If
a stockholder wishes to participate in the Annual Meeting, but does not wish to give a proxy electronically, the stockholder may
still submit the proxy card originally sent with this Proxy Statement or attend the Annual Meeting in person.
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy
statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement
and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,”
potentially means extra convenience for stockholders and cost savings for companies.
A
number of brokerages and other institutional holders of record have implemented householding. A single proxy statement will be
delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders.
If you have received notice from your broker that it will be householding communications to your address, householding will continue
until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding
and would prefer to receive a separate proxy statement, please notify your broker. Stockholders who currently receive multiple
copies of the proxy statement at their addresses and would like to request information about householding of their communications
should contact their brokers or other intermediary holder of record. You can notify us by sending a written request to: Gregory
J. Cannella, Secretary, Princeton Capital Corporation, 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845, or
by calling (978) 794-3366.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of
[April 16]
, 2018, the beneficial ownership of each current director (and each
nominee for director), the Company’s executive officers, each person known to us to beneficially own 5% or more of the outstanding
shares of the Company’s common stock, and the executive officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.
Common stock subject to options or warrants that are currently exercisable or exercisable within 60 days of
[April 16]
,
2018 are deemed to be outstanding and beneficially owned by the person holding such options or warrants. Such shares, however,
are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of ownership
is based on
[120,486,061]
shares of the Company’s common stock outstanding as of
[April 16]
,
2018.
Unless
otherwise indicated, to our knowledge, each stockholder listed below has sole voting and investment power with respect to the
shares beneficially owned by the stockholder, except to the extent authority is shared by their spouses under applicable law.
Unless otherwise indicated, the address of all executive officers and directors is c/o Princeton Capital Corporation, 800 Turnpike
Street, Suite 300, North Andover, Massachusetts 01845.
The
Company’s directors are divided into two groups - interested directors and independent directors. Interested directors are
“interested persons” as defined in Section 2(a)(19) of the 1940 Act and the NASDAQ (“NASDAQ”) Stock Market
Rules, as the Over the Counter Pink (“OTCPK”) exchange where the Company trades, does not establish director independence
standards.
Name
and Address of Beneficial Owner
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Number
of Shares Owned Beneficially
(1)
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Percentage
of Class
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Interested Directors
(Interested Director Nominees)
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Mark S.
DiSalvo
(2)
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115,484,327
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95.9
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%
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Independent Directors
(Independent Director Nominees)
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Greg Bennett
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0
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*
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Martin Laidlaw
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0
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*
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Darren Stainrod
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0
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*
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|
|
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark S. DiSalvo
(2)
|
|
|
115,484,327
|
|
|
|
|
|
|
|
95.9
|
%
|
Gregory J. Cannella
|
|
|
0
|
|
|
|
|
|
|
|
*
|
|
Florina Klingbaum
|
|
|
0
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive officers
and directors as a group
|
|
|
115,484,327
|
|
|
|
|
|
|
|
95.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater than 5% Holders
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Point Partners,
LP
(3)
|
|
|
104,562,000
|
|
|
|
86.8
|
|
|
|
|
%
|
Capital Point Partners
II, LP
(3)
|
|
|
10,922,327
|
|
|
|
9.07
|
|
|
|
|
%
|
*
Less than 1%
|
(1)
|
Beneficial
ownership has been determined in accordance with Rule 13d-3 of the Securities Exchange
Act of 1934, as amended.
|
|
(2)
|
Mr.
DiSalvo, by virtue of his ownership of all of the outstanding stock of Sema4, Inc., the
general partner of Capital Pointer Partners, LP (“CPP”) and Capital Point
Partners II, LP (“CPP II”), may be deemed to be the beneficial owner of the
104,562,000 shares of the Company’s common stock owned by CPP and the 10,922,327
shares of the Company’s common stock owned by CPP II. Mr. DiSalvo and Sema4, Inc.
each disclaims beneficial ownership of any shares held by CPP and CPP II, except to the
extent of their pecuniary interest therein. The address of Sema4, Inc., CPP and CPP II
is 800 Turnpike Street, Suite 300, North Andover, MA 01854.
|
|
(3)
|
This
information is based on information included in the Schedule 13D filed with the SEC.
|
The
following table sets forth as of
[April 16]
, 2018, the dollar range of our securities owned by our directors and
executive officers.
Name
|
|
|
Dollar
Range of Equity Securities Beneficially Owned
(1)(2)
|
|
Interested Director:
|
|
|
|
|
Mark S. DiSalvo
|
|
|
Over
$100,000
|
|
|
|
|
|
|
Independent Directors:
|
|
|
|
|
Greg Bennett
|
|
|
None
|
|
Martin Laidlaw
|
|
|
None
|
|
Darren Stainrod
|
|
|
None
|
|
|
|
|
|
|
Executive Officers:
|
|
|
|
|
Mark S. DiSalvo
|
|
|
Over
$100,000
|
|
Gregory J. Cannella
|
|
|
None
|
|
Florina Klingbaum
|
|
|
None
|
|
|
(1)
|
The
dollar range of the equity securities beneficially owned is based on the closing price
per share of the Company’s common stock of
[$___]
on
[April
16]
, 2018 on the OTCPK.
|
|
(2)
|
The
dollar ranges of equity securities beneficially owned are: none; $1–$10,000; $10,001–$50,000;
$50,001–$100,000; and over $100,000.
|
PROPOSAL
1: ELECTION OF DIRECTORS
Proposal
1 is that we are proposing to elect the following directors to the Board: Greg Bennett, Mark DiSalvo, Darren Stainrod, and Martin
Laidlaw, as further described herein.
Our
business and affairs are managed under the direction of the Board. Pursuant to the Company’s Charter and bylaws, the number
of directors on our Board is currently fixed at five directors, and all directors, beginning with the 2017 Annual Meeting of Stockholders
that was held on July 14, 2017, will stand for election to a term expiring at the next annual meeting of stockholders or until
their respective successors are duly elected and qualified. Messrs. Laidlaw, Bennett, DiSalvo, and Stainrod were each elected
at the 2017 Annual Meeting of Stockholders and their terms will expire at the 2018 Annual Meeting. Mr. Sood was also elected as
a director at the 2017 Annual Meeting of Stockholders, but as previously disclosed, Mr. Sood resigned as a director, effective
September 27, 2017. The Company’s Nominating and Corporate Governance Committee, in accordance with the Nominating and Corporate
Governance Committee Charter dated as of December 6, 2016, has recommended that one vacancy remain on the Board until the Company
has caught up on its past due SEC filings.
In
this regard, four directors are to be elected at the Annual Meeting. All of the directors elected at the Annual Meeting will serve
until the 2019 Annual Meeting of Stockholders, and until their successors are duly elected and qualified, or until their earlier
death, resignation or removal.
The
Board, upon the recommendation of the Nominating and Corporate Governance Committee, has recommended as nominees for election
as directors, to serve until the 2019 Annual Meeting or until their respective successors are duly elected and qualified, the
persons named below. All of the nominees are currently directors of the Company and each of the nominees terms are expiring at
the Annual Meeting. Upon the past due Form 10-Q’s and the past due Form 10-K being filed, the Board and the Nominating and
Corporate Governance Committee intend to review the number of directors serving upon the Board and consider the experiences and
strengths desirable for directors serving on the Board. The proxies cannot be voted for more than four directors at the Annual
Meeting. Since fewer nominees are named for director than the number fixed by the Charter of the Company, the proxies cannot be
voted for a greater number of persons than the number of nominees named. The Company’s stockholders are not being asked
to vote separately on an amendment to the Company’s Charter to reduce the size of the Board because the Company’s
Charter and Bylaws delegate the power to reduce the size of the Board solely to the Board and not to the Company’s stockholders.
Each
of the nominees has indicated his willingness to serve as a director if elected and has consented to be named as a nominee. None
of the nominees are being nominated to serve as a director pursuant to any agreement or understanding between them and the Company.
A
stockholder can vote for or withhold his or her vote for each of the nominees.
In the absence of instructions to the contrary,
the persons named as proxies will vote such proxy FOR the election of the nominees named in this proxy statement. If any of the
nominees should decline or be unable to serve as a director, it is intended that the proxy will be voted for the election of such
person as is nominated by the Board as a replacement.
The Board has no reason to believe that any of the nominees will be
unable or unwilling to serve.
Information
about Director Nominees
As
described below under “Committees of the board of directors — Nominating and Corporate Governance Committee,”
the Board has identified certain desired attributes for director nominees, which criteria was evaluated by the Nominating and
Corporate Governance Committee as a part of the nomination process for the upcoming Annual Meeting. Each of the director nominees
has demonstrated high character and integrity, superior credentials and recognition in his respective field and the relevant expertise
and experience upon which to be able to offer advice and guidance to our management. Each of our director nominees also has sufficient
time available to devote to the affairs of the Company, is able to work with the other members of the Board and contribute to
the success of the Company and can represent the long-term interests of the Company’s stockholders as a whole. Our director
nominees have been selected such that the Board represents a range of backgrounds and experience.
Certain
information, as of the Record Date, with respect to the director nominees, is set forth below, including their names, ages, a
brief description of their business experience during the past five years, including present occupations and employment, directorships
that each person holds and has held in the past five years, the year in which each person became a director of the Company, and
a discussion of their particular experience, qualifications, attributes or skills that lead us to conclude, as of the Record Date,
that such individual should serve as a director of the Company, in light of the Company’s business and structure.
The
business address of the nominees for directors listed below is 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845
.
Nominees
for Directors
Mr.
DiSalvo is an “interested person” of the Company as defined in the 1940 Act and NASDAQ Rules due to his controlling
interest in Sema4, Inc., which is the general partner of Capital Point Partners, LP and Capital Point Partners II, LP. Each of
Messrs. Stainrod, Laidlaw and Bennett is not an “interested person” of the Company as defined in the 1940 Act and
the NASDAQ Rules.
Interested
Directors
Mark
DiSalvo
, 63, serves as our Interim Chief Executive Officer and Interim President. He was originally elected to the Company’s
Board on June 9, 2016 and re-elected to the Board by the Company’s stockholders at the 2017 Annual Meeting on July 14, 2017.
He is the President and CEO of Sema4, Inc., a leading global professional services provider of private equity funds-under-management.
He has been a senior executive and entrepreneur at international companies such as Euromoney Institutional Investor and Fairfield
Whitney, and was founder of Hall, Berwick and DiSalvo where he provided funding and management advisory services to zero and first
stage entities prior to founding Sema4. He has extensive experience in private equity, entrepreneurial management, and emerging
market strategy, particularly as to underserved markets and economic development. A frequent speaker at worldwide industry conferences,
he is a charter member of the Inner City Economic Forum. Mr. DiSalvo was educated at the University of Massachusetts with degrees
in Political Studies and Economics and has earned the professional designations CPC and CTA. He is a long-time lecturer at the
Johnson School of Business at Cornell University and the Kellogg School of Business at Northwestern University in their full-time
MBA programs where he contributes case studies in private equity, emerging market economics and cross-border M&A. We believe
Mr. DiSalvo’s broad experience with private equity funds and early stage growth companies makes him a well-qualified nominee
for re-election to our Board.
Independent
Directors
Darren
Stainrod,
53, serves as the Chairman of the Company’s Board and was originally appointed to the Company’s Board
on January 18, 2016 and re-elected to the Board by the Company’s stockholders at the 2017 Annual Meeting on July 14, 2017.
Mr. Stainrod is a Principal of Marbury Fund Services (Cayman) Limited (“Marbury”), a fiduciary services company focused
on the alternative investment industry and licensed by the Cayman Islands Monetary Authority. He is registered as a director with
the Authority pursuant to the Directors Licensing and Registration Law, 2014. Prior to joining Marbury, Mr. Stainrod was a Principal
at HighWater Limited in Cayman for almost 3 years where he provided professional director services to hedge funds, fund of funds
and private equity vehicles. Before becoming a professional director in May 2013, Mr. Stainrod spent 17 years at UBS where he
was a Managing Director and the Global Head of UBS Alternative Fund Services. At UBS he had responsibility for the overall management
and development of the global hedge fund administration business in seven countries with more than 300 staff servicing alternative
investment funds with over $200 billion in assets under administration. Mr. Stainrod has over 27 years of experience in the investment
fund industry, including 23 years offshore. Before joining UBS, he worked for three years with Coopers & Lybrand in Cayman
and four years with Deloitte in the UK. Mr. Stainrod holds a BA (Hons) in Politics from the University of Reading in the UK. He
is a member of the Institute of Chartered Accountants in England and Wales and the Cayman Islands Society of Professional Accountants.
He is a past Chairman of the Cayman Islands Fund Administrators Association and is the current Treasurer of AIMA Cayman Chapter.
Mr. Stainrod brings to the Board extensive experience as a director of hedge funds, fund of funds and private equity funds as
well as considerable experience in the investment fund industry, all of which provide our Board with valuable insight and supports
Mr. Stainrod’s re-election to our Board. Mr. Stainrod serves as chairman of the Company’s Nominating and Corporate
Governance Committee and he is a member of the Company’s Audit Committee and the Company’s Valuation Committee.
Martin
Laidlaw,
61, who was originally elected by the Board (to fill a vacancy) on January 18, 2016 and re-elected to the Board by
the Company’s stockholders at the 2017 Annual Meeting on July 14, 2017, is a Director of Premier Fiduciary Services (Cayman)
Ltd. and a former Managing Director of JP Fund Administration (Cayman) Ltd. (“JPFA”) and has over 25 years of experience
in the offshore financial industry. Mr. Laidlaw has an extensive range of experience with all forms of investment fund products
and has held numerous directorship positions for a wide variety of offshore fund vehicles. From 1989 to 2009 Mr. Laidlaw was employed
with CIBC Bank and Trust Company (Cayman) Limited. He was appointed Director and Head of Fund Services and was responsible for
leading the fund services team and developing new business and client relationships. Prior to his years at CIBC, he was employed
with KPMG, Cayman Islands where he led various financial services audits. He was a founding member, Director and Treasurer of
the Cayman Islands Fund Administrators Association. Martin graduated from Edinburgh University in Scotland with a Bachelor of
Commerce Degree. He was admitted as a Member of the Institute of Chartered Accountants of Scotland in February, 1984 and continues
to maintain his qualification. He is a Cayman Islands Monetary Authority Registered Director and is a member of The Alternative
Investment Management Association (AIMA). Mr. Laidlaw’s extensive experience in the financial industry, including his financial
and accounting background, and his experience as a director of various offshore fund vehicles makes him well qualified to serve
on our Board. Mr. Laidlaw serves as chairman of the Company’s Audit Committee and he is a member of the Company’s
Nominating and Corporate Governance Committee and the Company’s Valuation Committee.
Greg
Bennett,
45, who was originally elected to the Company’s Board on June 9, 2016 and re-elected to the Board by the Company’s
stockholders at the 2017 Annual Meeting on July 14, 2017, is the co-founder of Danesmead Partners. Mr. Bennett has more than eighteen
years of experience in financial services having started his professional career with Coopers & Lybrand in Canada in 1996.
From 2011 through 2014, prior to co-founding Danesmead Partners, Mr. Bennett was a Director of The Harbour Trust Co. Ltd., where
he provided fiduciary services to their clients, including serving as an independent hedge fund director. In 2004 Mr. Bennett
joined Butterfield Fund Services (Cayman) Limited as head of client relationship management and he became a Director of that firm
in 2005. In 2008 he was promoted to Managing Director where he had responsibility for all aspects of the business, including managing
over 75 staff responsible for providing full fund administration services to a wide range of hedge fund clients with in excess
of $30 billion in assets under management. In 2010 Mr. Bennett established the Cayman office of HedgeServ and held the position
of Managing Director. Mr. Bennett graduated with a Bachelor of Commerce from the University of Alberta in Canada in 1995. He is
a Chartered Accountant (Canada), a Certified Public Accountant (US), and a CFA Charterholder. Mr. Bennett is also a Director of
Hedge Funds Care Cayman, past Deputy Chairman of the Cayman Islands Fund Administrators Association, past Treasurer of AIMA Cayman
and a past President of the CFA Society of the Cayman Islands. Mr. Bennett’s considerable experience in the financial services
industry and as a director of various hedge funds and his accounting background make him well qualified to serve on our Board.
Mr. Bennett serves as chairman of the Company’s Valuation Committee and he is a member of the Company’s Nominating
and Corporate Governance Committee and the Company’s Audit Committee.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES NAMED IN THIS PROXY
STATEMENT.
Information
about Director Nominees and Executive Officers
Board
of Directors
The
terms of each of the directors are expiring at the 2018 Annual Meeting. Each director will hold office to a term expiring at the
next annual meeting of stockholders or until their respective successors are duly elected and qualified.
The
Board considered whether each of the director nominees is qualified to serve as a director, based on a review of the experience,
qualifications, attributes and skills of each nominee, including those described above. The Board will also consider whether each
director nominee has significant experience in the investment or financial services industries and has held management, board
or oversight positions in other companies and organizations. For the purposes of this presentation, our directors and director
nominees have been divided into two groups — independent directors and director nominees and interested directors and director
nominees. Interested directors and director nominees are “interested persons” as defined in the 1940 Act and NASDAQ
Rules.
Name
|
|
Age
|
|
Position
|
|
Director
Since
|
|
Term
Expires
|
Interested
Directors Director Nominees
|
|
|
|
|
|
|
|
|
Mark
S. DiSalvo
|
|
63
|
|
Interim
Chief Executive Officer, Interim President, Current Director and Director Nominee
|
|
2016
|
|
2018
|
|
|
|
|
|
|
|
|
|
Independent
Director Nominees
|
|
|
|
|
|
|
|
|
Martin
Laidlaw
|
|
61
|
|
Current
Director and Director Nominee
|
|
2016
|
|
2018
|
Greg
Bennett
|
|
45
|
|
Current
Director and Director Nominee
|
|
2016
|
|
2018
|
Darren
Stainrod
|
|
53
|
|
Current
Director and Director Nominee
|
|
2016
|
|
2018
|
The
address for each of our directors is c/o Princeton Capital Corporation,
800 Turnpike Street, Suite 300, North Andover, Massachusetts
01845
.
Executive
Officers Who Are Not Directors
Information
regarding our executive officers who are not directors is as follows (such information includes each officer’s business
experience during the past five years):
Name
|
|
Age
|
|
Position
|
Gregory
J. Cannella
|
|
43
|
|
Chief
Financial Officer, Secretary, and Treasurer
|
Florina
Klingbaum
|
|
42
|
|
Chief
Compliance Officer
|
The
address for each of our executive officers is c/o Princeton Capital Corporation,
800 Turnpike Street, Suite 300, North Andover,
Massachusetts 01845.
Gregory
J. Cannella
, 43, has served as our Chief Financial Officer, Treasurer and Secretary since March 13, 2015. Mr. Cannella resigned
as Chief Financial Officer, Treasurer and Secretary of the Company at the 2016 Annual Meeting and was subsequently re-elected
the following day. Mr. Cannella is responsible for financial reporting, investor communications, financial modeling and due diligence
and analysis of acquisitions and dispositions. Prior to this, Mr. Cannella was the Chief Financial Officer of Capital Point Partners,
a private equity group that focused on mezzanine lending to small and middle market private companies, where he was responsible
for financial reporting, investor communications, financial modeling and due diligence and analysis of acquisitions and dispositions.
Prior to working at Capital Point Partners, Mr. Cannella was an Asset Manager at First Commonwealth Holdings Corp., a wealth management
firm in Houston, Texas where he was responsible for managing various commercial and multi-family residential real estate investment
funds as well as oversight of accounting functions and reporting for the funds. Mr. Cannella received a B.B.A. in Management from
Stephen F. Austin State University and an M.B.A. with honors in Accounting and Finance from the University of Houston. He is a
Certified Public Accountant in the State of Texas.
Florina
Klingbaum
, 42, has served as our Chief Compliance Officer since January 1, 2018, following Joy Sheehan’s resignation
as our Chief Compliance Officer, effective December 31, 2017. Ms. Klingbaum is a Managing Member of Altemis Capital Management
LLC an investment management provider specializing in compliance and regulatory services. From 2015-2016, she served as a Consultant
for Nuveen Investments in New York City. During her career, Ms. Klingbaum has held senior roles at both Citigroup Global Markets
as well as Credit Suisse. She has extensive experience in alternative investments, structured products and overall fund operations
including fund administration, accounting, regulatory, compliance and fund liquidation services. Ms. Klingbaum started her career
at KPMG LLP where she was a Senior Auditor in the Financial Services division. She holds two Masters degrees, in Accounting and
Business Administration respectively, from Pace University, a BA in Sociology from the University of Toronto, and is a CPA.
Board
of Directors and Its Leadership Structure
Our
business and affairs are managed under the direction of our Board. The Board consists of four directors, three of whom are not
“interested persons” of the Company, or its affiliates as defined in Section 2(a)(19) of the 1940 Act and NASDAQ Rules.
We refer to these individuals as our “independent directors.” The Board currently has one vacancy following the resignation
of Mr. Sood on September 27, 2017. As disclosed elsewhere in this proxy statement, the Nominating and Corporate Governance Committee
plans to review the number of directors serving upon the Board and consider the experiences and strengths desirable for directors
serving on the Board, after the Company has caught up on its past due financial filings. The Board elects our officers, who serve
at the discretion of the Board. The responsibilities of the Board include quarterly valuation of our assets, corporate governance
activities, oversight of our financing arrangements and oversight of our investment activities.
Oversight
of our investment activities extends to oversight of the risk management processes employed by House Hanover, LLC (“House
Hanover”) as part of its day-to-day management of our investment activities under the Interim Investment Advisory Agreement.
The Board anticipates reviewing risk management processes at both regular and special board meetings throughout the year, consulting
with appropriate representatives of House Hanover, as necessary and periodically requesting the production of risk management
reports or presentations. The goal of the Board’s risk oversight function is to ensure that the risks associated with our
investment activities are accurately identified, thoroughly investigated and responsibly addressed. Stockholders should note,
however, that the Board’s oversight function cannot eliminate all risks or ensure that particular events do not adversely
affect the value of investments.
The
Board has established an audit committee, a nominating and corporate governance committee, and a valuation committee and may establish
additional committees from time to time as necessary. The scope of the responsibilities assigned to each of these committees is
discussed in greater detail below. Mr. DiSalvo is the sole owner and an affiliate of House Hanover, the interim investment advisor
of the Company (and as set forth in Proposal 3 herein, the proposed investment advisor of the Company moving forward). Mr. DiSalvo
is an “interested person” of the Company as defined in Section 2(a)(19) of the 1940 Act and NASDAQ Rules due to his
ownership of Sema4, Inc., the general partner of Capital Point Partners, LP and Capital Point Partners II, LP, which own approximately
87% and 9% of the outstanding common stock of the Company respectively.
Mr.
Stainrod serves as the Company’s Chairman of the Board. In addition to having an independent director serve as the Company’s
Chairman of the Board, our corporate governance practices are intended to provide additional risk management for our Company.
These governance practices include regular meetings of the independent directors in executive session without the presence of
interested directors and management, the establishment of an audit committee, a nominating and corporate governance committee,
and a valuation committee, each of which is comprised solely of independent directors, and the appointment of a Chief Compliance
Officer, with whom the independent directors meet without the presence of interested directors and other members of management,
for administering our compliance policies and procedures. The Chairman or his designee will preside over the executive sessions
of our independent directors.
The
Board believes that its leadership structure is appropriate in light of our characteristics and circumstances because the structure
allocates areas of responsibility among the individual directors and the committees in a manner that affords effective oversight.
Specifically, the Board believes that the relationship of Mr. DiSalvo provides an effective bridge between the Board, the Company’s
interim investment advisor and management, and encourages an open dialogue between management and our Board, ensuring that these
groups act with a common purpose. The Board also believes that its small size creates a highly efficient governance structure
that provides ample opportunity for direct communication and interaction between our management, the Company’s interim investment
advisor and the Board.
Board
Meetings
Our
Board met 12 times during 2017. Each director attended at least 73% of the total number of meetings of the Board and committees
on which the director served that were held while the director was a member. The Board’s standing committees are set forth
below. We require each director to make a diligent effort to attend all Board and committee meetings, as well as each Annual Meeting
of Stockholders. All of the board members attended, in person or via teleconference, the Company’s 2017 Annual Meeting of
Stockholders.
Audit
Committee
The
members of the audit committee are Messrs. Laidlaw, Stainrod, and Bennett each of whom meets the independence standards established
by the SEC and the NASDAQ (the “NASDAQ”) for audit committees and is independent for purposes of the 1940 Act. Mr.
Laidlaw serves as chairman of the audit committee. Our Board has determined that Mr. Laidlaw is an “audit committee financial
expert” as that term is defined under Item 407 of Regulation S-K of the Securities Exchange Act of 1934, as amended. The
Board has adopted a charter of the audit committee, which is available in print to any stockholder who requests it and it is also
available on the Company’s website at
www.princetoncapitalcorp.com
. The audit committee met 4 times during 2017.
Each member attended at least 75% of the audit committee meetings that were held while the director was a member of the audit
committee.
The
audit committee is responsible for approving our independent accountants, reviewing with our independent accountants the plans
and results of the audit engagement, approving professional services provided by our independent accountants, reviewing the independence
of our independent accountants and reviewing the adequacy of our internal accounting controls. The audit committee is also responsible
for aiding our Board in fair value pricing debt and equity securities that are not publicly traded or for which current market
values are not readily available. The Board and audit committee utilizes the services of an independent valuation firm to help
them determine the fair value of these securities. The audit committee may also be tasked with special investigations into director
and/or officer conduct, as was the case in 2017 when the audit committee conducted a formal investigation into allegations against
Mr. Sood, as disclosed in the Company’s Form 8-K filed with the SEC on January 24, 2018.
Nominating
and Corporate Governance Committee
The
members of the nominating and corporate governance committee are Messrs. Stainrod, Laidlaw, and Bennett, each of whom is independent
for purposes of the 1940 Act and the NASDAQ corporate governance regulations. Mr. Stainrod serves as chairman of the nominating
and corporate governance committee. The nominating and corporate governance committee is responsible for selecting, researching
and nominating directors for election by our stockholders, selecting nominees to fill vacancies on the Board or a committee of
the Board, developing and recommending to the Board a set of corporate governance principles and overseeing the evaluation of
the Board and our management. The Board has adopted a charter of the nominating and corporate governance committee, which is available
in print to any stockholder who requests it and it is also available on the Company’s website at
www.princetoncapitalcorp.com
.
The nominating and corporate governance committee met 1 time during 2017. Each member attended 100% of the nominating and corporate
governance committee meetings that were held while the director was a member of the nominating and corporate governance committee.
The
nominating and corporate governance committee will consider nominees to the Board recommended by a stockholder if such stockholder
complies with the advance notice provisions of our bylaws. Our bylaws provide that a stockholder who wishes to nominate a person
for election as a director at a meeting of stockholders must deliver written notice to our corporate secretary. This notice must
contain, as to each nominee, all of the information relating to such person as would be required to be disclosed in a proxy statement
meeting the requirements of Regulation 14A under the Securities Exchange Act of 1934, as amended, and certain other information
set forth in the bylaws. In order to be eligible to be a nominee for election as a director by a stockholder, such potential nominee
must deliver to our corporate secretary a written questionnaire providing the requested information about the background and qualifications
of such person, and would be in compliance with all of our publicly disclosed corporate governance, conflict of interest, confidentiality
and stock ownership and trading policies and guidelines.
The
nominating and corporate governance committee has not adopted a formal policy with regard to the consideration of diversity in
identifying individuals for election as members of the Board, but the committee will consider such factors as it may deem are
in our best interests and those of our stockholders. Those factors may include a person’s differences of viewpoint, professional
experience, education and skills, as well as his or her race, gender and national origin. In addition, as part of the board’s
annual self-assessment, the members of the nominating and corporate governance committee will evaluate the membership of the Board
and whether the board maintains satisfactory policies regarding membership selection.
Valuation
Committee
The
members of the valuation committee are Messrs. Laidlaw, Bennett and Stainrod. Mr. Bennett serves as chairman of the valuation
committee. The valuation committee is responsible for establishing guidelines and making recommendations to the Board on matters
relating to the valuation of our investments. The valuation committee met two times during 2017. Mr. Laidlaw attended 50% of the
valuation committee meetings that were held during 2017 and Messrs. Bennett and Stainrod attended 100% of the valuation committee
meetings that were held during 2017.
Compensation
Committee
We
do not have a compensation committee or a committee performing similar functions because our executive officers do not receive
any compensation from the Company. All decisions concerning compensation of House Hanover are made by the Board (with Mr. DiSalvo
recusing himself from deliberations and voting). The Company has chosen not to establish a separately designated compensation
committee because the executive officers of the Corporation do not receive direct compensation from the Company. Executive officers
of the Company are employees of, and are compensated by, House Hanover. Compensation payable by the Company to the Advisor is
required to be approved by a majority of the Company’s independent directors pursuant to Section 15(c) of the 1940 Act.
Since the Audit Committee consists of a majority of the independent directors of the Company, the Company has allocated responsibility
to consider the compensation paid to the Advisor to the Audit Committee.
The
Nominating and Corporate Governance Committee will review the form and amount of independent director compensation at least annually
and make any changes, as it deems appropriate.
Compensation
of Directors
For
the year ended December 31, 2016, $184,871 in director’s fees for the independent directors were accrued, of which $184,871
has been paid, with $0 paid in 2016 and $184,871 paid in 2017.
For
the year ended December 31, 2017, $145,288 in director’s fees for the independent directors were accrued, of which $141,457
has been paid, with $141,457 paid in 2017 and $3,831 to be paid in 2018. No amount remains unpaid to the independent directors
of the Company, for service as directors during 2017.
For
the year ending December 31, 2018, the independent directors will receive an annual fee of $30,000. They will also receive $1,500
plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending in person or telephonically each
regular board of directors meeting and each special telephonic meeting. They will also receive $1,500 plus reimbursement of reasonable
out-of-pocket expenses incurred in connection with each committee meeting attended in person and each telephonic committee meeting.
The chairmen of the audit committee, the valuation committee and the nominating and corporate governance committee will receive
an annual fee of $3,500, respectively. On March 13 2017, the independent directors agreed to cap director’s fees at $50,000
per independent director annually, and to have an amount of $12,500 advanced to them each quarter, subject to true up at the end
of each quarter. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers.
No compensation is paid to directors who are “interested persons.”
Corporate
Governance
Corporate
Governance Documents
Our
Corporate Governance Guidelines, Code of Business Conduct, Ethics and Statement on Prohibition of Insider Trading and the charters
of the Audit Committee, Nominating and Corporate Governance Committee and Valuation Committee are available at
www.princetoncapitalcorp.com
at the and are also available to any stockholder who requests them by writing to our Secretary, Gregory J. Cannella, at Princeton
Capital Corporation, 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845.
Director
Independence
In
accordance with rules of the NASDAQ, the Board annually determines the independence of each director. No director is considered
independent unless the Board has determined that he or she has no material relationship with the Company. The Company monitors
the status of its directors and officers through the activities of the Company’s nominating and corporate governance committee
and through a questionnaire to be completed by each director no less frequently than annually (and most recently in December of
2017), with updates periodically if information provided in the most recent questionnaire has changed.
In
order to evaluate the materiality of any such relationship, the Board uses the definition of director independence set forth in
the rules promulgated by the NASDAQ Stock Market. Rule 5605(a)(2) provides that a director of a business development company (“BDC”)
shall be considered to be independent if he or she is not an “interested person” of the Company, as defined in Section
2(a)(19) of the 1940 Act. Section 2(a)(19) of the 1940 Act defines an “interested person” to include, among other
things, any person who has, or within the last two years had, a material business or professional relationship with the Company.
The
Board has determined that each of the directors is independent and has no relationship with the Company, except as a director
and stockholder of the Company, with the exception of Mr. DiSalvo. Mr. DiSalvo is an interested person of the Company due to his
interests in House Hanover, our interim investment advisor (and proposed investment advisor pursuant to Proposal 3), his position
as Interim Chief Executive Officer and Interim President of the Company, and his interests in Sema4, Inc., the general partner
of Capital Point Partners, LP and Capital Point Partners II, LP, which own approximately 87% and 9% of our common stock, respectively.
Communication
with the Board
We
believe that communications between our Board, our stockholders and other interested parties are an important part of our corporate
governance process. Stockholders with questions about the Company are encouraged to contact our Secretary, Gregory J. Cannella,
at (978) 794-3366. However, if stockholders believe that their questions have not been addressed, they may communicate with the
Company’s Board by sending their communications to Princeton Capital Corporation, 800 Turnpike Street, Suite 300, North
Andover, Massachusetts 01845, Attn.: Board of Directors. All stockholder communications received in this manner will be delivered
to one or more members of the Board.
All
communications involving accounting, internal accounting controls and auditing matters, possible violations of, or non-compliance
with, applicable legal and regulatory requirements or policies, or retaliatory acts against anyone who makes such a complaint
or assists in the investigation of such a complaint, will be referred to our audit committee.
The
acceptance and forwarding of a communication to any director does not imply that the director owes or assumes any fiduciary duty
to the person submitting the communication, all such duties being only as prescribed by applicable law.
Code
of Business Conduct and Ethics and Statement on the Prohibition of Insider Trading
Our
Code of Business Conduct and Ethics and Statement on the Prohibition of Insider Trading (the “Code of Ethics”), which
is signed by directors and executive officers of the Company, requires that directors and executive officers avoid any conflict,
or the appearance of a conflict, between an individual’s personal interests and the interests of the Company. Pursuant to
the Code of Ethics which is available on our website under the “Corporate Governance” link under the “Princeton
Capital Corporation” link at
www.princetoncapitalcorp.com
, each director and executive officer must disclose any
conflicts of interest, or actions or relationships that might give rise to a conflict, to the audit committee. Certain actions
or relationships that might give rise to a conflict of interest are reviewed and approved by the Board. The Code of Ethics also
contains our policies and procedures relating to insider trading and material non-public information.
Compensation
of Executive Officers
None
of our officers receive direct compensation from the Company. Mr. DiSalvo, through his financial interest in House Hanover is
entitled to receive and has received a portion of investment advisory fees paid by the Company to House Hanover under the interim
investment advisory agreement with the Company. Our other executive officers will be paid by House Hanover, subject to reimbursement
by us of our allocable portion of such compensation for services rendered by such persons to the Company under the Interim Investment
Advisory Agreement. To the extent that House Hanover outsources any of its functions, we will reimburse House Hanover for the
fees associated with such functions without profit or benefit to House Hanover.
Indemnification
Agreements
We
have entered into indemnification agreements with our directors. The indemnification agreements are intended to provide our directors
the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that the Company
shall indemnify the director who is a party of the agreement (an “Indemnitee”), including the advancement of legal
expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness
in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.
Certain
Relationships and Transactions
We
have procedures in place for the review, approval and monitoring of transactions involving us and certain persons related to us.
As a business development company, the 1940 Act restricts us from participating in transactions with any persons affiliated with
us, including our officers, directors, and employees and any person controlling or under common control with us or our affiliates,
subject to certain exceptions. In the ordinary course of business, we may enter into transactions with portfolio companies that
may be considered related party transactions. We have implemented certain procedures, both written and unwritten, to ensure that
we do not engage in any prohibited transactions with any persons affiliated with us. If such affiliations are found to exist,
we will seek Board and/or committee review and approval or exemptive relief for such transactions, as appropriate. In accordance
with NASDAQ Rule 5630, an independent body of the Board shall be responsible for conducting an appropriate review and oversight
of all related party transactions. The Board has delegated this responsibility to the Audit Committee.
We
have entered into our Interim Investment Advisory Agreement with House Hanover, LLC (the “Interim Investment Advisory Agreement”).
The Interim Investment Advisory Agreement also provides for, subject to approval by the Board of Directors, reimbursement for
the portion of any compensation expense and the costs of any salaries of any such employees to the extent attributable to services
performed by such employees for the Company (“Administration Expenses”). At a Special Meeting of the Board held on
December 27, 2017, the independent directors of the Board, voted to approve (specifically in accordance with Rule 15a-4(b)(1)(ii)
of the 1940 Act) the Interim Investment Advisory Agreement in accordance with Rule 15a-4 of the 1940 Act. The value of the current
Interim Investment Advisory Agreement is determined based on a management fee. The amount payable to House Hanover, LLC through
April 1, 2018 under the Interim Investment Advisory Agreement is approximately $120,000. In accordance with Rule 15a-4(a)(2) of
the 1940 Act, the Interim Investment Advisory Agreement was not required to be approved by the Company’s stockholders and
the duration of the interim contract may not be greater than 150 days following the date on which the previous investment advisory
agreement terminates (i.e., the Interim Investment Advisory Agreement will terminate on May 30, 2018, the date of the 2018 Annual
Meeting). As set forth in Proposal 3, the Company’s stockholders are being asked to approve an investment advisory agreement
with House Hanover, LLC, whereby House Hanover, LLC would continue as the Company’s investment advisor upon termination
of the Interim Investment Advisory Agreement.
As
disclosed in previous filings and elsewhere in this proxy statement, the investment advisory agreement between the Company and
Princeton Advisory Group, Inc. (“PAG”) dated as of June 9, 2016 (the “PAG Investment Advisory Agreement”)
was terminated by the Board, effective as of December 31, 2017 at 11:59 p.m. Easter Time. The amount of management fees accrued
for PAG under the PAG Investment Advisory Agreement for the fiscal year ended December 31, 2017 was $453,133. The amount of administration
expenses accrued for PAG for the fiscal year ended December 31, 2017 under the PAG Investment Advisory Agreement was $139,354.
Mr. Sood, our former Chief Executive Officer and President, and a former member of our Board and owned all of the interests in
PAG.
Mr.
DiSalvo owns all of the interests in Sema4, Inc., the general partner of Capital Point Partners, LP and Capital Point Partners
II, LP, which own approximately 87% and 9% of our common stock, respectively.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, and the disclosure requirements of Item 405 of SEC Regulation S-K require
that our directors and executive officers, and any persons holding more than 10% of any class of our equity securities report
their ownership of such equity securities and any subsequent changes in that ownership to the SEC and to us. Based solely on a
review of the written statements and copies of such reports furnished to us by our executive officers, directors and greater than
10% beneficial owners, we believe that during the fiscal year ended December 31, 2015 all Section 16(a) filing requirements applicable
to the executive officers, directors and greater than 10% beneficial owners were timely satisfied, except for Messrs. Alfred Jackson,
Thomas Jones, Jr., Trennis L. Jones, Munish Sood, Gregory J. Cannella and Ms. Joy Sheehan, each of which failed to file a Form
3 on a timely basis and each of which have since filed a Form 3.
Based
solely on a review of copies of such reports as filed with the SEC, we believe that during the fiscal year ended December 31,
2016 all Section 16(a) filing requirement applicable to the executive officers, directors and greater than 10% beneficial owners
were timely satisfied.
Based
solely on a review of copies of such reports as filed with the SEC, we believe that during fiscal year ended December 31, 2017
all Section 16(a) filing requirements applicable to the executive officers, directors and greater than 10% beneficial owners were
timely satisfied.
PROPOSAL
2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018
The
Audit Committee and the independent directors of the board of directors have selected WithumSmith&Brown, PC (“WithumSmith”)
to serve as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2018. This
selection is subject to ratification by the stockholders of the Company.
WithumSmith
has advised us that neither the firm nor any present member or associate of it has any material financial interest, direct or
indirect, in the Company or its affiliates. It is expected that a representative of WithumSmith will be present at the Annual
Meeting and will have an opportunity to make a statement if he or she chooses and will be available to answer questions.
THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF WITHUMSMITH AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
(fiscal
year ended December 31, 2016)
The
following aggregate fees by WithumSmith, the Company’s independent registered public accounting firm for the fiscal year
ended December 31, 2016, were billed to the Company for work attributable to audit, tax and other services.
|
|
WithumSmith
Fiscal
Year Ended December 31, 2016
|
|
Audit Fees
|
|
$
|
245,813
|
|
Audit-Related Fees
|
|
|
—
|
|
Tax Fees
|
|
|
—
|
|
All Other Fees
|
|
|
—
|
|
Total
Fees:
|
|
$
|
245,813
|
|
Services
rendered by WithumSmith in connection with fees presented above were as follows:
Audit
Fees.
Audit fees include fees for services that normally would be provided by the accountant in connection with statutory
and regulatory filings or engagements and that generally only the independent accountant can provide. In addition to fees for
the audit of our annual financial statements, the audit of the effectiveness of our internal control over financial reporting
and the review of our quarterly financial statements in accordance with generally accepted auditing standards, this category contains
fees for comfort letters, statutory audits, consents, and assistance with and review of documents filed with the SEC.
Audit-Related
Fees.
Audit related fees are assurance related services that traditionally are performed by the independent accountant,
such as attest services that are not required by statute or regulation.
Tax
Fees.
Tax fees include professional fees for tax compliance and tax advice.
All
Other Fees.
Fees for other services would include fees for products and services other than the services reported
above.
In
the fiscal year 2016, the percentage of services designated for Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees that
were approved by the audit committee were 100%, 0%, 0%, and 0%, respectively.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
(fiscal
year ended December 31, 2017)
The
following aggregate fees by WithumSmith, the Company’s independent registered public accounting firm for the fiscal year
ended December 31, 2017, were billed to the Company for work attributable to audit, tax and other services.
|
|
WithumSmith
Fiscal
Year Ended December 31, 2017
|
|
Audit Fees
|
|
$
|
191,500
|
|
Audit-Related Fees
|
|
|
—
|
|
Tax Fees
|
|
|
—
|
|
All Other Fees
|
|
|
—
|
|
Total
Fees:
|
|
$
|
191,500
|
|
Services
rendered by WithumSmith in connection with fees presented above were as follows:
Audit
Fees.
Audit fees include fees for services that normally would be provided by the accountant in connection with statutory
and regulatory filings or engagements and that generally only the independent accountant can provide. In addition to fees for
the audit of our annual financial statements, the audit of the effectiveness of our internal control over financial reporting
and the review of our quarterly financial statements in accordance with generally accepted auditing standards, this category contains
fees for comfort letters, statutory audits, consents, and assistance with and review of documents filed with the SEC.
Audit-Related
Fees.
Audit related fees are assurance related services that traditionally are performed by the independent accountant,
such as attest services that are not required by statute or regulation.
Tax
Fees.
Tax fees include professional fees for tax compliance and tax advice.
All
Other Fees.
Fees for other services would include fees for products and services other than the services reported
above.
In
the fiscal year 2017, the percentage of services designated for Audit Fees, Audit-Related Fees, Tax Fees, and All Other Fees that
were approved by the audit committee were 100%, 0%, 0%, and 0%, respectively.
Change
in Auditor in 2016
On
March 15, 2016, and effective the same date, the Audit Committee authorized and approved the engagement of WithumSmith, as its
independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December
31, 2015 and to perform procedures related to the financial statements included in the Company’s quarterly reports on Form
10-Q, beginning with the quarter ended March 31, 2015. During the Company’s fiscal year ended December 31, 2015 and through
the interim period preceding WithumSmith’s engagement, the Company has not consulted WithumSmith regarding either (i) the
application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that
might be rendered with respect to the Company’s financial statements; or (ii) any matter that was the subject of a “disagreement”
or “reportable event” as those terms are defined in Item 304(a)(1) of Regulation S-K; and there was neither a written
report nor oral advice provided to the Company by WithumSmith that WithumSmith concluded was an important factor considered by
the Company in reaching a decision as to any auditing or financial reporting issue.
Pre-Approval
Policy
The
Audit Committee has established a pre-approval policy that describes the permitted audit, audit-related, tax and other services
to be provided by the Company’s independent registered public accounting firm. The policy requires that the Audit Committee
pre-approve all audit and non-audit services performed by the independent auditor in order to assure that the provision of such
service does not impair the auditor’s independence. In accordance with the pre-approval policy, the Audit Committee includes
every year a discussion and pre-approval of such services and the expected costs of such services for the year.
Any
requests for audit, audit-related, tax and other services that have not received general pre-approval at the first Audit Committee
meeting of the year must be submitted to the Audit Committee for specific pre-approval, irrespective of the amount, and cannot
commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings of the Audit
Committee. However, the Audit Committee may delegate pre-approval authority to one or more of its members. The member or members
to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting.
The Audit Committee does not delegate its responsibilities to pre-approve services performed by the independent registered public
accounting firm to management.
AUDIT
COMMITTEE REPORT
Management
is responsible for the Company’s internal controls and the financial reporting process. The independent auditors are responsible
for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally
accepted in the United States and expressing an opinion on the conformity of those audited financial statements in accordance
with accounting principles generally accepted in the United States. The Audit Committee’s responsibility is to monitor and
oversee these processes. The Audit Committee is also directly responsible for the appointment, compensation and oversight of the
Company’s independent registered public accounting firm.
Review
with Management
The
Audit Committee has reviewed the audited financial statements and met and held discussions with management regarding the audited
financial statements. Management has represented to the Audit Committee that the Company’s financial statements were prepared
in accordance with accounting principles generally accepted in the United States.
Review
and Discussion with Independent Registered Public Accounting Firm
The
Audit Committee has discussed with WithumSmith the matters required to be discussed by Statement of Auditing Standards No. 61,
as amended (AICPA,
Professional Standards
, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight
Board in Rule 3200T. SAS No. 61, as amended, requires our independent registered public accounting firm to discuss with our Audit
Committee, among other things, the following:
|
●
|
methods
used to account for significant unusual transactions;
|
|
●
|
the
effect of significant accounting policies in controversial or emerging areas for which
there is a lack of authoritative guidance or consensus;
|
|
●
|
the
process used by management in formulating particularly sensitive accounting estimates
and the basis for the auditors’ conclusions regarding the reasonableness of those
estimates; and
|
|
●
|
disagreements
with management over the application of accounting principles, the basis for management’s
accounting estimates and the disclosures in the consolidated financial statements.
|
The
Audit Committee received and reviewed the written disclosures and the letter from the independent registered public accounting
firm required by the applicable Public Company Accounting Oversight Board rule regarding the independent accountant’s communications
with audit committees concerning independence and has discussed with the auditors the auditors’ independence. The Audit
Committee has also considered the compatibility of non-audit services with the auditors’ independence.
Conclusion
Based
on the Audit Committee’s discussion with management and the independent registered public accounting firm, the Audit Committee’s
review of the audited financial statements, the representations of management and the report of the independent registered public
accounting firm to the Audit Committee, the Audit Committee recommended that the Board include the audited financial statements
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the SEC and will make that
determination for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 upon completion.
The
Audit Committee
Martin
Laidlaw, Chairman
Greg
Bennett
Darren Stainrod
The
material contained in the foregoing Audit Committee Report is not “soliciting material,” is not deemed “filed”
with the SEC, and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended,
or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any
such filing.
PROPOSAL
3: THE APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE COMPANY AND HOUSE HANOVER, LLC, PURSUANT TO WHICH HOUSE HANOVER,
LLC WILL BE APPOINTED AS THE COMPANY’S INVESTMENT ADVISOR.
Background
and Reasons for Change
Since
March 13, 2015, the Company has operated as a business development company (“BDC”) that is externally managed by an
external investment advisor. Princeton Advisory Group, Inc. (“PAG”), an entity owned by Mr. Munish Sood (the Company’s
former chief executive officer, former president, and a former director), previously served as the Company’s external investment
advisor pursuant to an investment advisory agreement, dated as of June 9, 2016, entered into by and between Company and PAG (the
“PAG Investment Advisory Agreement”). As reported in the Company’s Form 8-K filed on September 28, 2017, on
September 25, 2017, the United States of America filed Complaints against Mr. Sood and others captioned
U.S. v. Lamont
Evans, et al.
and
U.S. v. James Gatto, et al.
, in the Southern District of New York and Mr. Sood notified
the Company of his resignation from his role as a director, as the Company’s Chief Executive Officer, and as the Company’s
President, effective immediately. As reported in the Company’s Form 8-K filed on September 28, 2017, on September 27, 2017,
the Board determined that it would be in the best interests of the Company and its stockholders to terminate the PAG Investment
Advisory Agreement. As reported in the Company’s Form 8-K filed on January 2, 2018, on December 27, 2017, the Board sent
a formal Notice of Termination to PAG notifying PAG of its termination as the Company’s investment advisor, effective as
of December 31, 2017 at 11:59 p.m. Eastern Time.
The
PAG Investment Advisory Agreement was last submitted to a vote of stockholders of the Company at the 2016 Annual Meeting of Stockholders
held on June 9, 2016 for the purpose of entering into the PAG Investment Advisory Agreement. At a Special Meeting of the Board
held on June 27, 2017, the Board, including a majority of the independent directors of the Board, voted to renew the PAG Investment
Advisory Agreement for another one year term, pursuant to the requirements of Section 9(c) of the PAG Investment Advisory Agreement
and Section 15(c) of the 1940 Act. During the fiscal year ended December 31, 2017, the Company paid $507,552 to PAG under
the PAG Investment Advisory Agreement, $453,133 of which was earned during the fiscal year ended December 31, 2017 and $54,419
of which was earned during the fiscal year ended December 31, 2016.
In
order to have time to develop a transition plan from PAG to a new investment advisor, on December 27, 2017, the Board approved
(specifically in accordance with Rule 15a-4(b)(1)(ii) of the 1940 Act) and authorized the Company to enter into an interim investment
advisory agreement between the Company and House Hanover, LLC, a Delaware limited liability company (“House Hanover”)
(the “Interim Investment Advisory Agreement”), in accordance with Rule 15a-4 of the 1940 Act. The effective date of
the Interim Investment Advisory Agreement was January 1, 2018. As of April 1, 2018, the Company has not made any payments to House
Hanover under the Interim Advisory Agreement. The amount payable to House Hanover through April 1, 2018 under the Interim Investment
Advisory Agreement is approximately $120,000.
In
accordance with Rule 15a-4(a)(2) of the 1940 Act, the Interim Investment Advisory Agreement was not submitted to a vote of stockholders
of the Company and the duration of the Interim Investment Advisory Agreement is not greater than 150 days following the date on
which the PAG Investment Advisory Agreement was terminated (the Interim Investment Advisory Agreement will terminate on May 30,
2018, the date of the 2018 Annual Meeting).
Subject
to approval by the Company’s stockholders, on April 5, 2018, the Board, including a majority of the independent directors,
reviewed and approved the new (not interim) investment advisory agreement (the “New Investment Advisory Agreement”)
with House Hanover, which is controlled by Mr. Mark DiSalvo, our Interim President and Interim Chief Executive Officer. For the
avoidance of doubt, Mr. DiSalvo did not vote on the approval of the New Investment Advisory Agreement. The terms and conditions
of the New Investment Advisory Agreement are substantially similar to the PAG Investment Advisory Agreement and the Interim Investment
Advisory Agreement (except for (i) the limitations on the duration of the Interim Investment Advisory Agreement contained in Rule
15a-4 of the 1940 Act as set forth above and (ii) the stockholder approval requirements of the New Investment Advisory Agreement).
The Board believes the approval of the New Investment Advisory Agreement will provide continuity of advisory services to the Company
and that the New Investment Advisory Agreement will be in the best interests of the Company and its stockholders. The Board considered
the reimbursement of certain costs and expenses of House Hanover as set forth in the summary below when approving the New Investment
Advisory Agreement.
The
New Investment Advisory Agreement is attached hereto as Exhibit A, and the summary description of the New Investment Advisory
Agreement contained herein is qualified in its entirety by the complete text of the New Investment Advisory Agreement, as reflected
in Exhibit A.
The
address of House Hanover is 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845.
Material
Changes in Investment Advisory Agreement
The
terms and conditions of the New Investment Advisory Agreement and the PAG Investment Advisory Agreement are substantially similar,
including all management fees payable by the Company. Neither the New Investment Advisory Agreement nor the PAG Investment Advisory
Agreement, contain an incentive fee component, as would be typical of many external investment advisory agreements.
For
the fiscal year ended December 31, 2017, the aggregate fees payable to PAG under the PAG Investment Advisory Agreement was $453,133.
If the proposed fee under the New Investment Advisory Agreement would have been in effect, the aggregate fees payable to House
Hanover would have been the same. There would have been no change in the fees payable under the investment advisory agreements.
The
terms and conditions of the New Investment Advisory Agreement and the Interim Investment Advisory Agreement are substantially
similar, except that (i) the Interim Investment Advisory Agreement did not require approval in accordance with Rule 15a-4 of the
1940 Act and (ii) the duration of the New Investment Advisory Agreement is one year from the Effective Date and thereafter shall
continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually
by (a) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company and (b) the vote
of a majority of the members of the Board who are not parties to this New Investment Advisory Agreement or “interested persons”
(as such term is defined in Section 2(a)(19) of the 1940 Act) of any such party, in accordance with the requirements of the 1940
Act, as opposed to a 150 day limitation on the term, as set forth in the Interim Investment Advisory Agreement, and discussed
elsewhere in this proxy statement.
Summary
of New Investment Advisory Agreement
Advisory
Services
House
Hanover is registered as an investment adviser under the 1940 Act and will serve as the Company’s investment advisor pursuant
to the New Investment Advisory Agreement in accordance with the 1940 Act. House Hanover is owned by and an affiliate of Mr. Mark
DiSalvo, the Company’s Interim President, Interim Chief Executive Officer, and a director of the Company.
Subject
to supervision by the Company’s Board, House Hanover will oversee the Company’s day-to-day operations and provide
the Company with investment advisory services. Under the terms of the New Investment Advisory Agreement, House Hanover, will among
other things: (i) determine the composition and allocation of the portfolio of the Company, the nature and timing of the changes
therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the investments made
by the Company; (iii) execute, close, service and monitor the Company’s investments; (iv) determine the securities and other
assets that the Company shall purchase, retain, or sell; (v) perform due diligence on prospective portfolio companies; (vi) provide
the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably
require for the investment of its funds; and (vii) if directed by the Board, assist in the execution and closing of the sale of
the Company’s assets or a sale of the equity of the Company in one or more transactions. House Hanover’s services
under the New Investment Advisory Agreement may not be exclusive and it is free to furnish similar services to other entities
so long as its services to the Company are not impaired. At the request of the Company, House Hanover, upon any transition
of the Company’s investment advisory relationship to another investment advisor or upon any internalization, shall provide
reasonable transition assistance to the Company and any successor investment advisor.
Advisory
Fee
Pursuant
to the New Investment Advisory Agreement, the Company will pay House Hanover a base management fee for investment advisory and
management services. The cost of the base management fee will ultimately be borne by the Company’s stockholders. The New
Investment Advisory Agreement does not contain an incentive fee component.
The
base management fee is calculated at an annual rate of 1.00% of the Company’s gross assets, including assets purchased with
borrowed funds or other forms of leverage and excluding cash and cash equivalents net of all indebtedness of the Company for borrowed
money and other liabilities of the Company. The base management fee is payable quarterly in arrears, and determined as set forth
in the preceding sentence at the end of the two most recently completed calendar quarters. The Board may retroactively adjust
the valuation of the Company’s assets and the resulting calculation of the base management fee in the event the Company
or any of its assets are sold or transferred to an independent third party or the Company or House Hanover receives an audit report
or other independent third party valuation of the Company. To the extent that any such adjustment increases or decreases the base
management fee of any prior period, the Company will be obligated to pay the amount of increase to House Hanover or House Hanover
will be obligated to refund the decreased amount, as applicable.
Payment
of Expenses
House
Hanover will bear all compensation expense (including health insurance, pension benefits, payroll taxes and other compensation
related matters) of its employees and bear the costs of any salaries or directors’ fees of any officers or directors of
the Company who are affiliated persons (as defined in the 1940 Act) of House Hanover. However, House Hanover, subject to approval
by the Board of the Company, will be entitled to reimbursement for the portion of any compensation expense and the costs of any
salaries of any such employees to the extent attributable to services performed by such employees for the Company. During the
term of the New Investment Advisory Agreement, House Hanover will also bear all of its costs and expenses for office space rental,
office equipment, utilities and other non-compensation related overhead allocable to performance of its obligations under the
New Investment Advisory Agreement.
Except
as provided in the preceding paragraph the Company will reimburse House Hanover all direct and indirect costs and expenses incurred
by it during the term of the New Investment Advisory Agreement for: (i) due diligence of potential investments of the Company,
(ii) monitoring performance of the Company’s investments, (iii) serving as officers of the Company, (iv) serving as directors
and officers of portfolio companies of the Company, (v) providing managerial assistance to portfolio companies of the Company,
and (vi) enforcing the Company’s rights in respect of its investments and disposing of its investments; provided, however,
that, any third party expenses incurred by House Hanover in excess of $50,000 in the aggregate in any calendar quarter will require
advance approval by the Board of the Company.
In
addition to the foregoing, the Company will also be responsible for the payment of all of the Company’s other expenses,
including the payment of the following fees and expenses:
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organizational
and offering expenses;
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expenses
incurred in valuing the Company’s assets and computing its net asset value per
share (including the cost and expenses of any independent valuation firm);
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subject
to the guidelines approved by the Board, expenses incurred by House Hanover that are
payable to third parties, including agents, consultants or other advisors, in monitoring
financial and legal affairs for the Company and in monitoring the Company’s investments
and performing due diligence on the Company’s prospective portfolio companies or
otherwise related to, or associated with, evaluating and making investments;
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interest
payable on debt, if any, incurred to finance the Company’s investments and expenses
related to unsuccessful portfolio acquisition efforts;
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offerings
of the Company’s common stock and other securities;
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transfer
agent and custody fees and expenses;
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U.S.
federal and state registration fees of the Company (but not House Hanover);
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all
costs of registration and listing the Company’s shares on any securities exchange;
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U.S.
federal, state and local taxes;
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independent
directors’ fees and expenses;
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costs
of preparing and filing reports or other documents required of the Company (but not House
Hanover) by the SEC or other regulators;
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costs
of any reports, proxy statements or other notices to stockholders, including printing
costs;
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the
costs associated with individual or group stockholders;
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the
Company’s allocable portion of the fidelity bond, directors and officers/errors
and omissions liability insurance, and any other insurance premiums;
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direct
costs and expenses of administration and operation of the Company, including printing,
mailing, long distance telephone, copying, secretarial and other staff, independent auditors
and outside legal costs;
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and
all other non-investment advisory expenses incurred by the Company in connection with
administering the Company’s business.
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Duration
and Termination
Unless
terminated earlier as described below, the New Investment Advisory Agreement will continue in effect for a period of one (1) year
from its effective date. It will remain in effect from year to year thereafter if approved annually by the Company’s Board
or by the affirmative vote of the holders of a majority of the Company’s outstanding voting securities, and, in either case,
if also approved by a majority of Company’s directors who are neither parties to the New Investment Advisory Agreement nor
“interested persons” (as defined under the 1940 Act) of any such party. The New Investment Advisory Agreement may
be terminated at any time, without the payment of any penalty, (i) upon written notice, effective on the date set forth in such
notice, by the vote of a majority of the outstanding voting securities of the Company or by the vote of the Company’s directors,
or (ii) upon 60 days’ written notice, by House Hanover. The New Investment Advisory Agreement automatically terminates in
the event of its “assignment,” as defined in the 1940 Act.
Indemnification
The
New Investment Advisory Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of their
duties, or by reason of the material breach or reckless disregard of their duties and obligations under the New Investment Advisory
Agreement, House Hanover and its officers, managers, employees and members are entitled to indemnification from the Company for
any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement)
arising from the rendering of House Hanover’s services under the New Investment Advisory Agreement or otherwise as the Company’s
investment advisor. The amounts payable for indemnification will be calculated net of payments recovered by the indemnified party
under any insurance policy with respect to such losses.
At
all times during the term of the New Investment Advisory Agreement and for one year thereafter, House Hanover is obligated to
maintain directors and officers/errors and omission liability insurance in an amount and with a provider reasonably acceptable
to the Board of the Company.
Factors
Considered by the Board
On
April 5, 2018, the Board, including a majority of independent directors, met and discussed the New Investment Advisory Agreement.
In evaluating the New Investment Advisory Agreement, the Board reviewed certain materials furnished separately by the Company,
which included market information regarding the terms of other investment advisory agreements with other publicly traded business
development companies.
In
approving the New Investment Advisory Agreement, the Board considered a number of factors. Among other things, the Board considered
the following matters and reached the following conclusions:
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Nature,
Extent and Quality of Investment Advisory Services
. The Board, including the independent
directors, considered the nature, extent and quality of the investment advisory services
to be provided by House Hanover to the Company. The Board understands that the services
to be performed and the personnel performing such services will be effectively the same
as under the Interim Investment Advisory Agreement. The Board reviewed the expected resources
of House Hanover and the composition, education and experience of its investment professionals.
They concluded that the nature, quality and extent of the services to be provided to
the Company by House Hanover are appropriate and that the Company is likely to benefit
from the provision of these services.
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Investment
Performance
. The Board reviewed House Hanover’s historical investment performance
and compared House Hanover’s prior performance with the performance of comparable
investment companies. The Board concluded that, although past performance is not necessarily
indicative of future results, the favorable performance record of House Hanover was an
important factor in their evaluation of the quality of services expected to be provided
by House Hanover under the New Investment Advisory Agreement.
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Costs
of the Services Provided to the Company and the Profits Realized by House Hanover
.
The Board considered comparative data based on publicly available information with respect
to services rendered and the advisory fees (including management fees and incentive fees)
paid to investment advisors of other business development companies with similar investment
objectives. The comparative data outlined management fees and incentive fees paid to
such investment advisors, including the calculation of such management fees and incentive
fees, in relation to such other companies’ total assets and the services rendered
by such investment advisors. In light of this comparative data, the Board considered
the Company’s operating expenses and expense ratio compared to such other companies.
Based upon its review, the Board concluded that, although the fee structures vary among
business development companies, the management fees to be paid under the New Investment
Advisory Agreement was at the low end of the range and the fact that the Company would
not have to pay an incentive fee was a favorable factor when compared to fees payable
under agreements of comparable business development companies described in the comparative
data then available.
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Profitability
of Investment Adviser
. The Board reviewed information on the expected profitability
of House Hanover in serving as the Company’s investment adviser. It concluded that
the expected profitability of House Hanover with respect to the Company in relation to
the services rendered was reasonable and that the financial condition of House Hanover
was sound. It also concluded that the management fees and other compensation payable
by the Company to House Hanover was reasonable in relation to the nature, extent and
quality of the services provided, taking into account the fees charged by other advisors
for managing comparable business development companies.
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On
the basis of the information provided to it and its evaluation thereof, the Board, including a majority of the independent directors,
voted to approve the New Investment Advisory Agreement, subject to approval by the Company’s stockholders. For the avoidance
of doubt, Mr. DiSalvo did not vote on the approval of the New Investment Advisory Agreement.
Conclusion
and Recommendation; Required Vote
The
Board believes that the approval of the New Investment Advisory Agreement is in the best interests of the Company and its stockholders.
The
affirmative vote of “a majority of the outstanding shares of common stock” entitled to vote at the Annual Meeting
is required for the approval of this proposal. Because we have elected to be regulated as a business development company under
the 1940 Act, the definition of “a majority of the outstanding shares of common stock” as defined under the 1940 Act
must be used for purposes of this proposal. The 1940 Act defines “a majority of the outstanding shares” as (i) 67%
or more of the voting securities present at the Annual Meeting if the holders of more than 50% of the outstanding voting securities
of the Company are present or represented by proxy, or (ii) more than 50% of the Company’s outstanding shares of common
stock as of the Record Date, whichever is the less. Abstentions and broker non-votes will have the effect of a vote against this
proposal.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT.
PROPOSAL
4: ADJOURNMENT OF THE ANNUAL MEETING
The
Company’s stockholders may be asked to consider and act upon one or more adjournments of the Annual Meeting, if necessary
or appropriate, to solicit additional proxies in favor of any or all of the other proposals set forth in this proxy statement.
If
a quorum is not present at the Annual Meeting, the Company’s stockholders may be asked to vote on the proposal to adjourn
the Annual Meeting to solicit additional proxies. If a quorum is present at the Annual Meeting, but there are not sufficient votes
at the time of the Annual Meeting to approve one or more of the proposals, the Company’s stockholders may also be asked
to vote on the proposal to approve the adjournment of the Annual Meeting to permit further solicitation of proxies in favor of
the other proposals. However, a stockholder vote may be taken on one of the proposals in this proxy statement prior to any such
adjournment if there are sufficient votes for approval on such proposal.
If
the adjournment proposal is submitted for a vote at the Annual Meeting, and if the Company’s stockholders vote to approve
the adjournment proposal, the meeting will be adjourned for not more than 120 days following the original record date to enable
the Board to solicit additional proxies in favor of one or more proposals. If the adjournment proposal is approved, and the Annual
Meeting is adjourned, the Board will use the additional time to solicit additional proxies in favor of any of the proposals to
be presented at the Annual Meeting, including the solicitation of proxies from stockholders that have previously voted against
the relevant proposal.
The
Board believes that, if the number of shares of the Company’s common stock voting in favor of any of the proposals presented
at the Annual Meeting is insufficient to approve a proposal, it is in the best interests of the Company’s stockholders to
enable the Board, for a limited period of time, to continue to seek to obtain a sufficient number of additional votes in favor
of the proposal. Any signed proxies received by the Company in which no voting instructions are provided on such matter will be
voted in favor of an adjournment in these circumstances. The time and place of the adjourned meeting will be announced at the
time the adjournment is taken. Any adjournment of the Annual Meeting for the purpose of soliciting additional proxies will allow
the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the Annual
Meeting adjourned or postponed.
THE
BOARD OF DIRECTORS RECOMMENDS THE STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT OF THE ANNUAL MEETING, IF NECESSARY OR APPROPRIATE,
TO SOLICIT ADDITIONAL PROXIES.
OTHER
BUSINESS
The
Board knows of no other business that may properly be presented for action at the Annual Meeting. If any matters do come before
the Annual Meeting on which action can properly be taken, the persons named as proxies will vote in their discretion on any such
matter. The submission of a proposal does not guarantee its inclusion in the Company’s proxy statement or presentation at
the Annual Meeting unless certain securities law requirements are met.
SUBMISSION
OF STOCKHOLDER PROPOSALS
Pursuant
to Rule 14a-8 under the Exchange Act, some stockholder proposals may be eligible for inclusion in the Company’s 2018 proxy
statement. Any stockholder proposal under Rule 14a-8 must be submitted, along with proof of ownership of the Company’s stock
in accordance with Rule 14a-8(b)(2), to the Company’s principal executive offices in care of the Company’s Secretary
by letter to 800 Turnpike Street, Suite 300, North Andover, Massachusetts 01845. Failure to deliver a proposal in accordance with
this procedure may result in the proposal not being deemed timely received. The Company must have received all submissions no
later than the close of business (5:00 p.m. Eastern Time) on Friday, March 23, 2018, which the Company has determined to be a
reasonable time before it expects to begin to print and send its proxy materials. The Company encourages any stockholder interested
in submitting a proposal to contact the Company’s Secretary in advance of this deadline to discuss the proposal, and stockholders
may find it helpful to consult knowledgeable counsel with regard to the detailed requirements of applicable securities laws. Submitting
a stockholder proposal does not guarantee that we will include it in the Company’s proxy statement. The Board of Directors
reviews all stockholder proposals and will take appropriate action on such proposals.
In
addition, under the Company’s Bylaws, any stockholder who intends to nominate a candidate for election to the Board or to
propose any business at the 2018 Annual Meeting, other than precatory (non-binding) proposals presented under Rule 14a-8, must
have given notice to the Company’s Secretary by no later than the close of business on Friday, March 23, 2018. The notice
must include information specified in the Company’s Bylaws, including information concerning the nominee or proposal, as
the case may be, and information about the stockholder’s ownership of, and agreements related to, the Company’s stock.
The Company will not entertain any proposals or nominations at the 2018 Annual Meeting that do not meet the requirements set forth
in the Company’s Bylaws. Also, if the stockholder does not also comply with the requirements of Rule 14a-4(c)(2) under the
Exchange Act, the Company’s proxies may exercise discretionary voting authority under proxies that the Company’s Board
of Directors solicits to vote in accordance with their best judgment on any such stockholder proposal or nomination. The Bylaws
are available on the SEC’s website attached as an exhibit to the Company’s Form 8-K filed with the SEC on March 19,
2015. To make a submission or to request a copy of the Company’s Bylaws, stockholders should contact the Company’s
Secretary at the address listed above.
No
stockholder proposals or nominations were received by the Company for the Annual Meeting by the March 23, 2018 deadline.
Because
the date of the 2018 Annual Meeting was advanced by more than 30 days from the anniversary date of the Company’s 2017 Annual
Meeting of Stockholders, in accordance with Rule 14a-5(f) under the Exchange Act, the Company, in a Form 8-K filed with the SEC
on March 12, 2018, notified the stockholders of such change and the March 23, 2018 deadline to submit stockholder proposals.
Proxies
solicited by the Company will confer discretionary voting authority with respect to any Stockholder proposals, subject to SEC
rules governing the exercise of this authority.
PRIVACY
PRINCIPLES
We
are committed to maintaining the privacy of our stockholders and to safeguarding their nonpublic personal information. The following
information is provided to help you understand what personal information we collect, how we protect that information and why,
in certain cases, we may share information with select other parties.
Generally,
we do not receive any nonpublic personal information relating to our stockholders, although certain nonpublic personal information
of our stockholders may become available to us. We do not disclose any nonpublic personal information about our stockholders or
former stockholders to anyone, except as permitted by law or as is necessary in order to service stockholder accounts (for example,
to a transfer agent or third-party administrator).
We
restrict access to nonpublic personal information about our stockholders to employees of House Hanover and its affiliates with
a legitimate business need for the information. We intend to maintain physical, electronic and procedural safeguards designed
to protect the nonpublic personal information of our stockholders.
By
Order of the Board
Gregory
J. Cannella
Chief Financial Officer, Secretary and Treasurer
North Andover, Massachusetts
April [25], 2018
EXHIBIT A
New Investment Advisory Agreement
INVESTMENT
ADVISORY AGREEMENT
BETWEEN
PRINCETON
CAPITAL CORPORATION
AND
HOUSE
HANOVER, LLC
THIS
INVESTMENT ADVISORY AGREEMENT (this “
Agreement
”), dated as of May 31, 2018 (the “
Effective Date
”),
is entered into by and between Princeton Capital Corporation, a Maryland corporation (the “
Corporation
”), and
House Hanover, LLC, a Delaware limited liability company (the “
Adviser
”).
WHEREAS,
the Corporation and the Adviser, entered into that certain Interim Investment Advisory Agreement dated as of January 1, 2018 (the
“
Interim Investment Advisory Agreement
”), whereby the Adviser agreed to furnish investment advisory services
to the Corporation on an interim basis in accordance with Rule 15a-4 of the Investment Company Act of 1940, as amended (the “
Investment
Company Act
”);
WHEREAS,
the Interim Investment Advisory Agreement (in accordance with Rule 15a-4(b)(1)(ii) of the Investment Company Act) has a term not
to exceed one hundred fifty days from the effective date of the Interim Investment Advisory Agreement (i.e., the Interim Investment
Advisory Agreement terminates on May 31, 2018);
WHEREAS,
the Adviser has agreed to furnish investment advisory services to the Corporation, which has elected to operate as a business
development company under the Investment Company Act; and
WHEREAS,
this Agreement has been approved in accordance with the provisions of the Investment Company Act, and the Adviser is willing to
furnish such services upon the terms and conditions herein set forth.
NOW,
THEREFORE, in consideration of the mutual premises and covenants herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the parties hereto as follows:
1.
In
General.
During the term of this Agreement, the Adviser agrees, all as more fully set forth herein, to act as investment advisor
to the Corporation with respect to the investment of the Corporation’s assets and to supervise and arrange for the day-to-day
operations of the Corporation and the purchase of assets for and the sale of assets held in the investment portfolio of the Corporation.
2.
Duties
and Obligations of the Adviser with Respect to Investment of Assets of the Corporation.
(a) Subject
to the succeeding provisions of this paragraph and subject to the direction and control of the Board of Directors, during the
term of this Agreement, the Adviser shall act as the investment advisor to the Company and manage the investment and reinvestment
of the assets of the Company. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject
to the provisions of this Agreement, (i) determine the composition of the portfolio of the Corporation, the nature and timing
of the changes therein and the manner of implementing such changes; (ii) identify, evaluate and negotiate the structure of the
investments made by the Corporation; (iii) execute, close, service and monitor the investments that the Corporation makes; (iv)
determine the securities and other assets that the Corporation will purchase, retain or sell; (v) perform due diligence on prospective
portfolio companies; (vi) provide the Corporation with such other investment advisory, research and related services as the Corporation
may, from time to time, reasonably require for the investment of its funds; and (vii) if directed by the Board of Directors, assist
in the execution and closing of the sale of the Corporation’s assets or a sale of the equity of the Corporation in one or
more transactions, however structured, in each case as approved by the Board of Directors. Nothing contained herein shall be construed
to restrict the Corporation’s right to hire its own employees or to contract for administrative services to be performed
by third parties, including but not limited to, the calculation of the net asset value of the Corporation’s shares.
(b) In
the performance of its duties under this Agreement, the Adviser shall at all times conform to, act in accordance with, and act
so that the Corporation is in compliance with, any requirements imposed by (i) the provisions of the Investment Company Act and
the Investment Advisers Act of 1940, as amended (the “
Advisers Act
”), and of any rules or regulations in force
thereunder, subject to the terms of any exemptive order applicable to the Corporation; (ii) any other applicable provision of
law; (iii) the provisions of the Charter and the Bylaws of the Corporation, as such documents are amended from time to time; (iv)
the investment objectives, policies and restrictions applicable to the Corporation as set forth in the Corporation’s proxy
or information statement as it may be amended from time to time by the Board of Directors; and (v) any policies and determinations
of the Board of Directors that are provided in writing to the Adviser.
(c) The
Adviser will provide qualified personnel to fulfill its duties hereunder and, except as set forth in the following sentence, will
bear all costs and expenses incurred in connection with its investment advisory duties hereunder. Except as provided in Section
5 hereof, the Corporation shall reimburse the Adviser for all direct and indirect costs and expenses incurred by the Adviser during
the term of this Agreement for (i) due diligence of potential investments of the Corporation, (ii) monitoring performance of the
Corporation’s investments, (iii) serving as officers of the Corporation, (iv) serving as directors and officers of portfolio
companies of the Corporation, (v) providing managerial assistance to portfolio companies of the Corporation, and (vi) enforcing
the Corporation’s rights in respect of its investments and disposing of its investments; provided, however, that, any third
party expenses incurred by the Adviser in excess of $50,000 in the aggregate in any calendar quarter require advance approval
by the Board of Directors. All allocations of costs and expenses made pursuant to this paragraph (c) shall be made pursuant to
allocation guidelines approved from time to time by the Board of Directors. The Corporation shall also be responsible for the
payment of all the Corporation’s other expenses, including payment of the fees payable to the Adviser under Section 6 hereof;
organizational and offering expenses; expenses incurred in valuing the Corporation’s assets and computing its net asset
value per share (including the cost and expenses of any independent valuation firm); subject to the limitations in the proviso
in the immediately preceding sentence, expenses incurred by the Adviser that are payable to third parties, including agents, consultants
or other advisors, in monitoring financial and legal affairs for the Corporation and in monitoring the Corporation’s investments
and performing due diligence on the Corporation’s prospective portfolio companies or otherwise related to, or associated
with, evaluating and making investments; interest payable on debt, if any, incurred to finance the Corporation’s investments
and expenses related to unsuccessful portfolio acquisition efforts; offerings of the Corporation’s common stock and other
securities; administration fees; transfer agent and custody fees and expenses; federal and state registration fees of the Corporation
(but not the Adviser); all costs of registration and listing the Corporation’s shares on any securities exchange; federal,
state and local taxes; independent directors’ fees and expenses; costs of preparing and filing reports or other documents
required of the Corporation (but not the Adviser) by the Securities and Exchange Commission (“
SEC
”) or other
regulators; costs of any reports, proxy statements or other notices to stockholders, including printing costs; the costs associated
with individual or group stockholders; the Corporation’s allocable portion of the fidelity bond, directors and officers/errors
and omissions liability insurance, and any other insurance premiums; direct costs and expenses of administration and operation
of the Corporation, including printing, mailing, long distance telephone, copying, secretarial and other staff, independent auditors
and outside legal costs; and all other non-investment advisory expenses incurred by the Corporation in connection with the administering
the Corporation’s business.
(d) The
Adviser shall, at all times during the term of this Agreement and for one year thereafter, maintain directors and officers/errors
and omissions liability insurance in an amount and with a provider reasonably acceptable to the Board of Directors.
(e) The
Adviser will place orders either directly with the issuer or with any broker or dealer. Subject to the other provisions of this
paragraph, in placing orders with brokers and dealers, the Adviser will attempt to obtain the best price and the most favorable
execution of its orders. In placing orders, the Adviser will consider the experience and skill of the firm’s securities
traders as well as the firm’s financial responsibility and administrative efficiency. Consistent with this obligation, the
Adviser may select brokers on the basis of the research, statistical and pricing services they provide to the Corporation and
other clients of the Adviser. Information and research received from such brokers will be in addition to, and not in lieu of,
the services required to be performed by the Adviser hereunder. A commission paid to such brokers may be higher than that which
another qualified broker would have charged for effecting the same transaction, provided that the Adviser determines in good faith
that such commission is reasonable in terms either of the transaction or the overall responsibility of the Adviser to the Corporation
and its other clients and that the total commissions paid by the Corporation will be reasonable in relation to the benefits to
the Corporation over the long term, subject to review by the Board of Directors of the Corporation from time to time with respect
to the extent and continuation of such practice to determine whether the Corporation benefits, directly or indirectly, from such
practice.
(f) The
Adviser may not assign or delegate, whether to a sub-adviser or otherwise, and whether by operation of law, merger or otherwise,
all or any portion of its obligations under this Agreement without the prior written consent of the Board of Directors, which
consent the Board of Directors may give, withhold, delay or condition for any reason or no reason in its sole discretion. Any
purported assignment or delegation in violation of the immediately preceding sentence shall be void and of no force or effect.
(g) At
the request of the Corporation, the Adviser, upon any transition of the Corporation’s investment advisory relationship to
another investment adviser or upon any internalization, shall provide reasonable transition assistance to the Corporation and
any successor investment adviser.
3.
Services
Not Exclusive.
Nothing in this Agreement shall prevent the Adviser or any officer, employee or other affiliate thereof from
acting as investment advisor for any other person, firm or corporation, or from engaging in any other lawful activity, and shall
not in any way limit or restrict the Adviser or any of its officers, employees or agents from buying, selling or trading any securities
for its or their own accounts or for the accounts of others for whom it or they may be acting;
provided
,
however
,
that the Adviser will not undertake, and will cause its employees not to undertake, activities which, in its reasonable judgment,
will adversely affect the performance of the Adviser’s obligations under this Agreement.
4.
No
Agency Cross Transactions.
From time to time, the Adviser or brokers or dealers affiliated with it may find themselves in
a position to buy for certain of their brokerage clients (each an “
Account
”) securities which the Adviser’s
investment advisory clients wish to sell, and to sell for certain of their brokerage clients securities which advisory clients
wish to buy. Where one of the parties is an advisory client, the Adviser or the affiliated broker or dealer cannot participate
in this type of transaction (known as a cross transaction) on behalf of an advisory client and retain commissions from one or
both parties to the transaction without the advisory client’s consent. This is because in a situation where the Adviser
is making the investment decision (as opposed to a brokerage client who makes his own investment decisions), and the Adviser or
an affiliate is receiving commissions from both sides of the transaction, there is a potential conflicting division of loyalties
and responsibilities on the Adviser’s part regarding the advisory client. The SEC has adopted a rule under the Advisers
Act which permits the Adviser or its affiliates to participate on behalf of an Account in agency cross transactions if the advisory
client has given written consent in advance. Neither the Adviser nor its affiliates may participate in agency cross transactions
involving an Account without the prior written consent of the Board of Directors, which consent the Board of Directors may give,
withhold, delay or condition for any reason or no reason in its sole discretion.
5.
Expenses.
During
the term of this Agreement, the Adviser will bear all compensation expense (including health insurance, pension benefits, payroll
taxes and other compensation related matters) of its employees and shall bear the costs of any salaries or directors’ fees
of any officers or directors of the Corporation who are affiliated persons (as defined in the Investment Company Act) of the Adviser;
provided, however, that the Adviser, subject to approval by the Board of Directors, shall be entitled to reimbursement for the
portion of any compensation expense and the costs of any salaries of any such employees to the extent attributable to services
performed by such employees for the Corporation. During the term of this Agreement, the Adviser will also bear all costs and expenses
incurred by the Adviser for office space rental, office equipment, utilities and other non-compensation related overhead allocable
to performance of its obligations under this Agreement.
6.
Compensation
of the Adviser.
During the term of this Agreement, the Adviser, for its services to the Corporation, will be entitled to receive
a management fee (the “
Base Management Fee
”) from the Corporation. The Base Management Fee will be calculated
at an annual rate of 1.00% of the Corporation’s gross assets, including assets purchased with borrowed funds or other forms
of leverage and excluding cash and cash equivalents, net of all indebtedness of the Corporation for borrowed money and other liabilities
of the Corporation. The Base Management Fee is payable quarterly in arrears on a calendar quarter basis. The Base Management Fee
will be calculated based on the average value of the Corporation’s net assets, determined as set forth in the second sentence
of this Section 6, at the end of the two most recently completed calendar quarters prior to the quarter for which such fees are
being calculated. In the event that (a) the Corporation or any of its assets are sold or transferred to an independent third party
or (b) the Corporation or the Adviser receives an audit report or other independent third party valuation of any asset of the
Corporation, the Board of Directors may adjust the value of the Corporation’s assets, and the resulting calculations of
Base Management Fee, on a retroactive basis to account for the value of such asset in such sale, audit report or valuation. To
the extent that any such adjustment increases the Base Management Fee payable with respect to any prior period, the Corporation
shall promptly pay the amount of such increase to the Adviser. To the extent than any such adjustment decreases the Base Management
Fee payable with respect to any prior period, the Adviser shall promptly refund the amount of such decrease to the Corporation;
provided, that if the Adviser has not refunded any such amount prior to the date that the next Base Management Fee payment is
due, then the Corporation may offset the amount of such refund against the Base Management Fee payment then due. Base Management
Fees for any partial month or quarter will be appropriately pro-rated.
7.
Indemnification.
The Adviser (and its officers, managers, employees and members) shall not be liable to the Corporation for any action taken
or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this
Agreement or otherwise as an investment adviser of the Corporation (except to the extent specified in Section 36(b) of the
Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by
judicial proceedings) with respect to the receipt of compensation for services), and the Corporation shall indemnify, defend
and protect the Adviser (and its officers, managers, employees and members) (collectively, the “
Indemnified
Parties
”) and hold them harmless from and against all damages, liabilities, costs and expenses (including
reasonable attorneys’ fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by
reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit
by or in the right of the Corporation or its security holders) arising out of or otherwise based upon the performance of any
of the Adviser’s duties or obligations under this Agreement or otherwise as an investment adviser of the Corporation.
(For clarity, in the event that there is a need to access the Adviser’s “E&O” liability insurance in
the normal course of Adviser’s duties under this Agreement, the Corporation shall indemnify the Indemnified Parties for
the cost of the Adviser’s deductible under Adviser’s liability insurance policy to the extent permitted under
this Section 7). Notwithstanding the preceding sentence of this Section 7 to the contrary, nothing contained herein
shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified
Parties to indemnification in respect of, any liability to the Corporation or its security holders to which the Indemnified
Parties would otherwise be subject by reason of willful misfeasance, bad faith or negligence in the performance of the
Adviser’s duties, or by reason of the material breach or reckless disregard of the Adviser’s duties and
obligations under this Agreement, and nothing contained herein shall constitute a waiver of any rights which the Corporation
may have which may not be waived under applicable law. In calculating amounts payable to an Indemnified Party hereunder, the
amount of any indemnified losses shall be computed net of any payments recovered by the Indemnified Party under any insurance
policy with respect to such losses. If the amount recovered by an Indemnified Party under any insurance policy is received
after payment by the Corporation to an Indemnified Party of any amount required to be paid by the Corporation under this
Section 7, the Indemnified Party shall promptly repay to Corporation the amount of such insurance recovery.
8.
Representations,
Warranties and Covenants of Adviser.
The Adviser represents, warrants and covenants to the Corporation as follows:
(a) The
Adviser is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware
and is registered to conduct business in the Commonwealth of Massachusetts. The Adviser has all necessary power and authority
to enter into this Agreement and to perform its obligations under this Agreement. The execution and delivery by the Adviser of
this Agreement and the performance by the Adviser of its obligations under this Agreement have been duly authorized by all requisite
action on the part of the Adviser. This Agreement has been duly executed and delivered by the Adviser, and this Agreement constitutes
a legal, valid and binding obligation of the Adviser, enforceable against the Adviser in accordance with its terms.
(b) The
Adviser is duly registered as an investment adviser under the Advisers Act. The Adviser will at all times have in effect all registrations,
licenses, bonds and approvals necessary for it to perform all of its obligations under this Agreement.
(c) The
Adviser shall at all times comply in all respects with all applicable federal and state laws governing its operations, including,
without limitation, the Investment Company Act and the Advisers Act.
(d) There
has been no event, fact or circumstance that would require disclosure by or regarding the Adviser or any of its advisory affiliates
(as defined in Form ADV) in response to Item 11 of Part 1A of Form ADV.
(e) Except
as the Adviser has disclosed to the Corporation in writing prior to the date of this Agreement, (i) there are no actions, suits,
claims, investigations or other legal proceedings pending or threatened by or against the Adviser or any of its affiliates, members
or executive officers, and (ii) there is no outstanding order, writ, judgment, injunction, decree, stipulation, determination
or award entered by or with any governmental authority or arbitrator against the Adviser or any of its affiliates, members or
executive officers.
(f) The
Adviser will promptly (and in any event within three business days) advise the Board of Directors in writing of any event, fact
or circumstance that results in any of the foregoing representations, warranties or covenants being or becoming incorrect in any
respect as of the date of this Agreement or as of any time during the term of this Agreement.
9.
Effectiveness;
Duration and Termination.
(a) A
condition precedent to the effectiveness of this Agreement is the approval of this Agreement by the vote of a majority of the
outstanding voting securities of the Corporation entitled to be cast by the holders thereof, and this Agreement shall not become
effective until such approval is obtained.
(b) This
Agreement may be terminated at any time, without the payment of any penalty, (i) upon written notice, effective on the date set
forth in such notice, by the vote of a majority of the outstanding voting securities of the Corporation or by the vote of the
Corporation’s Directors, or (ii) upon 60 days’ written notice, by the Adviser. From and after the Effective Date,
the provisions of Section 7 of this Agreement shall remain in full force and effect, and the Adviser and the other Indemnified
Parties shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement. Further, notwithstanding
the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to amounts owed under Section 6 through
the date of termination or expiration, if any.
(c) Unless
earlier terminated in accordance with its terms, this Agreement shall commence on the Effective Date and continue in effect for
one year from the Effective Date and thereafter shall continue automatically for successive annual periods, provided that such
continuance is specifically approved at least annually by (A) the vote of the Board of Directors, or by the vote of a majority
of the outstanding voting securities of the Corporation and (B) the vote of a majority of the members of the Board of Directors
who are not parties to this Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the
Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act.
(d) This
Agreement will automatically terminate in the event of its “assignment” (as such term is defined for purposes of Section
15(a)(4) of the Investment Company Act).
10.
Notices.
Any notice under this Agreement shall be in writing to the other party at such address as the other party may designate
from time to time for the receipt of such notice and shall be deemed to be received on the earlier of the date actually received,
the second business day after sending the same (charges prepaid) if such notice is sent via reputable overnight delivery service
or on the fourth day after the postmark if such notice is mailed first class postage prepaid.
11.
Amendment
of this Agreement.
This Agreement may only be amended by mutual consent, but the consent of the Corporation must be obtained
in conformity with the requirements of the Investment Company Act. No waiver by any party of any of the provisions hereof shall
be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or
be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether
of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising,
any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege.
12.
Entire
Agreement.
This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings
and arrangements with respect to the subject matter hereof.
13.
Governing
Law; Consent to Jurisdiction; Jury Trial Waiver.
(a) This
Agreement and all claims arising hereunder or relating hereto shall be governed by, and construed in accordance with, the laws
of the State of Delaware, without giving effect to any conflict of laws principles that would result in the application of the
laws of any other jurisdiction, and in accordance with the applicable provisions of the Investment Company Act. In such case,
to the extent the applicable laws of the State of Delaware, or any of the provisions herein, conflict with the provisions of the
Investment Company Act, the latter shall control.
(b) Each
of the parties to this Agreement consents to submit to the exclusive personal jurisdiction of the Delaware Chancery Court, or
if such court does not have proper jurisdiction, any other state or federal court sitting in the State of Delaware in connection
with any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of any such action
or proceeding may be heard and determined in any such court. Each of the parties to this Agreement agrees not to assert in any
action or proceeding arising out of or relating to this Agreement that venue in Delaware is improper, and waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and waives and bond, surety or other security that
might be required of any other party with respect thereto.
(c) EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS AGREEMENT, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE
BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
14.
Miscellaneous.
(a) The
captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding on, and shall inure to the benefit of the parties hereto and their respective successors.
(b) This
Agreement has been freely and fairly negotiated between the parties hereto. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise
favoring or disfavoring any party because of the authorship of any provision of this Agreement. Unless the context requires otherwise,
any agreements, documents, instruments or laws defined or referred to in this Agreement will be deemed to mean or refer to such
agreements, documents, instruments or laws as from time to time amended, modified or supplemented, including (i) in the case of
agreements, documents or instruments, by consent and (ii) in the case of laws, by succession of comparable successor statutes.
All references in this Agreement to any particular law will be deemed to refer also to any rules and regulations promulgated under
that law. The words “include,” “includes” and “including” will be deemed to be followed by
“without limitation.” The word “or” is used in the inclusive sense of “and/or” unless the
context requires otherwise. References to a person or entity are also to their permitted successors and assigns. Pronouns in masculine,
feminine and neuter genders will be construed to include any other gender, and words in the singular form will be construed to
include the plural and vice versa, unless the context requires otherwise. When a reference in this Agreement is made to an Article
or Section, such reference is to an Article or Section of this Agreement unless otherwise indicated. The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly so limited.
(c) Subject
to Section 2(f) hereof, all of the terms, agreements, covenants, representations, warranties and conditions of this Agreement
are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors and permitted
assigns.
15.
Counterparts.
This Agreement may be executed in counterparts by the parties hereto, each of which shall constitute an original counterpart,
and all of which, together, shall constitute one Agreement. The exchange of copies of this Agreement and of executed signature
pages by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) or by a combination
of such means, will constitute effective execution and delivery of this Agreement as to the parties hereto and may be used in
lieu of an original Agreement for all purposes. Signatures of the parties transmitted by facsimile or by .pdf shall be deemed
to be their original signatures for all purposes.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Investment Advisory Agreement to be executed by their duly authorized officers,
all as of the day and the year first above written.
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PRINCETON
CAPITAL CORPORATION
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By:
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Name: Greg Cannella
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Title:
Chief Financial Officer
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HOUSE
HANOVER, LLC
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By:
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Name: Mark
S. DiSalvo
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Title:
President
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EXHIBIT B
Proxy Card
B-3
Grafico Azioni Princeton Capital (PK) (USOTC:PIAC)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Princeton Capital (PK) (USOTC:PIAC)
Storico
Da Giu 2023 a Giu 2024