Blackhawk Capital Group BDC, Inc. Announces Signing of Agreements

20 Jan, 2009, 17:05 ET from Blackhawk Capital Group BDC, Inc.

NEW YORK, Jan. 20 /PRNewswire-FirstCall/ -- Blackhawk Capital Group BDC, Inc., ("Blackhawk") (OTC Bulletin Board: BHCG.OB), a Delaware corporation registered as a business development company under the Investment Company Act of 1940, as amended ("Investment Company Act") announced that on January 15, 2009 it entered into a Subscription Agreement and Purchaser Questionnaire ("Agreement") with EquitySmith, Inc. ("ESI") pursuant to which ESI agreed to purchase 600,000 shares ("Shares") of common stock, $0.00001 par value per share ("Common Stock") at a purchase price of $5.00 per share, for an aggregate purchase price of $3,000,000. Blackhawk's offering ("Offering") of the Shares to ESI was pursuant to a Rule 506 private placement offering being conducted by Blackhawk under Regulation D of the Securities Act of 1933, as amended ("Securities Act"). The Offering is being made pursuant to Rule 506 and only to "qualified institutional buyers" ("QIBs") and "accredited investors" as those terms are defined under the Securities Act. The Shares ESI will purchase pursuant to the Agreement represent approximately 1.81% of Blackhawk's outstanding shares of Common Stock. ESI has the right to syndicate all or part of its $3,000,000 investment to third-party QIBs. There are no conditions for the closing of the purchase of the Shares by ESI. As of the date of this Form 8-K, the closing has not occurred.

Craig A. Zabala, Chairman and President of Blackhawk noted: "ESI's participation is important for Blackhawk." He stated that Blackhawk had also retained John W. Loofbourrow Associates, Inc. ("JWL") and ESI to act as placement agents to raise equity capital for Blackhawk pursuant to a placement agreement dated January 16, 2009 ("Placement Agreement"). JWL and ESI will solicit interest from a limited number of potential investors who are QIBs and "accredited investors" in connection with raising equity capital for Blackhawk. In return for the placement agents' services, subject to the provisions of this paragraph and the Placement Agreement, Blackhawk will pay a placement agent a cash fee equal to ten percent (10%) of the purchase price ($5.00 per share) of any securities placed with a prospective investor by a placement agent and purchased by the investor. The placement fee for any shares of Common Stock purchased by ESI shall be payable to JWL. Thus, ESI shall not receive any placement fees on shares purchased by it. The placement fees associated with the sale of shares up to $3,000,000 to ESI shall be payable to Loofbourrow. Placement fees for all remaining shares sold in the Offering will be split 70% to Loofbourrow and 30% to ESI for sales of shares of $3,000,001 to $4,000,000, and 100% to ESI for the sales of the remaining shares up to the maximum Offering of $10,000,000. Blackhawk does not have to reimburse a placement agent for its expenses. The Placement Agreement commenced on January 16, 2009 and terminates on the earliest to occur of: (i) ten (10) calendar days after written notice given to Blackhawk by Loofbourrow or ESI of a potential investor purchasing at least 600,000 shares that will close on the purchase of shares within five (5) calendar days of the date of such written notice; (ii) twenty-eight (28) calendar days from January 15, 2009; or (iii) the date of closing and funding by any investor of a subscription agreement for a minimum of 600,000 Shares (the "Term"). The parties may extend the Term by mutual agreement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any security. The securities are being offered pursuant to a private placement memorandum to be filed with the Securities and Exchange Commission and pursuant to Rule 506 under Regulation D under the Securities Act of 1933. The securities have not been registered under any state securities laws. Neither the Securities and Exchange Commission nor any state securities commission has in any way passed upon the merits of, or given approval to, guaranteed or recommended the securities offered by Blackhawk or the terms of the offering or has determined that the securities are exempt from registration, or made any finding that the statements in the offering circular are accurate or complete.

For additional information, please refer to Blackhawk's Form 8-K filed with the Securities and Exchange Commission with respect to the transactions described above.

Safe Harbor Statement

Information contained in this release, other than historical information, should be considered forward-looking, and may be subject to inherent uncertainties in predicting future results and conditions. These statements reflect Blackhawk's current beliefs and are subject to a number of risk-factors, including: general economic and investment conditions which affect Blackhawk and its operations (including its portfolio company); need for equity capital and no assurance it can be obtained; valuation and illiquid nature of any portfolio investments; high degree of risk from investing in private companies; the regulated environment in which we operate; and the competitive market for investment capital and opportunities. Please see Blackhawk's Form 10-K for the fiscal year ended December 31, 2007, and its Form 10-Q for the fiscal quarter ended September 30, 2008, previously filed with the Securities and Exchange Commission, for a detailed discussion of the risks and uncertainties associated with Blackhawk's business. Except as otherwise required by Federal securities laws, Blackhawk undertakes no obligation to update or revise forward-looking statements for new events and uncertainties.

    Blackhawk Capital Group BDC, Inc.
    Dr. Craig A. Zabala
    President and Chief Executive Officer
    (212) 566-8300

SOURCE Blackhawk Capital Group BDC, Inc.