Axiom Capital Management Inc., a full-service broker-dealer, terminated its dealer management agreement with VII Peaks Co-Optivist Income BDC II Inc., a non-traded business development company, according to a filing with the Securities and Exchange Commission.
Axiom served as a non-exclusive managing broker-dealer in the BDC’s continuous offering of common stock, receiving a 3 percent dealer manager fee and 7 percent selling commission.
Axiom’s termination letter did not provide a reason for the termination, but VII Peaks believes it was because a post-effective amendment to their registration statement for its continuous offering has not been declared effective by the Securities and Exchange Commission.
There are no financial penalties payable as a result of the termination. VII Peaks is interviewing other firms to act as managing broker dealer in their continuous offering.
VII Peaks Co-Optivist Income BDC II invests in discounted corporate debt and equity-linked debt and preferred equity securities of companies that have a perceived risk of near term liquidity issues but have solid business fundamentals and prospects, including historical revenue growth, positive cash flow, significant and sustainable market presence, and sufficient asset coverage. As of September 30, 2015, the company has invested approximately $41.5 million in 40 investment positions in 31 portfolio companies.