Item 1. Business.
General development of business
The Company was incorporated under the Nevada General Corporation Law in February 1997 as MNS Eagle Equity Group, Inc., and was a development stage company through the end of 2005, and until the Company changed its business model with the election to be treated as a business development company on March 20, 2006. On March 8, 2006, the Company changed its corporate name to American Development & Investment Fund, Inc., to reflect its new business model and plan.
On March 16, 2006, our then sole shareholder sold 301,500 pre-split common shares, representing 100 percent of the pre-split outstanding stock of the Company at the time, resulting in a change of control of the Company. Of these shares, 286,500 common shares, representing 95 percent of the outstanding shares, were purchased by Enterprise Partners, LLC, and 15,000 shares were purchased by Peachtree Consultants, LLC, an unrelated party. The name of the Company was changed from MNS Eagle Equity Group, Inc. to American Development & Investment Fund, Inc. by the filing of an amendment to the Articles of Incorporation with the State of Nevada on March 8, 2006. The Company also filed an election to be treated as a Business Development Company under the Investment Company Act of 1940 by filing a Form N54-A with the SEC on March 20, 2006.
On March 20, 2006, the Company filed a Certificate of Designations for Class A Convertible Preferred Stock with the Nevada Secretary of State and the Board of Directors authorized the issuance of 1 million shares of Class A Convertible Preferred Stock to Enterprise Partners, LLC, our then majority shareholder, in exchange for the cancellation of $60,000 in loans for funds advanced to the Company by Enterprise Partners LLC to pay off debts of the Company and for working capital. The new Class A Convertible Preferred Stock was $0.001 par value stock, and was convertible into common stock based on a formula under which conversion is equal to 1 divided by the 30 day trailing average stock price of the common shares at the time of the conversion election, but not more than 15 common shares for each preferred share converted, or a maximum of 15 million common shares. The conversion of the Series A Convertible Preferred Stock occurred automatically in April, 2008 with the issue of 4 million common shares for the 1 million Series A Convertible Preferred shares issued.
Effective March 20, 2006, the Company implemented a 100 for 1 forward split of our outstanding common shares. As a result of the forward split, there were 30,150,000 common shares then outstanding. This forward split has been reflected retroactively on our financial statements.
Currently, the Common shares of the Company do not trade on any over-the- counter market or exchange.
During 2008, the Company did not complete any portfolio investments, or the acquisition or disposition of any material asset. The business of the Company was limited to engaging in the due diligence necessary to locate suitable portfolio investments for the Company, as a Business Development Company. We conducted extensive due diligence on a number of potential portfolio investments during 2008, and entered into investment and acquisition agreements with three separate companies, all in the Internet marketing markets. All three investments were scheduled to close before the end of 2008, but significant changes in the U.S. economy generally and the Internet marketing space in particular, which affected the results of operations of all three potential portfolio investments, resulted in the termination of the acquisitions in December, 2008.
The Company currently is negotiating a portfolio investment opportunity in the distressed retail operations acquisition and liquidation market. A letter of intent to acquire the portfolio company has been entered into and a draft acquisition agreement has been negotiated, and the Company anticipated a closing prior to March 31, 2009. Unfortunately, unexpected circumstances postponed the closing and it is now anticipated by the end of the Second Quarter.
Financial information about market segments.
The Company does not currently have any portfolio investments and therefore has no market segment information. All material information regarding the activities of the Company is reflected in the financial statements included in this report.
Narrative description of business.
As a Business Development Company, or BDC, under the 1940 Act, the business model of the Company is to locate, invest in and provide management assistance to small public and private companies to enable those companies to undertake their own business plans and models.
We are not limited, as a BDC, to seeking portfolio investments in a particular market segment, and intend to seek investment in companies operating in a wide category of markets and business segments, including the alternative energy markets as well as medical devices and related markets.
In connection with our BDC election, the Company has adopted Corporate Governance resolutions and intends to operate as a closed-end management investment company as a business development company (a BDC).
INVESTMENT STRATEGY
We have conducted limited operations to date. Under the BDC election, we have been organized to provide investors with the opportunity to participate, with a modest amount in venture capital, in investments that are generally not available to the public and that typically require substantially larger financial commitments. In addition, we will provide professional management and administration that might otherwise be unavailable to investors if they were to engage directly in venture capital investing. We have decided to be regulated as a business development company under the 1940 Act, and will operate as a non-diversified company as that term is defined in Section 5(b)(2) of the 1940 Act. We will, at all times, conduct our business so as to retain our status as a BDC. We may not change the nature of our business so as to cease to be, or withdraw our election as, a BDC without the approval of the holders of a majority of our outstanding voting stock as defined under the 1940 Act.
As a business development company, we are required to invest at least 70% of our total assets in qualifying assets, which, generally, are securities of private companies or securities of public companies whose securities are not eligible for purchase on margin (which includes many companies with thinly traded securities that are quoted in the pink sheets or the NASD Electronic Quotation Service.) We must also offer to provide significant managerial assistance to these portfolio companies. Qualifying assets may also include:
*	cash, *	cash equivalents, *	U.S. Government securities, or *	high-quality debt investments maturing in one year or less from the date of investment.
We may invest a portion of the remaining 30% of our total assets in debt and/or equity securities of companies that may be larger or more stabilized than target portfolio companies.
Nature of a BDC
The 1940 Act defines a BDC as a closed-end management investment company that provides small businesses that qualify as an eligible portfolio company with investment capital and also significant managerial assistance.
A BDC is required under the 1940 Act to invest at least 70% of its total assets in qualifying assets consisting of eligible portfolio companies as defined in the 1940 Act and certain other assets including cash and cash equivalents.
An eligible portfolio company generally is a United States company that is not an investment company and that:
* 	does not have a class of securities registered on an exchange or included in the Federal Reserve Board's over-the-counter margin list; * is actively controlled by a BDC and has an affiliate of a BDC on its board of directors; or * meets such other criteria as may be established by the SEC.
Control under the 1940 Act is presumed to exist where a BDC owns more than 25% of the outstanding voting securities of the eligible portfolio company. We may or may not control our portfolio companies. An example of an eligible portfolio company is a new start up company or a privately owned company that has not yet gone public by selling its shares in the open market and has not applied to have its shares listed on a nationally recognized exchange such as the NYSE the American Stock Exchange, National Association of Securities Dealers' Automated Quotation System, or the National Market System. An eligible portfolio company can also be one which is subject to filing, has filed, or has recently emerged from reorganization protection under Chapter 11 of the Bankruptcy Act.
A BDC may invest the remaining 30% of its total assets in non-qualifying assets, including companies that are not eligible portfolio companies. The foregoing percentages will be determined, in the case of financings in which a BDC commits to provide financing prior to funding the commitment, by the Amount of the BDC's total assets represented by the value of the maximum amount of securities to be issued by the borrower or lessee to the BDC pursuant to such commitment. As a BDC, we must invest at least 70% of our total assets in qualifying assets but may invest more in such qualifying assets.
Primary Strategy
We have significant relative flexibility in selecting and structuring our investments. We are not subject to many of the regulatory limitations that govern traditional lending institutions such as banks. We will seek to structure our investments so as to take into account the uncertain and potentially variable financial performance of our portfolio companies. This should enable our portfolio companies to retain access to committed capital at different stages in their development and eliminate some of the uncertainty surrounding their capital allocation decisions. We will calculate rates of return on invested capital based on a combination of up-front commitment fees, current and deferred interest rates and residual values, which may take the form of common stock, warrants, equity appreciation rights or future contract payments. We believe that this flexible approach to structuring investments will facilitate positive, long-term relationships with our portfolio companies and enable us to become a preferred source of capital to them. We also believe our approach should enable debt financing to develop into a viable alternative capital source for funding the growth of target companies that wish to avoid the dilutive effects of equity financings for existing equity holders.
Longer Investment Horizon
We are not subject to periodic capital return requirements. These requirements, which are standard for most private equity and venture capital funds, typically require that these funds return to investors the initial capital investment after a pre-agreed time, together with any capital gains on such capital investment. These provisions often force such funds to seek the return of their investments in portfolio companies through mergers, public equity offerings or other liquidity events more quickly than they otherwise might, which can result in a lower overall return to investors and adversely affect the ultimate viability of the affected portfolio companies. Because we may invest in the same portfolio companies as these funds, we are subject to these risks if these funds demand a return on their investments in the portfolio companies. We believe that our flexibility to take a longer-term view should help us to maximize returns on our invested capital while still meeting the needs of our portfolio companies.
Established Deal Sourcing Network
	We believe that, through our management and directors, we have solid contacts and sources from which to generate investment opportunities. These contacts and sources include:
*	public and private companies, *	investment bankers, *	attorneys, *	accountants, *	consultants, and *	commercial bankers.
However, we cannot assure you that such relationships will lead to the origination of equity, debt or other investments.
Investment Criteria
As a matter of policy, we will not purchase or sell real estate or interests in real estate or real estate investment trusts except that we may:
* purchase and sell real estate or interests in real estate in connection with the orderly liquidation of investments, or in connection with foreclosure on collateral; *	own the securities of companies that are in the business of buying, selling or developing real estate; or *	finance the purchase of real estate by our portfolio companies.
We will limit our investments in more traditional securities (stock and debt instruments) and will not, as a matter of policy:
*	sell securities short except with regard to managing the risks associated with publicly-traded securities issued by our portfolio companies; or *	purchase securities on margin (except to the extent that we may purchase securities with borrowed money); or *	engage in the purchase or sale of commodities or commodity contracts, including futures contracts except where necessary in working out distressed loans or similar investment situations or in hedging the risks associated with interest rate fluctuations, and, in such cases, only after all necessary registrations or exemptions from registration with the Commodity Futures Trading Commission have been obtained.
Prospective Portfolio Company Characteristics. We have identified several criteria that we believe will prove important in seeking our investment objective with respect to target companies. These criteria will provide general guidelines for our investment decisions; however, we caution readers that not all of these criteria will be met by each prospective portfolio company in which we choose to invest.
Experienced Management. We will generally require that our portfolio companies have an experienced president or management team. We will also require the portfolio companies to have in place proper incentives to induce management to succeed and to act in concert with our interests as investors, including having significant equity interests. We intend to provide assistance in this area either supervising management or providing management for our portfolio companies.
Products or Services. We will seek companies that are involved in products or services that do not require significant additional capital or research expenditures. In general, we will seek target companies that make innovative use of proven technologies or methods.
Proprietary Advantage. We expect to favor companies that can demonstrate some kind of proprietary sustainable advantage with respect to their competition. Proprietary advantages include, but are not limited to:
*	patents or trade secrets with respect to owning or manufacturing its products, and *	a demonstrable and sustainable marketing advantage over its competition.
Marketing strategies impose unusual burdens on management to be continuously ahead of its competition, either through some kind of
technological advantage or by being continuously more creative than its competition.
Profitable or Nearly Profitable Operations Based on Cash Flow from Operations.
We will focus on target companies that are profitable or nearly profitable on an operating cash flow basis. Typically, we would not expect to invest in start-up companies unless there is a clear exit strategy in place.
Potential for Future Growth
We will generally require that a prospective target company, in addition to generating sufficient cash flow to cover its operating costs and service its debt, demonstrate an ability to increase its revenues and operating cash flow over time. The anticipated growth rate of a prospective target company will be a key factor in determining the value that we ascribe to any warrants or other equity securities that we may acquire in connection with an investment in debt securities.
Exit Strategy
Prior to making an investment in a portfolio company, we will analyze the potential for that company to increase the liquidity of its common equity through a future event that would enable us to realize appreciation, if any, in the value of our equity interest. Liquidity events may include:
*	an initial public offering, *	a private sale of our equity interest to a third party, *	a merger or an acquisition of the portfolio company, or *	a purchase of our equity position by the portfolio company or one of its stockholders.
We may acquire warrants to purchase equity securities and/or convertible preferred stock of the eligible portfolio companies in connection with providing financing. The terms of the warrants, including the expiration date, exercise price and terms of the equity security for which the warrant may be exercised, will be negotiated individually with each eligible portfolio company, and will likely be affected by the price and terms of securities issued by the eligible portfolio company to other venture capitalists and other holders. We anticipate that most warrants will be for a term of five to ten years, and will have an exercise price based upon the price at which the eligible portfolio company most recently issued equity securities or, if a new equity offering is imminent, the proposed offering price of the equity securities. The equity securities for which the warrant will be exercised generally will be common stock, of which there may be one or more classes, or convertible preferred stock.
Substantially all the warrants and underlying equity securities will be restricted securities under the 1933 Act at the time of the issuance. We will generally negotiate for registration rights with the issuer that may provide:
*	piggyback registration rights, which will permit us under certain circumstances, to include some or all of the securities owned by us in a registration statement filed by the eligible portfolio company, or *	in some circumstances, "demand" registration rights permitting us, under certain circumstances, to require the eligible portfolio company to register securities under the 1933 Act, in some cases at our expense.
We will generally negotiate net issuance provisions in the warrants, which will allow us to receive upon exercise of the warrant without payment of any cash a net amount of shares determined by the increase in the value of the issuer's stock above the exercise price stated in the warrant.
Liquidation Value of Assets
Although we do not intend to operate as an asset based lender, the prospective liquidation value of the assets, if any, collateralizing any debt securities that we hold will be an important factor in our credit analysis. We will emphasize both tangible assets, such as:
*	accounts receivable, *	inventory, and *	equipment,
and intangible assets, such as:
*	intellectual property, *	customer lists, *	networks, and *	databases.
Investment Process
Due Diligence. If a target company generally meets the characteristics described above, we will perform initial due diligence, including:
*	company and technology assessments, *	existing management team, *	market analysis, *	competitive analysis, *	evaluation of management, risk analysis and transaction size, *	pricing, and *	structure analysis.
Much of this work will be done by management and by our investment adviser, American Development Investment Advisors, LLC. The criteria delineated above provide general parameters for our investment decisions. We intend to pursue an investment strategy by further imposing such criteria and reviews that best insures the value of our investments. As unique circumstances may arise or be uncovered, not all of such criteria will be followed in each
instance but the process provides a guideline by which investments can be prudently made and managed. Upon successful completion of the preliminary evaluation, we will decide whether to deliver a non-binding letter of intent and move forward towards the completion of a transaction.
In our review of the management team, we look at the following:
*	Interviews with management and significant shareholders, including any financial or strategic sponsor; *	Review of financing history; *	Review of management's track record with respect to:
o product development and marketing, o mergers and acquisitions, o alliances, o collaborations, o research and development outsourcing and other strategic activities;
*	Assessment of competition; and *	Review of exit strategies.
In our review of the financial conditions, we look at the following:
*	Evaluation of future financing needs and plans; *	Detailed analysis of financial performance; *	Development of pro forma financial projections; and *	Review of assets and liabilities, including contingent liabilities, if any, and legal and regulatory risks.
In our review of the products and services of the portfolio company, we look at the following:
*	Evaluation of intellectual property position; *	Review of existing customer or similar agreements and arrangements; *	Analysis of core technology; * Assessment of collaborations; *	Review of sales and marketing procedures; and *	Assessment of market and growth potential.
Upon completion of these analyses, we will conduct on-site visits with the target company's management team. Also, in cases in which a target company is at a mature stage of development and if other matters exist that warrant such an evaluation, we will obtain an independent appraisal of the target company.
Ongoing Relationships with Portfolio Companies
Monitoring.
We will continuously monitor our portfolio companies in order to determine whether they are meeting our financing criteria and their respective business plans. We may decline to make additional investments in portfolio companies that do not continue to meet our financing criteria. However, we may choose to make additional investments in portfolio companies that do not do so, but we believe that we will nevertheless perform well in the future.
We will monitor the financial trends of each portfolio company to assess the appropriate course of action for each company and to evaluate overall portfolio quality. Our management team and consulting professionals, who are well known by our management team, will closely monitor the status and performance of each individual company on at least a quarterly and, in some cases, a monthly basis.
We will use several methods of evaluating and monitoring the performance and fair value of our debt and equity positions, including but not limited to the following:
*	Assessment of business development success, including product development, financings, profitability and the portfolio company's overall adherence to its business plan; *	Periodic and regular contact with portfolio company management to discuss financial position, requirements and accomplishments; *	Periodic and regular formal update interviews with portfolio company management and, if appropriate, the financial or strategic sponsor; *	Attendance at and participation in board meetings; *	Review of monthly and quarterly financial statements and financial projections for portfolio companies.
Managerial Assistance.
As a business development company, we will offer, and in many cases may provide, significant managerial assistance to our portfolio companies. This assistance will typically involve:
*	monitoring the operations of our portfolio companies, *	participating in their board and management meetings, *	consulting with and advising their officers, *	providing other organizational and financial guidance, and * placing a representative on the Board of Directors or other governing body of each portfolio company.
Diversification
As a BDC, we must invest at least 70% of our total assets in qualifying assets consisting of investments in eligible portfolio companies and certain other assets including cash and cash equivalents. In order to receive favorable pass-through tax treatment on any distributions to our shareholders, we intend to diversify our pool of investments in such a manner so as to qualify as a diversified closed end management investment company. However, because of the limited size of the funding which is likely to be available to us, we will likely be classified as a non- diversified closed end investment company under the 1940 Act. Until we qualify as a registered investment company, we will not be subject to the diversification requirements applicable to RICs under the Internal Revenue Code. Therefore, we will not receive favorable pass through tax treatment on distributions to our shareholders. In the future, we will seek to increase the diversification of our portfolio so as to make it possible to meet the RIC diversification requirements, as described below. We cannot assure you, however, that we will ever be able to meet those requirements.
To qualify as a RIC, we must meet the issuer diversification standards under the Internal Revenue Code that require that, at the close of each quarter of our taxable year,
*	not more than 25% of the market value of our total assets is invested in the securities of a single issuer, and *	at least 50% of the market value of our total assets is represented by cash, cash items, government securities, securities of other RICs, and other securities.
Each investment in these other securities is limited so that not more than 5% of the market value of our total assets is invested in the securities of a single issuer and we do not own more than 10% of the outstanding voting securities of a single issuer. For purposes of the diversification requirements under the Internal Revenue Code, the percentage of our total assets invested in securities of a portfolio company will be deemed to refer, in the case of financings in which we commit to provide financing prior to funding the commitment, to the amount of our total assets represented by the value of the securities issued by the eligible portfolio company to us at the time each portion of the commitment is funded.
Investment Amounts
The amount of funds committed to a portfolio company and the ownership percentage received will vary depending on the maturity of the portfolio company, the quality and completeness of the portfolio company's management team, the perceived business opportunity, the capital required compared to existing capital, and the potential return. Although investment amounts will vary considerably, we expect that the average investment, including follow-on investments, will be between $250,000 and $5,000,000.
Competition
Our primary competitors which are able to provide financing to target companies, will include private equity and venture capital funds, other equity and non-equity based investment funds and investment banks and other sources of financing, including additional financial services companies such as commercial banks and specialty finance companies. Many of these entities have substantially greater financial and managerial resources than we will have. We believe that our competitive advantage with regard to quality target companies relates to our ability to negotiate flexible terms and to complete our review process on a timely basis. We cannot assure you that we will be successful in implementing our strategies.
Financial information about geographic areas.
The Company has not engaged in any activities, and has no customers or portfolio investments, outside of the United States. As a BDC, our investment portfolio is limited to U.S. companies, although a portfolio company in which we invest may have operations in both the U.S. and outside the U.S.
Item 1A.
Item 1A. Risk Factors.
THE COMPANY HAS LIMITED RESOURCES AND NO PRESENT SOURCE OF REVENUES
The Company has limited resources and has had no revenues to date. In addition, the Company will not achieve any revenues until, at the earliest, the consummation of a Portfolio Investment. Moreover, there can be no assurance that any Portfolio Investment, at the time of the Company's consummation of an investment, or at any time thereafter, will provide any material revenues from its operations or operate on a profitable basis.
THE COMPANY MAY NEED ADDITIONAL FINANCING IN ORDER TO EXECUTE ITS BUSINESS PLAN
	The Company has had no revenues to date and will be entirely dependent upon its limited available financial resources. The Company cannot ascertain with any degree of certainty the capital requirements for the execution of its business plan. In the event that the Company's limited financial resources prove to be insufficient to implement the Company's business plan, the Company may be required to seek additional financing.
ADDITIONAL FINANCING MAY NOT BE AVAILABLE TO THE COMPANY IF NEEDED
There can be no assurance that additional financing, if needed, will be available on acceptable terms, or at all. To the extent that additional financing proves to be unavailable when needed, the Company would, in all likelihood, be compelled to abandon plans for a Portfolio Investment, and would have minimal capital remaining to pursue other Portfolio Companies. The failure by the Company to secure additional financing, if needed, could also have a material adverse effect on the continued development or growth of the Portfolio Company. The Company has no arrangements with any bank or financial institution to secure additional financing and there can be no assurance that any such arrangement, if required or otherwise sought, would be available on terms deemed to be commercially acceptable and in the best interests of the Company.
THE COMPANY MAY NOT BE ABLE TO BORROW FUNDS IF NEEDED
There currently are no limitations on the Company's ability to borrow funds to increase the amount of capital available to the Company to effect a Portfolio Investment, other than the general limitation of the ratio between debt and equity imposed on all BDCs by the 1940 Act. Moreover, the limited resources of the Company and lack of operating history will make it difficult to borrow funds. The amount and nature of any borrowings by the Company will depend on numerous considerations, including the Company's capital requirements, the Company's perceived ability to meet debt service on any such borrowings and the then prevailing conditions in the financial markets, as well as general economic conditions. There can be no assurance that debt financing, if required or sought, would be available on terms
deemed to be commercially acceptable by and in the best interests of the Company. The inability of the Company to borrow funds required to effect or facilitate an investment, or to provide funds for an additional infusion of capital into a Portfolio Company, may have a material adverse effect on the Company's financial condition and future prospects. Additionally, to the extent that debt financing ultimately proves to be available, any borrowings may subject the Company to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest. Furthermore, a Portfolio Company may have already incurred borrowings and, therefore, all the risks inherent thereto.
THE COMPANY IS UNABLE TO ASCERTAIN RISKS RELATING TO THE INDUSTRY AND NATURE OF UNIDENTIFIED PORTFOLIO INVESTMENT TARGETS
The Company has not yet selected any particular Portfolio Company in which to concentrate its investment efforts. The directors and executive officers of the Company have had contact or discussions with several entities or representatives of entities regarding consummation of a Portfolio Investment, but have not yet successfully completed an investment. Accordingly, there is no basis to evaluate the possible merits or risks of a Portfolio Investment, and therefore risks of a currently unascertainable nature may arise when a specific Portfolio Company is chosen. For example, to the extent that the Company effects an investment in a financially unstable company or an entity in its early stage of development or growth (including entities without established records of revenues or income), the Company will become subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that the Company effects an investment in an entity in an industry characterized by a high level of risk, the Company will become subject to the currently unascertainable risks of that industry. Although management will endeavor to evaluate the risks inherent in a particular Portfolio Company, there can be no assurance that the Company will properly ascertain or assess all such risks.
SUCCESS OF THE COMPANY'S BUSINESS PLAN DEPENDS IN LARGE PART UPON THE CONSUMMATION OF A PORTFOLIO INVESTMENT
The success of the Company's proposed plan of operation will depend to a great extent on locating and consummating an investment in a Portfolio Company. Subsequent to any investment, the Company's success will depend greatly on the operations, financial condition, and management of the identified Portfolio Company. While management intends to seek an investment in a company that has an established operating history, it cannot assure that the Company will successfully locate candidates meeting such criteria. In the event the Company completes an investment, the success of the Company's operations may be dependent upon management of the Portfolio Company and numerous other factors beyond the Company's control.
THE COMPANY DEPENDS UPON ITS EXECUTIVE OFFICERS AND DIRECTORS
The ability of the Company to successfully effect a Portfolio Investment will be dependent upon the efforts of its executive officers and directors, as well as its ability to attract additional directors and executive officers. The Company has not entered into employment agreements or other understandings with any officer or director concerning compensation or obtained any "key man" life insurance on his or her life.
THERE EXIST RISKS TO STOCKHOLDERS RELATING TO DILUTION: AUTHORIZATION OF ADDITIONAL SECURITIES AND REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING A PORTFOLIO INVESTMENT
To the extent that additional shares of Common Stock are issued, the Company's stockholders would experience dilution of their respective ownership interests in the Company. Additionally, if the Company issues a substantial number of shares of Common Stock in connection with or following a Portfolio Investment, a change in control of the Company may occur which may affect, among other things, the Company's ability to utilize net operating loss carry forwards, if any. Furthermore, the issuance of a substantial number of shares of Common Stock may adversely affect prevailing market prices, if any, for the Common Stock and could impair the Company's ability to raise additional capital through the sale of its equity securities. The Company may use consultants and other third parties providing goods and services, including assistance in the identification and evaluation of potential Portfolio Companies. These consultants or third parties may be paid in cash, stock, options or other securities of the Company, and the consultants or third parties may be Placement Agents or their affiliates.
THE COMPANY EXPECTS TO PAY NO CASH DIVIDENDS
The Company does not expect to pay dividends prior to the consummation of a Portfolio Investment. The payment of dividends after consummating any such investment will be contingent upon the Company's revenues and earnings, if any, capital requirements, and general financial condition subsequent to consummation of an investment. The payment of any dividends subsequent to an investment will be within the discretion of the Company's then Board of Directors. The Company presently intends to retain all earnings, if any, for use in the Company's business operations and accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.
THE COMPANY IS AUTHORIZED TO ISSUE PREFERRED STOCK
	The Company's Certificate of Incorporation authorizes the issuance of 5,000,000 shares of preferred stock (the "Preferred Stock"), with such designations, powers, preferences, rights, qualifications, limitations and restrictions of such series as the Board of Directors, subject to the laws of the State of Nevada, may determine from time to time. Accordingly, the Board of Directors is empowered, without stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the
holders of Common Stock. In addition, the Preferred Stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. As of the date of this report, the Company has no outstanding shares of Preferred Stock.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not applicable.
Item 2.
Item 2. Properties.
	The Company neither owns nor leases any significant real estate or other properties at the present time. The Company requires minimal office space and the Company has subleased space for corporate and administrative purposes in Merritt Island, Florida from CF Consulting, LLC., an independent consultant to the Company by which our contract CFO, Robert Hipple, is employed, for $550 per month commencing in January, 2009 for a two year term. This arrangement will continue until the Company raises funding and determines that more extensive office space is necessary for its operations.
Item 3.
Item 3. Legal Proceedings
There are no legal proceedings pending, or to the best knowledge of management, threatened against the Company. There were no legal proceedings previously pending which were resolved during the fourth quarter of the fiscal year ended December 31, 2008.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders of the Company during the fourth quarter of the fiscal year, ended December 31, 2008.
PART II
Item 5.
Item 5. Market for Registrant?s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a)	Market information. The common shares of the Company have not been admitted for trading on any market. As a result, no information regarding high and low sales prices or high and low bid information for the common shares is available or provided in this report.
(b) Holders. As of March 15, 2009, there were approximately 45 holders of record of our common stock.
(c) Dividends. The Company has not paid any dividends to date, has not yet generated earnings sufficient to pay dividends, and currently does not intend to pay dividends in the foreseeable future.
(d) Securities authorized for issuance under equity compensation plans. Although the Company has two authorized equity compensation plans approved by its shareholders in 1997, before it elected to be treated as a business development company, no stock options, grants, warrants or other awards have ever been made under the plans. The By-laws of the Company prohibit the grant or award of any such options, grants, warrants or other awards so long as the Company maintains its election to be treated as a business development company. Under the rules regulating a business development company under the Investment Company Act of 1940, the Company may not issue or award any such options, grants, warrants or other incentive compensation awards because it also has a capital gains based incentive in effect with its investment adviser, American Development Advisers, LLC.
	The following table sets forth, as of the year ended December 31, 2008, certain information with respect to the compensation plans and individual compensation arrangements to which the Company is a party, if any, under which any equity securities of the Company are authorized for issuance.
Plan category Number of securities Weighted average Number of securities to be issued upon exercise price of remaining available exercise of outstanding options, for future issuance outstanding options, warrants and rights under equity warrants and rights compensation plans
(a) (b) (c) - ------------------------------------------------------------------------------ Equity compensation plans approved by security holders
1997 EMPLOYEE STOCK COMPENSATION PLAN -0- N/A 1,000,000
1997 COMPENSATORY STOCK OPTION PLAN -0- N/A 1,500,000
Equity compensation plans not approved by security holders
NONE N/A N/A N/A - ------------------------------------------------------------------------------ Total -0-
Item 6.
Item 6. Selected Financial Data.
The Company was in a development stage through the end of 2005 and had no income or assets during the period from its incorporation in 1997 through the end of 2005. Therefore, the information required by Item 301 of Regulation S-K is omitted for that period as not material.
During 2006 through 2008, after the election to be treated as a BDC, the Company has had no revenues, income from continuing operations, and similar items, and has not had any accounting changes, or business combinations or dispositions. The net loss, net loss per common share, net asset values, net asset value per common share, and related financial data as a BDC are provided in the financial statements included in this report
Item 7.
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations.
We have elected to be treated as a business development company under the 1940 Act. Accordingly, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in qualifying assets, including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We will typically invest under normal circumstances, at least 80 percent of net assets in qualifying portfolio companies.
We expect to invest in growing companies, many of which have relatively short or no operating histories. These companies are and will be subject to all the business risks and uncertainties associated with any new business enterprise, including the risk that these companies may not reach their investment objective and the value of our investment in them may decline substantially or fall to zero. As of December 31, 2008, we had not yet made any portfolio or other investments.
Results of Operations
During the year ended December 31, 2008, the Company made considerable efforts to carry out its business plan as a Business Development Company. These efforts included both business development and financing activities. Through the end of the fiscal year, the Company incurred over $165,000 in expenses in connection with its Business Development Company operations, most of which related to the due diligence investigation of the three proposed portfolio acquisitions, and negotiating and entering into acquisition agreements, before the investments were abandoned in December 2008.
Critical Accounting Policies
In determining the fair value of our investments, the Audit Committee will consider valuations from an independent valuation firm, as needed, from our Investment Committee, our investment adviser and from management Results of Operations
Financial Highlights
Financial highlights of the Company for the fiscal year ending December 31, 2008 are included in Footnote 6 to our Financial Statements.
Investment Activity
We engaged in no actual investments during the year ended December 31, 2008.
Long-Term Portfolio Investments
There were no portfolio investments made during the twelve months ended December 31, 2008.
Investment Income
We expect to generate revenue in the form of interest income on the debt securities that we own, dividend income on any common or preferred stock that we own, and capital gains or losses on any debt or equity securities that we acquire in portfolio companies and subsequently sell. Our investments, if in the form of debt securities, will typically have a term of one to ten years and bear interest at a fixed or floating rate. To the extent achievable, we will seek to collateralize our investments by obtaining security interests in our portfolio companies? assets. We also may acquire minority or majority equity interests in our portfolio companies, which may pay cash or in-kind dividends on a recurring or other negotiated basis. In addition, we may earn revenue in other forms including commitment, origination, structuring or due diligence fees, management fees and consultation fees, which will be recognized as earned. We earned no investment income during the year ended December 31, 2008.
Operating Expenses
Operating expenses for the years ended December 31, 2008 and 2007 are broken down as follows: 2008 2007 ----------- ----------- Operating Expenses: Consulting expenses $ 22,500 $ 85,000 Rent 5,200 5,400 Audit fees 10,749 11,082 Other expenses: Bank fees 61 - Office supplies 150 477 Transfer agent 350 2,245 --------- --------- Total operating expense $ 39,010 $ 104,204
The consulting expenses were paid or due to CF Consulting, LLC, pursuant to a consulting agreement under which Robert Hipple served as our CFO and Chief Compliance Officer for a monthly fee of $7,500, which expired in April 2008. The rent expense represents rent paid or due to CF Consulting, LLC for sub- leasing office space, telephone, office equipment and related office services at the rate of $550 per month. The remaining expenses were paid or due to non- affiliated parties, including $10,749 in professional fees to our independent audit firm for audit services.
Net Investment Income, Net Unrealized Appreciation and Net Increase in Stockholders Equity Resulting from Operations
Our net investment income totaled $0 for the year ended December 31, 2008 compared to $0 for the year ended December 31, 2007. Net unrealized appreciation totaled $0 for the year ended December 31, 2008 compared to $0 or the year ended December 31, 2007.
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources were generated initially from an advance of $60,000 by our then major shareholder, Enterprise Partners, LLC, which was later paid by the issuance of 1 million shares of Series A Convertible Preferred Stock. We also undertook an exempt offering of our common shares pursuant to a Form 1-E Application and Notice filed with the SEC on March 10, 2008, and accepted subscriptions for a total of 124,800 common shares, representing $31,200 in additional working capital. We generated no cash flows from operations during 2008 In the future, we may fund a portion of our investments through borrowings from banks, issuances of senior securities or secondary offerings of equity, including further exempt offerings. We may also securitize a portion of our investments in mezzanine or senior secured loans or other assets. Our primary use of funds will be investments in portfolio companies.
Going Concern
The Company?s ability to continue as a going concern remains dependent upon successful operation under our business plan, obtaining additional capital and financing, and acquiring suitable portfolio investment companies. The Company currently has no revenue and minimal cash reserves. These factors, among others, raise substantial doubt about its ability to continue as a going concern.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
We are subject to financial market risks, including changes in interest rates, equity price risk and some of the loans in our portfolio may have floating rates in the future. We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of higher interest rates with respect to our portfolio of investments. During the twelve months ended December 31, 2008, we did not engage in any hedging activities.
	Since the Company to date has had no significant operations, the
information and disclosures required by Item 305 of Regulation S-K are omitted as not material.
Item 8.
Item 8. Financial Statements and Supplementary Data.
See the index to the financial statements of the Company on page 30.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None
Item 9A(T).
Item 9A(T). Controls and Procedures.
	Within 90 days prior to the filing of this Form 10-K, an evaluation was carried out by our CEO, and consulting CFO as of the end of the reporting period covered by this report, of the effectiveness of our disclosure controls and procedures. Disclosure controls and procedures are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-K, is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission's rules and forms. Based on that evaluation, our management concluded that, as of December 31, 2008, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.
	There were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal year covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.
Management's Annual Report on Internal Control over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in accordance with United States generally accepted accounting principles.
We assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2008 based on the framework in ?Internal Control Over Financial Reporting ? Guidance for Smaller Public Companies? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, we determined that, as of December 31, 2008, the Company's internal control over financial reporting is effective, based on those criteria.
This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
Item 9B.
Item 9B. Other Information.
None
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
IDENTIFICATION OF DIRECTORS and EXECUTIVE OFFICERS
	The persons who served as directors and executive officers of the Company through the period ending December 31, 2008 covered by this report, their ages and positions held in the Company, are listed below.
Name 				 Age		 Position John Kelly 44 Director Adam Mayblum		 44 Director David Brant 		 42 Director David Dallow			 38 Director Robert Hipple		 64 Interim CEO/CFO, Director
BIOGRAPHICAL INFORMATION
John V. Kelly, Director, has served on the National Security Traders Association (STA) Board of Governors for the last 2 years. Mr. Kelly is the Director of Trading Services with Pointe Capital in Delray Beach, Florida. Before that, he was Director of Equity Trading at Sterling Financial Investment Group for 5 years. He holds Series 7, 63, 55 and 24 securities licenses with the NASD. In his 18 year trading career, Mr. Kelly has been with several institutional research boutiques based in Florida. For the past 11 years, he has been active in STA, serving on the Trading Issues Committee for the last 4 years. In addition, he is Past President of the Security Traders Association of Florida (STAF), where he has served as an officer or on the Board of Directors for the last 13 years. Mr. Kelly is Co-Chairman of the STA Technology Exhibition Committee, which worked to bring industry leaders in technology as vendors at STA?s 2005 Conference in Boca Raton. During his tenure with STA and STAF, he has interacted with securities industry leaders as well as individual corporate chairmen and board members.
Adam Mayblum, Director, co-founded ADIF Advisors, LLC and is a principal and founder of Enterprise Partners, LLC. Prior to founding Enterprise Partners, LLC, he had 17 years of experience in the financial markets as a top retail producer specializing in Public Venture Capital. In 1998 Mr. Mayblum left his position as Branch Manager of HJ Meyers in NY to become a Managing Director of The May Davis Group, specializing in PIPES (Private Investments in Public Equity). In 2002, Mr. Mayblum took a position as the Managing Director of the Private Equities Group of Joseph Stevens & Company where he successfully completed numerous financings and advised many companies on changes in the regulatory environment and the impact those changes have on their ability to raise capital in the public and private markets. He graduated from Emory University in 1987 with a BBA in Management.
Robert Hipple served as interim Chief Executive and Financial Officer of the Company on a consulting basis through the end of 2008. Mr. Hipple is an attorney, law professor and senior executive with 35 years experience as president and chief executive officer, chief financial officer and general counsel, as well as a director, for several public (NYSE, AMEX and NASDAQ) companies. He also has extensive experience with public mergers, acquisitions and capital raising, along with personal relations with investment banks, broker/dealers, and market makers, and has taught both taxation and federal securities law at Georgetown University Law School, Emory University Law School, the University of San Diego School of Law and Florida A&M University College of Law. Mr. Hipple also has been a Visiting Professor of Law at Florida A&M University College of Law, was President and CEO of International Trust & Financial Systems, Inc., a publicly traded financial services company in 2002 and 2003 and was Senior Vice President and General Counsel of Enesco, Inc., a New York Stock Exchange listed company based in the Chicago area from August 1999 to April 2001. He is also contract Chief Financial Officer of United EcoEnergy Corp., a BDC concentrating in the unrelated markets. Mr. Hipple resigned as an officer and director of the Company effective January 1, 2009, but continues to act as a consultant for the Company, through CF Consulting, LLC, and provides financial and compliance services as a consultant.
David Brant, Director, is Senior Vice President and CFO of Legent Clearing. Prior to joining Legent Clearing, Mr. Brant served as Vice President and Controller in the Independent Brokerage Group at Wachovia Securities, which included the correspondent clearing division, First Clearing, LLC. He has over 10 years of securities industry experience and currently holds the 7, 24, 27, and 66 licenses. He is an active CPA in the State of Nebraska.
David Dallow, Director has over 13 years experience in the securities industry, including management positions at NYSE member and non-member firms. Currently, he is head trader at Oscar Gruss and Son, Inc. Mr. Dallow began his career as a retail producer specializing in public venture capital. He quickly attained the positions of Managing Director and Sales Manager, overseeing the training and supervision of large sales forces. Thereafter, Mr. Dallow moved into equities trading and sales trading, rising to the level of Head Trader for a NYSE member firm. In this role he has gained valuable experience in sales, trading and compliance.
POTENTIAL CONFLICTS OF INTEREST
	For all periods subsequent to the Company election to operate as a BDC on March 20, 2006, the Company is required to and will maintain a Board of Directors made up of a majority of independent directors, and will operate within the rules and requirements of a BDC under the 1940 Act. The Company has adopted a Conflicts of Interest Policy which is designed to prevent any real or potential conflicts of interest for its directors and officers. The Company is not aware of any conflicts of interest, actual or potential, between its intended plan of operations and any director or officer of the Company, or any company in which that officer or director is an officer or director. There are no known interlocking directorships among the officers or directors of the Company which could create potential conflicts of interest. As required by the applicable BDC rules, the Company will hold an Annual Meeting of Shareholders as soon as possible after the filing of this report in order to elect its Board of Directors and to conduct such other business as might be required. No date has been set yet for the Annual Meeting, but it is expected that the Annual Meeting will be held in June, 2009.
SIGNIFICANT EMPLOYEES
None.
COMMITTEES AND BOARD MEETINGS
The Company has adopted charters for its Audit Committee, Investment Committee, Compensation Committee and Governance and Nominating Committee, which it submitted for approval by its shareholders at the Annual Meeting of Shareholders, held on July 31, 2006. Following approval of the charters, members of the Board of Directors elected at the Annual Meeting were appointed to each of the Committees, as follows:
AUDIT COMMITTEE
The Audit Committee is made up entirely of independent, non-affiliated Directors John Kelly, David Brant and David Dallow. The Company has identified David Brant, an independent director, as its Audit Committee Financial Expert by virtue of his background and experience. Mr. Brant serves as Chair of the Audit Committee of the Company.
COMPENSATION COMMITTEE
The Compensation Committee is made up entirely of independent, non- interested Directors John Kelly, David Brant and David Dallow. Mr. Dallow serves as Chairman of the Compensation Committee.
GOVERNANCE AND NOMINATING COMMITTEE
The Governance and Nominating Committee is made up of Mr. Kelly, who serves as the Chair, Mr. Dallow and Mr. Brant.
INVESTMENT COMMITTEE
The Investment Committee is made up of Mr. Mayblum, who serves as Chair, Mr. Dallow and Mr. Kelly.
CODE OF ETHICS
	The Company has adopted a Code of Ethics that applies to all of its directors, officers and employees performing financial functions for the Company, including its chief executive officer, chief financial officer, controller and any person performing similar functions.
EXCLUSION of DIRECTOR LIABILITY
	Pursuant to the General Corporation Law of Nevada, the Company Certificate of Incorporation excludes personal liability on the part of its directors to the Company for monetary damages based upon any violation of their fiduciary duties as directors, except as to liability for any acts or omissions which involve intentional misconduct, fraud or a knowing violation of law or for improper payment of dividends. This exclusion of liability does not limit any right which a director may have to be indemnified and does not affect any director's liability under federal or applicable state securities laws.
Item 11.
Item 11. Executive Compensation.
CASH and OTHER COMPENSATION
For the years ended December 31, 2008 and 2007 and through the date of this report, the Company has not paid any executive officers or directors any cash and cash equivalent compensation directly. Mr. Hipple, as interim CEO and CFO, served in those capacities on a contract basis, through a consulting agreements with CF Consulting, LLC which expired in April, 2008. The Company incurred a total of $22,500 in consulting fees through April, 2008 under the expired agreement. The Company has no other agreement or understanding, express or implied, with any director or executive officer concerning employment or cash or other compensation for services, except for the compensation payable under the Investment Advisory Agreement with American Development & Investment Advisors, in which Mr. Mayblum is a 50 percent member. Any new compensation arrangements with any officer or director of the Company will be adopted and approved by the independent Compensation Committee.
COMPENSATION PURSUANT to PLANS
	For the years ended December 31, 2008 and 2007 and through the date of this report, no director or executive officer has received compensation from the Company pursuant to any compensatory or benefit plan. There is no plan or understanding, express or implied, to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan of the Company.
	The Company currently has in place an employee stock compensation plan and compensatory stock option plan. There are no other compensatory or benefit plans, such as retirement or pension plans, in effect or anticipated to be adopted.
COMPENSATION of DIRECTORS and EXECUTIVE OFFICERS
	The following table sets forth information concerning the compensation of the Company Chairman of the Board, Chief Executive Officer and its other most highly compensated executive officers for the fiscal years ended December 31, 2008, 2007 and 2006.
Mr. Hipple is employed by CF Consulting LLC which had a consulting agreement with the Company to provide various services for an amount equal to $7,500 per month in 2007 and through April, 2008. Mr. Hipple is not paid any amounts directly or indirectly by the Company.
OPTION/SAR GRANTS
No individual grants of stock options, whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs, have been made to any executive officer or any director during the year ended December 31, 2008, Accordingly, no stock options were exercised by any of the officers or directors in fiscal 2008.
EMPLOYEE STOCK COMPENSATION PLAN
	The Company adopted the 1997 Employee Stock Compensation Plan for employees, officers, directors of the Company and advisors to the Company (the ESC Plan). The Company reserved a maximum of 1,000,000 common shares to be issued upon any grant of awards under the ESC Plan. Employees will recognize taxable income upon the grant of common stock equal to the fair market value of the common stock on the date of the grant and the Company will recognize a compensating deduction for compensation expense at such time. The ESC Plan is administered by the Compensation Committee of the Board of Directors. No shares have been awarded or currently are anticipated to be awarded under the ESC Plan, and the By-laws of the Company prohibit the issue of any such awards so long as the Company has an investment adviser agreement providing for compensation based in part on capital appreciation, in order to conform to the applicable limits under the 1940 Act relating to stock benefit plans of a BDC. The Company currently maintains an investment adviser agreement with American Development & Investment Advisers, LLC containing such a compensation arrangement.
COMPENSATORY STOCK OPTION PLAN
	The Company adopted the 1997 Compensatory Stock Option Plan for officers, employees, directors and advisors (the CSO Plan). The Company has reserved a maximum of 1,500,000 Common Shares to be issued upon the exercise of options granted under the CSO Plan. The CSO Plan will not qualify as an incentive stock option plan under Section 422 of the Internal Revenue Code of 1986, as amended. Options are granted under the CSO Plan at exercise prices be determined by the Compensation Committee of the Board of Directors. With respect to options granted pursuant to the CSO Plan, optionees will not recognize taxable income upon the grant of options granted at or in excess of fair market value. However, optionees will realize income at the time of exercising an option to the extent the market price of the common stock at that time exceeds the option exercise price, and the Company must recognize a compensation expense in an amount equal to any taxable income realized by an optionee as a result of exercising the option. The CSO Plan will is administered by the Compensation Committee of the Board of Directors. No options have been granted or currently are anticipated to be granted under the CSO Plan and the By-laws of the Company prohibit the issue of any such awards so long as the Company has an investment adviser agreement providing for compensation based in part on capital appreciation, in order to conform to the applicable limits under the 1940 Act relating to stock benefit plans of a BDC. The Company currently maintains an investment adviser agreement with American Development & Investment Advisers, LLC containing such a compensation arrangement.
COMPENSATION OF DIRECTORS
	The Company has no standard arrangements in place or currently contemplated to compensate the Company directors for their service as directors or as members of any committee of directors. Any compensation to directors will be determined and approved by the Company Compensation Committee.
EMPLOYMENT CONTRACTS
	No person has entered into any employment or similar contract with the Company, other than the consulting agreement already discussed with CF Consulting, LLC. It is anticipated that the Company may enter into employment or similar contracts in connection with its activities as a BDC, and any such contracts will be approved by the independent Compensation Committee of the Company.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
BENEFICIAL OWNERSHIP
	The following table sets forth, as of the end of the reporting period covered by this report, and as of the date of this report, the stock ownership of each executive officer and director of the Company, of all executive officers and directors of the Company as a group, and of each person known by the Company to be a beneficial owner of 5% or more of its common stock. Except as otherwise noted, each person listed below is the sole beneficial owner of the shares and has sole investment and voting power as to such shares. No person listed below has any option, warrant or other right to acquire additional securities of the Company, except as may be otherwise noted.
Name and Address			 Amount & Nature of Beneficial				 of Beneficial		Percent 	 Owner 	 Position	 Ownership 		of Class - ------------------------------------------------------------------------------ John Kelly		 Director	 20,000 -- 1227 Harbor Drive Delray Beach, FL 33483
Adam Mayblum		 Director(1)	 8,390,567 24.4 50 Andrew Lane New Rochelle, NY 10804
David Brant		 Director		 20,000 -- 6314 South 174th Street Omaha, NE 68135-3239
David Dallow 		 Director			 20,000 -- 181 Plymouth Drive Scarsdale, NY 10583
Robert Hipple		 Former -- -- 409 Brevard Avenue Director, CEO/CFO Cocoa, Fl 32922 Secretary/Treasurer
*All directors & officers		 8,450,567 24.4 as a group (5 persons)
Enterprise Partners, LLC			 10,558,267 30.7 50 Andrew Lane New Rochelle, NY 10804
Patrick Donelan(2) 8,590,567 25.0 3570 Lakeview Drive Delray Beach, FL 33445
(1)	Adam Mayblum is a 50 percent owner of Enterprise Partners, LLC, which owns 10,558,267 shares of common stock and therefore may be considered the beneficial owner of an additional 5,279,133 common shares. Mr. Mayblum also is the custodian of 600,000 shares held for the benefit of his three minor children and therefore may be considered the beneficial owner of those shares. (2) Patrick Donelan is a 50 percent owner of Enterprise Partners, LLC, which owns 10,558,267 shares of common stock and therefore may be considered the beneficial owner of an additional 5,279,133 common shares. Mr. Donelan also is the custodian of 400,000 shares held for the benefit of his two minor children and therefore may be considered the beneficial owner of those shares.
Item 13.
Item 13. Certain Relationships and Related Transactions and Director Independence.
No officer, director or employee of the Company has received a salary of $60,000 or more in 2008 or 2007. Mr. Hipple, the Company interim President and CEO/CFO, received no direct compensation from the Company. CF Consulting, LLC, through which Mr. Hipple serves as CEO, earned a total of $85,000 in consulting fees during 2007 and $22,500 in 2008. CF Consulting, LLC also is owed payments totaling $550 in rent for office space and services under a sub-lease agreement, at the rate of $550 per month. There were no other transactions, or series of transactions, for the years ended December 31, 2008 or 2007, nor are there any currently proposed transactions, or series of transactions, to which the Company is a party, in which the amount exceeds $60,000, and in which to the knowledge of the Company any director, executive officer, nominee, five percent or greater shareholder, or any member of the immediate family of any of the foregoing persons, have or will have any direct or indirect material interest, except as noted below.
The Company has entered into an investment advisory agreement with American Development & Investment Advisors, LLC, which is owned equally by Adam Mayblum, a director and more than five percent shareholder, and Patrick Donelan, also a more than five percent shareholder. Under the terms of the Agreement, the advisor will provide investment advice and assistance to the Company with respect to locating, reviewing and investing in suitable portfolio investments by the Company recommended by the Investment Committee and will assist the Investment Committee in determining the value of its portfolio investments from time to time as required for reporting purposes.
The Company has agreed to pay, and the Advisor has agreed to accept, as compensation for the services to be provided by the Advisor, a base management fee (Base Management Fee) and an incentive fee (Incentive Fee).
(a) Base Management Fee.
(i) For services rendered during the period from the effective date of the election under Section 54(a) of the 1940 Act (the Effective Date) through the end of the reported second full fiscal quarter of the Company thereafter, the Base Management Fee is payable monthly in advance, and is calculated at an annual rate of 2.00% of the value of the total assets of the Company, less the cash proceeds and cash equivalent investments from equity investors that are not invested in debt or equity securities of portfolio companies in accordance with the investment objectives of the Company (the Gross Invested Assets), valued as of the end of each preceding month during the period. (ii) For services rendered after the end of the reported second full fiscal quarter of the Company following the Effective Date, the Base Management Fee is payable quarterly in arrears, and is calculated at an annual rate of 2.00% of the average value of the total assets of the Company, including investments made with proceeds of borrowings, less any uninvested cash or cash equivalents resulting from borrowings (the Gross Assets), valued as of the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. (iii) Base Management Fees payable for any partial month or quarter will be appropriately prorated.
(b) The Incentive Fee consists of two parts, as follows:
(i) One part will be calculated and payable quarterly in arrears based on the pre-Incentive Fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-Incentive Fee net investment income means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, consulting fees that the Corporation receives from portfolio companies, but excluding fees for providing managerial assistance) accrued by the Company during the calendar quarter, minus the operating expenses of the Company for the quarter (including the Base Management Fee, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee). Pre-Incentive Fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that the Company has not yet received in cash and includes the proportionate share of the portfolio companies net income allocable to equity holdings that has not been distributed as dividends. Pre-Incentive Fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee net investment income, expressed as a rate of return on the value of the Corporations net assets at the end of the immediately preceding calendar quarter, will be compared to a hurdle rate of 1.75% per quarter (7% annualized). The Company will pay the Adviser an Incentive Fee with respect to the pre- Incentive Fee net investment income in each calendar quarter as follows: (1) no Incentive Fee in any calendar quarter in which the pre-Incentive Fee net investment income does not exceed the hurdle rate; (2) 100% of the pre- Incentive Fee net investment income with respect to that portion of such pre- Incentive Fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar quarter (8.75% annualized); and (3) 20% of the amount of the pre-Incentive Fee net investment income, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized). These calculations will be appropriately pro rated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.
(ii) The second part of the Incentive Fee (the Capital Gains Fee)
will be determined and payable in arrears as of the end of each fiscal year (or upon termination of this Agreement as set forth below), commencing on March 31, 2009, and will equal 20.0% of the realized capital gains of the Company for the 2008 calendar year, if any, computed net of all realized capital losses and unrealized capital depreciation at the end of such year; provided that the Capital Gains Fee determined as of March 31, 2009 will be calculated for a period of shorter than twelve calendar months to take into account any net realized capital gains, if any, computed net of all realized capital losses and unrealized capital depreciation for the period ending March 31, 2009. The amount of capital gains used to determine the Capital Gains Fee shall be calculated at the end of each applicable year by subtracting the sum of the Cumulative Aggregate Realized Capital Losses and Aggregate Unrealized Capital Depreciation of the Company from the Cumulative Aggregate Realized Capital Gains. If this number is positive at the end of such year, then the Capital Gains Fee for such year is equal to 20.0% of such amount, less the aggregate amount of any Capital Gains Fees paid in all prior years. In the event that the Agreement terminates as of a date that is not a calendar year end, the termination date is treated as though it were a calendar year end for purposes of calculating and paying a Capital Gains Fee.
	A copy of the Amended Investment Advisor Agreement with American
Development & Investment Advisors LLC is attached to the Proxy Statement filed with the SEC on July 21, 2006 as Appendix A.
	Mr. Mayblum and Mr. Donelan are also equal owners of United EcoEnergy Advisers, LLC, which serves as the investment adviser to United EcoEnergy Corp., a business development company focused on the alternative energy area. Mr. Mayblum and Mr. Donelan also are more than five percent shareholders in United EcoEnergy Corp., and Mr. Hipple, who was interim CEO/CFO of the Company, also serves as CFO of United EcoEnergy Corp. under a consulting agreement between that company and CF Consulting, LLC.
Item 14.
Item 14. Principal Accounting Fees and Services.
AUDIT FEES
	The aggregate fees billed for each of the fiscal years ended December 31, 2008 and 2007 for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's previously filed Forms 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years, were $10,749 and $11,082, respectively.
AUDIT RELATED FEES
	None
TAX FEES 	None
ALL OTHER FEES 	None
PRE-APPROVAL POLICIES AND PROCEDURES
	The Company Board of Director policy is to pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm. These services may include audit services, audit- related services, tax services and other services. Pre-approval is generally provided for up top one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to report periodically to the Audit Committee of the Board of Directors regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre- approval, and the fees for the services performed to date. The Audit Committee of the Board of Directors may also pre-approve particular services in a case- by-case basis. For all periods after the Company election to be treated as a BDC, all of these functions are undertaken by the independent Audit Committee.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
	The following exhibits are filed with this report, except those indicated as having previously been filed with the Securities and Exchange Commission and are incorporated by reference to another report, registration statement or form. As to any shareholder of record requesting a copy of this report, the Company will furnish any exhibit indicated in the list below as filed with this report upon payment to the Company of its expenses in furnishing the information. Any references to the "the Company" means American Development & Investment Fund, Inc. and its predecessor by name change, MSN Eagle Equity Group, Inc. Reference 1A.1 Amended Designation of Preferences for Series A Convertible Preferred Stock........................................................ 1
3.1	Certificate of Incorporation of the Company as filed with the 	Nevada Secretary of State on February 28, 1997 ........................2
3.4	Bylaws of the Company .................................................2
4.1	Specimen common stock certificate......................................2
10.1	1997 Compensatory Stock Option Plan of the Company.....................2
10.2	1997 Employee Stock Compensation Plan of the Company...................2
31 Certification of the Chief Executive and Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002..............3
32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ......................3
Reference
1 Filed as an Exhibit to the Proxy Statement dated July 21, 2006 2 Filed as an exhibit to the Registration Statement on Form 10SB-12G (File No. 0-27781) of the Registrant and incorporated by reference. 3 Filed herewith as an exhibit.
	Report of Independent Registered Public Accounting Firm............ 	Balance Sheets as of December 31, 2008 and 2007.................... 	Statements of Operations for the years ended December 31, 2008 and 2007....................................................... 	Statements of Changes in Stockholders' Equity (Deficit) for the 	 years ended December 31, 2008 and 2007......................... 	Statements of Cash Flows for the years ended December 31, 2008 and 2007........................................................... 	Notes to Financial Statements .....................................
FINANCIAL INFORMATION Item 1. Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of American Development & Investment Fund, Inc.
We have audited the accompanying balance sheets of American Development & Investment Fund, Inc. as of December 31, 2008 and 2007, and the related statements of operations, changes in stockholders? equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the company?s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company?s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Development & Investment Fund, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 7 to the financial statements, the Company has suffered recurring operating losses and has working capital and stockholders? deficits which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Berman Hopkins Wright & LaHam, CPAs and Associates, LLP
April 13, 2009 Winter Park, Florida
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. BALANCE SHEETS December 31, December 31, 2008	 2007 --------------- ----------------- Assets: Cash and cash equivalents $ 447 $ (41) ----------- ------------ Total Current Assets 447 (41) Other Assets: Investments in Portfolio Companies - - ----------- ------------ Total Assets $ 447 (41) =========== ============ Liabilities and Stockholders? Equity (Deficit) Liabilities: Accounts payable (including $550 To a related party $ 14,976 $ 90,702 Due to affiliate 3,550 7,950 ----------- ------------ Total current Liabilities 18,526 98,652 Long term Liabilities: - - ----------- ------------ Total Liabilities 18,526 98,652 ----------- ------------ Commitments and contingencies
Stockholders? Equity (Deficit): Common stock, par value $0.001 authorized 50,000,000 shares, issued 34,408,000 shares at December 31, 2007 and 30,283,200 at December 31, 2007 34,408 30,283 Convertible preferred stock, par value $0.001, authorized 5,000,000 shares, issued 0 shares at December 31, 2008 and 1,000,000 shares at December 31, 2007 - 1,000
Additional paid-in capital 202,164 85,665 Accumulated deficit (254,651) (215,641) ------------ ------------- Total Stockholders? Equity (Deficit) (18,079) (98,693) ------------ ------------- Total Liabilities and Stockholders? Equity (Deficit) $ 447 $ (41) =========== =========== Net Asset value per common share $ (0.00053) $ (0.00326)
The accompanying notes are an integral part of these financial statements.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. SCHEDULE OF INVESTMENTS December 31, 2008
Portfolio Industry Amount Cost Fair % of Investments or Number Value Net assets - ------------------- --------- ----------- -------- --------- ----------- -- -- -- $ - $ - -
-------- --------- ----------- Total $ - $ - - ======== ========= ===========
The accompanying notes are an integral part of these financial statements.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. STATEMENTS OF OPERATIONS
For the years ended December 31, 2008 2007 ---------- ----------- Investment income: Interest income $ - $ - Dividend income - - Other income - - ---------- ----------- Total income - - Operating expenses: Investment advisory fees Base fee - - Incentive fee - - Capital gains fee - - ---------- ----------- Total investment advisory fees - - General & administrative: Consulting expense-related party 22,500 85,000 Rent expense-related party 5,200 5,400 Professional fees 10,749 11,082 Transfer agent 350 2,245 Other expenses 211 477 ---------- ----------- Total operating costs 39,010 104,204 ---------- ----------- Net investment loss (39,010) (104,204) ---------- ----------- Net realized income from disposal of investments - - Net unrealized appreciation in investments - - ---------- ----------- Net decrease in stockholders? equity resulting from operations $ (39,010) $ (104,204) ========== =========== Basic and diluted net decrease in stockholders? equity per common share resulting from operations $ (0.0012) $ (0.0034) ========== =========== Weighted number of common shares outstanding-basic 33,049,593 30,283,200 =========== =========== Weighted number of common shares outstanding-diluted 33,049,593 45,283,200 =========== ===========
The accompanying notes are an integral part of these financial statements.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. STATEMENT OF CHANGES IN STOCKHOLDERS? EQUITY (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Deficit 							 Additional Accumulated 	 	 Common Stock Preferred Stock Paid in from Shares Amount Shares Amount Capital Inception Total ---------------------------------------------------------------- Balances, 12/31/ 2006 30,150,000 30,150 1,000,000 1,000 45,838 (111,437) (34,449) Issuance of stock 133,200 133 - - 39,827 - 39,960 Net loss - - - - (104,204) (104,204) - ------------------------------------------------------------------ Balances, 12/31/2007 30,283,200 30,283 1,000,000 1,000 85,665 (215,641) (98,693) Issuance of stock 124,800 125 - - 31,075 - 31,200 Conversion of preferred 4,000,000 4,000 (1,000,000)(1,000) (3,000) - - Cancellation of payable - - - - 88,424 - 88,424 Net loss - - - - - (39,010) (39,010) ------------------------------------------------------------------ Balances, 12/31/2008 34,408,000 34,408 - - 202,164 (254,651) (18,079) ==================================================================
The accompanying notes are an integral part of these financial statements
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. STATEMENTS OF CASH FLOWS
For the years ended December 31, 2008 December 31, 2007 ----------------- ---------------- Cash flows from operating activities:
Net decrease in stockholders? equity from operations $ (39,010) $ (104,204) Adjustments to reconcile net decrease in stockholders? equity from operations to net cash used by operating activities: Accounts payable 12,698 89,627 Due to affiliate (4,400) 2,500 ----------- ---------- Net cash used by operating activities (30,712) (12,077) ----------- ---------- Cash flow from financing activities: Net proceeds from issuance of common stock 31,200 39,960 Subscription deposit - (39,960) ----------- ---------- Net cash provided by financing activities 31,200 - ----------- ----------- Net increase (decrease) in cash 488 (12,077) Cash, beginning of period (41) 12,036 ----------- ---------- Cash, end of period $ 447 $ (41) =========== ===========
Supplemental information
Non-cash investing and financing Transactions
Debt contributed to capital $ 88,424 $ -
The accompanying notes are an integral part of these financial statements.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 1. Organization and Financial Statement Presentation
American Development & Investment Fund, Inc. (the Company) a Nevada corporation, was organized on February 28, 1997 and is a closed-end investment company that filed an election to be treated as a business development company (BDC) under the Investment Company Act of 1940, (the 1940 Act) in March 2006.
As a BDC, the company is subject to the filing requirements of the Securities Exchange Act of 1934 and has elected to be subject to Sections 55 to 65 of the 1940 Act, which apply only to BDCs. The Company is not a registered investment company under the 1940 Act, however, and is not required to file the semi-annual and annual reports required to be filed by registered investment companies under Section 30 of the 1940 Act. As a BDC, the Company also is not eligible to file its periodic reports under the 1934 Act
as a small business issuer, and therefore files its periodic reports on applicable Forms 10-Q and 10-K, rather than Forms 10-KSB or 10-QSB. As a BDC, the Company also is subject to the normal financial reporting requirements of Regulation S-X issued by the SEC, but is not subject to Section 6 of Regulation S-X, which provides specific rules for financial reporting of registered investment companies.
The Company has not chosen to focus on investments in companies in any particular market or industry, but expects to invest, under normal circumstances, at least 80 percent of its net assets (including the amount of any borrowings for investment purposes) in qualified portfolio companies. At December 31, 2008, the Company had no net assets invested in portfolio companies.
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for financial information and the instructions to Form 10-K, including Regulation S-X. As a BDC, and therefore as a non-registered investment company, the Company is subject to the normal financial reporting rules of Regulation S-X, as adopted by the SEC, in accordance with Regulation S-X 5.01. It is specifically not subject to Section 6 of Regulation S-X, governing the financial reporting of registered investment companies. The accompanying financial reports have been prepared in accordance with the requirements of Regulation S-X, as explained and interpreted in the Audit and Accounting Guide for Investment Companies of the American Institute of Certified Public Accountants (May 1, 2008)(the Audit Guide).
In March, 2006, the Company implemented a 100 for 1 forward split of its common shares. The stock split was given retroactive treatment in the accompanying financial statements.
No common shares were issued during the quarter ending December 31, 2008. A total of 124,800 shares were issued during the year ended December 31, 2008.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 2. Significant Accounting Policies
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported period. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ.
The following are significant accounting policies consistently applied by the Company and are based on Chapter 7 of the Audit Guide, as modified by Appendix A thereof:
Investments:
(a) Security transactions are recorded on a trade-date basis.
(b) Valuation:
(1) Investments for which market quotations are readily available are valued at such market quotations.
(2) Short-term investments which mature in 60 days or less, such as U.S. Treasury bills, are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of the difference between the principal amount due at maturity and cost. Short-term securities which mature in more than 60 days are valued at current market quotations by an independent pricing service or at the mean between the bid and ask prices obtained from at least two brokers or dealers (if available, or otherwise by a principal market maker or a primary market dealer). Investments in money market mutual funds are valued at their net asset value as of the close of business on the day of valuation.
(3) It is expected that most of the investments in the Company?s portfolio will not have readily available market values. Debt and equity securities whose market prices are not readily available are valued at fair value, with the assistance of an independent valuation service, using a valuation policy and a consistently applied valuation process which is under the direction of our board of directors.
The factors that may be taken into account in fairly valuing investments include, as relevant, the portfolio company ability to make payments, its estimated earnings and projected discounted cash flows, the nature and realizable value of any collateral, the financial environment in which the portfolio company operates, comparisons to securities of similar publicly traded companies and other relevant factors. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of these investments may differ significantly from the values that would have been used had a ready market existed for such investments, and any such differences could be material. AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 2. Significant Accounting Policies (continued)
As part of the fair valuation process, the Audit Committee of the Company will review the preliminary evaluations prepared by the Investment Advisor engaged by the Board of Directors, as well as managements valuation recommendations and the recommendations of the Investment Committee.
Management and the Investment Advisor will respond to the preliminary evaluation to reflect comments provided by the Audit Committee. The Audit Committee will review the final valuation report and managements valuation recommendations and make a recommendation to the Board of Directors based on its analysis of the methodologies employed and the various valuation factors as well as factors that the Investment Advisor and management may not have included in their evaluation processes. The Board of Directors then will evaluate the Audit Committee recommendations and undertake a similar analysis to determine the fair value of each investment in the portfolio in good faith.
(c) Realized gains or losses on the sale of investments are calculated using the specific identification method.
(d) Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis.
(e) Dividend income is recorded on the ex-dividend date.
(f) Loan origination, facility, commitment, consent and other advance fees received by us on loan agreements or other investments are accreted into income over the term of the loan.
Federal and State Income Taxes:
The Company has not elected to be treated as, and is not, a regulated investment company and does not presently intend to comply with the requirements of the Internal Revenue Code of 1986 (the Code), applicable to regulated investment companies. A regulated investment company is required to distribute at least 90% of its investment company taxable income to shareholders, which the Company does not expect to do for the foreseeable future. Therefore, the Company must make appropriate provision for income taxes in accordance with SFAS 109, Accounting for Income Taxes, using the liability method, which requires the recognition of deferred assets and liabilities for the expected future tax consequences of temporary differences between carry amounts and tax basis of assets and liabilities. At December 31, 2008 the Company has approximately $255,000 of net operating loss carry-forwards available to affect future taxable income and has established a valuation allowance equal to the tax benefit of the net operating loss carry-forwards as realization of the asset is not assured. The net operating loss carry-forwards may be limited under the change of control provisions of the Internal revenue Code, Section 382.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 2. Significant Accounting Policies (continued)
The Company applies the provisions of FASB, Interpretation No. 48, or FIN 48, ?Accounting for Uncertainty in Income Taxes ? an Interpretation of FASB Statement 109.? FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. When applicable, the Company will include interest and penalties related to uncertain tax positions in income tax expense.
Dividends and Distributions:
Dividends and distributions to common stockholders will be recorded on the ex-dividend date. The amount, if any, to be paid as a dividend will be approved by the board of directors each quarter and will be generally based upon managements estimates of our earnings for the quarter and our investment needs. Net realized capital gains, if any, will be reviewed at least annually as part of any distribution determination.
Cash and Equivalents:
For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Concentrations of Credit Risk:
Financial instruments which potentially expose the Company to concentrations of credit risk consist principally of cash which is insured by the FDIC up to balances of $250,000. The Company maintains its cash in a bank deposit account which, at times, may exceed federally insured limits. At December 31, 2008, the Company deposits did not exceed FDIC insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
Offering Costs:
Offering costs are expensed as incurred
Consolidation:
As an investment company, the Company will only consolidate subsidiaries which are also investment companies. At December 31, 2008, the Company did not have any consolidated subsidiaries.
Financial instruments: The fair values of all financial instruments approximate their carrying values. AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 2. Significant Accounting Policies (continued)
Recent Accounting Pronouncements
In September 2006, the FASB issued FAS No. 157, Fair Value Measurements, which establishes a framework for reporting fair value and expands disclosure about fair value measurements. FAS 157 is effective for our 2008 fiscal year. The adoption of this statement did not have a material effect on the Company's financial statements.
In February 2007, the FASB issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115. FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. FAS 159 is effective for fiscal years after November 15, 2007. The adoption of this statement did not have a material effect on the Company's financial statements.
In December, 2007, the FASB issued FAS No. 141(R), Business Combinations, and SFAS No. 160, Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. FAS No. 141(R) is required to be adopted concurrently with SFAS No. 160. These standards are effective for fiscal years beginning after December 15, 2008 and will apply prospectively to business combinations completed on or after that date. Early adoption is prohibited. FAS 141(R) requires changes in accounting for acquisitions and FAS 160 will change the accounting for minority interests. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
In May 2008, the FASB issued FAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles". FAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles". The adoption of this statement is not expected to have a material effect on the Company's financial statements.
Note 3. Portfolio Investments
As required by the 1940 Act, we will classify our investments by level of control. As defined in the 1940 Act, control investments are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally viewed to exist when a company or individual owns 25% or more of the voting securities of an investee company. Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist through ownership of an amount greater than 5% but less than 25% of the voting securities of the investee company. The Company currently has no controlled or affiliated investments.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 4. Related Party Agreements and Transactions.
Investment Advisory Agreement
The Company has entered into an Investment Advisory Agreement with American Development & Investment Advisors, LLC (the Investment Advisor) under which the Investment Advisor, subject to the overall supervision of the board of directors of the Company, will manage the day-to-day operations of, and provide investment advisory services to, the Company. American Development & Investment Advisors, LLC is owned equally by Patrick Donelan and Adam Mayblum. Mr. Mayblum and Mr. Donelan are also the equal owners of Enterprise Partners, LLC, a more than 10 percent Common Stockholder at the end of the year. Mr. Mayblum also serves as a director of the Company.
For providing these services the Investment Advisor will receive a fee from the Company, consisting of two components--a base management fee and an incentive fee. The base management fee will be calculated at an annual rate of 2.00% on the gross assets of the Company (including amounts borrowed). The base management fee is payable quarterly in arrears based on the average value of the Company?s gross assets at the end of the two most recently completed calendar quarters and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. Base management fees for any partial month or quarter will be appropriately pro rated.
Under the terms of the original Agreement, the Base Management Fee would not be lower than $25,000 per month for the first two years of the term of the Agreement; however, the Investment Advisor agreed with the Company to eliminate the minimum fee, and the Company amended the Agreement accordingly.
The Amended Investment Advisory Agreement was submitted to the shareholders of the Company for approval on June 30, 2006. The common shareholders, other than Enterprise Partners which abstained, unanimously approved the Amended Investment Advisory Agreement and the appointment of American Development & Investment Advisers, LLC as the investment adviser for the Company.
No investment advisory fees have been accrued for the year ended December 31,
Managerial Assistance
As a business development company, we will offer, and provide upon request, managerial assistance to certain of our portfolio companies. This assistance could involve monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. The Company expects to receive fee income for providing these services.
AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 5. Stockholders? Equity (Deficit).
The following table reflects the changes in the stockholders? equity (deficit) of the Company from December 31, 2006 to December 31, 2008:
Deficit 							 Additional Accumulated 	 	 Common Stock Preferred Stock Paid in from Shares Amount Shares Amount Capital Inception Total ---------------------------------------------------------------- Balances, 12/31/ 2006 30,150,000 30,150 1,000,000 1,000 45,838 (111,437) (34,449) Issuance of stock 133,200 133 - - 39,827 - 39,960 Net loss - - - - (104,204) (104,204) - ------------------------------------------------------------------ Balances, 12/31/2007 30,283,200 30,283 1,000,000 1,000 85,665 (215,641) (98,693) Issuance of stock 124,800 125 - - 31,075 - 31,200 Conversion of preferred 4,000,000 4,000 (1,000,000)(1,000) (3,000) - - Cancellation of payable - - - - 88,424 - 88,424 Net loss - - - - - (39,010) (39,010) ------------------------------------------------------------------ Balances, 12/31/2008 34,408,000 34,408 - - 202,164 (254,651) (18,079) ==================================================================
In April, 2008, the Series A Convertible Preferred Stock automatically converted into 4 million shares of common stock, as a result of which, there were then 34,283,200 shares of common stock and no shares of preferred stock issued and outstanding. A total of 124,800 shares were issued during the second and third quarters of 2008 for consideration equal to $31,200 to unrelated parties in private transactions. In addition, an account payable from a related party totaling $88,424 was contributed to capital during 2008.
Note 6 FINANCIAL HIGHLIGHTS
Financial Highlights
The following is a schedule of financial highlights for the years ended December 31, 2008 and December 31, 2007:
CHANGES IN NET ASSET VALUE For the years ended December 31, 2008 December 31, 2007 ---------------- ----------------- Net asset value at beginning of period (1) $ (0.00326) $ (0.00114) Proceeds from stock sales 0.00103 0.00132 Conversion of preferred stock 0.00026 - Cancellation of payable 0.00257 - Net investment income (0.00113) (0.00344) Net unrealized appreciation - - ------------- -------------- Net asset value, end of period (2) $ (0.00053) $ (0.00326)
(1) Financial highlights as of December 31, 2008 and December 31, 2007 are based on 34,283,000 and 30,283,200 common shares outstanding, respectively. AMERICAN DEVELOPMENT & INVESTMENT FUND, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2008 and 2007
Note 6. FINANCIAL HIGHLIGHTS (continued)
(2) Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share in each period. The total return is not annualized.
Note 7 Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company?s financial position and operating results raise substantial doubt about the Company?s ability to continue as a going concern, as reflected by the accumulated deficit of $254,641 and recurring net losses. The ability of the Company to continue as a going concern is dependent upon acquiring suitable portfolio investments and obtaining additional capital and financing. Management?s plan in this regard is to acquire portfolio investment operating entities and secure financing and operating capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
SIGNATURES
	In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereto duly authorized individual.
Dated April 14, 2009 					American Development & Investment Fund, Inc.
					 /s/ Robert Hipple 					By.................................... 						Robert Hipple, Former Interim Chief Executive Officer
	In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
	Name				 Title		 Date
/s/ Robert Hipple Former ............................ Director, and Interim	 April 14, 2009 	 Robert Hipple Chief Executive Officer
/s/ David Dallow ............................ Director	 	April 14, 2009 	 David Dallow
/s/ Adam Mayblum		Director			April 14, 2009 ............................ 	 Adam Mayblum
/s/ David Brant 	Director			April 14, 2009 ............................ David Brant
/s/ John Kelly 	Director				April 14, 2009 ............................ 	 John Kelly