FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
Report for six month period ending: / / (a)
or fiscal year ending: 06/30/11 (b)
Is this a transition report? (Y/N) N
Is this an amendment to a previous filing? (Y/N) N
Those items or sub-items with a box "[X]" after the item number should be
completed only if the answer has changed from the previous filing on this form.
1. A. Registrant Name: Waterside Capital Corporation
B. File Number: 811-8387
C. Telephone Number: 757-626-1111
2. A. Street: 2505 Cheyne Walk
B. City: Virginia Beach C. State: VA D. Zip Code: 23454 Zip Ext:
E. Foreign Country: Foreign Postal Code:
3. Is this the first filing on this form by Registrant? (Y/N) N
4. Is this the last filing on this form by Registrant? (Y/N) N
5. Is Registrant a small business investment company (SBIC)? (Y/N) Y
[If answer is "Y" (Yes), complete only items 89 through 110.]
6. Is Registrant a unit investment trust (UIT)? (Y/N) N
[If answer is "Y" (Yes) completes only items 111 through 132.]
7. A. Is Registrant a series or multiple portfolio company? (Y/N) N
[If answer is "N" (No), go to item 8.]
B. How many separate series or portfolios did Registrant have at the end of
the period? ________________
01
If filing more than one
Page 37, "X" box: [_]
For period ending 06/30/11
File number 811-8387
SMALL BUSINESS INVESTMENT COMPANIES
INVESTMENT ADVISER
89. A. [X] Adviser Name (If any):____________________________________________
B. [X] File Number: 801- __________
C. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
[X] Foreign Country: ______________ Foreign Postal Code: _____________
89. A. [X] Adviser Name (If any):____________________________________________
B. [X] File Number: 801- __________
C. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
[X] Foreign Country: ______________ Foreign Postal Code: _____________
TRANSFER AGENT
90. A. [X] Transfer Agent Name (If any):_____________________________________
B. [X] File Number: __________ - __________
C. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
[X] Foreign Country: ______________ Foreign Postal Code: _____________
90. A. [X] Transfer Agent Name (If any):_____________________________________
B. [X] File Number: __________ - __________
C. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
[X] Foreign Country: ______________ Foreign Postal Code: _____________
INDEPENDENT PUBLIC ACCOUNTANT
91. A. [X] Accountant Name:__________________________________________________
B. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
C. [X] Foreign Country: ______________ Foreign Postal Code: _____________
91. A. [X] Accountant Name:__________________________________________________
B. [X] City: _____________ State: _________ Zip Code: ____ Zip Ext.:_____
C. [X] Foreign Country: ______________ Foreign Postal Code: _____________
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If filing more than one
Page 38, "X" box: [_]
For period ending 06/30/11
File number 811-8387
CUSTODIAN
92. A. [X] Custodian: Small Business Administration
B. [X] City: Washington State: D.C. Zip Code: 20416 Zip Ext:___________
C. [X] Foreign Country: ______________ Foreign Postal Code: ___________
D. [X] Mark one of the following with an "X":
TYPE OF CUSTODY
Member Nat'l Foreign Insurance Co.
Bank Sec. Exchg. Self Custodian Sponsor
Sec. 17(f)(1) Rule 17f-l Rule 17f-2 Rule I7f-5 Rule 26a-2 Other
------------- ------------ ----------- ----------- ------------- X
NOTE: If self-custody, give name of safekeeping depository and location
of assets in sub-items 92A and 92B.
E. [X] Does Registrant's custodian maintain some or all of
registrant's securities in a central depository or Y
book-entry system pursuant to Rule 17f-4? (Y/N)______ _____
Y/N
93. [X] Does Registrant's adviser(s) have advisory clients other
than investment companies? (Y/N)__________________________ _____
Y/N
94. Family of investment companies information:
A. [X] Is Registrant part of a family of investment companies?
(Y/N)________________________________________________ _____
Y/N
B. [X] If "Y" (Yes) state the number of registered management
investment companies in the family:__________________ _____
(NOTE: count as a separate company each series of a series
company and each portfolio of a multiple portfolio
company; exclude all series of unit investment trusts
from this number.)
C. [X] Identify the family using 10 letters:________________
(NOTE: In filing this form, use this identification
consistently for all investment companies in the
family including any unit investment trusts. This
designation is for purposes of this form only.)
D. [X] Is Registrant a wholly-owned subsidiary of a business
development company ("BDC")? (Y/N)___________________ _____
Y/N
E. [X] If "Y" (Yes), identify the BDC as follows:
BDC name:
File Number: 2- or 33-
38
If filing more than one
Page 39, "X" box: [_]
For period ending 06/30/11
File number 811-8387
95. Sales, repurchases, and redemptions of Registrant's securities during
the period:
Number of Net
Shares or Consideration
Principal Received
Amount of or Paid
Debt ($000's ($000's
Class of Security omitted) omitted)
--------------------------------------------- ------------ -------------
Common Stock:
A. [X] Sales ___________ $___________
B. [X] Repurchases ___________ $___________
Preferred Stock:
C. [X] Sales ___________ $___________
D. [X] Repurchases and redemptions ___________ $___________
Debt Securities:
E. [X] Sales $___________ $___________
F. [X] Repurchases and redemptions $___________ $___________
96. Securities of Registrant registered on a National Securities Exchange or
listed on NASDAQ:
CUSIP or Ticker
Title of each class of securities NASDAQ No. Symbol
------------------------------------ ---------- ------
A. [X] ____________________________________ ____________ ____________
B. [X] ____________________________________ ____________ ____________
C. [X] ____________________________________ ____________ ____________
39
If filing more than one
Page 40, "X" box: [_]
For period ending 06/30/11
File number 811-8387
FINANCIAL INFORMATION
97. A. How many months do the answers to items 97 and 98 cover? ____12 Months
For
period
covered
by this
form
($000's
omitted)
INCOME ---------
B. Net interest income__________________________________________ $ 779
C. Net dividend income__________________________________________ $ 1,211
D. Account maintenance fees_____________________________________ $_______
E. Net other income_____________________________________________ $ 232
EXPENSES
F. Gross advisory fees__________________________________________ $_______
G. Gross administrator(s) fees__________________________________
(Negative answers allowed for 97H through 97S) $_______
H. Salaries and other compensation______________________________ $ 241
I. Shareholder servicing agent fees_____________________________ $_______
J. Custodian fees_______________________________________________ $_______
K. Postage______________________________________________________ $_______
L. Printing expenses____________________________________________ $ 2
M. Directors' fees______________________________________________ $ 4
N. Registration fees____________________________________________ $_______
O. Taxes________________________________________________________ $_______
P. Interest_____________________________________________________ $ 817
Q. Bookkeeping fees paid to anyone performing this service______ $_______
R. Auditing fees________________________________________________ $ 35
S. Legal fees___________________________________________________ $ 102
40
If filing more than one
Page 41, "X" box: [_]
For period ending 06/30/11
File number 811-8387
For period
covered by
this form
($000's
Expenses (Negative answers allowed on this screen for omitted)
97T through 97W and 97Z only) ----------
T. Marketing/distribution payments including payments
pursuant to a Rule 12b-l plan _________________________ $__________
U. Amortization of organization expenses _________________ $__________
V. Shareholder meeting expenses __________________________ $__________
W. Other expenses ________________________________________ $ 1,538
X. Total expenses ________________________________________ $ 2,739
Y. Expense reimbursements ________________________________ $__________
Z. Net investment income _________________________________ $ <517>*
AA. Realized capital gains ________________________________ $__________
BB. Realized capital losses _______________________________ $ 96
CC. 1. Net unrealized appreciation during the period ______ $ 1,630
2. Net unrealized depreciation during the period ______ $__________
DD. Total income dividends for which record date passed
during the period _____________________________________ $__________
EE. Total capital gains distributions for which record date
passed during the period ______________________________ $__________
98. Payments per share outstanding during the entire current
period:
A. Dividends from net investment income __________________ $__________**
NOTE: Show in fractions of a cent if so declared.
B. Distributions of capital gains ________________________ $__________**
C. Other distributions ___________________________________ $__________
NOTE: Show in fractions of a cent if so declared.
* Negative answer permitted in this field.
** Items 98A and 98B should be of the form mn.nnnn (where n = integer).
41
If filing more than one
Page 42, "X" box: [_]
For period ending 06/30/11
File number 811-8387
As of the
end of
current
reporting
period
(000's
omitted)
99. Assets, liabilities, shareholders' equity: ---------
A. Cash_______________________________________________________ $ 698
B. Repurchase agreements______________________________________ $_______
C. Short-term debt securities other than repurchase
agreements_________________________________________________ $_______
D. Long-term debt securities including convertible debt_______ $ 4,876
E. Preferred, convertible preferred and adjustable rate
preferred stock____________________________________________ $ 5,056
F. Common stock_______________________________________________ $ 973
G. Options on equities________________________________________ $ 4,367
H. Options on all futures_____________________________________ $_______
I. Other investments__________________________________________ $ 297
J. Receivables from portfolio instruments sold________________ $_______
K. Receivables from affiliated persons________________________ $_______
L. Other receivables__________________________________________ $ 463
M. All other assets___________________________________________ $ 4,449
N. Total assets_______________________________________________ $ 21,179
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If filing more than one
Page 43, "X" box: [_]
For period ending 06/30/11
File number 811-8387
As of
the end of
current
reporting
period
(000's
omitted
except
for per
share
amounts
and number
of accounts)
--------------
O. Payables for portfolio instruments purchased_________ $____________
P. Amounts owned to affiliated persons__________________ $____________
Q. Senior long-term debt________________________________ $ 11,200
R. All other liabilities________________________________ $ 5,221
S. Senior equity________________________________________ $____________
T. Net assets of common shareholders____________________ $ 4,755
U. Number of shares outstanding_________________________ $ 1,916
V. Net asset value per share (to nearest cent)__________ $ 2.48*
W. Mark-to-market net asset value per share for money
market funds only (to 4 decimals)____________________ $__________**
X. Total number of shareholder accounts_________________ 320
Y. Total value of assets in segregated accounts_________ $____________
100. Monthly average net assets during current reporting
period ($000's omitted)__________________________________ $ 3,938
101. Market price per share at end of period__________________ $ .21
* Net asset value per share must be of the form nnn.nn (where n = integer).
** Value must be of the form nnn.nnnn (where n = integer).
43
If filing more than one
Page 44, "X" box: [_]
For period ending 06/30/11
File number 811-8387
102. A. Is the Registrant filing any of the following
attachments with the current filing of Form Y
N-SAR?________________________________________________ __________
Y/N
NOTE: If answer is "Y" (Yes), mark those items below
being filed as an attachment to this form___________ __________
or incorporated by reference. Y/N
B. Matters submitted to a vote of security holders_______
C. Policies with respect to security investments_________ __________
D. Legal proceedings_____________________________________ __________
E. Changes in security for debt__________________________ __________
F. Defaults and arrears on senior securities_____________ __________
G. Changes in control of Registrant______________________ __________
H. Terms of new or amended securities____________________ __________
I. Revaluation of assets or restatement of capital share
account_______________________________________________ __________
J. Changes in Registrant's certifying accountant_________ __________
K. Y
Changes in accounting principles and practices________ __________
L. Mergers_______________________________________________ __________
M. Actions required to be reported pursuant to Rule 2a-7_ __________
N. Transactions effected pursuant to Rule 10f-3__________ __________
0. Information required to be filed pursuant to existing
exemptive orders______________________________________ __________
Attachment Information (Cont. on Screen 53)
44
If filing more than one
Page 45, "X" box: [_]
For period ending 06/30/11
File number 811-8387
Attachment Information (Cont. from Screen 52)
102. P. 1. Exhibits_____________________________________ __________
Y/N
2. Any information called for by instructions to
sub-item 102 P2______________________________ __________
Y/N
3. Any information called for by instructions to
sub-item 102 P3______________________________ __________
Y/N
103. [X] Does the Registrant have any wholly-owned investment
company subsidiaries whose operating & financial data
are consolidated with that of Registrant in this N
report? (Y/N)________________ __________
Y/N
[If answer is "N" (No), go to item 105]
104. [X] List the "811" numbers and names of Registrant's
wholly-owned investment company subsidiaries
consolidated in this report.
811 Numbers Subsidiary Name
----------- ---------------------------------------------
45
If filing more than one
Page 46, "X" box: [_]
For period ending 06/30/11
File number 811-8387
ANNUAL SUPPLEMENT
Page 53 is to be filed only once each year at the end of Registrant's fiscal
year.
105. Fidelity bond(s) in effect at the end of the period:
A. [X] Insurer Name:
B. [X] Second Insurer:
C. [X] Aggregate face amount of coverage for Registrant on
all bonds on which it is named as an insured ($000's
omitted) ____________________________________________ $ 5,000
106. A. [X] Is the bond part of a joint fidelity bond(s) shared
with other investment companies or other N
entities? ___________________________________________ _______
Y/N
B. [X] If the answer to 106A is "Y" (Yes), how many other
investment companies or other entities are covered by
the bond? ___________________________________________ _______
NOTE: Count each series as a separate investment
company.
107. A. [X] Does the mandatory coverage of the fidelity bond have Y
a deductible? _______________________________________ _______
Y/N
B. [X] If the answer to 107A is "Y" (Yes), what is the amount
of the deductible? __________________________________ $ 25
108. A. [X] Were any claims with respect to this Registrant filed N
under the bond during the period? ___________________ _______
Y/N
B. [X] If the answer to 108A is "Y" (Yes), what was the total
amount of such claim(s)? ____________________________ _______
109. A. [X] Were any losses incurred with respect to this
Registrant that could have been filed as a claim under N
the fidelity bond but were not? _____________________ _______
Y/N
B. [X] If the answer to sub-item 109A is "Y" (Yes), what was
the total amount of such losses? ($S000's
omitted) ____________________________________________ $______
110. A. [X] Are Registrant's officers and directors covered as
officers and directors of Registrant under any errors
and omissions insurance policy owned by the Registrant Y
or anyone else? _____________________________________ _______
Y/N
B. [X] Were any claims filed under such policy during the N
period with respect to Registrant? __________________ _______
Y/N
46
SIGNATURE PAGE
The following form of signature shall follow items 79, 85, 88, 104, 110 or
132 as appropriate.
This report is signed on behalf of the registrant (or depositor or trustee).
City of: Virginia Beach State of: Virginia Date: February 29, 2012
Name of Registrant, Depositor, or Trustee:
Franklin P. Earley, President and CEO Julie H. Stroh, CFO
-------------------------------------- --------------------------------
By (Name and Title): Witness (Name and Title):
SEC'S COLLECTION OF INFORMATION
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently valid
control number. Filing of this Form is mandatory. Section 30 of the
Investment Company Act of 1940 ("1940 Act") and the rules thereunder, and
Sections 13 and 15(d) of the Securities Exchange Act of 1934 require
investment companies to file annual and periodic reports with the
Commission. The Commission has specified Form N-SAR for reports for
investment companies. The Commission staff uses the information in
performing inspections of investment companies, selectively reviewing
registration documents filed under the 1940 Act and the Securities Act of
1933 and conducting studies and other types of analyses necessary to keep
the Commission's regulatory program for investment companies current in
relation to changing industry conditions. The information collected on Form
N-SAR is publicly available. Any member of the public may direct to the
Commission any comments concerning the accuracy of the burden estimate of
this Form and any suggestions for reducing the burden of the Form. This
collection of information has been reviewed by the Office of Management and
Budget in accordance with the clearance requirements of 44 U.S.C. (S)3507.
26
For Period Ending: 06/30/11
File Number: 811-8387
ITEM 102(K) CHANGES IN ACCOUNTING PRINCIPLES AND PRACTICES
The Company has gone from a going concern basis of accounting to a
liquidating basis of accounting. The Company adopted the liquidation basis of
accounting on September 1, 2010. The Company felt that an effective date of
July 1, 2010, the beginning of the fiscal year, was appropriate as opposed to
September 1, 2010, the effective date of the settlement agreement, because the
financial information from July 1, 2010 to September 1, 2010 was immaterial.
Under the liquidation basis of accounting, assets are stated at their estimated
net realizable value and liabilities are stated at their estimated settlement
amounts, which estimates will be periodically reviewed and adjusted as
appropriate. Statements of Net Assets in Liquidation and Changes in Net Assets
in Liquidation are the principal financial statements presented under the
liquidation basis of accounting. The valuations of assets at their net
realizable value and liabilities at their anticipated settlement amounts
represent estimates, based on present facts and circumstances associated with
carrying out the Plan of Dissolution. The actual values and costs associated
with carrying out the Plan of Dissolution are expected to differ from the
estimated amounts because of the inherent uncertainty and will be greater than
or less than the amounts recorded. Such differences may be material. In
particular, the estimates of the Company's expenses will vary with the length
of time it operates under the Plan of Dissolution. Accordingly, it is not
possible to predict the aggregate amount or timing of future distributions to
stockholders, as long as the plan is in effect, and no assurance can be given
that the amount of liquidating distributions to be received will equal or
exceed the estimate of net assets in liquidation.
The Company is required to estimate and accrue the expenses and revenues
associated with implementing and completing the Plan of Dissolution under the
liquidation basis of accounting. These amounts can vary significantly due to,
among other things, the economy, current financial conditions, interest
expense, fees for legal and other professional service providers, directors and
officers insurance costs, and miscellaneous other expenses partially offset by
estimated revenues from interest income and dividend income. The expenses and
revenue were estimated to be $5.2 million and $4.3 million respectively as of
June 30, 2011. Going forward, the Company's major expenses will be SBA interest
expense, management fees, legal and accounting fees and directors and officers
insurance. The company's major revenues will come from interest income and
dividend income. These estimates will be adjusted from time to time as
projections and assumptions change.