Becoming an operating company would allow New Comstock to acquire or develop, directly or through one or more subsidiaries, businesses in which New Comstock has no experience or operating history. There can be no assurance that New Comstock will be able to implement its proposed business plans or, if implemented, that they would be successful. It is not expected that New Comstock will be subject to claims from shareholders of the Company.

New Comstock is a newly formed company that has conducted no operations and has generated no revenues. Until it completes its initial acquisition, it will have no operations and will generate no operating revenues. In making a decision on whether to invest in New Comstock’s securities, investors should take into account not only the background of the management team, but also the special risks New Comstock faces as a blank check company, as well as the fact that any future public offering of shares will need to be conducted in compliance with Rule 419 under Securities Act.

New Comstock’s assets may be invested in relatively few companies to be owned as operating companies and/or assets that are not securities. At present, substantially all of the Fund’s assets are comprised of cash and cash equivalents with the exception of a small percentage of certain investment securities.

The strategy to be pursued by New Comstock following the approval of the Proposals and the completion of the Reorganization would involve acquiring one or more operating businesses and/or assets that are not securities and, to the extent permitted without being required to register as an investment company under the 1940 Act, investment securities, all of which may be less liquid than publicly traded securities.

The failure of the business or businesses New Comstock acquires or operates could have a significant adverse effect on New Comstock and its shareholders. The investment return to shareholders would be, in part, dependent upon the performance of one or a few operating businesses or assets that are not securities rather than a diversified portfolio of investment securities. Additionally, New Comstock could be more susceptible to economic and political developments than is currently the case. In addition to the general risks of concentration, there are specific risks attributable to concentration in the industries in which New Comstock may focus. New Comstock has not yet identified any specific industries or operating businesses in which it will focus its operations following the de-registration.

New Comstock may be unable to promptly sell one or more of the operating businesses in response to changing economic, financial and investment conditions. New Comstock cannot predict whether it will be able to sell any businesses for the price or on the terms set by it or whether any price or other terms offered by a prospective purchaser would be acceptable to it. New Comstock may be required to expend funds to correct defects or to make improvements to an operating business before it can be sold. New Comstock cannot give assurances that it will have funds available to correct those defects or to make those improvements. In acquiring an operating business, New Comstock may agree to transfer restrictions that materially restrict it from selling that business for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that business. These transfer restrictions may impede New Comstock’s ability to sell a business even if it deems it necessary or appropriate. New Comstock may also have joint venture investments in certain of its businesses and, consequently, its ability to control decisions relating to such businesses may be limited.

Following the approval of the Proposals and the de-registration as a registered investment company, current investment policy would change and New Comstock would no longer be required to invest any portion of its portfolio consistent with the current investment policy. Therefore, New Comstock could be subject to a greater degree of risk with respect to the financial stability and business operations of the business or businesses, which New Comstock may acquire.

There continues to be economic uncertainty, both domestically and globally. Continued concerns about the systemic impact of inflation, continuing economic issues in various European Union countries, energy costs, geopolitical issues, the availability and cost of credit and other macro-economic factors have contributed to increased market volatility and diminished expectations for the global economy and increased market uncertainty and instability. Turbulence in U.S. and international markets may adversely affect New Comstock’s financial condition, and the financial condition of investors. If these market conditions continue, they may have an adverse effect on New Comstock’s financial condition and results of its operations.

Investors can currently purchase or redeem shares of the Fund daily at the Fund’s net asset value. If the Proposals are approved and the Company is successful in de-registering as a registered investment company, it will no longer operate as an investment company and its shares will likely trade based on New Comstock’s operating performance, prospects, market factors and other factors investors consider when evaluating operating and holding companies, rather than based on net asset values. Accordingly, New Comstock shares may become illiquid and trade less frequently with more volatility than in the past. In addition, at this time, it is expected that shares of New Comstock would be quoted on the OTC Bulletin Board and in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC).

As a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), the Fund is required to distribute to its shareholders on an annual basis at least 90% of its ordinary income and realized short-term capital gains in excess of realized short-term capital losses, if any. If the Proposals are approved, New Comstock will not seek to qualify as a RIC and it intends to use its assets to acquire a controlling interest in one or more operating businesses and/or acquire assets that are not securities and, thereafter, to fund its operating businesses. As a result, it is expected that New Comstock will not pay dividends following the proposed de-registration. Accordingly, shareholders must rely on sales of their shares as the only way to realize a return on their investment and such return may be negative.

The Fund has qualified for and elected tax treatment under subchapter M of the Code as a RIC. A RIC, unlike an ordinary corporation, pays no federal income taxes on that portion of its annual income distributed to shareholders, provided that at least 90% of such income is so distributed. As a consequence of this special tax treatment, a RIC is required to act largely as a passive investment vehicle, limited in its scope of permissible investments and in its ability to manage directly such investments.

Following the approval of the Proposals and the commensurate change in the business to that of an operating company, New Comstock would cease to be taxed as a RIC and instead would be taxed as a C-corporation.

If taxed as a C-corporation for federal income tax purposes, the total net income would be subject to federal taxation at the corporate level at the current federal tax rate of 21%. To the extent that such income is distributed to shareholders, these distributions may also be subject to taxation at the shareholder level as ordinary income (generally, dividends; however, distributions would be taxed at the long-term capital gains rate if such distributions constitute “qualified dividend income” as defined in the Code and certain holding

In addition, as a RIC, the Fund is required to distribute substantially all of its income each year to shareholders. After it ceases to be taxed as a RIC, it will no longer be subject to this requirement, and the determination of whether to make distributions, if any, to shareholders will be made by the Board. Although no determination has yet been made as to New Comstock’s distribution policy, in the event these Proposals are approved, it is likely that the Board will determine that all of the working capital is required for its operations and that, accordingly, no distributions should be made for the foreseeable future. In that event, and for so long as such policy is in place, shareholders would receive no current income from their investment.

Many changes to tax law have recently been made pursuant to tax legislation signed into law on December 22, 2017 (the “2017 Tax Act”). The exact impact that the 2017 Tax Act will have on New Comstock and on each prospective investor is uncertain. Further changes to tax law could be made and many Treasury regulations are expected to be promulgated with respect to the 2017 Tax Act which could have unexpected effects on the tax treatment of an investment in New Comstock, including potentially with retroactive effect. Among the many changes, the 2017 Tax Act reduced the federal corporate income tax rate to 21% and included a new provision that requires certain accrual method taxpayers to include amounts in income no later than the time such amounts are reflected on certain financial statements. Prospective investors should consult with their tax advisors regarding the impact of this new provision.

Following shareholder approval of the Proposals, the Company intends to apply to the SEC for an order under Section 8(f) of the 1940 Act declaring that it has ceased to be an investment company and that its registration statement is no longer in effect, at such time as the Board determines it is appropriate and in the best interest of the Company. The Company will continue to operate as a RIC until the de-registration is effected. After reviewing the application, the SEC can require the Company to supply additional information, which may result in one or more amendments to the application. The SEC can on its own motion or on the motion of any interested party order a public hearing on the application. It cannot be stated with certainty whether or when the SEC will grant the application, and it is anticipated that it would take approximately three to four months from the date of filing to obtain a de-registration order. If the Fund is unable to de-register, the Board will evaluate other options including liquidation, a new portfolio management team or strategy, and a possible reorganization.

If the Proposals are approved and if, as a result of a change in the nature of the operations the SEC should approve de-registration under Section 8(f) of the 1940 Act, shareholders would no longer have the benefit of the significant regulatory protections provided by the 1940 Act.

Effects of the de-registration.   As a registered investment company, the Fund is subject to extensive regulation under the 1940 Act. The 1940 Act, among other things:

Upon approval by the shareholders and while the request for de-registration is pending with the SEC, the Adviser will manage the portfolio of investments with the objective to preserve capital. The Fund will not accept new investments but will allow redemptions during this period. During this time, the proposed management team, (as identified herein), will begin the process of identifying prospective operating businesses in which to invest to acquire a controlling interest. Upon issuance of an order of de-registration, the investment policies will cease to be effective and will no longer control the Fund’s affairs.

As noted herein, the Fund has accumulated significant capital loss carryforwards and that the capital loss carryforwards would be lost if the Fund was liquidated. New Comstock would seek to make investments in one or more operating businesses in which it would hold at least a majority voting interest, and that may provide income or an increase in value, that when sold, may be available to be offset by the accumulated capital loss carryforwards. There can be no assurance, however, that New Comstock will be successful in acquiring operating businesses or in producing earnings or realizing gains in order to maximize the utilization of its accumulated capital loss carryforwards, or that its participation in the management of operating businesses will be beneficial to such businesses. The federal tax rules applicable to the utilization of the accumulated capital loss carryforwards may impose further restrictions on the utilization of the capital loss carryforwards. In addition, capital loss carryforwards of New Comstock have a limited life and generally expire five years after accrual and can only be offset against capital gains. As a result, operating businesses that New Comstock acquires need to be able to generate capital gains as opposed to operating income in order to offset the capital loss carryforwards. This may affect the investable universe for New Comstock.

If the Proposals are approved, New Comstock will have substantial capital loss carryforwards under Section 1212 of the Code from previous taxable years to offset future capital gains. These capital loss carryforwards will be significant assets of New Comstock, which will succeed to the capital loss carryforwards if the Reorganization is approved and consummated, that could translate into significant future tax savings for New Comstock and its shareholders. However, Sections 382 and 383 of the Code (collectively, “Section 382”) would limit New Comstock’s ability to use the capital loss carryforwards fully if it experienced an “ownership change.” To reduce the risk of that occurring, New Comstock’s Delaware Organizational Documents contain provisions that are designed to prevent an ownership change from taking place without the directors’ prior approval by (i) limiting the ability of persons to beneficially own more than 4.9% of the outstanding shares and (ii) limiting the ability of persons who, following the

Capital loss carryforwards of New Comstock have a limited life and generally expire five years after accrual and can only be offset against capital gains.

New Comstock expects to make future acquisitions of operating businesses that, when sold, will provide an increase in value in order to utilize the accumulated capital loss carryforwards. New Comstock does not anticipate setting a minimum balance sheet threshold for any acquisition target. Nonetheless, New Comstock may not be successful in identifying and consummating suitable acquisitions that meet its criteria, which may impede its growth. New Comstock may encounter competition when it seeks to acquire operating businesses. Should New Comstock pay higher prices for operating businesses or other assets, its profitability may be reduced. New Comstock’s ability to acquire operating businesses on favorable terms may be constrained by the following additional risks:

In addition, because shareholders will be able to redeem shares until de-registration as a registered investment company is effectuated, New Comstock’s balance sheet available for business acquisitions may be significantly lower than the Fund’s current balance sheet.

If, within three years following the closing date of the Reorganization, New Comstock cannot invest at least 75% of its net asset value in operating businesses, the Board will consider available options, including liquidating New Comstock and distributing the net proceeds to the shareholders. It is important to note that it may take a prolonged period of time for New Comstock to distribute liquidating distributions to its shareholders and as a result, shareholders may have to wait a prolonged period of time to receive their distributions. If a shareholder is unwilling or unable to wait for New Comstock to pay out liquidating distributions, such shareholder may have to sell their shares at a loss.

As New Comstock acquires operating businesses, it will be required to integrate them into its then existing portfolio. An operating business may turn out to be less compatible with New Comstock’s growth strategy than originally anticipated, may cause disruptions in its operations or may divert management’s attention away from day-to-day operations, which could impair its results of operations.

New Comstock may encounter delays in the selection, or acquisition, of operating businesses which could adversely affect returns to shareholders. Shareholders could suffer delays in the distribution of cash dividends, if any, attributable to any such businesses.

The fair market value of a target business will be determined by our management team based upon standards generally accepted by the financial community, such as actual and potential sales, earnings, cash flow, book value, and the price for which comparable businesses have recently been sold. Other factors contributing to a determination of the fair market value may include timing, the reputation of the target business and the anticipated costs of completing the transaction.

We will not obtain an opinion from an unaffiliated third party regarding the fair market value of a target business we select at the time of any transaction. We are also not required to obtain an opinion from an unaffiliated third party indicating that the price we plan to pay is fair to our shareholders from a financial perspective unless the target is affiliated with our officers, directors, special advisors, existing shareholders or their affiliates. There are no guarantees that the judgment of our management team as to the fair market value of any target business will meet the criteria that independent investment banking firms or other blank check companies may use.

The Delaware Organizational Documents generally will restrict any person from attempting to purchase or otherwise acquire (an “Acquisition”), without the Board’s prior approval, any direct or indirect interest in the shares (or, if issued in the future, options, warrants, or other rights to acquire shares or securities convertible or exchangeable into them), if the Acquisition would either (1) cause the person to own (within the meaning of Section 382) more than 4.9% of the shares (any such person being referred to as a “Restricted Holder,” and such shares greater than 4.9% being referred to as “Excess Shares”) or (2) increase the percentage of the shares a Restricted Holder owns. For purposes of determining the existence and identity of, and the amount of shares owned by, any shareholder, New Comstock is entitled to rely conclusively on, in addition to its actual knowledge of the ownership of its shares, the existence and absence of filings of Schedules 13D and 13G (or any similar schedules) as of any date.

In seeking to enforce more effectively the foregoing acquisition restrictions, the Delaware Organizational Documents also provide that a Restricted Holder will be required, prior to the date of any proposed Acquisition of Excess Shares, to request in writing (a “Request”) that the Board of Directors review and authorize the proposed Acquisition. Any determination made by the Board of Directors whether to authorize a proposed Acquisition of Excess Shares will be made in their sole discretion and judgment. Any person who makes a Request will be required to reimburse New Comstock for all reasonable costs and expenses incurred in making that determination.

The Delaware Organizational Documents provide that any Acquisition attempted to be made in violation of the Share Limitations will be null and void ab initio to the fullest extent permitted by law and contains detailed terms that seek to achieve that result. They also provide that any person who knowingly violates the Share Limitations, or any persons in the same control group with such a person, shall be liable for, and shall indemnify and hold harmless against, any and all damages suffered as a result of the violation, including damages resulting from a reduction in or elimination of the ability to use the capital loss carryforwards and attorneys’ and auditors’ fees incurred in connection with such violation.

We believe the risks associated with our investments will be more acute during periods of economic slowdown or recession due to the adverse impact caused by various factors, including inflation, deflation, increased unemployment, volatile energy costs, geopolitical issues, the availability and cost of credit, market volatility and weakened business and consumer confidence. This difficult operating environment caused by an economic slowdown or recession could have an adverse impact on the ability of the operating businesses to operate profitably, which is likely to harm their financial condition.

This proxy statement/prospectus is furnished in connection with the solicitation of proxies by the Board of Directors for use at the Special Meeting of shareholders to be held on October 16, 2019, or any adjournments or postponements thereof.

The Special Meeting will be held on October 16, 2019, at 4:30 pm, Eastern time, at 401 Theodore Fremd Avenue (One Corporate Center), Rye, New York 10580-1422.

The Board of Directors has fixed the close of business on July 29, 2019, as the record date for determining which holders of record that are entitled to notice of, and to vote those shares by proxy or at, the Special Meeting and at any adjournment or postponement of the Special Meeting. On the record date, there were 4,397,921 shares of outstanding, held by approximately 680 holders of record.

Each holder of a whole Share shall be entitled to one vote for each such whole Share, and each holder of a fractional Share shall be entitled to a proportionate fractional vote for each such fractional Share, held in such shareholder’s name on the Record Date.

The presence in-person or by proxy of shareholders of the Fund entitled to cast at least one-third of the votes entitled to be cast shall constitute a quorum. Approval of the Conversion Proposal requires the affirmative vote of the holders of a “majority of the outstanding voting securities” as such term is defined in the 1940 Act, which means the vote, at the Special Meeting of the Fund, of  (a) 67% or more of the voting securities present at such meeting, if the holders of more than 50% of the outstanding votes of the Fund are present or represented by proxy; or (b) more than 50% of the outstanding votes of the Fund, whichever is the less. The approval of the Amendment and the Reorganization Proposal, each require the affirmative vote of a majority of the votes by shareholders entitled to be cast on the matter. In the event that the necessary quorum to transact business is not obtained or if a quorum is present but sufficient votes to approve the Proposals are not received at the Special Meeting, the persons named as proxies may propose one or more adjournments of the Special Meeting, in accordance with applicable law, to permit further solicitation of proxies with respect to the Proposals. The persons named as proxies will vote the proxies including abstentions and proxies containing broker non-votes, if any, in favor of adjournment if they determine additional solicitation is warranted and in the interests of the Fund. The chairman of the Special Meeting may also adjourn the Special Meeting without a shareholder vote.

Conversion of Outstanding Shares.   The Fund is the only currently outstanding series of the Company and is offered in four classes: Class AAA, Class A, Class C, and Class I. Each class has different costs associated with buying, selling, and holding Fund shares. However, aside from the varying costs associated with each class of shares, the shareholder rights that each class of shares carries are identical. Shareholders of each class are entitled to one vote for each full share held and fractional votes for fractional shares held. All shares of the Fund have equal voting rights and are voted in the aggregate, and not by series or class, unless required otherwise by law. If the Proposals are approved, each outstanding share of each class of the Fund will be converted into a number of shares of a single new class of common stock having the same aggregate net asset value as the net asset value of the converted share.

The Board considered and approved, on behalf of the Company and the Fund, an Agreement and Plan of Reorganization (the “Plan”) between the Company, on its own behalf and on behalf of the Fund, and New Comstock Fund and the transactions contemplated thereby, including, among other things: (1) transfer by the Fund of all of its assets to New Comstock (which is being established solely for the purpose of acquiring those assets and continuing the Fund’s business) in exchange solely for shares in New Comstock and New Comstock’s assumption of all of the Fund’s liabilities, (2) distributing those shares pro rata to the Fund’s shareholders in exchange for their shares of common stock therein and in complete liquidation thereof, and (3) liquidating and dissolving the Fund (the “Reorganization”). The form of the Plan is attached hereto as Appendix A. The Reorganization will be effected only if the Conversion and the Amendment Proposals are approved by the shareholders and effected by the Board.

De-registration.   If the Proposals are approved, the Fund would convert its current holdings to cash and cash equivalents and when less than 40% of the value of the Fund’s total assets (exclusive of government securities and cash) constitute “investment securities” (as defined in Section 3(a)(2) of the 1940 Act), the Fund will file an application with the SEC for a de-registration order. After reviewing the application, the SEC can require the Company and the Fund to supply additional information, which may result in one or more amendments to the application. The SEC can, on its own motion or on the motion of any interested party, order a public hearing on the application. It cannot be stated with certainty whether the SEC will grant the Fund’s application, and it may take several months or longer from the date of filing of the application to obtain a de-registration order. Until the SEC issues a de-registration order, the Fund will continue to be registered as an investment company and will continue to be restricted by its fundamental investment restrictions. Upon approval by the shareholders and while the request for de-registration is pending with the SEC, the Adviser will manage the portfolio of investments with the objective to preserve capital. The Fund will not accept new investments but will allow redemptions during this period. During this time, the proposed management team, (as identified herein), will begin the process of identifying prospective operating businesses in which to invest to acquire a controlling interest.

After issuance of a de-registration order, the 1940 Act will no longer apply to the Fund’s affairs and its investment objective and investment restrictions will become subject to the discretion of the Board, which will be responsible for determining the investment focus of New Comstock.

Effects of the De-registration.   As a registered investment company, the Fund is subject to extensive regulation under the 1940 Act. The 1940 Act, among other things:

Investment Advisory Agreement.   If the Proposals are approved, the Fund ceases to meet the definition of investment company under the 1940 Act, and de-registers as a mutual fund, the investment advisory agreement between the Fund and the Adviser would terminate, and thereafter New Comstock would be internally managed by its newly appointed executive officers and other new employees or agents.

Becoming an operating company.   Upon effectiveness of the de-registration order, the Fund would become an operating company and would reorganize into New Comstock. The shares of New Comstock are expected to be quoted on the OTC Bulletin Board and in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). It is expected that New Comstock will file annual, quarterly, current and other reports with the SEC under the Securities Exchange Act of 1934, as amended (“1934 Act”).

If the Proposals are approved, shareholders will have fundamentally changed the nature of their investments and their rights will be different from their current rights as shareholders of the Fund. These changes may entail greater risks that could adversely affect the frequency and amount of distributions made to shareholders, the value of New Comstock’s shares, its regulatory and disclosure obligations, its exposure to interest rate fluctuations and the types and degree of leverage it uses. Additionally, changes will occur as a result of implementation of the Proposals that will affect the financial condition and results of operations of New Comstock.

Once New Comstock becomes an operating company it will qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). As such, New Comstock can take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements. As a result, New Comstock shareholders may not have access to certain information they deem important.

Shareholders of the Fund are being asked to approve the Reorganization. If shareholders of the Fund approve the Reorganization, the Reorganization will be consummated shortly after the Company de-registers as an investment company with the SEC (the “Closing Date”).

The terms and conditions under which the Reorganization would be completed are contained in the Plan. The following summary of material terms of the Plan is qualified by reference to the Plan itself, form of which is attached to this proxy statement/prospectus as Appendix A.

The Plan provides that New Comstock will acquire all of the assets of the Fund in exchange solely for shares of New Comstock and assumption of all of the Fund’s liabilities. The Plan further provides that, on or as soon as practicable after the Closing Date, the Fund will distribute those shares to its shareholders and then will liquidate and dissolve.

The number of shares and amount of cash in lieu of fractional shares of New Comstock each shareholder will receive in the Reorganization will be equal in value, as calculated at the close of business (4:00 p.m. Eastern Time) on the Closing Date, to the number of full and fractional shares of the Fund a shareholder owns on the Closing Date. After that distribution, the Company will take all necessary steps under the MGCL, its governing documents and any other applicable law to effect its liquidation and dissolution.

The Plan may be terminated, and the Reorganization may be abandoned, at any time prior to its consummation, before or after approval by the Fund shareholders, by the Company and New Comstock’s mutual agreement. The completion of the Reorganization also is subject to various conditions, including completion of all necessary filings with the SEC; delivery of a legal opinion regarding the federal tax consequences of the Reorganization; and other customary corporate and securities matters. Subject to the satisfaction of those conditions, the Reorganization will take place immediately after the close of business on the Closing Date. The Plan provides that the Company may waive compliance with any of the conditions set forth therein for its benefit, if such waiver will not have a material adverse effect on the Fund’s shareholders, other than the requirements that (1) the Plan and the transactions contemplated thereby have been duly adopted and approved by the Board and the Fund’s shareholders at the Meeting and (2) the Company receives an opinion of counsel that the Reorganization will constitute a tax-free reorganization for federal income tax purposes, except with respect to cash received by the Fund’s shareholders in lieu of fractional shares of New Comstock common stock.

The Board has determined that an operating company formed as a Delaware corporation has advantages over an operating company organized as a Maryland corporation. As a result of these advantages, the Delaware corporate organizational form has been increasingly used by operating companies. In unanimously declaring the Reorganization advisable and approving the Plan and recommending that shareholders of the Fund approve the Reorganization, the Board was provided and

We will seek to capitalize on the significant experience and contacts of our management team to complete our initial business acquisition. We may pursue our initial business acquisition in any business, or industry and we will limit our search to companies that are domiciled in the United States. Following our initial business acquisition, our objective will be to implement or support the acquired business’ growth and operating strategies. We intend to target businesses with growth potential in excess of forecasted market rates at a reasonable price as a platform for further consolidation opportunities and asset build-ups as well as those that are at an inflection point in the evolution of their business models. Our management team intends to focus on prudently implementing advanced information technology and data analytics capabilities in their operations so as to drive growth, realize cost advantages, enhance predictive modelling and result in better corporate decision making.

We believe there are secular trends that will continue to drive opportunities for companies operating in certain industries. We also believe that transformational demographic dynamics, technological advancements and consumer demand and tastes will lead to structural changes, productivity improvements, and growth across a multitude of industries, including our target markets and our target industries. Given our extensive background, experience and network of relationships, we are confident in our ability to find attractive targets. We believe that the complexities of today’s geopolitical environment are growing, and will lead to increasing opportunities. These criteria are not intended to be exhaustive, and we may pursue business acquisitions based on other considerations, factors and criteria that our management team may deem relevant.

Our objective is to consummate our initial business acquisition with such a business and enhance shareholder value by helping it to identify and recruit management, identify and complete additional acquisitions, implement operational improvements, and expand its product offerings and geographic footprint. We intend to utilize our management team’s experience and contacts in our target industries to achieve this objective. We believe many businesses could benefit from access to the public markets but have been unable to do so due to a number of reasons, including the time it takes to conduct a traditional initial public offering, market volatility and pricing uncertainty. We intend to focus on evaluating companies with leading competitive positions, high barriers to entry, enhanced business visibility, resilience and durability across economic cycles, strong management teams, and strong long term potential for growth and profitability.

We believe that our management team is very well positioned to source, evaluate and execute a transaction that would benefit from their skills. We further believe that our management team is well positioned to identify acquisition opportunities in the marketplace and that our contacts and transaction sources, ranging from owners and directors of private and public companies, family office networks, private equity funds, investment bankers, lenders, attorneys, accountants, and other trusted advisors across various sectors, will allow us to generate attractive acquisition opportunities. Our management team has extensive relevant business and financial experience, a history and record of value creation initiatives, including the execution of mergers, acquisitions and dispositions of companies and assets, and extensive experience involving financial, investment, capital markets, negotiating, restructuring, and governance matters. The multi-disciplinary approach of our management team, renders us as exceptionally capable of executing on our objectives and generating an attractive risk-adjusted return to our shareholders.

The past performance of the members of our management team or their affiliates or employers is not a guarantee that we will be able to identify a suitable candidate for our initial business acquisition or of success with respect to any business acquisition we may consummate. You should not rely on the historical record of the performance of our management team’s members, or any of their affiliates or employers, as indicative of our future performance.

Our business strategy is to identify and complete our initial business acquisition with a company that complements the experience of our management team and can benefit from our management team’s expertise. Our selection process is expected to leverage our management team’s contacts, which we believe will provide us with access to attractive business acquisition opportunities. We believe that the extensive networks of our management team members will deliver access to a broad spectrum of opportunities across certain industries. We intend to target businesses that provide a platform for add-on acquisitions or that are at an inflection point in their growth. Our management team has experience:

Following the completion of the Reorganization, we intend to begin the process of communicating with the network of relationships of our management team and their affiliates to articulate the parameters for our search for a potential target initial business acquisition and begin the process of pursuing and reviewing potential opportunities.

We expect to adhere to a disciplined investment process, which may include (i) utilizing our management team’s relationships to identify businesses in our target industries, (ii) performing rigorous due diligence, and (iii) actively participating post-acquisition through the implementation of operational improvements and growth initiatives. We believe we have the following competitive strengths:

Continuity and Working Relationship of our Management Team.   We have a multi-disciplinary approach combining operations, strategy, finance, and investing and have a history of direct engagement with management teams across businesses. We believe the history and experience of our management team will be viewed favorably by target businesses in their implementation of operational, financial, managerial, and strategic initiatives.

Proprietary and Differentiated Sourcing Pipeline.   Our management team (including members of our Board of Directors) has cultivated strong relationships across multiple industries. These relationships include networks from prior investment experience and operating knowledge, relationships with industry executives, corporate management teams and family office networks, and relationships with financial institutions, investment banks, private equity sponsors, business brokers, management consultants and advisors, industry trade organizations, accountants, attorneys, academics and restructuring firms. We expect that the diverse networks of our management team will provide us with a pipeline of acquisition opportunities that would be difficult for others to replicate.

Investing Experience and Rigorous Exploration/Diligence Experience.   We believe that our management’s track record of identifying and sourcing transactions positions us well to evaluate potential business acquisitions appropriately and to select a target business that will be well received by the public markets. Although the complexities of the business models and regulatory environments of companies in our target industries may be a barrier for other market participants, our management team has decades of experience in operating within such frameworks. Our management team’s investigative, highly analytical due diligence process is typically supported by third party external advisors. Inherent in our process are coherent risk aggregation and mitigation techniques, which we believe will be well received by the management teams of targets.

Active Management.   We intend to pursue an active management strategy, employing rigorous diligence of all aspects of a target’s business, formulating specific growth strategies and related compensation policies that ensure alignment with target management, and working with management to identify best practices to improve the financial performance and resilience of our business acquisition. Our active approach includes the implementation of post-acquisition strategic initiatives, which may include the development of new market growth strategies, including product/service and/or geographic enhancement, further acquisitions, operational improvements, review of capital allocations policies, and optimization of capital structures. Our management team has a history of active engagement in implementing such measures.

Financial Position and Flexibility.   With funds available for a business acquisition initially in the amount of approximately $16,000,000, we can offer a target business certain options to facilitate a business acquisition and may be able to fund future expansion and growth. However, if a business acquisition requires us to use substantially all of our cash to pay for the purchase price, we may need to arrange third party financing to help fund our business acquisition. Since we have no specific business acquisition under consideration, we have not taken any steps to secure third party financing. Accordingly, our flexibility in structuring a business acquisition may be subject to constraints.

Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses and in conducting a thorough due diligence review that will encompass, among other activities, meetings with incumbent management and employees, document reviews, and inspection of facilities, as applicable, as well as a review of proprietary and public financial and other information that we will require be made available to us. We intend to develop detailed financial models of our target companies, identifying critical assumptions, and evaluating forecasted business prospects under varying financial scenarios. We intend to use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business acquisition with a target business that does not meet some or all of these criteria or guidelines.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business acquisition may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant.

Our management team encompasses a combination of senior leadership capabilities within multiple disciplines, in-depth diligence and deal flow. Our primary area of focus will be in industries where our management team (including members of our Board of Directors) has a history of investment experience, strong networks, and operational knowledge. The foundation of our approach is to acquire an attractive business and enhance the long-term value of the enterprise.

Our management team has developed deep and longstanding relationships across multiple industries. These relationships include networks from prior investment experience and operating knowledge, relationships with industry executives, corporate management teams, and family office networks, and relationships with financial institutions, investment banks, private equity sponsors, business brokers, management consultants and advisors, industry trade organizations, accountants, attorneys, academics and restructuring firms. We believe that these relationships will drive substantial proprietary deal flow and insight on acquisition opportunities. Our management team will seek opportunities where it will be a value-added partner to target companies, their owners and their respective managements in connection with their unique situations.

Once an acquisition target is identified, we intend to undertake a rigorous due diligence process. The diligence process includes a thorough review of industry dynamics, competitive landscape, company visits, and review of business models, operating performance, and working capital, customer and supplier dialogues, industry trade show attendance, off balance sheet assets and liabilities, the depth of the target’s management team, and their incentives, review of capital structure and lending arrangements, and a thorough examination of legal, regulatory, tax and environmental matters. As part of our diligence process, consultants, third party experts, and legal and financial advisors may be utilized. The results and findings of this investment analysis are compiled for review in the determination of business selection.

Some of factors and business characteristics of companies that we intend to evaluate include resilience and durability across business cycles, a focus on cash flows, the union of business philosophy and principles with the management of the target, a determination of attractive acquisition entry points, intrinsic valuation, and long-term intrinsic value growth.

Once due diligence of an acquisition opportunity is complete and a target has been selected for acquisition, our management team expects to utilize creative, yet careful, deal structuring and negotiation. Our management team may hire third-party professionals, including financial and legal advisors and consultants to assist in the negotiation and execution of purchase agreements and credit agreements and legal and regulatory filings.

We intend to engage in an active approach to implement initiatives to continue to unlock value and increase shareholder value following the consummation of a business acquisition. Our management team has a track record of engagement and continual dialogue with the management teams of acquired businesses, including a continual assessment of the industry and competitors, the evaluation of potential

For an indefinite period of time after consummation of our initial business acquisition, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business acquisitions with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating our initial business acquisition with only a single entity, our lack of diversification may:

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business acquisition with that business, our assessment of the target business’ management may not prove to be correct. The future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. Consequently, members of our management team may not become a part of the target’s management team, and the future management may not have the necessary skills, qualifications or abilities to manage the company. Moreover, members of our management team may not have significant experience or knowledge relating to the operations of the particular target business.

Following our initial business acquisition, we may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

If, within three years following the closing date of the Reorganization, New Comstock cannot invest at least 75% of its net asset value in operating businesses, the Board will consider available options, including liquidating New Comstock and distributing the net proceeds to the shareholders.

In identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting business acquisitions directly or through affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources.

If we succeed in effecting a business acquisition, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to a business acquisition, we will have the resources or ability to compete effectively.

The following is a discussion of our anticipated policies with respect to distributions, investments, financing, lending, and certain other activities of New Comstock. These policies will be determined and periodically thereafter reviewed and revised by the Board of Directors without notice to, or a vote of, the shareholders of New Comstock. For purposes of this section, references to “New Comstock” “we”, “our” and “us” mean only “New Comstock”.

Investments in Operating Businesses.   We will conduct all of our investment activities by investing in operating businesses. Our overall investment objectives are to provide attractive returns for our shareholders through maximizing the value of operating businesses with cash flow growth potential. We will seek to employ what we believe to be a disciplined, opportunistic acquisition strategy with a focus on undervalued operating businesses. We have not established a specific policy regarding the relative priority of our investment objectives.

If we acquire additional operating businesses, we intend to consider the benefits of diversification by geography, type of business operator and asset type but not be limited to any concentration (geography, operator, or asset type). We do not have a specific policy as to the amount or percentage of our assets, which will be invested in any specific business.

We expect to pursue our investment objectives through the ownership of operating businesses but may also make investments in other entities, including joint ventures. We intend to make investments in such a way as to not be treated as an investment company under the 1940 Act.

From time to time, we may make investments or agree to terms that support the objectives of the companies in which we invest without necessarily maximizing our short-term financial return, which may allow us to build long-term relationships and acquire businesses otherwise unavailable to our competition. We believe these dynamics should create long-term, sustainable relationships and, in turn, profitability for us.

We do not have a policy limiting our ability to make loans to other persons. For example, we may make secured or unsecured loans to operators to support working capital needs or to finance certain activities which we believe will maximize the value of a business. We may choose to guarantee the debt of third parties. We do not currently intend to engage in any significant lending activities. We intend to make investments in such a way that we will not be treated as an “investment company” under the 1940 Act. However, the Board of Directors may adopt a lending policy without notice to, or the vote of, our shareholders.

We may, but do not presently intend to, make investments other than as previously described. For instance, we may offer shares of common stock or other equity or debt securities in exchange for an ownership stake in an operating business. We intend to make investments in such a way that we will not be treated as an “investment company” under the 1940 Act.

It is expected that shares of New Comstock will be quoted on the OTC Bulletin Board and in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). It is expected that New Comstock will file annual, quarterly, and other reports with the SEC under the Securities Exchange Act of 1934, as amended (the “1934 Act”). New Comstock will also be required to hold an annual meeting of shareholders for the election of directors. However, New Comstock will not be subject to the proxy rules of the federal securities rules or Section 16 of the 1934 Act.

The following is the management discussion and analysis of the financial condition and results of operations. For purposes of this section, references to “New Comstock” “we”, “our” and “us” mean only New Comstock.

We are a newly formed company for the purpose of acquiring one or more operating businesses. We have not identified any operating business target and we have not, nor has anyone on our behalf, initiated any substantive business discussions, directly or indirectly, with any business target. We intend to effectuate acquisition of operating businesses using cash that we will receive following the Reorganization. We intend to focus on businesses that, when sold, will provide an increase in value in order to utilize the accumulated capital loss carryforwards. It is anticipated that following the closing of the Reorganization, we will have approximately $16 million in net assets for purposes of effectuating acquisitions of operating businesses. We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete initial acquisitions will be successful.

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the Reorganization. Following the Reorganization, we will not generate any operating revenues until after a successful completion of the initial acquisition. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. After the Reorganization, we expect to incur increased expenses for due diligence expenses. We expect our shares to be quoted on the OTC Bulletin Board and in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). It is expected that we will file annual, quarterly, current and other reports with the SEC under the 1934 Act.

To date, we have had limited liquidity needs, as we are primarily a shell company, formed for the purpose of the Reorganization. To the extent liquidity needs arise between now and the closing of the Reorganization, we expect to rely on Gabelli Funds, LLC to provide the necessary capital resources through the private sale of our shares to Gabelli Funds, LLC. We do not, however, expect that any material liquidity needs will arise between the effective date of this registration statement and the closing of the Reorganization.

Following the Reorganization, we intend to use substantially all the assets transferred to us in the Reorganization, including any amounts representing interest earned on such assets (which interest shall be net of taxes payable by us), to acquire a target business or businesses and to pay our expenses relating thereto. We may withdraw cash to pay taxes. We estimate our annual franchise tax obligations, based on the number of shares of stock authorized after the completion of this offering, to be $42,665. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held. We expect the interest earned will be sufficient to pay our taxes. To the extent that our capital stock is used in whole or in part as consideration to effect an acquisition, the remaining proceeds as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business or businesses. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products.

We believe that following the closing of the Reorganization, approximately $273,000 will be necessary for us to operate for at least twelve months following the closing of the Reorganization. Over this time period, we will be using these funds for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business acquisition.

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. As of the date of this prospectus, we have not completed an assessment of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business acquisition and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business acquisition may have internal controls that need improvement in areas such as:

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expense in meeting any applicable reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively also may take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business acquisition.

We do not believe we will need to raise additional funds following the Reorganization in order to meet the expenditures required for operating our business. However, in order to finance transaction costs in connection with an intended initial business acquisition, our officers, directors or their affiliates may, but are not obligated to, loan us funds as may be required. In the event that the initial business acquisition does not close, we may use a portion of the working capital to repay such loaned amounts. Such loans would be evidenced by promissory notes. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans as of the date of this prospectus.

As of the date of this prospectus, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

The following summarizes the material terms of New Comstock common stock, as will be set forth in the Charter and the Bylaws, which will govern the rights of common stock, if the Proposals are approved. A copy of the form of the Charter and the form of the Bylaws are attached as Appendix B and C, respectively, to this proxy statement/prospectus. While we believe that the following description covers the material terms of capital stock, the description may not contain all of the information that is important to you. We encourage you to carefully read this entire proxy statement/prospectus, the Charter and the Bylaws and the other documents we refer to for a more complete understanding of capital stock following the completion of the Reorganization.

The Charter will authorize New Comstock to issue up to 5,000,000 shares, $0.001 par value per share, consisting of 4,000,000 shares of common stock and 1,000,000 shares of preferred stock.

Please see Comparison of Rights of Shareholders of Comstock Funds Inc., and New Comstock Inc., for a full description of New Comstock common stock.

Currently, the Company has, and if the Proposals are approved, New Comstock will have substantial capital loss carryforwards under Section 1212 of the Code from previous taxable years to offset future capital gains. In addition, capital loss carryforwards of New Comstock have a limited life and generally expire five years after accrual and can only be offset against capital gains. These capital loss carryforwards will be significant assets of New Comstock that could translate into significant future tax savings for New Comstock and its shareholders. However, Sections 382 and 383 of the Code (collectively, “Section 382”) would limit New Comstock’s ability to use the capital loss carryforwards fully if it experienced an “ownership change.” To reduce the risk of that occurring, the Delaware Organizational Documents contain provisions that are designed to prevent an ownership change from taking place without the directors’ prior approval by (i) limiting the ability of persons to beneficially own more than 4.9% of the outstanding shares and (ii) limiting the ability of persons who, following the Reorganization, will own more than 4.9% of the outstanding shares from acquiring additional shares if such acquisition would cause an “ownership change” under Section 382. These provisions, however, could have an anti-takeover effect, or limit the ability of certain shareholders to influence management of New Comstock.

To the extent New Comstock realizes capital gains in the future on the sale of its investments or receives capital gain dividends from its investments, the capital loss carryforwards would be available to offset those gains dollar-for-dollar for federal income tax purposes until the capital loss carryforwards are used or expire. This offset would permit New Comstock to retain those capital gains and compound its net asset value growth on a tax-deferred basis, which could lead to higher annual after-tax returns.

As of April 30, 2019, the Company had $131,115,342 of capital loss carryforwards, all of which are subject to the carryforward period limitations of Section 1212 of the Code. If New Comstock were to experience an ownership change, that could significantly defer or eliminate its ability to utilize the capital loss carryforwards, cause it to recognize net capital gains that is not offset by capital loss carryforwards sooner, and cause some of the capital loss carryforwards to expire unused.

If the Proposals are approved, New Comstock will have capital loss carryforwards available for its current taxable year. In addition, capital loss carryforwards of New Comstock have a limited life and generally expire five years after accrual and can only be offset against capital gains. While it is impossible to predict with any accuracy the reduction in the amount of New Comstock’s capital gains that could be offset by the capital loss carryforwards if an ownership change were to take place, the directors believe that such impact could potentially be significant. The Share Limitations are designed to prevent an ownership change so New Comstock can preserve the advantage of the capital loss carryforwards.

The rules of Section 382 for determining whether an ownership change has occurred are very complex and are beyond the scope of this summary discussion. Generally, as relevant here, an “ownership change” will occur when one or more shareholders, each of whom directly or indirectly (through application of certain constructive ownership rules) owns 5% or more of the shares, increase its/their aggregate ownership of shares by more than 50 percentage points over the lowest percentage of shares it/they owned at any time during the previous three years. (For these purposes, the ownership, or lack thereof, of shares of the Company, as the “predecessor,” is taken into account, so references below in this section to ownership of New Comstock’s shares include ownership of Company’s shares.)

For example, a single investor’s acquisition of 50.1% of the shares within a three-year period would result in an ownership change. Similarly, if ten persons, none of whom previously owned any shares, each acquired slightly over 5% of the shares within a three-year period (resulting in their collectively owning more than 50% thereof), New Comstock would experience an ownership change.

The Delaware Organizational Documents generally will restrict any person from attempting to purchase or otherwise acquire (an “Acquisition”), without the Board’s prior approval, any direct or indirect interest in the shares (or, if issued in the future, options, warrants, or other rights to acquire shares or securities convertible or exchangeable into them), if the Acquisition would either (1) cause the person to own (within the meaning of Section 382) more than 4.9% of the shares (any person owning more than 4.9% of the shares is referred to as a “Restricted Holder,” and such shares greater than 4.9% being referred to as “Excess Shares”) or (2) increase the percentage of the shares a Restricted Holder owns such that an “ownership change” would occur. For purposes of determining the existence and identity of, and the amount of shares owned by, any shareholder, New Comstock is entitled to rely conclusively on, in addition to its actual knowledge of the ownership of its shares, the existence and absence of filings of Schedules 13D and 13G (or any similar schedules) as of any date.

In seeking to more effectively enforce the foregoing acquisition restrictions, the Delaware Organizational Documents also provide that a Restricted Holder will be required, prior to the date of any proposed Acquisition of Excess Shares, to request in writing (a “Request”) that the Board of Directors review and authorize the proposed Acquisition. Any determination made by the Board of Directors whether to authorize a proposed Acquisition of Excess Shares will be made in their sole discretion and judgment. Any person who makes a Request will be required to reimburse New Comstock for all reasonable costs and expenses incurred in making that determination.

The Delaware Organizational Documents provide that any Acquisition attempted to be made in violation of the Share Limitations will be null and void ab initio to the fullest extent permitted by law and contains detailed terms that seek to achieve that result. They also provide that any person who knowingly violates the Share Limitations, or any persons in the same control group with such a person, shall be liable for, and shall indemnify and hold harmless against, any and all damages suffered as a result of the violation, including damages resulting from a reduction in or elimination of the ability to use the capital loss carryforwards and attorneys’ and auditors’ fees incurred in connection with such violation.

Although the Share Limitations are intended to reduce the likelihood of an ownership change, ownership change cannot be eliminated, for reasons including the following:

Due to the differences between the laws governing a Maryland corporation and a Delaware corporation, as well as the differences between the Company Charter, the Bylaws of the Company (the “Company Bylaws” and together with the Company Charter, the Maryland Organizational Documents”) the proposed Certificate of Incorporation for New Comstock (“Delaware Charter”) and the proposed Bylaws of New Comstock (the “Delaware Bylaws” and together with the Delaware Charter, the “Delaware Organizational Documents”), the Reorganization will effect some changes in the rights of shareholders. Summarized below is a comparison of significant rights of shareholders before and after the Reorganization.

The summary below is not intended to be relied upon as an exhaustive list of all differences or a complete description of the differences between General Corporation Law of the State of Delaware (the “DGCL”) and the Delaware Organizational Documents, on the one hand, and the Maryland General Corporation Law (the “MGCL”) and the Maryland Organizational Documents, on the other hand.

This section summarizes the U.S. federal income tax consequences of the Reorganization and the U.S. federal income tax considerations generally applicable to an investment in New Comstock stock by a U.S. person. For purposes of this section under the heading “Material United States Federal Income Tax Considerations,” references to “New Comstock” “we,” “our” and “us” mean only New Comstock. This summary is based upon the Code, the regulations promulgated by the U.S. Treasury Department, rulings and other administrative pronouncements issued by the Internal Revenue Service (the “IRS”), and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. This summary is for general information only and is not tax advice. This summary does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular investor in light of its investment or tax circumstances, or to investors subject to special tax rules, such as:

For purposes of this summary, a “U.S. person” means a beneficial owner of New Comstock stock that is, for U.S. federal income tax purposes, (a) an individual who is a citizen of the United States or is treated as a resident of the United States, (b) a corporation (or other entity taxable as a corporation) that is created or organized in or under the laws of the United States or any state thereof or the District of Columbia, (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (d) a trust if  (i) a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) the trust was in existence on August 20, 1996 and properly elected to continue to be treated as a U.S. person.

For purposes of this summary, a “Non-U.S. person” means a beneficial owner of New Comstock stock that is not a U.S. person.

This summary assumes that investors will hold their stock as a capital asset, which generally means as property held for investment.

The tax consequences to any particular shareholder of holding our stock will depend on the shareholder’s particular tax circumstances. You are urged to consult your tax advisor regarding the U.S. federal, state, local, and foreign income and other tax consequences to you in light of your particular investment or tax circumstances of acquiring, holding, exchanging or otherwise disposing of our stock.

The Reorganization of the Company with and into New Comstock is intended to qualify as a tax-free reorganization under section 368(a)(1)(F) of the Code, and the U.S. federal income tax consequences summarized below assume that the Reorganization will so qualify.

Prior to the effectiveness of this registration statement, we will have received an opinion of our tax counsel to the effect that the Reorganization will be treated for U. S. federal income tax purposes as a reorganization under section 368(a)(1)(F) of the Code and that each of the Company and New Comstock is a party to a reorganization within the meaning of section 368(b) of the Code. The opinion of tax counsel is conditioned upon the accuracy, as of the date hereof and as of the effective date of the Reorganization, of fact-based representations and covenants made by our management and are subject to the conditions, limitations, and qualifications referenced below and in the opinion. The opinion of tax counsel represents only the view of tax counsel based on tax counsel’s review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including that the Reorganization will be effected as described in this registration statement. The opinion is expressed as of the date issued. Tax counsel will have no obligation to advise us or our shareholders of any subsequent change in the matters stated, represented or assumed, or of any subsequent change in the applicable law. You should be aware that opinions of counsel are not binding on the IRS, and no assurance can be given that the IRS will not challenge the conclusions set forth in such opinions.

Neither the Company nor New Comstock will recognize gain or loss as a result of the Reorganization. The Company will receive an opinion of tax counsel that the Company shareholders will not recognize gain or loss upon the exchange of shares for New Comstock common stock, except with respect to cash received in lieu of fractional shares of New Comstock. The initial tax basis of New Comstock common stock received by a shareholder pursuant to the Reorganization will be equal to such shareholder’s adjusted tax basis in the shares of Company common stock being exchanged pursuant to the Reorganization (reduced by the amount of any tax basis allocable to a fractional share of New Comstock common stock for which cash is received). The holding period of New Comstock common stock received by a shareholder pursuant to the Reorganization will include the shareholder’s holding period with respect to the shares of the Company common stock being exchanged pursuant to the Reorganization.

If the Proposals are approved, the Company would cease to be taxed as a RIC and instead would be taxed as a C-corporation.

If taxed as a C-corporation for federal income tax purposes, the Company’s total net income would be subject to federal taxation at the corporate level at the current federal tax rate of 21%. To the extent that such income is distributed to shareholders, these distributions may also be subject to taxation at the shareholder level as ordinary income (generally, dividends; however, distributions would be taxed at the long-term capital gains rate if such distributions constitute “qualified dividend income” as defined in the Code and certain holding periods and other requirements are met) or as long-term capital gains (if a return of capital exceeds the shareholder’s tax basis on shares held for longer than one year) and New Comstock gets no deduction for such distributions. In addition, once the Company ceases to be taxed as a RIC, it may become subject to certain state and local taxes to which it is not currently subject.

In addition, as a RIC, the Fund is required to distribute substantially all of its income each year to shareholders. After the Fund ceases to be taxed as a RIC, it will no longer be subject to this requirement, and the determination of whether to make distributions, if any, to shareholders will be made by the Board. Although no determination has yet been made as to New Comstock’s distribution policy, in the event the Proposals are approved, it is likely that the Board will determine that all of New Comstock’s working capital is required for its operations and that, accordingly, no distributions should be made for the foreseeable future. In that event, and for so long as such policy is in place, shareholders would receive no current income from their investment in New Comstock.

Upon a sale or exchange of shares of New Comstock, a shareholder will realize a taxable gain or loss depending upon the basis in the shares. Such gain or loss will be long term if a shareholder’s holding period for the shares is more than twelve months.

Mario J. Gabelli has served as Chairman, Chief Executive Officer, Chief Investment Officer — Value Portfolios and a director of GAMCO Investors, Inc. (“GBL”) since November 1976. In connection with those responsibilities, he serves as director or trustee of registered investment companies managed by GBL and its affiliates (“Gabelli Funds”). Mr. Gabelli also serves as the Chief Executive Officer and Chief Investment Officer of the Value Team of GAMCO Asset Management Inc., GBL’s wholly-owned subsidiary. Mr. Gabelli has served as Executive Chairman of Associated Capital Group, Inc. (“Associated Capital”) since May 2015 and previously served as the Chief Executive Officer of Associated Capital from May 2015 until November 2016. Associated Capital is a public company containing the alternative investment management business, institutional research services business and certain cash and other assets that were spun-off from GBL in November 2015. Mr. Gabelli served as portfolio manager for Teton Advisors, Inc. (“Teton”) from 1998 to February 2017. Since March 1, 2017, GBL serves as a subadvisor to Teton, and Mr. Gabelli serves as portfolio manager under that subadvisory agreement. Teton is an asset management company which was spun-off from GBL in March 2009. Mr. Gabelli has served as Chairman of LICT Corporation (“LICT”), a public company engaged in broadband transport and other communications services, from 2004 to the present and has been the Chief Executive Officer of LICT since December 2010. He has also served as a director of CIBL, Inc., a public holding company that was spun off from LICT in 2007, from 2007 to the present, and as the Chairman of Morgan Group Holding Co., a public holding company, from 2001 to the present. Mr. Gabelli was the Chief Executive Officer of Morgan Group Holding Co. from 2001 to November 2012. He served as a director of ICTC Group, Inc., a rural telephone company serving southeastern North Dakota from July 2013 to October 2018. In addition, Mr. Gabelli is the Chief Executive Officer, a director and the controlling shareholder of GGCP, Inc. (“GGCP”), a private company which owns a majority of GBL’s and Associated Capital, Class B Stock through an intermediate subsidiary, GGCP Holdings, LLC, and the President of MJG Associates, Inc. which acts as an investment manager of various investment funds and other accounts. Mr. Gabelli serves as Overseer of the Columbia University Graduate School of Business, a Trustee of Boston College, and a Trustee of Roger Williams University. He also serves as Director of The Winston Churchill Foundation, The E. L. Wiegand Foundation, The American-Italian Cancer Foundation, and The Foundation for Italian Art & Culture. He is also Chairman of the Gabelli Foundation, Inc., a Nevada private charitable trust. Mr. Gabelli also serves as Director of Field Point Park Association, Inc. Mr. Gabelli is 77 years old.

Christopher J. Marangi is a Managing Director and Co-Chief Investment Officer of GAMCO Investor, Inc.’s Value team and a portfolio manager of several funds and a director within the Gabelli/​GAMCO Fund Complex. He joined Gabelli Funds, LLC in 2003 as a research analyst covering the media and entertainment and business services sectors. Previously, he evaluated and executed private equity investments at Wellspring Capital Management. Prior to that, he was an investment banker with J.P. Morgan & Co. Mr. Marangi is a graduate magna cum laude of Williams College and holds an M.B.A. from Columbia University Graduate School of Business. Mr. Marangi is 45 years old.

Silvio A. Berni is currently the Chief Financial Officer of GGCP, Inc. where he has worked for 11 years. Prior to that, he had over 40 years of corporate experience in finance and accounting including as the Controller of Coca Cola Bottling Company of New York, Pechiney Corporation and Dyson Kissner Moran. Mr. Berni is a Certified Public Accountant, Certified Management Accountant and a Certified Financial Management Accountant. He received a B.S. degree in Accounting from Manhattan College and an M.B.A. in Finance and Taxation from Iona College. Mr. Berni is 67 years old.

Kevin Handwerker has served as Executive Vice President, General Counsel and Secretary of GAMCO Investors, Inc. since November 2013. Mr. Handwerker has also served as Executive Vice President, General Counsel and Secretary of Associated Capital Group, Inc since December 2015. Mr. Handwerker was Managing Director at Neuberger Berman LLC from 2000 through October 2013. Previously, Mr. Handwerker held senior positions in National Financial Partners Corp. and J.P. Morgan Investment Management Inc. He began his law career at Shearman & Sterling LLP, representing financial institutions

As of July 29, 2019, as a group, the Directors and Officers of the Company owned less than 1% of the outstanding shares (aggregating all classes) of the Fund.

Each holder of a whole Share shall be entitled to one vote for each such whole Share, and each holder of a fractional Share shall be entitled to a proportionate fractional vote for each such fractional Share, held in such shareholder’s name on the Record Date.

The presence in-person or by proxy of shareholders of the Fund entitled to cast at least one-third of the votes entitled to be cast shall constitute a quorum. Approval of the Conversion Proposal requires the affirmative vote of the holders of a “majority of the outstanding voting securities” as such term is defined in the 1940 Act, which means the vote, at the Special Meeting of the Fund, of  (a) 67% or more of the voting securities present at such meeting, if the holders of more than 50% of the outstanding votes of the Fund are present or represented by proxy; or (b) more than 50% of the outstanding votes of the Fund, whichever is the less. The approval of the Amendment and the Reorganization Proposal, each require the affirmative vote of shareholders entitled to cast a majority of the votes entitled to be cast on the matter. In the event that the necessary quorum to transact business is not obtained or if a quorum is present but sufficient votes to approve the Proposals are not received at the Special Meeting, the persons named as proxies may propose one or more adjournments of the Special Meeting, in accordance with applicable law, to permit further solicitation of proxies with respect to the Proposals. The persons named as proxies will vote the proxies including abstentions and proxies containing broker non-votes, if any, in favor of adjournment if they determine additional solicitation is warranted and in the interests of the Fund. The chairperson of the Special Meeting may also adjourn the Special Meeting without a shareholder vote.

Abstentions and broker non-votes (i.e., shares held by brokers who do not have discretionary authority to vote on a particular matter and for which the brokers have not received voting instructions from their customers) are counted as shares present at the Special Meeting in determining whether a quorum is present but do not count as votes cast for or against a Proposal. Therefore, abstentions and broker non-votes will have the same effect as a vote “against” the Proposals because each of these Proposals requires the affirmative vote of a specified majority of the applicable outstanding voting securities.

The Fund encourages shareholders to vote via the Internet or by telephone. Votes cast via the Internet or over the telephone are recorded immediately and there is no risk that postal delays will cause a proxy card to arrive late and therefore not be counted. A shareholder may revoke a proxy at any time prior to its exercise at the Special Meeting by (1) submitting to the Fund a subsequently executed proxy, (2) delivering to the Fund a written notice of revocation (addressed to the Secretary of the Fund at the principal executive office of the Fund at the address shown at the beginning of this proxy statement/prospectus) or (3) otherwise giving notice of revocation at the Special Meeting. Merely attending the Special Meeting, however, will not revoke any previously executed proxy. Unless revoked, all valid and executed proxies will be voted in accordance with the specifications thereon or, in the absence of such specifications, for approval of the Proposals.

If you hold Shares of the Fund through a bank or other financial institution or intermediary (called a service agent) that has entered into a service agreement with the Fund or the distributor of the Fund, the service agent may be the record holder of your Shares. At the Special Meeting, a service agent will vote Shares for which it receives instructions from its customers in accordance with those instructions. A signed proxy card or other authorization by a shareholder that does not specify how the shareholder’s Shares should be voted on a Proposal will be deemed an instruction to vote such Shares in favor of the Proposal.

If you beneficially own Shares that are held in “street name” through a broker-dealer or that are held of record by a service agent, and if you do not give specific voting instructions for your Shares, they may not be voted at all or, as described above, they may be voted in a manner that you may not intend. Therefore, you are strongly encouraged to give your broker-dealer or service agent specific instructions as to how you want your Shares to be voted.

The solicitation of proxies is being made primarily by the mailing of this proxy statement/prospectus with its enclosures on or about September 12, 2019. In order to obtain the necessary quorum at the Special Meeting, supplementary solicitation may be made by mail, telephone, facsimile or personal interview. Such solicitation may be conducted by, among others, officers of the Company and/or the Adviser and its affiliates. Expenses of the preparation of this proxy statement/prospectus and related materials, including printing and delivery costs, and other expenses related to proxy solicitation, including the tabulation of proxies and voting instructions will be borne by the Adviser or an affiliate. Shareholders whose shares are held by nominees such as brokers can vote their proxies by contacting their respective nominee.

The Board provides for shareholders to send written communications to the Board via regular mail. Written communications to the Board, or to an individual Director, should be sent to the attention of the Secretary at the address of the principal executive office. All such communications received by the Secretary shall be promptly forwarded to the individual Director to whom they are addressed or to the full Board, as applicable. If a communication does not indicate a specific Director, it will be sent to the Lead Independent Director for further distribution as deemed appropriate by such persons. The Board may further develop and refine this process as deemed necessary or desirable.

The Fund is not required to hold regular annual meetings of shareholders but will hold special meetings of shareholders when, in the judgment of the Board, it is necessary or desirable to submit matters for a shareholder vote. Any shareholder who wishes to submit a proposal to be considered at a meeting of the Fund’s shareholders should send such proposal to the Fund’s Secretary at One Corporate Center, Rye, New York 10380-1422. Any such proposal must be received in a reasonable time before the proxy solicitation for that meeting is made. Shareholder proposals that are submitted in a timely manner will be provided to, the Board of Directors for its consideration but not necessarily be included in the Fund’s proxy materials. Inclusion of such proposals is subject to limitations under the federal securities laws. If the Proposals are approved and the Company and the Fund de-register under the 1940 Act, then the newly formed Delaware corporation will be required to hold annual meetings of shareholders to elect directors. However, New Comstock will not be subject to the proxy rules of the federal securities rules or Section 16 of the 1934 Act.