(Mark One)

☒
(Mark One)
x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

TABLE OF CONTENTS

While a BDC may list its shares for trading in the public markets, we have currently elected not to do so. We believe that a non-traded structure is more appropriate for the long-term nature of the assets in which we invest. This structure allows us to operate with a long-term view, similar to that of other types of private investment funds, instead of managing to quarterly market expectations. While our offering price, which will exceed our net asset value per share, is subject to adjustment in accordance with the 1940 Act and our share pricing policy, because our shares will not be listed on a national securities exchange, our stockholders will not be subject to the daily share price volatility associated with the public markets. However, the net asset value of our shares may be volatile. To provide our stockholders with limited liquidity, we intend to conduct quarterly tender offers pursuant to our share repurchase program beginning with the first full calendar quarter following the one year anniversary of the date that we satisfy the minimum offering requirement. We are not obligated to repurchase shares and, if we do so, shares will be repurchased at a discount of 10% from the current offering price at the time of such repurchase. This will be the only method by which our stockholders may obtain liquidity prior to a liquidity event. Therefore, stockholders may not be able to sell their shares promptly or at a desired price. If stockholders are able to sell their shares, it is likely they will have to sell them at a significant discount to their purchase price.

We do not currently intend to list our shares on an exchange and do not expect a public market to develop for them in the foreseeable future. We intend to seek to complete a liquidity event within five years following the completion of our offering stage; however, the offering period may extend for an indefinite period. Accordingly, you should consider that you might not have access to the money you invest for an indefinite period of time until we complete a liquidity event. We will view our offering stage as complete as of the termination date of our most recent public equity offering if we have not conducted a public equity offering in any continuous two-year period. The Fund can continue this offering indefinitely and/or commence a new offering which would have the effect of postponing indefinitely the completion of the Fund’s offering stage. In addition, shares of BDCs listed on a national securities exchange frequently trade at a discount to net asset value. If we determine to pursue a listing of our shares on a national securities exchange, stockholders, including those who purchase shares at the offering price, may experience a loss on their investment if they sell their shares at a time when our shares are trading at a discount to net asset value. This risk is separate and distinct from the risk that our net asset value will decrease. There can be no assurance that we will be able to complete a liquidity event.

Investment Strategy

Our principal focus will be to invest at all levels of the private company capital structure, including senior secured loans, second lien secured loans, subordinated loans, and preferred and common equity of private U.S. smallsmall- and middle-market companies. We may purchase interests in loansIn particular, the Company believes there are currently fewer providers of capital to small- and equity through secondarymiddle-market Healthcare companies. Traditional middle market transactions in the “over-the-counter” market for institutional loans or directly from our target companies as primary market investments. In connection with our debt investments, we may receive equity interestslenders, such as warrantscommercial and regional banks and commercial finance companies, have contracted their origination and lending activities and are focusing on more liquid asset classes, or options as additional consideration. We may also purchase minority interests inhave exited the form of common or preferred equity in our target companies, either in conjunction with one of our debt investments, through a co-investment with a financial sponsor, such as an institutional investor or private equity firm, or through a direct investment. In addition, a portion of our portfolio may be comprised of corporate bonds, unsecured loans, collateralized loan obligations, or CLOs,business altogether. The Company believes the Basel III accord, and other debt securities. Once we raise a significant amount of proceeds from our offering, we expect that our investments will generally range between $2 million and $15 million each, although investments may vary proportionately withimplementing regulations by the size of our capital base and will ultimately be made atFederal Reserve, the discretion of Freedom Capital Investment Advisors, subject to oversight by our board of directors. Prior to raising significant amounts of capital, we may make smaller investments due to liquidity constraints.

When identifying prospective portfolio companies, we intend to focus primarily on the attributes set forth below, which we believe will help us generate higher total returns with an acceptable level of risk. While these criteria provide general guidelines for our investment decisions, we caution investors that, if we believe the benefits of investing are sufficiently strong, not all of these criteria necessarily will be met by each prospective portfolio company in which we choose to invest. These attributes are:

TABLE OF CONTENTS

Potential Competitive Strengths

We believe that we offer our investors the following potential competitive strengths:

Seasoned investment professionals.  We believe that the breadth and depthOffice of the experienceComptroller of Freedom Capital Investment Advisors’ senior management team will provide us with a significant competitive advantage in sourcingthe Currency and analyzing attractive investment opportunities.

The Freedom Capital Investment Advisors’ senior management team has over 40 plus collective years of investment banking experience, primarily related to small and middle-market companies. These team members have created over 20 asset management platforms, including BDCs, REITs, banks, savings and loan institutions, and specialty finance companies.

The senior management team of Freedom Capital Investment Advisors has raised over $25 billion of equity capital for clients as lead investment bankers and as fixed income asset managers managing $2.5 billion of assets. Additionally, the team has advised numerous asset managers including BDCs, equity REITs, CDO managers, CLO managers, mortgage REITs, the Federal Deposit Insurance Corporation, will significantly increase capital and the US Treasury. Senior management members have also served as directorsliquidity requirements for banks, decreasing their capacity to hold non-investment grade leveraged loans on their balance sheets.

Attractive investment dynamics. The Investment Committee has a strategic focus on the boardsHealthcare sector and related companies and will seek to capitalize on what it perceives to be a deep and wide market opportunity in this sector. This investment approach will align with the Investment Committee’s extensive executive, scientific and commercial experience in the Healthcare sector, which spans biopharmaceuticals, medical technologies, diagnostics and other key verticals within the sector.

Conservative capital structures. Following the credit crisis, which the Company defines broadly as occurring between mid-2007 and mid-2009, lenders have generally required borrowers to maintain more equity as a percentage of various assettheir total capitalization, specifically to protect lenders during economic downturns. With more conservative capital structures, U.S. small- and middle-market companies have exhibited higher levels of cash flows available to service their debt. In addition, U.S. small- and middle-market companies often are characterized by simpler capital structures than larger borrowers, which facilitates a streamlined underwriting process and, when applicable, restructuring process.  

Potential Competitive Strengths

The Company believes that the Adviser’s experience in investing in Healthcare sector companies, coupled with a disciplined approach to sector analysis, portfolio construction and risk management firmsshould allow the Company to achieve attractive risk-adjusted returns while preserving the Company’s capital. The Company believes that it has the following competitive strengths, which will give it the opportunity to achieve its objectives:

Experienced team with expertise in the Healthcare sector. Each of the members of the Investment Committee has extensive executive, scientific and regulated banking institutions.commercial experience in the Healthcare sector, which spans biopharmaceuticals, medical technologies, and other key verticals within the sector. The members of the Investment Committee have diverse backgrounds with investing experience through multiple business and credit cycles. The Company believes this experience provides the Adviser with an in-depth understanding of the strategic, financial and operational challenges and opportunities of small- and middle-market Healthcare companies and will afford it numerous tools to manage risk while preserving the opportunity for attractive risk-adjusted returns on its investments.

TABLE OF CONTENTSDistinctive origination platform. The Company anticipates that a substantial majority of its investments will not be intermediated and that its origination platform provides it the ability to originate investments without the assistance of investment banks or other traditional Wall Street sources. The Investment Committee will be responsible for originating, underwriting, executing and managing the assets of the Company’s transactions and for sourcing and executing opportunities directly. The Investment Committee has significant experience in building and maintaining strong relationships with private equity sponsors and companies.

The Investment Committee also maintains direct contact with financial sponsors, banks, corporate advisory firms, industry consultants, attorneys, investment banks, “club” investors and other potential sources of investment opportunities. The Company believes the Adviser’s ability to source through multiple channels will allow it to generate investment opportunities that have more attractive risk-adjusted return characteristics than by relying solely on origination flow from investment banks or other intermediaries and to be more selective investors.

Long-termPotential long-term investment horizon.  Our The Company believes its potential long-term investment horizon will give us greatgives it flexibility, which we believe will allow usallowing it to maximize returns on ourits investments. Unlike most private equity and venture capital funds, as well as many private debt funds, we are not required to return capital to our stockholders once we exit a portfolio investment. We believe that freedom from such capital return requirements, which will allow usThe Company intends to invest using a longer-termlong-term focus, which it believes will provide usit with the opportunity to increase total returns on invested capital, as compared to other private company investment vehicles.vehicles or investment vehicles with daily liquidity requirements (e.g. open-ended mutual funds and ETFs).

DisciplinedDefensive, income-oriented investment philosophyphilosophy. .  Freedom Capital Investment Advisors intends toThe Adviser will employ ana defensive investment approach focused on long-term credit performance and capital appreciation.principal protection. This investment approach involveswill involve a multi-stage selection process for each investment opportunity as well as ongoing monitoring of each investment made, with particular emphasis on early detection of deteriorating credit conditions at portfolio companies which would result in adverse portfolio developments.deterioration. This strategy is designed to maximizeminimize potential losses and achieve attractive risk-adjusted returns.

Investments in U.S. Small- and Middle-Market Healthcare Companies. The Company’s portfolio of U.S. small and middle-market investments has a focus on companies in the Healthcare sector, as the Adviser believes there is a large and growing opportunity in this sector. Changes in the Healthcare sector are creating certain investment opportunities, and we believe, should produce attractive investment opportunities. The Company believes some participants are better positioned to take advantage of these changes while others will consolidate with stronger players. Based on our deep understanding of the Healthcare sector, the Company believes these developments will create a changing landscape for years to come.

Active portfolio monitoring. The Adviser will closely monitor the investments in the Company’s portfolio and take a proactive approach to identifying and addressing sector- or company-specific risks. The Adviser will aim to receive and review detailed financial information from portfolio companies no less than quarterly and seek to maintain regular dialogue with portfolio company management teams regarding current income and minimizeforecasted performance. The Company anticipates that many of its investments will have financial covenants that the Company believes will provide an early warning of potential problems facing its borrowers, allowing lenders, including the Company, to identify and carefully manage risk.

Investment Selection

The Adviser has identified the following investment criteria and guidelines that it believes are important in evaluating prospective portfolio companies. However, not all of these criteria and guidelines will be met in connection with each of the Company’s investments.

Established companies with positive cash flow.The Company seeks to invest in companies with sound historical financial performance which the Company believes tend to be well-positioned to maintain consistent cash flow to service and repay their obligations and maintain growth in their businesses or market share. The Adviser will typically focus on companies with a history of profitability on an operating cash flow basis. The Adviser does not intend to invest in start-up companies that have not achieved sustainable profitability and cash flow generation or companies with speculative business plans. 

Strong competitive position in industry. The Adviser will analyze the strengths and weaknesses of target companies relative to their competitors. The factors the Adviser will consider include relative product pricing, product quality, customer loyalty, substitution risk, switching costs, patent protection, brand positioning and capitalization. The Company seeks to invest in companies that have developed leading positions within their respective markets, are well positioned to capitalize on growth opportunities and operate businesses, exhibit the potential to maintain sufficient cash flows and profitability to service their obligations in a range of economic environments or are in industries with significant barriers to entry. The Company seeks companies that demonstrate advantages in scale, scope, customer loyalty, product pricing, or product quality versus their competitors that when compared to their competitors, may help to protect their market position and profitability.

Experienced management team. The Company seeks to invest in companies that have experienced management teams. The Company also seeks to invest in companies that have proper incentives in place, including having significant equity interests, to motivate management to act in concert with its interests as investors.

Diversified customer and supplier base. The Company generally seeks to invest in companies that have a diversified customer and supplier base. Companies with a diversified customer and supplier base are generally better able to endure economic downturns, industry consolidation, changing business preferences and other factors that may negatively impact their customers, suppliers and competitors.

Exit strategy. While certain debt investments may be repaid through operating cash flows of the borrower, the Company expects that the primary means by which it exits its investments will be through methods such as strategic acquisitions by other industry participants, an initial public offering of common stock, a recapitalization, a refinancing or another transaction in the capital markets. In addition, in connection with the Company’s investing activities, it may make commitments with respect to an investment in a potential portfolio company substantially in excess of its final investment. In such situations, while the Company may initially agree to fund up to a certain dollar amount of an investment, it may syndicate a portion of such amount such that it is left with a smaller investment than what was reflected in its original commitment.

Private equity sponsorship. Often the Company will seek to participate in transactions sponsored by what it believes to be high-quality private equity firms. The Company believes that a private equity sponsor’s willingness to invest significant sums of equity capital into a company is an explicit endorsement of the quality of their investment. Further, private equity sponsors of portfolio companies with significant investments at risk have the ability and a strong incentive to contribute additional capital in difficult economic times should operational issues arise.

Investments in Healthcare portfolio companies and related industries. The Company will seek to invest primarily in Healthcare portfolio companies and related industries.

Investment Process Overview

Origination and sourcing. The Adviser will seek to originate transactions through multiple channels. In addition to the decade long relationships with leading financial intermediaries including investment banks, commercial banks, private equity investors and other financial professionals, the Adviser’s transaction team will seek to identify potential investment opportunities in companies to directly source transaction opportunities.

The Adviser intends to make opportunistic equity investments. Through such opportunistic equity investments, the Company intends to identify and capitalize on market price inefficiencies by investing in equity securities where the Company believes the value of such securities reflects a lower value than what the fundamentals of the target company represent based on the fundamental analysis of the company and the broader investment market as a whole. The Company will seek to allocate capital to companies that have been misunderstood or mispriced by the market, and companies that are considered to be in the “development stage” of operation and in need of growth capital. The Company believes there is an opportunity to earn positive returns when targeting companies that possess defensible existing business models and have attractive growth potential.

Evaluation process. In its initial review of an investment opportunity, the Adviser transaction team examines information furnished by the target company and external sources, including rating agencies, if applicable, to determine whether the investment meets the team’s basic investment criteria and other guidelines specified by the Adviser, within the context of proper allocation of its portfolio among various issuers and industries, and offers an acceptable probability of attractive returns with identifiable downside risk.

For the majority of securities available on the secondary market, a comprehensive analysis is conducted and continuously maintained by a dedicated research analyst, the results of which are available for the transaction team to review. In the case of a primary transaction, the Adviser will conduct detailed due diligence investigations as necessary. 

Before undertaking an investment, the transaction team will conduct a thorough due diligence review of the opportunity to ensure the company fits the team’s investment strategy, which may include:

When possible, the Company’s Investment Committee will seek to structure transactions in such a way that the target companies are required to bear the costs of due diligence, including those costs related to any outside consulting work the Company may require.

Execution. The Adviser seeks to maintain a defensive approach toward its investment decisions by emphasizing risk control in its transaction process, which includes (i) the pre-review of each opportunity by one of its portfolio managers to assess the general quality, value and fit relative to the Company’s portfolio and (ii) where possible, transaction structuring with a focus on preservation of capital in varying economic environments. The consummation of a transaction will require majority approval from the members of the Investment Committee.

Portfolio monitoring. The Adviser will monitor the Company’s portfolio with a focus toward anticipating negative credit events. To maintain portfolio company performance and help to ensure a successful exit, the Adviser will work closely with portfolio company management, consultants, advisers and other security holders to discuss financial position, compliance with covenants, financial requirements and execution of the company’s business plan. In addition, depending on the size, nature and performance of the transaction, the Company may occupy a seat or serve as an observer on a portfolio company’s board of directors or similar governing body.

Typically, the Adviser will receive financial reports detailing operating performance, sales volumes, margins, cash flows, financial position and other key operating metrics on a monthly and/or quarterly basis from the portfolio companies. The Adviser will use this data, combined with due diligence gained through contact with the company’s customers, suppliers, competitors, market research and other methods, to conduct an ongoing, rigorous assessment of the company’s operating performance and prospects.

In addition to various risk management and monitoring tools, the Adviser will use an investment rating system to characterize and monitor the expected level of returns on each investment in the Company’s portfolio. The Adviser will use an investment rating scale of 1 to 5. The following is a description of the conditions associated with each investment rating:

The Adviser will continuously monitor and, when appropriate, will change the investment ratings assigned to each investment in the Company’s portfolio. In connection with valuing the Company’s assets, the Board of Directors will review these investment ratings on a quarterly basis. In the event that the Board of Directors or the Investment Committee determines that an investment is underperforming, or circumstances suggest that the risk of capital loss while maintaining the potential for long-term capital appreciation.

Investment expertise across all levels of the corporate capital structure.  Freedom Capital Investment Advisors believes that its broad expertise and experience investing at all levels ofassociated with a company’s capital structure will enable us to manage risk while affording us the opportunity for significant returns on our investments. Weparticular investment has significantly increased, they will attempt to sell the asset in the secondary market, if applicable, or to implement a plan to attempt to exit the investment or to correct the situation. Concurrently, the Adviser will also evaluate the opportunity to exit an investment, through a trade-sale or other liquidity event, opportunities that are outperforming where the Adviser believes it can capitalize on this expertisea rise in an effortthe value of the business relative to producethe initial forecast and maintain an investment portfolio that will perform in a broad range of economic conditions.

Operating and Regulatory Structure

Our investment activities are managed by Freedom Capital Investment Advisors and supervised by our board of directors, a majority of whom are independent. Under our investment advisory and administrative services agreement, we have agreed to pay Freedom Capital Investment Advisors a base management fee based on our average monthly gross assets as well as incentive fees based on our performance. From time to time, Freedom Capital Investment Advisors may enter into sub-advisory relationships with registered investment advisers that possess skills or attributes that Freedom Capital Investment Advisors believes will aid it in achieving our investment objectives. Freedom Capital Investment Advisors may engage a sub-adviser to act as our investment sub-adviser. A sub-adviser may assist Freedom Capital Investment Advisors in identifying investment opportunities and make investment recommendations for approval by Freedom Capital Investment Advisors according to guidelines set by Freedom Capital Investment Advisors.

Freedom Capital Investment Advisors oversees our day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations and other administrative services. Freedom Capital Investment Advisors also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsiblerealize value for the financial records which we are requiredbenefit of investors.

The amount of the portfolio in each grading category may vary substantially from period to maintainperiod resulting primarily from changes in the composition of the portfolio as a result of new investments, repayment and preparing reports for our stockholdersexit activities. In addition, changes in the grade of investments may be made to reflect the Company’s expectation of performance and changes in investment values. 

Each quarter, the Company will value investments in the portfolio, and such values will be disclosed each quarter in reports filed with the SEC. In addition, Freedom Capital Investment Advisors assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.

We will reimburse Freedom Capital Investment AdvisorsInvestments for expenses necessary to perform services related to our administration and operations. The amount of this reimbursementwhich market quotations are readily available will be recorded at such market quotations. With respect to investments for which market quotations are not readily available, the lesserBoard of (1) Freedom CapitalDirectors will determine the fair value of such investments in good faith, utilizing the input of the Investment Advisors’ actual costs incurred in providing suchCommittee, the Company’s valuation committee, the Adviser and any other professionals or materials that the Board of Directors deems worthy and relevant independent third-party pricing services and (2) the amount that we estimate we would be required to pay alternative service providers for comparable services in the same geographic location. Freedom Capital Investment Advisors will be required to allocate the cost of such services to us based on objective factors such as assets, revenues, time allocations and/or other reasonable metrics. Our board of directors will assess the reasonableness of such reimbursements based on the breadth, depth and quality of such services as compared to the estimated cost to us of obtaining similar services fromindependent third-party service providers known to be available. In addition, our board of directors will consider whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, our board of directors will compare the total amount paid to Freedom Capital Investment Advisors for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs. We will not reimburse Freedom Capital Investment Advisors for any services for which it will receive a separate

TABLE OF CONTENTSvaluation firms, if applicable.

fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Freedom Capital Investment Advisors.

We have contracted with Freedom Capital Investment Advisors to provide various accounting and administrative services. We have also contracted with Vigilant Compliance, LLC to provide us with a chief compliance officer and a chief financial officer.

As a BDC, wethe Company must offer, and provide upon request, managerial assistance to its portfolio companies. This assistance could involve, among other things, monitoring the operations of the portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. Depending on the nature of the assistance required, the Adviser will provide such managerial assistance on the Company’s behalf to portfolio companies that request this assistance. To the extent fees are requiredpaid for these services, the Company, rather than the Adviser, will retain any fees paid for such assistance.

Exit. The Company will attempt to complyinvest in securities that may be sold in a privately negotiated over-the-counter market, providing the Company a means by which it may exit the positions. It expects that a large portion of the Company’s portfolio may be sold on this secondary market for the foreseeable future, depending on market conditions. For any investments that are not able to be sold within this market, the Company intends to focus primarily in investing in companies whose business models and growth prospects offer attractive exit possibilities, including an initial public offering of equity securities, a merger, a sale or a recapitalization, in each case with certain regulatory requirements. Also, while we will be permitted to finance investments using debt, our ability to use debt will be limited in certain significant respects pursuant to the 1940 Act. Within the limitspotential for capital gains.

Structure of existing regulation, we will adjust our use of debt, according to market conditions, to the level we believe will allow usInvestments

The Company’s investment objective is to generate maximum risk-adjusted returns.

Investment Types

We anticipatecapital appreciation and, to a lesser extent, current income. The Company anticipates that ourits portfolio will be comprised of investments primarily in common equity, equity-linked and preferred equity securities, and to a lesser extent in senior secured loans, second lien secured loans, and subordinated debt, common equity and preferred equity of private U.S. smallsmall- and middle-market companies. As a non-principal strategy, wethe Company may also invest in original discount instruments.

Freedom Capital Investment Advisors will seek

The Adviser seeks to tailor ourthe Company’s investment focus as market conditions evolve. Depending on market conditions, wethe Company may increase or decrease ourits exposure to lessmore senior portions of the capital structure, where returns tend to be strongerweaker in a more stable or growing economy, but lessmore secure in weak economic environments. Senior secured debt is situated at the top of the capital structure, and typically has the first claim on the assets and cash flows of the company, followed by second lien secured debt, subordinated debt, preferred equity and finally common equity. Due to this priority of cash flows, an investment’s risk increases as it moves further down the capital structure. Investors are usually compensated for this risk associated with junior status in the form of higher returns, either through higher interest payments or potentially higher capital appreciation. WeThe Company will rely on Freedom Capital Investment Advisors’the Adviser’s experience to structure investments, possibly using all levels of the capital structure, which we believethe Company believes will perform in a broad range of economic environments.

Senior Secured Loans

Equity and equity-related securities. The Company intends to focus on equity investments. As a result, the Company will enter into investments in preferred or common equity or convertible bonds, sometimes in conjunction with a private equity sponsor the Company believes to be of high quality. The Company may also invest in preferred or common equity or convertible bonds of private, closely-held companies that the Company believes are under-valued or under-appreciated opportunities where the Adviser’s experience and the Company’s capital can aid in enhancing enterprise value within the target investment time horizon. In addition, the Company may receive the right to make equity investments in a portfolio company whose debt securities the Company holds in connection with the next equity financing round for that company. This right will provide the Company with the opportunity to further enhance its returns over time through equity investments in the portfolio companies. In addition, the Company may hold equity-related securities consisting primarily of warrants or other equity interests. In the future, the Company may achieve liquidity through a merger or acquisition of a portfolio company, a public offering of a portfolio company’s stock or by exercising its right, if any, to require a portfolio company to repurchase the equity-related securities the Company holds. With respect to any preferred or common equity investments, the Company expects to target an annual investment return of at least 20%. There can be no assurance that any preferred or common equity or convertible bond investment that the Company makes will generate such returns. 

Senior secured loans aredebt. Senior secured debt is situated at the top of the capital structure. Because these loans have priority in payment they carry the least risk among all investments in a firm. Generally, ourthe Company’s senior secured loans are expected to have maturities of threetwo to sevenfour years, offer some form of amortization, and have first priority security interests in the assets of the borrower. Generally, we expectthe Company expects that the interest rate on ourthe senior secured loans typically will have variable rates ranging between 3.0% and 7.0% over a standard benchmark, such as the prime rate or LIBOR.

Second Lien Secured Loans

Second lien secured loans aredebt. Second lien secured debt is immediately junior to senior secured loans and have substantially the same maturities, collateral and covenant structures as senior secured loans. Second lien secured loans, however, are granted a second priority security interest in the assets of the borrower. In return for this junior ranking, second lien secured loans generally offer higher returns compared to senior secured debt. These higher returns come in the form of higher interest and in some cases the potential for equity participation through warrants, though to a lesser extent than with subordinated loans. Generally, we expectthe Company expects these loans to carry a fixed or a floating current yield of 6.0% to 10.0% over the prime rate or LIBOR. In addition, wethe Company may receive additional returns from any warrants weit may receive in connection with these investments.

Subordinated Debt

debt. In addition to senior secured and second lien secured loans, wethe Company also may invest a portion of ourits assets in subordinated debt. Subordinated debt investments usually rank junior in priority of payment to senior secured loansdebt and second lien secured loansdebt and are often unsecured but are situated above preferred equity and common stock in the capital structure. In return for their junior status compared to senior secured loansdebt and second lien secured loans,debt, subordinated debt investments typically offer higher returns through both higher interest rates and possible equity ownership in the form of warrants, enabling the lender to participate in the capital appreciation of the borrower. These warrants typically require only a nominal cost to exercise. We intendThe Company intends to generally target subordinated debt with interest-only payments throughout the life of the security,

TABLE OF CONTENTS

with the principal due at maturity. Typically, subordinated debt investments have maturities of five to ten years. Generally, we expectthe Company expects these securities to carry a fixed or a floating current yield of 6.0% to 12.0% over the prime rate or LIBOR. In addition, wethe Company may receive additional returns from any warrants weit may receive in connection with these investments. In some cases, a portion of the total interest may accrue or be PIK.

Equity and Equity-Related Securities

While we intendstructured to maintain our focus on investmentsinclude payment in debt securities, from time to time, when we see the potential for extraordinary gain,kind, or in connection with securing particularly favorable terms in a debt investment, we may enter into non-control investments in preferred or common equity, typically in conjunction with a private equity sponsor we believe to be of high quality. In addition, we typically will receive the right to make equity investments in a portfolio company whose debt securities we hold in connection with the next equity financing round for that company. This right will provide us with the opportunity to further enhance our returns over time through equity investments in our portfolio companies. In addition, we may hold equity-related securities consisting primarily of warrants or other equity interests. In the future, we may achieve liquidity through a merger or acquisition of a portfolio company, a public offering of a portfolio company’s stock or by exercising our right, if any, to require a portfolio company to repurchase the equity-related securities we hold. With respect to any preferred or common equity investments, we expect to target an annual investment return of at least 20%. There can be no assurance that any preferred or common equity investment that we make will generate such returns.PIK components.

Non-U.S. Securities

Wesecurities. The Company may invest in non-U.S. securities, which may include securities denominated in U.S. dollars or in non-U.S. currencies, to the extent permitted by the 1940 Act.

Cash and Cash Equivalents

Wecash equivalents. The Company may maintain a certain level of cash or equivalent instruments to make follow-on investments if necessary, in existing portfolio companies or to take advantage of new opportunities.

Comparison

Portfolio Valuation

The Company determines the net asset value of Targeted Debt Investmentsthe investment portfolio each quarter. The Board of Directors will establish a valuation committee to Corporate Bonds

Loans to private companies are debt instruments that can be compared to corporate bonds to aid an investor’s understanding. As with corporate bonds, loans to private companies can rangeassist it in credit quality depending on security-specific factors, including total leverage, amount of leverage seniorestablishing guidelines and making recommendations to the security in question, variability inBoard of Directors regarding the issuer’s cash flows,valuation of the quality of assets securing debt and the degree to which such assets cover the subject company’s debt obligations. As is the case in the corporate bond market, we will require greater returns for securities that we perceive to carry increased risk.investments. The companies in which we intend to invest may be leveraged, often as a result of leveraged buyouts or other recapitalization transactions, and, in certain cases, will not be rated by national rating agencies. We believe that our targeted debt investments typically will carry ratings from a nationally recognized statistical ratings organization, or NRSRO, and that such ratings generallyvaluation committee will be belowcomprised of all of the Company’s independent directors and certain of the Adviser’s investment grade (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation), which are often referred to as “junk” bonds. To the extent we make unrated investments, we believe that such investments would likely receive similar ratings if they were to be examined by an NRSRO. Compared to below-investment grade corporate bondsprofessionals.

Securities that are typically available topublicly-traded will be valued at the public, our targeted senior secured and second lien secured loan investmentsreported closing price on the valuation date. Securities that are highernot publicly-traded will be valued at fair value as determined in the capital structure, have priority in receiving payment, are securedgood faith by the issuer’s assets, allow the lender to seize collateral if necessary, and generally exhibit higher ratesBoard of recovery in the event of default. Corporate bonds, on the other hand, are often unsecured obligations of the issuer.

The market for loans to private companies possesses several key differences compared to the corporate bond market. For instance, due to a possible lack of debt ratings for certain small and middle-market firms, and also due to the reduced availability of information for private companies, investors must conduct extensive due diligence investigations before committing to an investment. This intensive due diligence process gives the investor significant access to management, which is often not possible in the case of corporate bondholders, who rely on underwriters, debt rating agencies and publicly available information for due diligence reviews and monitoring of corporate issuers. While holding these investments, private debt investors often receive

TABLE OF CONTENTS

monthly or quarterly updates on the portfolio company’s financial performance, along with possible representation on the company’s board of directors, which allows the investor to take remedial action quickly if conditions happen to deteriorate. Due to reduced liquidity, the relative scarcity of capital and extensive due diligence and expertise required on the part of the investor, we believe that private debt securities typically offer higher returns than corporate bonds of equivalent credit quality.

Sources of Income

The primary means through which our stockholders will receive a return of value is through interest income, dividends and capital gains generated by our investments. In addition to these sources of income, we may receive fees paid by our portfolio companies, including one-time closing fees paid at the time each investment is made and monitoring fees paid throughout the term of our investments. Closing fees typically range from 1.0% to 2.0% of the purchase price of an investment, while monitoring fees generally range from 0.25% to 1.0% of the purchase price of an investment annually. In addition, we may generate revenues in the form of commitment, origination, structuring or diligence fees, fees for providing managerial assistance, consulting fees and performance-based fees.

Risk Management

We will seek to limit the downside potential of our investment portfolio by:

Investment Process

The investment professionals at Freedom Capital Investment Advisors have spent their careers identifying, evaluating, underwriting and capitalizing middle-market companies.

Sourcing

Freedom Capital Investment Advisors will seek to originate transactions through multiple channels. In addition to the decade long relationships with leading financial intermediaries including investment banks, commercial banks, private equity investors and other financial professionals, Freedom Capital Investment Advisors’ transaction team will seek to leverage its position as the first Patriotic Responsible Investing manager to identify potential investment opportunities in companies to directly source transaction opportunities.

Evaluation

Initial Review.  In its initial review of an investment opportunity, Freedom Capital Investment Advisors’ transaction team examines information furnished by the target company and external sources, including rating agencies, if applicable, to determine whether the investment meets our basic investment criteria and other guidelines specified by Freedom Capital Investment Advisors, within the context of proper allocation of our portfolio among various issuers and industries, and offers an acceptable probability of attractive returns with identifiable downside risk.

For the majority of securities available on the secondary market, a comprehensive analysis is conducted and continuously maintained by a dedicated Freedom Capital Investment Advisors research analyst, the results of which are available for the transaction team to review. In the case of a primary transaction, Freedom Capital Investment Advisors will conduct detailed due diligence investigations as necessary.

Credit Analysis/Due Diligence.  Before undertaking an investment, the transaction team will conduct a thorough due diligence review of the opportunity to ensure the company fits our investment strategy, which may include:

TABLE OF CONTENTS

When possible, our advisory team will seek to structure transactions in such a way that our target companies are required to bear the costs of due diligence, including those costs related to any outside consulting work we may require.

Execution

Freedom Capital Investment Advisors seeks to maintain a defensive approach toward its investment decisions by emphasizing risk control in its transaction process, which includes (i) the pre-review of each opportunity by one of its portfolio managers to assess the general quality, value and fit relative to our portfolio and (ii) where possible, transaction structuring with a focus on preservation of capital in varying economic environments. The consummation of a transaction will require unanimous approval of the members of Freedom Capital Investment Advisors’ investment committee.

Monitoring

Portfolio Monitoring.  Freedom Capital Investment Advisors will monitor our portfolio with a focus toward anticipating negative credit events. To maintain portfolio company performance and help to ensure a successful exit, Freedom Capital Investment Advisors will work closely with the lead equity sponsor, loan syndicator, portfolio company management, consultants, advisers and other security holders to discuss financial position, compliance with covenants, financial requirements and execution of the company’s business plan. In addition, depending on the size, nature and performance of the transaction, we may occupy a seat or serve as an observer on a portfolio company’s board of directors or similar governing body.

Typically, Freedom Capital Investment Advisors will receive financial reports detailing operating performance, sales volumes, margins, cash flows, financial position and other key operating metrics on a quarterly basis from our portfolio companies. Freedom Capital Investment Advisors will use this data, combined with due diligence gained through contact with the company’s customers, suppliers, competitors, market research and other methods, to conduct an ongoing, rigorous assessment of the company’s operating performance and prospects.

TABLE OF CONTENTS

In addition to various risk management and monitoring tools, Freedom Capital Investment Advisors will use an investment rating system to characterize and monitor the expected level of returns on each investment in our portfolio. Freedom Capital Investment Advisors will use an investment rating scale of 1 to 5. The following is a description of the conditions associated with each investment rating:

Investment Rating		Summary Description
1		Investment exceeding expectations and/or capital gain expected.
2		Performing investment generally executing in accordance with the portfolio company’s business plan — full return of principal and interest expected.
3		Performing investment requiring closer monitoring.
4		Underperforming investment — some loss of interest or dividend possible, but still expecting a positive return on investment.
5		Underperforming investment with expected loss of interest and some principal.

Freedom Capital Investment Advisors will monitor and, when appropriate, will change the investment ratings assigned to each investment in our portfolio.Directors. In connection with valuing our assets, our board of directors will review these investment ratings on a quarterly basis. Inthat determination, the event that our board of directors or advisory team determines that an investment is underperforming, or circumstances suggestCompany expects that the risk associatedAdviser will provide the Board of Directors with a particular investment has significantly increased, they will attempt to sell the asset in the secondary market, if applicable, or to implement a plan to attempt to exit the investment or to correct the situation.

The amount of the portfolio in each grading category may vary substantially from period to period resulting primarily from changes in the composition of the portfolio as a result of new investment, repayment and exit activities. In addition, changes in the grade of investments may be made to reflect our expectation of performance and changes in investment values.

Valuation Process.  Each quarter, we will value investments in our portfolio, and such valuescompany valuations which will be disclosed each quarter in reports filed with the SEC. Investments for which market quotations are readily available will be recorded at such market quotations. based on relevant inputs, including, but not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial statements and forecasts, and valuations prepared by third-party valuation services.

With respect to investments for which market quotations are not readily available, our boardthe Company intends to undertake a multi-step valuation process each quarter, as described below:

Determination of directorsfair value involves subjective judgments and estimates. Accordingly, the notes to the Company’s financial statements will determinerefer to the uncertainty with respect to the possible effect of such valuations and any change in such valuations on the Company’s financial statements. Below is a description of factors that the Board of Directors may consider when valuing the debt and equity investments.

Valuation of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices, the Company may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that the Board of Directors may consider include the borrower’s ability to adequately service its debt, the fair market value of the portfolio company in relation to the face amount of its outstanding debt and the quality of collateral securing the Company’s debt investments.  

For convertible debt securities, fair value will generally approximate the fair value of the debt plus the fair value of an option to purchase the underlying security (the security into which the debt may convert) at the conversion price. To value such an option, a standard option pricing model may be used.

The equity interests in portfolio companies for which there is no liquid public market will be valued at fair value. The Board of Directors, in its analysis of fair value, may consider various factors, such as multiples of EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. All of these factors may be subject to adjustments based upon the particular circumstances of a portfolio company or actual investment position. For example, adjustments to EBITDA may take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items.

The Board of Directors may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. The Board of Directors may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors it deems relevant in assessing the value. Generally, the value of the equity interests in public companies for which market quotations are readily available will be based upon the most recent closing public market price. Portfolio securities that carry certain restrictions on sale will typically be valued at a discount from the public market value of the security.

If the Company receives warrants or other equity-linked securities at nominal or no additional cost in connection with an investment in a debt security, the Board of Directors will allocate the cost basis in the investment between the debt securities and any such warrants or other equity-linked securities received at the time of origination. The Board of Directors will subsequently value these warrants or other equity-linked securities received at fair value.

The fair values of the investments will be determined in good faith utilizingby the inputBoard of management, ourDirectors in consultation with management. The Board of Directors will be solely responsible for the valuation committee, Freedom Capital Investment Advisorsof the portfolio investments at fair value as determined in good faith pursuant to the Company’s valuation policy and any other professionals or materials that our boardconsistently applied valuation process. The Company intends to value all of directors deems worthythe Level 2 and Level 3 assets by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end provided by independent third-party pricing services and screened for validity by such services. For investments for which the third-party pricing service is unable to obtain quoted prices, the Company intends to obtain bid and ask prices directly from dealers who make a market in such investments. To the extent that the Company holds investments for which no active secondary market exists and, therefore, no bid and ask prices can be readily obtained, the Company’s valuation committee intends to utilize an independent third-party valuation firms, if applicable.service to value such investments.

Managerial Assistance.  As a BDC, we must offer,

The Company will periodically benchmark the bid and provide upon request, managerial assistance to certainask prices it receive from the third-party pricing services and/or dealers, as applicable, and valuations received from the third-party valuation service against the actual prices at which the Company purchases and sell the investments. The Company believes that these prices will be reliable indicators of our portfolio companies. This assistance could involve, among other things, monitoring the operationsfair value. The Company’s valuation committee and Board of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. Depending on the nature of the assistance required, Freedom Capital Investment Advisors will provide such managerial assistance on our behalf to portfolio companies that request this assistance. To the extent fees are paid for these services, we, rather than Freedom Capital Investment Advisors, or a sub-adviser, if any, will retain any fees paid for such assistance.

Exit

We will attempt to invest in securities that may be sold in a privately negotiated over-the-counter market, providing us a means by which we may exit our positions. We expect that a large portion of our portfolio may be sold on this secondary market for the foreseeable future, depending on market conditions. For any investments that are not able to be sold within this market, we intend to focus primarily in investing in companies whose business models and growth prospects offer attractive exit possibilities, including repayment of our investments, an initial public offering of equity securities, a merger, a sale or a recapitalization, in each case with the potential for capital gains.

TABLE OF CONTENTS

Staffing

We do not currently have any employees. Each of our executive officers, aside from our chief financial officer and our chief compliance officer is a principal, officer or employee of Freedom Capital Investment Advisors, which manages and oversees our investment operations. Neither our chief financial officer nor our chief compliance officer are affiliated with Freedom Capital Investment Advisors.

Code of Ethics

We and the Advisor have each adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act that establishes procedures for personal investments and restricts certain personal securities transactions. Personnel subject to each code may invest in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments are made in accordance with the code’s requirements. You may read and copy our code of ethics at the SEC’s Public Reference Room in Washington, D.C. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090. In addition, our code of ethics is attached as an exhibit to this Annual Report on Form 10-K, and is available on the EDGAR Database on the SEC’s Internet site athttp://www.sec.gov. You may also obtain copies of our code of ethics, after paying a duplicating fee, by electronic request at the following e-mail address:publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549.

Compliance Policies and Procedures

We and Freedom Capital Investment Advisors have adopted and implemented written policies and procedures reasonably designed to prevent violation of the federal securities laws and are required to review these compliance policies and procedures annually for their adequacy and the effectiveness of their implementation. Our chief compliance officer and the chief compliance officer of Freedom Capital Investment Advisors are responsible for administering these policies and procedures.

Proxy Voting Policies and Procedures

We have delegated our proxy voting responsibility to Freedom Capital Investment Advisors. The proxy voting policies and procedures of Freedom Capital Investment Advisors are set forth below. The guidelines are reviewed periodically by Freedom Capital Investment Advisors and our non-interested directors, and, accordingly, are subject to change.

Freedom Capital Investment Advisors intends to register as an investment adviser with the SEC at such time as we have at least $25 million in assets under management or Freedom Capital Investment Advisors otherwise meets the requirements of being an SEC-registered investment adviser. Freedom Capital Investment Advisors has a fiduciary duty to act solely in the best interests of its clients. As part of this duty, it recognizes that it must vote client securities in a timely manner free of conflicts of interest and in the best interests of its clients.

These policies and procedures for voting proxies for the investment advisory clients of Freedom Capital Investment Advisors are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers Act.

Freedom Capital Investment Advisors will vote proxies relating to our securities in the best interest of its clients’ stockholders. ItDirectors will review on a case-by-case basis each proposal submitted for a stockholder vote to determine its impact onand approve the portfolio securities held by its clients. Although Freedom Capital Investment Advisors will generally vote against proposals that may have a negative impact on its clients’ portfolio securities, it may vote for such a proposal if there exists compelling long-term reasons to do so.

The proxy voting decisions of Freedom Capital Investment Advisors arevaluation determinations made by the senior officers who are responsible for monitoring each of its clients’ investments. To ensure that its vote is not the product of a conflict of interest, it will require that: (a) anyone involved in the decision-making process disclose to its chief compliance officer any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (b) employees involved in the decision making process or vote administration are prohibited from revealing how Freedom Capital Investment Advisors intends to vote on a proposal in order to reduce any attempted influence from interested parties.

TABLE OF CONTENTS

You may obtain information, without charge, regarding how Freedom Capital Investment Advisors voted proxies with respect to our portfolio securities by makingthese investments in a written request for proxy voting information to: Chief Compliance Officer, Freedom Capital Corporation, 1560 Wilson Boulevard, Suite 450, Arlington, VA 22209, or by calling us toll free at (877) 672-1776.

Other

We will be periodically examined by the SEC for compliancemanner consistent with the 1940 Act.Company’s valuation process.

We are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect us against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our stockholders arising from willful misconduct, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person’s office.

Securities Exchange Act and Sarbanes-Oxley Act Compliance

We are subject to the reporting and disclosure requirements of the Exchange Act, including the filing of quarterly, annual and current reports, proxy statements and other required items. In addition, we are subject to the Sarbanes-Oxley Act, which imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements affect us. For example:

The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We intend to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith. In addition, we intend to voluntarily comply with Section 404(b) of the Sarbanes-Oxley Act, and will engage our independent registered public accounting firm to audit our internal control over financial reporting.

Election to be Taxed as a RIC

We intend to elect to be treated as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to pay corporate-level federal income taxes on any income that we distribute to our stockholders from our tax earnings and profits. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements (as described below). In addition, in order to maintain RIC tax treatment, we must distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses, or the Annual Distribution Requirement.

Taxation as a RIC

If we:

then we will not be subject to federal income tax on the portion of our income we distribute (or are deemed to distribute) to stockholders. We will be subject to U.S. federal income tax at the regular corporate rates on any income or capital gains not distributed (or deemed distributed) to our stockholders.

TABLE OF CONTENTS

We will be subject to a 4% nondeductible federal excise tax on certain undistributed income unless we distribute in a timely manner an amount at least equal to the sum of (1) 98% of our net ordinary income for each calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 of that calendar year and (3) any income recognized, but not distributed, in preceding years and on which we paid no federal income tax, or the Excise Tax Avoidance Requirement.

In order to qualify as a RIC for federal income tax purposes, we must, among other things:

For federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash.

Because any original issue discount or other amounts accrued will be included in our investment company taxable income for the year of the accrual, we may be required to make a distribution to our stockholders in order to satisfy the Annual Distribution Requirement, even though we will not have received any corresponding cash amount. As a result, we may have difficulty meeting the Annual Distribution Requirement necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. We may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.

Although we do not presently expect to do so, we are authorized to borrow funds and to sell assets in order to satisfy distribution requirements. However, under the 1940 Act, we are not permitted to make distributions to our stockholders while our debt obligations and other senior securities are outstanding unless certain “asset coverage” tests are met. Moreover, our ability to dispose of assets to meet our distribution requirements may be limited by (1) the illiquid nature of our portfolio and/or (2) other requirements relating to our status as a RIC, including the Diversification Tests. If we dispose of assets in order to meet the Annual Distribution Requirement or the Excise Tax Avoidance Requirement, we may make such dispositions at times that, from an investment standpoint, are not advantageous.

TABLE OF CONTENTS

Before you investITEM 1A. RISK FACTORS 

As described elsewhere in our shares you shouldthis document, StHealth Capital Partners LLC recently entered into an agreement to acquire the Adviser. As a result of the execution of this agreement, there have been significant changes affecting the Company. There can be awareno assurance that the changes resulting from the acquisition by StHealth Capital Partners LLC will be beneficial to the Shareholders.

The Adviser has no prior experience managing a BDC or a RIC.

The Adviser and the members of various risks associated withthe Investment Committee have no prior experience in managing a BDC or a RIC. Therefore, the Adviser may not be able to successfully operate the Company’s business or achieve its investment objectives. As a result, an investment in the Company’s shares of our common stock as well as risks generally associatedmay entail more risk than the shares of common stock of a comparable company with a substantial operating history.

The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to other types of investment vehicles. For example, under the 1940 Act, BDCs are required to invest at least 70% of their total assets primarily in securities of qualifying U.S. private or thinly-traded public companies. Moreover, qualification for RIC tax treatment under Subchapter M of the Code requires satisfaction of source-of-income, diversification and other requirements. The failure to comply with these provisions in a company with investment objectives, investment policies, capital structuretimely manner could prevent the Company from qualifying as a BDC or trading markets similara RIC or could force it to ours. The risks set out below are not the only risks we face. Additional riskspay unexpected taxes and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations. If any of the following events occur, our business, financial condition and results of operationspenalties, which could be materially adversely affected. Inmaterial. The Adviser’s lack of experience in managing a portfolio of assets under such case, our net asset value could declineconstraints may hinder its ability to take advantage of attractive investment opportunities and, you may lose all or part of your investment.as a result, achieve the Company’s investment objectives.

Risks Related to an Investment in Our Common Stock

Our

The Company’s shares will not be listed on an exchange or quoted through a quotation system for the foreseeable future, if ever. Therefore, if youShareholders purchase shares in this offering, it is unlikely that youthey will be able to sell them and, if youthey are able to do so, it is unlikely that youthey will receive a full return of yourtheir invested capital.

Our

The Company’s shares are illiquid assets for which there is not a secondary market and it is not expected that any will develop in the foreseeable future.

There can be no assurance that wethe Company will complete a liquidity event. Even if we doit does complete a liquidity event, youShareholders may not receive a return of all of yourtheir invested capital. In addition, any shares repurchased pursuant to ourthe Company’s share repurchase program may be purchased at a price which may reflect a discount from the purchase price youShareholders paid for the shares being repurchased. If ourthe Company’s shares are listed, weit cannot assure youShareholders that a public trading market will develop.

We are

The Company is not obligated to complete a liquidity event by a specified date; therefore, it will be difficult for an investor to sell his or her shares.

There can be no assurance that wethe Company will complete a liquidity event by a specified date or at all. If we do not successfully complete a liquidity event, liquidity for an investor’s shares will be limited to our share repurchase program, which we have no obligation to maintain.

We established the initial offering price for our shares on an arbitrary basis, and the offering price may not accurately reflect the value of our assets.

The price of our shares prior to satisfying the minimum offering requirement is established on an arbitrary basis and is not based on the amount or nature of our assets or our book value. Therefore, at any given time, the offering price may be higher than the value of our interests in portfolio companies.

Investors will not know the purchase price per share at the time they submit their subscription agreements and could receive fewer shares of common stock than anticipated if our board of directors determines to increase the offering price to comply with the requirement that we avoid selling shares below our net asset value per share.

After satisfying the minimum offering requirement, the purchase price at which you purchase shares will be determined at each monthly closing date to ensure that the sales price, after deducting selling commissions and dealer manager fees, is equal to or greater than the net asset value of our shares. As a result, in the event of an increase in ourCompany’s common stock may fluctuate significantly.

The net asset value per share, your purchase priceof the market for shares of the Company’s common stock may be higher thansignificantly affected by numerous factors, some of which are beyond its control and may not be directly related to its operating performance. These factors include: (i) changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs; (ii) loss of RIC status (once obtained) or BDC status; (iii) changes in earnings or variations in operating results; (iv) changes in the prior monthly closing price per share,value of the Company’s portfolio of investments; (v) changes in accounting guidelines governing valuation of the Company’s investments; (vi) any shortfall in revenue or net income or any increase in losses from levels expected by investors; (vii) departure of the Company’s investment adviser or certain of its key personnel; (viii) general economic trends and therefore you may receiveother external factors; and (ix) loss of a smaller number of shares than if you had subscribed at the prior monthly closing price.major funding source.

We are

The Company has a new company and have nolimited operating history.

We were

The Company was formed on June 19, 2014 and willdid not commence operations until we satisfyFebruary 16, 2017. Notwithstanding the minimum offering requirementforegoing, following the Acquisition and arrival of the new Investment Committee, the Company is looking to take advantage of the investment opportunities in the Healthcare sector. There are no assurances that the new Investment Committee will be able to source attractive investment opportunities for the Company. And as described in our prospectus. We area result, the Company is subject to all of the business risks and uncertainties associated with any new business, including the risk that weit will not achieve ourits investment objectives and that the value of ourits common stock could decline substantially.

TABLE OF CONTENTS

While the Company has limited operating history, the Company does have an existing portfolio consisting of certain loan investments. The Company entered into these investments at the direction of the predecessor investment manager. The Adviser’s management team, in conjunction with the Company’s audit firm, is conducting an analysis and audit of the current portfolio in order to assess a net asset value to the portfolio. However, it is important to note that the investments in the current portfolio may have little or no value. Moreover, while the Adviser may seek to restructure some of the current portfolio investments, there is no guarantee that the Adviser will be successful in doing so. As a new company with no investments, our continuous public offeringresult, Shareholders may be deemedexperience significant losses and may incur additional expenses as the Company seeks to be a “blind pool” offering. reposition its current portfolio.  

An investor may not have the opportunity to evaluate historical data or assess investments prior to purchasing ourits shares.

None of us, Freedom Capital Investment Advisors or a sub-adviser, if any,

While the Adviser has generally not identified, made or contracted to make all of the investments on ourthe Company’s behalf, the Adviser has identified Orchestra Biomed, Inc. (“Orchestra”) as an initial investment for the Company. Orchestra is a therapeutic device company focused on the development and commercialization of high impact, data driven transformational solutions for targeted high value unmet medical needs. Orchestra’s primary focus is on developing new therapies for cardiovascular diseases which are the leading cause of death worldwide. Orchestra is being formed primarily through the combination of Caliber Therapeutics, Inc. and Backbeat Medical, Inc. with the proceedsobjective of creating a diversified therapeutic device company that is able to secure financial resources broadly through the capital markets, deploy expert human resources for product development, and optimize value realization by having flexibility to pursue strategic partnerships, including licensing and global distribution arrangements, as well as direct commercialization or strategic asset transactions.

Aside from our continuous public offering. As a result, youthe Orchestra investment, Shareholders will generally not be able to evaluate the economic merits, transaction terms or other financial or operational data concerning future investments we makethe Company makes using the proceeds from our continuous publicthis offering prior to making a decision to purchase ourits shares. YouShareholders must rely on Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser to implement ourthe Company’s investment policies, to evaluate all of ourits investment opportunities and to structure the terms of ourthe investments rather than evaluating our investmentsthem in advance of purchasing shares of our common stock. Because investors are not able to evaluate ourthe Company’s investments in advance of purchasing ourits shares, ourthe public offering may entail more risk than other types of offerings. This additional risk may hinder yourShareholders’ ability to achieve yourtheir own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

If we are unable to raise substantial funds in our ongoing, continuous “best efforts” public offering, we will be limited in the number and type of investments we may make, and the value of your investment in us may be reduced in the event our assets under-perform.

Our continuous offering is being made on a best efforts basis, whereby the dealer manager and broker-dealers participating in the offering are only required to use their best efforts to sell our shares and have no firm commitment or obligation to purchase any of the shares. Even though we have established a minimum size of our offering necessary for us to release funds from the escrow account and utilize subscription funds, such amount will not, by itself, be sufficient for us to purchase a diversified portfolio of investments. To the extent that less than the maximum number of shares is subscribed for, the opportunity for the allocation of our investments among various issuers and industries may be decreased, and the returns achieved on those investments may be reduced as a result of allocating all of our expenses over a smaller capital base.

Because the dealer manager is one of our affiliates, you will not have the benefit of an independent due diligence review of us, which is customarily performed in firm commitment underwritten offerings; the absence of an independent due diligence review increases the risks and uncertainty faced as a stockholder.

The dealer manager is one of our affiliates. As a result, its due diligence review and investigation of us cannot be considered to be an independent review. Therefore, you do not have the benefit of an independent review and investigation of this offering of the type normally performed by an unaffiliated, independent underwriter in a firm commitment underwritten public securities offering.

Our ability to successfully conduct our continuous offering depends, in part, on the ability of the dealer manager to establish, operate and maintain a network of broker-dealers.

The success of our continuous public offering, and correspondingly our ability to implement our business strategy, depends upon the ability of the dealer manager to establish, operate and maintain a network of licensed securities broker-dealers and other agents to sell our shares. Our dealer manager has not previously served as a dealer manager in a continuous public offering, so there can be no assurance that it will be able to operate and maintain such network of licensed securities broker-dealers and other agents. If the dealer manager fails to perform, we may not be able to raise adequate proceeds through our continuous public offering to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, you could lose all or a part of your investment.

Beginning with the first full calendar quarter following the one year anniversary of the date that we satisfy our minimum offering requirement, we intend to offer to repurchase your shares on a quarterly basis. Only a limited number of shares will be repurchased, however, and, to the extent you are able to sell your shares under the repurchase program, you may not be able to recover the amount of your investment in those shares.

Beginning with the first full calendar quarter following the one year anniversary of the date that we satisfy our minimum offering requirement, we intend to commence tender offers to allow you to tender your shares on a

TABLE OF CONTENTS

quarterly basis at a price equal to 90% of our public offering price in effect on the date of repurchase. The share repurchase program will include numerous restrictions that limit your ability to sell your shares. We intend to limit the number of shares repurchased pursuant to our share repurchase program as follows: (1) we currently intend to limit the number of shares to be repurchased during any calendar year to the number of shares we can repurchase with the proceeds we receive from the sale of shares of our common stock under our distribution reinvestment plan, although at the discretion of our board of directors, we may also use cash on hand, cash available from borrowings and cash from liquidation of securities investments as of the end of the applicable period to repurchase shares; (2) we will limit the number of shares to be repurchased in any calendar year to 10.0% of the number of shares outstanding at the end of the prior calendar year, or 2.5% at the end of the prior quarter (though the actual number of shares that we offer to repurchase may be less in light of the limitations noted above); (3) unless you tender all of your shares, you must tender at least 25% of the number of shares you have purchased and generally must maintain a minimum balance of $5,000 subsequent to submitting a portion of your shares for repurchase by us; and (4) to the extent that the number of shares tendered for repurchase exceeds the number of shares that we are able to purchase, we will repurchase shares on a pro rata basis, not on a first-come, first-served basis. Further, we will have no obligation to repurchase shares if the repurchase would violate the restrictions on distributions under federal law or Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. Any of the foregoing limitations may prevent us from accommodating all repurchase requests made in any year.

In addition, our board of directors may amend, suspend or terminate the share repurchase program upon 30 days’ notice. We will notify you of such developments (1) in our quarterly reports or (2) by means of a separate mailing to you, accompanied by disclosure in a current or periodic report under the Exchange Act. In addition, although we have adopted a share repurchase program, we will have discretion to not repurchase your shares, to suspend the share repurchase program and to cease repurchases. Further, the share repurchase program has many limitations and should not be relied upon as a method to sell shares promptly or at a desired price.

The timing of our repurchase offers pursuant to our share repurchase program may be at a time that is disadvantageous to our stockholders.

When we make quarterly repurchase offers pursuant to our share repurchase program, we may offer to repurchase shares at a price that is lower than the price that investors paid for shares in our offering. As a result, to the extent investors have the ability to sell their shares to us as part of our share repurchase program, the price at which an investor may sell shares, which we expect will be 90% of the offering price in effect on the date of repurchase, may be lower than what an investor paid in connection with the purchase of shares in our offering.

In addition, in the event an investor chooses to participate in our share repurchase program, the investor will be required to provide us with notice of intent to participate prior to knowing what the repurchase price will be on the repurchase date. Although an investor will have the ability to withdraw a repurchase request prior to the expiration date of such tender offer, to the extent an investor seeks to sell shares to us as part of our share repurchase program, the investor will be required to do so without knowledge of what the repurchase price of our shares will be on the repurchase date.

WeCompany may be unable to invest a significant portion of the net proceeds of ourits offering on acceptable terms in an acceptable timeframe.

Delays in investing the net proceeds of ourthe offering may impair ourthe Company’s performance. WeIt cannot assure youShareholders that weit will be able to identify any investments that meet ourits investment objectives or that any investment that we makeit makes will produce a positive return. WeIt may be unable to invest the net proceeds of ourits offering on acceptable terms within the time period that we anticipateit anticipates or at all, which could harm ourits financial condition and operating results.

TABLE OF CONTENTS

Prior to investing in securities of portfolio companies, wethe Company will invest the net proceeds of our continuous publicthis offering primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, which may produce returns that are significantly lower than the returns which we expectthe Company expects to achieve when ourits portfolio is fully invested in securities meeting ourits investment objectives. As a result, any distributions that we payit pays while ourits portfolio is not fully invested in securities meeting ourits investment objectives may be lower than the distributions that weit may be able to pay when ourits portfolio is fully invested in securities meeting ourits investment objectives.

We

The Company may pay distributions from offering proceeds, borrowings or the sale of assets to the extent ourits cash flows from operations, net investment income or earnings are not sufficient to fund declared distributions.

We

The Company may fund distributions from the uninvestedun-invested proceeds of our continuous publican offering and/or borrowings, if any, and borrowings, and we haveit has not established limits on the amount of funds weit may use from net offering proceeds or borrowings to make any such distributions. Wedistributions, if any. It may pay distributions from the sale of assets to the extent distributions exceed ourits earnings or cash flows from operations. Distributions from the proceeds of our continuous publicthe Company’s offering or from borrowings could reduce the amount of capital weit ultimately investinvests in ourits portfolio companies.

A stockholder’sShareholder’s interest in usthe Company will be diluted if we issueit issues additional shares, which could reduce the overall value of an investment in us.

Our investors

Investors will not have preemptive rights to any shares we issuethe Company issues in the future. OurIts charter authorizes usit to issue up to 550,000,000 shares of common stock. Pursuant to ourthe charter, a majority of ourthe Company’s entire boardBoard of directorsDirectors may amend ourthe charter to increase the number of authorized shares of stock without stockholderShareholder approval. After an investor purchases shares, our boardthe Board of directorsDirectors may elect to sell additional shares in the future, issue equity interests in private offerings or issue share-based awards to ourthe Company’s independent directors or employees of Freedom Capital Investment Advisors.the Adviser. To the extent we issuethe Company issues additional equity interests after an investor purchases ourits shares, an investor’s percentage ownership interest in usthe Company will be diluted. In addition, depending upon the terms and pricing of any additional offerings and the value of ourthe Company’s investments, an investor may also experience dilution in the book value and fair value of his or her shares.

Investors

Distribution and Asset Coverage Ratio Requirements May Impact Company’s Ability to Grow.

In order to satisfy the requirements applicable to RICs and to avoid payment of excise taxes, the Company intends to distribute to its Shareholders substantially all of its ordinary income and capital gain net income except for certain net capital gains, which it intends to retain and to elect to treat as deemed distributions to its Shareholders. As a BDC, the Company is generally required to meet a coverage ratio of total assets to total senior securities, which would include all of its borrowings and any preferred stock that it may issue in the future, of at least 200%. This requirement will limit the amount that the Company may borrow. Because the Company will continue to need capital to grow its loan and investment portfolio, this offeringlimitation may prevent the Company from incurring debt and require the Company to raise additional equity at a time when it may be disadvantageous to do so. While the Company expects to be able to borrow and to issue additional debt and equity securities, there is no assurance that debt and equity financing will suffer immediate dilution.

After giving effectbe available to the estimated offering and organizational expenses of $0.15 per share andCompany on favorable terms or at all. In addition, as a BDC, the sales charges of $1.00 per share, ourCompany is not permitted to issue equity securities priced below net asset value per share is estimatedwithout Shareholder and independent director approval. However, if the Company does obtain the necessary approvals to issue securities at prices below their net asset values, a Shareholder’s investment in the Company will experience dilution as a result of such issuance. If additional funds are not available to the Company, the Company could be approximately $8.85 per share comparedforced to a price of $10.00 per share in this offering. Accordingly, investors purchasing shares in this offering will pay a price per share of common stock that exceeds the estimatedcurtail or cease its lending and investment activities, and its net asset value per share of common stock by $1.15 and will indirectly bear the offering and organizational expenses and the sales charges. Actual offering and organizational expenses may be higher than those estimated and such higher expenses would increase the amount of dilution investors in the offering may experience.could decrease.

Certain provisions of ourthe Company’s charter and bylaws, as well as provisions of the Maryland General Corporation Law, could deter takeover attempts and have an adverse impact on the value of ourthe Company’s common stock.

The Maryland General Corporation Law, or the MGCL, and ourthe Company’s charter and bylaws contain certain provisions that may have the effect of discouraging, delaying or making difficult a change in control of our companythe Company or the removal of ourits incumbent directors. Under the Business Combination Act of the MGCL, certain business combinations between usthe Company and an “interested stockholder”shareholder” (defined generally to include any person who beneficially owns 10% or more of the voting power of ourthe Company’s outstanding shares) or an affiliate thereof are prohibited for five years and thereafter isare subject to special stockholdershareholder voting requirements, to the extent that such statute is not superseded by applicable requirements of the 1940 Act. However, our boardthe Board of directorsDirectors has adopted a resolution exempting from the Business Combination Act any business combination between usthe Company and any person to the extent that such business combination receives the prior approval of our boardthe Board of directors,Directors, including a majority of our directors who are not interested persons as defined in the 1940 Act.

Under the Control Share Acquisition Act of the MGCL, “control shares” acquired in a “control share acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled

TABLE OF CONTENTS

to be cast on the matter, excluding shares owned by the acquirer, by officers or by directors who are employees of the corporation. OurThe Company’s bylaws contain a provision exempting from the Control Share Acquisition Act any and all acquisitions by any person of shares of ourits common stock, but such provision may be repealed at any time (before or after a control share acquisition). However, wethe Company will amend ourits bylaws to repeal such provision (so as to be subject to the Control Share Acquisition Act) only if our boardthe Board of directorsDirectors determines that it would be in ourthe Company’s best interests and if the staff of the SEC does not object to ourits determination that ourits being subject to the Control Share Acquisition Act does not conflict with the 1940 Act. The Business Combination Act (if our boardthe Board of directorsDirectors should repeal the resolution) and the Control Share Acquisition Act (if we amend ourthe Company amends its bylaws to be subject to that Act) may discourage others from trying to acquire control of usthe Company and increase the difficulty of consummating any offer.

In addition, at any time that we havethe Company has a class of equity securities registered under the Exchange Act and we haveit has at least three independent directors, certain provisions of the MGCL permit our boardthe Board of directors,Directors, without stockholderShareholder approval and regardless of what is currently provided in ourthe charter or bylaws, to implement certain takeover defenses, including adopting a classified board or increasing the vote required to remove a director.

Moreover, our boardthe Board of directorsDirectors may, without stockholderShareholder action, authorize the issuance of shares of stock in one or more classes or series, including preferred stock; and our boardthe Board of directorsDirectors may, without stockholderShareholder action, amend ourthe charter to increase the number of shares of stock of any class or series that we havethe Company has authority to issue.

These provisions may inhibit a change of control in circumstances that could give the holders of ourthe Company’s common stock the opportunity to realize a premium over the value of oursuch common stock.

Preferred stock could be issued with rights and preferences that would adversely affect holders of the Company’s common stock.

This offering does not include an offering of preferred stock. However, under the terms of the Company’s articles of incorporation, the Board of Directors is authorized to issue shares of preferred stock in one or more series without Shareholder approval, which could potentially adversely affect the interests of existing Shareholders.  

Risks Related to Ourthe Company’s Investments

Our

The Company’s investments in prospective portfolio companies may be risky, and weit could lose all or part of ourits investment.

Our

The Company’s investments in common and preferred equity, and to a lesser extent in senior secured loans, second lien secured loans, and subordinated debt and common and preferred equity of private U.S. companies, including smallsmall- and middle-market companies, may be risky and there is no limit on the amount of any such investments in which wethe Company may invest.

Equity investments. The Company expects to make investments primarily in preferred or common equity interests. In addition, when it invests in senior secured loans, second lien secured loans or subordinated debt, it may acquire warrants to purchase equity securities. The equity interests it receives may not appreciate in value and, in fact, may decline in value. Accordingly, the Company may not be able to realize gains from its equity interests, and any gains that it does realize on the disposition of any equity interests may not be sufficient to offset any other losses it experiences.

First lien and second lien senior secured loansdebt. There is a risk that any collateral pledged by portfolio companies in which we havethe Company has taken a security interest may decrease in value over time or lose its entire value, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the portfolio company to raise additional capital. To the extent ourthe Company’s debt investment is collateralized by the securities of a portfolio company’s subsidiaries, such securities may lose some or all of their value in the event of the bankruptcy or insolvency of the portfolio company. Also, in some circumstances, ourthe Company’s security interest may be contractually or structurally subordinated to claims of other creditors. In addition, deterioration in a portfolio company’s financial condition and prospects, including its inability to raise additional capital, may be accompanied by deterioration in the value of the collateral for the loan. Loans that are under-collateralized involve a greater risk of loss. Consequently, the fact that a loan is secured does not guarantee that wethe Company will receive principal and interest payments according to the loan’s terms, or at all, or that wethe Company will be able to collect on the loan should weit be forced to enforce ourits remedies.

Subordinated debt. OurThe Company’s subordinated debt investments will generally rank junior in priority of payment to senior loans and will generally be unsecured. This may result in a heightened level of risk and volatility or a loss of principal, which could lead to the loss of the entire investment. These investments may involve additional risks that could adversely affect ourthe Company’s investment returns. To the extent interest payments associated with such debt are deferred, such debt may be subject to greater fluctuations in valuations, and such debt could subject usthe Company and our stockholdersits Shareholders to non-cash income. Since wethe Company will not receive any principal repayments prior to the maturity of some of ourits subordinated debt investments, such investments will be of greater risk than amortizing loans.

TABLE OF CONTENTS

Equity investments.  We expect to make equity investments in preferred or common equity interests. In addition, when we invest in senior secured loans, second lien secured loans or subordinated debt, we may acquire warrants to purchase equity securities. The equity interests we receive may not appreciate in value and, in fact, may decline in value. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

Non-U.S. securities.securities  We. The Company may invest in non-U.S. securities, which may include securities denominated in U.S. dollars or in non-U.S. currencies, to the extent permitted by the 1940 Act. Because evidences of ownership of such securities usually are held outside the United States, wethe Company would be subject to additional risks if weit invested in non-U.S. securities, which include possible adverse political and economic developments, seizure or nationalization of foreign deposits and adoption of governmental restrictions which might adversely affect or restrict the payment of principal and interest on the non-U.S. securities to investors located outside the country of the issuer, whether from currency blockage or otherwise. Since non-U.S. securities may be purchased with and payable in foreign currencies, the value of these assets as measured in U.S. dollars may be affected unfavorably by changes in currency rates and exchange control regulations.

In addition, wethe Company intends to invest in securities that are rated below investment grade by rating agencies (rated lower than “Baa3” by Moody’s Investors Service or lower than “BBB-” by Standard & Poor’s Corporation) or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be difficult to value and illiquid.

Our

The Company’s portfolio companies may incur debt that ranks equally with, or senior to, ourthe Company’s investments in such companies.

Our

The Company’s portfolio companies may have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt in which we invest.the Company invests. By their terms, such debt instruments may entitle the holders to receive payment of interest or principal on or before the dates on which we arethe Company is entitled to receive payments with respect to the debt instruments in which we invest.it invests. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to ourthe Company’s investment in that portfolio company would typically be entitled to receive payment in full before we receivethe Company receives any proceeds. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligation to us.the Company. In the case of debt ranking equally with debt instruments in which we invest, wethe Company invests, the Company would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

The Company’s portfolio companies may be highly leveraged.

Some of the Company’s portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to the Company as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

There may be circumstances where our debtthe Company’s investments could be subordinated to claims of other creditors or wethe Company could be subject to lender liability claims.

If one of ourthe Company’s portfolio companies were to go bankrupt, depending on the facts and circumstances, including the extent to which wethe Company actually provided managerial assistance to that portfolio company, a bankruptcy court might recharacterize our debtits investment and subordinate all or a portion of ourits claim to that of other creditors. In situations where a bankruptcy carries a high degree of political significance, ourthe Company’s legal rights may be subordinated to other creditors. WeThe Company may also be subject to lender liability claims for actions taken by usthe Company with respect to a borrower’s business or in instances where we exerciseit exercises control over the borrower or renderrenders significant managerial assistance.

We

Prepayments of the Company’s debt investments by its portfolio companies could adversely impact its results of operations and reduce its return on equity.

The Company is subject to the risk that the investments it makes in its portfolio companies may be repaid prior to maturity. When this occurs, the Company will generally reinvest these proceeds in temporary investments, pending their future investment in new portfolio companies. These temporary investments will typically have substantially lower yields than the debt being prepaid and the Company could experience significant delays in reinvesting these amounts. Any future investment in a new portfolio company may also be at lower yields than the debt that was repaid. As a result, the Company’s results of operations could be materially adversely affected if one or more of its portfolio companies elect to prepay amounts owed to it. Additionally, prepayments, net of prepayment fees, could negatively impact its return on equity.

The Company generally will not control ourits portfolio companies.

We do

The Company does not expect to control most of ourits portfolio companies, even though weit may have board representation or board observation rights, and ourits debt agreements with such portfolio companies may contain certain restrictive covenants. As a result, we arethe Company is subject to the risk that a portfolio company in which we investit invests may make business decisions with which we disagreeit disagrees and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve ourthe Company’s interests as debt investors.

TABLE OF CONTENTS

Due to the lack of liquidity for ourthe Company’s investments in non-traded companies, weit may not be able to dispose of ourits interests in ourits portfolio companies as readily as weit would like or at an appropriate valuation. As a result, a portfolio company may make decisions that could decrease the value of ourthe Company’s portfolio holdings.

We

The Company will be exposed to risks associated with changes in interest rates.

We are

The Company is subject to financial market risks, including changes in interest rates. General interest rate fluctuations may have a substantial negative impact on ourits investments and investment opportunities and, accordingly, have a material adverse effect on ourits investment objectives and ourits rate of return on invested capital. In addition, an increase in interest rates would make it more expensive to use debt for ourthe Company’s financing needs, if any.

Interest rates have recently been at or near historic lows. In the event of a rising interest rate environment, payments under floating rate debt instruments would rise and there may be a significant number of issuers of such floating rate debt instruments that would be unable or unwilling to pay such increased interest costs and may otherwise be unable to repay their loans. Investments in floating rate debt instruments may also decline in value in response to rising interest rates if the interest rates of such investments do not rise as much, or as quickly, as market interest rates in general. Similarly, during periods of rising interest rates, fixed rate debt instruments may decline in value because the fixed rates of interest paid thereunder may be below market interest rates.

Second priority liens on collateral securing debt investments that we will make to our portfolio companies may be subject to control by senior creditors with first priority liens. If there is a default, the value of the collateral may not be sufficient to repay in full both the first priority creditors and us.

Certain debt investments that we intend to make in portfolio companies may be secured on a second priority basis by the same collateral securing first priority debt of such companies. The first priority liens on the collateral will secure the portfolio company’s obligations under any outstanding senior debt and may secure certain other future debt that may be permitted to be incurred by such company under the agreements governing the loans. The holders of obligations secured by the first priority liens on the collateral will generally control the liquidation of and be entitled to receive proceeds from any realization of the collateral to repay their obligations in full before us. In addition, the value of the collateral in the event of liquidation will depend on market and economic conditions, the availability of buyers and other factors. There can be no assurance that the proceeds, if any, from the sale or sales of all of the collateral would be sufficient to satisfy the debt obligations secured by the second priority liens after payment in full of all obligations secured by the first priority liens on the collateral. If such proceeds are not sufficient to repay amounts outstanding under the debt obligations secured by the second priority liens, then we, to the extent not repaid from the proceeds of the sale of the collateral, will only have an unsecured claim against such company’s remaining assets, if any.

The rights we may have with respect to the collateral securing the debt investments we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of senior debt. Under such an intercreditor agreement, at any time that obligations that have the benefit of the first priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first priority liens: the ability to cause the commencement of enforcement proceedings against the collateral; the ability to control the conduct of such proceedings; the approval of amendments to collateral documents; releases of liens on the collateral; and waivers of past defaults under collateral documents. We may not have the ability to control or direct such actions, even if our rights are adversely affected.

Economic recessions or downturns could impair ourthe Company’s portfolio companies and harm ourits operating results.

Many of ourthe Company’s portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay ourthe Company’s debt investments during these periods. Therefore, ourthe Company’s non-performing assets are likely to increase, and the value of ourits portfolio is likely to decrease, during these periods. Adverse economic conditions may also decrease the value of any collateral securing ourits first lien or second lien secured loans. A prolonged recession may further decrease the value of such collateral and result in losses of value in ourits portfolio and a decrease in ourits revenues, net income and net asset value. Unfavorable economic conditions

TABLE OF CONTENTS

also could increase ourits funding costs, limit ourits access to the capital markets or result in a decision by lenders not to extend credit to usthe Company on terms we deemit deems acceptable. These events could prevent usthe Company from increasing investments and harm ourits operating results.

A covenant breach by ourthe Company’s portfolio companies may harm ourits operating results.

A portfolio company’s failure to satisfy financial or operating covenants imposed by usthe Company or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. Wethe Company holds. The Company may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.

Investing in smallsmall- and middle-market companies involves a number of significant risks, any one of which could have a material adverse effect on ourthe Company’s operating results.

Investments in smallsmall- and middle-market companies involve some of the same risks that apply generally to investments in larger, more established companies. However, such investments have more pronounced risks in that they:

We

●

may have limited financial resources and may be unable to meet their obligations under their debt securities that the Company holds, which may be accompanied by a deterioration in the value of any collateral pledged under such securities and a reduction in the likelihood of the Company realizing any guarantees it may have obtained in connection with its investment;

●

have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tends to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;

●

are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on the portfolio company and, in turn, on the Company;

●

generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, the Company’s executive officers, directors and members of the Adviser may, in the ordinary course of business, be named as defendants in litigation arising from the Company’s investments in the portfolio companies; and

●

may have difficulty accessing the capital markets to meet future capital needs, which may limit their ability to grow or to repay their outstanding indebtedness upon maturity.

The Company may not realize gains from ourits equity investments.

Certain investments that wethe Company may make may include warrants or other equity-linked securities. In addition, wethe Company may make direct equity investments in portfolio companies. The equity interests we receiveit receives may not appreciate in value and, in fact, may decline in value. Accordingly, wethe Company may not be able to realize gains from ourits equity interests, and any gains that we doit does realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience. Weit experiences. It also may be unable to realize any value if a portfolio company does not have a liquidity event, such as a sale of the business, recapitalization or public offering, which would allow usthe Company to sell the underlying equity interests. WeThe Company may be unable to exercise any put rights we acquire,it acquires, which grant usit the right to sell ourits equity securities back to the portfolio company, for the consideration provided in ourits investment documents if the issuer is in financial distress.

TABLE OF CONTENTS

An investment strategy focused primarily on privately-held companies presents certain challenges, including the lack of available information about these companies.

We intend

The Company intends to invest primarily in privately-held companies. Investments in private companies pose significantly greater risks than investments in public companies. First, private companies have reduced access to the capital markets, resulting in diminished capital resources and the ability to withstand financial distress. As a result, these companies, which may present greater credit risk than public companies, may be unable to meet their obligations under their debt securities that we hold.the Company holds. Second, the investments themselves often may be illiquid. The securities of many of the companies in which we invest arethe Company invests will not be publicly-traded or actively traded on the secondary market and, to the extent they are instead, traded at all, will only trade on a privately negotiated over-the-counter secondary market for institutional investors. In addition, such securities may be subject to legal and other restrictions on resale. As such, wethe Company may have difficulty exiting an investment promptly or at a desired price prior to maturity or outside of a normal amortization schedule. These investments may also be difficult to value because little public information generally exists about private companies, requiring an experienced due diligence team to analyze and value the potential portfolio company. Finally, these companies may not have third-party debt ratings or audited financial statements. WeThe Company must therefore rely on the ability of Freedom Capital Investment Advisors and/or a sub-adviser, if any,the Adviser to obtain adequate information through due diligence to evaluate the creditworthiness and potential returns from investing in these companies. These companies and their financial information will generally not be subject to the Sarbanes-Oxley Act and other rules and regulations that govern public companies. If we arethe Company is unable to uncover all material information about these companies, weit may not make a fully informed investment decision, and weit may lose money on ourits investments.

A lack of liquidity in certain of ourthe Company’s investments may adversely affect ourits business.

We intend

The Company intends to invest in certain companies whose securities are not publicly-traded or actively traded on the secondary market and are, instead, traded on a privately negotiated over-the-counter secondary market for institutional investors and whose securities will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly-traded securities. The illiquidity of certain of ourthe Company’s investments may make it difficult for usit to sell these investments when desired. In addition, if we areit is required to liquidate all or a portion of ourits portfolio quickly, wethe Company may realize significantly less than the value at which weit had previously recorded these investments. The reduced liquidity of ourits investments may make it difficult for usit to dispose of them at a favorable price, and, as a result, wethe Company may suffer losses.

We

The Company may not have the funds or ability to make initial or additional investments in its portfolio companies.

It is possible that wethe Company will not be able to identify a sufficient number of attractive investment opportunities that meet our subjective Patriotic Responsible Investingits investment criteria. In this case, weit may not achieve the investment returns weit would have received if weit had not applied our subjective Patriotic Responsible Investing analysisits investment criteria to each available investment opportunity. In addition, weit may not have the funds or ability to make additional investments in ourits portfolio companies. There is no assurance that weit will make, or will have sufficient funds to make, follow-on investments. Any decisions not to make a follow-on investment or any inability on ourits part to make such an investment may have a negative impact on a portfolio company in need of such an investment, may result in a missed opportunity for usthe Company to increase ourits participation in a successful operation or may reduce the expected return on the investment.

Our portfolio may include investments in CLOs, which involve a number of risks, any one of which could have a material adverse effect on our operating results.

CLOs issue classes or “tranches” that vary in risk and yield, and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and disappearance of subordinate tranches, market anticipation of defaults, and investor aversion to CLO securities as a class.

The risks of investing in CLOs depend largely on the type of the underlying loans and the tranche of the CLO in which we invest. CLOs carry risks, including: (1) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (2) the quality of the collateral may decline in value or default; (3) the possibility that the CLO securities are subordinate to other classes; and (4) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.

TABLE OF CONTENTS

Failure (or increased likelihood of failure) of a CLO to make timely payments on a particular tranche will have an adverse effect on the liquidity and market value of such tranche. Payments to holders of CLOs may be subject to deferral. If cash flows generated by the underlying assets are insufficient to make all current and, if applicable, deferred payments on the CLOs, no other assets will be available for payment of the deficiency and, following realization of the underlying assets, the obligations of the issuer to pay such deficiency will be extinguished. The value of CLO securities also may change because of changes in the market’s perception of the creditworthiness of the servicing agent for the pool, the originator of the pool, or the financial institution or fund providing the credit support or enhancement. Furthermore, the leveraged nature of each subordinated class may magnify the adverse impact on such class of changes in the value of the assets, changes in the distributions on the assets, defaults and recoveries on the assets, capital gains and losses on the assets, prepayment on the assets and availability, price and interest rates of the assets. CLOs are limited recourse, may not be paid in full and may be subject to up to 100% loss. CLOs are typically privately offered and sold, and thus are not registered under the securities laws.

OurCompany’s investments may include original issue discount instruments.

To the extent that we investthe Company invests in original issue discount instruments, which is not contemplated as a principal part of ourits investment strategy, and the accretion of original issue discount constitutes a portion of ourits income, weit will be exposed to risks associated with the requirement to include such non-cash income in taxable and accounting income prior to receipt of cash, including the following:

●

Original issue discount instruments may have unreliable valuations because the accruals require judgments about collectability;

●

For accounting purposes, cash distributions to investors representing original issue discount income do not come from paid-in capital, although they may be paid from offering proceeds. Thus, although a distribution of original issue discount income may come from the cash invested by investors, the 1940 Act does not require that investors be given notice of this fact;

●

The deferral of paid-in-kind, or PIK, interest may have a negative impact on liquidity, as it represents non-cash income that may require cash distributions to Shareholders in order to maintain the Company’s RIC election;

●

PIK interest generates investment income and increases the incentive fees payable at a compounding rate. In addition, the deferral of PIK interest also reduces the loan-to-value ratio at a compounding rate; and

●

Original issue discount may create a risk of non-refundable cash payments to the Adviser based on non-cash accruals that may never be realized.

Risks Related to Ourthe Company’s Business and Structure

Our board

The Board of directorsDirectors may change ourthe Company’s operating policies and strategies without prior notice or stockholderShareholder approval, the effects of which may be adverse.

Our board

The Board of directorsDirectors has the authority to modify or waive ourthe Company’s current operating policies, investment criteria and strategies without prior notice and without stockholderShareholder approval. WeThe Company cannot predict the effect any changes to ourits current operating policies, investment criteria and strategies would have on ourits business, net asset value, operating results and the value of ourits stock. However, the effects might be adverse, which could negatively impact ourits ability to pay youShareholders distributions and cause youShareholders to lose all or part of yourtheir investment. Moreover, wethe Company will have significant flexibility in investing the net proceeds of ourits public offering of common stock and may use the net proceeds from such offering in ways with which investors may not agree or for purposes other than those contemplated in the prospectusMemorandum relating to our continuous publicthe Company’s offering. Finally, since ourthe Company’s shares are not expected to be listed on a national securities exchange, youShareholders will be limited in yourtheir ability to sell yourtheir shares in response to any changes in ourthe Company’s investment policy, operating policies, investment criteria or strategies.

TABLE OF CONTENTS

Price declines

The Company’s investments in the large corporate leveraged loan market may adversely affectHealthcare sector are subject to numerous risks, including competition, extensive government regulation and commercial difficulties.

The Company’s investments in portfolio companies in the fair valueHealthcare sector, particularly in the biopharmaceuticals, and medical technologies and facilities sub-sectors are subject to numerous risks. The successful and timely implementation of our syndicated loanthe business model of the Company’s portfolio reducing our net asset value through increased net unrealized depreciation.

Priorcompanies depends on their ability to adapt to changing technologies and introduce new products. As competitors continue to introduce competitive products, the development and acquisition of innovative products and technologies that improve efficacy, safety and cost-effectiveness are important to the onsetsuccess of such portfolio companies. The success of new product offerings will depend on many factors, including the financial crisis, collateralized loan obligations,ability to properly anticipate and satisfy customer needs, obtain regulatory approvals on a timely basis, develop and manufacture products in an economic and timely manner, obtain or CLOs, a typemaintain advantageous positions with respect to intellectual property, and differentiate products from those of leveraged investment vehicle holding corporate loans, hedge funds andcompetitors. Failure by the portfolio companies to introduce planned products or other highly leveraged investment vehicles comprised a substantial portion of the market for purchasing and holding first and second lien secured loans. As the secondary market pricing of the loans underlying these portfolios deteriorated during the fourth quarter of 2008, it is our understanding that many investors, as a result of their generally high degrees of leverage, were forcednew products or to raise cash by selling their interests in performing loans in order to satisfy margin requirements or the equivalent of margin requirements imposed by their lenders. This resulted in a forced deleveraging cycle of price declines, compulsory sales and further price declines, with widespread redemption requests and other constraints resulting from the credit crisis generating further selling pressure. This pervasive forced selling and the resultant price declines eliminated or significantly impaired many of our leveraged competitors for investment opportunities, especially those having built their investment portfolios prior to the financial crisis.

Conditions in the large corporate leveraged loan market may experience similar disruption or deterioration, which may cause pricing levels to similarly decline or be volatile. As a result, we may suffer unrealized depreciation and could incur realized losses in connection with the sale of our syndicated loans, whichintroduce products on schedule could have a material adverse impacteffect on ourthe Company’s business, financial condition and results of operations.

Economic activity

Further, the development of products by biopharmaceuticals, devices, life sciences and facilities companies in the Healthcare sector requires significant research and development, clinical trials and regulatory approvals.

Changes in healthcare laws and other regulations applicable to some of our portfolio companies’ businesses may constrain their ability to offer their products and services.

There has also been an increased political and regulatory focus on healthcare laws in recent years, and new legislation could have a material effect on the business and operations of some of the Company’s portfolio companies by increasing their compliance and other costs of doing business, requiring significant systems enhancements, or rendering their products or services less profitable or obsolete. In particular, the Food and Drug Administration (“FDA”), has established regulations, guidelines and policies to govern the development and approval of pharmaceuticals and medical devices, as have foreign regulatory authorities, which may affect some of the Company’s portfolio companies. Any change in regulatory requirements due to the adoption by the FDA and/or foreign regulatory authorities of new legislation, regulations, or policies may require some of the portfolio companies to amend existing clinical trial protocols or add new clinical trials to comply with these changes. Such amendments to existing protocols and/or clinical trial applications or the need for new ones, may significantly impact the cost, timing and completion of the clinical trials.

The capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets in the United States was adversely impacted byand abroad, which may have a negative impact on the Company’s business and operations.

From time to time, capital markets may experience periods of disruption and instability. For example, between approximately 2008 and 2009, the global financial crisis of 2008 and has yet to fully recover.

Beginningcapital markets were unstable as evidenced by periodic disruptions in liquidity in the third quarter of 2007, global credit and other financialdebt capital markets, suffered substantial stress, volatility, illiquidity and disruption. These forces reached extraordinary levelssignificant write-offs in late 2008, resulting in the bankruptcy of, the acquisition of, or government intervention in the affairs of several major domestic and international financial institutions. In particular, the financial services sector, was negatively impacted by significant write-offs as the valuere-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the assets held byU.S. federal government and foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial firms declined, impairing their capital positions and abilities to lendcredit markets and invest. We believe that such value declines were exacerbated by widespread forced liquidations as leveraged holdersreduced the availability of financial assets, faced with declining prices, were compelled to sell to meet margin requirements and maintain compliance with applicable capital standards. Such forced liquidations also impaired or eliminated many investors and investment vehicles, leading to a decline in the supply of capital for investment and depressed pricing levels for many assets. These events significantly diminished overall confidence in the debt and equity markets, engendered unprecedented declinescapital for the market as a whole and financial services firms in particular. While market conditions have largely recovered from the events of that period, there have been continuing periods of volatility, some lasting longer than others. For example, the referendum by British voters to exit the European Union in June 2016 and the United Kingdom’s subsequent invocation of Article 50 of the Treaty on the European Union in March 2017 have led to further disruption and instability in the valuesglobal markets. Disruptions in the capital markets increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of certain assetsthe capital markets. There can be no assurance these market conditions will not continue or worsen in the future. If similar adverse and caused extreme economic uncertainty.

Economic activity remains subdued as unemployment rates remain high. Despite this, corporate interest rate risk premiums, otherwise known as credit spreads, have declined significantly. However, deterioration of economic andvolatile market conditions occur in the future, the Company and other companies in the financial services sector may have to access, if available, alternative markets for debt and equity capital in order to grow.

Equity capital may be difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, the Company is generally not able to issue additional equity at a price less than net asset value per unit or per share, as applicable, without first obtaining approval for the issuance from its equity holders and its non-interested directors. Volatile economic conditions may lead to strategic initiatives such as the recent increase in merger activity in the BDC space.

Volatility and dislocation in the capital markets can also create a challenging environment in which to raise or access debt capital. The reappearance of market conditions similar to those experienced from approximately 2008 through 2009 for any substantial length of time could negatively impact credit spreads as well as ourmake it difficult to extend the maturity of or refinance the Company’s indebtedness or obtain new indebtedness with similar terms, and any failure to do so could have a material adverse effect on the Company’s business. The debt capital that will be available to the Company in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what the Company currently experiences. If the Company is unable to raise or refinance debt, then their equity investors may not benefit from the potential for increased returns on equity resulting from leverage, and the Company may be limited in its ability to obtain financing, particularly fromfund existing portfolio companies, and the debt markets.Company may be limited in its ability to make new investment commitments.  

The downgrade

Significant changes or volatility in the capital markets may also have a negative effect on the valuations of the U.S. credit ratinginvestments. While the Company investments are generally not publicly traded, applicable accounting standards requires it to assume as part of the valuation process that investments are sold in a principal market to market participants (even if it plans on holding an investment through its maturity).

Significant changes in the capital markets may also affect the pace of the Company’s investment activity and the potential for liquidity events involving the investments. Moreover, investments that are liquid at the time of purchase may subsequently become illiquid due to events relating to the issuer, market events, economic crisisconditions or investor perceptions. Thus, the illiquidity of the investments may make it difficult for the Company to sell such investments to access capital if required, and as a result, the Company could realize significantly less than the value at which it has recorded the investments if it were required to sell them for liquidity purposes. In addition, a prolonged period of market illiquidity could adversely affect the Company’s portfolio investments.

Uncertainty about the financial stability of the United States, China and several countries in Europe could negatively impact ourhave a significant adverse effect on the Company’s business, financial condition and results of operations.

In

Due to federal budget deficit concerns, in August 2011 and then affirmed in August 2013, Standard & Poor’s RatingsFinancial Services lowered its long-term sovereignLLC (“S&P”) downgraded the federal government’s credit rating on the U.S. from “AAA” to “AA+”. In June 2013, Standard & Poor’sFurther, Moody’s Investor Services, Inc. and Fitch Ratings Services affirmed this “AA+”Inc. had warned that they may downgrade the federal government’s credit rating. In January 2012, Standard & Poor’s Ratings Services lowered its long-term sovereignFurther downgrades or warnings by S&P or other rating agencies, and the United States government’s credit rating for France, Italy, Spain and six other European countries, which has negatively impacted global markets and economic conditions. In addition, in April 2012, Standard & Poor’s Ratings Services further lowered its long-term sovereign credit rating for Spain. Recent U.S. budget deficit concerns together with signs of deteriorating sovereign debt conditions in Europe, have increased the possibility of additional credit-rating downgrades and economic slowdowns. The impact of any further downgrade to the U.S. government’s sovereign credit rating, or its perceived creditworthiness, and the impact of the current crisis in Europe with respect to the ability of certain European Union countries to continue to service their sovereign debt obligations is inherently unpredictable and could adversely affect the U.S. and global financial markets and economic conditions. In addition, the economic downturn and the significant government interventions into the financial markets and

TABLE OF CONTENTS

fiscal stimulus spending over the last several years have contributed to significantly increased U.S. budget deficits. There can be no assurance that future fiscal or monetary measures to aid economic recovery will be effective. These developments and reactions of the credit markets toward these developmentsgeneral, could cause interest rates and borrowing costs to rise, which may negatively impact ourboth the perception of credit risk associated with the Company’s debt portfolio and its ability to obtainaccess the debt financingmarkets on favorable terms. In addition, any adversea decreased U.S. government credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on the Company’s financial performance and the value of its equity.

Deterioration in the economic conditions resulting fromin the Eurozone and globally, including instability in financial markets, may pose a risk to the Company’s business. In recent years, financial markets have been affected at times by a number of global macroeconomic and political events, including the following: large sovereign debts and fiscal deficits of several countries in Europe and in emerging markets jurisdictions, levels of non-performing loans on the balance sheets of European banks, the potential effect of any further downgradeEuropean country leaving the Eurozone, the potential effect of the U.S. government’s sovereign credit rating orUnited Kingdom leaving the European Union, the potential effect of Scotland leaving the United Kingdom, and market volatility and loss of investor confidence driven by political events, including the general elections in the United Kingdom in June 2017 and in Germany in September 2017 and referenda in the United Kingdom in June 2016 and Italy in December 2016. In addition, in the second quarter of 2015, stock prices in China experienced a significant drop, resulting primarily from continued sell-off of shares trading in Chinese markets. In addition, in August 2015, Chinese authorities sharply devalued China’s currency. Since then, the Chinese capital markets have continued to experience periods of instability. Market and economic crisisdisruptions have affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. We cannot assure you that market disruptions in Europe, China or elsewhere, including the increased cost of funding for certain governments and financial institutions, will not impact the global economy, and we cannot assure you that assistance packages will be available, or, if available, sufficient to stabilize countries and markets in Europe, China or elsewhere affected by a financial crisis. To the extent uncertainty regarding any economic recovery in Europe, China or elsewhere negatively impacts consumer confidence and consumer credit factors, the Company’s business, financial condition and results of operations could be significantly and adversely affected.

 These market and economic disruptions have affected, and may in the future affect, the U.S. capital markets, which could adversely affect the Company’s business, financial condition and results of operations.

As a result of the 2016 U.S. election, the Republican Party currently controls both the executive and legislative branches of government, which increases the likelihood that legislation may be adopted that could significantly affect the regulation of U.S. financial markets. Areas subject to potential change, amendment or repeal include the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the authority of the Federal Reserve and the Financial Stability Oversight Council. These or other regulatory changes could result in greater competition from banks and other lenders with which the Company competes for lending and other investment opportunities. The United States may also potentially withdraw from or renegotiate various trade agreements and take other actions, such as imposing new trade tariffs, which would change current trade policies of the United States or lead to a potential trade dispute. It is not possible to predict which, if any, of these actions will be taken or, if taken, their effect on the financial stability of the United States. Such actions could have a material adverse effect on ourthe Company’s business, financial condition and results of operations.

Our

The Company’s ability to achieve ourits investment objectives depends on the ability of Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser to manage and support ourthe Company’s investment process. If Freedom Capital Investment Advisors or a sub-adviser, if any,the Adviser were to lose any members of their respective senior management teams, ourits Investment Committee, the Company’s ability to achieve ourits investment objectives could be significantly harmed.

Since we havethe Company has no employees, weit will depend on the investment expertise, skill and network of business contacts of Freedom Capital Investment Advisors and a sub-adviser, if any. Freedom Capital Investment Advisors, with the assistance of a sub-adviser, if any,Adviser. The Adviser will evaluate, negotiate, structure, execute, monitor and service ourthe Company’s investments. OurIts future success will depend to a significant extent on the continued service and coordination of Freedom Capital Investment Advisorsthe Adviser and its senior management team. The departure of any members of Freedom Capital Investment Advisors’the Adviser’s senior management team could have a material adverse effect on ourthe Company’s ability to achieve ourits investment objectives.

Likewise, the departure of any key employees of a sub-adviser, if any, may impact its ability to render services to us under the terms of a subadvisory agreement with Freedom Capital Investment Advisors.

OurThe Company’s ability to achieve ourits investment objectives will depend on Freedom Capital Investment Advisors’the Adviser’s ability with the assistance of a sub-adviser, if any, to identify, analyze, invest in, finance and monitor companies that meet ourthe Company’s investment criteria. Freedom Capital Investment Advisors’The Adviser’s capabilities in structuring the investment process, providing competent, attentive and efficient services to us,the Company, and facilitating access to financing on acceptable terms depend on the employment of investment professionals in an adequate number and of adequate sophistication to match the corresponding flow of transactions. To achieve ourthe Company’s investment objectives, Freedom Capital Investment Advisorsthe Adviser may need to hire, train, supervise and manage new investment professionals to participate in ourits investment selection and monitoring process. Freedom Capital Investment AdvisorsThe Adviser may not be able to find investment professionals in a timely manner or at all. Failure to support ourthe Company’s investment process could have a material adverse effect on ourits business, financial condition and results of operations.

In addition, both the investment advisory and administrative services agreement and a sub-advisory agreement, if any, that Freedom Capital Investment Advisors has entered into with us and a sub-adviser, if any, respectfully, have termination provisions that allow the parties to terminate the agreements without penalty. The investment advisory and administrative services agreement may be terminated at any time, without penalty, by Freedom Capital Investment Advisors, upon 120 days’ notice to us. Any sub-advisory agreement, if any, is expected to be terminable at any time, without the payment of any penalty, upon 60 days’ written notice by a sub-adviser or, if our board of directors or the holders of a majority of our outstanding voting securities determine that a sub-advisory agreement, if any, with a sub-adviser should be terminated, by Freedom Capital Investment Advisors. If either agreement is terminated, it may adversely affect the quality of our investment opportunities. In addition, in the event such agreements are terminated, it may be difficult for us to replace Freedom Capital Investment Advisors or for Freedom Capital Investment Advisors to replace a sub-adviser, if any. Furthermore, the termination of either of these agreements may adversely impact the terms of any financing facility into which we may enter, which could have a material adverse effect on our business and financial condition.

Because ourits business model depends to a significant extent upon relationships with private equity sponsors, investment banks and commercial banks, the inability of Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser to maintain or develop these relationships, or the failure of these relationships to generate investment opportunities, could adversely affect ourthe Company’s business.

If Freedom Capital Investment Advisors or a sub-adviser, if any, failthe Adviser fails to maintain theirits existing relationships with private equity sponsors, investment banks and commercial banks, on which they relyit relies to provide usthe Company with

TABLE OF CONTENTS

potential investment opportunities, or develop new relationships with other sponsors or sources of investment opportunities, wethe Company may not be able to grow ourits investment portfolio. In addition, individuals with whom Freedom Capital Investment Advisors and a sub-adviser, if any, havethe Adviser has relationships are not obligated to provide usthe Company with investment opportunities, and, therefore, there is no assurance that such relationships will generate investment opportunities for us.the Company.

We

The Company may face increasing competition for investment opportunities, which could delay deployment of ourits capital, reduce returns and result in losses.

We compete

The Company competes for investments with other BDCs and investment funds (including private equity funds, mezzanine funds and CLO funds), as well as traditional financial services companies such as commercial banks and other sources of funding. Moreover, alternative investment vehicles, such as hedge funds, have begun to invest in areas in which they have not traditionally invested, including making investments in mid-sized private U.S. companies. As a result of these new entrants, competition for investment opportunities in smallsmall- and middle-market private U.S. companies may intensify. Many of ourthe Company’s competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do.the Company does. For example, some competitors may have a lower cost of capital and access to funding sources that are not available to us.it. In addition, some of ourits competitors may have higher risk tolerances or different risk assessments than we have.it has. These characteristics could allow ourits competitors to consider a wider variety of investments, establish more relationships and offer better pricing and more flexible structuring than we arethe Company is able to do. WeIt may lose investment opportunities if we doit does not match ourits competitors’ pricing, terms and structure. If we areit is forced to match ourits competitors’ pricing, terms and structure, weit may not be able to achieve acceptable returns on ourits investments or may bear substantial risk of capital loss. A significant part of ourits competitive advantage stems from the fact that the market for investments in smallsmall- and middle-market private U.S. companies is underserved by traditional commercial banks and other financial sources. A significant increase in the number and/or the size of ourthe Company’s competitors in this target market could force usit to accept less attractive investment terms. Furthermore, many of ourits competitors have greater experience operating under, or are not subject to, the regulatory restrictions that the 1940 Act imposes on usthe Company as a BDC.

A significant portion of ourthe Company’s investment portfolio will be recorded at fair value as determined in good faith by our boardthe Board of directorsDirectors and, as a result, there will be uncertainty as to the value of ourthe Company’s portfolio investments.

Under the 1940 Act, we arethe Company is required to carry ourits portfolio investments at market value or, if there is no readily available market value, at fair value as determined by our boardthe Board of directors.Directors. There will not be a public market for the securities of the privately-held companies in which we intendthe Company intends to invest. Many of our investments will not be publicly-traded or actively traded on a secondary market but, instead, will be traded on a privately negotiated over-the-counter secondary market for institutional investors. As a result, weit will value these securities quarterly at fair value as determined in good faith by our boardthe Board of directors.Directors.

Certain factors that may be considered in determining the fair value of ourthe Company’s investments include dealer quotes for securities traded on the secondary market for institutional investors, the nature and realizable value of any collateral, the portfolio company’s earnings and its ability to make payments on its indebtedness, the markets in which the portfolio company does business, comparison to comparable publicly-traded companies, discounted cash flow and other relevant factors. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, ourthe Company’s determinations of fair value may differ materially from the values that would have been used if a ready market for these non-traded securities existed. Due to this uncertainty, ourthe Company’s fair value determinations may cause ourits net asset value on a given date to materially understate or overstate the value that weit may ultimately realize upon the sale of one or more of ourits investments.

While the Company has limited operating history, the Company does have an existing portfolio consisting of certain loan investments. The Company entered into these investments at the direction of the predecessor investment manager. The Adviser’s management team, in conjunction with the Company’s audit firm, is conducting an analysis and audit of the current portfolio in order to assess a net asset value to the portfolio. However, it is important to note that the investments in the current portfolio may have little or no value. Moreover, while the Adviser may seek to restructure some of the current portfolio investments, there is no guarantee that the Adviser will be successful in doing so. As a result, Shareholders may experience significant losses and may incur additional expenses as the Company seeks to reposition its current portfolio.

Declines in market values or fair market values of the Company’s investments could result in significant net unrealized depreciation of its portfolio, which, in turn, would reduce its net asset value.

Under the 1940 Act, the Company is required to carry its investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of the Board of Directors. While most of the Company’s investments are not publicly traded, applicable accounting standards require the Company to assume as part of its valuation process that its investments are sold in a principal market to market participants (even if it plans on holding an investment through its maturity) and impairments of the market values or fair market values of its investments, even if unrealized, must be reflected in its financial statements for the applicable period as unrealized depreciation, which could result in significant reductions to the Company’s net asset value for a given period.

There is a risk that investors in ourthe Company’s common stock may not receive distributions or that ourits distributions may not grow over time.

We

The Company cannot assure youShareholders that weit will achieve investment results that will allow usit to make a specified level of cash distributions or year-to-year increases in cash distributions. All distributions will be paid at the discretion of our boardthe Board of directorsDirectors and will depend on ourthe Company’s earnings, ourits net investment income, ourits financial condition,

TABLE OF CONTENTS

maintenance of ourits RIC status, compliance with applicable BDC regulations and such other factors as our boardthe Board of directorsDirectors may deem relevant from time to time. In addition, due to the asset coverage test applicable to usthe Company as a BDC, weit may be limited in ourits ability to make distributions.

Our distribution proceeds may exceed our earnings, particularly during

If the period before we have substantially invested the net proceeds from our continuous public offering. Therefore, portions of the distributions that we make may represent a return of capital to you for tax purposes, which will lower your tax basis in your shares.

In the event that we encounter delays in locating suitable investment opportunities, we may pay all or a substantial portion of our distributions from the proceeds of our continuous public offering or from borrowings in anticipation of future cash flow. To the extent such distributions exceed our earnings, they may constitute a return of capital and will lower your tax basis in your shares. A return of capital generally is a return of your investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with the offering, including any fees payable to Freedom Capital Investment Advisors.

If we internalize ourCompany internalizes its management functions, yourShareholders’ interest in usit could be diluted, and weit could incur other significant costs associated with being self-managed.

Our board

The Board of directorsDirectors may decide in the future to internalize ourthe Company’s management functions. If we doit does so, wethe Company may elect to negotiate to acquire Freedom Capital Investment Advisors’the Adviser’s assets and personnel. At this time, weit cannot anticipate the form or amount of consideration or other terms relating to any such acquisition. Such consideration could take many forms, including cash payments, promissory notes and shares of ourthe Company’s common stock. The payment of such consideration could result in dilution of yourShareholders’ interest as a stockholder and could reduce the earnings per share attributable to yourtheir investment.

In addition, while wethe Company would no longer bear the costs of the various fees and expenses we expectit expects to pay to Freedom Capital Investment Advisorsthe Adviser under the investment advisory and administrative services agreement, weit would incur the compensation and benefits costs of ourits officers and other employees and consultants that are being paid by Freedom Capital Investment Advisorsthe Adviser or its affiliates. In addition, weit may issue equity awards to officers, employees and consultants. These awards would decrease net income and may further dilute yourShareholders’ investment in us. Wethe Company. The Company cannot reasonably estimate the amount of fees weit would save or the costs weit would incur if weit became self-managed. If the expenses we assumeit assumes as a result of an internalization are higher than the expenses we avoidit avoids paying to Freedom Capital Investment Advisors, ourthe Adviser, its earnings per share would be lower as a result of the internalization than it otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholdersShareholders and the value of ourthe Company’s shares. As we areit is currently organized, we doit does not have any employees. If we electit elects to internalize ourits operations, weit would employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims and other employee-related liabilities and grievances.

If we internalize ourit internalizes its management functions, weit could have difficulty integrating these functions as a standalone entity. Currently, individualsIndividuals employed by Freedom Capital Investment Advisorsthe Adviser and its affiliates may in the future perform asset management and general and administrative functions, including accounting and financial reporting, for multiple entities. These personnel have a great deal of know-how and experience. WeThe Company may fail to properly identify the appropriate mix of personnel and capital needs to operate as a standalone entity. An inability to manage an internalization transaction effectively could thus result in ourthe Company incurring excess costs and/or suffering deficiencies in ourits disclosure controls and procedures or ourits internal control over financial reporting. Such deficiencies could cause usit to incur additional costs, and ourthe Company’s management’s attention could be diverted from effectively managing ourits investments.

Internalization transactions have also, in some cases, been the subject of litigation. Even if these claims are without merit, wethe Company could be forced to spend significant amounts of money defending such claims, which would reduce the amount of funds we haveit has available for investment in targeted assets.

TABLE OF CONTENTS

Changes in laws or regulations governing ourthe Company’s operations or the operations of ourits business partners may adversely affect ourits business or cause usit to alter ourits business strategy.

We

The Company and ourits portfolio companies will be subject to regulation at the local, state and federal level. New legislation may be enacted or new interpretations, rulings or regulations could be adopted, including those governing the types of investments we arethe Company is permitted to make, any of which could harm usit and our stockholders,its Shareholders, potentially with retroactive effect. Changes in laws or regulations governing the operations of those with whom we dothe Company does business, including selected broker-dealers and other financial representatives selling ourits shares, could also have a material adverse effect on ourits business, financial condition and results of operations.

In addition, any changes to the laws and regulations governing ourthe Company’s operations, including with respect to permitted investments, may cause usit to alter ourits investment strategy to avail ourselvesitself of new or different opportunities or make other changes to ourits business. Such changes could result in material differences to ourits strategies and plans as set forth in the prospectusMemorandum and may result in ourits investment focus shifting from the areas of expertise of Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser to other types of investments in which Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser may have less expertise or little or no experience. Thus, any such changes, if they occur, could have a material adverse effect on ourthe Company’s results of operations and the value of your investment.Shareholders’ investments.

Significant Financial and Other Resources to Comply with the Requirements of Being a Public Entity.

As a public company, weentity, the Company will be subject to regulations not applicable to private companies, such as provisionsthe reporting requirements of the Exchange Act and requirements of the Sarbanes-Oxley Act. EffortsThese requirements may place a strain on the Company’s systems and resources. The Exchange Act requires that the Company file annual, quarterly and current reports with respect to comply with such regulations will involve significant expenditures,its business and non-compliance with such regulations may adversely affect us.

As a public company, we will be subject to regulations not applicable to private companies, including provisions of thefinancial condition. The Sarbanes-Oxley Act requires that the Company maintain effective disclosure controls and the related rulesprocedures and regulations promulgated by the SEC. Beginning with our fiscal year ending December 31, 2017, our management will be required to report on our internal controlcontrols over financial reporting, pursuantwhich are discussed below. In order to Section 404 of the Sarbanes-Oxley Actmaintain and rules and regulations of the SEC thereunder. We will be required to review on an annual basis our internal control over financial reporting, and on a quarterly and annual basis, to evaluate and disclose changes in our internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm onimprove the effectiveness of our internal control over financial reporting.

As a newly-formed company, developing an effective system ofthe Company’s disclosure controls and procedures and internal controls, may require significant expenditures, which may negatively impact our financial performanceresources and our ability to make distributions. This process will also result in a diversion of management’s time and attention. We cannot be certain as to the timing of the completion of our evaluation, testing and remediation actions or the impact of the same on our operations, and we may not be able to ensure that the process is effective or that our internal control over financial reporting is ormanagement oversight will be effective inrequired. The Company intends to implement procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public companies. These activities may divert management’s attention from other business concerns, which could have a timely manner. In the event that we are unable to develop or maintain an effective system of internal controls and maintain or achieve compliance with the Sarbanes-Oxley Act and related rules, we may be adversely affected.

The impact of recent financial reform legislation on us is uncertain.

In light of recent conditions in the U.S. and global financial markets and the U.S. and global economy, legislators, the presidential administration and regulators have increased their focusmaterial adverse effect on the regulation of theCompany’s business, financial services industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, institutes a wide range of reforms that will have an impact on all financial institutions. Many of the requirements called for in the Dodd-Frank Act will be implemented over time, most of which will be subject to implementing regulations over the course of several years. Given the uncertainty associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through regulations, the full impact such requirements will have on our business, results of operations or financial condition, is unclear. The changes resulting from the Dodd-Frank Act may require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements. Failure to comply with any such laws, regulations or principles, or changes thereto, may negatively impact our business, results of operations and financial

TABLE OF CONTENTS

condition. While we cannot predict what effect any changes in the laws or regulations or their interpretations would have on us as a resultcash flows. The Company expects to incur significant additional annual expenses related to these steps and, among other things, directors’ and officers’ liability insurance, director fees, reporting requirements of the Dodd-Frank Act, these changes could be materially adverseSEC, transfer agent fees, additional administrative expenses payable to usthe Administrator to compensate them for hiring additional accounting, legal and our stockholders.administrative personnel, increased auditing and legal fees and similar expenses.

We

The Company may experience fluctuations in ourits quarterly results.

We

The Company could experience fluctuations in ourits quarterly operating results due to a number of factors, including ourits ability or inability to make investments in companies that meet ourits investment criteria, the level of ourits expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounterthe Company encounters competition in ourits markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods.

We

The Company may be adversely impacted by cyber security breaches.

We

The Company may be prone to operational and information security risks resulting from breaches in cyber security. A breach may cause usthe Company to lose proprietary information, suffer data corruption, or lose operational capacity. Breaches in cyber security include, among other behaviors, stealing or corrupting data maintained online or digitally, denial of service attacks on websites, the unauthorized release of confidential information or various other forms of cyber-attacks. Cyber security breaches affecting the Company, Freedom Capital Investment Advisors,the Adviser, financial intermediaries and other third-party service providers may adversely impact us.the Company. For instance, cyber security breaches may interfere with the processing of stockholderShareholder transactions, impact the our ability to calculate net asset value, cause the release of private stockholderShareholder information or confidential business information, impede investment activities, subject usthe Company to regulatory fines or financial losses and/or cause reputational damage. WeThe Company may also incur additional costs for cyber security risk management purposes.

Risks Related to Freedom Capital Investment Advisorsthe Adviser and Its Affiliates

Freedom Capital Investment Advisors has no prior experience managing a BDC or a RIC.

Freedom Capital Investment Advisors is a new entity and has no prior experience managing a BDC or a RIC. Therefore, Freedom Capital Investment Advisors may not be able to successfully operate our business or achieve our investment objectives. As a result, an investment in our shares of common stock may entail more risk than the shares of common stock of a comparable company with a substantial operating history.

The 1940 Act and the Code impose numerous constraints on the operations of BDCs and RICs that do not apply to the other types of investment vehicles. For example, under the 1940 Act, BDCs are required to invest at least 70% of their total assets primarily in securities of qualifying U.S. private or thinly-traded public companies. Moreover, qualification for RIC tax treatment under Subchapter M of the Code requires satisfaction of source-of-income, diversification and other requirements. The failure to comply with these provisions in a timely manner could prevent us from qualifying as a BDC or a RIC or could force us to pay unexpected taxes and penalties, which could be material. Freedom Capital Investment Advisors’ lack of experience in managing a portfolio of assets under such constraints may hinder its ability to take advantage of attractive investment opportunities and, as a result, achieve our investment objectives.

Freedom Capital Investment AdvisorsAdviser is not presently registered as an investment adviser with any state securities regulator or with the SEC.

At this time, Freedom Capital Investment Advisorsthe Adviser is ineligible to register with the SEC under the Advisers Act because we arethe Company is presently its only client and wethe Company currently havehas less than $25 million of assets under management. Freedom Capital Investment AdvisorsThe Adviser is also not registered as an investment adviser with any state securities regulator because of available exemptions to registration, or exclusions from investment adviser status, under applicable state laws and regulations. Freedom Capital Investment AdvisorsThe Adviser has agreed to perform its duties and obligations to usthe Company and otherwise conduct its business and operations as if it were registered as an investment adviser with the SEC under the Advisers Act. Among other things, Freedom Capital Investment AdvisorsThe Adviser has adopted a code of ethics and compliance policies and procedures.procedures that are comparable, in all material respects, with the compliance policies and procedures imposed on registered investment advisers. Nevertheless, Freedom Capital Investment Advisorsthe Adviser is not subject to either state or SEC inspections or the regulatory requirements, including restrictions on conflicts of interest, under state or federal laws and regulations that it would be subject to as a registered investment adviser.

TABLE OF CONTENTS

Freedom Capital Investment Advisors

The Adviser and its affiliates, including ourthe Company’s officers and some of ourits directors, will face conflicts of interest caused by compensation arrangements with usthe Company and ourits affiliates, which could result in actions that are not in the best interests of our stockholders.

Freedom Capital Investment Advisors

The Adviser and its affiliates will receive substantial fees from usthe Company in return for their services, and these fees could influence the advice provided to us.the Company. Among other matters, the compensation arrangements could affect their judgment with respect to public offerings of equity by us,the Company, which allow the dealer manager to earn additional dealer manager fees and Freedom Capital Investment Advisorsthe Adviser to earn increased asset management fees. In addition, the decision to utilize leverage will increase ourthe Company’s assets and, as a result, will increase the amount of management fees payable to Freedom Capital Investment Advisors.the Adviser.

We

The Company may be obligated to pay Freedom Capital Investment Advisorsthe Adviser incentive compensation even if we incurit incurs a net loss due to a decline in the value of ourits portfolio.

Our investment advisory and administrative services agreement

The New Advisory Agreement entitles Freedom Capital Investment Advisorsthe Adviser to receive incentive compensation on income regardless of any capital losses. In such case, wethe Company may be required to pay Freedom Capital Investment Advisorsthe Adviser incentive compensation for a fiscal quarter even if there is a decline in the value of ourthe Company’s portfolio or if we incurit incurs a net loss for that quarter. Any incentive fee payable by usthe Company that relates to ourits net investment income may be computed and paid on income that may include interest that has been accrued but not yet received. If a portfolio company defaults on a loan that is structured to provide accrued interest, it is possible that accrued interest previously included in the calculation of the incentive fee will become uncollectible. Freedom Capital Investment AdvisorsThe Adviser is not under any obligation to reimburse usthe Company for any part of the incentive fee it received that was based on accrued income that wethe Company never received as a result of a default by an entity on the obligation that resulted in the accrual of such income, and such circumstances would result in ourthe Company paying an incentive fee on income weit never received.

For federal income tax purposes, wethe Company will be required to recognize taxable income in some circumstances in which we doit does not receive a corresponding payment in cash and to make distributions with respect to such income to maintain ourits status as a RIC. Under such circumstances, weit may have difficulty meeting the annual distribution requirement necessary to maintain RIC tax treatment under the Code. This difficulty in making the required distribution may be amplified to the extent that we arethe Company is required to pay an incentive fee with respect to such accrued income. As a result, weit may have to sell some of ourits investments at times and/or at prices weit would not consider advantageous, raise additional debt or equity capital, or forgo new investment opportunities for this purpose. If we areit is not able to obtain cash from other sources, weit may fail to qualify for RIC tax treatment and thus become subject to corporate-level income tax.

There may be conflicts of interest related to the obligations of the senior management and investment teamsteam of Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser to ourthe Company’s affiliates and to other clients.

The members of the senior management and investment teamsteam of both Freedom Capital Investment Advisors and a sub-adviser, if any, servethe Adviser serves or may serve as officers, directors, managers or principals of entities that operate in the same or a related line of business as we do,the Company does, or of investment funds managed by the same personnel. In serving in these multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in ourthe Company’s best interests or in the best interest of our stockholders. OurShareholders. The Company’s investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment vehicles. For example, we relythe Company relies on Freedom Capital Investment Advisorsthe Adviser to manage ourits day-to-day activities and to implement ourits investment strategy. Freedom Capital Investment AdvisorsThe Adviser and certain of its affiliates are presently, and planmay in the future to continue to be involved with activities which are unrelated to us.the Company. As a result of these activities, Freedom Capital Investment Advisors,the Adviser, its employees and certain of its affiliates will have conflicts of interest in allocating their time between usthe Company and other activities in which they are or may become involved, including the management of other entities affiliated with Freedom Capital Investment Advisors. Freedom Capital Investment Advisorsthe Adviser. The Adviser and its employees will devote only as much of its or their time to ourthe Company’s business as Freedom Capital Investment Advisorsthe Adviser and its employees, in their judgment, determine is reasonably required, which may be substantially less than their full time.

Furthermore, a sub-adviser, if any, on which Freedom Capital Investment Advisors may rely to assist it in identifying investment opportunities and making investment recommendations, has similar conflicts of interest.

TABLE OF CONTENTS

For example, the personnel of a sub-adviser, if any, may allocate their time between assisting Freedom Capital Investment Advisors in identifying investment opportunities and making investment recommendations and performing similar functions for other business activities in which they may be involved.

There may be conflicts of interest related to the allocation of investment opportunities among Freedom Capital Investment Advisors,the Adviser or any sub-adviser, and their respectiveof its affiliates.

Currently, Freedom Capital Investment Advisorsthe Adviser does not engage in market transactions where order aggregation may arise, as Freedom Capital Investment Advisorsthe Adviser does not presently have any client other than usthe Company but may and intends to have additional clients in the future that may have investment objectives similar to ours.the Company’s.

Subject to certain 1940 Act restrictions on co-investments with affiliates, Freedom Capital Investment Advisorsthe Adviser may determine it appropriate for usthe Company and one or more other investment accounts managed by Freedom Capital Investment Advisors, a sub-adviser, if any,the Adviser or any of their respective affiliatesan affiliate to participate in an investment opportunity. For example, wethe Company generally will not be permitted to co-invest with certain entities affiliated with Freedom Capital Investment Advisors or a sub-adviser, if any,the Adviser in transactions originated by Freedom Capital Investment Advisorsthe Adviser or a sub-adviser or their respective affiliatesan affiliate unless we obtainit obtains an exemptive order from the SEC. Moreover, we arethe Company is not permitted to co-invest alongside Freedom Capital Investment Advisorsthe Adviser or a sub-adviser or their respective affiliates. Wean affiliate. It presently dodoes not have exemptive relief under the 1940 Act to engage in such co-investments. Consequently, any co-investments we makeit makes with one or more accounts managed by Freedom Capital Investment Advisors, a sub-adviser, if any,the Adviser or any of their respective affiliatesan affiliate will be made in accordance with existing regulatory guidance and the allocation policies of Freedom Capital Investment Advisors, a sub-adviserthe Adviser and their respective affiliates, as applicable. Freedom Capital Investment Advisorsits affiliates. The Adviser seeks to allocate investment opportunities among eligible accounts in a manner that is fair and equitable over time and consistent with its allocation policy. However, wethe Company can offer no assurance that such opportunities will be allocated to usit fairly or equitably in the short-term or over time. To the extent we areit is able to make co-investments with investment accounts managed by Freedom Capital Investment Advisors, a sub-adviser, if any,the Adviser or their respectiveits affiliates, these co-investment opportunities may give rise to conflicts of interest or perceived conflicts of interest among usthe Company and the other participating accounts. In addition, conflicts of interest or perceived conflicts of interest may also arise in determining which investment opportunities should be presented to usthe Company and other participating accounts. Freedom Capital Investment AdvisorsThe Adviser will also utilize its allocation policies if we co-investthe Company co-invests with other clients of Freedom Capital Investment Advisorsthe Adviser in transactions where price is the only negotiated point. However, there can be no assurance that wethe Company will be able to participate in all investment opportunities that are suitable for us.it.

The time and resources that individuals employed by Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser devote to usthe Company may be diverted, and weit may face additional competition due to the fact that individuals employed by Freedom Capital Investment Advisors and a sub-adviser, if any,the Adviser are not prohibited from raising money for or managing another entity that makes the same types of investments that we target.

Neither Freedom Capital Investment Advisorsthe Adviser nor a sub-adviser, if any, or individuals employed by Freedom Capital Investment Advisors or a sub-adviser, if any,the Adviser are prohibited from raising money for and managing another investment entity that makes the same types of investments as those we target.the Company targets. As a result, the time and resources that these individuals may devote to usthe Company may be diverted. In addition, wethe Company may compete with any such investment entity for the same investors and investment opportunities. Affiliates of a sub-adviser, if any, whose primary businesses include the origination of investments, engage in investment advisory business with accounts that compete with us. Affiliates of a sub-adviser, if any, have no obligation to make their originated investment opportunities available to such sub-adviser or to us.

Our

The Company’s incentive fee may induce Freedom Capital Investment Advisorsthe Adviser to make and a sub-adviser, if any, to recommend, speculative investments.

The incentive fee payable by usthe Company to Freedom Capital Investment Advisorsthe Adviser may create an incentive for it to make investments on ourthe Company’s behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to Freedom Capital Investment

TABLE OF CONTENTS

Advisorsthe Adviser will be determined may encourage it to use leverage to increase the return on ourthe Company’s investments. In addition, the fact that ourthe Company’s base management fee will be payable based upon ourits average monthly gross assets, which would include any borrowings for investment purposes, may encourage Freedom Capital Investment Advisorsthe Adviser to use leverage to make additional investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor holders of ourthe Company’s common stock. Such a practice could result in ourthe Company investing in more speculative securities than would otherwise be in ourits best interests, which could result in higher investment losses, particularly during cyclical economic downturns. In addition, since a sub-adviser, if any, will receive a portion of the advisory fees paid to Freedom Capital Investment Advisors, a sub-adviser, if any, may have an incentive to recommend investments that are riskier or more speculative.

Risks Related to Business Development Companies

The requirement that wethe Company invest a sufficient portion of ourits assets in qualifying assets could preclude usit from investing in accordance with ourits current business strategy; conversely, the failure to invest a sufficient portion of ourits assets in qualifying assets could result in ourits failure to maintain ourits status as a BDC.

As a BDC, wethe Company may not acquire any assets other than “qualifying assets” unless, at the time of such acquisition, at least 70% of ourits total assets are qualifying assets. Therefore, weit may be precluded from investing in what we believeit believes are attractive investments if such investments are not qualifying assets. Conversely, if we failthe Company fails to invest a sufficient portion of ourits assets in qualifying assets, weit could lose ourits status as a BDC, which would have a material adverse effect on ourits business, financial condition and results of operations. Similarly, these rules could prevent usthe Company from making additional investments in existing portfolio companies, which could result in the dilution of ourits position, or could require usit to dispose of investments at an inopportune time to comply with the 1940 Act. If weit were forced to sell non-qualifying investments in the portfolio for compliance purposes, the proceeds from such sale could be significantly less than the current value of such investments.

Failure to maintain ourthe Company’s status as a BDC would reduce ourits operating flexibility.

If we dothe Company does not remain a BDC, weit might be regulated as a closed-end investment company under the 1940 Act, which would subject usit to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease ourits operating flexibility.

Regulations governing ourthe Company’s operation as a BDC and a RIC will affect ourits ability to raise, and the way in which we raise,it raises, additional capital or borrow for investment purposes, which may have a negative effect on ourits growth.

As a result of the annual distribution requirement to qualify as a RIC, wethe Company may need to periodically access the capital markets to raise cash to fund new investments. WeIt may issue “senior securities,” as defined in the 1940 Act, including borrowing money from banks or other financial institutions only in amounts such that ourthe Company’s asset coverage, as defined in the 1940 Act, equals at least 200% after such incurrence or issuance. OurThe Company’s ability to issue different types of securities is also limited. Compliance with these requirements may unfavorably limit ourits investment opportunities and reduce ourits ability in comparison to other companies to profit from favorable spreads between the rates at which weit can borrow and the rates at which weit can lend. As a BDC, therefore, we intendit intends to issue equity continuously at a rate more frequent than our privately ownedits privately-owned competitors, which may lead to greater stockholderShareholder dilution.

We expect to

The Company may in the future borrow for investment purposes. If the value of ourits assets declines, wedecline, it may be unable to satisfy the asset coverage test, which would prohibit usit from paying distributions and could prevent usit from qualifying as a RIC. If weit cannot satisfy the asset coverage test, weit may be required to sell a portion of ourits investments and, depending on the nature of ourits debt financing, repay a portion of ourits indebtedness at a time when such sales may be disadvantageous.

Under the 1940 Act, wethe Company generally areis prohibited from issuing or selling ourits common stock at a price per share, after deducting selling commissions and dealer manager fees, that is below ourits net asset value per share, which may be a disadvantage as compared with other public companies. WeThe Company may, however, sell ourits common stock, or warrants, options or rights to acquire ourits common stock, at a price below the then current

TABLE OF CONTENTS

net asset value of the common stock if our boardthe Board of directorsDirectors and independent directors determine that such sale is in ourthe Company’s best interests and the best interests of our stockholders,its Shareholders, and our stockholders,the Shareholders, as well as those stockholdersshareholders that are not affiliated with us,the Company, approve such sale.

Our

The Company’s ability to enter into transactions with ourits affiliates will beis restricted.

We will be

The Company is prohibited under the 1940 Act from participating in certain transactions with certain of ourits affiliates without the prior approval of a majority of the independent members of our boardthe Board of directorsDirectors and, in some cases, the SEC. Any person that owns, directly or indirectly, 5% or more of ourthe Company’s outstanding voting securities will be ourits affiliate for purposes of the 1940 Act, and weit will generally be prohibited from buying or selling any securities from or to such affiliate, absent the prior approval of our boardthe Board of directors.Directors. The 1940 Act also prohibits certain “joint” transactions with certain of ourthe Company’s affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our boardthe Board of directorsDirectors and, in some cases, the SEC. If a person acquires more than 25% of ourthe Company’s voting securities, wethe Company will be prohibited from buying or selling any security from or to such person or certain of that person’s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC. Similar restrictions limit ourthe Company’s ability to transact business with ourits officers or directors or their affiliates. As a result of these restrictions, wethe Company may be prohibited from buying or selling any security from or to any portfolio company of a private equity fund managed by Freedom Capital Investment Advisorsthe Adviser without the prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.the Company.

We are

The Company is uncertain of ourits sources for funding ourits future capital needs; if weit cannot obtain debt or equity financing on acceptable terms, ourits ability to acquire investments and to expand ourits operations will be adversely affected.

The net proceeds from the sale of shares will be used for ourthe Company’s investment opportunities, operating expenses and for payment of various fees and expenses such as base management fees, incentive fees and other fees. Any working capital reserves we maintainit maintains may not be sufficient for investment purposes, and weit may require debt or equity financing to operate. Accordingly, in the event that we developthe Company develops a need for additional capital in the future for investments or for any other reason, these sources of funding may not be available to us.it. Consequently, if weit cannot obtain debt or equity financing on acceptable terms, ourits ability to acquire investments and to expand ourits operations will be adversely affected. As a result, weit would be less able to allocate ourits portfolio among various issuers and industries and achieve ourits investment objectives, which may negatively impact ourits results of operations and reduce ourits ability to make distributions to our stockholders.Shareholders.

Risks Related to Debt Financing

If we borrowthe Company borrows money, which we currently intend to do, the potential for gain or loss on amounts invested in usit will be magnified and may increase the risk of investing in us.

The use of borrowings, also known as leverage, increases the volatility of investments by magnifying the potential for gain or loss on invested equity capital. If we usethe Company uses leverage to partially finance ourits investments, through borrowing from banks and other lenders, youShareholders will experience increased risks of investing in ourits common stock. If the value of ourits assets increases, leverage would cause the net asset value attributable to ourits common stock to increase more sharply than it would have had wethe Company not leveraged. Conversely, if the value of ourthe Company’s assets decreases, leverage would cause net asset value to decline more sharply than it otherwise would have had wethe Company not leveraged. Similarly, any increase in ourthe Company’s income in excess of interest payable on the borrowed funds would cause ourits net income to increase more than it would without the leverage, while any decrease in ourits income would cause net income to decline more sharply than it would have had wethe Company not borrowed. Such a decline could negatively affect ourits ability to make common stock distribution payments. Leverage is generally considered a speculative investment technique. In addition, the decision to utilize leverage will increase ourthe Company’s assets and, as a result, will increase the amount of management fees payable to Freedom Capital Investment Advisors.the Adviser.  

TABLE OF CONTENTS

Changes in interest rates may affect ourthe Company’s cost of capital and net investment income.

Since we intend to use

If the Company uses debt to finance investments, ourits net investment income will depend, in part, upon the difference between the rate at which we borrowit borrows funds and the rate at which we investit invests those funds. As a result, weit can offer no assurance that a significant change in market interest rates will not have a material adverse effect on ourits net investment income. In periods of rising interest rates when we havethe Company has debt outstanding, ourits cost of funds will increase, which could reduce ourits net investment income. We expectIt expects that ourits long-term fixed-rate investments will be financed primarily with equity and long-term debt. WeIt may use interest rate risk management techniques in an effort to limit ourits exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. These activities may limit ourthe Company’s ability to participate in the benefits of lower interest rates with respect to the hedged portfolio. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on ourthe Company’s business, financial condition and results of operations. Also, we havethe Company has limited experience in entering into hedging transactions, and weit will initially have to purchase or develop such expertise.

A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to ourthe Company’s debt investments. Accordingly, an increase in interest rates would make it easier for usthe Company to meet or exceed the incentive fee hurdle rate and may result in a substantial increase of the amount of incentive fees payable to Freedom Capital Investment Advisorsthe Adviser with respect to pre-incentive fee net investment income.

Federal Income Tax Risks

We

The Company will be subject to corporate-level income tax if we areit is unable to qualify as a RIC under Subchapter M of the Code or to satisfy RIC distribution requirements.

To qualify for and maintain RIC tax treatment under Subchapter M of the Code, wethe Company must meet the following annual distribution, income source and asset diversification requirements.requirements:

If we failCompany fails to qualify for or maintain RIC tax treatment for any reason and areis subject to corporate income tax, the resulting corporate taxes could substantially reduce ourits net assets, the amount of income available for distribution and the amount of ourits distributions.

TABLE OF CONTENTS

We

The Company may have difficulty paying ourits required distributions if we recognizeit recognizes income before or without receiving cash representing such income.

For federal income tax purposes, wethe Company may be required to recognize taxable income in circumstances in which we doit does not receive a corresponding payment in cash. For example, if we holdit holds debt obligations that are treated under applicable tax rules as having original issue discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), weit must include in income each year a portion of the original issue discount that accrues over the life of the obligation, regardless of whether cash representing such income is received by usthe Company in the same taxable year. WeIt may also have to include in income other amounts that we haveit has not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipateIt anticipates that a portion of ourits income may constitute original issue discount or other income required to be included in taxable income prior to receipt of cash. Further, weit may elect to amortize market discounts and include such amounts in ourits taxable income in the current year, instead of upon disposition, as an election not to do so would limit ourits ability to deduct interest expenses for tax purposes.

Because any original issue discount or other amounts accrued will be included in ourthe Company’s investment company taxable income for the year of the accrual, wethe Company may be required to make a distribution to our stockholdersits Shareholders in order to satisfy the annual distribution requirement, even though weit will not have received any corresponding cash amount. As a result, weit may have difficulty meeting the annual distribution requirement necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code. WeIt may have to sell some of ourits investments at times and/or at prices weit would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we areit is not able to obtain cash from other sources, weit may fail to qualify for or maintain RIC tax treatment and thus become subject to corporate-level income tax.

None

We doThe Company’s portfolio investments may present special tax issues.

Investments in below-investment grade debt instruments and certain equity securities may present special tax issues for the Company. U.S. federal income tax rules are not ownentirely clear about issues such as when the Company may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless debt in equity securities, how payments received on obligations in default should be allocated between principal and interest income, as well as whether exchanges of debt instruments in a bankruptcy or workout context are taxable. Such matters could cause the Company to recognize taxable income for U.S. federal income tax purposes, even in the absence of cash or economic gain, and require it to make taxable distributions to Shareholders to maintain its RIC status or preclude the imposition of either U.S. federal corporate income or excise taxation. Additionally, because such taxable income may not be matched by corresponding cash received by the Company, it may be required to borrow money or dispose of other investments to be able to make distributions to Shareholders. These and other issues will be considered by the Company, to the extent determined necessary, in order that it minimize the level of any real estateU.S. federal income or other physical properties materially important to our operation. Our headquartersexcise tax that it would otherwise incur.

Legislative or regulatory tax changes could adversely affect investors.

At any time, the federal income tax laws governing RICs or the administrative interpretations of those laws or regulations may be amended. Any of those new laws, regulations or interpretations may take effect retroactively and could adversely affect the taxation of the Company or its Shareholders. Therefore, changes in tax laws, regulations or administrative interpretations or any amendments thereto could diminish the value of an investment in the Company’s shares or the value or the resale potential of its investments.

ITEM 2. PROPERTIES

The principal offices of StHealth Capital Investment Corporation are located at 1560 Wilson Blvd., Suite 450, Arlington, VA 22209. We believe680 5th Avenue New York, NY, 21st Floor. The lease agreement has a one-year term commencing August 15, 2019. The rent is $10,500 per month. Management believes that our officewith respect to its facilities, areequivalent suitable and adequate for our business as itspace is presently conducted.available at similar rents.

Although we may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise, neither we nor the Adviser

ITEM 3. LEGAL PROCEEDINGS

The Company is not currently a party to any pending material legal proceedings nor,that it believes will have a material adverse effect on its business or financial conditions. The Company may, however, be subject to our knowledge, is any materialvarious claims and legal proceeding threatened against us or againstactions arising in the Adviser.ordinary course of business from time to time.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

TABLE OF CONTENTS

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

During the year ended December 31, 2019, the Company issued 3,033,564 shares of its common stock and received gross proceeds of approximately $5,691,000 for an average share price of $1.88.

The common stock described herein has not been registered under the 1933 Act, the securities laws of any other state or the securities laws of any other jurisdiction. The common stock will be offered and sold (i) in the United States under the exemption provided by Section 4(a)(2) of the 1933 Act and Rule 506 of Regulation D promulgated thereunder and other exemptions of similar import in the laws of the states and jurisdictions where the offering will be made, and (ii) outside of the United States in accordance with Regulation S of the 1933 Act. The common stock described herein will constitute “restricted securities” under the 1933 Act and as such will be subject to certain restrictions on transferability. The common stock may not be transferred or sold unless the common stock has been registered under the 1933 Act or an exemption from registration is available. There is currently no market forassurance that registration of the common stock under the 1933 Act or other securities laws will be affected.

Holders

As of March 30, 2020, there were 101 holders of record of our common stock,stock.  

Dividends

We have never paid cash dividends on our securities and we do not expect that a market for our shares will develop in the foreseeable future. No shares of our common stock have been authorized for issuance underanticipate paying any equity compensation plans.

We are offeringcash dividends on our shares of common stock on a continuous basis at an initial offering price of $10.00 per share. However,in the foreseeable future. We intend to the extent that our net asset value increases, we will sell at a price necessary to ensure that shares are not sold at a price per share, after deduction of selling commissions and dealer manager fees that is below our net asset value per share. In the event of a material declineretain any future earnings for reinvestment in our net asset value per share, which we consider to be a 2.5% decrease below our current net offering price, and subject to certain conditions, we will reduce our offering price accordingly. Promptly following any such adjustment to the offering price per share, we will file a prospectus supplement with the SEC disclosing the adjusted offering price, and we will also post the updated information on our website athttp://freedomcapitalfunds.com.

Set forth below is a chart describing the classes of our securities outstanding as of March 18, 2016:

(1) Title of Class		(2) Amount Authorized				(3) Amount Held by Us or for Our Account				(4) Amount Outstanding Exclusive of Amount Under Column (3)
Common Stock			550,000,000				—				11,111
Preferred Stock			50,000,000				—				—

As of March 18, 2016, Freedom Capital Investment Management LLC, an affiliate of the Company, was the only record holder of our common stock.

Share Repurchase Program

Beginning with the first full calendar quarter following the one year anniversary of the date that we satisfy the minimum offering requirement, and on a quarterly basis thereafter, we intend to offer to repurchase shares on such terms as may be determined by our board of directors in its complete and absolute discretion unless, in the judgment of the independent directors of our board of directors, such repurchases would not be in the best interests of our stockholders or would violate applicable law. Under Maryland General Corporation Law, or the MGCL, except as provided in the following sentence, a Maryland corporation may not make a distribution to stockholders, including pursuant to our repurchase program, if, after giving effect to the distribution, (i) the corporation would not be ablebusiness. Any future determination to pay its indebtedness in the ordinary course or (ii) the corporation’s total assets would be less than its total liabilities plus preferential amounts payable on dissolution with respect to preferred stock (unless our charter provides otherwise). Notwithstanding the foregoing, a corporation may make a distribution, including a repurchase, from: (i) the net earnings of the corporation for the fiscal year in which the distribution is made; (ii) the net earnings of the corporation for the preceding fiscal year; or (iii) the sum of the net earnings of the corporation for the preceding eight fiscal quarters. We will conduct such repurchase offers in accordance with the requirements of Rule 13e-4 of the Exchange Act and the 1940 Act. In months in which we repurchase shares, we will generally conduct repurchases on the same date that we hold our monthly closing for the sale of shares in this offering. Any offer to repurchase sharescash dividends will be conducted solely through tender offer materials mailed to each stockholder.

The board of directors also will consider the following factors, among others, in making its determination regarding whether to cause us to offer to repurchase shares and under what terms:

TABLE OF CONTENTS

We currently intend to limit the number of shares to be repurchased during any calendar year to the number of shares we can repurchase with the proceeds we receive from the sale of shares of our common stock under our distribution reinvestment plan. Atat the discretion of our board of directors, we may also use cash on hand, cash available from borrowings and cash from liquidationwill be dependent upon our financial condition, results of securities investmentsoperations, capital requirements and such other factors as of the end of the applicable period to repurchase shares. In addition, we will limit the number of shares to be repurchased in any calendar year to 10.0% of the number of shares outstanding at the end of the prior calendar year, or 2.5% at the end of the prior quarter, though the actual number of shares that we offer to repurchase may be less in light of the limitations noted above. We intend to offer to repurchase such shares on each date of repurchase at a price equal to 90% of the offering price in effect on the date of repurchase. Freedom Capital Investment Advisors will not receive any separate fees in connection with the repurchase of shares under our share repurchase program.

Distributions

Subject to our board of directors’ discretion and applicable legal restrictions, we intend to authorize and declare ordinary cash distributions on a monthly or quarterly basis and pay such distributions on a monthly or quarterly basis beginning no later than the first calendar quarter after the month in which the minimum offering requirement is met. We will calculate each stockholder’s specific distribution amount for the period using record and declaration dates, and each stockholder’s distributions will begin to accrue on the date we accept such stockholder’s subscription for shares of our common stock. From time to time, we may also pay special interim distributions in the form of cash or shares of common stock at the discretion of our board of directors. For example, our board of directors may periodically declaredeems relevant.

Unregistered Sales of Equity Securities

The following is a summary of transactions by us during the twelve months ended December 31, 2019 involving sales of our securities that were not registered under the Securities Act. Each sale was exempt from registration under either Section 4(2) of the Securities Act or Section 3(a)(9) of the Securities Act because (i) the securities were offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings; (iii) each investor was given the opportunity to ask questions and receive answers concerning the terms of and conditions of the offering and to obtain additional information; (iv) the investors represented that they were acquiring the securities for their own account and for investment; and (v) the securities were issued with restrictive legends where required.

From January 1, 2017 to April 28, 2017, the Company issued approximately 829,516 shares of its common stock distributionsand received gross proceeds of approximately $8,279,000. The offering costs were $815,900 and the net proceeds were $7,463,100.

From February to August 2019, the Company issued 3,033,564 shares of its common stock and received gross proceeds of approximately $5,691,000 for an average share price of $1.88. There were 10% commission cost and therefore net proceeds in order to reduce our net asset value per share if necessary to ensure that we do not sell shares at a price per share, after deducting selling commissions and dealer manager fees that is below our net asset value per share.cash were approximately $5,122,000.

We may fund our cash distributions to stockholders

Use of Proceeds from any sourcesSales of funds legally available to us, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds fromUnregistered Securities

During the sale of assets, non-capital gains proceeds fromyear ended December 31, 2019, the sale of assets, dividends or other distributions paid to us on account of preferred and common equityCompany deployed approximately $1,900,000 in several investments in portfolio companies, and expense reimbursements from Freedom Capital Investment Advisors. We have not established limits on the amount of funds we may use from available sources to make distributions.which are described below: 

We expect that for a period of time following commencement of this offering, which time period may be significant, substantial portions of our distributions may be funded through the reimbursement of certain expenses by Freedom Capital Investment Advisors and its affiliates, including through the waiver of certain investment advisory fees by Freedom Capital Investment Advisors, that may be subject to repayment by us within three years. The purpose of this arrangement is to ensure that no portion of our distributions to stockholders will be paid from offering proceeds or borrowings so that our distributions will not constitute returns of capital for generally accepted accounting principles purposes. Freedom Capital Investment Advisors is under no obligation to waive its fees and reimburse certain of our expenses to prevent our distributions from constituting returns of capital for tax purposes. You should understand that any such distributions funded through expense reimbursements or waivers of advisory fees will not be based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or Freedom Capital Investment Advisors continues to make such reimbursements or waivers of such fees. You should also understand that our future repayments of amounts reimbursed or waived by Freedom Capital Investment Advisors or its affiliates will reduce the distributions that you would otherwise receive in the future. There can be no assurance that we will achieve the performance necessary to be able to pay distributions at a specific rate or at all. Freedom Capital Investment Advisors and its affiliates have no obligation to waive advisory fees or otherwise reimburse expenses in future periods.

TABLE OF CONTENTS

On a quarterly basis, we will send information to all stockholders of record regarding the sources of distributions paid to our stockholders in such quarter. During certain periods, our distributions may exceed our earnings, especially during the period before we have substantially invested the proceeds from our continuous public offering of common stock. As a result, it is possible that a portion of the distributions we make will represent a return of capital for tax purposes. A return of capital generally is a return of your investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with our continuous public offering, including any fees payable to Freedom Capital Investment Advisors. Each year a statement on Form 1099-DIV identifying the sources of the distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of paid-in capital surplus, which is a non-taxable distribution) will be mailed to our stockholders.

Pursuant to the Expense Reimbursement Agreement, Freedom Capital Investment Advisors has agreed to reimburse us for expenses in an amount that is sufficient to ensure that no portion of our distributions to stockholders will be paid from our offering proceeds or borrowings. However, because certain investments we may make, including preferred and common equity investments, may generate distributions to us that are treated for tax purposes as a return of capital, a portion of our distributions to stockholders may exceed our earnings and also be deemed to constitute a return of capital for tax purposes. Under those circumstances, Freedom Capital Investment Advisors will not reimburse us for the portion of such distributions to stockholders that represent a return of capital for tax purposes, as the purpose of the expense reimbursement arrangement is not to provide tax-advantaged distributions to stockholders.

From time to time and not less than quarterly, Freedom Capital Investment Advisors must review our accounts to determine whether cash distributions are appropriate. We intend to distribute pro rata to our stockholders funds received by us which Freedom Capital Investment Advisors deems unnecessary for us to retain.

Under the Expense Reimbursement Agreement, Freedom Capital Investment Advisors will reimburse us for expenses in an amount equal to the difference between our cumulative distributions paid to our stockholders in each quarter, less the sum of our net investment company taxable income, net capital gains and dividends and other distributions paid to us on account of preferred and common equity investments in portfolio companies (to the extent such amounts are not included in net investment company taxable income or net capital gains) in each quarter.

Pursuant to the Expense Reimbursement Agreement, we will have a conditional obligation to reimburse Freedom Capital Investment Advisors for any amounts funded by Freedom Capital Investment Advisors under such agreement if (and only to the extent that), during any fiscal quarter occurring within three years of the date on which Freedom Capital Investment Advisors funded such amount, the sum of our net investment company taxable income, net capital gains and the amount of any dividends and other distributions paid to us on account of preferred and common equity investments in portfolio companies (to the extent not included in net investment company taxable income or net capital gains) exceeds the distributions paid by us to stockholders; provided, however, that (i) we will only reimburse Freedom Capital Investment Advisors for expense support payments made by Freedom Capital Investment Advisors to the extent that the payment of such reimbursement (together with any other reimbursement paid during such fiscal year) does not cause “other operating expenses” (as defined below) (on an annualized basis and net of any expense reimbursement payments received by us during such fiscal year) to exceed the lesser of (A) 1.75% of our average net assets attributable to shares of our common stock for the fiscal year-to-date period after taking such payments into account and (B) the percentage of our average net assets attributable to shares of our common stock represented by “other operating expenses” during the fiscal year in which such expense support payment from Freedom Capital Investment Advisors was made (provided, however, that this clause (B) shall not apply to any reimbursement payment which relates to an expense support payment from Freedom Capital Investment Advisors made during the same fiscal year) and (ii) we will not reimburse Freedom Capital Investment Advisors for expense support payments made by Freedom Capital Investment Advisors if the annualized rate of regular cash distributions declared by us at the time of such reimbursement payment is less than the annualized rate of regular cash distributions declared by us at the time Freedom Capital Investment Advisors made the expense support payment to which such reimbursement relates. “Other operating expenses” means our total “operating expenses” (as defined below), excluding base management fees, incentive fees,

TABLE OF CONTENTS

organization and offering expenses, financing fees and costs, interest expense, brokerage commissions and extraordinary expenses. “Operating expenses” means all operating costs and expenses incurred, as determined in accordance with U.S. generally accepted accounting principles, or GAAP, for investment companies.

We or Freedom Capital Investment Advisors may terminate the Expense Reimbursement Agreement at any time. Freedom Capital Investment Advisors has indicated that it expects to continue such reimbursements until it deems that we have achieved economies of scale sufficient to ensure that we bear a reasonable level of expenses in relation to our income.

The specific amount of expenses reimbursed by Freedom Capital Investment Advisors, if any, will be determined at the end of each quarter. Upon termination of the Expense Reimbursement Agreement by Freedom Capital Investment Advisors, Freedom Capital Investment Advisors will be required to fund any amounts accrued thereunder as of the date of termination. Similarly, our conditional obligation to reimburse Freedom Capital Investment Advisors pursuant to the terms of the Expense Reimbursement Agreement shall survive the termination of such agreement by either party.

Freedom Capital Investment Advisors is controlled by our chairman, president and chief executive officer, Jeffrey McClure. There can be no assurance that the Expense Reimbursement Agreement will remain in effect or that Freedom Capital Investment Advisors will reimburse any portion of our expenses in future quarters.

We intend to make our ordinary distributions in the form of cash, out of assets legally available for distribution, unless stockholders elect to receive their distributions in additional shares of our common stock under our distribution reinvestment plan. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. stockholder. If stockholders hold shares in the name of a broker or financial intermediary, they should contact the broker or financial intermediary regarding their election to receive distributions in additional shares of our common stock under our distribution reinvestment plan.

In order to qualify as a RIC, we must, among other things, distribute at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of (1) 98% of our net ordinary income for the calendar year, (2) 98.2% of our capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year and (3) any net ordinary income and net capital gains for preceding years that were not distributed during such years and on which we paid no federal income tax. We can offer no assurance that we will achieve results that will permit us to pay any cash distributions. If we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings. See “Item 1. Business — Taxation as a RIC.”

We have adopted an “opt in” distribution reinvestment plan for our stockholders. As a result, if we make a cash distribution, then stockholders will receive distributions in cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash distributions reinvested in additional shares of our common stock. However, certain state authorities or regulators may impose restrictions from time to time that may prevent or limit a stockholder’s ability to participate in our distribution reinvestment plan. The determination of the tax attributes of our distributions will be made annually as of the end of each fiscal year based upon our taxable income for the full year and distributions paid for the full year. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.

TABLE OF CONTENTS

The following selected financial data for the year ended December 31, 2015 is derived from our financial statements, which have been audited by RSM US LLP, our independent registered public accounting firm. The data should be read in conjunction with our financial statements and related notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this annual report on Form 10-K.ITEM 6.  SELECTED FINANCIAL DATA

Not applicable as we are a smaller reporting company.

		Year ended December 31, 2015
Statements of operations data:
Total investment income		$	—
Expenses
Total expenses			—
Expenses waived or reimbursed by the Advisor			—
Net expenses			—
Net investment income			—
Net realized gain (loss) on investments			—
Net change in unrealized appreciation (depreciation) on investments			—
Net decrease in net assets resulting from operations		$	—
Per share information – basic and diluted:
Net decrease in net assets resulting from operations(1)		$	—
Balance sheet data:
Total assets		$	100,000
Total net assets		$	98,500

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information contained in this sectionfollowing discussion and analysis of our results of operations and financial condition for the fiscal years ended December 31, 2019 and December 31, 2018 should be read in conjunction with our audited financial statements and relatedthe notes thereto appearingto those financial statements that are included elsewhere in this annual report on Form 10-K. In this report, “we,” “us,” and “our” refer to Freedom Capital Corporation.

Forward-Looking Statements

Some of the statements in this annual report on Form 10-K constituteAnnual Report. This discussion contains forward-looking statements which relate to future events or our future performance or financial condition. The forward-looking statements contained in this annual report on Form 10-K involve risks and uncertainties, including statements as to:

TABLE OF CONTENTS

In addition, words such as “anticipate” “believe” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words.

The forward-looking statements contained in this annual report on Form 10-K involve risks and uncertainties.operations. Our actual results couldmay differ materially from those implied or expressed in the forward-looking statements for any reason. Other factors that could cause actual results to differ materially include:

We have based the forward-looking statements included in this annual report on Form 10-K on information available to us on the date of this annual report on Form 10-K. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whethercurrently anticipate as a result of new information, future events or otherwise. You are advised to consult any additional disclosures thatmany factors, including those we may make directly to you or through reports that we may file in the future with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Qdescribe under “Risk Factors” and current reports on Form 8-K. The forward-looking statements and projections containedelsewhere in this annual reportAnnual Report. See “Special Note Regarding Forward Looking Statements.”

Results of Operations

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Interest Income

Our interest income for the year ended December 31, 2019 was $33,757, compared to $139,268 for the year ended December 31, 2018.

General and Administrative

Our general and administrative expenses for the year ended December 31, 2019 were $238,907, an increase of $174,943, or 274%, compared to $63,964 for the year ended December 31, 2018.

Management fee – related party

Our related party management fees for the year ended December 31, 2019 were $55,950, compared to $33,556 for the year ended December 31, 2018.

Professional Fees

Our professional fees for the year ended December 31, 2019 were $711,640, compared to $446,395 for the year ended December 31, 2018.

Gain on Form 10-K orInvestment Valuation

Our total gain on investment for the year ended December 31, 2019 was $502,183, compared to $0 for the year ended December 31, 2018.

Gain on Extinguishment of Debt

During the year ended December 31, 2018, we entered into a settlement agreement with Morris, Manning & Martin LLP, which settled accounts payable balance owed with 75,000 payment on and before May 6, 2019. As a result, we realized $362,192 as a gain on debt extinguishment. There was no such gain during the year ended December 31, 2019.

Net Decrease in periodic reportsNet Assets Resulting from Operations

As a result of the foregoing, for the year ended December 31, 2019, we file underrecorded a net decrease in net assets resulting from operations of $470,557 compared to a net decrease in net assets resulting from operations of $42,455 for the Exchange Act are excludedyear ended December 31, 2018.

Liquidity and Capital Resources

Operating Activities

During the year ended December 31, 2019, we used $1,144,686 of cash in operating activities primarily as a result of our net decrease in net assets resulting from operations of $470,557 offset by gain on investments of $502,183, depreciation of $4,566 and net changes in operating assets and liabilities of $(176,512).

During the safe harbor protectionyear ended December 31, 2018, we used $232,253 of cash in operating activities primarily as a result of our net decrease in net assets resulting from operations of $42,455 offset by gain on extinguishment of accounts payable of $362,192 and net changes in operating assets and liabilities of $172,394.

Investing Activities

During the year ended December 31, 2019, the Company used $1,688,594 in investing activities, including $1,900,000 paid for investments and $38,594 for purchase of fixed assets. The Company had proceeds from sale of investments of $250,000.

During the year ended December 31, 2018, investing activities provided $240,000, including proceeds from restructure of investment of $90,000 and proceeds from sale of investments of $1,250,000. The company paid 1,100,000 for investments.

Financing Activities

During the year ended December 31, 2019, financing activities provided $5,122,030 in proceeds from issuance of common, and there was no cash provided by Section 27Afinancing operations during the year ended December 31, 2018.

Going Concern

For the year ended December 31, 2019, the Company incurred a net decrease in net assets resulting from operations of $470,557 and have an accumulated deficit of $7,166,325. These circumstances raise substantial doubt as to the Securities ActCompany’s ability to continue as a going concern. Currently, the Company has launched a capital raising program led by a Broker Dealer acting as the Dealer Manager and Section 21Earranging a syndicate of several additional Broker Dealers who will also sell our securities. From February to November 2019, the Exchange Act.

Overview

We were incorporated under the general corporation laws of the State of Maryland on June 19, 2014 and will commence operations upon raising $2.5 million, or the minimum offering requirement, pursuant to an offering to sell up to 50,000,000Company issued 3,033,564 shares of its common stock atand received gross proceeds of approximately $5,691,000 for an initial offeringaverage share price of $10.00 per share by September 9, 2016.$1.88. There were 10% commission cost and therefore net proceeds in cash were approximately $5,122,000. The U.S. Securities and Exchange Commission (the “SEC”) declaredaccompanying financial statements do not include any adjustments that might be necessary if the Company’s registration statement for this offering effective on September 9, 2015; however,Company is unable to continue as a going concern.

Unaudited Pro Forma Balance Sheet

Set forth below is our pro forma balance sheet as of December 31, 2015, the minimum offering requirement had not been achieved. We2019. These pro forma balances are a newly organized, externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act and intends to elect to be treated for federal income tax purposes, and intends to qualify annually thereafter, as a RIC under Subchapter M of the Code.

Our investment activities will be managed by Freedom Capital Investment Advisors and supervised by our board of directors, a majority of whom are independent. Under our investment advisory and administrative services agreement, we have agreed to pay Freedom Capital Investment Advisors an annual base management fee based on our average monthly gross assets as well as incentive fees based on our performance. Freedom Capital Investment Advisors may engage a sub-adviser to act as our investment sub-adviser. A sub-adviser may assist Freedom Capital Investment Advisors in identifying investment opportunitiesestimates and may make

TABLE OF CONTENTS

investment recommendations for approval by Freedom Capital Investment Advisors according to guidelines set by Freedom Capital Investment Advisors.

We intend to initially screen potential investments based upon the Patriotic Responsible Investing principles outlined in Item 1 of this annual report on Form 10-K. Using subjective analysis, we will determine if a potential investment sufficiently meets the threshold to be an investment according to Patriotic Responsible Investing principles. Once this threshold is met, we will make investments based upon a fundamental financial analysis of each particular investment opportunity.

Our investment objectives are to generate current income and long-term capital appreciation. In accordance with the Patriotic Responsible Investing principles, we have identified and intend to focus on the following six investment categories,assumptions, which we believe will allow us to generate an attractive total return with an acceptable level of risk.

Originated/Proprietary Transactions:  We define proprietary investments as any investment originated or structured specifically for us or made by us that was not generally available to the broader market. Proprietary investments mayare reasonable. The pro forma results include both debt and equity components. We believe proprietary transactions may offer attractive investment opportunities as they typically offer higher returns than broadly syndicated transactions.

Anchor Orders:  In addition to proprietary transactions, we intend to invest in certain opportunities that are originated and then syndicated by a commercial or investment bank but where we provide a capital commitment significantly above the average syndicate participant. Our decision to provide an anchor order to a syndicated transaction will be predicated on a rigorous credit analysis, our familiarity with a particular company, industry or financial sponsor, and the broader investment experiences of Freedom Capital Investment Advisors and any sub-adviser. In these types of investments, we may receive fees, preferential pricing or other benefits not available to other lenders in return for our significant capital commitment.

Event Driven:  We intend to take advantage of dislocations that arise in the markets due to an impending event and where the market’s apparent expectation of value differs substantially from our fundamental analysis. Such events may include a looming debt maturity or default, a merger, spin-off or other corporate reorganization, an adverse regulatory or legal ruling, or a material contract expiration, any of which may significantly improve or impair a company’s financial position. Compared to other investment strategies, event driven investing depends more heavily on our ability to successful predict the outcome of an individual event than on underlying macroeconomic fundamentals. As a result, successful event driven strategies may offer both substantial diversification benefits and the ability to generate performance in uncertain market environments.

Opportunistic:  We intend to seek to capitalize on market price inefficiencies by investing in loans, bonds and other securities where the market price of such investment reflects a lower value than deemed warranted by our fundamental analysis. We believe that market price inefficiencies may occur due to, among other things, general dislocations in the markets, a misunderstanding by the market of a particular company or an industry being out of favor with the broader investment community. We will seek to allocate capital to these securities that have been misunderstood or mispriced by the market and where we believe there is an opportunity to earn an attractive return on our investment.

Collateralized Securities:  CLOs are a form of securitization where the cash flow from a pooled basket of syndicated loans is used to support distribution payments made to different tranches of securities. While collectively CLOs represent nearly fifty percent of the broadly syndicated loan universe, investing in individual CLO tranches requires a high degree of investor sophistication due to their structural complexity and the illiquid nature of their securities.

Broadly Syndicated/Other:  Although our primary focus will be to invest in proprietary transactions, in certain circumstances we will also invest in the broadly syndicated loan and high yield markets. Broadly syndicated loans and bonds are generally more liquid than our proprietary investments and provide a complement to our more illiquid proprietary strategies. In addition, and because we typically receive more attractive financing terms on these positions than we do on our less liquid assets, we are able to leverage the broadly syndicated portion of our portfolio in such a way that maximizes the levered return potential of our portfolio.

TABLE OF CONTENTS

We anticipate that our portfolio will be comprised of investments at all levels of a private company’s capital structure, including senior secured loans, second lien secured loans, subordinated loans and common and preferred equity of private U.S. small and middle-market companies. We may purchase interests through secondary market transactions in the “over-the-counter” market for institutional loans or directly from our target companies as primary market investments. We may also purchase minority interests in the form of common or preferred equity in our target companies, either directly or through a co-investment with a financial sponsor, such as an institutional investor or private equity firm. In addition, a portion of our portfolio may be comprised of corporate bonds, unsecured loans, CLOs and other debt securities. However, such investments are not expected to comprise a significant portion of our portfolio. Once we raise a significant amount of proceeds from our offering, we expect that our investments will generally range between $2 million and $15 million each, although investments may vary proportionately with the size of our capital base and will ultimately be made at the discretion of Freedom Capital Investment Advisors, subject to oversight by our board of directors. Prior to raising significant amounts of capital, we may make smaller investments due to liquidity constraints.

Revenues

We plan to generate revenues in the form of interest income on the debt investments we hold. We may also generate revenues in the form of dividends and other distributions on the equity or other securities we may hold. In addition, we may generate revenues in the form of commitment, closing, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees. Any such fees generated in connection with our investments will be recognized as earned.

Expenses

Our primary operating expenses will be the payment of advisory fees and other expenses under the investment advisory and administrative services agreement, interest expense from financing facilities and other expenses necessary for our operations. Our investment advisory fee will compensate Freedom Capital Investment Advisors for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. Freedom Capital Investment Advisors will be responsible for compensating an investment sub-adviser, if any.

We will reimburse Freedom Capital Investment Advisors for expenses necessary to perform servicesadjustments related to our administration and operations. Such services will include the provision of general ledger accounting, fund accounting, legal services, investor relations and other administrative services. Freedom Capital Investment Advisors also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records which we are required to maintain and preparing reports for our stockholders and reports filed with the SEC. In addition, Freedom Capital Investment Advisors assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. The amount of this reimbursement will be the lesser of (1) Freedom Capital Investment Advisors’ actual costs incurred in providing such services and (2) the amount that we estimate we would be required to pay alternative service providers for comparable services in the same geographic location. Freedom Capital Investment Advisors will be required to allocate the cost of such services to us based on objective factors such as assets, revenues, time allocations and/or other reasonable metrics. Our board of directors will assess the reasonableness of such reimbursements based on the breadth, depth and quality of such services as compared to the estimated costNet Asset Value had the Initial Public Offering for Orchestra BioMed, Inc. (OBIO) occurred as of December 2019, at which time we anticipated investing an additional $2 million which would provide to us a) an additional $2 million worth of obtaining similar services from third-party service providers known to be available. In addition, our board of directors will consider whether any single third-party service provider would be capable of providing all such services at comparable costinvestment securities, and quality. Finally, our board of directors will compare the total amount paid to Freedom Capital Investment Advisors for such servicesb) as a percentageresult of our net assets to the same ratio as reported by other comparable BDCs. We will not reimburse Freedom Capital Investment Advisors for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Freedom Capital Investment Advisors.

TABLE OF CONTENTS

We will bear all other expenses of our operations and transactions, including (without limitation) fees and expenses relating to:

Financial Condition, Liquidity and Capital Resources

We intend to generate cash primarily from the net proceeds of our continuous public offering and from cash flows from fees, interest and dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. Immediately after we satisfy the minimum offering requirement, gross subscription funds will total at least $2,500,000. Subsequent to satisfying the minimum offering requirement, we will sell our shares on a continuous basis at an initial offering price of $10.00 and thereafter will accept

TABLE OF CONTENTS

subscriptions on a continuous basis and issue shares at monthly closings at prices that, after deducting selling commissions and dealer manager fees, must be above our netNet asset value per share. In connectioncommon share would increase from $1.42 to $2.04.

STHEALTH CAPITAL INVESTMENT CORPORATION

PRO FORMA BALANCE SHEET  

Notes to pro forma balance sheet

 (a) Represents the purchase of $2M of securities offered at the proposed IPO with each monthly closing on the salecash

 (b) Represents a gain of 170,000 shares of our common stock offeredOBIO pursuant to the prospectus on a continuous basis, our board of directors or a committee thereof is required, within 48 hours of the time that each closing and sale is made, to make the determination that we are not selling shares of our common stockagreement, valued at a price$15.00 per share which, after deducting selling commissions and dealer manager fees, is below our then-current net asset value per share.

Prior (c) Represents the settlement of a liability related to investing in securities of portfolio companies, we will invest the net proceeds from our continuous public offering and from any sales and paydowns of investments primarily in cash, cash equivalents, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, consistent with our BDC election and our intent to be taxed as a RIC.

We intend to borrow funds to make investments, including before we have fully invested the proceeds from our public offering, to the extent we determine that additional capital would allow us to take advantage of additional investment opportunities, if the market for debt financing presents attractively priced debt financing opportunities, or if our board of directors determines that leveraging our portfolio would be in our best interests and the best interests of our stockholders. However, we have not currently decided whether, and to what extent, we will finance portfolio investments using debt. We do not currently anticipate issuing any preferred stock.

Capital Contribution by Freedom Capital Investment Management LLC

In December 2014, pursuant to a private placement, Freedom Capital Investment Management LLC contributed an aggregate of $100,000, which was used in its entirety to purchase approximately 11,111.110 shares of common stock at $9.00 per share, which represents the initial public offering price of $10.00 per share, net of selling commissions and dealer manager fees. Freedom Capital Investment Management has agreed not to tender these shares for repurchase as long as it remains an affiliate of our investment adviser.

RIC Status and Distributions

We intend to elect to be treated for federal income tax purposes, and intend to qualify annually thereafter, as a RIC under Subchapter M of the Code. In order to qualify as a RIC, we must, among other things, distribute at least 90% of our “investment company taxable income,” as defined by the Code, each year. As long as the distributions are declared by the later of the fifteenth day of the ninth month following the close of the taxable year or the due date of the tax return, including extensions, distributions paid up to one year after the current tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. We intend to make sufficient distributions to our stockholders to qualify for and maintain our RIC status each year. We are also subject to nondeductible federal excise taxes if we do not distribute at least 98% of net ordinary income, 98.2% of any capital gain net income, if any, and any recognized and undistributed income from prior years on which we paid no federal income taxes.

Subject to our board of directors’ discretion and applicable legal restrictions, we intend to authorize and declare ordinary cash distributions on a monthly or quarterly basis and pay such distributions on a monthly or quarterly basis beginning no later than the first calendar quarter after the month in which the minimum offering requirement is met. We will then calculate each stockholder’s specific distribution amount for the period using record and declaration dates and each stockholder’s distributions will begin to accrue on the date we accept each stockholder’s subscription for shares of our common stock. From time to time, we may also pay special interim distributions in the form of cash or common stock at the discretion of our board of directors. During certain periods, our distributions may exceed our earnings, especially during the period before we have substantially invested the proceeds from our continuous public offering of our common stock. As a result, it is possible that a portion of the distributions we make will represent a return of capital for tax purposes. A return of capital generally is a return of an investor’s investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with our continuous public offering, including any fees payable to Freedom Capital Investment Advisors. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders.

TABLE OF CONTENTS

We intend to make our ordinary distributions in the form of cash out of assets legally available for distribution, unless stockholders elect to receive their distributions in additional shares of our common stock under our distribution reinvestment plan. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. stockholder.

We have adopted an “opt in” distribution reinvestment plan for our stockholders. As a result, if we make a cash distribution, our stockholders will receive distributions in cash unless they specifically “opt in” to the distribution reinvestment plan so as to have their cash distributions reinvested in additional shares of our common stock. However, certain state authorities or regulators may impose restrictions from time to time that may prevent or limit a stockholder’s ability to participate in our distribution reinvestment plan.

We may fund our cash distributions to stockholders from any sources of funds legally available to us, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to us on account of preferred and common equity investments in portfolio companies and expense reimbursements from Freedom Capital Investment Advisors. We have not established limits on the amount of funds we may use from available sources to make distributions.

The Expense Reimbursement Agreement by Freedom Capital Investment Advisors to waive its fees and reimburse certain of our expenses is intended to prevent our distributions from being comprised of offering proceeds and borrowings so that our distributions will not constitute returns of capital for generally accepted accounting principles purposes. Freedom Capital Investment Advisors is under no obligation to waive its fees and reimburse certain of our expenses to prevent our distributions from constituting returns of capital for tax purposes.

We expect that for a period of time following commencement of this offering, which time period may be significant, substantial portions of our distributions may be funded through the reimbursement of certain expenses by Freedom Capital Investment Advisors and its affiliates, including through the waiver of certain investment advisory fees by Freedom Capital Investment Advisors, that may be subject to repayment by us within three years. The purpose of this arrangement is to ensure that no portion of our distributions to stockholders will be paid from offering proceeds or borrowings. Any such distributions funded through expense reimbursements or waivers of advisory fees will not be based on our investment performance, and can only be sustained if we achieve positive investment performance in future periods and/or Freedom Capital Investment Advisors continues to make such reimbursements or waivers of such fees. Our future repayments of amounts reimbursed or waived by Freedom Capital Investment Advisors or its affiliates will reduce the distributions that you would otherwise receive in the future. There can be no assurance that we will achieve the performance necessary to be able to pay distributions at a specific rate or at all. Freedom Capital Investment Advisors and its affiliates have no obligation to waive advisory fees or otherwise reimburse expenses in future periods.

The determination of the tax attributes of our distributions will be made annually as of the end of each fiscal year based upon our taxable income for the full year and distributions paid for the full year. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.

Critical Accounting Policies

Our financial statements are prepared in conformityformer vendor with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparing the financial statements, management will make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management also will utilize available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving dueno further consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of

TABLE OF CONTENTS

companies in similar businesses. As we execute our expected operating plans, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below.

Valuation of Portfolio Investments

We intend to determine the net asset value of our investment portfolio each quarter. Securities that are publicly-traded will be valued at the reported closing price on the valuation date. Securities that are not publicly-traded will be valued at fair value as determined in good faith by our board of directors. In connection with that determination, we expect that Freedom Capital Investment Advisors will provide our board of directors with portfolio company valuations which are based on relevant inputs, including, but not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial statements and forecasts, and valuations prepared by third-party valuation services.

Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or ASC Topic 820, issued by the Financial Accounting Standards Board, or the FASB, clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

With respect to investments for which market quotations are not readily available, we intend to undertake a multi-step valuation process each quarter, as described below:

Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements will refer to the uncertainty with respect to the possible effect of such valuations and any change in such valuations on our financial statements. Below is a description of factors that our board of directors may consider when valuing our debt and equity investments.

Valuation of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices, we may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that our board of directors may consider include the borrower’s ability to adequately service its debt, the fair market value of the portfolio company in relation to the face amount of its outstanding debt and the quality of collateral securing our debt investments.

TABLE OF CONTENTS

For convertible debt securities, fair value will generally approximate the fair value of the debt plus the fair value of an option to purchase the underlying security (the security into which the debt may convert) at the conversion price. To value such an option, a standard option pricing model may be used.

Our equity interests in portfolio companies for which there is no liquid public market will be valued at fair value. Our board of directors, in its analysis of fair value, may consider various factors, such as multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. All of these factors may be subject to adjustments based upon the particular circumstances of a portfolio company or our actual investment position. For example, adjustments to EBITDA may take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items.

Our board of directors may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. Our board of directors may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors it deems relevant in assessing the value. Generally, the value of our equity interests in public companies for which market quotations are readily available will be based upon the most recent closing public market price. Portfolio securities that carry certain restrictions on sale will typically be valued at a discount from the public market value of the security.

If we receive warrants or other equity-linked securities at nominal or no additional cost in connection with an investment in a debt security, our board of directors will allocate the cost basis in the investment between the debt securities and any such warrants or other equity-linked securities received at the time of origination. Our board of directors will subsequently value these warrants or other equity-linked securities received at fair value.

The fair values of our investments will be determined in good faith by our board of directors in consultation with management. Our board of directors will be solely responsible for the valuation of our portfolio investments at fair value as determined in good faith pursuant to our valuation policy and consistently applied valuation process. We intend to value all of our Level 2 and Level 3 assets by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end provided by independent third-party pricing services and screened for validity by such services. For investments for which the third-party pricing service is unable to obtain quoted prices, we intend to obtain bid and ask prices directly from dealers who make a market in such investments. To the extent that we hold investments for which no active secondary market exists and, therefore, no bid and ask prices can be readily obtained, our valuation committee intends to utilize an independent third-party valuation service to value such investments.

We will periodically benchmark the bid and ask prices we receive from the third-party pricing services and/or dealers, as applicable, and valuations received from the third-party valuation service against the actual prices at which we purchase and sell our investments. We believe that these prices will be reliable indicators of fair value. Our valuation committee and board of directors will review and approve the valuation determinations made with respect to these investments in a manner consistent with our valuation process.

Revenue Recognition

Security transactions will be accounted for on the trade date. We will record interest income on an accrual basis to the extent that we expect to collect such amounts. We will record dividend income on the ex-dividend date. We will not accrue as a receivable interest or dividends on loans and securities if we have reason to doubt our ability to collect such income. Loan origination fees, original issue discount and market discount will be capitalized, and we will amortize such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount will be recorded as fee income. Upfront structuring fees will be recorded as income when earned. We will record prepayment premiums on loans and securities as fee income when we receive such amounts.

TABLE OF CONTENTS

Net Realized Gains or Losses, Net Change in Unrealized Appreciation or Depreciation and Net Change in
Unrealized Gains or Losses on Foreign Currency

Gains or losses on the sale of investments will be calculated by using the specific identification method. We will measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees. Net change in unrealized appreciation or depreciation will reflect the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gains or losses when gains or losses are realized. Net change in unrealized gains or losses on foreign currency will reflect the change in the value of receivables or accruals during the reporting period due to the impact of foreign currency fluctuations.

Organization Costs

Organization costs include, among other things, the cost of incorporating, including the cost of legal services and other fees pertaining to our organization. As of December 31, 2015, we had incurred organization costs of $46,064, which were paid on our behalf by Freedom Capital Investment Management LLC. These costs are expensed as incurred but, together with offering costs, are limited to 1.5% of total proceeds raised. To the extent we are unable to raise sufficient capital such that the expenses paid by Freedom Capital Investment Advisors or its affiliates on our behalf are more than 1.5% of total proceeds at the end of the offering, Freedom Capital Investment Advisors will forfeit the right to reimbursement of these costs. To date, $1,500 of these costs have been expensed.

Offering Costs

Our offering costs include, among other things, legal fees and other costs pertaining to the preparation of the registration statement. As of December 31, 2015, we had incurred offering costs of $1,387,237, which were paid on our behalf by Freedom Capital Investment Management LLC. These costs will be charged against capital in excess of par value on the balance sheet but, together with organization costs, are limited to 1.5% of total proceeds raised. To the extent we are unable to raise sufficient capital such that the expenses paid by Freedom Capital Investment Advisors or its affiliates on our behalf are more than 1.5% of total proceeds at the end of the offering, Freedom Capital Investment Advisors will forfeit the right to reimbursement of these costs. To date, we have recorded no deferred charge on our balance sheet since the aggregate amount of organization and offering costs exceeds the limitation.

Income Taxes

We intend to elect to be treated for federal income tax purposes, and intend to qualify annually thereafter, as a RIC under Subchapter M of the Code. To qualify for and maintain our qualification as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements and distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,” which is generally our net ordinary income plus the excess, if any, of realized net short-term capital gains over realized net long-term capital losses. As a RIC, we will not have to pay corporate-level federal income taxes on any income that we distribute to our stockholders. We intend to make distributions in an amount sufficient to maintain our RIC status each year and to avoid any federal income taxes on income. We will also be subject to nondeductible federal excise taxes if we do not distribute at least 98% of net ordinary income, 98.2% of any capital gain net income, if any, and any recognized and undistributed income from prior years for which we paid no federal income taxes.

Uncertainty in Income Taxes

We will evaluate our tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax benefits or liabilities in our financial statements. Recognition of a tax benefit or liability with respect to an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. We will recognize interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in our statement of operations.

TABLE OF CONTENTS

Distributions

Distributions to our stockholders will be recorded as of the record date. Subject to our board of directors’ discretion and applicable legal restrictions, we intend to authorize and declare ordinary cash distributions on a monthly or quarterly basis and pay such distributions on a monthly or quarterly basis. Net realized capital gains, if any, will be distributed or deemed distributed at least annually.

Capital Gains Incentive Fee

Pursuant to the terms of the investment advisory and administrative services agreement we entered into with Freedom Capital Investment Advisors, the incentive fee on capital gains will be determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory and administrative services agreement). Such fee will equal 20.0% of our incentive fee capital gains (i.e., our realized capital gains on a cumulative basis from inception, calculated as of the end of the applicable period, net of all realized capital losses and unrealized capital depreciation on a cumulative basis), less the aggregate amount of any previously paid capital gains incentive fees. On a quarterly basis, we will accrue for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.

While the investment advisory and administrative services agreement with Freedom Capital Investment Advisors neither includes nor contemplates the inclusion of unrealized gains in the calculation of the capital gains incentive fee, pursuant to an interpretation of an American Institute of Certified Public Accountants Technical Practice Aid for investment companies, we will include unrealized gains in the calculation of the capital gains incentive fee expense and related capital gains incentive fee payable. This accrual will reflect the incentive fees that would be payable to Freedom Capital Investment Advisors as if our entire portfolio was liquidated at its fair value as of the balance sheet date even though Freedom Capital Investment Advisors is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.

Contractual Obligations

We have entered into an agreement with Freedom Capital Investment Advisors to provide us with investment advisory and administrative services. Payments for investment advisory services under the investment advisory and administrative services agreement will be equal to (a) an annual base management fee of 2.0% of our average monthly gross assets and (b) an incentive fee based on our performance. Freedom Capital Investment Advisors and, to the extent it is required to provide such services, a sub-adviser, if any, will be reimbursed for administrative expenses incurred on our behalf.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.

We will be subject to financial market risks. A rise in the general level of interest rates can be expected to lead to higher interest rates

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to any variable rate investmentsas we hold and to declines in the value of any fixed rate investments we hold. To the extent thatare a substantial portion of our investments may be in variable rate investments, an increase in interest rates could make it easier for us to meet or exceed our incentive fee hurdle rate, as described in the investment advisory and administrative services agreement, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to Freedom Capital Investment Advisors with respect to our increased pre-incentive fee net investment income.smaller reporting company.

In addition, in the future we may seek to borrow funds in order to make additional investments. Our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we would be subject to risks relating to changes in market interest rates. In periods of rising interest rates, when we have debt outstanding, our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

TABLE OF CONTENTS

We expect that our long-term investments will be financed primarily with equity and long-term debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may have risk regarding portfolio valuation.

TABLE OF CONTENTS

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

StHealth Capital Investment Corporation

December 31, 2019

		Page
		Page
Report of Independent Registered Public Accounting Firm			53	F-1
Balance Sheets as of December 31, 20152019 and 20142018			54	F-2
Statements of Operations for the yearyears ended December 31, 20152019 and 2018	F-3
Statements of Changes in Stockholders’ Equity for the period from June 19, 2014 (Inception) toyears ended December 31, 20142019 and 2018			55	F-4
Statements of Changes in Net Assets for the yearyears ended December 31, 20152019 and 2018	F-5
Statements of Cash Flows for the period from June 19, 2014 (Inception) toyears ended December 31, 20142019 and 2018			56	F-6
Notes to Financial Statements for the years ended December 31, 2019 and 2018			57	F-7

TABLEREPORT OF CONTENTSINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
Freedom of

StHealth Capital Investment Corporation
Arlington, Virginia

Opinion on the Financial Statements

We have audited the accompanying balance sheetsheets of FreedomStHealth Capital Investment Corporation (the Company)“Company”) as of December 31, 20152019 and 2014,2018, and the related statements of operations, andstockholders’ equity, changes in net assets and cash flows for the yearyears then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20152019 and 2018, and the results of  its operations and its cash flows for the periodyears then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from June 19, 2014 (Inception)operations and has a net capital deficiency that raises substantial doubt about its ability to December 31, 2014. continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on thesethe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting policiesprinciples used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,

/s/ MaloneBailey, LLP

www.malonebailey.com

We have served as the financial statements referred to above present fairly, in all material respects, the financial position of Freedom Capital Corporation as of December 31, 2015 and 2014, and the results of its operations for the year ended December 31, 2015 and for the period from June 19, 2014 (Inception) to December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.Company’s auditor since 2017

/s/ RSM US LLP

Richmond, VirginiaHouston, Texas
March 18, 201630, 2020 

TABLE OF CONTENTS

STHEALTH CAPITAL INVESTMENT CORPORATION

Freedom Capital Corporation

Balance Sheets

BALANCE SHEETS

		December 31,
		2015				2014
Assets
Cash and cash equivalents		$	100,000			$	—
Subscription receivable			—				100,000
Total assets		$	100,000			$	100,000
Liabilities and Stockholder Equity
Liabilities
Organization costs payable		$	1,500			$	1,500
Total liabilities			1,500				1,500
Commitments and contingencies ($1,431,801 and $250,275, respectively) –  See Note 3
Stockholder Equity
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding			—				—
Common stock, $0.001 par value, 550,000,000 shares authorized, 11,111 shares issued and outstanding			100				100
Capital in excess of par value			99,900				99,900
Accumulated loss			(1,500	)			(1,500	)
Total stockholder equity (net assets)			98,500				98,500
Total liabilities and stockholder equity		$	100,000			$	100,000
Net asset value per share of common stock		$	8.87			$	8.87