Freedom Capital

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Risk Factors

An investment in our common stock involves a high degree of risk and may be considered speculative. You should carefully consider the information found in “Risk Factors” before deciding to invest in shares of our common stock. The following are some of the risks an investment in us involves:

  • Because there is no public trading market for shares of our common stock and we are not obligated to effectuate a liquidity event by a specified date, if at all, it is unlikely that you will be able to sell your shares. While we intend to conduct quarterly tender offers for our shares, only a limited number  of shares will be eligible for repurchase and we may amend, suspend or terminate the share repurchase program at any time. In addition, any such repurchases will be at a 10% discount to the current offering price on the date of repurchase.
  • An investment in our shares is not suitable for you if you might need access to the money you invest in the foreseeable future.
  • We are a new company and have no operating history and are subject to the business risks and uncertainties associated with any new business, including the risk that we will not achieve our investment objectives.
  • We intend to invest in securities that are rated below investment grade by rating agencies 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.
  • The securities in which we invest may also be difficult to value and illiquid.
  • Our distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to us for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses.
  • An investment strategy focused primarily on privately-held middle-market companies presents certain challenges, including the lack of available information about these companies.
  • Value of underlying holdings will fluctuate.
  • Investing in middle-market companies involves a number of significant risks, any one of which could have a material adverse effect on our operating results.
  • A lack of liquidity in certain of our investments may adversely affect our business.
  • We are subject to financial market risks, including changes in interest rates, which may have a substantial negative impact on our investments.
  • We may borrow funds to make investments, which may increase the volatility of our investments and may increase the risks of investing in our securities.
  • We have limited operating history and are subject to the business risks and uncertainties associated with any new business.
  • This is a “best efforts” offering and if we are unable to raise substantial funds then we will be more limited in the number and type of investments we may make.
  • FCC is a long-term investment for persons of adequate financial means who have no need for liquidity in their investment. To invest in us, an investor must have either (i) a net worth of at least $70,000 and an annual gross income of at least $70,000, or (ii) a net worth of at least $250,000. Some states impose higher suitability standards. Please consult the prospectus for a detailed description of the suitability standards imposed on investors, including heightened standards required by certain states
  • Our distributions to stockholders may be funded in significant part from the reimbursement of certain expenses, including through the waiver of certain investment advisory fees that are subject to repayment to our affiliate, Freedom Capital Investment Management. Significant portions of these distributions may not be based on our investment performance and such waivers and reimbursements by Freedom Capital Investment Management may not continue in the future. If Freedom Capital Investment Management were not to reimburse certain of our expenses, including through the waiver of certain of its advisory fees, significant portions of these distributions may come from offering proceeds or borrowings.
  • The repayment of any amount owed to Freedom Capital Management will reduce the future distributions to which you would otherwise be entitled.
  • An investment in a non-traded BDC involves substantial up-front fees, including selling commissions and dealer manager fees, and ongoing fees to the adviser in the form of management and incentive fees and reimbursements.
  • Investing in small and middle-market companies involves a number of significant risks, any one of which could have a material adverse effect on our operating results.
  • As a new company with no investments, our continuous public offering may be deemed to be a “blind pool” offering. An investor may not have the opportunity to evaluate historical data or assess investments prior to purchasing our shares.

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