arcee-ai/sec-data-full · Datasets at Hugging Face

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to holders for U.S. federal income tax purposes could be increased or reduced or the character of allocated income or loss could be modified.
See “ Material U.S. Federal Income Tax Considerations ” included in our prospectus, dated August 2, 2022 and filed with
the SEC on August 4, 2022, for more information. All
of our income could be subject to an entity-level tax in the United States, which could result in a material reduction in cash flow available
for distribution to shareholders and thus could result in a substantial reduction in the value our shares. Given
the number of shareholders that we have, and because our shares are listed for trading on the over-the-counter market, we believe that
our company will be regarded as a publicly-traded partnership. Under the federal tax laws, a publicly-traded partnership generally will
be treated as a corporation for U.S. federal income tax purposes. A publicly-traded partnership will be treated as a partnership, however,
and not as a corporation for U.S. federal tax purposes so long as 90% or more of its gross income for each taxable year in which it is
publicly traded constitutes “qualifying income,” within the meaning of section 7704(d) of the Internal Revenue Code of 1986,
as amended, or the Code, and we are not required to register under the Investment Company Act. Qualifying income generally includes dividends,
interest (other than interest derived in the conduct of a lending or insurance business or interest the determination of which depends
in whole or in part on the income or profits of any person), certain real property rents, certain gain from the sale or other disposition
of real property, gains from the sale of stock or debt instruments which are held as capital assets, and certain other forms of “passive-type”
income. We expect to realize sufficient qualifying income to satisfy the qualifying income exception. We also expect that we will not
be required to register under the Investment Company Act. In
certain cases, income that would otherwise qualify for the qualifying income exception may not so qualify if it is considered to be derived
from an active conduct of a business. For example, the IRS may assert that interest received by us from our subsidiaries is not qualifying
income because it is derived in the conduct of a lending business. If we fail to satisfy the qualifying income exception or is required
to register under the Investment Company Act, we will be classified as a corporation for U.S. federal (and certain state and local) income
tax purposes, and shareholders would be treated as shareholders in a domestic corporation. We would be required to pay federal income
tax at regular corporate rates on its income. In addition, we would likely be liable for state and local income and/or franchise taxes
on our income. Distributions to the shareholders would constitute ordinary dividend income (taxable at then existing ordinary income
rates) or, in certain cases, qualified dividend income (which is generally subject to tax at reduced tax rates) to such holders to the
extent of our earnings and profits, and the payment of these dividends would not be deductible to us. Shareholders would receive an IRS
Form 1099-DIV in respect of such dividend income and would not receive a Schedule K-1. Taxation of our company as a corporation could
result in a material reduction in distributions to our shareholders and after-tax return and would likely result in a substantial reduction
in the value of, or materially adversely affect the market price of, our shares. 81 The
present U.S. federal income tax treatment of an investment in our shares may be modified by administrative, legislative, or judicial
interpretation at any time, and any such action may affect investments previously made. For example, changes to the U.S. federal tax
laws and interpretations thereof could make it more difficult or impossible to meet the qualifying income exception for our company to
be classified as a partnership, and not as a corporation, for U.S. federal income tax purposes, necessitate that our company restructure
its investments, or otherwise adversely affect an investment in our shares. In
addition, we may become subject to an entity level tax in one or more states. Several states are evaluating ways to subject partnerships
to entity level taxation through the imposition of state income, franchise, or other forms of taxation. If any state were to impose a
tax upon our company as an entity, our distributions to you would be reduced. Complying
with certain tax-related requirements may cause us to forego otherwise attractive business or investment opportunities or enter into
acquisitions, borrowings, financings, or arrangements we may not have otherwise entered into. In
order for our company to be treated as a partnership for U.S. federal income tax purposes and not as a publicly traded partnership taxable
as a corporation, we must meet the qualifying income exception discussed above on a continuing basis and must not be required to register
as an investment company under the Investment Company Act. In order to effect such treatment, we may be required to invest through foreign
or domestic corporations, forego attractive business or investment opportunities or enter into borrowings or financings we (or any of
our subsidiaries, as the case may be) may not have otherwise entered into. This may adversely affect our ability to operate solely to
maximize our cash flow. In addition, we may not be able to participate in certain corporate reorganization transactions that would be
tax free to our shareholders if we were a corporation for U.S. federal income tax purposes. Non-corporate
investors who are U.S. taxpayers will not be able to deduct certain fees, costs or other expenses for U.S. federal income tax purposes. We
will pay a management fee (and possibly certain transaction fees) to our manager. We will also pay certain costs and expenses incurred
in connection with activities of our manager. We intend to deduct such fees and expenses to the extent that they are reasonable in amount
and are not capital in nature or otherwise nondeductible. It is expected that such fees and other expenses will generally constitute
miscellaneous itemized deductions for non-corporate U.S. taxpayers who hold our shares. Under current law in effect for taxable years
beginning after December 31, 2017 and before January 1, 2026, non-corporate U.S. taxpayers may not deduct any such miscellaneous itemized
deductions for U.S. federal income tax purposes. A non-corporate U.S. taxpayer’s inability to deduct such items could result in
such holder reporting as his or her share of company taxable income an amount that exceeds any cash actually distributed to such U.S.
taxpayer for the year. U.S. holders of our shares that are corporations generally will be able to deduct these fees, costs and expenses
in accordance with applicable U.S. federal income tax law. A
portion of the income arising from an investment in our shares may be treated as unrelated business taxable income and taxable to certain
tax-exempt holders despite such holders’ tax-exempt status. We
expect to incur debt with respect to certain of our investments that will be treated as “acquisition indebtedness” under
section 514 of the Code. To the extent we recognize income from any investment with respect to which there is “acquisition indebtedness”
during a taxable year, or to the extent we recognize gain from the disposition of any investment with respect to which there is “acquisition
indebtedness,” a portion of that income will be treated as unrelated business taxable income and taxable to tax-exempt investors.
In addition, if the IRS successfully asserts that we are engaged in a trade or business for U.S. federal income tax purposes (for example,
if it determines we are engaged in a lending business), tax-exempt holders, and in certain cases non-U.S. holders, would be subject to
U.S. income tax on any income generated by such business. The foregoing would apply only if the amount of such business income does not
cause us to fail to meet the qualifying income test (which would happen if such income exceeded 10% of our gross income, and in which
case such failure would cause us to be taxable as a corporation). A
portion of the income arising from an investment in our shares may be treated as income that is effectively connected with our conduct
of a U.S. trade or business, which income would be taxable to holders who are not U.S. taxpayers. If
the IRS successfully asserts that we are engaged in a trade or business in the United States for U.S. federal income tax purposes (for
example, if it determines we are engaged in a lending business), then in certain cases non-U.S. holders would be subject to U.S. income
tax on any income that is effectively connected with such business. It could also cause the non-U.S. holder to be subject to U.S. federal
income tax on a sale of his or her interest in our company. The foregoing would apply only if the amount of such business income does
not cause us to fail to meet the qualifying income test (which would happen if such income exceeded 10% of our gross income, and in which
case such failure would cause us to be taxable as a corporation). 82 Risks
related to recently enacted legislation. The
rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the
IRS and the U.S. Treasury Department. No assurance can be given as to whether, when or in what form the U.S. federal income tax laws
applicable to us and our shareholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal
income tax laws could adversely affect an investment in our shares. We
cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be issued, nor
is the long-term impact of recently enacted tax legislation clear. Prospective investors are urged to consult their tax advisors regarding
the effect of potential changes to the U.S. federal income tax laws on an investment in our shares. Risks
Related to Ownership of Our Common Shares We
may not be able to maintain a listing of our common shares on NYSE American. Our
common shares are listed on NYSE American and we must meet certain financial and liquidity criteria to maintain the listing of our common
shares on NYSE American. If we fail to meet any listing standards or if we violate any listing requirements, our common shares may be
delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange
outweighs the benefits of such listing. A delisting of our common shares from NYSE American may materially impair our shareholders’
ability to buy and sell our common shares and could have an adverse effect on the market price of, and the efficiency of the trading
market for, our common shares. The delisting of our common shares could significantly impair our ability to raise capital and the value
of your investment. The
market price, trading volume and marketability of our common shares may, from time to time, be significantly affected by numerous factors
beyond our control, which may materially adversely affect the market price of your common shares, the marketability of your common shares
and our ability to raise capital through future equity financings. The
market price and trading volume of our common shares may fluctuate significantly. Many factors that are beyond our control may materially
adversely affect the market price of your common shares, the marketability of your common shares and our ability to raise capital through
equity financings. These factors include the followin ● actual
or anticipated variations in our periodic operating results; ● increases
in market interest rates that lead investors of our common shares to demand a higher investment
return; ● changes

to holders for U.S. federal income tax purposes could be increased or reduced or the character of allocated income or loss could be modified.

See “ Material U.S. Federal Income Tax Considerations ” included in our prospectus, dated August 2, 2022 and filed with

the SEC on August 4, 2022, for more information. All

of our income could be subject to an entity-level tax in the United States, which could result in a material reduction in cash flow available

for distribution to shareholders and thus could result in a substantial reduction in the value our shares. Given

the number of shareholders that we have, and because our shares are listed for trading on the over-the-counter market, we believe that

our company will be regarded as a publicly-traded partnership. Under the federal tax laws, a publicly-traded partnership generally will

be treated as a corporation for U.S. federal income tax purposes. A publicly-traded partnership will be treated as a partnership, however,

and not as a corporation for U.S. federal tax purposes so long as 90% or more of its gross income for each taxable year in which it is

publicly traded constitutes “qualifying income,” within the meaning of section 7704(d) of the Internal Revenue Code of 1986,

as amended, or the Code, and we are not required to register under the Investment Company Act. Qualifying income generally includes dividends,

interest (other than interest derived in the conduct of a lending or insurance business or interest the determination of which depends

in whole or in part on the income or profits of any person), certain real property rents, certain gain from the sale or other disposition

of real property, gains from the sale of stock or debt instruments which are held as capital assets, and certain other forms of “passive-type”

income. We expect to realize sufficient qualifying income to satisfy the qualifying income exception. We also expect that we will not

be required to register under the Investment Company Act. In

certain cases, income that would otherwise qualify for the qualifying income exception may not so qualify if it is considered to be derived

from an active conduct of a business. For example, the IRS may assert that interest received by us from our subsidiaries is not qualifying

income because it is derived in the conduct of a lending business. If we fail to satisfy the qualifying income exception or is required

to register under the Investment Company Act, we will be classified as a corporation for U.S. federal (and certain state and local) income

tax purposes, and shareholders would be treated as shareholders in a domestic corporation. We would be required to pay federal income

tax at regular corporate rates on its income. In addition, we would likely be liable for state and local income and/or franchise taxes

on our income. Distributions to the shareholders would constitute ordinary dividend income (taxable at then existing ordinary income

rates) or, in certain cases, qualified dividend income (which is generally subject to tax at reduced tax rates) to such holders to the

extent of our earnings and profits, and the payment of these dividends would not be deductible to us. Shareholders would receive an IRS

Form 1099-DIV in respect of such dividend income and would not receive a Schedule K-1. Taxation of our company as a corporation could

result in a material reduction in distributions to our shareholders and after-tax return and would likely result in a substantial reduction

in the value of, or materially adversely affect the market price of, our shares. 81 The

present U.S. federal income tax treatment of an investment in our shares may be modified by administrative, legislative, or judicial

interpretation at any time, and any such action may affect investments previously made. For example, changes to the U.S. federal tax

laws and interpretations thereof could make it more difficult or impossible to meet the qualifying income exception for our company to

be classified as a partnership, and not as a corporation, for U.S. federal income tax purposes, necessitate that our company restructure

its investments, or otherwise adversely affect an investment in our shares. In

addition, we may become subject to an entity level tax in one or more states. Several states are evaluating ways to subject partnerships

to entity level taxation through the imposition of state income, franchise, or other forms of taxation. If any state were to impose a

tax upon our company as an entity, our distributions to you would be reduced. Complying

with certain tax-related requirements may cause us to forego otherwise attractive business or investment opportunities or enter into

acquisitions, borrowings, financings, or arrangements we may not have otherwise entered into. In

order for our company to be treated as a partnership for U.S. federal income tax purposes and not as a publicly traded partnership taxable

as a corporation, we must meet the qualifying income exception discussed above on a continuing basis and must not be required to register

as an investment company under the Investment Company Act. In order to effect such treatment, we may be required to invest through foreign

or domestic corporations, forego attractive business or investment opportunities or enter into borrowings or financings we (or any of

our subsidiaries, as the case may be) may not have otherwise entered into. This may adversely affect our ability to operate solely to

maximize our cash flow. In addition, we may not be able to participate in certain corporate reorganization transactions that would be

tax free to our shareholders if we were a corporation for U.S. federal income tax purposes. Non-corporate

investors who are U.S. taxpayers will not be able to deduct certain fees, costs or other expenses for U.S. federal income tax purposes. We

will pay a management fee (and possibly certain transaction fees) to our manager. We will also pay certain costs and expenses incurred

in connection with activities of our manager. We intend to deduct such fees and expenses to the extent that they are reasonable in amount

and are not capital in nature or otherwise nondeductible. It is expected that such fees and other expenses will generally constitute

miscellaneous itemized deductions for non-corporate U.S. taxpayers who hold our shares. Under current law in effect for taxable years

beginning after December 31, 2017 and before January 1, 2026, non-corporate U.S. taxpayers may not deduct any such miscellaneous itemized

deductions for U.S. federal income tax purposes. A non-corporate U.S. taxpayer’s inability to deduct such items could result in

such holder reporting as his or her share of company taxable income an amount that exceeds any cash actually distributed to such U.S.

taxpayer for the year. U.S. holders of our shares that are corporations generally will be able to deduct these fees, costs and expenses

in accordance with applicable U.S. federal income tax law. A

portion of the income arising from an investment in our shares may be treated as unrelated business taxable income and taxable to certain

tax-exempt holders despite such holders’ tax-exempt status. We

expect to incur debt with respect to certain of our investments that will be treated as “acquisition indebtedness” under

section 514 of the Code. To the extent we recognize income from any investment with respect to which there is “acquisition indebtedness”

during a taxable year, or to the extent we recognize gain from the disposition of any investment with respect to which there is “acquisition

indebtedness,” a portion of that income will be treated as unrelated business taxable income and taxable to tax-exempt investors.

In addition, if the IRS successfully asserts that we are engaged in a trade or business for U.S. federal income tax purposes (for example,

if it determines we are engaged in a lending business), tax-exempt holders, and in certain cases non-U.S. holders, would be subject to

U.S. income tax on any income generated by such business. The foregoing would apply only if the amount of such business income does not

cause us to fail to meet the qualifying income test (which would happen if such income exceeded 10% of our gross income, and in which

case such failure would cause us to be taxable as a corporation). A

portion of the income arising from an investment in our shares may be treated as income that is effectively connected with our conduct

of a U.S. trade or business, which income would be taxable to holders who are not U.S. taxpayers. If

the IRS successfully asserts that we are engaged in a trade or business in the United States for U.S. federal income tax purposes (for

example, if it determines we are engaged in a lending business), then in certain cases non-U.S. holders would be subject to U.S. income

tax on any income that is effectively connected with such business. It could also cause the non-U.S. holder to be subject to U.S. federal

income tax on a sale of his or her interest in our company. The foregoing would apply only if the amount of such business income does

not cause us to fail to meet the qualifying income test (which would happen if such income exceeded 10% of our gross income, and in which

case such failure would cause us to be taxable as a corporation). 82 Risks

related to recently enacted legislation. The

rules dealing with U.S. federal income taxation are constantly under review by persons involved in the legislative process and by the

IRS and the U.S. Treasury Department. No assurance can be given as to whether, when or in what form the U.S. federal income tax laws

applicable to us and our shareholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal

income tax laws could adversely affect an investment in our shares. We

cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be issued, nor

is the long-term impact of recently enacted tax legislation clear. Prospective investors are urged to consult their tax advisors regarding

the effect of potential changes to the U.S. federal income tax laws on an investment in our shares. Risks

Related to Ownership of Our Common Shares We

may not be able to maintain a listing of our common shares on NYSE American. Our

common shares are listed on NYSE American and we must meet certain financial and liquidity criteria to maintain the listing of our common

shares on NYSE American. If we fail to meet any listing standards or if we violate any listing requirements, our common shares may be

delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange

outweighs the benefits of such listing. A delisting of our common shares from NYSE American may materially impair our shareholders’

ability to buy and sell our common shares and could have an adverse effect on the market price of, and the efficiency of the trading

market for, our common shares. The delisting of our common shares could significantly impair our ability to raise capital and the value

of your investment. The

market price, trading volume and marketability of our common shares may, from time to time, be significantly affected by numerous factors

beyond our control, which may materially adversely affect the market price of your common shares, the marketability of your common shares

and our ability to raise capital through future equity financings. The

market price and trading volume of our common shares may fluctuate significantly. Many factors that are beyond our control may materially

adversely affect the market price of your common shares, the marketability of your common shares and our ability to raise capital through

equity financings. These factors include the followin ● actual

or anticipated variations in our periodic operating results; ● increases

in market interest rates that lead investors of our common shares to demand a higher investment

return; ● changes