PART 2A OF FORM ADV – FIRM BROCHURE

Risk of Loss

The types of securities we recommend to our Clients are illiquid and speculative. There is no guaranty that our recommendations will turn out to be profitable to our Clients or their investors. Our Clients may not be able to sell or liquidate recommended securities if our Clients need capital for other purposes. Our Clients generally do not offer redemption rights or other liquidity options to investors.

There are certain risk factorsthat apply generally to the types of investment securities we recommend to our Clients and are summarized below. There are also numerous risk factors that may apply to the specific investment program or strategy to be followed by a particular Client. These general and specific risks are described in the Offering Documents of each Client.

Illiquid Securities (High-Risk Investments): Clients are permitted to invest and may invest in high-risk investments in illiquid assets. Most Clients’ investments will be difficult to value. Return on investments is contingent on the cash flow, growth and prosperity of the portfolio company investments in which the Client invests. The success of these investments will be subject to factors over which the Client and the Adviser will have little or no control. Consequently, the Adviser’s investments are highly speculative.

Resale of portfolio company investments may be restricted by applicable securities and other laws, and there will generally be no public market for Clients’ portfolio investments. There can be no assurance that an interest in any Client will earn a return or that the returns on successful investments will be sufficient to permit return of capital or profits to the investors in any Client.

The Clients will invest in privately offered securities: Generally, very little public information exists about these opportunities, their historical operations and cash flows, and the Clients will be required to rely on the ability of the Adviser to obtain adequate information to evaluate the potential returns from investing in these opportunities. Moreover, these opportunities may rely on third-party managers and operators, and the loss of one or more of these individuals could have a significant impact on the investment returns from a particular Portfolio Investment.

Investments Through Intermediate Entities. Certain Clients will invest into intermediate entities that have themselves been formed for the purpose of investing in operating businesses. Such intermediate entities will typically charge their own management fees and expenses and generally receive a carried interest, in each case as set forth in the offering documents with respect to such investment. Accordingly, investors in Clients of the Adviser will, in these circumstances, be subject to an additional layer of fees and expenses, in addition to those payable to the Adviser and/or its affiliates.

In addition, such intermediate entities will have full discretion and control over the investments made into the underlying business. The managers of such intermediate entities may have additional interests, economic or otherwise, in the underlying portfolio company that may not align with the interests of the Client or the investors in the Client. The Client will hold an interest in the intermediate entity and not in the underlying operating company itself, and therefore will not appear on the cap table of the operating business, may not receive the same level of information rights, and will not benefit from any governance or minority protection rights typically negotiated by direct investors.

The Client will have little or no ability to influence the decisions of the intermediate entity, will be dependent upon the management of such entity to safeguard the investment, and will be subject to any regulatory, legal, tax, operational, and other risks borne by the intermediate entity. Further, there is no assurance that the reporting provided by the intermediate entity will be timely, comprehensive, or consistent with the information that would otherwise be available through a direct investment in the operating company. These factors may limit the Client’s ability to effectively monitor its investment, increase the risk of misalignment of interests, and reduce potential investment returns.

Investments in Distressed Assets: The Clients may make Portfolio Investments in ventures or assets that are experiencing financial distress. Such opportunities often involve an asset that is operating at a loss or with substantial variations in operating results from period to period. Portfolio Investments experiencing financial distress may be involved in insolvency proceedings and have the need for substantial additional capital to support continued operations or to improve their financial condition and may have very high amounts of leverage. Distressed investments may have further inability to service their debt obligations during an economic downturn or periods of rising interest rates, may not have access to more traditional methods of financing and may be unable to repay debt by refinancing. The value of distressed assets tend to be more volatile and may have increased price sensitivity to changing interest rates and adverse economic and business developments than other investment opportunities.

Distressed assets are often more sensitive to company-specific developments and changes in economic conditions than other investments.

Investment with Third Parties in Partnerships and Other Entities: The Clients may invest with third parties, including members of management, through consortiums of private equity investors, joint ventures, or other entities, thereby acquiring non-controlling interests in certain investments. Although the Clients may not have control over these investments and therefore may have a limited ability to protect its position therein, the Adviser expects that rights will be negotiated to protect the Clients’ interests.

Cybersecurity Breaches and Disruptions: Cybersecurity is a term that is used to describe the technology, processes and practices designed to protect networks, systems, computers, programs and data from cyber attacks and hacking as well as other damage or interruptions that, in either case, can result in damage and disruption to hardware and software systems, loss or corruption of data, or misappropriation of confidential or sensitive data.

The Adviser and its service providers depend on both outsourced and internal information technology systems to perform their functions. Despite the efforts with which we (as well as related parties and service providers) review their own information technology systems or those of our service providers, a party may not be in a position to verify the risk or reliability of such systems or to protect such systems.

Similarly, despite any training or other measures that the Adviser may perform with regard to its employees, professionals or any service providers, such individuals may intentionally or inadvertently take action or fail to act, in a manner that poses risks to the Adviser, its Clients and investors. Thus, the Clients, and their service providers may be subject to losses, and interruptions arising out of cyber incidents, phishing attempts, cybersecurity breaches, denial-of-service attacks, computer viruses, network failures, computer and telecommunication failures, employee and professional usage errors, power outages, and unauthorized access to computer networks and hardware and computer systems, in addition to catastrophic events, such as fires, hurricanes, floods and other natural disasters and terrorist incidents.

If Adviser hardware systems, networks or software are compromised, inoperable or stop functioning properly due to cyber related issues, it may result in significant cost to fix or replace them. The damage to, or interruption or failure of, these information technology systems for any reason could cause significant interruptions in our operations and result in a security breach, resulting in the loss of confidentiality or privacy of confidential or sensitive data, including personal information relating to investors, and cause material financial loss or harm. Such an occurrence could harm the Adviser or a Client’s reputation, subject any such entity and its respective affiliates to legal claims and otherwise affect its business and financial performance. Such damage to, or interruption or failure of, these information technology systems may cause losses to the Client by interfering with the operations of ClearList Capital or by requiring a significant amount of our resources.

Regulatory Risk: Statutes, regulations and policies are continually under review by the U.S. Congress and state legislatures and federal and state regulatory agencies. The introduction of new legislation or amendments to existing legislation and regulations (including changes in how they are interpreted or implemented) by governments and regulators, the decisions of courts and tribunals and the rulings and decisions of regulatory authorities, can adversely impact our Clients’ returns. The regulatory environment for private equity and private investment funds is evolving, and changes in the regulation of these funds and investments may adversely affect the value of investments held by the Clients, the cost of compliance with applicable regulations, and our ability to implement any business plan with respect to Clients and investments.

Investments in Securities and Other Assets Believed to Be Undervalued: The Adviser may invest assets in undervalued securities. The identification of such investment opportunities is a difficult task, and there are no assurances that such opportunities will be successfully recognized or acquired. While such investments offer opportunities for above-average capital appreciation, they also involve a high degree of financial risk and can result in substantial losses. Returns generated from such investments may not adequately compensate for the business and financial risks assumed. Such investments can sometimes include bonds and other fixed income securities, including, without limitation, commercial paper and “higher yielding” (and, therefore, higher risk) debt securities. It is likely that a major economic recession could severely disrupt the market for such investments and severely impact their value. In addition, it is likely that any such economic downturn could adversely affect the ability of the issuers of such obligations to repay principal and pay interest thereon and increase the incidence of default for such securities. Additionally, there can be no assurance that other investors will ever come to realize the value of some of these investments, and that they will ever increase in price. Furthermore, we may be forced to hold such investments for a substantial period of time before realizing their anticipated value.

Leverage: The Adviser may,subject to applicable regulations and restrictions, if any, outlined in Client Offering Documents, leverage Client’s capital. Using leverage usually results in a Client’s net assets increasing or decreasing at a greater rate than if borrowed money is not used to amplify the results of invested capital.

 
Other Instruments: ClearList Capital may use some or all of the investment strategies described above or other investment strategies in its discretion.

 
Please refer to the Client’s Offering Documents for specific and further information regarding methods of analysis of investment strategies and risk of loss specific to each Client.

 
Shared Restricted List: The Adviser and certain of its affiliated broker-dealers share restricted lists. As such, Clients will be restricted from acquiring or disposing of certain securities that are on the shared restricted lists. Please see Item 10 for more information.