StHealth Capital Investment Corp. Tender Offer Price Indicates Losses for Investors
The White Law Group continues to investigate potential securities claims involving StHealth Capital Investment Corp.
StHealth Capital Investment Corporation (formerly known as Freedom Capital Corp and First Capital Investment Corp.) Is a business development company (BDC) that reportedly invests in private U.S. small- and middle-market companies.
The BDC invested approximately $9.6 million in nine portfolio companies, as of September 2019. STHealth reportedly filed a form D to raise additional capital from investors in 2021. According to filings with the SEC, the company has reportedly failed to file financial statements for the previous reporting period including Form 10-K and 10-Q.
According to Alternative Liquidity Capital on August 21, 2022, the company announced an offer to purchase up to 130,000 shares in StHealth Capital Investment Corp at a price of $0.10 per share. (Alternative Liquidity Capital is a Delaware Limited Partnership and is not affiliated with STHealth.)
According to Alternative Liquidity Capital, citing STHealth’s most recent 10-K filing in September 2021, the company had $2.6 million in gross assets, and with its only debt — accounts payables and accrued expenses– $2.2 million in net assets. Shares of the BDC were originally sold for $10 per share.
BDCs, similar to non-traded REITs (Real Estate Investment Trusts), pool investor money and use those funds as capital to invest in various businesses. The goal of a BDC is to invest in small and medium-sized businesses and help sustain and develop growth in those underlying businesses. When those businesses are profitable, the BDC can be a strong investment. Additionally, certain BDCs offer a desirable tax structure for investors.
However, “middle-market loans” are basically highly leveraged loans to private equity backed companies and come with a large credit risk. When rising interest rates and inflation lead to a recessionary event BDCs, such as STHealth Capital Investment Corp., may take a big hit.
To learn more about the investigation, please see: StHealth Capital Investment Corp., Investigating Claims
FINRA Lawsuits to Recover Investment Losses
The White Law Group continues to investigate potential claims against the broker dealers that sold high risk BDC investments such as StHealth Capital Investment Corp to investors. The high commission structure of these products leads to the possibility that unscrupulous financial advisors will push these products unsuitably to maximize their own commissions.
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Recommendations should be appropriate in light of the investor’s age, risk tolerance, net worth, and investment experience. Broker dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses in a FINRA arbitration claim.
If you have suffered losses in StHealth Capital Investment Corp. and would like to speak to a securities attorney about the potential to recover your investment losses, please call The White Law Group at 1-888-637-5510 for a free consultation.
For more information on the firm’s investigation, please see: Business Development Companies BDCs – the good, the bad, and…
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and
Seattle, Washington. To learn more about The White Law Group visit www.whitesecuritieslaw.com.
Tags: First Capital investment corp., secondary sales price, StHealth Capital Investment Corp BDC, StHealth Capital Investment Corp Complaints, StHealth Capital Investment Corp Investigation, StHealth Capital Investment Corp Lawsuit, StHealth Capital Investment Corp liquidation, StHealth Capital Investment Corp Losses, tender offer Last modified: November 10, 2022