**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**


x
            
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934****For
                the quarterly period ended June 30, 2006****or**o
            
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934**




**Form 
      10-Q**




**Commission
      File Number 000-52011**




**Conihasset
      Capital Partners, Inc.**


*(Exact
      name of the registrant as specified in its charter)*


**Delaware**
            
            **94-3346760***(State
                or other jurisdiction of*
              *incorporation
                or organization)*
            
            *(I.R.S.
                Employer*
              *Identification
                No.)***21
                Custom House Street**
              **9th Floor**
              **Boston,
                Massachusetts**
              *(Address
                of principal executive offices)*
            
            **02108**
              *(Zip
                Code)*




**Registrant’s
      telephone number, including area code:**


**(617) 320-8347**




Indicate by check mark whether the registrant (1) has filed all reports
      required to be filed by Section 13 or 15(d) of the Securities Exchange Act
      of 1934 during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past
      90 days.




Yes o No x




Indicate by check mark whether the registrant is a large accelerated filer,
      an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
      (Check one):




Large accelerated
              filer      o
            Accelerated filer   o
            Non-accelerated
              filer      x




Indicate by check mark whether the registrant is a shell company (as defined
      in
      Rule 12b-2 of the Exchange Act).




Yes o No x




There were 65,020 shares of the registrant’s common stock, $0.001 par
      value, outstanding as of August 28, 2006.





**Conihasset
      Capital Partners, Inc.**


**(A
      Delaware Corporation)**


**Index**


**Part I.
                  Financial Information**Item 1.
              
              Financial
                  Statements
              
              
              2Statement
                  of Assets and LiabilitiesAs
                  of June 30, 2006
              
              
              2Statements
                  of OperationsFor
                  the three months ended June 30, 2006 and the period from Inception(March
                  1, 2006) to June 30, 2006
              
              
              3
 Schedule
                    of InvestmentsJune 30,
                    2006
                
                
                4
 Statement
                      of Changes in Net AssetsFor
                      the three months ended June 30, 2006 and the period from Inception
                    (March
                      1, 2006) to June 30, 2006
                  
                  
                  5
 Statement
                  of Cash FlowsFor
                  the three months ended June 30, 2006 and the period from Inception
                (March
                  1, 2006) to June 30, 2006
              
              
              6
 Notes
                  to Financial Statements
              
              
              7Item 2.
              
              Management’s
                  Discussion and Analysis of Financial Condition and Resultsof
                  Operations
              
              
              13Item 3.
              
              Quantitative
                  and Qualitative Disclosures about Market Risk
              
              
              16Item 4.
              
              Controls
                  and Procedures
              
              
              16**Part II.
                  Other Information**Item 1.
              
              Legal
                  Proceedings
              
              
              17Item 1A.
              
              Risk
                  Factors
              
              
              17Item 2.
              
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              
              27Item 3.
              
              Defaults
                  Upon Senior Securities
              
              
              27Item 4.
              
              Submissions
                  of Matters to a Vote of Security Holders
              
              
              27Item 5.
              
              Other
                  Information
              
              
              27Item 6.
              
              Exhibits
              
              
              27SIGNATURES
              
              
              28




1


**Item
      1.**  **Financial
      Statements.**




CONIHASSET
      CAPITAL PARTNERS, INC.


(a
      development stage company)





Statement
      of Assets and Liabilities


June
      30 ,
      2006


(unaudited)




**Assets**Cash
                and cash equivalents
            
            $
            7,839Interest
                receivable from controlled investment
            
            
            1,160Investments
            
            
            95,100Investment
                in controlled investment
            
            
            5,000Total
                Assets
            
            $
            109,099**Liabilities
                and deficiency in net assets**Accrued
                organizational costs
            
            $
            40,000Accrued
                offering costs
            
            
            167,510Due
                to stockholder
            
            
            2,500Total
                Liabilities
            
            
            210,010**Deficiency
                in net assets**Preferred
                stock, par value $0.001:1,000,000
                shares authorized;no
                shares issued and outstanding
            
            
            -Common
                stock, par value $0.001 per share:10,000,000
                shares authorized, 30,020 sharesissued
                and outstanding
            
            
            30Deficit
                accumulated during development stage
            
            
            (100,941
            )Total
                deficiency in net assets
            
            
            (100,911
            )Total
                liabilities and deficiency in net assets
            
            $
            109,099Deficiency
                in net asset value per share
            
            $
            (3.36
            )




See
      accompanying notes to financial statements.


2


CONIHASSET
      CAPITAL PARTNERS, INC.


(a
      development stage company)





Statement
      of Operations


(unaudited)





For
                the three months ended
              June
                30, 2006
            
            For
                the period from inception (March 1, 2006) to June 30, 2006Investment
                incomeInterest
                from controlled investment
            
            $
            1,160
            
            $
            1,160Costs
                and expensesOrganization
                expenses
            
            
            6,483
            
            
            40,000**Decrease
                in net assets from operations**
            
            $
            (5,323
            )
            $
            (38,840
            )Decrease
                in net assets from operations attributable tocommon
                stockholders, per share
            
            $
            (0.18
            )
            $
            (1.70
            )Weighted
                average shares of common stock outstanding, basic and
                diluted
            
            
            30,020
            
            
            22,888




See
      accompanying notes to financial statements.


3


CONIHASSET
      CAPITAL PARTNERS, INC.


(a
      development stage company)





Schedule
      of Investments





As
      of
      June 30, 2006


(unaudited)





Company
            
            Industry
            
            Investments
            
            Cost
            
            Fair
                Value**Controlled
                Investments**Conihasset
                Management, Inc.
            
            Investment
            
            100%
                equity interest
            
            $5,000
            
            $5,000Conihasset
                Management, Inc.
            
            Investment
            
            Notes
                receivable, 4.83%, due 3/30/09
            
            $95,100
            
            $95,100




See
      accompanying notes to financial statements.


4


CONIHASSET
      CAPITAL PARTNERS, INC.


(a
      development stage company)





Statement
      of Changes in Net Assets


(unaudited)





For
                the three months ended
              June
                30, 2006
            
            For
                the period from inception (March 1, 2006) to June 30, 2006OPERATIONSDecrease
                in net assets from operations
            
            $
            (5,323
            )
            $
            (38,840
            )STOCKHOLDER’S
                ACTIVITY:Issuance
                of common stock for cash
            
            
            -
            
            
            150,100Offering
                costs incurred
            
            
            (187,688
            )
            
            (212,171
            )Decrease
                in net assets from stockholder’s activity
            
            
            (187,688
            )
            
            (62,071
            )NET
                DECREASE IN NET ASSETS
            
            
            (193,011
            )
            
            (100,911
            )NET
                ASSETS(DEFICIENCY):Beginning
                of period
            
            
            92,100
            
            
            -End
                of period
            
            $
            (100,911
            )
            $
            (100,911
            )




See
      accompanying notes to financial statements.


5


CONIHASSET
      CAPITAL PARTNERS, INC.


(a
      development stage company)





Statement
      of Cash Flows


(unaudited)




For
                the three months ended
              June
                30, 2006
            
            For
                the period from inception (March 1, 2006) to June 30, 2006**Cash
                flow from operating activities:**Decrease
                in net assets resulting from operations
            
            $
            (5,323
            )
            $
            (38,840
            )Adjustments
                to reconcile decrease in net assets resulting from
                operationsto
                net cash used by operating activities -Investment
                in controlled investment
            
            
            -
            
            
            (5,000
            )Investment
                in notes receivable (from controlled investment)
            
            
            (100
            )
            
            (95,100
            )Interest
                receivable from controlled investment
            
            
            (1,160
            )
            
            (1,160
            )Net
                cash used by operating activities
            
            
            (6,583
            )
            
            (140,100
            )**Cash
                flow from financing activities:**Proceeds
                from the issuance of common stock
            
            
            -
            
            
            150,100Proceeds
                from stockholder’s loan
            
            
            2,500
            
            
            2,500Accrued
                organizational costs
            
            
            6,483
            
            
            40,000Offering
                costs
            
            
            (44,661
            )
            
            (44,661
            )Net
                cash (used by) provided by financing activities
            
            
            (35,678
            )
            
            147,939Net
                increase (decrease) in cash and cash equivalents
            
            
            (42,261
            )
            
            7,839Cash
                and cash equivalents at beginning of period
            
            
            50,100
            
            
            -Cash
                and cash equivalents at end of period
            
            $
            7,839
            
            $
            7,839SUPPLEMENTAL
                CASH FLOW INFORMATIONCash
                paid for interest
            
            $
            -
            
            $
            -Cash
                paid for income taxes
            
            $
            -
            
            $
            -NON-CASH
                INVESTING AND FINANCING ACTIVITIES




During
                the three month period ended June 30, 2006 and the period from inception
                (March 1, 2006) through June 30, 2006, the Company accrued organizational
                and offerings costs totaling $149,510 and $207,510,
                respectively.





See
      accompanying notes to financial statements.


6


CONIHASSET
      CAPITAL PARTNERS, INC.





Notes
      to
      Financial Statements


(unaudited)





1.
      ORGANIZATION AND BUSINESS





Conihasset
      Capital Partners, Inc., a development stage company (“CCP” or the “Company”),
      was organized as a Delaware corporation on March 1, 2006. CCP is a newly
      organized closed-end management investment company that has filed an election
      to
      be treated as a business development company (“BDC”) under the Investment
      Company Act of 1940 (the “1940 Act”). BDCs were created by Congress under the
      Small Business Investment Act of 1980. The intent behind the legislation was
      to
      make the U.S. capital markets more easily accessible to small business. In
      addition, the legislation was enacted to provide institutional and retail
      investors with an easily accessible avenue to small business loans and
      investments which at the time was regarded as a very difficult asset class
      to
      access by such investors. BDCs differ from more widely known private equity
      partnerships in that they offer liquid investments (i.e., their securities
      can
      be bought and sold by retail investors in the public securities markets) that
      are required to publicly disclose on a quarterly basis the value of each of
      their loans and investments.





CCP
      was
      organized to create a varied portfolio that will include both mezzanine
      investments in and senior secured loans to small U.S. companies, among other
      types of investments, in a broad variety of industries. CCP intends to
      concentrate on making investments in companies having annual revenues of less
      than $100 million. In most cases, these companies will be privately held or
      will
      have thinly traded public equity securities. The Company will generally seek
      to
      target companies that generate positive cash flows in industries which its
      investment professionals have direct expertise, though it may invest in other
      industries if it is presented with attractive opportunities.





The
      Company intends to invest approximately $500 thousand to $3.0 million of
      capital, on average, in the securities of U.S. small companies.  Upon
      completion of an offering for sale to the public of up to 1,000,000 shares
      of
      common stock, $0.001 par value at $5.00 per share (the “Offering”), the Company
      intends to immediately begin implementing its investment strategy.  Until
      such time as all of the net proceeds from the Offering are invested pursuant
      to
      the Company's investment strategy, the Company intends to invest any uninvested
      funds in temporary investments, such as cash, cash equivalents, U.S. government
      securities and other high quality debt investments that mature in one year
      or
      less from the date of its investment. As the Company begins to implement its
      investment strategy, a significant portion of its portfolio will consist of
      mezzanine investments and other asset classes. Additionally, the Company may
      acquire investments in the secondary market and, in analyzing such investments,
      will employ the same analytical process as it uses for the investments it
      acquires directly from issuers.





2.
      SIGNIFICANT ACCOUNTING POLICIES




Interim
      Financial Information





The
      accompanying statement of assets and liabilities and schedule of investments
      as
      of June 30, 2006, the statements of operations and cash flows, and the statement
      of changes in net assets for the period from inception (March 1, 2006) through June 30, 2006 are unaudited. The unaudited
      interim financial statements have been prepared in accordance with U.S.
      generally accepted accounting principles for the interim financial information
      and, therefore, do not include all the information and footnotes required by
      U.S. generally accepted accounting principles for complete financial statements.
      In the opinion of the Company's management, the unaudited interim financial
      statements include all adjustments consisting of normal recurring adjustments
      and accruals necessary for the fair presentation of the Company's financial
      position, results of operations and its cash flows for the three months ended
      June 30, 2006 and for the period from inception (March 1, 2006) through June
      30,
      2006.





***Investments***





In
      accordance with specific rules for BDCs, subsidiaries hold investments on behalf
      of the Company or provide substantial services to the Company. Portfolio
      investments are held for purposes of deriving investment income and future
      capital gains. The financial results of portfolio investments are not
      consolidated in the Company’s financial statements. At June 30, 2006, the
      Company had one portfolio investment, Conihasset Management, Inc.
      (“CMI”).




7




The
      Company holds notes receivable totaling $95,100 from CMI as an investment,
      bearing interest at 4.83% per annum and is due March 30, 2009, and also holds
      an
      equity investment in CMI valued at $5,000.





Summarized
      financial information of CMI is as follows:





Balance
      Sheet


June
      30,
      2006


(unaudited)





Investment,
                at cost
            
            $
            100,100Total
                assets
            
            
            100,100Notes
                payable to parent company
            
            
            95,100Interest
                payable to parent company
            
            
            1,160Total
                liabilities
            
            
            96,260Common
                stock
            
            
            5,000Retained
                earnings
            
            
            (1,160
            )Total
                stockholder’s equity
            
            
            3,840Total
                liabilities and stockholder's equity
            
            $
            100,100





Statement
      of Operations


For
      the
      period from inception (March 1, 2006) through June 30, 2006





Interest
                Expense
            
            $
            1,160Net
                Loss from Operations
            
            $
            (1,160
            )




***Use
      of Estimates in Preparation of Financial Statements***





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amount of assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      income and expenses during the reported period. The Company evaluates all of
      its
      estimates on an on-going basis. Actual results could differ from these
      estimates.





***Cash
      and Cash Equivalents***





Cash
      and
      cash equivalents consist of cash and investments with original maturities to
      the
      Company of three months or less. Cash is invested at high quality financial
      institutions.





***Fair
      Value of Financial Instruments***





The
      fair
      value of financial instruments is the amount for which the instrument could
      be
      exchanged in a current transaction between willing parties. As of June 30,
      2006,
      the carrying values of cash and cash equivalents and accrued expenses
      approximated their respective fair values because of the short duration of
      these
      instruments.





***Valuation
      of Investments***





Unrestricted
      securities that are publicly traded are valued at the closing price on the
      valuation date. Debt and equity securities of companies that are not publicly
      traded, or for which the Company has various degrees of trading restrictions
      are
      carried at fair value, as determined in good faith by the Company’s Board of
      Directors. In determining fair value, the Company prepares an analysis
      consisting of traditional valuation methodologies to estimate the enterprise
      value of the portfolio company issuing the securities. The methodologies consist
      of valuation estimates based on: valuations of comparable public companies,
      recent sales of comparable companies, discounting the forecasted cash flows
      of
      the portfolio company, the liquidation or collateral value of the portfolio
      company’s assets, third party valuations of the portfolio company, third party
      sale offers, potential strategic buyer analysis and the value of recent
      investments in the equity securities of the portfolio company. The Company
      will
      weight some or all of the above valuation methods in order to conclude on its
      estimate of value. In valuing convertible debt, equity or other securities,
      the
      Company values its equity investment based on its pro rata share of the residual
      equity value available after deducting all outstanding debt from the estimated
      enterprise value. The Company values non-convertible debt securities at cost
      plus amortized original issue discount (“OID”) to the extent that the estimated
      enterprise value of the portfolio company exceeds the outstanding debt of the
      portfolio company. If the estimated enterprise value is less than the
      outstanding debt of the company, the Company will reduce the value of its debt
      investment beginning with the junior most debt such that the enterprise value
      less the value of the outstanding debt is zero. If there is sufficient
      enterprise value to cover the face amount of a debt security that has been
      discounted due to detachable equity warrants received with that security, that
      detachable equity warrant will be valued such that the sum of the discounted
      debt security and the detachable equity warrant equal the face value of the
      debt
      security. For CMBS (collateralized mortgage-backed securities) and CDO (collateralized
      debt obligations) securities, the Company prepares a fair value analysis which is based on a
      discounted cash flow model that utilizes prepayment and loss assumptions based
      on historical experience and projected performance, economic factors, the
      characteristics of the underlying cash flow, and comparable yields for similar
      securities, when available.




8




Due
      to
      the uncertainty inherent in the valuation process, estimates of fair value
      may
      differ significantly from the values that would have been used had a ready
      market for the securities existed, and the differences could be material.
      Additionally, changes in the market environment and other events that may occur
      over the life of the investments may cause the gains or losses ultimately
      realized on these investments to be different from the valuations currently
      assigned. As of June 30, 2006, the percentage of the Company’s investments that
      were not publicly traded or for which the Company has various degrees of trading
      restrictions, and thus in which the fair value was determined in good faith
      by
      the Company’s Board of Directors, was 100%.





***Loss
      Per Common Share***





Basic
      loss per common share is computed by dividing net loss allocable to common
      stockholders by the weighted average number of common shares outstanding for
      the
      period. Diluted net loss per share reflects the dilution from the potential
      conversion or exercise into common stock of securities such as warrants. In
      all
      financial statements presented, diluted net loss per common share is the same
      as
      basic net loss per common share. No additional shares of common stock for the
      potential dilution from the conversion or exercise of securities into common
      stock are included in the denominator, since the result would be anti-dilutive.
      There were no anti-dilutive instruments in the three months ended June 30,
      2006
      and in the period of inception (March 1, 2006) though June 30,
      2006.





***Stock
      Based Compensation***





Effective
      on the Company’s date of inception (March 1, 2006), the Company adopted the fair
      value recognition provisions of SPAS No. 123R. On June 1, 2006 the Company
      adopted a stock based compensation plan. Prior to such date the Company did
      not
      have any issuances of or outstanding stock based compensation.





In
      March
      2005, the SEC issued SAB 107 providing supplemental implementation guidance
      for
      SFAS 123R. The Company will apply the provisions of SAB 107 in its adoption
      of
      SFAS 123R. As a result of adopting the fair value method for stock compensation,
      all future stock options and restricted stock awards will be expensed over
      the
      award vesting period. For stock-based awards granted on or after January 1,
      2006, the Company will record stock-based compensation expense on a
      straight-line basis over the requisite service period.





SFAS
      123R
      requires the use of a valuation model and the Company has elected to utilize
      the
      Black-Scholes option pricing model to estimate the fair value of
      options.





The
      Company accounts for options issued to non-employees (other than directors)
      under SFAS 123 and Emerging Issues Task Force Issue (“EITF”) No. 96-18,
“Accounting for Equity Instruments that are issued to Other Than Employees for
      Acquiring, or in Conjunction with Selling, Goods, or Services.” Therefore, the
      fair value of options issued to non-employees as calculated, using the
      Black-Scholes pricing formula is recorded as an expense and periodically
      remeasured over the vesting terms. Options issued to non-employees and employees
      are issued using the same methodology and assumptions. There were no options
      issued by the Company to non-employees since inception.




9




The
      Company did not have any stock-based compensation for the three months ended
      June 30, 2006 or for the period from inception (March 1, 2006) through June
      30,
      2006.





***Concentration
      of Credit Risk***





The
      Company believes it is not exposed to any significant credit risk with cash
      and
      cash equivalents. The Company maintains its cash with a high credit quality
      financial institution. Each account is secured by the Federal Deposit Insurance
      Corporation up to $100,000.





***Federal
      Income Taxes***




For
      U.S.
      federal income tax purposes, the Company is taxed as an ordinary corporation
      under Subchapter C of the Internal Revenue Code (the “Code”).





However,
      the Company intends to operate, as soon as practicable after it qualifies to
      be
      so taxed, as a regulated investment company, or RIC, under the Code and, as
      such, would not be subject to federal income tax on the portion of its taxable
      income and gains distributed to stockholders. To qualify as a RIC, the Company
      is required to distribute at least 90% of its investment company taxable income,
      as defined by the Code. At this time the Company cannot determine when it will
      be able to qualify as a RIC. Because federal income tax regulations differ
      from
      accounting principles generally accepted in the United States, distributions
      in
      accordance with tax regulations may differ from net investment income and
      realized gains recognized for financial reporting purposes. Differences may
      be
      permanent or temporary. Permanent differences are reclassified among capital
      accounts in the financial statement to reflect their tax character. Temporary
      differences arise when certain items of income, expense, gain or loss are
      recognized at some time in the future. Differences in classification may also
      result from the treatment of short-term gains as ordinary income for tax
      purposes.





The
      Company utilizes the asset and liability method of accounting for deferred
      income taxes. Under this method, deferred tax assets and liabilities are
      established based on the differences between financial statement and income
      tax
      bases of assets and liabilities using enacted tax rates in effect for the year
      in which the differences are expected to reverse. The Company provides a
      valuation allowance against deferred tax assets if, based on the weight of
      available evidence, it is more likely than not that some or all of the deferred
      tax assets will not be realized. The Company has generated a decrease in net
      assets resulting from operations of $5,323 for the three months ended June
      30,
      2006 and of $38,840 for the period of inception (March 1, 2006) through June
      30,
      2006 of its taxable year which would ordinarily create a Federal and state
      net
      operating loss to be carried forward to utilize against future taxable income.
      If the Company elects to qualify as an RIC will lose the benefit of the net
      operating loss deduction. Therefore, no deferred tax asset or valuation
      allowance will be recorded for the net operating loss.





***Organization
      and offering costs***





Offering
      costs incurred in connection with the Company’s ongoing exempt offering are
      charged against additional paid-in capital. The excess amount of offering costs,
      after reducing additional paid-in capital to zero, was charged against deficit
      accumulated during development stage. Organization expenses are nonrecurring
      and
      include costs of organizing the Company and are charged to expense as
      incurred.





3.
      LIQUIDITY AND CAPITAL RESOURCES




The
      Company currently has minimal revenue from investments and in all likelihood
      will be required to make future expenditures in connection with its marketing
      efforts along with general administrative expenses.




The
      Company’s stockholder has committed to fund any shortfalls in the Company’s cash
      flow on a day to day basis during the period that the Company is in the
      development stage and is in the process of undertaking an Offering to raise
      additional capital through the exempt sale of its equity securities. Management
      believes that the commitment to fund any shortfalls in the Company’s cash flow
      for the period detailed above provide the opportunity for the Company to
      continue as a going concern.




10




If
      the
      additional financing or arrangements cannot be obtained, the Company would
      be
      materially and adversely affected and there would be substantial doubt about
      the
      Company's ability to continue as a going concern. The financial statements
      do
      not include any adjustments relating to the recoverability and realization
      of
      assets and classifications of liabilities necessary if the Company becomes
      unable to continue as a going concern.





4.
      INVESTMENT CLASSIFICATION





As
      required by the 1940 Act, the Company classifies its investments by level of
      control. “Control Investments” are investments in those companies that the
      Company is deemed to “Control.” Generally, under the 1940 Act, the Company is
      deemed to control a company in which it has invested if it owns more than 25%
      of
      the voting securities of such company or has greater than 50% representation
      on
      its board of directors. “Affiliate Investments” are investments in those
      companies that are “Affiliated Companies” of the Company, as defined in the 1940
      Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are
      those that are neither Control Investments nor Affiliate Investments. The
      Company is deemed to be an affiliate of a company in which it has invested
      if it
      owns 5% or more of the voting securities of such company.





5.
      RELATED PARTY TRANSACTIONS





On
      June
      2, 2006, the Company received an open account, non-interest bearing advance
      from
      its stockholder totaling $2,500.





The
      Company issued 30,020 shares of common stock (100% of its outstanding common
      stock as of June 30, 2006) at $5 per share to Conihasset Partners, LLC, an
      entity controlled by the Company’s President and Chief Executive Officer and
      Chief Operating Officer and Executive Vice President (See Note 2 for other
      related party transactions).





6.
      FINANCIAL HIGHTLIGHTS




For
                the three months ended
              June
                30, 2006
            
            For
                the period from inception (March 1, 2006) through June 30,
                2006(unaudited)
            
            (unaudited)Selected
                per share dataNet
                asset value, beginning of period
            
            $
            3.07
            
            $
            0Issuance
                of common stock
            
            
            0
            
            
            5.00Offering
                costs
            
            
            (6.26
            )
            
            (7.07
            )Decrease
                in net assets resulting from operations
            
            
            (0.17
            )
            
            (1.29
            )Deficiency
                in net asset value, end of period
            
            $
            (3.36
            )
            $
            (3.36
            )




11






Ratios
                and supplemental dataDeficiency
                in net assets, end of period
            
            $
            (100,911
            )
            $
            (100,911
            )Average
                net assets, annualized
            
            $
            (73,621
            )
            $
            (57,536
            )Total
                operating expenses/average net assets, annualized
            
            
            n/a
                (1
            )
            
            n/a
                (1
            )Net
                investment loss/average net assets
            
            
            n/a
                (1
            )
            
            n/a
                (1
            )




(1)
      The
      Company had negative average net assets for the period from inception (March
      1,
      2006) through June 30, 2006.




7.
      SUBSEQUENT EVENTS




On
      August
      4, 2006, the Company filed a notification on Form 1-E of its intent to commence
      a best efforts offering of its common stock for sale to the public of up to
      1,000,000 shares of common stock, $0.001 par value, at $5.00 per share under
      Regulation E of the Securities Act of 1933.




On
      August
      17, 2006 the Offering became effective upon the expiration of the statutorily
      mandated waiting period of 10 business days.




On
      August
      25, 2006 the Company sold 35,000 shares of its common stock at $5.00 per share
      to six investors as part of and in accordance with the terms of it’s Offering.
      The Company received the full benefit of this sale as no commission was paid
      to
      any broker-dealer or finder as is allowed under the terms of the
      Offering.




On
      August
      28, 2006, the Company purchased a Promissory Note (the “Note”) in the amount of
      $150,000 from MRO Integrated Solutions, LLC a Shrewsbury, Massachusetts
      purchaser and distributor of consumable maintenance and repair parts serving
      hospitals, pharmaceutical companies, HMO’s etc. Upon purchase of this Note the
      Company realized a structuring fee of 6% of the gross proceeds of the Note.
      The
      Note carries interest at a rate of 5% per annum, payable
      quarterly.


12


**Item
      2. Management’s Discussion and Analysis of Financial Condition and Results of
      Operations.**





All
      statements contained herein, other than historical facts, may constitute
“forward-looking statements.” These statements may relate to, among other
      things, future events or the Company’s future performance or financial
      condition. In some cases, you can identify forward-looking statements by
      terminology such as “may,” “might,” “believe,” “will,” “provided,” “anticipate,”
“future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,”
“if,” “seek,” “possible,” “potential,” “likely” or the negative of such terms or
      comparable terminology. These forward-looking statements involve known and
      unknown risks, uncertainties and other factors that may cause the Company’s
      actual results, levels of activity, performance or achievements to be materially
      different from any future results, levels of activity, performance or
      achievements expressed or implied by such forward-looking statements. Such
      factors include, among others: (1) the future operating results as the
      Company has a limited operating history; (2) the impact of the investments
      that the Company makes and the ability of these investments to achieve their
      objectives; (3) the Company’s contractual relationships with third parties;
      (4) the adequacy of the Company’s cash resources and working capital;
      (5) the Company’s ability to obtain future financing, if at all; and
      (6) those factors listed under the caption “Risk Factors” in Item 1A of
      this Form 10-Q. The Company cautions readers not to place undue reliance on
      any
      such forward-looking statements, which speak only as of the date made. The
      Company undertakes no obligation to publicly update or revise any
      forward-looking statements, whether as a result of new information, future
      events or otherwise, after the date of this Form 10-Q.





*The
      following analysis of the Company’s financial condition and results of
      operations should be read in conjunction with the financial statements and
      the
      notes thereto contained elsewhere in this report.*





**General**




Conihasset
      Capital Partners, Inc. (the “Company”) is a newly organized, internally managed,
      closed-end management investment company that has elected to be regulated as
      a
      business development company (“BDC”) under the Investment Company Act of 1940,
      as amended (the “1940 Act”). The Company was incorporated on March 1, 2006 under
      the laws of the State of Delaware. The Company currently has one wholly-owned
      portfolio company, Conihasset Management, Inc. ("CMI"). As a BDC, the Company
      will be required to comply with certain regulatory requirements. For example,
      to
      the extent provided by the 1940 Act, the Company is limited in its ability
      to
      invest in a private company in which certain of its affiliates already has
      an
      investment. Also, while the Company is permitted to finance investments using
      debt, its ability to use debt will be limited in certain significant respects,
      most notably that it maintain a 200% asset coverage position. The Company has
      not decided whether, and to what extent, it will finance investments using
      debt.





The
      Company has recently commenced operations. The Company is subject to all of
      the
      business risks and uncertainties associated with any new business, including
      the
      risk that it will not achieve its investment objective and that the value of
      its
      investments could decline substantially. The Company filed a notification on
      Form 1-E of its intent to commence a best efforts offering of its common stock
      under Regulation E of the Securities Act of 1933 (the “1933 Act”) (the
“Offering”). As the Company had not yet commenced the Offering, there were no
      offer or sales as of June 30, 2006.




The
      Company’s primary business goals are to increase its taxable income, net
      operating income and net asset value by investing in senior debt, subordinated
      debt and equity of publicly and privately held companies with attractive current
      yields and potential for equity appreciation and realized gains.





The
      Company intends to create a varied portfolio that will include mezzanine and
      senior secured loans, among other investments, by investing approximately $500
      thousand to $3.0 million of capital, on average, in the securities of U.S.
      small
      companies. Structurally, the loan portion of a mezzanine investment usually
      ranks subordinate in priority of payment to senior debt, such as senior bank
      debt, and is often unsecured. However, mezzanine loans rank senior to common
      and
      preferred equity in a borrowers' capital structure. Typically, mezzanine
      investments have elements of both debt and equity instruments, offering the
      fixed returns in the form of interest payments associated with senior debt,
      while providing lenders an opportunity to participate in the capital
      appreciation of a borrower, if any, through an equity interest. This equity
      interest typically takes the form of warrants. Due to a higher risk profile
      and
      often less restrictive covenants as compared to senior loans, mezzanine loans
      generally earn a higher return than senior secured loans. The warrants
      associated with mezzanine investments are typically detachable, which allows
      lenders to receive repayment of their principal on an agreed amortization
      schedule while retaining their equity interest in the borrower. Mezzanine
      investments also may include a “put” feature, which permits the holder to sell
      its equity interest back to the borrower at a price determined through an agreed
      formula.




13




Upon
      completion of the Offering, the Company intends to immediately begin
      implementing its investment strategy.  Until such time as all of the net
      proceeds from the Offering are invested pursuant to the Company's investment
      strategy, the Company intends to invest any uninvested funds in temporary
      investments, such as cash, cash equivalents, U.S. government securities and
      other high quality debt investments that mature in one year or less from the
      date of its investment. As the Company begins to implement its investment
      strategy, a significant portion of its portfolio will consist of mezzanine
      investments and other asset classes. While the Company’s primary focus will be
      to generate current income through debt and equity investments in U.S. small
      companies, the Company intends to also invest in other types of investments
      for
      the purpose of diversifying its overall portfolio, improving its liquidity
      or
      enhancing returns to stockholders. The Company intends to use this portion
      of
      its portfolio to implement investment strategies that may include investing
      in
      relatively higher yielding asset-backed securities, securities backed by pools
      of non-investment grade senior secured loans, investment grade bonds, or other
      collateral (collateralized debt obligations or “CDOs”). The Company may also
      invest, consistent with the requirements of the 1940 Act for BDCs, in other
      types of securities including high-yield bonds, distressed debt, real estate
      related assets, private equity or securities of public companies that are not
      thinly traded. Additionally, the Company may acquire investments in the
      secondary market and, in analyzing such investments, it will employ the same
      analytical process as it uses for the investments it acquires directly from
      issuers.




The
      Company was organized to create a varied portfolio that will include both
      mezzanine investments in and senior secured loans to small U.S. companies,
      among
      other types of investments, in a broad variety of industries. CCP intends to
      concentrate on making investments in companies having annual revenues of less
      than $100 million. In most cases, these companies will be privately held or
      will
      have thinly traded public equity securities. The Company will generally seek
      to
      target companies that generate positive cash flows in industries which its
      investment professionals have direct expertise, though it may invest in other
      industries if it is presented with attractive opportunities.




In
      an
      effort to increase returns and the number of loans made, the Company may in
      the
      future seek to securitize a portion of its loans. To securitize loans, the
      Company could contribute a pool of loans to a wholly-owned subsidiary and sell
      investment-grade fixed income securities issued by such subsidiary to investors
      willing to accept a lower interest rate to invest in investment-grade loan
      pools. The Company’s retained interest in the subsidiary would consequently be
      subject to first loss on the loans in the pool. The Company may use the proceeds
      of such sales to pay down bank debt, to fund additional investments or for
      other
      corporate purposes.




**Current
      Investments**




The
      Company holds two notes receivable totaling $95,100, each bearing interest
      at
      4.83% per annum and due March 30, 2009, from its wholly owned portfolio company,
      Conihasset Management, Inc. (“CMI”), as an investment. **** CMI
      used
      the proceeds of the notes to purchase its interest in one portfolio company,
      MRO
      Investment LLC (“MRO Investment”). MRO Investment is a newly formed limited
      liability company that was formed for the sole purpose of jointly forming,
      with
      Turbine Controls, Inc. (“TCI”), MRO Industries, LLC (“MRO Industries” or the
“JV”). The JV was created to service the fragmented and rapidly growing field of
      commercial and military manufacture and re-manufacture of turbine-based ground
      support equipment currently in use by all branches of the U.S. military and
      foreign governments, as well as commercial aviation manufacturers. TCI, of
      Bloomfield, CT currently supplies re-manufactured and original equipment
      manufacturer whole turbines and assemblies as well as parts to virtually every
      major defense contractor, the U.S. Department of Defense (“DoD”), commercial
      aviation manufacturers and suppliers as well as foreign governments seeking
      to
      acquire fixed base and portable turbine based power generation units. TCI
      currently holds all of the quality assurance certifications, including ISO-9001,
      and is DoD and Federal Aviation Administration approved and is also
      certified as an approved aerospace parts and component supplier. In addition,
      TCI qualifies as a small business for government contracting purposes. MRO
      Industries is 60% owned by MRO Investment and 40% owned by TCI and/or their
      designees.




14


**RESULTS
      OF OPERATIONS**





*For
      the three months ended June 30, 2006*





**Investment
      Income**





The
      Company has recently commenced investment operations and as of June 30, 2006
      has
      only one portfolio investment. For the three month period ended June 30,
      2006 its investment income was $1,160, which consisted of interest income
      accrued but not paid from notes in the amount of $95,100 from its wholly owned
      portfolio company CMI due on March 30, 2009 that carry interest at the rate
      of
      4.83% per annum.





**Operating
      Expenses**





Operating
      expenses for the three months ended June 30, 2006 were $6,483 and were incurred
      primarily for legal and accounting expenses.





**Net
      Decrease in Net Assets from Operations**





The
      net
      decrease in net assets from operations was $5,323 (decrease attributable to
      stockholders, $0.18). The weighted average shares outstanding used in the
      computation of loss per share for the three month period ending June 30, 2006
      were 30,020. For the three months ended June 30, 2006 the Company incurred
      $187,688 in legal and accounting fees relating to its public Offering. These
      costs have been deferred and will be paid from the proceeds of the
      Offering.





*For
      the period of Inception (March 1, 2006) to June 30, 2006*





**Investment
      Income**





The
      Company has recently commenced investment operations and as of June 30, 2006
      has
      only one portfolio investment. For the period of Inception (March 1, 2006)
      to
      June 30, 2006 its investment income was $1,160, which consisted of interest
      income accrued but not paid from notes in the amount of $95,100 from its wholly
      owned portfolio company CMI due on March 30, 2009 that carry interest at the
      rate of 4.83% per annum.





**Operating
      Expenses**





Operating
      expenses for the period of Inception (March 1, 2006) to June 30, 2006 were
      $40,000 and were incurred primarily for legal and accounting expenses in
      connection with the formation of the Company.





**Net
      Decrease in Net Assets from Operations**





The
      net
      decrease in net assets from operations was $38,840 (decrease attributable to
      stockholders, $1.70). The weighted average shares outstanding used in the
      computation of loss per share for the period of Inception (March 1, 2006) to
      June 30, 2006 were 22,888. For the period since inception the Company incurred
      $212,171 in legal and accounting fees relating to its public Offering. These
      costs have been deferred and will be paid from the proceeds of the
      Offering.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company commenced operations on March 31, 2006 and has one investment.
      Investment income earned for the period from inception through June 30, 2006
      was
      $1,160. The Company’s primary focus during this period was in the preparation of
      its filings to become a publicly traded company as well as the preparation
      of
      its public offering documentation with the Securities and Exchange Commission.
      During this period the Company’s cash flow decreased by the amount of the
      offering costs paid and incurred in the preparation of these
      filings.





The
      Company currently has minimal revenue from operations and in all likelihood
      will
      be required to make future expenditures in connection with its marketing efforts
      along with general administrative expenses. The Company’s stockholder has
      committed to fund any shortfalls in the Company’s cash flow on a day to day
      basis during the period that the Company is in the development stage and is
      in
      the process of undertaking an Offering to raise additional capital through
      the
      exempt sale of its equity securities. As of June 30, 2006, there were no offers
      or sales under the Offering. Management believes that the commitment to fund
      any
      shortfalls in the Company’s cash flow for the period detailed above provide the
      opportunity for the Company to continue as a going concern.




15




If
      the
      additional financing or arrangements cannot be obtained, the Company would
      be
      materially and adversely affected and there would be substantial doubt about
      the
      Company's ability to continue as a going concern. The financial statements
      do
      not include any adjustments relating to the recoverability and realization
      of
      assets and classifications of liabilities necessary if the Company becomes
      unable to continue as a going concern.




**RECENT
      DEVELOPMENTS**




On
      August
      4, 2006, the Company filed a notification on Form 1-E of its intent to commence
      a best efforts offering of its common stock for sale to the public of up to
      1,000,000 shares of common stock, $0.001 par value, at $5.00 per share under
      Regulation E of the Securities Act of 1933.




On
      August
      17, 2006 the Offering became effective upon the expiration of the statutorily
      mandated waiting period of 10 business days.




On
      August
      25, 2006 the Company sold 35,000 shares of its common stock at $5.00 per share
      to six investors as part of and in accordance with the terms of it’s Offering.
      The Company received the full benefit of this sale as no commission was paid
      to
      any broker-dealer or finder as is allowed under the terms of the
      Offering.




On
      August
      28, 2006, the Company purchased a Promissory Note (the “Note”) in the amount of
      $150,000 from MRO Integrated Solutions, LLC a Shrewsbury, Massachusetts
      purchaser and distributor of consumable maintenance and repair parts serving
      hospitals, pharmaceutical companies, HMO’s etc. Upon purchase of this Note the
      Company realized a structuring fee of 6% of the gross proceeds of the Note.
      The
      Note carries interest at a rate of 5% per annum, payable quarterly.





**Item
      3. Quantitative and Qualitative Disclosures about Market
      Risk.**




The
      Company intends to invest in small companies, and its investments in these
      companies are considered speculative in nature. The Company’s investments will
      often include securities that are subject to legal or contractual restrictions
      on resale that adversely affect the liquidity and marketability of such
      securities. As a result, the Company is subject to risk of loss which may
      prevent its shareholders from achieving price appreciation, dividend
      distributions and return of capital. The key risks the Company faces is market
      risk and equity risk.




The
      Company considers the principal types of market risk to be fluctuations in
      interest rates. The Company considers the management of risk essential to
      conducting its businesses. Accordingly, the Company’s risk management systems
      and procedures are designed to identify and analyze risks, to set appropriate
      policies and limits and to continually monitor these risks and limits by means
      of reliable administrative and information systems and other policies and
      programs.




Equity
      risk arises from exposure to securities that represent an ownership interest
      in
      the Company’s portfolio companies. The value of the Company’s equity securities
      and other investments are based on quoted market prices or the Board of
      Directors’ good faith determination of their fair value (which is based, in
      part, on quoted market prices). Market prices of common equity securities,
      in
      general, are subject to fluctuations, which could cause the amount to be
      realized upon sale or exercise of the instruments to differ significantly from
      the current reported value. The fluctuations may result from perceived changes
      in the underlying economic characteristics of its portfolio companies, the
      relative price of alternative investments, general market conditions and supply
      and demand imbalances for a particular security.




**Item 4.
      Controls and Procedures.**





(a)
            As
                of the end of the period covered by this quarterly report on Form 
                10-Q, the chief executive officer (the “CEO”) and the chief financial
                officer (the “CFO”) conducted an evaluation of the Company’s disclosure
                controls and procedures (as defined in Rules  13a-15 and 15d-15 of
                the Securities Exchange Act of 1934, as amended). Based upon this
                evaluation, the Company’s CEO and CFO concluded that its disclosure
                controls and procedures are effective in timely alerting them of
                any
                material information relating to the Company that is required to
                be
                disclosed by the Company in the reports it files or submits under
                the
                Securities Exchange Act of
                1934.




16





(b)
            There
                have been no changes in the Company’s internal control over financial
                reporting that occurred during the quarter ended June 30, 2006, that
                have
                materially affected, or are reasonably likely to materially affect,
                its
                internal control over financial
                reporting.




**Part II.
      Other Information**





**Item
      1. Legal Proceedings.**





The
      Company is not currently subject to any material legal proceeding, nor, to
      its
      knowledge, is any material legal proceeding threatened against the Company.





**Item
      1A. Risk Factors.**




Investing
      in the Company’s common stock involves a number of significant risks. The
      Company cannot assure you that it will achieve its investment objective. You
      should consider carefully the risks described below and all other information
      contained in this filing.




***The
      Company has a limited operating history.***




The
      Company was incorporated on March 1, 2006 and has only recently commenced
      operations. As a result, the Company has limited financial information on which
      you can evaluate an investment in the Company. The Company is subject to all
      of
      the business risks and uncertainties associated with any new business, including
      the risks that it will not achieve its investment objective and that the value
      of your investment could decline substantially.




***The
      Company is dependent upon its key investment personnel for its future
      success.***




The
      Company depends on the diligence, skill and network of business contacts of
      the
      investment professionals it employs for the sourcing, evaluation, negotiation,
      structuring and monitoring of its investments. The Company’s future success will
      also depend, to a significant extent, on the continued service and coordination
      of its senior management team, particularly, Richard
      D. Bailey, its President and Chief Executive Officer and Andrew J. Cahill,
      Chief
      Operating Officer and Executive Vice President, currently the only two employees
      of the Company. If either of these individuals, or
      any
      other member of its senior management team leaves the Company, it could have
      a
      material adverse effect on its ability to achieve its investment
      objective.




***There
      is no assurance that the Company will sell all of the shares in the
      Offering.***





The
      Offering is a “best efforts” offering with no required minimum amount to be
      raised and there is no escrow. This means that even if very few of the shares
      offered under the Offering are sold, the Company will not refund any payments
      made by investors for the shares of common stock. The Company cannot assure
      you
      that all of the shares of common stock offered for sale by the Company will
      be
      sold.




***The
      Company’s management team has no experience managing a
      BDC.***




The
      1940
      Act imposes numerous constraints on the operations of BDCs. For example, BDCs
      are required to invest at least 70% of their total assets primarily in
      securities of “eligible portfolio companies” (as defined under the 1940 Act),
      cash, cash equivalents, U.S. government securities and other high quality
      debt investments that mature in one year or less. The Company’s management
      team’s 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 its investment objective. Furthermore,
      any failure to comply with the requirements imposed on BDCs by the 1940 Act
      could cause the SEC to bring an enforcement action against the Company. If
      the
      Company do not remain a BDC, it might be regulated as a closed-end investment
      company under the 1940 Act, which would further decrease its operating
      flexibility.




17




***The
      Company’s business model depends to a significant extent upon strong referral
      relationships with private equity sponsors, and its inability to maintain or
      develop these relationships, or the failure of these relationships to generate
      investment opportunities, could adversely affect its
      business.***




The
      Company expects that members of its management team will maintain their
      relationships with private equity sponsors, and it will rely to a significant
      extent upon these relationships to provide the Company with potential investment
      opportunities. If the Company’s management team fails to maintain its existing
      relationships or develop new relationships with other sponsors or sources of
      investment opportunities, it will not be able to grow its investment portfolio.
      In addition, individuals with whom members of the Company’s management team have relationships
      are not obligated to provide the Company with investment opportunities, and,
      therefore, there is no assurance that such relationships will generate
      investment opportunities for the Company.




***The
      Company operates in a highly competitive market for investment
      opportunities.***




The
      Company competes for investments with other BDCs and other investment funds
      (including private equity funds and mezzanine funds), as well as traditional
      financial services companies such as commercial banks and other sources of
      funding. Many of the Company’s competitors are substantially larger and have
      considerably greater financial, technical and marketing resources than it does.
      For example, some competitors may have a lower cost of funds and access to
      funding sources that are not available to the Company. In addition, some of
      the
      Company’s competitors may have higher risk tolerances or different risk
      assessments. These characteristics could allow the Company’s competitors to
      consider a wider variety of investments, establish more relationships, and
      offer
      better pricing and more flexible structuring than the Company is able to
      consider, establish, or offer. The Company may lose investment opportunities
      if
      it does not match its competitors’ pricing, terms and structure. If the Company
      is forced to match its competitors’ pricing, terms and structure, it may not be
      able to achieve acceptable returns on its investments or it may bear substantial
      risk of capital loss. Furthermore, many of the Company’s competitors have
      greater experience operating under, or are not subject to, the regulatory
      restrictions that the 1940 Act imposes on it as a BDC.




The
      Company cannot assure you that the competitive pressures it faces will not
      have
      a material adverse effect on its business, financial condition and results
      of
      operations. Also, as a result of this competition, the Company may not be able
      to take advantage of attractive investment opportunities from time to time,
      and
      it cannot assure you that it will continue to be able to identify and make
      investments that are consistent with its investment objective.




***Regulations
      governing the Company’s operation as a BDC will affect its ability to, and the
      way in which it, raises additional capital.***




The
      Company’s business will require capital. It may acquire additional capital from
      the following sources:




*Senior
      Securities and Other Indebtedness.* The
      Company may issue debt securities or preferred stock and/or borrow money from
      banks or other financial institutions, which it refers to collectively as senior
      securities, up to the maximum amount permitted by the 1940 Act. If the Company
      issues senior securities, including debt or preferred stock, it will be exposed
      to additional risks, including the following:




·
            Under
                the provisions of the 1940 Act, the Company will be permitted, as
                a BDC,
                to issue senior securities only in amounts such that its asset coverage,
                as defined in the 1940 Act, equals at least 200% after each issuance
                of
                senior securities. If the value of the Company’s assets declines, it may
                be unable to satisfy this test. If that happens, the Company may
                be
                required to sell a portion of its investments and, depending on the
                nature
                of its leverage, repay a portion of its debt at a time when such
                sales
                and/or repayments may be
                disadvantageous.




·
            Any
                amounts that the Company uses to service its debt or make payments
                on
                preferred stock will not be available for dividends to its common
                stockholders.




·
            It
                is likely that any senior securities or other indebtedness the Company
                issues will be governed by an indenture or other instrument containing
                covenants restricting its operating flexibility. Additionally, some
                of
                these securities or other indebtedness may be rated by rating agencies,
                and in obtaining a rating for such securities and other indebtedness,
                the
                Company may be required to abide by operating and investment guidelines
                that further restrict operating and financial
                flexibility.




18




·
            The
                Company and, indirectly, its stockholders will bear the cost of issuing
                and servicing such securities and other
                indebtedness.




·
            Preferred
                stock or any convertible or exchangeable securities that the Company
                issues in the future may have rights, preferences and privileges
                more
                favorable than those of its common stock, including separate voting
                rights
                and could delay or prevent a transaction or a change in control to
                the
                detriment of the holders of its common
                stock.




*Additional
      Common Stock.* The
      Company is not generally able to issue and sell its common stock at a price
      below net asset value per share. The Company may, however, sell its common
      stock, warrants, options or rights to acquire its common stock, at a price
      below
      the current net asset value of the common stock if its board of directors
      determines that such sale is in its best interests and that of its stockholders,
      and its stockholders approve such sale. In any such case, the price at which
      its
      securities are to be issued and sold may not be less than a price, which, in
      the
      determination of its board of directors, closely approximates the market value
      of such securities (less any distributing commission or discount). The Company
      may also make rights offerings to its stockholders at prices per share less
      than
      the net asset value per share, subject to applicable requirements of the 1940
      Act. If the Company raises additional funds by issuing more common stock or
      senior securities convertible into, or exchangeable for, its common stock,
      the
      percentage ownership of its stockholders at that time would decrease and they
      may experience dilution. Moreover, the Company can offer no assurance that
      it
      will be able to issue and sell additional equity securities in the future,
      on
      favorable terms or at all.




*Securitization
      of Loans.* In
      addition to issuing securities to raise capital, the Company plans to securitize
      its loans to generate cash for funding new investments. To securitize loans,
      the
      Company will typically create a wholly-owned subsidiary and contribute a pool
      of
      loans to the subsidiary. This would generally include the sale of interests
      in
      the subsidiary on a non-recourse basis to purchasers who are willing to accept
      a
      lower interest rate to invest in investment grade loan pools. The Company will
      also retain a portion of the equity in the securitized pool of loans. An
      inability to successfully securitize its loan portfolio could limit its ability
      to grow its business, fully execute its business strategy and adversely affect
      its earnings, if any. Moreover, the securitization of the Company’s loan
      portfolio might increase its exposure to risk for losses, as the residual loans
      in which it does not sell interests will tend to be those that are riskier
      and
      more apt to generate losses.




***The
      Company will remain subject to corporate-level income tax if the Company is
      unable to qualify as a RIC under Subchapter M of the
      Code.***




Although
      the Company intends to qualify as a RIC under Subchapter M of the Code, it
      is
      currently subject
      to tax as an ordinary corporation under Subchapter C of the Code, and no
      assurance can be given that it will be able to qualify and maintain any RIC
      status if elected. To
      obtain
      and maintain RIC tax treatment under the Code, the Company must meet the
      following annual distribution, income source and asset diversification
      requirements.




·
            The
                annual distribution requirement for a RIC will be satisfied if the
                Company
                distributes to its stockholders on an annual basis at least 90% of
                its net
                ordinary income and realized net short-term capital gains in excess
                of
                realized net long-term capital losses, if any. Because the Company
                uses
                debt financing, the Company is subject to certain asset coverage
                ratio
                requirements under the 1940 Act and financial covenants under loan
                and
                credit agreements that could, under certain circumstances, restrict
                the
                Company from making distributions necessary to satisfy the distribution
                requirement. If the Company is unable to obtain cash from other sources,
                it could fail to qualify for RIC tax treatment and thus become subject
                to
                corporate-level income tax.




·
            The
                income source requirement will be satisfied if the Company obtains
                at
                least 90% of its income for each year from dividends, interest, gains
                from
                the sale of stock or securities or similar
                sources.




·
            The
                asset diversification requirement will be satisfied if the Company
                meets
                certain asset diversification requirements at the end of each quarter
                of
                its taxable year. Failure to meet those requirements may result in
                its
                having to dispose of certain investments quickly in order to prevent
                the
                loss of RIC status. Because most of its investments will be in private
                companies, and therefore will be relatively illiquid, any such
                dispositions could be made at disadvantageous prices and could result
                in
                substantial losses.




If
      the
      Company fails to qualify for RIC tax treatment for any reason and remain subject
      to corporate income tax, the resulting corporate taxes could substantially
      reduce its net assets, the amount of income available for distribution, and
      the
      amount of its distributions.




19




***The
      Company may have difficulty paying its required distributions if it recognizes
      income before or without receiving cash representing such
      income.***




For
      federal income tax purposes, the Company will include in income certain amounts
      that it has not yet received in cash, such as original issue discount, which
      may
      arise if it receives warrants in connection with the origination of a loan
      or
      possibly in other circumstances, or contractual payment-in-kind interest, which
      represents contractual interest added to the loan balance and due at the end
      of
      the loan term. Such original issue discount or increases in loan balances as
      a
      result of contractual payment-in-kind arrangements will be included in income
      before the Company receives any corresponding cash payments. The Company also
      may be required to include in income certain other amounts that it will not
      receive in cash.




Since,
      in
      certain cases, the Company may recognize income before or without receiving
      cash
      representing such income, it may have difficulty meeting the annual distribution
      requirement necessary to obtain and maintain RIC tax treatment under the Code.
      Accordingly, the Company may have to sell some of its investments at times
      and/or at prices it would not consider advantageous, raise additional debt
      or
      equity capital or reduce new investment originations for this purpose. If the
      Company is not able to obtain cash from other sources, it may fail to qualify
      for RIC tax treatment and thus remain (or become) subject to corporate-level
      income tax.




***Because
      the Company intends to distribute substantially all of its income to its
      stockholders upon its election to be treated as a RIC, it will continue to
      need
      additional capital to finance its growth. If additional funds are unavailable
      or
      not available on favorable terms, its ability to grow will be
      impaired.***




In
      order
      to satisfy the requirements applicable to a RIC and to avoid payment of excise
      taxes, the Company intends to distribute to its stockholders substantially
      all
      of its net ordinary income and net capital gain income. As a BDC, the Company
      generally is required to meet a coverage ratio of total assets to total senior
      securities, which includes all of its borrowings and any preferred stock it
      may
      issue in the future, of at least 200%. This requirement limits the amount that
      the Company may borrow. Because the Company will continue to need capital to
      grow its investment portfolio, this limitation 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, it cannot assure
      you
      that debt and equity financing will be available to the Company on favorable
      terms, or at all. In addition, as a BDC, the Company generally is not permitted
      to issue equity securities priced below net asset value without stockholder
      approval. If additional funds are not available to the Company, it could be
      forced to curtail or cease new investment activities, and its net asset value
      could decline.




***The
      Company may borrow money, which will magnify the potential for gain or loss
      on
      amounts invested and may increase the risk of investing in the
      Company.***




Borrowings,
      also known as leverage, magnify the potential for gain or loss on amounts
      invested and, therefore, increase the risks associated with investing in the
      Company. The Company may borrow from and issue senior debt securities to banks
      and other lenders. Holders of these senior securities will have fixed dollar
      claims on its assets that are superior to the claims of its common stockholders.
      If the value of the Company’s assets increases, then leveraging would cause the
      net asset value attributable to its common stock to increase more sharply than
      it would have had it not leveraged. Conversely, if the value of the Company’s
      assets decreases, leveraging would cause net asset value to decline more sharply
      than it otherwise would have had it not leveraged. Similarly, any increase
      in
      the Company’s income in excess of interest payable on the borrowed funds would
      cause its net income to increase more than it would without the leverage, while
      any decrease in its income would cause net income to decline more sharply than
      it would have had it not borrowed. Such a decline could negatively affect the
      Company’s ability to make common stock dividend payments. Leverage is generally
      considered a speculative investment technique.




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




Because
      the Company may borrow to fund its investments, a portion of its income is
      dependent upon the difference between the interest rate at which it borrows
      funds and the interest rate at which it invests these funds. A portion of its
      investments will have fixed interest rates, while a portion of its borrowings
      will likely have floating interest rates. As a result, a significant change
      in
      market interest rates could have a material adverse effect on its net investment
      income. In periods of rising interest rates, the Company’s cost of funds could
      increase, which would reduce its net investment income. The Company may hedge
      against interest rate fluctuations by using standard hedging instruments such
      as
      futures, options and forward contracts, subject to applicable legal
      requirements, including without limitation, all necessary registrations (or
      exemptions from registration) with the Commodity Futures Trading Commission.
      These activities may limit its 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 its business, financial condition and results of
      operations. Also, the Company has limited experience in entering into hedging
      transactions, and it will initially have to rely on outside parties with respect
      to the use of such financial instruments or develop such expertise
      internally.




20




***A
      significant portion of the Company’s investment portfolio will be recorded at
      fair value as determined in good faith by its board of directors and, as a
      result, there will be uncertainty as to the value of its portfolio
      investments.***




Under
      the
      1940 Act, the Company is required to carry its portfolio investments at market
      value or, if there is no readily available market value, at fair value as
      determined by its board of directors. The Company is not permitted to maintain
      a
      general reserve for anticipated losses. Instead, the Company is required by
      the
      1940 Act to specifically value each individual investment and record an
      unrealized loss for any asset it believes has decreased in value. Typically
      there will not be a public market for the securities of the privately-held
      companies in which the Company will generally invest. As a result, the Company
      will value its investments in privately-held companies on a quarterly basis
      based on a determination of their fair value made in good faith and in
      accordance with the written guidelines established by its board of directors.
      The types of factors that may be considered in fair value pricing its
      investments include 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 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, its determinations of fair value may differ materially from the
      values that would have been used if a ready market for these securities existed.
      The Company’s net asset value could be adversely affected if its determinations
      regarding the fair value of its investments were materially higher than the
      values that it ultimately realize upon the disposal of such
      securities.




***The
      lack of liquidity in the Company’s investments may adversely affect its
      business.***




The
      Company will generally make investments in private companies. Substantially
      all
      of these securities are subject to legal and other restrictions on resale or
      are
      otherwise less liquid than publicly traded securities. The illiquidity of its
      investments may make it difficult for the Company to sell such investments
      if
      the need arises. In addition, if the Company is required to liquidate all or
      a
      portion of its portfolio quickly, it may realize significantly less than the
      value at which it had previously recorded its investments. The Company may
      also
      face other restrictions on its ability to liquidate an investment in a portfolio
      company to the extent that the Company has material non-public information
      regarding such portfolio company.




***The
      Company’s quarterly and annual results could fluctuate
      significantly.***





The
      Company’s quarterly and annual operating results could fluctuate significantly
      due to a number of factors. These factors include the small number and range
      of
      values of the transactions that are completed each quarter, fluctuations in
      the
      values of the Company’s investments, the timing of the recognition of unrealized
      gains and losses, the degree to which the Company encounters competition in
      its
      markets, the volatility of the stock market and its impact on its unrealized
      gains and losses, as well as other general economic conditions. As a result
      of
      these factors, quarterly and annual results are not necessarily indicative
      of
      its performance in future quarters and years.




***The
      Company’s financial condition and results of operations will depend on its
      ability to manage growth effectively.***




The
      Company’s ability to achieve its investment objective will depend on its ability
      to grow, which will depend, in turn, on its management team’s ability to
      identify, evaluate and monitor, and its ability to finance and invest in,
      companies that meet its investment criteria.




Accomplishing
      this result on a cost-effective basis will be largely a function of the
      Company’s management team’s handling of the investment process and its ability
      to provide competent, attentive and efficient services, as well as its access
      to
      financing on acceptable terms. In addition to monitoring the performance of
      its
      existing investments, members of its management team and its investment
      professionals may also be called upon to provide managerial assistance to its
      portfolio companies. These demands on their time may distract them or slow
      the
      rate of investment. In order to grow, the Company will need to hire, train,
      supervise and manage new employees. However, the Company cannot assure you
      that
      any such employees will contribute to the success of its business. Any failure
      to manage its future growth effectively could have a material adverse effect
      on
      its business, financial condition, and results of operations.




21




***The
      Company’s ability to enter into transactions with its affiliates will be
      restricted.***




The
      Company is prohibited under the 1940 Act from knowingly participating in certain
      transactions with its affiliates without the prior approval of its independent
      directors. Any person that owns, directly or indirectly, 5% or more of its
      outstanding voting securities will be its affiliate for purposes of the 1940
      Act
      and the Company will generally be prohibited from buying or selling any security
      from or to such affiliate, absent the prior approval of its independent
      directors. The 1940 Act also prohibits “joint” transactions with an affiliate,
      which could include investments in the same portfolio company (whether at the
      same or different times), without prior approval of the Company’s independent
      directors. If a person acquires more than 25% of the Company’s voting
      securities, it will be prohibited from buying or selling any security from
      or to
      such person, or entering into joint transactions with such person, absent the
      prior approval of the SEC.




***Changes
      in laws or regulations governing the Company’s operations may adversely affect
      its business.***




The
      Company and its portfolio companies are subject to local, state and federal
      laws
      and regulations. These laws and regulations, as well as their interpretation,
      may be changed from time to time. Accordingly, any change in these laws or
      regulations could have a material adverse affect on its business.




***The
      Company’s board of directors may change its operating policies and strategies
      without prior notice or stockholder approval, the effects of which may be
      adverse.***




The
      Company’s board of directors has the authority to modify or waive its current
      operating policies and strategies without prior notice and without stockholder
      approval. The Company cannot predict the effect any changes to its current
      operating policies and strategies would have on its business, operating results
      and value of its stock. However, the effects might be adverse, which could
      negatively impact its ability to pay you dividends and cause you to lose all
      or
      part of your investment.




***The
      Company’s investments in portfolio companies may be risky, and it could lose all
      or part of its investment.***




Investing
      in small companies involves a number of significant risks. Among other things,
      these companies:




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




·
            may
                have shorter operating histories, narrower product lines and smaller
                market shares than larger businesses, which tend to render them more
                vulnerable to competitors’ actions and 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 its 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, its executive officers
                and directors may, in the ordinary course of business, be named as
                defendants in litigation arising from its investments in the portfolio
                companies; and




·
            generally
                have less publicly available information about their businesses,
                operations and financial condition. The Company is required to rely
                on the
                ability of its management team and investment professionals to obtain
                adequate information to evaluate the potential returns from investing
                in
                these companies. If the Company is unable to uncover all material
                information about these companies, it may not make a fully informed
                investment decision, and may lose all or part of its
                investment.




22




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




The
      Company will invest primarily in senior secured loans, junior secured loans
      and
      subordinated debt issued by small companies. 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 it 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 the Company is entitled to receive payments with respect
      to
      the debt instruments in which it invests. Also, in the event of insolvency,
      liquidation, dissolution, reorganization or bankruptcy of a portfolio company,
      holders of debt instruments ranking senior to the Company’s investment in that
      portfolio company would typically be entitled to receive payment in full before
      it receives any distribution. After repaying such senior creditors, such
      portfolio company may not have any remaining assets to use for repaying its
      obligation to the Company. In the case of debt ranking equally with debt
      instruments in which the Company invests, it 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.




***There
      may be circumstances where the Company’s debt investments could be subordinated
      to claims of other creditors or the Company could be subject to lender liability
      claims.***




Even
      though the Company may have structured certain of its investments as senior
      loans, if one of its portfolio companies were to go bankrupt, depending on
      the
      facts and circumstances, including the extent to which it actually provided
      managerial assistance to that portfolio company, a bankruptcy court might
      recharacterize its debt investment and subordinate all or a portion of its
      claim
      to that of other creditors. The Company may also be subject to lender liability
      claims for actions taken by the Company with respect to a borrower’s business or
      instances where it exercises control over the borrower. It is possible that
      the
      Company could become subject to a lender’s liability claim, including as a
      result of actions taken in rendering significant managerial
      assistance.




***The
      Company may not control any of its portfolio
      companies.***




The
      Company may not control any of its portfolio companies, even though it may
      have
      board representation or board observation rights and its debt agreements may
      contain certain restrictive covenants. As a result, the Company is subject
      to
      the risk that a portfolio company in which it invests may make business
      decisions with which it disagreea 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 its interests as debt investors.




***Economic
      recessions or downturns could impair the Company’s portfolio companies and harm
      its operating results.***




Many
      of
      the Company’s portfolio companies may be susceptible to economic slowdowns or
      recessions and may be unable to repay its debt investments during these periods.
      Therefore, the Company’s non-performing assets are likely to increase and the
      value of its portfolio is likely to decrease during these periods. Adverse
      economic conditions
      also may decrease the value of collateral securing some of its debt investments
      and the value of its equity investments. Economic slowdowns or
      recessions could lead to financial losses in the Company’s portfolio and a
      decrease in revenues, net income and assets. Unfavorable economic conditions
      also could increase the Company’s funding costs, limit its access to the capital
      markets or result in a decision by lenders not to extend credit to the Company.
      These events could prevent the Company from increasing investments and harm
      its
      operating results.




***Defaults
      by the Company’s portfolio companies will harm its operating
      results.***




A
      portfolio company’s failure to satisfy financial or operating covenants imposed
      by the 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 the portfolio
      company’s ability to meet its obligations under the debt investments that the
      Company holds. The Company may incur expenses to the extent necessary to seek
      recovery upon default or to negotiate new terms with a defaulting portfolio
      company.




***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
      elects to prepay amounts owed to the Company. Additionally, prepayments could
      negatively impact its return on equity, which could result in a decline in
      the
      market price of its common stock.




23




***The
      Company may not realize gains from its equity
      investments.***




Certain
      investments that the Company will make in the future may include warrants or
      other equity securities. In addition, the Company may from time to time make
      non-control, equity co-investments in companies in conjunction with private
      equity sponsors. The Company’s goal is ultimately to realize gains upon its
      disposition of such equity interests. However, the equity interests the Company
      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.
      The
      Company 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
      a
      public offering, which would allow the Company to sell the underlying equity
      interests.




***If
      the Company’s primary investments are deemed not to be qualifying assets, it
      could be precluded from investing in the manner described in this Registration
      Statement or deemed to be in violation of the 1940
      Act.***




In
      order
      to comply with the 1940 Act requirements for BDCs, the Company must not acquire
      any assets other than “qualifying assets” unless, at the time of and after
      giving effect to such acquisition, at least 70% of its total assets are
      qualifying assets. If the Company acquires equity securities from an issuer
      that
      has outstanding marginable securities at the time it makes an investment, these
      acquired assets cannot be treated as qualifying assets. This result is dictated
      by the definition of “eligible portfolio company” under the 1940 Act, which in
      part looks to whether a company has outstanding marginable securities.




Amendments
      promulgated in 1998 by the Federal Reserve expanded the definition of a
      marginable security under the Federal Reserve’s margin rules to include any
      non-equity security. Thus, any debt securities issued by any entity are
      marginable securities under the Federal Reserve’s current margin rules. As a
      result, the staff of the SEC has raised the question to the BDC industry as
      to
      whether a private company that has outstanding debt securities would qualify
      as
      an “eligible portfolio company” under the 1940 Act.




The
      SEC
      has issued proposed rules to correct the unintended consequence of the Federal
      Reserve’s 1998 margin rule amendments of apparently limiting the investment
      opportunities of BDCs. In general, the SEC’s proposed rules would define an
      eligible portfolio company as any company that does not have securities listed
      on a national securities exchange or association. The Company does not believe
      that these proposed rules will have a material adverse effect on its
      operations.





Until
      the
      SEC or its staff has taken a final public position with respect to the issue
      discussed above, the Company will continue to monitor this issue closely, and
      may be required to adjust its investment focus to comply with and/or take
      advantage of any future administrative position, judicial decision or
      legislative action.




***There
      is a risk that you may not receive dividends or that the Company’s dividends may
      not grow over time.***




The
      Company intends to make distributions on a quarterly basis to its stockholders.
      The Company cannot assure you that it will achieve investment results that
      will
      allow the Company to make a specified level of cash distributions or
      year-to-year increases in cash distributions. In addition, due to the asset
      coverage test applicable to the Company as a BDC, it may be limited in its
      ability to make distributions.




***Investing
      in the Company’s shares may involve an above average degree of
      risk.***




The
      investments the Company makes in accordance with its investment objective may
      result in a higher amount of risk than alternative investment options and
      volatility or loss of principal. The Company’s investments in portfolio
      companies may be highly speculative and aggressive, and therefore, an investment
      in its shares may not be suitable for someone with lower risk tolerance.




24




***The
      Company’s current stockholder is controlled by its management.***




Conihasset
      Partners LLC (“Conihasset Partners”), an entity controlled by Messrs. Bailey and
      Cahill, owns 100% of its common stock. Messrs. Bailey and Cahill are also part
      of the management and are thus, responsible for the investment and operational
      decisions of the Company. As a result, such individuals will be able to exert
      influence over the Company’s management and policies. Such persons, either
      through Conihasset Partners or in their own name, may acquire beneficial
      ownership of additional shares of the Company’s equity securities in the future.
      This concentration of ownership may also have the effect of delaying, preventing
      or deterring a change of control of the Company, could deprive its stockholders
      of an opportunity to receive a premium for their common stock as part of a
      sale
      of its company and might ultimately affect the market price of its common
      stock.




***There
      are significant potential conflicts of interest.***




In
      the
      course of its investing activities, the Company will pay the salaries of its
      management as well as the operating expenses associated with the operation
      of
      the Company. As a result, investors in the Company’s common stock will receive
      distributions on a “net” basis after expenses, resulting in, among other things,
      a lower rate of return than one might achieve through direct investments.




Currently,
      the Company has no revenue and will not have revenue until after the Company
      has
      begun to invest the proceeds of the Offering. As a result of this arrangement,
      there may be times when the Company’s principals have interests that differ from
      those of its stockholders, giving rise to a conflict.




The
      Company’s stockholders may have conflicting investment, tax and other objectives
      with respect to their investments in the Company. The conflicting interests
      of
      individual stockholders may relate to or arise from, among other things, the
      nature of the Company’s investments, the structure or the acquisition of its
      investments, and the timing of disposition of its investments. As a consequence,
      conflicts of interest may arise in connection with decisions made by the
      Company’s principals, including with respect to the nature or structuring of its
      investments that may be more beneficial for one stockholder than for another
      stockholder, especially with respect to stockholders' individual tax situations.
      In selecting and structuring investments appropriate for the Company, it will
      consider the investment and tax objectives of its stockholders and the Company
      as a whole, not the investment, tax or other objectives of any stockholder
      individually.




***The
      market price of the Company’s common stock may fluctuate
      significantly.***




The
      market price and liquidity of the market for shares of the Company’s common
      stock may be significantly affected by numerous factors, some of which are
      beyond its control and may not be directly related to its operating performance.
      These factors include:




·
            significant
                volatility in the market price and trading volume of securities of
                BDCs or
                other companies in the Company’s sector, which are not necessarily related
                to the operating performance of these
                companies;




·
            changes
                in regulatory policies or tax guidelines, particularly with respect
                to
                RICs or BDCs;




·
            loss
                of RIC status, if obtained;




·
            changes
                in earnings or variations in operating
                results;




·
            changes
                in the value of the Company’s portfolio of
                investments;




·
            any
                shortfall in revenue or net income or any increase in losses from
                levels
                expected by investors or securities
                analysts;




·
            departure
                of the Company’s key personnel;




·
            operating
                performance of companies comparable to the
                Company;




·
            general
                economic trends and other external
                factors; and




·
            loss
                of a major funding source.




25




***The
      Company’s investments in foreign securities may involve significant risks in
      addition to the risks inherent in U.S. investments.***




The
      Company’s investment strategy contemplates that a portion of its investments may
      be in securities of foreign companies. Investing in foreign companies may expose
      the Company to additional risks not typically associated with investing in
      U.S.
      companies. These risks include changes in exchange control regulations,
      political and social instability, expropriation, imposition of foreign taxes,
      less liquid markets and less available information than is generally the case
      in
      the United States, higher transaction costs, less government supervision of
      exchanges, brokers and issuers, less developed bankruptcy laws, difficulty
      in
      enforcing contractual obligations, lack of uniform accounting and auditing
      standards and greater price volatility.




Although
      most of the Company’s investments will be denominated in U.S. dollars, the
      Company’s investments that are denominated in a foreign currency are subject to
      the risk that the value of a particular currency may change in relation to
      one
      or more other currencies. Among the factors that may affect currency values
      are
      trade balances, the level of short-term interest rates, differences in relative
      values of similar assets in different currencies, long-term opportunities for
      investment and capital appreciation, and political developments. The Company
      may
      employ hedging techniques to minimize these risks, but it can offer no assurance
      that it will, in fact, hedge currency risk or, that if it does, such strategies
      will be effective.




If
      the
      Company engages in hedging transactions, it may expose itself to risks
      associated with such transactions. The Company may utilize instruments such
      as
      forward contracts, currency options and interest rate swaps, caps, collars
      and
      floors to seek to hedge against fluctuations in the relative values of its
      portfolio positions from changes in currency exchange rates and market interest
      rates. Hedging against a decline in the values of the Company’s portfolio
      positions does not eliminate the possibility of fluctuations in the values
      of
      such positions or prevent losses if the values of such positions decline.
      However, such hedging can establish other positions designed to gain from those
      same developments, thereby offsetting the decline in the value of such portfolio
      positions. Such hedging transaction may also limit the opportunity for gain
      if
      the values of the underlying portfolio positions should increase. Moreover,
      it
      may not be possible to hedge against an exchange rate or interest rate
      fluctuation that is so generally anticipated that the Company is not able to
      enter into a hedging transaction at an acceptable price.




While
      the
      Company may enter into transactions to seek to reduce currency exchange rate
      and
      interest rate risks, unanticipated changes in currency exchange rates or
      interest rates may result in poorer overall investment performance than if
      the
      Company had not engaged in any such hedging transactions. In addition, the
      degree of correlation between price movements of the instruments used in a
      hedging strategy and price movements in the portfolio positions being hedged
      may
      vary. Moreover, for a variety of reasons, the Company may not seek to establish
      a perfect correlation between such hedging instruments and the portfolio
      holdings being hedged. Any such imperfect correlation may prevent the Company
      from achieving the intended hedge and expose the Company to risk of loss. In
      addition, it may not be possible to hedge fully or perfectly against currency
      fluctuations affecting the value of securities denominated in non-U.S.
      currencies because the value of those securities is likely to fluctuate as
      a
      result of factors not related to currency fluctuations.




***Terrorist
      attacks and other acts of violence or war may affect any market for the
      Company’s common stock, impact the businesses in which the Company invests and
      harm its operations and its profitability.***




Terrorist
      attacks may harm the Company’s results of operations and your investment. The
      Company cannot assure you that there will not be further terrorist attacks
      against the United States or United States businesses. Such attacks or armed
      conflicts in the United States or elsewhere may impact the businesses in which
      the Company invests directly or indirectly, by undermining economic conditions
      in the United States. Losses resulting from terrorist attacks are generally
      uninsurable.




***Certain
      provisions of the Company’s certificate of incorporation and bylaws as well as
      the Delaware General Corporation Law could deter takeover attempts and have
      an
      adverse impact on the price of the Company’s common
      stock.***




The
      Company’s certificate of incorporation and its bylaws as well as the Delaware
      General Corporation Law contain provisions that may have the effect of
      discouraging a third party from making an acquisition proposal for the Company.
      These anti-takeover provisions may inhibit a change in control in circumstances
      that could give the holders of its common stock the opportunity to realize
      a
      premium over the market price for its common stock.




26





**Item 2.
      Unregistered Sales of Equity Securities and Use of
      Proceeds.**




During
      the period from inception (March 1, 2006) to June 30, 2006, the Company issued
      30,020 shares of common stock (100% of its outstanding shares of common stock)
      at $5 per share to Conihasset Partners, LLC, an entity controlled by the
      Company’s President and Chief Executive Officer and Chief Operating Officer and
      Executive Vice President. The proceeds from this sale were used to make an
      equity investment in the amount of $5,000 and a loan in the amount of $95,100
      to
      the Company’s wholly owned portfolio company, CMI, as well as to fund
      organizational and offering costs.




**Item
      3. Defaults upon Senior Securities.**





Not
      applicable.





**Item
      4. Submission of Matters to a Vote of Security Holders.**





On
      June
      8, 2006, the Board unanimously approved and on July 26, 2006 the sole
      shareholder approved the stock option plan for the Company. No other matters
      were submitted to a vote of security holders during the quarter ended June
      30,
      2006.





**Item
      5. Other Information.**




Not
      applicable.





**Item 6.
      Exhibits.**




(a) *Exhibits*




3.1
            Certificate
                of Incorporation of the Company filed with the Delaware Secretary
                of State
                on March 1, 2006*3.2
            By-laws
                of the Company*10
            Stock
                Agreement between Conihasset Capital Partners, Inc. and Conihasset
                Partners, LLC*31.1
            Certification
                of the Chief Executive Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200231.2
            Certification
                of the Chief Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 200232.1
            Certification
                of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-
                Act of 200232.2
            Certification
                of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-
                Act of 2002





*  Incorporated
      herein by reference to the Registration Statement on Form 10 filed on May 19,
      2006.


27




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      caused this report to be signed by the undersigned, thereunto duly
      authorized.




CONIHASSET
                  CAPITAL PARTNERS,
                  INC.Date:
                9/1/2006
            
            /s/
                Richard D. BaileyRichard
                D. Bailey
                President
                  and Chief Executive Officer.




CONIHASSET
                    CAPITAL PARTNERS,
                    INC.Date:
                  9/1/2006
              
              /s/
                    Keith D. LoweyKeith
                    D. Lowey
                    Assistant
                      Secretary and Chief Financial
                      Officer.
 28