UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant ☒                             Filed by a Party other than the Registrant ☐

Check the appropriate box:

    Angel Oak Financial Strategies Income Term Trust

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

ANGEL OAK FINANCIAL STRATEGIES INCOME TERM TRUST

3344 Peachtree Road NE, Suite 1725

Atlanta, Georgia 30326

(404) 953-4900

A special meeting of shareholders (with any postponements or adjournments, the “Special Meeting”) of Angel Oak Financial Strategies Income Term Trust (the “Fund”), a Delaware statutory trust, is scheduled to be held at the offices of Angel Oak Capital Advisors, LLC, located at 3344 Peachtree Road NE, Suite 1725, Atlanta, Georgia 30326, on May 27, 2020, at 10:00 a.m. Eastern Time, to vote on each of the proposals below (the “Proposals”):

Proposal 1: To approve the issuance of additional common shares of beneficial interest of the Fund in connection with the reorganization of Vivaldi Opportunities Fund, another closed-end fund, with and into the Fund

Proposal 2: To ratify the selection of Cohen & Company, Ltd. as the Fund’s independent registered public accounting firm for the fiscal year ending January 31, 2021

The Proposals are each described in more detail in the enclosed Proxy Statement. We encourage you to review this information carefully.

After careful consideration, the Board of Trustees of the Fund recommends that you vote “FOR” each of the Proposals.

The enclosed materials explain each of the Proposals in more detail, and you are encouraged to review them carefully. Although you are welcome to attend the Special Meeting in person, most shareholders find it more convenient to vote their shares by proxy. As a shareholder, your vote is important, and we hope that you will respond today to ensure that your shares will be represented at the Special Meeting. You may vote using one of the methods below by following the instructions on your proxy card:

If you do not vote using one of these methods, you may be contacted by Okapi Partners LLC, a proxy solicitor, to vote your shares over the phone.

The Fund is sensitive to the health and travel concerns the Fund’s shareholders may have and the protocols that federal, state and local governments may impose. Due to the difficulties arising from the coronavirus known as COVID-19, the date, time, location or means of conducting the Special Meeting may change. In the event of such a change, the Fund will announce alternative arrangements for the Special Meeting as promptly as practicable, which may include holding the Special Meeting by means of remote communication, among other steps, but the Fund may not deliver additional soliciting materials to shareholders or otherwise amend the Fund’s proxy materials. The Fund plans to announce these changes, if any, at angeloakcapital.com/fins and encourages you to check this website prior to the Special Meeting if you plan to attend.

As always, we appreciate your support.

Sincerely,

/s/ Dory S. Black

Dory S. Black, Esq.

President, Angel Oak Financial Strategies Income Term Trust

ANGEL OAK FINANCIAL STRATEGIES INCOME TERM TRUST

3344 Peachtree Road NE, Suite 1725

Atlanta, Georgia 30326

(404) 953-4900

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 27, 2020

Notice is hereby given that a special meeting of shareholders (with any postponements or adjournments, the “Special Meeting”) of Angel Oak Financial Strategies Income Term Trust (the “Fund”), a Delaware statutory trust, is scheduled to be held at the offices of Angel Oak Capital Advisors, LLC, located at 3344 Peachtree Road NE, Suite 1725, Atlanta, Georgia 30326, on May 27, 2020, at 10:00 a.m. Eastern Time, to vote on each of the proposals below (the “Proposals”).

Proposal 1: To approve the issuance of additional common shares of beneficial interest of the Fund in connection with the reorganization of Vivaldi Opportunities Fund, another closed-end fund, with and into the Fund

Proposal 2: To ratify the selection of Cohen & Company, Ltd. as the Fund’s independent registered public accounting firm for the fiscal year ending January 31, 2021

Shareholders of record as of the close of business on April 6, 2020, the record date (the “Record Date”), are entitled to notice of, and to vote at, the Special Meeting.

Whether or not you are planning to attend the Special Meeting, please vote prior to 11:59 p.m. Eastern Time on May 26, 2020. Voting is quick and easy. Voting by proxy will not prevent you from voting your shares in person at the Special Meeting. If you hold shares through a broker, bank or other nominee, you must follow the instructions you receive from your nominee in order to revoke your voting instructions. You may revoke your proxy by (1) giving written notice of the revocation to the Secretary of the Fund stating that the proxy is revoked; (2) a subsequent proxy executed by such shareholder; or (3) attending the Special Meeting and voting in person.

The Fund is sensitive to the health and travel concerns the Fund’s shareholders may have and the protocols that federal, state and local governments may impose. Due to the difficulties arising from the coronavirus known as COVID-19, the date, time, location or means of conducting the Special Meeting may change. In the event of such a change, the Fund will announce alternative arrangements for the Special Meeting as promptly as practicable, which may include holding the Special Meeting by means of remote communication, among other steps, but the Fund may not deliver additional soliciting materials to shareholders or otherwise amend the Fund’s proxy materials. The Fund plans to announce these changes, if any, at angeloakcapital.com/fins and encourages you to check this website prior to the Special Meeting if you plan to attend.

By order of the Board of Trustees,

/s/ Lu Chang

Lu Chang

Secretary, Angel Oak Financial Strategies Income Term Trust

Important Notice Regarding Internet Availability of Proxy Materials for the Special Meeting to be Held on May 27, 2020:

The Proxy Statement, the Notice of the Special Meeting, any accompanying materials and any amendments or supplements to the foregoing materials that are required to be furnished to shareholders are available to you on the Internet at www.okapivote.com/angeloak.

QUESTIONS & ANSWERS

The following is a summary of more complete information appearing later in the attached Proxy Statement. You should read carefully the entire Proxy Statement because it contains details that are not in the Questions and Answers.

Overview:

The Acquired Fund and the Fund (together, the “Funds”) are each a closed-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”), with different investment objectives, principal investment strategies and principal risks, among other differences. The Fund would be the accounting and performance survivor of the Reorganization. The Fund as it would exist after the Reorganization is referred to as the “Combined Fund.”

Separately, the shareholders of the Acquired Fund are being asked to approve the Agreement and Plan of Reorganization (the “Reorganization Agreement”).

With respect to Proposal 2, you are being asked to ratify the selection of Cohen & Company, Ltd as the Fund’s independent registered public accounting firm for the fiscal year ending January 31, 2021.

Proposal 1:

Moreover, the additional assets may increase the market profile of the Fund. A heightened market profile may lead to increased trading volume of the Fund’s shares, which may result in tighter bid-ask spreads and better trade execution for the Fund’s shares when purchasing or selling the Fund’s shares after the Reorganization.

The increase in net assets of the Fund following the Reorganization also may achieve certain operating and administrative efficiencies, including greater investment flexibility and investment options, greater

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diversification of portfolio investments, the ability to trade larger positions and additional sources of leverage (or more competitive leverage terms and more favorable transaction terms).

Following the consummation of the Reorganization, the total annual operating expense ratio of the Combined Fund is expected to be lower than the current total annual operating expense ratio of the Fund. The total annual operating expenses (before any fee waivers/expense limitation arrangements) for the Fund and pro forma for the Combined Fund are 2.79% and 2.51%, respectively. Pro forma combined fees and expenses are estimated in good faith and are hypothetical. There can be no assurance that future expenses will not increase or that any estimated expense savings will be realized.

In addition, Angel Oak Capital Advisors, LLC (“Angel Oak”), the investment adviser of the Fund, has contractually agreed to waive its fees and/or reimburse certain expenses (exclusive of any front-end sales loads, taxes, interest on borrowings, dividends on securities sold short, brokerage commissions, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization and extraordinary expenses) to limit the Total Annual Fund Operating Expenses of the Combined Fund to 2.50% of the Combined Fund’s average daily net assets for two years after the Reorganization.

If shareholders of the Acquired Fund approve the Reorganization Agreement and the Reorganization is completed, shareholders of the Acquired Fund will become shareholders of the Fund. Holders of shares of common stock of the Acquired Fund will receive newly issued common shares of the Fund, par value $0.001 per share, the aggregate net asset value (not the market value) of which will equal the aggregate net asset value (not the market value) of the shares of common stock of the Acquired Fund held by Acquired Fund shareholders immediately prior to the Reorganization (although shareholders will receive cash for fractional shares).

Shareholders of the Fund will remain shareholders of the Fund.

Please see “Share Price Data” in the Proxy Statement for additional information.

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As of March 31, 2020, the Acquired Fund had a net short term unrealized loss of approximately $5,098,795 (approximately $0.89 per share) and a net long term unrealized loss of $2,842,570 (approximately $0.50 per share). It is currently estimated that the Acquired Fund will distribute no capital gains to the Acquired Fund shareholders as a result of the portfolio transitioning conducted in connection with the Reorganization. The Acquired Fund did not have any capital loss carryforwards as of December 31, 2019; therefore, capital loss carryforwards will have no tax impact on portfolio transitioning conducted by the Acquired Fund in connection with the Reorganization.

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Proposal 2:

Other:

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PROXY STATEMENT

April 27, 2020

for the Special Meeting of Shareholders

to be held on May 27, 2020

ANGEL OAK FINANCIAL STRATEGIES INCOME TERM TRUST

3344 Peachtree Road NE, Suite 1725

Atlanta, Georgia 30326

(404) 953-4900

This Proxy Statement is furnished to you as a common shareholder of the Angel Oak Financial Strategies Income Term Trust (the “Fund”), a Delaware statutory trust, a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). A special meeting (with any postponements or adjournments, the “Special Meeting”) of shareholders of the Fund is scheduled to be held at the offices of Angel Oak Capital Advisors, LLC (“Angel Oak”), located at 3344 Peachtree Road NE, Suite 1725, Atlanta, Georgia 30326, on May 27, 2020, at 10:00 a.m. Eastern Time, to vote on each of the proposals below (the “Proposals”):

Proposal 1: To approve the issuance of additional common shares of beneficial interest of the Fund in connection with the reorganization of Vivaldi Opportunities Fund, another closed-end fund, with and into the Fund

Proposal 2: To ratify the selection of Cohen & Company, Ltd. as the Fund’s independent registered public accounting firm for the fiscal year ending January 31, 2021

If you are unable to attend the Special Meeting, the Board of Trustees (the “Board”) of the Fund requests that you vote your shares by completing and returning the enclosed proxy card or by recording your voting instructions by telephone or via the Internet. The approximate mailing date of this Proxy Statement and accompanying form of proxy is May 7, 2020.

Shareholders of record as of the close of business on April 6, 2020, the record date (the “Record Date”), are entitled to notice of, and to vote at, the Special Meeting.

Shareholders of the Fund are being asked to consider and vote on (i) the issuance of additional common shares of beneficial interest (“common shares”) of the Fund in connection with the reorganization of Vivaldi Opportunities Fund (the “Acquired Fund”), another closed-end management investment company registered under the 1940 Act, with and into the Fund (the “Reorganization”) and (ii) the ratification of Cohen & Company, Ltd. as the Fund’s independent registered public accounting firm for the fiscal year ending January 31, 2021. The common shares of the Fund are listed on the New York Stock Exchange (the “NYSE”) under the ticker symbol “FINS” and will continue to be so listed following the Reorganization. The shares of common stock of the Acquired Fund are listed on the NYSE under the ticker symbol “VAM.”

The Board of Trustees (“Board”) of the Fund believes that the Reorganization may benefit the Fund and its shareholders, including through potential economies of scale, improved secondary market trading and certain operating and administrative efficiencies.

After careful consideration, the Board recommends that you vote “FOR” each of the Proposals.

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The Annual Report to shareholders of the Fund for the fiscal period ended January 31, 2020, and any more recent reports for the Fund filed after the date hereof, may be obtained without charge:

The Fund is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and, in accordance therewith, file reports, proxy statements, proxy materials and other information with the Securities and Exchange Commission (“SEC”). You also may view or obtain the foregoing documents from the SEC:

This Proxy Statement sets forth concisely the information that shareholders of the Fund should know before voting on the Proposals. Please read it carefully and retain it for future reference. No person has been authorized to give any information or make any representation not contained in this Proxy Statement and, if so given or made, such information or representation must not be relied upon as having been authorized.

THE SEC HAS NOT APPROVED OR DISAPPROVED THE FUND’S SHARES TO BE ISSUED IN THE REORGANIZATION OR PASSED UPON THE ADEQUACY OF THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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PROPOSAL 1: TO APPROVE THE ISSUANCE OF ADDITIONAL COMMON SHARES OF BENEFICIAL INTEREST OF THE FUND IN CONNECTION WITH THE REORGANIZATION OF VIVALDI OPPORTUNITIES FUND, ANOTHER CLOSED-END FUND, WITH AND INTO THE FUND

General

The Board of the Fund and the Board of Directors of the Acquired Fund, including the trustees (or directors) who are not “interested persons” of the respective Fund (as defined in the 1940 Act) (the “Independent Trustees”), have approved the Agreement and Plan of Reorganization (the “Reorganization Agreement”). For purposes of this Proxy Statement, the Fund as it would exist after the Reorganization is referred to as the “Combined Fund.”

Subject to shareholder approval of the Reorganization Agreement by the shareholders of the Acquired Fund and of the issuance of Fund common shares by the shareholders of the Fund, the Reorganization Agreement provides for:

It is expected that the Reorganization will occur on or about May 29, 2020.

The aggregate net asset value (not the market value) of Fund common shares received by the shareholders of the Acquired Fund in the Reorganization would equal the aggregate net asset value (not the market value) of the Acquired Fund shares of common stock held immediately prior to the Reorganization (although shareholders will receive cash for fractional shares). The market value of the common shares of the Fund after the Reorganization may be more or less than the market value of either the shares of common stock of the Acquired Fund or the common shares of the Fund prior to the Reorganization.

It is anticipated that approximately 90% of the securities held by the Acquired Fund will be sold shortly before the closing of the Reorganization and reinvested after the closing in accordance with the investment strategies of the Fund. The transaction costs associated with these sales and purchases (including brokerage commissions, transaction charges and related fees) will be borne by the Acquired Fund or the Fund, depending on when each holding is sold. Approximately 90% of the assets being transferred from the Acquired Fund to the Fund will be cash, and the Fund will bear the transaction costs associated with investing the cash.

Background and Reasons for Proposal 1

The Board requests that, at the Special Meeting, shareholders of the Fund approve the issuance of additional common shares of the Fund in connection with the Reorganization. If the Reorganization was consummated following the market close on March 31, 2020, the Reorganization would increase the Fund’s net assets by $68,088,086, an approximate 31.61% increase in the Fund’s net assets. It is anticipated that the increased asset size of the Fund will provide opportunities for the Fund to realize greater economies of scale, which can lower annual Fund operating expenses. In addition, its larger size may increase the Fund’s market profile and provide greater secondary market liquidity for its shares, which may result in tighter bid-ask spreads and better trade execution when purchasing or selling the Fund’s shares. Additionally, with increased net assets the Fund may achieve certain operating and administrative efficiencies, including greater investment flexibility and investment options, greater diversification of portfolio investments, the ability to trade larger positions and additional sources of leverage.

Although the Fund will continue its legal existence and operations after the Reorganization, the rules of the New York Stock Exchange (on which the Fund’s common shares are listed) require the Fund’s shareholders to approve the issuance of additional common shares in connection with the Reorganization.

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The Board considered the issuance of additional common shares in connection with the Reorganization initially at an in-person meeting held on December 3-4, 2019 and at a special telephonic Board meeting held on January 21, 2020, and then approved the Reorganization Agreement and final terms of the transaction through unanimous written consent on February 6, 2020. The Board also reconfirmed its findings at a special telephonic Board meeting held on March 25, 2020. As discussed in more detail below, in connection with the Reorganization, the Board also accepted the resignation of an interested trustee and approved an expense limitation agreement through unanimous written consent on April 27, 2020.

At its special telephonic Board meeting held on January 21, 2020, the Board, including a majority of the Trustees who are not “interested persons” of the Fund as that term is defined in the 1940 Act, approved the issuance of additional common shares in connection with the Reorganization and the Reorganization Agreement. In approving the issuance of additional common shares in connection with the Reorganization and the Reorganization Agreement, the Board determined that (i) the issuance of additional common shares in connection with the Reorganization, rather than any other course of action, is in the best interest of the Fund and its shareholders; and (ii) the interests of the Fund’s shareholders will not be diluted as a result of the issuance of additional common shares in connection with the Reorganization.

In making this determination and as part of its further considerations of the Reorganization at its additional meetings and when approving the unanimous written consents, the Board considered a number of factors, including, but not limited to:

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The Board’s determination to approve the Reorganization Agreement and the issuance of common shares was made on the basis of each Trustee’s business judgment after consideration of all of the factors taken as a whole with respect to the Fund and its shareholders, although individual Trustees may have placed different weight and assigned different degrees of materiality to various factors.

Board Recommendation

The Board recommends that shareholders of the Fund vote “FOR” Proposal 1.

Vote Required for Proposal 1

Proposal 1 will require the affirmative vote of a majority of the votes cast by shareholders (i.e., for Proposal 1 to pass, the number of shares voted “FOR” must exceed the number of shares voted “AGAINST”). For additional information regarding voting requirements, see “Voting Information and Requirements.”

Information about the Reorganization

Pursuant to the Reorganization Agreement, the Acquired Fund will transfer all of its assets to the Fund and the Fund will assume all of the Acquired Fund’s accrued and unpaid liabilities and obligations in exchange solely for newly issued common shares of the Fund, which will be distributed by the Acquired Fund to its shareholders in the form of a liquidating distribution. Fund common shares issued to the Acquired Fund shareholders will have an aggregate net asset value equal to the aggregate net asset value of the Acquired Fund’s outstanding shares of common stock immediately prior to the Reorganization. Each shareholder of the Acquired Fund will receive the number of Fund common shares corresponding to his or her proportionate interest in the shares of common stock of the Acquired Fund (with cash in lieu of fractional shares). The Reorganization, together with related acts necessary to consummate the same (“Closing”), shall occur at the principal office of the Fund on or about May 29, 2020 immediately after the close of regular trading on the NYSE, or at such other place and/or on such other date as to which the parties may agree (the “Closing Date”). As soon as practicable after the Closing Date for the Reorganization, the Acquired Fund will dissolve pursuant to Maryland law.

The distribution of Fund common shares to the Acquired Fund’s shareholders will be accomplished by opening new accounts on the books of the Fund in the names of the shareholders of the Acquired Fund and transferring to those shareholder accounts Fund common shares. Each newly-opened account on the books of the Fund for the former shareholders of the Acquired Fund will represent the respective pro rata number of Fund common shares due to such shareholder.

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As a result of the Reorganization, each shareholder of the Acquired Fund will own Fund common shares that will have an aggregate net asset value immediately after the Closing Date equal to the aggregate net asset value of that shareholder’s shares of Acquired Fund common stock immediately prior to the Closing Date (with cash in lieu of fractional shares). Since the Fund common shares will be issued at net asset value in exchange for the common shares of the Acquired Fund having a value equal to the aggregate net asset value of those Fund common shares, the net asset value per share of Fund common shares should remain virtually unchanged by the Reorganization. Thus, the Reorganization will result in no dilution of the net asset value of Fund common shares or dilution of the net asset value of Acquired Fund common shares. However, as a result of the Reorganization, a shareholder of the Fund will hold a reduced percentage of ownership in the Combined Fund than he or she did in the Fund prior to the Reorganization.

TERMS OF THE REORGANIZATION AGREEMENT

The following is a summary of the significant terms of the Reorganization Agreement.

Valuation of Common Shares

The net asset value per Fund Share shall be computed as of the time at which the Acquired Fund and the Fund calculate their net asset values as set forth in their respective prospectuses (normally the close of regular trading on the New York Stock Exchange) on the Closing Date (the “Effective Time”), after the declaration and payment of any dividends and/or other distributions on that date, using the valuation procedures of the Fund adopted by the Fund’s Board of Trustees; provided, however, that such computation is consistent with the valuation procedures of the Acquired Fund and in the event of any inconsistency, the parties shall confer and mutually agree on the valuation.

All computations of value with respect to both the Acquired Fund and the Fund shall be made by U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“USBFS”), in its capacity as administrator for the Fund, in accordance with the Fund’s valuation procedures to the extent it is consistent with the valuation procedures of the Acquired Fund. In the event of any inconsistency, the parties shall confer and mutually agree on the valuation.

Calculation of Number of Fund Shares

As of the Effective Time, each share of Acquired Fund common stock outstanding immediately prior to the Effective Time shall be converted into Fund shares in an amount equal to the ratio of the net asset value per share of the Acquired Fund to the net asset value per common share of the Fund. No fractional common shares of the Fund will be distributed unless such shares are to be held in a dividend reinvestment plan account. In the event Acquired Fund shareholders would be entitled to receive fractional common shares of the Fund, the Fund’s transfer agent will aggregate such fractional shares and sell the resulting whole shares on the exchange on which such shares are listed for the account of all such Acquired Fund shareholders, and each such Acquired Fund shareholder will be entitled to a pro rata share of the proceeds from such sale. With respect to the aggregation and sale of fractional common shares of the Fund, the Fund’s transfer agent will act directly on behalf of the Acquired Fund shareholders entitled to receive fractional shares and will accumulate such fractional shares, sell the shares and distribute the cash proceeds net of brokerage commissions, if any, directly to Acquired Fund shareholders entitled to receive the fractional shares (without interest and subject to withholding taxes).

Conditions

Under the terms of the Reorganization Agreement, the Reorganization is conditioned upon, among other things, (a) approval by shareholders of the Acquired Fund of the Reorganization, pursuant to a separate proxy statement, (b) approval by shareholders of the Fund of the issuance of additional Fund common shares under Proposal 1, and (c) each Fund’s receipt of certain routine certificates and legal opinions.

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Termination

The Reorganization Agreement may be terminated by resolution of the Board of either Fund at any time prior to the Effective Time, if circumstances should develop that, in the opinion of such Board of the Fund and the Acquired Fund, make proceeding with the Reorganization inadvisable.

Expenses of the Reorganization

The expenses relating to the proposed Reorganization will be borne by Angel Oak and Vivaldi, as agreed to by those parties. Angel Oak and Vivaldi will bear expenses incurred in connection with the Reorganization, including, but not limited to, costs associated with obtaining any necessary order of exemption from the 1940 Act, preparing, printing and distributing the Proxy Statement/Prospectus and prospectus supplements of the Acquired Fund and the Fund relating to the Reorganization, proxy solicitation expenses, expenses of holding the shareholder meeting with respect to the Acquired Fund and the Fund, and winding down the operations and terminating the existence of the Acquired Fund; expenses of service providers to the Acquired Fund in consummating the Reorganization (such as those charged by the transfer agent, custodian, fund accountant or intermediaries); legal fees of counsel to each of the Acquired Fund and the Fund, including those incurred in connection with the preparation of legal opinions, and accounting fees with respect to the Reorganization and the Proxy Statement/Prospectus; all necessary taxes in connection with the delivery of all of the Acquired Fund’s assets to the Fund or otherwise incurred in connection with the Reorganization, including all applicable federal and state stock transfer stamps; and incremental fees or costs incurred by reason of the Reorganization, such as additional costs associated with the preparation and distribution of shareholder reports and other documents to the extent that they are prepared and disseminated separately for the Acquired Fund, but will not include brokerage costs or other transaction costs associated with portfolio adjustments. The expenses of the Reorganization are estimated to be $520,000. The estimated cost of retaining Okapi Partners LLC (“Okapi”), the Fund’s proxy solicitor, is approximately $16,610.

Tax Consequences of the Reorganization

Neither the Fund nor the Acquired Fund will receive an opinion as to the tax consequences of the Reorganization for the Fund, the Acquired Fund or the Acquired Fund’s shareholders. While the tax treatment of the Reorganization is not entirely clear, it is intended that the Reorganization will be treated as a taxable exchange that would not qualify as a “reorganization” under Section 368(a) of the Internal Revenue Code of 1986. However, irrespective of the tax treatment of the Reorganization, no gain or loss will be recognized by the Fund or holders of Fund shares as a direct result of the Reorganization (although the Fund may recognize gain or loss with respect to any securities of the Acquired Fund that are sold by the Fund after the Reorganization).

COMPARISON OF THE FUND AND THE COMBINED FUND

The Combined Fund will be managed by Angel Oak, the Fund’s current investment adviser. Furthermore, the Fund’s current portfolio management team will continue to be primarily responsible for the day-to-day management of the Combined Fund’s portfolio. Additionally, the investment objectives, principal investment strategies, principal risks and distribution procedures of the Combined Fund will be the same as those of the Fund.

Fees and Expenses Table

Below is a comparison of the fees and expenses of the Fund before and after the Reorganization. The information is as of January 31, 2020.

Pro forma combined fees and expenses are estimated in good faith and are hypothetical.

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Fees and expenses may be greater or lesser than those indicated below.

For the fiscal period ended January 31, 2020, the Combined Fund is estimated to have approximately $68,463,871 in average daily borrowings outstanding under a borrowing agreement (representing approximately 18.16% of the average daily value of the Combined Fund’s daily total assets minus liabilities (other than the aggregate indebtedness entered into for purposes of leverage) during such period) at an average annual interest rate of 3.24%. There can be no assurances that the Combined Fund will be able to obtain such level of borrowing (or to maintain its current level of borrowing), that the terms under which the Combined Fund borrows will not change, or that the Combined Fund’s use of leverage will be profitable.

The expenses shown under “Interest Expense” for the Fund and the Combined Fund in the table above include the expected interest expense on the maximum amount to which the Fund and the Combined Fund intend to borrow during the next (12) twelve months and reflect the fact that the Fund and the Combined Fund currently intend to issue preferred shares during the next twelve (12) months, including the estimated offering costs and the estimated interest costs, which will vary depending on, among other factors, changes in short-term interest rates.

Expense Example

The following example compares the expenses that a shareholder would pay on a $1,000 investment that is held for the time periods provided in the table before and after the Reorganization. The examples assume that all dividends and other distributions are reinvested and that Total Annual Operating Expenses remain the same. The example set forth below assumes shares of each fund were owned as of the completion of the Reorganization and uses a 5% annual rate of return as mandated by U.S. Securities and Exchange Commission (the “SEC”) regulations. The examples should not be considered a representation of future expenses. Actual expenses may be greater or lesser than those shown.

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Capitalization

The table below set forth the capitalization of the Fund as of March 31, 2020, and the pro forma capitalization of the Combined Fund as if the Reorganization had occurred on that date.

Leverage

The table below sets forth the aggregate financial leverage from borrowings as a percentage of the Fund’s total assets as of January 31, 2020, and the pro forma leverage of the Combined Fund as if the Reorganization had occurred on the same date.

Share Price Data

The following tables show for the periods indicated: (i) the high and low sales prices for common shares reported as of the end of the day on the NYSE, (ii) the high and low net asset values of the common shares, and (iii) the high and low of the premium/(discount) to net asset value (expressed as a percentage) of the common shares.

Acquired Fund

NAV is used for market price for all data points prior to May 10, 2018, given that the Acquired Fund did not trade or price prior to that date.

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The Fund

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ADDITIONAL INFORMATION ABOUT THE COMMON SHARES OF THE FUND

Description of Common Shares to be Issued by the Fund

The Fund currently offers one class of shares. As a general matter, the common shares have equal voting rights and equal rights with respect to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Fund and have no preemptive, conversion or exchange rights or rights to cumulative voting. Holders of whole common shares of the Fund are entitled to one vote per share on any matter on which the shares are entitled to vote, while each fractional share is entitled to a proportional fractional vote.

The Fund’s Declaration of Trust authorizes an unlimited number of shares, par value $0.001 per share. If Proposal 1 is approved by shareholders of the Fund and the Reorganization is approved by Acquired Fund shareholders and is consummated, the Fund will issue common shares to the shareholders of common stock of the Acquired Fund based on the relative per share net asset value of the Fund and the net asset value of the assets of the Acquired Fund, in each case as of the date of the Reorganization. Fund shares have equal rights with respect to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Fund. The Fund’s common shares, when issued, will be fully paid and non-assessable and have no preemptive, conversion or exchange rights or rights to cumulative voting.

Outstanding Shares

As of April 6, 2020, the Fund had 11,519,934 common shares outstanding.

Purchase and Sale

The Fund’s common shares are listed on the NYSE under the ticker symbol “FINS” and will continue to be so listed following the Reorganization.

Investors typically purchase and sell common shares of the Fund through a registered broker-dealer on the NYSE, thereby incurring a brokerage commission set by the broker-dealer. Alternatively, investors may purchase or sell common shares of the Fund through privately negotiated transactions with existing shareholders.

AGREEMENT BETWEEN VIVALDI AND ANGEL OAK AND SECTION 15(f)

Angel Oak and Vivaldi have entered into an agreement pursuant to which Angel Oak would purchase and acquire from Vivaldi (i) certain files, documents, data, operating systems, business books and records of Vivaldi and its subsidiaries to the extent relating to the investment advisory business conducted prior to the closing of the Reorganization by Vivaldi solely with respect to the Acquired Fund; (ii) all advertising, sales, marketing and promotional materials and literature used by Vivaldi and its subsidiaries in connection with the offering and sale of the Acquired Fund; and (iii) all goodwill associated with the investment advisory business conducted prior to the closing of the Reorganization by Vivaldi solely with respect to the Acquired Fund.

Section 15(f) of the 1940 Act is a non-exclusive safe harbor provision that permits an investment adviser of a registered investment company (or any affiliated persons of the investment adviser) to receive any amount or benefit in connection with a sale of securities of, or a sale of any other interest in, the investment adviser that results in an “assignment” (as defined in the 1940 Act) of an investment advisory contract with such registered investment company, provided that two conditions are satisfied. First, during the three-year period after such transaction, at least 75% of the members of the investment company’s board of trustees may not be “interested persons” (as defined in the 1940 Act) of the investment adviser or its predecessor. Second, an “unfair burden,” as that term is described in Section 15(f), must not be imposed on such registered investment company as a result of

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such transaction or any express or implied terms, conditions, or understandings relating to such transaction during the two-year period after the date on which any such transaction occurs.

Vivaldi and Angel Oak intend to qualify for the “safe harbor” provided by Section 15(f), and consequently: (i) for a period of three years after the Closing Date, at least 75% of the trustees of the Fund will not be “interested persons” (as defined in the 1940 Act) of Angel Oak or of Vivaldi, and (ii) for a period of two years after the Closing Date, no “unfair burden” will be imposed on the Fund as a result of the Reorganization or any express or implied terms, conditions, or understandings applicable thereto.

APPRAISAL RIGHTS

Shareholders of the Fund do not have appraisal rights in connection with Proposal 1.

PRO FORMA FINANCIAL STATEMENTS

Set forth in Appendix A are unaudited pro forma financial statements giving effect to the Reorganization of the Acquired Fund with and into the Fund which include: (i) Pro Forma Condensed Combined Schedule of Investments at January 31, 2020; (ii) Pro Forma Condensed Combined Statement of Assets and Liabilities at January 31, 2020; (iii) Pro Forma Condensed Combined Statement of Operations for the period May 31, 2019 (commencement of the Fund’s operations), through January 31, 2020; and (iv) Notes to Pro Forma Condensed Combined Financial Statements.

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PROPOSAL 2: TO RATIFY THE SELECTION OF COHEN & COMPANY, LTD. AS THE FUND’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING JANUARY 31, 2021

At a meeting of the Board held on April 1-2, 2020, the Audit Committee selected and recommended, and the Board, including a majority of the Independent Trustees, approved, the selection of Cohen & Company, Ltd. to act as the independent registered public accounting firm for the Fund for the fiscal year ending January 31, 2021. The shareholders of the Fund are being asked to ratify this selection. If the shareholders fail to ratify the selection of Cohen & Company, Ltd. to serve as the independent registered public accounting firm for the year ending January 31, 2021, the Audit Committee and the Board will reconsider the continued retention of Cohen & Company, Ltd.

A representative of Cohen & Company, Ltd. is not expected to attend the Special Meeting, but will have the opportunity to make a statement if he or she desires to do so and to answer appropriate questions if necessary.

Audit Fees

The aggregate audit fees billed by Cohen & Company, Ltd. for the period from May 31, 2019 (commencement of operations) to January 31, 2020 was $25,000.

Fees included in the audit fees category are those associated with the annual audits of financial statements, review of the financial statements included in the Annual Report on Form N-CSR and services that are normally provided in connection with statutory and regulatory filings.

Prior to the Fund’s commencement of operations, Cohen & Company, Ltd. billed the Fund $10,000 in connection with two seed audits.

Audit-Related Fees

No audit-related fees were billed by Cohen & Company, Ltd. for the period from May 31, 2019 (commencement of operations) to January 31, 2020.

Audit-related fees are for any services rendered to the Fund that are reasonably related to the performance of the audits or reviews of the Fund’s consolidated financial statements (but not reported as audit fees above). These services include attestation services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

In addition, no audit-related fees were billed by Cohen & Company, Ltd. to Angel Oak, and any entity controlling, controlled by, or under common control with, Angel Oak, that provides ongoing services to the Fund, for engagements directly related to the Fund’s operations and financial reporting, for the period from May 31, 2019 (commencement of operations) to January 31, 2020.

Tax Fees

The aggregate fees billed by Cohen & Company, Ltd. for services rendered to the Fund for tax compliance, tax advice and tax planning for the period from May 31, 2019 (commencement of operations) to January 31, 2020 was $4,000.

Fees included in the tax fees category comprise all services performed by professional staff in the independent registered public accountant’s tax division except those services related to the audits. This category comprises fees for tax compliance services provided in connection with the review of the Fund’s tax returns.

No tax fees were billed by the Fund’s independent registered public accountant to Angel Oak, and any entity controlling, controlled by, or under common control with, Angel Oak, that provides ongoing services to the Fund,

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for engagements directly related to the Fund’s operations and financial reporting, for the period from May 31, 2019 (commencement of operations) to January 31, 2020.

All Other Fees

No fees were billed by Cohen & Company, Ltd. for products and services provided to the Fund, other than the services reported in “Audit Fees,” and “Tax Fees” above, for the period from May 31, 2019 (commencement of operations) to January 31, 2020.

No other fees were billed by the Fund’s independent registered public accountant to Angel Oak, and any entity controlling, controlled by, or under common control with, Angel Oak, that provides ongoing services to the Fund, for the for the period from May 31, 2019 (commencement of operations) to January 31, 2020.

Aggregate Non-Audit Fees

No non-audit fees were billed to the Fund’s investment adviser and service affiliates by Cohen & Company, Ltd. for non-audit services for the period from May 31, 2019 (commencement of operations) to January 31, 2020. This includes any non-audit services required to be pre-approved or non-audit services that did not require pre-approval since they did not directly relate to the Fund’s operations or financial reporting. Prior to the Fund’s commencement of operations, Cohen & Company, Ltd. billed Angel Oak $4,000 in connection with agreed upon procedures.

Pre-Approval of Audit and Non-Audit Services

As of the date of this proxy statement, the Audit Committee has not adopted written pre-approval policies and procedures. Instead, the Audit Committee has the duty and responsibility to pre-approve all auditing services and permissible non-auditing services to be provided to the Fund in accordance with the Audit Committee Charter and the 1940 Act. In addition, the Audit Committee considers matters with respect to Cohen & Company, Ltd.’s independence each year. The Audit Committee did not approve any of the audit-related, tax or other non-audit fees described above pursuant to the “de minimis exceptions” set forth in Rule 2-01(c)(7)(i)(C) and Rule 2-01(c)(7)(ii) of Regulation S-X.

The Audit Committee also has the duty and responsibility to pre-approve those non-audit services provided to the Fund’s investment adviser (and entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the Fund) where the engagement relates directly to the operations or financial reporting of the Fund in accordance with the Audit Committee Charter and the 1940 Act. The Audit Committee considered whether the provision of any non-audit services rendered to Angel Oak and any entity controlling, controlled by, or under common control with Angel Oak that provides ongoing services to the Fund that were not pre-approved by the Audit Committee because the engagement did not relate directly to the operations and financial reporting of the Fund is compatible with maintaining Cohen & Company, Ltd.’s independence.

Board Recommendation

The Board, including each of the Independent Trustees, unanimously recommends that you vote “FOR” the ratification of Cohen & Company, Ltd. as independent registered public accounting firm to the Fund for the fiscal year ending January 31, 2021.

Vote Required for Proposal 2

Approval of Proposal 2, the ratification of the selection of Cohen & Company. Ltd. to serve as the Fund’s independent registered public accounting firm, requires a majority of the shares voted by shareholders (i.e., for Proposal 2 to pass the number of shares voted “FOR” must exceed the number of shares voted “AGAINST”). For additional information regarding the voting requirements, see “Voting Information and Requirements.”

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VOTING INFORMATION AND REQUIREMENTS

Record Date

Shareholders of record of the Fund as of the close of business on April 6, 2020, the record date (the “Record Date”), are entitled to notice of and to vote at the Special Meeting. Shareholders on the Record Date will be entitled to one vote for each share held.

Proxies

Shareholders of record as of the Record Date may vote by appearing in person at the Special Meeting, or may authorize a proxy to vote their shares by returning the enclosed proxy card or by casting their vote via telephone or the Internet using the instructions provided on the enclosed proxy card and more fully described below. The giving of such a proxy will not affect your right to vote in person should you decide to attend the Special Meeting. If your shares are held in “street name” by a broker or bank, you will receive information regarding how to instruct your bank or broker to cast your votes. Please note that if you are a holder in “street name” and wish to vote in person at the Special Meeting, you must obtain a legal proxy from your broker or bank, which may take several days.

Voting by proxy will not prevent you from voting your shares in person at the Special Meeting.

Any person giving a proxy may revoke it at any time prior to its exercise by giving written notice of the revocation to the Secretary of the Fund stating that the proxy is revoked, by a subsequent proxy executed by such shareholder, attendance at the Special Meeting and voting in person, or revocation by such shareholder using any electronic, telephonic, computerized or other alternative means authorized by the Board.

If you hold shares through a broker, bank or other nominee, you must follow the instructions you receive from your nominee in order to revoke your voting instructions.

If you hold your shares directly (not through a broker-dealer, bank or other financial institution) and if you return a properly executed proxy card that does not specify how you wish to vote on a Proposal, your shares will be voted “FOR” the Proposal.

Quorum

A quorum of shareholders must be present for any business to be conducted at the Special Meeting. The presence in person or by proxy of the holders of thirty-three and one-third percent (33-1/3%) of the shares entitled to vote shall constitute a quorum at the Special Meeting.

Broker Non-Votes and Abstentions

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker holding the shares. If the beneficial owner does not provide voting instructions, the broker can still vote the shares with respect to matters that are considered to be “routine,” but cannot vote the shares with respect to “non-routine” matters.

Proposal 1, the approval of the issuance of Fund common shares, is a “non-routine” matter. As a result, if you hold shares in “street name” through a broker, bank or other nominee, your broker, bank or nominee will not be permitted to exercise voting discretion with respect to Proposal 1. Therefore, if you do not vote and you do not give your broker or other nominee specific instructions on how to vote for you, then your shares will have no

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effect on Proposal 1. Under NYSE rules, abstentions will be considered as votes cast and, accordingly, will have the same effect as votes “AGAINST” Proposal 1. Broker non-votes, if any, will not be considered as votes cast and, accordingly, will have no effect on the outcome of Proposal 1.

Proposal 2, the ratification of the selection of Cohen & Company, Ltd. to serve as the Fund’s independent registered public accounting firm, is a “routine” matter. As a result, if you beneficially own your shares and you do not provide your broker or nominee with voting instructions, then your broker, bank or nominee will be able to vote your shares for you on Proposal 2. Because broker non-votes are entitled to vote on Proposal 2, broker non-votes will be counted as shares present for purposes of determining whether a quorum is present.

Abstentions will not be considered as votes cast and, accordingly, will have no effect on the outcome of Proposal 2.

Adjournments

Any meeting of shareholders, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares represented at the meeting, either in person or by proxy. Notice of adjournment of a shareholders’ meeting to another time or place need not be given, if such time and place are announced at the meeting at which adjournment is taken and the adjourned meeting is held within a reasonable time after the date set for the original meeting. If the adjournment is for more than 60 calendar days from the date set for the original meeting or a new record date is fixed for the adjourned meeting, notice of any such adjourned meeting shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of the By-Laws of the Fund.

Householding

Please note that only one copy of shareholder documents, including annual or semi-annual reports and proxy materials may be delivered to two or more shareholders of the Fund who share an address, unless the Fund has received instructions to the contrary. This practice is commonly called “householding” and it is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct the Fund otherwise. To request a separate copy of any shareholder document, or for instructions as to how to request a separate copy of these documents or as to how to request a single copy if multiple copies of these documents are received, shareholders should contact the Fund at the address and phone number set forth above.

Other Matters with Respect to the Special Meeting

The Fund does not have a formal policy regarding Board member attendance at shareholder meetings.

Shareholder Communications

Shareholders of the Fund who wish to send communications to the Board should send them to the Board c/o Angel Oak Capital Advisors, LLC, 3344 Peachtree Rd. NE, Suite 1725, Atlanta, Georgia 30326.

SHAREHOLDER INFORMATION

As of March 31, 2020, no single shareholder or “group” (as that term is used in Section 13(d) of the Exchange Act) beneficially owned more than 5% of either the Acquired Fund’s or the Fund’s outstanding common stock, except as described in the following tables. A control person is one who owns, either directly or indirectly, more than 25% of the voting securities of a Fund or acknowledges the existence of control. A party that controls a Fund may be able to significantly affect the outcome of any item presented to shareholders for approval. Information as

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to beneficial ownership of common shares, including percentage of common shares beneficially owned, is based on, among other things, reports filed with the SEC by such holders. Unless otherwise noted, the Funds do not have knowledge of the identity of the ultimate beneficiaries of the common shares listed below.

The Acquired Fund

The Fund

Security Ownership of Management

As of March 31, 2020, the current officers and trustees of the Fund, in the aggregate, owned less than 1% of the outstanding shares of any class of the Fund.

INVESTMENT ADVISER, ADMINISTRATOR, FUND ACCOUNTANT AND TRANSFER AGENT

Angel Oak Capital Advisors, LLC, located at 3344 Peachtree Road NE, Suite 1725, Atlanta, Georgia 30326, serves as the investment adviser for the Fund. U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as administrator, fund accountant and transfer agent to the Fund pursuant to respective agreements.

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SHAREHOLDER PROPOSALS

For nominations or other business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary and such other proposed business must otherwise be a proper matter for action by the shareholders. To be timely, a shareholder’s notice shall set forth all information required by the current By-Laws and shall be delivered to the Secretary at the principal executive office of the Fund, 3344 Peachtree Rd. NE, Suite 1725, Atlanta, Georgia 30326, not earlier than the 150th day or later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the date of the preceding year’s annual meeting, notice by the shareholder to be timely must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than the close of business on the later of the 120th day prior to the date of such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of a postponement or adjournment of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. Nominations of individuals for election to the Board of Trustees and the proposal of other business to be considered by the shareholders may be made at an annual meeting of shareholders only (1) pursuant to the Fund’s notice of meeting (or any supplement thereto), (2) by or at the direction of the Board of Trustees or any committee thereof or (3) by any shareholder of the Fund who was a shareholder of record both at the time of giving of notice by the shareholder and at the time of the annual meeting, who is entitled to vote at the meeting in the election of any individual so nominated or on any such other business.

Shareholder proposals that are submitted in a timely manner will not necessarily be included in the Fund’s proxy materials. Inclusion of such proposals is subject to limitations under the federal securities laws.

SOLICITATION OF PROXIES

Solicitation of proxies is being made primarily by the mailing of this Notice and Proxy Statement with its enclosures on or about May 7, 2020. Shareholders of the Fund whose shares are held by nominees such as brokers can vote their proxies by contacting their respective nominee. In addition to the solicitation of proxies by mail, employees of Angel Oak and its affiliates as well as dealers or their representatives may solicit proxies in person or by mail, telephone, telegraph, facsimile or oral communication. The Fund has retained Okapi, a proxy solicitation firm, to assist the solicitation and tabulation of proxies. The cost of Okapi’s services in connection with the proxy is approximately $16,610 and will be borne by Angel Oak.

OTHER BUSINESS

The Board knows of no other business to be presented for action at the Special Meeting. If any matters do come before the Special Meeting on which action can properly be taken, it is intended that the proxies shall vote in accordance with the judgment of the person or persons exercising the authority conferred by the proxy at the Special Meeting. The submission of a proposal does not guarantee its inclusion in the proxy statement or presentation at the Special Meeting unless certain securities law requirements are met.

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APPENDIX A

Schedule of Investments

January 31, 2020 (Unaudited)

A-1

A-2

A-3

A-4