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| ☒ | | | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
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| ☐ | | | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
Commission File Number | | | Exact name of registrant as specified in its charter, address of principal executive office, telephone number and state or other jurisdiction of incorporation or organization | | | I.R.S. Employer Identification Number | | |
| 814-01022 | | | Capitala Finance Corp. | | | 90-0945675 | |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | | | Trading symbol(s) | | | Name of Each Exchange on Which Registered | | |
| Common Stock, par value $0.01 per share 5.75% Convertible Notes due 2022 6.00% Notes due 2022 | | CPTA CPTAG CPTAL | | | NASDAQ Global Select Market NASDAQ Global Select Market | |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer | | | Accelerated filer | | |
| Non-accelerated filer | | | Smaller reporting company | |
| | | | Emerging growth company | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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PART I | | | | | | | |
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PART II | | | | | | | |
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PART III | | | | | | | |
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PART IV | | | | | | | |
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i
During the fourth quarter of 2017, Florida Sidecar transferred all of its assets to Capitala Finance Corp. and was legally dissolved as a standalone partnership.
On March 1, 2019, Fund II repaid its outstanding SBA debentures and relinquished its SBIC license.On September 10, 2015, we, Fund II, Fund III,IV, Fund V andand/or CSLC to the Investment Advisor filed an application for exemptive reliefextent their respective investment strategies align with the SEC to permit an investment fund and one or more affiliated investment funds, including future affiliated investment funds, to participate in the same investment opportunities through a proposed co-investment program where such participation would otherwise be prohibited under the 1940 Act. On June 1, 2016, the SEC issued an order permitting this relief. ours.
to pay an early termination fee. Collectively, these attributes have been, and are expected to be, important contributors to the returns generated by our Investment Advisor’s investment team.
with a loan transaction with a borrower. The Investment Advisor’s investment team generally seeks to structure our equity investments, such as direct equity co-investments, to provide us with minority rights provisions and, to the extent available, event-driven put rights. They also seek to obtain limited registration rights in connection with these investments, which may include “piggyback” registration rights. In addition to warrants and equity co-investments, our debt investments in the future may contain a synthetic equity position.
economic downturn, adverse regulatory changes and other relevant stressors that we attempt to simulate in our quantitative and qualitative analyses. Further, we continually examine the effect of these scenarios on financial ratios and other metrics.
Name and Address of Portfolio Company | | | Nature of Business | | | Type of Investment and General Terms(1)(2)(3)(4)(5) | | | % of Class Held | | | Cost (in thousands) | | | Fair Value (in thousands) | | |||||||||
3 Bridge Solutions, LLC 100 South Fifth Street Minneapolis, Minnesota 55402 | | | IT Consulting | | | First Lien Debt (10.7% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 12/4/22) | | | | | | | | | | $ | 13,274 | | | | | $ | 13,274 | | |
| | | | | | Preferred Units (965 units) | | | | | 3.2% | | | | | | 1,090 | | | | | | 499 | | |
| | | | | | Membership Units (39,000 units) | | | | | 3.3% | | | | | | 10 | | | | | | — | | |
Alternative Biomedical Solutions, LLC 1600 Wallace Drive Carrollton, Texas 75006 | | | Healthcare | | | First Lien Debt (8.0% Cash, 3.8% PIK, Due 12/18/22) | | | | | | | | | | | 5,331 | | | | | | 5,319 | | |
| | | | | | First Lien Debt (8.0% Cash, 3.8% PIK, Due 12/18/22)(6) | | | | | | | | | | | 13,125 | | | | | | 10,624 | | |
| | | | | | Membership Units (20,092 units) | | | | | 3.2% | | | | | | 800 | | | | | | — | | |
American Clinical Solutions, LLC 2424 N. Federal Highway Boca Raton, Florida 33431 | | | Healthcare | | | First Lien Debt (7.0% Cash, Due 12/31/22) | | | | | | | | | | | 3,500 | | | | | | 3,500 | | |
| | | | | | First Lien Debt (2.0% PIK, Due 12/31/22)(7) | | | | | | | | | | | 3,485 | | | | | | 3,485 | | |
Amerimark Direct, LLC 100 Nixon Lane Edison, New Jersey 08837 | | | Consumer Products | | | First Lien Debt (14.3% Cash, Due 9/8/21) | | | | | | | | | | | 15,974 | | | | | | 15,633 | | |
BigMouth, Inc 655 Winding Brook Drive Glastonbury, Connecticut 06033 | | | Consumer Products | | | First Lien Debt (10.3% Cash (1 month LIBOR + 8.5%, 0.5% Floor, Due 11/14/21)(8) | | | | | | | | | | | 857 | | | | | | 857 | | |
| | | | | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 0.5% Floor, Due 11/14/21) | | | | | | | | | | | 8,784 | | | | | | 8,628 | | |
Bluestem Brands, Inc. 6509 Flying Cloud Drive Eden Prairie, Minnesota 55344 | | | Online Merchandise Retailer | | | First Lien Debt (9.3% Cash (1 month LIBOR + 7.5%, 1.0% Floor), Due 11/7/20) | | | | | | | | | | | 3,529 | | | | | | 2,877 | | |
Burgaflex Holdings, LLC(21) 1101 Copper Avenue Fenton, Michigan 48430 | | | Automobile Part Manufacturer | | | First Lien Debt (12.0% Cash, 3.0% PIK, Due 3/23/21) | | | | | | | | | | | 14,421 | | | | | | 14,421 | | |
| | | | | | Common Stock Class B (1,085,073 shares) | | | | | 11.5% | | | | | | 362 | | | | | | 635 | | |
| | | | | | Common Stock Class A (1,253,198 shares) | | | | | 8.3% | | | | | | 1,504 | | | | | | — | | |
Name and Address of Portfolio Company | | | Nature of Business | | | Type of Investment and General Terms(1)(2)(3)(4)(5) | | | % of Class Held | | | Cost (in thousands) | | | Fair Value (in thousands) | | |||||||||
Burke America Parts Group, LLC 5852 W. 51st Street Chicago, Illinois 60638 | | | Home Repair Parts Manufacturer | | | Membership Units (14 units) | | | | | 1.8% | | | | | $ | 5 | | | | | $ | 2,489 | | |
CableOrganizer Acquisition, LLC 6250 NW 27th Way Ft. Lauderdale, Florida 33309 | | | Computer Supply Retail | | | First Lien Debt(9) | | | | | | | | | | | 1,532 | | | | | | 1,490 | | |
California Pizza Kitchen, Inc. 12181 Bluff Creek Drive Playa Vista, California 90094 | | | Restaurant | | | Second Lien Debt (11.9% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 8/23/23) | | | | | | | | | | | 4,927 | | | | | | 4,697 | | |
Capitala Senior Loan Fund II, LLC(22) 4201 Congress Street Charlotte, North Carolina 28209 | | | Investment Funds | | | Subordinated Debt (6.7% Cash (1 month LIBOR + 5.0%), Due 9/3/24) (11)(20) | | | | | | | | | | | — | | | | | | — | | |
| | | | | | Membership Units (80.0% ownership)(11)(19)(23) | | | | | 80.0% | | | | | | 13,600 | | | | | | 13,631 | | |
Chicken Soup for the Soul, LLC 132 East Putnam Avenue Cos Cob, Connecticut 06807 | | | Multi-platform Media and Consumer Products | | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 12/13/20) | | | | | | | | | | | 13,000 | | | | | | 13,000 | | |
Chief Fire Intermediate, Inc. 10 West Broad Street Mount Vernon, New York 10552 | | | Security System Services | | | First Lien Debt (8.7% Cash (1 month LIBOR + 7.0%, 1.6% Floor), Due 11/8/24) | | | | | | | | | | | 8,100 | | | | | | 8,100 | | |
| | | | | | Class A Preferred Units (34,740 units, 10.0% PIK Dividend)(10) | | | | | 6.2% | | | | | | 913 | | | | | | 913 | | |
| | | | | | Class B Common Units (3,510 units) | | | | | 0.8% | | | | | | — | | | | | | — | | |
City Gear, LLC(21) 4841 Summer Avenue Memphis, Tennessee 38122 | | | Footwear Retail | | | Membership Unit Warrants(9) | | | | | | | | | | | — | | | | | | 3,326 | | |
CIS Secure Computing, Inc. 21050 Ashburn Crossing Dr. Ashburn, Virginia 20147 | | | Government Services | | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 1.0% Floor), 1.0% PIK, Due 9/14/22) | | | | | | | | | | | 9,389 | | | | | | 9,389 | | |
| | | | | | Common Stock (46,163 shares) | | | | | 4.0% | | | | | | 1,000 | | | | | | 1,890 | | |
Corporate Visions, Inc. 5455 Kietzke Lane Reno, Nevada 89511 | | | Sales & Marketing Services | | | Subordinated Debt (9.0% Cash, 2.0% PIK, Due 11/29/21) | | | | | | | | | | | 19,327 | | | | | | 18,962 | | |
| | | | | | Common Stock (15,750 shares) | | | | | 2.5% | | | | | | 1,575 | | | | | | 329 | | |
Currency Capital, LLC 12100 Wilshire Boulevard Los Angeles, California 90025 | | | Financial Services | | | First Lien Debt (13.7% Cash (1 month LIBOR + 12.0%, 0.5% Floor), 2.0% PIK, Due 1/2/20)(11) | | | | | | | | | | | 16,269 | | | | | | 16,269 | | |
| | | | | | Class A Preferred Units (2,000,000 units)(11) | | | | | 2.0% | | | | | | 2,000 | | | | | | 2,504 | | |
Eastport Holdings, LLC(21) 813 Ridge Lake Blvd. Memphis, Tennessee 38120 | | | Business Services | | | Subordinated Debt (14.9% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 12/29/21)(16) | | | | | | | | | | | 16,155 | | | | | | 16,500 | | |
| | | | | | Membership Units (22.9% ownership) | | | | | 22.9% | | | | | | 3,263 | | | | | | 17,822 | | |
Flavors Holdings, Inc. 300 Jefferson Street Camden, New Jersey 08104 | | | Food Product Manufacturer | | | First Lien Debt (7.7% Cash (3 month LIBOR + 5.8%, 1.0% Floor), Due 4/3/20) | | | | | | | | | | | 5,778 | | | | | | 5,767 | | |
| | | | | | Second Lien Debt (11.9% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 10/3/21) | | | | | | | | | | | 11,878 | | | | | | 11,842 | | |
Freedom Electronics, LLC 2205 May Ct. NW Kennesaw, Georgia 30144 | | | Electronic Machine Repair | | | First Lien Debt (8.7% Cash, Due 12/20/23)(6)(12) | | | | | | | | | | | 5,940 | | | | | | 5,940 | | |
| | | | | | Membership Units (181,818 units) | | | | | 0.6% | | | | | | 182 | | | | | | 160 | | |
GA Communications, Inc.(21) 2196 West Part Court Stone Mountain, Georgia 30087 | | | Advertising & Marketing Services | | | Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend)(10) | | | | | 8.3% | | | | | | 3,476 | | | | | | 3,761 | | |
| | | | | | Series B-1 Common Stock (200,000 shares) | | | | | 8.3% | | | | | | 2 | | | | | | 501 | | |
Name and Address of Portfolio Company | | | Nature of Business | | | Type of Investment and General Terms(1)(2)(3)(4)(5) | | | % of Class Held | | | Cost (in thousands) | | | Fair Value (in thousands) | | |||||||||
HUMC Opco, LLC 308 Willow Avenue Hoboken, New Jersey 07030 | | | Healthcare | | | First Lien Debt (9.0% Cash, Due 8/16/20) | | | | | | | | | | $ | 5,000 | | | | | $ | 5,000 | | |
Installs, LLC 241 Main Street Buffalo, New York 14203 | | | Logistics | | | First Lien Debt (9.3% Cash, Due 6/20/23)(6) | | | | | | | | | | | 2,924 | | | | | | 2,924 | | |
J5 Infrastructure Partners, LLC 2030 Main Street Irvine, California 92614 | | | Wireless Deployment Services | | | First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24)(13) | | | | | | | | | | | — | | | | | | — | | |
| | | | | | First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24) | | | | | | | | | | | 7,000 | | | | | | 7,000 | | |
Jurassic Quest Holdings, LLC 200 River Point Conroe, Texas 77304 | | | Entertainment | | | First Lien Debt (9.5% Cash (1 month LIBOR + 7.5%, 2.0% Floor), Due 5/1/24)(14) | | | | | | | | | | | 10,827 | | | | | | 10,827 | | |
| | | | | | Preferred Units (375,000 units) | | | | | 1.5% | | | | | | 388 | | | | | | 85 | | |
LJS Partners, LLC(21) 10350 Ormsby Park Place Louisville, Kentucky 40223 | | | QSR Franchisor | | | Preferred Units (92,924 units) | | | | | 9.8% | | | | | | 293 | | | | | | 372 | | |
| | | | | | Common Membership Units (2,593,234 units) | | | | | 8.5% | | | | | | 1,224 | | | | | | 1,509 | | |
MicroHoldco, LLC 1102 Windam Road South Windam, Connecticut 06266 | | | General Industrial | | | Preferred Units(9) | | | | | | | | | | | 838 | | | | | | 838 | | |
MMI Holdings, LLC(21) 325 McGill Avenue, Suite 195 Concord, North Carolina 28027 | | | Medical Device Distributor | | | First Lien Debt (12.0% Cash, Due 1/31/21)(16) | | | | | | | | | | | 2,600 | | | | | | 2,600 | | |
| | | | | | Subordinated Debt (6.0% Cash, Due 1/31/21)(16) | | | | | | | | | | | 388 | | | | | | 400 | | |
| | | | | | Preferred Units (1,000 units, 6.0% PIK Dividend)(10) | | | | | 100.0% | | | | | | 1,572 | | | | | | 1,710 | | |
| | | | | | Common Membership Units (45 units) | | | | | 5.0% | | | | | | — | | | | | | 194 | | |
Navis Holdings, Inc.(21) 113 Woodside Drive Lexington, North Carolina 27292 | | | Textile Equipment Manufacturer | | | First Lien Debt (11.0% Cash, Due 6/30/23)(16) | | | | | | | | | | | 10,100 | | | | | | 10,100 | | |
| | | | | | Class A Preferred Stock (1,000 shares, 10% Cash Dividend)(10) | | | | | 100.0% | | | | | | 1,000 | | | | | | 1,000 | | |
| | | | | | Common Stock (60,000 shares) | | | | | 13.8% | | | | | | — | | | | | | 464 | | |
Nth Degree Investment Group, LLC(21) 3237 Satellite Blvd Duluth, Georgia 30096 | | | Business Services | | | Membership Units (6,088,000 Units) | | | | | 5.6% | | | | | | 6,088 | | | | | | 6,088 | | |
Portrait Studio, LLC 2101 Cambridge Beltway Drive Charlotte, North Carolina 28273 | | | Professional and Personal Digital Imaging | | | First Lien Debt(9) | | | | | | | | | | | 510 | | | | | | 510 | | |
RAM Payment, LLC(21) 412 North Cedar Bluff Road Knoxville, Tennessee 37923 | | | Financial Services | | | First Lien Debt (10.0% Cash, Due 1/4/24) (6) | | | | | | | | | | | 9,019 | | | | | | 9,019 | | |
| | | | | | Preferred Units (86,000 units, 8.0% PIK Dividend)(10) | | | | | 6.1% | | | | | | 928 | | | | | | 1,725 | | |
Rapid Fire Protection, Inc. 1530 Samco Road Rapid City, South Dakota 57702 | | | Security System Services | | | First Lien Debt (9.2% Cash, Due 11/22/24)(6)(15) | | | | | | | | | | | 6,550 | | | | | | 6,550 | | |
| | | | | | Common Stock (363 shares) | | | | | 3.6% | | | | | | 500 | | | | | | 500 | | |
Seitel, Inc. 10811 South Westview Circle Drive Houston, Texas 77043 | | | Data Services | | | First Lien Debt (10.0% Cash (1 month LIBOR + 8.3%, 1.0% Floor), Due 3/15/23) | | | | | | | | | | | 4,749 | | | | | | 4,749 | | |
Sequoia Healthcare Management, LLC 10 Exchange Place Jersey City, New Jersey 07032 | | | Healthcare Management | | | First Lien Debt (12.8% Cash, Due 6/26/20) | | | | | | | | | | | 12,744 | | | | | | 12,607 | | |
Name and Address of Portfolio Company | | | Nature of Business | | | Type of Investment and General Terms(1)(2)(3)(4)(5) | | | % of Class Held | | | Cost (in thousands) | | | Fair Value (in thousands) | | |||||||||
Sierra Hamilton Holdings Corporation(21) 900 Threadneedle Houston, Texas 77079 | | | Oil & Gas Engineering and Consulting Services | | | Second Lien Debt (15.0% PIK, Due 9/12/23) | | | | | | | | | | $ | 748 | | | | | $ | 748 | | |
| | | | | | Common Stock (15,068,000 shares) | | | | | 13.7% | | | | | | 6,958 | | | | | | 5,160 | | |
Sur La Table, Inc. 6100 4th Ave S Ste 500 Seattle, Washington 98108 | | | Retail | | | First Lien Debt (10.9% Cash (3 month LIBOR + 9.0%, 1.0% Floor), Due 7/31/22)(16)(17) | | | | | | | | | | | 10,528 | | | | | | 10,045 | | |
Taylor Precision Products, Inc. 2311 W. 22nd Street Oak Brook, Illinois 60523 | | | Household Product Manufacturer | | | Series C Preferred Stock (379 shares) | | | | | 8.3% | | | | | | 758 | | | | | | 758 | | |
U.S. BioTek Laboratories, LLC 16020 Linden Ave. N. Shoreline, Washington 98133 | | | Testing Laboratories | | | First Lien Debt (9.3% Cash, Due 12/14/23)(6)(12) | | | | | | | | | | | 6,930 | | | | | | 6,822 | | |
| | | | | | Class A Preferred Units (500 Units) | | | | | 2.5% | | | | | | 540 | | | | | | 204 | | |
| | | | | | Class C Units (500 Units) | | | | | 2.2% | | | | | | 1 | | | | | | — | | |
U.S. Well Services, Inc. 1360 Post Oak Boulevard Houston, Texas 77056 | | | Oil & Gas Services | | | Class A Common Stock (77,073 shares)(11)(18) | | | | | 0.1% | | | | | | 771 | | | | | | 146 | | |
| | | | | | Class B Common Stock (1,125,426 shares)(11)(18) | | | | | 1.6% | | | | | | 6,701 | | | | | | 2,127 | | |
V12 Holdings, Inc.(21) 141 West Front Street, Suite 410 Red Bank, New Jersey 07701 | | | Data Processing & Digital Marketing | | | Subordinated Debt(9) | | | | | | | | | | | 655 | | | | | | 708 | | |
Vology, Inc.(22) 15950 Bay Vista Dr. Clearwater, Florida 33760 | | | Information Technology | | | First Lien Debt (10.5% Cash (1 month LIBOR + 8.5%, 2.0% Floor), Due 12/31/21) | | | | | | | | | | | 3,877 | | | | | | 3,877 | | |
| | | | | | Class A Preferred Units (9,041,810 Units) | | | | | 51.6% | | | | | | 5,215 | | | | | | 5,215 | | |
| | | | | | Membership Units (5,363,982 Units) | | | | | 32.6% | | | | | | — | | | | | | — | | |
Xirgo Technologies, LLC 188 Camino Ruiz Camarillo, California 93012 | | | Information Technology | | | Membership Units (600,000 units) | | | | | 1.0% | | | | | | 600 | | | | | | 917 | | |
| | | | | | | | | | | | | | | | $ | 353,881 | | | | | $ | 362,532 | | |
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securities and (ii) loss of our debt principal, in the event of a default. In general, our internal rating system may also assist our valuation team in its determination of the estimated fair value of equity securities or equity-like securities. Our internal risk rating system generally encompasses both qualitative and quantitative aspects of our portfolio companies.
Investment Rating | | | Summary Description | | |
| 1 | | | In general, the investment may be performing above our internal expectations. Full return of principal and interest is expected. Capital gain is expected. | |
| 2 | | | In general, the investment may be performing within our internal expectations, and potential risks to the applicable investment are considered to be neutral or favorable compared to any potential risks at the time of the original investment. All new investments are initially given this rating. | |
| 3 | | | In general, the investment may be performing below our internal expectations and therefore, investments in this category may require closer internal monitoring; however, the valuation team believes that no loss of investment return (interest and/or dividends) or principal is expected. The investment also may be out of compliance with certain financial covenants. | |
| 4 | | | In general, the investment may be performing below internal expectations and quantitative or qualitative risks may have increased substantially since the original investment. Loss of some or all principal is expected. | |
| 5 | | | In general, the investment may be performing substantially below our internal expectations and a number of quantitative or qualitative risks may have increased substantially since the original investment. Loss of some or all principal is expected. | |
Investment Rating | | | As of December 31, 2019 | | | As of December 31, 2018 | | ||||||||||||||||||
| Investments at Fair Value | | | Percentage of Total Investments | | | Investments at Fair Value | | | Percentage of Total Investments | | ||||||||||||||
1 | | | | $ | 85,688 | | | | | | 23.6% | | | | | $ | 171,829 | | | | | | 38.3% | | |
2 | | | | | 219,855 | | | | | | 60.7 | | | | | | 194,411 | | | | | | 43.3 | | |
3 | | | | | 56,989 | | | | | | 15.7 | | | | | | 73,325 | | | | | | 16.3 | | |
4 | | | | | — | | | | | | — | | | | | | 9,362 | | | | | | 2.1 | | |
5 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 362,532 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
|
Investment Rating | As of December 31, 2017 | As of December 31, 2016 | ||||||||||||||
Investments at Fair Value | Percentage of Total Investments | Investments at Fair Value | Percentage of Total Investments | |||||||||||||
1 | $ | 191,204 | 38.2 | % | $ | 183,826 | 33.9 | % | ||||||||
2 | 186,445 | 37.3 | 215,058 | 39.7 | ||||||||||||
3 | 97,309 | 19.5 | 125,381 | 23.2 | ||||||||||||
4 | 24,981 | 5.0 | 17,374 | 3.2 | ||||||||||||
5 | — | — | — | — | ||||||||||||
Total | $ | 499,939 | 100.0 | % | $ | 541,639 | 100.0 | % |
is also included in the amount of our gross assets used to calculate the 1.75% base management fee. We pay the Investment Advisor an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and will equal 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees with respect to each of the investments in our portfolio.
We will defer cash payment of the portion of any incentive fee otherwise earned by our Investment Advisor that would, when taken together with all other incentive fees paid to our Investment Advisor during the most recent 12 full calendar month period ending on or prior to the date such payment is to be made, exceed 20% of the sum of (a) our pre-incentive fee net investment income during such period, (b) our net
unrealized appreciation or depreciation during such period and (c) our net realized capital gains or losses during such period. Any deferred incentive fees will be carried over for payment in subsequent calculation periods to the extent such payment is payable under the Investment Advisory Agreement.
= 100% × (2.2% – 2.0%)
= 0.20%
Incentive fee = (100% × 0.5%) + (20% × (2.80% – 2.5%))
= 0.5% + (20%× 0.3%)
= 0.5% + 0.06%
= 0.56%
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| Income Related Incentive Fee Accrued Before Application of Deferral Mechanism | | | Capital Gains Related Incentive Fee Accrued Before Application of Deferral Mechanism | | | Incentive Fee Calculations | | | Incentive Fees Paid and Deferred | | |||
| Year 1 | | | $8.0 million ($40.0 million multiplied by 20%) | | | None | | | $8.0 million | | | Incentive fees of $8.0 million paid; no incentive fees deferred | |
| Year 2 | | | $8.0 million ($40.0 million multiplied by 20%) | | | $6.0 million (20% of | | | $14.0 million | | | Incentive fees of $14.0 million paid; no incentive fees deferred | |
| Year 3 | | | $8.0 million ($40.0 million multiplied by 20%) | | | None (20% of cumulative net capital gains of $25.0 million ($30.0 million in cumulative realized gains less $5.0 million in cumulative unrealized capital depreciation) less $6.0 million of capital gains fee paid in Year 2) | | | $7.0 million (20% of the sum of (a) our pre-incentive fee net investment income, (b) our net unrealized appreciation or depreciation during such period and (c) our net realized capital gains or losses during Year 3) | | | Incentive fees of $7.0 million paid; $8.0 million of incentive fees accrued but payment restricted to $7.0 million; $1.0 million of incentive fees deferred | |
| Year 4 | | | $8.0 million ($40.0 million multiplied by 20%) | | | $0.2 million (20% of cumulative net capital gains of $31.0 million ($36.0 million cumulative realized capital gains less $5.0 million cumulative unrealized capital depreciation) less $6.0 million of capital gains fee paid in Year 2) | | | $8.2 million | | | Incentive fees of $9.2 million paid ($8.2 million of incentive fees accrued in Year 4 plus | |
distribute to our stockholders, for each taxable year, at least 90% of our “investment company taxable income,”
other applicable IRS guidance.
discount (such as debt instruments with PIK interest or, in certain cases, increasing interest rates or issued with
Investment income received from sources within foreign countries, or capital gains earned by investing in securities of foreign issuers, may be subject to foreign income taxes withheld at the source. In this regard,
We believe that our acquisition of the Legacy Funds’ portfolio assets in exchange for shares of our common stock generally was tax free to us and the Legacy Funds. As a result, our initial adjusted basis in the Legacy Funds’ portfolio assets was equal to the Legacy Funds’ adjusted basis in such assets immediately prior to our acquisition of such assets increased by any gain recognized by the Legacy Funds as a result of such transaction. Such adjusted basis will be used in determining the amount of our taxable gain or loss upon a sale or other disposition of such assets. To the extent that such assets had built-in gain (i.e., assets whose fair market value exceeds our tax basis at the time we acquired them) on the date of acquisition, when such gain is recognized by us upon a sale or other disposition such assets, we will be required to distribute such gain to our stockholders in order to eliminate our liability for corporate-level U.S. federal income tax on such gain and possibly to maintain our qualification as a RIC under the Code. Investors will be subject to tax on the distribution even though such gain accrued prior to our acquisition of such assets and even though the distribution effectively represents a return of their investment.
In addition, to the extent that any beneficial owner of interests in the Legacy Funds on the date of our acquisition of the Legacy Funds’ portfolio assets was a C corporation (a “corporate partner”), we will be required to pay a corporate-level U.S. federal income tax on the net amount of any such built-in gains attributable to the corporate partners that we recognize during the ten-year period (or shorter applicable period) beginning on the date of acquisition. Alternatively, we may make a special election to cause the gain to be recognized at the time of the acquisition. In that event, the Legacy Funds would be required to recognize such built-in gain as if a proportionate share of such Funds’ assets were sold at the time of the acquisition. We do not anticipate making this election at this time. Any corporate-level built-in gain tax is payable at the time the built-in gains are recognized (which generally will be the years in which the built-in
gain assets are sold in a taxable transaction). The amount of this tax will vary depending on the assets that are actually sold by us in this 10-year period (or shorter applicable period), the actual amount of net built-in gain or loss present in those assets as of the acquisition date and effective tax rates. The payment of any such corporate-level U.S. federal income tax on built-in gains will be a company expense that will be borne by all stockholders (not just any former corporate partners) and will reduce the amount available for distribution to stockholders.
outstanding senior securities, of at least 200%150%, if certain conditions are met, after each issuance of senior securities. On March 23, 2018, the Small Business Credit Availability Act (the “SBCA”) was signed into law, which included various changes to regulations under the federal securities laws that impact BDCs. The SBCA included changes to the 1940 Act to allow BDCs to decrease their asset coverage requirement from 200% to 150% (i.e. the amount of debt may not exceed 66.7% of the value of our total assets), if certain requirements are met. On November 1, 2018, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) approved the application of the modified asset coverage. As a result, our asset coverage requirements for senior securities were changed from 200% to 150%, effective November 1, 2019.
Our proxy voting decisions will be made by the senior officers who are responsible for monitoring each of our clients’ investments. To ensure that our vote is not the product of a conflict of interest, we will require that: (1) anyone involved in the decision making process disclose to our managing member any potential conflict that he or she is aware of and any contact that he or she has had with any interested party regarding a proxy vote; and (2) employees involved in the decision making process or vote administration are prohibited from revealing how we intend to vote on a proposal in order to reduce any attempted influence from interested parties.
Fund II and
2019.
businesses, invest in the equity securities of such businesses and provide them with consulting and advisory services.
In December 2015, the 2016 omnibus spending bill approved by Congress and signed into law by the President increased the amount
The SEC also maintains a website that contains reports, proxy and information statements and other information we file with the SEC atwww.sec.gov. Copies of these reports, proxy and information statements and other information may also be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing to the SEC’s Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549-0102. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.
investments or may bear substantial risk of capital loss. We believe a significant part of our competitive advantage stems from the fact
In addition, an affiliate of the Investment Advisor also manages Fund IV, a private investment limited partnership providing financing solutions to smaller and lower middle-market companies that had its first closing in March 2013 and obtained SBA approval for its SBIC license in April 2013. In addition to Fund IV,
strategies align with ours.
objective and strategies.
the ultimate determination of fair value is made by our Board, including our interested directors, and not by such third-party valuation firm. The participation of the Investment Advisor’s investment professionals in our valuation process could result in conflicts of interest as the Investment Advisor’s management fee is based, in part, on the value of our gross assets, and its incentive fees will be based, in part, on realized and unrealized gains and depreciation.
Although
assets in specified types of securities, primarily in private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. 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 us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our stockholders, we may elect to withdraw our status as a BDC. If we decide to withdraw our election, or if we otherwise fail to qualify, or maintain our qualification, as a BDC, we may be subject to the substantially greater regulation under the 1940 Act as a closed-end investment company. Compliance with such regulations would significantly decrease our operating flexibility and could significantly increase our costs of doing business.
In certain limited circumstances, pursuant to an SEC staff interpretation, we may also issue shares at a price below net asset value in connection with a transferable rights offering so long as: (1) the offer does not discriminate among stockholders; (2) we use our best efforts to ensure an adequate trading market exists for the rights; and (3) the ratio of the offering does not exceed one new share for each three rights held. If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, the percentage ownership of our stockholders at that time would decrease and they may experience dilution. Moreover, we can offer no assurance that we will be able to issue and sell additional equity securities in the future, on favorable terms or at all.
Assumed Return on Our Portfolio(1) (net of expenses) | | | (10.0)% | | | (5.0)% | | | 0.0% | | | 5.0% | | | 10.0% | | |||||||||||||||
Corresponding net return to common stockholder | | | | | (40.0)% | | | | | | (24.7)% | | | | | | (9.5)% | | | | | | 5.8% | | | | | | 21.1% | | |
Europe, triggered by high budget deficits and rising direct and contingent sovereign debt, which created concerns about the ability of certain nations to continue to service their sovereign debt obligations. Risks resulting from such debt crisis including any austerity measures taken in exchange for bailout of certain nations, and any future debt crisis in Europe or any similar crisis elsewhere could have a detrimental impact on the global economic recovery, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally. In June 2016, the United Kingdom held a referendum in which voters approved an exit from the European Union (“Brexit”), and, accordingly,subsequently, on February 1,March 29, 2017, the U.K. Parliament voted in favor of allowing the U.K. government to beginbegan the formal process of Brexit. The initial negotiations on Brexit commenced in June 2017.leaving the European Union. Brexit created political and economic uncertainty and instability in the global markets (including currency and credit markets), and especially in the United Kingdom and the European Union. Under current Prime Minister Boris Johnson, the House of Commons passed the Brexit deal on December 20, 2019 and the U.K. formally left the European Union on January 31, 2020. The U.K. is currently in a transition period until December 31, 2020, where agreements surrounding trade and other aspects of the U.K.’s future relationship with the European Union will need to be finalized. Failure to come to terms on a free trade deal could result in checks and tariffs on U.K. goods traveling to the European Union and this uncertainty and instability may last indefinitely. Because ofthus prolong the election results in the U.K. in June 2017, there is increased uncertainty on the timing of Brexit.economic uncertainty. There is continued concern about national-level support for the Euro and the accompanying coordination of fiscal and wage policy among European Economic and Monetary Union member countries. In addition, the fiscal and monetary policiespolicy of foreign nations, such as Russia and China, may have a severe impact on the worldwide and U.S. financial markets.
As a result of the 2016 U.S. election, the
elect to receive his or her entire distribution in either cash or stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution. If too many stockholders elect to receive cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock). In no event will anyAny stockholder electing to receive cash will receive at least the lesser of (a) the portion of the distribution such stockholder has elected to receive in cash or (b) an amount equal to his or her entire distribution times the percentage limitation on cash available for distribution. If these and certain other requirements are met, for U.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. Taxable stockholders receiving such dividends (whether received in cash, our stock, or a combination thereof) will be required to include the full amount of the dividend as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the extent of our current and accumulated earnings and profits for U.S. federal income tax purposes. As a result, a U.S. stockholder may be required to pay tax with respect to such dividends in excess of any cash received. If a U.S. stockholder sells the stock it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in stock. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our stock.
As a BDC, under the 1940 Act generally we are not permitted to incur indebtedness unless immediately after such borrowing we have an asset coverage for total borrowings of at least 200% (i.e., the amount of debt may not exceed 50% of the value of our total assets or we may borrow an amount equal to 100% of net assets). The adoption of either the Financial CHOICE Act of 2017, which was passed by the U.S House of Representatives in June 2017, or the Small Business Credit Availability Act, which was passed by the Financial Services Committee of the U.S. House of Representatives in November 2017, would modify this section of the 1940 Act and increase the amount of debt that BDCs may incur by modifying the asset coverage percentage from 200% to 150%. As a result, we may be able to incur additional indebtedness in the future and therefore your risk of an investment in us may increase. In addition, in December 2015, the 2016 omnibus spending bill approved by Congress and signed into law by the President increased the amount of SBA-guaranteed debentures that affiliated SBIC funds can have outstanding from $225.0 million to $350.0 million, subject to SBA approval. This new legislation may allow us to issue additional SBIC debentures above the $225.0 million of SBA-guaranteed debentures previously permitted pending application for and receipt of additional SBIC licenses. If we incur this additional indebtedness in the future, your risk of an investment in our securities may increase.
fiscal years. The SBA regulations also provide alternative size standard criteria to determine eligibility, which depend on the industry in which the business is engaged and are based on factors such as the number of employees and gross sales. The SBA regulations permit licensed SBICs to make long term loans to small businesses, invest in the equity securities of such businesses and provide them with consulting and advisory services. The SBA also places certain limitations on the financing terms of investments by SBICs in portfolio companies and prohibits SBICs from providing funds for certain purposes or to businesses in a few prohibited industries. Compliance with SBA requirements may cause a Legacy Fund to forego attractive investment opportunities that are not permitted under SBA regulations.
If, in the future, Fund III fails to comply with applicable SBA regulations, Fund III could, depending on the severity of
If unauthorized parties gain access to such information and technology systems, they may be able to steal, publish, delete or modify private and sensitive information, including nonpublic personal information related to stockholders (and their beneficial owners) and material nonpublic information. The systems we have implemented to manage risks relating to these types of events could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems or of disaster recovery plans for any reason could cause significant interruptions in our and our Investment Advisor’s operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to stockholders, material nonpublic information and other sensitive information in our possession.
extent OID or PIK interest constitute a portion of our income, we are exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash, including the following:
We are and we will remain an “emerging growth company” as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the completion of our IPO, (ii) in which we have total annual gross revenue of at least $1.0 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of the previous second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an “emerging growth company” we have chosen to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to take advantage of the extended transition period for complying with new or revised accounting standards, which may make it more difficult for investors and securities analysts to evaluate us since our financial statements may not be comparable to companies that comply with public company effective dates and may result in less investor confidence.
Because of the exemptions from various reporting requirements provided to us as an “emerging growth company” under the JOBS Act and because we will have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult for us to raise additional capital as and when we need it. Investors may be unable to compare our business
with other companies in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially and adversely affected.
disadvantages of discouraging any such acquisition proposals because, among other things, the negotiation of such proposals may improve their terms. Our Board has considered both the positive and negative effects of the foregoing provisions and determined that they are in the best interest of our stockholders.
Our first lien loans may also include unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and subordinated loans. Unitranche loans will expose us to the risks associated with second lien and subordinated loans to the extent we invest in the “last out” tranche. These first lien loans and bonds may include payment-in-kind (“PIK”) interest, which represents contractual interest accrued and added to the principal that generally becomes due at maturity.
prohibited from buying or selling any security (other than any security of which we are the issuer) from or to any company that is advised or managed by our Investment Advisor or its affiliates without the prior approval of the SEC, which may limit the scope of investment opportunities that would otherwise be available to us.
strategies.
industries have to varying degrees, a material portion of our investment portfolio could be affected adversely, which, in turn, could adversely affect our financial position and results of operations.
could trigger cross-defaults under other agreements and jeopardize our portfolio company’s ability to meet its obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek
The
LIBOR, the London Interbank Offered Rate, is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. We typically use LIBOR as a reference rate in term loans we extend to portfolio companies such that the interest due to us pursuant to a term loan extended to a portfolio company is calculated using LIBOR. Some of our term loan agreements with portfolio companies contain a stated minimum value for LIBOR.
On July 27, 2017, the United Kingdom'sKingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if atexpected that time whether or nota transition away from the widespread use of LIBOR to alternative rates will ceaseoccur over the course of the next several years. As a result of this transition, interest rates on financial instruments tied to exist or if new methodsLIBOR rates, as well as the revenue and expenses associated with those financial instruments, may be adversely affected. Further, any uncertainty regarding the continued use and reliability of calculating LIBOR will be established such that it continuesas a benchmark interest rate could adversely affect the value of our financial instruments tied to exist after 2021.LIBOR rates. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large USU.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities.securities, called the Secured Overnight Financing Rate (“SOFR”). The first publication of SOFR was released in April 2018. Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR at this time is uncertain.
from higher grade issues, but typically involve greater risk. These securities are especially sensitive to adverse changes in general economic conditions, to changes in the financial condition of their issuers and to price fluctuation in response to changes in interest rates. During periods of economic downturn or rising interest rates, issuers of below investment grade instruments may experience financial stress that could adversely affect their ability to make payments of principal and interest and increase the possibility of default.
On December 28, 2017, an alleged stockholder filed a putative class action lawsuit complaint,Paskowitz v. Capitala Finance Corp., et al.,inIn the United States District Court for the Central Districtordinary course of California (case number 2:17-cv-09251-MWF-AS) (the “PaskowitzAction”),againstbusiness, the Company andmay directly or indirectly be a defendant or plaintiff in legal actions with respect to bankruptcy, insolvency or other types of proceedings. Such lawsuits may involve claims that could adversely affect the value of certain of its current officers on behalf of all persons who purchasedfinancial instruments owned by the Company or otherwise acquired the Company’s common stock between January 4, 2016 and August 7, 2017. On January 3, 2018, another alleged stockholder filed a putative class action complaint,Sandifer v. Capitala Finance Corp., et al.,result in the United States District Court for the Central District of California (case number 2:18-cv-00052-MWF-AS) (the “SandiferAction”), asserting substantially similar claims on behalf of the same putative class and against the same defendants. The complaints in thePaskowitzAction and theSandiferAction allege certain violations of the securities laws, including, inter alia, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations, and prospects. On February 2, 2018, theSandifer Action was transferred, on stipulation of the parties,direct losses to the United States District Court for the Western DistrictCompany. The nature of North Carolina on February 2, 2018, which remains pending. While the Company intends to vigorously defend itself in this litigation the outcome of these legal proceedings cannot be predicted with certainty.
Estimating an amount or range of possible losses resulting from litigation proceedings is inherentlycan make it difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, are in the early stages of the proceedings, and are subject to appeal. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimateimpact a particular lawsuit will have on the possible losses or a range of possible losses resulting from, the matters described above. Based on information currently available,Company. There are many reasons that the Company does not believe that any reasonably possible losses arising from the currently pending legal matters described above will be material to the Company’s results of operationscannot make these assessments, including, among others, one or financial condition. However, in lightmore of the inherent uncertainties involvedfollowing: the proceeding is in such matters, an adverse outcomeits early stages; the damages sought are unspecified, unsupportable, unexplained or uncertain; discovery has not started or is not complete; there are significant facts in this litigation could materially adversely affect the Company’s financial condition, results of operations or cash flowsdispute; and there are other parties who may share in any particular reporting period.
ultimate liability.
addition, we can provide you no assurance that the any offering will be successful, or that by increasing the size of our available equity capital, our aggregate expenses, and correspondingly, our expense ratio, will be lowered.
Any decision2021. Although our Board is generally required to make certain determinations prior to any issuance of our common stock at a price below the then current net asset value (“NAV”) per share, we may sell shares of our common stock at a price per share below the then current NAV in reliance on our stockholder approval obtained at the 2019 Annual Stockholders Meeting where the Board approved the Company’s ability to sell below NAV in a $50.0 million “at the market offering” (the “ATM Program”). However, if stockholders do not approve the ability to sell below NAV at the 2020 Annual Stockholders Meeting, then we will not be able to sell below NAV in the ATM Program after April 30, 2020.
decline, the leverage would result in a greater decrease in net asset value to the holders of common stock than if we were not leveraged through the issuance of preferred stock. This greater net asset value decrease would also tend to cause a greater decline in the market price for the common stock. We might be in danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings, if any, on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet the dividend requirements on the preferred stock. In order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In addition, we would pay (and the holders of common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred stock. Holders of preferred stock may have different interests than holders of common stock and may at times have disproportionate influence over our affairs.
Other than as described below, we
On December 28, 2017, an alleged stockholder filed a putative class action lawsuit complaint,Paskowitz v. Capitala Finance Corp., et al.,in the United States District Court for the Central District of California (case number 2:17-cv-09251-MWF-AS) (the “PaskowitzAction”),against the Company and certain of its current officers on behalf of all persons who purchased or otherwise acquired the Company’s common stock between January 4, 2016 and August 7, 2017. On January 3, 2018, another alleged stockholder filed a putative class action complaint,Sandifer v. Capitala Finance Corp., et al.,in the United States District Court for the Central District of California (case number 2:18-cv-00052-MWF-AS) (the “SandiferAction”), asserting substantially similar claims on behalf of the same putative class and against the same defendants. The complaints in thePaskowitzAction and theSandiferAction allege certain violations of the securities laws, including, inter alia, that the defendants made certain materially false and misleading statements and omissions regarding the Company’s business, operations, and prospects. On February 2, 2018, theSandifer Action was transferred, on stipulation of the parties, to the United States District Court for the Western District of North Carolina on February 2, 2018, which remains pending. While the Company intends to vigorously defend itself in this litigation, the outcome of these legal proceedings cannot be predicted with certainty.
Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, are in the early stages of the proceedings, and are subject to appeal. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties’ settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above. Based on information currently available, the Company does not believe that any reasonably possible losses arising from the currently pending legal matters described above will be material to the Company’s results of operations or financial condition. However, in light of the inherent uncertainties involved in such matters, an adverse outcome in this litigation could materially adversely affect the Company’s financial condition, results of operations or cash flows in any particular reporting period.
| | | NAV Per Share(1) | | | Sales Price | | | Premium or (Discount) of High Sales Price to NAV(2) | | | Premium or (Discount) of Low Sales Price to NAV(2) | | | Declared Distributions Per Share(3) | | |||||||||||||||||||||
Fiscal Year Ended | | | High | | | Low | | ||||||||||||||||||||||||||||||
December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
First Quarter (through February 27, 2020) | | | | $ | * | | | | | $ | 9.20 | | | | | $ | 7.69 | | | | | | * | | | | | | * | | | | | $ | 0.25 | | |
December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fourth Quarter | | | | $ | 9.14 | | | | | $ | 9.12 | | | | | $ | 8.07 | | | | | | (0.2)% | | | | | | (11.7)% | | | | | $ | 0.25 | | |
Third Quarter | | | | $ | 9.40 | | | | | $ | 9.99 | | | | | $ | 7.34 | | | | | | 6.3% | | | | | | (21.9)% | | | | | $ | 0.25 | | |
Second Quarter | | | | $ | 9.55 | | | | | $ | 9.69 | | | | | $ | 7.97 | | | | | | 1.5% | | | | | | (16.5)% | | | | | $ | 0.25 | | |
First Quarter | | | | $ | 11.61 | | | | | $ | 8.74 | | | | | $ | 6.83 | | | | | | (24.7)% | | | | | | (41.2)% | | | | | $ | 0.25 | | |
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fourth Quarter | | | | $ | 11.88 | | | | | $ | 8.80 | | | | | $ | 6.46 | | | | | | (25.9)% | | | | | | (45.6)% | | | | | $ | 0.25 | | |
Third Quarter | | | | $ | 12.71 | | | | | $ | 9.05 | | | | | $ | 8.29 | | | | | | (28.8)% | | | | | | (34.8)% | | | | | $ | 0.25 | | |
Second Quarter | | | | $ | 13.71 | | | | | $ | 8.60 | | | | | $ | 7.66 | | | | | | (37.3)% | | | | | | (44.1)% | | | | | $ | 0.25 | | |
First Quarter | | | | $ | 13.66 | | | | | $ | 8.15 | | | | | $ | 6.88 | | | | | | (40.3)% | | | | | | (49.6)% | | | | | $ | 0.25 | | |
Fiscal 2017 | NAV(1) | High | Low | Premium or (Discount) of High Sales Price to NAV(2) | Premium or (Discount) of Low Sales Price to NAV(2) | Declared Distributions(3) | ||||||||||||||||||
Fourth Quarter | $ | 13.91 | $ | 10.00 | $ | 7.12 | (28.1 | )% | (48.8 | )% | $ | 0.25 | ||||||||||||
Third Quarter | $ | 14.21 | $ | 13.57 | $ | 8.67 | (4.5 | )% | (39.0 | )% | $ | 0.39 | ||||||||||||
Second Quarter | $ | 14.97 | $ | 14.43 | $ | 12.85 | (3.6 | )% | (14.2 | )% | $ | 0.39 | ||||||||||||
First Quarter | $ | 15.71 | $ | 14.65 | $ | 13.00 | (6.7 | )% | (17.3 | )% | $ | 0.39 |
Fiscal 2016 | NAV(1) | High | Low | Premium or (Discount) of High Sales Price to NAV(2) | Premium or (Discount) of Low Sales Price to NAV(2) | Declared Distributions(3) | ||||||||||||||||||
Fourth Quarter | $ | 15.79 | $ | 13.95 | $ | 11.51 | (11.7 | )% | (27.1 | )% | $ | 0.39 | ||||||||||||
Third Quarter | $ | 15.68 | $ | 15.80 | $ | 12.75 | 0.8 | % | (18.7 | )% | $ | 0.47 | ||||||||||||
Second Quarter | $ | 16.28 | $ | 14.20 | $ | 11.72 | (12.8 | )% | (28.0 | )% | $ | 0.47 | ||||||||||||
First Quarter | $ | 16.29 | $ | 13.18 | $ | 9.54 | (19.1 | )% | (41.4 | )% | $ | 0.47 |
Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low sales prices. |
The last reportednet asset values shown are based on outstanding shares at the end of each period.
asset coverage requirements applicable to us as a BDC under the 1940 Act. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including the possible loss of our qualification as a RIC. We cannot assure stockholders that they will receive any distributions.
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 2, 2019 | | | January 24, 2019 | | | January 30, 2019 | | | | $ | 0.0833 | | |
January 2, 2019 | | | February 20, 2019 | | | February 27, 2019 | | | | | 0.0833 | | |
January 2, 2019 | | | March 21, 2019 | | | March 28, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | April 22, 2019 | | | April 29, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | May 23, 2019 | | | May 30, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | June 20, 2019 | | | June 27, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | July 23, 2019 | | | July 30, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | August 22, 2019 | | | August 29, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | September 20, 2019 | | | September 27, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | October 22, 2019 | | | October 29, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | November 22, 2019 | | | November 29, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | December 23, 2019 | | | December 30, 2019 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2019 | | | | | | | | | | $ | 1.00 | | |
|
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 2, 2018 | | | January 22, 2018 | | | January 30, 2018 | | | | $ | 0.0833 | | |
January 2, 2018 | | | February 20, 2018 | | | February 27, 2018 | | | | | 0.0833 | | |
January 2, 2018 | | | March 23, 2018 | | | March 29, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | April 19, 2018 | | | April 27, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | May 22, 2018 | | | May 30, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | June 20, 2018 | | | June 28, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | July 23, 2018 | | | July 30, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | August 23, 2018 | | | August 30, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | September 20, 2018 | | | September 27, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | October 23, 2018 | | | October 30, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | November 21, 2018 | | | November 29, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | December 20, 2018 | | | December 28, 2018 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2018 | | | | | | | | | | $ | 1.00 | | |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 2, 2018 | January 22, 2018 | January 30, 2018 | $ | 0.0833 | ||||||||
January 2, 2018 | February 20, 2018 | February 27, 2018 | 0.0833 | |||||||||
January 2, 2018 | March 23, 2018 | March 29, 2018 | 0.0833 | |||||||||
Total Distributions Declared for Fiscal 2018 | $ | 0.25 |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 3, 2017 | January 20, 2017 | January 30, 2017 | $ | 0.1300 | ||||||||
January 3, 2017 | February 20, 2017 | February 27, 2017 | 0.1300 | |||||||||
January 3, 2017 | March 23, 2017 | March 30, 2017 | 0.1300 | |||||||||
April 3, 2017 | April 19, 2017 | April 27, 2017 | 0.1300 | |||||||||
April 3, 2017 | May 23, 2017 | May 29, 2017 | 0.1300 | |||||||||
April 3, 2017 | June 21, 2017 | June 29, 2017 | 0.1300 | |||||||||
July 3, 2017 | July 21, 2017 | July 28, 2017 | 0.1300 | |||||||||
July 3, 2017 | August 23, 2017 | August 30, 2017 | 0.1300 | |||||||||
July 3, 2017 | September 20, 2017 | September 28, 2017 | 0.1300 | |||||||||
October 2, 2017 | October 23, 2017 | October 30, 2017 | 0.0833 | |||||||||
October 2, 2017 | November 21, 2017 | November 29, 2017 | 0.0833 | |||||||||
October 2, 2017 | December 20, 2017 | December 28, 2017 | 0.0833 | |||||||||
Total Distributions Declared for Fiscal 2017 | $ | 1.42 |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 4, 2016 | January 22, 2016 | January 28, 2016 | $ | 0.1567 | ||||||||
January 4, 2016 | February 19, 2016 | February 26, 2016 | 0.1567 | |||||||||
January 4, 2016 | March 22, 2016 | March 30, 2016 | 0.1567 | |||||||||
April 1, 2016 | April 22, 2016 | April 28, 2016 | 0.1567 | |||||||||
April 1, 2016 | May 23, 2016 | May 30, 2016 | 0.1567 | |||||||||
April 1, 2016 | June 21, 2016 | June 29, 2016 | 0.1567 | |||||||||
July 1, 2016 | July 22, 2016 | July 29, 2016 | 0.1567 | |||||||||
July 1, 2016 | August 22, 2016 | August 30, 2016 | 0.1567 | |||||||||
July 1, 2016 | September 22, 2016 | September 29, 2016 | 0.1567 | |||||||||
September 22, 2016 | October 21, 2016 | October 28, 2016 | 0.1300 | |||||||||
September 22, 2016 | November 21, 2016 | November 29, 2016 | 0.1300 | |||||||||
September 22, 2016 | December 21, 2016 | December 29, 2016 | 0.1300 | |||||||||
Total Distributions Declared for Fiscal 2016 | $ | 1.80 |
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 3, 2017 | | | January 20, 2017 | | | January 30, 2017 | | | | $ | 0.1300 | | |
January 3, 2017 | | | February 20, 2017 | | | February 27, 2017 | | | | | 0.1300 | | |
January 3, 2017 | | | March 23, 2017 | | | March 30, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | April 19, 2017 | | | April 27, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | May 23, 2017 | | | May 29, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | June 21, 2017 | | | June 29, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | July 21, 2017 | | | July 28, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | August 23, 2017 | | | August 30, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | September 20, 2017 | | | September 28, 2017 | | | | | 0.1300 | | |
October 2, 2017 | | | October 23, 2017 | | | October 30, 2017 | | | | | 0.0833 | | |
October 2, 2017 | | | November 21, 2017 | | | November 29, 2017 | | | | | 0.0833 | | |
October 2, 2017 | | | December 20, 2017 | | | December 28, 2017 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2017 | | | | | | | | | | $ | 1.42 | | |
| Stockholder transaction expenses: | | | | | | | |
| Sales load (as a percentage of offering price) | | | | | N/A(1) | | |
| Offering expenses borne by us (as a percentage of offering price) | | | | | N/A(2) | | |
| Dividend reinvestment plan fees (per sales transaction fee) | | | | $ | 15.00(3) | | |
| Total stockholder transaction expenses (as a percentage of offering price) | | | | | —% | | |
| Annual expenses (as a percentage of net assets attributable to common stock): | | | | | | | |
| Base management fee | | | | | 4.79%(4) | | |
| Incentive fees payable from Net Investment Income | | | | | 0.90%(5) | | |
| Incentive fee payable from Capital Gains | | | | | —%(5) | | |
| Interest payments on borrowed funds | | | | | 8.43%(6) | | |
| Other expenses | | | | | 3.20%(7) | | |
| Acquired funds fees and expenses | | | | | 0.14%(8) | | |
| Total annual expenses | | | | | 17.46%(9) | | |
| | | 1 Year | | | 3 Years | | | 5 Years | | | 10 Years | | ||||||||||||
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return | | | | $ | 166 | | | | | $ | 442 | | | | | $ | 658 | | | | | $ | 1,013 | | |
| | | 1 Year | | | 3 Years | | | 5 Years | | | 10 Years | | ||||||||||||
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return | | | | $ | 176 | | | | | $ | 464 | | | | | $ | 684 | | | | | $ | 1,033 | | |
| | | As of and for the years ended December 31, | | |||||||||||||||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||
Consolidated statements of operations data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total investment income | | | | $ | 44,035 | | | | | $ | 47,293 | | | | | $ | 51,089 | | | | | $ | 68,312 | | | | | $ | 63,976 | | |
Total expenses, net of fee waivers | | | | | 30,992 | | | | | | 31,271 | | | | | | 35,565 | | | | | | 39,272 | | | | | | 38,649 | | |
Net investment income | | | | | 13,043 | | | | | | 16,022 | | | | | | 15,524 | | | | | | 29,040 | | | | | | 25,327 | | |
Net realized (loss) gain from investments | | | | | (19,756) | | | | | | (34,804) | | | | | | (24,189) | | | | | | (22,766) | | | | | | 5,436 | | |
Net unrealized appreciation (depreciation) on investments and written call option | | | | | (20,306) | | | | | | 840 | | | | | | 2,970 | | | | | | 2,878 | | | | | | (16,913) | | |
Tax (provision) benefit | | | | | (628) | | | | | | 1,916 | | | | | | (1,289) | | | | | | — | | | | | | — | | |
Net (decrease) increase in net assets resulting from operations | | | | $ | (27,647) | | | | | $ | (16,026) | | | | | $ | (6,984) | | | | | $ | 9,152 | | | | | $ | 13,850 | | |
Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | $ | 0.81 | | | | | $ | 1.00 | | | | | $ | 0.98 | | | | | $ | 1.84 | | | | | $ | 1.67 | | |
Net (decrease) increase in net assets resulting from operations | | | | $ | (1.72) | | | | | $ | (1.00) | | | | | $ | (0.44) | | | | | $ | 0.58 | | | | | $ | 0.91 | | |
Distributions declared | | | | $ | 1.00 | | | | | $ | 1.00 | | | | | $ | 1.42 | | | | | $ | 1.80 | | | | | $ | 2.38 | | |
Net asset value per share | | | | $ | 9.14 | | | | | $ | 11.88 | | | | | $ | 13.91 | | | | | $ | 15.79 | | | | | $ | 17.04 | | |
Consolidated statements of assets and liabilities data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets | | | | $ | 427,337 | | | | | $ | 493,165 | | | | | $ | 534,595 | | | | | $ | 584,415 | | | | | $ | 632,818 | | |
Total net assets | | | | $ | 148,113 | | | | | $ | 190,644 | | | | | $ | 221,887 | | | | | $ | 250,582 | | | | | $ | 268,802 | | |
Other data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total return(1) | | | | | 37.75% | | | | | | 12.14% | | | | | | (35.68)% | | | | | | 24.07% | | | | | | (20.43)% | | |
Number of portfolio company investments at year end | | | | | 43 | | | | | | 44 | | | | | | 47 | | | | | | 53 | | | | | | 57 | | |
Total portfolio investments for the year | | | | $ | 77,831 | | | | | $ | 107,802 | | | | | $ | 82,750 | | | | | $ | 120,844 | | | | | $ | 260,640 | | |
Investment repayments for the year | | | | $ | 128,122 | | | | | $ | 123,517 | | | | | $ | 115,810 | | | | | $ | 163,564 | | | | | $ | 142,713 | | |
As of and for the years ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Consolidated statements of operations data: | ||||||||||||||||||||
Total investment income | $ | 51,089 | $ | 68,312 | $ | 63,976 | $ | 49,528 | $ | 35,433 | ||||||||||
Total expenses, net of fee waivers | 35,565 | 39,272 | 38,649 | 29,562 | 15,949 | |||||||||||||||
Net investment income | 15,524 | 29,040 | 25,327 | 19,966 | 19,484 | |||||||||||||||
Net realized gain (loss) from investments | (24,189 | ) | (22,766 | ) | 5,436 | 832 | 2,187 | |||||||||||||
Net unrealized appreciation (depreciation) on investments and written call option | 2,970 | 2,878 | (16,913 | ) | (24,238 | ) | 7,187 | |||||||||||||
Tax provision | (1,289 | ) | — | — | — | — | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (6,984 | ) | $ | 9,152 | $ | 13,850 | $ | (3,440 | ) | $ | 28,858 | ||||||||
Per share data: | ||||||||||||||||||||
Net investment income | $ | 0.98 | $ | 1.84 | $ | 1.67 | $ | 1.54 | $ | 1.50 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (0.44 | ) | $ | 0.58 | $ | 0.91 | $ | (0.27 | ) | $ | 2.22 | ||||||||
Distributions declared | $ | 1.42 | $ | 1.80 | $ | 2.38 | $ | 1.88 | $ | 0.47 | ||||||||||
Net asset value per share | $ | 13.91 | $ | 15.79 | $ | 17.04 | $ | 18.56 | $ | 20.71 | ||||||||||
Consolidated statements of assets and liabilities data: | ||||||||||||||||||||
Total assets | $ | 534,595 | $ | 584,415 | $ | 632,818 | $ | 539,864 | $ | 476,428 | ||||||||||
Total net assets | $ | 221,887 | $ | 250,582 | $ | 268,802 | $ | 240,837 | $ | 268,670 | ||||||||||
Other data: | ||||||||||||||||||||
Total Return(1)(2) | (35.68 | )% | 24.07 | % | (20.43 | )% | (0.85 | )% | 1.88 | % | ||||||||||
Number of portfolio company investments at year end | 47 | 53 | 57 | 52 | 41 | |||||||||||||||
Total portfolio investment deployments for the year | $ | 82,750 | $ | 120,844 | $ | 260,640 | $ | 216,276 | $ | 110,929 | ||||||||||
Investment repayments for the year | $ | 115,810 | $ | 163,564 | $ | 142,713 | $ | 80,197 | $ | 52,755 |
statement in this Annual Report on Form 10-K should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in “Risk Factors” and elsewhere in our Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report on Form 10-K. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law or U.S. Securities and Exchange Commission (“SEC”) rule or regulation.
securities issued by lower middle-market companies and traditional middle-market companies.
of the sale of 4,000,000 shares of the Company’s common stock at a price of $20.00 per share resulting in net proceeds to the Company of $74.25 million, after deducting underwriting fees and commissions totaling $4.0 million and offering expenses totaling $1.75 million. The other costs of the IPO were borne by the limited partners of the Legacy Funds.
During the fourth quarter of 2017, Florida Sidecar transferred all of its assets to the Company and was legally dissolved as a standalone partnership. On March 1, 2019, Fund II repaid its outstanding SBA debentures and relinquished its SBIC license.
During Fund II, our subsidiary, was licensed under the fourth quarter of 2017, Florida Sidecar transferred all of its assetsSBIC Act until March 1, 2019 and has elected to Capitala Finance Corp. and was legally dissolvedbe regulated as a standalone partnership.
BDC under the 1940 Act.
subsidiaries.
Our primary operating expenses include the payment of investment advisory fees to our Investment Advisor, our allocable portion of overhead and other expenses incurred by our Administrator in performing its obligations under an administration agreement between us and the Administrator (the “Administration Agreement”) and other operating expenses as detailed below. Our investment advisory fee will compensate our Investment Advisor for its work in identifying, evaluating, negotiating, closing, monitoring and servicing our investments. We will bear all other expenses of our operations and transactions, including (without limitation):
Because of the nature of the judgments and assumptions we make, actual results could materially differ from those estimates under different assumptions or conditions. A discussion of our critical accounting policies follows.
In estimating the fair value of portfolio investments, the Company starts with the cost basis of the investment, which includes original issue discount and payment-in-kind (“PIK”) income, if any. The transaction price is typically the best estimate of fair value at inception. When evidence supports a subsequent change to the carrying value from the original transaction price, adjustments are made to reflect the expected fair values.
The enterprise value waterfall approach is primarily utilized to value the Company’s equity securities, including warrants. However, the Company may utilize the enterprise value waterfall approach to value certain debt securities.
Non-accrual investments:Management reviews all loans that become 90 days or more past due, or when there is reasonable doubt that principal or interest will be collected, for possible placement on non-accrual status. When the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the loan on non-accrual status and will generally cease recognizing interest income and PIK interest on that loan for financial reporting purposes. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. The Company writes off any previously accrued and uncollected cash interest when it is determined that interest is no longer considered collectible. The Company may elect to cease accruing PIK interest and continue accruing interest income in cases where a loan is currently paying its interest income but, in management’s judgment, there is a reasonable likelihood of principal loss on the loan. Non-accrualNon- accrual loans are returned to accrual status when the borrower’s financial condition improves such that management believes current interest and principal payments are expected to be collected.
for excise tax purposes, the Company accrues excise tax, if any, on estimated excess taxable income as taxable income is earned. Since the Company’s IPO, the Company has not accrued or paid excise tax.
$3.2 million and $0.4 million, respectively. During the years ended December 31, 2019 and December 31, 2018, the Company recognized an increase in the valuation allowance of $2.8 million and $0.0 million, respectively.
The tax years ended August 31, 2017, 2016 and 2015 remain subject to examination by U.S. federal, state, and local tax authorities. No interest expense or penalties have been assessed for the years ended December 31, 2017, 2016 and 2015. If the Company was required to recognize interest and penalties, if any, related to unrecognized tax benefits this would be recognized as income tax expense in the consolidated statements of operations.
approximately $33.0$50.3 million for the year. During the year ended December 31, 2016,2018, we made approximately $120.8$107.8 million of investments and had approximately $163.6$123.5 million in repayments and sales resulting in net repayments and sales of approximately $42.8$15.7 million for the year. During the year ended December 31, 2015, we made approximately $260.6 million of investments and had approximately $142.7 million in repayments and sales resulting in net investments of approximately $117.9 million for the year.
$1.5 million.
As of December 31, 2017,2019, our debt investment portfolio, which represented 75.5%78.6% of the fair value of our total portfolio, had a weighted average annualized yield of approximately 12.8%, exclusive of the impact of our non-accrual debt investments.11.5%. As of December 31, 2017, 51.7%2019,
The following table summarizes the amortized cost and the fair value of investments and cash and cash equivalents as of December 31, 20172019 (dollars in thousands):
| | | Investments at Amortized Cost | | | Percentage of Total | | | Investments at Fair Value | | | Percentage of Total | | ||||||||||||
First Lien Debt | | | | $ | 235,646 | | | | | | 66.6% | | | | | $ | 231,203 | | | | | | 63.8% | | |
Second Lien Debt | | | | | 17,553 | | | | | | 5.0 | | | | | | 17,287 | | | | | | 4.7 | | |
Subordinated Debt | | | | | 36,526 | | | | | | 10.3 | | | | | | 36,570 | | | | | | 10.1 | | |
Equity and Warrants | | | | | 50,556 | | | | | | 14.3 | | | | | | 63,841 | | | | | | 17.6 | | |
Capitala Senior Loan Fund II, LLC | | | | | 13,600 | | | | | | 3.8 | | | | | | 13,631 | | | | | | 3.8 | | |
Total | | | | $ | 353,881 | | | | | | 100.0% | | | | | $ | 362,532 | | | | | | 100.0% | | |
Investments at Amortized Cost | Percentage of Total | Investments at Fair Value | Percentage of Total | |||||||||||||
First Lien Debt | $ | 257,147 | 51.8 | % | $ | 243,489 | 45.8 | % | ||||||||
Second Lien Debt | 32,465 | 6.6 | 30,794 | 5.8 | ||||||||||||
Subordinated Debt | 120,235 | 24.2 | 103,385 | 19.5 | ||||||||||||
Equity and Warrants | 55,180 | 11.1 | 122,271 | 23.0 | ||||||||||||
Cash and Cash Equivalents | 31,221 | 6.3 | 31,221 | 5.9 | ||||||||||||
Total | $ | 496,248 | 100.0 | % | $ | 531,160 | 100.0 | % |
The following table summarizes the amortized cost and the fair value of investments and cash and cash equivalents as of December 31, 20162018 (dollars in thousands):
| | | Investments at Amortized Cost | | | Percentage of Total | | | Investments at Fair Value | | | Percentage of Total | | ||||||||||||
First Lien Debt | | | | $ | 252,174 | | | | | | 60.0% | | | | | $ | 237,570 | | | | | | 52.9% | | |
Second Lien Debt | | | | | 33,040 | | | | | | 7.9 | | | | | | 32,495 | | | | | | 7.2 | | |
Subordinated Debt | | | | | 72,562 | | | | | | 17.3 | | | | | | 73,113 | | | | | | 16.3 | | |
Equity and Warrants | | | | | 48,594 | | | | | | 11.6 | | | | | | 92,054 | | | | | | 20.5 | | |
Capitala Senior Loan Fund II, LLC | | | | | 13,600 | | | | | | 3.2 | | | | | | 13,695 | | | | | | 3.1 | | |
Total | | | | $ | 419,970 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
|
Investments at Amortized Cost | Percentage of Total | Investments at Fair Value | Percentage of Total | |||||||||||||
First Lien Debt | $ | 244,647 | 44.5 | % | $ | 226,578 | 39.2 | % | ||||||||
Second Lien Debt | 74,559 | 13.5 | 71,483 | 12.3 | ||||||||||||
Subordinated Debt | 148,849 | 27.1 | 150,232 | 26.0 | ||||||||||||
Equity and Warrants | 45,721 | 8.3 | 93,346 | 16.2 | ||||||||||||
Cash and Cash Equivalents | 36,281 | 6.6 | 36,281 | 6.3 | ||||||||||||
Total | $ | 550,057 | 100.0 | % | $ | 577,920 | 100.0 | % |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||||||||||||||
| | | Investments at Fair Value | | | Percentage of Total Portfolio | | | Investments at Fair Value | | | Percentage of Total Portfolio | | ||||||||||||
Business Services | | | | $ | 40,410 | | | | | | 11.2% | | | | | $ | 57,946 | | | | | | 12.9% | | |
Financial Services | | | | | 29,517 | | | | | | 8.1 | | | | | | 21,666 | | | | | | 4.8 | | |
Healthcare | | | | | 27,928 | | | | | | 7.7 | | | | | | 16,972 | | | | | | 3.8 | | |
Consumer Products | | | | | 25,118 | | | | | | 6.9 | | | | | | 27,746 | | | | | | 6.2 | | |
Sales & Marketing Services | | | | | 19,291 | | | | | | 5.3 | | | | | | 19,496 | | | | | | 4.3 | | |
Food Product Manufacturer | | | | | 17,609 | | | | | | 4.9 | | | | | | 17,335 | | | | | | 3.9 | | |
Security System Services | | | | | 16,063 | | | | | | 4.4 | | | | | | — | | | | | | — | | |
Automobile Part Manufacturer | | | | | 15,056 | | | | | | 4.2 | | | | | | 14,384 | | | | | | 3.2 | | |
IT Consulting | | | | | 13,773 | | | | | | 3.8 | | | | | | 15,233 | | | | | | 3.4 | | |
Investment Funds | | | | | 13,631 | | | | | | 3.8 | | | | | | 13,695 | | | | | | 3.0 | | |
Multi-platform media and consumer products | | | | | 13,000 | | | | | | 3.6 | | | | | | 13,000 | | | | | | 2.9 | | |
Healthcare Management | | | | | 12,607 | | | | | | 3.5 | | | | | | 13,792 | | | | | | 3.1 | | |
Textile Equipment Manufacturer | | | | | 11,564 | | | | | | 3.2 | | | | | | 12,848 | | | | | | 2.8 | | |
Government Services | | | | | 11,279 | | | | | | 3.1 | | | | | | 12,109 | | | | | | 2.7 | | |
Entertainment | | | | | 10,912 | | | | | | 3.0 | | | | | | — | | | | | | — | | |
Retail | | | | | 10,045 | | | | | | 2.8 | | | | | | 14,979 | | | | | | 3.3 | | |
Information Technology | | | | | 10,009 | | | | | | 2.8 | | | | | | 25,232 | | | | | | 5.6 | | |
Testing laboratories | | | | | 7,026 | | | | | | 1.9 | | | | | | 7,503 | | | | | | 1.7 | | |
Wireless Deployment Services | | | | | 7,000 | | | | | | 1.9 | | | | | | — | | | | | | — | | |
Electronic Machine Repair | | | | | 6,100 | | | | | | 1.7 | | | | | | 6,432 | | | | | | 1.4 | | |
Oil & Gas Engineering and Consulting Services | | | | | 5,908 | | | | | | 1.6 | | | | | | 6,854 | | | | | | 1.5 | | |
Medical Device Distributor | | | | | 4,904 | | | | | | 1.4 | | | | | | 4,797 | | | | | | 1.1 | | |
Data Services | | | | | 4,749 | | | | | | 1.3 | | | | | | — | | | | | | — | | |
Restaurant | | | | | 4,697 | | | | | | 1.3 | | | | | | 4,903 | | | | | | 1.1 | | |
Advertising & Marketing Services | | | | | 4,262 | | | | | | 1.2 | | | | | | 8,712 | | | | | | 1.9 | | |
Footwear Retail | | | | | 3,326 | | | | | | 0.9 | | | | | | 3,184 | | | | | | 0.7 | | |
Logistics | | | | | 2,924 | | | | | | 0.8 | | | | | | 2,984 | | | | | | 0.7 | | |
Online Merchandise Retailer | | | | | 2,877 | | | | | | 0.8 | | | | | | 3,499 | | | | | | 0.8 | | |
Home Repair Parts Manufacturer | | | | | 2,489 | | | | | | 0.7 | | | | | | 1,722 | | | | | | 0.4 | | |
Oil & Gas Services | | | | | 2,273 | | | | | | 0.6 | | | | | | 9,861 | | | | | | 2.2 | | |
QSR Franchisor | | | | | 1,881 | | | | | | 0.5 | | | | | | 3,018 | | | | | | 0.7 | | |
Computer Supply Retail | | | | | 1,490 | | | | | | 0.4 | | | | | | 10,597 | | | | | | 2.4 | | |
General Industrial | | | | | 838 | | | | | | 0.2 | | | | | | — | | | | | | — | | |
Household Product Manufacturer | | | | | 758 | | | | | | 0.2 | | | | | | 758 | | | | | | 0.2 | | |
Data Processing & Digital Marketing | | | | | 708 | | | | | | 0.2 | | | | | | 742 | | | | | | 0.2 | | |
Professional and Personal Digital Imaging | | | | | 510 | | | | | | 0.1 | | | | | | 6,674 | | | | | | 1.5 | | |
Telecommunications | | | | | — | | | | | | — | | | | | | 18,000 | | | | | | 4.0 | | |
Industrial Equipment Rental | | | | | — | | | | | | — | | | | | | 16,327 | | | | | | 3.6 | | |
Building Products | | | | | — | | | | | | — | | | | | | 14,833 | | | | | | 3.3 | | |
Conglomerate | | | | | — | | | | | | — | | | | | | 9,004 | | | | | | 2.0 | | |
Produce Distribution | | | | | — | | | | | | — | | | | | | 6,210 | | | | | | 1.4 | | |
Farming | | | | | — | | | | | | — | | | | | | 5,880 | | | | | | 1.3 | | |
Total | | | | $ | 362,532 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
|
December 31, 2017 | December 31, 2016 | |||||||||||||||
Investments at Fair Value | Percentage of Total Portfolio | Investments at Fair Value | Percentage of Total Portfolio | |||||||||||||
Business Services | $ | 70,122 | 14.0 | % | $ | 51,731 | 9.5 | % | ||||||||
Consumer Products | 29,612 | 5.9 | 30,209 | 5.6 | ||||||||||||
Oil & Gas Services | 27,774 | 5.6 | 15,083 | 2.8 | ||||||||||||
Financial Services | 26,920 | 5.4 | 25,553 | 4.7 | ||||||||||||
Information Technology | 24,761 | 5.0 | 24,232 | 4.5 | ||||||||||||
Healthcare | 21,368 | 4.3 | 8,582 | 1.6 | ||||||||||||
Specialty Retail | 20,713 | 4.1 | 22,067 | 4.1 | ||||||||||||
Building Products | 17,879 | 3.6 | 18,152 | 3.3 | ||||||||||||
Footwear Retail | 17,748 | 3.6 | 19,236 | 3.5 | ||||||||||||
Sales & Marketing Services | 17,388 | 3.5 | 16,376 | 3.0 | ||||||||||||
Food Product Manufacturer | 16,222 | 3.2 | 16,599 | 3.1 | ||||||||||||
Industrial Equipment Rental | 15,603 | 3.1 | 10,755 | 2.0 | ||||||||||||
Retail | 15,000 | 3.0 | 15,000 | 2.8 | ||||||||||||
Computer Supply Retail | 12,551 | 2.5 | 12,183 | 2.2 | ||||||||||||
Textile Equipment Manufacturer | 12,505 | 2.5 | 13,134 | 2.4 | ||||||||||||
IT Consulting | 12,231 | 2.4 | — | — | ||||||||||||
Fuel Transportation Services | 11,588 | 2.3 | 10,303 | 1.9 | ||||||||||||
Transportation | 11,560 | 2.3 | 16,856 | 3.1 | ||||||||||||
Government Services | 10,320 | 2.1 | — | — | ||||||||||||
Automobile Part Manufacturer | 9,285 | 1.9 | 10,076 | 1.9 | ||||||||||||
Healthcare Management | 9,014 | 1.8 | 10,851 | 2.0 | ||||||||||||
Professional and Personal Digital Imaging | 8,810 | 1.8 | 9,000 | 1.7 | ||||||||||||
Refrigeration/HVAC Services | 8,736 | 1.7 | — | — |
December 31, 2017 | December 31, 2016 | |||||||||||||||
Investments at Fair Value | Percentage of Total Portfolio | Investments at Fair Value | Percentage of Total Portfolio | |||||||||||||
Oil & Gas Engineering and Consulting Services | $ | 8,528 | 1.7 | % | $ | 4,500 | 0.8 | % | ||||||||
QSR Franchisor | 7,650 | 1.5 | 8,497 | 1.6 | ||||||||||||
Conglomerate | 7,645 | 1.5 | 8,374 | 1.5 | ||||||||||||
Bowling Products | 7,186 | 1.4 | 12,503 | 2.3 | ||||||||||||
Produce Distribution | 6,170 | 1.2 | 6,182 | 1.1 | ||||||||||||
Farming | 5,581 | 1.1 | 11,779 | 2.2 | ||||||||||||
Advertising & Marketing Services | 5,157 | 1.0 | 3,910 | 0.7 | ||||||||||||
Restaurant | 4,880 | 1.0 | 4,857 | 0.9 | ||||||||||||
Medical Device Distributor | 4,713 | 0.9 | 25,768 | 4.8 | ||||||||||||
Online Merchandise Retailer | 3,755 | 0.8 | 4,169 | 0.8 | ||||||||||||
Consumer Electronics | 3,498 | 0.7 | 20,818 | 3.8 | ||||||||||||
Home Repair Parts Manufacturer | 2,767 | 0.6 | 1,408 | 0.3 | ||||||||||||
Replacement Window Manufacturer | 1,880 | 0.4 | 2,571 | 0.5 | ||||||||||||
Household Product Manufacturer | 1,316 | 0.3 | 1,001 | 0.2 | ||||||||||||
Data Processing & Digital Marketing | 1,035 | 0.2 | 1,015 | 0.2 | ||||||||||||
In-Home Healthcare Services | 174 | 0.1 | 446 | 0.1 | ||||||||||||
Automotive Chemicals & Lubricants | 101 | 0.0 | 2,230 | 0.4 | ||||||||||||
Retail Display & Security Services | 100 | 0.0 | 537 | 0.1 | ||||||||||||
Dental Practice Management | 93 | 0.0 | 109 | 0.0 | ||||||||||||
Home Décor Manufacturer | — | — | 14,670 | 2.7 | ||||||||||||
Printing Services | — | — | 12,761 | 2.4 | ||||||||||||
Bakery Supplies Distributor | — | — | 10,776 | 2.0 | ||||||||||||
Construction Services | — | — | 9,500 | 1.7 | ||||||||||||
Specialty Clothing | — | — | 5,011 | 0.9 | ||||||||||||
Satellite Communications | — | — | 5,000 | 0.9 | ||||||||||||
Industrial Specialty Services | — | — | 4,750 | 0.9 | ||||||||||||
Specialty Defense Contractor | — | — | 1,532 | 0.3 | ||||||||||||
Entertainment | — | — | 987 | 0.2 | ||||||||||||
Total | $ | 499,939 | 100.0 | % | $ | 541,639 | 100.0 | % |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||||||||||||||
| | | Investments at Fair Value | | | Percentage of Total Portfolio | | | Investments at Fair Value | | | Percentage of Total Portfolio | | ||||||||||||
South | | | | $ | 165,963 | | | | | | 45.8% | | | | | $ | 224,856 | | | | | | 50.1% | | |
Northeast | | | | | 71,184 | | | | | | 19.6 | | | | | | 66,303 | | | | | | 14.8 | | |
West | | | | | 70,102 | | | | | | 19.3 | | | | | | 77,353 | | | | | | 17.2 | | |
Midwest | | | | | 55,283 | | | | | | 15.3 | | | | | | 77,537 | | | | | | 17.3 | | |
International | | | | | — | | | | | | — | | | | | | 2,878 | | | | | | 0.6 | | |
Total | | | | $ | 362,532 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
At December 31, 2017 | At December 31, 2016 | |||||||||||||||
Investments at Fair Value | Percentage of Total Portfolio | Investments at Fair Value | Percentage of Total Portfolio | |||||||||||||
South | $ | 254,829 | 51.0 | % | $ | 257,162 | 47.5 | % | ||||||||
West | 107,835 | 21.5 | 85,642 | 15.8 | ||||||||||||
Midwest | 84,832 | 17.0 | 118,682 | 21.9 | ||||||||||||
Northeast | 44,428 | 8.9 | 68,613 | 12.7 | ||||||||||||
International | 8,015 | 1.6 | 11,540 | 2.1 | ||||||||||||
Total | $ | 499,939 | 100.0 | % | $ | 541,639 | 100.0 | % |
In addition to various risk management tools, our Investment Advisor uses an investment rating system to characterize and monitor our expected level of return on each investment in our portfolio.
As part of our valuation procedures, we risk rate all of our investments. In general, our investment rating system uses a scale of 1 to 5, with 1 being the lowest probability of default and principal loss. Our internal rating is not an exact system, but it is used internally to estimate the probability of: (i) default on our debt securities and (ii) loss of our debt principal, in the event of a default. In general, our internal rating system may also assist our valuation team in its determination of the estimated fair value of equity securities or equity-like securities. Our internal risk rating system generally encompasses both qualitative and quantitative aspects of our portfolio companies.
Investment Rating | | | Definition | | |
| 1 | | | In general, the investment may be performing above our internal expectations. Full return of principal and interest is expected. Capital gain is expected. | |
| 2 | | | In general, the investment may be performing within our internal expectations, and potential risks to the applicable investment are considered to be neutral or favorable compared to any potential risks at the time of the original investment. All new investments are initially given this rating. | |
| 3 | | | In general, the investment may be performing below our internal expectations and therefore, investments in this category may require closer internal monitoring; however, the valuation team believes that no loss of investment return (interest and/or dividends) or principal is expected. The investment also may be out of compliance with certain financial covenants. | |
| 4 | | | In general, the investment may be performing below internal expectations and quantitative or qualitative risks may have increased substantially since the original investment. Loss of some or all principal is expected. | |
| 5 | | | In general, the investment may be performing substantially below our internal expectations and a number of quantitative or qualitative risks may have increased substantially since the original investment. Loss of some or all principal is expected. | |
| | | As of December 31, 2019 | | | As of December 31, 2018 | | ||||||||||||||||||
Investment Rating | | | Investments at Fair Value | | | Percentage of Total Investments | | | Investments at Fair Value | | | Percentage of Total Investments | | ||||||||||||
1 | | | | $ | 85,688 | | | | | | 23.6% | | | | | $ | 171,829 | | | | | | 38.3% | | |
2 | | | | | 219,855 | | | | | | 60.7 | | | | | | 194,411 | | | | | | 43.3 | | |
3 | | | | | 56,989 | | | | | | 15.7 | | | | | | 73,325 | | | | | | 16.3 | | |
4 | | | | | — | | | | | | — | | | | | | 9,362 | | | | | | 2.1 | | |
5 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 362,532 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
As of December 31, 2017 | As of December 31, 2016 | |||||||||||||||
Investment Rating | Investments at Fair Value | Percentage of Total Investments | Investments at Fair Value | Percentage of Total Investments | ||||||||||||
1 | $ | 191,204 | 38.2 | % | $ | 183,826 | 33.9 | % | ||||||||
2 | 186,445 | 37.3 | 215,058 | 39.7 | ||||||||||||
3 | 97,309 | 19.5 | 125,381 | 23.2 | ||||||||||||
4 | 24,981 | 5.0 | 17,374 | 3.2 | ||||||||||||
5 | — | — | — | — | ||||||||||||
Total | $ | 499,939 | 100.0 | % | $ | 541,639 | 100.0 | % |
As of December 31, 2017,2019, we had no investments on non-accrual status. As of December 31, 2018, we had two debt investments in four portfolio companies on non-accrual status with an aggregate amortized cost of $50.1$20.7 million and aan aggregate fair value of $25.0$9.4 million, which represented 10.8%4.9% and 5.0%2.1% of the investment portfolio, respectively. As of December 31, 2016, we had debt investments in three portfolio companies on non-accrual status with amortized cost of $29.5 million and a fair value of $17.4 million, which represented 5.7% and 3.2% of the investment portfolio, respectively.
Because the TRS was wound down in a prior period, only comparative period disclosures are included herein. For the years ended December 31, 2016 and December 31, 2015, the Company received $1.8had $5.0 million and $0.9$20.0 million respectively, in dividend income from its equity interest in CSLLF.of unfunded commitments related to the
On March 27, 2015, CSLLF entered into a TRS with Bank of America, N.A. (“Bank of America”) that was indexed to a basket of senior secured loans purchased by CSLLF. CSLLF obtained the economic benefit of the loans underlying the TRS, including the net interest spread between the interest income generated by the underlying loans and the interest expense type payment under the TRS, the realized gain (loss) on liquidated loans, and the unrealized appreciation (depreciation) on the underlying loans.
The terms of the TRS were governed by an ISDA 2002 Master Agreement, the Schedule thereto, and Credit Support Annex to such Schedule, and the confirmation exchanged thereunder, between CSLLF and Bank of America, which collectively established the TRS, and are collectively referred to hereinCSLF II’s portfolio as the “TRS Agreement.” Pursuant to the terms of the TRS Agreement, CSLLF selected a portfolio of loans with a maximum market value (determined at the time each such loan becomes subject to the TRS) of $100.0 million, which was also referred to as the maximum notional amount of the TRS. Each individual loan, and the portfolio of loans taken as a whole, had to meet criteria described in the TRS Agreement. CSLLF received from Bank of America a periodic payment on set dates that was based upon any coupons, both earned and accrued, generated by the loans underlying the TRS, subject to limitations described in the TRS Agreement as well as any fees associated with the loans included in the portfolio. CSLLF paid to Bank of America interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) plus 1.25% per annum; the LIBOR option paid by CSLLF was determined on an asset by asset basis such that the tenor of the LIBOR option (1 month, 3 month, etc.) matched the tenor of the underlying reference asset. In addition, upon the termination of any loan subject to the TRS or any repayment of the underlying reference asset, CSLLF either received from Bank of America the appreciation in the value of such loan, or paid to Bank of America any depreciation in the value of such loan.
CSLLF was required to pay an unused facility fee of 1.25% on any amount of unused facility under the minimum facility amount of $70.0 million as outlined in the TRS Agreement. Such unused facility fees were not applied during the first 4 months and last 60 days of the term of the TRS. CSLLF also agreed to pay Bank of America customary fees and expenses in connection with the establishment and maintenance of the TRS.
CSLLF was required to initially cash collateralize a specified percentage of each loan (generally 20% to 35% of the market value of senior secured loans) included under the TRS in accordance with margin requirements described in the TRS Agreement. As of December 31, 2016, CSLLF had posted $0.02019 and 2018 (dollars in thousands):
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
First lien loans(1) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Weighted average current interest rate on first lien loans | | | | | 6.4% | | | | | | 7.6% | | |
Number of portfolio companies | | | | | 5 | | | | | | 2 | | |
Largest portfolio company investment(1) | | | | $ | 7,443 | | | | | $ | 5,550 | | |
Total of five largest portfolio company investments(1)(2) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Portfolio Company | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | |||||||||
Investments at Fair Value | | | | | | | |||||||||||||||||||
Freedom Electronics, LLC | | | Electronics | | | First Lien Debt (7.0% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23) | | | | $ | 5,445 | | | | | $ | 5,445 | | | | | $ | 5,445 | | |
Installs, LLC | | | Logistics | | | First Lien Debt (5.8% Cash (1 month LIBOR + 4.0%, 1.8% Floor), Due 6/20/23) | | | | | 7,443 | | | | | | 7,443 | | | | | | 7,443 | | |
RAM Payment, LLC | | | Financial Services | | | First Lien Debt (6.7% Cash (1 month LIBOR + 5.0%, 1.5% Floor), Due 1/4/24) | | | | | 6,653 | | | | | | 6,653 | | | | | | 6,653 | | |
Rapid Fire Protection, Inc.(1) | | | Security System Services | | | First Lien Debt (5.5% Cash (1 month LIBOR + 3.8%, 1.8% Floor), Due 11/22/24) | | | | | 4,400 | | | | | | 4,400 | | | | | | 4,400 | | |
U.S. BioTek Laboratories, LLC | | | Testing Laboratories | | | First Lien Debt (7.0% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23) | | | | | 4,455 | | | | | | 4,455 | | | | | | 4,455 | | |
TOTAL INVESTMENTS | | | | | | | | | | $ | 28,396 | | | | | $ | 28,396 | | | | | $ | 28,396 | | |
Portfolio Company | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | |||||||||
Investments at Fair Value | | | | | | | |||||||||||||||||||
Freedom Electronics, LLC | | | Electronics | | | First Lien Debt (7.5% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23) | | | | $ | 5,500 | | | | | $ | 5,500 | | | | | $ | 5,500 | | |
U.S. BioTek Laboratories, LLC | | | Testing Laboratories | | | First Lien Debt (7.8% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23) | | | | | 4,500 | | | | | | 4,500 | | | | | | 4,500 | | |
TOTAL INVESTMENTS | | | | | | | | | | $ | 10,000 | | | | | $ | 10,000 | | | | | $ | 10,000 | | |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
ASSETS | | | | | | | | | | | | | |
Investments at fair value (amortized cost of $28,396 and $10,000, respectively) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Cash and cash equivalents | | | | | 704 | | | | | | 7,100 | | |
Interest receivable | | | | | 151 | | | | | | 31 | | |
Other assets | | | | | 7 | | | | | | — | | |
Total assets | | | | $ | 29,258 | | | | | $ | 17,131 | | |
LIABILITIES | | | | | | | | | | | | | |
Credit facility (net of deferred financing costs of $621 and $0, respectively) | | | | $ | 12,079 | | | | | $ | — | | |
Interest and financing fees payable | | | | | 113 | | | | | | — | | |
Accounts payable | | | | | 27 | | | | | | 12 | | |
Total liabilities | | | | $ | 12,219 | | | | | $ | 12 | | |
NET ASSETS | | | | | | | | | | | | | |
Members’ capital | | | | $ | 17,039 | | | | | $ | 17,119 | | |
Total net assets | | | | $ | 17,039 | | | | | $ | 17,119 | | |
|
In connection with
CSLLF’s receivable due on the TRS represents realized amounts from payments on underlying loans in the total return swap portfolio. At December 31, 2016, the receivable due on TRS was $0.1 million, and is recorded on CSLLF’s statement of assets and liabilities below. CSLLF does not offset collateral posted in relation to the TRS with any unrealized appreciation or depreciation outstanding in the statement of assets and liabilities as of December 31, 2016.
Transactions in TRS contracts during the year ended December 31, 2016 resulted in $2.3 million in realized gains and $2.8 million in unrealized appreciation. Transactions in TRS contracts during the year ended December 31, 2015 resulted in $1.4 million in realized gains and $(2.8) million in unrealized depreciation, which is recorded on CSLLF’s statements of operations below.
The following represents the volume of the CSLLF’s derivative transactions during the years ended December 31, 2016 and 2015for CSLF II (dollars in thousands):
| | | For the Year Ended December 31, 2019 | | | For the period from December 20, 2018 (commencement of operations) to December 31, 2018 | | ||||||
INVESTMENT INCOME | | | | | | | | | | | | | |
Interest income | | | | $ | 1,372 | | | | | $ | 31 | | |
Fee income | | | | | 175 | | | | | | 100 | | |
Total investment income | | | | $ | 1,547 | | | | | $ | 131 | | |
EXPENSES | | | | | | | | | | | | | |
Interest and financing expenses | | | | $ | 151 | | | | | $ | — | | |
General and administrative expenses | | | | | 176 | | | | | | 12 | | |
Total expenses | | | | $ | 327 | | | | | $ | 12 | | |
NET INVESTMENT INCOME | | | | $ | 1,220 | | | | | $ | 119 | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | | | $ | 1,220 | | | | | $ | 119 | | |
For the year ended December 31, 2016 | For the year ended December 31, 2015(1) | |||||||
Average notional par amount of contract | $ | 56,681 | $ | 61,306 |
Below is certain summarized financial information for CSLLF as of December 31, 2016 and for the years ended December 31, 2016, and December 31, 2015 (dollars in thousands):
As of December 31, 2016 | ||||
ASSETS | ||||
Receivable due on Total Return Swap | $ | 82 | ||
Total assets | $ | 82 | ||
LIABILITIES | ||||
Distribution payable | $ | 82 | ||
Total liabilities | $ | 82 | ||
NET ASSETS | ||||
Total net assets | $ | — | ||
Total liabilities and net assets | $ | 82 |
For the Year Ended December 31, 2016 | For the period from March 27, 2015 to December 31, 2015 | |||||||
Administrative and legal expenses | $ | (193 | ) | $ | (104 | ) | ||
Net operating loss | $ | (193 | ) | $ | (104 | ) | ||
Net realized gain on Total Return Swap | $ | 2,306 | $ | 1,366 | ||||
Net change in unrealized appreciation (depreciation) on Total Return Swap | 2,828 | (2,828 | ) | |||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,941 | $ | (1,566 | ) |
| | | For the Years Ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Total investment income | | | | $ | 44,035 | | | | | $ | 47,293 | | |
Total expenses, net of incentive fee waiver | | | | | 30,992 | | | | | | 31,271 | | |
Net investment income | | | | | 13,043 | | | | | | 16,022 | | |
Net realized loss on investments | | | | | (19,756) | | | | | | (34,804) | | |
Net unrealized depreciation on investments | | | | | (20,306) | | | | | | (5,955) | | |
Net unrealized appreciation on Written Call Option | | | | | — | | | | | | 6,795 | | |
Tax benefit (provision) | | | | | (628) | | | | | | 1,916 | | |
Net decrease in net assets resulting from operations | | | | $ | (27,647) | | | | | $ | (16,026) | | |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Total investment income | $ | 51,089 | $ | 68,312 | $ | 63,976 | ||||||
Total expenses, net of fee waivers | 35,565 | 39,272 | 38,649 | |||||||||
Net investment income | 15,524 | 29,040 | 25,327 | |||||||||
Total realized gain (loss) from investments | (24,189 | ) | (22,766 | ) | 5,436 | |||||||
Net unrealized appreciation (depreciation) on investments | 7,049 | 5,594 | (16,913 | ) | ||||||||
Net unrealized depreciation on written call option | (4,079 | ) | (2,716 | ) | — | |||||||
Tax provision | (1,289 | ) | — | — | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | (6,984 | ) | $ | 9,152 | $ | 13,850 |
| | | For the Years Ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Interest income | | | | $ | 36,106 | | | | | $ | 40,357 | | |
Fee income | | | | | 1,470 | | | | | | 2,044 | | |
Payment-in-kind interest and dividend income | | | | | 2,962 | | | | | | 4,348 | | |
Dividend income | | | | | 3,299 | | | | | | 397 | | |
Interest from cash and cash equivalents | | | | | 198 | | | | | | 147 | | |
Total investment income | | | | $ | 44,035 | | | | | $ | 47,293 | | |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Interest income | $ | 40,462 | $ | 54,990 | $ | 50,586 | ||||||
Fee income | 2,027 | 4,118 | 5,944 | |||||||||
Payment-in-kind interest and dividend income | 7,143 | 6,300 | 5,084 | |||||||||
Dividend income | 1,221 | 2,792 | 2,101 | |||||||||
Interest from cash and cash equivalents | 111 | 27 | 5 | |||||||||
Other income | 125 | 85 | 256 | |||||||||
Total investment income | $ | 51,089 | $ | 68,312 | $ | 63,976 |
The income reported as interest income and PIK interest and PIK dividend income is generally based on the stated rates as disclosed in our consolidated scheduleschedules of investments. Accretion of discounts paidreceived for
year ended December 31, 2016, we generated $2.1 million in origination fees from new deployments and $2.0 million in other fees. Dividend income decreased from $2.8 million for the year ended December 31, 2016 to $1.2 million for the year ended December 31, 2017, mostly driven by a $1.8 million decrease in dividends paid by CSLLF. PIK income increased $0.8 million compared to the prior year, from $6.3 million for the year ended December 31, 2016 to $7.1 million for the year ended December 31, 2017. The increase in PIK income was primarily due to investments restructured during the year ended December 31, 2017 that provided for an increase in the PIK rate being charged.
For the year ended December 31, 2016, total investment income increased by $4.3 million, or 6.8%, compared to the year ended December 31, 2015. The increase from the prior period relates primarily to higher interest and PIK income from a larger average investment portfolio. For the year ended December 31, 2016, we generated $2.1 million in origination fees from new deployments and $2.0$0.3 million in other fees. Comparatively, for the year ended December 31, 2015,2018, we generated $3.5$1.7 million in origination fees from new deployments and $2.4$0.3 million in other fees. The year over year decline in origination fee income was due to a decline in investment originations. Dividend income increased from $2.1$0.4 million for the year ended December 31, 20152018 to $2.8$3.3 million for the year ended December 31, 2016, mostly driven by a $0.92019, due to $1.0 million increase in dividends paid by CSLLF.
| | | For the Years Ended December 31, | | |||||||||
| | | 2019 | | | 2018 | | ||||||
Interest and financing expenses | | | | $ | 17,121 | | | | | $ | 17,283 | | |
Base management fee | | | | | 7,967 | | | | | | 9,049 | | |
Incentive fees, net of incentive fee waiver | | | | | 1,209 | | | | | | 244 | | |
General and administrative expenses | | | | | 4,695 | | | | | | 4,695 | | |
Total expenses, net of incentive fee waiver | | | | $ | 30,992 | | | | | $ | 31,271 | | |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Interest and financing expenses | $ | 18,825 | $ | 19,711 | $ | 19,022 | ||||||
Loss on extinguishment of debt | 2,732 | — | — | |||||||||
Base management fee | 9,780 | 10,588 | 10,590 | |||||||||
Incentive fees, net of incentive fee waiver | 350 | 5,169 | 4,985 | |||||||||
General and administrative expenses | 3,878 | 3,804 | 4,052 | |||||||||
Total expenses, net of fee waivers | $ | 35,565 | $ | 39,272 | $ | 38,649 |
For the year ended December 31, 2017,2019, operating expenses decreased by $3.7$0.3 million, or 9.4%0.9%, compared to the year ended December 31, 2016. For the year ended December 31, 2017, we recognized a $2.7 million loss on extinguishment of debt related to repayment of the 7.125% fixed-rate notes due 2021. The increase in2018. Interest and financing expenses related to the loss on extinguishment of debt was offset by (i) a decline in base management fees,declined from $10.6$17.3 million for the year ended December 31, 2016,2018 to $9.8$17.1 million for the year ended December 31, 20172019 due primarily to lower average assets underdebt outstanding during the period. Our base management (ii) a decline in incentive fees, net of incentive fee waiver,declined from $5.2$9.0 million for the year ended December 31, 20162018 to $0.4$8.0 million for the year ended December 31, 2017,2019 due to lower pre-incentiveaverage assets under management. Incentive fees, net of incentive fee waiver, increased from $0.2 million to $1.2 million primarily due to better net investment income returns in relation to our net asset value. General and (iii) a decline in interest and financingadministrative expenses from $19.7were $4.7 million for the year ended December 31, 2016 to $18.8 million for the year ended2019 and December 31, 2017, primarily due to a lower average debt balance outstanding during the period.
For the year ended December 31, 2016, operating expenses increased by $0.6 million, or 1.6%, compared to the year ended December 31, 2015. The increase from the prior period was primarily due to an increase in interest and financing expenses due to a larger average outstanding balance on the senior secured revolving credit agreement (the “Credit Facility”) with ING Capital, LLC, as administrative agent, arranger, and bookrunner, and the lender party thereto for the year ended December 31, 2016 compared to the year ended December 31, 2015. Other expenses remained relatively unchanged year over year.
For the year ended December 31, 2017, we recorded a tax provision of $1.3 million. benefit (provision)
The
CableOrganizer Acquisition, LLC, a Delaware limited liability company that began operations on April 23, 2013, is a leading online provider of cable and wire management products. The income the Company generated from CableOrganizer Acquisition, LLC, which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $1.8 million, $1.9 million, and $0.4 million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
Eastport Holdings, LLC, an Ohio limited liability company organized on November 1, 2011, is a holding company consisting of marketing and advertising companies located across the U.S. The income the Company generated from Eastport Holdings, LLC, which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $11.4 million and $14.3 million for the years ended December 31, 2017 and December 31, 2016, respectively. The Company invested in the portfolio company in January 2016. As such, comparative financial information forS-X. During the year ended December 31, 2015 is not presented.
Kelle’s Transport Service, LLC, a Delaware limited liability company organized on March 28, 2014, provides temperature sensitive transportation services throughout North America. The income (loss)2019, the Company generated from Kelle’s Transport Service,wrote off its investment in AAE Acquisition, LLC which includes all interest, dividends, PIK interest and PIK dividends, fees, realized losses, and unrealized appreciation (depreciation), was $(6.9) million, $(1.2) million, and $3.0 million fora loss of $(20.4) million. During the yearsyear ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
Navis Holdings, Inc., incorporated in Delaware on December 21, 2010, designs and manufactures leading machinery for the global knit and woven finishing textile industries. The income2019, the Company generated from Navis Holdings, Inc., which includes all interest, dividends, PIK interestsold its investments in Portrait Studio, LLC, CableOrganizer Acquisition, LLC, and PIK dividends, fees,Micro Precision, LLC and unrealized appreciation (depreciation) was $0.7realized a gain/(loss) of $(6.2) million, $1.9$(14.6) million, and $4.2 million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015,$0.0, respectively.
On-Site Fuel Services, Inc. is a 100% owned subsidiary of On-Site Fuel Holdings, Inc., which was incorporated in Delaware on December 19, 2011. On-Site Fuel Services, Inc. provides fueling services for commercial and government vehicle fleets throughout the southeast U.S. The income (loss) the Company generated from On-Site Fuel Service, Inc., which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $0.1 million, $4.5 million, and $(3.2) million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
The summarized financial information of our unconsolidated subsidiaries was as follows (dollars in thousands):
As of | ||||||||
Balance Sheet – CableOrganizer Acquisition, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 5,286 | $ | 5,589 | ||||
Noncurrent assets | 9,664 | 9,872 | ||||||
Total assets | $ | 14,950 | $ | 15,461 | ||||
Current liabilities | $ | 5,207 | $ | 4,219 | ||||
Noncurrent liabilities | 12,373 | 11,882 | ||||||
Total liabilities | $ | 17,580 | $ | 16,101 | ||||
Total deficit | $ | (2,630 | ) | $ | (640 | ) |
For the year ended | ||||||||||||
Statements of Operations – CableOrganizer Acquisition, LLC | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 27,134 | $ | 23,277 | $ | 25,315 | ||||||
Cost of goods sold | 19,778 | 15,715 | 16,878 | |||||||||
Gross profit | $ | 7,356 | $ | 7,562 | $ | 8,437 | ||||||
Other expenses | $ | 9,345 | $ | 10,344 | $ | 10,008 | ||||||
Loss before income taxes | (1,989 | ) | (2,782 | ) | (1,571 | ) | ||||||
Net loss | $ | (1,989 | ) | $ | (2,782 | ) | $ | (1,571 | ) |
As of | ||||||||
Balance Sheet – Eastport Holdings, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 94,186 | $ | 96,175 | ||||
Noncurrent assets | 185,087 | 145,802 | ||||||
Total assets | $ | 279,273 | $ | 241,977 | ||||
Current liabilities | $ | 142,250 | $ | 157,622 | ||||
Noncurrent liabilities | 70,765 | 41,355 | ||||||
Total liabilities | $ | 213,015 | $ | 198,977 | ||||
Total equity | $ | 66,258 | $ | 43,000 |
For the year ended | ||||||||
Statement of Operations – Eastport Holdings, LLC | December 31, 2017 | December 31, 2016 | ||||||
Net sales | $ | 556,895 | $ | 499,986 | ||||
Cost of goods sold | 411,167 | 377,036 | ||||||
Gross profit | $ | 145,728 | $ | 122,950 | ||||
Other expenses | $ | 134,231 | $ | 111,677 | ||||
Income before income taxes | 11,497 | 11,273 | ||||||
Income tax provision | 628 | — | ||||||
Net income | $ | 10,869 | $ | 11,273 |
As of | ||||||||
Balance Sheet – Kelle’s Transport Service, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 6,734 | $ | 8,554 | ||||
Noncurrent assets | 11,801 | 13,237 | ||||||
Total assets | $ | 18,535 | $ | 21,791 | ||||
Current liabilities | $ | 11,092 | $ | 4,655 | ||||
Noncurrent liabilities | 17,693 | 14,962 | ||||||
Total liabilities | $ | 28,785 | $ | 19,617 | ||||
Total equity (deficit) | $ | (10,250 | ) | $ | 2,174 |
For the year ended | ||||||||||||
Statements of Operations – Kelle’s Transport Service, LLC | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 51,405 | $ | 65,471 | $ | 66,942 | ||||||
Cost of goods sold | 49,343 | 55,859 | 54,027 | |||||||||
Gross profit | $ | 2,062 | $ | 9,612 | $ | 12,915 | ||||||
Other expenses | $ | 14,077 | $ | 12,804 | $ | 12,071 | ||||||
Income (loss) before income taxes | (12,015 | ) | (3,192 | ) | 844 | |||||||
Income tax provision | 5 | 44 | 50 | |||||||||
Net income (loss) | $ | (12,020 | ) | $ | (3,236 | ) | $ | 794 |
As of | ||||||||
Balance Sheet – Navis Holdings, Inc. | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 4,721 | $ | 4,655 | ||||
Noncurrent assets | 2,950 | 3,446 | ||||||
Total assets | $ | 7,671 | $ | 8,101 | ||||
Current liabilities | $ | 1,941 | $ | 2,448 | ||||
Noncurrent liabilities | 6,973 | 6,719 | ||||||
Total liabilities | $ | 8,914 | $ | 9,167 | ||||
Total deficit | $ | (1,243 | ) | $ | (1,066 | ) |
For the year ended | ||||||||||||
Statements of Operations – Navis Holdings, Inc. | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 13,948 | $ | 17,803 | $ | 17,076 | ||||||
Cost of goods sold | 8,724 | 10,933 | 11,087 | |||||||||
Gross profit | $ | 5,224 | $ | 6,870 | $ | 5,989 | ||||||
Other expenses | $ | 4,647 | $ | 5,070 | $ | 5,414 | ||||||
Income before income taxes | 577 | 1,800 | 575 | |||||||||
Income tax provision | 229 | 701 | 343 | |||||||||
Net income | $ | 348 | $ | 1,099 | $ | 232 |
As of | ||||||||
Balance Sheet – On-Site Fuel Services, Inc. | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 28,064 | $ | 13,079 | ||||
Noncurrent assets | 26,807 | 16,314 | ||||||
Total assets | $ | 54,871 | $ | 29,393 | ||||
Current liabilities | $ | 32,626 | $ | 16,498 | ||||
Noncurrent liabilities | 34,515 | 19,903 | ||||||
Total liabilities | $ | 67,141 | $ | 36,401 | ||||
Total deficit | $ | (12,270 | ) | $ | (7,008 | ) |
For the year ended | ||||||||||||
Statements of Operations – On-Site Fuel Service, Inc. | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 157,774 | $ | 110,412 | $ | 114,137 | ||||||
Cost of goods sold | 149,436 | 101,714 | 106,668 | |||||||||
Gross profit | $ | 8,338 | $ | 8,698 | $ | 7,469 | ||||||
Other expenses | $ | 13,600 | $ | 13,682 | $ | 13,592 | ||||||
Loss before income taxes | (5,262 | ) | (4,984 | ) | (6,123 | ) | ||||||
Income tax provision | — | 14 | 1,967 | |||||||||
Net loss | $ | (5,262 | ) | $ | (4,998 | ) | $ | (8,090 | ) |
On September 30, 2013, we issued 4,000,000 shares at $20.00 per share in
from equity offerings through December 31, 2019.
On April 13, 2015, we completed an underwritten offering of 3,500,000 shares of our common stock at a public offering price of $18.32 per share. The total proceeds received in the offering net of underwriting discounts and offering costs were approximately $61.7 million.
principal, plus accrued and unpaid interest. Interest on the 2022 Notes is payable quarterly beginning August 31, 2017.quarterly. The 2022 Notes are listed on the NASDAQ Global Select Market under the trading symbol “CPTAL” with a par value of $25.00 per share.
| | | Contractual Obligations Payments Due by Period | | |||||||||||||||||||||||||||
| | | Less Than 1 Year | | | 1 – 3 Years | | | 3 – 5 Years | | | More Than 5 Years | | | Total | | |||||||||||||||
SBA Debentures | | | | $ | 19,000 | | | | | $ | 106,000 | | | | | $ | 25,000 | | | | | $ | — | | | | | $ | 150,000 | | |
2022 Notes | | | | | — | | | | | | 75,000 | | | | | | — | | | | | | — | | | | | | 75,000 | | |
2022 Convertible Notes | | | | | — | | | | | | 52,088 | | | | | | — | | | | | | — | | | | | | 52,088 | | |
Credit Facility | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total Contractual Obligations | | | | $ | 19,000 | | | | | $ | 233,088 | | | | | $ | 25,000 | | | | | $ | — | | | | | $ | 277,088 | | |
Contractual Obligations Payments Due by Period | ||||||||||||||||||||
Less Than 1 Year | 1 – 3 Years | 3 – 5 Years | More Than 5 Years | Total | ||||||||||||||||
SBA Debentures | $ | — | $ | 24,000 | $ | 121,700 | $ | 25,000 | $ | 170,700 | ||||||||||
2022 Notes | — | — | 75,000 | — | 75,000 | |||||||||||||||
2022 Convertible Notes | — | — | 52,088 | — | 52,088 | |||||||||||||||
Credit Facility | — | — | 9,000 | — | 9,000 | |||||||||||||||
Total Contractual Obligations | $ | — | $ | 24,000 | $ | 257,788 | $ | 25,000 | $ | 306,788 |
Class and Year | | | Total Amount Outstanding Exclusive of Treasury Securities(1)(6) | | | Assets Coverage Per Unit(2)(6) | | | Involuntary Liquidation Preference per Unit(3) | | | Average Market Value per Unit(4) | | ||||||||||||
| | | (in thousands) | | | | | ||||||||||||||||||
Capitala Finance Corp. | | | | | | | | | | | | | | | | ||||||||||
Credit Facility(5) | | | | | | | | | | | | | | | | ||||||||||
2019 | | | | $ | — | | | | | $ | 2,200 | | | | | | — | | | | | | N/A | | |
2018 | | | | | 10,000 | | | | | | 2,400 | | | | | | — | | | | | | N/A | | |
2017 | | | | | 9,000 | | | | | | 2,600 | | | | | | — | | | | | | N/A | | |
2016 | | | | | 44,000 | | | | | | 2,600 | | | | | | — | | | | | | N/A | | |
2015 | | | | | 70,000 | | | | | | 2,500 | | | | | | — | | | | | | N/A | | |
2014 | | | | | — | | | | | | 1,800 | | | | | | — | | | | | | N/A | | |
2022 Notes | | | | | | | | | | | | | | | | ||||||||||
2019 | | | | $ | 75,000 | | | | | $ | 2,200 | | | | | | — | | | | | $ | 1,000 | | |
2018 | | | | | 75,000 | | | | | | 2,400 | | | | | | — | | | | | | 996 | | |
2017 | | | | | 75,000 | | | | | | 2,600 | | | | | | — | | | | | | 1,014 | | |
2022 Convertible Notes | | | | | | | | | | | | | | | | ||||||||||
2019 | | | | $ | 52,088 | | | | | $ | 2,200 | | | | | | — | | | | | $ | 994 | | |
2018 | | | | | 52,088 | | | | | | 2,400 | | | | | | — | | | | | | 984 | | |
2017 | | | | | 52,088 | | | | | | 2,600 | | | | | | — | | | | | | 1,001 | | |
SBA-guaranteed debentures | | | | | | | | | | | | | | | | ||||||||||
2019 | | | | $ | 150,000 | | | | | | N/A | | | | | | — | | | | | | N/A | | |
2018 | | | | | 165,700 | | | | | | N/A | | | | | | — | | | | | | N/A | | |
2017 | | | | | 170,700 | | | | | | N/A | | | | | | — | | | | | | N/A | | |
2016 | | | | | 170,700 | | | | | | N/A | | | | | | — | | | | | | N/A | | |
2015 | | | | | 184,200 | | | | | | N/A | | | | | | — | | | | | | N/A | | |
2014 | | | | | 192,200 | | | | | $ | 1,800 | | | | | | — | | | | | | N/A | | |
2013 | | | | | 202,200 | | | | | | 2,300 | | | | | | — | | | | | | N/A | | |
Class and Year | | | Total Amount Outstanding Exclusive of Treasury Securities(1)(6) | | | Assets Coverage Per Unit(2)(6) | | | Involuntary Liquidation Preference per Unit(3) | | | Average Market Value per Unit(4) | | ||||||||||||
| | | (in thousands) | | | | | ||||||||||||||||||
2021 Notes | | | | | | | | | | | | | | | | ||||||||||
2016 | | | | $ | 113,438 | | | | | $ | 2,600 | | | | | | — | | | | | $ | 1,006 | | |
2015 | | | | | 113,438 | | | | | | 2,500 | | | | | | — | | | | | | 1,020 | | |
2014 | | | | | 113,438 | | | | | | 1,800 | | | | | | — | | | | | | 1,036 | | |
Fund II SBA-guaranteed debentures | | | | | | | | | | ||||||||||||||||
2012 | | | | $ | 52,200 | | | | | $ | 2,000 | | | | | | — | | | | | | N/A | | |
2011 | | | | | 52,200 | | | | | | 1,600 | | | | | | — | | | | | | N/A | | |
2010 | | | | | 36,500 | | | | | | 1,600 | | | | | | — | | | | | | N/A | | |
Fund III SBA-guaranteed debentures | | | | | | | | | | ||||||||||||||||
2012 | | | | $ | 125,000 | | | | | $ | 1,700 | | | | | | — | | | | | | N/A | | |
2011 | | | | | 90,000 | | | | | | 1,700 | | | | | | — | | | | | | N/A | | |
2010 | | | | | 33,000 | | | | | | 1,900 | | | | | | — | | | | | | N/A | | |
(during (during the calendar year) plus 98.2% of our net capital gain income (during each 12-month period ending on October 31) plus any net ordinary income and capital gain net income for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax to avoid a U.S. federal excise tax. We made quarterly distributions to our stockholders for the first four full quarters subsequent to our IPO. To the extent we have income available, we have made and intend to make monthly distributions thereafter. Our monthly stockholder distributions, if any, will be determined by our Board on a quarterly basis. Any distribution to our stockholders will be declared out of assets legally available for distribution.
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 2, 2019 | | | January 24, 2019 | | | January 30, 2019 | | | | $ | 0.0833 | | |
January 2, 2019 | | | February 20, 2019 | | | February 27, 2019 | | | | | 0.0833 | | |
January 2, 2019 | | | March 21, 2019 | | | March 28, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | April 22, 2019 | | | April 29, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | May 23, 2019 | | | May 30, 2019 | | | | | 0.0833 | | |
April 1, 2019 | | | June 20, 2019 | | | June 27, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | July 23, 2019 | | | July 30, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | August 22, 2019 | | | August 29, 2019 | | | | | 0.0833 | | |
July 1, 2019 | | | September 20, 2019 | | | September 27, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | October 22, 2019 | | | October 29, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | November 22, 2019 | | | November 29, 2019 | | | | | 0.0833 | | |
October 1, 2019 | | | December 23, 2019 | | | December 30, 2019 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2019 | | | | | | | | | | $ | 1.00 | | |
|
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 2, 2018 | | | January 22, 2018 | | | January 30, 2018 | | | | $ | 0.0833 | | |
January 2, 2018 | | | February 20, 2018 | | | February 27, 2018 | | | | | 0.0833 | | |
January 2, 2018 | | | March 23, 2018 | | | March 29, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | April 19, 2018 | | | April 27, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | May 22, 2018 | | | May 30, 2018 | | | | | 0.0833 | | |
April 2, 2018 | | | June 20, 2018 | | | June 28, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | July 23, 2018 | | | July 30, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | August 23, 2018 | | | August 30, 2018 | | | | | 0.0833 | | |
July 2, 2018 | | | September 20, 2018 | | | September 27, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | October 23, 2018 | | | October 30, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | November 21, 2018 | | | November 29, 2018 | | | | | 0.0833 | | |
October 1, 2018 | | | December 20, 2018 | | | December 28, 2018 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2018 | | | | | | | | | | $ | 1.00 | | |
|
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 3, 2017 | January 20, 2017 | January 30, 2017 | $ | 0.1300 | ||||||||
January 3, 2017 | February 20, 2017 | February 27, 2017 | 0.1300 | |||||||||
January 3, 2017 | March 23, 2017 | March 30, 2017 | 0.1300 | |||||||||
April 3, 2017 | April 19, 2017 | April 27, 2017 | 0.1300 | |||||||||
April 3, 2017 | May 23, 2017 | May 29, 2017 | 0.1300 | |||||||||
April 3, 2017 | June 24, 2017 | June 29, 2017 | 0.1300 | |||||||||
July 3, 2017 | July 21, 2017 | July 28, 2017 | 0.1300 | |||||||||
July 3, 2017 | August 23, 2017 | August 30, 2017 | 0.1300 | |||||||||
July 3, 2017 | September 20, 2017 | September 28, 2017 | 0.1300 | |||||||||
October 2, 2017 | October 23, 2017 | October 30, 2017 | 0.0833 | |||||||||
October 2, 2017 | November 21, 2017 | November 29, 2017 | 0.0833 | |||||||||
October 2, 2017 | December 20, 2017 | December 28, 2017 | 0.0833 | |||||||||
Total Distributions Declared and Distributed for 2017 | $ | 1.42 |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 4, 2016 | January 22, 2016 | January 28, 2016 | $ | 0.1567 | ||||||||
January 4, 2016 | February 19, 2016 | February 26, 2016 | 0.1567 | |||||||||
January 4, 2016 | March 22, 2016 | March 30, 2016 | 0.1567 | |||||||||
April 1, 2016 | April 22, 2016 | April 28, 2016 | 0.1567 | |||||||||
April 1, 2016 | May 23, 2016 | May 30, 2016 | 0.1567 | |||||||||
April 1, 2016 | June 21, 2016 | June 29, 2016 | 0.1567 | |||||||||
July 1, 2016 | July 22, 2016 | July 29, 2016 | 0.1567 | |||||||||
July 1, 2016 | August 22, 2016 | August 30, 2016 | 0.1567 | |||||||||
July 1, 2016 | September 22, 2016 | September 29, 2016 | 0.1567 | |||||||||
September 22, 2016 | October 21, 2016 | October 28, 2016 | 0.1300 | |||||||||
September 22, 2016 | November 21, 2016 | November 29, 2016 | 0.1300 | |||||||||
September 22, 2016 | December 21, 2016 | December 29, 2016 | 0.1300 | |||||||||
Total Distributions Declared and Distributed for 2016 | $ | 1.80 |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 2, 2015 | January 22, 2015 | January 29, 2015 | $ | 0.1567 | ||||||||
January 2, 2015 | February 20, 2015 | February 26, 2015 | 0.1567 | |||||||||
January 2, 2015 | March 23, 2015 | March 30, 2015 | 0.1567 | |||||||||
February 26, 2015 | March 23, 2015(1) | March 30, 2015 | 0.0500 | |||||||||
February 26, 2015 | April 23, 2015(1) | April 29, 2015 | 0.0500 | |||||||||
February 26, 2015 | May 21, 2015(1) | May 28, 2015 | 0.0500 | |||||||||
February 26, 2015 | June 22, 2015(1) | June 29, 2015 | 0.0500 | |||||||||
February 26, 2015 | July 23, 2015(1) | July 30, 2015 | 0.0500 | |||||||||
February 26, 2015 | August 21, 2015(1) | August 28, 2015 | 0.0500 | |||||||||
February 26, 2015 | September 23, 2015(1) | September 29, 2015 | 0.0500 | |||||||||
February 26, 2015 | October 23, 2015(1) | October 29, 2015 | 0.0500 | |||||||||
February 26, 2015 | November 20, 2015(1) | November 27, 2015 | 0.0500 | |||||||||
February 26, 2015 | December 22, 2015(1) | December 30, 2015 | 0.0500 | |||||||||
April 1, 2015 | April 23, 2015 | April 29, 2015 | 0.1567 | |||||||||
April 1, 2015 | May 21, 2015 | May 28, 2015 | 0.1567 | |||||||||
April 1, 2015 | June 22, 2015 | June 29, 2015 | 0.1567 | |||||||||
July 1, 2015 | July 23, 2015 | July 30, 2015 | 0.1567 | |||||||||
July 1, 2015 | August 21, 2015 | August 28, 2015 | 0.1567 | |||||||||
July 1, 2015 | September 23, 2015 | September 29, 2015 | 0.1567 | |||||||||
October 1, 2015 | October 23, 2015 | October 29, 2015 | 0.1567 | |||||||||
October 1, 2015 | November 20, 2015 | November 27, 2015 | 0.1567 | |||||||||
October 1, 2015 | December 22, 2015 | December 30, 2015 | 0.1567 | |||||||||
Total Distributions Declared and Distributed for 2015 | $ | 2.38 |
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | |||
January 3, 2017 | | | January 20, 2017 | | | January 30, 2017 | | | | $ | 0.1300 | | |
January 3, 2017 | | | February 20, 2017 | | | February 27, 2017 | | | | | 0.1300 | | |
January 3, 2017 | | | March 23, 2017 | | | March 30, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | April 19, 2017 | | | April 27, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | May 23, 2017 | | | May 29, 2017 | | | | | 0.1300 | | |
April 3, 2017 | | | June 21, 2017 | | | June 29, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | July 21, 2017 | | | July 28, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | August 23, 2017 | | | August 30, 2017 | | | | | 0.1300 | | |
July 3, 2017 | | | September 20, 2017 | | | September 28, 2017 | | | | | 0.1300 | | |
October 2, 2017 | | | October 23, 2017 | | | October 30, 2017 | | | | | 0.0833 | | |
October 2, 2017 | | | November 21, 2017 | | | November 29, 2017 | | | | | 0.0833 | | |
October 2, 2017 | | | December 20, 2017 | | | December 28, 2017 | | | | | 0.0833 | | |
Total Distributions Declared and Distributed for 2017 | | | | | | | | | | $ | 1.42 | | |
In addition, an affiliate of the Investment Advisor also manages CapitalSouth Partners SBIC Fund IV, L.P. (“Fund IV”), a private investment limited partnership providingwhich provides financing solutions to smaller and lower middle-market companies that had its first closing in March 2013 and obtained SBA approval for its SBIC license in April 2013. In addition to Fund IV, affiliates of the Investment Advisor may manage several affiliated funds whereby institutional limited partners in Fund IV have the opportunity to co-invest with Fund IV in portfolio investments. An affiliate of the Investment Advisor also manages Capitala Private Credit Fund V, L.P. (“Fund V”);, a private investment limited partnership, providingand a private investment vehicle (referred to herein as “Capitala Specialty Lending Corp” or “CSLC”), both of which provide financing solutions to lower middle-market and traditional middle-market companies. The Investment Advisor and its affiliates may also manage other funds in the future that may have investment mandates that are similar, in whole and in part, with ours. To the extent permitted by the 1940 Act and interpretation of the SEC staff, the Investment Advisor and its affiliates may determine that an investment is appropriate for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Investment Advisor or its affiliates may determine that we should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the Investment Advisor’s allocation procedures. We do not expect to make, and have made, co-investments or otherwise compete for investment opportunities, with Fund IV, because its focus and investment strategy differ from our own. However, we do expect to make co-investments with Fund V, given its similarand/or CSLC to the extent their respective investment strategy.
strategies align with ours.
On August 31, 2016,
In addition to unfunded commitments related to debt investments, the Company also has extended a guaranty on behalf of one of our portfolio companies, whereby we have guaranteed $1.9(CSLF II), $5.0 million of obligations
of Kelle’s Transport Service, LLC. As of December 31, 2017 we have not been required to make payments on this or any previous guaranties, and we consider the credit risks to be remote and the fair value of this guaranty to be immaterial.
We have no other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Date Declared | | | Record Date | | | Payment Date | | | Distributions per Share | | |||
January 2, 2020 | | | January 24, 2020 | | | January 30, 2020 | | | | $ | 0.0833 | | |
January 2, 2020 | | | February 20, 2020 | | | February 27, 2020 | | | | $ | 0.0833 | | |
January 2, 2020 | | | March 23, 2020 | | | March 30, 2020 | | | | $ | 0.0833 | | |
Date Declared | Record Date | Payment Date | Amount Per Share | |||||||||
January 2, 2018 | January 22, 2018 | January 30, 2018 | $ | 0.0833 | ||||||||
January 2, 2018 | February 20, 2018 | February 27, 2018 | 0.0833 | |||||||||
January 2, 2018 | March 23, 2018 | March 29, 2018 | 0.0833 | |||||||||
Total Distributions Declared for Fiscal 2018 | $ | 0.25 |
On January 2, 2018, the Company invested $15.0 million in first lien debt and $0.5 million in membership units of US Bath Group, LLC. The debt investment has a yield of LIBOR + 9.0% with a 1.0% floor.
On January 19, 2018, the Company received $7.2 million in cash repayment for its first lien debt investment in Brunswick Bowling Products, Inc., repaid at par.
Basis Point Change | | | Increase (decrease) in interest income | | | (Increase) decrease in interest expense | | | Increase (decrease) in net income | | |||||||||
Up 300 basis points | | | | $ | 5,444 | | | | | $ | — | | | | | $ | 5,444 | | |
Up 200 basis points | | | | $ | 3,611 | | | | | $ | — | | | | | $ | 3,611 | | |
Up 100 basis points | | | | $ | 1,777 | | | | | $ | — | | | | | $ | 1,777 | | |
Down 100 basis points | | | | $ | (1,050) | | | | | $ | — | | | | | $ | (1,050) | | |
Down 200 basis points | | | | $ | (1,187) | | | | | $ | — | | | | | $ | (1,187) | | |
Down 300 basis points | | | | $ | (1,187) | | | | | $ | — | | | | | $ | (1,187) | | |
Basis Point Change | Increase (decrease) in interest income | (Increase) decrease in interest expense | Increase (decrease) in net income | |||||||||
Up 300 basis points | $ | 5,240 | $ | (270 | ) | $ | 4,970 | |||||
Up 200 basis points | $ | 3,486 | $ | (180 | ) | $ | 3,306 | |||||
Up 100 basis points | $ | 1,731 | $ | (90 | ) | $ | 1,641 | |||||
Down 100 basis points | $ | (1,282 | ) | $ | 91 | $ | (1,191 | ) | ||||
Down 200 basis points | $ | (1,361 | ) | $ | 143 | $ | (1,218 | ) | ||||
Down 300 basis points | $ | (1,361 | ) | $ | 143 | $ | (1,218 | ) |
| Page | | |||||||
| | | | F-1 | | | |||
| | | | F-2 | | | |||
Audited Financial Statements: | | | | | | | | ||
| | | | F-3 | | | |||
| | | | F-4 | | | |||
| | | | F-5 | | | |||
| | | | F-6 | | | |||
| | | | F-7 | | | |||
| | | | F-18 | | |
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our procedures included confirmation of securitiesinvestments owned as of December 31, 20172019 and 20162018, by correspondence with the custodian andcustodians, agents and/or directly with management or designees of the portfolio companies, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| | | As of | | |||||||||
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
ASSETS | | | | | | | | | | | | | |
Investments at fair value | | | | | | | | | | | | | |
Non-control/non-affiliate investments (amortized cost of $250,433 and $280,114, respectively) | | | | $ | 241,046 | | | | | $ | 286,843 | | |
Affiliate investments (amortized cost of $80,756 and $72,300, respectively) | | | | | 98,763 | | | | | | 92,939 | | |
Control investments (amortized cost of $22,692 and $67,556, respectively) | | | | | 22,723 | | | | | | 69,145 | | |
Total investments at fair value (amortized cost of $353,881 and $419,970, respectively) | | | | | 362,532 | | | | | | 448,927 | | |
Cash and cash equivalents | | | | | 62,321 | | | | | | 39,295 | | |
Interest and dividend receivable | | | | | 1,745 | | | | | | 3,778 | | |
Prepaid expenses | | | | | 624 | | | | | | 454 | | |
Deferred tax asset, net | | | | | — | | | | | | 628 | | |
Other assets | | | | | 115 | | | | | | 83 | | |
Total assets | | | | $ | 427,337 | | | | | $ | 493,165 | | |
LIABILITIES | | | | | | | | | | | | | |
SBA Debentures (net of deferred financing costs of $1,006 and $1,688, respectively) | | | | $ | 148,994 | | | | | $ | 164,012 | | |
2022 Notes (net of deferred financing costs of $1,447 and $1,987, respectively) | | | | | 73,553 | | | | | | 73,013 | | |
2022 Convertible Notes (net of deferred financing costs of $916 and $1,259, respectively) | | | | | 51,172 | | | | | | 50,829 | | |
Credit Facility (net of deferred financing costs of $1,165 and $983, respectively) | | | | | (1,165) | | | | | | 9,017 | | |
Management and incentive fees payable | | | | | 3,713 | | | | | | 2,487 | | |
Interest and financing fees payable | | | | | 2,439 | | | | | | 3,063 | | |
Accounts payable and accrued expenses | | | | | 518 | | | | | | 100 | | |
Total liabilities | | | | $ | 279,224 | | | | | $ | 302,521 | | |
Commitments and contingencies (Note 2) | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | |
Common stock, par value $0.01, 100,000,000 common shares authorized, 16,203,769 and 16,051,547 common shares issued and outstanding, respectively | | | | $ | 162 | | | | | $ | 161 | | |
Additional paid in capital | | | | | 237,886 | | | | | | 241,757 | | |
Total distributable loss | | | | | (89,935) | | | | | | (51,274) | | |
Total net assets | | | | $ | 148,113 | | | | | $ | 190,644 | | |
Total liabilities and net assets | | | | $ | 427,337 | | | | | $ | 493,165 | | |
Net asset value per share | | | | $ | 9.14 | | | | | $ | 11.88 | | |
As of | ||||||||
December 31, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Investments at fair value | ||||||||
Non-control/non-affiliate investments (amortized cost of $298,132 and $391,706, respectively) | $ | 288,374 | $ | 393,525 | ||||
Affiliate investments (amortized cost of $77,336 and $39,279, respectively) | 103,957 | 61,464 | ||||||
Control investments (amortized cost of $89,559 and $82,791, respectively) | 107,608 | 86,650 | ||||||
Total investments at fair value (amortized cost of $465,027 and $513,776, respectively) | 499,939 | 541,639 | ||||||
Cash and cash equivalents | 31,221 | 36,281 | ||||||
Interest and dividend receivable | 2,976 | 5,735 | ||||||
Due from related parties | 95 | 182 | ||||||
Prepaid expenses | 309 | 506 | ||||||
Other assets | 55 | 72 | ||||||
Total assets | $ | 534,595 | $ | 584,415 | ||||
LIABILITIES | ||||||||
SBA debentures (net of deferred financing costs of $2,300 and $2,911, respectively) | $ | 168,400 | $ | 167,789 | ||||
2021 Notes (net of deferred financing costs of $0 and $3,025, respectively) | — | 110,413 | ||||||
2022 Notes (net of deferred financing costs of $2,496 and $0, respectively) | 72,504 | — | ||||||
2022 Convertible Notes (net of deferred financing costs of $1,583 and $0, respectively) | 50,505 | — | ||||||
Credit Facility (net of deferred financing costs of $1,293 and $759, respectively) | 7,707 | 43,241 | ||||||
Due to related parties | — | 35 | ||||||
Management and incentive fee payable | 2,172 | 6,426 | ||||||
Interest and financing fees payable | 3,141 | 2,657 | ||||||
Accounts payable and accrued expenses | — | 536 | ||||||
Trade settlement payable | 175 | — | ||||||
Deferred tax liability, net | 1,289 | — | ||||||
Written call option at fair value (proceeds of $20 and $20, respectively) | 6,815 | 2,736 | ||||||
Total liabilities | $ | 312,708 | $ | 333,833 | ||||
Commitments and contingencies (Note 2) | ||||||||
NET ASSETS | ||||||||
Common stock, par value $.01, 100,000,000 common shares authorized, 15,951,231 and 15,868,045 common shares issued and outstanding, respectively | $ | 160 | $ | 159 | ||||
Additional paid in capital | 241,027 | 240,184 | ||||||
Undistributed net investment income | 15,854 | 22,973 | ||||||
Accumulated net realized losses from investments | (61,982 | ) | (37,881 | ) | ||||
Net unrealized appreciation on investments, net of deferred taxes | 33,623 | 27,863 | ||||||
Net unrealized depreciation on written call option | (6,795 | ) | (2,716 | ) | ||||
Total net assets | $ | 221,887 | $ | 250,582 | ||||
Total liabilities and net assets | $ | 534,595 | $ | 584,415 | ||||
Net asset value per share | $ | 13.91 | $ | 15.79 |
| | | For the Years Ended December 31, | | |||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | |||||||||
INVESTMENT INCOME | | | | | | | | | | | | | | | | | | | |
Interest and fee income: | | | | | | | | | | | | | | | | | | | |
Non-control/non-affiliate investments | | | | $ | 27,659 | | | | | $ | 27,754 | | | | | $ | 31,084 | | |
Affiliate investments | | | | | 8,351 | | | | | | 7,945 | | | | | | 4,509 | | |
Control investments | | | | | 1,566 | | | | | | 6,702 | | | | | | 6,896 | | |
Total interest and fee income | | | | | 37,576 | | | | | | 42,401 | | | | | | 42,489 | | |
Payment-in-kind interest and dividend income: | | | | | | | | | | | | | | | | | | | |
Non-control/non-affiliate investments | | | | | 1,721 | | | | | | 2,248 | | | | | | 4,503 | | |
Affiliate investments | | | | | 869 | | | | | | 1,251 | | | | | | 1,898 | | |
Control investments | | | | | 372 | | | | | | 849 | | | | | | 742 | | |
Total payment-in-kind interest and dividend income | | | | | 2,962 | | | | | | 4,348 | | | | | | 7,143 | | |
Dividend income: | | | | | | | | | | | | | | | | | | | |
Non-control/non-affiliate investments | | | | | 1,345 | | | | | | 59 | | | | | | 225 | | |
Affiliate investments | | | | | 50 | | | | | | 238 | | | | | | 641 | | |
Control investments | | | | | 1,904 | | | | | | 100 | | | | | | 355 | | |
Total dividend income | | | | | 3,299 | | | | | | 397 | | | | | | 1,221 | | |
Other income | | | | | — | | | | | | — | | | | | | 125 | | |
Interest income from cash and cash equivalents | | | | | 198 | | | | | | 147 | | | | | | 111 | | |
Total investment income | | | | | 44,035 | | | | | | 47,293 | | | | | | 51,089 | | |
EXPENSES | | | | | | | | | | | | | | | | | | | |
Interest and financing expenses | | | | | 17,121 | | | | | | 17,283 | | | | | | 18,825 | | |
Loss on extinguishment of debt | | | | | — | | | | | | — | | | | | | 2,732 | | |
Base management fee | | | | | 7,967 | | | | | | 9,049 | | | | | | 9,780 | | |
Incentive fees | | | | | 1,497 | | | | | | 244 | | | | | | 1,308 | | |
General and administrative expenses | | | | | 4,695 | | | | | | 4,695 | | | | | | 3,878 | | |
Expenses before incentive fee waiver | | | | | 31,280 | | | | | | 31,271 | | | | | | 36,523 | | |
Incentive fee waiver (See Note 6) | | | | | (288) | | | | | | — | | | | | | (958) | | |
Total expenses, net of incentive fee waiver | | | | | 30,992 | | | | | | 31,271 | | | | | | 35,565 | | |
NET INVESTMENT INCOME | | | | | 13,043 | | | | | | 16,022 | | | | | | 15,524 | | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND WRITTEN CALL OPTION: | | | | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investments: | | | | | | | | | | | | | | | | | | | |
Non-control/non-affiliate investments | | | | | 16,529 | | | | | | (15,714) | | | | | | (6,682) | | |
Affiliate investments | | | | | 2,288 | | | | | | 2,920 | | | | | | 4,926 | | |
Control investments | | | | | (38,573) | | | | | | (22,010) | | | | | | (22,433) | | |
Net realized loss on investments | | | | | (19,756) | | | | | | (34,804) | | | | | | (24,189) | | |
Net unrealized appreciation (depreciation) on investments: | | | | | | | | | | | | | | | | | | | |
Non-control/non-affiliate investments | | | | | (16,116) | | | | | | 16,487 | | | | | | (11,577) | | |
Affiliate investments | | | | | (2,632) | | | | | | (5,982) | | | | | | 4,436 | | |
Control investments | | | | | (1,558) | | | | | | (16,460) | | | | | | 14,190 | | |
Net unrealized appreciation (depreciation) on investments | | | | | (20,306) | | | | | | (5,955) | | | | | | 7,049 | | |
Net unrealized appreciation (depreciation) on written call option | | | | | — | | | | | | 6,795 | | | | | | (4,079) | | |
Net realized and unrealized loss on investments and written call option | | | | | (40,062) | | | | | | (33,964) | | | | | | (21,219) | | |
Tax benefit (provision) | | | | | (628) | | | | | | 1,916 | | | | | | (1,289) | | |
Total net realized and unrealized loss on investments and written call option, net of taxes | | | | | (40,690) | | | | | | (32,048) | | | | | | (22,508) | | |
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | | | $ | (27,647) | | | | | $ | (16,026) | | | | | $ | (6,984) | | |
NET DECREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED | | | | $ | (1.72) | | | | | $ | (1.00) | | | | | $ | (0.44) | | |
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED | | | | | 16,117,719 | | | | | | 15,993,436 | | | | | | 15,903,167 | | |
DISTRIBUTIONS PAID PER SHARE | | | | $ | 1.00 | | | | | $ | 1.00 | | | | | $ | 1.42 | | |
For the Year Ended December 31 | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
INVESTMENT INCOME | ||||||||||||
Interest and fee income: | ||||||||||||
Non-control/non-affiliate investments | $ | 31,084 | $ | 42,667 | $ | 39,535 | ||||||
Affiliate investments | 4,509 | 5,723 | 11,589 | |||||||||
Control investments | 6,896 | 10,718 | 5,406 | |||||||||
Total interest and fee income | 42,489 | 59,108 | 56,530 | |||||||||
Payment-in-kind interest and dividend income: | ||||||||||||
Non-control/non-affiliate investments | 4,503 | 4,965 | 2,644 | |||||||||
Affiliate investments | 1,898 | 383 | 1,363 | |||||||||
Control investments | 742 | 952 | 1,077 | |||||||||
Total payment-in-kind interest and dividend income | 7,143 | 6,300 | 5,084 | |||||||||
Dividend income: | ||||||||||||
Non-control/non-affiliate investments | 225 | 263 | 617 | |||||||||
Affiliate investments | 641 | 115 | 115 | |||||||||
Control investments | 355 | 2,414 | 1,369 | |||||||||
Total dividend income | 1,221 | 2,792 | 2,101 | |||||||||
Other Income | 125 | 85 | 256 | |||||||||
Interest income from cash and cash equivalents | 111 | 27 | 5 | |||||||||
Total investment income | 51,089 | 68,312 | 63,976 | |||||||||
EXPENSES | ||||||||||||
Interest and financing expenses | 18,825 | 19,711 | 19,022 | |||||||||
Loss on extinguishment of debt | 2,732 | — | — | |||||||||
Base management fee | 9,780 | 10,588 | 10,590 | |||||||||
Incentive fees | 1,308 | 6,842 | 6,043 | |||||||||
General and administrative expenses | 3,878 | 3,804 | 4,052 | |||||||||
Expenses before incentive fee waiver | 36,523 | 40,945 | 39,707 | |||||||||
Incentive fee waiver (See Note 7) | (958 | ) | (1,673 | ) | (1,058 | ) | ||||||
Total expenses, net of fee waivers | 35,565 | 39,272 | 38,649 | |||||||||
NET INVESTMENT INCOME | 15,524 | 29,040 | 25,327 | |||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND WRITTEN CALL OPTION: | ||||||||||||
Net realized gain (loss) from investments: | ||||||||||||
Non-control/non-affiliate investments | (6,682 | ) | 1,261 | 8,758 | ||||||||
Affiliate investments | 4,926 | (24,172 | ) | (9,109 | ) | |||||||
Control investments | (22,433 | ) | 145 | 5,787 | ||||||||
Net realized gain (loss) from investments | (24,189 | ) | (22,766 | ) | 5,436 | |||||||
Net unrealized appreciation (depreciation) on investments: | ||||||||||||
Non-control/non-affiliate investments | (11,577 | ) | (11,661 | ) | (4,161 | ) | ||||||
Affiliate investments | 4,436 | 4,124 | 1,142 | |||||||||
Control investments | 14,190 | 13,131 | (13,894 | ) | ||||||||
Net unrealized appreciation (depreciation) from investments | 7,049 | 5,594 | (16,913 | ) | ||||||||
Net unrealized depreciation on written call option | (4,079 | ) | (2,716 | ) | — | |||||||
Net loss on investments and written call option | (21,219 | ) | (19,888 | ) | (11,477 | ) | ||||||
Tax provision | (1,289 | ) | — | — | ||||||||
Total net realized and unrealized gain (loss) on investments and written call option, net of taxes | (22,508 | ) | (19,888 | ) | (11,477 | ) | ||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (6,984 | ) | $ | 9,152 | $ | 13,850 | |||||
NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED | $ | (0.44 | ) | $ | 0.58 | $ | 0.91 | |||||
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED | 15,903,167 | 15,819,175 | 15,210,577 | |||||||||
DISTRIBUTIONS PAID PER SHARE | $ | 1.42 | $ | 1.80 | $ | 2.38 |
| | | Common Stock | | | Additional Paid in Capital | | | Total Distributable Loss | | | Total | | ||||||||||||||||||
For the Years Ended December 31, 2017, 2018, and 2019 | | | Number of Shares | | | Par Value | | ||||||||||||||||||||||||
BALANCE, December 31, 2016 | | | | | 15,868,045 | | | | | $ | 159 | | | | | $ | 240,184 | | | | | $ | 10,239 | | | | | $ | 250,582 | | |
Net investment income | | | | | — | | | | | | — | | | | | | — | | | | | | 15,524 | | | | | | 15,524 | | |
Net realized loss on investments | | | | | — | | | | | | — | | | | | | — | | | | | | (24,189) | | | | | | (24,189) | | |
Net unrealized appreciation on investments | | | | | — | | | | | | — | | | | | | — | | | | | | 7,049 | | | | | | 7,049 | | |
Net unrealized depreciation on written call option | | | | | — | | | | | | — | | | | | | — | | | | | | (4,079) | | | | | | (4,079) | | |
Tax provision | | | | | — | | | | | | — | | | | | | — | | | | | | (1,289) | | | | | | (1,289) | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock issued under dividend reinvestment plan | | | | | 83,186 | | | | | | 1 | | | | | | 864 | | | | | | — | | | | | | 865 | | |
Distributions declared | | | | | — | | | | | | — | | | | | | — | | | | | | (22,576) | | | | | | (22,576) | | |
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | | | | | — | | | | | | — | | | | | | (21) | | | | | | 21 | | | | | | — | | |
BALANCE, December 31, 2017 | | | | | 15,951,231 | | | | | $ | 160 | | | | | $ | 241,027 | | | | | $ | (19,300) | | | | | $ | 221,887 | | |
Net investment income | | | | | — | | | | | | — | | | | | | — | | | | | | 16,022 | | | | | | 16,022 | | |
Net realized loss on investments | | | | | — | | | | | | — | | | | | | — | | | | | | (34,804) | | | | | | (34,804) | | |
Net unrealized depreciation on investments | | | | | — | | | | | | — | | | | | | — | | | | | | (5,955) | | | | | | (5,955) | | |
Net unrealized appreciation on written call option | | | | | — | | | | | | — | | | | | | — | | | | | | 6,795 | | | | | | 6,795 | | |
Tax benefit | | | | | — | | | | | | — | | | | | | — | | | | | | 1,916 | | | | | | 1,916 | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock issued under dividend reinvestment plan | | | | | 100,316 | | | | | | 1 | | | | | | 768 | | | | | | — | | | | | | 769 | | |
Distributions declared | | | | | — | | | | | | — | | | | | | — | | | | | | (15,986) | | | | | | (15,986) | | |
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | | | | | — | | | | | | — | | | | | | (38) | | | | | | 38 | | | | | | — | | |
BALANCE, December 31, 2018 | | | | | 16,051,547 | | | | | $ | 161 | | | | | $ | 241,757 | | | | | $ | (51,274) | | | | | $ | 190,644 | | |
Net investment income | | | | | — | | | | | | — | | | | | | — | | | | | | 13,043 | | | | | | 13,043 | | |
Net realized loss on investments | | | | | — | | | | | | — | | | | | | — | | | | | | (19,756) | | | | | | (19,756) | | |
Net unrealized depreciation on investments | | | | | — | | | | | | — | | | | | | — | | | | | | (20,306) | | | | | | (20,306) | | |
Tax provision | | | | | — | | | | | | — | | | | | | — | | | | | | (628) | | | | | | (628) | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stock issued under dividend reinvestment plan | | | | | 152,222 | | | | | | 1 | | | | | | 1,225 | | | | | | — | | | | | | 1,226 | | |
Distributions declared | | | | | — | | | | | | — | | | | | | — | | | | | | (16,110) | | | | | | (16,110) | | |
Return of capital | | | | | — | | | | | | — | | | | | | (2,659) | | | | | | 2,659 | | | | | | — | | |
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | | | | | — | | | | | | — | | | | | | (2,437) | | | | | | 2,437 | | | | | | — | | |
BALANCE, December 31, 2019 | | | | | 16,203,769 | | | | | $ | 162 | | | | | $ | 237,886 | | | | | $ | (89,935) | | | | | $ | 148,113 | | |
Common Stock | Additional Paid in Capital | Undistributed Net Investment Income | Accumulated Net Realized Gains (Losses) | Net Unrealized Appreciation (Depreciation) on Investments, net of Deferred Taxes | Net Unrealized Depreciation on Written Call Option | Total | ||||||||||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||||||||||||
BALANCE, December 31, 2014 | 12,974,420 | $ | 130 | $ | 188,408 | $ | 12,314 | $ | 803 | $ | 39,182 | $ | — | $ | 240,837 | |||||||||||||||||
Net investment income | — | — | — | 25,327 | — | — | — | 25,327 | ||||||||||||||||||||||||
Net realized gain from investments | — | — | — | — | 5,436 | — | — | 5,436 | ||||||||||||||||||||||||
Net change in unrealized depreciation on investments | — | — | — | — | — | (16,913 | ) | — | (16,913 | ) | ||||||||||||||||||||||
Issuance of common stock, net of offering and underwriting costs | 3,500,000 | 35 | 61,665 | — | — | — | — | 61,700 | ||||||||||||||||||||||||
Repurchase and retirement of common stock under stock repurchase program | (774,858 | ) | (8 | ) | (11,992 | ) | — | — | — | — | (12,000 | ) | ||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Stock issued under dividend reinvestment plan | 77,783 | 1 | 1,023 | — | — | — | — | 1,024 | ||||||||||||||||||||||||
Distributions declared | — | — | — | (25,673 | ) | (10,936 | ) | — | — | (36,609 | ) | |||||||||||||||||||||
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | — | — | — | (3,398 | ) | 3,398 | — | — | — | |||||||||||||||||||||||
BALANCE, December 31, 2015 | 15,777,345 | $ | 158 | $ | 239,104 | $ | 8,570 | $ | (1,299 | ) | $ | 22,269 | $ | — | $ | 268,802 | ||||||||||||||||
Net investment income | — | — | — | 29,040 | — | — | — | 29,040 | ||||||||||||||||||||||||
Net realized loss from investments | — | — | — | — | (22,766 | ) | — | — | (22,766 | ) | ||||||||||||||||||||||
Net change in unrealized appreciation on investments | — | — | — | — | — | 5,594 | — | 5,594 | ||||||||||||||||||||||||
Net change in unrealized depreciation on written call option | — | — | — | — | — | — | (2,716 | ) | (2,716 | ) | ||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Stock issued under dividend reinvestment plan | 90,700 | 1 | 1,102 | — | — | — | — | 1,103 | ||||||||||||||||||||||||
Distributions declared | — | — | — | (28,475 | ) | — | — | — | (28,475 | ) | ||||||||||||||||||||||
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | — | — | (22 | ) | 13,838 | (13,816 | ) | — | — | — | ||||||||||||||||||||||
BALANCE, December 31, 2016 | 15,868,045 | $ | 159 | $ | 240,184 | $ | 22,973 | $ | (37,881 | ) | $ | 27,863 | $ | (2,716 | ) | $ | 250,582 | |||||||||||||||
Net investment income | — | — | — | 15,524 | — | — | — | 15,524 | ||||||||||||||||||||||||
Net realized loss from investments | — | — | — | — | (24,189 | ) | — | — | (24,189 | ) | ||||||||||||||||||||||
Net change in unrealized appreciation on investments | — | — | — | — | — | 7,049 | — | 7,049 | ||||||||||||||||||||||||
Net change in unrealized depreciation on written call option | — | — | — | — | — | — | (4,079 | ) | (4,079 | ) | ||||||||||||||||||||||
Tax provision | — | — | — | — | — | (1,289 | ) | — | (1,289 | ) | ||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Stock issued under dividend reinvestment plan | 83,186 | 1 | 864 | — | — | — | — | 865 | ||||||||||||||||||||||||
Distributions declared | — | — | — | (22,576 | ) | — | — | — | (22,576 | ) | ||||||||||||||||||||||
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles | — | — | (21 | ) | (67 | ) | 88 | — | — | — | ||||||||||||||||||||||
BALANCE, December 31, 2017 | 15,951,231 | $ | 160 | $ | 241,027 | $ | 15,854 | $ | (61,982 | ) | $ | 33,623 | $ | (6,795 | ) | $ | 221,887 |
| | | For the Years Ended December 31, | | |||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | | | | | | | | | | | | |
Net decrease in net assets resulting from operations | | | | $ | (27,647) | | | | | $ | (16,026) | | | | | $ | (6,984) | | |
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities: | | | | | | | | | | | | | | | | | | | |
Purchase of investments | | | | | (77,831) | | | | | | (107,802) | | | | | | (82,750) | | |
Repayments and sales of investments | | | | | 128,122 | | | | | | 123,517 | | | | | | 115,810 | | |
Net realized loss on investments | | | | | 19,756 | | | | | | 34,804 | | | | | | 24,189 | | |
Net unrealized (appreciation) depreciation on investments | | | | | 20,306 | | | | | | 5,955 | | | | | | (7,049) | | |
Payment-in-kind interest and dividends | | | | | (2,962) | | | | | | (4,348) | | | | | | (7,143) | | |
Accretion of original issue discount on investments | | | | | (996) | | | | | | (1,114) | | | | | | (1,357) | | |
Payments from written call option | | | | | — | | | | | | (20) | | | | | | — | | |
Net unrealized (appreciation) depreciation on written call option | | | | | — | | | | | | (6,795) | | | | | | 4,079 | | |
Amortization of deferred financing fees | | | | | 2,370 | | | | | | 1,885 | | | | | | 2,100 | | |
Loss on extinguishment of debt | | | | | — | | | | | | — | | | | | | 2,732 | | |
Tax provision (benefit) | | | | | 628 | | | | | | (1,916) | | | | | | 1,289 | | |
Changes in assets and liabilities: | | | | | | | | | | | | | | | | | | | |
Interest and dividend receivable | | | | | 2,033 | | | | | | (802) | | | | | | 2,759 | | |
Due from related parties | | | | | — | | | | | | 95 | | | | | | 87 | | |
Prepaid expenses | | | | | (170) | | | | | | (145) | | | | | | 197 | | |
Other assets | | | | | (32) | | | | | | (28) | | | | | | 17 | | |
Due to related parties | | | | | — | | | | | | — | | | | | | (35) | | |
Management and incentive fees payable | | | | | 1,226 | | | | | | 315 | | | | | | (4,254) | | |
Interest and financing fees payable | | | | | (624) | | | | | | (78) | | | | | | 484 | | |
Trade settlement payable | | | | | — | | | | | | (175) | | | | | | 175 | | |
Accounts payable and accrued expenses | | | | | 418 | | | | | | 100 | | | | | | (536) | | |
NET CASH PROVIDED BY OPERATING ACTIVITIES | | | | | 64,597 | | | | | | 27,422 | | | | | | 43,810 | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | |
Paydowns on SBA debentures | | | | | (15,700) | | | | | | (5,000) | | | | | | — | | |
Proceeds from Credit Facility | | | | | 16,500 | | | | | | 31,000 | | | | | | 9,000 | | |
Repayments on Credit Facility | | | | | (26,500) | | | | | | (30,000) | | | | | | (44,000) | | |
Issuance of 2022 Notes | | | | | — | | | | | | — | | | | | | 75,000 | | |
Issuance of 2022 Convertible Notes | | | | | — | | | | | | — | | | | | | 52,088 | | |
Repayment of 2021 Notes | | | | | — | | | | | | — | | | | | | (113,438) | | |
Distributions paid to shareholders | | | | | (14,884) | | | | | | (15,217) | | | | | | (21,711) | | |
Deferred financing fees paid | | | | | (987) | | | | | | (131) | | | | | | (5,809) | | |
NET CASH USED IN FINANCING ACTIVITIES | | | | | (41,571) | | | | | | (19,348) | | | | | | (48,870) | | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | | | 23,026 | | | | | | 8,074 | | | | | | (5,060) | | |
CASH AND CASH EQUIVALENTS, beginning of year | | | | | 39,295 | | | | | | 31,221 | | | | | | 36,281 | | |
CASH AND CASH EQUIVALENTS, end of year | | | | $ | 62,321 | | | | | $ | 39,295 | | | | | $ | 31,221 | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | | | | | | | | | |
Cash paid for interest | | | | $ | 13,784 | | | | | $ | 14,139 | | | | | $ | 15,503 | | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS | | | | | | | | | | | | | | | | | | | |
Distributions paid through dividend reinvestment plan share issuances | | | | $ | 1,226 | | | | | $ | 769 | | | | | $ | 865 | | |
For the Year Ended December 31 | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (6,984 | ) | $ | 9,152 | $ | 13,850 | |||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||||||||
Purchase of investments | (82,750 | ) | (120,844 | ) | (260,640 | ) | ||||||
Repayments and sales of investments | 115,810 | 163,564 | 142,713 | |||||||||
Net realized (gain) loss on investments | 24,189 | 22,766 | (5,436 | ) | ||||||||
Net unrealized (appreciation) depreciation on investments | (7,049 | ) | (5,594 | ) | 16,913 | |||||||
Payment-in-kind interest and dividends | (7,143 | ) | (6,300 | ) | (5,084 | ) | ||||||
Accretion of original issue discount on investments | (1,357 | ) | (2,775 | ) | (585 | ) | ||||||
Proceeds from written call option | — | 20 | — | |||||||||
Net unrealized depreciation on written call option | 4,079 | 2,716 | — | |||||||||
Amortization of deferred financing fees | 2,100 | 2,149 | 1,966 | |||||||||
Loss on extinguishment of debt | 2,732 | — | — | |||||||||
Tax provision | 1,289 | — | — | |||||||||
Changes in assets and liabilities: | ||||||||||||
Interest and dividend receivable | 2,759 | (345 | ) | (2,277 | ) | |||||||
Due from related parties | 87 | 74 | 262 | |||||||||
Prepaid expenses | 197 | (3 | ) | 12 | ||||||||
Other assets | 17 | 36 | 166 | |||||||||
Due to related parties | (35 | ) | 29 | (2 | ) | |||||||
Management and incentive fee payable | (4,254 | ) | 4,739 | 1,528 | ||||||||
Interest and financing fees payable | 484 | (330 | ) | 85 | ||||||||
Accounts payable and accrued expenses | (536 | ) | 69 | 145 | ||||||||
Trade settlement payable | 175 | — | — | |||||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 43,810 | 69,123 | (96,384 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Paydowns on SBA debentures | — | (13,500 | ) | (8,000 | ) | |||||||
Proceeds from Credit Facility | 9,000 | 29,000 | 105,000 | |||||||||
Payments to Credit Facility | (44,000 | ) | (55,000 | ) | (35,000 | ) | ||||||
Issuance of 2022 Notes | 75,000 | — | — | |||||||||
Issuance of 2022 Convertible Notes | 52,088 | — | — | |||||||||
Repayment of 2021 Notes | (113,438 | ) | — | — | ||||||||
Issuance of common stock, net of offering and underwriting costs | — | — | 61,700 | |||||||||
Distributions paid to shareholders | (21,711 | ) | (27,372 | ) | (35,585 | ) | ||||||
Repurchases of common stock under stock repurchase program | — | — | (12,000 | ) | ||||||||
Deferred financing fees paid | (5,809 | ) | (75 | ) | (733 | ) | ||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (48,870 | ) | (66,947 | ) | 75,382 | |||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (5,060 | ) | 2,176 | (21,002 | ) | |||||||
CASH AND CASH EQUIVALENTS, beginning of year | 36,281 | 34,105 | 55,107 | |||||||||
CASH AND CASH EQUIVALENTS, end of year | $ | 31,221 | $ | 36,281 | $ | 34,105 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||||||
Cash paid for interest | $ | 15,503 | $ | 17,591 | $ | 16,349 | ||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||||||||||||
Distributions paid through dividend reinvestment plan share issuances | $ | 865 | $ | 1,103 | $ | 1,024 |
Portfolio Company, Country(1),(2),(3),(4) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-control/non-affiliated investments – 130.0% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio Company, Country(1),(2),(3),(4),(5) | | Industry | | Type of Investment | | Principal Amount | | Cost | | Fair Value | | % of Net Assets | | ||||||||||||||||||||||||||||||||||||||||||
Non-control/non-affiliated investments – 162.8% | Non-control/non-affiliated investments – 162.8% | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||
Non-control/non-affiliated investments – United States | Non-control/non-affiliated investments – United States | Non-control/non-affiliated investments – United States | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
3 Bridge Solutions, LLC | IT Consulting | First Lien Debt (10.38% Cash (1 month LIBOR + 9.0%, 1% Floor), Due 12/4/22) | $ | 11,250 | $ | 11,250 | $ | 11,250 | 5.1 | % | | IT Consulting | | First Lien Debt (10.7% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 12/4/22) | | | $ | 13,274 | | | | $ | 13,274 | | | | $ | 13,274 | | | | | 9.0% | | | ||||||||||||||||||||
3 Bridge Solutions, LLC | IT Consulting | Preferred Units (965,250 units, 8% PIK)(5) | 971 | 971 | 0.4 | % | | IT Consulting | | Preferred Units (965 units) | | | | | | | | | 1,090 | | | | | 499 | | | | | 0.3% | | | ||||||||||||||||||||||||
3 Bridge Solutions, LLC | IT Consulting | Membership Units (39,000 units) | 10 | 10 | 0.0 | % | | IT Consulting | | Membership Units (39,000 units) | | | | | | | | | 10 | | | | | — | | | | | 0.0% | | | ||||||||||||||||||||||||
12,231 | 12,231 | 5.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 14,374 | | | | | 13,773 | | | | | 9.3% | | | ||||||||||||||||||||||||||||||
Alternative Biomedical Solutions, LLC | Healthcare | First Lien Debt (11.74% Cash, Due 12/18/22)(6) | 13,000 | 13,000 | 13,000 | 5.9 | % | | Healthcare | | First Lien Debt (8.0% Cash, 3.8% PIK, Due 12/18/22) | | | | 5,491 | | | | | 5,331 | | | | | 5,319 | | | | | 3.6% | | | |||||||||||||||||||||||
Alternative Biomedical Solutions, LLC | Healthcare | Membership Units (20,092 units) | 800 | 800 | 0.4 | % | | Healthcare | | First Lien Debt (8.0% Cash, 3.8% PIK, Due 12/18/22)(6) | | | | 13,125 | | | | | 13,125 | | | | | 10,624 | | | | | 7.2% | | | ||||||||||||||||||||||||
13,800 | 13,800 | 6.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Alternative Biomedical Solutions, LLC | | Healthcare | | Membership Units (20,092 units) | | | | | | | | | 800 | | | | | — | | | | | 0.0% | | | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 19,256 | | | | | 15,943 | | | | | 10.8% | | | ||||||||||||||||||||||||||||||
American Clinical Solutions, LLC | Healthcare | First Lien Debt (10.5% Cash, 1% PIK, Due 6/11/20) | 9,068 | 9,068 | 7,568 | 3.4 | % | | Healthcare | | First Lien Debt (7.0% Cash, Due 12/31/22) | | | | 3,500 | | | | | 3,500 | | | | | 3,500 | | | | | 2.3% | | | |||||||||||||||||||||||
9,068 | 7,568 | 3.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
American Exteriors, LLC | Replacement Window Manufacturer | First Lien Debt (10% PIK, Due 1/1/19)(7)(8) | 8,287 | 5,679 | 1,880 | 0.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
American Exteriors, LLC | Replacement Window Manufacturer | Common Stock Warrants (10% fully diluted) | — | — | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
5,679 | 1,880 | 0.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
American Clinical Solutions, LLC | | Healthcare | | First Lien Debt (2.0% PIK, Due 12/31/22)(7) | | | | 6,000 | | | | | 3,485 | | | | | 3,485 | | | | | 2.4% | | | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 6,985 | | | | | 6,985 | | | | | 4.7% | | | ||||||||||||||||||||||||||||||
AmeriMark Direct, LLC | Consumer Products | First Lien Debt (12.75% Cash, Due 9/8/21) | 19,100 | 18,713 | 19,100 | 8.6 | % | | Consumer Products | | First Lien Debt (14.3% Cash, Due 9/8/21) | | | | 16,123 | | | | | 15,974 | | | | | 15,633 | | | | | 10.6% | | | |||||||||||||||||||||||
18,713 | 19,100 | 8.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
B&W Quality Growers, LLC | Farming | Membership Unit Warrants (91,739 Units) | — | 5,581 | 2.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
— | 5,581 | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 15,974 | | | | | 15,633 | | | | | 10.6% | | | ||||||||||||||||||||||||||||||
BigMouth, Inc. | Consumer Products | First Lien Debt (13.3% Cash, Due 11/14/21)(6) | 9,790 | 9,790 | 9,790 | 4.4 | % | | Consumer Products | | First Lien Debt (10.3% Cash (1 month LIBOR + 8.5%, 0.5% Floor, Due 11/14/21)(8) | | | | 857 | | | | | 857 | | | | | 857 | | | | | 0.6% | | | |||||||||||||||||||||||
BigMouth, Inc. | Consumer Products | Series A Preferred Stock (350,000 shares, 8% PIK)(5) | 382 | 722 | 0.3 | % | | Consumer Products | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 0.5% Floor, Due 11/14/21) | | | | 8,784 | | | | | 8,784 | | | | | 8,628 | | | | | 5.8% | | | ||||||||||||||||||||||||
10,172 | 10,512 | 4.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 9,641 | | | | | 9,485 | | | | | 6.4% | | | ||||||||||||||||||||||||||||||
Bluestem Brands, Inc. | Online Merchandise Retailer | First Lien Debt (9.07% Cash (1 month LIBOR + 7.5%, 1% Floor), Due 11/7/20) | 4,029 | 3,965 | 3,755 | 1.7 | % | | Online Merchandise Retailer | | First Lien Debt (9.3% Cash (1 month LIBOR + 7.5%, 1.0% Floor), Due 11/7/20) | | | | 3,529 | | | | | 3,529 | | | | | 2,877 | | | | | 1.9% | | | |||||||||||||||||||||||
3,965 | 3,755 | 1.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Brunswick Bowling Products, Inc. | Bowling Products | First Lien Debt (8% Cash (1 month LIBOR + 6%, 2% Floor), Due 5/22/20) | 1,600 | 1,600 | 1,600 | 0.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Brunswick Bowling Products, Inc. | Bowling Products | First Lien Debt (16.25% Cash (1 month LIBOR + 14.25%, 2% Floor), Due 5/22/20) | 5,586 | 5,586 | 5,586 | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
7,186 | 7,186 | 3.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 3,529 | | | | | 2,877 | | | | | 1.9% | | | ||||||||||||||||||||||||||||||
Burke America Parts Group, LLC | Home Repair Parts Manufacturer | Membership Units (14 units) | 5 | 2,767 | 1.2 | % | | Home Repair Parts Manufacturer | | Membership Units (14 units) | | | | | | | | | 5 | | | | | 2,489 | | | | | 1.7% | | | ||||||||||||||||||||||||
5 | 2,767 | 1.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 5 | | | | | 2,489 | | | | | 1.7% | | | ||||||||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | | Computer Supply Retail | | First Lien Debt(9) | | | | | | | | | 1,532 | | | | | 1,490 | | | | | 1.0% | | | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 1,532 | | | | | 1,490 | | | | | 1.0% | | | ||||||||||||||||||||||||||||||
California Pizza Kitchen, Inc. | Restaurant | Second Lien Debt (11.57% Cash (1 month LIBOR + 10%, 1% Floor), Due 8/23/23) | 5,000 | 4,880 | 4,880 | 2.2 | % | | Restaurant | | Second Lien Debt (11.9% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 8/23/23) | | | | 5,000 | | | | | 4,927 | | | | | 4,697 | | | | | 3.2% | | | |||||||||||||||||||||||
4,880 | 4,880 | 2.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Caregiver Services, Inc. | In-Home Healthcare Services | Common Stock (293,186 shares) | 258 | 54 | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Caregiver Services, Inc. | In-Home Healthcare Services | Common Stock Warrants (655,908 units)(9) | 264 | 120 | 0.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
522 | 174 | 0.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 4,927 | | | | | 4,697 | | | | | 3.2% | | | ||||||||||||||||||||||||||||||
Chicken Soup for the Soul, LLC | | Multi-platform Media and Consumer Products | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 12/13/20) | | | | 13,000 | | | | | 13,000 | | | | | 13,000 | | | | | 8.8% | | | ||||||||||||||||||||||||||||||
| | | | | | | | | | | | | 13,000 | | | | | 13,000 | | | | | 8.8% | | | ||||||||||||||||||||||||||||||
Chief Fire Intermediate, Inc. | | Security System Services | | First Lien Debt (8.7% Cash (1 month LIBOR + 7.0%, 1.6% Floor), Due 11/8/24) | | | | 8,100 | | | | | 8,100 | | | | | 8,100 | | | | | 5.5% | | | ||||||||||||||||||||||||||||||
Chief Fire Intermediate, Inc. | | Security System Services | | Class A Preferred Units (34,740 units, 10.0% PIK Dividend)(10) | | | | | | | | | 913 | | | | | 913 | | | | | 0.6% | | |
Portfolio Company, Country(1),(2),(3),(4),(5) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Chief Fire Intermediate, Inc. | | | Security System Services | | | Class B Common Units (3,510 units) | | | | | | | | | | $ | — | | | | | $ | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 9,013 | | | | | | 9,013 | | | | | | 6.1% | | |
CIS Secure Computing, Inc. | | | Government Services | | | First Lien Debt (10.2% Cash (1 month LIBOR + 8.5%, 1.0% Floor), 1.0% PIK, Due 9/14/22) | | | | $ | 9,389 | | | | | | 9,389 | | | | | | 9,389 | | | | | | 6.3% | | |
CIS Secure Computing, Inc. | | | Government Services | | | Common Stock (46,163 shares) | | | | | | | | | | | 1,000 | | | | | | 1,890 | | | | | | 1.3% | | |
| | | | | | | | | | | | | | | | | 10,389 | | | | | | 11,279 | | | | | | 7.6% | | |
Corporate Visions, Inc. | | | Sales & Marketing Services | | | Subordinated Debt (9.0% Cash, 2.0% PIK, Due 11/29/21) | | | | | 19,327 | | | | | | 19,327 | | | | | | 18,962 | | | | | | 12.8% | | |
Corporate Visions, Inc. | | | Sales & Marketing Services | | | Common Stock (15,750 shares) | | | | | | | | | | | 1,575 | | | | | | 329 | | | | | | 0.2% | | |
| | | | | | | | | | | | | | | | | 20,902 | | | | | | 19,291 | | | | | | 13.0% | | |
Currency Capital, LLC | | | Financial Services | | | First Lien Debt (13.7% Cash (1 month LIBOR + 12.0%, 0.5% Floor), 2.0% PIK, Due 1/2/20)(11) | | | | | 16,269 | | | | | | 16,269 | | | | | | 16,269 | | | | | | 11.0% | | |
Currency Capital, LLC | | | Financial Services | | | Class A Preferred Units (2,000,000 units)(11) | | | | | | | | | | | 2,000 | | | | | | 2,504 | | | | | | 1.7% | | |
| | | | | | | | | | | | | | | | | 18,269 | | | | | | 18,773 | | | | | | 12.7% | | |
Flavors Holdings, Inc. | | | Food Product Manufacturer | | | First Lien Debt (7.7% Cash (3 month LIBOR + 5.8%, 1.0% Floor), Due 4/3/20) | | | | | 5,789 | | | | | | 5,778 | | | | | | 5,767 | | | | | | 3.9% | | |
Flavors Holdings, Inc. | | | Food Product Manufacturer | | | Second Lien Debt (11.9% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 10/3/21) | | | | | 12,000 | | | | | | 11,878 | | | | | | 11,842 | | | | | | 8.0% | | |
| | | | | | | | | | | | | | | | | 17,656 | | | | | | 17,609 | | | | | | 11.9% | | |
Freedom Electronics, LLC | | | Electronic Machine Repair | | | First Lien Debt (8.7% Cash, Due 12/20/23)(6)(12) | | | | | 5,940 | | | | | | 5,940 | | | | | | 5,940 | | | | | | 4.0% | | |
Freedom Electronics, LLC | | | Electronic Machine Repair | | | Membership Units (181,818 units) | | | | | | | | | | | 182 | | | | | | 160 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 6,122 | | | | | | 6,100 | | | | | | 4.1% | | |
HUMC Opco, LLC | | | Healthcare | | | First Lien Debt (9.0% Cash, Due 8/16/20) | | | | | 5,000 | | | | | | 5,000 | | | | | | 5,000 | | | | | | 3.4% | | |
| | | | | | | | | | | | | | | | | 5,000 | | | | | | 5,000 | | | | | | 3.4% | | |
Installs, LLC | | | Logistics | | | First Lien Debt (9.3% Cash, Due 6/20/23)(6) | | | | | 2,924 | | | | | | 2,924 | | | | | | 2,924 | | | | | | 2.0% | | |
| | | | | | | | | | | | | | | | | 2,924 | | | | | | 2,924 | | | | | | 2.0% | | |
J5 Infrastructure Partners, LLC | | | Wireless Deployment Services | | | First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24)(13) | | | | | — | | | | | | — | | | | | | — | | | | | | 0.0% | | |
J5 Infrastructure Partners, LLC | | | Wireless Deployment Services | | | First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24) | | | | | 7,000 | | | | | | 7,000 | | | | | | 7,000 | | | | | | 4.7% | | |
| | | | | | | | | | | | | | | | | 7,000 | | | | | | 7,000 | | | | | | 4.7% | | |
Jurassic Quest Holdings, LLC | | | Entertainment | | | First Lien Debt (9.5% Cash (1 month LIBOR + 7.5%, 2.0% Floor), Due 5/1/24)(14) | | | | | 10,827 | | | | | | 10,827 | | | | | | 10,827 | | | | | | 7.3% | | |
Jurassic Quest Holdings, LLC | | | Entertainment | | | Preferred Units (375,000 units) | | | | | | | | | | | 388 | | | | | | 85 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 11,215 | | | | | | 10,912 | | | | | | 7.4% | | |
MicroHoldco, LLC | | | General Industrial | | | Preferred Units(9) | | | | | | | | | | | 838 | | | | | | 838 | | | | | | 0.6% | | |
| | | | | | | | | | | | | | | | | 838 | | | | | | 838 | | | | | | 0.6% | | |
|
Portfolio Company, Country(1),(2),(3),(4) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Cedar Electronics Holding Corp. | Consumer Electronics | Subordinated Debt (12% Cash, Due 12/26/20)(7) | $ | 21,550 | $ | 21,550 | $ | 3,498 | 1.6 | % | ||||||||||||||
21,550 | 3,498 | 1.6 | % | |||||||||||||||||||||
CIS Secure Computing, Inc. | Government Services | First Lien Debt (9.88% Cash (1 month LIBOR + 8.5%, 1% Floor), 1% PIK, Due 9/14/22)(10) | 9,116 | 9,116 | 9,116 | 4.1 | % | |||||||||||||||||
CIS Secure Computing, Inc. | Government Services | Common Stock (46,163 shares) | 1,000 | 1,204 | 0.5 | % | ||||||||||||||||||
10,116 | 10,320 | 4.6 | % | |||||||||||||||||||||
Corporate Visions, Inc. | Sales & Marketing Services | Subordinated Debt (9% Cash, 2% PIK, Due 11/29/21) | 18,159 | 18,159 | 16,995 | 7.7 | % | |||||||||||||||||
Corporate Visions, Inc. | Sales & Marketing Services | Common Stock (15,750 shares) | 1,575 | 393 | 0.2 | % | ||||||||||||||||||
19,734 | 17,388 | 7.9 | % | |||||||||||||||||||||
Currency Capital, LLC | Financial Services | First Lien Debt (12.38% Cash (1 month LIBOR + 11%, 0.50% Floor) Due 1/20/22)(11) | 17,000 | 17,000 | 17,000 | 7.7 | % | |||||||||||||||||
Currency Capital, LLC | Financial Services | Class A Preferred Units (2,000,000 units)(11) | 2,000 | 1,905 | 0.9 | % | ||||||||||||||||||
19,000 | 18,905 | 8.6 | % | |||||||||||||||||||||
Flavors Holdings, Inc. | Food Product Manufacturer | First Lien Debt (7.44% Cash (3 month LIBOR + 5.75%, 1% Floor), Due 4/3/20) | 6,700 | 6,589 | 5,911 | 2.7 | % | |||||||||||||||||
Flavors Holdings, Inc. | Food Product Manufacturer | Second Lien Debt (11.69% Cash (3 month LIBOR + 10%, 1% Floor), Due 10/3/21) | 12,000 | 11,740 | 10,311 | 4.6 | % | |||||||||||||||||
18,329 | 16,222 | 7.3 | % | |||||||||||||||||||||
Nth Degree, Inc. | Business Services | First Lien Debt (8.38% Cash (1 month LIBOR + 7%, 1% Floor), 1% PIK, Due 12/14/20) | 8,833 | 8,833 | 8,833 | 4.0 | % | |||||||||||||||||
Nth Degree, Inc. | Business Services | First Lien Debt (12.88% Cash (1 month LIBOR + 11.5%, 1% Floor), 2% PIK, Due 12/14/20) | 7,200 | 7,200 | 7,200 | 3.2 | % | |||||||||||||||||
Nth Degree, Inc. | Business Services | Preferred Stock (2,400 Units, 10% PIK dividend)(5) | 2,938 | 11,140 | 5.0 | % | ||||||||||||||||||
18,971 | 27,173 | 12.2 | % | |||||||||||||||||||||
Sequoia Healthcare Management, LLC | Healthcare Management | First Lien Debt (12% Cash, 4% PIK, Due 7/17/19) | 9,014 | 8,964 | 9,014 | 4.1 | % | |||||||||||||||||
8,964 | 9,014 | 4.1 | % | |||||||||||||||||||||
Spectra Services Holdings, LLC | Refrigeration/HVAC services | First Lien Debt (10% Cash, 4% PIK, Due 12/27/22) | 7,450 | 7,450 | 7,450 | 3.4 | % | |||||||||||||||||
Spectra Services Holdings, LLC | Refrigeration/HVAC services | Class A Units (1,283,823 units, 4% Cash dividend, 11% PIK dividend)(5) | 1,286 | 1,286 | 0.6 | % | ||||||||||||||||||
Spectra Services Holdings, LLC | Refrigeration/HVAC services | Class B Units (257 units) | — | — | 0.0 | % | ||||||||||||||||||
8,736 | 8,736 | 4.0 | % | |||||||||||||||||||||
Sur La Table, Inc. | Retail | First Lien Debt (12% Cash, Due 7/28/20) | 15,000 | 15,000 | 15,000 | 6.8 | % | |||||||||||||||||
15,000 | 15,000 | 6.8 | % | |||||||||||||||||||||
Taylor Precision Products, Inc. | Household Product Manufacturer | Series C Preferred Stock (379 shares) | 758 | 1,316 | 0.6 | % | ||||||||||||||||||
758 | 1,316 | 0.6 | % | |||||||||||||||||||||
Vintage Stock, Inc. | Specialty Retail | First Lien Debt (13.86% Cash (1 month LIBOR + 12.5%, 0.5% floor), 3% PIK, Due 11/3/21) | 20,713 | 20,713 | 20,713 | 9.3 | % | |||||||||||||||||
20,713 | 20,713 | 9.3 | % | |||||||||||||||||||||
Vology, Inc. | Information Technology | Subordinated Debt (15% Cash (3 month LIBOR + 14%, 1% Ceiling), 4% PIK Due 6/30/20) | 8,374 | 8,374 | 8,374 | 3.8 | % | |||||||||||||||||
8,374 | 8,374 | 3.8% |
Portfolio Company, Country(1),(2),(3),(4),(5) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Portrait Studio, LLC | | | Professional and Personal Digital Imaging | | | First Lien Debt(9) | | | | | | | | | | $ | 510 | | | | | $ | 510 | | | | | | 0.3% | | |
| | | | | | | | | | | | | | | | | 510 | | | | | | 510 | | | | | | 0.3% | | |
Rapid Fire Protection, Inc. | | | Security System Services | | | First Lien Debt (9.2% Cash, Due 11/22/24) (6)(15) | | | | $ | 6,550 | | | | | | 6,550 | | | | | | 6,550 | | | | | | 4.4% | | |
Rapid Fire Protection, Inc. | | | Security System Services | | | Common Stock (363 shares) | | | | | | | | | | | 500 | | | | | | 500 | | | | | | 0.4% | | |
| | | | | | | | | | | | | | | | | 7,050 | | | | | | 7,050 | | | | | | 4.8% | | |
Seitel, Inc. | | | Data Services | | | First Lien Debt (10.0% Cash (1 month LIBOR + 8.3%, 1.0% Floor), Due 3/15/23) | | | | | 4,749 | | | | | | 4,749 | | | | | | 4,749 | | | | | | 3.2% | | |
| | | | | | | | | | | | | | | | | 4,749 | | | | | | 4,749 | | | | | | 3.2% | | |
Sequoia Healthcare Management, LLC | | | Healthcare Management | | | First Lien Debt (12.8% Cash, Due 6/26/20) | | | | | 12,744 | | | | | | 12,744 | | | | | | 12,607 | | | | | | 8.5% | | |
| | | | | | | | | | | | | | | | | 12,744 | | | | | | 12,607 | | | | | | 8.5% | | |
Sur La Table, Inc. | | | Retail | | | First Lien Debt (10.9% Cash (3 month LIBOR + 9.0%, 1.0% Floor), Due 7/31/22)(16)(17) | | | | | 10,528 | | | | | | 10,528 | | | | | | 10,045 | | | | | | 6.8% | | |
| | | | | | | | | | | | | | | | | 10,528 | | | | | | 10,045 | | | | | | 6.8% | | |
Taylor Precision Products, Inc. | | | Household Product Manufacturer | | | Series C Preferred Stock (379 shares) | | | | | | | | | | | 758 | | | | | | 758 | | | | | | 0.5% | | |
| | | | | | | | | | | | | | | | | 758 | | | | | | 758 | | | | | | 0.5% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | First Lien Debt (9.3% Cash, Due 12/14/23)(6)(12) | | | | | 6,930 | | | | | | 6,930 | | | | | | 6,822 | | | | | | 4.6% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | Class A Preferred Units (500 Units) | | | | | | | | | | | 540 | | | | | | 204 | | | | | | 0.1% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | Class C Units (500 Units) | | | | | | | | | | | 1 | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 7,471 | | | | | | 7,026 | | | | | | 4.7% | | |
U.S. Well Services, Inc. | | | Oil & Gas Services | | | Class A Common Stock (77,073 shares) (11)(18) | | | | | | | | | | | 771 | | | | | | 146 | | | | | | 0.1% | | |
U.S. Well Services, Inc. | | | Oil & Gas Services | | | Class B Common Stock (1,125,426 shares)(11)(18) | | | | | | | | | | | 6,701 | | | | | | 2,127 | | | | | | 1.4% | | |
| | | | | | | | | | | | | | | | | 7,472 | | | | | | 2,273 | | | | | | 1.5% | | |
Xirgo Technologies, LLC | | | Information Technology | | | Membership Units (600,000 units) | | | | | | | | | | | 600 | | | | | | 917 | | | | | | 0.6% | | |
| | | | | | | | | | | | | | | | | 600 | | | | | | 917 | | | | | | 0.6% | | |
Sub Total Non-control/non-affiliated investments – United States | | | | | | | | | | $ | 250,433 | | | | | $ | 241,046 | | | | | | 162.8% | | | ||||||
Affiliate Investments – 66.7% | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Affiliate investments – United States | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | First Lien Debt (12.0% Cash, 3.0% PIK, Due 3/23/21) | | | | $ | 14,421 | | | | | $ | 14,421 | | | | | $ | 14,421 | | | | | | 9.7% | | |
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | Common Stock Class B (1,085,073 shares) | | | | | | | | | | | 362 | | | | | | 635 | | | | | | 0.4% | | |
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | Common Stock Class A (1,253,198 shares) | | | | | | | | | | | 1,504 | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 16,287 | | | | | | 15,056 | | | | | | 10.1% | | |
City Gear, LLC | | | Footwear Retail | | | Membership Unit Warrants(9) | | | | | | | | | | | — | | | | | | 3,326 | | | | | | 2.2% | | |
| | | | | | | | | | | | | | | | | — | | | | | | 3,326 | | | | | | 2.2% | | |
Eastport Holdings, LLC | | | Business Services | | | Subordinated Debt (14.9% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 12/29/21)(16) | | | | | 16,500 | | | | | | 16,155 | | | | | | 16,500 | | | | | | 11.2% | | |
Eastport Holdings, LLC | | | Business Services | | | Membership Units (22.9% ownership) | | | | | | | | | | | 3,263 | | | | | | 17,822 | | | | | | 12.0% | | |
| | | | | | | | | | | | | | | | | 19,418 | | | | | | 34,322 | | | | | | 23.2% | | |
|
Portfolio Company, Country(1),(2),(3),(4) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Western Windows Systems, LLC | Building Products | First Lien Debt (11.9% Cash, Due 7/31/20)(6) | $ | 10,500 | $ | 10,500 | $ | 10,500 | 4.7 | % | ||||||||||||||
Western Windows Systems, LLC | Building Products | Membership Units (39,860 units) | 3,000 | 7,379 | 3.3 | % | ||||||||||||||||||
13,500 | 17,879 | 8.0 | % | |||||||||||||||||||||
Xirgo Technologies, LLC | Information Technology | Subordinated Debt (11.5% Cash, Due 3/1/22) | 15,750 | 15,750 | 15,750 | 7.1 | % | |||||||||||||||||
Xirgo Technologies, LLC | Information Technology | Membership Units (600,000 units) | 600 | 637 | 0.3 | % | ||||||||||||||||||
16,350 | 16,387 | 7.4 | % | |||||||||||||||||||||
Sub Total Non-control/non-affiliated investments – United States | 286,316 | 280,359 | 126.4 | % | ||||||||||||||||||||
Non-control/non-affiliated investments – Brazil | ||||||||||||||||||||||||
Velum Global Credit Management, LLC | Financial Services | First Lien Debt (15% PIK, Due 12/31/17)(7)(8)(11)(12) | 12,275 | 11,816 | 8,015 | 3.6 | % | |||||||||||||||||
11,816 | 8,015 | 3.6 | % | |||||||||||||||||||||
Sub Total Non-control/non-affiliated investments – Brazil | 11,816 | 8,015 | 3.6 | % | ||||||||||||||||||||
Sub Total Non-control/non-affiliated investments | $ | 298,132 | $ | 288,374 | 130.0 | % | ||||||||||||||||||
Affiliate investments – 46.8% | ||||||||||||||||||||||||
Affiliate investments – United States | ||||||||||||||||||||||||
AAE Acquisition, LLC | Industrial Equipment Rental | Second Lien Debt (8% Cash, 4% PIK, Due 8/24/19)(8) | $ | 15,846 | $ | 15,846 | $ | 15,603 | 7.0 | % | ||||||||||||||
AAE Acquisition, LLC | Industrial Equipment Rental | Membership Units (2.19% fully diluted) | 17 | — | 0.0 | % | ||||||||||||||||||
AAE Acquisition, LLC | Industrial Equipment Rental | Warrants (37.78% fully diluted) | — | — | 0.0 | % | ||||||||||||||||||
15,863 | 15,603 | 7.0 | % | |||||||||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Subordinated Debt (14% Cash, Due 8/9/19)(13) | 3,000 | 3,000 | 3,000 | 1.4 | % | |||||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Subordinated Debt (12% Cash, Due 8/9/19)(13) | 5,828 | 5,828 | 5,828 | 2.6 | % | |||||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Common Stock (1,253,198 shares) | 1,504 | 457 | 0.2 | % | ||||||||||||||||||
10,332 | 9,285 | 4.2 | % | |||||||||||||||||||||
City Gear, LLC | Footwear Retail | Subordinated Debt (13% Cash, Due 10/20/19)(8) | 8,231 | 8,231 | 8,231 | 3.7 | % | |||||||||||||||||
City Gear, LLC | Footwear Retail | Preferred Membership Units (2.78% fully diluted, 9% Cash Dividend)(5) | 1,269 | 1,269 | 0.6 | % | ||||||||||||||||||
City Gear, LLC | Footwear Retail | Membership Unit Warrants (11.38% fully diluted) | — | 8,248 | 3.7 | % | ||||||||||||||||||
9,500 | 17,748 | 8.0 | % | |||||||||||||||||||||
GA Communications, Inc. | Advertising & Marketing Services | Series A-1 Preferred Stock (1,998 shares, 8% PIK Dividend)(5) | 2,902 | 3,225 | 1.5 | % | ||||||||||||||||||
GA Communications, Inc. | Advertising & Marketing Services | Series B-1 Common Stock (200,000 shares) | 2 | 1,932 | 0.9 | % | ||||||||||||||||||
2,904 | 5,157 | 2.4 | % | |||||||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Subordinated Debt (6% Cash, 7% PIK, Due 6/16/19)(8) | 6,368 | 6,368 | 6,170 | 2.8 | % | |||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Common Stock (8,182 shares) | 818 | — | 0.0 | % | ||||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Common Stock Warrants (6,369 shares) | — | — | 0.0 | % | ||||||||||||||||||
7,186 | 6,170 | 2.8 | % | |||||||||||||||||||||
LJS Partners, LLC | QSR Franchisor | Common Stock (1,500,000 shares) | 896 | 7,650 | 3.4 | % | ||||||||||||||||||
896 | 7,650 | 3.4 | % | |||||||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | First Lien Debt (12% Cash, Due 1/31/19)(8) | 2,600 | 2,600 | 2,600 | 1.2 | % | |||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Subordinated Debt (6% Cash, Due 1/31/19)(8) | 400 | 388 | 400 | 0.2 | % | |||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Preferred Units (1,000 units, 6% PIK dividend)(5) | 1,381 | 1,520 | 0.7% |
Portfolio Company, Country(1),(2),(3),(4),(5) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
GA Communications, Inc. | | | Advertising & Marketing Services | | | Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend)(10) | | | | | | | | | | $ | 3,476 | | | | | $ | 3,761 | | | | | | 2.6% | | |
GA Communications, Inc. | | | Advertising & Marketing Services | | | Series B-1 Common Stock (200,000 shares) | | | | | | | | | | | 2 | | | | | | 501 | | | | | | 0.3% | | |
| | | | | | | | | | | | | | | | | 3,478 | | | | | | 4,262 | | | | | | 2.9% | | |
LJS Partners, LLC | | | QSR Franchisor | | | Preferred Units (92,924 units) | | | | | | | | | | | 293 | | | | | | 372 | | | | | | 0.3% | | |
LJS Partners, LLC | | | QSR Franchisor | | | Common Membership Units (2,593,234 units) | | | | | | | | | | | 1,224 | | | | | | 1,509 | | | | | | 1.0% | | |
| | | | | | | | | | | | | | | | | 1,517 | | | | | | 1,881 | | | | | | 1.3% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | First Lien Debt (12.0% Cash, Due 1/31/21)(16) | | | | $ | 2,600 | | | | | | 2,600 | | | | | | 2,600 | | | | | | 1.8% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Subordinated Debt (6.0% Cash, Due 1/31/21)(16) | | | | | 400 | | | | | | 388 | | | | | | 400 | | | | | | 0.3% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Preferred Units (1,000 units, 6.0% PIK Dividend)(10) | | | | | | | | | | | 1,572 | | | | | | 1,710 | | | | | | 1.1% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Common Membership Units (45 units) | | | | | | | | | | | — | | | | | | 194 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 4,560 | | | | | | 4,904 | | | | | | 3.3% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | First Lien Debt (11.0% Cash, Due 6/30/23)(16) | | | | | 10,100 | | | | | | 10,100 | | | | | | 10,100 | | | | | | 6.8% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend)(10) | | | | | | | | | | | 1,000 | | | | | | 1,000 | | | | | | 0.7% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | Common Stock (60,000 shares) | | | | | | | | | | | — | | | | | | 464 | | | | | | 0.3% | | |
| | | | | | | | | | | | | | | | | 11,100 | | | | | | 11,564 | | | | | | 7.8% | | |
Nth Degree Investment Group, LLC | | | Business Services | | | Membership Units (6,088,000 Units) | | | | | | | | | | | 6,088 | | | | | | 6,088 | | | | | | 4.1% | | |
| | | | | | | | | | | | | | | | | 6,088 | | | | | | 6,088 | | | | | | 4.1% | | |
RAM Payment, LLC | | | Financial Services | | | First Lien Debt (10.0% Cash, Due 1/4/24)(6) | | | | | 9,019 | | | | | | 9,019 | | | | | | 9,019 | | | | | | 6.1% | | |
RAM Payment, LLC | | | Financial Services | | | Preferred Units (86,000 units, 8.0% PIK Dividend)(10) | | | | | | | | | | | 928 | | | | | | 1,725 | | | | | | 1.2% | | |
| | | | | | | | | | | | | | | | | 9,947 | | | | | | 10,744 | | | | | | 7.3% | | |
Sierra Hamilton Holdings Corporation | | | Oil & Gas Engineering and Consulting Services | | | Second Lien Debt (15.0% PIK, Due 9/12/23) | | | | | 782 | | | | | | 748 | | | | | | 748 | | | | | | 0.5% | | |
Sierra Hamilton Holdings Corporation | | | Oil & Gas Engineering and Consulting Services | | | Common Stock (15,068,000 shares) | | | | | | | | | | | 6,958 | | | | | | 5,160 | | | | | | 3.5% | | |
| | | | | | | | | | | | | | | | | 7,706 | | | | | | 5,908 | | | | | | 4.0% | | |
V12 Holdings, Inc. | | | Data Processing & Digital Marketing | | | Subordinated Debt(9) | | | | | | | | | | | 655 | | | | | | 708 | | | | | | 0.5% | | |
| | | | | | | | | | | | | | | | | 655 | | | | | | 708 | | | | | | 0.5% | | |
Sub Total Affiliate investments – United States | | | | | | | | | | $ | 80,756 | | | | | $ | 98,763 | | | | | | 66.7% | | | ||||||
Control Investments – 15.3% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Control investments – United States | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capitala Senior Loan Fund II, LLC | | | Investment Funds | | | Subordinated Debt (6.7% Cash (1 month LIBOR + 5.0)%, Due 9/3/24)(11)(19) | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | 0.0% | | |
Capitala Senior Loan Fund II, LLC | | | Investment Funds | | | Membership Units (80.0% ownership) (11)(20)(21) | | | | | | | | | | | 13,600 | | | | | | 13,631 | | | | | | 9.2% | | |
| | | | | | | | | | | | | | | | | 13,600 | | | | | | 13,631 | | | | | | 9.2% | | |
|
Portfolio Company, Country(1),(2),(3),(4) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Common Membership Units (45 units) | $ | — | $ | 193 | 0.1 | % | ||||||||||||||||
4,369 | 4,713 | 2.2 | % | |||||||||||||||||||||
MTI Holdings, LLC | Retail Display & Security Services | Membership Units (2,000,000 units)(14) | — | 100 | 0.0 | % | ||||||||||||||||||
— | 100 | 0.0 | % | |||||||||||||||||||||
Sierra Hamilton Holdings Corporation | Oil & Gas Engineering and Consulting Services | Common Stock (15,068,000 shares) | 6,958 | 8,528 | 3.8 | % | ||||||||||||||||||
6,958 | 8,528 | 3.8 | % | |||||||||||||||||||||
Source Capital Penray, LLC | Automotive Chemicals & Lubricants | Membership Units (11.3% ownership)(14) | — | 101 | 0.0 | % | ||||||||||||||||||
— | 101 | 0.0 | % | |||||||||||||||||||||
STX Healthcare Management Services, Inc. | Dental Practice Management | Common Stock (1,200,000 shares)(14) | — | 93 | 0.0 | % | ||||||||||||||||||
— | 93 | 0.0 | % | |||||||||||||||||||||
U.S. Well Services, LLC | Oil & Gas Services | First Lien Debt (7.35% Cash (1 month LIBOR + 6%, 1% floor), Due 2/2/22)(15) | $ | 2,299 | 2,299 | 2,299 | 1.0 | % | ||||||||||||||||
U.S. Well Services, LLC | Oil & Gas Services | First Lien Debt (12.35% PIK (1 month LIBOR + 11%, 1% floor), Due 2/2/22) | 9,516 | 9,516 | 9,516 | 4.3 | % | |||||||||||||||||
U.S. Well Services, LLC | Oil & Gas Services | Class A Units (5,680,688 Units) | 6,259 | 15,004 | 6.8 | % | ||||||||||||||||||
U.S. Well Services, LLC | Oil & Gas Services | Class B Units (2,076,298 Units) | 441 | 955 | 0.4 | % | ||||||||||||||||||
18,515 | 27,774 | 12.5 | % | |||||||||||||||||||||
V12 Holdings, Inc. | Data Processing & Digital Marketing | Subordinated Debt(19) | 813 | 1,035 | 0.5 | % | ||||||||||||||||||
813 | 1,035 | 0.5 | % | |||||||||||||||||||||
Sub Total Affiliate investments – United States | $ | 77,336 | $ | 103,957 | 46.8 | % | ||||||||||||||||||
Control investments – 48.5% | ||||||||||||||||||||||||
Control investments – United States | ||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | First Lien Debt (12% Cash, 4% PIK, Due 5/24/18) | $ | 12,373 | $ | 12,373 | $ | 12,373 | 5.6 | % | ||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | Common Stock (21.3% fully diluted) | 1,394 | 118 | 0.1 | % | ||||||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | Common Stock Warrants (10% fully diluted) | — | 60 | 0.0 | % | ||||||||||||||||||
13,767 | 12,551 | 5.7 | % | |||||||||||||||||||||
Eastport Holdings, LLC | Business Services | Subordinated Debt (14.49% Cash (3 month LIBOR + 13%, 0.5% Floor), Due 4/29/20) | 16,500 | 14,738 | 16,500 | 7.4 | % | |||||||||||||||||
Eastport Holdings, LLC | Business Services | Membership Units (33.3% ownership)(16) | 4,733 | 26,449 | 11.9 | % | ||||||||||||||||||
19,471 | 42,949 | 19.3 | % | |||||||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | First Lien Debt (4% Cash, Due 2/15/20)(17) | 2,000 | 2,000 | 2,000 | 0.9 | % | |||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | First Lien Debt (1.46% Cash, Due 2/15/20)(8) | 13,674 | 13,669 | 9,560 | 4.3 | % | |||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | Membership Units (27.5% fully diluted) | — | — | 0.0 | % | ||||||||||||||||||
15,669 | 11,560 | 5.2 | % | |||||||||||||||||||||
Micro Precision, LLC | Conglomerate | Subordinated Debt (10% Cash, Due 9/15/18)(8) | 1,862 | 1,862 | 1,862 | 0.8 | % | |||||||||||||||||
Micro Precision, LLC | Conglomerate | Subordinated Debt (14% Cash, 4% PIK, Due 9/15/18)(8) | 4,154 | 4,154 | 4,154 | 1.9 | % | |||||||||||||||||
Micro Precision, LLC | Conglomerate | Series A Preferred Units (47 units) | 1,629 | 1,629 | 0.7 | % | ||||||||||||||||||
7,645 | 7,645 | 3.4% |
Portfolio Company, Country(1),(2),(3),(4),(5) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Vology, Inc. | | | Information Technology | | | First Lien Debt (10.5% Cash (1 month LIBOR + 8.5%, 2.0% Floor), Due 12/31/21) | | | | $ | 3,877 | | | | | $ | 3,877 | | | | | $ | 3,877 | | | | | | 2.6% | | |
Vology, Inc. | | | Information Technology | | | Class A Preferred Units (9,041,810 Units) | | | | | | | | | | | 5,215 | | | | | | 5,215 | | | | | | 3.5% | | |
Vology, Inc. | | | Information Technology | | | Membership Units (5,363,982 Units) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 9,092 | | | | | | 9,092 | | | | | | 6.1% | | |
Sub Total Control investments – United States | | | | | | | | | | $ | 22,692 | | | | | $ | 22,723 | | | | | | 15.3% | | | ||||||
TOTAL INVESTMENTS – 244.8% | | | | | | | | | | | | | | | | $ | 353,881 | | | | | $ | 362,532 | | | | | | 244.8% | | |
|
Portfolio Company, Country(1),(2),(3),(4) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | First Lien Debt (15% Cash, Due 10/30/20)(8) | $ | 6,500 | $ | 6,500 | $ | 6,500 | 2.9 | % | ||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | Class A Preferred Stock (1,000 shares, 10% Cash Dividend)(5) | 1,000 | 1,000 | 0.5 | % | ||||||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | Common Stock (300,000 shares) | 1 | 5,005 | 2.3 | % | ||||||||||||||||||
7,501 | 12,505 | 5.7 | % | |||||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Subordinated Debt (18% Cash, Due 12/19/18)(7)(8) | 14,072 | 11,020 | 11,588 | 5.2 | % | |||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Series A Preferred Stock (32,782 shares) | 3,278 | — | 0.0 | % | ||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Series B Preferred Stock (23,648 shares) | 2,365 | — | 0.0 | % | ||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Common Stock (33,058 shares) | 33 | — | 0.0 | % | ||||||||||||||||||
16,696 | 11,588 | 5.2 | % | |||||||||||||||||||||
Portrait Studio, LLC | Professional and Personal Digital Imaging | First Lien Debt (8.56% Cash (1 month LIBOR + 7%, 2% ceiling), Due 12/31/22)(18) | 1,860 | 1,860 | 0.9 | % | ||||||||||||||||||
Portrait Studio, LLC | Professional and Personal Digital Imaging | First Lien Debt (8.56% Cash (1 month LIBOR + 7%, 5% ceiling), Due 12/31/22) | 4,500 | 4,500 | 2.0 | % | ||||||||||||||||||
Portrait Studio, LLC | Professional and Personal Digital Imaging | Preferred Units (4,350,000 Units) | 2,450 | 2,450 | 1.1 | % | ||||||||||||||||||
Portrait Studio, LLC | Professional and Personal Digital Imaging | Membership Units (150,000 Units) | — | — | 0.0 | % | ||||||||||||||||||
8,810 | 8,810 | 4.0 | % | |||||||||||||||||||||
Sub Total Control investments – United States | $ | 89,559 | $ | 107,608 | 48.5 | % | ||||||||||||||||||
TOTAL INVESTMENTS – 225.3% | $ | 465,027 | $ | 499,939 | 225.3 | % | ||||||||||||||||||
Derivatives – (3.1)% | ||||||||||||||||||||||||
Derivatives – United States | ||||||||||||||||||||||||
Eastport Holdings, LLC | Business Services | Written Call Option(16) | $ | (20 | ) | $ | (6,815 | ) | (3.1 | )% | ||||||||||||||
Sub Total Derivatives – United States | $ | (20 | ) | $ | (6,815 | ) | (3.1 | )% | ||||||||||||||||
TOTAL DERIVATIVES – (3.1)% | $ | (20 | ) | $ | (6,815 | ) | (3.1 | )% |
(1) |
Portfolio Company, Country(1),(2),(3),(4),(19) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Non-control/non-affiliated investments – 150.4% | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
Non-control/non-affiliated investments – United States | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
3 Bridge Solutions, LLC | | | IT Consulting | | | First Lien Debt (11.3% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 12/4/22) | | | | $ | 13,954 | | | | | $ | 13,954 | | | | | $ | 13,954 | | | | | | 7.3% | | |
3 Bridge Solutions, LLC | | | IT Consulting | | | Preferred Units (965 units, 8.0% PIK) (5) | | | | | | | | | | | 1,049 | | | | | | 1,049 | | | | | | 0.6% | | |
3 Bridge Solutions, LLC | | | IT Consulting | | | Membership Units (39,000 units) | | | | | | | | | | | 10 | | | | | | 230 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 15,013 | | | | | | 15,233 | | | | | | 8.0% | | |
Alternative Biomedical Solutions, LLC | | | Healthcare | | | First Lien Debt (9.5% Cash (1 month LIBOR + 7.0%, 1.0% Floor), Due 12/18/22) | | | | | 118 | | | | | | 118 | | | | | | 118 | | | | | | 0.1% | | |
Alternative Biomedical Solutions, LLC | | | Healthcare | | | First Lien Debt (12.4% Cash, Due 12/18/22)(6) | | | | | 13,000 | | | | | | 13,000 | | | | | | 10,370 | | | | | | 5.4% | | |
Alternative Biomedical Solutions, LLC | | | Healthcare | | | Membership Units (20,092 units) | | | | | | | | | | | 800 | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 13,918 | | | | | | 10,488 | | | | | | 5.5% | | |
American Clinical Solutions, LLC | | | Healthcare | | | First Lien Debt (10.5% Cash, 2.0% PIK, Due 6/11/20)(7) | | | | | 9,293 | | | | | | 8,918 | | | | | | 6,484 | | | | | | 3.4% | | |
| | | | | | | | | | | | | | | | | 8,918 | | | | | | 6,484 | | | | | | 3.4% | | |
AmeriMark Direct, LLC | | | Consumer Products | | | First Lien Debt (12.8% Cash, Due 9/8/21) | | | | | 18,300 | | | | | | 18,029 | | | | | | 18,300 | | | | | | 9.6% | | |
| | | | | | | | | | | | | | | | | 18,029 | | | | | | 18,300 | | | | | | 9.6% | | |
B&W Quality Growers, LLC | | | Farming | | | Membership Unit Warrants (91,739 Units) | | | | | | | | | | | — | | | | | | 5,880 | | | | | | 3.1% | | |
| | | | | | | | | | | | | | | | | — | | | | | | 5,880 | | | | | | 3.1% | | |
BigMouth, Inc. | | | Consumer Products | | | First Lien Debt (14.3% Cash, Due 11/14/21)(6) | | | | | 9,094 | | | | | | 9,094 | | | | | | 9,094 | | | | | | 4.8% | | |
BigMouth, Inc. | | | Consumer Products | | | Series A Preferred Stock (350,000 shares, 8.0% PIK)(5) | | | | | | | | | | | 411 | | | | | | 352 | | | | | | 0.2% | | |
| | | | | | | | | | | | | | | | | 9,505 | | | | | | 9,446 | | | | | | 5.0% | | |
Bluestem Brands, Inc. | | | Online Merchandise Retailer | | | First Lien Debt (10.0% Cash (1 month LIBOR + 7.5%, 1.0% Floor), Due 11/7/20) | | | | | 3,779 | | | | | | 3,762 | | | | | | 3,499 | | | | | | 1.8% | | |
| | | | | | | | | | | | | | | | | 3,762 | | | | | | 3,499 | | | | | | 1.8% | | |
Burke America Parts Group, LLC | | | Home Repair Parts Manufacturer | | | Membership Units (14 units) | | | | | | | | | | | 5 | | | | | | 1,722 | | | | | | 0.9% | | |
| | | | | | | | | | | | | | | | | 5 | | | | | | 1,722 | | | | | | 0.9% | | |
California Pizza Kitchen, Inc. | | | Restaurant | | | Second Lien Debt (12.5% Cash (1 month LIBOR + 10.0%, 1.0% Floor), Due 8/23/23) | | | | | 5,000 | | | | | | 4,903 | | | | | | 4,903 | | | | | | 2.6% | | |
| | | | | | | | | | | | | | | | | 4,903 | | | | | | 4,903 | | | | | | 2.6% | | |
Cedar Ultimate Parent, LLC | | | Consumer Electronics | | | Series C Preferred Stock (4,759,250 units) | | | | | | | | | | | 958 | | | | | | — | | | | | | 0.0% | | |
Cedar Ultimate Parent, LLC | | | Consumer Electronics | | | Series D Preferred Stock (16,562,190 units) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
Cedar Ultimate Parent, LLC | | | Consumer Electronics | | | Series E Common Units (190,370 units) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 958 | | | | | | — | | | | | | 0.0% | | |
Chicken Soup for the Soul, LLC | | | Multi-platform Media and Consumer Products | | | First Lien Debt (10.9% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 12/13/20) | | | | | 13,000 | | | | | | 13,000 | | | | | | 13,000 | | | | | | 6.8% | | |
| | | | | | | | | | | | | | | | | 13,000 | | | | | | 13,000 | | | | | | 6.8% | | |
CIS Secure Computing, Inc. | | | Government Services | | | First Lien Debt (10.8% Cash (1 month LIBOR + 8.5%, 1.0% Floor), 1.0% PIK, Due 9/14/22) | | | | | 10,428 | | | | | | 10,428 | | | | | | 10,428 | | | | | | 5.5% | | |
2018
Portfolio Company, Country(1),(2),(3),(4),(19) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
CIS Secure Computing, Inc. | | | Government Services | | | Common Stock (46,163 shares) | | | | | | | | | | $ | 1,000 | | | | | $ | 1,681 | | | | | | 0.9% | | |
| | | | | | ��� | | | | | | | | | | | 11,428 | | | | | | 12,109 | | | | | | 6.4% | | |
Corporate Visions, Inc. | | | Sales & Marketing Services | | | Subordinated Debt (9.0% Cash, 2.0% PIK, Due 11/29/21) | | | | $ | 18,940 | | | | | | 18,940 | | | | | | 18,679 | | | | | | 9.8% | | |
Corporate Visions, Inc. | | | Sales & Marketing Services | | | Common Stock (15,750 shares) | | | | | | | | | | | 1,575 | | | | | | 817 | | | | | | 0.4% | | |
| | | | | | | | | | | | | | | | | 20,515 | | | | | | 19,496 | | | | | | 10.2% | | |
Currency Capital, LLC | | | Financial Services | | | First Lien Debt (13.4% Cash (1 month LIBOR + 11.0%, 0.5% Floor), Due 1/2/20)(8) | | | | | 16,788 | | | | | | 16,788 | | | | | | 16,788 | | | | | | 8.8% | | |
Currency Capital, LLC | | | Financial Services | | | Class A Preferred Units (2,000,000 units)(8) | | | | | | | | | | | 2,000 | | | | | | 2,000 | | | | | | 1.0% | | |
| | | | | | | | | | | | | | | | | 18,788 | | | | | | 18,788 | | | | | | 9.8% | | |
Flavors Holdings, Inc. | | | Food Product Manufacturer | | | First Lien Debt (8.6% Cash (3 month LIBOR + 5.8%, 1.0% Floor), Due 4/3/20) | | | | | 6,300 | | | | | | 6,241 | | | | | | 6,070 | | | | | | 3.2% | | |
Flavors Holdings, Inc. | | | Food Product Manufacturer | | | Second Lien Debt (12.8% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 10/3/21) | | | | | 12,000 | | | | | | 11,809 | | | | | | 11,265 | | | | | | 5.9% | | |
| | | | | | | | | | | | | | | | | 18,050 | | | | | | 17,335 | | | | | | 9.1% | | |
Freedom Electronics, LLC | | | Electronic Machine Repair | | | First Lien Debt (8.7% Cash (1 month LIBOR + 6.3%, 2.0% Floor), Due 12/20/23)(9) | | | | | 250 | | | | | | 250 | | | | | | 250 | | | | | | 0.1% | | |
Freedom Electronics, LLC | | | Electronic Machine Repair | | | First Lien Debt (9.1% Cash, Due 12/20/23)(6) | | | | | 6,000 | | | | | | 6,000 | | | | | | 6,000 | | | | | | 3.1% | | |
Freedom Electronics, LLC | | | Electronic Machine Repair | | | Membership Units (181,818 units) | | | | | | | | | | | 182 | | | | | | 182 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 6,432 | | | | | | 6,432 | | | | | | 3.3% | | |
Installs, LLC | | | Logistics | | | First Lien Debt (9.3% Cash (1 month LIBOR + 7.0%, 1.8% Floor), Due 6/20/23) | | | | | 2,984 | | | | | | 2,984 | | | | | | 2,984 | | | | | | 1.6% | | |
| | | | | | | | | | | | | | | | | 2,984 | | | | | | 2,984 | | | | | | 1.6% | | |
MC Sign Lessor Corp. | | | Advertising & Marketing Services | | | First Lien Debt (9.3% Cash (1 month LIBOR + 7.0%, 1.0% Floor), Due 12/22/22)(10) | | | | | — | | | | | | — | | | | | | — | | | | | | 0.0% | | |
MC Sign Lessor Corp. | | | Advertising & Marketing Services | | | First Lien Debt (9.3% Cash (1 month LIBOR + 7.0%, 1.0% Floor), Due 12/22/22)(11) | | | | | 3,905 | | | | | | 3,905 | | | | | | 3,905 | | | | | | 2.0% | | |
| | | | | | | | | | | | | | | | | 3,905 | | | | | | 3,905 | | | | | | 2.0% | | |
Nth Degree, Inc. | | | Business Services | | | First Lien Debt (13.9% Cash (1 month LIBOR + 11.5%, 1.0% Floor), 2.0% PIK, Due 3/29/23)(12) | | | | | 7,346 | | | | | | 7,346 | | | | | | 7,346 | | | | | | 3.9% | | |
Nth Degree, Inc. | | | Business Services | | | Preferred Stock (2,400 Units, 10.0% PIK dividend)(5) | | | | | | | | | | | 3,244 | | | | | | 16,490 | | | | | | 8.6% | | |
| | | | | | | | | | | | | | | | | 10,590 | | | | | | 23,836 | | | | | | 12.5% | | |
Sequoia Healthcare Management, LLC | | | Healthcare Management | | | First Lien Debt (10.8% Cash (1 month LIBOR + 8.5%, 1.8% Floor), Due 8/21/23) | | | | | 13,792 | | | | | | 13,792 | | | | | | 13,792 | | | | | | 7.2% | | |
| | | | | | | | | | | | | | | | | 13,792 | | | | | | 13,792 | | | | | | 7.2% | | |
Sunset Digital Holdings, LLC | | | Telecommunications | | | First Lien Debt (9.6% Cash (1 month LIBOR + 7.3%, 1.5% Floor), Due 8/2/19) | | | | | 18,000 | | | | | | 18,000 | | | | | | 18,000 | | | | | | 9.4% | | |
| | | | | | | | | | | | | | | | | 18,000 | | | | | | 18,000 | | | | | | 9.4% | | |
|
Portfolio Company, Country(4),(5),(14),(15) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Non-control/non-affiliated investments – 157.1% | ||||||||||||||||||||||||
Non-control/non-affiliated investments – United States | ||||||||||||||||||||||||
AAE Acquisition, LLC | Industrial Equipment Rental | Second Lien Debt (12% Cash, Due 3/31/18) | $ | 11,000 | $ | 11,000 | $ | 10,755 | 4.3 | % | ||||||||||||||
AAE Acquisition, LLC | Industrial Equipment Rental | Membership Units (14% fully diluted) | 17 | — | 0.0 | % | ||||||||||||||||||
11,017 | 10,755 | 4.3 | % | |||||||||||||||||||||
American Clinical Solutions, LLC | Healthcare | First Lien Debt (10.5% Cash (3 month LIBOR + 9.5%, 1% Floor), Due 6/11/20)(13) | 9,034 | 9,034 | 8,582 | 3.4 | % | |||||||||||||||||
9,034 | 8,582 | 3.4 | % | |||||||||||||||||||||
American Exteriors, LLC | Replacement Window Manufacturer | First Lien Debt (10% PIK, Due 1/1/17)(1)(2) | 6,456 | 4,679 | 2,571 | 1.0 | % | |||||||||||||||||
American Exteriors, LLC | Replacement Window Manufacturer | Common Stock Warrants (10% fully diluted) | — | — | 0.0 | % | ||||||||||||||||||
4,679 | 2,571 | 1.0 | % | |||||||||||||||||||||
AmeriMark Direct, LLC | Consumer Products | First Lien Debt (12.75% Cash, Due 9/8/21) | 19,700 | 19,192 | 19,542 | 7.8 | % | |||||||||||||||||
19,192 | 19,542 | 7.8 | % | |||||||||||||||||||||
B&W Quality Growers, LLC | Farming | Subordinated Debt (14% Cash, Due 7/23/20) | 6,000 | 5,996 | 6,000 | 2.4 | % | |||||||||||||||||
B&W Quality Growers, LLC | Farming | Membership Unit Warrants (91,739 Units) | 20 | 5,779 | 2.3 | % | ||||||||||||||||||
6,016 | 11,779 | 4.7 | % | |||||||||||||||||||||
BigMouth, Inc. | Consumer Products | First Lien Debt (12.6% Cash, Due 11/14/21)(3) | 10,313 | 10,313 | 10,313 | 4.1 | % | |||||||||||||||||
BigMouth, Inc. | Consumer Products | Series A Preferred Stock (350,000 shares, 8% PIK)(6) | 354 | 354 | 0.1 | % | ||||||||||||||||||
10,667 | 10,667 | 4.2 | % | |||||||||||||||||||||
Bluestem Brands, Inc. | Online Merchandise Retailer | First Lien Debt (8.5% Cash (1 month LIBOR + 7.5%, 1% Floor), Due 11/7/20) | 4,279 | 4,169 | 4,169 | 1.7 | % | |||||||||||||||||
4,169 | 4,169 | 1.7 | % | |||||||||||||||||||||
Brock Holdings III, Inc. | Industrial Specialty Services | Second Lien Debt (10% Cash (1 month LIBOR + 8.25%, 1.75% Floor), Due 3/16/18) | 5,000 | 4,935 | 4,750 | 1.9 | % | |||||||||||||||||
4,935 | 4,750 | 1.9 | % | |||||||||||||||||||||
Brunswick Bowling Products, Inc. | Bowling Products | First Lien Debt (8% Cash (1 month LIBOR + 6.0%, 2% Floor), Due 5/22/20) | 1,600 | 1,600 | 1,600 | 0.6 | % | |||||||||||||||||
Brunswick Bowling Products, Inc. | Bowling Products | First Lien Debt (16.25% Cash (1 month LIBOR + 14.25%, 2% Floor), Due 5/22/20) | 5,586 | 5,586 | 5,586 | 2.2 | % | |||||||||||||||||
Brunswick Bowling Products, Inc. | Bowling Products | Preferred Shares (2,966 shares, 8% PIK)(6) | 3,384 | 5,317 | 2.1 | % | ||||||||||||||||||
10,570 | 12,503 | 4.9 | % | |||||||||||||||||||||
Burke America Parts Group, LLC | Home Repair Parts Manufacturer | Membership Units (14 units) | 5 | 1,408 | 0.6 | % | ||||||||||||||||||
5 | 1,408 | 0.6 | % | |||||||||||||||||||||
California Pizza Kitchen, Inc. | Restaurant | Second Lien Debt (11% Cash (1 month LIBOR + 10%, 1% Floor), Due 8/23/23) | 5,000 | 4,857 | 4,857 | 1.9 | % | |||||||||||||||||
4,857 | 4,857 | 1.9 | % | |||||||||||||||||||||
Caregiver Services, Inc. | In-Home Healthcare Services | Common Stock (293,186 shares) | 258 | 137 | 0.1 | % | ||||||||||||||||||
Caregiver Services, Inc. | In-Home Healthcare Services | Common Stock Warrants (655,908 units)(7) | 264 | 309 | 0.1 | % | ||||||||||||||||||
522 | 446 | 0.2 | % |
See accompanying notes to consolidated financial statements.
Portfolio Company, Country(1),(2),(3),(4),(19) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Sur La Table, Inc. | | | Retail | | | First Lien Debt (12.0% Cash, Due 7/28/20) | | | | $ | 15,000 | | | | | $ | 15,000 | | | | | $ | 14,979 | | | | | | 7.9% | | |
| | | | | | | | | | | | | | | | | 15,000 | | | | | | 14,979 | | | | | | 7.9% | | |
Taylor Precision Products, Inc. | | | Household Product Manufacturer | | | Series C Preferred Stock (379 shares) | | | | | | | | | | | 758 | | | | | | 758 | | | | | | 0.4% | | |
| | | | | | | | | | | | | | | | | 758 | | | | | | 758 | | | | | | 0.4% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | First Lien Debt (10.1% Cash, Due 12/14/23)(6)(13) | | | | | 7,000 | | | | | | 7,000 | | | | | | 7,000 | | | | | | 3.7% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | Class A Preferred Units (500 Units, 10.0% PIK)(5) | | | | | | | | | | | 502 | | | | | | 502 | | | | | | 0.3% | | |
U.S. BioTek Laboratories, LLC | | | Testing laboratories | | | Class C Units (500 Units) | | | | | | | | | | | 1 | | | | | | 1 | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 7,503 | | | | | | 7,503 | | | | | | 4.0% | | |
U.S. Well Services, Inc. | | | Oil & Gas Services | | | Class A Common Stock (77,073 shares) (8) | | | | | | | | | | | 771 | | | | | | 632 | | | | | | 0.3% | | |
U.S. Well Services, Inc. | | | Oil & Gas Services | | | Class B Common Stock (1,125,426 shares)(8) | | | | | | | | | | | 6,701 | | | | | | 9,229 | | | | | | 4.9% | | |
| | | | | | | | | | | | | | | | | 7,472 | | | | | | 9,861 | | | | | | 5.2% | | |
Vology, Inc. | | | Information Technology | | | Subordinated Debt (15.0% Cash (1 month LIBOR + 14.0%, 1.0% Ceiling), 4.0% PIK Due 6/30/20) | | | | | 8,720 | | | | | | 8,720 | | | | | | 8,645 | | | | | | 4.5% | | |
| | | | | | | | | | | | | | | | | 8,720 | | | | | | 8,645 | | | | | | 4.5% | | |
Xirgo Technologies, LLC | | | Information Technology | | | Subordinated Debt (11.5% Cash, Due 3/1/22) | | | | | 15,750 | | | | | | 15,750 | | | | | | 15,750 | | | | | | 8.3% | | |
Xirgo Technologies, LLC | | | Information Technology | | | Membership Units (600,000 units) | | | | | | | | | | | 600 | | | | | | 837 | | | | | | 0.4% | | |
| | | | | | | | | | | | | | | | | 16,350 | | | | | | 16,587 | | | | | | 8.7% | | |
Sub Total Non-control/non-affiliated investments – United States | | | | | | | | | | | 268,298 | | | | | | 283,965 | | | | | | 148.9% | | | ||||||
Non-control/non-affiliated investments – Brazil | | | | | | | | | | | |||||||||||||||||||||
Velum Global Credit Management, LLC | | | Financial Services | | | First Lien Debt (15.0% PIK, Due 12/31/17)(7)(8)(12) | | | | | 14,277 | | | | | | 11,816 | | | | | | 2,878 | | | | | | 1.5% | | |
| | | | | | | | | | | | | | | | | 11,816 | | | | | | 2,878 | | | | | | 1.5% | | |
Sub Total Non-control/non-affiliated investments – Brazil | | | | | | | | | | | 11,816 | | | | | | 2,878 | | | | | | 1.5% | | | ||||||
Sub Total Non-control/non-affiliated investments | | | | | | | | | | $ | 280,114 | | | | | $ | 286,843 | | | | | | 150.4% | | | ||||||
Affiliate Investments – 48.8% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Affiliate investments – United States | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | First Lien Debt (12.0% Cash, 1.0% PIK, Due 3/23/21) | | | | $ | 14,801 | | | | | $ | 14,801 | | | | | $ | 14,384 | | | | | | 7.5% | | |
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | Common Stock Class A (1,253,198 shares) | | | | | | | | | | | 1,504 | | | | | | — | | | | | | 0.0% | | |
Burgaflex Holdings, LLC | | | Automobile Part Manufacturer | | | Common Stock Class B (900,000 shares) | | | | | | | | | | | 300 | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 16,605 | | | | | | 14,384 | | | | | | 7.5% | | |
City Gear, LLC | | | Footwear Retail | | | Membership Unit Warrants (11.4% fully diluted)(14) | | | | | | | | | | | — | | | | | | 3,184 | | | | | | 1.7% | | |
| | | | | | | | | | | | | | | | | — | | | | | | 3,184 | | | | | | 1.7% | | |
Eastport Holdings, LLC | | | Business Services | | | Subordinated Debt (15.8% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 4/29/20) | | | | | 16,500 | | | | | | 15,496 | | | | | | 16,500 | | | | | | 8.7% | | |
Eastport Holdings, LLC | | | Business Services | | | Membership Units (22.9% ownership) | | | | | | | | | | | 3,263 | | | | | | 17,610 | | | | | | 9.2% | | |
| | | | | | | | | | | | | | | | | 18,759 | | | | | | 34,110 | | | | | | 17.9% | | |
GA Communications, Inc. | | | Advertising & Marketing Services | | | Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend)(5) | | | | | | | | | | | 3,179 | | | | | | 3,482 | | | | | | 1.8% | | |
Portfolio Company, Country(4),(5),(14),(15) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Cedar Electronics Holding Corp. | Consumer Electronics | Subordinated Debt (12% Cash, Due 12/26/20) | $ | 21,550 | $ | 21,550 | $ | 20,818 | 8.3 | % | ||||||||||||||
21,550 | 20,818 | 8.3 | % | |||||||||||||||||||||
Community Choice Financial, Inc. | Financial Services | First Lien Debt (18% Cash (1 month LIBOR + 17%, 1% Floor), Due 3/30/18)(1)(8) | 15,000 | 15,000 | 15,000 | 6.0 | % | |||||||||||||||||
15,000 | 15,000 | 6.0 | % | |||||||||||||||||||||
Construction Partners, Inc. | Construction Services | Second Lien Debt (11.5% Cash, Due 6/12/20) | 9,500 | 9,500 | 9,500 | 3.8 | % | |||||||||||||||||
9,500 | 9,500 | 3.8 | % | |||||||||||||||||||||
Corporate Visions, Inc. | Sales & Marketing Services | Subordinated Debt (9% Cash, 2% PIK, Due 11/29/21) | 16,267 | 16,267 | 15,648 | 6.2 | % | |||||||||||||||||
Corporate Visions, Inc. | Sales & Marketing Services | Common Stock (15,750 shares) | 1,575 | 728 | 0.3 | % | ||||||||||||||||||
17,842 | 16,376 | 6.5 | % | |||||||||||||||||||||
CSM Bakery Solutions, LLC | Bakery Supplies Distributor | Second Lien Debt (8.75% Cash (1 month LIBOR + 7.75%, 1% Floor), Due 8/7/22) | 12,000 | 11,813 | 10,776 | 4.3 | % | |||||||||||||||||
11,813 | 10,776 | 4.3 | % | |||||||||||||||||||||
Emerging Markets Communications, LLC | Satellite Communications | Second Lien Debt (10.625% Cash (1 month LIBOR + 9.625%, 1% Floor), Due 7/1/22) | 5,000 | 4,946 | 5,000 | 2.0 | % | |||||||||||||||||
4,946 | 5,000 | 2.0 | % | |||||||||||||||||||||
Flavors Holdings, Inc. | Food Product Manufacturer | First Lien Debt (6.75% Cash (1 month LIBOR + 5.75%, 1% Floor), Due 4/3/20) | 7,100 | 6,930 | 6,411 | 2.6 | % | |||||||||||||||||
Flavors Holdings, Inc. | Food Product Manufacturer | Second Lien Debt (11% Cash (1 month LIBOR + 10%, 1% Floor), Due 10/3/21) | 12,000 | 11,671 | 10,188 | 4.1 | % | |||||||||||||||||
18,601 | 16,599 | 6.7 | % | |||||||||||||||||||||
Immersive Media Tactical Solutions, LLC | Specialty Defense Contractor | Subordinated Debt (Due 12/9/19)(9) | 2,000 | 2,000 | 1,532 | 0.6 | % | |||||||||||||||||
2,000 | 1,532 | 0.6 | % | |||||||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | First Lien Debt (14% Cash, Due 3/31/19) | 13,674 | 13,668 | 13,252 | 5.3 | % | |||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | Preferred Units (1,000 units, 10% PIK Dividend)(6) | 3,433 | 3,433 | 1.4 | % | ||||||||||||||||||
Kelle’s Transport Service, LLC | Transportation | Common Stock Warrants (15% fully diluted) | 22 | 171 | 0.1 | % | ||||||||||||||||||
17,123 | 16,856 | 6.8 | % | |||||||||||||||||||||
Medical Depot, Inc. | Medical Device Distributor | Subordinated Debt (14% Cash, Due 9/27/20)(1) | 14,667 | 14,667 | 14,667 | 5.9 | % | |||||||||||||||||
Medical Depot, Inc. | Medical Device Distributor | Series C Convertible Preferred Stock (740 shares) | 1,333 | 6,440 | 2.6 | % | ||||||||||||||||||
16,000 | 21,107 | 8.5 | % | |||||||||||||||||||||
Nielsen & Bainbridge, LLC | Home Décor Manufacturer | Second Lien Debt (10.5% Cash (6 month LIBOR + 9.25%, 1% Floor), Due 8/15/21) | 15,000 | 14,849 | 14,670 | 5.9 | % | |||||||||||||||||
14,849 | 14,670 | 5.9 | % | |||||||||||||||||||||
Nth Degree, Inc. | Business Services | First Lien Debt (8.0% Cash (1 month LIBOR + 7%, 1% Floor), 1% PIK, Due 12/14/20) | 9,904 | 9,904 | 9,904 | 4.0 | % | |||||||||||||||||
Nth Degree, Inc. | Business Services | First Lien Debt (12.5% Cash (1 month LIBOR + 11.5%, 1% Floor), 2% PIK, Due 12/14/20) | 7,351 | 7,351 | 7,351 | 2.9 | % | |||||||||||||||||
Nth Degree, Inc. | Business Services | Preferred Stock (10% PIK dividend)(6) | 2,662 | 4,581 | 1.8 | % | ||||||||||||||||||
19,917 | 21,836 | 8.7% |
Portfolio Company, Country(1),(2),(3),(4),(19) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
GA Communications, Inc. | | | Advertising & Marketing Services | | | Series B-1 Common Stock (200,000 shares) | | | | | | | | | | $ | 2 | | | | | $ | 1,325 | | | | | | 0.7% | | |
| | | | | | | | | | | | | | | | | 3,181 | | | | | | 4,807 | | | | | | 2.5% | | |
J&J Produce Holdings, Inc. | | | Produce Distribution | | | Subordinated Debt (13.0% Cash, Due 6/16/19)(12) | | | | $ | 6,406 | | | | | | 6,406 | | | | | | 6,210 | | | | | | 3.3% | | |
J&J Produce Holdings, Inc. | | | Produce Distribution | | | Common Stock (8,182 shares) | | | | | | | | | | | 818 | | | | | | — | | | | | | 0.0% | | |
J&J Produce Holdings, Inc. | | | Produce Distribution | | | Common Stock Warrants (6,369 shares) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 7,224 | | | | | | 6,210 | | | | | | 3.3% | | |
LJS Partners, LLC | | | QSR Franchisor | | | Common Stock (1,587,848 shares) | | | | | | | | | | | 1,188 | | | | | | 3,018 | | | | | | 1.6% | | |
| | | | | | | | | | | | | | | | | 1,188 | | | | | | 3,018 | | | | | | 1.6% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | First Lien Debt (12.0% Cash, Due 1/31/20)(12) | | | | | 2,600 | | | | | | 2,600 | | | | | | 2,600 | | | | | | 1.4% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Subordinated Debt (6.0% Cash, Due 1/31/20)(12) | | | | | 400 | | | | | | 388 | | | | | | 400 | | | | | | 0.2% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Preferred Units (1,000 units, 6.0% PIK Dividend)(5) | | | | | | | | | | | 1,474 | | | | | | 1,612 | | | | | | 0.8% | | |
MMI Holdings, LLC | | | Medical Device Distributor | | | Common Membership Units (45 units) | | | | | | | | | | | — | | | | | | 185 | | | | | | 0.1% | | |
| | | | | | | | | | | | | | | | | 4,462 | | | | | | 4,797 | | | | | | 2.5% | | |
Sierra Hamilton Holdings Corporation | | | Oil & Gas Engineering and Consulting Services | | | Common Stock (15,068,000 shares) | | | | | | | | | | | 6,958 | | | | | | 6,854 | | | | | | 3.6% | | |
| | | | | | | | | | | | | | | | | 6,958 | | | | | | 6,854 | | | | | | 3.6% | | |
US Bath Group, LLC | | | Building Products | | | First Lien Debt (11.4% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 1/2/23) | | | | | 12,750 | | | | | | 12,750 | | | | | | 12,750 | | | | | | 6.7% | | |
US Bath Group, LLC | | | Building Products | | | Membership Units (500,000 units) | | | | | | | | | | | 500 | | | | | | 2,083 | | | | | | 1.1% | | |
| | | | | | | | | | | | | | | | | 13,250 | | | | | | 14,833 | | | | | | 7.8% | | |
V12 Holdings, Inc. | | | Data Processing & Digital Marketing | | | Subordinated Debt(15) | | | | | — | | | | | | 673 | | | | | | 742 | | | | | | 0.4% | | |
| | | | | | | | | | | | | | | | | 673 | | | | | | 742 | | | | | | 0.4% | | |
Sub Total Affiliate investments – United States | | | | | | | | | | | | | $ | 72,300 | | | | | $ | 92,939 | | | | | | 48.8% | | | |||
Control Investments – 36.3% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Control investments – United States | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AAE Acquisition, LLC | | | Industrial Equipment Rental | | | Second Lien Debt (6.0% Cash, Due 8/24/19)(12) | | | | $ | 16,327 | | | | | $ | 16,327 | | | | | $ | 16,327 | | | | | | 8.6% | | |
AAE Acquisition, LLC | | | Industrial Equipment Rental | | | Membership Units (2.2% fully diluted) | | | | | | | | | | | 17 | | | | | | — | | | | | | 0.0% | | |
AAE Acquisition, LLC | | | Industrial Equipment Rental | | | Warrants (37.8% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 16,344 | | | | | | 16,327 | | | | | | 8.6% | | |
CableOrganizer Acquisition, LLC | | | Computer Supply Retail | | | First Lien Debt (10.0% Cash, Due 5/24/19)(16) | | | | | 1,708 | | | | | | 1,708 | | | | | | 1,708 | | | | | | 0.9% | | |
CableOrganizer Acquisition, LLC | | | Computer Supply Retail | | | First Lien Debt (12.0% Cash, 4.0% PIK, Due 6/30/19)(12) | | | | | 8,889 | | | | | | 8,889 | | | | | | 8,889 | | | | | | 4.6% | | |
CableOrganizer Acquisition, LLC | | | Computer Supply Retail | | | Preferred Units (4,000,000 units) | | | | | | | | | | | 2,354 | | | | | | — | | | | | | 0.0% | | |
CableOrganizer Acquisition, LLC | | | Computer Supply Retail | | | Common Stock (21.3% fully diluted) | | | | | | | | | | | 1,394 | | | | | | — | | | | | | 0.0% | | |
CableOrganizer Acquisition, LLC | | | Computer Supply Retail | | | Common Stock Warrants (10.0% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 14,345 | | | | | | 10,597 | | | | | | 5.5% | | |
|
Portfolio Company, Country(4),(5),(14),(15) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Portrait Innovations, Inc. | Professional and Personal Digital Imaging | Subordinated Debt (12% Cash, Due 2/26/20) | $ | 9,000 | $ | 9,000 | $ | 9,000 | 3.6 | % | ||||||||||||||
9,000 | 9,000 | 3.6 | % | |||||||||||||||||||||
Sequoia Healthcare Management, LLC | Healthcare Management | First Lien Debt (12% Cash, 4% PIK, Due 7/17/19) | 10,851 | 10,750 | 10,851 | 4.3 | % | |||||||||||||||||
10,750 | 10,851 | 4.3 | % | |||||||||||||||||||||
Sierra Hamilton, LLC | Oil & Gas Engineering and Consulting Services | First Lien Debt (12.25% Cash, Due 12/15/18)(2) | 15,000 | 15,000 | 4,500 | 1.8 | % | |||||||||||||||||
15,000 | 4,500 | 1.8 | % | |||||||||||||||||||||
Sur La Table, Inc. | Retail | First Lien Debt (12% Cash, Due 7/28/20) | 15,000 | 15,000 | 15,000 | 6.0 | % | |||||||||||||||||
15,000 | 15,000 | 6.0 | % | |||||||||||||||||||||
Taylor Precision Products, Inc. | Household Product Manufacturer | Series C Preferred Stock (379 shares) | 758 | 1,001 | 0.4 | % | ||||||||||||||||||
758 | 1,001 | 0.4 | % | |||||||||||||||||||||
U.S. Well Services, LLC | Oil & Gas Services | First Lien Debt (14.1% PIK (1 month LIBOR + 13.5%, 0.5% floor), Due 5/2/19) | 15,083 | 15,054 | 15,083 | 6.0 | % | |||||||||||||||||
15,054 | 15,083 | 6.0 | % | |||||||||||||||||||||
Vintage Stock, Inc. | Specialty Retail | First Lien Debt (13.1% Cash (1 month LIBOR + 12.5%, 0.5% floor), 3% PIK, Due 11/3/21) | 22,067 | 22,067 | 22,067 | 8.8 | % | |||||||||||||||||
22,067 | 22,067 | 8.8 | % | |||||||||||||||||||||
Vology, Inc. | Information Technology | Subordinated Debt (15% Cash (3 month LIBOR + 14%, 1% Floor, 2% PIK), Due 1/24/21) | 8,082 | 8,082 | 8,082 | 3.2 | % | |||||||||||||||||
8,082 | 8,082 | 3.2 | % | |||||||||||||||||||||
Western Windows Systems, LLC | Building Products | First Lien Debt (11.7% Cash, Due 7/31/20)(3) | 10,500 | 10,500 | 10,500 | 4.2 | % | |||||||||||||||||
Western Windows Systems, LLC | Building Products | Membership Units (39,860 units) | 3,000 | 7,652 | 3.0 | % | ||||||||||||||||||
13,500 | 18,152 | 7.2 | % | |||||||||||||||||||||
Xirgo Technologies, LLC | Information Technology | Subordinated Debt (11.5% Cash, Due 3/1/22) | 15,750 | 15,750 | 15,750 | 6.3 | % | |||||||||||||||||
Xirgo Technologies, LLC | Information Technology | Membership Units (400,000 units) | 400 | 400 | 0.2 | % | ||||||||||||||||||
16,150 | 16,150 | 6.5 | % | |||||||||||||||||||||
Sub Total Non-control/non-affiliated investments – United States | 380,165 | 381,985 | 152.5 | % | ||||||||||||||||||||
Non-control/non-affiliated investments – Brazil | ||||||||||||||||||||||||
Velum Global Credit Management, LLC | Financial Services | First Lien Debt (15% PIK, Due 12/31/17)(1)(8) | 10,553 | 10,553 | 10,553 | 4.2 | % | |||||||||||||||||
10,553 | 10,553 | 4.2 | % | |||||||||||||||||||||
Sub Total Non-Control/non-affiliated investments – Brazil | 10,553 | 10,553 | 4.2 | % | ||||||||||||||||||||
Non-control/non-affiliated investments – Canada | ||||||||||||||||||||||||
Group Cirque du Soleil, Inc. | Entertainment | Second Lien Debt (9.25% Cash (3 month LIBOR + 8.25%, 1% Floor), Due 7/8/23)(8) | 1,000 | 988 | 987 | 0.4 | % | |||||||||||||||||
988 | 987 | 0.4 | % | |||||||||||||||||||||
Sub Total Non-Control/non-affiliated investments – Canada | 988 | 987 | 0.4 | % | ||||||||||||||||||||
Sub Total Non-control/non – affiliated investments | $ | 391,706 | $ | 393,525 | 157.1 | % | ||||||||||||||||||
Affiliate investments – 24.5% | ||||||||||||||||||||||||
Affiliate investments – United States | ||||||||||||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Subordinated Debt (14% Cash, Due 8/9/19)(10) | $ | 3,000 | $ | 3,000 | $ | 3,000 | 1.2 | % | ||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Subordinated Debt (12% Cash, Due 8/9/19)(10) | 5,828 | 5,828 | 5,828 | 2.3% |
Portfolio Company, Country(1),(2),(3),(4),(19) | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | | % of Net Assets | | ||||||||||||
Capitala Senior Loan Fund II, LLC | | | Investment Funds | | | Membership Units (80.0% ownership) (8)(17) | | | | | | | | | | $ | 13,600 | | | | | $ | 13,695 | | | | | | 7.2% | | |
| | | | | | | | | | | | | | | | | 13,600 | | | | | | 13,695 | | | | | | 7.2% | | |
Micro Precision, LLC | | | Conglomerate | | | Subordinated Debt (10.0% Cash, Due 1/1/19)(12) | | | | $ | 1,862 | | | | | | 1,862 | | | | | | 1,862 | | | | | | 1.0% | | |
Micro Precision, LLC | | | Conglomerate | | | Subordinated Debt (14.0% Cash, 4.0% PIK, Due 1/1/19)(12) | | | | | 4,325 | | | | | | 4,325 | | | | | | 4,325 | | | | | | 2.3% | | |
Micro Precision, LLC | | | Conglomerate | | | Series A Preferred Units (47 units) | | | | | | | | | | | 1,629 | | | | | | 2,817 | | | | | | 1.5% | | |
| | | | | | | | | | | | | | | | | 7,816 | | | | | | 9,004 | | | | | | 4.8% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | First Lien Debt (15.0% Cash, Due 10/30/20)(12) | | | | | 7,500 | | | | | | 7,500 | | | | | | 7,500 | | | | | | 3.9% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend)(5) | | | | | | | | | | | 1,000 | | | | | | 1,000 | | | | | | 0.5% | | |
Navis Holdings, Inc. | | | Textile Equipment Manufacturer | | | Common Stock (300,000 shares) | | | | | | | | | | | 1 | | | | | | 4,348 | | | | | | 2.3% | | |
| | | | | | | | | | | | | | | | | 8,501 | | | | | | 12,848 | | | | | | 6.7% | | |
Portrait Studio, LLC | | | Professional and Personal Digital Imaging | | | First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 2.0% Ceiling), Due 12/31/22)(18) | | | | | — | | | | | | — | | | | | | — | | | | | | 0.0% | | |
Portrait Studio, LLC | | | Professional and Personal Digital Imaging | | | First Lien Debt (9.4% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 5.0% Ceiling), Due 12/31/22) | | | | | 4,500 | | | | | | 4,500 | | | | | | 4,500 | | | | | | 2.4% | | |
Portrait Studio, LLC | | | Professional and Personal Digital Imaging | | | Preferred Units (4,350,000 Units) | | | | | | | | | | | 2,450 | | | | | | 2,174 | | | | | | 1.1% | | |
Portrait Studio, LLC | | | Professional and Personal Digital Imaging | | | Membership Units (150,000 Units) | | | | | | | | | | | — | | | | | | — | | | | | | 0.0% | | |
| | | | | | | | | | | | | | | | | 6,950 | | | | | | 6,674 | | | | | | 3.5% | | |
Sub Total Control investments – United States | | | | | | | | | | | | | $ | 67,556 | | | | | $ | 69,145 | | | | | | 36.3% | | | |||
TOTAL INVESTMENTS – 235.5% | | | | | | | | | | | | | | | | $ | 419,970 | | | | | $ | 448,927 | | | | | | 235.5% | | |
|
Portfolio Company, Country(4),(5),(14),(15) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
Burgaflex Holdings, LLC | Automobile Part Manufacturer | Common Stock (1,253,198 shares) | $ | 1,504 | $ | 1,248 | 0.5 | % | ||||||||||||||||
10,332 | 10,076 | 4.0 | % | |||||||||||||||||||||
City Gear, LLC | Footwear Retail | Subordinated Debt (13% Cash, Due 9/28/17)(1) | $ | 8,231 | 8,231 | 8,231 | 3.3 | % | ||||||||||||||||
City Gear, LLC | Footwear Retail | Preferred Membership Units (2.78% fully diluted, 9% Cash Dividend)(6) | 1,269 | 1,269 | 0.5 | % | ||||||||||||||||||
City Gear, LLC | Footwear Retail | Membership Unit Warrants (11.38% fully diluted) | — | 9,736 | 3.9 | % | ||||||||||||||||||
9,500 | 19,236 | 7.7 | % | |||||||||||||||||||||
GA Communications, Inc. | Advertising & Marketing Services | Series A-1 Preferred Stock (1,998 shares, 8% PIK dividend)(6) | 2,648 | 2,864 | 1.1 | % | ||||||||||||||||||
GA Communications, Inc. | Advertising & Marketing Services | Series B-1 Common Stock (200,000 shares) | 2 | 1,046 | 0.4 | % | ||||||||||||||||||
2,650 | 3,910 | 1.5 | % | |||||||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Subordinated Debt (13% Cash, Due 7/16/18) | 6,182 | 6,182 | 6,182 | 2.5 | % | |||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Common Stock (8,182 shares) | 818 | — | 0.0 | % | ||||||||||||||||||
J&J Produce Holdings, Inc. | Produce Distribution | Common Stock Warrants (6,369 shares) | — | — | 0.0 | % | ||||||||||||||||||
7,000 | 6,182 | 2.5 | % | |||||||||||||||||||||
LJS Partners, LLC | QSR Franchisor | Common Stock (1,500,000 shares) | 1,525 | 8,497 | 3.4 | % | ||||||||||||||||||
1,525 | 8,497 | 3.4 | % | |||||||||||||||||||||
MJC Holdings, LLC | Specialty Clothing | Series A Preferred Units (2,000,000 units) | 1,000 | 5,011 | 2.0 | % | ||||||||||||||||||
1,000 | 5,011 | 2.0 | % | |||||||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | First Lien Debt (12% Cash, Due 1/31/18)(1) | 2,600 | 2,600 | 2,600 | 1.0 | % | |||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Subordinated Debt (6% Cash, Due 1/31/18)(1) | 400 | 388 | 400 | 0.2 | % | |||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Preferred Units (1,000 units, 6% PIK dividend)(6) | 1,296 | 1,433 | 0.6 | % | ||||||||||||||||||
MMI Holdings, LLC | Medical Device Distributor | Common Membership Units (45 units) | — | 228 | 0.1 | % | ||||||||||||||||||
4,284 | 4,661 | 1.9 | % | |||||||||||||||||||||
MTI Holdings, LLC | Retail Display & Security Services | Membership Units (2,000,000 units)(12) | — | 537 | 0.2 | % | ||||||||||||||||||
— | 537 | 0.2 | % | |||||||||||||||||||||
Source Capital Penray, LLC | Automotive Chemicals & Lubricants | Subordinated Debt (13% Cash, Due 4/8/19)(1) | 1,425 | 1,425 | 1,425 | 0.6 | % | |||||||||||||||||
Source Capital Penray, LLC | Automotive Chemicals & Lubricants | Membership Units (11.3% ownership) | 750 | 805 | 0.3 | % | ||||||||||||||||||
2,175 | 2,230 | 0.9 | % | |||||||||||||||||||||
STX Healthcare Management Services, Inc. | Dental Practice Management | Common Stock (1,200,000 shares)(12) | — | 109 | 0.0 | % | ||||||||||||||||||
— | 109 | 0.0 | % | |||||||||||||||||||||
V12 Holdings, Inc. | Data Processing & Digital Marketing | Subordinated Debt(12) | $ | 813 | $ | 1,015 | 0.4 | % | ||||||||||||||||
813 | 1,015 | 0.4 | % | |||||||||||||||||||||
Sub Total Affiliate investments – United States | $ | 39,279 | $ | 61,464 | 24.5 | % | ||||||||||||||||||
Control investments – 34.6% | ||||||||||||||||||||||||
Control investments – United States | ||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | First Lien Debt (12% Cash, 4% PIK, Due 5/24/18) | $ | 11,882 | $ | 11,882 | $ | 11,882 | 4.8 | % | ||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | Common Stock (19.7% fully diluted ownership) | 1,394 | 200 | 0.1% |
Portfolio Company, Country(4),(5),(14),(15) | Industry | Type of Investment | Principal Amount | Cost | Fair Value | % of Net Assets | ||||||||||||||||||
CableOrganizer Acquisition, LLC | Computer Supply Retail | Common Stock Warrants (10% fully diluted ownership) | $ | — | $ | 101 | 0.0 | % | ||||||||||||||||
13,276 | 12,183 | 4.9 | % | |||||||||||||||||||||
Eastport Holdings, LLC | Business Services | Subordinated Debt (13.9% Cash (3 month LIBOR + 13%, 0.5% Floor), Due 4/29/20) | $ | 16,500 | 13,982 | 16,500 | 6.6 | % | ||||||||||||||||
Eastport Holdings, LLC | Business Services | Membership Units (30.1% fully diluted)(11) | 4,733 | 13,395 | 5.3 | % | ||||||||||||||||||
18,715 | 29,895 | 11.9 | % | |||||||||||||||||||||
Micro Precision, LLC | Conglomerate | Subordinated Debt (10% Cash, Due 9/15/18)(1) | 1,862 | 1,862 | 1,862 | 0.8 | % | |||||||||||||||||
Micro Precision, LLC | Conglomerate | Subordinated Debt (14% Cash, 4% PIK, Due 9/15/18)(1) | 3,989 | 3,989 | 3,989 | 1.6 | % | |||||||||||||||||
Micro Precision, LLC | Conglomerate | Series A Preferred Units (47 units) | 1,629 | 2,523 | 1.0 | % | ||||||||||||||||||
7,480 | 8,374 | 3.4 | % | |||||||||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | First Lien Debt (15% Cash, Due 10/30/20)(1) | 6,500 | 6,500 | 6,500 | 2.6 | % | |||||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | Class A Preferred Stock (1,000 shares, 10% Cash Dividend) | 1,000 | 1,000 | 0.4 | % | ||||||||||||||||||
Navis Holdings, Inc. | Textile Equipment Manufacturer | Common Stock (300,000 shares) | 1 | 5,634 | 2.2 | % | ||||||||||||||||||
7,501 | 13,134 | 5.2 | % | |||||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Subordinated Debt (14% Cash, 4% PIK, Due 12/19/17)(1)(2) | 10,303 | 9,837 | 10,303 | 4.1 | % | |||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Series A Preferred Stock (32,782 shares) | 3,278 | — | 0.0 | % | ||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Series B Preferred Stock (23,648 shares) | 2,365 | — | 0.0 | % | ||||||||||||||||||
On-Site Fuel Services, Inc. | Fuel Transportation Services | Common Stock (33,058 shares) | 33 | — | 0.0 | % | ||||||||||||||||||
15,513 | 10,303 | 4.1 | % | |||||||||||||||||||||
Print Direction, Inc. | Printing Services | First Lien Debt (10% Cash, 2% PIK, Due 2/24/19) | 17,316 | 17,316 | 12,761 | 5.1 | % | |||||||||||||||||
Print Direction, Inc. | Printing Services | Common Stock (18,543 shares) | 2,990 | — | 0.0 | % | ||||||||||||||||||
Print Direction, Inc. | Printing Services | Common Stock Warrants (820 shares) | — | — | 0.0 | % | ||||||||||||||||||
20,306 | 12,761 | 5.1 | % | |||||||||||||||||||||
Sub Total Control investments – United States | $ | 82,791 | $ | 86,650 | 34.6 | % | ||||||||||||||||||
TOTAL INVESTMENTS – 216.2% | $ | 513,776 | $ | 541,639 | 216.2 | % | ||||||||||||||||||
Derivatives – (1.1)% | ||||||||||||||||||||||||
Derivatives – United States | ||||||||||||||||||||||||
Eastport Holdings, LLC | Business Services | Written Call Option(11) | $ | (20 | ) | $ | (2,736 | ) | (1.1 | )% | ||||||||||||||
Sub Total Derivatives – United States | $ | (20 | ) | $ | (2,736 | ) | (1.1 | )% | ||||||||||||||||
TOTAL DERIVATIVES – (1.1)% | $ | (20 | ) | $ | (2,736 | ) | (1.1 | )% |
See accompanying notes to consolidated financial statements.
During the fourth quarter of 2017, Florida Sidecar transferred all of its assets to Capitala Finance Corp.the Company and was legally dissolved as a standalone partnership.
On March 1, 2019, Fund II repaid its outstanding SBA debentures and relinquished its SBIC license.
Company is deemed to “Control.” “Affiliate Investments” are investments in those companies that are “Affiliated
In estimating the fair value of portfolio investments, the Company starts with the cost basis of the investment, which includes original issue discount and payment-in-kind (“PIK”) income, if any. The
in accordance with the 1940 Act and ASC 820.
The enterprise value waterfall approach is primarily utilized to value the Company’s equity securities, including warrants. However, the Company may utilize the enterprise value waterfall approach to value certain debt securities.
In addition to unfunded commitments related to debt investments,
credit risk as of December 31, 2019 and 2018, was $10.3 million and $4.3 million, respectively, and extends to the stated maturity of the underlying loans in CSLF II.
On December 28, 2017, an alleged shareholder filed a putative class action complaint,Paskowitz v. Capitala Finance Corp., et al., in the United States District Court for the Central District of California (case number 2:17-cv-09251-MWF-AS) (the “Paskowitz Action”), against the Company and certain of its current officers on behalf of all persons who purchased or otherwise acquired the Company's common stock between January 4, 2016 and August 7, 2017. On January 3, 2018, another alleged shareholder filed a putative class action complaint,Sandifer v. Capitala Finance Corp., et al., in the United States District Court for the Central District of California (case number 2:18-cv-00052-MWF-AS) (the “Sandifer Action”), asserting substantially similar claims on behalf of the same putative class and against the same defendants. The complaints in thePaskowitz Action and theSandifer Action allege certain violations of the securities laws, including, inter alia, that the defendants made certain materially false and misleading statements and omissions regarding the Company's business, operations, and prospects. On February 2, 2018, theSandifer Action was transferred, on stipulation of the parties, to the United States District Court for the Western District of North Carolina (case number 3:18-cv-00063-MOC-DCK). The defendants filed a motion to transfer thePaskowitz Action to the United States District Court for the Western District of North Carolina on February 2, 2018, which remains pending. While the Company intends to vigorously defend itself in this litigation, the outcome of these legal proceedings cannot be predicted with certainty.
Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, are in the early stages of the proceedings, and are subject to appeal. In addition, because most legal proceedings are resolved over extended periods of time, potential losses are subject to
change due to, among other things, new developments, changes in legal strategy, the outcome of intermediate procedural and substantive rulings and other parties' settlement posture and their evaluation of the strength or weakness of their case against us. For these reasons, we are currently unable to predict the ultimate timing or outcome of, or reasonably estimate the possible losses or a range of possible losses resulting from, the matters described above. Based on information currently available, the Company does not believe that any reasonably possible losses arising from the currently pending legal matters described above will be material to the Company's results of operations or financial condition. However, in light of the inherent uncertainties involved in such matters, an adverse outcome in this litigation could materially and adversely affect the Company's financial condition, results of operations or cash flows in any particular reporting period.
$3.2 million and $0.4 million, respectively. For the years ended December 31, 2019, 2018, and 2017, the Company recognized an increase in the valuation allowance of $2.8 million, $0.0 million, and $0.4 million, respectively.
of the distribution paid in stock). In no event will any stockholder, electing to receive cash, receive the lesser of (a) the portion of the distribution such stockholder has elected to receive in cash or (b) an amount equal to his or her entire distribution times the percentage limitation on cash available for distribution. If these and certain other requirements are met, for U.SU.S. federal income tax purposes, the amount of the dividend paid in stock will be equal to the amount of cash that could have been received instead of stock. For income tax purposes, the Company has paid distributions on its common stock from ordinary income in the amount of $25.2$13.4 million, $24.5$16.0 million, $6.1 million, and $25.1$25.2 million during the tax yearsperiods ended December 31, 2019, December 31, 2018, December 31, 2017, and August 31, 2017, 2016respectively. For income tax purposes, the Company has paid distributions on its common stock that were accounted for as a return of capital in the amount of $2.7 million for the tax year ended December 31, 2019. For the tax periods ended December 31, 2018, December 31, 2017, and 2015, respectively.
August 31, 2017, there was no return of capital.
The tax years ended August 31, 2017, 2016 and 2015, and 2014 remain subject to examination by U.S. federal, state, and local tax authorities. No interest expense or penalties have been assessed as of December 31, 2017 and 2016. If the Company was required to recognize interest and penalties, if any, related to unrecognized tax benefits this would be recognized as income tax expense in the consolidated statements of operations.
uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the Company’s activities and the value of its investments. In addition, the value of the Company’s portfolio may fluctuate as the general level of interest rates fluctuate.
statements.
and financial sponsors for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives. The Company invests in first lien loans, second lien loans, subordinated loans and, subordinated loans. Most of the Company’s debt investments are coupled withto a lesser extent, equity interests, whether in the form of detachable “penny” warrants or equity co-investments made pari-passu with our borrowers’ financial sponsors.securities issued by lower middle-market companies and traditional middle-market companies. As of December 31, 2017,2019, our portfolio consisted of investments in 4743 portfolio companies with a fair value of approximately $499.9$362.5 million.
which it was not previously committed to fund. During the year ended December 31, 2017, the Company funded $5.9 million of previously committed capital to existing portfolio companies. During the year ended December 31, 2017, the Company funded $76.9 million of investments in portfolio companies for which it was not previously committed to fund. During the yearyears ended December 31, 2016,2019 and 2018, the Company funded $2.8 million of previously committed capital to existing portfolio companies. During the year ended December 31, 2016, the Company funded $118.0 million of investments in portfolio companies for which it wasdid not previously committed to fund. During the year ended December 31, 2015, the Company funded $52.4 million of previously committed capital to existing portfolio companies. During the year ended December 31, 2015, the Company funded $208.2 million of investments in portfolio companies for which it was not previously committed to fund. In addition to investing directly in portfolio companies, the Company may assist any portfolio companies in securing financing from other sources by introducing portfolio companies to sponsors or by leading a syndicate of investors to provide the portfolio companies withobtaining indirect financing. During the year ended December 31, 2017, the Company assisted one portfolio company in obtaining indirect financing by providing a limited guarantee. During the yearyears ended December 31, 2016,2019, 2018, and 2017, the Company did not lead any syndicates and did not assist any
portfolio companies in obtaining indirect financing. During the year ended December 31, 2015, the Company assisted one company in securing financing from other sources as part of a loan syndication.
On August 31, 2016, the Company sold a portion of 14 securities across 10 portfolio companies to CapitalSouth Partners Florida Sidecar Fund II, L.P. (“FSC II”), including granting an option to acquire a portion of the Company’s equity investment in Eastport Holdings, LLC (the “Written Call Option”), in exchange for 100% of the partnership interests in FSC II. Concurrent with the sale of these assets to FSC II, the Company received cash consideration of $47.6 million from an affiliated third-party purchaser in exchange for 100% of the partnership interests of FSC II. These assets were sold to FSC II at their June 30, 2016 fair market values, resulting in a net realized gain of $0.1 million. The Company’s Board pre-approved this transaction pursuant to Section 57(f) of the 1940 Act.
On August 27, 2018, FSC II exercised its option at the agreed upon strike price of $1.5 million.
The Written Call Option granted FSC II the right to purchase up to 31.25% of the Company’s equity investment in Eastport Holdings, LLC. The Written Call Option has a strike price of $1.5 million and a termination date of August 31, 2018. The fair value of the Written Call Option, which has been treated as a derivative liability and is recorded in the financial statement line item Written Call Option at fair value in the Company’s consolidated statements of assets and liabilities, was approximately $6.8 million and $2.7 million as of December 31, 2017 and 2016, respectively. For purposes of determining the fair value of the Written Call Option, the Company calculated the difference in the fair value of the underlying equity investment in Eastport Holdings, LLC and the strike price of the Written Call Option, or intrinsic value. The time value of the Written Call Option as of December 31, 2017 and 2016 was determined to be insignificant. The Written Call Option is classified as a Level 3 financial instrument.
| | | Investments at Amortized Cost | | | Amortized Cost Percentage of Total Portfolio | | | Investments at Fair Value | | | Fair Value Percentage of Total Portfolio | | ||||||||||||
First Lien Debt | | | | $ | 235,646 | | | | | | 66.6% | | | | | $ | 231,203 | | | | | | 63.8% | | |
Second Lien Debt | | | | | 17,553 | | | | | | 5.0 | | | | | | 17,287 | | | | | | 4.7 | | |
Subordinated Debt | | | | | 36,526 | | | | | | 10.3 | | | | | | 36,570 | | | | | | 10.1 | | |
Equity and Warrants | | | | | 50,556 | | | | | | 14.3 | | | | | | 63,841 | | | | | | 17.6 | | |
Capitala Senior Loan Fund II, LLC | | | | | 13,600 | | | | | | 3.8 | | | | | | 13,631 | | | | | | 3.8 | | |
Total | | | | $ | 353,881 | | | | | | 100.0% | | | | | $ | 362,532 | | | | | | 100.0% | | |
|
Investments at Amortized Cost | Amortized Cost Percentage of Total Portfolio | Investments at Fair Value | Fair Value Percentage of Total Portfolio | |||||||||||||
First Lien Debt | $ | 257,147 | 55.3 | % | $ | 243,489 | 48.7 | % | ||||||||
Second Lien Debt | 32,465 | 7.0 | 30,794 | 6.1 | ||||||||||||
Subordinated Debt | 120,235 | 25.8 | 103,385 | 20.7 | ||||||||||||
Equity and Warrants | 55,180 | 11.9 | 122,271 | 24.5 | ||||||||||||
Total | $ | 465,027 | 100.0 | % | $ | 499,939 | 100.0 | % |
| | | Investments at Amortized Cost | | | Amortized Cost Percentage of Total Portfolio | | | Investments at Fair Value | | | Fair Value Percentage of Total Portfolio | | ||||||||||||
First Lien Debt | | | | $ | 252,174 | | | | | | 60.0% | | | | | $ | 237,570 | | | | | | 52.9% | | |
Second Lien Debt | | | | | 33,040 | | | | | | 7.9 | | | | | | 32,495 | | | | | | 7.2 | | |
Subordinated Debt | | | | | 72,562 | | | | | | 17.3 | | | | | | 73,113 | | | | | | 16.3 | | |
Equity and Warrants | | | | | 48,594 | | | | | | 11.6 | | | | | | 92,054 | | | | | | 20.5 | | |
Capitala Senior Loan Fund II, LLC | | | | | 13,600 | | | | | | 3.2 | | | | | | 13,695 | | | | | | 3.1 | | |
Total | | | | $ | 419,970 | | | | | | 100.0% | | | | | $ | 448,927 | | | | | | 100.0% | | |
Investments at Amortized Cost | Amortized Cost Percentage of Total Portfolio | Investments at Fair Value | Fair Value Percentage of Total portfolio | |||||||||||||
First Lien Debt | $ | 244,647 | 47.6 | % | $ | 226,578 | 41.8 | % | ||||||||
Second Lien Debt | 74,559 | 14.5 | 71,483 | 13.2 | ||||||||||||
Subordinated Debt | 148,849 | 29.0 | 150,232 | 27.8 | ||||||||||||
Equity and Warrants | 45,721 | 8.9 | 93,346 | 17.2 | ||||||||||||
Total | $ | 513,776 | 100.0 | % | $ | 541,639 | 100.0 | % |
As noted above, the Company values all investments in accordance with ASC 820. ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
| | | Fair Value Measurements(1) | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
First Lien Debt | | | | $ | — | | | | | $ | — | | | | | $ | 231,203 | | | | | $ | 231,203 | | |
Second Lien Debt | | | | | — | | | | | | — | | | | | | 17,287 | | | | | | 17,287 | | |
Subordinated Debt | | | | | — | | | | | | — | | | | | | 36,570 | | | | | | 36,570 | | |
Equity and Warrants | | | | | 2,273 | | | | | | — | | | | | | 61,568 | | | | | | 63,841 | | |
Total | | | | $ | 2,273 | | | | | $ | — | | | | | $ | 346,628 | | | | | $ | 348,901 | | |
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
First Lien Debt | $ | — | $ | — | $ | 243,489 | $ | 243,489 | ||||||||
Second Lien Debt | — | — | 30,794 | 30,794 | ||||||||||||
Subordinated Debt | — | — | 103,385 | 103,385 | ||||||||||||
Equity and Warrants | — | — | 122,271 | 122,271 | ||||||||||||
Total | $ | — | $ | — | $ | 499,939 | $ | 499,939 |
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Written Call Option | $ | — | $ | — | $ | (6,815 | ) | $ | (6,815 | ) | ||||||
Total | $ | — | $ | — | $ | (6,815 | ) | $ | (6,815 | ) |
The following table presents fair value measurements of investments, by major class, as of December 31, 20162018 (dollars in thousands), according to the fair value hierarchy:
| | | Fair Value Measurements(1) | | |||||||||||||||||||||
| | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
First Lien Debt | | | | $ | — | | | | | $ | — | | | | | $ | 237,570 | | | | | $ | 237,570 | | |
Second Lien Debt | | | | | — | | | | | | — | | | | | | 32,495 | | | | | | 32,495 | | |
Subordinated Debt | | | | | — | | | | | | — | | | | | | 73,113 | | | | | | 73,113 | | |
Equity and Warrants | | | | | — | | | | | | — | | | | | | 92,054 | | | | | | 92,054 | | |
Total | | | | $ | — | | | | | $ | — | | | | | $ | 435,232 | | | | | $ | 435,232 | | |
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
First Lien Debt | $ | — | $ | — | $ | 226,578 | $ | 226,578 | ||||||||
Second Lien Debt | — | — | 71,483 | 71,483 | ||||||||||||
Subordinated Debt | — | — | 150,232 | 150,232 | ||||||||||||
Equity and Warrants | — | — | 93,346 | 93,346 | ||||||||||||
Total | $ | — | $ | — | $ | 541,639 | $ | 541,639 |
The following table presents fair value measurements of the Written Call Option as of December 31, 2016 (dollars
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Written Call Option | $ | — | $ | — | $ | (2,736 | ) | $ | (2,736 | ) | ||||||
Total | $ | — | $ | — | $ | (2,736 | ) | $ | (2,736 | ) |
| | | First Lien Debt | | | Second Lien Debt | | | Subordinated Debt | | | Equity and Warrants | | | Total | | |||||||||||||||
Balance as of January 1, 2019 | | | | $ | 237,570 | | | | | $ | 32,495 | | | | | $ | 73,113 | | | | | $ | 92,054 | | | | | $ | 435,232 | | |
Reclassifications | | | | | (2,773) | | | | | | — | | | | | | (5,215) | | | | | | 7,988 | | | | | | — | | |
Repayments/sales | | | | | (65,495) | | | | | | — | | | | | | (27,843) | | | | | | (34,784) | | | | | | (128,122) | | |
Purchases | | | | | 70,184 | | | | | | 4,511 | | | | | | — | | | | | | 3,136 | | | | | | 77,831 | | |
Payment in-kind interest and dividends accrued | | | | | 1,173 | | | | | | 317 | | | | | | 652 | | | | | | 820 | | | | | | 2,962 | | |
Accretion of original issue discount | | | | | 241 | | | | | | 96 | | | | | | 659 | | | | | | — | | | | | | 996 | | |
Realized gain (loss) from investments | | | | | (19,859) | | | | | | (20,411) | | | | | | (4,288) | | | | | | 24,802 | | | | | | (19,756) | | |
Net unrealized appreciation (depreciation) on investments | | | | | 10,162 | | | | | | 279 | | | | | | (508) | | | | | | (22,587) | | | | | | (12,654) | | |
Transfers out of Level 3 | | | | | — | | | | | | — | | | | | | — | | | | | | (9,861) | | | | | | (9,861) | | |
Balance as of December 31, 2019 | | | | $ | 231,203 | | | | | $ | 17,287 | | | | | $ | 36,570 | | | | | $ | 61,568 | | | | | $ | 346,628 | | |
First Lien Debt | Second Lien Debt | Subordinated Debt | Equity and Warrants | Total | ||||||||||||||||
Balance as of January 1, 2017 | $ | 226,578 | $ | 71,483 | $ | 150,232 | $ | 93,346 | $ | 541,639 | ||||||||||
Reclassifications | (7,109 | ) | — | (9,000 | ) | 16,109 | — | |||||||||||||
Repayments/sales | (26,409 | ) | (45,804 | ) | (22,092 | ) | (21,505 | ) | (115,810 | ) | ||||||||||
Purchases | 69,722 | 4,000 | 2,730 | 6,298 | 82,750 | |||||||||||||||
Payment in-kind interest and dividends accrued | 4,378 | 846 | 987 | 932 | 7,143 | |||||||||||||||
Accretion of original issue discount | 274 | 322 | 761 | — | 1,357 | |||||||||||||||
Realized gain (loss) from investments | (28,356 | ) | (1,456 | ) | (2,000 | ) | 7,623 | (24,189 | ) | |||||||||||
Net unrealized appreciation (depreciation) on investments | 4,411 | 1,403 | (18,233 | ) | 19,468 | 7,049 | ||||||||||||||
Balance as of December 31, 2017 | $ | 243,489 | $ | 30,794 | $ | 103,385 | $ | 122,271 | $ | 499,939 |
| | | First Lien Debt | | | Second Lien Debt | | | Subordinated Debt | | | Equity and Warrants | | | Total(1) | | |||||||||||||||
Balance as of January 1, 2018 | | | | $ | 243,489 | | | | | $ | 30,794 | | | | | $ | 103,385 | | | | | $ | 122,271 | | | | | $ | 499,939 | | |
Reclassifications | | | | | 16,723 | | | | | | — | | | | | | (20,806) | | | | | | 4,083 | | | | | | — | | |
Repayments/sales | | | | | (95,294) | | | | | | — | | | | | | (8,463) | | | | | | (19,760) | | | | | | (123,517) | | |
Purchases | | | | | 92,421 | | | | | | — | | | | | | — | | | | | | 1,781 | | | | | | 94,202 | | |
Payment in-kind interest and dividends accrued | | | | | 1,712 | | | | | | 482 | | | | | | 1,337 | | | | | | 817 | | | | | | 4,348 | | |
Accretion of original issue discount | | | | | 264 | | | | | | 93 | | | | | | 757 | | | | | | — | | | | | | 1,114 | | |
Realized gain (loss) from investments | | | | | (20,799) | | | | | | — | | | | | | (20,499) | | | | | | 6,494 | | | | | | (34,804) | | |
Net unrealized appreciation (depreciation) on investments | | | | | (946) | | | | | | 1,126 | | | | | | 17,402 | | | | | | (23,632) | | | | | | (6,050) | | |
Balance as of December 31, 2018 | | | | $ | 237,570 | | | | | $ | 32,495 | | | | | $ | 73,113 | | | | | $ | 92,054 | | | | | $ | 435,232 | | |
| | | Written Call Option | | |||
Balance as of January 1, 2018 | | | | $ | (6,815) | | |
Payment from Written Call Option | | | | | 20 | | |
Net unrealized appreciation on Written Call Option | | | | | 6,795 | | |
Balance as of December 31, 2018 | | | | $ | — | | |
Written Call Option | ||||
Balance as of January 1, 2017 | $ | (2,736 | ) | |
Net unrealized depreciation on Written Call Option | (4,079 | ) | ||
Balance as of December 31, 2017 | $ | (6,815 | ) |
The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the year ended December 31, 2016 (dollars in thousands):
First Lien Debt | Second Lien Debt | Subordinated Debt | Equity and Warrants | Total | ||||||||||||||||
Balance as of January 1, 2016 | $ | 199,843 | $ | 80,610 | $ | 194,485 | $ | 98,480 | $ | 573,418 | ||||||||||
Repayments/sales | (35,823 | ) | (12,750 | ) | (71,527 | ) | (22,410 | ) | (142,510 | ) | ||||||||||
Purchases | 72,702 | 4,850 | 37,406 | 5,886 | 120,844 | |||||||||||||||
Payment in-kind interest and dividends accrued | 4,471 | — | 596 | 1,233 | 6,300 | |||||||||||||||
Accretion of original issue discount | 364 | 191 | 2,219 | 1 | 2,775 | |||||||||||||||
Realized gain (loss) from investments | (5,024 | ) | (168 | ) | (25,325 | ) | 7,078 | (23,439 | ) | |||||||||||
Net unrealized appreciation (depreciation) on investments | (9,955 | ) | (1,250 | ) | 12,378 | 3,078 | 4,251 | |||||||||||||
Balance as of December 31, 2016 | $ | 226,578 | $ | 71,483 | $ | 150,232 | $ | 93,346 | $ | 541,639 |
The following table provides a reconciliation of the beginning and ending balances for the Written Call Option that use Level 3 inputs for the year ended December 31, 2016 (dollars in thousands):
Written Call Option | ||||
Balance as of January 1, 2016 | $ | — | ||
Net unrealized depreciation on Written Call Option | (2,716 | ) | ||
Proceeds from Written Call Option | (20 | ) | ||
Balance as of December 31, 2016 | $ | (2,736 | ) |
The net change in unrealized appreciation (depreciation)depreciation on investments held as of December 31, 20172019 and 20162018, was $(1.6)$(13.5) million and $3.9$(32.7) million, respectively, and is included in net unrealized appreciation (depreciation)depreciation on investments inon the consolidated statements of operations.
| | | Fair Value (in millions)(2) | | | Valuation Approach | | | Unobservable Input | | | Range (Weighted Average) | | |||
First lien debt | | | | $ | 211.2 | | | | Income | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 7.0% – 20.0% (12.0%) 1.5x – 7.9x (3.8x) $0.8 million – $114.0 million ($13.6 million) | |
First lien debt | | | | $ | 20.0 | | | | Enterprise Value Waterfall and Asset(1) | | | EBITDA Multiple Adjusted EBITDA Revenue Multiple Revenue | | | 6.0x – 6.0x (6.0x) $2.9 million – $2.9 million ($2.9 million) 1.0x – 1.1x (1.1x) $13.3 million – $21.6 million ($19.5 million) | |
Second lien debt | | | | $ | 17.3 | | | | Income | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 13.5% – 15.0% (13.7%) 4.6x – 5.5x (4.9x) $2.7 million – $74.5 million ($68.3 million) | |
Subordinated debt | | | | $ | 36.6 | | | | Income and Asset(1) | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 6.0% – 14.9% (13.4%) 3.0x – 7.0x (5.5x) $1.8 million – $22.3 million ($15.5 million) | |
Equity and warrants | | | | $ | 61.6 | | | | Enterprise Value Waterfall and Asset(1) | | | Revenue Multiple Revenue EBITDA Multiple Adjusted EBITDA | | | 0.4x – 4.7x (0.8x) $17.1 million – $566.2 million ($406.6 million) 3.9x – 10.0x (7.3x) $1.8 million – $25.1 million ($11.7 million) | |
| | | Fair Value(2) (in millions) | | | Valuation Approach | | | Unobservable Input | | | Range (Weighted Average) | | |||
First lien debt | | | �� | $ | 195.1 | | | | Income | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 9.2% – 16.0% (12.1%) 1.0x – 13.5x (4.3x) $1.7 million – $118.7 million ($17.6 million) | |
First lien debt | | | | $ | 42.5 | | | | Enterprise Value Waterfall and Asset(1) | | | EBITDA Multiple Adjusted EBITDA Revenue Multiple Revenue | | | 4.0x – 6.0x (5.3x) $0.6 million – $3.7 million ($2.3 million) 0.9x – 0.9x (0.9x) $13.0 million – $13.0 million ($13.0 million) | |
Second lien debt | | | | $ | 16.2 | | | | Income | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 12.5% – 15.5% (14.6%) 4.6x – 5.0x (4.8x) $67.0 million – $79.2 million ($75.5 million) | |
Second lien debt | | | | $ | 16.3 | | | | Enterprise Value Waterfall and Asset | | | EBITDA Multiple Adjusted EBITDA | | | 5.6x – 5.6x (5.6x) $9.2 million – $9.2 million ($9.2 million) | |
Subordinated debt | | | | $ | 49.3 | | | | Income | | | Required Rate of Return Leverage Ratio Adjusted EBITDA | | | 11.5% – 20.0% (14.1%) 3.1x – 9.1x (5.7x) $1.7 million – $15.8 million ($10.5 million) | |
Subordinated debt | | | | $ | 23.8 | | | | Enterprise Value Waterfall and Asset(1) | | | EBITDA Multiple Adjusted EBITDA Revenue Multiple Revenue | | | 6.0x – 8.0x (7.9x) $1.7 million – $3.1 million ($3.0 million) 0.4x – 0.4x (0.4x) $568.2 million – $568.2 million ($568.2 million) | |
Equity and warrants | | | | $ | 92.1 | | | | Enterprise Value Waterfall | | | EBITDA Multiple Adjusted EBITDA Revenue Multiple Revenue | | | 3.3x – 14.0x (6.5x) $1.7 million – $112.3 million ($27.8 million) 0.4x – 0.4x (0.4x) $164.6 million – $568.2 million ($455.1 million) | |
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
First lien loans(1) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Weighted average current interest rate on first lien loans | | | | | 6.4% | | | | | | 7.6% | | |
Number of portfolio companies | | | | | 5 | | | | | | 2 | | |
Largest portfolio company investment(1) | | | | $ | 7,443 | | | | | $ | 5,550 | | |
Total of five largest portfolio company investments(1)(2) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Because the TRS was wound down in a prior period, only comparative period disclosures are included herein. For the years ended December 31, 2016 and December 31, 2015, the Company received $1.8 million and $0.9 million, respectively, in dividend income from its equity interest in CSLLF. For the year ended December 31, 2016, CSLLF declared a return
On March 27, 2015, CSLLF entered into a TRS with Bank of America, N.A. (“Bank of America”) that was indexed to a basket of senior secured loans purchased by CSLLF. CSLLF obtained the economic benefit of the loans underlying the TRS, including the net interest spread between the interest income generated by the underlying loans and the interest expense type payment under the TRS, the realized gain (loss) on liquidated loans, and the unrealized appreciation (depreciation) on the underlying loans.
The terms of the TRS were governed by an ISDA 2002 Master Agreement, the Schedule thereto, and Credit Support Annex to such Schedule, and the confirmation exchanged thereunder, between CSLLF and Bank of America, which collectively established the TRS, and are collectively referred to herein as the “TRS Agreement.” Pursuant to the terms of the TRS Agreement, CSLLF selected a portfolio of loans with a maximum market value (determined at the time each such loan becomes subject to the TRS) of $100.0 million, which was also referred to as the maximum notional amount of the TRS. Each individual loan, and the portfolio of loans taken as a whole, had to meet criteria described in the TRS Agreement. CSLLF received from Bank of America a periodic payment on set dates that was based upon any coupons, both earned and accrued, generated by the loans underlying the TRS, subject to limitations described in the TRS Agreement as well as any fees associated with the loans included in the portfolio. CSLLF paid to Bank of America interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) plus 1.25% per annum; the LIBOR option paid by CSLLF was determined on an asset by asset basis such that the tenor of the LIBOR option (1 month, 3 month, etc.) matched the tenor of the underlying reference asset. In addition, upon the termination of any loan subject to the TRS or any repayment of the underlying reference asset, CSLLF either received from Bank of America the appreciation in the value of such loan, or paid to Bank of America any depreciation in the value of such loan.
CSLLF was required to pay an unused facility fee of 1.25% on any amount of unused facility under the minimum facility amount of $70.0 million as outlined in the TRS Agreement. Such unused facility fees were not applied during the first 4 months and last 60 days of the term of the TRS. CSLLF also agreed to pay Bank of America customary fees and expenses in connection with the establishment and maintenance of the TRS.
CSLLF was required to initially cash collateralize a specified percentage of each loan (generally 20% to 35% of the market value of senior secured loans) included under the TRS in accordance with margin requirements described in the TRS Agreement. As of December 31, 2016, CSLLF had posted $0.0 million in collateral to Bank of America in relation to the TRS, which was recorded on CSLLF’s statements of assets and liabilities as cash held as collateral on total return swap. The cash collateral represented CSLLF’s maximum credit exposureinvestments as of December 31, 2016.
In connection with the TRS, CSLLF made customary representations and warranties and was required to comply with various covenants, reporting requirements and other customary requirements for similar transactions governed by an ISDA 2002 Master Agreement.
CSLLF’s receivable due on the TRS represents realized amounts from payments on underlying loans2019 (dollars in the total return swap portfolio. At December 31, 2016, the receivable due on TRS was $0.1thousands):
Portfolio Company | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | |||||||||
Investments at Fair Value | | | | | | | | | | | | | | | | | | | | | | | | | |
Freedom Electronics, LLC | | | Electronics | | | First Lien Debt (7.0% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23) | | | | $ | 5,445 | | | | | $ | 5,445 | | | | | $ | 5,445 | | |
Installs, LLC | | | Logistics | | | First Lien Debt (5.8% Cash (1 month LIBOR + 4.0%, 1.8% Floor), Due 6/20/23) | | | | | 7,443 | | | | | | 7,443 | | | | | | 7,443 | | |
RAM Payment, LLC | | | Financial Services | | | First Lien Debt (6.7% Cash (1 month LIBOR + 5.0%, 1.5% Floor), Due 1/4/24) | | | | | 6,653 | | | | | | 6,653 | | | | | | 6,653 | | |
Rapid Fire Protection, Inc.(1) | | | Security System Services | | | First Lien Debt (5.5% Cash (1 month LIBOR + 3.8%, 1.8% Floor), Due 11/22/24) | | | | | 4,400 | | | | | | 4,400 | | | | | | 4,400 | | |
U.S. BioTek Laboratories, LLC | | | Testing Laboratories | | | First Lien Debt (7.0% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23) | | | | | 4,455 | | | | | | 4,455 | | | | | | 4,455 | | |
TOTAL INVESTMENTS | | | | | | | | | | $ | 28,396 | | | | | $ | 28,396 | | | | | $ | 28,396 | | |
Portfolio Company | | | Industry | | | Type of Investment | | | Principal Amount | | | Cost | | | Fair Value | | |||||||||
Investments at Fair Value | | | | | | | | | | | | | | | | | | | | | | | | | |
Freedom Electronics, LLC | | | Electronics | | | First Lien Debt (7.5% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23) | | | | $ | 5,500 | | | | | $ | 5,500 | | | | | $ | 5,500 | | |
U.S. BioTek Laboratories, LLC | | | Testing Laboratories | | | First Lien Debt (7.8% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23) | | | | | 4,500 | | | | | | 4,500 | | | | | | 4,500 | | |
TOTAL INVESTMENTS | | | | | | | | | | $ | 10,000 | | | | | $ | 10,000 | | | | | $ | 10,000 | | |
|
Transactions in TRS contracts during
The following represents the volume of the CSLLF’s derivative transactions during the year December 31, 2016assets and 2015 (dollars in thousands):
For the year ended December 31, 2016 | For the year ended December 31, 2015(1) | |||||||
Average notional par amount of contract | $ | 56,681 | $ | 61,306 |
Below is certain summarized financial informationliabilities for CSLLFCSLF II as of December 31, 20162019 and for the years ended December 31, 2016, and December 31, 20152018 (dollars in thousands):
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
ASSETS | | | | | | | | | | | | | |
Investments at fair value (amortized cost of $28,396 and $10,000, respectively) | | | | $ | 28,396 | | | | | $ | 10,000 | | |
Cash and cash equivalents | | | | | 704 | | | | | | 7,100 | | |
Interest receivable | | | | | 151 | | | | | | 31 | | |
Other assets | | | | | 7 | | | | | | — | | |
Total assets | | | | $ | 29,258 | | | | | $ | 17,131 | | |
LIABILITIES | | | | | | | | | | | | | |
Credit facility (net of deferred financing costs of $621 and $0, respectively) | | | | $ | 12,079 | | | | | $ | — | | |
Interest and financing fees payable | | | | | 113 | | | | | | — | | |
Accounts payable | | | | | 27 | | | | | | 12 | | |
Total liabilities | | | | $ | 12,219 | | | | | $ | 12 | | |
NET ASSETS | | | | | | | | | | | | | |
Members’ capital | | | | $ | 17,039 | | | | | $ | 17,119 | | |
Total net assets | | | | $ | 17,039 | | | | | $ | 17,119 | | |
| | | For the Year Ended December 31, 2019 | | | For the period from December 20, 2018 (commencement of operations) to December 31, 2018 | | ||||||
INVESTMENT INCOME | | | | | | | | | | | | | |
Interest income | | | | $ | 1,372 | | | | | $ | 31 | | |
Fee income | | | | | 175 | | | | | | 100 | | |
Total investment income | | | | $ | 1,547 | | | | | $ | 131 | | |
EXPENSES | | | | | | | | | | | | | |
Interest and financing expenses | | | | $ | 151 | | | | | $ | — | | |
General and administrative expenses | | | | | 176 | | | | | | 12 | | |
Total expenses | | | | $ | 327 | | | | | $ | 12 | | |
NET INVESTMENT INCOME | | | | $ | 1,220 | | | | | $ | 119 | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | | | $ | 1,220 | | | | | $ | 119 | | |
As of December 31, 2016 | ||||
ASSETS | ||||
Receivable due on Total Return Swap | $ | 82 | ||
Total assets | $ | 82 | ||
LIABILITIES | ||||
Distribution payable | $ | 82 | ||
Total liabilities | $ | 82 | ||
NET ASSETS | ||||
Total net assets | $ | — | ||
Total liabilities and net assets | $ | 82 |
For the Year Ended December 31, 2016 | For the period from March 27, 2015 to December 31, 2015 | |||||||
Administrative and legal expenses | $ | (193 | ) | $ | (104 | ) | ||
Net operating loss | $ | (193 | ) | $ | (104 | ) | ||
Net realized gain on Total Return Swap | $ | 2,306 | $ | 1,366 | ||||
Net change in unrealized appreciation (depreciation) on Total Return Swap | 2,828 | (2,828 | ) | |||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,941 | $ | (1,566 | ) |
The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of December 31, 2017, and the level of each financial liability within the fair value hierarchy (dollars in thousands):
The following table presents the carrying value and fair value of the Company’s financial liabilities disclosed, but not carried, at fair value as of December 31, 2016, and the level of each financial liability within the fair value hierarchy (dollars in thousands):
Carrying Value(1) | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
SBA debentures | $ | 170,700 | $ | 175,581 | $ | — | $ | — | $ | 175,581 | ||||||||||
2021 Notes | 113,438 | 115,888 | 115,888 | — | — | |||||||||||||||
Credit Facility | 44,000 | 43,927 | — | — | 43,927 | |||||||||||||||
Total | $ | 328,138 | $ | 335,396 | $ | 115,888 | $ | — | $ | 219,508 |
The estimated fair value of the Company’s SBA debentures was based on future contractual cash payments discounted at market interest rates to borrow from the SBA as of the measurement date.
The estimated fair value of the Company’s 7.125% fixed rate notes due 2021 (the “2021 Notes”) was based on the closing price as of the measurement date as the 2021 Notes were traded on the New York Stock Exchange under the ticker “CLA.”
The estimated fair value of the 2022 Notes and 2022 Convertible Notes was based on their respective closing prices as of the measurement date as they are traded on the NASDAQ Global Select Market under the ticker “CPTAL” (2022 Notes) and on the NASDAQ Capital Market under the ticker “CPTAG” (2022 Convertible Notes).
The estimated fair value of the senior secured revolving credit agreement (the “Credit Facility”) with ING Capital, LLC, as administrative agent, arranger, and bookrunner, and the lender party thereto was based on future contractual cash payments discounted at estimated market interest rates for similar debt.
Company(4) | Type of Investment | Principal Amount | Amount of Interest, Fees or Dividends Credited to Income(1) | December 31, 2016 Fair Value | Gross Additions(2) | Gross Reductions(3) | Realized Gain/(Loss) | Unrealized Gain/(Loss) | December 31, 2017 Fair Value | |||||||||||||||||||||||||||
Affiliate investments | ||||||||||||||||||||||||||||||||||||
AAE Acquisition, LLC | Second Lien Debt (8% Cash, 4% PIK, Due 8/24/19) | $ | 15,846 | $ | 757 | $ | — | $ | 15,846 | $ | — | $ | — | $ | (243 | ) | $ | 15,603 | ||||||||||||||||||
AAE Acquisition, LLC | Membership Units (2.19% fully diluted) | — | — | — | 16 | — | — | (16 | ) | — | ||||||||||||||||||||||||||
AAE Acquisition, LLC | Warrants (37.78% fully diluted) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
757 | — | 15,862 | — | — | (259 | ) | 15,603 | |||||||||||||||||||||||||||||
Burgaflex Holdings, LLC | Subordinated Debt (14% Cash, Due 8/9/19) | 3,000 | 515 | 3,000 | — | — | — | — | 3,000 | |||||||||||||||||||||||||||
Burgaflex Holdings, LLC | Subordinated Debt (12% Cash, Due 8/9/19) | 5,828 | 886 | 5,828 | — | — | — | — | 5,828 | |||||||||||||||||||||||||||
Burgaflex Holdings, LLC | Common Stock (1,253,198 shares) | — | — | 1,248 | — | — | — | (791 | ) | 457 | ||||||||||||||||||||||||||
1,401 | 10,076 | — | — | — | (791 | ) | 9,285 | |||||||||||||||||||||||||||||
City Gear, LLC | Subordinated Debt (13% Cash, Due 10/20/19) | 8,231 | 1,085 | 8,231 | — | — | — | — | 8,231 | |||||||||||||||||||||||||||
City Gear, LLC(5) | Preferred Membership Units (2.78% fully diluted, 9% Cash Dividend) | — | 115 | 1,269 | — | — | — | — | 1,269 | |||||||||||||||||||||||||||
City Gear, LLC | Membership Unit Warrants (11.38% fully diluted) | — | — | 9,736 | — | — | — | (1,488 | ) | 8,248 | ||||||||||||||||||||||||||
1,200 | 19,236 | — | — | — | (1,488 | ) | 17,748 | |||||||||||||||||||||||||||||
GA Communications, Inc.(5) | Series A-1 Preferred Stock (1,998 shares, 8% PIK Dividend) | — | — | 2,864 | 255 | — | — | 106 | 3,225 | |||||||||||||||||||||||||||
GA Communications, Inc. | Series B-1 Common Stock (200,000 shares) | — | — | 1,046 | — | — | — | 886 | 1,932 | |||||||||||||||||||||||||||
— | 3,910 | 255 | — | — | 992 | 5,157 | ||||||||||||||||||||||||||||||
J&J Produce Holdings, Inc. | Subordinated Debt (6% Cash, 7% PIK, Due 6/16/19) | 6,368 | 632 | 6,182 | 186 | — | — | (198 | ) | 6,170 | ||||||||||||||||||||||||||
J&J Produce Holdings, Inc. | Common Stock (8,182 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
J&J Produce Holdings, Inc. | Common Stock Warrants (6,369 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
632 | 6,182 | 186 | — | — | (198 | ) | 6,170 | |||||||||||||||||||||||||||||
LJS Partners, LLC | Common Stock (1,500,000 shares) | — | — | 8,497 | — | (630 | ) | — | (217 | ) | 7,650 | |||||||||||||||||||||||||
— | 8,497 | — | (630 | ) | — | (217 | ) | 7,650 | ||||||||||||||||||||||||||||
MJC Holdings, LLC | Series A Preferred Units (2,000,000 units) | — | — | 5,011 | — | (5,473 | ) | 4,473 | (4,011 | ) | — | |||||||||||||||||||||||||
— | 5,011 | — | (5,473 | ) | 4,473 | (4,011 | ) | — | ||||||||||||||||||||||||||||
MMI Holdings, LLC | First Lien Debt (12% Cash, Due 1/31/19) | 2,600 | 317 | 2,600 | — | — | — | — | 2,600 | |||||||||||||||||||||||||||
MMI Holdings, LLC | Subordinated Debt (6% Cash, Due 1/31/19) | 400 | 24 | 400 | — | — | — | — | 400 | |||||||||||||||||||||||||||
MMI Holdings, LLC(5) | Preferred Units (1,000 units, 6% PIK Dividend) | — | — | 1,433 | 85 | — | — | 2 | 1,520 | |||||||||||||||||||||||||||
MMI Holdings, LLC | Common Membership Units (45 units) | — | — | 228 | — | — | — | (35 | ) | 193 | ||||||||||||||||||||||||||
341 | 4,661 | 85 | — | — | (33 | ) | 4,713 | |||||||||||||||||||||||||||||
MTI Holdings, LLC | Membership Units (2,000,000 units) | — | — | 537 | — | (437 | ) | 437 | (437 | ) | 100 | |||||||||||||||||||||||||
— | 537 | — | (437 | ) | 437 | (437 | ) | 100 |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2018 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2019 Fair Value | | ||||||||||||||||||||||||
Affiliate investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
Burgaflex Holdings, LLC | | | First Lien Debt (12.0% Cash, 3.0% PIK, Due 3/23/21) | | | | $ | 14,421 | | | | | $ | 1,837 | | | | | $ | 14,384 | | | | | $ | 370 | | | | | $ | (750) | | | | | $ | — | | | | | $ | 417 | | | | | $ | 14,421 | | |
Burgaflex Holdings, LLC | | | Common Stock Class B (1,085,073 shares) | | | | | | | | | | | — | | | | | | — | | | | | | 62 | | | | | | — | | | | | | — | | | | | | 573 | | | | | | 635 | | |
Burgaflex Holdings, LLC | | | Common Stock Class A (1,253,198 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 1,837 | | | | | | 14,384 | | | | | | 432 | | | | | | (750) | | | | | | — | | | | | | 990 | | | | | | 15,056 | | |
City Gear, LLC | | | Membership Unit Warrants | | | | | | | | | | | — | | | | | | 3,184 | | | | | | 111 | | | | | | — | | | | | | (111) | | | | | | 142 | | | | | | 3,326 | | |
| | | | | | | | | | | | | | — | | | | | | 3,184 | | | | | | 111 | | | | | | — | | | | | | (111) | | | | | | 142 | | | | | | 3,326 | | |
Eastport Holdings, LLC | | | Subordinated Debt (14.9% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 12/29/21) | | | | | 16,500 | | | | | | 3,230 | | | | | | 16,500 | | | | | | 659 | | | | | | — | | | | | | — | | | | | | (659) | | | | | | 16,500 | | |
Eastport Holdings, LLC | | | Membership Units (22.9% ownership) | | | | | | | | | | | — | | | | | | 17,610 | | | | | | — | | | | | | — | | | | | | — | | | | | | 212 | | | | | | 17,822 | | |
| | | | | | | | | | | | | | 3,230 | | | | | | 34,110 | | | | | | 659 | | | | | | — | | | | | | — | | | | | | (447) | | | | | | 34,322 | | |
GA Communications, Inc.(5) | | | Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend) | | | | | | | | | | | — | | | | | | 3,482 | | | | | | 299 | | | | | | — | | | | | | — | | | | | | (20) | | | | | | 3,761 | | |
GA Communications, Inc. | | | Series B-1 Common Stock (200,000 shares) | | | | | | | | | | | — | | | | | | 1,325 | | | | | | — | | | | | | — | | | | | | — | | | | | | (824) | | | | | | 501 | | |
| | | | | | | | | | | | | | — | | | | | | 4,807 | | | | | | 299 | | | | | | — | | | | | | — | | | | | | (844) | | | | | | 4,262 | | |
J&J Produce Holdings, Inc. | | | Subordinated Debt (13.0% Cash, Due 6/16/19) | | | | | — | | | | | | 485 | | | | | | 6,210 | | | | | | — | | | | | | (5,788) | | | | | | (618) | | | | | | 196 | | | | | | — | | |
J&J Produce Holdings, Inc. | | | Common Stock (8,182 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (818) | | | | | | 818 | | | | | | — | | |
J&J Produce Holdings, Inc. | | | Common Stock Warrants (6,369 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 485 | | | | | | 6,210 | | | | | | — | | | | | | (5,788) | | | | | | (1,436) | | | | | | 1,014 | | | | | | — | | |
LJS Partners, LLC | | | Preferred Units (92,924 units) | | | | | | | | | | | — | | | | | | — | | | | | | 293 | | | | | | — | | | | | | — | | | | | | 79 | | | | | | 372 | | |
LJS Partners, LLC | | | Common Membership Units (2,593,234 units) | | | | | | | | | | | — | | | | | | 3,018 | | | | | | 327 | | | | | | (293) | | | | | | — | | | | | | (1,543) | | | | | | 1,509 | | |
| | | | | | | | | | | | | | — | | | | | | 3,018 | | | | | | 620 | | | | | | (293) | | | | | | — | | | | | | (1,464) | | | | | | 1,881 | | |
MMI Holdings, LLC | | | First Lien Debt (12.0% Cash, Due 1/31/21) | | | | | 2,600 | | | | | | 316 | | | | | | 2,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,600 | | |
MMI Holdings, LLC | | | Subordinated Debt (6.0% Cash, Due 1/31/21) | | | | | 400 | | | | | | 24 | | | | | | 400 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 400 | | |
MMI Holdings, LLC(5) | | | Preferred Units (1,000 units, 6.0% PIK Dividend) | | | | | | | | | | | — | | | | | | 1,612 | | | | | | 98 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,710 | | |
MMI Holdings, LLC | | | Common Membership Units (45 units) | | | | | | | | | | | — | | | | | | 185 | | | | | | — | | | | | | — | | | | | | — | | | | | | 9 | | | | | | 194 | | |
| | | | | | | | | | | | | | 340 | | | | | | 4,797 | | | | | | 98 | | | | | | — | | | | | | — | | | | | | 9 | | | | | | 4,904 | | |
|
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2018 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2019 Fair Value | | ||||||||||||||||||||||||
Navis Holdings, Inc. | | | First Lien Debt (11.0% Cash, Due 6/30/23) | | | | $ | 10,100 | | | | | $ | 568 | | | | | $ | — | | | | | $ | 10,100 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 10,100 | | |
Navis Holdings, Inc.(5) | | | Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend) | | | | | | | | | | | 50 | | | | | | — | | | | | | 1,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,000 | | |
Navis Holdings, Inc. | | | Common Stock (60,000 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 464 | | | | | | 464 | | |
| | | | | | | | | | | | | | 618 | | | | | | — | | | | | | 11,100 | | | | | | — | | | | | | — | | | | | | 464 | | | | | | 11,564 | | |
Nth Degree Investment Group, LLC | | | Membership Units (6,088,000 Units) | | | | | | | | | | | — | | | | | | — | | | | | | 6,088 | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,088 | | |
| | | | | | | | | | | | | | — | | | | | | — | | | | | | 6,088 | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,088 | | |
RAM Payment, LLC | | | First Lien Debt (10.0% Cash, Due 1/4/24) | | | | | 9,019 | | | | | | 1,212 | | | | | | — | | | | | | 9,489 | | | | | | (470) | | | | | | — | | | | | | — | | | | | | 9,019 | | |
RAM Payment, LLC (5) | | | Preferred Units (86,000 Units, 8.0% PIK Dividend) | | | | | | | | | | | — | | | | | | — | | | | | | 928 | | | | | | — | | | | | | — | | | | | | 797 | | | | | | 1,725 | | |
| | | | | | | | | | | | | | 1,212 | | | | | | — | | | | | | 10,417 | | | | | | (470) | | | | | | — | | | | | | 797 | | | | | | 10,744 | | |
Sierra Hamilton Holdings Corporation | | | Second Lien Debt (15.0% PIK, Due 9/12/23) | | | | | 782 | | | | | | 3 | | | | | | — | | | | | | 748 | | | | | | — | | | | | | — | | | | | | — | | | | | | 748 | | |
Sierra Hamilton Holdings Corporation | | | Common Stock (15,068,000 shares) | | | | | | | | | | | — | | | | | | 6,854 | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,694) | | | | | | 5,160 | | |
| | | | | | | | | | | | | | 3 | | | | | | 6,854 | | | | | | 748 | | | | | | — | | | | | | — | | | | | | (1,694) | | | | | | 5,908 | | |
US Bath Group, LLC | | | First Lien Debt (11.5% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 1/2/23) | | | | | — | | | | | | 676 | | | | | | 12,750 | | | | | | — | | | | | | (12,750) | | | | | | — | | | | | | — | | | | | | — | | |
US Bath Group, LLC | | | Membership Units (500,000 units) | | | | | | | | | | | — | | | | | | 2,083 | | | | | | — | | | | | | (4,323) | | | | | | 3,823 | | | | | | (1,583) | | | | | | — | | |
| | | | | | | | | | | | | | 676 | | | | | | 14,833 | | | | | | — | | | | | | (17,073) | | | | | | 3,823 | | | | | | (1,583) | | | | | | — | | |
V12 Holdings, Inc. | | | Subordinated Debt | | | | | | | | | | | — | | | | | | 742 | | | | | | — | | | | | | (30) | | | | | | 12 | | | | | | (16) | | | | | | 708 | | |
| | | | | | | | | | | | | | — | | �� | | | | 742 | | | | | | — | | | | | | (30) | | | | | | 12 | | | | | | (16) | | | | | | 708 | | |
Total Affiliate investments | | | | | | | | | | $ | 8,401 | | | | | $ | 92,939 | | | | | $ | 30,572 | | | | | $ | (24,404) | | | | | $ | 2,288 | | | | | $ | (2,632) | | | | | $ | 98,763 | | | |||
Control investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AAE Acquisition, LLC | | | Second Lien Debt (6.0% PIK, Due 8/24/19) | | | | $ | — | | | | | $ | — | | | | | $ | 16,327 | | | | | $ | 4,084 | | | | | $ | — | | | | | $ | (20,411) | | | | | $ | — | | | | | $ | — | | |
AAE Acquisition, LLC | | | Membership Units (2.2% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (17) | | | | | | 17 | | | | | | — | | |
AAE Acquisition, LLC | | | Warrants (58.9% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | — | | | | | | 16,327 | | | | | | 4,084 | | | | | | — | | | | | | (20,428) | | | | | | 17 | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | First Lien Debt (8.0% Cash, Due 6/30/21) | | | | | — | | | | | | 72 | | | | | | 1,708 | | | | | | 1,842 | | | | | | (3,550) | | | | | | — | | | | | | — | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | First Lien Debt (8.0% Cash, Due 6/30/21) | | | | | — | | | | | | 148 | | | | | | 8,889 | | | | | | — | | | | | | (3,424) | | | | | | (5,465) | | | | | | — | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | Preferred Units – Series A1 (7,200,000 units) | | | | | | | | | | | — | | | | | | — | | | | | | 5,373 | | | | | | — | | | | | | (5,373) | | | | | | — | | | | | | — | | |
Company(4) | Type of Investment | Principal Amount | Amount of Interest, Fees or Dividends Credited to Income(1) | December 31, 2016 Fair Value | Gross Additions(2) | Gross Reductions(3) | Realized Gain/(Loss) | Unrealized Gain/(Loss) | December 31, 2017 Fair Value | |||||||||||||||||||||||||||
Sierra Hamilton Holdings Corporation | Common Stock (15,068,000 shares) | $ | — | $ | — | $ | — | $ | 6,958 | $ | — | $ | — | $ | 1,570 | $ | 8,528 | |||||||||||||||||||
— | — | 6,958 | — | — | 1,570 | 8,528 | ||||||||||||||||||||||||||||||
Source Capital Penray, LLC | Subordinated Debt (13% Cash, Due 4/8/19) | — | 78 | 1,425 | — | (1,425 | ) | — | — | — | ||||||||||||||||||||||||||
Source Capital Penray, LLC | Membership Units (11.3% ownership) | — | 526 | 805 | — | (750 | ) | — | 46 | 101 | ||||||||||||||||||||||||||
604 | 2,230 | — | (2,175 | ) | — | 46 | 101 | |||||||||||||||||||||||||||||
STX Healthcare Management Services, Inc. | Common Stock (1,200,000 shares) | — | — | 109 | — | (16 | ) | 16 | (16 | ) | 93 | |||||||||||||||||||||||||
— | 109 | — | (16 | ) | 16 | (16 | ) | 93 | ||||||||||||||||||||||||||||
U.S. Well Services, LLC | First Lien Debt (7.35% Cash (1 month LIBOR + 6%, 1% floor), Due 2/2/22) | 2,299 | 132 | — | 2,299 | — | — | — | 2,299 | |||||||||||||||||||||||||||
U.S. Well Services, LLC | First Lien Debt (12.35% PIK (1 month LIBOR + 11%, 1% floor), Due 2/2/22) | 9,516 | 83 | — | 9,516 | — | — | — | 9,516 | |||||||||||||||||||||||||||
U.S. Well Services, LLC | Class A Units (5,680,688 Units) | — | — | — | 6,260 | — | — | 8,744 | 15,004 | |||||||||||||||||||||||||||
U.S. Well Services, LLC | Class B Units (2,076,298 Units) | — | — | — | 441 | — | — | 514 | 955 | |||||||||||||||||||||||||||
215 | — | 18,516 | — | — | 9,258 | 27,774 | ||||||||||||||||||||||||||||||
V12 Holdings, Inc. | Subordinated Debt | — | — | 1,015 | — | — | — | 20 | 1,035 | |||||||||||||||||||||||||||
— | 1,015 | — | — | — | 20 | 1,035 | ||||||||||||||||||||||||||||||
Sub Total Affiliate investments | $ | 5,150 | $ | 61,464 | $ | 41,862 | $ | (8,731 | ) | $ | 4,926 | $ | 4,436 | $ | 103,957 | |||||||||||||||||||||
Control investments | ||||||||||||||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | First Lien Debt (12% Cash, 4% PIK, Due 5/24/18) | $ | 12,373 | $ | 1,473 | $ | 11,882 | $ | 491 | $ | — | $ | — | $ | — | $ | 12,373 | |||||||||||||||||||
CableOrganizer Acquisition, LLC | Common Stock (21.3% fully diluted) | — | — | 200 | — | — | — | (82 | ) | 118 | ||||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | Common Stock Warrants (10% fully diluted) | — | — | 101 | — | — | — | (41 | ) | 60 | ||||||||||||||||||||||||||
1,473 | 12,183 | 491 | — | — | (123 | ) | 12,551 | |||||||||||||||||||||||||||||
Capitala Senior Liquid Loan Fund I, LLC | Common Stock (80% Ownership) | — | 5 | — | — | — | — | — | — | |||||||||||||||||||||||||||
5 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Eastport Holdings, LLC | Subordinated Debt (14.49% Cash (3 month LIBOR + 13%, 0.5% Floor), Due 4/29/20) | 16,500 | 3,138 | 16,500 | 757 | — | — | (757 | ) | 16,500 | ||||||||||||||||||||||||||
Eastport Holdings, LLC | Membership Units (33.3% ownership) | — | — | 13,395 | — | — | — | 13,054 | 26,449 | |||||||||||||||||||||||||||
3,138 | 29,895 | 757 | — | — | 12,297 | 42,949 | ||||||||||||||||||||||||||||||
Kelle’s Transport Service, LLC | First Lien Debt (4% Cash, Due 2/15/20) | 2,000 | 22 | — | 2,000 | — | — | — | 2,000 | |||||||||||||||||||||||||||
Kelle’s Transport Service, LLC | First Lien Debt (1.46% Cash, Due 2/15/20) | 13,674 | 77 | — | 13,669 | — | — | (4,109 | ) | 9,560 | ||||||||||||||||||||||||||
Kelle’s Transport Service, LLC | Membership Units (27.5% fully diluted) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
99 | — | 15,669 | — | — | (4,109 | ) | 11,560 | |||||||||||||||||||||||||||||
Micro Precision, LLC | Subordinated Debt (10% Cash, Due 9/15/18) | 1,862 | 186 | 1,862 | — | — | — | — | 1,862 | |||||||||||||||||||||||||||
Micro Precision, LLC | Subordinated Debt (14% Cash, 4% PIK, Due 9/15/18) | 4,154 | 577 | 3,989 | 165 | — | — | — | 4,154 |
Company(4) | Type of Investment | Principal Amount | Amount of Interest, Fees or Dividends Credited to Income(1) | December 31, 2016 Fair Value | Gross Additions(2) | Gross Reductions(3) | Realized Gain/(Loss) | Unrealized Gain/(Loss) | December 31, 2017 Fair Value | |||||||||||||||||||||||||||
Micro Precision, LLC | Series A Preferred Units (47 units) | $ | — | $ | — | $ | 2,523 | $ | — | $ | — | $ | — | $ | (894 | ) | $ | 1,629 | ||||||||||||||||||
763 | 8,374 | 165 | — | — | (894 | ) | 7,645 | |||||||||||||||||||||||||||||
Navis Holdings, Inc. | First Lien Debt (15% Cash, Due 10/30/20) | 6,500 | 989 | 6,500 | — | — | — | — | 6,500 | |||||||||||||||||||||||||||
Navis Holdings, Inc.(5) | Class A Preferred Stock (1,000 shares, 10% Cash Dividend) | — | 100 | 1,000 | — | — | — | — | 1,000 | |||||||||||||||||||||||||||
Navis Holdings, Inc. | Common Stock (300,000 shares) | — | 250 | 5,634 | — | — | — | (629 | ) | 5,005 | ||||||||||||||||||||||||||
1,339 | 13,134 | — | — | — | (629 | ) | 12,505 | |||||||||||||||||||||||||||||
On-Site Fuel Services, Inc. | Subordinated Debt (18% Cash, Due 12/19/18) | 14,072 | — | 10,303 | 1,182 | — | — | 103 | 11,588 | |||||||||||||||||||||||||||
On-Site Fuel Services, Inc. | Series A Preferred Stock (32,782 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
On-Site Fuel Services, Inc. | Series B Preferred Stock (23,648 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
On-Site Fuel Services, Inc. | Common Stock (33,058 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
— | 10,303 | 1,182 | — | — | 103 | 11,588 | ||||||||||||||||||||||||||||||
Portrait Studio, LLC | First Lien Debt (8.56% Cash (1 month LIBOR + 7%, 2% ceiling), Due 12/31/22) | 1,860 | — | — | 1,860 | — | — | — | 1,860 | |||||||||||||||||||||||||||
Portrait Studio, LLC | First Lien Debt (8.56% Cash (1 month LIBOR + 7%, 5% ceiling), Due 12/31/22) | 4,500 | — | — | 4,500 | — | — | — | 4,500 | |||||||||||||||||||||||||||
Portrait Studio, LLC | Preferred Units (4,350,000 Units) | — | — | — | 2,450 | — | — | — | 2,450 | |||||||||||||||||||||||||||
Portrait Studio, LLC | Membership Units (150,000 Units) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
— | — | 8,810 | — | — | — | 8,810 | ||||||||||||||||||||||||||||||
Print Direction, Inc. | First Lien Debt (10% cash 2% PIK, due 2/24/19) | — | 434 | 12,761 | 2,087 | — | (19,403 | ) | 4,555 | — | ||||||||||||||||||||||||||
Print Direction, Inc. | Common Stock (18,543 shares) | — | — | — | 40 | — | (3,030 | ) | 2,990 | — | ||||||||||||||||||||||||||
Print Direction, Inc. | Common Stock Warrants (820 shares) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
434 | 12,761 | 2,127 | — | (22,433 | ) | 7,545 | — | |||||||||||||||||||||||||||||
Sub Total Control investments | $ | 7,251 | $ | 86,650 | $ | 29,201 | $ | — | $ | (22,433 | ) | $ | 14,190 | $ | 107,608 |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2018 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2019 Fair Value | | ||||||||||||||||||||||||
CableOrganizer Acquisition, LLC | | | Preferred Units – Series A (4,000,000 units) | | | | | | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | (2,354) | | | | | $ | 2,354 | | | | | $ | — | | |
CableOrganizer Acquisition, LLC | | | Common Stock (14.9% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,394) | | | | | | 1,394 | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | Common Stock Warrants (40.0% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 220 | | | | | | 10,597 | | | | | | 7,215 | | | | | | (6,974) | | | | | | (14,586) | | | | | | 3,748 | | | | | | — | | |
Capitala Senior Loan Fund II, LLC | | | Subordinated Debt (6.7% Cash (1 month LIBOR + 5.0)%, Due 9/3/24) | | | | $ | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Capitala Senior Loan Fund II, LLC | | | Membership Units (80.0% ownership) | | | | | | | | | | | 1,040 | | | | | | 13,695 | | | | | | — | | | | | | — | | | | | | — | | | | | | (64) | | | | | | 13,631 | | |
| | | | | | | | | | | | | | 1,040 | | | | | | 13,695 | | | | | | — | | | | | | — | | | | | | — | | | | | | (64) | | | | | | 13,631 | | |
Micro Precision, LLC | | | Subordinated Debt (10.0% Cash, Due 3/31/20) | | | | | — | | | | | | 106 | | | | | | 1,862 | | | | | | — | | | | | | (1,862) | | | | | | — | | | | | | — | | | | | | — | | |
Micro Precision, LLC | | | Subordinated Debt (14.0% Cash, 4.0% PIK, Due 3/31/20) | | | | | — | | | | | | 350 | | | | | | 4,325 | | | | | | 88 | | | | | | (4,413) | | | | | | — | | | | | | — | | | | | | — | | |
Micro Precision, LLC | | | Series A Preferred Units (47 units) | | | | | | | | | | | 814 | | | | | | 2,817 | | | | | | — | | | | | | (1,629) | | | | | | — | | | | | | (1,188) | | | | | | — | | |
| | | | | | | | | | | | | | 1,270 | | | | | | 9,004 | | | | | | 88 | | | | | | (7,904) | | | | | | — | | | | | | (1,188) | | | | | | — | | |
Navis Holdings, Inc. | | | First Lien Debt (11.0% Cash, Due 6/30/23) | | | | | — | | | | | | 566 | | | | | | 7,500 | | | | �� | | — | | | | | | (7,500) | | | | | | — | | | | | | — | | | | | | — | | |
Navis Holdings, Inc. (5) | | | Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend) | | | | | | | | | | | 50 | | | | | | 1,000 | | | | | | — | | | | | | (1,000) | | | | | | — | | | | | | — | | | | | | — | | |
Navis Holdings, Inc. | | | Common Stock (60,000 shares) | | | | | | | | | | | — | | | | | | 4,348 | | | | | | — | | | | | | (2,600) | | | | | | 2,599 | | | | | | (4,347) | | | | | | — | | |
| | | | | | | | | | | | | | 616 | | | | | | 12,848 | | | | | | — | | | | | | (11,100) | | | | | | 2,599 | | | | | | (4,347) | | | | | | — | | |
Portrait Studio, LLC | | | First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 2.0% Ceiling), Due 12/31/22) | | | | | — | | | | | | 98 | | | | | | — | | | | | | 3,540 | | | | | | (3,540) | | | | | | — | | | | | | — | | | | | | — | | |
Portrait Studio, LLC | | | First Lien Debt (9.1% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 5.0% Ceiling), Due 12/31/22) | | | | | — | | | | | | 107 | | | | | | 4,500 | | | | | | — | | | | | | (792) | | | | | | (3,708) | | | | | | — | | | | | | — | | |
Portrait Studio, LLC | | | Preferred Units (4,350,000 Units) | | | | | | | | | | | — | | | | | | 2,174 | | | | | | — | | | | | | — | | | | | | (2,450) | | | | | | 276 | | | | | | — | | |
Portrait Studio, LLC | | | Membership Units (150,000 Units) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 205 | | | | | | 6,674 | | | | | | 3,540 | | | | | | (4,332) | | | | | | (6,158) | | | | | | 276 | | | | | | — | | |
Vology, Inc. | | | First Lien Debt (10.5% Cash (1 month LIBOR + 8.5%, 2.0% Floor), Due 12/31/21) | | | | | 3,877 | | | | | | 119 | | | | | | — | | | | | | 3,877 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,877 | | |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2018 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2019 Fair Value | | |||||||||||||||||||||
Vology, Inc. | | | Class A Preferred Units (9,041,810 Units) | | | | | | | $ | — | | | | | $ | — | | | | | $ | 5,215 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 5,215 | | |
Vology, Inc. | | | Membership Units (5,363,982 Units) | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | 119 | | | | | | — | | | | | | 9,092 | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,092 | | |
Total Control investments | | | | | | | $ | 3,470 | | | | | $ | 69,145 | | | | | $ | 24,019 | | | | | $ | (30,310) | | | | | $ | (38,573) | | | | | $ | (1,558) | | | | | $ | 22,723 | | | |||
|
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2017 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2018 Fair Value | | ||||||||||||||||||||||||
Affiliate investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
AAE Acquisition, LLC | | | Second Lien Debt (6.0% Cash, Due 8/24/19) | | | | $ | — | | | | | $ | 479 | | | | | $ | 15,603 | | | | | $ | 320 | | | | | $ | (16,165) | | | | | $ | — | | | | | $ | 242 | | | | | $ | — | | |
AAE Acquisition, LLC | | | Membership Units (2.2% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | (17) | | | | | | — | | | | | | 17 | | | | | | — | | |
AAE Acquisition, LLC | | | Warrants (37.8% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 479 | | | | | | 15,603 | | | | | | 320 | | | | | | (16,182) | | | | | | — | | | | | | 259 | | | | | | — | | |
Burgaflex Holdings, LLC | | | First Lien Debt (12.0% Cash, 1.0% PIK, Due 3/23/21) | | | | | 14,801 | | | | | | 1,390 | | | | | | — | | | | | | 14,801 | | | | | | — | | | | | | — | | | | | | (417) | | | | | | 14,384 | | |
Burgaflex Holdings, LLC | | | Subordinated Debt (14.0% Cash, Due 8/9/19) | | | | | — | | | | | | 116 | | | | | | 3,000 | | | | | | — | | | | | | (3,000) | | | | | | — | | | | | | — | | | | | | — | | |
Burgaflex Holdings, LLC | | | Subordinated Debt (12.0% Cash, Due 8/9/19) | | | | | — | | | | | | 199 | | | | | | 5,828 | | | | | | — | | | | | | (5,828) | | | | | | — | | | | | | — | | | | | | — | | |
Burgaflex Holdings, LLC | | | Common Stock Class A (1,253,198 shares) | | | | | | | | | | | — | | | | | | 457 | | | | | | — | | | | | | — | | | | | | — | | | | | | (457) | | | | | | — | | |
Burgaflex Holdings, LLC | | | Common Stock Class B (900,000 shares) | | | | | | | | | | | — | | | | | | — | | | | | | 300 | | | | | | — | | | | | | — | | | | | | (300) | | | | | | — | | |
| | | | | | | | | | | | | | 1,705 | | | | | | 9,285 | | | | | | 15,101 | | | | | | (8,828) | | | | | | — | | | | | | (1,174) | | | | | | 14,384 | | |
Chef’n Corporation | | | Series A Preferred Stock (1,000,000 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | (644) | | | | | | 644 | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | (644) | | | | | | 644 | | | | | | — | | | | | | — | | |
City Gear, LLC | | | Subordinated Debt (13.0% Cash, Due 10/20/19) | | | | | — | | | | | | 918 | | | | | | 8,231 | | | | | | — | | | | | | (8,231) | | | | | | — | | | | | | — | | | | | | — | | |
City Gear, LLC(5) | | | Preferred Membership Units (2.8% fully diluted, 9.0% Cash Dividend) | | | | | | | | | | | 117 | | | | | | 1,269 | | | | | | — | | | | | | (1,269) | | | | | | — | | | | | | — | | | | | | — | | |
City Gear, LLC | | | Membership Unit Warrants (11.4% fully diluted) | | | | | | | | | | | — | | | | | | 8,248 | | | | | | — | | | | | | (1,908) | | | | | | 1,908 | | | | | | (5,064) | | | | | | 3,184 | | |
| | | | | | | | | | | | | | 1,035 | | | | | | 17,748 | | | | | | — | | | | | | (11,408) | | | | | | 1,908 | | | | | | (5,064) | | | | | | 3,184 | | |
Eastport Holdings, LLC | | | Subordinated Debt (15.8% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 4/29/20) | | | | | 16,500 | | | | | | 1,168 | | | | | | — | | | | | | 15,496 | | | | | | — | | | | | | — | | | | | | 1,004 | | | | | | 16,500 | | |
Eastport Holdings, LLC | | | Membership Units (22.9% ownership) | | | | | | | | | | | — | | | | | | — | | | | | | 4,733 | | | | | | (1,470) | | | | | | — | | | | | | 14,347 | | | | | | 17,610 | | |
| | | | | | | | | | | | | | 1,168 | | | | | | — | | | | | | 20,229 | | | | | | (1,470) | | | | | | — | | | | | | 15,351 | | | | | | 34,110 | | |
|
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2017 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2018 Fair Value | | ||||||||||||||||||||||||
GA Communications, Inc.(5) | | | Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend) | | | | | | | | | | $ | — | | | | | $ | 3,225 | | | | | $ | 276 | | | | | $ | — | | | | | $ | — | | | | | $ | (19) | | | | | $ | 3,482 | | |
GA Communications, Inc. | | | Series B-1 Common Stock (200,000 shares) | | | | | | | | | | | — | | | | | | 1,932 | | | | | | — | | | | | | — | | | | | | — | | | | | | (607) | | | | | | 1,325 | | |
| | | | | | | | | | | | | | — | | | | | | 5,157 | | | | | | 276 | | | | | | — | | | | | | — | | | | | | (626) | | | | | | 4,807 | | |
J&J Produce Holdings, Inc. | | | Subordinated Debt (13.0% Cash, Due 6/16/19) | | | | $ | 6,406 | | | | | | 805 | | | | | | 6,170 | | | | | | 38 | | | | | | — | | | | | | — | | | | | | 2 | | | | | | 6,210 | | |
J&J Produce Holdings, Inc. | | | Common Stock (8,182 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
J&J Produce Holdings, Inc. | | | Common Stock Warrants (6,369 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 805 | | | | | | 6,170 | | | | | | 38 | | | | | | — | | | | | | — | | | | | | 2 | | | | | | 6,210 | | |
LJS Partners, LLC | | | Common Stock (1,587,848 shares) | | | | | | | | | | | — | | | | | | 7,650 | | | | | | 293 | | | | | | — | | | | | | — | | | | | | (4,925) | | | | | | 3,018 | | |
| | | | | | | | | | | | | | — | | | | | | 7,650 | | | | | | 293 | | | | | | — | | | | | | — | | | | | | (4,925) | | | | | | 3,018 | | |
MJC Holdings, LLC | | | Series A Preferred Units (2,000,000 units) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | (28) | | | | | | 28 | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | (28) | | | | | | 28 | | | | | | — | | | | | | — | | |
MMI Holdings, LLC | | | First Lien Debt (12.0% Cash, Due 1/31/20) | | | | | 2,600 | | | | | | 317 | | | | | | 2,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,600 | | |
MMI Holdings, LLC | | | Subordinated Debt (6.0% Cash, Due 1/31/20) | | | | | 400 | | | | | | 24 | | | | | | 400 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 400 | | |
MMI Holdings, LLC(5) | | | Preferred Units (1,000 units, 6.0% PIK Dividend) | | | | | | | | | | | — | | | | | | 1,520 | | | | | | 92 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,612 | | |
MMI Holdings, LLC | | | Common Membership Units (45 units) | | | | | | | | | | | — | | | | | | 193 | | | | | | — | | | | | | — | | | | | | — | | | | | | (8) | | | | | | 185 | | |
| | | | | | | | | | | | | | 341 | | | | | | 4,713 | | | | | | 92 | | | | | | — | | | | | | — | | | | | | (8) | | | | | | 4,797 | | |
MTI Holdings, LLC | | | Membership Units (2,000,000 units) | | | | | | | | | | | — | | | | | | 100 | | | | | | — | | | | | | (139) | | | | | | 139 | | | | | | (100) | | | | | | — | | |
| | | | | | | | | | | | | | — | | | | | | 100 | | | | | | — | | | | | | (139) | | | | | | 139 | | | | | | (100) | | | | | | — | | |
Sierra Hamilton Holdings Corporation | | | Common Stock (15,068,000 shares) | | | | | | | | | | | — | | | | | | 8,528 | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,674) | | | | | | 6,854 | | |
| | | | | | | | | | | | | | — | | | | | | 8,528 | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,674) | | | | | | 6,854 | | |
Source Capital Penray, LLC | | | Membership Units (11.3% ownership) | | | | | | | | | | | 121 | | | | | | 101 | | | | | | — | | | | | | — | | | | | | — | | | | | | (101) | | | | | | — | | |
| | | | | | | | | | | | | | 121 | | | | | | 101 | | | | | | — | | | | | | — | | | | | | — | | | | | | (101) | | | | | | — | | |
STX Healthcare Management Services, Inc. | | | Common Stock (1,200,000 shares) | | | | | | | | | | | — | | | | | | 93 | | | | | | — | | | | | | (108) | | | | | | 108 | | | | | | (93) | | | | | | — | | |
| | | | | | | | | | | | | | — | | | | | | 93 | | | | | | — | | | | | | (108) | | | | | | 108 | | | | | | (93) | | | | | | — | | |
US Bath Group, LLC | | | First Lien Debt (11.4% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 1/2/23) | | | | | 12,750 | | | | | | 1,806 | | | | | | — | | | | | | 15,000 | | | | | | (2,250) | | | | | | — | | | | | | — | | | | | | 12,750 | | |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2017 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2018 Fair Value | | ||||||||||||||||||||||||
US Bath Group, LLC | | | Membership Units (500,000 units) | | | | | | | | | | $ | — | | | | | $ | — | | | | | $ | 500 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,583 | | | | | $ | 2,083 | | |
| | | | | | | | | | | | | | 1,806 | | | | | | — | | | | | | 15,500 | | | | | | (2,250) | | | | | | — | | | | | | 1,583 | | | | | | 14,833 | | |
U.S. Well Services, LLC | | | First Lien Debt (8.3% Cash (1 month LIBOR + 6.0%, 1.0% Floor), Due 2/2/22) | | | | $ | — | | | | | | 156 | | | | | | 2,299 | | | | | | — | | | | | | (2,299) | | | | | | — | | | | | | — | | | | | | — | | |
U.S. Well Services, LLC | | | First Lien Debt (13.3% PIK (1 month LIBOR + 11.0%, 1.0% Floor), Due 2/2/22) | | | | | — | | | | | | 567 | | | | | | 9,516 | | | | | | 409 | | | | | | (9,925) | | | | | | — | | | | | | — | | | | | | — | | |
U.S. Well Services, LLC | | | Class A Units (5,680,688 Units) | | | | | | | | | | | — | | | | | | 15,004 | | | | | | — | | | | | | (6,260) | | | | | | — | | | | | | (8,744) | | | | | | — | | |
U.S. Well Services, LLC | | | Class B Units (2,076,298 Units) | | | | | | | | | | | — | | | | | | 955 | | | | | | — | | | | | | (441) | | | | | | — | | | | | | (514) | | | | | | — | | |
| | | | | | | | | | | | | | 723 | | | | | | 27,774 | | | | | | 409 | | | | | | (18,925) | | | | | | — | | | | | | (9,258) | | | | | | — | | |
V12 Holdings, Inc. | | | Subordinated Debt | | | | | — | | | | | | — | | | | | | 1,035 | | | | | | — | | | | | | (232) | | | | | | 93 | | | | | | (154) | | | | | | 742 | | |
| | | | | | | | | | | | | | — | | | | | | 1,035 | | | | | | — | | | | | | (232) | | | | | | 93 | | | | | | (154) | | | | | | 742 | | |
Total Affiliate investments | | | | | | | | | | $ | 8,183 | | | | | $ | 103,957 | | | | | $ | 52,258 | | | | | $ | (60,214) | | | | | $ | 2,920 | | | | | $ | (5,982) | | | | | $ | 92,939 | | | |||
Control investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AAE Acquisition, LLC | | | Second Lien Debt (6.0% Cash, Due 8/24/19) | | | | $ | 16,327 | | | | | $ | 488 | | | | | $ | — | | | | | $ | 16,327 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 16,327 | | |
AAE Acquisition, LLC | | | Membership Units (2.2% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | 17 | | | | | | — | | | | | | — | | | | | | (17) | | | | | | — | | |
AAE Acquisition, LLC | | | Warrants (37.8% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 488 | | | | | | — | | | | | | 16,344 | | | | | | — | | | | | | — | | | | | | (17) | | | | | | 16,327 | | |
CableOrganizer Acquisition, LLC | | | First Lien Debt (10.0% Cash, Due 5/24/19) | | | | | 1,708 | | | | | | 121 | | | | | | — | | | | | | 1,708 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,708 | | |
CableOrganizer Acquisition, LLC | | | First Lien Debt (12.0% Cash, 4.0% PIK, Due 6/30/19) | | | | | 8,889 | | | | | | 1,173 | | | | | | 12,373 | | | | | | 515 | | | | | | (2,354) | | | | | | (1,646) | | | | | | 1 | | | | | | 8,889 | | |
CableOrganizer Acquisition, LLC | | | Preferred Units (4,000,000 units) | | | | | | | | | | | | | | | | | — | | | | | | 2,354 | | | | | | — | | | | | | — | | | | | | (2,354) | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | Common Stock (21.3% fully diluted) | | | | | | | | | | | — | | | | | | 118 | | | | | | — | | | | | | — | | | | | | — | | | | | | (118) | | | | | | — | | |
CableOrganizer Acquisition, LLC | | | Common Stock Warrants (10.0% fully diluted) | | | | | | | | | | | — | | | | | | 60 | | | | | | — | | | | | | — | | | | | | — | | | | | | (60) | | | | | | — | | |
| | | | | | | | | | | | | | 1,294 | | | | | | 12,551 | | | | | | 4,577 | | | | | | (2,354) | | | | | | (1,646) | | | | | | (2,531) | | | | | | 10,597 | | |
Capitala Senior Loan Fund II, LLC | | | Membership Units (80.0% ownership) | | | | | | | | | | | — | | | | | | — | | | | | | 13,600 | | | | | | — | | | | | | — | | | | | | 95 | | | | | | 13,695 | | |
| | | | | | | | | | | | | | — | | | | | | — | | | | | | 13,600 | | | | | | — | | | | | | — | | | | | | 95 | | | | | | 13,695 | | |
Eastport Holdings, LLC | | | Subordinated Debt (15.8% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 4/29/20) | | | | | — | | | | | | 2,144 | | | | | | 16,500 | | | | | | 493 | | | | | | (15,231) | | | | | | — | | | | | | (1,762) | | | | | | — | | |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2017 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2018 Fair Value | | ||||||||||||||||||||||||
Eastport Holdings, LLC | | | Membership Units (22.9% ownership) | | | | | | | | | | $ | — | | | | | $ | 26,449 | | | | | $ | — | | | | | $ | (4,733) | | | | | $ | — | | | | | $ | (21,716) | | | | | $ | — | | |
| | | | | | | | | | | | | | 2,144 | | | | | | 42,949 | | | | | | 493 | | | | | | (19,964) | | | | | | — | | | | | | (23,478) | | | | | | — | | |
Kelle’s Transport Service, LLC | | | First Lien Debt (4.0% Cash, Due 2/15/20) | | | | $ | — | | | | | | 82 | | | | | | 2,000 | | | | | | 1,300 | | | | | | (3,300) | | | | | | — | | | | | | — | | | | | | — | | |
Kelle’s Transport Service, LLC | | | First Lien Debt (2.2% Cash, Due 2/15/20) | | | | | — | | | | | | 126 | | | | | | 9,560 | | | | | | — | | | | | | (10,000) | | | | | | (3,669) | | | | | | 4,109 | | | | | | — | | |
Kelle’s Transport Service, LLC | | | Membership Units (27.5% fully diluted) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | 208 | | | | | | 11,560 | | | | | | 1,300 | | | | | | (13,300) | | | | | | (3,669) | | | | | | 4,109 | | | | | | — | | |
Micro Precision, LLC | | | Subordinated Debt (10.0% Cash, Due 1/1/19) | | | | | 1,862 | | | | | | 186 | | | | | | 1,862 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,862 | | |
Micro Precision, LLC | | | Subordinated Debt (14.0% Cash, 4.0% PIK, Due 1/1/19) | | | | | 4,325 | | | | | | 601 | | | | | | 4,154 | | | | | | 171 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,325 | | |
Micro Precision, LLC | | | Series A Preferred Units (47 units) | | | | | | | | | | | — | | | | | | 1,629 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,188 | | | | | | 2,817 | | |
| | | | | | | | | | | | | | 787 | | | | | | 7,645 | | | | | | 171 | | | | | | — | | | | | | — | | | | | | 1,188 | | | | | | 9,004 | | |
Navis Holdings, Inc. | | | First Lien Debt (15.0% Cash, Due 10/30/20) | | | | | 7,500 | | | | | | 1,149 | | | | | | 6,500 | | | | | | 1,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,500 | | |
Navis Holdings, Inc. (5) | | | Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend) | | | | | | | | | | | 100 | | | | | | 1,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,000 | | |
Navis Holdings, Inc. | | | Common Stock (300,000 shares) | | | | | | | | | | | — | | | | | | 5,005 | | | | | | — | | | | | | — | | | | | | — | | | | | | (657) | | | | | | 4,348 | | |
| | | | | | | | | | | | | | 1,249 | | | | | | 12,505 | | | | | | 1,000 | | | | | | — | | | | | | — | | | | | | (657) | | | | | | 12,848 | | |
On-Site Fuel Service, Inc. | | | First Lien Debt (18.0% Cash, Due 12/19/18) | | | | | — | | | | | | 30 | | | | | | — | | | | | | 11,020 | | | | | | — | | | | | | (11,020) | | | | | | — | | | | | | — | | |
On-Site Fuel Service, Inc. | | | Subordinated Debt (18.0% Cash, Due 12/19/18) | | | | | — | | | | | | — | | | | | | 11,588 | | | | | | — | | | | | | (11,020) | | | | | | — | | | | | | (568) | | | | | | — | | |
On-Site Fuel Service, Inc. | | | Series A Preferred Stock (32,782 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,278) | | | | | | 3,278 | | | | | | — | | |
On-Site Fuel Service, Inc. | | | Series B Preferred Stock (23,648 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,364) | | | | | | 2,364 | | | | | | — | | |
On-Site Fuel Service, Inc. | | | Common Stock (33,058 shares) | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (33) | | | | | | 33 | | | | | | — | | |
| | | | | | | | | | | | | | 30 | | | | | | 11,588 | | | | | | 11,020 | | | | | | (11,020) | | | | | | (16,695) | | | | | | 5,107 | | | | | | — | | |
Portrait Studio, LLC | | | First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 2.0% Ceiling), Due 12/31/22) | | | | | — | | | | | | 167 | | | | | | 1,860 | | | | | | 2,400 | | | | | | (4,260) | | | | | | — | | | | | | — | | | | | | — | | |
Portrait Studio, LLC | | | First Lien Debt (9.4% Cash (1 month LIBOR + 7.0%, 1.0% Floor, 5.0% Ceiling), Due 12/31/22) | | | | | 4,500 | | | | | | 435 | | | | | | 4,500 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,500 | | |
Portrait Studio, LLC | | | Preferred Units (4,350,000 Units) | | | | | | | | | | | — | | | | | | 2,450 | | | | | | — | | | | | | — | | | | | | — | | | | | | (276) | | | | | | 2,174 | | |
Company(4) | | | Type of Investment | | | Principal Amount | | | Amount of Interest, Fees or Dividends Credited to Income(1) | | | December 31, 2017 Fair Value | | | Gross Additions(2) | | | Gross Reductions(3) | | | Realized Gain/(Loss) | | | Unrealized Appreciation (Depreciation) | | | December 31, 2018 Fair Value | | |||||||||||||||||||||
Portrait Studio, LLC | | | Membership Units (150,000 Units) | | | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | | | | | | | | | | 602 | | | | | | 8,810 | | | | | | 2,400 | | | | | | (4,260) | | | | | | — | | | | | | (276) | | | | | | 6,674 | | |
Total Control investments | | | | | | | $ | 6,802 | | | | | $ | 107,608 | | | | | $ | 50,905 | | | | | $ | (50,898) | | | | | $ | (22,010) | | | | | $ | (16,460) | | | | | $ | 69,145 | | | |||
|
calendar quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement to our Administrator, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with PIK interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a hurdle of 2.0% per quarter (8.0% annualized). The net investment income used to calculate this part of the incentive fee is also included in the amount of the gross assets used to calculate the 1.75% base management fee. The Company pays the Investment Advisor an incentive fee with respect to the pre-incentive fee net investment income in each calendar quarter as follows:
December 31, 20172019 and December 31, 2016,2018, the Company had incentive fees payable to the Investment Advisor of $2.2$3.7 million and $6.4$2.5 million, respectively.
At
December 31, 2017 | December 31, 2016 | |||||||
CapitalSouth Corporation | $ | 74 | $ | 182 | ||||
CapitalSouth Partners Florida Sidecar Fund II, L.P. | 21 | (35 | ) | |||||
Capitala Investment Advisors, LLC | (2,172 | ) | (6,426 | ) | ||||
Total | $ | (2,077 | ) | $ | (6,279 | ) |
the Investment Advisor. These amounts are reflected in the accompanying consolidated statements of assets and liabilities under the captions, “Due from related parties”,caption “Management and incentive fee payable”fees payable.”
On August 31, 2016, the Company sold assets to FSC II in exchange for 100%and other lenders provide the last-out portion of the partnership interests in FSC II. Concurrent with the sale of these assets to FSC II,unitranche facility. Under a guarantee agreement, the Company received cash considerationmay be required to purchase its pro-rata portion of $47.6 millionfirst-out loans from an affiliated third-party purchaser in exchange for 100%CSLF II upon certain triggering events, including acceleration upon payment default of the partnership interestsunderlying borrower. As of FSC II. The Company’s Board pre-approved this transaction pursuant to Section 57(f)December 31, 2019, the Company has evaluated the fair value of the 1940 Act. Capitala Advisors Corp.,guarantee under the Company’s administrator, also servesguidance of ASC Topic 460 — Guarantees and determined that the fair value of the guarantee is immaterial as the administratorrisk of payment default for first-out loans in CSLF II is considered remote. The maximum exposure to FSCcredit risk as of December 31, 2019 and 2018, was $10.3 million and $4.3 million, respectively, and extends to the stated maturity of the underlying loans in CSLF II. See
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Interest expense and annual charges | | | | $ | 5,454 | | | | | $ | 6,244 | | | | | $ | 6,336 | | |
Deferred financing costs | | | | | 682 | | | | | | 612 | | | | | | 611 | | |
Total interest and financing expenses | | | | $ | 6,136 | | | | | $ | 6,856 | | | | | $ | 6,947 | | |
Average outstanding balance | | | | $ | 152,537 | | | | | $ | 169,028 | | | | | $ | 170,700 | | |
Average stated interest and annual charge rate | | | | | 3.57% | | | | | | 3.69% | | | | | | 3.71% | | |
For the year ended | ||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Interest expense and annual charges | $ | 6,336 | $ | 6,873 | $ | 7,519 | ||||||
Deferred financing costs | 611 | 627 | 655 | |||||||||
Total interest and financing expenses | $ | 6,947 | $ | 7,500 | $ | 8,174 | ||||||
Average outstanding balance | $ | 170,700 | $ | 178,695 | $ | 189,526 | ||||||
Average stated interest and annual charge rate | 3.71 | % | 3.83 | % | 3.96 | % |
As of December 31, 20172019 and December 31, 2016,2018, the Company’s issued and outstanding SBA-guaranteed debentures mature as follows (dollars in thousands):
Fixed Maturity Date | | | Interest Rate | | | SBA Annual Charge | | | December 31, 2019 | | | December 31, 2018 | | ||||||||||||
September 1, 2020 | | | | | 3.215% | | | | | | 0.285% | | | | | $ | 19,000 | | | | | $ | 19,000 | | |
March 1, 2021 | | | | | 4.084% | | | | | | 0.515% | | | | | | — | | | | | | 15,700 | | |
March 1, 2021 | | | | | 4.084% | | | | | | 0.285% | | | | | | 46,000 | | | | | | 46,000 | | |
March 1, 2022 | | | | | 2.766% | | | | | | 0.285% | | | | | | 10,000 | | | | | | 10,000 | | |
March 1, 2022 | | | | | 2.766% | | | | | | 0.515% | | | | | | 50,000 | | | | | | 50,000 | | |
March 1, 2023 | | | | | 2.351% | | | | | | 0.515% | | | | | | 25,000 | | | | | | 25,000 | | |
| | | | | | | | | | | | | | | | $ | 150,000 | | | | | $ | 165,700 | | |
Fixed Maturity Date | Interest Rate | SBA Annual Charge | December 31, 2017 | December 31, 2016 | ||||||||||||
March 1, 2019 | 4.620 | % | 0.941 | % | $ | 5,000 | $ | 5,000 | ||||||||
September 1, 2020 | 3.215 | % | 0.285 | % | 19,000 | 19,000 | ||||||||||
March 1, 2021 | 4.084 | % | 0.515 | % | 15,700 | 15,700 | ||||||||||
March 1, 2021 | 4.084 | % | 0.285 | % | 46,000 | 46,000 | ||||||||||
March 1, 2022 | 2.766 | % | 0.285 | % | 10,000 | 10,000 | ||||||||||
March 1, 2022 | 2.766 | % | 0.515 | % | 50,000 | 50,000 | ||||||||||
March 1, 2023 | 2.351 | % | 0.515 | % | 25,000 | 25,000 | ||||||||||
$ | 170,700 | $ | 170,700 |
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Interest expense | | | | $ | — | | | | | $ | — | | | | | $ | 3,908 | | |
Deferred financing costs | | | | | — | | | | | | — | | | | | | 293 | | |
Total interest and financing expenses | | | | $ | — | | | | | $ | — | | | | | $ | 4,201 | | |
Average outstanding balance | | | | $ | — | | | | | $ | — | | | | | $ | 53,766 | | |
Average stated interest rate | | | | | —% | | | | | | —% | | | | | | 7.13% | | |
For the year ended | ||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Interest expense | $ | 3,908 | $ | 8,082 | $ | 8,082 | ||||||
Deferred financing costs | 293 | 557 | 519 | |||||||||
Total interest and financing expenses | $ | 4,201 | $ | 8,639 | $ | 8,601 | ||||||
Average outstanding balance | $ | 53,766 | $ | 113,438 | $ | 113,438 | ||||||
Average stated interest rate | 7.13 | % | 7.13 | % | 7.13 | % |
The following table summarizes the interest expense, deferred financing costs, average outstanding balance, and average stated interest rate on the 2022 Notes for the years ended December 31, 2017, 2016,2019, 2018, and 20152017 (dollars in thousands):
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Interest expense | | | | $ | 4,500 | | | | | $ | 4,500 | | | | | $ | 2,812 | | |
Deferred financing costs | | | | | 540 | | | | | | 509 | | | | | | 303 | | |
Total interest and financing expenses | | | | $ | 5,040 | | | | | $ | 5,009 | | | | | $ | 3,115 | | |
Average outstanding balance | | | | $ | 75,000 | | | | | $ | 75,000 | | | | | $ | 47,137 | | |
Average stated interest rate | | | | | 6.0% | | | | | | 6.0% | | | | | | 6.0% | | |
For the year ended | ||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Interest expense | $ | 2,812 | $ | — | $ | — | ||||||
Deferred financing costs | 303 | — | — | |||||||||
Total interest and financing expenses | $ | 3,115 | $ | — | $ | — | ||||||
Average outstanding balance | $ | 47,137 | $ | — | $ | — | ||||||
Average stated interest rate | 6.0 | % | — | — |
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Interest expense | | | | $ | 2,995 | | | | | $ | 2,995 | | | | | $ | 1,789 | | |
Deferred financing costs | | | | | 342 | | | | | | 324 | | | | | | 180 | | |
Total interest and financing expenses | | | | $ | 3,337 | | | | | $ | 3,319 | | | | | $ | 1,969 | | |
Average outstanding balance | | | | $ | 52,088 | | | | | $ | 52,088 | | | | | $ | 31,218 | | |
Average stated interest rate | | | | | 5.75% | | | | | | 5.75% | | | | | | 5.75% | | |
For the year ended | ||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Interest expense | $ | 1,789 | $ | — | $ | — | ||||||
Deferred financing costs | 180 | — | — | |||||||||
Total interest and financing expenses | $ | 1,969 | $ | — | $ | — | ||||||
Average outstanding balance | $ | 31,218 | $ | — | $ | — | ||||||
Average stated interest rate | 5.75 | % | — | — |
April 30, 2022.
Facility when the utilized portion is greater than 35% for such day.
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Interest expense | | | | $ | 580 | | | | | $ | 305 | | | | | $ | 908 | | |
Deferred financing costs | | | | | 806 | | | | | | 441 | | | | | | 713 | | |
Unused commitment fees | | | | | 1,222 | | | | | | 1,353 | | | | | | 972 | | |
Total interest and financing expenses | | | | $ | 2,608 | | | | | $ | 2,099 | | | | | $ | 2,593 | | |
Average outstanding balance | | | | $ | 10,448 | | | | | $ | 6,304 | | | | | $ | 22,493 | | |
Average stated interest rate | | | | | 5.41% | | | | | | 4.89% | | | | | | 4.08% | | |
For the year ended | ||||||||||||
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Interest expense | $ | 908 | $ | 2,303 | $ | 724 | ||||||
Deferred financing costs | 713 | 965 | 794 | |||||||||
Unused commitment fees | 972 | 304 | 729 | |||||||||
Total interest and financing expenses | $ | 2,593 | $ | 3,572 | $ | 2,247 | ||||||
Average outstanding balance | $ | 22,493 | $ | 64,625 | $ | 21,860 | ||||||
Average stated interest rate | 4.08 | % | 3.51 | % | 3.25 | % |
As of December 31, 20172019 and 2016,2018, the Company had $9.0 million$0.0 and $44.0$10.0 million, respectively, outstanding under the Credit Facility. The Credit Facility is secured by investments and cash held by Capitala Finance Corp.,the Company, exclusive of assets held at our two SBIC subsidiaries.pledged as collateral for the Company’s SBA debentures. Assets pledged to secure the Credit Facility had a carrying value of $192.4$159.8 million and $158.9 million, respectively, at December 31, 2017.2019 and December 31, 2018. As part of the terms of the Credit Facility, the Company may not make cash distributions with respect to any taxable year that exceed 110% (125% if the Company is not in default and our covered debt does not exceed 85% of the borrowing base) of the amounts required to be distributed to maintain eligibility as a RIC and to reduce our tax liability to zero for taxes imposed on our investment company taxable income and net capital gains.
| | | Carrying Value(1) | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | |||||||||||||||
SBA debentures | | | | $ | 150,000 | | | | | $ | 151,167 | | | | | $ | — | | | | | $ | — | | | | | $ | 151,167 | | |
2022 Notes | | | | | 75,000 | | | | | | 74,970 | | | | | | 74,970 | | | | | | — | | | | | | — | | |
2022 Convertible Notes | | | | | 52,088 | | | | | | 51,498 | | | | | | 51,498 | | | | | | — | | | | | | — | | |
Credit Facility | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 277,088 | | | | | $ | 277,635 | | | | | $ | 126,468 | | | | | $ | — | | | | | $ | 151,167 | | |
| | | Carrying Value(1) | | | Fair Value | | | Level 1 | | | Level 2 | | | Level 3 | | |||||||||||||||
SBA debentures | | | | $ | 165,700 | | | | | $ | 165,436 | | | | | $ | — | | | | | $ | — | | | | | $ | 165,436 | | |
2022 Notes | | | | | 75,000 | | | | | | 74,700 | | | | | | 74,700 | | | | | | — | | | | | | — | | |
2022 Convertible Notes | | | | | 52,088 | | | | | | 49,546 | | | | | | 49,546 | | | | | | — | | | | | | — | | |
Credit Facility | | | | | 10,000 | | | | | | 10,030 | | | | | | — | | | | | | — | | | | | | 10,030 | | |
Total | | | | $ | 302,788 | | | | | $ | 299,712 | | | | | $ | 124,246 | | | | | $ | — | | | | | $ | 175,466 | | |
Dividends31 to December 31 and has filed a tax return for the four months ended December 31, 2017.
| | | Tax year ended December 31, 2019 | | | Tax year ended December 31, 2018 | | | Tax period ended December 31, 2017 | | | Tax year ended August 31, 2017 | | ||||||||||||
Increase (decrease) in accumulated net investment income | | | | $ | (13) | | | | | $ | 38 | | | | | $ | — | | | | | $ | (67) | | |
Increase (decrease) in accumulated net realized gains on investments | | | | | 2,450 | | | | | | — | | | | | | — | | | | | | 88 | | |
Increase (decrease) in capital in excess of par value | | | | | (2,437) | | | | | | (38) | | | | | | — | | | | | | (21) | | |
Tax year ended August 31, 2017 | Tax year ended August 31, 2016 | Tax year ended August 31, 2015 | ||||||||||
Increase (decrease) in accumulated net investment income | $ | (67 | ) | $ | 13,838 | $ | (3,398 | ) | ||||
Increase (decrease) in accumulated net realized gains on investments | 88 | (13,816 | ) | 3,398 | ||||||||
Increase (decrease) in capital in excess of par value | (21 | ) | (22 | ) | — |
For the tax yearsperiods ended December 31, 2019, December 31, 2018, December 31, 2017, and August 31, 2017, 2016, and 2015, the tax basis components of distributable earnings were as follows (dollars in thousands):
| | | Tax year ended December 31, 2019 | | | Tax year ended December 31, 2018 | | | Tax period ended December 31, 2017 | | | Tax year ended August 31, 2017 | | ||||||||||||
Undistributed ordinary income | | | | $ | — | | | | | $ | 1,016 | | | | | $ | 9,851 | | | | | $ | 8,999 | | |
Accumulated capital losses | | | | | (95,186) | | | | | | (79,063) | | | | | | (44,078) | | | | | | (43,618) | | |
Unrealized appreciation (depreciation) | | | | | (9,190) | | | | | | 6,519 | | | | | | 34,065 | | | | | | 25,994 | | |
Other temporary differences | | | | | (6,423) | | | | | | (610) | | | | | | (9,426) | | | | | | (8,276) | | |
Total | | | | $ | (110,799) | | | | | $ | (72,138) | | | | | $ | (9,588) | | | | | $ | (16,901) | | |
Tax year ended August 31, 2017 | Tax year ended August 31, 2016 | Tax year ended August 31, 2015 | ||||||||||
Undistributed ordinary income | $ | 8,999 | $ | 5,646 | $ | — | ||||||
Accumulated capital gains (losses) | (43,618 | ) | (44,296 | ) | 8,378 | |||||||
Unrealized appreciation | 25,994 | 47,837 | 25,269 | |||||||||
Other temporary differences | (8,276 | ) | (2,570 | ) | (8,196 | ) | ||||||
Total | $ | (16,901 | ) | $ | 6,617 | $ | 25,451 |
Capital losses in excess of capital gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations. Under the Regulated Investment Company Modernization Act of 2010, capital losses incurred after September 30, 2011 will not be subject to expiration. As of AugustDecember 31, 2017,2019, the Company has a short-term capital loss carry forward of $3.2$15.1 million and a long-term capital loss carry forward of $40.4$80.1 million.
expenses and generally excludes unrealized appreciation (depreciation) on investments as investment gains and losses are not included in taxable income until they are realized.
| | | Tax year ended December 31, 2019 | | | Tax year ended December 31, 2018 | | | Tax period ended December 31, 2017 | | | Tax year ended August 31, 2017 | | ||||||||||||
Net increase (decrease) in net assets resulting from operations | | | | $ | (27,647) | | | | | $ | (16,026) | | | | | $ | (17,150) | | | | | $ | 1,647 | | |
Net change in unrealized (appreciation) depreciation on investments | | | | | 20,306 | | | | | | (840) | | | | | | (1,698) | | | | | | 18,518 | | |
Capital loss carryforward (utilization) | | | | | 16,246 | | | | | | 34,985 | | | | | | 460 | | | | | | (679) | | |
Tax provision (benefit) | | | | | 628 | | | | | | (1,916) | | | | | | 1,289 | | | | | | — | | |
Other deductions for book in excess of deductions for tax | | | | | 2,903 | | | | | | (9,051) | | | | | | 24,981 | | | | | | 9,053 | | |
Total taxable income | | | | $ | 12,436 | | | | | $ | 7,152 | | | | | $ | 7,882 | | | | | $ | 28,539 | | |
Tax year ended August 31, 2017 | Tax year ended August 31, 2016 | Tax year ended August 31, 2015 | ||||||||||
Net increase in net assets resulting from operations | $ | 1,647 | $ | 10,291 | $ | 10,983 | ||||||
Net change in unrealized (appreciation) depreciation on investments and written call option | 18,518 | (20,809 | ) | 35,557 | ||||||||
Capital loss carryforward (utilization) | (679 | ) | 44,296 | (7,565 | ) | |||||||
Other deductions for book in excess of deductions for tax | 9,053 | (3,654 | ) | 4,488 | ||||||||
Total taxable income | $ | 28,539 | $ | 30,124 | $ | 43,463 |
For income tax purposes, distributions paid to stockholders are reported as ordinary income, return of capital, long term capital gains or a combination thereof. The estimated tax character of distributions paid for the tax yearsperiods ended December 31, 2019, December 31, 2018, December 31, 2017, and August 31, 2017 2016, and 2015were as follows (dollars in thousands):
| | | Tax year ended December 31, 2019 | | | Tax year ended December 31, 2018 | | | Tax period ended December 31, 2017 | | | Tax year ended August 31, 2016 | | ||||||||||||
Ordinary income | | | | $ | 13,451 | | | | | $ | 15,986 | | | | | $ | 6,052 | | | | | $ | 25,187 | | |
Return of capital | | | | | 2,659 | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 16,110 | | | | | $ | 15,986 | | | | | $ | 6,052 | | | | | $ | 25,187 | | |
Tax year ended August 31, 2017 | Tax year ended August 31, 2016 | Tax year ended August 31, 2015 | ||||||||||
Ordinary income | $ | 25,187 | $ | 24,478 | $ | 25,063 | ||||||
Long-term capital gains | — | 8,378 | 10,705 | |||||||||
Return of capital | — | — | — | |||||||||
Total | $ | 25,187 | $ | 32,856 | $ | 35,768 |
For U.S. federal income tax purposes, as of AugustDecember 31, 2017,2019, the aggregate net unrealized appreciationdepreciation for all securities was $26.0$(9.2) million. As of AugustDecember 31, 2017,2019, gross unrealized appreciation was $72.6$7.7 million and gross unrealized depreciation was $46.6$(16.9) million. The aggregate cost of securities for U.S. federal income tax purposes was $450.1$371.7 million as of December 31, 2019. For U.S. federal income tax purposes, as of December 31, 2018, the aggregate net unrealized appreciation for all securities was $6.5 million.
As of December 31, 2018, gross unrealized appreciation was $31.9 million and gross unrealized depreciation was $(25.4) million. The aggregate cost of securities for U.S. federal income tax purposes was $442.4 million as of December 31, 2018.
2036, and $7.9 million of these net
Deferred U.S. federal income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting and U.S. federal income tax purposes. Components of deferred tax assets (liabilities) as of December 31, 20172019 and 20162018 are as follows (dollars in thousands):
| | | December 31, 2019 | | | December 31, 2018 | | ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating loss carryforwards | | | | $ | 4,033 | | | | | $ | 2,963 | | |
Capital loss carryforwards | | | | | 243 | | | | | | — | | |
Other deferred tax assets | | | | | 5 | | | | | | 58 | | |
Less valuation allowance | | | | | (3,166) | | | | | | (364) | | |
Total deferred tax assets | | | | | 1,115 | | | | | | 2,657 | | |
Deferred tax liabilities: | | | | ||||||||||
Net unrealized appreciation on investments | | | | | (1,115) | | | | | | (2,029) | | |
Total deferred tax liabilities | | | | | (1,115) | | | | | | (2,029) | | |
Net deferred tax asset (liability) | | | | $ | — | | | | | $ | 628 | | |
December 31, 2017 | December 31, 2016 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforwards | $ | 2,216 | $ | — | ||||
Less valuation allowance | (363 | ) | — | |||||
1,853 | — | |||||||
Deferred tax liabilities: | ||||||||
Net unrealized appreciation on investments | (2,809 | ) | — | |||||
Basis reduction in partnership investments | (333 | ) | — | |||||
(3,142 | ) | — | ||||||
Net deferred tax liability | $ | (1,289 | ) | $ | — |
At December 31, 2017,2019 and December 31, 2018, the valuation allowance on deferred tax assets was $3.2 and $0.4 million, respectively, which represents the state tax effect of net operating losses that we do not believe we will realize through future taxable income. The Company believes it is more likely than not that there is an ability to realize its remaining deferred tax assets through future table income. Any adjustments to the Company’s valuation allowance will depend on estimates of future taxable income and will be made in the period such determination is made.
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Tax expense (benefit) at statutory rates | | | | $ | (1,742) | | | | | $ | (1,447) | | | | | $ | 1,998 | | |
State income tax expense (benefit), net of federal benefit | | | | | (300) | | | | | | (266) | | | | | | 188 | | |
Tax benefit on net operating losses | | | | | — | | | | | | — | | | | | | (908) | | |
Adjustment to unrealized appreciation | | | | | (359) | | | | | | (159) | | | | | | — | | |
Other adjustments | | | | | 218 | | | | | | (40) | | | | | | — | | |
Tax expense on permanent items | | | | | — | | | | | | — | | | | | | 140 | | |
Revaluation for federal rate change | | | | | — | | | | | | — | | | | | | (492) | | |
Revaluation for state rate change | | | | | 10 | | | | | | (5) | | | | | | — | | |
Change in valuation allowance | | | | | 2,801 | | | | | | 1 | | | | | | 363 | | |
Total tax provision (benefit), net | | | | $ | 628 | | | | | $ | (1,916) | | | | | $ | 1,289 | | |
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Tax expense at statutory rates | $ | 1,998 | $ | — | $ | — | ||||||
State income tax expense (net of federal benefit) | 188 | — | — | |||||||||
Tax benefit on net operating losses | (908 | ) | — | — | ||||||||
Tax expense on permanent items | 140 | — | — | |||||||||
Revaluation for federal rate change | (492 | ) | ||||||||||
Change in valuation allowance | 363 | — | — | |||||||||
Total tax provision, net | $ | 1,289 | $ | — | $ | — |
Total income taxes are computed by applying the federal statutory rate of 35% plus an estimated blended state rate of 4%.
For the years ended December 31, 2017, 20162019, 2018 and 2015,2017, the components of the Company’s tax provision include the following (dollars in thousands):
| | | For the years ended | | |||||||||||||||
| | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Deferred tax provision (benefit) | | | | | | | | | | | | | | | | | | | |
Federal | | | | $ | (1,862) | | | | | $ | (1,615) | | | | | $ | 778 | | |
State | | | | | (311) | | | | | | (302) | | | | | | 148 | | |
Less change in valuation allowance | | | | | 2,801 | | | | | | 1 | | | | | | 363 | | |
Total tax provision (benefit), net | | | | $ | 628 | | | | | $ | (1,916) | | | | | $ | 1,289 | | |
December 31, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||
Deferred tax expense | ||||||||||||
Federal | $ | 778 | $ | — | $ | — | ||||||
State | 148 | — | — | |||||||||
Less valuation allowance | 363 | |||||||||||
Total tax provision, net | $ | 1,289 | $ | — | $ | — |
Our independent directors receive an annual fee of $50,000. They also receive $5,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each board meeting and $5,000 plus reimbursement of reasonable out-of-pocket expenses incurred in connection with attending each committee meeting. In addition, the chairman of the audit committee receives an annual fee of $10,000 and each chairman of any other committee receives an annual fee of $5,000 for their additional services, if any, in these capacities. For the years ended December 31, 2017, 20162019, 2018 and 2015,2017, the Company recognized directorsdirectors’ fees expense of $0.4 million. No compensation is expected to be paid to directors who are “interested persons” of the Company, as such term is defined in Section 2(a)(19) of the 1940 Act.
The
CableOrganizer Acquisition, LLC, a Delaware limited liability company that began operations on April 23, 2013, is a leading online provider of cable and wire management products. The income the Company generated from CableOrganizer Acquisition, LLC, which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $1.8 million, $1.9 million, and $0.4 million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
Eastport Holdings, LLC, an Ohio limited liability company organized on November 1, 2011, is a holding company consisting of marketing and advertising companies located across the U.S. The income the Company generated from Eastport Holdings, LLC, which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $11.4 million and $14.3 million for the years ended December 31, 2017 and December 31, 2016, respectively. The Company invested in the portfolio company in January 2016. As such, comparative financial information forS-X. During the year ended December 31, 2015 is not presented.
Kelle’s Transport Service, LLC, a Delaware limited liability company organized on March 28, 2014, provides temperature sensitive transportation services throughout North America. The income (loss)2019, the Company generated from Kelle’s Transport Service,wrote off its investment in AAE Acquisition, LLC which includes all interest, dividends, PIK interest and PIK dividends, fees, realized losses, and unrealized appreciation (depreciation), was $(6.9) million, $(1.2) million, and $3.0 million fora loss of $(20.4) million. During the yearsyear ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
Navis Holdings, Inc., incorporated in Delaware on December 21, 2010, designs and manufactures leading machinery for the global knit and woven finishing textile industries. The income2019, the Company generated from Navis Holdings, Inc., which includes all interest, dividends, PIK interestsold its investments in Portrait Studio, LLC, CableOrganizer Acquisition, LLC, and PIK dividends, fees,Micro Precision, LLC and unrealized appreciation (depreciation) was $0.7realized a gain/(loss) of $(6.2) million, $1.9$(14.6) million, and $4.2 million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015,$0.0, respectively.
On-Site Fuel Services, Inc. is a 100% owned subsidiary of On-Site Fuel Holdings, Inc., which was incorporated in Delaware on December 19, 2011. On-Site Fuel Services, Inc. provides fueling services for commercial and government vehicle fleets throughout the southeast U.S. The income (loss) the Company generated from On-Site Fuel Service, Inc., which includes all interest, dividends, PIK interest and PIK dividends, fees, and unrealized appreciation (depreciation), was $0.1 million, $4.5 million, and $(3.2) million for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively.
The summarized financial information of our unconsolidated subsidiaries was as follows (dollars in thousands):
As of | ||||||||
Balance Sheet – CableOrganizer Acquisition, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 5,286 | $ | 5,589 | ||||
Noncurrent assets | 9,664 | 9,872 | ||||||
Total assets | $ | 14,950 | $ | 15,461 | ||||
Current liabilities | $ | 5,207 | $ | 4,219 | ||||
Noncurrent liabilities | 12,373 | 11,882 | ||||||
Total liabilities | $ | 17,580 | $ | 16,101 | ||||
Total deficit | $ | (2,630 | ) | $ | (640 | ) |
For the year ended | ||||||||||||
Statements of Operations – CableOrganizer Acquisition, LLC | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 27,134 | $ | 23,277 | $ | 25,315 | ||||||
Cost of goods sold | 19,778 | 15,715 | 16,878 | |||||||||
Gross profit | $ | 7,356 | $ | 7,562 | $ | 8,437 | ||||||
Other expenses | $ | 9,345 | $ | 10,344 | $ | 10,008 | ||||||
Loss before income taxes | (1,989 | ) | (2,782 | ) | (1,571 | ) | ||||||
Net loss | $ | (1,989 | ) | $ | (2,782 | ) | $ | (1,571 | ) |
As of | ||||||||
Balance Sheet – Eastport Holdings, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 94,186 | $ | 96,175 | ||||
Noncurrent assets | 185,087 | 145,802 | ||||||
Total assets | $ | 279,273 | $ | 241,977 | ||||
Current liabilities | $ | 142,250 | $ | 157,622 | ||||
Noncurrent liabilities | 70,765 | 41,355 | ||||||
Total liabilities | $ | 213,015 | $ | 198,977 | ||||
Total equity | $ | 66,258 | $ | 43,000 |
For the year ended | ||||||||
Statement of Operations – Eastport Holdings, LLC | December 31, 2017 | December 31, 2016 | ||||||
Net sales | $ | 556,895 | $ | 499,986 | ||||
Cost of goods sold | 411,167 | 377,036 | ||||||
Gross profit | $ | 145,728 | $ | 122,950 | ||||
Other expenses | $ | 134,231 | $ | 111,677 | ||||
Income before income taxes | 11,497 | 11,273 | ||||||
Income tax provision | 628 | — | ||||||
Net income | $ | 10,869 | $ | 11,273 |
As of | ||||||||
Balance Sheet – Kelle’s Transport Service, LLC | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 6,734 | $ | 8,554 | ||||
Noncurrent assets | 11,801 | 13,237 | ||||||
Total assets | $ | 18,535 | $ | 21,791 | ||||
Current liabilities | $ | 11,092 | $ | 4,655 | ||||
Noncurrent liabilities | 17,693 | 14,962 | ||||||
Total liabilities | $ | 28,785 | $ | 19,617 | ||||
Total equity (deficit) | $ | (10,250 | ) | $ | 2,174 |
For the year ended | ||||||||||||
Statements of Operations – Kelle’s Transport Service, LLC | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 51,405 | $ | 65,471 | $ | 66,942 | ||||||
Cost of goods sold | 49,343 | 55,859 | 54,027 | |||||||||
Gross profit | $ | 2,062 | $ | 9,612 | $ | 12,915 | ||||||
Other expenses | $ | 14,077 | $ | 12,804 | $ | 12,071 | ||||||
Income (loss) before income taxes | (12,015 | ) | (3,192 | ) | 844 | |||||||
Income tax provision | 5 | 44 | 50 | |||||||||
Net income (loss) | $ | (12,020 | ) | $ | (3,236 | ) | $ | 794 |
As of | ||||||||
Balance Sheet – Navis Holdings, Inc. | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 4,721 | $ | 4,655 | ||||
Noncurrent assets | 2,950 | 3,446 | ||||||
Total assets | $ | 7,671 | $ | 8,101 | ||||
Current liabilities | $ | 1,941 | $ | 2,448 | ||||
Noncurrent liabilities | 6,973 | 6,719 | ||||||
Total liabilities | $ | 8,914 | $ | 9,167 | ||||
Total deficit | $ | (1,243 | ) | $ | (1,066 | ) |
For the year ended | ||||||||||||
Statements of Operations – Navis Holdings, Inc. | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 13,948 | $ | 17,803 | $ | 17,076 | ||||||
Cost of goods sold | 8,724 | 10,933 | 11,087 | |||||||||
Gross profit | $ | 5,224 | $ | 6,870 | $ | 5,989 | ||||||
Other expenses | $ | 4,647 | $ | 5,070 | $ | 5,414 | ||||||
Income before income taxes | 577 | 1,800 | 575 | |||||||||
Income tax provision | 229 | 701 | 343 | |||||||||
Net income | $ | 348 | $ | 1,099 | $ | 232 |
As of | ||||||||
Balance Sheet – On-Site Fuel Services, Inc. | December 31, 2017 | December 31, 2016 | ||||||
Current assets | $ | 28,064 | $ | 13,079 | ||||
Noncurrent assets | 26,807 | 16,314 | ||||||
Total assets | $ | 54,871 | $ | 29,393 | ||||
Current liabilities | $ | 32,626 | $ | 16,498 | ||||
Noncurrent liabilities | 34,515 | 19,903 | ||||||
Total liabilities | $ | 67,141 | $ | 36,401 | ||||
Total deficit | $ | (12,270 | ) | $ | (7,008 | ) |
For the year ended | ||||||||||||
Statements of Operations – On-Site Fuel Service, Inc. | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net sales | $ | 157,774 | $ | 110,412 | $ | 114,137 | ||||||
Cost of goods sold | 149,436 | 101,714 | 106,668 | |||||||||
Gross profit | $ | 8,338 | $ | 8,698 | $ | 7,469 | ||||||
Other expenses | $ | 13,600 | $ | 13,682 | $ | 13,592 | ||||||
Loss before income taxes | (5,262 | ) | (4,984 | ) | (6,123 | ) | ||||||
Income tax provision | — | 14 | 1,967 | |||||||||
Net loss | $ | (5,262 | ) | $ | (4,998 | ) | $ | (8,090 | ) |
| | | For the years ended | | |||||||||||||||
Basic and diluted | | | December 31, 2019 | | | December 31, 2018 | | | December 31, 2017 | | |||||||||
Net decrease in net assets resulting from operations | | | | $ | (27,647) | | | | | $ | (16,026) | | | | | $ | (6,984) | | |
Weighted average common stock outstanding – basic and diluted | | | | | 16,117,719 | | | | | | 15,993,436 | | | | | | 15,903,167 | | |
Net decrease in net assets per share resulting from operations – basic and diluted | | | | $ | (1.72) | | | | | $ | (1.00) | | | | | $ | (0.44) | | |
For the year ended | ||||||||||||
Basic and diluted | December 31, 2017 | December 31, 2016 | December 31, 2015 | |||||||||
Net increase (decrease) in net assets resulting from operations | $ | (6,984 | ) | $ | 9,152 | $ | 13,850 | |||||
Weighted average common stock outstanding – basic and diluted | 15,903,167 | 15,819,175 | 15,210,577 | |||||||||
Net increase (decrease) in net assets per share resulting from operations – basic and diluted | $ | (0.44 | ) | $ | 0.58 | $ | 0.91 |
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | | Cash Distribution | | | DRIP Shares Issued | | | DRIP Share Value | | ||||||||||||
January 2, 2019 | | | January 24, 2019 | | | January 30, 2019 | | | | $ | 0.0833 | | | | | $ | 1,256 | | | | | | 10,270 | | | | | $ | 81 | | |
January 2, 2019 | | | February 20, 2019 | | | February 27, 2019 | | | | | 0.0833 | | | | | | 1,253 | | | | | | 10,570 | | | | | | 85 | | |
January 2, 2019 | | | March 21, 2019 | | | March 28, 2019 | | | | | 0.0833 | | | | | | 1,250 | | | | | | 11,756 | | | | | | 89 | | |
April 1, 2019 | | | April 22, 2019 | | | April 29, 2019 | | | | | 0.0833 | | | | | | 1,246 | | | | | | 11,479 | | | | | | 94 | | |
April 1, 2019 | | | May 23, 2019 | | | May 30, 2019 | | | | | 0.0833 | | | | | | 1,243 | | | | | | 11,579 | | | | | | 97 | | |
April 1, 2019 | | | June 20, 2019 | | | June 27, 2019 | | | | | 0.0833 | | | | | | 1,238 | | | | | | 11,747 | | | | | | 104 | | |
July 1, 2019 | | | July 23, 2019 | | | July 30, 2019 | | | | | 0.0833 | | | | | | 1,237 | | | | | | 11,721 | | | | | | 106 | | |
July 1, 2019 | | | August 22, 2019 | | | August 29, 2019 | | | | | 0.0833 | | | | | | 1,231 | | | | | | 16,079 | | | | | | 113 | | |
July 1, 2019 | | | September 20, 2019 | | | September 27, 2019 | | | | | 0.0833 | | | | | | 1,231 | | | | | | 14,327 | | | | | | 114 | | |
October 1, 2019 | | | October 22, 2019 | | | October 29, 2019 | | | | | 0.0833 | | | | | | 1,231 | | | | | | 14,482 | | | | | | 115 | | |
October 1, 2019 | | | November 22, 2019 | | | November 29, 2019 | | | | | 0.0833 | | | | | | 1,234 | | | | | | 14,079 | | | | | | 113 | | |
October 1, 2019 | | | December 23, 2019 | | | December 30, 2019 | | | | | 0.0833 | | | | | | 1,234 | | | | | | 14,133 | | | | | | 115 | | |
Total Distributions Declared and Distributed for 2019 | | | | $ | 1.00 | | | | | $ | 14,884 | | | | | | 152,222 | | | | | $ | 1,226 | | | ||||||
|
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | | Cash Distribution | | | DRIP Shares Issued | | | DRIP Share Value | | ||||||||||||
January 2, 2018 | | | January 22, 2018 | | | January 30, 2018 | | | | $ | 0.0833 | | | | | $ | 1,275 | | | | | | 7,280 | | | | | $ | 54 | | |
January 2, 2018 | | | February 20, 2018 | | | February 27, 2018 | | | | | 0.0833 | | | | | | 1,275 | | | | | | 8,076 | | | | | | 54 | | |
January 2, 2018 | | | March 23, 2018 | | | March 29, 2018 | | | | | 0.0833 | | | | | | 1,274 | | | | | | 7,631 | | | | | | 56 | | |
April 2, 2018 | | | April 19, 2018 | | | April 27, 2018 | | | | | 0.0833 | | | | | | 1,278 | | | | | | 7,006 | | | | | | 53 | | |
April 2, 2018 | | | May 22, 2018 | | | May 30, 2018 | | | | | 0.0833 | | | | | | 1,277 | | | | | | 6,875 | | | | | | 54 | | |
April 2, 2018 | | | June 20, 2018 | | | June 28, 2018 | | | | | 0.0833 | | | | | | 1,280 | | | | | | 6,591 | | | | | | 52 | | |
July 2, 2018 | | | July 23, 2018 | | | July 30, 2018 | | | | | 0.0833 | | | | | | 1,279 | | | | | | 6,515 | | | | | | 53 | | |
July 2, 2018 | | | August 23, 2018 | | | August 30, 2018 | | | | | 0.0833 | | | | | | 1,277 | | | | | | 6,699 | | | | | | 56 | | |
July 2, 2018 | | | September 20, 2018 | | | September 27, 2018 | | | | | 0.0833 | | | | | | 1,249 | | | | | | 10,066 | | | | | | 84 | | |
October 1, 2018 | | | October 23, 2018 | | | October 30, 2018 | | | | | 0.0833 | | | | | | 1,249 | | | | | | 10,918 | | | | | | 85 | | |
October 1, 2018 | | | November 21, 2018 | | | November 29, 2018 | | | | | 0.0833 | | | | | | 1,249 | | | | | | 11,342 | | | | | | 86 | | |
October 1, 2018 | | | December 20, 2018 | | | December 28, 2018 | | | | | 0.0833 | | | | | | 1,255 | | | | | | 11,317 | | | | | | 82 | | |
Total Distributions Declared and Distributed for 2018 | | | | $ | 1.00 | | | | | $ | 15,217 | | | | | | 100,316 | | | | | $ | 769 | | |
Date Declared | Record Date | Payment Date | Amount Per Share | Cash Distribution | DRIP Shares Issued | DRIP Share Value | ||||||||||||||||||
January 3, 2017 | January 20, 2017 | January 30, 2017 | $ | 0.1300 | $ | 1,993 | 5,304 | $ | 70 | |||||||||||||||
January 3, 2017 | February 20, 2017 | February 27, 2017 | 0.1300 | 1,993 | 5,195 | 70 | ||||||||||||||||||
January 3, 2017 | March 23, 2017 | March 30, 2017 | 0.1300 | 1,998 | 4,948 | 67 | ||||||||||||||||||
April 3, 2017 | April 19, 2017 | April 27, 2017 | 0.1300 | 1,996 | 5,164 | 69 | ||||||||||||||||||
April 3, 2017 | May 23, 2017 | May 29, 2017 | 0.1300 | 1,990 | 5,880 | 76 | ||||||||||||||||||
April 3, 2017 | June 21, 2017 | June 29, 2017 | 0.1300 | 1,969 | 7,959 | 97 | ||||||||||||||||||
July 3, 2017 | July 21, 2017 | July 28, 2017 | 0.1300 | 1,995 | 5,889 | 73 | ||||||||||||||||||
July 3, 2017 | August 23, 2017 | August 30, 2017 | 0.1300 | 1,957 | 13,162 | 111 | ||||||||||||||||||
July 3, 2017 | September 20, 2017 | September 28, 2017 | 0.1300 | 1,989 | 9,085 | 80 | ||||||||||||||||||
October 2, 2017 | October 23, 2017 | October 30, 2017 | 0.0833 | 1,280 | 5,876 | 48 | ||||||||||||||||||
October 2, 2017 | November 21, 2017 | November 29, 2017 | 0.0833 | 1,278 | 6,856 | 49 | ||||||||||||||||||
October 2, 2017 | December 20, 2017 | December 28, 2017 | 0.0833 | 1,273 | 7,868 | 55 | ||||||||||||||||||
Total Distributions Declared and Distributed for Fiscal 2017 | $ | 1.42 | $ | 21,711 | 83,186 | $ | 865 |
Date Declared | Record Date | Payment Date | Amount Per Share | Cash Distribution | DRIP Shares Issued | DRIP Share Value | ||||||||||||||||||
January 4, 2016 | January 22, 2016 | January 28, 2016 | $ | 0.1567 | $ | 2,392 | 8,135 | $ | 80 | |||||||||||||||
January 4, 2016 | February 19, 2016 | February 26, 2016 | 0.1567 | 2,405 | 7,076 | 70 | ||||||||||||||||||
January 4, 2016 | March 22, 2016 | March 30, 2016 | 0.1567 | 2,397 | 7,079 | 77 | ||||||||||||||||||
April 1, 2016 | April 22, 2016 | April 28, 2016 | 0.1567 | 2,392 | 6,625 | 85 | ||||||||||||||||||
April 1, 2016 | May 23, 2016 | May 30, 2016 | 0.1567 | 2,372 | 8,147 | 104 | ||||||||||||||||||
April 1, 2016 | June 21, 2016 | June 29, 2016 | 0.1567 | 2,369 | 8,229 | 108 | ||||||||||||||||||
July 1, 2016 | July 22, 2016 | July 29, 2016 | 0.1567 | 2,382 | 7,025 | 98 | ||||||||||||||||||
July 1, 2016 | August 22, 2016 | August 30, 2016 | 0.1567 | 2,391 | 6,256 | 90 | ||||||||||||||||||
July 1, 2016 | September 22, 2016 | September 29, 2016 | 0.1567 | 2,380 | 8,242 | 101 | ||||||||||||||||||
September 22, 2016 | October 21, 2016 | October 28, 2016 | 0.1300 | 1,977 | 6,619 | 82 | ||||||||||||||||||
September 22, 2016 | November 21, 2016 | November 29, 2016 | 0.1300 | 1,926 | 11,384 | 136 | ||||||||||||||||||
September 22, 2016 | December 21, 2016 | December 29, 2016 | 0.1300 | 1,989 | 5,883 | 72 | ||||||||||||||||||
Total Distributions Declared and Distributed for Fiscal 2016 | $ | 1.80 | $ | 27,372 | 90,700 | $ | 1,103 |
Date Declared | Record Date | Payment Date | Amount Per Share | Cash Distribution | DRIP Shares Issued | DRIP Share Value | ||||||||||||||||||
January 2, 2015 | January 22, 2015 | January 29, 2015 | $ | 0.1567 | $ | 2,033 | — | $ | — | |||||||||||||||
January 2, 2015 | February 20, 2015 | February 26, 2015 | 0.1567 | 2,033 | — | — | ||||||||||||||||||
January 2, 2015 | March 23, 2015 | March 30, 2015 | 0.1567 | 1,994 | 2,139 | 38 | ||||||||||||||||||
February 26, 2015 | March 23, 2015(1) | March 30, 2015 | 0.0500 | 635 | 683 | 12 | ||||||||||||||||||
February 26, 2015 | April 23, 2015(1) | April 29, 2015 | 0.0500 | 824 | — | — | ||||||||||||||||||
February 26, 2015 | May 21, 2015(1) | May 28, 2015 | 0.0500 | 808 | 998 | 16 | ||||||||||||||||||
February 26, 2015 | June 22, 2015(1) | June 29, 2015 | 0.0500 | 793 | 1,361 | 20 | ||||||||||||||||||
February 26, 2015 | July 23, 2015(1) | July 30, 2015 | 0.0500 | 783 | 1,600 | 23 | ||||||||||||||||||
February 26, 2015 | August 21, 2015(1) | August 28, 2015 | 0.0500 | 776 | 1,819 | 24 | ||||||||||||||||||
February 26, 2015 | September 23, 2015(1) | September 29, 2015 | 0.0500 | 739 | 4,475 | 53 | ||||||||||||||||||
February 26, 2015 | October 23, 2015(1) | October 29, 2015 | 0.0500 | 750 | 2,974 | 38 | ||||||||||||||||||
February 26, 2015 | November 20, 2015(1) | November 27, 2015 | 0.0500 | 753 | 2,694 | 35 | ||||||||||||||||||
February 26, 2015 | December 22, 2015(1) | December 30, 2015 | 0.0500 | 764 | 2,216 | 25 | ||||||||||||||||||
April 1, 2015 | April 23, 2015 | April 29, 2015 | 0.1567 | 2,581 | — | — | ||||||||||||||||||
April 1, 2015 | May 21, 2015 | May 28, 2015 | 0.1567 | 2,529 | 3,126 | 52 | ||||||||||||||||||
April 1, 2015 | June 22, 2015 | June 29, 2015 | 0.1567 | 2,483 | 4,266 | 63 | ||||||||||||||||||
July 1, 2015 | July 23, 2015 | July 30, 2015 | 0.1567 | 2,454 | 5,016 | 74 | ||||||||||||||||||
July 1, 2015 | August 21, 2015 | August, 28, 2015 | 0.1567 | 2,434 | 5,701 | 74 | ||||||||||||||||||
July 1, 2015 | September 23, 2015 | September 29, 2015 | 0.1567 | 2,320 | 14,026 | 168 | ||||||||||||||||||
October 1, 2015 | October 23, 2015 | October 29, 2015 | 0.1567 | 2,349 | 9,317 | 119 | ||||||||||||||||||
October 1, 2015 | November 20, 2015 | November 27, 2015 | 0.1567 | 2,358 | 8,443 | 111 | ||||||||||||||||||
October 1, 2015 | December 22, 2015 | December 30, 2015 | 0.1567 | 2,392 | 6,929 | 79 | ||||||||||||||||||
Total Distributions Declared and Distributed for Fiscal 2015 | $ | 2.38 | $ | 35,585 | 77,783 | $ | 1,024 |
Date Declared | | | Record Date | | | Payment Date | | | Amount Per Share | | | Cash Distribution | | | DRIP Shares Issued | | | DRIP Share Value | | ||||||||||||
January 3, 2017 | | | January 20, 2017 | | | January 30, 2017 | | | | $ | 0.1300 | | | | | $ | 1,993 | | | | | | 5,304 | | | | | $ | 70 | | |
January 3, 2017 | | | February 20, 2017 | | | February 27, 2017 | | | | | 0.1300 | | | | | | 1,993 | | | | | | 5,195 | | | | | | 70 | | |
January 3, 2017 | | | March 23, 2017 | | | March 30, 2017 | | | | | 0.1300 | | | | | | 1,998 | | | | | | 4,948 | | | | | | 67 | | |
April 3, 2017 | | | April 19, 2017 | | | April 27, 2017 | | | | | 0.1300 | | | | | | 1,996 | | | | | | 5,164 | | | | | | 69 | | |
April 3, 2017 | | | May 23, 2017 | | | May 29, 2017 | | | | | 0.1300 | | | | | | 1,990 | | | | | | 5,880 | | | | | | 76 | | |
April 3, 2017 | | | June 21, 2017 | | | June 29, 2017 | | | | | 0.1300 | | | | | | 1,969 | | | | | | 7,959 | | | | | | 97 | | |
July 3, 2017 | | | July 21, 2017 | | | July 28, 2017 | | | | | 0.1300 | | | | | | 1,995 | | | | | | 5,889 | | | | | | 73 | | |
July 3, 2017 | | | August 23, 2017 | | | August 30, 2017 | | | | | 0.1300 | | | | | | 1,957 | | | | | | 13,162 | | | | | | 111 | | |
July 3, 2017 | | | September 20, 2017 | | | September 28, 2017 | | | | | 0.1300 | | | | | | 1,989 | | | | | | 9,085 | | | | | | 80 | | |
October 2, 2017 | | | October 23, 2017 | | | October 30, 2017 | | | | | 0.0833 | | | | | | 1,280 | | | | | | 5,876 | | | | | | 48 | | |
October 2, 2017 | | | November 21, 2017 | | | November 29, 2017 | | | | | 0.0833 | | | | | | 1,278 | | | | | | 6,856 | | | | | | 49 | | |
October 2, 2017 | | | December 20, 2017 | | | December 28, 2017 | | | | | 0.0833 | | | | | | 1,273 | | | | | | 7,868 | | | | | | 55 | | |
Total Distributions Declared and Distributed for 2017 | | | | $ | 1.42 | | | | | $ | 21,711 | | | | | | 83,186 | | | | | $ | 865 | | |
On February 26, 2015, the Company’s Board authorized a program for the purpose of repurchasing up to $12.0 million worth of its common stock. Under the repurchase program, the Company could have, but was not obligated to, repurchase its outstanding common stock in the open market from time to time provided that the Company complied with the prohibitions under its Insider Trading Policies and Procedures and the guidelines specified in Rule 10b-18 of the 1934 Act, as amended, including certain price, market volume and timing constraints. The repurchase program was in place until the earlier of March 31, 2016 or until $12.0 million of the Company’s outstanding shares of common stock had been repurchased. As of December 31, 2017, the repurchase program has expired and has not been extended by the Board.
The Company repurchased 774,858 shares of common stock in open market transactions for an aggregate cost (including transaction costs) of $12.0 million, utilizing the maximum amount available under the repurchase program. The Company is incorporated in Maryland and under the laws of the state, shares repurchased are considered retired (repurchased shares become authorized but unissued shares) rather than treasury stock. As a result, the cost of the stock repurchased is recorded as a reduction to capital in excess of par value on the consolidated statement of changes in net assets.
and Senior Securities
| | | For the years ended December 31, | | |||||||||||||||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||
Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at beginning of year | | | | $ | 11.88 | | | | | $ | 13.91 | | | | | $ | 15.79 | | | | | $ | 17.04 | | | | | $ | 18.56 | | |
Net investment income(1) | | | | | 0.81 | | | | | | 1.00 | | | | | | 0.98 | | | | | | 1.84 | | | | | | 1.67 | | |
Net realized gain (loss) on investments(1) | | | | | (1.23) | | | | | | (2.18) | | | | | | (1.52) | | | | | | (1.44) | | | | | | 0.35 | | |
Net unrealized appreciation (depreciation) on investments(1) | | | | | (1.26) | | | | | | (0.37) | | | | | | 0.44 | | | | | | 0.35 | | | | | | (1.11) | | |
Net unrealized appreciation (depreciation) on Written Call Option(1) | | | | | — | | | | | | 0.43 | | | | | | (0.26) | | | | | | (0.17) | | | | | | — | | |
Tax benefit (provision)(1) | | | | | (0.04) | | | | | | 0.12 | | | | | | (0.08) | | | | | | — | | | | | | — | | |
Distributions – net investment income | | | | | (0.83) | | | | | | (1.00) | | | | | | (1.42) | | | | | | (1.80) | | | | | | (1.88) | | |
Distributions – return of capital | | | | | (0.17) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Distributions – net realized gains | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (0.50) | | |
Issuance of common stock | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (0.15) | | |
Accretive impact of stock repurchase | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 0.13 | | |
Other(6) | | | | | (0.02) | | | | | | (0.03) | | | | | | (0.02) | | | | | | (0.03) | | | | | | (0.03) | | |
Net asset value at end of year | | | | $ | 9.14 | | | | | $ | 11.88 | | | | | $ | 13.91 | | | | | $ | 15.79 | | | | | $ | 17.04 | | |
Net assets at end of year | | | | $ | 148,113 | | | | | $ | 190,644 | | | | | $ | 221,887 | | | | | $ | 250,582 | | | | | $ | 268,802 | | |
Shares outstanding at end of year | | | | | 16,203,769 | | | | | | 16,051,547 | | | | | | 15,951,231 | | | | | | 15,868,045 | | | | | | 15,777,345 | | |
Per share market value at end of year | | | | $ | 8.73 | | | | | $ | 7.17 | | | | | $ | 7.28 | | | | | $ | 12.93 | | | | | $ | 12.08 | | |
Total return based on market value(2) | | | | | 37.75% | | | | | | 12.14% | | | | | | (35.68)% | | | | | | 24.07% | | | | | | (20.43)% | | |
Ratio/Supplemental data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income to average net assets | | | | | 7.85% | | | | | | 7.60% | | | | | | 6.54% | | | | | | 11.32% | | | | | | 9.55% | | |
Ratio of incentive fee, net of incentive fee waiver, to average net assets(5) | | | | | 0.73% | | | | | | 0.12% | | | | | | 0.15% | | | | | | 2.01% | | | | | | 1.88% | | |
Ratio of interest and financing expenses to average net assets | | | | | 10.30% | | | | | | 8.20% | | | | | | 7.94% | | | | | | 7.68% | | | | | | 7.17% | | |
Ratio of loss on extinguishment of debt to average net assets | | | | | —% | | | | | | —% | | | | | | 1.15% | | | | | | —% | | | | | | —% | | |
Ratio of tax (benefit) provision to average net assets | | | | | 0.38% | | | | | | (0.91)% | | | | | | 0.54% | | | | | | —% | | | | | | —% | | |
Ratio of other operating expenses to average net assets | | | | | 7.62% | | | | | | 6.52% | | | | | | 5.75% | | | | | | 5.61% | | | | | | 5.52% | | |
Ratio of total expenses including tax provision, net of incentive fee waiver to average net assets(5) | | | | | 19.03% | | | | | | 13.93% | | | | | | 15.53% | | | | | | 15.30% | | | | | | 14.57% | | |
Portfolio turnover rate(3) | | | | | 19.18% | | | | | | 22.69% | | | | | | 16.34% | | | | | | 21.33% | | | | | | 25.99% | | |
Average debt outstanding(4) | | | | $ | 290,073 | | | | | $ | 302,420 | | | | | $ | 325,314 | | | | | $ | 356,758 | | | | | $ | 324,824 | | |
Average debt outstanding per common share | | | | $ | 17.90 | | | | | $ | 18.84 | | | | | $ | 20.39 | | | | | $ | 22.48 | | | | | $ | 20.59 | | |
Total Debt Outstanding Exclusive of Treasury Securities: | | | | | | | | | | | |||||||||||||||||||||
Credit Facility | | | | $ | — | | | | | $ | 10,000 | | | | | $ | 9,000 | | | | | $ | 44,000 | | | | | $ | 70,000 | | |
SBA Debentures | | | | $ | 150,000 | | | | | $ | 165,700 | | | | | $ | 170,700 | | | | | $ | 170,700 | | | | | $ | 184,200 | | |
2021 Notes | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 113,438 | | | | | $ | 113,438 | | |
2022 Notes | | | | $ | 75,000 | | | | | $ | 75,000 | | | | | $ | 75,000 | | | | | $ | — | | | | | $ | — | | |
2022 Convertible Notes | | | | $ | 52,088 | | | | | $ | 52,088 | | | | | $ | 52,088 | | | | | $ | — | | | | | $ | — | | |
For the years ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Per share data: | ||||||||||||||||||||
Net asset value at beginning of period | $ | 15.79 | $ | 17.04 | $ | 18.56 | $ | 20.71 | $ | 17.61 | ||||||||||
Net investment income(1) | 0.98 | 1.84 | 1.67 | 1.54 | 1.50 | |||||||||||||||
Net realized gain (loss) on investments(1) | (1.52 | ) | (1.44 | ) | 0.35 | 0.06 | 0.17 | |||||||||||||
Net unrealized appreciation (depreciation) on investments(1) | 0.44 | 0.35 | (1.11 | ) | (1.87 | ) | 0.55 | |||||||||||||
Net unrealized depreciation on Written Call Option(1) | (0.26 | ) | (0.17 | ) | — | — | — | |||||||||||||
Tax provision(1) | (0.08 | ) | — | — | — | — | ||||||||||||||
Distributions declared from net investment income | (1.42 | ) | (1.80 | ) | (1.88 | ) | (1.88 | ) | (0.47 | ) | ||||||||||
Distributions declared from net realized gains | — | — | (0.50 | ) | — | — | ||||||||||||||
Partners’ capital distribution | — | — | — | — | 1.92 | |||||||||||||||
Distribution to partners | — | — | — | — | (0.57 | ) | ||||||||||||||
Issuance of common stock | — | — | (0.15 | ) | — | — | ||||||||||||||
Accretive impact of stock repurchase | — | — | 0.13 | — | — | |||||||||||||||
Other(7) | (0.02 | ) | (0.03 | ) | (0.03 | ) | — | — | ||||||||||||
Net asset value at end of period | $ | 13.91 | $ | 15.79 | $ | 17.04 | $ | 18.56 | $ | 20.71 | ||||||||||
Net assets at end of period | $ | 221,887 | $ | 250,582 | $ | 268,802 | $ | 240,837 | $ | 268,670 | ||||||||||
Shares outstanding at end of period | 15,951,231 | 15,868,045 | 15,777,345 | 12,974,420 | 12,974,420 | |||||||||||||||
Per share market value at end of period | $ | 7.28 | $ | 12.93 | $ | 12.08 | $ | 17.87 | $ | 19.90 | ||||||||||
Total return based on market value(2) | (35.68 | )% | 24.07 | % | (20.43 | )% | (0.85 | )% | 1.88 | % | ||||||||||
Ratio/Supplemental data: | ||||||||||||||||||||
Ratio of net investment income to average net assets | 6.54 | % | 11.32 | % | 9.55 | % | 7.78 | % | 7.68 | % | ||||||||||
Ratio of incentive fee, net of incentive fee waiver, to average net assets(6) | 0.15 | % | 2.01 | % | 1.88 | % | 1.11 | % | 0.60 | % | ||||||||||
Ratio of interest and financing expenses to average net assets | 7.94 | % | 7.68 | % | 7.17 | % | 5.21 | % | 3.30 | % | ||||||||||
Ratio of loss on extinguishment of debt to average net assets | 1.15 | % | — | % | — | % | — | % | — | % | ||||||||||
Ratio of tax provision to average net assets | 0.54 | % | — | % | — | % | — | % | — | % | ||||||||||
Ratio of other operating expenses net of management fee waiver to average net assets(8) | 5.75 | % | 5.61 | % | 5.52 | % | 5.20 | % | 2.38 | % | ||||||||||
Ratio of total expenses including tax provision, net of fee waivers to average net assets(6)(8) | 15.53 | % | 15.30 | % | 14.57 | % | 11.52 | % | 6.28 | % | ||||||||||
Portfolio turnover rate(3) | 16.34 | % | 21.33 | % | 25.99 | % | 18.62 | % | 16.77 | % | ||||||||||
Average debt outstanding(4) | $ | 325,314 | $ | 356,758 | $ | 324,824 | $ | 255,268 | $ | 198,159 | ||||||||||
Average debt outstanding per common share | $ | 20.39 | $ | 22.48 | $ | 20.59 | $ | 19.67 | $ | 15.27 | ||||||||||
Asset coverage ratio per unit(5) | $ | 2,630 | $ | 2,592 | $ | 2,465 | $ | 1,788 | $ | 2,376 |
| | | For the years ended December 31, | | |||||||||||||||||||||||||||
| | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | | |||||||||||||||
Asset coverage per unit:(7) | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Credit Facility | | | | $ | 2,165 | | | | | $ | 2,391 | | | | | $ | 2,630 | | | | | $ | 2,592 | | | | | $ | 2,465 | | |
SBA Debentures | | | | �� | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
2021 Notes | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | $ | 2,592 | | | | | $ | 2,465 | | |
2022 Notes | | | | $ | 2,165 | | | | | $ | 2,391 | | | | | $ | 2,630 | | | | | | N/A | | | | | | N/A | | |
2022 Convertible Notes | | | | $ | 2,165 | | | | | $ | 2,391 | | | | | $ | 2,630 | | | | | | N/A | | | | | | N/A | | |
Involuntary liquidation preference per unit:(8) | | | | | | | | | | | |||||||||||||||||||||
Credit Facility | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
SBA Debentures | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
2021 Notes | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
2022 Notes | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
2022 Convertible Notes | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Average market value per unit(9): | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Credit Facility | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
SBA Debentures | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
2021 Notes | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | $ | 1,006 | | | | | $ | 1,020 | | |
2022 Notes | | | | $ | 1,000 | | | | | $ | 996 | | | | | $ | 1,014 | | | | | | N/A | | | | | | N/A | | |
2022 Convertible Notes | | | | $ | 994 | | | | | $ | 984 | | | | | $ | 1,001 | | | | | | N/A | | | | | | N/A | | |
For the quarter ended | ||||||||||||||||
(Dollars in thousands, except per share data) | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||
Total investment income | $ | 11,600 | $ | 12,312 | $ | 12,362 | $ | 14,815 | ||||||||
Net investment income | $ | 4,220 | $ | 4,410 | $ | 703 | $ | 6,191 | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | (587 | ) | $ | (5,753 | ) | $ | (5,525 | ) | $ | 4,881 | |||||
Net investment income per share(1) | $ | 0.26 | $ | 0.28 | $ | 0.04 | $ | 0.39 | ||||||||
Net increase (decrease) in net assets resulting from operations per share(1) | $ | (0.04 | ) | $ | (0.36 | ) | $ | (0.35 | ) | $ | 0.31 | |||||
Net asset value per share at end of period | $ | 13.91 | $ | 14.21 | $ | 14.97 | $ | 15.71 |
| | | For the quarter ended | | |||||||||||||||||||||
(Dollars in thousands, except per share data) | | | December 31, 2019 | | | September 30, 2019 | | | June 30, 2019 | | | March 31, 2019 | | ||||||||||||
Total investment income | | | | $ | 9,634 | | | | | $ | 10,126 | | | | | $ | 11,590 | | | | | $ | 12,684 | | |
Net investment income | | | | $ | 1,902 | | | | | $ | 2,984 | | | | | $ | 4,022 | | | | | $ | 4,135 | | |
Net increase (decrease) in net assets resulting from operations | | | | $ | (69) | | | | | $ | 1,717 | | | | | $ | (29,144) | | | | | $ | (151) | | |
Net investment income per share(1) | | | | $ | 0.12 | | | | | $ | 0.18 | | | | | $ | 0.25 | | | | | $ | 0.26 | | |
Net increase (decrease) in net assets resulting from operations per share(1) | | | | $ | (0.00) | | | | | $ | 0.11 | | | | | $ | (1.81) | | | | | $ | (0.01) | | |
Net asset value per share at end of period | | | | $ | 9.14 | | | | | $ | 9.40 | | | | | $ | 9.55 | | | | | $ | 11.61 | | |
| | | For the quarter ended | | |||||||||||||||||||||
(Dollars in thousands, except per share data) | | | December 31, 2018 | | | September 30, 2018 | | | June 30, 2018 | | | March 31, 2018 | | ||||||||||||
Total investment income | | | | $ | 11,308 | | | | | $ | 11,530 | | | | | $ | 11,882 | | | | | $ | 12,572 | | |
Net investment income | | | | $ | 3,501 | | | | | $ | 3,851 | | | | | $ | 4,231 | | | | | $ | 4,438 | | |
Net increase (decrease) in net assets resulting from operations | | | | $ | (9,201) | | | | | $ | (11,916) | | | | | $ | 4,948 | | | | | $ | 141 | | |
Net investment income per share(1) | | | | $ | 0.22 | | | | | $ | 0.24 | | | | | $ | 0.26 | | | | | $ | 0.28 | | |
Net increase (decrease) in net assets resulting from operations per share(1) | | | | $ | (0.57) | | | | | $ | (0.74) | | | | | $ | 0.31 | | | | | $ | 0.01 | | |
Net asset value per share at end of period | | | | $ | 11.88 | | | | | $ | 12.71 | | | | | $ | 13.71 | | | | | $ | 13.66 | | |
For the quarter ended | ||||||||||||||||
(Dollars in thousands, except per share data) | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||||
Total investment income | $ | 16,515 | $ | 17,357 | $ | 16,991 | $ | 17,449 | ||||||||
Net investment income | $ | 6,747 | $ | 7,441 | $ | 7,431 | $ | 7,421 | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 8,097 | $ | (2,013 | ) | $ | 7,257 | $ | (4,189 | ) | ||||||
Net investment income per share(1) | $ | 0.43 | $ | 0.47 | $ | 0.47 | $ | 0.47 | ||||||||
Net increase (decrease) in net assets resulting from operations per share(1) | $ | 0.51 | $ | (0.13 | ) | $ | 0.46 | $ | (0.27 | ) | ||||||
Net asset value per share at end of period | $ | 15.79 | $ | 15.68 | $ | 16.28 | $ | 16.29 |
Date Declared | Record Date | Payment Date | Distributions Per Share | |||||||||
January 2, 2018 | January 22, 2018 | January 30, 2018 | $ | 0.0833 | ||||||||
January 2, 2018 | February 20, 2018 | February 27, 2018 | 0.0833 | |||||||||
January 2, 2018 | March 23, 2018 | March 29, 2018 | 0.0833 | |||||||||
Total Distributions Declared for Fiscal 2018 | $ | 0.25 |
On January 2, 2018, the Company invested $15.0 million in first lien debt and $0.5 million in membership units of US Bath Group, LLC. The debt investment has a yield of LIBOR + 9.0% with a 1.0% floor.
On January 19, 2018, the Company received $7.2 million in cash repayment for its first lien debt investment in Brunswick Bowling Products, Inc., repaid at par.
Date Declared | | | Record Date | | | Payment Date | | | Distributions per Share | | |||
January 2, 2020 | | | January 24, 2020 | | | January 30, 2020 | | | | $ | 0.0833 | | |
January 2, 2020 | | | February 20, 2020 | | | February 27, 2020 | | | | $ | 0.0833 | | |
January 2, 2020 | | | March 23, 2020 | | | March 30, 2020 | | | | $ | 0.0833 | | |
Due to the Company’s status as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, the Company was not required to obtain an attestation report from the2019.
None.
| Page | | |||||||
| | | | F-1 | | | |||
| | | | F-2 | | | |||
Audited Financial Statements: | | | | | | | | ||
| | | | F-3 | | | |||
| | | | F-4 | | | |||
| | | | F-5 | | | |||
| | | | F-6 | | | |||
| | | | F-7 | | | |||
| | | | F-18 | | |
None.
| |||||
| | Capitala Finance Corp. | | ||
| Date: | | | By /s/ Joseph B. Alala III Joseph B. Alala III Chief Executive Officer (Principal Executive Officer) Capitala Finance Corp. | |
| Date: | | | By /s/ Stephen A. Arnall Stephen A. Arnall Chief Financial Officer (Principal Financial Capitala Finance Corp. | |
| Date: March 2, 2020 | | | By /s/ Kevin A. Koonts Kevin A. Koonts Chief Accounting Officer (Principal Accounting Officer) Capitala Finance Corp. | |
Signature | | | Title | | | Date | |
/s/ Joseph B. Alala III Joseph B. Alala III | | | Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer) | | March 2, 2020 | | |
/s/ M. Hunt Broyhill M. Hunt Broyhill | | | Director | | March 2, 2020 | | |
/s/ R. Charles Moyer R. Charles Moyer | | | Director | | March 2, 2020 | | |
/s/ Larry W. Carroll Larry W. Carroll | | | Director | | March 2, 2020 | | |
/s/ H. Paul Chapman H. Paul Chapman | | | Director | | March 2, 2020 | |
101