UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20212022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 814-00735
Portman Ridge Finance Corporation
(Exact name of Registrant as specified in its charter)
Delaware |
| 20-5951150 |
(State or other jurisdiction of Incorporation or organization) |
| (I.R.S. Employer Identification Number) |
650 Madison Avenue, 23rd Floor
New York, New York10022
(Address of principal executive offices)
(212) (212) 891-2880
(Registrant's telephone number, including area code)
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 |
| PTMN |
| The NASDAQ Global Select Market |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ |
| Accelerated filer |
|
Non-accelerated filer |
|
| Smaller reporting company | ☐ |
Emerging growth company | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The number of outstanding shares of common stock of the registrant as of November 3, 20217, 2022 was 9,123,275.9,608,913.
TABLE OF CONTENTS
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| Part I. Financial Information |
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Item 1. | Consolidated Financial Statements |
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| Consolidated Balance Sheets as of September 30, |
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 5. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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NOTE ABOUT REFERENCES TO PORTMAN RIDGE FINANCE CORPORATION
In this Quarterly Report on Form 10-Q, the “Company”, “Portman Ridge”, “we”, “us” and “our” refer to Portman Ridge Finance Corporation and its wholly-owned subsidiaries, Garrison Funding 2018-2 Ltd. (“GF CLO 2018-2”), Great Lakes KCAP Funding I LLC, Great Lakes Portman Ridge Funding, LLC, OHA Investment Sub, LLC, OHA Asset Holdings II, LP, Kohlberg Capital Funding I LLC, KCAP Senior Funding I, LLC KCAP Senior Funding I Holdings, LLC, Harvest Equity Holdings, LLC and HCAP ICC, LLC unless the context otherwise requires.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
The information contained in this item should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report and in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2020,2021, as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”). In addition, some of the statements in this report constitute forward-looking statements. The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook, ”believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved. These statements are not
2
guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:
For a more detailed discussion of factors that could cause our actual results to differ from forward-looking statements contained in this Quarterly Report, please see the discussion in Part II, “Item 1A. Risk Factors” of this Quarterly Report, and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.2021. You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date this Quarterly Report is filed with the SEC.
3
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
|
| September 30, 2021 |
|
| December 31, |
| ||
|
| (Unaudited) |
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| ||
ASSETS |
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| ||
Investments at fair value: |
|
|
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|
| ||
Debt securities (amortized cost: 2021 - $450,601,744; 2020 - $392,932,411) |
| $ | 455,079,876 |
|
| $ | 404,860,855 |
|
CLO Fund Securities managed by non-affiliates (amortized cost: 2021 - $33,964,238; 2020 - $45,727,813) |
|
| 17,173,634 |
|
|
| 19,582,555 |
|
Equity securities (cost: 2021 - $29,041,687; 2020 - $24,593,639) |
|
| 22,298,759 |
|
|
| 13,944,876 |
|
Asset Manager Affiliates (cost: 2021 - $17,791,230; 2020 - $17,791,230) |
|
| — |
|
|
| — |
|
Joint Ventures (cost: 2021 - $70,558,377; 2020 - $54,932,458) |
|
| 67,629,114 |
|
|
| 49,349,163 |
|
Total Investments at Fair Value, excluding derivatives (cost: 2021 - $601,957,277; 2020 - $535,977,551) |
|
| 562,181,383 |
|
|
| 487,737,449 |
|
Cash and cash equivalents |
|
| 28,539,989 |
|
|
| 6,990,008 |
|
Restricted cash |
|
| 21,050,857 |
|
|
| 75,913,411 |
|
Interest receivable |
|
| 4,228,748 |
|
|
| 2,972,546 |
|
Receivable for unsettled trades |
|
| 7,070,394 |
|
|
| 25,107,598 |
|
Due from affiliates |
|
| 464,342 |
|
|
| 357,168 |
|
Other assets |
|
| 3,568,698 |
|
|
| 1,100,241 |
|
Total Assets |
| $ | 627,104,411 |
|
| $ | 600,178,421 |
|
LIABILITIES |
|
|
|
|
|
| ||
6.125% Notes Due 2022 (net of offering costs of: 2020 - $1,058,351) |
| $ | - |
|
| $ | 75,667,624 |
|
2018-2 Secured Notes (net of discount of: 2021 - $1,446,983; 2020 - $2,444,512) |
|
| 162,415,715 |
|
|
| 249,418,186 |
|
4.875% Notes Due 2026 (net of discount of: 2021 - $2,266,656; 2020 - $0, net of offering costs of: 2021 - $948,071; 2020 - $0) |
|
| 104,785,273 |
|
|
| — |
|
Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of offering costs of: 2021 - $823,375; 2020 - $1,097,815) |
|
| 68,247,523 |
|
|
| 48,223,083 |
|
Derivative liabilities (cost: 2021 - $30,609; 2020 - $30,609) |
|
| 1,982,091 |
|
|
| 1,108,618 |
|
Payable for unsettled trades |
|
| 4,903,384 |
|
|
| — |
|
Accounts payable, accrued expenses and other liabilities |
|
| 3,961,666 |
|
|
| 1,788,908 |
|
Accrued interest payable |
|
| 3,345,558 |
|
|
| 1,089,531 |
|
Due to affiliates |
|
| 760,112 |
|
|
| 1,374,739 |
|
Management and incentive fees payable |
|
| 5,654,814 |
|
|
| 5,243,869 |
|
Total Liabilities |
|
| 356,056,136 |
|
|
| 383,914,558 |
|
COMMITMENTS AND CONTINGENCIES (NOTE 8) |
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STOCKHOLDERS' EQUITY |
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Common stock, par value $0.01 per share, 20,000,000 common shares authorized; 9,291,578 issued, and 9,123,275 outstanding at September 30, 2021, and 7,609,349 issued, and 7,516,423 outstanding at December 31, |
|
| 91,233 |
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| 75,164 |
|
Capital in excess of par value |
|
| 680,451,474 |
|
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| 639,136,026 |
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Total distributable (loss) earnings |
|
| (409,494,432 | ) |
|
| (422,947,327 | ) |
Total Stockholders' Equity |
|
| 271,048,275 |
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|
| 216,263,863 |
|
Total Liabilities and Stockholders' Equity |
| $ | 627,104,411 |
|
| $ | 600,178,421 |
|
NET ASSET VALUE PER COMMON SHARE (1) |
| $ | 29.71 |
|
| $ | 28.77 |
|
| September 30, 2022 |
|
| December 31, 2021 |
| ||
| (Unaudited) |
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ASSETS |
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Investments at fair value: |
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Non-controlled/non-affiliated investments (amortized cost: 2022 - $510,533; 2021 - $479,153) | $ | 489,242 |
|
| $ | 452,482 |
|
Non-controlled affiliated investments (amortized cost: 2022 - $61,336; 2021 - $74,082) |
| 60,522 |
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| 74,142 |
|
Controlled affiliated investments (cost: 2022 - $58,322; 2021 - $52,130) |
| 21,892 |
|
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| 23,361 |
|
Total Investments at Fair Value (cost: 2022 - $630,191; 2021 - $605,365) | $ | 571,656 |
|
| $ | 549,985 |
|
Cash and cash equivalents |
| 16,871 |
|
|
| 28,919 |
|
Restricted cash |
| 22,183 |
|
|
| 39,421 |
|
Interest receivable |
| 3,166 |
|
|
| 5,514 |
|
Receivable for unsettled trades |
| 12,250 |
|
|
| 20,193 |
|
Due from affiliates |
| 591 |
|
|
| 507 |
|
Other assets |
| 2,808 |
|
|
| 3,762 |
|
Total Assets | $ | 629,525 |
|
| $ | 648,301 |
|
LIABILITIES |
|
|
|
|
| ||
2018-2 Secured Notes (net of discount of: 2022 - $1,270; 2021 - $1,403) | $ | 162,593 |
|
| $ | 162,460 |
|
4.875% Notes Due 2026 (net of discount of: 2022 - $1,819; 2021 - $2,157; net of deferred financing costs of: 2022 - $880; 2021 - $951) |
| 105,301 |
|
|
| 104,892 |
|
Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs of: 2022 - $1,163; 2021 - $732) |
| 95,908 |
|
|
| 79,839 |
|
Derivative liabilities (cost: 2021 - $31) |
| - |
|
|
| 2,412 |
|
Payable for unsettled trades |
| - |
|
|
| 5,397 |
|
Accounts payable, accrued expenses and other liabilities |
| 4,689 |
|
|
| 4,819 |
|
Accrued interest payable |
| 4,330 |
|
|
| 2,020 |
|
Due to affiliates |
| 1,261 |
|
|
| 1,799 |
|
Management and incentive fees payable |
| 3,861 |
|
|
| 4,541 |
|
Total Liabilities | $ | 377,943 |
|
| $ | 368,179 |
|
COMMITMENTS AND CONTINGENCIES (NOTE 8) |
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|
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NET ASSETS |
|
|
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|
| ||
Common stock, par value $0.01 per share, 20,000,000 common shares authorized; 9,906,833 issued, and 9,608,913 outstanding at September 30, 2022, and 9,867,998 issued, and 9,699,695 outstanding at December 31, 2021 | $ | 97 |
|
| $ | 97 |
|
Capital in excess of par value |
| 731,358 |
|
|
| 733,095 |
|
Total distributable (loss) earnings |
| (479,873 | ) |
|
| (453,070 | ) |
Total Net Assets | $ | 251,582 |
|
| $ | 280,122 |
|
Total Liabilities and Net Assets | $ | 629,525 |
|
| $ | 648,301 |
|
NET ASSET VALUE PER COMMON SHARE (1) | $ | 26.18 |
|
| $ | 28.88 |
|
See accompanying notes to unaudited consolidated financial statements.
4
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)(in thousands, except share and per share amounts)
(Unaudited)
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest from investments in debt securities |
| $ | 17,391,146 |
|
| $ | 4,517,268 |
|
| $ | 48,736,532 |
|
| $ | 13,910,567 |
|
Payment-in-kind investment income |
|
| 1,296,496 |
|
|
| 434,446 |
|
|
| 3,172,910 |
|
|
| 1,125,343 |
|
Interest from cash and time deposits |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 15,279 |
|
Investment income on CLO Fund Securities managed by affiliates |
|
| - |
|
|
| 587,239 |
|
|
| - |
|
|
| 2,493,600 |
|
Investment income on CLO Fund Securities managed by non-affiliates |
|
| 748,449 |
|
|
| 42,341 |
|
|
| 2,211,092 |
|
|
| 247,302 |
|
Investment income - Joint Ventures |
|
| 2,442,703 |
|
|
| 2,182,466 |
|
|
| 7,012,167 |
|
|
| 4,760,485 |
|
Capital structuring service fees |
|
| 1,032,346 |
|
|
| 23,602 |
|
|
| 1,628,155 |
|
|
| 302,887 |
|
Total investment income |
|
| 22,911,140 |
|
|
| 7,787,362 |
|
|
| 62,760,856 |
|
|
| 22,855,463 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Management fees |
|
| 2,064,733 |
|
|
| 1,043,645 |
|
|
| 5,771,636 |
|
|
| 3,063,719 |
|
Performance-based incentive fees |
|
| 1,939,170 |
|
|
| 571,846 |
|
|
| 6,332,646 |
|
|
| 1,128,726 |
|
Interest and amortization of debt issuance costs |
|
| 3,408,445 |
|
|
| 2,239,911 |
|
|
| 10,315,528 |
|
|
| 6,984,852 |
|
Professional fees |
|
| 490,284 |
|
|
| 439,503 |
|
|
| 2,680,458 |
|
|
| 1,810,450 |
|
Insurance |
|
| 198,011 |
|
|
| 177,154 |
|
|
| 574,973 |
|
|
| 478,058 |
|
Administrative services expense |
|
| 760,112 |
|
|
| 470,435 |
|
|
| 2,091,769 |
|
|
| 1,361,700 |
|
Other general and administrative expenses |
|
| 332,534 |
|
|
| 147,818 |
|
|
| 1,352,737 |
|
|
| 522,091 |
|
Total expenses |
|
| 9,193,289 |
|
|
| 5,090,312 |
|
|
| 29,119,747 |
|
|
| 15,349,596 |
|
Management and performance-based incentive fees waived |
|
| — |
|
|
|
|
|
|
|
|
| (556,880 | ) | ||
Net Expenses |
|
| 9,193,289 |
|
|
| 5,090,312 |
|
|
| 29,119,747 |
|
|
| 14,792,716 |
|
Net Investment Income |
|
| 13,717,851 |
|
|
| 2,697,050 |
|
|
| 33,641,109 |
|
|
| 8,062,747 |
|
Realized And Unrealized Gains (Losses) On Investments: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net realized (losses) gains from investment transactions |
|
| (3,931,280 | ) |
|
| (1,890,090 | ) |
|
| (11,372,803 | ) |
|
| (3,819,851 | ) |
Net change in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Debt securities |
|
| (4,447,878 | ) |
|
| 4,553,027 |
|
|
| (7,448,405 | ) |
|
| (3,945,277 | ) |
Equity securities |
|
| 1,215,013 |
|
|
| 337,258 |
|
|
| 3,905,834 |
|
|
| 411,276 |
|
CLO Fund Securities managed by affiliates |
|
| — |
|
|
| 1,573,272 |
|
|
| — |
|
|
| (12,168,189 | ) |
CLO Fund Securities managed by non-affiliates |
|
| 706,935 |
|
|
| 363,430 |
|
|
| 9,354,655 |
|
|
| (491,863 | ) |
Joint Venture Investments |
|
| 2,063,261 |
|
|
| 1,146,355 |
|
|
| 2,654,032 |
|
|
| (4,654,363 | ) |
Derivatives |
|
| (179,416 | ) |
|
| (461,629 | ) |
|
| (873,473 | ) |
|
| (999,612 | ) |
Total net change in unrealized appreciation (depreciation) |
|
| (642,085 | ) |
|
| 7,511,713 |
|
|
| 7,592,643 |
|
|
| (21,848,028 | ) |
Net realized and unrealized appreciation (depreciation) on investments |
|
| (4,573,365 | ) |
|
| 5,621,623 |
|
|
| (3,780,160 | ) |
|
| (25,667,879 | ) |
Realized (losses) gains on extinguishments of Debt |
|
| — |
|
|
| — |
|
|
| (1,834,963 | ) |
|
| 154,571 |
|
Net Increase (Decrease) In Stockholders’ Equity Resulting From Operations |
| $ | 9,144,486 |
|
| $ | 8,318,673 |
|
| $ | 28,025,986 |
|
| $ | (17,450,561 | ) |
Net Increase (Decrease) In Stockholders' Equity Resulting from Operations per Common Share (1): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic: |
| $ | 1.00 |
|
| $ | 1.87 |
|
| $ | 3.41 |
|
| $ | (3.91 | ) |
Diluted: |
| $ | 1.00 |
|
| $ | 1.87 |
|
| $ | 3.41 |
|
| $ | (3.91 | ) |
Net Investment Income Per Common Share (1): |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic: |
| $ | 1.50 |
|
| $ | 0.61 |
|
| $ | 4.10 |
|
| $ | 1.81 |
|
Diluted: |
| $ | 1.50 |
|
| $ | 0.61 |
|
| $ | 4.10 |
|
| $ | 1.81 |
|
Weighted Average Shares of Common Stock Outstanding—Basic (1) |
|
| 9,131,456 |
|
|
| 4,441,778 |
|
|
| 8,213,661 |
|
|
| 4,461,650 |
|
Weighted Average Shares of Common Stock Outstanding—Diluted (1) |
|
| 9,131,456 |
|
|
| 4,441,778 |
|
|
| 8,213,661 |
|
|
| 4,461,650 |
|
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
|
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| ||||
INVESTMENT INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled/non-affiliated investments |
| $ | 13,727 |
|
| $ | 16,370 |
|
| $ | 37,043 |
|
| $ | 48,283 |
|
|
Non-controlled affiliated investments |
|
| 823 |
|
|
| 1,775 |
|
|
| 2,271 |
|
|
| 2,670 |
|
|
Controlled affiliated investments |
|
| - |
|
|
| (5 | ) |
|
| - |
|
|
| (5 | ) |
|
Total interest income |
| $ | 14,550 |
|
| $ | 18,140 |
|
| $ | 39,314 |
|
| $ | 50,948 |
|
|
Payment-in-kind income: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled/non-affiliated investments |
| $ | 1,505 |
|
| $ | 1,225 |
|
| $ | 3,830 |
|
| $ | 3,078 |
|
|
Non-controlled affiliated investments |
|
| 74 |
|
|
| 71 |
|
|
| 403 |
|
|
| 95 |
|
|
Controlled affiliated investments |
|
| 161 |
|
|
| - |
|
|
| 181 |
|
|
| - |
|
|
Total payment-in-kind income |
| $ | 1,740 |
|
| $ | 1,296 |
|
| $ | 4,414 |
|
| $ | 3,173 |
|
|
Dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled affiliated investments |
| $ | 1,149 |
|
| $ | 2,070 |
|
| $ | 3,099 |
|
| $ | 3,997 |
|
|
Controlled affiliated investments |
|
| 1,033 |
|
|
| 373 |
|
|
| 3,262 |
|
|
| 3,015 |
|
|
Total dividend income |
| $ | 2,182 |
|
| $ | 2,443 |
|
| $ | 6,361 |
|
| $ | 7,012 |
|
|
Fees and other income |
| $ | 537 |
|
| $ | 1,032 |
|
| $ | 908 |
|
| $ | 1,628 |
|
|
Total investment income |
| $ | 19,009 |
|
| $ | 22,911 |
|
| $ | 50,997 |
|
| $ | 62,761 |
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Management fees |
| $ | 2,082 |
|
| $ | 2,065 |
|
| $ | 6,305 |
|
| $ | 5,772 |
|
|
Performance-based incentive fees |
|
| 1,780 |
|
|
| 1,939 |
|
|
| 4,627 |
|
|
| 6,333 |
|
|
Interest and amortization of debt issuance costs |
|
| 4,673 |
|
|
| 3,408 |
|
|
| 11,906 |
|
|
| 10,315 |
|
|
Professional fees |
|
| 759 |
|
|
| 490 |
|
|
| 2,483 |
|
|
| 2,680 |
|
|
Administrative services expense |
|
| 862 |
|
|
| 760 |
|
|
| 2,531 |
|
|
| 2,092 |
|
|
Other general and administrative expenses |
|
| 461 |
|
|
| 531 |
|
|
| 1,323 |
|
|
| 1,928 |
|
|
Total expenses |
| $ | 10,617 |
|
| $ | 9,193 |
|
| $ | 29,175 |
|
| $ | 29,120 |
|
|
NET INVESTMENT INCOME |
| $ | 8,392 |
|
| $ | 13,718 |
|
| $ | 21,822 |
|
| $ | 33,641 |
|
|
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net realized gains (losses) from investment transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled/non-affiliated investments |
| $ | (8,560 | ) |
| $ | (2,970 | ) |
| $ | (26,339 | ) |
| $ | (10,193 | ) |
|
Non-controlled affiliated investments |
|
| (527 | ) |
|
| (961 | ) |
|
| (197 | ) |
|
| (1,180 | ) |
|
Derivatives |
|
| - |
|
|
| - |
|
|
| (2,095 | ) |
|
| - |
|
|
Net realized gain (loss) on investments |
| $ | (9,087 | ) |
| $ | (3,931 | ) |
| $ | (28,631 | ) |
| $ | (11,373 | ) |
|
Net change in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled/non-affiliated investments |
| $ | (318 | ) |
| $ | 310 |
|
| $ | 5,381 |
|
| $ | 5,143 |
|
|
Non-controlled affiliated investments |
|
| 338 |
|
|
| 182 |
|
|
| (874 | ) |
|
| 1,770 |
|
|
Controlled affiliated investments |
|
| (2,988 | ) |
|
| (955 | ) |
|
| (7,661 | ) |
|
| 1,553 |
|
|
Derivatives |
|
| - |
|
|
| (179 | ) |
|
| 2,442 |
|
|
| (873 | ) |
|
Net unrealized gain (loss) on investments |
| $ | (2,968 | ) |
| $ | (642 | ) |
| $ | (712 | ) |
| $ | 7,593 |
|
|
Tax (provision) benefit on realized and unrealized gains (losses) on investments |
| $ | (542 | ) |
| $ | - |
|
| $ | (1,059 | ) |
| $ | - |
|
|
Net realized and unrealized appreciation (depreciation) on investments, net of taxes |
| $ | (12,597 | ) |
| $ | (4,573 | ) |
| $ | (30,402 | ) |
| $ | (3,780 | ) |
|
Realized gains (losses) on extinguishments of debt |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| $ | (1,835 | ) |
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
| $ | (4,205 | ) |
| $ | 9,145 |
|
| $ | (8,580 | ) |
| $ | 28,026 |
|
|
Net Increase (Decrease) In Net Assets Resulting from Operations per Common Share (1): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted: |
| $ | (0.44 | ) |
| $ | 1.00 |
|
| $ | (0.89 | ) |
| $ | 3.41 |
|
|
Net Investment Income Per Common Share (1): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic and Diluted: |
| $ | 0.87 |
|
| $ | 1.50 |
|
| $ | 2.26 |
|
| $ | 4.10 |
|
|
Weighted Average Shares of Common Stock Outstanding—Basic and Diluted (1) |
|
| 9,602,712 |
|
|
| 9,131,456 |
|
|
| 9,644,870 |
|
|
| 8,213,661 |
|
|
See accompanying notes to unaudited consolidated financial statements.
5
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(1)
(unaudited)
|
| For the Nine Months Ended September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Operations: |
|
|
|
|
|
| ||
Net investment income |
| $ | 33,641,109 |
|
| $ | 8,062,747 |
|
Net realized gains (losses) from investment transactions |
|
| (11,372,803 | ) |
|
| (3,819,851 | ) |
Realized (losses) gains from extinguishments of debt |
|
| (1,834,963 | ) |
|
| 154,571 |
|
Net change in unrealized (depreciation) appreciation on investments |
|
| 7,592,643 |
|
|
| (21,848,028 | ) |
Net increase (decrease) in stockholders’ equity resulting from operations |
|
| 28,025,986 |
|
|
| (17,450,561 | ) |
|
|
|
|
|
|
| ||
Stockholder distributions: |
|
| (14,573,092 | ) |
|
| (8,043,278 | ) |
|
|
|
|
|
|
| ||
Capital share transactions: |
|
|
|
|
|
| ||
Issuance of common stock for: |
|
|
|
|
|
| ||
Dividend reinvestment plan |
|
| 443,778 |
|
|
| 104,238 |
|
Stock repurchases |
|
| (1,826,545 | ) |
|
| (862,871 | ) |
Private placement |
|
| 4,019,598 |
|
|
| — |
|
HCAP purchase (net of offering expenses) |
|
| 38,694,688 |
|
|
| — |
|
Net increase in net assets resulting from capital share transactions |
|
| 41,331,519 |
|
|
| (758,633 | ) |
|
|
|
|
|
|
| ||
Net assets at beginning of period |
|
| 216,263,863 |
|
|
| 152,198,570 |
|
Net assets at end of period |
| $ | 271,048,276 |
|
| $ | 125,946,098 |
|
Net asset value per common share (2) |
| $ | 29.71 |
|
| $ | 28.51 |
|
Common shares outstanding at end of period (2) |
|
| 9,123,275 |
|
|
| 4,416,906 |
|
(in thousands, except share and per share amounts)
(Unaudited)
For the Nine Months Ended September 30, 2022 2021 Operations: Net investment income $ 21,822 $ 33,641 Net realized gains (losses) from investment transactions (28,631 ) (11,373 ) Realized gains (losses) from extinguishments of debt - (1,835 ) Net change in unrealized appreciation (depreciation) on investments (712 ) 7,593 Tax (provision) benefit on realized and unrealized gains (losses) on investments (1,059 ) - Net increase (decrease) in net assets resulting from operations $ (8,580 ) $ 28,026 Stockholder distributions: Distributions of ordinary income $ (18,223 ) $ (14,573 ) Net decrease in net assets resulting from stockholder distributions $ (18,223 ) $ (14,573 ) Capital share transactions: Issuance of common stock for: Distribution reinvestment plan $ 888 $ 444 Stock repurchases (3,004 ) (1,827 ) Private placement and other 379 42,714 Net increase (decrease) in net assets resulting from capital share transactions $ (1,737 ) $ 41,331 Net assets at beginning of period $ 280,122 $ 216,264 Net assets at end of period $ 251,582 $ 271,048 Net asset value per common share (2) $ 26.18 $ 29.71 Common shares outstanding at end of period (2) 9,608,913 9,123,275
See accompanying notes to unaudited consolidated financial statements.
6
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)(in thousands, except share and per share amounts)
|
| For the Nine Months Ended September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
OPERATING ACTIVITIES: |
|
|
|
|
|
| ||
Net increase (decrease) in stockholders' equity resulting from operations |
| $ | 28,025,986 |
|
| $ | (17,450,561 | ) |
Adjustments to reconcile net increase (decrease) in stockholders' equity resulting from operations to net cash (used in) provided by in operations: |
|
|
|
|
|
| ||
Net realized (gains) losses on investment transactions |
|
| 11,372,803 |
|
|
| 3,819,851 |
|
Net change in unrealized (depreciation) appreciation from investments |
|
| (7,592,643 | ) |
|
| 21,848,028 |
|
Purchases of investments |
|
| (215,215,715 | ) |
|
| (107,085,081 | ) |
Proceeds from sales and redemptions of investments |
|
| 219,759,649 |
|
|
| 75,298,827 |
|
Net accretion of investments |
|
| (25,672,805 | ) |
|
| (4,683,861 | ) |
Amortization of debt issuance costs |
|
| 728,593 |
|
|
| 705,256 |
|
Realized gains on extinguishments of debt |
|
| 1,834,963 |
|
|
| (154,571 | ) |
Net payment-in-kind interest income |
|
| (2,430,410 | ) |
|
| (380,093 | ) |
Cash consideration net of cash acquired from mergers |
|
| 13,581,062 |
|
|
| — |
|
(Increase) decrease in operating assets: |
|
|
|
|
|
| ||
Receivable for unsettled trades |
|
| 18,037,204 |
|
|
| 22,572,899 |
|
Interest and dividends receivable |
|
| (1,256,202 | ) |
|
| (559,702 | ) |
Due from affiliates |
|
| (107,174 | ) |
|
| 285,756 |
|
Other assets |
|
| (2,416,671 | ) |
|
| (396,544 | ) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
| ||
Payable for unsettled trades |
|
| 4,903,384 |
|
|
| — |
|
Accrued interest payable |
|
| 2,256,027 |
|
|
| 615,784 |
|
Management and incentive fees payable |
|
| 410,945 |
|
|
| 538,512 |
|
Due to affiliates |
|
| (614,627 | ) |
|
| (115,533 | ) |
Accounts payable and accrued expenses |
|
| 2,172,758 |
|
|
| 187,857 |
|
Net cash used in operating activities |
|
| 47,777,127 |
|
|
| (4,953,176 | ) |
FINANCING ACTIVITIES: |
|
|
|
|
|
| ||
Debt issuance costs |
|
| (997,464 | ) |
|
| (1,342 | ) |
Private placement |
|
| 4,019,598 |
|
|
| — |
|
Stock repurchase program |
|
| (1,826,545 | ) |
|
| (862,871 | ) |
Distributions to stockholders |
|
| (14,129,314 | ) |
|
| (7,939,040 | ) |
Repurchase of 6.125% Notes Due 2022 |
|
| (76,725,975 | ) |
|
| (513,383 | ) |
Repayment of 2018-2 Secured Notes |
|
| (88,000,000 | ) |
|
| — |
|
Repayment of 6.125% Notes from HCAP acquisition |
|
| (28,750,000 | ) |
|
| — |
|
Issuance of 4.875% Notes Due 2026 |
|
| 105,570,000 |
|
|
| — |
|
Borrowings from Revolving Credit Facilities |
|
| 19,750,000 |
|
|
| 47,250,000 |
|
Repayment of Revolving Credit Facilities |
|
| — |
|
|
| (32,500,000 | ) |
Net cash provided by financing activities |
|
| (81,089,700 | ) |
|
| 5,433,364 |
|
CHANGE IN CASH AND RESTRICTED CASH |
|
| (33,312,573 | ) |
|
| 480,189 |
|
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
| 82,903,419 |
|
|
| 5,104,355 |
|
CASH AND RESTRICTED CASH, END OF PERIOD |
| $ | 49,590,846 |
|
| $ | 5,584,544 |
|
Amounts per balance sheet: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 28,539,989 |
|
| $ | 677,438 |
|
Restricted cash |
|
| 21,050,857 |
|
|
| 4,907,105 |
|
Total Cash and Restricted cash |
| $ | 49,590,846 |
|
| $ | 5,584,543 |
|
Supplemental Information: |
|
|
|
|
|
| ||
Interest paid during the period |
| $ | 7,330,908 |
|
| $ | 5,663,812 |
|
Dividends paid during the period under the dividend reinvestment plan |
| $ | 443,778 |
|
| $ | 104,238 |
|
Supplemental non-cash information: |
|
|
|
|
|
| ||
Acquisitions: |
|
|
|
|
|
| ||
Non-cash assets acquired |
|
|
|
|
|
| ||
Investments, at cost |
| $ | 53,811,838 |
|
| $ | — |
|
Interest receivable |
|
| 431,454 |
|
|
| - |
|
Other assets |
|
| 2,664,932 |
|
|
| - |
|
Total non-cash assets purchased |
| $ | 56,908,224 |
|
| $ | — |
|
Liabilities assumed |
|
|
|
|
|
| ||
Debt |
| $ | 28,750,000 |
|
| $ | — |
|
Accounts payable and accrued expenses |
|
| 1,644,600 |
|
|
| - |
|
Total liabilities assumed |
| $ | 30,394,600 |
|
| $ | — |
|
Issuance of common stock |
|
| 37,063,461 |
|
| $ | — |
|
Deemed capital contribution from affiliates |
| $ | 2,150,000 |
|
| $ | — |
|
Transaction costs |
|
| 881,226 |
|
| $ | — |
|
(Unaudited)
|
| For the Nine Months Ended September 30, | |||||||
|
| 2022 |
|
| 2021 |
|
| ||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
| ||
Net increase (decrease) in net assets resulting from operations |
| $ | (8,580 | ) |
| $ | 28,026 |
|
|
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by in operations: |
|
|
|
|
|
|
| ||
Net realized (gains) losses on investment transactions |
|
| 28,631 |
|
|
| 11,373 |
|
|
Net change in unrealized (appreciation) depreciation from investments |
|
| 712 |
|
|
| (7,593 | ) |
|
Purchases of investments |
|
| (180,299 | ) |
|
| (215,216 | ) |
|
Proceeds from sales and redemptions of investments |
|
| 140,390 |
|
|
| 219,760 |
|
|
Net accretion of investments |
|
| (8,595 | ) |
|
| (25,673 | ) |
|
Amortization of debt issuance costs |
|
| 915 |
|
|
| 729 |
|
|
Realized (gains) losses on extinguishments of debt |
|
| - |
|
|
| 1,835 |
|
|
Net payment-in-kind income |
|
| (4,413 | ) |
|
| (2,430 | ) |
|
Cash consideration net of cash acquired from mergers |
|
| - |
|
|
| 13,581 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
| ||
(Increase) decrease in receivable for unsettled trades |
|
| 7,943 |
|
|
| 18,037 |
|
|
(Increase) decrease in interest and dividends receivable |
|
| 2,348 |
|
|
| (1,256 | ) |
|
(Increase) decrease in due from affiliates |
|
| (84 | ) |
|
| (107 | ) |
|
(Increase) decrease in other assets |
|
| 446 |
|
|
| (2,417 | ) |
|
Increase (decrease) in payable for unsettled trades |
|
| (5,397 | ) |
|
| 4,903 |
|
|
Increase (decrease) in accrued interest payable |
|
| 2,310 |
|
|
| 2,256 |
|
|
Increase (decrease) in management and incentive fees payable |
|
| (680 | ) |
|
| 411 |
|
|
Increase (decrease) in due to affiliates |
|
| (538 | ) |
|
| (615 | ) |
|
Increase (decrease) in accounts payable and accrued expenses |
|
| (130 | ) |
|
| 2,173 |
|
|
Net cash (used in) provided by operating activities |
| $ | (25,021 | ) |
| $ | 47,777 |
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
| ||
Debt issuance costs |
| $ | (805 | ) |
| $ | (997 | ) |
|
Private placement and other |
|
| 379 |
|
|
| 4,020 |
|
|
Stock repurchase program |
|
| (3,004 | ) |
|
| (1,827 | ) |
|
Distributions to stockholders |
|
| (17,335 | ) |
|
| (14,129 | ) |
|
Repurchase of 6.125% Notes Due 2022 |
|
| - |
|
|
| (76,726 | ) |
|
Repayment of 2018-2 Secured Notes |
|
| - |
|
|
| (88,000 | ) |
|
Repurchase of 6.125% Notes from HCAP acquisition |
|
| - |
|
|
| (28,750 | ) |
|
Issuance of 4.875% Notes Due 2026 |
|
| - |
|
|
| 105,570 |
|
|
Borrowings from Revolving Credit Facilities |
|
| 16,500 |
|
|
| 19,750 |
|
|
Net cash (used in) provided by financing activities |
| $ | (4,265 | ) |
| $ | (81,089 | ) |
|
CHANGE IN CASH AND RESTRICTED CASH |
| $ | (29,286 | ) |
| $ | (33,313 | ) |
|
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
| 68,340 |
|
|
| 82,903 |
|
|
CASH AND RESTRICTED CASH, END OF PERIOD |
| $ | 39,054 |
|
| $ | 49,591 |
|
|
Amounts per balance sheet: |
|
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 16,871 |
|
| $ | 28,540 |
|
|
Restricted cash |
|
| 22,183 |
|
|
| 21,051 |
|
|
Total Cash and Restricted cash |
| $ | 39,054 |
|
| $ | 49,591 |
|
|
Supplemental Information and non-cash activities: |
|
|
|
|
|
|
| ||
Cash paid for interest during the period |
| $ | 1,448 |
|
| $ | 7,331 |
|
|
Reinvestment of distributions |
| $ | 888 |
|
| $ | 444 |
|
|
See accompanying notes to unaudited consolidated financial statements.
7
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS
As of September 30, 20212022
(unaudited)(in thousands, except share and per share amounts)
(Unaudited)
Debt Securities Portfolio
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
1A Smart Start LLC | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
| $ | 2,079,053 |
|
| $ | 1,852,203 |
|
| $ | 2,085,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accordion Partners LLC | (8)(13)(14)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 9/24/2021 |
|
| - |
|
|
| (21,000 | ) |
|
| (21,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accordion Partners LLC | (8)(13)(23) | Senior Secured Loan — Revolver |
| 9/24/2021 |
|
| - |
|
|
| (75,000 | ) |
|
| (75,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accordion Partners LLC | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 9/24/2021 |
|
| 11,200,000 |
|
|
| 11,032,537 |
|
|
| 11,032,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Advantage Capital Holdings LLC | (8)(13)(14)(21) | Senior Secured Loan — Delayed Draw Term Loan |
| 2/14/2020 |
|
| 2,968,560 |
|
|
| 2,968,560 |
|
|
| 2,968,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Advantage Capital Holdings LLC | (8)(13)(14)(21) | Senior Secured Loan — Term Loan |
| 2/14/2020 |
|
| 2,622,599 |
|
|
| 2,622,599 |
|
|
| 2,622,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AIS Holdco, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan A |
| 10/28/2020 |
|
| 2,511,300 |
|
|
| 2,094,296 |
|
|
| 2,446,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AMCP Pet Holdings, Inc. | (8)(13)(14)(21)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 12/9/2020 |
|
| - |
|
|
| (17,275 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AMCP Pet Holdings, Inc. | (8)(13)(21)(23) | Senior Secured Loan — Revolving Loan |
| 12/9/2020 |
|
| 475,000 |
|
|
| 457,619 |
|
|
| 475,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AMCP Pet Holdings, Inc. | (8)(13)(14)(21) | Senior Secured Loan — First Lien Term Loan |
| 12/9/2020 |
|
| 4,962,500 |
|
|
| 4,876,779 |
|
|
| 4,962,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Analogic Corporation | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| - |
|
|
| - |
|
|
| (7,098 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Analogic Corporation | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan A |
| 10/28/2020 |
|
| 3,528,873 |
|
|
| 3,176,599 |
|
|
| 3,405,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ancile Solutions, Inc. | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 6/11/2021 |
|
| 7,011,083 |
|
|
| 6,815,187 |
|
|
| 6,835,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 3/31/2021 |
|
| 812,912 |
|
|
| 724,261 |
|
|
| 786,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(21)(23) | Senior Secured Loan — Revolving Loan |
| 9/9/2019 |
|
| 208,333 |
|
|
| 183,812 |
|
|
| 173,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(14)(21) | Senior Secured Loan — Term Loan |
| 9/9/2019 |
|
| 3,112,292 |
|
|
| 3,044,915 |
|
|
| 3,012,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AP Core Holdings II, LLC | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 7/21/2021 |
|
| 4,000,000 |
|
|
| 3,940,477 |
|
|
| 4,023,340 |
|
Portfolio Company14 | Investment | Industry | Interest Rate | Reference Rate and Spread1 | Floor | Maturity | Initial Acquisition Date | Par/Shares |
| Cost |
| Fair Value2 |
| Footnote Refs | |||
Senior Secured Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Accordion Partners LLC | Term Loan | Finance | 9.8% Cash | SOFR+6.25% | 0.75% | 8/29/29 | 8/31/22 |
| 7,988 |
| $ | 7,811 |
| $ | 7,809 |
| (7)(12)(13) |
Accordion Partners LLC | Revolver | Finance | 1.0% Cash |
|
| 8/31/28 | 8/31/22 |
| - |
|
| (34 | ) |
| (34 | ) | (7)(12)(20) |
Accordion Partners LLC | Delayed Draw Term Loan | Finance | 1.0% Cash |
|
| 8/29/29 | 8/31/22 |
| - |
|
| (8 | ) |
| (8 | ) | (7)(12)(13)(20) |
Accordion Partners LLC | Delayed Draw Term Loan | Finance | 1.0% Cash |
|
| 8/29/29 | 8/31/22 |
| - |
|
| (10 | ) |
| (10 | ) | (7)(12)(13)(20) |
Accurate Background, LLC | Term Loan | Services: Business | 9.7% Cash | L+6.00% | 1.00% | 3/26/27 | 10/20/21 |
| 2,970 |
|
| 2,743 |
|
| 2,828 |
| (7)(12)(13) |
Accurate Background, LLC | First Lien Term Loan | Services: Business | 9.7% Cash | L+6.00% | 1.00% | 3/26/27 | 9/7/22 |
| 1,500 |
|
| 1,374 |
|
| 1,429 |
| (7)(12)(13) |
Advantage Capital Holdings LLC | Term Loan | Banking, Finance, Insurance & Real Estate | 12.0% Cash |
|
| 4/14/27 | 4/14/22 |
| 13,347 |
|
| 13,347 |
|
| 12,864 |
| (7)(12)(13) |
AIDC IntermediateCo 2, LLC | First Lien Term Loan | Services: Business | 8.9% Cash | SOFR+6.40% | 1.00% | 7/22/27 | 9/9/22 |
| 1,000 |
|
| 983 |
|
| 983 |
| (7)(12)(13) |
AIS Holdco, LLC | First Lien Term Loan A | Banking, Finance, Insurance & Real Estate | 7.8% Cash | L+5.00% |
| 8/15/25 | 10/28/20 |
| 2,339 |
|
| 2,051 |
|
| 2,320 |
| (7)(12)(13) |
AMCP Pet Holdings, Inc. | First Lien Term Loan | Beverage, Food and Tobacco | 9.9% Cash | L+6.25% | 1.00% | 10/6/26 | 12/9/20 |
| 4,913 |
|
| 4,845 |
|
| 4,777 |
| (7)(12)(13) |
AMCP Pet Holdings, Inc. | Revolving Loan | Beverage, Food and Tobacco | 9.6% Cash | L+6.25% | 1.00% | 10/6/26 | 12/9/20 |
| 750 |
|
| 736 |
|
| 723 |
| (7)(12)(20) |
American Academy Holdings, LLC | First Lien Term Loan | Services: Consumer | 7.9% Cash + 6.3% PIK | L+4.75% | 1.00% | 1/1/25 | 3/1/22 |
| 2,963 |
|
| 2,940 |
|
| 2,904 |
| (7)(12)(13) |
American Academy Holdings, LLC | Term Loan Second Lien | Services: Consumer | 14.5% PIK |
|
| 3/1/28 | 3/1/22 |
| 4,944 |
|
| 4,821 |
|
| 4,085 |
| (7)(12) |
American Academy Holdings, LLC | Delayed Draw Term Loan | Services: Consumer | 7.8% Cash + 6.3% PIK | L+4.75% | 1.00% | 1/1/25 | 3/1/22 |
| 587 |
|
| 582 |
|
| 576 |
| (7)(12)(13) |
Analogic Corporation | First Lien Term Loan A | Electronics | 8.1% Cash | L+5.25% | 1.00% | 6/22/24 | 10/28/20 |
| 3,493 |
|
| 3,271 |
|
| 3,292 |
| (7)(12)(13) |
Analogic Corporation | Revolver | Electronics | 8.2% Cash | L+5.25% | 1.00% | 6/22/23 | 10/28/20 |
| 168 |
|
| 168 |
|
| 156 |
| (7)(12)(13)(20) |
Ancile Solutions, Inc. | First Lien Term Loan | High Tech Industries | 10.3% Cash + 3.0% PIK | L+7.00% | 1.00% | 6/11/26 | 6/11/21 |
| 6,684 |
|
| 6,541 |
|
| 6,674 |
| (7)(12)(13) |
Anthem Sports & Entertainment Inc. | Term Loan | Media: Broadcasting & Subscription | 13.2% Cash + 2.8% PIK | L+9.50% |
| 11/15/26 | 11/15/21 |
| 11,763 |
|
| 11,526 |
|
| 11,410 |
| (7)(12)(13) |
Anthem Sports & Entertainment Inc. | Revolver | Media: Broadcasting & Subscription | 14.0% Cash | L+9.50% | 1.00% | 11/15/26 | 11/15/21 |
| 1,000 |
|
| 978 |
|
| 967 |
| (7)(12)(20) |
Anthem Sports & Entertainment Inc. | Revolver | Media: Broadcasting & Subscription | 12.4% Cash | L+9.50% | 1.00% | 12/31/22 | 8/9/22 |
| 500 |
|
| 500 |
|
| 485 |
| (7)(12) |
AP Core Holdings II, LLC | First Lien Term Loan | Media: Diversified & Production | 8.6% Cash | L+5.50% | 0.75% | 7/21/27 | 7/21/21 |
| 3,135 |
|
| 3,103 |
|
| 3,095 |
| (7)(12)(13) |
AP Core Holdings II, LLC | First Lien Term Loan | Media: Diversified & Production | 8.6% Cash | L+5.50% | 0.75% | 7/21/27 | 7/21/21 |
| 2,000 |
|
| 1,975 |
|
| 1,980 |
| (7)(12)(13) |
Appfire Technologies, LLC | Delayed Draw Term Loan | High Tech Industries | 0.5% Cash |
|
| 3/9/27 | 10/1/21 |
| - |
|
| (5 | ) |
| (12 | ) | (7)(12)(13)(20) |
Appfire Technologies, LLC | Term Loan | High Tech Industries | 8.6% Cash | SOFR+5.50% | 1.00% | 3/9/27 | 12/20/21 |
| 4,304 |
|
| 4,296 |
|
| 4,274 |
| (7)(12)(13) |
Beta Plus Technologies, Inc. | First Lien Term Loan | Banking, Finance, Insurance & Real Estate | 7.8% Cash | SOFR+5.25% |
| 7/1/29 | 7/1/22 |
| 16,000 |
|
| 15,692 |
|
| 15,680 |
| (7)(12)(13) |
Beta Plus Technologies, Inc. | Revolver | Banking, Finance, Insurance & Real Estate | 0.4% Cash |
|
| 7/1/27 | 7/1/22 |
| - |
|
| - |
|
| - |
| (7)(12)(20) |
Bradshaw International Parent Corp. | Term Loan | Consumer goods: Durable | 8.9% Cash | L+5.75% | 1.00% | 10/21/27 | 10/29/21 |
| 502 |
|
| 491 |
|
| 466 |
| (7)(12)(13) |
Bradshaw International Parent Corp. | Revolver | Consumer goods: Durable | 8.7% Cash | L+5.75% | 1.00% | 10/21/26 | 10/29/21 |
| 384 |
|
| 361 |
|
| 317 |
| (7)(12)(20) |
Bristol Hospice | Unitranche | Healthcare & Pharmaceuticals | 8.9% Cash | L+5.75% | 1.00% | 12/22/26 | 12/22/20 |
| 2,145 |
|
| 2,115 |
|
| 2,099 |
| (7)(12)(13) |
Bristol Hospice | Delayed Draw Term Loan | Healthcare & Pharmaceuticals | 8.8% Cash | L+5.75% | 1.00% | 12/22/26 | 12/22/20 |
| 763 |
|
| 757 |
|
| 746 |
| (7)(12)(13)(20) |
C.P. Converters, Inc. | Seventh Amendment Acquisition Loan | Chemicals, Plastics and Rubber | 8.8% Cash | L+6.50% | 1.00% | 6/18/23 | 6/26/20 |
| 2,831 |
|
| 2,814 |
|
| 2,796 |
| (7)(12)(13) |
C.P. Converters, Inc. | Term Loan | Chemicals, Plastics and Rubber | 8.3% Cash | L+6.00% | 1.00% | 6/18/23 | 7/29/21 |
| 1,093 |
|
| 1,086 |
|
| 1,074 |
| (7)(12)(13) |
C.P. Converters, Inc. | Term Loan | Chemicals, Plastics and Rubber | 8.3% Cash | L+6.00% | 1.00% | 6/18/23 | 11/17/21 |
| 6,625 |
|
| 6,595 |
|
| 6,509 |
| (7)(12)(13) |
CB Midco, LLC | Term Loan | Consumer goods: Durable | 9.4% Cash | L+5.75% | 1.00% | 9/27/27 | 10/8/21 |
| 3,960 |
|
| 3,927 |
|
| 3,714 |
| (7)(12)(13) |
Cenexel Clinical Research, Inc. | Term Loan | Healthcare & Pharmaceuticals | 9.7% Cash | SOFR+6.50% | 1.00% | 11/8/25 | 6/15/22 |
| 6,922 |
|
| 6,859 |
|
| 6,853 |
| (7)(12)(13) |
Centric Brands Inc. | Revolver | Machinery (Non-Agrclt/Constr/Electr) | 8.6% Cash | SOFR+5.75% | 1.00% | 10/9/24 | 10/28/20 |
| 960 |
|
| 923 |
|
| 960 |
| (7)(12)(13)(20) |
Centric Brands Inc. | Term Loan | Machinery (Non-Agrclt/Constr/Electr) | 5.3% Cash + 6.5% PIK | SOFR+2.50% |
| 10/9/25 | 10/28/20 |
| 9,650 |
|
| 8,564 |
|
| 8,716 |
| (7)(12)(13) |
Centric Brands Inc. | Revolver | Machinery (Non-Agrclt/Constr/Electr) | 8.6% Cash | SOFR+5.75% |
| 10/9/24 | 8/22/22 |
| 39 |
|
| 37 |
|
| 39 |
| (7)(12)(13)(20) |
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
AP Core Holdings II, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 7/21/2021 |
|
| 4,000,000 |
|
|
| 3,940,589 |
|
|
| 3,940,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Appfire Technologies, LLC | (8)(13)(14)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 7/7/2021 |
|
| - |
|
|
| (43,131 | ) |
|
| (45,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Athos Merger Sub LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 1,319,019 |
|
|
| 1,158,907 |
|
|
| 1,319,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Back Porch International, Inc. | (8)(13)(24) | Senior Secured Loan — First Lien Term Loan |
| 6/9/2021 |
|
| 5,593,090 |
|
|
| 5,225,707 |
|
|
| 5,593,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
BJ Services, LLC | (8)(13)(14) | Senior Secured Loan — First Out Term Loan |
| 10/28/2020 |
|
| 1,384,155 |
|
|
| 1,369,016 |
|
|
| 1,384,155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
BMC Acquisition, Inc. | (8)(14) | Senior Secured Loan — Initial Term Loan |
| 1/2/2018 |
|
| 2,691,522 |
|
|
| 2,690,784 |
|
|
| 2,684,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Bristol Hospice | (8)(13)(14)(21)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 12/22/2020 |
|
| - |
|
|
| (7,158 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Bristol Hospice | (8)(13)(14)(21) | Senior Secured Loan — Unitranche |
| 12/22/2020 |
|
| 2,161,747 |
|
|
| 2,124,095 |
|
|
| 2,161,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
C.P. Converters, Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 7/29/2021 |
|
| 1,120,738 |
|
|
| 1,104,985 |
|
|
| 1,103,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
C.P. Converters, Inc. | (8)(13)(14) | Senior Secured Loan — Seventh Amendment Acquisition Loan |
| 6/26/2020 |
|
| 2,906,250 |
|
|
| 2,864,474 |
|
|
| 2,906,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Carestream Health, Inc. | (8)(14) | Junior Secured Loan — 2023 Extended Term Loan (Second Lien) |
| 5/8/2020 |
|
| 1,730,386 |
|
|
| 1,605,794 |
|
|
| 1,702,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Centric Brands Inc. | (8)(13)(14)(20) | Senior Secured Loan — Term Loan |
| 10/28/2020 |
|
| 8,617,896 |
|
|
| 7,173,780 |
|
|
| 7,950,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Centric Brands Inc. | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| 761,825 |
|
|
| 706,344 |
|
|
| 761,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Child Development Schools, Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 6/6/2018 |
|
| 3,840,200 |
|
|
| 3,837,036 |
|
|
| 3,840,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Circustrix Holdings, LLC | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 1/29/2021 |
|
| 579,154 |
|
|
| 579,154 |
|
|
| 579,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Circustrix Holdings, LLC | (8)(13)(14) | Senior Secured Loan — Delayed Draw Term Loan |
| 1/11/2021 |
|
| 575,128 |
|
|
| 575,128 |
|
|
| 575,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Circustrix Holdings, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan B |
| 10/28/2020 |
|
| 6,610,307 |
|
|
| 4,773,389 |
|
|
| 5,677,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Coastal Screen and Rail, LLC | (8)(13)(24) | Senior Secured Loan — First Lien Term Loan |
| 6/9/2021 |
|
| 1,750,000 |
|
|
| 1,646,662 |
|
|
| 1,750,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Confluence Technologies, Inc. | (8)(13) | Junior Secured Loan — Term Loan Second Lien |
| 7/22/2021 |
|
| 2,000,000 |
|
|
| 1,980,385 |
|
|
| 1,980,000 |
|
See accompanying notes to unaudited consolidated financial statements.
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
Convergeone Holdings Corp. | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 2,151,476 |
|
|
| 1,790,719 |
|
|
| 2,145,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Datalink, LLC | (8)(13)(23) | Senior Secured Loan — Delayed Draw Term Loan (First Lien) |
| 11/23/2020 |
|
| - |
|
|
| (12,381 | ) |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Datalink, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 11/23/2020 |
|
| 2,863,438 |
|
|
| 2,795,657 |
|
|
| 2,863,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
DCert Buyer, Inc. | (8)(13)(14) | Junior Secured Loan — Term Loan (Second Lien) |
| 3/16/2021 |
|
| 5,400,000 |
|
|
| 5,387,016 |
|
|
| 5,445,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Deliver Buyer, Inc. | (8)(13)(14) | Senior Secured Loan — Incremental Term Loan (First Lien) |
| 7/1/2020 |
|
| 4,731,902 |
|
|
| 4,680,990 |
|
|
| 4,731,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) | (13) | Senior Secured Loan — EUR Term Loan A |
| 5/11/2020 |
|
| 261,136 |
|
|
| 307,187 |
|
|
| 256,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Drilling Info Holdings, Inc. | (8)(13)(14)(21) | Senior Secured Loan — Initial Term Loan (First Lien) |
| 6/27/2019 |
|
| 824,363 |
|
|
| 824,363 |
|
|
| 816,614 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Drilling Info Holdings, Inc. | (8)(13)(14)(21) | Senior Secured Loan — 2020 Term Loan (First Lien) |
| 2/14/2020 |
|
| 985,000 |
|
|
| 981,546 |
|
|
| 983,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Electronics for Imaging, Inc. | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 2,165,206 |
|
|
| 1,699,195 |
|
|
| 2,049,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
ELO Touch Solutions, Inc. | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 2,483,213 |
|
|
| 2,168,264 |
|
|
| 2,491,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Energy Acquisition LP | (14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 4,784,289 |
|
|
| 4,012,166 |
|
|
| 4,756,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Firstlight Holdco Inc. | (8)(13)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 12/18/2019 |
|
| 400,000 |
|
|
| 367,113 |
|
|
| 400,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Geo Parent Corporation | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 3,264,896 |
|
|
| 2,877,635 |
|
|
| 3,264,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Global Integrated Flooring Systems Inc. | (8)(13)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| - |
|
|
| - |
|
|
| (19,149 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Global Integrated Flooring Systems Inc. | (8)(13) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 6,300,000 |
|
|
| 4,835,288 |
|
|
| 3,485,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Global Tel*Link Corporation | (8)(14) | Junior Secured Loan — Term Loan (Second Lien) |
| 5/21/2013 |
|
| 1,500,000 |
|
|
| 1,483,417 |
|
|
| 1,406,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Grupo HIMA San Pablo, Inc. | (5)(8)(13) | Junior Secured Loan — Term Loan (Second Lien) |
| 1/30/2013 |
|
| 7,191,667 |
|
|
| 7,191,667 |
|
|
| 48,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Grupo HIMA San Pablo, Inc. | (5)(8)(13)(14) | Senior Secured Loan — Term B Loan (First Lien) |
| 1/30/2013 |
|
| 2,702,232 |
|
|
| 2,702,232 |
|
|
| 1,357,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
H.W. Lochner, Inc. | (8)(13)(23) | Senior Secured Loan — Revolver |
| 7/2/2021 |
|
| 6,200,524 |
|
|
| 6,047,170 |
|
|
| 6,040,524 |
|
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
H.W. Lochner, Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 7/2/2021 |
|
| 15,000,000 |
|
|
| 14,712,460 |
|
|
| 14,700,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
H-CA II, LLC | (8)(13) | Senior Secured Loan — Term Loan |
| 2/16/2021 |
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
| 2,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
HDC/HW Intermediate Holdings, LLC | (8)(13)(14) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| 669,722 |
|
|
| 588,967 |
|
|
| 593,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
HDC/HW Intermediate Holdings, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan A |
| 10/28/2020 |
|
| 6,546,535 |
|
|
| 5,757,168 |
|
|
| 5,806,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Helix Acquisition Holdings, Inc. | (8)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 12/18/2019 |
|
| 1,400,000 |
|
|
| 1,247,689 |
|
|
| 1,360,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Hoffmaster Group, Inc. | (8)(13)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 5/6/2014 |
|
| 1,600,000 |
|
|
| 1,581,127 |
|
|
| 1,358,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Idera, Inc. | (8)(13)(14) | Junior Secured Loan — Term Loan (Second Lien) |
| 4/29/2021 |
|
| 6,000,000 |
|
|
| 5,942,874 |
|
|
| 6,048,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Infobase Holdings, Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 12/13/2017 |
|
| 1,812,500 |
|
|
| 1,807,555 |
|
|
| 1,812,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Infobase Holdings, Inc. | (8)(13)(14) | Senior Secured Loan — Term Loan (add on) |
| 12/13/2017 |
|
| 1,921,615 |
|
|
| 1,916,372 |
|
|
| 1,921,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Intermedia Holdings, Inc. | (8)(14) | Senior Secured Loan — First Lien Term Loan B |
| 10/28/2020 |
|
| 2,674,810 |
|
|
| 2,387,684 |
|
|
| 2,676,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Keeco, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan A |
| 10/28/2020 |
|
| 5,442,260 |
|
|
| 4,560,968 |
|
|
| 5,261,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Lifescan Global Corporation | (8)(14) | Senior Secured Loan — First Lien Term Loan A |
| 10/28/2020 |
|
| 3,036,157 |
|
|
| 2,615,697 |
|
|
| 3,014,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Location Services Holdings, LLC | (8)(13)(14)(21)(23) | Senior Secured Loan — Revolving Credit |
| 11/7/2019 |
|
| 2,291,667 |
|
|
| 2,290,205 |
|
|
| 2,287,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Lucky Bucks, LLC | (8)(13)(14) | Senior Secured Loan — Term Loan |
| 7/20/2021 |
|
| 10,000,000 |
|
|
| 9,804,159 |
|
|
| 9,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Luminii LLC | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| 343,473 |
|
|
| 314,418 |
|
|
| 339,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Luminii LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan B |
| 10/28/2020 |
|
| 7,080,442 |
|
|
| 6,481,519 |
|
|
| 7,020,966 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Mag Ds Corp. | (8)(13)(14)(21) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 3,891,201 |
|
|
| 3,322,235 |
|
|
| 3,700,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Marble Point Credit Management LLC | (13)(23) | Senior Secured Loan — Revolver |
| 8/11/2021 |
|
| - |
|
|
| (25,000 | ) |
|
| (25,000 | ) |
8
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
Marble Point Credit Management LLC | (13)(14) | Senior Secured Loan — Term Loan |
| 8/11/2021 |
|
| 5,875,625 |
|
|
| 5,717,268 |
|
|
| 5,714,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Maxor National Pharmacy Services, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 8,098,134 |
|
|
| 7,328,791 |
|
|
| 8,098,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Maxor National Pharmacy Services, LLC | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ministry Brands, LLC | (8)(13)(14) | Junior Secured Loan — April 2018 Incremental Term Loan (Second Lien) |
| 12/18/2019 |
|
| 6,000,000 |
|
|
| 5,692,827 |
|
|
| 5,895,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Mother's Market & Kitchen, Inc. | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 6,537,592 |
|
|
| 5,949,051 |
|
|
| 6,537,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
MSM Acquisitions, Inc. | (8)(13)(14) | Senior Secured Loan — Delayed Draw Term Loan (First Lien) |
| 12/31/2020 |
|
| 2,922,750 |
|
|
| 2,926,243 |
|
|
| 2,920,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
MSM Acquisitions, Inc. | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 12/31/2020 |
|
| 7,005,971 |
|
|
| 6,929,459 |
|
|
| 6,999,665 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Nasco Healthcare Inc. | (8)(13)(14)(21) | Senior Secured Loan — Term Loan |
| 5/22/2020 |
|
| 4,276,086 |
|
|
| 3,811,036 |
|
|
| 4,198,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Navex Topco, Inc. | (8)(14)(18)(21) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 12/4/2018 |
|
| 7,700,000 |
|
|
| 7,285,597 |
|
|
| 7,552,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Naviga Inc. | (8)(13)(14) | Senior Secured Loan — Delayed Draw Term Loan |
| 10/28/2020 |
|
| 458,407 |
|
|
| 420,971 |
|
|
| 450,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Naviga Inc. | (8)(13) | Senior Secured Loan — Delayed Draw Term Loan |
| 3/1/2021 |
|
| 757,552 |
|
|
| 751,116 |
|
|
| 744,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Naviga Inc. | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| 383,812 |
|
|
| 327,841 |
|
|
| 371,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Naviga Inc. | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 5,012,532 |
|
|
| 4,603,954 |
|
|
| 4,924,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Naviga Inc. | (8)(13) | Senior Secured Loan — Term Loan |
| 3/1/2021 |
|
| 713,686 |
|
|
| 701,560 |
|
|
| 701,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Northeast Metal Works LLC | (8)(13)(18) | Senior Secured Loan — First Lien Term Loan |
| 6/9/2021 |
|
| 14,002,644 |
|
|
| 11,882,240 |
|
|
| 12,322,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
One Stop Mailing LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 5/7/2021 |
|
| 7,957,143 |
|
|
| 7,808,033 |
|
|
| 7,848,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Orbit Purchaser LLC | (8)(13)(14) | Senior Secured Loan — Incremental First Lien Term Loan |
| 10/28/2020 |
|
| 1,528,115 |
|
|
| 1,368,698 |
|
|
| 1,528,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Orbit Purchaser LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 2,528,621 |
|
|
| 2,260,683 |
|
|
| 2,528,621 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Orbit Purchaser LLC | (8)(13)(14) | Senior Secured Loan — Delayed Draw Term Loan |
| 10/28/2020 |
|
| 739,410 |
|
|
| 662,273 |
|
|
| 739,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Phoenix Guarantor Inc. | (8)(13)(14) | Junior Secured Loan — Term Loan Second Lien |
| 12/18/2019 |
|
| 1,200,000 |
|
|
| 1,112,322 |
|
|
| 1,200,000 |
|
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
Pinstripe Holdings, LLC | (8)(13)(14) | Senior Secured Loan — Initial Term Loan |
| 1/17/2019 |
|
| 4,874,889 |
|
|
| 4,821,046 |
|
|
| 4,838,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Pomeroy Technologies, LLC | (8)(13) | Senior Secured Loan — Senior Term Loan A |
| 5/29/2020 |
|
| 1,523,855 |
|
|
| 1,197,731 |
|
|
| 1,165,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Pomeroy Technologies, LLC | (5)(8)(13) | Senior Secured Loan — Senior Term Loan B |
| 5/29/2020 |
|
| 1,565,210 |
|
|
| 1,239,086 |
|
|
| 422,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Pomeroy Technologies, LLC | (8)(13) | Senior Secured Loan — Super Senior Term Loan B |
| 5/29/2020 |
|
| 1,029,908 |
|
|
| 1,016,445 |
|
|
| 988,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Pomeroy Technologies, LLC | (8)(13) | Senior Secured Loan — Term Loan |
| 9/10/2021 |
|
| 48,172 |
|
|
| 47,693 |
|
|
| 47,692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Priority Holdings, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 4/21/2021 |
|
| 7,761,339 |
|
|
| 7,686,688 |
|
|
| 7,714,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
ProAir Holdings Corporation | (5)(8)(13) | Junior Secured Loan — Term Loan (Second Lien) |
| 6/9/2021 |
|
| 7,816,516 |
|
|
| 3,662,041 |
|
|
| 3,107,065 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
PSC Industrial Holdings Corp. | (8)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 10/5/2017 |
|
| 3,000,000 |
|
|
| 2,968,707 |
|
|
| 3,002,505 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
PVHC Holding Corp | (8)(13)(14) | Senior Secured Loan — Initial Term Loan |
| 8/10/2018 |
|
| 2,793,600 |
|
|
| 2,786,954 |
|
|
| 2,591,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Q Holding Company (fka Lex Precision Corp) | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 2,360,936 |
|
|
| 2,017,093 |
|
|
| 2,308,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Qualtek USA, LLC | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 5,547,901 |
|
|
| 4,604,277 |
|
|
| 5,497,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Radiology Partners, Inc | (8)(14)(21) | Senior Secured Loan — Term B Loan (First Lien) |
| 3/24/2020 |
|
| 7,000,000 |
|
|
| 6,023,245 |
|
|
| 7,003,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Radius Aerospace, Inc. | (8)(13)(14) | Senior Secured Loan — Initial Term Loan |
| 6/27/2019 |
|
| 6,576,000 |
|
|
| 6,516,056 |
|
|
| 6,241,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Redstone Holdco 2, LP | (8)(14) | Junior Secured Loan — Term Loan (Second Lien) |
| 4/16/2021 |
|
| 4,565,747 |
|
|
| 4,489,801 |
|
|
| 4,463,018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ritedose Holdings I, Inc. | (8)(13)(14)(23) | Senior Secured Loan — Revolver |
| 10/28/2020 |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ritedose Holdings I, Inc. | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 6,782,729 |
|
|
| 6,157,593 |
|
|
| 6,782,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Robertshaw US Holding Corp. | (8)(13) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 2/15/2018 |
|
| 3,000,000 |
|
|
| 2,983,427 |
|
|
| 2,617,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Roscoe Medical, Inc. | (8)(13) | Junior Secured Loan — Term Loan (Second Lien) |
| 3/26/2014 |
|
| 8,201,777 |
|
|
| 8,199,020 |
|
|
| 7,955,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Safe Fleet Holdings LLC | (8)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 12/18/2019 |
|
| 700,000 |
|
|
| 635,218 |
|
|
| 692,419 |
|
Portfolio Company14 | Investment | Industry | Interest Rate | Reference Rate and Spread1 | Floor | Maturity | Initial Acquisition Date | Par/Shares |
| Cost |
| Fair Value2 |
| Footnote Refs | |||
Circustrix Holdings, LLC | Term Loan | Banking, Finance, Insurance & Real Estate | 8.6% Cash | L+5.50% | 1.00% | 7/16/23 | 1/11/21 |
| 466 |
| $ | 466 |
| $ | 466 |
| (7)(12)(13) |
Circustrix Holdings, LLC | Delayed Draw Term Loan | Banking, Finance, Insurance & Real Estate | 8.6% Cash | L+5.50% | 1.00% | 7/16/23 | 1/11/21 |
| 461 |
|
| 461 |
|
| 461 |
| (7)(12)(13)(20) |
Circustrix Holdings, LLC | Term Loan | Banking, Finance, Insurance & Real Estate | 8.6% Cash | L+5.50% | 1.00% | 1/26/24 | 10/1/21 |
| 6,670 |
|
| 6,003 |
|
| 6,458 |
| (7)(12)(13) |
Coastal Screen and Rail, LLC | Term Loan | Construction & Building | 13.0% Cash |
|
| 12/31/22 | 6/9/21 |
| 1,450 |
|
| 1,450 |
|
| 1,443 |
| (7)(12) |
Critical Nurse Staffing, LLC | Term Loan | Healthcare & Pharmaceuticals | 8.8% Cash | L+6.00% | 1.00% | 11/1/26 | 11/1/21 |
| 8,186 |
|
| 8,069 |
|
| 8,069 |
| (7)(12)(13) |
Critical Nurse Staffing, LLC | Revolver | Healthcare & Pharmaceuticals | 0.5% Cash |
|
| 11/1/26 | 11/1/21 |
| - |
|
| (35 | ) |
| (28 | ) | (7)(12)(20) |
Critical Nurse Staffing, LLC | Delayed Draw Term Loan | Healthcare & Pharmaceuticals | 9.0% Cash | L+6.00% | 1.00% | 11/1/26 | 11/1/21 |
| 633 |
|
| 600 |
|
| 580 |
| (7)(12)(13)(20) |
Datalink, LLC | First Lien Term Loan | Healthcare & Pharmaceuticals | 10.4% Cash | L+6.75% | 1.00% | 11/23/26 | 12/8/20 |
| 2,752 |
|
| 2,699 |
|
| 2,676 |
| (7)(12)(13) |
Dodge Data & Analytics LLC | Term Loan | Construction & Building | 7.6% Cash | SOFR+4.75% | 0.50% | 2/10/29 | 2/10/22 |
| 1,496 |
|
| 1,476 |
|
| 1,439 |
| (7)(12)(13) |
Drilling Info Holdings, Inc. | Initial Term Loan (First Lien) | High Tech Industries | 7.4% Cash | L+4.25% |
| 7/30/25 | 12/23/19 |
| 816 |
|
| 816 |
|
| 789 |
| (7)(13) |
Drilling Info Holdings, Inc. | 2020 Term Loan (First Lien) | High Tech Industries | 7.6% Cash | L+4.50% |
| 7/30/25 | 2/13/20 |
| 975 |
|
| 972 |
|
| 973 |
| (7)(12)(13) |
ELO Touch Solutions, Inc. | First Lien Term Loan | High Tech Industries | 10.2% Cash | L+6.50% |
| 12/14/25 | 10/28/20 |
| 2,266 |
|
| 2,047 |
|
| 2,210 |
| (7)(13) |
Florida Food Products, LLC | First Lien Term Loan | Beverage, Food and Tobacco | 8.1% Cash | L+5.00% | 0.75% | 10/6/28 | 3/22/22 |
| 4,975 |
|
| 4,917 |
|
| 4,805 |
| (7)(12)(13) |
Florida Food Products, LLC | First Lein Term Loan | Beverage, Food and Tobacco | 8.0% Cash | SOFR+5.00% | 0.75% | 10/18/28 | 6/9/22 |
| 2,000 |
|
| 1,883 |
|
| 1,932 |
| (7)(12)(13) |
Franchise Group, Inc. | First Out Term Loan | Retail | 7.6% Cash | L+4.75% | 0.75% | 2/25/26 | 3/18/22 |
| 4,900 |
|
| 4,873 |
|
| 4,596 |
| (13) |
Global Integrated Flooring Systems Inc. | First Lien Term Loan | Consumer goods: Durable | 10.5% Cash | L+8.25% | 1.25% | 2/15/23 | 10/28/20 |
| 6,188 |
|
| 5,795 |
|
| 2,969 |
| (7)(12) |
Global Integrated Flooring Systems Inc. | Revolver | Consumer goods: Durable | 11.3% Cash | L+8.25% | 1.25% | 2/15/23 | 10/28/20 |
| 18 |
|
| 18 |
|
| (4 | ) | (7)(12)(20) |
Grindr Capital LLC | Term Loan | Telecommunications | 11.7% Cash | L+8.00% | 1.50% | 6/10/25 | 6/10/20 |
| 3,093 |
|
| 3,063 |
|
| 3,147 |
| (7)(12)(13) |
H.W. Lochner, Inc. | Term Loan | Services: Business | 8.0% Cash | L+5.75% | 1.00% | 7/2/27 | 7/2/21 |
| 14,850 |
|
| 14,627 |
|
| 14,701 |
| (7)(12)(13) |
H.W. Lochner, Inc. | Revolver | Services: Business | 8.4% Cash | L+5.75% | 1.00% | 7/2/27 | 7/2/21 |
| 6,201 |
|
| 6,074 |
|
| 6,121 |
| (7)(12)(20) |
H-CA II, LLC | Term Loan | Banking, Finance, Insurance & Real Estate | 19.0% Cash |
|
| 2/16/24 | 2/16/21 |
| 2,000 |
|
| 2,000 |
|
| 1,928 |
| (7)(12) |
HDC/HW Intermediate Holdings, LLC | First Lien Term Loan A | High Tech Industries | 7.6% Cash + 5.8% PIK | SOFR+3.75% | 1.00% | 12/21/23 | 10/28/20 |
| 6,676 |
|
| 6,243 |
|
| 5,190 |
| (7)(12)(13) |
HDC/HW Intermediate Holdings, LLC | Revolver | High Tech Industries | 7.6% Cash + 5.8% PIK | SOFR+3.75% | 1.00% | 12/21/23 | 10/28/20 |
| 686 |
|
| 641 |
|
| 533 |
| (7)(12)(13) |
Hollander Intermediate LLC | First Lien Term Loan | Consumer goods: Durable | 11.9% Cash | SOFR+8.75% | 2.00% | 9/19/26 | 9/19/22 |
| 5,745 |
|
| 5,587 |
|
| 5,587 |
| (7)(12)(13) |
Intermedia Holdings, Inc. | First Lien Term Loan B | High Tech Industries | 9.1% Cash | L+6.00% | 1.00% | 7/21/25 | 10/28/20 |
| 2,647 |
|
| 2,438 |
|
| 2,323 |
| (7)(13) |
JO ET Holdings Limited | Term Loan | Telecommunications | 9.2% Cash + 7.0% PIK | SOFR+6.00% | 1.00% | 12/15/26 | 12/15/21 |
| 2,093 |
|
| 2,060 |
|
| 2,049 |
| (3)(12) |
Keg Logistics LLC | Term Loan | Services: Business | 9.0% Cash | L+6.00% | 1.00% | 11/23/27 | 11/23/21 |
| 12,152 |
|
| 11,996 |
|
| 11,804 |
| (7)(12)(13) |
Keg Logistics LLC | Revolver | Services: Business | 8.4% Cash | EURIBOR+6.00% | 1.00% | 11/23/27 | 11/23/21 |
| 872 |
|
| 859 |
|
| 847 |
| (7)(12) |
Lifescan Global Corporation | First Lien Term Loan A | Healthcare & Pharmaceuticals | 8.3% Cash | L+6.00% |
| 10/1/24 | 10/28/20 |
| 2,773 |
|
| 2,517 |
|
| 2,256 |
| (7)(13) |
Lucky Bucks Holdings LLC | Term Loan | Hotel, Gaming & Leisure | 12.5% PIK |
|
| 5/29/28 | 1/14/22 |
| 5,482 |
|
| 5,393 |
|
| 4,564 |
| (7)(12) |
Lucky Bucks, LLC | Term Loan | Hotel, Gaming & Leisure | 8.3% Cash | L+5.50% | 0.75% | 7/21/27 | 7/20/21 |
| 4,813 |
|
| 4,734 |
|
| 4,259 |
| (7)(12)(13) |
Luminii LLC | First Lien Term Loan B | Construction & Building | 8.5% Cash | L+6.25% | 1.00% | 4/11/23 | 10/28/20 |
| 7,008 |
|
| 6,804 |
|
| 6,911 |
| (7)(12)(13) |
Luminii LLC | Revolver | Construction & Building | 8.5% Cash | L+6.25% | 1.00% | 4/11/23 | 10/28/20 |
| 343 |
|
| 333 |
|
| 336 |
| (7)(12)(13)(20) |
MAG DS Corp. | First Lien Term Loan | Aerospace and Defense | 9.2% Cash | L+5.50% | 1.00% | 4/1/27 | 10/28/20 |
| 3,714 |
|
| 3,269 |
|
| 3,388 |
| (7)(12)(13) |
Marble Point Credit Management LLC | Term Loan | Banking, Finance, Insurance & Real Estate | 9.5% Cash | L+6.00% | 1.00% | 8/11/28 | 8/11/21 |
| 5,578 |
|
| 5,450 |
|
| 5,578 |
| (12)(13) |
Marble Point Credit Management LLC | Revolver | Banking, Finance, Insurance & Real Estate | 0.5% Cash |
|
| 8/11/28 | 8/11/21 |
| - |
|
| (25 | ) |
| - |
| (12)(20) |
Maxor National Pharmacy Services, LLC | Revolver | Healthcare & Pharmaceuticals | 0.5% Cash |
|
| 12/6/26 | 10/28/20 |
| - |
|
| - |
|
| (3 | ) | (7)(12)(13)(20) |
Maxor National Pharmacy Services, LLC | Term Loan | Healthcare & Pharmaceuticals | 9.2% Cash | L+5.50% | 1.00% | 12/6/27 | 10/28/20 |
| 8,030 |
|
| 7,427 |
|
| 7,988 |
| (7)(12)(13) |
Mobex Global U.S., Inc. | First Lien Term Loan | Automotive | 5.6% Cash + 3.7% PIK | L+3.25% | 1.00% | 9/28/24 | 2/4/22 |
| 6,210 |
|
| 5,830 |
|
| 5,690 |
| (7)(12)(13) |
Mobex Global U.S., Inc. | First Lien Term Loan | Automotive | 6.3% Cash + 3.3% PIK | L+3.25% | 1.00% | 9/28/24 | 2/4/22 |
| 413 |
|
| 368 |
|
| 379 |
| (7)(12)(13) |
Mobex Global U.S., Inc. | First Lien Term Loan A | Automotive | 6.0% Cash + 3.3% PIK | L+3.25% | 1.00% | 9/28/24 | 2/4/22 |
| 181 |
|
| 181 |
|
| 166 |
| (7)(12)(13) |
Mobex Global U.S., Inc. | First Lien Term Loan B | Automotive | 6.3% Cash + 3.3% PIK | L+3.25% | 1.00% | 9/28/24 | 1/20/22 |
| 179 |
|
| 178 |
|
| 164 |
| (7)(12)(13) |
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
San Vicente Capital LLC | (8)(13)(14)(21) | Senior Secured Loan — Term Loan |
| 6/10/2020 |
|
| 2,955,000 |
|
|
| 2,922,277 |
|
|
| 2,955,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Shipston Group, U.S., Inc. | (8)(13)(14)(20) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 5,946,880 |
|
|
| 5,080,315 |
|
|
| 5,569,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Shipston Group, U.S., Inc. | (8)(13)(14)(20) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 398,211 |
|
|
| 340,137 |
|
|
| 372,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
South Street Securities Holdings, Inc | (8)(13)(14) | Senior Secured Loan — Initial Term Loan |
| 3/24/2021 |
|
| 7,000,000 |
|
|
| 6,843,305 |
|
|
| 6,851,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Sundance Holdings Group, LLC | (8)(13)(14)(20) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 6,792,219 |
|
|
| 5,975,549 |
|
|
| 6,773,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Busy Bee Holdings LLC | (8)(13)(23) | Senior Secured Loan — Revolver |
| 6/9/2021 |
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Busy Bee Holdings LLC | (8)(13)(24) | Senior Secured Loan — First Lien Term Loan A |
| 6/9/2021 |
|
| 3,425,000 |
|
|
| 3,181,122 |
|
|
| 3,342,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Busy Bee Holdings LLC | (8)(13)(24) | Senior Secured Loan — First Lien Term Loan B |
| 6/9/2021 |
|
| 3,540,127 |
|
|
| 3,201,816 |
|
|
| 3,357,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Hippodrome Holdings LLC | (8)(13)(18) | Senior Secured Loan — Last Out Term Loan |
| 6/9/2021 |
|
| 5,460,000 |
|
|
| 4,873,332 |
|
|
| 5,174,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Syncsort Incorporated | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 3/19/2021 |
|
| 2,440,763 |
|
|
| 2,429,283 |
|
|
| 2,440,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TA/Weg Holdings, LLC | (8)(13)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 6/3/2021 |
|
| - |
|
|
| (36,236 | ) |
|
| (42,982 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TA/Weg Holdings, LLC | (8)(13)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 8/13/2021 |
|
| - |
|
|
| (19,380 | ) |
|
| (44,000 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TA/Weg Holdings, LLC | (8)(13) | Senior Secured Loan — Delayed Draw Term Loan |
| 7/29/2021 |
|
| 2,185,143 |
|
|
| 2,174,370 |
|
|
| 2,173,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TA/Weg Holdings, LLC | (8)(13)(23) | Senior Secured Loan — Revolver |
| 8/13/2021 |
|
| 375,000 |
|
|
| 372,577 |
|
|
| 372,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Tailwind Randys, LLC | (8)(13)(14) | Senior Secured Loan — Initial Term Loan |
| 6/27/2019 |
|
| 4,887,500 |
|
|
| 4,834,773 |
|
|
| 4,846,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Tank Partners Equipment Holdings LLC | (5)(8)(13) | Senior Unsecured Bond — 10.00% - 02/2022 - TankConvert |
| 2/15/2019 |
|
| 511,269 |
|
|
| 416,170 |
|
|
| 43,202 |
|
See accompanying notes to unaudited consolidated financial statements.
Portfolio Company / |
| Investment |
| Initial |
| Principal |
|
| Amortized |
|
| Fair Value2 |
| |||
Tex-Tech Industries, Inc. | (8)(13)(14) | Junior Secured Loan — Term Loan (Second Lien) |
| 8/24/2017 |
|
| 12,537,550 |
|
|
| 12,418,665 |
|
|
| 11,118,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
The Edelman Financial Center, LLC | (8)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 12/18/2019 |
|
| 300,000 |
|
|
| 276,325 |
|
|
| 302,718 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Theragenics Corp | (8)(14) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 7,531,435 |
|
|
| 6,674,115 |
|
|
| 7,531,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TLE Holdings, LLC | (8)(13)(14)(21)(23) | Senior Secured Loan — Delayed Draw Term Loan |
| 6/27/2019 |
|
| 737,224 |
|
|
| 736,283 |
|
|
| 731,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TLE Holdings, LLC | (8)(13)(14)(21) | Senior Secured Loan — Initial Term Loan |
| 6/27/2019 |
|
| 5,587,840 |
|
|
| 5,573,521 |
|
|
| 5,548,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Travelport Finance (Luxembourg) S.A R.L. | (3)(13)(14) | Senior Secured Loan — Term Loan |
| 10/28/2020 |
|
| - |
|
|
| 138,440 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Triangle Home Fashions LLC | (8)(13)(14)(20) | Senior Secured Loan — First Lien Term Loan |
| 10/28/2020 |
|
| 10,500,000 |
|
|
| 9,660,307 |
|
|
| 10,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Trident Technologies, LLC | (8)(13)(14) | Senior Secured Loan — First Lien Term Loan |
| 5/10/2021 |
|
| 1,425,000 |
|
|
| 1,415,179 |
|
|
| 1,416,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Trident Technologies, LLC | (8)(13)(14)(21) | Senior Secured Loan — Initial Term Loan |
| 5/1/2020 |
|
| 8,478,157 |
|
|
| 8,297,126 |
|
|
| 8,425,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TronAir Parent Inc. | (8)(13)(14) | Senior Secured Loan — Initial Term Loan (First Lien) |
| 9/30/2016 |
|
| 919,736 |
|
|
| 918,294 |
|
|
| 845,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TRSO II, Inc. | (5)(8)(13) | Junior Secured Loan — Promissory Note |
| 1/24/2020 |
|
| 72,552 |
|
|
| 72,552 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Vectra Co. | (8)(14) | Junior Secured Loan — Initial Loan (Second Lien) |
| 12/18/2019 |
|
| 400,000 |
|
|
| 361,162 |
|
|
| 392,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
VTK Acquisition, Inc. | (8)(13)(18) | Senior Secured Loan — Revolver |
| 6/9/2021 |
|
| 1,536,097 |
|
|
| 1,488,536 |
|
|
| 1,533,793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
VTK Acquisition, Inc. | (8)(13)(18) | Senior Secured Loan — First Lien Term Loan |
| 6/9/2021 |
|
| 2,712,500 |
|
|
| 2,489,208 |
|
|
| 2,538,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
WireCo WorldGroup Inc. | (8)(14) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 8/9/2016 |
|
| 2,555,556 |
|
|
| 2,541,175 |
|
|
| 2,540,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Wonder Love, Inc. | (8)(13)(14)(21) | Senior Secured Loan — Term Loan |
| 11/18/2019 |
|
| 2,475,000 |
|
|
| 2,444,023 |
|
|
| 2,475,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Zest Acquisition Corp. | (8)(13)(14)(18) | Junior Secured Loan — Initial Term Loan (Second Lien) |
| 3/8/2018 |
|
| 3,500,000 |
|
|
| 3,487,489 |
|
|
| 3,485,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Investment in Debt Securities |
|
|
|
|
| $ | 485,086,064 |
|
| $ | 450,601,744 |
|
| $ | 455,079,876 |
|
9
Portfolio Company14 | Investment | Industry | Interest Rate | Reference Rate and Spread1 | Floor | Maturity | Initial Acquisition Date | Par/Shares |
| Cost |
| Fair Value2 |
| Footnote Refs | |||
Mother's Market & Kitchen, Inc. | First Lien Term Loan | Healthcare & Pharmaceuticals | 8.6% Cash | L+5.50% | 1.25% | 7/26/23 | 10/28/20 |
| 5,803 |
| $ | 5,568 |
| $ | 5,785 |
| (7)(12)(13) |
MSM Acquisitions, Inc. | First Lien Term Loan | Services: Business | 9.1% Cash | L+6.00% | 1.00% | 12/9/26 | 12/31/20 |
| 6,936 |
|
| 6,875 |
|
| 6,762 |
| (7)(12)(13) |
MSM Acquisitions, Inc. | Delayed Draw Term Loan | Services: Business | 9.1% Cash | L+6.00% | 1.00% | 6/9/26 | 1/1/22 |
| 2,893 |
|
| 2,896 |
|
| 2,821 |
| (7)(12)(13) |
Nasco Healthcare Inc. | Term Loan | Consumer goods: Non-durable | 8.3% Cash | L+5.50% | 1.00% | 6/30/23 | 1/1/22 |
| 2,211 |
|
| 2,187 |
|
| 2,197 |
| (7)(12)(13) |
Naviga Inc. | First Lien Term Loan | Services: Business | 10.7% Cash | L+7.00% | 1.00% | 12/29/22 | 10/28/20 |
| 4,962 |
|
| 4,883 |
|
| 4,888 |
| (7)(12)(13) |
Naviga Inc. | Delayed Draw Term Loan | Services: Business | 10.7% Cash | L+7.00% | 1.00% | 12/29/22 | 10/28/20 |
| 454 |
|
| 447 |
|
| 447 |
| (7)(12)(13) |
Naviga Inc. | Revolver | Services: Business | 10.6% Cash | L+7.00% | 1.00% | 12/29/22 | 10/28/20 |
| 609 |
|
| 598 |
|
| 598 |
| (7)(12)(13)(20) |
Naviga Inc. | Term Loan | Services: Business | 10.7% Cash | L+7.00% | 1.00% | 12/29/22 | 3/1/21 |
| 707 |
|
| 704 |
|
| 696 |
| (7)(12) |
Naviga Inc. | Delayed Draw Term Loan | Services: Business | 10.7% Cash | L+7.00% | 1.00% | 12/29/22 | 3/1/21 |
| 750 |
|
| 749 |
|
| 739 |
| (7)(12) |
Naviga Inc. | Term Loan | Services: Business | 10.7% Cash | L+7.00% | 1.00% | 12/29/22 | 3/2/22 |
| 405 |
|
| 404 |
|
| 399 |
| (7)(12)(13) |
Netwrix Corporation | First Lien Term Loan | High Tech Industries | 7.9% Cash | SOFR+5.00% | 0.75% | 6/9/29 | 6/9/22 |
| 2,835 |
|
| 2,811 |
|
| 2,792 |
| (7)(12)(13) |
Netwrix Corporation | Delayed Draw Term Loan - First Lien | High Tech Industries | 8.3% Cash | SOFR+5.00% | 0.75% | 6/9/29 | 6/9/22 |
| 103 |
|
| 97 |
|
| 83 |
| (7)(12)(13)(20) |
Netwrix Corporation | Delayed Draw Term Loan - First Lien | High Tech Industries |
|
|
| 6/9/29 | 6/9/22 |
| - |
|
| - |
|
| (3 | ) | (7)(12)(13)(20) |
Netwrix Corporation | Revolver | High Tech Industries | 0.5% Cash |
|
| 6/9/29 | 6/9/22 |
| - |
|
| (11 | ) |
| (17 | ) | (7)(12)(20) |
Northeast Metal Works LLC | Term Loan | Metals & Mining | 8.0% Cash + 2.0% PIK |
|
| 12/31/22 | 1/27/22 |
| 14,477 |
|
| 14,477 |
|
| 13,248 |
| (7)(12)(17) |
One Stop Mailing LLC | First Lien Term Loan | Transportation: Consumer | 9.4% Cash | L+6.25% | 1.00% | 4/29/27 | 5/7/21 |
| 7,786 |
|
| 7,666 |
|
| 7,378 |
| (7)(12)(13) |
Orbit Purchaser LLC | Delayed Draw Term Loan | Banking, Finance, Insurance & Real Estate | 7.4% Cash | L+4.50% | 1.00% | 10/21/24 | 10/28/20 |
| 732 |
|
| 680 |
|
| 722 |
| (7)(12)(13) |
Orbit Purchaser LLC | First Lien Term Loan | Banking, Finance, Insurance & Real Estate | 7.4% Cash | L+4.50% | 1.00% | 10/19/24 | 10/28/20 |
| 2,503 |
|
| 2,324 |
|
| 2,468 |
| (7)(12)(13) |
Orbit Purchaser LLC | Incremental First Lien Term Loan | Banking, Finance, Insurance & Real Estate | 7.4% Cash | L+4.50% | 1.00% | 10/21/24 | 10/28/20 |
| 1,512 |
|
| 1,406 |
|
| 1,492 |
| (7)(12)(13) |
Pomeroy Technologies, LLC | Senior Term Loan A | High Tech Industries | 5.0% PIK |
|
| 4/4/26 | 5/29/20 |
| 1,603 |
|
| 1,356 |
|
| 1,146 |
| (7)(12) |
Pomeroy Technologies, LLC | Senior Term Loan B | High Tech Industries | 7.0% PIK |
|
| 4/4/26 | 5/29/20 |
| 1,459 |
|
| 1,245 |
|
| 195 |
| (5)(7)(12) |
Pomeroy Technologies, LLC | Super Senior Term Loan B | High Tech Industries | 9.0% PIK |
|
| 4/4/26 | 5/29/20 |
| 1,127 |
|
| 1,116 |
|
| 1,066 |
| (7)(12) |
Pomeroy Technologies, LLC | Term Loan | High Tech Industries | 10.0% PIK |
|
| 4/4/26 | 4/4/22 |
| 53 |
|
| 53 |
|
| 38 |
| (7)(12) |
Pomeroy Technologies, LLC | Term Loan | High Tech Industries | 10.0% PIK |
|
| 4/4/26 | 5/3/22 |
| 373 |
|
| 369 |
|
| 358 |
| (7)(12) |
Premier Imaging, LLC | Term Loan | Healthcare & Pharmaceuticals | 8.9% Cash | L+5.75% | 1.00% | 1/2/25 | 12/30/21 |
| 2,048 |
|
| 2,032 |
|
| 2,012 |
| (7)(12)(13) |
Premier Imaging, LLC | Delayed Draw Term Loan | Healthcare & Pharmaceuticals | 8.9% Cash | L+5.75% | 1.00% | 1/2/25 | 12/30/21 |
| 555 |
|
| 536 |
|
| 521 |
| (7)(12)(13)(20) |
Priority Holdings, LLC | First Lien Term Loan | High Tech Industries | 8.8% Cash | L+5.75% | 1.00% | 4/22/27 | 4/21/21 |
| 9,523 |
|
| 9,460 |
|
| 9,265 |
| (7)(13) |
Project Castle, Inc. | First Lien Term Loan | Transportation: Cargo | 9.1% Cash | SOFR+5.50% | 0.50% | 6/8/29 | 6/9/22 |
| 8,000 |
|
| 7,189 |
|
| 7,180 |
| (7)(12)(13) |
Project Leopard Holdings, Inc. | First Lien Term Loan | High Tech Industries | 7.8% Cash | SOFR+5.25% | 1.00% | 6/15/29 | 6/15/22 |
| 8,000 |
|
| 7,455 |
|
| 7,203 |
| (7)(13) |
PVHC Holding Corp | Initial Term Loan | Containers, Packaging and Glass | 5.8% Cash | L+4.75% | 1.00% | 8/3/24 | 12/23/19 |
| 2,765 |
|
| 2,761 |
|
| 2,661 |
| (7)(12)(13) |
Qualtek USA, LLC | First Lien Term Loan | High Tech Industries | 9.1% Cash | L+6.25% | 1.00% | 7/18/25 | 10/28/20 |
| 5,398 |
|
| 4,722 |
|
| 4,102 |
| (13) |
Radiology Partners, Inc | Term B Loan (First Lien) | Healthcare & Pharmaceuticals | 7.3% Cash | L+4.25% |
| 7/9/25 | 1/26/21 |
| 7,000 |
|
| 6,282 |
|
| 5,929 |
| (7)(13) |
Radius Aerospace, Inc. | Initial Term Loan | Aerospace and Defense | 9.5% Cash | SOFR+5.75% | 1.00% | 3/29/25 | 12/23/19 |
| 6,148 |
|
| 6,108 |
|
| 6,028 |
| (7)(12)(13) |
Reception Purchaser, LLC | First Lien Term Loan | Transportation: Cargo | 9.1% Cash | SOFR+6.00% | 0.75% | 3/24/28 | 4/28/22 |
| 4,484 |
|
| 4,377 |
|
| 4,304 |
| (7)(12)(13) |
Securus Technologies Holdings, Inc | Term Loan | Telecommunications | 8.2% Cash | L+4.50% | 1.00% | 11/1/24 | 3/21/22 |
| 992 |
|
| 949 |
|
| 877 |
|
|
South Street Securities Holdings, Inc | Senior Notes | Banking, Finance, Insurance & Real Estate | 9.0% Cash |
|
| 9/20/27 | 9/20/22 |
| 3,150 |
|
| 2,628 |
|
| 2,628 |
| (7)(12) |
Sundance Holdings Group, LLC | Term Loan | Retail | 8.1% Cash | L+6.00% | 1.00% | 5/1/24 | 10/1/21 |
| 6,283 |
|
| 5,876 |
|
| 6,192 |
| (7)(12)(13) |
Surge Busy Bee Holdings LLC | First Lien Term Loan A | Services: Business | 13.1% Cash | L+10.00% |
| 11/16/23 | 2/15/22 |
| 3,050 |
|
| 2,943 |
|
| 3,050 |
| (7)(12)(13) |
Surge Busy Bee Holdings LLC | First Lien Term Loan B | Services: Business | 12.0% Cash + 2.0% PIK |
|
| 11/16/23 | 2/15/22 |
| 2,540 |
|
| 2,409 |
|
| 2,421 |
| (7)(12)(13) |
Surge Hippodrome Holdings LLC | Last Out Term Loan | Services: Business | 14.2% Cash | SOFR+12.24% | 2.00% | 8/1/24 | 6/9/21 |
| 5,460 |
|
| 5,080 |
|
| 5,089 |
| (7)(12)(17) |
See accompanying notes to unaudited consolidated financial statements.
10
Portfolio Company14 | Investment | Industry | Interest Rate | Reference Rate and Spread1 | Floor | Maturity | Initial Acquisition Date | Par/Shares |
| Cost |
| Fair Value2 |
| Footnote Refs | |||
Symplr Software, Inc. | Term Loan | Healthcare & Pharmaceuticals | 7.6% Cash | SOFR+4.50% | 0.75% | 12/22/27 | 2/2/22 |
| 1,692 |
| $ | 1,688 |
| $ | 1,597 |
| (7)(13) |
TA/WEG Holdings, LLC | Delayed Draw Term Loan | Banking, Finance, Insurance & Real Estate | 8.5% Cash | SOFR+6.00% | 1.00% | 10/2/27 | 10/1/21 |
| 7,969 |
|
| 7,953 |
|
| 7,949 |
| (7)(12)(13) |
TA/WEG Holdings, LLC | Delayed Draw Term Loan | Banking, Finance, Insurance & Real Estate | 9.9% Cash | SOFR+6.00% |
| 10/2/27 | 5/2/22 |
| 397 |
|
| 386 |
|
| 384 |
| (7)(12)(20) |
TA/WEG Holdings, LLC | Revolver | Banking, Finance, Insurance & Real Estate | 0.5% Cash |
|
| 10/2/27 | 5/2/22 |
| - |
|
| (3 | ) |
| (2 | ) | (7)(12)(20) |
Tailwind Randys, LLC | Initial Term Loan | Automotive | 9.3% Cash | SOFR+5.50% | 1.00% | 5/16/25 | 12/23/19 |
| 4,838 |
|
| 4,800 |
|
| 4,763 |
| (7)(12)(13) |
TLE Holdings, LLC | Initial Term Loan | Healthcare, Education and Childcare | 8.6% Cash | L+5.50% | 1.00% | 6/28/24 | 12/8/20 |
| 5,530 |
|
| 5,521 |
|
| 5,497 |
| (7)(12)(13) |
TLE Holdings, LLC | Delayed Draw Term Loan | Healthcare, Education and Childcare | 8.6% Cash | L+5.50% | 1.00% | 6/28/24 | 12/23/19 |
| 730 |
|
| 729 |
|
| 725 |
| (7)(12)(13)(20) |
TronAir Parent Inc. | Initial Term Loan (First Lien) | Aerospace and Defense | 8.7% Cash + 0.5% PIK | L+5.75% | 1.00% | 9/8/23 | 12/23/19 |
| 907 |
|
| 906 |
|
| 847 |
| (7)(12)(13) |
Wework Companies LLC | First Lien Term Loan - Last Out Lender | Banking, Finance, Insurance & Real Estate | 9.6% Cash | SOFR+6.50% | 0.75% | 11/30/23 | 6/30/22 |
| 7,000 |
|
| 6,971 |
|
| 6,923 |
| (12)(13) |
Wonder Love, Inc. | Term Loan | Media: Diversified & Production | 8.7% Cash | L+5.00% | 1.00% | 11/18/24 | 12/18/19 |
| 2,100 |
|
| 2,082 |
|
| 2,100 |
| (7)(12)(13) |
Total Senior Secured Loans (165% of net asset value at fair value) |
|
|
|
|
|
|
| $ | 426,052 |
| $ | 415,819 |
|
| |||
Junior Secured Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Confluence Technologies, Inc. | Term Loan Second Lien | Services: Business | 9.3% Cash | L+6.50% | 0.50% | 7/23/29 | 7/22/21 |
| 4,000 |
| $ | 3,974 |
| $ | 3,910 |
| (7)(12)(13) |
DCert Buyer, Inc. | Term Loan (Second Lien) | High Tech Industries | 9.9% Cash | SOFR+7.00% |
| 2/16/29 | 3/16/21 |
| 5,400 |
|
| 5,389 |
|
| 5,063 |
| (7)(13) |
Firstlight Holdco Inc. | Initial Term Loan (Second Lien) | Telecommunications | 10.6% Cash | L+7.50% |
| 7/23/26 | 12/18/19 |
| 400 |
|
| 374 |
|
| 380 |
| (7)(12)(13) |
Global Tel*Link Corporation | Term Loan (Second Lien) | Telecommunications | 12.7% Cash | SOFR+10.00% |
| 11/29/26 | 12/23/19 |
| 1,500 |
|
| 1,487 |
|
| 1,289 |
| (7)(13) |
Helix Acquisition Holdings, Inc. | Initial Term Loan (Second Lien) | Metals & Mining | 11.7% Cash | L+8.00% |
| 9/29/25 | 12/18/19 |
| 1,400 |
|
| 1,286 |
|
| 1,343 |
| (7)(12)(13) |
Hoffmaster Group, Inc. | Initial Term Loan (Second Lien) | Forest Products & Paper | 13.2% Cash | L+9.50% | 1.00% | 11/21/24 | 12/23/19 |
| 1,600 |
|
| 1,587 |
|
| 1,376 |
| (7)(13) |
Idera, Inc. | Term Loan (Second Lien) | High Tech Industries | 9.3% Cash | L+6.75% | 0.75% | 2/4/29 | 4/29/21 |
| 6,000 |
|
| 5,951 |
|
| 5,768 |
| (7)(12)(13) |
Ivanti Software, Inc. | Term Loan Second Lien | High Tech Industries | 10.3% Cash | L+7.25% | 0.50% | 12/1/28 | 10/26/21 |
| 6,000 |
|
| 5,956 |
|
| 4,510 |
| (7)(13) |
Navex Topco, Inc. | Initial Term Loan (Second Lien) | Electronics | 10.1% Cash | L+7.00% |
| 9/4/26 | 12/8/20 |
| 7,700 |
|
| 7,370 |
|
| 7,470 |
| (7)(13)(17) |
Phoenix Guarantor Inc. | Term Loan Second Lien | Healthcare & Pharmaceuticals | 11.6% Cash | L+8.50% | 1.00% | 3/5/27 | 12/18/19 |
| 1,200 |
|
| 1,128 |
|
| 1,178 |
| (7)(12)(13) |
ProAir, LLC | Sub Note | Capital Equipment | 17.8% PIK |
|
| 12/31/22 | 3/8/22 |
| 1,931 |
|
| 1,931 |
|
| 1,931 |
| (7)(8)(12) |
Project Leopard Holdings, Inc. | 2nd Lien TL | High Tech Industries | 10.2% Cash | SOFR+7.75% | 0.50% | 7/20/30 | 7/20/22 |
| 5,000 |
|
| 4,902 |
|
| 4,975 |
| (7)(12) |
Redstone Holdco 2 LP | Term Loan (Second Lien) | High Tech Industries | 10.5% Cash | L+7.75% | 0.75% | 4/16/29 | 9/28/21 |
| 4,566 |
|
| 4,496 |
|
| 3,655 |
| (7)(13) |
Robertshaw US Holding Corp. | Initial Term Loan (Second Lien) | Capital Equipment | 11.1% Cash | L+8.00% | 1.00% | 2/28/26 | 2/15/18 |
| 3,000 |
|
| 2,987 |
|
| 2,246 |
| (7)(12) |
Safe Fleet Holdings LLC | Initial Term Loan (Second Lien) | Automotive | 9.8% Cash | L+6.75% | 1.00% | 2/2/26 | 12/18/19 |
| 700 |
|
| 650 |
|
| 642 |
| (7)(13) |
Tex-Tech Industries, Inc. | Term Loan (Second Lien) | Textiles and Leather | 13.1% Cash + 1.5% PIK | L+10.00% | 1.00% | 8/24/24 | 12/23/19 |
| 12,759 |
|
| 12,640 |
|
| 12,408 |
| (7)(12)(13) |
TRSO II, Inc. | Promissory Note | Energy: Oil & Gas | 1.7% PIK |
|
| 1/24/25 | 1/24/20 |
| 74 |
|
| 74 |
|
| - |
| (5)(7)(12) |
Zest Acquisition Corp. | Initial Term Loan (Second Lien) | Healthcare, Education and Childcare | 10.1% Cash | L+7.00% | 1.00% | 3/13/26 | 12/18/19 |
| 3,500 |
|
| 3,490 |
|
| 3,391 |
| (7)(12)(13)(17) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Junior Loans (24% of net asset value at fair value) |
|
|
|
|
|
|
| $ | 65,672 |
| $ | 61,535 |
|
| |||
Senior Unsecured Bond |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Tank Partners Equipment Holdings LLC | 10.00% - 02/2022 - TankConvert | Energy: Oil & Gas | 10.0% PIK |
|
| 2/15/22 | 2/15/19 |
| 511 |
| $ | 416 |
| $ | 43 |
| (5)(7)(8)(12) |
Total Senior Unsecured Bond (0% of net asset value at fair value) |
|
|
|
|
|
|
| $ | 416 |
| $ | 43 |
|
|
See accompanying notes to unaudited consolidated financial statements.
11
Equity Securities Portfolio
Portfolio Company14 | Investment | Industry | Interest Rate | Initial Acquisition Date | Par/Shares |
| Cost |
| Fair Value2 |
| Footnote Refs | |||
4L Ultimate Topco Corporation | Common | Services: Business |
| 5/29/20 |
| 321 |
| $ | 29 |
| $ | 29 |
| (7)(12)(18) |
AAPC Holdings, LLC | Equity | Services: Consumer |
| 5/18/22 |
| - |
|
| - |
|
| 258 |
| (7)(12)(18)(23) |
AAPC Holdings, LLC | Preferred Equity | Healthcare & Pharmaceuticals | 18.0% Cash | 5/18/22 |
| 146,214 |
|
| 4 |
|
| 157 |
| (7)(12)(23) |
Advantage Capital Holdings LLC | Class A Membership Units | Banking, Finance, Insurance & Real Estate |
| 3/31/20 |
| 628 |
|
| - |
|
| 1,363 |
| (7)(12)(18)(19)(23) |
Advantage Capital Holdings LLC | Preferred Equity | Banking, Finance, Insurance & Real Estate | 12.5% PIK | 4/14/22 |
| 2,117,415 |
|
| 2,119 |
|
| 2,351 |
| (7)(12)(23) |
Advantage Capital Holdings LLC | Class A Membership Units | Banking, Finance, Insurance & Real Estate |
| 4/14/22 |
| 164 |
|
| 500 |
|
| 580 |
| (7)(12)(18)(23) |
Anthem Sports & Entertainment Inc. | Warrant Class A | Media: Broadcasting & Subscription |
| 9/9/19 |
| 263 |
|
| 46 |
|
| 359 |
| (7)(12)(18) |
Anthem Sports & Entertainment Inc. | Warrant Class B | Media: Broadcasting & Subscription |
| 9/9/19 |
| 46 |
|
| - |
|
| 57 |
| (7)(12)(18) |
Anthem Sports & Entertainment Inc. | Warrant Common Stock | Media: Broadcasting & Subscription |
| 9/9/19 |
| 859 |
|
| - |
|
| 90 |
| (7)(12)(18) |
Anthem Sports & Entertainment Inc. | Warrants | Media: Broadcasting & Subscription |
| 11/15/21 |
| 42 |
|
| - |
|
| 52 |
| (7)(12)(18) |
Anthem Sports & Entertainment Inc. | Warrants | Media: Broadcasting & Subscription |
| 11/15/21 |
| 247 |
|
| - |
|
| 336 |
| (7)(12)(18) |
Anthem Sports & Entertainment Inc. | Warrants | Media: Broadcasting & Subscription |
| 11/15/21 |
| 785 |
|
| - |
|
| 82 |
| (7)(12)(18) |
Aperture Dodge 18 LLC | Equity | Banking, Finance, Insurance & Real Estate |
| 4/22/22 |
| 72,949 |
|
| 73 |
|
| 73 |
| (7)(12)(18)(20) |
ATP Oil & Gas Corporation | Limited Term Royalty Interest | Energy: Oil & Gas |
| 12/18/19 |
| - |
|
| - |
|
| 1,345 |
| (7)(11)(12) |
BMP Slappey Holdco, LLC | Preferred Stock | Telecommunications |
| 6/9/21 |
| 200,000 |
|
| 467 |
|
| 552 |
| (7)(12)(17)(18)(21) |
BMP Slappey Investment II | Preferred Stock | Telecommunications |
| 6/9/21 |
| 88,946 |
|
| 208 |
|
| 246 |
| (7)(12)(17)(18)(21) |
Brite Media LLC | Common Stock | Media: Advertising, Printing & Publishing |
| 6/9/21 |
| 139 |
|
| 150 |
|
| 281 |
| (7)(12)(18) |
Carestream Health Holdings, Inc. | Common Stock | Healthcare & Pharmaceuticals |
| 9/30/22 |
| 4,099 |
|
| 53 |
|
| 53 |
| (7)(12)(18) |
Centric Brands Inc. | Common | Machinery (Non-Agrclt/Constr/Electr) |
| 10/28/20 |
| 36,342 |
|
| - |
|
| - |
| (7)(12)(13)(18)(21) |
Coastal Screen and Rail, LLC | Preferred Stock | Construction & Building |
| 6/9/21 |
| 150,000 |
|
| 418 |
|
| 400 |
| (7)(12)(18)(21) |
EJF Investments Ltd. | Preferred Equity | Banking, Finance, Insurance & Real Estate |
| 6/17/20 |
| 1,000,000 |
|
| 1,256 |
|
| 1,317 |
| (3)(18) |
Everyware Global, Inc. | Common | Consumer goods: Durable |
| 10/28/20 |
| 1,085,565 |
|
| 346 |
|
| 478 |
| (7)(12)(18) |
Flight Lease VII | Common Stock | Aerospace and Defense |
| 6/9/21 |
| 1,938 |
|
| 280 |
|
| 250 |
| (7)(12)(15)(18)(22) |
FP WRCA Coinvestment Fund VII, Ltd. | Class A Shares | Capital Equipment |
| 2/2/07 |
| 1,500,000 |
|
| 1,500 |
|
| 1,260 |
| (3)(12)(18) |
Fusion Connect, Inc. | Common | Telecommunications |
| 1/14/20 |
| 121,871 |
|
| 866 |
|
| - |
| (7)(12)(13)(18) |
GreenPark Infrastructure, LLC | Preferred Equity | Energy: Electricity |
| 6/10/22 |
| 1,000 |
|
| 500 |
|
| 500 |
| (7)(12)(17)(18)(23) |
GreenPark Infrastructure, LLC | Preferred Equity | Energy: Electricity |
| 6/10/22 |
| 500 |
|
| 171 |
|
| 171 |
| (7)(12)(17)(18)(20)(23) |
KC Engineering & Construction Services, LLC | Common Stock | Environmental Industries |
| 6/9/21 |
| 131,081 |
|
| 4,315 |
|
| 6,200 |
| (7)(12)(18)(21) |
Kleen-Tech Acquisition, LLC | Common Stock | Services: Business |
| 6/9/21 |
| 250,000 |
|
| 1,264 |
|
| 1,290 |
| (7)(12)(17)(18)(21) |
Northeast Metal Works LLC | Preferred Stock | Metals & Mining |
| 6/9/21 |
| 2,368 |
|
| - |
|
| 460 |
| (7)(12)(17)(18)(21) |
Ohene Holdings B.V. | Warrants | High Tech Industries |
| 3/13/19 |
| 4 |
|
| - |
|
| - |
| (3)(12)(18) |
ProAir HoldCo, LLC | Common Stock | Capital Equipment |
| 2/11/22 |
| 2,749,997 |
|
| 4,261 |
|
| 1,478 |
| (7)(8)(12)(18) |
Prosper Marketplace | Class B Preferred Units | Consumer goods: Durable |
| 9/23/13 |
| 912,865 |
|
| 279 |
|
| 324 |
| (6)(7)(12)(18) |
Ravn Air Liquidation Trust | Equity | Aerospace and Defense |
| 10/1/21 |
| 1,049 |
|
| 200 |
|
| 8 |
| (7)(12)(18) |
Roscoe Investors, LLC | Class A Units | Healthcare & Pharmaceuticals |
| 3/26/14 |
| 10,000 |
|
| 1,000 |
|
| 357 |
| (7)(12)(18) |
Safety Services Holdings Corporation, | Preferred Stock | Services: Business |
| 6/9/21 |
| 100,000 |
|
| 44 |
|
| 3 |
| (7)(12)(18) |
South Street Securities Holdings, Inc | Warrant | Banking, Finance, Insurance & Real Estate |
| 9/20/22 |
| 3,966 |
|
| 455 |
|
| 455 |
| (7)(12)(18) |
Surge Busy Bee Holdings LLC | Warrants | Services: Business |
| 6/9/21 |
| 105 |
|
| 63 |
|
| 118 |
| (7)(12)(18)(21) |
Surge Hippodrome Holdings LLC | Warrants | Services: Business |
| 6/9/21 |
| 10 |
|
| 159 |
|
| 431 |
| (7)(12)(17)(18)(21) |
Surge Hippodrome Partners LP | Common Stock | Services: Business |
| 6/9/21 |
| 185 |
|
| 425 |
|
| 723 |
| (7)(12)(17)(18)(21) |
Tank Partners Equipment Holdings LLC | Class A Units | Energy: Oil & Gas |
| 2/15/19 |
| 49,000 |
|
| 6,228 |
|
| - |
| (7)(8)(12)(18) |
World Business Lenders, LLC | Common Stock | Banking, Finance, Insurance & Real Estate |
| 6/9/21 |
| 49,209 |
|
| - |
|
| - |
| (12)(18) |
Total Equities (10% of net asset value at fair value) |
|
|
|
|
|
| $ | 27,679 |
| $ | 24,487 |
|
|
Portfolio Company / |
| Investment15 |
| Initial |
| Quantity/Par/Shares |
|
| Cost |
|
| Fair Value2 |
| |||
4L Ultimate Topco Corporation | (8)(13)(19) | Common |
| 5/29/2020 |
| $ | 321 |
|
| $ | 29,275 |
|
| $ | 29,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AAPC Holdings, LLC | (8)(13)(21)(22) | Class A Preferred Units |
| 6/27/2019 |
|
| 5,500,000 |
|
|
| 5,500,000 |
|
|
| 5,528,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Advantage Capital Holdings LLC | (8)(13)(19)(22) | Class A Membership Units |
| 2/14/2020 |
|
| 628 |
|
|
| - |
|
|
| 204,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(19)(21) | Warrant Class A |
| 9/9/2019 |
|
| 263 |
|
|
| 46,371 |
|
|
| 30,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(19)(21) | Warrant Class B |
| 9/9/2019 |
|
| 46 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Anthem Sports & Entertainment Inc. | (8)(13)(19)(21) | Warrant Common Stock |
| 9/9/2019 |
|
| 859 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
ATP Oil & Gas Corporation | (8)(11)(13) | Limited Term Royalty Interest |
| 12/18/2019 |
|
| 864,798 |
|
|
| 864,798 |
|
|
| 2,127,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
BMP Slappey Holdco, LLC | (8)(13)(18)(19)(25) | Preferred Stock |
| 6/9/2021 |
|
| 200,000 |
|
|
| 466,949 |
|
|
| 441,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
BMP Slappey Investment II | (8)(13)(18)(19)(25) | Preferred Stock |
| 6/9/2021 |
|
| 88,946 |
|
|
| 207,666 |
|
|
| 196,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Brite Media LLC | (8)(13)(19) | Common Stock |
| 6/9/2021 |
|
| 139 |
|
|
| 150,026 |
|
|
| 245,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Carestream Health, Inc. | (8)(13)(19) | Warrant |
| 5/8/2020 |
|
| 33 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Centric Brands Inc. | (8)(13)(14)(19) | Common |
| 10/28/2020 |
|
| 36,342 |
|
|
| - |
|
|
| 42,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Coastal Screen and Rail, LLC | (8)(13)(19)(25) | Preferred Stock |
| 6/9/2021 |
|
| 150,000 |
|
|
| 418,387 |
|
|
| 400,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
EJF Investments Ltd. | (3)(19) | Preferred Equity |
| 6/17/2020 |
|
| 1,000,000 |
|
|
| 1,256,211 |
|
|
| 1,546,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Everyware Global, Inc. | (8)(13)(19) | Common |
| 10/28/2020 |
|
| 1,085,565 |
|
|
| 345,834 |
|
|
| 2,008,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Flight Lease VII | (8)(13)(16)(19)(26) | Common Stock |
| 6/9/2021 |
|
| 1,938 |
|
|
| 280,170 |
|
|
| 300,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Flight Lease XII | (8)(13)(18)(19)(25) | Common Stock |
| 6/9/2021 |
|
| 1,000 |
|
|
| 529,787 |
|
|
| 580,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
FP WRCA Coinvestment Fund VII, Ltd. | (3)(13)(19) | Class A Shares |
| 2/2/2007 |
|
| 1,500,000 |
|
|
| 1,500,000 |
|
|
| 738,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Fusion Connect, Inc. | (8)(13)(14)(19) | Common |
| 10/28/2020 |
|
| 121,871 |
|
|
| 865,853 |
|
|
| 220,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
GIG Rooster Holdings I, LLC | (8)(13)(18)(19) | Common |
| 10/28/2020 |
|
| 99 |
|
|
| - |
|
|
| 79,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
KC Engineering & Construction Services, LLC | (8)(13)(19)(25) | Common Stock |
| 6/9/2021 |
|
| 131,081 |
|
|
| 4,314,740 |
|
|
| 4,500,000 |
|
Portfolio Company / |
| Investment15 |
| Initial |
| Quantity/Par/Shares |
|
| Cost |
|
| Fair Value2 |
| |||
Kleen-Tech Acquisition, LLC | (8)(13)(18)(19)(25) | Common Stock |
| 6/9/2021 |
|
| 250,000 |
|
|
| 1,264,409 |
|
|
| 1,240,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
New Millennium Holdco, Inc. (Millennium Health, LLC) | (8)(13)(19) | Common |
| 10/7/2014 |
|
| 29,699 |
|
|
| 1,953,299 |
|
|
| 1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Northeast Metal Works LLC | (8)(13)(18)(19)(25) | Preferred Stock |
| 6/9/2021 |
|
| 2,368 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ohene Holdings B.V. | (3)(13)(19) | Warrants |
| 3/31/2019 |
|
| 4 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Prosper Marketplace | (6)(8)(13)(19) | Class B Preferred Units |
| 10/28/2020 |
|
| 912,865 |
|
|
| 278,865 |
|
|
| 264,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Ravn Air Group, Inc. | (8)(13)(19) | Class B Membership Units |
| 10/30/2020 |
|
| 1,172 |
|
|
| 247,543 |
|
|
| 71,223 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Roscoe Investors, LLC | (8)(13)(19) | Class A Units |
| 3/26/2014 |
|
| 10,000 |
|
|
| 1,000,000 |
|
|
| 483,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Safety Services Holdings Corporation, | (8)(13)(19) | Preferred Stock |
| 6/9/2021 |
|
| 100,000 |
|
|
| 43,334 |
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Busy Bee Holdings LLC | (8)(13)(19)(25) | Warrants |
| 6/9/2021 |
|
| 105 |
|
|
| 62,571 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Hippodrome Holdings LLC | (8)(13)(18)(19)(25) | Warrants |
| 6/9/2021 |
|
| 10 |
|
|
| 159,322 |
|
|
| 180,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Surge Hippodrome Partners LP | (8)(13)(18)(19)(25) | Common Stock |
| 6/9/2021 |
|
| 176 |
|
|
| 357,029 |
|
|
| 300,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Tank Partners Equipment Holdings LLC | (8)(9)(13)(19) | Class A Units |
| 8/28/2014 |
|
| 49,000 |
|
|
| 6,228,000 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
TRSO II, Inc. | (8)(13)(19) | Common Stock |
| 12/24/2012 |
|
| 1,228 |
|
|
| 420,289 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
VTK Acquisition, Inc. | (8)(13)(18)(19)(25) | Common Stock |
| 6/9/2021 |
|
| 90 |
|
|
| 250,959 |
|
|
| 490,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
World Business Lenders, LLC | (13)(19) | Common Stock |
| 6/9/2021 |
|
| 49,209 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Investment in Equity Securities |
|
|
|
|
| $ | 12,089,855 |
|
| $ | 29,041,687 |
|
| $ | 22,298,759 |
|
CLO Subordinated Investments
Portfolio Company |
| Investment15,11 |
| Initial |
| Percentage |
|
| Amortized |
|
| Fair |
| |||
Catamaran CLO 2013- 1 Ltd.(3)(13) |
| Subordinated Securities, effective interest 8.0%, |
| 6/4/2013 |
|
| 23.3 | % |
|
| 5,695,114 |
|
|
| 3,404,929 |
|
Catamaran CLO 2014-1 Ltd.(3)(13) |
| Subordinated Securities, effective interest 5.5%, |
| 5/6/2014 |
|
| 22.2 | % |
|
| 9,619,787 |
|
|
| 5,218,279 |
|
Dryden 30 Senior Loan Fund(3)(13) |
| Subordinated Securities, effective interest 20.5%, |
| 10/10/2013 |
|
| 6.8 | % |
|
| 1,099,275 |
|
|
| 1,364,999 |
|
Catamaran CLO 2014-2 Ltd.(3)(7)(13) |
| Subordinated Securities, effective interest 0.0%, |
| 8/15/2014 |
|
| 24.9 | % |
|
| 6,065,598 |
|
|
| - |
|
Catamaran CLO 2015-1 Ltd.(3)(13) |
| Subordinated Securities, effective interest 8.7%, |
| 5/5/2015 |
|
| 9.9 | % |
|
| 2,660,968 |
|
|
| 162,425 |
|
Catamaran CLO 2018-1 Ltd(3)(13) |
| Subordinated Securities, effective interest 8.7%, |
| 9/27/2018 |
|
| 24.8 | % |
|
| 8,823,496 |
|
|
| 7,023,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Investment in CLO Fund Securities |
|
|
|
|
|
| $ | 33,964,238 |
|
| $ | 17,173,634 |
|
Portfolio Company14 | Investment10 | Industry | Maturity | Percentage Ownership |
| Initial Acquisition Date |
| Cost |
|
| Fair Value2 |
| Footnote Refs | ||
Catamaran CLO 2014-1 Ltd. | Subordinated Securities, effective interest 11.2% | CLO Fund Securities | 4/20/30 | 22.2% |
| 4/9/14 |
| $ | 4,175 |
|
| $ | 2,835 |
| (3)(12) |
Catamaran CLO 2014-2 Ltd. | Subordinated Securities, effective interest 0.0% | CLO Fund Securities | 10/18/26 | 24.9% |
| 8/15/14 |
|
| 6,066 |
|
|
| - |
| (3)(12) |
Catamaran CLO 2015-1 Ltd. | Subordinated Securities, effective interest 0.0% | CLO Fund Securities | 4/22/27 | 9.9% |
| 5/5/15 |
|
| 2,534 |
|
|
| - |
| (3)(12) |
Catamaran CLO 2018-1 Ltd | Subordinated Securities, effective interest 9.9% | CLO Fund Securities | 10/27/31 | 24.8% |
| 9/27/18 |
|
| 6,261 |
|
|
| 5,294 |
| (3)(12) |
Dryden 30 Senior Loan Fund | Subordinated Securities, effective interest 0% | CLO Fund Securities | 11/1/28 | 6.8% |
| 10/10/13 |
|
| 1,157 |
|
|
| 950 |
| (3)(12) |
JMP Credit Advisors CLO IV LTD | Subordinated Securities, effective interest 6.3% | CLO Fund Securities | 7/17/29 | 57.2% |
| 10/22/21 |
|
| 6,407 |
|
|
| 6,396 |
| (3)(12) |
JMP Credit Advisors CLO V LTD | Subordinated Securities, effective interest 7.1% | CLO Fund Securities | 7/17/30 | 57.2% |
| 10/22/21 |
|
| 10,811 |
|
|
| 9,148 |
| (3)(12) |
Total CLO Fund Securities (10% of net asset value at fair value) |
|
|
|
|
|
|
| $ | 37,411 |
|
| $ | 24,623 |
|
|
See accompanying notes to unaudited consolidated financial statements.
12
Asset Manager Affiliates
Portfolio Company14 | Investment | Percentage Ownership | Initial Acquisition Date | Cost |
|
| Fair Value2 |
|
| Footnote Refs | ||
Asset Manager Affiliates | Asset Management Company | - | - | $ | 17,791 |
|
| $ | - |
|
| (8)(12) |
Total Asset Manager Affiliates (0% of net asset value at fair value) |
|
|
| $ | 17,791 |
|
| $ | - |
|
|
|
Portfolio Company / |
| Investment15 |
| Initial |
| Percentage |
|
| Cost |
|
| Fair |
| |||
Asset Manager Affiliates(8)(9)(13)(16) |
| Asset Management Company |
| 12/11/2006 |
|
| 100 | % |
| $ | 17,791,230 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Investment in Asset Manager |
|
|
|
|
|
|
|
| $ | 17,791,230 |
|
| $ | - |
|
Derivatives
Portfolio Company / |
| Investment15 |
| Initial |
|
|
| Cost |
|
| Fair |
| ||
AAPC Holdings LLC.(13)(21)(22) |
| Securities Swap and Option Agreement |
| 9/30/2019 |
|
|
| $ | - |
|
| $ | (2,000,145 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Coastal Screen and Rail(13)(22) |
| Put Option |
| 8/31/2021 |
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
HDNet Holdco LLC (13)(21)(22) |
| Call Option |
| 9/9/2019 |
|
|
|
| 30,609 |
|
|
| 18,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total Derivatives (0% of net asset value at fair value) |
|
|
|
|
|
|
| $ | 30,609 |
|
| $ | (1,982,091 | ) |
Joint Ventures
Portfolio Company14 | Investment | Percentage Ownership | Initial Acquisition Date | Cost |
|
| Fair Value2 |
|
| Footnote Refs | ||
KCAP Freedom 3 LLC | Joint Ventures | 62.8% | 7/19/17 | $ | 27,415 |
|
| $ | 18,190 |
|
| (8)(12) |
Series A-Great Lakes Funding II LLC | Joint Ventures | 12.5% | 8/5/22 |
| 27,724 |
|
|
| 26,951 |
|
| (9)(16)(17)(20) |
Total Joint Venture (18% of net asset value at fair value) |
|
|
| $ | 55,139 |
|
| $ | 45,141 |
|
|
|
Derivatives
Portfolio Company / |
| Investment15 |
| Initial |
| Percentage |
|
| Cost |
|
| Fair |
| |||
KCAP Freedom 3 LLC(9)(13)(16) |
| Joint Venture |
| 7/19/2017 |
|
| 60 | % |
| $ | 27,414,858 |
|
| $ | 23,946,301 |
|
BCP Great Lakes Holdings LP(10)(17)(18)(23) |
| Joint Venture |
| 12/11/2018 |
|
| 24 | % |
|
| 43,143,519 |
|
|
| 43,682,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Total Investment in Joint Ventures |
|
|
|
|
|
| $ | 70,558,377 |
|
| $ | 67,629,114 |
|
Portfolio Company14 | Investment | Industry | Initial Acquisition Date | Cost |
|
| Fair Value2 |
|
| Footnote Refs | ||
HDNet Holdco LLC (Anthem) | Derivatives | Media: Broadcasting & Subscription | 9/9/19 | $ | 31 |
|
| $ | 8 |
|
| (12)(19) |
Advantage Capital Holdings LLC | Derivatives | Banking, Finance, Insurance & Real Estate | 4/14/22 |
| - |
|
|
| - |
|
| (12)(19) |
Coastal Screen and Rail, LLC | Derivatives | Construction & Building | 6/9/21 |
| - |
|
|
| - |
|
| (12)(19) |
Total Derivatives (0% of net asset value at fair value) |
|
|
| $ | 31 |
|
| $ | 8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Total Investments4 (227% of net asset value at fair value) |
|
|
| $ | 630,191 |
|
| $ | 571,656 |
|
|
|
Total Investments4 |
|
|
|
|
|
|
| $ | 601,987,885 |
|
| $ | 560,199,292 |
|
Description Payments made Payments received Counterparty Maturity date Notional amount Value Upfront payments/receipts Unrealized gain (loss) Securities Swap and Option Agreement 18% PIK 16% Cash Advantage Capital Holdings LLC. 9/15/24 $ 5,500,000 $ (2,000,145 ) $ - $ (2,000,145 ) Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Call option HDNet Holdco LLC 0.2 $ 7,656 $ 0.01 N/A $ 18,054 Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Put option Coastal Screen and Rail - $ 150,000 $ 400,000.00 8/31/2022 $ - See accompanying notes to unaudited consolidated financial statements. 13 ($ in thousands) Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Call option HDNet Holdco LLC 0.2 $ 8 0.01 N/A $ 8 Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Put option Coastal Screen and Rail - $ 150 400,000 10/31/22 $ - Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Put option Advantage Capital Holdings LLC 164 $ 0.16 20 5/13/23 $ - See accompanying notes to unaudited consolidated financial statements. 14 PORTMAN RIDGE FINANCE CORPORATION CONSOLIDATED SCHEDULE OF INVESTMENTS As of December 31, (in thousands, except share and per share amounts) Debt Securities Portfolio Portfolio Company14 Investment Industry Interest Rate Reference Rate and Spread1 Floor Maturity Initial Acquisition Date Par/ Shares Cost Fair Value2 Footnote Refs Senior Secured Loans Accordion Partners LLC Term Loan Finance 6.5% Cash L+5.50% 1.00% 9/24/27 9/24/21 11,172 $ 11,012 $ 11,019 (7)(12)(13) Accordion Partners LLC Delayed Draw Term Loan Finance 1.0% Cash 9/24/27 9/24/21 - (21 ) (38 ) (7)(12)(13)(20) Accordion Partners LLC Revolver Finance 0.5% Cash 9/24/27 9/24/21 - (75 ) (69 ) (7)(12)(20) Accurate Background, LLC Term Loan Services: Business 7.0% Cash L+6.00% 1.00% 3/26/27 10/20/21 3,000 2,741 2,760 (7)(12) Advantage Capital Holdings LLC Term Loan Banking, Finance, Insurance & Real Estate 5.0% Cash + 8.0% PIK 1/29/25 2/14/20 2,623 2,623 2,665 (7)(12)(13) Advantage Capital Holdings LLC Delayed Draw Term Loan Banking, Finance, Insurance & Real Estate 5.0% Cash + 8.0% PIK 1/29/25 2/14/20 2,969 2,969 3,017 (7)(12)(13) AIS Holdco, LLC First Lien Term Loan A Banking, Finance, Insurance & Real Estate 5.1% Cash L+5.00% 8/15/25 10/28/20 2,339 1,976 2,283 (7)(12)(13) AMCP Pet Holdings, Inc. First Lien Term Loan Beverage, Food and Tobacco 7.3% Cash L+6.25% 1.00% 10/6/26 12/9/20 4,950 4,869 4,950 (7)(12)(13) AMCP Pet Holdings, Inc. Delayed Draw Term Loan Beverage, Food and Tobacco 1.0% Cash 10/6/26 12/9/20 - (16 ) - (7)(12)(13)(20) AMCP Pet Holdings, Inc. Revolving Loan Beverage, Food and Tobacco 7.3% Cash L+6.25% 1.00% 10/6/26 12/9/20 675 658 675 (7)(12)(20) Analogic Corporation First Lien Term Loan A Electronics 6.3% Cash L+5.25% 1.00% 6/22/24 10/28/20 3,520 3,201 3,373 (7)(12)(13) Analogic Corporation Revolver Electronics 6.3% Cash L+5.25% 1.00% 6/22/23 10/28/20 116 116 107 (7)(12)(13)(20) Ancile Solutions, Inc. First Lien Term Loan High Tech Industries 8.0% Cash + 3.0% PIK L+7.00% 1.00% 6/11/26 6/11/21 7,021 6,836 6,873 (7)(12)(13) Anthem Sports & Entertainment Inc. Term Loan Media: Broadcasting & Subscription 7.8% Cash + 2.8% PIK 11/15/26 11/15/21 12,152 11,857 11,696 (7)(12)(13) Anthem Sports & Entertainment Inc. Revolver Media: Broadcasting & Subscription 10.5% Cash L+9.50% 1.00% 11/15/26 11/15/21 500 474 459 (7)(12)(20) AP Core Holdings II, LLC First Lien Term Loan Media: Diversified & Production 6.3% Cash L+5.50% 0.75% 7/21/27 7/21/21 1,975 1,947 1,978 (7)(13) AP Core Holdings II, LLC First Lien Term Loan Media: Diversified & Production 6.3% Cash L+5.50% 0.75% 7/21/27 7/21/21 2,000 1,972 2,006 (7)(13) Appfire Technologies, LLC Delayed Draw Term Loan High Tech Industries 0.5% Cash 3/9/27 7/7/21 - (16 ) (26 ) (7)(12)(13)(20) Appfire Technologies, LLC Term Loan High Tech Industries 6.5% Cash L+5.50% 1.00% 3/9/27 12/20/21 1,537 1,537 1,528 (7)(12)(13) Athos Merger Sub LLC First Lien Term Loan Services: Business 5.1% Cash L+5.00% 7/31/26 10/28/20 1,316 1,164 1,316 (7)(12)(13) BJ Services, LLC First Out Term Loan Energy: Oil & Gas 8.5% Cash L+7.00% 1.50% 1/3/23 10/28/20 371 348 371 (7)(12)(13) BMC Acquisition, Inc. Initial Term Loan Banking, Finance, Insurance & Real Estate 6.3% Cash L+5.25% 1.00% 12/28/24 1/2/18 2,692 2,691 2,692 (7)(12)(13) Bradshaw International Parent Corp. Term Loan Consumer goods: Durable 6.8% Cash L+5.75% 1.00% 10/21/27 10/29/21 506 493 493 (7)(12)(13) Bradshaw International Parent Corp. Revolver Consumer goods: Durable 6.8% Cash L+5.75% 1.00% 10/21/26 10/29/21 200 177 177 (7)(12)(20) Bristol Hospice Unitranche Healthcare & Pharmaceuticals 6.3% Cash L+5.25% 1.00% 12/22/26 12/22/20 2,156 2,121 2,156 (7)(12)(13) Bristol Hospice Delayed Draw Term Loan Healthcare & Pharmaceuticals 6.3% Cash L+5.25% 1.00% 12/22/26 12/22/20 625 619 625 (7)(12)(13)(20) C.P. Converters, Inc. Seventh Amendment Acquisition Loan Chemicals, Plastics and Rubber 7.5% Cash L+6.50% 1.00% 6/18/23 6/26/20 2,888 2,852 2,880 (7)(12)(13) C.P. Converters, Inc. Term Loan Chemicals, Plastics and Rubber 7.0% Cash L+6.00% 1.00% 6/18/23 7/29/21 1,114 1,100 1,103 (7)(12)(13) C.P. Converters, Inc. Term Loan Chemicals, Plastics and Rubber 7.0% Cash L+6.00% 1.00% 6/18/23 5/8/20 6,752 6,689 6,684 (7)(12)(13) CB Midco, LLC Term Loan Consumer goods: Durable 6.8% Cash L+5.75% 1.00% 9/27/27 10/8/21 3,990 3,951 3,950 (7)(12)(13) Centric Brands Inc. Revolver Machinery (Non-Agrclt/Constr/Electr) 6.5% Cash L+5.50% 1.00% 10/9/24 10/28/20 315 264 315 (7)(12)(13)(20) Centric Brands Inc. Term Loan Machinery (Non-Agrclt/Constr/Electr) 10.0% PIK 10/9/25 10/28/20 8,838 7,484 8,324 (7)(12)(13) Circustrix Holdings, LLC Term Loan Banking, Finance, Insurance & Real Estate 6.5% Cash + 2.5% PIK L+5.50% 1.00% 7/16/23 1/29/21 582 582 582 (7)(12)(13) Circustrix Holdings, LLC Delayed Draw Term Loan Banking, Finance, Insurance & Real Estate 9.0% Cash L+8.00% 1.00% 7/16/23 1/11/21 576 576 576 (7)(12)(13) Circustrix Holdings, LLC Term Loan Banking, Finance, Insurance & Real Estate 6.5% Cash + 2.5% PIK L+5.50% 1.00% 1/26/24 10/1/21 6,637 5,586 5,676 (7)(12)(13) Coastal Screen and Rail, LLC First Lien Term Loan Construction & Building 12.0% Cash 1/24/23 6/9/21 1,750 1,665 1,741 (7)(12) Critical Nurse Staffing, LLC Delayed Draw Term Loan Healthcare & Pharmaceuticals 7.0% Cash L+6.00% 1.00% 11/1/26 11/1/21 637 605 605 (7)(12)(13)(20) Critical Nurse Staffing, LLC Term Loan Healthcare & Pharmaceuticals 7.0% Cash L+6.00% 1.00% 11/1/26 11/1/21 8,248 8,109 8,104 (7)(12)(13) Critical Nurse Staffing, LLC Revolver Healthcare & Pharmaceuticals 0.5% Cash 11/1/26 11/1/21 - (35 ) (35 ) (7)(12)(20) Datalink, LLC Delayed Draw Term Loan (First Lien) Healthcare & Pharmaceuticals 1.0% Cash 11/23/26 11/23/20 - (12 ) - (7)(12)(20) Datalink, LLC First Lien Term Loan Healthcare & Pharmaceuticals 7.3% Cash L+6.25% 1.00% 11/23/26 11/23/20 2,826 2,763 2,826 (7)(12)(13) Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) EUR Term Loan A High Tech Industries 5.0% PIK 5/11/22 5/11/20 261 302 256 (12) Drilling Info Holdings, Inc. Initial Term Loan (First Lien) High Tech Industries 4.4% Cash L+4.25% 7/30/25 6/27/19 822 822 817 (7)(12)(13) Drilling Info Holdings, Inc. 2020 Term Loan (First Lien) High Tech Industries 4.6% Cash L+4.50% 7/30/25 2/14/20 983 979 985 (7)(12)(13) Portfolio Company / Investment Initial Principal Amortized Fair Value2 1A Smart Start LLC (8)(14)(21) Senior Secured Loan — First Lien Term Loan 10/28/2020 $ 2,094,750 $ 1,837,151 $ 2,102,176 Advanced Lighting Technologies, Inc. (5)(8)(13) Junior Secured Loan — Second Lien Notes, 10.0% PIK, 3 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 10/23 6/13/2012 1,464,432 951,271 3,075 Advantage Capital Holdings LLC (8)(13)(14)(21) Senior Secured Loan — Term Loan 2/14/2020 2,422,152 2,422,152 2,425,301 Advantage Capital Holdings LLC (8)(13)(21) Senior Secured Loan — Delayed Draw Term Loan 2/14/2020 1,735,880 1,735,880 1,738,137 Advantage Capital Holdings LLC (8)(13)(21) Senior Secured Loan — Delayed Draw Term Loan 2/14/2020 - - 1,353 AIS Holdco, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 2,562,205 2,054,605 2,341,855 Allied Universal Holdco LLC (8)(14)(21) Senior Secured Loan — Initial Term Loan 3/23/2020 5,156,518 4,229,619 5,142,312 AMCP Pet Holdings, Inc. (8)(13)(14)(21) Senior Secured Loan — Delayed Draw Term Loan 12/9/2020 - (19,849 ) (20,000 ) AMCP Pet Holdings, Inc. (8)(13)(14)(21) Senior Secured Loan — First Lien Term Loan 12/9/2020 5,000,000 4,900,755 4,900,000 AMCP Pet Holdings, Inc. (8)(13)(21) Senior Secured Loan — Revolving Loan 12/9/2020 - (19,972 ) (20,000 ) See accompanying notes to unaudited consolidated financial statements. 15 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Analogic Corporation (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 - 0 (3,033 ) Analogic Corporation (8)(13)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 3,555,811 3,103,457 3,502,474 Anthem Sports & Entertainment Inc. (8)(13)(14)(21) Senior Secured Loan — Term Loan 9/9/2019 3,592,120 3,495,363 3,486,871 Anthem Sports & Entertainment Inc. (8)(13)(21) Senior Secured Loan — Revolving Loan 9/9/2019 416,667 385,912 384,925 Ascensus Specialties LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 1,703,780 1,435,922 1,697,135 Athos Merger Sub LLC (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 1,329,088 1,142,784 1,312,474 BJ Services, LLC (8)(13)(14) Senior Secured Loan — First Out Term Loan 10/28/2020 3,573,631 3,094,158 3,540,397 BMC Acquisition, Inc. (8)(13)(14) Senior Secured Loan — Initial Term Loan 1/2/2018 2,910,000 2,909,020 2,878,863 Bristol Hospice (8)(13)(14)(21) Senior Secured Loan — Delayed Draw Term Loan 12/22/2020 - (8,182 ) (8,219 ) Bristol Hospice (8)(13)(14)(21) Senior Secured Loan — Unitranche 12/22/2020 2,178,082 2,134,719 2,134,521 C.P. Converters, Inc. (8)(13)(14) Senior Secured Loan — Seventh Amendment Acquisition Loan 6/26/2020 2,962,500 2,901,315 2,918,063 Carestream Health, Inc. (8)(13)(14) Junior Secured Loan — 2023 Extended Term Loan (Second Lien) 5/8/2020 1,629,516 1,454,610 1,394,866 Portfolio Company14 Investment Industry Interest Rate Reference Rate and Spread1 Floor Maturity Initial Acquisition Date Par/ Shares Cost Fair Value2 Footnote Refs ELO Touch Solutions, Inc. First Lien Term Loan High Tech Industries 6.6% Cash L+6.50% 12/14/25 10/28/20 2,440 2,149 2,448 (7)(13) Global Integrated Flooring Systems Inc. First Lien Term Loan Consumer goods: Durable 9.5% Cash L+8.25% 1.25% 2/15/23 10/28/20 6,300 5,104 3,513 (7)(12) Global Integrated Flooring Systems Inc. Revolver Consumer goods: Durable 0.8% Cash 2/15/23 10/28/20 - - (19 ) (7)(12)(20) Grupo HIMA San Pablo, Inc. Term B Loan (First Lien) Healthcare & Pharmaceuticals 10.5% Cash L+9.00% 1.50% 8/1/21 1/30/13 2,437 2,437 360 (5)(7)(12)(13) Grupo HIMA San Pablo, Inc. Delayed Draw Term Loan Healthcare & Pharmaceuticals 12.0% Cash 12/24/21 11/24/21 88 88 88 (7)(12)(20) Grupo HIMA San Pablo, Inc. Term Loan Healthcare & Pharmaceuticals 10.5% Cash L+9.00% 1.50% 12/24/21 11/24/21 265 265 265 (5)(7)(12)(13) H.W. Lochner, Inc. Term Loan Services: Business 7.3% Cash L+6.25% 1.00% 7/2/27 7/2/2021 14,963 14,688 14,795 (7)(12)(13) H.W. Lochner, Inc. Revolver Services: Business 7.0% Cash L+6.25% 1.00% 7/2/27 7/2/21 5,801 5,654 5,711 (7)(12)(20) H-CA II, LLC Term Loan Banking, Finance, Insurance & Real Estate 19.0% Cash 2/16/24 2/16/21 2,000 2,000 2,000 (7)(12) HDC/HW Intermediate Holdings, LLC First Lien Term Loan A High Tech Industries 8.5% Cash L+7.50% 1.00% 12/21/23 10/28/20 6,547 5,847 5,490 (7)(12)(13) HDC/HW Intermediate Holdings, LLC Revolver High Tech Industries 8.5% Cash L+7.50% 1.00% 12/21/23 10/28/20 670 598 562 (7)(12)(13) Infobase Holdings, Inc. Term Loan High Tech Industries 5.5% Cash L+4.50% 1.00% 12/20/22 12/13/17 1,769 1,765 1,764 (7)(12)(13) Infobase Holdings, Inc. Term Loan (add on) High Tech Industries 5.5% Cash L+4.50% 1.00% 12/20/22 12/13/17 1,875 1,871 1,871 (7)(12)(13) Intermedia Holdings, Inc. First Lien Term Loan B High Tech Industries 7.0% Cash L+6.00% 1.00% 7/21/25 10/28/20 2,668 2,401 2,655 (7)(13) JO ET Holdings Limited Term Loan Telecommunications 7.0% Cash + 7.0% PIK L+6.00% 1.00% 12/15/26 12/15/21 2,000 1,960 1,960 (3)(12) Keeco, LLC Term Loan Consumer goods: Durable 9.5% Cash + 0.8% PIK L+7.75% 1.75% 3/15/24 10/1/21 5,553 4,994 5,172 (7)(12)(13) Keg Logistics LLC Term Loan Services: Business 7.0% Cash L+6.00% 1.00% 11/23/27 11/23/21 12,244 12,064 12,061 (7)(12)(13) Keg Logistics LLC Revolver Services: Business 0.5% Cash 11/23/27 11/23/21 - (13 ) (13 ) (7)(12)(20) Lifescan Global Corporation First Lien Term Loan A Healthcare & Pharmaceuticals 6.1% Cash L+6.00% 10/1/24 10/28/20 2,970 2,594 2,910 (7)(13) Lucky Bucks, LLC Term Loan Hotel, Gaming & Leisure 6.3% Cash L+5.50% 0.75% 7/21/27 7/20/21 5,000 4,906 4,898 (7)(12)(13) Luminii LLC First Lien Term Loan B Construction & Building 7.3% Cash L+6.25% 1.00% 4/11/23 10/28/20 7,062 6,564 7,020 (7)(12)(13) Luminii LLC Revolver Construction & Building 7.3% Cash L+6.25% 1.00% 4/11/23 10/28/20 343 319 340 (7)(12)(13)(20) MAG DS Corp. First Lien Term Loan Aerospace and Defense 6.5% Cash L+5.50% 1.00% 4/1/27 10/28/20 3,812 3,280 3,600 (7)(12)(13) Marble Point Credit Management LLC Term Loan Banking, Finance, Insurance & Real Estate 7.0% Cash L+6.00% 1.00% 8/11/28 8/11/21 5,801 5,651 5,656 (12)(13) Marble Point Credit Management LLC Revolver Banking, Finance, Insurance & Real Estate 0.5% Cash 8/11/28 8/11/21 - (25 ) (63 ) (12)(20) Maxor National Pharmacy Services, LLC Revolver Healthcare & Pharmaceuticals 0.5% Cash 11/22/22 10/28/20 - - - (7)(12)(13)(20) Maxor National Pharmacy Services, LLC Term Loan Healthcare & Pharmaceuticals 6.5% Cash L+5.50% 1.00% 12/6/27 12/6/21 8,098 7,402 8,098 (7)(12)(13) Mother's Market & Kitchen, Inc. First Lien Term Loan Healthcare & Pharmaceuticals 6.8% Cash L+5.50% 1.00% 7/26/23 10/28/20 6,491 5,987 6,491 (7)(12)(13) MSM Acquisitions, Inc. Delayed Draw Term Loan (First Lien) Services: Business 7.0% Cash L+6.00% 1.00% 6/9/22 12/31/20 2,915 2,918 2,915 (7)(12)(13) MSM Acquisitions, Inc. First Lien Term Loan Services: Business 7.0% Cash L+6.00% 1.00% 12/9/26 12/31/20 6,988 6,916 6,988 (7)(12)(13) Nasco Healthcare Inc. Term Loan Consumer goods: Non-durable 6.5% Cash L+5.50% 1.00% 6/30/23 5/22/20 4,264 4,162 4,197 (7)(12)(13) Naviga Inc. First Lien Term Loan Services: Business 8.0% Cash L+7.00% 1.00% 12/29/22 10/28/20 5,000 4,674 4,923 (7)(12)(13) Naviga Inc. Delayed Draw Term Loan Services: Business 8.0% Cash L+7.00% 1.00% 12/29/22 10/28/20 457 427 450 (7)(12)(13) Naviga Inc. Revolver Services: Business 8.0% Cash L+7.00% 1.00% 12/29/22 10/28/20 384 339 373 (7)(12)(13)(20) Naviga Inc. Term Loan Services: Business 8.0% Cash L+7.00% 1.00% 12/29/22 3/1/21 712 702 701 (7)(12) Naviga Inc. Delayed Draw Term Loan Services: Business 8.0% Cash L+7.00% 1.00% 12/29/22 3/1/21 756 751 744 (7)(12) Northeast Metal Works LLC Term Loan Metals & Mining 8.0% Cash + 2.0% PIK 12/31/21 10/1/21 14,074 14,085 12,280 (7)(12)(17) One Stop Mailing LLC First Lien Term Loan Transportation: Consumer 7.3% Cash L+6.25% 1.00% 4/29/27 5/7/21 7,937 7,795 7,837 (7)(12)(13) Orbit Purchaser LLC Delayed Draw Term Loan Banking, Finance, Insurance & Real Estate 5.5% Cash L+4.50% 1.00% 10/21/24 10/28/20 738 667 731 (7)(12)(13) Orbit Purchaser LLC First Lien Term Loan Banking, Finance, Insurance & Real Estate 5.5% Cash L+4.50% 1.00% 10/19/24 10/28/20 2,522 2,277 2,500 (7)(12)(13) Orbit Purchaser LLC Incremental First Lien Term Loan Banking, Finance, Insurance & Real Estate 5.5% Cash L+4.50% 1.00% 10/21/24 10/28/20 1,524 1,378 1,511 (7)(12)(13) Pomeroy Technologies, LLC Senior Term Loan A High Tech Industries 5.0% PIK 5/29/25 5/29/20 1,543 1,240 1,207 (7)(12) Pomeroy Technologies, LLC Senior Term Loan B High Tech Industries 7.0% PIK 5/29/25 5/29/20 1,593 1,290 499 (5)(7)(12) Pomeroy Technologies, LLC Super Senior Term Loan B High Tech Industries 2.0% Cash + 7.0% PIK 5/29/25 5/29/20 1,030 1,017 994 (7)(12) Pomeroy Technologies, LLC Term Loan High Tech Industries 2.0% Cash + 8.0% PIK 5/29/25 9/10/21 48 48 48 (7)(12) Premier Imaging, LLC Term Loan Healthcare & Pharmaceuticals 7.0% Cash L+6.00% 1.00% 1/2/25 12/30/21 2,063 2,043 2,043 (7)(12)(13) Premier Imaging, LLC Delayed Draw Term Loan Healthcare & Pharmaceuticals 1.0% Cash 1/2/25 12/30/21 - (19 ) (19 ) (7)(12)(13)(20) Priority Holdings, LLC First Lien Term Loan High Tech Industries 6.8% Cash L+5.75% 1.00% 4/22/27 4/21/21 7,742 7,671 7,665 (7)(12)(13) PVHC Holding Corp Initial Term Loan Containers, Packaging and Glass 5.8% Cash L+4.75% 1.00% 8/3/24 8/10/18 2,786 2,780 2,571 (7)(12)(13) Q Holding Company (fka Lex Precision Corp) First Lien Term Loan Chemicals, Plastics and Rubber 6.0% Cash L+5.00% 1.00% 12/29/23 10/28/20 2,355 2,050 2,302 (7)(12)(13) Qualtek USA, LLC First Lien Term Loan High Tech Industries 7.3% Cash L+6.25% 1.00% 7/18/25 10/28/20 5,510 4,635 5,449 (7)(13) See accompanying notes to unaudited consolidated financial statements. Portfolio Company / Investment Initial Principal Amortized Fair Value2 Centric Brands Inc. (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 403,134 333,931 367,420 Centric Brands Inc. (8)(13)(14)(20) Senior Secured Loan — First Lien Last Out Term Loan, 10.0% PIK, Due 10/25 10/28/2020 7,989,577 6,378,529 6,825,496 Child Development Schools, Inc. (8)(13)(14) Senior Secured Loan — Term Loan 6/6/2018 4,246,226 4,241,127 4,198,243 Chloe Ox Parent, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 1,837,439 1,552,347 1,752,917 Circustrix Holdings, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan B, 7.8% PIK, Due 1/22 10/28/2020 6,319,500 4,455,164 4,194,884 Coinamatic Canada Inc. (3)(13)(14) Junior Secured Loan — Initial Canadian Term Loan (Second Lien) 12/18/2019 521,646 467,075 487,217 Colibri Group, LLC (8)(13)(14)(20)(21) Senior Secured Loan — Last out DDTL 3/31/2020 932,983 927,022 932,983 Colibri Group, LLC (8)(13)(14)(20)(21) Senior Secured Loan — Last Out Term Loan 3/31/2020 6,033,990 5,995,440 6,033,990 Colibri Group, LLC (8)(13)(14)(20)(21) Senior Secured Loan — Last Out Second Amendment TL 3/31/2020 690,407 685,996 690,407 Convergeone Holdings Corp. (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,168,026 1,740,712 2,054,204 CSM Bakery Solutions Limited (fka CSM Bakery Supplies Limited) (8)(14) Senior Secured Loan — Term Loan (First Lien) 6/11/2020 1,265,625 1,248,537 1,251,577 CSM Bakery Solutions Limited (fka CSM Bakery Supplies Limited) (8)(13)(14) Junior Secured Loan — Term Loan (Second Lien) 6/11/2020 3,083,490 3,086,814 2,988,519 16 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Datalink, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan 11/23/2020 2,975,000 2,894,347 2,893,188 Datalink, LLC (8)(13) Senior Secured Loan — Delayed Draw Term Loan (First Lien) 11/23/2020 - (14,180 ) (14,438 ) Deliver Buyer, Inc. (8)(13)(14) Senior Secured Loan — Incremental Term Loan (First Lien) 7/1/2020 2,892,750 2,816,722 2,872,790 Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) (5)(8)(13) Senior Secured Loan — Senior Term Loan B, 7.0% PIK, Due 5/25 5/29/2020 1,484,979 1,092,213 748,132 Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) (8)(13) Senior Secured Loan — Super Senior Term Loan B 5/29/2020 959,944 943,862 940,745 Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) (3)(13) Senior Secured Loan — EUR Term Loan A, 5.0% PIK, Due 7/25 5/11/2020 324,350 285,676 268,222 Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.) (8)(13) Senior Secured Loan — Senior Term Loan A, 5.0% PIK, Due 5/25 5/29/2020 1,467,506 1,074,740 1,063,942 DMT Solutions Global Corporation (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,381,442 5,158,548 6,142,138 Drilling Info Holdings, Inc. (8)(14)(21) Senior Secured Loan — 2019 Delayed Draw Term Loan (First Lien) 6/27/2019 - (1,375 ) (10,621 ) Drilling Info Holdings, Inc. (8)(14)(21) Senior Secured Loan — Initial Term Loan (First Lien) 6/27/2019 465,621 465,621 452,042 Drilling Info Holdings, Inc. (8)(13)(14)(21) Senior Secured Loan — 2020 Term Loan (First Lien) 2/14/2020 992,500 988,340 947,838 Electronics for Imaging, Inc. (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,181,735 1,639,163 1,875,605 ELO Touch Solutions, Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,665,527 2,267,328 2,632,741 Portfolio Company14 Investment Industry Interest Rate Reference Rate and Spread1 Floor Maturity Initial Acquisition Date Par/ Shares Cost Fair Value2 Footnote Refs Radiology Partners, Inc Term B Loan (First Lien) Healthcare & Pharmaceuticals 4.4% Cash L+4.25% 7/9/25 3/24/20 7,000 6,089 6,912 (7)(13) Radius Aerospace, Inc. Initial Term Loan Aerospace and Defense 6.8% Cash L+5.75% 1.00% 3/29/25 6/27/19 6,576 6,520 6,257 (7)(12)(13) Ritedose Holdings I, INC First Lien Term Loan Healthcare & Pharmaceuticals 7.5% Cash L+6.50% 1.00% 9/13/23 10/28/20 6,496 5,975 6,496 (7)(12)(13) Ritedose Holdings I, INC Revolver Healthcare & Pharmaceuticals 0.5% Cash 9/13/23 10/28/20 - - - (7)(12)(13)(20) Rotolo Consultants, INC. Term Loan Services: Consumer 9.0% Cash L+8.00% 1.00% 12/20/26 12/20/21 1,000 990 990 (7)(12) San Vicente Capital LLC Term Loan Telecommunications 9.5% Cash L+8.00% 1.50% 6/10/25 6/10/20 2,190 2,167 2,198 (7)(12)(13) Shipston Group, U.S., Inc. First Lien Term Loan Automotive 7.0% Cash + 2.0% PIK L+5.75% 1.25% 9/28/23 10/28/20 404 347 373 (7)(12)(13) Shipston Group, U.S., Inc. Term Loan Automotive 7.5% Cash + 2.3% PIK L+5.75% 1.25% 9/28/23 10/1/21 6,052 5,519 5,588 (7)(12)(13) South Street Securities Holdings, Inc Initial Term Loan Banking, Finance, Insurance & Real Estate 9.0% Cash L+8.00% 1.00% 3/24/26 3/24/21 7,000 6,852 6,870 (7)(12)(13) Sundance Holdings Group, LLC Term Loan Retail 7.0% Cash L+6.00% 1.00% 5/1/24 10/1/21 6,792 6,144 6,775 (7)(12)(13) Surge Busy Bee Holdings LLC First Lien Term Loan A Services: Business 10.1% Cash L+10.00% 11/16/22 6/9/21 3,331 3,147 3,305 (7)(12) Surge Busy Bee Holdings LLC First Lien Term Loan B Services: Business 12.0% Cash + 2.0% PIK 11/16/22 6/9/21 3,540 3,278 3,438 (7)(12) Surge Hippodrome Holdings LLC Last Out Term Loan Services: Business 13.5% Cash L+11.50% 2.00% 8/1/24 6/9/21 5,460 4,925 5,160 (7)(12)(17) TA/WEG Holdings, LLC Revolver Banking, Finance, Insurance & Real Estate 6.8% Cash L+5.75% 1.00% 10/2/27 10/1/21 193 190 187 (7)(12)(20) TA/WEG Holdings, LLC Delayed Draw Term Loan Banking, Finance, Insurance & Real Estate 6.8% Cash L+5.75% 1.00% 10/2/2027 10/1/21 4,257 4,238 4,169 (7)(12)(20) Tailwind Randys, LLC Initial Term Loan Automotive 6.5% Cash L+5.50% 1.00% 5/16/25 6/27/19 4,875 4,826 4,828 (7)(12)(13) TLE Holdings, LLC Initial Term Loan Healthcare, Education and Childcare 6.5% Cash L+5.50% 1.00% 6/28/24 6/27/19 5,573 5,560 5,541 (7)(12)(13) TLE Holdings, LLC Delayed Draw Term Loan Healthcare, Education and Childcare 6.5% Cash L+5.50% 1.00% 6/28/24 6/27/19 735 734 731 (7)(12)(13)(20) Triangle Home Fashions LLC First Lien Term Loan Consumer goods: Durable 6.8% Cash L+5.75% 1.00% 3/9/23 10/28/20 10,500 9,808 10,500 (7)(12)(13) TronAir Parent Inc. Initial Term Loan (First Lien) Aerospace and Defense 6.8% Cash + 0.5% PIK L+5.75% 1.00% 9/8/23 9/30/16 921 919 856 (7)(12)(13) VTK Acquisition, Inc. Revolver Capital Equipment 6.8% Cash L+6.50% 3/31/22 6/9/21 1,536 1,504 1,531 (7)(12)(17) VTK Acquisition, Inc. First Lien Term Loan Capital Equipment 8.3% Cash L+8.00% 3/31/22 6/9/21 2,625 2,519 2,598 (7)(12)(17) Wonder Love, Inc. Term Loan Media: Diversified & Production 6.0% Cash L+5.00% 1.00% 11/18/24 11/18/19 2,381 2,354 2,381 (7)(12)(13) Total Senior Secured Loans (130% of net asset value at fair value) $ 361,556 $ 364,701 Senior Unsecured Bond Tank Partners Equipment Holdings LLC 10.00% - 02/2022 - TankConvert Energy: Oil & Gas 2/15/22 2/15/19 511 416 43 (5)(7)(8)(12) Total Senior Unsecured Bond (0% of net asset value at fair value) $ 416 $ 43 Junior Secured Loans Carestream Health, Inc. 2023 Extended Term Loan (Second Lien) Healthcare & Pharmaceuticals 5.5% Cash + 8.0% PIK L+4.50% 1.00% 8/8/23 5/8/20 1,766 1,658 1,752 (7)(12)(13) Confluence Technologies, Inc. Term Loan Second Lien Services: Business 7.0% Cash L+6.50% 0.50% 7/23/29 7/22/21 4,000 3,971 3,980 (7)(12) DCert Buyer, Inc. Term Loan (Second Lien) High Tech Industries 7.1% Cash L+7.00% 2/16/29 3/16/21 5,400 5,388 5,422 (7)(13) Firstlight Holdco Inc. Initial Term Loan (Second Lien) Telecommunications 7.6% Cash L+7.50% 7/23/26 12/18/19 400 369 400 (7)(12)(13) Global Tel*Link Corporation Term Loan (Second Lien) Telecommunications 8.4% Cash L+8.25% 11/29/26 5/21/13 1,500 1,484 1,405 (7)(13) Grupo HIMA San Pablo, Inc. Term Loan (Second Lien) Healthcare & Pharmaceuticals 13.8% Cash 7/31/18 1/30/13 7,192 7,192 - (5)(7)(12) Helix Acquisition Holdings, Inc. Initial Term Loan (Second Lien) Metals & Mining 8.2% Cash L+8.00% 9/29/25 12/18/19 1,400 1,257 1,367 (7)(13) Hoffmaster Group, Inc. Initial Term Loan (Second Lien) Forest Products & Paper 10.5% Cash L+9.50% 1.00% 11/21/24 5/6/14 1,600 1,583 1,271 (7)(12)(13) Idera, Inc. Term Loan (Second Lien) High Tech Industries 7.5% Cash L+6.75% 0.75% 2/4/29 4/29/21 6,000 5,945 5,970 (7)(12)(13) Ivanti Software, Inc. Term Loan Second Lien High Tech Industries 7.8% Cash L+7.25% 0.50% 12/1/28 10/26/21 2,000 1,990 2,005 (7)(13) Ministry Brands, LLC April 2018 Incremental Term Loan (Second Lien) Services: Business 9.0% Cash L+8.00% 1.00% 6/2/23 12/18/19 6,000 5,739 5,913 (7)(12)(13) Navex Topco, Inc. Initial Term Loan (Second Lien) Electronics 7.1% Cash L+7.00% 9/4/26 12/4/18 7,700 7,307 7,609 (7)(13)(17) Phoenix Guarantor Inc. Term Loan Second Lien Healthcare & Pharmaceuticals 9.5% Cash L+8.50% 1.00% 3/5/27 12/18/19 1,200 1,116 1,200 (7)(12)(13) ProAir Holdings Corporation Term Loan Second Lien Capital Equipment 13.5% Cash + 2.0% PIK 12/26/22 10/1/21 7,856 5,058 1,733 (5)(7)(12) ProAir Holdings Corporation Term Loan Second Lien Capital Equipment 13.5% Cash L+11.50% 2.00% 9/25/22 12/21/21 357 357 357 (7)(12) See accompanying notes to unaudited consolidated financial statements. 17 Portfolio Company14 Investment Industry Interest Rate Reference Rate and Spread1 Floor Maturity Initial Acquisition Date Par/ Shares Cost Fair Value2 Footnote Refs ProAir Holdings Corporation Term Loan Second Lien Capital Equipment 13.5% Cash L+11.50% 2.00% 9/25/22 12/30/21 214 214 214 (7)(12) Redstone Holdco 2 LP Term Loan (Second Lien) High Tech Industries 8.5% Cash L+7.75% 0.75% 4/16/29 4/16/21 4,566 4,488 4,235 (7)(12)(13) Robertshaw US Holding Corp. Initial Term Loan (Second Lien) Capital Equipment 9.0% Cash L+8.00% 1.00% 2/28/26 2/15/18 3,000 2,984 2,549 (7)(12) Roscoe Medical, Inc. Term Loan (Second Lien) Healthcare & Pharmaceuticals 11.3% Cash 3/28/22 3/26/14 8,202 8,200 7,894 (7)(12) Safe Fleet Holdings LLC Initial Term Loan (Second Lien) Automotive 7.8% Cash L+6.75% 1.00% 2/2/26 12/18/19 700 639 698 (7)(13) Tex-Tech Industries, Inc. Term Loan (Second Lien) Textiles and Leather 12.5% Cash + 1.5% PIK L+11.50% 1.00% 8/24/24 8/24/17 12,615 12,496 11,095 (7)(12)(13) TRSO II, Inc. Promissory Note Energy: Oil & Gas 1.7% PIK 1/24/25 1/24/20 73 73 - (5)(7)(12) Zest Acquisition Corp. Initial Term Loan (Second Lien) Healthcare, Education and Childcare 8.0% Cash L+7.00% 1.00% 3/13/26 3/8/18 3,500 3,488 3,480 (7)(12)(13)(17) Total Junior Loans (25% of net asset value at fair value) $ 82,996 $ 70,549 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Emtec, Inc. (8)(13) Senior Secured Loan — First Lien Term Loan A 10/28/2020 2,395,175 2,138,552 2,377,690 Emtec, Inc. (5)(8)(13) Senior Secured Loan — First Lien Term Loan B, 10.3% PIK, Due 8/21 10/28/2020 1,734,498 1,394,239 1,620,368 Energy Acquisition Lp (14) Senior Secured Loan — First Lien Term Loan 10/28/2020 4,887,218 3,940,620 4,752,820 Ensono, LP (8)(13)(14) Junior Secured Loan — Term Loan (Second Lien) 12/18/2019 1,700,000 1,530,845 1,648,660 Evergreen North America Acquisition, LLC (8)(13)(14) Senior Secured Loan — Term Loan 6/21/2016 975,366 976,863 963,174 Firstlight Holdco Inc. (8)(13)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 12/18/2019 400,000 362,000 383,000 Fusion Connect, Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan B 10/28/2020 2,964,925 1,730,558 1,885,989 Geo Parent Corporation (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 3,290,011 2,830,592 3,170,254 GI Revelation Acquisition LLC (8)(13)(14)(21) Senior Secured Loan — Initial Term Loan (First Lien) 5/22/2020 3,902,444 3,490,451 3,629,663 GK Holdings, Inc. (5)(8)(13) Junior Secured Loan — Initial Term Loan (Second Lien) 1/30/2015 1,500,000 1,495,464 839,100 Global Integrated Flooring Systems Inc. (8)(13) Senior Secured Loan — Revolver 10/28/2020 - (0 ) (42,857 ) Global Integrated Flooring Systems Inc. (8)(13) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,412,500 4,110,863 3,851,348 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Global Tel*Link Corporation (8)(14) Junior Secured Loan — Loan (Second Lien) 5/21/2013 1,500,000 1,481,015 1,062,000 Gruden Acquisition, Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,414,315 2,071,047 2,404,658 Grupo HIMA San Pablo, Inc. (8)(13)(14) Senior Secured Loan — Term B Loan (First Lien) 1/30/2013 2,702,232 2,702,232 2,418,498 Grupo HIMA San Pablo, Inc. (5)(8)(13) Junior Secured Loan — Term Loan (Second Lien) 1/30/2013 7,191,667 7,191,667 199,209 Hayward Industries, Inc. (8)(13)(14) Junior Secured Loan — Initial Loan (Second Lien) 12/18/2019 2,159,333 1,893,917 2,107,077 HDC/HW Intermediate Holdings, LLC (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 669,722 561,785 632,486 HDC/HW Intermediate Holdings, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 6,596,764 5,533,583 6,229,984 Helix Acquisition Holdings, Inc. (8)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 12/18/2019 1,400,000 1,219,188 1,326,500 Hoffmaster Group, Inc. (8)(13)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 5/6/2014 1,600,000 1,576,633 1,270,880 Holley Purchaser, Inc. (8)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 6,487,528 5,528,001 6,339,547 Idera, Inc. (8)(13)(14)(21) Junior Secured Loan — Loan (Second Lien) 6/27/2019 7,500,000 7,408,450 7,344,000 Infobase Holdings, Inc. (8)(13)(14) Senior Secured Loan — Term Loan 12/13/2017 1,850,000 1,841,858 1,850,000 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Infobase Holdings, Inc. (8)(13)(14) Senior Secured Loan — Term Loan (add on) 12/13/2017 1,961,372 1,952,741 1,961,373 Institutional Shareholder Services Inc. (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 4,769,657 4,022,186 4,751,771 Intermedia Holdings, Inc. (8)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 2,695,439 2,349,230 2,693,336 Janus International Group, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan B 10/28/2020 2,193,340 1,889,233 2,152,544 Keeco, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 5,627,336 4,717,415 5,571,062 Lifescan Global Corporation (8)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 3,233,554 2,674,220 3,089,063 Location Services Holdings, LLC (8)(13)(14)(21) Senior Secured Loan — Revolving Credit 11/7/2019 2,291,667 2,270,203 2,197,917 Luminii LLC (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 343,473 300,180 326,729 Luminii LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan B 10/28/2020 7,134,945 6,235,604 6,903,059 Mag Ds Corp. (8)(13)(14)(21) Senior Secured Loan — First Lien Term Loan 10/28/2020 3,990,000 3,327,258 3,803,268 Maxor National Pharmacy Services, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan B 10/28/2020 8,532,796 7,439,057 8,453,441 Maxor National Pharmacy Services, LLC (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 - (0 ) (5,441 ) Portfolio Company / Investment Initial Principal Amortized Fair Value2 McNally Industries, LLC (8)(13) Senior Secured Loan — Delayed Draw Term Loan (First Lien) 10/28/2020 49,147 42,989 49,024 McNally Industries, LLC (8)(13) Senior Secured Loan — Revolver 10/28/2020 - (5,507 ) (125 ) McNally Industries, LLC (8)(13) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,770,625 5,922,332 6,753,698 Ministry Brands, LLC (8)(13)(14) Junior Secured Loan — April 2018 Incremental Term Loan (Second Lien) 12/18/2019 6,000,000 5,555,131 5,722,800 Mother's Market & Kitchen, Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,954,470 6,070,606 6,841,807 MountainTop Financial, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan A 10/28/2020 6,379,954 5,584,923 6,353,158 MSM Acquisitions, Inc. (8)(13)(14) Senior Secured Loan — Delayed Draw Term Loan (First Lien) 12/31/2020 - 7,339 7,353 MSM Acquisitions, Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 12/31/2020 7,058,824 6,970,629 6,970,588 Nasco Healthcare Inc. (8)(13)(14)(21) Senior Secured Loan — Term Loan 5/22/2020 4,509,119 4,220,080 4,285,015 Navex Topco, Inc. (8)(13)(14)(18)(21) Junior Secured Loan — Initial Term Loan (Second Lien) 12/4/2018 7,700,000 7,222,712 7,488,250 Naviga Inc. (8)(13)(14) Senior Secured Loan — Delayed Draw Term Loan 10/28/2020 461,859 401,461 455,532 Naviga Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 411,227 321,598 401,837 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Naviga Inc. (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 5,050,283 4,389,994 4,981,094 Novetta Solutions, LLC (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 1,943,730 1,677,869 1,939,678 Orbit Purchaser LLC (8)(13)(14) Senior Secured Loan — Incremental First Lien Term Loan 10/28/2020 1,539,869 1,339,929 1,527,242 Orbit Purchaser LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,548,122 2,211,950 2,527,227 Orbit Purchaser LLC (8)(13)(14) Senior Secured Loan — Delayed Draw Term Loan 10/28/2020 745,098 648,353 738,988 Phoenix Guarantor Inc. (8)(13)(14) Junior Secured Loan — Term Loan Second Lien 12/18/2019 1,200,000 1,100,239 1,179,480 Pinstripe Holdings, LLC (8)(13)(14) Senior Secured Loan — Initial Term Loan 1/17/2019 4,912,500 4,845,938 4,620,206 PromptCare Companies, The (8)(13)(14)(21) Senior Secured Loan — Second Delayed Draw Term Loan 2/20/2020 - (2,326 ) (4,091 ) PromptCare Companies, The (8)(13)(14)(21) Senior Secured Loan — Term Loan 2/20/2020 3,870,000 3,837,015 3,840,975 PromptCare Companies, The (8)(13)(14) Senior Secured Loan — First Delayed Draw Term Loan 2/20/2020 540,000 535,398 535,950 PSC Industrial Holdings Corp. (8)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 10/5/2017 3,000,000 2,962,901 2,622,495 PVHC Holding Corp (8)(13)(14) Senior Secured Loan — Initial Term Loan 8/10/2018 2,815,200 2,806,740 2,502,994 Q Holding Company (fka Lex Precision Corp) (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,379,005 1,917,038 2,234,599 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Qualtek USA, LLC (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 5,660,358 4,507,974 5,358,491 RA Outdoors, LLC (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 7,206,556 6,272,077 7,139,535 Radiology Partners, Inc (8)(14)(21) Senior Secured Loan — Term B Loan (First Lien) 3/24/2020 7,000,000 5,845,451 6,900,845 Radius Aerospace, Inc. (8)(13)(14) Senior Secured Loan — Initial Term Loan 6/27/2019 6,877,500 6,801,385 6,351,371 Ravn Air Group, Inc. (5)(8)(13) Senior Secured Loan — Initial Term Loan 7/29/2015 1,015,351 247,543 225,306 Ritedose Holdings I, Inc (8)(13)(14) Senior Secured Loan — Revolver 10/28/2020 - (0 ) (1,988 ) Ritedose Holdings I, Inc (8)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 7,457,779 6,506,876 7,430,185 Riverside Fund V, L.P. (13)(21) Senior Secured Loan — Term Loan 10/28/2020 2,500,000 2,475,000 2,475,000 Robertshaw US Holding Corp. (8)(13) Junior Secured Loan — Initial Term Loan (Second Lien) 2/15/2018 3,000,000 2,980,618 2,393,100 Roscoe Medical, Inc. (8)(13) Junior Secured Loan — Term Loan (Second Lien) 3/26/2014 8,201,777 8,199,552 7,894,210 Safe Fleet Holdings LLC (8)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 12/18/2019 700,000 624,061 616,875 San Vicente Capital LLC (8)(13)(14)(21) Senior Secured Loan — Term Loan 6/10/2020 3,000,000 2,960,051 3,003,900 Portfolio Company / Investment Initial Principal Amortized Fair Value2 SCSG EA Acquisition Company, Inc. (8)(13)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 8/18/2017 6,000,000 5,968,089 5,761,200 Shipston Group, U.S., Inc. (8)(13)(14)(20) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,299,241 5,355,206 6,124,122 Smartronix, Inc, (8)(13)(14)(21) Senior Secured Loan — Initial Term Loan 5/1/2020 4,962,406 4,742,756 4,815,519 Sundance Holdings Group, LLC (8)(13)(14)(20) Senior Secured Loan — First Lien Term Loan 10/28/2020 6,768,583 5,790,208 6,597,338 Surgical Specialties Corporation (Us), Inc. (3)(13)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 4,341,432 3,483,355 3,963,727 Tailwind Randys, LLC (8)(13)(14) Senior Secured Loan — Initial Term Loan 6/27/2019 4,925,000 4,860,904 4,910,717 Tank Partners Equipment Holdings LLC (5)(8)(13) Senior Unsecured Bond — 10.000% - 02/2022 - TankConvert 2/15/2019 481,051 416,170 207,766 Tex-Tech Industries, Inc. (8)(13)(14) Junior Secured Loan — Term Loan (Second Lien) 8/24/2017 12,508,000 12,415,194 10,860,696 The Cook & Boardman Group, LLC (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 1,635,880 1,377,740 1,564,311 The Edelman Financial Center, LLC (8)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 12/18/2019 300,000 272,637 302,250 Theragenics Corp (8)(13)(14) Senior Secured Loan — First Lien Term Loan B 10/28/2020 8,212,500 7,015,358 7,971,052 TLE Holdings, LLC (8)(13)(14)(21) Senior Secured Loan — Initial Term Loan 6/27/2019 5,631,157 5,612,790 5,490,378 TLE Holdings, LLC (8)(13)(14)(21) Senior Secured Loan — Delayed Draw Term Loan 6/27/2019 742,874 741,666 724,255 Portfolio Company / Investment Initial Principal Amortized Fair Value2 Triangle Home Fashions LLC (8)(13)(14)(20) Senior Secured Loan — First Lien Term Loan 10/28/2020 10,500,000 9,222,836 10,447,500 TronAir Parent Inc. (8)(13)(14) Senior Secured Loan — Initial Term Loan (First Lien) 9/30/2016 967,172 966,030 838,248 TRSO I, Inc. (8)(13)(14) Junior Secured Loan — Term Loan (Second Lien) 12/24/2012 1,000,000 999,999 1,000,000 TRSO II, Inc. (5)(8)(13) Junior Secured Loan — Promissory Note, 1.7% PIK, Due 1/25 1/24/2020 71,626 71,626 - Vectra Co. (8)(14) Junior Secured Loan — Initial Loan (Second Lien) 12/18/2019 400,000 354,613 380,334 Vero Parent, Inc. (8)(14) Senior Secured Loan — First Lien Term Loan 10/28/2020 2,790,055 2,417,526 2,789,009 Wash MultiFamily Acquisition Inc. (8)(13)(14) Junior Secured Loan — Initial US Term Loan (Second Lien) 12/18/2019 2,978,354 2,666,444 2,781,783 WireCo WorldGroup Inc. (8)(13)(14) Junior Secured Loan — Initial Term Loan (Second Lien) 8/9/2016 3,000,000 2,978,909 2,458,500 Wonder Love, Inc. (8)(13)(14)(21) Senior Secured Loan — Term Loan 11/18/2019 2,700,000 2,658,914 2,612,250 Zest Acquisition Corp. (8)(13)(14)(18) Junior Secured Loan — Initial Term Loan (Second Lien) 3/8/2018 3,500,000 3,485,385 3,291,400 Total Investment in Debt Securities $ 437,751,485 $ 392,932,411 $ 404,860,855 Equity Securities Portfolio Portfolio Company / Investment15 Initial Quantity/Par Cost Fair Value2 4L Technologies Inc.(8)(13)(19) Class A Preferred Units 5/29/2020 321 29,277 29,275 AAPC Holdings LLC.(8)(13)(21)(22) Class A Preferred Units; 18% PIK; No maturity 6/27/2019 5,500,000 5,500,000 5,500,000 Advanced Lighting Technologies, Inc.(8)(13)(19) Warrant 6/13/2012 354 — — Advanced Lighting Technologies, Inc.(8)(13)(19) Membership Interests 6/13/2012 18,520 182,000 — Advantage Capital Holdings LLC(8)(13)(19)(22) Class A Membership Units 2/14/2020 628 — — Anthem Sports & Entertainment Inc. (8)(13)(19)(21) Warrant Class A, 9/29 maturity 9/9/2019 221 43,887 17,315 Anthem Sports & Entertainment Inc. (8)(13)(19)(21) Warrant Class B, 9/29 maturity 9/9/2019 39 — — Anthem Sports & Entertainment Inc. (8)(13)(19)(21) Warrant Common Stock, 9/29 maturity 9/9/2019 721 — — ATP Oil & Gas Corporation(8)(12)(19) Limited Term Royalty Interest 12/18/2019 2,271,449 2,271,449 2,006,598 Carestream Health Inc. (8)(13)(19) Warrants 3/13/2019 — — — Centric Brands Inc. (8)(13)(19) Common 10/28/2020 36,342 — 34,525 eInstruction Acquisition, LLC(8)(13)(19) Membership Units 7/2/2007 1,076 1,079,617 1,000 EJF Investments Ltd.(3)(19) Preferred Equity, 0%; 6/25 maturity 6/17/2020 1,366,900 1,256,485 1,407,907 Portfolio Company14 Investment Industry Initial Acquisition Date Par/ Shares Cost Fair Value Footnote Refs 4L Ultimate Topco Corporation Common Services: Business 5/29/2020 321 $ 29 $ 29 (7)(12)(18) AAPC Holdings, LLC Class A Preferred Units Healthcare & Pharmaceuticals 6/27/2019 5,500,000 5,500 5,500 (7)(12)(19) Advantage Capital Holdings LLC Class A Membership Units Banking, Finance, Insurance & Real Estate 2/14/2020 628 - 209 (7)(12)(18)(19) Anthem Sports & Entertainment Inc. Warrant Class A Media: Broadcasting & Subscription 9/9/2019 263 46 338 (7)(12)(18) Anthem Sports & Entertainment Inc. Warrant Class B Media: Broadcasting & Subscription 9/9/2019 46 - 57 (7)(12)(18) Anthem Sports & Entertainment Inc. Warrant Common Stock Media: Broadcasting & Subscription 9/9/2019 859 - 171 (7)(12)(18) Anthem Sports & Entertainment Inc. Warrants Media: Broadcasting & Subscription 11/15/2021 42 - 52 (7)(12)(18) Anthem Sports & Entertainment Inc. Warrants Media: Broadcasting & Subscription 11/15/2021 247 - 316 (7)(12)(18) Anthem Sports & Entertainment Inc. Warrants Media: Broadcasting & Subscription 11/15/2021 785 - 156 (7)(12)(18) ATP Oil & Gas Corporation Limited Term Royalty Interest Energy: Oil & Gas 12/18/2019 856,119 856 1,941 (7)(11)(12) BMP Slappey Holdco, LLC Preferred Stock Telecommunications 6/9/2021 200,000 467 492 (7)(12)(17)(18)(21) BMP Slappey Investment II Preferred Stock Telecommunications 6/9/2021 88,946 208 219 (7)(12)(17)(18)(21) Brite Media LLC Common Stock Media: Advertising, Printing & Publishing 6/9/2021 139 150 246 (7)(12)(18) Carestream Health, Inc. Warrant Healthcare & Pharmaceuticals 5/8/2020 33 - - (7)(12)(18) Centric Brands Inc. Common Machinery (Non-Agrclt/Constr/Electr) 10/28/2020 36,342 - 328 (7)(12)(13)(18) Coastal Screen and Rail, LLC Preferred Stock Construction & Building 6/9/2021 150,000 418 400 (7)(12)(18)(21) EJF Investments Ltd. Preferred Equity Banking, Finance, Insurance & Real Estate 6/17/2020 1,000,000 1,256 1,596 (3)(18) Everyware Global, Inc. Common Consumer goods: Durable 10/28/2020 1,085,565 346 706 (7)(12)(18) Flight Lease VII Common Stock Aerospace and Defense 6/9/2021 1,938 280 256 (7)(12)(15)(18)(22) Flight Lease XII Common Stock Aerospace and Defense 6/9/2021 1,000 530 677 (7)(12)(17)(18)(21) FP WRCA Coinvestment Fund VII, Ltd. Class A Shares Capital Equipment 2/2/2007 1,500,000 1,500 1,102 (3)(12)(18) Fusion Connect, Inc. Common Telecommunications 10/28/2020 121,871 866 - (7)(12)(13)(18) KC Engineering & Construction Services, LLC Common Stock Environmental Industries 6/9/2021 131,081 4,315 4,200 (7)(12)(18)(21) Kleen-Tech Acquisition, LLC Common Stock Services: Business 6/9/2021 250,000 1,265 1,612 (7)(12)(17)(18)(21) Northeast Metal Works LLC Preferred Stock Metals & Mining 6/9/2021 2,368 - - (7)(12)(17)(18)(21) Ohene Holdings B.V. Warrants High Tech Industries 3/31/2019 4 - - (3)(12)(18) Prosper Marketplace Class B Preferred Units Consumer goods: Durable 10/28/2020 912,865 279 339 (6)(7)(12)(18) Ravn Air Liquidation Trust Equity Aerospace and Defense 10/1/2021 1,049 200 46 (7)(12)(18) Roscoe Investors, LLC Class A Units Healthcare & Pharmaceuticals 3/26/2014 10,000 1,000 426 (7)(12)(18) Safety Services Holdings Corporation, Preferred Stock Services: Business 6/9/2021 100,000 43 60 (7)(12)(18) Surge Busy Bee Holdings LLC Warrants Services: Business 6/9/2021 105 63 40 (7)(12)(18)(21) Surge Hippodrome Holdings LLC Warrants Services: Business 6/9/2021 10 159 201 (7)(12)(17)(18)(21) Surge Hippodrome Partners LP Common Stock Services: Business 6/9/2021 185 425 336 (7)(12)(17)(18)(21) Tank Partners Equipment Holdings LLC Class A Units Energy: Oil & Gas 8/28/2014 49,000 6,228 - (7)(8)(12)(18) VTK Acquisition, Inc. Common Stock Common Stock 6/9/2021 90 251 535 (7)(12)(17)(18)(21) World Business Lenders, LLC Common Stock Common Stock 6/9/2021 49,209 - - (12)(18) Total Equities (8% of net asset value at fair value) $ 26,680 $ 22,586 See accompanying notes to unaudited consolidated financial statements. Portfolio Company / Investment15 Initial Quantity/Par Cost Fair Value2 Emtec, Inc.(8)(13)(19) Preferred Equity 10/28/2020 319,357 — — Oneida Group, Inc.(8)(13)(19) Common 10/28/2020 1,085,565 345,834 347,381 Faraday Holdings LLC.(8)(13)(19) Class D Shares 10/28/2020 2,752 548,377 865,493 FP WRCA Coinvestment Fund VII, Ltd.(3)(13)(19) Class A Shares 2/2/2007 1,500,000 1,500,000 480,300 Fusion Connect, Inc. (8)(13)(19) Common 10/28/2020 121,871 865,854 1,039,560 GIG Rooster Holdings I, LLC (8)(13)(18)(19) Common 10/28/2020 99 — 123,354 New Millennium Holdco, Inc. (Millennium Health, LLC)(8)(13)(19) Common 10/7/2014 29,699 1,953,300 1,000 Ohene Holdings B.V.(3)(13)(19) Warrants 3/31/2019 4 — — Prosper Marketplace (6)(13)(19) Class B Preferred Units 10/28/2020 912,865 278,865 365,146 Roscoe Investors, LLC(8)(13)(19) Class A Units 3/26/2014 10,000 1,000,000 454,000 Tank Partners Equipment Holdings, LLC(8)(9)(13)(16)(19) Class A Units 8/28/2014 49,000 6,228,000 — TRSO II, Inc.(8)(13)(19) Common Stock 12/24/2012 1,228 420,289 — Valterra Products Holdings, LLC(8)(13)(19) Class A Units 10/28/2020 185,847 981,365 1,144,818 Valterra Products Holdings, LLC(8)(13)(19) Class B Units 10/28/2020 20,650 109,040 127,205 Total Investment in Equity Securities $ 13,435,508 $ 24,593,639 $ 13,944,876 18 CLO Portfolio Company14 Investment10 Industry Maturity Percentage Ownership Initial Acquisition Date Cost Fair Value Footnote Refs Catamaran CLO 2013- 1 Ltd. Subordinated Securities, effective interest 21.4% CLO Fund Securities 1/27/28 23.3% 6/4/13 $ 4,198 $ 1,779 (3)(12) Catamaran CLO 2014-1 Ltd. Subordinated Securities, effective interest 13.2% CLO Fund Securities 4/20/30 22.2% 5/6/14 9,679 4,278 (3)(12) Catamaran CLO 2014-2 Ltd. Subordinated Securities, effective interest 0.0% CLO Fund Securities 10/18/26 24.9% 8/15/14 6,066 - (3)(12) Catamaran CLO 2015-1 Ltd. Subordinated Securities, effective interest 0.0% CLO Fund Securities 4/22/27 9.9% 5/5/15 2,549 - (3)(12) Catamaran CLO 2018-1 Ltd Subordinated Securities, effective interest 12.7% CLO Fund Securities 10/27/31 24.8% 9/27/18 8,694 6,314 (3)(12) Dryden 30 Senior Loan Fund Subordinated Securities, effective interest 53.4% CLO Fund Securities 11/1/28 6.8% 10/10/13 1,147 1,258 (3)(12) JMP Credit Advisors CLO IV Ltd. Subordinated Securities, effective interest 27.5% CLO Fund Securities 7/17/29 57.2% 10/22/21 8,530 8,105 (3)(12) JMP Credit Advisors CLO V Ltd. Subordinated Securities, effective interest 37.9% CLO Fund Securities 7/17/30 57.2% 10/22/21 10,698 9,898 (3)(12) Total CLO Fund Securities (11% of net asset value at fair value) $ 51,561 31,632 Portfolio Company Investment15,11 Initial Percentage Amortized Fair Catamaran CLO 2013- 1 Ltd.(3)(13)(21) Subordinated Securities, effective interest 10.7%, 6/4/2013 23.3 % 6,219,310 2,611,423 Catamaran CLO 2014-1 Ltd.(3)(13) Subordinated Securities, effective interest 2.4%, 5/6/2014 22.2 % 9,998,258 3,835,632 Dryden 30 Senior Loan Fund(3)(13) Subordinated Securities, effective interest 21.2%, 10/10/2013 6.8 % 1,272,501 1,322,100 Catamaran CLO 2014-2 Ltd.(3)(13)(21) Subordinated Securities, effective interest 0.0%, 8/15/2014 24.9 % 6,065,598 - Catamaran CLO 2015-1 Ltd.(3)(6)(13)(21) Subordinated Securities, effective interest 9.0%, 5/5/2015 9.9 % 4,141,981 1,609,400 Catamaran CLO 2016-1 Ltd.(3)(13) Subordinated Securities, effective interest 8.0%, 12/21/2016 24.9 % 8,872,484 3,549,000 Catamaran CLO 2018-1 Ltd(3)(13) Subordinated Securities, effective interest 10.0%, 9/27/2018 24.8 % 9,157,681 6,655,000 Total Investment in CLO Fund $ 45,727,813 $ 19,582,555 Asset Manager Affiliates Portfolio Company14 Investment Percentage Ownership Initial Acquisition Date Cost Fair Value Footnote Refs Asset Manager Affiliates Asset Management Company 100.0% 12/11/06 $ 17,791 $ - (8)(12) Total Asset Manager Affiliates (0% of net asset value at fair value) $ 17,791 $ - Derivatives Portfolio Company / Investment15 Initial Percentage Cost Fair Asset Manager Affiliates(8)(9)(13)(16) Asset Management Company 12/11/2006 100 % $ 17,791,230 $ - Total Investment in Asset Manager $ 17,791,230 $ - Derivatives Portfolio Company / Investment15 Initial Cost Fair AAPC Holdings LLC.(13)(21)(22) Securities Swap and Option Agreement 9/30/2019 $ - $ (1,120,695 ) HDNet Holdco LLC (13)(21)(22) Call Option 9/9/2019 30,609 12,077 Total Derivatives (0% of net asset value at fair value) $ 30,609 $ (1,108,618 ) Joint Ventures Portfolio Company / Investment15 Initial Percentage Cost Fair KCAP Freedom 3 LLC(9)(13)(16) Joint Venture 7/19/2017 60 % $ 24,914,858 $ 19,748,808 BCP Great Lakes Holdings LP(10)(17)(18) Joint Venture 12/11/2018 27 % 30,017,600 29,600,355 Total Investment in Joint Ventures $ 54,932,458 $ 49,349,163 Total Investments4 $ 536,008,160 $ 486,628,831 Portfolio Company14 Investment Industry Initial Acquisition Date Cost Fair Value Footnote Refs AAPC Holdings, LLC Derivatives Healthcare & Pharmaceuticals 6/27/19 $ - $ (2,422 ) (12)(19) Coastal Screen and Rail, LLC Derivatives Construction & Building 6/9/21 - - (12)(19) HDNet Holdco LLC (Anthem) Derivatives Media: Broadcasting & Subscription 9/9/19 31 10 (12)(19) Total Derivatives (-1% of net asset value at fair value) $ 31 $ (2,412 ) Portfolio Company14 Investment Percentage Ownership Initial Acquisition Date Cost Fair Value Footnote Refs KCAP Freedom 3 LLC Joint Ventures 62.8% 12/11/18 $ 27,415 $ 23,062 (8)(12) BCP Great Lakes Holdings LP Joint Ventures 24.0% 12/11/18 $ 36,950 37,412 (9)(16)(17)(20) Total Joint Venture (22% of net asset value at fair value) $ 64,365 $ 60,474 Total Investments4 (194% of net asset value at fair value) $ 605,396 $ 547,573 See accompanying notes to unaudited consolidated financial statements. 19 ($ in thousands) Description Payments made Payments received Counterparty Maturity date Notional amount Value Upfront payments/receipts Unrealized gain (loss) Securities Swap and Option Agreement 18% PIK 16% Cash Advantage Capital Holdings LLC. 9/15/24 $ 5,500 $ (2,422 ) $ - $ (2,422 ) ($ in thousands) Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Call option HDNet Holdco LLC 0.2 $ 8 0.01 N/A $ 10 Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Put option Coastal Screen and Rail - $ 150 400,000 8/31/2022 $ - Description Payments made Payments received Counterparty Maturity date Notional amount Value Upfront payments/receipts Unrealized gain (loss) Securities Swap and Option Agreement 18% PIK 16% Cash Advantage Capital Holdings LLC. 9/15/24 $ 5,500,000 $ (1,120,695 ) $ - $ (1,120,695 ) Description Counterparty Number of shares Notional amount Exercise price Expiration date Value Call option HDNet Holdco LLC 0.2 $ 7,656 $ 0.01 N/A $ 12,077 See accompanying notes to unaudited consolidated financial statements. 20 PORTMAN RIDGE FINANCE CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS For the Nine Months Ended September 30, 20214,7 20204,7 Per Share Data: Net asset value, at beginning of period $ 28.77 $ 33.95 Net investment income1 4.09 1.81 Net realized gains (losses) from investments1 (1.38 ) (0.86 ) Realized (losses) gains from extinguishment of debt1 (0.22 ) 0.03 Net change in unrealized (depreciation) appreciation on investments1 0.92 (4.90 ) Net (decrease) increase in net assets resulting from operations 3.41 (3.92 ) Net decrease in net assets resulting from distributions (1.77 ) (1.80 ) Net increase (decrease) in net assets relating to stock-based transactions6 (0.70 ) 0.28 Net asset value, end of period $ 29.71 $ 28.51 Total net asset value return2 9.4 % (16.8 )% Ratio/Supplemental Data: Per share market value at beginning of period $ 17.68 $ 21.20 Per share market value at end of period $ 24.35 $ 13.30 Total market return3 47.7 % (28.8 )% Shares outstanding at end of period 9,123,275 4,416,906 Net assets at end of period $ 271,048,275 $ 125,946,098 Portfolio turnover rate5 41.8 % 26.6 % Asset coverage ratio 178 % 172 % Ratio of net investment income to average net assets (annualized) 18.4 % 7.7 % Ratio of total expenses to average net assets (annualized)6 16.0 % 14.2 % Ratio of interest expense to average net assets (annualized) 5.6 % 6.7 % Ratio of non-interest expenses to average net assets (annualized)6 10.3 % 7.5 % For the Nine Months Ended September 30, 2022(4) 2021(4) Per Share Data: Net asset value, at beginning of period $ 28.88 $ 28.77 Net investment income(1) 2.26 4.09 Net realized gains (losses) from investments(1) (2.97 ) (1.38 ) Net change in unrealized (depreciation) appreciation on investments(1) (0.07 ) 0.92 Realized gains (losses) from extinguishment of debt(1) - (0.22 ) Tax (provision) benefit on realized and unrealized gains (losses) on investments (0.11 ) - Net (decrease) increase in net assets resulting from operations $ (0.89 ) $ 3.41 Net decrease in net assets resulting from distributions $ (1.89 ) $ (1.77 ) Net increase (decrease) in net assets relating to stock-based transactions(6) 0.08 (0.70 ) Net asset value, end of period $ 26.18 $ 29.71 Total net asset value return(2) (1.6 )% 9.4 % Total market return(3) (8.0 )% 47.7 % Ratio/Supplemental Data: Per share market value at beginning of period $ 24.76 $ 17.68 Per share market value at end of period $ 21.00 $ 24.35 Shares outstanding at end of period 9,608,913 9,123,275 Net assets at end of period $ 251,582 $ 271,048 Portfolio turnover rate(5) 25.0 % 41.8 % Asset coverage ratio 167 % 178 % Ratio of net investment income to average net assets (annualized) 11.0 % 18.4 % Ratio of total expenses to average net assets (annualized) 14.7 % 16.0 % Ratio of interest expense to average net assets (annualized) 6.0 % 5.6 % Ratio of non-interest expenses to average net assets (annualized) 8.7 % 10.3 % See accompanying notes to unaudited consolidated financial statements. 21 PORTMAN RIDGE FINANCE CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION Portman Ridge Finance Corporation (“Portman Ridge” or the “Company”), formerly known as KCAP Financial, Inc., is an externally managed, non-diversified closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company was formed as a Delaware limited liability company on August 8, 2006 and, prior to the issuance of shares of the Company’s common stock in its initial public offering (“IPO”), converted to a corporation incorporated in Delaware on December 11, 2006. The Company originates, structures, and invests in secured term loans, bonds or notes and mezzanine debt primarily in privately-held middle market companies but may also invest in other investments such as loans to publicly-traded companies, high-yield bonds, and distressed debt securities (collectively the “Debt Securities Portfolio”). The Company also invests in The Company has elected to be treated and intends to continue to qualify as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a RIC, the Company must, among other things, meet certain source-of-income, asset diversification and annual distribution requirements. As a RIC, the Company generally will not have to pay corporate-level U.S. federal income taxes on any income that it distributes in a timely manner to its stockholders. On March 29, 2018, the Company’s Board of Directors (the “Board”), including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Small Business Credit Availability Act (“SBCA”). As a result, the Company’s asset coverage requirement for senior securities changed from During the third quarter of 2017, the Company formed a joint venture with Freedom 3 Opportunities LLC (“Freedom 3 Opportunities”), an affiliate of Freedom 3 Capital LLC, to create KCAP Freedom 3 LLC (the On November 8, 2018, the Company entered into an agreement with LibreMax Intermediate Holdings, LP (“LibreMax”) under which Commodore Holdings, LLC (“Commodore”), a wholly-owned subsidiary of the Company, sold the Company’s wholly-owned asset manager subsidiaries Katonah Debt Advisors, LLC (“Katonah Debt Advisors”), Trimaran Advisors, L.L.C. (“Trimaran Advisors”), and Trimaran Advisors Management, L.L.C. (“Trimaran Advisors Management” and, together with Katonah Debt Advisors and Trimaran Advisors, the “Disposed Manager Affiliates”), for a cash purchase price of approximately The Externalization Agreement On December 14, 2018, the Company entered into a stock purchase and transaction agreement (the “Externalization Agreement”) with BC Partners Advisors L.P. (“BCP”), an affiliate of BC Partners LLP, (“BC Partners”), through which Sierra Crest Investment Management LLC (the “Adviser”), an affiliate of BC Partners, became the Company’s investment adviser pursuant to an investment advisory Agreement (the “Advisory Agreement”) with the Company. At a special meeting of the Company’s stockholders (the “Special Meeting”) held on February 19, 2019, the Company’s stockholders approved the Advisory Agreement. The transactions contemplated by the Externalization Agreement closed on April 1, 2019 (the “Closing”), and the Company commenced operations as an externally managed BDC managed by the Adviser on that date. On the date of the Closing, the Company changed its name from KCAP Financial, Inc. to Portman Ridge Finance Corporation and on April 2, 2019, began trading on the NASDAQ Global Select Market under the symbol “PTMN.” About the Adviser The Adviser is an affiliate of BC Partners. Subject to the overall supervision of the Board, the Adviser is responsible for managing the Company’s business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring the Company’s investments, and monitoring the Company’s portfolio companies on an ongoing basis through a team of investment professionals. The Adviser seeks to invest on behalf of the Company in performing, well-established middle market businesses that operate across a wide range of industries (i.e., no concentration in any one industry). The Adviser employs fundamental credit analysis, targeting investments in businesses with relatively low levels of cyclicality and operating risk. The holding size of each position will generally be dependent upon a number of factors including total facility size, pricing and structure, and the number of other lenders in the facility. The Adviser has experience managing levered vehicles, both public and private, and seeks to enhance the Company’s returns through the use of leverage with a prudent approach that prioritizes capital preservation. The Adviser believes this strategy and approach offers attractive risk/return with lower volatility given the potential for fewer defaults and greater resilience through market cycles. During the fourth quarter of 2020, LibreMax Intermediate Holdings, LP (“LibreMax”) sold its minority stake in the Adviser to a wholly-owned subsidiary of Mount Logan Capital Inc. (“Mount Logan”). An affiliate of BC Partners serves as administrator to Mount On $0.31. 22 HCAP Acquisition and Assumption and Redemption of HCAP Notes On Under the terms of the merger agreement for the HCAP Acquisition, dated December 23, 2020 (the “HCAP Merger With respect to the merger consideration from Pursuant to the conditions of and adjustment mechanisms in the HCAP Merger Agreement, 475,806 Electing Shares were converted to Non-Electing Shares for purposes of calculating the total mix of consideration to be paid to each Electing Share in order to ensure that the value of the aggregate cash consideration paid to holders of the Electing Shares equaled the aggregate cash consideration that HCAP received from the Company under the terms of the HCAP Merger Agreement. Accordingly, as a result of the Elections received from HCAP stockholders and any resulting adjustment under the terms of the HCAP Merger Agreement, each Electing Share received, in aggregate, approximately On June 9, 2021, the Company entered into a third supplemental indenture (the “HCAP Third Supplemental Indenture”) by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), effective as of the closing of the HCAP Acquisition. The HCAP Third Supplemental Indenture relates to the Company’s assumption of Pursuant to the HCAP Third Supplemental Indenture, the Company expressly assumed the due and punctual payment of the principal of (and premium, if any) and interest, if any, on the HCAP Notes and the performance of HCAP’s covenants under the base indenture, dated as of January 27, 2015, by and between HCAP and the Trustee, as supplemented by the second supplemental indenture, dated as of August 24, 2017, by and between HCAP and the Trustee. No change of control offer was required to be made in respect of the HCAP Notes in connection with the consummation of the HCAP Acquisition. The HCAP Notes could be redeemed by the Company at any time at par value plus accrued and unpaid interest. On July 23, 2021, the Company redeemed the entire notional amount of Reverse Stock Split On August 23, 2021, the Company filed a Certificate of Amendment (the “Reverse Stock Split Certificate of Amendment”) to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a As a result of the Reverse Stock Split, every ten shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, any stockholder who would have been entitled to receive a fractional share as a result of the Reverse Stock Split received cash payments in lieu of such fractional shares (without interest and subject to backup withholding and applicable withholding taxes). On August 23, 2021, the Company filed a Certificate of Amendment to decrease the number of authorized shares of common stock by one half of the reverse stock split ratio (the “Decrease Shares Certificate of Amendment”) with the Secretary of State of the State of Delaware. The Decrease Shares Certificate of Amendment became effective as of 12:05 a.m. (Eastern Time) on August 26, 2021. Following the effectiveness of the Decrease Shares Certificate of Amendment, the number of authorized shares of common stock under the Company’s Certificate of Incorporation was reduced from 100 million shares to 20 million shares. The Reverse Stock Split Certificate of Amendment and the Decrease Shares Certificate of Amendment were approved by the Company’s stockholders at its annual meeting held on June 7, 2021 and were approved by the Board on August 4, 2021. All share and per share values have been adjusted retroactively to reflect the split for all periods presented, except where otherwise noted. 2.SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required for annual consolidated financial statements. The unaudited interim consolidated financial statements (“consolidated financial statements”) and notes thereto should be read in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, The consolidated financial statements reflect all adjustments, both normal and recurring which, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition for the periods presented. Furthermore, the preparation of the consolidated financial statements requires the Company to make significant estimates and assumptions including with respect to the fair value of investments that do not have a readily available market value. Actual results could differ from those estimates, and the differences could be material. The results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for the full year. 23 The Company consolidates the financial statements of its wholly-owned special purpose financing subsidiaries Portman Ridge Funding 2018-2 Ltd. (“PRF CLO 2018-2”) (formerly known as Garrison Funding 2018-2 Ltd. In accordance with Article 6 of Regulation S-X under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company does not consolidate portfolio company investments, including those in which it has a controlling The determination of the tax character of distributions is made on an annual (full It is the Company’s primary investment objective to generate current income and capital appreciation by lending directly to privately-held middle market companies. During the Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions, subject to meeting certain criteria, that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. Management continues to assess the impact that the adoption of this guidance will have on the In June 2022, the Financial Accounting Standards Board issued Accounting Standards Update 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03"). The accounting standard update clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions and measured at fair value in accordance with Topic 820. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact that adoption of this new accounting standard will have on its consolidated financial Investments Investment transactions are recorded on the applicable trade date. Realized gains or losses are determined using the specific identification method. Valuation of Portfolio Investments. The Board has designated the Adviser as its "valuation designee" pursuant to Rule 2a-5 under the 1940 Act, and in that role the Adviser is The Company utilizes one or more independent valuation firms to provide third party valuation consulting services. Each quarter the independent valuation The The majority of the Company’s investment portfolio is composed of debt and equity securities with unique contract terms and conditions and/or complexity that requires a valuation of each individual investment that considers multiple levels of market and asset specific inputs, which may include historical and forecasted financial and operational performance of the individual investment, projected cash flows, market multiples, comparable market transactions, the priority of the security compared with those of other securities for such issuers, credit risk, interest rates, and independent valuations and reviews. Debt fair value using alternative methodologies such as available market data, as adjusted, to reflect the types of assets the Company owns, their structure, qualitative and credit attributes and other asset-specific characteristics. The Company derives fair value for its illiquid investments that do not have indicative fair values based upon active trades primarily by using a present value technique that discounts the estimated contractual cash flows for the subject assets with discount rates imputed by broad market indices, bond spreads and yields for comparable issuers relative to the subject assets (the “Income Approach”). The Company also considers, among other things, recent loan amendments or other activity specific to the subject asset. Discount rates applied to estimated contractual cash flows for an underlying asset vary by specific investment, industry, priority and nature of the debt security (such as the seniority or 24 security interest of the debt security) and are assessed relative to leveraged loan and high-yield bond indices, at the valuation date. The Company has identified these indices as benchmarks for broad market information related to its loan and debt securities. Because the Company has not identified any market index that directly correlates to the loan and debt securities held by the Company and therefore uses these benchmark indices, these market indices may require significant adjustment to better correlate such market data for the calculation of fair value of the investment under the Income Approach. Such adjustments require judgment and may be material to the calculation of fair value. Further adjustments to the discount rate may be applied to reflect other market conditions or the perceived credit risk of the borrower. When broad market indices are used as part of the valuation methodology, their use is subject to adjustment for many factors, including priority, collateral used as security, structure, performance and other quantitative and qualitative attributes of the asset being valued. The resulting present value determination is then weighted along with any quotes from observable transactions and broker/pricing quotes. If such quotes are indicative of actual transactions with reasonable trading volume at or near the valuation date that are not liquidation or distressed sales, relatively more reliance will be put on such quotes to determine fair value. If such quotes are not indicative of market transactions or are insufficient as to volume, reliability, consistency or other relevant factors, such quotes will be compared with other fair value indications and given relatively less weight based on their relevancy. Other significant assumptions, such as coupon and maturity, are asset-specific and are noted for each investment in the Consolidated Schedules of Investments included herein. Equity The significant inputs used to determine the fair value of equity securities include prices, EBITDA and cash flows after capital expenditures for similar peer comparables and the investment entity itself. Equity securities are classified as Level III, when there is limited activity or less transparency around inputs to the valuation given the lack of information related to such equity investments held in nonpublic companies. Significant assumptions observed for comparable companies are applied to relevant financial data for the specific investment. Such assumptions, such as model discount rates or price/earnings multiples, vary by the specific investment, equity position and industry and incorporate adjustments for risk premiums, liquidity and company specific attributes. Such adjustments require judgment and may be material to the calculation of fair value. The Company values derivative contracts using various pricing models that take into account the terms of the contract (including notional amount and contract maturity) and observable and unobservable inputs such as interest rates and changes in fair value of the reference asset. Asset Manager CLO Fund The Company’s investments in CLO Fund Securities are carried at fair value, which is based either on (i) the present value of the net expected cash inflows for interest income and principal repayments from underlying assets and cash outflows for interest expense, debt pay-down and other fund costs for the CLO Funds that are approaching or past the end of their reinvestment period and therefore are selling assets and/or using principal repayments to pay down CLO Fund debt (or will begin to do so shortly), and for which there continue to be net cash distributions to the class of securities owned by the Company, a Discounted Cash Flow approach, (ii) a discounted cash flow model that utilizes prepayment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow and comparable yields for similar securities or preferred shares to those in which the Company has invested, or (iii) indicative prices provided by the underwriters or brokers who arrange CLO Funds, a Market Approach. The Company recognizes unrealized appreciation or depreciation on the Company’s investments in CLO Fund Securities as comparable yields in the market change and/or based on changes in net asset values or estimated cash flows resulting from changes in prepayment or loss assumptions in the underlying collateral pool. As each investment in CLO Fund Securities ages, the expected amount of losses and the expected timing of recognition of such losses in the underlying collateral pool are updated and the revised cash flows are used in determining the fair value of the CLO Fund investment. The Company determines the fair value of its investments in CLO Fund Securities on a security-by-security basis. Due to the individual attributes of each CLO Fund Security, they are classified as a Level III investment unless specific trading activity can be identified at or near the valuation date. When available, observable market information will be identified, evaluated and weighted accordingly in the application of such data to the present value models and fair value determination. Significant assumptions to the present value calculations include default rates, recovery rates, prepayment rates, investment/reinvestment rates and spreads and the discount rate by which to value the resulting underlying cash flows. Such assumptions can vary significantly, depending on market data sources which often vary in depth and level of analysis, understanding of the CLO market, detailed or broad characterization of the CLO market and the application of such data to an appropriate framework for analysis. The application of data points are based on the specific attributes of each individual CLO Fund Security’s underlying assets, historic, current and prospective performance, vintage, and other quantitative and qualitative factors that would be evaluated by market participants. The Company evaluates the source of market data for reliability as an indicative market input, consistency amongst other inputs and results and also the context in which such data is presented. For rated note tranches of CLO Fund Securities (those above the junior class) without transactions to support a fair value for the specific CLO Fund and tranche, fair value is based on discounting estimated bond payments at current market yields, which may reflect the adjusted yield on the leveraged loan index for similarly rated tranches, as well as prices for similar tranches for other CLO Funds and also other factors such as indicative prices provided by underwriters or brokers who arrange CLO Funds, and the default and recovery rates of underlying assets in the CLO Fund, as may be applicable. Such model assumptions may vary and incorporate adjustments for risk premiums and CLO Fund specific attributes. Short-term Joint Cash and Cash 25 Cash and cash equivalents include short-term, highly liquid investments, readily convertible to Restricted Cash Restricted cash and cash equivalents Foreign Currency Translations The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company. Investment Income Interest For investments with PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible (i.e. via a partial or full non-accrual). Loans which are on partial or full non-accrual remain in such status until the borrower has demonstrated the ability and intent to pay contractual amounts due or such loans become current. As of September 30, Investment Income on CLO Fund GAAP-basis investment income on CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from both the tax–basis investment income and from the cash distributions actually received by the Company during the period. For non-junior class CLO Fund Securities, interest is earned at a fixed spread relative to the LIBOR index. Investment Income on Joint Debt Issuance Costs Debt issuance costs Extinguishment of Debt The Company Expenses Shareholder Distributions Distributions to common stockholders are recorded on the ex-dividend date. The amount of distributions, if any, is determined by the Board each quarter. The Company has adopted a dividend reinvestment plan (the 26 3.EARNINGS (LOSSES) PER SHARE In accordance with the provisions of ASC 260, “Earnings per Share” (“ASC 260”), basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The following information sets forth the computation of basic and diluted net increase (decrease) in For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 Net increase (decrease) increase in net assets resulting from operations $ 9,144,486 $ 8,318,673 $ 28,025,986 $ (17,450,561 ) Weighted average number of common and common stock equivalent shares outstanding for basic and diluted shares computation 9,131,456 4,441,778 8,213,661 4,461,650 Net (decrease) increase in net assets per basic common shares: Net (decrease) increase in net assets from operations(1) $ 1.00 $ 1.87 $ 3.41 $ (3.91 ) Net (decrease) increase in net assets per diluted shares: Net (decrease) increase in net assets from operations(1) $ 1.00 $ 1.87 $ 3.41 $ (3.91 ) For the Three Months Ended September 30, For the Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Net increase (decrease) in net assets resulting from operations $ (4,205 ) $ 9,145 $ (8,580 ) $ 28,026 Weighted average number of common and common stock equivalent shares outstanding for basic and diluted shares computation 9,602,712 9,131,456 9,644,870 8,213,661 Net increase (decrease) in net assets per basic common shares and diluted shares: Net increase (decrease) in net assets from operations(1) $ (0.44 ) $ 1.00 $ (0.89 ) $ 3.41 4. INVESTMENTS The following table shows the Company’s portfolio by security type at September 30, September 30, 2021 (Unaudited) December 31, 2020 Security Type Cost/Amortized Fair Value %¹ Cost/Amortized Fair Value %¹ Senior Secured Loan 367,212,162 380,960,592 68 304,539,184 328,845,612 68 Junior Secured Loan 82,973,411 74,076,080 13 87,977,057 75,807,477 16 Senior Unsecured Bond 416,171 43,204 0 416,170 207,766 0 CLO Fund Securities 33,964,238 17,173,634 3 45,727,813 19,582,555 4 Equity Securities 29,041,687 22,298,759 4 24,593,639 13,944,876 3 Asset Manager Affiliates2 17,791,230 — — 17,791,230 — — Joint Ventures 70,558,377 67,629,114 12 54,932,458 49,349,163 10 Derivatives 30,609 (1,982,091 ) — 30,609 (1,108,618 ) — Total $ 601,987,885 $ 560,199,292 100 % $ 536,008,160 $ 486,628,831 100 % ($ in thousands) September 30, 2022 December 31, 2021 Security Type Cost/Amortized Fair Value %(¹) Cost/Amortized Fair Value %(¹) Senior Secured Loan $ 426,052 $ 415,819 73 $ 361,556 $ 364,701 66 Junior Secured Loan 65,672 61,535 11 82,996 70,549 13 Senior Unsecured Bond 416 43 0 416 43 0 Equity Securities 27,679 24,487 4 26,680 22,586 4 CLO Fund Securities 37,411 24,623 4 51,561 31,632 6 Asset Manager Affiliates(2) 17,791 - - 17,791 - - Joint Ventures 55,139 45,141 8 64,365 60,474 11 Derivatives 31 8 0 31 (2,412 ) - Total $ 630,191 $ 571,656 100 % $ 605,396 $ 547,573 100 % 27 The industry concentrations based on the fair value of the Company’s investment portfolio as of September 30, September 30, 2021 (Unaudited) December 31, 2020 Industry Classification Cost/Amortized Fair Value %¹ Cost/Amortized Fair Value %¹ Aerospace and Defense $ 11,814,083 $ 11,738,812 2 $ 11,342,227 $ 11,218,193 2 Asset Management Company 2 17,791,230 — — 17,791,230 — — Automotive 10,890,444 11,481,530 2 10,840,171 11,651,714 2 Banking, Finance, Insurance & Real Estate 39,155,006 41,403,610 7 30,074,875 31,121,723 6 Beverage, Food and Tobacco 5,317,124 5,437,500 1 9,196,359 9,100,107 2 Capital Equipment 19,596,337 18,296,975 3 10,276,249 8,204,690 2 Chemicals, Plastics & Rubber 6,347,714 6,711,605 1 6,608,887 7,230,131 1 CLO Fund Securities 33,964,238 17,173,634 3 45,727,813 19,582,555 4 Construction & Building 8,860,985 7,481,916 1 9,802,754 10,946,643 2 Consumer goods: Durable 19,681,262 21,500,071 4 32,435,115 34,858,844 7 Consumer goods: Non-durable 5,663,236 6,284,237 1 1,837,151 2,102,176 0 Containers, Packaging and Glass 2,786,954 2,591,064 0 2,806,740 2,502,994 1 Electronics 17,964,277 19,901,030 4 28,389,620 31,564,533 6 Energy: Oil & Gas 9,370,825 3,633,657 1 13,501,691 6,878,115 1 Environmental Industries 7,283,447 7,502,505 1 3,939,764 3,585,669 1 Finance 10,936,537 10,936,000 2 - - — Forest Products & Paper 1,581,127 1,358,240 0 1,576,633 1,270,880 0 Healthcare, Education and Childcare 9,797,292 9,765,443 2 14,059,921 13,791,048 3 Healthcare & Pharmaceuticals 68,913,038 62,299,025 11 83,481,401 78,823,040 16 High Tech Industries 60,348,479 61,537,690 11 32,949,892 35,052,389 7 Hotel, Gaming & Leisure 9,804,159 9,800,000 2 - - — Joint Ventures 70,558,377 67,629,114 12 54,932,458 49,349,163 10 Machinery (Non-Agrclt/Constr/Electr) 7,880,124 8,754,282 2 6,712,460 7,227,441 1 Media: Advertising, Printing & Publishing 3,027,661 3,510,461 1 2,830,592 3,170,254 1 Media: Broadcasting & Subscription 4,029,968 4,021,034 1 3,955,772 3,901,188 1 Media: Diversified & Production 10,325,089 10,438,340 2 2,658,914 2,612,250 1 Metals & Mining 13,129,929 13,682,518 2 1,219,188 1,326,500 0 Retail 5,975,549 6,773,201 1 5,790,208 6,597,338 1 Services: Business 78,816,384 80,129,332 14 58,027,464 60,119,401 12 Services: Consumer 3,837,036 3,840,200 1 4,241,127 4,198,243 1 Telecommunications 6,313,276 5,619,837 1 8,930,322 9,023,109 2 Textiles and Leather 12,418,665 11,118,299 2 12,415,194 10,860,696 2 Transportation: Cargo - - - 7,655,970 8,757,804 2 Transportation: Consumer 7,808,033 7,848,130 1 - - - Total $ 601,987,885 $ 560,199,292 100 % $ 536,008,160 $ 486,628,831 100 % ($ in thousands) September 30, 2022 December 31, 2021 Industry Classification Cost/Amortized Fair Value %(¹) Cost/Amortized Fair Value %(¹) Aerospace and Defense $ 10,764 $ 10,522 2 $ 11,730 $ 11,692 2 Asset Management Company(2) 17,791 - - 17,791 - - Automotive 12,007 11,803 2 11,331 11,487 2 Banking, Finance, Insurance & Real Estate 72,192 74,457 13 41,487 42,858 8 Beverage, Food and Tobacco 12,381 12,237 2 5,511 5,625 1 Capital Equipment 10,679 6,915 1 14,387 10,620 2 Chemicals, Plastics & Rubber 10,496 10,379 2 12,692 12,969 2 CLO Fund Securities 37,411 24,623 4 51,561 31,632 6 Construction & Building 10,481 10,530 2 8,966 9,501 2 Consumer goods: Durable 16,804 13,852 2 25,151 24,831 5 Consumer goods: Non-durable 2,187 2,197 0 4,162 4,197 1 Containers, Packaging and Glass 2,761 2,661 1 2,780 2,570 1 Electronics 10,809 10,917 2 10,623 11,089 2 Energy: Electricity 671 671 0 - - - Energy: Oil & Gas 6,718 1,388 0 7,921 2,355 0 Environmental Industries 4,315 6,200 1 4,315 4,200 1 Finance 7,759 7,757 1 10,916 10,912 2 Forest Products & Paper 1,587 1,376 0 1,583 1,271 0 Healthcare, Education and Childcare 9,740 9,613 2 9,783 9,752 2 Healthcare & Pharmaceuticals 49,296 48,667 9 71,696 62,275 11 High Tech Industries 79,358 73,154 13 58,803 58,715 11 Hotel, Gaming & Leisure 10,128 8,823 2 4,906 4,898 1 Joint Ventures 55,139 45,141 8 64,365 60,474 11 Machinery (Non-Agrclt/Constr/Electr) 9,524 9,716 2 7,748 8,967 2 Media: Advertising, Printing & Publishing 150 281 - 150 246 0 Media: Broadcasting & Subscription 13,081 13,848 2 12,407 13,255 2 Media: Diversified & Production 7,160 7,175 1 6,272 6,365 1 Metals & Mining 15,763 15,052 3 15,342 13,647 3 Retail 10,748 10,787 2 6,144 6,775 1 Services: Business 72,599 73,124 13 76,071 77,798 14 Services: Consumer 8,347 7,980 1 990 990 0 Telecommunications 9,473 8,541 2 7,521 6,675 1 Textiles and Leather 12,640 12,408 2 12,496 11,095 2 Transportation: Cargo 11,566 11,484 2 - - - Transportation: Consumer 7,666 7,377 1 7,795 7,837 1 Total $ 630,191 $ 571,656 100 % $ 605,396 $ 547,573 100 % The Company may invest up to At September 30, Investments in CLO Fund Securities The Company has made non-controlling investments in the most junior class of securities (typically preferred shares or subordinated securities) of CLO Funds. These securities also are entitled to recurring distributions which generally equal the net remaining cash flow of the payments made by the underlying CLO In January 2021, the Company sold 28 Affiliate Investments: The following table details investments in affiliates at September 30, Industry Fair Value Purchases/ Net Transfers Net change in unrealized Realized Fair Value Principal / Shares at Interest Dividend Asset Manager Affiliates(1)(2)(4) Asset $ — — — — — — $ — $ — $ — Tank Partners Equipment Holdings, LLC(1)(2)(3)(6) Energy: Oil & $ — — — — — — $ — $ 49,000 — — Tank Partners Equipment Holdings, LLC(1)(2)(3) Energy: Oil & $ 207,766 0 — — (164,564 ) — $ 43,202 $ 511,269 (5,384 ) — Flight Lease VII (2)(4) Aerospace and Defense $ — 280,170 — — 19,830 — $ 300,000 $ 1,938 — — KCAP Freedom 3, LLC (1)(3) Joint Venture $ 19,748,808 2,500,000 — — 1,697,493 — $ 23,946,301 $ 27,220,000 — — Total controlled affiliates 19,956,574 2,780,170 — — 1,552,759 — 24,289,503 27,782,207 (5,384 ) — BCP Great Lakes Holdings LP(5)(7) Joint Venture $ 29,600,355 13,125,919 — — 956,539 — $ 43,682,813 $ 43,143,519 — 3,015,317 Flight Lease XII(1)(2)(5) Aerospace and Defense $ — 529,787 — — 50,661 — $ 580,448 $ 1,000 — — Kleen-Tech Acquisition, LLC(1)(2)(5) Services: Business $ — 1,264,409 — — (24,409 ) — $ 1,240,000 $ 250,000 — — Northeast Metal Works LLC(1)(2)(5) Metals & Mining $ — 11,871,846 1,184,932 — 440,087 (1,174,538 ) $ 12,322,327 $ 14,002,644 448,604 — BMP Slappey Holdco, LLC(1)(2)(5) Telecommunications $ — 466,949 — — (25,344 ) — $ 441,605 $ 200,000 — — BMP Slappey Holdco, LLC(1)(2)(5) Telecommunications $ — 207,666 — — (11,271 ) — $ 196,395 $ 88,946 — — Surge Hippodrome Holdings LLC(1)(2)(5) Services: Business $ — 357,029 — — (57,029 ) — $ 300,000 $ 176 — — Surge Hippodrome Holdings LLC(1)(2)(5) Services: Business $ — 159,322 — — 20,678 — $ 180,000 $ 10 — — ($ in thousands) Industry Fair Value Purchases/ Net Transfers Net Change in Unrealized Realized Fair Value Principal / Shares at September 30, 2022 Interest Dividend Asset Manager Affiliates(1)(2)(3) Asset $ - $ - $ - $ - $ - $ - $ - - $ - $ - Tank Partners Equipment Holdings, LLC(1)(2)(3)(6) Energy: Oil & - - - - - - - 49,000 - - Tank Partners Equipment Holdings, LLC(1)(2)(3) Energy: Oil & 43 - - - - - 43 511 - - Flight Lease VII (1)(2)(4)(6) Aerospace and Defense 256 - - - (6 ) - 250 1,938 - - ProAir, LLC(1)(2)(3)(6) Capital Equipment - - - 4,261 (2,783 ) - 1,478 2,749,997 - - ProAir, LLC(1)(2)(3) Capital Equipment - 1,931 - - - - 1,931 1,931 181 - KCAP Freedom 3, LLC (1)(3) Joint Venture 23,062 - - - (4,872 ) - 18,190 27,220 - 3,262 Total controlled affiliates $ 23,361 $ 1,931 $ - $ 4,261 $ (7,661 ) $ - $ 21,892 $ 181 $ 3,262 BCP Great Lakes Holdings LP(5)(7) Joint Venture $ 37,412 $ 1,700 $ - $ (38,124 ) $ (461 ) $ (527 ) $ - - $ - 3,099 Series A-Great Lakes Funding II LLC(5)(6)(8) Joint Venture - (10,399 ) - 38,124 (774 ) - 26,951 27,724,363 - - Flight Lease XII(1)(2)(5)(6) Aerospace and Defense 677 (742 ) - - (147 ) 212 - - - - GreenPark Infrastructure, LLC(1)(2)(5)(6) Energy: Electricity - 500 - - - - 500 1,000 - - GreenPark Infrastructure, LLC(1)(2)(5)(6)(8) Energy: Electricity - 171 - - - - 171 500 - - GreenPark Infrastructure, LLC(5)(8) Energy: Electricity - - - - - - - - - - Kleen-Tech Acquisition, LLC (1)(2)(5)(6) Services: Business 1,612 - - - (322 ) - 1,290 250,000 - - Northeast Metal Works LLC (1)(2)(5) Metals & Mining 12,280 401 (10 ) - 577 - 13,248 14,477 1,089 - Northeast Metal Works LLC (1)(2)(5)(6) Metals & Mining - - - - 460 - 460 2,368 - - BMP Slappey Holdco, LLC (1)(2)(5)(6) Telecommunications 492 - - - 60 - 552 200,000 - - BMP Slappey Investment II (1)(2)(5)(6) Telecommunications 219 - - - 27 - 246 88,946 - - Surge Hippodrome Partners LP(1)(2)(5)(6) Services: Business 336 - - - 387 - 723 185 - - Surge Hippodrome Holdings LLC(1)(2)(5)(6) Services: Business 201 - - - 230 - 431 10 - - Surge Hippodrome Holdings LLC(1)(2)(5) Services: Business 5,160 - 155 - (226 ) - 5,089 5,460 375 - VTK Acquisition, Inc.(1)(2)(5) Capital Equipment 1,531 (1,536 ) 33 - (28 ) - - - 57 - VTK Acquisition, Inc.(1)(2)(5) Capital Equipment 2,598 (2,628 ) 110 - (80 ) - - - 107 - VTK Acquisition, Inc.(1)(2)(5)(6) Capital Equipment 535 (369 ) - - (284 ) 118 - - - - Navex Topco, Inc.(1)(2)(5) Electronics 7,609 - 63 - (202 ) - 7,470 7,700 470 - Zest Acquisition Corp.(1)(2)(5) Healthcare, Education and Childcare 3,480 - 2 - (91 ) - 3,391 3,500 223 - Total Non-controlled affiliates $ 74,142 $ (12,902 ) $ 353 $ - $ (874 ) $ (197 ) $ 60,522 $ 2,321 $ 3,099 Total Affiliated Investments $ 97,503 $ (10,971 ) $ 353 $ 4,261 $ (8,535 ) $ (197 ) $ 82,414 $ 2,502 $ 6,361 Surge Hippodrome Holdings LLC(1)(2)(5) Services: Business $ — 62,571 — — (62,571 ) — $ — $ 105 — — VTK Acquisition, Inc.(1)(2)(5) Capital Equipment $ — 1,428,956 59,581 — 45,257 — $ 1,533,793 $ 1,536,097 32,674 — VTK Acquisition, Inc.(1)(2)(5) Capital Equipment $ — 2,325,092 169,449 — 49,149 (5,333 ) $ 2,538,357 $ 2,712,500 73,260 — VTK Acquisition, Inc.(1)(2)(5) Capital Equipment $ — 250,959 — — 239,041 — $ 490,000 $ 90 — — Navex Topco, Inc.(1)(2)(5) Electronics $ 7,488,250 — 62,886 — 1,294 — $ 7,552,430 $ 7,700,000 415,383 — Zest Acquisition Corp.(1)(2)(5) Healthcare, Education and Childcare $ 3,291,400 — 2,105 — 191,795 — $ 3,485,300 $ 3,500,000 221,083 — GIG Rooster Holdings I, LLC (1)(2) Energy: Oil & $ 123,354 — — — (44,154 ) — $ 79,200 99 — — Total Non-controlled affiliates 40,503,359 32,050,505 1,478,953 — 1,769,723 (1,179,871 ) 74,622,668 73,135,186 1,191,004 3,015,317 Total Affiliated Investments $ 60,459,933 $ 34,830,675 $ 1,478,953 $ — $ 3,322,482 $ (1,179,871 ) $ 98,912,171 $ 100,917,393 $ 1,185,620 $ 3,015,317 29 The following table details investments in affiliates at December 31, Industry Fair Value Purchases/ Net Transfers Net change in unrealized Realized Fair Value Principal at Interest Dividend Asset Manager Affiliates(4)(6) Asset $ — — — — — $ — $ — $ 17,791,230 $ — $ — Tank Partners Equipment Holdings, LLC(3)(4)(5)(8) Energy: Oil & — — — — — — — 49,000 — — Tank Partners Equipment Holdings, LLC(3)(4)(5) Energy: Oil & 403,616 — — (195,850 ) — 207,766 699,199 — — KCAP Freedom 3, LLC (3)(5) Joint Venture 21,307,899 — — — (1,559,091 ) 0 19,748,808 24,720,000 — 4,262,781 Total controlled affiliates 21,711,515 — — — (1,754,941 ) — 19,956,574 43,259,429 — 4,262,781 BCP Great Lakes Holdings LP(7)(9) Joint Venture 23,780,068 6,337,919 — — (517,632 ) — 29,600,355 30,077,688 — 2,648,637 Catamaran CLO 2013-1, Ltd. (1)(2)(3)(7) CLO Fund 5,025,536 (356,296 ) 480,782 (2,611,423 ) (2,538,599 ) — — 11,720,000 480,782 — Catamaran CLO 2014-1, Ltd. (1)(2)(3)(7) CLO Fund 6,379,580 (579,607 ) 582,206 (3,835,632 ) (2,546,548 ) — — 15,160,600 582,206 — Catamaran CLO 2014-2, Ltd. (1)(2)(3)(7) CLO Fund 1,139,032 (60,226 ) 53,127 — (1,131,933 ) — — 9,900,000 53,127 — Catamaran CLO 2015-1, Ltd. (1)(2)(3)(7) CLO Fund 2,514,130 (232,157 ) 285,634 (1,609,400 ) (958,207 ) — — 4,952,000 285,634 — Catamaran CLO 2016-1, Ltd. (1)(2)(3)(7) CLO Fund 6,395,016 (1,084,589 ) 703,769 (3,549,000 ) (2,465,197 ) — — 10,140,000 703,769 — Catamaran CLO 2018-1, Ltd. (1)(2)(3)(7) CLO Fund 8,530,751 (1,552,728 ) 1,116,320 (6,655,000 ) (1,439,343 ) — — 10,000,000 1,116,320 — Navex Topco, Inc.(3)(4)(7) Electronics 7,636,090 — 83,487 — (231,327 ) — 7,488,250 7,700,000 575,477 — Zest Acquisition Corp.(3)(4)(7) Healthcare, Education and Childcare 3,306,092 — 2,808 — (17,500 ) — 3,291,400 3,500,000 310,292 — OCI Holdings, LLC(3)(4)(7) Healthcare & Pharmaceuticals 2,422,281 (2,706,977 ) — — — 284,696 — — — — GIG Rooster Holdings I, LLC (10) Energy: Oil & — (200,156 ) — — 123,354 200,156 123,354 99 — — Total Non-controlled affiliates 67,128,578 (434,817 ) 3,308,133 (18,260,455 ) (11,722,931 ) 484,852 40,503,359 103,150,387 4,107,606 2,648,637 Total Affiliated Investments $ 88,840,092 $ (434,817 ) $ 3,308,133 $ (18,260,455 ) $ (13,477,872 ) $ 484,852 $ 60,459,933 $ 146,409,816 $ 4,107,607 $ 6,911,418 ($ in thousands) Industry Fair Value Purchases/ Net Transfers Net Change in Unrealized Realized Fair Value Principal / Shares at Interest Dividend Asset Manager Affiliates(1)(2)(3) Asset $ — $ — $ — $ — $ — $ — $ — $ — $ — Tank Partners Equipment Holdings, LLC(1)(2)(3)(6) Energy: Oil & — — — — — — — 49,000 — — Tank Partners Equipment Holdings, LLC(1)(2)(3) Energy: Oil & 208 0 — — (164 ) — 43 511 — — Flight Lease VII (1)(2)(4)(6) Aerospace and Defense — 280 — — (24 ) — 256 1,938 — — KCAP Freedom 3, LLC (1)(3) Joint Venture 19,749 2,500 — — 813 — 23,062 27,220 — 5,170 Total controlled affiliates 19,957 2,780 — — 625 — 23,361 27,782 — 5,170 BCP Great Lakes Holdings LP(5)(7) Joint Venture 29,600 6,933 — — 879 — 37,412 36,950 — 4,006 Flight Lease XII(1)(2)(5)(6) Aerospace and Defense — 530 — — 147 — 677 1,000 — — Kleen-Tech Acquisition, LLC (1)(2)(5)(6) Services: Business — 1,264 — — 347 — 1,612 250,000 — — Northeast Metal Works LLC (1)(2)(5) Metals & Mining — 11,944 2,141 — (1,805 ) — 12,280 14,074 802 — Northeast Metal Works LLC (1)(2)(5)(6) Metals & Mining — — — — — — — 2,368 — — BMP Slappey Holdco, LLC (1)(2)(5)(6) Telecommunications — 467 — — 25 — 492 200,000 — — BMP Slappey Holdco, LLC (1)(2)(5)(6) Telecommunications — 208 — — 11 — 219 88,946 — — Surge Hippodrome Holdings LLC(1)(2)(5)(6) Services: Business — 425 — — (89 ) — 336 185 — — Surge Hippodrome Holdings LLC(1)(2)(5)(6) Services: Business — 159 — — 42 — 201 10 — — Surge Hippodrome Holdings LLC(1)(2)(5) Services: Business — 4,809 117 — 235 — 5,160 5,460 422 — VTK Acquisition, Inc.(1)(2)(5) Capital Equipment — 1,429 75 — 28 — 1,531 1,536 59 — VTK Acquisition, Inc.(1)(2)(5) Capital Equipment — 2,259 259 — 80 — 2,598 2,625 130 — VTK Acquisition, Inc.(1)(2)(5)(6) Capital Equipment — 251 — — 284 — 535 90 — — Navex Topco, Inc.(2)(5) Electronics 7,488 — 84 — 36 — 7,609 7,700 555 — Zest Acquisition Corp.(1)(2)(5) Healthcare, Education and Childcare 3,291 — 3 — 185 — 3,480 3,500 294 — GIG Rooster Holdings I, LLC (2)(5) Energy: Oil & 123 (139 ) — — (123 ) 139 — — — — Total Non-controlled affiliates 40,503 30,539 2,679 - 282 139 74,142 72,387 2,262 4,006 Total Affiliated Investments $ 60,460 $ 33,319 $ 2,679 $ - $ 907 $ 139 $ 97,503 $ 100,169 $ 2,262 $ 9,176 30 Investments in Joint Ventures For the three months ended September 30, KCAP Freedom 3 LLC During the third quarter of 2017, the Company and Freedom 3 Opportunities LLC (“Freedom 3 Opportunities”), an affiliate of Freedom 3 Capital LLC, entered into an agreement to create The Company has determined that the F3C Joint Venture is an investment company under Accounting Standards Codification (“ASC”), Financial Services — Investment Companies (“ASC 946”), however, in accordance with such guidance, the Company will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. The Company does not consolidate its interest in the F3C Joint Venture because the Company does not control the F3C Joint Venture due to allocation of the voting rights among the F3C Joint Venture partners. KCAP Freedom 3 LLC Summarized As of September 30, 2021 As of (unaudited) Cash $ — $ — Investment at fair value 36,834,689 31,404,100 Total Assets $ 36,834,689 $ 31,404,100 Total Liabilities $ 166,234 $ 167,389 Total Equity 36,668,455 31,236,711 Total Liabilities and Equity $ 36,834,689 $ 31,404,100 ($ in thousands) As of September 30, 2022 As of December 31, 2021 Cash $ — $ — Investment at fair value 28,703 35,841 Total Assets $ 28,703 $ 35,841 Total Liabilities $ 164 $ 164 Total Equity $ 28,539 $ 35,677 Total Liabilities and Equity $ 28,703 $ 35,841 KCAP Freedom 3 LLC Summarized (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2022 2021 2022 2021 Investment income $ 1,619,634 $ 1,294,081 $ 4,918,670 $ 3,689,714 $ 2,542 $ 1,620 $ 6,938 $ 4,919 Operating expenses 36,279 1,997 52,434 33,497 2 36 5 52 Net investment income 1,583,355 1,292,084 4,866,236 3,656,217 $ 2,540 $ 1,584 $ 6,933 $ 4,867 Unrealized appreciation on investments (765,565 ) 1,779,745 564,353 (5,583,581 ) $ (4,199 ) $ (766 ) $ (9,282 ) $ 564 Net income $ 817,790 $ 3,071,829 $ 5,430,589 $ (1,927,366 ) $ (1,659 ) $ 818 $ (2,349 ) $ 5,431 KCAP Freedom 3 LLC Schedule of Investments September 30, (Unaudited) Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 6.8%, 12/29 maturity 100.0 % $ 42,299,908 $ 36,834,689 Total Investments $ 42,299,908 $ 36,834,689 Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 23.7%, 12/29 maturity 100.0 % $ 42,990 $ 28,703 Total Investments $ 42,990 $ 28,703 31 KCAP Freedom 3 LLC Schedule of Investments December 31, ($ in thousands) Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 12.3%, 12/29 maturity 100.0 % $ 38,986,212 $ 31,404,100 Total Investments $ 38,986,212 $ 31,404,100 Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 21.3%, 12/29 maturity 100.0 % $ 40,847 $ 35,841 Total Investments $ 40,847 $ 35,841 The Great Lakes II Joint Venture is a Delaware series limited liability company, and pursuant to the terms of the Great Lakes Funding II LLC Limited Liability Company Agreement (the “Great Lakes II LLC Agreement”), prior to the The fair value of the Company’s investment in the As of September 30, Fair Value Measurements The Company follows the provisions of ASC 820: Fair Value, which among other matters, requires enhanced disclosures about investments that are measured and reported at fair value. This standard defines fair value and establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value and expands disclosures about assets and liabilities measured at fair value. ASC 820: Fair Value defines “fair value” as 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. This fair value definition focuses on an exit price in the principle, or most advantageous market, and prioritizes, within a measurement of fair value, the use of market-based inputs (which may be weighted or adjusted for relevance, reliability and specific attributes relative to the subject investment) over entity-specific inputs. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. ASC 820: Fair Value establishes the following three-level hierarchy, based upon the transparency of inputs to the fair value measurement of an asset or liability as of the measurement date: Level I – Unadjusted quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I include listed equities and listed securities. As required by ASC 820: Fair Value, the Company does not adjust the quoted price for these investments, even in situations where the Company holds a large position and a sale could reasonably affect the quoted price. Level II – Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date. Such inputs may be quoted prices for similar assets or liabilities, quoted markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full character of the financial instrument, or inputs that are derived principally from, or corroborated by, observable market information. Investments which are generally included in this category include illiquid debt securities and less liquid, privately held or restricted equity securities for which some level of recent trading activity has been observed. Level III – Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs may be based on the Company’s own assumptions about how market participants would price the asset or liability or may use Level II inputs, as adjusted, to reflect specific investment attributes relative to a broader market assumption. These inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data for comparable performance or valuation measures (earnings multiples, discount rates, other financial/valuation ratios, etc.) are available, such investments are grouped as Level III if any significant data point that is not also market observable (private company earnings, cash flows, etc.) is used in the valuation methodology. 32 In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and the Company considers factors specific to the investment. A majority of the Company’s investments are classified as Level III. The Company evaluates the source of inputs, including any markets in which its investments are trading, in determining fair value. Inputs that are highly correlated to the specific investment being valued and those derived from reliable or knowledgeable sources will tend to have a higher weighting in determining fair value. The Company’s fair value determinations may include factors such as an assessment of each underlying investment, its current and prospective operating and financial performance, consideration of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance factors, and other investment or industry specific market data, among other factors. The following table summarizes the fair value of investments by fair value hierarchy levels provided by ASC 820: Fair Value as of September 30, As of September 30, 2021 As of September 30, 2022 (Unaudited) Level I Level II Level III NAV Total ($ in thousands) Level I Level II Level III NAV Total Debt securities — 71,815,844 383,264,032 — 455,079,876 $ - $ 65,152 $ 412,245 $ - $ 477,397 Equity securities 1,317 - 23,170 - 24,487 CLO Fund securities — — 17,173,634 — 17,173,634 - - 24,623 - 24,623 Equity securities 1,546,700 — 20,752,059 — 22,298,759 Joint Ventures — — 23,946,301 43,682,813 67,629,114 - - 18,190 26,951 45,141 Derivatives — — (1,982,091 ) — (1,982,091 ) - - 8 - 8 Total $ 1,546,700 $ 71,815,844 $ 443,153,935 $ 43,682,813 $ 560,199,292 $ 1,317 $ 65,152 $ 478,236 $ 26,951 $ 571,656 As of December 31, 2021 ($ in thousands) Level I Level II Level III NAV Total Debt securities — 42,861 392,432 — 435,293 CLO Fund securities — — 31,632 — 31,632 Equity securities 1,594 — 20,992 — 22,586 Joint Ventures — — 23,062 37,412 60,474 Derivatives — — (2,412 ) — (2,412 ) Total $ 1,594 $ 42,861 $ 465,706 $ 37,412 $ 547,573 As of December 31, 2020 Level I Level II Level III NAV Total Debt securities — 70,615,841 334,245,014 — 404,860,855 CLO Fund securities — — 19,582,555 — 19,582,555 Equity securities 1,407,907 — 12,536,969 — 13,944,876 Joint Ventures — — 19,748,808 29,600,355 49,349,163 Derivatives — — (1,108,618 ) — (1,108,618 ) Total $ 1,407,907 $ 70,615,841 $ 385,004,728 $ 29,600,355 $ 486,628,831 As a BDC, the Company is required to invest primarily in the debt and equity of non-public companies for which there is little, if any, market-observable information. As a result, a significant portion of the Company’s investments at any given time will likely be deemed Level III investments. Investment values derived by a third-party pricing service are generally deemed to be Level III values. For those that have observable trades, the Company considers them to be Level II. The fair value of the Company’s investment in the Subject to the limitations noted above, values derived for debt and equity securities using comparable public/private companies generally utilize market-observable data from such comparables and specific, non-public and non-observable financial measures (such as earnings or cash flows) for the private, underlying company/issuer. Such non-observable company/issuer data is typically provided on a monthly or quarterly basis, is certified as correct by the management of the company/issuer and/or audited by an independent accounting firm on an annual basis. Since such private company/issuer data is not publicly available it is not deemed market-observable data and, as a result, such investment values are grouped as Level III assets. The Company’s policy for determining transfers between levels is based solely on the previously defined three-level hierarchy for fair value measurement. Transfers between the levels of the fair value hierarchy are separately noted in the tables below and the reason for such transfer described in each table’s respective footnotes. Certain information relating to investments measured at fair value for which the Company has used unobservable inputs to determine fair value is as follows: Nine Months Ended September 30, 2021 Debt CLO Fund Equity Asset Manager Joint Derivatives Total Balance, December 31, 2020 $ 334,245,014 $ 19,582,555 $ 12,536,969 $ — $ 19,748,808 $ (1,108,618 ) $ 385,004,728 Transfers out of Level III¹ (13,819,153 ) — — — — — (13,819,153 ) Transfers into Level III² 20,127,220 — — — — — 20,127,220 Net accretion 23,179,552 — — — — — 23,179,552 Purchases 443,995,812 — 8,755,374 — 2,500,000 — 455,251,186 Sales/Paydowns/Return of Capital (409,189,744 ) (6,440,089 ) (4,480,717 ) — — (880,000 ) (420,990,550 ) Total realized gain (loss) included in earnings (7,208,326 ) (5,323,484 ) 173,666 — — 880,000 (11,478,144 ) Change in unrealized gain (loss) included in earnings (8,066,343 ) 9,354,652 3,766,767 — 1,697,493 (873,473 ) 5,879,096 Balance, September 30, 2021 $ 383,264,032 $ 17,173,634 $ 20,752,059 $ — $ 23,946,301 $ (1,982,091 ) $ 443,153,935 Changes in unrealized gains (losses) included in earnings related to investments still held at reporting date $ 7,904,884 $ 4,031,169 $ 3,067,453 $ — $ 1,697,493 $ — $ 16,700,999 Nine Months Ended September 30, 2022 ($ in thousands) Debt Equity CLO Fund Joint Derivatives Total Balance, December 31, 2021 $ 392,432 $ 20,992 $ 31,632 $ 23,062 $ (2,412 ) $ 465,706 Transfers out of Level III¹ (13,988 ) - - - - (13,988 ) Transfers into Level III² 5,351 - - - - 5,351 Net accretion 7,810 - 3,476 - - 11,286 Purchases 153,420 3,817 - - - 157,237 Sales/Paydowns/Return of Capital (120,378 ) (4,092 ) (5,571 ) - 2,075 (127,966 ) Total realized gain (loss) included in earnings (14,624 ) 1,271 (12,054 ) - (2,095 ) (27,502 ) Change in unrealized gain (loss) included in earnings 2,222 1,182 7,140 (4,872 ) 2,440 8,112 Balance, September 30, 2022 $ 412,245 $ 23,170 $ 24,623 $ 18,190 $ 8 $ 478,236 Changes in unrealized gains (losses) included in earnings related to investments still held at reporting date $ (10,299 ) $ 1,613 $ 4,722 $ (4,872 ) $ (2 ) $ (8,838 ) Year Ended December 31, 2020 Debt CLO Fund Equity Asset Manager Joint Derivatives Total Balance, December 31, 2019 $ 148,382,726 $ 31,968,202 $ 9,864,419 $ — $ 21,307,899 $ (33,437 ) $ 211,489,810 Transfers out of Level III¹ (5,522,415 ) — — — — — (5,522,415 ) Transfers into Level III² 5,292,441 — — — — — 5,292,441 Net accretion 7,414,985 3,541,296 — — — — 10,956,281 Purchases 297,330,176 — 3,529,804 — — — 300,859,980 Sales/Paydowns/Return of Capital (100,652,817 ) (4,432,200 ) (1,515,936 ) — — (976,968 ) (107,577,921 ) Total realized gain (loss) included in earnings 7,928,224 — (989,131 ) — — 976,968 7,916,061 Change in unrealized gain (loss) included in earnings (25,928,306 ) (11,494,743 ) 1,647,812 — (1,559,091 ) (1,075,182 ) (38,409,510 ) Balance, December 31, 2020 $ 334,245,014 $ 19,582,555 $ 12,536,969 $ — $ 19,748,808 $ (1,108,618 ) $ 385,004,728 Changes in unrealized gains (losses) included in earnings related to investments still held at reporting date $ (7,416,722 ) $ (11,494,743 ) $ 1,647,812 $ — $ (1,559,091 ) $ (1,075,182 ) $ (19,897,926 ) 33 Nine Months Ended September 30, 2021 ($ in thousands) Debt Equity CLO Fund Joint Derivatives Total Balance, December 31, 2020 $ 334,245 $ 12,537 $ 19,583 $ 19,749 $ (1,109 ) $ 385,005 Transfers out of Level III¹ (13,819 ) - - - - (13,819 ) Transfers into Level III² 20,127 - - - - 20,127 Net accretion 23,180 - - - - 23,180 Purchases 443,996 8,755 - 2,500 - 455,251 Sales/Paydowns/Return of Capital (409,189 ) (4,481 ) (6,441 ) - (880 ) (420,991 ) Total realized gain (loss) included in earnings (7,209 ) 174 (5,323 ) - 880 (11,478 ) Change in unrealized gain (loss) included in earnings (8,067 ) 3,767 9,355 1,697 (873 ) 5,879 Balance, September 30, 2021 $ 383,264 $ 20,752 $ 17,174 $ 23,946 $ (1,982 ) $ 443,154 Changes in unrealized gains (losses) included in earnings related to investments still held at reporting date $ 7,905 $ 3,068 $ 4,031 $ 1,697 $ - $ 16,701 As of September 30, As of September 30, Type Fair Value Primary Valuation Unobservable Range of Inputs $ 21,830,243 Enterprise Value Average 0.0x-9.3x (5.5x) Debt Securities Recovery Rate Multiple 0.0x-0.1x (0.1x) 308,345,527 Income Approach Implied 4.9%-51.4% (11.5%) 53,088,262 Recent Transaction Transaction Price 97.3 - 99.3 (98.1) $ 14,643,561 Enterprise Value Average 0.0x-12.8x (8.9x) Equity Securities Recovery Rate Multiple 0.0x-8.0x (0.3x) 6,108,498 Income Approach Implied 15.5%-15.7% (15.5%) Discount Rate 13.0%-13.5% (13.1%) Probability of 1.5%-2.0% (1.8%) CLO Fund Securities 17,173,634 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Discount Rate 14.0%-15.5% (14.8%) Probability of 2.5%-3.0% (2.8%) Joint Ventures 23,946,301 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Derivatives (1,982,091 ) Market Approach Transacted Value/Contractual Financing Rate Total Level III Investments $ 443,153,935 Type Fair Value Primary Valuation Unobservable Range of Inputs $ 4,939 Enterprise Value Average 0.4x-6.4x (4.0x) Debt Securities Recovery Rate Multiple 0.1x-0.1x (0.1x) 374,672 Income Approach Implied 5.1%-44.9% (13.3%) 32,634 Recent Transaction Implied 7.0%-14.0% (9.5%) 20,626 Enterprise Value Average 0.0x-15.5x (6.8x) Equity Securities Recovery Rate 0.9x-0.9x (0.9x) 1,800 Income Approach Implied 14.0%-15.0% (14.8%) 744 Recent Transaction Implied 12.4%-18.7% (13.0%) Discount Rate 19.4%-25.6% (22.5%) Probability of 1.5%-2.0% (1.8%) CLO Fund Securities 24,623 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Discount Rate 21.6%-23.2% (22.4%) Probability of 2.5%-3.0% (2.8%) Joint Ventures 18,190 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Derivatives 8 Market Approach Transacted Value/Contractual Financing Rate Total Level III Investments $ 478,236 34 As of December 31, Type Fair Value Primary Valuation Unobservable Range of Inputs $ 8,651,448 Enterprise Value Average 4.8x-7.5x (5.6x) Debt Securities Recovery Rate Multiple 0.0x-1.0x (0.7x) 325,593,566 Income Approach Implied 5.2%-27.6% (10.2%) $ 7,036,969 Enterprise Value Average 1.0x-9.0x (5.9x) Recovery Rate Multiple 0.0x-12.5x (0.6x) Equity Securities 5,500,000 Income Approach Implied 17.8%-18.5% (18.1%) Discount Rate 13.0%-14.5% (13.8%) Probability of 1.5%-4.0% (2.7%) CLO Fund Securities 19,582,555 Discounted Cash Flow Loss Severity 20.5%-30.5% (25.5%) Recovery Rate 69.5%-79.5% (74.5%) Prepayment 0.0%-25.0% (12.5%) Discount Rate 14.0%-16.0% (15.0%) Probability of 3.0%-5.0% (4.0%) Joint Ventures 19,748,808 Discounted Cash Flow Loss Severity 21.0%-31.0% (26.0%) Recovery Rate 69.0%-79.0% (74.0%) Prepayment 0.0%-25.0% (12.5%) Derivatives (1,108,618 ) Market Approach Transacted Value/Contractual Financing Rate Total Level III Investments $ 385,004,728 Type Fair Value Primary Valuation Unobservable Range of Inputs $ 24,513 Enterprise Value Average 0.0x-8.0x (4.3x) Debt Securities Recovery Rate Multiple 0.1x-0.1x (0.1x) 367,919 Income Approach Implied 0%-26.8% (8.9%) $ 12,874 Enterprise Value Average 0.0x-12.5x (8.7x) Equity Securities Recovery Rate Multiple 0.0x-0.0x (0.0x) 8,118 Income Approach Implied 10.7%-18.8% (17.2%) Discount Rate 13.0%-20.1% (16.6%) Probability of 1.5%-2.0% (1.8%) CLO Fund Securities 31,632 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Discount Rate 14.5%-16.0% (15.3%) Probability of 2.5%-3.0% (2.8%) Joint Ventures 23,062 Discounted Cash Flow Loss Severity 25.0%-35.0% (30.0%) Recovery Rate 65.0%-75.0% (70.0%) Prepayment 15.0%-25.0% (20.0%) Derivatives (2,412 ) Market Approach Transacted Value/Contractual Financing Rate Total Level III Investments $ 465,706 The significant unobservable inputs used in the fair value measurement of the Company’s debt securities may include, among other things, broad market indices, the comparable yields of similar investments in similar industries, effective discount rates, average EBITDA multiples, and weighted average cost of capital. Significant increases or decreases in such comparable yields would result in a significantly lower or higher fair value measurement, respectively. The significant unobservable inputs used in the fair value measurement of the Company’s equity securities include the EBITDA multiple of similar investments in similar industries and the weighted average cost of capital. Significant increases or decreases in such inputs would result in a significantly lower or higher fair value measurement. Significant unobservable inputs used in the fair value measurement of the Company’s CLO Fund Securities include default rates, recovery rates, prepayment rates, spreads, and the discount rate by which to value the resulting underlying cash flows. Such assumptions can vary significantly, depending on market data sources which often vary in depth and level of analysis, understanding of the CLO market, detailed or broad characterization of the CLO market and the application of such data to an appropriate framework for analysis. The application of data points are based on the specific attributes of each individual CLO Fund Security’s underlying assets, historic, current and prospective performance, vintage, and other quantitative and qualitative factors that would be evaluated by market participants. The Company evaluates the source of market data for reliability as an indicative market input, consistency amongst other inputs and results and also the context in which such data is presented. Significant increases or decreases in probability of default and loss severity inputs in isolation would result in a significantly lower or higher fair value measurement, respectively. In general, a change in the assumption of the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity in an event of default. Significant increases or decreases in the discount rate in isolation would result in a significantly lower or higher fair value measurement. The Company’s investment in the F3C Joint 35 The Company values derivative contracts using various pricing models that take into account the terms of the contract (including notional amount and contract maturity) and observable and unobservable inputs such as interest rates and changes in fair value of the reference asset. The following table details derivative investments at September 30, September 30, 2021 ($ in thousands) September 30, 2022 Types of contracts Notional amounts Derivative assets (liabilities) 1 Realized gain(loss) Unrealized gain(loss) Notional amounts Derivative assets (liabilities) Realized gain(loss) Unrealized gain(loss) Call option $ 7,656 $ 18,054 $ — $ 18,054 Call option(2) $ 8 $ 8 $ - $ (2 ) Put option 150,000 — — — 150 - - - Securities Swap and Option Agreement 5,500,000 (2,000,145 ) 880,000 (1,120,145 ) - - (2,095 ) 2,442 Total $ 5,657,656 $ (1,982,091 ) $ 880,000 $ (1,102,091 ) $ 158 $ 8 $ (2,095 ) $ 2,440 (1) Net amount included in the derivative caption on the consolidated balance sheets (1) Net amount included in the derivative caption on the consolidated balance sheets (1) Net amount included in the derivative caption on the consolidated balance sheets (2) Net amount included in non-controlled/non- affiliated investments on the consolidated balance sheets (2) Net amount included in non-controlled/non- affiliated investments on the consolidated balance sheets December 31, 2020 ($ in thousands) December 31, 2021 Types of contracts Notional amounts Derivative assets (liabilities) 1 Realized gain(loss) Unrealized gain(loss) Notional amounts Derivative assets (liabilities) (1) Realized gain(loss) Unrealized gain(loss) Call option $ 7,656 $ 12,077 $ — $ (18,532 ) $ 8 $ 10 $ - $ (2 ) Put option 150 - - - Securities Swap and Option Agreement 5,500,000 (1,120,695 ) — (1,120,695 ) 5,500 (2,422 ) 880 (1,301 ) Total $ 5,507,656 $ (1,108,618 ) $ — $ (1,139,227 ) $ 5,658 $ (2,412 ) $ 880 $ (1,303 ) (1) Net amount included in the derivative caption on the consolidated balance sheets (1) Net amount included in the derivative caption on the consolidated balance sheets (1) Net amount included in the derivative caption on the consolidated balance sheets 5. RELATED PARTY TRANSACTIONS Advisory Agreement The Adviser provides management services to the Company pursuant to the Advisory Agreement. Under the terms of the Advisory Agreement, the Adviser is responsible for the following: The Adviser’s services under the Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to the Company are not impaired. Term Unless earlier terminated as described below, the Investment Advisory Agreement will remain in effect from year-to-year if approved annually by a majority of the Board or by the holders of a majority of the outstanding shares, and, in each case, a majority of the independent directors. The Advisory Agreement will automatically terminate within the meaning of the 1940 Act and related Securities and Exchange Commission (“SEC”) guidance and interpretations in the event of its assignment. In accordance with the 1940 Act, without payment of any penalty, we may terminate the Advisory Agreement with the Adviser upon 60 days’ written notice. The decision to terminate the agreement may be made by a majority of the Board or the stockholders holding a majority of the outstanding shares of our common stock. See “Advisory Agreement—Removal of Adviser” below. In addition, without payment of any penalty, the Adviser may generally terminate the Advisory Agreement upon 60 days’ written notice and, in certain circumstances, the Adviser may only be able to terminate the Advisory Agreement upon 120 days’ written notice. Removal of Adviser The Adviser may be removed by the Board or by the affirmative vote of a Majority of the Outstanding Shares. “Majority of the Outstanding Shares” means the lesser of (1) 67% or more of the outstanding shares of our common stock present at a meeting, if the holders of more than 50% of the outstanding shares of our common stock are present or represented by proxy or (2) a majority of outstanding shares of our common stock. Compensation of Adviser Pursuant to the terms of the Advisory Agreement, the Company pays the Adviser (i) a base management fee (the 36 borrowed amounts, as of the end of such calendar quarter. Subsequently, the Base Management Fee will be 1.50% of the Company’s average gross assets, excluding cash and cash equivalents, but including assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters; provided, however, that the Base Management Fee will be 1.00% of the Company’s average gross assets, excluding cash and cash equivalents, but including assets purchased with borrowed amounts, that exceed the product of (i) 200% and (ii) the value of the Company’s net asset value at the end of the most recently completed calendar quarter.The Incentive Fee consists of two parts: (1) a portion based on the Company’s pre-incentive fee net investment income (the “Income-Based Fee”) and (2) a portion based on the net capital gains received on the Company’s portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation on a cumulative basis, in each case calculated from the Effective Date, less the aggregate amount of any previously paid capital gains Incentive Fee (the “Capital Gains Fee”). The Income-Based Fee is Pre-incentive fee net investment income means dividends (including reinvested dividends), interest and fee income accrued by the Company during the calendar quarter, minus operating expenses for the quarter (including the management fee, expenses payable under the administration agreement, 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 payment-in-kind (“PIK”) interest and zero coupon securities), accrued income that the Company may not have received in cash. The Adviser is not obligated to return the incentive fee it receives on PIK interest that is later determined to be uncollectible in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. To determine the income incentive fee, pre-incentive fee net investment income is expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter. Because of the structure of the incentive fee, it is possible that the Company may pay an incentive fee in a calendar quarter in which the Company incurs a loss. For example, if the Company receives pre-incentive fee net investment income in excess of the quarterly hurdle rate, the Company will pay the applicable incentive fee even if the Company has incurred a loss in that calendar quarter due to realized capital losses and unrealized capital depreciation. In addition, because the quarterly hurdle rate is calculated based on our net assets, decreases in the Company’s net assets due to realized capital losses or unrealized capital depreciation in any given calendar quarter may increase the likelihood that the hurdle rate is reached and therefore the likelihood of the Company paying an incentive fee for the subsequent quarter. The Company’s net investment income used to calculate this component of the incentive fee is also included in the amount of the Company’s gross assets used to calculate the management fee because gross assets are total assets (including cash received) before deducting liabilities (such as declared dividend payments). The second component of the incentive fee, the capital gains incentive fee, payable at the end of each calendar year in arrears, equals The fees that are payable under the Investment Advisory Agreement for any partial period will be appropriately prorated. Limitations of Liability and Indemnification Under the Advisory Agreement, the Adviser, its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its managing member, will not be liable to the Company for acts or omissions performed in accordance with and pursuant to the Advisory Agreement, except those resulting from acts constituting criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of the duties that the Adviser owes to the Company under the Advisory Agreement. In addition, as part of the Advisory Agreement, the Company has agreed to indemnify the Adviser and each of its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with the Adviser, including without limitation its general partner, and the Administrator from and against any damages, liabilities, costs and expenses, including reasonable legal fees and other expenses reasonably incurred, in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) arising out of or otherwise based upon the performance of any of the Adviser’s duties or obligations under the Advisory Agreement or otherwise as an investment adviser of the Company, except where attributable to criminal conduct, gross negligence, willful misfeasance, bad faith or reckless disregard of such person’s duties under the Advisory Agreement. Board Approval of the Advisory Agreement On December 12, 2018, the then-current Board of the Company held an in-person meeting to consider and approve the Advisory Agreement and related matters, and on April 1, 2019 the Company entered into the Advisory Agreement with the Adviser. The Board most recently determined to re-approve the Advisory Agreement at a meeting held on March The Board, including a majority of independent directors will oversee and monitor the Company’s investment performance and annually Management fees for the three months ended September 30, and $2.1 million, respectively. Management fees for the nine months ended September 30, Administration Agreement Under the terms of the administration agreement (the “Administration Agreement”) between the Company and BC Partners Management LLC (the “Administrator”), the Administrator will perform, or oversee the performance of, required administrative services, which includes providing office space, equipment and office services, maintaining financial records, preparing reports to stockholders and reports filed with the SEC, and managing the payment of expenses and the performance of administrative and professional services rendered by others. The Company will reimburse the Administrator for services performed for us pursuant to the terms of the Administration Agreement. In addition, pursuant to the terms of the Administration Agreement, the Administrator may delegate its obligations under the Administration Agreement to an affiliate or to a third party and the Company will reimburse the Administrator for any services performed for it by such affiliate or third party. Payments under the Administration Agreement are equal to an amount that reimburses the Administrator for its costs and expenses in performing its obligations and providing personnel and facilities (including rent, office equipment and utilities) for the Company’s use under the Administration Agreement, including an allocable portion of the compensation paid to the Company’s chief compliance officer and chief financial officer and their respective staff who provide services to the Company. The Board, 37 including the independent directors, will review the general nature of the services provided by the Administrator as well as the related cost to the Company for those services and consider whether the cost is reasonable in light of the services provided. Unless earlier terminated as described below, the Administration Agreement will remain in effect from year-to-year if approved annually by a majority of the Board or by the holders of a Majority of the Outstanding Shares, and, in each case, a majority of the independent directors. On April 1, 2019, the Board approved the Administration Agreement with the Administrator and the Board most recently determined to re-approve the Administration Agreement at a meeting held on March The Company may terminate the Administration Agreement, without payment of any penalty, upon 60 days’ written notice. The decision to terminate the agreement may be made by a majority of the Board or the stockholders holding a Majority of the Outstanding Shares. In addition, the Adviser may terminate the Administration Agreement, without payment of any penalty, upon 60 days’ written notice. The Company incurred Payment of Expenses under the Advisory and Administration Agreements Except as specifically provided below, all investment professionals and staffs of the Adviser, when and to the extent engaged in providing investment advisory and management services to the Company, Co-investment Exemptive Relief As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. On October 23, 2018, the SEC issued an order granting an application for exemptive relief to an affiliate of the Adviser that allows BDCs managed by the Adviser, including the Company, to co-invest, subject to the satisfaction of certain conditions, in certain private placement transactions, with other funds managed by the Advisers or its 38 affiliates, including BCP Special Opportunities Fund I LP, Related Party Trades For the nine months ended September 30, 2022, the Company purchased $4.0 million in total investments from a fund managed by an affiliate of the Investment Advisor in accordance with, and pursuant to, procedures adopted under Rule 17a-7 of the 1940 Act. There were no transactions subject to Rule 17a-7 under the 1940 Act during both the three and nine months ended September 30, 2021. 6. BORROWINGS The Company’s debt obligations consist of the following: As of As of September 30, December 31, 2018-2 Secured Notes (net of discount of: 2021 - $1,446,983; 2020 - $2,444,512) $ 162,415,715 $ 249,418,186 4.875% Notes Due 2026 (net of discount of: 2021 - $2,266,656; 2020 - $0, net of offering costs of: 2021 - $948,071; 2020 - $0) 104,785,273 — Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of offering costs of: 2021 - $823,375; 2020 - $1,097,815) 68,247,523 48,223,083 6.125% Notes Due 2022 (net of offering costs of: 2020 - $1,058,351) — 75,667,624 $ 335,448,511 $ 373,308,893 As of As of ($ in thousands) September 30, 2022 December 31, 2021 2018-2 Secured Notes (net of discount of: 2022 - $1,270; 2021 - $1,403) $ 162,593 $ 162,460 4.875% Notes Due 2026 (net of discount of: 2022 - $1,819; 2021 - $2,157; net of deferred financing costs of: 2022 - $880; 2021 - $951) 105,301 104,892 Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net of deferred financing costs of: 2022 - $1,163; 2021 - $732) 95,908 79,839 $ 363,802 $ 347,191 The weighted average stated interest rate and weighted average maturity on all our debt outstanding as of September 30, Notes Offering On April 30, 2021, the Company issued On April 30, 2021, the Company and U.S. Bank National Association (the “Trustee”) entered into a Supplemental Indenture (the “Third Supplemental Indenture”), which supplements that certain Base Indenture, dated as of October 10, 2012 (as may be further amended, supplemented or otherwise modified from time to time, the “Base Indenture” and, together with the Third Supplemental Indenture, the “Indenture”). The Third Supplemental Indenture relates to the Company’s issuance of the The The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Sections 18(a)(1)(A) and 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Exchange Act. Additionally, the Company has agreed to use its commercially reasonable efforts to maintain a rating of the 4.875% Notes due 2026 from a rating agency, as long as the notes are outstanding. These covenants are subject to important limitations and exceptions that are described in the Indenture. In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding notes at a price equal to Sale of Additional 4.875% Notes due 2026 On June 23, 2021, the Company issued The New Notes were issued under the Indenture governing the 4.875% Notes due 2026. The New Notes were issued as “Additional Notes” under the Indenture and have identical terms to Company’s In connection with the issuance of the 4.875% Notes Due 2026, (including the New Notes) the Company incurred approximately Exchange of 4.875% Notes due 2026 On October 5, 2021, the Company filed with the SEC a registration statement relating to an offer to exchange the 4.875% Notes due 2026 for new notes issued by the Company that are registered under the Securities Act (the “Exchange Offer”), which registration statement was declared effective on December 2, 2021. Upon the terms and subject to the conditions in the prospectus relating to the Exchange Offer, the Company accepted any existing 4.875% Notes due 2026 (the “Restricted Notes”) validly tendered and not withdrawn prior to January 3, 2022, the expiration date of the Exchange Offer, and issued new 4.875% Notes due 2026 that have been registered under the Securities Act (the “Exchange Notes”). The form and terms of the Exchange Notes are substantially identical to those of the Restricted Notes, except that the transfer restrictions and 39 registration rights relating to the Restricted Notes do not apply to the Exchange Notes, and the Exchange Notes do not provide for the payment of additional interest in the event of a registration default. In addition, the Exchange Notes bear a different CUSIP number than the Restricted Notes. The Exchange Notes are issued under and entitled to the benefits of the same indenture that authorized the issuance of the Restricted Notes. On the expiration date of the Exchange Offer, all of the Restricted Notes had been validly tendered, and all of the outstanding Restricted Notes were exchanged for newly issued Exchange Notes. Fair Value of 4.875% Notes Due 2026. The 4.875% Notes Due 2026 were issued during the second quarter of 2021 and are carried at cost, net of unamortized discount of approximately 6.125% Notes Due 2022 During the third quarter of 2017, the Company issued For the three and nine months ended September 30, 2021, Redemption of 6.125% Notes due 2022 On April 30, 2021, Company notified the trustee for the Company’s expected term of the facility on an effective yield method. In connection with the anticipated refinancing of the 6.125% Notes Due 2022 during the first quarter of 2021, the Company wrote off approximately Assumption of HCAP Notes In connection with the closing of the HCAP Acquisition, on June 9, 2021, the Company entered into the HCAP Third Supplemental Indenture, effective as of the closing of the HCAP Acquisition. The HCAP Third Supplemental Indenture relates to the Company’s assumption of Pursuant to the HCAP Third Supplemental Indenture, the Company expressly assumed the due and punctual payment of the principal of (and premium, if any) and interest, if any, on the HCAP Notes and the performance of HCAP’s covenants under the base indenture, dated as of January 27, 2015, by and between HCAP and the Trustee, as supplemented by the second supplemental indenture, dated as of August 24, 2017, by and between HCAP and the Trustee. The HCAP Notes could be redeemed by the Company at any time at par value plus accrued and unpaid interest. No change of control offer was required to be made in respect of the HCAP Notes in connection with the consummation of the HCAP Acquisition. On June 24, 2021, the Company notified the trustee for the Company’s HCAP Notes of the Company’s election to redeem the On December 18, 2019, Great Lakes Portman Ridge Funding LLC (“GLPRF LLC”), our wholly-owned subsidiary, entered into a senior secured revolving credit facility (the “Revolving Credit Facility”) with JPMorgan Chase Bank, National Association (“JPM”). JPM serves as administrative agent, U.S. Bank National Association serves as collateral agent, securities intermediary and collateral administrator, and we serve as portfolio manager under the Revolving Credit Facility. Advances under the Revolving Credit Facility bear interest at a per annum rate equal to the three-month LIBOR in effect, plus the applicable margin of The initial principal amount of the Revolving Credit Facility is GLPRF LLC’s obligations to the lenders under the Revolving Credit Facility are secured by a first priority security interest in all of GLPRF LLC’s portfolio of investments and cash. The obligations of GLPRF LLC under the Revolving Credit Facility are non-recourse to us, and our exposure under the Revolving Credit Facility is limited to the value of our investment in GLPRF LLC. In connection with the Revolving Credit Facility, GLPRF LLC has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Revolving Credit Facility contains customary events of default for similar financing transactions, including if a change of control of GLPRF LLC occurs or if we are no longer the portfolio manager of GLPRF LLC. On April 29, 2022, GLPRF LLC amended the Revolving Credit Facility with JPM as administrative agent. The amended agreement replaces three-month SOFR as the benchmark interest rate and reduces the applicable margin to 2.80% per annum from 2.85% per annum. Other amendments include the extension of the reinvestment period and scheduled termination date to April 29, 2025 and April 29, 2026, respectively. At September 30, For the three months ended September 30, 40 2018-2 Secured Notes September 30, 2021 Amortized Carrying Value Outstanding Principal at Par Spread Rating(1) Stated 2018-2 Secured Notes: Class A-1R-R Notes $ — $ — LIBOR + 1.58%(3) AAA(sf) 11/20/2029 Class A-1T-R Notes 89,631,705 90,512,698 LIBOR + 1.58% AAA(sf) 11/20/2029 Class A-2-R Notes 54,681,332 55,100,000 LIBOR + 2.45% AA (sf) 11/20/2029 Class B-R Notes 18,102,679 18,250,000 LIBOR + 3.17% A (sf) 11/20/2029 $ 162,415,716 $ 163,862,698 ($ in thousands) September 30, 2022 Amortized Carrying Value Outstanding Principal at Par Spread Rating(1) Stated 2018-2 Secured Notes: Class A-1R-R Notes $ 11,487 $ 11,580 LIBOR + 1.58%(3) AAA(sf) 11/20/2029 Class A-1T-R Notes 78,322 78,933 LIBOR + 1.58% AAA(sf) 11/20/2029 Class A-2-R Notes 54,681 55,100 LIBOR + 2.45% AA (sf) 11/20/2029 Class B-R Notes 18,103 18,250 LIBOR + 3.17% A (sf) 11/20/2029 $ 162,593 $ 163,863 ($ in thousands) December 31, 2021 Amortized Carrying Value Outstanding Principal at Par Spread Rating(1) Stated 2018-2 Secured Notes: Class A-1R-R Notes $ 11,487 $ 11,580 LIBOR + 1.58%(3) AAA(sf) 11/20/2029 Class A-1T-R Notes 78,189 78,933 LIBOR + 1.58% AAA(sf) 11/20/2029 Class A-2-R Notes 54,681 55,100 LIBOR + 2.45% AA (sf) 11/20/2029 Class B-R Notes 18,103 18,250 LIBOR + 3.17% A (sf) 11/20/2029 $ 162,460 $ 163,863 October 28, 2020 the Company completed the GARS Acquisition, pursuant to the terms and conditions of the GARS Merger Agreement. In connection therewith, the Company now consolidates the financial statements the 2018-2 CLO a The CLO was executed by GF $108.0million of the 2018-2 Subordinated Notes and During the first quarter of 2021, the Company redeemed approximately The fair value of the 2018-2 Notes approximated their carrying value on the consolidated statements of financial condition as of September 30, Collateralized Loan Obligation Financing Covenants The documents governing the CLO include three overcollateralization tests which are comprised of the Class A Overcollateralization Test, the Class B Overcollateralization Test and the EoD Overcollateralization Test, each of which are individually defined below. The documents governing the CLO include two coverage tests applicable to the 2018-2 Secured Notes as of September 30, The second test compares the aggregate assets that serve as collateral for the 2018-2 Secured Notes, or the Total Capitalization, as defined and calculated in accordance with the indenture, to the aggregate outstanding principal amount of the 2018-2 Secured Notes in respect of the amounts drawn. To meet this second test at any time, the Total Capitalization must equal at least (1) If the coverage tests are not satisfied with respect to a quarterly payment date, the CLO may be required to apply amounts to the repayment of interest on and principal of the 2018-2 Notes prior to their maturity to the extent necessary to satisfy the applicable coverage tests. As a result, there may be reduced funds available for 2018-2 CLO to 41 make additional investments or to make distributions on the 2018-2 Notes held by the Company. Additionally, compliance was measured on each day collateral loans are purchased, originated or sold and in connection with monthly reporting to the note holders. Furthermore, if under the second coverage test the Total Capitalization equals As of September 30, Senior Securities Information about the Company’s senior securities is shown as of the dates indicated in the below table. Class and Period Total Amount Asset Coverage per Involuntary Average Market ($ in thousands) Fiscal 2011 $ 60,000 4,009 — N/A Fiscal 2012 101,400 3,050 — N/A Fiscal 2013 192,592 2,264 — N/A Fiscal 2014 223,885 2,140 — N/A Fiscal 2015 208,049 2,025 — N/A Fiscal 2016 180,881 2,048 — N/A Fiscal 2017 104,407 2,713 — N/A Fiscal 2018 103,763 2,490 — N/A Fiscal 2019(5) 156,978 1,950 — N/A Fiscal 2020(6) 377,910 1,560 — N/A Fiscal 2021(7) 352,434 1,780 — N/A March 31, 2022(8) 352,434 1,775 — N/A June 30, 2022(9) 364,934 1,702 — N/A September 30, 2022(10) 368,934 1,668 — N/A Class and Period Total Amount Asset Coverage per Involuntary Average Market (dollars in thousands) Fiscal 2011 $ 60,000 4,009 — N/A Fiscal 2012 101,400 3,050 — N/A Fiscal 2013 192,592 2,264 — N/A Fiscal 2014 223,885 2,140 — N/A Fiscal 2015 208,049 2,025 — N/A Fiscal 2016 180,881 2,048 — N/A Fiscal 2017 104,407 2,713 — N/A Fiscal 2018 103,763 2,490 — N/A Fiscal 2019(5) 156,978 1,950 — N/A Fiscal 2020(6) 377,910 1,560 — N/A March 31, 2021(7) 309,660 1,699 — N/A June 30, 2021(8) 369,684 1,711 — N/A September 30, 2021(9) 340,934 1,779 — N/A 7. DISTRIBUTABLE TAXABLE INCOME Effective December 11, 2006, the Company elected to be treated as a RIC under the Code and adopted a December 31 tax-calendar year end. As a RIC, the Company is not subject to federal income tax on the portion of its taxable income and gains distributed currently to its stockholders as a dividend. The Company’s quarterly distributions, if any, are determined by the Board. The Company anticipates distributing substantially all of its taxable income and gains, within the Subchapter M rules, and thus the Company anticipates that it will not incur any federal or state income tax at the RIC level. As a RIC, the Company is also subject to a federal excise tax based on distributive requirements of its taxable income on a calendar year basis (e.g., calendar year The Company may distribute taxable dividends that are payable in cash or shares of its common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 42 extent of the Company’s 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 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 the Company’s stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, the Company 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 the Company’s stockholders determine to sell shares of its stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of the Company’s stock. The following reconciles net increase in net assets resulting from operations to taxable income for the nine months ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, 2021 2020 ($ in thousands) 2022 2021 (Unaudited) (Unaudited) Net (decrease) increase in net assets resulting from operations $ 28,025,986 (17,450,561 $ (8,580 ) $ 28,026 Tax (provision) benefit on realized and unrealized gains (losses) on investments 1,059 - Net change in unrealized depreciation (appreciation) from investments (7,592,643 ) 21,848,028 712 (7,593 ) Net realized losses 13,207,766 3,665,280 28,631 13,208 Book/tax differences on CLO equity investments 3,029,882 516,284 (1,323 ) 3,030 Book/tax differences related to mergers and partnership investments (17,490,071 ) — 1,208 (17,490 ) Other book/tax differences 1,301,248 (315,116 385 1,301 Taxable income before deductions for distributions $ 20,482,168 $ 8,263,915 $ 22,092 $ 20,482 Taxable income before deductions for distributions per weighted $ 2.49 $ 1.85 Taxable income before deductions for distributions per weighted $ 2.49 $ 1.85 Taxable income before deductions for distributions per weighted $ 2.29 $ 2.49 Dividends from Asset Manager Affiliates are recorded based upon a quarterly estimate of tax-basis earnings and profits of each Asset Manager Affiliate. Distributions in excess of the estimated tax-basis quarterly earnings and profits of each distributing Asset Manager Affiliate are recognized as tax-basis return of capital. The actual tax-basis earnings and profits and resulting dividend and/or return of capital for the year will be determined at the end of the tax year for each distributing Asset Manager Affiliate. For the three and nine months ended September 30, Distributions to shareholders that exceed tax-basis distributable income (tax-basis net investment income and realized gains, if any) are reported as distributions of paid-in capital (i.e. return of capital). The tax character of distributions is made on an annual (full calendar-year) basis. The determination of the tax attributes of our distributions is made at the end of the year based upon our taxable income for the full year and the distributions paid during the full year. Therefore, a determination of tax attributes made on a quarterly basis may not be representative of the actual tax attributes of distributions for a full year. At September 30, The Company has certain taxable subsidiaries which have elected to be taxed as corporations for U.S. tax purposes. For the nine months ended September 30, ASC Topic 740 Accounting for Uncertainty in Income Taxes (“ASC 740”) provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the consolidated financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. The Company recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Company’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (the last three fiscal years) or expected to be taken in the Company’s current year tax return. The Company identifies its major tax jurisdictions as U.S. Federal and New York State, and the Company is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. 8. COMMITMENTS AND CONTINGENCIES From time-to-time the Company is a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of the Company’s investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on the Company’s balance sheet. Prior to extending such credit, the Company attempts to limit its credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of September 30, The Company has made an aggregate commitment to the The Company is involved in litigation in the normal course of its operations and does not expect that the outcome of those litigations to have a material adverse impact to the Company’s financial position or results of operations. The Company may, from time to time, enter into commitments to fund investments. These unfunded commitments are assessed for fair value in accordance with ASC 820. As of September 30, 43 ($ in thousands) Par Value Portfolio Company Investment September 30, 2022 Accordion Partners LLC Accordion Partners LLC 872 Accordion Partners LLC Revolver 1,531 AMCP Pet Holdings, Inc. 250 35 Anthem Sports & Entertainment Inc. 83 Appfire Technologies, LLC 1,665 2,415 538 Bristol Hospice Delayed Draw Term Loan 55 Centric Brands Inc. 58 109 Critical Nurse Staffing, LLC Revolver 2,000 Critical Nurse Staffing, LLC Delayed Draw Term Loan 3,094 Global Integrated Flooring Systems Inc. 25 H.W. Lochner, Inc. 1,799 172 Marble Point Credit Management LLC 2,500 Maxor National Pharmacy Services, LLC 585 Naviga Inc. 77 1,222 1,148 192 1,378 TA/ 4,603 TA/WEG Holdings, LLC Revolver 784 TLE Holdings, LLC 2 Aperture Dodge 18 LLC Equity - Unfunded 2,927 GreenPark Infrastructure, LLC Preferred Equity 1,829 Series A-Great Lakes Funding II LLC Joint Ventures 21,749 Total Unfunded Portfolio Company Commitments $ 54,394 9. STOCKHOLDERS’ EQUITY The following table details the components of Stockholders’ Equity for the nine months ended September 30, For the Nine Months Ended September 30, 2021 For the Nine Months Ended September 30, 2022 Common Capital in Total Total Balance, January 1, 2021 $ 75,164 $ 639,136,026 $ (422,947,327 ) $ 216,263,863 ($ in thousands) Common Capital in Total Total Balance, January 1, 2022 $ 97 $ 733,095 $ (453,070 ) $ 280,122 Net investment income — — 8,212,517 8,212,517 - - 7,908 7,908 Net change in unrealized appreciation on investments - - 2,143 2,143 Net realized (losses) from investment transactions and extinguishment of debt — — (6,920,751 ) (6,920,751 ) - - (5,553 ) (5,553 ) Net change in unrealized appreciation on investments — — 6,745,349 6,745,349 Tax (provision) benefit on realized and unrealized gains (losses) on investments - - (440 ) (440 ) Distributions to Stockholders — — (4,509,854 ) (4,509,854 ) - - (6,111 ) (6,111 ) Reinvested Dividends 31 63,953 — 63,984 - 338 - 338 Balance at March 31, 2021 $ 75,195 $ 639,199,979 $ (419,420,066 ) $ 219,855,108 Stock-repurchase - (545 ) - (545 ) Private placement and other - 439 - 439 Balance, March 31, 2022 $ 97 $ 733,327 $ (455,123 ) $ 278,301 Net investment income — — 11,710,742 11,710,742 $ - $ - $ 5,522 $ 5,522 Net change in unrealized appreciation on investments - - 113 113 Net realized (losses) from investment transactions and extinguishment of debt — — (2,355,735 ) (2,355,735 ) - - (13,991 ) (13,991 ) Net change in unrealized appreciation on investments — — 1,489,378 1,489,378 Tax (provision) benefit on realized and unrealized gains (losses) on investments - - (77 ) (77 ) Distributions to Stockholders — — (4,594,587 ) (4,594,587 ) - - (6,064 ) (6,064 ) Reinvested Dividends 69 164,955 — 165,024 - 346 - 346 Stock-repurchase (157 ) (379,747 ) — (379,904 ) - (2,459 ) - (2,459 ) Private placement 1,381 4,018,216 — 4,019,597 - (25 ) - (25 ) HCAP purchase (net of offering expenses) 15,253 38,679,435 — 38,694,688 Balance, June 30, 2021 $ 91,741 $ 681,682,838 $ (413,170,268 ) $ 268,604,311 Balance, June 30, 2022 $ 97 $ 731,189 $ (469,620 ) $ 261,666 Net investment income — — 13,717,851 13,717,851 $ - $ - $ 8,392 $ 8,392 Net change in unrealized appreciation on investments - - (2,968 ) (2,968 ) Net realized (losses) from investment transactions and extinguishment of debt — — (3,931,280 ) (3,931,280 ) - - (9,087 ) (9,087 ) Net change in unrealized appreciation on investments — — (642,085 ) (642,085 ) Tax (provision) benefit on realized and unrealized gains (losses) on investments - - (542 ) (542 ) Distributions to Stockholders — — (5,468,650 ) (5,468,650 ) - - (6,048 ) (6,048 ) Reinvested Dividends 9 214,761 — 214,770 - 204 - 204 Stock-repurchase (517 ) (1,446,125 ) — (1,446,642 ) - - - - Balance, September 30, 2021 $ 91,233 $ 680,451,474 $ (409,494,432 ) $ 271,048,275 Private placement - (35 ) - (35 ) Balance, September 30, 2022 $ 97 $ 731,358 $ (479,873 ) $ 251,582 44 For the Nine Months Ended September 30, 2021 ($ in thousands) Common Capital in Total Total Balance, January 1, 2021 $ 75 $ 639,136 $ (422,947 ) $ 216,264 Net investment income - - 8,213 8,213 Net realized (losses) from investment transactions and extinguishment of debt - - (6,921 ) (6,921 ) Net change in unrealized appreciation on investments - - 6,745 6,745 Distributions to Stockholders - - (4,510 ) (4,510 ) Reinvested Dividends - 64 - 64 Balance at March 31, 2021 $ 75 $ 639,200 $ (419,420 ) $ 219,855 Net investment income $ - $ - $ 11,710 $ 11,710 Net realized (losses) from investment transactions and extinguishment of debt - - (2,356 ) (2,356 ) Net change in unrealized appreciation on investments - - 1,490 1,490 Distributions to Stockholders - - (4,594 ) (4,594 ) Reinvested Dividends - 165 - 165 Stock-repurchase - (380 ) - (380 ) Private placement 2 4,017 - 4,019 HCAP purchase (net of offering expenses) 15 38,680 - 38,695 Balance, June 30, 2021 $ 92 $ 681,682 $ (413,170 ) $ 268,604 Net investment income $ - $ - $ 13,718 $ 13,718 Net realized (losses) from investment transactions and extinguishment of debt - - (3,931 ) (3,931 ) Net change in unrealized appreciation on investments - - (642 ) (642 ) Distributions to Stockholders - - (5,469 ) (5,469 ) Reinvested Dividends - 215 - 215 Stock-repurchase - (1,447 ) - (1,447 ) Balance, September 30, 2021 $ 92 $ 680,450 $ (409,494 ) $ 271,048 For Nine Months Ended September 30, 2020 Common Capital in Total Total Balance, January 1, 2020 $ 44,830 $ 451,756,846 $ (299,603,106 ) $ 152,198,570 Net investment income — — 2,765,790 2,765,790 Net realized (losses) from investment transactions and extinguishment of debt — — (894,041 ) (894,041 ) Net change in unrealized appreciation on investments — — (30,924,682 ) (30,924,682 ) Distributions to Stockholders — — (2,689,779 ) (2,689,779 ) Reinvested Dividends 18 37,066 — 37,084 Stock-repurchase (122 ) (123,208 ) — (123,330 ) Balance at March 31, 2020 $ 44,726 $ 451,670,704 $ (331,345,818 ) $ 120,369,612 Net investment income — — 2,599,906 2,599,906 Net realized (losses) from investment transactions and extinguishment of debt — — (881,151 ) (881,151 ) Net change in unrealized appreciation on investments — — 1,564,939 1,564,939 Distributions to Stockholders — — (2,683,782 ) (2,683,782 ) Reinvested Dividends 23 28,103 — 28,126 Stock-repurchase (254 ) (283,741 ) — (283,995 ) Balance, June 30, 2020 $ 44,495 $ 451,415,066 $ (330,745,906 ) $ 120,713,655 Net investment income — — 2,697,050 2,697,050 Net realized (losses) from investment transactions and extinguishment of debt — — (1,890,090 ) (1,890,090 ) Net change in unrealized appreciation on investments — — 7,511,713 7,511,713 Distributions to Stockholders — — (2,669,713 ) (2,669,713 ) Reinvested Dividends 33 38,996 — 39,029 Stock-repurchase (359 ) (455,188 ) — (455,547 ) Balance, September 30, 2020 $ 44,169 $ 450,998,874 $ (325,096,946 ) $ 125,946,098 (1) On March During the three months ended September 30, Shares Weighted Weighted Aggregate Options outstanding at January 1, 2019 30,000 $ 4.88 0.9 $ — Granted — — Exercised — — Forfeited — — Cancelled (30,000 ) 4.88 0.6 Outstanding at March 31, 2019 — $ — — $ — Total vested at March 31, 2019 — $ — — Common stock issued by the Company (1) $ 15,548,678 Cash consideration to OHAI shareholders (2) 11,510,688 Transaction costs (excluding offering costs $385,747) 851,807 Total purchase consideration 27,911,173 Assets acquired: Investments, at fair value (amortized cost of $54,123,811) 60,547,193 Cash 232,708 Interest receivable 592,329 Other assets 482,454 Total assets acquired 61,854,684 Liabilities assumed: Debt 27,394,083 Other liabilities 126,046 Total liabilities assumed 27,520,129 Net assets acquired 34,334,555 Total purchase discount $ (6,423,382 ) GARS acquisition On October 28, 2020, the Company completed the GARS Acquisition, pursuant to the terms and conditions of the GARS Merger Agreement. To effect the acquisition, a wholly owned merger subsidiary of the Company merged with and into GARS, with GARS surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, GARS consummated a second merger, whereby GARS merged with and into the Company, with the Company surviving the merger. Under the terms of the GARS Merger Agreement, each share of GARS Common Stock issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately The merger was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC Topic 805-50. The fair value of the consideration paid, and transaction costs incurred to complete the merger by the Company, including Common stock issued by the Company (1) $ 38,764,706 Cash consideration to GARS shareholders 24,100,000 Transaction costs (excluding offering costs $432,339) 1,167,661 Total purchase consideration 64,032,367 Assets acquired: Investments, at fair value (amortized cost of $277,380,492) 317,802,548 Cash 35,360,820 Interest receivable 1,871,232 Other assets 2,087,550 Total assets acquired 357,122,150 Liabilities assumed: Debt 251,213,342 Other liabilities 1,454,384 Total liabilities assumed 252,667,726 Net assets acquired 104,454,424 Total purchase discount $ (40,422,057 ) 45 ($ in thousands) Common stock issued by the Company (1) $ 38,765 Cash consideration to GARS shareholders 24,100 Transaction costs (excluding offering costs $432) 1,168 Total purchase consideration 64,033 Assets acquired: Investments, at fair value (amortized cost of $277,380) 317,803 Cash 35,361 Interest receivable 1,871 Other assets 2,088 Total assets acquired 357,123 Liabilities assumed: Debt 251,213 Other liabilities 1,455 Total liabilities assumed 252,668 Net assets acquired 104,455 Total purchase discount $ (40,422 ) HCAP Acquisition and Assumption and Redemption of HCAP Notes On June Under the terms of the HCAP Merger Agreement, HCAP stockholders as of immediately prior to the effective time of the first merger (other than shares held by a subsidiary of HCAP or held, directly or indirectly, by the Company or Acquisition Sub, and all treasury shares (collectively, “Cancelled Shares”)) received a combination of (i) With respect to the merger consideration from Pursuant to the conditions of and adjustment mechanisms in the HCAP Merger Agreement, 475,806 Electing Shares were converted to Non-Electing Shares for purposes of calculating the total mix of consideration to be paid to each Electing Share in order to ensure that the value of the aggregate cash consideration paid to holders of the Electing Shares equaled the aggregate cash consideration that HCAP received from the Company under the terms of the HCAP Merger Agreement. Accordingly, as a result of the Elections received from HCAP stockholders and any resulting adjustment under the terms of the HCAP Merger Agreement, each Electing Share received, in aggregate, approximately The HCAP Acquisition was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC Topic 805-50. The fair value of the consideration paid, and transaction costs incurred to complete the merger by the Company, including 46 Common stock issued by the Company (1) $ 37,063,461 Cash consideration to HCAP shareholders (2) 20,687,513 Transaction costs (excluding offering costs $518,774) 881,226 Total purchase consideration 58,632,200 Assets acquired: Investments, at fair value (amortized cost of $53,811,838) $ 57,620,640 Cash 32,118,574 Interest receivable 431,454 Other assets 2,664,932 Total assets acquired 92,835,600 Liabilities assumed: Debt 28,750,000 Other liabilities 1,644,600 Total liabilities assumed 30,394,600 Net assets acquired 62,441,000 Total purchase discount $ (3,808,800 ) ($ in thousands) Common stock issued by the Company (1) $ 37,063 Cash consideration to HCAP shareholders (2) 20,688 Transaction costs (excluding offering costs $519) 881 Total purchase consideration 58,632 Assets acquired: Investments, at fair value (amortized cost of $53,812) $ 57,621 Cash 32,119 Interest receivable 431 Other assets 2,665 Total assets acquired 92,836 Liabilities assumed: Debt 28,750 Other liabilities 1,645 Total liabilities assumed 30,395 Net assets acquired 62,441 Total purchase discount $ (3,809 ) On June 9, 2021, the Company entered into the HCAP Third Supplemental Indenture, effective as of the closing of the HCAP Acquisition. The HCAP Third Supplemental Indenture relates to the Company’s assumption of Pursuant to the HCAP Third Supplemental Indenture, the Company expressly assumed the due and punctual payment of the principal of (and premium, if any) and interest, if any, on the HCAP Notes and the performance of HCAP’s covenants under the base indenture, dated as of January 27, 2015, by and between HCAP and the Trustee, as supplemented by the second supplemental indenture, dated as of August 24, 2017, by and between HCAP and the Trustee. No change of control offer was required to be made in respect of the HCAP Notes in connection with the consummation of the HCAP Acquisition. The HCAP Notes could be redeemed by the Company at any time at par value plus accrued and unpaid interest. On July 23, 2021, the Company redeemed the entire notional amount of On November The Company has evaluated events and transactions occurring subsequent to September 30, 47 Item 2. The following discussion and analysis should be read in conjunction with our GENERAL We are an externally managed, non-diversified closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Sierra Crest Investment Management LLC (the “Adviser”) is an affiliate of BC Partners LLP (“BC Partners”). Subject to the overall supervision of the Board, the Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals. We originate, structure, and invest in secured term loans, bonds or notes and mezzanine debt primarily in privately-held middle market companies but may also invest in other investments such as loans to publicly-traded companies, high-yield bonds, and distressed debt securities (collectively the “Debt Securities Portfolio”). We also invest in In our Debt Securities Portfolio, our investment objective is to generate current income and, to a lesser extent, capital appreciation from the investments in senior secured term loans, mezzanine debt and selected equity investments in privately-held middle market companies. We define the middle market as comprising companies with EBITDA of $10 million to $50 million and/or total debt of $25 million to $150 million. We primarily invest in first and second lien term loans which, because of their priority in a company’s capital structure, we expect will have lower default rates and higher rates of recovery of principal if there is a default and which we expect will create a stable stream of interest income. Our portfolio may include “covenant-lite” loans which generally refer to loans that do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants. We have elected to be treated for U.S. federal income tax purposes as a RIC under the Code and intend to operate in a manner to maintain our RIC status. As a RIC, we intend to distribute to our stockholders substantially all of our net ordinary taxable income and the excess of realized net short-term capital gains over realized net long-term capital losses, if any, for each year. To qualify as a RIC, we must, among other things, meet certain source-of-income and asset diversification requirements. Pursuant to this election, we generally will not have to pay corporate-level U.S. federal income taxes on any income that we timely distribute to our stockholders. From time to time, we may seek to retire, repurchase, or exchange debt securities in open market purchases or by other means dependent on market conditions, liquidity, contractual obligations, and other matters. In addition, we evaluate strategic opportunities available to us, including mergers with unaffiliated funds and affiliated funds, divestures, spin-offs, joint ventures and other similar transactions from time to time. The Externalization On April 1, 2019 (the “Closing”), we became externally managed (the “Externalization”) by the Adviser, pursuant to a stock purchase and transaction agreement (the “Externalization Agreement”) with BC Partners Advisors L.P. (“BCP”), an affiliate of BC Partners. In connection with the Externalization, our stockholders approved an investment advisory agreement (the “Advisory Agreement”) with the Adviser. See “-Advisory Agreement” below. Pursuant to the Externalization Agreement with BCP, the Adviser became our investment adviser in exchange for a cash payment from BCP, or its affiliate, of $25 million, or $0.669672 per share of our common stock, directly to our stockholders. In addition, the Adviser (or its affiliate) will use up to $10 million of the incentive fee actually paid to the Adviser prior to the second anniversary of the Closing to buy newly issued shares of our common stock at the most recently determined net asset value per share of our common stock at the time of such purchase. In November 2020, the Adviser purchased approximately $570 thousand newly issued shares of our common stock in connection therewith, and in May 2021, the Adviser purchased approximately $4.0 million of newly issued shares of our common stock in connection therewith. In both cases, the shares were issued at the most recently determined net asset value per share of our common stock. The obligations of the Advisor to use incentive fees to purchase shares expired on April 1, 2021. For the period of one year from the first day of the first quarter following the quarter in which the Closing occurred, the Adviser will permanently forego up to the full amount of the incentive fees earned by the Adviser without recourse against or reimbursement by us, to the extent necessary in order to achieve aggregate net investment income per share of common stock for such one-year period to be at least equal to $0.40 per share, subject to certain adjustments. BCP and the Adviser’s total financial commitment to the transactions contemplated by the Externalization Agreement was $35.0 million. On In accordance with the terms of the merger agreement for the GARS Acquisition, dated June 24, 2020 (the “GARS Merger 48 HCAP Acquisition and Assumption and Redemption of HCAP Notes On Under the terms of the merger agreement for the HCAP Acquisition, dated December 23, 2020 (the “HCAP Merger With respect to the merger consideration from Pursuant to the conditions of and adjustment mechanisms in the HCAP Merger Agreement, 475,806 Electing Shares were converted to Non-Electing Shares for purposes of calculating the total mix of consideration to be paid to each Electing Share in order to ensure that the value of the aggregate cash consideration paid to holders of the Electing Shares equaled the aggregate cash consideration that HCAP received from the Company under the terms of the HCAP Merger Agreement. Accordingly, as a result of the Elections received from HCAP stockholders and any resulting adjustment under the terms of the HCAP Merger Agreement, each Electing Share received, in aggregate, approximately $7.43 in cash and 0.74 shares of On June 9, 2021, the Company entered into a third supplemental indenture (the “HCAP Third Supplemental Indenture”) by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”), effective as of the closing of the HCAP Acquisition. The HCAP Third Supplemental Indenture relates to the Company’s assumption of $28.75 million in aggregate principal amount of HCAP’s 6.125% Notes due September 15, 2022 (the “HCAP Notes”). Pursuant to the HCAP Third Supplemental Indenture, the Company expressly assumed the due and punctual payment of the principal of (and premium, if any) and interest, if any, on the HCAP Notes and the performance of HCAP’s covenants under the base indenture, dated as of January 27, 2015, by and between HCAP and the Trustee, as supplemented by the second supplemental indenture, dated as of August 24, 2017, by and between HCAP and the Trustee. No change of control offer was required to be made in respect of the HCAP Notes in connection with the consummation of the HCAP Acquisition. The HCAP Notes could be redeemed by the Company at any time at par value plus accrued and unpaid interest. On July 23, 2021, the Company redeemed the entire notional amount of $28.75 million of the HCAP Notes. On August 23, 2021, the Company filed a Certificate of Amendment (the “Reverse Stock Split Certificate of Amendment”) to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split of the issued and outstanding (or held in treasury) shares of the Company’s common stock, par value $0.01 per share (the “Reverse Stock Split”). The Reverse Stock Split became effective as of 12:01 a.m. (Eastern Time) on August 26, 2021. As a result of the Reverse Stock Split, every ten shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, any stockholder who would have been entitled to receive a fractional share as a result of1(1)20212022 loan. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, or 1 month L rates. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at September 30, 2021.2022. As noted in the table above, 75.5%74.8% (based on par) of debt securities contain floors which range between 0.50%0.50% and 2.25%2.00%.220212022 as determined by the Company’s Board of Directors.34632$627.5 million. The aggregate gross unrealized appreciation is approximately $51$33.8 million, the aggregate gross unrealized depreciation is approximately $123 million,$37.7 million., and the net unrealized depreciation is approximately $72$3.8 million.5617.5%17.5% pursuant to the Amended and Restated Limited Liability Company Agreement of Garrison Capital Equity Holdings II LLC.7 During the second quarter of 2020, the Company was notified that this CLO Fund security will cease making distributions to the Company.884.4%84.7% of the total assets at September 30, 2021.92022.25%25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). Other than for purposes of the 1940 Act, the Company does not believe that it has control over this portfolio company.1011125%5% royalty interest on oil being produced on certain fields. All production payments received are beingwere applied to the cost basis and are considered return of capital.13 Production payments received in excess of cost basis are recognized as realized gain.1420212022, this investment is pledged to secure the Company’s debt obligations.151625%25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.17Ownership of LP interest held throughholding company BCP GreatCompany's investment in Series A-Great Lakes Fund, L.P, a non-U.S. company or principal place of business outside the U.S.18Funding II LLC.5% but no more than 25%5% of the portfolio company’s outstanding voting securities or is under common control with such portfolio company. Other than for purpose of the 1940 Act, the Company does not believe it has control over this portfolio company.1920In addition to the stated interest rate of this security, which is the amount disclosed in this schedule, the Company is entitled to receive additional interest as a result of an arrangement with other lenders in the syndication, whereby the “first out” tranche will have priority over the Company’s “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder from the borrower. The additional interest received during the quarter has been annualized and included in the spread disclosed for this investment.21Represents co-investment made with the Company's affiliates in accordance with the terms of the exemptive relief that the Company received.222021:2022:23Debt security24The cash coupon and/or PIK coupon on the loan is subject to a pricing grid based on certain leverage ratios of the portfolio company.252620202021
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Consumer goods: Non-durable
5.8% Cash, 3 Month Libor (1.00%) + 4.75%; Libor Floor 1.00% , Due 8/27
Consumer goods: Durable
Banking, Finance, Insurance & Real Estate
5.0% Cash, 8.0% PIK, Due 1/25
Banking, Finance, Insurance & Real Estate
5.0% Cash, 8.0% PIK, Due 1/25
Banking, Finance, Insurance & Real Estate
5.0% Cash, 8.0% PIK, Due 1/25
Banking, Finance, Insurance & Real Estate
5.2% Cash, 3 Month Libor (0.21%) + 5.00% , Due 8/25
Services: Business
4.4% Cash, 1 Month Libor (0.15%) + 4.25% , Due 7/26
Beverage, Food and Tobacco
1.0% Cash, Due 10/26
Beverage, Food and Tobacco
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 10/26
Beverage, Food and Tobacco
0.5% Cash, Due 10/26
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Electronics
0.5% Cash, Due 6/23
Electronics
6.3% Cash, 1 Month Libor (1.00%) + 5.25%; Libor Floor 1.00% , Due 6/24
Media: Broadcasting & Subscription
7.8% Cash, 2.8% PIK, 3 Month Libor (1.00%) + 6.75%; Libor Floor 1.00% , Due 9/24
Media: Broadcasting & Subscription
10.5% Cash, 3 Month Libor (1.00%) + 9.50%; Libor Floor 1.00% , Due 9/24
Chemicals, Plastics & Rubber
4.9% Cash, 1 Month Libor (0.15%) + 4.75% , Due 9/26
Services: Business
5.1% Cash, 1 Month Libor (0.15%) + 5.00% , Due 7/26
Energy: Oil & Gas
8.5% Cash, 3 Month Libor (1.50%) + 7.00%; Libor Floor 1.50% , Due 1/23
Banking, Finance, Insurance & Real Estate
6.3% Cash, 6 month Libor (1.00%) + 5.25%; Libor Floor 1.00% , Due 12/24
Healthcare & Pharmaceuticals
1.0% Cash, Due 12/26
Healthcare & Pharmaceuticals
6.5% Cash, 3 Month Libor (1.00%) + 5.50%; Libor Floor 1.00% , Due 12/26
Chemicals, Plastics & Rubber
7.5% Cash, 1 Month Libor (1.00%) + 6.50%; Libor Floor 1.00% , Due 6/23
Healthcare & Pharmaceuticals
5.5% Cash, 8.0% PIK, 6 month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 8/23
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Machinery (Non-Agrclt/Constr/Electr)
6.5% Cash, 3 Month Libor (1.00%) + 5.50%; Libor Floor 1.00% , Due 10/24
Machinery (Non-Agrclt/Constr/Electr)
Services: Consumer
5.3% Cash, 3 Month Libor (1.00%) + 4.25%; Libor Floor 1.00% , Due 5/23
Services: Business
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 12/24
Banking, Finance, Insurance & Real Estate
Consumer goods: Durable
8.0% Cash, 1 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 5/23
Services: Business
9.1% Cash, 3 Month Libor (1.00%) + 8.05%; Libor Floor 1.00% , Due 5/25
Services: Business
9.1% Cash, 3 Month Libor (1.00%) + 8.05%; Libor Floor 1.00% , Due 5/25
Services: Business
9.1% Cash, 3 Month Libor (1.00%) + 8.05%; Libor Floor 1.00% , Due 5/25
Electronics
5.1% Cash, 1 Month Libor (0.15%) + 5.00% , Due 1/26
Beverage, Food and Tobacco
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 1/22
Beverage, Food and Tobacco
8.8% Cash, 3 Month Libor (1.00%) + 7.75%; Libor Floor 1.00% , Due 2/22
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Healthcare & Pharmaceuticals
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 11/26
Healthcare & Pharmaceuticals
1.0% Cash, Due 11/26
Capital Equipment
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 5/24
High Tech Industries
High Tech Industries
2.0% Cash, 7.0% PIK, Due 5/25
High Tech Industries
High Tech Industries
Electronics
7.2% Cash, 3 Month Libor (0.24%) + 7.00% , Due 7/24
High Tech Industries
2.0% Cash, Due 7/25
High Tech Industries
4.4% Cash, 1 Month Libor (0.15%) + 4.25% , Due 7/25
High Tech Industries
4.7% Cash, 1 Month Libor (0.15%) + 4.50% , Due 7/25
Electronics
5.2% Cash, 1 Month Libor (0.15%) + 5.00% , Due 7/26
High Tech Industries
6.6% Cash, 1 Month Libor (0.15%) + 6.50% , Due 12/25
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Services: Business
10.0% Cash, 1 Month Libor (1.50%) + 8.50%; Libor Floor 1.50% , Due 8/21
Services: Business
Electronics
4.4% Cash, 1 Month Libor (0.15%) + 4.25% , Due 6/25
Telecommunications
9.4% Cash, 1 Month Libor (0.15%) + 9.25% , Due 6/26
Environmental Industries
6.0% Cash, 6 month Libor (1.00%) + 5.00%; Libor Floor 1.00% , Due 6/22
Telecommunications
7.7% Cash, 1 Month Libor (0.15%) + 7.50% , Due 7/26
Telecommunications
10.0% Cash, 6 month Libor (2.00%) + 8.00%; Libor Floor 2.00% , Due 7/25
Media: Advertising, Printing & Publishing
5.4% Cash, 1 Month Libor (0.15%) + 5.25% , Due 12/25
Services: Business
5.2% Cash, 1 Month Libor (0.15%) + 5.00% , Due 4/25
Services: Business
13.3% Cash, 3 Month Libor (1.00%) + 12.25%; Libor Floor 1.00% , Due 1/22
Consumer goods: Durable
0.8% Cash, Due 2/23
Consumer goods: Durable
9.5% Cash, 3 Month Libor (1.25%) + 8.25%; Libor Floor 1.25% , Due 2/23
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Telecommunications
8.4% Cash, 1 Month Libor (0.15%) + 8.25% , Due 11/26
Transportation: Cargo
6.5% Cash, 3 Month Libor (1.00%) + 5.50%; Libor Floor 1.00% , Due 8/22
Healthcare & Pharmaceuticals
10.5% Cash, 3 Month Libor (1.50%) + 9.00%; Libor Floor 1.50% , Due 1/18
Healthcare & Pharmaceuticals
13.8% Cash, Due 7/18
Consumer goods: Durable
8.4% Cash, 1 Month Libor (0.15%) + 8.25%; Libor Floor 0.00% , Due 8/25
High Tech Industries
8.5% Cash, 3 Month Libor (1.00%) + 7.50%; Libor Floor 1.00% , Due 12/23
High Tech Industries
8.5% Cash, 3 Month Libor (1.00%) + 7.50%; Libor Floor 1.00% , Due 12/23
Metals & Mining
8.3% Cash, 3 Month Libor (0.25%) + 8.00% , Due 9/25
Forest Products & Paper
10.5% Cash, 3 Month Libor (1.00%) + 9.50%; Libor Floor 1.00% , Due 11/24
Banking, Finance, Insurance & Real Estate
5.2% Cash, 3 Month Libor (0.21%) + 5.00% , Due 10/25
High Tech Industries
10.0% Cash, 6 Month Libor (1.00%) + 9.00%; Libor Floor 1.00% , Due 6/27
High Tech Industries
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 12/22
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
High Tech Industries
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 12/22
Banking, Finance, Insurance & Real Estate
4.8% Cash, 3 Month Libor (0.25%) + 4.50% , Due 3/26
High Tech Industries
7.0% Cash, 1 Month Libor (1.00%) + 6.00%; Libor Floor 1.00% , Due 7/25
Construction & Building
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 2/25
Consumer goods: Durable
9.5% Cash, 0.5% PIK, 1 Month Libor (1.75%) + 7.75%; Libor Floor 1.75% , Due 3/24
Healthcare & Pharmaceuticals
6.2% Cash, 3 Month Libor (0.24%) + 6.00% , Due 10/24
Services: Business
7.8% Cash, 1 Month Libor (1.00%) + 6.75%; Libor Floor 1.00% , Due 5/21
Construction & Building
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 4/23
Construction & Building
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 4/23
Aerospace and Defense
6.5% Cash, 3 Month Libor (1.00%) + 5.50%; Libor Floor 1.00% , Due 4/27
Healthcare & Pharmaceuticals
6.5% Cash, 3 Month Libor (1.00%) + 5.50%; Libor Floor 1.00% , Due 11/23
Healthcare & Pharmaceuticals
0.5% Cash, Due 11/22
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Consumer goods: Durable
7.3% Cash, 1 Month Libor (1.50%) + 5.75%; Libor Floor 1.50% , Due 8/24
Consumer goods: Durable
0.5% Cash, Due 8/24
Consumer goods: Durable
7.3% Cash, 1 Month Libor (1.50%) + 5.75%; Libor Floor 1.50% , Due 8/24
Electronics
9.0% Cash, 3 Month Libor (1.00%) + 8.00%; Libor Floor 1.00% , Due 6/23
Healthcare & Pharmaceuticals
6.8% Cash, 3 Month Libor (1.25%) + 5.50%; Libor Floor 1.25% , Due 7/23
Transportation: Cargo
8.5% Cash, 3 Month Libor (1.50%) + 7.00%; Libor Floor 1.50% , Due 3/24
Services: Business
1.0% Cash, Due 6/22
Services: Business
7.0% Cash, 1 Month Libor (1.00%) + 6.00%; Libor Floor 1.00% , Due 1/26
Healthcare, Education and Childcare
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 6/21
Electronics
7.2% Cash, 1 Month Libor (0.15%) + 7.00% , Due 9/26
Services: Business
8.0% Cash, 3 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 12/22
Services: Business
8.0% Cash, 3 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 12/22
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Services: Business
8.0% Cash, 3 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 12/22
High Tech Industries
6.0% Cash, 3 Month Libor (1.00%) + 5.00%; Libor Floor 1.00% , Due 10/22
Banking, Finance, Insurance & Real Estate
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 10/24
Banking, Finance, Insurance & Real Estate
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 10/24
Banking, Finance, Insurance & Real Estate
5.5% Cash, 3 Month Libor (1.00%) + 4.50%; Libor Floor 1.00% , Due 10/24
Healthcare & Pharmaceuticals
9.3% Cash, 1 Month Libor (1.00%) + 8.25%; Libor Floor 1.00% , Due 3/27
Services: Business
6.3% Cash, 6 month Libor (0.27%) + 6.00% , Due 1/25
Healthcare & Pharmaceuticals
1.0% Cash, Due 12/25
Healthcare & Pharmaceuticals
6.3% Cash, 1 Month Libor (1.00%) + 5.25%; Libor Floor 1.00% , Due 12/25
Healthcare & Pharmaceuticals
6.3% Cash, 1 Month Libor (1.00%) + 5.25%; Libor Floor 1.00% , Due 12/25
Environmental Industries
9.5% Cash, 1 Month Libor (1.00%) + 8.50%; Libor Floor 1.00% , Due 10/25
Containers, Packaging and Glass
5.8% Cash, 3 Month Libor (1.00%) + 4.75%; Libor Floor 1.00% , Due 8/24
Chemicals, Plastics & Rubber
6.0% Cash, 3 Month Libor (1.00%) + 5.00%; Libor Floor 1.00% , Due 12/23
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
High Tech Industries
7.3% Cash, 3 Month Libor (1.00%) + 6.25%; Libor Floor 1.00% , Due 7/25
Services: Business
5.8% Cash, 3 Month Libor (1.00%) + 4.75%; Libor Floor 1.00% , Due 9/24
Healthcare & Pharmaceuticals
5.3% Cash, 12 Month Libor (1.04%) + 4.25% , Due 7/25
Aerospace and Defense
6.8% Cash, 3 Month Libor (1.00%) + 5.75%; Libor Floor 1.00% , Due 3/25
Aerospace and Defense
6.0% Cash, Due 7/21
Healthcare & Pharmaceuticals
0.5% Cash, Due 9/23
Healthcare & Pharmaceuticals
7.5% Cash, 3 Month Libor (1.00%) + 6.50%; Libor Floor 1.00% , Due 9/23
Banking, Finance, Insurance & Real Estate
9.5% Cash, Due 3/21
Capital Equipment
9.0% Cash, 1 Month Libor (1.00%) + 8.00%; Libor Floor 1.00% , Due 2/26
Healthcare & Pharmaceuticals
11.3% Cash, Due 3/21
Automotive
7.8% Cash, 6 month Libor (1.00%) + 6.75%; Libor Floor 1.00% , Due 2/26
Telecommunications
9.5% Cash, 3 Month Libor (1.50%) + 8.00%; Libor Floor 1.50% , Due 6/25
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Healthcare & Pharmaceuticals
9.3% Cash, 3 Month Libor (1.00%) + 8.25%; Libor Floor 1.00% , Due 9/24
Automotive
7.5% Cash, 2.4% PIK, 1 Month Libor (1.25%) + 8.65%; Libor Floor 1.25% , Due 9/23
Services: Business
7.5% Cash, 3 Month Libor (1.50%) + 6.00%; Libor Floor 1.50% , Due 12/25
Retail
7.2% Cash, 2.0% PIK, 3 Month Libor (1.00%) + 6.23%; Libor Floor 1.00% , Due 5/24
Healthcare & Pharmaceuticals
5.2% Cash, 1 Month Libor (0.15%) + 5.00% , Due 5/25
Automotive
6.0% Cash, 3 Month Libor (1.00%) + 5.00%; Libor Floor 1.00% , Due 5/25
Energy: Oil & Gas
0.0% Cash, 10.0% PIK, Due 2/22
Textiles and Leather
10.0% Cash, 1 Month Libor (1.00%) + 9.00%; Libor Floor 1.00% , Due 8/24
Construction & Building
6.8% Cash, 3 Month Libor (1.00%) + 5.75%; Libor Floor 1.00% , Due 10/25
Banking, Finance, Insurance & Real Estate
6.9% Cash, 1 Month Libor (0.11%) + 6.75% , Due 7/26
Healthcare & Pharmaceuticals
9.0% Cash, 3 Month Libor (1.00%) + 8.00%; Libor Floor 1.00% , Due 5/24
Healthcare, Education and Childcare
7.0% Cash, 6 month Libor (1.00%) + 6.00%; Libor Floor 1.00% , Due 6/24
Healthcare, Education and Childcare
7.0% Cash, 6 month Libor (1.00%) + 6.00%; Libor Floor 1.00% , Due 6/24
Principal Business
Interest Rate¹ / Maturity15
Acquisition
Date
Cost
Consumer goods: Durable
7.7% Cash, 1 Month Libor (1.00%) + 6.72%; Libor Floor 1.00% , Due 3/23
Aerospace and Defense
5.8% Cash, 12 Month Libor (1.00%) + 4.75%; Libor Floor 1.00% , Due 9/23
Energy: Oil & Gas
14.0% Cash, 3 Month Libor (1.00%) + 13.00%; Libor Floor 1.00% , Due 12/20
Energy: Oil & Gas
Chemicals, Plastics & Rubber
7.4% Cash, 1 Month Libor (0.15%) + 7.25% , Due 3/26
Services: Business
6.5% Cash, 3 Month Libor (0.23%) + 6.25% , Due 8/24
Consumer goods: Durable
8.0% Cash, 1 Month Libor (1.00%) + 7.00%; Libor Floor 1.00% , Due 5/23
Capital Equipment
10.0% Cash, 6 month Libor (1.00%) + 9.00%; Libor Floor 1.00% , Due 9/24
Media: Diversified & Production
6.0% Cash, 3 Month Libor (1.00%) + 5.00%; Libor Floor 1.00% , Due 11/24
Healthcare, Education and Childcare
8.5% Cash, 1 Month Libor (1.00%) + 7.50%; Libor Floor 1.00% , Due 3/26
(187% of net asset value at fair value)
Principal Business
Acquisition
Date
/Shares
Healthcare & Pharmaceuticals
Healthcare & Pharmaceuticals
Consumer goods: Durable
Consumer goods: Durable
Banking, Finance, Insurance & Real Estate
Media: Broadcasting & Subscription
Media: Broadcasting & Subscription
Media: Broadcasting & Subscription
Energy: Oil & Gas
Healthcare & Pharmaceuticals
Machinery (Non-Agrclt/Constr/Electr)
Services: Business
Services: Business
Principal Business
Acquisition
Date
/Shares
Services: Business
Consumer goods: Durable
Consumer goods: Durable
Capital Equipment
Telecommunications
Energy: Oil & Gas
Healthcare & Pharmaceuticals
Services: Business
Consumer goods: Durable
Healthcare & Pharmaceuticals
Energy: Oil & Gas
Energy: Oil & Gas
Consumer goods: Durable
Consumer goods: Durable
(6% of net asset value at fair value)Subordinated InvestmentsFund Securities
Acquisition
Date
Ownership
Cost
Value2
1/28 maturity
4/30 maturity
11/28 maturity
10/26 maturity
4/27 maturity
1/29 maturity
10/31 maturity
Securities (9% of net asset value at fair value)
Principal Business
Acquisition
Date
Ownership
Value2
Affiliates (0% of net asset value at fair value)
Principal Business
Acquisition
Date
Value2
Banking, Finance, Insurance & Real Estate
Media: Broadcasting & Subscription
Principal Business
Acquisition
Date
Ownership
Value2
Limited Partnership
(23% of net asset value at fair value)1Joint Venture20202021 loan. L loans are typically indexed to 12 month, 6 month, 3 month, 2 month, or 1 month L rates. For each such loan, the Company has provided the weighted average annual stated interest rate in effect at December 31, 2020.2021. As noted in the table above, 74% (based74.8%(based on par) of debt securities contain floors which range between 1.00%0.50% and 2.00%2.00%.220202021 as determined by the Company’s Board of Directors.34$572$628.6 million. The aggregate gross unrealized appreciation is approximately $53.1$29.3 million, the aggregate gross unrealized depreciation is approximately $138.6$41.3 million, and the net unrealized depreciation is approximately $85.5$12.0 million.5617.5%17.5% pursuant to the Amended and Restated Limited Liability Company Agreement of Garrison Capital Equity Holdings II LLC.7Money market account.886.2%84.2% of the total assets at December 31, 2020.92021.25%25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company (including through a management agreement). Other than for purposes of the 1940 Act, the Company does not believe that it has control over this portfolio company.1011125%5% royalty interest on oil being produced on certain fields. All production payments received are being applied to the cost basis and are considered return of capital.13inputs.14inputs.2020,2021, this investment is pledged to secure the Company’s debt obligations.15(14)1625%25% of the portfolio company’s outstanding voting securities or has the power to exercise control over management or policies of such portfolio company.17185% but no more than 25%5% of the portfolio company’s outstanding voting securities or is under common control with such portfolio company. Other than for purpose of the 1940 Act, the Company does not believe it has control over this portfolio company.1920In addition to the stated interest rate of this security, which is the amount disclosed in this schedule, the Company is entitled to receive additional interest as a result of an arrangement with other lenders in the syndication, whereby the “first out” tranche will have priority over the Company’s “last out” tranche with respect to payments of principal, interest and any other amounts due thereunder from the borrower. The additional interest received during the quarter has been annualized and included in the spread disclosed for this investment.21Represents co-investment made with the Company's affiliates in accordance with the terms of the exemptive relief that the Company received222020:2021:(unaudited)(in thousands, except share and per share amounts)1(Unaudited)23456 Incentive fees earned duringnine months ended September 30, 2021 were approximately $6.3 million, noneeffects of which were waived. For the nine months ended September 30, 2020, incentive fees earned were approximately $1.1 million, $557 thousand of which were waived pursuant to the Externalization Agreement. Excluding the waiver, for the nine months ended September 30, 2020, ratio of total expenses to average net assets (annualized) was 14.7% and the ratio of non-interest expenses to average net assets (annualized) was 8.0%.7 The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the common stock,share issuance (at net asset valuevalue) from the acquisitions of OHAI, GARS, and perHCAP while utilizing different share data have been adjusted retroactively to reflectcounts in calculating the split.other elements(unaudited)(Unaudited)joint ventures and debt and subordinated securities issued by collateralized loan obligation funds (“CLO Fund Securities”). In addition, from time to time the Company may invest in the equity securities of privately held middle market companies and may also receive warrants or options to purchase common stock in connection with its debt investments.200%200% to 150%150%, effective as of March 29, 2019.“Joint“F3C Joint Venture”). The Company and Freedom 3 Opportunities contributed approximately $37 million and $25 million, respectively, in assets to the Joint Venture, which in turn used the assets to capitalize a new fund (KCAP FC3 Senior Funding, L.L.C. or the “Fund”) managed by KCAP Management, LLC, one of the Company's indirectly wholly-owned Asset Manager Affiliate (as defined below) subsidiaries. In addition, the Fund used cash on hand and borrowings under a credit facility to purchase approximately $184 million of loans from the Company and the Company used the proceeds from such sale to redeem approximately $147 million in debt issued by KCAP Senior Funding I, LLC (“KCAP Senior Funding”). TheF3C Joint Venture may originate loans from time to time and sell them to the Fund.During the fourth quarter of 2017, the Fund was refinanced through the issuance of senior and subordinated notes. The Joint Venture purchased 100% of the subordinated notes issuedfund capitalized by the Fund. In connection with the refinancing, the Company received a cash distribution of $12.6 million, $11.8 million of which was a return of capital.F3C Joint Venture.LibreMax Transaction$37.9$37.9 million (the “LibreMax Transaction”). The LibreMax Transaction closed on December 31, 2018.2018. As of September 30, 2021,2022, the Company’s remaining wholly-owned asset management subsidiaries (the “Asset Manager Affiliates”) were comprised of Commodore, Katonah Management Holdings, LLC, Katonah X Management LLC, Katonah 2007-1 Management, LLC and KCAP Management, LLC. Prior to their sale in the LibreMax Transaction, the Disposed Manager Affiliates represented substantially all of the Company’s investment in the Asset Manager Affiliates.Pursuant to the Externalization Agreement with BCP, the Adviser became the Company’s investment adviser in exchange for a cash payment from BCP, or its affiliate, of $25 million, or $0.669672 per share of the Company’s common stock, directly to the Company’s stockholders. In addition, the Adviser (or its affiliate) agreed to use up to $10 million of the incentive fee actually paid to the Adviser prior to the second anniversary of the Closing to buy newly issued shares of the Company’s common stock at the most recently determined net asset value per share of the Company’s common stock at the time of such purchase. For the period of one year from the first day of the first quarter following the quarter in which the Closing occurred, the Adviser agreed to permanently forego up to the full amount of the incentive fees earned by the Adviser without recourse against or reimbursement by the Company, to the extent necessary in order to achieve aggregate net investment income per common share of the Company for such one-year period to be at least equal to $0.40 per share, subject to certain adjustments.Logan, and certain officers and directors of the Company serve in similar capacities for Mount Logan. In addition, Mount Logan owns a minority equity stake in the Advisor, and Mount Logan owns a minority equity stake in the Company.OHAIGARS TransactionDecember 18, 2019,October 28, 2020 the Company completed its acquisition of OHA Investment Corporation (“OHAI”). In accordance with the terms of the merger agreement, each share of common stock, par value $0.001 per share, of OHAI (the “OHAI Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $0.42, and (ii) 0.3688 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of OHAI Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.15.Pursuant to the merger agreement, if at any time within one year after the closing date of the transaction the Company’s common stock traded at a price below 75% of its net asset value, the Company was obligated to initiate an open-market stock repurchase program of up to $10 million to support the trading price of the combined entity for up to one year from the date such program is announced. The Board approved a stock repurchase program in March 2020.GARS TransactionOn June 24, 2020, the Company entered into an Agreement and Plan of Merger (the “GARS Merger Agreement”) with Garrison Capital Inc., a publicly traded BDC (“GARS”), the Adviser, and a wholly-owned merger subsidiary of the Company (suchsuch transaction, the “GARS Acquisition”).On October 28, 2020 the Company completed the GARS Acquisition, pursuant to the terms and conditions of the GARS Merger Agreement. To effect the acquisition, a wholly owned merger subsidiary of the Company merged with and into GARS, with GARS surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, GARS consummated a second merger, whereby GARS merged with and into the Company, with the Company surviving the merger. Under the terms of the merger agreement for the GARS Acquisition, dated June 24, 2020 (the "GARS Merger Agreement,Agreement"), each share of common stock, par value $0.001$0.001 per share, of GARS (the “GARS"GARS Common Stock”Stock") issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $1.19$1.19 and (ii) approximately 1.917 shares of common stock, par value $0.01$0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of GARS Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.31.December 23, 2020,June 9, 2021 the Company entered into an Agreement and Plancompleted its acquisition of Merger (the “HCAP Merger Agreement”) with Harvest Capital Credit Corporation, a publicly traded BDC (“HCAP”), the Adviser and a wholly-owned merger subsidiary (the “Acquisition Sub”) of the Company (suchsuch transaction, the “HCAP Acquisition”).On June 9, 2021 the Company completed the HCAP Acquisition, pursuant to the terms and conditions of the HCAP Merger Agreement. To effect the acquisition, the Company’s wholly owned merger subsidiary (“Acquisition SubSub”) merged with and into HCAP, with HCAP surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, HCAP consummated a second merger, whereby HCAP merged with and into the Company, with the Company surviving the merger. As a result of, and as of the effective time of, the second merger, HCAP’s separate corporate existence ceased.Agreement,Agreement”), HCAP stockholders as of immediately prior to the effective time of the first merger (other than shares held by a subsidiary of HCAP or held, directly or indirectly, by the Company or Acquisition Sub, and all treasury shares (collectively, “Cancelled Shares”)) received a combination of (i) $18.54$18.54 million in cash paid by the Company, (ii) 15,252,453 validly issued, fully paid and non-assessable shares of the Company’s common stock, par value $0.01$0.01 per share, and (iii) an additional cash payment from the Adviser of $2.15$2.15 million in the aggregate. Shares of common stock issued and market price have not been adjusted to reflect the Reverse Stock Split.PTMN,the Company, HCAP stockholders as of immediately prior to the effective time of the first merger (other than Cancelled Shares) were entitled, with respect to all or any portion of the shares of HCAP common stock they held as of the effective time of the first merger, to elect to receive the merger consideration in the form of cash (an “Election”) or in the form of PTMNthe Company's common stock, subject to certain conditions and limitations in the merger agreement. Any HCAP stockholder who did not validly make an Election was deemed to have elected to receive shares of the Company’s common stock with respect to the merger consideration as payment for their shares of HCAP common stock. Each share of HCAP common stock (other than Cancelled Shares) with respect to which an Election was made was treated as an “Electing Share” and each share of HCAP Common Stock (other than a Cancelled Share) with respect to which an Election was not made or that was transferred after the election deadline on June 2, 2021 was treated as a “Non-Electing Share.”$7.43$7.43 in cash and 0.74 shares of PTMNthe Company's common stock, while each Non-Electing Share received, in aggregate, approximately 3.86 shares of PTMNthe Company's common stock.$28.75$28.75 million in aggregate principal amount of HCAP’s 6.125%6.125% Notes due September 15, 2022 (the “HCAP Notes”).$28.75$28.75 million of the HCAP Notes.1-for-101-for-10 reverse stock split of the issued and outstanding (or held in treasury) shares of the Company’s common stock, par value $0.01$0.01 per share (the “Reverse Stock Split”). The Reverse Stock Split became effective as of 12:01 a.m. (Eastern Time) on August 26, 2021.2020,2021, as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”). The Company is an investment company and follows accounting and reporting guidance in Accounting Standards Codification (“ASC”) topic 946 – Financial Services – Investment Companies. (“GF CLO 2018-2”), Great Lakes KCAP Funding I LLC, Kohlberg Capital Funding I LLC, KCAP Senior Funding I, LLC, KCAP Funding I Holdings, LLC, and Great Lakes Portman Ridge Funding, LLC and HCAP ICC, LLC in its consolidated financial statements as they are operated solely for investment activities of the Company. The creditors of Great Lakes KCAP Senior Funding I, LLC and Great Lakes Portman Ridge Funding, LLC received security interests in the assets which are owned by them and such assets are not intended to be available to the creditors of Portman Ridge Finance Corporation., or any other affiliate. All of the borrowings of Kohlberg Capital Funding LLC I, KCAP Senior Funding I, LLC Great Lakes KCAP Funding I, LLC and HCAP ICC, LLC have been fully repaid. The Company also consolidates various subsidiaries (KCAP Coastal, LLC, PTMN Sub Holdings, LLC, OHA Funding, LP, Garrison Capital Equity Holdings I LLC, Garrison Capital Equity Holdings II, LLC, Garrison Capital Equity Holdings VIII LLC, Garrison Capital Equity Holdings XI LLC, GIG Rooster Holdings, LLC, and HCAP Equity Holdings, LLC and PTMN Sub Holdings LLC) created primarily to provide specific tax treatment for the equity and other investments held by these entities.interest (e.g., the Asset Manager Affiliates).interest.calendar-year)calendar year) basis at the end of the year based upon our taxable income for the full year and the distributions paid during the full year. Therefore, an estimate of tax attributes made on a quarterly basis may not be representative of the actual tax attributes of distributions for a full year.quarternine months ended September 30, 2021,2022, the Company provided approximately $95.9$174.9 million to portfolio companies. Approximately $48.7$24.7 million of this support was contractually obligated. See also Note 8 – Commitments and Contingencies. As of September 30, 2021,2022, the Company held loans it has made to 14593 investee companies with aggregate principal amounts of approximately $485.1$508.3 million. The details of such loans have been disclosed on the unaudited consolidated schedule of investments as well as in Note 4 – Investments. In addition to providing loans to investee companies, from time to time the Company assists investee companies in securing financing from other sources by introducing such investee companies to sponsors or by, among other things, leading a syndicate of lenders to provide the investee companies with financing. During the nine months ended September 30, 20212022 and 2020,2021, the Company did not recognize any fee income from such or similar activities.Company’sCompany.position, resultsstatements, but the impact of operations and cash flows.the adoption is not expected to be material.Investmentsultimatelyresponsible for performing fair value determinations relating to all of the Company's investments, including periodically assessing and solelymanaging any material valuation risks and establishing and applying fair value methodologies, in accordance with valuation policies and procedures that have been approved by the Board. The Board remains ultimately responsible for making a good faith determinationfair value determinations under the 1940 Act and satisfies its responsibility through oversight of the fair value of portfolio investments on a quarterly basis.valuation designee in accordance with Rule 2a-5. Debt and equity securities for which market quotations are readily available are generally valued at such market quotations. Debt and equity securities that are not publicly traded or whose market price is not readily available are valued by the BoardAdviser based on detailed analyses prepared by management and, in certain circumstances, third parties with valuation expertise. Valuations are conducted by management on 100%100% of the investment portfolio at the end of each quarter. The Company follows the provisions of ASC 820: Fair Value Measurements and Disclosures (“ASC 820: Fair Value”). This standard defines fair value, establishes a framework for measuring fair value, and expands disclosures about assets and liabilities measured at fair value. ASC 820: Fair Value defines “fair value” as 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.firm performsfirms perform third party valuations of the Company’s investments in material illiquid securities such that they are independently valuedreviewed at least once during a trailing 12-month period. These third-party valuation estimates are considered as one of the relevant data points in the Company’s determination of fair value.Company intends to continue to engage an independent valuation firm in the future to provide certain valuation services, including the review of certain portfolio assets, as part of the quarterly and annual year-end valuation process.The BoardAdviser may consider other methods of valuation than those set forth below to determine the fair value of Level III investments as appropriate in conformity with GAAP. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ materially from the values that would have been used had a readily available market existed for such investments. Further, such investments may be generally subject to legal and other restrictions on resale or otherwise be less liquid than publicly traded securities. In addition, changes in the market environment and other events may occur over the life of the investments that may cause the value realized on such investments to be different from the currently assigned valuations.Foreign Currency Translations.The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.Securities.Securities. To the extent that the Company’s investments are exchange tradedliquid and are priced or have sufficient price indications from normal course trading at or around the valuation date (financial reporting date), such pricing will be used to determine the fair value of the investments. Valuations from third party pricing services may be used as an indication of fair value, depending on the volume and reliability of the valuation, sufficient and reasonable correlation of bid and ask quotes, and, most importantly, the level of actual trading activity. However, if the Company has been unable to identify directly comparable market indices or other market guidance that correlate directly to the types of investments the Company owns, the Company will determineSecurities.Securities. The Company’s equity securities in portfolio companies for which there is no liquid public market are carried at fair value based on the enterprise value of the portfolio company, which is determined using various factors, including EBITDA (earnings before interest, taxes, depreciation and amortization) and discounted cash flows from operations, less capital expenditures and other pertinent factors, such as recent offers to purchase a portfolio company’s securities or other liquidation events. The determined fair values are generally discounted to account for restrictions on resale and minority ownership positions. In the event market quotations are readily available for the Company’s equity securities in public companies, those investments may be valued using the Market Approach (as defined below). In cases where the Company receives warrants to purchase equity securities, a market standard Black-Scholes model is utilized.Derivatives.Derivatives. The Company recognizes all derivative instruments as assets or liabilities at fair value in its financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result the Company presents changes in fair value and realized gains or losses through current period earnings. Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process. The derivatives may require the Company to pay or receive an upfront fee or premium. These upfront fees or premiums are carried forward as cost or proceeds to the derivatives. The Company generally records a realized gain or loss on the expiration, termination, or settlement of a derivative contract. The periodic payments for the securities Swap and Option Agreement (excluding collateral) are included as a realized gain or loss.Affiliates.Affiliates. The Company sold substantially all of its investment in the AssetDisposed Manager Affiliates on December 31, 2018. Previously, the Company’s investments in its wholly-owned Asset Manager Affiliates, were carried at fair value, which was primarily determined utilizing the discounted cash flow approach, which incorporated different levels of discount rates depending on the hierarchy of fees earned (including the likelihood of realization of senior, subordinate and incentive fees) and prospective modeled performance. Such valuation took into consideration an analysis of comparable asset management companies and the amount of assets under management. The Asset Manager Affiliates were classified as a Level III investment. Any change in value from period to period was recognized as net change in unrealized appreciation or depreciation. The Company continues to own certain Asset Manager Affiliates legal entities which the Company values at zero. Until such entities are disposed, the Company continues to carry the cost of the Asset Manager Affiliates on the Consolidated Schedule of Investments.Securities.Securities. The Company typically makes a non-controlling investment in the most junior class of securities of CLO Funds. The investments held by CLO Funds generally relate to non-investment grade credit instruments issued by corporations.investments.investments. Short-term investments are generally comprised of money market accounts, time deposits, and U.S. treasury bills.Ventures.Ventures. The Company carries investments in joint ventures (“Joint Ventures”) at fair value based upon the fair value of the investments held by the joint venture.venture, or the net asset value as a practical expedient. See Note 4 below, for more information regarding the Joint Ventures.Equivalents. Equivalentsknowknown amounts of cash, with an original maturity of three months or less in accounts such as demand deposit accounts money market accounts,and certain overnight investment sweep accounts and money market fund accounts. The company records cash and cash equivalents at amortized cost, which approximates fair value.. (e.g., money market funds) generally consists of cash held for interest and principal payments on the Company’s borrowings.Income.Income. Interest income, including the amortization of premium and accretion of discount and accrual of payment-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. The Company generally places a loan or security on non-accrual status and ceases recognizing interest income on such loan or security when a loan or security becomes 90 days or more past due or if the Company otherwise does not expect the debtor to be able to service its debt obligations. Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over therespective terms of the applicable loans. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income.2021, six2022, three of our debt investments were on non-accrual status.Distributions from Asset Manager Affiliates. The Generally, the Company records distributions fromwill capitalize loan origination fees, then amortize these fees into interest income over the Asset Manager Affiliates on the declaration date, which represents the ex-dividend date. Distributions in excess of tax-basis earnings and profitsterm of the distributing affiliate company are recognizedloan using the effective interest rate method, recognize prepayment and liquidation fees upon receipt and equity structuring fees as tax-basis return of capital. For interim periods, the Company estimates the tax attributes of any distributions as being either from tax-basis earnings and profits (i.e., dividend income) or return of capital (i.e., adjustment to the Company’s cost basis in the Asset Manager Affiliates). The final determination of the tax attributes of distributions from the Asset Manager Affiliates is made onearned, which generally occurs when an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full-year. Therefore, any estimate of tax attributes of distributions made on a quarterly basis may not be representative of the actual tax attributes of distributions for a full year.investment transaction closes.Securities.Securities. The Company generates investment income from its investments in the most junior class of securities issued by CLO Funds (typically preferred shares or subordinated securities). The Company’s CLO Fund junior class securities are subordinated to senior note holders who typically receive a stated interest rate of return based on a floating rate index, such as the London Interbank Offered Rate (“LIBOR”) on their investment. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior note holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. For U.S. tax purposes, these CLO equity investments are treated as Passive Foreign Investment Companies (“PFICs”). Taxable income is provided on a PFIC statement, where income and capital gains are determined based on the U.S. shareholder's proportionate ownership of the PFIC.Ventures.Ventures. The Company recognizes investment income on its investment in the Joint Ventures based upon its share of the estimated earnings and profits of the Joint Venture on the ex-dividend or ex-distribution date. The final determination of the tax attributes of distributions from the Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.Capital Structuring Service Fees. The Company may and other income. Origination fees (to the extent services are performed to earn ancillary structuringsuch income), amendment fees, consent fees, and other fees related to the origination, investment, disposition or liquidation of debt and investment securities. Generally,associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company will capitalize loan origination fees, then amortize these fees into interestfor debt instruments repaid prior to maturity date are recorded as income over the term of the loan using the effective interest rate method, recognize prepayment and liquidation fees upon receipt and equity structuring fees as earned, which generally occurs when an investment transaction closes.receipt. and Issuance Discounts. including original issue discounts, represent fees and other direct costs incurred in connection with the Company’s borrowings. These amounts are capitalized, presented as a reduction of debt, and amortized using the effective interest method and included as a component of interest expense over the expected term of the borrowing.. must derecognizederecognizes a liability if and only if it has been extinguished through delivery of cash, delivery of other financial assets, delivery of goods or services, or reacquisition by the Company of its outstanding debt securities whether the securities are cancelled or held. If the debt contains a cash conversion option, the Company must allocateallocates the consideration transferred and transaction costs incurred to the extinguishment of the liability component and the reacquisition of the equity component and recognize a gain or loss in the statement of operations.Expenses. The Company is externally managed and in connection with the Advisory Agreement, pays the Adviser certain investment advisory fees and reimburses the Adviser and Administrator for certain expenses incurred in connection with the services they provide. See Note 5 “Related Party Transactions - Payment of Expenses under the Advisory and Administration Agreements.”. DRIP)"DRIP") that provides for reinvestment of its distributions on behalf of its stockholders, unless a stockholder “opts out” of the DRIP to receive cash in lieu of having their cash distributions automatically reinvested in additional shares of the Company’s common stock.stockholders’ equitynet assets per share for the three and nine months ended September 30, 20212022 and 2020:2021:split.split.4.INVESTMENTS20212022 and December 31, 2020:2021:
Cost
Cost1
(Unaudited)
Cost
Cost220212022 and December 31, 20202021 were as follows:
Cost
Cost1
(Unaudited)
Cost
Cost230%30% of the investment portfolio in “non-qualifying” opportunistic investments, including investments in debt and equity securities of CLO Funds, distressed debt or debt and equity securities of large cap public companies. Within this 30%30% of the portfolio, the Company also may invest in debt of middle market companies located outside of the United States.20212022 and December 31, 2020,2021, the total amount of non-qualifying assets was approximately 15.6%15.3% and 13.8%15.8% of total assets, respectively. The majority of non-qualifying assets are the Company’s investments in joint ventures which were approximately 10.8%7.2% and 8.2%,9.3% respectively, of the total assets and the Company’s investments in CLO Funds, which are typically domiciled outside the U.S. and represented approximately 2.7%3.9% and 3.3%4.9% of its total assets on such dates, respectively.Fund’sFunds securities less contractual payments to senior bond holders, management fees and CLO Fund expenses. CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which the Company has an investment are generally diversified secured or unsecured corporate debt. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fundCLO Funds less payments made to senior bond holders, fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares.In the first quarter of 2019, the Company sold $2.0 million notional amount of subordinated notes of Catamaran CLO 2014-1 for $800,000.In June 2019, the Company sold $4.8 million par value of the CLO Rated note issued by Great Lakes KCAP F3C Senior, LLC for $4.4 million.$10.1$10.1 million notional amount of the subordinated notes of Catamaran 2016-1 for $3.3$3.3 million.As a result of the economic consequences resulting from the COVID 19 pandemic, during the second quarter of 2020,In July 2022, the Company received a final cash distribution from Catamaran 2013-1, and the Company's investment in Catamaran 2013-1 was notified that four of the Catamaran CLO Funds breached certain covenants containedredeemed in their respective indentures, and as a result, available cash within the CLO Fund will be diverted away from the subordinated notes owned by the Company and will be applied to more senior noteholders in the capital structure of the CLO Funds. The estimated timing and amount of future distributions if any, from these CLO Fund Securities is uncertain. Three of the CLO Funds noted above resumed making cash distributions on the Company’s investment during the fourth quarter of 2020.full.20212022 (unaudited):
Classification
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2020
(Sales) of or
Advances/
(Distributions)
Accretion
In/(Out)
of
Affiliates
Gain/(Loss)
Gain/(Loss)
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September 30,
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Income
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Company
Gas
Gas
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as of
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2021
(Sales) of or
Advances/
(Distributions)
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In/(Out)
of
Affiliates
Gain/(Loss)
Gain/(Loss)
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Gas
Gas
Gas1(1)2345but no more than 25% of the portfolio company’s outstanding voting securities or is under common control with such portfolio company. Other than for purposes of the 1940 Act, the Company does not believe that it has control over this portfolio company.672020:2021:
Classification
of
December 31,
2019
(Sales) of or
Advances/
(Distributions)
Accretion
In/(Out)
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Affiliates
Gain/(Loss)
Gain/(Loss)
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December 31,
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Income
Management
Company
Gas
Gas
Securities
Securities
Securities
Securities
Securities
Securities
Gas1 Non-U.S. company or principal place of business outside the U.S.2 A CLO Fund managed by an affiliate of LibreMax.3
Classification
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2020
(Sales) of or
Advances/
(Distributions)
Accretion
In/(Out)
of
Affiliates
Gain/(Loss)
Gain/(Loss)
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December 31,
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Income
Income
Management
Company
Gas
Gas
Gas4567but no more than 25% of the portfolio company’s outstanding voting securities or is under common control with such portfolio company. Other than for purposes of the 1940 Act, the Company does not believe that it has control over this portfolio company.8910 Underlying assets of investment were liquidated in December 2020, remaining fair value of investment is based on future cash flow payment to be received in the first quarter of 2021.During the third quarter of 2019, the Company sold its entire investment in Bristol Hospice, LLC to an affiliate. This transaction was approved by the Board of Directors of the Company.20212022 and 2020,2021, the Company recognized $2.4$2.2 million and $2.2$2.4 million, respectively, in investment income from its investments in Joint Ventures. For the nine months ended September 30, 20212022 and 2020,2021, the Company recognized $7.0$6.4 million and $4.8$7.0 million, respectively, in investment income from its investments in Joint Ventures. As of September 30, 20212022 and December 31, 2020,2021, the aggregate fair value of the Company’s investments in Joint Ventures was approximately $67.6$45.1 million and $49.3$60.5 million, respectively.the Joint Venture. The Company andKCAP Freedom 3 Opportunities contributed approximately $37 million and $25 million, respectively, in assets toLLC (the “F3C Joint Venture”). The fund capitalized by the F3C Joint Venture which in turn used the assets to capitalize the Fund managed by KCAP Management, LLC, one of the Asset Manager Affiliates. In addition, the Fund used cash on hand and borrowings under a credit facility to purchase approximately $184 million of primarily middle-market loans from the Company and the Company used the proceeds from such sale to redeem approximately $147 million in debt issued by KCAP Senior Funding. The Fund invests primarily in middle-market loans and the F3C Joint VenturesVenture partners may source middle-market loans from time-to-time for the Fund.fund.During the fourth quarter of 2017, the Fund was refinanced through the issuance of senior and subordinated notes. The Joint Venture purchased 100% of the subordinated notes issued by the Fund. In connection with the refinancing, the Joint Venture madeCompany owns a cash distribution to the Company of approximately $12.6 million. $11.8 million of this distribution was a return of capital, reducing the cost basis of its62.8% equity investment in the Joint Venture by that amount. The final determination of the tax attributes of distributions from the Joint Venture is made on an annual (full calendar year) basis at the end of the year, therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.During the second quarter of 2021, the Company contributed an additional $2.5 million cash investment, increasing its equity ownership interest to 62.83% in theF3C Joint Venture. The F3C Joint Venture is structured as an unconsolidated Delaware limited liability company. All portfolio and other material decisions regarding the F3C Joint Venture must be submitted to its board of managers, which is comprised of four members, two of whom were selected by the Company and two of whom were selected by Freedom 3 Opportunities, and must be approved by at least one member appointed by the Company and one appointed by Freedom 3 Opportunities. In addition, certain matters may be approved by the F3C Joint Venture’s investment committee, which is comprised of one member appointed by the Company and one member appointed by Freedom 3 Opportunities.In connection with the Externalization, during the first quarter of 2019, KCAP Management agreed to waive management fees it is otherwise entitled to receive for managing the Fund. In addition, the Joint Venture was restructured such that the Company is now entitled to receive a preferred distribution in an amount equal to the fees waived by KCAP Management. The impact of these transactions was a reduction in the fair value of the Asset Manager Affiliates and an increase in the fair value of the Company’s investment in the Joint Venture during the first quarter of 2019. The reduction in the fair value of the Asset Manager Affiliates was recognized as a realized loss on the consolidated statement of operations. The increase in the fair value of the Company’s investment in the Joint Venture was recognized as an unrealized gain in the consolidated statement of operations.StatementStatements of Financial Condition
December 31,
2020
(Unaudited)StatementStatements of Operations(unaudited)($ in thousands)20212022(unaudited)($ in thousands)
Ownership
by Joint
Venture
Cost
Ownership
by Joint
Venture
Cost20202021
Ownership
by Joint
Venture
Cost
Ownership
by Joint
Venture
CostBCPSeries A – Great Lakes Partnership LPFunding II LLCBCPIn August 2022, the Company invested in Series A – Great Lakes Fund LPFunding II LLC (the “BCP“Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. The Company treats its investment in the Great Lakes Partnership”) has investedII Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, the Company entered into a series of transactions pursuant to which the Company’s prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the “Great“Prior Great Lakes Joint Venture”). The Company is a limited partner in, and the BCP Great Lakes Partnership and does not have any direct or indirect voting interests incorresponding assets held by the Prior Great Lakes Joint Venture and treats the investment as a joint venture since an affiliatein respect of the Adviser managesCompany’s investment in BCP Great Lakes Holdings LP, and controls a 50% voting interest inwere transferred to the Great Lakes II Joint Venture. ThisVenture in complete redemption of the Company’s investment was madein BCP Great Lakes Holdings LP.Externalization and as such the Company has changed its characterization from an equity investment prior to the Externalization to a joint venture investment once the Company became externally managed and an affiliateend of the Adviser. The investment strategy of BCPperiod with respect to each series established under the Great Lakes Funding,II LLC isAgreement, each member of the predecessor series would be offered the opportunity to underwrite and hold senior, secured unitranche loans made to middle-market companies.roll its interests into any subsequent series of the Great Lakes II Joint Venture. The Company does not pay any advisory fees in connection with its investment in the BCP Great Lakes Partnership.II Joint Venture. Certain other funds managed by the Adviser or its affiliates have also invested in the Great Lakes II Joint Venture.BCP Great Lakes PartnershipII Joint Venture at September 30, 2021 and2022 was $27.0 million. The fair value of the Company’s investment in the Prior Great Lakes Joint Venture at December 31, 20202021 was $43.7 million and $29.6$37.4 million. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the BCP Great Lakes Fund LP Amended and Restated Exempted Limited PartnershipII LLC Agreement, (the “BCP Great Lakes Partnership Agreement”), the Company generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon its interests in the Great Lakes II Joint Venture, except that the Company may sell exchange, assign, pledge or otherwise transfer its interest, in whole or in part, withoutinterests with the prior written consent of the General Partner which consent may be given or withheld in its sole and absolute discretion, and may be conditioned upon repaymentmanaging members of its share of indebtedness incurred by the partnership.In March 2019, prior to the Externalization, the Company increased its aggregate commitment to the BCP Great Lakes PartnershipII Joint Venture or to $50 million, subjectan affiliate or a successor to certain limitations (including that the Company is not obligated to fund capital calls if such funding would cause the Company to be out of compliance with certain provisionssubstantially all of the 1940 Act). assets of the Company.2021 and December 31, 2020,2022, the Company has a $6.9$21.7 million and $20.0 million, respectively unfunded commitment to the BCP Great Lakes Partnership.2021(unaudited)2022 (unaudited) and December 31, 2020,2021, respectively:BCP Great Lakes PartnershipII Joint Venture at September 30, 2021 and2022 was $27.0 million. The fair value of the Company's investment in the Prior Great Lakes Joint Venture at December 31, 20202021 was $43.7 million and $23.8$37.4 million. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10.
Securities
Securities
Securities
Affiliate
Ventures1
Securities
Securities
Securities
Ventures$13.8$14.0 million relating to debt securities and equity securities for which pricing inputs, other than their quoted prices in active markets were observable as of September 30, 2021.22022.$20.1$5.4 million relating to debt securities for which pricing inputs, other than their quoted prices in active markets were unobservable as of September 30, 2021.2022.
Securities
Securities
Securities
Affiliate
Ventures1
Securities
Securities
Securities
Ventures$5.5$13.8 million relating to debt securities for which pricing inputs, other than their quoted prices in active markets were observable as of December 31, 2020.September 30, 2021.2(2)$5.3$20.1 million relating to debt securities for which pricing inputs, other than their quoted prices in active markets were unobservable as of December 31, 2020.September 30, 2021.20212022 and December 31, 2020,2021, the Company’s Level II portfolio investments were valued by a third party pricing services for which the prices are not adjusted and for which inputs are observable or can be corroborated by observable market data for substantially the full character of the financial instrument, or by inputs that are derived principally from, or corroborated by, observable market information. The fair value of the Company’s Level II portfolio investments was $71.8$65.2 million and $70.6$42.9 million as of September 30, 20212022 and December 31, 2020,2021, respectively.20212022 the Company’s Level III portfolio investments had the following valuation techniques and significant inputs:
Techniques
Inputs
(Weighted Average)
EBITDA
Multiple
Discount Rate
EBITDA
Multiple /
WACC
Discount Rate
Default
Rate
Default
Rate1
Techniques
Inputs
(Weighted Average)
EBITDA
Multiple
Discount Rate
Discount Rate
EBITDA
Multiple /
WACC
Discount Rate
Discount Rate
Default
Rate
Default
Rate22020,2021, the Company’s Level III portfolio investments had the following valuation techniques and significant inputs:
Techniques
Inputs
(Weighted Average)
EBITDA
Multiple
Discount Rate
EBITDA
Multiple /
WACC
Discount Rate
Default
Rate
Default
Rate1
Techniques
Inputs
(Weighted Average)
EBITDA
Multiple
Discount Rate
EBITDA
Multiple /
WACC
Discount Rate
Default
Rate
Default
Rate2Venture- KCAP Freedom 3 LLCVenture is carried at fair value based upon the fair value of the investments held by the F3C Joint Venture.20212022 and December 31, 2020:2021:(2)(1)•••••••••••“Base“Base Management Fee”Fee”) and (ii) an incentive fee (the “Incentive Fee”“Incentive Fee”). For the period from the date of the Advisory Agreement (the “Effective Date”“Effective Date”) through the end of the first calendar quarter after the Effective Date, the Base Management Fee will be calculated at an annual rate of 1.50% of the Company’s gross assets, excluding cash and cash equivalents, but including assets purchased with 17.50%17.50% of pre-incentive fee net investment income with a 7.00%7.00% hurdle rate. The Capital Gains Fee is 17.50%17.50%.17.50%17.50% of cumulative realized capital gains through the end of such calendar year commencing with the calendar year ending December 31, 2019, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, in each case calculated from the Effective Date, less the aggregate amount of any previously paid capital gains incentive fee for prior periods. The Company will accrue, but will not pay, a capital gains incentive fee with respect to unrealized appreciation because a capital gains incentive fee would be owed to the Adviser if the Company were to sell the relevant investment and realize a capital gain. In no event will the capital gains incentive fee payable pursuant to the Investment Advisory Agreement be in excess of the amount permitted by the Investment Advisers Act of 1940, as amended (the “Advisers Act”) including Section 205 thereof.11, 2021.8, 2022. In reaching a decision to re-approve the Advisory Agreement, the Board was provided the information required to consider the Advisory Agreement, including: (a) the nature, quality and extent of the advisory and other services to be provided to the Company by the Adviser; (b) comparative data with respect to advisory fees or similar expenses paid by other BDCs with similar investment objectives; (c) the Company projected operating expenses and expense ratio compared to BDCs with similar investment objectives; (d) any existing and potential sources of indirect income to the Adviser from its relationship with the Company and the profitability of that relationship; (e) information about the services to be performed and the personnel performing such services under the Advisory Agreement; and (f) the organizational capability and financial condition of the Adviser and its affiliates; (g) the Adviser’s practices regarding the selection and compensation of brokers that may execute our portfolio transactions and the brokers’ provision of brokerage and research services to the Adviser; and (h) the possibility of obtaining similar services from other third-party service providers or continuing to operate as an internally managed BDC.affiliates.reviewreviews the compensation we pay to the Adviser.20212022 and 2020, were approximately $2.1 million and $1.0 million, respectively. Incentive fees earned during the three months ended September 30, 2021 were approximately $1.9$2.1 million none of which were waived pursuant to the Externalization Agreement. Incentive fees earned during the three months ended September 30, 2020 were approximately $572 thousand, none of which were waived pursuant to the Externalization Agreement.20212022 and 2020,2021 were approximately $5.8$6.3 million and $3.1$5.8 million, respectively. Incentive fees earned duringfor the three months ended September 30, 2022 and 2021 were approximately $1.8 million and $1.9 million, respectively. Incentive fees for the nine months ended September 30, 2022 and 2021 were approximately $6.3$4.6 million none of whichwere waived pursuant to the Externalization Agreement. Incentive fees earned during the nine months ended September 30, 2020 were approximately $1.1and $6.3 million, of which $557 thousand were waived pursuant to the Externalization Agreement.respectively.11, 2021.8, 2022.$0.8 million$862 thousand and $2.1$2.5 million, respectively, of Administrative services expense for the three and nine months ended September 30, 2021.2022. The Company incurred $0.5 million$760 thousand and $1.4$2.1 million, respectively, of Administrative services expense for the three and nine months ended September 30, 2020.2021., and the compensation and routine overhead expenses (including rent, office equipment and utilities), of such personnel allocable to such services, is provided and paid for by the Adviser. The Company bears an allocable portion of the compensation paid by the Adviser (or its affiliates) to the Company’s chief compliance officer and chief financial officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). The Company also bears all other costs and expenses of our operations, administration and transactions, including, but not limited to (i) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Advisory Agreement; (ii) an allocable portion of overhead and other expenses incurred by the Adviser (or its affiliates) in performing its administrative obligations under the Advisory Agreement, and (iii) all other expenses of our operations and transactions including, without limitation, those relating to:••••••••••••••••••••••••BCP Special Opportunities Fund II LP,BC Partners Lending Corporation, Logan Ridge Finance Corporation, BC Partners Lending Corporation and any future funds that are advised by the Adviser or its affiliated investment advisers. Under the terms of the exemptive order, in order for the Company to participate in a co-investment transaction a “required majority” (as defined in Section 57(o) of the 1940 Act) of the Company’s independent directors must conclude that (i) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to the Company and its stockholders and do not involve overreaching with respect of the Company or its stockholders on the part of any person concerned, and (ii) the proposed transaction is consistent with the interests of the Company’s stockholders and is consistent with the Company’s investment objectives and strategies and certain criteria established by the Board.
2021 (Unaudited)
202020212022 was 3.2%5.0% and 6.15.2 years, respectively, and as of December 31, 20202021 were 3.0%3.2% and 6.75.4 years, respectively.$80,000,000$80 million in aggregate principal amount of unsecured 4.875%4.875% Notes due 2026 (the “4.875% Notes due 2026”) in a private placement exempt from registration under the Section 4(a)(2) of the Securities Act. The 4.875%4.875% Notes due 2026 havewere not been registered under the Securities Act or any state securities laws and may not be reoffered or resold in the United States absent registration or an applicable exemption from such registration requirements. The net proceeds to the Company were approximately $77.7$77.7 million, after deducting estimated offering expenses. The Company used the net proceeds of the offering to redeem in full its 6.125%6.125% Notes due 2022, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.4.875%4.875% Notes due 2026.4.875%4.875% Notes due 2026 will mature on April 30, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture and bear interest at a rate of 4.875%4.875% per year payable semi-annually on March 16 and September 16 of each year, commencing on September 16, 2021.2021. The 4.875% Notes due 2026 are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 4.875% Notes due 2026, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.100%100% of the principal amount of such notes plus accrued and unpaid interest to the repurchase date.Registration Rights AgreementIn connection with the offering of 4.875% Notes due 2026, the Company entered into a Registration Rights Agreement, dated as of April 30, 2021 (the “Registration Rights Agreement”), with the purchasers of the 4.875% Notes due 2026. Pursuant to the Registration Rights Agreement, the Company is obligated to file with the SEC a registration statement relating to an offer to exchange the 4.875% Notes due 2026 for new notes issued by the Company that are registered under the Securities Act and otherwise have terms substantially identical to those of the 4.875% Notes due 2026, and to use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company is not able to effect the exchange offer, the Company will be obligated to file a shelf registration statement covering the resale of the 4.875% Notes due 2026 and use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company fails to satisfy its registration obligations by certain dates specified in the Registration Rights Agreement, it will be required to pay additional interest to the holders of the 4.875% Notes due 2026.$28,000,000$28 million in aggregate principal amount of its 4.875%4.875% Notes due 2026 (the “New Notes”) in a private placement exempt from registration under the Section 4(a)(2) of the Securities Act. The New Notes have not been registered under the Securities Act or any state securities laws and may not be reoffered or resold in the United States absent registration or an applicable exemption from such registration requirements. The net proceeds to the Company were approximately $27.4$27.4 million, after deducting estimated offering expenses. The Company intends to use the net proceeds of the offering to redeem in full its HCAP Notes (as defined below), make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.$80.0$80.0 million of aggregate principal amount of 4.875% Notes due 2026 that were issued on April 30, 2021, other than the issue date. The New Notes will be treated as a single class of notes with the Company’s existing 4.875% Notes due 2026 for all purposes under the Indenture.$2.43$2.43 million of original issue discount, and $969 thousand$1.2 million of debt offering costs, both of which were being amortized over the expected term of the facility on an effective yield method.$2.27$1.8 million and unamortized offering costs of approximately $948$880 thousand as of September 30, 2021.2022. The fair value of the Company’s outstanding 4.875% Notes Due 2026 was approximately $104.8$105.3 million at September 30, 2021.2022. The fair value was determined based on the recent transaction price. The 4.875% Notes Due 2026 were categorized as Level II under the ASC 820 Fair Value.$77.4$77.4 million in aggregate principal amount of unsecured 6.125%6.125% Notes due 2022 (the 6.125% Notes Due 2022). The net proceeds for these Notes, after the payment of underwriting expenses, were approximately $74.6$74.6 million. Interest on the 6.125% Notes Due 2022 iswas paid quarterly in arrears on March 30, June 30, September 30 and December 30, at a rate of 6.125%6.125%. The 6.125% Notes Due 2022 mature on September 30, 2022 and are unsecured obligations of the Company. The 6.125% Notes Due 2022 are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on or after September 30, 2019, at a redemption price per security equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to the date fixed for redemption. The indenture governing the 6.125% Notes Due 2022 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act related to borrowing and dividends. and 2020, interest expense related to the 6.125% Notes Due 2022 was approximately $0$0 and $1.2$2.0 million, respectively. For the nine months ended September 30, 2021 and 2020, interest expense related to the 6.125% Notes Due 2022 was approximately $2.0 and $3.5 million, respectively.6.125%6.125% Notes due 2022 of the Company’s election to redeem the $77.4$77.4 million aggregate principal amount of the 6.125% Notes due 2022 outstanding, and instructed the trustee to provide notice of such redemption to the holders of the 6.125% Notes due 2022 in accordance with the terms of the indenture governing the 6.125% Notes due 2022. The redemption was completed on May 30, 2021.2021. Following the redemption, none of the 6.125% Notes due 2022 remain outstanding, and they were delisted from the NASDAQ Global Select Market. In connection with the issuance of the 6.125% Notes Due 2022, the Company incurred approximately $2.9$2.9 million of debt offering costs which were being amortized over the$1.0$1.0 million of unamortized debt offering costs which are reflected in Realized Losses on Extinguishment of Debt on the Consolidated Statement of Operations. As of December 31, 2020 there was approximately $1.1 million of unamortized debt offering costs included on the consolidated balance sheets as a reduction in the related debt liability.During the quarter ended March 31, 2020, the Company repurchased approximately $573 thousand of principal amount of the 6.125% Notes Due 2022 at a cost of approximately $419 thousand, resulting in a realized gain on extinguishment of approximately $154 thousand. The Company subsequently surrendered these notes to the Trustee for cancellation.Fair Value of 6.125% Notes Due 2022. The 6.125% Notes Due 2022 were issued via public offering during the third quarter of 2017 and are carried at cost, net of offering costs $1.1 million at December 31, 2020. The fair value of the Company’s outstanding 6.125% Notes Due 2022 was approximately $78.1 million at December 31, 2020. The fair value was determined based on the closing price on December 31, 2020 for the 6.125% Notes Due 2022. The 6.125% Notes Due 2022 were categorized as Level II under the ASC 820 Fair Value.$28.75$28.75 million in aggregate principal amount of HCAP Notes.$28.75$28.75 million aggregate principal amount of the HCAP Notes outstanding, and instructed the trustee to provide notice of such redemptions to the holders of such notes in accordance with the terms of the indenture governing the HCAP Notes. The Company completed the redemption on July 23, 2021. Following the redemption, none of the HCAP Notes remain outstanding, and they were delisted from the NASDAQ Global Select Market.Revolving Credit FacilitiesOn March 1, 2018, Great Lakes KCAP Funding I, LLC (“Funding”), our wholly owned subsidiary, entered into a senior secured revolving credit facility (the “Prior Revolving Credit Facility”) with certain institutional lenders, State Bank and Trust Company, as the administrative agent, lead arranger and bookrunner, CIBC Bank USA, as documentation agent and the Company, as the servicer. The maximum commitment amount of the Prior Revolving Credit Facility was increased on March 27, 2019 to $57.5 million, and on April 1, 2019 to $67.5 million, subject to availability under the borrowing base. In December 2019, the Prior Revolving Credit Facility was fully repaid and the related agreements, including security interests in assets pledged as collateral, were terminated on December 23, 2019. The Company recognized a realized loss on extinguishment of debt of approximately $1.1 million in connection with the termination of the Prior Revolving Credit Facility.Borrowings under the Prior Revolving Credit Facility bore interest at a rate per annum equal to (i) in the case of LIBOR rate loans, an adjusted LIBOR rate for the applicable interest period plus 3.25% or (ii) in the case of base rate loans, the prime rate plus 3.25%.The Prior Revolving Credit Facility was secured by all of the assets held by Funding, and the Company had pledged its interests in Funding as collateral to State Bank and Trust Company, as the administrative agent, to secure the obligations of Funding under the Revolving Credit Facility. The Revolving Credit Agreement includes customary affirmative and negative covenants, including certain limitations on the incurrence of additional indebtedness and liens, as well as usual and customary events of default for revolving credit facilities of this nature.2.85%2.85% per annum. GLPRF LLC is required to utilize a minimum of 80%80% of the commitments under the Revolving Credit Facility, after an initial six-month ramp-up period during which a lesser minimum utilization requirement applies. Unused amounts below such minimum utilization amount accrue interest as if such amounts are outstanding as borrowings under the Revolving Credit Facility. In addition, GLPRF LLC will pay a non-usage fee during the first three years after the closing date in an amount not to exceed 0.50%0.50% per annum on the average daily unborrowed portion of the financing commitments in excess of such minimum utilization amount.$115$115 million. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Revolving Credit Facility to up to $215$215 million. Proceeds from borrowings under the Revolving Credit Facility may be used to fund portfolio investments by GLPRF LLC and to make advances under delayed draw term loans where GLPRF LLC is a lender. All amounts outstanding under the Revolving Credit Facility must be repaid by the maturity date of December 18, 2023.2023.2021,2022, GLPRF LLC was in compliance with all of its debt covenants and $69.1$97.1 million principal amount of borrowings was outstanding under the Revolving Credit Facility. The fair value of GLPRF LLC debt outstanding was approximately $68.2$95.9 million at September 30, 20212022 and categorized as Level III under the ASC 820 Fair Value HierarchyHierarchy.20212022 and 20202021 interest and fees expense related to the Revolving Credit Facility was approximately $0.7$1.2 million and $0.9 million,$722 thousand, respectively. For the nine months ended September 30, 20212022 and 20202021 interest and fees expense related to the Revolving Credit Facility was approximately $2.2$2.9 million and $3.0$2.2 million, respectively.
Maturity(2)
Maturity(2)
Maturity(2)$420.0$420.0 million par value CLO facility. On the date of the transaction the debt assumed was recognized at fair value, resulting in a $2.4$2.4 million discount which is amortized over the remaining term of the borrowings.CLO 2018-2 (the “Issuer”) and Portman Ridge Funding 2018-2 LLC (formerly known as Garrison Funding 2018-2 LLC, (togethertogether with the Issuer, the “Co-Issuers”) who issued $312.0$312.0 million of senior secured notes (collectively referred to as the “2018-2 Secured Notes” individually defined above in the table) and $108.0$108.0 million of subordinated notes (the “2018-2 Subordinated Notes” and, together with the 2018-2 Secured Notes, the “2018-2 Notes”) backed by a diversified portfolio of primarily senior secured loans. The Company owns all $108.0$18.3$18.3 million of the Class B-R Notes and serves as collateral manager for the Co-Issuers. The Company is entitled to receive interest from the Class B-R Notes, distributions from the 2018-2 Subordinated Notes and fees for serving as collateral manager in accordance with the CLO’s governing documents and to the extent funds are available for such purposes. However, as a result of retaining all of the 2018-2 Subordinated Notes, the Company consolidates the accounts of the Co-Issuers into its financial statements and all transactions between the Company and the Co-Issuers are eliminated on consolidation. As a result of this consolidation, the 2018-2 Secured Notes issued by the CLO is treated as the Company’s indebtedness, except any 2018-2 Secured Notes owned by the Company, which are eliminated in consolidation. The 2018-2 Notes are scheduled to mature on November 20, 2029, however the Co-Issuers may redeem the 2018-2 Notes on any business day after November 20, 2020. The indenture governing the 2018-2 Notes provides that, to the extent cash is available from cash collections, the holders of the 2018-2 Notes are to receive quarterly interest payments on the 20th day or, if not a business day, the next succeeding business day of February, May, August and November of each year until the stated maturity or earlier redemption. On July 18, 2019, $25.0$25.0 million outstanding of the aggregate $50.0$50.0 million Class A-1R-R Notes available under the CLO converted to Class A-1T-R Notes. The remaining $25.0$25.0 million of Class A-1R-R Notes, to the extent drawn, will convert to term notes on or before November 20, 2022.$88$88 million of the 2018-2 Secured Notes. In connection therewith, the Company recognized a realized loss on extinguishment of debt of approximately $0.9$0.9 million.20212022 and are categorized as Level III under the ASC 820 Fair Value Hierarchy.2021.2022. The first test compares the amount of interest received on the collateral loans held by 2018-2 CLO to the amount of interest payable on the 2018-2 Secured Notes in respect of the amounts drawn and certain expenses. To meet this first test, at any time, the aggregate amount of interest received on the collateral loans must equal, after the payment of certain fees and expenses, at least 135.0%135.0% of the aggregate amount of interest payable on the Class A-1R-R Notes, the Class A-1T-R Notes and the Class A-2-R Notes (collectively, the “Class A-R Notes”) and 125.0%125.0% of the interest payable on the Class A-R Notes and Class B-R Notes, taken together.128.0%128.0% of the aggregate outstanding principal amount of the Class A-R Notes (“Class A Overcollateralization Test”), and (2) 118.2%118.2% of the aggregate principal amount of the Class A-R Notes and Class B-R Notes, taken together (the test in clause (2), the “Class B Overcollateralization Test”).125.0%125.0% or less of the aggregate outstanding principal amount on the Class A-1R-R and Class A-1T-R Notes (“EoD Overcollateralization Test”), taken together remained so for ten business days, an event of default would be deemed to have occurred.2021,2022, the trustee for the CLO has asserted that the Class A Overcollateralization Test, Class B Overcollateralization, and the EoD Overcollateralization Test were met.
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Preference per
Unit(3)
Value per Unit(4)(1)Total amount of each class of senior securities outstanding at the end of the period presented.(2)Asset coverage per unit is the ratio of the carrying value of PTMN’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Asset coverage per unit is expressed in terms of dollar amounts per $1,000 of indebtedness.(3)The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.(4)Not applicable, except with respect to the 7.375% Notes Due 2019 and the 6.125% Notes Due 2022, as other debt securities are not registered for public trading. For the years ended December 31, 2017, 2016, 2015, 2014, 2013 and for the period from October 17, 2012 (date of issuance) to December 31, 2012, the average market value per $1,000 of par value of the 7.375% Notes Due 2019 was $1,016.04, $1,000.00, $1,011.96, $1,037.72, $1,032.96 and $1,012.28, respectively. For the years-ended December 31, 2020, 2019 and 2018 and for the period from August 14, 2017 (date of issuance) to December 31, 2017, the average market value per $1,000 of par value of the 6.125% Notes Due 2022 was $953.20, $1,009.93, $1,009.20 and $1,006.00, respectively. Average market value is computed by taking the daily average of the closing prices for the period.(5)As of December 31, 2019, the Total Amount Outstanding Exclusive of Treasury Securities consisted of 6.125% Notes Due 2022 of $77,407 and Revolving Credit Facilities of $79,571.(6)As of December 31, 2020, the Total Amount Outstanding Exclusive of Treasury Securities consisted of 6.125% Notes Due 2022 of $76,726, Revolving Credit Facilities of $49,321 and 2018-2 Secured Notes of $251,863.(7)As of March 31, 2021, the Total Amount Outstanding Exclusive of Treasury Securities consisted of 6.125% Notes Due 2022 of $76,726, Revolving Credit Facilities of $69,071 and 2018-2 Secured Notes of $163,863.(8)As of June 30, 2021, the Total Amount Outstanding Exclusive of Treasury Securities consisted of HCAP Notes of $28.8 million, 4.875% Notes due 2026 of $108 million, Revolving Credit Facilities of $69.1 million and 2018-2 Secured Notes of $163.9 million.(9)As of September 30, 2021, the Total Amount Outstanding Exclusive of Treasury Securities consisted of 4.875% Notes due 2026 of $108 million, Revolving Credit Facilities of $69.1 million and 2018-2 Secured Notes of $163.9 million.2020)2021). Depending on the level of taxable income earned in a tax year, the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4%4% excise tax on such income, to the extent required.20%20% of the total distribution. Under this guidance, if too many stockholders elect to receive their distributions in 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). If the Company decides to make any distributions consistent with this guidance that are payable in part in its stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, shares of the Company’s stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain dividend) to the20212022 and 2020:2021:
average basic shares for the period1
average diluted shares for the period1
average basic and diluted shares for the period12021,2022, the Asset Manager Affiliates did not make any cash distributions to the Company.2021,2022, the Company had a net capital loss carryforward of $392.1$416.3 million to offset net capital gains. This net capital loss carryforward is not subject to expiration. A portion of the Company’s capital loss carryovers are subject to a significantan annual use limitation under the Code and related regulations.2021,2022, the taxable subsidiaries’ activity did not resultresulted in a material provision for income taxes.taxes of $1.1 million. As of September 30, 2021, $158 thousand of refundable AMT tax credits receivable was included as an asset on2022, the consolidated balance sheets. The taxable subsidiaries have, in aggregate, approximately $826 thousand ofno deferred tax liabilitiesassets (primarily due to net operating loss and capital loss carryovers) and noof $2.9 million of deferred tax liabilities. The Company has assessed the realizability of the deferred tax assets and recorded a full valuation allowance as of September 30, 2021. A portion of the taxable subsidiaries’ net operating loss and capital loss carryovers are subject to a significantan annual use limitation under the Code and related regulations.20212022 and December 31, 2020,2021, the Company had $48.7$54.4 million and $32.9$47.9 million outstanding unfunded commitments, respectively.BCP Great Lakes PartnershipII Joint Venture of $50$50 million, subject to certain limitations (including that the Company is not obligated to fund capital calls if such funding would cause the Company to be out of compliance with certain provisions of the 1940 Act). As of September 30, 2021 and December 31, 2020,2022 the Company had a $6.9$21.7 million and $20.0 million, respectively unfunded commitment to the BCP Great Lakes Partnership, subjectII Joint Venture. As of December 31, 2021, the Company had a $13.0 million unfunded commitment to the limitations noted above.Prior Great Lakes Joint Venture.In the fourth quarter of 2018, the Company undertook the commitments under a lease obligation for its former office space. Such obligation was previously with Katonah Debt Advisors. During 2018, the Company and the Asset Manager Affiliates shared the cost of such lease pursuant to an Overhead Allocation agreement.Effective January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)”. The right-of-use asset and lease liability related to the Company’s office lease were recognized at lease commencement by calculating the present value of lease payments over the lease term. The discount rate used in determining the lease liability was the Company’s estimated incremental borrowing rate of 6.03%. In calculating the initial operating lease liability, the effect of the discounting was approximately $626 thousand.During the second quarter of 2019, the Company recognized an impairment to the operating lease right-of-use asset of approximately $1.4 million to reduce the right-of-use asset to its estimated fair market value. The impairment charge was measured using a discounted cash flow analysis and recognized in the statement of operations during the second quarter of 2019 as a result of the Company’s estimated impact of entering into a sublease.2021,2022, the Company had the following outstanding commitments to fund investments in current portfolio companies:Par ValueSeptember 30, 2021 Senior Secured Loan — Delayed Draw Term Loan—$$6982,800,000 Senior SecuredDelayed Draw Term Loan — Revolver5,000,000 Senior SecuredRevolving Loan — Delayed Draw Term Loan1,000,000AMCP Pet Holdings, Inc.Analogic Corporation Senior Secured Loan — Revolving LoanRevolver525,000Analogic Corporation Senior Secured Loan — Revolver202,233 Senior Secured Loan — Revolving LoanRevolver875,000 Senior Secured Loan — Delayed Draw Term Loan6,000,000BCP Great Lakes Holdings LPBeta Plus Technologies, Inc. Joint VentureRevolver6,856,481Bristol HospiceBradshaw International Parent Corp. Senior Secured Loan — Revolver821,918 Senior Secured Loan — Revolver307,444Datalink, LLCCentric Brands Inc. Senior Secured Loan — Revolver (First Lien)525,000 Senior Secured Loan — Revolver42,857 Senior Secured Loan — Revolver1,799,476Location Services Holdings,Luminii LLC Senior Secured Loan — Revolving CreditRevolver1,458,333Luminii LLC Senior Secured Loan — Revolver171,737 Senior Secured Loan — Revolver2,500,000 Senior Secured Loan — Revolver585,000 Senior Secured Loan — Revolver301,567Ritedose Holdings I, Inc.Netwrix Corporation Senior SecuredDelayed Draw Term Loan — Revolver- First Lien537,175Surge Busy Bee Holdings LLCNetwrix Corporation Senior Secured Loan — Revolver450,000TA/Weg Holdings, LLCNetwrix Corporation Senior SecuredDelayed Draw Term Loan — Revolver- First Lien125,000TA/Weg Holdings,Premier Imaging, LLC Senior Secured Loan — Delayed Draw Term Loan7,814,857WegWEG Holdings, LLC Senior Secured Loan — Delayed Draw Term Loan8,000,000 Senior Secured Loan — Delayed Draw Term Loan1,883 $48,700,96120212022 and 2020:2021:
Stock(1)
Excess
of Par Value(1)
Distributable
(loss) earnings
Stockholders'
Equity
Stock
Excess
of Par Value
Distributable
(loss) earnings
Stockholders'
Equity
Stock(1)
Excess
of Par Value(1)
Distributable
(loss) earnings
Stockholders'
Equity
Stock(1)
Excess
of Par Value(1)
Distributable
(loss) earnings
Stockholders'
Equity5, 2020,11, 2021, the Board of Directors of the Company approved a $10$10 million stock repurchase program (the “Stock Repurchase Program”) for an approximately one-year period effective March 11, 2021 and terminating on March 31, 2022. Under this repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise subject to any agreement to which we are party including any restrictions in the indenture for our 4.875%4.875% Notes Due 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This Stock Repurchase Program may be suspended or discontinued at any time. On March 11, 2021,8, 2022, the Board of Directors of the Company authorized a renewed stock repurchase program of up to $10$10 million (the “Renewed Stock Repurchase Program”) for an approximately one-year period, effective March 11, 20218, 2022 and terminating on March 31, 2022.2023. The terms and conditions of the Renewed Stock Repurchase Program are substantially similar to the prior Stock Repurchase Program. The Renewed Stock Repurchase Program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share.During the three and nine months ended September 30, 2021 , the Company repurchased 59,659 and 75,377 shares, respectively under the Stock Repurchase Program at an aggregate cost of approximately $1.4 million and $1.8 million.As provided for in the Externalization Agreement, during the second quarter of 2021, the Advisor reinvested approximately $4.0 million cash, representing incentive fees received from the Company, and the Company issued 138,131 shares of stock to the Advisor in a private placement. The stock was issued at the Company’s most recently determined net asset value.20212022 and 2020,2021, the Company issued 8,8729,057 and 3,280,8,872 shares, respectively, of common stock under its dividend reinvestment plan. During the nine months ended September 30, 20212022 and 2020,2021, the Company issued 18,86838,835 and 7,37918,868 shares, respectively, of common stock under its dividend reinvestment plan. The total number of shares of the Company’s common stock outstanding as of September 30, 20212022 and December 31, 20202021 was 9,123,2759,608,913 and 7,516,423,9,699,695, respectively. The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the share amounts above have been adjusted to reflect the split.10. EQUITY COMPENSATION PLANSPrior to March 31, 2019, the Company had an equity incentive plan, established in 2006 and most recently amended, following approval by the Company’s Board and shareholders, on May 4, 2017 (the “Equity Incentive Plan”). The Company reserved 2,000,000 shares of common stock for issuance under the Equity Incentive Plan. In connection with the Closing, the Company terminated the Equity Incentive Plan and will no longer make grants pursuant to the plan. Prior to the Closing, restricted stock granted under the Equity Incentive Plan was granted at a price equal to the fair market value (market closing price) of the shares on the day such restricted stock is granted. Options granted under the Equity Incentive PlanThere were exercisable at a price equal to the fair market value (market closing price) of the shares on the day the option is granted.Stock OptionsThe 2008 Non-Employee Director Plan was originally adopted by the Board and was approved by a vote of the Company’s shareholders at the 2008 Annual Shareholder Meeting (the “2008 Plan”). Effective June 10, 2011, the 2008 Plan was amended and restated in accordance with a resolution of the Board and approved by a vote of the Company’s shareholders at the 2011 AnnualShareholder Meeting (the “2011 Plan”). Effective May 4, 2017, the 2011 Plan was amended and restated in accordance with a resolution of the Board and approved by the Company’s shareholders at the 2017 Annual Shareholder Meeting (the “Non-Employee Director Plan”). In connection with the Closing, the Company terminated the 2008 Plan and will no longer make grants pursuant to the plan.Immediately prior to the Closing, by virtue of the Externalization and subject to the execution of an option cancellation agreement, each option to purchase shares of the Company’s common stock granted under the 2008 Plan that was outstanding immediately prior to the Externalization was cancelled in exchange for a payment in cash to the holder thereof.Information with respect to options granted, exercised and forfeited under the Equity Incentive Plan for the period January 1, 2019 through March 31, 2019 is as follows:
Average
Exercise Price
per Share
Average
Contractual
Remaining
Term (years)
Intrinsic
Value11 Represents the difference between the market value of shares of the Company on March 31, 2019 and the exercise price of the options.The Company uses a Binary Option Pricing Model (American, call option) to establish the expected value of all stock option grants. For share repurchases during the three months ended March 31, 2019, the Company did not recognize any non-cash compensation expense related to stock options. At September 30, 2021, the Company had no remaining compensation costs related to unvested stock based awards.Restricted StockAwards of restricted stock granted2022 under the Non-Employee Director Plan vest as follows: 50% of the shares vest on the grant date and the remaining 50% of the shares vest on the earlier of:(i) the first anniversary of such grant, or(ii) the date immediately preceding the next annual meeting of shareholders.On May 3, 2018, 6,000 shares of restricted stock were awarded to the Company’s Board.Immediately prior to the Closing all restrictions with respect to 3,000 shares of restricted stock outstanding and not previously forfeited under the Non-Employee Director Plan lapsed, and the holders of such restricted stock became entitled to receive a pro rata share of the payment due to stockholders of the Company pursuant to the Externalization Agreement.On June 16, 2015, the Company received exemptive relief to repurchase shares of its common stock from its employees in connection with certain equity compensation plan arrangements.Renewed Stock Repurchase Program. During the yearnine months ended December 31, 2018,September 30, 2022, the Company repurchased 26,681129,617 shares of common stockunder the Renewed Stock Repurchase program at an aggregate cost of approximately $86,000, in connection with the vesting of employee’s restricted stock, which is reflected as a reduction in Stockholders’ Equity at cost. These shares are not available to be reissued under the Company’s Equity Incentive Plan.Immediately prior to the Closing, 110,382 shares of restricted stock outstanding and not previously forfeited under the Equity Incentive Plan and the 2008 Plan (as defined below) became fully vested, all restrictions with respect to such restricted stock lapsed, and the holders of such restricted stock became entitled to receive a pro rata share of the payment due to stockholders of the Company pursuant to the Externalization Agreement.11. OTHER EMPLOYEE COMPENSATIONThe Company adopted a 401(k) plan (“401K Plan”) effective January 1, 2007. The 401K Plan was open to all full-time employees. The 401K Plan permits an employee to defer a portion of their total annual compensation up to the Internal Revenue Service annual maximum based on age and eligibility. The Company made contributions to the 401K Plan of up to 2% of the Internal Revenue Service’s annual maximum eligible compensation, which fully vests at the time of contribution. No expense was recognized during$3.0 million. During the three and nine months ended September 30, 2020 related to the 401K Plan. This Plan was terminated effective March 31, 2019.The Company also adopted a deferred compensation plan (“Profit-Sharing Plan”) effective January 1, 2007. Employees are eligible for the Profit-Sharing Plan provided that they are employed and working with2021, the Company to participate inrepurchased 59,659 and 75,377 shares, respectively under the Stock
Repurchase Program at least 100 days during the yearan aggregate cost of approximately $1.4 million and remain employed as of the last day of the year. Employees do not make contributions to the Profit-Sharing Plan. On behalf of the employee, the Company may contribute to the Profit-Sharing Plan 1) up to 8.0% of all compensation up to the Internal Revenue Service annual maximum and 2) up to 5.7% excess contributions on any incremental amounts above the social security wage base limitation and up to the Internal Revenue Service annual maximum. Employees vest 100% in the Profit-Sharing Plan after five years of service This Plan was terminated effective March 31, 2019, and no expense was recognized since the plan was terminated.$1.8 million.12.10. ACQUISITIONS OF OHA INVESTMENT CORPORATION, GARRISON CAPITAL INC. AND HARVEST CAPITAL CREDIT CORPORATIONOHAI acquisitionOn December 18, 2019, we completed our acquisition of OHA Investment Corporation (“OHAI”). In accordance with the terms of the merger agreement, each share of common stock, par value $0.001 per share, of OHAI (the “OHAI Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $0.42, and (ii) 0.3688 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of OHAI Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.15. As a result of the Merger, the Company issued an aggregate of 7,439,559 shares of its common stock to former OHAI stockholders (approximately 16.6% of the Company’s outstanding shares at December 31, 2019).Pursuant to the merger agreement, if at any time within one year after the closing date of the transaction our common stock traded at a price below 75% of its net asset value, we were obligated to initiate a share buyback program of up to $10 million to support the trading price of the combined entity for up to one year from the date such program is announced.The merger was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC Topic 805-50. The fair value of the consideration paid, and transaction costs incurred to complete the merger by the Company, including $3.0 million of cash payment (deemed capital contribution) paid at closing directly to shareholders of OHAI from the Adviser, was allocated to the OHAI investments acquired, based on their relative fair values as of the date of acquisition. The fair value of the purchase consideration paid by the Company below the fair value of net assets acquired is considered the purchase discount. Immediately following the acquisition of OHAI, the Company recorded OHAI’s net assets at their respective fair values and, as a result, the purchase discount was allocated to the cost basis of the OHAI investments acquired and was immediately recognized as unrealized gain on the Company's Consolidated Statement of Operations. The purchase discount was allocated to the acquired investments on a relative fair value basis and, for performing debt investments, will amortize over the life of the investments through interest income with a corresponding reversal of the unrealized appreciation on the OHAI investments acquired through their maturity. Upon the sale of any of the OHAI acquired investments, the Company will recognize a realized gain or a reduction in realized losses with a corresponding reversal of the unrealized losses.(1)Based on the market price at closing of $2.09 as of December 18, 2019 and the 7,439,559 shares of common stock issued by the Company in conjunction with the merger.(2)Approximately $8.5 million cash consideration paid by the Company plus $3.0 million cash payment paid at closing directly to shareholders of OHAI from the Adviser.$1.19$1.19 and (ii) approximately 1.917 shares of common stock, par value $0.01$0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of GARS Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.31.$0.31. Shares of common stock issued and market price have not been adjusted to reflect the Reverse Stock Split.$5.0$5.0 million of cash payment (deemed capital contribution) paid at closing directly to shareholders of GARS from the Adviser, was allocated to the GARS investments acquired, based on their relative fair values as of the date of acquisition. The fair value of the purchase consideration paid by the Company below the fair value of net assets acquired is considered the purchase discount. Immediately following the acquisition of GARS, the Company recorded GARS net assets at their respective fair values and, as a result, the purchase discount was allocated to the cost basis of the GARS investments acquired and was immediately recognized as unrealized gain on the Company's Consolidated Statement of Operations. The purchase discount was allocated to the acquired investments on a relative fair value basis and, for performing debt investments, will amortize over the life of the investments through interest income with a corresponding reversal of the unrealized appreciation on the GARS investments acquired through their maturity. Upon the sale of any of the GARS acquired investments, the Company will recognize a realized gain or a reduction in realized losses with a corresponding reversal of the unrealized losses.$1.26$1.26 as of October 28, 2020 and the 30,765,640 shares of common stock issued by the Company in conjunction with the merger.On December 23, 2020, the Company entered into an Agreement and Plan of Merger (the “HCAP Merger Agreement”) with Harvest Capital Credit Corporation, a publicly traded BDC (“HCAP”), the Adviser and a wholly-owned merger subsidiary (the “Acquisition Sub”) of the Company (such transaction, the “HCAP Acquisition”).8,9, 2021 the Company completed the HCAP Acquisition, pursuant to the terms and conditions of the HCAP Merger Agreement. To effect the acquisition, the Acquisition Sub merged with and into HCAP, with HCAP surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, HCAP consummated a second merger, whereby HCAP merged with and into the Company, with the Company surviving the merger. As a result of, and as of the effective time of, the second merger, HCAP’s separate corporate existence ceased.$18,537,512.65$18,537,512.65 in cash payable by Company, (ii) 15,252,453 validly issued, fully paid and non-assessable shares of the Company’s common stock, par value $0.01$0.01 per share, and (iii) an additional cash payment from the Adviser of $2.15$2.15 million in the aggregate. Shares of common stock issued and market price have not been adjusted to reflect the Reverse Stock Split.PTMN,the Company, HCAP stockholdersas of immediately prior to the effective time of the first merger (other than Cancelled Shares) were entitled, with respect to all or any portion of the shares of HCAP common stock they held as of the effective time of the first merger, to elect to receive the merger consideration in the form of cash (an “Election”) or in the form of PTMNthe Company's common stock, subject to certain conditions and limitations in the merger agreement. Any HCAP stockholder who did not validly make an Election was deemed to have elected to receive shares of the Company’s common stock with respect to the merger consideration as payment for their shares of HCAP common stock. Each share of HCAP common stock (other than Cancelled Shares) with respect to which an Election was made was treated as an “Electing Share” and each share of HCAP Common Stock (other than Cancelled Shares) with respect to which an Election was not made or that was transferred after the election deadline on June 2, 2021 was treated as a “Non-Electing Share.”$7.43$7.43 in cash and 0.74 shares of PTMNthe Company's common stock, while each Non-Electing Share received, in aggregate, approximately 3.86 shares of PTMNthe Company's common stock.$2.15$2.15 million of cash payment (deemed capital contribution) paid at closing directly to shareholders of HCAP from the Adviser, was allocated to the HCAP investments acquired, based on their relative fair values as of the date of acquisition. The fair value of the purchase consideration paid by the Company below the fair value of net assets acquired is considered the purchase discount. Immediately following the acquisition of HCAP, the Company recorded HCAP net assets at their respective fair values and, as a result, the purchase discount was allocated to the cost basis of the HCAP investments acquired and was immediately recognized as unrealized gain on the Company's Consolidated Statement of Operations. The purchase discount was allocated to the acquired investments on a relative fair value basis and, for performing debt investments, will amortize over the life of the investments through interest income with a corresponding reversal of the unrealized appreciation on the HCAP investments acquired through their maturity. Upon the sale of any of the HCAP acquired investments, the Company will recognize a realized gain or a reduction in realized losses with a corresponding reversal of the unrealized losses.$2.43$2.43 as of June 9, 2021 and the 15,252,453 shares of common stock issued by the Company in conjunction with the merger.$18.5$18.5 million cash consideration paid by the Company plus $2.15$2.15 million cash payment paid at closing directly to shareholders of HCAP from the Adviser.$28.75$28.75 million in aggregate principal amount of the HCAP Notes.$28.75$28.75 million of the HCAP Notes.13.11. SUBSEQUENT EVENTS3, 2021,8, 2022, our Board declared a cash distribution of $0.62$0.67 per share of common stock. The distribution is payable on November 30, 2021December 13, 2022 to stockholders of record at the close of business as of November 15, 2021.24, 2022.On October 22, 2021, the Company entered into a purchase and sale agreement with two wholly-owned subsidiaries of JMP Group LLC (collectively, the “JMP Sellers”), pursuant to which the Company will purchase $18.1 million of portfolio assets from the JMP Sellers in exchange for $1.4 million in cash and 556,852 shares of the Company’s common stock (which shares were sold at a price equal to their net asset value). Certain of the Company’s affiliated funds and a third party will also purchase interests in the same portfolio assets from the JMP Sellers for cash at the same price and on the same terms as the Company in connection with the transaction. The closing of the transaction occurred in the fourth quarter of 2021.20212022 for items that should potentially be recognized or disclosed in these financial statements. Other than as described above, management has determined that there are no other material subsequent events that would require adjustment to, or disclosure in, these unaudited consolidated financial statements. condensed and consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to those described in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 20202021 and Part II, Item 1A of this Form 10-Q of this Quarterly Report. Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under the “Risk Factors” section included in our SEC filings and “Note About Forward-Looking Statements” appearing elsewhere in this Form 10-Q.joint ventures and debt and subordinated securities issued by collateralized loan obligation funds (“CLO Fund Securities”). In addition, from time to time we may invest in the equity securities of privately held middle market companies and may also receive warrants or options to purchase common stock in connection with our debt investments.The first lien term loans may include traditional first lien senior secured loans or unitranche loans. Unitranche loans combine characteristics of traditional first lien senior secured loans as well as second lien and/or mezzanine debt (“Junior Debt”). Unitranche loans will expose us to the risks associated with first lien loans and Junior Debt. While there is no specific collateral associated with senior unsecured debt, such positions are senior in payment priority over subordinated debt investments. The investments in our Debt Securities Portfolio are all or predominantly below investment grade, and have speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal.Our investments in CLO Fund Securities are primarily managed by our formerly wholly-owned asset management subsidiaries Trimaran Advisors and Trimaran Advisors Management, L.L.C. From time-to-time we have also made investments in CLO Fund Securities managed by other asset managers. Our collateralized loan obligation funds (“CLO Funds”) typically invest in broadly syndicated loans, high-yield bonds and other credit instruments. Depending on the duration of the novel coronavirus (also known as “COVID-19”) pandemic and the extent of its impact on our portfolio companies’ operations and our net investment income, any future distributions to our stockholders may be for amounts less than our historical distributions, may be made less frequently than historical practices, and may be made in part cash and part stock, 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.During the fourth quarter An example of 2020, LibreMax sold its minority stakean opportunity we are currently in the Adviser toinitial stages of evaluating is a wholly-owned subsidiarypotential merger with one or more of Mount Logan. An affiliate of BC Partners serves as administrator to Mount Logan, and certain officers and directors of the Company serve in similar capacities for Mount Logan. In addition, Mount Logan owns a minority equity stakeour affiliated 1940 Act funds, which may result in the Advisor, and Mount Logan owns a minority equity stakeuse of an exchange ratio other than NAV-for-NAV (including but not limited to relative market price) in the Company.connection therewith.OHAIGARS TransactionDecember 18, 2019,October 28, 2020, we completed our acquisition of OHA Investment Corporation (“OHAI”). In accordance with the terms of the merger agreement, each share of common stock, par value $0.001 per share, of OHAI (the “OHAI Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $0.42, and (ii) 0.3688 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of OHAI Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.15.GARS TransactionOn June 24, 2020, we entered into an Agreement and Plan of Merger (the “GARS Merger Agreement”) with Garrison Capital Inc., a publicly traded BDC (“GARS”), the Adviser and a wholly-owned merger subsidiary of the Company (suchsuch transaction, the “GARS Acquisition”), and on October 28, 2020 we completed the GARS Acquisition.. To effect the acquisition, our wholly owned merger subsidiary merged with and into GARS, with GARS surviving the merger as our wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, GARS consummated a second merger, whereby GARS merged with and into us, with the Company surviving the merger.Agreement,Agreement”), each share of common stock, par value $0.001 per share, of GARS (the “GARS Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $1.19 and (ii) approximately 1.917 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of GARS Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.31. In connection with the closing of the GARS Acquisition, the Board approved an increase in the size of the Board from seven members to nine members, and appointed each of Matthew Westwood and Joseph Morea to serve on the Board.December 23, 2020,June 9, 2021 we entered into an Agreement and Plancompleted our acquisition of Merger (the “HCAP Merger Agreement”) with Harvest Capital Credit Corporation, a publicly traded BDC (“HCAP”), the Adviser and a wholly-owned merger subsidiary (the “Acquisition Sub”) of the Company (suchsuch transaction, the “HCAP Acquisition”).On June 9, 2021 the Company completed the HCAP Acquisition, pursuant to the terms and conditions of the HCAP Merger Agreement. To effect the acquisition, the our wholly owned merger subsidiary (“Acquisition SubSub”) merged with and into HCAP, with HCAP surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, HCAP consummated a second merger, whereby HCAP merged with and into the Company, with the Company surviving the merger. As a result of, and as of the effective time of, the second merger, HCAP’s separate corporate existence ceased.Agreement,Agreement”), HCAP stockholdersas of immediately prior to the effective time of the first merger (other than shares held by a subsidiary of HCAP or held, directly or indirectly, by the Company or Acquisition Sub, and all treasury shares (collectively, “Cancelled Shares”)) received a combination of (i) $18.54 million in cash paid by the Company, (ii) 15,252,453 validly issued, fully paid and non-assessable shares of the Company’s common stock, par value $0.01 per share, and (iii) an additional cash payment from the Adviser of $2.15 million in the aggregate.PTMN,the Company, HCAP stockholders as of immediately prior to the effective time of the first merger (other than Cancelled Shares) were entitled, with respect to all or any portion of the shares of HCAP common stock they held as of the effective time of the first merger, to elect to receive the merger consideration in the form of cash (an “Election”) or in the form of PTMNour common stock, subject to certain conditions and limitations in the merger agreement. Any HCAP stockholder who did not validly make an Election was deemed to have elected to receive shares of the Company’s common stock with respect to the merger consideration as payment for their shares of HCAP common stock. Each share of HCAP common stock (other than Cancelled Shares) with respect to which an Election was made was treated as an “Electing Share” and each share of HCAP Common Stock (other than Cancelled Shares) with respect to which an Election was not made or that was transferred after the election deadline on June 2, 2021 was treated as a “Non-Electing Share.”PTMNthe Company's common stock, while each Non-Electing Share received, in aggregate, approximately 3.86 shares of PTMNthe Company's common stock.
Reverse Stock Split
the Reverse Stock Split received cash payments in lieu of such fractional shares (without interest and subject to backup withholding and applicable withholding taxes).
On August 23, 2021, the Company filed a Certificate of Amendment to decrease the number of authorized shares of common stock by one half of the reverse stock split ratio (the “Decrease Shares Certificate of Amendment”) with the Secretary of State of the State of Delaware. The Decrease Shares Certificate of Amendment became effective as of 12:05 a.m. (Eastern Time) on August 26, 2021. Following the effectiveness of the Decrease Shares Certificate of Amendment, the number of authorized shares of common stock under the Company’s Certificate of Incorporation was reduced from 100 million shares to 20 million shares.
The Reverse Stock Split Certificate of Amendment and the Decrease Shares Certificate of Amendment were approved by the Company’s stockholders at its annual meeting held on June 7, 2021 and were approved by the Board on August 4, 2021.
PORTFOLIO AND INVESTMENT ACTIVITY
Our primary investments are lending to and investing in middle-market businesses through investments in senior secured loans, junior secured loans, subordinated/mezzanine debt investments, and other equity investments, which may include warrants, investments in joint ventures, and investments in CLO Fund Securities.
49
Total portfolio investment activity (excluding activity in short-term investments) for the nine months ended September 30, 20212022 (unaudited) and for the year ended December 31, 20202021 was as follows:
|
| Debt |
|
| CLO Fund |
|
| Equity |
|
| Asset |
|
| Joint |
|
| Derivatives |
|
| Total |
| |||||||
Fair Value at December 31, 2019 |
|
| 186,802,908 |
|
|
| 31,968,202 |
|
|
| 9,864,419 |
|
|
| — |
|
|
| 45,087,967 |
|
|
| (33,437 | ) |
|
| 273,690,061 |
|
Purchases / originations / draws |
|
| 380,765,492 |
|
|
| — |
|
|
| 4,937,711 |
|
|
| — |
|
|
| 14,098,055 |
|
|
| — |
|
|
| 399,801,258 |
|
Pay-downs / pay-offs / sales |
|
| (198,364,694 | ) |
|
| (4,432,200 | ) |
|
| (1,515,936 | ) |
|
| — |
|
|
| (7,760,136 | ) |
|
| (976,968 | ) |
|
| (213,049,934 | ) |
Net accretion of interest |
|
| 8,228,390 |
|
|
| 3,541,296 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,769,686 |
|
Net realized gains (losses) |
|
| 7,616,860 |
|
|
| — |
|
|
| (989,131 | ) |
|
| — |
|
|
| — |
|
|
| 976,968 |
|
|
| 7,604,697 |
|
Increase (decrease) in fair value |
|
| 19,811,899 |
|
|
| (11,494,743 | ) |
|
| 1,647,812 |
|
|
| — |
|
|
| (2,076,723 | ) |
|
| (1,075,182 | ) |
|
| 6,813,063 |
|
Fair Value at December 31, 2020 |
|
| 404,860,855 |
|
|
| 19,582,555 |
|
|
| 13,944,875 |
|
|
| — |
|
|
| 49,349,163 |
|
|
| (1,108,619 | ) |
|
| 486,628,831 |
|
Purchases / originations / draws |
|
| 236,503,017 |
|
|
| — |
|
|
| 8,755,376 |
|
|
| — |
|
|
| 26,400,886 |
|
|
| — |
|
|
| 271,659,279 |
|
Pay-downs / pay-offs / sales |
|
| (197,531,424 | ) |
|
| (6,440,089 | ) |
|
| (4,480,709 | ) |
|
| — |
|
|
| (10,774,967 | ) |
|
| (880,000 | ) |
|
| (220,107,189 | ) |
Net accretion of interest |
|
| 25,673,012 |
|
|
| — |
|
|
| (208 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 25,672,804 |
|
Net realized gains (losses) |
|
| (7,132,262 | ) |
|
| (5,323,484 | ) |
|
| 173,666 |
|
|
| — |
|
|
| — |
|
|
| 880,000 |
|
|
| (11,402,080 | ) |
Increase (decrease) in fair value |
|
| (7,293,322 | ) |
|
| 9,354,652 |
|
|
| 3,905,759 |
|
|
| — |
|
|
| 2,654,032 |
|
|
| (873,472 | ) |
|
| 7,747,649 |
|
Fair Value at September 30, 2021 |
| $ | 455,079,876 |
|
| $ | 17,173,634 |
|
| $ | 22,298,759 |
|
| $ | — |
|
| $ | 67,629,114 |
|
| $ | (1,982,091 | ) |
| $ | 560,199,292 |
|
($ in thousands) |
| Debt |
|
| Equity |
|
| CLO Fund |
|
| Joint |
|
| Derivatives(1) |
|
| Total |
| ||||||
Fair Value at December 31, 2020 |
| $ | 404,861 |
|
| $ | 13,945 |
|
| $ | 19,583 |
|
| $ | 49,349 |
|
| $ | (1,109 | ) |
| $ | 486,629 |
|
Purchases / originations / draws |
|
| 309,363 |
|
|
| 9,002 |
|
|
| 18,077 |
|
|
| 34,358 |
|
|
| - |
|
|
| 370,800 |
|
Pay-downs / pay-offs / sales |
|
| (287,238 | ) |
|
| (4,740 | ) |
|
| (11,675 | ) |
|
| (24,925 | ) |
|
| (880 | ) |
|
| (329,458 | ) |
Net accretion of interest |
|
| 27,549 |
|
|
| - |
|
|
| 4,754 |
|
|
| - |
|
|
| - |
|
|
| 32,303 |
|
Net realized gains (losses) |
|
| 2,361 |
|
|
| (2,176 | ) |
|
| (5,323 | ) |
|
| - |
|
|
| 880 |
|
|
| (4,258 | ) |
Increase (decrease) in fair value |
|
| (21,603 | ) |
|
| 6,555 |
|
|
| 6,216 |
|
|
| 1,692 |
|
|
| (1,303 | ) |
|
| (8,443 | ) |
Fair Value at December 31, 2021 |
| $ | 435,293 |
|
| $ | 22,586 |
|
| $ | 31,632 |
|
| $ | 60,474 |
|
| $ | (2,412 | ) |
| $ | 547,573 |
|
Purchases / originations / draws |
|
| 179,217 |
|
|
| 7,763 |
|
|
| - |
|
|
| 1,700 |
|
|
| - |
|
|
| 188,680 |
|
Pay-downs / pay-offs / sales |
|
| (125,901 | ) |
|
| (8,036 | ) |
|
| (5,571 | ) |
|
| (10,400 | ) |
|
| 2,075 |
|
|
| (147,833 | ) |
Net accretion of interest |
|
| 8,595 |
|
|
| - |
|
|
| 3,476 |
|
|
| - |
|
|
| - |
|
|
| 12,071 |
|
Net realized gains (losses) |
|
| (14,719 | ) |
|
| 1,271 |
|
|
| (12,054 | ) |
|
| (526 | ) |
|
| (2,095 | ) |
|
| (28,123 | ) |
Increase (decrease) in fair value |
|
| (5,088 | ) |
|
| 903 |
|
|
| 7,140 |
|
|
| (6,107 | ) |
|
| 2,440 |
|
|
| (712 | ) |
Fair Value at September 30, 2022 |
| $ | 477,397 |
|
| $ | 24,487 |
|
| $ | 24,623 |
|
| $ | 45,141 |
|
| $ | 8 |
|
| $ | 571,656 |
|
The level of investment activity for investments funded and principal repayments for our investments can vary substantially from period to period depending on the number and size of investments that we invest in or divest of, and many other factors, including the amount and competition for the debt and equity securities available to middle market companies, the level of merger and acquisition activity for such companies and the general economic environment.
The following table shows the Company’s portfolio by security type at September 30, 20212022 and December 31, 2020:2021:
|
| September 30, 2021 |
|
|
|
| ||||||||||||||||||
|
| (Unaudited) |
|
| December 31, 2020 |
| ||||||||||||||||||
Security Type |
| Cost/Amortized |
|
| Fair Value |
|
| %¹ |
|
| Cost/Amortized |
|
| Fair Value |
|
| %¹ |
| ||||||
Senior Secured Loan |
|
| 367,212,162 |
|
|
| 380,960,592 |
|
|
| 68 |
|
|
| 304,539,184 |
|
|
| 328,845,612 |
|
|
| 68 |
|
Junior Secured Loan |
|
| 82,973,411 |
|
|
| 74,076,080 |
|
|
| 13 |
|
|
| 87,977,057 |
|
|
| 75,807,477 |
|
|
| 16 |
|
Senior Unsecured Bond |
|
| 416,171 |
|
|
| 43,204 |
|
|
| 0 |
|
|
| 416,170 |
|
|
| 207,766 |
|
|
| 0 |
|
CLO Fund Securities |
|
| 33,964,238 |
|
|
| 17,173,634 |
|
|
| 3 |
|
|
| 45,727,813 |
|
|
| 19,582,555 |
|
|
| 4 |
|
Equity Securities |
|
| 29,041,687 |
|
|
| 22,298,759 |
|
|
| 4 |
|
|
| 24,593,639 |
|
|
| 13,944,876 |
|
|
| 3 |
|
Asset Manager Affiliates2 |
|
| 17,791,230 |
|
|
| — |
|
|
| — |
|
|
| 17,791,230 |
|
|
| — |
|
|
| — |
|
Joint Ventures |
|
| 70,558,377 |
|
|
| 67,629,114 |
|
|
| 12 |
|
|
| 54,932,458 |
|
|
| 49,349,163 |
|
|
| 10 |
|
Derivatives |
|
| 30,609 |
|
|
| (1,982,091 | ) |
|
| — |
|
|
| 30,609 |
|
|
| (1,108,618 | ) |
|
| — |
|
Total |
| $ | 601,987,885 |
|
| $ | 560,199,292 |
|
|
| 100 | % |
| $ | 536,008,160 |
|
| $ | 486,628,831 |
|
|
| 100 | % |
($ in thousands) September 30, 2022 December 31, 2021 Security Type Cost/Amortized Fair Value %(¹) Cost/Amortized Fair Value %(¹) Senior Secured Loan $ 426,052 $ 415,819 73 $ 361,556 $ 364,701 66 Junior Secured Loan 65,672 61,535 11 82,996 70,549 13 Senior Unsecured Bond 416 43 0 416 43 0 Equity Securities 27,679 24,487 4 26,680 22,586 4 CLO Fund Securities 37,411 24,623 4 51,561 31,632 6 Asset Manager Affiliates(2) 17,791 - - 17,791 - - Joint Ventures 55,139 45,141 8 64,365 60,474 11 Derivatives 31 8 0 31 (2,412 ) - Total $ 630,191 $ 571,656 100 % $ 605,396 $ 547,573 100 %¹
(Unaudited)
Cost
Cost
²
50
The industry concentrations, based on the fair value of the Company’s investment portfolio as of September 30, 20212022 and December 31, 2020,2021, were as follows:
|
| September 30, 2021 |
|
|
| |||||||||||||||||||||||||||||||||||||||||||
|
| (Unaudited) |
|
| December 31, 2020 |
| ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) |
| September 30, 2022 |
|
| December 31, 2021 |
| ||||||||||||||||||||||||||||||||||||||||||
Industry Classification |
| Cost/Amortized |
|
| Fair Value |
|
| %¹ |
|
| Cost/Amortized |
|
| Fair Value |
|
| %¹ |
|
| Cost/Amortized |
|
| Fair Value |
|
| %(¹) |
|
| Cost/Amortized |
|
| Fair Value |
|
| %(¹) |
| ||||||||||||
Aerospace and Defense |
| $ | 11,814,083 |
| $ | 11,738,812 |
| 2 |
| $ | 11,342,227 |
| $ | 11,218,193 |
| 2 |
|
| $ | 10,764 |
|
| $ | 10,522 |
|
|
| 2 |
|
| $ | 11,730 |
|
| $ | 11,692 |
|
|
| 2 |
| |||||||
Asset Management Company 2 |
| 17,791,230 |
| — |
| — |
|
|
| 17,791,230 |
| — |
| — |
| |||||||||||||||||||||||||||||||||
Asset Management Company(2) |
|
| 17,791 |
|
|
| - |
|
|
| - |
|
|
| 17,791 |
|
|
| - |
|
|
| - |
| ||||||||||||||||||||||||
Automotive |
| 10,890,444 |
| 11,481,530 |
| 2 |
|
|
| 10,840,171 |
| 11,651,714 |
| 2 |
|
|
| 12,007 |
|
|
| 11,803 |
|
|
| 2 |
|
|
| 11,331 |
|
|
| 11,487 |
|
|
| 2 |
| |||||||||
Banking, Finance, Insurance & Real Estate |
| 39,155,006 |
| 41,403,610 |
| 7 |
| 30,074,875 |
| 31,121,723 |
| 6 |
|
|
| 72,192 |
|
|
| 74,457 |
|
|
| 13 |
|
|
| 41,487 |
|
|
| 42,858 |
|
|
| 8 |
| |||||||||||
Beverage, Food and Tobacco |
| 5,317,124 |
| 5,437,500 |
| 1 |
| 9,196,359 |
| 9,100,107 |
| 2 |
|
|
| 12,381 |
|
|
| 12,237 |
|
|
| 2 |
|
|
| 5,511 |
|
|
| 5,625 |
|
|
| 1 |
| |||||||||||
Capital Equipment |
| 19,596,337 |
| 18,296,975 |
| 3 |
| 10,276,249 |
| 8,204,690 |
| 2 |
|
|
| 10,679 |
|
|
| 6,915 |
|
|
| 1 |
|
|
| 14,387 |
|
|
| 10,620 |
|
|
| 2 |
| |||||||||||
Chemicals, Plastics & Rubber |
| 6,347,714 |
| 6,711,605 |
| 1 |
| 6,608,887 |
| 7,230,131 |
| 1 |
|
|
| 10,496 |
|
|
| 10,379 |
|
|
| 2 |
|
|
| 12,692 |
|
|
| 12,969 |
|
|
| 2 |
| |||||||||||
CLO Fund Securities |
| 33,964,238 |
| 17,173,634 |
| 3 |
| 45,727,813 |
| 19,582,555 |
| 4 |
|
|
| 37,411 |
|
|
| 24,623 |
|
|
| 4 |
|
|
| 51,561 |
|
|
| 31,632 |
|
|
| 6 |
| |||||||||||
Construction & Building |
| 8,860,985 |
| 7,481,916 |
| 1 |
| 9,802,754 |
| 10,946,643 |
| 2 |
|
|
| 10,481 |
|
|
| 10,530 |
|
|
| 2 |
|
|
| 8,966 |
|
|
| 9,501 |
|
|
| 2 |
| |||||||||||
Consumer goods: Durable |
| 19,681,262 |
| 21,500,071 |
| 4 |
| 32,435,115 |
| 34,858,844 |
| 7 |
|
|
| 16,804 |
|
|
| 13,852 |
|
|
| 2 |
|
|
| 25,151 |
|
|
| 24,831 |
|
|
| 5 |
| |||||||||||
Consumer goods: Non-durable |
| 5,663,236 |
| 6,284,237 |
| 1 |
| 1,837,151 |
| 2,102,176 |
| 0 |
|
|
| 2,187 |
|
|
| 2,197 |
|
|
| 0 |
|
|
| 4,162 |
|
|
| 4,197 |
|
|
| 1 |
| |||||||||||
Containers, Packaging and Glass |
| 2,786,954 |
| 2,591,064 |
| 0 |
| 2,806,740 |
| 2,502,994 |
| 1 |
|
|
| 2,761 |
|
|
| 2,661 |
|
|
| 1 |
|
|
| 2,780 |
|
|
| 2,570 |
|
|
| 1 |
| |||||||||||
Electronics |
| 17,964,277 |
| 19,901,030 |
| 4 |
| 28,389,620 |
| 31,564,533 |
| 6 |
|
|
| 10,809 |
|
|
| 10,917 |
|
|
| 2 |
|
|
| 10,623 |
|
|
| 11,089 |
|
|
| 2 |
| |||||||||||
Energy: Electricity |
|
| 671 |
|
|
| 671 |
|
|
| 0 |
|
|
| - |
|
|
| - |
|
|
| - |
| ||||||||||||||||||||||||
Energy: Oil & Gas |
| 9,370,825 |
| 3,633,657 |
| 1 |
| 13,501,691 |
| 6,878,115 |
| 1 |
|
|
| 6,718 |
|
|
| 1,388 |
|
|
| 0 |
|
|
| 7,921 |
|
|
| 2,355 |
|
|
| 0 |
| |||||||||||
Environmental Industries |
| 7,283,447 |
| 7,502,505 |
| 1 |
| 3,939,764 |
| 3,585,669 |
| 1 |
|
|
| 4,315 |
|
|
| 6,200 |
|
|
| 1 |
|
|
| 4,315 |
|
|
| 4,200 |
|
|
| 1 |
| |||||||||||
Finance |
| 10,936,537 |
| 10,936,000 |
| 2 |
| - |
| - |
| — |
|
|
| 7,759 |
|
|
| 7,757 |
|
|
| 1 |
|
|
| 10,916 |
|
|
| 10,912 |
|
|
| 2 |
| |||||||||||
Forest Products & Paper |
| 1,581,127 |
| 1,358,240 |
| 0 |
| 1,576,633 |
| 1,270,880 |
| 0 |
|
|
| 1,587 |
|
|
| 1,376 |
|
|
| 0 |
|
|
| 1,583 |
|
|
| 1,271 |
|
|
| 0 |
| |||||||||||
Healthcare, Education and Childcare |
| 9,797,292 |
| 9,765,443 |
| 2 |
| 14,059,921 |
| 13,791,048 |
| 3 |
|
|
| 9,740 |
|
|
| 9,613 |
|
|
| 2 |
|
|
| 9,783 |
|
|
| 9,752 |
|
|
| 2 |
| |||||||||||
Healthcare & Pharmaceuticals |
| 68,913,038 |
| 62,299,025 |
| 11 |
| 83,481,401 |
| 78,823,040 |
| 16 |
|
|
| 49,296 |
|
|
| 48,667 |
|
|
| 9 |
|
|
| 71,696 |
|
|
| 62,275 |
|
|
| 11 |
| |||||||||||
High Tech Industries |
| 60,348,479 |
| 61,537,690 |
| 11 |
| 32,949,892 |
| 35,052,389 |
| 7 |
|
|
| 79,358 |
|
|
| 73,154 |
|
|
| 13 |
|
|
| 58,803 |
|
|
| 58,715 |
|
|
| 11 |
| |||||||||||
Hotel, Gaming & Leisure |
| 9,804,159 |
| 9,800,000 |
| 2 |
| - |
| - |
| — |
|
|
| 10,128 |
|
|
| 8,823 |
|
|
| 2 |
|
|
| 4,906 |
|
|
| 4,898 |
|
|
| 1 |
| |||||||||||
Joint Ventures |
| 70,558,377 |
| 67,629,114 |
| 12 |
| 54,932,458 |
| 49,349,163 |
| 10 |
|
|
| 55,139 |
|
|
| 45,141 |
|
|
| 8 |
|
|
| 64,365 |
|
|
| 60,474 |
|
|
| 11 |
| |||||||||||
Machinery (Non-Agrclt/Constr/Electr) |
| 7,880,124 |
| 8,754,282 |
| 2 |
| 6,712,460 |
|
|
| 7,227,441 |
| 1 |
|
|
| 9,524 |
|
|
| 9,716 |
|
|
| 2 |
|
|
| 7,748 |
|
|
| 8,967 |
|
|
| 2 |
| |||||||||
Media: Advertising, Printing & Publishing |
| 3,027,661 |
| 3,510,461 |
| 1 |
| 2,830,592 |
|
|
| 3,170,254 |
| 1 |
|
|
| 150 |
|
|
| 281 |
|
|
| - |
|
|
| 150 |
|
|
| 246 |
|
|
| 0 |
| |||||||||
Media: Broadcasting & Subscription |
| 4,029,968 |
| 4,021,034 |
| 1 |
| 3,955,772 |
| 3,901,188 |
| 1 |
|
|
| 13,081 |
|
|
| 13,848 |
|
|
| 2 |
|
|
| 12,407 |
|
|
| 13,255 |
|
|
| 2 |
| |||||||||||
Media: Diversified & Production |
| 10,325,089 |
| 10,438,340 |
| 2 |
| 2,658,914 |
| 2,612,250 |
| 1 |
|
|
| 7,160 |
|
|
| 7,175 |
|
|
| 1 |
|
|
| 6,272 |
|
|
| 6,365 |
|
|
| 1 |
| |||||||||||
Metals & Mining |
| 13,129,929 |
| 13,682,518 |
| 2 |
| 1,219,188 |
| 1,326,500 |
| 0 |
|
|
| 15,763 |
|
|
| 15,052 |
|
|
| 3 |
|
|
| 15,342 |
|
|
| 13,647 |
|
|
| 3 |
| |||||||||||
Retail |
| 5,975,549 |
| 6,773,201 |
| 1 |
| 5,790,208 |
|
|
| 6,597,338 |
|
|
| 1 |
|
|
| 10,748 |
|
|
| 10,787 |
|
|
| 2 |
|
|
| 6,144 |
|
|
| 6,775 |
|
|
| 1 |
| |||||||
Services: Business |
| 78,816,384 |
| 80,129,332 |
| 14 |
| 58,027,464 |
| 60,119,401 |
| 12 |
|
|
| 72,599 |
|
|
| 73,124 |
|
|
| 13 |
|
|
| 76,071 |
|
|
| 77,798 |
|
|
| 14 |
| |||||||||||
Services: Consumer |
| 3,837,036 |
| 3,840,200 |
| 1 |
| 4,241,127 |
| 4,198,243 |
| 1 |
|
|
| 8,347 |
|
|
| 7,980 |
|
|
| 1 |
|
|
| 990 |
|
|
| 990 |
|
|
| 0 |
| |||||||||||
Telecommunications |
| 6,313,276 |
| 5,619,837 |
| 1 |
| 8,930,322 |
| 9,023,109 |
| 2 |
|
|
| 9,473 |
|
|
| 8,541 |
|
|
| 2 |
|
|
| 7,521 |
|
|
| 6,675 |
|
|
| 1 |
| |||||||||||
Textiles and Leather |
| 12,418,665 |
| 11,118,299 |
| 2 |
| 12,415,194 |
| 10,860,696 |
| 2 |
|
|
| 12,640 |
|
|
| 12,408 |
|
|
| 2 |
|
|
| 12,496 |
|
|
| 11,095 |
|
|
| 2 |
| |||||||||||
Transportation: Cargo |
| - |
| - |
| - |
| 7,655,970 |
| 8,757,804 |
| 2 |
|
|
| 11,566 |
|
|
| 11,484 |
|
|
| 2 |
|
|
| - |
|
|
| - |
|
|
| - |
| |||||||||||
Transportation: Consumer |
|
| 7,808,033 |
|
|
| 7,848,130 |
|
|
| 1 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 7,666 |
|
|
| 7,377 |
|
|
| 1 |
|
|
| 7,795 |
|
|
| 7,837 |
|
|
| 1 |
|
Total |
| $ | 601,987,885 |
|
| $ | 560,199,292 |
|
|
| 100 | % |
| $ | 536,008,160 |
|
| $ | 486,628,831 |
|
|
| 100 | % |
| $ | 630,191 |
|
| $ | 571,656 |
|
|
| 100 | % |
| $ | 605,396 |
|
| $ | 547,573 |
|
|
| 100 | % |
Debt Securities Portfolio At September 30, The investment portfolio (excluding our investments in the CLO Funds, Joint Ventures and short-term investments) at September 30, We may invest up to 30% of our investment portfolio in “non-qualifying” opportunistic investments such as high-yield bonds, debt and equity securities of CLO Funds, foreign investments, joint ventures, managed funds, partnerships and distressed debt or equity securities of large cap public companies. At September 30, Asset Manager Affiliates CLO Fund Securities We have made minority investments in the subordinated securities or preferred shares of CLO Funds managed by the Disposed Manager Affiliates and may selectively invest in securities issued by CLO Funds managed by other asset management companies. As of September 30, The CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Fund Securities in which we have an investment are generally diversified secured or unsecured corporate debt. 51 The structure of CLO Funds, which are highly levered, is extremely complicated. Since we primarily invest in securities representing the residual interests of CLO Funds, our investments are much riskier than the risk profile of the loans by which such CLO Funds are collateralized. Our investments in CLO Funds may be riskier and less transparent to us and our stockholders than direct investments in the underlying loans. 1220212022 and December 31, 2020,2021, the weighted average contractual interest rate on our loans and debt securitiesinterest earning Debt Securities Portfolio was approximately 8.2%10.0% and 7.8%8.1%, respectively. At September 30, 2021 and December 31, 2020, the weighted average contractual interest rate on our loans and debt securities, excluding non-accrual and partial non-accrual investments, and excluding CLO Fund Securities and Joint Ventures, was approximately 7.9% and 7.7%, respectively.20212022 was spread across 3032 different industries and 184117 different entities with an average par balance per entity of approximately $3.3$3.4 million. As of September 30, 2021, six2022, three of our investments were on non-accrual status. As of December 31, 2020, eight2021, seven of our investments were on non-accrual status.20212022 and December 31, 2020,2021, the total amount of non-qualifying assets to total assets was approximately 15.6%15.3% and 13.8%15.8% of total assets, respectively. The majority of non-qualifying assets were the Company’s investments in joint ventures,Joint Ventures, in the aggregate representing approximately 10.8%7.2% and 8.2%9.3%, of the total assets as of September 30, 20212022 and December 31, 2020,2021, respectively, and our total assets including our investments in CLO Funds, which are typically domiciled outside the U.S. and represented approximately 2.7%3.9% and 3.3%4.9% of total assets on such dates, respectively.Our portfolio may include “covenant-lite” loans which generally refer to loans that do not have a complete set of financial maintenance covenants. Generally, “covenant-lite” loans provide borrower companies more freedom to negatively impact lenders because their covenants are incurrence-based, which means they are only tested and can only be breached following an affirmative action of the borrower, rather than by a deterioration in the borrower’s financial condition. Accordingly, to the extent we invest in “covenant-lite” loans, we may have fewer rights against a borrower and may have a greater risk of loss on such investments as compared to investments in or exposure to loans with financial maintenance covenants.The DisposedAs of September 30, 2022, our remaining asset management affiliates (the “Asset Manager Affiliates”) have limited operations and are expected to be liquidated. As of September 30, 2022, the Asset Manager Affiliates manage CLO Funds that invest in broadly syndicated loans, high yield bonds and other credit instruments. The CLO funds managed by the Disposed Asset Manager Affiliates consist primarily of credit instruments issued by corporations. In connection with the LibreMax Transaction, on December 31, 2018, our wholly-owned subsidiary Commodore Holdings, LLC sold the Disposed Manager Affiliates, which represented substantially all of our investment in the Asset Manager Affiliates, to LibreMax for a cash purchase price of approximately $37.9 million. Accordingly, certain CLO fund investments were reclassified from CLO funds managed by affiliates to CLO funds managed by non-affiliates on December 31, 2018. Effective April 1, 2019, as a result of the Externalization and related transactions, CLO Fund investments managed by LibreMax were assigned to CLO Funds managed by affiliates. In the fourth quarter of 2020, Libremax disposed of its equity interest in the Adviser and as a result, CLO funds managed by Libremax or its affiliates were reclassified to CLO funds managed by non-affiliates. As of September 30, 2021, our Asset Manager Affiliates had approximately $300 million of par value of assets under management, for which management fees were waived and thus were deemed to have no value.In connection with the Externalization, during the first quarter of 2019, KCAP Management agreed to waive management fees it is otherwise entitled to receive for managing the Fund. In addition, the Joint Venture was restructured such that we are now entitled to receive a preferred distribution in an amount equal to the fees waived by KCAP Management. The impact of these transactions was a reduction in the fair value of the Asset Manager Affiliates (realized loss) and increase the fair value of our investment in the Joint Venture (unrealized gain) during the first quarter of 2019.Although the investment in the Asset Manager Affiliates is deemed to have no value at September 30, 2021 and December 31, 2020, certain of these subsidiaries continue to exist as a legal matter and until such entities are formally dissolved, the Company will continue to report the cost basis of its investment in the Asset Manager Affiliates in its financial statements. Upon the final disposition of these entities, the Company expects to write off any remaining cost basis, which will result in a reclassification in the statement of operations between realized and unrealized gains and losses.20212022 and December 31, 2020,2021, we had approximately $17.2$24.6 million and $19.6$31.6 million, respectively, invested in CLO Fund Securities, issued primarily by CLO Funds managed by the Disposed Manager Affiliates.Securities.The CLO Funds in which we invest have debt that ranks senior to our investment. Our CLO Fund investments are generally thinly traded or have only a limited trading market. CLO Funds are typically privately offered and sold, even in the secondary market. As a result, investments in CLO Funds may be characterized as illiquid securities. In addition to the general risks associated with investing in debt securities, CLO Funds carry additional risks, including, but not limited to: (i) the
possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the fact that the Company’s investments in CLO tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the CLO Fund or unexpected investment results. The Company’s net asset value may also decline over time if the Company’s principal recovery with respect to CLO subordinated note investments is less than the price that the Company paid for those investments. For a more detailed discussion of the risks related to our investments in CLO Funds, please see “Risk Factors — Risks Related to Our Investments — Our investments may be risky, and you could lose all or part of your investment.” in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020.
Our CLO Fund Securities as of September 30, 20212022 and December 31, 2020 are2021 were as follows:
|
|
|
|
|
|
| September 30, 2021 |
|
| December 31, 2020 2 |
| |||||||||||
CLO Fund Securities |
| Investment |
| %1 |
|
| Amortized |
|
| Fair Value |
|
| Amortized |
|
| Fair Value |
| |||||
Catamaran CLO 2013- 1 Ltd. |
| Subordinated Notes |
|
| 23.3 |
|
|
| 5,695,115 |
|
|
| 3,404,930 |
|
|
| 6,219,310 |
|
|
| 2,611,423 |
|
Catamaran CLO 2014-1 Ltd. |
| Subordinated Notes |
|
| 22.2 |
|
|
| 9,619,786 |
|
|
| 5,218,279 |
|
|
| 9,998,258 |
|
|
| 3,835,632 |
|
Dryden 30 Senior Loan Fund |
| Subordinated Notes |
|
| 6.8 |
|
|
| 1,099,276 |
|
|
| 1,365,000 |
|
|
| 1,272,501 |
|
|
| 1,322,100 |
|
Catamaran CLO 2014-2 Ltd. |
| Subordinated Notes |
|
| 24.9 |
|
|
| 6,065,598 |
|
|
| — |
|
|
| 6,065,598 |
|
|
| — |
|
Catamaran CLO 2015-1 Ltd. |
| Subordinated Notes |
|
| 9.9 |
|
|
| 2,660,968 |
|
|
| 162,426 |
|
|
| 4,141,981 |
|
|
| 1,609,400 |
|
Catamaran CLO 2016-1 Ltd. |
| Subordinated Notes |
|
| 24.9 |
|
|
| - |
|
|
| — |
|
|
| 8,872,484 |
|
|
| 3,549,000 |
|
Catamaran CLO 2018-1 Ltd. |
| Subordinated Notes |
|
| 24.8 |
|
|
| 8,823,494 |
|
|
| 7,023,000 |
|
|
| 9,157,681 |
|
|
| 6,655,000 |
|
Total |
|
|
|
|
|
| $ | 33,964,237 |
|
| $ | 17,173,635 |
|
| $ | 45,727,813 |
|
| $ | 19,582,555 |
|
($ in thousands) September 30, 2022 December 31, 2021 CLO Fund Securities Investment %(1) Amortized Fair Value Amortized Fair Value Catamaran CLO 2013- 1 Ltd. Subordinated Notes - $ - $ - $ 4,198 $ 1,779 Catamaran CLO 2014-1 Ltd. Subordinated Notes 22.2 4,175 2,835 9,679 4,278 Catamaran CLO 2014-2 Ltd. Subordinated Notes 24.9 6,066 - 6,066 - Catamaran CLO 2015-1 Ltd. Subordinated Notes 9.9 2,534 - 2,549 - Catamaran CLO 2018-1 Ltd. Subordinated Notes 24.8 6,261 5,294 8,694 6,314 Dryden 30 Senior Loan Fund Subordinated Notes 6.8 1,157 950 1,147 1,258 JMP CLO IV Junior Sub Note Subordinated Notes 57.2 6,407 6,396 8,530 8,105 JMP CLO V Junior Sub Note Subordinated Notes 57.2 10,811 9,148 10,698 9,898 Total $ 37,411 $ 24,623 $ 51,561 $ 31,632 Investment in Joint Ventures KCAP Freedom 3 LLC During the third quarter of 2017, we and Freedom 3 Opportunities LLC (“Freedom 3 Opportunities”), an affiliate of Freedom 3 Capital LLC, entered into an agreement to create KCAP Freedom 3 LLC (the We have determined that the F3C Joint Venture is an investment company under Accounting Standards Codification (“ASC”), Financial Services — Investment Companies (“ASC 946”), however, in accordance with such guidance, we will generally not consolidate our investment in a company other than a wholly owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. We do not consolidate its interest in the F3C Joint Venture because we do not control the F3C Joint Venture due to allocation of the voting rights among the F3C Joint Venture partners. KCAP Freedom 3 LLC Summarized ($ in thousands) As of September 30, 2021 As of As of September 30, 2022 As of December 31, 2021 (unaudited) Cash $ — $ — $ — $ — Investment at fair value 36,834,689 31,404,100 28,703 35,841 Total Assets $ 36,834,689 $ 31,404,100 $ 28,703 $ 35,841 Total Liabilities $ 166,234 $ 167,389 $ 164 $ 164 Total Equity 36,668,455 31,236,711 $ 28,539 $ 35,677 Total Liabilities and Equity $ 36,834,689 $ 31,404,100 $ 28,703 $ 35,841 KCAP Freedom 3 LLC Summarized (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2020 2021 2020 2022 2021 2022 2021 Investment income $ 1,619,634 $ 1,294,081 $ 4,918,670 $ 3,689,714 $ 2,542 $ 1,620 $ 6,938 $ 4,919 Operating expenses 36,279 1,997 52,434 33,497 2 36 5 52 Net investment income 1,583,355 1,292,084 4,866,236 3,656,217 $ 2,540 $ 1,584 $ 6,933 $ 4,867 Unrealized appreciation on investments (765,565 ) 1,779,745 564,353 (5,583,581 ) $ (4,199 ) $ (766 ) $ (9,282 ) $ 564 Net income $ 817,790 $ 3,071,829 $ 5,430,589 $ (1,927,366 ) $ (1,659 ) $ 818 $ (2,349 ) $ 5,431 52 KCAP Freedom 3 LLC Schedule of Investments September 30, Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 6.8%, 12/29 maturity 100.0 % $ 42,299,908 $ 36,834,689 Total Investments $ 42,299,908 $ 36,834,689 Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 12.3%, 12/29 maturity 100.0 % $ 38,986,212 $ 31,404,100 Total Investments $ 38,986,212 $ 31,404,100 Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 23.7%, 12/29 maturity 100.0 % $ 42,990 $ 28,703 Total Investments $ 42,990 $ 28,703 KCAP Freedom 3 LLC Schedule of Investments ($ in thousands) Portfolio Company Investment Percentage Amortized Fair Value Great Lakes KCAP F3C Senior, LLC(1)(2) Subordinated Securities, effective interest 21.3%, 12/29 maturity 100.0 % $ 40,847 $ 35,841 Total Investments $ 40,847 $ 35,841 Series A – Great Lakes The Great Lakes II Joint Venture is a Delaware series limited liability company, and pursuant to the terms of the Great Lakes Funding II LLC The fair value of our investment in the RESULTS OF OPERATIONS The principal measure of our financial performance is the net increase (decrease) in Set forth below is a discussion of our results of operations for the three and nine months ended September 30, 53 Revenue For the Three Months Ended September 30, For the Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 INVESTMENT INCOME Interest income: Non-controlled/non-affiliated investments $ 13,727 $ 16,370 $ 37,043 $ 48,283 Non-controlled affiliated investments 823 1,775 2,271 2,670 Controlled affiliated investments - (5 ) - (5 ) Total interest income $ 14,550 $ 18,140 $ 39,314 $ 50,948 Payment-in-kind income: Non-controlled/non-affiliated investments $ 1,505 $ 1,225 $ 3,830 $ 3,078 Non-controlled affiliated investments 74 71 403 95 Controlled affiliated investments 161 - 181 - Total payment-in-kind interest $ 1,740 $ 1,296 $ 4,414 $ 3,173 Dividend income: Non-controlled affiliated investments $ 1,149 $ 2,070 $ 3,099 $ 3,997 Controlled affiliated investments 1,033 373 3,262 3,015 Total dividend income $ 2,182 $ 2,443 $ 6,361 $ 7,012 Fees and other income $ 537 $ 1,032 $ 908 $ 1,628 Total investment income $ 19,009 $ 22,911 $ 50,997 $ 62,761 Revenues consist primarily of investment income from interest and dividends on our investment portfolio and various ancillary fees related to our investment holdings. Investment income for the three months ended September 30, 2022 and 2021 was approximately $19.0 million and $22.9 million, respectively. Investment income for the nine months ended September 30, 2022 and 2021 was approximately $51.0 million and $62.8 million, respectively. Interest from Investments in Debt The majority of investment income is attributable to interest income on our Debt Securities Portfolio. For the three months ended September 30, 2022 and 2021 approximately $15.4 million and $18.7 million, respectively, of investment income was attributable to interest income on our Debt Securities Portfolio. For the nine months ended September 30, 2022 and 2021 approximately $40.3 million and $51.9 million, respectively, of investment income was attributable to interest income on our Debt Securities Portfolio. At September 30, 2022 and December 31, 2021, the weighted average contractual interest rate on our interest earning Debt Securities Portfolio was approximately 10.0% and 8.1%, respectively. Investment income is primarily dependent on the composition and credit quality of our investment portfolio. Generally, our Debt Securities Portfolio is expected to generate predictable, recurring interest income in accordance with the contractual terms of each loan. Corporate equity securities may pay a dividend and may increase in value for which a gain may be recognized; generally, such dividend payments and gains are less predictable than interest income on our loan portfolio. Investment income is comprised of coupon interest, accretion of discount and accelerated accretion resulting from paydowns and other revenue earned from operations. Recent acquisitions of GARS (October 2020) and HCAP (June 2021) have had a significant positive impact on earnings as a result of amortization of purchase discount established at the time of the merger. The table below illustrates that impact. For the Three Months Ended September 30, For the Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 Interest from investments in debt excluding accretion $ 12,232 $ 14,602 $ 31,320 $ 36,750 Purchase discount accounting 1,404 2,790 4,518 11,987 PIK Investment Income 1,740 1,296 4,414 3,173 CLO Income 914 748 3,476 2,211 JV Income 2,182 2,443 6,361 7,012 Service Fees 537 1,032 908 1,628 Investment Income $ 19,009 $ 22,911 $ 50,997 $ 62,761 Less : Purchase discount accounting $ (1,404 ) $ (2,790 ) $ (4,518 ) $ (11,987 ) Core Investment Income $ 17,605 $ 20,121 $ 46,479 $ 50,774 Core investment income excludes the impact of purchase discount amortization in connection with the GARS and HCAP mergers which is investment income as determined in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), excluding the impact of purchase discount amortization associated with the GARS and HCAP mergers. We believe presenting investment income excluding the impact of the GARS and HCAP merger-related purchase discount amortization and the related per share amount is useful and appropriate supplemental disclosure for analyzing our financial performance due to the unique circumstance giving rise to the purchase accounting adjustment. However, this measure is a non-U.S. GAAP measure and should not be considered as a replacement for net investment income and other earnings measures presented in accordance with U.S. GAAP. Instead, this measure should be reviewed only in connection with such U.S. GAAP measures in analyzing Portman Ridge’s financial performance. A reconciliation of net investment income in accordance with U.S. GAAP to net investment income excluding the impact of purchase accounting is detailed in the table above. Investment Income on Investments in CLO Fund CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which we have an investment are generally diversified secured or unsecured corporate debt. Our CLO Fund Securities that are subordinated securities or preferred shares (“junior securities”) are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the LIBOR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior bond holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and resulting cash distributions to us can vary significantly. 54 Interest income on investments in CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, Beneficial Interests in Securitized Financial Assets (“ASC 325-40”), based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in Capital Structuring Service For the three months ended September 30, 2022 and 2021, approximately $537 thousand and Expenses For the Three Months Ended September 30, For the Nine Months Ended September 30, ($ in thousands) 2022 2021 2022 2021 EXPENSES Management fees $ 2,082 $ 2,065 $ 6,305 $ 5,772 Performance-based incentive fees 1,780 1,939 4,627 6,333 Interest and amortization of debt issuance costs 4,673 3,408 11,906 10,315 Professional fees 759 490 2,483 2,680 Administrative services expense 862 760 2,531 2,092 Other general and administrative expenses 461 531 1,323 1,928 Total expenses $ 10,617 $ 9,193 $ 29,175 $ 29,120 We are longer have any employees. However, in connection with the Advisory Agreement, we pay the Adviser certain investment advisory fees and reimburse the Adviser and Administrator for certain expenses incurred in connection with the services they provide. We bear our allocable portion of the compensation paid by the Adviser (or its affiliates) to our chief compliance officer and chief financial officer and their respective staffs (based on a percentage of time such individuals devote, on an estimated basis, to our business affairs). We also bear all other costs and expenses of our operations, administration and transactions, including, but not limited to (i) investment advisory fees, including management fees and incentive fees, to the Adviser, pursuant to the Advisory Agreement; (ii) our allocable portion of overhead and other expenses incurred by the Adviser (or its affiliates) in performing its administrative obligations under the Advisory Agreement, and (iii) all other expenses of our operations and transactions including, without limitation, those relating to: 55 Management Fees and Incentive Fees. Management fees for the three months ended September 30, Management fees for the nine months ended September 30, Interest and Amortization of Debt Issuance For the three months ended September 30, 2022 and 2021, interest expense and Professional Fees Total expenses for the three months ended September 30, 2022 and 2021 1
Cost
Cost2021.2022.2 As of December 31, 2020, the CLO Funds managed by Libremax were assigned to CLO Funds managed by non-affiliates.As a result of the severe economic consequences resulting from the COVID 19 pandemic, during the second quarter of 2020, the Company was notified that four of the Catamaran CLO Funds breached certain covenants contained in their respective indentures, and as a result, available cash within the CLO Fund will be diverted away from the subordinated notes owned by the Company and will be applied to more senior noteholders in the capital structure of the CLO Fund. It is also possible, based upon the severe economic consequences resulting from the COVID 19 pandemic, that additional CLO Fund Securities owned by the Company, and including the subordinated securities issued by Great Lakes KCAP F3C Senior LLC CLO, which are owned by the KCAP Freedom 3 Joint Venture, could also cease making distributions to the Company. As of September 30, 2021, three of the four CLO funds whose distributions to the Company had been temporarily interrupted in 2020 have resumed making distributions to the Company. The estimated timing and amount of future distributions, if any, from such other CLO Fund Securities is uncertain.“Joint“F3C Joint Venture”). We contributed approximately $37 million and Freedom 3 Opportunities contributed approximately $25 million, in assets toThe fund capitalized by the F3C Joint Venture which in turn used the assets to capitalize a new fund, Great Lakes KCAP F3C Senior Funding L.L.C. (formerly known as KCAP F3C Senior Funding, L.L.C.) (the “Fund”) managed by KCAP Management, LLC, one of the Asset Manager Affiliates. In addition, the Fund used cash on hand and borrowings under a credit facility to purchase approximately $184 million of primarily middle-market loans from us and we used the proceeds from such sale to redeem approximately $147 million in debt issued by KCAP Senior Funding I, LLC (“KCAP Senior Funding”). The Fund invests primarily in middle-market loans and the F3C Joint Venture partners may source middle-market loans from time-to-time for the Fund.fund.During the fourth quarter of 2017, the Fund was refinanced through the issuance of senior and subordinated notes. The Joint Venture purchased 100% of the subordinated notes issued by the Fund. In connection with the refinancing, the Joint Venture made a cash distribution to us of approximately $12.6 million. $11.8 million of this distribution was a return of capital, reducing the cost basis of our investment in the Joint Venture by that amount. The final determination of the tax attributes of distributions from the Joint Venture is made on an annual (full calendar year) basis at the end of the year, therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.In connection with the Externalization, during the first quarter of 2019, KCAP Management agreed to waive management fees it is otherwise entitled to receive for managing the Fund. In addition, the Joint Venture was restructured such that we are now entitled to receive a preferred distribution in an amount equal to the fees waived by KCAP Management. The impact of these transactions was a reduction in the fair value of the Asset Manager Affiliates (realized loss) and increase the fair value of our investment in the Joint Venture (unrealized gain) during the first quarter of 2019.During the second quarter of 2021, the Company contributed an additional $2.5 million cash investment to the Joint Venture, increasing its equity ownership interest to 62.83% in the Joint Venture. While weWe own a 62.83%62.8% economic interest in the F3C Joint Venture, theVenture. The F3C Joint Venture is structured as an unconsolidated Delaware limited liability company. All portfolio and other material decisions regarding the F3C Joint Venture must be submitted to its board of managers, which is comprised of four members, two of whom were selected by us and two of whom were selected by Freedom 3 Opportunities, and must be approved by at least one member appointed by us and one appointed by Freedom 3 Opportunities. In addition, certain matters may be approved by the F3C Joint Venture’s investment committee, which is comprised of one member appointed by us and one member appointed by Freedom 3 Opportunities.StatementStatements of Financial Condition
December 31,
2020
(Unaudited)StatementStatements of Operations(unaudited)($ in thousands)20212022(unaudited)
Ownership
by Joint
Venture
Cost(1) CLO Subordinated Investments are entitled to periodic distributions which are generally equal to the remaining cash flow of the payments made by the underlying fund’s investments less contractual payments to debt holders and fund expenses. The estimatedannualized effective yield indicated is based upon a current projection of the amount and timing of these distributions. Such projections are updated on a quarterly basis and the estimated effective yield is adjusted prospectively.($ in thousands)(2) Fair value of this investment was determined using significant unobservable inputs, including default rates, prepayment rates, spreads, and the discount rate by which to value the resulting cash flows.(Unaudited)KCAP Freedom 3 LLCSchedule of InvestmentsDecember 31, 2020
Ownership
by Joint
Venture
Cost
Ownership
by Joint
Venture
CostBCPDecember 31, 2021
Ownership
by Joint
Venture
CostPartnershipFunding II LLCBCPIn August 2022, we invested in Series A – Great Lakes Fund LPFunding II LLC (the “BCP“Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. We treat our investment in the Great Lakes Partnership”) has investedII Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, we entered into a series of transactions pursuant to which our prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the “Great“Prior Great Lakes Joint Venture”), and together with the Joint Venture,corresponding assets held by the “Joint Ventures”). We are a limited partner in the BCP Great Lakes Partnership and do not have any direct or indirect voting interests in thePrior Great Lakes Joint Venture and treat the investment as a joint venture since an affiliatein respect of our Adviser managesinvestment in BCP Great Lakes Holdings LP, and controls a 50% voting interest inwere transferred to the Great Lakes II Joint Venture. TheVenture in complete redemption of our investment strategy ofin BCP Great Lakes Holdings LP.isLimited Liability Company Agreement (the “Great Lakes II LLC Agreement”), prior to underwrite and hold senior, secured unitranche loans madethe end of the investment period with respect to middle-market companies.each series established under the Great Lakes II LLC Agreement, each member of the predecessor series would be offered the opportunity to roll its interests into any subsequent series of the Great Lakes II Joint Venture. We do not pay any advisory fees in connection with our investment in the BCP Great Lakes Partnership.II Joint Venture. Certain other funds managed by the Adviser or its affiliates have also invested in the Great Lakes II Joint Venture.BCP Great Lakes PartnershipII Joint Venture at September 30, 2021 and2022 was $27.0 million. The fair value of our investment in the Prior Great Lakes Joint Venture at December 31, 20202021 was $43.7 million and $29.6$37.4 million. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the BCP Great Lakes Fund LP Amended and Restated Exempted Limited PartnershipII LLC Agreement, (the “BCPwe generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon our interests in the Great Lakes Partnership Agreement”), generallyII Joint Venture, except that we may not sell exchange, assign, pledge or otherwise transfer our interest, in whole or in part, withoutinterests with the prior written consent of the general partnermanaging members of the Great Lakes Partnership (the “General Partner”) which consent may be givenII Joint Venture or withheld in the General Partner’s sole and absolute discretion, and may be conditioned upon repaymentto an affiliate or a successor to substantially all of our share of indebtedness incurred by BCP Great Lakes Partnership.assets.In March 2019, prior to the Externalization we increased our aggregate commitment to the BCP Great Lakes Partnership to $50 million, subject to certain limitations (including that we are not obligated to fund capital calls if such funding would cause the Company to be out of compliance with certain provisions of the Investment Company Act of 1940). As of September 30, 2021 and December 31, 2020,2022, we have a $6.9$21.7 million and $20.0 million, respectively unfunded commitment to the BCP Great Lakes Partnership.II Joint Venture. As of December 31, 2021, we had a $13.0 million unfunded commitment to the Prior Great Lakes Joint Venture.stockholders’ equitynet assets resulting from operations, which includes net investment income (loss) and net realized and unrealized appreciation (depreciation). Net investment income (loss) is the difference between our income from interest, distributions, fees, and other investment income and our operating expenses. Net realized gain (loss) on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost. Net change in unrealized appreciation (depreciation) on investments is the net change in the fair value of our investment portfolio.20212022 and 2020.2021.RevenueSecurities.Securities. We generate interest income from our investments in debt securities that consist primarily of senior and junior secured loans. Our Debt Securities Portfolio is spread across multiple industries and geographic locations and, as such, we are broadly exposed to market conditions and business environments. As a result, although our investments are exposed to market risks, we continuously seek to limit concentration of exposure in any particular sector or issuer.Securities.Securities. For the three months ended September 30, 2022 and 2021, approximately $914 thousand and $748 thousand, respectively, of investment income was attributable to investments in CLO Fund Securities. For the nine months ended September 30, 2022 and 2021, approximately $3.5 million and $2.2 million, respectively, of investment income was attributable to investments in CLO Fund Securities. During the year ended December 31, 2021, we acquired two additional investments in CLO Fund Securities. We generate investment income from our investments in the securities (typically preferred shares or subordinated securities) of CLO Funds. We distinguish CLO Funds managed by our fomer Asset Manager Affiliates as “CLO Fund Securities Managed by Affiliates”, in our consolidated financial statements. Since the Asset Manager Affiliates were owned throughout 2018 and sold on December 31, 2018, investment income on these CLO Fund Securities is reflected on the statement of operations for the year of 2018 as “managed by affiliates”, while on the consolidated balance sheet at December 31, 2018 these investments were reflected as “managed by non-affiliates”. Effective April 1, 2019, as a result of the Externalization and related transactions, CLO Fund investments managed by LibreMax were assigned to CLO Funds Managed by Affiliates. During the fourth quarter of 2020, Libremax disposed of its interest in Sierra Crest and accordingly, the CLO Funds managed by Libremax or its affiliates were reclassified to CLO Funds Managed by Non-Affiliates as of December 31, 2020 and prospectively.theour U.S. generally accepted accounting principles (“GAAP”) statement of operations differs from both the tax–basis investment income and from the cash distributions actually received by us during the period. As a RIC, we anticipate a timely distribution of our tax-basis taxable income.For non-junior class CLO Fund securities, interest is earned at a fixed spread relative to the LIBOR index.Asset Manager Affiliates. Our Asset Manager Affiliates was deemed to have no value at September 30, 2021 and December 31, 2020. There were no distributions from the Asset Manager Affiliates during 2020 and the nine months ended September 30, 2021. The difference between cash distributions received and the tax-basis earnings and profits is recorded as an adjustment to the cost basis of the Asset Manager Affiliates investments. For interim periods, we estimate the tax attributes of any distributions as being either from tax-basis earnings and profits (i.e. dividend income) or return of capital (i.e. adjustment to our cost basis in the Asset Manager Affiliates). The final determination of the tax attributes of distributions from our Asset Manager Affiliates is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full-year. Therefore, any estimate of tax attributes of distributions made on a quarterly basis may not be representative of the actual tax attributes of distributions for a full year. The aggregate par value of assets under management by our Asset Manager Affiliates was $300 million as of each of September 30, 2021 and December 31, 2020.InvestmentInvestments in Joint Ventures. For the three months ended September 30, 2022 and 2021, and 2020, the Companywe recognized $2.4$2.2 million and $2.2$2.4 million, respectively, in investment income from itsour investments in Joint Ventures. For the nine months ended September 30, 2022 and 2021, and 2020, the Companywe recognized $4.8$6.4 million and $4.8$7.0 million, respectively, in investment income from itsour investments in Joint Ventures. As of September 30, 20212022 and December 31, 2020,2021, the fair value of our investments in Joint Ventures was approximately $67.6$45.1 million and $49.3$60.5 million, respectively. For interim periods, we recognize investment income on its investment in the Joint Ventures based upon our share of estimated earnings and profits of the Joint Venture. The final determination of the tax attributes of distributions from Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.Fees.Fees. We may earn ancillary structuring and other fees related to the origination, investment, disposition or liquidation of debt and investment securities.Investment IncomeInvestment income for the three months ended September 30, 2021 and 2020 was approximately $22.9 million and $7.8 million, respectively. Of these amounts, approximately $18.7 million and $5.0 million, respectively was attributable to interest income on our Debt Securities Portfolio.Investment income for the nine months ended September 30, 2021 and 2020 was approximately $62.8 million and $22.9 million, respectively. Of these amounts, approximately $51.9 million and $15.0 million, respectively was attributable to interest income on our Debt Securities Portfolio.At September 30, 2021 and December 31, 2020, the weighted average contractual interest rate on our loans and debt securities was approximately 8.2% and 10.9%, respectively. At September 30, 2021 and December 31, 2020, the weighted average contractual interest rate on our loans and debt securities, excluding non-accrual and partial non-accrual investments, was approximately 7.9% and 9.0%, respectively.Investment income is primarily dependent on the composition and credit quality of our investment portfolio. Generally, our Debt Securities Portfolio is expected to generate predictable, recurring interest income in accordance with the contractual terms of each loan. Corporate equity securities may pay a dividend and may increase in value for which a gain may be recognized; generally, such dividend payments and gains are less predictable than interest income on our loan portfolio.2020, approximately $0.7 million and $0.04$1.0 million, respectively, of investment income was attributable to investments in CLO Fund Securities.Capital Structuring Fees. For the nine months ended September 30, 2022 and 2021, approximately $908 thousand and 2020, approximately $2.2 million and $.02$1.6 million, respectively, of investment income was attributable to investments in CLO Fund Securities. On a tax basis, the Company recognized $4.0 million and $3.3 million of taxable distributable income on distributions from our CLO Fund Securities during the nine months ended September 30, 2021 and 2020, respectively. Distributions from CLO Fund SecuritiesCapital Structuring Fees. dependent on the performance of the underlying assets in each CLO Fund; interest payments, principal amortization and prepayments of the underlying loans in each CLO Fund are primary factors which determine the level of distributions on our CLO Fund Securities. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund bond liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and distributions to us can vary significantly.ExpensesThrough March 31, 2019 we were internally managed, and directly incurred the cost of management and operations. As a result, we paid no investment management fees or other fees to an external advisor. Our expenses consisted primarily of interest expense on outstanding borrowings, compensation expense and general and administrative expenses, including professional fees. Interest and compensation expense are typically our largest expenses each period. Since the Closing, we have been externally managed and no•••••••••••••••••••••••20212022 and 2020,2021 were approximately $2.1 million and $1.0$2.1 million, respectively. Incentive fees earned during the three months ended September 30, 2021 were approximately $1.9 million, none of which were waived pursuant to the Externalization Agreement. Incentive fees earned during the three months ended September 30, 2020 were approximately $572 thousand, none of which were waived pursuant to the Externalization Agreement.20212022 and 2020,2021 were approximately $5.8$6.3 million and $3.1$5.8 million, respectively. Incentive fees earned duringfor the three months ended September 30, 2022 and 2021 were approximately $1.8 million and $1.9 million, respectively. Incentive fees for the nine months ended September 30, 2022 and 2021 were approximately $4.6 million and $6.3 million, none of which were waived pursuant to the Externalization Agreement. Incentive fees earned during the nine months ended September 30, 2020 were approximately $1.1 million, of which $557 thousand were waived pursuant to the Externalization Agreement.respectively.During the second quarter of 2021, the Advisor reinvested approximately $4.0 million of incentive fees in newly issued shares of our common stock in connection therewith the Externalization Agreement. The shares were issued at the most recently determined net asset value per share of our common stock. The obligations of the Advisor to use incentive fees to purchase shares expired on April 1, 2021.Costs.Costs. Interest expense is dependent on the average outstanding balance on our borrowings and the base index rate for the period. Debt issuance costs represent fees and other direct costs incurred in connection with our borrowings. These amounts are capitalized and amortized ratably over the expected term of the borrowing. In anticipation of the refinancing of the 6.125% Notes due 2022, during the first quarter of 2021, approximately $1.0 million of unamortized debt issuance costs related to these notes were written off and reflected in Realized Losses on Extinguishment of Debt in the Consolidated Statement of Operations.2020,amortization on debt issuance costs and discount for the period was approximately $4.7 million and $3.4 million, respectively, on average debt outstanding of $355.9 million and $355.0 million, respectively. For the nine months ended September 30, 2022 and 2021, interest expense and amortization on debt issuance costs for the period was approximately $3.4$11.9 million and $2.2 million, respectively, on average debt outstanding of $355 million and $173 million, respectively.For the nine months ended September 30, 2021 and 2020, interest expense and amortization on debt issuance costs for the period was approximately $10.3 million, and $7.0 million, respectively.Compensation Expense. Prior to the Closing of the Externalization on April 1, 2019, compensation expense included base salaries, bonuses, stock compensation, employee benefits and employer-related payroll costs. The largest components of total compensation costs are base salaries and bonuses; generally, base salaries are expensed as incurred and annual bonus expenses are estimated and accrued. Our compensation arrangements with our employees contained a profit sharing and/or performance-based bonus component. Following the Closing, we no longer have any employees and therefore do not have any related expenses.Administrative Services Expense and General and Administrative Expenses.Expenses. The balance of our expenses includes professional fees (primarily legal, accounting, director fees, valuation and other professional services), insurance costs, Administrative services and other costs.For the three months ended September 30, 2021 and 2020, respectively, professional fees and insurance expenses totaled approximately $0.7 million and $0.6 million. For the three months ended September 30, 2021 and 2020, Administrative services expenses incurred pursuant toexpense under the Administration Agreement was approximately $0.8 million and $0.5 million, respectively. Other general administrative and administrative costs totaled approximately $0.3 million and $0.1 millionother costs.and 2020, respectively.
For the nine months ended September 30, 2021 and 2020, professional fees and insurance expenses totaledwere approximately $3.3$10.6 million and $2.3$9.1 million, respectively.
Total expenses for the nine months ended September 30, 20212022 and 20202021 were approximately $29.2 million and $14.8$29.1 million, respectively.
For the three months ended September 30, 2022 and 2021, professional fees totaled approximately $759 thousand and $490 thousand, respectively. For the nine months ended September 30, 2022 and 2021, professional fees totaled approximately $2.5 million and 2020, interest$2.7 million, respectively
For the three months ended September 30, 2022 and 2021, administrative services expense was approximately $862 thousand and amortization on debt issuance costs$760 thousand, respectively. For the nine months ended September 30, 2022 and 2021, administrative services expense was approximately $2.5 million and $2.1 million, respectively. The increase in administrative services expense for the periodthree and nine months ended September 30, 2022 in comparison to the prior year was primarily driven by the increase in assets under management.
Other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $10.3$461 thousand and $531 thousand for the three months ended September 30, 2022 and 2021, respectively. For the nine months ended September 30, 2022 and 2021, other general and administrative expenses totaled approximately $1.3 million and $7.0$1.9 million, respectively, on average debt outstanding of $359 million and $160 million, respectively.
Net Investment Income and Net Realized Gains (Losses)
Net investment income and net realized gains (losses) represents the change in stockholder’s equitynet assets before net unrealized appreciation or depreciation on investments. For the three months ended September 30, 20212022 net investment income and net realized gains (losses) were approximately $9.7($0.7) million, or $1.06($0.07) per share. For the three months ended September 30, 2020,2021, net investment income and net realized lossesgains (losses) were approximately $0.8$9.8 million, or $0.18$1.07 per share. For the nine months ended September 30, 2022, net investment income and net realized gains (losses) were approximately ($6.8) million, or ($0.71) per share. For the nine months ended September 30, 2021, net investment income and net realized lossesgains (losses) were approximately $22.2$22.3 million, or $2.70 per share. For the nine months ended September 30, 2020, net investment income and net realized gains were approximately $4.2 million, or $0.95 per share. Net investment income represents the income earned on our investments less operating and interest expense before net realized gains or losses and unrealized appreciation or depreciation on investments.
Investments are carried at fair value, with changes in fair value recorded as unrealized appreciation (depreciation) in the statement of operations. When an investment is sold or liquidated, any previously recognized unrealized appreciation/depreciation is reversed and a corresponding amount is recognized as realized gain (loss). For the nine months ended September 30, 2022, GAAP-basis net investment income was approximately $8.4 million or $0.87 per share, while tax-basis distributable income was approximately $22.1 million or $2.29 per basic share. For the nine months ended September 30, 2021, GAAP-basis net investment income was approximately $33.6 million or $4.10 per share, while tax-basis distributable income was approximately $20.5 million or $2.49 per basic share. For
Net Unrealized (Depreciation) Appreciation on Investments
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| ||||||||||
($ in thousands) |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Unrealized Gains (Losses) On Investments: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net change in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Non-controlled/non-affiliated investments |
| $ | (318 | ) |
| $ | 310 |
|
| $ | 5,381 |
|
| $ | 5,143 |
|
Non-controlled affiliated investments |
|
| 338 |
|
|
| 182 |
|
|
| (874 | ) |
|
| 1,770 |
|
Controlled affiliated investments |
|
| (2,988 | ) |
|
| (955 | ) |
|
| (7,661 | ) |
|
| 1,553 |
|
Derivatives |
|
| - |
|
|
| (179 | ) |
|
| 2,442 |
|
|
| (873 | ) |
Total net unrealized gain (loss) from investment transactions |
| $ | (2,968 | ) |
| $ | (642 | ) |
| $ | (712 | ) |
| $ | 7,593 |
|
During the three months ended September 30, 2022, our total investments had net change in unrealized appreciation (depreciation) of approximately ($3.0) million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $7.8 million on CLO Fund Securities, ($963) thousand on equity securities, ($2.2) million on our Joint Ventures investments, ($7.6) million on our debt securities, and ($2) thousand on our derivatives. During the three months ended September 30, 2021, our total investments had net change in unrealized appreciation (depreciation) of approximately ($642) thousand. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $707 thousand on CLO Fund Securities, $1.2 million on equity securities, $2.1 million on our Joint Ventures investments, ($4.4) million on our debt securities, and ($179) thousand on our derivatives.
During the nine months ended September 30, 2020, GAAP-basis2022, our total investments had net investment income waschange in unrealized appreciation (depreciation) of approximately $8.1($712) thousand. The net change in unrealized appreciation (depreciation) is made up of approximately $7.1 million or $1.81 per share, while tax-basis distributable income was approximately $8.3on CLO Fund Securities, $903 thousand on equity securities, ($6.1) million or $1.85 per basic share.
Net Unrealized (Depreciation) Appreciation on Investments
our Joint Ventures investments, ($5.1) million on our debt securities, and $2.4 million on our derivatives. During the nine months ended September 30, 2021, our total investments had net change in unrealized appreciation (depreciation) of approximately $8.0$7.6 million. IncludedThe net change in the net unrealized appreciation are unrealized appreciation(depreciation) is made up of approximately $9.4 million on CLO Fund Securities, of approximately $9.4$4.0 million unrealized appreciation on equity securities, of approximately $4.0 million, an unrealized appreciation of $2.6$2.7 million on our Joint Ventures investment, unrealized depreciation($7.4) million on our debt securities, of $7.4 million, and unrealized depreciation of $0.9 million($873) thousand on our derivatives. During
56
Net Change in Net Assets Resulting From Operations
The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2022 was ($4.2) million, or ($0.44) per basic share. The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2021 was $9.1 million, or $1.00 per basic share. The net increase (decrease) in net assets resulting from operations for the nine months ended September 30, 2020, our total investments had net unrealized depreciation of approximately $21.8 million. Included in the net unrealized depreciation are unrealized depreciation on CLO Fund Securities of approximately $.52022 was ($8.6) million, unrealized appreciation on equity securities of approximately $.4 million, an unrealized depreciation of $4.7 million on our Joint Ventures investment, unrealized depreciation on our debt securities of $3.9million and unrealized depreciation of $1.0 million on our derivatives.
Net Change in Stockholder’s Equity Resulting From Operations
or ($0.89) per basic share. The net increase (decrease) in stockholders’ equitynet assets resulting from operations for the nine months ended September 30, 2021 was $28.4$28.0 million, or $3.45$3.41 per basic share. Net decrease in stockholders’ equity resulting from operations for the nine months ended September 30, 2020 was $17.5 million, or $3.91 per share.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES
Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments, pay distributions to our stockholders and other general business needs. We recognize the need to have funds available for operating our business and to make investments. We seek to have adequate liquidity at all times to cover normal cyclical swings in funding availability and to allow us to meet irregular and unexpected funding requirements. We plan to satisfy our liquidity needs through normal operations with the goal of avoiding unplanned sales of assets or emergency borrowing of funds.
As of September 30, 20212022 and December 31, 20202021 the fair value of investments and cash were as follows:
($ in thousands) |
|
|
| |||||
Security Type |
| September 30, 2022 |
|
| December 31, 2021 |
| ||
Cash and cash equivalents |
| $ | 16,871 |
|
| $ | 28,919 |
|
Restricted Cash |
|
| 22,183 |
|
|
| 39,421 |
|
Senior Secured Loan |
|
| 415,819 |
|
|
| 364,701 |
|
Junior Secured Loan |
|
| 61,535 |
|
|
| 70,549 |
|
Senior Unsecured Bond |
|
| 43 |
|
|
| 43 |
|
Equity Securities |
|
| 24,487 |
|
|
| 22,586 |
|
CLO Fund Securities |
|
| 24,623 |
|
|
| 31,632 |
|
Asset Manager Affiliates |
|
| - |
|
|
| - |
|
Joint Ventures |
|
| 45,141 |
|
|
| 60,474 |
|
Derivatives |
|
| 8 |
|
|
| (2,412 | ) |
Total |
| $ | 610,710 |
|
| $ | 615,913 |
|
|
| Investments at Fair Value |
| |||||
Security Type |
| September 30, 2021 |
|
| December 31, 2020 |
| ||
Cash and cash equivalents |
| $ | 28,539,989 |
|
| $ | 6,990,008 |
|
Restricted Cash |
|
| 21,050,857 |
|
|
| 75,913,411 |
|
Senior Secured Loan |
|
| 380,960,592 |
|
|
| 328,845,612 |
|
Junior Secured Loan |
|
| 74,076,080 |
|
|
| 75,807,477 |
|
Senior Unsecured Bond |
|
| 43,204 |
|
|
| 207,766 |
|
CLO Fund Securities |
|
| 17,173,634 |
|
|
| 19,582,555 |
|
Equity Securities |
|
| 22,298,759 |
|
|
| 13,944,876 |
|
Joint Ventures |
|
| 67,629,114 |
|
|
| 49,349,163 |
|
Derivatives |
|
| (1,982,091 | ) |
|
| (1,108,618 | ) |
Total |
| $ | 609,790,138 |
|
| $ | 569,532,250 |
|
Subject to market conditions, we intend to grow our portfolio of assets by raising additional capital, including through the prudent use of leverage available to us. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. Effective March 29, 2019, we are allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. Because we also recognize the need to have funds available for operating our business and to make investments, we seek to have adequate liquidity at all times to cover normal cyclical swings in funding availability and to allow us to meet abnormal and unexpected funding requirements. As a result, we may hold varying amounts of cash and other short-term investments from time-to-time for liquidity purposes.
Borrowings
Borrowings
We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of September 30, 2021,2022, we had approximately $370$368.9 million of par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 178%167%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act. We may also borrow amounts of up to 5% of the value of our total assets for temporary purposes.
The Small Business Credit Availability Act (the “SBCA”) has modified the 1940 Act by allowing a BDC to increase the maximum amount of leverage it may incur from an asset coverage ratio of 200% to an asset coverage ratio of 150%, if certain requirements are met. On March 29, 2018, the Board , including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of its Board, approved the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCA. As a result, our asset coverage requirements for senior securities changed from 200% to 150%, effective as of March 29, 2019.
Outstanding Notes
On April 30, 2021, the Company issued $80,000,000 in aggregate principal amount of unsecured 4.875% Notes due 2026 (the “4.875% Notes due 2026”) in a private placement exempt from registration under the Section 4(a)(2) of the Securities Act. The 4.875% Notes due 2026 have not been registered under the Securities Act or any state securities laws and may not be reoffered or resold in the United States absent registration or an applicable exemption from such registration requirements. The net proceeds to the Company were approximately $77.7 million, after deducting estimated offering expenses. The Company used the net proceeds of the offering to redeem in full its 6.125% Notes due 2022, to make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.
On April 30, 2021, the Company and U.S. Bank National Association (the “Trustee”) entered into a Supplemental Indenture (the “Third Supplemental Indenture”), which supplements that certain Base Indenture, dated as of October 10, 2012 (as may be further amended, supplemented or otherwise modified from time to time, the “Base Indenture” and, together with the Third Supplemental Indenture, the “Indenture”). The Third Supplemental Indenture relates to the Company’s issuance of the 4.875% Notes due 2026.
The 4.875% Notes due 2026 will mature on April 30, 2026 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture and bear interest at a rate of 4.875% per year payable semi-annually on March 16 and September 16 of each year, commencing on September 16, 2021. The 4.875% Notes due 2026 are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 4.875% Notes due 2026, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Sections 18(a)(1)(A) and 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Exchange Act. Additionally, the Company has agreed to use its commercially reasonable efforts to maintain a rating of the 4.875% Notes due 2026 from a rating agency, as long as the notes are outstanding. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding notes at a price equal to 100% of the principal amount of such notes plus accrued and unpaid interest to the repurchase date.
Registration Rights Agreement
In connection with the offering of 4.875% Notes due 2026, the Company entered into a Registration Rights Agreement, dated as of April 30, 2021 (the “Registration Rights Agreement”), with the purchasers of the 4.875% Notes due 2026. Pursuant to the Registration Rights Agreement, the Company is obligated to file with the SEC a registration statement relating to an offer to exchange the 4.875% Notes due 2026 for new notes issued by the Company that are registered under the Securities Act and otherwise have terms substantially identical to those of the 4.875% Notes due 2026, and to use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company is not able to effect the exchange offer, the Company will be obligated to file a shelf registration statement covering the resale of the 4.875% Notes due 2026 and use its commercially reasonable efforts to cause such registration statement to be declared effective. If the Company fails to satisfy its registration obligations by certain dates specified in the Registration Rights Agreement, it will be required to pay additional interest to the holders of the 4.875% Notes due 2026.
June 23, 2021 the Company closed a private placement of $28.0 million in aggregate principal amount of 4.875% senior unsecured notes due 2026. These notes have identical terms to the Company’s $80.0 of aggregate principal amount of 4.875% Notes due 2026 that were issued on April 30, 2021 (collectively, the 4.875% Notes due 2026). The net proceeds to the Company were approximately $27.4 million, after deducting payment of fees and estimated offering expenses. The Notes bear an interest rate of 4.875% per year, payable semiannually and will mature on April 30, 2026 and may be repaid in whole or in part, at Portman Ridge’s option, at any time or from time to time at par plus a “make-whole” premium, if applicable. The Company intends to use the net proceeds of the private placement to redeem in full its 6.125% Senior Unsecured Notes due September 2022 assumed in connection with the recent merger with HCAP (the “HCAP Notes”), make investments in portfolio companies in accordance with its investment objectives, and for general corporate purposes.
During the thirdsecond quarter of 2017,2021, we issued $77.4$108.0 million aggregate principal amount of 6.125% Notes due 2022 (the “6.125%our 4.875% Notes Due 2022”).2026. The net proceeds for the 6.125%4.875% Notes Due 2022,2026, after the payment of underwriting expenses, were approximately $74.6$104.6 million. Interest on the 6.125%4.875% Notes Due 20222026 is paid quarterly in arrearssemi-annually on March 30, June 30,16 and September 30 and December 30,16, at a rate of 6.125%4.875% commencing September 30, 2017.16, 2021. The 6.125%4.875% Notes Due 20222026 mature on SeptemberApril 30, 20222026 and are seniorgeneral unsecured obligations. The indenture governing the 6.125%4.875% Notes Due 20222026 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act relating to borrowing and dividends.
During the three months ended March 31, 2020, the Company repurchased At September 30, 2022, there was approximately $573 thousand$108.0 million of principal amount of the 6.125% Notes Due 2022 at a cost of approximately $419 thousand, resulting in a realized gain on extinguishment of approximately $154 thousand. The Company subsequently surrendered these notes to the Trustee for cancellation. On April 30, 2021, Company notified the trustee for the Company’s 6.125% Notes due 2022 of the Company’s election to redeem the $77.4 million aggregate principal amount of the 6.125% Notes due 2022 outstanding, and instructedwe were in compliance with all of our debt covenants on the trustee to provide notice of such redemption to the holders of the 6.125% Notes due 2022 in accordance with the terms of the indenture governing the 6.125% Notes due 2022. The redemption was completed on May 30, 2021. Following the redemption, none of the 6.125% Notes due 2022 remain outstanding, and they were delisted from the NASDAQ Global Select Market.4.875% Notes.
HCAP Notes
In connection with the HCAP Acquisition, the Company assumed $28.75 million of HCAP Notes. These notes were redeemed in full on July 23, 2021.
Revolving Credit Facilities
On March 1, 2018, Great Lakes KCAP Funding I, LLC (“Funding”), our wholly owned subsidiary, entered into a senior secured revolving credit facility (the “Prior Revolving Credit Facility”) with certain institutional lenders, State Bank and Trust Company, as the administrative agent, lead arranger and bookrunner, CIBC Bank USA, as documentation agent and us, as the servicer. The maximum commitment amount of the Prior Revolving Credit Facility was increased on March 27, 2019 to $57.5 million, and on April 1, 2019 to $67.5 million, subject to availability under the borrowing base. The Prior Revolving Credit Facility was fully repaid and the related agreements, including security interests in assets pledged as collateral, were terminated on December 23, 2019. Borrowings under the Prior Revolving Credit Facility bore interest at a rate per annum equal to (i) in the case of LIBOR rate loans, an adjusted LIBOR rate for the applicable interest period plus 3.25% or (ii) in the case of base rate loans, the prime rate plus 3.25%. Funding paid a fee on any undrawn amounts of 0.375% per annum; provided that if 50% or less of the Prior Revolving Credit Facility was drawn, the fee would be 0.50% per annum.
On December 18, 2019, Great Lakes Portman Ridge Funding LLC (“GLPRF LLC”), a wholly-owned subsidiary of the Company, entered into a senior secured revolving credit facility (the “Revolving Credit Facility”) with JPMorgan Chase Bank, National Association (“JPM”). JPM serves as administrative agent, U.S. Bank National Association serves as collateral agent, securities intermediary and collateral administrator, and the Company serves as portfolio manager under the Revolving Credit Facility.
Advances under the Revolving Credit Facility bear interest at a per annum rate equal to the three-month LIBOR in effect, plus the applicable margin of 2.85% per annum. GLPRF LLC is required to utilize a minimum of 80% of the commitments under the Revolving Credit Facility, after an initial six-month ramp-up period during which a lesser minimum utilization requirement applies.
Unused amounts below such minimum utilization amount accrue interest as if such amounts are outstanding as borrowings under the Revolving Credit Facility. In addition, GLPRF LLC will pay a non-usage fee during the first three years after the closing date in an amount not to exceed 0.50% per annum on the average daily unborrowed portion of the financing commitments in excess of such minimum utilization amount.
The initial principal amount of the Revolving Credit Facility is $115 million. The Revolving Credit Facility has an accordion feature, subject to the satisfaction of various conditions, which could bring total commitments under the Revolving Credit Facility to up to $215 million. Proceeds from borrowings under the Revolving Credit Facility may be used to fund portfolio investments by GLPRF LLC and to make advances under delayed draw term loans where GLPRF LLC is a lender. All amounts outstanding under the Revolving Credit Facility must be repaid by the maturity date of December 18, 2023.
On April 29, 2022, GLPRF LLC amended the Revolving Credit Facility with JPM as administrative agent. The amended agreement replaces three-month SOFR as the benchmark interest rate and reduces the applicable margin to 2.80% per annum from 2.85% per annum. Other amendments include the extension of the reinvestment period and scheduled termination date to April 29, 2025 and April 29, 2026, respectively.
57
GLPRF LLC’s obligations to the lenders under the Revolving Credit Facility are secured by a first priority security interest in all of GLPRF LLC’sSPV’s portfolio of investments and cash. The obligations of GLPRF LLC under the Revolving Credit Facility are non-recourse to the Company, and the Company’s exposure under the Revolving Credit Facility is limited to the value of the Company’s investment in GLPRF LLC.
In connection with the Revolving Credit Facility, GLPRF LLC has made certain customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. The Revolving Credit Facility contains customary events of default for similar financing transactions, including if a change of control of GLPRF LLC occurs or if the Company is no longer the portfolio manager of GLPRF LLC. Upon the occurrence and during the continuation of an event of default, JPM may declare the outstanding advances and all other obligations under the Revolving Credit Facility immediately due and payable.
The occurrence of an event of default (as described above) or a market value event (as defined in the Revolving Credit Facility) triggers a requirement that GLPRF LLC obtain the consent of JPM prior to entering into certain sales or dispositions with respect to portfolio assets, and the occurrence of a market value event triggers the right of JPM to direct GLPRF LLC to enter into sales or dispositions with respect to any portfolio assets, in each case in JPM’s sole discretion.
At September 30, 2021,2022, GLPRF LLC was in compliance with all of its debt covenants and $69.1there was approximately $97.1 million principal amount of borrowings was outstanding under the Revolving Credit Facility.
2018-2 Secured Notes
September 30, 2021 |
| Amortized Carrying Value |
|
| Outstanding Principal at Par |
|
| Spread |
| Rating(1) |
| Stated | ||
2018-2 Secured Notes: |
|
|
|
|
|
|
|
|
|
| ||||
Class A-1R-R Notes |
| $ | — |
|
| $ | — |
|
| LIBOR + 1.58%(3) |
| AAA(sf) |
| 11/20/2029 |
Class A-1T-R Notes |
|
| 89,631,705 |
|
|
| 90,512,698 |
|
| LIBOR + 1.58% |
| AAA(sf) |
| 11/20/2029 |
Class A-2-R Notes |
|
| 54,681,332 |
|
|
| 55,100,000 |
|
| LIBOR + 2.45% |
| AA (sf) |
| 11/20/2029 |
Class B-R Notes |
|
| 18,102,679 |
|
|
| 18,250,000 |
|
| LIBOR + 3.17% |
| A (sf) |
| 11/20/2029 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| $ | 162,415,716 |
|
| $ | 163,862,698 |
|
|
|
|
|
|
|
(1) Represents ratings from each of S&P and DBRS for the Class A-1R-R Notes and the Class A-1T-R Notes and from S&P for the Class A-2-R Notes and Class B-R Notes as of the closing of the CLO on October 18, 2018.
(2) The indenture governing our CLO permits the repricing or refinancing of the secured notes after November 20, 2020, which may result in the redemption of the outstanding notes occurring prior to their stated maturity.
(3)Interest may be indexed to either the CP Rate (as defined in the governing indenture) or three-month USD LIBOR.
On October 28, 2020 the Company completed the GARS Acquisition, pursuant to the terms and conditions of the GARS Merger Agreement. In connection therewith, the Company now consolidates the financial statements the 2018-2 CLO a $420.0 million par value CLO facility. On the date of the transaction the debt assumed was recognized at fair value, resulting in a $2.4 million discount which is amortized over the remaining term of the borrowings.
The CLO was executed by GF CLO 2018-2 (the “Issuer”) and Portman Ridge Funding 2018-2 LLC (formerly known as Garrison Funding 2018-2 LLC, (togethertogether with the Issuer, the “Co-Issuers”) who issued $312.0 million of senior secured notes (collectively referred to as the “2018-2 Secured Notes” individually defined above in the table)) and $108.0 million of subordinated notes (the “2018-2 Subordinated Notes” and, together with the 2018-2 Secured Notes, the “2018-2 Notes”) backed by a diversified portfolio of primarily senior secured loans. The Company owns all $108.0 million of the par value of the 2018-2 Subordinated Notes and $18.3 million of the par value of the Class B-R Notes and serves as collateral manager for the Co-Issuers. The Company is entitled to receive interest from the Class B-R Notes, distributions from the 2018-2 Subordinated Notes and
fees for serving as collateral manager in accordance with the CLO’s governing documents and to the extent funds are available for such purposes. However, as a result of retaining all of the 2018-2 Subordinated Notes, the Company consolidates the accounts of the Co-Issuers into its financial statements and all transactions between the Company and the Co-Issuers are eliminated on consolidation. As a result of this consolidation, the 2018-2 Secured Notes issued by the CLO is treated as the Company’s indebtedness, except any 2018-2 Secured Notes owned by the Company, which are eliminated in consolidation. The 2018-2 Notes are scheduled to mature on November 20, 2029, however the Co-Issuers may redeem the 2018-2 Notes on any business day after November 20, 2020. The indenture governing the 2018-2 Notes provides that, to the extent cash is available from cash collections, the holders of the 2018-2 Notes are to receive quarterly interest payments on the 20th day or, if not a business day, the next succeeding business day of February, May, August and November of each year until the stated maturity or earlier redemption. On July 18, 2019, $25.0 million outstanding of the aggregate $50.0 million Class A-1R-R Notes available under the CLO converted to Class A-1T-R Notes. The remaining $25.0 million of Class A-1R-R Notes, to the extent drawn, will convert to term notes on or before November 20, 2022.
During the first quarter of 2021, the Companywe redeemed approximately $88 million of the par value of the 2018-2 Secured Notes. In connection therewith, the Companywe recognized a realized loss on extinguishment of debt of approximately $0.9 million.
Stockholder Distributions
We intend to continue to make quarterly distributions to our stockholders. To avoid certain excise taxes imposed on RICs, we generally endeavor to distribute during each calendar year an amount at least equal to the sum of:
We may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income, to the extent required.
The amount of our declared distributions, as evaluated by management and approved by our Board, is based primarily on our evaluation of our net investment income and distributable taxable income.
We may distribute taxable dividends that are payable in cash or shares of our common stock at the election of each stockholder. Under certain applicable provisions of the Code and the Treasury regulations, distributions payable in cash or in shares of stock at the election of stockholders are treated as taxable dividends. The Internal Revenue Service has published guidance indicating that this rule will apply even where the total amount of cash that may be distributed is limited to no more than 20% of the total distribution. Under this guidance, if too many stockholders elect to receive their distributions in 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). If we decide to make any distributions consistent with this guidance that are payable in part in our stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend (whether received in cash, shares of our stock, or a combination thereof) 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 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.
On November 3, 2021, our Board declared a cash distribution of $0.62 per share of common stock. The distribution is payable on November 30, 2021 to stockholders of record at the close of business as of November 15, 2021.
We are also prohibited by the 1940 Act and the indenture governing our 4.875% Notes due 2026 from declaring dividends (except a dividend payable in our stock) or making distributions on our common stock, or purchasing any such stock, if, at the time of declaration or at the time of any such purchase, our asset coverage, as defined in the 1940 Act, is below the threshold specified in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions thereto of the 1940 Act, after deducting the amount of such dividend, distribution or purchase price, as the case may be, and giving effect, in each case (i) to any exemptive relief granted to us by the SEC and (ii) to any no-action relief granted by the SEC to another BDC (or to the Company if it determines to seek such similar no-action or other relief) permitting the BDC to declare any cash dividend or distribution
notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(1) of the 1940 Act in order to maintain its status as a RIC under the Code. In any such event, we would be prohibited from making distributions required in order to maintain our status as a RIC unless made in accordance with any such exemptive or no-action relief granted by the SEC.
58
The following table sets forth the quarterly distributions paid by us since 2019.2020.
|
| Distribution 2 |
|
| Declaration |
| Record |
| Pay Date | |
2021: |
|
|
|
|
|
|
|
|
| |
Third quarter |
| $ | 0.60 |
|
| 8/4/2021 |
| 8/17/2021 |
| 8/31/2021 |
Second quarter |
| $ | 0.60 |
|
| 5/6/2021 |
| 5/19/2021 |
| 6/1/2021 |
First quarter |
|
| 0.60 |
|
| 2/12/2021 |
| 2/22/2021 |
| 3/2/2021 |
Total declared in 2021 |
| $ | 1.80 |
|
|
|
|
|
|
|
2020: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.60 |
|
| 10/16/2020 |
| 10/26/2020 |
| 11/27/2020 |
Third quarter |
|
| 0.60 |
|
| 8/5/2020 |
| 8/17/2020 |
| 8/28/2020 |
Second quarter |
|
| 0.60 |
|
| 3/17/2020 |
| 5/7/2020 |
| 5/27/2020 |
First quarter |
|
| 0.60 |
|
| 2/5/2020 |
| 2/18/2020 |
| 2/28/2020 |
Total declared in 2020 |
| $ | 2.40 |
|
|
|
|
|
|
|
2019: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.60 |
|
| 11/5/2019 |
| 11/15/2019 |
| 11/29/2019 |
Third quarter |
|
| 0.60 |
|
| 8/5/2019 |
| 8/12/2019 |
| 8/29/2019 |
Second quarter |
|
| 1.00 |
|
| 3/20/2019 |
| 4/5/2019 |
| 4/26/2019 |
First quarter |
|
| 1.00 |
|
| 12/12/2018 | 1 | 1/7/2019 |
| 1/31/2019 |
Total declared in 2019 |
| $ | 3.20 |
|
|
|
|
|
|
|
|
| Distribution 1 |
|
| Declaration |
| Record |
| Pay Date | |
2022: |
|
|
|
|
|
|
|
|
| |
Third quarter |
| $ | 0.63 |
|
| 8/9/2022 |
| 8/16/2022 |
| 9/2/2022 |
Second quarter |
|
| 0.63 |
|
| 5/10/2022 |
| 5/24/2022 |
| 6/7/2022 |
First quarter |
|
| 0.63 |
|
| 3/10/2022 |
| 3/21/2022 |
| 3/30/2022 |
Total declared in 2022 |
| $ | 1.89 |
|
|
|
|
|
|
|
2021: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.62 |
|
| 11/3/2021 |
| 11/15/2021 |
| 11/30/2021 |
Third quarter |
|
| 0.60 |
|
| 8/4/2021 |
| 8/17/2021 |
| 8/31/2021 |
Second quarter |
|
| 0.60 |
|
| 5/6/2021 |
| 5/19/2021 |
| 6/1/2021 |
First quarter |
|
| 0.60 |
|
| 2/12/2021 |
| 2/22/2021 |
| 3/2/2021 |
Total declared in 2021 |
| $ | 2.42 |
|
|
|
|
|
|
|
2020: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.60 |
|
| 10/16/2020 |
| 10/26/2020 |
| 11/27/2020 |
Third quarter |
|
| 0.60 |
|
| 8/5/2020 |
| 8/17/2020 |
| 8/28/2020 |
Second quarter |
|
| 0.60 |
|
| 3/17/2020 |
| 5/7/2020 |
| 5/27/2020 |
First quarter |
|
| 0.60 |
|
| 2/5/2020 |
| 2/18/2020 |
| 2/28/2020 |
Total declared in 2020 |
| $ | 2.40 |
|
|
|
|
|
|
|
Stock Repurchase Program
On March 5, 2020,11, 2021, the Board of Directors of the Company approved a $10 million stock repurchase program (the “Stock Repurchase Program”). for an approximately one-year period, effective March 11, 2021 and terminating on March 31, 2022. Under this repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise subject to any law or agreement to which we are party including any restrictions under the 1940 Act and in the indenture for our 4.875% Notes Due 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This Stock Repurchase Program may be suspended or discontinued at any time. On March 11, 2021,8, 2022, the Board of Directors of the Company authorized a renewed stock repurchase program of up to $10 million (the “Renewed Stock Repurchase Program”) for an approximately one-year period, effective March 11, 20218, 2022 and terminating on March 31, 2022.2023. The terms and conditions of the Renewed Stock Repurchase Program are substantially similar to the prior Stock Repurchase Program. The Renewed Stock Repurchase Program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share.
There were no share repurchases during the three months ended September 30, 2022 under the Renewed Stock Repurchase Program. During the third quarter of 2021,nine months ended September 30, 2022, the Company repurchased 59,659 of its129,617 shares under the Renewed Stock Repurchase program at an aggregate cost of approximately $1.4$3.0 million. There were no share repurchases during the first quarter of 2021. During the three and nine months ended September 30, 2021, , the Company repurchased 59,659 and 75,377of its shares respectively under the Stock Repurchase Programprogram at an aggregate cost of approximately $1.4 million andmillion. During the nine months ended September 30, 2021, the Company repurchased 75,377 of its shares under the Stock Repurchase program at an aggregate cost of approximately $1.8 million.
OFF-BALANCE SHEET ARRANGEMENTS
From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our balance sheet. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of September 30, 20212022 and December 31, 2020,2021, we had approximately $48.7$54.4 million and $32.9$47.9 million commitments to fund investments, respectively. We may also enter into derivative contracts with off-balance sheet risk in connection with its investing activities.
We have made an aggregate commitment to the BCP Great Lakes PartnershipII Joint Venture of $50 million, subject to certain limitations (including that we are not obligated to fund capital calls if such funding would cause us to be out of compliance with certain provisions of the 1940 Act). As of September 30, 2021 and December 31, 2020,2022 , we had a $6.9$21.7 million and $20.0 million, respectively unfunded commitment to the BCP Great Lakes Partnership, subjectII Joint Venture. As of December 31, 2021, the Company had a $13.0 million unfunded commitment to the limitations noted above.Prior Great Lakes Joint Venture.
CONTRACTUAL OBLIGATIONS
The following table summarizes our contractual cash obligations and other commercial commitments as of September 30, 2021:2022:
|
| Payments Due by Period |
| |||||||||||||||||||||||||||||||||||||
($ in thousands) |
| Payments Due by Period |
| |||||||||||||||||||||||||||||||||||||
Contractual Obligations |
| Total |
|
| Less than |
|
| 2 - 3 years |
|
| 4 - 5 years |
|
| More than |
|
| Total |
|
| Less than |
|
| 2 - 3 years |
|
| 4 - 5 years |
|
| More than |
| ||||||||||
Long-term debt obligations |
| $ | 340,933,596 |
| $ | — |
| $ | 69,070,898 |
| $ | 108,000,000 |
| $ | 163,862,698 |
|
| $ | 368,934 |
|
| $ | — |
|
| $ | — |
|
| $ | 205,071 |
|
| $ | 163,863 |
|
CRITICAL ACCOUNTING POLICIES
The consolidated financial statements are based on the selection and application of critical accounting policies, which require management to make significant estimates and assumptions. Critical accounting policies are those that are both important to the presentation of our financial condition and results of operations and require management’s most difficult, complex, or subjective judgments. Our critical accounting policies are those applicable to the basis of presentation, valuation of investments, and certain revenue recognition matters as discussed below. See Note 2 to our consolidated financial statements, “Significant Accounting Policies — Investments” contained elsewhere herein.herein.
Valuation of Portfolio Investments
The most significant estimate inherent in the preparation of our consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded.
59
Value, as defined in Section 2(a)(41) of 1940 Act, is (1) the market price for those securities for which a market quotation is readily available and (2) for all other securities and assets, fair value as determined in good faith by our Board pursuant to procedures approved by our Board. Our valuation policy is intended to provide a consistent basis for determining the fair value of the portfolio based on the nature of the security, the market for the security and other considerations including the financial performance and enterprise value of the portfolio company. Because of the inherent uncertainty of valuation, the Board determined values may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.
Pursuant to ASC 946: Financial Services — Investment Companies (“ASC 946”), we reflect our investments on our balance sheet at their determined fair value with unrealized gains and losses resulting from changes in fair value reflected as a component of unrealized gains or losses on our statements of operations. Fair value is the amount that would be received to sell the investments in an orderly transaction between market participants at the measurement date (i.e., the exit price).
See Note 4 to the consolidated financial statements for the additional information about the level of market observability associated with investments carried at fair value.
We follow the provisions of ASC 820: Fair Value Measurements and Disclosures (“ASC 820: Fair Value”), which among other matters, requires enhanced disclosures about investments that are measured and reported at fair value. This standard defines fair value and establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price observability used in measuring investments at fair value and expands disclosures about assets and liabilities measured at fair value. ASC 820: Fair Value defines “fair value” as 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. This fair value definition focuses on an exit price in the principle, or most advantageous market, and prioritizes, within a measurement of fair value, the use of market-based inputs (which may be weighted or adjusted for relevance, reliability and specific attributes relative to the subject investment) over entity-specific inputs. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Subsequent to the adoption of ASC 820: Fair Value, the FASB has issued various staff positions clarifying the initial standard (see Note 2 to the consolidated financial statements: “Significant Accounting Policies — Investments”).
ASC 820: Fair Value establishes the following three-level hierarchy, based upon the transparency of inputs to the fair value measurement of an asset or liability as of the measurement date:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. We assess of the significance of a particular input to the fair value measurement in its entirety requires judgment, and we consider factors specific to the investment. The majority of our investments are classified as Level III. We evaluate the source of inputs, including any markets in which its investments are trading, in determining fair value. Inputs that are backed by actual transactions, those that are highly correlated to the specific investment being valued and those derived from reliable or knowledgeable sources will tend to have a higher weighting in determining fair value. Our fair value determinations may include factors such as an assessment of each underlying investment, its current and prospective operating and financial performance, consideration of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, performance factors, and other investment or industry specific market data, among other factors.
We have valued our investments, in the absence of observable market prices, using the valuation methodologies described below applied on a consistent basis. For some investments, little market activity may exist; management’s determination of fair value is then based on the best information available in the circumstances, and may incorporate management’s own assumptions and involves a significant degree of management’s judgment.
Our investments in CLO Fund Securities are carried at fair value, which is based either on (i) the present value of the net expected cash inflows for interest income and principal repayments from underlying assets and the cash outflows for interest expense, debt paydown and other fund costs for the CLO Funds which are approaching or past the end of their reinvestment period and therefore are selling assets and/or using principal repayments to pay-down CLO Fund debt, and for which there continue to be net cash distributions to the class of securities we own, or (ii) a discounted cash flow model that utilizes prepayment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow and comparable yields for similar securities or preferred shares to those in which we have invested, or (iii) indicative prices provided by the underwriters or brokers who arrange CLO Funds. We recognize unrealized appreciation or depreciation on our investments in CLO Fund Securities as comparable yields in the market change and/or based on changes in net asset values or estimated cash flows resulting from changes in prepayment or loss assumptions in the underlying collateral pool. As each investment in CLO Fund Securities ages, the expected amount of losses and the expected timing of recognition of such losses in the underlying collateral pool are updated and the revised cash flows are used in determining the fair value of the CLO Fund Securities. We determine the fair value of our investments in CLO Fund Securities on a security-by-security basis.
Our investments in our wholly-owned Asset Manager Affiliates are carried at fair value, which is primarily determined utilizing a discounted cash flow model which incorporates different levels of discount rates depending on the hierarchy of fees earned (including the likelihood of realization of senior, subordinate and incentive fees) and prospective modeled performance (“Discounted Cash Flow”). Such valuation takes into consideration an analysis of comparable asset management companies and a percentage of assets under management. The Asset Manager Affiliates are classified as a Level III investment (as described above). Any change in value from period to period is recognized as net change in unrealized appreciation or depreciation.
We carry investments in joint ventures at fair value based upon the fair value of the investments held by the joint venture.
Fair values of other investments for which market prices are not observable are determined by reference to public market or private transactions or valuations for comparable companies or assets in the relevant asset class and/or industry when such amounts are available. Generally, these valuations are derived by multiplying a key performance metric of the investee company or asset (e.g., EBITDA) by the relevant valuation multiple observed for comparable companies or transactions, adjusted by management for differences between the investment and the referenced comparable. Such investments may also be valued at cost for a period of time after an acquisition as the
60
best indicator of fair value. If the fair value of such investments cannot be valued by reference to observable valuation measures for comparable companies, then the primary analytical method used to estimate the fair value is a discounted cash flow method and/or cap rate analysis. A sensitivity analysis is applied to the estimated future cash flows using various factors depending on the investment, including assumed growth rates (in cash flows), capitalization rates (for determining terminal values) and appropriate discount rates to determine a range of reasonable values or to compute projected return on investment.
For bond rated note tranches of CLO Fund securities (those above the junior class) without transactions to support a fair value for the specific CLO Fund and tranche, fair value is based on discounting estimated bond payments at current market yields, which may reflect the adjusted yield on the leveraged loan index for similarly rated tranches, as well as prices for similar tranches for other CLO Funds and also other factors such as indicative prices provided by underwriters or brokers who arrange CLO Funds, and the default and recovery rates of underlying assets in the CLO Fund, as may be applicable. Such model assumptions may vary and incorporate adjustments for risk premiums and CLO Fund specific attributes.
We derive fair value for our illiquid loan investments that do not have indicative fair values based upon active trades primarily by using the Income Approach, and also consider recent loan amendments or other activity specific to the subject asset as described above. Other significant assumptions, such as coupon and maturity, are asset-specific and are noted for each investment in the Schedules of Investments.
The determination of fair value using this methodology takes into consideration a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance and financing transactions subsequent to the acquisition of the investment. This valuation methodology involves a significant degree of our judgment.
Our Board may consider other methods of valuation to determine the fair value of investments as appropriate in conformity with GAAP.
Interest Income
Interest income, including amortization of premium and accretion of discount and accrual payment-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. We generally place a loan on non-accrual status and cease recognizing interest income on such loan or security when a loan or security becomes 90 days or more past due or if we otherwise do not expect the debtor to be able to service its debt obligations. For investments with PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible (i.e. via a partial or full non-accrual). Loans which are on partial or full non-accrual remain in such status until the borrower has demonstrated the ability and intent to pay contractual amounts due or such loans become current. As of September 30, 2021, six2022, three of our investments were on non-accrual status.
Investment Income on CLO Fund Securities
We receive distributions from our investments in the most junior class of securities of CLO Funds (typically preferred shares or subordinated securities). Our CLO Fund junior class securities are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the LIBOR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior note holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted from the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and distributions to us can vary significantly. In addition, the failure of CLO Funds in which we invest to comply with certain financial covenants may lead to the temporary suspension or deferral of cash distributions to us.
GAAP-basis investment income on CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from both the tax-basis investment income and from the cash distributions actually received by us during the period. For U.S. tax purposes, these CLO equity investments are treated as PFICs. Taxable income is provided on a PFIC statement, where income and capital gains are determined based on the U.S. shareholder's proportionate ownership of the PFIC.
For non-junior class CLO Fund Securities interest is earned at a fixed spread relative to the LIBOR index.
Payment in Kind Interest
We may have loans in our portfolio that contain a PIK provision. PIK interest, computed at the contractual rate specified in each loan agreement, is added to the principal balance of the loan and recorded as interest income. To maintain our RIC status, this non-cash source of income must be distributed to stockholders in the form of cash dividends, even though we have not yet collected any cash.
Fee Income
Fee income includes fees, if any, for due diligence, structuring, commitment and facility fees, and fees, if any, for transaction services and management services rendered by us to portfolio companies and other third parties. Commitment and facility fees are generally recognized as income over the life of the underlying loan, whereas due diligence, structuring, transaction service and management service fees are generally recognized as income when the services are rendered.
Management Compensation
As a result of the Closing we will no longer issue stock options or restricted stock under the Company’s Equity Incentive Plan or the 2008 Non-Employee Director Plan. The 1940 Act does not permit externally managed investment companies and BDCs to issue or have outstanding options or restricted stock granted to directors and employees. Immediately prior to the Closing, by virtue of the Externalization and subject to the execution of an option cancellation agreement, each option to purchase shares of our common stock granted under our Non-Employee Director Plan that was outstanding immediately prior to the Externalization (each, a “Company Stock Option”) was cancelled in exchange for the payment in cash to the holder thereof.
Immediately prior to the Closing, each restricted share of our (the “Company Restricted Share”) outstanding and not previously forfeited under the Company’s Equity Incentive Plan and the Company’s Non-Employee Director Plan became fully vested, all restrictions with respect to such Company Restricted Shares lapsed, and the holders of such Company Restricted Shares became entitled to receive a pro rata share of the payment made to stockholders in connection with the Externalization.
United States Federal Income Taxes
We have elected to be treated as a RIC and intend to continue to qualify for the tax treatment applicable to RICs under Subchapter M of the Code and, among other things, intendsintend to make the required distributions to our stockholders as specified therein. In order to qualify for tax treatment as a RIC, the Company is required to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each year. Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a 4% excise tax on such income, to the extent required.
Distributions to Shareholders
The amount of our declared distributions, as evaluated by management and approved by our Board, is based primarily on our evaluation of net investment income and distributable taxable income.
On November 3, 2021, our Board declared a cash distribution of $0.62 per share of common stock. The distribution is payable on November 30, 2021 to stockholders of record at the close of business as of November 15, 2021.
The following table sets forth the quarterly distributions paid by us for the 2021, 2020 and 2019 calendar years.
|
| Distribution 2 |
|
| Declaration |
| Record |
| Pay Date | |
2021: |
|
|
|
|
|
|
|
|
| |
Third quarter |
| $ | 0.60 |
|
| 8/4/2021 |
| 8/17/2021 |
| 8/31/2021 |
Second quarter |
| $ | 0.60 |
|
| 5/6/2021 |
| 5/19/2021 |
| 6/1/2021 |
First quarter |
|
| 0.60 |
|
| 2/12/2021 |
| 2/22/2021 |
| 3/2/2021 |
Total declared in 2021 |
| $ | 1.80 |
|
|
|
|
|
|
|
2020: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.60 |
|
| 10/16/2020 |
| 10/26/2020 |
| 11/27/2020 |
Third quarter |
|
| 0.60 |
|
| 8/5/2020 |
| 8/17/2020 |
| 8/28/2020 |
Second quarter |
|
| 0.60 |
|
| 3/17/2020 |
| 5/7/2020 |
| 5/27/2020 |
First quarter |
|
| 0.60 |
|
| 2/5/2020 |
| 2/18/2020 |
| 2/28/2020 |
Total declared in 2020 |
| $ | 2.40 |
|
|
|
|
|
|
|
2019: |
|
|
|
|
|
|
|
|
| |
Fourth quarter |
| $ | 0.60 |
|
| 11/5/2019 |
| 11/15/2019 |
| 11/29/2019 |
Third quarter |
|
| 0.60 |
|
| 8/5/2019 |
| 8/12/2019 |
| 8/29/2019 |
Second quarter |
|
| 1.00 |
|
| 3/20/2019 |
| 4/5/2019 |
| 4/26/2019 |
First quarter |
|
| 1.00 |
|
| 12/12/2018 | 1 | 1/7/2019 |
| 1/31/2019 |
Total declared in 2019 |
| $ | 3.20 |
|
|
|
|
|
|
|
2 The Company completed a Reverse Stock Split of 10 to 1 effective August 26, 2021, the common stock and net asset value have been adjusted retroactively to reflect the split.
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Our business activities contain elements of market risks. We consider our principal market risks to be fluctuations in interest rates and the valuations of our investment portfolio. Managing these risks is essential to our business. Accordingly, we have systems and procedures designed to identify and analyze our risks, to establish appropriate policies and thresholds and to continually monitor these risks and thresholds by means of administrative and information technology systems and other policies and processes.
Interest Rate Risk
Interest rate risk is defined as the sensitivity of our current and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between our assets and liabilities and the effect that interest rates may have on our cash flows. Changes in the general level of interest rates can affect our net interest
61
income, which is the difference between the interest income earned on interest earning assets and our interest expense incurred in connection with our interest-bearing debt and liabilities. Changes in interest rates can also affect, among other things, our ability to acquire and originate loans and securities and the value of our investment portfolio.
Our investment income is affected by fluctuations in various interest rates, including LIBOR and prime rates. As of September 30, 2021,2022 , approximately 86.9%89.3% of our Debt Securities Portfolio were either floating rate with a spread to an interest rate index such as LIBOR or the prime rate. 75.5%74.8% of these floating rate loans contain LIBOR floors ranging between 0.50% and 2.25%2.00%. We generally expect that future portfolio investments will predominately be floating rate investments. As of September 30, 2021,2022, we had $335.4$368.9 million (par value) of borrowings outstanding at a current weighted average interest rate of 3.2%5.0%, of which $108$108.0 million par value had a fixed rate and $232.9$260.9 million par value has a floating rate.
Because we borrow money to make investments, our net investment income is dependent upon the difference between our borrowing rate and the rate we earn on the invested proceeds borrowed. In periods of rising or lowering interest rates, the cost of the portion of our debt associated with our fixed rate borrowings would remain the same, while the interest rate on borrowings under the Revolving Credit Facility would fluctuate with changes in interest rates.
Generally, we would expect that an increase in the base rate index for our floating rate investment assets would increase our gross investment income and that a decrease in the base rate index for such assets would decrease our gross investment income (in either case, such increase/decrease may be limited by interest rate floors/minimums for certain investment assets).
We have analyzed the potential impact of changes in interest rates on interest income net of interest expense. Assuming that our balance sheet at September 30, 20212022 was to remain constant and no actions were taken to alter the existing interest rate sensitivity, the table below illustrates the impact on net investment income on our Debt Securities Portfolio for various hypothetical increases in interest rates:
|
| Impact on net investment income from |
|
| Impact on net investment income from |
| ||||||||||||||||||
|
| 1% |
|
| 2% |
|
| 3% |
| |||||||||||||||
($ in thousands) |
| 1% |
|
| 2% |
|
| 3% |
| |||||||||||||||
Increase in interest rate |
|
| (1,490,326 | ) |
| 386,545 |
| 2,237,103 |
|
| $ | 2,100 |
|
| $ | 4,029 |
|
| $ | 5,957 |
| |||
Decrease in interest rate |
|
| 52,554 |
|
| (78,182 | ) |
| (208,918 | ) |
| $ | 1,340 |
|
| $ | (561 | ) |
| $ | (2,493 | ) |
As shown above, net investment income assuming a 1% increase in interest rates would decreaseincrease by approximately $1.5$2.1 million on an annualized basis. If the increase in rates was more significant, such as 2% or 3%, the net effect on net investment income would be an increase of approximately $387 thousand$4.0 million and $2.2$6.0 million, respectively.
On an annualized basis, a decrease in interest rates of 1% would result in an increase in net investment income of approximately $53 thousand.$1.3 million. A decrease in interest rates of 2% and 3% would result in aan decrease in net investment income of approximately $78 thousand$0.6 million and $209 thousand,$2.5 million, respectively. The effect on net investment income from declines in interest rates impacted by interest rate floors on certain of our floating rate investments, as there is no floor on our floating rate debt facility and the 2018-2 Secured Notes.
Although management believes that this measure is indicative of sensitivity to interest rate changes on our Debt Securities Portfolio, it does not adjust for potential changes in credit quality, size and composition of the assets on the balance sheet and other business developments that could affect a net change in assets resulting from operations or net income. Accordingly, no assurances can be given that actual results would not materially differ from the potential outcome simulated by this estimate.
Portfolio Valuation
We carry our investments at fair value, as determined in good faith by our Board pursuant to a valuation methodology approved by our Board. Investments for which market quotations are generally readily available are generally valued at such market quotations. Investments for which there is not a readily available market value are valued at fair value as determined in good faith by our Board
under a valuation policy and consistently applied valuation process. However, due to the inherent uncertainty of determining the fair value of investments that cannot be marked to market, the fair value of our investments may differ materially from the values that would have been used had a ready market existed for such investments. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the value realized on these investments to be different than the valuations that are assigned. The types of factors that we may take into account in fair value pricing of our investments include, as relevant, the nature and realizable value of any collateral, third party valuations, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly-traded securities, recent sales of or offers to buy comparable companies, and other relevant factors.
The Company has engaged an independent valuation firm to provide third party valuation consulting services to the Board. Each quarter, the independent valuation firm will perform third party valuations on the Company’s material investments in illiquid securities such that they are reviewed at least once during a trailing 12-month period. These third-party valuation estimates were considered as one of the relevant data inputs in the Company’s determination of fair value. The Company intends to continue to engage an independent valuation firm in the future to provide certain valuation services, including the review of certain portfolio assets, as part of the quarterly and annual year-end valuation process.
Item 4.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 5.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, under the supervision and with the participation of various members of management, including its Chief Executive Officer (“CEO”) and its Chief Financial Officer (“CFO”), has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Acts recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the periodquarter ended September 30, 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
62
PART II. Other Information
Item 1.Legal Proceedings
The Company is not currently a party to any material legal proceedings except as set forth below.
HCAP and certain of its officer and directors as well as JMP Group LLC were named as defendants in two putative stockholder class action lawsuits, both filed in the Court of Chancery in the State of Delaware, captioned Stewart Thompson v. Joseph Jolson, et al., Case No. 2021-0164 and Ronald Tornese v. Joseph Jolson, et al., Case No. 2021-0167 (the “Delaware Actions”). The complaints in the Delaware Actions allege certain breaches of fiduciary duties against the defendants as well as aiding and abetting claims against JMP Group LLC and HCAP’s Chief Executive Officer concerning HCAP’s proposed merger with the Company and Acquisition Sub that resulted in the merger with and into the Company. In addition, HCAP and certain of its officer and directors, among others, were named as defendants in stockholder actions, filed in the Supreme Court of the State of New York, captioned Greg Ramanauskas v. Harvest Capital Credit Corp, et al., Case No. 651524/2021, alleging certain breaches of fiduciary duties against individual defendants and aiding and abetting claims against HCAP, the Company, Acquisition Sub, and the Adviser (the “New York State Action”) and in the Eastern District of New York, captioned Kyle Kruchok v. Harvest Capital Credit Corp., et al., Case No. 1:21-cv-01573, alleging violations of Section 14(a) of the Exchange Act against HCAP and certain officers and directors, and Section 20(a) of the Exchange Act against individual defendants (the “New York Federal Action”) (collectively with the Delaware Actions, the “Litigations”).
The complaints in the Delaware Actions and the New York State Action generally allege that the defendants breached their fiduciary duties in connection with the proposed merger and caused to be filed with the SEC an allegedly materially incomplete and misleading registration statement on Form N-14 relating to the proposed merger. The complaint in the New York Federal Action generally alleges that the defendants made materially false and misleading statements and/or omissions in the registration statement on Form N-14 relating to the proposed merger. The plaintiffs in the Litigations asked the court to enjoin the proposed merger, and to award attorneys’ fees and costs, among other relief. Further, the plaintiffs in the Delaware Actions ask the court to direct the defendants to account to plaintiffs and the putative class for all damages suffered as a result of the alleged wrongdoing. The plaintiffs in the New York Federal Action also ask for rescissory damages.
On April 19, 2021, plaintiffs in the Delaware Action filed a motion for expedited proceedings, which was subsequently withdrawn. On June 9, 2021, HCAP merged with and into the Company with the Company as the surviving corporation. As a result, the Company became responsible for any claims against HCAP as well as for any advancement and/or indemnification owed to the former officers and directors of HCAP. On June 17, 2021, theor about May 10, 2022, plaintiffs in the New York Federal ActionDelaware Actions filed a notice of voluntary dismissal.consolidated amended complaint seeking damages against defendants for allegedly breaching their fiduciary duties in connection with the proposed merger. On or about May 31, 2022, defendants moved to dismiss the Delaware action.
The Delaware Actions as well as the New York State Action remain at the early stage. We and the former HCAP officers and directors intend to defend ourselves vigorously against the allegations in the aforementioned actions to the extent they proceed. Neither the outcome of the lawsuits nor an estimate of any reasonably possible losses is determinable at this time. While we and HCAP maintain directors’ and officers’ insurance that provides coverage for claims such as those alleged in the complaints, an adverse judgment for monetary damages in excess of or outside of available insurance coverage could have a material adverse effect on our operations and liquidity.
Item 1A.Risk Factors
Other than the items noted below, there have been no material changes during fiscal 2021 to the risk factors that were included in our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
Risks Relating to the 4.875% Notes due 2026
The 4.875% Notes due 2026 are unsecured and therefore are effectively subordinated to any secured indebtedness we may incur.
The 4.875% Notes due 2026 are not secured by any of our assets or any of the assets of our subsidiaries. As a result, the 4.875% Notes due 2026 are effectively subordinated to any secured indebtedness we or our subsidiaries have currently incurred or that we or our subsidiaries may incur in the future (or any indebtedness that is initially unsecured in respect of which we subsequently grant security) to the extent of the value of the assets securing such indebtedness. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors, including the holders of the 4.875% Notes due 2026.
The 4.875% Notes due 2026 will be subordinated structurally to the indebtedness and other liabilities of our subsidiaries.
The 4.875% Notes due 2026 are obligations exclusively of Portman Ridge Finance Corporation and not of any of our subsidiaries. None of our subsidiaries are guarantors of the 4.875% Notes due 2026, and the 4.875% Notes due 2026 will not be required to be guaranteed by any subsidiaries we may acquire or create in the future. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors, including trade creditors, of our subsidiaries will have priority over
our claims (and therefore the claims of our creditors, including holders of the 4.875% Notes due 2026) with respect to the assets of such subsidiaries. Even if we were recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the 4.875% Notes due 2026 are subordinated structurally to all indebtedness and other liabilities of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise. All of the existing indebtedness of our subsidiaries is structurally senior to the 4.875% Notes due 2026. In addition, our subsidiaries may incur substantial additional indebtedness in the future, all of which would be structurally senior to the 4.875% Notes due 2026.
There is currently no public market for the 4.875% Notes due 2026. If an active trading market for the 4.875% Notes due 2026 does not develop or is not maintained, holders of the 4.875% Notes due 2026 may not be able to sell them.
The 4.875% Notes due 2026 are a new issue of debt securities for which there currently is no trading market. We do not currently intend to apply for listing of the 4.875% Notes due 2026 on any securities exchange or for quotation of the 4.875% Notes due 2026 on any automated dealer quotation system. If no active trading market develops, you may not be able to resell your 4.875% Notes due 2026 at their fair market value or at all. If the 4.875% Notes due 2026 are traded after their initial issuance, they may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors. Accordingly, we cannot assure you that an active and liquid trading market will develop or continue for the 4.875% Notes due 2026, that you will be able to sell your 4.875% Notes due 2026 at a particular time or that the price you receive when you sell will be favorable. To the extent an active trading market does not develop, the liquidity and trading price for the 4.875% Notes due 2026 may be harmed. Accordingly, you may be required to bear the financial risk of an investment in the 4.875% Notes due 2026 for an indefinite period of time.
There are significant restrictions on the ability to transfer or resell the 4.875% Notes due 2026.
The 4.875% Notes due 2026 have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). Accordingly, the 4.875% Notes due 2026 may only be offered or sold in transactions that are not subject to, or that are otherwise exempt from, the registration requirements of the Securities Act and applicable state securities laws or pursuant to an effective registration statement. Therefore, you may transfer or resell the 4.875% Notes due 2026 in the U.S. only in a transaction exempt from the registration requirements of Securities Act and applicable state securities laws or pursuant to an effective registration statement, and you may be required to bear the risk of your investment until the maturity of the 4.875% Notes due 2026.
Although under the registration rights agreement we are required to consummate an offer to exchange the 4.875% Notes due 2026 for substantially equivalent registered securities or to register the resale of the 4.875% Notes due 2026, until the exchange offer is consummated or such a registration statement has been declared effective, as the case may be, holders of the 4.875% Notes due 2026 may not offer or sell the 4.875% Notes due 2026 except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws or pursuant to an effective registration statement. The SEC, however, has broad discretion to determine whether any registration statement will be declared effective and may delay or deny effectiveness of any such registration statement filed by us for a variety of reasons. Our ability to have declared effective by the SEC a registration statement pertaining to the registered exchange offer on a timely basis will depend upon our ability to resolve any issues that may be raised by the SEC. We have filed a registration statement with respect to the 4.875% Notes due 2026, but no assurance can be given as to when a registration statement with respect to the 4.875% Notes due 2026 will become effective, if at all. Failure to have the registration statement become effective could adversely affect the liquidity and price of the 4.875% Notes due 2026.
Our current indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under the 4.875% Notes due 2026 and our other debt.
The use of debt could have significant consequences on our future operations, including:
Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under the 4.875% Notes due 2026 and our other debt.
Our ability to meet our payment and other obligations under our financing arrangements depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot assure you that our business will generate cash flow from operations, or that future borrowings will be available to us under our financing arrangements or otherwise, in an amount sufficient to enable us to meet our payment obligations under the 4.875% Notes due 2026 and our other debt and to fund other liquidity needs. If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, including the 4.875% Notes due 2026, sell assets, reduce or delay capital investments, or seek to raise additional capital. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the 4.875% Notes due 2026 and our other debt.
A downgrade, suspension or withdrawal of the credit rating assigned by a rating agency to us or the 4.875% Notes due 2026 could cause the liquidity or market value of the 4.875% Notes due 2026 to decline significantly.
Our credit ratings are an assessment by rating agencies of our ability to pay our debts when due. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of the 4.875% Notes due 2026. These credit ratings may not reflect the potential impact of risks relating to the structure or marketing of the 4.875% Notes due 2026. Credit ratings are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion.
The 4.875% Notes due 2026 are rated by Egan-Jones Ratings Company (“EJR”). There can be no assurance that EJR’s credit rating will remain for any given period of time or that such credit rating will not be lowered or withdrawn entirely by EJR if in its judgment future circumstances relating to the basis of the credit rating, such as adverse changes in our business, financial condition and results of operations, so warrant.
The indenture governing the 4.875% Notes due 2026 contains limited protection for holders of the 4.875% Notes due 2026.
The indenture governing the 4.875% Notes due 2026 offers limited protection to holders of the 4.875% Notes due 2026. The terms of the indenture and the 4.875% Notes due 2026 do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on your investment in the 4.875% Notes due 2026. In particular, the terms of the indenture and the 4.875% Notes due 2026 do not place any restrictions on our or our subsidiaries’ ability to:
In addition, the terms of the indenture and the 4.875% Notes due 2026 do not protect holders of the 4.875% Notes due 2026 in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they will not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow or liquidity other than as described above.
Our ability to recapitalize, incur additional debt and take a number of other actions will not be limited by the terms of the 4.875% Notes due 2026 and may have important consequences for you as a holder of the 4.875% Notes due 2026, including making it more difficult for us to satisfy our obligations with respect to the 4.875% Notes due 2026 or negatively affecting the trading value of the 4.875% Notes due 2026.
Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the 4.875% Notes due 2026, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the 4.875% Notes due 2026.
We may not be able to repurchase the 4.875% Notes due 2026 upon a Change of Control Repurchase Event.
We may not be able to repurchase the 4.875% Notes due 2026 upon a Change of Control Repurchase Event (as defined in the indenture governing the 4.875% Notes due 2026) because we may not have sufficient funds. Upon a Change of Control Repurchase Event, holders of the 4.875% Notes due 2026 may require us to repurchase for cash some or all of the 4.875% Notes due 2026 at a repurchase price equal to 100% of the aggregate principal amount of the 4.875% Notes due 2026 being repurchased, plus accrued and unpaid interest to, but not including, the repurchase date. Our failure to purchase such tendered 4.875% Notes due 2026 upon the occurrence of such Change of Control Repurchase Event would cause an event of default under the indenture governing the 4.875% Notes due 2026 and may cause a cross-default under the agreements governing certain of our other indebtedness, which may result in the acceleration of such indebtedness requiring us to repay that indebtedness immediately. If a Change of Control Repurchase Event were to occur, we may not have sufficient funds to repay any such accelerated indebtedness and/or to make the required repurchase of the 4.875% Notes due 2026.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Other than the shares issued pursuant to our dividend reinvestment plan (“DRIP”),we did not engage in any sales of unregistered securities during the nine months ended September 30, 2021,2022, except as previously reported by us on our current reports on Form 8-K. We issued a total of 18,86838,835 shares of common stock under our dividend reinvestment plan (“DRIP”) during the nine months ended September 30, 2021.2022. This issuance was not subject to the registration requirements of the Securities Act. For the nine months ended September 30, 2021,2022, the aggregate value of the shares of our common stock issued under our DRIP was approximately $444$888 thousand.
The following table sets forth information regarding recent repurchases of shares of our common stock.
|
| Total Number of Shares Purchased (c) |
|
|
|
|
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (a)(c) |
|
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Dollars in Thousands) (a) |
| ||||
March 1-March 31, 2020 |
|
| 12,155 |
|
| $ | 10.10 |
|
|
| 12,155 |
|
| $ | 9,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
April 1-June 30, 2020 |
|
| 25,390 |
|
| $ | 11.20 |
|
|
| 25,390 |
|
| $ | 9,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
July 1-September 30, 2020 |
|
| 35,896 |
|
| $ | 12.70 |
|
|
| 35,896 |
|
| $ | 9,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
October 1-December 31, 2020 |
|
| — |
|
|
|
|
|
| — |
|
| $ | 9,137 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total, December 31, 2020 |
|
| 73,440 |
|
|
|
|
|
| 73,440 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
March 11-March 31, 2021 |
|
| — |
|
|
|
|
|
| — |
|
| $ | 10,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
April 1-June 30, 2021 (b) |
|
| 15,718 |
|
| $ | 24.20 |
|
|
| 15,718 |
|
| $ | 9,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
July 1-September 30, 2021 |
|
| 59,659 |
|
| $ | 24.24 |
|
|
| 59,659 |
|
| $ | - |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total, September 30, 2021 |
|
| 75,377 |
|
|
|
|
|
| 75,377 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
|
| 148,817 |
|
|
|
|
|
| 148,817 |
|
|
|
|
| Total Number of Shares Purchased (2) |
| Average Price |
| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)(2) |
|
| Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Dollars in Thousands) (1) |
| ||||
March 11-March 31, 2021 |
| - |
|
|
|
| - |
|
| $ | 10,000 |
| |
|
|
|
|
|
|
|
|
|
| ||||
April 1-June 30, 2021 |
| 15,718 |
| $ | 24.20 |
|
| 15,718 |
|
| $ | 9,620 |
|
|
|
|
|
|
|
|
|
|
| ||||
July 1-September 30, 2021 |
| 59,659 |
| $ | 24.24 |
|
| 59,659 |
|
| $ | 8,174 |
|
|
|
|
|
|
|
|
|
|
| ||||
October 1-December 31, 2021 |
| - |
|
|
|
| - |
|
| $ | 8,174 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Total, December 31, 2021 |
| 75,377 |
|
|
|
| 75,377 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
March 17-March 31, 2022 |
| 22,990 |
| $ | 23.72 |
|
| 22,990 |
|
| $ | 9,455 |
|
|
|
|
|
|
|
|
|
|
| ||||
April 1-April 30, 2022 |
| 39,014 |
| $ | 23.75 |
|
| 39,014 |
|
| $ | 8,528 |
|
|
|
|
|
|
|
|
|
|
| ||||
May 1-May 31, 2022 |
| 42,426 |
| $ | 22.73 |
|
| 42,426 |
|
| $ | 7,564 |
|
|
|
|
|
|
|
|
|
|
| ||||
June 1-June 30, 2022 |
| 25,187 |
| $ | 22.53 |
|
| 25,187 |
|
| $ | 6,996 |
|
|
|
|
|
|
|
|
|
|
| ||||
July 1-September 30, 2022 |
| - |
|
|
|
| - |
|
| $ | 6,996 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Total, September 30, 2022 |
| 129,617 |
|
|
|
| 129,617 |
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
Total |
| 204,994 |
|
|
|
| 204,994 |
|
|
|
|
63
As permitted by our policies and procedures governing transactions in our securities by our directors, executive officers and other employees, from time to time some of these persons may establish plans or arrangements complying with Rule 10b5-1 under the Exchange Act, and similar plans and arrangements relating to our common stock
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
Not Applicable.
Item 5.Other Information
None.
Item 6.Exhibits
Reference is made to the Exhibit List filed as a part of this report beginning on page E-1. Each of such exhibits is incorporated by reference herein.
64
Exhibit Index
Exhibit Number |
| Description of Document |
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** Submitted herewith.
SIGNATURES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| PORTMAN RIDGE FINANCE CORPORATION | ||
|
|
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Date: November | By |
| /s/ Edward Goldthorpe |
|
|
| Edward Goldthorpe |
|
|
| President and Chief Executive Officer |
|
|
| (Principal Executive Officer) |
Date: November | By |
| /s/ Jason Roos |
|
|
| Jason Roos |
|
|
| Chief Financial Officer |
|
|
| (Principal Financial and Accounting Officer) |
* * * * *
114
65