UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

(Mark One)

x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended SeptemberJune 30, 20212022

 

OR

 

¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to

 

Commission file number: 814-01154

 

 

 

AUDAX CREDIT BDC INC.

(Exact name of registrant as specified in its charter)

 

 

DELAWARE 47-3039124

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

   
101 HUNTINGTON AVENUE  
BOSTON, MASSACHUSETTS 02199
(Address of principal executive office) (Zip Code)

 

(617) 859-1500

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

None.

 

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   x☒     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 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12 b-2 of the Exchange Act.

Large accelerated filer ¨☐ Accelerated filer ¨☐
    
Non-accelerated filer x☒  Smaller reporting company ¨☐
       
Emerging growth company x☐    

 

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 13(a) of the Exchange Act ¨☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨☐     No   x☒

 

The registrant had 39,961,40546,933,008 shares of common stock, par value $0.001 per share, outstanding as of NovemberAugust 11, 2021.2022.

 

 

 

 

AUDAX CREDIT BDC INC.

TABLE OF CONTENTS

PART I.FINANCIAL INFORMATION: 
   
Item 1.Financial Statements 
   
 Statements of Assets and Liabilities as of SeptemberJune 30, 20212022 (unaudited) and December 31, 20202021  2
 Statements of Operations for the three and ninesix months ended SeptemberJune 30, 20212022 (unaudited) and 20202021 (unaudited)3
 Statements of Changes in Net Assets for the ninesix months ended SeptemberJune 30, 20212022 (unaudited) and 20202021 (unaudited)4
 Statements of Cash Flows for the ninesix months ended SeptemberJune 30, 20212022 (unaudited) and 20202021 (unaudited)5
 Schedules of Investments as of SeptemberJune 30, 20212022 (unaudited) and December 31, 202020216
 Notes to Financial Statements (unaudited)16
   
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations37
   
 Overview3837
 Results of Operations4039
 Financial Condition, Liquidity and Capital Resources4241
   
Item 3.Quantitative and Qualitative Disclosures About Market Risk4948
   
Item 4.Controls and Procedures5049
   
PART II.OTHER INFORMATION: 
   
Item 1.Legal Proceedings5150
   
Item 1A.Risk Factors5150
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds52
   
Item 3.Defaults Upon Senior Securities52
   
Item 4.Mine Safety Disclosures52
   
Item 5.Other Information52
   
Item 6.Exhibits52
  
SIGNATURES53

 

 

Audax Credit BDC Inc.

Statements of Assets and Liabilities

September

June 30, 20212022 and December 31, 20202021

(Expressed in U.S. Dollars)

  June 30, 2022   
  (unaudited)  December 31, 2021 
Assets        
Investments, at fair value        
Non-Control/Non-Affiliate investments (Cost of $442,722,579 and $404,292,618, respectively) $436,812,969  $403,054,374 
Cash and cash equivalents  31,727,018   11,058,796 
Interest receivable  1,327,335   1,043,554 
Receivable from bank loan repayment  20,915   26,771 
Other assets  215,000   - 
         
Total assets $470,103,237  $415,183,495 
         
Liabilities        
Accrued expenses and other liabilities $504,937  $326,497 
Fee due to administrator(a)  66,250   66,250 
Fees due to investment advisor, net of waivers(a)  796,713   640,329 
Payable for investments purchased  18,949,316   40,203,085 
Payable for short-term borrowings(b)  35,894,306   - 
Distribution payable  8,739,325   - 
         
Total liabilities $64,950,847  $41,236,161 
Commitments and contingencies(c)        
         
Net Assets        
Common stock, $0.001 par value per share, 100,000,000 shares authorized, 43,696,762 and 39,961,408 shares issued and outstanding, respectively $43,697  $39,961 
Capital in excess of par value  413,668,452   378,672,161 
Total distributable (loss) gain  (8,559,759)  (4,764,788)
Total Net Assets $405,152,390  $373,947,334 
         
Net Asset Value per Share of Common Stock at End of Period $9.27  $9.36 
         
Shares Outstanding  43,696,762   39,961,408 

 

   September 30, 2021  December 31, 2020 
   (unaudited)    
Assets        
Investments, at fair value        
Non-Control/Non-Affiliate investments (Cost of $364,703,003 and $358,990,792, respectively)  $363,441,460 $355,359,843 
Cash and cash equivalents   13,397,892  4,289,122 
Interest receivable   1,065,822  954,012 
Receivable from investments sold   3,714,278  - 
Receivable from bank loan repayment   35,553  - 
Other assets   48,750  - 
         
Total assets  $381,703,755 $360,602,977 
         
Liabilities        
Accrued expenses and other liabilities  $286,122 $316,522 
Fee due to administrator(a)   66,250  66,250 
Fees due to investment advisor, net of waivers(a)   641,794  614,844 
Payable for investments purchased   2,988,750  2,722,500 
         
Total liabilities  $3,982,916 $3,720,116 
Commitments and contingencies(b)        
         
Net Assets        
Common stock, $0.001 par value per share, 100,000,000 shares authorized, $ 39,961 $38,343  39,961,405 and 38,343,580 shares issued and outstanding, respectively        
Capital in excess of par value   378,779,189  363,826,108 
Total distributable earnings   (1,098,311) (6,981,590) 
Total Net Assets  $377,720,839 $356,882,861 
Net Asset Value per Share of Common Stock at End of Period  $9.45  $9.31 
         
Shares Outstanding   39,961,405  38,343,580 

(a)Refer to Note 4-Related Party Transactions for additional information.
(b)Refer to Note 8-Borrowings for additional information.
(c)Refer to Note 9-Commitments and Contingencies for additional information.

 

The accompanying notes are an integral part of these financial statements.

2

2

 

Audax Credit BDC Inc.

Statements of Operations

(Expressed in U.S. Dollars)

(unaudited)

  Three Months Ended  Three Months Ended  Six Months Ended  Six Months Ended 
  June 30, 2022  June 30, 2021  June 30, 2022  June 30, 2021 
Investment Income                
Interest income                
Non-Control/Non-Affiliate $6,062,310  $4,762,471  $11,452,128  $9,531,156 
Other  397   356   781   630 
Total interest income  6,062,707   4,762,827   11,452,909   9,531,786 
Other income                
Non-Control/Non-Affiliate  140,256   15,488   178,374   63,002 
Total income  6,202,963   4,778,315   11,631,283   9,594,788 
                 
Expenses                
Base management fee(a) $1,082,214  $948,730  $2,120,653  $1,862,780 
Incentive fee(a)  747,892   96,455   1,174,214   387,748 
Administrative fee(a)  66,250   66,250   132,500   132,500 
Directors’ fees  56,250   56,250   112,500   112,500 
Professional fees  210,862   144,378   292,537   237,696 
Other expenses  85,257   116,707   164,434   205,930 
Interest expense  95,634   -   136,800   - 
Expenses before waivers from investment adviser and administrator  2,344,359   1,428,770   4,133,638   2,939,154 
Base management fee waivers(a)  (378,775)  (332,055)  (742,229)  (651,972)
Incentive fee waivers(a)  (654,618)  (86,809)  (1,038,308)  (348,973)
Total expenses, net of waivers  1,310,966   1,009,906   2,353,101   1,938,209 
Net Investment Income  4,891,997   3,768,409   9,278,182   7,656,579 
                 
Realized and Unrealized Gain (Loss) on Investments                
Net realized gain (loss) on investments  111,779   (696,642)  337,565   (633,372)
Net change in unrealized (depreciation) appreciation on investments  (3,105,203)  1,149,424   (4,671,366)  2,275,338 
Net realized and unrealized (loss) gain on investments  (2,993,424)  452,782   (4,333,801)  1,641,966 
                 
Net Increase in Net Assets Resulting from Operations $1,898,573  $4,221,191  $4,944,381  $9,298,545 
                 
Basic and Diluted per Share of Common Stock:                
Net investment income $0.11  $0.10  $0.21  $0.20 
Net increase in net assets resulting from operations $0.04  $0.11  $0.11  $0.24 
                 
Weighted average shares of common stock outstanding basic diluted  44,710,073   39,009,531   43,742,436   38,983,776 

 

  Three Months Ended  Three Months Ended  Nine Months Ended  Nine Months Ended 
  September 30, 2021  September 30, 2020  September 30, 2021  September 30, 2020 
Investment Income                
Interest income                
Non-Control/Non-Affiliate $4,924,039  $4,721,470  $14,455,194  $14,885,290 
Other  477   1,058   1,107   31,053 
Total interest income  4,924,516   4,722,528   14,456,301   14,916,343 
Other income                
Non-Control/Non-Affiliate  20,772   14,577   83,774   153,950 
Total income  4,945,288   4,737,105   14,540,075   15,070,293 
                 
Expenses                
Base management fee(a) $947,361  $874,188  $2,810,141  $2,697,570 
Incentive fee(a)  260,092   356,461   647,839   1,641,419 
Administrative fee(a)  66,250   66,250   198,750   198,750 
Directors' fees  56,250   52,500   168,750   157,500 
Professional fees  108,251   132,514   345,947   369,572 
Other expenses  108,702   83,232   314,632   191,422 
                 
Expenses before waivers from investment adviser and administrator  1,546,906   1,565,145   4,486,059   5,256,233 
Base management fee waivers(a)  (331,576)  (305,966)  (983,548)  (944,150)
Incentive fee waivers(a)  (234,083)  (320,815)  (583,056)  (1,437,466)
Total expenses, net of waivers  981,247   938,364   2,919,455   2,874,617 
Net Investment Income  3,964,041   3,798,741   11,620,620   12,195,676 
                 
Realized and Unrealized Gain (Loss) on Investments                
Net realized gain (loss) on investments  183,204   (1,039,704)  (450,168)  (1,043,096)
Net change in unrealized appreciation (depreciation) on investments  94,068   6,436,468   2,369,406   (6,732,122)
Net realized and unrealized gain (loss) on investments  277,272   5,396,764   1,919,238   (7,775,218)
                 
Net Increase in Net Assets Resulting from Operations $4,241,313  $9,195,505  $13,539,858  $4,420,458 
                 
Basic and Diluted per Share of Common Stock:                
Net investment income $0.10  $0.10  $0.30  $0.32 
Net increase in net assets resulting from operations $0.11  $0.24  $0.34  $0.12 
                 
Weighted average shares of common stock outstanding basic diluted  39,909,673   38,265,852   39,295,800   37,528,161 

(a)Refer to Note 4-Related Party Transactions for additional information

 

The accompanying notes are an integral part of these financial statements.

3

Audax Credit BDC Inc.

Statements of Changes in Net Assets

(Expressed in U.S. Dollars)

(unaudited)

  Six Months Ended
June 30, 2022		  Six Months Ended
June 30, 2021		 
Operations        
Net investment income $9,278,182  $7,656,579 
Net realized gain (loss) on investments  337,565   (633,372)
Net change in unrealized (depreciation) appreciation on investments  (4,671,366)  2,275,338 
Net increase in net assets resulting from operations  4,944,381   9,298,545 
         
Distributions:        
Distributions of ordinary income to common stockholders  (8,739,352)  (7,656,579)
Return of capital to common stockholders  -   (145,326)
Total distributions  (8,739,352)  (7,801,905)
         
Capital Share Transactions:        
Issuance of common stock  55,000,000   6,200,000 
Repurchases of common stock  (20,000,000)  - 
Reinvestment of common stock  27   25 
Net increase in net assets from capital share transactions  35,000,027   6,200,025 
         
Net Increase in Net Assets  31,205,056   7,696,665 
         
Net Assets, Beginning of Period  373,947,334   356,882,861 
         
Net Assets, End of Period $405,152,390  $364,579,526 

The accompanying notes are an integral part of these financial statements.

4

Audax Credit BDC Inc.

Statements of Cash Flows

(Expressed in U.S. Dollars)

(unaudited)

  Six Months Ended  Six Months Ended 
  June 30, 2022  June 30, 2021 
Cash flows from operating activities:        
Net increase in net assets resulting from operations $4,944,381  $9,298,545 
Adjustments to reconcile net increase in net assets from operations to net cash (used in) provided by operating activities:        
Net realized (gain) loss on investments  (337,565)  633,372 
Net change in unrealized depreciation (appreciation) on investments  4,671,366   (2,275,338)
Accretion of original issue discount interest and payment-in-kind interest  (371,920)  (380,092)
Increase in receivable from investments sold  -   (229,794)
Increase in interest receivable  (283,781)  (43,595)
Decrease (increase) in receivable from bank loan repayment  5,856   (22,493)
Increase in other assets  (215,000)  (97,500)
Increase in distribution payable  8,739,325   - 
Increase (decrease) in accrued expenses and other liabilities  178,440   (125,942)
Increase in fees due to investment advisor(a)  156,384   11,476 
(Decrease) increase in payable for investments purchased  (21,253,769)  8,614,905 
Investment activity:        
Investments purchased  (74,837,576)  (55,617,977)
Proceeds from investments sold  4,047,932   10,135,008 
Repayment of bank loans  33,069,168   47,805,480 
Total investment activity  (37,720,476)  2,322,511 
         
Net cash (used in) provided by operating activities  (41,486,759)  17,706,055 
         
Cash flows from financing activities:        
Issuance of shares of common stock  55,000,000   6,200,000 
Repurchases of shares of common stock  (20,000,000)  - 
Distributions paid to common stockholders  (8,739,325)  (7,801,880)
Short-term borrowings  35,894,306   - 
         
Net cash provided by (used in) financing activities  62,154,981   (1,601,880)
         
Net increase in cash and cash equivalents  20,668,222   16,104,175 
         
Cash and cash equivalents:        
Cash and cash equivalents, beginning of period  11,058,796   4,289,122 
         
Cash and cash equivalents, end of period $31,727,018  $20,393,297 
         
Supplemental cash flow information        
Interest paid on short-term financing $136,800  $- 
         
Supplemental non-cash information        
Issuance of common shares in connection with dividend reinvestment plan $27  $25 
Payment-in-kind (“PIK”) interest income $69,132  $110,285 

(a)Refer to Note 4-Related Party Transactions for additional information

The accompanying notes are an integral part of these financial statements.

5

3

 

Audax Credit BDC Inc.

StatementsSchedule of Changes in Net AssetsInvestments

As of June 30, 2022

(Expressed in U.S. Dollars)

(unaudited)

  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		 
Operations        
Net investment income $11,620,620  $12,195,676 
Net realized loss on investments  (450,168)  (1,043,096)
Net change in unrealized appreciation (depreciation) on investments  2,369,406   (6,732,122)
Net increase in net assets resulting from operations  13,539,858   4,420,458 
         
Distributions:        
Distributions to common stockholders  (7,656,579)  (8,125,607)
Return of capital to common stockholders  (145,326)  - 
Total distributions  (7,801,905)  (8,125,607)
         
Capital Share Transactions:        
Issuance of common stock  15,100,000   30,000,000 
Reinvestment of common stock  25   26 
Net increase in net assets from capital share transactions  15,100,025   30,000,026 
         
Net Increase in Net Assets  20,837,978   26,294,877 
         
Net Assets, Beginning of Period  356,882,861   331,399,673 
         
Net Assets, End of Period $377,720,839  $357,694,550 

(unaudited)

The accompanying notes are an integral part of these financial statements.

 

4
Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (107.2%)(g)(h):            
               
Healthcare & Pharmaceuticals              
Advarra, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 7/9/26 6/26/2019 $4,124,436  $4,098,846  $4,124,432 
Radiology Partners, Senior Secured Term B Loan (First Lien), 4.25% (LIBOR + 4.25%), maturity 7/9/25 (i) 6/28/2018  4,215,792   4,339,776   3,880,055 
Young, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 11/7/24 11/6/2017  3,735,868   3,729,299   3,698,509 
American Vision Partners, Unitranche, 6.50% (LIBOR + 5.75%), maturity 9/30/27 (j) (k) 9/22/2021  3,740,843   3,680,945   3,681,371 
InHealth Medical Alliance, Senior Secured Initial Term Loan, 8.29% (LIBOR + 6.00%), maturity 6/28/28 6/25/2021  3,473,750   3,443,060   3,360,853 
PharMedQuest, Unitranche, 6.75% (LIBOR + 5.75%), maturity 10/31/24 (j) 11/6/2019  3,285,898   3,260,151   3,285,898 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 3/14/25 5/30/2018  3,230,629   3,241,922   3,230,629 
Waystar, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 10/22/26 9/19/2019  2,934,962   2,928,498   2,912,950 
Advancing Eyecare, Senior Secured Initial Term Loan, 6.25% (SOFR + 5.75%), maturity 6/29/29 (i) 5/27/2022  2,500,000   2,437,500   2,437,500 
Zelis RedCard, Senior Secured Term B-1 Loan, 3.50% (LIBOR + 3.50%), maturity 9/30/26 (i) 9/27/2019  2,408,415   2,399,209   2,313,859 
Premise Health, Senior Secured Initial Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 7/10/25 8/15/2018  2,270,804   2,275,385   2,270,804 
Soliant, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 3/31/28 3/26/2021  2,115,249   2,099,513   2,115,249 
nThrive, Senior Secured Initial Loan (Second Lien), 9.04% (LIBOR + 6.75%), maturity 12/17/29 11/19/2021  2,000,000   1,973,000   1,990,000 
CPS, Unitranche, 5.75% (LIBOR + 5.75%), maturity 5/27/28 (j) 5/18/2022  1,958,442   1,953,524   1,958,442 
Gastro Health, Senior Secured Initial Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 7/3/28 7/2/2021  1,984,763   1,975,763   1,954,991 
Upstream Rehabilitation, Senior Secured August 2021 Incremental Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 11/20/26 10/24/2019  1,961,438   1,958,839   1,946,727 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 12/22/25 12/19/2018  1,930,000   1,920,338   1,881,750 
Advanced Diabetes Supply, Senior Secured First Incremental Term Loan, 7.54% (LIBOR + 5.25%), maturity 12/30/27 7/13/2021  1,862,975   1,846,440   1,862,975 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.50% (LIBOR + 3.50%), maturity 7/24/26 (i) 7/23/2019  1,945,000   1,940,367   1,837,787 
Blue Cloud, Unitranche, 6.04% (SOFR + 5.00%), maturity 1/21/28 12/13/2021  1,496,250   1,474,797   1,488,769 
Mission Veterinary Partners, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 4/27/28 12/15/2021  1,488,750   1,475,284   1,488,750 
Therapy Brands, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 5/18/28 5/12/2021  1,488,750   1,482,270   1,481,306 
Quantum Health, Senior Secured Amendment No. 1 Refinancing Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 12/22/27 12/18/2020  1,485,000   1,465,155   1,477,575 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (LIBOR + 4.50%), maturity 12/22/27 (i) 11/23/2020  1,481,250   1,461,540   1,427,108 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 5/1/24 1/10/2019  1,149,819   1,147,874   1,112,450 
Solis Mammography, Senior Secured Initial Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 4/17/28 4/1/2021  1,075,833   1,067,373   1,065,075 
Ivy Rehab, Senior Secured Initial Term Loan (First Lien), 5.79% (SOFR + 4.75%), maturity 2/17/29 3/11/2022  1,019,608   997,784   1,011,961 
Micro Merchant Systems, Unitranche, 6.50% (LIBOR + 5.75%), maturity 12/14/27 (j) 3/2/2022  997,500   986,881   995,006 
nThrive, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 12/18/28 11/19/2021  997,500   993,000   992,513 
Wedgewood Pharmacy, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 3/31/28 2/24/2021  992,500   983,770   992,500 
Solis Mammography, Senior Secured Initial Term Loan (Second Lien), 10.29% (LIBOR + 8.00%), maturity 4/16/29 4/1/2021  1,000,000   987,040   990,000 
Allied Benefit Systems, Senior Secured Initial Term B Loan, 6.79% (LIBOR + 4.50%), maturity 11/18/26 10/21/2020  985,000   973,827   982,538 
CareCentrix, Senior Secured Initial Term Loan, 6.79% (LIBOR + 4.50%), maturity 4/3/25 4/2/2018  961,025   958,724   953,817 
Alcami, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 7/14/25 7/12/2018  962,500   960,038   931,219 
Forefront, Senior Secured Closing Date Term Loan, 5.29% (SOFR + 4.25%), maturity 4/2/29 3/23/2022  867,402   850,054   860,896 
Epic Staffing Group, Senior Secured Initial Term Loan, 6.50% (SOFR + 6.00%), maturity 6/28/29 (i) 6/27/2022  825,581   776,047   776,047 
UDG, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (LIBOR + 4.25%), maturity 8/19/28 (l) 8/6/2021  631,875   626,273   627,136 
ImageFirst, Senior Secured Initial Term Loan, 6.79% (LIBOR + 4.50%), maturity 4/27/28 4/26/2021  607,841   605,350   603,282 
AccentCare, Senior Secured 2021 Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 6/22/26 6/15/2021  495,000   495,000   490,050 
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 4.25%), maturity 8/31/26 (i) 8/2/2019  524,006   520,663   479,228 
RMP & MedA/Rx, Senior Secured Term Loan, 6.79% (LIBOR + 4.50%), maturity 2/6/25 3/22/2021  478,125   473,841   476,930 
Western Dental, Senior Secured Incremental Term Loan, 6.00% (LIBOR + 5.25%), maturity 8/18/28 (i) 5/27/2022  500,000   490,000   472,030 
MedRisk, Senior Secured Initial Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 5/10/28 (i) 4/1/2021  496,250   491,885   471,535 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (LIBOR + 4.00%), maturity 7/24/26 (i) 10/1/2020  493,763   489,965   466,545 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 2/6/25 2/27/2017  408,523   408,438   407,502 
Paradigm Oral Health, Senior Secured Delayed Draw Term Loan, 5.79% (SOFR + 4.75%), maturity 7/9/26 4/11/2022  303,683   293,957   301,406 
CPS, Senior Secured Revolving Credit Loan, 5.75% (LIBOR + 5.75%), maturity 5/27/28 (j) 5/18/2022  -   (714)  - 
Paradigm Oral Health, Senior Secured Revolving Loan, 5.79% (SOFR + 4.75%), maturity 7/9/26 4/11/2022  -   (1,111)  - 
Ivy Rehab, Senior Secured Revolving Credit (First Lien), 5.79% (SOFR + 4.75%), maturity 3/15/28 3/11/2022  -   (3,367)  - 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 7/9/24 6/26/2019  -   (7,619)  - 
               
Services: Business              
LegalShield, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 3.75%), maturity 12/15/28 (i) (k) 12/7/2021  4,488,750   4,448,250   4,297,326 
InnovateMR, Unitranche, 6.75% (LIBOR + 5.75%), maturity 1/20/28 (i) (j) 12/16/2021  4,226,065   4,152,776   4,163,690 
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (LIBOR + 5.00%), maturity 9/23/25 (k) 9/26/2019  3,890,000   3,866,973   3,890,000 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 4.25%), maturity 10/11/25 (k) 10/5/2018  3,860,000   3,857,320   3,860,000 
Eliassen, Unitranche, 6.79% (SOFR + 5.75%), maturity 4/14/28 3/31/2022  3,259,259   3,206,319   3,242,963 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.25% (LIBOR + 3.25%), maturity 8/1/25 (i) 8/14/2018  3,095,178   3,082,402   3,095,178 
Discovery Education, Unitranche, 6.50% (SOFR + 5.75%), maturity 3/10/29 (k) 3/25/2022  3,000,000   2,949,959   2,977,500 
Fleetwash, Senior Secured Incremental Term Loan, 7.04% (LIBOR + 4.75%), maturity 10/1/24 9/25/2018  2,888,175   2,874,731   2,859,293 
CoolSys, Senior Secured Closing Date Initial Term Loan, 7.04% (LIBOR + 4.75%), maturity 8/11/28 8/4/2021  2,577,326   2,549,779   2,548,331 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 10/29/27 10/23/2020  2,417,703   2,397,661   2,399,570 
The Facilities Group, Unitranche, 8.04% (LIBOR + 5.75%), maturity 11/30/27 12/10/2021  2,351,163   2,329,795   2,339,407 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (LIBOR + 3.75%), maturity 4/9/27 (i) 3/6/2020  2,450,000   2,432,834   2,338,613 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (LIBOR + 4.00%), maturity 2/10/25 (i) 2/6/2018  2,310,869   2,308,473   2,310,869 
TRC Companies, Senior Secured Initial Term Loan (Second Lien), 9.04% (LIBOR + 6.75%), maturity 12/7/29 11/19/2021  2,000,000   1,982,000   1,985,000 
Veregy, Senior Secured Initial Term Loan, 8.29% (LIBOR + 6.00%), maturity 11/3/27 11/2/2020  1,970,000   1,923,711   1,945,375 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 6/19/24 6/30/2017  1,927,352   1,927,352   1,927,352 
Mediaocean, Senior Secured Initial Term Loan, 4.00% (LIBOR + 3.50%), maturity 12/15/28 (i) 12/9/2021  1,995,000   1,977,000   1,905,887 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 11/9/27 (i) 9/17/2020  1,970,000   1,963,289   1,883,267 
Liberty Group, Unitranche, 5.75%, maturity 6/9/28 (i) (j) 6/6/2022  1,818,182   1,778,996   1,781,818 
Addison Group, Senior Secured Initial Term Loan, 5.29% (SOFR + 4.25%), maturity 12/29/28 1/19/2022  1,496,250   1,492,875   1,496,250 

Audax Credit BDC Inc.

Statements of Cash Flows

(Expressed in U.S. Dollars)

(unaudited)

  Nine Months Ended  Nine Months Ended 
  September 30, 2021  September 30, 2020 
Cash flows from operating activities:        
Net increase in net assets resulting from operations $13,539,858  $4,420,458 
Adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities:        
Net realized loss on investments  450,168   1,043,096 
Net change in unrealized (appreciation) depreciation on investments  (2,369,406)  6,732,122 
Accretion of original issue discount interest and payment-in-kind interest  (538,786)  (357,873)
(Increase) decrease in receivable from investments sold  (3,714,278)  1,993,379 
Increase in interest receivable  (111,810)  (89,246)
(Increase) decrease in receivable from bank loan repayment  (35,553)  58,592 
Increase in other assets  (48,750)  (49,265)
Decrease in accrued expenses and other liabilities  (30,400)  (72,979)
Increase (decrease) in fees due to investment advisor(a)  26,950   (84,268)
Increase in payable for investments purchased  266,250   2,012,495 
Investment activity:        
Investments purchased  (89,312,556)  (52,376,341)
Proceeds from investments sold  17,331,786   6,437,456 
Repayment of bank loans  66,357,177   27,907,668 
Total investment activity  (5,623,593)  (18,031,217)
         
Net cash provided by (used in) operating activities  1,810,650   (2,424,706)
         
Cash flows from financing activities:        
Issuance of shares of common stock  15,100,000   30,000,000 
Distributions paid to common stockholders  (7,801,880)  (8,125,581)
         
Net cash provided by financing activities  7,298,120   21,874,419 
         
Net increase in cash and cash equivalents  9,108,770   19,449,713 
         
Cash and cash equivalents:        
Cash and cash equivalents, beginning of period  4,289,122   5,506,217 
         
Cash and cash equivalents, end of period $13,397,892  $24,955,930 
         
Supplemental non-cash information        
Issuance of common shares in connection with dividend reinvestment plan $25  $26 
Payment-in-kind ("PIK") interest income $200,382  $75,144 

(a)     Refer to Note 4-Related Party Transactions for additional information

 

The accompanying notes are an integral part of these financial statements.

6

5

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of SeptemberJune 30, 20212022

(Expressed in U.S. Dollars)

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (96.1%)(g)(h):              
               
Healthcare & Pharmaceuticals              
Radiology Partners, Senior Secured Term B Loan (First Lien), 4.38% (Libor + 4.25%), maturity 7/9/25(i) 6/28/2018 $4,215,792  $4,351,973  $4,215,908 
Advarra, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/26 6/26/2019  4,156,221   4,126,286   4,156,220 
Young, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/7/24 11/6/2017  3,765,354   3,757,689   3,737,113 
American Vision Partners, Senior Secured Term Loan, 6.50% (Libor + 5.75%), maturity 9/22/28(i) 9/22/2021  3,546,512   3,482,414   3,493,313 
InHealth Medical Alliance, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 6/28/28 6/25/2021  3,500,000   3,465,451   3,456,250 
Confluent Health, Senior Secured Initial Term Loan, 5.13% (Libor + 5.00%), maturity 6/24/26(i) 6/24/2019  3,427,437   3,402,527   3,427,436 
PharMedQuest, Senior Secured Initial Term Loan, 6.50% (Libor + 5.50%), maturity 10/31/24 11/6/2019  3,293,398   3,263,022   3,268,697 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 3/14/25(i) 5/30/2018  3,239,110   3,252,724   3,169,121 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.38% (Libor + 3.25%), maturity 8/1/25(i) 8/14/2018  3,129,147   3,114,927   3,103,325 
Waystar, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 10/22/26(i) 9/19/2019  2,957,481   2,949,800   2,963,825 
Physicians Endoscopy, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 8/18/23 8/18/2016  2,860,177   2,846,238   2,838,726 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.25% (Libor + 3.50%), maturity 11/30/27(i) 9/25/2020  2,475,031   2,466,743   2,481,073 
Zelis RedCard, Senior Secured Term B-1 Loan, 3.63% (Libor + 3.50%), maturity 9/30/26(i) 9/27/2019  2,426,753   2,415,735   2,421,715 
Soliant, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 3/31/28 3/26/2021  2,337,500   2,320,016   2,337,500 
Premise Health, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 7/10/25 8/15/2018  2,288,499   2,293,906   2,288,499 
Advanced Diabetes Supply, Senior Secured Term Loan December 2020, 6.25% (Libor + 5.25%), maturity 12/30/26 7/13/2021  1,994,975   1,975,125   1,985,000 
Upstream Rehabilitation, Senior Secured August 2021 Incremental Term Loan (First Lien), 4.38% (Libor + 4.25%), maturity 11/20/26(i) 10/24/2019  1,976,297   1,973,317   1,979,594 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 7/24/26(i) 7/23/2019  1,960,000   1,954,590   1,949,584 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 4.63% (Libor + 4.50%), maturity 12/22/25 12/19/2018  1,945,000   1,933,592   1,906,100 
Alpaca, Senior Secured Term Loan, 6.25% (Libor + 5.25%), maturity 4/19/24(j) 4/19/2019  1,875,061   1,856,728   1,837,560 
CareCentrix, Senior Secured Initial Term Loan, 4.63% (Libor + 4.50%), maturity 4/3/25 4/2/2018  1,825,000   1,819,864   1,825,000 
Gastro Health, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 7/3/28 7/2/2021  1,672,000   1,662,000   1,659,460 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27(i) 11/23/2020  1,492,500   1,470,300   1,499,362 
nThrive, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.75%), maturity 1/29/29 1/21/2021  1,500,000   1,470,300   1,492,500 
Therapy Brands, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/18/28 5/12/2021  1,500,000   1,492,650   1,492,500 
CPS, Unitranche, 6.50% (Libor + 5.50%), maturity 2/28/25 3/1/2019  1,465,886   1,452,108   1,462,221 
Stepping Stones, Unitranche, 7.25% (Libor + 6.25%), maturity 3/9/27 3/5/2021  1,431,844   1,416,216   1,431,844 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/1/24(i) 1/10/2019  1,158,945   1,156,135   1,146,262 
Solis Mammography, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 4/17/28(i) 4/1/2021  1,063,333   1,053,633   1,065,992 
Wedgewood Pharmacy, Senior Secured Initial Term Loan, 5.25% (Libor + 4.50%), maturity 3/31/28 2/24/2021  1,000,000   990,150   1,000,000 
nThrive, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 1/28/28 1/15/2021  997,500   992,650   999,636 
Veritext, Senior Secured Initial Term Loan (Second Lien), 6.88% (Libor + 6.75%), maturity 7/31/26 8/14/2018  1,000,000   996,540   997,500 
Allied Benefit Systems, Senior Secured Initial Term B Loan, 5.50% (Libor + 4.50%), maturity 11/18/26 10/21/2020  992,500   979,588   992,500 
UDG, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 8/19/28(q) 8/6/2021  1,000,000   990,000   990,000 
Solis Mammography, Senior Secured Term Loan (Second Lien ), 8.75% (Libor + 8.00%), maturity 4/16/29 4/1/2021  1,000,000   985,300   992,500 
Athena, Senior Secured Term B-1 Loan (First Lien), 4.38% (Libor + 4.25%), maturity 2/11/26(i) 9/18/2019  982,506   975,746   986,664 
Alcami, Senior Secured Initial Term Loan (First Lien), 4.38% (Libor + 4.25%), maturity 7/14/25 7/12/2018  970,000   967,090   938,475 
Dermatologists of Central States, Senior Secured Term Loan, 9.50% (Libor + 8.50%), maturity 4/20/22 3/12/2020  959,936   959,936   935,938 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 6.50% (Libor + 5.50%), maturity 5/9/25(i) 5/4/2018  789,913   783,021   781,027 
MedRisk, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 5/10/28(i) 4/1/2021  500,000   495,075   500,307 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 7/24/26(i) 10/1/2020  497,503   493,123   499,700 
AccentCare, Senior Secured 2021 Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 6/22/26(i) 6/15/2021  498,750   498,750   499,284 
RMP & MedA/Rx, Senior Secured Term Loan, 5.50% (Libor + 4.50%), maturity 2/6/25 3/22/2021  493,750   488,870   492,516 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 2/6/25 2/27/2017  422,325   422,106   421,269 
ATI Physical Therapy, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/10/23(i) 6/28/2016  344,706   345,480   337,385 
Alpaca, Senior Secured Revolver, 6.25% (Libor + 5.25%), maturity 4/19/24(j) 9/30/2019  178,608   174,725   175,036 
AmeriVet, Senior Secured Incremental Delayed Draw Term Loan, 5.75% (Libor + 4.75%), maturity 6/5/24(i) 8/27/2021  116,000   104,840   114,840 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24 6/26/2019  -   (7,619)  - 
               
Services: Business              
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 9/23/25 9/26/2019  3,920,000   3,893,105   3,920,000 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 10/11/25(i) 10/5/2018  3,890,000   3,886,850   3,882,649 
Addison, Senior Secured Initial Term Loan, 4.88% (Libor + 4.75%), maturity 4/15/26 4/4/2019  2,932,500   2,895,000   2,932,500 
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.88% (Libor + 3.75%), maturity 2/9/26(i) 1/16/2019  2,932,424   2,916,826   2,924,623 
Fleetwash, Senior Secured Incremental Term Loan, 5.75% (Libor + 4.75%), maturity 10/1/24 9/25/2018  2,910,506   2,894,340   2,895,954 
Aimbridge, Senior Secured Initial Term Loan (2019) (First Lien), 3.88% (Libor + 3.75%), maturity 2/2/26(i) 1/17/2019  2,930,200   2,923,102   2,881,421 
CoolSys, Senior Secured Closing Date Initial Term Loan, 5.50% (Libor + 4.75%), maturity 8/11/28(i) 8/4/2021  2,500,000   2,469,444   2,512,246 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/9/27(i) 3/6/2020  2,468,750   2,448,678   2,478,773 
HireRight, Senior Secured Initial Term Loan (Second Lien), 7.38% (Libor + 7.25%), maturity 7/10/26 7/2/2018  2,500,000   2,485,363   2,468,750 
Newport Group, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 9/12/25(i) 8/9/2018  2,427,437   2,418,215   2,425,066 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/10/25 2/6/2018  2,329,686   2,326,569   2,329,686 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 6/19/24 6/30/2017  2,325,836   2,325,836   2,325,836 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27 10/23/2020  2,139,654   2,116,711   2,123,606 
Veregy, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 11/3/27 11/2/2020  1,985,000   1,931,756   1,970,113 
Quantum Health, Senior Secured Amendment No. 1 Refinancing Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27 12/18/2020  1,496,250   1,473,975   1,488,769 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Services: Business (continued)              
Insight Global, Unitranche, 6.75% (LIBOR + 6.00%), maturity 9/22/28 (k) 9/22/2021 $1,488,750  $1,459,389  $1,488,750 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 3/27/24 3/26/2018  1,436,891   1,434,520   1,350,678 
First Advantage, Senior Secured Term B-1 Loan (First Lien), 2.75% (LIBOR + 2.75%), maturity 1/31/27 (i) 1/23/2020  1,100,312   1,090,266   1,065,356 
Veritext, Senior Secured Initial Term Loan (Second Lien), 6.75% (LIBOR + 6.75%), maturity 7/31/26 (i) 8/14/2018  1,000,000   997,010   1,000,000 
trustaff Management, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 3/6/28 12/9/2021  992,462   990,218   992,462 
TRC Companies, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 12/8/28 11/19/2021  997,500   993,000   990,019 
Divisions Maintenance Group, Senior Secured Term B Loan, 7.04% (LIBOR + 4.75%), maturity 5/27/28 5/21/2021  992,500   984,040   985,056 
WCG, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 1/8/27 12/13/2019  980,000   973,062   972,650 
Restaurant Technologies, Senior Secured Initial Term Loan, 4.75% (SOFR + 4.25%), maturity 4/2/29 (i) 3/17/2022  997,500   973,294   966,578 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (LIBOR + 4.50%), maturity 2/4/27 (i) 12/1/2020  984,931   984,931   930,034 
Diversified, Senior Secured Initial Term Loan, 7.04% (LIBOR + 4.75%), maturity 12/23/23 4/19/2019  899,347   896,300   892,602 
Secretariat International, Senior Secured Initial Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 12/29/28 12/16/2021  845,750   841,254   841,521 
System One, Senior Secured Initial Term Loan, 6.29% (LIBOR + 4.00%), maturity 3/2/28 1/28/2021  495,000   493,020   490,050 
Therma Holdings, Senior Secured Initial Term Loan (2021), 4.75% (LIBOR + 4.00%), maturity 12/16/27 (i) 12/11/2020  502,841   501,743   480,670 
Liberty Group, Senior Secured Revolving Loan, 2.29%, maturity 6/9/28 (i) (j) 6/6/2022  45,455   40,909   44,545 
Insight Global, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 9/22/27 9/23/2021  36,899   36,899   36,899 
Discovery Education, Senior Secured Revolving Facility, 6.79% (SOFR + 5.75%), maturity 4/7/28 3/25/2022  -   (4,038)  - 
               
High Tech Industries              
Qlik, Senior Secured 2021 Refinancing Term Loan, 4.00% (LIBOR + 4.00%), maturity 4/26/24 (i) (k) 3/29/2019  3,880,900   3,867,923   3,771,901 
Golden Source, Unitranche, 6.50% (SOFR + 5.50%), maturity 5/31/28 (i) (j) 3/25/2022  3,474,178   3,397,547   3,404,695 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (LIBOR + 4.00%), maturity 10/1/27 (i) 9/29/2020  3,456,250   3,444,468   3,346,153 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.00% (LIBOR + 4.00%), maturity 8/14/26 (i) 8/9/2019  3,075,289   3,071,870   2,964,071 
Infogroup, Senior Secured Term Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 4/3/23 3/28/2017  2,844,875   2,835,413   2,837,762 
Ivanti Software, Senior Secured 2021 Specified Refinancing Term Loan (First Lien), 5.25% (LIBOR + 4.25%), maturity 12/1/27 (i) 11/20/2020  2,977,538   2,944,019   2,628,448 
Planview, Senior Secured Closing Date Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 12/17/27 12/11/2020  2,618,995   2,596,580   2,612,448 
Idera, Senior Secured Term B-1 Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 3/2/28 (i) 6/27/2017  2,586,222   2,585,543   2,433,358 
PracticeTek, Unitranche, 5.50% (LIBOR + 5.50%), maturity 11/23/27 (j) 11/22/2021  2,397,424   2,337,009   2,397,424 
Precisely, Senior Secured Third Amendment Term Loan (First Lien), 4.75% (LIBOR + 4.00%), maturity 4/24/28 (i) 3/19/2021  2,481,250   2,470,540   2,299,717 
Flexera Software, Senior Secured Term B-1 Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 3/3/28 (i) 2/16/2020  2,370,234   2,370,234   2,272,908 
Barracuda, Senior Secured Second Lien Term Loan, 8.04% (SOFR + 7.00%), maturity 5/17/30 5/17/2022  2,000,000   1,940,000   1,985,000 
QuickBase, Senior Secured Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 4/2/26 3/29/2019  1,940,000   1,934,451   1,925,450 
HelpSystems, Senior Secured Term Loan, 4.75% (LIBOR + 4.00%), maturity 11/19/26 (i) 12/19/2019  1,979,854   1,972,866   1,880,871 
Intermedia , Senior Secured New Term Loan (First Lien), 8.29% (LIBOR + 6.00%), maturity 7/21/25 7/13/2018  1,930,000   1,922,083   1,876,925 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.50% (LIBOR + 3.50%), maturity 3/5/27 (i) (m) 1/16/2020  1,960,018   1,876,844   1,875,154 
MediaRadar, Unitranche, 6.75% (SOFR + 5.75%), maturity 7/22/28 (i) (j) 5/23/2022  1,837,037   1,800,296   1,800,296 
OEConnection, Senior Secured Initial Term Loan, 6.29% (LIBOR + 4.00%), maturity 9/25/26 9/24/2019  1,600,419   1,595,835   1,592,417 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.00% (LIBOR + 4.00%), maturity 4/18/25 (i) 5/25/2018  1,619,198   1,624,894   1,565,219 
Digital Room, Senior Secured Closing Date Term Loan (First Lien), 7.54% (LIBOR + 5.25%), maturity 12/21/28 12/16/2021  1,496,250   1,482,750   1,481,288 
Navex Global, Senior Secured Initial Term Loan (First Lien), 5.54% (LIBOR + 3.25%), maturity 9/5/25 8/15/2018  1,443,750   1,435,245   1,443,750 
SmartBear, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 3/3/28 11/20/2020  990,000   981,540   990,000 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 2/12/25 (i) 3/2/2018  982,500   982,500   982,500 
Unison, Unitranche, 8.00% (LIBOR + 7.00%), maturity 6/25/26 (j) 6/25/2020  980,000   962,218   980,000 
ORBCOMM, Senior Secured Closing Date Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 9/1/28 6/17/2021  992,500   988,000   960,244 
Imperva, Senior Secured Term Loan, 6.29% (LIBOR + 4.00%), maturity 1/12/26 9/23/2020  981,038   974,351   949,154 
Infoblox, Senior Secured Initial Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 12/1/27 (i) 10/7/2020  990,000   986,276   920,931 
Barracuda, Senior Secured First Lien Term Loan, 5.54% (SOFR + 4.50%), maturity 5/17/29 5/17/2022  500,000   485,000   496,250 
Cloudera, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 10/8/28 8/10/2021  498,750   494,277   495,009 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (LIBOR + 4.00%), maturity 10/16/26 (i) 3/13/2020  488,750   469,009   469,478 
Golden Source, Senior Secured Revolving Credit, 6.50% (SOFR + 5.50%), maturity 5/31/28 (i) (j) 3/25/2022  -   (9,390)  - 
PracticeTek, Senior Secured Revolving Loan, 5.50% (LIBOR + 5.50%), maturity 11/23/27 (j) 11/22/2021  -   (7,156)  - 
               
Containers, Packaging & Glass              
InMark, Unitranche, 7.00% (LIBOR + 6.00%), maturity 12/23/26 (j) (k) 12/10/2021  6,455,559   6,334,519   6,455,559 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (LIBOR + 3.50%), maturity 5/30/24 (k) 5/11/2017  3,335,581   3,328,944   3,243,853 
Brook & Whittle, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 12/14/28 12/9/2021  3,147,065   3,123,377   3,131,330 
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 7/18/26 7/17/2019  2,503,650   2,494,564   2,491,131 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 11/30/27 (i) 9/25/2020  2,456,375   2,449,139   2,355,247 
Paragon Films, Senior Secured Closing Date Term Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/16/28 12/15/2021  1,995,000   1,975,663   1,985,025 
Intertape Polymer, Senior Secured Initial Term Loan (First Lien), 5.00% (SOFR + 4.50%), maturity 7/31/29 (i) 6/15/2022  2,000,000   1,920,000   1,920,000 
Resource Label Group, Senior Secured Closing Date Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 7/7/28 7/2/2021  1,870,348   1,862,159   1,865,672 
TricorBraun, Senior Secured Closing Date Initial Term Loan (First Lien), 3.75% (LIBOR + 3.25%), maturity 3/3/28 (i) 1/29/2021  1,819,572   1,811,907   1,719,152 
Technimark, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 7/7/28 6/30/2021  1,485,000   1,478,520   1,466,438 
Potters Industries, Senior Secured Initial Term Loan, 6.29% (LIBOR + 4.00%), maturity 12/14/27 11/19/2020  1,481,250   1,470,077   1,464,586 
Tekni-Plex, Senior Secured Tranche B-3 Initial Term Loan, 4.50% (LIBOR + 4.00%), maturity 9/15/28 (i) 7/29/2021  1,080,991   1,078,715   1,025,307 
Lacerta, Senior Secured Term Loan, 7.79% (LIBOR + 5.50%), maturity 12/30/26 2/8/2021  985,000   976,135   985,000 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 7/31/26 7/25/2019  975,000   973,487   967,688 
Novolex, Senior Secured Term B Loan (First Lien), 4.75% (SOFR + 4.25%), maturity 4/13/29 (i) 3/30/2022  1,000,000   975,820   950,757 
Applied Adhesives, Senior Secured Term A Loan, 7.29% (LIBOR + 5.00%), maturity 3/12/27 3/12/2021  595,899   590,976   592,919 
Five Star Holding Corp, Senior Secured Initial Term Loan (First Lien), 5.29% (SOFR + 4.25%), maturity 5/5/29 4/27/2022  500,000   492,627   496,250 
Golden West Packaging, Senior Secured Initial Term Loan, 7.54% (LIBOR + 5.25%), maturity 12/1/27 11/29/2021  496,875   492,375   495,633 
Pregis Corporation, Senior Secured Third Amendment Refinancing Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 7/31/26 12/9/2020  496,250   494,388   492,528 
Applied Adhesives, Senior Secured Revolving Loan, 7.29% (LIBOR + 5.00%), maturity 3/12/27 3/12/2021  23,111   22,471   22,996 

 

The accompanying notes are an integral part of these financial statements.

7

6

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of SeptemberJune 30, 20212022

(Expressed in U.S. Dollars)

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Services: Business (continued)              
Eliassen Group, Senior Secured Initial Term B Loan, 4.38% (Libor + 4.25%), maturity 11/5/24 10/19/2018 $1,479,992  $1,475,717  $1,479,992 
Insight Global, Senior Secured Initial Term Loan, 6.75% (Libor + 6.00%), maturity 9/22/28(i) 9/22/2021  1,500,000   1,467,316   1,470,000 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 5.50% (Libor + 4.50%), maturity 3/27/24 3/26/2018  1,448,141   1,445,248   1,437,280 
Epic Staffing Group, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 2/5/27(i) 2/3/2021  1,250,473   1,220,773   1,244,221 
First Advantage, Senior Secured Term B-1 Loan (First Lien), 2.88% (Libor + 2.75%), maturity 1/31/27(i) 1/23/2020  1,100,312   1,088,542   1,101,039 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/4/27(i) 12/1/2020  992,469   992,469   998,689 
WCG, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 1/8/27(i) 12/13/2019  987,500   979,406   992,869 
Divisions Maintenance Group, Senior Secured Term B Loan, 5.50% (Libor + 4.75%), maturity 5/27/28 5/21/2021  1,000,000   990,300   992,500 
Franklin Energy, Senior Secured Term B Loan (First Lien), 4.13% (Libor + 4.00%), maturity 8/14/26 8/14/2019  980,000   978,042   955,500 
Diversified, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 12/23/23 4/19/2019  899,347   895,564   890,353 
Worley Claims Services, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 6/3/26 10/31/2019  539,719   536,864   539,719 
ImageFirst, Senior Secured Initial Term Loan, 5.25% (Libor + 4.50%), maturity 4/27/28(i) 4/26/2021  526,023   523,105   527,338 
Therma Holdings, Senior Secured Term Loan, 4.50% (Libor + 3.75%), maturity 12/16/27(i) 9/29/2021  500,000   498,750   501,250 
System One, Senior Secured Initial Term Loan, 5.25% (Libor + 4.50%), maturity 3/2/28 1/28/2021  498,867   496,517   497,620 
Therma Holdings, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/16/27(i) 12/11/2020  416,210   412,166   416,210 
Insight Global, Senior Secured Initial Revolving Loan, 6.75% (Libor + 6.00%), maturity 9/22/27(i) 9/23/2021  -   -   - 
               
High Tech Industries              
Qlik, Senior Secured 2021 Refinancing Term Loan, 4.13% (Libor + 4.00%), maturity 4/26/24(i) 3/29/2019  3,910,450   3,894,625   3,914,238 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/1/27(i) 9/29/2020  3,482,500   3,468,906   3,500,426 
Masergy, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/16/24(i) 12/14/2016  3,428,571   3,423,218   3,428,571 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 8/14/26(i) 8/9/2019  3,099,006   3,095,040   3,101,503 
Ivanti Software, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 12/1/27(i) 11/20/2020  2,985,000   2,946,264   2,997,986 
Infogroup, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 4/3/23 3/28/2017  2,867,393   2,855,087   2,845,888 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27(i) 12/11/2020  2,638,937   2,613,470   2,650,250 
Idera, Senior Secured Term B-1 Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/2/28(i) 6/27/2017  2,605,864   2,604,928   2,608,756 
Precisely, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 4/24/28(i) 3/19/2021  2,500,000   2,487,800   2,500,181 
Flexera Software, Senior Secured Term B-1 Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/3/28(i) 2/16/2020  2,396,779   2,396,779   2,402,554 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/9/27(i) 9/17/2020  1,985,000   1,977,294   1,988,468 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 3/5/27(i)(o) 1/16/2020  1,975,009   1,877,720   1,966,904 
QuickBase, Senior Secured Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 4/2/26 3/29/2019  1,955,000   1,948,442   1,945,225 
Intermedia , Senior Secured New Term Loan (First Lien), 7.00% (Libor + 6.00%), maturity 7/21/25 7/13/2018  1,945,000   1,935,554   1,910,963 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 4/18/25(i) 5/25/2018  1,645,554   1,652,358   1,646,658 
OEConnection, Senior Secured Initial Term Loan, 4.13% (Libor + 4.00%), maturity 9/25/26 9/24/2019  1,611,776   1,606,427   1,603,718 
Navex Global, Senior Secured Initial Term Loan (First Lien), 3.38% (Libor + 3.25%), maturity 9/5/25(i) 8/15/2018  1,455,000   1,444,951   1,446,365 
Infoblox, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 12/1/27(i) 10/7/2020  997,500   993,196   1,000,574 
Mediaocean, Senior Secured 2021 Incremental Term Loan, 4.13% (Libor + 4.00%), maturity 8/18/25(i) 8/2/2021  1,000,000   997,500   997,500 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/12/25(i) 3/2/2018  990,000   990,000   993,988 
SmartBear, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 3/3/28 11/20/2020  997,500   987,800   992,513 
Imperva, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/12/26(i) 9/23/2020  988,624   980,785   991,371 
Veracode, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 11/5/27 10/30/2020  995,000   986,318   990,025 
Unison, Unitranche, 8.00% (Libor + 7.00%), maturity 6/25/26 6/25/2020  987,500   966,850   987,500 
Insurity, Senior Secured Closing Date Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 7/31/26(i) 7/18/2019  982,999   979,388   983,079 
Community Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 12/2/22 5/2/2018  819,386   816,986   815,290 
Cloudera, Senior Secured Term Loan, 4.25% (Libor + 3.75%), maturity 8/10/28(i) 8/10/2021  500,000   495,000   495,000 
HelpSystems, Senior Secured Seventh Amendment Refinancing Loan (First Lien), 4.75% (Libor + 4.00%), maturity 11/19/26(i) 12/19/2019  492,500   491,492   494,013 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 4.00%), maturity 10/16/26(i) 3/13/2020  492,500   469,417   493,184 
Masergy, Senior Secured 2017 Replacement Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 12/15/23(i) 12/14/2016  476,158   475,272   476,158 
               
Chemicals, Plastics & Rubber              
Plaskolite, Senior Secured 2021-1 Refinancing Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/15/25(i) 12/12/2018  3,890,450   3,843,668   3,898,897 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/30/24 5/11/2017  3,361,813   3,353,691   3,269,363 
DuBois Chemicals, Senior Secured Term Loan (Second Lien) - 2019, 8.63% (Libor + 8.50%), maturity 9/30/27 10/8/2019  3,000,000   2,973,785   2,985,000 
Vertellus, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 12/22/27 12/18/2020  2,979,750   2,906,250   2,964,851 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 1/31/25(i) 1/26/2018  2,634,450   2,641,017   2,582,011 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.88% (Libor + 3.75%), maturity 12/12/25(i) 11/5/2018  2,432,469   2,413,505   2,406,281 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 6.88% (Libor + 6.75%), maturity 9/6/26(i) 8/16/2018  2,000,000   2,001,744   1,997,471 
Meridian Adhesives Group, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 7/24/28 7/16/2021  2,000,000   1,980,150   1,985,000 
Q Holding, Senior Secured Term B Loan (2019), 6.00% (Libor + 5.00%), maturity 12/29/23 8/20/2019  1,960,000   1,953,268   1,937,950 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 4.63% (Libor + 4.50%), maturity 9/30/26 10/8/2019  1,781,888   1,748,755   1,772,979 
Prince Minerals, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 3/31/25(i) 3/22/2018  965,000   962,289   960,085 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 10/28/24(i) 11/30/2018  969,773   958,504   952,896 
Polytek, Senior Secured Term Loan, 5.75% (Libor + 4.75%), maturity 9/20/24 12/23/2020  496,254   491,404   495,013 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 9/6/25(i) 11/7/2018  493,639   465,229   487,882 
Vertellus, Senior Secured Revolving Credit Loan, 7.00% (Libor + 6.00%), maturity 12/22/25 12/18/2020  -   (12,156)  - 
Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Banking, Finance, Insurance & Real Estate              
Confluence, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 3.75%), maturity 7/31/28 (k) 7/22/2021 $3,980,000  $3,962,000  $3,970,050 
Ascensus, Senior Secured Initial Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 8/2/28 11/17/2021  2,992,500   2,978,996   2,970,056 
Cherry Bekaert, Unitranche, 5.50%, maturity 6/30/28 (i) (j) 6/13/2022  3,020,713   2,960,299   2,960,299 
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.00% (LIBOR + 4.00%), maturity 3/18/27 (i) 2/6/2020  2,450,358   2,438,426   2,450,358 
EPIC Insurance, Unitranche, 7.54% (LIBOR + 5.25%), maturity 9/29/28 8/27/2021  2,182,562   2,149,572   2,171,649 
American Beacon Advisors, Senior Secured Tranche D Term Loan (Second Lien), 10.29% (LIBOR + 8.00%), maturity 4/30/25 10/31/2017  2,117,133   2,121,670   2,111,840 
BETA, Senior Secured Term Facility, 5.25% (SOFR + 5.25%), maturity 7/1/29 (i) (j) 6/24/2022  2,000,000   1,959,868   1,960,000 
Kestra Financial, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 6/3/26 4/29/2019  1,945,000   1,933,096   1,935,275 
Integro, Senior Secured Initial Term Loan (First Lien), 8.04% (LIBOR + 5.75%), maturity 10/31/22 10/9/2015  1,930,484   1,932,669   1,776,045 
Orion, Senior Secured 2021 Refinancing Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 9/24/27 (i) 8/4/2020  1,477,547   1,464,047   1,409,675 
SIAA, Unitranche, 8.54% (LIBOR + 6.25%), maturity 4/28/28 4/21/2021  1,166,639   1,148,666   1,166,639 
Community Brands, Senior Secured Initial Term Loan, 6.79% (SOFR + 5.75%), maturity 2/24/28 2/23/2022  997,500   976,459   990,019 
LERETA, Senior Secured Initial Term Loan, 7.54% (LIBOR + 5.25%), maturity 7/30/28 7/27/2021  992,500   983,500   985,056 
Advisor Group, Senior Secured Term B-1 Loan, 4.50% (LIBOR + 4.50%), maturity 7/31/26 (i) 1/31/2020  1,024,181   1,020,371   984,554 
Sedgwick Claims, Senior Secured Initial Term Loan, 5.54% (LIBOR + 3.25%), maturity 12/31/25 2/12/2020  487,374   486,945   486,155 
EdgeCo, Senior Secured Third Amendment Term Loan, 5.79% (SOFR + 4.75%), maturity 6/1/26 3/29/2022  299,250   276,968   297,754 
Integro, Senior Secured Tenth Amendment Initial Loan, 13.04% (SOFR + 12.00%), maturity 5/9/23 5/5/2022  161,041   161,041   148,158 
EPIC Insurance, Senior Secured Revolving Loan, 7.54% (LIBOR + 5.25%), maturity 9/30/27 8/27/2021  -   (269)  - 
BETA, Senior Secured Revolving Credit Facility, 5.25% (SOFR + 5.25%), maturity 7/1/27 (i) (j) 6/24/2022  -   (6,216)  - 
               
Aerospace & Defense              
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (LIBOR + 4.75%), maturity 7/26/24 (i) 10/1/2019  5,195,798   5,159,394   5,195,798 
HDT Global, Senior Secured Initial Term Loan, 8.04% (LIBOR + 5.75%), maturity 7/8/27 6/30/2021  3,325,000   3,230,500   3,216,938 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.50% (LIBOR + 3.50%), maturity 4/6/26 (i) 1/24/2019  3,254,423   3,248,305   3,065,611 
CPI International, Senior Secured Term Loan, 6.25% (SOFR + 5.50%), maturity 6/30/29 (i) (j) 5/18/2022  3,000,000   2,940,000   2,940,000 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 10.04% (LIBOR + 7.75%), maturity 4/30/26 5/10/2018  2,000,000   2,006,306   1,935,000 
Amentum, Senior Secured Tranche 3 Term Loan (First Lien), 4.50% (SOFR + 4.00%), maturity 2/15/29 (i) 2/10/2022  2,000,000   1,990,678   1,924,030 
Whitcraft, Unitranche, 8.29% (LIBOR + 6.00%), maturity 4/3/23 3/6/2020  1,952,371   1,945,505   1,898,681 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.50% (LIBOR + 3.50%), maturity 4/6/26 (i) 1/24/2019  1,749,690   1,746,401   1,648,178 
Tronair, Senior Secured Initial Term Loan (First Lien), 6.75% (LIBOR + 5.75%) cash, 0.50% PIK, maturity 9/8/23 9/30/2016  1,358,487   1,356,012   1,304,148 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.50% (LIBOR + 3.50%), maturity 1/29/27 (i) 1/24/2020  980,000   956,279   942,834 
Peraton, Senior Secured Term B Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 2/1/28 (i) 2/23/2021  969,612   965,652   928,444 
API Technologies, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 5/9/26 1/15/2020  974,874   953,855   901,759 
BlueHalo, Unitranche, 8.29% (LIBOR + 6.00%), maturity 10/31/25 11/17/2021  496,521   489,771   490,935 
Novaria Group, Senior Secured Initial Term Loan, 7.79% (LIBOR + 5.50%), maturity 1/27/27 1/24/2020  481,818   478,356   469,773 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 4/30/25 7/18/2019  485,491   483,911   466,072 
BlueHalo, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 10/31/25 11/17/2021  44,770   43,429   44,266 
               
Capital Equipment              
FloWorks, Senior Secured Initial Term Loan (First Lien), 6.04% (SOFR + 5.00%), maturity 12/27/28 12/27/2021  4,000,000   3,865,000   4,000,000 
Tank Holding, Unitranche, 7.04% (SOFR + 6.00%), maturity 3/31/28 3/25/2022  4,000,000   3,923,934   3,970,000 
Plaskolite, Senior Secured 2021-1 Refinancing Term Loan (First Lien), 4.75% (LIBOR + 4.00%), maturity 12/15/25 (i) 12/12/2018  3,861,125   3,821,204   3,597,046 
Excelitas, Senior Secured Initial Euro Term Loan, 5.75% (Other + 5.75%), maturity 7/6/29 (i) 6/15/2022  2,969,565   2,910,174   2,910,174 
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 9/30/24 4/20/2018  2,037,185   2,037,185   2,032,092 
Flow Control Group, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 3.75%), maturity 3/31/28 (i) 3/17/2021  1,674,662   1,672,288   1,596,007 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (LIBOR + 7.50%), maturity 12/1/25 (i) 2/19/2020  1,500,000   1,484,551   1,500,000 
Radwell, Unitranche, 6.79% (SOFR + 5.75%), maturity 4/1/29 3/11/2022  1,500,000   1,475,589   1,488,750 
Edward Don, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 7/2/25 6/26/2018  1,370,943   1,368,270   1,333,242 
Therm-O-Disc, Senior Secured Initial Term Loan (First Lien), 7.04% (SOFR + 6.00%), maturity 5/31/29 5/26/2022  1,000,000   920,000   992,500 
TriMark, Senior Secured Second Amendment Tranche B Loan (Super Senior priority), 5.79% (LIBOR + 3.50%), maturity 8/28/24 1/31/2022  968,518   968,518   794,185 
Culligan, Senior Secured 2022 Refinancing Term B Loan, 4.50% (LIBOR + 4.00%), maturity 7/31/28 (i) 6/17/2021  562,500   559,969   524,105 
Infinite Electronics, Senior Secured Initial Term Loan (First Lien), 5.54% (LIBOR + 3.25%), maturity 3/2/28 2/24/2021  495,000   494,010   495,000 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (LIBOR + 3.50%), maturity 12/2/24 (i) 10/24/2018  481,108   483,254   481,108 
SPX Flow, Senior Secured Term Loan, 5.00% (SOFR + 4.50%), maturity 4/5/29 (i) 3/18/2022  500,000   477,500   471,703 
Duravant, Senior Secured Incremental Amendment No. 5 Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 5/19/28 (i) 3/5/2020  489,962   489,962   466,244 
Tank Holding, Senior Secured Revolving Credit Loan, 7.04% (SOFR + 6.00%), maturity 3/31/28 3/25/2022  61,538   58,585   61,077 
Radwell, Senior Secured Revolving Loan, 6.79% (SOFR + 5.75%), maturity 4/1/28 3/11/2022  -   (1,200)  - 
               
Chemicals, Plastics & Rubber              
DuBois Chemicals, Senior Secured Term Loan (Second Lien) - 2019, 10.79% (LIBOR + 8.50%), maturity 9/30/27 10/8/2019  3,000,000   2,977,818   2,977,500 
Vertellus, Senior Secured Initial Term Loan, 8.29% (LIBOR + 6.00%), maturity 12/22/27 12/18/2020  2,977,500   2,911,500   2,962,613 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 5.54% (LIBOR + 3.25%), maturity 1/31/25 1/26/2018  2,613,975   2,619,536   2,574,765 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.75% (LIBOR + 3.75%), maturity 12/12/25 (i) 11/5/2018  2,413,709   2,396,941   2,317,161 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 9.04% (LIBOR + 6.75%), maturity 9/6/26 8/16/2018  2,000,000   2,001,506   1,995,000 
Meridian Adhesives Group, Senior Secured Initial Term Loan, 6.29% (LIBOR + 4.00%), maturity 7/24/28 7/16/2021  1,990,000   1,972,270   1,980,050 
USALCO, Unitranche, 8.29% (LIBOR + 6.00%), maturity 10/19/27 10/26/2021  1,990,000   1,972,000   1,975,075 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 6.79% (LIBOR + 4.50%), maturity 9/30/26 10/8/2019  1,768,296   1,739,857   1,755,034 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 10/28/24 11/30/2018  962,217   952,820   957,406 
Ascensus Specialties, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 6/30/28 12/3/2021  496,233   487,233   492,512 
Polytek, Senior Secured Term Loan, 7.29% (LIBOR + 5.00%), maturity 9/20/24 12/23/2020  492,600   488,370   476,590 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.50% (LIBOR + 3.50%), maturity 9/6/25 (i) 11/7/2018  489,822   465,745   459,896 
USALCO, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 10/19/26 10/26/2021  153,226   150,323   152,077 
Vertellus, Senior Secured Revolving Credit Loan, 8.29% (LIBOR + 6.00%), maturity 12/22/25 12/18/2020  72,936   61,995   72,571 

 

The accompanying notes are an integral part of these financial statements.

8

7

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of SeptemberJune 30, 20212022

(Expressed in U.S. Dollars)

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Aerospace & Defense              
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 7/26/24 10/1/2019 $5,235,562  $5,192,995  $5,196,295 
HDT Global, Senior Secured Initial Term Loan, 6.50% (Libor + 5.75%), maturity 7/8/27 6/30/2021  3,456,250   3,351,250   3,430,328 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.63% (Libor + 3.50%), maturity 4/6/26(i) 1/24/2019  3,279,521   3,272,196   3,213,697 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 4/30/26 5/10/2018  2,000,000   2,007,340   1,935,000 
Whitcraft, Unitranche, 7.00% (Libor + 6.00%), maturity 4/3/23 3/6/2020  1,967,412   1,959,383   1,923,145 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.63% (Libor + 3.50%), maturity 4/6/26(i) 1/24/2019  1,763,183   1,759,245   1,727,794 
Eton, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 5/1/25(i) 2/5/2020  1,486,177   1,481,953   1,486,177 
Tronair, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%) cash, 0.50% PIK, maturity 9/8/23 9/30/2016  1,370,407   1,367,238   1,293,664 
Amentum, Senior Secured Tranche 2 Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 1/29/27(i) 10/29/2020  995,000   977,784   1,005,282 
Peraton, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/1/28(i) 2/23/2021  995,000   990,300   997,610 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 1/29/27(i) 1/24/2020  987,500   961,261   988,722 
API Technologies, Senior Secured Initial Term Loan (First Lien), 4.38% (Libor + 4.25%), maturity 5/9/26(i) 1/15/2020  982,412   957,941   957,063 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/30/25(i) 7/18/2019  489,105   487,248   476,607 
Novaria Group, Senior Secured Initial Term Loan, 6.50% (Libor + 5.50%), maturity 1/27/27 1/24/2020  481,818   477,777   466,159 
               
Banking, Finance, Insurance & Real Estate              
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 3/18/27(i) 2/6/2020  2,469,063   2,455,373   2,469,539 
American Beacon Advisors, Senior Secured Tranche D Term Loan (Second Lien), 9.00% (Libor + 8.00%), maturity 4/30/25 10/31/2017  2,117,133   2,122,223   2,117,133 
Confluence, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 7/31/28(i) 7/22/2021  2,000,000   1,990,000   1,997,500 
Kestra Financial, Senior Secured Initial Term Loan, 4.38% (Libor + 4.25%), maturity 6/3/26(i) 4/29/2019  1,960,000   1,946,087   1,958,835 
Integro Insurance Brokers, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%), maturity 10/31/22 10/9/2015  1,937,653   1,934,907   1,889,212 
Orion, Senior Secured 2021 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 9/24/27(i) 8/4/2020  1,488,769   1,473,769   1,492,116 
EPIC Insurance, Unitranche, 6.00% (Libor + 5.25%), maturity 9/30/28(i) 8/27/2021  1,500,000   1,470,000   1,470,000 
Advisor Group, Senior Secured Term B-1 Loan, 4.63% (Libor + 4.50%), maturity 7/31/26(i) 1/31/2020  1,032,059   1,026,793   1,035,151 
LERETA, Senior Secured Initial Term Loan, 6.00% (Libor + 5.25%), maturity 7/30/28 7/27/2021  1,000,000   990,000   995,000 
SIAA, Unitranche, 7.25% (Libor + 6.25%), maturity 4/28/28 4/21/2021  1,000,000   981,704   992,500 
Mitchell International, Senior Secured Amendment No. 2 New Term Loan Facility (First Lien), 4.75% (Libor + 4.25%), maturity 11/29/24(i) 7/6/2020  990,000   944,203   990,000 
Sedgwick Claims, Senior Secured Initial Term Loan, 3.38% (Libor + 3.25%), maturity 12/31/25(i) 2/12/2020  491,162   490,660   487,857 
EPIC Insurance, Senior Secured Revolving Loan, 6.00% (Libor + 5.25%), maturity 9/30/27(i) 8/27/2021  -   -   - 
               
Containers, Packaging & Glass              
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 7/18/26 7/17/2019  2,887,062   2,875,132   2,872,627 
Resource Label Group, Senior Secured Closing Date Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/7/28(i) 7/2/2021  1,632,911   1,623,663   1,637,324 
TricorBraun, Senior Secured Closing Date Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 3/3/28(i) 1/29/2021  1,611,238   1,603,757   1,604,610 
Potters Industries, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/14/27(i) 11/19/2020  1,492,500   1,479,588   1,496,231 
Technimark, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 7/7/28(i) 6/30/2021  1,496,250   1,488,900   1,493,537 
Tekni-Plex, Senior Secured Tranche B-3 Initial Term Loan, 4.50% (Libor + 4.00%), maturity 9/15/28(i) 7/29/2021  1,000,000   997,500   1,002,500 
Lacerta, Senior Secured Term Loan, 6.25% (Libor + 5.50%), maturity 12/30/26 2/8/2021  992,500   982,500   990,019 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 7/31/26(i) 7/25/2019  982,500   980,733   984,766 
Tank Holding, Senior Secured 2020 Refinancing Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 3/26/26(i) 3/21/2019  980,000   977,014   977,241 
Pregis Corporation, Senior Secured Third Amendment Refinancing Term Loan (First Lien), 4.50% (Libor + 4.00%), maturity 7/31/26 12/9/2020  500,000   497,848   496,250 
Applied Adhesives, Senior Secured Term A Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 3/12/2021  497,500   491,941   495,013 
Alpha Packaging, Senior Secured Tranche B-1 Term Loan, 7.00% (Libor + 6.00%), maturity 5/12/22(i) 7/7/2017  465,186   464,773   465,186 
Applied Adhesives, Senior Secured Revolving Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 3/12/2021  26,311   25,600   26,180 
               
Services: Consumer              
A Place For Mom, Senior Secured Term Loan, 4.75% (Libor + 3.75%), maturity 8/10/24 7/28/2017  2,618,412   2,618,133   2,598,774 
Weld North, Senior Secured 2020 Term Loan, 4.75% (Libor + 4.00%), maturity 12/21/27(i) 12/21/2020  2,426,531   2,426,531   2,433,586 
LegalShield, Senior Secured Initial Term Loan (First Lien), 3.38% (Libor + 3.25%), maturity 5/1/25(i) 11/21/2018  1,927,000   1,918,180   1,922,379 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.13% (Libor + 3.00%), maturity 5/14/26(i) 5/8/2019  1,532,172   1,529,651   1,529,245 
Ned Stevens, Senior Secured Term A Loan, 6.75% (Libor + 5.75%), maturity 9/30/25(j) 9/30/2019  1,421,211   1,402,976   1,417,658 
Teaching Strategies, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 8/31/28(i) 8/19/2021  1,000,000   990,000   997,500 
Smart Start, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 8/19/27(i) 8/14/2020  990,025   981,503   993,165 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.38% (Libor + 4.25%), maturity 7/30/25(i) 7/26/2018  970,000   968,532   944,870 
LegalShield, Senior Secured New Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/1/25 9/11/2020  495,000   488,430   492,525 
StubHub, Senior Secured USD Term B Loan, 3.63% (Libor + 3.50%), maturity 2/12/27(i) 1/31/2020  491,250   489,243   481,250 
Ned Stevens, Senior Secured Revolving Loan, 5.75% (Libor + 4.75%), maturity 9/30/25(j) 9/30/2019  -   (2,614)  - 
               
Transportation: Cargo              
Evans Network, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 8/19/28(i) 8/6/2021  3,673,469   3,633,469   3,659,694 
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 10/12/24(i) 11/20/2018  3,581,120   3,578,151   3,544,454 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27 11/12/2020  1,985,000   1,965,991   1,980,038 
Worldwide Express, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/26/28(i) 7/23/2021  1,500,000   1,488,750   1,506,666 
               
Construction & Building              
Tangent, Senior Secured Closing Date Term Loan (First Lien), 4.88% (Libor + 4.75%), maturity 11/30/24 10/2/2019  1,797,413   1,787,360   1,792,920 
PlayPower, Senior Secured Initial Term Loan, 5.63% (Libor + 5.50%), maturity 5/8/26 5/10/2019  1,761,778   1,761,778   1,704,520 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 9/29/25 2/7/2020  1,500,000   1,473,840   1,496,250 
DiversiTech Corporation, Senior Secured Tranche B-2 Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 12/2/24(i) 2/23/2018  1,448,494   1,440,951   1,450,064 
Aegion, Senior Secured Initial Term Loan, 5.50% (Libor + 4.75%), maturity 5/17/28 4/1/2021  1,000,000   995,150   997,500 
PlayCore, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 9/30/24(i) 9/18/2017  959,423   958,097   957,154 
CHI Overhead Doors, Senior Secured Third Amendment Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 7/31/25(i) 7/28/2015  617,298   617,619   618,601 
DiversiTech Corporation, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 6/2/25 2/5/2020  500,000   491,687   500,000 
Acuren, Senior Secured Initial Term Loan, 4.13% (Libor + 4.00%), maturity 1/23/27(i) 1/17/2020  479,999   477,992   481,726 
Hoffman Southwest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 8/14/23 5/16/2019  446,460   446,317   440,879 
Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date  Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Services: Consumer              
Ned Stevens, Unitranche, 7.00% (SOFR + 6.00%), maturity 6/30/29 (i) (j) 6/22/2022 $3,558,460  $3,496,006  $3,505,084 
Weld North, Senior Secured 2021 Term Loan, 4.75% (LIBOR + 3.75%), maturity 12/21/27 (i) 12/21/2020  2,408,195   2,408,195   2,323,672 
A Place For Mom, Senior Secured Term Loan, 6.79% (LIBOR + 4.50%), maturity 2/10/26 7/28/2017  2,221,608   2,221,436   2,204,945 
Smart Start, Senior Secured Term B Loan (Second Lien), 10.04% (LIBOR + 7.75%), maturity 12/16/29 12/10/2021  2,000,000   1,964,000   1,985,000 
Smart Start, Senior Secured Term B Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 12/16/28 12/10/2021  1,990,000   1,972,000   1,975,075 
FullBloom, Senior Secured Initial Term Loan (First Lien), 5.29% (SOFR + 4.25%), maturity 12/15/28 12/10/2021  1,500,000   1,486,500   1,488,750 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.00% (LIBOR + 3.00%), maturity 5/14/26 (i) 5/8/2019  1,528,610   1,526,527   1,467,623 
Teaching Strategies, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 8/31/28 8/19/2021  995,000   986,054   995,000 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.25% (LIBOR + 4.25%), maturity 7/30/25 (i) 7/26/2018  962,500   961,255   908,272 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 7.79% (LIBOR + 5.50%), maturity 5/9/25 5/4/2018  610,388   605,691   610,388 
Ned Stevens, Senior Secured Revolving Credit, 7.00% (SOFR + 6.00%), maturity 6/30/28 (i) (j) 6/22/2022  34,495   30,410   33,978 
Ned Stevens, Senior Secured Revolving Loan, 6.25% (LIBOR + 5.25%), maturity 9/30/25 (j) 9/30/2019  -   (2,614)  - 
               
Transportation: Cargo              
Evans Network, Senior Secured Initial Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 8/19/28 8/6/2021  3,645,918   3,609,918   3,627,689 
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (LIBOR + 4.00%), maturity 10/12/24 (i) 11/20/2018  3,553,288   3,550,804   3,429,328 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 11/12/27 11/12/2020  2,106,328   2,089,200   2,106,328 
AIT Worldwide Logistics, Senior Secured Initial Term Loan (First Lien), 5.50% (LIBOR + 4.75%), maturity 4/6/28 (i) 12/9/2021  1,985,000   1,980,511   1,845,857 
St. George Logistics, Senior Secured Initial Term Loan, 7.04% (SOFR + 6.00%), maturity 3/24/28 4/28/2022  1,496,250   1,474,453   1,481,288 
Worldwide Express, Senior Secured Initial Term Loan (First Lien), 5.00% (LIBOR + 4.25%), maturity 7/26/28 (i) 7/23/2021  1,492,500   1,482,375   1,375,550 
Omni Logistics, Senior Secured Initial Term Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/30/26 11/24/2021  1,154,031   1,143,234   1,154,031 
FLS Transportation, Senior Secured Term B Loan, 7.54% (LIBOR + 5.25%), maturity 12/18/28 4/14/2022  1,000,000   990,328   1,000,000 
Magnate, Senior Secured Initial Term Loan (First Lien), 7.79% (LIBOR + 5.50%), maturity 12/29/28 3/11/2022  923,929   906,270   923,929 
FLS Transportation, Senior Secured Revolving Loan, 7.54% (LIBOR + 5.25%), maturity 12/17/27 4/14/2022  -   (889)  - 
Omni Logistics, Senior Secured Revolving Credit Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/30/25 11/24/2021  -   (1,119)  - 
               
Beverage, Food & Tobacco              
Bettcher Industries, Senior Secured Initial Term Loan (Second Lien), 8.29% (SOFR + 7.25%), maturity 12/14/29 12/13/2021  2,500,000   2,477,500   2,468,750 
Bettcher Industries, Senior Secured Initial Term Loan (First Lien), 5.04% (SOFR + 4.00%), maturity 12/14/28 12/13/2021  1,995,000   1,977,000   1,970,063 
Sovos Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (LIBOR + 3.75%), maturity 6/8/28 (i) 6/8/2021  2,033,001   2,033,001   1,941,393 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 8/25/25 8/22/2018  1,925,000   1,920,615   1,896,125 
Hissho Sushi, Unitranche, 6.75% (SOFR + 6.00%), maturity 5/18/28 (i) (j) 4/7/2022  1,857,143   1,818,418   1,820,000 
Dessert Holdings, Senior Secured Initial Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 6/9/28 6/7/2021  1,488,750   1,478,895   1,481,306 
Monogram Foods, Senior Secured Initial Term Loan, 6.29% (LIBOR + 4.00%), maturity 8/28/28 8/13/2021  995,000   986,000   972,613 
Hissho Sushi, Senior Secured Revolving Credit Loan, 6.75% (SOFR + 6.00%), maturity 5/18/28 (i) (j) 4/7/2022  33,333   32,667   32,667 
               
Automotive              
Highline, Senior Secured Initial Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 11/9/27 10/29/2020  2,827,841   2,769,183   2,735,936 
Burgess Point Purchaser Corporation, Senior Secured Term Loan, 5.75% (SOFR + 5.25%), maturity 7/31/29 (i) (j) 6/30/2022  3,000,000   2,700,000   2,700,000 
Rough Country, Senior Secured Initial Term Loan (First Lien), 5.79% (LIBOR + 3.50%), maturity 7/28/28 7/26/2021  1,975,000   1,970,500   1,965,125 
Truck Hero, Senior Secured Initial Term Loan, 4.00% (LIBOR + 3.25%), maturity 1/31/28 (i) 1/20/2021  1,481,250   1,481,250   1,346,278 
IXS, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 3/5/27 2/27/2020  790,270   788,592   764,587 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 9.04% (LIBOR + 6.75%), maturity 2/2/26 2/23/2022  500,000   500,000   496,250 
Wheel Pros, Senior Secured Initial Term Loan (First Lien), 5.25% (LIBOR + 4.50%), maturity 5/11/28 (i) 4/23/2021  496,250   492,290   416,321 
               
Construction & Building              
Tangent, Senior Secured Closing Date Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 11/30/27 10/2/2019  1,785,932   1,777,413   1,765,840 
PlayPower, Senior Secured Initial Term Loan, 7.79% (LIBOR + 5.50%), maturity 5/8/26 5/10/2019  1,747,195   1,747,195   1,624,891 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 10.04% (LIBOR + 7.75%), maturity 9/29/25 2/7/2020  1,500,000   1,477,670   1,496,250 
Dodge Construction Network, Senior Secured Initial Term Loan (First Lien), 5.79% (SOFR + 4.75%), maturity 2/23/29 2/10/2022  1,000,000   985,952   1,000,000 
PlayCore, Senior Secured Initial Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 9/30/24 9/18/2017  951,927   950,801   949,547 
Specialty Products & Insulation, Senior Secured Tranche B-1 Term Loan, 6.29% (SOFR + 5.25%), maturity 12/21/27 3/16/2022  794,962   787,254   792,975 
Acuren, Senior Secured Initial Term Loan, 6.54% (LIBOR + 4.25%), maturity 1/23/27 1/17/2020  476,270   474,553   476,270 
Hoffman Southwest, Senior Secured Initial Term Loan, 7.04% (LIBOR + 4.75%), maturity 8/14/23 5/16/2019  434,492   434,898   432,319 
               
Consumer Goods: Non-durable              
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 11/21/23 11/9/2016  2,381,171   2,377,183   2,285,924 
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (LIBOR + 4.50%), maturity 10/26/23 (k) 11/2/2016  2,001,028   1,995,099   1,991,023 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 9/11/23 9/29/2016  1,881,139   1,876,189   1,876,436 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 11.79% (LIBOR + 9.50%), maturity 11/21/24 2/7/2020  1,250,000   1,250,000   1,209,375 
               
Environmental Industries              
Alliance Environmental Group, Unitranche, 7.00% (LIBOR + 6.00%), maturity 12/30/27 (j) 12/30/2021  4,136,507   4,058,427   4,136,507 
Denali Water Solutions, Senior Secured Closing Date Term Loan, 6.54% (LIBOR + 4.25%), maturity 3/27/28 3/18/2021  1,980,000   1,962,000   1,960,200 
Denali Water Solutions, Senior Secured Amendment No. 3 Term Loan, 5.67% (SOFR + 4.63%), maturity 3/27/28 5/5/2022  500,000   482,500   495,000 
Keter Environmental Services, Unitranche, 5.23% (LIBOR + 2.94%), maturity 10/29/27 11/5/2021  497,500   493,000   493,769 
Alliance Environmental Group, Senior Secured Revolving Loan, 7.00% (LIBOR + 6.00%), maturity 12/30/27 (j) 12/30/2021  149,007   142,384   149,007 
Keter Environmental Services, Unitranche, 8.79% (LIBOR + 6.50%), maturity 10/29/27 11/5/2021  27,360   26,586   27,155 
               
Wholesale              
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (LIBOR + 3.00%), maturity 3/20/25 (k) 3/16/2018  3,829,693   3,830,178   3,791,396 
               
Media: Diversified & Production              
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.50% (LIBOR + 3.50%), maturity 2/9/26 (i) 1/16/2019  2,909,867   2,896,421   2,801,961 

 

The accompanying notes are an integral part of these financial statements.

9

8

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of SeptemberJune 30, 20212022

(Expressed in U.S. Dollars)

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
Capital Equipment              
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 3.88% (Libor + 3.75%), maturity 9/30/24(i) 4/20/2018 $2,037,185  $2,037,185  $1,992,319 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/1/25(i) 2/19/2020  1,500,000   1,481,935   1,504,755 
Edward Don, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 7/2/25 6/26/2018  1,370,943   1,367,622   1,302,395 
Flow Control Group, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/31/28(i) 3/17/2021  1,179,520   1,176,872   1,179,901 
Cole-Parmer, Senior Secured Term B-1 Loan (First Lien), 3.88% (Libor + 3.75%), maturity 11/4/26(i) 10/29/2019  985,000   981,755   986,121 
TriMark, Senior Secured Initial Term Loan (First Lien), 3.63% (Libor + 3.50%), maturity 8/28/24 6/13/2018  975,988   899,104   595,353 
Restaurant Technologies, Senior Secured Initial Loan (Second Lien), 6.63% (Libor + 6.50%), maturity 10/1/26 2/11/2020  500,000   503,133   498,750 
Infinite Electronics, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/2/28 2/24/2021  498,750   497,575   496,256 
Duravant, Senior Secured Incremental Amendment No. 5 Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 5/19/28(i) 3/5/2020  492,424   492,424   492,715 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/2/24(i) 10/24/2018  484,887   487,447   487,131 
Flow Control Group, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/31/28(i) 7/27/2021  145,469   145,469   145,516 
               
Automotive              
Highline, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 11/9/27(i) 10/29/2020  2,856,477   2,788,689   2,867,352 
Rough Country, Senior Secured Term Loan B, 4.25% (Libor + 3.50%), maturity 7/28/28 7/26/2021  2,000,000   1,995,000   1,985,000 
Truck Hero, Senior Secured Initial Term Loan, 4.00% (Libor + 3.25%), maturity 1/31/28(i) 1/20/2021  1,492,500   1,492,500   1,490,342 
Safe Fleet, Senior Secured Tranche B-1 Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 2/3/25 11/28/2018  970,000   952,451   962,725 
IXS, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 3/5/27(i) 2/27/2020  796,490   794,425   795,879 
Wheel Pros, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 5/11/28(i) 4/23/2021  500,000   495,300   500,489 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 6.75%), maturity 2/2/26 2/7/2020  500,000   490,968   496,250 
               
Wholesale              
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 3/20/25 3/16/2018  3,859,581   3,860,102   3,820,986 
PetroChoice, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 8/19/22 9/2/2015  1,880,184   1,872,587   1,819,078 
ABB Optical, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 6/15/23 6/14/2016  1,428,589   1,428,954   1,396,446 
               
Beverage, Food & Tobacco              
Sovos Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 6/8/28(i) 6/8/2021  2,200,022   2,200,022   2,207,071 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 8/25/25 8/22/2018  1,940,000   1,934,789   1,915,750 
Dessert Holdings, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 6/9/28 6/7/2021  1,500,000   1,488,900   1,488,750 
Monogram Foods, Senior Secured Cov-Lite Term Loan B, 4.50% (Libor + 4.00%), maturity 8/31/28 8/13/2021  997,500   987,500   990,019 
               
Forest Products & Paper              
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/21/23(i) 11/9/2016  2,400,069   2,394,883   2,314,317 
Loparex, Senior Secured Initial Term Loan (First Lien), 4.63% (Libor + 4.50%), maturity 7/31/26 7/29/2019  1,470,000   1,459,156   1,466,325 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 10.50% (Libor + 9.50%), maturity 11/21/24 2/7/2020  1,250,000   1,250,000   1,209,375 
               
Consumer Goods: Non-durable              
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 10/26/23 11/2/2016  2,087,472   2,079,793   2,035,285 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.50%), maturity 9/11/23 9/29/2016  1,898,373   1,892,117   1,879,389 
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/16/24(i) 10/17/2018  969,803   974,281   953,397 
               
Media: Advertising, Printing & Publishing              
Ansira, Unitranche, 7.50% (Libor + 6.50%) PIK, maturity 12/20/24 12/20/2016  2,129,402   2,122,728   1,362,818 
Northstar, Senior Secured Term Loan, 6.75% (Libor + 6.25%) cash, 1.00% PIK, maturity 6/7/24 5/8/2017  1,373,356   1,373,356   1,328,722 
               
Environmental Industries              
Denali Water Solutions, Senior Secured Closing Date Term Loan, 5.00% (Libor + 4.25%), maturity 3/27/28 3/18/2021  1,995,000   1,975,000   1,972,556 
Culligan, Senior Secured Initial Term B Loan, 4.50% (Libor + 4.00%), maturity 7/31/28(i) 6/17/2021  500,000   497,500   502,301 
               
Telecommunications              
ORBCOMM, Senior Secured Closing Date Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 9/1/28(i) 6/17/2021  1,000,000   995,000   1,000,845 
               
Utilities: Electric              
Systems Control, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 3/28/25 6/15/2021  994,845   989,933   989,871 
               
Metals & Mining              
Dynatect, Senior Secured Term B Loan, 5.50% (Libor + 4.50%), maturity 9/30/22 8/16/2019  939,483   938,954   920,694 
               
Hotel, Gaming & Leisure              
Auto Europe, Senior Secured Initial Dollar Term Loan, 6.00% (Libor + 5.00%), maturity 10/21/23 10/19/2016  1,119,231   1,114,576   895,385 
               
Health Care Equipment & Services              
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.38% (Libor + 4.25%), maturity 8/31/26(i) 8/2/2019  528,047   524,160   527,913 
               
Consumer Goods: Durable              
Careismatic Brands, Senior Secured Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 1/6/28(i) 1/22/2021  498,750   497,575   498,480 
               
Total Bank Loans       $364,195,915  $362,965,687 
Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS:  NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Hotels, Gaming & Leisure              
Northstar, Senior Secured Term Loan, 6.75% (LIBOR + 6.25%) cash, 1.00% PIK maturity 6/7/24 5/8/2017 $1,330,658  $1,330,659  $1,287,413 
Auto Europe, Senior Secured Initial Dollar Term Loan, 7.29% (LIBOR + 5.00%), maturity 10/21/23 10/19/2016  1,119,231   1,115,522   895,385 
               
Metals & Mining              
Dynatect, Senior Secured Term B Loan, 6.79% (LIBOR + 4.50%), maturity 9/30/22 8/16/2019  1,905,588   1,896,111   1,905,588 
               
Utilities: Electric              
Systems Control, Senior Secured Initial Term Loan, 6.79% (LIBOR + 4.50%), maturity 3/28/25 6/15/2021  1,483,227   1,481,124   1,460,979 
               
Forest Products & Paper              
Loparex, Senior Secured Initial Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 7/31/26 7/29/2019  1,458,750   1,449,450   1,458,750 
               
Retail              
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (LIBOR + 3.50%), maturity 12/16/24 (i) 10/17/2018  962,254   966,029   911,947 
StubHub, Senior Secured USD Term B Loan, 5.79% (LIBOR + 3.50%), maturity 2/12/27 1/31/2020  487,500   485,783   468,000 
               
Media: Advertising, Printing & Publishing              
Ansira, Unitranche, 7.50% (LIBOR + 6.50%) PIK, maturity 12/20/24 12/20/2016  2,220,865   2,215,572   1,376,936 
               
Utilities: Water              
Aegion, Senior Secured Initial Term Loan, 7.04% (LIBOR + 4.75%), maturity 5/17/28 4/1/2021  992,500   988,270   985,056 
               
Energy: Electricity              
Franklin Energy, Senior Secured Term B Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 8/14/26 8/14/2019  972,500   970,815   948,188 
               
Consumer Goods: Durable              
Careismatic Brands, Senior Secured Initial Term Loan (First Lien), 5.54% (LIBOR + 3.25%), maturity 1/6/28 1/22/2021  495,000   494,010   488,813 
 Total Bank Loans       $440,648,277  $434,509,039 

The accompanying notes are an integral part of these financial statements.

 

9
Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.6%)(g)(h):              
               
Services: Business              
InnovateMR, Class A Units (387,311 Class A Units, Fair value of $470,019) (i) (j) (n) (o) 12/16/2021   $387,311  $470,019 
Liberty Group, Series A-Preferred Units (113,636 Series A-Preferred Units, Fair value of $113,636) (i) (j) (n) (p) 6/6/2022      113,636   113,636 
               
High Tech Industries              
PracticeTek, Class A Units (318,350 Class A Units, Fair value of $311,804) (j) (n) (q) 11/22/2021      348,282   311,804 
Golden Source, Class A Units (117,371 Class A Units, Fair value of $117,371) (i) (j) (n) (r) 3/25/2022      117,371   117,371 
               
Environmental Industries              
Alliance Environmental Group, A-1 Preferred Units (331,126 A-1 Preferred Units, Fair value of $348,454) (n) (s) (j) 9/30/2019      331,126   348,454 
               
Services: Consumer              
Ned Stevens, Class B Common Units (261,438 Common B Units, Fair value of $318,184) (n) (t) (u) (j) 9/30/2019      261,438   318,184 
               
Chemicals, Plastics & Rubber              
Vertellus, Series A Units (1,651 Series A Units, Fair value of $274,462) (n) (t) (v) (j) 12/22/2020      165,138   274,462 
               
Beverage, Food & Tobacco              
Hissho Sushi, Class A Units (25,000 Class A Units, Fair value of $250,000) (i) (j) (n) (w) 4/7/2022      250,000   250,000 
               
Healthcare & Pharmaceuticals              
Ivy Rehab, Class A Units (100 Class A Units, Fair value of $100,000) (j) (n) (x) 3/11/2022      100,000   100,000 
               
Total Equity and Preferred Shares       $2,074,302  $2,303,930 
               
Total Portfolio Investments(y)       $442,722,579  $436,812,969 

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of September 30, 2021

(Expressed in U.S. Dollars)

(unaudited)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.1%)(g)(h):              
               
Services: Consumer              
Ned Stevens, Class B Common Units (261,438 Common B units, Fair value of $251,476)(j)(k)(l)(m) 9/30/2019     $261,438  $251,476 
               
Chemicals, Plastics & Rubber              
Vertellus, Series A Units (1,651 Series A units, Fair value of $169,327)(k)(m)(p) 12/22/2020      165,138   169,327 
               
Healthcare & Pharmaceuticals              
Alpaca, Class A Units (45,746 Class A Units, Fair value of $54,970)(j)(k)(m)(n) 4/19/2019      80,512   54,970 
               
Total Equity and Preferred Shares       $507,088  $475,773 
               
Total Portfolio Investments(r)       $364,703,003  $363,441,460 

(a)All companies are located in the United States of America, unless otherwise noted.

(b)Interest rate percentages represent actual interest rates which are indexed from then 30-day London Interbank Offered Rate ("LIBOR"(“LIBOR”) unless otherwise noted. LIBOR rates are subject to interest rate floors which can vary based on the contractual agreement with the borrower. Due dates represent the contractual maturity date.

(c)All loans are income-producing, unless otherwise noted.

(d)All investments are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”) unless otherwise noted.

(e)All investments are exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act.

(f)Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the FASB Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.

(g)Percentages are calculated using fair value of investments over net assets.

(h)As defined in 1940 Act, the Company is not deemed to be an “Affiliated Person” of or “Control” this portfolio company because it neither owns 5% or more of the portfolio company’s outstanding voting securities nor has the power to exercise control over the management or policies of such portfolio company (including through a management agreement).

(i)Investment was valued using Level 2 inputs within the ASC 820 fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.

(j)Three of our affiliated funds, Audax Direct Lending Solutions Fund - A, L.P., Audax Direct Lending Solutions Fund - C, L.P., and Audax Direct Lending Solutions Fund - D, L.P., 'co-invested‘co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission.

(k)All or portion of this security has an open position related to short-term borrowings, as described in footnote 8.

(l)The borrower for UDG Healthcare, Congachant Limited, is located in Ireland.

(m)The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.

(n)Investment is non-income producing.

(l)(o)Represents an investment in APD NSINN Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(m)(p)Represents an investment in APD TLG Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(q)Represents an investment in APD Ptek Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(r)Represents an investment in APD Gol Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(s)Represents an investment in APD AEG Equity Blocker, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(t)Other net assets of $0 at the aggregator levels are included in the fair value of the investments when using the net asset value as a practical expedient.

(n)(u)Represents an investment in APD ALPNS Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(o)The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.
(p)(v)Represents an investment in ADP VERT Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(q)(w)The borrower for UDG Healthcare, Congachant Limited, is locatedRepresents an investment in Ireland.APD Sush Equity Blocker, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(r)(x)Represents an investment in APD IVY Equity Blocker, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(y)At SeptemberJune 30, 2021,2022, the cost of investments for income tax purposes was $364,703,003,$442,722,579, the gross unrealized depreciation for federal tax purposes was $3,082,368,$7,783,848, the gross unrealized appreciation for federal income tax purposes was $1,820,825,$1,874,238, and the net unrealized depreciation was $1,261,543.$5,909,610.

 

The accompanying notes are an integral part of these financial statements.

10

10

 

Audax Credit BDC Inc.

Schedule of Investments

As of December 31, 20202021

(Expressed in U.S. Dollars)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (99.3%)(g)(h):              
               
Healthcare & Pharmaceuticals              
Advarra, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/26 6/26/2019 $4,188,729  $4,154,267  $4,188,728 
Radiology Partners, Senior Secured Term B Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/25(i) 6/28/2018  4,215,792   4,347,260   4,176,926 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/1/24 1/10/2019  3,918,622   3,904,639   3,879,434 
Young, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/7/24 11/6/2017  3,794,840   3,786,074   3,737,916 
Confluent Health, Senior Secured Initial Term Loan, 5.24% (Libor + 5.00%), maturity 6/24/26 6/24/2019  3,453,734   3,424,590   3,453,733 
Specialty Care, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 9/1/23 8/23/2017  3,308,843   3,311,499   3,308,842 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 3/14/25(i) 5/30/2018  3,247,592   3,264,389   3,125,437 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 8/1/25(i) 8/14/2018  3,153,327   3,139,037   3,090,261 
Physicians Endoscopy, Senior Secured Initial Term Loan (First Lien), 6.50% (Libor + 5.50%), maturity 8/18/23 8/18/2016  2,880,590   2,864,047   2,786,971 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/30/27(i) 9/25/2020  2,500,000   2,490,762   2,511,458 
Waystar, Senior Secured Term Loan B, 4.24% (Libor + 4.00%), maturity 10/22/26 9/19/2019  2,481,250   2,472,081   2,462,641 
MedRisk, Senior Secured Initial Term Loan (First Lien), 2.99% (Libor + 2.75%), maturity 12/27/24 1/31/2018  2,425,000   2,429,293   2,425,000 
Eating Recovery Center, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 9/23/24 10/26/2017  2,421,519   2,404,861   2,409,412 
OB Hospitalist Group, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/1/24 8/8/2017  2,316,088   2,307,504   2,316,088 
Premise Health, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 7/10/25 8/15/2018  2,306,194   2,312,549   2,306,194 
PharMedQuest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 10/31/24(j) 11/6/2019  2,298,398   2,272,767   2,298,398 
MedRisk, Senior Secured Initial Loan (Second Lien), 6.99% (Libor + 6.75%), maturity 12/29/25 12/18/2018  2,100,000   2,078,820   2,100,000 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 7/24/26(i) 7/23/2019  1,975,000   1,968,810   1,967,793 
Zelis RedCard, Senior Secured Initial Term Loan, 4.99% (Libor + 4.75%), maturity 9/30/26(i) 9/27/2019  1,945,092   1,931,721   1,955,747 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 12/22/25 12/19/2018  1,960,000   1,946,588   1,937,950 
CareCentrix, Senior Secured Initial Term Loan, 4.74% (Libor + 4.50%), maturity 4/3/25(i) 4/2/2018  1,862,500   1,856,296   1,831,763 
Alpaca, Senior Secured Term Loan, 7.75% (Libor + 6.75%), maturity 4/19/24(j) 4/19/2019  1,657,302   1,636,678   1,591,010 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27(i) 11/23/2020  1,500,000   1,477,500   1,488,750 
Upstream Rehabilitation, Senior Secured Term Loan, 4.74% (Libor + 4.50%), maturity 11/20/26(i) 10/24/2019  1,488,750   1,486,743   1,473,863 
CPS, Unitranche, 6.50% (Libor + 5.50%), maturity 2/28/25(j) 3/1/2019  1,477,608   1,461,164   1,444,361 
Stepping Stones, Unitranche, 6.75% (Libor + 5.75%), maturity 12/12/24(j) 7/15/2019  1,469,147   1,463,066   1,436,091 
Allied Benefit Systems, Senior Secured Term Loan B, 5.50% (Libor + 4.75%), maturity 11/18/26 10/21/2020  1,000,000   985,273   992,500 
Ensemble, Senior Secured Closing Date Term Loan, 3.99% (Libor + 3.75%), maturity 8/3/26(i) 7/24/2019  987,500   983,378   990,414 
Athena, Senior Secured Term B Loan (First Lien), 4.74% (Libor + 4.50%), maturity 2/11/26(i) 9/18/2019  987,443   979,417   989,278 
Veritext, Senior Secured Initial Term Loan (Second Lien), 7.24% (Libor + 7.00%), maturity 7/31/26 8/14/2018  1,000,000   996,131   987,500 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 6.50% (Libor + 5.50%), maturity 5/9/25 5/4/2018  977,423   967,355   955,431 
Alcami, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 7/14/25 7/12/2018  977,500   974,068   945,731 
Dermatologists of Central States, Senior Secured Term Loan, 8.00% (Libor + 7.00%), maturity 4/20/22(j) 3/12/2020  967,378   967,378   935,938 
ATI Physical Therapy, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/10/23(i) 6/28/2016  912,467   915,992   902,122 
Specialty Care, Senior Secured Initial Term Loan (Second Lien), 9.25% (Libor + 8.25%), maturity 9/1/24 3/19/2018  850,000   844,525   850,000 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 7/24/26(i) 10/1/2020  500,000   495,149   498,750 
Waystar, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/22/26 9/15/2020  498,750   497,500   495,009 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/6/25 2/27/2017  430,606   430,014   430,606 
Alpaca, Senior Secured Revolver, 7.75% (Libor + 6.75%), maturity 4/19/24(j) 9/30/2019  232,967   229,084   223,648 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24 6/26/2019  114,286   106,667   114,286 
Stepping Stones, Senior Secured COVID-19 Revolving Loan, 6.75% (Libor + 5.75%), maturity 6/30/21(j) 11/5/2020  30,537   30,537   29,850 
               
High Tech Industries              
Qlik, Senior Secured 2019 Incremental Term Loan, 4.49% (Libor + 4.25%), maturity 4/26/24 3/29/2019  3,940,000   3,919,979   3,910,450 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/1/27(i) 9/29/2020  3,500,000   3,484,841   3,513,749 
Masergy, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/16/24 12/14/2016  3,428,571   3,421,842   3,428,571 
Syncsort, Senior Secured 2018 Refinancing Term Loan (First Lien), 6.49% (Libor + 6.25%), maturity 8/16/24(i) 9/11/2017  3,387,038   3,367,343   3,385,883 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 8/14/26(i) 8/9/2019  3,122,723   3,118,268   3,128,371 
Ivanti Software, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 12/1/27(i) 11/20/2020  3,000,000   2,955,819   3,009,205 
EverCommerce, Senior Secured Initial Term Loan, 5.74% (Libor + 5.50%), maturity 8/23/25 8/19/2019  2,978,453   2,920,009   2,978,453 
Infogroup, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 4/3/23(i) 3/28/2017  2,889,912   2,872,270   2,737,616 
Idera, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 6/28/24(i) 6/27/2017  2,618,959   2,617,482   2,622,683 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/9/27(i) 9/17/2020  2,000,000   1,991,387   2,004,324 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 3/5/27(i)(q) 1/16/2020  1,990,000   1,878,212   1,983,324 
Flexera Software, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 2/26/25(i) 1/25/2018  1,945,000   1,950,930   1,953,467 
QuickBase, Senior Secured Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 4/2/26 3/29/2019  1,970,000   1,962,273   1,950,300 
Intermedia , Senior Secured New Term Loan (First Lien), 7.00% (Libor + 6.00%), maturity 7/21/25 7/13/2018  1,960,000   1,948,624   1,945,300 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27(i) 12/11/2020  1,750,000   1,732,500   1,750,000 
GlobalLogic, Senior Secured Initial Term Loan, 2.99% (Libor + 2.75%), maturity 8/1/25 7/27/2018  1,715,313   1,708,011   1,702,448 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 4/18/25(i) 5/25/2018  1,706,250   1,714,482   1,693,453 
OEConnection, Senior Secured Initial Term Loan, 4.24% (Libor + 4.00%), maturity 9/25/26 9/24/2019  1,617,452   1,611,336   1,609,365 
Liaison, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 12/20/26 12/13/2019  1,485,000   1,481,489   1,485,000 
Navex Global, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 9/5/25(i) 8/15/2018  1,466,250   1,454,411   1,448,683 
Corsair, Senior Secured Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 8/28/24 3/29/2018  1,386,885   1,377,896   1,386,885 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (107.4%)(g)(h):              
               
Healthcare & Pharmaceuticals              
Radiology Partners, Senior Secured Term B Loan (First Lien), 4.46% (Libor + 4.25%), maturity 7/9/25 (i) 6/28/2018 $4,215,792  $4,353,545  $4,168,783 
Advarra, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/26 6/26/2019  4,145,626   4,117,204   4,145,626 
Young, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/7/24 11/6/2017  3,755,525   3,748,227   3,717,970 
American Vision Partners, Senior Secured Term Loan, 6.50% (Libor + 5.75%), maturity 9/30/27 (i)(k) 9/22/2021  3,537,645   3,473,547   3,475,319 
InHealth Medical Alliance, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 6/28/28 6/25/2021  3,491,250   3,457,150   3,377,784 
PharMedQuest, Senior Secured Initial Term Loan, 6.75% (Libor + 5.75%), maturity 10/31/24 (k) 11/6/2019  3,290,898   3,262,290   3,266,217 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 3/14/25 (i) 5/30/2018  3,239,110   3,251,658   3,169,814 
Waystar, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 10/22/26 (i) 9/19/2019  2,949,975   2,942,792   2,955,024 
Physicians Endoscopy, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%) PIK, maturity 8/18/23 8/18/2016  2,860,384   2,847,320   2,831,780 
Zelis RedCard, Senior Secured Term B-1 Loan, 3.71% (Libor + 3.50%), maturity 9/30/26 (i) 9/27/2019  2,420,641   2,410,411   2,410,524 
Soliant, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 3/31/28 3/26/2021  2,331,250   2,313,766   2,331,250 
Premise Health, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 7/10/25 8/15/2018  2,282,601   2,287,690   2,282,601 
nThrive, Senior Secured Initial Loan (Second Lien), 7.25% (Libor + 6.75%), maturity 12/17/29 (i) 11/19/2021  2,000,000   1,970,000   2,005,377 
Advanced Diabetes Supply, Senior Secured Term Loan December 2020, 6.25% (Libor + 5.25%), maturity 12/30/26 7/13/2021  1,995,000   1,975,300   1,995,000 
Upstream Rehabilitation, Senior Secured August 2021 Incremental Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 11/20/26 (i) 10/24/2019  1,971,344   1,968,456   1,975,578 
Alpaca, Senior Secured Term Loan, 5.75% (Libor + 4.75%), maturity 4/19/24 (i)(k) 4/19/2019  1,962,032   1,944,465   1,962,032 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 7/24/26 (i) 7/23/2019  1,955,000   1,949,852   1,949,129 
Gastro Health, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 7/3/28 7/2/2021  1,900,025   1,890,025   1,881,025 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 4.71% (Libor + 4.50%), maturity 12/22/25 12/19/2018  1,940,000   1,929,264   1,876,950 
CareCentrix, Senior Secured Initial Term Loan, 4.71% (Libor + 4.50%), maturity 4/3/25 (i) (j) 4/2/2018  1,604,069   1,599,839   1,600,168 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27 (i) 11/23/2020  1,488,750   1,466,850   1,494,123 
Therapy Brands, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/18/28 5/12/2021  1,496,250   1,489,050   1,488,769 
Blue Cloud, Unitranche, 6.00% (Libor + 5.00%), maturity 12/31/27 (i) 12/13/2021  1,500,000   1,485,000   1,485,000 
Quantum Health, Senior Secured Amendment No. 1 Refinancing Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27 12/18/2020  1,492,500   1,470,450   1,481,306 
Mission Veterinary Partners, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 4/27/28 (i) 12/15/2021  1,496,250   1,481,288   1,481,288 
CPS, Unitranche, 6.25% (Libor + 5.25%), maturity 2/28/25 (k) 3/1/2019  1,462,164   1,449,283   1,462,164 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/1/24 1/10/2019  1,155,903   1,153,742   1,124,116 
Solis Mammography, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 4/17/28 (i) 4/1/2021  1,060,833   1,051,433   1,059,560 
nThrive, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 4.00%), maturity 12/18/28 (i) 11/19/2021  1,000,000   995,000   1,002,016 
Wedgewood Pharmacy, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 3/31/28 2/24/2021  997,500   987,800   997,500 
Solis Mammography, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 8.00%), maturity 4/16/29 4/1/2021  1,000,000   985,600   992,500 
Allied Benefit Systems, Senior Secured Initial Term B Loan, 5.50% (Libor + 4.50%), maturity 11/18/26 10/21/2020  990,000   977,586   990,000 
Athena, Senior Secured Term B-1 Loan (First Lien), 4.46% (Libor + 4.25%), maturity 2/11/26 (i) 9/18/2019  980,038   973,278   981,573 
Dermatologists of Central States, Senior Secured Term Loan, 9.50% (Libor + 8.50%), maturity 4/20/22 (i)(k) 3/12/2020  957,461   957,461   957,461 
Alcami, Senior Secured Initial Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 7/14/25 7/12/2018  967,500   964,765   928,800 
UDG, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 8/19/28 (i) (m) 8/6/2021  631,875   625,651   634,124 
ImageFirst, Senior Secured Initial Term Loan, 5.25% (Libor + 4.50%), maturity 4/27/28 4/26/2021  588,182   585,414   585,241 
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 8/31/26 (i) 8/2/2019  526,700   522,986   527,034 
MedRisk, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 5/10/28 (i) 4/1/2021  498,750   493,900   499,590 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 7/24/26 (i) 10/1/2020  496,256   492,037   497,719 
AccentCare, Senior Secured 2021 Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 6/22/26 (i) 6/15/2021  497,500   497,500   496,317 
RMP & MedA/Rx, Senior Secured Term Loan, 5.50% (Libor + 4.50%), maturity 2/6/25 3/22/2021  490,625   485,865   489,398 
AmeriVet, Senior Secured Incremental Delayed Draw Term Loan, 5.75% (Libor + 4.75%), maturity 6/5/24 8/27/2021  463,710   449,085   461,391 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 2/6/25 2/27/2017  419,565   419,470   417,467 
ATI Physical Therapy, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/10/23 (i) 6/28/2016  343,442   343,870   332,194 
Alpaca, Senior Secured Revolver, 6.00% (Libor + 5.00%), maturity 4/19/24 (i)(k) 9/30/2019  129,426   125,543   129,426 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24 6/26/2019  -   (7,619)  - 
               
Services: Business              
LegalShield, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 12/15/28 (i) 12/7/2021  4,500,000   4,455,000   4,496,243 
InnovateMR, Unitranche, 6.75% (Libor + 5.75%), maturity 1/20/28 (i)(k) 12/16/2021  4,247,302   4,172,974   4,172,974 
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 9/23/25 (i) 9/26/2019  3,910,000   3,884,414   3,910,000 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 10/11/25 (i) 10/5/2018  3,880,000   3,877,022   3,891,124 
Alliance Environmental Group, Unitranche, 7.00% (Libor + 6.00%), maturity 12/30/27 (i) (k) 12/30/2021  3,675,497   3,588,742   3,601,987 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.46% (Libor + 3.25%), maturity 8/1/25 (i) 8/14/2018  3,121,087   3,106,891   3,104,654 
Fleetwash, Senior Secured Incremental Term Loan, 5.75% (Libor + 4.75%), maturity 10/1/24 9/25/2018  2,903,063   2,888,125   2,888,547 
CoolSys, Senior Secured Closing Date Initial Term Loan, 5.50% (Libor + 4.75%), maturity 8/11/28 (i) 8/4/2021  2,590,278   2,559,670   2,578,679 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/9/27 (i) 3/6/2020  2,462,500   2,443,427   2,470,032 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27 10/23/2020  2,364,497   2,342,229   2,346,764 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/10/25 2/6/2018  2,323,414   2,320,751   2,317,605 

 

The accompanying notes are an integral part of these financial statements.

11

11

 

Audax Credit BDC Inc.

Schedule of Investments(Continued)

As of December 31, 20202021

(Expressed in U.S. Dollars)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
High Tech Industries (continued)              
               
Infoblox, Senior Secured Term Loan, 4.50% (Libor + 3.75%), maturity 12/1/27(i) 10/7/2020 $1,000,000  $995,091  $1,002,861 
SmartBear, Senior Secured Term Loan, 4.75% (Libor + 4.25%), maturity 11/20/27(i) 11/20/2020  1,000,000   990,000   1,000,000 
Imperva, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/12/26(i) 9/23/2020  996,209   987,170   999,433 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/12/25(i) 3/2/2018  997,500   997,500   999,242 
Veracode, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 11/5/27 10/30/2020  1,000,000   990,167   992,500 
Unison, Senior Secured 2020 Term Loan, 8.00% (Libor + 7.00%), maturity 6/25/26(j) 6/25/2020  995,000   971,706   990,025 
Insurity, Senior Secured Closing Date Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 7/31/26(i) 7/18/2019  990,000   985,877   978,863 
Community Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 12/2/22 5/2/2018  825,760   822,759   815,438 
Sparta, Senior Secured New Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 8/21/24(i) 8/11/2017  787,901   788,125   787,901 
Global Knowledge, Senior Secured Initial Term Loan (Second Lien), 13.25% (Libor + 12.25%), maturity 1/20/22(i)(m) 9/10/2015  1,000,000   997,516   600,000 
Idera, Senior Secured Loan (Second Lien), 10.00% (Libor + 9.00%), maturity 6/28/27 2/10/2020  500,000   504,610   500,000 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 4.00%), maturity 10/16/26(i) 3/13/2020  496,250   469,743   497,274 
HelpSystems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/19/26(i) 12/19/2019  496,250   495,095   496,786 
Masergy, Senior Secured 2017 Replacement Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 12/15/23 12/14/2016  479,908   478,749   479,908 
MultiPlan, Senior Secured Initial Term Loan, 3.75% (Libor + 2.75%), maturity 6/7/23(i) 12/12/2018  431,919   428,247   431,919 
Endurance Int'l Group, Senior Secured Refinancing Loan (2018), 4.75% (Libor + 3.75%), maturity 2/9/23(i) 6/8/2017  386,371   385,875   386,675 
               
Services: Business              
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 9/23/25 9/26/2019  3,950,000   3,919,209   3,940,125 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 10/11/25 10/5/2018  3,920,000   3,916,337   3,880,800 
Addison, Senior Secured Initial Term Loan, 4.99% (Libor + 4.75%), maturity 4/15/26 4/4/2019  2,955,000   2,910,360   2,947,613 
Fleetwash, Senior Secured Incremental Term Loan, 5.75% (Libor + 4.75%), maturity 10/1/24 9/25/2018  2,932,838   2,913,011   2,918,173 
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 2/9/26(i) 1/16/2019  2,954,981   2,937,415   2,900,853 
Aimbridge, Senior Secured Initial Term Loan (2019) (First Lien), 3.99% (Libor + 3.75%), maturity 2/2/26(i) 1/17/2019  2,952,625   2,944,493   2,812,180 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/9/27(i) 3/6/2020  2,487,500   2,464,451   2,505,517 
Allied Universal, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 7/10/26(i) 6/27/2019  2,466,122   2,450,635   2,468,305 
HireRight, Senior Secured Initial Term Loan (Second Lien), 7.49% (Libor + 7.25%), maturity 7/10/26 7/2/2018  2,500,000   2,482,759   2,462,500 
Newport Group, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 9/12/25(i) 8/9/2018  2,446,206   2,435,371   2,391,166 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 6/19/24 6/30/2017  2,369,662   2,369,662   2,343,003 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/10/25 2/6/2018  2,335,958   2,331,487   2,335,958 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27 10/23/2020  2,030,769   2,005,370   2,015,538 
Veregy, Senior Secured Incremental Term Loan, 7.00% (Libor + 6.00%), maturity 11/3/27(i) 11/2/2020  2,000,000   1,940,783   1,980,000 
Eliassen Group, Senior Secured Initial Term B Loan, 4.49% (Libor + 4.25%), maturity 11/5/24 10/19/2018  1,485,620   1,480,402   1,485,620 
First Advantage, Senior Secured Term Facility (First Lien), 3.49% (Libor + 3.25%), maturity 1/31/27(i) 1/23/2020  1,493,747   1,480,164   1,481,489 
Quantum Health, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 5.00%), maturity 12/22/27(i) 12/18/2020  1,500,000   1,477,500   1,477,500 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 5.50% (Libor + 4.50%), maturity 3/27/24 3/26/2018  1,459,391   1,455,728   1,442,973 
DBi Services, Senior Secured Term B Loan (Second Lien), 9.00% PIK, maturity 2/2/26 3/26/2019  1,379,149   1,379,149   1,379,149 
WCG, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/8/27(i) 12/13/2019  995,000   985,758   1,000,060 
Diversified, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 12/23/23 4/19/2019  982,575   977,610   980,119 
Franklin Energy, Senior Secured Term B Loan (First Lien), 4.24% (Libor + 4.00%), maturity 8/14/26 8/14/2019  987,500   985,288   970,219 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/4/27(i) 12/1/2020  498,747   498,747   498,231 
Worley Claims Services, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 6/3/26 10/31/2019  493,734   490,417   493,734 
Therma Holdings, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/16/27(i) 12/11/2020  419,355   415,161   419,355 
               
Chemicals, Plastics & Rubber              
Plaskolite, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 12/15/25(i) 12/12/2018  3,920,000   3,865,981   3,919,776 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/30/24 5/11/2017  3,392,624   3,382,274   3,316,290 
DuBois Chemicals, Senior Secured Term Loan (Second Lien), 8.74% (Libor + 8.50%), maturity 9/30/27 10/8/2019  3,000,000   2,969,107   2,977,500 
Vertellus, Senior Secured Term Loan Facility, 7.00% (Libor + 6.00%), maturity 12/21/27(i) 12/18/2020  3,000,000   2,925,000   2,925,000 
Universal Fiber Systems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 10/4/21 10/9/2015  2,731,078   2,728,788   2,642,318 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 1/31/25(i) 1/26/2018  2,654,925   2,662,649   2,533,273 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 12/12/25(i) 11/5/2018  2,451,228   2,431,275   2,272,229 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 6.99% (Libor + 6.75%), maturity 9/6/26 8/16/2018  2,000,000   2,001,952   1,980,000 
Q Holding, Senior Secured Term B Loan (2019), 6.00% (Libor + 5.00%), maturity 12/31/23 8/20/2019  1,975,000   1,967,237   1,925,625 
Zep, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/12/24(i) 8/11/2017  1,936,212   1,934,630   1,904,232 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 4.74% (Libor + 4.50%), maturity 9/30/26 10/8/2019  1,795,385   1,757,677   1,781,919 
Prince Minerals, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 3/31/25 3/22/2018  972,500   969,266   962,775 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 10/28/24(i) 11/30/2018  977,330   963,591   933,996 
Spartech, Senior Secured Term Loan, 5.50% (Libor + 4.50%), maturity 10/17/25 11/5/2019  823,333   812,351   823,333 
Polytek, Senior Secured Term Loan, 6.00% (Libor + 5.00%), maturity 9/20/24(i) 12/23/2020  500,000   495,000   495,000 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 9/6/25(i) 11/7/2018  497,455   464,093   485,309 
Vertellus, Senior Secured Revolving Facility, 7.00% (Libor + 6.00%), maturity 12/22/25(i) 12/18/2020  -   (12,156)  - 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Services: Business (continued)              
The Facilities Group, Unitranche, 6.75% (Libor + 5.75%), maturity 11/30/27 (i) 12/10/2021 $2,258,671  $2,236,084  $2,236,084 
Mediaocean, Senior Secured Initial Term Loan, 4.00% (Libor + 3.50%), maturity 12/15/28 (i) 12/9/2021  2,000,000   1,980,000   2,001,789 
TRC Companies, Senior Secured Initial Term Loan (Second Lien), 7.25% (Libor + 6.75%), maturity 12/7/29 11/19/2021  2,000,000   1,980,000   1,985,000 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/9/27 (i) 9/17/2020  1,980,000   1,972,543   1,984,655 
Veregy, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 11/3/27 11/2/2020  1,980,000   1,928,567   1,960,200 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 6/19/24 6/30/2017  1,939,630   1,939,630   1,939,630 
Insight Global, Senior Secured Closing Date Term Loan, 6.75% (Libor + 6.00%), maturity 9/22/28 (j) 9/22/2021  1,496,250   1,463,626   1,492,509 
Epic Staffing Group, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 2/5/27 2/3/2021  1,489,968   1,460,568   1,489,968 
Eliassen Group, Senior Secured Initial Term B Loan, 4.46% (Libor + 4.25%), maturity 11/5/24 10/19/2018  1,478,116   1,474,158   1,478,116 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 5.50% (Libor + 4.50%), maturity 3/27/24 3/26/2018  1,444,391   1,441,757   1,429,947 
First Advantage, Senior Secured Term B-1 Loan (First Lien), 2.96% (Libor + 2.75%), maturity 1/31/27 (i) 1/23/2020  1,100,312   1,089,150   1,097,467 
Veritext, Senior Secured Initial Term Loan (Second Lien), 6.96% (Libor + 6.75%), maturity 7/31/26 8/14/2018  1,000,000   996,678   997,500 
Divisions Maintenance Group, Senior Secured Term B Loan, 5.50% (Libor + 4.75%), maturity 5/27/28 (i) 5/21/2021  997,500   988,100   997,500 
TRC Companies, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 12/8/28 (i) 11/19/2021  1,000,000   995,000   996,581 
trustaff Management, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/6/28 (i) 12/9/2021  997,487   994,994   994,994 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/4/27 (i) 12/1/2020  989,956   989,956   994,805 
WCG, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 1/8/27 (i) 12/13/2019  985,000   977,291   989,251 
Diversified, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 12/23/23 4/19/2019  899,347   895,961   892,602 
Secretariat International, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 12/29/28 (i) 12/16/2021  850,000   845,750   845,750 
Therma Holdings, Senior Secured Initial Term Loan (2021), 4.75% (Libor + 4.00%), maturity 12/16/27 (i) 12/11/2020  498,750   497,600   499,234 
System One, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 3/2/28 (i) 1/28/2021  497,500   495,300   497,500 
Insight Global, Senior Secured Revolving Loan, 6.75% (Libor + 6.00%), maturity 9/22/27 9/23/2021  67,089   67,089   66,921 
Alliance Environmental Group, Senior Secured Revolving Loan, 7.00% (Libor + 6.00%), maturity 12/30/27 (i) (k) 12/30/2021  -   (6,623)  - 
               
High Tech Industries              
Qlik, Senior Secured 2021 Refinancing Term Loan, 4.21% (Libor + 4.00%), maturity 4/26/24 (i) 3/29/2019  3,900,600   3,886,181   3,910,108 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/1/27 (i) 9/29/2020  3,473,750   3,460,658   3,487,188 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 8/14/26 (i) 8/9/2019  3,091,100   3,087,301   3,091,058 
Ivanti Software, Senior Secured 2021 Specified Refinancing Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 12/1/27 (i) 11/20/2020  2,985,000   2,947,757   2,988,121 
Infogroup, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 4/3/23 (i) 3/28/2017  2,859,887   2,849,374   2,736,884 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27 (i) 12/11/2020  2,632,290   2,607,384   2,637,045 
Idera, Senior Secured Term B-1 Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/2/28 (i) 6/27/2017  2,599,317   2,598,562   2,600,118 
Precisely, Senior Secured Third Amendment Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 4/24/28 (i) 3/19/2021  2,493,750   2,481,850   2,492,448 
Flexera Software, Senior Secured Term B-1 Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/3/28 (i) 2/16/2020  2,390,742   2,390,742   2,396,181 
PracticeTek, Unitranche, 5.71% (Libor + 5.50%), maturity 11/23/27 (i)(k) 11/22/2021  2,275,763   2,210,067   2,230,248 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 3/5/27 (i)(n) 1/16/2020  1,970,012   1,877,597   1,959,343 
QuickBase, Senior Secured Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 4/2/26 3/29/2019  1,950,000   1,943,834   1,940,250 
Intermedia , Senior Secured New Term Loan (First Lien), 7.00% (Libor + 6.00%), maturity 7/21/25 (i) 7/13/2018  1,940,000   1,931,203   1,931,121 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 4/18/25 (i) 5/25/2018  1,641,251   1,647,580   1,642,542 
OEConnection, Senior Secured Initial Term Loan, 4.21% (Libor + 4.00%), maturity 9/25/26 (i) 9/24/2019  1,608,578   1,603,485   1,606,567 
Digital Room, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 5.25%), maturity 12/21/28 (i) 12/16/2021  1,500,000   1,485,000   1,493,953 
Navex Global, Senior Secured Initial Term Loan (First Lien), 3.46% (Libor + 3.25%), maturity 9/5/25 (i) 8/15/2018  1,451,250   1,441,800   1,446,663 
ORBCOMM, Senior Secured Closing Date Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 9/1/28 (i) 6/17/2021  997,500   992,500   999,322 
Infoblox, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 12/1/27 (i) 10/7/2020  995,000   990,862   997,873 
Veracode, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 11/5/27 10/30/2020  992,500   984,143   992,500 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/12/25 (i) 3/2/2018  987,500   987,500   991,652 
SmartBear, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 3/3/28 11/20/2020  995,000   985,600   990,025 
HelpSystems, Senior Secured Seventh Amendment Refinancing Loan (First Lien), 4.75% (Libor + 4.00%), maturity 11/19/26 (i) 12/19/2019  989,981   987,772   989,981 
Imperva, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/12/26 (i) 9/23/2020  986,095   978,665   986,963 
Unison, Unitranche, 8.00% (Libor + 7.00%), maturity 6/25/26 (k) 6/25/2020  985,000   965,242   985,000 
Cloudera, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 10/8/28 (i) 8/10/2021  500,000   495,030   499,716 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 4.00%), maturity 10/16/26 (i) 3/13/2020  491,250   469,316   491,532 
PracticeTek, Senior Secured Revolving Loan, 5.71% (Libor + 5.50%), maturity 11/23/27 (i)(k) 11/22/2021  -   (7,156)  - 
               
Containers, Packaging & Glass              
InMark, Senior Secured Incremental Term Loan, 7.00% (Libor + 6.00%), maturity 12/23/26 (i)(k) 12/10/2021  3,740,625   3,653,125   3,665,813 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/30/24 (j) 5/11/2017  3,353,069   3,345,694   3,244,094 
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 7/18/26 (i) 7/17/2019  2,879,678   2,868,302   2,861,680 
Brook & Whittle, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 4.00%), maturity 12/14/28 (i) 12/9/2021  2,500,000   2,477,355   2,495,651 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/30/27 (i) 9/25/2020  2,468,813   2,460,773   2,473,420 
Paragon Films, Senior Secured Closing Date Term Loan (First Lien), 5.50% (Libor + 5.00%), maturity 12/16/28 (i) 12/15/2021  2,000,000   1,978,515   1,980,000 
Resource Label Group, Senior Secured Closing Date Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/7/28 (i) 7/2/2021  1,879,747   1,870,648   1,881,331 
TricorBraun, Senior Secured Closing Date Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 3/3/28 (i) 1/29/2021  1,828,762   1,820,245   1,819,627 
Potters Industries, Senior Secured Initial Term Loan, 4.21% (Libor + 4.00%), maturity 12/14/27 (i) 11/19/2020  1,488,750   1,476,336   1,494,204 
Technimark, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 7/7/28 (i) 6/30/2021  1,492,500   1,485,300   1,490,683 
Tekni-Plex, Senior Secured Tranche B-3 Initial Term Loan, 4.50% (Libor + 4.00%), maturity 9/15/28 (i) 7/29/2021  1,054,520   1,052,080   1,056,280 
Lacerta, Senior Secured Term Loan, 6.25% (Libor + 5.50%), maturity 12/30/26 2/8/2021  990,000   980,150   990,000 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 7/31/26 (i) 7/25/2019  980,000   978,319   979,185 
Tank Holding, Senior Secured 2020 Refinancing Term Loan (First Lien), 3.46% (Libor + 3.25%), maturity 3/26/26 (i) 3/21/2019  977,500   974,681   971,563 
Applied Adhesives, Senior Secured Term A Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 3/12/2021  563,158   557,688   558,934 
Golden West Packaging, Senior Secured Initial Term Loan, 6.00% (Libor + 5.25%), maturity 12/1/27 11/29/2021  500,000   495,000   496,250 
Pregis Corporation, Senior Secured Third Amendment Refinancing Term Loan (First Lien), 4.50% (Libor + 4.00%), maturity 7/31/26 12/9/2020  498,750   496,681   492,516 
Applied Adhesives, Senior Secured Revolving Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 3/12/2021  7,111   6,400   7,058 

 

The accompanying notes are an integral part of these financial statements.

12

12

 

Audax Credit BDC Inc.

Schedule of Investments(Continued)

As of December 31, 20202021

(Expressed in U.S. Dollars)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Aerospace & Defense              
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 7/26/24 10/1/2019 $5,275,326  $5,226,445  $5,248,949 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.74% (Libor + 3.50%), maturity 4/6/26(i) 1/24/2019  3,304,620   3,295,719   3,180,284 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 4/30/26 5/10/2018  2,000,000   2,008,327   1,945,000 
Whitcraft, Unitranche, 7.00% (Libor + 6.00%), maturity 4/3/23 3/6/2020  1,982,452   1,973,233   1,942,803 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.74% (Libor + 3.50%), maturity 4/6/26(i) 1/24/2019  1,776,677   1,771,892   1,709,830 
Tronair, Senior Secured Initial Term Loan (First Lien), 4.99% (Libor + 4.75%), maturity 9/8/23 9/30/2016  1,441,086   1,436,497   1,305,624 
Amentum, Senior Secured Tranche 2 Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 1/29/27(i) 10/29/2020  1,000,000   980,364   1,010,710 
Eton, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 5/1/25(i) 2/5/2020  993,645   990,088   997,154 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 1/29/27(i) 1/24/2020  995,000   964,975   995,630 
API Technologies, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 5/9/26 1/15/2020  989,950   962,144   978,813 
Eton, Senior Secured Initial Term Loan (Second Lien), 8.24% (Libor + 8.00%), maturity 5/1/26 2/5/2020  500,000   495,340   498,750 
Novaria Group, Senior Secured Initial Term Loan, 6.25% (Libor + 5.25%), maturity 1/27/27 1/24/2020  481,818   477,197   477,000 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/30/25(i) 7/18/2019  492,718   490,562   464,492 
               
Banking, Finance, Insurance & Real Estate              
American Beacon Advisors, Senior Secured Tranche C Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 4/30/23 10/31/2017  2,500,000   2,506,156   2,500,000 
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 3/18/27(i) 2/6/2020  2,487,768   2,472,789   2,468,652 
Kestra Financial, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 6/3/26 4/29/2019  1,975,000   1,959,039   1,970,063 
Integro Insurance Brokers, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%), maturity 10/31/22 10/9/2015  1,959,163   1,941,037   1,944,469 
Orion, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 9/24/27(i) 8/4/2020  1,496,250   1,481,250   1,505,340 
Advisor Group, Senior Secured Initial Term B Loan, 5.24% (Libor + 5.00%), maturity 7/31/26(i) 1/31/2020  1,485,000   1,473,076   1,478,274 
EPIC Insurance, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 9/6/24 10/5/2017  1,455,000   1,453,049   1,447,725 
HighTower, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 1/31/25 10/14/2020  1,254,919   1,234,708   1,245,507 
Mitchell International, Senior Secured Amendment No. 2 New Term Loan Facility (First Lien), 4.75% (Libor + 4.25%), maturity 11/29/24(i) 7/6/2020  997,500   945,583   1,001,159 
Aperio, Senior Secured Initial Commitment, 5.24% (Libor + 5.00%), maturity 10/25/24 12/12/2018  933,889   930,413   933,889 
Sedgwick Claims, Senior Secured Initial Term Loan, 3.49% (Libor + 3.25%), maturity 12/31/25(i) 2/12/2020  494,949   494,373   489,808 
               
Services: Consumer              
A Place For Mom, Senior Secured Term Loan, 4.75% (Libor + 3.75%), maturity 8/10/24 7/28/2017  2,638,868   2,638,424   2,586,091 
Cambium Learning, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 12/18/25(i) 12/18/2018  2,449,960   2,356,145   2,449,996 
Weld North, Senior Secured Term Loan B (First Lien), 4.75% (Libor + 4.00%), maturity 12/21/27(i) 12/21/2020  2,444,868   2,444,868   2,438,756 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 5/14/26(i) 5/8/2019  2,069,000   2,064,997   2,032,545 
LegalShield, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 5/1/25(i) 11/21/2018  1,927,000   1,916,403   1,916,690 
Ned Stevens, Senior Secured Term A Loan, 6.75% (Libor + 5.75%), maturity 9/30/25(j) 9/30/2019  1,501,961   1,480,069   1,486,941 
Smart Start, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 8/19/27 8/14/2020  997,500   987,865   995,006 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 7/30/25(i) 7/26/2018  977,500   975,779   932,975 
LegalShield, Senior Secured New Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/1/25 9/11/2020  498,750   491,474   495,009 
StubHub, Senior Secured USD Term B Loan, 3.74% (Libor + 3.50%), maturity 2/12/27 1/31/2020  495,000   492,695   475,200 
Ned Stevens, Senior Secured Revolver, 5.75% (Libor + 4.75%), maturity 9/30/25(j) 9/30/2019  -   (2,614)  - 
               
Automotive              
Mavis, Senior Secured Closing Date Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 3/20/25(i) 3/15/2018  3,829,530   3,817,514   3,788,854 
Highline, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 11/9/27 10/29/2020  2,863,636   2,786,320   2,849,318 
Les Schwab Tire, Senior Secured Initial Term Loan, 4.25% (Libor + 3.50%), maturity 11/2/27 10/26/2020  2,000,000   1,990,162   1,985,000 
Truck Hero, Senior Secured Initial Term Loan (Second Lien), 9.25% (Libor + 8.25%), maturity 4/21/25(i) 5/23/2017  1,800,000   1,798,743   1,800,000 
Safe Fleet, Senior Secured Tranche B-1 Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 2/3/25 11/28/2018  975,849   955,515   961,212 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 6.75%), maturity 2/2/26 2/7/2020  500,000   489,628   492,500 
IXS, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 3/5/27(i) 2/27/2020  302,710   300,050   302,710 
               
Containers, Packaging & Glass              
ProAmpac, Senior Secured 2020-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/3/25 11/2/2020  2,977,335   2,977,335   2,955,005 
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 7/18/26(i) 7/17/2019  2,909,213   2,895,839   2,880,121 
Potters Industries, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/14/27(i) 11/19/2020  1,500,000   1,485,273   1,498,125 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 7/31/26 7/25/2019  990,000   987,979   990,000 
Tank Holding, Senior Secured 2020 Refinancing Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 3/26/26(i) 3/21/2019  987,500   984,017   972,735 
Pregis Corporation, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/31/26(i) 12/9/2020  500,000   497,546   497,500 
Berlin Packaging, Senior Secured Initial Term Loan (First Lien), 3.00% (Libor + 3.00%), maturity 11/7/25(i) 3/11/2020  494,924   474,388   490,252 
TricorBraun, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 11/30/23(i) 3/26/2019  482,347   482,347   481,141 
Alpha Packaging, Senior Secured Tranche B-1 Term Loan, 7.00% (Libor + 6.00%), maturity 11/12/21 7/7/2017  480,087   479,657   478,887 
               
Capital Equipment              
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 9/30/24(i) 4/20/2018  2,037,185   2,037,185   1,951,145 
BAS, Senior Secured Repricing Term Loan, 4.75% (Libor + 3.75%), maturity 5/21/24 11/7/2017  1,949,363   1,951,659   1,944,490 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/1/25 2/19/2020  1,500,000   1,479,256   1,496,250 
Edward Don, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 7/2/25 6/26/2018  1,463,794   1,459,176   1,378,894 
Cole-Parmer, Senior Secured Closing Date Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 11/4/26 10/29/2019  992,500   988,663   987,538 
TriMark, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 8/28/24 6/13/2018  983,612   889,075   600,003 
Restaurant Technologies, Senior Secured Initial Loan (Second Lien), 6.74% (Libor + 6.50%), maturity 10/1/26 2/11/2020  500,000   503,507   496,250 
Duravant, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/19/24 3/5/2020  494,949   494,949   493,712 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/2/24 10/24/2018  488,665   491,752   486,222 

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
        ��      
Banking, Finance, Insurance & Real Estate              
Confluence, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 7/31/28 (i) (j) 7/22/2021 $4,000,000  $3,980,000  $3,980,000 
Ascensus, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.50%), maturity 8/2/28 (i) 11/17/2021  3,000,000   2,985,000   2,994,898 
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.21% (Libor + 4.00%), maturity 3/18/27 (i) 2/6/2020  2,462,828   2,449,570   2,460,960 
Newport Group, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 9/12/25 (i) 8/9/2018  2,421,181   2,412,499   2,419,686 
American Beacon Advisors, Senior Secured Tranche D Term Loan (Second Lien), 9.00% (Libor + 8.00%), maturity 4/30/25 10/31/2017  2,117,133   2,122,175   2,117,133 
Kestra Financial, Senior Secured Initial Term Loan, 4.46% (Libor + 4.25%), maturity 6/3/26 (i) 4/29/2019  1,955,000   1,941,773   1,949,240 
Integro Insurance Brokers, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%), maturity 10/31/22 10/9/2015  1,930,484   1,932,912   1,867,743 
EPIC Insurance, Unitranche, 6.00% (Libor + 5.25%), maturity 9/29/28 8/27/2021  1,599,440   1,568,405   1,591,442 
Orion, Senior Secured 2021 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 9/24/27 (i) 8/4/2020  1,485,028   1,470,028   1,489,469 
SIAA, Unitranche, 7.25% (Libor + 6.25%), maturity 4/28/28 4/21/2021  1,172,517   1,152,547   1,172,517 
Advisor Group, Senior Secured Term B-1 Loan, 4.71% (Libor + 4.50%), maturity 7/31/26 (i) 1/31/2020  1,029,433   1,025,199   1,033,203 
LERETA, Senior Secured Initial Term Loan, 6.00% (Libor + 5.25%), maturity 7/30/28 (i) 7/27/2021  997,500   987,500   995,006 
Community Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 12/2/22 5/2/2018  817,262   815,063   811,133 
Sedgwick Claims, Senior Secured Initial Term Loan, 3.46% (Libor + 3.25%), maturity 12/31/25 (i) 2/12/2020  489,899   489,422   486,901 
               
Chemicals, Plastics & Rubber              
DuBois Chemicals, Senior Secured Term Loan (Second Lien) - 2019, 8.71% (Libor + 8.50%), maturity 9/30/27 10/8/2019  3,000,000   2,975,353   2,985,000 
Vertellus, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 12/22/27 12/18/2020  2,977,500   2,905,500   2,970,056 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 1/31/25 (i) 1/26/2018  2,627,625   2,633,804   2,574,630 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.96% (Libor + 3.75%), maturity 12/12/25 (i) 11/5/2018  2,426,216   2,407,584   2,403,249 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 6.96% (Libor + 6.75%), maturity 9/6/26 (i) 8/16/2018  2,000,000   2,001,674   1,996,853 
USALCO, Senior Secured Term Loan A, 7.00% (Libor + 6.00%), maturity 10/19/27 10/26/2021  2,000,000   1,980,000   1,985,000 
Meridian Adhesives Group, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 7/24/28 7/16/2021  2,000,000   1,980,300   1,985,000 
Q Holding, Senior Secured Term B Loan (2019), 6.00% (Libor + 5.00%), maturity 12/29/23 8/20/2019  1,955,000   1,948,615   1,935,450 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 4.71% (Libor + 4.50%), maturity 9/30/26 10/8/2019  1,777,250   1,745,650   1,763,920 
Prince Minerals, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 3/31/25 (i) 3/22/2018  962,500   959,965   959,012 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 10/28/24 (i) 11/30/2018  967,254   956,813   951,552 
Polytek, Senior Secured Term Loan, 5.75% (Libor + 4.75%), maturity 9/20/24 12/23/2020  495,081   490,381   492,606 
Ascensus Specialties, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 6/30/28 (i) 12/3/2021  498,744   488,744   488,770 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 9/6/25 (i) 11/7/2018  492,366   465,615   487,876 
Vertellus, Senior Secured Revolving Credit Loan, 7.00% (Libor + 6.00%), maturity 12/22/25 12/18/2020  106,972   94,817   106,705 
USALCO, Senior Secured Revolving Loan, 7.00% (Libor + 6.00%), maturity 10/19/26 10/26/2021  24,194   20,968   24,012 
               
Aerospace & Defense              
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 7/26/24 10/1/2019  5,222,307   5,181,858   5,222,307 
HDT Global, Senior Secured Initial Term Loan, 6.50% (Libor + 5.75%), maturity 7/8/27 6/30/2021  3,412,500   3,307,500   3,378,375 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.71% (Libor + 3.50%), maturity 4/6/26 (i) 1/24/2019  3,271,155   3,264,358   3,197,669 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 4/30/26 5/10/2018  2,000,000   2,007,007   1,920,000 
Whitcraft, Unitranche, 7.00% (Libor + 6.00%), maturity 4/3/23 3/6/2020  1,962,398   1,954,769   1,918,244 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.71% (Libor + 3.50%), maturity 4/6/26 (i) 1/24/2019  1,758,685   1,755,031   1,719,177 
Tronair, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%) cash, 0.50% PIK, maturity 9/8/23 9/30/2016  1,372,158   1,369,408   1,325,504 
Peraton, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/1/28 (i) 2/23/2021  992,500   988,100   995,090 
Amentum, Senior Secured Tranche 2 Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 1/29/27 (i) 10/29/2020  992,500   975,947   994,823 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 1/29/27 (i) 1/24/2020  985,000   960,031   974,961 
API Technologies, Senior Secured Initial Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 5/9/26 1/15/2020  979,900   956,544   962,751 
BlueHalo, Unitranche, 7.00% (Libor + 6.00%), maturity 10/31/25 11/17/2021  499,027   491,527   495,284 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/30/25 (i) 7/18/2019  487,900   486,144   470,917 
Novaria Group, Senior Secured Initial Term Loan, 6.50% (Libor + 5.50%), maturity 1/27/27 1/24/2020  481,818   477,971   466,159 
BlueHalo, Senior Secured Revolving Loan, 7.00% (Libor + 6.00%), maturity 10/31/25 11/17/2021  25,305   23,815   25,115 
               
Capital Equipment              
FloWorks, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 5.00%), maturity 12/27/28 (i) 12/27/2021  4,000,000   3,850,000   3,960,000 
Plaskolite, Senior Secured 2021-1 Refinancing Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/15/25 (i) 12/12/2018  3,880,675   3,836,318   3,850,705 
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 3.96% (Libor + 3.75%), maturity 9/30/24 (i) 4/20/2018  2,037,185   2,037,185   2,011,277 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/1/25 (i) 2/19/2020  1,500,000   1,482,834   1,506,460 
Edward Don, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 7/2/25 6/26/2018  1,370,943   1,367,973   1,302,395 
Flow Control Group, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/31/28 (i) 3/17/2021  1,184,544   1,181,906   1,184,320 
TriMark, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 8/28/24 6/13/2018  973,447   902,470   759,288 
Culligan, Senior Secured Initial Term B Loan, 4.50% (Libor + 4.00%), maturity 7/31/28 (i) 6/17/2021  500,000   497,500   502,107 
Restaurant Technologies, Senior Secured Initial Loan (Second Lien), 6.71% (Libor + 6.50%), maturity 10/1/26 2/11/2020  500,000   503,008   498,750 
Infinite Electronics, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/2/28 (i) 2/24/2021  497,500   496,400   496,938 
Duravant, Senior Secured Incremental Amendment No. 5 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 5/19/28 (i) 3/5/2020  492,424   492,424   492,387 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/2/24 (i) 10/24/2018  483,627   486,011   485,701 
Flow Control Group, Senior Secured Amendment No. 1 Delayed Draw Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/31/28 (i) 7/27/2021  421,493   420,243   421,414 

The accompanying notes are an integral part of these financial statements.

13

13

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of December 31, 20202021

(Expressed in U.S. Dollars)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Construction & Building              
PlayPower, Senior Secured Initial Term Loan, 5.74% (Libor + 5.50%), maturity 5/8/26 5/10/2019 $1,858,806  $1,858,806  $1,826,277 
Tangent, Senior Secured Closing Date Term Loan (First Lien), 4.99% (Libor + 4.75%), maturity 11/30/24 10/2/2019  1,811,195   1,799,386   1,802,139 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 9/29/25 2/7/2020  1,500,000   1,469,821   1,488,750 
DiversiTech Corporation, Senior Secured Tranche B-1 Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 6/3/24(i) 2/23/2018  1,459,711   1,450,295   1,456,062 
PlayCore, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 9/30/24 9/18/2017  966,918   965,369   959,666 
CHI Overhead Doors, Senior Secured Third Amendment Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 7/31/25 7/28/2015  621,975   618,961   621,975 
Hoffman Southwest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 8/14/23 5/16/2019  517,526   515,491   513,645 
DiversiTech Corporation, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 6/2/25 2/5/2020  500,000   489,906   498,750 
Acuren, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 1/23/27(i) 1/17/2020  496,250   493,945   496,809 
               
Transportation: Cargo              
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 10/12/24(i) 11/20/2018  3,608,953   3,605,359   3,551,633 
Transplace, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 10/7/24(i) 4/10/2018  2,441,354   2,436,251   2,437,864 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27 11/12/2020  2,000,000   1,978,572   1,985,000 
               
Wholesale              
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 3/20/25 3/16/2018  3,895,820   3,896,287   3,866,602 
PetroChoice, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 8/19/22 9/2/2015  1,895,184   1,881,515   1,847,805 
ABB Optical, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 6/15/23 6/14/2016  1,439,868   1,439,074   1,407,471 
               
Consumer Goods: Non-durable              
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 10/26/23(i) 11/2/2016  2,202,584   2,191,908   2,040,686 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 6.25% (Libor + 5.00%), maturity 9/11/23 9/29/2016  1,906,766   1,898,262   1,885,315 
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/16/24(i) 10/17/2018  977,352   982,680   942,014 
               
Forest Products & Paper              
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/21/23(i) 11/9/2016  2,418,968   2,411,531   2,162,916 
Loparex, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 7/31/26(i) 7/29/2019  1,481,250   1,468,881   1,470,141 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 10.50% (Libor + 9.50%), maturity 11/21/24 2/7/2020  1,250,000   1,250,000   1,209,375 
               
Beverage, Food & Tobacco              
Sovos Brands, Senior Secured Initial Term Loan (2018), 4.99% (Libor + 4.75%), maturity 11/20/25 11/16/2018  2,458,728   2,442,754   2,458,728 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien) , 4.75% (Libor + 3.75%), maturity 8/25/25 8/22/2018  1,955,000   1,948,780   1,935,450 
               
Media: Advertising, Printing & Publishing              
Ansira, Unitranche, 7.50% (Libor + 6.50%) PIK, maturity 12/20/24 12/20/2016  2,014,998   2,005,963   1,611,999 
Northstar, Senior Secured Term Loan, 6.75% (Libor + 6.25%) cash, 1.00% PIK, maturity 6/7/24 5/8/2017  1,394,653   1,394,653   1,349,327 
Vestcom International, Senior Secured L/C Collaterilized, 5.00% (Libor + 4.00%), maturity 12/19/23 12/16/2016  779,751   781,907   773,903 
               
Consumer Goods: Durable              
Strategic Partners, Senior Secured Initial Term Loan, 4.75% (Libor + 3.75%), maturity 6/30/23(i) 7/29/2016  2,285,922   2,283,635   2,285,922 
               
Retail              
Grocery Outlet, Senior Secured 2020 Term Loan (First Lien), 2.99% (Libor + 2.75%), maturity 10/22/25(i) 10/17/2018  1,269,483   1,267,698   1,270,891 
               
Metals & Mining              
Dynatect, Senior Secured Term B Loan, 5.50% (Libor + 4.50%), maturity 9/30/22 8/16/2019  987,897   987,367   968,139 
               
Hotel, Gaming & Leisure              
Auto Europe, Senior Secured Initial Dollar Term Loan, 6.00% (Libor + 5.00%), maturity 10/21/23 10/19/2016  1,119,231   1,112,979   895,385 
               
Health Care Equipment & Services              
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 8/31/26(i) 8/2/2019  532,087   527,684   526,939 
               
Total Bank Loans       $357,702,705  $354,395,516 

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Services: Consumer              
A Place For Mom, Senior Secured Term Loan, 4.75% (Libor + 3.75%), maturity 2/10/26 7/28/2017 $2,611,593  $2,611,369  $2,565,890 
Weld North, Senior Secured 2021 Term Loan, 4.75% (Libor + 3.75%), maturity 12/21/27 (i) 12/21/2020  2,420,419   2,420,419   2,424,416 
Smart Start, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.50%), maturity 12/16/28 (i) 12/10/2021  2,000,000   1,980,000   1,980,000 
Smart Start, Senior Secured Term B Loan (Second Lien), 8.25% (Libor + 7.75%), maturity 12/16/29 (i) 12/10/2021  2,000,000   1,960,000   1,960,000 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.21% (Libor + 3.00%), maturity 5/14/26 (i) 5/8/2019  1,532,172   1,529,857   1,527,120 
FullBloom, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 12/15/28 (i) 12/10/2021  1,500,000   1,485,000   1,485,000 
Ned Stevens, Senior Secured Term A Loan, 6.50% (Libor + 5.50%), maturity 9/30/25 (k) 9/30/2019  1,405,229   1,388,225   1,405,229 
Teaching Strategies, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 8/31/28 8/19/2021  1,000,000   990,060   1,000,000 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.46% (Libor + 4.25%), maturity 7/30/25 (i) 7/26/2018  967,500   966,117   941,386 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 6.50% (Libor + 5.50%), maturity 5/9/25 (i) 5/4/2018  718,618   712,798   710,570 
Ned Stevens, Senior Secured Revolving Loan, 6.50% (Libor + 5.50%), maturity 9/30/25 (k) 9/30/2019  -   (2,614)  - 
               
Transportation: Cargo              
Evans Network, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 8/19/28 (i) 8/6/2021  3,664,286   3,624,286   3,652,180 
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 10/12/24 (i) 11/20/2018  3,571,843   3,569,083   3,546,929 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27 11/12/2020  2,117,015   2,097,983   2,111,723 
AIT Worldwide Logistics, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 4/6/28 (i) 12/9/2021  1,995,000   1,990,013   1,995,707 
Worldwide Express, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/26/28 (i) 7/23/2021  1,500,000   1,488,750   1,505,619 
Omni Logistics, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 12/30/26 11/24/2021  1,109,719   1,098,000   1,101,396 
Omni Logistics, Senior Secured Revolving Credit Loan (First Lien), 6.00% (Libor + 5.00%), maturity 12/30/25 11/24/2021  28,459   27,320   28,245 
               
Beverage, Food & Tobacco              
Bettcher Industries, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 7.25%), maturity 12/14/29 (i) 12/13/2021  2,500,000   2,475,000   2,475,000 
Sovos Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 6/8/28 (i) 6/8/2021  2,033,001   2,033,001   2,035,909 
Bettcher Industries, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 4.00%), maturity 12/14/28 (i) 12/13/2021  2,000,000   1,980,000   1,980,000 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 8/25/25 8/22/2018  1,935,000   1,930,127   1,905,975 
Dessert Holdings, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 6/9/28 6/7/2021  1,496,250   1,485,300   1,485,028 
Monogram Foods, Senior Secured Cov-Lite Term Loan B, 4.50% (Libor + 4.00%), maturity 8/28/28 8/13/2021  1,000,000   990,000   992,500 
               
Automotive              
Highline, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 11/9/27 (i) 10/29/2020  2,842,159   2,776,983   2,819,912 
Rough Country, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.50%), maturity 7/28/28 (i) 7/26/2021  1,995,000   1,990,000   1,995,000 
Truck Hero, Senior Secured Initial Term Loan, 4.00% (Libor + 3.25%), maturity 1/31/28 (i) 1/20/2021  1,488,750   1,488,750   1,485,737 
Safe Fleet, Senior Secured Tranche B-1 Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 2/3/25 11/28/2018  967,500   950,885   960,244 
IXS, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 3/5/27 (i) 2/27/2020  794,417   792,552   782,495 
Wheel Pros, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 5/11/28 (i) 4/23/2021  498,750   494,350   498,850 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 6.75%), maturity 2/2/26 2/7/2020  500,000   491,417   496,250 
               
Construction & Building              
Tangent, Senior Secured Closing Date Term Loan (First Lien), 4.96% (Libor + 4.75%), maturity 11/30/24 (i) 10/2/2019  1,792,819   1,783,355   1,774,891 
PlayPower, Senior Secured Initial Term Loan, 5.71% (Libor + 5.50%), maturity 5/8/26 5/10/2019  1,756,917   1,756,917   1,686,640 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 9/29/25 2/7/2020  1,500,000   1,475,188   1,500,000 
PlayCore, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 9/30/24 (i) 9/18/2017  956,924   955,673   955,693 
CHI Overhead Doors, Senior Secured Third Amendment Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 7/31/25 (i) 7/28/2015  615,739   617,179   617,221 
Acuren, Senior Secured Initial Term Loan, 4.21% (Libor + 4.00%), maturity 1/23/27 1/17/2020  479,011   477,104   479,011 
Hoffman Southwest, Senior Secured Initial Term Loan, 6.50% (Libor + 5.50%), maturity 8/14/23 5/16/2019  446,460   446,911   441,437 
               
Wholesale              
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 3/20/25 3/16/2018  3,849,619   3,850,157   3,806,310 
PetroChoice, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 8/19/22 9/2/2015  1,875,184   1,869,627   1,814,241 
ABB Optical, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 6/15/23 6/14/2016  1,424,830   1,425,559   1,389,209 
               
Hotels, Gaming & Leisure              
Aimbridge, Senior Secured Initial Term Loan (2019) (First Lien), 3.96% (Libor + 3.75%), maturity 2/2/26 (i) 1/17/2019  2,922,725   2,915,974   2,871,577 
Northstar, Senior Secured Term Loan, 6.75% (Libor + 6.25%) cash, 1.00% PIK, maturity 6/7/24 5/8/2017  1,366,260   1,366,260   1,321,856 
Auto Europe, Senior Secured Initial Dollar Term Loan, 6.00% (Libor + 5.00%), maturity 10/21/23 10/19/2016  1,119,231   1,115,110   895,385 
               
Consumer Goods: Non-durable              
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/21/23 (i) 11/9/2016  2,393,770   2,389,338   2,245,348 
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 10/26/23 (j) 11/2/2016  2,029,843   2,023,255   1,994,321 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.50%), maturity 9/11/23 9/29/2016  1,881,139   1,875,639   1,857,624 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 10.50% (Libor + 9.50%), maturity 11/21/24 2/7/2020  1,250,000   1,250,000   1,209,375 

The accompanying notes are an integral part of these financial statements.

14

14

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of December 31, 20202021

(Expressed in U.S. Dollars)

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition
Date		 Par  Cost  Value 
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.3%)(g)(h):              
               
Services: Business              
DBi Services, Class A-1 Preferred Units (800.53 units)(k) 3/26/2019    $800,535  $576,385 
DBi Services, Class B Common Shares (169,362.31 shares)(l)(m) 3/26/2019     -   - 
               
Chemicals, Plastics & Rubber              
Vertellus, Series A Units (1,651 Series A units, Fair value of $165,138)(i)(m)(r) 12/22/2020      165,138   165,138 
               
Healthcare & Pharmaceuticals              
Alpaca, Class A Units (33,300.04 Class A Units, Fair value of $3,679)(j)(m)(o)(p) 4/19/2019      60,976   3,679 
               
Services: Consumer              
Ned Stevens, Class B Common Units (261,438 Common B units, Fair value of $2,191)(j)(m)(n)(o) 9/30/2019      261,438   219,125 
               
Total Equity and Preferred Shares       $1,288,087  $964,327 
               
Total Portfolio Investments(s)       $358,990,792  $355,359,843 

 

Portfolio Investments (a) (b) (c) (d) (e) (f) Acquisition Date Par  Cost  Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):              
               
Media: Diversified & Production              
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.71% (Libor + 3.50%), maturity 2/9/26 (i) 1/16/2019 $2,924,905  $2,909,965  $2,928,921 
               
Environmental Industries              
Denali Water Solutions, Senior Secured Closing Date Term Loan, 5.00% (Libor + 4.25%), maturity 3/27/28 3/18/2021  1,990,000   1,970,000   1,967,613 
Keter Environmental Services, Unitranche, 7.50% (Libor + 6.50%), maturity 10/29/27 (i) 11/5/2021  500,000   495,000   495,000 
Keter Environmental Services, Unitranche, 7.50% (Libor + 6.50%), maturity 10/29/27 (i) 11/5/2021  4,560   4,514   4,514 
               
Metals & Mining              
Dynatect, Senior Secured Term B Loan, 5.50% (Libor + 4.50%), maturity 9/30/22 (i) 8/16/2019  1,937,063   1,926,533   1,917,692 
               
Utilities: Electric              
Systems Control, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 3/28/25 6/15/2021  1,490,973   1,488,636   1,472,336 
               
Forest Products & Paper              
Loparex, Senior Secured Initial Term Loan (First Lien), 4.71% (Libor + 4.50%), maturity 7/31/26 7/29/2019  1,466,250   1,455,917   1,462,584 
               
Retail              
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/16/24 (i) 10/17/2018  967,287   971,481   952,067 
StubHub, Senior Secured USD Term B Loan, 3.71% (Libor + 3.50%), maturity 2/12/27 (i) 1/31/2020  490,000   488,093   481,558 
               
Media: Advertising, Printing & Publishing              
Ansira, Unitranche, 7.50% (Libor + 6.50%) PIK, maturity 12/20/24 12/20/2016  2,171,946   2,166,066   1,346,607 
               
Utilities: Water              
Aegion, Senior Secured Initial Term Loan, 5.50% (Libor + 4.75%), maturity 5/17/28 4/1/2021  997,500   992,800   995,006 
               
Energy: Electricity              
Franklin Energy, Senior Secured Term B Loan (First Lien), 4.21% (Libor + 4.00%), maturity 8/14/26 8/14/2019  977,500   975,628   962,838 
               
Consumer Goods: Durable              
Careismatic Brands, Senior Secured Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 1/6/28 (i) 1/22/2021  497,500   496,400   496,361 
               
Total Bank Loans       $403,106,122  $401,708,017 
               
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.4%)(g)(h):              
               
High Tech Industries              
PracticeTek, Class A Units (318,350 Class A units, Fair value of $348,282)(k)(l)(o) 11/22/2021     $348,282  $348,282 
               
Services: Business              
Alliance Environmental Group, A-1 Preferred Units (331,126 A-1 Preferred Units, Fair value of $331,126)(k)(l)(p) 12/30/2021      331,126   331,126 
               
Services: Consumer              
Ned Stevens, Class B Common Units (261,438 Common B units, Fair value of $280,604)(k)(l)(q)(t) 9/30/2019      261,438   280,604 
               
Healthcare & Pharmaceuticals              
Alpaca, Class A Units (45,746 Class A Units, Fair value of $205,742)(k)(l)(r)(t) 4/19/2019      80,512   205,742 
               
Chemicals, Plastics & Rubber              
Vertellus, Series A Units (1,651 Series A units, Fair value of $180,603)(l)(m)(t) 12/22/2020      165,138   180,603 
               
 Total Equity and Preferred Shares       $1,186,496  $1,346,357 
               
Total Portfolio Investments(u)       $404,292,618  $403,054,374 

(a)All companies are located in the United States of America, unless otherwise noted.

(b)Interest rate percentages represent actual interest rates which are indexed from then 30-day London Interbank Offered Rate ("LIBOR"(“LIBOR”) unless otherwise noted. LIBOR rates are subject to interest rate floors which can vary based on the contractual agreement with the borrower. Due dates represent the contractual maturity date.

(c)All loans are income-producing, unless otherwise noted.

(d)All investments are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act"“1940 Act”) unless otherwise noted.

(e)All investments are exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act.

(f)Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the FASB Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.

(g)Percentages are calculated using fair value of investments over net assets.

(h)As defined in 1940 Act, the Company is not deemed to be an “Affiliated Person” of or “Control” this portfolio company because it neither owns 5% or more of the portfolio company’s outstanding voting securities nor has the power to exercise control over the management or policies of such portfolio company (including through a management agreement).

(i)Investment was valued using Level 2 inputs within the ASC 820 fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.

(j)(j) All or portion of this security has an open position related to short-term borrowings, as described in footnote 8.

(k)Three of our affiliated funds, Audax Direct Lending Solutions Fund - A, L.P., Audax Direct Lending Solutions Fund - C, L.P., and Audax Direct Lending Solutions Fund - D, L.P.," 'co-invested” ‘co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission.

(k)Represents an investment owned by APD Dbi Preferred, Inc., a holding company for the investment in DBi.
(l)Represents an investment owned by APD Dbi Common, Inc., a holding company for the investment in DBi.
(m)Investment is non-income producing.

(m)The borrower for UDG Healthcare, Congachant Limited, is located in Ireland.

(n)The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.

(o)Represents an investment in APD Ptek Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(p)Represents an investment in APD AEG Equity Blocker, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(q)Represents an investment in APD NS Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(r)(o)Represents an investment in APD ALP Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(s)Represents an investment in ADP VERT Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.

(t)Other net assets of $0 at the aggregator levels are included in the fair value of the investments when using the net asset value as a practical expedient.

(p) Represents an investment in APD ALP Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(q) The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.
(r) Represents an investment in ADP VERT Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(s) (u)At December 31, 2020,2021, the cost of investments for income tax purposes was $358,990,792$404,292,618, the gross unrealized depreciation for federal tax purposes was $5,143,320,$3,278,981, the gross unrealized appreciation for federal income tax purposes was $1,512,371,$2,040,737, and the net unrealized depreciation was $3,630,949.$1,238,244.

 

The accompanying notes are an integral part of these financial statements.

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15

 

Audax Credit BDC Inc.

Notes to Financial Statements

September

June 30, 20212022

(unaudited)

 

Note 1. Organization

 

Audax Credit BDC Inc. (the “Company”) is a Delaware corporation that was formed on January 29, 2015. The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, effective with the Company’s taxable year ended December 31, 2015, the Company has elected to be treated for federal income tax purposes, and intends to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

 

The Company commenced business operations on July 8, 2015, the date on which the Company made its first investment. The Company was formed for the purpose of investing primarily in the debt of leveraged, non-investment grade middle market companies, with the principal objective of generating income and capital appreciation. The Company’s investment strategy is to invest primarily in first lien senior secured loans and selectively in second lien loans to middle market companies. During the period prior to July 8, 2015, the Company was a development stage company, as defined in Paragraph 915-10-05, Development Stage Entity, of the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standards Codification, as amended (“ASC”). During this time, the Company was devoting substantially all of its efforts to establishing its business and its planned principal operations had not commenced. All losses incurred during the period prior to July 8, 2015 have been considered a part of the Company’s development stage activities.

 

Audax Management Company (NY), LLC (the “Adviser”) is the investment adviser of the Company. The Adviser is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended.

 

Note 2. Significant Accounting Policies

 

Basis of Presentation

As an investment company, the accompanying financial statements of the Company are prepared in accordance with the investment company accounting and reporting guidance of ASC Topic 946, “Financial Services – Investment Companies,” as amended (“ASC Topic 946”), which incorporates the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X, as well as generally accepted accounting principles in the United States of America (“GAAP”).

 

Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management of the Company, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair presentation of financial statements for the interim period included herein. The current period’s results of operations are not necessarily indicative of the operating results to be expected for future periods. The accounting records of the Company are maintained in U.S. dollars.

 

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ, and these differences could be material.

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Cash and Cash Equivalents

Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments purchased with maturities of three months or less and money market mutual funds to be cash equivalents. No cash equivalent balances were held on SeptemberJune 30, 20212022 and December 31, 2020.2021. At such dates, cash was not subject to any restrictions on withdrawal.

 

Expenses

The Company is responsible for investment expenses, legal expenses, auditing fees and other expenses related to the Company’s operations. Such fees and expenses, including expenses initially incurred by the Adviser, may be reimbursed by the Company.

 

Investment Valuation Policy

The Company conducts the valuation of the Company’s investments, pursuant to which the Company’s net asset value is determined, at all times consistent with GAAP and the 1940 Act. The Company’s Board of Directors (the “Board of Directors”), with the assistance of the Company’s Audit Committee (the “Audit Committee”), determines the fair value of the Company’s investments, for investments with a public market and for investments with no readily available public market, on at least a quarterly basis, in accordance with the terms of ASC Topic 820, “Fair Value Measurement,” (“ASC 820”). The Company’s valuation procedures are set forth in more detail below.

 

ASC 820 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.” Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same – to estimate the price when an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

 

ASC 820 establishes a hierarchal disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

 

The three-level hierarchy for fair value measurement is defined as follows:

 

Level 1 —Inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these instruments, even in situations where the Company holds a large position, and a sale could reasonably be expected to impact the quoted price.

Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these instruments, even in situations where the Company holds a large position, and a sale could reasonably be expected to impact the quoted price.

Level 2 —Inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

 

Level 2 — Inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

Level 3 — Inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

17

17

 

Level 3 —Inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

 

Pursuant to the framework set forth above, the Company values securities traded in active markets on the measurement date by multiplying the exchange closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments from pricing services, brokers or dealers’ quotes, or counterparty marks in order to value liquid assets that are not traded in active markets.

 

Pricing services aggregate, evaluate and report pricing from a variety of sources including observed trades of identical or similar securities, broker or dealer quotes, model-based valuations and internal fundamental analysis and research. When doing so, the Company determines whether the quote obtained is sufficient in accordance with GAAP to determine the fair value of the security. If determined adequate, the Company uses the quote obtained.

 

Securities that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Board of Directors, does not represent fair value, are each valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data are available. These valuation techniques vary by investment but include comparable public market valuations, comparable precedent transaction valuations and discounted cash flow analyses. Inputs for these valuation techniques include relative credit information, observed market movement, industry sector information, and other market data, which may include benchmarking of comparable securities, issuer spreads, reported trades, and reference data, such as market research publications, when available. The process used to determine the applicable value is as follows:

 

(i) Each portfolio company or investment is initially valued by the investment professionals of the Adviser responsible for the portfolio investment using a standardized template designed to approximate fair market value based on observable market inputs and updated credit statistics and unobservable inputs. Additionally, as a part of the Company’s valuation process, the Adviser may employ the services of one or more independent valuation firms engaged by the Company;

 

(ii) Preliminary valuation conclusions are documented and discussed with the Company’s senior management and members of the Adviser’s valuation team;

 

(iii) The Audit Committee reviews the assessments of the Adviser or independent valuation firm (to the extent applicable) and provides the Board of Directors with recommendations with respect to the fair value of the investments in the Company’s portfolio; and

 

(iv) The Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of the investments in the Company’s portfolio in good faith based on the input of the Adviser, the independent valuation firm (to the extent applicable) and in accordance with the Company’s valuation policy.

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18

 

The Audit Committee’s recommendation of fair value is generally based on its assessment of the following factors, as relevant:

 

·the nature and realizable value of any collateral;

 

·call features, put features and other relevant terms of debt;

 

·the portfolio company’s ability to make payments;

 

·the portfolio company’s actual and expected earnings and discounted cash flow;

 

·prevailing interest rates for like securities and expected volatility in future interest rates;

 

·the markets in which the portfolio company does business and recent economic and/or market events; and

 

·comparisons to publicly traded securities.

 

Investment performance data utilized are the most recently available as of the measurement date, which in many cases may reflect up to a one quarter lag in information.

 

Securities for which market quotations are not readily available or for which a pricing source is not sufficient may include the following:

 

·private placements and restricted securities that do not have an active trading market;

 

·securities whose trading has been suspended or for which market quotes are no longer available;

 

·debt securities that have recently gone into default and for which there is no current market;

 

·securities whose prices are stale; and

 

·securities affected by significant events.

 

The Board of Directors is responsible for the determination, in good faith, of the fair value of the Company’s portfolio investments.

 

Determination of fair value involves subjective judgments and estimates. Accordingly, these notes to the

Company’s financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the Company’s financial statements.

 

Security transactions are recorded on the trade date (the date the order to buy or sell is executed or, in the case of privately issued securities, the closing date, which is when all terms of the transactions have been defined).

 

Realized gains and losses on investments are determined based on the identified cost method.

 

In addition, on December 3, 2020, the SEC announced that it adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The adoptednew rule clarifies how fund boards can satisfy their valuation obligations in light of recent market developments. The rule permitswill permit boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. The Company will continueAs of June 30, 2022, no changes to review the adopted rule and its impact on the Company and itsCompany’s valuation policies and intends to comply with such requirements on or before the SEC’s required compliance date in 2022.policy have occurred as a result of this new rule.

19

 

Refer to Note 3 — Investments for additional information regarding fair value measurements and the Company’s application of ASC 820.

 

19

Interest Income Recognition

Interest income, adjusted for amortization of premium, acquisition costs, and amendment fees and the accretion of original issue discount (“OID”), are recorded on an accrual basis to the extent that such amounts are expected to be collected. Generally, when a loan becomes 120 days or more past due, or if the Company’s qualitative assessment indicates that the debtor is unable to service its debt or other obligations, the Company will place the loan on non-accrual status and cease recognizing interest income on that loan for financial reporting purposes until the borrower has demonstrated the ability and intent to pay contractual amounts due. However, the Company will remain contractually entitled to this interest. Interest payments received on non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current or, due to a restructuring, the interest income is deemed to be collectible. As of SeptemberJune 30, 2022 and December 31, 2021, the Company did not hold any investment on non-accrual. As of December 31, 2020, the Company had one investment on non-accrual which represented 0.28% and 0.17% of its total portfolio at cost and fair market value, respectively.

 

The Company currently holds loans in the portfolio that contain OID and payment-in-kind (“PIK”) provisions. TheThe Company recognizes OID for loans originally issued at a discount and recognizes the income over the life of the obligation based on an effective yield calculation. PIK interest, computed at the contractual rate specified in a loan agreement, is added to the principal balance of a loan and recorded as income over the life of the obligation. Therefore, the actual collection of PIK income may be deferred until the time of debt principal repayment. To maintain the ability to be taxed as a RIC, the Company may need to pay out of both OID and PIK non-cash income amounts in the form of distributions, even though the Company has not yet collected the cash on either.

 

As of SeptemberJune 30, 2021,2022, the Company held 213230 investments in loans with OID. The Company accrued OID income of $109,095$157,869 and $338,404$302,788 for the three and ninesix months ended SeptemberJune 30, 2021,2022, respectively. The unamortized balance of OID on debt investments as of SeptemberJune 30, 2021,2022, totaled $2,413,162.$4,220,194. As of December 31, 2020,2021, the Company held 197231 investments in loans with OID. The Company accrued OID income of $102,083$110,757 and $282,729$229,309 for the three and ninesix months ended SeptemberJune 30, 2020,2021, respectively. The unamortized balance of OID investments as of December 31, 2020,2021, totaled $2,299,058.$3,028,962.

 

As of SeptemberJune 30, 2022, the Company held three investments which had a PIK interest component. The Company recorded $7,813 and $69,132 of PIK interest income for three and six months ended June 30, 2022, respectively. As of June 30, 2021, the Company held three investments which had a PIK interest component. The Company recorded $49,599$110,285 and $200,382$150,783 of PIK interest income for three and ninesix months ended SeptemberJune 30, 2021, respectively. As of September 30, 2020, the Company held three investments which had a PIK interest component. The Company recorded $39,222 and $75,145 of PIK interest income for the three and nine months ended September 30, 2020, respectively.

 

As of SeptemberJune 30, 20212022 and December 31, 2020,2021, the Company held $13,397,892$31,727,018 and $4,289,122$11,058,796 in cash and cash equivalents, respectively. For the three and ninesix months ended SeptemberJune 30, 2021,2022, the Company earned $477$397 and $1,107,$781, respectively, of interest income related to cash, which is included in other interest income within the accompanying statement of operations. For the three and ninesix months ended SeptemberJune 30, 2020,2021, the Company earned $1,058$356 and $31,053,$630, respectively, of interest income related to cash, which is included in other interest income within the accompanying statement of operations.

 

Other Income Recognition

The Company generally records prepayment fees and amendment fees upon receipt of cash or as soon as the Company becomes aware of the prepayment or amendment.

 

Dividend income on equity investments is accrued to the extent that such amounts are expected to be collected and if the Company has the option to collect such amounts in cash.

 

Prepayment fees, amendment fees and dividend income are accrued in other income in the accompanying statements of operations.

20

 

For the three and ninesix months ended SeptemberJune 30, 2021,2022, the Company accrued $20,772$140,256 and $83,774$178,374 of other income, respectively, related to amendment fees. For the three and ninesix months ended SeptemberJune 30, 2020,2021, the Company accrued $14,577$15,488 and $153,950$63,002 of other income, respectively, related to amendment fees.

 

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New Accounting Pronouncements

In March 2020, FASB issued Accounting Standards Update No. 2020-04 (“ASU 2020-04”), “Reference Rate Reform (Topic 848)”. In response to concerns about structural risks of interbank offered rates, and particularly the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the guidance.

 

Note 3. Investments

 

Investments

The Company’s investments, at any time, may include syndicated loans, securities, structured products and other financial instruments, including, without limitation, corporate and government bonds, convertible securities, term loans, equity securities (both common and preferred), various debt securities (both secured and unsecured), dividend-paying equity, royalties, collateralized loan obligations, and warrants (collectively, the “investments”).

Fair Value

 

In accordance with ASC 820, the fair value of the Company’s investments is determined to be the price that would be received for an investment in a current sale, assuming an orderly transaction between willing market participants on the measurement date. This fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. ASC 820 also establishes the three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date as described in Note 2 – Significant Accounting Policies.

 

As of SeptemberJune 30, 2021, $171,713,9202022, $286,857,096 of the Company’s investments were valued using unobservable inputs, and $191,727,540$149,955,873 were valued using observable inputs. During the ninesix months ended SeptemberJune 30, 2021, $21,840,6072022, $132,817,640 were transferred into Level 3 due to a decrease in observable prices in the market and $46,432,486$10,027,381 were transferred out of Level 3 due to the liquidity in the market and transparency of inputs.

 

As of December 31, 2020, $199,000,2052021, $153,189,910 of the Company’s investments were valued using unobservable inputs, and $156,359,638$249,864,464 were valued using observable inputs. During the ninesix months ended SeptemberJune 30, 2020, $15,434,6942021, $23,687,416 were transferred into Level 3 due to a decrease in observable prices in the market and $74,210,909$45,016,934 were transferred out of Level 3 due to the liquidity in the market and transparency of inputs.price transparency.

 

The following table presents the Company’s investments carried at fair value as of SeptemberJune 30, 20212022 and December 31, 2020,2021, by caption on the Company’s accompanying statements of assets and liabilities and by security type.

 

  Assets at Fair Value as of June 30, 2022 
  Level 1  Level 2  Level 3  Total 
First lien debt $-  $146,504,847  $261,879,227  $408,384,074 
Second lien debt  -   2,500,000   23,624,965   26,124,965 
Equity and Preferred Shares  -   951,026   1,352,904   2,303,930 
Total $-  $149,955,873  $286,857,096  $436,812,969 

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  Assets at Fair Value as of December 31, 2021 
  Level 1  Level 2  Level 3  Total 
First lien debt $-  $239,920,774  $137,142,045  $377,062,819 
Second lien debt  -   9,943,690   14,701,508   24,645,198 
Equity and Preferred Shares  -   -   1,346,357   1,346,357 
Total $-  $249,864,464  $153,189,910  $403,054,374 

  Assets at Fair Value as of September 30, 2021 
  Level 1  Level 2  Level 3  Total 
First lien debt $-  $184,796,743  $154,049,139  $338,845,882 
Second lien debt  -   6,930,797   17,189,008   24,119,805 
Equity and Preferred Shares  -   -   475,773   475,773 
Total $-  $191,727,540  $171,713,920  $363,441,460 

  Assets at Fair Value as of December 31, 2020 
  Level 1  Level 2  Level 3  Total 
First lien debt $-  $153,794,500  $170,910,171  $324,704,671 
Second lien debt  -   2,400,000   27,290,845   29,690,845 
Equity and Preferred Shares  -   165,138   799,189   964,327 
Total $-  $156,359,638  $199,000,205  $355,359,843 

 

In accordance with ASC 820, the following table provides quantitative information about the Level 3 fair value measurements of the Company’s investments as of SeptemberJune 30, 2021.2022. The weighted average calculations in the table below are based on the fair value balances for all debt related calculations for the particular input.

 

         As of September 30, 2021
  Fair  Valuation Unobservable   Weighted 
  Value  Technique Inputs (1) Range (2) Average (3) 
First lien debt $148,573,197  Matrix Pricing Senior Leverage 2.68x - 16.65x  5.12x
        Total Leverage 3.07x - 16.65x  5.98x
        Interest Coverage (0.83)x - 7.55x  2.64x
        Debt Service Coverage (0.77)x - 5.31x  2.11x
        TEV Coverage 0.54x - 4.99x  2.47x
        Liquidity 36.37% - 604.32%  160.52%
        Spread Comparison 300bps - 700bps  465bps
               
Second lien debt  17,189,008  Matrix Pricing Senior Leverage 3.06x - 10.88x  6.69x
        Total Leverage 3.06x - 10.88x  6.69x
        Interest Coverage 0.81x - 6.62x  2.82x
        Debt Service Coverage 0.65x - 5.69x  2.36x
        TEV Coverage 0.74x - 4.28x  2.20x
        Liquidity 79.34% - 260.86%  157.17%
        Spread Comparison 650bps - 950bps  785bps
               
Total $165,762,205           

       As of June 30, 2022
 Fair
Value		 Valuation
Technique		   Unobservable
Inputs (1)		   Range (2)   Weighted
Average (3)
First lien debt$250,769,962  Matrix Pricing Senior Leverage 0.45x - 16.25x 5.47x
     Total Leverage 0.45x - 19.49x 6.32x
     Interest Coverage (0.55)x - 22.35x 2.65x
     Debt Service Coverage (0.50)x - 16.18x 2.14x
     TEV Coverage 0.71x - 18.29x 2.44x
     Liquidity 25.36% - 588.40% 136.81%
     Spread Comparison 300bps - 700bps 468bps
          
                 11,109,265  Market Analysis Senior Leverage (415.90)x - 533.03x 48.75x
     Total Leverage (415.90)x - 533.03x 50.09x
     Interest Coverage (0.77)x - 1.62x 0.82x
     Debt Service Coverage (0.78)x - 1.29x 0.64x
     TEV Coverage (0.04)x - 1.82x 0.91x
     Liquidity 27.57% - 546.48% 91.88%
     Spread Comparison 250bps - 650bps 470bps
          
Second lien debt                23,624,965  Matrix Pricing Senior Leverage 4.10x - 10.03x 7.02x
     Total Leverage 4.10x - 10.03x 7.03x
     Interest Coverage 0.64x - 6.99x 2.81x
     Debt Service Coverage 0.51x - 4.61x 2.00x
     TEV Coverage 0.80x - 2.72x 1.74x
     Liquidity 63.73% - 210.00% 139.78%
     Spread Comparison 675bps - 950bps 758bps
          
Total  $        285,504,192        

 

(1)

For any portfolio company, the unobservable input "Liquidity"“Liquidity” is a fraction, expressed as a percentage, the numerator of which is the sum of the company'scompany’s undrawn revolving credit facility capacity plus cash, and the denominator of which is the total amount that may be borrowed under the company'scompany’s revolving credit facility. The unobservable input "Spread Comparison"“Spread Comparison” is a comparison of the spread over LIBOR for each investment to the spread over LIBOR for general leveraged loan transactions.

  
 
(2)Each range represents the variance of outputs from calculating each statistic for each portfolio company within a specific credit seniority. The range may be a single data point when there is only one company represented in a specific credit seniority.
  
 
(3)Inputs are weighted based on the fair value of the investments included in the range.

  

The table above does not include $5,951,715$1,352,904 of debt, equity and preferred shares which management values using other unobservable inputs, such as earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA multiples, as well as other qualitative information, including company specific information.

 

In accordance with ASC 820, the following table provides quantitative information about the Level 3 fair value measurements of the Company’s investments as of December 31, 2020.2021. The weighted average calculations in the table below are based on the fair value balances for all debt related calculations for the particular input.

22

22

 

       As of December 31, 2020 
 Fair Valuation Unobservable   Weighted     As of December 31, 2021
 Value Technique Inputs (1) Range (2) Average (3) Fair
Value		 Valuation
Technique		 Unobservable
 Inputs (1)		   Range (2) Weighted
Average (3)
First lien debt $165,118,266  Matrix Pricing Senior Leverage 1.92x - 28.58x  5.22x$ 131,493,405  Matrix Pricing  Senior Leverage 2.66x - 19.28x 5.48x
      Total Leverage 1.92x - 32.80x  6.31x   Total Leverage 2.66x - 19.28x 6.35x
      Interest Coverage 0.46x - 5.97x  2.38x   Interest Coverage (1.00)x - 7.01x 2.53x
      Debt Service Coverage 0.42x - 5.75x  1.98x   Debt Service Coverage (0.92)x - 5.85x 2.03x
      TEV Coverage 0.58x - 7.42x  2.44x   TEV Coverage 0.48x - 6.32x 2.44x
      Liquidity 34.64% - 675.62%  173.68%   Liquidity 28.32% - 871.75% 140.19%
      Spread Comparison 275bps - 700bps  442bps   Spread Comparison 300bps - 700bps 468bps
                 
Second lien debt  25,911,696  Matrix Pricing Senior Leverage 4.40x - 11.03x  6.29x                14,701,508  Matrix Pricing  Senior Leverage 4.05x - 11.68x 7.04x
      Total Leverage 4.40x - 11.03x  6.29x   Total Leverage 4.05x - 11.68x 7.04x
      Interest Coverage 0.88x - 3.10x  2.15x   Interest Coverage 0.67x - 5.98x 2.84x
      Debt Service Coverage 0.77x - 2.75x  1.82x   Debt Service Coverage 0.53x - 4.66x 2.24x
      TEV Coverage 0.74x - 3.10x  1.98x   TEV Coverage 0.68x - 3.08x 1.70x
      Liquidity 100.90% - 326.75%  162.79%   Liquidity 56.63% - 353.33% 168.01%
       Spread Comparison 650bps - 950bps  761bps   Spread Comparison 650bps - 950bps 782bps
                 
Total $191,029,962     $146,194,913   

 

(1)For any portfolio company, the unobservable input "Liquidity"“Liquidity” is a fraction, expressed as a percentage, the numerator of which is the sum of the company'scompany’s undrawn revolving credit facility capacity plus cash, and the denominator of which is the total amount that may be borrowed under the company'scompany’s revolving credit facility. The unobservable input "Spread Comparison"“Spread Comparison” is a comparison of the spread over LIBOR for each investment to the spread over LIBOR for general leveraged loan transactions.
   
(2)Each range represents the variance of outputs from calculating each statistic for each portfolio company within a specific credit seniority. The range may be a single data point when there is only one company represented in a specific credit seniority.
   
(3)Inputs are weighted based on the fair value of the investments included in the range.

        

The table above does not include $7,970,243$6,994,997 of debt, equity and preferred shares which management values using other unobservable inputs, such as EBITDA and EBITDA multiples, as well as other qualitative information, including company specific information.

 

Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in market yields, discounts rate, leverage, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of the Company’s investments. Generally, an increase or decrease in market yields, discount rates or leverage or an increase/decrease in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a corresponding decrease or increase, respectively, in the fair value of certain of the Company’s investments.

 

The following tables provide the changes in fair value, broken out by security type, during the ninesix months ended SeptemberJune 30, 20212022 and 20202021 for all investments for which the Company determines fair value using unobservable (Level 3) factors.

 

23
Six Months Ended June 30, 2022 First lien debt  Second lien
debt		  Equity and
Preferred Shares		  Total 
Fair Value as of December 31, 2021 $137,142,045  $14,701,508  $1,346,357  $153,189,910 
Transfers into Level 3  124,380,410   8,437,230   -   132,817,640 
Transfers out of Level 3  (9,029,881)  (997,500)  -   (10,027,381)
Total gains:                
Net realized gain (a)    179,924   5,583   107,938   293,445 
Net unrealized appreciation (depreciation)(b)  135,921   21,638   (12,941)  144,618 
New investments, repayments and settlements:(c)                
Purchases  33,849,617   2,440,000   100,000   36,389,617 
Settlements/repayments  (24,079,109)  (1,000,000)  -   (25,079,109)
Net amortization of premiums, PIK, discounts and fees  288,205   16,506   -   304,711 
Sales  (987,905)  -   (188,450)  (1,176,355)
Fair Value as of June 30, 2022 $261,879,227  $23,624,965  $1,352,904  $286,857,096 

 

Nine Months Ended September 30, 2021 First lien debt  Second lien
debt		  Equity and
Preferred
Shares		  Total 
Fair Value as of December 31, 2020 $170,910,171  $27,290,845  $799,189  $199,000,205 
Transfers into Level 3  21,675,469   -   165,138   21,840,607 
Transfers out of Level 3  (39,527,665)  (6,904,821)  -   (46,432,486)
Total gains:                
Net realized gain (loss)(a)   132,085   23,900   (383,174)  (227,189)
Net unrealized appreciation (depreciation)(b)  270,405   20,291   292,445   583,141 
New investments, repayments and settlements:(c)                
Purchases  35,132,968   2,455,000   19,536   37,607,504 
Settlements/repayments  (33,348,782)  (4,332,867)  -   (37,681,649)
Net amortization of premiums, PIK, discounts and fees  300,738   82,430   -   383,168 
Sales  (1,496,250)  (1,445,770)  (417,361)  (3,359,381)
Fair Value as of September 30, 2021 $154,049,139  $17,189,008  $475,773  $171,713,920 

(a)Included in net realized gain on the accompanying Statement of Operations for the ninesix months ended SeptemberJune 30, 2021.2022.

(b)Included in net change in unrealized appreciation on the accompanying Statement of Operations for the ninesix months ended SeptemberJune 30, 2021.2022.
(c)Includes increases in the cost basis of investments resulting from portfolio investments, the amortization of discounts, and PIK, as well as decreases in the costs basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.

23

 

Nine Months Ended September 30, 2020 First lien debt  Second lien
debt		  Equity and Preferred Shares  Total 
Fair Value as of December 31, 2019 $227,392,535  $21,340,798  $719,257  $249,452,590 
Transfers into Level 3  15,434,694   -   -   15,434,694 
Transfers out of Level 3  (71,237,159)  (2,973,750)  -   (74,210,909)
Total gains:                
Net realized loss(a)   (1,221,555)  -   -   (1,221,555)
Net unrealized (depreciation) appreciation(b)  (1,110,239)  (76,159)  85,682   (1,100,716)
New investments, repayments and settlements:(c)                
Purchases  13,199,175   7,709,688   -   20,908,863 
Settlements/repayments  (21,689,548)  (472,222)  -   (22,161,770)
Net amortization of premiums, PIK, discounts and fees  253,400   15,834   -   269,234 
Sales  (4,739,437)  -   -   (4,739,437)
Fair Value as of September 30, 2020 $156,281,866  $25,544,189  $804,939  $182,630,994 

Six Months Ended June 30, 2021 First lien debt  Second lien
debt		  Equity and
Preferred
Shares		  Total 
Fair Value as of December 31, 2020 $170,910,171  $27,290,845  $799,189  $199,000,205 
Transfers into Level 3  23,522,278   -   165,138   23,687,416 
Transfers out of Level 3  (41,048,184)  (3,968,750)  -   (45,016,934)
Total gains:                
Net realized gain (loss)(a)    101,904   24,823   (383,174)  (256,447)
Net unrealized appreciation (depreciation)(b)  124,987   (582)  244,306   368,711 
New investments, repayments and settlements:(c)                
Purchases  20,059,197   2,455,000   19,536   22,533,733 
Settlements/repayments  (23,022,823)  (3,950,000)  -   (26,972,823)
Net amortization of premiums, PIK, discounts and fees  198,158   77,380   -   275,538 
Sales  -   (1,445,770)  (417,361)  (1,863,131)
Fair Value as of June 30, 2021 $150,845,688  $20,482,946  $427,634  $171,756,268 

 

(a)Included in net realized loss on the accompanying Statement of Operations for the ninesix months ended SeptemberJune 30, 2020.2021.

(b)Included in net change in unrealized depreciation on the accompanying Statement of Operations for the ninesix months ended SeptemberJune 30, 2020.2021.
(c)Includes increases in the cost basis of investments resulting from portfolio investments, the amortization of discounts, and PIK, as well as decreases in the costs basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.

   

The change in unrealized value attributable to investments still held at SeptemberJune 30, 2022 and 2021 was $61,229 and 2020 was $354,876 and $(1,542,355),$185,542, respectively.

 

Investment Activities

 

The Company held a total of 233254 investments with an aggregate fair value of $363,441,460$436,812,969 as of SeptemberJune 30, 2021.2022. During the ninesix months ended SeptemberJune 30, 2021,2022, the Company invested in 6866 new investments for a combined $81,669,043$67,368,883 and in existing investments for a combined $7,643,513.$7,468,693. The Company also received $66,357,177$33,069,168 in repayments from investments and $17,331,786$4,047,932 from investments sold during the ninesix months ended SeptemberJune 30, 2021.2022.

24

 

The Company held a total of 216251 investments with an aggregate fair value of $355,359,843$403,054,374 as of December 31, 2020.2021. During the ninesix months ended SeptemberJune 30, 2020,2021, the Company invested in 4043 new investments for a combined $39,542,336$48,768,159 and in existing investments for a combined $12,834,005.$6,849,818. The Company also received $27,907,668$47,805,480 in repayments from investments and $6,437,456$10,135,008 from investments sold during the ninesix months ended SeptemberJune 30, 2020.2021.

 

Investment Concentrations

 

As of SeptemberJune 30, 2021,2022, the Company’s investment portfolio consisted of investments in 203228 companies located in 3537 states across 2426 different industries, with an aggregate fair value of $363,441,460.$436,812,969. The five largest investments at fair value as of SeptemberJune 30, 20212022 totaled $21,402,661,$24,248,880, or 5.89%5.55%, of the Company’s total investment portfolio as of such date. As of SeptemberJune 30, 2021,2022, the Company’s average investment was $1,565,249$1,743,002 at cost.

 

As of December 31, 2020,2021, the Company’s investment portfolio consisted of investments in 186215 companies located in 35 states across 2226 different industries, with an aggregate fair value of $355,359,843.$403,054,374. The five largest investments at fair value as of December 31, 20202021 totaled $21,474,504,$22,205,933, or 6.04%5.51%, of the Company’s total investment portfolio as of such date. As of December 31, 2020,2021, the Company’s average investment was $1,661,994$1,610,728 at cost.

24

 

The following table outlines the Company’s investments by security type as of SeptemberJune 30, 20212022 and December 31, 2020:2021:

   September 30, 2021   December 31, 2020 
   Cost   Percentage of Total Investments   Fair Value   Percentage of Total Investments   Cost   Percentage of Total Investments   Fair Value   Percentage of Total Investments 
First lien debt $340,038,539   93.24% $338,845,882   93.23% $327,535,610   91.24% $324,704,671   91.37%
Second lien debt  24,157,376   6.62%  24,119,805   6.64%  30,167,095   8.40%  29,690,845   8.36%
Total Debt Investments  364,195,915   99.86%  362,965,687   99.87%  357,702,705   99.64%  354,395,516   99.73%
Equity and Preferred Shares  507,088   0.14%  475,773   0.13%  1,288,087   0.36%  964,327   0.27%
Total Equity Investments  507,088   0.14%  475,773   0.13%  1,288,087   0.36%  964,327   0.27%
Total Investments $364,703,003   100.00% $363,441,460   100.00% $358,990,792   100.00% $355,359,843   100.00%

 

25
  June 30, 2022  December 31, 2021 
    Cost  Percentage of
Total Investments		    Fair Value  Percentage of
Total Investments		    Cost  Percentage of
Total Investments		    Fair Value  Percentage of
Total Investments		 
First lien debt $414,508,206   93.63% $408,384,074   93.49% $378,430,188   93.60% $377,062,819   93.55%
Second lien debt  26,140,071   5.90%  26,124,965   5.98%  24,675,934   6.10%  24,645,198   6.11%
Total Debt Investments  440,648,277   99.53%  434,509,039   99.47%  403,106,122   99.71%  401,708,017   99.67%
Equity and Preferred Shares  2,074,302   0.47%  2,303,930   0.53%  1,186,496   0.29%  1,346,357   0.33%
Total Equity Investments  2,074,302   0.47%  2,303,930   0.53%  1,186,496   0.29%  1,346,357   0.33%
Total Investments $442,722,579   100.00% $436,812,969   100.00% $404,292,618   100.00% $403,054,374   100.00%

 

Investments at fair value consisted of the following industry classifications as of SeptemberJune 30, 20212022 and December 31, 2020:2021:

 

   September 30, 2021   December 31, 2020 
Industry  Fair Value   Percentage of
Total Investments		   Fair Value   Percentage of
Total Investments		 
Healthcare & Pharmaceuticals $82,801,247   22.78% $76,049,509   21.40%
Services: Business  53,604,572   14.75   50,490,828   14.21 
High Tech Industries  53,168,849   14.63   61,586,355   17.33 
Chemicals, Plastics & Rubber  28,865,006   7.94   31,878,575   8.97 
Aerospace & Defense  25,097,543   6.91   20,755,039   5.84 
Banking, Finance, Insurance & Real Estate  17,894,843   4.92   16,984,886   4.78 
Containers, Packaging & Glass  14,541,484   4.00   11,243,766   3.16 
Services: Consumer  14,062,428   3.87   15,809,209   4.45 
Transportation: Cargo  10,690,852   2.94   7,974,497   2.24 
Construction & Building  10,439,614   2.87   9,664,073   2.72 
Capital Equipment  9,681,212   2.66   9,834,504   2.77 
Automotive  9,098,037   2.50   12,179,594   3.43 
Wholesale  7,036,510   1.94   7,121,878   2.00 
Beverage, Food & Tobacco  6,601,590   1.82   4,394,178   1.24 
Forest Products & Paper  4,990,017   1.37   4,842,432   1.36 
Consumer Goods: Non-durable  4,868,071   1.34   4,868,015   1.37 
Media: Advertising, Printing & Publishing  2,691,540   0.74   3,735,229   1.05 
Environmental Industries  2,474,857   0.68   -   - 
Telecommunications  1,000,845   0.28   -   - 
Utilities: Electric  989,871   0.27   -   - 
Metals & Mining  920,694   0.25   968,139   0.27 
Hotel, Gaming & Leisure  895,385   0.25   895,385   0.26 
Health Care Equipment & Services  527,913   0.15   526,939   0.15 
Consumer Goods: Durable  498,480   0.14   2,285,922   0.64 
Retail  -   -   1,270,891   0.36 
  $363,441,460   100.00% $355,359,843   100.00%

  June 30, 2022  December 31, 2021 
Industry Fair Value  Percentage of
Total Investments		  Fair Value  Percentage of
Total Investments		 
Healthcare & Pharmaceuticals $74,667,960  17.07% $76,579,770  19.01%
Services: Business  67,359,216  15.42   63,977,738  15.87 
High Tech Industries  56,067,996  12.84   49,862,684  12.37 
Containers, Packaging & Glass  34,127,069  7.81   28,958,289  7.18 
Banking, Finance, Insurance & Real Estate  28,773,585  6.59   25,369,331  6.29 
Aerospace & Defense  27,372,464  6.27   24,066,376  5.97 
Capital Equipment  26,713,233  6.12   17,471,742  4.33 
Chemicals, Plastics & Rubber  21,422,711  4.90   24,290,294  6.03 
Services: Consumer  17,815,971  4.08   16,280,215  4.04 
Transportation: Cargo  16,943,999  3.88   13,941,799  3.46 
Beverage, Food & Tobacco  12,832,916  2.94   10,874,412  2.70 
Automotive  10,424,497  2.39   9,038,488  2.24 
Construction & Building  8,538,092  1.95   7,454,893  1.85 
Consumer Goods: Non-durable  7,362,758  1.69   7,306,668  1.81 
Environmental Industries  7,610,091  1.74   2,467,127  0.61 
Wholesale  3,791,396  0.87   7,009,760  1.74 
Media: Diversified & Production  2,801,961  0.64   2,928,921  0.73 
Hotels, Gaming & Leisure  2,182,798  0.50   5,088,818  1.26 
Metals & Mining  1,905,588  0.44   1,917,692  0.48 
Utilities: Electric  1,460,979  0.33   1,472,336  0.37 
Forest Products & Paper  1,458,750  0.33   1,462,584  0.36 
Retail  1,379,947  0.32   1,433,625  0.36 
Media: Advertising, Printing & Publishing  1,376,936  0.32   1,346,607  0.33 
Utilities: Water  985,056  0.23   995,006  0.25 
Energy: Electricity  948,188  0.22   962,838  0.24 
Consumer Goods: Durable  488,813  0.11   496,361  0.12 
  $436,812,969  100.00% $403,054,374  100.00%

26

25

 

Investments at fair value were included in the following geographic regions of the United States as of SeptemberJune 30, 20212022 and December 31, 2020:2021:

 

  September 30, 2021  December 31, 2020 
Geographic Region Fair Value  Percentage
of Total
Investments		  Fair Value  Percentage of
Total
Investments		 
Northeast $84,085,099   23.14% $89,419,521   25.16%
Midwest  81,480,616   22.42%  78,184,041   22.00 
West  52,568,540   14.46   55,600,298   15.65 
Southwest  48,877,034   13.45   42,906,177   12.07 
Southeast  48,714,046   13.40   41,633,230   11.72 
East  36,446,108   10.03   37,063,003   10.43 
South  4,267,973   1.17   2,550,476   0.72 
Northwest  4,045,140   1.11   6,019,773   1.69 
Other(a)  2,956,904   0.82   1,983,324   0.56 
Total Investments $363,441,460   100.00% $355,359,843   100.00%

  June 30, 2022  December 31, 2021 

Geographic Region

 

Fair Value

  Percentage of Total Investments  

Fair Value

  Percentage of Total Investments 
Northeast $105,423,529   24.14% $96,521,842   23.95%
Midwest  92,748,094   21.23   86,519,372   21.47 
West  63,119,739   14.45   60,016,533   14.89 
Southeast  59,556,262   13.63   57,007,985   14.14 
Southwest  55,168,446   12.63   57,181,529   14.19 
East  43,881,653   10.05   33,945,083   8.42 
Northwest  5,065,136   1.16   4,501,322   1.12 
South  7,427,820   1.70   4,767,241   1.18 
Other(a)  4,422,290   1.01   2,593,467   0.64 
         Total Investments $436,812,969   100.00% $403,054,374   100.00%

 

(a) The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.  The borrower for UDG Healthcare, Congachant Limited, is located in Ireland.

(a) The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.  The borrower for UDG Healthcare, Congachant Limited, is located in Ireland.

 

The geographic region indicates the location of the headquarters of the Company’s portfolio companies. A portfolio company may have a number of other business locations in other geographic regions.

 

Investment Principal Repayments

 

The following table summarizes the contractual principal repayments and maturity of the Company’s investment portfolio by fiscal year, assuming no voluntary prepayments, as of SeptemberJune 30, 2021:2022:

 

For the Fiscal Years Ending December 31: Amount 
2021 $932,798 
2022  14,225,869 
2023  24,969,709 
2024  55,006,964 
2025  71,860,510 
Thereafter  199,613,227 
Total contractual repayments  366,609,077 
Adjustments to cost basis on debt investments(a)  (2,413,162)
Total Cost Basis of Debt Investments Held at September 30, 2021: $364,195,915 
For the Fiscal Years Ending December 31:  Amount 
 2022  $7,143,814 
 2023   19,180,425 
 2024   45,150,605 
 2025   61,448,517 
 2026   67,342,344 
 Thereafter  244,602,766 
                Total contractual repayments      444,868,471 
 Adjustments to cost basis on debt investments (a)  (4,220,194)
                Total Cost Basis of Investments Held at June 30, 2022: $440,648,277 

 

(a)   
(a)Adjustment to cost basis related to unamortized balance of OID investments.

COVID-19 Developments

 

COVID-19 Developments

During the ninesix months ended SeptemberJune 30, 2021 and subsequent to September 30, 2021,2022, the COVID-19 pandemic continues to havehas had a significant impact on the U.S. economy. Certain of the Company'sCompany’s portfolio companies werehave been adversely impacted by the effects of the COVID-19 pandemic, which have resulted in a material adverse impact on the Company'sCompany’s net asset value, net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company'sCompany’s portfolio companies and may continue to adversely affect the Company’s future net asset value, net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company'sCompany’s portfolio companies.

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Note 4. Related Party Transactions

 

Investment Advisory Agreement

The Company has entered into an investment advisory agreement (the “Investment Advisory Agreement”) with the Adviser. In accordance with the Investment Advisory Agreement, the Company pays the Adviser certain fees as compensation for its services, such fees consisting of a base management fee and an incentive fee (the “Incentive Fee”). The services the Adviser provides to the Company, subject to the overall supervision of the Board of Directors, include managing the day-to-day operations of, and providing investment services to, the Company. The Company also entered into a management fee waiver agreement with the Adviser (the “Waiver Agreement”), which the Company or the Adviser may terminate upon 60 days’ prior written notice.

 

Management Fee

The base management fee is calculated at an annual rate of 1.0% of the Company’s average gross assets including cash and any temporary investments in cash-equivalents, including U.S. government securities and other high-quality investment grade debt investments that mature in 12 months or less from the date of investment, payable quarterly in arrears on a calendar quarter basis.

 

Pursuant to the Waiver Agreement, the Adviser has agreed to waive the right to receive the base management fee to the extent necessary so that the base management fee payable under the Investment Advisory Agreement equals, and is calculated in the same manner as if, the base management fee otherwise payable by the Company were calculated at an annual rate equal to 0.65% (instead of an annual rate of 1.00%).

 

For the three and ninesix months ended SeptemberJune 30, 2021,2022, the Company recorded base management fees of $947,361$1,082,214 and $2,810,141,$2,120,653, respectively, and waivers to the base management fees of $331,576$378,775 and $983,548,$742,229, respectively, as set forth within the accompanying statements of operations. For the three and ninesix months ended SeptemberJune 30, 2020,2021, the Company recorded base management fees of $874,188$948,730 and $2,697,570,$1,862,780, respectively, and waivers to the base management fees of $305,966$332,055 and $944,150,$651,972, respectively, as set forth within the accompanying statements of operations.

 

Incentive Fee

The Incentive Fee has two parts, as follows: the first part of the Incentive Fee is calculated and payable quarterly in arrears based on the Company’s pre-incentive fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued for the quarter (including the base management fee, expenses payable under the Administration Agreement (as defined below) and any interest expense on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee).

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The Company determines pre-incentive fee net investment income in accordance with GAAP, including, in the case of investments with a deferred interest feature, such as debt instruments with PIK interest, OID securities and accrued income that the Company has not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-incentive fee net investment income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, is compared to a hurdle of 1.0% per quarter (4.0% annualized). The Company determines its average gross assets during each fiscal quarter and calculates the base management fee payable with respect to such amount at the end of each fiscal quarter.  As a result, a portion of the Company’s net investment income is included in its gross assets for the period between the date on which such income is earned and the date on which such income is distributed. Therefore, the Company’s net investment income used to calculate part of the Incentive Fee is also included in the amount of the Company’s gross assets used to calculate the 1.0% annual base management fee. The Company pays its Adviser an Incentive Fee with respect to its pre-incentive fee net investment income in each calendar quarter as follows:

 

 ·

no amount is paid on the income-portion of the Incentive Fee in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the hurdle of 1.0% (4.0% annualized);

·100% of the Company’s pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 1.1765 %1.1765% in any calendar quarter (4.706% annualized). The Company refers to this portion of its pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 1.1765%) as the “catch-up” provision. The catch-up is meant to provide the Adviser with 15.0% of the pre-incentive fee net investment income as if a hurdle rate did not apply if net investment income exceeds 1.1765% in any calendar quarter (4.706% annualized); and
   
 ·15.0% of the amount of the Company’s pre-incentive fee net investment income, if any, that exceeds 1.1765% in any calendar quarter (4.706% annualized) is payable to the Adviser.

 

Pursuant to the Waiver Agreement, the Adviser has agreed to waive its right to receive the Incentive Fee on pre-incentive fee net investment income to the extent necessary so that such Incentive Fee equals, and is calculated in the same manner as, the corresponding Incentive Fee on pre-incentive fee net investment income, if such Incentive Fee (i) were calculated based upon the Adviser receiving 10.0% (instead of 15.0%) of the applicable pre-incentive fee net investment income and (ii) did not include any “catch-up” feature in favor of the Adviser.

 

The second part of the Incentive Fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 15.0% of the Company’s realized capital gains, if any, on a cumulative basis from June 16, 2015, the effective date of the Company’s registration statement on Form 10, (file no. 000-55426), through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain Incentive Fees with respect to each of the investments in the Company’s portfolio.

 

Pursuant to the Waiver Agreement, the Adviser has agreed to waive the right to receive the Incentive Fee on capital gains to the extent necessary so that such portion of the Incentive Fee equals, and is calculated in the same manner as, the corresponding Incentive Fee on capital gains, if such portion of the Incentive Fee were calculated based upon the Adviser receiving 10.0% (instead of 15.0%).

 

In addition, pursuant to the Waiver Agreement, the Adviser has agreed to waive the right to receive both components of the Incentive Fee to the extent necessary so that it does not receive Incentive Fees which are attributable to income and gains of the Company that exceed an annualized rate of 12.0% in any calendar quarter.

 

The waivers from the Adviser will remain effective until terminated earlier by either party upon 60 days’ prior written notice.

 

Under the Investment Advisory Agreement, we do not pay any Capital Gains Incentive Fee in respect of unrealized capital appreciation in our portfolio.  However, under U.S. generally accepted accounting principles, or GAAP, we are required to accrue for the Capital Gain Incentive Fee on a quarterly basis as if such unrealized capital appreciation were realized in full at the end of each period. If the Capital Gain Incentive Fee Base, adjusted as required by GAAP to include unrealized appreciation, is positive at the end of a period, then GAAP and the terms of the Investment Advisory Agreement require us to accrue a capital gain incentive fee equal to 20% of such amount, less the aggregate amount of actual capital gain incentive fees paid or capital gain incentive fees accrued under GAAP in all prior periods. If such amount is negative, then there is no accrual for such period. The resulting accrual under GAAP for a capital gain incentive fee payable in any period will result in additional expense if such cumulative amount is greater than in the prior period, or in a reversal of previously recorded expense if such cumulative amount is less than in the prior period. We can offer no assurance that any unrealized capital appreciation will be realized in the future.

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29

 

For the three and ninesix months ended SeptemberJune 30, 2021,2022, the Company recorded incentive fees related to net investment income of $260,092$747,892 and $647,839,$1,174,214, respectively. Offsetting the incentive fees were waivers of the incentive fees of $234,083$654,618 and $583,056$1,038,308 for the three and ninesix months ended SeptemberJune 30, 2021,2022, respectively, as set forth within the accompanying statements of operations. For the three and ninesix months ended SeptemberJune 30, 2020,2021, the Company recorded incentive fees related to net investment income of $356,461$96,455 and $1,641,419,$387,748, respectively. Offsetting the incentive fees were waivers of the incentive fees of $320,815$86,809 and $1,437,466$348,973 for the three and ninesix months ended SeptemberJune 30, 2020,2021, respectively, as set forth within the accompanying statements of operations.

 

Administration Agreement and Administrative Fee

The Company has also entered into an administration agreement (the “Administration Agreement”) with Audax Management Company, LLC (the “Administrator”) pursuant to which the Administrator provides administrative services to the Company. UnderUnder the Administration Agreement, the Administrator performs, or oversees the performance of administrative services necessary for the operation of the Company, which include being responsible for the financial records which the Company is required to maintain and prepare reports filed with the SEC. In addition, the Administrator assists in determining and publishing the Company’s net asset value, oversees the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. The Company reimburses the Administrator for its allocable portion of the costs and expenses incurred by the Administrator for overhead in performance by the Administrator of its duties under the Administration Agreement, including the cost of facilities, office equipment and the Company’s allocable portion of cost of compensation and related expenses of its Chief Financial Officer and Chief Compliance Officer and their respective staffs, as well as any costs and expenses incurred by the Administrator relating to any administrative or operating services provided by the Administrator to the Company. Such costs are reflected as an administrative fee in the accompanying statements of operations.

 

The Company has also entered into a fee waiver agreement with the Administrator, pursuant to which the Administrator may waive, in whole or in part, its entitlement to receive reimbursements from the Company.

 

The Company accrued administrative fees of $66,250 and $198,750$132,500 for the three and ninesix months ended SeptemberJune 30, 2021,2022, respectively, as set forth within the accompanying statements of operations. The Company accrued administrative fees of $66,250 and $198,750$132,500 for the three and ninesix months ended SeptemberJune 30, 2020,2021, respectively, as set forth within the accompanying statements of operations.

 

Related Party Fees

Fees due to related parties as of SeptemberJune 30, 20212022 and December 31, 20202021 on the Company’s accompanying statements of assets and liabilities were as follows:

 

  September 30, 2021  December 31, 2020 
Net base management fee due to Adviser $615,785  $597,141 
Net incentive fee due to Adviser  26,009   17,703 
Total fees due to Adviser, net of waivers  641,794   614,844 
Fee due to Administrator, net of waivers  66,250   66,250 
Total Related Party Fees Due $708,044  $681,094 

  June 30, 2022  December 31, 2021 
Net base management fee due to Adviser $703,439  $620,269 
Net incentive fee due to Adviser  93,274   20,060 
        Total fees due to Adviser, net of waivers  796,713   640,329 
        Fee due to Administrator, net of waivers  66,250   66,250 
              Total Related Party Fees Due $862,963  $706,579 
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Note 5. Net Increase in Net Assets Resulting from Operations Per Share of Common Stock:

 

The following table sets forth the computation of basic and diluted net increase in net assets resulting from operations per weighted average share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:

 

 Three Months Ended
September 30, 2021		  Three Months Ended
September 30, 2020		  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		  Three Months Ended
June 30, 2022		  Three Months Ended
June 30, 2021		  Six Months Ended
June 30, 2022		  Six Months Ended
June 30, 2021		 
Numerator for basic and diluted net increase in net assets resulting from operations per common share $4,241,313  $9,195,505  $13,539,858  $4,420,458  $1,898,573  $4,221,191  $4,944,381  $9,298,545 
Denominator for basic and diluted weighted average common shares  39,909,673   38,265,852   39,295,800   37,528,161   44,710,073   39,009,531   43,742,436   38,983,776 
                
Basic and diluted net increase in net assets resulting from operations per common share $0.11  $0.24  $0.34  $0.12  $0.04  $0.11  $0.11  $0.24 

 

Note 6. Income Tax

 

The Company has elected to be regulated as a BDC under the 1940 Act, as well as elected to be treated, and intends to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code. As a RIC, the Company generally is not subject to corporate-level U.S. federal income taxes on any ordinary income or capital gains that it timely distributes as dividends for U.S. federal income tax purposes to its stockholders. To qualify to be treated as a RIC, the Company is required to meet certain source of income and asset diversification requirements, and to timely distribute dividends out of assets legally available for distributions to its stockholders of an amount generally equal to at least 90% of the sum of its net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any (i.e., “investment company taxable income,” determined without regard to any deduction for dividends paid), for each taxable year. The amount to be paid out as distributions to the Company’s stockholders is determined by the Board of Directors and is based on management’s estimate of the fiscal year earnings. Based on that estimate, the Company intends to make the requisite distributions to its stockholders, which will generally relieve the Company from corporate-level U.S. federal income taxes. Although the Company currently intends to distribute its net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, recognized in respect of each taxable year as dividends out of the Company’s assets legally available for distribution, the Company in the future may decide to retain for investment and be subject to entity-level income tax on such net capital gains. Additionally, depending on the level of taxable income earned in a taxable year, the Company may choose to carry forward taxable income in excess of current year distributions into the next taxable year and incur a 4% excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year distributions, the Company will accrue an excise tax, if any, on estimated excess taxable income as such excess taxable income is earned.

 

The Company had aggregate distributions declared and paid to its stockholders for the year ended December 31, 2021 of $15,794,187, or $0.40 per share. The tax character of the distributions declared and paid represented $15,541,807 from ordinary income and $252,380 from tax return of capital. The Company had aggregate distributions declared and paid to its stockholders for the year ended December 31, 2020 of $16,177,757, or $0.43 per share. The tax character of the distributions declared and paid represented $15,911,638 from ordinary income and $266,119 from tax return of capital. The

During the three and six months ended June 30, 2022, the Company had aggregatedeclared distributions declared and paid to its stockholders for the year ended December 31, 2019 of $17,084,202,$8,739,352, or $0.52$0.20 per share. The tax character of the distributions declared and paid represented $16,941,968$8,739,352 from ordinary income and $142,234 from tax return of capital.

income. During the ninethree and six months ended SeptemberJune 30, 2021, the Company declared and paid distributions of $7,801,905, or $0.20 per share. The tax character of the distributions declared and paid represented $7,656,579 from ordinary income and $145,326 from tax return of capital. During the nine months ended September 30, 2020, the Company declared and paid distributions of $8,125,607, or $0.215 per share. The tax character of the distributions declared and paid represented $8,125,607 from ordinary income.

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The determination of the tax attributes of the Company’s distributions is made annually at the end of the

Company’s taxable year, based upon the Company’s taxable income for the full taxable year and distributions paid for the full taxable year. Therefore, a determination made on an interim basis may not be representative of the actual tax attributes of distributions for a full taxable year. The actual tax characteristics of distributions to stockholders will be reported to the Company’s stockholders subject to information reporting after the close of each calendar year on Form 1099-DIV.

 

U.S. GAAP requires adjustments to certain components of net assets to reflect permanent differences between financial and tax reporting. These adjustments have no effect on net asset value per share. For the years ended December 31, 20202021 and 2019,2020, the Company recorded the following adjustments for permanent book to tax differences to reflect their tax characteristics. The adjustments only change the classification in net assets in the statements of assets and liabilities. During the years ended December 31, 20202021 and 2019,2020, the Company reclassified for book purposes amounts arising from permanent book/tax differences primarily related to distribution redesignations and return of capital distributions.

 

  Year Ended
December 31, 2020		  Year Ended
December 31, 2019		 
Capital in excess of par value $-  $(1,583)
Accumulated net investment income  (37,662)  (49,515)
Accumulated net realized gain (loss)  37,662   51,098 

Year Ended
December 31, 2021		Year Ended
December 31, 2020
Capital in excess of par value$-$-
Accumulated net investment income-(37,662)
Accumulated net realized gain (loss)      -37,662

 

At December 31, 20202021 and 2019,2020, the components of distributable taxable earnings as detailed below differ from the amounts reflected in the Company’s statements of assets and liabilities by temporary book/tax differences primarily arising from amortization of organizational expenditures.

 

  As of
December 31,
2020		  As of
December 31,
2019		 
Other temporary book/tax differences $(192,992) $(213,307)
Net tax basis unrealized depreciation  (1,261,543)  (1,847,095)
Accumulated net realized loss  (3,157,649)  (670,443)
Components of tax distributable (deficit) earnings at period end $(4,612,184) $(2,730,845)

  As of
December 31,
2021		  As of
December 31,
2020		 
Other temporary book/tax differences $(172,677) $(192,992)
Net tax basis unrealized depreciation  (1,238,244)  (3,630,949)
Accumulated net realized loss  (3,353,867)  (3,157,649)
Components of tax distributable (loss) earnings at period end $(4,764,788) $(6,981,590)

 

Certain losses incurred by the Company after October 31 of a taxable year are deemed to arise on the first business day of the Company’s next taxable year. The Company did not incur such losses after October 31 of the Company’s taxable year ended December 31, 2020.2021.

 

Capital losses are generally eligible to be carried forward indefinitely and retain their status as short-term or long-term in the manner originally incurred by the Company. As of December 31, 2020,2021, the Company has long-term capital loss carryforward of $3,157,649.$3,353,867. The Company has evaluated tax positions it has taken, expects to take, or that are otherwise relevant to the Company for purposes of determining whether any relevant tax positions would “more-likely-than-not” be sustained by the applicable tax authority in accordance with ASC Topic 740, “Income Taxes,” as modified by ASC Topic 946. The Company has analyzed such tax positions and has concluded that no unrecognized tax benefits should be recorded for uncertain tax positions for taxable years that may be open. 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 twelve months. The Company’s U.S. federal tax returns for fiscal years 2018, 2019, 2020, and 20202021 remain subject to examination by the Internal Revenue Service. The Company records tax positions that are not deemed to meet a more-likely-than-not threshold as tax expenses as well as any applicable penalties or interest associated with such positions. During each of the years ended December 31, 2021, 2020, 2019, and 2018,2019, no tax expense or any related interest or penalties were incurred.

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Note 7. Equity

 

An investor made capital commitments to the Company in the amounts set forth below as of the date opposite each capital commitment:

 

AmountAmount  DateAmount  Date
$140,000,000  June 23, 2015140,000,000 June 23, 2015
$50,000,000  December 2, 201650,000,000 December 2, 2016
$100,000,000  On December 7, 2017100,000,000 On December 7, 2017
$40,000,000  March 22, 201940,000,000 March 22, 2019
$30,000,000  September 23, 201930,000,000 September 23, 2019
$11,200,000  March 20, 202011,200,000 March 20, 2020
$8,900,000  May 28, 20218,900,000 May 28, 2021
$110,000,000 December 15, 2021

 

As of SeptemberJune 30, 2021, all2022, $55,000,000 of total capital commitments have been fundedremained unfunded by the Company’s investors.

 

The number of shares of Common Stock issued and outstanding as of SeptemberJune 30, 20212022 and December 31, 2020,2021, were 39,961,40543,696,762 and 38,343,580,39,961,408, respectively.

On April 22, 2022, the Company issued a Tender Offer to repurchase $20.0 million worth of Common Stock from the stockholders. The Offer expired on May 19, 2022.

 

The following table details the activity of Stockholders’ Equity for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:

Three Months Ended September 30, 2021 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders'
Equity		 
Balance as of June 30, 2021 $39,009  $369,880,141  $(5,339,624) $364,579,526 
Net investment income  -   -   3,964,041   3,964,041 
Net realized gain from investment transactions  -   -   183,204   183,204 
Net change in unrealized appreciation on investments  -   -   94,068   94,068 
Issuance of shares  952   8,899,048   -   8,900,000 
Balance as of September 30, 2021 $39,961  $378,779,189  $(1,098,311) $377,720,839 

Three Months Ended September 30, 2020 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders'
Equity		 
Balance as of June 30, 2020 $37,793  $359,092,751  $(15,631,499) $343,499,045 
Net investment income  -   -   3,798,741   3,798,741 
Net realized loss from investment transactions  -   -   (1,039,704)  (1,039,704)
Net change in unrealized appreciation on investments  -   -   6,436,468   6,436,468 
   Issuance of shares  550   4,999,450   -   5,000,000 
Balance as of September 30, 2020 $38,343  $364,092,201  $(6,435,994) $357,694,550 

 

Three Months Ended June 30, 2022 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders’
Equity		 
Balance as of March 31, 2022 $43,167  $408,668,955  $(1,718,980) $406,993,142 
   Net investment income  -   -   4,891,997   4,891,997 
   Net realized gain from investment transactions  -   -   111,779   111,779 
   Net change in unrealized appreciation on investments  -   -   (3,105,203)  (3,105,203)
   Issuance of shares  530   24,999,470   -   25,000,000 
   Repurchase of shares  -   (20,000,000)  -   (20,000,000)
   Distributions to Stockholders  -   -   (8,739,352)  (8,739,352)
   Reinvested Dividends  -   27   -   27 
Balance as of June 30, 2022 $43,697  $413,668,452  $(8,559,759) $405,152,390 

Three Months Ended June 30, 2021 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders’
Equity		 
Balance as of March 31, 2021 $39,009  $370,025,442  $(1,904,236) $368,160,215 
   Net investment income  -   -   3,768,409   3,768,409 
   Net realized gain from investment transactions  -   -   (696,642)  (696,642)
   Net change in unrealized appreciation on investments  -   -   1,149,424   1,149,424 
   Issuance of shares  -   -   -   - 
   Distributions to Stockholders  -   (145,326)  (7,656,579)  (7,801,905)
   Reinvested Dividends  -   25   -   25 
Balance as of June 30, 2021 $39,009  $369,880,141  $(5,339,624) $364,579,526 
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Six Months Ended June 30, 2022 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders’
Equity		 
Balance as of December 31, 2021 $39,961  $378,672,161  $(4,764,788) $373,947,334 
   Net investment income  -   -   9,278,182   9,278,182 
   Net realized gain from investment transactions  -   -   337,565   337,565 
   Net change in unrealized appreciation on investments  -   -   (4,671,366)  (4,671,366)
   Issuance of shares  3,736   54,996,264   -   55,000,000 
   Repurchase of shares  -   (20,000,000)  -   (20,000,000)
   Distributions to Stockholders  -   -   (8,739,352)  (8,739,352)
   Reinvested Dividends  -   27   -   27 
Balance as of June 30, 2022 $43,697  $413,668,452  $(8,559,759) $405,152,390 

 

Nine Months Ended September 30, 2021 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders'
Equity		 
Six Months Ended June 30, 2021 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders’
Equity		 
Balance as of December 31, 2020 $38,343  $363,826,108  $(6,981,590) $356,882,861  $38,343  $363,826,108  $(6,981,590) $356,882,861 
Net investment income  -   -   11,620,620   11,620,620   -   -   7,656,579   7,656,579 
Net realized loss from investment transactions  -   -   (450,168)  (450,168)
Net realized gain from investment transactions  -   -   (633,372)  (633,372)
Net change in unrealized appreciation on investments  -   -   2,369,406   2,369,406   -   -   2,275,338   2,275,338 
Issuance of shares  1,618   15,098,382   -   15,100,000   666   6,199,334   -   6,200,000 
Distributions to Stockholders  -   (145,326)  (7,656,579)  (7,801,905)  -   (145,326)  (7,656,579)  (7,801,905)
Reinvested Dividends  -   25   -   25   -   25   -   25 
Balance as of September 30, 2021 $39,961  $378,779,189  $(1,098,311) $377,720,839 
Balance as of June 30, 2021 $39,009  $369,880,141  $(5,339,624) $364,579,526 

 

Nine Months Ended September 30, 2020 Common Stock  Capital in Excess
of Par Value		  Total
Distributable
(Loss) Earnings		  Total
Stockholders'
Equity		 
Balance as of December 31, 2019 $35,110  $334,095,408  $(2,730,845) $331,399,673 
Net investment income  -   -   12,195,676   12,195,676 
   Net realized loss from investment transactions  -   -   (1,043,096)  (1,043,096)
   Net change in unrealized depreciation on investments  -   -   (6,732,122)  (6,732,122)
   Issuance of shares  3,233   29,996,767   -   30,000,000 
   Distributions to Stockholders  -   -   (8,125,607)  (8,125,607)
   Reinvested Dividends  -   26   -   26 
Balance as of September 30, 2020 $38,343  $364,092,201  $(6,435,994) $357,694,550 

Note 8. Borrowings

Short-Term Borrowings

From time to time, the Company finances the purchase of certain investments through repurchase agreements. In the repurchase agreements, the Company enters into a trade to sell an investment and contemporaneously enters into a trade to buy the same investment back on a specified date in the future with the same counterparty. Investments sold under repurchase agreements are accounted for as collateralized borrowings as the sale of the investment does not qualify for sale accounting under ASC Topic 860—Transfers and Servicing and remains as an investment on the Statement of Assets and Liabilities. The Company uses repurchase agreements as a short-term financing alternative. As of June 30, 2022, the Company had short-term borrowings outstanding of $35,894,306. For the three and six months ended June 30, 2022, the Company recorded interest expense in connection with short-term borrowings of $95,634 and $136,800, respectively. As of June 30, 2021, the Company had no short-term borrowings outstanding. For the three and six months ended June 30, 2021, the Company recorded no interest expense in connection with short-term borrowings. As of December 31, 2021, the Company had short-term borrowing outstanding of $8,224,250. As of December 31, 2021, the Company recorded no interest expense in connection with short-term borrowings.

 

Note 8.9. Commitments and Contingencies

 

The Company may enter into certain credit agreements that include loan commitments where all or a portion of such commitment may be unfunded. The Company is generally obligated to fund the unfunded loan commitments at the borrowers’ discretion. Funded portions of credit agreements are presented on the accompanying schedule of investments. Unfunded loan commitments and funded portions of credit agreements are fair valued and unrealized appreciation or depreciation, if any, have been included in the accompanying statements of assets and liabilities and statements of operations.

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34

 

The following table summarizes the Company’s significant contractual payment obligations as of SeptemberJune 30, 20212022 and December 31, 2020:2021:

 

Investment Industry September 30, 2021  December 31, 2020 
AmeriVet, Senior Secured Incremental Delayed Draw Term Loan, 5.75% (Libor + 4.75%), maturity 6/5/24 Healthcare & Pharmaceuticals $884,000  $- 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24 Healthcare & Pharmaceuticals  761,905   1,100,952 
CoolSys, Senior Secured Closing Date Initial Term Loan, 5.50% (Libor + 4.75%), maturity 8/11/28 Services: Business  555,556   - 
Vertellus, Senior Secured Revolving Credit Loan, 7.00% (Libor + 6.00%), maturity 12/22/25 Chemicals, Plastics & Rubber  486,239   486,239 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27 Services: Business  426,923   546,154 
Therapy Brands, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/18/28 Healthcare & Pharmaceuticals  382,979   - 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27 Transportation: Cargo  358,491   358,491 
EPIC Insurance, Unitranche, 6.00% (Libor + 5.25%), maturity 9/30/28 Banking, Finance, Insurance & Real Estate  344,828   - 
Gastro Health, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 7/3/28 Healthcare & Pharmaceuticals  328,000   - 
Evans Network, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 8/19/28 Transportation: Cargo  326,531   - 
Dessert Holdings, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 6/9/28 Beverage, Food & Tobacco  281,250   - 
Epic Staffing Group, Senior Secured Initial Term Loan, 7.00% (Libor + 6.00%), maturity 2/5/27 Services: Business  243,243   - 
TricorBraun, Senior Secured Closing Date Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 3/3/28 Containers, Packaging & Glass  222,118   - 
Flow Control Group, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/31/28 Capital Equipment  188,333   - 
SIAA, Unitranche, 7.25% (Libor + 6.25%), maturity 4/28/28 Banking, Finance, Insurance & Real Estate  175,439   - 
Insight Global, Senior Secured Initial Revolving Loan, 6.75% (Libor + 6.00%), maturity 9/22/27 Services: Business  134,177   - 
Stepping Stones, Unitranche, 7.25% (Libor + 6.25%), maturity 3/9/27 Healthcare & Pharmaceuticals  131,390   - 
Ned Stevens, Senior Secured Revolving Loan, 5.75% (Libor + 4.75%), maturity 9/30/25 Services: Consumer  130,719   130,719 
Applied Adhesives, Senior Secured Term A Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 Containers, Packaging & Glass  129,870   - 
EPIC Insurance, Senior Secured Revolving Loan, 6.00% (Libor + 5.25%), maturity 9/30/27 Banking, Finance, Insurance & Real Estate  125,909   - 
ImageFirst, Senior Secured Initial Term Loan, 5.25% (Libor + 4.50%), maturity 4/27/28 Services: Business  86,364   - 
Solis Mammography, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 4/17/28 Healthcare & Pharmaceuticals  20,000   - 
Therma Holdings, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/16/27 Services: Business  80,645   80,645 
Alpaca, Senior Secured Revolver, 6.25% (Libor + 5.25%), maturity 4/19/24 Healthcare & Pharmaceuticals  80,244   51,770 
Culligan, Senior Secured Initial Term B Loan, 4.50% (Libor + 4.00%), maturity 7/31/28 Environmental Industries  62,500   - 
Applied Adhesives, Senior Secured Revolving Loan, 5.75% (Libor + 5.00%), maturity 3/12/27 Containers, Packaging & Glass  34,133   - 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27 High Tech Industries  -  ��408,879 
HighTower, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 1/31/25 Banking, Finance, Insurance & Real Estate  -   241,935 
EverCommerce, Senior Secured Initial Term Loan, 5.65% (Libor + 5.50%), maturity 8/23/25 High Tech Industries  -   144,200 
Worley Claims Services, Senior Secured Initial Term Loan (First Lien), 4.13% (Libor + 4.00%), maturity 6/3/26 Services: Business  -   50,125 
Stepping Stones, Senior Secured COVID-19 Revolving Loan, 6.75% (Libor + 5.75%), maturity 6/30/21 Healthcare & Pharmaceuticals  -   36,644 
Stepping Stones, Unitranche, 6.75% (Libor + 5.75%), maturity 12/12/24 Healthcare & Pharmaceuticals  -   33,949 
OEConnection, Senior Secured Initial Term Loan, 4.13% (Libor + 4.00%), maturity 9/25/26 High Tech Industries  -   5,865 
    $6,981,786  $3,676,567 

Investment Industry June 30, 2022  December 31, 2021 
PracticeTek, Senior Secured Delayed Draw Term Loan, 7.79% (LIBOR + 5.50%), maturity 11/23/27 High Tech Industries $1,889,312  $2,862,595 
Cherry Bekaert, Senior Secured Delayed Draw Term Loan, 2.29%, maturity 1/0/00 Banking, Finance, Insurance & Real Estate  1,232,944   - 
American Vision Partners, Senior Secured Delayed Draw Term Loan, 8.04% (LIBOR + 5.75%), maturity 9/30/27 Healthcare & Pharmaceuticals  1,872,093   1,453,488 
EdgeCo, Senior Secured Delayed Draw Term D Loan, 5.79% (SOFR + 4.75%), maturity 6/1/26 Banking, Finance, Insurance & Real Estate  1,200,000   - 
Golden Source, Senior Secured Delayed Draw Term Loan, 6.54% (SOFR + 5.50%), maturity 5/31/28 High Tech Industries  938,967   - 
Discovery Education, Senior Secured Delayed Draw Term Loan, 6.79% (SOFR + 5.75%), maturity 3/10/29 Services: Business  807,692   - 
Ned Stevens, Senior Secured Delayed Draw Term Loan, 7.04% (SOFR + 6.00%), maturity 6/30/29 Services: Consumer  798,838   - 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 7/9/24 Healthcare & Pharmaceuticals  761,905   761,905 
Eliassen, Senior Secured Initial Delayed Draw Term Loan, 6.79% (SOFR + 5.75%), maturity 4/7/28 Services: Business  740,741   - 
Paradigm Oral Health, Senior Secured Delayed Draw Term Loan, 5.79% (SOFR + 4.75%), maturity 7/9/26 Healthcare & Pharmaceuticals  621,481   - 
Cherry Bekaert, Senior Secured Revovling Credit, 2.29%, maturity 6/30/28 Banking, Finance, Insurance & Real Estate  616,472   - 
The Facilities Group, Senior Secured Delayed Draw Term Loan, 8.04% (LIBOR + 5.75%), maturity 11/30/27 Services: Business  602,601   758,671 
Advancing Eyecare, Senior Secured Initial Delayed Draw Term Loan, 6.79% (SOFR + 5.75%), maturity 6/13/29 Healthcare & Pharmaceuticals  500,000   - 
Golden Source, Senior Secured Revolving Credit, 6.54% (SOFR + 5.50%), maturity 5/31/28 High Tech Industries  469,484   - 
CoolSys, Senior Secured Delayed Draw Term Loan, 7.04% (LIBOR + 4.75%), maturity 8/11/28 Services: Business  465,278   465,278 
Vertellus, Senior Secured Revolving Credit Loan, 8.29% (LIBOR + 6.00%), maturity 12/22/25 Chemicals, Plastics and Rubber  413,303   379,266 
Blue Cloud, Senior Secured Delayed Draw Term Loan, 6.04% (SOFR + 5.00%), maturity 1/21/28 Healthcare & Pharmaceuticals  400,000   - 
Therapy Brands, Senior Secured Delayed Draw Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 5/18/28 Healthcare & Pharmaceuticals  382,979   382,979 
Micro Merchant Systems, Senior Secured Delayed Draw Term Loan, 8.04% (LIBOR + 5.75%), maturity 12/14/27 Healthcare & Pharmaceuticals  370,370   - 
InnovateMR, Senior Secured Revolving Loan, 8.04% (LIBOR + 5.75%), maturity 1/20/28 Services: Business  365,388   - 
PracticeTek, Senior Secured Revolving Loan, 7.79% (LIBOR + 5.50%), maturity 11/23/27 High Tech Industries  357,824   357,824 
Liberty Group, Senior Secured Delayed Draw Term Loan, 2.29%, maturity 6/9/28 Services: Business  340,909   - 
Evans Network, Senior Secured Delayed Draw Term Loan (First Lien), 6.54% (LIBOR + 4.25%), maturity 8/19/28 Transportation: Cargo  326,531   326,531 
Paragon Films, Senior Secured Delayed Draw Term Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/16/28 Containers, Packaging and Glass  297,030   297,030 
Dessert Holdings, Senior Secured Delayed Draw Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 6/9/28 Beverage, Food and Tobacco  281,250   281,250 
BETA, Senior Secured Revolving Credit Facility, 6.29% (SOFR + 5.25%), maturity 7/1/27 Banking, Finance, Insurance & Real Estate  276,289   - 
Ned Stevens, Senior Secured Revolving Credit, 7.04% (SOFR + 6.00%), maturity 6/30/28 Services: Consumer  237,836   - 
Discovery Education, Senior Secured Revolving Facility, 6.79% (SOFR + 5.75%), maturity 4/7/28 Services: Business  230,769   - 
Blue Cloud, Senior Secured Revolving Loan, 6.04% (SOFR + 5.00%), maturity 1/21/28 Healthcare & Pharmaceuticals  227,273   - 
FLS Transportation, Senior Secured Delayed Draw Term Loan, 7.54% (LIBOR + 5.25%), maturity 12/18/28 Transportation: Cargo  217,391   - 
EPIC Insurance, Senior Secured Delayed Draw Term Loan, 7.54% (LIBOR + 5.25%), maturity 9/29/28 Banking, Finance, Insurance & Real Estate  210,093   241,379 
Specialty Products & Insulation, Senior Secured Delayed Draw Term Loan, 6.29% (SOFR + 5.25%), maturity 12/21/27 Construction & Building  203,046   - 
Radwell, Senior Secured Delayed Draw Term Loan, 6.79% (SOFR + 5.75%), maturity 4/1/29 Capital Equipment  200,001   - 
Alliance Environmental Group, Senior Secured Delayed Draw Term Loan, 8.29% (LIBOR + 6.00%), maturity 12/30/27 Environmental Industries  182,119   662,252 
Alliance Environmental Group, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 12/30/27 Environmental Industries  182,119   331,126 
Liberty Group, Senior Secured Revolving Loan, 2.29%, maturity 6/9/28 Services: Business  181,818   - 
Ivy Rehab, Senior Secured Delayed Draw Term Loan (First Lien), 5.79% (SOFR + 4.75%), maturity 2/17/29 Healthcare & Pharmaceuticals  179,739   - 
Epic Staffing Group, Senior Secured Delayed Draw Term Loan, 7.04% (SOFR + 6.00%), maturity 6/28/29 Healthcare & Pharmaceuticals  174,419   - 
USALCO, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 10/19/26 Chemicals, Plastics and Rubber  169,355   298,387 
Ivy Rehab, Senior Secured Revolving Credit (First Lien), 5.79% (SOFR + 4.75%), maturity 3/15/28 Healthcare & Pharmaceuticals  168,350   - 
EPIC Insurance, Senior Secured Revolving Loan, 7.54% (LIBOR + 5.25%), maturity 9/30/27 Banking, Finance, Insurance & Real Estate  161,841   125,909 
Integro Insurance Brokers, Senior Secured Delayed Draw Term Loan, 8.04% (LIBOR + 5.75%), maturity 10/31/22 Banking, Finance, Insurance & Real Estate  161,041   - 
Secretariat International, Senior Secured Delayed Draw Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 12/29/28 Services: Business  134,211   - 
Forefront, Senior Secured Delayed Draw Term Loan, 5.29% (SOFR + 4.25%), maturity 4/2/29 Healthcare & Pharmaceuticals  132,598   - 
Service Logic, Senior Secured Delayed Draw Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 10/29/27 Services: Business  130,769   196,154 
Community Brands, Senior Secured Delayed Draw Term Loan, 6.79% (SOFR + 5.75%), maturity 2/24/28 Banking, Finance, Insurance & Real Estate  117,647   - 
Omni Logistics, Senior Secured Revolving Credit Loan (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/30/25 Transportation: Cargo  113,834   85,376 
Micro Merchant Systems, Senior Secured Revolving Loan, 8.04% (LIBOR + 5.75%), maturity 12/14/27 Healthcare & Pharmaceuticals  111,111   - 
Tank Holding, Senior Secured Revolving Credit Loan, 7.04% (SOFR + 6.00%), maturity 3/31/28 Capital Equipment  110,769   - 
Insight Global, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 9/22/27 Services: Business  110,697   67,089 
Hissho Sushi, Senior Secured Revolving Credit Loan, 7.04% (SOFR + 6.00%), maturity 5/18/28 Beverage, Food and Tobacco  109,524   - 
Therma Holdings, Senior Secured Initial DDTL (2021), 6.29% (LIBOR + 4.00%), maturity 12/16/27 Services: Business  90,276   - 
FLS Transportation, Senior Secured Revolving Loan, 7.54% (LIBOR + 5.25%), maturity 12/17/27 Transportation: Cargo  88,889   - 
Radwell, Senior Secured Revolving Loan, 6.79% (SOFR + 5.75%), maturity 4/1/28 Capital Equipment  79,998   - 
Paradigm Oral Health, Senior Secured Revolving Loan, 5.79% (SOFR + 4.75%), maturity 7/9/26 Healthcare & Pharmaceuticals  74,074   - 
Magnate, Senior Secured Delayed Draw Term Loan (First Lien), 7.79% (LIBOR + 5.50%), maturity 12/29/28 Transportation: Cargo  71,429   - 
CPS, Senior Secured Revolving Credit Loan, 8.04% (LIBOR + 5.75%), maturity 5/27/28 Healthcare & Pharmaceuticals  71,414   - 
Omni Logistics, Senior Secured Tranche 2 DDTL (First Lien), 7.29% (LIBOR + 5.00%), maturity 12/30/26 Transportation: Cargo  68,750   118,750 
Community Brands, Senior Secured Revolving Loan, 6.79% (SOFR + 5.75%), maturity 2/24/28 Banking, Finance, Insurance & Real Estate  58,824   - 
Applied Adhesives, Senior Secured Revolving Loan, 7.29% (LIBOR + 5.00%), maturity 3/12/27 Containers, Packaging and Glass  55,111   64,000 
Tekni-Plex, Senior Secured Tranche B-3 DDTL Term Loan, 6.29% (LIBOR + 4.00%), maturity 9/15/28 Containers, Packaging and Glass  52,766   84,681 
Keter Environmental Services, Unitranche, 8.79% (LIBOR + 6.50%), maturity 10/29/27 Environmental Industries  50,160   - 
BlueHalo, Senior Secured Revolving Loan, 8.29% (LIBOR + 6.00%), maturity 10/31/25 Aerospace and Defense  44,770   73,967 
Applied Adhesives, Senior Secured Delayed Draw Term Loan, 7.29% (LIBOR + 5.00%), maturity 3/12/27 Containers, Packaging and Glass  27,721   62,963 
AmeriVet, Senior Secured Incremental Delayed Draw Term Loan, 7.04% (LIBOR + 4.75%), maturity 6/5/24 Healthcare & Pharmaceuticals  -   536,000 
Alpaca, Senior Secured Revolver, 7.29% (LIBOR + 5.00%), maturity 4/19/24 Healthcare & Pharmaceuticals  -   129,426 
Therma Holdings, Senior Secured Initial DDTL (2021), 6.04% (LIBOR + 3.75%), maturity 12/16/27 Services: Business  -   96,880 
Gastro Health, Senior Secured Delayed Draw Term Loan (First Lien), 6.79% (LIBOR + 4.50%), maturity 7/3/28 Healthcare & Pharmaceuticals  -   94,975 
Flow Control Group, Senior Secured Amendment No. 1 Delayed Draw Term Loan (First Lien), 6.04% (LIBOR + 3.75%), maturity 3/31/28 Capital Equipment  -   77,083 
Alpaca, Senior Secured Delayed Draw Term A-2 Loan, 7.04% (LIBOR + 4.75%), maturity 4/19/24 Healthcare & Pharmaceuticals  -   66,723 
ImageFirst, Senior Secured Delayed Draw Tranche A Term Loan, 6.79% (LIBOR + 4.50%), maturity 4/27/28 Healthcare & Pharmaceuticals  -   22,727 
Solis Mammography, Senior Secured Delayed Draw Term Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 4/17/28 Healthcare & Pharmaceuticals  -   20,000 
Capstone Logistics, Senior Secured Initial DDTL Loan (First Lien), 7.04% (LIBOR + 4.75%), maturity 11/12/27 Transportation: Cargo  -   221,132 
InMark, Senior Secured Initial Delayed Draw Term Loan, 8.29% (LIBOR + 6.00%), maturity 12/23/26 Containers, Packaging and Glass  -   1,250,000 
Brook & Whittle, Senior Secured Delayed Draw Term Loan (First Lien), 6.29% (LIBOR + 4.00%), maturity 12/14/28 Containers, Packaging and Glass  -   529,101 
Ned Stevens, Senior Secured Revolving Loan, 7.54% (LIBOR + 5.25%), maturity 9/30/25 Services: Consumer  -   130,719 
    $22,322,233  $13,913,615 

 

Unfunded commitments representedrepresent all amounts unfunded as of SeptemberJune 30, 20212022 and December 31, 2020.2021. These amounts may or may not be funded to the borrowing party now or in the future.

34

35

 

Note 10. Financial Highlights

 

Note 9. Financial Highlights

 Three Months Ended
September 30, 2021		  Three Months Ended
September 30, 2020		  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		  Three Months
Ended
June 30, 2022		  Three Months
Ended
June 30, 2021		  Six Months
Ended
June 30, 2022		  Six Months
Ended
June 30, 2021		 
Per Share Data:                                
Net asset value, beginning of period $9.35  $9.09  $9.31  $9.44  $9.43  $9.44  $9.36  $9.31 
Net investment income(a)  0.10   0.10   0.30   0.32   0.11   0.10   0.21   0.20 
Net realized gain (loss) on investments and change in                
unrealized appreciation (depreciation) on investments(a)(b)(c)  0.00   0.14   0.04   (0.22)
Net increase (decrease) in net assets resulting from operations $0.10  $0.24  $0.34  $0.10 
Net realized gain (loss) on investments and change in unrealized (depreciation) appreciation on investments(a)(b)  (0.07)  0.01   (0.10)  0.04 
Net increase in net assets resulting from operations $0.04  $0.11  $0.11  $0.24 
                                
Effect of equity capital activity                                
Distributions to stockholders from net investment income  -   -   (0.20)  (0.21)  (0.20)  (0.20)  (0.20)  (0.20)
Distributions to stockholders from return of capital(c)  -   -   0.00   -   -   0.00   -   0.00 
Net asset value at end of period $9.45  $9.33  $9.45  $9.33  $9.27  $9.35  $9.27  $9.35 
Total return(d)(h)  1.07%  2.64%  3.65%  1.16%  0.39%  1.15%  1.14%  2.56 
Shares of common stock outstanding at end of period  39,961,405   38,343,577   39,961,405   38,343,577   43,696,759   39,009,533   43,696,759   39,009,533 
                                
Statement of Assets and Liabilities Data:                                
Net assets at end of period $377,720,839  $357,694,550  $377,720,839  $357,694,550  $405,152,390  $364,579,526  $405,152,390  $364,579,526 
Average net assets(e)  376,129,598   353,156,796   370,187,593   348,029,571   411,333,880   368,203,033   408,884,968   367,216,591 
                                
Ratio/Supplemental Data:                                
Ratio of gross expenses to average net assets-annualized(f)  1.63%  1.76%  1.62%  2.02%  2.29%  1.56%  2.04%  1.61%
Ratio of net expenses to average net assets-annualized(g)  1.04  %  1.06  %  1.05 %   1.10  %
Ratio of net expenses to average net assets-annualized(g)  1.28%  1.10%  1.16%  1.06%
Ratio of net investment income to average net assets-annualized  4.18%  4.28%  4.20%  4.68%  4.77%  4.11%  4.58%  4.20%
Portfolio turnover(h)  1.38%  0.21%  4.80%  1.95%  0.95%  1.41%  0.97%  2.82%

 

(a)Based on weighted average basic per share of Common Stock data.

(b)The per share amount varies from the net realized and unrealized gain (loss) for the period because of the timing of sales
of fund shares and the per share amount of realized and unrealized gains and losses at such time.

(c)For the three and ninesix months ended SeptemberJune 30, 2021, the 0.00 is due to rounding.

(d)Total return is based on the change in net asset value during the respective periods. Total return also takes into account
dividends and distributions, if any, reinvested in accordance with the Company'sCompany’s dividend reinvestment plan.

(e)Average net assets are computed using the average balance of net assets at the end of each month of the reporting period.

(f)Ratio of gross expenses to average net assets is computed using expenses before waivers from the Adviser and Administrator.

(g)Ratio of net expenses to average net assets is computed using total expenses net of waivers from the Adviser and Administrator.

(h)Not annualized.

  

Note 10.11. Indemnification

 

In the normal course of business, the Company may enter into certain contracts that provide a variety of indemnities. The Company’s maximum exposure under these indemnities is unknown. The Company does not consider it necessary to record a liability in this regard.

 

Note 11.12. Subsequent Events

 

Subsequent to SeptemberJune 30, 2021,2022 through August 11, 2022, the Company invested $4,381,567$12,376,465 at cost in 16 different portfolio companies.

 

On June 22, 2022, the Company delivered a capital drawdown notice to an investor relating to the sale of 3,236,246 shares of the Common Stock for an aggregate offering price of $30.0 million. The sale closed on July 8, 2022. On July 14, 2022, the Company issued a Tender Offer to repurchase $15.0 million worth of Common Stock from the Stockholder. The Offer will expire on August 11, 2022.

The sale of Common Stock was made pursuant to a subscription agreement entered into by the Company and the investor. Under the terms of the subscription agreement, the investor is required to fund drawdowns to purchase shares of Common Stock up to the amount of its capital commitment on an as-needed basis with a minimum of 10 calendar days’ prior notice.

The issuance of the Common Stock is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof. The Company has not engaged in general solicitation or advertising with regard to the issuance and sale of the Common Stock and has not offered securities to the public in connection with such issuance and sale.

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35

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

In this quarterly report on Form 10-Q, except where the context suggests otherwise, the terms “we,” us,” our” and the “Company” refer to Audax Credit BDC Inc. The information contained in this section should be read in the conjunction with the financial statements and notes to the financial statements appearing elsewhere in this quarterly report.

 

This quarterly report and other statements contain forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our company, our current and prospective portfolio investments, our industry, our beliefs and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not 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:

 

·our future operating results;

·our business prospects and the prospects of our portfolio companies;

·changes in political, economic or industry conditions, rising interest rates and conditions affecting the financial and capital markets, which could result in changes to the value of our abilityassets;

·changes in the general economy, slowing economy, rising inflation and risk of recession;

·supply chain disruptions in connection with shutdowns in China and elsewhere [and similar factors related to continue to effectively manage our business due to COVID-19COVID-19];

·uncertainty surrounding financial and similar pandemics;political stability of the United States, the United Kingdom, the European Union, and China, and the war between Russia and Ukraine;

·the ability of our portfolio companies to achieve their objectives;

·the timing of cash flows, if any, from the operations of our portfolio companies;

·the ability of our Adviser to locate suitable investments for us and to monitor and administer our investments;

·changes in the general economy;

·risk associated with possible disruptions in our operations or the economy generally;

·the effect of investments that we expect to make;

·our contractual arrangements and relationships with third parties;

·actual and potential conflicts of interest with Adviser and its affiliates;

·the dependence of our future success on the general economy and its effect on the industries in which we invest;

·changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financialour ability to continue to effectively manage our business due to COVID-19 and capital markets, which could result in changes to the value of our assets;similar pandemics;

·the adequacy of our financing sources and working capital;

·the ability of our Adviser and its affiliates to attract and retain highly talented professionals;

·our ability to qualify and maintain our qualification as a BDC and as a RIC; and

·the risks, uncertainties and other factors we identify under “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K filed on March 19, 202125, 2022 (file no. 814-01154) (the “Annual Report”).

 

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. 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 and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled “Item 1A. Risk Factors” of this quarterly report and our Annual Report as well as risk factors described or identified in other filings we may make with the SEC from time to time.time. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this quarterly report. Moreover, we assume no duty and do not undertake to update the forward-looking statements. The forward-looking statements and projections contained in this quarterly report are excluded from the safe harbor protection provided by Section 27A of the Securities Act and provided by Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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37

 

OVERVIEW

 

Audax Credit BDC Inc. is a Delaware corporation that was formed on January 29, 2015. We are an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a BDC under the 1940 Act. In addition, we have elected to be treated for U.S. federal income tax purposes, and intendintends to comply with the requirements to qualify annually, as a RIC under Subchapter M of the Code.

 

Our investment objective is to generate current income and, to a lesser extent, long-term capital appreciation. We intend to meet our investment objective by investing primarily in senior secured debt of privately owned U.S. middle market companies. We intend to invest at least 80% of our net assets plus the amount of any borrowings in “credit instruments,” which we define as any fixed income instruments. We may also invest, at any time and from time to time, in syndicated loans, securities, structured products and other financial instruments, including, without limitation, corporate and government bonds, convertible securities, term loans, equity securities (both common and preferred), various debt securities (both secured and unsecured), dividend-paying equity, royalties, collateralized loan obligations, and warrants.

 

Although we have no present intention of doing so, we may decide to incur leverage. If we do incur leverage, however, we anticipate that it will be used in limited circumstances and on a short-term basis for purposes such as funding distributions. As a BDC, we are limited in our use of leverage under the 1940 Act. Under the 1940 Act, a BDC generally is required to maintain asset coverage of 200% for senior securities representing indebtedness (such as borrowings from banks or other financial institutions) or stock (such as preferred stock). The Small Business Credit Availability Act (the “SBCAA”), which was signed into law on March 23, 2018, provides that a BDC'sBDC’s required asset coverage under the 1940 Act may be reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity). This reduction in asset coverage permits a BDC to double the amount of leverage it may utilize, subject to certain approval, timing and reporting requirements, including either stockholder approval or approval of a majority of the directors who are not “interested persons” (as defined in the 1940 Act) of the BDC and who have no financial interest in the arrangement. In addition, as a non-traded BDC, if we receive the relevant approval to increase our authorized leverage, we will be required to offer our stockholders the opportunity to sell their shares of Common Stock over the next year following the calendar quarter in which the approval was obtained. In determining whether to use leverage, we will analyze the maturity, covenants and interest rate structure of the proposed borrowings, as well as the risks of such borrowings within the context of our investment outlook and the impact of leverage on our investment portfolio. The amount of any leverage that we will employ as a BDC will be subject to oversight by our Board of Directors.

 

We generate revenue in the form of interest on the debt securities that we hold in our portfolio companies. The senior debt we invest in generally has stated terms of three to ten years. Our senior debt investments generally bear interest at a floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally will become due at the maturity date. In addition, we may generate revenue in the form of commitment and other fees in connection with transactions, although we do not expect to do so. OID as well as market discount and premium are accreted and amortized in determining our interest income. We record any prepayment premiums on loans and debt securities as income.

 

COVID-19 and Related Developments

 

The marketMarket disruptions caused by the ongoing COVID-19 pandemic may continue tohave adversely affectaffected the business operations of some, if not all, of our portfolio companies and may continue to affect ourtheir operations, as well as and the operations of our Adviser. As the COVID-19 outbreak to evolve, weWe cannot predict its continuingthe ultimate full impact of COVID-19 on our business operations, including its duration in the United Statesextent of the global economic recovery and worldwide, the uncertainty surrounding the variousefficiency and success of the global vaccination mandatesefforts as more contagious strains of the virus emerge in various countries, including the United States (particularly the “Delta variant”).States. Such contagious variants, in conjunction with business re-openings, more frequent and concentrated social gatherings, including the re-opening of many schools and colleges across the country, and more relaxed mask requirements and social distancing normsdecreasing public concern regarding COVID-19 have resulted in surges in the rates of COVID-19 infections worldwide. Furthermore, large portions of the population in the United States and elsewhere remain unvaccinated dueworldwide. Even if the prevalence of COVID-19 diminishes, lingering impacts such as supply chain disruptions and inflation are negatively affecting our portfolio companies and may lead to limited access to vaccines, the politicization of the vaccine mandates, the general public distrust of the safety and efficacy of the vaccine and the potential future adverse reactions to the vaccine. Such developments may increase the risk that the pandemic will continue for a prolonged period of time. As such, the extent to whichdecline in economic growth. We expect COVID-19 and/or other health pandemics mayand consequent supply chain disruptions to affect negatively our operating results and financial condition and the operating results and financial condition of some of our portfolio companies, as well as the duration of any potential business or supply-chain disruption for our portfolio companies, is uncertain.

38

companies. We will continue to monitor developments relating to the COVID-19 pandemic and guidance from U.S. and international authorities, including federal, state and local public health officials and may take additional actions based on their recommendations. In these circumstances, there may be developments beyond our control requiring us to adjust our plan of operation. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future. However, we expect that it may continue to have an adverse impact on our future net asset value, net investment income, the fair value of our portfolio investments, and the results of operations and financial condition of some of our portfolio companies, and that such adverse effects may persist for the duration of the pandemic and potentially for some time thereafter.

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PORTFOLIO COMPOSITION AND INVESTMENT ACTIVITY

 

Portfolio Composition

 

The fair value of our investments, comprised of syndicated loans and equity, as of SeptemberJune 30, 2021,2022, was approximately $363,441,460$436,812,969 and held in 203228 portfolio companies. The fair value of our investments, comprised of syndicated loans and equity, as of December 31, 2020,2021, was approximately $355,359,843$403,054,374 and held in 186215 portfolio companies.companies as of December 31, 2021.

 

During the ninesix months ended SeptemberJune 30, 2021,2022, we invested in 6866 new investments for a combined $81,669,043$67,368,883 and in existing investments for a combined $7,643,513.$7,468,693. We also received $66,357,177$33,069,168 in repayments from investments and $17,331,786$4,047,932 from investments sold during the ninesix months ended SeptemberJune 30, 2021.2022. During the ninesix months ended SeptemberJune 30, 2020,2021, we invested in 4043 new syndicated investments for a combined $39,542,336$48,768,159 and in existing investments for a combined $12,834,005.$6,849,818. We also received $27,907,668$47,805,480 in repayments from investments and $6,437,456$10,135,008 from investments sold during the ninesix months ended SeptemberJune 30, 2020.2021.

 

In addition, for the three and ninesix months ended SeptemberJune 30, 2022, we had a change in unrealized depreciation of approximately $3,105,203 and $4,671,366 respectively, and realized gains of $111,779 and $337,565, respectively. In addition, for the three and six months ended June 30, 2021, we had a change in unrealized appreciation of approximately $94,068$1,149,424 and $2,369,406, respectively, and realized gains (losses) of $183,204 and $(450,168), respectively. For the three and nine months ended September 30, 2020, we had a change in unrealized appreciation (depreciation) of approximately $6,436,468 and $(6,732,122),$2,275,338 respectively, and realized losses of $1,039,704$696,642 and $1,043,096,$633,372, respectively.

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Our investment activity for the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, is presented below:

 

  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		 
Beginning investment portfolio, at fair value $355,359,843  $330,874,911 
Investments in new portfolio investments  81,669,043   39,542,336 
Investments in existing portfolio investments  7,643,513   12,834,005 
Principal repayments  (66,357,177)  (27,907,668)
Proceeds from investments sold  (17,331,786)  (6,437,456)
Change in premiums, discounts and amortization  538,786   357,873 
Net change in unrealized appreciation (depreciation) on investments  2,369,406   (6,732,122)
Realized loss on investments  (450,168)  (1,043,096)
Ending portfolio investment activity, at fair value $363,441,460  $341,488,783 
Number of portfolio investments  233   202 
Average investment amount, at cost $1,565,249  $1,733,010 
Percentage of investments at floating rates  99.42%  99.41%

  

Six Months Ended

June 30, 2022

  

Six Months Ended

June 30, 2021

 
Beginning investment portfolio, at fair value $403,054,374  $355,359,843 
Investments in new portfolio investments  67,368,883   48,768,159 
Investments in existing portfolio investments  7,468,693   6,849,818 
Principal repayments  (33,069,168)  (47,805,480)
Proceeds from investments sold  (4,047,932)  (10,135,008)
Change in premiums, discounts and amortization  371,920   380,092 
Net change in unrealized (depreciation) appreciation on investments  (4,671,366)  2,275,338 
Realized gain (loss) on investments  337,565   (633,372)
Ending portfolio investment activity, at fair value $436,812,969  $355,059,390 
Number of portfolio investments  254   225 
Average investment amount, at cost $1,743,002  $1,584,067 
Percentage of  investments at floating rates  100.00%  100.00%

 

As of SeptemberJune 30, 20212022 and December 31, 2020,2021, our entire portfolio consisted of non-controlled/non-affiliated investments.

 

RECENT DEVELOPMENTS

 

Subsequent to SeptemberJune 30, 20212022 and through NovemberAugust 11, 2021,2022, we invested $4,381,567$12,376,465 at cost in 16 portfolio companies.

 

On June 22, 2022, we delivered a capital drawdown notice to an investor relating to the sale of 3,236,246 shares of the Common Stock for an aggregate offering price of $30.0 million. The sale closed on July 8, 2022. On July 14, 2022, the Company issued a Tender Offer to repurchase $15.0 million worth of Common Stock. The Offer will expire on August 11, 2022.

38

The sale of Common Stock was made pursuant to a subscription agreement entered into by us and the investor. Under the terms of the subscription agreement, the investor is required to fund drawdowns to purchase shares of Common Stock up to the amount of its capital commitment on an as-needed basis with a minimum of 10 calendar days’ prior notice.

The issuance of the Common Stock is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof. We have not engaged in general solicitation or advertising with regard to the issuance and sale of the Common Stock and have not offered securities to the public in connection with such issuance and sale.

RESULTS OF OPERATIONS

 

The net increase or decrease in net assets from operations may vary substantially from period to period as a result of various factors, including the recognition of realized gains and/or losses and net change in unrealized appreciation and depreciation. This “Results of Operations” section should be read in conjunction with the “COVID-19 Developments” section above.

 

Revenue

 

Total investment income for the three and ninesix months ended SeptemberJune 30, 20212022 and 20202021 is presented in the table below.

 

 Three Months Ended
September 30, 2021		  Three Months Ended
September 30, 2020		  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		  

Three Months Ended

June 30, 2022

  

Three Months Ended

June 30, 2021

  

Six Months Ended

June 30, 2022

  

Six Months Ended

June 30, 2021

 
Total interest income from non-controlled/non-affiliated investments $4,924,039  $4,721,470  $14,455,194  $14,885,290  $6,062,310  $4,762,471  $11,452,128  $9,531,156 
Total other interest income  477   1,058   1,107   31,053   397   356   781   630 
Total other income  20,772   14,577   83,774   153,950   140,256   15,488   178,374   63,002 
Total investment income $4,945,288  $4,737,105  $14,540,075  $15,070,293  $6,202,963  $4,778,315  $11,631,283  $9,594,788 

 

Total investment income for the three months ended SeptemberJune 30, 20212022 increased to $4,945,288$6,202,963 from $4,737,106$4,778,315 for the three months ended SeptemberJune 30, 2020,2021, and was driven by our increasing investment balance which was partially offset by a decreasethe increase in LIBOR over the period.LIBOR. Total investment income for the ninesix months ended SeptemberJune 30, 2021 decreased2022 increased to $14,540,075$11,631,283 from $15,070,293$9,594,788 for the ninesix months ended SeptemberJune 30, 2020,2021, and was driven by a decreasean increase in LIBOR over the period which was partially offset byand from our increasing investment balance. As of SeptemberJune 30, 20212022 and 2020,2021, the size of our debt portfolio was $364,195,915$440,648,277 and $348,947,419$355,907,913 at amortized cost, respectively, with total debt principal amount outstanding of $366,609,077$444,868,471 and $350,848,873,$358,274,679, respectively.

 

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Expenses

 

Total expenses net of waivers for the three and ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, were as follows:

 

  Three Months Ended
September 30, 2021		  Three Months Ended
September 30, 2020		  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		 
Base management fee(a) $947,361  $874,188  $2,810,141  $2,697,570 
Incentive fee(a)  260,092   356,461   647,839   1,641,419 
Administrative fee(a)  66,250   66,250   198,750   198,750 
Directors' fees  56,250   52,500   168,750   157,500 
Professional fees  108,251   132,514   345,947   369,572 
Other expenses  108,702   83,232   314,632   191,422 
Total expenses  1,546,906   1,565,145   4,486,059   5,256,233 
Base management fee waivers(a)  (331,576)  (305,966)  (983,548)  (944,150)
Incentive fee waivers(a)  (234,083)  (320,815)  (583,056)  (1,437,466)
Total expenses, net of waivers $981,247  $938,364  $2,919,455  $2,874,617 

  

Three Months Ended

June 30, 2022

  

Three Months Ended

June 30, 2021

  

Six Months Ended

June 30, 2022

  

Six Months Ended

June 30, 2021

 
Base management fee(a) $1,082,214  $948,730  $2,120,653  $1,862,780 
Incentive fee(a)  747,892   96,455   1,174,214   387,748 
Administrative fee(a)  66,250   66,250   132,500   132,500 
Directors’ fees  56,250   56,250   112,500   112,500 
Professional fees  210,862   144,378   292,537   237,696 
Other expenses  85,257   116,707   164,434   205,930 
Interest expense  95,634   -   136,800   - 
Total expenses  2,344,359   1,428,770   4,133,638   2,939,154 
Base management fee waivers(a)  (378,775)  (332,055)  (742,229)  (651,972)
Incentive fee waivers(a)  (654,618)  (86,809)  (1,038,308)  (348,973)
Total expenses, net of waivers $1,310,966  $1,009,906  $2,353,101  $1,938,209 

 

(a)Refer to Note 4-Related Party Transactions within the financial statements for a description of the relevant fees.

(a) Refer to Note 4-Related Party Transactions within the financial statements for a description of the relevant fees.39

 

The increase in base management fees before waivers for the three months ended SeptemberJune 30, 20212022 in comparison to the three months ended SeptemberJune 30, 20202021 was driven by our increasing invested balance. For the three months ended SeptemberJune 30, 20212022 and 2020,2021, we accrued gross base management fees before waivers of $947,361$1,082,214 and $874,188,$948,730, respectively. Offsetting those fees, we recognized base management fee waivers of $331,576$378,775 and $305,966, respectively.$332,055, respectively, for the same periods. The increase in incentive fees related to net investment income for the three months ended June 30, 2022 in comparison to the three months ended June 30, 2021 was driven by the increase in LIBOR which increased the yield of our variable rate debt investments. For the three months ended SeptemberJune 30, 2022, we accrued incentive fees related to net investment income before waivers of $747,892, offset by incentive fee waivers of $654,618. For the three months ended June 30, 2021, we accrued incentive fees related to net investment income before waivers of $260,092,$96,455, offset by incentive fee waivers of $234,083. For the three months ended September 30, 2020, we accrued incentive fees related to net investment income before waivers of $356,461, offset by incentive fee waivers of $320,815.$86,809. Additionally, we accrued $66,250 of administrative fees for botheach of the three months ended SeptemberJune 30, 20212022 and 2020. Refer to Note 4 — Related Party Transactions in the notes accompanying our financial statements for more information related to base management fees, incentive fees and waivers.

During the three months ended September 30, 2021 and 2020, we incurred professional fees of $108,251 and $132,514, respectively, related to audit fees, tax fees, and legal expenses. The decrease in professional fees was driven by a decrease in legal expenses during the three months ended September 30, 2021

During the three months ended September 30, 2021 and 2020, we incurred other expenses of $108,702 and $83,232, respectively, related to subscription fees, operating fees, custody fees, and other company expenses. The increase in other expenses was driven by an increase in the Delaware state franchise tax applicable to the Company for the three months ended September 30, 2021. We also incurred expenses related to fees paid to our independent directors of $56,250 and $52,500 for each of the three-month period ended September 30, 2021 and 2020, respectively.

The increase in base management fees before waivers for the nine months ended September 30, 2021 in comparison to the nine months ended September 30, 2020 was driven by our increasing invested balance. For the nine months ended September 30, 2021 and 2020, we accrued gross base management fees before waivers of $2,810,141 and $2,697,570, respectively. Offsetting those fees, we recognized base management fee waivers of $983,548 and $944,150, respectively. For the nine months ended September 30, 2021, we accrued incentive fees related to net investment income before waivers of $647,839, offset by incentive fee waivers of $583,056. For the nine months ended September 30, 2020, we accrued incentive fees related to net investment income before waivers of $1,641,419, offset by incentive fee waivers of $1,437,466. The decrease in incentive fees related to net investment income for the nine months ended September 30, 2021 in comparison to the nine months ended September 30, 2020 was driven by the decrease in LIBOR which decreased the yield of our variable rate debt investments. Additionally, we accrued $198,750 of administrative fees for both the nine months ended September 30, 2021 and 2020. Refer to Note 4 — Related Party Transactions in the notes accompanying our financial statements for more information related to base management fees, incentive fees and waivers.

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During the nine months ended September 30, 2021 and 2020, we incurred professional fees of $345,947 and $369,572, respectively, related to audit fees, tax fees, and legal expenses. The decrease in professional fees was driven by a decrease in legal expenses during the nine months ended September 30, 2021

 

During the ninethree months ended SeptemberJune 30, 20212022 and 2020,2021, we incurred other expenses of $314,632$85,257 and $191,422,$116,707, respectively, related to subscription fees, operating fees, custody fees, and other company expenses. The increase in other expenses was driven by an increase in the Delaware state franchise tax applicable to the Company during the nine months ended September 30, 2021. We also incurred expenses related to fees paid to our independent directors of $168,750 and $157,500$56,250 for each of the nine-month period ended Septemberthree-month periods June 30, 20212022 and 2020,2021, respectively.

 

The increase in base management fees before waivers for the six months ended June 30, 2022 in comparison to the six months ended June 30, 2021 was driven by our increasing invested balance. For the six months ended June 30, 2022 and 2021, we accrued gross base management fees before waivers of $2,120,653 and $1,862,780, respectively. Offsetting those fees, we recognized base management fee waivers of $742,229 and $651,972, respectively. The increase in incentive fees related to net investment income for the six months ended June 30, 2022 in comparison to the six months ended June 30, 2021 was driven by our increasing invested balance and the increase in LIBOR, which increased the yield of our variable rate debt investments. For the six months ended June 30, 2022, we accrued incentive fees related to net investment income before waivers of $1,174,214, offset by incentive fee waivers of $1,038,308. For the six months ended June 30, 2021, we accrued incentive fees related to net investment income before waivers of $387,748, offset by incentive fee waivers of $348,973. Additionally, we accrued $132,500 of administrative fees for both the six months ended June 30, 2022 and 2021. Refer to Note 4 — Related Party Transactions in the notes accompanying our financial statements for more information related to base management fees, incentive fees and waivers.

During the six months ended June 30, 2022 and 2021, we incurred other expenses of $164,434 and $205,930, respectively, related to subscription fees, operating fees, custody fees, and other company expenses. We also incurred expenses related to fees paid to our independent directors of $112,500 for each of the six-month period ended June 30, 2022 and 2021.

Realized and Unrealized Gains and Losses

 

We recognized $183,204$111,779 and $(1,039,704)$(696,642) in net realized gains (losses) for the three months ended SeptemberJune 30, 20212022 and 2020,2021, respectively. We recognized $450,168$337,565 and $1,043,096$(633,372) in net realized lossesgain (losses) for the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, respectively.

 

Net change in unrealized appreciation (depreciation) on investments for the three and ninesix months ended SeptemberJune 30, 20212022 and 20202021 was as follows:

 

Type Three Months Ended
September 30, 2021		  Three Months Ended
September 30, 2020		  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		 
First Lien Debt $25,297  $6,103,810  $1,638,283  $(6,149,319)
Second Lien Debt  20,633   381,273   438,678   (668,484)
Equity and Preferred Shares  48,138   (48,615)  292,445   85,681 
Net change in unrealized appreciation (depreciation) on investments $94,068  $6,436,468  $2,369,406  $(6,732,122)

Type 

Three Months Ended

June 30, 2022

  

Three Months Ended

June 30, 2021

  

Six Months Ended

June 30, 2022

  

Six Months Ended

June 30, 2021

 
First Lien Debt $(3,238,517) $478,044  $(4,756,762) $1,612,986 
Second Lien Debt  66,559   385,035   15,629   418,045 
Equity and Preferred Shares  66,756   286,345   69,768   244,307 
Net change in unrealized (depreciation) appreciation on investments $(3,105,202) $1,149,424  $(4,671,365) $2,275,338 

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Net change in unrealized appreciationdepreciation on investments during the three and ninesix months ended SeptemberJune 30, 20212022 was primarily due to the change in the results and financial position of the portfolio companies. Net change in unrealized appreciation (depreciation) on investments during the three and ninesix months ended SeptemberJune 30, 20202021 was primarily due to the change in the results and financial position of the portfolio companies.

 

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

 

We generate cash primarily from the net proceeds of any offering of shares of our Common Stock, from cash flows from interest and fees earned from our investments, and from principal repayments and proceeds from sales of our investments. Our primary usesuse of cash areis investments in portfolio companies, payments of our expenses and cash distributions to our stockholders. As of SeptemberJune 30, 20212022 and December 31, 2020,2021, we had cash of $13,397,892$31,727,018 and $4,289,122,$11,058,796, respectively. This “Financial Condition, Liquidity and Capital Resources” section should be read in conjunction with the “COVID-19 Developments” section above.

 

Operating Activities

 

Net cash used in operating activities for the six months ended June 30, 2022 was $41,486,759. The primary operating activities during this period were investments in portfolio companies. This was partially offset by repayments of bank loans. Net cash provided by operating activities for the ninesix months ended SeptemberJune 30, 2021 was $1,810,650. This was primarily driven by repayment of bank loans and sales of investments totaling $66,357,177 and $17,331,786, respectively, and was partially offset by investments in portfolio companies. Net cash used in operating activities for the nine months ended September 30, 2020 was $2,424,706.$17,706,055. The primary operating activities during this period were investments in portfolio companies. This was partially offset by repayments of bank loans.

 

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As of SeptemberJune 30, 2021 and December 31, 2020,2022, we had 26 and 1464 investments respectively, with unfunded commitments of $6,981,786 and $3,676,567, respectively.$22,322,233. As of December 31, 2021, we had 36 investments with unfunded commitments of $13,913,615. We believe that, as of both SeptemberJune 30, 20212022 and December 31, 2020,2021, we had sufficient assets to adequately cover any obligations under our unfunded commitments.

 

The following table summarizes our total portfolio activity during the ninesix months ended SeptemberJune 30, 20212022 and 2020:2021:

 

  Nine Months Ended
September 30, 2021		  Nine Months Ended
September 30, 2020		 
Beginning investment portfolio $355,359,843  $330,874,911 
Investments in new portfolio investments  81,669,043   39,542,336 
Investments in existing portfolio investments  7,643,513   12,834,005 
Principal repayments  (66,357,177)  (27,907,668)
Proceeds from sales of investments  (17,331,786)  (6,437,456)
Net change in unrealized appreciation (depreciation) on investments  2,369,406   (6,732,122)
Net realized loss on investments  (450,168)  (1,043,096)
Net change in premiums, discounts and amortization  538,786   357,873 
Investment Portfolio, at Fair Value $363,441,460  $341,488,783 

  

Six Months Ended

June 30, 2022

  

Six Months Ended

June 30, 2021

 
Beginning investment portfolio $403,054,374  $355,359,843 
Investments in new portfolio investments  67,368,883   48,768,159 
Investments in existing portfolio investments  7,468,693   6,849,818 
Principal repayments  (33,069,168)  (47,805,480)
Proceeds from sales of investments  (4,047,932)  (10,135,008)
Net change in unrealized (depreciation) appreciation on investments  (4,671,366)  2,275,338 
Net realized gain (loss) on investments  337,565   (633,372)
Net change in premiums, discounts and amortization  371,920   380,092 
Investment Portfolio, at Fair Value $436,812,969  $355,059,390 

 

Financing Activities

 

Net cash provided by our financing activities for the ninesix months ended SeptemberJune 30, 20212022 was $7,298,120$62,154,981, which consisted of $15,100,000$55,000,000 from issuances of 1,617,822 shares of Common Stock3,735,351 Shares to our stockholders, in connection with our capital calls during the period and $35,894,306 in connection with our short-term borrowings during the period. This was partially offset by $20,000,000 in repurchases of shares to our stockholders, in connection to the tender offer during the period and $8,739,325 in distributions payable to stockholders. Net cash used in our financing activities for the six months ended June 30, 2021 was $1,601,880 which consisted of $7,801,880 of distributions paid to our common stockholders. Net cash providedThis was partially offset by our financing activities for the nine months ended September 30, 2020 was $21,874,419, which consisted of$6,200,000 received from issuances of 3,234,331 shares of Common Stock665,951 Shares to our stockholders, in connection with our capital calls and our dividend reinvestment plan during the period. This was partially offset by $8,125,581 of distributions paid to our common stockholders.

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Equity Activity

 

An investor made capital commitments to us in the amounts set forth below as of the date opposite each capital commitment:

 

AmountAmount  DateAmount  Date 
$140,000,000  June 23, 2015140,000,000  June 23, 2015 
$50,000,000  December 2, 201650,000,000  December 2, 2016 
$100,000,000  On December 7, 2017100,000,000  On December 7, 2017 
$40,000,000  March 22, 201940,000,000  March 22, 2019 
$30,000,000  September 23, 201930,000,000  September 23, 2019 
$11,200,000  March 20, 202011,200,000  March 20, 2020 
$8,900,000  May 28, 20218,900,000  May 28, 2021 
$110,000,000  December 15, 2021 

 

As of SeptemberJune 30, 2021, all the2022, $55,000,000 of total capital commitments have been fundedremained unfunded by our investors.

 

The number of shares of our Common Stock issued and outstanding as of SeptemberJune 30, 20212022 and December 31, 2020,2021, were 39,961,40543,696,762 and 38,343,580,39,961,408, respectively.

 

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Distributions to Stockholders – Common Stock Distributions

 

We have elected to be treated, and intends to comply with the requirements to qualify annually, as a RIC for U.S. federal income tax purposes. As a RIC, we generally are not subject to corporate-level U.S. federal income taxes on ordinary income or capital gains that we timely distribute as dividends for U.S. federal income tax purposes to our stockholders. To qualify to be taxed as a RIC and thus avoid corporate-level income tax on the income that we distribute as dividends to our stockholders, we are required to distribute dividends to our stockholders each taxable year generally of an amount at least equal to 90% of our investment company taxable income, determined without regard to the deduction for any dividends paid. To avoid a 4% excise tax on undistributed earnings, we are required to distribute dividends to our stockholders in respect of each calendar year of an amount at least equal to the sum of (i) 98% of our ordinary income (taking into account certain deferrals and elections) for such calendar year, (ii) 98.2% of our capital gain net income, adjusted for certain ordinary losses, for the one-year period ending October 31 of that calendar year and (iii) any income or capital gains recognized, but not distributed, in preceding calendar years and on which we incurred no federal income tax. We intend to make distributions to stockholders on an annual basis of substantially all of our net investment income. Although we intend to make distributions of net realized capital gains, if any, at least annually, out of assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. In addition, the extent and timing of special dividends, if any, will be determined by our Board of Directors and will largely be driven by portfolio specific events and tax considerations.

 

We may fund our cash distributions from any sources of funds available, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to us on account of preferred and common equity investments in portfolio companies and fee waivers from our Adviser. Our distributions may exceed our earnings, especially during the period before we have substantially invested the proceeds from an offering. As a result, a portion of the distributions may represent a return of capital for U.S. federal income tax purposes. Thus the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. In addition, we may be limited in our ability to make distributions due to the asset coverage test for borrowings applicable to us as a BDC under the 1940 Act. We declared distributions of $8,739,352, or $0.200 per share during the three and six months ended June 30, 2022. We declared and paid distributions of $7,801,905, or $0.200 per share during the ninethree and six months ended SeptemberJune 30, 2021. We declared and paid distributions of $8,125,607, or $0.215 per share during the nine months ended September 30, 2020.

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The determination of the tax attributes of our distributions is made annually at the end of our taxable year, based upon our taxable income for the full taxable year and distributions paid for the full taxable year. Therefore, estimates made on an interim basis may not be representative of the actual tax attributes of distributions for a full year. The actual tax characteristics of distributions to stockholders will be reported to stockholders subject to information reporting after the close of each calendar year on Form 1099-DIV.

 

Related Party Fees

 

For the three months ended SeptemberJune 30, 20212022 and 2020,2021, we recorded base management fees of $947,361$1,082,214 and $874,188,$948,730, respectively. Offsetting these fees were waivers to the base management fees of $331,576$378,775 and $305,966,$332,055, respectively, as set forth within the accompanying statements of operations.

 

For the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we recorded base management fees of $2,810,141$2,120,653 and $2,697,570,$1,862,780, respectively. Offsetting those fees were waivers to the base management fees of $983,548$742,229 and $944,150,$651,972, respectively, as set forth within the accompanying statements of operations.

 

For the three and nine months ended SeptemberJune 30, 2022 and 2021, we recorded incentive fees of $260,092$747,892 and $647,839,$96,455, respectively. Offsetting these fees were waivers to the incentive fees of $234,083$654,618 and $583,056, respectively, as set forth within the accompanying statements of operations. For the three and nine months ended September 30, 2020, we recorded incentive fees of $356,461 and $1,641,419, respectively. Offsetting these fees were waivers to the incentive fees of $320,815 and $1,437,466,$86,809, respectively, as set forth within the accompanying statements of operations.

 

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For the six months ended June 30, 2022 and 2021, we recorded incentive fees of $1,174,214 and $387,748, respectively. Offsetting those fees were waivers to the incentive fees of $1,038,308 and $348,973, respectively, as set forth within the accompanying statements of operations.

 

For both the three months ended SeptemberJune 30, 20212022 and 2020,2021, we recorded administrative fees of $62,500, as set forth within the accompanying statements of operations. For both the ninesix months ended SeptemberJune 30, 20212022 and 2020,2021, we recorded administrative fees of $198,750$132,500, as set forth within the accompanying statements of operations.

 

Fees due to related parties as of SeptemberJune 30, 20212022 and December 31, 20202021 on our accompanying statements of assets and liabilities were as follows:

 

  September 30, 2021  December 31, 2020 
Net base management fee due to Adviser $615,785  $597,141 
Net incentive fee due to Adviser  26,009   17,703 
Total fees due to Adviser, net of waivers  641,794   614,844 
Fee due to Administrator, net of waivers  66,250   66,250 
Total Related Party Fees Due $708,044  $681,094 

  June 30, 2022  December 31, 2021 
Net base management fee due to Adviser $703,439  $620,269 
Net incentive fee due to Adviser  93,274   20,060 
Total fees due to Adviser, net of waivers  796,713   640,329 
Fee due to Administrator, net of waivers  66,250   66,250 
Total Related Party Fees Due $862,963  $706,579 

 

Tender Offers

 

We do not currently intend to list shares of our Common Stock on any securities exchange, and we do not expect a public market for them to develop in the foreseeable future. Therefore, stockholders should not expect to be able to sell their shares of our Common Stock promptly or at a desired price. To provide our stockholders with limited liquidity, we may, in the absolute discretion of our Board of Directors, conduct an annual tender offer. Our tenders for the shares of Common Stock, if any, would be conducted on such terms as may be determined by our Board of Directors and in accordance with the requirements of applicable law, including Section 23(c) of the 1940 Act and Regulation M under the Exchange Act. We have not commenced any tender offers, and we do not currently intendOn April 22, 2022, the Company issued a Tender Offer to conduct any tender offers inrepurchase $20.0 million worth of Common Stock from the near future.stockholders. The Offer expired on May 19, 2022.

 

CRITICAL ACCOUNTING POLICIES

 

This discussion of our operations is based upon our financial statements, which are prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.

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Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. In addition to the discussion below, we describe our critical accounting policies in the notes to our financial statements.

 

Valuation of Investments

 

We conduct the valuation of our investments, pursuant to which our net asset value is determined, at all times consistent with GAAP and the 1940 Act. Our Board of Directors, with the assistance of our Audit Committee, determines the fair value of our investments, for investments with a public market and for investments with no readily available public market, on at least a quarterly basis, in accordance with the terms of ASC 820. Our valuation procedures are set forth in more detail below.

 

ASC 820 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.” Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same – to estimate the price when an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

 

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ASC 820 establishes a hierarchal disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

 

The three-level hierarchy for fair value measurement is defined as follows:

 

Level 1 — Inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. We do not adjust the quoted price for these instruments, even in situations where we hold a large position, and a sale could reasonably be expected to impact the quoted price.

 

Level 2 — Inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

 

Level 3 — Inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

 

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

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Pursuant to the framework set forth above, we value securities traded in active markets on the measurement date by multiplying the exchange closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. We may also obtain quotes with respect to certain of our investments from pricing services, brokers or dealers’ quotes, or counterparty marks in order to value liquid assets that are not traded in active markets.

 

Pricing services aggregate, evaluate and report pricing from a variety of sources including observed trades of identical or similar securities, broker or dealer quotes, model-based valuations and internal fundamental analysis and research. When doing so, we determine whether the quote obtained is sufficient according to GAAP to determine the fair value of the security. If determined adequate, we use the quote obtained.

 

Securities that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of our Board of Directors, does not represent fair value, are each valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data are available. These valuation techniques vary by investment but include comparable public market valuations, comparable precedent transaction valuations and discounted cash flow analyses. Inputs for these valuation techniques include relative credit information, observed market movement, industry sector information, and other market data, which may include benchmarking of comparable securities, issuer spreads, reported trades, and reference data, such as market research publications, when available. The process used to determine the applicable value is as follows:

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(i) Each portfolio company or investment is initially valued by the investment professionals of the Adviser responsible for the portfolio investment using a standardized template designed to approximate fair market value based on observable market inputs and updated credit statistics and unobservable inputs. Additionally, as a part of our valuation process, the Adviser may employ the services of one or more independent valuation firms engaged by us;

 

(ii) Preliminary valuation conclusions are documented and discussed with our senior management and members of the Adviser’s valuation team;

 

(iii) Our Audit Committee reviews the assessments of the Adviser or independent valuation firm (to the extent applicable) and provides our Board of Directors with recommendations with respect to the fair value of the investments in our portfolio; and

 

(iv) Our Board of Directors discusses the valuation recommendations of our Audit Committee and determines the fair value of the investments in our portfolio in good faith based on the input of the Adviser, the independent valuation firm (to the extent applicable) and in accordance with our valuation policy.

 

Our Audit Committee’s recommendation of fair value is generally based on its assessment of the following factors, as relevant:

 

·the nature and realizable value of any collateral;

 

·call features, put features and other relevant terms of debt;

 

·the portfolio company’s ability to make payments;

 

·the portfolio company’s actual and expected earnings and discounted cash flow;

 

·prevailing interest rates for like securities and expected volatility in future interest rates;

 

·the markets in which the portfolio company does business and recent economic and/or market events; and

 

·comparisons to publicly traded securities.

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Investment performance data utilized are the most recently available as of the measurement date, which in many cases may reflect up to a one quarter lag in information.

 

Securities for which market quotations are not readily available or for which a pricing source is not sufficient may include the following:

 

·private placements and restricted securities that do not have an active trading market;

 

·securities whose trading has been suspended or for which market quotes are no longer available;

 

·debt securities that have recently gone into default and for which there is no current market;

 

·securities whose prices are stale; and

 

·securities affected by significant events.

 

Our Board of Directors is responsible for the determination, in good faith, of the fair value of our portfolio investments.

 

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Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.

 

Security transactions are recorded on the trade date (the date the order to buy or sell is executed or, in the case of privately issued securities, the closing date, which is when all terms of the transactions have been defined). Realized gains and losses on investments are determined based on the identified cost method.

 

In addition, on December 3, 2020, the SEC announced that it adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The adoptednew rule clarifies how fund boards can satisfy their valuation obligations in light of recent market developments. The rule permitswill permit boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. We will continue to review the adopted rule and its impact on us and our valuation policies and intend to comply with such requirements on or before the SEC’s required compliance date in 2022.policies.

 

Refer to Note 3 — Investments in the notes to our accompanying financial statements included elsewhere in this quarterly report for additional information regarding fair value measurements and our application of ASC 820.

 

Revenue Recognition

 

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities for accounting purposes if we have reason to doubt our ability to collect such interest. OID, market discounts or premiums are accreted or amortized using the effective interest method as interest income. We record prepayment premiums on loans and debt securities as interest income.

 

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

 

We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

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PIK Interest

 

We may have investments in our portfolio that contain a PIK interest provision. Any PIK interest will be added to the principal balance of such investments and is recorded as income if the portfolio company valuation indicates that such PIK interest is collectible. In order to maintain our status as a RIC, substantially all of this income must be included in the amounts paid out by us to stockholders in the form of dividends, even if we have not collected any cash.

 

U.S. Income Taxes

 

We have elected to be subject to tax as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to incur any corporate-level U.S. federal income taxes on any ordinary income or capital gains that we distribute as dividends to our stockholders. To qualify and maintain our qualification as a RIC, we must meet certain source-of-income and asset diversification requirements as well as distribute dividends to our stockholders each taxable year of an amount generally at least equal to 90% of our investment company taxable income, determined without regard to any distributions paid.

 

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Depending on the level of taxable income earned in a taxable year, we may choose to retain taxable income in excess of current year distributions into the next taxable year. We would then incur a 4% excise tax on such taxable income, as required. To the extent that we determine that our estimated current year annual taxable income may exceed estimated current year distributions, we will accrue an excise tax, if any, on estimated excess taxable income as taxable income is earned. We did not accrue any excise tax for the fiscal years ended December 31, 2021, 2020, 2019, and 2018.2019.

 

Because U.S. federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary. Permanent differences are reclassified within capital accounts in the financial statements to reflect their tax character. Permanent differences may also result from differences in classification in certain items, such as the treatment of short-term gains as ordinary income for tax purposes. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

 

We evaluate tax positions taken or expected to be taken in the course of preparing our financial statements to determine whether any relevant tax positions would “more-likely-than-not” be sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are reversed and recorded as a tax benefit or expensed in the current fiscal year. All penalties and interest associated with any income taxes accrued are included in income tax expense. Conclusions regarding tax positions are subject to review and may be adjusted at a later date based on factors including, but not limited to, ongoing analyses of tax law, regulations and interpretations thereof. Our accounting policy on income taxes is critical because if we are unable to qualify, or once qualified, maintain our tax status as a RIC, we would be required to record a provision for corporate-level U.S. federal income taxes, as well as any related state or local taxes which may be significant to our financial results.

 

COMMITMENTS AND CONTINGENCIES

 

From time to time, we, the Adviser or the Administrator may become party to legal proceedings in the ordinary course of business, including proceedings related to the enforcement of our rights under contracts with our portfolio companies. Neither we, the Adviser nor the Administrator is currently subject to any material legal proceedings.

 

Unfunded commitments to provide funds to portfolio companies are not reflected in our accompanying statements of assets and liabilities. Our unfunded commitments may be significant from time to time. These commitments are subject to the same underwriting and ongoing portfolio maintenance as are the on-balance sheet financial instruments that we hold. Since these commitments may expire without being drawn, the total commitment amount does not necessarily represent future cash requirements. We use cash flow from normal and early principal repayments and proceeds from borrowings and offerings to fund these commitments. As of SeptemberJune 30, 2021,2022, we had 2664 investments with unfunded commitments of $6,981,786.$22,322,233. As of December 31, 2020,2021, we had 1436 investments with unfunded commitments of $3,676,567.$13,913,615. We believe that, as of SeptemberJune 30, 20212022 and December 31, 2020,2021, we had sufficient assets to adequately cover any obligations under our unfunded commitments.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are subject to financial market risks, including changes in interest rates. During the period covered by our financial statements, many of the loans in our portfolio had floating interest rates, and we expect that many of our loans to portfolio companies in the future will also have floating interest rates based on LIBOR or an equivalent risk-free index rate. Interest rate fluctuations may have a substantial negative impact on our investments, the value of our Common Stock and our rate of return on invested capital. In addition, U.S. and global capital markets and credit markets have experienced a higher level of stress due to the global COVID-19 pandemic, which has resulted in an increase in the level of volatility across such markets and a general decline in value of the securities held by us. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

 

Debt investments that we make may be based on floating rates, such as SOFR (as defined below), LIBOR, the Euro Interbank Offered Rate, the Federal Funds Rate or the Prime Rate. General interest rate fluctuations may have a substantial negative impact on our investments, the value of our securities and our rate of return on invested capital. It is unclear how increased regulatory oversight and the future of LIBOR may affect market liquidity and the value of the financial obligations to be held by or issued to us that are linked to LIBOR, or how such changes could affect our investments and transactions and financial condition or results of operations. On March 5, 2021, the Financial Conduct Authority and ICE Benchmark Authority announced that the publication of all EUR and CHF LIBOR settings, the Spot Next/Overnight, 1 week, 2 month and 12 month JPY and GBP LIBOR settings, and the 1 week and 2 months US dollar LIBOR settings ceased to be published as of December 31, 2021, while the publication of the overnight, 1 month, 3 month, 6 month, and 12 months U.S. dollar (“USD”) LIBOR settings will cease after June 30, 2023. The Alternative Reference Rates Committee, a U.S.-based group convened by the Federal Reserve and the Federal Reserve Bank of New York, has identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by the U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. We expect that a substantial portion of our future floating rate investments will be linked to SOFR.

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In addition, inflation resulting from supply chain disruptions caused by the war between Russia and Ukraine and the COVID-19 pandemic has resulted in a decrease in LIBOR and a general reductionincrease of certain interest rates by the U.S. Federal Reserve and other central banks. A continued declineincrease in interest rates, including LIBOR, could result in a reduction ofaffect our gross investment income.

 

Change in interest rates 

Increase (decrease) in


investment income

 
DownUp 300 basis points  10,902,798
Up 200 basis points6,454,113
Up 100 basis points2,005,428
Down 100 basis points(94,010100,639)
Down 200 basis points  (94,010100,639)
Down 100300 basis points  (94,010100,639)
Up 100 basis points1,680,396
Up 200 basis points5,346,486
Up 300 basis points9,012,577

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Although we believe that this measure is indicative of our sensitivity to interest rate changes, it does not reflect potential changes in the credit market, credit quality, size and composition of the assets on the Consolidated Statements of Assets and Liabilities and other business developments that could affect our net increase in net assets resulting from operations or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.

 

In addition, any investments we make that are denominated in a foreign currency will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved.

 

We may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

As of the period covered by quarterly this report, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness and design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective at a reasonable assurance level in timely alerting management, including the Chief Executive Officer and Chief Financial Officer, of material information about us required to be included in periodic SEC filings. However, in evaluation of the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

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Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II–OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We are not currently subject to any material legal proceeding, nor, to our knowledge, is any material legal proceeding threatened against us.

 

From time to time, we, our Adviser or Administrator may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

 

From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us.

 

ITEM 1A. RISK FACTORS

 

In addition to the risks discussed below, important risk factors that could cause results or events to differ from current expectations are described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 20202021 filed with the SEC on March 19, 2021.25, 2022.

 

Legislation passed in 2018 allows us to incur additional leverage and would require us to offer liquidity to our stockholders.

 

Under the 1940 Act, a BDC generally is required to maintain asset coverage of 200% for senior securities representing indebtedness (such as borrowings from banks or other financial institutions) or stock (such as preferred stock). The SBCAA, which was signed into law on March 23, 2018, provides that a BDC’s required asset coverage under the 1940 Act may be reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity). This reduction in asset coverage permits a BDC to double the amount of leverage it may utilize, subject to certain approval, timing and reporting requirements, including either stockholder approval or approval of a majority of the directors who are not “interested persons” (as defined in the 1940 Act) of the BDC and who have no financial interest in the arrangement. As a result, if we receive the relevant approval and we comply with the applicable disclosure requirements, we would be able to incur additional leverage, which may increase the risk of investing in us. In addition, since our base management fee is payable based upon our average adjusted gross assets, which includes any borrowings for investment purposes, our base management fee expenses may increase if we incur additional leverage.

 

We have not commenced any tender offers, and we do not currently intend to conduct any tender offers. As a non-traded BDC, however, if we receive the relevant approval to increase our authorized leverage, we will be required to offer our stockholders the opportunity to sell their shares of Common StockShares over the next year following the calendar quarter in which the approval was obtained. On April 22, 2022, the Company issued a Tender Offer to repurchase $20.0 million worth of Common Stock from the stockholders. The timing and method for such offers has not been determined at this time.Offer expired on May 19, 2022.

 

Political, social and economic uncertainty, including uncertainty related to Russia’s military invasion of Ukraine, create and exacerbate risks.

Russia’s invasion of Ukraine in February 2022 and corresponding events have had, and could continue to have, severe adverse effects on regional and global economic markets. Following Russia’s actions, various governments, including the United States, have issued broad-ranging economic sanctions against Russia, including, among other actions, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs; a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, the electronic banking network that connects banks globally; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. The duration of hostilities and the vast array of sanctions and related events (including cyberattacks and espionage) cannot be predicted. Those events present material uncertainty and risk with respect to markets globally, which pose potential adverse risks to us and the performance of our investments and operations. Any such market disruptions could affect our portfolio companies’ operations and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

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Inflation and Supply Chain Risk

Economic activity has continued to accelerate across sectors and regions. Nevertheless, due to global supply chain issues, geopolitical events, a rise in energy prices and strong consumer demand as economies continue to reopen, inflation is showing signs of acceleration in the U.S. and globally. Inflation is likely to continue in the near to medium-term, particularly in the U.S., with the possibility that monetary policy may tighten in response. Persistent inflationary pressures could affect our portfolio companies profit margins.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

Refer to our Current Report on Form 8-K filed on July 6, 2021April 4, 2022 for issuances of our Common Stock during the quarter ended SeptemberJune 30, 2021.2022. Such issuances were exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Regulation D thereunder.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

ITEM 6. EXHIBITS

 

3.1Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 (File no. 000-55426), filed on April 17, 2015).

 

3.2Form of Bylaws (Incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 10 (File no. 000-55426), filed on April 17, 2015).

 

31.1*Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

 

31.2*Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

 

32.1*Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended (18 U.S.C. 1350).

 

32.2*Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended (18 U.S.C. 1350).

 

99.1Code of Ethics (Incorporated by reference to Exhibit 99.1 to Pre-Effective Amendment No. 1 to the Registration Statement on Form 10, File No. 000-55426, filed on June 5, 2015).

 

 

*       Filed herewith

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 Audax Credit BDC Inc.
   

Date: November 12, 2021August 11, 2022 

By:

/s/ Michael P. McGonigle

  Michael P. McGonigle
  Chief Executive Officer

 

Date: November 12, 2021August 11, 2022 

By:

/s/ Richard T. Joseph

  Richard T. Joseph
  Chief Financial Officer

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