Texas
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75-1072796
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(State or other jurisdiction of incorporation
or organization)
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(I.R.S. Employer
Identification No.)
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5400 Lyndon B Johnson Freeway, Suite 1300, Dallas, Texas
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75240
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Leveraging the Experience of Our Management Team
. Our senior management team has extensive experience investing in and lending to middle market companies across changing market cycles. The members of our management team have diverse investment backgrounds, with prior experience at BDCs in the capacity of senior officers. We believe this extensive experience provides us with an in-depth understanding of the strategic, financial and operational challenges and opportunities of the middle market companies in which we invest. We believe this understanding allows us to select and structure better investments and to efficiently monitor and provide managerial assistance to our portfolio companies.
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Applying Rigorous Underwriting Policies and Active Portfolio Management
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Our senior management team has implemented rigorous underwriting policies that are followed in each transaction. These policies include a thorough analysis of each potential portfolio company’s competitive position, financial performance, management team operating discipline, growth potential and industry attractiveness, which we believe allows us to better assess the company’s prospects. After investing in a company, we monitor the investment closely, typically receiving monthly, quarterly and annual financial
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Investing Across Multiple Companies, Industries, Regions and End Markets
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We seek to maintain a portfolio of investments that is appropriately diverse among various companies, industries, geographic regions and end markets. This portfolio balance is intended to mitigate the potential effects of negative economic events for particular companies, regions, industries and end markets. However, we may from time to time hold securities of an individual portfolio company that comprise more than 5% of our total assets and/or more than 10% of the outstanding voting securities of the portfolio company. For that reason, we are classified as a non-diversified investment company that has elected to be regulated as a BDC under the 1940 Act.
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Utilizing Long-Standing Relationships to Source Deals
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Our senior management team and investment professionals maintain extensive relationships with entrepreneurs, financial sponsors, attorneys, accountants, investment bankers, commercial bankers and other non-bank providers of capital who refer prospective portfolio companies to us. These relationships historically have generated significant investment opportunities. We believe that our network of relationships will continue to produce attractive investment opportunities.
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Focusing on Underserved Markets
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The middle market has traditionally been underserved. We believe that operating margin and growth pressures, as well as regulatory concerns, have caused many financial institutions to de-emphasize services to middle market companies in favor of larger corporate clients and more liquid capital market transactions. We also invest in securities that would be rated below investment grade if they were rated. We believe these dynamics have resulted in the financing market for middle market companies being underserved, providing us with greater investment opportunities.
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Focus on Established Companies
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We generally invest in companies with established market positions, proven management teams with strong operating discipline, histories of generating revenues, and recurring cash flow streams. We believe that those companies generally possess better risk adjusted return profiles than earlier stage companies that are building their management teams and establishing their revenue base. We also believe that established companies in our target size range generally provide opportunities for capital appreciation.
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Capital Structures Appropriate for Potential Industry and Business Volatility.
Our investment team spends significant time understanding the performance of both the target portfolio company and its specific industry throughout a full economic cycle. The history of each specific industry and target portfolio company will demonstrate a different level of potential volatility in financial performance. We seek to understand this dynamic thoroughly and invest our capital at leverage levels in the capital structure that will remain within enterprise value and in securities that will receive interest payments if such downside volatility were to occur.
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Providing Customized Financing Solutions
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We offer a variety of financing structures and have the flexibility to structure our investments to meet the needs of our portfolio companies. Often we invest in senior and subordinated debt securities, coupled with equity interests. We believe our ability to customize financing structures makes us an attractive partner to middle market companies.
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Companies with Positive and Sustainable Cash Flow
: We generally seek to invest in established companies with sound historical financial performance.
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Excellent Management
: Management teams with a proven record of achievement, exceptional ability, unyielding determination and integrity. We believe management teams with these attributes are more likely to manage the companies in a manner that protects and enhances value.
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Industry:
We primarily focus on companies having competitive advantages in their respective markets and/or operating in industries with barriers to entry, which may help protect their market position.
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Strong Private Equity Sponsors:
We focus on developing relationships with leading private equity firms in order to partner with these firms and provide them capital to support the acquisition and growth of their portfolio companies.
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Appropriate Risk-Adjusted Returns:
We focus on and price opportunities to generate returns that are attractive on a risk-adjusted basis, taking into consideration factors, in addition to the ones depicted above, including credit structure, leverage levels and the general volatility and potential volatility of cash flows.
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Deal Generation/Origination
: Deal generation and origination is maximized through long-standing and extensive relationships with private equity firms, leveraged loan syndication desks, brokers, commercial and investment bankers, entrepreneurs, service providers such as lawyers and accountants, and current and former portfolio companies and investors.
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Screening
: Once it is determined that a potential investment has met our investment criteria, we will screen the investment by performing preliminary due diligence, which could include discussions with the private equity firm, management team, loan syndication desk, etc. Upon successful screening of the proposed investment, the investment team makes a recommendation to move forward and prepares an initial screening memo for our investment committee. We then issue either a non-binding term sheet (in the case of a directly originated transaction), or submit an order to the loan syndication desk (in the case of a large-market syndicated loan transaction).
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Term Sheet
: In a directly originated transaction, the non-binding term sheet will typically include the key economic terms of our investment proposal, along with exclusivity, confidentiality, and expense reimbursement provisions, among other terms relevant to the particular investment. Upon acceptance of the term sheet, we will begin our formal due diligence process. In a syndicated loan transaction, rather than a formal term sheet, we will submit an order for an allocation to the syndicated loan desk.
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Due Diligence
: Due diligence is performed under the direction of our senior investment professionals, and involves our entire investment team as well as certain external resources, who together perform due diligence to understand the relationships among the prospective portfolio company’s business plan, operations, financial performance, and legal risks. On our directly originated transactions, our due diligence will often include (1) conducting site visits with management and key personnel; (2) performing a detailed review of historical and projected financial statements, often with a third-party accounting firm, to evaluate the target company’s normalized cash flow; (3) creating our own detailed modeling projections, including a downside case which attempts to project how the business would perform in a recession based on past operating history of either the company or the industry (4) interviewing key customers and suppliers; (5) evaluating company management, including a formal background check; (6) reviewing material contracts; (7) conducting an industry, market and strategy analysis; and (8) obtaining a review by legal, environmental or other consultants. In instances where a financial sponsor is investing in the equity in a transaction, we will leverage work done by the financial sponsor for purposes of our due diligence. In syndicated loan transactions, our due diligence may exclude direct customer and supplier interviews, and will consist of a detailed review of reports from the financial sponsor or syndication agent for industry and market analysis, and legal and environmental diligence.
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Document and Close
: Upon completion of a satisfactory due diligence review, our investment team presents its written findings to the investment committee. For transactions that are either over a certain hold size, or outside our general investment policy, the investment team will present the transaction to our Board of Directors for approval. Upon approval for the investment, we re-confirm our regulatory company compliance, process and finalize all required legal documents and fund the investment.
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Post-Investment
: We continuously monitor the status and progress of our portfolio companies, as well as our investment thesis developed at the time of investment. We offer managerial assistance to our portfolio companies and provide them access to our investment experience, direct industry expertise and contacts. The same investment team leader that was involved in the investment process will continue to be involved in the portfolio company post-investment. This approach provides continuity of knowledge and allows the investment team to maintain a strong business relationship with the
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Investment Rating 1 represents the least amount of risk in our portfolio. The investment is performing materially above underwriting expectations and the trends and risk factors are generally favorable.
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Investment Rating 2 indicates the investment is performing as expected at the time of underwriting and the trends and risk factors are generally favorable to neutral.
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Investment Rating 3 involves an investment performing below underwriting expectations and the trends and risk factors are generally neutral to negative. The portfolio company or investment may be out of compliance with financial covenants and interest payments may be impaired, however principal payments are generally not past due.
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Investment Rating 4 indicates that the investment is performing materially below underwriting expectations, the trends and risk factors are generally negative and the risk of the investment has increased substantially. Interest and principal payments on our investment are likely to be impaired.
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the NAV of our common stock disclosed in the most recent periodic report we filed with the SEC;
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our management’s assessment of whether any material change in the NAV has occurred (including through the realization of net gains on the sale of our investments) from the period beginning on the date of the most recently disclosed NAV
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the magnitude of the difference between (i) a value that our Board of Directors or an authorized committee thereof has determined reflects the current (as of a time within 48 hours, excluding Sundays and holidays) NAV of our common stock, which is based upon the NAV disclosed in the most recent periodic report we filed with the SEC, as adjusted to reflect our management’s assessment of any material change in the NAV since the date of the most recently disclosed NAV, and (ii) the offering price of the shares of our common stock in the proposed offering.
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We report our investments at market value or fair value with changes in value reported through our consolidated statements of operations.
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We intend to distribute substantially all of our income to our shareholders. We generally will be required to pay income taxes only on the portion of our taxable income we do not distribute to shareholders (actually or constructively).
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Our ability to use leverage as a means of financing our portfolio of investments is limited.
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We are required to comply with the provisions of the 1940 Act applicable to business development companies.
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Generally, BDCs must offer, and must provide upon request, significant managerial assistance available to certain portfolio companies. In general, as a BDC, a company must, among other things: (1) be a domestic company; (2) have registered a class of its securities pursuant to Section 12 of the Exchange Act; (3) operate for the purpose of investing in the securities of certain types of eligible portfolio companies, including early stage or emerging companies and businesses suffering or just recovering from financial distress (see following paragraph); (4) offer to make available significant managerial assistance to such portfolio companies; and (5) file a proper notice of election with the SEC.
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An eligible portfolio company generally is a domestic company that is not a regulated or private investment company or a financial company (such as brokerage firms, banks, insurance companies and investment banking firms) and that: (1) does not have a class of securities listed on a national securities exchange; (2) has a class of securities listed on a national securities exchange with an equity market capitalization of less than $250 million; or (3) is controlled by the BDC itself or together with others and, as a result of such control, the BDC has an affiliated person on the board of directors of the company. The 1940 Act presumes that a person has “control” of a portfolio company if that person owns at least 25% of its outstanding voting securities.
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As a BDC, we are required to provide and maintain a bond issued by a reputable fidelity insurance company to protect against larceny and embezzlement. Furthermore, as a BDC, we are prohibited from protecting any director or officer against any liability to us or our shareholders arising from any act or omission constituting willful malfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of that person’s office.
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We are required to adopt and implement written policies and procedures reasonably designed to prevent violation of the federal securities laws, review these policies and procedures annually for their adequacy and the effectiveness of their implementation and designate a chief compliance officer to be responsible for administering these policies and procedures.
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A citizen or individual resident of the United States;
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A corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof of the District of Columbia;
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An estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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A trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.
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Meet the Annual Distribution Requirement;
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Qualify to be treated as a BDC or be registered as a management investment company under the 1940 Act at all times during each taxable year;
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Derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test; and
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Diversify our holdings so that at the end of each quarter of the taxable year:
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◦
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at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”); and
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◦
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no more than 25% of the value of our assets is invested in the securities, other than U.S. Government securities or securities of other RICs, (1) of one issuer (2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships,” or the Diversification Tests.
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Pursuant to Rule 13a-14 of the Exchange Act, our Chief Executive Officer and Chief Financial Officer are required to certify the accuracy of the financial statements contained in our periodic reports;
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Pursuant to Item 307 of Regulation S-K, our periodic reports are required to disclose our conclusions about the effectiveness of our disclosure controls and procedures;
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Pursuant to Rule 13a-15 of the Exchange Act, our management is required to prepare a report on its assessment of our internal control over financial reporting, and we engage an independent registered public accounting firm to separately audit our internal control over financial reporting; and
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Pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, our periodic reports must disclose whether there were significant changes in our internal control over financial reporting or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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(10.0)%
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(5.0)%
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0.0%
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5.0%
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10.0%
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Corresponding net return to common shareholder
(2)
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(20.75)%
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(12.28)%
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(3.82)%
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4.65%
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13.11%
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(1)
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Assumes
$551.8 million
in total assets,
$218.1 million
in debt principal outstanding,
$326.0 million
in net assets and a weighted-average interest rate of
5.41%
on our senior securities based on our financial data available on
March 31, 2019
. Actual interest payments may be different.
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(2)
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In order for us to cover our annual interest payments on indebtedness, we must achieve annual returns on our
March 31, 2019
total assets of at least 2.25%.
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The annual distribution requirement for a RIC will be satisfied if we distribute to our shareholders on an annual basis at least 90% of our net ordinary income and realized short-term capital gains in excess of realized net long-term capital losses. Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current year distributions into the next year and pay a 4% excise tax on such income. Any such carryover taxable income must be distributed through a dividend declared prior to filing the final tax return related to the year that generated such taxable income.
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The source of income requirement will be satisfied if we obtain at least 90% of our gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or other securities or foreign currencies or other income derived with respect to our business of investing in such stock, securities or currencies and net income derived from an interest in a “qualified publicly traded partnership” (as defined in the Code), or the 90% Income Test.
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The asset diversification requirement will be satisfied if we meet certain asset diversification requirements at the end of each quarter of our taxable year. To satisfy this requirement, at least 50% of the value of our assets must consist of cash, cash equivalents, U.S Government securities, securities of other RICs, and other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer (which for these purposes includes the equity securities of a “qualified publicly traded partnership”). In addition, no more than 25% of the value of our assets can be invested in the securities, other than U.S Government securities or securities of other RICs, (1) of one issuer (2) of two or more issuers that are controlled, as determined under applicable tax rules, by us and that are engaged in the same or similar or related trades or businesses or (3) of one or more “qualified publicly traded partnerships,” or the Diversification Tests.
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Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% immediately after each issuance of senior securities. In accordance with the 1940 Act, on April 25, 2018, our Board of Directors, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of our Board of Directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the minimum asset coverage ratio applicable to the Company was decreased from 200% to 150%, effective April 25, 2019. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we will be prohibited from issuing debt securities and/or borrowing money from banks or other financial institutions and may not be permitted to declare a dividend or make any distribution to shareholders or repurchase shares until such time as we satisfy this test. The Board also approved a resolution which limits the Company’s issuance of senior securities such that the asset coverage ratio, taking into account such issuance, would not be less than 166%, at any time after the effective date.
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Any amounts that we use to service our debt will not be available for dividends to our common shareholders.
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It is likely that any senior securities or other indebtedness we issue will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, some of these securities or other indebtedness may be rated by rating agencies, and in obtaining a rating for such securities and other indebtedness, we may be required to abide by operating and investment guidelines that further restrict operating and financial flexibility.
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We and, indirectly, our shareholders will bear the cost of issuing and servicing such securities and other indebtedness.
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Any unsecured debt issued by us would rank (1) pari passu with our future unsecured indebtedness and effectively subordinated to all of our existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and (2) structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries
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Upon a liquidation of our company, holders of our debt securities and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Future offerings of additional debt securities, which would be senior to our common stock upon liquidation, or equity securities, which could dilute our existing shareholders, may harm the value of our common stock.
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Prior to Sale Below NAV
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Following Sale Below NAV
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Percentage Change
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|||||
Reduction to NAV
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|||||
Total Shares Outstanding
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1,000,000
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1,100,000
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10.00
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%
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NAV per share
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$
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10.00
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$
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9.91
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(0.91
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)%
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Dilution to Existing Shareholder
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|||||
Shares held by Shareholder A
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10,000
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10,000
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1
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—
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%
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Percentage Held by Shareholder A
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1.00
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%
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0.91
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%
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(9.09
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)%
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Total Interest of Shareholder A in NAV
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$
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100,000
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$
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99,091
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(0.91
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)%
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(1)
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Assumes that Shareholder A does not purchase additional shares in the sale of shares below NAV.
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•
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Sudden electrical or telecommunications outages;
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•
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Natural disasters such as earthquakes, tornadoes and hurricanes;
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•
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Events arising from local or larger scale political or social matters, including terrorist acts; and
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•
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Cyber-attacks.
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•
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Portfolio companies are more likely to depend on the management talents and efforts of a small group of key employees. Therefore, the death, disability, resignation, termination, or significant under-performance of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us.
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Portfolio companies may have unpredictable operating results, could become parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.
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Most of our portfolio companies are private companies. Private companies may not have readily publicly available information about their businesses, operations and financial condition. Consequently, we rely on the ability of our management team and investment professionals to obtain adequate information to evaluate the potential returns from making investments in these portfolio companies. If we are unable to uncover all material information about the target portfolio company, we may not make a fully informed investment decision and may lose all or part of our investment.
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Portfolio companies may have shorter operating histories, narrower product lines, smaller market shares and/or more significant customer concentration than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns.
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Portfolio companies may have limited financial resources and may be unable to meet their obligations under their debt instruments that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees from subsidiaries or affiliates of our portfolio companies that we may have obtained in connection with our investment, as well as a corresponding decrease in the value of the equity components of our investments.
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significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;
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exclusion of our common stock from certain market indices, such as the Russell 2000 Financial Services Index, which could reduce the ability of certain investment funds to own our common stock and put short-term selling pressure on our common stock;
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changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;
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loss of RIC tax treatment;
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our origination activity, including the pace of, and competition for, new investment opportunities;
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changes or perceived changes in earnings or variations of operating results;
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•
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changes or perceived changes in the value of our portfolio of investments;
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•
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any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
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•
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potential future sales of common stock or debt securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;
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•
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departure of our key personnel;
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•
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operating performance of companies comparable to us;
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•
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general economic trends and other external factors; and
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•
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loss of a major funding source.
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•
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Creditworthiness;
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•
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Terms, including, but not limited to, maturity, principal amount, redemption, and repayment of convertible features;
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•
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Market and economic conditions; and
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•
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Demand for our debt securities.
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Payment Date
|
Cash Dividend
|
||
Fiscal Year 2019
|
|
||
July 2, 2018
1
|
$
|
0.89
|
|
September 28, 2018
2
|
0.44
|
|
|
December 31, 2018
2
|
0.46
|
|
|
March 29, 2019
2
|
0.48
|
|
|
|
$
|
2.27
|
|
|
|
||
Fiscal Year 2018
|
|
||
July 3, 2017
|
$
|
0.21
|
|
October 2, 2017
|
0.24
|
|
|
January 2, 2018
|
0.26
|
|
|
April 2, 2018
|
0.28
|
|
|
|
$
|
0.99
|
|
1
|
On July 2, 2018, CSWC paid a regular dividend of $0.29 per share and a supplemental dividend of $0.60 per share.
|
2
|
On each of these dates, the cash dividend paid includes a supplemental dividend of $0.10 per share.
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Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2)
|
||||||
April 1 through April 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
May 1 through May 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
June 1 through June 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
July 1 through July 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
August 1 through August 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
September 1 through September 30, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
October 1 through October 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
November 1 through November 30, 2018 (1)
|
|
9,695
|
|
|
19.17
|
|
|
—
|
|
|
—
|
|
||
December 1 through December 31, 2018
|
|
10,452
|
|
|
17.72
|
|
|
10,452
|
|
|
9,227,011
|
|
||
January 1 through January 31, 2019 (1)
|
|
37
|
|
|
21.60
|
|
|
—
|
|
|
—
|
|
||
February 1 through February 28, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
March 1 through March 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
20,184
|
|
|
$
|
18.42
|
|
|
10,452
|
|
|
$
|
9,227,011
|
|
(1)
|
Represents shares of common stock withheld upon vesting of restricted stock to cover withholding tax obligations.
|
(2)
|
On January 25, 2016, we announced that our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $10 million. The repurchase program will be in effect until the approved dollar amount has been used to repurchase shares or the Board amends or discontinues the plan at any time.
|
|
Year ended March 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Income statement data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and dividends
|
$
|
50,192
|
|
|
$
|
34,233
|
|
|
$
|
22,324
|
|
|
$
|
8,033
|
|
|
$
|
9,231
|
|
Interest income from cash and cash equivalents
|
36
|
|
|
21
|
|
|
166
|
|
|
386
|
|
|
122
|
|
|||||
Fees and other income
|
1,653
|
|
|
872
|
|
|
984
|
|
|
741
|
|
|
595
|
|
|||||
Total investment income
|
51,881
|
|
|
35,126
|
|
|
23,474
|
|
|
9,160
|
|
|
9,948
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation-related expenses
|
9,986
|
|
|
9,238
|
|
|
8,217
|
|
|
9,515
|
|
|
6,440
|
|
|||||
Interest expense
|
12,178
|
|
|
4,875
|
|
|
989
|
|
|
—
|
|
|
—
|
|
|||||
General, administrative and other
|
4,959
|
|
|
4,585
|
|
|
4,601
|
|
|
11,610
|
|
|
5,683
|
|
|||||
Total operating expenses
|
27,123
|
|
|
18,698
|
|
|
13,807
|
|
|
21,125
|
|
|
12,123
|
|
|||||
Income (loss) before income taxes
|
24,758
|
|
|
16,428
|
|
|
9,667
|
|
|
(11,965
|
)
|
|
(2,175
|
)
|
|||||
Income tax expense (benefit)
|
1,048
|
|
|
195
|
|
|
1,779
|
|
|
(1,278
|
)
|
|
270
|
|
|||||
Net investment income (loss)
|
23,710
|
|
|
16,233
|
|
|
7,888
|
|
|
(10,687
|
)
|
|
(2,445
|
)
|
|||||
Net realized gains (losses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-control/Non-affiliate investments
|
2,124
|
|
|
1,492
|
|
|
3,992
|
|
|
(9,575
|
)
|
|
8,226
|
|
|||||
Affiliate investments
|
77
|
|
|
90
|
|
|
3,876
|
|
|
(1,458
|
)
|
|
157,213
|
|
|||||
Control investments
|
18,653
|
|
|
—
|
|
|
28
|
|
|
231
|
|
|
(1,175
|
)
|
|||||
Net realized gains (losses) on investments
|
20,854
|
|
|
1,582
|
|
|
7,896
|
|
|
(10,802
|
)
|
|
164,264
|
|
|||||
Net unrealized appreciation (depreciation) on investments
|
(11,506
|
)
|
|
21,492
|
|
|
7,690
|
|
|
16,089
|
|
|
(108,377
|
)
|
|||||
Net realized and unrealized gains on investments
|
9,348
|
|
|
23,074
|
|
|
15,586
|
|
|
5,287
|
|
|
55,887
|
|
|||||
Net increase (decrease) in net assets resulting from operations
|
$
|
33,058
|
|
|
$
|
39,307
|
|
|
$
|
23,474
|
|
|
$
|
(5,400
|
)
|
|
$
|
53,442
|
|
Net investment income (loss) per share - basic and diluted
|
$
|
1.42
|
|
|
$
|
1.01
|
|
|
$
|
0.50
|
|
|
$
|
(0.68
|
)
|
|
$
|
(0.16
|
)
|
Net realized earnings per share - basic and diluted
1
|
$
|
2.66
|
|
|
$
|
1.11
|
|
|
$
|
1.00
|
|
|
$
|
(1.37
|
)
|
|
$
|
10.45
|
|
Net increase (decrease) in net assets from operations - basic and diluted
|
$
|
1.98
|
|
|
$
|
2.45
|
|
|
$
|
1.48
|
|
|
$
|
(0.35
|
)
|
|
$
|
3.44
|
|
Net asset value per common share
|
$
|
18.62
|
|
|
$
|
19.08
|
|
|
$
|
17.80
|
|
|
$
|
17.34
|
|
|
$
|
49.30
|
|
Total dividends/distributions declared per common share
|
$
|
2.27
|
|
|
$
|
0.99
|
|
|
$
|
0.79
|
|
|
$
|
0.14
|
|
|
$
|
0.20
|
|
Weighted average number of shares outstanding – basic
|
16,727
|
|
|
16,074
|
|
|
15,825
|
|
|
15,636
|
|
|
15,492
|
|
|||||
Weighted average number of shares outstanding – diluted
|
16,734
|
|
|
16,139
|
|
|
15,877
|
|
|
15,724
|
|
|
15,531
|
|
1
|
“Net realized earnings per share – basic and diluted” is calculated as the sum of “Net investment income (loss)” and “Net realized gain (loss) on investments” divided by weighted average shares outstanding – basic and diluted.
|
|
Year ended March 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments at fair value
|
$
|
524,071
|
|
|
$
|
393,095
|
|
|
$
|
286,880
|
|
|
$
|
178,436
|
|
|
$
|
535,536
|
|
Cash and cash equivalents
|
9,924
|
|
|
7,907
|
|
|
22,386
|
|
|
95,969
|
|
|
225,797
|
|
|||||
Interest, escrow and other receivables
|
11,049
|
|
|
5,894
|
|
|
4,308
|
|
|
6,405
|
|
|
4,418
|
|
|||||
Net pension assets
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
10,294
|
|
||||||
Deferred tax asset
|
1,807
|
|
|
2,050
|
|
|
2,017
|
|
|
2,342
|
|
|
—
|
|
|||||
Other assets
|
4,992
|
|
|
8,544
|
|
|
10,161
|
|
|
1,341
|
|
|
827
|
|
|||||
Total assets
|
$
|
551,843
|
|
|
$
|
417,490
|
|
|
$
|
325,752
|
|
|
$
|
284,493
|
|
|
$
|
776,872
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes
|
$
|
75,099
|
|
|
$
|
55,305
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Credit facility
|
141,000
|
|
|
40,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|||||
Other liabilities
|
6,708
|
|
|
6,245
|
|
|
5,996
|
|
|
9,028
|
|
|
4,923
|
|
|||||
Dividends payable
|
—
|
|
|
4,525
|
|
|
7,191
|
|
|
625
|
|
|
—
|
|
|||||
Accrued restoration plan liability
|
3,073
|
|
|
2,937
|
|
|
2,170
|
|
|
2,205
|
|
|
3,119
|
|
|||||
Deferred income taxes
|
—
|
|
|
190
|
|
|
323
|
|
|
—
|
|
|
1,412
|
|
|||||
Total liabilities
|
225,880
|
|
|
109,202
|
|
|
40,680
|
|
|
11,858
|
|
|
9,454
|
|
|||||
Net assets
|
325,963
|
|
|
308,288
|
|
|
285,072
|
|
|
272,635
|
|
|
767,418
|
|
|||||
Total liabilities and net assets
|
$
|
551,843
|
|
|
$
|
417,490
|
|
|
$
|
325,752
|
|
|
$
|
284,493
|
|
|
$
|
776,872
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of portfolio companies
|
37
|
|
|
30
|
|
|
28
|
|
|
23
|
|
|
22
|
|
|||||
Weighted average yield on debt investments at end of period
|
11.58
|
%
|
|
11.46
|
%
|
|
10.28
|
%
|
|
10.67
|
%
|
|
3.14
|
%
|
|||||
Weighted average yield on total investments at end of period
|
10.96
|
%
|
|
10.48
|
%
|
|
10.49
|
%
|
|
9.46
|
%
|
|
0.46
|
%
|
|||||
Expense ratios (as percentage of average net assets):
|
|
|
|
|
|
|
|
|
|
||||||||||
Total expenses, excluding interest expense
|
4.75
|
%
|
|
4.70
|
%
|
|
4.59
|
%
|
|
4.48
|
%
|
|
1.59
|
%
|
|
As of March 31, 2019
|
||||||
|
LMM (a)
|
|
UMM
|
||||
|
(dollars in thousands)
|
||||||
Number of portfolio companies
|
26
|
|
|
10
|
|
||
Fair value
|
$
|
377,792
|
|
|
$
|
80,536
|
|
Cost
|
$
|
325,343
|
|
|
$
|
84,712
|
|
% of portfolio at cost - debt
|
87.5
|
%
|
|
100.0
|
%
|
||
% of portfolio at cost - equity
|
12.5
|
%
|
|
—
|
|
||
% of debt investments at cost secured by first lien
|
76.6
|
%
|
|
82.6
|
%
|
||
Weighted average annual effective yield (b)(c)
|
12.2
|
%
|
|
9.7
|
%
|
||
Weighted average EBITDA (c)
|
$
|
9,200
|
|
|
$
|
66,531
|
|
Weighted average leverage through CSWC security (c)(d)
|
3.3x
|
|
|
4.8x
|
|
(a)
|
At
March 31, 2019
, we had equity ownership in approximately
73.1%
of our LMM investments.
|
(b)
|
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of
March 31, 2019
, including accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. As of
March 31, 2019
, there was one investment on non-accrual status. Weighted-average annual effective yield is higher than what an investor in shares in our common stock will realize on its investment because it does not reflect our expenses or any sales load paid by an investor.
|
(c)
|
Weighted average metrics are calculated using investment cost basis weighting.
|
(d)
|
Includes CSWC debt investments only. Calculated as the amount of each portfolio company’s debt (including CSWC’s position and debt senior or pari passu to CSWC’s position, but excluding debt subordinated to CSWC’s position) in the capital structure divided by each portfolio company’s adjusted EBITDA. Management uses this metric as a guide to evaluate the relative risk of its position in each portfolio debt investment.
|
(a)
|
At
March 31, 2018
, we had equity ownership in approximately 73.7% of our LMM investments.
|
(b)
|
The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of
March 31, 2018
, including accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. As of
March 31, 2018
, there were no investments on non-accrual status. Weighted-average annual effective yield is higher than what an investor in shares in our common stock will realize on its investment because it does not reflect our expenses or any sales load paid by an investor.
|
(c)
|
Weighted average metrics are calculated using investment cost basis weighting.
|
(d)
|
Includes CSWC debt investments only. Calculated as the amount of each portfolio company’s debt (including CSWC’s position and debt senior or pari passu to CSWC’s position, but excluding debt subordinated to CSWC’s position) in the capital structure divided by each portfolio company’s adjusted EBITDA. Management uses this metric as a guide to evaluate the relative risk of its position in each portfolio debt investment.
|
|
|
|
Percentage of
|
|
|
|
Percentage of
|
||||||
|
|
|
Total Portfolio
|
|
|
|
Total Portfolio
|
||||||
|
Fair Value
|
|
at Fair Value
|
|
Cost
|
|
at Cost
|
||||||
|
(dollars in thousands)
|
||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
||||||
First lien loans
1
|
$
|
317,544
|
|
|
60.6
|
%
|
|
$
|
319,278
|
|
|
66.8
|
%
|
Second lien loans
2
|
35,896
|
|
|
6.8
|
|
|
36,057
|
|
|
7.5
|
|
||
Subordinated debt
|
14,287
|
|
|
2.7
|
|
|
14,458
|
|
|
3.0
|
|
||
Preferred equity
|
17,936
|
|
|
3.4
|
|
|
7,894
|
|
|
1.7
|
|
||
Common equity & warrants
|
72,665
|
|
|
14.0
|
|
|
32,368
|
|
|
6.8
|
|
||
I-45 SLF LLC
3
|
65,743
|
|
|
12.5
|
|
|
68,000
|
|
|
14.2
|
|
||
|
$
|
524,071
|
|
|
100.0
|
%
|
|
$
|
478,055
|
|
|
100.0
|
%
|
March 31, 2018:
|
|
|
|
|
|
|
|
||||||
First lien loans
1
|
$
|
197,110
|
|
|
50.1
|
%
|
|
$
|
194,820
|
|
|
58.1
|
%
|
Second lien loans
2
|
23,229
|
|
|
5.9
|
|
|
23,092
|
|
|
6.9
|
|
||
Subordinated debt
|
18,783
|
|
|
4.8
|
|
|
18,885
|
|
|
5.6
|
|
||
Preferred equity
|
36,545
|
|
|
9.3
|
|
|
16,666
|
|
|
5.0
|
|
||
Common equity & warrants
|
50,315
|
|
|
12.8
|
|
|
17,134
|
|
|
5.1
|
|
||
I-45 SLF LLC
3
|
67,113
|
|
|
17.1
|
|
|
64,800
|
|
|
19.3
|
|
||
|
$
|
393,095
|
|
|
100.0
|
%
|
|
$
|
335,397
|
|
|
100.0
|
%
|
1
|
Included in first lien loans are loans structured as first lien last out loans. These loans may in certain cases be subordinated in payment priority to other senior secured lenders. As of
March 31, 2019
and
2018
, the fair value of the first lien last out loans are
$38.6 million
and $26.9 million, respectively.
|
2
|
Included in second lien loans are loans structured as split lien term loans. These loans provide the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor. As of
March 31, 2019
, the fair value of the split lien term loans are
$18.3 million
. As of March 31, 2018, there were no investments in split lien term loans.
|
3
|
I-45 SLF LLC is a joint venture between CSWC and Main Street Capital. This entity primarily invests in syndicated senior secured loans in the UMM. The portfolio companies held by I-45 SLF LLC represent a diverse set of industry classifications, which are similar to those in which CSWC invests directly. We own 80.0% of I-45 SLF LLC and have a profits interest of 75.6%, while Main Street Capital owns 20.0% and has a profits interest of 24.4%. I-45 SLF LLC’s Board of Managers makes all investment and operational decisions for the fund, and consists of equal representation from our Company and Main Street Capital. The Company does not guarantee or otherwise obligate itself to make payments on debts owed by I-45 SLF LLC.
|
•
|
Investment Rating 1 represents the least amount of risk in our portfolio. The investment is performing materially above underwriting expectations and the trends and risk factors are generally favorable.
|
•
|
Investment Rating 2 indicates the investment is performing as expected at the time of underwriting and the trends and risk factors are generally favorable to neutral.
|
•
|
Investment Rating 3 involves an investment performing below underwriting expectations and the trends and risk factors are generally neutral to negative. The portfolio company or investment may be out of compliance with financial covenants and interest payments may be impaired, however principal payments are generally not past due.
|
•
|
Investment Rating 4 indicates that the investment is performing materially below underwriting expectations, the trends and risk factors are generally negative and the risk of the investment has increased substantially. Interest and principal payments on our investment are likely to be impaired.
|
|
As of March 31, 2019
|
|||||
|
Debt
|
|
|
|||
|
Investments at
|
|
Percentage of
|
|||
Investment Rating
|
Fair Value
|
|
Debt Portfolio
|
|||
|
(dollars in thousands)
|
|||||
1
|
$
|
61,897
|
|
|
16.8
|
%
|
2
|
284,041
|
|
|
77.3
|
|
|
3
|
21,789
|
|
|
5.9
|
|
|
4
|
—
|
|
|
—
|
|
|
Total
|
$
|
367,727
|
|
|
100.0
|
%
|
|
|
|
|
|||
|
As of March 31, 2018
|
|||||
|
Debt
|
|
|
|||
|
Investments at
|
|
Percentage of
|
|||
Investment Rating
|
Fair Value
|
|
Debt Portfolio
|
|||
|
(dollars in thousands)
|
|||||
1
|
$
|
8,194
|
|
|
3.4
|
%
|
2
|
217,989
|
|
|
91.2
|
|
|
3
|
12,939
|
|
|
5.4
|
|
|
4
|
—
|
|
|
—
|
|
|
Total
|
$
|
239,122
|
|
|
100.0
|
%
|
Year ended March 31, 2019
|
First Lien Loans
|
|
Second Lien Loans
|
|
Subordinated Debt
|
|
Preferred & Common Equity & Warrants
|
|
I-45 SLF LLC
|
|
Total
|
||||||||||||
Fair value, beginning of period
|
$
|
197,110
|
|
|
$
|
23,229
|
|
|
$
|
18,783
|
|
|
$
|
86,860
|
|
|
$
|
67,113
|
|
|
$
|
393,095
|
|
New investments
|
185,386
|
|
|
21,159
|
|
|
—
|
|
|
19,853
|
|
|
3,200
|
|
|
229,598
|
|
||||||
Proceeds from sales of investments
|
(28,805
|
)
|
|
—
|
|
|
—
|
|
|
(34,490
|
)
|
|
—
|
|
|
(63,295
|
)
|
||||||
Principal repayments received
|
(33,226
|
)
|
|
(8,562
|
)
|
|
(4,600
|
)
|
|
—
|
|
|
—
|
|
|
(46,388
|
)
|
||||||
Conversion of security from debt to equity
|
(539
|
)
|
|
—
|
|
|
—
|
|
|
539
|
|
|
—
|
|
|
—
|
|
||||||
PIK interest capitalized
|
43
|
|
|
181
|
|
|
46
|
|
|
231
|
|
|
—
|
|
|
501
|
|
||||||
Accretion of loan discounts
|
1,215
|
|
|
115
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
1,390
|
|
||||||
Realized gain
|
382
|
|
|
73
|
|
|
68
|
|
|
20,331
|
|
|
—
|
|
|
20,854
|
|
||||||
Unrealized gain (loss)
|
(4,022
|
)
|
|
(299
|
)
|
|
(70
|
)
|
|
(2,723
|
)
|
|
(4,570
|
)
|
|
(11,684
|
)
|
||||||
Fair value, end of period
|
$
|
317,544
|
|
|
$
|
35,896
|
|
|
$
|
14,287
|
|
|
$
|
90,601
|
|
|
$
|
65,743
|
|
|
$
|
524,071
|
|
Weighted average yield on debt investments at end of period
|
|
|
|
|
|
|
|
|
|
|
11.58
|
%
|
|||||||||||
Weighted average yield on total investments at end of period
|
|
|
|
|
|
|
|
|
|
|
10.96
|
%
|
Year ended March 31, 2018
|
First Lien Loans
|
|
Second Lien Loans
|
|
Subordinated Debt
|
|
Preferred & Common Equity & Warrants
|
|
I-45 SLF LLC
|
|
Total
|
||||||||||||
Fair value, beginning of period
|
$
|
107,817
|
|
|
$
|
47,176
|
|
|
$
|
12,453
|
|
|
$
|
56,039
|
|
|
$
|
63,395
|
|
|
$
|
286,880
|
|
New investments
|
128,189
|
|
|
9,765
|
|
|
14,406
|
|
|
9,821
|
|
|
4,000
|
|
|
166,181
|
|
||||||
Proceeds from sales of investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
—
|
|
|
(104
|
)
|
||||||
Principal repayments received
|
(41,687
|
)
|
|
(34,179
|
)
|
|
(8,100
|
)
|
|
—
|
|
|
—
|
|
|
(83,966
|
)
|
||||||
PIK interest capitalized
|
—
|
|
|
—
|
|
|
11
|
|
|
295
|
|
|
—
|
|
|
306
|
|
||||||
Accretion of loan discounts
|
705
|
|
|
100
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
857
|
|
||||||
Realized gain
|
814
|
|
|
550
|
|
|
114
|
|
|
104
|
|
|
—
|
|
|
1,582
|
|
||||||
Unrealized gain (loss)
|
1,272
|
|
|
(183
|
)
|
|
(153
|
)
|
|
20,705
|
|
|
(282
|
)
|
|
21,359
|
|
||||||
Fair value, end of period
|
$
|
197,110
|
|
|
$
|
23,229
|
|
|
$
|
18,783
|
|
|
$
|
86,860
|
|
|
$
|
67,113
|
|
|
$
|
393,095
|
|
Weighted average yield on debt investments at end of period
|
|
|
|
|
|
|
|
|
|
|
11.46
|
%
|
|||||||||||
Weighted average yield on total investments at end of period
|
|
|
|
|
|
|
|
|
|
|
10.48
|
%
|
|
Year ended March 31,
|
|
Net Change
|
|||||||||||
|
2019
|
|
2018
|
|
Amount
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Total investment income
|
$
|
51,881
|
|
|
$
|
35,126
|
|
|
$
|
16,755
|
|
|
47.7
|
%
|
Interest expense
|
(12,178
|
)
|
|
(4,875
|
)
|
|
(7,303
|
)
|
|
149.8
|
%
|
|||
Other operating expenses
|
(14,945
|
)
|
|
(13,823
|
)
|
|
(1,122
|
)
|
|
8.1
|
%
|
|||
Income before taxes
|
24,758
|
|
|
16,428
|
|
|
8,330
|
|
|
50.7
|
%
|
|||
Income tax expense
|
1,048
|
|
|
195
|
|
|
853
|
|
|
437.4
|
%
|
|||
Net investment income
|
23,710
|
|
|
16,233
|
|
|
7,477
|
|
|
46.1
|
%
|
|||
Net realized gain on investments before income tax
|
20,854
|
|
|
1,582
|
|
|
19,272
|
|
|
1,218.2
|
%
|
|||
Net unrealized (depreciation) appreciation on investments, net of tax
|
(11,506
|
)
|
|
21,492
|
|
|
(32,998
|
)
|
|
(153.5
|
)%
|
|||
Net increase in net assets from operations
|
$
|
33,058
|
|
|
$
|
39,307
|
|
|
$
|
(6,249
|
)
|
|
(15.9
|
)%
|
|
Year ended March 31,
|
|
Net Change
|
|||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Total investment income
|
$
|
35,126
|
|
|
$
|
23,474
|
|
|
$
|
11,652
|
|
|
49.6
|
%
|
Interest expense
|
(4,875
|
)
|
|
(989
|
)
|
|
(3,886
|
)
|
|
392.9
|
%
|
|||
Other operating expenses
|
(13,823
|
)
|
|
(12,818
|
)
|
|
(1,005
|
)
|
|
7.8
|
%
|
|||
Income (loss) before taxes
|
16,428
|
|
|
9,667
|
|
|
6,761
|
|
|
69.9
|
%
|
|||
Income tax expense (benefit)
|
195
|
|
|
1,779
|
|
|
(1,584
|
)
|
|
(89.0
|
)%
|
|||
Net investment income (loss)
|
16,233
|
|
|
7,888
|
|
|
8,345
|
|
|
105.8
|
%
|
|||
Net realized gain (loss) on investments before income tax
|
1,582
|
|
|
7,896
|
|
|
(6,314
|
)
|
|
(80.0
|
)%
|
|||
Net unrealized appreciation on investments, net of tax
|
21,492
|
|
|
7,690
|
|
|
13,802
|
|
|
179.5
|
%
|
|||
Net increase (decrease) in net assets from operations
|
$
|
39,307
|
|
|
$
|
23,474
|
|
|
$
|
15,833
|
|
|
67.4
|
%
|
|
Payments Due By Period
|
||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||
|
|
|
Less than
|
|
|
|
|
|
More Than
|
||||||||||
Contractual Obligations
|
Total
|
|
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
5 Years
|
||||||||||
Operating lease obligations
|
$
|
772
|
|
|
$
|
257
|
|
|
$
|
515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Credit Facility (1)
|
177,540
|
|
|
7,753
|
|
|
15,463
|
|
|
154,324
|
|
|
—
|
|
|||||
December 2022 Notes (2)
|
94,411
|
|
|
4,666
|
|
|
9,307
|
|
|
80,438
|
|
|
—
|
|
|||||
Total
|
$
|
272,723
|
|
|
$
|
12,676
|
|
|
$
|
25,285
|
|
|
$
|
234,762
|
|
|
$
|
—
|
|
(1)
|
Amounts include interest payments calculated at an average rate of
5.41%
of outstanding Credit Facility borrowings, which were
$141.0 million
as of March 31,
2019
.
|
(2)
|
Includes interest payments.
|
|
Page
|
|
March 31,
|
|
March 31,
|
||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
|
||
Investments at fair value:
|
|
|
|
|
|
||
Non-control/Non-affiliate investments (Cost: $305,596 and $200,981, respectively)
|
$
|
304,663
|
|
|
$
|
199,949
|
|
Affiliate investments (Cost: $79,277 and $51,648, respectively)
|
80,905
|
|
|
53,198
|
|
||
Control investments (Cost: $93,182 and $82,768, respectively)
|
138,503
|
|
|
139,948
|
|
||
Total investments (Cost: $478,055 and $335,397, respectively)
|
524,071
|
|
|
393,095
|
|
||
Cash and cash equivalents
|
9,924
|
|
|
7,907
|
|
||
Receivables:
|
|
|
|
||||
Dividends and interest
|
9,252
|
|
|
5,219
|
|
||
Escrow
|
370
|
|
|
119
|
|
||
Other
|
1,244
|
|
|
447
|
|
||
Income tax receivable
|
183
|
|
|
109
|
|
||
Deferred tax asset
|
1,807
|
|
|
2,050
|
|
||
Debt issuance costs (net of accumulated amortization of $1,814 and $1,041, respectively)
|
3,364
|
|
|
2,575
|
|
||
Other assets
|
1,628
|
|
|
5,969
|
|
||
Total assets
|
$
|
551,843
|
|
|
$
|
417,490
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Notes (Par value: $77,136 and $ 57,500, respectively), net of unamortized debt issuance costs
|
$
|
75,099
|
|
|
$
|
55,305
|
|
Credit facility
|
141,000
|
|
|
40,000
|
|
||
Other liabilities
|
6,708
|
|
|
6,245
|
|
||
Dividends payable
|
—
|
|
|
4,525
|
|
||
Accrued restoration plan liability
|
3,073
|
|
|
2,937
|
|
||
Deferred income taxes
|
—
|
|
|
190
|
|
||
Total liabilities
|
225,880
|
|
|
109,202
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
||||
|
|
|
|
||||
Net Assets
|
|
|
|
||||
Common stock, $0.25 par value per share: authorized, 25,000,000 shares; issued, 19,842,528 shares at March 31, 2019 and 18,501,298 shares at March 31, 2018
|
4,961
|
|
|
4,625
|
|
||
Additional paid-in capital
|
281,205
|
|
|
260,713
|
|
||
Total distributable earnings
|
63,734
|
|
|
66,887
|
|
||
Treasury stock - at cost, 2,339,512 shares
|
(23,937
|
)
|
|
(23,937
|
)
|
||
Total net assets
|
325,963
|
|
|
308,288
|
|
||
Total liabilities and net assets
|
$
|
551,843
|
|
|
$
|
417,490
|
|
Net asset value per share (17,503,016 shares outstanding at March 31, 2019 and 16,161,786 shares outstanding at March 31, 2018)
|
$
|
18.62
|
|
|
$
|
19.08
|
|
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Investment income:
|
|
|
|
|
|
|
|
|
|||
Interest income:
|
|
|
|
|
|
|
|
|
|||
Non-control/Non-affiliate investments
|
$
|
28,716
|
|
|
$
|
18,257
|
|
|
$
|
11,739
|
|
Affiliate investments
|
7,143
|
|
|
3,513
|
|
|
560
|
|
|||
Control investments
|
1,406
|
|
|
82
|
|
|
116
|
|
|||
Dividend income:
|
|
|
|
|
|
||||||
Non-control/Non-affiliate investments
|
197
|
|
|
—
|
|
|
20
|
|
|||
Affiliate investments
|
82
|
|
|
127
|
|
|
163
|
|
|||
Control investments
|
12,648
|
|
|
12,254
|
|
|
9,726
|
|
|||
Interest income from cash and cash equivalents
|
36
|
|
|
21
|
|
|
166
|
|
|||
Fees and other income
|
1,653
|
|
|
872
|
|
|
984
|
|
|||
Total investment income
|
51,881
|
|
|
35,126
|
|
|
23,474
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Compensation
|
7,715
|
|
|
7,013
|
|
|
6,330
|
|
|||
Spin-off compensation plan
|
—
|
|
|
517
|
|
|
690
|
|
|||
Share-based compensation
|
2,271
|
|
|
1,708
|
|
|
1,197
|
|
|||
Interest
|
12,178
|
|
|
4,875
|
|
|
989
|
|
|||
Professional fees
|
1,737
|
|
|
1,580
|
|
|
1,774
|
|
|||
Net pension expense
|
159
|
|
|
164
|
|
|
166
|
|
|||
General and administrative
|
3,063
|
|
|
2,841
|
|
|
2,661
|
|
|||
Total operating expenses
|
27,123
|
|
|
18,698
|
|
|
13,807
|
|
|||
Income before taxes
|
24,758
|
|
|
16,428
|
|
|
9,667
|
|
|||
Income tax expense
|
1,048
|
|
|
195
|
|
|
1,779
|
|
|||
Net investment income
|
$
|
23,710
|
|
|
$
|
16,233
|
|
|
$
|
7,888
|
|
|
|
|
|
|
|
||||||
Net realized gain
|
|
|
|
|
|
||||||
Non-control/Non-affiliate investments
|
2,124
|
|
|
1,492
|
|
|
3,992
|
|
|||
Affiliate investments
|
77
|
|
|
90
|
|
|
3,876
|
|
|||
Control investments
|
18,653
|
|
|
—
|
|
|
28
|
|
|||
Total net realized gain on investments before income tax
|
20,854
|
|
|
1,582
|
|
|
7,896
|
|
|||
|
|
|
|
|
|
||||||
Net unrealized (depreciation) appreciation on investments
|
|
|
|
|
|
||||||
Non-control/Non-affiliate investments
|
(934
|
)
|
|
(4,325
|
)
|
|
(884
|
)
|
|||
Affiliate investments
|
1,109
|
|
|
337
|
|
|
184
|
|
|||
Control investments
|
(11,859
|
)
|
|
25,347
|
|
|
8,713
|
|
|||
Income tax provision
|
178
|
|
|
133
|
|
|
(323
|
)
|
|||
Total net unrealized (depreciation) appreciation on investments, net of tax
|
(11,506
|
)
|
|
21,492
|
|
|
7,690
|
|
|||
|
|
|
|
|
|
||||||
Net realized and unrealized gains on investments
|
$
|
9,348
|
|
|
$
|
23,074
|
|
|
$
|
15,586
|
|
|
|
|
|
|
|
||||||
Net increase in net assets from operations
|
$
|
33,058
|
|
|
$
|
39,307
|
|
|
$
|
23,474
|
|
|
|
|
|
|
|
||||||
Pre-tax net investment income per share - basic and diluted
|
$
|
1.48
|
|
|
$
|
1.02
|
|
|
$
|
0.61
|
|
Net investment income per share - basic and diluted
|
$
|
1.42
|
|
|
$
|
1.01
|
|
|
$
|
0.50
|
|
Net increase in net assets from operations - basic and diluted
|
$
|
1.98
|
|
|
$
|
2.45
|
|
|
$
|
1.48
|
|
Weighted average shares outstanding – basic
|
16,727,254
|
|
|
16,073,642
|
|
|
15,824,879
|
|
|||
Weighted average shares outstanding – diluted
|
16,734,369
|
|
|
16,138,541
|
|
|
15,877,331
|
|
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operations:
|
|
|
|
|
|
||||||
Net investment income
|
$
|
23,710
|
|
|
$
|
16,233
|
|
|
$
|
7,888
|
|
Net realized gain on investments
|
20,854
|
|
|
1,582
|
|
|
7,896
|
|
|||
Net unrealized (depreciation) appreciation on investments, net of tax
|
(11,506
|
)
|
|
21,492
|
|
|
7,690
|
|
|||
Net increase in net assets from operations
|
33,058
|
|
|
39,307
|
|
|
23,474
|
|
|||
Dividends to shareholders
|
(38,010
|
)
|
|
(15,920
|
)
|
|
(12,560
|
)
|
|||
Spin-Off Compensation Plan distribution, net of tax of $ - , $ - and $692 for the years ended March 31, 2019, 2018 and 2017, respectively
|
—
|
|
|
(517
|
)
|
|
(1,175
|
)
|
|||
Capital share transactions:
|
|
|
|
|
|
||||||
Change in restoration plan liability
|
(185
|
)
|
|
(813
|
)
|
|
(6
|
)
|
|||
Issuance of common stock
|
18,744
|
|
|
—
|
|
|
—
|
|
|||
Exercise of employee stock options
|
2,169
|
|
|
125
|
|
|
1,507
|
|
|||
Share-based compensation expense
|
2,271
|
|
|
1,708
|
|
|
1,197
|
|
|||
Common stock withheld for payroll taxes upon vesting of restricted stock
|
(187
|
)
|
|
(86
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
(185
|
)
|
|
(588
|
)
|
|
—
|
|
|||
Increase in net assets
|
17,675
|
|
|
23,216
|
|
|
12,437
|
|
|||
Net assets, beginning of year
|
308,288
|
|
|
285,072
|
|
|
272,635
|
|
|||
Net assets, end of year
|
$
|
325,963
|
|
|
$
|
308,288
|
|
|
$
|
285,072
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
|||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||||||
(In thousands)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|||
Net increase in net assets from operations
|
$
|
33,058
|
|
|
$
|
39,307
|
|
|
$
|
23,474
|
|
Adjustments to reconcile net increase in net assets from operations to net cash used in operating activities:
|
|
|
|
|
|
||||||
Purchases and originations of investments
|
(229,598
|
)
|
|
(166,181
|
)
|
|
(145,778
|
)
|
|||
Proceeds from sales and repayments of debt investments in portfolio companies
|
74,669
|
|
|
82,489
|
|
|
44,568
|
|
|||
Proceeds from sales and return of capital of equity investments in portfolio companies
|
33,928
|
|
|
104
|
|
|
7,692
|
|
|||
Payment of accreted original issue discounts
|
524
|
|
|
1,477
|
|
|
1,218
|
|
|||
Depreciation and amortization
|
1,393
|
|
|
927
|
|
|
459
|
|
|||
Net pension benefit
|
(51
|
)
|
|
(46
|
)
|
|
(41
|
)
|
|||
Realized (gain) loss on investments before income tax
|
(20,854
|
)
|
|
(1,582
|
)
|
|
(7,896
|
)
|
|||
Net change in unrealized appreciation on investments
|
11,684
|
|
|
(21,359
|
)
|
|
(8,013
|
)
|
|||
Accretion of discounts on investments
|
(1,390
|
)
|
|
(857
|
)
|
|
(434
|
)
|
|||
Payment-in-kind interest and dividends
|
(681
|
)
|
|
(306
|
)
|
|
(63
|
)
|
|||
Stock option and restricted awards expense
|
2,271
|
|
|
1,708
|
|
|
1,197
|
|
|||
Deferred income taxes
|
53
|
|
|
(537
|
)
|
|
1,813
|
|
|||
Changes in other assets and liabilities:
|
|
|
|
|
|
||||||
Increase in dividend and interest receivable
|
(3,850
|
)
|
|
(2,082
|
)
|
|
(1,385
|
)
|
|||
Decrease in escrow receivables
|
310
|
|
|
426
|
|
|
2,860
|
|
|||
(Increase) decrease in other receivables
|
(797
|
)
|
|
180
|
|
|
(127
|
)
|
|||
(Increase) decrease in tax receivable
|
(74
|
)
|
|
(109
|
)
|
|
1,010
|
|
|||
Decrease (increase) in other assets
|
4,236
|
|
|
1,958
|
|
|
(6,775
|
)
|
|||
(Decrease) increase in other liabilities
|
(695
|
)
|
|
620
|
|
|
602
|
|
|||
Increase (decrease) in payable for unsettled transaction
|
1,158
|
|
|
—
|
|
|
(3,940
|
)
|
|||
Net cash used in operating activities
|
(94,706
|
)
|
|
(63,863
|
)
|
|
(89,559
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from common stock offering
|
18,891
|
|
|
—
|
|
|
—
|
|
|||
Equity offering costs paid
|
(127
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under credit facility
|
146,000
|
|
|
76,000
|
|
|
25,000
|
|
|||
Repayments of credit facility
|
(45,000
|
)
|
|
(61,000
|
)
|
|
—
|
|
|||
Debt issuance costs paid
|
(1,827
|
)
|
|
(1,739
|
)
|
|
(2,503
|
)
|
|||
Proceeds from notes
|
19,524
|
|
|
55,775
|
|
|
—
|
|
|||
Dividends to shareholders
|
(42,535
|
)
|
|
(18,586
|
)
|
|
(5,994
|
)
|
|||
Proceeds from exercise of employee stock options
|
2,169
|
|
|
125
|
|
|
1,507
|
|
|||
Common stock withheld for payroll taxes upon vesting of restricted stock
|
(187
|
)
|
|
(86
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
(185
|
)
|
|
(588
|
)
|
|
—
|
|
|||
Spin-off Compensation Plan distribution
|
—
|
|
|
(517
|
)
|
|
(2,034
|
)
|
|||
Net cash provided by financing activities
|
96,723
|
|
|
49,384
|
|
|
15,976
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
2,017
|
|
|
(14,479
|
)
|
|
(73,583
|
)
|
|||
Cash and cash equivalents at beginning of year
|
7,907
|
|
|
22,386
|
|
|
95,969
|
|
|||
Cash and cash equivalents at end of year
|
$
|
9,924
|
|
|
$
|
7,907
|
|
|
$
|
22,386
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
802
|
|
|
$
|
708
|
|
|
$
|
289
|
|
Cash paid for interest
|
10,912
|
|
|
3,405
|
|
|
325
|
|
|||
Supplemental disclosure of noncash financing activities:
|
|
|
|
|
|
||||||
Dividends declared, not yet paid
|
$
|
—
|
|
|
$
|
4,525
|
|
|
$
|
7,191
|
|
Noncash adjustment to realized gain for escrow receivable
|
—
|
|
|
—
|
|
|
118
|
|
|||
Spin-off Compensation Plan distribution accrued, not yet paid
|
—
|
|
|
—
|
|
|
345
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
Non-control/Non-affiliate Investments
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AAC HOLDINGS, INC.
|
|
First Lien
|
|
Healthcare services
|
|
L+6.75% (Floor 1.00%)/Q, 4.00% PIK, Current Coupon 13.49%
|
|
6/30/2023
|
|
9,084
|
|
|
8,912
|
|
|
8,403
|
|
|||
|
|
First Lien
|
|
Healthcare services
|
|
L+11.00% (Floor 1.00%)/M
|
|
3/31/2020
|
|
1,170
|
|
|
1,158
|
|
|
1,182
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
10,070
|
|
|
9,585
|
|
||||
ACE GATHERING, INC.
|
|
Second Lien
15
|
|
Energy services (midstream)
|
|
L+8.50% (Floor 2.00%)/Q, Current Coupon 11.09%
|
|
12/13/2023
|
|
9,938
|
|
|
9,747
|
|
|
9,783
|
|
|||
ADAMS PUBLISHING GROUP, LLC
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+7.50% (Floor 1.00%)/Q, Current Coupon 10.30%
|
|
7/2/2023
|
|
13,566
|
|
|
13,320
|
|
|
13,308
|
|
|||
|
|
Delayed Draw Term Loan
10
|
|
|
|
L+7.50% (Floor 1.00%)
|
|
7/2/2023
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
13,291
|
|
|
13,308
|
|
||||
AG KINGS HOLDINGS INC.
8,16
|
|
First Lien
|
|
Food, agriculture & beverage
|
|
L+10.02% (Floor 1.00%)/M, Current Coupon 12.69%
|
|
8/8/2021
|
|
9,308
|
|
|
9,194
|
|
|
8,330
|
|
|||
ALLIANCE SPORTS GROUP, L.P.
|
|
Senior subordinated debt
|
|
Consumer products & retail
|
|
11.00%
|
|
2/1/2023
|
|
10,100
|
|
|
9,946
|
|
|
9,807
|
|
|||
|
|
3.88% preferred membership interest
|
|
|
|
—
|
|
—
|
|
—
|
|
|
2,500
|
|
|
2,500
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,446
|
|
|
12,307
|
|
||||
AMERICAN NUTS OPERATIONS LLC
13
|
|
First Lien - Term Loan
|
|
Food, agriculture and beverage
|
|
L+9.50% (Floor 1.00%)/Q, Current Coupon 12.30%
|
|
4/10/2023
|
|
17,369
|
|
|
17,075
|
|
|
16,822
|
|
|||
|
|
First Lien - Term Loan C
10
|
|
|
|
L+9.50% (Floor 1.00%)/Q, Current Coupon 12.30%
|
|
4/10/2023
|
|
1,750
|
|
|
1,723
|
|
|
1,695
|
|
|||
|
|
3,000,000 units of Class A common stock
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
3,000
|
|
|
1,505
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
21,798
|
|
|
20,022
|
|
||||
AMERICAN TELECONFERENCING SERVICES, LTD.
|
|
First Lien
|
|
Telecommunications
|
|
L+6.50% (Floor 1.00%)/Q, Current Coupon 9.24%
|
|
12/8/2021
|
|
6,023
|
|
|
5,922
|
|
|
3,953
|
|
|||
|
|
Second Lien
|
|
|
|
L+9.50% (Floor 1.00%)/Q, Current Coupon 12.30%
|
|
6/6/2022
|
|
2,006
|
|
|
1,954
|
|
|
1,103
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
7,876
|
|
|
5,056
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
AMWARE FULFILLMENT LLC
|
|
First Lien
|
|
Distribution
|
|
L+9.50% (Floor 1.00%)/M, Current Coupon 12.10%
|
|
12/31/2020
|
|
12,753
|
|
|
12,666
|
|
|
12,651
|
|
|||
ASC ORTHO MANAGEMENT COMPANY, LLC
13
|
|
Revolving Loan
10
|
|
Healthcare services
|
|
L+7.50% (Floor 1.00%)
|
|
8/31/2023
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+7.50% (Floor 1.00%)/Q, Current Coupon 10.30%
|
|
8/31/2023
|
|
9,261
|
|
|
9,094
|
|
|
9,095
|
|
|||
|
|
Second Lien
|
|
|
|
13.25% PIK
|
|
12/1/2023
|
|
3,250
|
|
|
3,178
|
|
|
3,178
|
|
|||
|
|
2,042 Common Units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
750
|
|
|
750
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,995
|
|
|
13,023
|
|
||||
BINSWANGER HOLDING CORP.
|
|
First Lien
|
|
Distribution
|
|
L+8.00% (Floor 1.00%)/M, Current Coupon 10.60%
|
|
3/9/2022
|
|
12,150
|
|
|
11,992
|
|
|
12,016
|
|
|||
|
|
900,000 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
900
|
|
|
1,013
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,892
|
|
|
13,029
|
|
||||
BLASCHAK COAL CORP.
|
|
Second Lien
15
|
|
Commodities & mining
|
|
L+10.00%/Q, 1.00% PIK, Current Coupon 13.81%
|
|
7/30/2023
|
|
8,537
|
|
|
8,383
|
|
|
8,511
|
|
|||
CALIFORNIA PIZZA KITCHEN, INC.
|
|
First Lien
|
|
Restaurants
|
|
L+6.00% (Floor 1.00%)/M, Current Coupon 8.50%
|
|
8/23/2022
|
|
4,875
|
|
|
4,844
|
|
|
4,723
|
|
|||
CAPITAL PAWN HOLDINGS, LLC
|
|
First Lien
|
|
Consumer products & retail
|
|
L+9.50%/Q, Current Coupon 12.30%
|
|
7/8/2020
|
|
11,448
|
|
|
11,315
|
|
|
11,310
|
|
|||
CLICKBOOTH.COM, LLC
|
|
Revolving Loan
10
|
|
Media, marketing & entertainment
|
|
L+8.50% (Floor 1.00%)
|
|
12/5/2022
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+8.50% (Floor 1.00%)/Q, Current Coupon 11.31%
|
|
12/5/2022
|
|
16,953
|
|
|
16,684
|
|
|
17,292
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
16,669
|
|
|
17,292
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
DANFORTH ADVISORS, LLC
13
|
|
Revolving Loan
10
|
|
Business services
|
|
L+7.25% (Floor 2.00%)
|
|
9/28/2023
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+7.25% (Floor 2.00%)/Q, Current Coupon 10.05%
|
|
9/28/2023
|
|
7,250
|
|
|
7,117
|
|
|
7,145
|
|
|||
|
|
875 Class A equity units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
875
|
|
|
875
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
7,974
|
|
|
8,020
|
|
||||
DELPHI INTERMEDIATE HEALTHCO, LLC
|
|
First Lien
|
|
Healthcare services
|
|
L+7.50% (Floor 1.00%)/Q, Current Coupon 10.23%
|
|
10/3/2022
|
|
11,400
|
|
|
11,310
|
|
|
11,023
|
|
|||
DIGITAL RIVER, INC.
|
|
First Lien
|
|
Software & IT services
|
|
L+6.00% (Floor 1.00%)/Q, Current Coupon 8.60%
|
|
2/12/2021
|
|
6,285
|
|
|
6,277
|
|
|
6,128
|
|
|||
DUNN PAPER, INC.
|
|
Second Lien
|
|
Paper & forest products
|
|
L+8.75% (Floor 1.00%)/M, Current Coupon 11.25%
|
|
8/25/2023
|
|
3,000
|
|
|
2,957
|
|
|
2,883
|
|
|||
ELITE SEM, INC.
8
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+8.40% (Floor 1.00%)/M, Current Coupon 11.00%
|
|
2/1/2022
|
|
14,000
|
|
|
13,717
|
|
|
14,000
|
|
|||
|
|
1,443 Investment Units (Preferred)
|
|
|
|
12% PIK
|
|
—
|
|
—
|
|
|
2,068
|
|
|
4,457
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
15,785
|
|
|
18,457
|
|
||||
ENVIRONMENTAL PEST SERVICE MANAGEMENT COMPANY, LLC
|
|
First Lien
|
|
Consumer services
|
|
L+7.25%/Q, Current Coupon 10.06%
|
|
6/22/2023
|
|
16,169
|
|
|
15,921
|
|
|
16,169
|
|
|||
|
|
Delayed Draw Term Loan
10
|
|
|
|
L+7.25%/Q, Current Coupon 10.06%
|
|
6/22/2023
|
|
6,461
|
|
|
6,353
|
|
|
6,461
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
22,274
|
|
|
22,630
|
|
||||
FAST SANDWICH, LLC
|
|
Revolving Loan
10
|
|
Restaurants
|
|
L+9.00% (Floor 1.00%)
|
|
—
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+9.00% (Floor 1.00%)/Q, Current Coupon 11.80%
|
|
5/23/2023
|
|
3,238
|
|
|
3,191
|
|
|
3,190
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
3,134
|
|
|
3,190
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
JVMC HOLDINGS CORP.
|
|
First Lien
|
|
Financial services
|
|
L+6.50% (Floor 1.00%)/M, Current Coupon 9.00%
|
|
2/28/2024
|
|
9,152
|
|
|
9,062
|
|
|
9,062
|
|
|||
|
|
Delayed Draw Term Loan
10
|
|
|
|
L+6.50% (Floor 1.00%)
|
|
2/28/2024
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
9,055
|
|
|
9,062
|
|
||||
LGM PHARMA, LLC
13
|
|
First Lien
|
|
Healthcare products
|
|
L+8.50% (Floor 1.00%)/M, Current Coupon 10.99%
|
|
11/15/2022
|
|
9,875
|
|
|
9,723
|
|
|
10,073
|
|
|||
|
|
Delayed Draw Term Loan
|
|
|
|
L+8.50% (Floor 1.00%)/M, Current Coupon 10.99%
|
|
11/15/2022
|
|
1,785
|
|
|
1,753
|
|
|
1,820
|
|
|||
|
|
110,000 units of Class A common stock
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,100
|
|
|
821
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,576
|
|
|
12,714
|
|
||||
LIGHTING RETROFIT INTERNATIONAL, LLC
|
|
First Lien
|
|
Environmental services
|
|
L+9.25% (Floor 1.00%)/Q, Current Coupon 11.84%
|
|
6/30/2022
|
|
13,688
|
|
|
13,580
|
|
|
12,606
|
|
|||
|
|
25,603 shares of Series C preferred stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
26
|
|
|
28
|
|
|||
|
|
396,825 shares of Series B preferred stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
500
|
|
|
307
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
14,106
|
|
|
12,941
|
|
||||
RESEARCH NOW GROUP, INC.
|
|
Second Lien
|
|
Business services
|
|
L+9.50% (Floor 1.00%)/M, Current Coupon 12.00%
|
|
12/20/2025
|
|
10,500
|
|
|
9,838
|
|
|
10,437
|
|
|||
SCRIP INC.
8
|
|
First Lien
|
|
Healthcare products
|
|
L+10.00% (Floor 2.00%)/M, Current Coupon 12.49%
|
|
3/21/2024
|
|
16,750
|
|
|
16,250
|
|
|
16,250
|
|
|||
|
|
100 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,000
|
|
|
1,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
17,250
|
|
|
17,250
|
|
||||
TAX ADVISORS GROUP, LLC
13
|
|
143.3 Class A units
9
|
|
Financial services
|
|
—
|
|
—
|
|
—
|
|
|
541
|
|
|
645
|
|
|||
VISTAR MEDIA INC.
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+10.00% (Floor 1.00%)/M, Current Coupon 12.60%
|
|
2/16/2022
|
|
7,975
|
|
|
7,447
|
|
|
7,975
|
|
|||
|
|
Warrants (Expiration - February 17, 2027)
|
|
|
|
—
|
|
—
|
|
—
|
|
|
886
|
|
|
2,378
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,333
|
|
|
10,353
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
305,596
|
|
|
$
|
304,663
|
|
||
Affiliate Investments
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CHANDLER SIGNS, LLC
13
|
|
Senior subordinated debt
|
|
Business services
|
|
12.00% / 1.00% PIK
|
|
7/4/2021
|
|
$
|
4,557
|
|
|
$
|
4,512
|
|
|
$
|
4,480
|
|
|
|
1,500,000 units of Class A-1 common stock
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,500
|
|
|
1,937
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
6,012
|
|
|
6,417
|
|
||||
DYNAMIC COMMUNITIES, LLC
13
|
|
Revolving Loan
10
|
|
Business services
|
|
L+8.00% (Floor 1.00%)
|
|
7/17/2023
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+8.00% (Floor 1.00%)/M, Current Coupon 10.59%
|
|
7/17/2023
|
|
11,060
|
|
|
10,863
|
|
|
10,972
|
|
|||
|
|
2,000,000 Preferred Units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
2,000
|
|
|
2,849
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,859
|
|
|
13,821
|
|
||||
ITA HOLDINGS GROUP, LLC
13
|
|
Revolving Loan
10
|
|
Transportation & logistics
|
|
L+9.00% (Floor 1.00%)/Q, 1.00% PIK, Current Coupon 12.60%
|
|
2/14/2023
|
|
2,000
|
|
|
1,960
|
|
|
2,000
|
|
|||
|
|
First Lien - Term Loan
|
|
|
|
L+8.00% (Floor 1.00%)/Q, 1.00% PIK, Current Coupon 11.60%
|
|
2/14/2023
|
|
7,659
|
|
|
7,533
|
|
|
7,475
|
|
|||
|
|
First Lien - Term B Loan
|
|
|
|
L+11.00% (Floor 1.00%)/Q, 1.00% PIK, Current Coupon 14.60%
|
|
2/14/2023
|
|
3,830
|
|
|
3,762
|
|
|
3,829
|
|
|||
|
|
First Lien - PIK Note A
|
|
|
|
10.00% PIK
|
|
2/14/2023
|
|
2,250
|
|
|
1,692
|
|
|
2,005
|
|
|||
|
|
First Lien - PIK Note B
|
|
|
|
10.00% PIK
|
|
2/14/2023
|
|
89
|
|
|
89
|
|
|
79
|
|
|||
|
|
Warrants (Expiration - March 29, 2029)
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
538
|
|
|
1,557
|
|
|||
|
|
9.25% Class A Membership Interest
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,500
|
|
|
923
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
17,074
|
|
|
17,868
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
ROSELAND MANAGEMENT, LLC
|
|
Revolving Loan
10
|
|
Healthcare services
|
|
L+7.00% (Floor 2.00%)
|
|
11/9/2023
|
|
—
|
|
|
(32
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+7.00% (Floor 2.00%)/Q, Current Coupon 9.80%
|
|
11/9/2023
|
|
10,474
|
|
|
10,302
|
|
|
10,474
|
|
|||
|
|
10,000 Class A Units
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,000
|
|
|
1,487
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
11,270
|
|
|
11,961
|
|
||||
SIMR, LLC
|
|
First Lien
|
|
Healthcare services
|
|
L+9.00% (Floor 2.00%)/M, Current Coupon 11.62%
|
|
9/7/2023
|
|
11,542
|
|
|
11,332
|
|
|
11,403
|
|
|||
|
|
5,724,000 Class B Common Units
|
|
|
|
—
|
|
—
|
|
—
|
|
|
5,724
|
|
|
5,724
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
17,056
|
|
|
17,127
|
|
||||
ZENFOLIO INC.
|
|
Revolving Loan
10
|
|
Business services
|
|
L+9.00% (Floor 1.00%)
|
|
7/17/2022
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||
|
|
First Lien
|
|
|
|
L+9.00% (Floor 1.00%)/Q, Current Coupon 11.60%
|
|
7/17/2022
|
|
13,298
|
|
|
13,119
|
|
|
13,165
|
|
|||
|
|
190 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,900
|
|
|
546
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
15,006
|
|
|
13,711
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
79,277
|
|
|
$
|
80,905
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Control Investments
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
I-45 SLF LLC
9,11
|
|
80% LLC equity interest
|
|
Multi-sector holdings
|
|
—
|
|
—
|
|
—
|
|
|
$
|
68,000
|
|
|
$
|
65,743
|
|
|
MEDIA RECOVERY, INC.
11
|
|
800,000 shares of Series A convertible preferred stock
|
|
Industrial products
|
|
—
|
|
—
|
|
—
|
|
|
800
|
|
|
7,795
|
|
|||
|
|
4,000,002 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
4,615
|
|
|
44,965
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,415
|
|
|
52,760
|
|
||||
PRISM SPECTRUM HOLDINGS, LLC
13
|
|
First Lien
|
|
Environmental services
|
|
L+9.50% (Floor 2.25%)/M, Current Coupon 12.12%
|
|
2/6/2023
|
|
13,461
|
|
|
13,229
|
|
|
13,461
|
|
|||
|
|
96,498.32 Class A units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
6,538
|
|
|
6,539
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
19,767
|
|
|
20,000
|
|
CAPITAL SOUTHWEST CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||
CONSOLIDATED SCHEDULE OF INVESTMENTS
|
||||||||||||||||||||
March 31, 2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,14
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
93,182
|
|
|
138,503
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
TOTAL INVESTMENTS
12
|
|
|
|
|
|
|
|
|
|
|
|
$
|
478,055
|
|
|
$
|
524,071
|
|
1
|
All debt investments are income-producing, unless otherwise noted. Equity investments and warrants are non-income producing, unless otherwise noted.
|
2
|
All of the Company’s investments, unless otherwise noted, are encumbered as security for the Company’s senior secured credit facility.
|
3
|
The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“P”) and reset daily (D), monthly (M), quarterly (Q), or semiannually (S). For each the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at
March 31, 2019
. Certain investments are subject to a LIBOR or Prime interest rate floor. Certain investments, as noted, accrue payment-in-kind ("PIK") interest.
|
4
|
The Company's investment portfolio is comprised entirely of privately held debt and equity securities for which quoted prices falling within the categories of Level 1 and Level 2 inputs are not available. Therefore, the Company values all of its portfolio investments at fair value, as determined in good faith by the Board of Directors, using significant unobservable Level 3 inputs. Refer to Note 4 for further discussion.
|
5
|
Non-Control/Non-Affiliate investments are generally defined by the Investment Company Act of 1940 (the “1940 Act”) as investments that are neither control investments nor affiliate investments. At
March 31, 2019
, approximately
58.2%
of the Company’s investment assets were non-control/non-affiliate investments. The fair value of these investments as a percent of net assets is
93.5%
.
|
6
|
Affiliate investments are generally defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At
March 31, 2019
, approximately
15.4%
of the Company’s investment assets were affiliate investments. The fair value of these investments as a percent of net assets is
24.8%
.
|
7
|
Control investments are generally defined by the 1940 Act as investments in which more than 25% of the voting securities are owned. At
March 31, 2019
, approximately
26.4%
of the Company’s investment assets were control investments. The fair value of these investments as a percent of net assets is
42.5%
.
|
8
|
The investment is structured as a first lien last out term loan.
|
9
|
Indicates assets that are considered "non-qualifying assets” under section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. As of
March 31, 2019
, approximately
16.1%
of the Company's investment assets are non-qualifying assets.
|
10
|
The investment has an unfunded commitment as of
March 31, 2019
. Refer to Note 12 - Commitments and Contingencies for further discussion.
|
11
|
Income producing through dividends or distributions.
|
12
|
As of
March 31, 2019
, the cumulative gross unrealized appreciation for federal income tax purposes is approximately
$56.6 million
; cumulative gross unrealized depreciation for federal income tax purposes is
$11.6 million
. Cumulative net unrealized appreciation is
$45.0 million
, based on a tax cost of
$477.8 million
.
|
13
|
ASC Ortho Management Company, LLC common units, Danforth Advisors, LLC common units, American Nuts Operations LLC Class A common stock, LGM Pharma, LLC Class A common stock, Tax Advisors Group, LLC Class A units, Chandler Signs, LP Class A-1 common stock, Dynamic Communities, LLC Preferred units, ITA Holdings Group, LLC membership interest, and Prism Spectrum Holdings LLC Class A units are held through a wholly-owned taxable subsidiary.
|
14
|
The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed "restricted securities" under the Securities Act.
|
15
|
The investment is structured as a split lien term loan, which provides the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor.
|
16
|
Investment was on non-accrual status as of
March 31, 2019
, meaning the Company has ceased to recognize interest income on the investment.
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,21
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
Non-control/Non-affiliate Investments
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AAC HOLDINGS, INC.
|
|
First Lien
|
|
Healthcare services
|
|
L+6.75% (Floor 1.00%), Current Coupon 8.52%
|
|
6/30/2023
|
|
$
|
9,322
|
|
|
$
|
9,111
|
|
|
$
|
9,485
|
|
AG KINGS HOLDINGS INC.
8
|
|
First Lien
|
|
Food, agriculture & beverage
|
|
L+9.40% (Floor 1.00%), Current Coupon 11.21%
|
|
8/8/2021
|
|
9,650
|
|
|
9,508
|
|
|
9,438
|
|
|||
ALLIANCE SPORTS GROUP, L.P.
|
|
Senior subordinated debt
|
|
Consumer products & retail
|
|
11.00%
|
|
2/1/2023
|
|
10,100
|
|
|
9,916
|
|
|
9,807
|
|
|||
|
|
2.65% membership interest
|
|
|
|
—
|
|
—
|
|
—
|
|
2,500
|
|
|
1,996
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
12,416
|
|
|
11,803
|
|
||||
AMERICAN TELECONFERENCING SERVICES, LTD.
|
|
First Lien
|
|
Telecommunications
|
|
L+6.50% (Floor 1.00%), Current Coupon 8.29%
|
|
12/8/2021
|
|
6,378
|
|
|
6,239
|
|
|
6,377
|
|
|||
|
|
Second Lien
|
|
|
|
L+9.50% (Floor 1.00%), Current Coupon 11.20%
|
|
6/6/2022
|
|
2,006
|
|
|
1,941
|
|
|
1,919
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,180
|
|
|
8,295
|
|
||||
AMWARE FULFILLMENT LLC
17
|
|
First Lien
|
|
Distribution
|
|
L+12.00% (Floor 1.00%), Current Coupon 14.02%
|
|
5/21/2019
|
|
13,478
|
|
|
13,284
|
|
|
12,939
|
|
|||
BINSWANGER HOLDING CORP.
|
|
First Lien
|
|
Distribution
|
|
L+8.00% (Floor 1.00%), Current Coupon 10.02%
|
|
3/9/2022
|
|
13,036
|
|
|
12,818
|
|
|
12,900
|
|
|||
|
|
900,000 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
900
|
|
|
874
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
13,718
|
|
|
13,774
|
|
||||
CALIFORNIA PIZZA KITCHEN, INC.
|
|
First Lien
|
|
Restaurants
|
|
L+6.00% (Floor 1.00%), Current Coupon 7.88%
|
|
8/23/2022
|
|
4,925
|
|
|
4,887
|
|
|
4,836
|
|
|||
CAPITAL PAWN HOLDINGS, LLC
|
|
First Lien
|
|
Consumer products & retail
|
|
L+9.50%,
Current Coupon 11.19%
|
|
7/8/2020
|
|
12,922
|
|
|
12,670
|
|
|
12,767
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,21
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
CLICKBOOTH.COM, LLC
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+8.50% (Floor 1.00%), Current Coupon 10.19%
|
|
12/5/2022
|
|
17,391
|
|
|
17,060
|
|
|
17,443
|
|
|||
|
|
Revolving Loan
15
|
|
|
|
L+8.50% (Floor 1.00%)
|
|
12/5/2022
|
|
—
|
|
(19
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
17,041
|
|
|
17,443
|
|
||||
DEEPWATER CORROSION SERVICES, INC.
|
|
127,004 shares of Series A convertible preferred stock
|
|
Energy services (upstream)
|
|
—
|
|
—
|
|
—
|
|
8,000
|
|
|
4,629
|
|
||||
DELPHI INTERMEDIATE HEALTHCO, LLC
|
|
First Lien
|
|
Healthcare services
|
|
L+7.50% (Floor 1.00%), Current Coupon 9.27%
|
|
10/3/2022
|
|
7,406
|
|
|
7,337
|
|
|
7,266
|
|
|||
DIGITAL RIVER, INC.
|
|
First Lien
|
|
Software & IT services
|
|
L+6.50% (Floor 1.00%), Current Coupon 8.61%
|
|
2/12/2021
|
|
6,285
|
|
|
6,273
|
|
|
6,285
|
|
|||
DUNN PAPER, INC.
|
|
Second Lien
|
|
Paper & forest products
|
|
L+8.75% (Floor 1.00%), Current Coupon 10.63%
|
|
8/26/2023
|
|
3,000
|
|
|
2,950
|
|
|
3,000
|
|
|||
LGM PHARMA, LLC
13
|
|
First Lien
|
|
Healthcare products
|
|
L+8.50% (Floor 1.00%), Current Coupon 10.17%
|
|
11/15/2022
|
|
9,975
|
|
|
9,787
|
|
|
9,955
|
|
|||
|
|
Delayed Draw Term Loan
18
|
|
|
|
L+8.50% (Floor 1.00%), Current Coupon 10.29%
|
|
11/15/2022
|
|
1,300
|
|
|
1,275
|
|
|
1,297
|
|
|||
|
|
110,000 units of Class A common stock
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,100
|
|
|
1,100
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,162
|
|
|
12,352
|
|
||||
LIGHTING RETROFIT INTERNATIONAL, LLC
|
|
First Lien
|
|
Environmental services
|
|
L+9.25% (Floor 1.00%), Current Coupon 10.94%
|
|
6/30/2022
|
|
14,625
|
|
|
14,487
|
|
|
14,362
|
|
|||
|
|
396,825 shares of Series B preferred stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
500
|
|
|
376
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
14,987
|
|
|
14,738
|
|
||||
PRE-PAID LEGAL SERVICES, INC.
|
|
Second Lien
|
|
Consumer services
|
|
L+9.00% (Floor 1.25%), Current Coupon 10.88%
|
|
7/1/2020
|
|
5,000
|
|
|
4,968
|
|
|
5,000
|
|
|||
RESEARCH NOW GROUP, INC.
|
|
Second Lien
|
|
Business services
|
|
L+9.50% (Floor 1.00%), Current Coupon 11.28%
|
|
12/20/2025
|
|
10,500
|
|
|
9,779
|
|
|
9,818
|
|
|||
RESTAURANT TECHNOLOGIES, INC.
|
|
Second Lien
|
|
Business services
|
|
L+8.75% (Floor 1.00%), Current Coupon 10.69%
|
|
11/23/2023
|
|
3,500
|
|
|
3,455
|
|
|
3,493
|
|
|||
JVMC HOLDINGS CORP.
14
|
|
First Lien
|
|
Financial services
|
|
L+8.02% (Floor 1.00%), Current Coupon 9.90%
|
|
5/5/2022
|
|
7,219
|
|
|
7,157
|
|
|
7,215
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,21
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
TAX ADVISORS GROUP, LLC
13
|
|
Senior subordinated debt
|
|
Financial services
|
|
10.00% / 2.00% PIK
|
|
12/23/2022
|
|
4,600
|
|
|
4,518
|
|
|
4,600
|
|
|||
|
|
143.3 Class A units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
541
|
|
|
886
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,059
|
|
|
5,486
|
|
||||
VISTAR MEDIA INC.
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+10.00% (Floor 1.00%), Current Coupon 12.02%
|
|
2/16/2022
|
|
8,113
|
|
|
7,434
|
|
|
8,194
|
|
|||
|
|
Warrants (Expiration - February 17, 2027)
|
|
|
|
—
|
|
—
|
|
—
|
|
|
886
|
|
|
1,682
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
8,320
|
|
|
9,876
|
|
||||
WASTEWATER SPECIALTIES, LLC
|
|
First Lien
16
|
|
Industrial services
|
|
L+12.25% (Floor 1.00%), Current Coupon 13.90%
|
|
4/18/2022
|
|
9,864
|
|
|
9,721
|
|
|
10,012
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
200,981
|
|
|
$
|
199,949
|
|
||
Affiliate Investments
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
CHANDLER SIGNS, LLC
13
|
|
Senior subordinated debt
|
|
Business services
|
|
12.00% / 1.00% PIK
|
|
7/4/2021
|
|
4,511
|
|
|
4,451
|
|
|
4,376
|
|
|||
|
|
1,500,000 units of Class A-1 common stock
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,500
|
|
|
1,934
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,951
|
|
|
6,310
|
|
||||
ELITE SEM, INC.
8
|
|
First Lien
|
|
Media, marketing & entertainment
|
|
L+9.90% (Floor 1.00%), Current Coupon 12.10%
|
|
2/1/2022
|
|
17,500
|
|
|
17,104
|
|
|
17,500
|
|
|||
|
|
1,089 Preferred units
|
|
|
|
12% PIK
|
|
—
|
|
—
|
|
|
1,236
|
|
|
1,879
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
18,339
|
|
|
19,379
|
|
||||
ITA HOLDINGS GROUP, LLC
13
|
|
First Lien
|
|
Transportation & logistics
|
|
L+8.50% (Floor 1.00%, Current Coupon 10.32%)
|
|
2/14/2023
|
|
9,500
|
|
|
9,314
|
|
|
9,314
|
|
|||
|
|
Revolving Loan
19
|
|
|
|
L+8.50% (Floor 1.00%)
|
|
2/14/2023
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||
|
|
Delayed Draw Term Loan
|
|
|
|
L+8.50% (Floor 1.00%, Current Coupon 10.32%)
|
|
2/14/2023
|
|
1,500
|
|
|
1,470
|
|
|
1,470
|
|
|||
|
|
9.25% Class A Membership Interest
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,500
|
|
|
1,500
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
12,275
|
|
|
12,284
|
|
||||
ZENFOLIO INC.
|
|
First Lien
|
|
Business services
|
|
L+9.00% (Floor 1.00%), Current Coupon 10.69%
|
|
7/17/2022
|
|
13,433
|
|
|
13,201
|
|
|
13,325
|
|
|||
|
|
Revolving Loan
15
|
|
|
|
L+9.00% (Floor 1.00%)
|
|
7/17/2022
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
|
|
190 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,900
|
|
|
1,900
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
15,083
|
|
|
15,225
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
51,648
|
|
|
$
|
53,198
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
||||||
|
|
Type of
|
|
|
|
Interest
|
|
|
|
|
|
|
|
Fair
|
||||||
Portfolio Company
1
|
|
Investment
2,21
|
|
Industry
|
|
Rate
3
|
|
Maturity
|
|
Principal
|
|
Cost
|
|
Value
4
|
||||||
Control Investments
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
I-45 SLF LLC
9, 10, 11
|
|
80% LLC equity interest
|
|
Multi-sector holdings
|
|
—
|
|
—
|
|
—
|
|
|
$
|
64,800
|
|
|
$
|
67,113
|
|
|
MEDIA RECOVERY, INC.
11
|
|
800,000 shares of Series A convertible preferred stock
|
|
Industrial products
|
|
—
|
|
—
|
|
—
|
|
|
800
|
|
|
6,371
|
|
|||
|
|
4,000,002 shares of common stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
4,615
|
|
|
36,751
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
5,415
|
|
|
43,122
|
|
||||
PRISM SPECTRUM HOLDINGS, LLC
13
|
|
First Lien
|
|
Environmental services
|
|
L+9.50% (Floor 2.25%), Current Coupon 11.75%
|
|
2/6/2023
|
|
4,325
|
|
|
4,241
|
|
|
4,241
|
|
|||
|
|
Revolving Loan
20
|
|
|
|
L+9.50% (Floor 2.25%), Current Coupon 11.75%
|
|
2/6/2023
|
|
500
|
|
|
490
|
|
|
490
|
|
|||
|
|
57.25 Class A units
9
|
|
|
|
—
|
|
—
|
|
—
|
|
|
1,692
|
|
|
1,692
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
6,422
|
|
|
6,422
|
|
||||
TITANLINER, INC.
|
|
1,189,609 shares of Series B convertible preferred stock
|
|
Energy services (upstream)
|
|
6% PIK
|
|
—
|
|
—
|
|
|
2,926
|
|
|
11,362
|
|
|||
|
|
339,277 shares of Series A convertible preferred stock
|
|
|
|
—
|
|
—
|
|
—
|
|
|
3,204
|
|
|
11,928
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
6,130
|
|
|
23,290
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
82,768
|
|
|
$
|
139,948
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
TOTAL INVESTMENTS
12
|
|
|
|
|
|
|
|
|
|
|
|
$
|
335,397
|
|
|
$
|
393,096
|
|
1
|
All debt investments are income-producing, unless otherwise noted. Equity investments and warrants are non-income producing, unless otherwise noted.
|
2
|
All of the Company’s investments, unless otherwise noted, are encumbered as security for the Company’s senior secured credit facility.
|
3
|
The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“P”) and reset daily, monthly, quarterly, or semiannually. For each the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at March 31, 2018. Certain investments are subject to a LIBOR or Prime interest rate floor. Certain investments, as noted, accrue payment-in-kind (“PIK”) interest.
|
4
|
Investments are carried at fair value in accordance with the Investment Company Act of 1940 (the “1940 Act”) and Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures. We determine in good faith the fair value of our Investment portfolio pursuant to a valuation policy in accordance with ASC 820 and a valuation process approved by our Board of Directors. See Note 4 to the consolidated financial statements.
|
5
|
Non-Control/Non-Affiliate investments are generally defined by the 1940 Act as investments that are neither control investments nor affiliate investments. At March 31, 2018, approximately 50.9% of the Company’s investment assets were non-control/non-affiliate investments. The fair value of these investments as a percent of net assets is 64.9%.
|
6
|
Affiliate investments are generally defined by the 1940 Act as investments in which between 5% and 25% of the voting securities are owned and the investments are not classified as control investments. At March 31, 2018, approximately 13.5% of the Company’s investment assets were affiliate investments. The fair value of these investments as a percent of net assets is 17.3%.
|
7
|
Control investments are generally defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where greater than 50% of the board representation is maintained. At March 31, 2018, approximately 35.6% of the Company’s investment assets were control investments. The fair value of these investments as a percent of net assets is 45.4%.
|
8
|
The investment is structured as a first lien last out term loan.
|
9
|
Indicates assets that are considered “non-qualifying assets” under section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets. As of March 31, 2018, approximately 18.0% of the Company’s investment assets are non-qualifying assets.
|
10
|
The investment has approximately $3.2 million unfunded commitment as of March 31, 2018.
|
11
|
Income producing through dividends on distributions.
|
12
|
As of March 31, 2018, the cumulative gross unrealized appreciation for federal income tax purposes is approximately $62.4 million; cumulative gross unrealized depreciation for federal income tax purposes is $4.9 million. Cumulative net unrealized appreciation is $57.5 million, based on a tax cost of $335.6 million.
|
13
|
ITA Holdings Group, LLC membership interest, LGM Pharma, LLC Class A common stock, Prism Spectrum Holdings LLC Class A units, Tax Advisors Group, LLC Class A units and Chandler Signs, LP Class A-1 common stock are held through a wholly-owned taxable subsidiary
.
|
14
|
The investment is structured as a first lien first out term loan
.
|
15
|
The investment has approximately $2.0 million unfunded commitment as of March 31, 2018.
|
16
|
As of March 31, 2018, the investment is paying default interest at a rate of 3.0% per annum
.
|
17
|
As of March 31, 2018, the investment is paying default interest at a rate of 2.5% per annum
.
|
18
|
The investment has approximately $0.9 million unfunded commitment as of March 31, 2018.
|
19
|
The investment has approximately $2.0 million unfunded commitment as of March 31, 2018.
|
20
|
The investment has approximately $1.5 million unfunded commitment as of March 31, 2018.
|
21
|
The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed "restricted securities" under the Securities Act.
|
(1)
|
Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC.
|
(2)
|
Securities of any eligible portfolio company that we control.
|
(3)
|
Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
|
(4)
|
Securities of an eligible portfolio company purchased from any person in a private transaction if there is no readily available market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.
|
(5)
|
Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities.
|
(6)
|
Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
|
(1)
|
Continue to qualify as a BDC under the 1940 Act at all times during each taxable year.
|
(2)
|
Derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities, loans, gains from the sale of stock or other securities, net income from certain “qualified publicly traded partnerships,” or other income derived with respect to our business of investing in such stock or securities (the “90% Income Test”).
|
(3)
|
Diversify our holdings in accordance with two Diversification Requirements: (a) Diversify our holdings such that at the end of each quarter of the taxable year at least 50% of the value of our assets consists of cash, cash equivalents, U.S. Government securities, securities of other RICs, and such other securities if such other securities of any one issuer do not represent more than 5% of the value of our assets or more than 10% of the outstanding voting securities of the issuer;
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|||||||
|
Fair
|
|
Total Portfolio
|
|
Percentage of
|
|
|
|
Total Portfolio
|
|||||||
|
Value
|
|
at Fair Value
|
|
Net Assets
|
|
Cost
|
|
at Cost
|
|||||||
|
(dollars in thousands)
|
|||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|||||||
First lien loans
1
|
$
|
317,544
|
|
|
60.6
|
%
|
|
97.4
|
%
|
|
$
|
319,278
|
|
|
66.8
|
%
|
Second lien loans
2
|
35,896
|
|
|
6.8
|
|
|
11.0
|
|
|
36,057
|
|
|
7.5
|
|
||
Subordinated debt
|
14,287
|
|
|
2.7
|
|
|
4.4
|
|
|
14,458
|
|
|
3.0
|
|
||
Preferred equity
|
17,936
|
|
|
3.4
|
|
|
5.5
|
|
|
7,894
|
|
|
1.7
|
|
||
Common equity & warrants
|
72,665
|
|
|
14.0
|
|
|
22.3
|
|
|
32,368
|
|
|
6.8
|
|
||
I-45 SLF LLC
3
|
65,743
|
|
|
12.5
|
|
|
20.1
|
|
|
68,000
|
|
|
14.2
|
|
||
|
$
|
524,071
|
|
|
100.0
|
%
|
|
160.7
|
%
|
|
$
|
478,055
|
|
|
100.0
|
%
|
March 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||||||
First lien loans
1
|
$
|
197,110
|
|
|
50.1
|
%
|
|
63.9
|
%
|
|
$
|
194,820
|
|
|
58.1
|
%
|
Second lien loans
2
|
23,229
|
|
|
5.9
|
|
|
7.5
|
|
|
23,092
|
|
|
6.9
|
|
||
Subordinated debt
|
18,783
|
|
|
4.8
|
|
|
6.1
|
|
|
18,885
|
|
|
5.6
|
|
||
Preferred equity
|
36,545
|
|
|
9.3
|
|
|
11.9
|
|
|
16,666
|
|
|
5.0
|
|
||
Common equity & warrants
|
50,315
|
|
|
12.8
|
|
|
16.3
|
|
|
17,134
|
|
|
5.1
|
|
||
I-45 SLF LLC
3
|
67,113
|
|
|
17.1
|
|
|
21.8
|
|
|
64,800
|
|
|
19.3
|
|
||
|
$
|
393,095
|
|
|
100.0
|
%
|
|
127.5
|
%
|
|
$
|
335,397
|
|
|
100.0
|
%
|
1
|
Included in first lien loans are loans structured as first lien last out loans. These loans may in certain cases be subordinated in payment priority to other senior secured lenders. As of
March 31, 2019
and
2018
, the fair value of the first lien last out loans are
$38.6 million
and $26.9 million, respectively.
|
2
|
Included in second lien loans are loans structured as split lien term loans. These loans provide the Company with a first lien priority on certain assets of the obligor and a second lien priority on different assets of the obligor. As of
March 31, 2019
, the fair value of the split lien term loans are
$18.3 million
. As of March 31, 2018, there were no investments in split lien term loans.
|
3
|
I-45 SLF LLC is a joint venture between CSWC and Main Street Capital. This entity primarily invests in syndicated senior secured loans to the UMM. The portfolio companies held by I-45 SLF LLC represent a diverse set of industry classifications, which are similar to those in which CSWC invests directly. See Note 17 for further discussion.
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|||||||
|
|
|
Total Portfolio
|
|
Percentage of
|
|
|
|
Total Portfolio
|
|||||||
|
Fair Value
|
|
at Fair Value
|
|
Net Assets
|
|
Cost
|
|
at Cost
|
|||||||
|
(dollars in thousands)
|
|||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|||||||
I-45 SLF LLC
1
|
$
|
65,743
|
|
|
12.5
|
%
|
|
20.2
|
%
|
|
$
|
68,000
|
|
|
14.2
|
%
|
Healthcare Services
|
62,719
|
|
|
12.0
|
|
|
19.2
|
|
|
62,701
|
|
|
13.1
|
|
||
Media, Marketing, & Entertainment
|
59,410
|
|
|
11.3
|
|
|
18.2
|
|
|
54,079
|
|
|
11.3
|
|
||
Industrial Products
|
52,760
|
|
|
10.1
|
|
|
16.2
|
|
|
5,415
|
|
|
1.1
|
|
||
Business Services
|
52,405
|
|
|
10.0
|
|
|
16.1
|
|
|
51,688
|
|
|
10.8
|
|
||
Environmental Services
|
32,941
|
|
|
6.3
|
|
|
10.1
|
|
|
33,873
|
|
|
7.1
|
|
||
Healthcare Products
|
29,964
|
|
|
5.7
|
|
|
9.2
|
|
|
29,826
|
|
|
6.2
|
|
||
Food, Agriculture & Beverage
|
28,352
|
|
|
5.4
|
|
|
8.7
|
|
|
30,991
|
|
|
6.5
|
|
||
Distribution
|
25,680
|
|
|
4.9
|
|
|
7.9
|
|
|
25,558
|
|
|
5.4
|
|
||
Consumer Products and Retail
|
23,618
|
|
|
4.5
|
|
|
7.2
|
|
|
23,762
|
|
|
5.0
|
|
||
Consumer Services
|
22,630
|
|
|
4.3
|
|
|
6.9
|
|
|
22,274
|
|
|
4.7
|
|
||
Transportation & Logistics
|
17,869
|
|
|
3.4
|
|
|
5.5
|
|
|
17,074
|
|
|
3.6
|
|
||
Energy Services (Midstream)
|
9,783
|
|
|
1.9
|
|
|
3.0
|
|
|
9,747
|
|
|
2.0
|
|
||
Financial Services
|
9,707
|
|
|
1.8
|
|
|
3.0
|
|
|
9,596
|
|
|
2.0
|
|
||
Commodities & Mining
|
8,511
|
|
|
1.6
|
|
|
2.6
|
|
|
8,383
|
|
|
1.8
|
|
||
Restaurants
|
7,912
|
|
|
1.5
|
|
|
2.4
|
|
|
7,978
|
|
|
1.7
|
|
||
Software & IT Services
|
6,128
|
|
|
1.2
|
|
|
1.9
|
|
|
6,277
|
|
|
1.3
|
|
||
Telecommunications
|
5,056
|
|
|
1.0
|
|
|
1.5
|
|
|
7,876
|
|
|
1.6
|
|
||
Paper & Forest Products
|
2,883
|
|
|
0.6
|
|
|
0.9
|
|
|
2,957
|
|
|
0.6
|
|
||
|
$
|
524,071
|
|
|
100.0
|
%
|
|
160.7
|
%
|
|
$
|
478,055
|
|
|
100.0
|
%
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|||||||
|
|
|
Total Portfolio
|
|
Percentage of
|
|
|
|
Total Portfolio
|
|||||||
|
Fair Value
|
|
at Fair Value
|
|
Net Assets
|
|
Cost
|
|
at Cost
|
|||||||
|
(dollars in thousands)
|
|||||||||||||||
March 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||||||
I-45 SLF LLC
1
|
$
|
67,113
|
|
|
17.1
|
%
|
|
21.8
|
%
|
|
$
|
64,800
|
|
|
19.3
|
%
|
Media, Marketing, & Entertainment
|
46,697
|
|
|
11.9
|
|
|
15.1
|
|
|
43,700
|
|
|
13.0
|
|
||
Industrial Products
|
43,122
|
|
|
11.0
|
|
|
14.0
|
|
|
5,415
|
|
|
1.6
|
|
||
Business Services
|
34,846
|
|
|
8.9
|
|
|
11.3
|
|
|
34,268
|
|
|
10.2
|
|
||
Energy Services (Upstream)
|
27,919
|
|
|
7.1
|
|
|
9.1
|
|
|
14,130
|
|
|
4.2
|
|
||
Distribution
|
26,713
|
|
|
6.8
|
|
|
8.7
|
|
|
27,002
|
|
|
8.1
|
|
||
Consumer Products and Retail
|
24,570
|
|
|
6.2
|
|
|
7.9
|
|
|
25,086
|
|
|
7.5
|
|
||
Environmental Services
|
21,160
|
|
|
5.4
|
|
|
6.9
|
|
|
21,410
|
|
|
6.4
|
|
||
Healthcare Services
|
16,751
|
|
|
4.3
|
|
|
5.4
|
|
|
16,448
|
|
|
4.9
|
|
||
Financial Services
|
12,701
|
|
|
3.2
|
|
|
4.1
|
|
|
12,216
|
|
|
3.6
|
|
||
Healthcare Products
|
12,353
|
|
|
3.1
|
|
|
4.0
|
|
|
12,162
|
|
|
3.6
|
|
||
Transportation & Logistics
|
12,284
|
|
|
3.1
|
|
|
4.0
|
|
|
12,275
|
|
|
3.7
|
|
||
Industrial Services
|
10,012
|
|
|
2.5
|
|
|
3.2
|
|
|
9,721
|
|
|
2.9
|
|
||
Food, Agriculture & Beverage
|
9,438
|
|
|
2.4
|
|
|
3.1
|
|
|
9,507
|
|
|
2.8
|
|
||
Telecommunications
|
8,295
|
|
|
2.1
|
|
|
2.7
|
|
|
8,180
|
|
|
2.4
|
|
||
Software & IT Services
|
6,285
|
|
|
1.6
|
|
|
2.0
|
|
|
6,273
|
|
|
1.9
|
|
||
Consumer Services
|
5,000
|
|
|
1.3
|
|
|
1.6
|
|
|
4,968
|
|
|
1.5
|
|
||
Restaurants
|
4,836
|
|
|
1.2
|
|
|
1.6
|
|
|
4,886
|
|
|
1.5
|
|
||
Paper & Forest Products
|
3,000
|
|
|
0.8
|
|
|
1.0
|
|
|
2,950
|
|
|
0.9
|
|
||
|
$
|
393,095
|
|
|
100.0
|
%
|
|
127.5
|
%
|
|
$
|
335,397
|
|
|
100.0
|
%
|
1
|
I-45 SLF LLC is a joint venture between CSWC and Main Street Capital. This entity primarily invests in syndicated senior secured loans to the UMM. The portfolio companies held by I-45 SLF LLC represent a diverse set of industry classifications, which are similar to those in which CSWC invests directly. See Note 17 for further discussion.
|
|
|
|
Percentage of
|
|
|
|
|
|
Percentage of
|
|||||||
|
|
|
Total Portfolio
|
|
Percentage of
|
|
|
|
Total Portfolio
|
|||||||
|
Fair Value
|
|
at Fair Value
|
|
Net Assets
|
|
Cost
|
|
at Cost
|
|||||||
|
(dollars in thousands)
|
|||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|||||||
Southwest
|
$
|
139,306
|
|
|
26.6
|
%
|
|
42.7
|
%
|
|
$
|
89,399
|
|
|
18.7
|
%
|
Northeast
|
125,657
|
|
|
24.0
|
|
|
38.5
|
|
|
122,404
|
|
|
25.6
|
|
||
Southeast
|
119,280
|
|
|
22.8
|
|
|
36.6
|
|
|
120,889
|
|
|
25.3
|
|
||
I-45 SLF LLC
1
|
65,743
|
|
|
12.5
|
|
|
20.2
|
|
|
68,000
|
|
|
14.2
|
|
||
West
|
38,455
|
|
|
7.3
|
|
|
11.8
|
|
|
41,647
|
|
|
8.7
|
|
||
Midwest
|
35,630
|
|
|
6.8
|
|
|
10.9
|
|
|
35,716
|
|
|
7.5
|
|
||
|
$
|
524,071
|
|
|
100.0
|
%
|
|
160.7
|
%
|
|
$
|
478,055
|
|
|
100.0
|
%
|
March 31, 2018:
|
|
|
|
|
|
|
|
|
|
|||||||
Southwest
|
$
|
131,753
|
|
|
33.5
|
%
|
|
42.7
|
%
|
|
$
|
79,713
|
|
|
23.8
|
%
|
Southeast
|
84,969
|
|
|
21.6
|
|
|
27.6
|
|
|
84,290
|
|
|
25.1
|
|
||
Northeast
|
72,205
|
|
|
18.4
|
|
|
23.4
|
|
|
69,739
|
|
|
20.8
|
|
||
I-45 SLF LLC
1
|
67,113
|
|
|
17.1
|
|
|
21.8
|
|
|
64,800
|
|
|
19.3
|
|
||
West
|
23,554
|
|
|
6.0
|
|
|
7.6
|
|
|
23,425
|
|
|
7.0
|
|
||
Midwest
|
13,501
|
|
|
3.4
|
|
|
4.4
|
|
|
13,430
|
|
|
4.0
|
|
||
|
$
|
393,095
|
|
|
100.0
|
%
|
|
127.5
|
%
|
|
$
|
335,397
|
|
|
100.0
|
%
|
1
|
I-45 SLF LLC is a joint venture between CSWC and Main Street Capital. This entity primarily invests in syndicated senior secured loans to the UMM. The portfolio companies held by I-45 SLF LLC represent a diverse set of industry classifications, which are similar to those in which CSWC invests directly. See Note 17 for further discussion.
|
•
|
Level 1:
Investments whose values are based on unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2:
Investments whose values are based on quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3:
Investments whose values are based on unobservable inputs that are significant to the overall fair value measurement.
|
•
|
Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;
|
•
|
Current and projected financial condition of the portfolio company;
|
•
|
Current and projected ability of the portfolio company to service its debt obligations;
|
•
|
Type and amount of collateral, if any, underlying the investment;
|
•
|
Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;
|
•
|
Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);
|
•
|
Indicative dealer quotations from brokers, banks, and other market participants;
|
•
|
Market yields on other securities of similar risk;
|
•
|
Pending debt or capital restructuring of the portfolio company;
|
•
|
Projected operating results of the portfolio company;
|
•
|
Current information regarding any offers to purchase the investment;
|
•
|
Current ability of the portfolio company to raise any additional financing as needed;
|
•
|
Changes in the economic environment which may have a material impact on the operating results of the portfolio company;
|
•
|
Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;
|
•
|
Qualitative assessment of key management;
|
•
|
Contractual rights, obligations or restrictions associated with the investment; and
|
•
|
Other factors deemed relevant.
|
|
|
|
Fair Value Measurements
|
||||||||||
|
|
|
at March 31, 2019 Using
|
||||||||||
|
|
|
Quoted Prices in
|
|
Significant
|
|
|
||||||
|
|
|
Active Markets
|
|
Other
|
|
Significant
|
||||||
|
|
|
for Identical
|
|
Observable
|
|
Unobservable
|
||||||
|
|
|
Assets
|
|
Inputs
|
|
Inputs
|
||||||
Asset Category
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
First lien loans
|
$
|
317,544
|
|
|
—
|
|
|
—
|
|
|
$
|
317,544
|
|
Second lien loans
|
35,896
|
|
|
—
|
|
|
—
|
|
|
35,896
|
|
||
Subordinated debt
|
14,287
|
|
|
—
|
|
|
—
|
|
|
14,287
|
|
||
Preferred equity
|
17,936
|
|
|
—
|
|
|
—
|
|
|
17,936
|
|
||
Common equity & warrants
|
72,665
|
|
|
—
|
|
|
—
|
|
|
72,665
|
|
||
Investments measured at net asset value
1
|
65,743
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total Investments
|
$
|
524,071
|
|
|
—
|
|
|
—
|
|
|
$
|
458,328
|
|
|
|
|
Fair Value Measurements
|
||||||||||
|
|
|
at March 31, 2018 Using
|
||||||||||
|
|
|
Quoted Prices in
|
|
Significant
|
|
|
||||||
|
|
|
Active Markets
|
|
Other
|
|
Significant
|
||||||
|
|
|
for Identical
|
|
Observable
|
|
Unobservable
|
||||||
|
|
|
Assets
|
|
Inputs
|
|
Inputs
|
||||||
Asset Category
2
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||
First lien loans
|
$
|
197,110
|
|
|
—
|
|
|
—
|
|
|
$
|
197,110
|
|
Second lien loans
|
23,229
|
|
|
—
|
|
|
—
|
|
|
23,229
|
|
||
Subordinated debt
|
18,783
|
|
|
—
|
|
|
—
|
|
|
18,783
|
|
||
Preferred equity
|
36,545
|
|
|
—
|
|
|
—
|
|
|
36,545
|
|
||
Common equity & warrants
|
50,315
|
|
|
—
|
|
|
—
|
|
|
50,315
|
|
||
Investments measured at net asset value
1
|
67,113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total Investments
|
$
|
393,095
|
|
|
—
|
|
|
—
|
|
|
$
|
325,982
|
|
1
|
Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Consolidated Statements of Assets and Liabilities. For the investment valued at net asset value per share at March 31,
2019
and
2018
, the redemption restrictions dictate that we cannot withdraw our membership interest without unanimous approval. We are permitted to sell or transfer our membership interest and must deliver written notice of such transfer to the other member no later than 60 business days prior to the sale or transfer.
|
|
|
|
Fair Value at
|
|
Significant
|
|
|
|
|
||
|
Valuation
|
|
March 31, 2019
|
|
Unobservable
|
|
|
|
Weighted
|
||
Type
|
Technique
|
|
(in thousands)
|
|
Inputs
|
|
Range
|
|
Average
|
||
First lien loans
|
Income Approach
|
|
$
|
248,404
|
|
|
Discount Rate
|
|
9.6% - 20.5%
|
|
12.1%
|
|
|
|
|
|
Third Party Broker Quote
|
|
65.6 - 97.5
|
|
90.1
|
||
|
Market Approach
|
|
69,140
|
|
|
Cost
|
|
97.0 - 99.0
|
|
97.7
|
|
|
|
|
|
|
Exit Value
|
|
100.0 - 102.0
|
|
101.4
|
||
Second lien loans
|
Income Approach
|
|
35,896
|
|
|
Discount Rate
|
|
11.5% - 41.9%
|
|
13.9%
|
|
|
|
|
|
|
Third Party Broker Quote
|
|
55.0
|
|
55.0
|
||
|
|
|
|
|
|
|
|
|
|
||
Subordinated debt
|
Income Approach
|
|
14,287
|
|
|
Discount Rate
|
|
12.6% - 15.0%
|
|
13.4%
|
|
Preferred equity
|
Enterprise Value Waterfall Approach
|
|
17,936
|
|
|
EBITDA Multiple
|
|
7.7x - 10.2x
|
|
9.5x
|
|
|
|
|
|
|
Discount Rate
|
|
15.5% - 19.3%
|
|
17.8%
|
||
Common equity & warrants
|
Enterprise Value Waterfall Approach
|
|
71,665
|
|
|
EBITDA Multiple
|
|
4.6x - 10.7x
|
|
8.8x
|
|
|
|
|
|
|
Discount Rate
|
|
13.9% - 21.0%
|
|
18.4%
|
||
|
Market Approach
|
|
1,000
|
|
|
Cost
|
|
100.0
|
|
100.0
|
|
Total Level 3 Investments
|
|
|
$
|
458,328
|
|
|
|
|
|
|
|
|
|
|
Fair Value at
|
|
Significant
|
|
|
|
|
||
|
Valuation
|
|
March 31, 2018
|
|
Unobservable
|
|
|
|
Weighted
|
||
Type
|
Technique
|
|
(in thousands)
|
|
Inputs
|
|
Range
|
|
Average
|
||
First lien loans
|
Income Approach
|
|
$
|
181,595
|
|
|
Discount Rate
|
|
9.5% - 17.0%
|
|
12.8%
|
|
|
|
|
|
Third Party Broker Quote
|
|
98.2 - 101.8
|
|
100.3
|
||
|
Market Approach
|
|
15,515
|
|
|
Cost
|
|
98.0 - 98.1
|
|
98.0
|
|
Second lien loans
|
Income Approach
|
|
18,229
|
|
|
Discount Rate
|
|
11.6% - 11.6%
|
|
11.6%
|
|
|
|
|
|
|
Third Party Broker Quote
|
|
93.5 - 100.0
|
|
96.0
|
||
|
Market Approach
|
|
5,000
|
|
|
Cost
|
|
100.0
|
|
100.0
|
|
Subordinated debt
|
Income Approach
|
|
18,783
|
|
|
Discount Rate
|
|
12.4% - 13.8%
|
|
12.9%
|
|
Preferred equity
|
Enterprise Value Waterfall Approach
|
|
36,545
|
|
|
EBITDA Multiple
|
|
5.1x - 9.3x
|
|
6.9x
|
|
|
|
|
|
|
Discount Rate
|
|
15.0% - 32.1%
|
|
20.2%
|
||
Common equity & warrants
|
Enterprise Value Waterfall Approach
|
|
47,123
|
|
|
EBITDA Multiple
|
|
6.0x - 8.4x
|
|
8.1x
|
|
|
|
|
|
|
Discount Rate
|
|
15.7% - 21.6%
|
|
20.6%
|
||
|
Market Approach
|
|
3,192
|
|
|
Cost
|
|
100.0
|
|
100.0
|
|
Total Level 3 Investments
|
|
|
$
|
325,982
|
|
|
|
|
|
|
|
|
Fair Value 3/31/2018
|
|
Realized & Unrealized Gains (Losses)
|
|
Purchases of Investments
1
|
|
Repayments
|
|
PIK Interest Capitalized
|
|
Divestitures
|
|
Conversion of Security from Debt to Equity
|
|
Fair Value 3/31/2019
|
|
YTD Unrealized Appreciation (Depreciation) on Investments held at period end
|
||||||||||||||||||
First lien loans
|
$
|
197,110
|
|
|
$
|
(3,640
|
)
|
|
$
|
186,601
|
|
|
$
|
(33,226
|
)
|
|
$
|
43
|
|
|
$
|
(28,805
|
)
|
|
(539
|
)
|
|
$
|
317,544
|
|
|
$
|
(3,675
|
)
|
|
Second lien loans
|
23,229
|
|
|
(226
|
)
|
|
21,274
|
|
|
(8,562
|
)
|
|
181
|
|
|
—
|
|
|
—
|
|
|
35,896
|
|
|
(228
|
)
|
|||||||||
Subordinated debt
|
18,783
|
|
|
(2
|
)
|
|
60
|
|
|
(4,600
|
)
|
|
46
|
|
|
—
|
|
|
—
|
|
|
14,287
|
|
|
12
|
|
|||||||||
Preferred equity
|
38,541
|
|
|
10,997
|
|
|
2,657
|
|
|
—
|
|
|
231
|
|
|
(34,490
|
)
|
|
—
|
|
|
17,936
|
|
|
4,456
|
|
|||||||||
Common equity & warrants
|
48,319
|
|
|
6,611
|
|
|
17,196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
539
|
|
|
72,665
|
|
|
6,612
|
|
|||||||||
Total Investments
|
$
|
325,982
|
|
|
$
|
13,740
|
|
|
$
|
227,788
|
|
|
$
|
(46,388
|
)
|
|
$
|
501
|
|
|
$
|
(63,295
|
)
|
|
—
|
|
|
$
|
458,328
|
|
|
$
|
7,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Fair Value 3/31/2017
|
|
Realized & Unrealized Gains (Losses)
|
|
Purchases of Investments
1
|
|
Repayments
|
|
PIK Interest Capitalized
|
|
Divestitures
|
|
Conversion of Security from Debt to Equity
|
|
Fair Value 3/31/2018
|
|
YTD Unrealized Appreciation (Depreciation) on Investments held at period end
|
||||||||||||||||||
First lien loans
|
$
|
107,817
|
|
|
$
|
2,086
|
|
|
$
|
128,894
|
|
|
$
|
(41,687
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197,110
|
|
|
$
|
1,716
|
|
Second lien loans
|
47,176
|
|
|
367
|
|
|
9,865
|
|
|
(34,179
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,229
|
|
|
(33
|
)
|
|||||||||
Subordinated debt
|
12,453
|
|
|
(39
|
)
|
|
14,458
|
|
|
(8,100
|
)
|
|
11
|
|
|
—
|
|
|
—
|
|
|
18,783
|
|
|
(154
|
)
|
|||||||||
Preferred equity
|
19,343
|
|
|
16,319
|
|
|
588
|
|
|
—
|
|
|
295
|
|
|
—
|
|
|
—
|
|
|
36,545
|
|
|
16,318
|
|
|||||||||
Common equity & warrants
|
36,696
|
|
|
4,401
|
|
|
9,233
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
50,315
|
|
|
4,386
|
|
|||||||||
Total Investments
|
$
|
223,485
|
|
|
$
|
23,134
|
|
|
$
|
163,038
|
|
|
$
|
(83,966
|
)
|
|
$
|
306
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
325,982
|
|
|
$
|
22,233
|
|
1
|
Includes purchases of new investments, as well as discount accretion on existing investments.
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
Credit Facility
|
$
|
141,000
|
|
|
$
|
40,000
|
|
|
|
|
|
||||
December 2022 Notes
|
77,136
|
|
|
57,500
|
|
||
Less: Unamortized debt issuance costs and debt discount
|
(2,037
|
)
|
|
(2,195
|
)
|
||
Total Notes
|
75,099
|
|
|
55,305
|
|
||
|
|
|
|
||||
Total Borrowings
|
$
|
216,099
|
|
|
$
|
95,305
|
|
|
Years Ending March 31,
|
|
|
|
|
||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Credit Facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
141,000
|
|
|
$
|
—
|
|
|
$
|
141,000
|
|
December 2022 Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
77,136
|
|
|
—
|
|
|
—
|
|
|
77,136
|
|
|||||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77,136
|
|
|
$
|
141,000
|
|
|
$
|
—
|
|
|
$
|
218,136
|
|
|
Year ended
|
|
Year ended
|
||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Additional capital
|
$
|
(1,798
|
)
|
|
$
|
(552
|
)
|
Total distributable earnings
|
$
|
1,798
|
|
|
$
|
552
|
|
|
Twelve Months Ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Ordinary income
|
$
|
11,723
|
|
|
$
|
13,149
|
|
Distributions of long term capital gains
|
21,625
|
|
|
5,101
|
|
||
Distributions on tax basis
1
|
$
|
33,348
|
|
|
$
|
18,250
|
|
1
|
Includes only those distributions which reduce estimated taxable income.
|
|
Years ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Reconciliation of RIC Taxable Income
1
|
|
|
|
|
|
||||||
Net increase in net assets resulting from operations
|
$
|
33,058
|
|
|
$
|
39,307
|
|
|
$
|
23,474
|
|
Net change in unrealized (appreciation) depreciation on investments
|
11,506
|
|
|
(21,492
|
)
|
|
(7,690
|
)
|
|||
(Expense/loss) income/gain recognized for tax on pass-through entities
|
223
|
|
|
(403
|
)
|
|
986
|
|
|||
Gain (loss) recognized for tax on dispositions
|
761
|
|
|
643
|
|
|
1,248
|
|
|||
Net operating loss - management company and taxable subsidiary
|
(256
|
)
|
|
316
|
|
|
1,323
|
|
|||
Non-deductible tax expense
|
881
|
|
|
228
|
|
|
588
|
|
|||
Other book tax differences
|
98
|
|
|
(62
|
)
|
|
223
|
|
|||
Estimated taxable income (loss) before deductions for distributions
|
$
|
46,271
|
|
|
$
|
18,537
|
|
|
$
|
20,152
|
|
Distributions
2
:
|
|
|
|
|
|
||||||
Ordinary
|
$
|
15,468
|
|
|
$
|
7,020
|
|
|
$
|
932
|
|
Capital gains
|
21,625
|
|
|
930
|
|
|
4,367
|
|
|||
Deemed distributions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Distributions payable
2
|
—
|
|
|
4,421
|
|
|
7,072
|
|
|||
Estimated annual RIC undistributed taxable income
|
$
|
9,178
|
|
|
$
|
6,166
|
|
|
$
|
7,781
|
|
1
|
The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate.
|
2
|
Includes only those distributions which reduce estimated taxable income.
|
1
|
The calculation of taxable income for each period is an estimate and will not be finally determined until the Company files its tax return each year. Final taxable income may be different than this estimate.
|
2
|
Includes only those distributions which reduce estimated taxable income.
|
|
Years ended
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax asset:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
132
|
|
|
$
|
487
|
|
Compensation
|
1,020
|
|
|
924
|
|
||
Pension liability
|
596
|
|
|
617
|
|
||
Net unrealized depreciation on investments
|
27
|
|
|
—
|
|
||
Other
|
32
|
|
|
22
|
|
||
Total deferred tax asset
|
1,807
|
|
|
2,050
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Net unrealized appreciation on investments
|
—
|
|
|
(190
|
)
|
||
Total deferred tax liabilities
|
—
|
|
|
(190
|
)
|
||
Total net deferred tax assets
|
$
|
1,807
|
|
|
$
|
1,860
|
|
|
Years ended March 31,
|
||||||||||
Components of Income Tax Expense
|
2019
|
|
2018
|
|
2017
|
||||||
Statutory federal income tax
|
$
|
73
|
|
|
$
|
(91
|
)
|
|
$
|
(175
|
)
|
162(m) limitation
|
476
|
|
|
710
|
|
|
625
|
|
|||
Excise tax
|
880
|
|
|
228
|
|
|
588
|
|
|||
Valuation allowance
|
—
|
|
|
(1,324
|
)
|
|
459
|
|
|||
Tax related to Taxable Subsidiary
|
(109
|
)
|
|
—
|
|
|
173
|
|
|||
Prior year deferred tax true-up
|
—
|
|
|
(164
|
)
|
|
67
|
|
|||
Compensation benefits
|
(280
|
)
|
|
(426
|
)
|
|
—
|
|
|||
Tax Reform
|
—
|
|
|
1,246
|
|
|
—
|
|
|||
Other
|
8
|
|
|
16
|
|
|
42
|
|
|||
Total income tax expense
|
$
|
1,048
|
|
|
$
|
195
|
|
|
$
|
1,779
|
|
|
Year Ended March 31,
|
||||||
Repurchases of Common Stock
|
2019
|
|
2018
|
||||
Number of shares repurchased
|
10,452
|
|
|
35,911
|
|
||
Cost of shares repurchased, including commissions
|
$
|
185,217
|
|
|
$
|
587,772
|
|
Weighted average price per share
|
$
|
17.72
|
|
|
$
|
16.37
|
|
Net asset value per share at quarter end prior to repurchase
|
$
|
18.84
|
|
|
$
|
18.44
|
|
Weighted average discount to net asset value at quarter end prior to repurchase
|
5.9
|
%
|
|
11.2
|
%
|
Restricted stock available for issuance as of March 31, 2018
|
9,777
|
|
Additional restricted stock approved under the plan
|
850,000
|
|
Restricted stock granted during the year ended March 31, 2019
|
(204,400
|
)
|
Restricted stock forfeited during the year ended March 31, 2019
|
2,250
|
|
Restricted stock available for issuance as of March 31, 2019
|
657,627
|
|
|
|
|
Weighted Average
|
|
Weighted Average
|
||||
|
|
|
Fair Value Per
|
|
Remaining Vesting
|
||||
Restricted Stock Awards
|
Number of Shares
|
|
Share at grant date
|
|
Term (in Years)
|
||||
Unvested at March 31, 2017
|
294,043
|
|
|
$
|
14.99
|
|
|
3.1
|
|
Granted
|
185,725
|
|
|
16.79
|
|
|
3.6
|
|
|
Vested
|
(102,605
|
)
|
|
15.25
|
|
|
—
|
|
|
Forfeited
|
(5,000
|
)
|
|
14.48
|
|
|
—
|
|
|
Unvested at March 31, 2018
|
372,163
|
|
|
$
|
15.82
|
|
|
2.9
|
|
Granted
|
204,400
|
|
|
19.19
|
|
|
3.6
|
|
|
Vested
|
(120,286
|
)
|
|
15.86
|
|
|
—
|
|
|
Forfeited
|
(2,250
|
)
|
|
15.60
|
|
|
—
|
|
|
Unvested at March 31, 2019
|
454,027
|
|
|
$
|
17.33
|
|
|
2.8
|
|
|
|
|
|
|
Weighted
|
|
|
|||||
|
|
|
|
|
Average
|
|
Aggregate
|
|||||
|
|
|
|
|
Exercise
|
|
Intrinsic
|
|||||
|
Number of Shares
|
|
|
|
Price
|
|
Value
|
|||||
2009 Plan
|
|
|
|
|
|
|
|
|
|
|||
Balance at March 31, 2016
|
362,513
|
|
|
|
|
$ 11.21*
|
|
|
|
|
||
Granted
|
—
|
|
|
|
|
—
|
|
|
|
|
||
Exercised
|
(131,252
|
)
|
|
|
|
11.48
|
|
|
$
|
479,177
|
|
|
Canceled/Forfeited
|
(24,897
|
)
|
|
|
|
10.56
|
|
|
|
|||
Balance at March 31, 2017
|
206,364
|
|
|
|
|
11.12
|
|
|
|
|||
Granted
|
—
|
|
|
|
|
—
|
|
|
|
|||
Exercised
|
(10,756
|
)
|
|
|
|
11.66
|
|
|
$
|
58,081
|
|
|
Canceled/Forfeited
|
—
|
|
|
|
|
—
|
|
|
|
|||
Balance at March 31, 2018
|
195,608
|
|
|
|
|
11.09
|
|
|
|
|||
Granted
|
—
|
|
|
|
|
—
|
|
|
|
|||
Exercised
|
(195,608
|
)
|
|
|
|
11.09
|
|
|
$
|
1,563,905
|
|
|
Canceled/Forfeited
|
—
|
|
|
|
|
—
|
|
|
|
|||
Balance at March 31, 2019
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Weighted
|
||||
|
|
|
|
|
Average
|
||||
|
|
|
Weighted
|
|
Remaining
|
||||
|
Number of
|
|
Average Grant
|
|
Vesting Term
|
||||
Individual Cash Incentive Awards
|
Shares
|
|
Price Per Share
|
|
(in Years)
|
||||
Unvested at March 31, 2018
|
48,000
|
|
|
$
|
47.03
|
|
|
0.6
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
Vested
|
(48,000)
|
|
|
47.03
|
|
|
—
|
|
|
Forfeited or expired
|
—
|
|
|
—
|
|
|
—
|
|
|
Unvested at March 31, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
Years ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net pension cost
|
|
|
|
|
|
|
|
|
|||
Interest cost on projected benefit obligation
|
$
|
113
|
|
|
$
|
116
|
|
|
$
|
125
|
|
Net amortization
|
46
|
|
|
48
|
|
|
47
|
|
|||
Net pension cost from restoration plan
|
$
|
159
|
|
|
$
|
164
|
|
|
$
|
172
|
|
|
Years ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
|||
Benefit obligation at beginning of year
|
$
|
2,937
|
|
|
$
|
3,020
|
|
|
$
|
3,061
|
|
Interest cost
|
113
|
|
|
116
|
|
|
125
|
|
|||
Actuarial loss
|
232
|
|
|
11
|
|
|
41
|
|
|||
Benefits paid
|
(209
|
)
|
|
(210
|
)
|
|
(207
|
)
|
|||
Benefit obligation at end of year
|
$
|
3,073
|
|
|
$
|
2,937
|
|
|
$
|
3,020
|
|
|
Years ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Amounts recognized in our Consolidated Statements of Assets and Liabilities
|
|
|
|
|
|
||
Projected benefit obligation
|
$
|
(3,073
|
)
|
|
$
|
(2,937
|
)
|
Net actuarial loss recognized as a component of equity
|
1,000
|
|
|
813
|
|
||
Total
|
$
|
(2,073
|
)
|
|
$
|
(2,124
|
)
|
|
|
|
|
||||
Accumulated benefit obligation
|
$
|
(3,073
|
)
|
|
$
|
(2,937
|
)
|
|
Years ended March 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Discount rate
|
3.75
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
Years ended March 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Discount rate
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025-2029
|
||||||||||||
Restoration Plan
|
$
|
223
|
|
|
$
|
238
|
|
|
$
|
242
|
|
|
$
|
238
|
|
|
$
|
235
|
|
|
$
|
1,096
|
|
|
|
|
March 31,
|
|
March 31,
|
||||
|
|
|
2019
|
|
2018
|
||||
Portfolio Company
|
Investment Type
|
|
(amounts in thousands)
|
||||||
I-45 SLF LLC
|
Equity Investment
|
|
$
|
—
|
|
|
$
|
3,200
|
|
Adams Publishing Group, LLC
|
Delayed Draw Term Loan
|
|
1,731
|
|
|
—
|
|
||
American Nuts Operations LLC
|
Term Loan C
|
|
438
|
|
|
—
|
|
||
ASC Ortho Management Company, LLC
|
Revolving Loan
|
|
1,500
|
|
|
—
|
|
||
Clickbooth.com, LLC
|
Revolving Loan
|
|
2,000
|
|
|
2,000
|
|
||
Danforth Advisors, LLC
|
Revolving Loan
|
|
1,000
|
|
|
—
|
|
||
Dynamic Communities, LLC
|
Revolving Loan
|
|
500
|
|
|
—
|
|
||
Environmental Pest Service Management Company, LLC
|
Delayed Draw Term Loan
|
|
525
|
|
|
—
|
|
||
Fast Sandwich, LLC
|
Revolving Loan
|
|
4,150
|
|
|
—
|
|
||
ITA Holdings Group, LLC
|
Revolving Loan
|
|
1,000
|
|
|
2,000
|
|
||
JVMC Holdings Corp.
|
Delayed Draw Term Loan
|
|
848
|
|
|
—
|
|
||
LGM Pharma, LLC
|
Delayed Draw Term Loan
|
|
—
|
|
|
900
|
|
||
Prism Spectrum Holdings LLC
|
Revolving Loan
|
|
—
|
|
|
1,500
|
|
||
Roseland Management, LLC
|
Revolving Loan
|
|
2,000
|
|
|
—
|
|
||
Zenfolio Inc.
|
Revolving Loan
|
|
2,000
|
|
|
2,000
|
|
||
Total unused commitments to extend financing
|
|
|
$
|
17,692
|
|
|
$
|
11,600
|
|
Year ending March 31,
|
Rent Commitment
|
||
2020
|
$
|
257
|
|
2021
|
266
|
|
|
2022
|
248
|
|
|
2023
|
—
|
|
|
2024
|
—
|
|
|
Thereafter
|
—
|
|
|
Total
|
$
|
771
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|
||||||||||
2019
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Total
|
||||||||||
Net investment income
|
$
|
4,617
|
|
|
$
|
5,546
|
|
|
$
|
6,675
|
|
|
$
|
6,872
|
|
|
$
|
23,710
|
|
Net realized gain on investments
|
18,819
|
|
|
94
|
|
|
1,883
|
|
|
58
|
|
|
20,854
|
|
|||||
Net change in unrealized appreciation on investments, net of tax
|
(11,783
|
)
|
|
948
|
|
|
(4,238
|
)
|
|
3,567
|
|
|
(11,506
|
)
|
|||||
Net increase in net assets from operations
|
11,653
|
|
|
6,588
|
|
|
4,320
|
|
|
10,497
|
|
|
33,058
|
|
|||||
Net investment income per share
|
0.29
|
|
|
0.34
|
|
|
0.39
|
|
|
0.40
|
|
|
1.42
|
|
|||||
Net increase in net assets from operations per share
|
0.72
|
|
|
0.40
|
|
|
0.25
|
|
|
0.61
|
|
|
1.98
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|
||||||||||
2018
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Total
|
||||||||||
Net investment income
|
$
|
3,436
|
|
|
$
|
3,937
|
|
|
$
|
4,663
|
|
|
$
|
4,197
|
|
|
$
|
16,233
|
|
Net realized gain on investments
|
624
|
|
|
210
|
|
|
617
|
|
|
131
|
|
|
1,582
|
|
|||||
Net change in unrealized appreciation on investments, net of tax
|
1,384
|
|
|
4,496
|
|
|
4,963
|
|
|
10,649
|
|
|
21,492
|
|
|||||
Net increase in net assets from operations
|
5,444
|
|
|
8,643
|
|
|
10,243
|
|
|
14,977
|
|
|
39,307
|
|
|||||
Net investment income per share
|
0.21
|
|
|
0.25
|
|
|
0.29
|
|
|
0.26
|
|
|
1.01
|
|
|||||
Net increase in net assets from operations per share
|
0.34
|
|
|
0.54
|
|
|
0.64
|
|
|
0.93
|
|
|
2.45
|
|
|
Years Ended March 31,
|
||||||||||||||||||
Per Share Data:
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Investment income
1
|
$
|
3.10
|
|
|
$
|
2.18
|
|
|
$
|
1.48
|
|
|
$
|
0.58
|
|
|
$
|
0.64
|
|
Operating expenses
1
|
(1.62
|
)
|
|
(1.16
|
)
|
|
(0.87
|
)
|
|
(1.34
|
)
|
|
(0.78
|
)
|
|||||
Income taxes
1
|
(0.06
|
)
|
|
(0.01
|
)
|
|
(0.11
|
)
|
|
0.08
|
|
|
(0.02
|
)
|
|||||
Net investment income (loss)
1
|
1.42
|
|
|
1.01
|
|
|
0.50
|
|
|
(0.68
|
)
|
|
(0.16
|
)
|
|||||
Net realized gain (loss)
1
|
1.24
|
|
|
0.10
|
|
|
0.50
|
|
|
(0.88
|
)
|
|
7.06
|
|
|||||
Net change in unrealized appreciation on investments
1
|
(0.68
|
)
|
|
1.34
|
|
|
0.49
|
|
|
1.02
|
|
|
(6.96
|
)
|
|||||
Total increase (decrease) from investment operations
|
1.98
|
|
|
2.45
|
|
|
1.49
|
|
|
(0.54
|
)
|
|
(0.06
|
)
|
|||||
Dividends to shareholders
|
(2.27
|
)
|
|
(0.99
|
)
|
|
(0.79
|
)
|
|
(0.14
|
)
|
|
(0.20
|
)
|
|||||
Distribution from additional capital for spin-off
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.67
|
)
|
|
—
|
|
|||||
Spin-off Compensation Plan distribution, net of tax
|
—
|
|
|
(0.03
|
)
|
|
(0.08
|
)
|
|
(0.08
|
)
|
|
—
|
|
|||||
Decrease in unrealized appreciation due to distributions to CSWI
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.15
|
)
|
|
—
|
|
|||||
Exercise of employee stock options
2
|
(0.12
|
)
|
|
0.01
|
|
|
(0.09
|
)
|
|
0.03
|
|
|
(0.04
|
)
|
|||||
Forfeiture (issuance) of restricted stock
3
|
(0.23
|
)
|
|
(0.18
|
)
|
|
(0.15
|
)
|
|
(0.49
|
)
|
|
(0.40
|
)
|
|||||
Accretive (dilutive) effect of share issuances and repurchases
|
0.06
|
|
|
(0.04
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share based compensation expense
|
0.13
|
|
|
0.11
|
|
|
0.08
|
|
|
0.08
|
|
|
0.07
|
|
|||||
Common stock withheld for payroll taxes upon vesting of restricted stock
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net change in pension plan funded status
|
(0.01
|
)
|
|
(0.05
|
)
|
|
—
|
|
|
—
|
|
|
(0.05
|
)
|
|||||
Other
4
|
0.01
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Increase (decrease) in net asset value
|
(0.46
|
)
|
|
1.28
|
|
|
0.46
|
|
|
(31.96
|
)
|
|
(0.68
|
)
|
|||||
Net asset value
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of year
|
19.08
|
|
|
17.80
|
|
|
17.34
|
|
|
49.30
|
|
|
49.98
|
|
|||||
End of year
|
$
|
18.62
|
|
|
$
|
19.08
|
|
|
$
|
17.80
|
|
|
$
|
17.34
|
|
|
$
|
49.30
|
|
Ratios and Supplemental Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of operating expenses to average net assets
5
|
8.61
|
%
|
|
6.35
|
%
|
|
4.95
|
%
|
|
4.48
|
%
|
|
1.59
|
%
|
|||||
Ratio of net investment income to average net assets
|
7.53
|
%
|
|
5.51
|
%
|
|
2.83
|
%
|
|
(2.27
|
)%
|
|
(0.32
|
)%
|
|||||
Portfolio turnover
|
23.38
|
%
|
|
25.42
|
%
|
|
23.57
|
%
|
|
4.20
|
%
|
|
0.93
|
%
|
|||||
Total investment return
6
|
38.34
|
%
|
|
6.61
|
%
|
|
27.88
|
%
|
|
(20.71
|
)%
|
|
8.40
|
%
|
|||||
Total return based on change in NAV
7
|
9.49
|
%
|
|
12.75
|
%
|
|
7.21
|
%
|
|
(2.15
|
)%
|
|
(0.96
|
)%
|
|||||
Per share market value at end of year
|
$
|
21.04
|
|
|
$
|
17.02
|
|
|
$
|
16.91
|
|
|
$
|
13.87
|
|
|
$
|
46.42
|
|
Weighted-average basic shares outstanding
|
16,727
|
|
|
16,074
|
|
|
15,825
|
|
|
15,636
|
|
|
15,492
|
|
|||||
Weighted-average fully diluted shares outstanding
|
16,734
|
|
|
16,139
|
|
|
15,877
|
|
|
15,724
|
|
|
15,531
|
|
|||||
Common shares outstanding at end of year
|
17,503
|
|
|
16,162
|
|
|
16,011
|
|
|
15,726
|
|
|
15,565
|
|
1
|
Based on weighted-average basic shares outstanding for the period.
|
2
|
Net decrease is due to the exercise of employee stock options at prices less than beginning of period net asset value.
|
3
|
Reflects impact of the different share amounts as a result of issuance or forfeiture of restricted stock during the period.
|
4
|
Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end.
|
5
|
Amounts for fiscal 2015 are based on average net assets prior to the Share Distribution.
|
6
|
Total investment return based on purchase of stock at the current market price on the first day and a sale at the current market price on the last day of each period reported on the table and assumes reinvestment of dividends at prices obtained by CSWC’s DRIP during the period. The return does not reflect any sales load that may be paid by an investor.
|
7
|
Total return based on change in NAV was calculated using the sum of ending NAV plus dividends to shareholders and other non-operating changes during the period, as divided by the beginning NAV.
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
Current Assets
|
$
|
8,489
|
|
|
$
|
8,391
|
|
Non-Current Assets
|
23,527
|
|
|
24,727
|
|
||
Current Liabilities
|
3,089
|
|
|
2,559
|
|
||
Non-Current Liabilities
|
1,627
|
|
|
2,228
|
|
|
Twelve Months Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
22,346
|
|
|
$
|
22,242
|
|
|
$
|
19,571
|
|
Income from continuing operations
|
2,124
|
|
|
2,673
|
|
|
1,100
|
|
|||
Net income
|
2,124
|
|
|
2,673
|
|
|
1,100
|
|
Portfolio Company
|
Industry
|
|
Investment Type
|
|
Maturity Date
|
|
Current Interest Rate
1
|
|
Principal
|
|
Cost
|
|
Fair Value
2
|
||||||
AAC Holdings, Inc.
|
Healthcare services
|
|
First Lien
|
|
6/30/2023
|
|
L+ 6.75%
(Floor 1.00%), 4.00% PIK |
|
$
|
7,375,229
|
|
|
$
|
7,253,490
|
|
|
$
|
6,822,087
|
|
|
|
|
First Lien
|
|
3/31/2020
|
|
L+11.00%
(Floor 1.00%) |
|
949,844
|
|
|
940,346
|
|
|
959,343
|
|
|||
Allen Media, LLC
|
Media, marketing & entertainment
|
|
First Lien
|
|
8/30/2023
|
|
L+6.50%
(Floor 1.00%) |
|
5,642,857
|
|
|
5,496,176
|
|
|
5,480,625
|
|
|||
American Scaffold Holdings, Inc.
|
Aerospace & defense
|
|
First Lien
|
|
3/31/2022
|
|
L+6.50%
(Floor 1.00%) |
|
2,625,000
|
|
|
2,604,634
|
|
|
2,611,875
|
|
|||
American Teleconferencing Services, Ltd.
|
Telecommunications
|
|
First Lien
|
|
12/8/2021
|
|
L+6.50%
(Floor 1.00%) |
|
6,881,388
|
|
|
6,641,473
|
|
|
4,515,911
|
|
|||
ATI Investment Sub, Inc.
|
Technology products & components
|
|
First Lien
|
|
6/22/2021
|
|
L+7.25%
(Floor 1.00%) |
|
1,817,558
|
|
|
1,795,449
|
|
|
1,691,420
|
|
|||
ATX Canada Acquisitionco Inc.
|
Technology products & components
|
|
First Lien
|
|
6/11/2021
|
|
L+6.00%
(Floor 1.00%) |
|
4,688,923
|
|
|
4,665,710
|
|
|
4,454,477
|
|
|||
California Pizza Kitchen, Inc.
|
Restaurants
|
|
First Lien
|
|
8/23/2022
|
|
L+6.00%
(Floor 1.00%) |
|
6,829,887
|
|
|
6,802,221
|
|
|
6,616,487
|
|
|||
Chloe Ox Parent, LLC (Censeo Health)
|
Healthcare services
|
|
First Lien
|
|
12/23/2024
|
|
L+4.50%
(Floor 1.00%) |
|
5,148,000
|
|
|
5,105,429
|
|
|
5,148,000
|
|
|||
CMN.com, LLC
|
Consumer services
|
|
First Lien
|
|
11/3/2021
|
|
L+6.00%
(Floor 1.00%) |
|
9,431,480
|
|
|
9,347,289
|
|
|
9,431,480
|
|
|||
Digital River, Inc.
|
Software & IT services
|
|
First Lien
|
|
2/12/2021
|
|
L+6.50%
(Floor 1.00%) |
|
8,002,967
|
|
|
7,997,848
|
|
|
7,802,893
|
|
|||
Geo Parent Corporation
|
Building & infrastructure products
|
|
First Lien
|
|
12/19/2025
|
|
L+5.50%
|
|
5,000,000
|
|
|
4,951,736
|
|
|
4,987,500
|
|
|||
Go Wireless Holdings, Inc.
|
Consumer products & retail
|
|
First Lien
|
|
12/31/2024
|
|
L+6.50%
(Floor 1.00%) |
|
6,562,500
|
|
|
6,508,367
|
|
|
6,439,453
|
|
|||
Hunter Defense Technologies, Inc.
|
Aerospace & defense
|
|
First Lien
|
|
3/29/2023
|
|
L+7.00%
(Floor 1.00%) |
|
6,256,250
|
|
|
6,149,119
|
|
|
6,256,250
|
|
|||
iEnergizer Limited
|
Business services
|
|
First Lien
|
|
5/1/2019
|
|
L+6.00%
(Floor 1.25%) |
|
7,307,444
|
|
|
7,300,086
|
|
|
7,307,444
|
|
|||
Imagine! Print Solutions, LLC
|
Media, marketing & entertainment
|
|
Second Lien
|
|
6/21/2023
|
|
L+8.75%
(Floor 1.00%) |
|
3,000,000
|
|
|
2,968,111
|
|
|
2,700,000
|
|
|||
InfoGroup Inc.
|
Software & IT services
|
|
First Lien
|
|
4/3/2023
|
|
L+5.00%
(Floor 1.50%) |
|
2,940,000
|
|
|
2,920,233
|
|
|
2,892,225
|
|
Portfolio Company
|
Industry
|
|
Investment Type
|
|
Maturity Date
|
|
Current Interest Rate
1
|
|
Principal
|
|
Cost
|
|
Fair Value
2
|
||||||
Integro Parent Inc.
|
Business services
|
|
First Lien
|
|
10/28/2022
|
|
L+5.75%
(Floor 1.00%) |
|
4,838,924
|
|
|
4,746,329
|
|
|
4,838,924
|
|
|||
Intermedia Holdings, Inc.
|
Software & IT services
|
|
First Lien
|
|
7/21/2025
|
|
L+6.00%
(Floor 1.00%) |
|
3,847,499
|
|
|
3,812,532
|
|
|
3,857,137
|
|
|||
Isagenix International, LLC
|
Healthcare products
|
|
First Lien
|
|
6/16/2025
|
|
L+5.75%
(Floor 1.00%) |
|
2,062,501
|
|
|
2,044,219
|
|
|
1,851,095
|
|
|||
JAB Wireless, Inc.
|
Telecommunications
|
|
First Lien
|
|
5/2/2023
|
|
L+8.00%
(Floor 1.00%) |
|
7,920,000
|
|
|
7,855,060
|
|
|
7,920,000
|
|
|||
KORE Wireless Group Inc.
|
Telecommunications
|
|
First Lien
|
|
12/20/2024
|
|
L+5.50%
|
|
3,325,000
|
|
|
3,292,962
|
|
|
3,308,375
|
|
|||
Lift Brands, Inc.
|
Consumer services
|
|
First Lien
|
|
4/16/2023
|
|
L+7.00%
(Floor 1.00%) |
|
4,950,000
|
|
|
4,898,080
|
|
|
4,742,100
|
|
|||
LOGIX Holdings Company, LLC
|
Telecommunications
|
|
First Lien
|
|
12/23/2024
|
|
L+5.75%
(Floor 1.00%) |
|
6,016,500
|
|
|
5,972,674
|
|
|
6,061,624
|
|
|||
LSF9 Atlantis Holdings, LLC
|
Telecommunications
|
|
First Lien
|
|
5/1/2023
|
|
L+6.00%
(Floor 1.00%) |
|
6,693,750
|
|
|
6,647,863
|
|
|
6,246,106
|
|
|||
Lulu's Fashion Lounge, LLC
|
Consumer products & retail
|
|
First Lien
|
|
8/26/2022
|
|
L+7.00%
(Floor 1.00%) |
|
4,034,090
|
|
|
3,940,388
|
|
|
3,913,068
|
|
|||
Mills Fleet Farm Group LLC
|
Consumer products & retail
|
|
First Lien
|
|
10/24/2024
|
|
L+6.25%
(Floor 1.00%) |
|
4,987,500
|
|
|
4,894,986
|
|
|
4,987,500
|
|
|||
NBG Acquisition, Inc.
|
Wholesale
|
|
First Lien
|
|
4/26/2024
|
|
L+5.50%
(Floor 1.00%) |
|
2,887,500
|
|
|
2,845,678
|
|
|
2,844,188
|
|
|||
New Era Technology, Inc.
3
|
Software & IT services
|
|
First Lien
|
|
6/22/2023
|
|
L+6.50%
(Floor 1.00%) |
|
4,407,251
|
|
|
4,336,247
|
|
|
4,349,076
|
|
|||
|
|
|
Delayed Draw Term Loan
|
|
6/22/2023
|
|
L+6.50%
(Floor 1.00%) |
|
221,013
|
|
|
221,551
|
|
|
218,095
|
|
|||
New Media Holdings II LLC
|
Media, marketing & entertainment
|
|
First Lien
|
|
7/14/2022
|
|
L+6.25%
(Floor 1.00%) |
|
9,311,991
|
|
|
9,298,489
|
|
|
9,277,071
|
|
|||
Nomad Buyer, Inc.
|
Healthcare services
|
|
First Lien
|
|
8/1/2025
|
|
L+5.00%
|
|
2,985,000
|
|
|
2,821,449
|
|
|
2,906,644
|
|
|||
Novetta Solutions, LLC
|
Software & IT services
|
|
First Lien
|
|
10/17/2022
|
|
L+5.00%
(Floor 1.00%) |
|
4,946,868
|
|
|
4,830,392
|
|
|
4,857,206
|
|
|||
Peraton Corp. (fka MHVC Acquisition Corp.)
|
Aerospace & defense
|
|
First Lien
|
|
4/29/2024
|
|
L+5.25%
(Floor 1.00%) |
|
6,394,363
|
|
|
6,369,724
|
|
|
6,170,560
|
|
|||
Pet Supermarket, Inc.
|
Consumer products & retail
|
|
First Lien
|
|
7/5/2022
|
|
L+5.50%
(Floor 1.00%) |
|
4,859,916
|
|
|
4,833,425
|
|
|
4,762,717
|
|
|||
PT Network, LLC
4
|
Healthcare products
|
|
First Lien
|
|
11/30/2021
|
|
L+5.50%
(Floor 1.00%) |
|
4,369,332
|
|
|
4,369,332
|
|
|
4,125,086
|
|
|||
STL Parent Corp. (American Railcar)
|
Transportation & logistics
|
|
First Lien
|
|
12/5/2022
|
|
L+7.00%
|
|
3,975,000
|
|
|
3,846,305
|
|
|
3,855,750
|
|
|||
Tacala, LLC
|
Consumer products & retail
|
|
Second Lien
|
|
1/30/2026
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,986,989
|
|
|
2,994,750
|
|
|||
Teleguam Holdings, LLC
|
Telecommunications
|
|
Second Lien
|
|
7/25/2024
|
|
L+8.50%
(Floor 1.00%) |
|
2,000,000
|
|
|
1,969,537
|
|
|
2,012,500
|
|
Portfolio Company
|
Industry
|
|
Investment Type
|
|
Maturity Date
|
|
Current Interest Rate
1
|
|
Principal
|
|
Cost
|
|
Fair Value
2
|
||||||
Terra Millennium Corporation
|
Industrial products
|
|
First Lien
|
|
10/31/2022
|
|
L+6.75%
(Floor 1.00%) |
|
7,526,019
|
|
|
7,478,308
|
|
|
7,488,389
|
|
|||
TestEquity, LLC
|
Capital equipment
|
|
First Lien
|
|
4/28/2022
|
|
L+5.50%
(Floor 1.00%) |
|
4,803,961
|
|
|
4,773,980
|
|
|
4,765,530
|
|
|||
TGP Holdings III LLC
|
Durable consumer goods
|
|
Second Lien
|
|
9/25/2025
|
|
L+8.50%
(Floor 1.00%) |
|
2,500,000
|
|
|
2,469,503
|
|
|
2,400,000
|
|
|||
The Hoover Group, Inc.
|
Energy services (midstream)
|
|
First Lien
|
|
1/28/2021
|
|
L+7.25%
(Floor 1.00%) |
|
6,436,593
|
|
|
6,335,553
|
|
|
6,243,495
|
|
|||
Time Manufacturing Acquisition
|
Capital equipment
|
|
First Lien
|
|
2/3/2023
|
|
L+5.00%
(Floor 1.00%) |
|
4,910,038
|
|
|
4,879,401
|
|
|
4,928,450
|
|
|||
Turning Point Brands, Inc.
|
Consumer products & retail
|
|
Second Lien
|
|
3/7/2024
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,973,482
|
|
|
3,030,000
|
|
|||
UniTek Global Services, Inc.
|
Telecommunications
|
|
First Lien
|
|
8/20/2024
|
|
L+5.50%
(Floor 1.00%) |
|
2,985,000
|
|
|
2,959,958
|
|
|
2,958,135
|
|
|||
U.S. TelePacific Corp.
|
Telecommunications
|
|
First Lien
|
|
5/2/2023
|
|
L+5.00%
(Floor 1.00%) |
|
6,844,420
|
|
|
6,777,409
|
|
|
6,660,510
|
|
|||
VIP Cinema Holdings, Inc.
|
Hotel, gaming & leisure
|
|
First Lien
|
|
3/1/2023
|
|
L+6.00%
(Floor 1.00%) |
|
4,500,000
|
|
|
4,485,268
|
|
|
4,207,500
|
|
|||
Wireless Vision Holdings, LLC
4
|
Telecommunications
|
|
First Lien
|
|
9/29/2022
|
|
L+8.50%
(Floor 1.00%), 1.00% PIK |
|
7,865,229
|
|
|
7,753,144
|
|
|
7,778,711
|
|
|||
YS Garments, LLC
|
Consumer products & retail
|
|
First Lien
|
|
8/9/2024
|
|
L+6.00%
(Floor 1.00%) |
|
4,937,500
|
|
|
4,893,176
|
|
|
4,869,609
|
|
|||
Total Investments
|
|
|
|
|
|
|
|
|
|
|
$
|
242,061,110
|
|
|
$
|
237,547,371
|
|
1
|
Represents the interest rate as of
March 31, 2019
. All interest rates are payable in cash, unless otherwise noted. The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“Prime”) which reset daily, monthly, quarterly, or semiannually. For each the Company has provided the spread over LIBOR or Prime in effect at
March 31, 2019
. Certain investments are subject to a LIBOR or Prime interest rate floor.
|
2
|
Represents the fair value determined utilizing a similar process as the Company in accordance with ASC 820. However, the determination of such fair value is determined by the Board of Managers of the Joint Venture. It is not included in the Company’s Board of Directors’ valuation process described elsewhere herein.
|
3
|
The investment has approximately $0.3 million in an unfunded delayed draw commitment as of
March 31, 2019
.
|
4
|
The investment is structured as a first lien last out term loan and may earn interest in addition to the stated rate.
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
||||||
|
|
|
|
Investment
|
|
Maturity
|
|
Interest
|
|
|
|
|
|
|
||||||
Portfolio Company
|
|
Industry
|
|
Type
|
|
Date
|
|
Rate
1
|
|
Principal
|
|
Cost
|
|
Fair Value
2
|
||||||
AAC Holdings, Inc.
|
|
Healthcare services
|
|
First Lien
|
|
6/30/2023
|
|
L+ 6.75%
(Floor 1.00%) |
|
$
|
7,568,046
|
|
|
$
|
7,413,688
|
|
|
$
|
7,700,487
|
|
American Scaffold Holdings, Inc.
|
|
Aerospace & defense
|
|
First Lien
|
|
3/31/2022
|
|
L+6.50%
(Floor 1.00%) |
|
2,775,000
|
|
|
2,746,293
|
|
|
2,761,125
|
|
|||
American Teleconferencing Services, Ltd.
|
|
Telecommunications
|
|
First Lien
|
|
12/8/2021
|
|
L+6.50%
(Floor 1.00%) |
|
7,287,370
|
|
|
6,938,866
|
|
|
7,285,548
|
|
|||
Ansira Holdings, Inc.
3
|
|
Business services
|
|
First Lien
|
|
12/20/2022
|
|
L+6.50%
(Floor 1.00%) |
|
3,878,182
|
|
|
3,847,470
|
|
|
3,868,486
|
|
|||
|
|
|
|
Delayed Draw
|
|
12/20/2022
|
|
L+6.50%
(Floor 1.00%) |
|
315,316
|
|
|
310,799
|
|
|
314,527
|
|
|||
ATI Investment Sub, Inc.
|
|
Technology products & components
|
|
First Lien
|
|
6/22/2021
|
|
L+7.25%
(Floor 1.00%) |
|
3,557,227
|
|
|
3,503,722
|
|
|
3,552,781
|
|
|||
ATX Canada Acquisitionco Inc.
|
|
Technology products & components
|
|
First Lien
|
|
6/11/2021
|
|
L+6.00%
(Floor 1.00%) |
|
4,836,742
|
|
|
4,801,504
|
|
|
4,498,170
|
|
|||
Beaver-Visitec International Holdings, Inc.
|
|
Healthcare products
|
|
First Lien
|
|
8/21/2023
|
|
L+5.00%
(Floor 1.00%) |
|
4,925,000
|
|
|
4,886,584
|
|
|
4,949,625
|
|
|||
California Pizza Kitchen, Inc.
|
|
Restaurants
|
|
First Lien
|
|
8/23/2022
|
|
L+6.00%
(Floor 1.00%) |
|
6,899,937
|
|
|
6,863,761
|
|
|
6,775,739
|
|
|||
Chloe Ox Parent, LLC (Censeo Health)
|
|
Healthcare services
|
|
First Lien
|
|
12/31/2024
|
|
L+5.00%
(Floor 1.00%) |
|
5,200,000
|
|
|
5,149,500
|
|
|
5,265,000
|
|
|||
CMN.com, LLC
|
|
Consumer services
|
|
First Lien
|
|
11/3/2021
|
|
L+6.00%
(Floor 1.00%) |
|
8,742,126
|
|
|
8,645,306
|
|
|
8,742,126
|
|
|||
Digital River, Inc.
|
|
Software & IT services
|
|
First Lien
|
|
2/12/2021
|
|
L+6.50%
(Floor 1.00%) |
|
8,002,967
|
|
|
7,995,112
|
|
|
8,002,967
|
|
|||
Go Wireless Holdings, Inc.
|
|
Retail
|
|
First Lien
|
|
12/31/2024
|
|
L+6.50%
(Floor 1.00%) |
|
6,912,500
|
|
|
6,845,573
|
|
|
6,903,859
|
|
|||
Highline Aftermarket Acquisition, LLC
|
|
Automobile
|
|
First Lien
|
|
3/17/2024
|
|
L+4.25%
(Floor 1.00%) |
|
2,856,595
|
|
|
2,844,340
|
|
|
2,860,166
|
|
|||
Hunter Defense Technologies, Inc.
|
|
Aerospace & defense
|
|
First Lien
|
|
3/29/2023
|
|
L+7.00%
(Floor 1.00%) |
|
6,500,000
|
|
|
6,370,152
|
|
|
6,370,152
|
|
|||
iEnergizer Limited
|
|
Business services
|
|
First Lien
|
|
5/1/2019
|
|
L+6.00%
(Floor 1.25%) |
|
6,550,375
|
|
|
6,421,048
|
|
|
6,558,563
|
|
|||
Imagine! Print Solutions, LLC
|
|
Media, marketing & entertainment
|
|
Second Lien
|
|
6/21/2023
|
|
L+8.75%
(Floor 1.00%) |
|
3,000,000
|
|
|
2,960,563
|
|
|
2,760,000
|
|
|||
InfoGroup Inc.
|
|
Software & IT services
|
|
First Lien
|
|
4/3/2023
|
|
L+5.00%
(Floor 1.50%) |
|
2,970,000
|
|
|
2,945,028
|
|
|
2,957,021
|
|
|||
Integro Parent Inc.
|
|
Business services
|
|
First Lien
|
|
10/31/2022
|
|
L+5.75%
(Floor 1.00%) |
|
4,888,924
|
|
|
4,768,810
|
|
|
4,888,924
|
|
|||
iPayment Holdings, Inc.
|
|
Financial services
|
|
First Lien
|
|
4/11/2023
|
|
L+5.00%
(Floor 1.50%) |
|
4,987,500
|
|
|
4,987,500
|
|
|
5,049,844
|
|
KeyPoint Government Solutions, Inc.
|
|
Business services
|
|
First Lien
|
|
4/18/2024
|
|
L+6.00%
(Floor 1.00%) |
|
4,750,000
|
|
|
4,708,981
|
|
|
4,750,000
|
|
|||
LOGIX Holdings Company, LLC
|
|
Telecommunications
|
|
First Lien
|
|
12/22/2024
|
|
L+5.75%
(Floor 1.00%) |
|
4,528,716
|
|
|
4,484,992
|
|
|
4,551,360
|
|
|||
LSF9 Atlantis Holdings, LLC
|
|
Telecommunications
|
|
First Lien
|
|
5/1/2023
|
|
L+6.00%
(Floor 1.00%) |
|
6,868,750
|
|
|
6,810,137
|
|
|
6,854,429
|
|
|||
Lulu's Fashion Lounge, LLC
|
|
Consumer products & retail
|
|
First Lien
|
|
8/23/2022
|
|
L+7.00%
(Floor 1.00%) |
|
4,374,999
|
|
|
4,254,636
|
|
|
4,506,249
|
|
|||
NBG Acquisition, Inc.
|
|
Wholesale
|
|
First Lien
|
|
4/26/2024
|
|
L+5.50%
(Floor 1.00%) |
|
2,962,500
|
|
|
2,911,071
|
|
|
2,973,609
|
|
|||
New Media Holdings II LLC
|
|
Media, marketing & entertainment
|
|
First Lien
|
|
7/14/2022
|
|
L+6.25%
(Floor 1.00%) |
|
8,822,598
|
|
|
8,799,522
|
|
|
8,880,518
|
|
|||
Peraton Corp. (fka MHVC Acquisition Corp.)
|
|
Aerospace & defense
|
|
First Lien
|
|
4/29/2024
|
|
L+5.25%
(Floor 1.00%) |
|
4,960,013
|
|
|
4,938,405
|
|
|
5,022,013
|
|
|||
Pet Supermarket, Inc.
|
|
Consumer products & retail
|
|
First Lien
|
|
7/5/2022
|
|
L+5.50%
(Floor 1.00%) |
|
4,925,000
|
|
|
4,889,928
|
|
|
4,900,375
|
|
|||
Polycom, Inc.
|
|
Telecommunications
|
|
First Lien
|
|
9/27/2023
|
|
L+5.25%
(Floor 1.00%) |
|
5,234,833
|
|
|
5,234,833
|
|
|
5,287,182
|
|
|||
Prepaid Legal Services, Inc.
|
|
Consumer services
|
|
First Lien
|
|
7/1/2019
|
|
L+5.25%
(Floor 1.25%) |
|
3,860,938
|
|
|
3,859,187
|
|
|
3,860,938
|
|
|||
|
|
|
|
Second Lien
|
|
7/1/2020
|
|
L+9.00%
(Floor 1.25%) |
|
405,000
|
|
|
398,614
|
|
|
405,000
|
|
|||
PT Network, LLC
4
|
|
Healthcare products
|
|
First Lien
|
|
11/30/2021
|
|
L+6.50%
(Floor 1.00%) |
|
4,425,133
|
|
|
4,425,133
|
|
|
4,425,133
|
|
|||
Redwood Ahead Acquisition, LLC
|
|
Business services
|
|
First Lien
|
|
11/2/2020
|
|
L+ 6.50%
|
|
2,811,484
|
|
|
2,767,547
|
|
|
2,829,056
|
|
|||
Solaray, LLC
5
|
|
Consumer services
|
|
First Lien
|
|
9/8/2023
|
|
L+6.50%
(Floor 1.00%) |
|
6,308,205
|
|
|
6,263,089
|
|
|
6,308,205
|
|
|||
|
|
|
|
Delayed Draw
|
|
9/8/2023
|
|
L+6.50%
(Floor 1.00%) |
|
1,784,890
|
|
|
1,768,866
|
|
|
1,784,890
|
|
|||
Tacala, LLC
|
|
Consumer products & retail
|
|
Second Lien
|
|
1/31/2026
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,985,089
|
|
|
3,063,765
|
|
|||
Teleguam Holdings , LLC
|
|
Telecommunications
|
|
Second Lien
|
|
4/12/2024
|
|
L+8.50%
(Floor 1.00%) |
|
2,000,000
|
|
|
1,963,812
|
|
|
2,015,000
|
|
|||
Terra Millennium Corporation
|
|
Industrial products
|
|
First Lien
|
|
10/31/2022
|
|
L+6.25%
(Floor 1.00%) |
|
7,776,019
|
|
|
7,715,978
|
|
|
7,834,339
|
|
|||
TestEquity, LLC
|
|
Capital equipment
|
|
First Lien
|
|
4/28/2022
|
|
L+5.50%
(Floor 1.00%) |
|
4,952,674
|
|
|
4,911,727
|
|
|
4,952,674
|
|
|||
TGP Holdings III LLC
6
|
|
Durable consumer goods
|
|
First Lien
|
|
9/25/2024
|
|
L+5.00%
(Floor 1.00%) |
|
1,720,169
|
|
|
1,701,604
|
|
|
1,736,296
|
|
|||
|
|
|
|
Second Lien
|
|
9/25/2025
|
|
L+8.50%
(Floor 1.00%) |
|
2,500,000
|
|
|
2,464,804
|
|
|
2,537,500
|
|
|||
Time Manufacturing Acquisition
|
|
Capital equipment
|
|
First Lien
|
|
2/3/2023
|
|
L+5.00%
(Floor 1.00%) |
|
4,947,519
|
|
|
4,908,622
|
|
|
4,935,150
|
|
Turning Point Brands, Inc.
|
|
Consumer products & retail
|
|
Second Lien
|
|
3/7/2024
|
|
L+7.00%
(Floor 1.00%) |
|
3,000,000
|
|
|
2,970,120
|
|
|
3,060,000
|
|
|||
UniTek Global Services, Inc.
|
|
Telecommunications
|
|
First Lien
|
|
1/13/2019
|
|
L+8.50%
(Floor 1.00%) |
|
4,584,809
|
|
|
4,584,809
|
|
|
4,584,809
|
|
|||
US Joiner Holding Company (IMECO and RAACI)
|
|
Transportation & logistics
|
|
First Lien
|
|
4/16/2020
|
|
L+6.00%
(Floor 1.00%) |
|
4,459,182
|
|
|
4,425,102
|
|
|
4,436,886
|
|
|||
U.S. TelePacific Corp.
|
|
Telecommunications
|
|
First Lien
|
|
5/2/2023
|
|
L+5.00%
(Floor 1.00%) |
|
7,643,991
|
|
|
7,550,843
|
|
|
7,441,425
|
|
|||
VIP Cinema Holdings, Inc.
|
|
Hotel, gaming & leisure
|
|
First Lien
|
|
3/1/2023
|
|
L+6.00%
(Floor 1.00%) |
|
4,750,000
|
|
|
4,730,480
|
|
|
4,804,934
|
|
|||
Total Investments
|
|
|
|
|
|
|
|
|
|
|
|
$
|
218,673,550
|
|
|
$
|
220,806,845
|
|
1
|
Represents the interest rate as of
March 31, 2018
. All interest rates are payable in cash, unless otherwise noted. The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) or Prime (“Prime”) which reset daily, monthly, quarterly, or semiannually. For each the Company has provided the spread over LIBOR or Prime in effect at
March 31, 2018
. Certain investments are subject to a LIBOR or Prime interest rate floor.
|
2
|
Represents the fair value determined utilizing a similar process as the Company in accordance with ASC 820. However, the fair value is determined by the Board of Managers of the Joint Venture. It is not included in the Company’s Board of Directors’ valuation process described elsewhere herein.
|
3
|
The investment has approximately $0.3 million in an unfunded delayed draw commitment as of
March 31, 2018
.
|
4
|
The investment has approximately $2.1 million in an unfunded delayed draw commitment as of
March 31, 2018
.
|
5
|
The investment has approximately $0.9 million in an unfunded delayed draw commitment as of
March 31, 2018
.
|
6
|
The investment has approximately $0.3 million in an unfunded delayed draw commitment as of
March 31, 2018
.
|
|
March 31, 2019
|
|
March 31, 2018
|
||||
Selected Balance Sheet Information:
|
|
|
|
||||
Investments, at fair value (cost $242,061 and $218,674)
|
$
|
237,547
|
|
|
$
|
220,807
|
|
Cash and cash equivalents
|
6,406
|
|
|
9,317
|
|
||
Due from broker
|
—
|
|
|
330
|
|
||
Deferred financing costs
|
1,615
|
|
|
2,111
|
|
||
Interest receivable
|
979
|
|
|
813
|
|
||
Total assets
|
$
|
246,547
|
|
|
$
|
233,378
|
|
|
|
|
|
||||
Senior credit facility payable
|
$
|
160,000
|
|
|
$
|
143,000
|
|
Payable for unsettled transactions
|
940
|
|
|
3,213
|
|
||
Other liabilities
|
3,606
|
|
|
3,119
|
|
||
Total liabilities
|
$
|
164,546
|
|
|
$
|
149,332
|
|
Members’ equity
|
82,001
|
|
|
84,046
|
|
||
Total liabilities and net assets
|
$
|
246,547
|
|
|
$
|
233,378
|
|
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Selected Statement of Operations Information:
|
|
|
|
|
|
||||||
Total revenues
|
$
|
21,397
|
|
|
$
|
17,066
|
|
|
$
|
12,542
|
|
Total expenses
|
8,759
|
|
|
6,613
|
|
|
4,400
|
|
|||
Net investment income
|
12,638
|
|
|
10,453
|
|
|
8,142
|
|
|||
Net unrealized appreciation (depreciation)
|
(6,647
|
)
|
|
(615
|
)
|
|
3,370
|
|
|||
Net realized gains
|
400
|
|
|
1,660
|
|
|
1,653
|
|
|||
Net increase in members’ equity resulting from operations
|
$
|
6,391
|
|
|
$
|
11,498
|
|
|
$
|
13,165
|
|
Portfolio Company
|
Type of Investment (1)
|
|
Amount of Interest or Dividends Credited in Income (2)
|
|
Fair Value at March 31, 2018
|
|
Amount of Realized Gain/(Loss)
|
|
Amount of Unrealized Gain/(Loss)
|
|
Gross Additions (3)
|
|
Gross Reductions (4)
|
|
Fair Value at March 31, 2019
|
||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
I-45 SLF LLC
|
80% LLC equity interest
|
|
$
|
9,401
|
|
|
$
|
67,113
|
|
|
$
|
—
|
|
|
$
|
(4,570
|
)
|
|
$
|
3,200
|
|
|
$
|
—
|
|
|
$
|
65,743
|
|
Prism Spectrum Holdings, LLC
|
First lien
|
|
1,325
|
|
|
4,241
|
|
|
—
|
|
|
233
|
|
|
8,987
|
|
|
—
|
|
|
13,461
|
|
|||||||
|
Revolving loan
|
|
81
|
|
|
490
|
|
|
34
|
|
|
—
|
|
|
1,476
|
|
|
(2,000
|
)
|
|
—
|
|
|||||||
|
96,498.32 Class A units
|
|
—
|
|
|
1,692
|
|
|
—
|
|
|
—
|
|
|
4,847
|
|
|
—
|
|
|
6,539
|
|
|||||||
Media Recovery, Inc.
|
800,000 shares Series A Convertible Preferred Stock, convertible into 800,000 shares common stock
|
|
536
|
|
|
6,371
|
|
|
—
|
|
|
1,424
|
|
|
—
|
|
|
—
|
|
|
7,795
|
|
|||||||
|
4,000,002 shares common stock
|
|
2,682
|
|
|
36,751
|
|
|
—
|
|
|
8,214
|
|
|
—
|
|
|
—
|
|
|
44,965
|
|
|||||||
TitanLiner
|
1,189,609 shares Series B convertible preferred stock (6% PIK)
|
|
29
|
|
|
11,362
|
|
|
6,913
|
|
|
(8,436
|
)
|
|
29
|
|
|
(9,868
|
)
|
|
—
|
|
|||||||
|
339,277 shares Series A convertible preferred stock
|
|
—
|
|
|
11,928
|
|
|
11,706
|
|
|
(8,724
|
)
|
|
—
|
|
|
(14,910
|
)
|
|
—
|
|
|||||||
Total Control Investments
|
|
|
$
|
14,054
|
|
|
$
|
139,948
|
|
|
$
|
18,653
|
|
|
$
|
(11,859
|
)
|
|
$
|
18,539
|
|
|
$
|
(26,778
|
)
|
|
$
|
138,503
|
|
Portfolio Company
|
Type of Investment (1)
|
|
Amount of Interest or Dividends Credited in Income (2)
|
|
Fair Value at March 31, 2018
|
|
Amount of Realized Gain/(Loss)
|
|
Amount of Unrealized Gain/(Loss)
|
|
Gross Additions (3)
|
|
Gross Reductions (4)
|
|
Fair Value at March 31, 2019
|
||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Chandler Signs, LP
|
Senior subordinated debt (12.00% cash, 1.00% PIK)
|
|
$
|
609
|
|
|
$
|
4,376
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
4,480
|
|
|
1,500,000 units of Class A-1 common stock
|
|
—
|
|
|
1,934
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
1,937
|
|
|||||||
Dynamic Communities, LLC
|
First lien
|
|
872
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|
11,004
|
|
|
(140
|
)
|
|
10,972
|
|
|||||||
|
Revolving loan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||||||
|
2,000,000 Preferred units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
849
|
|
|
2,000
|
|
|
—
|
|
|
2,849
|
|
|||||||
Elite SEM, Inc.
|
First lien
|
|
1,082
|
|
|
17,500
|
|
|
77
|
|
|
79
|
|
|
2,446
|
|
|
(20,102
|
)
|
|
—
|
|
|||||||
|
1,443 Investment Units (Preferred)
|
|
82
|
|
|
1,879
|
|
|
—
|
|
|
(87
|
)
|
|
716
|
|
|
(2,508
|
)
|
|
—
|
|
|||||||
ITA Holdings Group, LLC
|
First lien - Term Loan
|
|
1,130
|
|
|
9,314
|
|
|
—
|
|
|
(58
|
)
|
|
75
|
|
|
(1,856
|
)
|
|
7,475
|
|
|||||||
|
First lien - Term B Loan
|
|
195
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
3,800
|
|
|
(38
|
)
|
|
3,829
|
|
|||||||
|
Revolving loan
|
|
152
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
3,219
|
|
|
(1,250
|
)
|
|
2,000
|
|
|||||||
|
Delayed draw term loan
|
|
171
|
|
|
1,470
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(1,473
|
)
|
|
—
|
|
|||||||
|
First Lien - PIK Note A
|
|
2
|
|
|
—
|
|
|
—
|
|
|
313
|
|
|
1,692
|
|
|
—
|
|
|
2,005
|
|
|||||||
|
First Lien - PIK Note B
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
89
|
|
|
—
|
|
|
79
|
|
|||||||
|
Warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,018
|
|
|
539
|
|
|
—
|
|
|
1,557
|
|
|||||||
|
9.25% Class A membership interest
|
|
—
|
|
|
1,500
|
|
|
—
|
|
|
(577
|
)
|
|
—
|
|
|
—
|
|
|
923
|
|
|||||||
Roseland Management, LLC
|
First lien
|
|
417
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|
10,328
|
|
|
(26
|
)
|
|
10,474
|
|
|||||||
|
Revolving loan
|
|
6
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|||||||
|
10,000 Class A Units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|
1,000
|
|
|
—
|
|
|
1,487
|
|
|||||||
SIMR, LLC
|
First lien
|
|
796
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
11,478
|
|
|
(146
|
)
|
|
11,403
|
|
|||||||
|
5,724,000 Class B Common units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,724
|
|
|
—
|
|
|
5,724
|
|
Portfolio Company
|
Type of Investment (1)
|
|
Amount of Interest or Dividends Credited in Income (2)
|
|
Fair Value at March 31, 2018
|
|
Amount of Realized Gain/(Loss)
|
|
Amount of Unrealized Gain/(Loss)
|
|
Gross Additions (3)
|
|
Gross Reductions (4)
|
|
Fair Value at March 31, 2019
|
||||||||||||||
Zenfolio Inc.
|
First lien
|
|
1,695
|
|
|
13,325
|
|
|
—
|
|
|
(78
|
)
|
|
53
|
|
|
(135
|
)
|
|
13,165
|
|
|||||||
|
Revolving loan
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|||||||
|
190 shares of common stock
|
|
—
|
|
|
1,900
|
|
|
—
|
|
|
(1,354
|
)
|
|
—
|
|
|
—
|
|
|
546
|
|
|||||||
Total Affiliate Investments
|
|
|
$
|
7,225
|
|
|
$
|
53,198
|
|
|
$
|
77
|
|
|
$
|
1,109
|
|
|
$
|
54,195
|
|
|
$
|
(27,674
|
)
|
|
$
|
80,905
|
|
Total Control & Affiliate Investments
|
|
|
$
|
21,279
|
|
|
$
|
193,146
|
|
|
$
|
18,730
|
|
|
$
|
(10,750
|
)
|
|
$
|
72,734
|
|
|
$
|
(54,452
|
)
|
|
$
|
219,408
|
|
(1)
|
The principal amount and ownership detail as shown in the Consolidated Schedules of Investments.
|
(2)
|
Represents the total amount of interest or dividends credited to income for the portion of the year an investment was included in the Control or Affiliate categories, respectively.
|
(3)
|
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest, and accretion of OID. Gross additions also include movement of an existing portfolio company into this category and out of a different category
.
|
(4)
|
Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include movement of an existing portfolio out of this category and into a different category.
|
|
Page
|
Exhibit No.
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Exhibit No.
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Description
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CAPITAL SOUTHWEST CORPORATION
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By:
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/s/ Bowen S. Diehl
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Bowen S. Diehl
President and Chief Executive Officer
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Signature
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Title
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Date
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/s/ David R. Brooks
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Chairman of the Board
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June 4, 2019
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David R. Brooks
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/s/ Christine S. Battist
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Director
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June 4, 2019
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Christine S. Battist
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/s/ Jack D. Furst
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Director
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June 4, 2019
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Jack D. Furst
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/s/ T. Duane Morgan
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Director
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June 4, 2019
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T. Duane Morgan
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/s/ William Thomas III
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Director
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June 4, 2019
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William Thomas III
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/s/ John H. Wilson
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Director
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June 4, 2019
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John H. Wilson
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/s/ Bowen S. Diehl
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President and Chief Executive Officer
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June 4, 2019
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Bowen S. Diehl
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/s/ Michael S. Sarner
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Chief Financial Officer
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June 4, 2019
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Michael S. Sarner
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(Chief Financial/Accounting Officer)
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Name of Subsidiary
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State of Incorporation
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I-45 SLF LLC
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Delaware
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Media Recovery, Inc.
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Nevada
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Capital Southwest Management Corporation
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Nevada
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Capital Southwest Equity Investments, Inc.
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Delaware
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1
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I have reviewed this annual report on Form 10-K of Capital Southwest Corporation (the “registrant”);
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2
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: June 4, 2019
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By:
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/s/ Bowen S. Diehl
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Bowen S. Diehl
President and Chief Executive Officer
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1
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I have reviewed this annual report on Form 10-K of Capital Southwest Corporation (the “registrant”);
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2
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
|
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: June 4, 2019
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By:
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/s/ Michael S. Sarner
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Michael S. Sarner
Chief Financial Officer
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1
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The Form 10-K for the year ended March 31, 2019, filed with the Securities and Exchange Commission on June 4, 2019 (“accompanied report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2
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The information contained in the accompanied report fairly presents, in all material respects, the consolidated financial condition and results of operations of Capital Southwest Corporation.
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Date: June 4, 2019
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By:
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/s/ Bowen S. Diehl
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Bowen S. Diehl
President and Chief Executive Officer
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1
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The Form 10-K for the year ended March 31, 2019, filed with the Securities and Exchange Commission on June 4, 2019 (“accompanied report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2
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The information contained in the accompanied report fairly presents, in all material respects, the consolidated financial condition and results of operations of Capital Southwest Corporation.
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Date: June 4, 2019
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By:
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/s/ Michael S. Sarner
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Michael S. Sarner
Chief Financial Officer
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Page
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March 31,
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||||||
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2019
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2018
|
||||
Assets
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||||
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||||
Investments, at fair value (cost $242,061,110 and $218,673,548, respectively)
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$
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237,547,371
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$
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220,806,845
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Cash and cash equivalents
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6,405,598
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9,317,184
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Due from broker
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—
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329,987
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||
Deferred financing costs (net of accumulated amortization of $1,424,284 and $927,485, respectively)
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1,615,246
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2,110,545
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Interest receivable
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978,904
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813,100
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||
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||||
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$
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246,547,119
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$
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233,377,661
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||||
Liabilities and Members' Equity
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Liabilities
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||||
Credit facility
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$
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160,000,000
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$
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143,000,000
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Payable for securities purchased
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940,346
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3,212,818
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|
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Distributions payable
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3,254,800
|
|
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2,890,475
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|
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Interest payable
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157,142
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|
|
102,075
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|
||
Accrued expenses and other liabilities
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193,709
|
|
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126,212
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||
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|
||||
Total liabilities
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164,545,997
|
|
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149,331,580
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|
||
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|
||||
Commitments and contingencies (Note 8)
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|
||||
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|
||||
Members' equity
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82,001,122
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84,046,081
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||||
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$
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246,547,119
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$
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233,377,661
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Description
|
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Maturity Date
|
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Current Interest Rate(1)
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Principal Amount
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Cost
|
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Fair Value
|
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Percentage of Members' Equity
|
|||||||
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|||||||
Corporate Bank Loans
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|||||||
United States
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|||||||
Aerospace & Defense
|
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|||||||
American Scaffold Holdings, Inc.
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3/31/2022
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L+6.50% (Floor 1.00%)
|
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$
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2,625,000
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|
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$
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2,604,634
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$
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2,611,875
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|
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3.19
|
%
|
Hunter Defense Technologies, Inc.
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|
3/29/2023
|
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L+7.00% (Floor 1.00%)
|
|
6,256,250
|
|
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6,149,119
|
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6,256,250
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|
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7.63
|
%
|
|||
Peraton Corp. (fka MHVC Acquisition Corp.)
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|
4/29/2024
|
|
L+5.25% (Floor 1.00%)
|
|
6,394,363
|
|
|
6,369,724
|
|
|
6,170,560
|
|
|
7.52
|
%
|
|||
Building & Infrastructure Products
|
|
|
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|
|
|
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|
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|
|||||||
Geo Parent Corporation
|
|
12/19/2025
|
|
L+5.50%
|
|
5,000,000
|
|
|
4,951,736
|
|
|
4,987,500
|
|
|
6.08
|
%
|
|||
Business Services
|
|
|
|
|
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|
|
|
|
|
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|
|||||||
iEnergizer Limited
|
|
5/1/2019
|
|
L+6.00% (Floor 1.25%)
|
|
7,307,444
|
|
|
7,300,086
|
|
|
7,307,444
|
|
|
8.91
|
%
|
|||
Integro Parent Inc.
|
|
10/28/2022
|
|
L+5.75% (Floor 1.00%)
|
|
4,838,924
|
|
|
4,746,329
|
|
|
4,838,924
|
|
|
5.90
|
%
|
|||
Capital Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TestEquity, LLC
|
|
4/28/2022
|
|
L+5.50% (Floor 1.00%)
|
|
4,803,961
|
|
|
4,773,980
|
|
|
4,765,530
|
|
|
5.81
|
%
|
|||
Time Manufacturing Acquisition
|
|
2/3/2023
|
|
L+5.00% (Floor 1.00%)
|
|
4,910,038
|
|
|
4,879,401
|
|
|
4,928,450
|
|
|
6.01
|
%
|
|||
Consumer Products & Retail
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Go Wireless Holdings, Inc.
|
|
12/22/2024
|
|
L+6.50% (Floor 1.00%)
|
|
6,562,500
|
|
|
6,508,367
|
|
|
6,439,453
|
|
|
7.85
|
%
|
|||
Lulu's Fashion Lounge, LLC
|
|
8/26/2022
|
|
L+7.00% (Floor 1.00%)
|
|
4,034,090
|
|
|
3,940,388
|
|
|
3,913,068
|
|
|
4.77
|
%
|
|||
Mills Fleet Farm Group LLC
|
|
10/24/2024
|
|
L+6.25% (Floor 1.00%)
|
|
4,987,500
|
|
|
4,894,986
|
|
|
4,987,500
|
|
|
6.08
|
%
|
|||
Pet Supermarket, Inc.
|
|
7/5/2022
|
|
L+5.50% (Floor 1.00%)
|
|
4,859,916
|
|
|
4,833,425
|
|
|
4,762,717
|
|
|
5.81
|
%
|
|||
Tacala, LLC - Second Lien
|
|
1/30/2026
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,986,989
|
|
|
2,994,750
|
|
|
3.65
|
%
|
|||
Turning Point Brands, Inc. - Second Lien
|
|
3/7/2024
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,973,482
|
|
|
3,030,000
|
|
|
3.70
|
%
|
|||
YS Garments, LLC
|
|
8/9/2024
|
|
L+6.00% (Floor 1.00%)
|
|
4,937,500
|
|
|
4,893,176
|
|
|
4,869,609
|
|
|
5.94
|
%
|
|||
Consumer Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
CMN.com, LLC
|
|
11/3/2021
|
|
L+6.00% (Floor 1.00%)
|
|
9,431,480
|
|
|
9,347,289
|
|
|
9,431,480
|
|
|
11.50
|
%
|
|||
Lift Brands, Inc.
|
|
4/16/2023
|
|
L+7.00% (Floor 1.00%)
|
|
4,950,000
|
|
|
4,898,080
|
|
|
4,742,100
|
|
|
5.78
|
%
|
|||
Durable Consumer Goods
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TGP Holdings III LLC - Second Lien
|
|
9/25/2025
|
|
L+8.50% (Floor 1.00%)
|
|
2,500,000
|
|
|
2,469,503
|
|
|
2,400,000
|
|
|
2.93
|
%
|
|||
Energy Services (Midstream)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
The Hoover Group, Inc.
|
|
1/28/2021
|
|
L+7.25% (Floor 1.00%)
|
|
6,436,593
|
|
|
6,335,553
|
|
|
6,243,495
|
|
|
7.61
|
%
|
|||
Healthcare Products
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Maturity Date
|
|
Current Interest Rate(1)
|
|
Principal Amount
|
|
Cost
|
|
Fair Value
|
|
Percentage of Members' Equity
|
|||||||
Isagenix International, LLC
|
|
6/16/2025
|
|
L+5.75% (Floor 1.00%)
|
|
2,062,501
|
|
|
2,044,219
|
|
|
1,851,095
|
|
|
2.26
|
%
|
|||
PT Network, LLC
|
|
11/30/2021
|
|
L+5.50% (Floor 1.00%)
|
|
4,369,332
|
|
|
4,369,332
|
|
|
4,125,086
|
|
|
5.03
|
%
|
|||
Healthcare Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AAC Holdings, Inc.
|
|
6/30/2023
|
|
L+ 6.75% (Floor 1.00%), 4.00% PIK
|
|
7,375,229
|
|
|
7,253,490
|
|
|
6,822,087
|
|
|
8.32
|
%
|
|||
AAC Holdings, Inc.
|
|
3/31/2020
|
|
L+11.00% (Floor 1.00%)
|
|
949,844
|
|
|
940,346
|
|
|
959,343
|
|
|
1.17
|
%
|
|||
Chloe Ox Parent, LLC (Censeo Health)
|
|
12/23/2024
|
|
L+4.50% (Floor 1.00%)
|
|
5,148,000
|
|
|
5,105,429
|
|
|
5,148,000
|
|
|
6.28
|
%
|
|||
Nomad Buyer, Inc.
|
|
8/1/2025
|
|
L+5.00%
|
|
2,985,000
|
|
|
2,821,449
|
|
|
2,906,644
|
|
|
3.54
|
%
|
|||
Hotel, Gaming & Leisure
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
VIP Cinema Holdings, Inc.
|
|
3/1/2023
|
|
L+6.00% (Floor 1.00%)
|
|
4,500,000
|
|
|
4,485,268
|
|
|
4,207,500
|
|
|
5.13
|
%
|
|||
Industrial Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Terra Millennium Corporation
|
|
10/31/2022
|
|
L+6.75% (Floor 1.00%)
|
|
7,526,019
|
|
|
7,478,308
|
|
|
7,488,389
|
|
|
9.13
|
%
|
|||
Media, Marketing & Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Allen Media, LLC
|
|
8/30/2023
|
|
L+6.50% (Floor 1.00%)
|
|
5,642,857
|
|
|
5,496,176
|
|
|
5,480,625
|
|
|
6.68
|
%
|
|||
Imagine! Print Solutions, LLC - Second Lien
|
|
6/21/2023
|
|
L+8.75% (Floor 1.00%)
|
|
3,000,000
|
|
|
2,968,111
|
|
|
2,700,000
|
|
|
3.29
|
%
|
|||
New Media Holdings II LLC
|
|
7/14/2022
|
|
L+6.25% (Floor 1.00%)
|
|
9,311,991
|
|
|
9,298,489
|
|
|
9,277,071
|
|
|
11.31
|
%
|
|||
Restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
California Pizza Kitchen, Inc.
|
|
8/23/2022
|
|
L+6.00% (Floor 1.00%)
|
|
6,829,887
|
|
|
6,802,221
|
|
|
6,616,487
|
|
|
8.07
|
%
|
|||
Software & IT Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Digital River, Inc.
|
|
2/12/2021
|
|
L+6.00% (Floor 1.00%)
|
|
8,002,967
|
|
|
7,997,848
|
|
|
7,802,893
|
|
|
9.52
|
%
|
|||
InfoGroup Inc.
|
|
4/3/2023
|
|
L+5.00% (Floor 1.50%)
|
|
2,940,000
|
|
|
2,920,233
|
|
|
2,892,225
|
|
|
3.53
|
%
|
|||
Intermedia Holdings, Inc.
|
|
7/21/2025
|
|
L+6.00% (Floor 1.00%)
|
|
3,847,499
|
|
|
3,812,532
|
|
|
3,857,137
|
|
|
4.70
|
%
|
|||
New Era Technology, Inc. (2)
|
|
6/22/2023
|
|
L+6.50% (Floor 1.00%)
|
|
4,628,264
|
|
|
4,557,798
|
|
|
4,567,171
|
|
|
5.57
|
%
|
|||
Novetta Solutions, LLC
|
|
10/17/2022
|
|
L+5.00% (Floor 1.00%)
|
|
4,946,868
|
|
|
4,830,392
|
|
|
4,857,206
|
|
|
5.92
|
%
|
|||
Technology Products & Components
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ATI Investment Sub, Inc.
|
|
6/22/2021
|
|
L+7.25% (Floor 1.00%)
|
|
1,817,558
|
|
|
1,795,449
|
|
|
1,691,420
|
|
|
2.06
|
%
|
|||
ATX Canada Acquisitionco Inc.
|
|
6/11/2021
|
|
L+6.00% (Floor 1.00%)
|
|
4,688,923
|
|
|
4,665,710
|
|
|
4,454,477
|
|
|
5.43
|
%
|
|||
Telecommunications
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
American Teleconferencing Services, Ltd.
|
|
12/8/2021
|
|
L+6.50% (Floor 1.00%)
|
|
6,881,388
|
|
|
6,641,473
|
|
|
4,515,911
|
|
|
5.51
|
%
|
Description
|
|
Maturity Date
|
|
Current Interest Rate(1)
|
|
Principal Amount
|
|
Cost
|
|
Fair Value
|
|
Percentage of Members' Equity
|
|||||||
JAB Wireless, Inc.
|
|
5/2/2023
|
|
L+8.00% (Floor 1.00%)
|
|
7,920,000
|
|
|
7,855,060
|
|
|
7,920,000
|
|
|
9.66
|
%
|
|||
KORE Wireless Group Inc.
|
|
12/20/2024
|
|
L+5.50%
|
|
3,325,000
|
|
|
3,292,962
|
|
|
3,308,375
|
|
|
4.03
|
%
|
|||
LOGIX Holdings Company, LLC
|
|
12/23/2024
|
|
L+5.75% (Floor 1.00%)
|
|
6,016,500
|
|
|
5,972,674
|
|
|
6,061,624
|
|
|
7.39
|
%
|
|||
LSF9 Atlantis Holdings, LLC
|
|
5/1/2023
|
|
L+6.00% (Floor 1.00%)
|
|
6,693,750
|
|
|
6,647,863
|
|
|
6,246,106
|
|
|
7.62
|
%
|
|||
Teleguam Holdings , LLC
|
|
7/25/2024
|
|
L+8.50% (Floor 1.00%)
|
|
2,000,000
|
|
|
1,969,537
|
|
|
2,012,500
|
|
|
2.45
|
%
|
|||
U.S. TelePacific Corp.
|
|
5/2/2023
|
|
L+5.00% (Floor 1.00%)
|
|
6,844,420
|
|
|
6,777,409
|
|
|
6,660,510
|
|
|
8.12
|
%
|
|||
UniTek Global Services, Inc.
|
|
8/20/2024
|
|
L+5.50% (Floor 1.00%)
|
|
2,985,000
|
|
|
2,959,958
|
|
|
2,958,135
|
|
|
3.61
|
%
|
|||
Wireless Vision Holdings, LLC (3)
|
|
9/29/2022
|
|
L+8.50% (Floor 1.00%), 1.00% PIK
|
|
7,865,229
|
|
|
7,753,144
|
|
|
7,778,711
|
|
|
9.49
|
%
|
|||
Transportation & Logistics
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
STL Parent Corp. (American Railcar)
|
|
12/5/2022
|
|
L+7.00%
|
|
3,975,000
|
|
|
3,846,305
|
|
|
3,855,750
|
|
|
4.70
|
%
|
|||
Wholesale
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
NBG Acquisition, Inc.
|
|
4/26/2024
|
|
L+5.50% (Floor 1.00%)
|
|
2,887,500
|
|
|
2,845,678
|
|
|
2,844,188
|
|
|
3.47
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
$
|
242,061,110
|
|
|
$
|
237,547,371
|
|
|
289.69
|
%
|
(1)
|
The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly, or semiannually. For each investment, the Company has provided the spread over LIBOR in effect at March 31,
2019
. Certain investments are subject to a LIBOR interest rate floor.
|
(2)
|
The investment has approximately $0.3 million in an unfunded delayed draw commitment as of March 31,
2019
.
|
(3)
|
The investment is structured as a first lien last out term loan.
|
Description
|
|
Maturity Date
|
|
Current Interest Rate(1)
|
|
Principal Amount
|
|
Cost
|
|
Fair Value
|
|
Percentage of Members' Equity
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Corporate Bank Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Aerospace & Defense
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
American Scaffold Holdings, Inc.
|
|
3/31/2022
|
|
L+6.50%
|
|
$
|
2,775,000
|
|
|
$
|
2,746,293
|
|
|
$
|
2,761,125
|
|
|
3.29
|
%
|
Hunter Defense Technologies, Inc.
|
|
3/29/2023
|
|
L+7.00%
|
|
6,500,000
|
|
|
6,370,152
|
|
|
6,370,152
|
|
|
7.58
|
%
|
|||
Peraton Corp. (fka MHVC Acquisition Corp.)
|
|
4/29/2024
|
|
L+5.25%
|
|
4,960,013
|
|
|
4,938,405
|
|
|
5,022,013
|
|
|
5.98
|
%
|
|||
Automobile
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Highline Aftermarket Acquisition, LLC
|
|
3/17/2024
|
|
L+4.25%
|
|
2,856,595
|
|
|
2,844,340
|
|
|
2,860,166
|
|
|
3.40
|
%
|
|||
Business Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ansira Holdings, Inc.
|
|
12/20/2022
|
|
L+6.50%
|
|
3,878,182
|
|
|
3,847,470
|
|
|
3,868,486
|
|
|
4.60
|
%
|
|||
Ansira Holdings, Inc. - Delayed Draw
|
|
12/20/2022
|
|
L+6.50%
|
|
315,316
|
|
|
310,799
|
|
|
314,527
|
|
|
0.37
|
%
|
|||
iEnergizer Limited
|
|
5/1/2019
|
|
L+6.00%
|
|
6,550,375
|
|
|
6,421,048
|
|
|
6,558,563
|
|
|
7.80
|
%
|
|||
Integro Parent Inc.
|
|
10/31/2022
|
|
L+5.75%
|
|
4,888,924
|
|
|
4,768,810
|
|
|
4,888,924
|
|
|
5.82
|
%
|
|||
KeyPoint Government Solutions, Inc.
|
|
4/18/2024
|
|
L+6.00%
|
|
4,750,000
|
|
|
4,708,981
|
|
|
4,750,000
|
|
|
5.65
|
%
|
|||
Redwood Ahead Acquisition, LLC
|
|
11/2/2020
|
|
L+6.50%
|
|
2,811,484
|
|
|
2,767,547
|
|
|
2,829,056
|
|
|
3.37
|
%
|
|||
Capital Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TestEquity, LLC
|
|
4/28/2022
|
|
L+5.50%
|
|
4,952,674
|
|
|
4,911,727
|
|
|
4,952,674
|
|
|
5.89
|
%
|
|||
Time Manufacturing Acquisition
|
|
2/3/2023
|
|
L+5.00%
|
|
4,947,519
|
|
|
4,908,622
|
|
|
4,935,150
|
|
|
5.87
|
%
|
|||
Consumer Products & Retail
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Lulu's Fashion Lounge, LLC
|
|
8/23/2022
|
|
L+7.00%
|
|
4,374,999
|
|
|
4,254,636
|
|
|
4,506,249
|
|
|
5.36
|
%
|
|||
Pet Supermarket, Inc.
|
|
7/5/2022
|
|
L+5.50%
|
|
4,925,000
|
|
|
4,889,928
|
|
|
4,900,375
|
|
|
5.83
|
%
|
|||
Tacala, LLC - Second Lien
|
|
1/31/2026
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,985,088
|
|
|
3,063,765
|
|
|
3.65
|
%
|
|||
Turning Point Brands, Inc. - Second Lien
|
|
3/7/2024
|
|
L+7.00%
|
|
3,000,000
|
|
|
2,970,120
|
|
|
3,060,000
|
|
|
3.64
|
%
|
|||
Consumer Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
CMN.com, LLC
|
|
11/3/2021
|
|
L+6.00%
|
|
8,742,126
|
|
|
8,645,306
|
|
|
8,742,126
|
|
|
10.40
|
%
|
|||
Prepaid Legal Services, Inc.
|
|
7/1/2019
|
|
L+5.25%
|
|
3,860,938
|
|
|
3,859,187
|
|
|
3,860,938
|
|
|
4.59
|
%
|
|||
Prepaid Legal Services, Inc. - Second Lien
|
|
7/1/2020
|
|
L+9.00%
|
|
405,000
|
|
|
398,614
|
|
|
405,000
|
|
|
0.48
|
%
|
|||
Solaray, LLC
|
|
9/8/2023
|
|
L+6.50%
|
|
6,308,205
|
|
|
6,263,089
|
|
|
6,308,205
|
|
|
7.51
|
%
|
|||
Solaray, LLC - Delayed Draw
|
|
9/8/2023
|
|
L+6.50%
|
|
1,784,890
|
|
|
1,768,866
|
|
|
1,784,890
|
|
|
2.12
|
%
|
|||
Durable Consumer Goods
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TGP Holdings III LLC
|
|
9/25/2024
|
|
L+5.00%
|
|
1,720,169
|
|
|
1,701,604
|
|
|
1,736,296
|
|
|
2.07
|
%
|
|||
TGP Holdings III LLC - Second Lien
|
|
9/25/2025
|
|
L+8.50%
|
|
2,500,000
|
|
|
2,464,804
|
|
|
2,537,500
|
|
|
3.02
|
%
|
Description
|
|
Maturity Date
|
|
Current Interest Rate(1)
|
|
Principal Amount
|
|
Cost
|
|
Fair Value
|
|
Percentage of Members' Equity
|
|||||||
Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
iPayment Holdings, Inc.
|
|
4/11/2023
|
|
L+5.00%
|
|
4,987,500
|
|
|
4,987,500
|
|
|
5,049,844
|
|
|
6.01
|
%
|
|||
Healthcare Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beaver-Visitec International Holdings, Inc.
|
|
8/21/2023
|
|
L+5.00%
|
|
4,925,000
|
|
|
4,886,584
|
|
|
4,949,625
|
|
|
5.89
|
%
|
|||
PT Network, LLC
|
|
11/30/2021
|
|
L+6.50%
|
|
4,425,133
|
|
|
4,425,133
|
|
|
4,425,133
|
|
|
5.27
|
%
|
|||
Healthcare Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AAC Holdings, Inc.
|
|
6/30/2023
|
|
L+6.75%
|
|
7,568,046
|
|
|
7,413,688
|
|
|
7,700,487
|
|
|
9.16
|
%
|
|||
Chloe Ox Parent, LLC (Censeo Health)
|
|
12/31/2024
|
|
L+5.00%
|
|
5,200,000
|
|
|
5,149,500
|
|
|
5,265,000
|
|
|
6.26
|
%
|
|||
Hotel, Gaming & Leisure
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
VIP Cinema Holdings, Inc.
|
|
3/1/2023
|
|
L+6.00%
|
|
4,750,000
|
|
|
4,730,480
|
|
|
4,804,934
|
|
|
5.72
|
%
|
|||
Industrial Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Terra Millennium Corporation
|
|
10/31/2022
|
|
L+6.25%
|
|
7,776,019
|
|
|
7,715,978
|
|
|
7,834,339
|
|
|
9.32
|
%
|
|||
Media, Marketing & Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Imagine! Print Solutions, LLC - Second Lien
|
|
6/21/2023
|
|
L+8.75%
|
|
3,000,000
|
|
|
2,960,563
|
|
|
2,760,000
|
|
|
3.28
|
%
|
|||
New Media Holdings II LLC
|
|
7/14/2022
|
|
L+6.25%
|
|
8,822,598
|
|
|
8,799,522
|
|
|
8,880,518
|
|
|
10.57
|
%
|
|||
Restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
California Pizza Kitchen, Inc.
|
|
8/23/2022
|
|
L+6.00%
|
|
6,899,937
|
|
|
6,863,761
|
|
|
6,775,739
|
|
|
8.06
|
%
|
|||
Retail
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Go Wireless Holdings, Inc.
|
|
12/31/2024
|
|
L+6.50%
|
|
6,912,500
|
|
|
6,845,573
|
|
|
6,903,859
|
|
|
8.21
|
%
|
|||
Software & IT Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Digital River, Inc.
|
|
2/12/2021
|
|
L+6.50%
|
|
8,002,967
|
|
|
7,995,112
|
|
|
8,002,967
|
|
|
9.52
|
%
|
|||
InfoGroup Inc.
|
|
4/3/2023
|
|
L+5.00%
|
|
2,970,000
|
|
|
2,945,028
|
|
|
2,957,021
|
|
|
3.52
|
%
|
|||
Technology Products & Components
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ATI Investment Sub, Inc.
|
|
6/22/2021
|
|
L+7.25%
|
|
3,557,227
|
|
|
3,503,722
|
|
|
3,552,781
|
|
|
4.23
|
%
|
|||
ATX Canada Acquisitionco Inc.
|
|
6/11/2021
|
|
L+6.00%
|
|
4,836,742
|
|
|
4,801,504
|
|
|
4,498,170
|
|
|
5.35
|
%
|
|||
Telecommunications
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
American Teleconferencing Services, Ltd.
|
|
12/8/2021
|
|
L+6.50%
|
|
7,287,370
|
|
|
6,938,866
|
|
|
7,285,548
|
|
|
8.67
|
%
|
|||
LOGIX Holdings Company, LLC
|
|
12/22/2024
|
|
L+5.75%
|
|
4,528,716
|
|
|
4,484,992
|
|
|
4,551,360
|
|
|
5.42
|
%
|
|||
LSF9 Atlantis Holdings, LLC
|
|
5/1/2023
|
|
L+6.00%
|
|
6,868,750
|
|
|
6,810,137
|
|
|
6,854,429
|
|
|
8.16
|
%
|
|||
Polycom, Inc.
|
|
9/27/2023
|
|
L+5.25%
|
|
5,234,833
|
|
|
5,234,833
|
|
|
5,287,182
|
|
|
6.29
|
%
|
|||
Teleguam Holdings , LLC
|
|
4/12/2024
|
|
L+8.50%
|
|
2,000,000
|
|
|
1,963,812
|
|
|
2,015,000
|
|
|
2.40
|
%
|
|||
U.S. TelePacific Corp.
|
|
5/2/2023
|
|
L+5.00%
|
|
7,643,991
|
|
|
7,550,843
|
|
|
7,441,425
|
|
|
8.85
|
%
|
|||
UniTek Global Services, Inc.
|
|
1/13/2019
|
|
L+8.50%
|
|
4,584,809
|
|
|
4,584,809
|
|
|
4,584,809
|
|
|
5.46
|
%
|
Description
|
|
Maturity Date
|
|
Current Interest Rate(1)
|
|
Principal Amount
|
|
Cost
|
|
Fair Value
|
|
Percentage of Members' Equity
|
|||||||
Transportation & Logistics
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
US Joiner Holding Company (IMECO and RAACI)
|
|
4/16/2020
|
|
L+6.00%
|
|
4,459,182
|
|
|
4,425,101
|
|
|
4,436,886
|
|
|
5.28
|
%
|
|||
Wholesale
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
NBG Acquisition, Inc.
|
|
4/26/2024
|
|
L+5.50%
|
|
2,962,500
|
|
|
2,911,071
|
|
|
2,973,609
|
|
|
3.54
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
$
|
218,673,548
|
|
|
$
|
220,806,845
|
|
|
262.73
|
%
|
(1)
|
The majority of investments bear interest at a rate that may be determined by reference to London Interbank Offered Rate (“LIBOR” or “L”) which reset daily, monthly, quarterly, or semiannually. For each investment, the Company has provided the spread over LIBOR in effect at March 31,
2018
. Certain investments are subject to a LIBOR interest rate floor.
|
|
|
Year ended March 31, 2019
|
|
Year ended March 31, 2018
|
|
Year Ended March 31, 2017
|
||||||
Investment income
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
20,808,110
|
|
|
$
|
16,732,879
|
|
|
$
|
12,293,686
|
|
Fees and other income
|
|
588,778
|
|
|
332,752
|
|
|
247,870
|
|
|||
|
|
|
|
|
|
|
||||||
Total investment income
|
|
21,396,888
|
|
|
17,065,631
|
|
|
12,541,556
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
|
||||||
Interest expense
|
|
8,369,602
|
|
|
6,254,444
|
|
|
4,042,842
|
|
|||
Administrative fee
|
|
153,400
|
|
|
150,362
|
|
|
120,543
|
|
|||
Professional fees and other
|
|
236,224
|
|
|
208,225
|
|
|
236,372
|
|
|||
|
|
|
|
|
|
|
||||||
Total expenses
|
|
8,759,226
|
|
|
6,613,031
|
|
|
4,399,757
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net investment income
|
|
12,637,662
|
|
|
10,452,600
|
|
|
8,141,799
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Realized and unrealized (loss) gain on investments
|
|
|
|
|
|
|
||||||
Net realized gain on investments
|
|
399,954
|
|
|
1,660,104
|
|
|
1,653,143
|
|
|||
Net change in unrealized (depreciation) appreciation on investments
|
|
(6,647,036
|
)
|
|
(614,866
|
)
|
|
3,369,673
|
|
|||
|
|
|
|
|
|
|
||||||
Net (loss) gain on investments
|
|
(6,247,082
|
)
|
|
1,045,238
|
|
|
5,022,816
|
|
|||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net increase in members' equity resulting from operations
|
|
$
|
6,390,580
|
|
|
$
|
11,497,838
|
|
|
$
|
13,164,615
|
|
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Members' equity beginning balance
|
$
|
84,046,081
|
|
|
$
|
79,417,700
|
|
|
$
|
45,357,231
|
|
Contributions
|
4,000,000
|
|
|
5,000,000
|
|
|
30,000,000
|
|
|||
Distributions
|
(12,435,539
|
)
|
|
(11,869,457
|
)
|
|
(9,104,146
|
)
|
|||
|
75,610,542
|
|
|
72,548,243
|
|
|
66,253,085
|
|
|||
|
|
|
|
|
|
||||||
Net increase in members' equity resulting from operations:
|
|
|
|
|
|
||||||
Net investment income
|
12,637,662
|
|
|
10,452,600
|
|
|
8,141,799
|
|
|||
Net realized gain on investments
|
399,954
|
|
|
1,660,104
|
|
|
1,653,143
|
|
|||
Net change in unrealized appreciation (depreciation) on investments
|
(6,647,036
|
)
|
|
(614,866
|
)
|
|
3,369,673
|
|
|||
|
|
|
|
|
|
||||||
Net increase in members' equity resulting from operations
|
6,390,580
|
|
|
11,497,838
|
|
|
13,164,615
|
|
|||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Members' equity ending balance
|
$
|
82,001,122
|
|
|
$
|
84,046,081
|
|
|
$
|
79,417,700
|
|
|
Years Ended March 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net increase in members' equity resulting from operations
|
$
|
6,390,580
|
|
|
$
|
11,497,838
|
|
|
$
|
13,164,615
|
|
Adjustments to reconcile net increase in members' equity resulting from operations to net cash used in operating activities:
|
|
|
|
|
|
||||||
Net realized gain on investments
|
(399,954
|
)
|
|
(1,660,104
|
)
|
|
(1,653,143
|
)
|
|||
Net change in unrealized (appreciation) depreciation on investments
|
6,647,036
|
|
|
614,866
|
|
|
(3,369,673
|
)
|
|||
Amortization of premiums and discounts on investments
|
(671,016
|
)
|
|
(710,236
|
)
|
|
(1,084,012
|
)
|
|||
Amortization of deferred financing costs
|
496,799
|
|
|
487,503
|
|
|
374,659
|
|
|||
Purchases of investments
|
(95,262,272
|
)
|
|
(135,400,139
|
)
|
|
(161,951,431
|
)
|
|||
Proceeds from sales / paydowns of investments
|
72,945,680
|
|
|
116,591,458
|
|
|
67,029,872
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Due from broker
|
329,987
|
|
|
1,402,513
|
|
|
(1,732,500
|
)
|
|||
Interest receivable
|
(165,804
|
)
|
|
(338,769
|
)
|
|
(37,939
|
)
|
|||
Payable for securities purchased
|
(2,272,472
|
)
|
|
(8,582,182
|
)
|
|
3,754,809
|
|
|||
Interest payable
|
55,067
|
|
|
41,883
|
|
|
30,987
|
|
|||
Accrued expenses and other liabilities
|
67,497
|
|
|
28,330
|
|
|
58,842
|
|
|||
|
|
|
|
|
|
||||||
Net cash used in operating activities
|
(11,838,872
|
)
|
|
(16,027,039
|
)
|
|
(85,414,914
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Borrowings under credit facility
|
55,000,000
|
|
|
34,000,000
|
|
|
74,000,000
|
|
|||
Repayments of credit facility
|
(38,000,000
|
)
|
|
(13,000,000
|
)
|
|
—
|
|
|||
Deferred financing costs paid
|
(1,500
|
)
|
|
(939,006
|
)
|
|
(974,024
|
)
|
|||
Capital contributions
|
4,000,000
|
|
|
5,000,000
|
|
|
30,000,000
|
|
|||
Distributions
|
(12,071,214
|
)
|
|
(11,809,424
|
)
|
|
(7,699,178
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash provided by financing activities
|
8,927,286
|
|
|
13,251,570
|
|
|
95,326,798
|
|
|||
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
(2,911,586
|
)
|
|
(2,775,469
|
)
|
|
9,911,884
|
|
|||
Cash and cash equivalents,
beginning of period
|
9,317,184
|
|
|
12,092,653
|
|
|
2,180,769
|
|
|||
Cash and cash equivalents,
end of period
|
$
|
6,405,598
|
|
|
$
|
9,317,184
|
|
|
$
|
12,092,653
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
7,797,256
|
|
|
$
|
5,705,952
|
|
|
$
|
3,133,149
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of noncash financing activities
|
|
|
|
|
|
||||||
Distributions payable
|
$
|
3,254,800
|
|
|
$
|
2,890,475
|
|
|
$
|
2,830,442
|
|
•
|
Level 1- unadjusted quoted prices in active markets for identical investments
|
•
|
Level 2- investments with other significant observable inputs (including quoted prices for similar securities, interest rates, prepayments speeds, credit risk, etc.)
|
•
|
Level 3- investments with significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
|
Type of Investment
|
|
Fair Value at March 31, 2019
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
|
Weighted Average
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Corporate bank loans
|
|
$
|
174,772,948
|
|
|
Income Approach
|
|
Broker Quotes
|
|
65.6 - 101.0
|
|
96.8
|
|
|
40,237,232
|
|
|
Income Approach
|
|
Discount Rate
|
|
8.5% - 14.5%
|
|
10.8%
|
|
|
|
22,537,191
|
|
|
Market Approach
|
|
Exit Value
|
|
100.0 - 101.0
|
|
100.0
|
|
|
|
$
|
237,547,371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Type of Investment
|
|
Fair Value at March 31, 2018
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
|
Weighted Average
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Corporate bank loans
|
|
$
|
182,716,013
|
|
|
Income Approach
|
|
Broker Quotes
|
|
92.0 - 103.0
|
|
100
|
|
|
23,029,609
|
|
|
Income Approach
|
|
Discount Rate
|
|
7.4% - 8.6%
|
|
7.8%
|
|
|
|
10,795,285
|
|
|
Market Approach
|
|
Cost
|
|
98.0 - 100.0
|
|
98.8
|
|
|
|
4,265,938
|
|
|
Market Approach
|
|
Exit Value
|
|
100.0
|
|
100.0
|
|
|
|
$
|
220,806,845
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Investments (at fair value)
|
|
|
|
|
|
|
|
|
||||||||
Corporate bank loans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
237,547,371
|
|
|
$
|
237,547,371
|
|
Total investments
|
|
—
|
|
|
—
|
|
|
237,547,371
|
|
|
237,547,371
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents - money market fund
|
|
5,333,271
|
|
|
—
|
|
|
—
|
|
|
5,333,271
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$
|
5,333,271
|
|
|
$
|
—
|
|
|
$
|
237,547,371
|
|
|
$
|
242,880,642
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Investments (at fair value)
|
|
|
|
|
|
|
|
|
||||||||
Corporate bank loans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
220,806,845
|
|
|
$
|
220,806,845
|
|
Total investments
|
|
—
|
|
|
—
|
|
|
220,806,845
|
|
|
220,806,845
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents - money market fund
|
|
3,087,598
|
|
|
—
|
|
|
—
|
|
|
3,087,598
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$
|
3,087,598
|
|
|
$
|
—
|
|
|
$
|
220,806,845
|
|
|
$
|
223,894,443
|
|
|
|
Level 3
|
||||||||||||||||||||||||||
|
|
Beginning Balance
|
|
Purchases
(a)
|
|
Settlements
|
|
Change in Unrealized Appreciation
(b)
|
|
Realized Gains (Losses)
(c)
|
|
Ending Balance
|
|
Change in Unrealized Appreciation (Depreciation) on Investments Held at Period End
|
||||||||||||||
Investments (at fair value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate bank loans
|
|
$
|
220,806,845
|
|
|
$
|
135,311,691
|
|
|
$
|
(112,324,083
|
)
|
|
$
|
(6,647,036
|
)
|
|
$
|
399,954
|
|
|
$
|
237,547,371
|
|
|
$
|
(6,210,449
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
|
$
|
220,806,845
|
|
|
$
|
135,311,691
|
|
|
$
|
(112,324,083
|
)
|
|
$
|
(6,647,036
|
)
|
|
$
|
399,954
|
|
|
$
|
237,547,371
|
|
|
$
|
(6,210,449
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Level 3
|
||||||||||||||||||||||||||
|
|
Beginning Balance
|
|
Purchases
(a)
|
|
Settlements
|
|
Change in Unrealized Appreciation
(b)
|
|
Realized Gains (Losses)
(c)
|
|
Ending Balance
|
|
Change in Unrealized Appreciation (Depreciation) on Investments Held at Period End
|
||||||||||||||
Investments (at fair value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Corporate bank loans
|
|
$
|
200,242,690
|
|
|
$
|
135,480,991
|
|
|
$
|
(115,962,074
|
)
|
|
$
|
(614,866
|
)
|
|
$
|
1,660,104
|
|
|
$
|
220,806,845
|
|
|
$
|
605,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
|
$
|
200,242,690
|
|
|
$
|
135,480,991
|
|
|
$
|
(115,962,074
|
)
|
|
$
|
(614,866
|
)
|
|
$
|
1,660,104
|
|
|
$
|
220,806,845
|
|
|
$
|
605,724
|
|
|
Years Ending March 31,
|
|
|
|
|
|||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|||||||
Credit Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
160,000
|
|
|
—
|
|
|
—
|
|
|
160,000
|
|
|
|
|
|
|
|
||||
|
|
|
March 31,
|
|
March 31,
|
||||
Portfolio Company
|
Investment Type
|
|
2019
|
|
2018
|
||||
Ansira Holdings, Inc.
|
Delayed Draw Term Loan
|
|
$
|
—
|
|
|
$
|
255,000
|
|
New Era Technology, Inc.
|
Delayed Draw Term Loan
|
|
256,000
|
|
|
—
|
|
||
PT Network, LLC
|
Delayed Draw Term Loan
|
|
—
|
|
|
2,053,000
|
|
||
Solaray, LLC
|
Delayed Draw Term Loan
|
|
—
|
|
|
912,000
|
|
||
TGP Holdings III LLC
|
Delayed Draw Term Loan
|
|
—
|
|
|
271,000
|
|
||
Total unused commitments to extend financing
|
|
|
$
|
256,000
|
|
|
$
|
3,491,000
|
|
|
|
Year ended
|
|
Year ended
|
|
Year ended
|
|||
|
|
March 31, 2019
|
|
March 31, 2018
|
|
March 31, 2017
|
|||
Net investment income to average members' equity
(1)
|
|
15.37
|
%
|
|
12.40
|
%
|
|
12.17
|
%
|
Expenses to average members' equity
(1)
|
|
(10.65
|
)%
|
|
(7.85
|
)%
|
|
(6.58
|
)%
|
Internal Rate of Return, end of year
(2)
|
|
14.15
|
%
|
|
16.77
|
%
|
|
18.78
|
%
|
(1)
|
Ratios are calculated by dividing the indicated amount by average members' equity measured as of the end of each quarter during the period.
|
(2)
|
The internal rate of return since inception ("IRR") of the members is computed based on the actual dates of cash inflows, outflows and the ending net assets at the end of the year of the members' equity account as of each measurement date. The IRR includes actual cash payments and does not include distributions declared but not yet paid.
|