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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended September 30, 2019
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
(State or jurisdiction of
incorporation or organization) |
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83-0566439
(I.R.S. Employer
Identification No.) |
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333 South Grand Avenue, 28th Floor
Los Angeles, CA
(Address of principal executive office)
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90071
(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Exchange on Which Registered
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N/A
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N/A
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N/A
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Class
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Outstanding at December 16, 2019
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Common stock, $0.001 par value
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8,309,861
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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•
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Portfolio Positioning. Our Adviser intends to generate a competitive return on equity and sustainable, consistent dividends through (1) opportunistically investing across the capital structure, (2) seeking to take advantage of dislocations in financing markets and other situations that may benefit from our Adviser’s restructuring expertise and (3) generating capital appreciation and income through secondary investments at discounts to par in either private or syndicated transactions.
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•
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Emphasis on Proprietary Deals. Our Adviser is focused on proprietary opportunities as well as partnering with other lenders as appropriate. Dedicated sourcing professionals of our Adviser are in continuous contact with financial sponsors and corporate clients to originate proprietary deals and seek to leverage the networks and relationships of Oaktree’s Investment Professionals with management teams and corporations to originate non-sponsored transactions. Since 2005, our Adviser has invested more than $14 billion in over 250 directly originated loans, and the Oaktree platform has the capacity to invest in large deals and to solely underwrite transactions.
|
•
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Focus On Quality Companies And Extensive Diligence. Our Adviser seeks to maintain a conservative approach to investing with discipline around fundamental credit analysis and downside protection. Our Adviser intends to focus on companies with business models we expect to be resilient in the future, underlying fundamentals that will provide strength in future downturns, significant asset or enterprise value and seasoned management teams, although not all portfolio companies will meet each of these criteria. Our Adviser intends to leverage its deep credit and deal structuring expertise to lend to companies that have unique needs, complex business models or specific business challenges. Our Adviser conducts diligence on underlying collateral value, including cash flows, hard assets or intellectual property, and will typically model exit scenarios as part of the diligence process, including assessing potential “work-out” scenarios.
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•
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Disciplined Portfolio Management. Our Adviser monitors our portfolio on an ongoing basis to manage risk and take preemptive action to resolve potential problems where possible. Our Adviser intends to seek to reduce the impact of individual investment risks by diversifying portfolios across industry sectors and limiting positions to no more than 5% of our portfolio after we have drawn down and invested our remaining Capital Commitments.
|
•
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Manage Risk Through Loan Structures. Our Adviser seeks to leverage its experience in identifying structural risks in prospective portfolio companies and developing customized solutions in an effort to enhance downside protection where possible. Our Adviser has the expertise to structure comprehensive, flexible and customized solutions for companies of all sizes across numerous industry sectors. Our Adviser employs a rigorous due diligence process and seeks to include covenant protections designed to ensure that we, as the lender, can negotiate with a portfolio company before a deal reaches impairment. The Oaktree platform has the ability to address a wide range of borrower needs, with capability to invest across the capital structure and to fund large loans, and our Adviser pays close attention to market trends. Our Adviser provides certainty to borrowers by seeking to provide fully underwritten financing commitments and has expertise in both performing credit as well as restructuring and turnaround situations, which we expect will allow us to invest and lend during times of market stress when our competitors may halt investment activity.
|
•
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Covenant Protections. We generally expect to invest in loans that have covenants that may help to minimize our risk of capital loss and meaningful equity investments in the portfolio company. We intend to target investments that have strong credit protections, including default penalties, information rights and affirmative, negative and financial covenants, such as limitations on debt incurrence, lien protection and prohibitions on dividends.
|
•
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Sustainable Cash Flow. Our investment philosophy places emphasis on fundamental analysis from an investor’s perspective and has a distinct value orientation. We intend to focus on companies with significant asset or enterprise value in which we can invest at relatively low multiples of normalized operating cash flow. Additionally, we anticipate investing in companies with a demonstrated ability or credible plan to de-lever. Typically, we will not invest in start-up companies, companies having speculative business plans or structures that could impair capital over the long-term although we may target certain earlier stage companies that have yet to reach profitability.
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•
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Experienced Management Team. We generally will look to invest in portfolio companies with an experienced management team and proper incentive arrangements, including equity compensation, to induce management to succeed and to act in concert with our interests as investors.
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•
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Strong Relative Position In Its Market. We intend to target companies with what we believe to be established and leading market positions within their respective markets and well-developed long-term business strategies.
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•
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Exit Strategy. We generally intend to invest in companies that we believe will provide us with the opportunity to exit our investments in three to eight years, including through (1) the repayment of the remaining principal outstanding at maturity, (2) the recapitalization of the company resulting in our debt investments being repaid and (3) the sale of the company resulting in the repayment of all of its outstanding debt.
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•
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Geography. As a BDC, we will invest at least 70% of our investments in U.S. companies. To the extent we invest in non-U.S. companies, we intend to do so in accordance with Investment Company Act limitations and only in jurisdictions with established legal frameworks and a history of respecting creditor rights.
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(a)
|
Hurdle Rate Return: No Investment Income Incentive Fee in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate;
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(b)
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Catch-Up: 100% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than a 1.875% (7.5% annualized) rate of return on the value of our net assets in such calendar quarter (the “Catch-Up”), which is intended to provide our Adviser with 20% of the Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply, if the Pre-Incentive Fee Net Investment Income exceeds the Hurdle Rate in such calendar quarter; and
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(c)
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80/20 Split: 20% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds a 1.875% (7.5% annualized) rate of return on the value of our net assets in such calendar quarter, so that once the Hurdle Rate is reached and the Catch-Up in (b) immediately above is achieved, 20% of the Pre-Incentive Fee Net Investment Income thereafter is allocated to our Adviser.
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•
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Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”).
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•
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Year 2: Investment A sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million.
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•
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Year 3: FMV of Investment B determined to be $25 million.
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•
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Year 4: Investment B sold for $31 million.
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•
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Year 1: None.
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•
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Year 2: $6.0 million Capital Gains Incentive Fee, calculated as follows: $30 million realized capital gains on sale of Investment A multiplied by 20%.
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•
|
Year 3: None; calculated as follows:(6) $5.0 million cumulative fee (20% multiplied by $25 million ($30 million cumulative capital gains less $5 million cumulative unrealized capital depreciation)) less $6.0 million (previous capital gains fee paid in Year 2).
|
•
|
Year 4: $200,000 Capital Gains Incentive Fee, calculated as follows: $6.2 million cumulative fee (20% multiplied by $31 million cumulative realized capital gains ($30 million from Investment A and $1 million from Investment B)) less $6.0 million (previous capital gains fee paid in Year 2).
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•
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Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”).
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•
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Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million.
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•
|
Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million.
|
•
|
Year 4: FMV of Investment B determined to be $35 million.
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•
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Year 5: Investment B sold for $20 million.
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•
|
Year 1: None.
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•
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Year 2: $5.0 million Capital Gains Incentive Fee, calculated as follows: 20% multiplied by $25 million ($30 million realized capital gains on sale of Investment A less $5 million unrealized capital depreciation on Investment B).
|
•
|
Year 3: $1.4 million Capital Gains Incentive Fee, calculated as follows: $6.4 million cumulative fee (20% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million cumulative unrealized capital depreciation)) less $5.0 million (previous capital gains fee paid in Year 2).
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•
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Year 4: $600,000 capital gains incentive fee, calculated as follows: $7.0 million cumulative fee (20% multiplied by $35 million cumulative realized capital gains) less $6.4 million (previous cumulative capital gains fee paid in Year 2 and Year 3).
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•
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Year 5: None. $5.0 million cumulative fee (20% multiplied by $25 million ($35 million cumulative realized capital gains less $10 million realized capital losses)) less $7.0 million (previous cumulative capital gains fee paid in Years 2, 3 and 4).
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1.
|
The hypothetical amount of Pre-Incentive Fee Net Investment Income shown is expressed as a rate of return as of the beginning and the end of the immediately preceding calendar quarter. Solely for purposes of these illustrative examples, it has been assumed that we have not incurred any leverage. However, we expect to use leverage to partially finance our investments.
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2.
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Represents 6.0% annualized Hurdle Rate.
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3.
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Represents 1.00% annualized Management Fee.
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4.
|
Hypothetical other expenses. Excludes organizational and offering expenses.
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5.
|
The “Catch-Up” provision is intended to provide our Adviser with an Incentive Fee of approximately 20% on all of the Pre-Incentive Fee Net Investment Income, as if a Hurdle Rate did not apply, when the net investment income exceeds 1.875% in any calendar quarter.
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6.
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If the Investment Advisory Agreement is terminated on a date other than December 31 of any year, we may pay aggregate Capital Gains Incentive Fees that are more than the amount of such fees that would have been payable if the Investment Advisory Agreement had been terminated on December 31 of such year. This would occur if the FMV of an investment declined between the time the Investment Advisory Agreement was terminated and December 31.
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•
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qualify as a RIC; and
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•
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satisfy the Annual Distribution Requirement;
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•
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at all times during each tax year, have in effect an election to be treated as a BDC under the Investment Company Act;
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•
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derive in each tax year at least 90% of our gross income from (a) dividends, interest, payments with respect to certain securities (including loans), gains from the sale of stock or other securities or currencies, or other income derived with respect to our business of investing in such stock, securities or currencies and (b) net income derived from an interest in a “qualified publicly traded partnership;” (the “90% Gross Income Test”) and
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•
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diversify our holdings so that at the end of each quarter of the tax year:
|
◦
|
(i) 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 its assets or more than 10% of the outstanding voting securities of the issuer; and
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◦
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(ii) no more than 25% of the value of our assets is invested in (a) the securities, other than U.S. government securities or securities of other RICs, of one issuer, (b) the securities 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 (c) the securities of one or more “qualified publicly traded partnerships” ((i) and (ii) collectively, the “Diversification Tests”).
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(1)
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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. An eligible portfolio company is defined in the Investment Company Act as any issuer which:
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(a)
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is organized under the laws of, and has its principal place of business in, the United States;
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(b)
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is not an investment company (other than a small business investment company wholly owned by the BDC) or a company that would be an investment company but for certain exclusions under the Investment Company Act; and
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(c)
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satisfies any of the following:
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i.
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does not have any class of securities that is traded on a national securities exchange;
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ii.
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has a class of securities listed on a national securities exchange, but has an aggregate market value of outstanding voting and non-voting common equity of less than $250 million;
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iii.
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is controlled by a BDC or a group of companies including a BDC and the BDC has an affiliated person who is a director of the eligible portfolio company; or
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iv.
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is a small and solvent company having total assets of not more than $4.0 million and capital and surplus of not less than $2.0 million.
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(2)
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Securities of any eligible portfolio company which we control.
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(3)
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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.
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(4)
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Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.
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(5)
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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.
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(6)
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Cash, cash equivalents, U.S. government securities or high-quality debt securities maturing in one year or less from the time of investment.
|
•
|
pursuant to Rule 13a-14 under 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;
|
•
|
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 under the Exchange Act, our management is required to prepare a report regarding its assessment of our internal control over financial reporting and (starting from the date on which we cease to be an emerging growth company under the JOBS Act and have become an "accelerated filer" under the Exchange Act) must obtain an audit performed by our independent registered public accounting firm of the effectiveness of the Company's internal control over financial reporting. Foregoing the attestation requirement may increase the risk that material weaknesses or other deficiencies in our internal control over financial reporting go undetected; and
|
•
|
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 controls 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 material weaknesses.
|
Assumed Return on Portfolio (Net of Expenses)
|
- 10%
|
- 5%
|
0%
|
5%
|
10%
|
||||||||||
Corresponding net return to common stockholder
|
-16.66%
|
-9.25%
|
-1.83%
|
5.59%
|
13.01%
|
•
|
provide that our board of directors is classified, which may delay the ability of holders of Common Stock to change the membership of a majority of our board of directors;
|
•
|
do not provide for cumulative voting;
|
•
|
provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of remaining directors then in office (even if they constitute less than a quorum), or by a sole remaining director, subject to any applicable requirements of the Investment Company Act and the rights of any holders of preferred stock;
|
•
|
provide that our board of directors may be removed only for cause, and only by a supermajority vote of the stockholders entitled to elect such directors;
|
•
|
provide that, following a Qualified Listing, stockholders may only take action at an annual or special meeting, and may not act by written consent;
|
•
|
restrict stockholders’ ability to call special meetings; and
|
•
|
require a vote of 75% of stockholders to effect certain amendments to our Governing Documents.
|
•
|
OID and PIK instruments may have higher yields, which reflect the payment deferral and credit risk associated with these instruments;
|
•
|
OID and PIK accruals may create uncertainty about the source of our distributions to stockholders;
|
•
|
OID and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of the collateral; and
|
•
|
OID and PIK instruments may represent a higher credit risk than coupon loans.
|
|
As of September 30, 2019 and for the year ended September 30, 2019
|
|
As of September 30, 2018 and for the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
||||
Statement of Operations data:
|
|
|
|
||||
Total investment income
|
$
|
11,667,397
|
|
|
$
|
110,886
|
|
Base management fee
|
1,570,326
|
|
|
39,726
|
|
||
Investment income incentive fee
|
411,257
|
|
|
—
|
|
||
Capital gains incentive fee
|
385,550
|
|
|
42,021
|
|
||
All other expenses
|
5,608,624
|
|
|
701,695
|
|
||
Net investment income (loss)
|
3,691,640
|
|
|
(672,556
|
)
|
||
Net unrealized appreciation (depreciation)
|
1,691,630
|
|
|
210,104
|
|
||
Net realized gains (losses)
|
236,124
|
|
|
—
|
|
||
Net increase (decrease) in net assets resulting from operations
|
5,619,394
|
|
|
(462,452
|
)
|
||
Per share data:
|
|
|
|
||||
Net asset value per common share at period end
|
$
|
20.65
|
|
|
$
|
19.70
|
|
Net investment income (loss) (1)
|
0.90
|
|
|
(0.70
|
)
|
||
Net unrealized appreciation (depreciation) (1)
|
0.41
|
|
|
0.22
|
|
||
Net realized gains (losses) (1)
|
0.06
|
|
|
—
|
|
||
Net increase (decrease) in net assets resulting from operations (1)
|
1.37
|
|
|
(0.48
|
)
|
||
Balance Sheet data at period end:
|
|
|
|
||||
Total investments at fair value
|
$
|
291,147,011
|
|
|
$
|
25,232,606
|
|
Cash, cash equivalents and restricted cash
|
11,348,126
|
|
|
10,131,268
|
|
||
Other assets
|
8,454,350
|
|
|
872,878
|
|
||
Total assets
|
310,949,487
|
|
|
36,236,752
|
|
||
Credit facility
|
83,000,000
|
|
|
—
|
|
||
Other liabilities
|
56,322,737
|
|
|
5,864,435
|
|
||
Total liabilities
|
139,322,737
|
|
|
5,864,435
|
|
||
Total net assets
|
171,626,750
|
|
|
30,372,317
|
|
||
Other data:
|
|
|
|
||||
Weighted average yield on debt investments at fair value (2)
|
7.1
|
%
|
|
7.7
|
%
|
||
Number of portfolio companies at period end
|
69
|
|
|
16
|
|
(1)
|
Calculated based on weighted average shares outstanding for the period.
|
(2)
|
Weighted average yield is calculated based upon our debt investments at fair value at the end of the period.
|
•
|
our future operating results and distribution projections;
|
•
|
the ability of our Adviser to implement its future plans with respect to our business and to achieve our investment objective;
|
•
|
the ability of Oaktree to attract and retain highly talented professionals;
|
•
|
our business prospects and the prospects of our portfolio companies;
|
•
|
the impact of the investments that we expect to make;
|
•
|
the ability of our portfolio companies to achieve their objectives;
|
•
|
our expected financings and investments and additional leverage we may seek to incur in the future;
|
•
|
the adequacy of our cash resources and working capital; and
|
•
|
the timing of cash flows, if any, from the operations of our portfolio companies.
|
•
|
changes or potential disruptions in our operations, the economy, financial markets or political environment;
|
•
|
future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities) and conditions in our operating areas, particularly with respect to business development companies or RICs; and
|
•
|
other considerations that may be disclosed from time to time in our publicly disseminated documents and filings.
|
•
|
Level I - Quoted unadjusted prices for identical instruments in active markets to which we have access at the date of measurement. The types of investments in Level I include exchange traded equities, debt and derivatives with quoted prices.
|
•
|
Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable. Level II inputs include interest rates, yield curves, volatilities, prepayment risks, loss severities, credit risks and default rates. The types of investments in Level II generally include corporate bonds and loans, government and agency securities, less liquid and restricted equity investments, over-the-counter traded derivatives and other investments where the fair value is based on observable inputs.
|
•
|
Level III - Valuations for which one or more significant inputs are unobservable. These inputs reflect our assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices obtained from brokers in markets for which there are few transactions, less public information exists or prices vary among brokered market makers. The types of investments in Level III include non-publicly traded equity, debt, real estate and derivatives.
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Cost:
|
|
|
|
|
||||
Senior secured debt
|
|
$
|
281,238,755
|
|
|
$
|
21,868,595
|
|
Subordinated debt
|
|
7,201,102
|
|
|
3,141,284
|
|
||
Common equity & warrants
|
|
772,692
|
|
|
—
|
|
||
Preferred equity
|
|
110,285
|
|
|
—
|
|
||
Total
|
|
$
|
289,322,834
|
|
|
$
|
25,009,879
|
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Fair Value:
|
|
|
|
|
||||
Senior secured debt
|
|
$
|
282,841,206
|
|
|
$
|
22,058,366
|
|
Subordinated debt
|
|
7,325,965
|
|
|
3,174,240
|
|
||
Common equity & warrants
|
|
869,555
|
|
|
—
|
|
||
Preferred equity
|
|
110,285
|
|
|
—
|
|
||
Total
|
|
$
|
291,147,011
|
|
|
$
|
25,232,606
|
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||
Fair Value:
|
|
|
|
|
||
Application Software
|
|
20.64
|
%
|
|
5.48
|
%
|
Biotechnology
|
|
7.14
|
%
|
|
5.14
|
%
|
Internet Services & Infrastructure
|
|
6.52
|
%
|
|
1.03
|
%
|
Integrated Telecommunication Services
|
|
6.38
|
%
|
|
2.83
|
%
|
Systems Software
|
|
4.51
|
%
|
|
—
|
%
|
Health Care Technology
|
|
4.27
|
%
|
|
6.01
|
%
|
Health Care Services
|
|
3.78
|
%
|
|
—
|
%
|
Diversified Support Services
|
|
3.22
|
%
|
|
7.96
|
%
|
Alternative Carriers
|
|
3.22
|
%
|
|
—
|
%
|
Real Estate Services
|
|
3.05
|
%
|
|
—
|
%
|
Pharmaceuticals
|
|
2.90
|
%
|
|
17.38
|
%
|
Data Processing & Outsourced Services
|
|
2.80
|
%
|
|
—
|
%
|
Oil & Gas Refining & Marketing
|
|
2.75
|
%
|
|
—
|
%
|
Research & Consulting Services
|
|
2.74
|
%
|
|
—
|
%
|
Aerospace & Defense
|
|
2.40
|
%
|
|
5.84
|
%
|
Interactive Media & Services
|
|
2.31
|
%
|
|
—
|
%
|
Auto Parts & Equipment
|
|
2.00
|
%
|
|
3.97
|
%
|
Financial Exchanges & Data
|
|
1.95
|
%
|
|
—
|
%
|
IT Consulting & Other Services
|
|
1.83
|
%
|
|
—
|
%
|
Personal Products
|
|
1.73
|
%
|
|
—
|
%
|
Health Care Equipment
|
|
1.72
|
%
|
|
—
|
%
|
Cable & Satellite
|
|
1.46
|
%
|
|
—
|
%
|
Managed Health Care
|
|
1.37
|
%
|
|
15.82
|
%
|
Insurance Brokers
|
|
1.35
|
%
|
|
—
|
%
|
Movies & Entertainment
|
|
1.20
|
%
|
|
—
|
%
|
Specialized REITs
|
|
1.15
|
%
|
|
—
|
%
|
Trading Companies & Distributors
|
|
1.03
|
%
|
|
—
|
%
|
Publishing
|
|
0.68
|
%
|
|
8.02
|
%
|
Household Products
|
|
0.65
|
%
|
|
—
|
%
|
Metal & Glass Containers
|
|
0.48
|
%
|
|
6.00
|
%
|
Industrial Machinery
|
|
0.47
|
%
|
|
5.91
|
%
|
Electric Utilities
|
|
0.42
|
%
|
|
—
|
%
|
Health Care Distributors
|
|
0.39
|
%
|
|
—
|
%
|
Construction & Engineering
|
|
0.34
|
%
|
|
—
|
%
|
Food Retail
|
|
0.34
|
%
|
|
5.83
|
%
|
Oil & Gas Equipment & Services
|
|
0.30
|
%
|
|
—
|
%
|
Specialized Finance
|
|
0.27
|
%
|
|
—
|
%
|
Oil & Gas Exploration & Production
|
|
0.24
|
%
|
|
2.78
|
%
|
Total
|
|
100.00
|
%
|
|
100.00
|
%
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||
Fair Value:
|
|
|
|
|
||
United States
|
|
89.06
|
%
|
|
77.11
|
%
|
United Kingdom
|
|
3.81
|
%
|
|
2.78
|
%
|
Luxembourg
|
|
2.64
|
%
|
|
14.28
|
%
|
France
|
|
1.81
|
%
|
|
—
|
%
|
Iceland
|
|
1.61
|
%
|
|
—
|
%
|
Canada
|
|
0.99
|
%
|
|
5.83
|
%
|
Denmark
|
|
0.08
|
%
|
|
—
|
%
|
Total
|
|
100.00
|
%
|
|
100.00
|
%
|
|
|
Year ended September 30, 2019
|
|
For the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
||||
Expenses:
|
|
|
|
|
||||
Base management fee
|
|
$
|
1,570,326
|
|
|
$
|
39,726
|
|
Investment income incentive fee
|
|
411,257
|
|
|
—
|
|
||
Capital gains incentive fee
|
|
385,550
|
|
|
42,021
|
|
||
Offering costs
|
|
642,205
|
|
|
87,598
|
|
||
Organization expenses
|
|
56,921
|
|
|
399,894
|
|
||
Professional fees
|
|
810,823
|
|
|
95,000
|
|
||
Directors fees
|
|
105,000
|
|
|
26,250
|
|
||
Interest expense
|
|
2,817,393
|
|
|
—
|
|
||
Administrator expense
|
|
421,173
|
|
|
12,780
|
|
||
General and administrative expenses
|
|
740,594
|
|
|
80,173
|
|
||
Total expenses
|
|
$
|
7,961,242
|
|
|
$
|
783,442
|
|
|
|
Shares Issued
|
|
Price per Share
|
|
Proceeds
|
|||||
August 6, 2018 (1)
|
|
770,869
|
|
|
$
|
20.00
|
|
|
$
|
15,417,385
|
|
September 17, 2018
|
|
770,869
|
|
|
20.00
|
|
|
15,417,384
|
|
||
October 29, 2018
|
|
1,060,964
|
|
|
19.85
|
|
|
21,060,130
|
|
||
November 15, 2018
|
|
789,198
|
|
|
19.82
|
|
|
15,641,900
|
|
||
April 29, 2019
|
|
1,655,314
|
|
|
20.40
|
|
|
33,768,400
|
|
||
August 30, 2019
|
|
1,631,324
|
|
|
20.70
|
|
|
33,768,400
|
|
||
September 23, 2019
|
|
1,631,323
|
|
|
20.70
|
|
|
33,768,399
|
|
||
Total
|
|
8,309,861
|
|
|
|
|
$
|
168,841,998
|
|
(1)
|
Includes 50 shares issued to one or more affiliates of the Adviser on July 23, 2018.
|
|
|
Payments due by period as of September 30, 2019
|
||||||||||||||||||
|
|
Total
|
|
< 1 year
|
|
1-3 years
|
|
3-5 years
|
|
> 5 years
|
||||||||||
CNB Facility
|
|
$
|
65,000,000
|
|
|
$
|
—
|
|
|
$
|
65,000,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest due on CNB Facility
|
|
2,534,746
|
|
|
2,428,300
|
|
|
106,446
|
|
|
—
|
|
|
—
|
|
|||||
Citibank Facility
|
|
18,000,000
|
|
|
—
|
|
|
—
|
|
|
18,000,000
|
|
|
—
|
|
|||||
Interest due on Citibank Facility
|
|
3,417,418
|
|
|
708,323
|
|
|
1,416,647
|
|
|
1,292,448
|
|
|
—
|
|
|||||
Total
|
|
$
|
88,952,164
|
|
|
$
|
3,136,623
|
|
|
$
|
66,523,093
|
|
|
$
|
19,292,448
|
|
|
$
|
—
|
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Assembled Brands Capital LLC
|
|
$
|
3,807,021
|
|
|
$
|
—
|
|
PaySimple, Inc.
|
|
2,695,000
|
|
|
—
|
|
||
Sorrento Therapeutics, Inc.
|
|
2,400,000
|
|
|
—
|
|
||
OEConnection LLC
|
|
817,204
|
|
|
—
|
|
||
Mindbody, Inc.
|
|
761,905
|
|
|
—
|
|
||
Apptio, Inc.
|
|
461,538
|
|
|
—
|
|
||
iCIMs, Inc.
|
|
88,235
|
|
|
88,235
|
|
||
|
|
$
|
11,030,903
|
|
|
$
|
88,235
|
|
Year Ended
|
|
Qualified Net Interest Income
|
Qualified Short-Term Capital Gains
|
||
September 30, 2019
|
|
96.0
|
%
|
—
|
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||
($ in thousands)
|
|
Fair Value
|
|
% of Floating
Rate Portfolio
|
|
Fair Value
|
|
% of Floating
Rate Portfolio
|
||||||
Under 1%
|
|
$
|
155,679,055
|
|
|
57.52
|
%
|
|
$
|
16,239,712
|
|
|
73.62
|
%
|
1% to 2%
|
|
114,974,092
|
|
|
42.48
|
|
|
5,818,654
|
|
|
26.38
|
|
||
Total
|
|
$
|
270,653,147
|
|
|
100.00
|
%
|
|
$
|
22,058,366
|
|
|
100.00
|
%
|
Basis point increase
|
|
Interest
income
|
|
Interest
expense
|
|
Net increase
(decrease)
|
||||||
300
|
|
$
|
8,201,235
|
|
|
$
|
(2,490,000
|
)
|
|
$
|
5,711,235
|
|
200
|
|
5,467,490
|
|
|
(1,660,000
|
)
|
|
3,807,490
|
|
|||
100
|
|
2,733,745
|
|
|
(830,000
|
)
|
|
1,903,745
|
|
Basis point decrease (1)
|
|
Interest
income
|
|
Interest
expense
|
|
Net increase
(decrease)
|
||||||
100
|
|
$
|
(2,653,368
|
)
|
|
$
|
830,000
|
|
|
$
|
(1,823,368
|
)
|
200
|
|
(4,226,279
|
)
|
|
1,660,000
|
|
|
(2,566,279
|
)
|
|
|
September 30, 2019
|
|
September 30, 2018
|
|||||||||
|
|
Debt Investments
|
|
Borrowings
|
|
Debt Investments
|
|
||||||
LIBOR:
|
|
|
|
|
|
|
|
||||||
30 day
|
|
$
|
177,185,974
|
|
|
$
|
65,000,000
|
|
|
$
|
10,204,227
|
|
|
60 day
|
|
—
|
|
|
—
|
|
|
3,000,000
|
|
|
|||
90 day
|
|
92,053,874
|
|
|
18,000,000
|
|
|
6,000,000
|
|
|
|||
180 day
|
|
1,409,167
|
|
|
—
|
|
|
—
|
|
|
|||
EURIBOR:
|
|
|
|
|
|
|
|
||||||
30 day
|
|
2,725,500
|
|
|
—
|
|
|
2,903,750
|
|
|
|||
Fixed rate
|
|
19,020,775
|
|
|
—
|
|
|
4,096,000
|
|
|
|||
Total
|
|
$
|
292,395,290
|
|
|
$
|
83,000,000
|
|
|
$
|
26,203,977
|
|
|
|
|
September 30,
2019 |
|
September 30,
2018 |
||||
ASSETS
|
|
|
||||||
Assets:
|
|
|
|
|
||||
Investments – Non-control/Non-affiliate, at fair value (cost September 30, 2019: $289,322,834; cost September 30, 2018: $25,009,879)
|
|
$
|
291,147,011
|
|
|
$
|
25,232,606
|
|
Cash and cash equivalents
|
|
11,079,015
|
|
|
10,131,268
|
|
||
Restricted cash
|
|
269,111
|
|
|
—
|
|
||
Interest receivable
|
|
1,005,398
|
|
|
87,979
|
|
||
Receivables from unsettled transactions
|
|
5,326,435
|
|
|
—
|
|
||
Derivative assets at fair value
|
|
77,558
|
|
|
—
|
|
||
Deferred financing costs
|
|
1,314,732
|
|
|
—
|
|
||
Deferred offering costs
|
|
—
|
|
|
519,302
|
|
||
Receivable for shares sold
|
|
347,500
|
|
|
40,000
|
|
||
Other assets
|
|
382,727
|
|
|
225,597
|
|
||
Total assets
|
|
$
|
310,949,487
|
|
|
$
|
36,236,752
|
|
LIABILITIES AND NET ASSETS
|
|
|
||||||
Liabilities:
|
|
|
|
|
||||
Accounts payable, accrued expenses and other liabilities
|
|
$
|
999,579
|
|
|
$
|
307,213
|
|
Base management fee and incentive fee payable
|
|
1,128,658
|
|
|
81,747
|
|
||
Due to affiliates
|
|
753,665
|
|
|
1,114,484
|
|
||
Interest payable
|
|
1,065,903
|
|
|
—
|
|
||
Payables from unsettled transactions
|
|
52,374,932
|
|
|
4,334,741
|
|
||
Director fees payable
|
|
—
|
|
|
26,250
|
|
||
Credit facilities payable
|
|
83,000,000
|
|
|
—
|
|
||
Total liabilities
|
|
139,322,737
|
|
|
5,864,435
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
||||
Net assets:
|
|
|
|
|
||||
Common stock, $0.001 par value per share, 250,000,000 shares authorized; 8,309,861 shares issued and outstanding at September 30, 2019; 1,541,738 shares issued and outstanding at September 30, 2018
|
|
8,310
|
|
|
1,542
|
|
||
Preferred stock, $0.001 par value per share, 100,000,000 shares authorized; none issued and outstanding at September 30, 2019 and September 30, 2018
|
|
—
|
|
|
—
|
|
||
Additional paid-in-capital
|
|
168,819,173
|
|
|
30,833,227
|
|
||
Accumulated distributable earnings (loss)
|
|
2,799,267
|
|
|
(462,452
|
)
|
||
Total net assets (equivalent to $20.65 and $19.70 per common share at September 30, 2019 and 2018, respectively) (Note 10)
|
|
171,626,750
|
|
|
30,372,317
|
|
||
Total liabilities and net assets
|
|
$
|
310,949,487
|
|
|
$
|
36,236,752
|
|
|
|
Year ended September 30, 2019
|
|
For the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
||||
Interest income:
|
|
|
|
|
||||
Non-control/Non-affiliate investments
|
|
$
|
10,529,550
|
|
|
$
|
105,530
|
|
Interest on cash and cash equivalents
|
|
108,057
|
|
|
5,356
|
|
||
Total interest income
|
|
10,637,607
|
|
|
110,886
|
|
||
PIK interest income:
|
|
|
|
|
||||
Non-control/Non-affiliate investments
|
|
558,051
|
|
|
—
|
|
||
Total PIK interest income
|
|
558,051
|
|
|
—
|
|
||
Fee income:
|
|
|
|
|
||||
Non-control/Non-affiliate investments
|
|
471,739
|
|
|
—
|
|
||
Total fee income
|
|
471,739
|
|
|
—
|
|
||
Total investment income
|
|
11,667,397
|
|
|
110,886
|
|
||
Expenses:
|
|
|
|
|
||||
Base management fee
|
|
1,570,326
|
|
|
39,726
|
|
||
Investment income incentive fee
|
|
411,257
|
|
|
—
|
|
||
Capital gains incentive fee
|
|
385,550
|
|
|
42,021
|
|
||
Offering costs
|
|
642,205
|
|
|
87,598
|
|
||
Organization expenses
|
|
56,921
|
|
|
399,894
|
|
||
Professional fees
|
|
810,823
|
|
|
95,000
|
|
||
Directors fees
|
|
105,000
|
|
|
26,250
|
|
||
Interest expense
|
|
2,817,393
|
|
|
—
|
|
||
Administrator expense
|
|
421,173
|
|
|
12,780
|
|
||
General and administrative expenses
|
|
740,594
|
|
|
80,173
|
|
||
Total expenses
|
|
7,961,242
|
|
|
783,442
|
|
||
Net investment income (loss) before taxes
|
|
3,706,155
|
|
|
(672,556
|
)
|
||
Excise tax expense
|
|
14,515
|
|
|
—
|
|
||
Net investment income (loss)
|
|
3,691,640
|
|
|
(672,556
|
)
|
||
Unrealized appreciation (depreciation):
|
|
|
|
|
||||
Non-control/Non-affiliate investments
|
|
1,614,072
|
|
|
210,104
|
|
||
Foreign currency forward contracts
|
|
77,558
|
|
|
—
|
|
||
Net unrealized appreciation (depreciation)
|
|
1,691,630
|
|
|
210,104
|
|
||
Realized gains (losses):
|
|
|
|
|
||||
Non-control/Non-affiliate investments
|
|
82,402
|
|
|
—
|
|
||
Foreign currency forward contracts
|
|
153,722
|
|
|
—
|
|
||
Net realized gains (losses)
|
|
236,124
|
|
|
—
|
|
||
Net realized and unrealized gains (losses)
|
|
1,927,754
|
|
|
210,104
|
|
||
Net increase (decrease) in net assets resulting from operations
|
|
$
|
5,619,394
|
|
|
$
|
(462,452
|
)
|
Net investment income (loss) per common share — basic and diluted
|
|
$
|
0.90
|
|
|
$
|
(0.70
|
)
|
Earnings (loss) per common share — basic and diluted (Note 5)
|
|
$
|
1.37
|
|
|
$
|
(0.48
|
)
|
Weighted average common shares outstanding — basic and diluted
|
|
4,094,929
|
|
|
963,587
|
|
|
|
Year ended September 30, 2019
|
|
For the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
||||
Operations:
|
|
|
|
|
||||
Net investment income (loss)
|
|
$
|
3,691,640
|
|
|
$
|
(672,556
|
)
|
Net unrealized appreciation (depreciation)
|
|
1,691,630
|
|
|
210,104
|
|
||
Net realized gains (losses)
|
|
236,124
|
|
|
—
|
|
||
Net increase (decrease) in net assets resulting from operations
|
|
5,619,394
|
|
|
(462,452
|
)
|
||
Capital share transactions:
|
|
|
|
|
||||
Distributions to stockholders
|
|
(2,372,190
|
)
|
|
—
|
|
||
Net increase (decrease) in net assets from capital share transactions
|
|
(2,372,190
|
)
|
|
—
|
|
||
Capital share transactions:
|
|
|
|
|
||||
Issuance of common stock
|
|
138,007,229
|
|
|
30,833,769
|
|
||
Net increase (decrease) in net assets from capital share transactions
|
|
138,007,229
|
|
|
30,833,769
|
|
||
Total increase (decrease) in net assets
|
|
141,254,433
|
|
|
30,371,317
|
|
||
Net assets at beginning of period
|
|
30,372,317
|
|
|
1,000
|
|
||
Net assets at end of period
|
|
$
|
171,626,750
|
|
|
$
|
30,372,317
|
|
Net asset value per common share
|
|
$
|
20.65
|
|
|
$
|
19.70
|
|
Common shares outstanding at end of period
|
|
8,309,861
|
|
|
1,541,738
|
|
|
|
Year ended September 30, 2019
|
|
For the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
||||
Operating activities:
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
|
$
|
5,619,394
|
|
|
$
|
(462,452
|
)
|
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash used in operating activities:
|
|
|
|
|
||||
Net unrealized (appreciation) depreciation
|
|
(1,691,630
|
)
|
|
(210,104
|
)
|
||
Net realized (gains) losses
|
|
(236,124
|
)
|
|
—
|
|
||
PIK interest income
|
|
(558,051
|
)
|
|
—
|
|
||
Accretion of original issue discount on investments
|
|
(883,180
|
)
|
|
(1,531
|
)
|
||
Amortization of deferred financing costs
|
|
304,888
|
|
|
—
|
|
||
Amortization of deferred offering costs
|
|
642,205
|
|
|
87,598
|
|
||
Purchases of investments
|
|
(287,154,230
|
)
|
|
(25,015,886
|
)
|
||
Proceeds from sales and repayments of investments
|
|
24,405,237
|
|
|
7,538
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
(Increase) decrease in interest receivable
|
|
(917,419
|
)
|
|
(87,979
|
)
|
||
(Increase) decrease in other assets
|
|
(157,130
|
)
|
|
(225,597
|
)
|
||
(Increase) decrease in receivables from unsettled transactions
|
|
(5,326,435
|
)
|
|
—
|
|
||
Increase (decrease) in accounts payable, accrued expenses and other liabilities
|
|
200,489
|
|
|
231,275
|
|
||
Increase (decrease) in base management fee and incentive fee payable
|
|
1,046,911
|
|
|
81,747
|
|
||
Increase (decrease) in due to affiliates
|
|
(284,694
|
)
|
|
583,522
|
|
||
Increase (decrease) in interest payable
|
|
1,065,903
|
|
|
—
|
|
||
Increase (decrease) in payables from unsettled transactions
|
|
48,040,191
|
|
|
4,334,741
|
|
||
Increase (decrease) in director fees payable
|
|
(26,250
|
)
|
|
26,250
|
|
||
Net cash used in operating activities
|
|
(215,909,925
|
)
|
|
(20,650,878
|
)
|
||
Financing activities:
|
|
|
|
|
||||
Distributions paid in cash
|
|
(2,372,190
|
)
|
|
—
|
|
||
Borrowings under the credit facilities
|
|
158,000,000
|
|
|
—
|
|
||
Repayments of borrowings under the credit facilities
|
|
(75,000,000
|
)
|
|
—
|
|
||
Proceeds from the issuance of common stock
|
|
137,699,729
|
|
|
30,793,769
|
|
||
Deferred financing costs paid
|
|
(1,107,121
|
)
|
|
—
|
|
||
Offering costs paid
|
|
(122,903
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
|
217,097,515
|
|
|
30,793,769
|
|
||
Effect of exchange rate changes on foreign currency
|
|
29,268
|
|
|
(12,623
|
)
|
||
Net increase in cash and cash equivalents and restricted cash
|
|
1,216,858
|
|
|
10,130,268
|
|
||
Cash and cash equivalents and restricted cash, beginning of period
|
|
10,131,268
|
|
|
1,000
|
|
||
Cash and cash equivalents and restricted cash, end of period
|
|
$
|
11,348,126
|
|
|
$
|
10,131,268
|
|
Supplemental information:
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
1,446,602
|
|
|
$
|
—
|
|
Deferred offering costs incurred
|
|
$
|
—
|
|
|
$
|
606,900
|
|
Deferred financing costs incurred
|
|
$
|
512,500
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Reconciliation to the Consolidated Statement of Assets and Liabilities
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Cash and cash equivalents
|
|
$
|
11,079,015
|
|
|
$
|
10,131,268
|
|
Restricted cash
|
|
269,111
|
|
|
—
|
|
||
Total cash and cash equivalents and restricted cash
|
|
$
|
11,348,126
|
|
|
$
|
10,131,268
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Non-Control/Non-Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|||||||
Access CIG, LLC
|
|
|
|
Diversified Support Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.75% cash due 2/27/2025
|
|
6.07
|
%
|
|
|
|
$
|
7,551,410
|
|
|
$
|
7,483,710
|
|
|
$
|
7,471,214
|
|
|
(4)
|
|
|
|
|
|
|
|
|
7,483,710
|
|
|
7,471,214
|
|
|
|
|||||
Adient US LLC
|
|
|
|
Auto Parts & Equipment
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 5/6/2024
|
|
6.46
|
%
|
|
|
|
4,987,500
|
|
|
4,962,563
|
|
|
4,918,922
|
|
|
(4)(9)
|
|||
|
|
|
|
|
|
|
|
4,962,563
|
|
|
4,918,922
|
|
|
|
|||||
AI Sirona (Luxembourg) Acquisition S.a.r.l.
|
|
|
|
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|||||||
Second Lien Term Loan, EURIBOR+7.25% cash due 7/10/2026
|
|
7.25
|
%
|
|
|
|
€
|
2,500,000
|
|
|
2,862,090
|
|
|
2,667,597
|
|
|
(4)(9)
|
||
|
|
|
|
|
|
|
|
2,862,090
|
|
|
2,667,597
|
|
|
|
|||||
Air Medical Group Holdings, Inc.
|
|
|
|
Health Care Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 3/14/2025
|
|
6.29
|
%
|
|
|
|
$
|
1,089,907
|
|
|
1,067,643
|
|
|
1,023,602
|
|
|
(4)
|
||
|
|
|
|
|
|
|
|
1,067,643
|
|
|
1,023,602
|
|
|
|
|||||
Aldevron, L.L.C.
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 9/20/2026
|
|
6.36
|
%
|
|
|
|
4,000,000
|
|
|
3,960,000
|
|
|
4,020,000
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
3,960,000
|
|
|
4,020,000
|
|
|
|
|||||
Algeco Scotsman Global Finance Plc
|
|
|
|
Construction & Engineering
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 8.00% cash due 2/15/2023
|
|
|
|
|
|
1,000,000
|
|
|
1,020,274
|
|
|
1,002,800
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
1,020,274
|
|
|
1,002,800
|
|
|
|
|||||
Altice France S.A.
|
|
|
|
Integrated Telecommunication Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 8/14/2026
|
|
6.03
|
%
|
|
|
|
4,000,000
|
|
|
4,000,000
|
|
|
3,997,500
|
|
|
(4)(9)
|
|||
|
|
|
|
|
|
|
|
4,000,000
|
|
|
3,997,500
|
|
|
|
|||||
Alvotech Holdings S.A.
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 15.00% PIK Note A due 12/13/2023
|
|
|
|
|
|
2,000,000
|
|
|
2,203,231
|
|
|
2,444,400
|
|
|
(7)(9)(10)
|
||||
Fixed Rate Bond, 15.00% PIK Note B due 12/13/2023
|
|
|
|
|
|
2,000,000
|
|
|
2,203,231
|
|
|
2,244,400
|
|
|
(7)(9)(10)
|
||||
|
|
|
|
|
|
|
|
4,406,462
|
|
|
4,688,800
|
|
|
|
|||||
Apptio, Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+7.25% cash due 1/10/2025
|
|
9.56
|
%
|
|
|
|
7,129,297
|
|
|
7,001,960
|
|
|
6,997,404
|
|
|
(4)(7)
|
|||
First Lien Revolver, LIBOR+7.25% cash due 1/10/2025
|
|
|
|
|
|
—
|
|
|
(8,119
|
)
|
|
(8,538
|
)
|
|
(4)(7)(8)
|
||||
|
|
|
|
|
|
|
|
6,993,841
|
|
|
6,988,866
|
|
|
|
|||||
Assembled Brands Capital LLC
|
|
|
|
Specialized Finance
|
|
|
|
|
|
|
|
|
|||||||
First Lien Delayed Draw Term Loan, LIBOR+6.00% cash due 10/17/2023
|
|
8.10
|
%
|
|
|
|
—
|
|
|
604,359
|
|
|
604,359
|
|
|
(4)(7)(8)
|
|||
174,131 Class A Units
|
|
|
|
|
|
|
|
82,713
|
|
|
84,576
|
|
|
(7)
|
|||||
110,285 Preferred Units, 6%
|
|
|
|
|
|
|
|
110,285
|
|
|
110,285
|
|
|
(7)
|
|||||
7,621 Class A Warrants (exercise price $3.3778) expiration date 9/9/2029
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|||||
|
|
|
|
|
|
|
|
797,357
|
|
|
799,220
|
|
|
|
|||||
Avantor Inc.
|
|
|
|
Health Care Distributors
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 9.00% cash due 10/1/2025
|
|
|
|
|
|
1,000,000
|
|
|
1,015,805
|
|
|
1,126,250
|
|
|
|
||||
|
|
|
|
|
|
|
|
1,015,805
|
|
|
1,126,250
|
|
|
|
|||||
Ball Metalpack Finco, LLC
|
|
|
|
Metal & Glass Containers
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 7/31/2025
|
|
6.62
|
%
|
|
|
|
1,481,250
|
|
|
1,475,024
|
|
|
1,397,930
|
|
|
(4)(7)(11)
|
|||
|
|
|
|
|
|
|
|
1,475,024
|
|
|
1,397,930
|
|
|
|
|||||
Boxer Parent Company Inc.
|
|
|
|
Systems Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 10/2/2025
|
|
6.29
|
%
|
|
|
|
8,573,368
|
|
|
8,404,544
|
|
|
8,265,456
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
8,404,544
|
|
|
8,265,456
|
|
|
|
|||||
Canyon Buyer, Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 2/15/2025
|
|
6.36
|
%
|
|
|
|
3,969,773
|
|
|
3,926,398
|
|
|
3,949,924
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
3,926,398
|
|
|
3,949,924
|
|
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Cast & Crew Payroll, LLC
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 2/9/2026
|
|
6.05
|
%
|
|
|
|
$
|
3,980,000
|
|
|
$
|
3,940,200
|
|
|
$
|
4,014,825
|
|
|
(4)
|
|
|
|
|
|
|
|
|
3,940,200
|
|
|
4,014,825
|
|
|
|
|||||
CGG Holding (U.S.) Inc.
|
|
|
|
Oil & Gas Equipment & Services
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 9.00% cash due 5/1/2023
|
|
|
|
|
|
819,000
|
|
|
849,160
|
|
|
876,330
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
849,160
|
|
|
876,330
|
|
|
|
|||||
Cincinnati Bell Inc.
|
|
|
|
Integrated Telecommunication Services
|
|
|
|
|
|
|
|
|
|||||||
29,443 Common Equity Shares
|
|
|
|
|
|
|
|
129,979
|
|
|
149,276
|
|
|
|
|||||
First Lien Term Loan, LIBOR+3.25% cash due 10/2/2024
|
|
5.29
|
%
|
|
|
|
4,987,406
|
|
|
4,944,677
|
|
|
4,982,543
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
5,074,656
|
|
|
5,131,819
|
|
|
|
|||||
CITGO Petroleum Corp.
|
|
|
|
Oil & Gas Refining & Marketing
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% cash due 3/28/2024
|
|
7.10
|
%
|
|
|
|
7,960,000
|
|
|
7,880,400
|
|
|
8,009,750
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
7,880,400
|
|
|
8,009,750
|
|
|
|
|||||
Connect U.S. Finco LLC
|
|
|
|
Alternative Carriers
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 9/23/2026
|
|
7.10
|
%
|
|
|
|
9,500,000
|
|
|
9,310,000
|
|
|
9,367,143
|
|
|
(4)(9)(11)
|
|||
|
|
|
|
|
|
|
|
9,310,000
|
|
|
9,367,143
|
|
|
|
|||||
Convergeone Holdings, Inc.
|
|
|
|
IT Consulting & Other Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% cash due 1/4/2026
|
|
7.04
|
%
|
|
|
|
5,908,300
|
|
|
5,690,535
|
|
|
5,341,103
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
5,690,535
|
|
|
5,341,103
|
|
|
|
|||||
Dcert Buyer, Inc.
|
|
|
|
Internet Services & Infrastructure
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 8/8/2026
|
|
6.26
|
%
|
|
|
|
8,000,000
|
|
|
7,980,000
|
|
|
7,985,000
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
7,980,000
|
|
|
7,985,000
|
|
|
|
|||||
DigiCert, Inc.
|
|
|
|
Internet Services & Infrastructure
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 10/31/2024
|
|
6.04
|
%
|
|
|
|
3,922,038
|
|
|
3,887,944
|
|
|
3,921,214
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
3,887,944
|
|
|
3,921,214
|
|
|
|
|||||
DKT Finance APS
|
|
|
|
Integrated Telecommunication Services
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 9.38% cash due 6/17/2023
|
|
|
|
|
|
207,000
|
|
|
215,982
|
|
|
223,250
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
215,982
|
|
|
223,250
|
|
|
|
|||||
The Dun & Bradstreet Corporation
|
|
|
|
Research & Consulting Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% cash due 2/6/2026
|
|
7.05
|
%
|
|
|
|
2,500,000
|
|
|
2,509,371
|
|
|
2,518,525
|
|
|
(4)(11)
|
|||
Fixed Rate Bond, 6.88% cash due 8/15/2026
|
|
|
|
|
|
5,000,000
|
|
|
5,000,000
|
|
|
5,459,375
|
|
|
|
||||
|
|
|
|
|
|
|
|
7,509,371
|
|
|
7,977,900
|
|
|
|
|||||
EHR Canada, LLC
|
|
|
|
Food Retail
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+8.00% cash due 9/28/2020
|
|
10.10
|
%
|
|
|
|
974,073
|
|
|
964,897
|
|
|
993,555
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
964,897
|
|
|
993,555
|
|
|
|
|||||
ExGen Renewables IV, LLC
|
|
|
|
Electric Utilities
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.00% cash due 11/28/2024
|
|
5.13
|
%
|
|
|
|
1,251,000
|
|
|
1,202,830
|
|
|
1,227,156
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,202,830
|
|
|
1,227,156
|
|
|
|
|||||
Femur Buyer, Inc.
|
|
|
|
Health Care Equipment
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Term Loan, LIBOR+4.25% cash due 3/5/2026
|
|
6.38
|
%
|
|
|
|
4,987,500
|
|
|
4,937,625
|
|
|
4,996,851
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
4,937,625
|
|
|
4,996,851
|
|
|
|
|||||
Financial & Risk US Holdings, Inc.
|
|
|
|
Financial Exchanges & Data
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.75% cash due 10/1/2025
|
|
5.79
|
%
|
|
|
|
5,637,116
|
|
|
5,591,298
|
|
|
5,673,531
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
5,591,298
|
|
|
5,673,531
|
|
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Frontier Communications Corporation
|
|
|
|
Integrated Telecommunication Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.75% cash due 6/15/2024
|
|
5.80
|
%
|
|
|
|
$
|
6,772,891
|
|
|
$
|
6,691,179
|
|
|
$
|
6,770,487
|
|
|
(4)(9)(11)
|
Fixed Rate Bond, 8.50% cash due 4/1/2026
|
|
|
|
|
|
2,035,000
|
|
|
1,980,283
|
|
|
2,039,884
|
|
|
|
||||
|
|
|
|
|
|
|
|
8,671,462
|
|
|
8,810,371
|
|
|
|
|||||
Gentiva Health Services, Inc.
|
|
|
|
Health Care Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.75% cash due 7/2/2025
|
|
5.81
|
%
|
|
|
|
2,992,443
|
|
|
2,988,796
|
|
|
3,013,016
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
2,988,796
|
|
|
3,013,016
|
|
|
|
|||||
GI Chill Acquisition LLC
|
|
|
|
Managed Health Care
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 8/6/2025
|
|
6.10
|
%
|
|
|
|
1,980,000
|
|
|
1,970,100
|
|
|
1,975,050
|
|
|
(4)(7)
|
|||
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/2026
|
|
9.60
|
%
|
|
|
|
2,000,000
|
|
|
1,982,835
|
|
|
2,000,000
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
3,952,935
|
|
|
3,975,050
|
|
|
|
|||||
GoodRx, Inc.
|
|
|
|
Interactive Media & Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+2.75% cash due 10/10/2025
|
|
4.81
|
%
|
|
|
|
1,962,982
|
|
|
1,960,647
|
|
|
1,965,435
|
|
|
(4)
|
|||
Second Lien Term Loan, LIBOR+7.50% cash due 10/12/2026
|
|
9.54
|
%
|
|
|
|
1,333,333
|
|
|
1,308,330
|
|
|
1,350,000
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
3,268,977
|
|
|
3,315,435
|
|
|
|
|||||
HUB International Limited
|
|
|
|
Insurance Brokers
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.00% cash due 4/25/2025
|
|
5.27
|
%
|
|
|
|
3,969,849
|
|
|
3,903,391
|
|
|
3,930,369
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
3,903,391
|
|
|
3,930,369
|
|
|
|
|||||
iCIMs, Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Revolver, LIBOR+6.50% cash due 09/12/2024
|
|
|
|
|
|
—
|
|
|
(1,456
|
)
|
|
(1,478
|
)
|
|
(4)(7)(8)
|
||||
First Lien Term Loan, LIBOR+6.50% cash due 9/12/2024
|
|
8.56
|
%
|
|
|
|
1,671,765
|
|
|
1,643,564
|
|
|
1,643,761
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,642,108
|
|
|
1,642,283
|
|
|
|
|||||
Informatica, LLC
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.25% cash due 8/5/2022
|
|
5.29
|
%
|
|
|
|
3,969,612
|
|
|
3,955,083
|
|
|
3,990,293
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
3,955,083
|
|
|
3,990,293
|
|
|
|
|||||
KIK Custom Products Inc.
|
|
|
|
Household Products
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 5/15/2023
|
|
6.26
|
%
|
|
|
|
2,000,000
|
|
|
1,910,503
|
|
|
1,902,500
|
|
|
(4)(9)
|
|||
|
|
|
|
|
|
|
|
1,910,503
|
|
|
1,902,500
|
|
|
|
|||||
Ligand Pharmaceuticals Inc.
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 0.75% cash due 5/15/2023
|
|
|
|
|
|
1,001,000
|
|
|
884,224
|
|
|
836,788
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
884,224
|
|
|
836,788
|
|
|
|
|||||
Lightbox Intermediate, L.P.
|
|
|
|
Real Estate Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% cash due 5/9/2026
|
|
7.05
|
%
|
|
|
|
8,977,500
|
|
|
8,849,687
|
|
|
8,887,725
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
8,849,687
|
|
|
8,887,725
|
|
|
|
|||||
LTI Holdings, Inc.
|
|
|
|
Auto Parts & Equipment
|
|
|
|
|
|
|
|
|
|||||||
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/2026
|
|
8.79
|
%
|
|
|
|
1,000,000
|
|
|
1,000,000
|
|
|
916,250
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,000,000
|
|
|
916,250
|
|
|
|
|||||
Maravai Intermediate Holdings, LLC
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Term Loan, LIBOR+4.25% cash due 8/2/2025
|
|
6.31
|
%
|
|
|
|
1,287,000
|
|
|
1,274,130
|
|
|
1,279,761
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,274,130
|
|
|
1,279,761
|
|
|
|
|||||
McAfee, LLC
|
|
|
|
Systems Software
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Term Loan, LIBOR+3.75% cash due 9/30/2024
|
|
5.79
|
%
|
|
|
|
4,844,529
|
|
|
4,833,441
|
|
|
4,861,315
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
4,833,441
|
|
|
4,861,315
|
|
|
|
|||||
Mindbody, Inc.
|
|
|
|
Internet Services & Infrastructure
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Revolver, LIBOR+7.00% cash due 2/15/2025
|
|
|
|
|
|
—
|
|
|
(13,652
|
)
|
|
(14,476
|
)
|
|
(4)(7)(8)
|
||||
First Lien Term Loan, LIBOR+7.00% cash due 2/14/2025
|
|
9.06
|
%
|
|
|
|
7,238,095
|
|
|
7,108,397
|
|
|
7,100,571
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
7,094,745
|
|
|
7,086,095
|
|
|
|
|||||
Navicure, Inc.
|
|
|
|
Health Care Technology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 9/18/2026
|
|
6.13
|
%
|
|
|
|
4,000,000
|
|
|
3,980,000
|
|
|
4,005,000
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
3,980,000
|
|
|
4,005,000
|
|
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Numericable SFR SA
|
|
|
|
Integrated Telecommunication Services
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 7.38% cash due 5/1/2026
|
|
|
|
|
|
$
|
380,000
|
|
|
$
|
380,950
|
|
|
$
|
408,865
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
380,950
|
|
|
408,865
|
|
|
|
|||||
OEConnection LLC
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Delayed Draw Term Loan, LIBOR+4.00% cash due 9/24/2026
|
|
|
|
|
|
—
|
|
|
(4,086
|
)
|
|
(1,532
|
)
|
|
(4)(8)(11)
|
||||
First Lien Term Loan, LIBOR+4.00% cash due 9/24/2026
|
|
6.13
|
%
|
|
|
|
8,682,796
|
|
|
8,639,382
|
|
|
8,666,515
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
8,635,296
|
|
|
8,664,983
|
|
|
|
|||||
P & L Development, LLC
|
|
|
|
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+7.50% cash due 6/28/2024
|
|
9.55
|
%
|
|
|
|
4,110,000
|
|
|
4,011,515
|
|
|
4,068,900
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
4,011,515
|
|
|
4,068,900
|
|
|
|
|||||
PaySimple, Inc.
|
|
|
|
Data Processing & Outsourced Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Delayed Draw Term Loan, LIBOR+5.50% cash due 8/23/2025
|
|
|
|
|
|
—
|
|
|
(53,281
|
)
|
|
(40,425
|
)
|
|
(4)(7)(8)(11)
|
||||
First Lien Term Loan, LIBOR+5.50% cash due 8/23/2025
|
|
7.55
|
%
|
|
|
|
8,305,000
|
|
|
8,140,807
|
|
|
8,180,425
|
|
|
(4)(7)(11)
|
|||
|
|
|
|
|
|
|
|
8,087,526
|
|
|
8,140,000
|
|
|
|
|||||
ProFrac Services, LLC
|
|
|
|
Industrial Machinery
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+6.25% cash due 9/15/2023
|
|
8.66
|
%
|
|
|
|
1,409,167
|
|
|
1,397,985
|
|
|
1,380,983
|
|
|
(4)(7)(11)
|
|||
|
|
|
|
|
|
|
|
1,397,985
|
|
|
1,380,983
|
|
|
|
|||||
Project Boost Purchaser, LLC
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.50% cash due 6/1/2026
|
|
5.54
|
%
|
|
|
|
2,800,000
|
|
|
2,772,000
|
|
|
2,785,650
|
|
|
(4)
|
|||
Second Lien Term Loan, LIBOR+8.00% cash due 5/9/2027
|
|
10.14
|
%
|
|
|
|
1,500,000
|
|
|
1,500,000
|
|
|
1,500,000
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
4,272,000
|
|
|
4,285,650
|
|
|
|
|||||
Recorded Books Inc.
|
|
|
|
Publishing
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 8/29/2025
|
|
6.54
|
%
|
|
|
|
1,980,000
|
|
|
1,960,200
|
|
|
1,984,960
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
1,960,200
|
|
|
1,984,960
|
|
|
|
|||||
Scilex Pharmaceuticals Inc.
|
|
|
|
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Zero Coupon Bond, cash due 8/15/2026
|
|
|
|
|
|
2,381,775
|
|
|
1,671,956
|
|
|
1,702,969
|
|
|
(7)
|
||||
|
|
|
|
|
|
|
|
1,671,956
|
|
|
1,702,969
|
|
|
|
|||||
Signify Health, LLC
|
|
|
|
Health Care Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 12/23/2024
|
|
6.60
|
%
|
|
|
|
6,964,646
|
|
|
6,899,566
|
|
|
6,955,941
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
6,899,566
|
|
|
6,955,941
|
|
|
|
|||||
Sirva Worldwide, Inc.
|
|
|
|
Diversified Support Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025
|
|
7.54
|
%
|
|
|
|
1,962,500
|
|
|
1,933,062
|
|
|
1,903,625
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,933,062
|
|
|
1,903,625
|
|
|
|
|||||
Sorrento Therapeutics, Inc.
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Delayed Draw Term Loan, LIBOR+7.00% cash due 11/7/2023
|
|
|
|
|
|
—
|
|
|
(19,689
|
)
|
|
(22,080
|
)
|
|
(4)(7)(8)(9)
|
||||
First Lien Term Loan, LIBOR+7.00% cash due 11/7/2023
|
|
9.13
|
%
|
|
|
|
9,600,000
|
|
|
9,002,287
|
|
|
9,360,000
|
|
|
(4)(7)(9)
|
|||
Stock Warrants (exercise price $3.28) expiration date 5/7/2029
|
|
|
|
|
|
|
|
560,000
|
|
|
533,306
|
|
|
(7)(9)
|
|||||
Stock Warrants (exercise price $3.94) expiration date 11/3/2029
|
|
|
|
|
|
|
|
—
|
|
|
102,397
|
|
|
(7)(9)
|
|||||
|
|
|
|
|
|
|
|
9,542,598
|
|
|
9,973,623
|
|
|
|
|||||
StandardAero Aviation Holdings Inc.
|
|
|
|
Aerospace & Defense
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 4/6/2026
|
|
6.10
|
%
|
|
|
|
3,000,000
|
|
|
2,996,318
|
|
|
3,017,805
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
2,996,318
|
|
|
3,017,805
|
|
|
|
|||||
Sunshine Luxembourg VII SARL
|
|
|
|
Personal Products
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 9/25/2026
|
|
6.59
|
%
|
|
|
|
5,000,000
|
|
|
4,975,000
|
|
|
5,029,700
|
|
|
(4)(9)
|
|||
|
|
|
|
|
|
|
|
4,975,000
|
|
|
5,029,700
|
|
|
|
|||||
TIBCO Software Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 6/30/2026
|
|
6.07
|
%
|
|
|
|
9,484,693
|
|
|
9,496,896
|
|
|
9,510,397
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
9,496,896
|
|
|
9,510,397
|
|
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Transact Holdings Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.75% cash due 4/30/2026
|
|
7.01
|
%
|
|
|
|
$
|
8,000,000
|
|
|
$
|
7,880,000
|
|
|
$
|
7,960,000
|
|
|
(4)
|
|
|
|
|
|
|
|
|
7,880,000
|
|
|
7,960,000
|
|
|
|
|||||
Tullow Oil PLC
|
|
|
|
Oil & Gas Exploration & Production
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Callable Bond, 6.25% cash due 4/15/2022
|
|
|
|
|
|
700,000
|
|
|
691,321
|
|
|
709,800
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
691,321
|
|
|
709,800
|
|
|
|
|||||
Uber Technologies, Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.50% cash due 7/13/2023
|
|
5.55
|
%
|
|
|
|
3,969,309
|
|
|
3,954,413
|
|
|
3,948,649
|
|
|
(4)
|
|||
First Lien Term Loan, LIBOR+4.00% cash due 4/4/2025
|
|
6.03
|
%
|
|
|
|
981,065
|
|
|
974,542
|
|
|
977,185
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
4,928,955
|
|
|
4,925,834
|
|
|
|
|||||
UFC Holdings, LLC
|
|
|
|
Movies & Entertainment
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.25% cash due 4/29/2026
|
|
5.30
|
%
|
|
|
|
3,491,003
|
|
|
3,491,003
|
|
|
3,504,338
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
3,491,003
|
|
|
3,504,338
|
|
|
|
|||||
Uniti Group LP
|
|
|
|
Specialized REITs
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% cash due 10/24/2022
|
|
7.04
|
%
|
|
|
|
3,429,488
|
|
|
3,345,831
|
|
|
3,351,793
|
|
|
(4)(9)(11)
|
|||
|
|
|
|
|
|
|
|
3,345,831
|
|
|
3,351,793
|
|
|
|
|||||
UOS, LLC
|
|
|
|
Trading Companies & Distributors
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.50% cash due 4/18/2023
|
|
7.54
|
%
|
|
|
|
2,969,620
|
|
|
2,990,975
|
|
|
3,006,741
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
2,990,975
|
|
|
3,006,741
|
|
|
|
|||||
Veritas US Inc.
|
|
|
|
Application Software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 1/27/2023
|
|
6.60
|
%
|
|
|
|
4,315,150
|
|
|
4,099,814
|
|
|
4,089,619
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
4,099,814
|
|
|
4,089,619
|
|
|
|
|||||
Verscend Holding Corp.
|
|
|
|
Health Care Technology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 8/27/2025
|
|
6.54
|
%
|
|
|
|
8,369,747
|
|
|
8,374,824
|
|
|
8,413,353
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
8,374,824
|
|
|
8,413,353
|
|
|
|
|||||
WeddingWire, Inc.
|
|
|
|
Interactive Media & Services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 12/19/2025
|
|
6.54
|
%
|
|
|
|
2,977,500
|
|
|
2,964,142
|
|
|
2,981,222
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
2,964,142
|
|
|
2,981,222
|
|
|
|
|||||
WideOpenWest Finance, LLC
|
|
|
|
Cable & Satellite
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.25% cash due 8/18/2023
|
|
5.29
|
%
|
|
|
|
4,383,110
|
|
|
4,258,195
|
|
|
4,246,138
|
|
|
(4)(9)
|
|||
|
|
|
|
|
|
|
|
4,258,195
|
|
|
4,246,138
|
|
|
|
|||||
WP CPP Holdings, LLC
|
|
|
|
Aerospace & Defense
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+3.75% cash due 4/30/2025
|
|
6.01
|
%
|
|
|
|
3,969,925
|
|
|
3,945,385
|
|
|
3,981,100
|
|
|
(4)(11)
|
|||
|
|
|
|
|
|
|
|
3,945,385
|
|
|
3,981,100
|
|
|
|
|||||
Zillow Group, Inc.
|
|
|
|
Interactive Media & Services
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Bond, 1.50% cash due 7/1/2023
|
|
|
|
|
|
497,000
|
|
|
471,430
|
|
|
438,913
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
471,430
|
|
|
438,913
|
|
|
|
|||||
Total Non-Control/Non-Affiliate Investments (169.6% of net assets)
|
|
|
|
|
|
|
|
$
|
289,322,834
|
|
|
$
|
291,147,011
|
|
|
|
|||
Cash and Cash Equivalents and Restricted Cash (6.6% of net assets)
|
|
|
|
|
|
|
|
$
|
11,348,126
|
|
|
$
|
11,348,126
|
|
|
|
|||
Total Portfolio Investments, Cash and Cash Equivalents and Restricted Cash (176.3% of net assets)
|
|
|
|
|
|
|
|
$
|
300,670,960
|
|
|
$
|
302,495,137
|
|
|
|
Derivative Instrument
|
|
Notional Amount to be Purchased
|
|
Notional Amount to be Sold
|
|
Maturity Date
|
|
Counterparty
|
|
Cumulative Unrealized Appreciation (Depreciation)
|
||||||
Foreign currency forward contract
|
|
$
|
2,798,483
|
|
|
€
|
2,475,000
|
|
|
1/16/2020
|
|
Bank of New York Mellon
|
|
$
|
77,558
|
|
(1)
|
All debt investments are income producing unless otherwise noted. All equity investments are non-income producing unless otherwise noted.
|
(2)
|
See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
|
(3)
|
Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
|
(4)
|
The interest rate on the principal balance outstanding for all floating rate loans is indexed to the London Interbank Offered Rate ("LIBOR") and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate based rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2019, the reference rates for the Company's variable rate loans were the 30-day LIBOR at 2.04%, the 60-day LIBOR at 2.09%, the 90-day LIBOR at 2.10% and the 30-day EURIBOR at (0.51)%. Most loans include an interest floor, which generally ranges from 0% to 1%.
|
(5)
|
"€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
|
(6)
|
Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments. Control Investments generally are defined by the Investment Company Act of 1940, as amended (the "Investment Company Act"), as investments in companies in which the Company owns more than 25% of the voting securities and/or has the power to exercise control over the management or policies of the company. Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
|
(7)
|
As of September 30, 2019, these investments are categorized as Level 3 within the fair value hierarchy established by Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("ASC 820") and were valued using significant unobservable inputs.
|
(8)
|
Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
|
(9)
|
Investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2019, qualifying assets represented 80.1% of the Company's total assets and non-qualifying assets represented 19.9% of the Company's total assets.
|
(10)
|
PIK interest income for this investment accrues at an annualized rate of 15%, however, the PIK interest is not contractually capitalized on the investment. As a result, the principal amount of the investment does not increase over time for accumulated PIK interest. As of September 30, 2019, the accumulated PIK interest balance for each of the A notes and the B notes was $0.2 million. The fair value of this investment is inclusive of PIK.
|
(11)
|
This investment is pledged as collateral under the Citibank Facility (as defined in Note 6 to the accompanying notes to the consolidated financial statements).
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Non-Control/Non-Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
|||||||
AI Sirona (Luxembourg) Acquisition S.a.r.l
|
|
|
|
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|||||||
Second Lien Term Loan, EURIBOR+7.25% (0% Floor) cash due 7/10/2026
|
|
7.25
|
%
|
|
|
|
€
|
2,500,000
|
|
|
$
|
2,862,090
|
|
|
$
|
2,889,231
|
|
|
(4)(9)
|
|
|
|
|
|
|
|
|
2,862,090
|
|
|
2,889,231
|
|
|
|
|||||
Altice France S.A.
|
|
|
|
Integrated telecommunication services
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Callable Bond 7.75% cash due 5/15/2022
|
|
|
|
|
|
$
|
465,000
|
|
|
445,977
|
|
|
454,305
|
|
|
(9)
|
|||
Fixed Rate Callable Bond 7.75% cash due 5/15/2022
|
|
|
|
|
|
265,000
|
|
|
254,400
|
|
|
258,905
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
700,377
|
|
|
713,210
|
|
|
|
|||||
Ball Metalpack Finco, LLC
|
|
|
|
Metal & glass containers
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% due 7/31/2025
|
|
6.74
|
%
|
|
|
|
1,496,250
|
|
|
1,488,884
|
|
|
1,514,018
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,488,884
|
|
|
1,514,018
|
|
|
|
|||||
EHR Canada, LLC
|
|
|
|
Food retail
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+8.00% (1% Floor) cash due 9/28/2020
|
|
10.30
|
%
|
|
|
|
1,500,000
|
|
|
1,470,123
|
|
|
1,470,000
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,470,123
|
|
|
1,470,000
|
|
|
|
|||||
GI Chill Acquisition LLC
|
|
|
|
Managed healthcare
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.00% cash due 8/6/2025
|
|
6.39
|
%
|
|
|
|
2,000,000
|
|
|
1,990,000
|
|
|
2,012,500
|
|
|
(4)(7)
|
|||
Second Lien Term Loan, LIBOR+7.50% cash due 8/6/2026
|
|
9.68
|
%
|
|
|
|
2,000,000
|
|
|
1,980,329
|
|
|
1,980,000
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
3,970,329
|
|
|
3,992,500
|
|
|
|
|||||
GTT Communications Inc.
|
|
|
|
Internet services & infrastructure
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Callable Bond 7.88% cash due 12/31/2024
|
|
|
|
|
|
266,000
|
|
|
252,625
|
|
|
260,015
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
252,625
|
|
|
260,015
|
|
|
|
|||||
iCIMs, Inc.
|
|
|
|
Application software
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+6.50% (1% Floor) cash due 9/12/2024
|
|
8.64
|
%
|
|
|
|
1,411,765
|
|
|
1,383,774
|
|
|
1,383,529
|
|
|
(4)(7)
|
|||
First Lien Revolver, LIBOR+6.50% (1% Floor) cash due 9/12/2024
|
|
|
|
|
|
—
|
|
|
(1,749
|
)
|
|
(1,765
|
)
|
|
(4)(7)(8)
|
||||
|
|
|
|
|
|
|
|
1,382,025
|
|
|
1,381,764
|
|
|
|
|||||
LTI Holdings, Inc.
|
|
|
|
Auto parts & equipment
|
|
|
|
|
|
|
|
|
|||||||
Second Lien Term Loan, LIBOR+6.75% cash due 9/6/2026
|
|
8.99
|
%
|
|
|
|
1,000,000
|
|
|
1,000,000
|
|
|
1,002,710
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,000,000
|
|
|
1,002,710
|
|
|
|
|||||
Maravai Intermediate Holdings, LLC
|
|
|
|
Biotechnology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.25% cash due 8/2/2025
|
|
6.38
|
%
|
|
|
|
1,300,000
|
|
|
1,287,000
|
|
|
1,295,938
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,287,000
|
|
|
1,295,938
|
|
|
|
|||||
ProFrac Services, LLC
|
|
|
|
Industrial machinery
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.75% (1% Floor) cash due 9/15/2023
|
|
8.07
|
%
|
|
|
|
1,500,000
|
|
|
1,485,091
|
|
|
1,492,500
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,485,091
|
|
|
1,492,500
|
|
|
|
|||||
Recorded Books Inc.
|
|
|
|
Publishing
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 8/29/2025
|
|
6.89
|
%
|
|
|
|
2,000,000
|
|
|
1,980,000
|
|
|
2,022,500
|
|
|
(4)(7)
|
|||
|
|
|
|
|
|
|
|
1,980,000
|
|
|
2,022,500
|
|
|
|
|||||
Scilex Pharmaceuticals Inc.
|
|
|
|
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Zero Coupon Bond due 8/15/2026
|
|
|
|
|
|
2,400,000
|
|
|
1,500,000
|
|
|
1,500,000
|
|
|
(7)
|
||||
|
|
|
|
|
|
|
|
1,500,000
|
|
|
1,500,000
|
|
|
|
|||||
Sequa Mezzanine Holdings, LLC
|
|
|
|
Aerospace & defense
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.00% (1% Floor) cash due 11/28/2021
|
|
7.19
|
%
|
|
|
|
1,496,212
|
|
|
1,484,303
|
|
|
1,474,390
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,484,303
|
|
|
1,474,390
|
|
|
|
|||||
|
|
|
Portfolio Company/Type of Investment (1)(2)(3)
|
|
Cash Interest Rate (4)
|
|
Industry
|
|
Principal (5)
|
|
|
Cost
|
|
Fair Value
|
|
Notes
|
||||||
Sirva Worldwide, Inc.
|
|
|
|
Diversified support services
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+5.50% cash due 8/4/2025
|
|
7.75
|
%
|
|
|
|
$
|
2,000,000
|
|
|
$
|
1,970,000
|
|
|
$
|
2,007,500
|
|
|
(4)
|
|
|
|
|
|
|
|
|
1,970,000
|
|
|
2,007,500
|
|
|
|
|||||
Tullow Oil PLC
|
|
|
|
Oil & gas exploration & production
|
|
|
|
|
|
|
|
|
|||||||
Fixed Rate Callable Bond 6.25% cash due 04/15/2022
|
|
|
|
|
|
700,000
|
|
|
688,282
|
|
|
701,015
|
|
|
(9)
|
||||
|
|
|
|
|
|
|
|
688,282
|
|
|
701,015
|
|
|
|
|||||
Verscend Holding Corp.
|
|
|
|
Healthcare technology
|
|
|
|
|
|
|
|
|
|||||||
First Lien Term Loan, LIBOR+4.50% cash due 8/27/2025
|
|
6.74
|
%
|
|
|
|
1,500,000
|
|
|
1,488,750
|
|
|
1,515,315
|
|
|
(4)
|
|||
|
|
|
|
|
|
|
|
1,488,750
|
|
|
1,515,315
|
|
|
|
|||||
Total Non-Control/Non-Affiliate Investments (83.1% of net assets)
|
|
|
|
|
|
|
|
$
|
25,009,879
|
|
|
$
|
25,232,606
|
|
|
|
|||
Cash and Cash Equivalents (33.4% of net assets)
|
|
|
|
|
|
|
|
$
|
10,131,268
|
|
|
$
|
10,131,268
|
|
|
|
|||
Total Portfolio Investments, Cash and Cash Equivalents (116.4% of net assets)
|
|
|
|
|
|
|
|
$
|
35,141,147
|
|
|
$
|
35,363,874
|
|
|
|
(1)
|
All debt investments are income producing unless otherwise noted.
|
(2)
|
See Note 3 in the accompanying notes to the Consolidated Financial Statements for portfolio composition by geographic region.
|
(3)
|
Interest rates may be adjusted from period to period on certain term loans and revolvers. These rate adjustments may be either temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements or permanent in nature per loan amendment or waiver documents.
|
(4)
|
The interest rate on the principal balance outstanding for all floating rate loans is indexed to the LIBOR and/or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR or the alternate based rate based on each respective credit agreement and the cash interest rate as of period end. All LIBOR shown above is in U.S. dollars unless otherwise noted. As of September 30, 2018, the reference rates for our variable rate loans were the 30-day LIBOR at 2.24%, the 60-day LIBOR at 2.29%, the 90-day LIBOR at 2.39%, the 180-day LIBOR at 2.59% and the 30-day EURIBOR at (0.40)%.
|
(5)
|
"€" signifies the investment is denominated in Euros. All other investments are denominated in U.S. dollars.
|
(6)
|
Non-Control/Non-Affiliate Investments are investments that are neither Control Investments nor Affiliate Investments. Control Investments generally are defined by the Investment Company Act, as investments in companies in which the Company owns more than 25% of the voting securities and/or has the power to exercise control over the management or policies of the company. Affiliate Investments generally are defined by the Investment Company Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.
|
(7)
|
As of September 30, 2018, these investments are categorized as Level 3 within the fair value hierarchy established by ASC 820 and were valued using significant unobservable inputs.
|
(8)
|
Investment has undrawn commitments. Unamortized fees are classified as unearned income which reduces cost basis, which may result in a negative cost basis. A negative fair value may result from the unfunded commitment being valued below par.
|
(9)
|
Investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act. Under the Investment Company Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company's total assets. As of September 30, 2018, qualifying assets represented 85.2% of the Company's total assets and non-qualifying assets represented 14.8% of the Company's total assets.
|
•
|
Level I - Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement.
|
•
|
Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are directly or indirectly observable.
|
•
|
Level III - Valuations for which one or more significant inputs are unobservable. These inputs reflect our assessment of the assumptions that market participants use to value the investment based on the best available information. Level III inputs include prices obtained from brokers in markets for which there are few transactions, less public information exists or prices vary among brokered market makers.
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||
Cost:
|
|
|
|
% of Total Investments
|
|
|
|
% of Total Investments
|
||||||
Senior secured debt
|
|
$
|
281,238,755
|
|
|
97.20
|
%
|
|
$
|
21,868,595
|
|
|
87.44
|
%
|
Subordinated debt
|
|
7,201,102
|
|
|
2.49
|
%
|
|
3,141,284
|
|
|
12.56
|
%
|
||
Common equity & warrants
|
|
772,692
|
|
|
0.27
|
%
|
|
—
|
|
|
—
|
%
|
||
Preferred equity
|
|
110,285
|
|
|
0.04
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
|
$
|
289,322,834
|
|
|
100.00
|
%
|
|
$
|
25,009,879
|
|
|
100.00
|
%
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||||||||
Fair Value:
|
|
|
|
% of Total Investments
|
|
% of Net Assets
|
|
|
|
% of Total Investments
|
|
% of Net Assets
|
||||||||
Senior secured debt
|
|
$
|
282,841,206
|
|
|
97.14
|
%
|
|
164.80
|
%
|
|
$
|
22,058,366
|
|
|
87.42
|
%
|
|
72.63
|
%
|
Subordinated debt
|
|
7,325,965
|
|
|
2.52
|
%
|
|
4.27
|
%
|
|
3,174,240
|
|
|
12.58
|
%
|
|
10.45
|
%
|
||
Common equity & warrants
|
|
869,555
|
|
|
0.30
|
%
|
|
0.51
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Preferred equity
|
|
110,285
|
|
|
0.04
|
%
|
|
0.06
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Total
|
|
$
|
291,147,011
|
|
|
100.00
|
%
|
|
169.64
|
%
|
|
$
|
25,232,606
|
|
|
100.00
|
%
|
|
83.08
|
%
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||
|
|
Fair Value
|
|
% of Debt Investments
|
|
Fair Value
|
|
% of Debt Investments
|
||||||
Floating rate
|
|
$
|
270,653,147
|
|
|
93.27
|
%
|
|
$
|
22,058,366
|
|
|
87.42
|
%
|
Fixed rate
|
|
19,514,024
|
|
|
6.73
|
%
|
|
3,174,240
|
|
|
12.58
|
%
|
||
Total
|
|
$
|
290,167,171
|
|
|
100.00
|
%
|
|
$
|
25,232,606
|
|
|
100.00
|
%
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||
Cost:
|
|
|
% of Total Investments
|
|
|
|
% of Total Investments
|
||||||
United States
|
$
|
257,736,195
|
|
|
89.08
|
%
|
|
$
|
19,289,006
|
|
|
77.13
|
%
|
United Kingdom
|
11,021,595
|
|
|
3.81
|
%
|
|
688,283
|
|
|
2.75
|
%
|
||
Luxembourg
|
7,837,090
|
|
|
2.71
|
%
|
|
3,562,467
|
|
|
14.24
|
%
|
||
France
|
5,230,110
|
|
|
1.81
|
%
|
|
—
|
|
|
—
|
%
|
||
Iceland
|
4,406,462
|
|
|
1.52
|
%
|
|
—
|
|
|
—
|
%
|
||
Canada
|
2,875,400
|
|
|
0.99
|
%
|
|
1,470,123
|
|
|
5.88
|
%
|
||
Denmark
|
215,982
|
|
|
0.08
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
289,322,834
|
|
|
100.00
|
%
|
|
$
|
25,009,879
|
|
|
100.00
|
%
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||||||||
Fair Value:
|
|
|
% of Total Investments
|
|
% of Net Assets
|
|
|
|
% of Total Investments
|
|
% of Net Assets
|
||||||||
United States
|
$
|
259,279,171
|
|
|
89.06
|
%
|
|
151.07
|
%
|
|
$
|
19,459,150
|
|
|
77.11
|
%
|
|
64.07
|
%
|
United Kingdom
|
11,079,743
|
|
|
3.81
|
%
|
|
6.46
|
%
|
|
701,015
|
|
|
2.78
|
%
|
|
2.31
|
%
|
||
Luxembourg
|
7,697,297
|
|
|
2.64
|
%
|
|
4.48
|
%
|
|
3,602,441
|
|
|
14.28
|
%
|
|
11.86
|
%
|
||
France
|
5,282,695
|
|
|
1.81
|
%
|
|
3.08
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Iceland
|
4,688,800
|
|
|
1.61
|
%
|
|
2.73
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Canada
|
2,896,055
|
|
|
0.99
|
%
|
|
1.69
|
%
|
|
1,470,000
|
|
|
5.83
|
%
|
|
4.84
|
%
|
||
Denmark
|
223,250
|
|
|
0.08
|
%
|
|
0.13
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Total
|
$
|
291,147,011
|
|
|
100.00
|
%
|
|
169.64
|
%
|
|
$
|
25,232,606
|
|
|
100.00
|
%
|
|
83.08
|
%
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||
Cost:
|
|
|
% of Total Investments
|
|
|
|
% of Total Investments
|
||||||
Application Software
|
$
|
59,770,591
|
|
|
20.64
|
%
|
|
$
|
1,382,025
|
|
|
5.53
|
%
|
Biotechnology
|
20,067,414
|
|
|
6.94
|
%
|
|
1,287,000
|
|
|
5.15
|
%
|
||
Internet Services & Infrastructure
|
18,962,689
|
|
|
6.55
|
%
|
|
252,625
|
|
|
1.01
|
%
|
||
Integrated Telecommunication Services
|
18,343,050
|
|
|
6.34
|
%
|
|
700,377
|
|
|
2.80
|
%
|
||
Systems Software
|
13,237,985
|
|
|
4.58
|
%
|
|
—
|
|
|
—
|
%
|
||
Health Care Technology
|
12,354,824
|
|
|
4.27
|
%
|
|
1,488,750
|
|
|
5.95
|
%
|
||
Health Care Services
|
10,956,005
|
|
|
3.79
|
%
|
|
—
|
|
|
—
|
%
|
||
Diversified Support Services
|
9,416,772
|
|
|
3.25
|
%
|
|
1,970,000
|
|
|
7.88
|
%
|
||
Alternative Carriers
|
9,310,000
|
|
|
3.22
|
%
|
|
—
|
|
|
—
|
%
|
||
Real Estate Services
|
8,849,687
|
|
|
3.06
|
%
|
|
—
|
|
|
—
|
%
|
||
Pharmaceuticals
|
8,545,561
|
|
|
2.95
|
%
|
|
4,362,090
|
|
|
17.44
|
%
|
||
Data Processing & Outsourced Services
|
8,087,526
|
|
|
2.80
|
%
|
|
—
|
|
|
—
|
%
|
||
Oil & Gas Refining & Marketing
|
7,880,400
|
|
|
2.72
|
%
|
|
—
|
|
|
—
|
%
|
||
Research & Consulting Services
|
7,509,371
|
|
|
2.60
|
%
|
|
—
|
|
|
—
|
%
|
||
Aerospace & Defense
|
6,941,703
|
|
|
2.40
|
%
|
|
1,484,303
|
|
|
5.93
|
%
|
||
Interactive Media & Services
|
6,704,549
|
|
|
2.32
|
%
|
|
—
|
|
|
—
|
%
|
||
Auto Parts & Equipment
|
5,962,563
|
|
|
2.06
|
%
|
|
1,000,000
|
|
|
4.00
|
%
|
||
IT Consulting & Other Services
|
5,690,535
|
|
|
1.97
|
%
|
|
—
|
|
|
—
|
%
|
||
Financial Exchanges & Data
|
5,591,298
|
|
|
1.93
|
%
|
|
—
|
|
|
—
|
%
|
||
Personal Products
|
4,975,000
|
|
|
1.72
|
%
|
|
—
|
|
|
—
|
%
|
||
Health Care Equipment
|
4,937,625
|
|
|
1.71
|
%
|
|
—
|
|
|
—
|
%
|
||
Cable & Satellite
|
4,258,195
|
|
|
1.47
|
%
|
|
—
|
|
|
—
|
%
|
||
Managed Health Care
|
3,952,935
|
|
|
1.37
|
%
|
|
3,970,329
|
|
|
15.88
|
%
|
||
Insurance Brokers
|
3,903,391
|
|
|
1.35
|
%
|
|
—
|
|
|
—
|
%
|
||
Movies & Entertainment
|
3,491,003
|
|
|
1.21
|
%
|
|
—
|
|
|
—
|
%
|
||
Specialized REITs
|
3,345,831
|
|
|
1.16
|
%
|
|
—
|
|
|
—
|
%
|
||
Trading Companies & Distributors
|
2,990,975
|
|
|
1.03
|
%
|
|
—
|
|
|
—
|
%
|
||
Publishing
|
1,960,200
|
|
|
0.68
|
%
|
|
1,980,000
|
|
|
7.92
|
%
|
||
Household Products
|
1,910,503
|
|
|
0.66
|
%
|
|
—
|
|
|
—
|
%
|
||
Metal & Glass Containers
|
1,475,024
|
|
|
0.51
|
%
|
|
1,488,884
|
|
|
5.95
|
%
|
||
Industrial Machinery
|
1,397,985
|
|
|
0.48
|
%
|
|
1,485,091
|
|
|
5.93
|
%
|
||
Electric Utilities
|
1,202,830
|
|
|
0.42
|
%
|
|
—
|
|
|
—
|
%
|
||
Construction & Engineering
|
1,020,274
|
|
|
0.35
|
%
|
|
—
|
|
|
—
|
%
|
||
Health Care Distributors
|
1,015,805
|
|
|
0.35
|
%
|
|
—
|
|
|
—
|
%
|
||
Food Retail
|
964,897
|
|
|
0.33
|
%
|
|
1,470,123
|
|
|
5.88
|
%
|
||
Oil & Gas Equipment & Services
|
849,160
|
|
|
0.29
|
%
|
|
—
|
|
|
—
|
%
|
||
Specialized Finance
|
797,357
|
|
|
0.28
|
%
|
|
—
|
|
|
—
|
%
|
||
Oil & Gas Exploration & Production
|
691,321
|
|
|
0.24
|
%
|
|
688,282
|
|
|
2.75
|
%
|
||
Total
|
$
|
289,322,834
|
|
|
100.00
|
%
|
|
$
|
25,009,879
|
|
|
100.00
|
%
|
|
September 30, 2019
|
|
September 30, 2018
|
||||||||||||||||
Fair Value:
|
|
|
% of Total Investments
|
|
% of Net Assets
|
|
|
|
% of Total Investments
|
|
% of Net Assets
|
||||||||
Application Software
|
$
|
60,022,674
|
|
|
20.64
|
%
|
|
34.97
|
%
|
|
$
|
1,381,764
|
|
|
5.48
|
%
|
|
4.55
|
%
|
Biotechnology
|
20,798,972
|
|
|
7.14
|
%
|
|
12.12
|
%
|
|
1,295,938
|
|
|
5.14
|
%
|
|
4.27
|
%
|
||
Internet Services & Infrastructure
|
18,992,309
|
|
|
6.52
|
%
|
|
11.07
|
%
|
|
260,015
|
|
|
1.03
|
%
|
|
0.86
|
%
|
||
Integrated Telecommunication Services
|
18,571,805
|
|
|
6.38
|
%
|
|
10.82
|
%
|
|
713,210
|
|
|
2.83
|
%
|
|
2.35
|
%
|
||
Systems Software
|
13,126,771
|
|
|
4.51
|
%
|
|
7.65
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Health Care Technology
|
12,418,353
|
|
|
4.27
|
%
|
|
7.24
|
%
|
|
1,515,315
|
|
|
6.01
|
%
|
|
4.99
|
%
|
||
Health Care Services
|
10,992,559
|
|
|
3.78
|
%
|
|
6.40
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Diversified Support Services
|
9,374,839
|
|
|
3.22
|
%
|
|
5.46
|
%
|
|
2,007,500
|
|
|
7.96
|
%
|
|
6.61
|
%
|
||
Alternative Carriers
|
9,367,143
|
|
|
3.22
|
%
|
|
5.46
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Real Estate Services
|
8,887,725
|
|
|
3.05
|
%
|
|
5.18
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Pharmaceuticals
|
8,439,466
|
|
|
2.90
|
%
|
|
4.92
|
%
|
|
4,389,231
|
|
|
17.38
|
%
|
|
14.45
|
%
|
||
Data Processing & Outsourced Services
|
8,140,000
|
|
|
2.80
|
%
|
|
4.74
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Oil & Gas Refining & Marketing
|
8,009,750
|
|
|
2.75
|
%
|
|
4.67
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Research & Consulting Services
|
7,977,900
|
|
|
2.74
|
%
|
|
4.65
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Aerospace & Defense
|
6,998,905
|
|
|
2.40
|
%
|
|
4.08
|
%
|
|
1,474,390
|
|
|
5.84
|
%
|
|
4.85
|
%
|
||
Interactive Media & Services
|
6,735,570
|
|
|
2.31
|
%
|
|
3.92
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Auto Parts & Equipment
|
5,835,172
|
|
|
2.00
|
%
|
|
3.40
|
%
|
|
1,002,710
|
|
|
3.97
|
%
|
|
3.30
|
%
|
||
Financial Exchanges & Data
|
5,673,531
|
|
|
1.95
|
%
|
|
3.31
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
IT Consulting & Other Services
|
5,341,103
|
|
|
1.83
|
%
|
|
3.11
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Personal Products
|
5,029,700
|
|
|
1.73
|
%
|
|
2.93
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Health Care Equipment
|
4,996,851
|
|
|
1.72
|
%
|
|
2.91
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Cable & Satellite
|
4,246,138
|
|
|
1.46
|
%
|
|
2.47
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Managed Health Care
|
3,975,050
|
|
|
1.37
|
%
|
|
2.32
|
%
|
|
3,992,500
|
|
|
15.82
|
%
|
|
13.15
|
%
|
||
Insurance Brokers
|
3,930,369
|
|
|
1.35
|
%
|
|
2.29
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Movies & Entertainment
|
3,504,338
|
|
|
1.20
|
%
|
|
2.04
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Specialized REITs
|
3,351,793
|
|
|
1.15
|
%
|
|
1.95
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Trading Companies & Distributors
|
3,006,741
|
|
|
1.03
|
%
|
|
1.75
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Publishing
|
1,984,960
|
|
|
0.68
|
%
|
|
1.16
|
%
|
|
2,022,500
|
|
|
8.02
|
%
|
|
6.66
|
%
|
||
Household Products
|
1,902,500
|
|
|
0.65
|
%
|
|
1.11
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Metal & Glass Containers
|
1,397,930
|
|
|
0.48
|
%
|
|
0.81
|
%
|
|
1,514,018
|
|
|
6.00
|
%
|
|
4.98
|
%
|
||
Industrial Machinery
|
1,380,983
|
|
|
0.47
|
%
|
|
0.80
|
%
|
|
1,492,500
|
|
|
5.91
|
%
|
|
4.91
|
%
|
||
Electric Utilities
|
1,227,156
|
|
|
0.42
|
%
|
|
0.72
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Health Care Distributors
|
1,126,250
|
|
|
0.39
|
%
|
|
0.66
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Construction & Engineering
|
1,002,800
|
|
|
0.34
|
%
|
|
0.58
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Food Retail
|
993,555
|
|
|
0.34
|
%
|
|
0.58
|
%
|
|
1,470,000
|
|
|
5.83
|
%
|
|
4.84
|
%
|
||
Oil & Gas Equipment & Services
|
876,330
|
|
|
0.30
|
%
|
|
0.51
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Specialized Finance
|
799,220
|
|
|
0.27
|
%
|
|
0.47
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
||
Oil & Gas Exploration & Production
|
709,800
|
|
|
0.24
|
%
|
|
0.41
|
%
|
|
701,015
|
|
|
2.78
|
%
|
|
2.31
|
%
|
||
Total
|
$
|
291,147,011
|
|
|
100.00
|
%
|
|
169.64
|
%
|
|
$
|
25,232,606
|
|
|
100.00
|
%
|
|
83.08
|
%
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Senior secured debt
|
|
$
|
—
|
|
|
$
|
219,518,979
|
|
|
$
|
63,322,227
|
|
|
$
|
282,841,206
|
|
Subordinated debt
|
|
—
|
|
|
5,622,996
|
|
|
1,702,969
|
|
|
7,325,965
|
|
||||
Common equity & warrants
|
|
149,276
|
|
|
—
|
|
|
720,279
|
|
|
869,555
|
|
||||
Preferred equity
|
|
—
|
|
|
—
|
|
|
110,285
|
|
|
110,285
|
|
||||
Total investments at fair value
|
|
149,276
|
|
|
225,141,975
|
|
|
65,855,760
|
|
|
291,147,011
|
|
||||
Derivative assets
|
|
—
|
|
|
77,558
|
|
|
—
|
|
|
77,558
|
|
||||
Total assets at fair value
|
|
$
|
149,276
|
|
|
$
|
225,219,533
|
|
|
$
|
65,855,760
|
|
|
$
|
291,224,569
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Senior secured debt
|
|
$
|
—
|
|
|
$
|
10,403,164
|
|
|
$
|
11,655,202
|
|
|
$
|
22,058,366
|
|
Subordinated debt
|
|
—
|
|
|
1,674,240
|
|
|
1,500,000
|
|
|
3,174,240
|
|
||||
Total investments at fair value
|
|
$
|
—
|
|
|
$
|
12,077,404
|
|
|
$
|
13,155,202
|
|
|
$
|
25,232,606
|
|
|
|
Senior Secured Debt
|
|
Subordinated Debt
|
|
Preferred Equity
|
|
Common Equity & Warrants
|
|
Total
|
||||||||||
Fair value as of September 30, 2018
|
|
$
|
11,655,202
|
|
|
$
|
1,500,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,155,202
|
|
New investments
|
|
53,352,111
|
|
|
—
|
|
|
110,285
|
|
|
642,713
|
|
|
54,105,109
|
|
|||||
Redemptions/repayments/sales
|
|
(2,768,599
|
)
|
|
(18,225
|
)
|
|
—
|
|
|
—
|
|
|
(2,786,824
|
)
|
|||||
Transfers in (a)
|
|
1,514,018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,514,018
|
|
|||||
Transfers out (a)
|
|
(2,022,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,022,500
|
)
|
|||||
Capitalized PIK interest income
|
|
558,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
558,051
|
|
|||||
Accretion of OID
|
|
321,127
|
|
|
190,181
|
|
|
—
|
|
|
—
|
|
|
511,308
|
|
|||||
Net unrealized appreciation (depreciation)
|
|
712,817
|
|
|
31,013
|
|
|
—
|
|
|
77,566
|
|
|
821,396
|
|
|||||
Fair value as of September 30, 2019
|
|
$
|
63,322,227
|
|
|
$
|
1,702,969
|
|
|
$
|
110,285
|
|
|
$
|
720,279
|
|
|
$
|
65,855,760
|
|
Net unrealized appreciation (depreciation) relating to Level 3 assets and liabilities still held at September 30, 2019 and reported within net unrealized appreciation (depreciation) in the Consolidated Statement of Operations for the year ended September 30, 2019
|
|
$
|
712,817
|
|
|
$
|
31,013
|
|
|
$
|
—
|
|
|
$
|
77,566
|
|
|
$
|
821,396
|
|
|
|
Investments
|
||||||||||
|
|
|
|
|
|
|
||||||
|
|
Senior secured debt
|
|
Subordinated Debt
|
|
Total
|
||||||
New investments
|
|
$
|
11,573,764
|
|
|
$
|
1,500,000
|
|
|
$
|
13,073,764
|
|
Accretion of original issue discount
|
|
803
|
|
|
—
|
|
|
803
|
|
|||
Net unrealized appreciation on investments
|
|
80,635
|
|
|
—
|
|
|
80,635
|
|
|||
Fair value as of September 30, 2018
|
|
$
|
11,655,202
|
|
|
$
|
1,500,000
|
|
|
$
|
13,155,202
|
|
Net unrealized appreciation relating to Level 3 assets and liabilities still held at September 30, 2018 and reported within net unrealized appreciation (depreciation) in the Statement of Operations for the period from August 6, 2018 to September 30, 2018
|
|
$
|
80,635
|
|
|
$
|
—
|
|
|
$
|
80,635
|
|
Asset
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
|
Weighted
Average (a)
|
|||||
Senior secured debt
|
|
$
|
31,341,878
|
|
|
Market yield technique
|
|
Market yield
|
|
(b)
|
8.0%
|
|
18.0%
|
|
11.0%
|
|
|
30,480,349
|
|
|
Broker quotations
|
|
Broker quoted price
|
|
(c)
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
1,500,000
|
|
|
Transaction precedent technique
|
|
Transaction price
|
|
(e)
|
N/A
|
|
N/A
|
|
N/A
|
|
Subordinated debt
|
|
1,702,969
|
|
|
Market yield technique
|
|
Market yield
|
|
(b)
|
13.0%
|
|
15.0%
|
|
14.0%
|
|
Common equity & warrants & preferred equity
|
|
830,564
|
|
|
Enterprise value technique
|
|
Asset multiple
|
|
(d)
|
0.7x
|
|
0.9x
|
|
0.8x
|
|
Total
|
|
$
|
65,855,760
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
|
Weighted
Average (a)
|
|||||
Senior secured debt
|
|
$
|
4,810,938
|
|
|
Broker quotations
|
|
Broker quoted price
|
|
(b)
|
N/A
|
|
N/A
|
|
N/A
|
|
|
6,844,264
|
|
|
Transaction precedent technique
|
|
Transaction price
|
|
(c)
|
N/A
|
|
N/A
|
|
N/A
|
|
Subordinated debt
|
|
1,500,000
|
|
|
Market yield technique
|
|
Market yield
|
|
(d)
|
14.0%
|
|
16.0%
|
|
15.0%
|
|
Total
|
|
$
|
13,155,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended September 30, 2019
|
|
Period from August 6, 2018 (commencement of operations) to September 30, 2018
|
||||
Earnings (loss) per common share — basic and diluted:
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
|
$
|
5,619,394
|
|
|
$
|
(462,452
|
)
|
Weighted average common shares outstanding
|
|
4,094,929
|
|
|
963,587
|
|
||
Earnings (loss) per common share — basic and diluted
|
|
$
|
1.37
|
|
|
$
|
(0.48
|
)
|
|
|
Common Stock
|
|
|
|
|
|
|
|||||||||||
|
|
Shares
|
|
Par Value
|
|
Additional Paid-in-Capital
|
|
Accumulated Distributable Earnings (Loss)
|
|
Total Net Assets
|
|||||||||
Balance at August 6, 2018 (commencement of operations)
|
|
50
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
Net investment income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(672,556
|
)
|
|
(672,556
|
)
|
||||
Net unrealized appreciation (depreciation)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
210,104
|
|
|
210,104
|
|
||||
Net realized gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuance of common stock
|
|
1,541,688
|
|
|
1,542
|
|
|
30,832,227
|
|
|
—
|
|
|
30,833,769
|
|
||||
Balance at September 30, 2018
|
|
1,541,738
|
|
|
1,542
|
|
|
30,833,227
|
|
|
(462,452
|
)
|
|
30,372,317
|
|
||||
Net investment income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,691,640
|
|
|
3,691,640
|
|
||||
Net unrealized appreciation (depreciation)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,691,630
|
|
|
1,691,630
|
|
||||
Net realized gains (losses)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
236,124
|
|
|
236,124
|
|
||||
Distributions to stockholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,372,190
|
)
|
|
(2,372,190
|
)
|
||||
Reclassification of additional paid-in-capital
|
|
—
|
|
|
—
|
|
|
(14,515
|
)
|
|
14,515
|
|
|
—
|
|
||||
Issuance of common stock
|
|
6,768,123
|
|
|
6,768
|
|
|
138,000,461
|
|
|
—
|
|
|
138,007,229
|
|
||||
Balance at September 30, 2019
|
|
8,309,861
|
|
|
$
|
8,310
|
|
|
$
|
168,819,173
|
|
|
$
|
2,799,267
|
|
|
$
|
171,626,750
|
|
|
|
Shares Issued
|
|
Price per Share
|
|
Proceeds
|
|||||
August 6, 2018 (1)
|
|
770,869
|
|
|
$
|
20.00
|
|
|
$
|
15,417,385
|
|
September 17, 2018
|
|
770,869
|
|
|
20.00
|
|
|
15,417,384
|
|
||
October 29, 2018
|
|
1,060,964
|
|
|
19.85
|
|
|
21,060,130
|
|
||
November 15, 2018
|
|
789,198
|
|
|
19.82
|
|
|
15,641,900
|
|
||
April 29, 2019
|
|
1,655,314
|
|
|
20.40
|
|
|
33,768,400
|
|
||
August 30, 2019
|
|
1,631,324
|
|
|
20.70
|
|
|
33,768,400
|
|
||
September 23, 2019
|
|
1,631,323
|
|
|
20.70
|
|
|
33,768,399
|
|
||
Total
|
|
8,309,861
|
|
|
|
|
$
|
168,841,998
|
|
(1)
|
Includes 50 shares issued to one or more affiliates of the Adviser on July 23, 2018.
|
|
|
Year ended September 30, 2019
|
|
Period from August 6, 2018 (commencement of operations) to September 30, 2018
|
||||
Net increase (decrease) in net assets resulting from operations
|
|
$
|
5,619,394
|
|
|
$
|
(462,452
|
)
|
Net unrealized (appreciation) depreciation
|
|
(1,691,630
|
)
|
|
(210,104
|
)
|
||
Book/tax differences due to capital gains incentive fee
|
|
385,550
|
|
|
—
|
|
||
Book/tax difference due to organizational and deferred offering costs
|
|
668,719
|
|
|
483,049
|
|
||
Other book/tax differences
|
|
14,515
|
|
|
—
|
|
||
Taxable income (1)
|
|
$
|
4,996,548
|
|
|
$
|
(189,507
|
)
|
(1)
|
The Company's taxable income for the year ended September 30, 2019 is an estimate and will not be finally determined until the Company files its tax return for the fiscal year ending September 30, 2019. Therefore, the final taxable income may be different than the estimate.
|
Undistributed ordinary income, net
|
$
|
1,793,055
|
|
Net realized capital gains
|
642,220
|
|
|
Unrealized gains, net
|
$
|
363,992
|
|
(a)
|
Hurdle Rate Return: No Investment Income Incentive Fee in any calendar quarter in which the Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate;
|
(b)
|
Catch-Up: 100% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets in such calendar quarter (the “Catch-Up”), which is intended to provide the Adviser with 20% of the Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply, if the Pre-Incentive Fee Net Investment Income exceeds the Hurdle Rate in such calendar quarter; and
|
(c)
|
80/20 Split: 20% of the Pre-Incentive Fee Net Investment Income, if any, that exceeds a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets in such calendar quarter, so that once the Hurdle Rate is reached and the Catch-Up in (b) immediately above is achieved, 20% of the Pre-Incentive Fee Net Investment Income thereafter is allocated to the Adviser.
|
|
|
Year ended September 30, 2019
|
|
Period from August 6, 2018 (commencement of operations)
through September 30, 2018
|
||||
Net asset value at beginning of period
|
|
$
|
19.70
|
|
|
$
|
20.00
|
|
Net investment income (loss) (1)
|
|
0.90
|
|
|
(0.70
|
)
|
||
Net realized gains (losses) (1)
|
|
0.06
|
|
|
—
|
|
||
Net unrealized appreciation (depreciation) (2)
|
|
0.37
|
|
|
0.40
|
|
||
Distributions to stockholders
|
|
(0.47
|
)
|
|
—
|
|
||
Effect of sale price of drawdowns (3)
|
|
0.09
|
|
|
—
|
|
||
Net asset value at end of period
|
|
$
|
20.65
|
|
|
$
|
19.70
|
|
Total return (4)
|
|
7.21
|
%
|
|
(1.49
|
)%
|
||
Common stock outstanding at beginning of period
|
|
1,541,738
|
|
|
50
|
|
||
Common stock outstanding at end of period
|
|
8,309,861
|
|
|
1,541,738
|
|
||
Net assets at beginning of period
|
|
$
|
30,372,317
|
|
|
$
|
1,000
|
|
Net assets at end of period
|
|
$
|
171,626,750
|
|
|
$
|
30,372,317
|
|
Average net assets (5)
|
|
$
|
83,242,777
|
|
|
$
|
19,040,505
|
|
Ratio of net investment income to average net assets (6)
|
|
4.43
|
%
|
|
(3.53
|
)%
|
||
Ratio of total expenses to average net assets (6)
|
|
9.58
|
%
|
|
4.11
|
%
|
||
Ratio of portfolio turnover to average investments at fair value (6)
|
|
16.41
|
%
|
|
—
|
%
|
||
Weighted average outstanding debt
|
|
$
|
56,718,082
|
|
|
$
|
—
|
|
Average debt per share (1)
|
|
$
|
13.85
|
|
|
$
|
—
|
|
Asset coverage ratio (7)
|
|
306.78
|
%
|
|
N/A
|
|
(1)
|
Calculated based upon weighted average shares outstanding for the period.
|
(2)
|
The amount shown does not correspond with the net unrealized appreciation (depreciation) for the period as it includes the effect of the timing of equity issuances.
|
(3)
|
Increase is due to drawdowns during the period that were executed at a sale price at a premium to net asset value in order to effect a reallocation of organizational costs to subsequent investors.
|
(4)
|
Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share or capital activity, if any, divided by the beginning NAV per share and has not been annualized.
|
(5)
|
Calculated based upon the weighted average net assets for the period.
|
(6)
|
Financial results for the period from August 6, 2018 (commencement of operations) to September 30, 2018 have not been annualized for purposes of this ratio.
|
(7)
|
Based on outstanding senior securities of $83.0 million as of September 30, 2019. As of September 30, 2018, the Company did not have any outstanding senior securities.
|
Class and Year
|
Total Amount Outstanding Exclusive of Treasury Securities(1)
|
Asset Coverage Per Unit(2)
|
Involuntary Liquidating Preference Per Unit(3)
|
Average Market Value Per Unit
|
|||||
|
|
|
|
|
|||||
CNB Facility
|
|
|
|
|
|||||
Fiscal 2019
|
$
|
65,000,000
|
|
$
|
3,068
|
|
—
|
|
N/A
|
|
|
|
|
|
|||||
Citibank Facility
|
|
|
|
|
|||||
Fiscal 2019
|
$
|
18,000,000
|
|
$
|
3,068
|
|
—
|
|
N/A
|
|
|
|
|
|
|||||
Total Senior Securities
|
|
|
|
|
|||||
Fiscal 2019
|
$
|
83,000,000
|
|
$
|
3,068
|
|
—
|
|
N/A
|
(1)
|
Total amount of each class of senior securities outstanding at the end of the period.
|
(2)
|
The asset coverage ratio for a class of senior securities representing indebtedness is calculated as the Company's consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by total senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the “Asset Coverage Per Unit.”
|
(3)
|
The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “-” indicates information that the Securities and Exchange Commission expressly does not require to be disclosed for certain types of senior securities.
|
|
|
September 30, 2019
|
|
September 30, 2018
|
||||
Assembled Brands Capital LLC
|
|
$
|
3,807,021
|
|
|
$
|
—
|
|
PaySimple, Inc.
|
|
2,695,000
|
|
|
—
|
|
||
Sorrento Therapeutics, Inc.
|
|
2,400,000
|
|
|
—
|
|
||
OEConnection LLC
|
|
817,204
|
|
|
—
|
|
||
Mindbody, Inc.
|
|
761,905
|
|
|
—
|
|
||
Apptio, Inc.
|
|
461,538
|
|
|
—
|
|
||
iCIMs, Inc.
|
|
88,235
|
|
|
88,235
|
|
||
|
|
$
|
11,030,903
|
|
|
$
|
88,235
|
|
Description
|
|
Notional Amount to be Purchased
|
|
Notional Amount to be Sold
|
|
Maturity Date
|
|
Gross Amount of Recognized Assets
|
|
Gross Amount of Recognized Liabilities
|
|
Balance Sheet Location of Net Amounts
|
||||||||
Foreign currency forward contract
|
|
$
|
2,798,483
|
|
|
€
|
2,475,000
|
|
|
1/16/2020
|
|
$
|
77,558
|
|
|
$
|
—
|
|
|
Derivative assets
|
|
For or as of the three months ended
|
For the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
|||||||||||||
|
September 30, 2019
|
June 30, 2019
|
March 31, 2019
|
December 31, 2018
|
|||||||||||
Total investment income
|
$
|
4,301,940
|
|
$
|
3,999,551
|
|
$
|
2,199,688
|
|
$
|
1,166,218
|
|
$
|
110,886
|
|
Net investment income (loss)
|
1,737,028
|
|
1,383,946
|
|
296,143
|
|
274,523
|
|
(672,556
|
)
|
|||||
Net realized and unrealized gains (losses)
|
251,385
|
|
134,626
|
|
2,495,359
|
|
(953,616
|
)
|
210,104
|
|
|||||
Net increase (decrease) in net assets resulting from operations
|
1,988,413
|
|
1,518,572
|
|
2,791,502
|
|
(679,093
|
)
|
(462,452
|
)
|
|||||
Net assets
|
171,626,750
|
|
104,473,728
|
|
69,186,756
|
|
66,395,254
|
|
30,372,317
|
|
|||||
Total investment income per common share (1)
|
$
|
0.75
|
|
$
|
0.88
|
|
$
|
0.65
|
|
$
|
0.43
|
|
$
|
0.12
|
|
Net investment income (loss) per common share (1)
|
0.30
|
|
0.30
|
|
0.09
|
|
0.10
|
|
(0.70
|
)
|
|||||
Earnings (losses) per common share (1)
|
0.35
|
|
0.33
|
|
0.82
|
|
(0.25
|
)
|
(0.48
|
)
|
|||||
Net asset value per common share at period end
|
20.65
|
|
20.70
|
|
20.40
|
|
19.57
|
|
19.70
|
|
(1)
|
Quarterly per share amounts will not sum to the annual per share amounts due to the effect of weighting share activity for each respective period.
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Assets and Liabilities as of September 30, 2019 and 2018
|
|
Consolidated Statements of Operations for the year ended September 30, 2019 and the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
|
Consolidated Statements of Changes in Net Assets for the year ended September 30, 2019 and the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
|
Consolidated Statements of Cash Flows for the year ended September 30, 2019 and the period from August 6, 2018 (commencement of operations) through September 30, 2018
|
|
Consolidated Schedule of Investments as of September 30, 2019
|
|
Consolidated Schedule of Investments as of September 30, 2018
|
|
Notes to Consolidated Financial Statements
|
Exhibit
|
|
Description
|
|
Amended and Restated Certificate of Incorporation (1)
|
|
|
Amended and Restated Bylaws (1)
|
|
|
Form of Subscription Agreement (2)
|
|
|
Description of Securities *
|
|
|
Investment Advisory Agreement, dated as of September 30, 2019, by and between the Company and Oaktree Capital Management, L.P. *
|
|
|
Administration Agreement, dated as of September 30, 2019, by and between the Company and Oaktree Fund Administration, LLC *
|
|
|
Form of Indemnification Agreement (1)
|
|
|
Custody Agreement, dated as of July 31, 2018, by and between the Company and The Bank of New York Mellon (1)
|
|
|
Revolving Credit Agreement, dated as of October 16, 2018, among the Company, as borrower, and City National Bank, as lender (3)
|
|
|
Amendment No.1 to Revolving Credit Agreement, dated as of April 18, 2019, by and between City National Bank, a national banking association and Oaktree Strategic Income II, Inc., a Delaware corporation, as borrower. (4)
|
|
|
Loan and Security Agreement, dated as of July 26, 2019, by and among Oaktree Strategic Income II, Inc., OSI 2 Senior Lending SPV, LLC, each of the lenders from time to time party thereto, Citibank, N.A. and Deutsche Bank Trust Company Americas. (5)
|
|
|
Amendment No. 1 to Loan and Security Agreement, dated as of September 20, 2019, by and among Oaktree Strategic Income II, Inc., OSI 2 Senior Lending SPV, LLC, each of the lenders from time to time party thereto, Citibank, N.A. and Deutsche Bank Trust Company Americas. *
|
|
|
Power of Attorney (included on the signature page hereto)*
|
|
|
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.*
|
|
|
Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*
|
|
|
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
|
|
Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
*
|
Filed herewith.
|
(1)
|
Incorporated by reference to the Company’s Form 10-12G filed by the Company on August 3, 2018 (File No. 000-55975)
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(2)
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Incorporated by reference to the Company’s Form 10-12G/A filed by the Company on October 2, 2018 (File No. 000-55975)
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(3)
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Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed by the Company on October 18, 2018 (File No. 814-01281)
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(4)
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Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on May 15, 2019 (File No. 814-01281)
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(5)
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Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed by the Company on August 14, 2019 (File No. 814-01281)
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OAKTREE STRATEGIC INCOME II, INC.
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By:
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/s/ Armen Panossian
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Armen Panossian
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Chairman, Chief Executive Officer and Chief Investment Officer
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By:
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/s/ Mel Carlisle
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Mel Carlisle
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Chief Financial Officer and Treasurer
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Signature
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Title
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Date
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/s/ Armen Panossian
Armen Panossian
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Chairman, Chief Executive Officer and Chief Investment Officer
(principal executive officer)
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December 17, 2019
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/s/ Mel Carlisle
Mel Carlisle
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Chief Financial Officer and Treasurer
(principal financial officer and
principal accounting officer)
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December 17, 2019
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/s/ Deborah A. Gero
Deborah A. Gero
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Director
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December 17, 2019
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/s/ Allison Keller
Allison Keller
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Director
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December 17, 2019
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/s/ Steve Mosko
Steve Mosko
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Director
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December 17, 2019
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•
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immediately after issuance and before any distribution is made with respect to Common Stock, we must meet an asset coverage ratio, as calculated as provided in the Investment Company Act, of at least 150%; and
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•
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the holders of shares of preferred stock must be entitled as a class to elect two directors at all times and to elect a majority of the directors if and for so long as dividends on the preferred stock are unpaid in an amount equal to two full years of dividends on the preferred stock.
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•
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for any breach of the director’s duty of loyalty to us or our Stockholders;
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•
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for acts or omissions not in good faith or which involve intentional or a knowing violation of law;
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•
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under Section 174 of the DGCL, which relates to unlawful payment of dividends or unlawful stock purchases or redemptions; or
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•
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for any transaction from which the director derived an improper personal benefit.
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•
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prior to such time, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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•
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting securities outstanding at the time the transaction commenced, excluding for purposes of determining the voting securities outstanding (but not the outstanding voting securities owned by the interested stockholder) those shares owned by (i) persons who are our directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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•
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at or subsequent to such time, the business combination is approved by the board of directors and authorized at a meeting of stockholders, and not by written consent, by at least two-thirds of the outstanding voting securities that are not owned by the interested stockholder.
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any merger or consolidation involving us or any direct or indirect majority-owned subsidiary of us (a) with the interested stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation the above prohibition on business combinations in the Certificate of Incorporation is not applicable to the surviving entity;
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any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of such corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of our assets or of any of our direct or indirect majority-owned subsidiaries which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all our assets determined on a consolidated basis or the aggregate market value of all our outstanding stock;
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•
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subject to certain specified exceptions, any transaction that results in the issuance or transfer by us or by any of our direct or indirect majority-owned subsidiaries of any of our stock or of such subsidiary to the interested stockholder;
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any transaction involving us or any of our direct or indirect majority-owned subsidiaries that has the effect, directly or indirectly, of increasing the proportionate share of any class or series (or securities convertible into the stock of any class or series) of our stock or of any such subsidiary owned by the interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or
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any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as our stockholder), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in the above bullet points) provided by or through us or any direct or indirect majority-owned subsidiary.
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the board of directors be divided into three classes, as nearly equal in size as possible, with staggered three-year terms (and the number of directors may never be fewer than one or greater than 12);
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directors elected by our Stockholders may be removed only for cause by the affirmative vote of 75% of the holders of our capital stock then outstanding and entitled to vote in the election of directors; and
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subject to the rights of any holders of preferred stock, any vacancy on the board of directors, however the vacancy occurs, and any newly created directorship due to an enlargement of the board, may only be filled by vote of a majority of the directors then in office, even if the remaining directors do not constitute a quorum, or by a sole remaining director.
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any action required or permitted to be taken by the stockholders at an annual meeting or special meeting of stockholders may only be taken if it is properly brought before such meeting; and
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special meetings of the stockholders may only be called by or at the direction of our board of directors, the Chairman of the board, or the Chief Executive Officer, and may not be called by any other person.
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(a)
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No Investment Income Incentive Fee in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate;
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(b)
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100% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than or equal to a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets as of the end of such calendar quarter (the “Catch-Up”), which is intended to provide the Adviser with 20% of the Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply, if the Pre-Incentive Fee Net Investment Income exceeds the Hurdle Rate in such calendar quarter; and
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(c)
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20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds a 1.875% (7.5% annualized) rate of return on the value of the Company’s net assets as of the end of such calendar quarter, so that once the Hurdle Rate is reached and the Catch-Up in (b) immediately above is achieved, 20% of the Pre-Incentive Fee Net Investment Income thereafter is allocated to the Adviser.
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•
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Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”).
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Year 2: Investment A sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million.
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Year 3: FMV of Investment B determined to be $25 million.
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Year 4: Investment B sold for $31 million.
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1.
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Year 1: None.
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2.
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Year 2: $6.0 million Capital Gains Incentive Fee, calculated as follows: $30 million realized capital gains on sale of Investment A multiplied by 20%.
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3.
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Year 3: None; calculated as follows:(6) $5.0 million cumulative fee (20% multiplied by $25 million ($30 million cumulative capital gains less $5 million cumulative unrealized capital depreciation)) less $6.0 million (previous capital gains fee paid in Year 2).
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4.
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Year 4: $200,000 Capital Gains Incentive Fee, calculated as follows: $6.2 million cumulative fee (20% multiplied by $31 million cumulative realized capital gains ($30 million from Investment A and $1 million from Investment B)) less $6.0 million (previous capital gains fee paid in Year 2).
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Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”).
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•
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Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million.
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Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million.
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Year 4: FMV of Investment B determined to be $35 million.
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Year 5: Investment B sold for $20 million.
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Year 1: None.
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Year 2: $5.0 million Capital Gains Incentive Fee, calculated as follows: 20% multiplied by $25 million ($30 million realized capital gains on sale of Investment A less $5 million unrealized capital depreciation on Investment B).
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Year 3: $1.4 million Capital Gains Incentive Fee, calculated as follows: $6.4 million cumulative fee (20% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million cumulative unrealized capital depreciation)) less $5.0 million (previous capital gains fee paid in Year 2).
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Year 4: $600,000 capital gains incentive fee, calculated as follows: $7.0 million cumulative fee (20% multiplied by $35 million cumulative realized capital gains) less $6.4 million (previous cumulative capital gains fee paid in Year 2 and Year 3).
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Year 5: None. $5.0 million cumulative fee (20% multiplied by $25 million ($35 million cumulative realized capital gains less $10 million realized capital losses)) less $7.0 million (previous cumulative capital gains fee paid in Years 2, 3 and 4).
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1.
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The hypothetical amount of Pre-Incentive Fee Net Investment Income shown is expressed as a rate of return as of the beginning and the end of the immediately preceding calendar quarter. Solely for purposes of these illustrative examples, we have assumed that the Company has not incurred any leverage. However, we expect to use leverage to partially finance our investments.
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2.
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Represents 6.0% annualized Hurdle Rate.
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3.
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Represents 1.00% annualized Management Fee (as in effect prior to a Qualified Listing).
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4.
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Hypothetical other expenses. Excludes organizational and offering expenses.
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5.
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The “catch-up” provision is intended to provide the Adviser with an Incentive Fee of approximately 20% on all of the Pre-Incentive Fee Net Investment Income as if a Hurdle Rate did not apply when the net investment income exceeds 1.875% in any calendar quarter.
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6.
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If the Investment Advisory Agreement is terminated on a date other than December 31 of any year, the Company may pay aggregate Capital Gains Incentive Fees that are more than the amount of such fees that would have been payable if the Investment Advisory Agreement had been terminated on December 31 of such year. This would occur if the FMV of an investment declined between the time the Investment Advisory Agreement was terminated and December 31.
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1.
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Duties of the Administrator
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2.
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Records
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3.
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Confidentiality
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4.
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Compensation; Allocation of Costs and Expenses
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5.
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Limitation of Liability of the Administrator; Indemnification
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6.
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Activities of the Administrator
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7.
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Duration and Termination of this Agreement
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8.
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Amendments of this Agreement
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9.
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Governing Law
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10.
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Entire Agreement
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11.
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Notices
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By:
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/s/ Armen Panossian
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Armen Panossian
Chief Executive Officer
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By:
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/s/ Mel Carlisle
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Mel Carlisle
Chief Financial Officer
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/s/ Armen Panossian
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Name: Armen Panossian
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Date: December 17, 2019
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/s/ Mel Carlisle
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Name: Mel Carlisle
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Date: December 17, 2019
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