☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
300 Crescent Court, Suite 700 Dallas, Texas | 75201 | |
(Address of principal executive offices) | (Zip Code) |
None Common Stock, par value $0.001 per share ☒. ☒.Title of each classTrading Symbol(s)Name of each exchange on which registeredN/AN/AN/A☒☒Large accelerated filer ☐ Accelerated filer ☐ ☒ Smaller reporting company ☐ Emerging growth company Yes ☐ No ☒
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
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PART I | |||||||||
Item 1. | 1 | ||||||||
Item 1A. | |||||||||
Item 1B. | |||||||||
Item 1C. | 49 | ||||||||
Item 2. | |||||||||
Item 3. | |||||||||
Item 4. | |||||||||
PART II | |||||||||
Item 5. | |||||||||
Item 6. | |||||||||
Item 7. | |||||||||
Item 7A. | |||||||||
Item 8. | |||||||||
Item 9. | |||||||||
Item 9A. | |||||||||
Item 9B. | |||||||||
Item 9C. | |||||||||
126 | |||||||||
PART III | |||||||||
Item 10. | |||||||||
Item 11. | |||||||||
Item 12. | |||||||||
Item 13. | |||||||||
Item 14. | |||||||||
PART IV | |||||||||
Item 15. | |||||||||
i
at the time of the conversion.
administrative and operational support services to enable it to provide the required advisory services to the Company. The Adviser will compensate all Adviser and Skyview personnel who provide services to the Company.
hedge various investments for risk management and speculative purposes. We may invest up to 15% of our net assets in entities that are excluded from registration under the 1940 Act by virtue of sections 3(c)(1) and 3(c)(7) of the 1940 Act (such as private equity funds or hedge funds). This limitation does not apply to any CLOs, certain of which may rely on section 3(c)(1) or 3(c)(7) of the 1940 Act.
2023.
investment opportunities may exhibit each of these qualities. Each investment opportunity is analyzed on a
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equity or venture fund, we are not required to return capital once a liquidity event is realized in an underlying investment. With the uncertainties inherent in the Federal Reserve’s actions regarding interest rates and quantitative easing, we believe it is difficult to make the best investment decisions if required to work under a finite timeline. Because of the permanent capital vehicle structure, we believe we can offer an institutional-type strategy focused on the healthcare sector with institutional management capabilities to investors.
The Adviser and its affiliates’ credit platform has been through many credit cycles, and the Adviser and its affiliates remain a recognized leader in the credit space, winning numerous industry awards and recognition from peers. The Adviser and its affiliates have a proprietary credit underwriting process and maintain coverage of many public and non-public companies across all sectors. Investments are reviewed by the analyst team and approved by a credit committee that meets daily. The process includes on-going monitoring of all investments.
network of contacts. Our Adviser will then work with outside counsel to structure loans with strong creditor protections and contractual controls over borrower operations. Our Adviser will work to obtain extensive operating and financial covenants, detailed reporting requirements, governance rights and board seats to protect our investment while allowing the borrower the necessary flexibility to successfully execute its business plan. We will actively monitor and manage our portfolio with regard to individual company performance as well as general market conditions. Investment decisions on new originations generally will include an analysis of the impact of the new loan on our broader portfolio, including a
In response to the COVID-19 pandemic, the Federal Reserve (the “Fed”) has successfully maintained low interest rates across the yield curve to support low-cost financing for businesses struggling through challenging economic times. With the roll-out of vaccines and declining incidence of COVID-19 infections, return of economic activity will allow the Fed to begin normalizing interest rates.
As a large percentage of our investments are expected to be in the form of floating rate debt, we will be able to create a portfolio of middle-market companies that we believe will have an increasing income stream over time, particularly as interest rates increase above their historic lows. Also, as floating rate debt reduces the interest rate risk inherent in longer duration credit instruments, we can build a portfolio that has mostly credit risk, which we believe the Adviser and its affiliates have significant experience at assessing.
non-publicand public companies. Syndicated floating rate debts are loans originated by a bank to a corporation that are sold off, or syndicated, to investors in pieces. Floating rate loans have a base rate that adjusts periodically plus a spread over the base rate. The base rate is typically the three-month London Interbank Offered Rate, or LIBOR,secured overnight financing rate (SOFR) and resets every 90 days. With rates resetting in an environment where the prevailing base rate is increasing, the income stream from a floating rate instrument will increase.
business community. Built over 20 years, this deal sourcing network includes accountants, attorneys, bankers, brokers, insurance agents, consultants, private equity firms and financial advisers who have access to
1. | Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the U.S. |
Securities and Exchange Commission (“SEC”). An eligible portfolio company is defined in the 1940 Act as any issuer which: |
a. | is organized under the laws of, and has its principal place of business in, the United States; |
b. | 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 1940 Act; and |
c. | satisfies any of the following: |
i. | does not have any class of securities listed on a national securities exchange or has any class of securities listed on a national securities exchange subject to a $250 million market capitalization maximum; or |
ii. | is controlled by a BDC or a group of companies including a BDC, the BDC actually exercises controlling influence over the management or policies of the eligible portfolio company, and, as a result, the BDC has an affiliated person who is a director of the eligible portfolio company. |
2. | Securities of any eligible portfolio company which we control. |
3. | Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements. |
4. | Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company. |
5. | Securities received in exchange for or distributed on or with respect to securities described in (1) through (4) above, or pursuant to the exercise of warrants or rights relating to such securities. |
6. | Cash, cash equivalents, U.S. Government securities or high-quality debt securities maturing in one year or less from the time of investment. |
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indirectly, five percent or more of our outstanding voting securities will be our affiliate for purposes of the 1940 Act, and we are generally prohibited from buying or selling any security from or to, or entering into certain “joint” transactions (which could include investments in the same portfolio company) with such affiliates, absent the prior approval of our independent directors and/or appropriate exemptive relief. Our Adviser and its affiliates, including persons that control, are controlled by, or are under common control with, us or our Adviser, are also considered to be our affiliates under the 1940 Act, and we are generally prohibited from buying or selling any security from or to, or entering into “joint” transactions with such affiliates without the prior approval of our independent directors and, in some cases, exemptive relief from the SEC.
securities as determined by the Adviser, as the Company’s valuation designee.
pursuant to Item 307 of Regulation
(i) | derive at least 90% of our gross income for each taxable year from: (a) dividends, interest (including tax-exempt interest), payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gains from options, futures and forward contracts) derived with respect to our business of investing in such stock, securities or foreign currencies; and (b) net income derived from interests in “qualified publicly traded partnerships”; |
(ii) | diversify our holdings so that, at the end of each quarter of our taxable year, (a) at least 50% of the market value of our total assets consists of cash and cash items, U.S. government securities, the securities of other RICs and other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of our total assets and not more than 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of our total assets is invested, including through corporations in which we own a 20% or more voting stock interest, (x) in the securities (other than U.S. government securities and the securities of other RICs) of any one issuer or of two or more issuers that we control, as determined under applicable Code rules, and that are determined to be engaged in the same business or similar or related trades or businesses, or (y) in the securities of one or more “qualified publicly traded partnerships”; and |
(iii) | distribute to our shareholders with respect to each taxable year at least 90% of the sum of our “investment company taxable income” (as that term is defined in the Code, without regard to the deduction for dividends paid—generally taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and any net tax-exempt interest income (the excess of our grosstax-exempt interest over certain disallowed deductions), for such year, in a manner qualifying for the dividends paid deduction. |
determined with reference to any loss carryforwards). Any investment company taxable income we retain will be subject to a corporate-level tax at regular corporate rates. We may also retain for investment our net capital gain. If we retain any net capital gain, it will be subject to corporate-level tax at regular corporate rates on the amount retained, but we may designate the retained amount as undistributed capital gains in a timely notice to our shareholders who would then, in turn, be (i) required to include in income for U.S. federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, and (ii) entitled to credit their proportionate shares of the tax we paid on such undistributed amount against their U.S. federal income tax liabilities, if any, and to claim refunds on a properly-filed U.S. tax return to the extent the credit exceeds such liabilities. If we make this designation, for U.S. federal income tax purposes, the tax basis of shares owned by one of our shareholders would be increased by an amount equal to the difference between the amount of undistributed capital gains included in the shareholder’s gross income under clause (i) of the preceding sentence and the tax deemed paid by the shareholder under clause (ii) of the preceding sentence. We are not required to, and there can be no assurance we will, make this designation if we retain all or a portion of our net capital gain in a taxable year.
more of our shares (each, an “ownership change”). The Code may similarly limit our ability to use any of our other capital losses, or ordinary losses, that have accrued but have not been recognized (i.e.,
purposes of the limitation on deductibility of investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment company.
preferred security that is deferring the payment of its distributions, we may be required to report income for U.S. federal income tax purposes to the extent of any such deferred distribution even though we have not yet actually received the cash distribution.
ordinary income and loss. The QEF and
recognize are treated as ordinary or capital and/or as short-term or long-term, accelerate our recognition of income or gains, defer losses, and cause adjustments in the holding periods of our securities. The rules could therefore affect the amount, timing and/or character of our distributions to shareholders.
make the required certification, or who has been notified by the IRS that such shareholder is subject to backup withholding. Certain shareholders are exempt from backup withholding. Backup withholding is not an additional tax and any amount withheld may be refunded or credited against your U.S. federal income tax liability, if any, provided that you furnish the required information to the IRS.
(3) short-term capital gain dividends, each as defined below and subject to certain conditions described below, generally are not subject to withholding of U.S. federal income tax.
a foreign shareholder must have complied with applicable certification and filing requirements relating to its
Item 1A. | Risk Factors. |
It is not known how long any negative impacts, or any future impactsThe impact of other significant events such as athis coronavirus has resulted in substantial economic downturn, will last.volatility. Health crises caused by outbreaks, of disease, such as the coronavirus outbreak, may exacerbate otherThisThe impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the globalworldwide economy, as well as the economies of individual countries, individual companies, including certain Company service providers and issuers of the Company’s investments, and the marketmarkets in general in significant and unforeseen ways. For example, a widespread health crisisIn addition, governments, their regulatory agencies, oras a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, and impact a Company’s ability to complete repurchase requests.instruments. Any such impact could adversely affect athe Company’s performance, the performance of the securities in which a Company invests, lines of credit available to a Company and may lead to losses on your investment in a Company. In addition, the increasing interconnectedness of markets around the world may result in many markets being affected by events or conditions in a single country or region or events affecting a single or small number of issuers.
The United States responded to the coronavirus pandemic and resulting economic distress with fiscal and monetary stimulus packages, including the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) passed in late March 2020. The CARES Act provides for over $2.2 trillion in resources to small businesses, state and local governments, and individuals that have been adversely impacted by the COVID-19 pandemic. In mid-March 2020, the Fed cut interest rates to historically low levels and announced a new round of quantitative easing, including purchases of corporate and municipal government bonds. The Fed also enacted various programs to support liquidity operations and funding in the financial markets, including expanding its reverse repurchase agreement operations, which added $1.5 trillion of liquidity to the banking system; establishing swap lines with other major central banks to provide dollar funding; establishing a program to support money market funds; easing various bank capital buffers; providing funding backstops for businesses to provide bridging loans for up to four years; and providing funding to help credit flow in asset-backed securities markets. In addition, the Fed plans to extend credit to small and medium-sized businesses. There is no assurance that the U.S. government’s support in response to COVID-19 economic distress will offset the adverse impact to securities in which the Company may invest and future governmental support is not guaranteed.
performance.
experience operating under the constraints applicable to BDCs, which may hinder our ability to take advantage of attractive investment opportunities and to achieve our investment objective. As a result, we cannot assure you that our Adviser will be able to operate our business successfully under these constraints. Any failure to do so could subject us to enforcement action by the SEC, cause us to fail to satisfy the requirements for qualifying to be treated as a RIC, cause us to fail the 70% test described above or otherwise have a material adverse effect on our business, financial condition or results of operations.
significantly disrupted. In June 2016,On January 31, 2020, the United Kingdom approved a referendum to leaveUK left the EU, commonly referred to as “Brexit.“Brexit,” Effective January 31, 2020,and the UK ceased to be a member of the EU and, followingEU. Following a transition period during which the EU and the UK Government engaged in a series of negotiations regarding the terms of the UK’s future relationship with the EU, the EU and the UK Government signed an agreement on December 30, 2020 regarding the economic relationship between the UK and the EU. This agreement became effective on a provisional basis on January 1, 2021 and formally entered into force on May 1, 2021. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the range of potential outcomes of possible political, regulatory, economic, and market outcomes are difficult to predict. TheThis uncertainty resulting from the transition period may affect other countries in the EU and elsewhere, and may cause volatility within the EU, or triggertriggering prolonged economic downturns in certain countries within the EU. Despite the influence of the lockdowns, and the economic bounce back, Brexit has had a material impact on the UK’s economy. Additionally, trade between the UK and the EU did not benefit from the global rebound in trade in 2021, and remained at the very low levels experienced at the start of the novel coronavirus
As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent and ultimate result of which are unknown at this time, the United States and the EU, along with the regulatory bodies of a number of countries, have imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among other things, the continued devaluation of Russian currency, a downgrade in the country’s credit rating, and/or a decline in the value and liquidity of Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of the Company to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on companies with operations in the conflict region, the extent to which is unknown at this time. The United States and the EU have also imposed similar sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial negative impacts on the regional and global economies and securities markets.
investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). As a result, volatility in the capital markets can adversely affect our valuations.
in income before we receive any corresponding cash payments. We also may be required to include in income certain other amounts that we will not receive in cash.
interest will have the effect of increasing our assets under management. As a result, because the base management fee that we pay to our Adviser is based on the value of our consolidated gross assets, the receipt by us of PIK interest will result in an increase in the amount of the base management fee payable by us regardless of whether the PIK interest income is ever realized. In addition, any such increase in a loan balance due to the receipt of PIK interest will cause such loan to accrue interest on the higher loan balance, which will result in an increase in our
statements with our financial statements, any debt issued by it would be generally treated as if it were issued by us for purposes of the asset coverage ratio applicable to us. In such case, we would expect to retain all or a portion of the equity and/or subordinated notes in the securitization vehicle. Our retained equity would be exposed to any losses on the portfolio of loans before any of the debt securities would be exposed to such losses. Accordingly, if the pool of loans experienced a low level of losses due to defaults, we would earn an incremental amount of income on our retained equity, but we would be exposed, up to the amount of equity we retained, to that proportion of any losses we would have experienced if we had continued to hold the loans in our portfolio. We would have no direct ability to enforce the payment obligations on the loans contributed to the securitization vehicle. We may hold subordinated debentures in any such securitization vehicle and, if so, we would not consider such securities to be senior securities. An inability to successfully securitize our loan portfolio
our assets and may grant a security interest in all of our assets under the terms of any debt instruments into which we may enter. In addition, under the terms of any credit facility or other debt instrument we enter into, we are likely to be required by its terms to use the net proceeds of any investments that we sell to repay a portion of the amount borrowed under such facility or instrument before applying such net proceeds to any other uses.
adversely affected. Also, in entering into reverse repurchase agreements, we would bear the risk of loss to the extent that the proceeds of such agreements at settlement are less than the fair value of the underlying securities being pledged.
we are able to
transact business with our officers or directors or their affiliates. These restrictions may limit the scope of investment opportunities that would otherwise be available to us.
unobservable inputs and our own assumptions about how market participants would price the asset or liability in question. Inputs into the determination of fair value of our portfolio investments requires significant management judgment or estimation.
granted to them and the approaches taken in implementing regulations. While the continued impact of the Dodd-Frank Act on us and our portfolio companies may not be known for an extended period of time, the Dodd-Frank Act, along with other legislative and regulatory proposals directed at the financial services industry or affecting taxation that are proposed or pending in the U.S. Congress, may negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies, intensify the regulatory supervision of us or our portfolio companies or otherwise adversely affect our business or the business of our portfolio companies. In addition, if we do not comply with applicable laws and regulations, we could lose any licenses we hold for the conduct of our business and may be subject to civil fines and criminal penalties. Significant uncertainty currently exists in the market regarding the ramifications of any repeal or reform of certain parts of the Dodd Frank Act, and the range and potential implications of possible political, regulatory, economic and market outcomes are difficult to predict.
Further, new
Rule or as senior securities equivalent to bank borrowings for purposes of Section 18 of the Investment Company Act of 1940. In addition, when-issued or forward settling securities transactions that physically settle within
if we are unable to identify and reach an agreement with a service provider or individuals with the expertise possessed by the Adviser. Even if we are able to retain a comparable service provider or individuals to perform such services, whether internal or external, their integration into our business and lack of familiarity with our operations may result in additional costs and time delays that may adversely affect our business, financial condition and results of operations.
processes to address the possibility of cyber-attacks, disruptions, or failures, there are inherent limitations in such plans and systems, including that they do not apply to third parties, such as other market participants, as well as the possibility that certain risks have not been identified or that unknown threats may emerge in the future. Similar types of operational and technology risks are also present for issuers of our investments, which could have material adverse consequences for such issuers, and may cause our investments to lose value. In addition, cyber-attacks involving our counterparty could affect such counterparty’s ability to meet its obligations to us, which may result in losses to us and our stockholders. Furthermore, as a result of cyber-attacks, disruptions, or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in us being, among other things, unable to buy or sell certain securities or financial instruments or unable to accurately price its investments. We cannot directly control any cybersecurity plans and systems put in place by its service providers, our counterparties, issuers in which we invest, or securities markets and exchanges.
The rights we may have with respect to the collateral securing loans we make to our portfolio companies with senior debt outstanding may also be limited pursuant to the terms of one or more intercreditor agreements that we enter into with the holders of such senior debt. Under a typical intercreditor agreement, at any time that obligations benefiting from first-priority liens are outstanding, any of the following actions that may be taken in respect of the collateral will be at the direction of the holders of the obligations secured by the first-priority liens:
of Derivative Transactions may result in losses greater than if they had not been used, may require the Company to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Company can realize on an investment or may cause the Company to hold a security that it might otherwise sell. The use of foreign currency transactions can result in the Company incurring losses as a result of the imposition of exchange controls, the suspension of settlements or the inability of the Company to deliver or receive a specified currency. Additionally, amounts paid by the Company as premiums and cash or other assets held in margin accounts with respect to Derivative Transactions are not otherwise available to the Company for investment purposes.
they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and changing market conditions, as well as general economic downturns;
substantially all of our investments in private companies will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities.
the business model of our healthcare portfolio companies depends on their ability to adapt to changing technologies and introduce new products. As competitors continue to introduce competitive products, the development and acquisition of innovative products and technologies that improve efficacy, safety and cost-effectivenesscost- effectiveness are important to the success of such portfolio companies. The success of new product offerings will depend on many factors, including the ability to properly anticipate and satisfy customer needs, obtain regulatory approvals on a timely basis, develop and manufacture products in an economic and timely manner, obtain or maintain advantageous positions with respect to intellectual property, and differentiate products from those of competitors. Failure by our portfolio companies to introduce planned products or other new products or to introduce products on schedule could have a material adverse effect on our business, financial condition and results of operations.
costs in connection with a bankruptcy proceeding are frequently high and would be paid out of the debtor’s estate prior to any return to creditors. Because the standards for classification of claims under bankruptcy law are vague, our influence with respect to the class of securities or other obligations we own may be lost by increases in the number and amount of claims in the same class or by different classification and treatment. In the early stages of the bankruptcy process, it is often difficult to estimate the extent of, or even to identify, any contingent claims that might be made. In addition, certain claims that have priority by law (for example, claims for taxes) may be substantial, eroding the value of any recovery by holders of other securities of the bankrupt entity.
realize upon the collateral securing the associated indebtedness and/or direct the agent to take actions against the related obligor or the collateral securing the associated indebtedness and actions to realize on proceeds of payments made by obligors that are in the possession or control of any other financial institution. In addition, we may be unable to remove the agent in circumstances in which removal would be in our best interests. Moreover, agented loans typically allow for the agent to resign with certain advance notice.
federal income tax (including interest charges) on distributions received from a PFIC or on proceeds received from the disposition of shares in a PFIC, which tax cannot be eliminated by making distributions to our shareholders. However, we may elect to avoid the imposition of that tax. For example, we may elect to treat a PFIC as a “qualified electing fund” (“QEF”) (i.e., make a “QEF election”), in which case we will be required to include our share of the PFIC’s income and net capital gain annually, regardless of whether it receives any distribution from the PFIC. Alternatively, we may elect to mark the gains (and to a limited extent the losses) in such holdings “to the market” as though we had sold (and, solely for purposes of this
strategy may be limited or adversely affected by our intention to qualify as a RIC and our strategy may bear adversely on our ability to so qualify.
cross-defaults under other agreements and jeopardize such portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. Our investments in loans of such issuers may be placed on
us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in
us as a BDC, we may be limited in our ability to make distributions. Finally, if more stockholders receive cash dividends and other distributions rather than opt to participate in our distribution reinvestment plan, we may be forced to liquidate some of our investments and raise cash in order to make distribution payments. All distributions will be paid at the discretion of the Board and will depend on our earnings, our financial condition, qualification for the special tax treatment accorded RICs and their shareholders, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time. We cannot assure you that we will pay distributions to our stockholders in the future.
Item 1B. |
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Item 1C. | Cybersecurity |
Item 2. |
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Item 3. |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Title of Class | Amount Authorized | Amount Held by Us or for Our Account | Amount Outstanding Exclusive of Amount Under Column | |||||||||
Common Stock | 200,000,000 | — | 10,475,168 | |||||||||
Preferred Stock | 25,000,000 | — | — |
2023:
Title of Class | Amount Authorized | Amount Held by Us or for Our Account | Amount Outstanding Exclusive of Amount Under Column | |||||||||
Common Stock | 200,000,000 | — | 9,309,405 | |||||||||
Preferred Stock | 25,000,000 | — | — |
this repurchase right to the extent that it determines it is in our best interest to do so. This repurchase right will terminate on the date that our shares are listed on a national securities exchange or are included for quotation in a national securities market. All shares to be repurchased must be (i) fully transferable and not be subject to any liens or other encumbrances and (ii) free from any restrictions on transfer. If we determine that a lien or other encumbrance or restriction exists against the shares requested to be repurchased, we will not repurchase any such shares.
equivalent to a dividend” under the relevant rules of the Code. A Section 301 distribution is not treated as a sale or exchange giving rise to a capital gain or loss, but rather is treated as a dividend to the extent supported by our current and accumulated earnings and profits, with the excess treated as a return of capital reducing your tax basis in Company shares, and thereafter as capital gain. In such a case, there is a risk that
Date | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | |||||||||
October 8, 2014 | 652,174 | $ | 9.20 | 0 | ||||||||
March 31, 2016 | 3,232 | 8.55 | 3,232 | |||||||||
December 31, 2016 | 4,169 | 9.24 | 4,169 | |||||||||
March 31, 2017 | 58,893 | 9.59 | 58,893 | |||||||||
June 30, 2017 | 23,441 | 9.59 | 23,441 | |||||||||
September 30, 2017 | 37,284 | 9.36 | 37,284 | |||||||||
December 31, 2017 | 10,820 | 9.52 | 10,820 | |||||||||
March 31, 2018 | 73,736 | 9.89 | 73,736 | |||||||||
June 30, 2018 | 142,605 | 9.69 | 142,605 | |||||||||
September 30, 2018 | 73,877 | 9.61 | 73,877 | |||||||||
December 31, 2018 | 183,934 | 8.75 | 183,934 | |||||||||
March 31, 2019 | 125,146 | 8.51 | 125,146 | |||||||||
June 30, 2019 | 71,112 | 8.69 | 71,112 | |||||||||
September 30, 2019 | 127,126 | 8.58 | 127,126 | |||||||||
December 31, 2019 | 131,082 | 8.41 | 131,082 | |||||||||
March 31, 2020 | 49,418 | 4.88 | 49,418 | |||||||||
June 30, 2020 | 45,916 | 5.87 | 45,916 | |||||||||
September 30, 2020 | 51,384 | 6.09 | 51,384 | |||||||||
December 31, 2020 | 77,523 | 6.16 | 77,523 |
Date | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | |||||||||
October 8, 2014 | 652,174 | $ | 9.20 | 0 | ||||||||
March 31, 2016 | 3,232 | 8.55 | 3,232 | |||||||||
December 31, 2016 | 4,169 | 9.24 | 4,169 | |||||||||
March 31, 2017 | 58,893 | 9.59 | 58,893 | |||||||||
June 30, 2017 | 23,441 | 9.59 | 23,441 | |||||||||
September 30, 2017 | 37,284 | 9.36 | 37,284 | |||||||||
December 31, 2017 | 10,820 | 9.52 | 10,820 | |||||||||
March 31, 2018 | 73,736 | 9.89 | 73,736 | |||||||||
June 30, 2018 | 142,605 | 9.69 | 142,605 |
September 30, 2018 | 73,877 | 9.61 | 73,877 | |||||||||
December 31, 2018 | 183,934 | 8.75 | 183,934 | |||||||||
March 31, 2019 | 125,146 | 8.51 | 125,146 | |||||||||
June 30, 2019 | 71,112 | 8.69 | 71,112 | |||||||||
September 30, 2019 | 127,126 | 8.58 | 127,126 | |||||||||
December 31, 2019 | 131,082 | 8.41 | 131,082 | |||||||||
March 31, 2020 | 49,418 | 4.88 | 49,418 | |||||||||
June 30, 2020 | 45,916 | 5.87 | 45,916 | |||||||||
September 30, 2020 | 51,384 | 6.09 | 51,384 | |||||||||
December 31, 2020 | 77,523 | 6.16 | 77,523 | |||||||||
March 31, 2021 | 263,285 | 6.31 | 263,285 | |||||||||
June 30, 2021 | 214,460 | 6.38 | 214,460 | |||||||||
September 30, 2021 | 119,019 | 6.55 | 119,019 | |||||||||
December 31, 2021 | 131,229 | 6.36 | 131,229 | |||||||||
March 31, 2022 | 85,999 | 6.40 | 85,999 | |||||||||
June 30, 2022 | 102,662 | 6.02 | 102,662 | |||||||||
September 30, 2022 | 195,785 | 5.94 | 195,785 | |||||||||
December 31, 2022 | 94,263 | 5.73 | 94,263 | |||||||||
March 31, 2023 | 181,298 | 5.47 | 181,298 | |||||||||
June 30, 2023 | 179,159 | 5.26 | 179,159 | |||||||||
September 30, 2023 | 118,580 | 5.27 | 118,580 | |||||||||
December 31, 2023 | 99,756 | 5.22 | 99,756 |
NAV per share if necessary, to ensure that we do not sell shares at a price below NAV per share. Each year a statement on Form
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
12/31/2023 (3) | $ | 0.090 | $ | 837,847 | $ | — | ||||||
9/30/2023 | 0.090 | 842,040 | 277,313 | |||||||||
6/30/2023 | 0.090 | 847,993 | 275,845 | |||||||||
3/31/2023 | 0.090 | 859,401 | 280,881 | |||||||||
1/24/2023 (2) | — | — | 293,686 | |||||||||
Total | $ | 0.360 | $ | 3,387,281 | $ | 1,127,725 |
1 | Of the total dividends shown, $1,757,477 was classified as a return of capital. |
2 | The December 2022 Dividend was reinvested in January 2023, see total December 2022 Dividend in table below. |
3 | The December 2023 Dividend was reinvested in January 2024. |
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
12/31/2022 (3) | $ | 0.090 | $ | 870,980 | $ | — | ||||||
9/30/2022 | 0.090 | 874,461 | 303,070 | |||||||||
6/30/2022 | 0.090 | 887,710 | 298,766 | |||||||||
3/31/2022 | 0.090 | 892,680 | 301,212 | |||||||||
1/2/2022 (2) | — | — | 306,152 | |||||||||
Total | $ | 0.360 | $ | 3,525,831 | $ | 1,209,200 |
1 | Of the total dividends shown, $1,999,373 was classified as a return of capital. |
2 | The December 2021 Dividend was reinvested in January 2022, see total December 2021 Dividend in table below. |
3 | The December 2022 Dividend was reinvested in January 2023. |
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
12/31/2021 (3) | $ | 0.090 | $ | 896,061 | $ | — | ||||||
9/30/2021 | 0.090 | 903,359 | 320,218 | |||||||||
6/30/2021 | 0.090 | 909,619 | 322,287 | |||||||||
3/31/2021 | 0.090 | 924,140 | 331,405 | |||||||||
1/2/2021 (2) | — | — | 345,331 | |||||||||
Total | $ | 0.360 | $ | 3,633,179 | $ | 1,319,241 |
1 | For the current period, there were no dividends classified as a return of capital. |
2 | The December 2020 Dividend was reinvested in January 2021, see total December 2020 Dividend in table below. |
3 | The December 2021 Dividend was reinvested in January 2022. |
Payable Date | Dividend/ Share(1) | Total Dividend(1) | Dividends Reinvested(2)(3) | |||||||||
12/31/2020(3) | $ | 0.090 | $ | 942,766 | $ | — | ||||||
9/30/2020 | 0.090 | 944,487 | 347,961 | |||||||||
4/27/2020 | 0.060 | 633,540 | 241,202 | |||||||||
3/27/2020 | 0.060 | 629,128 | 237,068 | |||||||||
2/27/2020 | 0.060 | 631,127 | 245,478 | |||||||||
1/30/2020 | 0.060 | 628,352 | 396,837 | |||||||||
1/02/2020(2) | — | — | 396,214 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.420 | $ | 4,409,400 | $ | 1,864,760 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
12/31/2020 (3) | $ | 0.090 | $ | 942,766 | $ | — | ||||||
9/30/2020 | 0.090 | 944,487 | 347,961 | |||||||||
4/27/2020 | 0.060 | 633,540 | 241,202 | |||||||||
3/27/2020 | 0.060 | 629,128 | 237,068 | |||||||||
2/27/2020 | 0.060 | 631,127 | 245,478 | |||||||||
1/30/2020 | 0.060 | 628,352 | 396,837 | |||||||||
1/2/2020 (2) | — | — | 396,214 | |||||||||
Total | $ | 0.420 | $ | 4,409,400 | $ | 1,864,760 |
1 | For the current period, there were no dividends classified as a return of capital. |
2 | The December 2019 Dividend was reinvested in January 2020, see total December 2019 Dividend in table below. |
3 | The December 2020 Dividend was reinvested in January |
Payable Date | Dividend/ Share(1) | Total Dividend(1) | Dividends Reinvested(2)(3) | |||||||||
1/02/2020 | $ | 0.060 | $ | 625,526 | $ | — | ||||||
11/28/2019 | 0.060 | 630,505 | 398,908 | |||||||||
10/30/2019 | 0.060 | 627,684 | 397,044 | |||||||||
10/02/2019 | 0.060 | 632,534 | 397,215 | |||||||||
8/28/2019 | 0.060 | 628,890 | 398,232 | |||||||||
7/31/2019 | 0.060 | 627,743 | 395,900 | |||||||||
6/26/2019 | 0.060 | 624,201 | 396,249 | |||||||||
5/30/2019 | 0.060 | 625,758 | 398,933 | |||||||||
5/01/2019 | 0.060 | 623,117 | 396,582 | |||||||||
3/27/2019 | 0.060 | 620,420 | 392,542 | |||||||||
2/27/2019 | 0.060 | 625,257 | 397,969 | |||||||||
1/30/2019 | 0.060 | 622,648 | 397,645 | |||||||||
1/03/2019(2) | — | — | 456,444 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.720 | $ | 7,514,283 | $ | 4,823,663 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
1/02/2020 | $ | 0.060 | $ | 625,526 | $ | — | ||||||
11/28/2019 | 0.060 | 630,505 | 398,908 | |||||||||
10/30/2019 | 0.060 | 627,684 | 397,044 | |||||||||
10/02/2019 | 0.060 | 632,534 | 397,215 | |||||||||
8/28/2019 | 0.060 | 628,890 | 398,232 | |||||||||
7/31/2019 | 0.060 | 626,130 | 395,900 | |||||||||
6/26/2019 | 0.060 | 624,201 | 396,249 | |||||||||
5/30/2019 | 0.060 | 625,758 | 398,933 | |||||||||
5/01/2019 | 0.060 | 623,117 | 396,582 | |||||||||
3/27/2019 | 0.060 | 620,420 | 392,542 | |||||||||
2/27/2019 | 0.060 | 625,257 | 397,969 | |||||||||
1/30/2019 | 0.060 | 622,648 | 397,645 | |||||||||
1/03/2019 (2) | — | — | 456,444 | |||||||||
Total | $ | 0.720 | $ | 7,512,670 | $ | 4,823,663 |
1 | For the current period, there were no dividends classified as a return of capital. |
2 | The December 2018 Dividend was reinvested in January 2019, see total December 2018 Dividend in table below. |
3 | The December 2019 Dividend |
Payable Date | Dividend/ Share | Total Dividend(1) | Dividends Reinvested(2) | |||||||||
1/03/2019 | $ | 0.069 | $ | 721,979 | $ | — | ||||||
11/28/2018 | 0.055 | 579,638 | 370,940 | |||||||||
10/31/2018 | 0.069 | 721,071 | 461,560 | |||||||||
9/26/2018 | 0.055 | 578,884 | 369,031 | |||||||||
8/29/2018 | 0.055 | 576,777 | 367,935 | |||||||||
8/01/2018 | 0.069 | 717,708 | 459,995 | |||||||||
6/27/2018 | 0.055 | 579,962 | 367,710 | |||||||||
5/30/2018 | 0.055 | 577,847 | 368,895 | |||||||||
5/02/2018 | 0.069 | 719,079 | 459,922 | |||||||||
3/28/2018 | 0.055 | 577,343 | 367,026 | |||||||||
2/28/2018 | 0.055 | 566,708 | 368,154 | |||||||||
1/31/2018 | 0.069 | 683,782 | 451,968 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.730 | $ | 7,600,778 | $ | 4,413,136 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share | Total Dividend (1) | Dividends Reinvested (2) | |||||||||
1/03/2019 | $ | 0.069 | $ | 721,979 | $ | — | ||||||
11/28/2018 | 0.055 | 579,638 | 370,940 | |||||||||
10/31/2018 | 0.069 | 721,071 | 461,560 | |||||||||
9/26/2018 | 0.055 | 578,884 | 369,031 | |||||||||
8/29/2018 | 0.055 | 576,777 | 367,935 | |||||||||
8/01/2018 | 0.069 | 717,708 | 459,995 | |||||||||
6/27/2018 | 0.055 | 579,962 | 367,710 | |||||||||
5/30/2018 | 0.055 | 577,847 | 368,895 | |||||||||
5/02/2018 | 0.069 | 719,079 | 459,922 | |||||||||
3/28/2018 | 0.055 | 577,343 | 367,026 | |||||||||
2/28/2018 | 0.055 | 566,708 | 368,154 | |||||||||
1/31/2018 | 0.069 | 683,782 | 451,968 | |||||||||
Total | $ | 0.730 | $ | 7,600,778 | $ | 4,413,136 |
1 | For the current |
2 | The December 2018 Dividend |
Payable Date | Dividend/ Share | Total Dividend(1) | Dividends Reinvested | |||||||||
12/27/2017 | $ | 0.055 | $ | 532,460 | $ | 351,929 | ||||||
11/29/2017 | 0.055 | 517,804 | 341,262 | |||||||||
11/1/2017 | 0.069 | 636,662 | 417,795 | |||||||||
9/27/2017 | 0.055 | 505,439 | 331,096 | |||||||||
8/30/2017 | 0.055 | 497,727 | 328,315 | |||||||||
8/2/2017 | 0.069 | 610,689 | 403,364 | |||||||||
6/28/2017 | 0.055 | 481,256 | 318,649 | |||||||||
5/31/2017 | 0.069 | 580,257 | 385,226 | |||||||||
4/26/2017 | 0.055 | 445,910 | 295,916 | |||||||||
3/29/2017 | 0.055 | 431,714 | 286,868 | |||||||||
3/1/2017 | 0.055 | 418,078 | 277,772 | |||||||||
2/1/2017 | 0.069 | 499,353 | 332,190 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.716 | $ | 6,157,349 | $ | 4,070,382 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2)(3) | |||||||||
12/27/2017 | $ | 0.055 | $ | 532,460 | $ | 351,929 | ||||||
11/29/2017 | 0.055 | 517,804 | 341,262 | |||||||||
11/1/2017 | 0.069 | 636,662 | 417,795 | |||||||||
9/27/2017 | 0.055 | 505,439 | 331,096 | |||||||||
8/30/2017 | 0.055 | 497,727 | 328,315 | |||||||||
8/2/2017 | 0.069 | 610,689 | 403,364 | |||||||||
6/28/2017 | 0.055 | 481,256 | 318,649 | |||||||||
5/31/2017 | 0.069 | 580,257 | 385,226 | |||||||||
4/26/2017 | 0.055 | 445,910 | 295,916 | |||||||||
3/29/2017 | 0.055 | 431,714 | 286,868 | |||||||||
3/1/2017 | 0.055 | 418,078 | 277,772 | |||||||||
2/1/2017 | 0.069 | 499,353 | 332,190 | |||||||||
Total | $ | 0.716 | $ | 6,157,349 | $ | 4,070,382 |
1 | For the current |
Payable Date | Dividend/ Share | Total Dividend(1) | Dividends Reinvested | |||||||||
12/28/2016 | $ | 0.055 | $ | 382,152 | $ | 255,650 | ||||||
11/30/2016 | 0.055 | 368,541 | 247,396 | |||||||||
11/2/2016 | 0.069 | 430,784 | 292,800 | |||||||||
9/30/2016 | 0.055 | 321,955 | 220,312 | |||||||||
8/31/2016 | 0.069 | 377,172 | 261,451 | |||||||||
7/30/2016 | 0.055 | 277,907 | 200,860 | |||||||||
6/29/2016(2) | 0.055 | 255,731 | 190,535 | |||||||||
6/1/2016(3) | 0.067 | 280,557 | 216,628 | |||||||||
4/29/2016 | 0.058 | 228,769 | 177,275 | |||||||||
3/31/2016 | 0.058 | 196,318 | 161,095 | |||||||||
2/29/2016 | 0.058 | 178,122 | 152,304 | |||||||||
1/29/2016 | 0.058 | 166,836 | 146,197 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.712 | $ | 3,464,844 | $ | 2,522,503 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share | Total Dividend (1) | Dividends Reinvested | |||||||||
12/28/2016 | $ | 0.055 | $ | 382,152 | $ | 255,650 | ||||||
11/30/2016 | 0.055 | 368,541 | 247,396 | |||||||||
11/2/2016 | 0.069 | 430,784 | 292,800 | |||||||||
9/30/2016 | 0.055 | 321,955 | 220,312 | |||||||||
8/31/2016 | 0.069 | 377,172 | 261,451 | |||||||||
7/30/2016 | 0.055 | 277,907 | 200,860 | |||||||||
6/29/2016 (2) | 0.055 | 255,731 | 190,535 | |||||||||
6/1/2016 (3) | 0.067 | 280,557 | 216,628 | |||||||||
4/29/2016 | 0.058 | 228,769 | 177,275 | |||||||||
3/31/2016 | 0.058 | 196,318 | 161,095 | |||||||||
2/29/2016 | 0.058 | 178,122 | 152,304 | |||||||||
1/29/2016 | 0.058 | 166,836 | 146,197 | |||||||||
Total | $ | 0.712 | $ | 3,464,844 | $ | 2,522,2503 |
1 | For the current |
2 | On May 12, 2016, the Board approved a $0.002 per share monthly increase to the dividend, which was normalized to the weekly distribution schedule starting in June 2016. |
3 | Beginning in May 2016, we began declaring dividends weekly. |
Payable Date | Dividend/ Share | Total Dividend(1) | Dividends Reinvested | |||||||||
12/31/2015 | $ | 0.058 | $ | 155,396 | $ | 139,260 | ||||||
11/30/2015 | 0.058 | 147,122 | 137,008 | |||||||||
10/30/2015 | 0.058 | 141,377 | 134,845 | |||||||||
9/30/2015 | 0.058 | 134,498 | 130,315 | |||||||||
8/31/2015 | 0.058 | 128,773 | 124,959 | |||||||||
7/31/2015 | 0.058 | 125,195 | 122,496 | |||||||||
6/30/2015 | 0.058 | 117,215 | 115,203 | |||||||||
5/29/2015 | 0.058 | 114,540 | 112,647 | |||||||||
4/30/2015 | 0.058 | 108,525 | 107,595 | |||||||||
3/31/2015 | 0.058 | 104,842 | 104,543 | |||||||||
2/27/2015 | 0.058 | 100,082 | 100,044 | |||||||||
1/30/2015 | 0.050 | 69,054 | 69,022 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.688 | $ | 1,446,619 | $ | 1,397,937 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share | Total Dividend (1) | Dividends Reinvested | |||||||||
12/31/2015 | $ | 0.058 | $ | 155,396 | $ | 139,260 | ||||||
11/30/2015 | 0.058 | 147,122 | 137,008 | |||||||||
10/30/2015 | 0.058 | 141,377 | 134,845 | |||||||||
9/30/2015 | 0.058 | 134,498 | 130,315 | |||||||||
8/31/2015 | 0.058 | 128,773 | 124,959 | |||||||||
7/31/2015 | 0.058 | 125,195 | 122,496 | |||||||||
6/30/2015 | 0.058 | 117,215 | 115,203 | |||||||||
5/29/2015 | 0.058 | 114,540 | 112,647 | |||||||||
4/30/2015 | 0.058 | 108,525 | 107,595 | |||||||||
3/31/2015 | 0.058 | 104,842 | 104,543 | |||||||||
2/27/2015 | 0.058 | 100,082 | 100,044 | |||||||||
1/30/2015 | 0.050 | 69,054 | 69,022 | |||||||||
Total | $ | 0.688 | $ | 1,446,619 | $ | 1,397,937 |
1 | Of the total dividends shown, $262,760 was classified as a return of capital. |
Item 6. |
[Reserved] |
The following selected financial data for the years ended December 31, 2020, 2019, 2018, 2017, and 2016 is derived from our financial statements, which have been audited by Cohen & Company, Ltd. (2020) and PricewaterhouseCoopers, LLP (“PwC”), our independent registered public accounting firm. The data should be read in conjunction with our financial statements and related notes thereto and “Item 7. Management’s Discussion and Analysis
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
“anticipate, “anticipate,” “predict,” “potential,” “plan” or similar words. The forward-looking statements contained in this quarterlyannual report on Form10-Q
large public and nonpublic companies and mezzanine and equity tranches of CLOs. Middle-market companies include companies with annual revenues between $50,000,000 and $2,500,000,000 and syndicated floating rate debt refers to loans and other instruments originated by a bank to a corporation that are sold off, or syndicated, to investors in pieces. We consider a healthcare company to be a company that is engaged in the design, development, production, sale, management or distribution of products, services or facilities used for or in connection with the healthcare industry. Additionally, we consider companies that are materially impacted by the healthcare industry (such as a contractor that derives significant revenue or profit from the construction of hospitals) as being engaged in the healthcare industry. We may invest without limit in companies that are not in the healthcare sector.
the minimum offering requirement and the commencement of our operations, the Investment Advisory Agreement became effective and the base management fee and any incentive fees, as applicable, payable to the Adviser under the Investment Advisory Agreement began to accrue. In aggregate as of December 31, 2020Prior to July 21, 2023, the Adviser controlscontrolled 2,549,002 total shares of common stock of the Company, including reinvestment of dividends, for a net amount of approximately $15.6$13.4 million as of July 21, 2023. On July 21, 2023, pursuant to the terms of a Stock Purchase Agreement, Liberty CLO Holdco Ltd. (“Liberty”) purchased a total of 2,549,002 shares of the Company, representing 27.05% of the Company’s currently issued and outstanding common stock as of July 21, 2023. In aggregate, as of December 31, 2023, Liberty controls 2,549,002 total shares of common stock of the Company, including reinvestment of dividends, for a net amount of approximately $13.6 million. In February 2018, we closed our continuous public offering of shares of common stock.
2024.
include amounts pertaining to the Expense Limitation Agreement, and do not include waived advisory and administration fees subject to recoupment discussed elsewhere herein.
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2020 | $ | 989,447 | $ | 639,959 | $ | 349,488 | $ | 101,541 | December 31, 2023 | |||||||||||
September 30, 2020 | 687,228 | 439,281 | 247,947 | 94,039 | September 30, 2023 | |||||||||||||||
June 30, 2020 | 445,585 | 291,677 | 153,908 | (30,539 | ) | June 30, 2023 | ||||||||||||||
March 31, 2020 | 257,226 | 72,779 | 184,447 | 184,447 | March 31, 2023 |
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2023 | $ | 902,219 | $ | 481,443 | $ | 420,776 | $ | 140,233 | December 31, 2026 | |||||||||||
September 30, 2023 | 630,924 | 350,382 | 280,543 | 96,669 | September 30, 2026 | |||||||||||||||
June 30, 2023 | 420,066 | 236,192 | 183,874 | 102,016 | June 30, 2026 | |||||||||||||||
March 31, 2023 | 208,486 | 126,628 | 81,858 | 81.858 | March 31, 2026 |
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2019 | $ | 1,098,789 | $ | 951,520 | $ | 147,269 | $ | 50,130 | December 31, 2022 | |||||||||||
September 30, 2019 | 849,345 | 752,206 | 97,139 | (17,417 | ) | September 30, 2022 | ||||||||||||||
June 30, 2019 | 586,411 | 471,855 | 114,556 | 75,592 | June 30, 2022 | |||||||||||||||
March 31, 2019 | 295,177 | 256,213 | 38,964 | 38,964 | March 31, 2022 |
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2022 | $ | 913,273 | $ | 535,679 | $ | 377,594 | $ | 92,216 | December 31, 2025 | |||||||||||
September 30, 2022 | 678,333 | 392,955 | 285,378 | 124,667 | September 30, 2025 | |||||||||||||||
June 30, 2022 | 434,019 | 273,308 | 160,711 | 98,950 | June 30, 2025 | |||||||||||||||
March 31, 2022 | 211,896 | 150,135 | 61,761 | 61,761 | March 31, 2025 |
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2018 | $ | 1,352,097 | $ | 924,677 | $ | 427,420 | $ | 279,079 | December 31, 2021 | |||||||||||
September 30, 2018 | 950,045 | 801,704 | 148,341 | 23,992 | September 30, 2021 | |||||||||||||||
June 30, 2018 | 613,809 | 489,460 | 124,349 | 44,203 | June 30, 2021 | |||||||||||||||
March 31, 2018 | 341,882 | 261,736 | 80,146 | 80,146 | March 31, 2021 |
Quarter Ended | Yearly Cumulative Other Expenses | Yearly Expense Limitation | Yearly Cumulative Expense Reimbursement | Quarterly Recoupable/ (Recouped) Amount | Recoupment Eligibility Expiration | |||||||||||||||
December 31, 2021 | $ | 892,640 | $ | 597,379 | $ | 295,261 | $ | 94,762 | December 31, 2024 | |||||||||||
September 30, 2021 | 664,052 | 463,553 | 200,499 | 68,134 | September 30, 2024 | |||||||||||||||
June 30, 2021 | 436,866 | 304,501 | 132,365 | 68,919 | June 30, 2024 | |||||||||||||||
March 31, 2021 | 220,126 | 156,680 | 63,446 | 63,446 | March 31, 2024 |
2021
investments: 48.3%20.5% in first lien senior secured loans, 7.3%0.3% in second lien senior secured loans, 10.6%0.5% in corporate bonds, 0.6%0.0% in asset-backed securities, 0.1%0.6% in warrants, 14.9%32.3% in common stock, 0.0%21.0% in preferred stocks 10.1%and 21.0% in LLC interests and 8.1% in partnership units.)interests. As of December 31, 2020, there were no investments under the TRS with BNP Paribas in our portfolio. On a look-through basis,2023, the debt investments in our portfolio carry a weighted average cost price of 88.76%98.09% on par or stated value, as applicable, and our estimated gross annual portfolio yield (which represents the expected yield to be generated by us on our investment portfolio based on the composition of our portfolio as of such date), prior to leverage costs, was 5.48%2.58% based on the amortized cost of our investments. The portfolio yield does not represent an actual investment return to stockholders and does not include income from CLO equity.
As of December 31, 2022, there were no positions held in the TRS.
Net Investment Activity | December 31, 2020 | December 31, 2019 | December 31, 2018 | |||||||||
Purchases | $ | 54,511,342 | $ | 42,308,348 | $ | 64,748,316 | ||||||
Proceeds from Securities Sold Short | — | — | — | |||||||||
Payment-in-kind | 400,250 | 635,742 | 517,567 | |||||||||
Purchases of Securities Sold Short | — | — | — | |||||||||
Sales and Principal Repayments | (72,368,347 | ) | (43,370,241 | ) | (54,849,304 | ) | ||||||
|
|
|
|
|
| |||||||
Net Portfolio Activity | $ | (17,456,755 | ) | $ | (1,426,151 | ) | $ | 10,416,579 | ||||
|
|
|
|
|
|
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||||||||||||||
New Investment Activity by Asset Class | Purchases | Percentage | Purchases | Percentage | Purchases | Percentage | ||||||||||||||||||
Senior Secured Loans—First Lien | $ | 27,159,682 | 49.7 | % | $ | 7,342,761 | 17.4 | % | $ | 25,960,529 | 40.1 | % | ||||||||||||
Senior Secured Loans—Second Lien | 6,299,722 | 11.6 | % | — | 0.0 | % | 3,527,778 | 5.4 | % | |||||||||||||||
Corporate Bonds—Senior Unsecured | 4,842,635 | 8.9 | % | 9,315,445 | 22.0 | % | 21,092,094 | 32.6 | % | |||||||||||||||
Equities | 3,583,987 | 6.6 | % | 7,913,146 | 18.7 | % | 8,738,042 | 13.5 | % | |||||||||||||||
LLC Interests | 6,312,618 | 11.6 | % | 7,000,000 | 16.5 | % | — | 0.0 | % | |||||||||||||||
Mortgage-Backed-Securities | — | 0.0 | % | 4,000,000 | 9.5 | % | — | 0.0 | % | |||||||||||||||
Closed-End Mutual Funds | — | 0.0 | % | 994,448 | 2.4 | % | 1,429,865 | 2.2 | % | |||||||||||||||
Preferred Stocks | — | 0.0 | % | 5,689,561 | 13.4 | % | 4,000,008 | 6.2 | % | |||||||||||||||
Warrants | — | 0.0 | % | 52,987 | 0.1 | % | — | 0.0 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Investments | $ | 54,511,342 | 100.0 | % | $ | 42,308,348 | 100.0 | % | $ | 64,748,316 | 100.0 | % |
2021:
Net Investment Activity | December 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||
Purchases | $ | 4,569,498 | $ | 9,519,074 | $ | 8,119,981 | ||||||
Proceeds from Securities Sold Short | — | — | — | |||||||||
Payment-in-kind | 131,372 | 193,003 | 100,908 | |||||||||
Purchases of Securities Sold Short | — | — | — | |||||||||
Sales and Principal Repayments | (8,576,616 | ) | (11,143,514 | ) | (17,408,129 | ) | ||||||
Net Portfolio Activity | $ | (3,875,746 | ) | $ | (1,431,437 | ) | $ | (9,187,240 | ) | |||
For the Year Ended December 31, 2023 | For the Year Ended December 31, 2022 | For the Year Ended December 31, 2021 | ||||||||||||||||||||||
New Investment Activity by Asset Class | Purchases | Percentage | Purchases | Percentage | Purchases | Percentage | ||||||||||||||||||
Senior Secured Loans—First Lien | $ | 3,504,498 | 76.7 | % | $ | 3,485,000 | 36.6 | % | $ | 5,335,151 | 65.7 | % | ||||||||||||
Senior Secured Loans—Second Lien | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||
Corporate Bonds – Senior Unsecured | 482,500 | 10.6 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||
Equities | 582,500 | 12.7 | % | 34,088 | 0.4 | % | 1,013,533 | 12.5 | % | |||||||||||||||
LLC Interests | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||
Mortgage-Backed-Securities | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||
Closed-End Mutual Funds | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||||||||
Preferred Stocks | — | 63.0 | % | 5,999,986 | 63.0 | % | 1,750,000 | 21.6 | % | |||||||||||||||
Warrants | — | 0.0 | % | — | 0.0 | % | 21,297 | 0.2 | % | |||||||||||||||
Total Investments | $ | 4,569,498 | 100.0 | % | $ | 9,519,074 | 100.0 | % | $ | 8,119,981 | 100.0 | % | ||||||||||||
December 31, 2020 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost(1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans—First Lien | $ | 30,123,122 | $ | 31,276,803 | 48.4 | % | ||||||
Senior Secured Loans—Second Lien | 4,742,429 | 4,745,268 | 7.3 | % | ||||||||
Asset-Backed Securities | 671,187 | 363,767 | 0.6 | % | ||||||||
LLC Interests | 7,000,000 | 6,535,245 | 10.1 | % | ||||||||
Corporate Bonds | 6,736,607 | 6,883,952 | 10.6 | % | ||||||||
Common Stocks | 7,774,595 | 9,615,455 | 14.9 | % | ||||||||
Preferred Stock | 3,051,714 | — | 0.0 | % | ||||||||
Warrants | 52,988 | 33,902 | 0.1 | % | ||||||||
Partnership Units | 6,312,618 | 5,214,223 | 8.1 | % | ||||||||
|
|
|
|
|
| |||||||
Total Invested Assets | $ | 66,465,260 | $ | 64,668,615 | 100 | % | ||||||
|
|
|
|
|
|
December 31, 2023 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost (1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans — First Lien | $ | 10,580,813 | $ | 10,130,961 | 20.5 | % | ||||||
Senior Secured Loans — Second Lien | 1,500,056 | 127,556 | 0.3 | % | ||||||||
Asset-Backed Securities | 218,665 | 84 | 0.0 | % | ||||||||
LLC Interests | 10,734,196 | 10,370,499 | 21.0 | % | ||||||||
Corporate Bonds | 1,380,892 | 727,523 | 1.5 | % | ||||||||
Common Stocks | 9,924,122 | 15,961,319 | 32.3 | % | ||||||||
Preferred Stock | 11,829,987 | 11,822,375 | 23.9 | % | ||||||||
Warrants | 74,284 | 272,969 | 0.6 | % | ||||||||
Total Invested Assets | $ | 45,998,823 | $ | 49,413,286 | 100 | % | ||||||
(1) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
December 31, 2019 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost(1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans—First Lien | $ | 8,473,042 | $ | 7,683,965 | 7.7 | % | ||||||
Senior Secured Loans—Second Lien | 553,265 | 326,838 | 0.3 | % | ||||||||
Senior Secured Loans—Escrow Loan | 79,372 | 1,925 | 0.0 | % | ||||||||
Unsecured Loans | 4,195,580 | 3,713,191 | 3.7 | % | ||||||||
Asset-Backed Securities | 896,536 | 743,520 | 0.7 | % | ||||||||
Mortgage-Backed Securities | 3,996,530 | 3,994,444 | 4.0 | % | ||||||||
LLC Interest | 9,189,561 | 9,358,646 | 9.3 | % | ||||||||
Closed-End Mutual Funds | 2,419,467 | 2,136,410 | 2.1 | % | ||||||||
Corporate Bonds | 42,275,712 | 40,822,499 | 40.6 | % | ||||||||
Common Stocks | 20,812,044 | 23,018,795 | 22.9 | % | ||||||||
Preferred Stocks | 10,285,555 | 8,491,470 | 8.5 | % | ||||||||
Warrants | 52,988 | 74,598 | 0.1 | % | ||||||||
Rights | 148,370 | 61,391 | 0.1 | % | ||||||||
|
|
|
|
|
| |||||||
Total Invested Assets | $ | 103,378,022 | $ | 100,427,692 | 100 | % |
December 31, 2022 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost (1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans — First Lien | $ | 14,645,107 | $ | 11,575,822 | 21.7 | % | ||||||
Senior Secured Loans — Second Lien | 2,976,056 | 2,652,371 | 5.0 | % | ||||||||
Asset-Backed Securities | 388,541 | 7,036 | 0.0 | % | ||||||||
LLC Interests | 3,666,112 | 4,689,242 | 8.8 | % | ||||||||
Corporate Bonds | 3,358,783 | 2,704,917 | 5.1 | % | ||||||||
Common Stocks | 17,100,444 | 19,514,684 | 36.6 | % | ||||||||
Preferred Stock | 11,829,986 | 11,967,910 | 22.5 | % | ||||||||
Warrants | 74,284 | 181,733 | 0.3 | % | ||||||||
Total Invested Assets | $ | 54,039,313 | $ | 53,293,715 | 100 | % | ||||||
(1) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
The following tables summarize the amortized cost and the fair value
December 31, 2020 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost(1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans—First Lien | $ | 30,123,122 | $ | 31,276,803 | 48.4 | % | ||||||
Senior Secured Loans—Second Lien | 4,742,429 | 4,745,268 | 7.3 | % | ||||||||
Asset-Backed Securities | 671,187 | 363,767 | 0.6 | % | ||||||||
LLC Interests | 7,000,000 | 6,535,245 | 10.1 | % | ||||||||
Corporate Bonds | 6,736,607 | 6,883,952 | 10.6 | % | ||||||||
Common Stocks | 7,774,595 | 9,615,455 | 14.9 | % | ||||||||
Preferred Stock | 3,051,714 | — | 0.0 | % | ||||||||
Warrants | 52,988 | 33,902 | 0.1 | % | ||||||||
Partnership Units | 6,312,618 | 5,214,223 | 8.1 | % | ||||||||
|
|
|
|
|
| |||||||
Total Invested Assets | $ | 66,465,260 | $ | 64,668,615 | 100 | % |
|
December 31, 2019 | ||||||||||||
Portfolio Composition by Investment Type | Amortized Cost(1) | Fair Value | Percentage of Portfolio (at fair value) | |||||||||
Senior Secured Loans—First Lien | $ | 51,120,740 | $ | 47,656,091 | 32.1% | |||||||
Senior Secured Loans—Second Lien | 8,810,397 | 8,254,393 | 5.6% | |||||||||
Senior Secured Loans—Escrow Loan | 79,372 | 1,925 | 0.0% | |||||||||
Unsecured Loans | 4,195,580 | 3,713,191 | 2.5% | |||||||||
Asset-Backed Securities | 896,536 | 743,520 | 0.5% | |||||||||
Mortgage-Backed Mutual Funds | 3,996,530 | 3,994,444 | 2.7% | |||||||||
Closed-End Mutual Funds | 2,419,467 | 2,136,410 | 1.4% | |||||||||
Corporate Bonds | 42,275,712 | 40,822,499 | 27.6% | |||||||||
Common Stocks | 20,812,044 | 23,018,795 | 15.5% | |||||||||
LLC interest | 9,189,561 | 9,358,646 | 6.3% | |||||||||
Preferred Stocks | 10,285,555 | 8,491,470 | 5.7% | |||||||||
Warrants | 52,988 | 74,598 | 0.1% | |||||||||
Rights | 148,370 | 61,391 | 0.0% | |||||||||
|
|
|
|
|
| |||||||
Total Invested Assets | $ | 154,282,852 | $ | 148,327,373 | 100.0% |
|
December 31, 2020 | December 31, 2019 | |||||||
Number of Investments | 45 | 54 | ||||||
% Variable Rate (based on fair value) | 82% | (1) | 56% | (1) | ||||
% Non-Income Producing Equity or Other Investments (based on fair value) | 18% | (1) | 9% | (1) | ||||
Weighted Average Cost Price of Investments (as a % of par or stated value) | 88.76% | (1) | 97.24% | (1) | ||||
Weighted Average Credit Rating of Investments that were Rated | Caa1 | (1) | B3 | (1) | ||||
% of Fixed Income Investments on Non-Accrual (based on fair value) | 0.2% | (1) | 0.1% | (1) |
|
December 31, 2023 | December 31, 2022 | |||||||
Number of Investments | 35 | 39 | ||||||
% Variable Rate (based on fair value) | 76 | % | 71 | % | ||||
% Non-Income Producing Equity or Other Investments (based on fair value) | 28 | % | 27 | % | ||||
Weighted Average Cost Price of Investments (as a % of par or stated value) | 98.09 | % | 94.17 | % | ||||
Weighted Average Credit Rating of Investments that were Rated | Ca | Caa1 | ||||||
% of Fixed Income Investments on Non-Accrual (based on fair value) | 6.4 | % | 0.0 | % |
December 31, 2020 | December 31, 2019 | |||||||||||||||
Portfolio Composition by Strategy | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Broadly Syndicated—Private | $ | 5,491,997 | 8.5% | $ | 4,611,683 | 4.6% | ||||||||||
Broadly Syndicated—Public | 386,613 | 0.6% | 21,598,588 | 21.5% | ||||||||||||
Middle-Market | 58,426,238 | 90.3% | 73,473,901 | 73.2% | ||||||||||||
Opportunistic/Other | 363,767 | 0.6% | 743,520 | 0.7% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Invested Assets | $ | 64,668,615 | 100.0% | $ | 100,427,692 | 100.0% | ||||||||||
|
|
|
|
|
|
|
|
2022:
December 31, 2023 | December 31, 2022 | |||||||||||||||
Portfolio Composition by Strategy | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Broadly Syndicated – Private | $ | 5,934,810 | 12.0 | % | $ | 6,183,456 | 11.6 | % | ||||||||
Broadly Syndicated – Public | 245,327 | 0.5 | % | 2,561,915 | 4.8 | % | ||||||||||
Middle-Market | 40,427,162 | 81.9 | % | 42,133,492 | 74.4 | % | ||||||||||
Opportunistic/Other | 2,805,987 | 5.7 | % | 2,414,852 | 5.1 | % | ||||||||||
Total Invested Assets | $ | 49,413,286 | 100.0 | % | $ | 53,293,715 | 100.0 | % | ||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||||
Industry Classifications | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Chemicals | $ | 42,500 | 0.1% | $ | 42,500 | 0.0% | ||||||||||
Consumer Products | 2,070,427 | 3.2% | 2,000,000 | 2.0% | ||||||||||||
Energy | 422,827 | 0.7% | 6,745,696 | 6.7% | ||||||||||||
Financials | 1,488,767 | 2.3% | 12,900,074 | 12.9% | ||||||||||||
Healthcare | 40,209,053 | 62.2% | 44,383,560 | 44.2% | ||||||||||||
Materials | — | 0.0% | 3,734,736 | 3.7% | ||||||||||||
Media/Telecommunications | 386,613 | 0.6% | 2,457,365 | 2.5% | ||||||||||||
Real Estate Investment Trusts (REITs) | 1,186,113 | 1.8% | 13,458,505 | 13.4% | ||||||||||||
Real Estate | 11,111,826 | 17.2% | 6,432,657 | 6.4% | ||||||||||||
Retail | 532,642 | 0.8% | 1,124,467 | 1.1% | ||||||||||||
Service | 59,183 | 0.1% | 59,183 | 0.1% | ||||||||||||
Telecommunication Services | 5,491,997 | 8.5% | 4,611,683 | 4.6% | ||||||||||||
Manufacturing | 1,666,667 | 2.6% | — | 0.0% | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Invested Assets | $ | 64,668,615 | 100.0% | $ | 100,427,692 | 100.0% | ||||||||||
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|
|
|
|
|
|
2022:
December 31, 2023 | December 31, 2022 | |||||||||||||||
Industry Classifications | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Bioplastics | $ | 2,000,000 | 4.0 | % | $ | — | 0.1 | % | ||||||||
Chemicals | 42,500 | 0.1 | % | 42,500 | 0.1 | % | ||||||||||
Consumer Discretionary | 488,665 | 1.0 | % | — | 0.0 | % | ||||||||||
Consumer Products | 3,016,752 | 6.1 | % | 3,088,750 | 5.8 | % | ||||||||||
Energy | 2,504,104 | 5.1 | % | 1,752,941 | 3.3 | % | ||||||||||
Financials | 4,722,584 | 9.6 | % | 3,180,161 | 6.0 | % | ||||||||||
Healthcare | 17,228,699 | 34.9 | % | 26,101,074 | 49.0 | % | ||||||||||
Media/Telecommunications | 245,327 | 0.5 | % | 310,563 | 0.6 | % | ||||||||||
Real Estate Investment Trusts (REITs) | 805,987 | 1.6 | % | 1,018,779 | 1.9 | % | ||||||||||
Real Estate | 12,423,858 | 25.1 | % | 11,613,222 | 21.8 | % | ||||||||||
Service | — | 0.0 | % | 2,268 | 0.0 | % | ||||||||||
Telecommunication Services | 5,934,810 | 12.0 | % | 6,183,457 | 11.6 | % | ||||||||||
Total Invested Assets | $ | 49,413,286 | 100.0 | % | $ | 53,293,715 | 100.0 | % | ||||||||
Information regarding these investments is provided below. This additional information is limited to publicly available information, and does not address credit worthiness or financial viability of the issuer, or our future plans as it relates to a specific investment:
Envision Healthcare Corp.
BW NHHC Holdco,United States.
RXB Holdings,global hearing aid manufacturer.
Surgery Center Holdings, Inc.: As of December 31, 2020, and December 31, 2019, we held corporate bonds of Surgery Center Holdings, Inc. with an aggregate fair value of $3.7 million and $11.9 million, respectively. Surgery Center Holdings, Inc. is a leading healthcare services company with a differentiated outpatient delivery model focused on providing high quality, cost effective solutions for surgical and related ancillary care. As of December 31, 2020, the company owned or operated a portfolio of 126 surgical facilities, comprised of 110 ambulatory surgery centers and 16 surgical hospitals in 30 states
RadNet, Inc.: As of December 31, 2020, and December 31, 2019, we held first lien senior secured loans of RadNet, Inc. with an aggregate fair value of $3.5 million and $0.0 million, respectively. As of December 31, 2020, the company owns and/or manages more than 334 centers that offer a variety of diagnostic imaging services, including magnetic resonance imaging (MRI), computed tomography (CT), PET scanning, X-ray, ultrasound, and mammography. Its facilities are typically organized in regional clusters around urban hubs. RadNet contracts with groups of radiologists and other third parties to provide the actual medical services while it runs the administration of the facilities and takes a cut of the revenues plus a management fee. It also develops and sells radiology software and provides teleradiology interpretation services.
19 states.
2021
loans generally pay interest at rates which are periodically determined by reference to a base lending rate plus a spread. The base lending rate is typically the three-month LIBOR.SOFR. The settlement of bank loans differs from the settlement of many other equity or debt instruments. Bank loans are manually settled through the agent by assignment. As a result, settlement can take an undetermined amount of time. Currently, according to data provided by Markit Partners,S&P Global, bank loans settle, on average, on the seventeenth day after the trade date. Generally, interest does not begin to accrue to the buyer until seven business days after the trade date.
Period Ended | Advisory Fees Waived and Subject to Recoupment(1) | Administrator fees Waived and Subject to Recoupment(1) | Recoupment Eligibility Expiration | |||||||||
December 31, 2017 | $ | 413,916 | $ | 75,906 | Expired | |||||||
September 30, 2017 | 305,288 | 69,308 | Expired | |||||||||
June 30, 2017 | 389,733 | 77,947 | Expired | |||||||||
March 31, 2017 | 390,969 | 78,194 | Expired | |||||||||
December 31, 2016 | 366,861 | 73,372 | Expired | |||||||||
September 30, 2016 | 343,320 | 68,664 | Expired | |||||||||
June 30, 2016 | 74,421 | 14,884 | Expired | |||||||||
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|
|
| |||||||||
Total | $ | 2,284,508 | $ | 458,275 | ||||||||
|
|
|
|
Period Ended | Advisory Fees Waived and Subject to Recoupment (1) | Administrator fees Waived and Subject to Recoupment (1) | Recoupment Eligibility Expiration | |||||||||
December 31, 2017 | $ | 413,916 | $ | 75,906 | Expired | |||||||
September 30, 2017 | 305,288 | 69,308 | Expired | |||||||||
June 30, 2017 | 389,733 | 77,947 | Expired | |||||||||
March 31, 2017 | 390,969 | 78,194 | Expired | |||||||||
December 31, 2016 | 366,861 | 73,372 | Expired | |||||||||
September 30, 2016 | 343,320 | 68,664 | Expired | |||||||||
June 30, 2016 | 74,421 | 14,884 | Expired | |||||||||
Total | $ | 2,284,508 | $ | 458,275 | ||||||||
(1) | The Adviser has permanently waived the recoupment of any advisory fees or administration fees calculated on the portion of gross assets attributable to the receivable from Adviser balance on the |
For the Year Ended December 31, 2023 | For the Year Ended December 31, 2021 | For the Year Ended December 31, 2021 | ||||||||||
Audit and tax fees | $ | 166,039 | $ | 167,864 | $ | 168,254 | ||||||
Legal fees | 43,949 | 53,658 | 72,441 | |||||||||
Custodian and accounting service fees | 311,664 | 311,050 | 307,438 | |||||||||
Reports to stockholders | 134,324 | 82,721 | 75,060 | |||||||||
Stock transfer fee | 167,547 | 209,866 | 208,251 | |||||||||
Directors’ fees | 15,194 | 18,170 | 17,781 | |||||||||
Other expenses | 63,502 | 69,944 | 43,415 | |||||||||
Total | $ | 902,219 | $ | 913,273 | $ | 892,640 | ||||||
Our other expenses subject to the Expense Limitation Agreement for years ended December 31, 2020, 2019, and 2018 were $989,447, $1,098,789, and $1,352,097, respectively, and consisted of the following:
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||
Audit and tax fees | $ | 223,648 | $ | 249,463 | $ | 217,586 | ||||||
Legal fees | 81,141 | 53,438 | 201,688 | |||||||||
Custodian and accounting service fees | 312,199 | 318,085 | 315,384 | |||||||||
Reports to stockholders | 82,492 | 68,888 | 59,427 | |||||||||
Stock transfer fee | 248,563 | 329,695 | 405,227 | |||||||||
Directors’ fees | 20,123 | 19,553 | 19,804 | |||||||||
Other expenses | 21,281 | 59,667 | 132,981 | |||||||||
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|
| |||||||
Total | $ | 989,447 | $ | 1,098,789 | $ | 1,352,097 | ||||||
|
|
|
|
|
|
US Gaming LLC Interests.
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||
Income | $ | 4,813,182 | $ | 7,847,493 | $ | 7,568,407 | ||||||
Expenses | (2,244,253 | ) | (4,690,817 | ) | (3,872,756 | ) | ||||||
Net Realized Gain/(Loss) | (27,366,934 | ) | 389,680 | 2,844,449 | ||||||||
Net Unrealized Appreciation (Depreciation) | 3,898,727 | 5,644,539 | 12,749,374 | |||||||||
Net increase from amounts committed by affiliates | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | (20,899,278 | ) | $ | 9,190,895 | $ | (6,209,274 | ) | ||||
|
|
|
|
|
|
For the Year Ended December 31, 2023 | For the Year Ended December 31, 2022 | For the Year Ended December 31, 2021 | ||||||||||
Income | $ | 3,332,223 | $ | 3,692,613 | $ | 4,097,859 | ||||||
Expenses | (1,678,309 | ) | (1,902,995 | ) | (2,174,432 | ) | ||||||
Net Realized Gain/(Loss) | (4,345,706 | ) | 329,081 | (3,479,546 | ) | |||||||
Net Unrealized Appreciation (Depreciation) | 4,132,719 | (6,183,873 | ) | 7,262,262 | ||||||||
Net increase from amounts committed by affiliates | — | — | — | |||||||||
Total | $ | 1,453,947 | $ | (4,065,174 | ) | $ | 5,706,143 | |||||
In aggregate as of December 31, 2020,
On October 19, 2017, the Company entered into a financing arrangement (the “Financing Arrangement”) with BNP Paribas Prime Brokerage International, Ltd., BNP Prime Brokerage, Inc., and BNP Paribas (together, the “BNPP Entities”). Under the Financing Agreement, the BNPP Entities may make margin loans to the Company at a rate of one-month LIBOR + 1.30%. The BNPP Entities have the right to cap the amount of margin loans with prior notice to the Company. The Financing Arrangement could be terminated by either the Company or the BNPP Entities with 179 days’ notice.
On April 15, 2020, the Financing Arrangement was paid down and closed. As of December 31, 2020, and December 31, 2019, $0 and $33,714,864, respectively, were outstanding under the Financing Arrangement.
For the year ended December 31, 2020, 2019, and 2018, the components of total interest expense were as follows:
For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | ||||||||||
Direct interest expense | $ | 176,711 | $ | 1,233,085 | $ | 759,234 | ||||||
Commitment fees | (204 | ) | 204 | — | ||||||||
Amortization of financing costs | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 176,707 | $ | 1,233,289 | $ | 759,234 | ||||||
|
|
|
|
|
|
On June 13, 2017, the Company, entered into the TRS with BNP Paribas over one or more loans, with a maximum aggregate notional amount of the portfolio debt securities subject to the TRS of $40 million. On April 2, 2018, the Company amended and restated the TRS Agreement with BNP Paribas to increase the maximum aggregate notional amount of the portfolio debt securities subject to the TRS to $60 million.
On June 10, 2020, the TRS expired. As of December 31, 2019, the TRS had a notional amount of $50,904,830 and a market value of $47,899,681. As December 31, 2019, cash collateral of $21,400,000 was posted against the TRS. See Note 7 to the financial statements included herein for additional information on the TRS.
management fee, expenses payable under the Administration Agreement and any interest expense and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee).
2023.
For the years ended December 31, 2023 and 2022 the Company made $1,757,477 and $1,999,373 of distributions in excess of net investment income.
Payable Date | Dividend/ Share(1) | Total Dividend(1) | Dividends Reinvested(2)(3) | |||||||||
12/31/2020(3) | $ | 0.090 | $ | 942,766 | $ | — | ||||||
9/30/2020 | 0.090 | 944,487 | 347,961 | |||||||||
4/27/2020 | 0.060 | 633,540 | 241,202 | |||||||||
3/27/2020 | 0.060 | 629,128 | 237,068 | |||||||||
2/27/2020 | 0.060 | 631,127 | 245,478 | |||||||||
1/30/2020 | 0.060 | 628,352 | 396,837 | |||||||||
1/2/2020(2) | — | — | 396,214 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.420 | $ | 4,409,400 | $ | 1,864,760 | ||||||
|
|
|
|
|
|
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2) (3) | |||||||||
12/31/2023 (3) | $ | 0.090 | $ | 837,847 | $ | — | ||||||
9/30/2023 | 0.090 | 842,040 | 277,313 | |||||||||
6/30/2023 | 0.090 | 847,993 | 275,845 | |||||||||
3/31/2023 | 0.090 | 859,401 | 280,881 | |||||||||
1/24/2023 (2) | — | — | 293,686 | |||||||||
Total | $ | 0.360 | $ | 3,387,281 | $ | 1,127,725 | ||||||
1 | Of the total dividends shown, $1,757,477 was classified as a return of capital. |
2 | The December 2022 Dividend was reinvested in January 2023, see total December 2022 Dividend in table below. |
3 | The December 2023 Dividend was reinvested in January 2024. |
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2) (3) | |||||||||
12/31/2022 (3) | $ | 0.090 | $ | 870,980 | $ | — | ||||||
9/30/2022 | 0.090 | 874,461 | 303,070 | |||||||||
6/30/2022 | 0.090 | 887,710 | 298,766 | |||||||||
3/31/2022 | 0.090 | 892,680 | 301,212 | |||||||||
1/2/2022 (2) | — | — | 306,152 | |||||||||
Total | $ | 0.360 | $ | 3,525,831 | $ | 1,209,200 | ||||||
1 | Of the total dividends shown, $1,961,318 was classified as a return of capital. |
2 | The December 2021 Dividend was reinvested in January 2022, see total December 2021 Dividend in table below. |
3 | The December 2022 Dividend was reinvested in January 2023. |
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2) (3) | |||||||||
12/31/2021 (3) | $ | 0.090 | $ | 896,061 | $ | — | ||||||
9/30/2021 | 0.090 | 903,359 | 320,218 | |||||||||
6/30/2021 | 0.090 | 909,619 | 322,287 | |||||||||
3/31/2021 | 0.090 | 924,140 | 331,405 | |||||||||
1/2/2021 (2) | — | — | 345,331 | |||||||||
Total | $ | 0.360 | $ | 3,633,179 | $ | 1,319,241 | ||||||
1 | For the current period, there were no dividends classified as a return of capital. |
2 | The December 2020 Dividend was reinvested in January 2021, see total December 2020 Dividend in table below. |
3 | The December 2021 Dividend was reinvested in January 2022. |
Payable Date | Dividend/ Share (1) | Total Dividend (1) | Dividends Reinvested (2) (3) | |||||||||
12/31/2020 (3) | $ | 0.090 | $ | 942,766 | $ | — | ||||||
9/30/2020 | 0.090 | 944,487 | 347,961 | |||||||||
4/27/2020 | 0.060 | 633,540 | 241,202 | |||||||||
3/27/2020 | 0.060 | 629,128 | 237,068 | |||||||||
2/27/2020 | 0.060 | 631,127 | 245,478 | |||||||||
1/30/2020 | 0.060 | 628,352 | 396,837 | |||||||||
1/2/2020 (2) | — | — | 396,214 | |||||||||
Total | $ | 0.420 | $ | 4,409,400 | $ | 1,864,760 | ||||||
1 | For the current period, there were no dividends classified as a return of capital. |
2 | The December 2019 Dividend was reinvested in January 2020, see total December 2019 Dividend in table below. |
3 | The December 2020 Dividend was reinvested in January |
For the year ended December 31, 2019, the Company made the following distributions:
Payable Date | Dividend/ Share(1) | Total Dividend(1) | Dividends Reinvested(2)(3) | |||||||||
1/02/2020 | $ | 0.060 | $ | 625,526 | $ | — | ||||||
11/28/2019 | 0.060 | 630,505 | 398,908 | |||||||||
10/30/2019 | 0.060 | 627,684 | 397,044 | |||||||||
10/02/2019 | 0.060 | 632,534 | 397,215 | |||||||||
8/28/2019 | 0.060 | 628,890 | 398,232 | |||||||||
7/31/2019 | 0.060 | 627,743 | 395,900 | |||||||||
6/26/2019 | 0.060 | 624,201 | 396,249 | |||||||||
5/30/2019 | 0.060 | 625,758 | 398,933 | |||||||||
5/01/2019 | 0.060 | 623,117 | 396,582 | |||||||||
3/27/2019 | 0.060 | 620,420 | 392,542 | |||||||||
2/27/2019 | 0.060 | 625,257 | 397,969 | |||||||||
1/30/2019 | 0.060 | 622,648 | 397,645 | |||||||||
1/03/2019(2) | — | — | 456,444 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.720 | $ | 7,514,283 | $ | 4,823,663 | ||||||
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2018, the Company made the following distributions:
Payable Date | Dividend/ Share | Total Dividend(1) | Dividends Reinvested(2) | |||||||||
1/03/2019 | $ | 0.069 | $ | 721,979 | $ | — | ||||||
11/28/2018 | 0.055 | 579,638 | 370,940 | |||||||||
10/31/2018 | 0.069 | 721,071 | 461,560 | |||||||||
9/26/2018 | 0.055 | 578,884 | 369,031 | |||||||||
8/29/2018 | 0.055 | 576,777 | 367,935 | |||||||||
8/01/2018 | 0.069 | 717,708 | 459,995 | |||||||||
6/27/2018 | 0.055 | 579,962 | 367,710 | |||||||||
5/30/2018 | 0.055 | 577,847 | 368,895 | |||||||||
5/02/2018 | 0.069 | 719,079 | 459,922 | |||||||||
3/28/2018 | 0.055 | 577,343 | 367,026 | |||||||||
2/28/2018 | 0.055 | 566,708 | 368,154 | |||||||||
1/31/2018 | 0.069 | 683,782 | 451,968 | |||||||||
|
|
|
|
|
| |||||||
Total | $ | 0.730 | $ | 7,600,778 | $ | 4,413,136 | ||||||
|
|
|
|
|
|
|
|
In aggregate as of December 31, 2020,
unaffiliated market makers, other financial institutions that trade in similar investments or based on prices provided by independent third-party pricing services. For investments where there are no available bid quotations, fair value is derived using proprietary models that consider the analyses of independent valuation agents as well as credit risk, liquidity, market credit spreads, and other applicable factors for similar transactions.
The
Rule
Instrument | Type | Fair Value | ||||
Grayson Investor Corp | Asset-Backed Securities | $ | 286,000 | |||
PAMCO CLO 1997-1A B | Asset-Backed Securities | 77,767 | ||||
American Banknote Corp. | Common Stocks | 1,125,000 | ||||
Creative Science Properties, Inc. | Common Stocks | 1,661,000 | ||||
SteadyMed Ltd. | Common Stocks | 40,405 | ||||
TerreStar Corp. | Common Stocks | 4,630,427 | ||||
NexPoint Capital REIT, LLC | LLC Interests | 228,215 | ||||
TRU KIDS | Common Stocks | 532,642 | ||||
Western States Life Insurance | Common Stocks | 59,183 | ||||
SFR WLIF III, LLC | LLC Interests | 1,493,629 | ||||
SFR WLIF II, LLC | LLC Interests | 2,742,974 | ||||
US GAMING LLC | LLC Interests | 2,070,427 | ||||
TerreStar Corp. | Senior Secured Loans | 653,280 | ||||
TerreStar Corp. | Senior Secured Loans | 154,659 | ||||
TerreStar Corp. | Senior Secured Loans | 27,631 | ||||
TerreStar Corp. | Senior Secured Loans | 26,000 | ||||
Galena Biopharma, Inc. | Warrant | 1 | ||||
Gemphire Therapeutics, Inc. | Warrant | — | ||||
SCYNEXIS, Inc. | Warrant | — |
Instrument | Type | Fair Value | ||||
Grayson Investor Corp. | Asset-Backed Securities | $ | 84 | |||
American Banknote Corp. | Common Stocks | 3,536,250 | ||||
IQHQ, Inc. | Common Stocks | 2,533,000 | ||||
MidWave Wireless, Inc. (fka Terrestar Corp.) | Common Stocks | 4,732,181 | ||||
MPM Holdings, Inc. | Common Stocks | 42,500 | ||||
NexPoint Capital REIT, LLC | LLC Interests | 7,014,774 | ||||
SFR WLIF III, LLC | LLC Interests | 338,973 | ||||
US Gaming, LLC | LLC Interests | 3,016,752 | ||||
Apnimed, Inc. | Preferred Stocks | 1,644,435 | ||||
Apnimed, Inc. | Preferred Stocks | 928,197 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 4,452,382 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 3,611,111 | ||||
CCS Medical, Inc. | Senior Secured Loans | 3,000,000 | ||||
MidWave Wireless, Inc. (fka Terrestar Corp.) | Senior Secured Loans | 912,118 | ||||
MidWave Wireless, Inc. (fka Terrestar Corp.) | Senior Secured Loans | 215,938 | ||||
MidWave Wireless, Inc. (fka Terrestar Corp.) | Senior Secured Loans | 35,994 | ||||
MidWave Wireless, Inc. (fka Terrestar Corp.) | Senior Secured Loans | 38,579 | ||||
NexPoint Capital REIT, LLC | Senior Secured Loans | 463,314 | ||||
PlantSwitch, Inc. | Senior Secured Loans | 2,000,000 |
Instrument | Type | Fair Value | ||||
PAMCO CLO 1997-1A B | Asset-Backed Securities | $ | 139,629 | |||
American Banknote Corp | Common Stocks | 2,467,500 | ||||
OmniMax International, Inc. | Common Stocks | 20,898 | ||||
SteadyMed Ltd. | Common Stocks | 40,405 | ||||
TerreStar Corp. | Common Stocks | 3,890,081 | ||||
NexPoint Capital REIT, LLC | LLC Interests | 2,425,989 | ||||
SFR WLIF III, LLC | LLC Interests | 1,615,315 | ||||
SFR WLIF II, LLC | LLC Interests | 3,317,342 | ||||
US GAMING LLC | LLC Interests | 2,000,000 | ||||
TerreStar Corp. | Senior Secured Loans | 583,470 | ||||
TerreStar Corp. | Senior Secured Loans | 138,132 | ||||
OmniMax International, Inc | Unsecured Loans | 3,713,191 | ||||
Galena Biopharma, Inc. | Warrant | — | ||||
Gemphire Therapeutics, Inc. | Warrant | 1,340 | ||||
OmniMax International, Inc. | Warrant | 647 | ||||
SCYNEXIS, Inc. | Warrant | 28,497 |
Prior to its termination, the Company valued the TRS in accordance with the TRS Agreement. Pursuant to the TRS Agreement, the value of the TRS was based on the increase or decrease in the value of the loans underlying the TRS, together with accrued interest income, interest expense and certain other expenses incurred under the TRS. The loans underlying the TRS were valued based on indicative bid prices provided by an independent third-party pricing service. Bid prices reflected the highest price that market participants may be willing to pay. These valuations are sent to the Company for review and testing.
The Valuation Committee and the Board reviewed and approved the value of the TRS, as well as the value of the loans underlying the TRS, on a quarterly basis. To the extent the Valuation Committee or the Board had any questions or concerns regarding the valuation of the loans underlying the TRS, such valuation was discussed or challenged pursuant to the terms of the TRS Agreement. For additional information on the TRS, see Note 7 to the financial statements included herein. The TRS expired on June 10, 2020.
Instrument | Type | Fair Value | ||||
Grayson Investor Corp. | Asset-Backed Securities | $ | 7,023 | |||
PAMCO CLO 1997-1A B | Asset-Backed Securities | 13 | ||||
American Banknote Corp. | Common Stocks | 1,732,500 | ||||
IQHQ, Inc. | Common Stocks | 2,359,000 | ||||
Terrestar Corp. | Common Stocks | 5,114,214 | ||||
Wayne Services Legacy Inc. | Common Stocks | 2,269 | ||||
NexPoint Capital REIT, LLC | LLC Interests | 1,176,024 | ||||
SFR WLIF III, LLC | LLC Interests | 424,468 | ||||
US Gaming, LLC | LLC Interests | 3,088,750 | ||||
Apnimed, Inc. | Preferred Stocks | 1,499,989 | ||||
Apnimed, Inc. | Preferred Stocks | 799,994 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 4,549,525 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 3,677,777 | ||||
CCS Medical, Inc. | Senior Secured Loans | 3,000,000 | ||||
Terrestar Corp. | Senior Secured Loans | 810,953 | ||||
Terrestar Corp. | Senior Secured Loans | 191,988 | ||||
Terrestar Corp. | Senior Secured Loans | 34,300 | ||||
Terrestar Corp. | Senior Secured Loans | 32,002 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee (“ARRC”) has proposed the Secured Overnight Financing Rate (“SOFR”) as the recommended alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. We have material contracts that are indexed to USD-LIBOR and are monitoring this activity and evaluating the related risks.
In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR.
Change in interest rates | Increase (decrease) in interest income | (Increase) decrease in | Increase (decrease) | |||
Down 25 basis points | $ — | $— | $ — | |||
Up 50 basis points | 184,113 | — | 184,113 | |||
Up 100 basis points | 368,227 | — | 368,227 | |||
Up 200 basis points | 736,454 | — | 736,454 | |||
Up 300 basis points | 1,104,681 | — | 1,104,681 |
Change in interest rates | Increase (decrease) in interest income | (Increase) decrease in interest expense | Increase (decrease) in NII | |||||||||
Down 25 basis points | $ | — | $ | — | $ | — | ||||||
Up 50 basis points | 27,991 | — | 27,991 | |||||||||
Up 100 basis points | 55,982 | — | 55,982 | |||||||||
Up 200 basis points | 111,965 | — | 111,965 | |||||||||
Up 300 basis points | 167,947 | — | 167,947 |
December 31, 2020 | December 31, 2019 | |||||||
Assets |
| |||||||
Unaffiliated investments, at fair value (cost of $54,444,617 and $97,920,246, respectively) | $ | 54,031,676 | $ | 94,674,323 | ||||
Affiliated investments, at fair value (cost of $12,020,643 and $5,457,776, respectively)(1) | 10,636,939 | 5,753,369 | ||||||
Cash and cash equivalents | 729,467 | 7,764,892 | ||||||
Due from counterparty(2) | — | 21,400,000 | ||||||
Dividends and interest receivable | 285,212 | 1,042,105 | ||||||
Receivable from Adviser(3) | 101,542 | 50,130 | ||||||
Prepaid expenses | — | 12,208 | ||||||
|
|
|
| |||||
Total assets | 65,784,836 | 130,697,027 | ||||||
|
|
|
| |||||
Liabilities |
| |||||||
Credit facilities payable(4) | — | 33,714,864 | ||||||
Payable for investments purchased | — | 2,533,314 | ||||||
Payable on total return swap(2) | — | 11,458 | ||||||
Unrealized depreciation on total return swap(2) | — | 2,745,042 | ||||||
Common stock repurchased | — | 1,102,405 | ||||||
Payable to Adviser(3) | 423,537 | 570,453 | ||||||
Interest expense and commitment fees payable | — | 80,207 | ||||||
Accrued expenses and other liabilities | 228,062 | 378,205 | ||||||
Distributions payable | 942,765 | 625,526 | ||||||
|
|
|
| |||||
Total liabilities | 1,594,364 | 41,761,474 | ||||||
|
|
|
| |||||
Commitments and contingencies(5) |
| |||||||
Net assets |
| |||||||
Preferred stock, $0.001 par value (25,000,000 shares authorized, 0 shares issued and outstanding) | — | — | ||||||
Common stock, $0.001 par value (200,000,000 shares authorized, 10,475,168 and 10,425,431 shares issued and outstanding, respectively) | 10,475 | 10,425 | ||||||
Paid-in capital in excess of par | 92,354,786 | 93,412,260 | ||||||
Distributable earnings (accumulated loss) | (28,174,789 | ) | (4,487,132 | ) | ||||
|
|
|
| |||||
Total net assets | $ | 64,190,472 | $ | 88,935,553 | ||||
|
|
|
| |||||
Net asset value per share of common stock | $ | 6.13 | $ | 8.53 | ||||
|
|
|
|
December 31, 2023 | December 31, 2022 (Unconsolidated) | |||||||
Assets | ||||||||
Unaffiliated investments, at fair value (cost of $33,564,802 and $41,687,079, respectively) | $ | 38,716,441 | $ | 43,020,714 | ||||
Affiliated investments, at fair value (cost of $12,434,021 and $12,324,892, respectively) (1) | 10,696,845 | 10,273,001 | ||||||
Cash and cash equivalents | 1,401,744 | 1,629,846 | ||||||
Receivable for investments sold | 8,953 | — | ||||||
Dividends and interest receivable | 299,110 | 220,194 | ||||||
Receivable from Adviser (2) | 137,648 | 92,216 | ||||||
Prepaid expenses | 5,273 | 15,905 | ||||||
Deferred tax asset (3) | 13,020 | — | ||||||
Total assets | 51,279,034 | 55,251,876 | ||||||
Liabilities | ||||||||
Payable for investments purchased | 53,304 | — | ||||||
Payable to Adviser (2) | 284,896 | 314,993 | ||||||
Accrued expenses and other liabilities | 293,462 | 371,736 | ||||||
Distributions payable | 837,846 | 870,980 | ||||||
Total liabilities | 1,469,508 | 1,557,709 | ||||||
Commitments and contingencies (4) | ||||||||
Net assets | ||||||||
Preferred stock, $0.001 par value (25,000,000 shares authorized, 0 shares issued and outstanding) | — | — | ||||||
Common stock, $0.001 par value (200,000,000 shares authorized, 9,309,405 and 9,677,593 shares issued and outstanding, respectively) | 9,309 | 9,678 | ||||||
Paid-in capital in excess of par | 83,221,067 | 86,949,376 | ||||||
Distributable earnings (accumulated loss) | (33,420,850 | ) | (33,264,887 | ) | ||||
Total net assets | $ | 49,809,526 | $ | 53,694,167 | ||||
Net asset value per share of common stock | $ | 5.35 | $ | 5.55 | ||||
(1) | See Note |
(2) |
|
See Note 4 for a discussion of related party transactions and arrangements. |
See Note |
(4) | See Note 4 and Note |
For the Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Investment income: |
| |||||||||||
Interest | $ | 3,288,205 | $ | 5,853,384 | $ | 6,395,740 | ||||||
Interest paid in kind | 400,250 | 635,742 | 517,567 | |||||||||
Dividend income from unaffiliated investments | 50,318 | 1,068,673 | 547,408 | |||||||||
Dividend income from affiliated investments(1) | 965,874 | 239,799 | 97,209 | |||||||||
Other fee income | 108,535 | 49,895 | 10,483 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 4,813,182 | 7,847,493 | 7,568,407 | |||||||||
Expenses: |
| |||||||||||
Investment advisory fees(2) | 1,192,535 | 1,966,697 | 2,025,178 | |||||||||
Custodian and accounting service fees | 312,199 | 318,085 | 315,384 | |||||||||
Stock transfer fee | 248,563 | 329,695 | 405,227 | |||||||||
Administration fees(2) | 245,534 | 399,100 | 409,789 | |||||||||
Audit and tax fees | 223,648 | 249,463 | 217,586 | |||||||||
Interest expense and commitment fees(3) | 176,707 | 1,233,289 | 759,234 | |||||||||
Reports to stockholders | 82,492 | 68,888 | 59,427 | |||||||||
Legal fees | 81,141 | 53,438 | 201,688 | |||||||||
Directors’ fees(2) | 20,123 | 19,553 | 19,804 | |||||||||
Other expenses | 10,799 | 194,433 | 296,318 | |||||||||
Capital gains incentive fees(2) | — | — | (594,306 | ) | ||||||||
Amortized offering costs | — | 5,445 | 184,847 | |||||||||
|
|
|
|
|
| |||||||
Total expenses | 2,593,741 | 4,838,086 | 4,300,176 | |||||||||
Expenses (waived) or recouped by the Adviser(2) | (349,488 | ) | (147,269 | ) | (427,420 | ) | ||||||
|
|
|
|
|
| |||||||
Net expenses | 2,244,253 | 4,690,817 | 3,872,756 | |||||||||
|
|
|
|
|
| |||||||
Net investment income | 2,568,929 | 3,156,676 | 3,695,651 | |||||||||
Net realized and unrealized gains (losses) on investments: |
| |||||||||||
Net realized gain/(loss) on: |
| |||||||||||
Unaffiliated investments and securities sold short | (18,985,829 | ) | (1,140,590 | ) | 1,672,824 | |||||||
Affiliated investments(1) | (1,451,109 | ) | — | 2,422 | ||||||||
Total return swaps(4) | (6,929,996 | ) | 1,530,270 | 1,169,203 | ||||||||
Net change in unrealized appreciation (depreciation) on: |
| |||||||||||
Unaffiliated investments and securities sold short | 2,832,982 | 3,032,796 | (8,249,366 | ) | ||||||||
Affiliated investments(1) | (1,679,297 | ) | 2,809,293 | (2,516,339 | ) | |||||||
Total return swaps(4) | 2,745,042 | (197,550 | ) | (1,983,669 | ) | |||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gains (losses) | (23,468,207 | ) | 6,034,219 | (9,904,925 | ) | |||||||
|
|
|
|
|
| |||||||
Net increase/(decrease) in net assets resulting from operations | (20,899,278 | ) | 9,190,895 | (6,209,274 | ) | |||||||
|
|
|
|
|
| |||||||
Per share information—basic and diluted per common share |
| |||||||||||
Net investment income: | $ | 0.24 | $ | 0.30 | $ | 0.36 | ||||||
Earnings (loss) per share: | $ | (1.98 | ) | $ | 0.88 | $ | (0.60 | ) | ||||
Weighted average shares outstanding: | 10,525,271 | 10,441,061 | 10,358,148 |
For the Year Ended December 31, | ||||||||||||
2023 | 2022 (Unconsolidated) | 2021 (Unconsolidated) | ||||||||||
Investment income: | ||||||||||||
Interest | $ | 1,918,030 | $ | 2,178,971 | $ | 3,070,371 | ||||||
Interest paid-in-kind | 131,372 | 193,003 | 100,908 | |||||||||
Dividend income from unaffiliated investments | 444,982 | 645,582 | 17,848 | |||||||||
Dividend income from affiliated investments (1) | 837,839 | 675,057 | 904,081 | |||||||||
Other fee income | — | — | 4,651 | |||||||||
Total investment income | 3,332,223 | 3,692,613 | 4,097,859 | |||||||||
Expenses: | ||||||||||||
Investment advisory fees (2) | 942,612 | 1,096,487 | 1,220,044 | |||||||||
Custodian and accounting service fees | 311,664 | 311,050 | 307,438 | |||||||||
Administration fees (2) | 194,764 | 226,948 | 244,754 | |||||||||
Stock transfer fee | 167,547 | 209,866 | 208,251 | |||||||||
Audit and tax fees | 166,039 | 167,864 | 168,254 | |||||||||
Reports to stockholders | 134,324 | 82,721 | 75,060 | |||||||||
Other expenses | 122,992 | 113,825 | 155,670 | |||||||||
Legal fees | 43,949 | 53,658 | 72,441 | |||||||||
Directors’ fees (2) | 15,194 | 18,170 | 17,781 | |||||||||
Total expenses | 2,099,085 | 2,280,589 | 2,469,693 | |||||||||
Expenses (waived) or recouped by the Adviser (2) | (420,776 | ) | (377,594 | ) | (295,261 | ) | ||||||
Net expenses | 1,678,309 | 1,902,995 | 2,174,432 | |||||||||
Net investment income before income taxes | 1,653,914 | 1,789,618 | 1,923,427 | |||||||||
Income tax expense (3) | (13,020 | ) | — | — | ||||||||
Net investment income | 1,666,934 | 1,789,618 | 1,923,427 | |||||||||
Net realized and unrealized gains (losses) on investments: | ||||||||||||
Net realized gain (loss) on: | ||||||||||||
Unaffiliated investments | (4,414,415 | ) | 66,517 | (4,090,996 | ) | |||||||
Affiliated investments (1) | 68,709 | 262,564 | 611,450 | |||||||||
Net change in unrealized appreciation (depreciation) on: | ||||||||||||
Unaffiliated investments | 3,818,004 | (3,747,521 | ) | 5,494,097 | ||||||||
Affiliated investments (1) | 314,715 | (2,436,352 | ) | 1,768,165 | ||||||||
Net realized and unrealized gains (losses) | (212,987 | ) | (5,854,792 | ) | 3,782,716 | |||||||
Net increase (decrease) in net assets resulting from operations | 1,453,947 | (4,065,174 | ) | 5,706,143 | ||||||||
Per share information - basic and diluted per common share | ||||||||||||
Net investment income: | $ | 0.17 | $ | 0.18 | $ | 0.19 | ||||||
Earnings (loss) per share: | $ | 0.15 | $ | (0.41 | ) | $ | 0.56 | |||||
Weighted average shares outstanding: | 9,533,072 | 9,893,732 | 10,254,666 |
(1) | See Note |
(2) | See Note 4 for a discussion of related party transactions and arrangements. |
(3) | See Note |
|
Common Stock | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | |||||||||||||||||
Shares | Par Amount | |||||||||||||||||||
Balance at December 31, 2017 | 9,804,321 | $ | 9,804 | $ | 87,656,780 | $ | 7,193,373 | $ | 94,859,957 | |||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 3,695,651 | 3,695,651 | |||||||||||||||
Net realized gain (loss) on investments and securities sold short | — | — | — | 1,675,246 | 1,675,246 | |||||||||||||||
Net realized gain (loss) on total return swaps(1) | — | — | — | 1,169,203 | 1,169,203 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and securities sold short | — | — | — | (10,765,705 | ) | (10,765,705 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on total return swaps | — | — | — | (1,983,669 | ) | (1,983,669 | ) | |||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | 538,995 | 539 | 5,314,944 | — | 5,315,483 | |||||||||||||||
Repurchase of common stock | (477,904 | ) | (478 | ) | (4,467,083 | ) | — | (4,467,561 | ) | |||||||||||
Reinvestment of common stock | 456,915 | 457 | 4,412,679 | — | 4,413,136 | |||||||||||||||
Distributions to stockholders | — | — | — | (7,600,778 | ) | (7,600,778 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total increase (decrease) for the year ended December 31, 2018 | 518,006 | 518 | 5,260,540 | (13,810,052 | ) | (8,548,994 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | (314,911 | ) | 314,911 | — | ||||||||||||||
Balance at December 31, 2018 | 10,322,327 | $ | 10,322 | $ | 92,602,409 | $ | (6,301,768 | ) | $ | 86,310,963 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions to shareholders per share | — | $ | — | $ | — | $ | 0.73 | $ | 0.73 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
Common Stock | ||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | ||||||||||||||||
Balance at December 31, 2020 | 10,475,168 | $ | 10,475 | $ | 92,354,786 | $ | (28,174,789 | ) | $ | 64,190,472 | ||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 1,923,427 | 1,923,427 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | (3,479,546 | ) | (3,479,546 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | 7,262,262 | 7,262,262 | |||||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | |||||||||||||||
Repurchase of common stock | (727,993 | ) | (728 | ) | (4,643,041 | ) | — | (4,643,769 | ) | |||||||||||
Reinvestment of common stock | 209,053 | 209 | 1,319,032 | — | 1,319,241 | |||||||||||||||
Distributions to stockholders | — | — | — | (3,633,179 | ) | (3,633,179 | ) | |||||||||||||
Total increase (decrease) for the year ended December 31, 2021 | (518,940 | ) | (519 | ) | (3,324,009 | ) | 2,072,964 | (1,251,564 | ) | |||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | 2,104,942 | (2,104,942 | ) | — | ||||||||||||||
Balance at December 31, 2021 | 9,956,228 | $ | 9,956 | $ | 91,135,719 | $ | (28,206,767 | ) | $ | 62,938,908 | ||||||||||
Distributions to stockholders per share | — | $ | — | $ | — | $ | 0.36 | $ | 0.36 | |||||||||||
Common Stock | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | |||||||||||||||||
Shares | Par Amount | |||||||||||||||||||
Balance at December 31, 2018 | 10,322,327 | $ | 10,322 | $ | 92,602,409 | $ | (6,301,768 | ) | $ | 86,310,963 | ||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 3,156,676 | 3,156,676 | |||||||||||||||
Net realized gain (loss) on investments and securities sold short | — | — | — | (1,140,590 | ) | (1,140,590 | ) | |||||||||||||
Net realized gain (loss) on total return swaps(1) | — | — | — | 1,530,270 | 1,530,270 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and securities sold short | — | — | — | 5,842,089 | 5,842,089 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on total return swaps(1) | — | — | — | (197,550 | ) | (197,550 | ) | |||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | |||||||||||||||
Repurchase of common stock | (454,468 | ) | (455 | ) | (3,875,230 | ) | — | (3,875,685 | ) | |||||||||||
Reinvestment of common stock | 557,572 | 558 | 4,823,105 | — | 4,823,663 | |||||||||||||||
Distributions to stockholders | — | — | — | (7,514,283 | ) | (7,514,283 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total increase (decrease) for the year ended December 31, 2019 | 103,104 | 103 | 947,875 | 1,676,612 | 2,624,590 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | (138,024 | ) | 138,024 | — | ||||||||||||||
Balance at December 31, 2019 | 10,425,431 | $ | 10,425 | $ | 93,412,260 | $ | (4,487,132 | ) | $ | 88,935,553 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions to shareholders per share | — | $ | — | $ | — | $ | 0.72 | $ | 0.72 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
Common Stock | ||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | ||||||||||||||||
Balance at December 31, 2021 | 9,956,228 | $ | 9,956 | $ | 91,135,719 | $ | (28,206,767 | ) | $ | 62,938,908 | ||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 1,789,618 | 1,789,618 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | 329,081 | 329,081 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | (6,183,873 | ) | (6,183,873 | ) | |||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | |||||||||||||||
Repurchase of common stock | (478,708 | ) | (478 | ) | (2,862,458 | ) | — | (2,862,936 | ) | |||||||||||
Reinvestment of common stock | 200,073 | 200 | 1,209,000 | — | 1,209,200 | |||||||||||||||
Distributions to stockholders | — | — | — | (1,526,458 | ) | (1,526,458 | ) | |||||||||||||
Distributions to stockholders from return of capital | — | — | (1,999,373 | ) | — | (1,999,373 | ) | |||||||||||||
Total increase (decrease) for the year ended December 31, 2022 | (278,635 | ) | (278 | ) | (3,652,831 | ) | (5,591,632 | ) | (9,244,741 | ) | ||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | (533,512 | ) | 533,512 | — | ||||||||||||||
Balance at December 31, 2022 | 9,677,593 | $ | 9,678 | $ | 86,949,376 | $ | (33,264,887 | ) | $ | 53,694,167 | ||||||||||
Distributions to stockholders per share | — | $ | — | $ | — | $ | 0.36 | $ | 0.36 | |||||||||||
Common Stock | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | |||||||||||||||||
Shares | Par Amount | |||||||||||||||||||
Balance at December 31, 2019 | 10,425,431 | $ | 10,425 | $ | 93,412,260 | $ | (4,487,132 | ) | $ | 88,935,553 | ||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 2,568,929 | 2,568,929 | |||||||||||||||
Net realized gain (loss) on investments and securities sold short | — | — | — | (20,436,938 | ) | (20,436,938 | ) | |||||||||||||
Net realized gain (loss) on total return swaps(1) | — | — | — | (6,929,996 | ) | (6,929,996 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments and securities sold short | — | — | — | 1,153,685 | 1,153,685 | |||||||||||||||
Net change in unrealized appreciation (depreciation) on total return swaps(1) | — | — | — | 2,745,042 | 2,745,042 | |||||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | |||||||||||||||
Repurchase of common stock | (224,241 | ) | (224 | ) | (1,300,939 | ) | — | (1,301,163 | ) | |||||||||||
Reinvestment of common stock | 273,978 | 274 | 1,864,486 | — | 1,864,760 | |||||||||||||||
Distributions to stockholders | — | — | — | (4,409,400 | ) | (4,409,400 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total increase (decrease) for the year ended December 31, 2020 | 49,737 | 50 | 563,547 | (25,308,678 | ) | (24,745,081 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | (1,621,021 | ) | 1,621,021 | — | ||||||||||||||
Balance at December 31, 2020 | 10,475,168 | $ | 10,475 | $ | 92,354,786 | $ | (28,174,789 | ) | $ | 64,190,472 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Distributions to shareholders per share | — | $ | — | $ | — | $ | 0.42 | $ | 0.42 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
Common Stock | ||||||||||||||||||||
Shares | Par Amount | Paid in Capital in Excess of Par | Distributable Earnings | Total Net Assets | ||||||||||||||||
Balance at December 31, 2022 | 9,677,593 | $ | 9,678 | $ | 86,949,376 | $ | (33,264,887 | ) | $ | 53,694,167 | ||||||||||
Increase (decrease) in net assets resulting from operations | ||||||||||||||||||||
Net investment income | — | — | — | 1,666,934 | 1,666,934 | |||||||||||||||
Net realized gain (loss) on investments | — | — | — | (4,345,706 | ) | (4,345,706 | ) | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments | — | — | — | 4,132,719 | 4,132,719 | |||||||||||||||
Shareholder distributions: | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | |||||||||||||||
Repurchase of common stock | (578,793 | ) | (580 | ) | (3,078,452 | ) | — | (3,079,032 | ) | |||||||||||
Reinvestment of common stock | 210,605 | 211 | 1,127,514 | — | 1,127,725 | |||||||||||||||
Distributions to stockholders | — | — | — | (1,629,804 | ) | (1,629,804 | ) | |||||||||||||
Distributions to stockholders from return of capital | — | — | (1,757,477 | ) | — | (1,757,477 | ) | |||||||||||||
Total increase (decrease) for the year ended December 31, 2023 | (368,188 | ) | (369 | ) | (3,708,415 | ) | (175,857 | ) | (3,884,641 | ) | ||||||||||
Tax reclassification of stockholders’ equity in accordance with GAAP | — | — | (19,894 | ) | 19,894 | — | ||||||||||||||
Balance at December 31, 2023 | 9,309,405 | $ | 9,309 | $ | 83,221,067 | $ | (33,420,850 | ) | $ | 49,809,526 | ||||||||||
Distributions to stockholders per share | — | $ | — | $ | — | $ | 0.36 | $ | 0.36 | |||||||||||
Year Ended December 31, | ||||||||||||
2023 | 2022 (Unconsolidated) | 2021 (Unconsolidated) | ||||||||||
Cash flows provided by (used in) operating activities | ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,453,947 | $ | (4,065,174 | ) | $ | 5,706,143 | |||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||||||||
Purchases of investment securities | (4,569,498 | ) | (9,519,074 | ) | (8,119,981 | ) | ||||||
Payment-in-kind | (131,372 | ) | (193,003 | ) | (100,908 | ) | ||||||
Proceeds from sales and principal repayments of investment securities | 8,576,616 | 11,143,514 | 17,408,129 | |||||||||
Net realized gain (loss) on investments | 4,414,415 | (66,517 | ) | 4,090,996 | ||||||||
Net realized (gain) loss on Affiliated investments | (68,709 | ) | (262,564 | ) | (611,450 | ) | ||||||
Net change in unrealized (appreciation) depreciation on investments | (4,132,719 | ) | 6,183,873 | (7,262,262 | ) | |||||||
Amortization of premium/discount, net | (208,304 | ) | (343,633 | ) | (972,220 | ) | ||||||
Change in operating assets and liabilities: | ||||||||||||
(Increase) decrease in receivable for investments sold | (8,953 | ) | 990,537 | (990,537 | ) | |||||||
(Increase) decrease in dividends and interest receivable | (78,916 | ) | 220,210 | (155,192 | ) | |||||||
(Increase) decrease in receivable from Adviser | (45,432 | ) | 3,242 | 6,084 | ||||||||
(Increase) decrease in prepaid expenses | 10,632 | (2,683 | ) | (13,222 | ) | |||||||
Increase (decrease) in payable for investments purchased | 53,304 | (301,369 | ) | 301,369 | ||||||||
Increase (decrease) in payable to Adviser | (30,097 | ) | (63,594 | ) | (44,950 | ) | ||||||
(Increase) decrease in deferred tax asset | (13,020 | ) | — | — | ||||||||
Increase (decrease) in accrued expenses and other liabilities | (78,274 | ) | 299,558 | (155,884 | ) | |||||||
Net cash flows provided by (used in) operating activities | 5,143,620 | 4,023,323 | 9,086,115 | |||||||||
Cash flows provided by (used in) financing activities | ||||||||||||
Repurchase of common stock, net of payable | (3,079,032 | ) | (2,862,936 | ) | (4,643,769 | ) | ||||||
Distributions paid in cash | (2,292,690 | ) | (2,341,712 | ) | (2,360,642 | ) | ||||||
Net cash flows (used in) financing activities | (5,371,722 | ) | (5,204,648 | ) | (7,004,411 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | (228,102 | ) | (1,181,325 | ) | 2,081,704 | |||||||
Cash and cash equivalents | ||||||||||||
Beginning of the year | 1,629,846 | 2,811,171 | 729,467 | |||||||||
End of the year | $ | 1,401,744 | $ | 1,629,846 | $ | 2,811,171 | ||||||
Supplemental disclosure and non-cash financing activities | ||||||||||||
Paid-in-kind | $ | 131,372 | $ | 193,003 | $ | 100,908 | ||||||
Reinvestment of distributions paid | $ | 1,127,725 | $ | 1,209,200 | $ | 1,319,241 | ||||||
Local and excise taxes paid | $ | 58,473 | $ | 36,426 | $ | 87,200 |
Statements of Cash Flows
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cash flows provided by (used in) operating activities | ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (20,899,278 | ) | $ | 9,190,895 | $ | (6,209,274 | ) | ||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||||||||
Purchases of investment securities | (54,511,342 | ) | (42,308,348 | ) | (64,748,316 | ) | ||||||
Payment-in-kind investments | (400,250 | ) | (635,742 | ) | (517,567 | ) | ||||||
Proceeds from sales and principal repayments of investment securities | 72,368,347 | 44,370,241 | 54,849,304 | |||||||||
Net realized (gain) loss on investments | 20,436,938 | 1,140,590 | (1,675,246 | ) | ||||||||
Net change in unrealized (appreciation) depreciation on investments | (1,153,685 | ) | (5,842,089 | ) | 10,765,705 | |||||||
Net change in unrealized (appreciation) depreciation on total return swaps | (2,745,042 | ) | 197,550 | 1,983,669 | ||||||||
Amortization of premium/discount, net | (980,931 | ) | (922,503 | ) | (901,409 | ) | ||||||
Amortization of capitalized offering costs | — | 5,445 | 184,847 | |||||||||
Increase (decrease) in operating assets and liabilities: |
| |||||||||||
(Increase) decrease in receivable for investments sold | — | — | 2,768,395 | |||||||||
(Increase) decrease in dividends and interest receivable | 756,893 | 135,112 | 84,945 | |||||||||
(Increase) decrease in receivable from Adviser | (51,412 | ) | (50,130 | ) | — | |||||||
(Increase) decrease in prepaid expenses | 12,208 | (1,278 | ) | 79,618 | ||||||||
(Increase) decrease in due from counterparty | 21,400,000 | (820,000 | ) | (6,760,000 | ) | |||||||
(Increase) decrease in receivable due on total return swap | — | 366,952 | (183,437 | ) | ||||||||
Increase (decrease) in payable for investments purchased | (2,533,314 | ) | (39,962 | ) | 620,124 | |||||||
Increase (decrease) in payable to Adviser | (146,916 | ) | 278,549 | (4,188 | ) | |||||||
Increase (decrease) in incentive fees payable | — | — | (594,306 | ) | ||||||||
Increase (decrease) in interest expense and commitment fees payable | (80,207 | ) | 72,500 | (45,149 | ) | |||||||
Increase (decrease) in accrued expenses and other liabilities | (150,143 | ) | (67,099 | ) | (37,885 | ) | ||||||
Increase (decrease) in payable on total return swap | (11,458 | ) | 11,458 | — | ||||||||
|
|
|
|
|
| |||||||
Net cash flow provided by (used in) operating activities | 31,310,408 | 5,082,141 | (10,340,170 | ) | ||||||||
|
|
|
|
|
| |||||||
Cash flows provided by (used in) financing activities |
| |||||||||||
Proceeds from issuance of common stock, net of receivable for common stock sold | — | — | 5,321,118 | |||||||||
Repurchase of common stock, net of payable | (2,403,568 | ) | (2,773,280 | ) | (4,570,565 | ) | ||||||
Distributions paid in cash | (2,227,401 | ) | (2,787,073 | ) | (2,465,663 | ) | ||||||
Offering costs paid, net of due to Adviser | — | — | (61,462 | ) | ||||||||
(Decrease) in credit facilities payable | (40,971,777 | ) | (15,748,575 | ) | (37,045,614 | ) | ||||||
Increase in credit facilities payable | 7,256,913 | 16,879,474 | 45,229,579 | |||||||||
|
|
|
|
|
| |||||||
Net cash flow provided by (used in) financing activities | (38,345,833 | ) | (4,429,454 | ) | 6,407,393 | |||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in cash and cash equivalents | (7,035,425 | ) | 652,687 | (3,932,777 | ) | |||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents |
| |||||||||||
Beginning of the year | 7,764,892 | 7,112,205 | 11,044,982 | |||||||||
|
|
|
|
|
| |||||||
End of the year | $ | 729,467 | $ | 7,764,892 | $ | 7,112,205 | ||||||
|
|
|
|
|
| |||||||
Supplemental disclosure and non-cash financing activities |
| |||||||||||
Paid-in-kind interest income | $ | 400,250 | $ | 635,742 | $ | 517,567 | ||||||
Cash paid during the period for interest | $ | 256,914 | $ | 1,160,789 | $ | 804,383 | ||||||
Reinvestment of distributions paid | $ | 1,864,760 | $ | 4,823,663 | $ | 4,413,136 | ||||||
Local and excise taxes paid | $ | 47,000 | $ | 212,579 | $ | 168,836 |
See Notes to Financial Statements
NexPoint Capital, Inc.
Portfolio Company(1)(2) | Interest | Base Rate Floor | Maturity Date | Principal Amount | Amortized Cost(3) | Fair Value | ||||||||||||||||
Senior Secured Loans—56.1%(4) | ||||||||||||||||||||||
Energy—0.7% | ||||||||||||||||||||||
Fieldwood Energy, LLC (First Lien Term Loan)(5) | 4/11/2022 | $ | 1,800,549 | $ | 1,797,905 | $ | 422,004 | |||||||||||||||
Fieldwood Energy, LLC (Second Lien Term | 4/11/2023 | 567,797 | 555,600 | 823 | ||||||||||||||||||
|
| |||||||||||||||||||||
422,827 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Healthcare—51.5% | ||||||||||||||||||||||
Air Methods Corp. (First Lien Term Loan)(6) | L + 350 | 1.00 | % | 4/22/2024 | 1,962,492 | 1,541,038 | 1,900,674 | |||||||||||||||
Auris Luxembourg III S.a.r.l. (First Lien Term | L + 375 | 0.00 | % | 2/27/2026 | 2,540,954 | 2,530,710 | 2,461,549 | |||||||||||||||
BioClinica Holding I, LP (First Lien Term Loan)(7) | L + 425 | 1.00 | % | 10/20/2023 | 1,932,103 | 1,743,186 | 1,930,905 | |||||||||||||||
BW NHHC Holdco, Inc. (First Lien Term Loan)(6) | L + 500 | 0.00 | % | 5/15/2025 | 4,513,889 | 3,048,509 | 3,988,698 | |||||||||||||||
CNT Holdings I Corp. (Second Lien Term Loan)(6) | L + 675 | 0.75 | % | 10/16/2028 | 1,500,000 | 1,492,584 | 1,530,000 | |||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Delayed Draw Term Loan)(9) | 4% Fixed | 7/1/2026 | 333,333 | 761 | (5,833 | ) | ||||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Term Loan)(7) | L + 400 | 0.00 | % | 7/1/2026 | 1,645,937 | 1,649,733 | 1,617,133 | |||||||||||||||
Envision Healthcare Corp. (First Lien Term Loan)(7) | L + 375 | 0.00 | % | 10/10/2025 | 5,887,406 | 4,395,759 | 4,937,355 | |||||||||||||||
Global Medical Response, Inc. (First Lien Term | L + 425 | 1.00 | % | 3/14/2025 | 3,400,802 | 3,097,724 | 3,375,296 | |||||||||||||||
Patterson Medical Holdings, Inc. (First Lien Term Loan)(6) | L + 475 | 1.00 | % | 8/29/2022 | 2,421,410 | 2,165,282 | 2,345,741 | |||||||||||||||
RadNet, Inc. (First Lien Term Loan)(6)(8) | L + 375 | 1.00 | % | 6/30/2023 | 3,462,143 | 3,370,868 | 3,461,711 | |||||||||||||||
RxBenefits, Inc. (First Lien Term Loan)(6) | L + 525 | 0.75 | % | 12/17/2027 | 4,000,000 | 3,920,077 | 3,980,000 | |||||||||||||||
Sound Inpatient Physicians (Second Lien Term Loan)(7) | L + 675 | 1.00 | % | 6/26/2026 | 1,555,556 | 1,448,342 | 1,547,778 | |||||||||||||||
|
| |||||||||||||||||||||
33,071,007 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Manufacturing—2.6% | ||||||||||||||||||||||
Truck Hero, Inc. (Second Lien Term Loan)(7) | L + 825 | 1.00 | % | 4/17/2025 | 1,666,667 | 1,245,903 | 1,666,667 | |||||||||||||||
|
| |||||||||||||||||||||
Telecommunication Services—1.3% | ||||||||||||||||||||||
TerreStar Corp. (First Lien Term Loan E)(10)(11) | 11% PIK | 2/27/2022 | 653,280 | 653,280 | 653,280 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan F)(10)(11) | 11% PIK | 2/28/2022 | 154,659 | 154,659 | 154,659 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan G)(10)(11) | 11% PIK | 2/28/2022 | 27,631 | 27,631 | 27,631 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan H)(10)(11) | 11% PIK | 2/28/2022 | 26,000 | 26,000 | 26,000 | |||||||||||||||||
|
| |||||||||||||||||||||
861,570 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Total Senior Secured Loans | 36,022,071 | |||||||||||||||||||||
|
|
2023
Portfolio Company (1)(2) | Interest Rate | Base Rate Floor | Maturity Date | Principal Amount | Amortized Cost (3) | Fair Value | ||||||||||||||||||
Senior Secured Loans – 20.6% (4) | ||||||||||||||||||||||||
Bioplastics – 4.0% | ||||||||||||||||||||||||
PlantSwitch, Inc. Convertible Promissory Note (First Lien Term Loan) (5) (6) | 10% Fixed | 9/20/2026 | $ | 2,000,000 | $ | 2,000,000 | $ | 2,000,000 | ||||||||||||||||
Healthcare – 13.2% | ||||||||||||||||||||||||
Auris Luxembourg III S.a.r.l. (First Lien Term Loan) (7) (8) | SOFR + 375 | 5.87 | % | 2/27/2026 | 1,453,650 | 1,450,998 | 1,438,750 | |||||||||||||||||
Carestream Health, Inc. (First Lien Term Loan) (9) | SOFR + 750 | 5.36 | % | 9/30/2027 | 658,467 | 581,366 | 514,635 | |||||||||||||||||
CCS Medical, Inc (First Lien Term Loan) (5) (6) | 11% Fixed | 4/7/2026 | 3,000,000 | 2,945,554 | 3,000,000 | |||||||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Delayed Draw Term Loan) (9) | SOFR + 400 | 5.38 | % | 7/1/2026 | 333,333 | 333,679 | 261,000 | |||||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Term Loan) (9) | SOFR + 400 | 5.38 | % | 7/1/2026 | 1,597,232 | 1,599,049 | 1,250,633 | |||||||||||||||||
Sound Inpatient Physicians (Second Lien Term Loan) (9) | SOFR + 675 | 5.64 | % | 6/26/2026 | 1,555,556 | 1,500,056 | 127,556 | |||||||||||||||||
6,592,574 | ||||||||||||||||||||||||
Real Estate – 0.9% | ||||||||||||||||||||||||
NexPoint Capital REIT, LLC (First Lien Term Loan) (5) (6) (10) | PRIME + 100 | 8.00 | % | 3/25/2025 | 463,314 | 463,314 | 463,314 | |||||||||||||||||
Telecommunication Services – 2.4% | ||||||||||||||||||||||||
MidWave Wireless, Inc. (fka Terrestar Corp.) (First Lien Term Loan F) (5) (6) | 12% PIK | 12.00 | % | 2/28/2024 | 216,696 | 216,696 | 215,938 | |||||||||||||||||
MidWave Wireless, Inc. (fka Terrestar Corp.) (First Lien Term Loan E) (5) (6) | 12% PIK | 12.00 | % | 2/28/2024 | 915,322 | 915,322 | 912,118 | |||||||||||||||||
MidWave Wireless, Inc. (fka Terrestar Corp.) (First Lien Term Loan G) (5) (6) | 12% PIK | 12.00 | % | 2/28/2024 | 38,714 | 38,714 | 38,579 | |||||||||||||||||
MidWave Wireless, Inc. (fka Terrestar Corp.) (First Lien Term Loan H) (5) (6) | 12% PIK | 12.00 | % | 2/28/2024 | 36,121 | 36,121 | 35,994 | |||||||||||||||||
1,202,629 | ||||||||||||||||||||||||
Total Senior Secured Loans | 10,258,517 | |||||||||||||||||||||||
Asset-Backed Securities – 0.0% | ||||||||||||||||||||||||
Financials – 0.0% | ||||||||||||||||||||||||
Grayson Investor Corp. (7) (5) (6) (11) (12) (13) | 800 | 218,666 | 84 | |||||||||||||||||||||
Total Asset-Backed Securities | 84 | |||||||||||||||||||||||
Corporate Bonds – 1.5% | ||||||||||||||||||||||||
Consumer Discretionary – 1.0% | ||||||||||||||||||||||||
Vista Outdoor, Inc. 4.50%, 03/15/2029 | 500,000 | 482,645 | 488,665 | |||||||||||||||||||||
Media/Telecommunications – 0.5% | ||||||||||||||||||||||||
iHeartCommunications, Inc. (7) 6.38%, 05/01/2026 | 116,808 | 313,455 | 99,711 | |||||||||||||||||||||
iHeartCommunications, Inc. (7) 8.38%, 05/01/2027 | 214,073 | 584,792 | 139,147 | |||||||||||||||||||||
238,858 | ||||||||||||||||||||||||
Total Corporate Bonds | 727,523 | |||||||||||||||||||||||
Shares | ||||||||||||||||||||||||
Common Stocks – 32.0% | ||||||||||||||||||||||||
Chemicals – 0.1% | ||||||||||||||||||||||||
MPM Holdings, Inc. (5) (6) (14) | 8,500 | 17,000 | 42,500 | |||||||||||||||||||||
Energy – 4.5% | ||||||||||||||||||||||||
Quarternorth Energy, Inc. | 16,534 | 1,563,928 | 2,237,604 | |||||||||||||||||||||
Financials – 7.1% | ||||||||||||||||||||||||
American Banknote Corp. (5) (6) (14) | 750,000 | 2,062,500 | 3,536,250 | |||||||||||||||||||||
Real Estate – 9.2% | ||||||||||||||||||||||||
Nexpoint Real Estate Finance, Inc. (10) | 131,670 | 2,479,467 | 2,073,797 | |||||||||||||||||||||
IQHQ, Inc. (5) (6) | 100,000 | 1,500,000 | 2,533,000 | |||||||||||||||||||||
4,606,797 | ||||||||||||||||||||||||
Real Estate Investment Trust (REIT) – 1.6% | ||||||||||||||||||||||||
NexPoint Residential Trust, Inc. (7) (10) | 23,409 | 701,237 | 805,987 | |||||||||||||||||||||
Asset-Backed Securities—0.5% | ||||||||||||||||||||||
Financials—0.5% | ||||||||||||||||||||||
Grayson Investor Corp.(8)(10)(11)(12)(13)(14) | 11/1/2021 | $ | 800 | $ | 456,000 | $ | 286,000 | |||||||||||||||
PAMCO CLO 1997-1A B(8)(10)(11)(12)(14)(15) | 374,239 | 215,187 | 77,767 | |||||||||||||||||||
|
| |||||||||||||||||||||
363,767 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Total Asset-Backed Securities | 363,767 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Corporate Bonds—10.7% | ||||||||||||||||||||||
Healthcare—10.2% | ||||||||||||||||||||||
Hadrian Merger Sub, Inc.(12) | 8.500% | 5/1/2026 | 2,728,000 | 2,343,691 | 2,826,371 | |||||||||||||||||
Surgery Center Holdings(8)(12) | 6.750% | 7/1/2025 | 3,630,000 | 3,494,669 | 3,704,869 | |||||||||||||||||
|
| |||||||||||||||||||||
6,531,240 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Media/Telecommunications—0.5% | ||||||||||||||||||||||
iHeartCommunications, Inc.(8) | 8.375% | 5/1/2027 | 214,073 | 584,792 | 228,903 | |||||||||||||||||
iHeartCommunications, Inc.(8) | 6.375% | 5/1/2026 | 115,507 | 313,455 | 123,809 | |||||||||||||||||
|
| |||||||||||||||||||||
352,712 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Total Corporate Bonds | 6,883,952 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Shares | ||||||||||||||||||||||
Common Stocks—15.0% | ||||||||||||||||||||||
Chemicals—0.1% | ||||||||||||||||||||||
MPM Holdings, Inc.(16) | 8,500 | 17,000 | 42,500 | |||||||||||||||||||
|
| |||||||||||||||||||||
Financials—1.8% | ||||||||||||||||||||||
American Banknote | 750,000 | 2,062,500 | 1,125,000 | |||||||||||||||||||
|
| |||||||||||||||||||||
Healthcare—0.9% | ||||||||||||||||||||||
Amryt Pharma, PLC(8)(16)(17) | 40,000 | 500,000 | 566,400 | |||||||||||||||||||
SteadyMed Ltd.(8)(10)(11)(16) | 54,749 | 14,508 | 40,405 | |||||||||||||||||||
|
| |||||||||||||||||||||
606,805 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate—2.6% | ||||||||||||||||||||||
IQHQ, Inc.(10)(11) | 100,000 | 1,500,000 | 1,661,000 | |||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate Investment Trust (REIT)—1.5% | ||||||||||||||||||||||
NexPoint Residential Trust, Inc.(8)(18) | 22,640 | 708,025 | 957,898 | |||||||||||||||||||
|
| |||||||||||||||||||||
Retail—0.8% | ||||||||||||||||||||||
Tru Kids, Inc.(10)(11)(16) | 237 | 1,119,168 | 532,642 | |||||||||||||||||||
|
| |||||||||||||||||||||
Service—0.1% | ||||||||||||||||||||||
Western States Life Insurance(10)(11)(16) | 237 | 253,404 | 59,183 | |||||||||||||||||||
|
| |||||||||||||||||||||
Telecommunication Services—7.2% | ||||||||||||||||||||||
TerreStar Corp.(10)(11)(16) | 14,035 | 1,599,990 | 4,630,427 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total Common Stocks | 9,615,455 | |||||||||||||||||||||
|
| |||||||||||||||||||||
LLC Interests—10.2% | ||||||||||||||||||||||
Consumer Products—3.2% | ||||||||||||||||||||||
US GAMING LLC(10)(11)(16) | 2,000 | 2,000,000 | 2,070,427 | |||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate—6.6% | ||||||||||||||||||||||
SFR WLIF III, LLC(10)(11)(18) | 1,651,112 | 1,651,112 | 1,493,629 | |||||||||||||||||||
SFR WLIF II, LLC (10) (11) (18) | 3,348,888 | 3,348,888 | 2,742,974 | |||||||||||||||||||
|
| |||||||||||||||||||||
4,236,603 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate Investment Trust (REIT)—0.4% | ||||||||||||||||||||||
NexPoint Capital REIT, LLC(10)(11)(18)(19) | 100 | — | 228,215 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total LLC Interests | 6,535,245 | |||||||||||||||||||||
|
|
See Notes to Financial Statements.
NexPoint Capital, Inc.
Schedule of Investments (continued)
As of December 31, 2020
Partnership Units—8.1% |
| |||||||||||||||||||||
Real Estate—8.1% | ||||||||||||||||||||||
NexPoint Real Estate Finance Operating Partnership, LP(18) | 315,631 | $ | 6,312,618 | $ | 5,214,223 | |||||||||||||||||
|
| |||||||||||||||||||||
Total Partnership Units | 5,214,223 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Preferred | ||||||||||||||||||||||
Preferred Stocks—0.0% | ||||||||||||||||||||||
Real Estate Investment Trust (REIT)—0.0% | ||||||||||||||||||||||
RAIT Financial Trust(20) | 8.875% | 148,057 | 3,051,714 | — | ||||||||||||||||||
|
| |||||||||||||||||||||
Total Preferred Stocks | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Warrants—0.1% | ||||||||||||||||||||||
Healthcare—0.0% | ||||||||||||||||||||||
Galena Biopharma, | 1/12/2021 | 1,500,054 | — | 1 | ||||||||||||||||||
Gemphire Therapeutics, Inc.(10)(11)(16) | 3/15/2022 | 4,752 | — | — | ||||||||||||||||||
SCYNEXIS, Inc.(10)(11)(16) | 6/21/2021 | 19,500 | — | — | ||||||||||||||||||
|
| |||||||||||||||||||||
1 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Media/Telecommunications—0.1% | ||||||||||||||||||||||
iHeartMedia, Inc.(8)(16) | 5/1/2039 | 2,875 | 52,988 | 33,901 | ||||||||||||||||||
|
| |||||||||||||||||||||
Total Warrants | 33,902 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Total Investments—100.7% |
| $ | 66,465,260 | $ | 64,668,615 | |||||||||||||||||
|
|
|
| |||||||||||||||||||
Cash Equivalents—0.8%(21) | $ | 525,975 | ||||||||||||||||||||
Other Assets & Liabilities, net—(1.5%) | $ | (1,004,118 | ) | |||||||||||||||||||
|
| |||||||||||||||||||||
Net Assets-100.0% | $ | 64,190,472 | ||||||||||||||||||||
|
|
Telecommunication Services – 9.5% | ||||||||||||||||
MidWave Wireless, Inc. (fka Terrestar Corp.) (5) (6) (14) | 14,035 | 1,599,990 | 4,732,181 | |||||||||||||
Total Common Stocks | 15,961,319 | |||||||||||||||
LLC Interests – 20.8% | ||||||||||||||||
Consumer Products – 6.1% | ||||||||||||||||
US Gaming, LLC (5) (6) (14) | 1,700 | $ | 1,700,000 | $ | 3,016,752 | |||||||||||
Real Estate – 14.8% | ||||||||||||||||
NexPoint Capital REIT, LLC (5) (6) (10) | 737 | 8,418,892 | 7,014,774 | |||||||||||||
SFR WLIF III, LLC (5) (6) (10) | 371,112 | 371,111 | 338,973 | |||||||||||||
7,353,747 | ||||||||||||||||
Total LLC Interests | 10,370,499 | |||||||||||||||
Preferred Dividend Rate | ||||||||||||||||
Preferred Stocks – 23.7% | ||||||||||||||||
Financials – 2.4% | ||||||||||||||||
777 Partners, LLC | 10.00 | % | 750 | 750,000 | 686,250 | |||||||||||
United Fidelity Bank FSB | 7.00 | % | 1,000 | 1,000,000 | 500,000 | |||||||||||
1,186,250 | ||||||||||||||||
Healthcare – 21.4% | ||||||||||||||||
Apnimed, Inc. (5) (6) | 8.00 | % | 135,122 | 1,199,993 | 1,644,435 | |||||||||||
Apnimed, Inc. (Series C-2) (5) (6) | 8.00 | % | 72,065 | 799,994 | 928,197 | |||||||||||
Sapience Therapeutics, Inc. (Series B | ||||||||||||||||
Preferred Shares) (5) (6) (15) | 8.00 | % | 1,863,468 | 4,080,000 | 4,452,382 | |||||||||||
Sapience Therapeutics, Inc. (Series B-1 | ||||||||||||||||
Preferred Shares) (5) (6) (15) | 8.00 | % | 1,311,091 | 4,000,000 | 3,611,111 | |||||||||||
10,636,125 | ||||||||||||||||
Total Preferred Stocks | 11,822,375 | |||||||||||||||
Warrants – 0.5% | ||||||||||||||||
Energy – 0.5% | ||||||||||||||||
QuarterNorth Tranche 1 (14) | 5,738 | 16,122 | 133,888 | |||||||||||||
QuarterNorth Tranche 2 (14) | 11,051 | 5,175 | 132,612 | |||||||||||||
266,500 | ||||||||||||||||
Media/Telecommunications – 0.0% | ||||||||||||||||
iHeartMedia, Inc. (7) (14) | 2,875 | 52,987 | 6,469 | |||||||||||||
Total Warrants | 272,969 | |||||||||||||||
Total Investments- 99.2% | $ | 45,998,823 | $ | 49,413,286 | ||||||||||||
Cash Equivalents –2.3% (16) | $ | 1,160,707 | ||||||||||||||
Other Assets & Liabilities, net- (1.5%) | $ | (764,467 | ) | |||||||||||||
Net Assets- 100.0% | $ | 49,809,526 | ||||||||||||||
(1) | Unless otherwise noted, the Company did not “control” and was not an “affiliated person” of any of its portfolio companies, each as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). In general, under the 1940 Act, the Company would be presumed to “control” a portfolio company if it owned 25% or more of its voting securities or had the power to exercise control over the management or policies of such portfolio company, and would be an “affiliated person” of a portfolio company if it owned 5% or more of its voting securities. Additionally, companies under common control (e.g., companies with a common owner of greater than 25% of their respective voting securities) are affiliates under the 1940 Act. |
(2) | All investments are denominated in United States Dollars. |
(3) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
(4) | Senior secured loans in which the Company invests generally pay interest at rates which are periodically determined by reference to a base lending rate plus a spread (unless otherwise identified, all senior secured loans carry a variable rate of interest). These base lending rates are generally (i) the Prime Rate offered by one or more major United States banks, (ii) the lending rate offered by |
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Represents fair value as determined by the |
Classified as Level 3 within the three-tier fair value hierarchy. Please see Note 2 for an explanation of this hierarchy, as well as a list of unobservable inputs used in the valuation of these instruments. |
(7) | The investment is not a qualifying asset under Section 55 of the 1940 Act. A business development company, such as the Company (“BDC”), may not acquire any asset other than a qualifying asset, unless at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. Non-qualifying assets represented 4.8% of the Company’s total assets as of December 31, 2023. |
(8) | The interest rate on these investments is subject to a base rate of 6-Month SOFR which at December 31, 2023 was 5.16%. The SOFR rate used to calculate interest is the higher of the prevailing 6 month SOFR rate in effect on the date of the semiannual reset, or the SOFR base rate floor shown. |
(9) | The interest rate on these investments is subject to a base rate of 3-Month SOFR, which at December 31, 2023 was 5.33% |
(10) | Represents an affiliated issuer. Assets with a total aggregate market value of $10,696,845, or 21.5% of net assets, were affiliated with the Company as of December 31, 2023. See Note 9. |
(11) | Securities exempt from registration under Rule 144A of the |
The investment is considered to be the equity tranche of the issuer. |
Securities of collateralized loan obligations where an affiliate of the Adviser serves as collateral manager. |
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State Street U.S. Government Money Market Fund. |
PIK | Payment-in-Kind |
Portfolio Company (1)(2) | Interest Rate | Base Rate Floor | Maturity Date | Principal Amount | Amortized Cost (3) | Fair Value | ||||||||||||||||
Senior Secured Loans – 26.5% (4) | ||||||||||||||||||||||
Healthcare – 24.5% | ||||||||||||||||||||||
Auris Luxembourg III S.a.r.l. (First Lien Term Loan) (5) (6) | L + 375 | 4.93 | % | 2/27/2026 | $ | 1,468,909 | $ | 1,465,131 | $ | 1,318,346 | ||||||||||||
Carestream Health, Inc. (First Lien Term Loan) (7) | L + 675 | 12.18 | % | 9/30/2027 | 668,605 | 576,001 | 511,483 | |||||||||||||||
CCS Medical, Inc (First Lien Term Loan) (7) (8) (9) | 14% Fixed | 4/7/2026 | 3,000,000 | 2,926,520 | 3,000,000 | |||||||||||||||||
CNT Holdings I Corp (Second Lien Term Loan) (7) | L + 675 | 3.74 | % | 11/6/2028 | 1,500,000 | 1,494,084 | 1,422,503 | |||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Delayed Draw Term Loan) | 4% Fixed | 7/1/2026 | 333,333 | 333,817 | 282,500 | |||||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Term Loan) (10) | L + 400 | 4.41 | % | 7/1/2026 | 1,613,305 | 1,615,775 | 1,367,276 | |||||||||||||||
Envision Healthcare Corp. (First Lien Term Loan) (10) | L + 375 | 4.07 | % | 10/10/2025 | 4,518,572 | 3,709,077 | 1,354,645 | |||||||||||||||
RxBenefits, Inc. (First Lien Term Loan) (6) | L + 450 | 2.11 | % | 12/20/2027 | 1,993,177 | 1,963,107 | 1,888,535 | |||||||||||||||
Sound Inpatient Physicians (Second Lien Term Loan) (10) | L + 675 | 4.07 | % | 6/26/2026 | 1,555,556 | 1,481,972 | 1,229,869 | |||||||||||||||
Wellpath Holdings, Inc. (First Lien Term Loan) (7) | L + 550 | 4.41 | % | 10/1/2025 | 984,615 | 980,197 | 783,793 | |||||||||||||||
13,158,950 | ||||||||||||||||||||||
Telecommunication Services – 2.0% | ||||||||||||||||||||||
TerreStar Corp. (First Lien Term Loan H) (8) (9) | 11%PIK | 2/28/2024 | 32,189 | 32,189 | 32,002 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan F) (8) (9) | 11%PIK | 2/28/2024 | 193,108 | 193,108 | 191,988 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan E) (8) (9) | 11%PIK | 2/28/2024 | 815,685 | 815,684 | 810,953 | |||||||||||||||||
TerreStar Corp. (First Lien Term Loan G) (8) (9) | 11%PIK | 2/28/2024 | 34,500 | 34,500 | 34,300 | |||||||||||||||||
1,069,243 | ||||||||||||||||||||||
Total Senior Secured Loans | 14,228,193 | |||||||||||||||||||||
Asset-Backed Securities – 0.0% | ||||||||||||||||||||||
Financials – 0.0% | ||||||||||||||||||||||
Grayson Investor Corp. (5) (8) (9) (11) (12) (13) | 800 | 218,666 | 7,023 | |||||||||||||||||||
PAMCO CLO 1997-1A B(5) (8) (9) (11) (13) (14) | 295,435 | 169,875 | 13 | |||||||||||||||||||
7,036 | ||||||||||||||||||||||
Total Asset-Backed Securities | 7,036 | |||||||||||||||||||||
Corporate Bonds – 5.0% | ||||||||||||||||||||||
Healthcare – 4.5% | ||||||||||||||||||||||
Hadrian Merger Sub, Inc. (11) | 8.500% | 5/1/2026 | 2,728,000 | 2,460,536 | 2,414,839 | |||||||||||||||||
Media/Telecommunications – 0.5% | ||||||||||||||||||||||
iHeartCommunications, Inc. (5) | 6.375% | 5/1/2026 | 116,808 | 313,455 | 107,648 | |||||||||||||||||
iHeartCommunications, Inc. (5) | 8.375% | 5/1/2027 | 214,073 | 584,792 | 182,430 | |||||||||||||||||
290,078 | ||||||||||||||||||||||
Total Corporate Bonds | 2,704,917 | |||||||||||||||||||||
Shares | ||||||||||||||||||||||
Common Stocks – 36.3% | ||||||||||||||||||||||
Chemicals – 0.1% | ||||||||||||||||||||||
MPM Holdings, Inc. (15) | 8,500 | 17,000 | 42,500 | |||||||||||||||||||
Energy – 3.0% | ||||||||||||||||||||||
Quarternorth Energy, Inc. | 11,534 | 981,428 | 1,591,692 | |||||||||||||||||||
Financials – 3.2% | ||||||||||||||||||||||
American Banknote Corp. (8) (9) (15) | 750,000 | 2,062,500 | 1,732,500 | |||||||||||||||||||
Real Estate – 18.6% | ||||||||||||||||||||||
Nexpoint Real Estate Finance, Inc. (16) | 481,670 | 9,960,591 | 7,653,730 | |||||||||||||||||||
IQHQ, Inc. (8) (9) | 100,000 | 1,500,000 | 2,359,000 | |||||||||||||||||||
10,012,730 | ||||||||||||||||||||||
Real Estate Investment Trust (REIT) – 1.9% | ||||||||||||||||||||||
NexPoint Residential Trust, Inc. (5) (16) | 23,409 | 698,189 | 1,018,779 | |||||||||||||||||||
(continued)
Portfolio Company(1)(2) | Interest | Base Rate Floor | Maturity Date | Principal Amount | Amortized Cost(3) | Fair Value | ||||||||||||||||
Senior Secured Loans—9.0%(4) | ||||||||||||||||||||||
Energy—2.1% | ||||||||||||||||||||||
Fieldwood Energy, LLC (First Lien Term Loan)(5) | L + 525 | 1.00 | % | 4/11/2022 | $ | 1,800,549 | $ | 1,797,034 | $ | 1,514,208 | ||||||||||||
Fieldwood Energy, LLC (Second Lien Term Loan)(5) | L + 725 | 1.00 | % | 4/11/2023 | 567,797 | 553,265 | 326,838 | |||||||||||||||
|
| |||||||||||||||||||||
1,841,046 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Healthcare—5.7% | ||||||||||||||||||||||
Auris Luxembourg III S.a.r.l. (First Lien Term Loan)(6)(7) | L + 375 | 0.00 | % | 2/27/2026 | 2,566,812 | 2,554,699 | 2,583,933 | |||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Delayed Draw Term Loan)(5)(8) | L + 400 | 0.00 | % | 7/1/2026 | 333,333 | 833 | 833 | |||||||||||||||
Covenant Surgical Partners, Inc. (First Lien Term Loan)(5)(8) | L + 400 | 0.00 | % | 7/1/2026 | 1,666,667 | 1,670,833 | 1,670,833 | |||||||||||||||
Envision Healthcare Corp. (First Lien Term Loan)(6)(8) | L + 375 | 0.00 | % | 10/10/2025 | 997,481 | 862,821 | 855,754 | |||||||||||||||
|
| |||||||||||||||||||||
5,111,353 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Media/Telecommunications—0.4% | ||||||||||||||||||||||
iHeartCommunications, Inc. (First Lien Term Loan)(5) | L + 400 | 0.00 | % | 5/1/2026 | 333,537 | 863,774 | 336,802 | |||||||||||||||
|
| |||||||||||||||||||||
Telecommunication Services—0.8% | ||||||||||||||||||||||
TerreStar Corp. (First Lien Term | 11% PIK | 2/27/2020 | 584,639 | 584,639 | 583,470 | |||||||||||||||||
TerreStar Corp. (First Lien Term | 11% PIK | 2/28/2022 | 138,409 | 138,409 | 138,132 | |||||||||||||||||
|
| |||||||||||||||||||||
721,602 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Utility—0.0% | ||||||||||||||||||||||
Texas Competitive Electric Holdings Company, LLC (TXU) (Escrow Loan)(11)(12) | 3,500,000 | 79,372 | 1,925 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total Senior Secured Loans | 8,012,728 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Unsecured Loans—4.2% | ||||||||||||||||||||||
Materials—4.2% | ||||||||||||||||||||||
OmniMax International, Inc.(5)(9)(10) | 14% PIK, 2% Cash | 2/6/2021 | 4,404,735 | 4,195,580 | 3,713,191 | |||||||||||||||||
|
| |||||||||||||||||||||
Total Unsecured Loans | 3,713,191 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Asset-Backed Securities—0.8% | ||||||||||||||||||||||
Financials—0.8% | ||||||||||||||||||||||
Grayson Investor Corp.(7)(13)(14)(15) | 11/1/2021 | 800 | 456,000 | 333,764 | ||||||||||||||||||
Highland Park CDO I Ltd. 2006 1A A2(5)(7)(13)(15) | L + 40 | 11/25/2051 | 270,178 | 225,349 | 270,127 | |||||||||||||||||
PAMCO CLO 1997-1A B(7)(9)(10)(13)(15)(16) | 374,239 | 215,187 | 139,629 | |||||||||||||||||||
|
| |||||||||||||||||||||
743,520 | ||||||||||||||||||||||
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| |||||||||||||||||||||
Total Asset-Backed Securities | 743,520 | |||||||||||||||||||||
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| |||||||||||||||||||||
Mortgage-Backed Securities—4.5% | ||||||||||||||||||||||
Financials—4.5% | ||||||||||||||||||||||
FREMF 2019-KF60 Mortgage Trust(6)(13) | 2/25/2026 | 4,002,449 | 3,996,530 | 3,994,444 | ||||||||||||||||||
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| |||||||||||||||||||||
Total Mortgage-Backed Securities | 3,994,444 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Shares | ||||||||||||||||||||||
Closed-End Mutual Funds—2.4% | ||||||||||||||||||||||
Financials—2.4% | ||||||||||||||||||||||
NexPoint Strategic Opportunities Fund(7)(17)(18) | 120,633 | 2,419,467 | 2,136,410 | |||||||||||||||||||
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Total Closed-End Mutual Funds | 2,136,410 | |||||||||||||||||||||
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|
See Notes to Financial Statements.
Service – 0.0% | ||||||||||||||||||||
Wayne Services Legacy Inc. (8) (9) (15) | 237 | $ | 253,404 | $ | 2,269 | |||||||||||||||
Telecommunication Services – 9.5% | ||||||||||||||||||||
TerreStar Corp. (8) (9) (15) | 14,035 | 1,599,990 | 5,114,214 | |||||||||||||||||
Total Common Stocks | 19,514,684 | |||||||||||||||||||
LLC Interests – 8.7% | ||||||||||||||||||||
Consumer Products – 5.7% | ||||||||||||||||||||
US Gaming, LLC (8) (9) (15) | 2,000 | 2,000,000 | 3,088,750 | |||||||||||||||||
Real Estate – 3.0% | ||||||||||||||||||||
SFR WLIF III, LLC (8) (9) (16) | 451,112 | 451,112 | 424,468 | |||||||||||||||||
NexPoint Capital REIT, LLC (8) (9) (16) | 100 | 1,215,000 | 1,176,024 | |||||||||||||||||
1,600,492 | ||||||||||||||||||||
Total LLC Interests | 4,689,242 | |||||||||||||||||||
Preferred Dividend Rate | ||||||||||||||||||||
Preferred Stocks – 22.3% | ||||||||||||||||||||
Financials – 2.7% | ||||||||||||||||||||
777 Partners, LLC | 10.000 | % | 750 | 750,000 | 740,625 | |||||||||||||||
United Fidelity Bank FSB | 7.000 | % | 1,000 | 1,000,000 | 700,000 | |||||||||||||||
1,440,625 | ||||||||||||||||||||
Healthcare – 19.6% | ||||||||||||||||||||
Apnimed, Inc. (8) (9) | 8.000 | % | 135,122 | 1,199,993 | 1,499,989 | |||||||||||||||
Apnimed, Inc. (Series C-2) (8) (9) | 8.000 | % | 72,065 | 799,994 | 799,994 | |||||||||||||||
Sapience Therapeutics, Inc. (Series B Preferred Shares) (8) (9) | 8.000 | % | 1,619,048 | 4,080,000 | 4,549,525 | |||||||||||||||
Sapience Therapeutics, Inc. (Series B-1 Preferred Shares) (8) (9) | 1,111,111 | 4,000,000 | 3,677,777 | |||||||||||||||||
10,527,285 | ||||||||||||||||||||
Total Preferred Stocks | 11,967,910 | |||||||||||||||||||
Warrants – 0.4% | ||||||||||||||||||||
Energy – 0.3% | ||||||||||||||||||||
QuarterNorth Tranche 1 (15) | 8/27/2029 | 5,738 | 16,122 | 64,553 | ||||||||||||||||
QuarterNorth Tranche 2 (15) | 8/27/2029 | 11,051 | 5,175 | 96,696 | ||||||||||||||||
161,249 | ||||||||||||||||||||
Media/Telecommunications – 0.1% | ||||||||||||||||||||
iHeartMedia, Inc. (5) (15) | 5/1/2039 | 2,875 | 52,987 | 20,484 | ||||||||||||||||
Total Warrants | 181,733 | |||||||||||||||||||
Total Investments- 99.2% | $ | 54,011,971 | $ | 53,293,715 | ||||||||||||||||
Cash Equivalents –2.6% (17) | $ | 1,420,428 | ||||||||||||||||||
Other Assets & Liabilities, net- (1.8%) | $ | (1,019,976 | ) | |||||||||||||||||
Net Assets- 100.0% | $ | 53,694,167 | ||||||||||||||||||
NexPoint Capital, Inc.
Schedule of Investments (continued)
As of December 31, 2019
Portfolio Company(1)(2) | Interest | Base Rate Floor | Maturity Date | Principal Amount | Amortized Cost(3) | Fair Value | ||||||||||||||||
Corporate Bonds—45.9% | ||||||||||||||||||||||
Financials—1.7% | ||||||||||||||||||||||
Freedom Mortgage Corp.(13)(18) | 8.250% | 4/15/2025 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,474,200 | ||||||||||||||
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Healthcare—43.8% | ||||||||||||||||||||||
ASP AMC Merger Sub, Inc.(13)(18) | 8.000% | 5/15/2025 | 7,325,000 | 6,948,779 | 4,892,478 | |||||||||||||||||
Endo Finance LLC / Endo Finco | 6.000% | 7/15/2023 | 4,500,000 | 3,877,424 | 3,262,455 | |||||||||||||||||
Ortho-Clinical Diagnostics(13)(18) | 6.625% | 5/15/2022 | 11,217,000 | 10,862,655 | 11,174,863 | |||||||||||||||||
Surgery Center Holdings(7)(13)(18) | 6.750% | 7/1/2025 | 11,858,000 | 11,246,267 | 11,892,566 | |||||||||||||||||
Valeant Pharmaceuticals International, Inc.(7)(13)(18) | 6.125% | 4/15/2025 | 7,500,000 | 6,942,340 | 7,764,863 | |||||||||||||||||
|
| |||||||||||||||||||||
38,987,225 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Media/Telecommunications—0.4% | ||||||||||||||||||||||
iHeartCommunications, Inc.(18) | 6.375% | 5/1/2026 | 114,206 | 313,455 | 124,127 | |||||||||||||||||
iHeartCommunications, Inc.(18) | 8.375% | 5/1/2027 | 214,073 | 584,792 | 236,947 | |||||||||||||||||
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361,074 | ||||||||||||||||||||||
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Total Corporate Bonds | 40,822,499 | |||||||||||||||||||||
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Shares | ||||||||||||||||||||||
Common Stocks—25.9% | ||||||||||||||||||||||
Chemicals—0.0% | ||||||||||||||||||||||
MPM Holdings, Inc.(12) | 8,500 | 17,000 | 42,500 | |||||||||||||||||||
|
| |||||||||||||||||||||
Energy—5.5% | ||||||||||||||||||||||
Energy Transfer Equity L.P.(7)(18) | 75,000 | 1,438,740 | 962,250 | |||||||||||||||||||
Enterprise Products Partners L.P.(7)(18) | 140,000 | 3,424,740 | 3,942,400 | |||||||||||||||||||
|
| |||||||||||||||||||||
4,904,650 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Financials—2.8% | ||||||||||||||||||||||
American Banknote Corp.(9)(10)(12) | 750,000 | 2,062,500 | 2,467,500 | |||||||||||||||||||
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Healthcare—0.3% | ||||||||||||||||||||||
Quorum Health Corp.(12) | 224,600 | 1,284,134 | 214,740 | |||||||||||||||||||
SteadyMed Ltd.(7)(9)(10)(12) | 54,749 | 14,508 | 40,405 | |||||||||||||||||||
|
| |||||||||||||||||||||
255,145 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Materials—0.0% | ||||||||||||||||||||||
OmniMax International, Inc.(9)(10)(12) | 6,698 | 663,116 | 20,898 | |||||||||||||||||||
|
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Media/Telecommunications—1.9% | ||||||||||||||||||||||
Clear Channel Outdoor Holding, | 124,986 | 631,179 | 357,460 | |||||||||||||||||||
iHeartMedia, Inc.(12)(18) | 80,350 | 2,182,708 | 1,357,915 | |||||||||||||||||||
|
| |||||||||||||||||||||
1,715,375 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate Investment Trusts (REITs)—6.9% | ||||||||||||||||||||||
NexPoint Residential Trust, Inc.(7)(17)(18) | 26,466 | 848,748 | 1,190,970 | |||||||||||||||||||
City Office REIT, Inc.(7)(18) | 108,000 | 1,480,753 | 1,460,160 | |||||||||||||||||||
Independence Realty Trust, Inc.(7)(18) | 246,727 | 2,146,330 | 3,473,916 | |||||||||||||||||||
|
| |||||||||||||||||||||
6,125,046 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Retail—1.3% | ||||||||||||||||||||||
Tru Kids, Inc.(12) | 237 | 1,139,661 | 1,124,467 | |||||||||||||||||||
|
| |||||||||||||||||||||
Service—0.1% | ||||||||||||||||||||||
Western States Life Insurance(12) | 237 | 255,681 | 59,183 | |||||||||||||||||||
|
| |||||||||||||||||||||
Telecommunication Services—4.4% | ||||||||||||||||||||||
TerreStar Corp.(9)(10)(12) | 14,035 | 1,599,990 | 3,890,081 | |||||||||||||||||||
|
| |||||||||||||||||||||
Utility—2.7% | ||||||||||||||||||||||
Vistra Energy Corp.(18) | 105,000 | 1,622,256 | 2,413,950 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total Common Stocks | 23,018,795 | |||||||||||||||||||||
|
|
See Notes to Financial Statements.
NexPoint Capital, Inc.
Schedule of Investments (continued)
As of December 31, 2019
LLC Interests—10.5% | ||||||||||||||||||||||
Consumer Products—2.3% | ||||||||||||||||||||||
US GAMING LLC(9)(10)(12) | 2,000 | $ | 2,000,000 | $ | 2,000,000 | |||||||||||||||||
|
| |||||||||||||||||||||
Real Estate—5.5% | ||||||||||||||||||||||
SFR WLIF III, LLC(9)(10) | 1,651,112 | 1,651,112 | 1,615,315 | |||||||||||||||||||
SFR WLIF II, LLC(9)(10) | 3,348,888 | 3,348,888 | 3,317,342 | |||||||||||||||||||
|
| |||||||||||||||||||||
4,932,657 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate Investment Trust (REIT)—2.7% | ||||||||||||||||||||||
NexPoint Capital REIT, LLC(9)(10)(17)(22) | 100 | 2,189,561 | 2,425,989 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total LLC Interests | 9,358,646 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Preferred | ||||||||||||||||||||||
Preferred Stocks—9.5% | ||||||||||||||||||||||
Financials—2.3% | ||||||||||||||||||||||
Tectonic Financial, Inc. | 9.000% | 200,000 | 2,000,000 | 2,084,000 | ||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate—1.7% | ||||||||||||||||||||||
Creative Science Properties, Inc. | 100,000 | 1,500,000 | 1,500,000 | |||||||||||||||||||
|
| |||||||||||||||||||||
Real Estate Investment Trusts (REITs)—5.5% | ||||||||||||||||||||||
Braemar Hotels & Resorts, Inc.(7)(18) | 5.500% | 258,065 | 3,733,840 | 4,903,235 | ||||||||||||||||||
RAIT Financial Trust(18)(19) | 8.875% | 148,057 | 3,051,715 | 4,235 | ||||||||||||||||||
|
| |||||||||||||||||||||
4,907,470 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Total Preferred Stocks | 8,491,470 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Rights—0.1% | ||||||||||||||||||||||
Utility—0.1% | ||||||||||||||||||||||
Texas Competitive Electric Holdings Company, LLC (TXU)(12) | 58,356 | 148,370 | 61,391 | |||||||||||||||||||
|
| |||||||||||||||||||||
Total Rights | 61,391 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Warrants—0.1% | ||||||||||||||||||||||
Healthcare—0.0% | ||||||||||||||||||||||
Galena Biopharma, Inc.(10)(12) | 1/12/2021 | 1,500,054 | — | — | ||||||||||||||||||
Gemphire Therapeutics, Inc.(10)(12) | 3/15/2022 | 4,752 | — | 1,340 | ||||||||||||||||||
SCYNEXIS, Inc.(10)(12) | 6/21/2021 | 195,000 | — | 28,497 | ||||||||||||||||||
|
| |||||||||||||||||||||
29,837 | ||||||||||||||||||||||
|
| |||||||||||||||||||||
Materials—0.0% | ||||||||||||||||||||||
OmniMax International, Inc.(9)(10)(12) | 8/6/2025 | 207 | — | 647 | ||||||||||||||||||
|
| |||||||||||||||||||||
Media/Telecommunications—0.1% | ||||||||||||||||||||||
iHeartMedia, Inc.(12) | 5/1/2039 | 2,875 | 52,988 | 44,114 | ||||||||||||||||||
|
| |||||||||||||||||||||
Total Warrants | 74,598 | |||||||||||||||||||||
|
| |||||||||||||||||||||
Total Investments—112.9% | $ | 103,378,022 | $ | 100,427,692 | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Cash Equivalents—8.7%(20) | $ | 7,764,892 | ||||||||||||||||||||
Other Assets & Liabilities, net—(21.6%) | $ | (19,257,031 | ) | |||||||||||||||||||
|
| |||||||||||||||||||||
Net Assets—100.0% | $ | 88,935,553 | ||||||||||||||||||||
|
| |||||||||||||||||||||
Notional Amount(21) | Unrealized Depreciation | |||||||||||||||||||||
Total Return Swap—(3.1%) | ||||||||||||||||||||||
BNP Paribas TRS Facility (Note 7) | 50,904,830 | (2,745,042 | ) |
See Notes to Financial Statements.
NexPoint Capital, Inc.
Schedule of Investments (continued)
As of December 31, 2019
(1) | Unless otherwise noted, the Company did not “control” and was not an “affiliated person” of any of its portfolio companies, each as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). In general, under the 1940 Act, the Company would be presumed to “control” a portfolio company if it owned 25% or more of its voting securities or had the power to exercise control over the management or policies of such portfolio company, and would be an “affiliated person” of a portfolio company if it owned 5% or more of its voting securities. Additionally, companies under common control (e.g., companies with a common owner of greater than 25% of their respective voting securities) are affiliates under the 1940 Act. |
(2) | All investments are denominated in United States Dollars. |
(3) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
(4) | Senior secured loans in which the Company invests generally pay interest at rates which are periodically determined by reference to a base lending rate plus a spread (unless otherwise identified, all senior secured loans carry a variable rate of interest). These base lending rates are generally (i) the Prime Rate offered by one or more major United States banks, (ii) the lending rate offered by one or more European banks such as the London Interbank Offered Rate (“LIBOR”) or (iii) the coupon rate. Rate shown represents the actual rate at December 31, |
(5) | The investment is not a qualifying asset under Section 55 of the 1940 Act. A business development company, such as the Company (“BDC”), may not acquire any asset other than a qualifying asset, unless at the time the acquisition is made, qualifying assets represent at least 70% of the business development company’s total assets. Non-qualifying assets represented 4.8% of the Company’s total assets as of December 31, 2022. |
(6) | The interest rate on these investments is subject to a base rate of 6-Month LIBOR, which at December 31, |
(7) | The interest rate on these investments is subject to a base rate of 3-Month LIBOR, which at December 31, 2022 was 4.77%. The LIBOR rate used to calculate interest is the higher of the prevailing 3 month LIBOR rate in effect on the date of the quarterly reset, or the LIBOR base rate floor shown. |
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Represents fair value as determined by the 2a-5 of the 1940 Act. The Adviser considers fair valued securities to be securities for which market quotations are not readily available and these securities may be valued using a combination of observable and unobservable inputs. Securities with a total aggregate value of |
|
The interest rate on these investments is subject to a base rate of 1-Month LIBOR, which at December 31, 2022 was 4.39%. The LIBOR rate used to calculate interest is the higher of the prevailing 1 month LIBOR rate in effect on the date of the monthly reset, or the LIBOR base rate floor shown. |
Securities exempt from registration under Rule 144A of the |
The investment is considered to be the equity tranche of the issuer. |
Securities of collateralized loan obligations where an affiliate of the Adviser serves as collateral manager. |
The issuer is in default of its payment obligation, or is in danger of default. |
Non-income producing security. |
(16) | Represents an affiliated issuer. Assets with a total aggregate market value of |
|
|
State Street U.S. Government Money Market Fund. |
Payment-in-Kind |
|
Securities that are not publicly-traded are valued at fair value as determined in good faith by the board of directors of the Company (the “Board”) or by the Adviser as valuation designee, pursuant to board-approved policies and procedures. In connection with that determination, the Adviser will provide the Board withconsider portfolio company valuations which are based on relevant inputs, including indicative dealer quotes, values of like securities, recent portfolio company consolidated financial statements and forecasts, and valuations prepared by third-party valuation services.
Rule
The Audit and Qualified Legal Compliance Committee of established by the Board reviews these valuations.
Instrument | Type | Fair value | ||||||
Grayson Investor Corp. | Asset-Backed Securities | $ | 84 | |||||
| ||||||||
American Banknote Corp. | Common Stocks | 3,536,250 | ||||||
IQHQ, Inc. | Common Stocks | 2,533,000 | ||||||
| Common Stocks | 42,500 | ||||||
| Common Stocks | 4,732,181 | ||||||
| ||||||||
| ||||||||
NexPoint Capital REIT, LLC | LLC Interests | 7,014,774 | ||||||
SFR WLIF III, LLC | LLC Interests | 338,973 |
| LLC Interests | 3,016,752 | ||||
| 1,644,435 | |||||
| Preferred Stocks | 928,197 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 4,452,382 | ||||
Sapience Therapeutics, Inc. | Preferred Stocks | 3,611,111 | ||||
CCS Medical, Inc | Senior Secured Loans | 3,000,000 | ||||
| Senior Secured Loans | 912,118 | ||||
| Senior Secured Loans | 215,938 | ||||
| Senior Secured Loans | 38,579 | ||||
| 35,994 | |||||
| 463,314 | |||||
| 2,000,000 |
As of December 31, 2019,2022, the Company held the following investments for which a sufficient level of current, reliable market quotations were not available:
Instrument | Type | Fair value | ||||||
| Asset-Backed Securities | $ | 7,023 | |||||
PAMCO CLO 1997-1A B | Asset-Backed Securities | 13 | ||||||
American Banknote Corp. | Common Stocks | 1,732,500 | ||||||
| Common Stocks | 2,359,000 | ||||||
| Common Stocks | 5,114,214 | ||||||
| Common Stocks | 2,269 | ||||||
NexPoint Capital REIT, LLC | LLC Interests | 1,176,024 | ||||||
SFR WLIF III, LLC | LLC Interests | 424,468 | ||||||
| LLC Interests | 3,088,750 | ||||||
| 1,499,989 | |||||||
| Preferred Stocks | 799,994 | ||||||
Sapience Therapeutics, Inc. | Preferred Stocks | 4,549,525 | ||||||
Sapience Therapeutics, Inc. | Preferred Stocks | 3,677,777 | ||||||
CCS Medical, Inc. | Senior Secured Loans | 3,000,000 | ||||||
| Senior Secured Loans | 810,953 | ||||||
| 191,988 | |||||||
| 34,300 | |||||||
| ||||||||
| ||||||||
|
between the debt securities and any such warrants or other equity-linked securities received at the time of origination. The Valuation CommitteeAdviser and the BoardValuation Committee will subsequently value these warrants or other equity-linked securities received at fair value.
Prior to its termination, the Company valued the total return swaps (“TRS”) in accordance with the agreement (the “TRS Agreement”) with BNP Paribas (“BNP Paribas”) that established the TRS. Pursuant to the TRS Agreement, the value of the TRS was based on the increase or decrease in the value of the loans underlying the TRS, together with accrued interest income, interest expense and certain other expenses incurred under the TRS. The loans underlying the TRS were valued based on indicative bid prices provided by an independent third-party pricing service. Bid prices reflected the highest price that market participants may have been willing to pay. These valuations were sent to the Company for review and testing. For additional information on the TRS, see Note 7.
December 31, 2020 | ||||||||||||||||
Investments | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets |
| |||||||||||||||
Senior Secured Loans |
| |||||||||||||||
Energy | $ | — | $ | 422,827 | $ | — | $ | 422,827 | ||||||||
Healthcare | — | 33,071,007 | — | 33,071,007 | ||||||||||||
Manufacturing | — | 1,666,667 | — | 1,666,667 | ||||||||||||
Telecommunication Services | — | — | 861,570 | 861,570 | ||||||||||||
Asset-Backed Securities |
| |||||||||||||||
Financials | — | — | 363,767 | 363,767 | ||||||||||||
Corporate Bonds | ||||||||||||||||
Healthcare | — | 6,531,240 | — | 6,531,240 | ||||||||||||
Media/Telecommunications | — | 352,712 | — | 352,712 | ||||||||||||
Common Stocks |
| |||||||||||||||
Chemicals | — | 42,500 | — | 42,500 | ||||||||||||
Financials | — | — | 1,125,000 | 1,125,000 | ||||||||||||
Healthcare | 566,400 | — | 40,405 | 606,805 | ||||||||||||
Real Estate | — | — | 1,661,000 | 1,661,000 | ||||||||||||
Real Estate Investment Trusts (REITs) | 957,898 | — | — | 957,898 | ||||||||||||
Retail | — | — | 532,642 | 532,642 | ||||||||||||
Service | — | — | 59,183 | 59,183 | ||||||||||||
Telecommunication Services | — | — | 4,630,427 | 4,630,427 | ||||||||||||
LLC Interests |
| |||||||||||||||
Consumer Products | — | — | 2,070,427 | 2,070,427 | ||||||||||||
Real Estate | — | — | 4,236,603 | 4,236,603 | ||||||||||||
Real Estate Investment Trusts (REITs) | — | — | 228,215 | 228,215 | ||||||||||||
Partnership Units |
| |||||||||||||||
Real Estate | — | 5,214,223 | — | 5,214,223 | ||||||||||||
Preferred Stock(1) | — | — | — | — | ||||||||||||
Warrants |
| |||||||||||||||
Healthcare | — | — | 1 | 1 | ||||||||||||
Media/Telecommunications | — | 33,901 | — | 33,901 | ||||||||||||
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|
|
| |||||||||
Total Assets | $ | 1,524,298 | $ | 47,335,077 | $ | 15,809,240 | $ | 64,668,615 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments | $ | 1,524,298 | $ | 47,335,077 | $ | 15,809,240 | $ | 64,668,615 | ||||||||
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December 31, 2019 | ||||||||||||||||
Investments | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets |
| |||||||||||||||
Senior Secured Loans |
| |||||||||||||||
Energy | $ | — | $ | 1,841,046 | $ | — | $ | 1,841,046 | ||||||||
Healthcare | — | 5,111,353 | — | 5,111,353 | ||||||||||||
Media/Telecommunications | — | 336,802 | — | 336,802 | ||||||||||||
Telecommunication Services | — | — | 721,602 | 721,602 | ||||||||||||
Utility | — | 1,925 | — | 1,925 | ||||||||||||
Unsecured Loans | ||||||||||||||||
Materials | — | — | 3,713,191 | 3,713,191 | ||||||||||||
Asset-Backed Securities | ||||||||||||||||
Financials | — | 603,891 | 139,629 | 743,520 | ||||||||||||
Mortgage-Backed Securities | — | 3,994,444 | — | 3,994,444 | ||||||||||||
Closed-End Mutual Funds | 2,136,410 | — | — | 2,136,410 | ||||||||||||
Corporate Bonds | ||||||||||||||||
Financials | — | 1,474,200 | — | 1,474,200 | ||||||||||||
Healthcare | — | 38,987,225 | — | 38,987,225 | ||||||||||||
Media/Telecommunications | — | 361,074 | — | 361,074 | ||||||||||||
Common Stocks | ||||||||||||||||
Chemicals | — | 42,500 | — | 42,500 | ||||||||||||
Energy | 4,904,650 | — | — | 4,904,650 | ||||||||||||
Financials | — | — | 2,467,500 | 2,467,500 | ||||||||||||
Healthcare | 214,740 | — | 40,405 | 255,145 | ||||||||||||
Materials | — | — | 20,898 | 20,898 | ||||||||||||
Media/Telecommunications | 1,715,375 | — | — | 1,715,375 | ||||||||||||
Real Estate Investment Trusts (REITs) | 6,125,046 | — | — | 6,125,046 | ||||||||||||
Retail | — | 1,124,467 | — | 1,124,467 | ||||||||||||
Service | — | 59,183 | — | 59,183 | ||||||||||||
Telecommunication Services | — | — | 3,890,081 | 3,890,081 | ||||||||||||
Utility | 2,413,950 | — | — | 2,413,950 | ||||||||||||
LLC Interests | ||||||||||||||||
Consumer Products | — | — | 2,000,000 | 2,000,000 | ||||||||||||
Real Estate | — | — | 4,932,657 | 4,932,657 | ||||||||||||
Real Estate Investment Trusts (REITs) | — | — | 2,425,989 | 2,425,989 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Financials | — | 2,084,000 | — | 2,084,000 | ||||||||||||
Real Estate | — | 1,500,000 | — | 1,500,000 | ||||||||||||
Real Estate Investment Trusts (REITs) | 4,903,235 | 4,235 | — | 4,907,470 | ||||||||||||
Rights | — | 61,391 | — | 61,391 | ||||||||||||
Warrants | ||||||||||||||||
Healthcare | — | 29,837 | — | 29,837 | ||||||||||||
Materials | — | — | 647 | 647 | ||||||||||||
Media/Telecommunications | — | 44,114 | — | 44,114 | ||||||||||||
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| |||||||||
Total Assets | $ | 22,413,406 | $ | 57,661,687 | $ | 20,352,599 | $ | 100,427,692 | ||||||||
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Liabilities | ||||||||||||||||
Warrants | $ | — | $ | — | $ | — | $ | — | ||||||||
Derivatives |
| |||||||||||||||
Total Return Swap Contracts | $ | — | $ | — | $ | (2,745,042 | ) | $ | (2,745,042 | ) | ||||||
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Total Liabilities | $ | — | $ | — | $ | (2,745,042 | ) | $ | (2,745,042 | ) | ||||||
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| |||||||||
Total Investments net of Swap Contracts | $ | 22,413,406 | $ | 57,661,687 | $ | 17,607,557 | $ | 97,682,650 | ||||||||
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December 31, 2023 | ||||||||||||||||
Investments | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Senior Secured Loans | ||||||||||||||||
Healthcare | $ | — | $ | 3,592,574 | $ | 3,000,000 | $ | 6,592,574 | ||||||||
Telecommunication Services | — | — | 1,202,629 | 1,202,629 | ||||||||||||
Bioplastics | 2,000,000 | 2,000,000 | ||||||||||||||
Real Estate | 463,314 | 463,314 | ||||||||||||||
Asset-Backed Securities | ||||||||||||||||
Financials | — | — | 84 | 84 | ||||||||||||
Corporate Bonds | ||||||||||||||||
Consumer Discretionary | — | 488,665 | — | 488,665 | ||||||||||||
Media/Telecommunications | — | 238,858 | — | 238,858 | ||||||||||||
Common Stocks | ||||||||||||||||
Chemicals | — | — | 42,500 | 42,500 | ||||||||||||
Energy | — | 2,237,604 | — | 2,237,604 | ||||||||||||
Financials | — | — | 3,536,250 | 3,536,250 | ||||||||||||
Real Estate | 2,073,797 | — | 2,533,000 | 4,606,797 | ||||||||||||
Real Estate Investment Trust (REITs) | 805,987 | — | — | 805,987 | ||||||||||||
Telecommunication Services | — | — | 4,732,181 | 4,732,181 | ||||||||||||
LLC Interests | ||||||||||||||||
Consumer Products | — | — | 3,016,752 | 3,016,752 | ||||||||||||
Real Estate | — | — | 7,353,747 | 7,353,747 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Financials | — | 1,186,250 | — | 1,186,250 | ||||||||||||
Healthcare | — | — | 10,636,125 | 10,636,125 | ||||||||||||
Warrants | ||||||||||||||||
Energy | — | 266,500 | — | 266,500 | ||||||||||||
Media/Telecommunications | — | 6,469 | — | 6,469 | ||||||||||||
Total Assets | $ | 2,879,784 | $ | 8,016,920 | $ | 38,516,582 | $ | 49,413,286 | ||||||||
Total Investments | $ | 2,879,784 | $ | 8,016,920 | $ | 38,516,582 | $ | 49,413,286 | ||||||||
December 31, 2022 | ||||||||||||||||
Investments | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Senior Secured Loans | ||||||||||||||||
Healthcare | $ | — | $ | 10,158,950 | $ | 3,000,000 | $ | 13,158,950 | ||||||||
Telecommunication Services | — | — | 1,069,243 | 1,069,243 | ||||||||||||
Asset-Backed Securities | ||||||||||||||||
Financials | — | — | 7,036 | 7,036 | ||||||||||||
Corporate Bonds | ||||||||||||||||
Healthcare | — | 2,414,839 | — | 2,414,839 | ||||||||||||
Media/Telecommunications | — | 290,078 | — | 290,078 | ||||||||||||
Common Stocks | ||||||||||||||||
Chemicals | — | 42,500 | — | 42,500 | ||||||||||||
Energy | — | 1,591,692 | — | 1,591,692 | ||||||||||||
Financials | — | — | 1,732,500 | 1,732,500 | ||||||||||||
Real Estate | 7,653,730 | — | 2,359,000 | 10,012,730 | ||||||||||||
Real Estate Investment Trust (REITs) | 1,018,779 | — | — | 1,018,779 | ||||||||||||
Service | — | — | 2,269 | 2,269 | ||||||||||||
Telecommunication Services | — | — | 5,114,214 | 5,114,214 | ||||||||||||
LLC Interests | ||||||||||||||||
Consumer Products | — | — | 3,088,750 | 3,088,750 | ||||||||||||
Real Estate | — | — | 1,600,492 | 1,600,492 | ||||||||||||
Preferred Stocks | ||||||||||||||||
Financials | — | 1,440,625 | — | 1,440,625 | ||||||||||||
Healthcare | — | — | 10,527,285 | 10,527,285 | ||||||||||||
Warrants | ||||||||||||||||
Energy | — | 161,249 | — | 161,249 | ||||||||||||
Media/Telecommunications | — | 20,484 | — | 20,484 | ||||||||||||
Total Assets | $ | 8,672,509 | $ | 16,120,417 | $ | 28,500,789 | $ | 53,293,715 | ||||||||
Total Investments | $ | 8,672,509 | $ | 16,120,417 | $ | 28,500,789 | $ | 53,293,715 | ||||||||
The table below sets forth a summary of changes in the Company’s Level 3 investments (measured at fair value using significant unobservable inputs) for the year ended December 31, 2020.
Investments: | Balance as of December 31, 2019 | Transfers into Level 3 | Transfer out of Level 3 | Net amortization (accretion) of premium/ (discount) | Net realized gains/ (losses) | Net change in unrealized gains/ (losses) | Purchases/ PIK | (Sales and redemptions) | Balance as of December 31, 2020 | Change in unrealized gain/(loss) on Level 3 securities still held at period end | ||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||
Senior Secured Loans | ||||||||||||||||||||||||||||||||||||||||
Telecommunication Services | $ | 721,602 | $ | — | $ | — | $ | — | $ | — | $ | 1,446 | $ | 138,522 | $ | — | $ | 861,570 | $ | 1,446 | ||||||||||||||||||||
Unsecured Loans | ||||||||||||||||||||||||||||||||||||||||
Materials | 3,713,191 | — | — | 124,719 | (2,746,641 | ) | 482,389 | 313,727 | (1,887,385 | ) | — | — | ||||||||||||||||||||||||||||
Asset-Backed Securities | ||||||||||||||||||||||||||||||||||||||||
Financials | 139,629 | 333,764 | — | — | — | (109,626 | ) | — | — | 363,767 | (109,626 | ) | ||||||||||||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||||||||||||||||||
Financials | 2,467,500 | — | — | — | — | (1,342,500 | ) | — | — | 1,125,000 | (1,342,500 | ) | ||||||||||||||||||||||||||||
Healthcare | 40,405 | — | — | — | — | — | — | — | 40,405 | — | ||||||||||||||||||||||||||||||
Materials | 20,898 | — | — | — | (663,116 | ) | 642,218 | — | — | — | — | |||||||||||||||||||||||||||||
Real Estate | — | 1,500,000 | — | — | — | 161,000 | — | — | 1,661,000 | 161,000 | ||||||||||||||||||||||||||||||
Retail | — | 1,124,467 | — | — | — | (571,332 | ) | — | (20,493 | ) | 532,642 | (571,332 | ) | |||||||||||||||||||||||||||
Service | — | 59,183 | — | — | — | 2,277 | — | (2,277 | ) | 59,183 | 2,277 | |||||||||||||||||||||||||||||
Telecommunication Services | 3,890,081 | — | — | — | — | 740,346 | — | — | 4,630,427 | 740,346 | ||||||||||||||||||||||||||||||
LLC Interests | ||||||||||||||||||||||||||||||||||||||||
Consumer Products | 2,000,000 | — | — | — | — | 70,427 | — | — | 2,070,427 | 70,427 | ||||||||||||||||||||||||||||||
Real Estate | 4,932,657 | — | — | — | — | (696,054 | ) | — | — | 4,236,603 | (696,054 | ) | ||||||||||||||||||||||||||||
Real Estate Investment Trusts (REITs) | 2,425,989 | — | — | — | — | (8,213 | ) | — | (2,189,561 | ) | 228,215 | (8,213 | ) | |||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||||||||||||||||
Healthcare | — | 29,837 | — | — | — | (29,836 | ) | — | — | 1 | (29,836 | ) | ||||||||||||||||||||||||||||
Materials | 647 | — | — | — | — | (647 | ) | — | — | — | — | |||||||||||||||||||||||||||||
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Total | $ | 20,352,599 | $ | 3,047,251 | $ | — | $ | 124,719 | $ | (3,409,757 | ) | $ | (658,105 | ) | $ | 452,249 | $ | (4,099,716 | ) | $ | 15,809,240 | $ | (1,782,065 | ) | ||||||||||||||||
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Liabilities | ||||||||||||||||||||||||||||||||||||||||
Total Return Swaps(1) | $ | (2,745,042 | ) | $ | — | $ | — | $ | — | $ | (6,929,996 | ) | $ | 2,745,042 | $ | 7,425,035 | $ | (495,039 | ) | $ | — | $ | — | |||||||||||||||||
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Investments: | Balance as of December 31, 2022 | Transfers into Level 3 | Transfers out of Level 3 | Net amortization (accretion) of premium/ (discount) | Distribution to Return Capital | Net realized gains/ (losses) | Net change in unrealized gains/ (losses) | Purchases/ PIK | (Sales and redemptions) (1) | Balance as of December 31, 2023 | Change in unrealized gain/(loss) on Level 3 securities still held at period end | |||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||
Senior Secured Loans | ||||||||||||||||||||||||||||||||||||||||||||
Bioplastics | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,000,000 | $ | — | $ | 2,000,000 | $ | — | ||||||||||||||||||||||
Healthcare | 3,000,000 | — | — | 19,034 | — | — | (19,034 | ) | — | — | 3,000,000 | (19,034 | ) | |||||||||||||||||||||||||||||||
Real Estate | — | — | — | — | — | — | — | 463,314 | — | 463,314 | — | |||||||||||||||||||||||||||||||||
Telecommunication Services | 1,069,243 | — | — | — | — | — | 2,014 | 131,372 | — | 1,202,629 | 2,014 | |||||||||||||||||||||||||||||||||
Asset-Backed Securities | ||||||||||||||||||||||||||||||||||||||||||||
Financials | 7,036 | — | — | — | — | (158,867 | ) | 162,924 | 8,136 | (19,145 | ) | 84 | (6,939 | ) | ||||||||||||||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||||||||||||||||||||||
Chemicals | — | 42,500 | — | — | — | — | — | — | — | 42,500 | — | |||||||||||||||||||||||||||||||||
Financials | 1,732,500 | — | — | — | — | — | 1,803,750 | — | — | 3,536,250 | 1,803,750 | |||||||||||||||||||||||||||||||||
Real Estate | 2,359,000 | — | — | — | — | — | 174,000 | — | — | 2,533,000 | 174,000 | |||||||||||||||||||||||||||||||||
Service | 2,269 | — | — | — | — | (244,451 | ) | 251,135 | — | (8,953 | ) | — | — | |||||||||||||||||||||||||||||||
Telecommunication Services | 5,114,214 | — | — | — | — | — | (382,033 | ) | — | — | 4,732,181 | (382,033 | ) | |||||||||||||||||||||||||||||||
LLC Interests | ||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | 3,088,750 | — | — | — | — | 163,314 | 228,002 | — | (463,314 | ) | 3,016,752 | 228,002 | ||||||||||||||||||||||||||||||||
Real Estate | 1,600,492 | — | — | — | (244,193 | ) | — | (1,370,637 | ) | 7,448,085 | (80,000 | ) | 7,353,747 | (1,370,637 | ) | |||||||||||||||||||||||||||||
Preferred Stocks | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare | 10,527,285 | — | — | — | — | 1 | 108,839 | 6,012,000 | (6,012,000 | ) | 10,636,125 | 108,839 | ||||||||||||||||||||||||||||||||
Total | $ | 28,500,789 | $ | 42,500 | $ | — | $ | 19,034 | $ | (244,193 | ) | $ | (240,003 | ) | $ | 958,960 | $ | 16,062,907 | $ | (6,583,412 | ) | $ | 38,516,582 | $ | 537,962 | |||||||||||||||||||
| Includes sales to subreit at cost which generate no realized |
The table below sets forth a summary of changes in the Company’s Level 3 investments (measured at fair value using significant unobservable inputs) for the year ended December 31, 2019.
Investments: | Balance as of December 31, 2018 | Transfers into Level 3 | Transfer out of Level 3 | Net amortization (accretion) of premium/ (discount) | Net realized gains/ (losses) | Net change in unrealized gains/ (losses) | Purchases/ PIK | (Sales and redemptions) | Balance as of December 31, 2019 | Change in unrealized gain/(loss) on Level 3 securities still held at period end | ||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||
Senior Secured Loans | ||||||||||||||||||||||||||||||||||||||||
Telecommunication Services | $ | 522,845 | $ | — | $ | — | $ | — | $ | — | $ | (923 | ) | $ | 199,680 | $ | — | $ | 721,602 | $ | (923 | ) | ||||||||||||||||||
Unsecured Loans | ||||||||||||||||||||||||||||||||||||||||
Materials | 3,838,472 | — | — | 175,174 | — | (866,717 | ) | 566,262 | — | 3,713,191 | (866,717 | ) | ||||||||||||||||||||||||||||
Asset-Backed Securities | ||||||||||||||||||||||||||||||||||||||||
Financials | 144,044 | — | — | — | — | (4,415 | ) | — | — | 139,629 | (4,415 | ) | ||||||||||||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||||||||||||||||||
Financials | — | — | — | — | — | 405,000 | 2,062,500 | — | 2,467,500 | 405,000 | ||||||||||||||||||||||||||||||
Healthcare | 14,509 | — | — | — | — | 25,896 | — | — | 40,405 | 25,896 | ||||||||||||||||||||||||||||||
Materials | 1,303,257 | — | — | — | — | (1,282,359 | ) | — | — | 20,898 | (1,282,359 | ) | ||||||||||||||||||||||||||||
Media/ | 1,055,803 | — | — | — | — | 2,422,882 | — | (3,478,685 | ) | — | 2,422,882 | |||||||||||||||||||||||||||||
Telecommunication Services | 3,913,800 | — | — | — | — | (23,719 | ) | — | — | 3,890,081 | (23,719 | ) | ||||||||||||||||||||||||||||
LLC Interests | ||||||||||||||||||||||||||||||||||||||||
Consumer Products | — | — | — | — | — | — | 2,000,000 | — | 2,000,000 | — | ||||||||||||||||||||||||||||||
Real Estate | — | — | — | — | — | (67,343 | ) | 5,000,000 | — | 4,932,657 | (67,343 | ) | ||||||||||||||||||||||||||||
Real Estate Investment Trusts (REITs) | — | — | — | — | — | 236,428 | 2,189,561 | — | 2,425,989 | 236,428 | ||||||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||||||||||||||||
Materials | 40,340 | — | — | — | — | (39,693 | ) | — | — | 647 | (39,693 | ) | ||||||||||||||||||||||||||||
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Total | $ | 10,833,070 | $ | — | $ | — | $ | 175,174 | $ | — | $ | 805,037 | $ | 12,018,003 | $ | (3,478,685 | ) | $ | 20,352,599 | $ | 805,037 | |||||||||||||||||||
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Liabilities | ||||||||||||||||||||||||||||||||||||||||
Total Return Swaps(1) | $ | (2,547,492 | ) | $ | — | $ | — | $ | — | $ | — | $ | (197,550 | ) | $ | — | $ | — | $ | (2,745,042 | ) | $ | (197,550 | ) | ||||||||||||||||
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2022.
Investments: | Balance as of December 31, 2021 | Transfers into Level 3 | Transfer out of Level 3 | Net amortization (accretion) of premium/ (discount) | Distribution to Return Capital | Net realized gains/ (losses) | Net change in unrealized gains/ (losses) | Purchases/ PIK | (Sales and redemptions) | Balance as of December 31, 2022 | Change in unrealized gain/(loss) on Level 3 securities still held at period end | |||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||
Senior Secured Loans | ||||||||||||||||||||||||||||||||||||||||||||
Telecommunication Services | $ | 962,478 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (6,238 | ) | $ | 113,003 | $ | — | $ | 1,069,243 | $ | (6,238 | ) | ||||||||||||||||||||
Healthcare | 4,000,000 | — | — | 16,520 | — | — | 73,480 | 2,990,000 | (4,080,000 | ) | 3,000,000 | 73,480 | ||||||||||||||||||||||||||||||||
Asset-Backed Securities | ||||||||||||||||||||||||||||||||||||||||||||
Financials | 405,040 | — | — | — | — | 24,930 | (364,273 | ) | — | (58,661 | ) | 7,036 | (364,273 | ) | ||||||||||||||||||||||||||||||
Common Stocks | ||||||||||||||||||||||||||||||||||||||||||||
Financials | 2,208,750 | — | — | — | — | — | (476,250 | ) | — | — | 1,732,500 | (476,250 | ) | |||||||||||||||||||||||||||||||
Real Estate | 1,823,000 | — | — | — | — | (1,440 | ) | 536,000 | 1,501,440 | (1,500,000 | ) | 2,359,000 | 536,000 | |||||||||||||||||||||||||||||||
Service | 5,172 | — | — | — | — | — | (2,903 | ) | — | — | 2,269 | (2,903 | ) | |||||||||||||||||||||||||||||||
Telecommunication Services | 4,706,357 | — | — | — | — | — | 407,857 | — | — | 5,114,214 | 407,857 | |||||||||||||||||||||||||||||||||
LLC Interests | ||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | 2,812,212 | — | — | — | — | — | 276,538 | — | — | 3,088,750 | 276,538 | |||||||||||||||||||||||||||||||||
Real Estate | 4,760,162 | — | — | — | — | (74,604 | ) | 174,219 | 1,215,000 | (4,474,285 | ) | 1,600,492 | 174,219 | |||||||||||||||||||||||||||||||
Preferred Stocks | ||||||||||||||||||||||||||||||||||||||||||||
Healthcare | — | — | — | — | — | — | 447,299 | 10,079,986 | — | 10,527,285 | 447,299 | |||||||||||||||||||||||||||||||||
Total | $ | 21,683,171 | $ | — | $ | — | $ | 16,520 | $ | — | $ | (51,114 | ) | $ | 1,065,729 | $ | 15,899,429 | $ | (10,112,946 | ) | $ | 28,500,789 | $ | 1,065,729 | ||||||||||||||||||||
Investment | Fair value at December 31, 2020 | Valuation technique | Unobservable inputs | Range of input value(s) (weighted average) | ||||||
LLC Interest | $6,535,245 | Discounted Cash Flow
Net Asset Value Multiples Analysis | Discount Rate Long Term Growth Rate Net Asset Value Multiple of EBITDA | 1.28% -11.30% 6.90% $0.82 - $2,282.15 3.50x -7.95x | ||||||
Common Stock | 8,048,657 | Discounted Cash Flow Multiples Analysis
Transaction Indication of Value
Probability Weighted Expected Return | Discount Rate Multiple of EBITDA Unadjusted Price/MHz-PoP Liquidity Discount Enterprise Value ($mm) Transaction Price Per Share Multiple of EBITDA Cash Offer per Share Probability Assessment | 15.50% 3.50x - 7.00x $0.09 - $0.95 25% $771.00 $2.75 -$16.61 8.00x $2,500 20% | ||||||
Senior Secured Loans | 861,570 | Discounted Cash Flow | Discount Rate | 11.00% | ||||||
Asset-Backed Securities | 363,767 | Discounted Cash Flow Third Party Indication of Value | Discount Rate Broker Quote | 21.00% Various | ||||||
Warrants | 1 | Black-Scholes Model | Volatility Assumption | 78.9% - 429.9% | ||||||
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| |||||||||
Total | $15,809,240 | |||||||||
|
|
Investment | Fair value at December 31, 2019 | Valuation technique | Unobservable inputs | Range of input value(s) (weighted average) | ||||||
LLC Interest | $9,358,646 | Discounted Cash Flow Net Asset Value Cost Basis | Discount Rate N/A N/A | 2.59% - 12.5% N/A N/A | ||||||
Common Stock | 6,418,884 | Discounted Cash Flow Multiples Analysis
Transaction Analysis Transaction Indication of Value
Black-Scholes Model
Implied Value | Discount Rate Multiple of EBITDA Unadjusted Price/MHz-PoP Risk Discount Liquidity Discount Multiple of EBITDA Enterprise Value ($mm) Transaction Price Per Share Volatility Assumption Cash Payment Value Probability Assessment | 16.0% - 20.0% 6.00x - 8.75x $0.12 - $0.95 55.2% - 59.8% 25% 8.25x - 8.75x $365.0 - $771.0 $2.75 30% - 40% $4.46 20% | ||||||
Senior Secured Loans | 721,602 | Discounted Cash Flow | Discount Rate Spread Adjustment | 11.10% 0.10% | ||||||
Unsecured Loans | 3,713,191 | Black-Scholes Model | Volatility Assumption | 30% - 40% | ||||||
Asset-Backed Securities | 139,629 | Discounted Cash Flow | Discount Rate | 21.00% | ||||||
Warrants | 647 | Discounted Cash Flow Multiples Analysis Transaction Analysis Black-Scholes Model | Discount Rate Multiple of EBITDA Multiple of EBITDA Volatility Assumption | 20.0% 7.0x - 8.75x 8.25x - 8.75x 30% - 40% | ||||||
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| |||||||||
Total | $20,352,599 | |||||||||
|
| |||||||||
Total Return Swaps | $(2,745,042) | Third Party Pricing Vendor | N/A | N/A |
Investment | Fair value at December 31, 2023 | Valuation Technique | Unobservable Inputs | Range of Input Value(s) (arithmetic average) | ||||||
LLC Interests | $ | 10,370,499 | Discounted Cash Flow Multiples Analysis | Discount Rate Multiple of EBITDA | 5.48% - 9.68% (7.58%) 5.75x - 10.40x (8.07x) | |||||
Preferred Stocks | 10,636,125 | Option Pricing Model Transaction Indication of Value | Volatility Enterprise Value ($mm) | 40% - 90% (65%) $281.4 - $598.6 ($452.75) | ||||||
Common Stocks | 10,843,931 | Discounted Cash Flow Multiples Analysis Transaction Indication of Value | Discount Rate Multiple of EBITDA Unadjusted Price/MHz-PoP Enterprise Value ($mm) | 13% - 15% (14.0%) 1.00x - 4.00x (2.31x) $0.10 - $0.90 ($0.50) $797 - $1,044 ($920.5) | ||||||
Liquidation Analysis | N/A | $5.00 | ||||||||
Senior Secured Loans | 6,665,943 | Discounted Cash Flow Transaction Indication of Value | Discount Rate Cost Price ($mm) | 11.00% - 14.31% (12.64%) $2.46 | ||||||
Asset-Backed Securities | 84 | NAV Approach | Discount Rate | N/A | ||||||
Total | $ | 38,516,582 | ||||||||
Investment | Fair value at December 31, 2022 | Valuation technique | Unobservable inputs | Range of input value(s) (weighted average) | ||||||
LLC Interest | $ | 4,689,242 | Discounted Cash Flow Multiples Analysis | Discount Rate Multiple of EBITDA | 4.73% - 8.93% (6.83%) 5.55x - 9.85x (7.70x) | |||||
Preferred Stocks | 10,527,285 | Option Pricing Model Transaction Indication of Value | Volatility Recap Price | 40% - 60% (50%) $11.10 | ||||||
Common Stocks | 9,207,983 | Discounted Cash Flow Multiples Analysis Transaction Indication of Value Liquidation Analysis Net Asset Value | Discount Rate Multiple of EBITDA Unadjusted Price/MHz-PoP Enterprise Value ($mm) Recovery Rate N/A | 13.50% - 15.50% (14.50%) 3.25x - 4.25x (3.75x) $0.09 - $0.95 ($0.52) $872 - $969 ($920.5) 40% - 100% (70%) $28 | ||||||
Senior Secured Loans | 4,069,243 | Discounted Cash Flow | Discount Rate | 10.25% - 13.08% (11.67%) | ||||||
Asset-Backed Securities | 7,036 | NAV Approach | Discount Rate | 70.00% | ||||||
Total | $ | 28,500,789 | ||||||||
The significant unobservable inputsinput used in the fair value measurement of the Company’s bank loanpreferred equity securities are: discount ratevolatility assumption and spread adjustment.enterprise value. Significant increases (decreases) in eitherany of those inputs in isolation could result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of the Company’s asset-backedsenior secured loan securities are: discount rate and broker quote indication of value.cost price. Significant increases (decreases) in eitherany of those inputs in
Investments designated as Level 3 may include assets valued using quotes or indications furnished by brokers which are based on models or estimates without observable inputs and may not be executable prices. In light of the developing market conditions, the Investment Adviser continues to search for observable data points and evaluate broker quotes and indications received for port
Interest income is recorded on the accrual basis. The Company does not accrue as a receivable for interest or dividends on loans, asset-backed securities and other securities if there is a reason to doubt the Company’s ability to collect such income. For loans with contractual PIK
For the year ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net increase (decrease) in net assets from operations | $ | (20,899,278 | ) | $ | 9,190,895 | $ | (6,209,274 | ) | ||||
Weighted average common shares outstanding | 10,525,271 | 10,441,061 | 10,358,148 | |||||||||
Earnings (loss) per common share-basic and diluted | $ | (1.98 | ) | $ | 0.88 | $ | (0.60 | ) |
For the year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,453,947 | $ | (4,065,174 | ) | $ | 5,706,143 | |||||
Weighted average common shares outstanding | 9,533,072 | 9,893,732 | 10,254,666 | |||||||||
Earnings (loss) per common share-basic and diluted | $ | 0.15 | $ | (0.41 | ) | $ | 0.56 |
In March 2020, the FASB issued ASU “Reference
Fair value | Percentage | |||||||
Assets | ||||||||
Healthcare | $ | 40,209,053 | 62.2% | |||||
Real Estate | 11,111,826 | 17.2% | ||||||
Telecommunication Services | 5,491,997 | 8.5% | ||||||
Consumer Products | 2,070,427 | 3.2% | ||||||
Manufacturing | 1,666,667 | 2.6% | ||||||
Financials | 1,488,767 | 2.3% | ||||||
Real Estate Investment Trusts (REITs) | 1,186,113 | 1.8% | ||||||
Retail | 532,642 | 0.8% | ||||||
Energy | 422,827 | 0.6% | ||||||
Media/Telecommunications | 386,613 | 0.6% | ||||||
Service | 59,183 | 0.1% | ||||||
Chemicals | 42,500 | 0.1% | ||||||
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| |||||
Total Assets | $ | 64,668,615 | 100.0% | |||||
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|
|
Fair value | Percentage | |||||||
Assets | ||||||||
Healthcare | $ | 17,228,699 | 34.9 | % | ||||
Real Estate | 12,423,858 | 25.1 | % | |||||
Telecommunication Services | 5,934,810 | 12.0 | % | |||||
Financials | 4,722,584 | 9.6 | % | |||||
Consumer Products | 3,016,752 | 6.1 | % | |||||
Energy | 2,504,104 | 5.1 | % | |||||
Bioplastics | 2,000,000 | 4.0 | % | |||||
Real Estate Investment Trusts (REITs) | 805,987 | 1.6 | % | |||||
Consumer Discretionary | 488,665 | 1.0 | % | |||||
Media/Telecommunications | 245,327 | 0.5 | % | |||||
Chemicals | 42,500 | 0.1 | % | |||||
Total Assets | $ | 49,413,286 | 100.0 | % | ||||
Fair value | Percentage | |||||||
Assets | ||||||||
Healthcare | $ | 44,383,560 | 44.2% | |||||
Real Estate Investment Trusts (REITs) | 13,458,505 | 13.4% | ||||||
Financials | 12,900,074 | 12.9% | ||||||
Energy | 6,745,696 | 6.7% | ||||||
Real Estate | 6,432,657 | 6.4% | ||||||
Telecommunication Services | 4,611,683 | 4.6% | ||||||
Materials | 3,734,736 | 3.7% | ||||||
Utility | 2,477,266 | 2.5% | ||||||
Media/Telecommunications | 2,457,365 | 2.4% | ||||||
Consumer Products | 2,000,000 | 2.0% | ||||||
Retail | 1,124,467 | 1.1% | ||||||
Service | 59,183 | 0.1% | ||||||
Chemicals | 42,500 | 0.0% | ||||||
|
|
|
| |||||
Total Assets | $ | 100,427,692 | 100.0% | |||||
|
|
|
|
2022:
Fair value | Percentage | |||||||
Assets | ||||||||
Healthcare | $ | 26,101,074 | 49.0 | % | ||||
Real Estate | 11,613,222 | 21.7 | % | |||||
Telecommunication Services | 6,183,457 | 11.6 | % | |||||
Consumer Products | 3,088,750 | 5.8 | % | |||||
Financials | 3,180,161 | 6.0 | % | |||||
Energy | 1,752,941 | 3.3 | % | |||||
Real Estate Investment Trusts (REITs) | 1,018,779 | 1.9 | % | |||||
Media/Telecommunications | 310,562 | 0.6 | % | |||||
Chemicals | 42,500 | 0.1 | % | |||||
Service | 2,269 | 0.0 | % | |||||
Total Assets | $ | 53,293,715 | 100.0 | % | ||||
Amortized Cost | Fair value | Percentage of Portfolio (at Fair Value) | ||||||||||
Assets |
| |||||||||||
Senior Secured Loans — First Lien | $ | 30,123,122 | $ | 31,276,803 | 48.3% | |||||||
Senior Secured Loans — Second Lien | 4,742,429 | 4,745,268 | 7.3% | |||||||||
Asset-Backed Securities | 671,187 | 363,767 | 0.6% | |||||||||
Corporate Bonds | 6,736,607 | 6,883,952 | 10.6% | |||||||||
Common Stocks | 7,774,595 | 9,615,455 | 14.9% | |||||||||
LLC Interests | 7,000,000 | 6,535,245 | 10.1% | |||||||||
Partnership Units | 6,312,618 | 5,214,223 | 8.1% | |||||||||
Preferred Stocks | 3,051,714 | — | 0.0% | |||||||||
Warrants | 52,988 | 33,902 | 0.1% | |||||||||
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|
|
| |||||||
Total Assets | $ | 66,465,260 | $ | 64,668,615 | 100.0% | |||||||
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|
|
Amortized Cost | Fair value | Percentage of Portfolio (at Fair Value) | ||||||||||
Assets | ||||||||||||
Senior Secured Loans - First Lien | $ | 10,580,813 | $ | 10,130,961 | 20.5 | % | ||||||
Senior Secured Loans - Second Lien | 1,500,056 | 127,556 | 0.3 | % | ||||||||
Asset-Backed Securities | 218,666 | 84 | 0.0 | % | ||||||||
Corporate Bonds | 1,380,892 | 727,523 | 1.5 | % | ||||||||
Common Stocks | 9,924,122 | 15,961,319 | 32.3 | % | ||||||||
LLC Interests | 10,490,003 | 10,370,499 | 21.0 | % | ||||||||
Preferred Stocks | 11,829,987 | 11,822,375 | 23.9 | % | ||||||||
Warrants | 74,284 | 272,969 | 0.6 | % | ||||||||
Total Assets | $ | 45,998,823 | $ | 49,413,286 | 100.0 | % | ||||||
Amortized cost | Fair value | Percentage of portfolio (at fair value) | ||||||||||
Assets |
| |||||||||||
Senior Secured Loans — First Lien | $ | 8,473,042 | $ | 7,683,965 | 7.7 | % | ||||||
Senior Secured Loans — Second Lien | 553,265 | 326,838 | 0.3 | % | ||||||||
Senior Secured Loans — Escrow Loan | 79,372 | 1,925 | 0.0 | % | ||||||||
Unsecured Loans | 4,195,580 | 3,713,191 | 3.7 | % | ||||||||
Asset-Backed Securities | 896,536 | 743,520 | 0.7 | % | ||||||||
Mortgage-Backed Securities | 3,996,530 | 3,994,444 | 4.0 | % | ||||||||
Closed-End Mutual Funds | 2,419,467 | 2,136,410 | 2.1 | % | ||||||||
Corporate Bonds | 42,275,712 | 40,822,499 | 40.6 | % | ||||||||
Common Stocks | 20,812,044 | 23,018,795 | 22.9 | % | ||||||||
LLC Interests | 9,189,561 | 9,358,646 | 9.3 | % | ||||||||
Preferred Stocks | 10,285,555 | 8,491,470 | 8.5 | % | ||||||||
Rights | 148,370 | 61,391 | 0.1 | % | ||||||||
Warrants | 52,988 | 74,598 | 0.1 | % | ||||||||
|
|
|
|
|
| |||||||
Total Assets | $ | 103,378,022 | $ | 100,427,692 | 100.0 | % | ||||||
|
|
|
|
|
|
The following table summarizes the amortized cost and the fair value2022:
Amortized Cost | Fair value | Percentage of Portfolio (at Fair Value) | ||||||||||
Assets | ||||||||||||
Senior Secured Loans - First Lien | $ | 14,645,106 | $ | 11,575,821 | 21.7 | % | ||||||
Senior Secured Loans - Second Lien | 2,976,056 | 2,652,372 | 5.0 | % | ||||||||
Asset-Backed Securities | 388,541 | 7,036 | 0.0 | % | ||||||||
Corporate Bonds | 3,358,783 | 2,704,917 | 5.1 | % | ||||||||
Common Stocks | 17,073,102 | 19,514,684 | 36.6 | % | ||||||||
LLC Interests | 3,666,112 | 4,689,242 | 8.8 | % | ||||||||
Preferred Stocks | 11,829,987 | 11,967,910 | 22.5 | % | ||||||||
Warrants | 74,284 | 181,733 | 0.3 | % | ||||||||
Total Assets | $ | 54,011,971 | $ | 53,293,715 | 100.0 | % | ||||||
Geography | Fair value | Percentage | ||||||
Assets |
| |||||||
Cayman Islands(1) | $ | 363,767 | 0.6 | % | ||||
Great Britain(1) | 566,400 | 0.9 | % | |||||
Luxembourg(1) | 2,461,549 | 3.8 | % | |||||
United States | 61,276,899 | 94.7 | % | |||||
|
|
|
| |||||
Total Assets | $ | 64,668,615 | 100.0 | % | ||||
|
|
|
|
|
2023:
Geography | Fair value | Percentage | ||||||
Assets | ||||||||
Cayman Islands (1) | $ | 84 | 0.0 | % | ||||
Luxembourg (1) | 1,438,750 | 2.9 | % | |||||
United States | 47,974,452 | 97.1 | % | |||||
Total Assets | $ | 49,413,286 | 100.0 | % |
Geography | Fair value | Percentage | ||||||
Assets |
| |||||||
Cayman Islands(1) | $ | 743,520 | 0.7 | % | ||||
Luxembourg(1) | 2,583,933 | 2.6 | % | |||||
United States | 97,100,239 | 96.7 | % | |||||
|
|
|
| |||||
Total Assets | $ | 100,427,692 | 100.0 | % | ||||
|
|
|
|
Geography | Fair value | Percentage | ||||||
Assets | ||||||||
Cayman Islands (1) | $ | 7,036 | 0.0 | % | ||||
Luxembourg (1) | 1,318,346 | 2.5 | % | |||||
United States | 51,968,333 | 97.5 | % | |||||
Total Assets | $ | 53,293,715 | 100.0 | % | ||||
(1) | Investment denominated in USD. |
income” for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the Company’s net assets, as defined in the Investment Advisory Agreement, equal to 1.875% per quarter. As a result, the Adviser will not earn this incentive fee for any quarter until the Company’s
2023.
Investment Advisory and Administration Fees Table
Amounts waived and subject to recoupment pertaining to investment advisory and administration fees are shown below.
Period ended | Advisory fees waived and subject to recoupment(1) | Administration fees waived and subject to recoupment(1) | Recoupment eligibility expiration | |||||||||
December 31, 2017 | $ | 413,916 | $ | 75,906 | Expired | |||||||
September 30, 2017 | 305,288 | 69,308 | Expired | |||||||||
June 30, 2017 | 389,733 | 77,947 | Expired | |||||||||
March 31, 2017 | 390,969 | 78,194 | Expired | |||||||||
December 31, 2016 | 366,861 | 73,372 | Expired | |||||||||
September 30, 2016 | 343,320 | 68,664 | Expired | |||||||||
June 30, 2016 | 74,421 | 14,884 | Expired | |||||||||
|
|
|
| |||||||||
Total | $ | 2,284,508 | $ | 458,275 |
|
In addition, cumulatively since inception through June 10, 2016, the Adviser has voluntarily waived $930,143 and $186,042 of advisory fees and administration fees, respectively, all of which are not recoupable.
February 14, 2018.
report. The Company pays no compensation to any of its officers, all of whom are employed by the Adviser, its affiliates or Skyview. Effective January 28, 2020, Mr. Honis is treated as an “interested person” of the Company (as defined in the 1940 Act) in light of certain relationships between Mr. Honis and certain affiliates of the Adviser, including Highland Capital Management, L.P.Skyview Group, Inc. (“HCMLP”Skyview”), arising out of HCMLP’s pending Chapter 11 proceedings.
.
2024.
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2020 | $ | 989,447 | $ | 639,959 | $ | 349,488 | $ | 101,541 | December 31, 2023 | |||||||||||
September 30, 2020 | 687,228 | 439,281 | 247,947 | 94,039 | September 30, 2023 | |||||||||||||||
June 30, 2020 | 445,585 | 291,677 | 153,908 | (30,539 | ) | June 30, 2023 | ||||||||||||||
March 31, 2020 | 257,226 | 72,779 | 184,447 | 184,447 | March 31, 2023 |
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2023 | $ | 902,219 | $ | 481,443 | $ | 420,776 | $ | 140,233 | December 31, 2026 | |||||||||||
September 30, 2023 | 630,924 | 350,382 | 280,543 | 96,669 | September 30, 2026 | |||||||||||||||
June 30, 2023 | 420,066 | 236,192 | 183,874 | 102,016 | June 30, 2026 | |||||||||||||||
March 31, 2023 | 208,486 | 126,628 | 81,858 | 81,858 | March 31, 2026 |
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2019 | $ | 1,098,789 | $ | 951,520 | $ | 147,269 | $ | 50,130 | December 31, 2022 | |||||||||||
September 30, 2019 | 849,345 | 752,206 | 97,139 | (17,417 | ) | September 30, 2022 | ||||||||||||||
June 30, 2019 | 586,411 | 471,855 | 114,556 | 75,592 | June 30, 2022 | |||||||||||||||
March 31, 2019 | 295,177 | 256,213 | 38,964 | 38,964 | March 31, 2022 |
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2022 | $ | 913,273 | $ | 535,679 | $ | 377,594 | $ | 92,216 | December 31, 2025 | |||||||||||
September 30, 2022 | 678,333 | 392,955 | 285,378 | 124,667 | September 30, 2025 | |||||||||||||||
June 30, 2022 | 434,019 | 273,308 | 160,711 | 98,950 | June 30, 2025 | |||||||||||||||
March 31, 2022 | 211,896 | 150,135 | 61,761 | 61,761 | March 31, 2025 |
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2018 | $ | 1,352,097 | $ | 924,677 | $ | 427,420 | $ | 279,079 | December 31, 2021 | |||||||||||
September 30, 2018 | 950,045 | 801,704 | 148,341 | 23,992 | September 30, 2021 | |||||||||||||||
June 30, 2018 | 613,809 | 489,460 | 124,349 | 44,203 | June 30, 2021 | |||||||||||||||
March 31, 2018 | 341,882 | 261,736 | 80,146 | 80,146 | March 31, 2021 |
The following table reflects the fee waivers and expense reimbursements due from the Adviser as of December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, which may become subject to recoupment by the Adviser.
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2017 | $ | 1,304,585 | $ | 975,289 | $ | 329,296 | $ | — | Expired | |||||||||||
September 30, 2017 | 983,110 | 531,679 | 451,431 | — | Expired | |||||||||||||||
June 30, 2017 | 631,906 | 433,428 | 198,478 | — | Expired | |||||||||||||||
March 31, 2017 | 329,791 | 182,226 | 147,565 | — | Expired |
Period ended | Yearly cumulative other expense | Yearly expense limitation | Yearly cumulative expense reimbursement | Quarterly recoupable/ (recouped) amount | Recoupment eligibility expiration | |||||||||||||||
December 31, 2021 | $ | 892,640 | $ | 597,379 | $ | 295,261 | $ | 94,762 | December 31, 2024 | |||||||||||
September 30, 2021 | 664,052 | 463,553 | 200,499 | 68,134 | September 30, 2024 | |||||||||||||||
June 30, 2021 | 436,866 | 304,501 | 132,365 | 68,919 | June 30, 2024 | |||||||||||||||
March 31, 2021 | 220,126 | 156,680 | 63,446 | 63,446 | March 31, 2024 |
Amounts committed and paid by the Adviser to reimburse for unrealized losses are nonrecurring, and investors should not expect the Adviser to make similar commitments or payments in the future.
2020 | 2019 | 2018 | ||||||||||
Paid in capital excess of par value | $ | (1,621,021 | ) | $ | (138,024 | ) | $ | (314,911 | ) | |||
Distributions in excess of net investment income(1) | 1,541,871 | 2,583,485 | 2,654,803 | |||||||||
Accumulated realized gains(1) | 79,150 | (2,445,461 | ) | (2,339,892 | ) |
2023 | 2022 | 2021 | ||||||||||
Paid in capital excess of par value | $ | (19,894 | ) | $ | (533,512 | ) | $ | 2,104,942 | ||||
Distributions in excess of net investment income (1) | (2,103 | ) | (308,998 | ) | 1,143,870 | |||||||
Accumulated realized gains (1) | 21,997 | 842,510 | (3,248,812 | ) |
(1) | Amounts are included in distributable earnings (accumulated loss) on the |
2020 | 2019 | 2018 | ||||||||||
Undistributed ordinary income | $ | 687,291 | $ | 45,019 | $ | 1,821,034 | ||||||
Net tax appreciation/(depreciation) | (6,021,808 | ) | (3,044,798 | ) | (9,471,326 | ) | ||||||
Undistributed capital gains | — | — | 1,368,718 | |||||||||
Other temporary differences | 1,315,827 | (289,344 | ) | (20,194 | ) |
2023 | 2022 | 2021 | ||||||||||
Undistributed ordinary income | $ | — | $ | — | $ | 72,812 | ||||||
Net tax appreciation/(depreciation) | 3,674,703 | (1,567,035 | ) | 2,708,891 | ||||||||
Undistributed capital gains | — | — | — | |||||||||
Other temporary differences | (848,575 | ) | (883,602 | ) | (910,576 | ) |
Paid Distributions attributable to: | 2020 | 2019 | 2018 | |||||||||
Ordinary income | $ | 4,409,400 | $ | 6,276,791 | $ | 6,964,121 | ||||||
Return of capital | — | — | — | |||||||||
Long term gain | — | 1,237,492 | 636,657 |
Paid Distributions attributable to: | 2023 | 2022 | 2021 | |||||||||
Ordinary income | $ | 1,629,804 | $ | 1,526,458 | $ | 3,633,179 | ||||||
Return of capital | 1,757,477 | 1,999,373 | — | |||||||||
Long term gain | — | — | — |
Gross appreciation | Gross (depreciation) | Net appreciation/ (depreciation) | Cost | |||||||||||||
December 31, 2020 | $ | 7,723,451 | $ | (13,745,259 | ) | $ | (6,021,808 | ) | $ | 70,690,423 | ||||||
December 31, 2019 | 8,606,619 | (11,651,417 | ) | (3,044,798 | ) | 102,532,406 | ||||||||||
December 31, 2018 | 5,726,720 | (15,198,046 | ) | (9,471,326 | ) | 105,156,185 |
Gross appreciation | Gross (depreciation) | Net appreciation/ (depreciation) | Cost | |||||||||||||
December 31, 2023 | $ | 9,837,724 | $ | (6,163,021 | ) | $ | 3,674,703 | $ | 45,438,583 | |||||||
December 31, 2022 | 7,373,938 | (8,940,973 | ) | (1,567,035 | ) | 54,860,750 | ||||||||||
December 31, 2021 | 4,599,564 | (1,890,673 | ) | 2,708,891 | 57,527,420 |
are not “interested persons” of the Company (as defined in the 1940 Act), such repurchases would not be in the best interests of the Company’s stockholders or would violate applicable law. The Company will conduct such repurchase offers in accordance with the requirements of Rulemailedfurnished to each stockholder.
On October 19, 2017, the Company entered into a financing arrangement (the “Financing Arrangement”) with BNP Paribas Prime Brokerage International, Ltd., BNP Prime Brokerage, Inc., and BNP Paribas (together, the “BNPP Entities”). Under the Financing Agreement, the BNPP Entities may make margin loans to the
Company at a rate of one-month LIBOR + 1.30%. The BNPP Entities have the right to cap the amount of margin loans with prior notice to the Company. The Financing Arrangement may be terminated by either the Company or the BNPP Entities with 179 days notice. On April 15, 2020, the Financing Arrangement was paid down and closed. At December 31, 2020, there were no current outstanding or fair value amounts. At December 31, 2019, current outstanding and fair value amounts were $33,714,864 and $33,975,517, respectively.
For the years ended December 31, 2020, 2019 and 2018, the components of total interest expense were as follows:
Year ended December 31, 2020 | Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||
Direct interest expense | $ | 176,911 | $ | 1,233,085 | $ | 759,234 | ||||||
Commitment fees | (204 | ) | 204 | — | ||||||||
Amortization of financing costs | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Total interest expense | $ | 176,707 | $ | 1,233,289 | $ | 759,234 | ||||||
|
|
|
|
|
| |||||||
Average daily amount outstanding | 22,670,341 | (1) | 35,934,346 | 22,875,571 | ||||||||
Weighted average interest rate | 2.67% | (1) | 3.43% | 3.32% |
|
The Company is required to maintain 200% asset coverage with respect to its borrowings outstanding. Asset coverage is calculated by subtracting the Company’s total liabilities, not including any amount representing bank loans and senior securities, from the Company’s total assets and dividing the result by the principal amount of the borrowings outstanding. As of the dates indicated below, the Company’s borrowings outstanding and asset coverage was as follows:
Year ended | Total amount outstanding | % of asset coverage | ||||||
12/31/2020 | $ | — | — | % | ||||
12/31/2019 | 63,219,694 | 241 | % | |||||
12/31/2018 | 67,767,021 | 227 | % | |||||
12/31/2017 | 46,540,921 | 304 | % | |||||
12/31/2016 | 11,200,000 | 701 | % | |||||
12/31/2015 | — | n/a | ||||||
12/31/2014 | — | n/a |
BNP Paribas Total Return Swap
On June 13, 2017, the Company entered into the TRS with BNP Paribas over one or more loans, with a maximum aggregate notional amount of the portfolio debt securities subject to the TRS of $40 million. The agreements between the Company and BNP Paribas, which collectively establish the TRS, are referred to herein as the “TRS Agreement.”
On April 2, 2018, the Company amended and restated the TRS Agreement with BNP Paribas. The amended and restated TRS Agreement, effective April 10, 2018 increased the maximum aggregate notional amount of the portfolio debt securities subject to the TRS to $60 million. On June 10, 2020, the TRS expired.
A TRS is a contract in which one party agrees to make payments to another party based on the increase, if any, in the market value of the asset(s) underlying the TRS, which may include a specified security, basket of
securities or securities indices during a specified period, and the other party agrees to make payments to the first party based on the decrease, if any, in the market value of such underlying assets plus periodic payments based on a fixed or variable interest rate. A TRS effectively adds leverage to a portfolio by providing investment exposure to an underlying asset without owning or taking physical custody of the underlying asset. A TRS often offers lower financing costs than are offered through more traditional borrowing arrangements.
Each individual security subject to the TRS, and the portfolio of securities taken as a whole, had to meet certain criteria described in the TRS Agreement, including a requirement that the securities underlying the TRS were rated by either Moody’s or S&P, and, if rated by Moody’s, have a rating of at least Caa3 and, if rated by S&P, have a rating of at least CCC-. Under the terms of the TRS, BNP Paribas determined whether there had been a failure to satisfy the portfolio criteria in the TRS but could, in its sole discretion, permit assets that did not meet the minimum portfolio criteria set forth in the TRS. If BNP Paribas had determined that an asset failed to meet the minimum portfolio criteria, BNP Paribas could have exercised certain rights, including increasing the amount of collateral the Company was required to provide to it or terminating all or part of the TRS, subject to certain conditions. The Company received from BNP Paribas interest and fees payable to holders of the securities included in the portfolio. The Company paid interest to BNP Paribas generally based on a percentage of the notional amount of the securities subject to the TRS. In addition, upon the termination or repayment of any security subject to the TRS, the Company had either received from BNP Paribas the appreciation in the value of such security or had paid to BNP Paribas any depreciation in the value of such security.
Under the terms of the TRS, the Company or BNP Paribas were required to post additional collateral, on a dollar-for-dollar basis, in certain circumstances, including in the event of depreciation or appreciation in the value of the underlying loans. The limit on the additional collateral that the Company was required to post pursuant to the TRS was equal to the difference between the full notional amount of the loans underlying the TRS and the amount of cash collateral already posted by the Company. The amount of collateral required to be posted was determined primarily on the basis of the aggregate value of the underlying securities.
The Company had the option to terminate the TRS at any time more than one month prior to the TRS’s scheduled termination date upon providing no less than 30 days’ prior notice to BNP Paribas.
For purposes of the asset coverage ratio test applicable to the Company as a BDC, the Company would have treated the outstanding notional amount of the TRS, less the initial amount of any cash collateral required to be posted by the Company under the TRS, as a senior security for the life of that instrument. As of December 31, 2020, the company has $0 in receivable from BNP Paribas for the year ended December 31, 2020.
Further, for purposes of Section 55(a) under the 1940 Act, the Company treats each security underlying the TRS as a qualifying asset if such security is a loan and the obligor on such loan is an eligible portfolio company, and as a non-qualifying asset if the obligor is not an eligible portfolio company.
As of December 31, 2020, there were no positions held in the TRS.
The following is a summary of the underlying loans subject to the TRS as of December 31, 2019:
Underlying Loan | Industry | Interest | Base | Maturity | Notional | Market | Unrealized | |||||||||||||||||||
Advantage Sales & Marketing, Inc. (Second Lien Term Loan) | Service | L + 650 | 1.00 | % | 7/25/2022 | $ | 2,853,750 | $ | 2,640,000 | $ | (213,750 | ) | ||||||||||||||
Air Medical Group Holdings (First Lien Term Loan) | Aerospace | L + 425 | 1.00 | % | 3/14/2025 | 3,917,518 | 3,791,960 | (125,558 | ) | |||||||||||||||||
ASP AMC Merger Sub, Inc. (First Lien Term Loan) | Healthcare | L + 350 | 1.00 | % | 4/21/2024 | 1,822,226 | 1,730,025 | (92,201 | ) | |||||||||||||||||
VVC Holding Corp. (First Lien Term Loan) | Healthcare | L + 450 | 0.00 | % | 2/11/2026 | 5,905,504 | 5,964,975 | 59,471 | ||||||||||||||||||
BioClinica, Inc. (First Lien Term Loan) | Healthcare | L + 425 | 1.00 | % | 10/20/2023 | 1,874,140 | 1,893,662 | 19,522 | ||||||||||||||||||
Employbridge, LLC (First Lien Term Loan) | Service | L + 450 | 1.00 | % | 4/18/2025 | 767,142 | 751,799 | (15,343 | ) | |||||||||||||||||
Endo Luxembourg Finance Company I S.a r.l. (First Lien Term Loan) | Healthcare | L + 425 | 0.75 | % | 4/27/2024 | 3,959,091 | 3,762,121 | (196,970 | ) | |||||||||||||||||
Envision Healthcare Corp. (First Lien Term Loan) | Healthcare | L + 375 | 0.00 | % | 10/10/2025 | 4,671,563 | 4,207,500 | (464,063 | ) | |||||||||||||||||
Granite Acquisition, Inc. (Second Lien Term Loan) | Utility | L + 725 | 1.00 | % | 12/19/2022 | 3,736,715 | 3,704,222 | (32,493 | ) | |||||||||||||||||
BW NHHC Holdco, Inc. (First Lien Term Loan) | Healthcare | L + 500 | 0.00 | % | 5/15/2025 | 4,537,384 | 3,420,139 | (1,117,245 | ) | |||||||||||||||||
Lanai Holdings II, Inc. (First Lien Term Loan) | Healthcare | L + 475 | 1.00 | % | 8/28/2022 | 2,449,958 | 2,300,085 | (149,873 | ) | |||||||||||||||||
Radnet Management Inc. (First Lien Term Loan) | L + 350 | 1.00 | % | 7/1/2023 | 1,492,721 | 1,485,331 | (7,390 | ) | ||||||||||||||||||
Sound Inpatient Physicians (First Lien Term Loan) | Healthcare | L + 675 | 0.00 | % | 6/28/2026 | 1,575,000 | 1,567,222 | (7,778 | ) | |||||||||||||||||
Truck Hero, Inc. (Second Lien Term Loan) | Manufacturing | L + 825 | 1.00 | % | 4/21/2025 | 1,666,667 | 1,583,333 | (83,334 | ) | |||||||||||||||||
Vyaire Medical, Inc. (First Lien Term Loan) | Healthcare | L + 475 | 1.00 | % | 4/30/2025 | 4,794,592 | 4,295,155 | (499,437 | ) | |||||||||||||||||
Weight Watchers International, Inc. (First Lien Term Loan) | Service | L + 475 | 0.75 | % | 11/29/2024 | 4,880,859 | 4,802,152 | (78,707 | ) | |||||||||||||||||
|
| |||||||||||||||||||||||||
Total | $ | (3,005,149 | ) | |||||||||||||||||||||||
|
| |||||||||||||||||||||||||
| Accrued income and liabilities | | 260,107 | |||||||||||||||||||||||
|
| |||||||||||||||||||||||||
| Total TRS Fair Value | | $ | (2,745,042 | ) | |||||||||||||||||||||
|
|
|
As of December 31, 2020 and December 31, 2019, the Company had posted $0 and $21,400,000, respectively, of cash collateral against the TRS held in an account at the Company’s custodian bank, which is shown as due from counterparty on the Statements of Assets and Liabilities.
During the year ended December 31, 2020, the Company recognized a net realized loss on the TRS amounting to $6,929,996. The realized losses of the derivative instruments during the year ended December 31, 2020 serve as indicators of the volume of derivative activity for the Company. The Company received $483,581 in cash payments from the TRS during the period and paid $7,425,035, with a decrease of $11,458 in payable from BNP Paribas for the year ended December 31, 2020. During the year ended December 31, 2020, the Company recognized a $2,745,042 change in unrealized gain on the TRS.
As a result of decreases in the market value of certain of the Company’s assets pledged at derivative counterparties, the Company was required to post additional collateral relating to its margin requirements. The Company experienced delays posting collateral with one counterparty and received an Event of Default notice dated March 23, 2020; however, the Company covered the margin call on March 24, 2020 and received a formal waiver on the Event of Default notice from the counterparty dated April 2, 2020.
Note 8 — Economic Dependency and Commitments and Contingencies
2023.
commitments.
concentrated in relatively few portfolio companies. As a result, the aggregate returns the Company realizes may be significantly adversely affected if a small number of investments perform poorly or if the Company needs to write down the value of any one investment. Additionally, the Company’s investments may be concentrated in relatively few industries. As a result, a downturn in any particular industry in which the Company is invested could also significantly impact the aggregate returns realized.
material nonpublic information and, because of prohibitions on trading in securities of issuers while in possession of such information, the Company may be unable to enter into a transaction in a publicly-tradedpublicly-
a credit facility.
On July 27, 2017,duration Recent and potential future changes in government monetary policy may affect the headlevel of the United Kingdom’s Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. Please refer to “LIBOR Transition and Associated Risk” for more information.
interest rates.
repatriation taxes imposed by certain countries in which they invest. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued based upon net investment income, net realized gains and net unrealized appreciation as income and/or capital gains are earned.
LIBOR Transition
LIBOR is
Certain instrumentssecurities held by the Company pay an interest rate based on the London Interbank Offered Rate (LIBOR), which is the average offered rate for various maturities of short-term loans between certain major international banks. LIBOR is expected to be phased out by the end of 2021. While the effect of the phase out cannot yet be determined, it may result in, among other things, increased volatility or illiquidity in markets for instruments based on LIBOR and changes in the value of such instruments. However, the outbreak of COVID-19Funds may adversely impactaffect the timing of transition planning,Funds and we continue to assessits shareholders, including by causing losses for the potential impact of the COVID-19 outbreak on our transition plans. Although, at this time, it is not possible to predict the effect of any such changes, any establishment of alternative reference rates, whether the COVID-19 outbreak will have further effect on LIBOR transition timelinesFunds or plans, or other reforms to LIBOR that may be enacted in the United States, United Kingdom or elsewhere.
Due to manipulation allegations in 2012 and reduced activity in the financial markets that it measures, in July 2017, the Financial Conduct Authority (the “FCA”), the United Kingdom financial regulatory body, announced a desire to phase out the use of LIBOR by the end of 2021. As a result, plans are underway to phase out the use of LIBOR by the end of 2021. Although the period from the FCA announcement until the end of 2021 is generally expected to be enough time for market participants to transition to the use of a different benchmark for new securities and transactions, there remains uncertainty regarding the future utilization of LIBOR and the specific replacement rate or rates. As such, the potential effect of a transition away from LIBOR on aimpairing Fund or the financial instruments utilized by a Fund cannot yet be determined. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR. The transition may also result in a change in (i) the value of certain instruments held by a Fund, (ii) the cost of temporary borrowing for a Fund, or (iii) the effectiveness of related Fund transactions such as hedges, as applicable. When LIBOR is discontinued, the LIBOR replacement rate may be lower than market expectations, which could have an adverse impact on the value of preferred and debt-securities with floating or fixed-to-floating rate coupons. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses to adversely impact a Fund. Since the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
performance.
LIBOR is the average offered rate for various maturities
Valuation Risk
Certain
medical telemetry service (“WMTS”) during a 39-month period. Upon satisfaction of the deployment milestones, TerreStar will be able use such spectrum for other services besides WMTS as long as those services do not interfere with WMTS and TerreStar continues to provide WMTS.
If TerreStar is unsuccessful in satisfying such deployment milestones, or if other services cannot be implemented in a manner that does not interfere with WMTS, the value of the TerreStar equity would likely be materially negatively impacted. In determining the fair value of TerreStar, the Adviser has assigned a high probability of success on both conditions based on consultation with the company and its consultants.
| Shares at December 31, 2019 | Fair value as of December 31, 2019 | Transfers in (at cost) | Purchases | Sales | Realized gains (losses) | Change in unrealized appreciation/ (depreciation) | Fair value as of December 31, 2020 | Shares at December 31, 2020 | Affiliated Dividend income | ||||||||||||||||||||||||||||||
NexPoint Strategic Opportunities Fund | 120,633 | $ | 2,136,410 | $ | — | $ | — | $ | (976,094 | ) | $ | (1,443,373 | ) | $ | 283,057 | $ | — | — | $ | 54,253 | ||||||||||||||||||||
NexPoint Residential Trust, Inc. | 26,466 | 1,190,970 | — | 38,138 | (171,125 | ) | (7,736 | ) | (92,349 | ) | 957,898 | 22,640 | 5,922 | |||||||||||||||||||||||||||
NexPoint Capital REIT, LLC(1) | 100 | 2,425,989 | — | — | (2,189,561 | ) | — |
| (8,213 | ) | 228,215 | 100 | 124,322 | |||||||||||||||||||||||||||
NexPoint Real Estate Finance, LLC | — | — | — | 6,312,618 | (6,312,618 | ) | — | — | — | — | 301,921 | |||||||||||||||||||||||||||||
NexPoint Real Estate Finance Operating Partnership, LP | — | — | — | 6,312,618 | — | — | (1,098,395 | ) | 5,214,223 | 315,631 | 126,252 | |||||||||||||||||||||||||||||
SFR WLIF III, LLC | — | — | 1,651,112 | — | — | — | (157,483 | ) | 1,493,629 | 1,651,112 | 82,295 | |||||||||||||||||||||||||||||
SFR WLIF II, LLC | — | — | 3,348,888 | — | — | — | (605,914 | ) | 2,742,974 | 3,348,888 | 270,909 | |||||||||||||||||||||||||||||
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Total affiliated investments | 147,199 | $ | 5,753,369 | $ | 5,000,000 | $ | 12,663,374 | $ | (9,649,398 | ) | $ | (1,451,109 | ) | $ | (1,679,297 | ) | $ | 10,636,939 | 5,338,371 | $ | 965,874 | |||||||||||||||||||
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Affiliated investments | Shares at December 31, 2022 | Fair value as of December 31, 2022 | Purchases | Sales (1) | Realized gains (losses) | Change in unrealized appreciation (depreciation) | Fair value as of December 31, 2023 | Shares at December 31, 2023 | Affiliated Dividend income | |||||||||||||||||||||||||||
NexPoint Residential Trust, Inc. | 23,409 | $ | 1,018,779 | $ | — | $ | 3,048 | $ | 52,401 | $ | (215,840 | ) | $ | 805,987 | 23,409 | $ | (9,033 | ) | ||||||||||||||||||
NexPoint Capital REIT, LLC (Common Stocks) | 100 | 1,176,024 | 7,448,085 | (244,193 | ) | — | (1,365,142 | ) | 7,014,774 | 737 | 572,121 | |||||||||||||||||||||||||
NexPoint Capital REIT, LLC (Senior Loans) | — | — | 463,314 | — | — | — | 463,314 | 463,314 | — | |||||||||||||||||||||||||||
NexPoint Real Estate Finance, Inc. | 481,670 | 7,653,730 | — | (7,481,124 | ) | 16,308 | 1,901,191 | 2,073,797 | 131,670 | 231,424 | ||||||||||||||||||||||||||
SFR WLIF III, LLC | 451,112 | 424,468 | (1 | ) | (80,000 | ) | — | (5,494 | ) | 338,973 | 371,112 | 43,327 | ||||||||||||||||||||||||
Total affiliated investments | 956,291 | $ | 10,273,001 | $ | 7,911,398 | $ | (7,802,269 | ) | $ | 68,709 | $ | 314,715 | $ | 10,696,845 | 1,453,556 | $ | 837,839 | |||||||||||||||||||
(1) | The |
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For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | For the Year Ended December 31, 2018 | For the Year Ended December 31, 2017 | For the Year Ended December 31, 2016 | ||||||||||||||||
Common shares per share operating performance: |
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Net asset value, beginning of period | $ | 8.53 | $ | 8.36 | $ | 9.68 | $ | 9.47 | $ | 8.02 | ||||||||||
Income from investment operations: |
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Net investment income(1) | 0.24 | 0.30 | 0.36 | 0.59 | 0.69 | |||||||||||||||
Net realized and unrealized gain (loss) | (2.22 | ) | 0.59 | (0.96 | ) | 0.32 | 1.25 | |||||||||||||
Commitments by affiliates | — | — | — | — | 0.18 | |||||||||||||||
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Total from investment operations | (1.98 | ) | 0.89 | (0.60 | ) | 0.91 | 2.12 | |||||||||||||
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Less distribution declared to common shareholders: |
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From net investment income | (0.42 | ) | (0.60 | ) | (0.73 | ) | (0.72 | ) | (0.71 | ) | ||||||||||
From net realized gains | — | (0.12 | ) | — | — | — | ||||||||||||||
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Total distributions declared to common shareholders | (0.42 | ) | (0.72 | ) | (0.73 | ) | (0.72 | ) | (0.71 | ) | ||||||||||
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Capital share transactions |
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Issuance of common stock(2) | — | — | 0.01 | 0.02 | 0.04 | |||||||||||||||
Shares tendered(1) | — | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | 0.00 | (3) | |||||||||||
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Net asset value, end of period | $ | 6.13 | $ | 8.53 | $ | 8.36 | $ | 9.68 | $ | 9.47 | ||||||||||
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Net asset value total return(4) | (23.17 | )% | 10.86 | % | (6.75 | )% | 10.06 | % | 27.61 | %(5) | ||||||||||
Ratio and supplemental data: |
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Net assets, end of period (in 000’s) | $ | 64,190 | $ | 88,936 | $ | 86,311 | $ | 94,860 | $ | 67,293 | ||||||||||
Shares outstanding, end of period | 10,475,168 | 10,425,431 | 10,322,327 | 9,804,321 | 7,102,226 | |||||||||||||||
Common share information at end of period: |
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Ratios based on weighted average net assets of common shares: |
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Gross operating expenses | 3.99 | % | 5.36 | % | 4.32 | % | 5.21 | % | 7.56 | % | ||||||||||
Fees and expenses waived or reimbursed | (0.54 | )% | (0.16 | )% | (0.43 | )% | (2.37 | )% | (4.56 | )% | ||||||||||
Net operating expenses | 3.45 | % | 5.20 | % | 3.89 | % | 2.84 | % | 3.00 | % | ||||||||||
Net investment income (loss) before fees waived or reimbursed | 3.41 | % | 3.33 | % | 3.28 | % | 3.80 | % | 2.98 | % | ||||||||||
Net investment income (loss) after fees waived or reimbursed | 3.95 | % | 3.50 | % | 3.71 | % | 6.17 | % | 7.54 | % | ||||||||||
Ratio of interest and credit facility expenses to average net assets | 0.27 | % | 1.37 | % | 0.76 | % | 0.13 | % | 0.36 | % | ||||||||||
Ratio of incentive fees to average net assets(6)(7) | — | % | — | % | (0.60 | )% | 0.51 | % | 0.40 | % | ||||||||||
Portfolio turnover rate | 83 | % | 42 | % | 55 | % | 113 | % | 60 | % | ||||||||||
Asset coverage ratio | — | % | 241 | % | 227 | % | 304 | % | 701 | % | ||||||||||
Weighted average commission rate paid(8) | $ | 0.0328 | $ | 0.0331 | $ | 0.0380 | $ | 0.0225 | $ | 0.0094 |
For the Year Ended December 31, 2023 | For the Year Ended December 31, 2022 | For the Year Ended December 31, 2021 | For the Year Ended December 31, 2020 | For the Year Ended December 31, 2019 | ||||||||||||||||
Common shares per share operating performance: | ||||||||||||||||||||
Net asset value, beginning of period | $ | 5.55 | $ | 6.32 | $ | 6.13 | $ | 8.53 | $ | 8.36 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (1) | 0.17 | 0.18 | 0.19 | 0.24 | 0.30 | |||||||||||||||
Net realized and unrealized gain (loss) | (0.02 | ) | (0.59 | ) | 0.37 | (2.22 | ) | 0.59 | ||||||||||||
Total from investment operations | 0.15 | (0.41 | ) | 0.56 | (1.98 | ) | 0.89 | |||||||||||||
Less distribution declared to common shareholders: | ||||||||||||||||||||
From net investment income | (0.18 | ) | (0.16 | ) | (0.37 | ) | (0.42 | ) | (0.60 | ) | ||||||||||
From net realized gains | — | — | — | — | (0.12 | ) | ||||||||||||||
From return of capital | (0.18 | ) | (0.20 | ) | — | — | — | |||||||||||||
Total distributions declared to common shareholders | (0.36 | ) | (0.36 | ) | (0.37 | ) | (0.42 | ) | (0.72 | ) | ||||||||||
Capital share transaction | ||||||||||||||||||||
Issuance of common stock (2) | — | — | — | — | — | |||||||||||||||
Shares tendered (1) | — | (3) | — | — | (3) | — | (3) | — | (3) | |||||||||||
Net asset value, end of period | $ | 5.35 | $ | 5.55 | $ | 6.32 | $ | 6.13 | $ | 8.53 | ||||||||||
Net asset value total return (4) | 3.20 | % | (6.65 | )% | 9.12 | % | (23.17 | )% | 10.86 | % | ||||||||||
Ratio and supplemental data: | ||||||||||||||||||||
Net assets, end of period (in 000’s) | $ | 49,810 | $ | 53,694 | $ | 62,939 | $ | 64,190 | $ | 88,936 | ||||||||||
Shares outstanding, end of period | 9,309,405 | 9,677,593 | 9,956,228 | 10,475,168 | 10,425,431 | |||||||||||||||
Common share information at end of period: | ||||||||||||||||||||
Ratios based on weighted average net assets of common shares: | ||||||||||||||||||||
Gross operating expenses | 4.12 | % | 3.82 | % | 3.78 | % | 3.99 | % | 5.36 | % | ||||||||||
Fees and expenses waived or reimbursed | (0.83 | )% | (0.63 | )% | (0.45 | )% | (0.54 | )% | (0.16 | )% | ||||||||||
Net operating expenses | 3.20 | % | 3.19 | % | 3.33 | % | 3.45 | % | 5.20 | % | ||||||||||
Net investment income (loss) before fees waived or reimbursed | 2.40 | % | 2.43 | % | 2.50 | % | 3.41 | % | 3.33 | % | ||||||||||
Net investment income (loss) after fees waived or reimbursed | 3.22 | % | 3.06 | % | 2.95 | % | 3.95 | % | 3.50 | % | ||||||||||
Ratio of interest and credit facility expenses to average net assets | — | % | — | % | — | % | 0.27 | % | 1.37 | % | ||||||||||
Portfolio turnover rate | 9 | % | 16 | % | 13 | % | 83 | % | 42 | % | ||||||||||
Asset coverage ratio | — | % | — | % | — | % | — | % | 241 | % | ||||||||||
Weighted average commission rate paid (5) | $ | — | $ | — | $ | — | $ | 0.0328 | $ | 0.0331 |
(1) | Per share data was calculated using weighted average shares outstanding during the period. |
(2) | The continuous issuance of common stock may cause an incremental increase in net asset value per share due to the sale of shares at the then prevailing public offering price and the receipt of net proceeds per share |
by the Company in excess of net asset value per share on each subscription closing date. The per share data was derived by computing (i) the sum of (A) the number of shares issued in connection with subscriptions and/or distribution reinvestment on each share transaction date times (B) the differences between the net proceeds per share and the net asset value per share on each share transaction date, divided by (ii) the total shares outstanding at the end of the period. The Company’s continuous public offering ended on February 14, 2018. |
(3) | Amount rounds to less than $0.005 per share. |
(4) | Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions, and assume no sales charge. Distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Company’s Dividend Reinvestment Plan. Had the Adviser not absorbed a portion of expenses, total returns would have been lower. |
(5) |
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Represents the total dollar amount of commissions paid on portfolio transactions divided by total number of portfolio shares purchased and sold for which commissions were charged. |
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Quarter ended | ||||||||||||||||
December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | |||||||||||||
Total investment income | $ | 879,937 | $ | 1,119,639 | $ | 1,104,672 | $ | 1,708,934 | ||||||||
Total investment income per common share | 0.09 | 0.11 | 0.10 | 0.16 | ||||||||||||
Net investment income | 283,131 | 694,133 | 636,915 | 954,750 | ||||||||||||
Net investment income per common share | 0.02 | 0.07 | 0.06 | 0.09 | ||||||||||||
Net realized and unrealized gain (loss) | 2,382,200 | 1,957,963 | 7,947,407 | (35,755,777 | ) | |||||||||||
Net realized and unrealized gain (loss) per common share | 0.26 | 0.18 | 0.75 | (3.41 | ) | |||||||||||
Net increase (decrease) in net assets resulting from operations | 2,665,331 | 2,652,096 | 8,584,322 | (34,801,027 | ) | |||||||||||
Basic and diluted earnings (loss) per common share | 0.28 | 0.25 | 0.81 | (3.32 | ) | |||||||||||
Net asset value per common share at end of quarter | 6.13 | 5.96 | 5.80 | 5.05 |
Quarter ended | ||||||||||||||||
December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | |||||||||||||
Total investment income | $ | 1,838,426 | $ | 1,979,996 | $ | 2,040,664 | $ | 1,988,407 | ||||||||
Total investment income per common share | 0.18 | 0.19 | 0.20 | 0.19 | ||||||||||||
Net investment income | 717,956 | 731,993 | 876,514 | 830,213 | ||||||||||||
Net investment income per common share | 0.07 | 0.07 | 0.08 | 0.08 | ||||||||||||
Net realized and unrealized gain (loss) | 368,975 | 1,061,490 | (577,223 | ) | 5,180,977 | |||||||||||
Net realized and unrealized gain (loss) per common share | 0.04 | 0.10 | (0.06 | ) | 0.50 | |||||||||||
Net increase (decrease) in net assets resulting from operations | 1,086,931 | 1,793,483 | 299,291 | 6,011,190 | ||||||||||||
Basic and diluted earnings (loss) per common share | 0.10 | 0.17 | 0.03 | 0.58 | ||||||||||||
Net asset value per common share at end of quarter | 8.53 | 8.61 | 8.62 | 8.77 |
Quarter ended | ||||||||||||||||
December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||
Total investment income | $ | 540,182 | $ | 1,058,773 | $ | 918,436 | $ | 814,832 | ||||||||
Total investment income per common share | 0.06 | 0.11 | 0.10 | 0.08 | ||||||||||||
Net investment income | 109,719 | 681,628 | 512,066 | 363,521 | ||||||||||||
Net investment income per common share | 0.01 | 0.07 | 0.05 | 0.04 | ||||||||||||
Net realized and unrealized gain (loss) | 1,732,521 | 22,833 | (627,003 | ) | (1,341,338 | ) | ||||||||||
Net realized and unrealized gain (loss) per common share | 0.19 | 0.00 | (0.07 | ) | (0.14 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | 1,842,240 | 704,461 | (114,937 | ) | (977,817 | ) | ||||||||||
Basic and diluted earnings (loss) per common share | 0.19 | 0.07 | (0.01 | ) | (0.10 | ) | ||||||||||
Net asset value per common share at end of quarter | 5.35 | 5.24 | 5.26 | 5.36 | ||||||||||||
Quarter ended | ||||||||||||||||
December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||
Total investment income | $ | 584,515 | $ | 993,592 | $ | 1,099,896 | $ | 1,014,610 | ||||||||
Total investment income per common share | 0.06 | 0.10 | 0.11 | 0.10 | ||||||||||||
Net investment income | 113,631 | 555,608 | 629,257 | 491,122 | ||||||||||||
Net investment income per common share | 0.01 | 0.06 | 0.06 | 0.05 | ||||||||||||
Net realized and unrealized gain (loss) | 257,082 | (3,208,231 | ) | (3,557,538 | ) | 653,895 | ||||||||||
Net realized and unrealized gain (loss) per common share | 0.03 | (0.32 | ) | (0.36 | ) | 0.07 | ||||||||||
Net increase (decrease) in net assets resulting from operations | 370,713 | (2,652,623 | ) | (2,928,281 | ) | 1,145,017 | ||||||||||
Basic and diluted earnings (loss) per common share | 0.04 | (0.27 | ) | (0.29 | ) | 0.11 | ||||||||||
Net asset value per common share at end of quarter | 5.55 | 5.60 | 5.96 | 6.35 |
The Adviser has entered into a Services Agreement with Skyview Group, Inc. (“Skyview”), effective February 25, 2021, pursuant to which the Adviser will receive administrative and operational support services to enable it to provide the required advisory services to the Company. The Adviser will compensate all Adviser and Skyview personnel who provide services to the Company.
Consolidated Statements of Asset and Liabilities (including the Consolidated Schedules of Investments) | Consolidated Statements of Operations, Changes in Net Assets, and Cash Flows | |
As of December 31, 2023 and 2022* | For the years ended December 31, 2023, 2022*, and 2021* |
Matters
they relate.
Report
Item 9. |
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On June 8, 2020, the Company dismissed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm, effective on such date. The decision to dismiss PwC was approved by the audit committee and by the full Board. On June 18, 2020, the Company approved the appointment
Item 9A. |
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As of the period covered by this report, we, including our president and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Ruleand subject to the foregoing, our president and chief financial officer concluded that the Company’sour disclosure controls and procedures were effective.
Remediation of Material Weaknesses in Internal Control over Financial Reporting
As of December 31, 2020, Management remediated the material weakness previously identified as of December 31, 2019 relating to the application of fair value accounting with respect to the validation of fair value methodologies. Specifically, the controls were not sufficiently designed to ensure the appropriateness of the fair value determinations reached for Level 3 real estate-related holdings. While this control deficiency did not result in a misstatement, it could have resulted in a misstatement to the investment balances or disclosures that would have resulted in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Management remediated the material weakness by designating a member of the Adviser’s Valuation Committee to monitor and report to the Valuation Committee to ensure that for significant real estate-related holdings, fair values for such holdings are validated through one or more other valuation techniques that are acceptable under ASC 820.
As a result of the remediation activities, Management has determined that Management’s controls were designed appropriately and at a sufficient level of precision, and have been operating effectively for a sufficient period of time, such that the material weakness previously identified as of December 31, 2019 has been remediated as of December 31, 2020.
Item |
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Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15: | Exhibits |
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* | Filed herewith |
Item 16. | Form 10–K Summary |
NEXPOINT CAPITAL, INC. | ||||||
Date: March | By: | /s/ Frank Waterhouse | ||||
Name: | Frank Waterhouse | |||||
Title: | Treasurer, Chief Accounting Officer and Principal Financial Officer |
Signature | Title | Date | ||
/s/ James D. Dondero James D. Dondero | President (Principal Executive Officer) | March | ||
/s/ Frank Waterhouse Frank Waterhouse | Chief Financial Officer (Treasurer, Principal Accounting Officer and Principal Financial Officer) | March | ||
/s/ Dr. Bob Froehlich Dr. Bob Froehlich | Director | March | ||
/s/ John Honis John Honis | Director | March | ||
/s/ Ethan Powell Ethan K. Powell | Director | March | ||
/s/ Bryan A. Ward Bryan A. Ward | Director | March | ||
/s/ Pamela Corrie Pamela Corrie | Director | March 28, 2024 |
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