x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2022
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 83-0423116 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
1521 Westbranch Drive, Suite 100 McLean, Virginia | 22102 | |||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
Common Stock, $0.001 par value per share | GAIN | |||||||||||||
| The Nasdaq Stock Market LLC | |||||||||||||
5.00% Notes due 2026 | GAINN | The Nasdaq Stock Market LLC | ||||||||||||
4.875% Notes due 2028 | GAINZ | The Nasdaq Stock Market LLC |
Large accelerated filer | o | Accelerated filer | ||||||||||||
o | ||||||||||||||
Non-accelerated filer | x | Smaller reporting company | ||||||||||||
o | ||||||||||||||
Emerging growth company | o |
2022.
ITEM 4 | ||||||||||||||||
ITEM 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | |||||||||||||||
|
6.375% Series E Cumulative Term Preferred Stock (“Series E Term Preferred Stock”), and our 5.00% Notes due 2026 (“2026 Notes”) and our 4.875% Notes due 2028 (“2028 Notes”) are traded on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbols “GAIN,” “GAINL,”“GAINN” and “GAINN,“GAINZ,” respectively.
assets by investing in equity securities of established businesses, generally in combination with the aforementioned debt securities, that we believe can grow over time to permit us to sell our equity investments for capital gains. To achieve our investment objectives, our investment strategy is to invest
We expect that our investment portfolio will continue to primarily include the following three categories of investments in private companies in the U.S.:
|
|
|
•We will at all times conduct our business so as to retain our status as a BDC. See “—Regulation as a BDC — Qualifying Assets.” • |
We will at all times endeavor to conduct our business so as to retain our status as a RIC under the Code. To do so, we must maintain our status as a BDC and meet income source, asset diversification and annual distribution requirements. We may issue senior securities, such as debt or preferred stock, to the extent permitted by the 1940 Act for the purpose of making investments, to fund share repurchases, or for temporary emergency or other purposes.
Investment Concentrations
March 31, 2021 | March 31, 2020 | |||||||||||||||||||||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||||||||||||||||||
Secured first lien debt | $ | 379,512 | 57.2 | % | $ | 368,688 | 58.2 | % | $ | 310,019 | 50.9 | % | $ | 308,248 | 54.5 | % | ||||||||||||||||
Secured second lien debt | 114,206 | 17.2 | 102,897 | 16.2 | 143,155 | 23.5 | 123,340 | 21.8 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total debt | 493,718 | 74.4 | 471,585 | 74.4 | 453,174 | 74.4 | 431,588 | 76.3 | ||||||||||||||||||||||||
Preferred equity | 166,361 | 25.1 | 159,478 | 25.2 | 152,998 | 25.1 | 119,849 | 21.2 | ||||||||||||||||||||||||
Common equity/equivalents | 3,484 | 0.5 | 2,766 | 0.4 | 3,410 | 0.5 | 14,487 | 2.5 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total equity/equivalents | 169,845 | 25.6 | 162,244 | 25.6 | 156,408 | 25.6 | 134,336 | 23.7 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total investments | $ | 663,563 | 100.0 | % | $ | 633,829 | 100.0 | % | $ | 609,582 | 100.0 | % | $ | 565,924 | 100.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021:
March 31, 2022 | March 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost | Fair Value | Cost | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||
Secured first lien debt | $ | 429,457 | 64.2 | % | $ | 425,087 | 59.5 | % | $ | 379,512 | 57.2 | % | $ | 368,688 | 58.2 | % | |||||||||||||||||||||||||||||||
Secured second lien debt | 81,147 | 12.1 | % | 67,958 | 9.5 | % | 114,206 | 17.2 | % | 102,897 | 16.2 | % | |||||||||||||||||||||||||||||||||||
Total debt | 510,604 | 76.3 | % | 493,045 | 69.0 | % | 493,718 | 74.4 | % | 471,585 | 74.4 | % | |||||||||||||||||||||||||||||||||||
Preferred equity | 143,079 | 21.4 | % | 217,599 | 30.5 | % | 166,361 | 25.1 | % | 159,478 | 25.2 | % | |||||||||||||||||||||||||||||||||||
Common equity/equivalents | 15,565 | 2.3 | % | 3,752 | 0.5 | % | 3,484 | 0.5 | % | 2,766 | 0.4 | % | |||||||||||||||||||||||||||||||||||
Total equity/equivalents | 158,644 | 23.7 | % | 221,351 | 31.0 | % | 169,845 | 25.6 | % | 162,244 | 25.6 | % | |||||||||||||||||||||||||||||||||||
Total investments | $ | 669,248 | 100.0 | % | $ | 714,396 | 100.0 | % | $ | 663,563 | 100.0 | % | $ | 633,829 | 100.0 | % |
March 31, 2021 | March 31, 2020 | |||||||||||||||
Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | |||||||||||||
Diversified/Conglomerate Services | $ | 261,714 | 41.3 | % | $ | 226,805 | 40.1 | % | ||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products | 94,663 | 15.0 | 83,705 | 14.8 | ||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) | 60,852 | 9.6 | 34,865 | 6.2 | ||||||||||||
Leisure, Amusement, Motion Pictures, Entertainment | 45,209 | 7.1 | 35,240 | 6.2 | ||||||||||||
Healthcare, Education, and Childcare | 31,194 | 4.9 | 25,563 | 4.5 | ||||||||||||
Aerospace and Defense | 27,630 | 4.4 | 26,158 | 4.6 | ||||||||||||
Diversified/Conglomerate Manufacturing | 25,181 | 4.0 | 28,147 | 5.0 | ||||||||||||
Chemicals, Plastics, and Rubber | 22,985 | 3.6 | 16,737 | 3.0 | ||||||||||||
Telecommunications | 15,582 | 2.5 | 15,792 | 2.8 | ||||||||||||
Beverage, Food, and Tobacco | 15,519 | 2.4 | 12,545 | 2.2 | ||||||||||||
Cargo Transport | 15,211 | 2.4 | 13,316 | 2.4 | ||||||||||||
Machinery (Non-agriculture, Non-construction, and Non-electronic) | 14,199 | 2.2 | 23,091 | 4.1 | ||||||||||||
Containers, Packaging, and Glass | — | — | 20,360 | 3.6 | ||||||||||||
Other < 2.0% | 3,890 | 0.6 | 3,600 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments | $ | 633,829 | 100.0 | % | $ | 565,924 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
March 31, 2022 | March 31, 2021 | ||||||||||||||||||||||
Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||
Diversified/Conglomerate Services | $ | 307,403 | 43.0 | % | $ | 261,714 | 41.3 | % | |||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products | 125,440 | 17.6 | % | 94,663 | 15.0 | % | |||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment | 46,514 | 6.5 | % | 45,209 | 7.1 | % | |||||||||||||||||
Healthcare, Education, and Childcare | 39,252 | 5.5 | % | 31,194 | 4.9 | % | |||||||||||||||||
Hotels, Motels, Inns, and Gaming | 37,923 | 5.3 | % | — | — | % | |||||||||||||||||
Telecommunications | 32,467 | 4.6 | % | 15,582 | 2.5 | % | |||||||||||||||||
Chemicals, Plastics, and Rubber | 26,618 | 3.7 | % | 22,985 | 3.6 | % | |||||||||||||||||
Aerospace and Defense | 25,296 | 3.5 | % | 27,630 | 4.4 | % | |||||||||||||||||
Mining, Steel, Iron and Non-Precious Metals | 24,250 | 3.4 | % | — | — | % | |||||||||||||||||
Cargo Transport | 14,533 | 2.0 | % | 15,211 | 2.4 | % | |||||||||||||||||
Diversified/Conglomerate Manufacturing | 14,064 | 2.0 | % | 25,181 | 4.0 | % | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) | 13,823 | 1.9 | % | 14,199 | 2.2 | % | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) | 5,315 | 0.8 | % | 60,852 | 9.6 | % | |||||||||||||||||
Beverage, Food, and Tobacco | — | — | % | 15,519 | 2.4 | % | |||||||||||||||||
Other < 2.0% | 1,498 | 0.2 | % | 3,890 | 0.6 | % | |||||||||||||||||
Total investments | $ | 714,396 | 100.0 | % | $ | 633,829 | 100.0 | % |
March 31, 2021 | March 31, 2020 | |||||||||||||||
Location | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||
South | $ | 182,529 | 28.8 | % | $ | 182,178 | 32.2 | % | ||||||||
Northeast | 163,938 | 25.9 | 146,434 | 25.9 | ||||||||||||
West | 160,581 | 25.3 | 90,214 | 15.9 | ||||||||||||
Midwest | 126,781 | 20.0 | 147,098 | 26.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments | $ | 633,829 | 100.0 | % | $ | 565,924 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
2021:
March 31, 2022 | March 31, 2021 | |||||||||||||||||||||||||
Location | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||||
Northeast | $ | 194,100 | 27.2 | % | $ | 163,938 | 25.9 | % | ||||||||||||||||||
South | 188,978 | 26.4 | % | 182,529 | 28.8 | % | ||||||||||||||||||||
Midwest | 172,711 | 24.2 | % | 126,781 | 20.0 | % | ||||||||||||||||||||
West | 158,607 | 22.2 | % | 160,581 | 25.3 | % | ||||||||||||||||||||
Total investments | $ | 714,396 | 100.0 | % | $ | 633,829 | 100.0 | % |
|
|
|
|
|
•Experienced Management: We typically require that the companies in which we invest have experienced management teams or a hiring plan in place to install an experienced management team. We also require the companies to have in place proper incentives to induce management to succeed and act in concert with our interests as an investor, including having significant equity or other interests in the financial performance of their companies.
•A review of the prospective portfolio company’s historical and projected financial information, including a quality of earnings analysis;
•Visits to the prospective portfolio company’s business site(s) and evaluation of potential environmental issues;
•Interviews with the prospective portfolio company’s management, employees, customers and vendors;
•Review of loan documents and material contracts;
•Background checks and a management capabilities assessment on the prospective portfolio company’s management team; and
•Research, including market analyses, on the prospective portfolio company’s products, services or particular industry and its competitive position therein.
•Making investments with an expected total return (including interest, yield enhancements and potential equity appreciation) that it believes compensates us for the credit risk of the investment;
•Seeking collateral or superior positions in the portfolio company’s capital structure where possible;
•Incorporating put and call protection rights into the investment structure where possible;
•Negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility as possible in managing their businesses, while also preserving our capital; and
•Holding board seats or securing board observation rights at the portfolio company.
Disciplined, Value- and Income-Oriented Investment Philosophy with a Focus on Preservation of Capital
•Focusing on companies with attractive and sustainable market positions and cash flow;
•Investing in companies with experienced and established management teams;
•Engaging in extensive due diligence from the perspective of a long-term investor;
•Investing at low price-to-cash flow multiples; and
•Adopting flexible transaction structures by drawing on the experience of the investment professionals of the Adviser and its affiliates.
markets.aan exchange-traded corporation of perpetual duration and are exchange-traded.duration. We believe that our flexibility to make investments with a long-term view and without the capital return requirements of traditional private investment vehicles provides us with the opportunity to achieve greater long-term returns on invested capital.markets, such as the current COVID-19 pandemic.
Monitoring
Monthly•monthly analysis of financial and operating performance;
Frequent•frequent assessment of the portfolio company’s performance against its business plan and our investment expectations;
Attendance•attendance at and/or participation in the portfolio company’s board of directors or management meetings;
Continuous •assessment of portfolio company management, governance and strategic direction;
Continuous •assessment of the portfolio company’s industry and competitive environment; and
Frequent •review and assessment of the portfolio company’s operating outlook and financial projections.
Management;
Boards•boards of directors;
Financial•financial sponsors;
Capital•capital partners;
Auditors;•auditors; and
Advisers•advisers and consultants.
Gladstone Securities also provides other services (such as investment banking and due diligence services) to certain of our portfolio companies and receives fees for the provision of such services, see “—Transactions with Related Parties – Other Transactions” below.
•Each investment is initially assessed by the Valuation Team using the Policy, which may include:
Obtaining•obtaining fair value quotes or utilizing valuation inputs from third party valuation firms; and
Using•using techniques, such as total enterprise value, yield analysis, market quotes and other factors, including: the nature and realizable value of the collateral, including external parties’ guaranties; any relevant offers or letters of intent to acquire the portfolio company; timing of expected repayments; and the markets in which the portfolio company operates.
•Preliminary valuation conclusions are then discussed amongst the Valuation Team and with our management and documented for review by our Board of Directors. Written valuation recommendations and supporting material are sent to the Board of Directors in advance of the quarterly meetings.
•The Valuation Committee of the Board of Directors (comprised entirely of independent directors) meets to review the valuation recommendations and supporting materials, discusses the information provided by the Valuation Team, determines whether the Valuation Team has followed the Policy, determines whether the Valuation Team’s recommended fair value is reasonable in light of the Policy, and reviews other facts and circumstances. Then, the Valuation Committee and chief valuation officer present the Valuation Committee’s findings to the entire Board of Directors, so that the full Board of Directors may review and determine in good faith the fair value of investments in accordance with the Policy.
repurchases during the period (the “Hurdle Rate”). The income-based incentive fee with respect to our pre-incentive fee net investment income is payable quarterly to the Adviser and is computed as follows:
•No incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the Hurdle Rate;
•100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Rate but is less than 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter; and
orand paid to the Adviser. During the year ended March 31, 2020, capital gains-based incentive fees of $8.1 million were contractually due and paid to the Adviser, which was the first payment of a capital gains-based incentive fee since our inception.
if any, less (iii) cumulative aggregate realized capital losses since our inception, less (iv) the entire portfolio’s aggregate unrealized capital depreciation, if any. If such amount is positive at the end of a reporting period, a capital gains-based incentive fee equal to 20.0% of such amount, less the aggregate amount of capital gains-based incentive fees accrued in all prior years, is recorded, regardless of whether such amount is contractually due under the terms of the Advisory Agreement. If such amount is negative, then there is no accrual for such period and prior period accruals are reversed, as appropriate. During the yearyears ended March 31, 2022 and 2021, we recorded capital gains-based incentive fees of $18.3 million and $5.0 million.million, respectively. During the year ended March 31, 2020, we recorded a reversal of capital gains-based incentive fees of $6.7 million. During the year ended March 31, 2019, we recorded capital gains-based incentive fees of $17.8 million.
2022.
relevant to certain types of stockholders subject to special treatment under U.S. federal income tax laws. This summary does not discuss any aspect of state, local or foreign tax laws, or the U.S. estate or gift tax.
|
|
|
the calendar year and (iii) any income realized, but not distributed, in the preceding period (to the extent that income tax was not imposed on such amounts), less certain reductions, as applicable.applicable. For the calendar years ended December 31, 2021, 2020 2019 and 2018,2019, we incurred $0.7 million, $0.5 million $0.8 million and $0.3$0.8 million, respectively, in excise taxes. As of March 31, 2021,2022, our capital loss carryforward was $0.
2022.
a new holding period commencing on the day following the day on which the shares are credited to the common stockholder’s account. The plan agent purchases shares in the open market in connection with the obligations under the plan. We do not have a dividend reinvestment plan for our preferred stockholders.
The Foreign Account Tax Compliance Act imposes a U.S. federal withholding tax on certain types of payments made to “foreign financial institutions” and certain other non-U.S. entities unless certain due diligence, reporting, withholding, and certification obligation requirements are satisfied.
|
|
|
|
|
|
|
|
|
|
|
(1)Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer is an eligible portfolio company. An eligible portfolio company is generally defined in the 1940 Act as any issuer which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•Volatility in the capital markets may make it more difficult to raise capital and may adversely affect the valuations of our investments.
Governance— Governance – Governance Documents” at
Number of | Functional Area | |||||||
| Executive management | |||||||
| Accounting, administration, compliance, human resources, legal, and treasury | |||||||
| Investment management, portfolio management, and due diligence |
|
MarketChanges•changes in interest rates and credit spreads;
The•the availability of credit, including the price, terms and conditions under which it can be obtained;
The•the quality, pricing, and availability of suitable investments and losses with respect to our investments;
The•the ability to obtain accurate market-based valuations;
Investment•investment values relative to the value of the underlying assets;
Prepayment
Competition;
The•the impact of COVID-19 generally and on the economy, the capital markets and our portfolio companies, including the measures taken by governmental authorities to address it;
The•the actual and perceived state of the economy and public capital markets generally;
Amendments•amendments or repeals of legislation, or changes in regulations or regulatory interpretations thereof, and transitions of government, including uncertainty regarding any of the foregoing;
The•the national and global political environment, including foreign relations and trading policies;
The•the impact of potential changes to the Code; and
The•the attractiveness of other types of investments relative to investments in Lower Middle Market companies generally.
financial markets or deterioration in credit and financing conditions, including as a result of rising inflation, could have a material adverse effect on our business, financial condition, results of operations, and cash flows. In addition, significant changes in the capital markets have had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition, results of operations, or cash flows.
As of the date of this Annual Report, there is a continuing
Risks Related to Interest Rates
A changerate increases. Recent and future increases in interest rates could have a negative effect on our investments, which could negatively impact our operating results, financial condition, and cash flows.
floors.
As a result of concerns about the accuracy of the calculation of LIBOR, a number of British Bankers’ Association (the “BBA”) member banks entered into settlements with certain regulators and law enforcement agencies with respect to the alleged manipulation of LIBOR. Actions by the BBA, regulators or law enforcement agencies as a result of these or future events, may result in changes to the manner in which LIBOR is determined. Potential changes, or uncertainty related to such potential changes may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities and our borrowings. In addition, changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market for LIBOR-based securities or the value of our portfolio of LIBOR-indexed, floating-rate debt securities and our borrowings.
competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC. The competitive pressures we face could have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objectives. We do not seek to compete based on the interest rates we offer, and we believe that some of our competitors may make loans with interest rates that will be comparable to or lower than the rates we offer. We may lose investment opportunities if we do not match our competitors’ pricing, terms, and structure. However, if we match our competitors’ pricing, terms, and structure, we may experience decreased net interest income and increased risk of credit loss.
|
|
|
|
|
|
|
|
|
|
•Lower Middle Market businesses are likely to be more significantly impacted in economic downturns than larger businesses. Our portfolio companies may have fewer resources than larger businesses, and any economic downturns or recessions are more likely to have a material adverse effect on them. When the economy contracts, the financial results of Lower Middle Market businesses, like those in which we invest, could experience deterioration or limited growth from current levels, which could ultimately lead to difficulty in meeting their debt
value on generally all of our debt investments that are not valued using total enterprise value (“TEV”) and we use another independent valuation firm to provide valuation inputs for our significant equity investments, which are generally valued using TEV, including earnings multiple ranges, as well as other information. In addition to these techniques, inputs and information, other factors are considered when determining fair value of our investments, including: the nature and realizable value of the collateral, including external parties’ guaranties; any relevant offers or letters of intent to acquire the portfolio company; timing of expected loan repayments; and the markets in which the portfolio company operates. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policy — Investment Valuation” for additional information on our valuation policies, procedures, and processes.
Our financial results could be negatively affected if a significant portfolio investment fails to perform as expected.
number of such investments or a substantial write-down of any one investment, including rising inflation and the potential impact of the COVID-19 pandemic (or similar future public health emergencies). Beyond our regulatory and income tax diversification requirements, as well as Credit Facility requirements, we do not have fixed guidelines for industry concentration and our investments could potentially be concentrated in relatively few industries. In addition, while we do not intend to invest 25% or more of our total assets in a particular industry or group of industries at the time of investment, it is possible that as the values of our portfolio companies change, one industry or a group of industries may comprise in excess of 25% of the value of our total assets. A downturn in a particular industry in which we have invested a significant portion of our total assets could have a materially adverse effect on us. As of March 31, 2021,2022, our largest industry concentration was in Diversified/Conglomerate Services, representing 41.3%43.0% of our total investments, at fair value.
Any unrealized depreciation we experience on our investment portfolio may be an indication of future realized losses, which could reduce any gains available for distribution.
Any inability to renew, extend or replace the Credit Facility on terms favorable to us, or at all, could adversely impact our liquidity and ability to fund new investments or maintain distributions to our stockholders.
|
|
|
•Senior Securities: We may issue senior securities representing indebtedness (including borrowings under the Credit Facility, our 2026 Notes and our 2028 Notes) and senior securities that are stock, up to the maximum amount permitted by the 1940 Act. The 1940 Act currently permits us, as a BDC, to issue senior securities representing indebtedness and senior securities which are stock, in amounts such that our asset coverage, as defined in Section 18(h) of the 1940 Act, is at least 150% on each such senior security immediately after each issuance of each such senior security. As a result of issuing senior securities (in whatever form), we will be exposed to the risks associated with leverage. Although borrowing money for investments increases the potential for gain, it also increases the risk of a loss. A decrease in the value of our investments will have a greater impact on the value of our common stock to the extent that we have borrowed money to make investments. There is a possibility that the costs of borrowing could exceed the income we receive on the investments we make with such borrowed funds. In addition, our ability to pay distributions, issue senior securities or repurchase shares of our common stock would be restricted if the asset coverage on each of our senior securities is not at least 150%. If the aggregate fair value of our assets declines, we might be unable to satisfy that 150% requirement. To satisfy the 150% asset coverage requirement in the event that we are seeking to pay a distribution, we might either have to (i) liquidate a portion of our loan portfolio to repay a portion of our indebtedness or (ii) issue common stock. This may occur at a time when a sale of a portfolio asset may be disadvantageous, or when we have limited access to capital markets on agreeable terms. In addition, any amounts that we use to service our indebtedness, pay dividends on our preferred stock or for offering costs will not be available for distributions to common stockholders. Pursuant to Section 61(a)(3) of the 1940 Act, we are permitted, under specified conditions, to issue multiple classes of senior securities representing indebtedness. However, pursuant to Section 18(c) of the 1940 Act, we are permitted to issue only one class of senior securities that are stock.
The following table illustrates the effect of leverage on returns from an investment in our common stock assuming various annual returns on our portfolio, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.
Assumed Return on Our Portfolio (Net of Expenses) | ||||||||||||||||||||
(10)% | (5)% | 0% | 5% | 10% | ||||||||||||||||
Corresponding return to common stockholder(A) | (20.38 | )% | (11.96 | )% | (3.54 | )% | 4.88 | % | 13.30 | % |
|
Assumed Return on Our Portfolio (Net of Expenses) | |||||||||||||||||
(10)% | (5)% | 0% | 5% | 10% | |||||||||||||
Corresponding return to common stockholder(A) | (19.59)% | (11.29)% | (2.99)% | 5.32% | 13.62% |
debt.
Success fee amounts are characterized as ordinary income for tax purposes and, as a result, we are required to distribute such amounts to our stockholders to maintain our RIC status.
We may not be permitted to declare a dividend or make any distribution to stockholders or repurchase shares until such time as we satisfy the asset coverage tests under the provisions of the 1940 Act that apply to BDCs. As a BDC, we have the ability to issue senior securities only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after each issuance of senior securities. If the value of our assets declines, we may be unable to satisfy this test. If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our debt at a time when such sales and/or repayments may be disadvantageous.
professional growth opportunities. The Adviser competes with investment funds (such as private equity funds and mezzanine funds) and traditional financial services companies for qualified personnel, many of which have greater resources than us. Searches for qualified personnel may divert management’s time from the operation of our business. Strain on the existing personnel resources of the Adviser, in the event that it is unable to attract experienced investment professionals and senior executives, could have a material adverse effect on our business.
We may be obligated to pay the Adviser incentive compensation even if we incur a net decrease in net assets.
investment objectives with ours and accordingly may invest in, whether principally or secondarily, asset classes we target. While the Adviser generally has broad authority to make investments on behalf of the investment vehicles that it advises, the Adviser has adopted investment allocation procedures to address these potential conflicts and intends to direct investment opportunities to the Company or the Affiliated Public Fund with the investment strategy that most closely fits the investment opportunity. Nevertheless, the management of the Adviser may face conflicts in the allocation of investment opportunities to other entities it manages. As a result, it is possible that we may not be given the opportunity to participate in certain investments made by other funds managed by the Adviser.
•Our affiliate, Gladstone Commercial, may, under certain circumstances, lease property to portfolio companies that we do not control. We may pursue such transactions only if (i) the portfolio company is not controlled by us or any of our affiliates, (ii) the portfolio company satisfies the tenant underwriting criteria of Gladstone Commercial, and (iii) the transaction is approved by a majority of our independent directors and a majority of the independent directors of Gladstone Commercial. We expect that any such negotiations between Gladstone Commercial and our portfolio companies would result in lease terms consistent with the terms that the portfolio companies would be likely to receive were they not portfolio companies of ours.
•We may invest simultaneously with our affiliate Gladstone Capital in senior loans in the broadly syndicated market whereby neither we nor any affiliate has the ability to dictate the terms of the loans.
•Pursuant to the Co-Investment Order, we may co-invest, under certain circumstances, with certain of our affiliates, including Gladstone Capital and any future BDC or closed-end management investment company that is advised (or sub-advised if it controls the fund) by the Adviser, or any combination of the foregoing subject to the conditions in the Co-Investment Order. Order.
the future non-contractual, unconditional, and irrevocable credits to reduce the annual 2.0% base management fee or the incentive fee, on a quarterly or annual basis. Any fees credited may not be recouped by the Adviser in the future. However, the Adviser is not required to issue these or other credits of fees under the Advisory Agreement. If the Adviser does not issue these credits in the future, it could negatively impact our earnings and may compromise our ability to maintain our current level of distributions to our stockholders, which could have a material adverse impact on our common stock price.
common stockholder’s original investment in shares of our common stock and should not be confused with a distribution from earnings and profits. Although return of capital distributions may not be taxable, such distributions may increase an investor’s tax liability for capital gains upon the sale of our common stock by reducing the investor’s tax basis in its shares of our common stock. Such returns of capital reduce our asset base and also adversely impact our ability to raise debt capital as a result of the leverage restrictions under the 1940 Act, which could have a material adverse impact on our ability to make new investments.
At
With this and similar previous approvals from our stockholders, we exercised this right with Board of Director approval in March and April 2018 for certain sales under the at-the-market program (Refer to “Liquidity and Capital Resources — Equity — Common Stock” for further details of sales under our at-the-market program.). With prior approval from our stockholders and our Board of Directors, we also issued shares of common stock below our then current NAV per share in public offerings in May and June of 2017, March and April of 2015, and in October 2012 with a net dilutive effect of such issuances, net of discounts, commissions and offering costs borne by us, of $0.07, $0.29 and $0.39, respectively, per share of common stock.
At the upcoming annual stockholders meeting to be held in August 2021, we expect that our stockholders will again be asked to vote in favor of renewing this proposal for another year. During the past year, our common stock has frequently traded, and at times significantly, below NAV per share. Any decision to sell shares of our
common stock below the then current NAV per share of our common stock would be subject to the determination by our Board of Directors that such issuance is in our and our stockholders’ best interests.
If we were to sell shares of our common stock below NAV per share, such sales would result in an immediate dilution to the NAV per share. This dilution would occur as a result of the sale of shares at a price below the then current NAV per share of our common stock and a proportionately greater decrease in a common stockholder’s interest in our earnings and assets and voting interest in us than the increase in our assets resulting from such issuance. The greater the difference between the sale price and the NAV per share at the time of the offering, the more significant the dilutive impact would be. Because the number of shares of common stock that could be so issued and the timing of any issuance is not currently known, the actual dilutive effect, if any, cannot be currently predicted. However, if, for example, we sold an additional 10% of our common stock at a 5% discount from NAV, an existing common stockholder who did not participate in that offering for its proportionate interest would suffer NAV dilution of up to 0.5% or $5 per $1,000 of NAV.
If we fail to pay dividends on our mandatorily redeemable preferred stock for two years, the holders of our preferred stock will be entitled to elect a majority of our directors.
The terms of our series of mandatorily redeemable preferred stock provide for annual dividends of approximately $1.59 per outstanding share of our Series E Term Preferred Stock. In accordance with the 1940 Act and the terms of our series of mandatorily redeemable term preferred stock, if dividends thereon are unpaid in an amount equal to at least two years of dividends, the holders of our preferred stock will be entitled to elect a majority of our Board of Directors.
Holders of our debt or mandatorily redeemable preferred stock have liquidation and other rights that are senior to the rights of the holders of our common stock. Any future issuance of debt or additional shares of preferred stock could adversely affect the market price of our common stock.
We may in the future raise additional capital through the issuance of debt or additional shares of preferred stock. Our Board of Directors is authorized to issue one or more classes or series of preferred stock (so long as such stock is issued in parity with our outstanding shares of mandatorily redeemable preferred stock in accordance with Section 18(c) of the 1940 Act) from time to time without any action on the part of the stockholders, as it has done with respect to our outstanding series of mandatorily redeemable preferred stock. Our Board of Directors also has the power, without stockholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights and preferences over our common stock with respect to dividends or upon our dissolution, winding-up or liquidation, and other terms. Holders of our outstanding mandatorily redeemable preferred stock have, and holders of any future debt securities will have, preference over our common stock with respect to the payment of dividends and upon our liquidation, dissolution or winding-up. This will reduce the amount of our assets, if any, available for distribution to holders of our common stock. The decision to issue debt or preferred stock is dependent on market conditions and other factors that may be beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of our future issuances. Any such future issuance could reduce the market price of our common stock.
Additionally, if we issue additional preferred stock with voting rights that dilute the voting power of our common stock, the rights of holders of our common stock or the market price of our common stock could be adversely affected.
Risks Related to Our Mandatorily Redeemable Preferred Stock
An active trading market for the mandatorily redeemable preferred stock may not exist or continue, which could adversely affect the market price of the mandatorily redeemable preferred stock or a holder’s ability to sell its shares.
Our Series E Term Preferred Stock is listed on Nasdaq. However, we cannot provide any assurances that an active trading market for the mandatorily redeemable preferred stock will exist in the future or that stockholders
will be able to sell their shares of mandatorily redeemable preferred stock. Even if an active trading market does exist, shares of the mandatorily redeemable preferred stock may trade at a discount from the liquidation preference for such shares depending on prevailing interest rates, the market for similar securities, general economic conditions, our issuance of debt or preferred equity securities and our financial condition, results of operation and prospects. To the extent an active trading market does not exist, the liquidity and trading price for shares of the mandatorily redeemable preferred stock may be harmed. Accordingly, holders may be required to bear the financial risk of an investment in the mandatorily redeemable preferred stock for an indefinite period of time.
An investment in preferred stock with a fixed interest rate bears interest rate risk.
Our series of mandatorily redeemable preferred stock pays dividends at a fixed dividend rate. Prices of fixed income investments vary inversely with changes in market yields. The market yields on securities comparable to our mandatorily redeemable preferred stock may increase, which would likely result in a decline in the secondary market price of the mandatorily redeemable preferred stock prior to the mandatory redemption date for that series of mandatorily redeemable preferred stock.
The mandatorily redeemable preferred stock is not rated.
Our series of mandatorily redeemable preferred stock is not rated by any rating agency. Unrated securities usually trade at a discount to similar, rated securities. As a result, the series of mandatorily redeemable preferred stock may trade at prices that are lower than they might otherwise trade if rated by a rating agency.
Our mandatorily redeemable preferred stock bears a risk of early redemption by us.
We may voluntarily redeem some or all of the Series E Term Preferred Stock at any time. We also may be forced to redeem some or all of the outstanding shares of mandatorily redeemable preferred stock to meet regulatory requirements or the asset coverage requirements of such shares. We are also required to redeem all of the mandatorily redeemable preferred stock upon certain change of control transactions. Any such redemption may occur at a time that is unfavorable to holders of the mandatorily redeemable preferred stock. We may have an incentive to redeem the mandatorily redeemable preferred stock voluntarily before the mandatory redemption date for such series if market conditions allow us to issue other preferred stock or debt securities at a rate that is lower than the dividend rate on such series of mandatorily redeemable preferred stock or for other reasons. If we redeem shares of the mandatorily redeemable preferred stock before the mandatory redemption date for such series of mandatorily redeemable preferred stock, the holders of such redeemed shares face the risk that the return on an investment purchased with proceeds from such redemption may be lower than the return previously obtained from the investment in the mandatorily redeemable preferred stock.
Claims of holders of the mandatorily redeemable preferred stock will be subject to a risk of subordination relative to holders of our debt instruments.
While holders of the mandatorily redeemable preferred stock will have equal liquidation rights to the holder of any other outstanding series of our mandatorily redeemable preferred stock, such holders will be subordinated to the rights of holders of our current and any future indebtedness, including the Credit Facility and the 2026 Notes. Even though the mandatorily redeemable preferred stock is classified as a liability for purposes of GAAP and considered senior securities under the 1940 Act, the mandatorily redeemable preferred stock are not debt instruments. Therefore, dividends, distributions and other payments to holders of mandatorily redeemable preferred stock in liquidation or otherwise may be subject to prior payments due to the holders of our indebtedness. In addition, under some circumstances the 1940 Act may provide debt holders with voting rights that are superior to the voting rights of holders of the mandatorily redeemable preferred stock.
Holders of the mandatorily redeemable preferred stock will bear dividend risk.
We may be unable to pay dividends on the series of mandatorily redeemable preferred stock under some circumstances. The terms of our indebtedness, including the Credit Facility and the 2026 Notes, preclude the payment of dividends in respect of equity securities, including the mandatorily redeemable preferred stock, under certain conditions.
There is a risk of delay in our redemption of the mandatorily redeemable preferred stock, and we may fail to redeem such securities as required by their terms.
We generally make investments in private companies whose securities are not traded in any public market. Substantially all of the investments we presently hold and the investments we expect to acquire in the future are, and will be, subject to legal and other restrictions on resale and will otherwise be less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to obtain cash equal to the value at which we record our investments quickly if a need arises. If we are unable to obtain sufficient liquidity prior to the mandatory redemption date or any other date on which we are required by law or the terms of a series of mandatorily redeemable preferred stock to redeem shares of such series, we may be forced to engage in a partial redemption or to delay a required redemption. If such a partial redemption or delay were to occur, the market price of the mandatorily redeemable preferred stock might be adversely affected.
Risks Related to the 2026 Notes
and 2028 Notes (collectively, the "Notes")
The indenture under which the 2026 Notes were issued contains limited protection for holders of the 2026 Notes.
•issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the 2026 Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the 2026 Notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the 2026 Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the 2026 Notes with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, which generally prohibit us incurring additional debt or issuing additional debt or preferred securities, unless our asset coverage, as defined in the 1940 Act, equals at least 150% after such incurrence or issuance;
•pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the 2026 Notes, including our preferred stock and any subordinated indebtedness, in each case other than dividends, purchases, redemptions or payments that would cause our asset coverage to fall below the threshold specified in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act or any successor provisions thereto, whether or not we are subject to such provisions of the 1940 Act, giving effect to any no-action relief granted by the SEC to another BDC and upon which we may reasonably rely (or to us if we determine to seek such similar SEC no-action or other relief) permitting the BDC to declare any cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a)(2) of the 1940 Act to maintain the BDC’s status as a RIC under Subchapter M of the Code;
•sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
•enter into transactions with affiliates;
•create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions;
•create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the 2026 Notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for, trading levels, and prices of the 2026 Notes.
A downgrade, suspension or withdrawal of any credit rating assigned by a rating agency to us or the 2026 Notes could cause the liquidity or market value of the 2026 Notes to decline significantly.
We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends.
•sudden electrical or telecommunications outages;
•natural disasters such as earthquakes, tornadoes and hurricanes;
•events arising from local or larger scale political or social matters, including terrorist acts; and
•cyber-attacks.
|
|
|
|
Fiscal Year ended March 31, 2020: Fiscal Year ended March 31, 2021: Fiscal Year ending March 31, 2022: 2022.2021. Quarter
Ended/
Ending Sales Prices Premium /
(Discount) of
High to NAV(B) Premium
(Discount) of
Low to NAV(B) Declared
Common Stock
Distributions NAV(A) High Low 6/30/2019 $ 12.29 $ 12.70 $ 10.97 3 % (11 )% $ 0.2940 (C) 9/30/2019 12.39 12.54 11.07 1 (11 ) 0.2340 (C) 12/31/2019 12.51 15.34 11.85 23 (5 ) 0.2940 (C) 3/31/2020 11.17 13.99 6.43 25 (42 ) 0.2100 6/30/2020 $ 10.87 $ 11.51 $ 6.75 6 (38 ) $ 0.3000 (D) 9/30/2020 10.86 10.39 8.88 (4 ) (18 ) 0.2100 12/31/2020 11.11 10.80 8.16 (3 ) (27 ) 0.2100 3/31/2021 11.52 12.74 9.91 11 (14 ) 0.2100 6/30/2021
(through
May 10,
2021) $ * $ 14.48 $ 12.27 * * $ 0.2700 (E) (A)NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low intraday sales prices. The NAVs per share shown are based on outstanding shares at the end of each period.(B)The premiums (discounts) set forth in these columns represent the high or low, as applicable, intraday sale prices per share for the relevant quarter minus the NAV per share as of the end of such quarter, and therefore may not reflect the premium (discount) to NAV per share on the date of the high and low intraday sales prices.(C)Includes a $0.09 per common share supplemental distribution paid in each of June 2019 and December 2019 and a $0.03 per common share supplemental distribution paid in September 2019.(D)Includes a $0.09 per common share supplemental distribution paid in June 2020.(E)Includes a $0.06 per common share supplemental distribution to be paid in June 2021.*Not yet available, as the NAV per share as of the end of this quarter has not yet been finalized.Quarter Ended/Ending Sales Prices High Low Fiscal Year ended March 31, 2021: 6/30/2020 $ 10.87 $ 11.51 $ 6.75 6 % (38) % $ 0.3000 (C) 9/30/2020 10.86 10.39 8.88 (4) % (18) % 0.2100 12/31/2020 11.11 10.80 8.16 (3) % (27) % 0.2100 3/31/2021 11.52 12.74 9.91 11 % (14) % 0.2100 Fiscal Year ended March 31, 2022: 6/30/2021 $ 12.66 $ 14.91 $ 12.27 18 % (3) % $ 0.2700 (D) 9/30/2021 13.27 15.26 13.69 15 % 3 % 0.2400 (D) 12/31/2021 13.27 17.15 13.91 29 % 5 % 0.3150 (D) 3/31/2022 13.43 17.12 13.86 27 % 3 % 0.3450 (D) Fiscal Year ending March 31, 2023: * $ 16.85 $ 14.82 * * 0.3450 (E) 7, 2021,6, 2022, there were 20 record owners of our common stock. This number does not include stockholders for whom shares are held in “street name.”yearyears ended March 31, 2022 and 2021, we did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders. For the year ended March 31, 2020, we elected to retain $38.0 million, or $1.15 per common share, of net long-term capital gains and to designate the retained amount as deemed distributions to common stockholders. As a result, each common stockholder (i) was required
to report their pro-rata share of the retained gain on their tax return as long-term capital gain, (ii) received a refundable tax credit for their pro-rata share of federal income tax paid by us on the retained gain, and (iii) increased the tax basis of their shares of common stock by an amount equal to the deemed distribution less the tax credit. We incurred $8.0 million, or $0.24 per common share, of federal income taxes on behalf of common stockholders for the year ended March 31, 2020. The Credit Facility also generally restricts distributions on our common stock to the sum of certain amounts, including, our net investment income, plus net capital gains, plus amounts elected by the Company to be considered as having been paid during the prior fiscal year in accordance with Section 855(a) of the Code.
2022.
The following table provides information with respect to the purchases made by or on behalf of the Company
Period | (a) Total Number of Shares of Series D Term Preferred Stock Purchased | (b) Average Price Paid per Share of Series D Term Preferred Stock | (c) Total Number of Shares of Series D Term Preferred Stock Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number of Shares of Series D Term Preferred Stock that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
January 1 through 31, 2021 | — | — | — | — | ||||||||||||
February 1 through 28, 2021 | — | — | — | — | ||||||||||||
March 1 through 31, 2021 | 2,300,000 | $ | 25.00 | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 2,300,000 | $ | 25.00 | — | — | |||||||||||
|
|
|
|
|
|
|
|
Stock Performance Graph
GAIN | Nasdaq 100 TR | Russell 1000 TR | WF BDC TR | |||||||||||||
3/31/2016 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | ||||||||
3/31/2017 | 141.58 | 122.77 | 117.43 | 127.63 | ||||||||||||
3/31/2018 | 172.48 | 150.26 | 133.84 | 116.03 | ||||||||||||
3/31/2019 | 215.52 | 170.33 | 145.31 | 127.23 | ||||||||||||
3/31/2020 | 158.98 | 182.29 | 134.26 | 78.89 | ||||||||||||
3/31/2021 | 271.30 | 307.86 | 216.07 | 148.17 |
Fees
GAIN | Nasdaq 100 TR | Russell 1000 TR | S&P BDC TR | WF BDC TR (1) | |||||||||||||||||||||||||
3/31/2017 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | $ | 100.00 | |||||||||||||||||||
3/31/2018 | 121.82 | 122.38 | 113.98 | 91.71 | 90.91 | ||||||||||||||||||||||||
3/31/2019 | 152.22 | 138.73 | 123.75 | 100.51 | 99.69 | ||||||||||||||||||||||||
3/31/2020 | 112.29 | 148.48 | 114.33 | 61.76 | 61.81 | ||||||||||||||||||||||||
3/31/2021 | 191.62 | 250.76 | 184.00 | 120.25 | 116.09 | ||||||||||||||||||||||||
3/31/2022 | 272.87 | 286.21 | 208.42 | 145.18 | N/A |
Stockholder Transaction Expenses: | ||||||||
Sales load or other commission (as a percentage of offering price)(1) | — | % | ||||||
Offering expenses (as a percentage of offering price)(1) | — | % | ||||||
Dividend reinvestment plan expenses (per sales transaction fee)(2) | Up to | fee | ||||||
Total stockholder transaction expenses (as a percentage of offering price)(1) | —% | |||||||
Annual expenses (as a percentage of net assets attributable to common stock)(3): | ||||||||
Base management | 3.24 | % | ||||||
Loan servicing | 1.58 | % | ||||||
Incentive fees (20% of realized capital gains and 20% of pre-incentive fee net investment income)(6) | 3.77 | % | ||||||
Interest payments on borrowed | 3.81 | % | ||||||
| 1.05 | % | ||||||
| ||||||||
Total annual | 13.45 |
|
|
|
|
(1)The amounts set forth in the table above do not reflect the impact of any sales load or other commission or offering expenses borne by the Company and its common stockholders. If applicable, the prospectus or prospectus supplement relating to an offering of our common stock will disclose the offering price and the estimated offering expenses and total stockholder transaction expenses borne by the Company and its common stockholders as a percentage of the offering price. In the event that shares of our common stock are sold to or through underwriters, the applicable prospectus or prospectus supplement will also disclose the applicable sales load or other commission.
would otherwise be required to pay to the Adviser; however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees is retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser and primarily related to the valuation of portfolio companies. For the quarter ended March 31, 2021, $0.42022, $0.6 million of these fees were non-contractually, unconditionally and irrevocably credited against the base management fee. See
|
|
(5)The Adviser services the loans held by Business Investment in return for which the Adviser receives a 2% annual loan servicing fee based on the monthly aggregate balance of loans pledged under the Credit Facility. Since Business Investment is a consolidated subsidiary of ours, coupled with the fact that the total base management fee paid to the Adviser pursuant to the Advisory Agreement cannot exceed 2% of total assets (less any uninvested cash or cash equivalents resulting from borrowings) during any given calendar year, we treat payment of the loan servicing fee pursuant to the Credit Facility as a pre-payment of the base management fee under the Advisory Agreement. Accordingly, these loan servicing fees are 100% non-contractually, unconditionally and irrevocably credited back to us by the Adviser. The loan servicing fee for the three months ended March 31, 2022 was $1.7 million. See “Item 1.Business—Transactions with Related Parties—Loan Servicing Fee Pursuant to Credit Facility” and footnote 4 above for additional information.
•Assuming pre-incentive fee net investment income of 0.55%, there would be no income-based incentive fee because such income would not exceed the hurdle rate of 1.75%.
•Assuming pre-incentive fee net investment income of 2.00%, the income-based incentive fee would be as follows:
•Assuming pre-incentive fee net investment income of 2.30%, the income-based incentive fee would be as follows:
•Assuming net realized capital gains of 6% and realized capital losses and unrealized capital depreciation of 1%, the capital gains-based incentive fee would be as follows:
|
|
|
Example |
The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed that our annual operating expenses would remain at the levels set forth in the table above. The example below and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses may be greater or less than those shown. While the example assumes, as required by the SEC, a 5.0% annual return, our performance will vary and may result in a return greater or less than 5.0%. Dollar amounts in the table below are not in thousands.
1 Year | 3 Years | 5 Years | 10 Years | |||||||||||||
Common stockholders would pay the following expenses on a $1,000 investment: | ||||||||||||||||
assuming a 5% annual return consisting entirely of ordinary income(1)(2) | $ | 117 | $ | 329 | $ | 513 | $ | 875 | ||||||||
assuming a 5% annual return consisting entirely of capital gains(2)(3) | $ | 126 | $ | 350 | $ | 542 | $ | 906 |
|
|
|
|
1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||
Common stockholders would pay the following expenses on a $1,000 investment: | |||||||||||||||||||||||
assuming a 5% annual return consisting entirely of ordinary income(1)(2) | $ | 102 | $ | 289 | $ | 458 | $ | 810 | |||||||||||||||
assuming a 5% annual return consisting entirely of capital gains(2)(3) | $ | 111 | $ | 312 | $ | 490 | $ | 849 |
Class and Year | Total Amount Outstanding Exclusive of Treasury Securities(1) | Asset Coverage Per Unit(2) | Involuntary Liquidating Preference Per Unit(3) | Average Market Value Per Unit(4) | Class and Year | Total Amount Outstanding Exclusive of Treasury Securities(1) | Asset Coverage Per Unit(2) | Involuntary Liquidating Preference Per Unit(3) | Average Market Value Per Unit(4) | ||||||||||||||||||||||||||||||
7.125% Series A Cumulative Term Preferred Stock(5) | |||||||||||||||||||||||||||||||||||||||
7.125% Series A Cumulative Term Preferred Stock(5) | 7.125% Series A Cumulative Term Preferred Stock(5) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2022 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | March 31, 2021 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2020 | — | N/A | — | N/A | March 31, 2020 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2019 | — | N/A | — | N/A | March 31, 2019 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2018 | — | N/A | — | N/A | March 31, 2018 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2017 | — | N/A | — | N/A | March 31, 2017 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2016 | $ | 40,000,000 | $ | 2,214 | $ | 25.00 | $ | 25.60 | March 31, 2016 | $ | 40,000,000 | $ | 2,214 | $ | 25.00 | $ | 25.60 | ||||||||||||||||||||||
March 31, 2015 | 40,000,000 | 2,301 | 25.00 | 25.78 | March 31, 2015 | $ | 40,000,000 | $ | 2,301 | $ | 25.00 | $ | 25.78 | ||||||||||||||||||||||||||
March 31, 2014 | 40,000,000 | 2,978 | 25.00 | 26.53 | March 31, 2014 | $ | 40,000,000 | $ | 2,978 | $ | 25.00 | $ | 26.53 | ||||||||||||||||||||||||||
March 31, 2013 | 40,000,000 | 2,725 | 25.00 | 26.92 | March 31, 2013 | $ | 40,000,000 | $ | 2,725 | $ | 25.00 | $ | 26.92 | ||||||||||||||||||||||||||
March 31, 2012 | 40,000,000 | 2,676 | 25.00 | 24.97 | |||||||||||||||||||||||||||||||||||
6.75% Series B Cumulative Term Preferred Stock(6) | |||||||||||||||||||||||||||||||||||||||
6.75% Series B Cumulative Term Preferred Stock(6) | 6.75% Series B Cumulative Term Preferred Stock(6) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2022 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | March 31, 2021 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2020 | — | N/A | — | N/A | March 31, 2020 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2019 | — | N/A | — | N/A | March 31, 2019 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2018 | $ | 41,400,000 | $ | 2,373 | $ | 25.00 | $ | 25.20 | March 31, 2018 | $ | 41,400,000 | $ | 2,373 | $ | 25.00 | $ | 25.20 | ||||||||||||||||||||||
March 31, 2017 | 41,400,000 | 2,356 | 25.00 | 26.00 | March 31, 2017 | $ | 41,400,000 | $ | 2,356 | $ | 25.00 | $ | 26.00 | ||||||||||||||||||||||||||
March 31, 2016 | 41,400,000 | 2,214 | 25.00 | 24.43 | March 31, 2016 | $ | 41,400,000 | $ | 2,214 | $ | 25.00 | $ | 24.43 | ||||||||||||||||||||||||||
March 31, 2015 | 41,400,000 | 2,301 | 25.00 | 25.38 | March 31, 2015 | $ | 41,400,000 | $ | 2,301 | $ | 25.00 | $ | 25.38 | ||||||||||||||||||||||||||
6.50% Series C Cumulative Term Preferred Stock due 2022(7) | |||||||||||||||||||||||||||||||||||||||
6.50% Series C Cumulative Term Preferred Stock due 2022(7) | 6.50% Series C Cumulative Term Preferred Stock due 2022(7) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2022 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | March 31, 2021 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2020 | — | N/A | — | N/A | March 31, 2020 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2019 | — | N/A | — | N/A | March 31, 2019 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2018 | 40,250,000 | $ | 2,373 | $ | 25.00 | $ | 25.33 | March 31, 2018 | $ | 40,250,000 | $ | 2,373 | $ | 25.00 | $ | 25.33 | |||||||||||||||||||||||
March 31, 2017 | 40,250,000 | 2,356 | 25.00 | 25.64 | March 31, 2017 | $ | 40,250,000 | $ | 2,356 | $ | 25.00 | $ | 25.64 | ||||||||||||||||||||||||||
March 31, 2016 | 40,250,000 | 2,214 | 25.00 | 23.92 | March 31, 2016 | $ | 40,250,000 | $ | 2,214 | $ | 25.00 | $ | 23.92 | ||||||||||||||||||||||||||
6.25% Series D Cumulative Term Preferred Stock due 2023(8) | |||||||||||||||||||||||||||||||||||||||
6.25% Series D Cumulative Term Preferred Stock due 2023(8) | 6.25% Series D Cumulative Term Preferred Stock due 2023(8) | ||||||||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2022 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | March 31, 2021 | — | N/A | — | N/A | ||||||||||||||||||||||||||||||
March 31, 2020 | $ | 57,500,000 | $ | 2,938 | $ | 25.00 | $ | 20.46 | March 31, 2020 | $ | 57,500,000 | $ | 2,938 | $ | 25.00 | $ | 20.46 | ||||||||||||||||||||||
March 31, 2019 | 57,500,000 | 3,091 | 25.00 | 25.38 | |||||||||||||||||||||||||||||||||||
March 31, 2018 | 57,500,000 | 2,373 | 25.00 | 25.22 | |||||||||||||||||||||||||||||||||||
March 31, 2017 | 57,500,000 | 2,356 | 25.00 | 25.43 | |||||||||||||||||||||||||||||||||||
6.375% Series E Cumulative Term Preferred Stock due 2025(9) | |||||||||||||||||||||||||||||||||||||||
March 31, 2021 | $ | 94,371,325 | $ | 2,486 | $ | 25.00 | $ | 25.44 | |||||||||||||||||||||||||||||||
March 31, 2020 | 74,750,000 | 2,938 | 25.00 | 19.52 | |||||||||||||||||||||||||||||||||||
March 31, 2019 | 74,750,000 | 3,091 | 25.00 | 25.55 | |||||||||||||||||||||||||||||||||||
Revolving credit facilities | |||||||||||||||||||||||||||||||||||||||
March 31, 2021 | $ | 22,400,000 | $ | 3,980 | — | N/A | |||||||||||||||||||||||||||||||||
March 31, 2020 | 49,200,000 | 9,935 | — | N/A | |||||||||||||||||||||||||||||||||||
March 31, 2019 | 53,000,000 | 9,976 | — | N/A | |||||||||||||||||||||||||||||||||||
March 31, 2018 | 107,000,000 | 5,257 | — | N/A | |||||||||||||||||||||||||||||||||||
March 31, 2017 | 69,700,000 | 6,613 | — | N/A | |||||||||||||||||||||||||||||||||||
March 31, 2016 | 95,000,000 | 4,838 | — | N/A | |||||||||||||||||||||||||||||||||||
March 31, 2015 | 118,800,000 | 2,301 | — | N/A |
Class and Year | Total Amount Outstanding Exclusive of Treasury Securities(1) | Asset Coverage Per Unit(2) | Involuntary Liquidating Preference Per Unit(3) | Average Market Value Per Unit(4) | ||||||||||||
March 31, 2014 | 61,250,000 | 2,978 | — | N/A | ||||||||||||
March 31, 2013 | 31,000,000 | 2,725 | — | N/A | ||||||||||||
March 31, 2012 | — | N/A | — | N/A | ||||||||||||
Short-term loan | ||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | ||||||||||||
March 31, 2020 | — | N/A | — | N/A | ||||||||||||
March 31, 2019 | — | N/A | — | N/A | ||||||||||||
March 31, 2018 | — | N/A | — | N/A | ||||||||||||
March 31, 2017 | — | N/A | — | N/A | ||||||||||||
March 31, 2016 | — | N/A | — | N/A | ||||||||||||
March 31, 2015 | — | N/A | — | N/A | ||||||||||||
March 31, 2014 | — | N/A | — | N/A | ||||||||||||
March 31, 2013 | $ | 58,016,000 | $ | 2,725 | — | N/A | ||||||||||
March 31, 2012 | 76,005,000 | 2,676 | — | N/A | ||||||||||||
2026 Notes(10) | ||||||||||||||||
March 31, 2021 | $ | 127,937,500 | $ | 3,980 | $ | 25.00 | $ | 25.85 | ||||||||
Secured borrowings(11) | ||||||||||||||||
March 31, 2021 | $ | 5,095,785 | $ | 3,980 | — | N/A | ||||||||||
March 31, 2020 | 5,095,785 | 9,935 | — | N/A | ||||||||||||
March 31, 2019 | 5,095,785 | 9,976 | — | N/A | ||||||||||||
March 31, 2018 | 5,095,785 | 5,257 | — | N/A | ||||||||||||
March 31, 2017 | 5,095,785 | 6,613 | — | N/A | ||||||||||||
March 31, 2016 | 5,095,785 | 4,838 | — | N/A | ||||||||||||
March 31, 2015 | 5,095,785 | 2,301 | — | N/A | ||||||||||||
March 31, 2014 | 5,000,000 | 2,978 | — | N/A | ||||||||||||
March 31, 2013 | 5,000,000 | 2,725 | — | N/A |
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019 | $ | 57,500,000 | $ | 3,091 | $ | 25.00 | $ | 25.38 | |||||||||||||||
March 31, 2018 | $ | 57,500,000 | $ | 2,373 | $ | 25.00 | $ | 25.22 | |||||||||||||||
March 31, 2017 | $ | 57,500,000 | $ | 2,356 | $ | 25.00 | $ | 25.43 | |||||||||||||||
6.375% Series E Cumulative Term Preferred Stock due 2025(9) | |||||||||||||||||||||||
March 31, 2022 | — | — | — | N/A | |||||||||||||||||||
March 31, 2021 | $ | 94,371,325 | $ | 2,486 | $ | 25.00 | $ | 25.44 | |||||||||||||||
March 31, 2020 | $ | 74,750,000 | $ | 2,938 | $ | 25.00 | $ | 19.52 | |||||||||||||||
March 31, 2019 | $ | 74,750,000 | $ | 3,091 | $ | 25.00 | $ | 25.55 | |||||||||||||||
Revolving credit facilities | |||||||||||||||||||||||
March 31, 2022 | $ | — | $ | 2,529 | — | N/A | |||||||||||||||||
March 31, 2021 | $ | 22,400,000 | $ | 3,980 | — | N/A | |||||||||||||||||
March 31, 2020 | $ | 49,200,000 | $ | 9,935 | — | N/A | |||||||||||||||||
March 31, 2019 | $ | 53,000,000 | $ | 9,976 | — | N/A | |||||||||||||||||
March 31, 2018 | $ | 107,000,000 | $ | 5,257 | — | N/A | |||||||||||||||||
March 31, 2017 | $ | 69,700,000 | $ | 6,613 | — | N/A | |||||||||||||||||
March 31, 2016 | $ | 95,000,000 | $ | 4,838 | — | N/A | |||||||||||||||||
March 31, 2015 | $ | 118,800,000 | $ | 2,301 | — | N/A | |||||||||||||||||
March 31, 2014 | $ | 61,250,000 | $ | 2,978 | — | N/A | |||||||||||||||||
March 31, 2013 | $ | 31,000,000 | $ | 2,725 | — | N/A | |||||||||||||||||
Short-term loan | |||||||||||||||||||||||
March 31, 2022 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2021 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2020 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2019 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2018 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2017 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2016 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2015 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2014 | — | N/A | — | N/A | |||||||||||||||||||
March 31, 2013 | $ | 58,016,000 | $ | 2,725 | — | N/A | |||||||||||||||||
2026 Notes(10) | |||||||||||||||||||||||
March 31, 2022 | $ | 127,937,500 | $ | 2,529 | $ | 25.00 | $ | 25.13 | |||||||||||||||
March 31, 2021 | $ | 127,937,500 | $ | 3,980 | $ | 25.00 | $ | 25.85 | |||||||||||||||
2028 Notes(11) | |||||||||||||||||||||||
March 31, 2022 | $ | 134,550,000 | $ | 2,529 | $ | 25.00 | $ | 25.07 | |||||||||||||||
Secured borrowings(12) | |||||||||||||||||||||||
March 31, 2022 | $ | 5,095,785 | $ | 2,529 | $ | — | N/A | ||||||||||||||||
March 31, 2021 | $ | 5,095,785 | $ | 3,980 | — | N/A | |||||||||||||||||
March 31, 2020 | $ | 5,095,785 | $ | 9,935 | — | N/A | |||||||||||||||||
March 31, 2019 | $ | 5,095,785 | $ | 9,976 | — | N/A | |||||||||||||||||
March 31, 2018 | $ | 5,095,785 | $ | 5,257 | — | N/A | |||||||||||||||||
March 31, 2017 | $ | 5,095,785 | $ | 6,613 | — | N/A | |||||||||||||||||
March 31, 2016 | $ | 5,095,785 | $ | 4,838 | — | N/A | |||||||||||||||||
March 31, 2015 | $ | 5,095,785 | $ | 2,301 | — | N/A | |||||||||||||||||
March 31, 2014 | $ | 5,000,000 | $ | 2,978 | — | N/A | |||||||||||||||||
March 31, 2013 | $ | 5,000,000 | $ | 2,725 | — | N/A |
$40$70 million, although investment size may vary, depending upon our total assets or available capital at the time of investment. We expect that our investment portfolio over time will consist of approximately 75% in debt securities and 25% in equity securities, at cost. As of March 31, 2021,2022, our investment portfolio was comprised of 74.4%76.3% in debt securities and 25.6%23.7% in equity securities, at cost. including management buyouts, recapitalize or, to a lesser extent, refinance their existing debt facilities. We seek to avoid investing in high-risk, early-stage enterprises.
2022
.At our 2020 Annual Meeting of Stockholders held on August 20, 2020, our stockholders approved a proposal authorizing us, with the subsequent approval of our Board of Directors, to issue and sell shares of our common stock at a price below our then current NAV per share, provided that the number of common shares issued and sold pursuant to such authority does not exceed 25.0% of our then outstanding common stock immediately prior to each such sale. This August 2020 stockholder authorization is in effect for one year from the date of stockholder approval. We sought and obtained stockholder approval concerning similar proposals at each Annual Meeting of Stockholders since 2008, and with our Board of Directors’ subsequent approval, we issued shares of our common stock in three offerings at a price below the then current NAV per share, once in May 2017, once in March 2015, and once in October 2012. Certain sales under the previous Common Stock ATM Program in March and April of 2018 were also below the then current estimated NAV per share. The resulting proceeds, in part, have allowed us to (i) grow our portfolio by making new investments, (ii) generate additional income through these new investments, (iii) ensure continued compliance with regulatory tests and (iv) increase our debt capital while still complying with our applicable debt-to-equity ratios. Refer to “Liquidity and Capital Resources — Equity — Common Stock” for further discussion of our common stock.
Regulatory Compliance
•In July 2020,May 2021, we dissolved our investment in Channel Technologies Group, LLC (“CTG”) and recorded a realized loss of $1.8 million.
In September 2020,June 2021, we invested an additional $8.0$6.5 million in PSI Molded Plastics, Inc.J.R. Hobbs Co. – Atlanta, LLC (“PSI Molded”) in the form of preferred equity and also amended certain terms of our existing debt.
In December 2020, we recapitalized our investment in Old World Christmas, Inc. (“Old World”) and invested an additional $27.0 million in the form of secured first lien debt. In connection with this investment, Old World paid dividend income of $3.2 million and additional equity proceeds of $10.8 million, resulting in a $7.5 million return of preferred equity cost basis and a realized gain of $3.3 million.
In December 2020, we invested an additional $3.0 million in Galaxy Technologies, Inc. (“Galaxy”J.R. Hobbs”) in the form of secured second lien debt. In connection with thisthe investment, Galaxy purchased SBS Industries, LLC (a subsidiary of SBS Industries Holdings, Inc. (“SBS Industries”), one of our other portfolio companies). SBS Industries used proceeds from the salesecured second lien debt was converted to partially repay our $11.4 millionsecured first lien debt, resulting in a realized loss of $8.5 million.
•In December 2020,June 2021, we sold our investment in Frontier Packaging,Head Country, Inc. (“Frontier”Head Country”), which resulted in dividend income of $0.9 million, success fee income of $0.2$2.0 million and a realized gain of $14.0$3.6 million. In connection with the sale, we received net cash proceeds of $26.0$16.7 million, including the repayment of our debt investment of $9.5$9.1 million at par.
Record Date April 23, 2021 May 19, 2021 June 8, 2021 June 18, 2021 Total for the Quarter: common stockholders.2021,2022, our Board of Directors declared the following monthly and supplemental cash distributions to common stockholders and monthly dividendsstockholders:Record Date Payment Date Distribution per Common Share April 22, 2022 April 29, 2022 $ 0.075 May 20, 2022 May 31, 2022 0.075 June 6, 2022 June 15, 2022 0.120 (A) June 22, 2022 June 30, 2022 0.075 Total for the Quarter: $ 0.345 holders of our Series E Term Preferred Stock: Payment Date Distribution per
Common Share Dividend per
Share of
Series E Term
Preferred Stock April 30, 2021 $ 0.07 $ 0.13281250 May 28, 2021 0.07 0.13281250 June 17, 2021 0.06 (A) — June 30, 2021 0.07 0.13281250 $ 0.27 $ 0.39843750 (A)Represents a supplemental distribution to common stockholders.expect we will need to continue to renegotiate a limited number of have amended all outstanding loan agreements with our portfolio companies to include fallback language providing a mechanism for the parties to negotiate a new reference interest rate in the event that LIBOR ceases to exists.exist. Assuming that SOFR replaces LIBOR and is appropriately adjusted to equate to one-month LIBOR, we expect that there should be minimal impact on our operations.continue to demonstratehave demonstrated their ability to respond effectively and efficiently to the challenges posed by COVID-19, andincluding its variants, related orders imposed by state and local governments, including paused or reversed reopening orders.orders, and operating challenges, including but not limited to, labor shortages, supply chain delays and increased material costs. We believe we have sufficient levels of liquidity to support our existing portfolio companies, as necessary, and selectively deploycontinue our buyout strategy by deploying capital in new investment opportunities.
For the Fiscal Years Ended March 31, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Interest income | $ | 47,164 | $ | 49,554 | $ | (2,390 | ) | (4.8 | )% | |||||||
Dividend and success fee income | 9,463 | 12,370 | (2,907 | ) | (23.5 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investment income | 56,627 | 61,924 | (5,297 | ) | (8.6 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
EXPENSES | ||||||||||||||||
Base management fee | 12,115 | 12,145 | (30 | ) | (0.2 | ) | ||||||||||
Loan servicing fee | 7,082 | 6,859 | 223 | 3.3 | ||||||||||||
Incentive fee | 8,778 | (2,380 | ) | 11,158 | 468.8 | |||||||||||
Administration fee | 1,619 | 1,476 | 143 | 9.7 | ||||||||||||
Interest and dividend expense | 13,114 | 12,317 | 797 | 6.5 | ||||||||||||
Amortization of deferred financing costs and discounts | 1,750 | 1,492 | 258 | 17.3 | ||||||||||||
Other | 4,262 | 4,948 | (686 | ) | (13.9 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Expenses before credits from Adviser | 48,720 | 36,857 | 11,863 | 32.2 | ||||||||||||
Credits to fees from Adviser | (10,031 | ) | (11,295 | ) | 1,264 | (11.2 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total expenses, net of credits to fees | 38,689 | 25,562 | 13,127 | 51.4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INVESTMENT INCOME | 17,938 | 36,362 | (18,424 | ) | (50.7 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
REALIZED AND UNREALIZED GAIN (LOSS), NET OF TAXES | ||||||||||||||||
Net realized gain on investments | 11,374 | 44,803 | (33,429 | ) | (74.6 | ) | ||||||||||
Taxes on deemed distribution of long-term capital gains | — | (10,260 | ) | 10,260 | NM | |||||||||||
Net realized loss on other | (782 | ) | — | (782 | ) | NM | ||||||||||
Net unrealized appreciation (depreciation) of investments | 13,924 | (78,139 | ) | 92,063 | NM | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net realized and unrealized gain (loss), net of taxes on deemed distribution of long-term capital gains | 24,516 | (43,596 | ) | 68,112 | NM | |||||||||||
|
|
|
|
|
|
|
| |||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 42,454 | $ | (7,234 | ) | $ | 49,688 | NM | ||||||||
|
|
|
|
|
|
|
| |||||||||
BASIC AND DILUTED PER COMMON SHARE: | ||||||||||||||||
Net investment income | $ | 0.54 | $ | 1.11 | $ | (0.57 | ) | (51.4 | )% | |||||||
|
|
|
|
|
|
|
| |||||||||
Net (decrease) increase in net assets resulting from operations | 1.28 | (0.22 | ) | 1.50 | NM | |||||||||||
|
|
|
|
|
|
|
|
NM = Not Meaningful
For the Fiscal Years Ended March 31, 2022 2021 $ Change % Change INVESTMENT INCOME Interest income $ 59,649 $ 47,164 $ 12,485 26.5 % Dividend and success fee income 12,903 9,463 3,440 36.4 % Total investment income 72,552 56,627 15,925 28.1 % EXPENSES Base management fee 14,113 12,115 1,998 16.5 % Loan servicing fee 7,178 7,082 96 1.4 % Incentive fee 26,360 8,778 17,582 200.3 % Administration fee 1,806 1,619 187 11.6 % Interest and dividend expense 15,384 13,114 2,270 17.3 % Amortization of deferred financing costs and discounts 1,803 1,750 53 3.0 % Other 4,593 4,262 331 7.8 % Expenses before credits from Adviser 71,237 48,720 22,517 46.2 % Credits to fees from Adviser (13,675) (10,031) (3,644) 36.3 % Total expenses, net of credits to fees 57,562 38,689 18,873 48.8 % NET INVESTMENT INCOME 14,990 17,938 (2,948) (16.4) % REALIZED AND UNREALIZED GAIN (LOSS), NET OF TAXES Net realized gain on investments 14,442 11,374 3,068 27.0 % Net realized loss on other (1,998) (782) (1,216) (155.5) % Net unrealized appreciation of investments 74,882 13,924 60,958 437.8 % Net realized and unrealized gain, net of taxes on deemed distribution of long-term capital gains 87,326 24,516 62,810 256.2 % NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 102,316 $ 42,454 $ 59,862 141.0 % BASIC AND DILUTED PER COMMON SHARE: Net investment income $ 0.45 $ 0.54 $ (0.09) (16.7) % Net increase in net assets resulting from operations $ 3.08 $ 1.28 $ 1.80 140.6 %
investments, coupled with any collection of past due interest during the period. During the year ended March 31, 2022, we collected $7.3 million in past due interest from portfolio companies that were previously on non-accrual status, including $3.4 million from Horizon Facilities Services, Inc. (“Horizon”), $2.8 million from B+T Group Acquisition, Inc. (“B+T”), $1.0 million from SOG Speciality Knives & Tools, LLC and $0.1 million from PSI Molded Plastics, Inc. We had no collections of past due interest during the year ended March 31, 2021.
Adviser.
Year Ended March 31, | ||||||||
2021 | 2020 | |||||||
Average total assets subject to base management fee(A) | $ | 605,750 | $ | 607,250 | ||||
Multiplied by annual base management fee of 2.0% | 2.0 | % | 2.0 | % | ||||
|
|
|
| |||||
Base management fee(B) | 12,115 | 12,145 | ||||||
Credits to fees from Adviser—other(B) | (2,949 | ) | (4,436 | ) | ||||
|
|
|
| |||||
Net base management fee | $ | 9,166 | $ | 7,709 | ||||
|
|
|
| |||||
Loan servicing fee(B) | $ | 7,082 | $ | 6,859 | ||||
Credits to base management fee—loan servicing fee(B) | (7,082 | ) | (6,859 | ) | ||||
|
|
|
| |||||
Net loan servicing fee | $ | — | $ | — | ||||
|
|
|
| |||||
Incentive fee – income-based | $ | 3,746 | $ | 4,338 | ||||
Incentive fee – capital gains-based(C) | 5,032 | (6,718 | ) | |||||
|
|
|
| |||||
Total incentive fee(B) | 8,778 | (2,380 | ) | |||||
Credits to fees from Adviser—other(B) | — | — | ||||||
|
|
|
| |||||
Net total incentive fee | $ | 8,778 | $ | (2,380 | ) | |||
|
|
|
|
|
|
|
Year Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Average total assets subject to base management fee(A) | $ | 705,650 | $ | 605,750 | |||||||
Multiplied by annual base management fee of 2.0% | 2.0 | % | 2.0 | % | |||||||
Base management fee(B) | 14,113 | 12,115 | |||||||||
Credits to fees from Adviser - other(B) | (6,497) | (2,949) | |||||||||
Net base management fee | $ | 7,616 | $ | 9,166 | |||||||
Loan servicing fee(B) | $ | 7,178 | $ | 7,082 | |||||||
Credits to base management fee - loan servicing fee(B) | (7,178) | (7,082) | |||||||||
Net loan servicing fee | $ | — | $ | — | |||||||
Incentive fee – income-based | $ | 8,074 | $ | 3,746 | |||||||
Incentive fee – capital gains-based(C) | 18,286 | 5,032 | |||||||||
Total incentive fee(B) | 26,360 | 8,778 | |||||||||
Credits to fees from Adviser - other(B) | — | — | |||||||||
Net total incentive fee | $ | 26,360 | $ | 8,778 |
Facility.
expense, partially offset by a decrease in professional expenses and shareholder expenses.
Year Ended March 31, 2022 | ||||||||||||||||||||||||||
Portfolio Company | Realized Gain (Loss) on Investments | Unrealized Appreciation (Depreciation) | Reversal of Unrealized (Appreciation) Depreciation | Net Gain (Loss) | ||||||||||||||||||||||
Brunswick Bowling Products, Inc. | $ | — | $ | 20,470 | $ | — | $ | 20,470 | ||||||||||||||||||
Bassett Creek Serivces, Inc. | — | 17,994 | — | 17,994 | ||||||||||||||||||||||
Old World Christmas, Inc. | — | 17,594 | — | 17,594 | ||||||||||||||||||||||
B+T Group Acquisition, Inc. | — | 16,885 | — | 16,885 | ||||||||||||||||||||||
Horizon Facilities Services, Inc. | — | 14,144 | — | 14,144 | ||||||||||||||||||||||
Schylling, Inc. | — | 9,883 | — | 9,883 | ||||||||||||||||||||||
SOG Specialty Knives & Tools, LLC | — | 8,197 | — | 8,197 | ||||||||||||||||||||||
Educators Resource, Inc. | — | 8,058 | — | 8,058 | ||||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. | — | 6,586 | — | 6,586 | ||||||||||||||||||||||
Counsel Press, Inc. | — | 4,027 | — | 4,027 | ||||||||||||||||||||||
PSI Molded Plastics, Inc. | — | 3,633 | — | 3,633 | ||||||||||||||||||||||
Nocturne Villa Rentals, Inc. | — | 3,623 | — | 3,623 | ||||||||||||||||||||||
Head Country, Inc. | 3,627 | — | (2,469) | 1,158 | ||||||||||||||||||||||
Channel Technologies Group, LLC | (1,841) | — | 1,841 | — | ||||||||||||||||||||||
The Maids International, LLC | — | (881) | — | (881) | ||||||||||||||||||||||
The Mountain Corporation | — | (1,045) | — | (1,045) | ||||||||||||||||||||||
Mason West, LLC | — | (2,221) | — | (2,221) | ||||||||||||||||||||||
Pioneer Square Brands, Inc. | 21,939 | (1,245) | (25,425) | (4,731) | ||||||||||||||||||||||
Ginsey Home Solutions, Inc. | — | (5,287) | — | (5,287) | ||||||||||||||||||||||
SFEG Holdings, Inc.(A) | — | (5,376) | — | (5,376) | ||||||||||||||||||||||
Galaxy Technologies Holdings, Inc. (B) | — | (9,587) | — | (9,587) | ||||||||||||||||||||||
J.R. Hobbs Co. - Atlanta, LLC | (10,000) | (4,709) | 800 | (13,909) | ||||||||||||||||||||||
Other, net (<$1.0 million, net ) | 717 | (661) | 53 | 109 | ||||||||||||||||||||||
Total | $ | 14,442 | $ | 100,082 | $ | (25,200) | $ | 89,324 |
Year Ended March 31, 2021 | ||||||||||||||||||||||||||
Portfolio Company | Realized Gain (Loss) on Investments | Unrealized Appreciation (Depreciation) | Reversal of Unrealized (Appreciation) Depreciation | Net Gain (Loss) | ||||||||||||||||||||||
Pioneer Square Brands, Inc. | $ | — | $ | 26,410 | $ | — | $ | 26,410 | ||||||||||||||||||
Old World Christmas, Inc. | 3,544 | 6,840 | — | 10,384 | ||||||||||||||||||||||
SOG Specialty Knives & Tools, LLC | — | 6,364 | — | 6,364 | ||||||||||||||||||||||
Educators Resource, Inc. | — | 5,631 | — | 5,631 | ||||||||||||||||||||||
Frontier Packaging, Inc. | 14,321 | 2,534 | (11,869) | 4,986 | ||||||||||||||||||||||
Schylling, Inc. | — | 3,604 | — | 3,604 | ||||||||||||||||||||||
Head Country, Inc. | — | 2,974 | — | 2,974 | ||||||||||||||||||||||
Ginsey Home Solutions, Inc. | — | 2,131 | — | 2,131 | ||||||||||||||||||||||
Diligent Delivery Systems | — | 1,877 | — | 1,877 | ||||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. | — | 1,554 | — | 1,554 | ||||||||||||||||||||||
Horizon Facilities Services, Inc. | — | 963 | — | 963 | ||||||||||||||||||||||
Cambridge Sound Management, Inc. | 739 | — | — | 739 | ||||||||||||||||||||||
Alloy Die Casting Co. | 576 | — | — | 576 | ||||||||||||||||||||||
Mason West, LLC | — | (1,432) | — | (1,432) | ||||||||||||||||||||||
Galaxy Tool Holding Corporation | — | (1,528) | — | (1,528) | ||||||||||||||||||||||
PSI Molded Plastics, Inc. | — | (1,752) | — | (1,752) | ||||||||||||||||||||||
The Maids International, LLC | — | (1,779) | — | (1,779) | ||||||||||||||||||||||
The Mountain Corporation | — | (1,986) | — | (1,986) | ||||||||||||||||||||||
Nth Degree Investment Group, LLC | 113 | (3,649) | — | (3,536) | ||||||||||||||||||||||
D.P.M.S., Inc. | — | (5,045) | — | (5,045) | ||||||||||||||||||||||
SBS Industries Holdings, Inc. (A) | (8,470) | 2,463 | — | (6,007) | ||||||||||||||||||||||
Brunswick Bowling Products, Inc. | — | (20,542) | — | (20,542) | ||||||||||||||||||||||
Other, net (<$1.0 million, net ) | 551 | 172 | (11) | 712 | ||||||||||||||||||||||
Total | $ | 11,374 | $ | 25,804 | $ | (11,880) | $ | 25,298 |
related to the partial write-off of a debt investment in SBS Industries. During the year ended March 31, 2020, we recorded net realized gains on
Taxes on Deemed Distribution of Long-Term Capital Gains
We did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders for the year ended March 31, 2021. For the year ended March 31, 2020, we elected to retain $38.0 million of long-term capital gains and to treat them as deemed distributions to common stockholders. We incurred $8.0 million of federal income taxes on behalf of common stockholders for the year ended March 31, 2020. In addition, we incurred Virginia state taxes related to the deemed distribution of $2.3$74.9 million for the year ended March 31, 2020. Refer2022
Net Realized Gain (Loss) on Other
During the year ended March 31, 2021, we recorded a net realized loss on otherincreased performance of $0.8 million which primarily related to unamortized deferred issuance costs written off upon the redemptioncertain of our Series D Term Preferred Stockportfolio companies, driven partially by the reversal of the impact of COVID-19 on certain of our portfolio companies and the markets in March 2021. Duringwhich they operate, increased comparable multiples used to estimate the year ended March 31, 2020, therefair value of certain of our portfolio companies and the reversal of previously recorded unrealized depreciation of our investments in CTG upon its dissolution. These amounts were no realized gains or losses on other.
Net Unrealized Appreciation (Depreciation)partially offset by the reversal of Investments
During the year ended March 31, 2021, wepreviously recorded net unrealized appreciation of investmentsour investment in Pioneer and Head Country upon exit and the decreased performance of $13.9 million. The realized gains (losses)certain of our portfolio companies. In part, the performance of certain of our portfolio companies was driven by the impact COVID-19, and unrealized appreciation (depreciation) acrossits variants, has had or is expected to have on our investmentsportfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, current and future shutdowns and reopening restrictions, operating challenges, including but not limited to, labor shortages, supply chain delays, increased material costs and demand for their products, and general economic outlook, or the year ended March 31, 2021 were as follows:
Year Ended March 31, 2021 | ||||||||||||||||
Portfolio Company | Realized Gain (Loss) | Unrealized Appreciation (Depreciation) | Reversal of Unrealized (Appreciation) Depreciation | Net Gain (Loss) | ||||||||||||
Pioneer Square Brands, Inc. | $ | — | $ | 26,410 | $ | — | $ | 26,410 | ||||||||
Old World Christmas, Inc. | 3,544 | 6,840 | — | 10,384 | ||||||||||||
SOG Specialty Knives & Tools, LLC | — | 6,364 | — | 6,364 | ||||||||||||
Educators Resource, Inc. | — | 5,631 | — | 5,631 | ||||||||||||
Frontier Packaging, Inc. | 14,321 | 2,534 | (11,869 | ) | 4,986 | |||||||||||
Schylling, Inc. | — | 3,604 | — | 3,604 | ||||||||||||
Head Country, Inc. | — | 2,974 | — | 2,974 | ||||||||||||
Ginsey Home Solutions, Inc. | — | 2,131 | — | 2,131 | ||||||||||||
Diligent Delivery Systems | — | 1,877 | — | 1,877 | ||||||||||||
ImageWorks Display and Marketing Group, Inc. | — | 1,554 | — | 1,554 | ||||||||||||
Horizon Facilities Services, Inc. | — | 963 | — | 963 | ||||||||||||
Cambridge Sound Management, Inc. | 739 | — | — | 739 | ||||||||||||
Alloy Die Casting Co. | 576 | — | — | 576 | ||||||||||||
Mason West, LLC | — | (1,432 | ) | — | (1,432 | ) | ||||||||||
Galaxy Tool Holding Corporation | — | (1,528 | ) | — | (1,528 | ) | ||||||||||
PSI Molded Plastics, Inc. | — | (1,752 | ) | — | (1,752 | ) | ||||||||||
The Maids International, LLC | — | (1,779 | ) | — | (1,779 | ) | ||||||||||
The Mountain Corporation | — | (1,986 | ) | — | (1,986 | ) | ||||||||||
Nth Degree Investment Group, LLC | 113 | (3,649 | ) | — | (3,536 | ) | ||||||||||
D.P.M.S., Inc. | — | (5,045 | ) | — | (5,045 | ) | ||||||||||
SBS Industries Holdings, Inc. | (8,470 | ) | 2,463 | — | (6,007 | ) | ||||||||||
Brunswick Bowling Products, Inc. | — | (20,542 | ) | — | (20,542 | ) | ||||||||||
Other, net (<$1.0 million, net ) | 551 | 172 | (11 | ) | 712 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 11,374 | $ | 25,804 | $ | (11,880 | ) | $ | 25,298 | |||||||
|
|
|
|
|
|
|
|
The primary driversreversal of netsuch impact towards pre-COVID-19 levels.
During the year ended March 31, 2020, we recorded net unrealized depreciation of investments of $78.1 million. The realized gains (losses) and unrealized appreciation (depreciation) across our investments for the year ended March 31, 2020 were as follows:
Year Ended March 31, 2020 | ||||||||||||||||
Portfolio Company | Realized Gain (Loss) | Unrealized Appreciation (Depreciation) | Reversal of Unrealized (Appreciation) Depreciation | Net Gain (Loss) | ||||||||||||
Alloy Die Casting Co. | $ | 20,355 | $ | 8,823 | $ | (12,635 | ) | $ | 16,543 | |||||||
Galaxy Tool Holding Corporation | — | 12,849 | — | 12,849 | ||||||||||||
Nth Degree Investment Group, LLC | 49,975 | 1,978 | (40,847 | ) | 11,106 | |||||||||||
Counsel Press, Inc. | — | 3,874 | — | 3,874 | ||||||||||||
D.P.M.S., Inc. | — | 3,681 | — | 3,681 | ||||||||||||
Old World Christmas, Inc. | — | 3,679 | — | 3,679 | ||||||||||||
Tread Corporation | (2,726 | ) | — | 3,380 | 654 | |||||||||||
Drew Foam Companies, Inc. | 565 | — | — | 565 | ||||||||||||
B-Dry, LLC | (14,452 | ) | — | 14,699 | 247 | |||||||||||
The Maids International, LLC | — | (1,301 | ) | — | (1,301 | ) | ||||||||||
Jackrabbit, Inc. | 3,198 | — | (4,547 | ) | (1,349 | ) | ||||||||||
B+T Group Acquisition, Inc. | — | (1,534 | ) | — | (1,534 | ) | ||||||||||
Frontier Packaging, Inc. | (1,649 | ) | — | (1,649 | ) | |||||||||||
PSI Molded Plastics, Inc. | — | (1,904 | ) | — | (1,904 | ) | ||||||||||
Diligent Delivery Systems | — | (2,192 | ) | — | (2,192 | ) | ||||||||||
The Mountain Corporation | — | (2,597 | ) | — | (2,597 | ) | ||||||||||
Pioneer Square Brands, Inc. | — | (3,200 | ) | — | (3,200 | ) | ||||||||||
SOG Specialty Knives & Tools, LLC | — | (3,449 | ) | — | (3,449 | ) | ||||||||||
Brunswick Bowling Products, Inc. | — | (3,900 | ) | — | (3,900 | ) | ||||||||||
Educators Resource, Inc. | — | (4,460 | ) | — | (4,460 | ) | ||||||||||
Edge Adhesives Holdings, Inc. | — | (4,741 | ) | — | (4,741 | ) | ||||||||||
Meridian Rack & Pinion, Inc. | (13,040 | ) | (5,796 | ) | 13,041 | (5,795 | ) | |||||||||
Horizon Facilities Services, Inc. | — | (7,381 | ) | — | (7,381 | ) | ||||||||||
SBS Industries Holdings, Inc. | — | (8,948 | ) | — | (8,948 | ) | ||||||||||
Ginsey Home Solutions, Inc. | — | (9,426 | ) | — | (9,426 | ) | ||||||||||
J.R. Hobbs Co.—Atlanta, LLC | — | (22,822 | ) | — | (22,822 | ) | ||||||||||
Other, net (<$1.0 million, net ) | 928 | (684 | ) | (130 | ) | 114 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 44,803 | $ | (51,100 | ) | $ | (27,039 | ) | $ | (33,336 | ) | |||||
|
|
|
|
|
|
|
|
The primary drivers of net unrealized depreciation of investments of $78.1 million for the year ended March 31, 2020 were decreased performance of certain of our portfolio companies, a decrease in comparable multiples used to estimate the fair value of a majority of our portfolio companies, and the reversal of previously recorded unrealized appreciation of certain investments upon their exit, partially offset by the reversal of previously recorded unrealized depreciation upon the exit of certain of our investments and an increase in performance of certain of our other portfolio companies. In part, the decrease in multiples used to estimate the fair value, and to a lesser extent the performance of certain of our portfolio companies was driven by the impact COVID-19 has had or is expected to have on our portfolio companies and the markets in which they operate, including government restrictions on the portfolio companies’ ability to operate under historical conditions, shutdowns, demand for products, and general economic outlook.
Across our entire investment portfolio, we recorded $14.5$70.3 million of net unrealized appreciation on our equity investments and $0.6$4.6 million of net unrealized depreciationappreciation on our debt investments for the year ended March 31, 2021.2022. At March 31, 2022, the fair value of our investment portfolio was more than our cost basis by $45.1 million, compared to March 31, 2021, when the fair value of our investment portfolio was less than our cost basis by $29.7 million,
as compared to March 31, 2020, when the fair value of our investment portfolio was less than our cost basis by $43.7 million, representingmillion. This resulted in net unrealized appreciation of $13.9$74.9 million for the year ended March 31, 2021.2022. Our entire portfolio was fair valued at 95.5%106.7% of cost as of March 31, 2022.
Net cash provided by operating activities for the year ended
$669.2 million. As of March 31, 2021, we had equity investments in, or loans to, 28 companies with an aggregate cost basis of $663.6 million. As
Years Ended March 31, | ||||||||
2021 | 2020 | |||||||
Beginning investment portfolio, at fair value | $ | 565,924 | $ | 624,172 | ||||
New investments | 46,902 | 79,080 | ||||||
Disbursements to existing portfolio companies | 48,370 | 66,369 | ||||||
Unscheduled principal repayments | (20,734 | ) | (79,997 | ) | ||||
Net proceeds from sales of investments | (29,689 | ) | (89,184 | ) | ||||
Net realized gain on investments | 9,114 | 43,605 | ||||||
Net unrealized appreciation (depreciation) of investments | 25,805 | (51,100 | ) | |||||
Reversal of net unrealized appreciation of investments | (11,881 | ) | (27,039 | ) | ||||
Amortization of premiums, discounts, and acquisition costs, net | 18 | 18 | ||||||
|
|
|
| |||||
Ending investment portfolio, at fair value | $ | 633,829 | $ | 565,924 | ||||
|
|
|
|
2021:
Years Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Beginning investment portfolio, at fair value | $ | 633,829 | $ | 565,924 | |||||||
New investments | 34,200 | 46,902 | |||||||||
Disbursements to existing portfolio companies | 58,538 | 48,370 | |||||||||
Unscheduled principal repayments | (51,398) | (20,734) | |||||||||
Net proceeds from sales of investments | (49,419) | (29,689) | |||||||||
Net realized gain on investments | 13,746 | 9,114 | |||||||||
Net unrealized appreciation (depreciation) of investments | 100,083 | 25,805 | |||||||||
Reversal of net unrealized appreciation of investments | (25,201) | (11,881) | |||||||||
Amortization of premiums, discounts, and acquisition costs, net | 18 | 18 | |||||||||
Ending investment portfolio, at fair value | $ | 714,396 | $ | 633,829 |
Amount | ||||||
For the fiscal years ending March 31: | 2022 | $ | 38,670 | |||
2023 | 119,200 | |||||
2024 | 118,350 | |||||
2025 | 165,278 | |||||
2026 | 52,250 | |||||
Thereafter | — | |||||
|
| |||||
Total contractual repayments | $ | 493,748 | ||||
Adjustments to cost basis of debt investments | (30 | ) | ||||
Investments in equity securities | 169,845 | |||||
|
| |||||
Total cost basis of investments held as of March 31, 2021: | $ | 663,563 | ||||
|
|
2022:
Amount | |||||||||||
For the fiscal years ending March 31: | |||||||||||
2023 | $ | 92,888 | |||||||||
2024 | 97,418 | ||||||||||
2025 | 169,334 | ||||||||||
2026 | 78,231 | ||||||||||
2027 | 71,245 | ||||||||||
Thereafter | 1,500 | ||||||||||
Total contractual repayments | $ | 510,616 | |||||||||
Adjustments to cost basis of debt investments | (12) | ||||||||||
Investments in equity securities | 158,644 | ||||||||||
Total cost basis of investments held as of March 31, 2022: | $ | 669,248 |
Net cash used in financing activities for the year ended March 31, 2020 was $34.9 million, which was primarily a result of $33.9 million in distributions to common stockholders and $3.8 million of net repayments on our Credit Facility, partially offset by $3.1 million of net proceeds from the issuance of common stock under the Common Stock ATM Program.
Net cash used in financing activities for the year ended March 31, 2019 was $94.0 million, which was primarily a result of the redemption of our Series B Term Preferred Stock and Series C Term Preferred Stock of $81.7 million, $54.0 million of net repayments on the Credit Facility, and $30.5 million in distributions to common stockholders, partially offset by $72.1 million of net proceeds from the issuance of our Series E Term Preferred Stock and $1.8 million of net proceeds from the issuance of common stock under the Common Stock ATM Program.
Distributions and Dividends to Stockholders
2022.
have their cash distributions automatically reinvested in additional shares of our common stock. Common stockholders who do not make such election will receive their distributions in cash. Any distributions reinvested under the plan will be taxable to a common stockholder to the same extent, and with the same character, as if the common stockholder had received the distribution in cash. The common stockholder generally will have an adjusted basis in the additional common shares purchased through the plan equal to the dollar amount that would have been received if the U.S. stockholder had received the dividend or distribution in cash. The additional common shares will have a new holding period commencing on the day following the date on which the shares are credited to the common stockholder’s account. Computershare purchases shares in the open market in connection with the obligations under the plan. The Computershare dividend reinvestment plan is not open to holders of our preferred stock.
Program during the year ended March 31, 2022. During the year ended March 31, 2021, we sold 155,560 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $11.39 per share and raised approximately $1.8 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $11.17 and resulted in total net proceeds of approximately $1.7 million. These sales were above our then current estimated NAV per share.
During the year ended March 31, 2020, we sold 227,004 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $13.80 per share and raised approximately $3.1 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $13.55 and resulted in total net proceeds of approximately $3.1 million. These sales were above our then current estimated NAV per share.
During the year ended March 31, 2019, we sold 168,824 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $11.09 per share and raised approximately $1.9 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $10.87 and resulted in total net proceeds of approximately $1.8 million. Certain of these sales were below our then-current estimated NAV per share during the sales period, with a discount of $0.002 per share, when comparing the sales price per share, after deducting commissions, to the then-current estimated NAV per share; however, the net dilutive effect (after commissions and offering costs borne by us) of these sales was $0.00 per common share as a result of the small number of shares sold at a slight discount to NAV per share and resulting rounding. In aggregate, the sales during the year ended March 31, 2019 were above our then-current estimated NAV per share.
We anticipate issuing equity securities to obtain additional capital in the future. However, we cannot determine the timing or terms of any future equity issuances or whether we will be able to issue equity on terms favorable to us, or at all. When our common stock is trading at a price below NAV per share, the 1940 Act places regulatory constraints on our ability to obtain additional capital by issuing common stock. Generally, the 1940 Act provides that we may not issue and sell our common stock at a price below our NAV per common share, other than to our then existing common stockholders pursuant to a rights offering, without first obtaining approval from our stockholders and our independent directors and meeting other stated requirements. On March 31, 2021,2022, the closing market price of our common stock was $12.23$16.13 per share, representing a 6.2%20.1% premium to our NAV of $13.43 per share of $11.52 as of March 31, 2021.
At our 2020 Annual Meeting of Stockholders held on August 20, 2020, our stockholders approved a proposal authorizing us with the subsequent approval of our Board of Directors, to issue and sell shares of our common stock at a price below our then current NAV per common share for a period of one year from the date of such approval, provided that the number of shares issued and sold pursuant to such authority does not exceed 25.0% of our then-outstanding common stock immediately prior to each such sale. At our 2021 Annual Meeting of Stockholders, scheduled to take place in August 2021, we intend to ask our stockholders to vote in favor of a similar proposal so that it may be in effect for another year.
2022.
Ourdate, prior to redemption in August 2021. Prior to actual redemption in August 2021, the Series E Term Preferred Stock is not convertible into our common stock or any other security and providesprovided for a fixed dividend equal to 6.375% per year, payable monthly (which equates to $6.0 million per year). We are required to redeem all outstanding shares of our Series E Term Preferred Stock on August 31, 2025, for cash at a redemption price equal to $25.00 per share, plus an amount equal to accumulated but unpaid dividends, if any, to, but excluding, the date of redemption. In addition, two other potential mandatory redemption triggers are as follows: (1) upon the occurrence of certain events that would constitute a change in control of us, we would be required to redeem all of our outstanding Series E Term Preferred Stock, and (2) if we fail to maintain asset coverage as required by Sections 18 and 61 of the 1940 Act (which is currently 150%) and are unable to correct such failure within a specific amount of time, we are required to redeem a portion of our outstanding Series E Term Preferred Stock or otherwise cure the asset coverage redemption trigger (we may also redeem additional securities to cause asset coverage to be up to 200%). We may also voluntarily redeem all or a portion of our Series E Term Preferred Stock at our sole option at the redemption price at any time.
In August 2018, we used the proceeds from the issuance of our Series E Term Preferred Stock, along with borrowings under the Credit Facility, to voluntarily redeem all outstanding shares of our Series B Term Preferred Stock and Series C Term Preferred Stock, each of which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption of our Series B Term Preferred Stock and our Series C Term Preferred Stock, we incurred a loss on extinguishment of debt of $1.7 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.
monthly.
Program during the year ended March 31, 2022. During the year ended March 31, 2021, we sold 784,853 shares of our Series E Term Preferred Stock under the Series E ATM Program with an aggregate liquidation preference of $19.6 million. The weighted-average gross price per share net of discounts was $24.56 and resulted in gross proceeds of approximately $19.3 million. After deducting commissions and offering costs borne by us, net proceeds totaled approximately $19.1 million.
Our mandatorily redeemable preferred stock has Prior to redemption in March 2021, the Series D Term Preferred Stock provided for a preference overfixed dividend equal to 6.25% per year, payable monthly.
redemption.
Interest is payable monthly during the term of the Credit Facility. Available borrowings are subject to various constraints and applicable advance rates, which are generally based on the size, characteristics, and quality of the collateral pledged by Business Investment. The Credit Facility also requires that any interest and principal payments on pledged loans be remitted directly by the borrower into a lockbox account with KeyBank. KeyBank is also the trustee of the account and generally remits the collected funds to us once a month.
as discounts to the aggregate principal amount on our accompanyingConsolidated Statements of Assets and Liabilities and are being amortized over the period ending May 1, 2026, the maturity date.
As
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations(A) | Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
Credit Facility(B) | $ | 22,400 | $ | — | $ | — | $ | 22,400 | $ | — | ||||||||||
Notes payable | 127,938 | — | — | — | 127,938 | |||||||||||||||
Mandatorily redeemable preferred stock | 94,371 | — | — | 94,371 | — | |||||||||||||||
Secured borrowing | 5,096 | — | — | 5,096 | — | |||||||||||||||
Interest payments on obligations(C) | 72,049 | 15,133 | 30,274 | 26,109 | 533 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 321,854 | $ | 15,133 | $ | 30,274 | $ | 147,976 | $ | 128,471 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period Contractual Obligations(A) Total Less than
1 Year1-3 Years 3-5 Years More than
5 YearsCredit Facility(B) $ — $ — $ — $ — $ — Notes payable 262,488 — — 127,938 134,550 Secured borrowing 5,096 — 5,096 — — Interest payments on obligations(C) 79,437 15,143 30,205 20,079 14,010 Total $ 347,021 $ 15,143 $ 35,301 $ 148,017 $ 148,560
As of March 31, | ||||||||
Rating | 2021 | 2020 | ||||||
Highest | 9.0 | 9.0 | ||||||
Average | 6.2 | 6.5 | ||||||
Weighted-average | 6.6 | 6.9 | ||||||
Lowest | 4.0 | 4.0 |
As of March 31, Rating 2022 2021 Highest 9.0 9.0 Average 6.5 6.2 Weighted-average 7.0 6.6 Lowest 3.0 4.0
2021
.
|
We target to have approximately 90% of the loans in our portfolio at variable rates or variable rates with a floor mechanism, and approximately up to 10% at fixed rates. As of March 31, 20212022 and 2020,2021, all of our variable-rate loans have rates associated with the current 30-day LIBOR rate and our total debt investment portfolio consisted of the following breakdown based on the principal balance:
2021 | 2020 | |||||||
Rates: | ||||||||
Variable rates with a floor | 97.7 | % | 97.5 | % | ||||
Fixed rates | 2.3 | 2.5 | ||||||
|
|
|
| |||||
Total | 100.0 | % | 100.0 | % | ||||
|
|
|
|
As of March 31, | ||||||||||||||
Rates: | 2022 | 2021 | ||||||||||||
Variable rates with a floor | 100.0 | % | 97.7 | % | ||||||||||
Fixed rates | — | % | 2.3 | % | ||||||||||
Total | 100.0 | % | 100.0 | % |
2021.
Basis Point Change(A) | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Assets Resulting from Operations | |||||||||
Up 300 basis points | $ | 5,385 | $ | 593 | $ | 4,792 | ||||||
Up 200 basis points | 1,511 | 366 | 1,145 | |||||||||
Up 100 basis points | 57 | 139 | (82 | ) | ||||||||
Down 11 basis points | — | — | — |
|
Basis Point Change(A) | Increase (Decrease) in Interest Income | Increase (Decrease) in Interest Expense | Net Increase (Decrease) in Net Assets Resulting from Operations | |||||||||||||||||
Up 300 basis points | $ | 6,341 | $ | — | $ | 6,341 | ||||||||||||||
Up 200 basis points | $ | 2,254 | $ | — | $ | 2,254 | ||||||||||||||
Up 100 basis points | $ | 126 | $ | — | $ | 126 | ||||||||||||||
Down 45 basis points | $ | — | $ | — | $ | — |
|
Consolidated Statements of Assets and Liabilities as of March 31, 2022 and March 31, 2021 | ||||||||
Consolidated Statements of Changes in Net Assets for the years ended March 31, 2022, 2021 | ||||||||
2022.
Critical Audit Matters
Arlington, Virginia
2022
March 31, | ||||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Investments at fair value | ||||||||
Non-Control/Non-Affiliate investments (Cost of $297,400 and $276,589, respectively) | $ | 298,222 | $ | 292,129 | ||||
Affiliate investments (Cost of $341,651 and $311,481, respectively) | 307,977 | 247,637 | ||||||
Control investments (Cost of $24,512 and $21,512, respectively) | 27,630 | 26,158 | ||||||
Cash and cash equivalents | 2,062 | 2,778 | ||||||
Restricted cash and cash equivalents | 336 | 1,282 | ||||||
Interest receivable | 3,369 | 3,429 | ||||||
Due from administrative agent | 1,164 | 771 | ||||||
Deferred financing costs, net | 1,359 | 991 | ||||||
Other assets, net | 1,612 | 1,202 | ||||||
|
|
|
| |||||
TOTAL ASSETS | $ | 643,731 | $ | 576,377 | ||||
|
|
|
| |||||
LIABILITIES | ||||||||
Borrowings: | ||||||||
Line of credit at fair value (Cost of $22,400 and $49,200, respectively) | $ | 22,400 | $ | 49,200 | ||||
Notes payable, net | 123,883 | — | ||||||
Secured borrowing | 5,096 | 5,096 | ||||||
|
|
|
| |||||
Total borrowings | 151,379 | 54,296 | ||||||
Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share; 5,990,000 and 6,500,000 shares authorized; 3,774,853 and 5,290,000 shares issued and outstanding, respectively, net | 92,209 | 129,160 | ||||||
Accounts payable and accrued expenses | 563 | 1,084 | ||||||
Interest payable | 591 | 138 | ||||||
Fees due to Adviser(A) | 15,664 | 7,178 | ||||||
Fee due to Administrator(A) | 577 | 582 | ||||||
Other liabilities | 384 | 14,908 | ||||||
|
|
|
| |||||
TOTAL LIABILITIES | 261,367 | 207,346 | ||||||
|
|
|
| |||||
Commitments and contingencies(B) | ||||||||
NET ASSETS | $ | 382,364 | $ | 369,031 | ||||
|
|
|
| |||||
ANALYSIS OF NET ASSETS | ||||||||
Common stock, $0.001 par value per share, 100,000,000 shares authorized; 33,205,023 and 33,049,463 shares issued and outstanding, respectively | $ | 33 | $ | 33 | ||||
Capital in excess of par value | 400,796 | 401,023 | ||||||
Cumulative net unrealized depreciation of investments | (29,734 | ) | (43,658 | ) | ||||
Underdistributed net investment income | 2,592 | 6,370 | ||||||
Accumulated net realized gain in excess of distributions | 8,677 | 5,263 | ||||||
|
|
|
| |||||
Total distributable earnings | (18,465 | ) | (32,025 | ) | ||||
|
|
|
| |||||
TOTAL NET ASSETS | $ | 382,364 | $ | 369,031 | ||||
|
|
|
| |||||
NET ASSET VALUE PER SHARE | $ | 11.52 | $ | 11.17 | ||||
|
|
|
|
|
|
March 31, | |||||||||||
2022 | 2021 | ||||||||||
ASSETS | |||||||||||
Investments at fair value | |||||||||||
Non-Control/Non-Affiliate investments (Cost of $388,773 and $297,400, respectively) | $ | 442,124 | $ | 298,222 | |||||||
Affiliate investments (Cost of $279,855 and $341,651, respectively) | 271,559 | 307,977 | |||||||||
Control investments (Cost of $620 and $24,512, respectively) | 713 | 27,630 | |||||||||
Cash and cash equivalents | 14,190 | 2,062 | |||||||||
Restricted cash and cash equivalents | 305 | 336 | |||||||||
Interest receivable | 3,042 | 3,369 | |||||||||
Due from administrative agent | 6,406 | 1,164 | |||||||||
Deferred financing costs, net | 895 | 1,359 | |||||||||
Other assets, net | 1,178 | 1,612 | |||||||||
TOTAL ASSETS | $ | 740,412 | $ | 643,731 | |||||||
LIABILITIES | |||||||||||
Borrowings: | |||||||||||
Line of credit at fair value (Cost of $0 and $22,400, respectively) | $ | — | $ | 22,400 | |||||||
Notes payable, net | 256,252 | 123,883 | |||||||||
Secured borrowing | 5,096 | 5,096 | |||||||||
Total borrowings | 261,348 | 151,379 | |||||||||
Mandatorily redeemable preferred stock, $0.001 par value per share, $25.00 liquidation preference per share; 0 and 5,990,000 shares authorized; 0 and 3,774,853 shares issued and outstanding, respectively, net | — | 92,209 | |||||||||
Accounts payable and accrued expenses | 799 | 563 | |||||||||
Interest payable | 2,190 | 591 | |||||||||
Fees due to Adviser(A) | 29,288 | 15,664 | |||||||||
Fee due to Administrator(A) | 627 | 577 | |||||||||
Other liabilities | 330 | 384 | |||||||||
TOTAL LIABILITIES | 294,582 | 261,367 | |||||||||
Commitments and contingencies(B) | |||||||||||
NET ASSETS | $ | 445,830 | $ | 382,364 | |||||||
ANALYSIS OF NET ASSETS | |||||||||||
Common stock, $0.001 par value per share, 100,000,000 shares authorized; 33,205,023 and 33,205,023 shares issued and outstanding, respectively | $ | 33 | $ | 33 | |||||||
Capital in excess of par value | 397,948 | 400,796 | |||||||||
Cumulative net unrealized appreciation (depreciation) of investments | 45,148 | (29,734) | |||||||||
(Overdistributed) underdistributed net investment income | (12,995) | 2,592 | |||||||||
Accumulated net realized gain in excess of distributions | 15,696 | 8,677 | |||||||||
Total distributable earnings | 47,849 | (18,465) | |||||||||
TOTAL NET ASSETS | $ | 445,830 | $ | 382,364 | |||||||
NET ASSET VALUE PER SHARE | $ | 13.43 | $ | 11.52 |
74
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
INVESTMENT INCOME | ||||||||||||
Interest income: | ||||||||||||
Non-Control/Non-Affiliate investments | $ | 26,031 | $ | 26,744 | $ | 23,977 | ||||||
Affiliate investments | 20,208 | 21,894 | 24,767 | |||||||||
Control investments | 920 | 848 | 848 | |||||||||
Cash and cash equivalents | 5 | 68 | 40 | |||||||||
|
|
|
|
|
| |||||||
Total interest income | 47,164 | 49,554 | 49,632 | |||||||||
Dividend income: | ||||||||||||
Non-Control/Non-Affiliate investments | 910 | 6,351 | 4,337 | |||||||||
Affiliate investments | 6,165 | 3,080 | (401 | ) | ||||||||
|
|
|
|
|
| |||||||
Total dividend income | 7,075 | 9,431 | 3,936 | |||||||||
Success fee income: | ||||||||||||
Non-Control/Non-Affiliate investments | 871 | 818 | 2,099 | |||||||||
Affiliate investments | 1,517 | 2,121 | 1,996 | |||||||||
Control investments | — | — | 2,000 | |||||||||
|
|
|
|
|
| |||||||
Total success fee income | 2,388 | 2,939 | 6,095 | |||||||||
|
|
|
|
|
| |||||||
Total investment income | 56,627 | 61,924 | 59,663 | |||||||||
|
|
|
|
|
| |||||||
EXPENSES | ||||||||||||
Base management fee(A) | 12,115 | 12,145 | 12,752 | |||||||||
Loan servicing fee(A) | 7,082 | 6,859 | 6,827 | |||||||||
Incentive fee(A) | 8,778 | (2,380 | ) | 22,254 | ||||||||
Administration fee(A) | 1,619 | 1,476 | 1,312 | |||||||||
Interest expense on borrowings | 4,440 | 3,958 | 6,147 | |||||||||
Dividends on mandatorily redeemable preferred stock | 8,674 | 8,359 | 8,747 | |||||||||
Amortization of deferred financing costs and discounts | 1,750 | 1,492 | 1,610 | |||||||||
Professional fees | 1,935 | 1,881 | 1,272 | |||||||||
Other general and administrative expenses | 2,327 | 3,067 | 3,537 | |||||||||
|
|
|
|
|
| |||||||
Expenses before credits from Adviser | 48,720 | 36,857 | 64,458 | |||||||||
|
|
|
|
|
| |||||||
Credits to base management fee – loan servicing fee(A) | (7,082 | ) | (6,859 | ) | (6,827 | ) | ||||||
Credits to fees from Adviser—other(A) | (2,949 | ) | (4,436 | ) | (5,509 | ) | ||||||
|
|
|
|
|
| |||||||
Total expenses, net of credits to fees | 38,689 | 25,562 | 52,122 | |||||||||
|
|
|
|
|
| |||||||
NET INVESTMENT INCOME | $ | 17,938 | $ | 36,362 | $ | 7,541 | ||||||
|
|
|
|
|
|
|
Year Ended March 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
INVESTMENT INCOME | |||||||||||||||||
Interest income: | |||||||||||||||||
Non-Control/Non-Affiliate investments | $ | 34,531 | $ | 26,031 | $ | 26,744 | |||||||||||
Affiliate investments | 24,617 | 20,208 | 21,894 | ||||||||||||||
Control investments | 500 | 920 | 848 | ||||||||||||||
Cash and cash equivalents | 1 | 5 | 68 | ||||||||||||||
Total interest income | 59,649 | 47,164 | 49,554 | ||||||||||||||
Dividend income: | |||||||||||||||||
Non-Control/Non-Affiliate investments | 6 | 910 | 6,351 | ||||||||||||||
Affiliate investments | 2,589 | 6,165 | 3,080 | ||||||||||||||
Total dividend income | 2,595 | 7,075 | 9,431 | ||||||||||||||
Success fee income: | |||||||||||||||||
Non-Control/Non-Affiliate investments | 2,647 | 871 | 818 | ||||||||||||||
Affiliate investments | 7,661 | 1,517 | 2,121 | ||||||||||||||
Total success fee income | 10,308 | 2,388 | 2,939 | ||||||||||||||
Total investment income | 72,552 | 56,627 | 61,924 | ||||||||||||||
EXPENSES | |||||||||||||||||
Base management fee(A) | 14,113 | 12,115 | 12,145 | ||||||||||||||
Loan servicing fee(A) | 7,178 | 7,082 | 6,859 | ||||||||||||||
Incentive fee(A) | 26,360 | 8,778 | (2,380) | ||||||||||||||
Administration fee(A) | 1,806 | 1,619 | 1,476 | ||||||||||||||
Interest expense on borrowings | 13,078 | 4,440 | 3,958 | ||||||||||||||
Dividends on mandatorily redeemable preferred stock | 2,306 | 8,674 | 8,359 | ||||||||||||||
Amortization of deferred financing costs and discounts | 1,803 | 1,750 | 1,492 | ||||||||||||||
Professional fees | 1,431 | 1,935 | 1,881 | ||||||||||||||
Other general and administrative expenses | 3,162 | 2,327 | 3,067 | ||||||||||||||
Expenses before credits from Adviser | 71,237 | 48,720 | 36,857 | ||||||||||||||
Credits to base management fee – loan servicing fee(A) | (7,178) | (7,082) | (6,859) | ||||||||||||||
Credits to fees from Adviser - other(A) | (6,497) | (2,949) | (4,436) | ||||||||||||||
Total expenses, net of credits to fees | 57,562 | 38,689 | 25,562 | ||||||||||||||
NET INVESTMENT INCOME | $ | 14,990 | $ | 17,938 | $ | 36,362 | |||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | |||||||||||||||||
Net realized gain (loss): | |||||||||||||||||
Non-Control/Non-Affiliate investments | $ | 256 | $ | 6,401 | $ | 36,991 | |||||||||||
Affiliate investments | 14,186 | 4,973 | 7,812 | ||||||||||||||
Other | (1,998) | (782) | — | ||||||||||||||
Total net realized gain | 12,444 | 10,592 | 44,803 | ||||||||||||||
Taxes on deemed distribution of long-term capital gains | — | — | (10,260) | ||||||||||||||
Net unrealized appreciation (depreciation): | |||||||||||||||||
Non-Control/Non-Affiliate investments | 52,529 | (14,718) | (44,208) | ||||||||||||||
Affiliate investments | 25,378 | 30,170 | (46,781) | ||||||||||||||
Control investments | (3,025) | (1,528) | 12,850 | ||||||||||||||
Total net unrealized appreciation (depreciation) | 74,882 | 13,924 | (78,139) | ||||||||||||||
Net realized and unrealized gain (loss), net of taxes on deemed distribution of long-term capital gains | 87,326 | 24,516 | (43,596) | ||||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 102,316 | $ | 42,454 | $ | (7,234) | |||||||||||
BASIC AND DILUTED PER COMMON SHARE: | |||||||||||||||||
Net investment income | $ | 0.45 | $ | 0.54 | $ | 1.11 | |||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 3.08 | $ | 1.28 | $ | (0.22) | |||||||||||
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING: | |||||||||||||||||
Basic and diluted | 33,205,023 | 33,176,760 | 32,865,840 |
GLADSTONE75
(DOLLAR AMOUNTSCHANGES IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) | ||||||||||||
Net realized gain (loss): | ||||||||||||
Non-Control/Non-Affiliate investments | $ | 6,401 | $ | 36,991 | $ | 12,815 | ||||||
Affiliate investments | 4,973 | 7,812 | 55,741 | |||||||||
Other | (782 | ) | — | (1,687 | ) | |||||||
|
|
|
|
|
| |||||||
Total net realized gain | 10,592 | 44,803 | 66,869 | |||||||||
|
|
|
|
|
| |||||||
Taxes on deemed distribution of long-term capital gains | — | (10,260 | ) | (13,500 | ) | |||||||
Net unrealized appreciation (depreciation): | ||||||||||||
Non-Control/Non-Affiliate investments | (14,718 | ) | (44,208 | ) | 32,537 | |||||||
Affiliate investments | 30,170 | (46,781 | ) | (13,209 | ) | |||||||
Control investments | (1,528 | ) | 12,850 | 852 | ||||||||
Other | — | — | 500 | |||||||||
|
|
|
|
|
| |||||||
Total net unrealized appreciation (depreciation) | 13,924 | (78,139 | ) | 20,680 | ||||||||
|
|
|
|
|
| |||||||
Net realized and unrealized gain (loss), net of taxes on deemed distribution of long-term capital gains | 24,516 | (43,596 | ) | 74,049 | ||||||||
|
|
|
|
|
| |||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | 42,454 | $ | (7,234 | ) | $ | 81,590 | |||||
|
|
|
|
|
| |||||||
BASIC AND DILUTED PER COMMON SHARE: | ||||||||||||
Net investment income | $ | 0.54 | $ | 1.11 | $ | 0.23 | ||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets resulting from operations | $ | 1.28 | $ | (0.22 | ) | $ | 2.49 | |||||
|
|
|
|
|
| |||||||
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING: | ||||||||||||
Basic and diluted | 33,176,760 | 32,865,840 | 32,807,597 |
NET ASSETS
Year Ended March 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
NET ASSETS, BEGINNING OF YEAR | $ | 382,364 | $ | 369,031 | $ | 407,110 | |||||||||||
OPERATIONS | |||||||||||||||||
Net investment income | $ | 14,990 | $ | 17,938 | $ | 36,362 | |||||||||||
Net realized gain on investments | 14,442 | 11,374 | 44,803 | ||||||||||||||
Taxes on deemed distributions of long-term capital gains | — | — | (10,260) | ||||||||||||||
Net realized loss on other | (1,998) | (782) | — | ||||||||||||||
Net unrealized appreciation (depreciation) of investments | 74,882 | 13,924 | (78,139) | ||||||||||||||
Net increase (decrease) in net assets from operations | 102,316 | 42,454 | (7,234) | ||||||||||||||
DISTRIBUTIONS(A) | |||||||||||||||||
Distributions to common stockholders from net investment income ($0.91, $0.83, and $0.75 per share, respectively) | (30,244) | (27,407) | (24,790) | ||||||||||||||
Distributions to common stockholders from realized gains ($0.26, $0.10, and $0.28 per share, respectively) | (8,606) | (3,451) | (9,130) | ||||||||||||||
Net decrease in net assets from distributions | (38,850) | (30,858) | (33,920) | ||||||||||||||
CAPITAL ACTIVITY | |||||||||||||||||
Issuance of common stock | — | 1,772 | 3,131 | ||||||||||||||
Discounts, commissions, and offering costs for issuance of common stock | — | (35) | (56) | ||||||||||||||
Net increase in net assets from capital activity | — | 1,737 | 3,075 | ||||||||||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 63,466 | 13,333 | (38,079) | ||||||||||||||
NET ASSETS, END OF YEAR(A) | $ | 445,830 | $ | 382,364 | $ | 369,031 |
GLADSTONE INVESTMENT CORPORATION
76
(IN THOUSANDS)
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
NET ASSETS, BEGINNING OF YEAR | $ | 369,031 | $ | 407,110 | $ | 354,200 | ||||||
OPERATIONS | ||||||||||||
Net investment income | $ | 17,938 | $ | 36,362 | $ | 7,541 | ||||||
Net realized gain on investments | 11,374 | 44,803 | 68,556 | |||||||||
Taxes on deemed distributions of long-term capital gains | — | (10,260 | ) | (13,500 | ) | |||||||
Net realized loss on other | (782 | ) | — | (1,687 | ) | |||||||
Net unrealized appreciation (depreciation) of investments | 13,924 | (78,139 | ) | 20,180 | ||||||||
Net unrealized depreciation of other | — | — | 500 | |||||||||
|
|
|
|
|
| |||||||
Net increase (decrease) in net assets from operations | 42,454 | (7,234 | ) | 81,590 | ||||||||
|
|
|
|
|
| |||||||
DISTRIBUTIONS(A) | ||||||||||||
Distributions to common stockholders from net investment income ($0.83, $0.75, and $0.69 per share, respectively) | (27,407 | ) | (24,790 | ) | (22,670 | ) | ||||||
Distributions to common stockholders from realized gains ($0.10, $0.28, and $0.24 per share, respectively) | (3,451 | ) | (9,130 | ) | (7,846 | ) | ||||||
|
|
|
|
|
| |||||||
Net decrease in net assets from distributions | (30,858 | ) | (33,920 | ) | (30,516 | ) | ||||||
|
|
|
|
|
| |||||||
CAPITAL ACTIVITY | ||||||||||||
Issuance of common stock | 1,772 | 3,131 | 1,873 | |||||||||
Discounts, commissions, and offering costs for issuance of common stock | (35 | ) | (56 | ) | (37 | ) | ||||||
|
|
|
|
|
| |||||||
Net increase in net assets from capital activity | 1,737 | 3,075 | 1,836 | |||||||||
|
|
|
|
|
| |||||||
TOTAL INCREASE (DECREASE) IN NET ASSETS | 13,333 | (38,079 | ) | 52,910 | ||||||||
|
|
|
|
|
| |||||||
NET ASSETS, END OF YEAR(A) | $ | 382,364 | $ | 369,031 | $ | 407,110 | ||||||
|
|
|
|
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 42,454 | $ | (7,234 | ) | $ | 81,590 | |||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash (used in) provided by operating activities: | ||||||||||||
Purchase of investments | (95,272 | ) | (145,449 | ) | (91,936 | ) | ||||||
Principal repayments of investments | 20,734 | 79,997 | 45,214 | |||||||||
Net proceeds from the sale of investments | 31,047 | 89,943 | 109,437 | |||||||||
Net realized gain on investments | (11,374 | ) | (44,803 | ) | (68,058 | ) | ||||||
Net realized loss on other | 782 | — | 1,670 | |||||||||
Net unrealized (appreciation) depreciation of investments | (13,924 | ) | 78,139 | (20,180 | ) | |||||||
Net unrealized depreciation of other | — | — | (500 | ) | ||||||||
Amortization of premiums, discounts, and acquisition costs, net | (18 | ) | (18 | ) | (18 | ) | ||||||
Amortization of deferred financing costs and discounts | 1,750 | 1,492 | 1,610 | |||||||||
Bad debt expense, net of recoveries | 88 | 433 | 1,668 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Decrease (increase) in interest receivable | 16 | (621 | ) | (287 | ) | |||||||
(Increase) decrease in due from administrative agent | (393 | ) | 514 | 1,039 | ||||||||
Increase in other assets, net | (19 | ) | — | (558 | ) | |||||||
(Decrease) increase in accounts payable and accrued expenses | (521 | ) | 376 | 151 | ||||||||
Increase (decrease) in interest payable | 453 | (46 | ) | (175 | ) | |||||||
Increase (decrease) in fees due to Adviser(A) | 8,442 | (17,546 | ) | 18,053 | ||||||||
(Decrease) increase in fee due to Administrator(A) | (5 | ) | 238 | 27 | ||||||||
(Decrease) increase in other liabilities | (13,972 | ) | (106 | ) | 14,868 | |||||||
|
|
|
|
|
| |||||||
Net cash (used in) provided by operating activities | (29,732 | ) | 35,309 | 93,615 | ||||||||
|
|
|
|
|
| |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Proceeds from issuance of common stock | 1,772 | 3,131 | 1,873 | |||||||||
Discounts, commissions, and offering costs for issuance of common stock | (31 | ) | (56 | ) | (28 | ) | ||||||
Proceeds from line of credit | 125,900 | 188,300 | 205,500 | |||||||||
Repayments on line of credit | (152,700 | ) | (192,100 | ) | (259,500 | ) | ||||||
Proceeds from issuance of notes payable | 127,938 | — | — | |||||||||
Proceeds from issuance of mandatorily redeemable preferred stock | 19,276 | — | 74,750 | |||||||||
Redemption of mandatorily redeemable preferred stock | (57,500 | ) | — | (81,650 | ) | |||||||
Deferred financing and offering costs | (5,727 | ) | (209 | ) | (4,406 | ) | ||||||
Distributions paid to common stockholders | (30,858 | ) | (33,920 | ) | (30,516 | ) | ||||||
|
|
|
|
|
| |||||||
Net cash provided by (used in) financing activities | 28,070 | (34,854 | ) | (93,977 | ) | |||||||
|
|
|
|
|
| |||||||
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS | (1,662 | ) | 455 | (362 | ) | |||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF YEAR | 4,060 | 3,605 | 3,967 | |||||||||
|
|
|
|
|
| |||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS, END OF YEAR | $ | 2,398 | $ | 4,060 | $ | 3,605 | ||||||
|
|
|
|
|
| |||||||
CASH PAID FOR INTEREST | $ | 3,169 | $ | 2,362 | $ | 5,665 | ||||||
|
|
|
|
| �� | |||||||
NON-CASH ACTIVITIES(B) | $ | — | $ | — | $ | 20,099 | ||||||
|
|
|
|
|
|
|
(A)Refer to Note 4 — Related Party Transactions in the accompanying Notes to Consolidated Financial Statements for additional information. Supplemental disclosures of non-cash operating activities: • |
In January 2019,March 2022, we restructured two of our existing first lien term loansloan to SOG Specialty Knives & Tools, LLCJ.R. Hobbs with a total cost basis of $18.4$36.0 million into a new $8.4$26.0 million first lien term loan, which resulted in a realized loss of $10.0 million.
In March 2019, we restructured our existing second lien term loans and delayed draw term loan to The Mountain Corporation with a total cost basis of $21.7 million into a new $11.7 million second lien term loan, which resulted in a realized loss of $10.0 million.
77
2022
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
NON-CONTROL/NON-AFFILIATE INVESTMENTS(N)—77.9% | ||||||||||||
Secured First Lien Debt—48.9% | ||||||||||||
Diversified/Conglomerate Manufacturing—1.1% | ||||||||||||
Phoenix Door Systems, Inc.—Line of Credit, $0 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)(L) | $ | 1,150 | $ | 1,150 | $ | 1,150 | ||||||
Phoenix Door Systems, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)(L) | 3,200 | 3,200 | 3,200 | |||||||||
|
|
|
| |||||||||
4,350 | 4,350 | |||||||||||
Diversified/Conglomerate Services—30.6% | ||||||||||||
Bassett Creek Services, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)(K) | 37,500 | 37,500 | 36,656 | |||||||||
Counsel Press, Inc.—Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)(L) | 21,100 | 21,100 | 21,100 | |||||||||
Counsel Press, Inc.—Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)(L) | 6,400 | 6,400 | 6,400 | |||||||||
Horizon Facilities Services, Inc.—Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)(G)(L) | 27,700 | 27,700 | 27,700 | |||||||||
Mason West, LLC—Line of Credit, $3,000 available (L+8.0%, 10.0% Cash, Due 7/2021)(L) | — | — | — | |||||||||
Mason West, LLC—Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)(L) | 25,250 | 25,250 | 25,250 | |||||||||
|
|
|
| |||||||||
117,950 | 117,106 | |||||||||||
Healthcare, Education, and Childcare—5.2% | ||||||||||||
Educators Resource, Inc.—Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)(L) | 20,000 | 20,000 | 20,000 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—6.4% | ||||||||||||
Brunswick Bowling Products, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)(L) | 17,700 | 17,700 | 17,700 | |||||||||
Brunswick Bowling Products, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)(L) | 6,850 | 6,850 | 6,850 | |||||||||
|
|
|
| |||||||||
24,550 | 24,550 | |||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment —5.6% | ||||||||||||
Schylling, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 13,081 | 13,081 | 13,081 | |||||||||
Schylling, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 8,500 | 8,500 | 8,500 | |||||||||
|
|
|
| |||||||||
21,581 | 21,581 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 188,431 | $ | 187,587 | ||||||||
|
|
|
|
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(I) | Cost | Fair Value | |||||||||||||||||
NON-CONTROL/NON-AFFILIATE INVESTMENTS(M) – 99.2% | ||||||||||||||||||||
Secured First Lien Debt – 52.4% | ||||||||||||||||||||
Diversified/Conglomerate Manufacturing – 1.1% | ||||||||||||||||||||
Phoenix Door Systems, Inc – Line of Credit, $150 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2024)(J) | $ | 2,000 | $ | 2,000 | $ | 1,920 | ||||||||||||||
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)(J) | 3,200 | 3,200 | 3,072 | |||||||||||||||||
5,200 | 4,992 | |||||||||||||||||||
Diversified/Conglomerate Services – 28.8% | ||||||||||||||||||||
Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)(K) | 48,000 | 48,000 | 48,000 | |||||||||||||||||
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)(K) | 21,100 | 21,100 | 21,100 | |||||||||||||||||
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)(K) | 6,400 | 6,400 | 6,400 | |||||||||||||||||
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)(K) | 27,700 | 27,700 | 27,700 | |||||||||||||||||
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)(K) | 25,250 | 25,250 | 25,250 | |||||||||||||||||
128,450 | 128,450 | |||||||||||||||||||
Healthcare, Education, and Childcare – 4.5% | ||||||||||||||||||||
Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (K) | 20,000 | 20,000 | 20,000 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.5% | ||||||||||||||||||||
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (K) | 17,700 | 17,700 | 17,700 | |||||||||||||||||
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (K) | 6,850 | 6,850 | 6,850 | |||||||||||||||||
24,550 | 24,550 | |||||||||||||||||||
Hotels, Motels, Inns, and Gaming Total – 6.2% | ||||||||||||||||||||
Nocturne Villa Rentals, Inc. – Line of Credit, $2,000 available (L+8.0%, 10.0% Cash, Due 6/2023)(K) | — | — | — | |||||||||||||||||
Nocturne Villa Rentals, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 6/2026)(K) | 27,700 | 27,700 | 27,700 | |||||||||||||||||
27,700 | 27,700 | |||||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 6.3% | ||||||||||||||||||||
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 5/2025)(K) | 27,981 | 27,981 | 27,981 | |||||||||||||||||
Total Secured First Lien Debt | $ | 233,881 | $ | 233,673 | ||||||||||||||||
Secured Second Lien Debt – 15.0% | ||||||||||||||||||||
Aerospace and Defense – 5.7% | ||||||||||||||||||||
Galaxy Technologies Holdings, Inc. – Term Debt (L+4.1%, 7.1% Cash, Due 10/2026)(K) | $ | 6,500 | $ | 6,500 | $ | 6,500 | ||||||||||||||
Galaxy Technologies Holdings, Inc. – Term Debt (L+7.0%, 10.0% Cash, Due 10/2026)(K) | 18,796 | 18,796 | 18,796 | |||||||||||||||||
25,296 | 25,296 | |||||||||||||||||||
Automobile – 0.3% | ||||||||||||||||||||
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 7/2027)(J) | 1,500 | 1,500 | 1,498 | |||||||||||||||||
Country Club Enterprises, LLC - Guaranty ($1,000) (Q) | — | — | — | |||||||||||||||||
1,500 | 1,498 | |||||||||||||||||||
Cargo Transport – 2.9% | ||||||||||||||||||||
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)(J) | 13,000 | 12,987 | 13,000 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.0% | ||||||||||||||||||||
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)(H)(K) | 13,300 | 13,300 | 13,300 | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.1% | ||||||||||||||||||||
SFEG Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(G)(J) | 3,128 | 3,128 | 2,909 | |||||||||||||||||
SFEG Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(G)(J) | 11,736 | 11,736 | 10,914 | |||||||||||||||||
14,864 | 13,823 | |||||||||||||||||||
Total Secured Second Lien Debt | $ | 67,947 | $ | 66,917 | ||||||||||||||||
78
2022
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Secured Second Lien Debt—11.0% | ||||||||||||
Automobile—1.0% | ||||||||||||
Country Club Enterprises, LLC—Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)(K) | $ | 4,000 | $ | 4,000 | $ | 3,890 | ||||||
Country Club Enterprises, LLC—Guaranty ($1,000)(T) | — | — | — | |||||||||
|
|
|
| |||||||||
4,000 | 3,890 | |||||||||||
Cargo Transport—3.4% | ||||||||||||
Diligent Delivery Systems—Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)(Q) | 13,000 | 12,970 | 13,000 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—3.5% | ||||||||||||
Ginsey Home Solutions, Inc.—Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)(H)(L) | 13,300 | 13,300 | 13,300 | |||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—3.1% | ||||||||||||
SBS Industries Holdings, Inc.—Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(L) | 11,736 | 11,736 | 11,736 | |||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 42,006 | $ | 41,926 | ||||||||
|
|
|
| |||||||||
Preferred Equity—17.3% | ||||||||||||
Diversified/Conglomerate Services—9.2% | ||||||||||||
Bassett Creek Services, Inc.—Preferred Stock(C)(L) | 4,900 | $ | 4,900 | $ | — | |||||||
Counsel Press, Inc.—Preferred Stock(C)(L) | 6,995 | 6,995 | 21,348 | |||||||||
Horizon Facilities Services, Inc.—Preferred Stock(C)(L) | 10,080 | 10,080 | 3,663 | |||||||||
Mason West, LLC—Preferred Stock(C)(L) | 11,206 | 11,206 | 9,774 | |||||||||
|
|
|
| |||||||||
33,181 | 34,785 | |||||||||||
Healthcare, Education, and Childcare—2.9% | ||||||||||||
Educators Resource, Inc.—Preferred Stock(C)(L) | 8,560 | 8,560 | 11,194 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—2.5% | ||||||||||||
Brunswick Bowling Products, Inc.—Preferred Stock(C)(L) | 6,653 | 6,653 | 1,015 | |||||||||
Ginsey Home Solutions, Inc.—Preferred Stock(C)(L) | 19,280 | 9,583 | 8,550 | |||||||||
|
|
|
| |||||||||
16,236 | 9,565 | |||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment —2.1% | ||||||||||||
Schylling, Inc.—Preferred Stock(C)(L) | 4,000 | 4,000 | 7,936 | |||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—0.6% | ||||||||||||
SBS Industries Holdings, Inc.—Preferred Stock(C)(L) | 27,705 | 2,771 | 2,463 | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 64,748 | $ | 65,943 | ||||||||
|
|
|
|
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(I) | Cost | Fair Value | |||||||||||||||||
Preferred Equity – 31.4% | ||||||||||||||||||||
Diversified/Conglomerate Services – 15.2% | ||||||||||||||||||||
Bassett Creek Services, Inc. – Preferred Stock(C)(K) | 4,900 | $ | 4,900 | $ | 17,150 | |||||||||||||||
Counsel Press, Inc. – Preferred Stock(C)(K) | 6,995 | 6,995 | 25,374 | |||||||||||||||||
Horizon Facilities Services, Inc. – Preferred Stock(C)(K) | 10,080 | 10,080 | 17,807 | |||||||||||||||||
Mason West, LLC – Preferred Stock(C)(K) | 11,206 | 11,206 | 7,553 | |||||||||||||||||
33,181 | 67,884 | |||||||||||||||||||
Healthcare, Education, and Childcare – 4.3% | ||||||||||||||||||||
Educators Resource, Inc. – Preferred Stock(C)(K) | 8,560 | 8,560 | 19,252 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6% | ||||||||||||||||||||
Brunswick Bowling Products, Inc. – Preferred Stock(C)(K) | 6,653 | 6,653 | 21,485 | |||||||||||||||||
Ginsey Home Solutions, Inc. – Preferred Stock(C)(K) | 19,280 | 9,583 | 3,263 | |||||||||||||||||
16,236 | 24,748 | |||||||||||||||||||
Hotels, Motels, Inns, and Gaming Total – 2.3% | ||||||||||||||||||||
Nocturne Villa Rentals, Inc. – Preferred Stock (C)(K) | 6,600 | 6,600 | 10,223 | |||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 4.0% | ||||||||||||||||||||
Schylling, Inc. – Preferred Stock(C)(K) | 4,000 | 4,000 | 17,820 | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0% | ||||||||||||||||||||
SFEG Holdings, Inc. – Preferred Stock(C)(K) | 29,577 | 4,643 | — | |||||||||||||||||
Total Preferred Equity | $ | 73,220 | $ | 139,927 | ||||||||||||||||
Common Equity/Equivalents – 0.4% | ||||||||||||||||||||
Aerospace and Defense – 0.0% | ||||||||||||||||||||
Galaxy Technologies Holdings, Inc. – Common Stock(C)(K) | 16,957 | $ | 11,513 | $ | — | |||||||||||||||
Cargo Transport – 0.4% | ||||||||||||||||||||
Diligent Delivery Systems – Common Stock Warrants(C)(K) | 8 | % | 500 | 1,533 | ||||||||||||||||
Diversified/Conglomerate Manufacturing– 0.0% | ||||||||||||||||||||
Phoenix Door Systems, Inc. – Common Stock(C)(K) | 3,195 | 1,452 | — | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0% | ||||||||||||||||||||
Ginsey Home Solutions, Inc. – Common Stock(C)(K) | 63,747 | 8 | — | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0% | ||||||||||||||||||||
SFEG Holdings, Inc. – Common Stock(C)(K) | 221,500 | 222 | — | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
Funko Acquisition Holdings, LLC(L) – Common Units(C)(P) | 6,290 | 30 | 74 | |||||||||||||||||
Total Common Equity/Equivalents | $ | 13,725 | $ | 1,607 | ||||||||||||||||
Total Non-Control/Non-Affiliate Investments | $ | 388,773 | $ | 442,124 | ||||||||||||||||
AFFILIATE INVESTMENTS(N) – 60.8% | ||||||||||||||||||||
Secured First Lien Debt – 42.9% | ||||||||||||||||||||
Chemicals, Plastics, and Rubber – 6.0% | ||||||||||||||||||||
PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(K) | $ | 26,618 | $ | 26,618 | $ | 26,618 | ||||||||||||||
Diversified/Conglomerate Manufacturing – 2.0% | ||||||||||||||||||||
Edge Adhesives Holdings, Inc.(L) – Term Debt (L+5.5%, 7.5% Cash, Due 8/2024)(J) | 9,210 | 9,210 | 9,072 | |||||||||||||||||
79
2022
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Common Equity/Equivalents—0.7% | ||||||||||||
Cargo Transport—0.6% | ||||||||||||
Diligent Delivery Systems—Common Stock Warrants(C)(Q) | 8 | % | $ | 500 | $ | 2,211 | ||||||
Diversified/Conglomerate Manufacturing—0.1% | ||||||||||||
Phoenix Door Systems, Inc.—Common Stock(C)(L) | 3,195 | 1,452 | 460 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—0.0% | ||||||||||||
Ginsey Home Solutions, Inc.—Common Stock(C)(L) | 63,747 | 8 | — | |||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—0.0% | ||||||||||||
SBS Industries Holdings, Inc.—Common Stock(C)(L) | 221,500 | 222 | — | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.0% | ||||||||||||
Funko Acquisition Holdings, LLC(M)—Common Units(C)(S) | 7,178 | 33 | 95 | |||||||||
|
|
|
| |||||||||
Total Common Equity/Equivalents | $ | 2,215 | $ | 2,766 | ||||||||
|
|
|
| |||||||||
Total Non-Control/Non-Affiliate Investments | $ | 297,400 | $ | 298,222 | ||||||||
|
|
|
| |||||||||
AFFILIATE INVESTMENTS(O)—80.9% | ||||||||||||
Secured First Lien Debt—47.6% | ||||||||||||
Beverage, Food, and Tobacco—2.4% | ||||||||||||
Head Country, Inc.—Term Debt (L+10.5%, 12.5% Cash, Due 2/2023)(L) | $ | 9,050 | $ | 9,050 | $ | 9,050 | ||||||
Chemicals, Plastics, and Rubber—6.0% | ||||||||||||
PSI Molded Plastics, Inc.—Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(L) | 26,618 | 26,618 | 22,985 | |||||||||
Diversified/Conglomerate Manufacturing—5.4% | ||||||||||||
D.P.M.S., Inc.—Line of Credit, $0 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2023)(L) | 1,500 | 1,500 | 1,500 | |||||||||
D.P.M.S., Inc.—Term Debt (10.0% Cash, Due 10/2023)(I)(L) | 10,796 | 10,796 | 5,751 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Line of Credit, $0 available (L+8.0%, 10.0% Cash, Due 9/2021)(K) | 1,020 | 1,020 | 1,005 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Term Debt (L+10.5%, 12.5% Cash, Due 2/2022)(K) | 9,300 | 9,300 | 9,161 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Term Debt (L+11.8%, 13.8% Cash, Due 2/2022)(K) | 3,000 | 3,000 | 2,955 | |||||||||
|
|
|
| |||||||||
25,616 | 20,372 | |||||||||||
Diversified/Conglomerate Services—13.3% | ||||||||||||
ImageWorks Display and Marketing Group, Inc.—Term Debt (L+11.0%, 13.0% Cash, | 22,000 | 22,000 | 22,000 | |||||||||
The Maids International, LLC—Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)(L) | 28,560 | 28,560 | 28,560 | |||||||||
|
|
|
| |||||||||
50,560 | 50,560 |
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(I) | Cost | Fair Value | |||||||||||||||||
Diversified/Conglomerate Services – 20.5% | ||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 11/2022)(K) | 22,000 | 22,000 | 22,000 | |||||||||||||||||
J.R. Hobbs Co. - Atlanta, LLC - Term Debt (L+6.0%, 8.0% Cash, Due 10/2024) (G)(K) | 16,500 | 16,500 | 15,023 | |||||||||||||||||
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024) (G)(K) | 26,000 | 26,000 | 23,672 | |||||||||||||||||
J.R. Hobbs Co. - Atlanta, LLC – Term Debt (L+6.0%, 8.0% Cash, Due 3/2023) (G)(K) | 2,438 | 2,438 | 2,219 | |||||||||||||||||
J.R. Hobbs Co. - Atlanta, LLC - Guaranty ($9,250)(Q) | — | — | — | |||||||||||||||||
The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)(K) | 28,560 | 28,560 | 28,560 | |||||||||||||||||
95,498 | 91,474 | |||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6% | ||||||||||||||||||||
Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025)(K) | 25,000 | 25,000 | 25,000 | |||||||||||||||||
Mining, Steel, Iron and Non-Precious Metals Total – 4.1% | ||||||||||||||||||||
Utah Pacific Bridge & Steel, Ltd., $2,000 available (L+8.5%, 10.0% Cash, Due 7/2022)(K) | — | — | — | |||||||||||||||||
Utah Pacific Bridge & Steel, Ltd. (L+10.0%, 11.5% Cash, Due 7/2026)(K) | 18,250 | 18,250 | 18,250 | |||||||||||||||||
18,250 | 18,250 | |||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.0% | ||||||||||||||||||||
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 5/2022)(G)(K) | 3,400 | 3,400 | 3,400 | |||||||||||||||||
The Mountain Corporation – Line of Credit, $100 available (L+5.0%, 9.0% Cash, Due 5/2023)(G)(K) | 800 | 800 | 800 | |||||||||||||||||
4,200 | 4,200 | |||||||||||||||||||
Telecommunications – 3.7% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(L) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2024)(K) | 2,800 | 2,800 | 2,800 | |||||||||||||||||
B+T Group Acquisition, Inc.(L) – Term Debt (L+11.0%, 13.0% Cash, Due 12/2024)(K) | 14,000 | 14,000 | 14,000 | |||||||||||||||||
16,800 | 16,800 | |||||||||||||||||||
Total Secured First Lien Debt | $ | 195,576 | $ | 191,414 | ||||||||||||||||
Secured Second Lien Debt – 0.2% | ||||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2% | ||||||||||||||||||||
The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(G)(K) | $ | 11,700 | $ | 11,700 | $ | 923 | ||||||||||||||
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)(G)(K) | 1,500 | 1,500 | 118 | |||||||||||||||||
$ | 13,200 | 1,041 | ||||||||||||||||||
Total Secured Second Lien Debt | $ | 13,200 | $ | 1,041 | ||||||||||||||||
Preferred Equity – 17.4% | ||||||||||||||||||||
Chemicals, Plastics, and Rubber – 0.0% | ||||||||||||||||||||
PSI Molded Plastics, Inc. – Preferred Stock(C)(K) | 158,598 | $ | 19,730 | $ | — | |||||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||||||||||
Edge Adhesives Holdings, Inc.(L) – Preferred Stock(C)(K) | 8,199 | 8,199 | — | |||||||||||||||||
Diversified/Conglomerate Services – 4.3% | ||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. – Preferred Stock(C)(K) | 67,490 | 6,749 | 16,405 | |||||||||||||||||
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock(C)(K) | 10,920 | 10,920 | — | |||||||||||||||||
The Maids International, LLC – Preferred Stock(C)(K) | 6,640 | 6,640 | 2,679 | |||||||||||||||||
24,309 | 19,084 | |||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 8.5% | ||||||||||||||||||||
Old World Christmas, Inc. – Preferred Stock(C)(K) | 6,180 | — | 37,842 | |||||||||||||||||
Mining, Steel, Iron and Non-Precious Metals –1.3% | ||||||||||||||||||||
Utah Pacific Bridge & Steel, Ltd. - Preferred Stock(C)(K) | 6,000 | 6,000 | 6,000 | |||||||||||||||||
80
2022
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—7.1% | ||||||||||||
Old World Christmas, Inc.—Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025)(L) | 27,000 | 27,000 | 27,000 | |||||||||
Leisure, Amusement, Motion Pictures, and Entertainment—2.3% | ||||||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (Due 12/2023)(L)(R) | 538 | 538 | 538 | |||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (L+4.0%, 6.0% Cash, Due 12/2023)(L) | 8,399 | 8,399 | 8,399 | |||||||||
|
|
|
| |||||||||
8,937 | 8,937 | |||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—7.0% | ||||||||||||
The Mountain Corporation—Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021)(G)(L) | 3,400 | 3,400 | 3,400 | |||||||||
Pioneer Square Brands, Inc.—Term Debt (L+12.0%, 13.0% Cash, Due 8/2022)(Q) | 23,100 | 23,100 | 23,215 | |||||||||
|
|
|
| |||||||||
26,500 | 26,615 | |||||||||||
Telecommunications—4.1% | ||||||||||||
B+T Group Acquisition, Inc.(M)—Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 2,800 | 2,800 | 2,597 | |||||||||
B+T Group Acquisition, Inc.(M)—Term Debt (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 14,000 | 14,000 | 12,985 | |||||||||
|
|
|
| |||||||||
16,800 | 15,582 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 191,081 | $ | 181,101 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt—12.6% | ||||||||||||
Diversified/Conglomerate Services—12.0% | ||||||||||||
J.R. Hobbs Co.—Atlanta, LLC—Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024)(K) | $ | 10,000 | $ | 10,000 | $ | 9,975 | ||||||
J.R. Hobbs Co.—Atlanta, LLC—Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)(K) | 36,000 | 36,000 | 35,910 | |||||||||
|
|
|
| |||||||||
46,000 | 45,885 | |||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.6% | ||||||||||||
The Mountain Corporation—Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(G)(L) | 11,700 | 11,700 | 1,849 | |||||||||
The Mountain Corporation—Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)(G)(L) | 1,500 | 1,500 | 237 | |||||||||
|
|
|
| |||||||||
13,200 | 2,086 | |||||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 59,200 | $ | 47,971 | ||||||||
|
|
|
| |||||||||
Preferred Equity—20.7% | ||||||||||||
Beverage, Food, and Tobacco—1.7% | ||||||||||||
Head Country, Inc.—Preferred Stock(C)(L) | 4,000 | $ | 4,000 | $ | 6,469 |
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(I) | Cost | Fair Value | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
The Mountain Corporation – Preferred Stock(C)(K) | 6,899 | 6,899 | — | |||||||||||||||||
Telecommunications – 3.3% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(L) – Preferred Stock(C)(K) | 14,304 | 4,722 | 14,746 | |||||||||||||||||
Total Preferred Equity | $ | 69,859 | $ | 77,672 | ||||||||||||||||
Common Equity/Equivalents – 0.3% | ||||||||||||||||||||
Diversified/Conglomerate Services – 0.1% | ||||||||||||||||||||
Nth Degree Investment Group, LLC – Common Stock(C)(K) | 14,360,000 | $ | 1,219 | $ | 511 | |||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
The Mountain Corporation – Common Stock(C)(K) | 751 | 1 | — | |||||||||||||||||
Telecommunications – 0.2% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(L) – Common Stock Warrants(C)(K) | 3.5 | % | — | 921 | ||||||||||||||||
Total Common Equity/Equivalents | 1,220 | 1,432 | ||||||||||||||||||
Total Affiliate Investments | $ | 279,855 | $ | 271,559 | ||||||||||||||||
CONTROL INVESTMENTS(O) – 0.2%: | ||||||||||||||||||||
Common Equity/Equivalents – 0.2% | ||||||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 0.2% | ||||||||||||||||||||
Gladstone SOG Investments, Inc. - Common Stock(C)(K) | 100 | 620 | 713 | |||||||||||||||||
Total Common Equity/Equivalents | $ | 620 | $ | 713 | ||||||||||||||||
Total Control Investments | $ | 620 | $ | 713 | ||||||||||||||||
TOTAL INVESTMENTS – 160.2%(R) | $ | 669,248 | $ | 714,396 |
81
2022
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Chemicals, Plastics, and Rubber—0.0% | ||||||||||||
PSI Molded Plastics, Inc.—Preferred Stock(C)(L) | 158,598 | 19,730 | — | |||||||||
Diversified/Conglomerate Manufacturing — 0.0% | ||||||||||||
Channel Technologies Group, LLC—Preferred Stock(C)(L) | 2,279 | 1,841 | — | |||||||||
Edge Adhesives Holdings, Inc.(M)—Preferred Stock(C)(L) | 8,199 | 8,199 | — | |||||||||
|
|
|
| |||||||||
10,040 | — | |||||||||||
Diversified/Conglomerate Services—3.5% | ||||||||||||
ImageWorks Display and Marketing Group, Inc.—Preferred Stock(C)(L) | 67,490 | 6,749 | 9,819 | |||||||||
J.R. Hobbs Co.—Atlanta, LLC—Preferred Stock(C)(L) | 10,920 | 10,920 | — | |||||||||
The Maids International, LLC—Preferred Stock(C)(L) | 6,640 | 6,640 | 3,560 | |||||||||
|
|
|
| |||||||||
24,309 | 13,379 | |||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—5.3% | ||||||||||||
Old World Christmas, Inc.—Preferred Stock(C)(L) | 6,180 | — | 20,248 | |||||||||
Leisure, Amusement, Motion Pictures, and Entertainment—1.8% | ||||||||||||
SOG Specialty Knives & Tools, LLC—Preferred Stock(C)(L) | 14,949 | 14,949 | 6,754 | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—8.4% | ||||||||||||
The Mountain Corporation—Preferred Stock(C)(L) | 6,899 | 6,899 | — | |||||||||
Pioneer Square Brands, Inc.—Preferred Stock(C)(Q) | 5,502 | 5,500 | 32,055 | |||||||||
|
|
|
| |||||||||
12,399 | 32,055 | |||||||||||
Telecommunications—0.0% | ||||||||||||
B+T Group Acquisition, Inc.(M)—Preferred Stock(C)(L) | 14,304 | 4,722 | — | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 90,149 | $ | 78,905 | ||||||||
|
|
|
| |||||||||
Common Equity/Equivalents—0.0% | ||||||||||||
Diversified/Conglomerate Manufacturing—0.0% | ||||||||||||
Channel Technologies Group, LLC—Common Stock(C)(L) | 2,319,184 | $ | — | $ | — | |||||||
D.P.M.S., Inc.—Common Stock(C)(L) | 627 | 1 | — | |||||||||
|
|
|
| |||||||||
1 | — | |||||||||||
Diversified/Conglomerate Services—0.0% | ||||||||||||
Nth Degree Investment Group, LLC—Common Stock(C)(L) | 14,360,000 | 1,219 | — | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.0% | ||||||||||||
The Mountain Corporation—Common Stock(C)(L) | 751 | 1 | — | |||||||||
Telecommunications—0.0% | ||||||||||||
B+T Group Acquisition, Inc.(M)—Common Stock Warrant(C)(L) | 3.5 | % | — | — | ||||||||
|
|
|
| |||||||||
Total Common Equity/Equivalents | $ | 1,221 | $ | — | ||||||||
|
|
|
| |||||||||
Total Affiliate Investments | $ | 341,651 | $ | 307,977 | ||||||||
|
|
|
|
82
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
CONTROL INVESTMENTS(P)—7.2%: | ||||||||||||
Secured Second Lien Debt—3.4% | ||||||||||||
Aerospace and Defense—3.4% | ||||||||||||
Galaxy Technologies, Inc.—Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee), Due 8/2023)(L) | $ | 5,000 | $ | 5,000 | $ | 5,000 | ||||||
Galaxy Technologies, Inc.—Term Debt (L+6.0%, 10.0% Cash, Due 8/2023)(L) | 8,000 | 8,000 | 8,000 | |||||||||
|
|
|
| |||||||||
$ | 13,000 | $ | 13,000 | |||||||||
|
|
|
| |||||||||
Preferred Equity—3.8% | ||||||||||||
Aerospace and Defense—3.8% | ||||||||||||
Galaxy Technologies, Inc.—Preferred Stock(C)(L) | 5,517,444 | $ | 11,464 | $ | 14,630 | |||||||
Common Equity—0.0% | ||||||||||||
Aerospace and Defense—0.0% | ||||||||||||
Galaxy Technologies, Inc.—Common Stock(C)(L) | 88,843 | $ | 48 | $ | — | |||||||
|
|
|
| |||||||||
Total Control Investments | $ | 24,512 | $ | 27,630 | ||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS—166.0% | $ | 663,563 | $ | 633,829 | ||||||||
|
|
|
|
|
|
|
|
|
|
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||||||||||
NON-CONTROL/NON-AFFILIATE INVESTMENTS(N) – 77.9% | ||||||||||||||||||||
Secured First Lien Debt – 48.9% | ||||||||||||||||||||
Diversified/Conglomerate Manufacturing – 1.1% | ||||||||||||||||||||
Phoenix Door Systems, Inc. – Line of Credit, $0 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2022)(L) | $ | 1,150 | $ | 1,150 | $ | 1,150 | ||||||||||||||
Phoenix Door Systems, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)(L) | 3,200 | 3,200 | 3,200 | |||||||||||||||||
4,350 | 4,350 | |||||||||||||||||||
Diversified/Conglomerate Services – 30.6% | ||||||||||||||||||||
Bassett Creek Services, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)(K) | 37,500 | 37,500 | 36,656 | |||||||||||||||||
Counsel Press, Inc. – Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)(L) | 21,100 | 21,100 | 21,100 | |||||||||||||||||
Counsel Press, Inc. – Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)(L) | 6,400 | 6,400 | 6,400 | |||||||||||||||||
Horizon Facilities Services, Inc. – Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)(G)(L) | 27,700 | 27,700 | 27,700 | |||||||||||||||||
Mason West, LLC – Line of Credit, $3,000 available (L+8.0%, 10.0% Cash, Due 7/2021)(L) | — | — | — | |||||||||||||||||
Mason West, LLC – Term Debt (L+10.0%, 12.5% Cash, Due 7/2025)(L) | 25,250 | 25,250 | 25,250 | |||||||||||||||||
117,950 | 117,106 | |||||||||||||||||||
Healthcare, Education, and Childcare – 5.2% | ||||||||||||||||||||
Educators Resource, Inc. – Term Debt (L+10.5%, 13.0% Cash, Due 11/2023)(L) | 20,000 | 20,000 | 20,000 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 6.4% | ||||||||||||||||||||
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)(L) | 17,700 | 17,700 | 17,700 | |||||||||||||||||
Brunswick Bowling Products, Inc. – Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)(L) | 6,850 | 6,850 | 6,850 | |||||||||||||||||
24,550 | 24,550 | |||||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 5.6% | ||||||||||||||||||||
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 13,081 | 13,081 | 13,081 | |||||||||||||||||
Schylling, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 8,500 | 8,500 | 8,500 | |||||||||||||||||
21,581 | 21,581 | |||||||||||||||||||
Total Secured First Lien Debt | $ | 188,431 | $ | 187,587 | ||||||||||||||||
Secured Second Lien Debt – 11.0% | ||||||||||||||||||||
Automobile – 1.0% | ||||||||||||||||||||
Country Club Enterprises, LLC – Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)(K) | $ | 4,000 | $ | 4,000 | $ | 3,890 | ||||||||||||||
Country Club Enterprises, LLC – Guaranty ($1,000)(T) | — | — | — | |||||||||||||||||
4,000 | 3,890 | |||||||||||||||||||
Cargo Transport – 3.4% | ||||||||||||||||||||
Diligent Delivery Systems – Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)(Q) | 13,000 | 12,970 | 13,000 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 3.5% | ||||||||||||||||||||
Ginsey Home Solutions, Inc. – Term Debt (L+10.0%, 13.5% Cash, Due 1/2025)(H)(L) | 13,300 | 13,300 | 13,300 | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 3.1% | ||||||||||||||||||||
SBS Industries Holdings, Inc. – Term Debt (L+7.0%, 9.0% Cash, Due 11/2024)(L) | 11,736 | 11,736 | 11,736 | |||||||||||||||||
Total Secured Second Lien Debt | $ | 42,006 | $ | 41,926 | ||||||||||||||||
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||||||||||
Preferred Equity – 17.3% | ||||||||||||||||||||
Diversified/Conglomerate Services – 9.2% | ||||||||||||||||||||
Bassett Creek Services, Inc. – Preferred Stock(C)(L) | 4,900 | $ | 4,900 | $ | — | |||||||||||||||
Counsel Press, Inc. – Preferred Stock(C)(L) | 6,995 | 6,995 | 21,348 | |||||||||||||||||
Horizon Facilities Services, Inc. – Preferred Stock(C)(L) | 10,080 | 10,080 | 3,663 | |||||||||||||||||
Mason West, LLC – Preferred Stock(C)(L) | 11,206 | 11,206 | 9,774 | |||||||||||||||||
33,181 | 34,785 | |||||||||||||||||||
Healthcare, Education, and Childcare – 2.9% | ||||||||||||||||||||
Educators Resource, Inc. – Preferred Stock(C)(L) | 8,560 | 8,560 | 11,194 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 2.5% | ||||||||||||||||||||
Brunswick Bowling Products, Inc. – Preferred Stock(C)(L) | 6,653 | 6,653 | 1,015 | |||||||||||||||||
Ginsey Home Solutions, Inc. – Preferred Stock(C)(L) | 19,280 | 9,583 | 8,550 | |||||||||||||||||
16,236 | 9,565 | |||||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 2.1% | ||||||||||||||||||||
Schylling, Inc. – Preferred Stock(C)(L) | 4,000 | 4,000 | 7,936 | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.6% | ||||||||||||||||||||
SBS Industries Holdings, Inc. – Preferred Stock(C)(L) | 27,705 | 2,771 | 2,463 | |||||||||||||||||
Total Preferred Equity | $ | 64,748 | $ | 65,943 | ||||||||||||||||
Common Equity/Equivalents – 0.7% | ||||||||||||||||||||
Cargo Transport – 0.6% | ||||||||||||||||||||
Diligent Delivery Systems – Common Stock Warrants(C)(Q) | 8 | % | $ | 500 | $ | 2,211 | ||||||||||||||
Diversified/Conglomerate Manufacturing – 0.1% | ||||||||||||||||||||
Phoenix Door Systems, Inc. – Common Stock(C)(L) | 3,195 | 1,452 | 460 | |||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 0.0% | ||||||||||||||||||||
Ginsey Home Solutions, Inc. – Common Stock(C)(L) | 63,747 | 8 | — | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) – 0.0% | ||||||||||||||||||||
SBS Industries Holdings, Inc. – Common Stock(C)(L) | 221,500 | 222 | — | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
Funko Acquisition Holdings, LLC(M) – Common Units(C)(S) | 7,178 | 33 | 95 | |||||||||||||||||
Total Common Equity/Equivalents | $ | 2,215 | $ | 2,766 | ||||||||||||||||
Total Non-Control/Non-Affiliate Investments | $ | 297,400 | $ | — | $ | 298,222 | ||||||||||||||
AFFILIATE INVESTMENTS(O) – 80.9% | ||||||||||||||||||||
Secured First Lien Debt – 47.6% | ||||||||||||||||||||
Beverage, Food, and Tobacco – 2.4% | ||||||||||||||||||||
Head Country, Inc. – Term Debt (L+10.5%, 12.5% Cash, Due 2/2023)(L) | $ | 9,050 | $ | 9,050 | $ | 9,050 | ||||||||||||||
Chemicals, Plastics, and Rubber – 6.0% | ||||||||||||||||||||
PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(L) | 26,618 | 26,618 | 22,985 | |||||||||||||||||
84
(Continued)
2021
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
NON-CONTROL/NON-AFFILIATE INVESTMENTS(N)—79.4% | ||||||||||||
Secured First Lien Debt—46.8% | ||||||||||||
Containers, Packaging, and Glass—2.6% | ||||||||||||
Frontier Packaging, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 3/2021)(L) | $ | 9,500 | $ | 9,500 | $ | 9,500 | ||||||
Diversified/Conglomerate Manufacturing—1.0% | ||||||||||||
Phoenix Door Systems, Inc—Line of Credit, $380 available (L+7.0%, 9.0% Cash (0.3% Unused Fee), Due 3/2021)(L) | 370 | 370 | 370 | |||||||||
Phoenix Door Systems, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 9/2024)(L) | 3,200 | 3,200 | 3,200 | |||||||||
|
|
|
| |||||||||
3,570 | 3,570 | |||||||||||
Diversified/Conglomerate Services – 24.1% | ||||||||||||
Bassett Creek Services, Inc.— Term Debt (L+10.0%, 12.0% Cash, Due 4/2023)(L) | 37,500 | 37,500 | 37,500 | |||||||||
Counsel Press, Inc.—Term Debt (L+11.8%, 12.8% Cash, Due 3/2023)(L) | 18,000 | 18,000 | 18,000 | |||||||||
Counsel Press, Inc.—Term Debt (L+13.0%, 14.0% Cash, Due 3/2023)(L) | 5,500 | 5,500 | 5,500 | |||||||||
Horizon Facilities Services, Inc.—Term Debt (L+9.5%, 12.0% Cash, Due 6/2024)(L) | 27,700 | 27,700 | 27,700 | |||||||||
|
|
|
| |||||||||
88,700 | 88,700 | |||||||||||
Healthcare, Education, and Childcare—5.4% | ||||||||||||
Educators Resource, Inc.—Term Debt (L+10.5%, 13.0% Cash, Due 11/2023) (L) | 20,000 | 20,000 | 20,000 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—4.8% | ||||||||||||
Brunswick Bowling Products, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 1/2023) (L) | 17,700 | 17,700 | 17,700 | |||||||||
Leisure, Amusement, Motion Pictures, and Entertainment—5.8% | ||||||||||||
Schylling, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 13,081 | 13,081 | 13,081 | |||||||||
Schylling, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 8/2024)(L) | 8,500 | 8,500 | 8,500 | |||||||||
|
|
|
| |||||||||
21,581 | 21,581 | |||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—3.1% | ||||||||||||
SBS Industries Holdings, Inc.—Term Debt (L+12.0%, 14.0% Cash, Due 11/2024)(L) | 11,355 | 11,355 | 11,355 | |||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 172,406 | $ | 172,406 | ||||||||
|
|
|
|
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||||||||||
Diversified/Conglomerate Manufacturing – 5.4% | ||||||||||||||||||||
D.P.M.S., Inc. – Line of Credit, $0 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2023)(L) | 1,500 | 1,500 | 1,500 | |||||||||||||||||
D.P.M.S., Inc. – Term Debt (10.0% Cash, Due 10/2023)(I)(L) | 10,796 | 10,796 | 5,751 | |||||||||||||||||
Edge Adhesives Holdings, Inc.(M) – Line of Credit, $0 available (L+8.0%, 10.0% Cash, Due 9/2021)(K) | 1,020 | 1,020 | 1,005 | |||||||||||||||||
Edge Adhesives Holdings, Inc.(M) – Term Debt (L+10.5%, 12.5% Cash, Due 2/2022)(K) | 9,300 | 9,300 | 9,161 | |||||||||||||||||
Edge Adhesives Holdings, Inc.(M) – Term Debt (L+11.8%, 13.8% Cash, Due 2/2022)(K) | 3,000 | 3,000 | 2,955 | |||||||||||||||||
25,616 | 20,372 | |||||||||||||||||||
Diversified/Conglomerate Services – 13.3% | ||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 11/2022)(L) | 22,000 | 22,000 | 22,000 | |||||||||||||||||
The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)(L) | 28,560 | 28,560 | 28,560 | |||||||||||||||||
50,560 | 50,560 | |||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 7.1% | ||||||||||||||||||||
Old World Christmas, Inc. – Secured First Lien Term Loan (L+9.5%, 11.0% Cash, Due 12/2025)(L) | 27,000 | 27,000 | 27,000 | |||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 2.3% | ||||||||||||||||||||
SOG Specialty Knives & Tools, LLC – Term Debt (Due 12/2023)(L)(R) | 538 | 538 | 538 | |||||||||||||||||
SOG Specialty Knives & Tools, LLC – Term Debt (L+4.0%, 6.0% Cash, Due 12/2023)(L) | 8,399 | 8,399 | 8,399 | |||||||||||||||||
8,937 | 8,937 | |||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 7.0% | ||||||||||||||||||||
The Mountain Corporation – Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021)(G)(L) | 3,400 | 3,400 | 3,400 | |||||||||||||||||
Pioneer Square Brands, Inc. – Term Debt (L+12.0%, 13.0% Cash, Due 8/2022)(Q) | 23,100 | 23,100 | 23,215 | |||||||||||||||||
26,500 | 26,615 | |||||||||||||||||||
Telecommunications – 4.1% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(M) – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 2,800 | 2,800 | 2,597 | |||||||||||||||||
B+T Group Acquisition, Inc.(M) – Term Debt (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 14,000 | 14,000 | 12,985 | |||||||||||||||||
16,800 | 15,582 | |||||||||||||||||||
Total Secured First Lien Debt | $ | 191,081 | $ | 181,101 | ||||||||||||||||
Secured Second Lien Debt – 12.6% | ||||||||||||||||||||
Diversified/Conglomerate Services – 12.0% | ||||||||||||||||||||
J.R. Hobbs Co. – Atlanta, LLC – Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024)(K) | $ | 10,000 | $ | 10,000 | $ | 9,975 | ||||||||||||||
J.R. Hobbs Co. – Atlanta, LLC – Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)(K) | 36,000 | 36,000 | 35,910 | |||||||||||||||||
46,000 | 45,885 | |||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.6% | ||||||||||||||||||||
The Mountain Corporation – Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(G)(L) | 11,700 | 11,700 | 1,849 | |||||||||||||||||
The Mountain Corporation – Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)(G)(L) | 1,500 | 1,500 | 237 | |||||||||||||||||
13,200 | 2,086 | |||||||||||||||||||
Total Secured Second Lien Debt | $ | 59,200 | $ | 47,971 | ||||||||||||||||
Preferred Equity – 20.7% | ||||||||||||||||||||
Beverage, Food, and Tobacco – 1.7% | ||||||||||||||||||||
Head Country, Inc. – Preferred Stock(C)(L) | 4,000 | $ | 4,000 | $ | 6,469 | |||||||||||||||
Chemicals, Plastics, and Rubber – 0.0% | ||||||||||||||||||||
PSI Molded Plastics, Inc. – Preferred Stock(C)(L) | 158,598 | 19,730 | — | |||||||||||||||||
85
2021
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Secured Second Lien Debt—13.1% | ||||||||||||
Automobile—1.0% | ||||||||||||
Country Club Enterprises, LLC—Term Debt (L+8.0%, 10.0% Cash, Due 2/2022)(K) | $ | 4,000 | $ | 4,000 | $ | 3,600 | ||||||
Country Club Enterprises, LLC—Guaranty ($1,000)(U) | — | — | — | |||||||||
|
|
|
| |||||||||
4,000 | 3,600 | |||||||||||
Cargo Transport— 3.4% | ||||||||||||
Diligent Delivery Systems—Term Debt (L+9.0%, 11.0% Cash, Due 11/2022)(K) | 13,000 | 12,951 | 12,545 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—5.5% | ||||||||||||
Brunswick Bowling Products, Inc.—Term Debt (L+10.0%, 12.0% Cash, Due 1/2023)(L) | 6,850 | 6,850 | 6,850 | |||||||||
Ginsey Home Solutions, Inc.—Term Debt (L+10.0%, 13.5% Cash, Due 1/2021)(H)(L) | 13,300 | 13,300 | 13,300 | |||||||||
|
|
|
| |||||||||
20,150 | 20,150 | |||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—3.2% | ||||||||||||
SBS Industries Holdings, Inc.—Term Debt (L+12.0%, 14.0% Cash, Due 11/2024)(L) | 11,736 | 11,736 | 11,736 | |||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 48,837 | $ | 48,031 | ||||||||
|
|
|
| |||||||||
Preferred Equity—16.5% | ||||||||||||
Containers, Packaging, and Glass—0.4% | ||||||||||||
Frontier Packaging, Inc.—Preferred Stock(C)(L) | 1,373 | $ | 1,373 | $ | 1,400 | |||||||
Diversified/Conglomerate Services—6.3% | ||||||||||||
Bassett Creek Services, Inc.—Preferred Stock(C)(L) | 4,900 | 4,900 | — | |||||||||
Counsel Press, Inc.—Preferred Stock(C)(L) | 6,995 | 6,995 | 20,593 | |||||||||
Horizon Facilities Services, Inc.—Preferred Stock(C)(L) | 10,080 | 10,080 | 2,699 | |||||||||
|
|
|
| |||||||||
21,975 | 23,292 | |||||||||||
Healthcare, Education, and Childcare—1.5% | ||||||||||||
Educators Resource, Inc.—Preferred Stock(C)(L) | 8,560 | 8,560 | 5,563 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—7.1% | ||||||||||||
Brunswick Bowling Products, Inc.—Preferred Stock(C)(L) | 4,943 | 4,943 | 19,848 | |||||||||
Ginsey Home Solutions, Inc.—Preferred Stock(C)(L) | 19,280 | 9,583 | 6,419 | |||||||||
|
|
|
| |||||||||
14,526 | 26,267 | |||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment—1.2% | ||||||||||||
Schylling, Inc.—Preferred Stock(C)(L) | 4,000 | 4,000 | 4,332 |
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||||||||||
Channel Technologies Group, LLC – Preferred Stock(C)(L) | 2,279 | 1,841 | — | |||||||||||||||||
Edge Adhesives Holdings, Inc.(M) – Preferred Stock(C)(L) | 8,199 | 8,199 | — | |||||||||||||||||
10,040 | — | |||||||||||||||||||
Diversified/Conglomerate Services – 3.5% | ||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. – Preferred Stock(C)(L) | 67,490 | 6,749 | 9,819 | |||||||||||||||||
J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock(C)(L) | 10,920 | 10,920 | — | |||||||||||||||||
The Maids International, LLC – Preferred Stock(C)(L) | 6,640 | 6,640 | 3,560 | |||||||||||||||||
24,309 | 13,379 | |||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.3% | ||||||||||||||||||||
Old World Christmas, Inc. – Preferred Stock(C)(L) | 6,180 | — | 20,248 | |||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment – 1.8% | ||||||||||||||||||||
SOG Specialty Knives & Tools, LLC – Preferred Stock(C)(L) | 14,949 | 14,949 | 6,754 | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 8.4% | ||||||||||||||||||||
The Mountain Corporation – Preferred Stock(C)(L) | 6,899 | 6,899 | — | |||||||||||||||||
Pioneer Square Brands, Inc. – Preferred Stock(C)(Q) | 5,502 | 5,500 | 32,055 | |||||||||||||||||
12,399 | 32,055 | |||||||||||||||||||
Telecommunications – 0.0% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(M) – Preferred Stock(C)(L) | 14,304 | 4,722 | — | |||||||||||||||||
Total Preferred Equity | $ | 90,149 | $ | 78,905 | ||||||||||||||||
Common Equity/Equivalents – 0.0% | ||||||||||||||||||||
Diversified/Conglomerate Manufacturing – 0.0% | ||||||||||||||||||||
Channel Technologies Group, LLC – Common Stock(C)(L) | 2,319,184 | $ | — | $ | — | |||||||||||||||
D.P.M.S., Inc. – Common Stock(C)(L) | 627 | 1 | — | |||||||||||||||||
1 | — | |||||||||||||||||||
Diversified/Conglomerate Services – 0.0% | ||||||||||||||||||||
Nth Degree Investment Group, LLC – Common Stock(C)(L) | 14,360,000 | 1,219 | — | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% | ||||||||||||||||||||
The Mountain Corporation – Common Stock(C)(L) | 751 | 1 | — | |||||||||||||||||
Telecommunications – 0.0% | ||||||||||||||||||||
B+T Group Acquisition, Inc.(M) – Common Stock Warrant(C)(L) | 3.5 | % | — | — | ||||||||||||||||
Total Common Equity/Equivalents | $ | 1,221 | $ | — | ||||||||||||||||
Total Affiliate Investments | $ | 341,651 | $ | 307,977 | ||||||||||||||||
CONTROL INVESTMENTS(P) – 7.2%: |
86
2021
Company and Investment(A)(B)(D)(E) | Principal/ Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—0.0% | ||||||||||||
SBS Industries Holdings, Inc.—Preferred Stock(C)(L) | 27,705 | 2,771 | — | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 53,205 | $ | 60,854 | ||||||||
|
|
|
| |||||||||
Common Equity/Equivalents—3.0% | ||||||||||||
Cargo Transport—0.2% | ||||||||||||
Diligent Delivery Systems—Common Stock Warrants(C)(L) | 8 | % | $ | 500 | $ | 771 | ||||||
Containers, Packaging, and Glass—2.6% | ||||||||||||
Frontier Packaging, Inc.—Common Stock(C)(L) | 152 | 152 | 9,460 | |||||||||
Diversified/Conglomerate Manufacturing— 0.2% | ||||||||||||
Phoenix Door Systems, Inc.—Common Stock(C)(L) | 2,515 | 1,200 | 574 | |||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—0.0% | ||||||||||||
Ginsey Home Solutions, Inc.—Common Stock(C)(L) | 63,747 | 8 | — | |||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic)—0.0% | ||||||||||||
SBS Industries Holdings, Inc.—Common Stock(C)(L) | 221,500 | 222 | — | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) — 0.0% | ||||||||||||
Funko Acquisition Holdings, LLC(M)—Common Units(C)(S) | 12,180 | 59 | 33 | |||||||||
|
|
|
| |||||||||
Total Common Equity/Equivalents | $ | 2,141 | $ | 10,838 | ||||||||
|
|
|
| |||||||||
Total Non-Control/Non-Affiliate Investments | $ | 276,589 | $ | 292,129 | ||||||||
|
|
|
| |||||||||
AFFILIATE INVESTMENTS(O)—67.0% | ||||||||||||
Secured First Lien Debt—36.8% | ||||||||||||
Beverage, Food, and Tobacco—2.5% | ||||||||||||
Head Country, Inc.—Term Debt (L+10.5%, 12.5% Cash, Due 2/2021)(L) | $ | 9,050 | $ | 9,050 | $ | 9,050 | ||||||
Diversified/Conglomerate Manufacturing—6.4% | ||||||||||||
D.P.M.S., Inc.—Line of Credit, $250 available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2021)(L) | 1,250 | 1,250 | 1,250 | |||||||||
D.P.M.S., Inc.—Term Debt (10.0% Cash, Due 10/2021)(I)(L) | 10,796 | 10,796 | 10,796 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Line of Credit, $600 available (L+8.0%, 10.0% Cash, Due 5/2020)(K) | 420 | 420 | 395 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Term Debt (L+10.5%, 12.5% Cash, Due 2/2022)(K) | 9,300 | 9,300 | 8,742 | |||||||||
Edge Adhesives Holdings, Inc.(M)—Term Debt (L+11.8%, 13.8% Cash, Due 2/2022)(K) | 3,000 | 3,000 | 2,820 | |||||||||
|
|
|
| |||||||||
24,766 | 24,003 | |||||||||||
Diversified/Conglomerate Services—14.0% | ||||||||||||
ImageWorks Display and Marketing Group, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 11/2022)(L) | 22,000 | 22,000 | 22,000 |
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||||||||||
Secured Second Lien Debt – 3.4% | ||||||||||||||||||||
Aerospace and Defense – 3.4% | ||||||||||||||||||||
Galaxy Technologies, Inc. – Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee), Due 8/2023)(L) | $ | 5,000 | $ | 5,000 | $ | 5,000 | ||||||||||||||
Galaxy Technologies, Inc. – Term Debt (L+6.0%, 10.0% Cash, Due 8/2023)(L) | 8,000 | 8,000 | 8,000 | |||||||||||||||||
$ | 13,000 | $ | 13,000 | |||||||||||||||||
Preferred Equity – 3.8% | ||||||||||||||||||||
Aerospace and Defense – 3.8% | ||||||||||||||||||||
Galaxy Technologies, Inc. – Preferred Stock(C)(L) | 5,517,444 | $ | 11,464 | $ | 14,630 | |||||||||||||||
Common Equity – 0.0% | ||||||||||||||||||||
Aerospace and Defense – 0.0% | ||||||||||||||||||||
Galaxy Technologies, Inc. – Common Stock(C)(L) | 88,843 | $ | 48 | $ | — | |||||||||||||||
Total Control Investments | $ | 24,512 | $ | 27,630 | ||||||||||||||||
TOTAL INVESTMENTS – 166.0% | $ | 663,563 | $ | 633,829 |
87
2021
Company and Investment(A)(B)(D)(E) | Principal/Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
The Maids International, LLC—Line of Credit, $0 available (L+7.5%, 9.5% Cash (0.3% Unused Fee), Due 3/2021)(L) | 1,000 | 1,000 | 1,000 | |||||||||
The Maids International, LLC—Term Debt (L+10.5%, 12.0% Cash, Due 3/2025)(L) | 28,560 | 28,560 | 28,560 | |||||||||
|
|
|
| |||||||||
51,560 | 51,560 | |||||||||||
Leisure, Amusement, Motion Pictures, and | ||||||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (Due 8/2020)(L)(R) | 538 | 538 | 538 | |||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (L+4.0%, 6.0% Cash, Due 8/2022)(G)(L) | 8,399 | 8,399 | 8,399 | |||||||||
|
|
|
| |||||||||
8,937 | 8,937 | |||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—7.2% | ||||||||||||
The Mountain Corporation—Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021)(L) | 3,400 | 3,400 | 3,400 | |||||||||
Pioneer Square Brands, Inc.—Term Debt (L+12.0%, 13.0% Cash, Due 8/2022)(L) | 23,100 | 23,100 | 23,100 | |||||||||
|
|
|
| |||||||||
26,500 | 26,500 | |||||||||||
Telecommunications—4.3% | ||||||||||||
B+T Group Acquisition, Inc.(M) — Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 2,800 | 2,800 | 2,632 | |||||||||
B+T Group Acquisition, Inc.(M)—Term Debt (L+11.0%, 13.0% Cash, Due 12/2021)(G)(K) | 14,000 | 14,000 | 13,160 | |||||||||
|
|
|
| |||||||||
16,800 | 15,792 | |||||||||||
|
|
|
| |||||||||
Total Secured First Lien Debt | $ | 137,613 | $ | 135,842 | ||||||||
|
|
|
| |||||||||
Secured Second Lien Debt—17.7% | ||||||||||||
Chemicals, Plastics, and Rubber—4.5% | ||||||||||||
PSI Molded Plastics, Inc.—Term Debt (L+12.0%, 13.5% Cash, Due 1/2024)(G)(L) | $ | 26,618 | $ | 26,618 | $ | 16,737 | ||||||
Diversified/Conglomerate Services—12.5% | ||||||||||||
J.R. Hobbs Co. — Atlanta, LLC—Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024)(L) | 10,000 | 10,000 | 10,000 | |||||||||
J.R. Hobbs Co. — Atlanta, LLC—Term Debt (L+10.3%, 11.8% Cash, Due 10/2024)(L) | 36,000 | 36,000 | 36,000 | |||||||||
|
|
|
| |||||||||
46,000 | 46,000 | |||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.7% | ||||||||||||
The Mountain Corporation—Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(G)(L) | 11,700 | 11,700 | 2,572 | |||||||||
|
|
|
| |||||||||
Total Secured Second Lien Debt | $ | 84,318 | $ | 65,309 | ||||||||
|
|
|
|
88
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
MARCH 31, 2020
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(D)(E) | Principal/ Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Preferred Equity—11.5% | ||||||||||||
Beverage, Food, and Tobacco—0.9% | ||||||||||||
Head Country, Inc.—Preferred Stock(C)(L) | 4,000 | $ | 4,000 | $ | 3,495 | |||||||
Chemicals, Plastics, and Rubber—0.0% | ||||||||||||
PSI Molded Plastics, Inc.—Preferred Stock(C)(L) | 78,598 | 11,730 | — | |||||||||
Diversified/Conglomerate Manufacturing—0.0% | ||||||||||||
Channel Technologies Group, LLC—Preferred Stock(C)(L) | 2,279 | 1,841 | — | |||||||||
Edge Adhesives Holdings, Inc.(M)—Preferred Stock(C)(L) | 8,199 | 8,199 | — | |||||||||
|
|
|
| |||||||||
10,040 | — | |||||||||||
Diversified/Conglomerate Services—3.6% | ||||||||||||
ImageWorks Display and Marketing Group, Inc.— Preferred Stock(C)(L) | 67,490 | 6,749 | 8,265 | |||||||||
J.R. Hobbs Co.—Atlanta, LLC—Preferred Stock(C)(L) | 10,920 | 10,920 | — | |||||||||
The Maids International, LLC—Preferred Stock(C)(L) | 6,640 | 6,640 | 5,339 | |||||||||
|
|
|
| |||||||||
24,309 | 13,604 | |||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—5.3% | ||||||||||||
Old World Christmas, Inc.—Preferred Stock(C)(L) | 6,180 | 6,180 | 19,588 | |||||||||
Leisure, Amusement, Motion Pictures, and | ||||||||||||
SOG Specialty Knives & Tools, LLC—Preferred Stock(C)(L) | 14,949 | 14,949 | 390 | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—1.6% | ||||||||||||
The Mountain Corporation—Preferred Stock(C)(L) | 6,899 | 6,899 | — | |||||||||
Pioneer Square Brands, Inc.—Preferred Stock(C)(L) | 5,502 | 5,500 | 5,760 | |||||||||
|
|
|
| |||||||||
12,399 | 5,760 | |||||||||||
Telecommunications—0.0% | ||||||||||||
B+T Group Acquisition, Inc.(M)—Preferred Stock(C)(L) | 14,304 | 4,722 | — | |||||||||
|
|
|
| |||||||||
Total Preferred Equity | $ | 88,329 | $ | 42,837 | ||||||||
|
|
|
| |||||||||
Common Equity/Equivalents—1.0% | ||||||||||||
Diversified/Conglomerate Manufacturing—0.0% | ||||||||||||
Channel Technologies Group, LLC—Common Stock(C)(L) | 2,319,184 | $ | — | $ | — | |||||||
D.P.M.S., Inc.—Common Stock(C)(L) | 627 | 1 | — | |||||||||
|
|
|
| |||||||||
1 | — | |||||||||||
Diversified/Conglomerate Services—1.0% | ||||||||||||
Nth Degree Investment Group, LLC—Common Stock(C)(L) | 14,360,000 | 1,219 | 3,649 | |||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.0% | ||||||||||||
The Mountain Corporation—Common Stock(C)(L) | 751 | 1 | — |
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
MARCH 31, 2020
(DOLLAR AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(D)(E) | Principal/ Shares/ Units(F)(J) | Cost | Fair Value | |||||||||
Telecommunications — 0.0% | ||||||||||||
B+T Group Acquisition, Inc.(M)—Common Stock Warrants(C)(L) | 3.5 | % | — | — | ||||||||
|
|
|
| |||||||||
Total Common Equity/Equivalents | $ | 1,221 | $ | 3,649 | ||||||||
|
|
|
| |||||||||
Total Affiliate Investments | $ | 311,481 | $ | 247,637 | ||||||||
|
|
|
| |||||||||
CONTROL INVESTMENTS(P)—7.2%: | ||||||||||||
Secured Second Lien Debt—2.8% | ||||||||||||
Aerospace and Defense—2.8% | ||||||||||||
Galaxy Tool Holding Corporation—Line of Credit, $0 available (L+4.5%, 6.5% Cash (1.0% Unused Fee), Due 8/2021)(L) | $ | 5,000 | $ | 5,000 | $ | 5,000 | ||||||
Galaxy Tool Holding Corporation—Term Debt (L+6.0%, 10.0% Cash, Due 8/2021)(L) | 5,000 | 5,000 | 5,000 | |||||||||
|
|
|
| |||||||||
$ | 10,000 | $ | 10,000 | |||||||||
|
|
|
| |||||||||
Preferred Equity—4.4% | ||||||||||||
Aerospace and Defense—4.4% | ||||||||||||
Galaxy Tool Holding Corporation—Preferred Stock(C)(L) | 5,517,444 | $ | 11,464 | $ | 16,158 | |||||||
Common Equity—0.0% | ||||||||||||
Aerospace and Defense—0.0% | ||||||||||||
Galaxy Tool Holding Corporation—Common Stock(C)(L) | 88,843 | $ | 48 | $ | — | |||||||
|
|
|
| |||||||||
Total Control Investments | $ | 21,512 | $ | 26,158 | ||||||||
|
|
|
| |||||||||
TOTAL INVESTMENTS—153.6%(V) | $ | 609,582 | $ | 565,924 | ||||||||
|
|
|
|
|
|
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
GLADSTONE INVESTMENT CORPORATION
CONSOLIDATED SCHEDULE OF INVESTMENTS (Continued)
MARCH 31, 2020
(DOLLAR AMOUNTS IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
2022
As of March 31, 2022, our investment portfolio was comprised of 76.3% in debt securities and 23.7% in equity securities, at cost.
nature. Our accompanying Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation in the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements. Reclassifications did not impact net increase (decrease) in net assets resulting from operations, total assets, total liabilities or total net assets, or Consolidated Statements of Changes in Net Assets and Consolidated Statements of Cash Flows classifications.
|
|
|
Board Responsibility
|
|
•Total Enterprise Value — In determining the fair value using a TEV, the Valuation Team first calculates the TEV of the portfolio company by incorporating some or all of the following factors: the portfolio company’s ability to make payments and other specific portfolio company attributes; the earnings of the portfolio company (the trailing or projected twelve month revenue or earnings before interest, taxes, depreciation and amortization (“EBITDA”)); EBITDA multiples obtained from our indexing methodology whereby the original transaction EBITDA multiple at the time of our closing is indexed to a general subset of comparable disclosed transactions and EBITDA multiples from recent sales to third parties of similar securities in similar industries; a comparison to publicly traded securities in similar industries; and other pertinent factors. The Valuation Team generally reviews industry statistics and may use outside experts when gathering this information. Once the TEV is determined for a portfolio company, the Valuation Team generally allocates the TEV to the portfolio company’s securities based on the facts and circumstances of the securities, which typically results in the allocation of fair value to securities based on the order of their relative priority in the capital structure. Generally, the Valuation Team uses TEV to value our equity investments and, in the circumstances where we have the ability to effectuate a sale of a portfolio company, our debt investments.
|
|
|
including external parties’ guaranties, any relevant offers or letters of intent to acquire the portfolio company, timing of expected loan repayments, and the markets in which the portfolio company operates.
Success Fee Income Recognition
Federal Income Taxes
We are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized benefits will change materially in the next twelve months.
stockholder’s account. Computershare purchases shares in the open market in connection with the obligations under the plan. The dividend reinvestment plan iswas not open to holders of our preferred stock.
stock during periods in which we had preferred stock outstanding.
In May 2020, the Securities and Exchange Commission (“SEC”) adopted the final rule under SEC release No. 33-10786,Amendments to Financial Disclosures about Acquired and Disposed Businesses, amending certain disclosure requirements applicable to acquisitions and dispositions of businesses, including real estate operations and investment companies. The final rule became effective on January 1, 2021, with early adoption is permitted, and we adopted the final rule on January 1, 2021.
|
|
|
We transfer investments in and out of Level 1, 2 and 3 of the valuation hierarchy as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period. There were no transfers in or out of Level 1, 2 and 3 during the years ended March 31, 2022 and 2021, and 2020, respectively.
Fair Value Measurements | ||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
As of March 31, 2021: | ||||||||||||||||
Secured first lien debt | $ | 368,688 | $ | — | $ | — | $ | 368,688 | ||||||||
Secured second lien debt | 102,897 | — | — | 102,897 | ||||||||||||
Preferred equity | 159,478 | — | — | 159,478 | ||||||||||||
Common equity/equivalents | 2,766 | — | 95 | (A) | 2,671 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments at March 31, 2021 | $ | 633,829 | $ | — | $ | 95 | $ | 633,734 | ||||||||
|
|
|
|
|
|
|
|
Fair Value Measurements | ||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
As of March 31, 2020: | ||||||||||||||||
Secured first lien debt | $ | 308,248 | $ | — | $ | — | $ | 308,248 | ||||||||
Secured second lien debt | 123,340 | — | — | 123,340 | ||||||||||||
Preferred equity | 119,849 | — | — | 119,849 | ||||||||||||
Common equity/equivalents | 14,487 | — | 33 | (A) | 14,454 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Investments at March 31, 2020 | $ | 565,924 | $ | — | $ | 33 | $ | 565,891 | ||||||||
|
|
|
|
|
|
|
|
|
Fair Value Measurements Fair Value As of March 31, 2022: Secured first lien debt $ 425,087 $ — $ — $ 425,087 Secured second lien debt 67,958 — — 67,958 Preferred equity 217,599 — — 217,599 Common equity/equivalents 3,752 — 74 (A) 3,678 Total Investments at March 31, 2022 $ 714,396 $ — $ 74 $ 714,322
Fair Value Measurements | ||||||||||||||||||||||||||
Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||
As of March 31, 2021: | ||||||||||||||||||||||||||
Secured first lien debt | $ | 368,688 | $ | — | $ | — | $ | 368,688 | ||||||||||||||||||
Secured second lien debt | 102,897 | — | — | 102,897 | ||||||||||||||||||||||
Preferred equity | 159,478 | — | — | 159,478 | ||||||||||||||||||||||
Common equity/equivalents | 2,766 | — | 95 | (A) | 2,671 | |||||||||||||||||||||
Total Investments at March 31, 2021 | $ | 633,829 | $ | — | $ | 95 | $ | 633,734 |
Total Recurring Fair Value Measurements Reported in Consolidated Statements of Assets and Liabilities Valued Using Level 3 Inputs March 31, | ||||||||
2021 | 2020 | |||||||
Non-Control/Non-Affiliate Investments | ||||||||
Secured first lien debt | $ | 187,587 | $ | 172,406 | ||||
Secured second lien debt | 41,926 | 48,031 | ||||||
Preferred equity | 65,943 | 60,854 | ||||||
Common equity/equivalents(A) | 2,671 | 10,805 | ||||||
|
|
|
| |||||
Total Non-Control/Non-Affiliate Investments | 298,127 | 292,096 | ||||||
Affiliate Investments | ||||||||
Secured first lien debt | 181,101 | 135,842 | ||||||
Secured second lien debt | 47,971 | 65,309 | ||||||
Preferred equity | 78,905 | 42,837 | ||||||
Common equity/equivalents | — | 3,649 | ||||||
|
|
|
| |||||
Total Affiliate Investments | 307,977 | 247,637 | ||||||
Control Investments | ||||||||
Secured first lien debt | — | — | ||||||
Secured second lien debt | 13,000 | 10,000 | ||||||
Preferred equity | 14,630 | 16,158 | ||||||
Common equity/equivalents | — | — | ||||||
|
|
|
| |||||
Total Control Investments | 27,630 | 26,158 | ||||||
|
|
|
| |||||
Total investments at fair value using Level 3 inputs | $ | 633,734 | $ | 565,891 | ||||
|
|
|
|
|
Total Recurring Fair Value Measurements Reported in Consolidated Statements of Assets and Liabilities Valued Using Level 3 Inputs | |||||||||||
March 31, | |||||||||||
2022 | 2021 | ||||||||||
Non-Control/Non-Affiliate Investments | |||||||||||
Secured first lien debt | $ | 233,673 | $ | 187,587 | |||||||
Secured second lien debt | 66,917 | 41,926 | |||||||||
Preferred equity | 139,927 | 65,943 | |||||||||
Common equity/equivalents(A) | 1,533 | 2,671 | |||||||||
Total Non-Control/Non-Affiliate Investments | 442,050 | 298,127 | |||||||||
Affiliate Investments | |||||||||||
Secured first lien debt | 191,414 | 181,101 | |||||||||
Secured second lien debt | 1,041 | 47,971 | |||||||||
Preferred equity | 77,672 | 78,905 | |||||||||
Common equity/equivalents | 1,432 | — | |||||||||
Total Affiliate Investments | 271,559 | 307,977 | |||||||||
Control Investments | |||||||||||
Secured first lien debt | — | — | |||||||||
Secured second lien debt | — | 13,000 | |||||||||
Preferred equity | — | 14,630 | |||||||||
Common equity/equivalents | 713 | — | |||||||||
Total Control Investments | 713 | 27,630 | |||||||||
Total investments at fair value using Level 3 inputs | $ | 714,322 | $ | 633,734 |
measurements. The weighted-average calculations in the table below are based on the principal balances for all debt-related calculations and on the cost basis for all equity-related calculations for the particular input.
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||||||
Fair Value as of | Valuation Technique/ Methodology | Unobservable Input | Range/Weighted-Average as of | |||||||||||||
March 31, 2021 | March 31, 2020 | March 31, 2021 | March 31, 2020 | |||||||||||||
Secured first lien debt | $ | 303,330 | (A) | $ | 280,499 | TEV | EBITDA multiple | 4.6x – 8.0x / 7.0x | 4.2x – 8.1x / 6.2x | |||||||
EBITDA | $1,403 – $9,500 / $5,746 | $1,372 – $13,042 / $5,894 | ||||||||||||||
Revenue multiple | 0.6x – 0.7x / 0.6x | 0.3x – 0.7x / 0.5x | ||||||||||||||
Revenue | $14,474 – $30,537 / $26,110 | $14,343 – $24,060 / $18,141 | ||||||||||||||
65,358 | 27,749 | Yield Analysis | Discount Rate | 13.3% – 17.9% / 14.7% | 16.2% – 18.7% / 16.8% | |||||||||||
Secured second lien debt | 53,122 | (B) | 107,195 | TEV | EBITDA multiple | 5.9x – 6.6x / 6.2x | 5.1x – 6.2x / 5.6x | |||||||||
EBITDA | $4,551 – $5,100 / $4,772 | $4,459 – $13,042 / $7,444 | ||||||||||||||
Revenue multiple | 0.7x – 0.7x / 0.7x | 0.7x – 0.7x / 0.7x | ||||||||||||||
Revenue | $14,474 – $14,474 / $14,474 | $15,267 – $15,267 / $15,267 | ||||||||||||||
49,775 | 16,145 | Yield Analysis | Discount Rate | 8.1% – 13.5% / 11.2% | 12.6% – 16.4% / 13.5% | |||||||||||
Preferred equity | 159,478 | (C) | 119,849 | TEV | EBITDA multiple | 5.6x – 8.0 / 6.6 x | 5.1x – 8.1x / 6.1x | |||||||||
EBITDA | $2,587 – $9,720 / $5,938 | $356 – $13,042 / $5,596 | ||||||||||||||
Revenue multiple | 0.6x – 0.7x / 0.6x | 0.6x – 0.7x / 0.6x | ||||||||||||||
Revenue | $14,474 – $30,537 / $25,465 | $15,267 – $24,060 / $21,283 | ||||||||||||||
Common equity/equivalents(E) | 2,671 | (D) | 14,454 | TEV | EBITDA multiple | 4.6x – 7.1x / 5.7x | 4.2x – 7.4x / 5.9x | |||||||||
EBITDA | $1,403 – $7,135 / $4,132 | $1,372 – $16,061 / $9,258 | ||||||||||||||
Revenue multiple | 0.7x – 0.7x / 0.7x | 0.7x – 0.7x / 0.7x | ||||||||||||||
Revenue | $14,474 – $14,474 / $14,474 | $15,267 – $15,267 / $15,267 | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 633,734 | $ | 565,891 | ||||||||||||
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements | |||||||||||||||||||||||||||||||||||
Fair Value as of | Valuation Technique/ Methodology | Unobservable Input | Range / Weighted-Average as of | ||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2021 | March 31, 2022 | March 31, 2021 | ||||||||||||||||||||||||||||||||
Secured first lien debt | $ | 411,023 | $ | 303,330 | (A) | TEV | EBITDA multiple | 3.4x – 9.3x / 7.0x | 4.6x – 8.0x / 7.0x | ||||||||||||||||||||||||||
EBITDA | $3,990 – $13,707 / $8,221 | $1,403 – $9,500 / $5,746 | |||||||||||||||||||||||||||||||||
Revenue multiple | 0.7x – 0.7x / 0.7x | 0.6x – 0.7x / 0.6x | |||||||||||||||||||||||||||||||||
Revenue | $14,072 – $14,072 / $14,072 | $14,474 – $30,537 / $26,110 | |||||||||||||||||||||||||||||||||
14,064 | 65,358 | Yield Analysis | Discount Rate | 11.3% – 15.2% / 14.6% | 13.3% – 17.9% / 14.7% | ||||||||||||||||||||||||||||||
Secured second lien debt | 39,637 | 53,122 | (B) | TEV | EBITDA multiple | 5.6x – 6.8x / 6.0x | 5.9x – 6.6x / 6.2x | ||||||||||||||||||||||||||||
EBITDA | $3,953 – $5,488 / $4,959 | $4,551 – $5,100 / $4,772 | |||||||||||||||||||||||||||||||||
Revenue multiple | 0.7x – 0.7x/ 0.7x | 0.7x – 0.7x / 0.7x | |||||||||||||||||||||||||||||||||
Revenue | $14,072 – $14,072 / $14,072 | $14,474 – $14,474 / $14,474 | |||||||||||||||||||||||||||||||||
28,321 | 49,775 | Yield Analysis | Discount Rate | 10.0% – 12.2% / 11.6% | 8.1% – 13.5% / 11.2% | ||||||||||||||||||||||||||||||
Preferred equity | 217,599 | 159,478 | (C) | TEV | EBITDA multiple | 3.4x – 9.3x / 6.8x | 5.6x – 8.0x / 6.6x | ||||||||||||||||||||||||||||
EBITDA | $1,210 – $13,707 / $6,926 | $2,587 – $9,720 / $5,938 | |||||||||||||||||||||||||||||||||
Revenue multiple | 0.7x – 0.7x / 0.7x | 0.6x – 0.7x / 0.7x | |||||||||||||||||||||||||||||||||
Revenue | $14,072 – $14,072 / $14,072 | $14,474 – $30,537 / $25,465 | |||||||||||||||||||||||||||||||||
Common equity/equivalents(E) | 3,678 | 2,671 | (D) | TEV | EBITDA multiple | 4.8x – 8.4x / 5.8x | 4.6x – 7.1x / 5.7x | ||||||||||||||||||||||||||||
EBITDA | $829 – $13,707 / $5,709 | $1,403 – $7,135 / $4,132 | |||||||||||||||||||||||||||||||||
Revenue multiple | 0.7x – 0.7x / 0.7x | 0.7x – 0.7x / 0.7x | |||||||||||||||||||||||||||||||||
Revenue | $14,072 – $14,072 / $14,072 | $14,474 – $14,474 / $14,474 | |||||||||||||||||||||||||||||||||
Total | $ | 714,322 | $ | 633,734 |
Secured First Lien Debt | Secured Second Lien Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||
Year ended March 31, 2021: | ||||||||||||||||||||
Fair value as of March 31, 2020 | $ | 308,248 | $ | 123,340 | $ | 119,849 | $ | 14,454 | $ | 565,891 | ||||||||||
Total gain (loss): | ||||||||||||||||||||
Net realized gain (loss)(A) | (8,470 | ) | — | 3,545 | 14,433 | 9,508 | ||||||||||||||
Net unrealized appreciation (depreciation)(B) | 453 | (998 | ) | 26,349 | (98 | ) | 25,706 | |||||||||||||
Reversal of previously recorded (appreciation) depreciation upon realization(B) | — | — | (84 | ) | (11,785 | ) | (11,869 | ) | ||||||||||||
New investments, repayments and settlements(C): | ||||||||||||||||||||
Issuances / originations | 65,227 | 4,519 | 25,294 | 252 | 95,292 | |||||||||||||||
Settlements / repayments | (20,734 | ) | — | — | — | (20,734 | ) | |||||||||||||
Sales | — | — | (15,475 | ) | (14,585 | ) | (30,060 | ) | ||||||||||||
Transfers(D) | 23,964 | (23,964 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Fair value as of March 31, 2021 | $ | 368,688 | $ | 102,897 | $ | 159,478 | $ | 2,671 | $ | 633,734 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Secured First Lien Debt | Secured Second Lien Debt | Preferred Equity | Common Equity/ Equivalents | Total | ||||||||||||||||
Year ended March 31, 2020: | ||||||||||||||||||||
Fair value as of March 31, 2019 | $ | 331,090 | $ | 75,293 | $ | 195,377 | $ | 22,011 | $ | 623,771 | ||||||||||
Total gain (loss): | ||||||||||||||||||||
Net realized gain (loss)(A) | (9,659 | ) | — | 33,976 | 18,995 | 43,312 | ||||||||||||||
Net unrealized appreciation (depreciation)(B) | (3,439 | ) | (3,324 | ) | (35,619 | ) | (8,556 | ) | (50,938 | ) | ||||||||||
Reversal of previously recorded (appreciation) depreciation upon realization(B) | 9,660 | 67 | (25,187 | ) | (11,448 | ) | (26,908 | ) | ||||||||||||
New investments, repayments and settlements(C): | ||||||||||||||||||||
Issuances / originations | 86,895 | 25,002 | 32,371 | 1,200 | 145,468 | |||||||||||||||
Settlements / repayments | (56,697 | ) | (23,300 | ) | — | — | (79,997 | ) | ||||||||||||
Sales | — | — | (68,635 | ) | (20,182 | ) | (88,817 | ) | ||||||||||||
Transfers(D) | (49,602 | ) | 49,602 | (12,434 | ) | 12,434 | — | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Fair value as of March 31, 2020 | $ | 308,248 | $ | 123,340 | $ | 119,849 | $ | 14,454 | $ | 565,891 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020:Secured
First Lien
DebtSecured
Second Lien
DebtPreferred
EquityCommon
Equity/
EquivalentsTotal Year ended March 31, 2022: Fair value as of March 31, 2021 $ 368,688 $ 102,897 $ 159,478 $ 2,671 $ 633,734 Total gain (loss): (10,000) — 23,725 — 13,725 756 2,956 111,405 (15,027) 100,090 860 — (26,053) — (25,193) Issuances / originations 68,638 9,648 14,472 — 92,758 Settlements / repayments (48,898) (2,500) — — (51,398) Sales — — (49,394) — (49,394) 45,043 (45,043) (16,034) 16,034 — Fair value as of March 31, 2022 $ 425,087 $ 67,958 $ 217,599 $ 3,678 $ 714,322
Secured First Lien Debt | Secured Second Lien Debt | Preferred Equity | Common Equity/ Equivalents | Total | |||||||||||||||||||||||||
Year ended March 31, 2021: | |||||||||||||||||||||||||||||
Fair value as of March 31, 2020 | $ | 308,248 | $ | 123,340 | $ | 119,849 | $ | 14,454 | $ | 565,891 | |||||||||||||||||||
Total gain (loss): | |||||||||||||||||||||||||||||
Net realized gain (loss)(A) | (8,470) | — | 3,545 | 14,433 | 9,508 | ||||||||||||||||||||||||
Net unrealized appreciation (depreciation)(B) | 453 | (998) | 26,349 | (98) | 25,706 | ||||||||||||||||||||||||
Reversal of previously recorded (appreciation) depreciation upon realization(B) | — | — | (84) | (11,785) | (11,869) | ||||||||||||||||||||||||
New investments, repayments and settlements(C): | |||||||||||||||||||||||||||||
Issuances / originations | 65,227 | 4,519 | 25,294 | 252 | 95,292 | ||||||||||||||||||||||||
Settlements / repayments | (20,734) | — | — | — | (20,734) | ||||||||||||||||||||||||
Sales | — | — | (15,475) | (14,585) | (30,060) | ||||||||||||||||||||||||
Transfers(D) | 23,964 | (23,964) | — | — | — | ||||||||||||||||||||||||
Fair value as of March 31, 2021 | $ | 368,688 | $ | 102,897 | $ | 159,478 | $ | 2,671 | $ | 633,734 |
2020.
•In July 2020,May 2021, we dissolved our investment in Channel Technologies Group, LLC and recorded a realized loss of $1.8 million.
In September 2020,June 2021, we invested an additional $8.0$6.5 million in PSI Molded in the form of preferred equity and also amended certain terms of our existing debt.
In December 2020, we recapitalized our investment in Old World Christmas, Inc. (“Old World”) and invested an additional $27.0 million in the form of secured first lien debt. In connection with this investment, Old World paid dividend income of $3.2 million and additional equity proceeds of $10.8 million, resulting in a $7.5 million return of preferred equity cost basis and a realized gain of $3.3 million.
In December 2020, we invested an additional $3.0 million in Galaxy Technologies, Inc. (“Galaxy”)J.R. Hobbs in the form of secured second lien debt. In connection with thisthe investment, Galaxy purchased SBS Industries, LLC (a subsidiary of SBS Industries Holdings, Inc., one of our other portfolio companies). SBS Industries Holdings, Inc. used proceeds from the salesecured second lien debt was converted to partially repay our $11.4 millionsecured first lien debt, resulting in a realized loss of $8.5 million.
•In December 2020,June 2021, we sold our investment in Frontier Packaging,Head Country, Inc. (“Head Country”), which resulted in dividend income of $0.9 million, success fee income of $0.2$2.0 million and a realized gain of $14.0$3.6 million. In connection with the sale, we received net cash proceeds of $26.0$16.7 million, including the repayment of our debt investment of $9.5$9.1 million at par.
Conc 2022. Secured first lien debt Secured second lien debt Total debt Preferred equity Common equity/equivalents Total equity/equivalents Total investments Concentrations2021,2022, our investment portfolio consisted of investments in 2826 portfolio companies located in 1719 states across 1314 different industries with an aggregate fair value of $633.8$714.4 million. Our investments in Pioneer Square BrandsBassett Creek Services, Inc., Old World, Counsel Press, Inc., Old World, J.R. Hobbs Co. – Atlanta, LLC,Brunswick Bowling Products, Inc., and Bassett Creek Services,Schylling, Inc., represent our five largest portfolio investments at fair value, and collectively comprised $233.9$272.7 million, or 36.9%38.1%, of our total investment portfolio at fair value as of March 31, 2021.20212022 and 2020:2021: March 31, 2021 March 31, 2020 Cost Fair Value Cost Fair Value $ 379,512 57.2 % $ 368,688 58.2 % $ 310,019 50.9 % $ 308,248 54.5 % 114,206 17.2 102,897 16.2 143,155 23.5 123,340 21.8 493,718 74.4 471,585 74.4 453,174 74.4 431,588 76.3 166,361 25.1 159,478 25.2 152,998 25.1 119,849 21.2 3,484 0.5 2,766 0.4 3,410 0.5 14,487 2.5 169,845 25.6 162,244 25.6 156,408 25.6 134,336 23.7 $ 663,563 100.0 % $ 633,829 100.0 % $ 609,582 100.0 % $ 565,924 100.0 %
March 31, 2022 March 31, 2021 Cost Fair Value Cost Fair Value Secured first lien debt $ 429,457 64.2 % $ 425,087 59.5 % $ 379,512 57.2 % $ 368,688 58.2 % Secured second lien debt 81,147 12.1 % 67,958 9.5 % 114,206 17.2 % 102,897 16.2 % Total debt 510,604 76.3 % 493,045 69.0 % 493,718 74.4 % 471,585 74.4 % Preferred equity 143,079 21.4 % 217,599 30.5 % 166,361 25.1 % 159,478 25.2 % Common equity/equivalents 15,565 2.3 % 3,752 0.5 % 3,484 0.5 % 2,766 0.4 % Total equity/equivalents 158,644 23.7 % — 221,351 31.0 % 169,845 25.6 % 162,244 25.6 % Total investments $ 669,248 100.0 % $ 714,396 100.0 % $ 663,563 100.0 % $ 633,829 100.0 %
March 31, 2021 | March 31, 2020 | |||||||||||||||
Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | |||||||||||||
Diversified/Conglomerate Services | $ | 261,714 | 41.3 | % | $ | 226,805 | 40.1 | % | ||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products | 94,663 | 15.0 | 83,705 | 14.8 | ||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) | 60,852 | 9.6 | 34,865 | 6.2 | ||||||||||||
Leisure, Amusement, Motion Pictures, Entertainment | 45,209 | 7.1 | 35,240 | 6.2 | ||||||||||||
Healthcare, Education, and Childcare | 31,194 | 4.9 | 25,563 | 4.5 | ||||||||||||
Aerospace and Defense | 27,630 | 4.4 | 26,158 | 4.6 | ||||||||||||
Diversified/Conglomerate Manufacturing | 25,181 | 4.0 | 28,147 | 5.0 | ||||||||||||
Chemicals, Plastics, and Rubber | 22,985 | 3.6 | 16,737 | 3.0 | ||||||||||||
Telecommunications | 15,582 | 2.5 | 15,792 | 2.8 | ||||||||||||
Beverage, Food, and Tobacco | 15,519 | 2.4 | 12,545 | 2.2 | ||||||||||||
Cargo Transport | 15,211 | 2.4 | 13,316 | 2.4 | ||||||||||||
Machinery (Non-agriculture, Non-construction, and Non-electronic) | 14,199 | 2.2 | 23,091 | 4.1 | ||||||||||||
Containers, Packaging, and Glass | — | — | 20,360 | 3.6 | ||||||||||||
Other < 2.0% | 3,890 | 0.6 | 3,600 | 0.5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments | $ | 633,829 | 100.0 | % | $ | 565,924 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
2021:
March 31, 2022 | March 31, 2021 | ||||||||||||||||||||||
Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||
Diversified/Conglomerate Services | $ | 307,403 | 43.0 | % | $ | 261,714 | 41.3 | % | |||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products | 125,440 | 17.6 | % | 94,663 | 15.0 | % | |||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment | 46,514 | 6.5 | % | 45,209 | 7.1 | % | |||||||||||||||||
Healthcare, Education, and Childcare | 39,252 | 5.5 | % | 31,194 | 4.9 | % | |||||||||||||||||
Hotels, Motels, Inns, and Gaming | 37,923 | 5.3 | % | — | — | % | |||||||||||||||||
Telecommunications | 32,467 | 4.6 | % | 15,582 | 2.5 | % | |||||||||||||||||
Chemicals, Plastics, and Rubber | 26,618 | 3.7 | % | 22,985 | 3.6 | % | |||||||||||||||||
Aerospace and Defense | 25,296 | 3.5 | % | 27,630 | 4.4 | % | |||||||||||||||||
Mining, Steel, Iron and Non-Precious Metals | 24,250 | 3.4 | % | — | — | % | |||||||||||||||||
Cargo Transport | 14,533 | 2.0 | % | 15,211 | 2.4 | % | |||||||||||||||||
Diversified/Conglomerate Manufacturing | 14,064 | 2.0 | % | 25,181 | 4.0 | % | |||||||||||||||||
Machinery (Non-Agriculture, Non-Construction, and Non-Electronic) | 13,823 | 1.9 | % | 14,199 | 2.2 | % | |||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) | 5,315 | 0.8 | % | 60,852 | 9.6 | % | |||||||||||||||||
Beverage, Food, and Tobacco | — | — | % | 15,519 | 2.4 | % | |||||||||||||||||
Other < 2.0% | 1,498 | 0.2 | % | 3,890 | 0.6 | % | |||||||||||||||||
Total investments | $ | 714,396 | 100.0 | % | $ | 633,829 | 100.0 | % |
March 31, 2021 | March 31, 2020 | |||||||||||||||
Location | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||
South | $ | 182,529 | 28.8 | % | $ | 182,178 | 32.2 | % | ||||||||
Northeast | 163,938 | 25.9 | 146,434 | 25.9 | ||||||||||||
West | 160,581 | 25.3 | 90,214 | 15.9 | ||||||||||||
Midwest | 126,781 | 20.0 | 147,098 | 26.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total investments | $ | 633,829 | 100.0 | % | $ | 565,924 | 100.0 | % | ||||||||
|
|
|
|
|
|
|
|
2021:
March 31, 2022 | March 31, 2021 | |||||||||||||||||||||||||
Location | Fair Value | Percentage of Total Investments | Fair Value | Percentage of Total Investments | ||||||||||||||||||||||
Northeast | $ | 194,100 | 27.2 | % | $ | 163,938 | 25.9 | % | ||||||||||||||||||
South | 188,978 | 26.4 | % | 182,529 | 28.8 | % | ||||||||||||||||||||
Midwest | 172,711 | 24.2 | % | 126,781 | 20.0 | % | ||||||||||||||||||||
West | 158,607 | 22.2 | % | 160,581 | 25.3 | % | ||||||||||||||||||||
Total investments | $ | 714,396 | 100.0 | % | $ | 633,829 | 100 | % |
Amount | ||||||
For the fiscal years ending March 31: | 2022 | $ | 38,670 | |||
2023 | 119,200 | |||||
2024 | 118,350 | |||||
2025 | 165,278 | |||||
2026 | 52,250 | |||||
Thereafter | — | |||||
|
| |||||
Total contractual repayments | $ | 493,748 | ||||
Adjustments to cost basis of debt investments | (30 | ) | ||||
Investments in equity securities | 169,845 | |||||
|
| |||||
Total cost basis of investments held as of March 31, 2021: | $ | 663,563 | ||||
|
|
2022:
Amount | ||||||||||||||
For the fiscal years ending March 31: | 2023 | $ | 92,888 | |||||||||||
2024 | 97,418 | |||||||||||||
2025 | 169,334 | |||||||||||||
2026 | 78,231 | |||||||||||||
2027 | 71,245 | |||||||||||||
Thereafter | 1,500 | |||||||||||||
Total contractual repayments | $ | 510,616 | ||||||||||||
Adjustments to cost basis of debt investments | (12) | |||||||||||||
Investments in equity securities | 158,644 | |||||||||||||
Total cost basis of investments held as of March 31, 2022: | $ | 669,248 |
2022.
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Average total assets subject to base management fee(A) | $ | 605,750 | $ | 607,250 | $ | 637,600 | ||||||
Multiplied by annual base management fee of 2.0% | 2.0 | % | 2.0 | % | 2.0 | % | ||||||
|
|
|
|
|
| |||||||
Base management fee(B) | 12,115 | 12,145 | 12,752 | |||||||||
Credits to fees from Adviser—other(B) | (2,949 | ) | (4,436 | ) | (5,509 | ) | ||||||
|
|
|
|
|
| |||||||
Net base management fee | $ | 9,166 | $ | 7,709 | $ | 7,243 | ||||||
|
|
|
|
|
| |||||||
Loan servicing fee(B) | $ | 7,082 | $ | 6,859 | $ | 6,827 | ||||||
Credits to base management fee—loan servicing fee(B) | (7,082 | ) | (6,859 | ) | (6,827 | ) | ||||||
|
|
|
|
|
| |||||||
Net loan servicing fee | $ | — | $ | — | $ | — | ||||||
|
|
|
|
|
| |||||||
Incentive fee – income-based | $ | 3,746 | $ | 4,338 | $ | 4,419 | ||||||
Incentive fee – capital gains-based(C) | 5,032 | (6,718 | ) | 17,835 | ||||||||
|
|
|
|
|
| |||||||
Total incentive fee(B) | 8,778 | (2,380 | ) | 22,254 | ||||||||
Credits to fees from Adviser-other(B) | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Net total incentive fee | $ | 8,778 | $ | (2,380 | ) | $ | 22,254 | |||||
|
|
|
|
|
|
|
|
|
Year Ended March 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Average total assets subject to base management fee(A) | $ | 705,650 | $ | 605,750 | $ | 607,250 | |||||||||||
Multiplied by annual base management fee of 2.0% | 2.0 | % | 2.0 | % | 2.0 | % | |||||||||||
Base management fee(B) | 14,113 | 12,115 | 12,145 | ||||||||||||||
Credits to fees from Adviser - other(B) | (6,497) | (2,949) | (4,436) | ||||||||||||||
Net base management fee | $ | 7,616 | $ | 9,166 | $ | 7,709 | |||||||||||
Loan servicing fee(B) | $ | 7,178 | $ | 7,082 | $ | 6,859 | |||||||||||
Credits to base management fee - loan servicing fee(B) | (7,178) | (7,082) | (6,859) | ||||||||||||||
Net loan servicing fee | $ | — | $ | — | $ | — | |||||||||||
Incentive fee – income-based | $ | 8,074 | $ | 3,746 | $ | 4,338 | |||||||||||
Incentive fee – capital gains-based(C) | 18,286 | 5,032 | (6,718) | ||||||||||||||
Total incentive fee(B) | 26,360 | 8,778 | (2,380) | ||||||||||||||
Credits to fees from Adviser - other(B) | — | — | — | ||||||||||||||
Net total incentive fee | $ | 26,360 | $ | 8,778 | $ | (2,380) |
company management team members. The Adviser non-contractually, unconditionally, and irrevocably credits 100% of any fees received for such services against the base management fee that we would otherwise be required to pay to the Adviser; however, pursuant to the terms of the Advisory Agreement, a small percentage of certain of such fees, totaling $0.3 million for year ended March 31, 2022, and $0.2 million for each of the years ended March 31, 2021, 2020, and 2019,2020, was retained by the Adviser in the form of reimbursement, at cost, for tasks completed by personnel of the Adviser, primarily related to the valuation of portfolio companies.
•No incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the Hurdle Rate;
•100.0% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the Hurdle Rate but is less than 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter; and
•20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.1875% of our net assets, adjusted appropriately for any share issuances or repurchases during the period, in any calendar quarter.
the net sales price of each investment, when sold, and the original cost of such investment since our inception. Cumulative aggregate realized capital losses equals the sum of the deficit between the net sales price of each investment, when sold, and the original cost of such investment since our inception. The entire portfolio’s aggregate unrealized capital depreciation, if any, equals the sum of the deficit between the fair value of each investment security as of the applicable calculation date and the original cost of such investment security. During the year ended March 31, 2022, capital gains-based incentive fees of $5.3 million were contractually due and paid to the Adviser. As of and for the year ended March 31, 2021, no capital gains-based incentive fees were contractually due and paid to the Adviser. During the year ended March 31, 2020, capital gains-based incentive fees of $8.1 million were contractually due and paid to the Adviser, which was the first payment of a capital gains-based incentive fee since our inception.
2022.
Dealer Manager Agreement
On May 22, 2020, the Company, entered into a dealer manager agreement (the “Dealer Manager Agreement”), with Gladstone Securities whereby Gladstone Securities would serve as the Company’s exclusive dealer manager in connection with the Company’s offering (the “Offering”) of up to $350.0 million aggregate principal amount of the Company’s 6.00% Notes due 2040 (the “Notes”) on a “reasonable best efforts” basis. From inception of the Offering through February 23, 2021, no Notes had been sold and the Company terminated the Dealer Manager Agreement and the Offering as of such date.
Other Transactions
As of March 31, | ||||||||
2021 | 2020 | |||||||
Base management and loan servicing fee due to Adviser, net of credits | $ | 1,435 | $ | (222 | ) | |||
Incentive fee due to Adviser(A) | 14,163 | 7,387 | ||||||
Other due to Adviser | 66 | 13 | ||||||
|
|
|
| |||||
Total fees due to Adviser | $ | 15,664 | $ | 7,178 | ||||
Fee due to Administrator | $ | 577 | $ | 582 | ||||
|
|
|
| |||||
Total related party fees due | $ | 16,241 | $ | 7,760 | ||||
|
|
|
|
|
As of March 31, | |||||||||||
2022 | 2021 | ||||||||||
Base management and loan servicing fee due to Adviser, net of credits | $ | 1,648 | $ | 1,435 | |||||||
Incentive fee due to Adviser(A) | 27,577 | 14,163 | |||||||||
Other due to Adviser | 63 | 66 | |||||||||
Total fees due to Adviser | $ | 29,288 | $ | 15,664 | |||||||
Fee due to Administrator | 627 | 577 | |||||||||
Total related party fees due | $ | 29,915 | $ | 16,241 |
was extended to February 29, 2024, and if not renewed or extended by such date, all principal and interest will be due and payable on February 28, 2026 (two years after the revolving period end date). As of March 31, 2021,2022, the Credit Facility provided two one one-year extension optionsoption that may be exercised on or before the first and second anniversary of March 8, 2021, subject to approval by all lenders. Additionally, the COVID-19 Relief Period (described below) was extended to September 30, 2021.
As of March 31, | ||||||||
2021 | 2020 | |||||||
Commitment amount | $ | 180,000 | $ | 200,000 | ||||
Borrowings outstanding at cost | 22,400 | 49,200 | ||||||
Availability(A) | 157,600 | 150,800 |
For the Years Ended March 31 | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Weighted-average borrowings outstanding | $ | 82,632 | $ | 38,374 | $ | 97,866 | ||||||
Effective interest rate(B) | 4.3 | % | 9.4 | % | 5.9 | % | ||||||
Commitment (unused) fees incurred | $ | 819 | $ | 1,643 | $ | 656 |
|
|
As of March 31, | |||||||||||
2022 | 2021 | ||||||||||
Commitment amount | $ | 180,000 | $ | 180,000 | |||||||
Borrowings outstanding at cost | $ | — | $ | 22,400 | |||||||
Availability(A) | $ | 180,000 | $ | 157,600 |
For the Years Ended March 31 | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Weighted-average borrowings outstanding | $ | 18,051 | $ | 82,632 | $ | 38,374 | |||||||||||
Effective interest rate(B) | 12.5 | % | 4.3 | % | 9.4 | % | |||||||||||
Commitment (unused) fees incurred | $ | 1,641 | $ | 819 | $ | 1,643 |
the greater of $210.0 million or $210.0 million plus 50% of all equity and subordinated debt raised minus 50% of any equity or subordinated debt redeemed or retired after November 16, 2016, which equated to $266.2$286.3 million as of March 31, 2021,2022, (ii) asset coverage with respect to senior securities representing indebtedness of at least 150% (or such percentage as may be set forth in Section 18 of the 1940 Act, as modified by Section 61 of the 1940 Act); and (iii) our status as a BDC under the 1940 Act and as a RIC under the Code. As of March 31, 2021,2022, and as defined in the performance guaranty of the Credit Facility, we had a net worth of $597.1$701.2 million, asset coverage on our senior securities representing indebtedness of 398.0%252.9%, calculated in compliance with the requirements of Sections 18 and 61 of the 1940 Act, and an active status as a BDC and RIC. As of March 31, 2021,2022, we were in compliance with all covenants under the Credit Facility.
Level 3 – Borrowings | ||||||||
Recurring Fair Value Measurements | ||||||||
Reported in Consolidated | ||||||||
Statements of Assets and Liabilities Using Significant Unobservable Inputs (Level 3) As of March 31, | ||||||||
2021 | 2020 | |||||||
Credit Facility | $ | 22,400 | $ | 49,200 | ||||
|
|
|
|
Fair Value Measurements of Borrowings Using Significant Unobservable Inputs (Level 3) Reported in | ||||
Consolidated Statements of Assets and Liabilities | ||||
Credit | ||||
Facility | ||||
Year ended March 31, 2021: | ||||
Fair value at March 31, 2020 | $ | 49,200 | ||
Borrowings | 125,900 | |||
Repayments | (152,700 | ) | ||
|
| |||
Fair value at March 31, 2021 | $ | 22,400 | ||
|
| |||
Year ended March 31, 2020: | ||||
Fair value at March 31, 2019 | $ | 53,000 | ||
Borrowings | 188,300 | |||
Repayments | (192,100 | ) | ||
|
| |||
Fair value at March 31, 2020 | $ | 49,200 | ||
|
|
Level 3 – Borrowings 2022 2021 Credit Facility $ — $ 22,400
Fair Value Measurements of Borrowings Using Significant Unobservable Inputs (Level 3) Reported in Consolidated Statements of Assets and Liabilities | |||||
Credit Facility | |||||
Year ended March 31, 2022: | |||||
Fair value at March 31, 2021 | $ | 22,400 | |||
Borrowings | 111,700 | ||||
Repayments | (134,100) | ||||
Fair value at March 31, 2022 | $ | — | |||
Year ended March 31, 2021: | |||||
Fair value at March 31, 2020 | $ | 49,200 | |||
Borrowings | 125,900 | ||||
Repayments | (152,700) | ||||
Fair value at March 31, 2021 | $ | 22,400 |
Description | Ticker Symbol | Date Issued | Maturity Date(A) | Interest Rate | Notes Outstanding | Principal Amount per Note | Aggregate Principal Amount | |||||||||||||||||
2026 Notes | GAINN | March 2, 2021 | May 1, 2026 | 5.00 | % | 5,117,500 | $ | 25.00 | $ | 127,938 | ||||||||||||||
|
| |||||||||||||||||||||||
Notes payable, gross(B) |
| $ | 127,938 | |||||||||||||||||||||
Less: Discounts |
| (4,055 | ) | |||||||||||||||||||||
|
| |||||||||||||||||||||||
Notes payable, net(C) |
| $ | 123,883 | |||||||||||||||||||||
|
|
|
|
|
As of March 31, 2022: | ||||||||||||||||||||||||||||||||||||||||||||
Description | Ticker Symbol | Date Issued | Maturity Date(A) | Interest Rate | Notes Outstanding | Principal Amount per Note | Aggregate Principal Amount | |||||||||||||||||||||||||||||||||||||
2026 Notes | GAINN | March 2, 2021 | May 1, 2026 | 5.00% | 5,117,500 | $ | 25.00 | $ | 127,938 | |||||||||||||||||||||||||||||||||||
2028 Notes | GAINZ | August 18, 2021 | November 1, 2028 | 4.875% | 5,382,000 | $ | 25.00 | 134,550 | ||||||||||||||||||||||||||||||||||||
Notes payable, gross(B) | 10,499,500 | 262,488 | ||||||||||||||||||||||||||||||||||||||||||
Less: Discounts | (6,236) | |||||||||||||||||||||||||||||||||||||||||||
Notes payable, net(C) | $ | 256,252 |
As of March 31, 2021: | ||||||||||||||||||||||||||||||||||||||||||||
Description | Ticker Symbol | Date Issued | Maturity Date(A) | Interest Rate | Notes Outstanding | Principal Amount per Note | Aggregate Principal Amount | |||||||||||||||||||||||||||||||||||||
2026 Notes | GAINN | March 2, 2021 | May 1, 2026 | 5.00% | 5,117,500 | $ | 25.00 | $ | 127,938 | |||||||||||||||||||||||||||||||||||
Notes payable, gross(B) | 127,938 | |||||||||||||||||||||||||||||||||||||||||||
Less: Discounts | (4,055) | |||||||||||||||||||||||||||||||||||||||||||
Notes payable, net(C) | $ | 123,883 |
the agreement with the third-party to include an additional $0.1 million. ASC Topic 860, “Transfers and Servicing” requires us to treat the participation as a financing-type transaction. Specifically, the third-party has a senior claim to our remaining investment in the event of default by Ginsey which, in part, resulted in the loan participation bearing a rate of interest lower than the contractual rate established at origination. Therefore, our accompanying Consolidated Statements of Assets and Liabilities reflect the entire secured second lien term debt investment in Ginsey and a corresponding $5.1 million secured borrowing liability. The secured borrowing has a stated fixed interest rate of 7.0% and a maturity date of January 3, 2025.
The shares of Series E Term Preferred Stock are traded under the ticker symbol “GAINL” on the Nasdaq Global Select Market (“Nasdaq”). Our Series E Term Preferred Stock is not convertible into our common stock or any other security and provides for a fixed dividend equal to 6.375% per year, payable monthly. We are required to redeem all shares of our outstanding Series E Term Preferred Stock on August 31, 2025, for cash at a redemption price equal to $25.00 per share, plus an amount equal to accumulated but unpaid dividends, if any, to, but excluding, the date of redemption. In addition, two other potential mandatory redemption triggers are as follows: (1) upon the occurrence of certain events that would constitute a change in control of us, we would be required to redeem all of our outstanding Series E Term Preferred Stock, and (2) if we fail to maintain asset coverage as required by Sections 18 and 61 of the 1940 Act (which is currently 150%) and are unable to correct such failure within a specific amount of time, we are required to redeem a portion of our outstanding Series E Term Preferred Stock or otherwise cure the asset coverage redemption trigger (we may also redeem additional securities to cause asset coverage to be up to 200%). We may also voluntarily redeem all or a portion of our Series E Term Preferred Stock at any time.
In August 2018, we used the proceeds from the issuance of our Series E Term Preferred Stock, along with borrowings under the Credit Facility, to voluntarily redeem all outstanding shares of our 6.750% Series B Cumulative Term Preferred Stock (our “Series B Term Preferred Stock”) and 6.500% Series C Cumulative Term Preferred Stock (our “Series C Term Preferred Stock”), each of which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption of our Series B Term Preferred Stock and Series CE Term Preferred Stock, we incurred a loss on extinguishment of debt of $1.7$2.0 million, which was recorded in Realized loss on other in our accompanying
The following tables summarize our Series D Term Preferred Stock and our Series E Term Preferred Stock outstanding as of March 31, 2021 and 2020:
2021:
Class of | Ticker Symbol | Initial Issuance | Mandatory Redemption Date(B) | Interest Rate | Shares Outstanding | Liquidation Preference per Share | Aggregate Liquidation Preference | |||||||||||||||||||||
Series E | GAINL | August 22,2018 | August 31, 2025 | 6.375 | % | 3,774,853 | $ | 25.00 | $ | 94,371 | ||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Term preferred stock, gross(C) |
| 3,774,853 | $ | 25.00 | $ | 94,371 | ||||||||||||||||||||||
Less: Discounts |
| (2,162 | ) | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Term preferred stock, net(D) |
| $ | 92,209 | |||||||||||||||||||||||||
|
|
Class of Term Preferred Stock | Ticker Symbol | Initial Issuance | Mandatory Redemption Date | Interest Rate | Shares Outstanding | Liquidation Preference per Share | Aggregate Liquidation Preference | |||||||||||||||||||||||||||||||||||||
Series E | GAINL | August 22, 2018 | August 31, 2025 | 6.375% | 3,774,853 | $ | 25.00 | $ | 94,371 | |||||||||||||||||||||||||||||||||||
Term preferred stock, gross(A) | 3,774,853 | $ | 25.00 | $ | 94,371 | |||||||||||||||||||||||||||||||||||||||
Less: Discounts | (2,162) | |||||||||||||||||||||||||||||||||||||||||||
Term preferred stock, net(B) | $ | 92,209 |
Class of Term Preferred Stock(A) | Ticker Symbol | Initial Issuance | Mandatory Redemption Date(B) | Interest Rate | Shares Outstanding | Liquidation Preference per Share | Aggregate Liquidation Preference | |||||||||||||||||||||
Series D | GAINM | September 26, 2016 | September 30, 2023 | 6.250 | % | 2,300,000 | $ | 25.00 | $ | 57,500 | ||||||||||||||||||
Series E | GAINL | August 22,2018 | August 31, 2025 | 6.375 | % | 2,990,000 | 25.00 | 74,750 | ||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||
Term preferred stock, gross(C) |
| 5,290,000 | $ | 25.00 | $ | 132,250 | ||||||||||||||||||||||
Less: Discounts |
| (3,090 | ) | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
Term preferred stock, net(D) |
| $ | 129,160 | |||||||||||||||||||||||||
|
|
|
|
|
|
2021, asset coverage on our senior securities that are stock, calculated pursuant to Sections 18 and 61 of the 1940 Act, was 248.6%.
2020:
Declaration Date | Record Date | Payment Date | Dividend per Share of Series D Term Preferred Stock(A) | Dividend per Share of Series E Term Preferred Stock(B) | ||||||||
April 14, 2020 | April 24, 2020 | April 30, 2020 | $ | 0.13020833 | $ | 0.13281250 | ||||||
April 14, 2020 | May 19, 2020 | May 29, 2020 | 0.13020833 | 0.13281250 | ||||||||
April 14, 2020 | June 19, 2020 | June 30, 2020 | 0.13020833 | 0.13281250 | ||||||||
July 14, 2020 | July 24, 2020 | July 31, 2020 | 0.13020833 | 0.13281250 | ||||||||
July 14, 2020 | August 24, 2020 | August 31, 2020 | 0.13020833 | 0.13281250 | ||||||||
July 14, 2020 | September 23, 2020 | September 30, 2020 | 0.13020833 | 0.13281250 | ||||||||
October 13, 2020 | October 23, 2020 | October 30, 2020 | 0.13020833 | 0.13281250 | ||||||||
October 13, 2020 | November 20, 2020 | November 30, 2020 | 0.13020833 | 0.13281250 | ||||||||
October 13, 2020 | December 23, 2020 | December 31, 2020 | 0.13020833 | 0.13281250 | ||||||||
January 12, 2021 | January 22, 2021 | January 29, 2021 | 0.13020833 | 0.13281250 | ||||||||
January 12, 2021 | February 17, 2021 | February 26, 2021 | 0.13020833 | 0.13281250 | ||||||||
January 12, 2021 | March 18, 2021 | March 31, 2021 | 0.00868056 | (C) | 0.13281250 | |||||||
|
|
|
| |||||||||
Total | $ | 1.44097219 | $ | 1.59375000 | ||||||||
|
|
|
|
Declaration Date Record
DateApril 13, 2021 April 23, 2021 April 30, 2021 $ 0.13281250 April 13, 2021 May 19, 2021 May 28, 2021 0.13281250 April 13, 2021 June 18, 2021 June 30, 2021 0.13281250 July 13, 2021 July 23, 2021 July 30, 2021 0.13281250 July 13, 2021 August 23, 2021 August 31, 2021 0.07968750 (B) Total $ 0.61093750
Declaration Date | Record Date | Payment Date | Dividend per Share of Series D Term Preferred Stock(A) | Dividend per Share of Series E Term Preferred Stock(B) | ||||||||
April 9, 2019 | April 22, 2019 | April 30, 2019 | $0.13020833 | $0.13281250 | ||||||||
April 9, 2019 | May 22, 2019 | May 31, 2019 | 0.13020833 | 0.13281250 | ||||||||
April 9, 2019 | June 19, 2019 | June 28, 2019 | 0.13020833 | 0.13281250 | ||||||||
July 9, 2019 | July 22, 2019 | July 31, 2019 | 0.13020833 | 0.13281250 | ||||||||
July 9, 2019 | August 20, 2019 | August 30, 2019 | 0.13020833 | 0.13281250 | ||||||||
July 9, 2019 | September 17, 2019 | September 30, 2019 | 0.13020833 | 0.13281250 | ||||||||
October 8, 2019 | October 22, 2019 | October 31, 2019 | 0.13020833 | 0.13281250 | ||||||||
October 8, 2019 | November 19, 2019 | November 29, 2019 | 0.13020833 | 0.13281250 | ||||||||
October 8, 2019 | December 19, 2019 | December 31, 2019 | 0.13020833 | 0.13281250 | ||||||||
January 14, 2020 | January 24, 2020 | January 31, 2020 | 0.13020833 | 0.13281250 | ||||||||
January 14, 2020 | February 19, 2020 | February 28, 2020 | 0.13020833 | 0.13281250 | ||||||||
January 14, 2020 | March 20, 2020 | March 31, 2020 | 0.13020833 | 0.13281250 | ||||||||
|
|
|
| |||||||||
Total | $1.56249996 | $1.59375000 | ||||||||||
|
|
|
|
Declaration Date | Record Date | Payment Date | Dividend per Share of Series D Term Preferred Stock(C) | Dividend per Share of Series E Term Preferred Stock(A) | ||||||||||||||||||||||
April 14, 2020 | April 24, 2020 | April 30, 2020 | $ | 0.13020833 | $ | 0.13281250 | ||||||||||||||||||||
April 14, 2020 | May 19, 2020 | May 29, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
April 14, 2020 | June 19, 2020 | June 30, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 14, 2020 | July 24, 2020 | July 31, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 14, 2020 | August 24, 2020 | August 31, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 14, 2020 | September 23, 2020 | September 30, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 13, 2020 | October 23, 2020 | October 30, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 13, 2020 | November 20, 2020 | November 30, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 13, 2020 | December 23, 2020 | December 31, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 12, 2021 | January 22, 2021 | January 29, 2021 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 12, 2021 | February 17, 2021 | February 26, 2021 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 12, 2021 | March 18, 2021 | March 31, 2021 | 0.00868056 | (D) | 0.13281250 | |||||||||||||||||||||
Total | $ | 1.44097219 | $ | 1.59375000 |
Declaration Date | Record Date | Payment Date | Dividend per Share of Series B Term Preferred Stock(D) | Dividend per Share of Series C Term Preferred Stock(D) | Dividend per Share of Series D Term Preferred Stock(A) | Dividend per Share of Series E Term Preferred Stock(B) | ||||||||||||||
April 10, 2018 | April 20, 2018 | April 30, 2018 | $ | 0.140625 | $ | 0.135417 | $ | 0.13020833 | $ | — | ||||||||||
April 10, 2018 | May 22, 2018 | May 31, 2018 | 0.140625 | 0.135417 | 0.13020833 | — | ||||||||||||||
April 10, 2018 | June 20, 2018 | June 29, 2018 | 0.140625 | 0.135417 | 0.13020833 | — | ||||||||||||||
July 10, 2018 | July 20, 2018 | July 31, 2018 | 0.140625 | 0.135417 | 0.13020833 | — | ||||||||||||||
July 10, 2018 | August 21, 2018 | August 31, 2018 | 0.140625 | 0.135417 | 0.13020833 | — | ||||||||||||||
July 10, 2018 | September 19, 2018 | September 28, 2018 | — | — | 0.13020833 | — | ||||||||||||||
September 6, 2018 | September 19, 2018 | September 28, 2018 | — | — | — | 0.17265625 | (E) | |||||||||||||
October 9, 2018 | October 19, 2018 | October 31, 2018 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
October 9, 2018 | November 20, 2018 | November 30, 2018 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
October 9, 2018 | December 20, 2018 | December 31, 2018 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
January 8, 2019 | January 18, 2019 | January 31, 2019 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
January 8, 2019 | February 20, 2019 | February 28, 2019 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
January 8, 2019 | March 20, 2019 | March 29, 2019 | — | — | 0.13020833 | 0.13281250 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 0.703125 | $ | 0.677085 | $ | 1.56249996 | $ | 0.96953125 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Declaration Date | Record Date | Payment Date | Dividend per Share of Series D Term Preferred Stock(C) | Dividend per Share of Series E Term Preferred Stock(A) | ||||||||||||||||||||||
April 9, 2019 | April 22, 2019 | April 30, 2019 | $ | 0.13020833 | $ | 0.13281250 | ||||||||||||||||||||
April 9, 2019 | May 22, 2019 | May 31, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
April 9, 2019 | June 19, 2019 | June 28, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 9, 2019 | July 22, 2019 | July 31, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 9, 2019 | August 20, 2019 | August 30, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
July 9, 2019 | September 17, 2019 | September 30, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 8, 2019 | October 22, 2019 | October 31, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 8, 2019 | November 19, 2019 | November 29, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
October 8, 2019 | December 19, 2019 | December 31, 2019 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 14, 2020 | January 24, 2020 | January 31, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 14, 2020 | February 19, 2020 | February 28, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
January 14, 2020 | March 20, 2020 | March 31, 2020 | 0.13020833 | 0.13281250 | ||||||||||||||||||||||
$ | 1.56249996 | $ | 1.59375000 |
reported after the end of the calendar year based on tax information for the full fiscal year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of dividends for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. The tax characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 20202021 was 42.1%71.3% from ordinary income and 57.9%28.7% from capital gains. The tax characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 20192020 was 27.3%42.1% from ordinary income and 72.7%57.9% from capital gains.
Fair Value as of March 31, | ||||||||
2021 | 2020 | |||||||
Series D Term Preferred Stock(A) | $ | — | $ | 53,590 | ||||
Series E Term Preferred Stock | 96,108 | 64,554 | ||||||
|
|
|
| |||||
Total | $ | 96,108 | $ | 118,144 | ||||
|
|
|
|
|
Program during the year ended March 31, 2022. During the year ended March 31, 2021, we sold 155,560 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $11.39 per share and raised approximately $1.8 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $11.17 and resulted in total net proceeds of approximately $1.7 million. These sales were above our then current estimated NAV per share.
During the year ended March 31, 2020, we sold 227,004 shares of our common stock under the Common Stock ATM Program at a weighted-average gross price of $13.80 per share and raised approximately $3.1 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $13.55 and resulted in total net proceeds of approximately $3.1 million. These sales were above our then current estimated NAV per share.
During the year ended March 31, 2019, we sold 168,824 shares of our common stock under a previous Common Stock ATM Program at a weighted-average gross price of $11.09 per share and raised approximately $1.9 million of gross proceeds. The weighted-average net price per share, after deducting commissions and offering costs borne by us, was $10.87 and resulted in total net proceeds of approximately $1.8 million. Certain of these sales were below our then-current estimated NAV per share during the sales period, with a discount of $0.002 per share, when comparing the sales price per share, after deducting commissions, to the then-current estimated NAV per share; however, the net dilutive effect (after commissions and offering costs borne by us) of these sales was $0.00 per common share as a result of the small number of shares sold at a slight discount to NAV per share and resulting rounding. In aggregate, the sales during the year ended March 31, 2019 were above our then-current estimated NAV per share.
Year Ended March 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Numerator: net increase (decrease) in net assets resulting from operations | $ | 42,454 | $ | (7,234 | ) | $ | 81,590 | |||||
Denominator: basic and diluted weighted-average common shares | 33,176,760 | 32,865,840 | 32,807,597 | |||||||||
|
|
|
|
|
| |||||||
Basic and diluted net increase (decrease) in net assets resulting from operations per weighted-average common share | $ | 1.28 | $ | (0.22 | ) | $ | 2.49 | |||||
|
|
|
|
|
|
Year Ended March 31, | |||||||||||||||||
2022 | 2021 | 2020 | |||||||||||||||
Numerator: net increase (decrease) in net assets resulting from operations | $ | 102,316 | $ | 42,454 | $ | (7,234) | |||||||||||
Denominator: basic and diluted weighted-average common shares | 33,205,023 | 33,176,760 | 32,865,840 | ||||||||||||||
Basic and diluted net increase (decrease) in net assets resulting from operations per weighted-average common share | $ | 3.08 | $ | 1.28 | $ | (0.22) |
cash distributions paid to our common stockholders during the calendar year ended December 31, 20192020 was 67.8%93.9% from ordinary income and 32.2%6.1% from capital gains.
We paidgains.
Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Common Share | |||||||||
2021 | April 14, 2020 | April 24, 2020 | April 30, 2020 | $0.070 | |||||||||
April 14, 2020 | May 19, 2020 | May 29, 2020 | 0.070 | ||||||||||
April 14, 2020 | June 8, 2020 | June 17, 2020 | 0.090 | (A) | |||||||||
April 14, 2020 | June 19, 2020 | June 30, 2020 | 0.070 | ||||||||||
July 14, 2020 | July 24, 2020 | July 31, 2020 | 0.070 | ||||||||||
July 14, 2020 | August 24, 2020 | August 31, 2020 | 0.070 | ||||||||||
July 14, 2020 | September 23, 2020 | September 30, 2020 | 0.070 | ||||||||||
October 13, 2020 | October 23, 2020 | October 30, 2020 | 0.070 | ||||||||||
October 13, 2020 | November 20, 2020 | November 30, 2020 | 0.070 | ||||||||||
October 13, 2020 | December 23, 2020 | December 31, 2020 | 0.070 | ||||||||||
January 12, 2021 | January 22, 2021 | January 29, 2021 | 0.070 | ||||||||||
January 12, 2021 | February 17, 2021 | February 26, 2021 | 0.070 | ||||||||||
January 12, 2021 | March 18, 2021 | March 31, 2021 | 0.070 | ||||||||||
|
| ||||||||||||
Year end March 31, 2021: | $0.930 | ||||||||||||
|
|
Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||
2020 | April 9, 2019 | April 22, 2019 | April 30, 2019 | $0.068 | ||||||
April 9, 2019 | May 22, 2019 | May 31, 2019 | 0.068 | |||||||
April 9, 2019 | June 5, 2019 | June 14, 2019 | 0.090 | (A) | ||||||
April 9, 2019 | June 19, 2019 | June 28, 2019 | 0.068 | |||||||
July 9, 2019 | July 22, 2019 | July 31, 2019 | 0.068 | |||||||
July 9, 2019 | August 20, 2019 | August 30, 2019 | 0.068 | |||||||
July 9, 2019 | September 4, 2019 | September 13, 2019 | 0.030 | (A) | ||||||
July 9, 2019 | September 17, 2019 | September 30, 2019 | 0.068 | |||||||
October 8, 2019 | October 22, 2019 | October 31, 2019 | 0.068 | |||||||
October 8, 2019 | November 19, 2019 | November 29, 2019 | 0.068 | |||||||
October 8, 2019 | December 3, 2019 | December 13, 2019 | 0.090 | (A) | ||||||
October 8, 2019 | December 19, 2019 | December 31, 2019 | 0.068 | |||||||
January 14, 2020 | January 24, 2020 | January 31, 2020 | 0.070 | |||||||
January 14, 2020 | February 19, 2020 | February 28, 2020 | 0.070 | |||||||
January 14, 2020 | March 20, 2020 | March 31, 2020 | 0.070 | |||||||
|
| |||||||||
Year ended March 31, 2020: | $1.032 | |||||||||
|
|
Fiscal Year | Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||
2019 | April 10, 2018 | April 20, 2018 | April 30, 2018 | $0.067 | ||||||
April 10, 2018 | May 22, 2018 | May 31, 2018 | 0.067 | |||||||
April 10, 2018 | June 6, 2018 | June 15, 2018 | 0.060 | (A) | ||||||
April 10, 2018 | June 20, 2018 | June 29, 2018 | 0.067 | |||||||
July 10, 2018 | July 20, 2018 | July 31, 2018 | 0.067 | |||||||
July 10, 2018 | August 21, 2018 | August 31, 2018 | 0.067 | |||||||
July 10, 2018 | September 19, 2018 | September 28, 2018 | 0.067 | |||||||
October 9, 2018 | October 19, 2018 | October 31, 2018 | 0.068 | |||||||
October 9, 2018 | November 20, 2018 | November 30, 2018 | 0.068 | |||||||
October 9, 2018 | December 6, 2018 | December 14, 2018 | 0.060 | (A) | ||||||
October 9, 2018 | December 20, 2018 | December 31, 2018 | 0.068 | |||||||
January 8, 2019 | January 18, 2019 | January 31, 2019 | 0.068 | |||||||
January 8, 2019 | February 20, 2019 | February 28, 2019 | 0.068 | |||||||
January 8, 2019 | March 20, 2019 | March 29, 2019 | 0.068 | |||||||
|
| |||||||||
Year ended March 31, 2019: | $0.930 | |||||||||
|
|
| |||||||||||||||||||||||
Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||||||||||||||||
April 13, 2021 | April 23, 2021 | April 30, 2021 | $ | 0.070 | |||||||||||||||||||
April 13, 2021 | May 19, 2021 | May 28, 2021 | 0.070 | ||||||||||||||||||||
April 13, 2021 | June 8, 2021 | June 17, 2021 | 0.060 | (A) | |||||||||||||||||||
April 13, 2021 | June 18, 2021 | June 30, 2021 | 0.070 | ||||||||||||||||||||
July 13, 2021 | July 23, 2021 | July 30, 2021 | 0.070 | ||||||||||||||||||||
July 13, 2021 | August 23, 2021 | August 31, 2021 | 0.070 | ||||||||||||||||||||
July 13, 2021 | September 3, 2021 | September 15, 2021 | 0.030 | (A) | |||||||||||||||||||
July 13, 2021 | September 22, 2021 | September 30, 2021 | 0.070 | ||||||||||||||||||||
October 12, 2021 | October 22, 2021 | October 29, 2021 | 0.075 | ||||||||||||||||||||
October 12, 2021 | November 19, 2021 | November 30, 2021 | 0.075 | ||||||||||||||||||||
October 12, 2021 | December 7, 2021 | December 15, 2021 | 0.090 | (A) | |||||||||||||||||||
October 12, 2021 | December 23, 2021 | December 31, 2021 | 0.075 | ||||||||||||||||||||
January 11, 2022 | January 21, 2022 | January 31, 2022 | 0.075 | ||||||||||||||||||||
January 11, 2022 | February 4, 2022 | February 14, 2022 | 0.120 | (A) | |||||||||||||||||||
January 11, 2022 | February 18, 2022 | February 28, 2022 | 0.075 | ||||||||||||||||||||
January 11, 2022 | March 23, 2022 | March 31, 2022 | 0.075 | ||||||||||||||||||||
Year ended March 31, 2022 | $ | 1.170 |
Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||||||||||||||||
April 14, 2020 | April 24, 2020 | April 30, 2020 | $ | 0.070 | |||||||||||||||||||
April 14, 2020 | May 19, 2020 | May 29, 2020 | 0.070 | ||||||||||||||||||||
April 14, 2020 | June 8, 2020 | June 17, 2020 | 0.090 | (A) | |||||||||||||||||||
April 14, 2020 | June 19, 2020 | June 30, 2020 | 0.070 | ||||||||||||||||||||
July 14, 2020 | July 24, 2020 | July 31, 2020 | 0.070 | ||||||||||||||||||||
July 14, 2020 | August 24, 2020 | August 31, 2020 | 0.070 | ||||||||||||||||||||
July 14, 2020 | September 23, 2020 | September 30, 2020 | 0.070 | ||||||||||||||||||||
October 13, 2020 | October 23, 2020 | October 30, 2020 | 0.070 | ||||||||||||||||||||
October 13, 2020 | November 20, 2020 | November 30, 2020 | 0.070 | ||||||||||||||||||||
October 13, 2020 | December 23, 2020 | December 31, 2020 | 0.070 | ||||||||||||||||||||
January 12, 2021 | January 22, 2021 | January 29, 2021 | 0.070 | ||||||||||||||||||||
January 12, 2021 | February 17, 2021 | February 26, 2021 | 0.070 | ||||||||||||||||||||
January 12, 2021 | March 18, 2021 | March 31, 2021 | 0.070 | ||||||||||||||||||||
Year ended March 31, 2021: | $ | 0.930 |
Declaration Date | Record Date | Payment Date | Distribution per Common Share | ||||||||||||||||||||
April 9, 2019 | April 22, 2019 | April 30, 2019 | $ | 0.068 | |||||||||||||||||||
April 9, 2019 | May 22, 2019 | May 31, 2019 | 0.068 | ||||||||||||||||||||
April 9, 2019 | June 5, 2019 | June 14, 2019 | 0.090 | (A) | |||||||||||||||||||
April 9, 2019 | June 19, 2019 | June 28, 2019 | 0.068 | ||||||||||||||||||||
July 9, 2019 | July 22, 2019 | July 31, 2019 | 0.068 | ||||||||||||||||||||
July 9, 2019 | August 20, 2019 | August 30, 2019 | 0.068 | ||||||||||||||||||||
July 9, 2019 | September 4, 2019 | September 13, 2019 | 0.030 | (A) | |||||||||||||||||||
July 9, 2019 | September 17, 2019 | September 30, 2019 | 0.068 | ||||||||||||||||||||
October 8, 2019 | October 22, 2019 | October 31, 2019 | 0.068 | ||||||||||||||||||||
October 8, 2019 | November 19, 2019 | November 29, 2019 | 0.068 | ||||||||||||||||||||
October 8, 2019 | December 3, 2019 | December 13, 2019 | 0.090 | (A) | |||||||||||||||||||
October 8, 2019 | December 19, 2019 | December 31, 2019 | 0.068 | ||||||||||||||||||||
January 14, 2020 | January 24, 2020 | January 31, 2020 | 0.070 | ||||||||||||||||||||
January 14, 2020 | February 19, 2020 | February 28, 2020 | 0.070 | ||||||||||||||||||||
January 14, 2020 | March 20, 2020 | March 31, 2020 | 0.070 | ||||||||||||||||||||
Year ended March 31, 2020: | $ | 1.032 |
In addition, we obtained clarification of the treatment of deemed distributions with respect to Virginia state taxes from the Virginia Department of Revenue, which ruled that Virginia state taxes are imposed. As a result of this ruling, weWe incurred $2.3 million and $3.0 million of Virginia state taxes related to the deemed distributions for the yearsyear ended March 31, 2020, and 2019, respectively, which were included in Taxes on deemed distribution of long-term capital gains on our accompanying Consolidated Statements of Operations and in Other Liabilities on our Consolidated Statements of Assets and Liabilities as of March 31, 2020, and 2019, respectively, and which were paid subsequent to March 31, 2020.
Year Ended March 31, | ||||||||
2021 | 2020 | |||||||
Common stock | $ | 33 | $ | 33 | ||||
Capital in excess of par value | 400,796 | 401,023 | ||||||
Cumulative unrealized (depreciation) appreciation of investments | (30,497 | ) | (44,598 | ) | ||||
Undistributed ordinary income | 16,141 | 17,877 | ||||||
Undistributed capital gain | 8,513 | 5,336 | ||||||
Other temporary differences | (12,622 | ) | (10,640 | ) | ||||
|
|
|
| |||||
Net Assets | $ | 382,364 | $ | 369,031 | ||||
|
|
|
|
Year Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Common stock | $ | 33 | $ | 33 | |||||||
Capital in excess of par value | 397,948 | 400,796 | |||||||||
Cumulative unrealized (depreciation) appreciation of investments | 43,760 | (30,497) | |||||||||
Undistributed ordinary income | 13,862 | 16,141 | |||||||||
Undistributed capital gain | 15,731 | 8,513 | |||||||||
Other temporary differences | (25,504) | (12,622) | |||||||||
Net Assets | $ | 445,830 | $ | 382,364 |
Tax Year Ended March 31, | ||||||||
2021 | 2020 | |||||||
Underdistributed net investment income | $ | 5,692 | $ | 2,142 | ||||
Accumulated net realized gain in excess of distributions | (3,728 | ) | 4,334 | |||||
Capital in excess of par value | (1,964 | ) | (6,476 | ) |
Tax Year Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(Overdistributed) underdistributed net investment income | $ | (333) | $ | 5,692 | |||||||
Accumulated net realized gain (loss) in excess of distributions | $ | 3,181 | $ | (3,728) | |||||||
Capital in excess of par value | $ | (2,848) | $ | (1,964) |
2020.
Under the RIC Modernization Act, we are permitted to carryforward any capital losses that we may incur for an unlimited period, and such capital loss carryforwards will retain their character as either short-term or long-term capital losses. Our capital loss carryforward balance was $0 as of both March 31, 20212022 and 2020.
As
The following table summarizes the principal balances of unused line of credit and delayed draw term loan commitments and guaranties as of March 31, 20212022 and 2020,2021, which are not reflected as liabilities in the accompanying Consolidated Statements of Assets and Liabilities:
As of March 31, | ||||||||
2021 | 2020 | |||||||
Unused line of credit and delayed draw term loan commitments | $ | 3,000 | $ | 1,230 | ||||
Guaranty | 1,000 | 1,000 | ||||||
|
|
|
| |||||
Total | $ | 4,000 | $ | 2,230 | ||||
|
|
|
|
As of March 31, 2022 2021 Unused line of credit and delayed draw term loan commitments $ 4,250 $ 3,000 Guaranties 10,250 1,000 Total $ 14,500 $ 4,000
As of and for the Year Ended March 31, | ||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||
Per Common Share Data: | ||||||||||||||||||||
Net asset value at beginning of year (A) | $ | 11.17 | $ | 12.40 | 10.85 | 9.95 | 9.22 | |||||||||||||
Income from investment operations(B) | ||||||||||||||||||||
Net investment income | 0.54 | 1.11 | 0.23 | 0.68 | 0.74 | |||||||||||||||
Net realized gain (loss) on investments and other | 0.32 | 1.36 | 2.04 | 0.04 | 0.51 | |||||||||||||||
Taxes on deemed distributions of long-term capital gains | — | (0.31 | ) | (0.41 | ) | — | — | |||||||||||||
Net unrealized appreciation (depreciation) of investments and other | 0.42 | (2.38 | ) | 0.63 | 1.16 | 0.23 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 1.28 | (0.22 | ) | 2.49 | 1.88 | 1.48 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Effect of equity capital activity(B) | ||||||||||||||||||||
Cash distributions to common stockholders from net investment income(C) | (0.83 | ) | (0.75 | ) | (0.69 | ) | (0.84 | ) | (0.75 | ) | ||||||||||
Cash distributions to common stockholders from realized gains(C) | (0.10 | ) | (0.28 | ) | (0.24 | ) | (0.05 | ) | — | |||||||||||
Discounts, commissions, and offering costs | — | — | — | (0.03 | ) | — | ||||||||||||||
Net accretive (dilutive) effect of equity offering(D) | — | 0.01 | — | (0.04 | ) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from equity capital activity | (0.93 | ) | (1.02 | ) | (0.93 | ) | (0.96 | ) | (0.75 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Other, net(B)(E) | — | 0.01 | (0.01 | ) | (0.02 | ) | — | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Net asset value at end of year(A) | $ | 11.52 | $ | 11.17 | 12.40 | 10.85 | 9.95 | |||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Per common share market value at beginning of year | $ | 7.85 | $ | 11.60 | 10.10 | 9.07 | 7.02 | |||||||||||||
Per common share market value at end of year | 12.23 | 7.85 | 11.60 | 10.10 | 9.07 | |||||||||||||||
Total investment return(F) | 70.65 | % | (26.23 | )% | 24.95 | % | 21.82 | % | 41.58 | % | ||||||||||
Common stock outstanding at end of year(A) | 33,205,023 | 33,049,463 | 32,822,459 | 32,653,635 | 30,270,958 | |||||||||||||||
Statement of Assets and Liabilities Data: | ||||||||||||||||||||
Net assets at end of year | $ | 382,364 | $ | 369,031 | $ | 407,110 | $ | 354,200 | $ | 301,082 | ||||||||||
Average net assets(G) | 365,568 | 404,336 | 391,786 | 328,533 | 294,030 | |||||||||||||||
Senior Securities Data: | ||||||||||||||||||||
Total borrowings, at cost | $ | 155,434 | $ | 54,296 | $ | 58,096 | $ | 112,096 | $ | 74,796 | ||||||||||
Mandatorily redeemable preferred stock(H) | 94,371 | 132,250 | 132,250 | 139,150 | 139,150 | |||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||
Ratio of net expenses to average net assets(I) | 10.58 | % | 6.32 | % | 13.30 | % | 11.08 | % | 10.02 | % | ||||||||||
Ratio of net investment income to average net assets(J) | 4.91 | 8.99 | 1.92 | 6.68 | 7.63 |
|
As of and for the Year Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Per Common Share Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value at beginning of year (A) | $ | 11.52 | $ | 11.17 | $ | 12.40 | $ | 10.85 | $ | 9.95 | $ | 9.22 | $ | 9.18 | $ | 8.34 | 9.10 | 9.38 | |||||||||||||||||||||||||||||||||||||||||
Income from investment operations(B) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.45 | 0.54 | 1.11 | 0.23 | 0.68 | 0.74 | 0.68 | 0.75 | 0.73 | 0.68 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) on investments and other | 0.37 | 0.32 | 1.36 | 2.04 | 0.04 | 0.51 | (0.15) | — | 0.31 | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||
Taxes on deemed distributions of long-term capital gains | — | — | (0.31) | (0.41) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) of investments and other | 2.26 | 0.42 | (2.38) | 0.63 | 1.16 | 0.23 | 0.29 | 1.13 | (1.09) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 3.08 | 1.28 | (0.22) | 2.49 | 1.88 | 1.48 | 0.82 | 1.88 | (0.05) | 0.71 | |||||||||||||||||||||||||||||||||||||||||||||||||
Effect of equity capital activity(B) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions to common stockholders from net investment income(C) | (0.91) | (0.83) | (0.75) | (0.69) | (0.84) | (0.75) | (0.64) | (0.77) | (0.71) | (0.60) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions to common stockholders from realized gains(C) | (0.26) | (0.10) | (0.28) | (0.24) | (0.05) | — | (0.11) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Discounts, commissions, and offering costs | — | — | — | — | (0.03) | — | (0.01) | (0.03) | — | (0.08) | |||||||||||||||||||||||||||||||||||||||||||||||||
Net accretive (dilutive) effect of equity offering(D) | — | — | 0.01 | — | (0.04) | — | (0.03) | (0.22) | — | (0.31) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total from equity capital activity | (1.17) | (0.93) | (1.02) | (0.93) | (0.96) | (0.75) | (0.79) | (1.02) | (0.71) | (0.99) | |||||||||||||||||||||||||||||||||||||||||||||||||
Other, net(E) | — | — | 0.01 | (0.01) | (0.02) | — | 0.01 | (0.02) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value at end of year(A) | $ | 13.43 | $ | 11.52 | $ | 11.17 | $ | 12.40 | $ | 10.85 | 9.95 | 9.22 | 9.18 | 8.34 | 9.10 | ||||||||||||||||||||||||||||||||||||||||||||
Per common share market value at beginning of year | $ | 12.23 | $ | 7.85 | $ | 11.60 | $ | 10.10 | $ | 9.07 | 7.02 | $ | 7.40 | 8.27 | 7.31 | 7.57 | |||||||||||||||||||||||||||||||||||||||||||
Per common share market value at end of year | $ | 16.13 | $ | 12.23 | $ | 7.85 | $ | 11.60 | $ | 10.10 | $ | 9.07 | $ | 7.02 | $ | 7.40 | $ | 8.27 | $ | 7.31 | |||||||||||||||||||||||||||||||||||||||
Total investment return(F) | 42.40 | % | 70.65 | % | (26.23 | %) | 24.95 | % | 21.82 | % | 41.58 | % | 4.82 | % | 11.96 | % | 24.26 | % | 4.73 | % | |||||||||||||||||||||||||||||||||||||||
Common stock outstanding at end of year(A) | 33,205,023 | 33,205,023 | 33,049,463 | 32,822,459 | 32,653,635 | 30,270,958 | 30,270,958 | 29,775,958 | 26,475,958 | 26,475,958 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statement of Assets and Liabilities Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets at end of year | $ | 445,830 | $ | 382,364 | $ | 369,031 | $ | 407,110 | $ | 354,200 | $ | 301,082 | $ | 279,022 | $ | 273,429 | $ | 220,837 | $ | 240,963 | |||||||||||||||||||||||||||||||||||||||
Average net assets(G) | $ | 425,985 | $ | 365,568 | $ | 404,336 | $ | 391,786 | $ | 328,533 | $ | 294,030 | $ | 276,293 | $ | 229,350 | $ | 231,356 | $ | 216,751 | |||||||||||||||||||||||||||||||||||||||
Senior Securities Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total borrowings, at cost | $ | 267,584 | $ | 155,434 | $ | 54,296 | $ | 58,096 | $ | 112,096 | $ | 74,796 | $ | 100,096 | $ | 123,896 | $ | 66,250 | $ | 94,016 | |||||||||||||||||||||||||||||||||||||||
Mandatorily redeemable preferred stock(H) | $ | — | $ | 94,371 | $ | 132,250 | $ | 132,250 | $ | 139,150 | $ | 139,150 | $ | 121,650 | $ | 81,400 | $ | 40,000 | $ | 40,000 | |||||||||||||||||||||||||||||||||||||||
Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of net expenses to average net assets(I) | 13.51 | % | 10.58 | % | 6.32 | % | 13.30 | % | 11.08 | % | 10.02 | % | 10.94 | % | 9.48 | % | 7.33 | % | 6.48 | % | |||||||||||||||||||||||||||||||||||||||
Ratio of net investment income to average net assets(J) | 3.52 | % | 4.91 | % | 8.99 | % | 1.92 | % | 6.68 | % | 7.63 | % | 7.50 | % | 8.68 | % | 8.35 | % | 7.61 | % |
|
|
|
|
|
|
|
|
|
Record Date | Payment Date | Distribution per Common Share | Dividend per Share of Series E Term Preferred Stock | |||||||
April 23, 2021 | April 30, 2021 | $ | 0.07 | $ | 0.13281250 | |||||
May 19, 2021 | May 28, 2021 | 0.07 | 0.13281250 | |||||||
June 8, 2021 | June 17, 2021 | 0.06 | (A) | — | ||||||
June 18, 2021 | June 30, 2021 | 0.07 | 0.13281250 | |||||||
|
|
|
| |||||||
Total for the Quarter: | $ | 0.27 | $ | 0.39843750 | ||||||
|
|
|
|
| |||||||||||||||||
Record Date | Payment Date | Distribution per Common Share | |||||||||||||||
April 22, 2022 | April 29, 2022 | $ | 0.075 | ||||||||||||||
May 20, 2022 | May 31, 2022 | 0.075 | |||||||||||||||
June 6, 2022 | June 15, 2022 | 0.120 | (A) | ||||||||||||||
June 22, 2022 | June 30, 2022 | 0.075 | |||||||||||||||
Total for the Quarter: | $ | 0.345 |
20212022 (the end of the period covered by this report), we, including our chief executive officer and chief financial officer, evaluated the effectiveness and design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including the chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective at a reasonable assurance level in timely alerting management, including the chief executive officer and chief financial officer, of material information about us required to be included in periodic SEC filings. However, in evaluation of the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.c) Attestation Report of the Independent Registered Public Accounting Firm20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
20212022 Proxy Statement under the captions “Election of Directors” and “Information Regarding the Board of Directors and Corporate Governance.”
20212022 Proxy Statement under the captions “Executive Compensation” and “Director Compensation For Fiscal 20212022.”
20212022 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management.”
20212022 Proxy Statement under the captions “Certain Transactions” and “Information Regarding the Board of Directors and Corporate Governance.”
20212022 Proxy Statement under the caption “Independent Registered Public Accounting Firm Fees.”
Schedule 12-14 Investments in and Advances to Affiliatesa. DOCUMENTS FILED AS PART OF THIS REPORT 1. The following financial statements are filed herewith: 8385868889911052. The following financial statement schedule is filed herewith: 148
|
|
GLADSTONE INVESTMENT CORPORATION | |||||||||||||
Date: May 11, | 2022 | By: | /s/ | ||||||||||
Chief Financial Officer and Treasurer |
Date: May 11, | 2022 | By: | /s/ DAVID GLADSTONE | |||||||||
David Gladstone | ||||||||||||
Chief Executive Officer and Chairman of the Board of Directors (principal executive officer) | ||||||||||||
Date: May 11, | 2022 | By: | /s/ TERRY LEE BRUBAKER | |||||||||
Terry Lee Brubaker | ||||||||||||
Vice Chairman and Chief Operating Officer | ||||||||||||
Date: May 11, | 2022 | By: | /s/ | |||||||||
Chief Financial Officer and Treasurer (principal financial and accounting officer) | ||||||||||||
Date: May 11, | 2022 | By: | /s/ ANTHONY W. PARKER | |||||||||
Anthony W. Parker | ||||||||||||
Director | ||||||||||||
Date: May 11, | 2022 | By: | /s/ MICHELA A. ENGLISH | |||||||||
Michela A. English | ||||||||||||
Director | ||||||||||||
Date: May 11, | 2022 | By: | /s/ PAUL ADELGREN | |||||||||
Paul Adelgren | ||||||||||||
Director | ||||||||||||
Date: May 11, | 2022 | By: | /s/ JOHN H. OUTLAND | |||||||||
John H. Outland | ||||||||||||
Director | ||||||||||||
Date: May 11, | 2022 | By: | ||||||||||
/s/ WALTER H. WILKINSON, JR. | ||||||||||||
Walter H. Wilkinson, Jr. | ||||||||||||
Director |
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
AFFILIATE INVESTMENTS—80.9% | ||||||||||||||||||||||||||||||||
Secured First Lien Debt—47.6% | ||||||||||||||||||||||||||||||||
Beverage, Food, and Tobacco—2.4% | ||||||||||||||||||||||||||||||||
Head Country, Inc.—Term Debt (L+10.5%, 12.5% Cash, Due 2/2023) | $ | 9,050 | $ | — | $ | 1,147 | $ | 9,050 | $ | — | $ | — | $ | — | $ | 9,050 | ||||||||||||||||
Chemicals, Plastics, and Rubber—6.0% | ||||||||||||||||||||||||||||||||
PSI Molded Plastics, Inc.—Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(P) | 26,618 | — | 973 | — | 17,114 | — | 5,871 | 22,985 | ||||||||||||||||||||||||
Diversified/Conglomerate | ||||||||||||||||||||||||||||||||
D.P.M.S., Inc.—Line of Credit, $0 Available (L+6.5%, 9.0% Cash (0.5% Unused Fee), Due 10/2023) | 1,500 | — | 117 | 1,250 | 250 | — | — | 1,500 | ||||||||||||||||||||||||
D.P.M.S., Inc.—Term Debt (10.0% Cash, Due 10/2023)(M) | 10,796 | — | 1,095 | 10,796 | — | — | (5,045 | ) | 5,751 | |||||||||||||||||||||||
Edge Adhesives Holdings, Inc.—Line of Credit, $0 available (L+8.0%, 10.0% Cash, Due 9/2021) | 1,020 | — | 87 | 395 | 600 | — | 10 | 1,005 |
Net Unrealized
Appreciation
(Depreciation)AFFILIATE INVESTMENTS – 60.8% Secured First Lien Debt – 42.9% Beverage, Food, and Tobacco – 0.0% $ — $ — $ 2,318 $ 9,050 $ — $ (9,050) $ — $ — Chemicals, Plastics, and Rubber – 6.0% PSI Molded Plastics, Inc. – Term Debt (L+5.5%, 7.0% Cash, Due 01/2024) 26,618 — 1,994 22,985 — — 3,633 26,618 Diversified/Conglomerate Manufacturing –2.0% — — 480 1,500 — (1,500) — — — — 60 5,751 — (10,796) 5,045 — — — 17 1,005 — (1,020) 15 — Edge Adhesives Holdings, Inc. – Term Debt (L+5.5%, 7.5% Cash, Due 08/2024) 9,210 — 989 9,161 900 (989) — 9,072 — — 70 2,955 — (3,000) 45 — — 1,616 20,372 900 (17,305) 5,105 9,072 Diversified/Conglomerate Services – 20.5% ImageWorks Display and Marketing Group, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 11/2022) 22,000 — 4,846 22,000 — — — 22,000 16,500 — 241 — 16,475 — (1,452) 15,023 26,000 (10,000) 1,069 — 35,910 (10,000) (2,238) 23,672 2,438 — — — 2,438 — (219) 2,219 The Maids International, LLC – Term Debt (L+10.5%, 12.0% Cash, Due 03/2025) 28,560 — 3,475 28,560 — — — 28,560 (10,000) 9,631 50,560 54,823 (10,000) (3,909) 91,474 Home and Office Furnishings, Housewares, and Durable Consumer Products – 5.6% Old World Christmas, Inc. – Term Debt (L+9.5%, 11.0% Cash, Due 12/2025) 25,000 $ — $ 3,283 $ 27,000 $ — $ (2,000) $ — $ 25,000
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
Edge Adhesives Holdings, Inc.—Term Debt (L+10.5%, 12.5% Cash, Due 2/2022) | $ | 9,300 | $ | — | $ | 1,179 | $ | 8,742 | $ | — | $ | — | $ | 419 | $ | 9,161 | ||||||||||||||||
Edge Adhesives Holdings, Inc.—Term Debt (L+11.8%, 13.8% Cash, Due 2/2022) | 3,000 | — | 418 | 2,820 | — | — | 135 | 2,955 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | 2,896 | 24,003 | 850 | — | (4,481 | ) | 20,372 | |||||||||||||||||||||||||
Diversified/Conglomerate Services—13.3% | ||||||||||||||||||||||||||||||||
ImageWorks Display and Marketing Group, Inc. —Term Debt (L+11.0%, 13.0% Cash, Due 11/2022) | 22,000 | — | 2,900 | 22,000 | — | — | — | 22,000 | ||||||||||||||||||||||||
The Maids International, LLC—Line of Credit(N) | — | — | 24 | 1,000 | — | (1,000 | ) | — | — | |||||||||||||||||||||||
The Maids International, LLC—Term Debt (L+10.5%, 12.0% Cash, Due 3/2025) | 28,560 | — | 3,088 | 28,560 | — | — | — | 28,560 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | 6,012 | 51,560 | — | (1,000 | ) | — | 50,560 |
Net Unrealized
Appreciation
(Depreciation)Leisure, Amusement, Motion Pictures, and Entertainment – 0.0% — — — 538 — (538) — — — — 4,288 8,399 — (8,399) — — — 4,288 8,937 — (8,937) — — Mining, Steel, Iron and Non-Precious Metals Total – 4.1% — — — — — — — — 18,250 — 1,428 — 18,250 — — 18,250 — 1,428 — 18,250 — — 18,250 Personal and Non-Durable Consumer Products (Manufacturing Only) – 1.0% 3,400 — — 3,400 — — — 3,400 800 — — — 800 — — 800 — — 2,739 23,215 — (23,100) (115) — — 2,739 26,615 800 (23,100) (115) 4,200 Telecommunications – 3.7% B+T Group Acquisition, Inc. – Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2024) 2,800 — 830 2,597 — — 203 2,800 B+T Group Acquisition, Inc. – Term Debt (L+11.0%, 13.0% Cash, Due 12/2024) 14,000 — 4,151 12,985 — — 1,015 14,000 — 4,981 15,582 — — 1,218 16,800 Total Secured First Lien Debt $ (10,000) $ 32,278 $ 181,101 $ 74,773 $ (70,392) $ 5,932 $ 191,414 Secured Second Lien Debt – 0.2% Diversified/Conglomerate Services – 0.0% $ — $ — $ — $ 9,975 $ 6,500 $ (16,475) $ — $ — — — — 35,910 — (35,910) — — — — 45,885 6,500 (52,385) — —
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—7.1% | ||||||||||||||||||||||||||||||||
Old World Christmas, Inc. —Term Debt (L+9.5%, 11/0% Cash, Due 12/2025)(O) | $ | 27,000 | $ | — | $ | 866 | $ | — | $ | 27,000 | $ | — | $ | — | $ | 27,000 | ||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment —2.3% | ||||||||||||||||||||||||||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (Due 12/2023)(L) | 538 | — | — | 538 | — | — | — | 538 | ||||||||||||||||||||||||
SOG Specialty Knives & Tools, LLC—Term Debt (L+4.0%, 6.0% Cash, Due 12/2023) | 8,399 | — | 169 | 8,399 | — | — | — | 8,399 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
— | 169 | 8,937 | — | — | — | 8,937 | ||||||||||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) —7.0% | ||||||||||||||||||||||||||||||||
The Mountain Corporation —Line of Credit, $0 available (L+5.0%, 9.0% Cash, Due 4/2021)(K) | 3,400 | — | — | 3,400 | — | — | — | 3,400 | ||||||||||||||||||||||||
Pioneer Square Brands, Inc. —Term Debt (L+12.0%, 13.0% Cash, Due 8/2022) | 23,100 | — | 4,562 | 23,100 | — | — | 115 | 23,215 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
— | 4,562 | 26,500 | — | — | 115 | 26,615 | ||||||||||||||||||||||||||
Telecommunications—4.1% | ||||||||||||||||||||||||||||||||
B+T Group Acquisition, Inc.—Line of Credit, $0 available (L+11.0%, 13.0% Cash, Due 12/2021)(K) | 2,800 | — | — | 2,632 | — | — | (35 | ) | 2,597 |
Net Unrealized
Appreciation
(Depreciation)Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.2% 11,700 — — 1,849 — — (926) 923 1,500 — — 237 — — (119) 118 — — 2,086 — — (1,045) 1,041 Total Secured Second Lien Debt $ — $ — $ 47,971 $ 6,500 $ (52,385) $ (1,045) $ 1,041 Preferred Equity – 17.4% Beverage, Food, and Tobacco – 0.0% $ — $ 3,627 $ — $ 6,469 — $ (4,000) $ (2,469) $ — Chemicals, Plastics, and Rubber – 0.0% PSI Molded Plastics, Inc. – Preferred Stock 158,598 — — — — — — — Diversified/Conglomerate Manufacturing – 0.0% — $ (1,841) $ — $ — $ — $ (1,841) $ 1,841 $ — Edge Adhesives Holdings, Inc. – Preferred Stock 8,199 — — — — — — — (1,841) — — — (1,841) 1,841 — Diversified/Conglomerate Services – 4.3% ImageWorks Display and Marketing Group, Inc. – Preferred Stock 67,490 — — 9,819 — — 6,586 16,405 J.R. Hobbs Co. – Atlanta, LLC – Preferred Stock 10,920 — — — — — — — The Maids International, LLC - Preferred Stock 6,640 — — 3,560 — — (881) 2,679 — — 13,379 — — 5,705 19,084 Home and Office Furnishings, Housewares, and Durable Consumer Products – 8.5% Old World Christmas, Inc. – Preferred Stock 6,180 — 1,000 20,248 — — 17,594 37,842 Leisure, Amusement, Motion Pictures, and Entertainment – 0.0% — — — 6,754 — (14,951) 8,197 — Mining, Steel, Iron and Non-Precious Metals –1.3% 6,000 — — — 6,000 — — 6,000
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
B+T Group Acquisition, Inc.—Term Debt (L+11.0%, 13.0% Cash, Due 12/2021)(K) | $ | 14,000 | $ | — | $ | — | $ | 13,160 | $ | — | $ | — | $ | (175 | ) | $ | 12,985 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | — | 15,792 | — | — | (210 | ) | 15,582 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Secured First Lien Debt | $ | — | $ | 16,625 | $ | 135,842 | $ | 44,964 | $ | (1,000 | ) | $ | 1,295 | $ | 181,101 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Secured Second Lien Debt—12.6% | ||||||||||||||||||||||||||||||||
Chemicals, Plastics, and Rubber—0.0% | ||||||||||||||||||||||||||||||||
PSI Molded Plastics, Inc. —Term Debt (L+5.5%, 7.0% Cash, Due 1/2024)(P) | — | $ | — | $ | — | $ | 16,737 | $ | — | $ | (17,114 | ) | $ | 377 | $ | — |
Net Unrealized
Appreciation
(Depreciation)Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% The Mountain Corporation – Preferred Stock 6,899 — — — — — — — — 21,939 1,589 32,055 — (5,500) (26,555) — 21,939 1,589 32,055 — (5,500) (26,555) — Telecommunications – 3.3% B+T Group Acquisition, Inc. – Preferred Stock 14,304 $ — $ — $ — $ — $ — $ 14,746 $ 14,746 Total Preferred Equity $ 23,725 $ 2,589 $ 78,905 $ 6,000 $ (26,292) $ 19,059 $ 77,672 Common Equity/Equivalents – 0.3% Diversified/Conglomerate Manufacturing – 0.1% — $ — $ — $ — $ — $ — $ — $ — — — — — — — — — — — — — — — — Diversified/Conglomerate Services - 0.0% Nth Degree Investment Group, LLC – Common Stock 14,360,000 — — — — — 511 511 Personal and Non-Durable Consumer Products (Manufacturing Only) – 0.0% The Mountain Corporation – Common Stock 751 — — — — — — — Telecommunications - 0.2% B+T Group Acquisition, Inc. - Common Stock Warrants 3.5 % — — — — — 921 921 Total Common Equity/Equivalents $ — $ — $ — $ — $ — $ 1,432 $ 1,432 TOTAL AFFILIATE INVESTMENTS $ 13,725 $ 34,867 $ 307,977 $ 87,273 $ (149,069) $ 25,378 $ 271,559 CONTROL INVESTMENTS – 0.2% Secured Second Lien Debt – 0.0% Aerospace and Defense – 0.0% $ — $ — $ 144 $ 5,000 $ — $ (5,000) $ — $ — — — 356 8,000 — (8,000) — — $ — $ 500 $ 13,000 $ — $ (13,000) $ — $ —
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
Diversified/Conglomerate Services —12.0% | ||||||||||||||||||||||||||||||||
J.R. Hobbs Co.—Atlanta, LLC —Line of Credit, $0 available (L+6.0%, 8.0% Cash, Due 10/2024) | $ | 10,000 | $ | — | $ | 811 | $ | 10,000 | $ | — | $ | — | $ | (25 | ) | $ | 9,975 | |||||||||||||||
J.R. Hobbs Co.—Atlanta, LLC —Term Debt (L+10.3%, 11.8% Cash, Due 10/2024) | 36,000 | — | 4,289 | 36,000 | — | — | (90 | ) | 35,910 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | 5,100 | 46,000 | — | — | (115 | ) | 45,885 | |||||||||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only) —0.6% | ||||||||||||||||||||||||||||||||
The Mountain Corporation —Term Debt (L+4.0%, 7.0% Cash, Due 4/2024)(K) | 11,700 | — | — | 2,572 | — | — | (723 | ) | 1,849 | |||||||||||||||||||||||
The Mountain Corporation —Delayed Draw Term Debt, $0 available (L+4.0%, 7.0% Cash, Due 4/2024)(K)(O) | 1,500 | — | — | — | 1,500 | — | (1,263 | ) | 237 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | — | 2,572 | 1,500 | — | (1,986 | ) | 2,086 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Secured Second Lien Debt | $ | — | $ | 5,100 | $ | 65,309 | $ | 1,500 | $ | (17,114 | ) | $ | (1,724 | ) | $ | 47,971 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Preferred Equity—20.7% | ||||||||||||||||||||||||||||||||
Beverage, Food, and Tobacco —1.7% | ||||||||||||||||||||||||||||||||
Head Country, Inc.—Preferred Stock | 4,000 | $ | — | $ | — | $ | 3,495 | — | $ | — | $ | 2,974 | $ | 6,469 | ||||||||||||||||||
Chemicals, Plastics, and Rubber —0.0% | ||||||||||||||||||||||||||||||||
PSI Molded Plastics, Inc. —Preferred Stock | 158,598 | — | — | — | 8,000 | — | (8,000 | ) | — |
Net Unrealized
Appreciation
(Depreciation)Preferred Equity – 0.0% Aerospace and Defense – 0.0% — $ — $ — $ 14,630 $ — $ (11,464) $ (3,166) $ — Common Equity –0.2% Aerospace and Defense – 0.0% — — — — — (48) 48 — Leisure, Amusement, Motion Pictures, and Entertainment – 0.2% 100 — — — 620 — 93 713 Total Common Equity/Equivalents $ — $ — — $ — — $ 620 — $ (48) — $ 141 — $ 713 TOTAL CONTROL INVESTMENTS $ — $ 500 $ 27,630 $ 620 $ (24,512) $ (3,025) $ 713 TOTAL AFFILIATE AND CONTROL INVESTMENTS $ 13,725 $ 35,367 $ 335,607 $ 87,893 $ (173,581) $ 22,353 $ 272,272
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
Diversified/Conglomerate | ||||||||||||||||||||||||||||||||
Channel Technologies Group, LLC —Preferred Stock | 2,279 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
Edge Adhesives Holdings, Inc. —Preferred Stock | 8,199 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||||||||
Diversified/Conglomerate Services —3.5% | ||||||||||||||||||||||||||||||||
ImageWorks Display and Marketing | ||||||||||||||||||||||||||||||||
Group, Inc.—Preferred Stock | 67,490 | — | — | 8,265 | — | — | 1,554 | 9,819 | ||||||||||||||||||||||||
J.R. Hobbs Co.—Atlanta, LLC – Preferred Stock | 10,920 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
The Maids International, LLC— Preferred Stock | 6,640 | — | — | 5,339 | — | — | (1,779 | ) | 3,560 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | — | 13,604 | — | — | (225 | ) | 13,379 | |||||||||||||||||||||||||
Home and Office Furnishings, Housewares, and Durable Consumer Products—5.3% | ||||||||||||||||||||||||||||||||
Old World Christmas, Inc.—Preferred Stock | 6,180 | 3,544 | 2,992 | 19,588 | 1,270 | (7,450 | ) | 6,840 | 20,248 | |||||||||||||||||||||||
Leisure, Amusement, Motion Pictures, and Entertainment —1.8% | ||||||||||||||||||||||||||||||||
SOG Specialty Knives & Tools, LLC —Preferred Stock | 14,949 | — | — | 390 | — | — | 6,364 | 6,754 | ||||||||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—8.4% | ||||||||||||||||||||||||||||||||
The Mountain Corporation—Preferred Stock | 6,899 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Pioneer Square Brands, Inc.—Preferred Stock | 5,502 | — | 3,173 | 5,760 | — | — | 26,295 | 32,055 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | 3,173 | 5,760 | — | — | 26,295 | 32,055 |
GLADSTONE INVESTMENT CORPORATION
INVESTMENTS IN AND ADVANCES TO AFFILIATES (Continued)
(AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
Telecommunications—0.0% | ||||||||||||||||||||||||||||||||
B+T Group Acquisition, Inc.—Preferred Stock | 14,304 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Preferred Equity | $ | 3,544 | $ | 6,165 | $ | 42,837 | $ | 9,270 | $ | (7,450 | ) | $ | 34,248 | $ | 78,905 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Common Equity/Equivalents—0.0% | ||||||||||||||||||||||||||||||||
Diversified/Conglomerate | ||||||||||||||||||||||||||||||||
Channel Technologies Group, LLC—Common Stock | 2,319,184 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
D.P.M.S., Inc.—Common Stock | 627 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
— | — | — | — | — | — | — | ||||||||||||||||||||||||||
Diversified/Conglomerate Services—0.0% | ||||||||||||||||||||||||||||||||
Nth Degree Investment Group, LLC—Common Stock | 14,360,000 | 113 | — | 3,649 | — | — | (3,649 | ) | — | |||||||||||||||||||||||
Personal and Non-Durable Consumer Products (Manufacturing Only)—0.0% | ||||||||||||||||||||||||||||||||
The Mountain Corporation—Common Stock | 751 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Telecommunications—0.0% | ||||||||||||||||||||||||||||||||
B+T Group Acquisition, Inc.—Common Stock Warrants | 3.5 | % | — | — | — | — | — | — | — | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
Total Common Equity/Equivalents | $ | 113 | $ | — | $ | 3,649 | $ | — | $ | — | $ | (3,649 | ) | $ | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
TOTAL AFFILIATE INVESTMENTS | $ | 3,657 | $ | 27,890 | $ | 247,637 | $ | 55,734 | $ | (25,564 | ) | $ | 30,170 | $ | 307,977 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLADSTONE INVESTMENT CORPORATION
INVESTMENTS IN AND ADVANCES TO AFFILIATES (Continued)
(AMOUNTS IN THOUSANDS)
Company and Investment(A)(B)(C)(D)(E) | Principal/ Shares/Units(F)(G) | Net Realized Gain (Loss) for Period(Q) | Amount of Investment Income(H) | Value as of March 31, 2020 | Gross Additions(I) | Gross Reductions(J) | Net Unrealized Appreciation (Depreciation) | Value as of March 31, 2021 | ||||||||||||||||||||||||
CONTROL INVESTMENTS—7.2%: | ||||||||||||||||||||||||||||||||
Secured Second Lien Debt—3.4% | ||||||||||||||||||||||||||||||||
Aerospace and Defense—3.4% | ||||||||||||||||||||||||||||||||
Galaxy Tool Holding Corporation—Line of Credit, $0 available (L+4.5%, 6.5% Cash (0.5% Unused Fee), Due 8/2023) | $ | 5,000 | $ | — | $ | 330 | $ | 5,000 | $ | — | $ | — | $ | — | $ | 5,000 | ||||||||||||||||
Galaxy Tool Holding Corporation—Term Debt (L+6.0%, 10.0% Cash, Due 8/2023) | 8,000 | — | 590 | 5,000 | 3,000 | — | — | 8,000 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
$ | — | $ | 920 | $ | 10,000 | $ | 3,000 | $ | — | $ | — | $ | 13,000 | |||||||||||||||||||
Preferred Equity—3.8% | ||||||||||||||||||||||||||||||||
Aerospace and Defense—3.8% | ||||||||||||||||||||||||||||||||
Galaxy Tool Holding Corporation—Preferred Stock | 5,517,444 | $ | — | $ | — | $ | 16,158 | $ | — | $ | — | $ | (1,528 | ) | $ | 14,630 | ||||||||||||||||
Common Equity—0.0% | ||||||||||||||||||||||||||||||||
Aerospace and Defense—0.0% | ||||||||||||||||||||||||||||||||
Galaxy Tool Holding Corporation—Common Stock | 88,843 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
TOTAL CONTROL INVESTMENTS | $ | — | $ | 920 | $ | 26,158 | $ | 3,000 | $ | — | $ | (1,528 | ) | $ | 27,630 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||
TOTAL AFFILIATE AND CONTROL INVESTMENTS | $ | 3,657 | $ | 28,810 | $ | 273,795 | $ | 58,734 | $ | (25,564 | ) | $ | 28,642 | $ | 335,607 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GLADSTONE INVESTMENT CORPORATION
INVESTMENTS IN AND ADVANCES TO AFFILIATES (Continued)
(AMOUNTS IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156