FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

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

For the quarterly period ended ~~July 31, 2019~~April 30, 2020

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

Commission File Number 814-00201

MVC ~~CAPITAL, INC.~~Capital, Inc.

(Exact name of the registrant as specified in its charter)

DELAWARE	94-3346760
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)		~~94-3346760~~ ~~(I.R.S. Employer~~ Identification No.)

287 Bowman Avenue
2nd Floor	10577
Purchase, New York	(Zip Code)
(Address of principal
executive offices)		~~10577~~ ~~(Zip Code)~~

Registrant’s telephone number, including area code: (914) 701-0310

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

Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MVC	~~MVC~~	New York Stock Exchange
Senior Notes	MVCD	~~MVCD~~	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No£¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YesxNo£¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer£¨ Accelerated filerxNon-accelerated filer£¨ Smaller reporting company£¨Emerging Growth Company£¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes£¨Nox

There were 17,725,118 shares of the registrant’s common stock, $.01 par value, outstanding as of ~~September 6, 2019.~~June 9, 2020.

~~Table of Contents~~

MVC Capital, Inc.

(A Delaware Corporation)

Index

		~~Page~~
Part I. Consolidated Financial Information				Page

	Item 1.	Consolidated Financial Statements
		Consolidated Balance Sheets
		- ~~July 31, 2019~~April 30, 2020 (Unaudited) and October 31, ~~2018~~2019		3 4
		Consolidated Statements of Operations
		- For the ~~Nine~~Six Month Period ~~November 1, 2018 to July 31, 2019~~Ended April 30, 2020 (Unaudited) and
		- For the ~~Nine~~Six Month Period ~~November 1, 2017 to July 31, 2018~~Ended April 30, 2019 (Unaudited)		4 5
		Consolidated Statements of Operations
		- For the Quarter ~~May~~February 1, ~~2019~~2020 to ~~July 31, 2019~~April 30, 2020 (Unaudited) and
		- For the Quarter ~~May~~February 1, ~~2018~~2019 to ~~July 31, 2018~~April 30, 2019 (Unaudited)		5 6
		Consolidated Statements of Cash Flows
		- For the ~~Nine~~Six Month Period ~~November 1, 2018 to July 31, 2019~~Ended April 30, 2020 (Unaudited) and
		- For the ~~Nine~~Six Month Period ~~November 1, 2017 to July 31, 2018~~Ended April 30, 2019 (Unaudited)		6 7
		Consolidated Statements of Changes in Net Assets
		- For the ~~Nine~~Six Month Period ~~November 1, 2018 to July 31, 2019~~Ended April 30, 2020 (Unaudited)
		- For the ~~Nine~~Six Month Period ~~November 1, 2017 to July 31, 2018~~Ended April 30, 2019 (Unaudited) and		7
	- For the Year ended October 31, 2019	8
	Consolidated Selected Per Share Data and Ratios
		- For the ~~Nine~~Six Month Period ~~November 1, 2018 to July 31, 2019~~Ended April 30, 2020 (Unaudited)
		- For the ~~Nine~~Six Month Period ~~November 1, 2017 to July 31, 2018~~Ended April 30, 2019 (Unaudited) and
		- For the Year ended October 31, ~~2018~~2019		8 9
		Consolidated Schedules of Investments
		- ~~July 31, 2019~~April 30, 2020 (Unaudited)		9
		- October 31, ~~2018~~2019		10
		Notes to Consolidated Financial Statements		13 15
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		43 44
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk		72
	Item 4.	Controls and Procedures		87 89

Part II. Other Information		87 89

	Item 1.	Legal Proceedings		87 89
	Item 1A.	Risk Factors	87 89
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		87 89
	Item 3.	Defaults Upon Senior Securities		87 89
	Item 4.	Mine Safety Disclosures		87 89
	Item 5.	Other Information		88 89
	Item 6. Exhibits	~~Exhibits~~90	88

Exhibits		88 90

SIGNATURE		89
				91

~~Table of Contents~~Item 1. Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

~~CONSOLIDATED FINANCIAL STATEMENTS~~

MVC Capital, Inc.

Consolidated Balance Sheets

		July 31,			October 31,				April 30,			October 31,
		2019			2018				2020			2019
		(Unaudited)							(Unaudited)
ASSETS	ASSETS							ASSETS
Assets
Cash		$	1,651,952		$	9,803,800			$	173,615		$	1,321,648
Restricted cash (cost $0 and $5,300,629)		—			5,300,629
Restricted cash equivalents (cost $5,010,243 and $0)		5,010,243			—
Cash equivalents (cost $15,190,805 and $783,271)		15,190,805			783,271
Restricted cash (cost $1,500,090 and $0)										1,500,090			-
Restricted cash equivalents (cost $3,544,094 and $5,009,091)										3,544,094			5,009,091
Cash equivalents (cost $45,400,266 and $5,368,190)										45,400,266			5,368,190
Investments at fair value
Non-control/Non-affiliated investments (cost $245,157,322 and $203,068,014)		229,888,718			188,919,833
Affiliate investments (cost $93,784,009 and $116,062,640)		56,352,756			70,489,501
Control investments (cost $87,399,253 and $90,501,322)		53,163,314			65,097,978
Total investments at fair value (cost $426,340,584 and $409,631,976)		339,404,788			324,507,312
Non-control/Non-affiliated investments (cost $176,083,157 and $246,228,806)										146,401,278			229,322,498
Affiliate investments (cost $90,210,748 and $81,465,911)										44,823,575			61,851,896
Control investments (cost $79,378,267 and $87,972,462)										35,099,783			49,070,701
Total investments at fair value (cost $345,672,172 and $415,667,180)										226,324,636			340,245,095
Escrow receivables, net of reserves		1,085,000			969,000					-			1,135,000
Dividends and interest receivables, net of reserves		3,543,559			2,913,910					4,120,644			4,273,018
Deferred financing fees		700,892			87,850					457,855			614,586
Fee and other receivables, net of reserves		2,365,725			2,382,463
Fee and other receivables										2,387,895			4,013,714
Prepaid expenses		280,171			330,071					601,675			182,298
Prepaid taxes										519			-
		��
Total assets		$	369,233,135		$	347,078,306			$	284,511,289		$	362,162,640

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY								LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
Senior notes II		$	112,517,280		$	111,958,650			$	93,421,329		$	112,703,490
Revolving credit facility IV		22,100,000			—					-			15,100,000
Incentive compensation payable		2,502,961			2,502,961					1,527,849			1,527,849
Professional fees payable		77,387			166,522					218,054			241,518
Management fee payable		1,026,831			934,813					689,472			1,038,431
Accrued expenses and liabilities		180,423			220,447					238,794			770,205
Interest payable		668,923			656,847					263,889			670,163
Management fee payable - Asset Management		326,261			107,079					69,352			395,435
Consulting fees payable		311,558			154,443					357,949			360,452
Portfolio fees payable - Asset Management		748,281			664,462					826,228			668,849
Guarantees/Letters of Credit		848,606			2,866,516					882,181			726,649
Payable for shares repurchased		—			62,898
Transaction fees payable		7,840			57,166
Taxes payable		1,887			2,056					-			915
Provision for incentive compensation (Note 11)										-			-

Total liabilities		141,318,238			120,354,860					98,495,097			134,203,956

Commitments and Contingencies (Note 9)

Shareholders’ equity
Common stock, $0.01 par value; 150,000,000 shares authorized; 28,304,448 shares issued and 17,725,118 and 18,192,804 shares outstanding as of July 31, 2019 and October 31, 2018, respectively		283,044			283,044
Shareholders' equity
Common stock, $0.01 par value; 150,000,000 shares authorized; 28,304,448 shares issued and 17,725,118 and 17,725,118 shares outstanding as of April 30, 2020 and October 31, 2019, respectively										283,044			283,044
Additional paid-in-capital		408,583,787			408,583,787					406,258,172			406,258,172
Accumulated earnings		144,065,692			135,596,655
Dividends paid to stockholders		(176,614,317		)	(168,616,544		)
Accumulated net realized gain		43,361,980			38,778,647
Net unrealized depreciation		(85,252,420		)	(85,459,198		)
Treasury stock, at cost, 10,579,330 and 10,111,644 shares held, respectively		(106,512,869		)	(102,442,945		)
Accumulated overdistributed earnings										(114,012,155	)		(72,069,663	)
Treasury stock, at cost, 10,579,330 and 10,579,330 shares held, respectively										(106,512,869	)		(106,512,869	)

Total shareholders’ equity		227,914,897			226,723,446
Total shareholders' equity										186,016,192			227,958,684

Total liabilities and shareholders’ equity		$	369,233,135		$	347,078,306
Total liabilities and shareholders' equity									$	284,511,289		$	362,162,640

Net asset value per share		$	12.86		$	12.46			$	10.49		$	12.86

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

MVC Capital, Inc.

Consolidated Statements of Operations

(Unaudited)

	For the Nine Month Period			For the Nine Month Period			For the Six Month Period			For the Six Month Period
	November 1, 2018 to			November 1, 2017 to			November 1, 2019 to			November 1, 2018 to
	July 31, 2019			July 31, 2018			April 30, 2020			April 30, 2019
Operating Income:
Dividend income
Non-control/Non-affiliated investments	$	395,543		$	—		$	-		$	395,543
Affiliate investments (net of foreign taxes withheld of $154,269 and $179,701, respectively) *	698,107			1,420,053
Affiliate investments (net of foreign taxes withheld of $0 and $154,269, respectively)								-			698,107
Control investments	542,693			—				-			542,693

Total dividend income	1,636,343			1,420,053				-			1,636,343

Payment-in-kind dividend income
Non-control/Non-affiliated investments	1,196,260			—				-			1,196,260

Total payment-in-kind dividend income	1,196,260			—				-			1,196,260

Interest income
Non-control/Non-affiliated investments	14,347,352			11,329,603				11,577,586			8,423,302
Affiliate investments	—			38,139				-			-
Control investments	325,284			267,626				260,830			215,666

Total interest income	14,672,636			11,635,368				11,838,416			8,638,968

Payment-in-kind/Deferred interest income
Non-control/Non-affiliated investments	3,307,666			2,215,125				2,573,403			2,407,956
Affiliate investments	581,846			285,110				260,157			441,225
Control investments	379,338			121,281				262,029			246,690

Total payment-in-kind/Deferred interest income	4,268,850			2,621,516				3,095,589			3,095,871

Fee income
Non-control/Non-affiliated investments	89,299			247,864				26,198			51,198

Total fee income	89,299			247,864				26,198			51,198

Fee income - Asset Management 1
Portfolio fees	347,914			542,820				319,495			228,666
Management fees	292,243			271,178				154,234			187,299

Total fee income - Asset Management	640,157			813,998				473,729			415,965

Other income								4,580			-

Total operating income	22,503,545			16,738,799				15,438,512			15,034,605

Operating Expenses:
Interest and other borrowing costs 2	7,277,321			8,501,352				4,331,060			4,766,644
Management fee	4,746,192			4,394,066				2,473,582			3,103,262
Audit & tax preparation fees	979,980			594,000				598,500			828,680
Consulting fees	821,389			708,000				483,010			486,870
Other expenses *	448,596			540,103
Loss on extinguishment of debt⁶								345,419			-
Legal fees	401,400			473,155				323,800			278,400
Directors’ fees	282,448			248,100
Portfolio fees - Asset Management 1	260,936			407,115				239,621			171,500
Other expenses								210,214			307,833
Directors' fees								190,500			188,448
Insurance								150,290			136,818
Management fee - Asset Management 1	219,182			203,383				115,676			140,474
Insurance	206,334			201,656
Public relations fees								82,537			79,094
Administration	123,411			129,945				82,049			81,822
Public relations fees	105,094			98,365
Printing and postage	53,100			47,785				22,400			36,300
Loss on extinguishment of debt	—			1,782,705
Net Incentive compensation (Note 11)	—			(2,060,992		)

Total operating expenses	15,925,383			16,268,738				9,648,658			10,606,145

Less: Voluntary expense waiver by Adviser 3	(112,500		)	(112,500		)		(75,000	)		(75,000	)
Less: Voluntary management fee waiver by Adviser 4	(1,779,822		)	(1,471,399		)		(927,593	)		(1,163,723	)

Total waivers	(1,892,322		)	(1,583,899		)		(1,002,593	)		(1,238,723	)

Net operating income before taxes	8,470,484			2,053,960				6,792,447			5,667,183

Tax Expenses:
Current tax expense	1,447			1,442				970			962

Total tax expense	1,447			1,442				970			962

Net operating income	8,469,037			2,052,518				6,791,477			5,666,221

Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized and Unrealized Gain (Loss) on
Investments:

Net realized gain (loss) on investments
U.S. Treasury obligations	104,858			(95,355		)		(85,886	)		20,483
Non-control/Non-affiliated investments	3,226,317			(3,158,367		)		(530,611	)		3,223,407
Affiliate investments	(3,727,289		)	3,455,430				(43,164	)		68,420
Control investments	4,965,552			—				2,033,217			5,184,544
Foreign currency	13,895			(618		)		-			2,162

Total net realized gain on investments	4,583,333			201,090				1,373,556			8,499,016

Net unrealized appreciation (depreciation) on investments	206,778			(10,567,061		)
Net unrealized depreciation on investments								(44,080,983	)		(1,254,005	)


Net realized and unrealized gain (loss) on investments	4,790,111			(10,365,971		)		(42,707,427	)		7,245,011

Net increase (decrease) in net assets resulting from operations	$	13,259,148		$	(8,313,453	)
Net increase (decrease) in net assets resulting
from operations							$	(35,915,950	)	$	12,911,232

Net increase (decrease) in net assets per share resulting from operations	$	0.75		$	(0.45	)
Net increase (decrease) in net assets per share
resulting from operations							$	(2.03	)	$	0.73

Dividends declared per share 5	$	0.450		$	0.450		$	0.340		$	0.300

Weighted average number of shares outstanding	17,810,123			19,282,604				17,725,118			17,853,330

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

¹These items are related to the management of the MVC Private Equity Fund, L.P. (“("PE ~~Fund”~~Fund"). Please see Note 10 ~~“Management”~~"Management" for more information.

²Interest and other borrowing costs includes ~~$262,705~~$0 and ~~$784,969~~$176,420 of interest associated with installment sale treatment on the USG&E note. Please see Note 12 ~~“Tax Matters”~~"Tax Matters" for more information.

³Reflects the ~~nine~~six month period portion of the TTG ~~Advisers’~~Advisers' voluntary waiver of $150,000 of expenses for the ~~2019~~2020 and ~~2018~~2019 fiscal years, that the Company would otherwise be obligated to reimburse TTG Advisers under the Advisory Agreement (the ~~“Voluntary Waiver”~~"Voluntary Waiver"). Please see Note 10 ~~“Management”~~"Management" for more information.

⁴Reflects the ~~nine~~six month period portion of the TTG ~~Advisers’~~Advisers' voluntary waiver of the management fee for the ~~2019~~2020 and ~~2018.~~2019 Please see Note 10 ~~“Management”~~"Management" for more information.

⁵Please see Note 13 ~~“Dividends~~"Dividends and Distributions to Shareholders, Share Repurchase Program and Tender ~~Offer”~~Offer" for more information.

* ~~Amounts from prior year have been reclassified~~⁶ Reflects $345,419 in unamortized deferred financing fees related to ~~conform to current year presentation.~~

~~The accompanying notes are an integral part~~the Senior Notes II which were expensed at the time $20.0 million of ~~these consolidated financial statements.~~the Senior Notes II were redeemed.

~~MVC Capital, Inc.~~

~~Consolidated Statements of Operations~~

~~(Unaudited)~~

For the Quarter

For the Quarter

May 1, 2019 to

May 1, 2018 to

July 31, 2019

July 31, 2018

Operating Income:

Dividend income

Affiliate investments (net of foreign taxes withheld of $0 and $59,405, respectively) *

$
—

$
467,100

Total dividend income

—

467,100

Payment-in-kind dividend income

Non-control/Non-affiliated investments

—

—

Total payment-in-kind dividend income

—

—

Interest income

Non-control/Non-affiliated investments

5,924,050

4,160,019

Affiliate investments

—

14,439

Control investments

109,618

105,135

Total interest income

6,033,668

4,279,593

Payment-in-kind/Deferred interest income

Non-control/Non-affiliated investments

899,710

806,603

Affiliate investments

140,621

175,031

Control investments

132,648

65,766

Total payment-in-kind/Deferred interest income

1,172,979

1,047,400

Fee income

Non-control/Non-affiliated investments

38,101

114,406

Total fee income

38,101

114,406

Fee income - Asset Management 1

Portfolio fees

119,248

149,156

Management fees

104,944

94,210

Total fee income - Asset Management

224,192

243,366

Total operating income

7,468,940

6,151,865

Operating Expenses:

Interest and other borrowing costs 2

2,510,677

2,402,894

Management fee

1,642,930

1,487,189

Audit & tax preparation fees

151,300

84,000

Consulting fees

334,519

257,000

Other expenses *

140,763

129,624

Legal fees

123,000

290,836

Directors’ fees

94,000

85,100

Portfolio fees - Asset Management 1

89,436

111,867

Management fee - Asset Management 1

78,708

70,657

Insurance

69,516

67,320

Administration

41,589

43,135

Public relations fees

26,000

36,120

Printing and postage

16,800

17,300

Net Incentive compensation (Note 11)

—

(1,316,475
)

Total operating expenses

5,319,238

3,766,567

Less: Voluntary expense waiver by Adviser 3

(37,500
)
(37,500
)
Less: Voluntary management fee waiver by Adviser 4

(616,099
)
(557,696
)

Total waivers

(653,599
)
(595,196
)

Net operating income before taxes

2,803,301

2,980,494

Tax Expenses:

Current tax expense

485

482

Total tax expense

485

482

Net operating income

2,802,816

2,980,012

Net Realized and Unrealized Gain (Loss) on Investments:

Net realized gain (loss) on investments

U.S. Treasury obligations

84,375

(95,355
)
Non-control/Non-affiliated investments

2,910

(257,077
)
Affiliate investments

(3,795,709
)
3,455,430

Control investments

(218,992
)
—

Foreign currency

11,733

(985
)

Total net realized gain (loss) on investments

(3,915,683
)
3,102,013

Net unrealized appreciation (depreciation) on investments

1,460,783

(11,951,877
)

Net realized and unrealized loss on investments

(2,454,900
)
(8,849,864
)

Net increase (decrease) in net assets resulting from operations

$
347,916

$
(5,869,852
)

Net increase (decrease) in net assets per share resulting from operations

$
0.02

$
(0.32
)

Dividends declared per share 5

$
0.150

$
0.150

Weighted average number of shares outstanding

17,725,118

18,820,528

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

MVC Capital, Inc.

Consolidated Statements of Operations

(Unaudited)

	For the Quarter			For the Quarter
	February 1, 2020 to			February 1, 2019 to
	April 30, 2020			April 30, 2019
Operating Income:
Dividend income
Non-control/Non-affiliated investments	$	-		$	395,543
Affiliate investments (net of foreign taxes withheld of $0 and $76,866, respectively)		-			435,578

Total dividend income		-			831,121

Payment-in-kind dividend income
Non-control/Non-affiliated investments		-			1,196,260

Total payment-in-kind dividend income		-			1,196,260

Interest income
Non-control/Non-affiliated investments		5,732,516			4,151,276
Affiliate investments		-			-
Control investments		107,238			106,045

Total interest income		5,839,754			4,257,321

Payment-in-kind/Deferred interest income
Non-control/Non-affiliated investments		1,395,716			1,756,055
Affiliate investments		130,219			220,412
Control investments		106,155			126,577

Total payment-in-kind/Deferred interest income		1,632,090			2,103,044

Fee income
Non-control/Non-affiliated investments		13,099			13,099

Total fee income		13,099			13,099

Fee income - Asset Management¹
Portfolio fees		93,550			100,843
Management fees		69,460			92,070

Total fee income - Asset Management		163,010			192,913

Other income		4,580			-

Total operating income		7,652,533			8,593,758

Operating Expenses:
Interest and other borrowing costs²		2,125,386			2,282,558
Management fee		1,103,156			1,590,744
Loss on extinguishment of debt⁶		345,419			-
Consulting fees		240,705			236,935
Legal fees		213,800			144,000
Other expenses		111,337			178,453
Directors' fees		96,000			103,200
Audit & tax preparation fees		94,500			160,900
Insurance		80,778			69,513
Portfolio fees - Asset Management¹		70,162			75,633
Management fee - Asset Management¹		52,095			69,052
Administration		40,574			40,233
Public relations fees		37,144			40,237
Printing and postage		7,200			16,200

Total operating expenses		4,618,256			5,007,658

Less: Voluntary expense waiver by Adviser³		(37,500	)		(37,500	)
Less: Voluntary management fee waiver by Adviser⁴		(413,683	)		(596,528	)

Total waivers		(451,183	)		(634,028	)

Net operating income before taxes		3,485,460			4,220,128

Tax Expenses:
Current tax expense		485			482

Total tax expense		485			482

Net operating income		3,484,975			4,219,646

Net Realized and Unrealized Gain (Loss) on Investments:

Net realized gain (loss) on investments
U.S. Treasury obligations		(85,886	)		20,483
Non-control/Non-affiliated investments		(558,478	)		3,223,407
Affiliate investments		-			29,000
Control investments		909,845			-
Foreign currency		-			-


Total net realized gain on investments		265,481			3,272,890

Net unrealized appreciation (depreciation) on investments		(44,082,785	)		8,471,448


Net realized and unrealized gain (loss) on investments		(43,817,304	)		11,744,338

Net increase (decrease) in net assets resulting from operations	$	(40,332,329	)	$	15,963,984

Net increase (decrease) in net assets per share resulting from operations	$	(2.28	)	$	0.90

Dividends declared per share⁵	$	0.170		$	0.150

Weighted average number of shares outstanding		17,725,118			17,725,118

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

¹These items are related to the management of the MVC Private Equity Fund, L.P. (“("PE ~~Fund”~~Fund"). Please see Note 10 ~~“Management”~~ "Management"for more information.

²Interest and other borrowing costs includes ~~$86,285~~$0 and ~~$699,979~~$84,944 of interest associated with installment sale treatment on the USG&E note.Please see Note 12 ~~“Tax Matters”~~"Tax Matters" for more information.

³Reflects the quarterly portion of the TTG ~~Advisers’~~Advisers' voluntary waiver of $150,000 of expenses for the ~~2019~~2020 and ~~2018~~2019 fiscal years,that the Company would otherwise be obligated to reimburse TTG Advisers under the Advisory Agreement (the ~~“Voluntary Waiver”~~"Voluntary Waiver"). Please see Note 10 ~~“Management”~~"Management" for more information.

⁴Reflects the quarterly portion of the TTG ~~Advisers’~~Advisers' voluntary waiver of the management fee for the ~~2019~~2020 and ~~2018~~ 2019Please see Note 10 ~~“Management”~~"Management" for more information.

⁵Please see Note 13 ~~“Dividends~~"Dividends and Distributions to Shareholders, Share Repurchase Program and Tender ~~Offer”~~Offer" for more information.

* ⁶~~Amounts from prior year have been reclassified~~Reflects $345,419 in unamortized deferred financing fees related to ~~conform to current year presentation.~~the Senior Notes II which were expensed at the time$20.0 million of the Senior Notes II were redeemed.

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

MVC Capital, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Month Period			For the Nine Month Period			For the Six Month Period			For the Six Month Period
	November 1, 2018 to			November 1, 2017 to			November 1, 2019 to			November 1, 2018 to
	July 31, 2019			July 31, 2018			April 30, 2020			April 30, 2019
Cash flows from Operating Activities:
Net increase (decrease) in net assets resulting from operations	$	13,259,148		$	(8,313,453	)	$	(35,915,950	)	$	12,911,232
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net realized (gain) loss	(4,583,333		)	(201,090		)
Net realized gain								(1,373,556	)		(8,499,016	)
Net change in unrealized depreciation (appreciation)	(206,778		)	10,567,061				44,080,983			1,254,005
Amortization of discounts and fees	(232,955		)	(224,152		)		(2,385,801	)		(133,670	)
Increase in accrued payment-in-kind dividends and interest	(5,143,943		)	(2,244,828		)		(2,417,660	)		(4,368,587	)
Amortization of deferred financing fees	968,257			954,998				554,155			699,326
Loss on extinguishment of debt	—			1,782,705				345,419			-
Changes in operating assets and liabilities:
Dividends, interest and fees receivable	(629,649		)	(533,035		)		152,374			(57,500	)
Fee and other receivables	16,738			(676,727		)		1,625,819			39,449
Escrow receivables, net of reserves	(116,000		)	(935,000		)		1,135,000			(78,000	)
Receivable for Investment Sold	—			(5,787,729		)
Prepaid expenses	49,900			35,704				(419,377	)		(67,484	)
Incentive compensation (Note 5)	—			(3,945,297		)
Prepaid taxes								(519	)		-
Other liabilities	322,658			(1,286,021		)		(1,482,230	)		158,084
Purchases of equity investments	(4,268,340		)	(468,562		)		(1,870,978	)		(3,343,663	)
Purchases of debt instruments	(36,751,624		)	(50,398,591		)		(9,747,434	)		(5,120,513	)
Purchases of short-term investments	(49,991,103		)	(24,996,182		)		(24,999,379	)		(49,991,147	)
Proceeds from equity investments	30,803,643			6,722,729
Proceeds from equity investments⁽¹⁾								6,933,174			7,663,787
Proceeds from debt instruments	3,395,440			12,243,683				80,918,860			3,033,913
Sales/maturities of short-term investments	50,094,859			24,901,266				24,912,778			25,016,819

Net cash used in operating activities	(3,013,082		)	(42,802,521		)
Net cash provided by (used in) operating activities								80,045,678			(20,882,965	)

Cash flows from Financing Activities:
Borrowings from senior notes	—			115,000,000
Repayments from senior notes	—			(114,408,750		)		(20,000,000	)		-
Borrowings from revolving credit facility II	50,000,000			—				25,000,000			50,000,000
Repayments from revolving credit facility II	(50,000,000		)	—				(25,000,000	)		(25,000,000	)
Borrowings from revolving credit facility IV	26,100,000			—				-			17,000,000
Repayments from revolving credit facility IV	(4,000,000		)	—				(15,100,000	)		(4,000,000	)
Repurchase of common stock	(4,069,924		)	(25,100,502		)		-			(4,069,924	)
Financing fees paid	(1,053,921		)	(3,707,369		)		-			(893,587	)
Distributions paid to shareholders	(7,728,062		)	(8,215,867		)		(5,877,362	)		(5,160,533	)
Repurchases of common stock under dividend reinvestment plan	(269,711		)	(253,371		)		(149,180	)		(178,472	)

Net cash provided by (used in) financing activities	8,978,382			(36,685,859		)
Net cash provided by financing activities								(41,126,542	)		27,697,484

Net change in cash, cash equivalents, restricted cash and restricted cash equivalents, for the period	5,965,300			(79,488,380		)
Net change in cash, cash equivalents, and restricted cash for the period								38,919,136			6,814,519

Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of period	$	15,887,700		$	106,674,568
Cash, cash equivalents, and restricted cash, beginning of period							$	11,698,929		$	15,887,700

Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period	$	21,853,000		$	27,186,188
Cash, cash equivalents, and restricted cash, end of period							$	50,618,065		$	22,702,219

⁽¹⁾For the six month period ended April 30, 2019, proceeds from equity investments includes $1,018,000 from escrow receivables, net of reserves.

During the ~~nine~~six month periods ended ~~July 31,~~April 30, 2020 and 2019 ~~and 2018~~ MVC Capital, Inc. paid ~~$6,018,487 and $7,143,752~~$3,928,281and $4,013,173 in interest expense, respectively.

During the ~~nine~~six month periods ended ~~July 31,~~April 30, 2020 and 2019 ~~and 2018~~ MVC Capital, Inc. paid ~~$1,616~~$2,404 and ~~$1,920~~$1,616 in income taxes, respectively.

Non-cash activity:

During the ~~nine~~six month periods ended ~~July 31,~~April 30, 2020 and 2019, ~~and 2018,~~ MVC Capital, Inc. recorded payment in-kind dividend and interest of ~~$5,143,943~~$2,417,660 and ~~$2,244,828,~~$4,368,587, respectively. This amount was added to the principal balance of the investments and recorded as dividend/interest income.

During the ~~nine~~six month periods ended ~~July 31,~~April 30, 2020 and 2019, ~~and 2018,~~ the Plan Agent purchased ~~29,543~~17,626 and ~~25,043~~19,782 shares of common stock in the open market in order to satisfy the reinvestment portion of our dividends.

~~During the nine month period ended July 31, 2018, all assets and liabilities~~The accompanying notes are an integral part of ~~SGDA Europe were transferred to a new Austrian holding company, Trientis GmbH, to achieve operating efficiencies.~~these consolidated financial statements.

Consolidated Statements of 10% and a maturity date of December 31, 2020, 6,500 shares of Series B Preferred Stock with a 10% PIK coupon and a maturity date of December 31, 2020 and 17,935 shares of Series C Preferred Stock. The unsecured subordinated loan was restructured into 3,617 shares of Series A Preferred Stock with a 12% PIK coupon and a maturity date of April 30, 2020.Changes in Net Assets

Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment, resulting in a realized loss of approximately $3.0 million. The second lien loan is still subject to indemnification adjustments.

For the Six Month Period November 1, 2018 to				Additional		Accumulated						Total
April 30, 2019 (Unaudited)	Common Stock			Paid-In-Capital		Overdistributed Earnings			Treasury Stock			Shareholders' Equity
Balances at October 31, 2018	$	283,044		$	408,583,787	$	(79,700,440	)	$	(102,442,945	)	$	226,723,446

Net operating income		-			-		5,666,221			-			5,666,221
Accumulated net realized loss		-			-		(1,254,005	)		-			(1,254,005	)
Net unrealized appreciation		-			-		8,499,016			-			8,499,016
Dividends paid to stockholders		-			-		(5,339,005	)		-			(5,339,005	)
Issuance of common stock under dividend reinvestment plan		178,472			-		-			-			178,472
Repurchase of common stock under dividend reinvestment plan		(178,472	)		-		-			-			(178,472	)
Repurchase of common stock		-			-		-			(4,069,924	)		(4,069,924	)

Balances at April 30, 2019	$	283,044		$	408,583,787	$	(72,128,213	)	$	(106,512,869	)	$	230,225,749

For the Six Month Period November 1, 2019 to
April 30, 2020 (Unaudited)
Balances at October 31, 2019	$	283,044		$	406,258,172	$	(72,069,663	)	$	(106,512,869	)	$	227,958,684

Net operating income		-			-		6,791,477			-			6,791,477
Accumulated net realized gain		-			-		1,373,556			-			1,373,556
Net unrealized depreciation		-			-		(44,080,983	)		-			(44,080,983	)
Dividends paid to stockholders		-			-		(6,026,542	)		-			(6,026,542	)
Issuance of common stock under dividend reinvestment plan		149,180			-		-			-			149,180
Repurchase of common stock under dividend reinvestment plan		(149,180	)		-		-			-			(149,180	)

Balances at April 30, 2020	$	283,044		$	406,258,172	$	(114,012,155	)	$	(106,512,869	)	$	186,016,192

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

~~MVC Capital, Inc.~~

~~Consolidated Statements of Changes in Net Assets~~

Accumulated

Net Unrealized

For the Nine Month Period November 1, 2017 to

Common

Additional

Accumulated

Dividends Paid

Net Realized

Appreciation

Treasury

Total Net

July 31, 2018 (Unaudited)

Stock

Paid-In-Capital

Earnings

to Stockholders

Gain (Loss)

(Depreciation)

Stock

Asset Value

Balances at October 31, 2017

$
283,044

$
418,208,458

$
122,455,573

$
(157,414,605
)
$
38,434,807

$
(70,965,264
)
$
(71,512,945
)
$
279,489,068

Net increase (decrease) resulting from operations

—

—

2,052,518

—

201,090

(10,567,061
)
—

(8,313,453
)
Distributions from Income

—

—

—

—

—

—

—

—

Distributions from return of capital

—

—

—

(8,469,238
)
—

—

—

(8,469,238
)
Issuance of common stock under dividend reinvestment plan

253,371

—

—

—

—

—

—

253,371

Repurchase of common stock under dividend reinvestment plan

(253,371
)
—

—

—

—

—

—

(253,371
)
Repurchase expenses

—

(100,513
)
—

—

—

—

—

(100,513
)
Repurchase of common stock

—

—

—

—

—

—

(24,999,989
)
(24,999,989
)

Balances at July 31, 2018

$
283,044

$
418,107,945

$
124,508,091

$
(165,883,843
)
$
38,635,897

$
(81,532,325
)
$
(96,512,934
)
$
237,605,875

For the Nine Month Period November 1, 2018 to

July 31, 2019(Unaudited)

Balances at October 31, 2018

$
283,044

$
408,583,787

$
135,596,655

$
(168,616,544
)
$
38,778,647

$
(85,459,198
)
$
(102,442,945
)
$
226,723,446

Net increase (decrease) resulting from operations

—

—

8,469,037

—

4,583,333

206,778

—

13,259,148

Distributions from Income

—

—

—

(7,997,773
)
—

—

—

(7,997,773
)
Issuance of common stock under dividend reinvestment plan

269,711

—

—

—

—

—

—

269,711

Repurchase of common stock under dividend reinvestment plan

(269,711
)
—

—

—

—

—

—

(269,711
)
Repurchase of common stock

—

—

—

—

—

—

(4,069,924
)
(4,069,924
)

Balances at July 31, 2019

$
283,044

$
408,583,787

$
144,065,692

$
(176,614,317
)
$
43,361,980

$
(85,252,420
)
$
(106,512,869
)
$
227,914,897

MVC Capital, Inc.
Consolidated Selected Per Share Data and Ratios

	For the Six Month Period			For the Six Month Period			For the
	November 1, 2019 to			November 1, 2018 to			Year Ended
	April 30, 2020			April 30, 2019			October 31, 2019
	(Unaudited)			(Unaudited)

Net asset value, beginning of period/year	$	12.86		$	12.46		$	12.46

Income from operations:
Net operating income		0.38			0.32			0.65
Net realized and unrealized gain (loss) on investments		(2.41	)		0.41			0.27

Total gain (loss) from investment operations		(2.03	)		0.73			0.92

Less distributions from:
Income		(0.34	)		(0.30	)		(0.62	)

Total distributions		(0.34	)		(0.30	)		(0.62	)

Capital share transactions
Anti-dilutive effect of share repurchase program		-			0.10			0.10

Total capital share transactions		-			0.10			0.10

Net asset value, end of period/year	$	10.49		$	12.99		$	12.86

Market value, end of period/year	$	6.67		$	9.18		$	8.77

Market discount		(36.42	)%		(29.33	)%		(31.80	)%

Total Return - At NAV (a)		(16.32	)%		6.75	%		8.33	%

Total Return - At Market (a)		(20.62	)%		4.78	%		3.64	%

Ratios and Supplemental Data:

Portfolio turnover ratio		4.80	%		3.30	%		11.48	%

Net assets, end of period/year (in thousands)	$	186,016		$	230,226		$	227,959

Ratios to average net assets:
Expenses including tax expense		8.11	% (c)		8.41	% (c)		8.39	%
Expenses excluding tax expense		8.11	% (c)		8.41	% (c)		8.39	%

Net operating income before tax expense		6.37	% (c)		5.09	% (c)		5.13	%
Net operating income after tax expense		6.37	% (c)		5.09	% (c)		5.13	%

Ratios to average net assets excluding waivers:
Expenses including tax expense		9.05	% (c)		9.52	% (c)		9.52	%
Expenses excluding tax expense		9.05	% (c)		9.52	% (c)		9.52	%

Net operating income before tax expense		5.43	% (c)		3.98	% (c)		4.00	%
Net operating income after tax expense		5.43	% (c)		3.98	% (c)		4.00	%

(a) Total annual return is historical and assumes changes in share price, reinvestments of all dividends and distributions, and no sales charge for the period/year.

(b) Supplemental Ratio information

Ratios to average net assets: (b)
Expenses excluding incentive compensation		8.11	% (c)		8.41	% (c)		8.39	%
Expenses excluding incentive compensation,
interest and other borrowing costs		4.05	% (c)		4.13	% (c)		4.12	%

Net operating income before incentive compensation		6.37	% (c)		5.09	% (c)		5.13	%
Net operating income before incentive compensation,
interest and other borrowing costs		10.43	% (c)		9.37	% (c)		9.40	%

Ratios to average net assets excluding waivers: (b)
Expenses excluding incentive compensation		9.05	% (c)		9.52	% (c)		9.52	%
Expenses excluding incentive compensation,
interest and other borrowing costs		4.99	% (c)		5.24	% (c)		5.25	%

Net operating income before incentive compensation		5.43	% (c)		3.98	% (c)		4.00	%
Net operating income before incentive compensation,
interest and other borrowing costs		9.49	% (c)		8.26	% (c)		8.27	%

(c) Annualized.

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

~~MVC Capital, Inc.~~

~~Consolidated Selected Per Share Data and Ratios~~

For the Nine Month Period

For the Nine Month Period

For the

November 1, 2018 to

November 1, 2017 to

Year Ended

July 31, 2019

July 31, 2018

October 31, 2018

(Unaudited)

(Unaudited)

Net asset value, beginning of period/year

$
12.46

$
13.24

$
13.24

Income from operations:

Net operating income (loss)

0.48

0.10

0.20

Net realized and unrealized gain (loss) on investments

0.27

(0.55
)
(0.75
)

Total gain (loss) from investment operations

0.75

(0.45
)
(0.55
)

Less distributions from:

Income

(0.45
)
—

(0.02
)
Realized gain

—

—

(0.13
)
Return of capital

—

(0.45
)
(0.45
)

Total distributions

(0.45
)
(0.45
)
(0.60
)

Capital share transactions

Anti-dilutive effect of share repurchase program

0.10

0.28

0.37

Total capital share transactions

0.10

0.28

0.37

Net asset value, end of period/year

$
12.86

$
12.62

$
12.46

Market value, end of period/year

$
9.57

$
9.38

$
9.05

Market discount

(25.58
)%
(25.67
)%
(27.37
)%

Total Return - At NAV (a)

6.91
%
(1.35
)%
(1.46
)%

Total Return - At Market (a)

10.94
%
(8.30
)%
(10.06
)%

Ratios and Supplemental Data:

Portfolio turnover ratio

10.04
%
6.10
%
7.21
%

Net assets, end of period/year (in thousands)

$
227,915

$
237,606

$
226,723

Ratios to average net assets:

Expenses including tax expense

8.32
%(c)
7.73
%(c)
7.70
%
Expenses excluding tax expense

8.32
%(c)
7.73
%(c)
7.70
%

Net operating income (loss) before tax expense

5.02
%(c)
1.08
%(c)
1.51
%
Net operating income (loss) after tax expense

5.02
%(c)
1.08
%(c)
1.51
%

Ratios to average net assets excluding waivers:

Expenses including tax expense

9.44
%(c)
8.56
%(c)
8.58
%
Expenses excluding tax expense

9.44
%(c)
8.56
%(c)
8.57
%

Net operating income (loss) before tax expense

3.90
%(c)
0.25
%(c)
0.63
%
Net operating income (loss) after tax expense

3.90
%(c)
0.25
%(c)
0.63
%

(a) Total annual return is historical and assumes changes in share price, reinvestments of all dividends and distributions, and no sales charge for the period/year.

(b) Supplemental Ratio information

Ratios to average net assets: (b)

Expenses excluding incentive compensation

8.32
%(c)
8.81
%(c)
8.53
%
Expenses excluding incentive compensation, interest and other borrowing costs

4.00
%(c)
4.34
%(c)
4.20
%

Net operating income (loss) before incentive compensation

5.02
%(c)
—
%(c)
0.68
%
Net operating income before incentive compensation, interest and other borrowing costs

9.34
%(c)
4.47
%(c)
5.00
%

Ratios to average net assets excluding waivers: (b)

Expenses excluding incentive compensation

9.44
%(c)
9.65
%(c)
9.40
%
Expenses excluding incentive compensation, interest and other borrowing costs

5.13
%(c)
5.17
%(c)
5.08
%

Net operating income (loss) before incentive compensation

3.90
%(c)
(0.84
)%(c)
(0.20
)%
Net operating income before incentive compensation, interest and other borrowing costs

8.21
%(c)
3.64
%(c)
4.13
%

(c) Annualized.

MVC Capital, Inc.
Consolidated Schedule of Investments
April 30, 2020
(Unaudited)

Company	Industry	Investment	Principal		Cost		Fair Value/Market Value
Non-control/Non-affiliated investments- 78.70% (a, c, f, g)
Black Diamond Equipment Rentals, LLC	Equipment Rental	Second Lien Loan 12.5000% Cash, 06/27/2022 (k, n)	$	7,500,000	$	7,235,981	$	7,310,231
		Warrants (d, n)		1		400,847		897,000
						7,636,828		8,207,231
Custom Alloy Corporation	Manufacturer of Pipe Fittings and Forgings	Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b, k, n)		33,137,486		33,137,486		26,634,011
		Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b, k, n)		6,253,813		6,253,813		5,026,456
		Revolver 12.0000% Cash, 3.0000% PIK, 04/30/2021 (b, k, n)		3,745,808		3,745,808		3,413,974
						43,137,107		35,074,441
Dukane IAS,LLC	Welding Equipment Manufacturer	Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b, k, n)		4,546,413		4,530,321		4,546,413
FOLIOfn, Inc.	Technology Investment - Financial Services	Preferred Stock (5,802,259 shares) (d, i, n)				15,000,000		11,387,000
Global Prairie PBC, Inc.	Marketing	Second Lien Loan 10.0000% Cash, 4.0000% PIK, 04/16/2025 (b, k, n)		3,056,260		3,002,144		2,973,360
GTM Intermediate Holdings, Inc.	Medical Equipment/Manufacturer	Second Lien Loan 11.0000% Cash, 1.0000% PIK, 12/7/2024 (b ,k, n)		5,089,845		5,008,077		4,890,759
		Common Stock (2 shares) (d, n, q)				766,122		1,352,173
						5,774,199		6,242,932
Highpoint Global LLC	Government Services	Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022 (b, k, n)		5,254,246		5,205,435		5,000,516
HTI Technologies and Industries, Inc.	Electronic Component Manufacturing	Second Lien Note 15.7500% PIK, 9/15/2024 (b, k, n)		11,638,573		11,621,315		10,484,352
Initials, Inc.	Consumer Products	Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 06/23/2020 (b, h, k, n)		5,642,913		5,642,913		650,079
International Precision Components Corporation	Plastic Injection Molding	Second Lien Loan 12.0000% Cash, 2.0000% PIK, 10/3/2024 (b, k, n, r)		8,000,000		7,868,952		7,839,802
Jedson Engineering, Inc.	Engineering and Construction Management	First Lien Loan 12.0000% Cash, 3.0000% PIK, 06/21/2024 (b, h, k, n)		9,416,278		9,228,783		6,883,121
Legal Solutions Holdings, Inc.	Business Services	Senior Subordinated Debt 12.0000% Cash, 3.0000% PIK, 03/31/2022 (b, k, n)		9,889,336		9,889,336		9,503,125
Powers Equipment Acquisition Company, LLC	Equipment Manufacturer	First Lien Note 13.5000% PIK, 04/30/2024 (b, h, k, n, s)		6,500,000		6,396,058		4,955,752
SMA Holdings, Inc.	Consulting	First Lien Loan 11.0000% Cash, 06/26/2024 (k, n)		7,000,000		6,488,058		6,552,785
		Warrants (d, n)		2		504,555		504,555
						6,992,613		7,057,340
Trientis GmbH	Environmental Services	First Lien Note 5.0000% PIK, 10/26/2024 (b, e, h, m, n, o)		1,248,632		1,248,632		194,918
		Warrants (d, e, n, o)		1		67,715		-
						1,316,347		194,918
Tuf-Tug Inc.	Safety Equipment Manufacturer	Second Lien Loan 11.0000% Cash, 2.0000% PIK, 02/24/2024 (b, k, n)		5,036,183		5,002,380		5,036,183
		Common Stock (24.6 shares) (d, n, p)				750,000		605,050
						5,752,380		5,641,233
Turf Products, LLC	Distributor - Landscaping and Irrigation Equipment	Senior Subordinated Debt 10.0000% Cash, 10/07/2023 (k, n)		8,697,056		8,697,056		7,470,902
U.S. Gas & Electric, Inc.	Energy Services	Second Lien Loan, 9.5000% Cash, 07/05/2025 (l, n)		3,185,428		3,185,428		3,185,428
		Second Lien Loan, 9.5000% Cash, 07/05/2025 (h, l, n)		1,585,291		1,585,291		-
						4,770,719		3,185,428
U.S. Spray Drying Holding Company	Specialty Chemicals	Class B Common Stock (784 shares) (d, n)				5,488,000		970,000
		Secured Loan 12.0000% Cash, 04/30/2021 (k, n)		1,500,000		1,500,000		1,500,000
		Senior Secured Loan 12.0000% Cash, 04/30/2021 (k, n)		1,500,000		1,500,000		1,500,000
						8,488,000		3,970,000
United States Technologies, Inc.	Electronics Manufacturing and Repair	Senior Lien Loan 10.5000% Cash, 07/17/2021 (k, n)		5,133,333		5,132,651		5,133,333

Sub Total Non-control/Non-affiliated investments					$	176,083,157	$	146,401,278


Affiliate investments - 24.10% (c, f, g)
Advantage Insurance, Inc.	Insurance	Preferred Stock (587,001 shares) (a, d, e, n)				5,870,010		4,917,163
Equus Total Return, Inc.	Registered Investment Company	Common Stock (3,228,024 shares) (d, k)				7,524,035		3,647,667
JSC Tekers Holdings	Real Estate Management	Common Stock (3,201 shares) (a, d, e, n)				4,500		-
		Preferred Stock (9,159,085 shares) (a, d, e, n)				11,810,188		4,527,000
						11,814,688		4,527,000
Security Holdings B.V.	Electrical Engineering	Common Equity Interest (a, d, e, n)				51,204,270		17,934,000
		Bridge Loan 5.0000% PIK, 05/31/2022 (a, b, e, k, n)		5,187,508		5,187,508		5,187,508
		Senior Subordinated Loan 3.1000% PIK, 05/31/2022 (a, b, e, k, n)		8,610,237		8,610,237		8,610,237
						65,002,015		31,731,745

Sub Total Affiliate investments					$	90,210,748	$	44,823,575

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

~~MVC Capital, Inc.~~

~~Consolidated Schedule of Investments~~

~~July 31, 2019~~

~~(Unaudited)~~

Company

Industry

Investment

Principal

Cost

Fair Value/Market
Value

Non-control/Non-affiliated investments- 100.87% (a), (c), (f), (g)

Apex Industrial Technologies, LLC

Supply Chain Equipment Manufacturer

First Lien Loan 12.0000% Cash, 12/31/2019 (k), (n)

$
15,000,000

$
14,891,774

$
15,000,000

Array Information Technology, Inc.

Information Technology Products and Services

Second Lien Loan 12.0000% Cash, 4.0000% PIK, 10/03/2023 (b), (k), (n), (p)

6,196,094

6,106,983

6,258,040

Warrants (d), (n)

1

—

—

6,106,983

6,258,040

Black Diamond Equipment Rentals, LLC

Equipment Rental

Second Lien Loan 12.5000% Cash, 06/27/2022 (k), (n)

7,500,000

7,144,062

7,575,000

Warrants (d), (n)

1

400,847

952,000

7,544,909

8,527,000

Custom Alloy Corporation

Manufacturer of Pipe Fittings and Forgings

Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b), (k), (n)

32,471,814

32,471,814

32,143,980

Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b), (k), (n)

6,128,187

6,128,187

6,066,316

Revolver 12.0000% Cash, 3.0000% PIK, 04/30/2020 (b), (k), (n)

800,000

800,000

800,000

39,400,001

39,010,296

Dukane IAS,LLC

Welding Equipment Manufacturer

Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b), (k), (n)

4,460,683

4,422,486

4,515,007

Essner Manufacturing, LP

Defense/Aerospace Parts Manufacturing

First Lien Loan 11.5000% Cash, 12/20/2022 (k), (n), (o)

3,588,607

3,540,073

3,588,607

FOLIOfn, Inc.

Technology Investment - Financial Services

Preferred Stock (5,802,259 shares) (d), (i), (n)

15,000,000

5,783,000

GTM Intermediate Holdings, Inc.

Medical Equipment/Manufacturer

Second Lien Loan 11.0000% Cash, 1.0000% PIK, 12/7/2024 (b), (k), (n)

5,051,161

4,956,057

5,051,161

Common Stock (2 shares) (d), (n), (t)

766,122

766,122

5,722,179

5,817,283

Highpoint Global LLC

Government Services

Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022 (b), (k), (n)

5,174,783

5,110,825

5,174,784

HTI Technologies and Industries, Inc.

Electronic Component Manufacturing

Second Lien Note 12.0000% Cash, 3.7500% PIK, 9/15/2024 (b), (k), (n)

11,313,881

11,294,050

11,313,881

Initials, Inc.

Consumer Products

Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 06/23/2020 (b), (h), (k), (n)

5,642,913

5,642,913

1,987,512

International Precision Components Corporation

Plastic Injection Molding

Second Lien Loan 12.0000% Cash, 3.5000% PIK, 10/3/2024 (b), (k), (n), (u)

8,000,000

7,846,731

8,000,000

Jedson Engineering, Inc.

Engineering and Construction Management

First Lien Loan 12.0000% Cash, 3.0000% PIK, 06/21/2024 (b), (k), (n)

6,001,500

5,882,852

6,001,500

Legal Solutions Holdings, Inc.

Business Services

Senior Subordinated Debt 12.0000% Cash, 4.0000% PIK, 03/18/2020 (b), (k), (n)

12,090,053

12,090,053

12,090,053

Morey’s Seafood International, LLC

Food Services

Second Lien Loan 10.0000% Cash, 3.0000% PIK, 08/12/2022 (b), (k), (n), (q)

16,361,251

16,361,251

16,361,251

Powers Equipment Acquisition Company, LLC

Equipment Manufacturer

First Lien Note 13.500% Cash, 04/30/2024 (k), (n), (v)

6,500,000

6,376,550

6,500,000

SMA Holdings, Inc.

Consulting

First Lien Loan 11.0000% Cash, 06/26/2024 (k), (n)

7,000,000

6,395,594

6,505,387

Warrants (d), (n)

2

504,555

504,555

6,900,149

7,009,942

Tin Roof Software, LLC

Software

Second Lien Loan 11.0000% Cash, 3.5000% PIK, 04/01/2024 (b), (k), (n)

3,750,000

3,687,550

3,750,000

Trientis GmbH

Environmental Services

First Lien Note 5.0000% PIK, 10/26/2024 (b), (e), (h), (m), (n), (r)

1,248,632

1,248,632

263,034

Warrants (d), (e), (r), (n)

1

67,715

—

1,316,347

263,034

Tuf-Tug Inc.

Safety Equipment Manufacturer

Second Lien Loan 11.0000% Cash, 2.0000% PIK, 02/24/2024 (b), (k), (n)

4,959,890

4,919,436

4,959,890

Common Stock (24.6 shares) (d), (n), (s)

750,000

750,000

5,669,436

5,709,890

Turf Products, LLC

Distributor - Landscaping and Irrigation Equipment

Senior Subordinated Debt 10.0000% Cash, 08/07/2020 (k), (n)

7,717,056

7,717,056

7,502,063

Third Lien Loan 10.0000% Cash, 08/07/2020 (k), (n)

1,120,000

1,120,000

1,094,447

8,837,056

8,596,510

U.S. Gas & Electric, Inc.

Energy Services

Second Lien Loan, 9.5000% Cash, 07/05/2025 (l), (n)

37,527,881

37,527,881

37,831,128

U.S. Spray Drying Holding Company

Specialty Chemicals

Class B Common Stock (784 shares) (d), (n)

5,488,000

2,300,000

Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)

1,500,000

1,500,000

1,500,000

Senior Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)

1,500,000

1,500,000

1,500,000

8,488,000

5,300,000

United States Technologies, Inc.

Electronics Manufacturing and Repair

Senior Lien Loan 10.5000% Cash, 07/17/2020 (k), (n)

5,500,000

5,497,273

5,500,000

Sub Total Non-control/Non-affiliated investments

$
245,157,322

$
229,888,718

Affiliate investments - 24.72% (a), (c), (f), (g)

Advantage Insurance, Inc.

Insurance

Preferred Stock (750,000 shares) (d), (e), (n)

7,500,000

7,917,096

JSC Tekers Holdings

Real Estate Management

Common Stock (3,201 shares) (d), (e), (n)

4,500

—

Preferred Stock (9,159,085 shares) (d), (e), (n)

11,810,188

4,173,000

11,814,688

4,173,000

MVC Environmental, Inc.

Environmental Services

Senior Secured Loan 9.0000% PIK, 12/22/2020 (b), (h), (k), (n)

6,869,353

6,869,353

—

Common Stock (980 shares) (d), (n)

6,063,038

—

12,932,391

—

Security Holdings B.V.

Electrical Engineering

Common Equity Interest (d), (e), (n)

51,204,270

33,930,000

Bridge Loan 5.0000% PIK, 12/31/2019 (b), (e), (k), (n)

4,937,218

4,937,218

4,937,218

Senior Subordinated Loan 4.5000% PIK, 05/31/2020 (b), (e), (k), (n)

5,395,442

5,395,442

5,395,442

61,536,930

44,262,660

Sub Total Affiliate investments

$
93,784,009

$
56,352,756

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

~~MVC Capital, Inc.~~

~~Consolidated Schedule of Investments - (Continued)~~

~~July 31, 2019~~

~~(Unaudited)~~

Company

Industry

Investment

Principal

Cost

Fair Value/Market
Value

Control investments - 23.33% (c), (f), (g)

Equus Total Return, Inc.

Registered Investment Company

Common Stock (3,836,334 shares) (d), (k)

$
8,777,153

$
5,946,318

MVC Automotive Group GmbH

Automotive Dealerships

Common Equity Interest (a), (d), (e), (n)

51,185,015

19,275,000

Bridge Loan 6.0000% Cash, 06/30/2020 (a), (e), (k), (n)

$
7,149,166

7,149,166

7,149,166

58,334,181

26,424,166

MVC Private Equity Fund LP

Private Equity

Limited Partnership Interest (a), (d), (j), (k), (n)

9,034,881

11,700,746

General Partnership Interest (a), (d), (j), (k), (n)

230,481

298,488

9,265,362

11,999,234

RuMe Inc.

Consumer Products

Common Stock (5,297,548 shares) (a), (d), (n)

924,475

—

Series C Preferred Stock (23,896,634 shares) (a), (d), (n)

3,410,694

3,401,486

Series B-1 Preferred Stock (4,999,076 shares) (a), (d), (n)

999,815

40,930

Subordinated Debt 10.0000% PIK, 3/31/2020 (a), (b), (k), (n)

3,521,680

3,521,680

3,521,680

Revolver 10.0000% PIK, 3/31/2020 (a), (b), (k), (n)

1,829,500

1,829,500

1,829,500

Warrants (a), (d), (n)

2

336,393

—

11,022,557

8,793,596

Sub Total Control investments

$
87,399,253

$
53,163,314

TOTAL PORTFOLIO INVESTMENTS - 148.92% (f)

$
426,340,584

$
339,404,788

Cash equivalents - 8.86% (f), (g)

Fidelity Institutional Government Money Market Fund

Money Market Fund

Beneficial Shares (20,102,411 shares)

$
20,102,411

$
20,102,411

Morgan Stanley Institutional Liquidity Government Portfolio

Money Market Fund

Beneficial Shares (98,637 shares)

98,637

98,637

Total Cash equivalents

20,201,048

20,201,048

TOTAL INVESTMENT ASSETS - 157.78%

$
446,541,632

$
359,605,836

Consolidated Schedule of Investments - (Continued)
April 30, 2020
(Unaudited)

Company	Industry	Investment	Principal		Cost		Fair Value/Market Value
Control investments - 18.87% (a, c, f, g)
MVC Automotive Group GmbH	Automotive Dealerships	Common Equity Interest (d, e, n)			$	52,185,015	$	14,209,000
		Bridge Loan 6.0000% Cash, 12/31/2021 (e, k, n)	$	7,149,166		7,149,166		7,149,166
						59,334,181		21,358,166
MVC Private Equity Fund LP	Private Equity	Limited Partnership Interest (d, j, k, n)				7,179,036		8,514,179
		General Partnership Interest (d, j, k, n)				183,138		218,014
						7,362,174		8,732,193
RuMe Inc.	Consumer Products	Common Stock (5,297,548 shares) (d, n)				924,475		-
		Series C Preferred Stock (23,896,634 shares) (d, n)				3,410,694		-
		Series B-1 Preferred Stock (4,999,076 shares) (d, n)				999,815		-
		Subordinated Debt 10.0000% PIK, 3/31/2021 (b, k, n)		3,793,732		3,793,732		2,814,474
		Revolver 10.0000% PIK, 3/31/2021 (b, h, k, n)		2,231,948		2,231,948		1,655,826
		Revolver 10.0000% PIK, 3/31/2021 (b, h, k, n)		726,704		726,704		539,124
		Warrants (d, n)		3		594,544		-
						12,681,912		5,009,424

Sub Total Control investments					$	79,378,267	$	35,099,783

TOTAL PORTFOLIO INVESTMENTS - 121.67% (f)					$	345,672,172	$	226,324,636

Cash equivalents - 26.31% (f, g)
Fidelity Institutional Government Money Market Fund	Money Market Fund	Beneficial Shares (48,844,487 shares)			$	48,844,487	$	48,844,487
Morgan Stanley Institutional Liquidity Government Portfoli	Money Market Fund	Beneficial Shares (99,873 shares)				99,873		99,873
Total Cash equivalents						48,944,360		48,944,360

TOTAL INVESTMENT ASSETS - 147.98%					$	394,616,532	$	275,268,996

(a) These securities are restricted from public sale without prior registration under the Securities Act of 1933. The Company negotiates certain aspects of the method and timing of the disposition of these investments, including registration rights and related costs.

(b) These securities accrue a portion of their interest/dividends in ~~“payment~~"payment in ~~kind”~~kind" interest/dividends which is capitalized to the investment.

(c) All of the ~~Company’s~~Company's equity and debt investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940, except MVC Automotive Group GmbH, Security Holdings B.V., Trientis GmbH, JSC Tekers Holdings, Equus Total Return Inc., and MVC Private Equity Fund L.P.

The Company makes available significant managerial assistance to all of the portfolio companies in which it has invested.

(d) Non-income producing assets.

(e) The principal operations of these portfolio companies are located in Europe and Puerto Rico which represents approximately 22% of the total assets. The remaining portfolio companies are located in United States which represents approximately ~~69%~~58% of the total assets.

(f) Percentages are based on net assets of ~~$227,914,897~~$186,016,192 as of ~~July 31, 2019.~~April 30, 2020.

(g) See Note 3 for further information regarding ~~“Investment~~"Investment Classification.”"

(h) All or a portion of the accrued interest on these securities have been reserved for.

(i) Legacy Investments.

(j) MVC Private Equity Fund, LP is a private equity fund focused on control equity investments in the lower middle market. The fund currently holds ~~three~~two investments, ~~two~~one located in the United States and one in Gibraltar, the investments are in the energy services ~~contract manufacturing,~~ and industrial sectors. The ~~Company’s~~Company owns 18.9% of the fund through its limited partnership interest and owns ..5% of the fund through its general partnership interest. The Company's proportional share of Gibdock Limited equity interest and loan, Advanced Oil Field Services, LLC common stock, preferred stock, and loan is $6,750,325 and ~~Focus Pointe preferred stock is $5,230,343, $3,351,420 and $2,448,891,~~$1,727,046, respectively. The ~~Company’s~~Company's partnership interests in the MVC Private Equity Fund, LP are not redeemable.

(k) All or a portion of these securities may serve as collateral for the ~~People’s~~People's United credit facility.

(l) U.S. Gas & Electric, Inc. is an indirect subsidiary of Vistra Energy (NYSE: VST). On October 18, 2019, Vistra Energy notified the Company that it was asserting an offset of Company's loan assets of approximately $1.6 million relating to an indemnification claim obligation attributable to U.S. Gas. The offset is reflected in the fair value of the loan asset as the Company is considering its response to the claim.

(m) Cash/PIK toggle at ~~borrower’s~~borrower's option

(n) These securities are valued using unobservable inputs.

(o) ~~Variable rate between 10.5000% and 11.5000% cash.~~

~~(p) 12% Cash and 0-4% PIK based on Funded Debt to EBITDA. 4% PIK initially.~~

~~(q) 10% Cash and 3% PIK beginning July 1, 2019.~~

~~(r)~~ During the fiscal year ended October 31, 2018, all assets and liabilities of SGDA Europe were transferred to a new Austrian holding company, Trientis GmbH, to achieve operating efficiencies.

~~(s)~~(p) Shares of Tuf-Tug, Inc. are held via Alitus T-T, LP.

~~(t)~~(q) Shares of GTM Intermediate Holdings, Inc. are held via GTM Ultimate Holdings, LLC.

~~(u)~~(r) Variable PIK rate between 2.0000% and 3.5000%.

~~(v)~~(s) Variable cash rate between 10.5000% and 13.5000%.

PIK - Payment-in-kind

- Denotes zero cost or fair value.

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

~~MVC Capital, Inc.~~

~~Consolidated Schedule of Investments~~

~~October 31, 2018~~

Company

Industry

Investment

Principal

Cost

Fair Value/Market
Value

Non-control/Non-affiliated investments- 83.33% (a), (c), (f), (g)

Apex Industrial Technologies, LLC

Supply Chain Equipment Manufacturer

First Lien Loan 12.0000% Cash, 03/09/2023 (k), (n)

$
15,000,000

$
14,869,274

$
15,000,000

Array Information Technology, Inc.

Information Technology Products and Services

Second Lien Loan 12.0000% Cash, 4.0000% PIK, 10/03/2023 (b), (k), (n), (p)

6,121,682

6,014,408

6,121,682

Warrants (d), (n)

1

—

—

6,014,408

6,121,682

Black Diamond Equipment Rentals, LLC

Equipment Rental

Second Lien Loan 12.5000% Cash, 06/27/2022 (k), (n)

7,500,000

7,052,478

7,174,342

Warrants (d), (n)

1

400,847

400,847

7,453,325

7,575,189

Custom Alloy Corporation

Manufacturer of Pipe Fittings and Forgings

Second Lien Loan 10.0000% Cash, 12/31/2020 (k), (n)

3,533,055

3,203,755

3,479,582

First Lien Loan 10.0000% Cash, 10/31/2018 (k), (n)

538,913

538,913

538,913

Second Lien Loan 15.0000% Cash, 10/31/2021 (k), (n)

1,404,500

1,404,500

1,404,500

Series A Preferred Stock (3,617 shares) 12.0000% PIK, 04/30/2020 (b), (d), (n)

3,000,000

3,683,908

Series B Preferred Stock (6,500 shares) 10.0000% PIK, 12/31/2020 (b), (d), (n)

5,683,254

6,410,727

Covertible Series C Preferred Stock (17,935 shares) (d), (n)

17,935,482

13,914,992

31,765,904

29,432,622

Dukane IAS,LLC

Welding Equipment Manufacturer

Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b), (k), (n)

4,377,174

4,316,872

4,420,942

Essner Manufacturing, LP

Defense/Aerospace Parts Manufacturing

First Lien Loan 11.5000% Cash, 12/20/2022 (k), (n), (o)

3,666,700

3,606,059

3,666,700

FOLIOfn, Inc.

Technology Investment - Financial Services

Preferred Stock (5,802,259 shares) (d), (i), (n)

15,000,000

4,993,000

Highpoint Global LLC

Government Services

Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022 (b), (k), (n)

5,097,086

5,017,981

5,148,057

HTI Technologies and Industries, Inc.

Electronic Component Manufacturing

Second Lien Note 12.0000% Cash, 2.0000% PIK, 06/21/2019 (b), (k), (n)

10,079,874

10,079,874

9,887,754

Initials, Inc.

Consumer Products

Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 06/23/2020 (b), (h), (k), (n)

5,642,913

5,642,913

2,675,452

Legal Solutions Holdings, Inc.

Business Services

Senior Subordinated Debt 12.0000% Cash, 3.0000% PIK, 03/18/2020 (b), (k), (n)

11,809,381

11,809,381

11,927,474

Morey’s Seafood International, LLC

Food Services

Second Lien Loan 10.0000% Cash, 3.0000% PIK, 08/12/2022 (b), (k), (n), (q)

16,493,186

16,493,186

16,493,186

Tin Roof Software, LLC

Software

Second Lien Loan 11.0000% Cash, 3.5000% PIK, 04/01/2024 (b), (k), (n)

3,750,000

3,676,136

3,750,000

Trientis GmbH

Environmental Services

First Lien Note 5.0000% PIK, 10/26/2024 (b), (e), (h), (m), (n), (r)

1,248,632

1,248,632

384,520

Warrants (d), (o), (r), (n)

1

67,715

—

1,316,347

384,520

Tuf-Tug Inc.

Safety Equipment Manufacturer

Second Lien Loan 11.0000% Cash, 2.0000% PIK, 02/24/2024 (b), (k), (n)

4,885,295

4,838,190

4,885,295

Common Stock (24.6 shares) (d), (n), (s)

750,000

750,000

5,588,190

5,635,295

Turf Products, LLC

Distributor - Landscaping and Irrigation Equipment

Senior Subordinated Debt 10.0000% Cash, 08/07/2020 (k), (n)

7,717,056

7,717,056

7,296,363

Third Lien Loan 10.0000% Cash, 08/07/2020 (k), (n)

1,190,000

1,190,000

1,137,399

8,907,056

8,433,762

U.S. Gas & Electric, Inc.

Energy Services

Second Lien Loan, 9.5000% Cash, 07/05/2025 (l), (n)

37,527,881

37,527,881

39,474,198

U.S. Spray Drying Holding Company

Specialty Chemicals

Class B Common Stock (784 shares) (d), (n)

5,488,000

5,400,000

Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)

1,500,000

1,500,000

1,500,000

Senior Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)

1,500,000

1,500,000

1,500,000

8,488,000

8,400,000

United States Technologies, Inc.

Electronics Manufacturing and Repair

Senior Lien Loan 10.5000% Cash, 07/17/2020 (k), (n)

5,500,000

5,495,227

5,500,000

Sub Total Non-control/Non-affiliated investments

$
203,068,014

$
188,919,833

Affiliate investments - 31.09% (c), (f), (g)

Advantage Insurance, Inc.

Insurance

Preferred Stock (750,000 shares) (a), (d), (e), (n)

7,500,000

8,835,361

Crius Energy Trust

Energy Services

Equity Unit (3,282,882 shares) (e)

25,864,439

15,745,460

JSC Tekers Holdings

Real Estate Management

Common Stock (3,201 shares) (a), (d), (e), (n)

4,500

—

Preferred Stock (9,159,085 shares) (a), (d), (e), (n)

11,810,188

4,079,000

11,814,688

4,079,000

MVC Environmental, Inc.

Environmental Services

Senior Secured Loan 9.0000% PIK, 12/22/2020 (a), (b), (h), (k), (n)

6,869,353

6,869,353

875,165

Common Stock (980 shares) (a), (d), (n)

3,140,375

—

10,009,728

875,165

Security Holdings B.V.

Electrical Engineering

Common Equity Interest (a), (d), (e), (n)

51,204,270

31,285,000

Bridge Loan 5.0000% PIK, 12/31/2019 (a), (b), (e), (k), (n)

4,703,037

4,703,037

4,703,037

Senior Subordinated Loan 12.4500% PIK, 05/31/2020 (a), (b), (e), (k), (n)

4,966,478

4,966,478

4,966,478

60,873,785

40,954,515

Sub Total Affiliate investments

$
116,062,640

$
70,489,501

MVC Capital, Inc.
Consolidated Schedule of Investments
October 31, 2019

Company	Industry	Investment	Principal		Cost		Fair Value/Market Value
Non-control/Non-affiliated investments- 100.60% (a, c, f, g)
Apex Industrial Technologies, LLC	Supply Chain Equipment Manufacturer	First Lien Loan 12.0000% Cash,12/31/2019 (k, n)	$	15,000,000	$	14,899,274	$	15,000,000
Array Information Technology, Inc.	Information Technology Products and Services	Second Lien Loan 12.0000% Cash, 4.0000% PIK,10/03/2023 (b, k, n, p)		6,259,648		6,175,991		6,322,216
		Warrants (d, n)		1		-		-
						6,175,991		6,322,216
Black Diamond Equipment Rentals, LLC	Equipment Rental	Second Lien Loan 12.5000% Cash,06/27/2022 (k, n)		7,500,000		7,174,926		7,575,000
		Warrants (d, n)		1		400,847		960,000
						7,575,773		8,535,000
Custom Alloy Corporation	Manufacturer of Pipe Fittings and Forgings	Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b, k, n)		32,471,814		32,471,814		32,061,135
		Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b, k, n)		6,128,186		6,128,186		6,050,681
		Revolver 12.0000% Cash, 3.0000% PIK, 04/30/2020 (b, k, n)		2,050,000		2,050,000		2,050,000
						40,650,000		40,161,816
Dukane IAS,LLC	Welding Equipment Manufacturer	Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b, k, n)		4,489,182		4,458,353		4,534,074
Essner Manufacturing, LP	Defense/Aerospace Parts Manufacturing	First Lien Loan 11.5000% Cash, 12/20/2022 (k, n, o)		3,588,606		3,543,739		3,588,606
FOLIOfn, Inc.	Technology Investment - Financial Services	Preferred Stock (5,802,259 shares) (d, i, n)				15,000,000		6,352,000
Global Prairie PBC, Inc.	Marketing	Second Lien Loan 10.0000% Cash, 4.0000% PIK, 04/16/2025 (b, k, n)		3,000,000		2,940,448		3,000,000
GTM Intermediate Holdings, Inc.	Medical Equipment/Manufacturer	Second Lien Loan 11.0000% Cash, 1.0000% PIK, 12/7/2024 (b ,k, n)		5,064,069		4,973,443		5,064,069
		Common Stock (2 shares) (d, n, t)				766,122		766,122
						5,739,565		5,830,191
Highpoint Global LLC	Government Services	Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022 (b, k, n)		5,201,232		5,142,323		5,201,232
HTI Technologies and Industries, Inc.	Electronic Component Manufacturing	Second Lien Note 12.0000% Cash, 3.7500% PIK, 9/15/2024 (b, k, n)		11,419,845		11,400,660		11,419,845
Initials, Inc.	Consumer Products	Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 06/23/2020 (b, h, k, n)		5,642,913		5,642,913		1,272,188
International Precision Components Corporation	Plastic Injection Molding	Second Lien Loan 12.0000% Cash, 3.5000% PIK, 10/3/2024 (b, k, n, u)		8,000,000		7,854,192		8,000,000
Jedson Engineering, Inc.	Engineering and Construction Management	First Lien Loan 12.0000% Cash, 3.0000% PIK, 06/21/2024 (b, k, n)		6,041,262		5,928,722		6,041,262
Legal Solutions Holdings, Inc.	Business Services	Senior Subordinated Debt 12.0000% Cash, 3.0000% PIK, 03/18/2020 (b, k, n)		12,182,950		12,182,950		12,182,950
Morey's Seafood International, LLC	Food Services	Second Lien Loan 10.0000% Cash, 3.0000% PIK, 08/12/2022 (b, k, n, q)		16,485,324		16,485,324		16,485,324
Powers Equipment Acquisition Company, LLC	Equipment Manufacturer	First Lien Note 13.5000% Cash, 04/30/2024 (k, n, v)		6,500,000		6,383,100		6,500,000
SMA Holdings, Inc.	Consulting	First Lien Loan 11.0000% Cash, 06/26/2024 (k, n)		7,000,000		6,426,640		6,530,794
		Warrants (d, n)		2		504,555		504,555
						6,931,195		7,035,349
Trientis GmbH	Environmental Services	First Lien Note 5.0000% PIK, 10/26/2024 (b, e, h, m, n, r)		1,248,632		1,248,632		176,906
		Warrants (d, e, r, n)		1		67,715		-
						1,316,347		176,906
Tuf-Tug Inc.	Safety Equipment Manufacturer	Second Lien Loan 11.0000% Cash, 2.0000% PIK,02/24/2024 (b, k, n)		4,985,284		4,947,047		5,035,136
		Common Stock (24.6 shares) (d, n, s)				750,000		778,210
						5,697,047		5,813,346
Turf Products, LLC	Distributor - Landscaping and Irrigation Equipment	Senior Subordinated Debt 10.0000% Cash, 08/07/2020 (k, n)		7,717,056		7,717,056		7,563,104
		Third Lien Loan 10.0000% Cash,08/07/2020 (k, n)		1,050,000		1,050,000		1,032,473
						8,767,056		8,595,577
U.S. Gas & Electric, Inc.	Energy Services	Second Lien Loan, 9.5000% Cash, 07/05/2025 (l, n)		37,527,881		37,527,881		36,974,616
U.S. Spray Drying Holding Company	Specialty Chemicals	Class B Common Stock (784 shares) (d, n)				5,488,000		1,800,000
		Secured Loan 12.0000% Cash, 04/30/2021 (k, n)		1,500,000		1,500,000		1,500,000
		Senior Secured Loan 12.0000% Cash, 04/30/2021 (k, n)		1,500,000		1,500,000		1,500,000
						8,488,000		4,800,000
United States Technologies, Inc.	Electronics Manufacturing and Repair	Senior Lien Loan 10.5000% Cash, 07/17/2020 (k, n)		5,500,000		5,497,954		5,500,000

Sub Total Non-control/Non-affiliated investments					$	246,228,807	$	229,322,498


Affiliate investments - 27.13% (a, c, f, g)
Advantage Insurance, Inc.	Insurance	Preferred Stock (750,000 shares) (d, e, n)				7,500,000		7,513,627
Equus Total Return, Inc.	Registered Investment Company	Common Stock (3,228,024 shares) (d, k)				7,524,035		4,874,316
JSC Tekers Holdings	Real Estate Management	Common Stock (3,201 shares) (d, e, n)				4,500		-
		Preferred Stock (9,159,085 shares) (d, e, n)				11,810,188		4,910,000
						11,814,688		4,910,000
Security Holdings B.V.	Electrical Engineering	Common Equity Interest (d, e, n)				51,204,270		33,607,000
		Bridge Loan 5.0000% PIK, 12/31/2019 (b, e, k, n)		4,937,218		4,937,218		4,937,218
		Senior Subordinated Loan 3.1000% PIK, 05/31/2020 (b, e, k, n)		6,009,735		6,009,735		6,009,735
						62,151,223		44,553,953

Sub Total Affiliate investments					$	88,989,946	$	61,851,896

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

~~MVC Capital, Inc.~~

~~Consolidated Schedule of Investments - (Continued)~~

~~October 31, 2018~~

Company

Industry

Investment

Principal

Cost

Fair Value/Market
Value

Control investments - 28.71% (c), (f), (g)

Equus Total Return, Inc.

Registered Investment Company

Common Stock (4,444,644 shares) (d), (k)

$
10,030,272

$
8,711,502

MVC Automotive Group GmbH

Automotive Dealerships

Common Equity Interest (a), (d), (e), (n)

51,185,015

18,901,000

Bridge Loan 6.0000% Cash, 06/30/2019 (a), (e), (k), (n)

$
7,149,166

7,149,166

7,149,166

58,334,181

26,050,166

MVC Private Equity Fund LP

Private Equity

Limited Partnership Interest (a), (d), (j), (k), (n)

11,452,452

19,971,526

General Partnership Interest (a), (d), (j), (k), (n)

292,154

501,050

11,744,606

20,472,576

RuMe Inc.

Consumer Products

Common Stock (5,297,548 shares) (a), (d), (n)

924,475

—

Series C Preferred Stock (23,896,634 shares) (a), (d), (n)

3,410,694

3,401,486

Series B-1 Preferred Stock (4,999,076 shares) (a), (d), (n)

999,815

1,741,362

Subordinated Debt 10.0000% PIK, 3/31/2020 (a), (b), (k), (n)

3,270,886

3,270,886

3,270,886

Revolver 10.0000% PIK, 3/31/2020 (a), (b), (k), (n)

1,450,000

1,450,000

1,450,000

Warrants (a), (d), (n)

2

336,393

—

10,392,263

9,863,734

Sub Total Control investments

$
90,501,322

$
65,097,978

TOTAL PORTFOLIO INVESTMENTS - 143.13% (f)

$
409,631,976

$
324,507,312

Cash equivalents - 0.34% (f), (g)

Fidelity Institutional Government Money Market Fund

Money Market Fund

Beneficial Shares (686,270 shares)

$
686,270

$
686,270

Morgan Stanley Institutional Liquidity Government Portfolio

Money Market Fund

Beneficial Shares (97,001 shares)

97,001

97,001

Total Cash equivalents

783,271

783,271

TOTAL INVESTMENT ASSETS - 143.47%

$
410,415,247

$
325,290,583

MVC Capital, Inc.
Consolidated Schedule of Investments - (Continued)
October 31, 2019

Company	Industry		Investment	Principal		Cost		Fair Value/Market Value
Control investments - 21.53% (c, f, g)
MVC Automotive Group GmbH	Automotive Dealerships		Common Equity Interest (a, d, e, n)			$	52,185,015	$	20,602,000
			Bridge Loan 6.0000% Cash, 12/31/2020 (a, e, k, n)	$	7,149,166		7,149,166		7,149,166
							59,334,181		27,751,166
MVC Private Equity Fund LP	Private Equity		Limited Partnership Interest (a, d, j, k, n)				9,034,881		12,252,382
			General Partnership Interest (a, d, j, k, n)				230,481		312,561
							9,265,362		12,564,943
RuMe Inc.	Consumer Products		Common Stock (5,297,548 shares) (a, d, n)				924,475		-
			Series C Preferred Stock (23,896,634 shares) (a, d, n)				3,410,694		1,462,857
			Series B-1 Preferred Stock (4,999,076 shares) (a, d, n)				999,815		-
			Subordinated Debt 10.0000% PIK, 3/31/2020 (a, b, k, n)		3,610,446		3,610,446		3,610,446
			Revolver 10.0000% PIK, 3/31/2021 (a, b, k, n)		2,075,613		2,075,613		2,075,613
		��	Revolver 10.0000% PIK, 2/28/2020 (a, b, k, n)		403,507		233,297		233,297
			Warrants (a, d, n)		3		594,544		1,372,379
							11,848,884		8,754,592

Sub Total Control investments						$	80,448,427	$	49,070,701


TOTAL PORTFOLIO INVESTMENTS - 149.26% (f)						$	415,667,180	$	340,245,095

Cash equivalents and restricted cash equivalents - 4.55% (f, g)
Fidelity Institutional Government Money Market Fund	Money Market Fund		Beneficial Shares (10,278,123 shares)			$	10,278,123	$	10,278,123
Morgan Stanley Institutional Liquidity Government Portfolio	Money Market Fund		Beneficial Shares (99,158 shares)				99,158		99,158
Total Cash equivalents							10,377,281		10,377,281

TOTAL INVESTMENT ASSETS - 153.81%						$	426,044,461	$	350,622,376

(b) These securities accrue a portion of their interest/dividends in ~~“payment~~"payment in ~~kind”~~kind" interest/dividends which is capitalized to the investment.

The Company makes available significant managerial assistance to all of the portfolio companies in which it has invested.

(d) Non-income producing assets.

(e) The principal operations of these portfolio companies are located in Europe ~~Canada,~~ and Puerto Rico which represents approximately ~~28%~~23% of the total assets. The remaining portfolio companies are located in United States which represents approximately ~~66%~~71% of the total assets.

(f) Percentages are based on net assets of ~~$226,723,446~~$227,958,684 as of October 31, ~~2018.~~2019.

(g) See Note 3 for further information regarding ~~“Investment~~"Investment Classification.”"

(h) All or a portion of the accrued interest on these securities have been reserved for.

(i) Legacy Investments.

(j) MVC Private Equity Fund, LP is a private equity fund focused on control equity investments in the lower middle market. The fund currently holds ~~four~~two investments, ~~three~~one located in the United States and one in Gibraltar, the investments are in the energy services ~~contract manufacturing,~~ and industrial sectors. The ~~Company’s~~Company owns 18.9% of the fund through its limited partnership interest and owns .5% of the fund through its general partnership interest. The Company's proportional share of ~~Plymouth Rock Energy membership interest, the~~ Gibdock Limited equity interest and loan, Advanced Oil Field Services, LLC common stock, preferred stock, and loan is $5,230,958 and ~~Focus Pointe preferred stock is $7,768,116, $4,577,362, $4,256,956 and $2,991,585,~~$3,433,612, respectively. The ~~Company’s~~Company's partnership interests in the MVC Private Equity Fund, LP are not redeemable.

(k) All or a portion of these securities may serve as collateral for the ~~Santander Credit Facility.~~People's United credit facility.

(l) U.S. Gas & Electric, Inc. is an indirect subsidiary of ~~Crius~~Vistra Energy ~~Trust.~~(NYSE: VST)

(m) Cash/PIK toggle at ~~borrower’s~~borrower's option

(n) These securities are valued using unobservable inputs.

(o) Variable rate between 10.5000% and 11.5000% cash.

(p) 12% Cash and 0-4% PIK based on Funded Debt to EBITDA. 4% PIK initially.

(q) 10% Cash and 3% PIK beginning ~~October~~July 1, ~~2018.~~2019.

(r) During the fiscal year ended October 31, 2018, all assets and liabilities of SGDA Europe were transferred to a new Austrian holding company, Trientis GmbH, to achieve operating efficiencies.

(s) Shares of Tuf-Tug, Inc. are held via Alitus T-T, LP.

(t) Shares of GTM Intermediate Holdings, Inc. are held via GTM Ultimate Holdings, LLC.

(u) Variable PIK rate between 2.0000% and 3.5000%.

(v) Variable cash rate between 10.5000% and 13.5000%.

PIK - Payment-in-kind

- Denotes zero cost or fair value.

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

MVC Capital, Inc. (the “Company”)

Notes to Consolidated Financial Statements

~~July 31, 2019~~April 30, 2020

(Unaudited)

11.. Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. Certain amounts, when applicable, have been reclassified to adjust to current period presentations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included as required by Regulation S-X, Rule 10-01. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, ~~2018,~~2019, filed with the U.S. Securities and Exchange Commission (the “SEC”). As the Company is an investment company, (as defined by the Investment Company Act of 1940 (the “1940 Act”)), management follows investment company accounting and reporting guidance ofFinancial Accounting Standards Board (“FASB”) 946-Investment Companies, which is accounting principles generally accepted in the United States of America (“GAAP”).

2. Consolidation

On July 16, 2004, the Company formed a wholly-owned subsidiary, MVC Financial Services, Inc. (“MVCFS”). MVCFS is incorporated in Delaware and its principal purpose is to provide advisory, administrative and other services to the Company, the Company’s portfolio companies and other entities. MVCFS had opening equity of $1 (100 shares at $0.01 per share). The Company does not hold MVCFS for investment purposes and does not intend to sell MVCFS.

On October 14, 2011, the Company formed a wholly-owned subsidiary, MVC Cayman, an exempted company incorporated in the Cayman Islands, to hold certain of its investments and to make certain future investments. The results of MVCFS and MVC Cayman are consolidated into the Company’s financial statements and all inter-company accounts have been eliminated in consolidation. Of the ~~$21.9~~$50.6 million in cash and cash equivalents on the Company’s Consolidated Balance Sheets as of ~~July 31, 2019,~~April 30, 2020, approximately $1.1 million was held by MVC Cayman.

During fiscal year ended October 31, 2012 and thereafter, MVC Partners, LLC (“MVC Partners”) was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in the MVC Private Equity Fund, L.P. (“PE Fund”) is a substantial portion of MVC Partners operations. Previously, MVC Partners was presented as a portfolio company on the Consolidated Schedule of Investments. The consolidation of MVC Partners has not had any material effect on the financial position or net results of operations of the Company. There are additional disclosures resulting from this consolidation.

MVC GP II, LLC (“MVC GP II”), an indirect wholly-owned subsidiary of the Company, serves as the general partner of the PE Fund. MVC GP II is wholly-owned by MVCFS, a subsidiary of the Company. The results of MVC GP II are consolidated into MVCFS and ultimately the Company. All inter-company accounts have been eliminated in consolidation.

3.Investment Classification

As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are investments in those companies that we are deemed to “Control.” “Affiliate Investments” are investments in those companies that are “Affiliated Companies” of us, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments. Generally, under that 1940 Act, we are deemed to control a company in which we have invested if we own 25% or more of the voting securities of such company. We are

deemed to be an affiliate of a company in which we have invested if we own 5% or more and less than 25% of the voting securities of such company.

Investment Transactions and Related Operating Income – Investment transactions and related revenues and expenses are accounted for on the trade date. The cost of securities sold is determined on a first-in, first-out basis, unless otherwise specified. Dividend income and distributions on investment securities is recorded on the ex-dividend date. The tax characteristics of such distributions received from our Portfolio Companies will be determined by whether or not the distribution was made from the investment's current taxable earnings and profits or accumulated taxable earnings and profits from prior years. Interest income, which includes accretion of discount and amortization of premium, if applicable, is recorded on the accrual basis to the extent that such amounts are expected to be collected. Fee income includes fees for guarantees and services rendered by the Company or its wholly-owned subsidiary to Portfolio Companies and other third parties such as due diligence, structuring, transaction services, monitoring services, and investment advisory services. Guaranty fees are recognized as income over the related period of the guaranty. Due diligence, structuring, and transaction services fees are generally recognized as income when services are rendered or when the related transactions are completed. Monitoring and investment advisory services fees are generally recognized as income as the services are rendered. Any fee income determined to be loan origination fees is accreted into income over the respective terms of the applicable loans and any original issue discount and market discount are capitalized and then amortized into income using the effective interest method. Upon the prepayment of a loan or debt security, any unamortized original issue discount or market discount is recorded as interest income. For investments with PIK interest and dividends, we base income and dividend accrual on the valuation of the PIK notes or securities received from the borrower. If the value of the PIK notes or securities of a portfolio company is not sufficient to cover the contractual interest or dividend, the Company does not accrue interest or dividend income on the notes or securities.

The functional currency of the Company is the U.S. Dollar. Assets and liabilities denominated in a currency other than the U.S. Dollar are translated into U.S. Dollars at the closing rates of exchange on the date of determination. Purchases and sales of investments and income and expenses denominated in currencies other than U.S. Dollars are translated at the rates of exchange on the respective dates of the transactions. The resulting gains and losses from such currency translation are included in the Consolidated Statement of Operations. The Company does not isolate the portion of the results of operations resulting from the changes in foreign exchange rates on investments from the fluctuation arising from changes in fair values of securities held. Such fluctuations are included with the Net Realized and Unrealized Gain (Loss) on Investments and foreign currency in the Consolidated Statement of Operations.

4. Cash and Cash Equivalents

For the purpose of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, the Company considers all money ~~mark~~etmarket and all highly liquid temporary cash investments purchased with an original maturity of less than three months to be cash equivalents. The Company places its cash and cash equivalents with financial institutions and cash held in bank accounts may exceed the Federal Deposit Insurance Corporation ~~(“FDIC”~~("FDIC") insured limit. As of ~~July~~April 30, 2020, the Company had approximately $45.4 million in cash equivalents, approximately $3.5 million in restricted cash equivalents, approximately $1.5 million in restricted cash and approximately $174,000 in cash totaling approximately $50.6 million. Of the approximately $45.4 million in cash equivalents, approximately $1.1 million was held by MVC Cayman. As of October 31, 2019, the Company had approximately ~~$15.2~~$5.4 million in cash equivalents, approximately $5.0 million in restricted cash equivalents and approximately ~~$1.7~~$1.3 million in cash totaling approximately ~~$21.9~~$11.7 million. Of the ~~$1.7~~approximately $1.3 million in cash and the ~~$15.2~~approximately $5.4 million in cash equivalents, approximately $1.0 million and ~~$100,000,~~$99,000, respectively, was held by MVC Cayman. As of October 31, 2018, the Company had approximately $783,000 in cash equivalents, approximately $5.3 million in restricted cash and approximately $9.8 million in cash totaling approximately $15.9 million. Of the $9.8 million in cash and $783,000 in cash equivalents, approximately $1.0 million and $100,000, respectively, was held by MVC Cayman.

Restricted Cash and Cash Equivalents

Cash and cash equivalent accounts that are not available to the Company for ~~day—~~day–to-day use and are legally restricted are classified as restricted cash and ~~restricted~~ cash equivalents. Restricted cash and cash equivalents are carried at cost, which approximates fair value. As of October 31, 2018, there was a $300,000 letter of credit for RuMe provided by a third party financial institution that MVC collateralized with cash, that was classified as restricted cash on the Company’s Consolidated Balance Sheets. Also, as of October 31, 2018April 30, 2020 and ~~July~~October 31, 2019, the Company had restricted cash or cash equivalents of approximately $5.0 million related to the compensating balance requirement for Credit Facility ~~III and Credit Facility~~ IV (defined below)~~, respectively.~~.

5. Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (Topic 606). ASU 2014-09 addresses the reporting of revenue by most entities and will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, theJune 2016, FASB issued ASU ~~2015-14~~2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. In addition, ASU 2016-13 requires credit losses relating to available-for-sale debt securities to be recorded through an allowance for credit losses. The amendments in ASU 2016-13 broaden the information that ~~defers the effective date of ASU 2014-09~~an entity must consider in developing its expected credit loss estimate for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods therein. Early application is not permitted for public business entities. On December 27, 2016, the FASB issued ASU 2016-20 to make various amendments to Topic 606, going into effect for years beginning after December 15, 2017.assets measured either collectively or individually. The new standard impacted the fair value of the PE Fund’s LP interest due to the exclusion of the Company’s portion of the carried interest associated with the PE Fund. This update has had no material impact on our financial statements.

In August 2014, FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). The standard requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. ASU 2014-15 is effective for ~~annual periods ending after December 15, 2016, and for annual and interim periods thereafter, and early adoption is permitted. This update has had no impact on our financial statements.~~

In February 2015, the FASB issued Accounting Standards Update 2015-02, which updated consolidation standards under ASC Topic 810, “Consolidation”. Under this update, a new consolidation analysis is required for variable interest entities (“VIEs”) and will limit the circumstances in which investment managers and similar entities are required to consolidate the entities that they manage. The FASB decided to eliminate some of the criteria under which their fees are considered a variable interest and limit the circumstances in which

variable interests in a VIE held by related parties of a reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. This update has had no impact on our financial statements.

In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). The new guidance removes the requirement that investments for which NAV is determined based on practical expedient reliance be reported utilizing the fair value hierarchy. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. This update has had no material impact on our financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows — Classification of Certain Cash Receipts and Cash Payments (Topic 230). The amendments provide guidance on eight specific cash flow issues in how certain cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing the existing diversity in practice. The amendments are effective for all entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, ~~2017. Early~~2019. The Company does not expect the adoption ~~is permitted. This update has had no material impact on our financial statements.~~

~~In October 2016, the FASB issued~~of ASU ~~2016-17,~~2016-13 to ~~amend the consolidation guidance on how~~have a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The ASU is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. This update has had no impact on our financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The ASU is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. This update has had no material impact on our financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurements. The amendments require new disclosures of changes in unrealized gains and losses in other comprehensive income for recurring Level 3 fair value of instruments held at balance sheet date and the range and weighted average of significant unobservable inputs for recurring and nonrecurring Level 3 fair values. Certain disclosures are being eliminated such as the valuation process required for Level 3 fair value measurements, the policy for timing of transfers between levels and amounts of and reason for transfers between Levels 1 and 2. The ASU is effective for public business entities for fiscal years and interim periods beginning after December 15, 2019. The Company does not expect the adoption of ASU 2018-13 to have a material impact on our financial statements.

In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to related Party Guidance for Variable Interest Entities. The guidance supersedes the private company alternative for common control leasing arrangements issued in 2014 and expands it to all qualifying common control arrangements. Also under the guidance, a private company could make an accounting policy election to not apply VIE guidance to legal entities under common control (including common control leasing arrangements) when certain criteria are met. Additionally, a private company electing the alternative is required to provide detailed disclosures about its involvement with, and exposure to, the legal entity under common control. The ASU also amends the guidance for determining whether a decision-making fee is a variable interest. The amendments require organizations to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in GAAP). The ASU is effective for public business entities for fiscal years and

interim periods beginning after December 15, 2019. The Company does not expect the adoption of ASU 2018-17 to have a material impact on our financial statements.

6. Investment Valuation Policy

Our investments are carried at fair value in accordance with the Accounting Standards Codification,Fair Value Measurement(“ASC 820”). In accordance with the 1940 Act, unrestricted minority-owned publicly traded securities for which market quotations are readily available are valued at the closing market quote on the valuation date and majority-owned publicly traded securities and other privately held securities are valued as determined in good faith by the Valuation Committee of our Board of Directors. For legally or contractually restricted securities of companies that are publicly traded, the value is based on the closing market quote on the valuation date minus a discount for the restriction. At ~~July 31, 2019,~~April 30, 2020, we did not own restricted or unrestricted securities of any publicly traded company in which we have a majority-owned interest, but did own ~~two securities~~one security in which we have minority-owned interests.

ASC 820 provides a framework for measuring the fair value of assets and liabilities and provides guidance regarding a fair value hierarchy that prioritizes information used to measure value. In determining fair value, the Valuation Committee primarily uses the level 3 inputs referenced in ASC 820.

ASC 820 defines fair value in terms of the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The price used to measure the fair value is not adjusted for transaction costs while the cost basis of our investments may include initial transaction costs. Under ASC 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset. The principal market is the market in which the reporting entity would sell or transfer the asset with the greatest volume and level of activity for the asset to which the reporting entity has access to as of the measurement date. If no market for the asset exists or if the reporting entity does not have access to the principal market, the reporting entity should use a hypothetical market.

Valuation Methodology

Pursuant to the requirements of the 1940 Act and in accordance with ASC 820, we value our portfolio securities at their current market values or, if market quotations are not readily available, at their estimates of fair values. Because our portfolio investments generally do not have readily ascertainable market values, we record these investments at fair value in accordance with our Valuation Procedures adopted by the Board of Directors, which are consistent with ASC 820. As permitted by the SEC, the Board of Directors has delegated the responsibility of making fair value determinations to the Valuation Committee, subject to the Board of ~~Directors’~~Directors' supervision and pursuant to our Valuation Procedures. Our Board of Directors may also hire independent consultants to review our Valuation Procedures or to conduct an independent valuation of one or more of our portfolio investments.

Pursuant to our Valuation Procedures, the Valuation Committee (which is comprised of three Independent Directors) determines fair values of portfolio company investments on a quarterly basis (or more frequently, if deemed appropriate under the circumstances). In doing so, the Committee considers the recommendations of The Tokarz Group Advisers LLC (“TTG Advisers”). The Committee also takes into account input and reviews by third party consultants retained to support the Company’s valuation process. The Company has also adopted several other enhanced processes related to valuations of controlled/affiliated portfolio companies. Any changes in valuation are recorded in the consolidated statements of operations as ~~“Net~~"Net unrealized appreciation (depreciation) on investments.”"

Currently, our NAV per share is calculated and published on a quarterly basis. The Company calculates our NAV per share by subtracting all liabilities from the total value of our portfolio securities and other assets and dividing the result by the total number of outstanding shares of our common stock on the date of valuation. Fair values of foreign investments reflect exchange rates, as applicable, in effect on the last business day of the quarter end. Exchange rates fluctuate on a daily basis, sometimes significantly. Exchange rate fluctuations

following the most recent quarter end are not reflected in the valuations reported in this Quarterly Report. See Item 1A Risk Factor, ~~“Investments~~"Investments in foreign debt or equity may involve significant risks in addition to the risks inherent in U.S. investments.”"

At ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, approximately ~~90.3%~~78.3% and ~~86.5%~~92.6%, respectively, of total assets represented investments in portfolio companies recorded at fair value (“("Fair Value ~~Investments”~~Investments").

Under most circumstances, at the time of acquisition, Fair Value Investments are carried at cost (absent the existence of conditions warranting, in ~~management’s~~management's and the Valuation ~~Committee’s~~Committee's view, a different initial value). During the period that an investment is held by the Company, its original cost may cease to approximate fair value as the result of market and investment specific factors. No pre-determined formula can be applied to determine fair value. Rather, the Valuation Committee analyzes fair value measurements based on the value at which the securities of the portfolio company could be sold in an orderly disposition over a reasonable period of time between willing parties, other than in a forced or liquidation sale. The liquidity event whereby the Company ultimately exits an investment is generally the sale, the merger, the recapitalization of a portfolio company or by a public offering of its securities.

There is no one methodology to determine fair value and, in fact, for any portfolio security, fair value may be expressed as a range of values, from which the Company derives a single estimate of fair value. To determine the fair value of a portfolio security, the Valuation Committee analyzes the portfolio ~~company’s~~company's financial results and projections, publicly traded comparable companies when available, comparable private transactions when available, precedent transactions in the market when available, third-party real estate and asset appraisals if appropriate and available, discounted cash flow analysis, if appropriate, as well as other factors. The Company generally requires, where practicable, portfolio companies to provide annual audited and more regular unaudited financial statements, and/or annual projections for the upcoming fiscal year.

The fair value of our portfolio securities is inherently subjective. Because of the inherent uncertainty of fair valuation of portfolio securities and escrow receivables that do not have readily ascertainable market values, our estimate of fair value may significantly differ from the fair value that would have been used had a ready market existed for the securities. Such values also do not reflect ~~brokers’~~brokers' fees or other selling costs, which might become payable on disposition of such investments.

If a security is publicly traded, the fair value is generally equal to market value based on the closing price on the principal exchange on which the security is primarily traded unless restricted and a restricted discount is applied.

For equity securities of portfolio companies, whose securities are not publicly traded, the Valuation Committee estimates the fair value based on market and/or income approach with value then attributed to equity or equity like securities using the enterprise value waterfall (“("Enterprise Value ~~Waterfall”~~Waterfall") valuation methodology. Under the Enterprise Value Waterfall valuation methodology, the Valuation Committee estimates the enterprise fair value of the portfolio company and then waterfalls the enterprise value over the portfolio ~~company’s~~company's securities in order of their preference relative to one another. To assess the enterprise value of the portfolio company, the Valuation Committee weighs some or all of the traditional market valuation methods and factors based on the individual circumstances of the portfolio company in order to estimate the enterprise value. The methodologies for performing assets may be based on, among other things: valuations of comparable public companies, recent sales of private and public comparable companies, discounting the forecasted cash flows of the portfolio company, third party valuations of the portfolio company, considering offers from third parties to buy the company, estimating the value to potential strategic buyers and considering the value of recent investments in the equity securities of the portfolio company, and third-party asset and real estate appraisals. For non-performing assets, the Valuation Committee may estimate the liquidation or collateral value of the portfolio ~~company’s~~company's assets. The Valuation Committee also takes into account historical and anticipated financial results.

The Company does not utilize hedge accounting and instead, when applicable, marks its derivatives to market on the Company’s consolidated statement of operations.

In assessing enterprise value, the Valuation Committee considers the mergers and acquisitions (“("M~~&A”~~&A") market as the principal market in which the Company would sell its investments in portfolio companies under circumstances where the Company has the ability to control or gain control of the board of directors of the portfolio company (“("Control ~~Companies”~~Companies"). This approach is consistent with the principal market that the Company would use for its portfolio companies if the Company has the ability to initiate a sale of the portfolio company as of the measurement date, i.e., if it has the ability to control or gain control of the board of directors of the portfolio company as of the measurement date. In evaluating if the Company can control or gain control of a portfolio company as of the measurement date, the Company takes into account its equity securities on a fully diluted basis, as well as other factors.

For Non-Control Companies, consistent with ASC 820, the Valuation Committee considers a hypothetical secondary market as the principal market in which it would sell investments in those companies. The Company also considers other valuation methodologies such as the Option Pricing Method and liquidity preferences when valuing minority equity positions of a portfolio company.

For loans and debt securities of Non-Control Companies (for which the Valuation Committee has identified the hypothetical secondary market as the principal market), the Valuation Committee determines fair value based on the assumptions that a hypothetical market participant would use to value the security in a current hypothetical sale using a market yield (“("Market ~~Yield”~~Yield") valuation methodology. In applying the Market Yield valuation methodology, the Valuation Committee determines the fair value based on such factors as third party broker quotes (if available) and market participant assumptions, including synthetic credit ratings, estimated remaining life, current market yield and interest rate spreads of similar securities as of the measurement date.

Estimates of average life are generally based on market data of the average life of similar debt securities. However, if the Valuation Committee has information available to it that the debt security is expected to be repaid in the near term, the Valuation Committee would use an estimated life based on the expected repayment date.

The Valuation Committee determines fair value of loan and debt securities of Control Companies based on the estimate of the enterprise value of the portfolio company. To the extent the enterprise value exceeds the remaining principal amount of the loan and all other debt securities of the company, the fair value of such securities is generally estimated to be their cost. However, where the enterprise value is less than the remaining principal amount of the loan and all other debt securities, the Valuation Committee may discount the value of such securities to reflect an impairment.

For the ~~Company’s~~Company's or its ~~subsidiary’s~~subsidiary's investment in the PE Fund, for which an indirect wholly-owned subsidiary of the Company serves as the general partner (the ~~“GP”~~"GP") of the PE Fund, the Valuation Committee relies on the ~~GP’s~~GP's determination of the fair value of the PE Fund which will be generally valued, as a practical expedient, utilizing the net asset valuations provided by the GP, which will be made: (i) no less frequently than quarterly as of the ~~Company’s~~Company's fiscal quarter end and (ii) with respect to the valuation of PE Fund investments in portfolio companies, will be based on methodologies consistent with those set forth in the Company’s Valuation Procedures. In making its determinations, the GP considers and generally relies on TTG Advisers’ recommendations. The determination of the net asset value of the Company’s or its subsidiary’s investment in the PE Fund will follow the methodologies described for valuing interests in private investment funds (“Investment Vehicles”) described below. Additionally, when both the Company and the PE Fund hold investments in the same portfolio company, the ~~GP’s~~GP's Fair Value determination shall be based on the Valuation ~~Committee’s~~Committee's determination of the Fair Value of the ~~Company’s~~Company's portfolio security in that portfolio company.

As permitted under GAAP, the Company’s interests in private investment funds are generally valued, as a practical expedient, utilizing the net asset valuations provided by management of the underlying Investment Vehicles, without adjustment, unless TTG Advisers is aware of information indicating that a value reported does not accurately reflect the value of the Investment Vehicle, including any information showing that the valuation has not been calculated in a manner consistent with GAAP. Net unrealized appreciation (depreciation) of such investments is recorded based on the Company’s proportionate share of the aggregate

amount of appreciation (depreciation) recorded by each underlying Investment Vehicle. The Company’s proportionate investment interest includes its share of interest and dividend income and expense, and realized and unrealized gains and losses on securities held by the underlying Investment Vehicles, net of operating expenses and fees. Realized gains and losses on distributions from Investment Vehicles are generally recognized on a first in, first out basis.

The Company applies the practical expedient to interests in Investment Vehicles on an investment by investment basis, and consistently with respect to the Company’s entire interest in an investment. The Company may adjust the valuation obtained from an Investment Vehicle with a premium, discount or reserve if it determines that the net asset value is not representative of fair value.

If the Company intends to sell all or a portion of its interest in an Investment Vehicle to a third-party in a privately negotiated transaction near the valuation date, the Company will consider offers from third parties to buy the interest in an Investment Vehicle in valuations, which may be discounted for both probability of close and time.

When the Company receives nominal cost warrants or free equity securities (“("nominal cost ~~equity”~~equity") with a debt security, the Company typically allocates its cost basis in the investment between debt securities and nominal cost equity at the time of origination. If the Company is not reimbursed for investment or transaction related costs at the time an investment is made, the Company typically capitalizes those costs to the cost basis of the investment.

Interest income, adjusted for amortization of premium and accretion of discount on a yield to maturity methodology, is recorded on an accrual basis to the extent that such amounts are expected to be collected. Origination and/or closing fees associated with investments in portfolio companies are accreted into income over the respective terms of the applicable loans. Upon the prepayment of a loan or debt security, any unamortized original issue discount or market discount is recorded as interest income. Prepayment premiums are recorded on loans when received as interest income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that the Company expects to collect such amounts.

For loans, debt securities, and preferred securities with contractual payment-in-kind interest or dividends, which represent contractual interest/dividends accrued and added to the loan balance or liquidation preference that generally becomes due at maturity, the Company will not ascribe value to payment-in-kind interest/dividends, if the portfolio company valuation indicates that the payment-in-kind interest is not collectible. However, the Company may ascribe value to payment-in-kind interest if the health of the portfolio company and the underlying securities are not in question. All payment-in-kind interest that has been added to the principal balance or capitalized is subject to ratification by the Valuation Committee. For interest or deferred interest receivables purchased by the Company at a discount to their outstanding amount, the Company amortizes the discount using the effective yield method and records it as interest income over the life of the loan. The Company will not ascribe value to the interest or deferred interest, if the Company has determined that the interest is not collectible.

Escrows from the sale of a portfolio company are generally valued at an amount, which may be expected to be received from the buyer under the ~~escrow’s~~escrow's various conditions and discounted for both risk and time.

ASC 460,Guarantees, requires the Company to estimate the fair value of the guarantee obligation at its inception and requires the Company to assess whether a probable loss contingency exists in accordance with the requirements of ASC 450, Contingencies. The Valuation Committee typically will look at the pricing of the security in which the guarantee provided support for the security and compare it to the price of a similar or hypothetical security without guarantee support. The difference in pricing will be discounted for time and risk over the period in which the guarantee is expected to remain outstanding.

Reclassifications—– Certain amounts from prior years have been reclassified to conform to the current year presentation.

7. Concentration of Market Risk

Financial instruments that subjected the Company to concentrations of market risk consisted principally of equity investments, subordinated notes, debt instruments and escrow receivables (other than cash equivalents), which collectively represented approximately ~~92.2%~~79.5% and ~~93.8%~~94.3% of the ~~Company’s~~Company's total assets at ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, respectively. As discussed in Note 8, these investments consist of securities in companies with no readily determinable market values and as such are valued in accordance with the ~~Company’s~~Company's fair value policies and procedures. The ~~Company’s~~Company's investment strategy represents a high degree of business and financial risk due to the fact that the Company’s portfolio investments (other than cash equivalents) are generally illiquid, in small and middle market companies, and include foreign investments (which subject the Company to additional risks such as currency, geographic, demographic and operational risks), entities with little operating history or entities that possess operations in new or developing industries. These investments, should they become publicly traded, would generally be (i) subject to restrictions on resale, if they were acquired from the issuer in private placement transactions; and (ii) susceptible to market risk.Additionally, we are classified as a non-diversified investment company within the meaning of the 1940 Act, and therefore may invest a significant portion of our assets in a relatively small number of portfolio companies, which gives rise to a risk of significant loss should the performance or financial condition of one or more portfolio companies deteriorate. As of ~~July 31, 2019,~~April 30, 2020, the fair value of our largest investment, ~~Security Holdings B.V.~~Custom Alloy Corporation (“~~Security Holdings”~~Custom Alloy”), comprised ~~12.0%~~12.3% of our total assets and ~~19.4%~~18.9% of our net assets. The ~~Company’s~~Company's investments in short-term securities are generally in U.S. government securities, with a maturity of greater than three months but generally less than one year or other high quality and highly liquid investments. The Company considers all money market and other cash investments purchased with an original maturity of less than three months to be cash equivalents.

The following table shows the portfolio composition by industry grouping at fair value as a percentage of net assets as of ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018.~~2019.

July 31, 2019

October 31, 2018

Electrical Engineering

19.42
%
18.06
%
Manufacturer of Pipe Fittings

17.12
%
12.98
%
Energy Services

16.60
%
24.36
%
Automotive Dealerships

11.59
%
11.49
%
Food Services

7.20
%
7.27
%
Supply Chain Equipment Manufacturer

6.58
%
6.62
%
Business Services

5.31
%
5.26
%
Private Equity

5.26
%
9.03
%
Electronics Component Manufacturing

4.96
%
4.36
%
Consumer Products

4.73
%
5.53
%
Distributor - Landscaping and Irrigation Equipment

3.77
%
3.72
%
Equipment Rental

3.74
%
3.34
%
Plastic Injection Molding

3.51
%
0.00
%
Insurance

3.47
%
3.90
%
Consulting

3.08
%
0.00
%
Equipment Manufacturer

2.85
%
0.00
%
Information Technology Products and Services

2.75
%
2.70
%
Engineering and Consulting Management

2.63
%
0.00
%
Regulated Investment Company

2.61
%
3.84
%
Medical Equipment Manufacturer

2.55
%
0.00
%
Technology Investment - Financial Services

2.54
%
2.20
%
Safety Equipment Manufacturer

2.50
%
2.49
%
Electronics Manufacturing and Repair

2.41
%
2.43
%
Specialty Chemicals

2.32
%
3.70
%
Government Services

2.27
%
2.27
%
Welding Equipment Manufacturer

1.98
%
1.95
%
Real Estate Management

1.83
%
1.80
%
Software

1.65
%
1.65
%
Defense/Aerospace Parts Manufacturing

1.58
%
1.62
%
Environmental Services

0.11
%
0.56
%

148.92
%
143.13
%

	April 30, 2020			October 31, 2019
Manufacturer of Pipe Fittings		18.86	%		17.62	%
Electrical Engineering		17.06	%		19.55	%
Automotive Dealerships		11.48	%		12.17	%
Technology Investment - Financial Services		6.12	%		2.79	%
Electronics Component Manufacturing		5.64	%		5.01	%
Business Services		5.11	%		5.34	%
Private Equity		4.70	%		5.51	%
Equipment Rental		4.41	%		3.74	%
Plastic Injection Molding		4.22	%		3.51	%
Distributor - Landscaping and Irrigation Equipment		4.02	%		3.77	%
Consulting		3.79	%		3.09	%
Engineering and Construction Management		3.70	%		2.65	%
Medical Equipment Manufacturer		3.36	%		2.56	%
Consumer Products		3.04	%		4.40	%
Safety Equipment Manufacturer		3.03	%		2.55	%
Electronics Manufacturing and Repair		2.76	%		2.41	%
Government Services		2.69	%		2.28	%
Equipment Manufacturer		2.66	%		2.85	%
Insurance		2.64	%		3.30	%
Welding Equipment Manufacturer		2.44	%		1.99	%
Real Estate Management		2.43	%		2.15	%
Specialty Chemicals		2.13	%		2.11	%
Regulated Investment Company		1.96	%		2.14	%
Energy Services		1.71	%		16.22	%
Marketing		1.60	%		1.32	%
Environmental Services		0.11	%		0.08	%
Supply Chain Equipment Manufacturer		0.00	%		6.58	%
Information Technology Products and Services		0.00	%		2.77	%
Food Services		0.00	%		7.23	%
Defense/Aerospace Parts Manufacturing		0.00	%		1.57	%
		121.67	%		149.26	%

The following table shows the portfolio composition by geographic region at fair value as a percentage of total assets as of ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018.~~2019.

	July 31, 2019		October 31, 2018		April 30, 2020			October 31, 2019
Southeast	22.01	%	21.46	%
Northeast	20.83	%	20.81	%		22.96	%		21.57	%
Europe	20.35	%	20.59	%		20.32	%		21.37	%
Southeast						14.11	%		21.18	%
Midwest	16.46	%	13.45	%		11.56	%		17.69	%
West	7.55	%	6.28	%		7.58	%		7.72	%
Puerto Rico						1.73	%		2.07	%
Southwest	2.58	%	3.82	%		1.28	%		2.34	%
Puerto Rico	2.14	%	2.55	%
Canada	0.00	%	4.54	%
	91.92	%	93.50	%		79.54	%		93.94	%

8. Portfolio Investments

Pursuant to the requirements of the 1940 Act and ASC 820, we value our portfolio securities at their current market values or, if market quotations are not readily available, at their estimated fair values. Because our portfolio company investments generally do not have readily ascertainable market values, we record these investments at fair value in accordance with Valuation Procedures adopted by our Board of Directors. As

permitted by the SEC, the Board of Directors has delegated the responsibility of making fair value determinations to the Valuation Committee, subject to the Board of ~~Directors’~~Directors' supervision and pursuant to our Valuation Procedures.

The levels of fair value inputs used to measure our investments are characterized in accordance with the fair value hierarchy established by ASC 820. Where inputs for an asset or liability fall in more than one level in the fair value hierarchy, the investment is classified in its entirety based on the lowest level input that is significant to that ~~investment’s~~investment's fair value measurement. We use judgment and consider factors specific to the investment in determining the significance of an input to a fair value measurement. The three levels of the fair value hierarchy and investments that fall into each of the levels are described below:

·~~Level 1:~~ Level 1 inputs are unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We use Level 1 inputs for investments in publicly traded unrestricted securities for which we do not have a controlling interest. Such investments are valued at the closing price on the measurement date. We valued two of our investments using Level 1 inputs as of July 31, 2019.
• Level 1: Level 1 inputs are unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We use Level 1 inputs for investments in publicly traded unrestricted securities for which we do not have a controlling interest. Such investments are valued at the closing price on the measurement date. We valued one of our investments using Level 1 inputs as of April 30, 2020.
•
Level 2: Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly or other inputs that are observable or can be corroborated by observable market data.
• Level 3: Level 3 inputs are unobservable and cannot be corroborated by observable market data. We use Level 3 inputs for measuring the fair value of the vast majority of our investments. See Note 6 “Investment Valuation Policy” for the investment valuation policies used to determine the fair value of these investments.

·~~Level 2:~~ Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly or other inputs that are observable or can be corroborated by observable market data. Additionally, the Company’s interests in Investment Vehicles that can be withdrawn by the Company at the net asset value reported by such Investment Vehicle as of the measurement date or within six months of the measurement date are generally categorized as Level 2 investments.

·~~Level 3:~~ Level 3 inputs are unobservable and cannot be corroborated by observable market data. Additionally, included in Level 3 are the Company’s interests in Investment Vehicles from which the Company cannot withdraw at the net asset value reported by such Investment Vehicles as of the measurement date or within six months of the measurement date. We use Level 3 inputs for measuring the fair value of the vast majority of our investments. See Note 6 “Investment Valuation Policy” for the investment valuation policies used to determine the fair value of these investments.

~~As noted above, the interests in Investment Vehicles are included in Level 3 of the fair value hierarchy.~~ In determining the appropriate level, the Company considers the length of time until the investment is redeemable, including notice and lock-up periods and any other restriction on the disposition of the investment. The Company also considers the nature of the portfolios of the underlying Investment Vehicles and such vehicles’ ability to liquidate their investment.

The following fair value hierarchy tables set forth our investment related assets and (liabilities) by level as of ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018~~2019 (in thousands):

	July 31, 2019												April 30, 2020
	Level 1		Level 2		Level 3			Investment measured at NAV		Total			Level 1		Level 2		Level 3			Investment measured at NAV		Total
Senior/Subordinated Loans and credit facilities	$	—	$	—	$	241,666		$	—	$	241,666		$	-	$	-	$	156,642		$	-	$	156,642
Common Stock	5,946		—		3,816			—		9,762				3,648		-		2,927			-		6,575
Preferred Stock	—		—		21,316			—		21,316				-		-		20,831			-		20,831
Warrants	—		—		1,457			—		1,457				-		-		1,402			-		1,402
Common Equity Interest	—		—		53,205			—		53,205				-		-		32,143			-		32,143
LP Interest of the PE Fund	—		—		—			11,701		11,701				-		-		-			8,514		8,514
GP Interest of the PE Fund	—		—		—			298		298				-		-		-			218		218
Guarantees and letters of credit	—		—		(849		)	—		(849		)		-		-		(882	)		-		(882	)
Escrow Receivable	—		—		1,085			—		1,085				-		-		-			-		-
Short-term investments	—		—		—			—		—				-		-		-			-		-
Total	$	5,946	$	—	$	321,696		$	11,999	$	339,641		$	3,648	$	-	$	213,063		$	8,732	$	225,443

	October 31, 2018												October 31, 2019
	Level 1		Level 2		Level 3			Investment measured at NAV		Total			Level 1		Level 2		Level 3			Investment measured at NAV		Total
Senior/Subordinated Loans and credit facilities	$	—	$	—	$	175,781		$	—	$	175,781		$	-	$	-	$	242,177		$	-	$	242,177
Common Stock	24,457		—		6,150			—		30,607				4,874		-		3,344			-		8,218
Preferred Stock	—		—		47,060			—		47,060				-		-		20,238			-		20,238
Warrants	—		—		401			—		401				-		-		2,837			-		2,837
Common Equity Interest	—		—		50,186			—		50,186				-		-		54,209			-		54,209
LP Interest of the PE Fund	—		—		—			19,972		19,972				-		-		-			12,253		12,253
GP Interest of the PE Fund	—		—		—			501		501				-		-		-			313		313
Guarantees and letters of credit	—		—		(2,867		)	—		(2,867		)		-		-		(727	)		-		(727	)
Escrow Receivable	—		—		969			—		969				-		-		1,135			-		1,135
Short-term investments														-		-		-			-		-
Total	$	24,457	$	—	$	277,680		$	20,473	$	322,610		$	4,874	$	-	$	323,213		$	12,566	$	340,653

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur. During the ~~nine~~six month period ended ~~July 31, 2019~~April 30, 2020 and the year ended October 31, ~~2018,~~2019, there were no transfers in or out of Level 1 or 2.

The following tables set forth a summary of changes in the fair value of investment related assets and liabilities measured using Level 3 inputs for the ~~nine~~six month ~~periods~~period ended ~~July 31,~~April 30, 2020, and April 30, 2019 ~~and July 31, 2018~~ (in thousands):

Balances,
November 1,
2018

Realized Gains
(Losses) (1)

Reversal of Prior
Year
(Appreciation)
Depreciation on
Realization (2)

Unrealized
Appreciation
(Depreciation)
(3)

Purchases (4)

Sales (5)

Transfers In &
Out of Level 3

Balances, July
31, 2019

Total Loss for the year
Included in Earnings
Attibutable to the Change
in Unrealized Appreciation
(Depreciation) on
Investments held as of
July 31, 2019

Senior/Subordinated Loans and credit facilities

$
175,781

$
—

$
—

$
(3,001
)
$
77,792

$
(8,906
)
$
—

$
241,666

$
(3,001
)
Common Stock

6,150

—

—

(3,100
)
766

—

—

3,816

(3,100
)
Preferred Stock

47,060

3,223

276

638

2,591

(32,472
)
—

21,316

638

Warrants

401

—

—

551

505

—

—

1,457

551

Common Equity Interest

50,186

—

—

3,019

—

—

—

53,205

3,019

Guarantees and letters of credit

(2,867
)
—

2,399

(381
)
—

—

—

(849
)
(381
)
Escrow Receivable

969

116

—

—

—

—

—

1,085

—

Total

$
277,680

$
3,339

$
2,675

$
(2,274
)
$
81,654

$
(41,378
)
$
—

$
321,696

$
(2,274
)

	Balances, November 1, 2017			Realized Gains (Losses) (1)			Reversal of Prior Period (Appreciation) Depreciation on Realization (2)			Unrealized Appreciation (Depreciation) (3)			Purchases (4)			Sales (5)			Transfers In & Out of Level 3		Balances, July 31, 2018			Total Loss for the Period Included in Earnings Attibutable to the Change in Unrealized Appreciation (Depreciation) on Investments held as of July 31, 2018			Balances, November 1, 2019			Realized Gains (Losses) (1)			Reversal of Prior Year (Appreciation) Depreciation on Realization (2)			Unrealized Appreciation (Depreciation) (3)			Purchases (4)		Sales (5)			Transfers In & Out of Level 3		Balances, April 30, 2020			Total Loss for the year Included in Earnings Attibutable to the Change in Unrealized Appreciation (Depreciation) on Investments held as of April 30, 2020
Senior/Subordinated Loans and credit facilities	$	153,271		$	(2,999	)	$	2,999		$	(5,133	)	$	52,728		$	(30,705	)	$	—	$	170,161		$	(5,133	)	$	242,177		$	-		$	(291	)	$	(18,754	)	$	12,612	$	(79,102	)	$	-	$	156,642		$	(20,279	)
Common Stock	5,937			—			—			(465		)	—			—			—		5,472			(465		)		3,344			-			-			(417	)		-		-			-		2,927			(417	)
Preferred Stock	25,725			—			—			941			18,586			—			—		45,252			941				20,238			(33	)		(3	)		2,226			-		(1,597	)		-		20,831			2,226
Warrants	1,403			—			—			(1,155		)	469			—			—		717			(1,155		)		2,837			(530	)		-			(1,436	)		1,871		(1,340	)		-		1,402			(1,436	)
Common Equity Interest	56,068			3,455			(3,756		)	2,645			—			(6,980		)	—		51,432			2,154				54,209			-			-			(22,066	)		-		-			-		32,143			(22,066	)
Guarantees and letters of credit	(551		)	—			—			(1,457		)	(123		)	—			—		(2,131		)	(1,457		)		(727	)		-			-			(155	)		-		-			-		(882	)		(155	)
Escrow Receivable	—			(257		)	—			—			1,192			—			—		935			—				1,135			(10	)		-			-			-		(1,125	)		-		-			-
Total	$	241,853		$	199		$	(757	)	$	(4,624	)	$	72,852		$	(37,685	)	$	—	$	271,838		$	(5,115	)	$	323,213		$	(573	)	$	(294	)	$	(40,602	)	$	14,483	$	(83,164	)	$	-	$	213,063		$	(42,127	)

	Balances, November 1, 2018			Realized Gains (Losses) (1)		Reversal of Prior Year (Appreciation) Depreciation on Realization (2)		Unrealized Appreciation (Depreciation) (3)			Purchases (4)		Sales (5)			Transfers In & Out of Level 3		Balances, April 30, 2019			Total Loss for the year Included in Earnings Attibutable to the Change in Unrealized Appreciation (Depreciation) on Investments held as of April 30, 2019
Senior/Subordinated Loans and credit facilities	$	175,781		$	-	$	-	$	(1,644	)	$	44,712	$	(8,567	)	$	-	$	210,282		$	(1,644	)
Common Stock		6,150			-		-		(3,100	)		346		-			-		3,396			(3,100	)
Preferred Stock		47,060			3,223		276		354			2,591		(32,472	)		-		21,032			354
Warrants		401			-		-		537			-		-			-		938			537
Common Equity Interest		50,186			-		-		4,306			-		-			-		54,492			4,306
Guarantees and letters of credit		(2,867	)		-		2,399		(233	)		-		-			-		(701	)		(233	)
Escrow Receivable		969			49		-		29			-		-			-		1,047			29
Total	$	277,680		$	3,272	$	2,675	$	249		$	47,649	$	(41,039	)	$	-	$	290,486		$	249

(1)	Included in net realized gain (loss) on investments in the Consolidated Statements of Operations.
(2)	Included in net unrealized appreciation (depreciation) of investments in the Consolidated Statements of Operations related to securities disposed of during the six month period ended April 30, 2020 and April 30, 2019, respectively.
(3)	Included in net unrealized appreciation (depreciation) of investments in the Consolidated Statements of Operations related to securities held during the six month period ended April 30, 2020 and April 30, 2019, respectively.
(4)	Includes increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, premiums and closing fees and the exchange of one or more existing securities for new securities. For the six month period ended April 30, 2020 and April 30, 2019, a total of approximately $3.1 million and $4.3 million, respectively, of PIK interest and dividends and amortization of discounts and fees are included.
(5)	Includes decreases in the cost basis of investments resulting from principal repayments or sales.

~~(1)Included in net realized gain (loss) on investments in the Consolidated Statements of Operations.~~

~~(2)~~Included in net unrealized appreciation (depreciation) of investments in the Consolidated Statements of Operations related to securities disposed of during the quarter ended April 30, 2019 and April 30, 2018, respectively.

~~(3)~~Included in net unrealized appreciation (depreciation) of investments in the Consolidated Statements of Operations related to securities held during the nine month period ended July 31, 2019 and July 31, 2018, respectively.

~~(4)~~Includes increases in the cost basis of investments resulting from new portfolio investments, PIK interest or dividends, the amortization of discounts, premiums and closing fees and the exchange of one or more existing securities for new securities. For the nine month period ended July 31, 2019 and July 31, 2018, a total of approximately $5.5 million and $2.6 million, respectively, of PIK interest and dividends and amortization of discounts and fees are included.

~~(5)Includes decreases in the cost basis of investments resulting from principal repayments or sales.~~

In accordance with ASU 2011-04, the following tables summarize information about the Company’s Level 3 fair value measurements as of ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018~~2019 (in thousands):

Quantitative Information about Level 3 Fair Value Measurements*

Fair value as of Range Weighted
4/30/2020 Valuation technique Unobservable input Low High average (a)
Common Stock (c) (d) $ 2,927 Adjusted Net Asset Approach Real Estate Appraisals N/A N/A N/A

Market Approach EBITDA Multiple 5.0 x 8.0 x 6.5 x

Income Approach Discount Rate 10.2 % 14.2 % 11.4 %
Perpetual Growth Rate of Free Cash Flow 2.0 % 2.0 % 2.0 %

Senior/Subordinated loans $ 156,642 Market Approach EBITDA Multiple 5.0 x 5.0 x 5.0 x
and credit facilities (b) (d) Forward EBITDA Multiple 5.5 x 5.5 x 5.5 x
Revenue Multiple 0.4 x 0.9 x 0.8 x
Uncertainty Discount 15 % 15 % 15 %

Income Approach Required Rate of Return 9.9 % 26.9 % 19.5 %
Discount Rate 16.1 % 22.9 % 17.9 %
Perpetual Growth Rate of Free Cash Flow 2.5 % 2.5 % 2.5 %

Adjusted Net Asset Approach Real Estate Appraisals N/A N/A N/A
Discount to Net Asset Value 10.0 % 10.0 % 10.0 %
Discount on Liquidation of Assets 17.5 % 25.0 % 23.3 %

Common Equity Interest $ 32,143 Market Approach Forward EBITDA Multiple 5.5 x 5.5 x 5.5 x
EBITDA Multiple 5.0 x 5.0 x 5.0 x
Uncertainty Discount 15 % 15 % 15 %

Adjusted Net Asset Approach Real Estate Appraisals N/A N/A N/A
Discount to Net Asset Value 10.0 % 10.0 % 10.0 %

Income Approach Discount Rate 16.1 % 16.1 % 16.1 %
Perpetual Growth Rate of Free Cash Flow 2.5 % 2.5 % 2.5 %

Preferred Stock (c) $ 20,831 Adjusted Net Asset Approach Discount to Net Asset Value 0.0 % 15.0 % 7.2 %
Real Estate Appraisals N/A N/A N/A

Market Approach % of AUM 0.52 % 0.52 % 0.52 %
Illiquidity Discount 15.0 % 15.0 % 15.0 %
Multiple of Book Value 1.0 x 1.0 x 1.0 x
EBT Multiple 20.9 x 20.9 x 20.9 x

Income Approach Discount Rate 14.4 % 14.4 % 14.4 %
Perpetual Growth Rate of Free Cash Flow 2.5 % 2.5 % 2.5 %

Warrants $ 1,402 Market Approach EBITDA Multiple 6.0 x 6.0 x 6.0 x

Guarantees / Letters of Credit $ (882 ) Income Approach Discount Rate 6.0 % 20.0 % 17.1 %

Total $ 213,063
Notes:
(a) Calculated based on fair values.
(b) Certain investments are priced using non-binding broker or dealer quotes.
(c) Certain common and preferred stock investments are fair valued based on liquidation-out preferential rights held by the Company.
(d) Real estate appraisals are performed by independent third parties and the Company does not have reasonable access to the underlying unobservable inputs.
* The above table excludes certain investments whose fair value is zero due to certain specific situations at the portfolio company level.

Quantitative Information about Level 3 Fair Value Measurements*

	Fair value as of					Range				Weighted
	7/31/2019			Valuation technique	Unobservable input	Low		High		average (a)		Fair value as of					Range						Weighted
												10/31/2019			Valuation technique	Unobservable input	Low			High			average (a)
Common Stock (c) (d)	$	3,816		Adjusted Net Asset Approach	Real Estate Appraisals	N/A		N/A		N/A		$	3,344		Adjusted Net Asset Approach	Real Estate Appraisals		N/A			N/A			N/A
															Market Approach	EBITDA Multiple		6.0	x		7.5	x		6.6	x
				Market Approach	EBITDA Multiple	6.0	x	7.5	x	6.5	x				Income Approach	Discount Rate		12.7	%		12.7	%		12.7	%
																Perpetual Growth Rate of Free Cash Flow		2.0	%		2.0	%		2.0	%
Senior/Subordinated loans	$	241,666		Market Approach	EBITDA Multiple	6.0	x	8.5	x	7.8	x
and credit facilities (b) (d)					Forward EBITDA Multiple	8.5	x	8.5	x	8.5	x
					Revenue Multiple	1.2	x	1.2	x	1.2	x

Senior/Subordinated loans and credit facilities (b) (d)												$	242,177		Market Approach	EBITDA Multiple		6.0	x		8.0	x		7.5	x
				Income Approach	Required Rate of Return	8.1	%	29.1	%	13.9	%					Forward EBITDA Multiple		8.5	x		8.5	x		8.5	x
					Discount Rate	13.5	%	15.4	%	14.8	%					Revenue Multiple		0.5	x		1.4	x		1.2	x
					Perpetual Growth Rate of Free Cash Flow	2.0	%	2.0	%	2.0	%				Income Approach	Required Rate of Return		8.6	%		17.4	%		14.1	%
																Discount Rate		14.1	%		15.6	%		15.1	%
				Adjusted Net Asset Approach	Real Estate Appraisals	N/A		N/A		N/A						Perpetual Growth Rate of Free Cash Flow		2.0	%		2.5	%		2.3	%
					Discount on Liquidation of Assets	17.5	%	25.0	%	24.1	%				Adjusted Net Asset Approach	Real Estate Appraisals		N/A			N/A			N/A
																Discount on Liquidation of Assets		17.5	%		25.0	%		24.1	%
Common Equity Interest	$	53,205		Market Approach	Forward EBITDA Multiple	8.5	x	8.5	x	8.5	x	$	54,209		Market Approach	Forward EBITDA Multiple		8.5	x		8.5	x		8.5	x
					EBITDA Multiple	7.0	x	7.0	x	7.0	x

				Adjusted Net Asset Approach	Real Estate Appraisals	N/A		N/A		N/A
																EBITDA Multiple		7.0	x		7.0	x		7.0	x
				Income Approach	Discount Rate	15.4	%	15.4	%	15.4	%				Adjusted Net Asset Approach	Real Estate Appraisals		N/A			N/A			N/A
					Perpetual Growth Rate of Free Cash Flow	2.0	%	2.0	%	2.0	%				Income Approach	Discount Rate		15.6	%		15.6	%		15.6	%
																Perpetual Growth Rate of Free Cash Flow		2.5	%		2.5	%		2.5	%
Preferred Stock (c)	$	21,316		Adjusted Net Asset Approach	Discount to Net Asset Value	0.0	%	20.0	%	6.9	%	$	20,238		Adjusted Net Asset Approach	Discount to Net Asset Value		0.0	%		10.0	%		4.0	%
					Real Estate Appraisals	N/A		N/A		N/A						Real Estate Appraisals		N/A			N/A			N/A
															Market Approach	Revenue Multiple		1.4	x		1.4	x		1.4	x
				Market Approach	Revenue Multiple	1.2	x	1.2	x	1.2	x					% of AUM		0.72	%		0.72	%		0.72	%
					% of AUM	0.70	%	0.70	%	0.70	%					Illiquidity Discount		35.0	%		35.0	%		35.0	%
					Illiquidity Discount	40.0	%	40.0	%	40.0	%					Multiple of Book Value		1.0	x		1.0	x		1.0	x
					Multiple of Book Value	1.0	x	1.0	x	1.0	x					EBT Multiple		19.5	x		19.5	x		19.5	x
					EBT Multiple	0.2	x	0.2	x	0.2	x				Income Approach	Discount Rate		12.9	%		14.1	%		13.1	%
																Perpetual Growth Rate of Free Cash Flow		2.0	%		2.5	%		2.4	%
				Income Approach	Discount Rate	13.5	%	13.9	%	13.8	%
					Perpetual Growth Rate of Free Cash Flow	2.0	%	2.5	%	2.3	%

Warrants	$	1,457		Market Approach	EBITDA Multiple	6.0	x	6.0	x	6.0	x	$	2,837		Market Approach	EBITDA Multiple		6.0	x		6.0	x		6.0	x

Guarantees / Letters of Credit	$	(849	)	Income Approach	Discount Rate	6.5	%	20.0	%	15.9	%	$	(727	)	Income Approach	Discount Rate		6.5	%		20.0	%		17.0	%

Escrows	$	1,085		Income Approach	Discount Rate	16.8	%	16.8	%	16.8	%	$	1,135		Adjusted Net Asset Approach	Discount to Net Asset Value		0.0	%		0.0	%		0.0	%

Total	$	321,696										$	323,213

Notes:

~~(a) Calculated based on fair values.~~

(a)

Calculated based on fair values.

~~(b) Certain investments are priced using non-binding broker or dealer quotes.~~

(b)

Certain investments are priced using non-binding broker or dealer quotes.

~~(c) Certain common and preferred stock investments are fair valued based on liquidation-out preferential rights held by the Company.~~

(c)

Certain common and preferred stock investments are fair valued based on liquidation-out preferential rights held by the Company.

~~(d) Real estate appraisals are performed by independent third parties and the Company does not have reasonable access to the underlying unobservable inputs.~~

(d)

Real estate appraisals are performed by independent third parties and the Company does not have reasonable access to the underlying unobservable inputs.

* The above table excludes certain investments whose fair value is zero due to certain specific situations at the portfolio company level.

Quantitative Information about Level 3 Fair Value Measurements*

Fair value as of

Range

Weighted

10/31/2018

Valuation technique

Unobservable input

Low

High

average (a)

Common Stock (c) (d)

$
6,150

Adjusted Net Asset Approach

Real Estate Appraisals

N/A

N/A

N/A

Market Approach

Forward EBITDA Multiple

7.0
x
7.0
x
7.0
x

Senior/Subordinated loans and credit facilities (b) (d)

$
175,781

Market Approach

EBITDA Multiple

8.5
x
8.5
x
8.5
x

Forward EBITDA Multiple

5.0
x
7.5
x
7.0
x

Revenue Multiple

1.6
x
1.6
x
1.6
x

Income Approach

Required Rate of Return

8.9
%
26.8
%
13.0
%

Discount Rate

12.6
%
16.0
%
14.9
%

Perpetual Growth Rate of Free Cash Flow

2.0
%
3.0
%
2.7
%

Adjusted Net Asset Approach

Real Estate Appraisals

N/A

N/A

N/A

Discount on Liquidation of Assets

17.5
%
82.5
%
45.6
%

Common Equity Interest

$
50,186

Market Approach

Forward EBITDA Multiple

6.5
x
7.5
x
7.1
x

Adjusted Net Asset Approach

Real Estate Appraisals

N/A

N/A

N/A

Income Approach

Discount Rate

16.0
%
16.0
%
16.0
%

Perpetual Growth Rate of Free Cash Flow

3.0
%
3.0
%
3.0
%

Preferred Stock (c)

$
47,060

Adjusted Net Asset Approach

Discount to Net Asset Value

1.0
%
20.0
%
7.0
%

Real Estate Appraisals

N/A

N/A

N/A

Market Approach

Revenue Multiple

1.6
x
1.6
x
1.6
x

Forward EBITDA Multiple

7.0
x
7.0
x
7.0
x

% of AUM

0.70
%
0.70
%
0.70
%

Illiquidity Discount

45.0
%
45.0
%
45.0
%

Multiple of Book Value

1.0
x
1.0
x
1.0
x

EBT Multiple

13.5
x
13.5
x
13.5
x

Income Approach

Discount Rate

12.6
%
14.6
%
13.6
%

Perpetual Growth Rate of Free Cash Flow

2.0
%
2.5
%
2.2
%

Required Rate of Return

16.4
%
18.4
%
17.1
%

Warrants

$
401

Market Approach

EBITDA Multiple

7.1
x
7.1x

7.1
x

Guarantees / Letters of Credit

$
(2,867
)
Income Approach

Discount Rate

6.5
%
20.0
%
17.6
%

Escrows

$
969

Income Approach

Discount Rate

18.9
%
18.9
%
18.9
%

Total

$
277,680

~~Notes:~~

~~(a) Calculated based on fair values.~~

~~(b) Certain investments are priced using non-binding broker or dealer quotes.~~

~~(c) Certain common and preferred stock investments are fair valued based on liquidation-out preferential rights held by the Company.~~

~~(d) Real estate appraisals are performed by independent third parties and the Company does not have reasonable access to the underlying unobservable inputs.~~

* The above table excludes certain investments whose fair value is zero due to certain specific situations at the portfolio company level.

The above table excludes certain investments whose fair value is zero due to certain specific situations at the portfolio company level.

ASU 2011-04 clarifies the application of existing fair value measurement and disclosure requirements related to the application of the highest and best use and valuation premise concepts for financial and nonfinancial instruments, measuring the fair value of an instrument classified in equity, and disclosures about fair value measurements. ASU 2011-04 requires additional disclosures about fair value measurements categorized within Level 3 of the fair value hierarchy, including the valuation processes used by the reporting entity, the sensitivity of the fair value to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any.

Following are descriptions of the sensitivity of the Level 3 recurring fair value measurements to changes in the significant unobservable inputs presented in the above table. For securities utilizing the income approach

valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk. Generally, a change in the discount rate is accompanied by a directionally similar change in the risk premium and discount for lack of marketability. For securities utilizing the market approach valuation technique, a significant increase (decrease) in the EBITDA, revenue multiple or other key unobservable inputs listed in the above table would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the discount for lack of marketability would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk. For securities utilizing an adjusted net asset approach valuation technique, a significant increase (decrease) in the price to book value ratio, discount rate or other key unobservable inputs listed in the above table would result in a significantly higher (lower) fair value measurement.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020

During the ~~nine~~six month period ended ~~July~~April 30, 2020, the Company made follow-on investments in five portfolio companies that totaled approximately $11.5 million. Specifically, on November 14, 2019 and February 28, 2020, the Company loaned $50,000 and $300,000, respectively, to RuMe Inc. (“RuMe”) on its lines of credit, increasing the balances to approximately $2.2 million and approximately $727,000, respectively. On December 13, 2019 and February 3, 2020, the Company loaned approximately $1.6 million and $1.7 million, respectively, to Jedson Engineering, Inc. (“Jedson”), increasing the first lien loan to approximately $9.4 million. On January 10, 2020, the Company loaned approximately $3.8 million to Apex Industrials Technologies, LLC (“Apex”), increasing the first lien loan to approximately $18.8 million at that time. The maturity date of the loan was extended to May 15, 2020. The Company also received a warrant as part of this investment. During the six month period ended April 30, 2020, Custom Alloy Corporation (“Custom Alloy”) borrowed approximately $1.7 million on its revolving credit facility, increasing the balance outstanding to approximately $3.7 million. During the six month period ended April 30, 2020, the Company loaned approximately $2.5 million to Security Holdings B.V. (“Security Holdings”), increasing its senior subordinated loan outstanding amount to approximately $8.6 million.

On November 1, 2019, U.S. Gas & Electric, Inc. (“U.S. Gas”) made a principal payment of approximately $32.8 million on its second lien loan.

On November 4, 2019, the Company received net proceeds of approximately $1.0 million related to the G3K Displays, Inc. settlement.

On November 5, 2019, the Company received proceeds of approximately $1.0 million related to the Centile Holding B.V. (“Centile”) escrow.

On November 8, 2019, the Company received proceeds of approximately $2.7 million from the PE Fund related to the sale of Focus Pointe Holdings, Inc. (“Focus Pointe”), a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Focus Pointe investment totaled approximately $1.9 million, resulting in a realized gain of approximately $773,000. The Company also received a carried interest payment from the PE Fund of approximately $48,000 related to the sale, which was recorded as additional realized gains.

On November 8, 2019, the Company received proceeds of approximately $291,000 from the PE Fund related to tax refunds received by the PE Fund related to Plymouth Rock Energy, LLC. The additional proceeds were recorded as realized gains. The Company also received a carried interest payment from the PE Fund of approximately $11,000 related to these proceeds, which was recorded as additional realized gains.

On December 5, 2019, the Company sold 162,999 preferred shares of Advantage Insurance, Inc. (“Advantage”) for approximately $1.6 million, resulting in a realized loss of approximately $33,000.

On January 1, 2020, Array Information Technology, Inc. (“Array”) repaid its second lien loan in full, including all accrued interest totaling approximately $6.4 million. The Company also received approximately $28,000 for the sale of the warrant which was recorded as a realized gain.

On January 10, 2020, Essner Manufacturing, LP (“Essner”) repaid its first lien loan in full, including all accrued interest totaling approximately $3.6 million.

On January 31, 2020, Morey’s Seafood International, LLC (“Morey’s”) repaid its second lien loan in full, including all accrued interest totaling approximately $16.8 million.

On February, 21, 2020, the Company received proceeds of approximately $878,000 from the PE Fund related to the release of escrow funds related to former PE Fund portfolio companies AccuMed Corp., Focus Pointe Global andPlymouth Rock Energy, LLC. The Company also received an approximately $32,000 carried interest payment.

On March 6, 2020, United States Technologies, Inc. (“U.S. Tech”) made an approximately $367,000 principal payment on its loan.

On March 30, 2020, Apex repaid its first lien loan in full including all accrued interest, totaling approximately $18.9 million. The Company received a free warrant as part of the approximately $3.9 million follow-on investment on January 10, 2020 in which approximately $1.9 million of the approximately $3.9 million cost basis of the loan was allocated to the cost of the warrant. On March 30, 2020, the Company also received approximately $1.3 million for the sale of the warrant, which resulted in a realized loss of approximately $558,000 based on the allocated cost of the warrant. The net impact of the warrant increased net assets by approximately $1.3 million.

On April 6, 2020,Turf Products, LLC’s (“Turf”) senior subordinated loan and third lien loan were combined into a non-amortizing senior subordinated loan in the amount of $8,697,056 with a 10% cash interest rate and a maturity of October 7, 2023.

During the six month period ended April 30, 2020, Turf made a principal payment of $70,000 on its third lien loan.

During the six month period ended April 30, 2020, Legal Solutions Holdings, Inc. (“Legal Solutions”) made $2.4 million in principal payments on its loan.

During the quarter ended January 31, 2020, the Valuation Committee increased the fair value of the Company’s investments in: Black Diamond Equipment Rental, LLC (“Black Diamond”) by approximately $256,000, Foliofn, Inc. (“Foliofn”) by approximately $5.7 million, JSC Tekers Holdings (“JSC Tekers”) by $350,000, Trientis GmbH (“Trientis”) by approximately $72,000, Turf by approximately $60,000, MVC Private Equity Fund L.P. by approximately $2.0 million, GTM Intermediate Holdings, Inc. (“GTM”) by approximately $817,000, MVC Automotive Group GmbH (“MVC Automotive”) equity by approximately $486,000 and Apex by approximately $1.5 million. In addition, increases in the cost basis of the loans to Apex, Black Diamond, Custom Alloy, Dukane IAS, LLC (“Dukane”), Global Prairie PBC, Inc. (“Global Prairie”), GTM, Highpoint, HTI Technologies and Industries, Inc. (“HTI”), Jedson, Legal Solutions, Morey’s, RuMe, Security Holdings, SMA Holdings, Inc. (“SMA”) and Tuf-Tug Inc. (“Tuf-Tug”) due to the capitalization of PIK interest totaling approximately $1.8 million. The Valuation Committee also decreased the fair value of the Company's investments in: Advantage by approximately $129,000, Custom Alloy by approximately $387,000, Dukane by approximately $45,000, Initials, Inc. (“Initials”) by approximately $103,000, RuMe by approximately $1.6 million, Security Holdings by approximately $7.1 million, Tuf-Tug by approximately $62,000, U.S. Gas by approximately $1.0 million and U.S. Spray Drying Holding Company (“U. S. Spray”) by approximately $260,000.

During the quarter ended April 30, 2020, the Valuation Committee decreased the fair value of the Company’s investments in: Advantage by approximately $835,000, Black Diamond by approximately $628,000, Custom Alloy by approximately $7.2 million, Foliofn, by approximately $632,000, Global Prairie by approximately $83,000, GTM by approximately $430,000, Highpoint Global LLC (“Highpoint”) by approximately $254,000, HTI by approximately $1.2 million, Initials by approximately $519,000, International Precision Components Corporation (“IPCC”) by approximately $160,000, Jedson by approximately $2.5 million, JSC Tekers by approximately $733,000, Legal Solutions by approximately $386,000, MVC Automotive by approximately $6.9 million, MVC Private Equity Fund L.P. by approximately $2.8 million, Powers Equipment Acquisition Company (“Powers”) by approximately $1.5 million, RuMe by approximately $3.1 million, Security Holdings by approximately $8.6 million, SMA by approximately $28,000, Trientis by approximately $54,000, Tuf-Tug by approximately $161,000, Turf by approximately $1.1 million and U.S. Spray by approximately $570,000. There were also increases in the cost basis of the loans to Black Diamond, Dukane, Global Prairie, GTM, Highpoint, HTI, Jedson, Legal Solutions, RuMe, Security Holdings, SMA and Tuf-Tug due to the capitalization of PIK interest totaling approximately $600,000.

During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the Company’s investments in: Advantage by approximately $964,000, Black Diamond by approximately $372,000, Custom Alloy by approximately $7.6 million, Dukane by approximately $45,000, Global Prairie by approximately $83,000, Highpoint by approximately $254,000, HTI by approximately $1.2 million, Initials by approximately $622,000, IPCC by approximately $160,000, Jedson by approximately $2.5 million, JSC Tekers by approximately $383,000, Legal Solutions by approximately $386,000, MVC Automotive by approximately $6.4 million, MVC Private Equity Fund L.P. by approximately $800,000, Powers by approximately $1.5 million, RuMe by approximately $4.7 million, Security Holdings by approximately $15.7 million, SMA by approximately $28,000, Tuf-Tug by approximately $223,000, Turf by approximately $1.0 million, U.S. Gas by approximately $1.0 million and U. S. Spray by approximately $830,000. The Valuation Committee also increased the fair value of the Company's investments in: Apex by approximately $1.5 million, Foliofn, by approximately $5.0 million, GTM by approximately $387,000 and Trientis by approximately $18,000. In addition, increases in the cost basis of the loans to Apex, Black Diamond, Custom Alloy, Dukane, Global Prairie, GTM, Highpoint, HTI, Jedson, Legal Solutions, Morey’s, RuMe, Security Holdings, SMA and Tuf-Tug due to the capitalization of PIK interest totaling approximately $2.4 million.

At April 30, 2020, the fair value of all portfolio investments, exclusive of escrow receivables, was $226.3 million with a cost basis of $345.7 million. At April 30, 2020, the fair value and cost basis of investments made by the Company’s former management team pursuant to the prior investment objective (“Legacy Investments”) were $11.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team were $214.9 million and $330.7 million, respectively. At October 31, 2019, the fair value of all portfolio investments, exclusive of escrow receivables, was $340.2 million with a cost basis of $415.7 million. At October 31, 2019, the fair value and cost basis of the Legacy Investments were $6.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team were $333.8 million and $400.7 million, respectively.

For the Fiscal Year Ended October 31, 2019

During the fiscal year ended October 31, 2019, the Company made ~~five~~six new investments, committing capital that totaled approximately ~~$29.4~~$32.4 million. Pursuant to an exemptive order received by the Company from the SEC (the “Order”), that allows the Company to co-invest, subject to certain conditions, with certain affiliated private funds as described in the Order, each of the Company and ~~TTGA C-I MMF LP (the “Private Fund”)~~the Private Fund co-invested in GTM ~~Intermediate Holdings, Inc. (“GTM”)~~ ($1.9 million investment for the Company). The Company also invested in Powers ~~Equipment Acquisition Company, LLC (“Powers”)~~ ($6.5 million), ~~International Precision Components Corporation (“IPCC”)~~IPCC ($8.0 million), Jedson ~~Engineering, Inc. (“Jedson”)~~ ($6.0 million), SMA ($7.0 million) and ~~SMA Holdings, Inc. (“SMA”)~~Global Prairie ($~~7.0~~3.0 million).

During the ~~nine month period~~fiscal year ended ~~July~~October 31, 2019, the Company made follow-on investments in ~~four~~six portfolio ~~company~~companies that totaled approximately ~~$9.1~~$12.5 million. OnSpecifically, on December 21, 2018, the Company loaned an additional $2.0 million to Custom Alloy ~~Corporation (“Custom Alloy”)~~ in the form of a second lien loan with an interest rate of 11% and a maturity date of December 23, 2019. During the ~~nine month period~~fiscal year ended ~~July~~October 31, 2019, the Company loaned ~~$750,000~~approximately $1.4 million to RuMe ~~Inc. (“RuMe”).~~and received a new warrant. On June 7, 2019, the Company invested approximately $3.9 million in GTM increasing the second lien loan by $3.5 million and investing approximately $420,000 for additional common shares. ~~On July 1,~~During the fiscal year ended October 31, 2019, Custom Alloy borrowed ~~$800,000~~approximately $2.1 million on its revolving credit facility ~~with~~which has a 15% interest rate and a maturity date of ~~December 7, 2024.~~April 30, 2020. On July 15, 2019, the Company loaned an additional $1.0 million to HTI ~~Technologies and Industries, Inc. (HTI”)~~ increasing its second lien loan to approximately ~~$11.3~~$11.4 million as of ~~July~~October 31, 2019. On September 10, 2019, the Company invested $1.0 million in additional common equity of MVC Automotive. On September 26, 2019, the Company loaned approximately $552,000 to Security Holdings, increasing its senior subordinated loan to approximately $6.0 million as of October 31, 2019.

On November 9, 2018, Custom Alloy repaid its first lien loan in full, including all accrued interest.

On November 13, 2018, Custom Alloy repaid its $1.4 million second lien loan in full, including all accrued interest.

On November 27, 2018, the Company funded approximately $3.0 million related to the MVC Environmental ~~Inc. (“MVC Environmental”)~~ letter of credit, which was called by the beneficiary.

On December 27, 2018, the Company received proceeds of approximately $7.5 million from the PE Fund related to the sale of Plymouth Rock Energy, LLC, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Plymouth Rock Energy, LLC investment totaled approximately $2.5 million, resulting in a realized gain of approximately $5.0 million. The Company also received a carried interest payment from the PE Fund of approximately $173,000 related to the sale, which was recorded as additional realized gains.

On December 27, 2018, the Company received a dividend of approximately $543,000 from the PE Fund related to Focus Pointe Global.

On February 7, 2019, Vistra Energy and Crius Energy Trust (“Crius”) announced that they entered into a definitive agreement pursuant to which Vistra Energy will acquire Crius for cash consideration of CAN$7.57 per trust unit. On

February 20, 2019, Vistra Energy agreed to increase its acquisition price for Crius to CAN$8.80 per trust unit, an increase of CAN$1.23 per trust unit.

On April 26, 2019, RuMe made a principal payment on the revolver of $500,000 and Morey’s ~~Seafood International, LLC (“Morey’s”)~~ made a principal payment of approximately $591,000 on its second lien loan.

On April 30, 2019, Custom Alloy redeemed its series A, B and C preferred shares and consolidated its second lien loans in exchange for two second lien loans of approximately $32.5 million and $6.1 million with interest rates of 15% and maturity dates of April 30, 2022. The Company also funded approximately $595,000 as part of the transaction related to the $6.1 million second lien loan. The Company realized a gain of approximately $3.2 million and approximately $2.3 million of PIK interest and dividends associated with the transaction. Also on April 30, 2019, the Company provided Custom Alloy a $3.0 million line of credit with a 15% interest rate and a maturity date of April 30, ~~2020. There was~~2020 with no amount outstanding as of ~~April 30, 2019.~~that date.

On June 14, 2019, Array ~~Industrial Technologies, LLC~~Information Technology, Inc. (“Array”) made a principal payment of approximately $114,000 on its second lien loan.

On June 19, 2019, Essner Manufacturing, LP (“Essner”) made a principal payment of approximately $78,000 on its first lien loan.

On July 1, 2019, Turf Products, LLC (“Turf”) made a principal payment of $70,000 on its third lien loan.

On July 15, 2019, the Company’s Crius trust units were sold for $6.71 per share resulting in total proceeds of approximately $22.0 million. The Company realized a loss of approximately $3.8 million as a result of this transaction.

On July 29, 2019, the Company sold 608,310 shares of Equus Total Return, Inc. (“Equus”) common stock for approximately $1.0 million, resulting in a realized loss of approximately $219,000.

~~During~~On August 12, 2019, the ~~nine month period~~Company sold 608,310 common shares of Equus totaling approximately $985,000 in proceeds and resulting in a realized loss of approximately $268,000.

On August 12, 2019, the Company converted the MVC Environmental loan, unpaid expenses and accrued interest to additional cost basis in the common stock of MVC Environmental, resulting in a realized gain of approximately $1.4 million.

On September 13, 2019, the Company sold the common stock of MVC Environmental, receiving proceeds of $45,000 which resulted in a realized loss of approximately $14.4 million.

On October 1, 2019, Tin Roof repaid its $3.8 million loan in full, including all accrued interest. Also during the fiscal year ended ~~July~~October 31, 2019, Tin Roof ~~Software, LLC (“Tin Roof”)~~ made principal payments totaling approximately ~~$99,000 on its second lien loan.~~$99,000.

On October 17, 2019, the Company recorded a $1.6 million realized gain associated with a settlement, which is expected to be paid in November 2019, related to a former portfolio company, G3K Display, Inc. The Company incurred costs of approximately $543,000 related to the settlement.

During the quarter ended January 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Black Diamond ~~Equipment Rental, LLC (“Black Diamond”)~~ loan and warrant by approximately $767,000, Custom Alloy second lien loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately $2.3 million, Dukane ~~IAS, LLC (“Dukane”)~~ loan by $286, ~~Folio~~fn~~, Inc. (“Folio~~fn”)Foliofn preferred stock by $32,000, Highpoint ~~Global LLC (“Highpoint”)~~ loan by approximately $252, HTI loan by approximately $80,000, JSC Tekers ~~Holdings (“JSC Tekers”)~~ preferred stock by approximately $82,000, Security Holdings ~~B.V. (“Security Holdings”)~~ equity and letter of credit by a net total of $25,000, Turf loan by approximately $15,000 and the Centile escrow by $49,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, ~~Holdings, Inc. (“Legal Solutions”),~~ RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug ~~Inc. (“Tuf-Tug”)~~ and Security Holdings were due to the capitalization of PIK interest totaling approximately $964,000. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage ~~Insurance Holdings LTD (“Advantage”)~~ preferred stock by approximately $244,000, Essner loan by approximately $21,000, Initials ~~Inc. (“Initials”)~~ loan by approximately $412,000, Legal Solutions loan by approximately $118,000, MVC Automotive ~~Group GmbH (“MVC Automotive”)~~ equity by approximately $117,000, MVC Environmental loan by approximately $875,000 and common stock by approximately $3.0 million, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $1.1 million, RuMe series B-1 preferred stock, guarantee and letter of credit by a net total of approximately $308,000, Trientis ~~GmbH (“Trientis”)~~ loan by approximately $77,000, ~~United States Technologies, Inc. (“~~U.S. ~~Tech”)~~Tech loan by approximately $23,000 and the U.S. Gas ~~& Electric, Inc. (“U.S. Gas”)~~ loan by approximately $797,000.

During the quarter ended April 30, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by approximately $62,000, Black Diamond loan and warrant by a net total of approximately $126,000, Dukane loan by approximately $10,000, Essner loan by approximately $21,000, ~~Folio~~fn Foliofn preferred stock by $369,000, Highpoint loan by approximately $264, HTI loan by approximately $65,000, Initials loan by approximately $5,000, MVC Automotive equity by approximately $747,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $833,000, Security Holdings equity and letter of credit by a net total of approximately $3.7 million, Trientis loan by approximately $40,000, Turf loans by approximately $94,000, U.S. Tech loan by approximately $23,000, U.S. Gas loan by approximately $357,000 and the Centile escrow by approximately $29,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings and the Custom Alloy preferred stock were due to the capitalization of PIK interest/dividends totaling approximately $3.4 million. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage preferred stock by approximately $674,000, Custom Alloy loans by a total of approximately $504,000, JSC Tekers preferred stock by approximately $48,000, RuMe series B-1 preferred stock and letter of credit by a total of approximately $1.8 million and the U.S. Spray ~~Drying Holding Company (“U.S. Spray”)~~ common stock by $3.1 million.

During the quarter ended July 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Centile escrow by approximately $38,000, Custom Alloy loans by a total of approximately $115,000, Dukane loan by approximately $1,000, ~~Folio~~fn Foliofn preferred stock by $389,000, HTI loan by approximately $47,000, JSC Tekers preferred stock by approximately $60,000 and Turf loans by approximately $124,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings, Jedson and Custom Alloy were due to the capitalization of PIK interest/dividends totaling approximately $780,000. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Array loan by approximately $1,000, Black Diamond loan and warrant by a net total of approximately $8,000, Highpoint loan by approximately $51,000, Initials loan by approximately $281,000, MVC Automotive equity by approximately $256,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $399,000, RuMe series B-1 preferred stock and letter of credit by a total of approximately $113,000, Security Holdings equity and letter of credit by a net total of approximately $1.2 million, Trientis loan by approximately $84,000 and U.S. Gas loan by approximately $1.2 million.

During the ~~nine month period~~quarter ended ~~July~~October 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by $622, Centile escrow by approximately $50,000, Foliofn preferred stock by $569,000, JSC Tekers preferred stock by $737,000, MVC Automotive equity by approximately $327,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $566,000, Tuf-Tug loan and common stock by a total of approximately $78,000 and Turf loans by approximately $69,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tuf-Tug, Security Holdings, Jedson, SMA and Black Diamond were due to the capitalization of PIK interest/dividends totaling approximately $747,000. The Valuation Committee also decreased the fair value of the Company's investments in: Advantage preferred stock by approximately $403,000, Black Diamond loan and warrant by a net total of approximately $14,000, Custom Alloy loans by a total of approximately $98,000, Dukane loan by approximately $9,000, Initials loan by approximately $715,000, RuMe preferred stocks, warrants and letter of credit by a net total of approximately $839,000, Security Holdings equity and letter of credit by a net total of $227,000, Trientis loan by approximately $86,000, U.S. Gas loan by approximately $857,000 and U.S. Spray common stock by $500,000.

During the fiscal year ended October 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by approximately ~~$62,000,~~$63,000, Black Diamond loan and warrant by a net total of approximately ~~$885,000,~~$871,000, Custom Alloy second lien loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately ~~$1.9~~$1.8 million, Dukane loan by approximately ~~$11,000, Folio~~fn $1,000, Foliofn preferred stock by ~~$790,000,~~$1.4 million, HTI loan by approximately $192,000, JSC Tekers preferred stock by approximately ~~$94,000,~~$831,000, Security Holdings equity and letter of credit by a net total of approximately ~~$2.5~~$2.2 million, Tuf-Tug loan and common stock by approximately $78,000, Turf loans by approximately ~~$233,000,~~$302,000, MVC Automotive equity by approximately ~~$374,000~~$701,000 and the Centile escrow by ~~$116,000.~~$166,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings, Jedson, SMA and the Custom Alloy preferred stock were due to the capitalization of PIK interest/dividends totaling approximately ~~$5.1~~$5.9 million. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage preferred stock by approximately ~~$918,000,~~$1.3 million, Highpoint loan by approximately $51,000, Initials loan by approximately ~~$688,000,~~$1.4 million, Legal Solutions loan by approximately $118,000, MVC Environmental loan and common stock by a total of approximately $3.9 million, RuMe series B-1 preferred stock, guarantee and letter of credit by a net total of approximately ~~$2.2~~$3.0 million, Trientis loan by approximately ~~$121,000,~~$208,000, U.S. Spray common stock by ~~$3.1~~$3.6 million, U.S. Gas loan by approximately ~~$1.6~~$2.4 million and the MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately ~~$705,000.~~$140,000.

At ~~July~~October 31, 2019, the fair value of all portfolio investments, exclusive of ~~U.S. Treasury obligations and~~ escrow receivables, was ~~$339.4~~$340.2 million with a cost basis of ~~$426.3~~$415.7 million. At ~~July~~October 31, 2019, the fair value and cost basis of ~~investments made by~~ the ~~Company’s former management team pursuant to the prior~~

~~investment objective (“~~Legacy ~~Investments”) was $5.8~~Investments were $6.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was ~~$333.6~~$333.8 million and ~~$411.3~~$400.7 million, respectively. At October 31, 2018, the fair value of all portfolio investments, exclusive of escrow receivables, was $324.5 million with a cost basis of $409.6 million. At October 31, 2018, the fair value and cost basis of the Legacy Investments was $5.0 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $319.5 million and $394.6 million, respectively.

~~For the Fiscal Year Ended October 31, 2018~~

During the fiscal year ended October 31, 2018, the Company made six new investments, committing capital that totaled approximately $41.5 million. Pursuant to the Order, that allows the Company to co-invest, subject to certain conditions, with certain affiliated private funds as described in the Order, each of the Company and the Private Fund co-invested in Essner ($3.7 million investment for the Company), Black Diamond ($7.5 million investment for the Company), Apex Industrial Technologies, LLC (“Apex”) ($15.0 million investment for the Company), Array ($6.0 million investment for the Company), Tuf-Tug ($5.6 million investment for the Company) and Tin Roof ($3.7 million investment for the Company).

During the fiscal year ended October 31, 2018, the Company made follow-on investments in eight portfolio companies that totaled approximately $20.8 million. On November 8, 2017, the Company loaned an additional $1.5 million to U.S. Spray Drying Holding Company (“SCSD”) in the form of a senior secured loan. The loan has an interest rate of 12% and a maturity date of November 7, 2020. On December 21, 2017, the Company loaned approximately $526,000 to Initials increasing the senior subordinated loan amount to approximately $5.3 million. On December 22, 2017, the Company loaned $1.4 million to Turf in the form of a third lien loan. The loan has an interest rate of 10% and a maturity date of August 7, 2020. On February 28, 2018, the Company committed $6.0 million to Custom Alloy in the form of a first lien loan with an interest rate of 10% and a maturity date of October 31, 2018. The funded amount as of October 31, 2018, net of repayments, was approximately $539,000 with no additional borrowings available on the commitment. On March 19, 2018, the Company invested approximately $68,000 in Trientis for a warrant. On March 22, 2018, the Company loaned approximately $2.3 million to MVC Automotive increasing the bridge loan amount to approximately $7.1 million and extending the maturity date to June 30, 2019. On April 10, 2018, the Company loaned approximately $308,000 to Security Holdings, increasing the bridge loan amount to approximately $4.7 million. On May 30, 2018, the Company loaned an additional $4.8 million to Security Holdings in the form of a senior subordinated loan and provided a 3.3 million Euro letter of credit. The loan has an annual interest rate of 12.45% and a maturity date of May 31, 2020. During the fiscal year ended October 31, 2018, the Company loaned approximately $3.6 million to RuMe, increasing the subordinated loan amount to approximately $3.3 million and the revolver balance to approximately $1.5 million.

On November 28, 2017, the Company restructured the Custom Alloy second lien loan and unsecured subordinated loan. The second lien loan was restructured into a $3.5 million second lien loan with an interest rate of 10% and a maturity date of December 31, 2020, 6,500 shares of series B preferred Stock with a 10% PIK coupon and a maturity date of December 31, 2020 and 17,935 shares of series C preferred Stock. The unsecured subordinated loan was restructured into 3,617 shares of series A preferred Stock with a 12% PIK coupon and a maturity date of April 30, 2020. The Company also provided a $2.0 million and $1.4 million letter of credit.

~~On November 29, 2017, the Company received a principal payment of $3.0 million from Dukane resulting in an outstanding balance of approximately $4.4 million as of October 31, 2018.~~

~~On December 29, 2017, the Company received a principal payment of $200,000 from Vestal Manufacturing Enterprises, Inc. (“Vestal”).~~

~~On February 9, 2018, FDS Inc. (“FDS”) repaid its loan in full, including all accrued interest.~~

~~On April 4, 2018, Vestal repaid its loan in full, including all accrued interest.~~

~~On April 11, 2018, Morey’s made a principal payment of $2.0 million on its second lien loan.~~

On July 31, 2018, the Company sold its interest in Centile Holding BV (“Centile”) and received cash proceeds of approximately $5.8 million at closing. An additional $1.2 million of proceeds are held in escrow for 15 months from the closing. Assuming the full receipt of all escrow proceeds, the sale of Centile will result in a realized gain of approximately $3.5 million.

On October 31, 2018, the Custom Alloy $1.4 million letter of credit was drawn upon, which resulted in the Company receiving a $1.4 million term note with a 15% interest rate and a maturity date of October 31, 2021.

~~During the fiscal year ended October 31, 2018 Turf made principal payments totaling $210,000 on its third lien loan.~~

During the quarter ended January 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Centile equity interest by $295,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letter of credit by a total of approximately $638,000, Highpoint loan by approximately $99,000, Initials loan by approximately $46,000, JSC Tekers preferred stock by approximately $370,000, Legal Solutions loan by approximately $1,000, MVC Automotive equity interest by approximately $1.8 million, MVC Environmental letter of credit by approximately $7,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $394,000, RuMe guarantee and letter of credit by a total of approximately $57,000 and Security Holdings equity interest by approximately $812,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, Custom Alloy, RuMe, Dukane, Morey’s, Highpoint and Security Holdings were due to the capitalization of PIK interest totaling $715,324. The Valuation Committee also decreased the fair value of the Company’s investments in: Advantage preferred stock by approximately $143,000, Custom Alloy letter of credit by approximately $70,000, Dukane loan by approximately $30,000, Foliofn preferred stock by $543,000, HTI loan by approximately $130,000, MVC Environmental loan by approximately $498,000, RuMe series B-1 preferred stock, series C preferred stock, common stock and warrants by a total of approximately $1.2 million, Turf loans by approximately $136,000, U.S. Gas loan by approximately $1.7 million and SCSD common stock by approximately $134,000.

During the quarter ended April 30, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Advantage preferred stock by approximately $82,000, Centile equity interest by $196,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $3.0 million, Dukane loan by approximately $300, Legal Solutions loan by approximately $900, MVC Automotive equity interest by approximately $934,000, RuMe guarantee by approximately $28,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $167,000 and U.S. Gas loan by approximately $909,000. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials and Security Holdings were due to the capitalization of PIK interest totaling $635,592. The Valuation Committee also decreased the fair value of the Company’s investments in: Foliofn preferred stock by $66,000, HTI loan by approximately $49,000, Initials loan by approximately $82,000, JSC Tekers Holdings preferred stock by approximately $176,000, MVC Environmental loan and letter of credit by a total of approximately $267,000, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $1.8 million, Security Holdings equity interest by approximately $2.3 million and Turf loans by approximately $288,000.

During the quarter ended July 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $36,000, Dukane loan by approximately $300, HTI loan by approximately $242,000, Legal Solutions loan by approximately $800, MVC

Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $1.9 million, Security Holdings equity interest and letter of credit by a total of approximately $1.6 million and Turf loans by approximately $53,000. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials, Array and Security Holdings were due to the capitalization of PIK interest totaling $893,912. The Valuation Committee also decreased the fair value of the Company’s investments in: Foliofn preferred stock by $115,000, Initials loan by approximately $186,000, JSC Tekers Holdings preferred stock by $154,000, MVC Automotive equity interest by $819,000, MVC Environmental loan and letter of credit by a total of approximately $4.7 million, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $114,000, U.S. Gas loan by approximately $109,000, U.S. Tech loan by $55,000 and the Centile escrow by approximately $257,000 that was recorded as a realized loss.

During the quarter ended October 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $2.4 million, Dukane loan by approximately $300, Foliofn preferred stock by $310,000, Highpoint loan by approximately $51,000, Legal Solutions loan by approximately $900, Turf loans by approximately $52,000 and the Centile escrow by approximately $34,000 that was recorded as a realized gain. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, Black Diamond, Tuf-Tug and Security Holdings were due to the capitalization of PIK interest totaling $927,705. The Valuation Committee also decreased the fair value of the Company’s investments in: HTI loan by approximately $144,000, Initials loan by approximately $2.2 million, JSC Tekers Holdings preferred stock by $157,000, MVC Automotive equity interest by $442,000, MVC Environmental loan and letter of credit by a total of approximately $966,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $218,000, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $691,000, Security Holdings equity interest and letter of credit by a total of $747,000, Trientis loan and warrant by a total of approximately $932,000 and the U.S. Gas loan by approximately $179,000.

During the fiscal year ended October 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Centile equity interest by $491,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock and series C preferred stock by a total of approximately $6.0 million, Highpoint loan by approximately $150,000, Legal Solutions loan by approximately $3,500, MVC Automotive equity interest by approximately $1.5 million and the MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $2.2 million. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials, Array, Trientis, Black Diamond, Tuf-Tug and Security Holdings were due to the capitalization of PIK interest totaling $3,172,533. The Valuation Committee also decreased the fair value of the Company’s investments in: Advantage preferred stock by approximately $61,000, Dukane loan by approximately $29,000, Foliofn preferred stock by $414,000, HTI loan by approximately $80,000, Initials loan by approximately $2.5 million, JSC Tekers preferred stock by approximately $117,000, MVC Environmental loan and letter of credit by a total of approximately $6.4 million, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $3.7 million, Security Holdings equity interest and letter of credit by a total of $685,000, Trientis loan and warrant by a total of approximately $932,000, Turf loans by approximately $319,000, U.S. Gas loan by approximately $1.1 million, SCSD common stock by approximately $134,000, U.S. Tech loan by $55,000 and the Centile escrow by approximately $223,000 that was recorded as a realized loss.

At October 31, 2018, the fair value of all portfolio investments, exclusive of escrow receivables, was $324.5 million with a cost basis of $409.6 million. At October 31, 2018, the fair value and cost basis of the Legacy Investments was $5.0 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $319.5 million and $394.6 million, respectively. At October 31, 2017, the fair value of all portfolio investments was $292.5 million with a cost basis of $363.2 million. At October 31, 2017, the fair value and cost basis of Legacy Investments was

$5.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $287.1 million and $348.2 million, respectively.

9. Commitments and Contingencies

Commitments to Portfolio Companies:

At ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, the Company’s existing commitments to portfolio companies consisted of the following:

Portfolio Company

Amount Committed

Amount Funded as of July 31, 2019

MVC Private Equity Fund LP

20.1 million

14.6 million

RuMe

2.2 million

1.7 million

Custom Alloy

3.0 million

800,000

Total

25.3 million

17.1 million

Portfolio Company

Amount Committed

Amount Funded as
of April 30, 2020

MVC Private Equity Fund LP

$20.1 million

$14.6 million

RuMe

$2.2 million

RuMe

$700,000

$727,000

Custom Alloy

$3.8 million

$3.7 million

Total

$26.8 million

$21.2 million

~~Portfolio Company~~	~~Amount Committed~~		~~Amount Funded as of October 31, 2018~~
~~MVC Private Equity Fund LP~~	$	~~20.1 million~~	$	~~14.6 million~~
~~RuMe~~	$	~~1.6 million~~	$	~~1.4 million~~
~~Total~~	$	~~21.7 million~~	$	~~16.0 million~~

Portfolio Company	Amount Committed		Amount Funded as of October 31, 2019
MVC Private Equity Fund LP		$20.1 million		$14.6 million
RuMe		$2.2 million		$2.1 million
RuMe		$400,000		$400,000
Custom Alloy		$3.0 million		$2.1 million
Total		$25.7 million		$19.2 million

Guarantees:

At ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, the Company had the following commitments to guarantee various loans and mortgages:

Guarantee	Amount Committed		Amount Funded as of ~~July 31, 2019~~April 30, 2020
MVC Automotive	$ 4.0 million	~~3.5 million~~	— -
Total	$ 4.0 million	~~3.5 million~~	— -

Guarantee	Amount Committed		Amount Funded as of October 31, ~~2018~~2019
MVC Automotive	$ 4.0 million	~~6.2 million~~	— -
~~RuMe~~ Total	$ 4.0 million	~~1.0 million~~	— -
~~Total~~	$	~~7.2 million~~	—

ASC 460,Guarantees, requires the Company to estimate the fair value of the guarantee obligation at its inception and requires the Company to assess whether a probable loss contingency exists in accordance with the requirements of ASC 450, Contingencies. At ~~July 31, 2019,~~April 30, 2020, the Valuation Committee estimated the combined fair values of the guarantee obligation noted above to be $0 or a liability of approximately $0.

These guarantees are further described below, together with the ~~Company’s~~Company's other commitments.

On January 16, 2008, the Company agreed to support a 4.0 million Euro mortgage for a Ford dealership owned and operated by MVC Automotive through making financing available to the dealership and agreeing under certain circumstances not to reduce its equity stake in MVC Automotive. Over time, Erste Bank, the bank extending the mortgage to MVC Automotive, increased the amount of the mortgage. The balance of the guarantee as of ~~July 31, 2019~~April 30, 2020 is approximately ~~3.2 million~~277,000 Euro (equivalent to approximately ~~$3.5 million)~~$303,000).

The Company agreed to cash collateralize a $300,000 third party letter of credit for RuMe, which is now collateralized with Credit Facility IV (defined below) and still a commitment of the Company as of April 30, ~~2019.~~2020. Previously, the Company guaranteed $1.0 million of RuMe’s indebtedness to Colorado Business Bank and also provided RuMe an additional $2.0 million letter of credit. On April 25, 2019, the $1.0 million guarantee and the $2.0 million letter of credit were refinanced and replaced with a new $3.0 million letter of credit. The ~~letter~~two letters of credit had a fair value of approximately -$~~592,000~~697,000 or a liability of ~~$592,000~~$697,000 as of ~~July 31, 2019.~~April 30, 2020. The $3.0 million letter of credit is collateralized with Credit Facility IV (defined below).

On October 29, 2010, through MVC Partners and MVCFS, the Company committed to invest approximately $20.1 million in the PE Fund, for which an indirect wholly-owned subsidiary of the Company serves as GP. The PE Fund closed on approximately $104 million of capital commitments. During the fiscal year ended October 31, 2012 and thereafter, MVC Partners was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in the PE Fund is a substantial portion of MVC Partners operations. The investment period related to the PE Fund has ended. Additional capital may be called for follow-on investments in existing portfolio companies of the PE Fund or to pay operating expenses of the PE Fund until the partnership is terminated. On December 27, 2018, the Company received proceeds of approximately $7.5 million from the PE Fund related to the sale of Plymouth Rock Energy, LLC, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Plymouth Rock Energy, LLC investment totaled approximately $2.5 million, resulting in a realized gain of approximately $5.0 million. On October 25, 2019, the PE Fund sold Focus Pointe, a portfolio company of the PE Fund. The Company received proceeds of approximately $2.7 million related to the sale. The Company’s pro-rata share of the PE Fund’s cost basis in the Focus Pointe investment totaled approximately $1.9 million, resulting in a realized gain of approximately $800,000. As of ~~July 31, 2019,~~April 30, 2020, $14.6 million of the Company’s commitment was funded.

~~During the fiscal year ended~~As of October 31, ~~2016, the Company agreed to cash collateralize~~2019, RuMe had a ~~$500,000 working capital~~$2.2 million line of credit ~~for an entity partially owned by MVC Environmental~~ provided by Branch Banking and Trust Company (“BB&T”). During the fiscal year ended October 31, 2017, the cash collateral securing the MVC Environmental working capital line of credit was released and a new credit facility was entered into secured by a $1.0 million letter of credit. On February 16, 2018, the letter of credit was increased to $3.0 million. On November 27, 2018, the Company ~~funded approximately $3.0 million related to the letter of credit, which was called by the beneficiary.~~

On February 28, 2018, the Company committed $6.0 million to Custom Alloy in the form of a first lien loan with an interest rate of 10% and a maturity date of October 31, 2018. On November 9, 2018, Custom Alloy repaid its first lien loan in full, including all accrued interest. The loan is no longer a commitment of the Company as of July 31, 2019.

~~During the fiscal year ended October 31, 2018, the Company provided RuMe a $1.6 million line of credit~~ with a 10% interest rate and a maturity date of March 31, ~~2020.~~2021. The outstanding balance as of October 31, ~~2018~~2019 and April 30, 2020 was approximately ~~$1.5 million. During the nine month period ended July 31, 2019, the line of credit was increased to~~$2.1 million and $2.2 ~~million. The outstanding balance as of July 31, 2019 was approximately $1.8~~ million, respectively, including capitalized PIK interest.

~~During~~ Also, during the fiscal year ended October 31, ~~2018,~~2019, the Company provided ~~Custom Alloy~~RuMe a $2.0 million and a $1.4 million letter of credit as part of a restructuring. The $2.0 million letter of credit matured on November 27, 2018 and is no longer a commitment of the Company. On October 31, 2018, the $1.4 million letter of credit was drawn, which resulted in the Company receiving a $1.4 million term note$400,000 revolver with a ~~15%~~10% interest rate and a maturity date of February 28, 2020. The outstanding balance of the revolver as of October 31, 2019 was approximately $404,000, including capitalized PIK interest. During the six month period ended April 30, 2020, the revolver was increased to $700,000 and the maturity date was extended to March 31, 2021. ~~On November 13, 2018, Custom Alloy repaid its $1.4 million second lien loan in full, including all accrued interest.~~ The ~~loan is no longer a commitment~~outstanding balance of the ~~Company~~revolver as of ~~July 31, 2019.~~April 30, 2020 was approximately $727,000, including capitalized PIK interest.

~~During the fiscal year ended~~As of October 31, ~~2018, the Company provided~~2019, Security Holdings had a ~~3.3~~4.8 million Euro letter of credit. During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the letter of credit was ~~increased~~reduced to ~~5.3~~3.8 million Euro. The letter of credit had a fair value of approximately -$~~257,000~~185,000 or a liability of ~~$257,000~~$185,000 as of ~~July 31, 2019.~~April 30, 2020. The letter of credit is collateralized with Credit Facility IV (defined below).

~~On April 30,~~As of October 31, 2019, ~~the Company provided~~ Custom Alloy had a $3.0 million line of credit provided by the Company with a 15% interest rate and a maturity date of April 30, 2020. ~~During the nine month period ended July 31, 2019, the Company funded $800,000, which is the~~The balance outstanding as of ~~July~~October 31, ~~2019.~~2019 was approximately $2.1 million. During the six month period ended April 30, 2020, the Company increased the commitment to approximately $3.8 million and funded approximately $1.7 million, resulting in a balance outstanding as of April 30, 2020 of approximately $3.7 million. The maturity date was also extended to April 30, 2021.

As of ~~July 31, 2019,~~April 30, 2020, the total fair value associated with potential obligations related to guarantees and letters of credit was approximately -$~~849,000~~882,000 or a liability of ~~$849,000.~~$882,000.

Commitments of the Company

On July 31, 2013, the Company entered into a one-year, $50 million revolving credit facility (“Credit Facility II”) with Branch Banking and Trust Company (“BB~~&T.~~&T”). On January 31, 2014, Credit Facility II was increased to a $100 million revolving credit facility. On December 1, 2015, Credit Facility II was renewed and expired on May 31, 2016, at which time all outstanding amounts under it were due and repaid. On June 30, 2016, Credit Facility II was renewed and reduced to a $50 million revolving credit facility, which expired on February 28, 2017, as of which time all outstanding amounts under it were due and repaid. On February 28, 2017, Credit Facility II was renewed and increased to a $100 million revolving credit facility and expired on August 31, 2017. On August 31, 2017, Credit Facility II was renewed and decreased to a $25 million revolving credit facility, which was to expire on August 31, 2018. There was no change to the interest rate or unused fee on the revolving credit facility. The Company incurred closing costs associated with this transaction of $62,500. On August 10, 2018, Credit Facility II was renewed to August 30, ~~2019.~~2019 and on August 30, 2019, Credit Facility II was extended to August 31, 2020. The Company incurred closing costs associated with ~~this transaction~~each of these transactions of $50,000 with no change in terms other than the expiration date. At October 31, ~~2018~~2019 and ~~July 31, 2019,~~April 30, 2020, there was ~~$25.0 million and $0, respectively,~~no amount outstanding on Credit Facility II. Credit Facility II is used to provide the Company with better overall financial flexibility in managing its investment portfolio. Borrowings under Credit Facility II bear interest at LIBOR plus 125 basis points. In addition, the Company is also subject to a 25 basis point commitment fee for the average amount of Credit Facility II that is unused during each fiscal quarter. The Company paid closing fees, legal and other costs associated with these transactions. These costs are amortized over the life of the facility. Borrowings under Credit Facility II will be secured by cash, short-term and long-term U.S. Treasury securities and other governmental agency securities. ~~As of July 31, 2019, the Company was in compliance with all covenants related to Credit Facility II.~~

On December 9, 2015, the Company entered into a three-year, $50 million revolving borrowing base credit facility (“Credit Facility III”) with Santander Bank N.A. as a lender and lead agent and Wintrust Bank as a lender and syndication agent. Credit Facility III was to expire on December 9, 2018. Credit Facility III can, under certain conditions, be increased up to $85 million. The new facility bears an interest rate of LIBOR plus 3.75% or the prime rate plus 1% (at the Company’s option), and includes a 1% closing fee of the commitment amount and a 0.75% unused fee. The compensating balancePlease see “Subsequent Events” section for the revolving credit facility is $5.0 million, which is reflected as restricted cash or cash equivalents on the Company’s Consolidated Balance Sheets. On February 26, 2018, in connection with the U.S. Gas Sale, Credit Facility III was amended, effective as of July 5, 2017, to exclude from pledged collateral the U.S. Gas second lien loan. On May 7, 2018, the terms of Credit Facility III were amended to, among other things: (i) increase the limit for unsecured indebtedness and certain unsecured guaranty obligations of portfolio companies of the Company to $10,000,000 and (ii) increase the limit on permitted investments of the Company with respect to certain debt, equity and follow-on investments to $28,500,000. All other material terms of Credit Facility III remained unchanged. As of October 31, 2018, there was no outstanding balance on Credit Facility III and the Company was in compliance with all covenants related to Credit Facility III. On December 7, 2018, Credit Facility III was renewed until March 9, 2019. On January 29, 2019, Credit Facility III was terminated. As of July 31, 2019, Credit Facility III was no longer a commitment of the Company.more information.

On November 15, 2017, the Company completed a public offering of $100,000,000 aggregate principal amount of its 6.25% senior notes due November 30, 2022 (“Senior Notes II”). In addition, on November 20, 2017, the underwriters exercised an over-allotment option to purchase an additional $15 million in aggregate principal amount of Senior Notes II (together with the offering on November 15, the “Offering”). The Senior Notes II have an interest rate of 6.25% per year payable quarterly on January 15, April 15, July 15, and October 15 of each year. After deducting underwriting fees and discounts and expenses, the Offering resulted in net proceeds to the Company of approximately $111.4 million. The Offering expenses incurred are amortized over the term of the Senior Notes II. Proceeds from the offering were used to repay the Senior Notes in full, including all accrued interest. On February 25, 2020, the Company notified U.S. Bank National Association, the trustee for the Senior Notes II, of the Company’s election to redeem $20.0 million aggregate principal amount of the Senior Notes II outstanding at a price equal to 100% of the principal amount of the Senior Notes II, plus accrued and unpaid interest on the Senior Notes II to, but excluding, the date of redemption. The Company funded the redemption with cash on hand. As of ~~July 31, 2019,~~April 30, 2020, the Senior Notes II had a total outstanding amount of ~~$115.0~~$95.0 million, net of deferred financing fees the balance was approximately ~~$112.5~~$93.4 million, with a market value of approximately ~~$119.1~~$81.9 million.

On January 29, 2019, the Company entered into a three year, $35 million revolving credit facility (“("Credit Facility ~~IV”~~IV") with People’s United Bank, National Association as lender and lead agent. Credit Facility IV can, under certain conditions, be increased up to $85 million. Credit Facility IV will expire on January 29, 2022, at which time all outstanding amounts under Credit Facility IV will be due and payable. Borrowings under the

Credit Facility bear interest at a rate of LIBOR plus 2.85%, or the prime rate plus 0.5% at the Company’s discretion. In addition, the Company was subject to (i) a closing fee of 1% of the commitment amount paid at closing, (ii) a one-time structuring fee in the amount of $100,000 paid at closing, (iii) an unused line fee, which is payable monthly, of 0.75% if the Company draws less than $25 million on Credit Facility IV or 0.60% if the Company draws more than $25 million on Credit Facility IV, and (iv) an annual administrative agent fee in the amount of $100,000 in 2019 and $200,000 in each year thereafter. The compensating balance for the revolving credit facility is $5.0 million, which is reflected as restricted cash equivalents on the Company’s Consolidated Balance Sheets. On June 19, 2019, in order to increase the size of the Credit Facility IV, the credit facility was amended to add Bank Leumi USA as an additional lender. The amendment increased the size of Credit Facility IV by $15.0 million to $50.0 million. All other material terms of the Credit Facility remain unchanged. In addition, the Company was subject to a closing fee of 1% of the additional commitment amount of $15.0 million to be paid at closing. As of ~~July 31, 2019,~~April 30, 2020, there was ~~$22.1 million~~no amount outstanding on Credit Facility IV and the Company was in compliance with the maximum balance sheet leverage covenant related to Credit Facility IV.

The Company enters into contracts with portfolio companies and other parties that contain a variety of indemnifications. The ~~Company’s~~Company's maximum exposure under these arrangements is unknown. However, the Company has not experienced claims or losses pursuant to these contracts and believes the risk of loss related to indemnifications to be remote.

10. Management

On November 6, 2003, Michael Tokarz assumed his positions as Chairman, Portfolio Manager and Director of the Company. From November 6, 2003 to October 31, 2006, the Company was internally managed. Effective November 1, 2006, Mr. ~~Tokarz’s~~Tokarz's employment agreement with the Company terminated and the obligations under that agreement were superseded by those under the Advisory Agreement entered into with TTG Advisers. Under the terms of the Advisory Agreement, the Company pays TTG Advisers a base management fee and an incentive fee for its provision of investment advisory and management services.

Our Board of Directors, including all of the Independent Directors, last approved a renewal of the Advisory Agreement at their in-person meeting held on October ~~30, 2018.~~31, 2019.

Under the terms of the Advisory Agreement, TTG Advisers determines, consistent with the ~~Company’s~~Company's investment strategy, the composition of the ~~Company’s~~Company's portfolio, the nature and timing of the changes to the ~~Company’s~~Company's portfolio and the manner of implementing such changes. TTG Advisers also identifies and negotiates the structure of the ~~Company’s~~Company's investments (including performing due diligence on prospective Portfolio Companies), closes and monitors the ~~Company’s~~Company's investments, determines the securities and other assets purchased, retains or sells and oversees the administration, recordkeeping and compliance functions of the Company and/or third parties performing such functions for the Company. TTG ~~Advisers’~~Advisers' services under the Advisory Agreement are not exclusive, and it may furnish similar services to other entities. Pursuant to the Advisory Agreement, the Company is required to pay TTG Advisers a fee for investment advisory and management services consisting of two components—a base management fee and an incentive fee. The base management fee is calculated at 2.0% per annum of the ~~Company’s~~Company's total assets excluding cash, the value of any investment in a Third-Party Vehicle covered by a Separate Agreement (as defined in the Advisory Agreement) and the value of any investment by the Company not made in portfolio companies (“("Non-Eligible ~~Assets”~~Assets") but including assets purchased with borrowed funds that are not Non-Eligible Assets. The incentive fee consists of two parts: (i) one part is based on our pre-incentive fee net operating income; and (ii) the other part is based on the capital gains realized on our portfolio of securities acquired after November 1, 2003.

The Advisory Agreement provides for an expense cap pursuant to which TTG Advisers will absorb or reimburse operating expenses of the Company, to the extent necessary to limit the ~~Company’s~~Company's expense ratio (the consolidated expenses of the Company, including any amounts payable to TTG Advisers under the base management fee, but excluding the amount of any interest and other direct borrowing costs, taxes, incentive compensation and extraordinary expenses taken as a percentage of the ~~Company’s~~Company's average net assets) to 3.5% in each of the 2009 and 2010 fiscal years.

On various dates, TTG Advisers and the Company entered into annual agreements to extend the expense cap of 3.5% to the 2011, 2012, 2013 and 2014 fiscal years (“Expense Limitation Agreement”). The Company and the Adviser agreed to continue the expense cap into fiscal year 2015 and fiscal year 2016, though they lowered the expense cap to 3.25% and modified the methodology so that the cap is applied to limit the Company’s ratio of expenses to total assets less cash (the “Modified Methodology”), consistent with the asset level used to calculate the base management fee. (The expenses covered by the cap remain unchanged.) On October 28, 2016, the Board of Directors, including all of the Independent Directors, approved the renewal of the Advisory Agreement for the 2017 fiscal year. Further, the Adviser agreed to continue to waive a portion of the base management fee so that it is reduced to 1.50% for fiscal year 2017. In March 2016, the Adviser agreed to modify its prior agreement to waive, effective November 1, 2015, the first $1.0 million of capital gains incentive fee due under the Advisory Agreement, such that the $1.0 million waiver of incentive fee would be applied to any incentive fee due under the agreement, whether it is a capital gains incentive fee or net operating income incentive fee. Furthermore, the Company and the Adviser, similar to fiscal year 2016, agreed on an expense cap for fiscal years 2017 through ~~2019~~2020 of 3.25% under the Modified Methodology. The amount of any payments made by the GP of the PE Fund to TTG Advisers pursuant to the Portfolio Management Agreement between the GP and TTG Advisers respecting the PE Fund continues to be excluded from the calculation of the ~~Company’s~~Company's expense ratio under the Expense Limitation Agreement. In addition, for fiscal years 2010 through ~~2018,~~2020, TTG Advisers voluntarily agreed to waive $150,000 of expenses that the Company is obligated to reimburse to TTG Advisers under the Advisory Agreement for its allocable portion of the compensation payable to certain officers of the Company, which may not exceed $200,000 per year in the aggregate (the “Voluntary Waiver”). TTG Advisers also voluntarily agreed that any assets of the Company that are invested in exchange-traded funds would not be taken into account in the calculation of the base management fee due to TTG Advisers under the Advisory Agreement. As of ~~October 31, 2018,~~April 30, 2020, the Company did not have an investment in an exchange traded fund. In addition, the Adviser has agreed, effective November 1, 2017, to a revised management fee structure that ties management fees to the NAV discount¹ as follows: (A) If the Company’s NAV discount is greater than 20%, the management fee for the current quarter is reduced to 1.25%; (B) If the NAV discount is between 10% and 20%, the management fee will be 1.50%; and (C) If the NAV discount is less than 10% or eliminated, the 1.50% management fee would be re-examined, but in no event would it exceed 1.75%. For the quarter ended ~~July 31, 2019,~~April 30, 2020, the effective management fee was 1.25%.

On October 29, 2010, through MVC Partners and MVCFS, the Company committed to invest approximately $20.1 million in the PE Fund. The PE Fund has closed on approximately $104 million of capital commitments. The ~~Company’s~~Company's Board of Directors authorized the establishment of, and investment in, the PE Fund for a variety of reasons, including the ~~Company’s~~Company's ability to make additional investments that represent more than 5% of its total assets or more than 10% of the outstanding voting securities of the issuer (“("Non-Diversified ~~Investments”~~Investments") through the PE Fund. As previously disclosed, the Company may be restricted in its ability to make Non-Diversified Investments. For services provided to the PE Fund, the GP and MVC Partners are together entitled to receive 25% of all management fees and other fees paid by the PE Fund and its portfolio companies and up to 30% of the carried interest generated by the PE Fund. Further, at the direction of the Board of Directors, the GP retained TTG Advisers to serve as the portfolio manager of the PE Fund. In exchange for providing those services, and pursuant to the Board of ~~Directors’~~Directors' authorization and direction, TTG Advisers is entitled to receive the balance of the fees generated by the PE Fund and its portfolio companies and a portion of any carried interest generated by the PE Fund. Given this separate arrangement with the GP and the PE Fund (the ~~“PM Agreement”~~"PM Agreement"), under the terms of the ~~Company’s~~Company's Advisory Agreement with TTG Advisers, TTG Advisers is not entitled to receive from the Company a management fee or an incentive fee on assets of the Company that are invested in the PE Fund. However, the Company’s limited partnership interest and GP interest in the PE Fund are subject to the PE Fund’s annual management fee, a portion of which, as described above, is retained by the Company and not paid out to TTG Advisers as portfolio manager of the PE Fund. During the fiscal year ended October 31, 2012 and thereafter, MVC Partners was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in

1 The NAV discount referred to herein is the average daily discount to NAV for a quarter. The discount is determined using the most recently determined NAV per share, which is typically the prior quarter end’s NAV per share and the Company stock closing price on any given day for the quarter.

the PE Fund is a substantial portion of MVC Partners operations. Previously, MVC Partners was presented as a Portfolio Company on the Consolidated Schedules of Investments. The consolidation of MVC Partners has not had any material effect on the financial position or net results of operations of the Company. There are additional disclosures resulting from this consolidation.

Management and portfolio fees (e.g., closing or monitoring fees) generated by the PE Fund (including its portfolio companies) that are paid to the GP are classified on the Consolidated Statements of Operations as Management fee income - Asset Management and Portfolio fee income - Asset Management, respectively. The portion of such fees that the GP pays to TTG Advisers (in accordance with its PM Agreement described above) are classified on the Consolidated Statements of Operations as Management fee - Asset Management and Portfolio fees - Asset Management. Under the PE ~~Fund’s~~Fund's agreements, a significant portion of the portfolio fees that are paid by the PE Fund’s portfolio companies to the GP and TTG Advisers is subject to recoupment by the PE Fund in the form of an offset to future management fees paid by the PE Fund.

11. Incentive Compensation

Effective November 1, 2006, Mr. ~~Tokarz’s~~Tokarz's employment agreement with the Company terminated and the obligations under Mr. ~~Tokarz’s~~Tokarz's agreement were superseded by those under the Advisory Agreement entered into with TTG Advisers. Pursuant to the Advisory Agreement, the Company pays an incentive fee to TTG Advisers which is generally: (i) 20% of pre-incentive fee net operating income and (ii) 20% of cumulative aggregate net realized capital gains less aggregate unrealized depreciation (on our portfolio securities acquired after November 1, 2003). TTG Advisers is entitled to an incentive fee with respect to our pre-incentive fee net operating income in each fiscal quarter as follows: no incentive fee in any fiscal quarter in which our pre-incentive fee net operating income does not exceed the lower hurdle rate of 1.75% of net assets, 100% of our pre-incentive fee net operating income with respect to that portion of such pre-incentive fee net operating income, if any, that exceeds the lower hurdle amount but is less than 2.1875% of net assets in any fiscal quarter and 20% of the amount of our pre-incentive fee net operating income, if any, that exceeds 2.1875% of net assets in any fiscal quarter. Under the Advisory Agreement, the accrual of the provision for incentive compensation for net realized capital gains is consistent with the accrual that was required under the employment agreement with Mr. Tokarz.

¹ The NAV discount referred to herein is the average daily discount to NAV for a quarter. The discount is determined using the most recently determined NAV per share, which is typically the prior quarter end’s NAV per share and the Company stock closing price on any given day for the quarter.

On October 31, 2019, per the Current Incentive Fee Modification, the Adviser indicated its voluntary agreement to modify the calculation of the Income Incentive Fee for the fiscal year ended October 31, 2020, so that the fee accruedshall be subject to the following additional provisions: (A) in lieu of the “Lower Hurdle Amount” and the “Higher Hurdle Amount” set forth in the Advisory Agreement and in lieu of the Income Incentive Fee calculations applied on a quarterly basis under such agreement, the Income Incentive Fee will be computed pursuant to the calculations hereunder on an annual basis and shall be subject to a single 8 percent hurdle rate such that no Income Incentive Fee will be paid unless the pre-Incentive Fee net operating income for the fiscal year in which it is calculated exceeds 8 percent of the Fund’s aggregate NAV calculated as of the end of the fiscal year in which such fee is being calculated (the “New Hurdle Amount”) and the Income Incentive Fee shall be equal to the following: (i) 50% of the amount by which such pre-Incentive Fee net operating income for the fiscal year exceeds the New Hurdle Amount but is less than 8.75% (the “Catch-Up Hurdle”); and (ii) 20% of the amount by which such pre-Incentive Fee net operating income for the fiscal year equals or exceeds the Catch-Up Hurdle, subject to the qualifications/limitations below; (B) the Income Incentive Fee will be accrued only to the extent 20.0% of the cumulative net increase in net assets resulting from operations over the fiscal year for which such fees are being calculated and the 2 preceding fiscal years (but no earlier than the year ended October 31, 2020) exceeds the cumulative Income Incentive Fees accrued and/or paid for such 2 fiscal years (but no earlier than the year ended October 31, 2020). For the foregoing purposes, the “cumulative net increases in net assets resulting from operations” is the amount for the fiscal year of: the sum of pre-Incentive Fee net investment income (loss), realized gains and realized appreciation resulting from the “Yield Portfolio” (as defined by mutual agreement between the Company and the Adviser), less any realized losses and unrealized depreciation attributable to the Yield Portfolio, provided that such reductions (for losses/depreciation) shall be reduced by the amount of any carried-interest gains generated from the MVC PE Fund over the year for which such fees are being calculated and the 2 preceding fiscal years (but no earlier than the year ended October 31, 2020), but only to the extent such carried-interest gains have not previously been applied to reduce losses/depreciation under this Clause (B); and (C) the amounts of any actual Income Incentive Fee payment reductions caused by application of clause (A) above (in lieu of applying the hurdle rates and catch up formula set forth in the Advisory Agreement) shall be credited against any unrealized depreciation or realized losses applied with respect to the application of Clause (B) above (on a one-time basis). Further, absent advance notice by the Adviser to the Board (at least 60 days’ prior to the fiscal year end), the Current Incentive Fee Modification shall continue automatically for each subsequent fiscal year.

At October 31, ~~2018,~~2019, the provision for estimated incentive compensation was $0. During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, there was no change in the provision for incentive compensation as 20% of the cumulative aggregate net realized capital gains less aggregate unrealized depreciation was less than $0. The provision for incentive compensation includes the Valuation Committee’s determination to ~~decrease~~increase the fair values of ~~ten~~three of the Company’s portfolio investments ~~(Advantage, Highpoint, Initials, Legal Solutions, MVC Environmental, RuMe, Trientis, U.S. Spray, U.S. Gas~~(Apex, GTM and ~~Equus)~~Trientis) by a total of approximately ~~$14.4~~$1.9 million. The provision also includes the Valuation Committee’s determination to ~~increase~~decrease the fair values of ~~eleven~~twenty two of the Company’s portfolio investments ~~(Array,~~(Advantage, Black Diamond, Custom Alloy, Dukane, Equus, Global Prairie, Highpoint, HTI, Initials, IPCC, Jedson, JSC Tekers, Legal Solutions, MVC Automotive, Powers, RuMe, Security Holdings, SMA, Tuf-Tug, Turf, ~~Crius, Centile escrow~~U.S. Spray and ~~MVC Automotive)~~U.S. Gas) by a total of approximately ~~$11.9~~$47.3 million. Also, for the quarter ended ~~July 31, 2019,~~April 30, 2020, no provision was recorded for the net operating income portion of the incentive fee as pre-incentive fee net operating income for the quarter did not exceed the hurdle rate. For fiscal years ending on October 31, 2019 and October 31, 2020, the Adviser agreed to voluntarily modify the calculation of the Income Incentive Fee so that the fee accrued shall equal the lesser of: (i) the amount of the Income Incentive Fee computed and determined quarterly as currently set forth in the Advisory Agreement; and (ii) the amount of the Income Incentive Fee computed and determined on an annual basis (in lieu of quarterly). Further, regardless of the amount of Income Incentive Fee computed or accrued, the Adviser agreed to defer collection of any Income Incentive Fee due and payable for the fiscal year until after the completion of the annual audit for such fiscal year.

At October 31, ~~2017,~~2018, the provision for estimated incentive compensation was ~~approximately $2.1 million.~~$0. During the fiscal year ended October 31, ~~2018, the provision for incentive compensation~~2019, there was ~~decreased by a net amount of approximately $2.1 million to $0, including both the pre-incentive fee net operating income and the capital gain incentive fee. The net decrease~~no change in the provision for incentive compensation ~~reflects~~as 20% of the cumulative aggregate net realized ~~loss on the U.S. Gas loan, the realized gain on the Centile equity and~~capital gains less aggregate unrealized depreciation was less than $0. The provision for incentive compensation includes the Valuation Committee’s

determination to decrease the fair values of ~~sixteen~~ten of the Company’s portfolio investments (Advantage, ~~Dukane, Equus, HTI,~~Highpoint, Initials, ~~JSC Tekers,~~Legal Solutions, MVC Environmental, RuMe, ~~Security Holdings,~~ Trientis, ~~Turf,~~U.S. Spray, U.S. Gas ~~SCSD, U.S. Tech, Centile escrow~~ and ~~Crius)~~Equus) by a total of approximately ~~$23.7~~$17.9 million. The ~~net decrease in the~~ provision also ~~reflects~~includes the Valuation Committee’s determination to increase the fair values of ~~five~~twelve of the Company’s portfolio investments ~~(Centile,~~(Array, Black Diamond, Custom Alloy, ~~Highpoint, Legal Solutions~~Dukane, HTI, JSC Tekers, Security Holdings, Tuf-Tug, Turf, Crius, Centile escrow and MVC Automotive) by a total of approximately ~~$8.1~~$12.8 million. Also, for the quarter ended October 31, ~~2018,~~2019, no ~~provision~~payable was recorded for the net operating income portion of the incentive fee as pre-incentive fee net operating income for the quarter did not exceed the hurdle rate. As of October 31, 2018, the balance of the Deferred Portion of the incentive compensation payable was approximately $2.5 million. During the fiscal year ended October 31, 2019, the Company made an approximately $975,000 incentive compensation payment to TTG Advisers related to the sale of the Crius equity units, resulting in a balance of approximately $1.5 million as of October 31, 2019.

12. Tax Matters

On October 31, ~~2018,~~2019, the Company ~~did not have~~had a net capital loss carryforward of approximately $9.3 million and had net unrealized losses of approximately ~~$85.1~~$75.4 million. The Company had approximately ~~$86.9~~$119.3 million in net unrealized losses as of ~~July 31, 2019.~~April 30, 2020.

ASC 740, Income Taxes, provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the ~~Company’s~~Company's tax returns to determine whether the tax positions are ~~“more-likely-than-not”~~"more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet a ~~“more-likely-than-not”~~"more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current period. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the consolidated statement of operations. During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Company ~~recorded approximately $263,000 of additional~~did not incur any interest ~~expense associated with the deferred~~or penalties related to unrecognized tax liability resulting from the installment sale treatment applied to the realized gain associated with the U.S. Gas note. The interest expense is required to be paid under Internal Revenue Service (“IRS”) Code section 453A. The Company has discussed with the IRS whether the IRS would be willing to issue a ruling to the Company that the Company is not liable for this interest expense given its “pass-through” status as a Regulated Investment Company. The Company has not yet received a response from the IRS, but has determined to record the associated interest expense during the period.benefits. Although we file federal and state tax returns, our major tax jurisdiction is federal for the Company and MVCFS. The fiscal years ~~2013~~2014 through ~~2017~~2018 for the Company and MVCFS remain subject to examination by the IRS.

OnDecember 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the Act, each fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

13.Dividends and Distributions to Shareholders, Share Repurchase Program and Tender Offer

As a regulated investment company ~~(“RIC”~~("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended (the ~~“Code”~~"Code"), the Company is required to distribute to its shareholders, in a timely manner, at least 90% of its investment company taxable and tax-exempt income each year. If the Company distributes, in a calendar year, at least 98% of its ordinary income for such calendar year and 98.2% of its capital gain net income for the 12-month period ending on October 31 of such calendar year (as well as any portion of the respective 2% balances not distributed in the previous year), it will not be subject to the 4% non-deductible federal excise tax on certain undistributed income of RICs.

Dividends and capital gain distributions, if any, are recorded on the ex-dividend date. Dividends and capital gain distributions are generally declared and paid quarterly according to the ~~Company’s~~Company's policy established on July 11, 2005. An additional distribution may be paid by the Company to avoid imposition of federal income tax on any remaining undistributed net investment income and capital gains. Distributions can be made payable by the Company either in the form of a cash distribution or a stock dividend. The amount and character of income and capital gain distributions are determined in accordance with income tax regulations that may differ from U.S. generally accepted accounting principles. These differences are due primarily to differing treatments of income and gain on various investment securities held by the Company, differing treatments of expenses paid by the Company, timing differences and differing characterizations of distributions made by the Company. Key examples of the primary differences in expenses paid are the accounting treatment of MVCFS (which is consolidated for GAAP purposes, but not income tax purposes) and the variation in treatment of incentive compensation expense. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications and may affect the allocation between net operating income, net realized gain (loss) and paid-in capital. Additionally, the characterization of the distribution is based upon current results, and such characterization may change based upon results for the year.

All of our shareholders who hold shares of common stock in their own name will automatically be enrolled in our dividend reinvestment plan (the ~~“Plan”~~"Plan"). All such shareholders will have any cash dividends and distributions automatically reinvested by Computershare Ltd. (“the Plan Agent”) in shares of our common stock. Of course, any shareholder may elect to receive his or her dividends and distributions in cash. Currently, the Company has a policy of paying quarterly dividends to shareholders. For any of our shares that are held by banks, brokers or other entities that hold our shares as nominees for individual shareholders, the Plan Agent will administer the Plan on the basis of the number of shares certified by any nominee as being registered for shareholders that have not elected to receive dividends and distributions in cash. To receive your dividends and distributions in cash, you must notify the Plan Agent, broker or other entity that holds the shares.

For the Quarter Ended January 31, ~~2019~~2020

On December ~~21, 2018,~~23, 2019, the ~~Company’s~~Company's Board of Directors declared a dividend of ~~$0.15~~$0.17 per share. The dividend was paid on January ~~9, 2019~~10, 2020 to shareholders of record on January ~~2, 2019~~3, 2020 and totaled approximately ~~$2.7~~$3.0 million.

During the quarter ended January 31, ~~2019,~~2020, as part of the ~~Company’s~~Company's dividend reinvestment plan for our common stockholders, the Plan Agent purchased ~~9,949 shares of our common stock at an average price of $8.92, including commission, in the open market in order to satisfy the reinvestment portion of our dividends under the Plan.~~

~~For the Quarter Ended April 30, 2019~~

On April 12, 2019, the Company’s Board of Directors declared a dividend of $0.15 per share. The dividend was paid on April 30, 2019 to shareholders of record on April 23, 2019 and totaled approximately $2.7 million.

During the quarter ended April 30, 2019, as part of the Company’s dividend reinvestment plan for our common stockholders, the Plan Agent purchased 9,833 shares of our common stock at an average price of $9.13, including commission, in the open market in order to satisfy the reinvestment portion of our dividends under the Plan.

~~For the Quarter Ended July 31, 2019~~

On July 15, 2019, the Company’s Board of Directors declared a dividend of $0.15 per share. The dividend was paid on July 31, 2019 to shareholders of record on July 25, 2019 and totaled approximately $2.7 million.

~~During the quarter ended July 31, 2019, as part of the Company’s dividend reinvestment plan for our common stockholders, the Plan Agent purchased 9,761~~11,467 shares of our common stock at an average price of $9.35, including commission, in the open market in order to satisfy the reinvestment portion of our dividends under the Plan.

For the Quarter Ended April 30, 2020

On April 14, 2020, the Company's Board of Directors declared a dividend of $0.17 per share. The dividend was paid on April 30, 2020 to shareholders of record on April 24, 2020 and totaled approximately $3.0 million.

During the quarter ended April 30, 2020, as part of the Company's dividend reinvestment plan for our common stockholders, the Plan Agent purchased 6,159 shares of our common stock at an average price of $6.81, including commission, in the open market in order to satisfy the reinvestment portion of our dividends under the Plan.

~~SHARE REPURCHASE PROGRAM~~Share Repurchase Program

On April 3, 2013, the Company’s Board of Directors authorized an expanded share repurchase program to opportunistically buy back shares in the market in an effort to narrow the market discount of its shares. The previously authorized $5 million limit has been eliminated. Under the repurchase program, shares may be repurchased from time to time at prevailing market prices. The repurchase program does not obligate the Company to acquire any specific number of shares and may be discontinued at any time.

On September 18, 2018, the Company’s Board of Directors approved the Company’s implementation of a $10 million stock repurchase program. The program, which was to be completed by the end of the 2018 calendar year, was to consist of an issuer tender offer and/or open market repurchases. In addition, the Company’s Board of Directors directed the Company to pursue an additional $5 million in stock repurchases in the open market in 2019, using a portion of the proceeds of equity monetizations and subject to MVC’s common stock continuing to trade at a significant discount to NAV. Open market repurchases would be made pursuant to the Company’s unlimited stock repurchase program adopted in 2013. On October 11, 2018, pursuant to the repurchase program, the Company entered into the Rule 10b5-1 Plan that qualifies for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act. See the Company’s current report on Form 8-K, filed on October 12, 2018, for further details regarding the 10b5-1 Plan.

On November 28, 2018, the Company announced its determination to extend the repurchase program beyond December 31, 2018 until the full $10 million of shares are repurchased pursuant to the repurchase program. During the ~~six month period~~fiscal year ended ~~April 30,~~October 31, 2019, the Company completed the repurchase program.

The following table represents open-market purchases made under our stock repurchase program for the fiscal years ended October 31, 2013 through October 31, 2019. There were no share repurchases made during the ~~nine~~six month period ended ~~July 31, 2019.~~April 30, 2020.

Period *	Total Number of Shares Purchased	Average Price Paid per Share including commission		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares Purchased Under the Program		Total Number of Shares Purchased		Average Price Paid per Share including commission		Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares Purchased Under the Program
For the Year Ended October 31, 2013	1,299,294	$	12.83	1,299,294	$	16,673,207		1,299,294	$	12.83		1,299,294	$	16,673,207
For the Year Ended October 31, 2014	310,706	$	13.24	1,610,000	$	4,114,967		310,706	$	13.24		1,610,000	$	4,114,967
For the Year Ended October 31, 2015	—	—		1,610,000	—			-		-		1,610,000		-
For the Year Ended October 31, 2016	146,409	$	8.31	1,756,409	$	1,216,746		146,409	$	8.31		1,756,409	$	1,216,746
For the Year Ended October 31, 2017	—	—		1,756,409	—			-		-		1,756,409		-
For the Year Ended October 31, 2018	627,724	$	9.45	2,384,133	5,930,011			627,724	$	9.45		2,384,133	$	5,930,011
For the Nine Month Period Ended July 31, 2019	467,686	$	8.70	2,851,819	4,069,924
For the Year Ended October 31, 2019								467,686	$	8.70		2,851,819	$	4,069,924
For the Six Month Period Ended April 30, 2020								-		-		2,851,819		-
Total	2,851,819	$	11.22	2,851,819	$	32,004,855		2,851,819	$	11.22		2,851,819	$	32,004,855

*Disclosure covering repurchases will be made through quarterly and annual reports filed with the SEC going forward. MVC Capital’s website no longer contains the monthly repurchase information.

~~TENDER OFFERS~~

On July 21, 2017, the Company commenced a modified “Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $15 million of its common stock at a price per share not less than $10.00 and not greater than $11.00 in $0.20 increments. The Company’s Tender Offer expired at 5:00 p.m., New York City time, on August 18, 2017. A total of 3,634,597 shares of the Company’s common stock were properly tendered and not properly withdrawn at or below a purchase price of $10.40 per share. In accordance with the terms and conditions of the Tender Offer, the Company accepted for payment, on a pro rata basis, at a purchase price of $10.40, 1,442,307 shares properly tendered at or below the purchase price and not properly withdrawn before the expiration date, at an aggregate cost of approximately $15.0 million, excluding fees and expenses relating to the Tender Offer.

On November 22, 2017, the Company commenced a modified “Dutch Auction” tender offer (the “TO”) to purchase up to $25 million of its common stock at a price per share not less than $10.40 and not greater than $11.00 in $0.10 increments. The TO expired at 5:00 p.m., New York City time, on December 21, 2017. In accordance with the terms and conditions of the TO, the Company accepted for payment, at a purchase price of $10.90, 2,293,577 shares properly tendered at or below the purchase price, at an aggregate cost of approximately $25.0 million, excluding fees and expenses relating to the TO.

14. Segment Data

The ~~Company’s~~Company's reportable segments are its investing operations as a business development company, MVC Capital, which includes MVC ~~Cayman and MVC Turf.~~Cayman. MVCFS, a wholly-owned subsidiary that provides advisory, administrative and other services to the Company and its portfolio companies, is also included.

The following table presents book basis segment data for the ~~nine~~six month period ended ~~July 31, 2019:~~April 30, 2020:

MVC

MVCFS

Consolidated

Interest and dividend income

$
21,756,121

$
17,968

$
21,774,089

Fee income

50,001

39,298

89,299

Fee income - asset management

—

640,157

640,157

Total operating income

21,806,122

697,423

22,503,545

Total operating expenses

15,085,083

840,300

15,925,383

Less: Waivers by Adviser

(1,747,998
)
(144,324
)
(1,892,322
)
Total net operating expenses

13,337,085

695,976

14,033,061

Net operating income before taxes

8,469,037

1,447

8,470,484

Tax expense

—

1,447

1,447

Net operating income

8,469,037

—

8,469,037

Net realized gain on investments

4,458,666

124,667

4,583,333

Net unrealized appreciation (depreciation) on investments

347,667

(140,889
)
206,778

Net increase (decrease) in net assets resulting from operations

$
13,275,370

$
(16,222
)
$
13,259,148

	MVC			MVCFS			Consolidated
Interest and dividend income	$	14,930,795		$	3,210		$	14,934,005
Fee income		-			26,198			26,198
Fee income - asset management		-			473,729			473,729
Other Income		-			4,580			4,580
Total operating income		14,930,795			507,717			15,438,512

Total operating expenses		9,051,261			597,397			9,648,658
Less: Waivers by Adviser		(911,943	)		(90,650	)		(1,002,593	)
Total net operating expenses		8,139,318			506,747			8,646,065

Net operating income before taxes		6,791,477			970			6,792,447

Tax expense		-			970			970
Net operating income		6,791,477			-			6,791,477

Net realized gain on investments		1,325,242			48,314			1,373,556
Net unrealized depreciation on investments		(44,033,779	)		(47,204	)		(44,080,983	)

Net (decrease) increase in net assets resulting from operations	$	(35,917,060	)	$	1,110		$	(35,915,950	)

15. Significant Subsidiaries

We have determined that for the ~~nine~~six month period ended ~~July 31, 2019, there were no~~April 30, 2020, MVC Automotive, an unconsolidated portfolio ~~companies that~~company, has met the conditions of a significant subsidiary. For the ~~nine~~six month period ended ~~July 31, 2018 (and not the fiscal~~April 30, 2019, ~~period covered by this report), MVC Automotive and RuMe, unconsolidated~~there were no portfolio companies that met the conditions of a significant subsidiary. The financial information presented below includes summarized balance sheets as of ~~June 30, 2019~~March 31, 2020 (the last fiscal quarter-end of these companies prior to ~~July~~April 30, 2020) and March 31, ~~2019) and June 30, 2018~~2019 and summarized income statements for the periods October 1, ~~2018~~2019 to ~~June 30, 2019~~March 31, 2020 and October 1, ~~2017~~2018 to ~~June 30, 2018.~~March 31, 2019. The financial information below is based on unaudited financial statements and has been prepared and furnished by ~~each~~the portfolio company and not prepared by the Company.

	RuMe			MVC Automotive		RuMe
Balance Sheet All numbers in thousands	As of June 30, 2019			As of June 30, 2019		As of June 30, 2018			MVC Automotive As of June 30, 2018

Balance Sheet											MVC Automotive		MVC Automotive
*All numbers in thousands*											As of March 31, 2020		As of March 31, 2019
Assets:
Total current assets	$	1,284		$	84,661	$	1,451		$	69,394	$	50,798	$	80,593
Total non-current assets	354			25,416		448			23,045
Tota non-current assets												29,264		22,019
Total Assets	$	1,638		$	110,077	$	1,899		$	92,439	$	80,062	$	102,612

Liabilities and Shareholders Equity:
Liabilities and Sharholders Equity:
Current Liabilities	$	6,452		$	90,813	$	7,020		$	74,105	$	54,405	$	93,610
Long-term liabilities	4,630			16,268		1,813			15,686
Long-term liablities												25,040		7,001
Shareholders Equity	(9,444		)	2,996		(6,934		)	2,648			617		2,001
Total Liabilities and Shareholders Equity	$	1,638		$	110,077	$	1,899		$	92,439
Total Liablities and Shareholders Equity											$	80,062	$	102,612

	RuMe			MVC Automotive		RuMe			MVC Automotive		MVC Automotive			MVC Automotive
	For the Period from			For the Period from		For the Period from			For the Period from		For the Period from			For the Period from
Income Statement	October 1, 2018 to			October 1, 2018 to		October 1, 2017 to			October 1, 2017 to		October 1, 2019 to			October 1, 2018 to
All numbers in thousands	June 30, 2019			June 30, 2019		June 30, 2018			June 30, 2018		March 31, 2020			March 31, 2019

Net Sales & Revenue	$	5,275		$	135,554	$	7,258		$	147,129	$	73,415		$	92,178
Cost of Sales	3,153			122,106		4,880			133,151			65,839			85,058
Gross Margin	2,122			13,448		2,378			13,978			7,576			7,120
Operating Expenses	2,851			11,182		3,796			11,924			8,355			6,259
Operating Income (Loss)	(729		)	2,266		(1,418		)	2,054
Operating Income												(779	)		861
Income Tax (Benefit)	0			57		0			113			231			108
Interest Expense	642			1,658		440			1,226			646			1,020
Other Expenses (Income), Net	(49		)	60		(24		)	3			(174	)		145
Net Income (Loss)	$	(1,322	)	$	491	$	(1,834	)	$	712	$	(1,482	)	$	(412	)

16. Subsequent Events

On ~~August 12, 2019,~~May 14, 2020, Folio announced it entered into an agreement to become a part of The Goldman Sachs Group, Inc. (“Goldman Sachs”). The acquisition, while subject to regulatory approval, is expected to close in the third calendar quarter of 2020. If the transaction closes, the Company ~~sold 608,310 common shares of Equus totaling~~expects to receive approximately ~~$985,000~~$15 million in ~~proceeds and resulting in a realized loss of approximately $268,000.~~proceeds.

On ~~August 30, 2019,~~May 27, 2020, the Company and Wynnefield Capital announced an agreement under which six of the Company’s current directors and three independent director candidates proposed by Wynnefield Capital will be nominated by the Company’s Board of Directors for election at the 2020 annual meeting of stockholders, currently scheduled for July 15, 2020. The Board of Directors will remain at its current size of nine directors. A committee comprised of Chairman Tokarz and two independent Board members will continue to explore strategic alternatives and other value enhancing opportunities and there will be no changes to the Company’s current management agreement with The Tokarz Group Advisers LLC prior to the annual meeting. Under the agreement, the Company has agreed to pay the fees and expenses of Wynnefield Capital in the amount of approximately $290,000.

As previously disclosed, the Company is party to Credit Facility II, ~~was extended~~dated as of July 31, 2013, with BB&T. On June 5, 2020, the Company and BB&T entered into a certain Waiver and Thirteenth Amendment to ~~August 31, 2020.~~Secured Revolving Credit Agreement (the “Credit Facility Amendment”), pursuant to which (i) BB&T waived compliance with the net worth covenant for the period ended April 30, 2020 (as the Company's net asset value fell to approximately $186.0 million as of April 30, 2020) and (ii) Section 5.05 of Credit Facility II is amended to read as follows:

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~SECTION 5.05.Net Worth. Consolidated Net Worth shall at no time be less than $150,000,000.

Other than Section 5.05, terms of the Credit Facility II remain unchanged and borrowings under the Credit Facility continue to be secured by cash, short-term and long-term U.S. Treasury securities and other governmental agency securities.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains certain statements of a forward-looking nature relating to future events or the future financial performance of the Company and its investment portfolio companies. Words such asmay, will,

expect, believe, anticipate, intend, could, estimate, mightandcontinue, and the negative or other variations thereof or comparable terminology, are intended to identify forward-looking statements. Forward-looking statements are included in this report pursuant to the “Safe Harbor” provision of the Private Securities Litigation Reform Act of 1995. Such statements are predictions only, and the actual events or results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those relating to adverse conditions in the U.S. and international economies, competition in the markets in which our portfolio companies operate, investment capital demand, pricing, market acceptance, any changes in the regulatory environments in which we operate, changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, competitive forces, adverse conditions in the credit markets impacting the cost, including interest rates and/or availability of financing, the results of financing and investing efforts, the ability to complete transactions, the inability to implement our business strategies and other risks identified below or in the Company’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. The following analysis of the financial condition and results of operations of the Company should be read in conjunction with the Consolidated Financial Statements, the Notes thereto and the other financial information included elsewhere in this report and the Company’s annual report on Form 10-K for the year ended October 31, ~~2018.~~2019.

SELECTED CONSOLIDATED FINANCIAL DATA:

Financial information for the fiscal year ended October 31, ~~2018~~2019 is derived from the consolidated financial statements included in the Company’s annual report on Form 10-K, which have been audited by Grant Thornton LLP, the Company’s independent registered public accounting firm. Quarterly financial information is derived from unaudited financial data, but in the opinion of management, reflects all adjustments (consisting only of normal recurring adjustments), which are necessary to present fairly the results for such interim periods.

Selected Consolidated Financial Data

For the Nine Month
Period Ended July
31, 2019

For the Nine Month
Period Ended July
31, 2018

Year Ended

(Unaudited)

(Unaudited)

October 31, 2018

(In thousands, except per share data)

Operating Data:

Interest and related portfolio income:

Interest and dividend income

$
21,774

$
15,856

$
21,262

Fee income

89

248

280

Fee income - asset management

640

814

1,084

Other Income

—

—

—

Total operating income

22,503

16,918

22,626

Expenses:

Management fee

4,746

4,394

5,890

Portfolio fees - asset management

261

407

529

Management fee - asset management

219

203

284

Administrative

3,422

3,221

3,884

Interest and other borrowing costs

7,277

8,501

10,739

Loss on extinguishment of debt

—

1,783

1,783

Net Incentive compensation (Note 11)

—

(2,061
)
(2,061
)

Total operating expenses

15,925

16,448

21,048

Expense waiver by Advisor

(113
)
(113
)
(150
)
Voluntary management fee waiver by Advisor

(1,780
)
(1,471
)
(2,032
)
Voluntary incentive fee waiver by Advisor

—

—

—

Total waiver by adviser

(1,893
)
(1,584
)
(2,182
)

Total net operating expenses

14,032

14,864

18,866

Net operating gain (loss) before taxes

8,471

2,054

3,760

Tax expense, net

2

1

2

Net operating gain (loss)

8,469

2,053

3,758

Net realized and unrealized (loss) gain:

Net realized gain on investments

4,583

201

203

Net unrealized depreciation on investments

207

(10,567
)
(14,494
)

Net realized and unrealized (loss) gain on investments

4,790

(10,366
)
(14,291
)

Net (decrease) increase in net assets resulting from operations

$
13,259

$
(8,313
)
$
(10,533
)

Per Share:

Net (decrease) increase in net assets per share resulting from operations

$
0.75

$
(0.45
)
$
(0.55
)
Dividends per share

$
0.450

$
0.450

$
(0.600
)
Balance Sheet Data:

Portfolio at value

$
339,405

$
318,144

$
324,507

Portfolio at cost

426,341

400,078

409,632

Total assets

369,233

357,021

347,078

Shareholders’ equity

227,915

237,606

226,723

Shareholders’ equity per share (net asset value)

$
12.86

$
12.62

$
12.46

Common shares outstanding at period end

17,725

18,821

18,193

Other Data:

Number of Investments funded in period

9

14

14

Investments funded ($) in period

$
41,020

$
50,867

$
63,003

Repayment/sales in period

34,199

18,966

22,596

Net investment activity in period

6,821

31,901

40,407

	2019						2018								2017								For the Six Month Period Ended April 30, 2020			For the Six Month Period Ended April 30, 2019			Year Ended
	Qtr 3		Qtr 2		Qtr 1		Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4		Qtr 3		Qtr 2		Qtr 1		(Unaudited)			(Unaudited)			October 31, 2019
	(In thousands, except per share data)																						(In thousands, except per share data)
Quarterly Data (Unaudited):
Operating Data:
Interest and related portfolio income:
Interest and dividend income																							$	14,934		$	14,567		$	29,605
Fee income																								26			51			102
Fee income - asset management																								474			416			842
Other income																								4			-			-

Total operating income	7,469		8,593		6,441		5,888		6,151		5,440		5,147		5,490		7,305		3,929		3,380			15,438			15,034			30,549

Expenses:
Management fee	1,643		1,590		1,513		1,496		1,487		1,496		1,411		1,335		1,393		1,696		1,814			2,474			3,103			6,408
Portfolio fees - asset management	89		76		96		122		112		148		147		148		146		138		177			240			172			343
Management fee - asset management	79		69		71		81		70		66		67		67		67		49		62			116			140			288
Administrative	998		990		1,434		843		1,010		796		1,235		983		804		1,172		1,474			2,143			2,424			4,826
Interest, fees and other borrowing costs	2,510		2,283		2,484		2,238		2,403		2,981		3,117		2,495		2,649		2,606		2,538
Interest and other borrowing costs																								4,331			4,767			9,655
Loss on extinguishment of debt	—		—		—		—		—		—		1,783		—		—		—		—			345			-			-
Net Incentive compensation	—		—		—		—		(1,316	)	(1,012	)	267		(1,224	)	5,077		985		760
Net Incentive compensation (Note 11)																								-			-			-

Total operating expenses																								9,649			10,606			21,520

Expense waiver by Advisor																								(75	)		(75	)		(150	)
Voluntary management fee waiver by Advisor																								(928	)		(1,164	)		(2,403	)
Total waiver by adviser	(654	)	(635	)	(604	)	(598	)	(595	)	(599	)	(390	)	(372	)	(386	)	(461	)	(491	)		(1,003	)		(1,239	)		(2,553	)
Tax expense	1		1		—		1		—		1		—		1		—		—		1
Net operating income (loss) before net realized and unrealized gains	2,803		4,219		1,447		1,705		2,980		1,563		(2,490	)	2,057		(2,445	)	(2,256	)	(2,955	)

Total net operating expenses																								8,646			9,367			18,967

Net operating gain before taxes																								6,792			5,667			11,582

Tax expense, net																								1			1			2

Net operating gain																								6,791			5,666			11,580

Net realized and unrealized (loss) gain:
Net realized gain (loss) on investments																								1,374			8,499			(7,106	)
Net unrealized (depreciation) appreciation on investments																								(44,081	)		(1,254	)		11,842

Net realized and unrealized (loss) gain on investments																								(42,707	)		7,245			4,736

Net (decrease) increase in net assets resulting from operations	348		15,964		(3,053	)	(2,220	)	(5,870	)	(3,393	)	950		(4,028	)	23,906		3,069		4,377		$	(35,916	)	$	12,911		$	16,316
Net (decrease) increase in net assets resulting from operations per share	0.02		0.90		(0.17	)	(0.10	)	(0.32	)	(0.18	)	0.05		(0.17	)	1.06		0.14		0.19
Net asset value per share	12.86		12.99		12.24		12.46		12.62		13.09		13.42		13.24		13.38		12.45		12.45

Per Share:
Net (decrease) increase in net assets per share resulting from operations																							$	(2.03	)	$	0.73		$	0.92
Dividends per share																							$	0.340		$	0.300		$	0.620
Balance Sheet Data:
Portfolio at value																							$	226,325		$	331,816		$	340,245
Portfolio at cost																								345,672			420,410			415,667
Total assets																								284,511			386,946			362,163
Shareholders’ equity																								186,016			230,226			227,959
Shareholders’ equity per share (net asset value)																							$	10.49		$	12.99		$	12.86
Common shares outstanding at period end																								17,725			17,725			17,725
Other Data:
Number of Investments funded in period																								11			3			12
Investments funded ($) in period																							$	11,618		$	8,465		$	47,463
Repayment/sales in period																								87,852			10,698			39,083
Net investment activity in period																								(76,234	)		(2,233	)		8,380

	2020						2019												2018
	Qtr 2			Qtr 1			Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4			Qtr 3			Qtr 2			Qtr 1
	(In thousands, except per share data)
Quarterly Data (Unaudited):

Total operating income		7,652			7,786			8,046			7,469			8,593			6,441			5,888			6,151			5,440			5,147

Management fee		1,104			1,370			1,662			1,643			1,590			1,513			1,496			1,487			1,496			1,411
Portfolio fees - asset management		71			169			82			89			76			96			122			112			148			147
Management fee - asset management		52			64			69			79			69			71			81			70			66			67
Administrative		922			1,221			1,404			998			990			1,434			843			1,010			796			1,235
Interest, fees and other borrowing costs		2,125			2,206			2,378			2,510			2,283			2,484			2,238			2,403			2,981			3,117
Loss on extinguishment of debt		345			-			-			-			-			-			-			-			-			1,783
Net Incentive compensation		-			-			-			-			-			-			-			(1,316	)		(1,012	)		267
Total waiver by adviser		(452	)		(551	)		(660	)		(654	)		(635	)		(604	)		(598	)		(595	)		(599	)		(390	)
Tax expense		-			1			-			1			1			-			1			-			1			-
Net operating income (loss) before
net realized and unrealized gains		3,485			3,306			3,111			2,803			4,219			1,447			1,705			2,980			1,563			(2,490	)
Net (decrease) increase in net
assets resulting from operations		(40,332	)		4,416			3,057			348			15,964			(3,053	)		(2,220	)		(5,870	)		(3,393	)		950
Net (decrease) increase in net assets
resulting from operations per share		(2.28	)		0.25			0.17			0.02			0.90			(0.17	)		(0.10	)		(0.32	)		(0.18	)		0.05
Net asset value per share		10.49			12.94			12.86			12.86			12.99			12.24			12.46			12.62			13.09			13.42

OVERVIEW

The Company is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company under the 1940 Act. The ~~Company’s~~Company's investment objective is to seek to maximize total return from capital appreciation and/or income.

On November 6, 2003, Mr. Tokarz assumed his positions as Chairman and Portfolio Manager of the Company. He and the ~~Company’s~~Company's investment professionals (who, effective November 1, 2006, provide their services to the Company through the ~~Company’s~~Company's investment adviser, TTG Advisers) are seeking to implement our investment objective (i.e., to maximize total return from capital appreciation and/or income) through making a broad range of private investments in a variety of industries.

The investments can include senior or subordinated loans, convertible debt and convertible preferred securities, common or preferred stock, equity interests, warrants or rights to acquire equity interests, and other private equity transactions. During the fiscal year ended October 31, ~~2018,~~2019, the Company made six new investments and follow-on investments in ~~eight~~six existing portfolio companies totaling approximately ~~$62.3~~$44.9 million. During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Company made ~~five new investments and~~ follow-on investments in ~~four~~five existing portfolio ~~company~~companies totaling approximately ~~$38.5~~$11.5 million.

The ~~Company’s~~Company's prior investment objective was to achieve long-term capital appreciation from venture capital investments in information technology companies. Accordingly, the ~~Company’s~~Company's investments had focused on investments in equity and debt securities of information technology companies. As of ~~July 31, 2019,~~April 30, 2020, approximately ~~1.6%~~4.0% of the current fair value of our assets consisted of Legacy Investments. We are, however, seeking to manage these Legacy Investments to try and realize maximum returns. We generally seek to capitalize on opportunities to realize cash returns on these investments when presented with a potential ~~“liquidity~~"liquidity event,”" i.e., a sale, public offering, merger or other reorganization.

Our new portfolio investments are made pursuant to our current objective and strategy. We are concentrating our investment efforts on small and middle-market companies that, in our view, provide opportunities to maximize total return from capital appreciation and/or income though our current focus is more on yield generating investments which can include, but is not limited to senior and subordinated loans, convertible debt, common and preferred equity with a coupon or liquidation preference and warrants or rights to acquire equity interests (the “Yield-Focused Strategy”). We have continued the transition to the Yield-Focused Strategy. We have done this through selling a number of equity investments, including our 2017 sale of U.S. Gas, our then-largest portfolio company. These sales and repayments have improved our liquidity position, which provides us with flexibility to redeploy capital into debt or similar income-producing investments. The Company continues to seek to monetize various equity investments to further support the Yield-Focused Strategy. We participate in the private equity business generally by providing negotiated long-term equity and/or debt investment capital to privately-owned small and middle-market companies. Our

financings are generally used to fund growth, buyouts, acquisitions, recapitalizations, note purchases and/or bridge financings. We generally invest in private companies, though, from time to time, we may invest in public companies that may lack adequate access to public capital.

We may also seek to achieve our investment objective by establishing a subsidiary or subsidiaries that would serve as general partner to a private equity or other investment fund(s). In fact, during fiscal year 2006, we established MVC Partners for this purpose. Furthermore, the Board of Directors authorized the establishment of a PE Fund, for which an indirect wholly-owned subsidiary of the Company serves as the GP and which may raise up to $250 million. On October 29, 2010, through MVC Partners and MVCFS, the Company committed to invest approximately $20.1 million in the PE Fund. The PE Fund closed on approximately $104 million of capital commitments. The ~~Company’s~~Company's Board of Directors authorized the establishment of, and investment in, the PE Fund for a variety of reasons, including the ~~Company’s~~Company's ability to make Non-Diversified Investments through the PE Fund. As previously disclosed, the Company is restricted in its ability to make Non-Diversified Investments. For services provided to the PE Fund, the GP and MVC Partners are together entitled to receive 25% of all management fees and other fees paid by the PE Fund and its portfolio companies and up to 30% of the carried interest generated by the PE Fund. Further, at the direction of the Board of Directors, the GP retained TTG Advisers to serve as the portfolio manager of the PE Fund. In exchange for providing those services, and pursuant to the Board of ~~Directors’~~Directors' authorization and direction, TTG Advisers is entitled to receive the balance of the fees and any carried interest generated by the PE Fund and its portfolio companies. Given this separate arrangement with the GP and the PE Fund, under the terms of the ~~Company’s~~Company's Advisory Agreement with TTG Advisers, TTG Advisers is not entitled to receive from the Company a management fee or an incentive fee on assets of the Company that are invested in the PE Fund. During the fiscal year ended October 31, 2012 and thereafter, MVC Partners was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in the PE Fund is a substantial portion of MVC Partners operations. Previously, MVC Partners was presented as a portfolio company on the Schedule of Investments. The consolidation of MVC Partners has not had any material effect on the financial position or net results of operations of the Company. Also, during fiscal year ended October 31, 2014, MVC Turf, Inc. (“MVC Turf”) was consolidated with the Company as MVC Turf was an MVC wholly-owned holding company. The consolidation of MVC Turf did not have a material effect on the financial position or net results of operations of the Company. On March 7, 2017, the Company exchanged its shares of MVC Turf for approximately $3.8 million of additional subordinated debt in Turf Products. MVC Turf is no longer consolidated with the Company. Please see Note 2 of our consolidated financial statements “Consolidation” for more information.

As a result of the closing of the PE Fund, consistent with the Board-approved policy concerning the allocation of investment opportunities, the PE Fund received a priority allocation of all private equity investments that would otherwise be Non-Diversified Investments for the Company during the PE ~~Fund’s~~Fund's investment period that ended on October 28, 2014. Additional capital may be called for follow-on investments in existing portfolio companies of the PE Fund or to pay operating expenses of the PE Fund until the partnership is no longer extended.

Additionally, in pursuit of our objective, we may acquire a portfolio of existing private equity or debt investments held by financial institutions or other investment funds should such opportunities arise.

Furthermore, pending investments in portfolio companies pursuant to the Company’s principal investment strategy, the Company may invest in certain securities on a short-term or temporary basis. In addition to cash-equivalents and other money market-type investments, such short-term investments may include exchange-traded funds and private investment funds offering periodic liquidity.

The impact of the coronavirus (“COVID-19”) outbreak on the financial performance of the Company’s investments has been negative and its impact going forward will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s future investment results may be materially adversely affected.

OPERATING INCOME

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020 and ~~2018.~~2019. Total operating income was ~~$22.5~~approximately $15.4 million and ~~$16.7~~approximately $15.0 million for the ~~nine~~six month period ended ~~July 31,~~April 30, 2020 and 2019, ~~and 2018,~~ respectively, an increase of approximately ~~$5.8 million.~~$400,000.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020

Total operating income was ~~$22.5~~$15.4 million for the ~~nine~~six month period ended ~~July 31, 2019.~~April 30, 2020. The increase in operating income over the same period last year was primarily due to the increase in ~~dividend income and the increase in~~ interest earned on loans and amortization of OID from the Company’s portfolio ~~companies, continuing the transition to the Yield-Focused Strategy.~~companies. The Company earned approximately ~~$18.9~~$14.9 million in interest income from investments in portfolio companies. Of the ~~$18.9~~$14.9 million recorded in interest income, approximately ~~$4.3~~$2.9 million was “payment in kind” interest. The “payment in kind” interest is computed at the contractual rate specified in each investment agreement and may be added to the principal balance of each investment. The Company’s debt investments yielded annualized rates from ~~5.0%~~3.1% to ~~16.0%~~15.75%. The Company also recorded fee income from asset management of the PE Fund and its portfolio companies totaling approximately ~~$640,000~~$474,000 and fee income from the Company’s portfolio companies of approximately ~~$89,000,~~$26,000, totaling approximately ~~$729,000~~$500,000 in fee income. Of the ~~$640,000~~$474,000 of fee income from asset management activities, 75% of the income is obligated to be paid to TTG Advisers. However, under the PE ~~Fund’s~~Fund's agreements, a significant portion of the portfolio fees that are paid by the PE Fund’s portfolio companies to the GP and TTG Advisers is subject to recoupment by the PE Fund in the form of an offset to future management fees paid by the PE Fund.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2018~~April 30, 2019

Total operating income was ~~$16.7~~$15.0 million for the ~~nine~~six month period ended ~~July 31, 2018.~~April 30, 2019. The increase in operating income over the same period last year was primarily due to the increase in dividend income and the increase in interest earned on loans from the Company’s portfolio companies, continuing the transition to the Yield-Focused Strategy. The Company earned approximately ~~$14.3~~$11.7 million in interest income from investments in portfolio companies. Of the ~~$14.3~~$11.7 million recorded in interest income, approximately ~~$2.6~~$3.1 million was “payment in kind” interest. The “payment in kind” interest is computed at the contractual rate specified in each investment agreement and may be added to the principal balance of each investment. The Company’s debt investments yielded annualized rates from 5.0% to 16.0%. The Company also received fee income from asset management of the PE Fund and its portfolio companies totaling approximately ~~$814,000~~$416,000 and fee income from the Company’s portfolio companies of approximately ~~$248,000,~~$51,000, totaling approximately ~~$1.1 million~~$467,000 in fee income. Of the ~~$814,000~~$416,000 of fee income from asset management activities, 75% of the income is obligated to be paid to TTG Advisers. However, under the PE ~~Fund’s~~Fund's agreements, a significant portion of the portfolio fees that are paid by the PE Fund’s portfolio companies to the GP and TTG Advisers is subject to recoupment by the PE Fund in the form of an offset to future management fees paid by the PE Fund.

OPERATING EXPENSES

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020 and ~~2018.~~2019. Operating expenses, net of Voluntary Waivers, were approximately ~~$14.0~~$8.6 million and ~~$14.7~~$9.4 million for the ~~nine~~six month period ended ~~July 31,~~April 30, 2020 and 2019, ~~and 2018,~~ respectively, a decrease of approximately ~~$700,000.~~$800,000.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020

Operating expenses, net of the Voluntary Waivers (as described below), were approximately ~~$14.0~~$8.6 million or ~~8.32%~~8.11% of the ~~Company’s~~Company's average net assets, when annualized, for the ~~nine~~six month period ended ~~July 31, 2019.~~April 30, 2020. Significant components of operating expenses for the ~~nine~~six month period ended ~~July 31, 2019~~April 30, 2020 were interest and other borrowing costs of approximately ~~$7.3~~$4.3 million and management fee expense paid by the Company of approximately ~~$3.0~~$1.5 million, which is net of the voluntary management fee waiver of approximately ~~$1.8 million.~~$928,000.

The approximately ~~$700,000~~$800,000 decrease in the Company’s net operating expenses for the ~~nine~~six month period ended ~~July~~April 30, 2020 compared to the same period in 2019, was primarily due to the approximately $230,000 decrease in audit and tax preparation fee expense and approximately $394,000 decrease in management fee expense, net of the voluntary management fee waiver. Operating expenses for the six month period ended April 30, 2020 includes approximately $345,000 in unamortized deferred financing fees related to the Senior Notes II, which were expensed at the time $20.0 million of the Senior Notes II were redeemed. The portfolio fees - asset management are payable to TTG Advisers for monitoring and other customary fees received by the GP from portfolio companies of the PE Fund. To the extent the GP or TTG Advisers receives advisory, monitoring, organization or other customary fees from any portfolio company of the PE Fund or management fees related to the PE Fund, 25% of such fees shall be paid to or retained by the GP and 75% of such fees shall be paid to or retained by TTG Advisers. On October 31, 2019, the Board approved the renewal of the Advisory Agreement for the 2020 fiscal year. The Company and the Adviser agreed on an expense cap for fiscal 2020 of 3.25% under the Modified Methodology. The amount of any payments made by the GP of the PE Fund to TTG Advisers pursuant to the Portfolio Management Agreement between the GP and TTG Advisers respecting the PE Fund continues to be excluded from the calculation of the Company's expense ratio under the Expense Limitation Agreement. In addition, for fiscal years 2010 through 2020, TTG Advisers voluntarily agreed to extend the Voluntary Waiver. TTG Advisers also voluntarily agreed that any assets of the Company that are invested in exchange-traded funds would not be taken into account in the calculation of the base management fee due to TTG Advisers under the Advisory Agreement. As of April 30, 2020, the Company did not have an investment in an exchange traded fund. Under the Modified Methodology, for the six month period ended April 30, 2020, the Company’s annualized expense ratio was 2.62%, (taking into account the same carve outs as those applicable to the expense cap). In addition, the Adviser agreed, effective November 1, 2017, to a revised management fee structure that ties management fees to the NAV discount² as follows: (A) If the Company’s NAV discount is greater than 20%, the management fee for the current quarter is reduced to 1.25%; (B) If the NAV discount is between 10% and 20%, the management fee will be 1.50%; and (C) If the NAV discount is less than 10% or eliminated, the 1.50% management fee would be re-examined, but in no event would it exceed 1.75%. For the quarter ended April 30, 2020, the management fee was 1.25%.

Pursuant to the terms of the Advisory Agreement, during the six month period ended April 30, 2020, the provision for incentive compensation was unchanged from $0 as of October 31, 2019, including both the pre-incentive fee net operating income and the capital gain incentive fee. The provision for incentive compensation includes the Valuation Committee’s determination to increase the fair values of three of the Company’s portfolio investments (Apex, GTM and Trientis) by a total of approximately $1.9 million. The provision also includes the Valuation Committee’s determination to decrease the fair values of twenty two of the Company’s portfolio investments (Advantage, Black Diamond, Custom Alloy, Dukane, Equus, Global Prairie, Highpoint, HTI, Initials, IPCC, Jedson, JSC Tekers, Legal Solutions, MVC Automotive, Powers, RuMe, Security Holdings, SMA, Tuf-Tug, Turf, U.S. Spray and U.S. Gas) by a total of approximately $47.3 million. Also, for the quarter ended April 30, 2020, no provision was recorded for the net operating income portion of the incentive fee as pre-incentive fee net operating income for the quarter did not exceed the hurdle rate.

For the Six Month Period Ended April 30, 2019

Operating expenses, net of the Voluntary Waivers (as described below), were approximately $9.4 million or 8.41% of the Company's average net assets, when annualized, for the six month period ended April 30, 2019. Significant components of operating expenses for the six month period ended April 30, 2019 were interest and other borrowing costs of approximately $4.8 million and management fee expense paid by the Company of approximately $1.9 million, which is net of the voluntary management fee waiver of approximately $1.2 million.

² The NAV discount referred to herein is the average daily discount to NAV for a quarter. The discount is determined using the most recently determined NAV per share, which is typically the prior quarter end’s NAV per share and the Company stock closing price on any given day for the quarter.

The approximately $2.2 million decrease in the Company’s net operating expenses for the six month period ended April 30, 2019 compared to the same period in 2018, was primarily due to the approximately $1.8 million decrease in loss on extinguishment of debt related to the unamortized deferred financing fees for the Senior Notes that were expensed at the time they were repaid and an approximately ~~$1.2~~$1.3 million decrease in interest and other borrowing costs. ~~These decreases were partially offset by the $2.1 million difference in incentive compensation expense for the nine month period ended July 31, 2019 when compared to the same period in~~

~~2018.~~ The portfolio fees - asset management are payable to TTG Advisers for monitoring and other customary fees received by the GP from portfolio companies of the PE Fund.�� To the extent the GP or TTG Advisers receives advisory, monitoring, organization or other customary fees from any portfolio company of the PE Fund or management fees related to the PE Fund, 25% of such fees shall be paid to or retained by the GP and 75% of such fees shall be paid to or retained by TTG Advisers. On October 30, 2018, the Board approved the renewal of the Advisory Agreement for the 2019 fiscal year. The Company and the Adviser agreed on an expense cap for fiscal 2019 of 3.25% under the Modified Methodology. The amount of any payments made by the GP of the PE Fund to TTG Advisers pursuant to the Portfolio Management Agreement between the GP and TTG Advisers respecting the PE Fund continues to be excluded from the calculation of the ~~Company’s~~Company's expense ratio under the Expense Limitation Agreement. In addition, for fiscal years 2010 through 2019, TTG Advisers voluntarily agreed to extend the Voluntary Waiver. TTG Advisers also voluntarily agreed that any assets of the Company that are invested in exchange-traded funds would not be taken into account in the calculation of the base management fee due to TTG Advisers under the Advisory Agreement. As of ~~July 31,~~April 30, 2019, the Company did not have an investment in an exchange traded fund. Under the Modified Methodology, for the quarter ended ~~July 31,~~April 30, 2019, the Company’s annualized expense ratio was ~~2.66%~~2.76%, (taking into account the same carve outs as those applicable to the expense cap). In addition, the Adviser agreed, effective November 1, 2017, to a revised management fee structure that ties management fees to the NAV discount2³ as follows: (A) If the Company’s NAV discount is greater than 20%, the management fee for the current quarter is reduced to 1.25%; (B) If the NAV discount is between 10% and 20%, the management fee will be 1.50%; and (C) If the NAV discount is less than 10% or eliminated, the 1.50% management fee would be re-examined, but in no event would it exceed 1.75%. For the quarter ended ~~July 31,~~April 30, 2019, the management fee was 1.25%.

Pursuant to the terms of the Advisory Agreement, during the ~~nine~~six month period ended ~~July 31,~~April 30, 2019, the provision for incentive compensation was unchanged from $0 as of October 31, 2018, including both the pre-incentive fee net operating income and the capital gain incentive fee. The provision for incentive compensation includes the Valuation Committee’s determination to decrease the fair values of ~~ten~~nine of the Company’s portfolio investments (Advantage, ~~Highpoint,~~ Initials, Legal Solutions, MVC Environmental, RuMe, Trientis, U.S. Spray, U.S. Gas and Equus) by a total of approximately ~~$14.4~~$11.7 million. The provision also includes the Valuation Committee’s determination to increase the fair values of ~~eleven~~twelve of the Company’s portfolio investments ~~(Array,~~(Centile escrow, MVC Automotive, Array, Black Diamond, Custom Alloy, Dukane, Highpoint, HTI, JSC Tekers, Security Holdings, Turf ~~Crius, Centile escrow~~ and ~~MVC Automotive)~~Crius) by a total of approximately ~~$11.9~~$13.0 million. Also, for the quarter ended ~~July 31,~~April 30, 2019, no provision was recorded for the net operating income portion of the incentive fee as pre-incentive fee net operating income for the quarter did not exceed the hurdle rate.

REALIZED GAINS AND LOSSES ON PORTFOLIO SECURITIES

For the ~~Nine~~Six Month Period Ended ~~July 31, 2018~~April 30, 2020 and 2019. Net realized gains were approximately $1.4 million and approximately $8.5 million for the six month period ended April 30, 2020 and 2019, respectively, a decrease of approximately $7.1 million.

For the Six Month Period Ended April 30, 2020

O~~perating expenses, net of the Voluntary Waivers (as described below), were approximately $14.7 million or 7.73% of the Company’s average net assets, when annualized,~~Net realized gains for the ~~nine~~six month period ended ~~July 31, 2018. Significant components of operating expenses for the nine month period ended July 31, 2018~~April 30, 2020, were ~~interest and other borrowing costs of~~ approximately ~~$8.5 million and management fee expense paid by the Company of approximately $2.9 million, which is net of the voluntary management fee waiver of approximately $1.5~~$1.4 million.

The ~~approximately $7.2 million decrease in the~~ Company’s net ~~operating expenses for the nine month period ended July 31, 2018 compared to the same period in 2017, was~~realized gains were primarily due to the ~~approximately $8.9 million decrease in~~realized gain on the ~~provision for incentive compensation expense and an approximately $754,000 decrease in management fee expense paid by~~sale of Focus Pointe, a portfolio company of the ~~Company, including the voluntary management fee waiver. These decreases were partially offset by increases in interest and other borrowing costs~~PE Fund, of approximately ~~$709,000~~$773,000 and proceeds of approximately ~~$1.8~~$1.2 million ~~in unamortized deferred financing fees for~~from the ~~Senior Notes that~~PE Fund related to tax refunds and release of escrow funds related to former PE Fund portfolio companies which were ~~expensed at the time they were repaid.~~recorded as realized gains. The Company ~~incurred~~also received carried interest payments from the PE Fund totaling approximately ~~$800,000 of~~$91,000 related to these transactions, which were recorded as additional ~~interest expense for a brief period during the nine month period ended July 31, 2018, when both the Senior Notes and~~realized gains.

³ The NAV discount referred to herein is the average daily discount to NAV for a quarter. The discount is determined using the most recently determined NAV per share, which is typically the prior quarter end’s NAV per share and the Company stock closing price on any given day for the quarter.

~~Senior Notes II were outstanding at the same time. Also during the period,~~

On December 5, 2019, the Company ~~recorded~~sold 162,999 preferred shares of Advantage for approximately ~~$785,000~~$1.6 million, resulting in a realized loss of ~~additional interest expense associated with~~approximately $33,000.
On January 1, 2020, the ~~deferred tax liability resulting from~~Company received approximately $28,000 for the ~~installment~~ sale ~~treatment applied to the realized gain associated with the U.S. Gas note.   The interest expense is required to be paid under IRS Code section 453A.   The $785,000 is comprised~~ of the ~~calculated interest expense for FY 2017~~Array warrant which was recorded as ~~well as an estimate~~a realized gain.
On March 30, 2020, the Company received approximately $1.3 million for the ~~nine~~sale of the Apex warrant, which resulted in a realized loss of approximately $558,000.
During the six month period ended ~~July 31, 2018.   The Company has discussed with the IRS whether the IRS would be willing to issue a ruling to~~April 30, 2020, the Company ~~that the Company is not liable for this interest expense given its “pass-through” status as a Regulated Investment Company. The Company has not yet received a response~~also recorded realized losses of approximately $11,000 from the IRS, but has determined to record the associated interest expense during the period. The amount of estimated interest expense associated with the fourth fiscal quarter is approximately $85,000.   The estimate is subject to change based on the various inputs used in the calculation which can change based on market conditions. The portfolio fees - asset management are payable to TTG Advisers for monitoring and other customary fees received by the GP from portfolio companies of the PE Fund. To the extent the GP or TTG Advisers receives advisory, monitoring, organization or other customary fees from any portfolio company of the PE Fund or management fees related to the PE Fund, 25% of such fees shall be paid to or retained by the GP and 75% of such fees shall be paid to or retained by TTG Advisers. On October 31, 2017, the Board approved the renewal of the Advisory Agreement for the 2018 fiscal year. The Company and the Adviser agreed on an expense cap for fiscal 2017 of 3.25% under the Modified Methodology. For fiscal year 2018, the Adviser has agreed to continue the 3.25% expense cap under the Modified Methodology. The amount of any payments made by the GP of the PE Fund to TTG Advisers pursuant to the Portfolio Management Agreement between the GP and TTG Advisers respecting the PE Fund continues to be excluded from the calculation of the Company’s expense ratio under the Expense Limitation Agreement. In addition, for fiscal years 2010 through 2018, TTG Advisers voluntarily agreed to extend the Voluntary Waiver. TTG Advisers also voluntarily agreed that any assets of the Company that are invested in exchange-traded funds would not be taken into account in the calculation of the base management fee due to TTG Advisers under the Advisory Agreement. As of July 31, 2018, the Company did not have an investment in an exchange traded fund. Under the Modified Methodology, for the nine month period ended July 31, 2018, the Company’s annualized expense ratio was 2.79%, (taking into account the same carve outs as those applicable to the expense cap). In addition, the Adviser has agreed, effective November 1, 2017, to a revised management fee structure that ties management fees to the NAV discount3 as follows: (A) If the Company’s NAV discount is greater than 20%, the management fee for the current quarter is reduced to 1.25%; (B) If the NAV discount is between 10% and 20%, the management fee will be 1.50%; and (C) If the NAV discount is less than 10% or eliminated, the 1.50% management fee would be re-examined, but in no event would it exceed 1.75%. For the quarter ended July 31, 2018, the management fee was 1.25%.
Pursuant to the terms of the Advisory Agreement, during the nine month period ended July 31, 2018, the provision for incentive compensation was decreased by a net amount of approximately $2.1 million to $0, including both the pre-incentive fee net operating income and the capital gain incentive fee. The net decrease in the provision for incentive compensation reflects the realized loss on the U.S. Gas loan, the realized gain on the Centile equity and the Valuation Committee’s determination to decrease the fair values of twelve of the Company’s portfolio investments (Advantage, Dukane, Equus, Initials, MVC Environmental, RuMe, Turf, U.S. Gas, SCSD, U.S. Tech, Centile escrow and ~~Crius) by a total of~~ approximately $17.9 million. The net decrease in the provision also reflects the Valuation Committee’s determination to increase the fair values of eight of the Company’s portfolio investments (Centile, Custom Alloy, Highpoint, HTI, JSC Tekers, Legal Solutions, MVC Automotive and Security Holdings) by a total of approximately $6.3 million. Also, for the quarter ended July 31, 2018, no provision was recorded for the net operating income portion of the incentive fee as pre-incentive fee net operating income for the quarter did not exceed the hurdle rate. As discussed in “Realized Gains and Losses on Portfolio Securities,” on July 5, 2017, the Company realized a gain of $115.9 million$86,000 from the sale of U.S. Gas (the U.S. Gas Sale”). Under the Advisory Agreement, this transaction triggered an incentive compensation payment obligation to TTG Advisers, which payment, under the Advisory Agreement, is not required to be made until soon after the completion of the audit of the fiscal 2017 financials. The fiscal 2017 incentive fee payment obligation to TTG Advisers is approximately $4.4 million. The portion
3 The NAV discount referred to herein is the average daily discount to NAV for a quarter. The discount is determined using the most recently determined NAV per share, which is typically the prior quarter end’s NAV per share and the Company stock closing price on any given day for the quarter.
of the payment obligation attributable to the cash portion of the realized gain, $1.9 million, was paid following the audit of the fiscal 2017 financials per the Advisory Agreement. Please see Note 11 of our consolidated financial statements “Incentive Compensation” for more information, particularly on the deferred collection of the incentive fee payment on the Deferred Portion.
~~REALIZED GAINS AND LOSSES ON PORTFOLIO SECURITIES~~
~~For the Nine Month Period Ended July 31, 2019 and 2018.~~ ~~Net realized gains were approximately $4.6 million and approximately $201,000 for the nine month period ended July 31, 2019 and 2018, respectively, an increase of approximately $4.4 million.~~Treasury obligations.

For the ~~Nine~~Six Month Period Ended ~~July 31,~~April 30, 2019

Net realized gains for the ~~nine~~six month period ended ~~July 31,~~April 30, 2019, were approximately ~~$4.6~~$8.5 million. The Company’s net realized gains were primarily due to the realized gain on the sale of Plymouth Rock Energy, LLC (“Plymouth”), a portfolio company of the PE Fund, which resulted in a realized gain of approximately $5.0 million and a $3.2 million realized gain associated with theredemption of the Custom Alloy series C preferred shares. These realized gains were partially offset by the $3.8 million realized loss on the sale of the Crius equity units and the approximately $219,000 realized loss on the sale of the Equus common shares. The Company also received a carried interest payment from the PE Fund of approximately $173,000 related to the sale of Plymouth, which was recorded as additional realized gains.

During the ~~nine~~six month period ended ~~July 31,~~April 30, 2019, the Company also recorded net realized gains of approximately ~~$116,000~~$78,000 from its escrow receivables.

~~For the Nine Month Period Ended July 31, 2018~~
Net realized gains for the nine month period ended July 31, 2018 were approximately $201,000. The Company’s net realized gains were primarily due to the realized gain on the sale of the Centile common equity of approximately $3.5 million which was partially offset by the realized loss of approximately $3.0 million on the U.S. Gas second lien loan due to a working capital adjustment. The second lien loan is still subject to indemnification adjustments.
During the nine month period ended July 31, 2018, the Company also recorded net realized losses of approximately $95,000 from the sale of certain short-term investments and net realized losses of approximately $257,000 from its escrow receivables.
UNREALIZED APPRECIATION AND DEPRECIATION OF PORTFOLIO SECURITIES

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020 and ~~2018.~~2019. The Company had a net change in unrealized ~~appreciation~~depreciation on portfolio investments of approximately ~~$207,000~~$44.1 million for the ~~nine~~six month period ended ~~July 31, 2019~~April 30, 2020 and ~~a net change in unrealized depreciation of~~ approximately ~~$10.6~~$1.3 million for the ~~nine~~six month period ended ~~July 31, 2018,~~April 30, 2019, a net increase of approximately ~~$10.8~~$42.8 million.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020

The Company had a net change in unrealized ~~appreciation~~depreciation on portfolio investments of approximately ~~$207,000~~$44.1 million for the ~~nine~~six month period ended ~~July 31, 2019.~~April 30, 2020. The net change in unrealized ~~appreciation~~depreciation for the ~~nine~~six month period ended ~~July 31, 2019~~April 30, 2020 was the result of the reversal of the unrealized ~~depreciation~~appreciation on the PE Fund of approximately ~~$4.6 million on the Crius equity units, reversal~~$878,000 (as a result of the Company’s sale of Focus Pointe). The net change also includes Valuation Committee determination to decrease the fair value of the Company's investments in: Advantage by approximately $964,000, Black Diamond by approximately $372,000, Custom Alloy by approximately $7.6 million, Dukane by approximately $45,000, Global Prairie by approximately $83,000, Highpoint by approximately $254,000, HTI by approximately $1.2 million, Initials by approximately $622,000, IPCC by approximately $160,000, Jedson by approximately $2.5 million, JSC Tekers by approximately $383,000, Legal Solutions by approximately $386,000, MVC Automotive by approximately $6.4 million, MVC Private Equity Fund L.P. by approximately $800,000, Powers by approximately $1.5 million, RuMe by approximately $4.7 million, Security Holdings by approximately $15.7 million, SMA by approximately $28,000, Tuf-Tug by approximately $223,000, Turf by approximately $1.0 million, U.S. Gas by approximately $1.0 million and U. S. Spray by approximately $830,000. The value of Equus stock was also decreased by approximately $1.2 million based on its market value. These changes in unrealized depreciation were partially off-set by the Valuation Committee determination to increase the fair value of ~~$3.0~~the Company’s investments in: Apex by approximately $1.5 million, ~~related to~~Foliofn by approximately $5.0 million, GTM by approximately $387,000 and Trientis by approximately $18,000.

For the ~~MVC Environmental loan receivable reserve,~~Six Month Period Ended April 30, 2019
The Company had a net change in unrealized depreciation on portfolio investments of approximately $1.3 million for the six month period ended April 30, 2019. The net change in unrealized depreciation for the six month period ended April 30, 2019 was the result of the reversal of the unrealized appreciation on the PE Fund of approximately $5.3 million (as a result of the Company’s sale of the Plymouth Rock Energy, LLC), ~~and~~$3.0 million of unrealized depreciation related to the MVC Environmental loan receivable reserve, $2.4 million of unrealized appreciation due to the reversal of the unrealized depreciation on the MVC Environmental letter of ~~credit. The net change also includes Valuation Committee determination to increase the fair value of the Company’s investments in: Array loan by approximately $62,000, Black Diamond loan~~
and warrant by a net total of approximately $885,000, Custom Alloy second lien loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately $1.9 million, Dukane loan by approximately $11,000, Foliofn ~~preferred stock by $790,000, HTI loan by approximately $192,000, JSC Tekers preferred stock by approximately $94,000, Security Holdings equity and letter of~~ credit ~~by a net total of approximately $2.5 million, Turf loans by approximately $233,000, MVC Automotive equity by approximately $374,000~~ and the Centile escrow by $116,000. The value of Crius stock was also increased by approximately $5.5 million based on its market value. These changes in unrealized appreciation were partially off-set by the Valuation Committee determination to decrease the fair value of the Company’s investments in: Advantage preferred stock by approximately $918,000, ~~Highpoint loan by approximately $51,000,~~ Initials loan by approximately ~~$688,000,~~$407,000, Legal Solutions loan by approximately $118,000, MVC Environmental loan and common stock by a total of approximately $3.9 million, RuMe series B-1 preferred stock, guarantee and letter of credit by a net total of approximately ~~$2.2~~$2.1 million, Trientis loan by approximately ~~$121,000,~~$37,000, U.S. Spray common stock by approximately $3.1 million, U.S. Gas loan by approximately ~~$1.6 million~~$440,000 and the MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately ~~$705,000.~~$306,000. The value of Equus stock was ~~also~~ decreased by approximately ~~$1.7 million~~$711,000 based on its market value.
~~For the Nine Month Period Ended July 31, 2018~~
The Company had a net change in unrealized depreciation on portfolio investments of approximately $10.6 million for the nine month period ended July 31, 2018. The net change in unrealized depreciation for the nine month period ended July 31, 2018 was the result of the reversal of the unrealized appreciation on the Centile equity interest of approximately $3.3 million (as a result of the Company’s sale of the Centile equity interest) and the Valuation Committee determination to decrease the fair value of the Company’s investments in: Advantage preferred stock by approximately $61,000, Dukane loan by approximately $29,000, Foliofn preferred stock by $724,000, Initials loan by approximately $222,000, MVC Environmental loan and letter of credit by a total of approximately $5.4 million, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $3.0 million, Turf loans by approximately $371,000, U.S. Gas loan by approximately $874,000, SCSD common stock by approximately $134,000 and the U.S. Tech loan by $55,000. The market values of Crius and Equus decreased by approximately $6.2 million and $1.3 million, respectively. These changes in unrealized depreciation were partially off-set by the Valuation Committee determination to increase the fair value of the Company’s investments in: ~~Centile equity interest~~Array loan by ~~$491,000,~~approximately $62,000, Black Diamond loan and warrant by a net total of approximately $893,000, Custom Alloy second lien ~~loan,~~loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately ~~$3.6~~$1.8 million, Dukane loan by approximately $10,000, Foliofnpreferred stock by $401,000, Highpoint loan by ~~approximately $99,000,~~$516, HTI loan by approximately ~~$63,000,~~$145,000, JSC Tekers ~~Holdings~~ preferred stock by approximately $40,000, Legal Solutions loan by approximately $2,700, MVC Automotive equity interest by approximately $1.9 million, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $2.4 million and$34,000, Security Holdings equity ~~interest~~ and letter of credit by a net total of ~~$62,000.~~approximately $3.7 million, Turf loans by approximately $109,000, MVC Automotive equity by approximately $630,000 and the Centile escrow by $49,000. The value of Crius stock was increased by approximately $5.5 million based on its market value.

PORTFOLIO INVESTMENTS

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020 and the Year Ended October 31, ~~2018.~~2019. The cost of the portfolio investments held by the Company at ~~July 31, 2019~~April 30, 2020 and at October 31, ~~2018~~2019 was ~~$426.3~~$345.7 million and ~~$409.6~~$415.7 million, respectively, ~~an increase~~a decrease of approximately ~~$16.7~~$70.0 million. The aggregate fair value of portfolio investments at ~~July 31, 2019~~April 30, 2020 and at October 31, ~~2018~~2019 was ~~$339.4~~$226.3 million and ~~$324.5~~$340.2 million, respectively, ~~an increase~~a decrease of approximately ~~$14.9~~$113.9 million. The cost and fair value of cash, restricted cash and cash equivalents held by the Company at ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018~~2019 was ~~$21.9~~$50.6 million and ~~$15.9~~$11.7 million, respectively, representing an increase of approximately ~~$6.0~~$38.9 million.

For the ~~Nine~~Six Month Period Ended ~~July 31, 2019~~April 30, 2020

During the ~~nine~~six month period ended ~~July~~April 30, 2020, the Company made follow-on investments in five portfolio companies that totaled approximately $11.5 million. Specifically, on November 14, 2019 and February 28, 2020, the Company loaned $50,000 and $300,000, respectively, to RuMe Inc. (“RuMe”) on its lines of credit, increasing the balances to approximately $2.2 million and approximately $727,000, respectively. On December 13, 2019 and February 3, 2020, the Company loaned approximately $1.6 million and $1.7 million, respectively, to Jedson, increasing the first lien loan to approximately $9.4 million. On January 10, 2020, the Company loaned approximately $3.8 million to Apex, increasing the first lien loan to approximately $18.8 million at that time. The maturity date of the loan was extended to May 15, 2020. The Company also received a warrant as part of this investment. During the six month period ended April 30, 2020, Custom Alloy borrowed approximately $1.7 million on its revolving credit facility, increasing the balance outstanding to approximately $3.7 million. During the six month period ended April 30, 2020, the Company loaned approximately $2.5 million to Security Holdings B.V., increasing its senior subordinated loan outstanding amount to approximately $8.6 million.
On November 1, 2019, U.S. Gas made a principal payment of approximately $32.8 million on its second lien loan.

On November 4, 2019, the Company received net proceeds of approximately $1.0 million related to the G3K Displays, Inc. settlement.
On November 5, 2019, the Company received proceeds of approximately $1.0 million related to the Centile escrow.
On November 8, 2019, the Company received proceeds of approximately $2.7 million from the PE Fund related to the sale of Focus Pointe, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Focus Pointe investment totaled approximately $1.9 million, resulting in a realized gain of approximately $773,000. The Company also received a carried interest payment from the PE Fund of approximately $48,000 related to the sale, which was recorded as additional realized gains.
On November 8, 2019, the Company received proceeds of approximately $291,000 from the PE Fund related to tax refunds received by the PE Fund related to Plymouth Rock Energy, LLC. The additional proceeds were recorded as realized gains. The Company also received a carried interest payment from the PE Fund of approximately $11,000 related to these proceeds, which was recorded as additional realized gains.
On December 5, 2019, the Company sold 162,999 preferred shares of Advantage for approximately $1.6 million, resulting in a realized loss of approximately $33,000.
On January 1, 2020, Array repaid its second lien loan in full, including all accrued interest totaling approximately $6.4 million. The Company also received approximately $28,000 for the sale of the warrant which was recorded as a realized gain.
On January 10, 2020, Essner repaid its first lien loan in full, including all accrued interest totaling approximately $3.6 million.
On January 31, 2020, Morey’s repaid its second lien loan in full, including all accrued interest totaling approximately $16.8 million.
On February, 21, 2020, the Company received proceeds of approximately $878,000 from the PE Fund related to the release of escrow funds related to former PE Fund portfolio companies AccuMed Corp., Focus Pointe Global andPlymouth Rock Energy, LLC. The Company also received an approximately $32,000 carried interest payment.
On March 6, 2020, U.S. Tech made an approximately $367,000 principal payment on its loan.
On March 30, 2020, Apex repaid its first lien loan in full including all accrued interest, totaling approximately $18.9 million. The Company received a free warrant as part of the approximately $3.9 million follow-on investment on January 10, 2020 in which approximately $1.9 million of the approximately $3.9 million cost basis of the loan was allocated to the cost of the warrant. On March 30, 2020, the Company also received approximately $1.3 million for the sale of the warrant, which resulted in a realized loss ofapproximately $558,000 based on the allocated cost of the warrant. The net impact of the warrant increased net assets by approximately $1.3 million.
On April 6, 2020, Turf’s senior subordinated loan and third lien loan were combined into a non-amortizing subordinated loan in the amount of $8,697,056 with a 10% cash interest rate and a maturity of October 7, 2023.
During the six month period ended April 30, 2020, Turf made a principal payment of $70,000 on its third lien loan.
During the six month period ended April 30, 2020, Legal Solutions made $2.4 million in principal payments on its loan.

During the quarter ended January 31, 2020, the Valuation Committee increased the fair value of the Company’s investments in: Black Diamond by approximately $256,000, Foliofn, by approximately $5.7 million, JSC Tekers by $350,000, Trientis by approximately $72,000, Turf by approximately $60,000, MVC Private Equity Fund L.P. by approximately $2.0 million, GTM by approximately $817,000, MVC Automotive equity by approximately $486,000 and Apex by approximately $1.5 million. In addition, increases in the cost basis of the loans to Apex, Black Diamond, Custom Alloy, Dukane, Global Prairie, GTM, Highpoint, HTI, Jedson, Legal Solutions, Morey’s, RuMe, Security Holdings, SMA and Tuf-Tug due to the capitalization of PIK interest totaling approximately $1.8 million. The Valuation Committee also decreased the fair value of the Company's investments in: Advantage by approximately $129,000, Custom Alloy by approximately $387,000, Dukane by approximately $45,000, Initials by approximately $103,000, RuMe by approximately $1.6 million, Security Holdings by approximately $7.1 million, Tuf-Tug by approximately $62,000, U.S. Gas by approximately $1.0 million and U.S. Spray by approximately $260,000.
During the quarter ended April 30, 2020, the Valuation Committee decreased the fair value of the Company’s investments in: Advantage by approximately $835,000, Black Diamond by approximately $628,000, Custom Alloy by approximately $7.2 million, Foliofn by approximately $632,000, Global Prairie by approximately $83,000, GTM by approximately $430,000, Highpoint by approximately $254,000, HTI by approximately $1.2 million, Initials by approximately $519,000, IPCC by approximately $160,000, Jedson by approximately $2.5 million, JSC Tekers by approximately $733,000, Legal Solutions by approximately $386,000, MVC Automotive by approximately $6.9 million, MVC Private Equity Fund L.P. by approximately $2.8 million, Powers by approximately $1.5 million, RuMe by approximately $3.1 million, Security Holdings by approximately $8.6 million, SMA by approximately $28,000, Trientis by approximately $54,000, Tuf-Tug by approximately $161,000, Turf by approximately $1.1 million and U.S. Spray by approximately $570,000. There were also increases in the cost basis of the loans to Black Diamond, Dukane, Global Prairie, GTM, Highpoint, HTI, Jedson, Legal Solutions, RuMe, Security Holdings, SMA and Tuf-Tug due to the capitalization of PIK interest totaling approximately $600,000.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the Company’s investments in: Advantage by approximately $964,000, Black Diamond by approximately $372,000, Custom Alloy by approximately $7.6 million, Dukane by approximately $45,000, Global Prairie by approximately $83,000, Highpoint by approximately $254,000, HTI by approximately $1.2 million, Initials by approximately $622,000, IPCC by approximately $160,000, Jedson by approximately $2.5 million, JSC Tekers by approximately $383,000, Legal Solutions by approximately $386,000, MVC Automotive by approximately $6.4 million, MVC Private Equity Fund L.P. by approximately $800,000, Powers by approximately $1.5 million, RuMe by approximately $4.7 million, Security Holdings by approximately $15.7 million, SMA by approximately $28,000, Tuf-Tug by approximately $223,000, Turf by approximately $1.0 million, U.S. Gas by approximately $1.0 million and U. S. Spray by approximately $830,000. The Valuation Committee also increased the fair value of the Company's investments in: Apex by approximately $1.5 million, Foliofn by approximately $5.0 million, GTM by approximately $387,000 and Trientis by approximately $18,000. In addition, increases in the cost basis of the loans to Apex, Black Diamond, Custom Alloy, Dukane, Global Prairie, GTM, Highpoint, HTI, Jedson, Legal Solutions, Morey’s, RuMe, Security Holdings, SMA and Tuf-Tug due to the capitalization of PIK interest totaling approximately $2.4 million.
At April 30, 2020, the fair value of all portfolio investments, exclusive of escrow receivables, was $226.3 million with a cost basis of $345.7 million. At April 30, 2020, the fair value and cost basis of Legacy Investments was $11.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $214.9 million and $330.7 million, respectively. At October 31, 2019, the fair value of all portfolio investments, exclusive of escrow receivables, was $340.2 million with a cost basis of $415.7 million. At October 31, 2019, the fair value and cost basis of the Legacy Investments were $6.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $333.8 million and $400.7 million, respectively.

For the Fiscal Year Ended October 31, 2019
During the fiscal year ended October 31, 2019, the Company made ~~five~~six new investments, committing capital that totaled approximately ~~$29.4~~$32.4 million. Pursuant to an exemptive order received by the Company from the SEC (the “Order”), that allows the Company to co-invest, subject to certain conditions, with certain
affiliated private funds as described in the Order, each of the Company and the Private Fund co-invested in GTM ($1.9 million investment for the Company). The Company also invested in Powers ($6.5 million), IPCC ($8.0 million), Jedson ($6.0 million) ~~and~~, SMA ($7.0 million) and Global Prairie ($3.0 million).

During the ~~nine month period~~fiscal year ended ~~July~~October 31, 2019, the Company made follow-on investments in ~~four~~six portfolio ~~company~~companies that totaled approximately ~~$9.1~~$12.5 million. OnSpecifically, on December 21, 2018, the Company loaned an additional $2.0 million to Custom Alloy in the form of a second lien loan with an interest rate of 11% and a maturity date of December 23, 2019. During the ~~nine month period~~fiscal year ended ~~July~~October 31, 2019, the Company loaned ~~$750,000~~approximately $1.4 million to ~~RuMe.~~RuMe and received a new warrant. On June 7, 2019, the Company invested approximately $3.9 million in GTM increasing the second lien loan by $3.5 million and investing approximately $420,000 for additional common shares. ~~On July 1,~~During the fiscal year ended October 31, 2019, Custom Alloy borrowed ~~$800,000~~approximately $2.1 million on its revolving credit facility, ~~with~~which has a 15% interest rate and a maturity date of ~~December 7, 2024.~~April 30, 2020. On July 15, 2019, the Company loaned an additional $1.0 million to HTI increasing its second lien loan to approximately ~~$11.3~~$11.4 million as of ~~July~~October 31, 2019. On September 10, 2019, the Company invested $1.0 million in additional common equity of MVC Automotive. On September 26, 2019, the Company loaned approximately $552,000 to Security Holdings, increasing its senior subordinated loan to approximately $6.0 million as of October 31, 2019.

On November 9, 2018, Custom Alloy repaid its first lien loan in full, including all accrued interest.

On November 13, 2018, Custom Alloy repaid its $1.4 million second lien loan in full, including all accrued interest.

On November 27, 2018, the Company funded approximately $3.0 million related to the MVC Environmental letter of credit, which was called by the beneficiary.

On December 27, 2018, the Company received proceeds of approximately $7.5 million from the PE Fund related to the sale of Plymouth Rock Energy, LLC, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Plymouth Rock Energy, LLC investment totaled approximately $2.5 million, resulting in a realized gain of approximately $5.0 million. The Company also received a carried interest payment from the PE Fund of approximately $173,000 related to the sale, which was recorded as additional realized gains.

On December 27, 2018, the Company received a dividend of approximately $543,000 from the PE Fund related to Focus Pointe Global.

On February 7, 2019, Vistra Energy and Crius Energy Trust (“Crius”) announced that they entered into a definitive agreement pursuant to which Vistra Energy will acquire Crius for cash consideration of CAN$7.57 per trust unit. On February 20, 2019, Vistra Energy agreed to increase its acquisition price for Crius to CAN$8.80 per trust unit, an increase of CAN$1.23 per trust unit.

On April 26, 2019, RuMe made a principal payment on the revolver of $500,000 and Morey’s made a principal payment of approximately $591,000 on its second lien loan.

On April 30, 2019, Custom Alloy redeemed its series A, B and C preferred shares and consolidated its second lien loans in exchange for two second lien loans of approximately $32.5 million and $6.1 million with interest rates of 15% and maturity dates of April 30, 2022. The Company also funded approximately $595,000 as part of the transaction related to the $6.1 million second lien loan. The Company realized a gain of approximately $3.2 million and approximately $2.3 million of PIK interest and dividends associated with the transaction. Also on April 30, 2019, the Company provided Custom Alloy a $3.0 million line of credit with a 15% interest rate and a maturity date of April 30, ~~2020. There was~~2020 with no amount outstanding as of ~~April 30, 2019.~~that date.

On June 14, 2019, Array Information Technology, Inc. (“Array”) made a principal payment of approximately $114,000 on its second lien loan.

On June 19, 2019, Essner Manufacturing, LP (“Essner”) made a principal payment of approximately $78,000 on its first lien loan.

On July 1, 2019, Turf Products, LLC (“Turf”) made a principal payment of $70,000 on its third lien loan.
On July 15, 2019, the Company’s Crius trust units were sold for $6.71 per share resulting in total proceeds of approximately $22.0 million. The Company realized a loss of approximately $3.8 million as a result of this transaction.

On July 29, 2019, the Company sold 608,310 shares of Equus Total Return, Inc. (“Equus”) common stock for approximately $1.0 million, resulting in a realized loss of approximately $219,000.

~~During~~On August 12, 2019, the ~~nine month period~~Company sold 608,310 common shares of Equus totaling approximately $985,000 in proceeds and resulting in a realized loss of approximately $268,000.
On August 12, 2019, the Company converted the MVC Environmental loan, unpaid expenses and accrued interest to additional cost basis in the common stock of MVC Environmental, resulting in a realized gain of approximately $1.4 million.
On September 13, 2019, the Company sold the common stock of MVC Environmental, receiving proceeds of $45,000 which resulted in a realized loss of approximately $14.4 million.
On October 1, 2019, Tin Roof repaid its $3.8 million loan in full, including all accrued interest. Also during the fiscal year ended ~~July~~October 31, 2019, Tin Roof made principal payments totaling approximately ~~$99,000 on its second lien loan.~~$99,000.

On October 17, 2019, the Company recorded a $1.6 million realized gain associated with a settlement, which is expected to be paid in November 2019, related to a former portfolio company, G3K Display, Inc. The Company incurred costs of approximately $543,000 related to the settlement.
During the quarter ended January 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Black Diamond loan and warrant by approximately $767,000, Custom Alloy second lien loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately $2.3 million, Dukane loan by $286, ~~Folio~~fn Foliofn preferred stock by $32,000, Highpoint loan by approximately $252, HTI loan by approximately $80,000, JSC Tekers preferred stock by approximately $82,000, Security Holdings equity and letter of credit by a net total of $25,000, Turf loan by approximately $15,000 and the Centile escrow by $49,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug and Security Holdings were due to the capitalization of PIK interest totaling approximately $964,000. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage preferred stock by approximately $244,000, Essner loan by approximately $21,000, Initials loan by approximately $412,000, Legal Solutions loan by approximately $118,000, MVC Automotive equity by approximately $117,000, MVC Environmental loan by approximately $875,000 and common stock by approximately $3.0 million, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $1.1 million, RuMe series B-1 preferred stock, guarantee and letter of credit by a net total of approximately $308,000, Trientis loan by approximately $77,000, U.S. Tech loan by approximately $23,000 and the U.S. Gas loan by approximately $797,000.

During the quarter ended April 30, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by approximately $62,000, Black Diamond loan and warrant by a net total of approximately $126,000, Dukane loan by approximately $10,000, Essner loan by approximately $21,000, ~~Folio~~fn Foliofn preferred stock by $369,000, Highpoint loan by approximately $264, HTI loan by approximately $65,000, Initials loan by approximately $5,000, MVC Automotive equity by approximately $747,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $833,000, Security Holdings equity and letter of credit by a net total of approximately $3.7 million, Trientis loan by approximately $40,000, Turf loans by approximately $94,000, U.S. Tech loan by approximately $23,000, U.S. Gas loan by approximately $357,000 and the Centile escrow by approximately $29,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings and the Custom Alloy preferred stock were due to the capitalization of PIK interest/dividends totaling approximately $3.4 million. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage preferred stock by approximately $674,000, Custom Alloy loans by a total of approximately $504,000, JSC Tekers preferred stock by approximately $48,000, RuMe series B-1 preferred stock and letter of credit by a total of approximately $1.8 million and the U.S. Spray common stock by $3.1 million.

During the quarter ended July 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Centile escrow by approximately $38,000, Custom Alloy loans by a total of approximately $115,000, Dukane loan by approximately $1,000, ~~Folio~~fn Foliofn preferred stock by $389,000, HTI loan by approximately $47,000, JSC Tekers preferred stock by approximately $60,000 and Turf loans by approximately $124,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings, Jedson and Custom Alloy were due to the capitalization of PIK interest/dividends totaling approximately $780,000. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Array loan by approximately $1,000, Black Diamond loan and warrant by a net total of approximately $8,000, Highpoint loan by approximately $51,000, Initials loan by approximately $281,000, MVC Automotive equity by approximately
~~$256,000,~~ $256,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $399,000, RuMe series B-1 preferred stock and letter of credit by a total of approximately $113,000, Security Holdings equity and letter of credit by a net total of approximately $1.2 million, Trientis loan by approximately $84,000 and U.S. Gas loan by approximately $1.2 million.

During the ~~nine month period~~quarter ended ~~July~~October 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by $622, Centile escrow by approximately $50,000, Foliofn preferred stock by $569,000, JSC Tekers preferred stock by $737,000, MVC Automotive equity by approximately $327,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $566,000, Tuf-Tug loan and common stock by a total of approximately $78,000 and Turf loans by approximately $69,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tuf-Tug, Security Holdings, Jedson, SMA and Black Diamond were due to the capitalization of PIK interest/dividends totaling approximately $747,000. The Valuation Committee also decreased the fair value of the Company's investments in: Advantage preferred stock by approximately $403,000, Black Diamond loan and warrant by a net total of approximately $14,000, Custom Alloy loans by a total of approximately $98,000, Dukane loan by approximately $9,000, Initials loan by approximately $715,000, RuMe preferred stocks, warrants and letter of credit by a net total of approximately $839,000, Security Holdings equity and letter of credit by a net total of $227,000, Trientis loan by approximately $86,000, U.S. Gas loan by approximately $857,000 and U.S. Spray common stock by $500,000.
During the fiscal year ended October 31, 2019, the Valuation Committee increased the fair value of the Company’s investments in: Array loan by approximately ~~$62,000,~~$63,000, Black Diamond loan and warrant by a net total of approximately ~~$885,000,~~$871,000, Custom Alloy second lien loans, series A preferred stock, series B preferred stock and series C preferred stock by a net total of approximately ~~$1.9~~$1.8 million, Dukane loan by approximately ~~$11,000, Folio~~fn $1,000, Foliofn preferred stock by ~~$790,000,~~$1.4 million, HTI loan by approximately $192,000, JSC Tekers preferred stock by approximately ~~$94,000,~~$831,000, Security Holdings equity and letter of credit by a net total of approximately ~~$2.5~~$2.2 million, Tuf-Tug loan and common stock by approximately $78,000, Turf loans by approximately ~~$233,000,~~$302,000, MVC Automotive equity by approximately ~~$374,000~~$701,000 and the Centile escrow by ~~$116,000.~~$166,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, GTM, Tin Roof, Tuf-Tug, Security Holdings, Jedson, SMA and the Custom Alloy preferred stock were due to the capitalization of PIK interest/dividends totaling approximately ~~$5.1~~$5.9 million. The Valuation Committee also decreased the fair value of the ~~Company’s~~Company's investments in: Advantage preferred stock by approximately ~~$918,000,~~$1.3 million, Highpoint loan by approximately $51,000, Initials loan by approximately ~~$688,000,~~$1.4 million, Legal Solutions loan by approximately $118,000, MVC Environmental loan and common stock by a total of approximately $3.9 million, RuMe series B-1 preferred stock, guarantee and letter of credit by a net total of approximately ~~$2.2~~$3.0 million, Trientis loan by approximately ~~$121,000,~~$208,000, U.S. Spray common stock by ~~$3.1~~$3.6 million, U.S. Gas loan by approximately ~~$1.6~~$2.4 million and the MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately ~~$705,000.~~$140,000.

At ~~July~~October 31, 2019, the fair value of all portfolio investments, exclusive of ~~U.S. Treasury obligations and~~ escrow receivables, was ~~$339.4~~$340.2 million with a cost basis of ~~$426.3~~$415.7 million. At ~~July~~October 31, 2019, the fair value and cost basis of the Legacy Investments were ~~$5.8~~$6.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was ~~$333.6~~$333.8 million and ~~$411.3~~$400.7 million, respectively. At October 31, 2018, the fair value of all portfolio investments, exclusive of escrow receivables, was $324.5 million with a cost basis of $409.6 million. At October 31, 2018, the fair value and cost basis of the Legacy Investments was $5.0 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $319.5 million and $394.6 million, respectively.

~~For the Fiscal Year Ended October 31, 2018~~Portfolio Companies

During the ~~fiscal year ended October 31, 2018, the Company made~~ six new investments, committing capital that totaled approximately $41.5 million. Pursuant to the Order, that allows the Company to co-invest, subject to certain conditions, with certain affiliated private funds as described in the Order, each of the Company and the Private Fund co-invested in Essner ($3.7 million investment for the Company), Black Diamond ($7.5 million investment for the Company), Apex ($15.0 million investment for the Company), Array ($6.0 million investment for the Company), Tuf-Tug ($5.6 million investment for the Company) and Tin Roof ($3.7 million investment for the Company).
During the fiscal year ended October 31, 2018, the Company made follow-on investments in eight portfolio companies that totaled approximately $20.8 million. On November 8, 2017, the Company loaned an additional $1.5 million to SCSD in the form of a senior secured loan. The loan has an interest rate of 12% and a maturity date of November 7, 2020. On December 21, 2017, the Company loaned approximately $526,000 to Initials increasing the senior subordinated loan amount to approximately $5.3 million. On December 22, 2017, the Company loaned $1.4 million to Turf in the form of a third lien loan. The loan has an interest rate of 10% and a maturity date of August 7, 2020. On February 28, 2018, the Company committed $6.0 million to Custom Alloy in the form of a first lien loan with an interest rate of 10% and a maturity date of October 31, 2018. The funded amount as of October 31, 2018, net of repayments, was approximately $539,000 with no additional borrowings available on the commitment. On March 19, 2018, the Company invested approximately $68,000 in Trientis for a warrant. On March 22, 2018, the Company loaned approximately $2.3
million to MVC Automotive increasing the bridge loan amount to approximately $7.1 million and extending the maturity date to June 30, 2019. On April 10, 2018, the Company loaned approximately $308,000 to Security Holdings, increasing the bridge loan amount to approximately $4.7 million. On May 30, 2018, the Company loaned an additional $4.8 million to Security Holdings in the form of a senior subordinated loan and provided a 3.3 million Euro letter of credit. The loan has an annual interest rate of 12.45% and a maturity date of May 31, 2020. During the fiscal year ended October 31, 2018, the Company loaned approximately $3.6 million to RuMe, increasing the subordinated loan amount to approximately $3.3 million and the revolver balance to approximately $1.5 million.
On November 28, 2017, the Company restructured the Custom Alloy second lien loan and unsecured subordinated loan. The second lien loan was restructured into a $3.5 million second lien loan with an interest rate of 10% and a maturity date of December 31, 2020, 6,500 shares of series B preferred Stock with a 10% PIK coupon and a maturity date of December 31, 2020 and 17,935 shares of series C preferred Stock. The unsecured subordinated loan was restructured into 3,617 shares of series A preferred Stock with a 12% PIK coupon and a maturity date of April 30, 2020. The Company also provided a $2.0 million and $1.4 million letter of credit.
~~On November 29, 2017, the Company received a principal payment of $3.0 million from Dukane resulting in an outstanding balance of approximately $4.4 million as of October 31, 2018.~~
~~On December 29, 2017, the Company received a principal payment of $200,000 from Vestal.~~
Effective January 1, 2018, the cost basis of the U.S. Gas second lien loan was decreased by approximately $3.0 million due to a working capital adjustment, resulting in a realized loss of approximately $3.0 million. The second lien loan is still subject to indemnification adjustments.
~~On February 9, 2018, FDS repaid its loan in full, including all accrued interest.~~
~~On April 4, 2018, Vestal repaid its loan in full, including all accrued interest.~~
~~On April 11, 2018, Morey’s made a principal payment of $2.0 million on its second lien loan.~~
On July 31, 2018, the Company sold its interest in Centile and received cash proceeds of approximately $5.8 million at closing. An additional $1.2 million of proceeds are held in escrow for 15 months from the closing. Assuming the full receipt of all escrow proceeds, the sale of Centile will result in a realized gain of approximately $3.5 million.
On October 31, 2018, the Custom Alloy $1.4 million letter of credit was drawn upon, which resulted in the Company receiving a $1.4 million term note with a 15% interest rate and a maturity date of October 31, 2021.
~~During the fiscal year ended October 31, 2018 Turf made principal payments totaling $210,000 on its third lien loan.~~
During the quarter ended January 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Centile equity interest by $295,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letter of credit by a total of approximately $638,000, Highpoint loan by approximately $99,000, Initials loan by approximately $46,000, JSC Tekers preferred stock by approximately $370,000, Legal Solutions loan by approximately $1,000, MVC Automotive equity interest by approximately $1.8 million, MVC Environmental letter of credit by approximately $7,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $394,000, RuMe guarantee and letter of credit by a total of approximately $57,000 and Security Holdings equity interest by approximately $812,000. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, Custom Alloy, RuMe, Dukane, Morey’s, Highpoint and Security Holdings were due to the capitalization of PIK interest totaling $715,324. The Valuation Committee also decreased the fair value of the Company’s investments in: Advantage preferred
stock by approximately $143,000, Custom Alloy letter of credit by approximately $70,000, Dukane loan by approximately $30,000, Foliofn preferred stock by $543,000, HTI loan by approximately $130,000, MVC Environmental loan by approximately $498,000, RuMe series B-1 preferred stock, series C preferred stock, common stock and warrants by a total of approximately $1.2 million, Turf loans by approximately $136,000, U.S. Gas loan by approximately $1.7 million and SCSD common stock by approximately $134,000.
~~During the quarter~~month period ended April 30, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Advantage preferred stock by approximately $82,000, Centile equity interest by $196,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $3.0 million, Dukane loan by approximately $300, Legal Solutions loan by approximately $900, MVC Automotive equity interest by approximately $934,000, RuMe guarantee by approximately $28,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $167,000 and U.S. Gas loan by approximately $909,000. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials and Security Holdings were due to the capitalization of PIK interest totaling $635,592. The Valuation Committee also decreased the fair value of the Company’s investments in: Foliofn preferred stock by $66,000, HTI loan by approximately $49,000, Initials loan by approximately $82,000, JSC Tekers Holdings preferred stock by approximately $176,000, MVC Environmental loan and letter of credit by a total of approximately $267,000, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $1.8 million, Security Holdings equity interest by approximately $2.3 million and Turf loans by approximately $288,000.
During the quarter ended July 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $36,000, Dukane loan by approximately $300, HTI loan by approximately $242,000, Legal Solutions loan by approximately $800, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $1.9 million, Security Holdings equity interest and letter of credit by a total of approximately $1.6 million and Turf loans by approximately $53,000. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials, Array and Security Holdings were due to the capitalization of PIK interest totaling $893,912. The Valuation Committee also decreased the fair value of the Company’s investments in: Foliofn preferred stock by $115,000, Initials loan by approximately $186,000, JSC Tekers Holdings preferred stock by $154,000, MVC Automotive equity interest by $819,000, MVC Environmental loan and letter of credit by a total of approximately $4.7 million, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $114,000, U.S. Gas loan by approximately $109,000,U.S. Tech loan by $55,000 and the Centile escrow by approximately $257,000 that was recorded as a realized loss.
During the quarter ended October 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Custom Alloy second lien loan, series A preferred stock, series B preferred stock, series C preferred stock and letters of credit by a total of approximately $2.4 million, Dukane loan by approximately $300, Foliofn preferred stock by $310,000, Highpoint loan by approximately $51,000, Legal Solutions loan by approximately $900, Turf loans by approximately $52,000 and the Centile escrow by approximately $34,000 that was recorded as a realized gain. In addition, increases in the cost basis of the loans to Trientis, HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Array, Black Diamond, Tuf-Tug and Security Holdings were due to the capitalization of PIK interest totaling $927,705. The Valuation Committee also decreased the fair value of the Company’s investments in: HTI loan by approximately $144,000, Initials loan by approximately $2.2 million, JSC Tekers Holdings preferred stock by $157,000, MVC Automotive equity interest by $442,000, MVC Environmental loan and letter of credit by a total of approximately $966,000, MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $218,000, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $691,000, Security Holdings equity interest and letter of credit by a total of $747,000, Trientis loan and warrant by a total of approximately $932,000 and the U.S. Gas loan by approximately $179,000.
During the fiscal year ended October 31, 2018, the Valuation Committee increased the fair value of the Company’s investments in: Centile equity interest by $491,000, Custom Alloy second lien loan, series A preferred stock, series B preferred stock and series C preferred stock by a total of approximately $6.0 million, Highpoint loan by approximately $150,000, Legal Solutions loan by approximately $3,500, MVC Automotive equity interest by approximately $1.5 million and the MVC Private Equity Fund L.P. general partnership interest and limited partnership interest in the PE Fund by a total of approximately $2.2 million. In addition, increases in the cost basis of the loans to HTI, Legal Solutions, RuMe, Dukane, Morey’s, Highpoint, Initials, Array, Trientis, Black Diamond, Tuf-Tug and Security Holdings were due to the capitalization of PIK interest totaling $3,172,533. The Valuation Committee also decreased the fair value of the Company’s investments in: Advantage preferred stock by approximately $61,000, Dukane loan by approximately $29,000, Foliofn preferred stock by $414,000, HTI loan by approximately $80,000, Initials loan by approximately $2.5 million, JSC Tekers preferred stock by approximately $117,000, MVC Environmental loan and letter of credit by a total of approximately $6.4 million, RuMe series B-1 preferred stock, series C preferred stock, common stock, letters of credit and warrants by a total of approximately $3.7 million, Security Holdings equity interest and letter of credit by a total of $685,000, Trientis loan and warrant by a total of approximately $932,000, Turf loans by approximately $319,000, U.S. Gas loan by approximately $1.1 million, SCSD common stock by approximately $134,000, U.S. Tech loan by $55,000 and the Centile escrow by approximately $223,000 that was recorded as a realized loss.
At October 31, 2018, the fair value of all portfolio investments, exclusive of escrow receivables, was $324.5 million with a cost basis of $409.6 million. At October 31, 2018, the fair value and cost basis of investments made by the Company’s former management team pursuant to the prior investment objective (“Legacy Investments”) was $5.0 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $319.5 million and $394.6 million, respectively. At October 31, 2017, the fair value of all portfolio investments was $292.5 million with a cost basis of $363.2 million. At October 31, 2017, the fair value and cost basis of Legacy Investments was $5.4 million and $15.0 million, respectively, and the fair value and cost basis of portfolio investments made by the Company’s current management team was $287.1 million and $348.2 million, respectively.
~~Portfolio Companies~~
~~During the nine month period ended July 31, 2019,~~2020, the Company had investments in the following portfolio companies:

Advantage Insurance Inc.

Advantage, Puerto Rico, is a provider of specialty insurance, reinsurance and related services to business owners and high net worth individuals.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Advantage consisted of 750,000 shares of preferred stock at a cost basis of $7.5 million and a fair value of approximately ~~$8.8~~$7.5 million.
On December 5, 2019, the Company sold 162,999 preferred shares of Advantage for approximately $1.6 million, resulting in a realized loss of approximately $33,000.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the fair value of the preferred stock by approximately ~~$918,000.~~$964,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in Advantage consisted of ~~750,000~~587,001 shares of preferred stock atwith a cost basis of ~~$7.5~~approximately $5.9 million and a fair value of approximately ~~$7.9~~$4.9 million.

Apex Industrial Technologies, LLC

Apex, Cincinnati, Ohio, is a leading provider of automation vending equipment in industrial, retail and foodservice environments.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Apex consisted of a first lien loan with an outstanding amount of approximately $15.0 million, a cost basis of approximately $14.9 million and a fair value of approximately $15.0 million. The first lien loan had an interest rate of 12% and a maturity date of ~~March 9, 2023.~~
~~At July~~December 31, ~~2019,~~2019.
On January 10, 2020, the ~~Company’s investment in~~Company loaned Apex ~~consisted of a~~approximately $3.8 million, increasing the first lien loan ~~with an outstanding amount~~to approximately $18.8 million. The maturity date of the loan was extended to May 15, 2020. The Company also received a warrant as part of this investment.
During the six month period ended April 30, 2020, the Valuation Committee increased the fair value of the loan by approximately ~~$15.0~~$1.5 million.
On March 30, 2020, Apex repaid its first lien loan in full, including all accrued interest totaling approximately $18.9 million. The Company received a free warrant as part of the approximately $3.9 million afollow-on investment on January 10, 2020 in which approximately $1.9 million of the approximately $3.9 million cost basis of the loan was allocated to the cost of the warrant. On March 30, 2020, the Company also received approximately ~~$14.9~~$1.3 million ~~and~~for the sale of the warrant, which resulted in a ~~fair value~~realized loss ofapproximately ~~$15.0~~$558,000 based on the allocated cost of the warrant. The net impact of the warrant increased net assets by approximately $1.3 million.

At April 30, 2020, the Company no longer held an investment in Apex.

Array Information Technology, Inc.

Array, Greenbelt, Maryland, is a leading IT services firm supporting multiple command and/or control groups within the U.S. Air Force, as well as various other federal, municipal and commercial customers.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Array consisted of a second lien loan with an outstanding amount of approximately ~~$6.1~~$6.3 million, a cost basis of approximately ~~$6.0~~$6.2 million and a fair value of approximately ~~$6.1~~$6.3 million and a warrant with a cost basis and fair value of $0. The second lien loan had an interest rate of 12% cash and 4% PIK and a maturity date of October 3, 2023.

On ~~June 14, 2019,~~January 1, 2020, Array ~~made a principal payment of approximately $114,000 on~~repaid its second lien ~~loan.~~
~~During~~loan in full, including all accrued interest totaling approximately $6.4 million. The Company also received approximately $28,000 for the ~~nine month period ended July 31, 2019, the Valuation Committee increased the fair value~~sale of the ~~loan by approximately $62,000.~~warrant which was recorded as a realized gain.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company no longer held an investment in Array consisted of a second lien loan with an outstanding amount of approximately $6.2 million, a cost basis of approximately $6.1 million and a fair value of approximately $6.3 million and a warrant with a cost basis and fair value of $0.Array.

Black Diamond Equipment Rental

Black Diamond, Morgantown, West Virginia, is a heavy equipment rental company.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Black Diamond consisted of a second lien loan with an outstanding amount of approximately $7.5 million, a cost basis of approximately ~~$7.1 million and a fair value of approximately~~ $7.2 ~~million and a warrant with a cost basis and fair value of approximately $401,000. The second lien loan had an interest rate of 12.5% and a maturity date of June 27, 2022.~~
~~During the nine month period ended July 31, 2019, the Valuation Committee increased the fair value of the loan by approximately $334,000 and the warrant by approximately $551,000.~~
~~At July 31, 2019, the Company’s investment in Black Diamond consisted of a second lien loan with an outstanding amount of approximately $7.5 million, a cost basis of approximately $7.1~~ million and a fair value of approximately $7.6 million and a warrant with a cost basis of approximately $401,000 and a fair value of approximately ~~$952,000.~~$960,000. The second lien loan had an interest rate of 12.5% and a maturity date of June 27, 2022.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by approximately $309,000 and the warrant by $63,000.
At April 30, 2020, the Company's investment in Black Diamond consisted of a second lien loan with an outstanding amount of approximately $7.5 million, a cost basis of approximately $7.2 million and a fair value of approximately $7.3 million and a warrant with a cost basis of approximately $401,000 and a fair value of approximately $897,000.

~~Crius Energy Trust~~
~~Crius, Toronto, Canada, is a leading retail energy marketer.~~
~~At October 31, 2018, the Company’s investment in Crius consisted of 3,282,882 equity units at a cost of approximately $25.9 million and a market value of approximately $15.7 million.~~
On February 7, 2019, Vistra Energy and Crius announced that they entered into a definitive agreement pursuant to which Vistra Energy will acquire Crius for cash consideration of CAN$7.57 per trust unit. On February 20, 2019, Vistra Energy agreed to increase its acquisition price for Crius to CAN$8.80 per trust unit, an increase of CAN$1.23 per trust unit.
~~On July 15, 2019, the Company’s Crius trust units were sold for $6.71 per share resulting in total~~ ~~proceeds of approximately $22.0 million. The Company realized a loss of approximately $3.8 million as a result of this transaction.~~
~~At July 31, 2019, the Company no longer held a direct investment in Crius.~~
Custom Alloy Corporation

Custom Alloy, High Bridge, New Jersey, manufactures time sensitive and mission critical butt-weld pipe fittings and forgings for the natural gas pipeline, power generation, oil/gas refining and extraction, and nuclear generation markets.

At October 31, 2018, the Company’s investment in Custom Alloy consisted of a second lien loan with a cost basis of approximately $3.2 million, an outstanding balance and fair value of approximately $3.5 million, first lien loan with an outstanding balance, cost basis and fair value of approximately $539,000, term note with
an outstanding balance, cost basis and fair value of approximately $1.4 million, series A preferred stock with a cost basis of $3.0 million and a fair value of approximately $3.7 million, series B preferred stock with a cost basis of approximately $5.7 million and a fair value of approximately $6.4 million, series C preferred stock with a cost basis of approximately $17.9 million and a fair value of approximately $13.9 million.   The letter of credit had a fair value of approximately -$15,000 or a liability of approximately $15,000. The second lien loan had an interest rate of 10% and a maturity date of December 31, 2020, the first lien loan had an interest rate of 10% and a maturity date of October 31, 2018 and the term note had an interest rate of 15% and a maturity date of October 31, 2021.
~~On December 21, 2018, the Company loaned an additional $2.0 million to Custom Alloy in the form of a second lien loan with an interest rate of 11% and a maturity date of December 23, 2019.~~
~~On November 9, 2018, Custom Alloy repaid its first lien loan in full, including all accrued interest.~~
~~On November 13, 2018, Custom Alloy repaid its $1.4 million second lien loan in full, including all accrued interest.~~
On April 30, 2019, Custom Alloy redeemed its series A, B and C preferred shares and consolidated its second lien loans in exchange for two second lien loans of approximately $32.5 million and $6.1 million with interest rates of 15% and maturity dates of April 30, 2022. The Company also funded approximately $595,000 as part of the transaction related to the $6.1 million second lien loan. The Company realized a gain of approximately $3.2 million and approximately $2.3 million of PIK interest and dividends associated with the transaction. ~~Also on April 30,~~ 2019, the ~~Company provided Custom Alloy a $3.0 million line of credit with a 15% interest rate and a maturity date of April 30, 2020. There was no amount outstanding as of April 30, 2019.~~
~~On July 1, 2019, Custom Alloy borrowed $800,000 on its revolving credit facility.~~
During the nine month period ended July 31, 2019, the Valuation Committee decreased the fair values of the $3.5 million second lien loan by approximately $17,000, the $2.0 million second lien loan by approximately $3,400, the $32.5 million second lien loan by approximately $328,000, the $6.1 million second lien loan by approximately $62,000 and increased the fair value of the series A preferred stock by approximately $177,000, the series B preferred stock by approximately $403,000 and the series C preferred stock by approximately $1.8 million.
~~At July 31, 2019, the Company’s~~Company's investment in Custom Alloy consisted of a second lien loan with a cost basis and outstanding balance of approximately $32.5 million and a fair value of approximately $32.1 million, a second lien loan with a cost basis, outstanding balance and a fair value of approximately $6.1 million and a revolving credit facility with a cost basis, outstanding balance and a fair value of ~~$800,000.~~approximately $2.1 million. The second lien loans and revolving credit facility had interest rates of 15% and maturity dates of April 30, 2022 and April 30, 2020, respectively.

During the six month period ended April 30, 2020, Custom Alloy borrowed approximately $1.7 million on its revolving credit facility. The credit facility’s maturity date was also extended to April 30, 2021.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair values of the $33.1 million second lien loan by approximately $6.1 million, the $6.3 million second lien loan by approximately $1.1 million and the revolver by approximately $332,000.
At April 30, 2020, the Company's investment in Custom Alloy consisted of a second lien loan with a cost basis and outstanding balance of approximately $33.1 million and a fair value of approximately $26.6 million, a second lien loan with a cost basis and outstanding balance of approximately $6.3 million and a fair value of approximately $5.0 million and a revolving credit facility with an outstanding balance and cost basis of approximately $3.7 million and a fair value of approximately $3.4 million.

Dukane IAS, LLC

Dukane, St. Charles, Illinois, is a global provider of plastic welding equipment.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Dukane consisted of a second lien loan with an outstanding amount, ~~of approximately $4.4 million,~~ a cost basis ~~of approximately $4.3 million~~ and a fair value of approximately ~~$4.4~~$4.5 million. The second lien loan had an interest rate of 13% and a maturity date of November 17, 2020.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee ~~increased~~decreased the fair value of the loan by ~~$11,000.~~$45,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in Dukane consisted of a second lien loan with an outstanding amount, ~~of approximately $4.5 million,~~ a cost basis ~~of approximately $4.4 million~~ and a fair value of approximately $4.5 million.

Essner Manufacturing LP

Essner, Ft. Worth, Texas, manufactures and supplies complex assemblies, machined parts and precision sheet metal components to aerospace suppliers.

At October 31, 2018, the Company’s investment in Essner consisted of a first lien loan with an outstanding amount of approximately $3.7 million, a cost basis of approximately $3.6 million and a fair value of approximately $3.7 million. The first lien loan had an interest rate of 11.5% and a maturity date of December 20, 2022.
~~On June 19, 2019, Essner made a principal payment of approximately $78,000 on its first lien loan.~~
~~At July 31,~~ 2019, the ~~Company’s~~Company's investment in Essner consisted of a first lien loan with an outstanding amount of approximately $3.6 million, a cost basis of approximately $3.5 million and a fair value of approximately $3.6 million. The first lien loan had an interest rate of 11.5% and a maturity date of December 20, 2022.
On January 10, 2020, Essner repaid its first lien loan in full, including all accrued interest totaling approximately $3.6 million.
At April 30, 2020, the Company no longer held an investment in Essner.

Equus Total Return, Inc.

Equus is a publicly traded business development company and regulated investment company listed on the New York Stock Exchange (NYSE:EQS). Consistent with the Company’s valuation procedures, the Company has been marking this investment to its market price.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Equus consisted of ~~4,444,644~~3,228,024 shares of common stock with a cost of approximately ~~$10.0~~$7.5 million and a market value of approximately ~~$8.7~~$4.9 million.

~~On July 29, 2019,~~At April 30, 2020, the ~~Company sold 608,310 shares of Equus common stock for approximately $1.0 million, resulting in a realized loss of approximately $219,000.~~
~~At July 31, 2019, the Company’s~~Company's investment in Equus consisted of ~~3,836,334~~3,228,024 shares of common stock with a cost of approximately ~~$8.8~~$7.5 million and a market value of approximately ~~$5.9~~$3.6 million.

Foliofn, Inc.

Foliofn, Vienna, Virginia, a Legacy Investment, is a financial services technology company that offers investment solutions to financial services firms and investors.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Foliofn consisted of 5,802,259 shares of Series C preferred stock with a cost of $15.0 million and a fair value of approximately ~~$5.0~~$6.4 million.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee increased the fair value of the preferred stock by ~~$790,000.~~$5.0 million.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in Foliofn consisted of 5,802,259 shares of Series C preferred stock with a cost of $15.0 million and a fair value of approximately ~~$5.8~~$11.4 million.

Chris Ferguson, a representative of the Company, serves as a director of Foliofn.

Global Prairie PBC, Inc.
Global Prairie, Kansas City, Missouri, is a marketing firm focusing on quality of life sectors (healthcare, environmental, agriculture).
At October 31, 2019, the Company's investment in Global Prairie consisted of a second lien loan with an outstanding amount of approximately $3.0 million, a cost basis of approximately $2.9 million and a fair value of approximately $3.0 million. The second lien loan had an interest rate of 14% and a maturity date of April 16, 2025.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by $83,000.

At April 30, 2020, the Company's investment in Global Prairie consisted of a second lien loan with an outstanding amount of approximately $3.1 million and a cost basis and fair value of approximately $3.0 million.
GTM Intermediate Holdings, Inc.

GTM, Anderson, South Carolina, is a leading supplier of proprietary medical solutions for emergency trauma care.

On December 7, 2018, pursuant to the Order, each of the Company and the Private Fund co-invested in second lien notes and common stock issued by GTM Intermediate Holdings, Inc. The Company and the Private Fund invested approximately $1.5 million and approximately $6.2 million, respectively, in such notes, with a cash interest rate of 11% plus 1% PIK and a maturity date of June 7, 2024, and $346,000 and approximately $1.4 million, respectively, in shares of common stock, which are held through a holding company. In accordance with the conditions of the Order, the Board, including a majority of the Independent Directors, approved, in advance, the Company’s investment in the loan and common stock.
On June 7, 2019, the Company invested approximately $3.9 million in GTM increasing the second lien loan by $3.5 million and investing approximately $420,000 for additional common shares. The maturity date on the loan was extended to December 7, 2024.
At ~~July~~October 31, 2019, the ~~Company’s~~Company's investment in GTM consisted of a second lien loan with an outstanding amount of approximately $5.1 million, a cost basis of approximately $5.0 million and a fair value of approximately $5.1 million and 2 shares of common stock with a cost basis and fair value of $766,000. The second lien loan had an interest rate of 12% and a maturity date of December 7, 2024.
During the six month period ended April 30, 2020, the Valuation Committee increased the fair value of the common stock by $586,000 and decreased the fair value of the loan by approximately $199,000.
At April 30, 2020, the Company's investment in GTM consisted of a second lien loan with an outstanding amount of approximately $5.1 million, a cost basis of approximately $5.0 million and a fair value of approximately $4.9 million and 2 shares of common stock with a cost basis of approximately $766,000 and a fair value of approximately $1.4 million.

Highpoint Global, LLC

Highpoint, Indianapolis, Indiana, is a government services firm focused on improving interactions between citizens and government organizations, particularly the Center for Medicare and Medicaid Services.

At October 31, ~~2018, the Company’s investment in Highpoint consisted of a second lien loan with an outstanding amount of approximately $5.1 million, a cost basis of approximately $5.0 million and a fair value~~
~~of approximately $5.1 million. The loan had an interest rate of 14% and a maturity date of September 30, 2022.~~
~~During the nine month period ended July 31,~~ 2019, the ~~Valuation Committee decreased the fair value of the loan by approximately $51,000.~~
~~At July 31, 2019, the Company’s~~Company's investment in Highpoint consisted of a second lien loan with an outstanding amount of approximately $5.2 million, a cost basis of approximately $5.1 million and a fair value of approximately $5.2 million. The loan had an interest rate of 14% and a maturity date of September 30, 2022.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by $254,000.
At April 30, 2020, the Company's investment in Highpoint consisted of a second lien loan with an outstanding amount of approximately $5.3 million, a cost basis of approximately $5.2 million and a fair value of approximately $5.0 million.

HTI Technologies and Industries, Inc.

HTI, LaVergne, Tennessee, is a manufacturer of electric motor components and designer of small motor systems.

At October 31, 2018, the Company’s investment in HTI consisted of a second lien loan with an outstanding amount and cost basis of approximately $10.1 million and a fair value of approximately $9.9 million. The loan has an interest rate of 14% and a maturity date of June 21, 2019.
~~On July 15,~~ 2019, the ~~Company loaned an additional $1.0 million to HTI increasing its second lien loan to approximately $11.3 million as of July 31, 2019.~~
~~During the nine month period ended July 31, 2019, the interest rate on the second lien loan was increased to 15.75% and the maturity date was extended to September 15, 2024.~~
~~During the nine month period ended July 31, 2019, the Valuation Committee increased the fair value of the loan by $192,000.~~
~~At July 31, 2019, the Company’s~~Company's investment in HTI consisted of a second lien loan with an outstanding amount, cost basis and fair value of approximately ~~$11.3~~$11.4 million. The loan had an interest rate of 15.75% and a maturity date of September 15, 2024.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by $1.2 million.
At April 30, 2020, the Company's investment in HTI consisted of a second lien loan with an outstanding amount and cost basis of approximately $11.6 million and a fair value of approximately $10.5 million.

Initials, Inc.

Initials, Clarkesville, Georgia, is a direct selling organization specializing in customized bags, organizational products and fashion accessories.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Initials consisted of a senior subordinated loan with an outstanding amount and cost basis of approximately $5.6 million and a fair value of approximately ~~$2.7~~$1.3 million. The loan ~~has~~had an interest rate of 15% and ~~matures on~~a maturity date of June 23, 2020.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the fair value of the loan by approximately ~~$688,000.~~$622,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in Initials consisted of a senior subordinated loan with an outstanding amount and cost basis of approximately $5.6 million and a fair value of approximately ~~$2.0 million.~~$650,000. The Company reserved in full against all of the accrued interest starting June 23, 2018.

International Precision Components Corporation

IPCC, Lake Forest, Illinois, is a leading plastic injection molder.

~~On May 10, 2019, the Company invested approximately $8.0 million in IPCC in the form of a second lien loan with a cash interest rate of 12.0%, 3.5% variable PIK rate and a maturity date of~~At October ~~3, 2024.~~
~~At July~~ 31, 2019, the ~~Company’s~~Company's investment in IPCC consisted of a second lien loan with an outstanding amount of approximately $8.0 million, a cost basis of approximately ~~$7.8~~$7.9 million and a fair value of approximately $8.0 million. The loan had an interest rate of 15.5% and a maturity date of October 3, 2024.
During the six month period ended April 30, 2020, the interest rate on the second lien loan was reduced to 14%.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by approximately $160,000.
At April 30, 2020, the Company's investment in IPCC consisted of a second lien loan with an outstanding amount of approximately $8.0 million, a cost basis of approximately $7.9 million and a fair value of approximately $7.8 million.

Jedson Engineering, Inc.

Jedson, Cincinnati, Ohio, is a provider of engineering, procurement and construction management services.

~~During the nine month period ended July~~At October 31, 2019, the ~~Company invested $6.0 million in Jedson in the form of a first lien loan with a cash interest rate of 12.0%, 3.0% PIK rate and a maturity date of June 21, 2024.~~
~~At July 31, 2019, the Company’s~~Company's investment in Jedson consisted of a first lien loan with an outstanding amount of approximately $6.0 million, a cost basis of approximately $5.9 million and a fair value of approximately $6.0 million. The loan had an interest rate of 15% and a maturity date of June 21, 2024.
On December 13, 2019 and February 3, 2020, the Company loaned approximately $1.6 million and $1.7 million, respectively, to Jedson, increasing the first lien loan to approximately $9.4 million.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by approximately $2.5 million.
At April 30, 2020, the Company's investment in Jedson consisted of a first lien loan with an outstanding amount of approximately $9.4 million, a cost basis of approximately $9.2 million and a fair value of approximately $6.9 million. The Company reserved in full against all of the accrued PIK interest starting April 1, 2020.
JSC Tekers Holdings

JSC Tekers, Latvia, is a company focused on real estate management.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in JSC Tekers consisted of 9,159,085 shares of preferred stock with a cost basis of $11.8 million and a fair value of ~~$4.1~~$4.9 million and 3,201 shares of common stock with a cost basis of $4,500 and a fair value of $0.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee ~~increased~~decreased the fair value of the preferred stock by ~~$94,000.~~$383,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in JSC Tekers consisted of 9,159,085 shares of preferred stock with a cost basis of $11.8 million and a fair value of ~~$4.2~~$4.5 million and 3,201 shares of common stock with a cost basis of $4,500 and a fair value of $0.

Legal Solutions Holdings, Inc.

Legal Solutions, Covina, CA, is a provider of record retrieval services to the California workers’ compensation applicant attorney market.

At October 31, 2018, the Company’s investment in Legal Solutions consisted of a senior subordinated loan with an outstanding balance and cost basis of approximately $11.8 million and a fair value of approximately $11.9 million. The senior subordinated loan had an interest rate of 16% and a maturity date of March 18, 2020.
~~During the nine month period ended July 31,~~ 2019, the ~~Valuation Committee decreased the fair value of the loan by approximately $118,000.~~
~~At July 31, 2019, the Company’s~~Company's investment in Legal Solutions consisted of a senior subordinated loan with an outstanding balance, cost basis and a fair value of approximately ~~$12.1~~$12.2 million. The senior subordinated loan had an interest rate of 15% and a maturity date of March 18, 2020.
During the six month period ended April 30, 2020, Legal Solutions made $2.4 million in principal payments on its loan and the maturity date was extended to March 31, 2022.

During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by $386,000.
At April 30, 2020, the Company's investment in Legal Solutions consisted of a senior subordinated loan with an outstanding balance and cost basis of approximately $9.9 million and a fair value of approximately $9.5 million.

Morey’s Seafood International LLC

Morey’s, Motley, Minnesota, is a manufacturer, marketer and distributor of fish and seafood products.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Morey’s consisted of a second lien loan that had an outstanding balance, cost basis and a fair value of $16.5 million. The loan had an interest rate of 13% and a maturity date of August 12, 2022.

On ~~April 26, 2019,~~ January 31, 2020, Morey’s ~~made a principal payment of approximately $591,000 on~~repaid its second lien ~~loan.~~
~~At July 31, 2019, the~~ loan ~~had an outstanding balance, cost basis and a fair value of $16.4~~in full, including all accrued interest totaling approximately $16.8 million.

At April 30, 2020, the Company no longer held an investment in Morey’s.
MVC Automotive Group GmbH

MVC Automotive, an Austrian-based holding company, owns and operates ten Ford, Jaguar, Land Rover, Mazda, and Volvo dealerships located in Austria and the Czech Republic.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in MVC Automotive consisted of an equity interest with a cost of approximately ~~$51.2~~$52.2 million and a fair value of approximately ~~$18.9~~$20.6 million and a bridge loan with an outstanding amount, cost basis and fair value of approximately $7.1 million. The mortgage guarantee for MVC Automotive was equivalent to approximately ~~$6.2~~$4.0 million at October 31, ~~2018.~~2019. This guarantee was taken into account in the valuation of MVC Automotive. The bridge loan had an interest rate of 6% and a maturity date of ~~June 30, 2019.~~December 31, 2020.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the maturity date onof the bridge loan was extended to ~~June 30, 2020.~~December 31, 2021.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee ~~increased~~decreased the fair value of the equity interest by approximately ~~$374,000.~~$6.4 million.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in MVC Automotive consisted of an equity interest with a cost of approximately ~~$51.2~~$52.2 million and a fair value of approximately ~~$19.3~~$14.2 million and a bridge loan with an outstanding amount, cost basis and fair value of approximately $7.1 million. The mortgage guarantee for MVC Automotive was equivalent to approximately ~~$3.5 million~~$303,000 at ~~July 31, 2019.~~April 30, 2020. This guarantee was taken into account in the valuation of MVC Automotive.
Michael Tokarz, Chairman of the Company, Scott Foote and Puneet Sanan, representatives of the Company, serve as directors of MVC Automotive.

~~MVC Environmental, Inc.~~
MVC Environmental, a New York-based holding company, owns and operates intellectual property and environmental service facilities for oil and gas waste recycling in the Eagle Ford Shale region of Texas.
At October 31, 2018, the Company’s investment in MVC Environmental consisted of common stock with a cost basis of approximately $3.1 million and a fair value of approximately $0, a senior secured loan with an outstanding balance and cost basis of $6.9 million and a fair value of approximately $875,000 and a letter of credit with a fair value of approximately -$2.4 million or a liability of $2.4 million. The loan bears annual interest at a rate of 9% and matures on December 22, 2020.
~~On November 27, 2018, the Company funded approximately $3.0 million related to the MVC Environmental letter of credit, which was called by the beneficiary.~~
~~During the nine month period ended July 31, 2019, the Valuation Committee decreased the fair value of the loan by approximately $875,000 and the common stock by approximately $3.0 million.~~
At July 31, 2019, the Company’s investment in MVC Environmental consisted of common stock with a cost basis of approximately $6.1 million and a fair value of approximately $0 and a senior secured loan with an outstanding balance and cost basis of $6.9 million and a fair value of $0. The Company reserved in full against all of the accrued interest starting July 1, 2017. David Williams, representative of the Company, serves as a director of MVC Environmental.
MVC Private Equity Fund, L.P.

MVC Private Equity Fund, L.P., Purchase, New York, is a private equity fund focused on control equity investments in the lower middle market. MVC GP II, an indirect wholly-owned subsidiary of the Company, serves as the GP to the PE Fund and is exempt from the requirement to register with the Securities and Exchange Commission as an investment adviser under Section 203 of the Investment Advisers Act of 1940. MVC GP II is wholly-owned by MVCFS, a subsidiary of the Company. The ~~Company’s~~Company's Board of Directors authorized the establishment of, and investment in, the PE Fund for a variety of reasons, including the ~~Company’s~~Company's ability to participate in Non-Diversified Investments made by the PE Fund. As previously disclosed, the Company is limited in its ability to make Non-Diversified Investments. For services provided to the PE Fund, the GP and MVC Partners are together entitled to receive 25% of all management fees and other fees paid by the PE Fund and its portfolio companies and up to 30% of the carried interest generated by the PE Fund. Further, at the direction of the Board of Directors, the GP retained TTG Advisers to serve as the portfolio manager of the PE Fund. In exchange for providing those services, and pursuant to the Board of ~~Directors’~~Directors' authorization and direction, TTG Advisers is entitled to the remaining 75% of the management and other fees generated by the PE Fund and its portfolio companies and any carried interest generated by the PE Fund. A significant portion of the portfolio fees that are paid by the PE Fund’s portfolio companies to the GP and TTG Advisers is subject to recoupment by the PE Fund in the form of an offset to future management fees paid by the PE Fund. Given this separate arrangement with the GP and the PE Fund, under the terms of the ~~Company’s~~Company's Advisory Agreement with TTG Advisers, TTG Advisers is not entitled to receive from the Company a management fee or an incentive fee on assets of the Company that are invested in the PE Fund. The PE ~~Fund’s~~Fund's term will end on October 29, 2016; unless the GP, in its sole discretion, extends the term of the PE Fund for two additional periods of one year each.

On October 29, 2010, through MVC Partners and MVCFS, the Company committed to invest approximately $20.1 million in the PE Fund. Of the $20.1 million total commitment, MVCFS, through its wholly-owned subsidiary MVC GP II, has committed $500,000 to the PE Fund as its general partner. See MVC Partners for more information on the other portion of the Company’s commitment to the PE Fund. The PE Fund has closed on approximately $104 million of capital commitments.

During the fiscal year ended October 31, 2012 and thereafter, MVC Partners was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in the PE Fund is a substantial portion of MVC Partners’ operations.
At October 31, ~~2018,~~2019, the limited partnership interest in the PE Fund had a cost of approximately ~~$11.5~~$9.0 million and a fair value of approximately ~~$20.0~~$12.3 million. The ~~Company’s~~Company's general partnership interest in the PE Fund had a cost basis of approximately ~~$292,000~~$230,000 and a fair value of approximately ~~$501,000.~~$313,000.

On ~~December 27, 2018,~~November 8, 2019, the Company received proceeds of approximately ~~$7.5~~$2.7 million from the PE Fund related to the sale of ~~Plymouth Rock Energy, LLC,~~Focus Pointe, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the ~~Plymouth Rock Energy, LLC~~Focus Pointe investment totaled approximately ~~$2.5~~$1.9 million, resulting in a realized gain of approximately ~~$5.0 million.~~$773,000. The Company also received a carried interest payment from the PE Fund of approximately ~~$173,000~~$48,000 related to the sale, which was recorded as additional realized gains.

On ~~December 27, 2018,~~November 8, 2019, the Company received ~~a dividend~~proceeds of approximately ~~$543,000~~$291,000 from the PE Fund related to tax refunds received by the PE Fund related to Plymouth Rock Energy, LLC. The additional proceeds were recorded as realized gains. The Company also received a carried interest payment from the PE Fund of approximately $11,000 related to these proceeds, which was recorded as additional realized gains.
On February, 21, 2020, the Company received proceeds of approximately $878,000 from the PE Fundrelated to the release of escrow funds related to former PE Fund portfolio companies AccuMed Corp., Focus Pointe ~~Global.~~Global and Plymouth Rock Energy, LLC. The Company also received an approximately $32,000 carried interest payment.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the fair value of the general partnership interest and limited partnership interest in the PE Fund by a total of approximately ~~$705,000.~~$800,000.

At ~~July 31, 2019,~~April 30, 2020, the limited partnership interest in the PE Fund had a cost of approximately ~~$9.0~~$7.2 million and a fair value of approximately ~~$11.7~~$8.5 million. The ~~Company’s~~Company's general partnership interest in the PE Fund had a cost basis of approximately ~~$230,000~~$183,000 and a fair value of approximately ~~$298,000.~~$218,000. As of ~~July 31, 2019,~~April 30, 2020, the PE Fund had investments in Gibdock Limited ~~Focus Pointe Holdings, Inc.~~ and Advanced Oilfield Services, LLC.

Powers Equipment Acquisition Company, LLC

Powers, Warminster, Pennsylvania, is a family owned manufacturer of commercial refrigeration equipment.

~~On May 1, 2019, the Company invested $6.5 million in Powers in the form of a first lien loan with a variable interest rate of 13.5% and a maturity date of April 30, 2024.~~
At ~~July~~October 31, 2019, the ~~Company’s~~Company's investment in Powers consisted of a first lien loan with an outstanding amount of approximately $6.5 million, a cost basis of approximately $6.4 million and a fair value of approximately $6.5 million. The loan had an interest rate of 13.5% and a maturity date of April 30, 2024.

During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the loan by $1.5 million.
At April 30, 2020, the Company's investment in Powers consisted of a first lien loan with an outstanding amount of approximately $6.5 million, a cost basis of approximately $6.4 million and a fair value of approximately $5.0 million. The Company reserved in full against all of the accrued PIK interest starting April 1, 2020.

RuMe, Inc.

RuMe, Denver, Colorado, produces functional and affordable products for the environmentally and socially-conscious consumer reducing dependence on single-use products.

At October 31, ~~2018,~~2019, the Company’s investment in RuMe consisted of 5,297,548 shares of common stock with a cost basis of approximately $924,000 and a fair value of $0, 4,999,076 shares of series B-1 preferred stock with a cost basis of approximately $1.0 million and a fair value of ~~approximately $1.7 million,~~$0, 23,896,634 shares of series C preferred stock with a cost basis of approximately $3.4 million and a fair value of approximately ~~$3.4~~$1.5 million, a revolver with an outstanding balance, cost basis and fair value of approximately ~~$1.5~~$2.1 million, another revolver with an outstanding balance of approximately $404,000 and a cost basis and fair value of approximately $233,000 and a subordinated note with an outstanding balance, cost basis and a fair value of approximately ~~$3.3~~$3.6 million. The warrants have a cost basis of approximately ~~$336,000~~$595,000 and a fair value of ~~$0, the guarantee was fair valued at approximately -$107,000 or a liability of approximately $107,000~~$1.4 million and the letter of credit was fair valued at approximately -$~~273,000~~566,000 or a liability of approximately ~~$273,000.~~$566,000. The subordinated note and the $2.1 million revolver had an interest rate of 10% PIK and maturity dates of March 31, 2020 and March 31, 2021, respectively. The $404,000 revolver had an interest rate of 10% PIK and a maturity date of ~~March 31,~~February 28, 2020.

On ~~April 25,~~November 14, 2019, the ~~$1.0 million guarantee and the $2.0 million letter~~Company loaned $50,000 to RuMe on its line of credit, ~~were refinanced~~increasing the balance to approximately $2.1 million.
Specifically,on November 14, 2019 and ~~replaced with a new $3.0 million letter of credit. The letter~~February 28, 2020, the Companyloaned $50,000 and $300,000, respectively, to RuMe on its lines of credit, ~~had a fair value of~~increasing the balances to approximately ~~-$643,000 or a liability of $643,000 as of April 30, 2019. The $3.0~~$2.2 million ~~letter of credit is collateralized with Credit Facility IV.~~and approximately $727,000, respectively.

During the ~~nine~~six month period ended ~~July~~April 30, 2020, the maturity dates of the subordinated note and the $727,000 revolver were extended to March 31, ~~2019, the Company loaned $750,000 to RuMe.~~
~~On April 26, 2019, RuMe made a principal payment on the revolver of $500,000.~~2021.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the ~~fair values of the~~ series ~~B-1~~C preferred stock by approximately ~~$1.7~~$1.5 million, ~~and~~the warrants by a total of approximately $1.4 million, the letters of credit by approximately ~~$533,000 and increased~~$132,000, the ~~guarantee~~subordinated loan by approximately ~~$23,000.~~$979,000 and the revolvers by a total of approximately $764,000.

At ~~July 31, 2019,~~April 30, 2020, the Company’s investment in RuMe consisted of 5,297,548 shares of common stock with a cost basis of approximately $924,000 and a fair value of $0, 4,999,076 shares of series B-1 preferred stock
with a cost basis of approximately $1.0 million and a fair value of ~~approximately $41,000,~~$0, 23,896,634 shares of series C preferred stock with a cost basis of approximately $3.4 million and a fair value of approximately ~~$3.4 million,~~$0, a revolver with an outstanding balance and cost basis of approximately $2.2 million and a fair value of approximately ~~$1.8~~$1.7 million, another revolver with an outstanding balance and cost basis of approximately $727,000 and a fair value of approximately $539,000 and a subordinated note with an outstanding balance and cost basis of approximately $3.8 million and a fair value of approximately ~~$3.5~~$2.8 million. The warrants have a cost basis of approximately ~~$336,000~~$595,000 and a fair value of $0 and the letter of ~~credits~~credit was fair valued at approximately -$~~592,000~~697,000 or a liability of approximately ~~$592,000.~~$697,000. The Company reserved in full against all of the accrued PIK interest starting April 1, 2020.

Shivani Khurana and Christopher Ferguson, representatives of the Company, serve as directors of RuMe.

Security Holdings, B.V.

Security Holdings is an Amsterdam-based holding company that owns FIMA, a Lithuanian security and engineering solutions company.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Security Holdings consisted of common equity interest with a cost basis of approximately $51.2 million and a fair value of approximately $31.3 million, a bridge loan with an outstanding balance, cost basis and fair value of approximately $4.7 million, a senior subordinated loan with an outstanding balance, cost basis and fair value of approximately $5.0 million and a letter of credit with a fair value of approximately -$87,000 or a liability of $87,000. The bridge loan had an interest rate of 5% and a maturity date of December 31, 2019 and the senior subordinated loan had an interest rate of 12.45% and a maturity date of May 31, 2020.
~~During the nine month period ended July 31, 2019, the interest rate on the senior subordinated loan was decreased to 4.5%.~~
During the nine month period ended July 31, 2019, the Valuation Committee increased the fair value of the common equity interest by $2.6 million and decreased the fair value of the letter of credit by approximately $170,000.
~~At July 31, 2019, the Company’s investment in Security Holdings consisted of common equity interest with a cost basis of approximately $51.2 million and a fair value of approximately $33.9~~$33.6 million, a bridge loan with an outstanding balance, cost basis and fair value of approximately $4.9 million, a senior subordinated loan with an outstanding balance, cost basis and fair value of approximately ~~$5.4~~$6.0 million and a letter of credit with a fair value of approximately -$~~257,000~~161,000 or a liability of ~~$257,000.~~$161,000. The bridge loan had an interest rate of 5% and a maturity date of December 31, 2019 and the senior subordinated loan had an interest rate of 3.1% and a maturity date of May 31, 2020.
During the six month period ended April 30, 2020, the Company loaned approximately $2.5 million, to Security Holdings, increasing its senior subordinated loan outstanding amount to approximately $8.6 million.
During the six month period ended April 30, 2020, the senior subordinated loan’s maturity date was extended to May 31, 2022.
During the six month period ended April 30, 2020, the letter of credit was reduced to 3.8 million Euro.

During the six month period ended April 30, 2020, the Valuation Committee decreased the fair value of the common equity interest by $15.7 million and the letter of credit by approximately $24,000.
At April 30, 2020, the Company's investment in Security Holdings consisted of common equity interest with a cost basis of approximately $51.2 million and a fair value of approximately $17.9 million, a bridge loan with an outstanding balance, cost basis and fair value of approximately $5.2 million, a senior subordinated loan with an outstanding balance, cost basis and fair value of approximately $8.6 million and a letter of credit with a fair value of approximately -$185,000 or a liability of $185,000.

Puneet Sanan, a representative of the Company, serves as a director of Security Holdings.

SMA Holdings, Inc.

SMA, Irvine, California, is a strategic consulting firm, which has been serving the federal contracting and commercial markets for over 35 years.

~~During the nine month period ended July~~At October 31, 2019, the Company invested $7.0 million in SMA in the form of a first lien loan with a cash interest rate of 11.0% and a maturity date of June 26, 2024. The Company also received warrants as part of this investment
~~At July 31, 2019, the Company’s~~Company's investment in SMA consisted of a first lien loan with an outstanding amount of approximately $7.0 million, a cost basis of approximately $6.4 million and a fair value of approximately $6.5 million and warrants with a cost basis and fair value of approximately $505,000.
~~Tin Roof Software, LLC~~
~~Tin Roof, Atlanta, Georgia, provides enterprise software development solutions and services to a variety of Fortune 500 clients.~~
~~At October 31, 2018, the Company’s investment in Tin Roof consisted of a second lien loan with an outstanding balance, a cost basis and a fair value of approximately $3.7 million.~~ The ~~second~~first lien loan had an interest rate of ~~14.5%~~11.0% and a maturity date of ~~April 1,~~June 26, 2024.

During the ~~nine~~six month period ended ~~July 31, 2019,~~ ~~Tin Roof made principal payments totaling approximately $99,000 on its second lien loan.~~April 30, 2020, the Valuation Committee decreased the fair value of the loan by $28,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in ~~Tin Roof~~SMA consisted of a ~~second~~first lien loan with an outstanding ~~balance~~amount of approximately ~~$3.8~~$7.0 million, a cost basis of approximately ~~$3.7~~$6.5 million and a fair value of approximately ~~$3.8 million.~~$6.6 million and warrants with a cost basis and fair value of approximately $505,000.
Trientis GmbH (formerly SGDA Europe B.V.)

Trientis is an Austrian-based holding company that pursues environmental and remediation opportunities in Romania.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Trientis consisted of a first lien loan with an outstanding balance and cost basis of approximately $1.2 million and a fair value of approximately ~~$385,000~~$177,000 and a warrant with a cost basis of approximately $68,000 and a fair value of $0. The first lien note has an interest rate of 5%, with a PIK toggle at Trientis’s option, and a maturity date of October 26, 2024.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee ~~decreased~~increased the fair value of the loan by approximately ~~$121,000.~~$18,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in Trientis consisted of a first lien loan with an outstanding balance and cost basis of approximately $1.2 million and a fair value of approximately ~~$263,000~~$195,000 and a warrant with a cost basis of approximately $68,000 and a fair value of $0. The Company reserved in full against all of the accrued interest starting September 1, 2018.

Tuf-Tug Inc.

Tuf-Tug, Moraine, Ohio, is a designer and manufacturer of fall protection and rigging gear.

At October 31, 2018, the Company’s investment in Tuf-Tug consisted of a second lien loan with an outstanding balance of approximately $4.9 million, a cost basis of approximately $4.8 million and a fair value of approximately $4.9 million and 24.6 shares of common stock with a cost basis and fair value of approximately $750,000. The second lien loan had an interest rate of 13% and a maturity date of February 24, 2024.
~~At July 31,~~ 2019, the ~~Company’s~~Company's investment in Tuf-Tug consisted of a second lien loan with an outstanding balance of approximately $5.0 million, a cost basis of approximately $4.9 million and a fair value of approximately $5.0 million and 24.6 shares of common stock with a cost basis of $750,000 and a fair value of approximately $778,000. The second lien loan had an interest rate of 13% and a maturity date of February 24, 2024.
During the six month period ended April 30, 2020, the Valuation Committee decreased the fair values of the loan by approximately $50,000 and the common stock by approximately $173,000.
At April 30, 2020, the Company's investment in Tuf-Tug consisted of a second lien loan with an outstanding balance, cost basis and fair value of ~~$750,000.~~approximately $5.0 million and 24.6 shares of common stock with a cost basis of $750,000 and a fair value of approximately $605,000.

Turf Products, LLC

Turf, Enfield, Connecticut, is a wholesale distributor of golf course and commercial turf maintenance equipment, golf course irrigation systems and consumer outdoor power equipment.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in Turf consisted of a senior subordinated loan and a third lien loan. The loans had an interest rate of 10% and a maturity date of August 7, 2020. The senior subordinated loan had an outstanding balance and cost basis of approximately $7.7 million and a fair value of approximately ~~$7.3~~$7.6 million and the third lien loan had an outstanding balance and cost basis of approximately ~~$1.2~~$1.1 million and a fair value of approximately ~~$1.1~~$1.0 million.

On ~~July 1, 2019,~~April 6, 2020, theTurf senior subordinated loan and third lien loan were combined into a non-amortizing senior subordinated loan in the amount of $8,697,056 with a 10% cash interest rate and a maturity of October 7, 2023.
During the six month period ended April 30, 2020, Turf made a principal payment of $70,000 on its third lien loan.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee ~~increased~~decreased the fair value of the ~~senior subordinated~~ loans by a total of approximately ~~$233,000.~~$1.0 million.

At ~~July 31, 2019,~~April 30, 2020, the senior subordinated loan had an outstanding balance and cost basis of approximately ~~$7.7~~$8.7 million and a fair value of approximately $7.5 ~~million and the third lien loan had an outstanding balance, cost basis and fair value of approximately $1.1~~ million.

United States Technologies, Inc.

U.S. Technologies, Fairlawn, New Jersey, offers diagnostic testing, redesign, manufacturing, reverse engineering and repair services for malfunctioning electronic components of machinery and equipment.

At October 31, ~~2018,~~2019, the Company’s investment in U.S. Technologies consisted of a senior term loan with an outstanding amount, cost basis and fair value of approximately $5.5 million. The loan had an interest rate of 10.5% and matures on July 17, 2020.

OnMarch 6, 2020, U.S. Tech made an approximately $367,000 principal payment on its loan.
During the six month period ended April 30, 2020, the maturity date of senior term loan was extended to July 17, 2021.
At ~~July 31, 2019,~~April 30, 2020, the senior term loan had an outstanding amount, cost basis and fair value of approximately ~~$5.5~~$5.1 million.
U.S. Gas & Electric, Inc.

U.S. Gas, North Miami Beach, Florida, a wholly-owned indirect subsidiary of Crius, is a licensed Energy Service Company ~~(“ESCO”)~~ that markets and distributes natural gas to small commercial and residential retail customers in the state of New York.

On October 18, 2019, Vistra Energy notified the Company that it was asserting an offset of Company’s loan assets of approximately $1.6 million relating to an indemnification claim obligation attributable to U.S. Gas. The Company reserved in full against all of the accrued interest related to the $1.6 million.
At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in U.S. Gas, an indirect subsidiary of Crius, consisted of a second lien loan with an outstanding balance and cost basis of approximately $37.5 million and a fair value of approximately ~~$39.5~~$37.0 million. The loan has an interest rate of 9.5% and matures on July 5, 2025.

On November 1, 2019, U.S. Gas made a principal payment of approximately $32.8 million on its second lien loan.
During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the fair value of the loan by ~~$1.6 million.~~approximately $1.0 million related to the indemnification claim.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in U.S. Gas, an indirect subsidiary of ~~Crius,~~Vistra, consisted of a second lien loan with an outstanding balance and cost basis of approximately ~~$37.5~~$4.8 million and a fair value of approximately ~~$37.8~~$3.2 million. The Company reserved in full against all of the accrued interest related to the $1.6 million portion of the second lien loan due to the indemnification claim.

U.S. Spray Drying Holding Company

SCSD, Huguenot, New York, provides custom spray drying products to the food, pharmaceutical, nutraceutical, flavor and fragrance industries.

At October 31, ~~2018,~~2019, the ~~Company’s~~Company's investment in SCSD consisted of 784 shares of class B common stock with a cost basis of approximately $5.5 million and a fair value of approximately ~~$5.4~~$1.8 million. The secured loan and the senior secured loan each had an outstanding balance, cost basis and fair value of $1.5 million. The secured loan and the senior secured loan each had an interest rate of 12% and a maturity date of April 30, 2021.

During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the Valuation Committee decreased the fair value of the common stock by ~~$3.1 million.~~$830,000.

At ~~July 31, 2019,~~April 30, 2020, the ~~Company’s~~Company's investment in SCSD consisted of 784 shares of class B common stock with a cost basis of approximately $5.5 million and a fair value of approximately ~~$2.3 million,~~$970,000, a secured loan and senior secured loan each with an outstanding balance, cost basis and fair value of $1.5 million, totaling $3.0 million.

Puneet Sanan and Shivani Khurana, representatives of the Company, serve as directors of SCSD.

Liquidity and Capital Resources

Our liquidity and capital resources are derived from our public offering of securities, our credit facility and cash flows from operations, including investment sales and repayments and income earned. Our primary use of funds includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, proceeds generated from our portfolio investments and/or proceeds from public and private offerings of securities to finance pursuit of our investment objective.

At ~~July 31, 2019,~~April 30, 2020, the Company had investments in portfolio companies totaling ~~$339.4~~$226.3 million. Also, on that date, the Company had approximately ~~$20.2~~$48.9 million in cash equivalents and restricted cash equivalents and approximately $1.7 million in cash and restricted cash. The Company considers all money market and other cash investments purchased with an original maturity of less than three months to be cash equivalents. U.S. government securities and cash equivalents are highly liquid. Pending investments in portfolio companies pursuant to our principal investment strategy, the Company may make other short-term or temporary investments, including in exchange-traded funds and private investment funds offering periodic liquidity.

During the ~~nine~~six month period ended July 31, 2019, the Company made five new investments, committing capital that totaled approximately $29.4 million. Pursuant to an exemptive order received by the Company from the SEC (the “Order”), that allows the Company to co-invest, subject to certain conditions, with certain affiliated private funds as described in the Order, each of the Company and the Private Fund co-invested in GTM ($1.9 million investment for the Company). The Company also invested in Powers ($6.5 million), IPCC ($8.0 million), Jedson ($6.0 million) and SMA ($7.0 million).
~~During the nine month period ended July 31, 2019,~~April 30, 2020, the Company made follow-on investments in ~~four~~five portfolio ~~company~~companies that totaled approximately ~~$9.1~~$11.5 million. Specifically,on November 14, 2019 and February 28, 2020, the Companyloaned $50,000 and $300,000, respectively, to RuMe Inc. (“RuMe”) on its lines of credit, increasing the balances to approximately $2.2 million and approximately $727,000, respectively. On December ~~21, 2018,~~13, 2019 and February 3, 2020, the Company loaned ~~an additional $2.0~~approximately $1.6 million and $1.7 million, respectively, to Jedson, increasing the first lien loan to approximately $9.4 million. On January 10, 2020, the Company loaned approximately $3.8 million to ~~Custom Alloy in~~Apex, increasing the ~~form of a second~~first lien loan ~~with an interest rate of 11% and a~~
to approximately $18.8 million at that time. The maturity date of ~~December 23, 2019.~~the loan was extended to May 15, 2020. The Company also received a warrant as part of this investment. During the ~~nine~~six month period ended July 31, 2019, the Company loaned $750,000 to RuMe. On June 7, 2019, the Company invested approximately $3.9 million in GTM increasing the second lien loan by $3.5 million and investing approximately $420,000 for additional common shares. On July 1, 2019,April 30, 2020, Custom Alloy borrowed ~~$800,000~~approximately $1.7 million on its revolving credit facility, ~~with a 15% interest rate and a maturity date of December 7, 2024. On July 15, 2019,~~increasing the balance outstanding to approximately $3.7 million. During the six month period ended April 30, 2020, the Company loaned ~~an additional $1.0~~approximately $2.5 million, to ~~HTI~~Security Holdings B.V., increasing its ~~second lien~~senior subordinated loan outstanding amount to approximately ~~$11.3 million as of July 31, 2019.~~$8.6 million.

Current commitments include:

Commitments to Portfolio Companies:

At ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, the Company’s existing commitments to portfolio companies consisted of the following:

Portfolio Company

Amount Committed

Amount Funded as of July 31, 2019

Amount Committed Amount Funded as
of April 30, 2020
MVC Private Equity Fund LP

$
20.1 million

$
14.6 million

$20.1 million $14.6 million
RuMe

$
2.2 million

$
1.7 million

$2.2 million $2.2 million
RuMe $700,000 $727,000
Custom Alloy

$
3.0 million

$
800,000

$3.8 million $3.7 million
Total

$
25.3 million

$
17.1 million

$26.8 million $21.2 million

~~Portfolio Company~~
~~Amount Committed~~
~~Amount Funded as of October 31, 2018~~
~~MVC Private Equity Fund LP~~
$
~~20.1 million~~
$
~~14.6 million~~
~~RuMe~~
$
~~1.6 million~~
$
~~1.4 million~~
~~Total~~
$
~~21.7 million~~
$
~~16.0 million~~
Portfolio Company Amount Committed Amount Funded as
of October 31, 2019
MVC Private Equity Fund LP $20.1 million $14.6 million
RuMe $2.2 million $2.1 million
RuMe $400,000 $400,000
Custom Alloy $3.0 million $2.1 million
Total $25.7 million $19.2 million

Guarantees:

At ~~July 31, 2019~~April 30, 2020 and October 31, ~~2018,~~2019, the Company had the following commitments to guarantee various loans and mortgages:

Guarantee
Amount Committed
Amount Funded as
of ~~July 31, 2019~~
April 30, 2020
MVC Automotive
$
4.0 million
~~3.5 million~~
—
-
Total
$
4.0 million
~~3.5 million~~
—
-

Guarantee
Amount Committed
Amount Funded as
of October 31, ~~2018~~2019
MVC Automotive
$
4.0 million
~~6.2 million~~
—
-
~~RuMe~~
Total
$
4.0 million
~~1.0 million~~
—
-
~~Total~~
$
~~7.2 million~~
—

ASC 460,Guarantees, requires the Company to estimate the fair value of the guarantee obligation at its inception and requires the Company to assess whether a probable loss contingency exists in accordance with the requirements of ASC 450, Contingencies. At ~~July 31, 2019,~~April 30, 2020, the Valuation Committee estimated the combined fair values of the guarantee obligation noted above to be $0 or a liability of approximately $0.

These guarantees are further described below, together with the ~~Company’s~~Company's other commitments.

On January 16, 2008, the Company agreed to support a 4.0 million Euro mortgage for a Ford dealership owned and operated by MVC Automotive through making financing available to the dealership and agreeing under certain circumstances not to reduce its equity stake in MVC Automotive. Over time, Erste Bank, the bank extending the mortgage to MVC Automotive, increased the amount of the mortgage. The balance of the guarantee as of ~~July 31, 2019~~April 30, 2020 is approximately ~~3.2 million~~277,000 Euro (equivalent to approximately ~~$3.5 million)~~$303,000).

The Company agreed to cash collateralize a $300,000 third party letter of credit for RuMe, which is now collateralized with Credit Facility IV (defined below) and still a commitment of the Company as of April 30, ~~2019.~~2020. Previously, the Company guaranteed $1.0 million of RuMe’s indebtedness to Colorado Business Bank and also provided RuMe an additional $2.0 million letter of credit. On April 25, 2019, the $1.0 million
guarantee and the $2.0 million letter of credit were refinanced and replaced with a new $3.0 million letter of credit. The ~~letter~~two letters of credit had a fair value of approximately -$~~592,000~~697,000 or a liability of ~~$592,000~~$697,000 as of ~~July 31, 2019.~~April 30, 2020. The $3.0 million letter of credit is collateralized with Credit Facility IV (defined below).

On October 29, 2010, through MVC Partners and MVCFS, the Company committed to invest approximately $20.1 million in the PE Fund, for which an indirect wholly-owned subsidiary of the Company serves as GP. The PE Fund closed on approximately $104 million of capital commitments. During the fiscal year ended October 31, 2012 and thereafter, MVC Partners was consolidated with the operations of the Company as MVC Partners’ limited partnership interest in the PE Fund is a substantial portion of MVC Partners operations. The investment period related to the PE Fund has ended. Additional capital may be called for follow-on investments in existing portfolio companies of the PE Fund or to pay operating expenses of the PE Fund until the partnership is terminated. On December 27, 2018, the Company received proceeds of approximately $7.5 million from the PE Fund related to the sale of Plymouth Rock Energy, LLC, a portfolio company of the PE Fund. The Company’s pro-rata share of the PE Fund’s cost basis in the Plymouth Rock Energy, LLC investment totaled approximately $2.5 million, resulting in a realized gain of approximately $5.0 million. On October 25, 2019, the PE Fund sold Focus Pointe, a portfolio company of the PE Fund. The Company received proceeds of approximately $2.7 million related to the sale. The Company’s pro-rata share of the PE Fund’s cost basis in the Focus Pointe investment totaled approximately $1.9 million, resulting in a realized gain of approximately $800,000. As of ~~July 31, 2019,~~April 30, 2020, $14.6 million of the Company’s commitment was funded.

~~During the fiscal year ended~~As of October 31, ~~2016, the Company agreed to cash collateralize~~2019, RuMe had a ~~$500,000 working capital~~$2.2 million line of credit ~~for an entity partially owned by MVC Environmental~~ provided by Branch Banking and Trust Company (“BB&T”). During the fiscal year ended October 31, 2017, the cash collateral securing the MVC Environmental working capital line of credit was released and a new credit facility was entered into secured by a $1.0 million letter of credit. On February 16, 2018, the letter of credit was increased to $3.0 million. On November 27, 2018, the Company ~~funded approximately $3.0 million related to the letter of credit, which was called by the beneficiary.~~
On February 28, 2018, the Company committed $6.0 million to Custom Alloy in the form of a first lien loan with an interest rate of 10% and a maturity date of October 31, 2018. On November 9, 2018, Custom Alloy repaid its first lien loan in full, including all accrued interest. The loan is no longer a commitment of the Company as of July 31, 2019.
~~During the fiscal year ended October 31, 2018, the Company provided RuMe a $1.6 million line of credit~~ with a 10% interest rate and a maturity date of March 31, ~~2020.~~2021. The outstanding balance as of October 31, ~~2018~~2019 and April 30, 2020 was approximately ~~$1.5 million. During the nine month period ended July 31, 2019, the line of credit was increased to~~$2.1 million and $2.2 ~~million. The outstanding balance as of July 31, 2019 was approximately $1.8~~ million, respectively, including capitalized PIK interest.
~~During~~ Also, during the fiscal year ended October 31, ~~2018,~~2019, the Company provided ~~Custom Alloy~~RuMe a $2.0 million and a $1.4 million letter of credit as part of a restructuring. The $2.0 million letter of credit matured on November 27, 2018 and is no longer a commitment of the Company.   On October 31, 2018, the $1.4 million letter of credit was drawn, which resulted in the Company receiving a $1.4 million term note$400,000 revolver with a ~~15%~~10% interest rate and a maturity date of February 28, 2020. The outstanding balance of the revolver as of October 31, 2019 was approximately $404,000, including capitalized PIK interest. During the six month period ended April 30, 2020, the revolver was increased to $700,000 and the maturity date was extended to March 31, 2021. ~~On November 13, 2018, Custom Alloy repaid its $1.4 million second lien loan in full, including all accrued interest.~~ The ~~loan is no longer a commitment~~outstanding balance of the ~~Company~~revolver as of ~~July 31, 2019.~~April 30, 2020 was approximately $727,000, including capitalized PIK interest.

~~During the fiscal year ended~~As of October 31, ~~2018, the Company provided~~2019, Security Holdings had a ~~3.3~~4.8 million Euro letter of credit. During the ~~nine~~six month period ended ~~July 31, 2019,~~April 30, 2020, the letter of credit was ~~increased~~reduced to ~~5.3~~3.8 million Euro. The letter of credit had a fair value of approximately -$~~257,000~~185,000 or a liability of ~~$257,000~~$185,000 as of ~~July 31, 2019.~~April 30, 2020. The letter of credit is collateralized with Credit Facility IV (defined below).

~~On April 30,~~As of October 31, 2019, ~~the Company provided~~ Custom Alloy had a $3.0 million line of credit provided by the Company with a 15% interest rate and a maturity date of April 30, ~~2020. During the nine month period ended July 31, 2019, the Company funded $800,000, which is the~~2021. The balance outstanding as of ~~July~~October 31, ~~2019.~~2019 was approximately $2.1 million. During the six month period ended April 30, 2020, the Company increased the commitment to approximately $3.8 million and funded approximately $1.7 million, resulting in a balance outstanding as of April 30, 2020 of approximately $3.7 million. The maturity date was also extended to April 30, 2021.

As of ~~July 31, 2019,~~April 30, 2020, the total fair value associated with potential obligations related to guarantees and letters of credit was approximately -$~~849,000~~882,000 or a liability of ~~$849,000.~~$882,000.
Commitments of the Company

On July 31, 2013, the Company entered into a one-year, $50 million revolving credit facility (“Credit Facility II”) with BB&T. On January 31, 2014, Credit Facility II was increased to a $100 million revolving credit facility. On December 1, 2015, Credit Facility II was renewed and expired on May 31, 2016, at which time all outstanding amounts under it were due and repaid. On June 30, 2016, Credit Facility II was renewed and reduced to a $50 million revolving credit facility, which expired on February 28, 2017, as of which time all outstanding amounts under it were due and repaid. On February 28, 2017, Credit Facility II was renewed and increased to a $100 million revolving credit facility and expired on August 31, 2017. On August 31, 2017, Credit Facility II was renewed and decreased to a $25 million revolving credit facility, which was to expire on August 31, 2018. There was no change to the interest rate or unused fee on the revolving credit facility. The Company incurred closing costs associated with this transaction of $62,500. On August 10, 2018, Credit Facility II was renewed to August 30, ~~2019.~~2019 and on August 30, 2019, Credit Facility II was extended to August 31, 2020. The Company incurred closing costs associated with ~~this transaction~~each of these transactions of $50,000 with no change in terms other than the expiration date. At October 31, ~~2018~~2019 and ~~July 31, 2019,~~April 30, 2020, there was ~~$25.0 million and $0, respectively,~~no amount outstanding on Credit Facility II. Credit Facility II is used to provide the Company with better overall financial flexibility in managing its investment portfolio. Borrowings under Credit Facility II bear interest at LIBOR plus 125 basis points. In addition, the Company is also subject to a 25 basis point commitment fee for the average amount of Credit Facility II that is unused during each fiscal quarter. The Company paid closing fees, legal and other costs associated with these transactions. These costs are amortized over the life of the facility. Borrowings under Credit Facility II will be secured by cash, short-term and long-term U.S. Treasury securities and other governmental agency securities. ~~As of July 31, 2019, the Company was in compliance with all covenants related to Credit Facility II.~~Please see “Subsequent Events” section for more information.

On December 9, 2015, the Company entered into a three-year, $50 million revolving borrowing base credit facility (“Credit Facility III”) with Santander Bank N.A. as a lender and lead agent and Wintrust Bank as a lender and syndication agent. Credit Facility III was to expire on December 9, 2018. Credit Facility III can, under certain conditions, be increased up to $85 million. The new facility bears an interest rate of LIBOR plus 3.75% or the prime rate plus 1% (at the Company’s option), and includes a 1% closing fee of the commitment amount and a 0.75% unused fee. The compensating balance for the revolving credit facility is $5.0 million, which is reflected as restricted cash or cash equivalents on the Company’s Consolidated Balance Sheets. On February 26, 2018, in connection with the U.S. Gas Sale, Credit Facility III was amended, effective as of July 5, 2017, to exclude from pledged collateral the U.S. Gas second lien loan. On May 7, 2018, the terms of Credit Facility III were amended to, among other things: (i) increase the limit for unsecured indebtedness and certain unsecured guaranty obligations of portfolio companies of the Company to $10,000,000 and (ii) increase the limit on permitted investments of the Company with respect to certain debt, equity and follow-on investments to $28,500,000. All other material terms of Credit Facility III remained unchanged. As of October 31, 2018, there was no outstanding balance on Credit Facility III and the Company was in compliance with all covenants related to Credit Facility III. On December 7, 2018, Credit Facility III was renewed until March 9, 2019. On January 29, 2019, Credit Facility III was terminated.    As of July 31, 2019, Credit Facility III was no longer a commitment of the Company.

On November 15, 2017, the Company completed a public offering of $100,000,000 aggregate principal amount of its 6.25% senior notes due November 30, 2022 (“Senior Notes II”). In addition, on November 20, 2017, the underwriters exercised an over-allotment option to purchase an additional $15 million in aggregate principal amount of Senior Notes II (together with the offering on November 15, the “Offering”). The Senior Notes II have an interest rate of 6.25% per year payable quarterly on January 15, April 15, July 15, and October 15 of each year. After deducting underwriting fees and discounts and expenses, the Offering resulted in net proceeds to the Company of approximately $111.4 million. The Offering expenses incurred are amortized over the term of the Senior Notes II. Proceeds from the offering were used to repay the Senior Notes in full, including all accrued interest. On February 25, 2020, the Company notified U.S. Bank National Association, the trustee for the Senior Notes II, of the Company’s election to redeem $20.0 million aggregate principal amount of the Senior Notes II outstanding at a price equal to 100% of the principal amount of the Senior Notes II, plus accrued and unpaid interest on the Senior Notes II to, but excluding, the date of redemption. The Company funded the redemption with cash on hand. As of ~~July 31, 2019,~~April 30, 2020, the Senior Notes II had a total outstanding amount of ~~$115.0~~$95.0 million, net of deferred financing fees the balance was approximately ~~$112.5~~$93.4 million, with a market value of approximately ~~$119.1~~$81.9 million.
On January 29, 2019, the Company entered into a three year, $35 million revolving credit facility (“("Credit Facility ~~IV”~~IV") with People’s United Bank, National Association as lender and lead agent. Credit Facility IV can, under certain conditions, be increased up to $85 million. Credit Facility IV will expire on January 29, 2022, at which time all outstanding amounts under Credit Facility IV will be due and payable. Borrowings under the Credit Facility bear interest at a rate of LIBOR plus 2.85%, or the prime rate plus 0.5% at the Company’s discretion. In addition, the Company was subject to (i) a closing fee of 1% of the commitment amount paid at closing, (ii) a one-time structuring fee in the amount of $100,000 paid at closing, (iii) an unused line fee, which is payable monthly, of 0.75% if the Company draws less than $25 million on Credit Facility IV or 0.60% if the Company draws more than $25 million on Credit Facility IV, and (iv) an annual administrative agent fee in the amount of $100,000 in 2019 and $200,000 in each year thereafter. The compensating balance for the revolving credit facility is $5.0 million, which is reflected as restricted cash equivalents on the Company’s Consolidated Balance Sheets. On June 19, 2019, in order to increase the size of the Credit Facility IV, the credit facility was amended to add Bank Leumi USA as an additional lender. The amendment increased the size of Credit Facility IV by $15.0 million to $50.0 million. All other material terms of the Credit Facility remain unchanged. In addition, the Company was subject to a closing fee of 1% of the additional commitment amount of $15.0 million to be paid at closing. As of ~~July 31, 2019,~~April 30, 2020, there was ~~$22.1 million~~no amount outstanding on Credit Facility IV and the Company was in compliance with the maximum balance sheet leverage covenant related to Credit Facility IV.

The Company enters into contracts with portfolio companies and other parties that contain a variety of indemnifications. The ~~Company’s~~Company's maximum exposure under these arrangements is unknown. However, the Company has not experienced claims or losses pursuant to these contracts and believes the risk of loss related to indemnifications to be remote.

Subsequent Events

On ~~August 12, 2019,~~May 14, 2020, Folio announced it entered into an agreement to become a part of The Goldman Sachs Group, Inc. (“Goldman Sachs”). The acquisition, while subject to regulatory approval, is expected to close in the third calendar quarter of 2020. If the transaction closes, the Company ~~sold 608,310 common shares~~expects to receive approximately $15 million in proceeds.
On May 27, 2020, the Company and Wynnefield Capital announced an agreement under which six of ~~Equus totaling approximately $985,000~~the Company’s current directors and three independent director candidates proposed by Wynnefield Capital will be nominated by the Company’s Board of Directors for election at the 2020 annual meeting of stockholders, currently scheduled for July 15, 2020. The Board of Directors will remain at its current size of nine directors. A committee comprised of Chairman Tokarz and two independent Board members will continue to explore strategic alternatives and other value enhancing opportunities and there will be no changes to the Company’s current management agreement with The Tokarz Group Advisers LLC prior to the annual meeting.Under the agreement, the Company has agreed to pay the fees and expenses of Wynnefield Capital in ~~proceeds and resulting in a realized loss~~the amount of approximately ~~$268,000.~~$290,000.

~~On August 30, 2019,~~As previously disclosed, the Company is party to Credit Facility II, ~~was extended~~dated as of July 31, 2013, with BB&T. On June 5, 2020, the Company and BB&T entered into a certain Waiver and Thirteenth Amendment to ~~August 31, 2020.~~Secured Revolving Credit Agreement (the “Credit Facility Amendment”), pursuant to which (i) BB&T waived compliance with the net worth covenant for the period ended April 30, 2020 (as the Company's net asset value fell to approximately $186.0 million as of April 30, 2020) and (ii) Section 5.05 of Credit Facility II is amended to read as follows:

SECTION 5.05.Net Worth. Consolidated Net Worth shall at no time be less than $150,000,000.
Other than Section 5.05, terms of the Credit Facility II remain unchanged and borrowings under the Credit Facility continue to be secured by cash, short-term and long-term U.S. Treasury securities and other governmental agency securities.

~~ITEM~~Item 3. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Quantitative and Qualitative Disclosures About Market Risk

Historically the Company has invested in small companies, and its investments in these companies are considered speculative in nature. The Company’s investments often include securities that are subject to legal or contractual restrictions on resale that adversely affect the liquidity and marketability of such securities. As a result, the Company is subject to risk of loss which may prevent our shareholders from achieving price appreciation, dividend distributions and return of capital.

Financial instruments that subjected the Company to concentrations of market risk consisted principally of equity investments, subordinated notes and debt instruments ~~and escrow receivables,~~ which represent approximately ~~90.6%~~79.5% of the Company’s total assets at ~~July 31, 2019.~~April 30, 2020. As discussed in Note 8 “Portfolio Investments,” these investments consist of securities in companies with no readily determinable market values and as such are valued in accordance with the Company’s fair value policies and procedures. The Company’s investment strategy represents a high degree of business and financial risk due to the fact that portfolio company investments are generally illiquid, in small and middle market companies, and include entities with little operating history or entities that possess operations in new or developing industries. These investments, should they become publicly traded, would generally be: (i) subject to restrictions on resale, if they were acquired from the issuer in private placement transactions; and (ii) susceptible to market risk. The Company may make short-term investments in 90-day Treasury Bills or longer-term treasury notes, which are federally guaranteed securities, or other investments, including exchange-traded funds, private investment funds and designated money market accounts, pending investments in portfolio companies made pursuant to our principal investment strategy.

In addition, the following risk factors relate to market risks impacting the Company.

We are currently operating in a period of capital markets disruptions and economic uncertainty. Such market conditions may materially and adversely affect debt and equity capital markets, which may have a negative impact on our business, financial condition and operations.

From time to time, capital markets may experience periods of disruption and instability. The U.S. capital markets have experienced extreme volatility and disruption following the global outbreak of coronavirus (“COVID-19”) that began in December 2019. Some economists and major investment banks have expressed concern that the continued spread of the COVID-19 globally could lead to a world-wide economic downturn. Even after the COVID-19 pandemic subsides, the U.S. economy, as well as most other major economies, may continue to experience a recession, and we anticipate our businesses would be materially and adversely affected by a prolonged recession in the U.S. and other major markets. Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. The COVID-19 outbreak is having, and any future outbreaks could have, an adverse impact on the ability of lenders to originate loans, the volume and type of loans originated, the ability of borrowers to make payments and the volume and type of amendments and waivers granted to borrowers and remedial actions taken in the event of a borrower default, each of which could negatively impact the amount and quality of loans available for investment by the Company and returns to the Company, among other things. With respect to the U.S. credit markets (in particular for middle market loans), the COVID-19 outbreak has resulted in, and until fully resolved is likely to continue to result in, the following, among other things: (i) increased draws by borrowers on revolving lines of credit and other financing instruments; (ii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans; (iii) greater volatility in pricing and spreads and difficulty in valuing loans during periods of increased volatility; and (iv) rapidly evolving proposals and/or actions by state and federal governments to address problems being experienced by the markets and by businesses and the economy in general which will not necessarily adequately address the problems facing the loan market and middle-market businesses. These and future market disruptions and/or illiquidity could have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments. We may have to access, if available, alternative markets for debt and equity capital, and a severe disruption in the global financial markets, deterioration in credit and financing conditions or uncertainty regarding U.S. government spending and deficit levels or other global economic conditions could have a material adverse effect on our business, financial condition and results of operations.

For example, between 2008 and 2009, the U.S. and global capital markets were unstable as evidenced by periodic disruptions in liquidity in the debt capital markets, significant write-offs in the financial services sector, the re-pricing of credit risk in the broadly syndicated credit market and the failure of major financial institutions. Despite actions of the U.S. federal government and foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular.

Equity capital may be difficult to raise during periods of adverse or volatile market conditions because, subject to some limited exceptions, as a BDC, we are generally not able to issue additional shares of our common stock at a price less than NAV without first obtaining approval for such issuance from our shareholders and our independent directors. Volatility and dislocation in the capital markets can also create a challenging environment in which to raise or access debt capital. The current market and future market conditions similar to those experienced from 2008 through 2009 for any substantial length of time could make it difficult to extend the maturity of or refinance our existing indebtedness or obtain new indebtedness with similar terms and any failure to do so could have a material adverse effect on our business. The debt capital that will be available to us in the future, if at all, may be at a higher cost and on less favorable terms and conditions than what we currently experience, including being at a higher cost in a rising interest rate environment. If any of these conditions appear, they may have an adverse effect on our business, financial condition, and results of operations. These events could limit our investment originations, limit our ability to increase returns to equity holders through the effective use of leverage, and negatively impact our operating results.

In addition, significant changes or volatility in the capital markets may also have a negative effect on the valuations of our investments. While most of our investments are not publicly traded, applicable accounting standards require us to assume as part of our valuation process that our investments are sold in a principal market to market participants (even if we plan on holding an investment through its maturity). Significant changes in the capital markets may also affect the pace of our investment activity and the potential for liquidity events involving our investments. Thus, the illiquidity of our investments may make it difficult for us to sell our investments to access capital if required, and as a result, we could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes. An inability to raise or access capital could have a material adverse effect on our business, financial condition or results of operations.

Governmental authorities worldwide have taken increased measures to stabilize the markets and support economic growth. The success of these measures is unknown and they may not be sufficient to address the market dislocations or avert severe and prolonged reductions in economic activity.

We also face an increased risk of investor, creditor or portfolio company disputes, litigation and governmental and regulatory scrutiny as a result of the effects of COVID-19 on economic and market conditions.

Events outside of our control, including public health crises, could negatively affect our portfolio companies and our results of our operations.

Periods of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control. These types of events have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies. The recent outbreak of COVID-19 in many countries, including the United States, continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. COVID-19 spread quickly and has been identified as a global pandemic by the World Health Organization. In response, governmental authorities have imposed restrictions on travel and the temporary closure of many corporate offices, retail stores, restaurants, fitness clubs and manufacturing facilities and factories in affected jurisdictions, including, beginning in March 2020, in the United States. COVID-19 and the resulting economic dislocations have had adverse consequences for the business operations and financial performance of some of our portfolio companies, which may, in turn impact the valuation of our investments and have adversely affected, and threaten to continue to adversely affect, our operations. Local, state and federal and numerous non-U.S. governmental authorities have imposed travel restrictions, business closures and other quarantine measures on service providers and other individuals that remain in effect on the date of this Quarterly Report on Form 10-Q. COVID-19 has caused the effective cessation of all business activity deemed non-essential by such governmental authorities. We cannot predict the full impact of COVID-19, including the duration of the closures and restrictions described above. As a result, we are unable to predict the duration of these business and supply-chain disruptions, the extent to which COVID-19 will negatively affect our portfolio companies’ operating results or the impact that such disruptions may have on our results of operations and financial condition. With respect to loans to portfolio companies, the Company will be impacted if, among other things, (i) amendments and waivers are granted (or are required to be granted) to borrowers permitting deferral of loan payments or allowing for PIK interest payments, (ii) borrowers default on their loans, are unable to refinance their loans at maturity, or go out of business, or (iii) the value of loans held by the Company decreases as a result of such events and the uncertainty they cause. Portfolio companies may also be more likely to seek to draw on unfunded commitments we have made, and the risk of being unable to fund such commitments is heightened during such periods. Depending on the duration and extent of the disruption to the business operations of our portfolio companies, we expect some portfolio companies, particularly those in vulnerable industries, such as travel, to experience financial distress and possibly to default on their financial obligations to us and/or their other capital providers. In addition, if such portfolio companies are subjected to prolonged and severe financial distress, we expect some of them to substantially curtail their operations, defer capital expenditures and lay off workers. These developments would be likely to permanently impair their businesses and result in a reduction in the value of our investments in them.

The Company will also be negatively affected if the operations and effectiveness of our portfolio companies (or any of the key personnel or service providers of the foregoing) are compromised or if necessary or beneficial systems and processes are disrupted as a result of stay-at-home orders or other related interruptions to business operations.

We depend on key personnel of TTG Advisers, especially Mr. Tokarz, in seeking to achieve our investment objective.

We depend on the continued services of Mr. Tokarz and certain other key management personnel of TTG Advisers. If we were to lose access to any of these personnel, particularly Mr. Tokarz, it could negatively impact our operations and we could lose business opportunities. There is a risk that Mr. Tokarz’s expertise may be unavailable to the Company, which could significantly impact the Company’s ability to achieve its investment objective.

Our returns may be substantially lower than the average returns historically realized by the private equity industry as a whole.

Past performance of the private equity industry is not necessarily indicative of that sector’s future performance, nor is it necessarily a good proxy for predicting the returns of the Company. We cannot guarantee that we will meet or exceed the rates of return historically realized by the private equity industry as a whole. Additionally, our overall returns are impacted by certain factors related to our structure as a publicly-traded business development company, including:

· The substantially lower return we are likely to realize on short-term liquid investments during the period in which we are identifying potential investments, and

· The periodic disclosure required of business development companies, which could result in the Company being less attractive as an investor to certain potential portfolio companies.

Substantially all of our portfolio investments and escrow receivables are recorded at “fair value” and, as a result, there is a degree of uncertainty regarding the carrying values of our portfolio investments.

Pursuant to the requirements of the 1940 Act, because our portfolio company investments do not have readily ascertainable market values, we record these investments at fair value in accordance with our Valuation Procedures adopted by our Board of Directors. As permitted by the SEC, the Board of Directors has delegated the responsibility of making fair value determinations to the Valuation Committee, subject to the Board of Directors’ supervision and pursuant to the Valuation Procedures.

At ~~July 31, 2019,~~April 30, 2020, approximately ~~90.3%~~78.3% of our total assets represented portfolio investments recorded at fair value.

There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. In determining the fair value of a portfolio investment, the Valuation Committee analyzes, among other factors, the portfolio company’s financial results and projections and publicly traded comparable companies when available, which may be dependent on general economic conditions. We specifically value each individual investment and record unrealized depreciation for an investment that we believe has become impaired, including where collection of a loan or realization of an equity security is doubtful. Conversely, we will record unrealized appreciation if we have an indication (based on a significant development) that the underlying portfolio company has appreciated in value and, therefore, our equity security has also appreciated in value, where appropriate. Without a readily ascertainable market value and because of the inherent uncertainty of fair valuation, fair value of our investments may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material.

Pursuant to our Valuation Procedures, our Valuation Committee (which is comprised of three Independent Directors) reviews, considers and determines fair valuations on a quarterly basis (or more frequently, if

deemed appropriate under the circumstances). Any changes in valuation are recorded in the consolidated statements of operations as “Net change in unrealized appreciation (depreciation) on investments.”

Economic recessions or downturns could impair our portfolio companies and have a material adverse impact on our business, financial condition and results of operations.

Many of the companies in which we have made or will make investments may be susceptible to adverse economic conditions. Adverse economic conditions may affect the ability of a company to engage in a liquidity event. These conditions could lead to financial losses in our portfolio and a decrease in our revenues, net income and assets. Depending on market conditions, we could incur substantial realized losses and suffer unrealized losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations.

Our overall business of making loans or private equity investments may be affected by current and future market conditions. The absence of an active mezzanine lending or private equity environment may slow the amount of private equity investment activity. As a result, the pace of our investment activity may slow, which could impact our ability to achieve our investment objective. In addition, significant changes in the capital markets could have an effect on the valuations of private companies and on the potential for liquidity events involving such companies. This could affect the amount and timing of any gains realized on our investments and thus have a material adverse impact on our financial condition.

Depending on market conditions, we could incur substantial realized losses and suffer unrealized losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations. Declines in the market values of the Company’s investments could lead to diminished investment opportunities for the Company, prevent the Company from successfully executing its investment strategies or require the Company to dispose of investments at a loss.

We may not realize gains from our equity investments.

When we invest in mezzanine and senior debt securities, we may acquire warrants or other equity securities as well. We may also invest directly in various equity securities. Our goal is ultimately to realize gains upon our disposition of such interests. However, the equity interests we receive or invest in may not appreciate in value and, in fact, may decline in value. In addition, the equity securities we receive or invest in may be subject to restrictions on resale during periods in which it would be advantageous to sell. Accordingly, we may not be able to realize gains from our equity interests, and any gains that we do realize on the disposition of any equity interests may not be sufficient to offset any other losses we experience.

The market for private equity investments can be highly competitive. In some cases, our status as a regulated business development company may hinder our ability to participate in investment opportunities.

We face competition in our investing activities from private equity funds, other business development companies, investment banks, investment affiliates of large industrial, technology, service and financial companies, small business investment companies, wealthy individuals and foreign investors. As a regulated business development company, we are required to disclose quarterly the name and business description of portfolio companies and the value of any portfolio securities. Many of our competitors are not subject to this disclosure requirement. Our obligation to disclose this information could hinder our ability to invest in certain portfolio companies. Additionally, other regulations, current and future, may make us less attractive as a potential investor to a given company than a private equity fund not subject to the same regulations. Furthermore, some of our competitors have greater resources than we do. Increased competition would make it more difficult for us to purchase or originate investments at attractive prices. As a result of this competition, sometimes we may be precluded from making certain investments.

Our ability to use our capital loss carryforwards may be subject to limitations.

On October 31, ~~2018,~~2019, the Company ~~did not have~~had a net capital loss ~~carryforward.~~carryforward of approximately $9.3 million and had unrealized losses of approximately $75.4 million. The Company had approximately ~~$86.9~~$119.3 million in unrealized losses as of ~~July 31, 2019.~~April 30, 2020. If we experience an aggregate 50% shift in the ownership of our common stock from shareholder transactions over a three year period (e.g., if a shareholder acquires 5% or more of our outstanding shares of common stock, or if a shareholder who owns 5% or more of our outstanding shares of common stock significantly increases or decreases its investment in the Company), our ability to utilize our capital loss carryforwards to offset future capital gains may be severely limited. Further, in the event that we are deemed to have failed to meet the requirements to qualify as a RIC, our ability to use our capital loss carryforwards could be adversely affected. Please see Note 12 of our consolidated financial statements “Tax Matters” for more information.

Loss of pass-through tax treatment would substantially reduce net assets and income available for dividends.

We have operated so as to qualify as a RIC. If we meet source of income, diversification and distribution requirements, we will qualify for effective pass-through tax treatment. We would cease to qualify for such pass-through tax treatment if we were unable to comply with these requirements. In addition, we may have difficulty meeting the requirement to make distributions to our shareholders because in certain cases we may recognize income before or without receiving cash representing such income, such as in the case of debt obligations that are treated as having original issue discount. If we fail to qualify as a RIC, we will have to pay corporate-level taxes on all of our income whether or not we distribute it, which would substantially reduce the amount of income available for distribution to our shareholders, and all of our distributions will be taxed to our shareholders as ordinary corporate distributions. Even if we qualify as a RIC, we generally will be subject to a corporate-level income tax on the income we do not distribute. Moreover, if we do not distribute at least: (1) 98% of our ordinary income during each calendar year, (2) 98.2% of our capital gain net income realized in the period from November 1 of the prior year through October 31 of the current year, and (3) all such ordinary income and capital gain net income for the previous years that were not distributed during those years, we generally will be subject to a 4% excise tax on certain undistributed amounts.

There are certain risks associated with the Company holding debt obligations that are treated under applicable tax rules as having original issue discount.

For federal income tax purposes, we may be required to recognize taxable income in circumstances in which we do not receive a corresponding payment in cash. For example, if we hold debt obligations that are treated under applicable tax rules as having original issue discount (“OID”) (such as debt instruments with payment-in-kind, or PIK, interest or, in certain cases, increasing interest rates or debt instruments that were issued with warrants), we must include in income each year a portion of the OID that accrues over the life of the obligation, regardless of whether cash representing such income is received by us in the same taxable year. We may also have to include in income other amounts that we have not yet received in cash, such as deferred loan origination fees that are paid after origination of the loan or are paid in non-cash compensation such as warrants or stock. We anticipate that a portion of our income may constitute OID or other income required to be included in taxable income prior to receipt of cash. Further, we may elect to include market discount in our taxable income in the current year, instead of upon disposition, as failing to make such election would limit our ability to deduct interest expenses for tax purposes.

Any OID or other amounts accrued will be included in our investment company taxable income for the year of the accrual. Therefore, we may be required to make a distribution to our shareholders in order to satisfy the annual distribution requirement necessary to qualify for and maintain RIC tax treatment under Subchapter M of the Code, even though we will not have received any corresponding cash amount. As a result, we may have to sell some of our investments at times and/or at prices we would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose. If we are not able to obtain cash from other sources, we may fail to qualify for or maintain RIC tax treatment and thus become subject to corporate-level income tax, as described in the previous risk factor regarding loss of pass-through tax treatment.

Additionally, the higher interest rates of OID instruments reflect the payment deferral and increased credit risk associated with these instruments, and OID instruments generally represent a significantly higher credit risk than coupon loans. Even if the accounting conditions for income accrual are met, the borrower could still default when the Company’s actual collection is supposed to occur at the maturity of the obligation.

OID instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID income may also create uncertainty about the source of the Company’s cash distributions. For accounting purposes, any cash distributions to shareholders representing OID income are not treated as coming from paid-in capital, even though the cash to pay them comes from the offering proceeds. Thus, despite the fact that a distribution of OID income comes from the cash invested by the shareholders, the 1940 Act does not require that shareholders be given notice of this fact by reporting it as a return of capital. PIK interest has the effect of generating investment income and potentially increasing the incentive fees payable to TTG Advisers at a compounding rate. In addition, the deferral of PIK interest also reduces the loan-to-value ratio at a compounding rate. Furthermore, OID creates the risk that fees will be paid to TTG Advisers based on non-cash accruals that ultimately may not be realized, while TTG Advisers will be under no obligation to reimburse the Company for these fees.

Our ability to grow depends on our ability to raise capital.

To fund new investments or other activities, periodically we may need to issue equity securities or borrow from financial institutions. Unfavorable economic conditions, among other things, could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. If we fail to obtain capital to fund our investments, it could limit both our ability to grow our business and our profitability. With certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% after such borrowing. The amount of leverage that we employ depends on TTG Advisers’ and our Board of Directors’ assessment of market and other factors at the time of any proposed borrowing. We cannot assure you that we will be able to maintain our current facilities or obtain other lines of credit at all or on terms acceptable to us.

Complying with the RIC requirements may cause us to forgo otherwise attractive opportunities.

In order to qualify as a RIC for U.S. federal income tax purposes, we must satisfy tests concerning the sources of our income, the nature and diversification of our assets and the amounts we distribute to our shareholders. We may be unable to pursue investments that would otherwise be advantageous to us in order to satisfy the source of income or asset diversification requirements for qualification as a RIC. In particular, to qualify as a RIC, at least 50% of our assets must be in the form of cash and cash items, Government securities, securities of other RICs, and other securities that represent not more than 5% of our total assets and not more than 10% of the outstanding voting securities of the issuer. We have from time to time held a significant portion of our assets in the form of securities that exceed 5% of our total assets or more than 10% of the outstanding voting securities of an issuer, and compliance with the RIC requirements may restrict us from making investments that represent more than 5% of our total assets or more than 10% of the outstanding voting securities of the issuer. Thus, compliance with the RIC requirements may hinder our ability to take advantage of investment opportunities believed to be attractive, including potential follow-on investments in certain of our portfolio companies.

Regulations governing our operation as a business development company affect our ability to, and the way in which we, raise additional capital.

We are not generally able to issue and sell our common stock at a price below net asset value per share. We may, however, sell our common stock or warrants at a price below the then-current net asset value per share of our common stock if our Board of Directors determines that such sale is in the best interests of the Company and its stockholders, and, if required by law or regulation, our stockholders approve such sale. In any such case, the price at which our securities are to be issued and sold may not be less than a price that, in the determination of our Board of Directors, closely approximates the market value of such securities (less any

distributing commission or discount). If we raise additional funds by issuing more common stock or senior securities convertible into, or exchangeable for, our common stock, then the percentage ownership of our stockholders at that time will decrease, and you might experience dilution.

Any failure on our part to maintain our status as a business development company would reduce our operating flexibility.

We intend to continue to qualify as a business development company (“BDC”) under the 1940 Act. The 1940 Act imposes numerous constraints on the operations of BDCs. For example, BDCs are required to invest at least 70% of their total assets in specified types of securities, primarily in private companies or thinly-traded U.S. public companies, cash, cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. Furthermore, any failure to comply with the requirements imposed on BDCs by the 1940 Act could cause the SEC to bring an enforcement action against us and/or expose us to claims of private litigants. In addition, upon approval of a majority of our stockholders, we may elect to withdraw our status as a business development company. If we decide to withdraw our election, or if we otherwise fail to qualify as a business development company, we may be subject to the substantially greater regulation under the 1940 Act as a closed-end investment company. Compliance with such regulations would significantly decrease our operating flexibility and could significantly increase our costs of doing business.

Changes in the law or regulations that govern business development companies and RICs, including changes in tax laws or regulations, may significantly impact our business.

We and our portfolio companies are subject to regulation by laws at the local, state and federal levels, including federal securities law and federal taxation law. These laws and regulations, as well as their interpretation, may change from time to time. A change in these laws or regulations may significantly affect our business.

Results may fluctuate and may not be indicative of future performance.

Our operating results will fluctuate and, therefore, you should not rely on current or historical period results to be indicative of our performance in future reporting periods. In addition to many of the above-cited risk factors, other factors could cause operating results to fluctuate including, among others, variations in the investment origination volume and fee income earned, variation in timing of prepayments, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions.

Our common stock price can be volatile.

The trading price of our common stock may fluctuate substantially. The price of the common stock may be higher or lower than the price you pay for your shares, depending on many factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include the following:

· ~~Price and volume fluctuations in the overall stock market from time to time;~~

Price and volume fluctuations in the overall stock market from time to time;

· Significant volatility in the market price and trading volume of securities of business development companies or other financial services companies;

· Volatility resulting from trading by third parties in derivative instruments that use our common stock as the referenced asset, including puts, calls, long-term equity participation securities, or LEAPs, or short trading positions;

· Changes in regulatory policies or tax guidelines with respect to business development companies or RICs;

· Our adherence to applicable regulatory and tax requirements

· Actual or anticipated changes in our earnings or fluctuations in our operating results or changes in the expectations of securities analysts;

· General economic conditions and trends;

· Loss of a major funding source, which would limit our liquidity and our ability to finance transactions;

· Changes in interest rates; or

· Departures of key personnel of TTG Advisers.

We are subject to market discount risk.

As with any stock, the price of our shares will fluctuate with market conditions and other factors. If shares are sold, the price received may be more or less than the original investment. Whether investors will realize gains or losses upon the sale of our shares will not depend directly upon our NAV, but will depend upon the market price of the shares at the time of sale. Since the market price of our shares will be affected by such factors as the relative demand for and supply of the shares in the market, general market and economic conditions and other factors beyond our control, we cannot predict whether the shares will trade at, below or above our NAV. Although our shares, from time to time, had traded at a premium to our NAV, in more recent years, our shares have traded at a discount to NAV, which discount may fluctuate over time. Our common stock has historically traded at prices below our net asset value per share and was trading as of ~~July 31, 2019~~April 30, 2020 at an approximately ~~25.6%~~36.4% discount to NAV. Therefore, shareholders selling their shares will likely have to sell at a significant discount to NAV per share.

We have not established a mandated minimum dividend payment level and we cannot assure you of our ability to make distributions to our shareholders in the future.

We cannot assure that we will achieve investment results that will allow us to make cash distributions or year-to-year increases in cash distributions. Our ability to make distributions is impacted by, among other things, the risk factors described in this report. In addition, the asset coverage test applicable to us as a business development company can limit our ability to make distributions. Any distributions will be made at the discretion of our Board of Directors and will depend on our earnings, our financial condition, maintenance of our RIC status and such other factors as our Board of Directors may deem relevant from time to time. We cannot assure you of our ability to make distributions to our shareholders.

During certain periods, our distributions have exceeded and may, in the future, exceed our taxable earnings and profits. Therefore, during those times, portions of the distributions that we make may represent a return of capital to you for tax purposes, which will reduce your tax basis in your shares.

During certain periods, our distributions have exceeded and may, in the future, exceed our earnings and profits. For example, in the event that we encounter delays in locating suitable investment opportunities, we may pay all or a portion of our distributions from the proceeds of any securities offering, from borrowings that were made in anticipation of future cash flow or from available funds. Therefore, portions of the distributions that we make may be a return of the money that you originally invested and represent a return of capital to you for tax purposes. A return of capital generally is a return of your investment rather than a return of earnings or gains derived from our investment activities and will be made after deducting the fees and expenses payable in connection with the offering. Such a return of capital is not taxable, but reduces your tax basis in your shares, which may result in higher taxes for you even if your shares are sold at a price below your original investment.

We have borrowed and may continue to borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.

We have borrowed and may continue to borrow money (subject to the 1940 Act limits) in seeking to achieve our investment objective going forward. Borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, can increase the risks associated with investing in our securities.

Under the provisions of the 1940 Act, we are permitted, as a business development company, to borrow money or “issue senior securities” only in amounts such that our asset coverage, as defined in the 1940 Act, equals at least 200% 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 indebtedness at a time when such sales may be disadvantageous. Under the recently passed Small Business Credit Availability Act, subject to satisfying certain disclosure requirements and obtaining board or shareholder approval, the asset coverage requirement under the 1940 Act has been lowered to 150%. As of the date hereof, we remain subject to the 200% asset coverage requirement.

We have borrowed from and may continue to borrow from, and issue senior debt securities to, banks, insurance companies and other private and public lenders. Lenders of these senior securities have fixed dollar claims on our assets that are superior to the claims of our common shareholders. If the value of our assets increases, then leveraging would cause the NAV attributable to our common stock to increase more sharply than it would have had we not used leverage. Conversely, if the value of our consolidated assets decreases, leveraging would cause the NAV to decline more sharply than it otherwise would have had we not used leverage.

Similarly, any increase in our consolidated income in excess of consolidated interest expense on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our consolidated income would cause net investment income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make common stock dividend payments. Leverage is generally considered a speculative investment technique.

As of ~~July 31, 2019,~~April 30, 2020, we have approximately ~~$115.0~~$95.0 million in aggregate principal amount of Senior Notes II (as defined above), due on November 30, 2022. We also have access to leverage through credit facilities.

Our ability to service our debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. The amount of leverage that we employ at any particular time will depend on our management’s and our Board of Director’s assessments of market and other factors at the time of any proposed borrowing.

We may be unable to meet our covenant obligations under our credit facility, which could adversely affect our business.

Credit Facility ~~III~~IV imposes certain financial and operating covenants that may restrict a portion of our business activities, including limitations that could hinder our ability to obtain additional financings and in some cases, to increase our dividends. If we cannot meet these covenants, events of default would arise, which could result in payment of the applicable indebtedness being accelerated and may limit our ability to execute on our investment strategy, as would be the case if we were unable to renew such facility. Any additional facility we access could also impose additional covenants that could restrict our business activities. A failure to add new or replacement debt facilities or issue additional debt securities or other evidences of indebtedness could have an adverse effect on our business, financial condition or results of operations.

Changes in interest rates may affect our cost of capital and net operating income and our ability to obtain additional financing.

Because we have borrowed and may continue to borrow money to make investments, our net investment income before net realized and unrealized gains or losses, or net investment income, may be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. As a result, there can be no assurance that a significant change in market interest rates would not have a material adverse effect on our net investment income. In periods of declining interest rates, we may have difficulty investing our borrowed capital into investments that offer an appropriate return. Because of the generally fixed-rate nature of our debt investments and our borrowings, a hypothetical 1% increase or 1% decrease in interest rates is not expected to have a determinable (or easily predictable) material impact on the Company’s net investment income. In periods of sharply rising interest rates, our cost of funds would increase, which could reduce our net investment income. We may use a combination of long-term and short-term borrowings and equity capital to finance our investing activities. We may utilize our short-term credit facilities as a means to bridge to long-term financing. Our long-term fixed-rate investments are financed primarily with equity and long-term fixed-rate debt. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Additionally, we cannot assure you that financing will be available on acceptable terms, if at all. Deterioration in the credit markets, which could delay our ability to sell certain of our loan investments in a timely manner, could also negatively impact our cash flows.

A small portion of our existing investment portfolio was not selected by the investment team of TTG Advisers.

As of ~~July 31, 2019, 1.6%~~April 30, 2020, 4.0% of the Company’s assets consisted of Legacy Investments. These investments were made pursuant to the Company’s prior investment objective of seeking long-term capital appreciation from venture capital investments in information technology companies. Generally, a cash return may not be received on these investments until a “liquidity event,” i.e., a sale, public offering or merger, occurs. Until then, these Legacy Investments remain in the Company’s portfolio. The Company is managing them to seek to realize maximum returns.

Under the Advisory Agreement, TTG Advisers is entitled to compensation based on our portfolio’s performance. This arrangement may result in riskier or more speculative investments in an effort to maximize incentive compensation. Additionally, because the base management fee payable under the Advisory Agreement is based on total assets less cash, TTG Advisers may have an incentive to increase portfolio leverage in order to earn higher base management fees.

The way in which the compensation payable to TTG Advisers is determined may encourage the investment team to recommend riskier or more speculative investments and to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would adversely affect our shareholders, including investors in this offering. In addition, key criteria related to determining appropriate investments and investment strategies, including the preservation of capital, might be under-weighted if the investment team focuses exclusively or disproportionately on maximizing returns.

There are potential conflicts of interest that could impact our investment returns.

Our officers and directors, and members of the TTG Advisers investment team, may serve other entities, including the PE Fund, and Series A of Public Pension Capital, LLC (the “PPC Fund”), the Private Fund and others that operate in the same or similar lines of business as we do. Accordingly, they may have obligations to those entities, the fulfillment of which might not be in the best interests of us or our shareholders. It is possible that new investment opportunities that meet our investment objective may come to the attention of one of the management team members or our officers or directors in his or her role as an officer or director of another entity or as an investment professional associated with that entity, and, if so, such opportunity might not be offered, or otherwise made available, to us.

Additionally, as an investment adviser, TTG Advisers has a fiduciary obligation to act in the best interests of its clients, including us. To that end, if TTG Advisers manages any additional investment vehicles or client

accounts (which includes its current management of the PE Fund, PPC Fund and the Private Fund), TTG Advisers will endeavor to allocate investment opportunities in a fair and equitable manner. When the investment professionals of TTG Advisers identify an investment, they will have to choose which investment fund should make the investment. As a result, there may be times when the management team of TTG Advisers has interests that differ from those of our shareholders, giving rise to a conflict. In an effort to mitigate situations that give rise to such conflicts, TTG Advisers adheres to a policy (which was approved by our Board of Directors) relating to allocation of investment opportunities, which generally requires, among other things, that TTG Advisers continue to offer the Company MVC Targeted Investments that are not Non-Diversified Investments. For more information on the allocation policy, please see “Our Investment Strategy — Allocation of Investment Opportunities” above.

Our relationship with any investment vehicle we or TTG Advisers manage could give rise to conflicts of interest with respect to the allocation of investment opportunities between us on the one hand and the other vehicles on the other hand.

Our subsidiaries are authorized to and serve as a general partner or managing member to a private equity or other investment vehicle(s) (“Other Vehicles”). In addition, TTG Advisers may serve as an investment manager, sub-adviser or portfolio manager to Other Vehicles. Further, Mr. Tokarz is a co-founder of PPC, a registered investment adviser that provides advisory services to Series A of the PPC Fund. As a result of this relationship, certain of PPC’s principals and other PPC investment professionals may make themselves available, from time to time, to consult with TTG Advisers on investment matters relating to MVC or the PE Fund. In this connection, certain employees of PPC are “associated persons” of TTG Advisers when providing certain services on behalf of TTG Advisers and, in this capacity, are subject to its oversight and supervision. Likewise, TTG Advisers makes available to PPC certain investment professionals that are employed by TTG Advisers to provide services for PPC and the PPC Fund. The foregoing raises a potential conflict of interest with respect to allocation of investment opportunities to us, on the one hand and to the Other Vehicles on the other hand. The Board and TTG Advisers have adopted an allocation policy (described above) to help mitigate potential conflicts of interest among us and Other Vehicles. For more information on the allocation policy, please see “Our Investment Strategy — Allocation of Investment Opportunities” above.

Wars, terrorist attacks, and other acts of violence may affect any market for our common stock, impact the businesses in which we invest and harm our operations and our profitability.

Wars, terrorist attacks and other acts of violence are likely to have a substantial impact on the U.S. and world economies and securities markets. The nature, scope and duration of the unrest, wars and occupation cannot be predicted with any certainty. Furthermore, terrorist attacks may harm our results of operations and your investment. We cannot assure you that there will not be further terrorist attacks against the United States or U.S. businesses. Such attacks and armed conflicts in the United States or elsewhere may impact the businesses in which we invest directly or indirectly, by undermining economic conditions in the United States. Losses resulting from terrorist events are generally uninsurable.

We are dependent on information systems, and systems failures, as well as operating failures, could disrupt our business, which may, in turn, negatively affect our liquidity, financial condition or results of operations.

Our business is dependent on our and third parties’ communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control and adversely affect our business. There could be:

sudden electrical or telecommunications outages;

natural disasters such as earthquakes, tornadoes and hurricanes;

disease pandemics;

events arising from local or larger scale political or social matters, including terrorist acts; and

cyber-attacks.

In addition to our dependence on information systems, poor operating performance by our service providers could adversely impact us.

These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our securities and our ability to pay distributions to our stockholders.

Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, financial condition and operating results.

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve a third party or our own personnel gaining unauthorized access to our information systems for purposes of obtaining ransom payments, misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for loss or misappropriation of data, stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our reputation or business relationships. As our business relies on technology, we are subject to the risks posed to our information systems, both internal and those provided by third-party service providers. These third-party service providers have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that a cyber incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident.

Our financial condition and results of operations will depend on our ability to effectively manage our future growth.

Our ability to achieve our investment objective can depend on our ability to sustain continued growth. Accomplishing this result on a cost-effective basis is largely a function of our marketing capabilities, our management of the investment process, our ability to provide competent, attentive and efficient services and our access to financing sources on acceptable terms. As we grow, TTG Advisers may need to hire, train, supervise and manage new employees. Failure to effectively manage our future growth could have a material adverse effect on our business, financial condition and results of operations.

Investment Risks

Investment risks are risks associated with our determination to execute on our business objective. These risks are not risks associated with general business conditions or those relating to an offering of our securities.

Investing in private companies involves a high degree of risk.

Our investment portfolio generally consists of loans to, and investments in, private companies. Investments in private businesses involve a high degree of business and financial risk, which can result in substantial losses and, accordingly, should be considered speculative. There is generally very little publicly available information about the companies in which we invest, and we rely significantly on the due diligence of the members of the investment team to obtain information in connection with our investment decisions. It is thus difficult, and often impossible, to protect the Company from the risk of fraud, misrepresentation or poor judgment by these companies.

Our investments in portfolio companies are generally illiquid.

We generally acquire our investments directly from the issuer in privately negotiated transactions. Most of the investments in our portfolio (other than cash or cash equivalents and certain other investments made pending investments in portfolio companies such as investments in exchange-traded funds) are typically subject to restrictions on resale or otherwise have no established trading market. We may exit our investments when the portfolio company has a liquidity event, such as a sale, recapitalization or initial public offering. The illiquidity of our investments may adversely affect our ability to dispose of equity and debt securities at times when it may be otherwise advantageous for us to liquidate such investments. In addition, if we were forced to immediately liquidate some or all of the investments in the portfolio, the proceeds of such liquidation could be significantly less than the current fair value of such investments.

Our investments in small and middle-market privately-held companies are extremely risky and the Company could lose its entire investment.

Investments in small and middle-market privately-held companies are subject to a number of significant risks including the following:

· Small and middle-market companies may have limited financial resources and may not be able to repay the loans we make to them. Our strategy includes providing financing to companies that typically do not have capital sources readily available to them. While we believe that this provides an attractive opportunity for us to generate profits, this may make it difficult for the borrowers to repay their loans to us upon maturity.

· Small and middle-market companies typically have narrower product lines and smaller market shares than large companies. Because our target companies are smaller businesses, they may be more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. In addition, smaller companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing and other capabilities, and a larger number of qualified managerial and technical personnel.

· There is generally little or no publicly available information about these privately-held companies. There is generally little or no publicly available operating and financial information about privately-held companies. As a result, we rely on our investment professionals to perform due diligence investigations of these privately-held companies, their operations and their prospects. We may not learn all of the material information we need to know regarding these companies through our investigations. It is difficult, if not impossible, to protect the Company from the risk of fraud, misrepresentation or poor judgment by our portfolio companies. Accordingly, the Company’s performance (including the valuation of its investments) is subject to the ongoing risk that the portfolio companies or their employees, agents, or service providers, may commit fraud adversely affecting the value of our investments.

· Small and middle-market companies generally have less predictable operating results. We expect that our portfolio companies may have significant variations in their operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, may require substantial additional capital to support their operations, finance expansion or maintain their competitive position, may otherwise have a weak financial position or may be adversely affected by changes in the business cycle. Our portfolio companies may not meet net income, cash flow and other coverage tests typically imposed by their senior lenders.

· Small and middle-market businesses are more likely to be dependent on one or two persons. Typically, the success of a small or middle-market company also depends on the management talents and efforts of one or two persons or a small group of persons. The death, disability or resignation of one

or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us.

· Small and middle-market companies are likely to have greater exposure to economic downturns than larger companies. We expect that our portfolio companies will have fewer resources than larger businesses and an economic downturn may thus more likely have a material adverse effect on them.

· Small and middle-market companies may have limited operating histories. We may make debt or equity investments in new companies that meet our investment criteria. Portfolio companies with limited operating histories are exposed to the operating risks that new businesses face and may be particularly susceptible to, among other risks, market downturns, competitive pressures and the departure of key executive officers.

Our borrowers may default on their payments, which may have an effect on our financial performance.

We may make long-term unsecured, subordinated loans, which may involve a higher degree of repayment risk than conventional secured loans. We primarily invest in companies that may have limited financial resources and that may be unable to obtain financing from traditional sources. In addition, numerous factors may adversely affect a portfolio company’s ability to repay a loan we made to it, including the failure to meet a business plan, a downturn in its industry or operating results, or negative economic conditions. Deterioration in a borrower’s financial condition and prospects may be accompanied by deterioration in any related collateral.

Our investments in mezzanine and other debt securities may involve significant risks.

Our investment strategy contemplates investments in mezzanine and other debt securities of privately held companies. “Mezzanine” investments typically are structured as subordinated loans (with or without warrants) that carry a fixed rate of interest. We may also make senior secured and other types of loans or debt or similar income producing investments. Our debt or similar income producing investments are not, and typically will not be, rated by any rating agency, but we believe that if such investments were rated, they would be below investment grade quality (rated lower than “Baa3” by Moody’s or lower than “BBB-” by Standard & Poor’s, commonly referred to as “junk bonds”). Loans of below investment grade quality have predominantly speculative characteristics with respect to the borrower’s capacity to pay interest and repay principal. Our debt investments in portfolio companies may thus result in a high level of risk and volatility and/or loss of principal.

Our portfolio companies may be highly leveraged.

Some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair such companies’ ability to finance their future operations and capital needs. As a result, the flexibility of these companies’ to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.

We are a non-diversified investment company within the meaning of the 1940 Act, and therefore may invest a significant portion of our assets in a relatively small number of portfolio companies, which subjects us to a risk of significant loss should the performance or financial condition of one or more portfolio companies deteriorate.

We are classified as a non-diversified investment company within the meaning of the 1940 Act, and therefore we may invest a significant portion of our assets in a relatively small number of portfolio companies and/or in a limited number of industries. For example, as of ~~July 31, 2019,~~April 30, 2020, the fair value of our largest investment, ~~Security Holdings,~~Custom Alloy, comprised ~~19.4%~~18.9% of our net assets. Beyond the asset diversification requirements associated with our qualification as a RIC, we do not have fixed guidelines for diversification, and while we are not targeting any specific industries, relatively few industries may continue to be

significantly represented among our investments. To the extent that we have large positions in the securities of a small number of portfolio companies, we are subject to an increased risk of significant loss should the performance or financial condition of these portfolio companies or their respective industries deteriorate. We may also be more susceptible to any single economic or regulatory occurrence as a result of holding large positions in a small number of portfolio companies. See the risk factor below regarding the industry in which Crius operates.

When we are a debt or minority equity investor in a portfolio company, we may not be in a position to control the entity, and management of the company may make decisions that could decrease the value of our portfolio holdings.

We currently have, and anticipate making debt and minority equity investments; therefore, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the shareholders and management of such company may take risks or otherwise act in ways that do not serve our interests. Due to the lack of liquidity in the markets for our investments in privately held companies, we may not be able to dispose of our interests in our portfolio companies as readily as we would like. As a result, a portfolio company may make decisions that could decrease the value of our portfolio holdings.

We may choose to waive or defer enforcement of covenants in the debt securities held in our portfolio, which may cause us to lose all or part of our investment in these companies.

Some of our loans to our portfolio companies may be structured to include customary business and financial covenants placing affirmative and negative obligations on the operation of each company’s business and its financial condition. However, from time to time, we may elect to waive breaches of these covenants, including our right to payment, or waive or defer enforcement of remedies, such as acceleration of obligations or foreclosure on collateral, depending upon the financial condition and prospects of the particular portfolio company. These actions may reduce the likelihood of our receiving the full amount of future payments of interest or principal and be accompanied by a deterioration in the value of the underlying collateral as many of these companies may have limited financial resources, may be unable to meet future obligations and may go bankrupt. This could negatively impact our ability to pay dividends and cause you to lose all or part of your investment.

Our portfolio companies may incur obligations that rank equally with, or senior to, our investments in such companies. As a result, the holders of such obligations may be entitled to payments of principal or interest prior to us, preventing us from obtaining the full value of our investment in the event of an insolvency, liquidation, dissolution, reorganization, acquisition, merger or bankruptcy of the relevant portfolio company.

Our portfolio companies may have other obligations that rank equally with, or senior to, the securities in which we invest. By their terms, such other securities may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of securities ranking senior to our investment in the relevant portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying investors that are senior to us, the portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of other securities ranking equally with securities in which we invest, we would have to share on an equal basis any distributions with other investors holding such securities in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company. As a result, we may be prevented from obtaining the full value of our investment in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.

~~Recent tax legislation may have unanticipated effects on us.~~

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, which significantly changed the Code, including, a reduction in the corporate income tax rate, a new limitation on the deductibility of interest expense, and significant changes to the taxation of income earned from foreign sources and foreign subsidiaries. The Tax Cuts and Jobs Act also authorizes the IRS to issue regulations with respect to the new provisions. The Tax Cuts and Jobs Act, or regulations or other guidance issued under it, might affect us, our business or the business of our portfolio companies.

Investments in foreign debt or equity may involve significant risks in addition to the risks inherent in U.S. investments.

Our investment strategy has resulted in some investments in debt or equity of foreign companies (subject to applicable limits prescribed by the 1940 Act). These risks may be even more pronounced for investments in less developed or emerging market countries. Investing in foreign companies can expose us to additional risks not typically associated with investing in U.S. companies. These risks include exchange rates, changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility, including developing or emerging market countries. A portion of our investments are located in countries that use the euro as their official currency. The USD/euro exchange rate, like foreign exchange rates in general, can be volatile and difficult to predict. This volatility could materially and adversely affect the value of the Company’s shares and our interests in affected portfolio companies.

Hedging transactions may expose us to additional risks.

We may enter into hedging transactions to seek to reduce currency, commodity or other rate risks. However, unanticipated changes in currency or other rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek or be able to establish a perfect or effective correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies.

Our investments in private equity funds, including the PE Fund, are subject to substantial risk, including a loss of investment.

The PE Fund is not, and other private equity funds in which the Company may invest, will not be registered as an investment company under the 1940 Act. Therefore, with respect to its investments in such funds, the Company will not have the benefit of the protections afforded by the 1940 Act to investors in registered investment companies, such as the limitations applicable to the use of leverage and the requirements concerning custody of assets, composition of boards of directors and approvals of investment advisory arrangements. Additionally, the interests in the PE Fund are privately placed and are not registered under the Securities Act, and the PE Fund is not a reporting company under the 1934 Act. Accordingly, the amount of information available to investors about the PE Fund will be limited.

Investment in a private equity fund involves the same types of risks associated with an investment in any operating company. However, the investments made by private equity funds will entail a high degree of risk and in most cases be highly illiquid and difficult to value since no ready market typically exists for the securities of companies held in a private equity fund’s portfolio. (See Note 6 “Investment Valuation Policy,” which discusses our valuation policy respecting our interest in the PE Fund.) Investing in private equity investments is intended for long-term investment by investors who can accept the risks associated with making highly speculative, primarily illiquid investments in privately negotiated transactions, and who can bear the risk of loss of their investment. Attractive investment opportunities in private equity may occur only

periodically, if at all. Furthermore, private equity has generally been dependent on the availability of debt or equity financing to fund the acquisitions of their investments. Due to recent market conditions, however, the availability of such financing has been reduced dramatically, limiting the ability of private equity to obtain the required financing.

Investing in our securities may involve a high degree of risk.

The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive, and therefore, an investment in our securities may not be suitable for someone with a low risk tolerance.

~~ITEM~~Item 4. ~~CONTROLS AND PROCEDURES~~Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management with the participation of the individual who performs the functions of the Principal Executive Officer (the “CEO”) and the individual who performs the functions of a Principal Financial Officer (the “CFO”), has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, management has concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this report.

There has been no change in the Company’s internal control over financial reporting that occurred during the ~~third~~second quarter of ~~2019,~~2020, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

A description of the risk factors associated with our business is set forth in the “Quantitative and Qualitative Disclosures about Market Risk” section, above.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We had no unregistered sales of equity securities for the quarter ended April 30, ~~2019.~~2020.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

~~None.~~As previously disclosed, the MVC Capital, Inc. (the “Company”) is party to a one year, $25 million revolving credit facility (“Credit Facility II”), dated as of July 31, 2013, with Branch Banking and Trust Company (“BB&T”).

On June 5, 2020, the Company and BB&T entered into a certain Waiver and Thirteenth Amendment to Secured Revolving Credit Agreement (the “Credit Facility Amendment”), pursuant to which (i) BB&T waived compliance with the net worth covenant for the period ended April 30, 2020 (as the Company's net asset value fell to approximately $186.0 million as of April 30, 2020) and (ii) Section 5.05 of Credit Facility II is amended to read as follows:

SECTION 5.05.Net Worth. Consolidated Net Worth shall at no time be less than $150,000,000.

As permitted by General Instruction D to the Form 10-Q, this disclosure incorporates by reference the information contained in previously filed reports relating to Credit Facility II on Form 8-K filed on August 5, 2013, February 5, 2014, August 4, 2014, August 5, 2015, October 5, 2015, December 7, 2015, July 6, 2016, March 1, 2017, September 1, 2017, August 14, 2018 and August 30, 2019 (File No. 814-00201).

Item 6. Exhibits

Incorporated by reference to the Exhibit Index included herewith.

Other required Exhibits are included in this Form 10-Q or have been previously filedwith the Securities and Exchange Commission (the “SEC”) in the Company’s Registration Statements on Form N-2 (Reg. Nos. 333-147039,, 333-119625,, ~~333-125953~~) 333-125953) or the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC (File No. 814-00201).

EXHIBIT INDEX

Exhibit Number		Description

10.1		~~Twelfth~~Waiver and Thirteenth Amendment to Secured Revolving Credit Agreement Between MVC Capital, Inc. and Branch Banking and Trust Company

~~10.2~~ 31.1		~~First Amendment to Credit and Security Agreement~~

~~31.1~~		Rule 13a-14(a) Certifications.

32.1		Section 1350 Certifications.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by the undersigned, thereunto duly authorized.

	MVC ~~CAPITAL, INC.~~ Capital, Inc.

Date: June 9, 2020	/s/Michael Tokarz
	----------------------------------------------------
	Michael Tokarz

~~Date: September 6, 2019~~
	~~/s/ Michael Tokarz~~
	~~Michael Tokarz~~

	In the capacity of the officer who performs the functions of Principal Executive Officer.

	MVC Capital, Inc.

Date: June 9, 2020	/s/Scott Schuenke
	----------------------------------------------------
	Scott Schuenke

	~~MVC CAPITAL, INC.~~

~~Date: September 6, 2019~~
	~~/s/ Scott Schuenke~~
	~~Scott Schuenke~~

	In the capacity of the officer who performs the functions of Principal Financial Officer.

	For the Quarter			For the Quarter
	May 1, 2019 to			May 1, 2018 to
	July 31, 2019			July 31, 2018
Operating Income:
Dividend income
Affiliate investments (net of foreign taxes withheld of $0 and $59,405, respectively) *	$	—		$	467,100

Total dividend income	—			467,100

Payment-in-kind dividend income
Non-control/Non-affiliated investments	—			—

Total payment-in-kind dividend income	—			—

Interest income
Non-control/Non-affiliated investments	5,924,050			4,160,019
Affiliate investments	—			14,439
Control investments	109,618			105,135

Total interest income	6,033,668			4,279,593

Payment-in-kind/Deferred interest income
Non-control/Non-affiliated investments	899,710			806,603
Affiliate investments	140,621			175,031
Control investments	132,648			65,766

Total payment-in-kind/Deferred interest income	1,172,979			1,047,400

Fee income
Non-control/Non-affiliated investments	38,101			114,406

Total fee income	38,101			114,406

Fee income - Asset Management 1
Portfolio fees	119,248			149,156
Management fees	104,944			94,210

Total fee income - Asset Management	224,192			243,366

Total operating income	7,468,940			6,151,865

Operating Expenses:
Interest and other borrowing costs 2	2,510,677			2,402,894
Management fee	1,642,930			1,487,189
Audit & tax preparation fees	151,300			84,000
Consulting fees	334,519			257,000
Other expenses *	140,763			129,624
Legal fees	123,000			290,836
Directors’ fees	94,000			85,100
Portfolio fees - Asset Management 1	89,436			111,867
Management fee - Asset Management 1	78,708			70,657
Insurance	69,516			67,320
Administration	41,589			43,135
Public relations fees	26,000			36,120
Printing and postage	16,800			17,300
Net Incentive compensation (Note 11)	—			(1,316,475		)

Total operating expenses	5,319,238			3,766,567

Less: Voluntary expense waiver by Adviser 3	(37,500		)	(37,500		)
Less: Voluntary management fee waiver by Adviser 4	(616,099		)	(557,696		)

Total waivers	(653,599		)	(595,196		)

Net operating income before taxes	2,803,301			2,980,494

Tax Expenses:
Current tax expense	485			482

Total tax expense	485			482

Net operating income	2,802,816			2,980,012

Net Realized and Unrealized Gain (Loss) on Investments:

Net realized gain (loss) on investments
U.S. Treasury obligations	84,375			(95,355		)
Non-control/Non-affiliated investments	2,910			(257,077		)
Affiliate investments	(3,795,709		)	3,455,430
Control investments	(218,992		)	—
Foreign currency	11,733			(985		)

Total net realized gain (loss) on investments	(3,915,683		)	3,102,013

Net unrealized appreciation (depreciation) on investments	1,460,783			(11,951,877		)

Net realized and unrealized loss on investments	(2,454,900		)	(8,849,864		)

Net increase (decrease) in net assets resulting from operations	$	347,916		$	(5,869,852	)

Net increase (decrease) in net assets per share resulting from operations	$	0.02		$	(0.32	)

Dividends declared per share 5	$	0.150		$	0.150

Weighted average number of shares outstanding	17,725,118			18,820,528

												Accumulated		Net Unrealized
For the Nine Month Period November 1, 2017 to	Common			Additional			Accumulated		Dividends Paid			Net Realized		Appreciation			Treasury			Total Net
July 31, 2018 (Unaudited)	Stock			Paid-In-Capital			Earnings		to Stockholders			Gain (Loss)		(Depreciation)			Stock			Asset Value

Balances at October 31, 2017	$	283,044		$	418,208,458		$	122,455,573	$	(157,414,605	)	$	38,434,807	$	(70,965,264	)	$	(71,512,945	)	$	279,489,068

Net increase (decrease) resulting from operations	—			—			2,052,518		—			201,090		(10,567,061		)	—			(8,313,453		)
Distributions from Income	—			—			—		—			—		—			—			—
Distributions from return of capital	—			—			—		(8,469,238		)	—		—			—			(8,469,238		)
Issuance of common stock under dividend reinvestment plan	253,371			—			—		—			—		—			—			253,371
Repurchase of common stock under dividend reinvestment plan	(253,371		)	—			—		—			—		—			—			(253,371		)
Repurchase expenses	—			(100,513		)	—		—			—		—			—			(100,513		)
Repurchase of common stock	—			—			—		—			—		—			(24,999,989		)	(24,999,989		)

Balances at July 31, 2018	$	283,044		$	418,107,945		$	124,508,091	$	(165,883,843	)	$	38,635,897	$	(81,532,325	)	$	(96,512,934	)	$	237,605,875

For the Nine Month Period November 1, 2018 to
July 31, 2019(Unaudited)

Balances at October 31, 2018	$	283,044		$	408,583,787	$	135,596,655	$	(168,616,544	)	$	38,778,647	$	(85,459,198	)	$	(102,442,945	)	$	226,723,446

Net increase (decrease) resulting from operations	—			—		8,469,037		—			4,583,333		206,778			—			13,259,148
Distributions from Income	—			—		—		(7,997,773		)	—		—			—			(7,997,773		)
Issuance of common stock under dividend reinvestment plan	269,711			—		—		—			—		—			—			269,711
Repurchase of common stock under dividend reinvestment plan	(269,711		)	—		—		—			—		—			—			(269,711		)
Repurchase of common stock	—			—		—		—			—		—			(4,069,924		)	(4,069,924		)

Balances at July 31, 2019	$	283,044		$	408,583,787	$	144,065,692	$	(176,614,317	)	$	43,361,980	$	(85,252,420	)	$	(106,512,869	)	$	227,914,897

	For the Nine Month Period			For the Nine Month Period			For the
	November 1, 2018 to			November 1, 2017 to			Year Ended
	July 31, 2019			July 31, 2018			October 31, 2018
	(Unaudited)			(Unaudited)

Net asset value, beginning of period/year	$	12.46		$	13.24		$	13.24

Income from operations:
Net operating income (loss)	0.48			0.10			0.20
Net realized and unrealized gain (loss) on investments	0.27			(0.55		)	(0.75		)

Total gain (loss) from investment operations	0.75			(0.45		)	(0.55		)

Less distributions from:
Income	(0.45		)	—			(0.02		)
Realized gain	—			—			(0.13		)
Return of capital	—			(0.45		)	(0.45		)

Total distributions	(0.45		)	(0.45		)	(0.60		)

Capital share transactions
Anti-dilutive effect of share repurchase program	0.10			0.28			0.37

Total capital share transactions	0.10			0.28			0.37

Net asset value, end of period/year	$	12.86		$	12.62		$	12.46

Market value, end of period/year	$	9.57		$	9.38		$	9.05

Market discount	(25.58		)%	(25.67		)%	(27.37		)%

Total Return - At NAV (a)	6.91		%	(1.35		)%	(1.46		)%

Total Return - At Market (a)	10.94		%	(8.30		)%	(10.06		)%

Ratios and Supplemental Data:

Portfolio turnover ratio	10.04		%	6.10		%	7.21		%

Net assets, end of period/year (in thousands)	$	227,915		$	237,606		$	226,723

Ratios to average net assets:
Expenses including tax expense	8.32		%(c)	7.73		%(c)	7.70		%
Expenses excluding tax expense	8.32		%(c)	7.73		%(c)	7.70		%

Net operating income (loss) before tax expense	5.02		%(c)	1.08		%(c)	1.51		%
Net operating income (loss) after tax expense	5.02		%(c)	1.08		%(c)	1.51		%

Ratios to average net assets excluding waivers:
Expenses including tax expense	9.44		%(c)	8.56		%(c)	8.58		%
Expenses excluding tax expense	9.44		%(c)	8.56		%(c)	8.57		%

Net operating income (loss) before tax expense	3.90		%(c)	0.25		%(c)	0.63		%
Net operating income (loss) after tax expense	3.90		%(c)	0.25		%(c)	0.63		%

Company	Industry	Investment	Principal		Cost		Fair Value/Market Value

Non-control/Non-affiliated investments- 100.87% (a), (c), (f), (g)
Apex Industrial Technologies, LLC	Supply Chain Equipment Manufacturer	First Lien Loan 12.0000% Cash, 12/31/2019 (k), (n)	$	15,000,000	$	14,891,774	$	15,000,000
Array Information Technology, Inc.	Information Technology Products and Services	Second Lien Loan 12.0000% Cash, 4.0000% PIK, 10/03/2023 (b), (k), (n), (p)	6,196,094		6,106,983		6,258,040
		Warrants (d), (n)	1		—		—
					6,106,983		6,258,040
Black Diamond Equipment Rentals, LLC	Equipment Rental	Second Lien Loan 12.5000% Cash, 06/27/2022 (k), (n)	7,500,000		7,144,062		7,575,000
		Warrants (d), (n)	1		400,847		952,000
					7,544,909		8,527,000
Custom Alloy Corporation	Manufacturer of Pipe Fittings and Forgings	Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b), (k), (n)	32,471,814		32,471,814		32,143,980
		Second Lien Loan 12.0000% Cash, 3.0000% PIK, 04/30/2022 (b), (k), (n)	6,128,187		6,128,187		6,066,316
		Revolver 12.0000% Cash, 3.0000% PIK, 04/30/2020 (b), (k), (n)	800,000		800,000		800,000
					39,400,001		39,010,296
Dukane IAS,LLC	Welding Equipment Manufacturer	Second Lien Note 10.5000% Cash, 2.5000% PIK, 11/17/2020 (b), (k), (n)	4,460,683		4,422,486		4,515,007
Essner Manufacturing, LP	Defense/Aerospace Parts Manufacturing	First Lien Loan 11.5000% Cash, 12/20/2022 (k), (n), (o)	3,588,607		3,540,073		3,588,607
FOLIOfn, Inc.	Technology Investment - Financial Services	Preferred Stock (5,802,259 shares) (d), (i), (n)			15,000,000		5,783,000
GTM Intermediate Holdings, Inc.	Medical Equipment/Manufacturer	Second Lien Loan 11.0000% Cash, 1.0000% PIK, 12/7/2024 (b), (k), (n)	5,051,161		4,956,057		5,051,161
		Common Stock (2 shares) (d), (n), (t)			766,122		766,122
					5,722,179		5,817,283
Highpoint Global LLC	Government Services	Second Lien Note 12.0000% Cash, 2.0000% PIK, 09/30/2022 (b), (k), (n)	5,174,783		5,110,825		5,174,784
HTI Technologies and Industries, Inc.	Electronic Component Manufacturing	Second Lien Note 12.0000% Cash, 3.7500% PIK, 9/15/2024 (b), (k), (n)	11,313,881		11,294,050		11,313,881
Initials, Inc.	Consumer Products	Senior Subordinated Debt 8.0000% Cash, 7.0000% PIK, 06/23/2020 (b), (h), (k), (n)	5,642,913		5,642,913		1,987,512
International Precision Components Corporation	Plastic Injection Molding	Second Lien Loan 12.0000% Cash, 3.5000% PIK, 10/3/2024 (b), (k), (n), (u)	8,000,000		7,846,731		8,000,000
Jedson Engineering, Inc.	Engineering and Construction Management	First Lien Loan 12.0000% Cash, 3.0000% PIK, 06/21/2024 (b), (k), (n)	6,001,500		5,882,852		6,001,500
Legal Solutions Holdings, Inc.	Business Services	Senior Subordinated Debt 12.0000% Cash, 4.0000% PIK, 03/18/2020 (b), (k), (n)	12,090,053		12,090,053		12,090,053
Morey’s Seafood International, LLC	Food Services	Second Lien Loan 10.0000% Cash, 3.0000% PIK, 08/12/2022 (b), (k), (n), (q)	16,361,251		16,361,251		16,361,251
Powers Equipment Acquisition Company, LLC	Equipment Manufacturer	First Lien Note 13.500% Cash, 04/30/2024 (k), (n), (v)	6,500,000		6,376,550		6,500,000
SMA Holdings, Inc.	Consulting	First Lien Loan 11.0000% Cash, 06/26/2024 (k), (n)	7,000,000		6,395,594		6,505,387
		Warrants (d), (n)	2		504,555		504,555
					6,900,149		7,009,942
Tin Roof Software, LLC	Software	Second Lien Loan 11.0000% Cash, 3.5000% PIK, 04/01/2024 (b), (k), (n)	3,750,000		3,687,550		3,750,000
Trientis GmbH	Environmental Services	First Lien Note 5.0000% PIK, 10/26/2024 (b), (e), (h), (m), (n), (r)	1,248,632		1,248,632		263,034
		Warrants (d), (e), (r), (n)	1		67,715		—
					1,316,347		263,034
Tuf-Tug Inc.	Safety Equipment Manufacturer	Second Lien Loan 11.0000% Cash, 2.0000% PIK, 02/24/2024 (b), (k), (n)	4,959,890		4,919,436		4,959,890
		Common Stock (24.6 shares) (d), (n), (s)			750,000		750,000
					5,669,436		5,709,890
Turf Products, LLC	Distributor - Landscaping and Irrigation Equipment	Senior Subordinated Debt 10.0000% Cash, 08/07/2020 (k), (n)	7,717,056		7,717,056		7,502,063
		Third Lien Loan 10.0000% Cash, 08/07/2020 (k), (n)	1,120,000		1,120,000		1,094,447
					8,837,056		8,596,510
U.S. Gas & Electric, Inc.	Energy Services	Second Lien Loan, 9.5000% Cash, 07/05/2025 (l), (n)	37,527,881		37,527,881		37,831,128
U.S. Spray Drying Holding Company	Specialty Chemicals	Class B Common Stock (784 shares) (d), (n)			5,488,000		2,300,000
		Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)	1,500,000		1,500,000		1,500,000
		Senior Secured Loan 12.0000% Cash, 04/30/2021 (k), (n)	1,500,000		1,500,000		1,500,000
					8,488,000		5,300,000
United States Technologies, Inc.	Electronics Manufacturing and Repair	Senior Lien Loan 10.5000% Cash, 07/17/2020 (k), (n)	5,500,000		5,497,273		5,500,000

Sub Total Non-control/Non-affiliated investments					$	245,157,322	$	229,888,718

Affiliate investments - 24.72% (a), (c), (f), (g)
Advantage Insurance, Inc.	Insurance	Preferred Stock (750,000 shares) (d), (e), (n)			7,500,000		7,917,096
JSC Tekers Holdings	Real Estate Management	Common Stock (3,201 shares) (d), (e), (n)			4,500		—
		Preferred Stock (9,159,085 shares) (d), (e), (n)			11,810,188		4,173,000
					11,814,688		4,173,000
MVC Environmental, Inc.	Environmental Services	Senior Secured Loan 9.0000% PIK, 12/22/2020 (b), (h), (k), (n)	6,869,353		6,869,353		—
		Common Stock (980 shares) (d), (n)			6,063,038		—
					12,932,391		—
Security Holdings B.V.	Electrical Engineering	Common Equity Interest (d), (e), (n)			51,204,270		33,930,000
		Bridge Loan 5.0000% PIK, 12/31/2019 (b), (e), (k), (n)	4,937,218		4,937,218		4,937,218
		Senior Subordinated Loan 4.5000% PIK, 05/31/2020 (b), (e), (k), (n)	5,395,442		5,395,442		5,395,442
					61,536,930		44,262,660

Sub Total Affiliate investments					$	93,784,009	$	56,352,756

	•	*Level 1:* Level 1 inputs are unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We use Level 1 inputs for investments in publicly traded unrestricted securities for which we do not have a controlling interest. Such investments are valued at the closing price on the measurement date. We valued one of our investments using Level 1 inputs as of April 30, 2020.

	•	*Level 2:* Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly or other inputs that are observable or can be corroborated by observable market data.

	•	*Level 3:* Level 3 inputs are unobservable and cannot be corroborated by observable market data. We use Level 3 inputs for measuring the fair value of the vast majority of our investments. See Note 6 “Investment Valuation Policy” for the investment valuation policies used to determine the fair value of these investments.

	Balances, November 1, 2018			Realized Gains (Losses) (1)		Reversal of Prior Year (Appreciation) Depreciation on Realization (2)		Unrealized Appreciation (Depreciation) (3)			Purchases (4)		Sales (5)			Transfers In & Out of Level 3		Balances, July 31, 2019			Total Loss for the year Included in Earnings Attibutable to the Change in Unrealized Appreciation (Depreciation) on Investments held as of July 31, 2019
Senior/Subordinated Loans and credit facilities	$	175,781		$	—	$	—	$	(3,001	)	$	77,792	$	(8,906	)	$	—	$	241,666		$	(3,001	)
Common Stock	6,150			—		—		(3,100		)	766		—			—		3,816			(3,100		)
Preferred Stock	47,060			3,223		276		638			2,591		(32,472		)	—		21,316			638
Warrants	401			—		—		551			505		—			—		1,457			551
Common Equity Interest	50,186			—		—		3,019			—		—			—		53,205			3,019
Guarantees and letters of credit	(2,867		)	—		2,399		(381		)	—		—			—		(849		)	(381		)
Escrow Receivable	969			116		—		—			—		—			—		1,085			—
Total	$	277,680		$	3,339	$	2,675	$	(2,274	)	$	81,654	$	(41,378	)	$	—	$	321,696		$	(2,274	)

	MVC			MVCFS			Consolidated

Interest and dividend income	$	21,756,121		$	17,968		$	21,774,089
Fee income	50,001			39,298			89,299
Fee income - asset management	—			640,157			640,157
Total operating income	21,806,122			697,423			22,503,545

Total operating expenses	15,085,083			840,300			15,925,383
Less: Waivers by Adviser	(1,747,998		)	(144,324		)	(1,892,322		)
Total net operating expenses	13,337,085			695,976			14,033,061

Net operating income before taxes	8,469,037			1,447			8,470,484

Tax expense	—			1,447			1,447
Net operating income	8,469,037			—			8,469,037

Net realized gain on investments	4,458,666			124,667			4,583,333
Net unrealized appreciation (depreciation) on investments	347,667			(140,889		)	206,778

Net increase (decrease) in net assets resulting from operations	$	13,275,370		$	(16,222	)	$	13,259,148

Guarantee	Amount Committed		Amount Funded as of ~~July 31, 2019~~ April 30, 2020
MVC Automotive	$ 4.0 million	~~3.5 million~~	— -
Total	$ 4.0 million	~~3.5 million~~	— -

Guarantee	Amount Committed		Amount Funded as of October 31, ~~2018~~2019
MVC Automotive	$ 4.0 million	~~6.2 million~~	— -
~~RuMe~~ Total	$ 4.0 million	~~1.0 million~~	— -
~~Total~~	$	~~7.2 million~~	—