UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

Form 10-Q

____________________________________________________



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

For the Quarterly Period Ended ~~June~~September 30, 2019



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

For the transition period from to

Commission file number: 814-00924

_____________________________________________________

Sierra Income Corporation

(Exact Name of Registrant as Specified in its Charter)

_____________________________________________________



Maryland		45-2544432
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
280 Park Avenue, 6th Floor East, New York, NY 10017
(Address of Principal Executive Offices)

(212) 759-0777

(Registrant’s Telephone Number, Including Area Code)

___________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

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. Yes x 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes o No o

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



Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer (Do not check if a smaller reporting company)	x	Smaller reporting company	o
Emerging growth company	o

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 o No x

As of ~~August~~November 14, 2019, the Registrant had ~~100,796,249~~101,684,286 shares of common stock, $0.001 par value, outstanding.

TABLE OF CONTENTS



Part I. Financial Information
Item 1. Financial Statements	F-1
Consolidated Statements of Assets and Liabilities as of ~~June~~September 30, 2019 (unaudited) and December 31, 2018	F-1
Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 (unaudited)	F-2
Consolidated Statements of Changes in Net Assets for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 (unaudited)	F-3
Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 (unaudited)	F-4
Consolidated Schedule of Investments as of ~~June~~September 30, 2019 (unaudited)	F-5
Consolidated Schedule of Investments as of December 31, 2018	F-13
Notes to Consolidated Financial Statements (unaudited)	F-22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3. Quantitative and Qualitative Disclosures About Market Risk	213
Item 4. Controls and Procedures	234
Part II. Other Information
Item 1. Legal Proceedings	234
Item 1A. Risk Factors	256
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	268
Item 3. Defaults Upon Senior Securities	278
Item 4. Mine Safety Disclosures	278
Item 5. Other Information	278
Item 6. Exhibits	278
SIGNATURES	2910

Sierra Income Corporation

Consolidated Statements of Assets and Liabilities


	June 30, 2019			December 31, 2018			September 30, 2019			December 31, 2018
ASSETS	(unaudited)						(unaudited)
Investments at fair value
Non-controlled/non-affiliated investments (amortized cost of $714,454,593 and $819,032,531, respectively)	$	663,283,003		$	758,474,260
Controlled/affiliated investments (amortized cost of $186,820,930 and $186,634,331, respectively)	141,739,028			165,006,502
Non-controlled/non-affiliated investments (amortized cost of $690,478,114 and $819,032,531, respectively)							$	618,427,718		$	758,474,260
Controlled/affiliated investments (amortized cost of $147,131,998 and $186,634,331, respectively)							118,522,939			165,006,502
Investments at fair value	805,022,031			923,480,762			736,950,657			923,480,762
Cash and cash equivalents	161,214,258			59,481,495			192,205,852			59,481,495
Deferred transaction costs (Note 2)	11,280,858			7,052,691			13,558,259			7,052,691
Interest receivable from non-controlled/non-affiliated investments	9,037,707			9,154,364			9,132,494			9,154,364
Prepaid expenses and other assets	425,345			627,418			273,262			627,418
Unsettled trades receivable	310,116			2,339,547			810,902			2,339,547
Cash collateral on total return swap (Note 5)							1,216			27,000,000
Receivable due on total return swap (Note 5)	4,284			113,252			—			113,252
Cash collateral on total return swap (Note 5)	1,208			27,000,000
Interest receivable from controlled/affiliated investments	—			382,121			—			382,121
Total assets	$	987,295,807		$	1,029,631,650		$	952,932,642		$	1,029,631,650

LIABILITIES
Revolving credit facilities payable (net of deferred financing costs of $2,631,660 and $3,460,986, respectively) (Note 6)	$	325,468,340		$	351,539,014
Revolving credit facilities payable (net of deferred financing costs of $2,660,252 and $3,460,986, respectively) (Note 6)							$	325,439,748		$	351,539,014
Unsettled trades payable	9,651,373			—			7,292,149			—
Base management fees payable (Note 7)	4,335,538			4,491,234			4,180,333			4,491,234
Taxes Payable	3,236,233			—
Interest payable	1,808,346			1,834,739			1,660,599			1,834,739
Accounts payable and accrued expenses	1,116,898			2,073,169			1,437,059			2,073,169
Administrator fees payable (Note 7)							998,134			689,711
Transaction costs payable	706,182			398,680			871,031			398,680
Administrator fees payable (Note 7)	536,352			689,711
Deferred tax liability							442,842			—
Unrealized depreciation on total return swap (Note 5)	—			6,524,904			—			6,524,904
Total liabilities	$	346,859,262		$	367,551,451		$	342,321,895		$	367,551,451

Commitments (Note 11)

NET ASSETS
Common shares, par value $0.001 per share, 250,000,000 common shares authorized, 100,462,586 and 98,502,907 common shares issued and outstanding, respectively	$	100,463		$	98,503
Common shares, par value $0.001 per share, 250,000,000 common shares authorized, 101,330,757 and 98,502,907 common shares issued and outstanding, respectively							$	101,331		$	98,503
Capital in excess of par value	870,982,780			858,699,757			876,082,679			858,699,757
Total distributable earnings/(loss)	(230,646,698		)	(196,718,061		)	(265,573,263		)	(196,718,061		)
Total net assets	640,436,545			662,080,199			610,610,747			662,080,199
Total liabilities and net assets	$	987,295,807		$	1,029,631,650		$	952,932,642		$	1,029,631,650
NET ASSET VALUE PER COMMON SHARE	$	6.37		$	6.72		$	6.03		$	6.72

See accompanying notes to consolidated financial statements.

Sierra Income Corporation

Consolidated Statements of Operations


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
INVESTMENT INCOME	(unaudited)			(unaudited)						(unaudited)			(unaudited)			(unaudited)						(unaudited)
Interest and dividends from investments
Non-controlled/non-affiliated investments:
Cash	$	16,569,132		$	20,570,784		$	33,327,130		$	41,251,531		$	13,472,014		$	18,589,227		$	46,799,144		$	60,443,983
Payment-in-kind	835,808			303,893			1,623,405			576,517			1,054,823			305,284			2,678,228			881,801
Controlled/affiliated investments:
Cash	3,364,610			2,522,757			5,605,882			4,885,199			2,119,902			3,462,502			7,725,784			7,744,476
Payment-in-kind	393,113			490,883			696,674			867,382			762,611			617,645			1,459,285			1,485,027
Total interest and dividend income	21,162,663			23,888,317			41,253,091			47,580,629			17,409,350			22,974,658			58,662,441			70,555,287
Fee income (Note 12)	2,395,376			947,466			2,929,886			1,592,141			339,621			1,388,794			3,269,507			2,980,935
Interest from cash and cash equivalents	348,524			55,100			634,046			78,153			411,854			113,670			1,045,900			191,823
Total investment income	23,906,563			24,890,883			44,817,023			49,250,923			18,160,825			24,477,122			62,977,848			73,728,045
EXPENSES
Interest and financing expenses	5,235,234			5,219,779			10,665,467			10,392,209			5,078,781			5,453,365			15,744,248			15,845,574
Base management fees (Note 7)	4,335,538			4,834,495			8,777,628			9,838,311			4,180,333			4,681,915			12,957,961			14,520,226
General and administrative expenses	1,578,495			1,216,840			2,519,993			2,641,958			1,556,514			1,053,799			4,076,507			3,695,757
Administrator expenses (Note 7)	536,352			758,178			1,158,423			1,481,713			998,134			527,752			2,156,557			2,009,465
Professional fees	357,888			413,143			1,005,455			750,689			407,094			611,571			1,412,549			1,362,260
Incentive Fees (Note 7)													176,061			446,703			176,061			446,703
Offering costs	3,528			187,736			35,836			470,986			6,322			(655,352		)	42,158			(184,366		)
Total expenses	12,047,035			12,630,171			24,162,802			25,575,866			12,403,239			12,119,753			36,566,041			37,695,619
NET INVESTMENT INCOME	11,859,528			12,260,712			20,654,221			23,675,057			5,757,586			12,357,369			26,411,807			36,032,426
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) from non-controlled/non-affiliated investments	(7,670,130		)	909,846			(9,699,366		)	(31,271,252		)	99,549			(19,352,081		)	(9,599,817		)	(50,623,333		)
Net realized gain/(loss) from controlled/affiliated investments (net of taxes of $4,064,844 )	9,150,067			—			3,770,443			—
Net realized gain/(loss) from controlled/affiliated investments (net of taxes of $2,828,611)													(19,820,718		)	7,969			(16,050,275		)	7,969
Net realized gain/(loss) on total return swap (Note 5)	(146,781		)	(1,043,675		)	(9,323,516		)	434,947			—			1,099,536			(9,323,516		)	1,534,483
Net change in unrealized appreciation/(depreciation) on non-controlled/non-affiliated investments	(6,458,459		)	(14,252,484		)	9,386,681			8,813,872			(20,878,806		)	2,156,903			(11,492,125		)	10,970,775
Net change in unrealized appreciation/(depreciation) on controlled/affiliated investments	(26,618,604		)	(2,837,785		)	(23,454,073		)	(10,705,907		)	16,472,843			(2,329,948		)	(6,981,230		)	(13,035,855		)
Net change in unrealized appreciation/(depreciation) on total return swap (Note 5)	(144,311		)	(306,714		)	6,524,904			2,634,655			—			735,874			6,524,904			3,370,529
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments	2,974,612			(57,177		)	—			78,278			(442,842		)	(381,726		)	(442,842		)	(303,448		)
Net realized and unrealized gain/(loss) on investments	(28,913,606		)	(17,587,989		)	(22,794,927		)	(30,015,407		)	(24,569,974		)	(18,063,473		)	(47,364,901		)	(48,078,880		)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(17,054,078	)	$	(5,327,277	)	$	(2,140,706	)	$	(6,340,350	)	$	(18,812,388	)	$	(5,706,104	)	$	(20,953,094	)	$	(12,046,454	)
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	(0.17	)	$	(0.05	)	$	(0.02	)	$	(0.07	)	$	(0.19	)	$	(0.06	)	$	(0.21	)	$	(0.12	)
WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE	$	0.12		$	0.13		$	0.21		$	0.24		$	0.06		$	0.13		$	0.26		$	0.37
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED (NOTE 10)	100,135,004			97,385,971			99,649,414			97,190,689			101,035,420			97,047,494			100,116,493			97,142,433
DISTRIBUTIONS DECLARED PER COMMON SHARE	$	0.16		$	0.16		$	0.32		$	0.32		$	0.16		$	0.16		$	0.48		$	0.48

See accompanying notes to the consolidated financial statements.

Sierra Income Corporation

Consolidated Statements of Changes in Net Assets


	Common Stock					Paid in Capital			Distributable			Total			Common Stock					Paid in Capital			Distributable			Total
	Shares		Par Amount			in Excess of Par			Earnings			Net Assets			Shares		Par Amount			in Excess of Par			Earnings			Net Assets
Balance at March 31, 2019	99,485,633		99,486			$	864,886,848		$	(197,619,611	)	$	667,366,723
Balance at June 30, 2019															100,462,586		100,463			$	870,982,780		$	(230,646,698	)	$	640,436,545
Net increase/(decrease) in net assets resulting from operations:
Net investment income	—		—			—			11,859,528			11,859,528			—		—			—			5,757,586			5,757,586
Net realized gain/(loss) on investments	—		—			—			1,479,937			1,479,937			—		—			—			(19,721,169		)	(19,721,169		)
Net realized gain/(loss) on total return swap (Note 5)	—		—			—			(146,781		)	(146,781		)	—		—			—			—			—
Net change in unrealized appreciation/(depreciation) on investments	—		—			—			(33,077,063		)	(33,077,063		)	—		—			—			(4,405,963		)	(4,405,963		)
Net change in unrealized appreciation/(depreciation) on total return swap (Note 5)	—		—			—			(144,311		)	(144,311		)	—		—			—			—			—
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments	—		—			—			2,974,612			2,974,612			—		—			—			(442,842		)	(442,842		)
Shareholder distributions:
Issuance of common shares pursuant to distribution reinvestment plan	976,953		977			6,095,932			—			6,096,909			1,012,527		1,012			6,019,307			—			6,020,319
Repurchase of common shares															(144,356	)	(144		)	(919,408		)	—			(919,552		)
Distributions from earnings	—		—			—			(15,973,009		)	(15,973,009		)	—		—			—			(16,114,177		)	(16,114,177		)
Total increase/(decrease) for the three months ended June 30, 2019	976,953		977			6,095,932			(33,027,087		)	(26,930,178		)
Balance at June 30, 2019	100,462,586		100,463			$	870,982,780		$	(230,646,698	)	$	640,436,545
Total increase/(decrease) for the three months ended September 30, 2019															868,171		868			5,099,899			(34,926,565		)	(29,825,798		)
Balance at September 30, 2019															101,330,757		101,331			$	876,082,679		$	(265,573,263	)	$	610,610,747
Balance at December 31, 2018	98,502,907		98,503			$	858,699,757		$	(196,718,061	)	$	662,080,199		98,502,907		98,503			$	858,699,757		$	(196,718,061	)	$	662,080,199
Net increase/(decrease) in net assets resulting from operations:
Net investment income	—		—			—			20,654,221			20,654,221			—		—			—			26,411,807			26,411,807
Net realized gain/(loss) on investments	—		—			—			(5,928,923		)	(5,928,923		)	—		—			—			(25,650,092		)	(25,650,092		)
Net realized gain/(loss) on total return swap (Note 5)	—		—			—			(9,323,516		)	(9,323,516		)	—		—			—			(9,323,516		)	(9,323,516		)
Net change in unrealized appreciation/(depreciation) on investments	—		—			—			(14,067,392		)	(14,067,392		)	—		—			—			(18,473,355		)	(18,473,355		)
Net change in unrealized appreciation/(depreciation) on total return swap (Note 5)	—		—			—			6,524,904			6,524,904			—		—			—			6,524,904			6,524,904
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments	—		—			—			—			—			—		—			—			(442,842		)	(442,842		)
Shareholder distributions:
Issuance of common shares pursuant to distribution reinvestment plan	1,959,679		1,960			12,283,023			—			12,284,983			2,972,206		2,972			18,302,330			—			18,305,302
Repurchase of common shares															(144,356	)	(144		)	(919,408		)	—			(919,552		)
Distributions from earnings	—		—			—			(31,787,931		)	(31,787,931		)	—		—			—			(47,902,108		)	(47,902,108		)
Total increase/(decrease) for the six months ended June 30, 2019	1,959,679		1,960			12,283,023			(33,928,637		)	(21,643,654		)
Balance at June 30, 2019	100,462,586		100,463			$	870,982,780		$	(230,646,698	)	$	640,436,545
Balance at March 31, 2018	97,578,798		97,579			$	850,980,124		$	(120,235,840	)	$	730,841,863
Total increase/(decrease) for the nine months ended September 30, 2019															2,827,850		2,828			17,382,922			(68,855,202		)	(51,469,452		)
Balance at September 30, 2019															101,330,757		101,331			$	876,082,679		$	(265,573,263	)	$	610,610,747
Balance at June 30, 2018															96,784,857		96,785			$	844,995,420		$	(141,119,029	)	$	703,973,176
Net increase/(decrease) in net assets resulting from operations:
Net investment income	—		—			—			12,260,712			12,260,712			—		—			—			12,357,369			12,357,369
Net realized gain/(loss) on investments	—		—			—			909,846			909,846			—		—			—			(19,344,112		)	(19,344,112		)
Net realized gain/(loss) on total return swap (Note 5)	—		—			—			(1,043,675		)	(1,043,675		)	—		—			—			1,099,536			1,099,536
Net change in unrealized appreciation/(depreciation) on investments	—		—			—			(17,090,269		)	(17,090,269		)	—		—			—			(173,045		)	(173,045		)
Net change in unrealized appreciation/(depreciation) on total return swap (Note 5)	—		—			—			(306,714		)	(306,714		)	—		—			—			735,874			735,874
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments	—		—			—			(57,177		)	(57,177		)	—		—			—			(381,726		)	(381,726		)
Shareholder distributions:
Issuance of common shares, net of underwriting costs	135,832		136			1,030,134			—			1,030,270			153		—			1,158			—			1,158
Issuance of common shares pursuant to distribution reinvestment plan	855,311		855			6,505,803			—			6,506,658			930,435		930			6,373,674			—			6,374,604
Repurchase of common shares	(1,785,084	)	(1,785		)	(13,520,641		)	—			(13,522,426		)	(168,845	)	(169		)	(1,264,478		)	—			(1,264,647		)
Distributions from earnings	—		—			—			(15,555,912		)	(15,555,912		)	—		—			—			(15,515,973		)	(15,515,973		)
Total increase/(decrease) for the three months ended June 30, 2018	(793,941	)	(794		)	(5,984,704		)	(20,883,189		)	(26,868,687		)
Balance at June 30, 2018	96,784,857		96,785			$	844,995,420		$	(141,119,029	)	$	703,973,176
Total increase/(decrease) for the three months ended September 30, 2018															761,743		761			5,110,354			(21,222,077		)	(16,110,962		)
Balance at September 30, 2018															97,546,600		97,546			$	850,105,774		$	(162,341,106	)	$	687,862,214
Balance at December 31, 2017	96,620,231		$	96,620		$	843,592,066		$	(103,702,117	)	$	739,986,569		96,620,231		$	96,620		$	843,592,066		$	(103,702,117	)	$	739,986,569
Net increase/(decrease) in net assets resulting from operations:
Net investment income	—		—			—			23,675,057			23,675,057			—		—			—			36,032,426			36,032,426
Net realized gain/(loss) on investments	—		—			—			(31,271,252		)	(31,271,252		)	—		—			—			(50,615,364		)	(50,615,364		)
Net realized gain/(loss) on total return swap (Note 5)	—		—			—			434,947			434,947			—		—			—			1,534,483			1,534,483
Net change in unrealized appreciation/(depreciation) on investments	—		—			—			(1,892,035		)	(1,892,035		)	—		—			—			(2,065,080		)	(2,065,080		)
Net change in unrealized appreciation/(depreciation) on total return swap (Note 5)	—		—			—			2,634,655			2,634,655			—		—			—			3,370,529			3,370,529
Change in provision for deferred taxes on unrealized appreciation/(depreciation) on investments	—		—			—			78,278			78,278			—		—			—			(303,448		)	(303,448		)
Shareholder distributions:
Issuance of common shares, net of underwriting costs	323,587		324			2,478,121			—			2,478,445			323,740		324			2,479,279			—			2,479,603
Issuance of common shares pursuant to distribution reinvestment plan	1,721,015		1,721			13,172,650			—			13,174,371			2,651,450		2,651			19,546,324			—			19,548,975
Repurchase of common shares	(1,879,976	)	(1,880		)	(14,247,417		)	—			(14,249,297		)	(2,048,821	)	(2,049		)	(15,511,895		)	—			(15,513,944		)
Distributions from earnings	—		—			—			(31,076,562		)	(31,076,562		)	—		—			—			(46,592,535		)	(46,592,535		)
Total increase/(decrease) for the six months ended June 30, 2018	164,626		165			1,403,354			(37,416,912		)	(36,013,393		)
Balance at June 30, 2018	96,784,857		$	96,785		$	844,995,420		$	(141,119,029	)	$	703,973,176
Total increase/(decrease) for the nine months ended September 30, 2018															926,369		926			6,513,708			(58,638,989		)	(52,124,355		)
Balance at September 30, 2018															97,546,600		$	97,546		$	850,105,774		$	(162,341,106	)	$	687,862,214

See accompanying notes to consolidated financial statements.

Sierra Income Corporation

Consolidated Statements of Cash Flows


	Six Months Ended June 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:	$	(2,140,706	)	$	(6,340,350	)	$	(20,953,094	)	$	(12,046,454	)
ADJUSTMENT TO RECONCILE NET INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES:
Payment-in-kind interest income	(2,320,079		)	(1,443,899		)	(4,137,513		)	(2,366,828		)
Net amortization of premium on investments	(1,149,608		)	(998,023		)	(1,260,667		)	(1,380,312		)
Amortization of deferred financing costs	969,326			942,636			1,447,271			1,421,683
Net realized (gain)/loss on investments	5,928,923			31,271,252			25,650,096			50,615,364
Net change in unrealized (appreciation)/depreciation on investments	14,067,392			1,892,035			18,473,355			2,065,080
Net change in unrealized (appreciation)/depreciation on total return swap (Note 5)	(6,524,904		)	(2,634,655		)	(6,524,904		)	(3,370,529		)
Purchases and originations	(121,610,735		)	(122,795,043		)	(191,474,286		)	(184,162,170		)
Proceeds from sale of investments and principal repayments	223,542,838			164,772,739			339,279,120			231,634,105
(Increase)/decrease in operating assets:
Unsettled trades receivable	2,029,431			(1,914,446		)	1,528,645			(820,514		)
Interest receivable from non-controlled/non-affiliated investments	116,657			(469,280		)	21,870			(339,588		)
Interest receivable from controlled/affiliated investments	382,121			306,871			382,121			(97,924		)
Receivable for Company shares sold	—			235,060			—			234,700
Receivable due on total return swap (Note 5)	108,968			(25,556		)	113,252			458,828
Deferred transaction costs	(4,228,167		)	—			(6,505,568		)	(4,974,094		)
Prepaid expenses and other assets	202,073			(121,454		)	354,156			(787,646		)
Increase/(decrease) in operating liabilities:
Unsettled trades payable	9,651,373			195,517			7,292,149			(308,233		)
Taxes Payable	3,236,233			—			442,842			—
Management fee payable	(155,696		)	(362,503		)	(310,901		)	(515,082		)
Transaction costs payable	307,502			—			472,351			2,492,529
Accounts payable and accrued expenses	(956,271		)	(429,982		)	(636,110		)	131,025
Payable due from total return swap (Note 5)	—			—
Incentive fees payable	—			(2,827,372		)	—			(2,380,669		)
Administrator fees payable	(153,359		)	62,400			308,423			(168,024		)
Interest payable	(26,393		)	(70,462		)	(174,140		)	(163,624		)
Deferred tax liability	—			(78,277		)	—			303,449
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES	121,276,919			59,167,208			163,788,468			75,475,072
Cash flows from financing activities:
Borrowings under revolving credit facility	—			38,000,000			—			48,000,000
Repayments of revolving credit facility	(26,900,000		)	(88,000,000		)	(26,900,000		)	(113,000,000		)
Proceeds from issuance of common stock, net of underwriting costs	—			2,478,445			—			2,479,603
Payment of cash distributions	(19,502,948		)	(17,902,191		)	(29,596,806		)	(27,043,560		)
Financing costs paid	(140,000		)	(37,500		)	(646,537		)	(56,249		)
Repurchase of common shares	—			(7,582,843		)	(919,552		)	(15,513,944		)
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES	(46,542,948		)	(73,044,089		)	(58,062,895		)	(105,134,150		)
TOTAL INCREASE/(DECREASE) IN CASH	74,733,971			(13,876,881		)	105,725,573			(29,659,078		)
CASH, CASH EQUIVALENTS AND CASH COLLATERAL ON TOTAL RETURN SWAP AT BEGINNING OF PERIOD	86,481,495			112,909,759			86,481,495			112,909,759
CASH, CASH EQUIVALENTS AND CASH COLLATERAL ON TOTAL RETURN SWAP AT END OF PERIOD ⁽¹⁾	$	161,215,466		$	99,032,878		$	192,207,068		$	83,250,681
Supplemental Information:
Cash paid during the period for interest	$	9,722,533		$	9,520,035		$	14,471,117		$	14,587,515
Supplemental non-cash information:
Non-cash purchase of investments	$	15,557,064		$	20,928,063		$	20,819,610		$	27,616,168
Non-cash sale of investments	15,557,064			20,928,063			20,819,610			27,616,168
Payment-in-kind interest income	2,320,079			1,443,899			4,137,513			2,366,828
Amortization of deferred financing costs	969,327			942,636			1,447,271			1,421,683
Net amortization of premium on investments	1,149,608			998,023			1,260,667			1,380,312
Issuance of common shares in connection with distribution reinvestment plan	$	12,284,983		$	13,174,371		$	18,305,302		$	19,548,975


(1)	Includes cash and cash equivalents of ~~$161,214,258~~$192,205,852 and ~~$44,690,925~~$38,250,000 and cash collateral on total return swap of ~~$1,208~~$1,216 and ~~$44,000,000~~$45,000,000 as of ~~June~~September 30, 2019 and 2018, respectively.

See accompanying notes to consolidated financial statements.

Sierra Income Corporation

Consolidated Schedule of Investments

As of ~~June~~September 30, 2019

(unaudited)


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value		% of Net Assets⁽³⁾			Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value		% of Net Assets⁽³⁾
Non-controlled/non-affiliated investments – 103.6%										$	640,436,545
Non-controlled/non-affiliated investments – 101.3%												Non-controlled/non-affiliated investments – 101.3%										$	610,610,747
AAAHI Acquisition Corporation	Transportation: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(4)(5)(6)	12/10/2023	$	7,003,198	$	7,003,197	$	6,930,181	1.1%			Transportation: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(4)(5)(6)	12/10/2023	$	6,984,666	$	6,984,666	$	6,833,805	1.1%
				7,003,198		7,003,197		6,930,181								6,984,666		6,984,666		6,833,805
Alpine SG, LLC	High Tech Industries	Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	11/16/2022	6,617,630		6,617,630		6,563,366		1.0%			High Tech Industries	Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	11/16/2022	6,617,630		6,617,630		6,563,366		1.1%
		Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ^(5)(6)(7)	11/16/2022	13,398,750		13,398,750		13,288,880		2.1%				Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ^(5)(6)(7)	11/16/2022	13,398,750		13,398,750		13,288,880		2.2%
				20,016,380		20,016,380		19,852,246								20,016,380		20,016,380		19,852,246
American Dental Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/25/2023	4,893,750		4,893,750		4,767,981		0.7%			Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/25/2023	4,893,750		4,893,750		4,767,981		0.8%
				4,893,750		4,893,750		4,767,981								4,893,750		4,893,750		4,767,981
Amerijet Holdings, Inc.	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/15/2021	11,102,205		11,102,205		11,051,135		1.7%			Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/15/2021	10,895,955		10,895,955		10,863,267		1.8%
				11,102,205		11,102,205		11,051,135								10,895,955		10,895,955		10,863,267
AMMC CLO 22, Limited Series 2018-22A	Multi-Sector Holdings	Subordinated Notes 11.693% effective yield ^(8)(9)(10)	4/25/2031	7,222,000		5,958,183		5,828,876		0.9%			Multi-Sector Holdings	Subordinated Notes 11.866% effective yield ^(8)(9)(10)	4/25/2031	7,222,000		5,850,557		5,602,604		0.9%
				7,222,000		5,958,183		5,828,876								7,222,000		5,850,557		5,602,604
Answers Finance, LLC	High Tech Industries	Common Stock - 389,533 shares⁽¹¹⁾		—		5,426,955		1,188,076		0.2%			High Tech Industries	Common Stock - 389,533 shares⁽¹¹⁾		—		5,076,376		802,438		0.1%
				—		5,426,955		1,188,076								—		5,076,376		802,438
Apidos CLO XXIV, Series 2016-24A	Multi-Sector Holdings	Subordinated Notes 10.323% effective yield ^{(5)(8)(9)(10)}	7/20/2027	18,357,647		12,042,458		11,142,247		1.7%			Multi-Sector Holdings	Subordinated Notes 11.341% effective yield ^{(5)(8)(9)(10)}	7/20/2027	18,357,647		11,785,125		11,143,092		1.8%
				18,357,647		12,042,458		11,142,247								18,357,647		11,785,125		11,143,092
Avantor, Inc.	Wholesale	Common Stock - 1,867,356 shares ⁽¹¹⁾		—		32,678,730		35,647,826		5.6%			Wholesale	Common Stock - 1,867,356 shares ⁽¹¹⁾		—		32,678,730		27,450,133		4.5%
				—		32,678,730		35,647,826								—		32,678,730		27,450,133
Aviation Technical Services, Inc.	Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ^(4)(5)(12)	3/31/2022	25,000,000		25,000,000		24,830,000		3.9%			Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ^(4)(5)(13)	3/31/2022	25,000,000		25,000,000		24,830,000		4.1%
				25,000,000		25,000,000		24,830,000								25,000,000		25,000,000		24,830,000
Barry's Bootcamp Holdings, LLC	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	7/14/2022	10,000,000		10,000,000		9,917,000		1.5%			Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	7/14/2022	9,975,000		9,975,000		9,975,000		1.6%
		Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	7/14/2022	5,600,000		5,600,000		5,552,960		0.9%				Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	7/14/2022	5,600,000		5,600,000		5,600,000		0.9%
				15,600,000		15,600,000		15,469,960								15,575,000		15,575,000		15,575,000
Black Angus Steakhouses, LLC	Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ^{(4)(5)(6)(12)}	4/24/2020	18,353,795		18,353,795		18,268,287		2.9%			Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ^{(4)(5)(6)(13)}	4/24/2020	18,225,447		18,225,447		18,131,341		3.0%
		Revolving Credit Facility LIBOR + 9.000%, 1.000% Floor ^{(4)(5)(6)(12)}	4/24/2020	1,227,679		1,227,679		1,226,328		0.2%				Revolving Credit Facility LIBOR + 9.000%, 1.000% Floor ^{(4)(5)(6)(13)}	4/24/2020	2,232,143		2,232,143		2,227,009		0.4%
				19,581,474		19,581,474		19,494,615								20,457,590		20,457,590		20,358,350
BRG Sports, Inc.	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/15/2023	6,422,500		6,422,500		6,344,788		1.0%			Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/15/2023	6,230,000		6,230,000		6,154,617		1.0%
				6,422,500		6,422,500		6,344,788								6,230,000		6,230,000		6,154,617
Brook & Whittle Holding Corp.	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/17/2024	2,937,058		2,937,058		2,902,401		0.5%			Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/17/2024	2,937,058		2,937,058		2,890,065		0.5%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/17/2024	690,757		690,757		682,606		0.1%				Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/17/2024	690,757		690,757		682,606		0.1%
				3,627,815		3,627,815		3,585,007								3,627,815		3,627,815		3,572,671


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
Covenant Surgical Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.500%⁽⁴⁾⁽⁵⁾	10/4/2024	6,900,154	6,886,595	6,831,152	1.1%
Capstone Nutrition Development, LLC								Healthcare & Pharmaceuticals	Units - 10,374 units ⁽¹¹⁾		—	1,037,490	1,037,490	0.2%
											—	1,037,490	1,037,490
Centauri Group Holdings, LLC								High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.250%⁽⁴⁾⁽⁵⁾	2/12/2024	7,222,004	7,203,949	7,203,949	1.2%
				6,900,154	6,886,595	6,831,152					7,222,004	7,203,949	7,203,949
CPI International, Inc.	Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/28/2025	9,900,752	9,874,098	9,510,662	1.5%	Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/28/2025	9,900,752	9,875,162	9,662,144	1.6%
				9,900,752	9,874,098	9,510,662					9,900,752	9,875,162	9,662,144
CT Technologies Intermediate Holdings, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	12/1/2021	977,099	843,308	801,221	0.1%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	12/1/2021	974,555	853,576	889,281	0.1%
				977,099	843,308	801,221					974,555	853,576	889,281
DataOnline Corp.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(6)	7/31/2025	9,925,000	9,925,000	9,830,713	1.5%	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(6)	7/31/2025	9,900,000	9,900,000	9,742,670	1.6%
				9,925,000	9,925,000	9,830,713					9,900,000	9,900,000	9,742,670
Dermatologists of Southwestern Ohio, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	4/20/2022	2,456,796	2,456,796	2,434,439	0.4%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	4/20/2022	2,450,551	2,450,551	2,430,212	0.4%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	4/20/2022	932,129	932,129	923,646	0.1%		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	4/20/2022	929,771	929,771	922,054	0.2%
				3,388,925	3,388,925	3,358,085					3,380,322	3,380,322	3,352,266
DirectBuy Home Improvement, Inc.	Retail	Subordinated notes LIBOR + 6.500%, 1.000% Floor ⁽¹³⁾	6/20/2022	260,919	260,919	260,919	0.0%	Retail	Subordinated notes LIBOR + 6.500%, 1.000% Floor ⁽¹⁴⁾	6/20/2022	260,919	253,833	260,710	0.0%
		Common Stock - 191,678 shares ⁽¹¹⁾		—	75,340	74,754	0.0%		Common Stock - 191,678 shares ⁽¹¹⁾		—	75,340	61,337	0.0%
				260,919	336,259	335,673					260,919	329,173	322,047
Dryden 38 Senior Loan Fund, Series 2015-38A	Multi-Sector Holdings	Subordinated Notes 12.092% effective yield ^(8)(9)(10)	7/15/2027	7,000,000	4,781,219	4,691,288	0.7%	Multi-Sector Holdings	Subordinated Notes 13.757% effective yield ^(8)(9)(10)	7/15/2027	7,000,000	4,715,290	4,442,431	0.7%
				7,000,000	4,781,219	4,691,288					7,000,000	4,715,290	4,442,431
Dryden 43 Senior Loan Fund, Series 2016-43A	Multi-Sector Holdings	Subordinated Notes 5.640% effective yield ^{(5)(8)(9)(10)}	7/20/2029	3,620,000	2,801,234	2,441,690	0.4%	Multi-Sector Holdings	Subordinated Notes 8.589% effective yield ^{(5)(8)(9)(10)}	7/20/2029	3,620,000	2,823,482	2,126,783	0.3%
				3,620,000	2,801,234	2,441,690					3,620,000	2,823,482	2,126,783
Dryden 49 Senior Loan Fund, Series 2017-49A	Multi-Sector Holdings	Subordinated Notes 7.275% effective yield ^(5)(9)(10)	7/18/2030	17,233,288	14,211,718	12,514,831	2.0%	Multi-Sector Holdings	Subordinated Notes 9.431% effective yield ^(5)(9)(10)	7/18/2030	17,233,288	13,905,375	11,498,050	1.9%
				17,233,288	14,211,718	12,514,831					17,233,288	13,905,375	11,498,050
First Boston Construction Holdings, LLC	Banking, Finance, Insurance & Real Estate	Senior secured first lien notes 12.000% ⁽⁵⁾	2/23/2023	9,965,000	9,965,000	9,965,000	1.6%	Banking, Finance, Insurance & Real Estate	Senior secured first lien notes 12.000% ⁽⁵⁾	2/23/2023	9,965,000	9,965,000	9,965,000	1.6%
		Preferred Equity - 2,491,250 units^(5)(11)		—	2,491,250	2,491,250	0.4%		Preferred Equity - 2,491,250 units^(5)(11)		—	2,491,250	2,491,250	0.4%
				9,965,000	12,456,250	12,456,250					9,965,000	12,456,250	12,456,250
FKI Security Group, LLC	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	3/30/2020	11,000,000	11,000,000	10,688,700	1.7%	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	3/30/2020	10,906,250	10,906,250	10,680,491	1.7%
				11,000,000	11,000,000	10,688,700					10,906,250	10,906,250	10,680,491
Friedrich Holdings, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	2/7/2023	10,580,000	10,580,000	10,499,592	1.6%	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	2/7/2023	10,553,550	10,553,550	10,473,343	1.7%
				10,580,000	10,580,000	10,499,592					10,553,550	10,553,550	10,473,343
GK Holdings, Inc.	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 10.250%, 1.000% Floor ⁽⁴⁾	1/20/2022	10,000,000	10,000,000	8,147,000	1.3%	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 10.250%, 1.000% Floor ⁽⁴⁾	1/20/2022	10,000,000	10,000,000	8,301,000	1.4%
				10,000,000	10,000,000	8,147,000					10,000,000	10,000,000	8,301,000
Golden West Packaging Group LLC	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/20/2023	1,454,574	1,454,574	1,448,174	0.2%	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/20/2023	1,450,691	1,450,691	1,442,132	0.2%
				1,454,574	1,454,574	1,448,174					1,450,691	1,450,691	1,442,132
Heligear Acquisition Co.	Aerospace & Defense	Senior secured first lien notes 10.250%⁽⁵⁾⁽⁸⁾	10/15/2019	15,000,000	15,000,000	14,613,000	2.3%
				15,000,000	15,000,000	14,613,000
Holland Acquisition Corp.	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 9.000%,	5/29/2020	4,408,696	4,387,535	3,009,636	0.5%	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 9.000%, ⁽¹⁴⁾	5/29/2020	4,400,696	4,259,261	1,377,418	0.2%
				4,408,696	4,387,535	3,009,636


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
											4,400,696	4,259,261	1,377,418
Hylan Datacom & Electrical LLC	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/25/2021	14,140,026	14,140,026	13,150,224	2.1%	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/25/2021	14,366,718	14,366,718	11,493,374	1.9%
									Senior Secured First Lien Term Loan LIBOR + 2.7500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	10/4/2019	439,993	432,868	439,993	0.1%
				14,140,026	14,140,026	13,150,224					14,806,711	14,799,586	11,933,367
IHS Intermediate, Inc.	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ⁽⁴⁾	7/20/2022	25,000,000	25,000,000	20,727,500	3.2%	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ^(4)(14)	7/20/2022	25,000,000	25,000,000	17,500,000	2.9%
				25,000,000	25,000,000	20,727,500					25,000,000	25,000,000	17,500,000
Impact Group, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/27/2023	5,827,301	5,827,301	5,559,245	0.9%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/27/2023	5,811,827	5,811,827	5,544,483	0.9%
				5,827,301	5,827,301	5,559,245					5,811,827	5,811,827	5,544,483
Interflex Acquisition Company, LLC	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	8/18/2022	12,998,453	12,998,452	12,176,950	1.9%	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	8/18/2022	12,817,203	12,817,203	12,216,076	2.0%
				12,998,453	12,998,452	12,176,950					12,817,203	12,817,203	12,216,076
Iqor US Inc.	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁷⁾	4/1/2021	14,308,955	13,473,318	13,915,463	2.2%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁷⁾	4/1/2021	19,867,614	18,905,837	17,483,500	2.9%
				14,308,955	13,473,318	13,915,463					19,867,614	18,905,837	17,483,500
Isagenix International, LLC	Wholesale	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/16/2025	1,900,000	1,891,274	1,489,220	0.2%	Wholesale	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/16/2025	1,874,466	1,866,310	1,422,345	0.2%
				1,900,000	1,891,274	1,489,220					1,874,466	1,866,310	1,422,345
Isola USA Corp.	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ⁽⁴⁾⁽⁶⁾	1/2/2023	9,685,569	7,187,239	6,800,238	1.1%	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ⁽⁴⁾⁽⁶⁾	1/2/2023	9,962,054	7,603,927	6,994,358	1.1%
		Common Units - 10,283,782 units ^(9)(11)		—	—	—	0.0%		Common Units - 10,283,782 units ^(9)(11)		—	—	—	0.0%
				9,685,569	7,187,239	6,800,238					9,962,054	7,603,927	6,994,358
JFL-WCS Partners, LLC	Environmental Industries	Preferred Units - 618,876 6.000%, PIK ⁽⁵⁾⁽⁹⁾		—	618,876	618,876	0.1%	Environmental Industries	Preferred Units - 618,876 6.000%, PIK ⁽⁵⁾⁽⁹⁾		—	618,876	618,876	0.1%
		Common Units - 68,764 units ^(5)(9)(11)		—	68,764	1,461,923	0.2%		Common Units - 68,764 units ^(5)(9)(11)		—	68,764	1,461,923	0.2%
				—	687,640	2,080,799					—	687,640	2,080,799
Keystone Acquisition Corp.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	5/1/2024	1,811,791	1,743,554	1,715,404	0.3%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	5/1/2024	1,807,181	1,742,459	1,751,520	0.3%
		Senior Secured Second Lien Term Loan LIBOR + 9.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	5/1/2025	7,000,000	6,896,081	6,619,900	1.0%		Senior Secured Second Lien Term Loan LIBOR + 9.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	5/1/2025	7,000,000	6,900,380	6,757,100	1.1%
				8,811,791	8,639,635	8,335,304					8,807,181	8,642,839	8,508,620
L&S Plumbing Partnership, Ltd.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	2/15/2022	10,283,287	10,283,287	10,283,287	1.6%	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	2/15/2022	8,909,589	8,909,589	8,909,589	1.5%
				10,283,287	10,283,287	10,283,287					8,909,589	8,909,589	8,909,589
Magnetite XIX, Limited	Multi-Sector Holdings	Subordinated Notes LIBOR + 7.610%^{(4)(8)(9)(10)}	7/17/2030	2,000,000	1,874,937	1,831,651	0.3%	Multi-Sector Holdings	Subordinated Notes LIBOR + 7.610%^{(4)(8)(9)(10)}	7/17/2030	2,000,000	1,874,937	1,757,368	0.3%
		Subordinated Notes 5.254% effective yield ^{(5)(8)(9)(10)}	7/17/2030	13,730,209	11,073,051	9,293,978	1.5%		Subordinated Notes 7.181% effective yield ^{(5)(8)(9)(10)}	7/17/2030	13,730,209	10,752,236	8,857,783	1.5%
				15,730,209	12,947,988	11,125,629					15,730,209	12,627,173	10,615,151
Manna Pro Products, LLC	Consumer Goods: Non-durable	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(5)(6)(7)	12/8/2023	4,104,167	4,104,167	3,901,831	0.6%	Consumer Goods: Non-durable	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(5)(6)(7)	12/8/2023	4,093,750	4,093,750	3,891,928	0.6%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.000%, 1.000% Floor ^(5)(6)(7)	12/8/2023	833,333	833,333	792,250	0.1%		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.000%, 1.000% Floor ^(5)(6)(7)	12/8/2023	831,250	831,250	790,269	0.1%
				4,937,500	4,937,500	4,694,081					4,925,000	4,925,000	4,682,197
Midwest Physician Administrative Services, LLC	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 7.000%, 0.750% Floor ⁽⁷⁾	8/15/2025	1,950,000	1,875,286	1,901,250	0.3%	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 7.000%, 0.750% Floor ⁽⁷⁾	8/15/2025	1,950,000	1,878,219	1,896,375	0.3%
				1,950,000	1,875,286	1,901,250					1,950,000	1,878,219	1,896,375
Novetta Solutions, LLC	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁷⁾	10/16/2023	11,000,000	10,932,354	10,456,600	1.6%
				11,000,000	10,932,354	10,456,600


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾	Industry	Type of Investment	Maturity	Par Amount		Cost	Fair Value	% of Net Assets⁽³⁾
Novetta Solutions, LLC								High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁷⁾	10/16/2023	11,000,000		10,935,398	10,450,000	1.7%
											11,000,000		10,935,398	10,450,000
Offen Inc.	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁶⁾	6/21/2026	2,938,053	2,908,673	2,908,673	0.5%	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁶⁾	6/21/2026	2,930,708		2,892,155	2,890,782	0.5%
				2,938,053	2,908,673	2,908,673					2,930,708		2,892,155	2,890,782
Path Medical, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ⁽⁵⁾⁽⁷⁾	10/11/2021	16,572,335	16,255,197	15,205,118	2.4%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ⁽⁵⁾⁽⁷⁾	10/11/2021	17,090,586		16,801,157	16,772,211	2.7%
		Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(5)(6)(7)	10/11/2021	656,000	656,000	653,166	0.1%		Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(5)(6)(7)	10/11/2021	459,200		459,200	458,970	0.1%
		Warrants - 36,716 warrants^(5)(11)	1/9/2027	—	669,709	—	0.0%		Warrants - 36,716 warrants^(5)(11)	1/9/2027	—		669,709	—	0.0%
				17,228,335	17,580,906	15,858,284					17,549,786		17,930,066	17,231,181
PetroChoice Holdings, Inc.	Chemicals, Plastics & Rubber	Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	8/21/2023	9,000,000	9,000,000	8,937,000	1.5%	Chemicals, Plastics & Rubber	Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	8/21/2023	9,000,000		9,000,000	8,585,100	1.5%
				9,000,000	9,000,000	8,937,000					9,000,000		9,000,000	8,585,100
Polymer Solutions Group Holdings, LLC	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/30/2021	2,432,861	2,432,861	2,426,049	0.4%	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/30/2021	2,426,702		2,426,702	2,393,942	0.4%
				2,432,861	2,432,861	2,426,049					2,426,702		2,426,702	2,393,942
Press Ganey Holdings, Inc	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁷⁾	10/21/2024	2,842,724	2,883,371	2,832,206	0.4%
				2,842,724	2,883,371	2,832,206
Project Silverback Holdings Corp.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 3.500%, 1.000% Floor ⁽⁷⁾	8/21/2024	4,912,500	4,306,442	4,273,875	0.7%	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 3.500%, 1.000% Floor ⁽⁷⁾	8/21/2024	4,900,000		4,322,488	4,267,410	0.7%
				4,912,500	4,306,442	4,273,875					4,900,000		4,322,488	4,267,410
Proppants Holdings, LLC	Energy: Oil & Gas	Common Units - 161,852 units ⁽¹¹⁾		—	874,363	874,001	0.1%	Energy: Oil & Gas	Common Units - 161,852 units ⁽¹¹⁾		—		874,363	874,001	0.1%
		Common Units - 161,852 units ⁽¹¹⁾		—	8,832	8,093	0.0%		Common Units - 161,852 units ⁽¹¹⁾		—		8,832	8,093	0.0%
				—	883,195	882,094					—		883,195	882,094
PT Network, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor	11/30/2023	7,921,094	7,408,412	7,405,430	1.3%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾	11/30/2023	7,928,575		7,443,470	7,412,424	1.3%
		Membership Units - 1.441 units		—	—	—	0.1%		Membership Units - 1.441 units ⁽¹¹⁾		—		—	—	0.1%
											7,928,575		7,443,470	7,412,424
Quantum Spatial, Inc.								High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/5/2024	15,000,000		14,777,992	15,000,000	2.5%
				7,921,094	7,408,412	7,405,430					15,000,000		14,777,992	15,000,000
RateGain Technologies, Inc.	Hotel, Gaming & Leisure	Subordinated Notes ^(5)(11)	7/31/2020	476,190	476,190	476,190	0.1%	Hotel, Gaming & Leisure	Subordinated Notes ^(5)(11)	7/31/2020	476,190		476,190	476,190	0.1%
		Subordinated Notes ^(5)(11)	7/31/2021	476,190	476,190	476,190	0.1%		Subordinated Notes ^(5)(11)	7/31/2021	476,190		476,190	476,190	0.1%
				952,380	952,380	952,380					952,380		952,380	952,380
Redwood Services Group, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	6/6/2023	19,969,281	19,969,281	19,779,572	3.1%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	6/6/2023	19,919,108		19,919,108	19,729,876	3.2%
		Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	6/6/2023	1,437,500	1,437,500	1,413,638	0.2%		Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	6/6/2023	1,437,500		1,437,500	1,413,637	0.2%
				21,406,781	21,406,781	21,193,210					21,356,608		21,356,608	21,143,513
Resolute Investment Managers, Inc.	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/30/2023	7,950,000	7,909,581	7,899,120	1.2%	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/30/2023	7,950,000		7,912,094	7,899,120	1.3%
				7,950,000	7,909,581	7,899,120					7,950,000		7,912,094	7,899,120
Rhombus Cinema Holdings, LP	Media: Diversified & Production	Preferred Equity 10.000% - 7,449 shares ⁽⁵⁾⁽⁹⁾		—	4,584,207	4,067,175	0.6%	Media: Diversified & Production	Preferred Equity 10.000% - 7,449 shares ⁽⁵⁾⁽⁹⁾		—		4,584,207	4,067,154	0.7%
		Common Units - 3,163 units ^(5)(8)(11)		—	3,162,793	—	0.0%		Common Units - 3,163 units ^(5)(8)(11)		—		3,162,793	—	0.0%
				—	7,747,000	4,067,175					—	��	7,747,000	4,067,154
RMS Holding Company, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	11/16/2022	18,179,877	18,179,877	18,019,894	2.8%
		Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor ^(4)(5)(6)	11/16/2022	2,322,033	2,322,033	2,287,546	0.4%
				20,501,910	20,501,910	20,307,440
SavATree, LLC								Environmental Industries	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/2/2022	4,344,693		4,344,693	4,344,693	0.7%


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
SavATree, LLC	Environmental Industries	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/2/2022	4,355,785	4,355,785	4,355,785	0.7%
				4,355,785	4,355,785	4,355,785					4,344,693	4,344,693	4,344,693
SFP Holding, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(5)(6)(11)	9/1/2022	9,224,604	9,224,604	9,132,358	1.4%	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(5)(6)(11)	9/1/2022	9,207,724	9,207,724	9,121,172	1.5%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.250%, 1.000% Floor ^(5)(6)(11)	9/1/2022	850,000	850,000	850,000	0.1%		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.250%, 1.000% Floor ^(5)(6)(11)	9/1/2022	850,000	850,000	850,600	0.1%
		Equity - 0.94% of outstanding equity ^(5)(11)		—	657,115	657,115	0.1%		Equity - 0.94% of outstanding equity ^(5)(11)		—	657,115	591,403	0.1%
				10,074,604	10,731,719	10,639,473					10,057,724	10,714,839	10,563,175
Shift4 Payments, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	11/28/2025	9,950,000	9,869,825	9,604,735	1.5%	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	11/28/2025	9,950,000	9,872,898	9,777,865	1.6%
				9,950,000	9,869,825	9,604,735					9,950,000	9,872,898	9,777,865
Ship Supply Acquisition Corporation	Services: Business	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ^(4)(5)(13)	7/31/2020	21,867,378	21,495,414	—	0.0%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor^(4)(5)(14)	7/31/2020	21,867,378	21,495,414	—	0.0%
				21,867,378	21,495,414	—					21,867,378	21,495,414	—
Simplified Logistics, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ^(4)(5)(6)	2/28/2022	18,574,575	18,574,575	18,574,575	2.9%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ^(4)(5)(6)	2/28/2022	18,527,997	18,527,997	18,527,997	3.0%
				18,574,575	18,574,575	18,574,575					18,527,997	18,527,997	18,527,997
SMART Financial Operations, LLC	Retail	Preferred Equity - 1,000,000 units^(5)(9)(11)		—	1,000,000	770,000	0.1%	Retail	Preferred Equity - 1,000,000 units^(5)(9)(11)		—	1,000,000	760,000	0.1%
				—	1,000,000	770,000					—	1,000,000	760,000
Smile Doctors, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/6/2022	8,292,046	8,292,046	8,051,577	1.3%	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/6/2022	8,271,106	8,271,106	8,031,244	1.3%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(6)	10/6/2022	3,310,278	3,310,278	3,146,322	0.5%		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(6)	10/6/2022	3,800,711	3,800,711	3,636,995	0.6%
				11,602,324	11,602,324	11,197,899					12,071,817	12,071,817	11,668,239
Sound Point CLO XX, Ltd.	Multi-Sector Holdings	Subordinated Notes 13.937% effective yield^{(5)(8)(9)(10)}	7/26/2031	4,489,000	4,059,832	4,103,175	0.6%	Multi-Sector Holdings	Subordinated Notes 14.123% effective yield^{(5)(8)(9)(10)}	7/26/2031	4,489,000	3,966,448	3,677,654	0.6%
				4,489,000	4,059,832	4,103,175					4,489,000	3,966,448	3,677,654
Southwest Dealer Services, Inc.	Automotive	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/2/2022	4,597,660	4,597,660	4,515,362	0.7%	Automotive	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/2/2022	4,567,413	4,567,413	4,485,656	0.7%
				4,597,660	4,597,660	4,515,362					4,567,413	4,567,413	4,485,656
Starfish Holdco, LLC	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	8/18/2025	4,000,000	3,953,405	3,995,200	0.6%	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	8/18/2025	4,000,000	3,955,258	3,954,000	0.6%
				4,000,000	3,953,405	3,995,200					4,000,000	3,955,258	3,954,000
Sungard AS New Holdings, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor, 2.500% PIK	2/3/2022	4,933,892	4,933,892	4,933,892	0.8%	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor, 2.500% PIK ⁽⁷⁾	2/3/2022	4,940,911	4,940,911	3,952,729	0.6%
		Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor	2/3/2022	714,915	694,357	714,915	0.1%		Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁷⁾	2/3/2022	714,915	696,199	693,468	0.1%
		Membership units - 73,135 units		—	2,163,076	2,163,041	0.3%		Membership units - 73,135 units ⁽¹¹⁾		—	2,163,076	2,163,041	0.4%
				5,648,807	7,791,325	7,811,848					5,655,826	7,800,186	6,809,238
Team Car Care, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	2/23/2023	14,285,694	14,285,694	14,004,266	2.2%	Automotive	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	2/23/2023	14,188,507	14,188,507	13,908,993	2.3%
				14,285,694	14,285,694	14,004,266					14,188,507	14,188,507	13,908,993
Techniplas, LLC	Automotive	Senior Secured First Lien Notes 10.000% ⁽⁸⁾	5/1/2020	6,000,000	6,000,000	5,528,400	0.9%	Automotive	Senior Secured First Lien Notes 10.000% ⁽⁸⁾	5/1/2020	6,000,000	6,000,000	5,130,000	0.8%
				6,000,000	6,000,000	5,528,400					6,000,000	6,000,000	5,130,000
Tensar Corporation	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 4.750%, 1.000% Floor ⁽⁴⁾	7/9/2021	6,900,187	6,743,870	6,491,006	1.0%	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 4.750%, 1.000% Floor ⁽⁴⁾	7/9/2021	6,900,187	6,761,043	6,541,377	1.1%
											6,900,187	6,761,043	6,541,377


Company⁽¹⁾⁽²⁾		Industry		Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾		Industry		Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
						6,900,187	6,743,870	6,491,006
The Imagine Group LLC		Media: Advertising, Printing & Publishing		Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/21/2023	8,950,000	8,860,270	6,749,195	1.1%		Media: Advertising, Printing & Publishing		Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	6/21/2023	8,950,000	8,865,852	5,116,715	0.8%
						8,950,000	8,860,270	6,749,195							8,950,000	8,865,852	5,116,715
The Octave Music Group, Inc.		Media: Diversified & Production		Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	5/27/2022	6,532,258	6,532,258	6,457,137	1.0%		Media: Diversified & Production		Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	5/27/2022	6,532,258	6,532,258	6,457,137	1.1%
						6,532,258	6,532,258	6,457,137							6,532,258	6,532,258	6,457,137
True Religion Apparel, Inc.		Retail		Senior Secured First Lien Term Loan 10.000%	10/27/2022	180,813	139,665	—	0.0%		Retail		Senior Secured First Lien Term Loan 10.000% ⁽¹⁴⁾	10/27/2022	180,355	134,423	—	0.0%
				Common Stock - 2,448 shares⁽¹¹⁾		—	—	—	0.0%				Common Stock - 2,448 shares⁽¹¹⁾		—	—	—	0.0%
				Warrants - 1,122 warrants⁽¹¹⁾		—	—	—	0.0%				Warrants - 1,122 warrants⁽¹¹⁾		—	—	—	0.0%
						180,813	139,665	—							180,355	134,423	—
Velocity Pooling Vehicle, LLC		Automotive		Senior Secured First Lien Term Loan LIBOR + 11.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/28/2023	742,482	689,890	651,008	0.1%		Automotive		Senior Secured First Lien Term Loan LIBOR + 11.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/28/2023	768,324	718,899	678,661	0.1%
				Common units - 4,676 units ^(5)(11)		—	259,938	259,939	0.0%				Common units - 4,676 units ^(5)(11)		—	259,938	17,956	0.0%
				Warrants - 5,591 warrants^(5)(11)	3/30/2028	—	310,802	310,804	0.0%				Warrants - 5,591 warrants^(5)(11)	3/30/2028	—	310,802	21,469	0.0%
						742,482	1,260,630	1,221,751							768,324	1,289,639	718,086
Vertafore, Inc.		High Tech Industries		Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/2/2026	9,950,000	9,808,523	9,664,435	1.5%		High Tech Industries		Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁷⁾	7/2/2026	9,950,000	9,813,344	9,767,915	1.6%
						9,950,000	9,808,523	9,664,435							9,950,000	9,813,344	9,767,915
VOYA CLO 2016-2, LTD.		Multi-Sector Holdings		Subordinated Notes 2.413% effective yield^{(5)(8)(9)(10)}	7/19/2028	11,088,290	8,532,973	6,870,305	1.1%		Multi-Sector Holdings		Subordinated Notes 5.839% effective yield^{(5)(8)(9)(10)}	7/19/2028	10,735,659	6,867,057	6,026,473	1.0%
						11,088,290	8,532,973	6,870,305							10,735,659	6,867,057	6,026,473
VOYA CLO 2015-2, LTD.		Multi-Sector Holdings		Subordinated Notes 13.904% effective yield^{(5)(8)(9)(10)}	7/19/2028	10,735,659	6,993,146	7,111,301	1.1%		Multi-Sector Holdings		Subordinated Notes 16.113% effective yield^{(5)(8)(9)(10)}	7/23/2027	11,088,290	8,311,538	6,132,711	1.0%
						10,735,659	6,993,146	7,111,301							11,088,290	8,311,538	6,132,711
Walker Edison Furniture Company LLC		Consumer Goods: Durable		Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/26/2024	14,812,500	14,812,500	14,812,500	2.3%		Consumer Goods: Durable		Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/26/2024	14,718,750	14,718,750	14,718,750	2.4%
				Common units - 2,000 units ^(5)(9)(11)		—	2,000,000	3,000,000	0.5%				Common units - 2,000 units ^(5)(9)(11)		—	2,000,000	3,410,210	0.6%
						14,812,500	16,812,500	17,812,500							14,718,750	16,718,750	18,128,960
Watermill-QMC Midco, Inc.		Automotive		Equity - 2.3% partnership interest^(5)(9)(11)		—	902,277	315,797	0.0%		Automotive		Equity - 2.3% partnership interest^(5)(9)(11)		—	902,277	154,925	0.0%
						—	902,277	315,797							—	902,277	154,925
YRC Worldwide Inc.		Transportation: Cargo		Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁷⁾⁽⁹⁾	7/26/2022	5,641,066	5,527,749	5,539,527	0.9%
						5,641,066	5,527,749	5,539,527

Total non-controlled/non-affiliated investments	Total non-controlled/non-affiliated investments						$714,454,593	$663,283,003	103.6%	Total non-controlled/non-affiliated investments						$690,478,114	$618,427,718	101.3%

Controlled/affiliated investments - 22.1%			⁽¹⁴⁾
Controlled/affiliated investments - 19.4%										Controlled/affiliated investments - 19.4%		⁽¹⁵⁾
1888 Industrial Services, LLC		Energy: Oil & Gas		Revolving Credit Facility LIBOR + 5.000%, 1.000% Floor ^(4)(5)(6)	9/30/2021	1,194,903	1,194,903	1,194,903	0.2%		Energy: Oil & Gas		Revolving Credit Facility LIBOR + 5.000%, 1.000% Floor ^(4)(5)(6)	9/30/2021	1,509,351	1,509,351	1,509,351	0.2%
				Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/30/2021	3,144,481	3,144,481	3,144,481	0.5%				Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/30/2021	3,144,481	3,144,481	3,144,481	0.5%
				Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor, PIK ^(4)(5)(13)	9/30/2021	7,815,751	7,024,117	3,907,875	0.6%				Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor, PIK ^(4)(5)(14)	9/30/2021	7,815,751	6,862,815	1,953,938	0.3%
				Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/30/2021	401,814	401,814	401,814	0.1%				Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/30/2021	401,814	401,814	401,814	0.1%
				Units - 7,546.76 units ^(5)(11)		—	—	—	0.0%				Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor (4)(5)	9/18/2020	78,384	78,384	78,384	0.0%
						12,556,949	11,765,315	8,649,073					Units - 7,546.76 units ^(5)(11)		—	—	—	0.0%
															12,949,781	11,996,845	7,087,968
Access Media Holdings, LLC		Media: Broadcasting & Subscription		Senior Secured First Lien Term Loan 10.000% PIK ^(5)(7)(13)	7/22/2020	8,561,156	7,458,342	4,815,651	0.8%		Media: Broadcasting & Subscription		Senior Secured First Lien Term Loan 10.000% PIK^(5)(7)(14)	7/22/2020	8,781,810	7,458,342	2,195,453	0.4%
													Common Stock - 14 units ^(5)(9)(11)		—	—	—	0.0%
													Preferred Equity - 1,400,000 units ^(5)(9)(11)		—	1,400,000	—	0.0%


Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value		% of Net Assets⁽³⁾		Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value			% of Net Assets⁽³⁾
		Common Stock - 14 units ^(5)(9)(11)		—	—	—		0.0%			Preferred Equity - 700,000 units ^(5)(9)(11)		—		700,000		—			0.0%
		Preferred Equity - 1,400,000 units ^(5)(9)(11)		—	1,400,000	—		0.0%			Preferred Equity - 849,800 units ^{(5)(6)(9)(11)}		—		938,000		—			0.0%
		Preferred Equity - 700,000 units ^(5)(9)(11)		—	700,000	—		0.0%					8,781,810		10,496,342		2,195,453
		Preferred Equity - 849,800 units ^{(5)(6)(9)(11)}		—	849,800	(88,200	)	0.0%
				8,561,156	10,408,142	4,727,451
Caddo Investors Holdings 1 LLC	Forest Products & Paper	Equity - 12.250% LLC Interest ^(5)(9)(15)		—	4,972,863	5,445,137		0.9%		Forest Products & Paper	Equity - 12.250% LLC Interest ^(5)(9)(16)		—		5,027,482		5,631,800			0.9%
				—	4,972,863	5,445,137							—		5,027,482		5,631,800
Capstone Nutrition, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ^(4)(5)(13)	9/25/2020	25,406,608	15,652,279	3,455,299		0.5%
Charming Charlie LLC										Retail	Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor^(4)(6)(14)	4/24/2023	3,409,094		3,121,470		—			0.0%
		Senior Secured First Lien Delayed Draw Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ^(4)(5)(13)	9/25/2020	11,425,241	7,268,839	1,553,833		0.2%			Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(14)	4/24/2023	4,186,863		2,622,254		(258,708		)	0.0%
		Senior Secured First Lien Incremental Delayed Draw Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ⁽⁴⁾⁽⁵⁾	9/25/2020	2,907,602	2,907,602	2,907,602		0.5%
		Common Stock - 2,197.8 shares ^(5)(11)		—	9	—		0.0%
		Common Stock - 3,498.5 shares^(5)(11)		—	—	—		0.0%
		Common Stock - 7,068.3 shares^(5)(11)		—	300,002	—		0.0%
				39,739,451	26,128,731	7,916,734
Charming Charlie LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(6)(13)	4/24/2023	3,304,026	3,121,470	—		0.0%
		Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(13)	4/24/2023	4,057,824	2,840,039	—		0.0%			Senior Secured First Lien Term Loan 20.000%	5/15/2019	182,617		182,617		136,963			0.0%
		Senior Secured First Lien Term Loan 20.000%	5/15/2019	182,617	182,617	—		0.0%			Senior Secured First Lien Delayed Draw Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(6)(14)	5/15/2020	1,034,831		1,034,831		730,469			0.1%
		Common Stock - 34,923,249 shares ⁽¹¹⁾		—	—	—		0.0%			Common Stock - 34,923,249 shares ⁽¹¹⁾		—		—		—			0.0%
				7,544,467	6,144,126	—							8,813,405		6,961,172		608,724
Dynamic Energy Services International LLC	Energy: Oil & Gas	Revolving Credit Facility 12.000% ⁽⁵⁾⁽⁶⁾	6/30/2019	937,105	937,105	937,105		0.1%		Energy: Oil & Gas	Revolving Credit Facility 12.000% ⁽⁵⁾⁽⁶⁾	12/31/2019	286,896		286,896		286,896			0.0%
		Senior Secured First Lien Term Loan 13.500% PIK^(5)(7)(13)	12/31/2021	5,624,037	4,449,025	639,453		0.1%			Senior Secured First Lien Term Loan 13.500% PIK^(5)(7)(14)	12/31/2021	5,854,934		4,449,025		665,706			0.1%
		Common Units - 6,500,000 units ^(5)(11)		—	—	—		0.0%			Common Units - 6,500,000 units ^(5)(11)		—		—		—			0.0%
				6,561,142	5,386,130	1,576,558							6,141,830		4,735,921		952,602
Kemmerer Operations, LLC	Metals & Mining	Senior Secured First Lien Term Loan 15.000% PIK	6/21/2023	1,694,915	1,694,915	1,694,915		0.3%		Metals & Mining	Senior Secured First Lien Term Loan 15.000% PIK	6/21/2023	1,766,511		1,694,915		1,766,511			0.3%
		Senior Secured First Lien Delayed Draw Term Loan 15.000% PIK ⁽⁶⁾	6/21/2023	677,966	677,966	677,966		0.1%			Senior Secured First Lien Delayed Draw Term Loan 15.000% PIK ⁽⁶⁾	6/21/2023	706,604		706,604		706,604			0.1%
		Common Units - 6.7797 units		—	962,717	962,717		0.2%			Common Units - 6.7797 units ⁽¹¹⁾		—		962,717		994,000			0.2%
				2,372,881	3,335,598	3,335,598							2,473,115		3,364,236		3,467,115
MCM 500 East Pratt Holdings, LLC	Banking, Finance, Insurance & Real Estate	Equity - 5,000,000 units ^(9)(11)		—	5,000,000	5,000,000		0.8%		Banking, Finance, Insurance & Real Estate	Equity - 5,000,000 units ^(9)(11)		—		5,000,000		7,100,000			1.2%
				—	5,000,000	5,000,000							—		5,000,000		7,100,000
MCM Capital Office Park Holdings LLC	Banking, Finance, Insurance & Real Estate	Equity - 7,500,000 units ^(9)(11)		—	7,500,000	10,837,500		1.7%		Banking, Finance, Insurance & Real Estate	Equity - 7,500,000 units ^(9)(11)		—		7,500,000		11,775,000			1.9%
				—	7,500,000	10,837,500							—		7,500,000		11,775,000
Sierra Senior Loan Strategy JV I LLC										Multi-Sector Holdings	Equity - 87.5% ownership of SIC Senior Loan Strategy JV I LLC ^(6)(9)(16)		92,050,000		92,050,000		73,409,359			12.0%
													92,050,000		92,050,000		73,409,359
TwentyEighty, Inc.										Services: Business	Common Units - 58,098 units⁽¹¹⁾		—		—		6,294,918			1.0%
													—		—		6,294,918

Total controlled/affiliated investments									Total controlled/affiliated investments						$	147,131,998	$	118,522,939		19.4%

Money Market Fund - 24.7%									Money Market Fund - 24.7%
State Street Institutional Liquid Reserves Fund											Money Market 2.060%⁽¹²⁾		92,039,134		92,039,134		92,039,134			15.1%
Federated Institutional Prime Obligations Fund											Money Market 2.030% ⁽¹²⁾		58,703,019		58,703,019		58,703,019			9.6%
Total money market fund													$	150,742,153	$	150,742,153	$	150,742,153		24.7%

Company⁽¹⁾⁽²⁾
Industry Type of Investment Maturity Par
Amount Cost Fair Value
% of Net Assets⁽³⁾
Sierra Senior Loan Strategy JV I LLC Multi-Sector Holdings
Equity - 87.5% ownership of SIC Senior Loan Strategy JV I LLC ^(6)(9)(15)
92,050,000
92,050,000
76,555,675
12.0%
92,050,000
92,050,000
76,555,675

TwentyEighty, Inc. Services: Business
Senior Secured First Lien Term Loan LIBOR + 4.000%, 1.000% Floor, 4.000% PIK ⁽⁴⁾⁽⁶⁾
3/31/2020 7,114,450
7,114,450
7,044,729
1.1%

Senior Secured First Lien Term Loan 0.250%, 8.750% PIK ⁽⁴⁾
3/31/2020 6,981,494
6,811,166
6,981,494
1.1%

Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁴⁾
3/31/2020 204,697
204,409
204,697
0.0%

Common Units - 58,098 units⁽¹¹⁾
—
—
3,464,382
0.5%
14,300,641
14,130,025
17,695,302

Total controlled/affiliated investments $ 186,820,930
$ 141,739,028
22.1%

Money Market Fund - 10.9%
Federated Institutional Prime Obligations Fund
Money Market 2.390% ⁽¹⁶⁾
69,810,676
69,810,676
69,810,676
10.9%
Total money market fund $ 69,810,676
$ 69,810,676
$ 69,810,676

Derivative instrument - long exposure Notional Amount Unrealized Appreciation/(Depreciation)
Total return swap with Citibank, N.A. (Note 5) Total Return Swap — —
Total derivative instrument - long exposure $ — $ —

Company⁽¹⁾⁽²⁾

Industry

Type of Investment

Maturity

Par
Amount

Cost

Fair Value

% of Net Assets⁽³⁾

Derivative instrument - long exposure

Notional Amount

Unrealized Appreciation/(Depreciation)

Total return swap with Citibank, N.A. (Note 5)

Total Return Swap

—

0.0%

Total derivative instrument - long exposure

—

0.0%

(1)

All of the Company's investments are domiciled in the United States except for AMMC CLO 22, Limited Series 2018-22A, Apidos CLO XXIV, Series 2016-24A, Dryden 38 Senior Loan Fund, Series 2015-38A, Dryden 43 Senior Loan Fund, Series 2016-43A, Dryden 49 Senior Loan Fund, Series 2017-49A, Magnetite XIX, Limited, Sound Point CLO XX, Ltd.,VOYA CLO 2016-2, LTD and VOYA CLO 2015-2, LTD., which are all domiciled in the Cayman Islands. All foreign investments were denominated in US Dollars.


(2)	Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy.


(3)	Percentage is based on net assets of ~~$640,436,545~~$610,610,747 as of ~~June~~September 30, 2019.


(4)	The interest rate on these loans is subject to a base rate plus 3 Month "3M" LIBOR, which at ~~June~~September 30, 2019 was ~~2.32%~~2.09%. The interest rate is subject to a minimum LIBOR floor.


(5)	An affiliated fund that is managed by an affiliate of SIC Advisors LLC also holds an investment in this security.


(6)	The investment has an unfunded commitment as of ~~June~~September 30, 2019. For further details see Note 11. Fair value includes an analysis of the unfunded commitment.


(7)	The interest rate on these loans is subject to a base rate plus 1 Month "1M" LIBOR, which at ~~June~~September 30, 2019 was ~~2.40%~~2.02%. The interest rate is subject to a minimum LIBOR floor.


(8)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities represent a fair value of ~~$73,455,911~~$54,896,899 or ~~11.4%~~9.0% of net assets as of ~~June~~September 30, 2019 and are considered restricted securities.


(9)	The investment is not a qualifying asset under Section 55 of the Investment Company Act of 1940 (the "1940 Act"). Non-qualifying assets represent ~~23.2%~~26.9% of the Company's portfolio at fair value.

(10)

This investment is in the equity class of a collateralized loan obligation ("CLO"). The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking into account assumptions that have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.


(11)	Security is non-income producing.


(12)	Represents securities in Level 1 in the ASC 820 table (see Note 4).


(13)	A portion of this investment was sold via a participation agreement. The listed amount is the portion retained by Sierra Income Corporation.


~~(13)~~(14)	The investment was on non-accrual status as of ~~June~~September 30, 2019.

~~(14)~~(15)

Affiliate Investments are defined by the 1940 Act as investments in companies in which the Company owns at least 5% but no more than 25% of the voting securities or we are under common control with such portfolio company. Control Investments are defined by the 1940 Act as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.


~~(15)~~(16)	As a practical expedient, the Company uses NAV to determine the fair value of this investment.


~~(16)~~	~~Represents securities in Level 1 in the ASC 820 table (see Note 4).~~

See accompanying notes to consolidated financial statements.

Sierra Income Corporation

Consolidated Schedule of Investments

As of December 31, 2018



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value		% of Net Assets⁽³⁾
Non-controlled/non-affiliated investments– 114.6%										$	662,080,199
AAAHI Acquisition Corporation	Transportation: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(4)(5)(12)	12/10/2023	$	7,402,367	$	7,402,367	$	7,402,367	1.1%
				7,402,367		7,402,367		7,402,367
Alpine SG, LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	11/16/2022	6,617,630		6,617,630		6,617,630		1.0%
		Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(12)	11/16/2022	13,398,750		13,398,750		13,398,750		2.0%
				20,016,380		20,016,380		20,016,380
American Dental Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/25/2023	4,893,750		4,893,750		4,790,492		0.7%
				4,893,750		4,893,750		4,790,492
Amerijet Holdings, Inc.	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	7/15/2021	11,514,705		11,514,705		11,514,705		1.7%
				11,514,705		11,514,705		11,514,705
AMMC CLO 22, Limited Series 2018-22A	Multi-Sector Holdings	Subordinated Notes 11.435% effective yield ^(7)(8)(9)	4/25/2031	7,222,000		6,089,733		5,927,818		0.9%
				7,222,000		6,089,733		5,927,818
Answers Finance, LLC	High Tech Industries	Common Stock - 389,533 shares⁽¹⁰⁾		—		5,426,955		1,188,076		0.2%
				—		5,426,955		1,188,076
Apidos CLO XXIV, Series 2016-24A	Multi-Sector Holdings	Subordinated Notes 10.169% effective yield ^(5)(7)(8)(9)	7/20/2027	18,357,647		12,332,974		11,146,763		1.7%
				18,357,647		12,332,974		11,146,763
Aviation Technical Services, Inc.	Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ^(4)(5)(11)	3/31/2022	25,000,000		25,000,000		25,000,000		3.8%
				25,000,000		25,000,000		25,000,000
Barry's Bootcamp Holdings, LLC	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(12)	7/14/2022	8,571,429		8,571,429		8,488,429		1.3%
		Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(12)	7/14/2022	3,360,000		3,360,000		3,312,960		0.5%
				11,931,429		11,931,429		11,801,389
Black Angus Steakhouses, LLC	Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ^{(4)(5)(11)(12)}	4/24/2020	18,722,098		18,722,098		18,353,183		2.8%
				18,722,098		18,722,098		18,353,183
BRG Sports, Inc.	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	6/15/2023	6,711,250		6,711,250		6,617,293		1.0%
				6,711,250		6,711,250		6,617,293
Brook & Whittle Holding Corp.	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/17/2024	3,719,582		3,719,582		3,719,582		0.6%
				3,719,582		3,719,582		3,719,582
Central States Dermatology Services, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ^(5)(6)(12)	4/20/2022	3,090,991		3,090,991		3,045,360		0.5%
				3,090,991		3,090,991		3,045,360
Covenant Surgical Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.500%⁽⁴⁾⁽⁵⁾	10/4/2024	6,935,170		6,920,608		6,865,818		1.0%
				6,935,170		6,920,608		6,865,818
CPI International, Inc.	Aerospace & Defense	Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	7/28/2025	9,900,752		9,871,970		9,776,992		1.5%
				9,900,752		9,871,970		9,776,992



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
DataOnline Corp.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(12)	7/31/2025	9,975,000	9,975,000	9,975,000	1.5%
				9,975,000	9,975,000	9,975,000
Drew Marine Partners, LP	Transportation: Cargo	Senior Secured Second Lien Term Loan LIBOR + 7.000%, 1.000% Floor ⁽⁶⁾	5/19/2021	10,000,000	10,035,660	9,862,000	1.5%
				10,000,000	10,035,660	9,862,000
Dryden 38 Senior Loan Fund, Series 2015-38A	Multi-Sector Holdings	Subordinated Notes 12.456% effective yield ^(7)(8)(9)	7/15/2027	7,000,000	4,877,323	4,890,900	0.7%
				7,000,000	4,877,323	4,890,900
Dryden 43 Senior Loan Fund, Series 2016-43A	Multi-Sector Holdings	Subordinated Notes 4.966% effective yield ^(5)(7)(8)(9)	7/20/2029	3,620,000	2,902,869	2,330,918	0.4%
				3,620,000	2,902,869	2,330,918
Dryden 49 Senior Loan Fund, Series 2017-49A	Multi-Sector Holdings	Subordinated Notes 6.812% effective yield ^(5)(8)(9)	7/18/2030	17,233,288	14,799,896	12,414,861	1.9%
				17,233,288	14,799,896	12,414,861
Dynamic Energy Services International LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan 12.000% ^(5)(12)	6/30/2019	246,677	246,677	246,677	0.0%
		Senior Secured First Lien Term Loan 8.500% PIK + LIBOR ^(4)(5)(13)	5/6/2019	11,474,068	9,828,831	1,304,602	0.2%
				11,720,745	10,075,508	1,551,279
Elite Comfort Solutions LLC	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ^(6)(12)	1/15/2021	8,019,802	8,019,802	8,019,802	1.2%
				8,019,802	8,019,802	8,019,802
First Boston Construction Holdings, LLC	Banking, Finance, Insurance & Real Estate	Senior secured first lien notes 12.000% ⁽⁵⁾	2/23/2023	9,965,000	9,965,000	9,910,193	1.5%
		Preferred Equity - 2,491,250 units^(5)(10)		—	2,491,250	2,491,250	0.4%
				9,965,000	12,456,250	12,401,443
FKI Security Group, LLC	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	3/30/2020	11,187,500	11,187,500	11,187,500	1.7%
				11,187,500	11,187,500	11,187,500
Friedrich Holdings, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	2/7/2023	14,853,555	14,853,555	14,853,555	2.2%
				14,853,555	14,853,555	14,853,555
Fusion Telecommunications International Inc.	Telecommunications	Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁴⁾	5/4/2023	894,729	862,917	836,840	0.1%
				894,729	862,917	836,840
GK Holdings, Inc.	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 10.250%, 1.000% Floor ⁽⁴⁾	1/20/2022	10,000,000	10,000,000	8,763,000	1.3%
				10,000,000	10,000,000	8,763,000
Golden West Packaging Group LLC	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	6/20/2023	2,503,182	2,503,182	2,503,182	0.4%
				2,503,182	2,503,182	2,503,182
Heligear Acquisition Co.	Aerospace & Defense	Senior secured first lien notes 10.250%⁽⁵⁾⁽⁷⁾	10/15/2019	15,000,000	15,000,000	14,451,000	2.2%
				15,000,000	15,000,000	14,451,000
High Ridge Brands Co.	Consumer Goods: Non-Durable	Senior secured first lien notes 8.875% ^(5)(7)(13)	3/15/2025	2,000,000	2,000,000	876,600	0.1%
				2,000,000	2,000,000	876,600
Holland Acquisition Corp.	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁴⁾	5/29/2020	4,400,696	4,380,988	3,134,616	0.5%
				4,400,696	4,380,988	3,134,616
Hylan Datacom & Electrical LLC	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	7/25/2021	14,316,715	14,316,715	14,183,570	2.1%
				14,316,715	14,316,715	14,183,570



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
IHS Intermediate, Inc.	Services: Business	Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ⁽⁴⁾	7/20/2022	25,000,000	25,000,000	24,815,000	3.7%
				25,000,000	25,000,000	24,815,000
Impact Group, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/27/2023	6,158,312	6,158,312	6,158,312	0.9%
				6,158,312	6,158,312	6,158,312
Interflex Acquisition Company, LLC	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	8/18/2022	13,412,500	13,412,500	12,445,459	1.9%
				13,412,500	13,412,500	12,445,459
Invision Diversified, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ^(5)(6)(11)	6/30/2020	22,631,334	22,631,334	22,631,334	3.4%
				22,631,334	22,631,334	22,631,334
Isagenix International, LLC	Wholesale	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/16/2025	1,950,000	1,940,090	1,925,430	0.3%
				1,950,000	1,940,090	1,925,430
Isola USA Corp.	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ^(4)(12)	1/2/2023	9,541,669	6,639,511	6,699,206	1.0%
		Common Units - 10,283,782 units^(8)(10)		—	—	—	0.0%
				9,541,669	6,639,511	6,699,206
JFL-WCS Partners, LLC	Environmental Industries	Preferred Units - 618,876 6.000%, PIK ⁽⁵⁾⁽⁸⁾		—	618,876	618,876	0.1%
		Common Units - 68,764 units ^(5)(8)(10)		—	68,764	363,762	0.1%
				—	687,640	982,638
Keystone Acquisition Corp.	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 9.250%, 1.000% Floor ^(4)(5)(14)	5/1/2025	7,000,000	6,887,491	6,934,900	1.0%
				7,000,000	6,887,491	6,934,900
L&S Plumbing Partnership, Ltd.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	2/15/2022	10,615,319	10,615,319	10,683,257	1.6%
				10,615,319	10,615,319	10,683,257
Livingston International Inc.	Transportation: Cargo	Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.250% Floor ⁽⁴⁾⁽⁸⁾	4/17/2020	4,613,287	4,528,653	4,359,556	0.7%
				4,613,287	4,528,653	4,359,556
Magnetite XIX, Limited	Multi-Sector Holdings	Subordinated Notes LIBOR + 7.610%^(4)(7)(8)(9)	7/17/2030	2,000,000	1,875,000	1,797,800	0.3%
		Subordinated Notes 4.790% effective yield ^(5)(7)(8)(9)	7/17/2030	13,730,209	11,634,266	9,863,782	1.5%
				15,730,209	13,509,266	11,661,582
Manna Pro Products, LLC	Consumer Goods: Non-durable	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(5)(6)(12)	12/8/2023	4,633,333	4,633,333	4,513,837	0.7%
				4,633,333	4,633,333	4,513,837
Nathan's Famous, Inc.	Beverage & Food	Senior secured first lien notes 6.625% ^{(5)(7)(8)(15)}	11/1/2025	4,950,000	4,965,308	4,742,100	0.7%
				4,950,000	4,965,308	4,742,100
New Media Holdings II LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	7/14/2022	7,447,624	7,439,698	7,410,386	1.1%
				7,447,624	7,439,698	7,410,386
Nine West Holdings, Inc.	Consumer Goods: Non-durable	Senior Secured First Lien Term Loan 8.250%	10/8/2019	2,212,649	2,134,223	2,132,551	0.3%
				2,212,649	2,134,223	2,132,551
Novetta Solutions, LLC	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁶⁾	10/16/2023	11,000,000	10,926,479	9,903,300	1.5%
				11,000,000	10,926,479	9,903,300



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
Oxford Mining Company, LLC	Metals & Mining	Senior Secured First Lien Term Loan LIBOR + 10.500%, 0.750% Floor, 3.000% PIK ^(4)(5)(13)	12/31/2018	13,424,511	11,680,099	4,093,133	0.6%
		Senior Secured First Lien Term Loan LIBOR + 10.500%, 0.750% Floor, 3.000% PIK^(4)(5)(13)	12/31/2018	9,289,873	8,063,161	2,832,482	0.4%
				22,714,384	19,743,260	6,925,615
Path Medical, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK ⁽⁴⁾⁽⁵⁾	10/11/2021	15,601,663	15,231,477	14,779,456	2.2%
		Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(5)(12)	10/11/2021	918,400	918,400	918,400	0.1%
		Warrants - 36,716 warrants^(5)(10)	1/9/2027	—	669,709	—	0.0%
				16,520,063	16,819,586	15,697,856
PetroChoice Holdings, Inc.	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	8/19/2022	2,904,173	2,875,786	2,877,454	0.4%
		Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ^(4)(5)(11)	8/21/2023	9,000,000	9,000,000	8,902,800	1.3%
				11,904,173	11,875,786	11,780,254
Polymer Solutions Group Holdings, LLC	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	6/30/2021	2,445,180	2,445,180	2,445,180	0.4%
				2,445,180	2,445,180	2,445,180
Press Ganey Holdings, Inc	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁶⁾	10/21/2024	5,842,724	5,927,327	5,769,106	0.9%
				5,842,724	5,927,327	5,769,106
PT Network, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ^(4)(5)(12)	11/30/2021	7,921,094	7,921,094	7,665,272	1.2%
				7,921,094	7,921,094	7,665,272
RateGain Technologies, Inc.	Hotel, Gaming & Leisure	Subordinated Notes ^(5)(10)	7/31/2020	476,190	476,190	476,190	0.1%
		Subordinated Notes ^(5)(10)	7/31/2021	476,190	476,190	476,190	0.1%
				952,380	952,380	952,380
Redwood Services Group, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/6/2023	20,069,765	20,069,765	19,806,851	3.0%
		Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(12)	6/6/2023	1,150,000	1,150,000	1,150,000	0.2%
				21,219,765	21,219,765	20,956,851
Resolute Investment Managers, Inc.	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 7.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/30/2023	7,950,000	7,904,561	7,868,115	1.2%
				7,950,000	7,904,561	7,868,115
Rhombus Cinema Holdings, LP	Media: Diversified & Production	Preferred Equity 10.000% - 7,449 shares ⁽⁵⁾⁽⁸⁾		—	4,584,207	5,647,861	0.9%
		Common Units - 3,163 units ^(5)(8)(10)		—	3,162,793	1,198,288	0.2%
				—	7,747,000	6,846,149
RMS Holding Company, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	11/16/2022	18,277,090	18,277,090	18,277,090	2.8%
		Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ^(4)(5)(12)	11/16/2022	2,870,681	2,870,681	2,805,157	0.4%
				21,147,771	21,147,771	21,082,247
SavATree, LLC	Environmental Industries	Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor ^(4)(5)(12)	6/2/2022	4,219,081	4,219,081	4,181,430	0.6%
				4,219,081	4,219,081	4,181,430



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
SFP Holding, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/1/2022	6,678,921	6,678,921	6,678,921	1.0%
		Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor ^(4)(5)(12)	9/1/2022	2,726,241	2,726,241	2,726,241	0.4%
		Equity - 0.94% of outstanding equity ^(5)(10)		—	491,270	491,270	0.1%
				9,405,162	9,896,432	9,896,432
Shift4 Payments, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	11/28/2025	9,950,000	9,863,685	9,820,650	1.5%
				9,950,000	9,863,685	9,820,650
Ship Supply Acquisition Corporation	Services: Business	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ^(4)(5)(13)	7/31/2020	21,562,500	21,190,536	10,332,750	1.6%
				21,562,500	21,190,536	10,332,750
Simplified Logistics, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ^(4)(5)(12)	2/28/2022	18,668,289	18,668,289	18,363,996	2.8%
				18,668,289	18,668,289	18,363,996
Sizzling Platter, LLC	Hotel, Gaming & Leisure	Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor⁽¹⁶⁾	4/29/2020	15,000,000	15,000,000	15,000,000	2.3%
				15,000,000	15,000,000	15,000,000
SMART Financial Operations, LLC	Retail	Preferred Equity - 1,000,000 units^(5)(8)(10)		1,000,000	1,000,000	1,000,000	0.2%
				1,000,000	1,000,000	1,000,000
Smile Doctors, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	10/6/2022	8,333,925	8,333,925	8,177,247	1.2%
		Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor ^(4)(5)(12)	10/6/2022	1,357,903	1,357,903	1,251,428	0.2%
				9,691,828	9,691,828	9,428,675
Sound Point CLO XX, Ltd.	Multi-Sector Holdings	Subordinated Notes 13.366% effective yield^(5)(7)(8)(9)	7/26/2031	4,489,000	4,072,623	4,063,892	0.6%
				4,489,000	4,072,623	4,063,892
Southwest Dealer Services, Inc.	Automotive	Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/2/2022	4,658,156	4,658,156	4,574,775	0.7%
				4,658,156	4,658,156	4,574,775
SRS Software, LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 7.000%, 1.000% Floor, 0.500% unused fee ^(4)(5)(12)	2/17/2022	19,158,750	19,158,750	19,158,750	2.9%
				19,158,750	19,158,750	19,158,750
Starfish Holdco, LLC	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 9.000%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	8/18/2025	4,000,000	3,949,703	3,905,200	0.5%
				4,000,000	3,949,703	3,905,200
Team Car Care, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	2/23/2023	14,480,069	14,480,070	14,271,556	2.2%
				14,480,069	14,480,070	14,271,556
Techniplas, LLC	Automotive	Senior Secured First Lien Notes 10.000% ⁽⁷⁾	5/1/2020	6,000,000	6,000,000	5,515,200	0.8%
				6,000,000	6,000,000	5,515,200
The Imagine Group LLC	Media: Advertising, Printing & Publishing	Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor ^(5)(6)(14)	6/21/2023	8,950,000	8,849,117	7,888,530	1.2%
				8,950,000	8,849,117	7,888,530
The Octave Music Group, Inc.	Media: Diversified & Production	Senior Secured Second Lien Term Loan LIBOR + 8.250%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	5/27/2022	7,500,000	7,500,000	7,475,250	1.1%
				7,500,000	7,500,000	7,475,250



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value	% of Net Assets⁽³⁾
True Religion Apparel, Inc.	Retail	Senior Secured First Lien Term Loan 10.000%	10/27/2022	181,731	139,861	64,587	0.0%
		Common Stock - 2,448 shares⁽¹⁰⁾		—	—	—	0.0%
		Warrants - 1,122 warrants⁽¹⁰⁾		—	—	—	0.0%
				181,731	139,861	64,587
U.S. Auto Sales Inc.	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loan LIBOR + 10.500%, 1.000% Floor ^(5)(6)(11)	6/8/2020	5,500,000	5,500,000	5,490,650	0.8%
				5,500,000	5,500,000	5,490,650
U.S. Well Services, LLC	Energy: Oil & Gas	Warrants - 2.04% of outstanding equity ⁽¹⁰⁾	2/21/2019	—	173	—	0.0%
				—	173	—
Vail Holdco Corp	Wholesale	Preferred Equity 12.500% - PIK 20,330 shares ⁽⁵⁾		—	21,457,643	21,648,460	3.3%
		Preferred Equity - 15,250 shares ^(5)(10)		—	15,250,000	18,112,425	2.7%
		Warrants - 14,007 warrants ^(5)(10)		—	860,357	1,172,806	0.2%
				—	37,568,000	40,933,691
Valence Surface Technologies, Inc.	Aerospace & Defense	Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	6/13/2021	5,949,311	5,947,586	5,949,311	0.9%
				5,949,311	5,947,586	5,949,311
Velocity Pooling Vehicle, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 11.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	4/28/2023	694,375	635,495	609,036	0.1%
		Common units - 4,676 units ^(5)(10)		—	259,938	259,938	0.0%
		Warrants - 5,591 warrants^(5)(10)	3/30/2028	—	310,802	310,803	0.0%
				694,375	1,206,235	1,179,777
Vertafore, Inc.	High Tech Industries	Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor ⁽⁵⁾⁽⁶⁾	7/2/2026	2,000,000	1,981,064	1,898,800	0.3%
				2,000,000	1,981,064	1,898,800
VOYA CLO 2016-2, LTD.	Multi-Sector Holdings	Subordinated Notes 1.683% effective yield^(5)(7)(8)(9)	7/19/2028	22,842,661	18,392,998	12,798,743	1.9%
				22,842,661	18,392,998	12,798,743
Walker Edison Furniture Company LLC	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/26/2024	15,000,000	15,000,000	15,000,000	2.3%
		Common units - 2,000 units ^(5)(8)(10)		—	2,000,000	2,000,000	0.3%
				15,000,000	17,000,000	17,000,000
Watermill-QMC Midco, Inc.	Automotive	Equity - 2.3% partnership interest^(5)(8)(10)		—	902,277	170,530	0.0%
				—	902,277	170,530
Z Gallerie, LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor, PIK ^(5)(13)(16)	10/8/2021	4,682,375	4,491,243	2,720,928	0.4%
				4,682,375	4,491,243	2,720,928

Total non-controlled/non-affiliated investments					$819,032,531	$758,474,260	114.6%

Controlled/affiliated investments– 24.9%⁽¹⁷⁾
1888 Industrial Services, LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ^(4)(5)(12)	9/30/2021	943,344	943,344	943,344	0.1%
		Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor ⁽⁴⁾⁽⁵⁾	9/30/2021	3,144,481	3,144,481	3,144,481	0.5%
		Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor, PIK ⁽⁴⁾⁽⁵⁾	9/30/2021	7,815,751	7,022,422	6,005,623	0.9%
		Units - 7,546.76 units ^(5)(10)		—	—	—	0.0%
				11,903,576	11,110,247	10,093,448



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value		% of Net Assets⁽³⁾
Access Media Holdings, LLC	Media: Broadcasting & Subscription	Senior Secured First Lien Term Loan 10.000% PIK ^(5)(13)	7/22/2020	8,140,827	7,422,407	5,141,747		0.8%
		Common Stock - 14 units ^(5)(8)(10)		—	—	—		0.0%
		Preferred Equity - 1,400,000 units ^(5)(8)(10)		—	1,400,000	—		0.0%
		Preferred Equity - 700,000 units ^(5)(8)(10)		—	700,000	—		0.0%
		Preferred Equity - 849,800 units ^{(5)(8)(10)(12)}		—	849,800	(88,200	)	0.0%
				8,140,827	10,372,207	5,053,547
Caddo Investors Holdings 1 LLC	Forest Products & Paper	Equity - 12.250% LLC Interest ^(5)(8)(19)		—	4,972,863	5,186,935		0.8%
				—	4,972,863	5,186,935
Capstone Nutrition, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ^(4)(5)(13)	9/25/2020	23,545,552	15,652,279	9,524,176		1.4%
		Senior Secured First Lien Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ^(4)(5)(13)	9/25/2020	10,588,333	7,268,839	4,282,981		0.6%
		Senior Secured First Lien Term Loan LIBOR + 12.500%, 1.000% Floor, PIK ⁽⁴⁾⁽⁵⁾	9/25/2020	1,745,510	1,745,509	1,745,510		0.3%
		Common Stock - 2,197.8 shares ^(5)(10)		—	9	—		0.0%
		Common Stock - 3,498.5 shares^(5)(10)		—	—	—		0.0%
		Common Stock - 7,068.3 shares^(5)(10)		—	300,002	—		0.0%
				35,879,395	24,966,638	15,552,667
Charming Charlie LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ^(4)(12)	4/24/2023	3,121,470	3,121,470	3,121,470		0.5%
		Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor ⁽⁴⁾	4/24/2023	3,821,350	2,737,658	1,515,547		0.2%
		Senior Secured First Lien Term Loan 20.000%	5/15/2019	182,617	182,617	182,617		0.0%
		Common Stock - 34,923,249 shares ⁽¹⁰⁾		—	—	—		0.0%
				7,125,437	6,041,745	4,819,634
MCM 500 East Pratt Holdings, LLC	Banking, Finance, Insurance & Real Estate	Equity - 5,000,000 units ^(8)(10)		—	5,000,000	5,000,000		0.8%
				—	5,000,000	5,000,000
MCM Capital Office Park Holdings LLC	Banking, Finance, Insurance & Real Estate	Equity - 7,500,000 units ^(8)(10)		—	7,500,000	12,499,125		1.9%
				—	7,500,000	12,499,125
Medley Chiller Holdings LLC	Services: Business	Equity - 85% interest ^(8)(10)(19)		—	8,627,500	9,098,157		1.4%
				—	8,627,500	9,098,157
Nomida, LLC	Construction & Building	Equity 5,400,000 units ^(8)(10)		—	2,289,760	989,820		0.1%
				—	2,289,760	989,820
Sierra Senior Loan Strategy JV I LLC	Multi-Sector Holdings	Equity - 87.5% ownership of SIC Senior Loan Strategy JV I LLC ^(8)(12)(19)		92,050,000	92,050,000	82,515,860		12.5%
				92,050,000	92,050,000	82,515,860



Company⁽¹⁾⁽²⁾	Industry	Type of Investment	Maturity	Par Amount				Cost		Fair Value			% of Net Assets⁽³⁾
TwentyEighty, Inc.	Services: Business	Senior Secured First Lien Term Loan LIBOR + 4.000%, 1.000% Floor, 4.000% PIK ^(4)(12)	3/31/2020	6,975,035				6,975,035		6,975,035			1.1%
		Senior Secured First Lien Term Loan 0.250%, 8.750% PIK ⁽⁴⁾	3/31/2020	6,687,383				6,406,364		6,497,461			1.0%
		Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor ⁽⁴⁾	3/31/2020	323,167				321,972		319,870			0.0%
		Common Units - 58,098 units⁽¹⁰⁾		—				—		404,943			0.1%
				13,985,585				13,703,371		14,197,309

Total controlled/affiliated investments								$	186,634,331	$	165,006,502		24.9%

Money market fund – 3.7%
Federated Institutional Prime Obligations Fund ⁽¹⁸⁾		Money Market 2.460%		34,482,189				34,482,189		34,482,189			5.2%
Total money market fund				$	34,482,189			$	34,482,189	$	34,482,189

Derivative instrument - long exposure						Notional Amount				Unrealized Appreciation/(Depreciation)
Total return swap with Citibank, N.A. (Note 5)		Total Return Swap				78,776,760				(6,524,904		)
Total derivative instrument - long exposure						$	78,776,760			$	(6,524,904	)

(1)

All of the Company's investments are domiciled in the United States except for Livingston International Inc., which is domiciled in Canada and AMMC CLO 22, Limited Series 2018-22A, Apidos CLO XXIV, Series 2016-24A, Dryden 38 Senior Loan Fund, Series 2015-38A, Dryden 43 Senior Loan Fund, Series 2016-43A, Dryden 49 Senior Loan Fund, Series 2017-49A, Magnetite XIX, Limited, Sound Point CLO XX, Ltd., and VOYA CLO 2016-2, Ltd.


(2)	Unless otherwise indicated, all securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy.


(3)	Percentage is based on net assets of $662,080,199 as of December 31, 2018.


(4)	The interest rate on these loans is subject to a base rate plus 3 Month “3M” LIBOR, which at December 31, 2018 was 2.81%.


(5)	An affiliated fund that is managed by an affiliate of SIC Advisors also holds an investment in this security.


(6)	The interest rate on these loans is subject to a base rate plus 1 Month "1M" LIBOR, which at December 31, 2018 was 2.50%.


(7)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities represent a fair value of $78,405,516 or 11.8% of net assets as of December 31, 2018 and are considered restricted.


(8)	The investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act of 1940 (the "1940 Act"). Non-qualifying assets represent 21.7% of the Company's portfolio at fair value.

(9)

This investment is in the equity class of a collateralized loan obligation (CLO"). The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield is based on the current projections of this excess cash flow taking into account assumptions that have been made regarding expected prepayments.


(10)	Security is non-income producing.


(11)	A portion of this investment was sold via a participation agreement. The listed amount is the portion retained by the Company.


(12)	The investment has an unfunded commitment as of December 31, 2018. For further details, see Note 11. Fair value includes an analysis of the unfunded commitment.


(13)	The investment was on non-accrual status as of December 31, 2018.


(14)	Security is also held in the underlying portfolio of the total return swap with Citibank, N.A. (see Note 5). The Company's total exposure to The Imagine Group, LLC, and Keystone Acquisition Corp. is $13,739,430 or 2.1% and $8,760,522 or 1.3% of Net Assets as of December 31, 2018.


(15)	Represents securities in Level 2 in the ASC 820 table (see Note 4).


(16)	The interest rate on these loans is subject to a base rate plus 2 Month "2M" LIBOR, which at December 31, 2018 was 2.61%.

(17)


(18)	Represents securities in Level 1 in the ASC 820 table (see Note 4).


(19)	As a practical expedient, the Company uses NAV to determine the fair value of this investment.

The following is a summary of the ~~TRS~~total return swap ("TRS") reference assets as of December 31, 2018:



Company⁽¹⁾	Industry	Type of Investment	Maturity	Par Amount		Notional Amount⁽²⁾		Fair Value		Unrealized Appreciation/ (Depreciation)
Asurion, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured Second Lien Term Loans LIBOR + 6.500%, 1.000% Floor⁽⁴⁾	8/4/2025	$	2,945,455	$	3,006,205	$	3,004,363	$	(1,842	)
BW NHHC Holdco Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loans LIBOR + 5.000%⁽⁴⁾	5/15/2025	2,991,000		2,946,135		2,911,140		(34,995		)
Comfort Holding, LLC	Consumer Goods: Durable	Senior Secured First Lien Term Loans LIBOR + 4.750%, 1.000% Floor⁽⁴⁾	2/5/2024	7,889,949		7,788,664		7,386,965		(401,699		)
CT Technologies Intermediate Holdings, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loans LIBOR + 4.250%, 1.000% Floor⁽⁴⁾	12/1/2021	984,733		965,038		926,634		(38,404		)
Deliver Buyer, Inc.	Capital Equipment	Senior Secured First Lien Term Loans LIBOR + 5.000%, 1.000% Floor⁽⁵⁾	5/1/2024	5,996,885		5,973,054		5,996,885		23,831
Highline Aftermarket Acquisitions, LLC	Automotive	Senior Secured First Lien Term Loans LIBOR + 3.500%, 1.000% Floor⁽⁴⁾	4/26/2025	1,760,294		1,755,893		1,708,542		(47,351		)
Iqor US Inc.	Services: Business	Senior Secured First Lien Term Loans LIBOR + 5.000%, 1.000% Floor⁽⁴⁾	4/1/2021	4,474,751		4,385,256		4,001,188		(384,068		)
Keystone Acquisition Corp.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loans LIBOR + 5.250%, 1.000% Floor⁽⁵⁾	5/1/2024	1,825,622		1,825,622		1,807,731		(17,891		)
Kronos Incorporated	Services: Business	Senior Secured Second Lien Term Loans LIBOR + 8.250%, 1.000% Floor⁽³⁾⁽⁵⁾	11/1/2024	2,000,000		1,980,000		1,971,260		(8,740		)
LifeMiles Ltd.	Services: Consumer	Senior Secured First Lien Term Loans LIBOR + 5.500%, 1.000% Floor⁽³⁾⁽⁵⁾	8/18/2022	4,455,000		4,410,450		4,469,702		59,252
Lightstone Holdco LLC	Utilities: Electric	Senior Secured First Lien Term Loans LIBOR + 3.750%, 1.000% Floor⁽⁴⁾	1/30/2024	224,885		221,550		212,329		(9,221		)
Lightstone Holdco LLC	Utilities: Electric	Senior Secured First Lien Term Loans LIBOR + 3.750%, 1.000% Floor⁽⁴⁾	1/30/2024	4,187,072		4,124,993		3,953,308		(171,685		)
Midcoast Energy LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loans LIBOR + 5.500%, 1.000% Floor⁽⁵⁾	8/1/2025	1,000,000		990,000		970,000		(20,000		)
Midwest Physician Administrative Services, LLC	Healthcare & Pharmaceuticals	Senior Secured Second Lien Term Loans LIBOR + 7.000%, 0.750% Floor⁽⁴⁾	8/15/2025	3,950,000		3,910,500		3,863,890		(46,610		)
Preferred Proppants, LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loans LIBOR + 5.750%, 1.000% Floor⁽⁵⁾	7/27/2020	5,887,969		5,578,851		2,060,789		(3,518,062		)
Project Silverback Holdings Corp.	High Tech Industries	Senior Secured First Lien Term Loans LIBOR + 3.500%, 1.000% Floor⁽⁴⁾	8/21/2024	4,950,000		4,937,625		4,421,984		(515,641		)
Sungard Availability Services Capital, Inc.	Services: Business	Senior Secured First Lien Term Loans LIBOR + 7.000%, 1.000% Floor⁽⁴⁾	9/30/2021	5,682,099		5,659,993		4,801,374		(858,619		)
Tensar Corporation	Capital Equipment	Senior Secured First Lien Term Loans LIBOR + 4.750%, 1.000% Floor⁽⁵⁾	7/9/2021	6,900,187		6,831,185		6,710,432		(120,753		)
The Imagine Group, LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loans LIBOR + 4.750%, 1.000% Floor⁽⁴⁾	6/21/2022	5,910,000		5,850,900		5,509,302		(341,598		)
United Road Services, Inc.	Transportation: Cargo	Senior Secured First Lien Term Loans LIBOR + 5.250%, 1.000% Floor⁽⁴⁾	9/1/2024	1,891,500		1,882,043		1,880,151		(1,892		)
YRC Worldwide Inc.	Transportation: Cargo	Senior Secured First Lien Term Loans LIBOR + 8.500%, 1.000% Floor⁽⁴⁾	7/26/2022	3,697,343		3,752,803		3,458,569		(294,234		)
Total				$	79,604,744	$	78,776,760	$	72,026,538	$	(6,750,222	)
Total accrued interest income, net of expenses										225,318
Total unrealized depreciation on TRS										$	(6,524,904	)


(1)	All investments are domiciled in the United States.


(2)	Represents the cost of an investment in which the TRS is referenced.


(3)	The investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act.


(4)	The interest rate on these loans is subject to a base rate plus 1 Month (“1M”) LIBOR, which at December 31, 2018 was 2.50%. The interest rate is subject to a minimum LIBOR floor.


(5)	The interest rate on these loans is subject to a base rate plus 3 Month (“3M”) LIBOR, which at December 31, 2018 was 2.81%. The interest rate is subject to a minimum LIBOR floor.

See accompanying notes to consolidated financial statements.

SIERRA INCOME CORPORATION

Notes to Consolidated Financial Statements

~~June~~September 30, 2019

(unaudited)

Note 1. Organization

Sierra Income Corporation (the “Company”) was incorporated under the general corporation laws of the State of Maryland on June 13, 2011 and formally commenced operations on April 17, 2012. The Company is an externally managed, non-diversified closed-end management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the "1940 Act"). The Company is externally managed by SIC Advisors LLC (“SIC Advisors”), a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). SIC Advisors is a wholly owned subsidiary of Medley LLC, which is controlled by Medley Management Inc., a publicly traded asset management firm (NYSE: MDLY), which in turn is controlled by Medley Group LLC, an entity wholly-owned by the senior professionals of Medley LLC. The term “Medley” refers to the collective activities of Medley Capital LLC, Medley LLC, Medley Management Inc., Medley Group LLC, SIC Advisors, associated investment funds and their respective affiliates. The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s fiscal year-end is December 31^st.

On April 17, 2012, the Company successfully reached its minimum escrow requirement and officially commenced operations by issuing 1,108,033 shares of common stock to SIC Advisors for gross proceeds of $10,000,000. On July 2, 2018, the Company’s board of directors determined to terminate the Company’s offering effective as of July 31, 2018. As of ~~June~~September 30, 2019, the Company has sold a total of ~~100,462,586~~101,330,757 shares of common stock, which includes shares issued as part of the distribution reinvestment plan (see Note 13), for total gross proceeds of $1.0 billion, which includes the shares sold to SIC Advisors. The proceeds from the issuance of common stock are presented in the Company’s Consolidated Statements of Changes in Net Assets and Consolidated Statements of Cash Flows and are presented net of selling commissions and dealer manager fees.

On August 15, 2013, the Company formed Arbor Funding LLC ("Arbor"), a wholly-owned financing subsidiary.

On June 18, 2014, the Company formed Alpine Funding LLC ("Alpine"), a wholly-owned financing subsidiary.

The Company has formed and expects to continue to form certain taxable subsidiaries (the “Taxable Subsidiaries”), which are taxed as corporations for U.S. federal income tax purposes. Taxable Subsidiaries allow the Company to hold equity securities of portfolio companies organized as pass-through entities while continuing to satisfy the requirements of a RIC under the Code.

The Company’s investment objective is to generate current income, and to a lesser extent, long-term capital appreciation. The Company intends to meet its investment objective by investing primarily in the debt of privately owned U.S. companies with a focus on senior secured debt, second lien debt and, to a lesser extent, subordinated debt. The Company will originate transactions sourced through SIC Advisors’ direct origination network, and also expects to acquire debt securities through the secondary market. The Company may make equity investments in companies that it believes will generate appropriate risk adjusted returns, although it does not expect such investments to be a substantial portion of the portfolio.

Agreements and Plan of Mergers

On August 9, 2018, the Company entered into definitive agreements to acquire Medley Capital Corporation (NYSE/TASE: MCC, MCC) and Medley Management Inc. (NYSE:MDLY, "MDLY"). Pursuant to the Agreement and Plan of Merger, dated as of August 9, 2018, by and between MCC and ~~Sierra~~the Company (the "MCC Merger Agreement"), MCC would, on the terms and subject to the conditions set forth in the MCC Merger Agreement, merge with and into the Company, with the Company as the surviving ~~entity~~company (the "Combined Company") in the merger (the "MCC Merger").Under the MCC Merger, each share of MCC’s common stock issued and outstanding immediately prior to the MCC Merger effective time, other than shares of MCC’s common stock held by MCC, ~~Sierra~~the Company or their respective wholly owned subsidiaries, would be converted into the right to receive 0.8050 shares of the Company’s common stock.

Simultaneously, pursuant to the Agreement and Plan of Merger (the "MDLY Merger Agreement" together with the MCC Merger Agreement, the “Merger Agreements”), dated as of August 9, 2018, by and among MDLY, the Company, and Sierra Management, Inc., ~~a newly formed Delaware corporation and~~ a wholly owned subsidiary of the Company ("Merger Sub"), MDLY would, on the terms and subject to the conditions set forth in the MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the Merger (the MDLY Merger together with the MCC Merger, the "Mergers"), and MDLY’s existing asset management business would continue to operate as a wholly owned subsidiary of the Combined Company. In the MDLY Merger, each share of MDLY Class A common stock, issued and outstanding immediately prior to the MDLY Merger effective time, other than Dissenting Shares (as defined in the

MDLY Merger Agreement) and shares of MDLY Class A common stock held by MDLY,

the Company or their respective wholly owned subsidiaries, would be converted into the right to receive (i) 0.3836 shares of our common stock; plus (ii) cash in an amount equal to $3.44 per share. In addition, MDLY's stockholders would have the right to receive certain dividends and/or other payments.

On July 29, 2019, the Company entered into amended and restated definitive agreements with MCC and MDLY. Pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019 (the “Amended MCC Merger Agreement”), by and between MCC and the Company, pursuant to which MCC will, on the terms and subject to the conditions set forth in the Amended MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC Merger. In the MCC Merger, each share of MCC’s common stock, other than shares of MCC’s common stock held by MCC, the Company or their respective wholly owned subsidiaries, will be exchanged for the right to receive (i) 0.68 shares of the Company’s common stock if the attorneys’ fees of plaintiffs’ counsel and litigation expenses paid or incurred by plaintiffs’ counsel or advanced by plaintiffs in connection with the consolidated actions pending in the Court of Chancery of the State of Delaware (the “Delaware Court of Chancery”) under caption of In re Medley Capital Corporation Stockholder Litigation, C.A. No. 2019-0100-KSJM (the “MCC Stockholder Action” and such fees and expenses, the “Plaintiff Attorney Fees”) are less than or equal to $10,000,000, (ii) 0.66 shares of the Company’s common stock if the Plaintiff Attorney Fees are equal to or greater than $15,000,000, and (iii) between 0.68 and 0.66 per share of the Company’s common stock if the Plaintiff Attorney Fees are greater than $10,000,000 but less than $15,000,000, calculated on a descending basis, based on straight line interpolation between $10,000,000 and $15,000,000; provided that cash will be paid in lieu of fractional shares of the Company’s common stock issuable in the MCC Merger.

Pursuant to the Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019 (the “Amended MDLY Merger Agreement”), by and among MDLY, the Company, and Merger Sub, pursuant to which MDLY will, on the terms and subject to the conditions set forth in the Amended MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY Merger. In the MDLY Merger, each share of MDLY Class A Common Stock, issued and outstanding immediately prior to the MDLY Merger effective time, other than shares of MDLY Class A Common Stock held by MDLY, the Company or their respective wholly owned subsidiaries (the “Excluded MDLY Shares”) and the Dissenting Shares (as defined in the Amended MDLY Merger Agreement), held, immediately prior to the MDLY Merger effective time, by any person other than a Medley LLC Unitholder (as defined below), will be exchanged for (i) 0.2668 shares of the Company’s common stock; provided that cash will be paid in lieu of fractional shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.96 per share. In addition, in the MDLY Merger, each share of MDLY Class A Common Stock issued and outstanding immediately prior to the MDLY Merger effective time, other than the Excluded MDLY Shares and the Dissenting Shares, held, immediately prior to the MDLY Merger effective time, by holders of the issued and outstanding limited liability company interests of Medley LLC (the “Medley LLC Units” and, holders of the Medley LLC Units at any time on or after July 29, 2019, the “Medley LLC Unitholders”) will be exchanged for (i) 0.2072 shares of the Company’s common stock; provided that cash will be paid in lieu of fractional shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.66 per share.

As a result of the foregoing, the investment management function relating to the operation of the Combined Company will be internalized. Pursuant to the terms of the Amended MCC Merger Agreement, the consummation of the MCC Merger is conditioned upon the satisfaction or waiver of each of the conditions to closing under the Amended MDLY Merger Agreement and the consummation of the MDLY Merger. However, pursuant to the terms of the Amended MDLY Merger Agreement, the consummation of the MDLY Merger is not contingent upon the consummation of the MCC Merger. If the Mergers are, ~~successfully~~or only the MDLY Merger is consummated, ~~our~~the Company’s common stock ~~would~~will be listed on the New York Stock Exchange under the symbol ~~"SRA" and the Tel Aviv Stock Exchange,~~"SRA, with such ~~listings~~listing expected to be effective as of the closing date of the ~~Mergers. Upon completion~~Mergers or only the MDLY Merger, as applicable. If the MCC Merger is also consummated, the Company’s common stock will be listed on the Tel Aviv Stock Exchange, with such listing expected to be effective as of the ~~Mergers, the investment portfolios of MCC and the Company would be combined, Merger Sub, as a successor to MDLY, would be a wholly owned subsidiary~~closing date of the ~~Combined Company, and the Combined Company would be internally managed by MCC Advisors LLC, its wholly controlled adviser subsidiary.~~Mergers.

Set forth below is a description of the Decision (as defined below), which should be read in the context of the impact that the Decision and corresponding Settlement ~~Term Sheet~~ (as defined below) ~~may have on the Company with respect to any potential amendment to the Merger Agreements.~~.

a “shopping process” for MCC on terms proposed by FrontFour in its complaint. The Court held that MCC’s directors breached their fiduciary duties in entering into the MCC Merger, but rejected FrontFour’s claim that the Company aided and abetted those breaches of fiduciary duties. The Court ordered the defendants to issue corrective disclosures consistent with the Decision, and enjoined a vote of MCC’s stockholders on the MCC Merger until such disclosures have been made and stockholders have had the opportunity to assimilate this information. On March 20, 2019, another purported stockholder class action was commenced by Stephen Altman against Brook Taube, Seth Taube, Jeff Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, Mark Lerdal, and John E. Mack in the Delaware Court of Chancery, captioned Altman v. Taube, Case No. 2019-0219 (the “Altman Action”). The complaint alleged that the defendants breached their fiduciary duties to stockholders of MCC in connection with the vote of MCC stockholders on the proposed mergers. On April 8, 2019, the Delaware Court of Chancery granted a stipulation consolidating the MCC Stockholder Action and the Altman Action, designating the amended complaint in the MCC Stockholder Action as the operative complaint, and designating the plaintiffs in the MCC Stockholder Action and their counsel the lead plaintiffs and lead plaintiffs’ counsel, respectively.

On April 15, 2019, certain parties ~~in the Class Action~~ reached agreement on the principal terms of a settlement of the MCC Stockholder Action, which ~~are~~were contained in a ~~binding~~ term sheet, dated April 15, 2019 (the “Settlement Term Sheet”),. On July 29, 2019, MDLY entered into a Stipulation of Settlement (and, as amended, on August 8, 2019, the “Stipulation”) by and among MCC, Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, ~~MCC,~~MDLY, MCC Advisors LLC, Medley LLC, and Medley Group LLC (the “Medley Parties”), on the one hand, and FrontFour, on behalf of itself and a class of similarly situated stockholders of MCC, on the other ~~hand.~~ hand, in connection with the MCC Stockholder Action.

The ~~Settlement Term Sheet is intended to form~~Stipulation provides for the ~~basis~~settlement of ~~a definitive stipulation of settlement~~all claims brought against the Medley Parties in the ~~Class~~MCC Stockholder Action. ~~The Settlement Term Sheet provides that~~Under the Stipulation, MCC ~~will~~agreed to seek to obtain the agreement and/or consent of the Company to effect certain amendments to (i) the MCC Merger Agreement and (ii) the MDLY Merger Agreement. If the foregoing amendments are entered into they will, among other matters (as described in further detail in the Settlement Term Sheet): (a) extend the Outside Date (as defined in the Merger Agreements) to October 31, 2019; (b) permit MCC’s special committee of independent directors (the “MCC Special Committee”) to undertake a sixty-day “go shop” process to solicit superior transactions toAgreement (together with the MCC Merger ~~and (c)~~Agreement, the “Merger Agreements”), which have been reflected in the revised Merger Agreements annexed to the Stipulation. The Stipulation also provides for, if the MCC Merger is consummated, ~~create~~the creation of a settlement fund, consisting of $17 million in cash and $30 million of the Company’s stock, with the number of shares of the Company’s stock to be calculated using the pro forma NAV reported in the future proxy supplement describing the amendments to the MCC Merger Agreement, which will be distributed to eligible members of the Settlement Class (as defined in the ~~Settlement Term Sheet)~~Stipulation). ~~In connection with~~Under the ~~Settlement Term Sheet,~~Stipulation, MDLY ~~has executed an acknowledgement and agreement~~also consented to ~~take~~ certain actions, including consenting to certain amendments to the Merger Agreements That have been reflected in ~~furtherance of~~ the ~~transactions contemplated thereby.~~

revised Merger Agreements annexed to the Stipulation. In addition, in connection with the ~~Settlement Term Sheet provides that~~Stipulation, on July 29, 2019, MCC ~~and FrontFour will enter~~entered into a Governance Agreement with FrontFour Capital Group LLC, FrontFour Master Fund, Ltd., FrontFour Capital Corp., FrontFour Opportunity Fund, David A. Lorber, Stephen E. Loukas and Zachary R. George, pursuant to which, among other matters, FrontFour ~~will be~~is subject to customary standstill restrictions and be required to vote in favor of the MCC Merger at a meeting of stockholders to approve the Amended MCC Merger ~~Agreement and in favor of the directors nominated by our board of directors for election at MCC’s 2019 annual meeting of stockholders.~~Agreement.

Under the Settlement Term Sheet, the parties have agreed to cooperate to reduce the agreements reflected therein to a definitive stipulation of settlement (the “Settlement Stipulation”), and to obtain approval of Court of Chancery of the State of Delaware as soon as reasonably practicable thereafter. The ~~Settlement~~ Stipulation ~~will provide~~also provides for mutual releases between and among FrontFour and the Settlement Class, on the one hand, and the Medley Parties, on the other hand, of all claims that were or could have been asserted in the ~~Class~~MCC Stockholder Action. The Medley Parties will also release all claims arising out of or relating to the prosecution and settlement of the ~~Class~~MCC Stockholder Action and all claims that were or could have been asserted (other than claims against ~~NexPoint Advisors, L.P. and its affiliates)~~the Highland Parties, as defined in the Stipulation) in the litigation pending in the United States District Court for the Southern District of New York captioned Medley Capital Corporation v. FrontFour Capital Group LLC, et al., No. 1:19-cv-02055-LTS (S.D.N.Y.) (the “Federal Action”), and FrontFour and the Settlement Class will release all claims arising out of or relating to the prosecution and settlement of the Federal Action.

~~Under the Settlement Term Sheet,~~The Stipulation further provides that MCC and FrontFour ~~have also undertaken to~~shall work together in good faith to agree to supplemental disclosures relating to the transactions contemplated by the Merger Agreements consistent with the Decision.

~~If the contemplated amendments~~The Stipulation is subject to the ~~Merger Agreements have not been entered into by May 15,~~approval of the Delaware Court of Chancery. On September 26, 2019, FrontFour filed a motion seeking an order approving the ~~Settlement Term Sheet may be terminated by MCC or FrontFour.~~Stipulation, and also moved for the Delaware Court of Chancery to award plaintiffs’ counsel attorneys’ fees in the amount of $22 million and expenses in the amount of $420,334.97 (the “Fee Application”). The ~~contemplated amendments~~Delaware Court of Chancery held a hearing to consider the Stipulation and the Fee Application on October 24, 2019. The parties submitted supplemental briefing with respect to the ~~Merger Agreements require~~Stipulation on October 31, 2019. To date, the ~~agreement~~Delaware Court of Chancery has not issued a decision with respect to approval of the ~~Company and there can be no assurance that such agreement will be obtained~~Stipulation or ~~that agreements on~~ the ~~amendments to the Merger Agreements will be reached.~~Fee Application.

Note 2. Significant Accounting Policies

Basis of Presentation

The Company follows the accounting and reporting guidance in the Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 946 - Financial Services, Investment Companies ("ASC 946"). The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles

("GAAP") and include the accounts of the Company and its wholly-owned subsidiaries, Alpine, Arbor, and the Taxable Subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. All references made to the "Company," "we," and "us" herein include Sierra Income Corporation and its consolidated subsidiaries, except as stated otherwise. Additionally, the accompanying consolidated financial statements of the Company and related financial information have been prepared pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited interim financial results contain all adjustments and reclassifications, which are of a normal recurring nature, that are necessary for the fair presentation of financial statements for the periods presented. Therefore, this Form 10-Q should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2018, which was filed with the U.S. Securities and Exchange Commission ("SEC") on April 1, 2019. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending December 31, 2019.

Cash and Cash Equivalents

The Company considers cash equivalents to be highly liquid investments or investments with original maturities of three months or less. Cash and cash equivalents include deposits in money market mutual funds. The Company deposits its cash in major United States financial institutions which, at times, may be in excess of the Federal Deposit Insurance Corporation insurance limits.

Offering Costs

Offering costs incurred directly by the Company are expensed in the period incurred.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Deferred Financing Costs

Financing costs, incurred in connection with the Company’s credit facilities (see Note 6), are deferred and amortized over the life of each corresponding facility.

Deferred Transaction Costs

Transaction costs, incurred in connection with the Mergers by and among the Company, MCC, MDLY and Merger Sub (see Note 1), are deferred until the closing or termination of the Mergers.

Indemnification

In the normal course of business, the Company enters into contractual agreements that provide general indemnifications against losses, costs, claims and liabilities arising from the performance of individual obligations under such agreements. The Company has had no claims or payments pursuant to such agreements. The Company’s individual maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on management’s experience, the Company expects the risk of loss to be remote.

Revenue Recognition

Interest income, adjusted for amortization of premiums and accretion of discounts, is recorded on an accrual basis. The Company records amortized or accreted discounts or premiums as interest income using the effective interest method. Dividend income, which represents dividends from equity investments and distributions from subsidiaries, if any, is recognized on an accrual basis to the extent that the Company expects to collect such amount.

Fee income associated with investments in portfolio companies is recognized as income in the period that the Company becomes entitled to such fees. Other fees related to loan administration requirements are capitalized as deferred revenue and recorded into income over the respective period.

Prepayment penalties received by the Company for debt instruments paid back to the Company prior to the maturity date are recorded as income upon receipt.

The Company holds debt investments that contain a payment-in-kind (PIK) interest provision. PIK interest, which represents contractually deferred interest added to the investment balance that is generally due at maturity, is recorded on an accrual basis to

the extent such amounts are expected to be collected. PIK interest is not accrued if the Company does not expect the issuer to be able to pay all principal and interest when due. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, the Company earned PIK interest of ~~$1,228,921~~$1,817,434 and ~~$2,320,079,~~$4,137,513, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, the Company earned PIK interest of ~~$794,776~~$922,929 and ~~$1,443,899,~~$2,366,828, respectively.

Investment transactions are accounted for on a trade-date basis. Realized gains or losses on investments are measured by the difference between the net proceeds from the disposition and the amortized cost basis of investment, without regard to unrealized gains or losses previously recognized. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, the Company recognized realized losses on investments of ~~$6,991,921~~$10,680,838 and ~~$12,371,727,~~$23,052,565, respectively, related to certain non-cash restructuring transactions, which are recorded on the Consolidated Statements of Operations as a component of net realized gain/(loss) from non-controlled/non-affiliated investments and/or net realized gain/(loss) from controlled/affiliated investments. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, the Company recognized realized losses on investments of $0$18,551,535 and ~~$26,781,391,~~$45,332,926, respectively, related to certain non-cash restructuring transactions, which are recorded on the Consolidated Statements of Operations as a component of net realized gain/(loss) from non-controlled/non-affiliated investments and/or net realized gain/(loss) from controlled/affiliated investments.The Company reports changes in fair value of investments that are measured at fair value as a component of the net change in unrealized appreciation/(depreciation) on investments in the Consolidated Statements of Operations. For total return swap transactions (see Note 5), periodic payments are received or made at the end of each settlement period, but prior to settlement are recorded as realized gains or losses on total return swap in the Consolidated Statements of Operations.

Management reviews all loans that become 90 days or more past due on principal and interest or when there is reasonable doubt that principal or interest will be collected for possible placement on management's designation of non-accrual status. Accrued interest is generally reserved when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment regarding collectability. Loans on non-accrual status are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current, although the Company may make exceptions to this general rule if the loan has sufficient collateral value and is in the process of collection. As of ~~June~~September 30, 2019, ~~seven~~nine portfolio companies were on non-accrual status with a cost of ~~$69,570,444,~~$76,691,668, or ~~7.7%~~9.2% of the cost of the Company's portfolio, and a fair value of ~~$14,633,030,~~$24,424,986, or ~~1.8%~~3.3% of the fair value of the Company's portfolio. As of December 31, 2018, seven portfolio companies were on non-accrual status with a cost of $87,597,395, or 8.7% of the cost of the Company's portfolio, and a fair value of $41,109,398, or 4.5% of the fair value of the Company's portfolio.

Interest income from investments in the “equity” class of a collateralized loan obligation ("CLO") security (typically subordinated notes) is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financial Assets. The Company monitors the expected cash flows from these investments, including the expected residual payments, and the effective yield is determined and updated periodically. Any difference between the cash distribution received and the amount calculated pursuant to the effective interest method is recorded as an adjustment to the cost basis of such investments.

Investment Classification

The Company classifies its investments in accordance with the requirements of the 1940 Act. Under the 1940 Act, the Company would be deemed to “control” a portfolio company if it owns more than 25% of its outstanding voting securities and/or had the power to exercise control over the management or policies of such portfolio company. The Company refers to such investments in portfolio companies that it “controls” as “Controlled Investments.” Under the 1940 Act, the Company would be deemed to be an “Affiliated

Person” of a portfolio company if it owns at least 5%, but no more than 25%, of the portfolio company’s outstanding voting securities or if it is under common control with such portfolio company. The Company refers to such investments in Affiliated Persons as “Affiliated Investments.”

Valuation of Investments

The Company applies fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820 - Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, the Company has categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as discussed in Note 4. Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. The Company weighs the use of third-party broker quotations, if any, in determining fair value based on management's understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by the Company’s board of directors based upon input from management and third party valuation firms. Because these investments are illiquid and there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

Investments in investment companies are valued at fair value. Fair values are generally determined utilizing the net asset value ("NAV") supplied by, or on behalf of, management of each investment company, which is net of management and incentive fees or allocations charged by the investment company and is in accordance with the "practical expedient", as defined by ASC 820. NAVs received by, or on behalf of, management of each investment company are based on the fair value of the investment company's underlying investments in accordance with policies established by management of each investment company, as described in each of their financial statements and offering memorandum.

The methodologies utilized by the Company in estimating the fair value of its investments categorized as Level 3 generally fall into the following two categories:

The “Market Approach” uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets and liabilities, such as a business.

The “Income Approach” converts future amounts (for example, cash flows or income and expenses) to a single current (that is, discounted) amount. When the Income Approach is used, the fair value measurement reflects current market expectations about those future amounts.

The Company uses third-party valuation firms to assist the board of directors in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, the Company uses a combined market yield analysis and an enterprise model of valuation. In applying the market yield analysis, the value of the Company’s loans is determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, the Company uses a waterfall analysis which takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure into consideration. To estimate the enterprise value of the portfolio company, the Company 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 and information that the Company utilizes when applying the Market Approach for performing investments includes, among other things:

valuations of comparable public companies (“Guideline Comparable Approach”);

recent sales of private and public comparable companies (“Guideline Comparable Approach”);

recent acquisition prices of the company, debt securities or equity securities (“Recent Arms-length Transaction”);

external valuations of the portfolio company, offers from third parties to buy the company (“Estimated Sales Proceeds Approach”);

subsequent sales made by the company of its investments (“Expected Sales Proceeds Approach”); and

estimating the value to potential buyers.

The methodologies and information that the Company utilizes when applying the Income Approach for performing investments includes:

discounting the forecasted cash flows of the portfolio company or securities (“Discounted Cash Flow” or “DCF” Approach); and

Black-Scholes model or simulation models or a combination thereof (Income Approach – Option Model) with respect to the valuation of warrants.

For non-performing investments, the Company may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model. The Company may estimate the fair value of warrants based on a model such as the Black-Scholes model or simulation models or a combination thereof.

Over-the-counter derivative contracts, such as total return swaps (see Note 5) are fair valued using models that measure the change in fair value of reference assets underlying the swaps offset against any fees payable to the swap counterparty. The fair values of the reference assets underlying the swaps are determined using similar methods as described above for debt and equity investments where the Company also invests directly in such assets.

The Company undertakes a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:

the quarterly valuation process begins with each portfolio investment being initially valued by the Company's valuation professionals;

preliminary valuation conclusions are then documented and discussed with senior management; and

an independent valuation firm engaged by the Company’s board of directors prepares an independent valuation report for approximately one-third of the portfolio investments each quarter on a rotating quarterly basis on non-fiscal year-end quarters, such that each of these investments will be valued by an independent valuation firm at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms.

In addition, all of the Company’s investments are subject to the following valuation process:

management reviews preliminary valuations and its own independent assessment;

the independent audit committee of the Company’s board of directors reviews the preliminary valuations of senior management and independent valuation firms; and

the Company’s board of directors discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on the input of SIC Advisors, the respective independent valuation firms and the audit committee.

The Company’s investments in subordinated notes are carried at fair value, which is based on a discounted cash flow model. The discounted cash flow model models both the underlying collateral (assets) and the liabilities of the CLO capital structure. The discounted cash flow model uses a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated cash flows of the assets. The discounted cash flow model distributes the asset cash flows to the liability structure based on the payment priorities and discounts them back using appropriate market discount rates based on discount rates for comparable CLOs. The assumptions are based on available market data as well as management estimates. Additional data is used to validate the results from the discounted cash flow method, such as analysis of relevant data observed in the CLO market, review of quotes, where available, recent acquisitions and observable transactions in the subordinated notes, among other factors.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Fair Value of Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, including cash and accounts payable and accrued expenses, approximate fair value due to their short-term nature. The carrying amounts and fair values of the Company’s long-term obligations are discussed in Note 4.

U.S. Federal Income Taxes

The Company has elected, and intends to qualify annually, to be treated as a RIC under Subchapter M of the Code. In order to continue to qualify as a RIC, among other things, the Company is required to meet certain source of income and asset diversification requirements and timely distribute to its stockholders at least 90% of the sum of its investment company taxable income ("ICTI") including PIK, as defined by the Code, and net tax-exempt interest income (which is the excess of the Company’s gross tax-exempt interest income over certain disallowed deductions) for each taxable year in order to be eligible for tax treatment under Subchapter M of the Code. Depending on the level of ICTI earned in a tax year, the Company may choose to carry forward ICTI in excess of

current year dividend distributions into the next tax year. Any such carryover ICTI must be distributed before the end of that next tax year through a dividend declared prior to filing the final tax return related to the year which generated such ICTI.

The Company will be subject to a nondeductible U.S. federal excise tax of 4% on undistributed income if it does not distribute at least 98% of its ordinary income in any calendar year and 98.2% of its capital gain net income for each one-year period ending on October 31 of such calendar year. To the extent the Company determines that its estimated current year annual taxable income will be in excess of estimated current year dividend distributions for U.S. federal excise tax purposes, the Company accrues U.S. federal excise tax, if any, on estimated excess taxable income as taxable income is earned. For the year ended December 31, 2018, the Company distributed at least 98% of its ordinary income and 98.2% of its capital gains, and as such, there was no excise tax accrual or expense recorded.

The Taxable Subsidiaries accrue income taxes payable based on the applicable corporate rates on the unrealized gains generated by the investments held by the Taxable Subsidiaries. As of ~~June~~September 30, 2019 and December 31, 2018, the Company recorded a deferred tax liability of $0$442,842 and $0, respectively, on the Consolidated Statements of Assets and Liabilities. The change in deferred tax liabilities is included as a component of net realized and unrealized gain/(loss) on investments on the Consolidated Statements of Operations.

ICTI generally differs from net investment income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. The Company may be required to recognize ICTI in certain circumstances in which it does not receive cash. For example, if the Company holds debt obligations that are treated under applicable tax rules as having original issue discount ("OID"), the Company must include in ICTI 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 the Company in the same taxable year. The Company may also have to include in ICTI other amounts that it has not yet received in cash, such as PIK interest income and interest income from investments that have been classified as non-accrual for financial reporting purposes. Interest income on non-accrual investments is not recognized for financial reporting purposes, but generally is recognized in ICTI. Because any OID or other amounts accrued will be included in the Company’s ICTI for the year of accrual, the Company may be required to make a distribution to its stockholders in order to satisfy the minimum distribution requirements, even though the Company will not have received and may not ever receive any corresponding cash amount. ICTI also excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

Although the Company files federal and state tax returns, the Company's major tax jurisdiction is the United States federal jurisdiction. The Company’s federal and state tax returns for the prior three fiscal years remain open, subject to examination by the Internal Revenue Service.

The Company accounts for income taxes in conformity with ASC Topic 740 - Income Taxes (“ASC 740”). ASC 740 provides guidelines for how uncertain tax positions should be recognized, measured, presented and disclosed in financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions deemed to meet the “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 Statements of Operations. There were no interest or penalties due to material uncertain income tax positions at ~~June~~September 30, 2019 and 2018. For the ~~three and six~~nine months ended ~~June~~September 30, 2019 the company recognized $828,611 relating to state income taxes and ~~$3,236,233~~$2,000,000 relating to federal income taxes as a result of the sale of Medley Chiller Holdings LLC. These taxes are recorded on the Consolidated Statements of Operations as a component of net realized gain/(loss) from controlled/affiliated investments.

The following table reflects, for U.S. federal income tax purposes, the sources of the cash distributions that the Company has paid on its common stock for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	Six Months Ended June 30, 2019				Six Months Ended June 30, 2018				Nine Months Ended September 30, 2019				Nine Months Ended September 30, 2018
Source of Distribution	Distribution Amount		Percentage		Distribution Amount		Percentage		Distribution Amount		Percentage		Distribution Amount		Percentage
Ordinary income	$	31,787,931	100.0	%	$	31,076,562	100.0	%	$	47,902,108	100.0	%	$	46,592,535	100.0	%
Net realized gain	—		—		—		—		—		—		—		—
Return of capital	—		—		—		—		—		—		—		—
Distributions on a tax basis	$	31,787,931	100.0	%	$	31,076,562	100.0	%	$	47,902,108	100.0	%	$	46,592,535	100.0	%

As of ~~June~~September 30, 2019, for federal income tax purposes, the aggregate gross unrealized appreciation and the aggregate gross unrealized depreciation are ~~$13,510,784~~$16,480,016 and ~~$114,422,597,~~$115,579,450, respectively. As of ~~June~~September 30, 2019, net unrealized depreciation is ~~$100,911,813~~$99,099,434 based on a tax basis cost of ~~$905,933,834.~~$836,050,091.

Segments

The Company invests in various industries. The Company separately evaluates the performance of each of its investment relationships. However, because each of these investment relationships has similar business and economic characteristics, they have been aggregated into a single investment segment. All applicable segment disclosures are included in or can be derived from the Company’s consolidated financial statements (See Note 3).

Company Investment Risk, Concentration of Credit Risk, and Liquidity Risk

SIC Advisors has broad discretion in making investments for the Company. Investments generally consist of debt instruments that may be affected by business, financial market or legal uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the Company’s activities and the value of its investments. In addition, the value of the Company’s portfolio may fluctuate as the general level of interest rates fluctuates.

The value of the Company’s investments in loans and bonds may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between smaller companies, such as the Company’s borrowers, and those for which market yields are observable, increase materially.

The Company’s assets may, at any time, include securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

~~Recently Adopted~~Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“ASU 2018-13”) (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 eliminates, adds and modifies certain disclosure requirements for fair value measurements. This guidance is effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently assessing the potential impact of this guidance to the fair value disclosures.

In October 2018, the SEC adopted amendments (the Amendments) to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, U.S. GAAP requirements, or changes in the information environment. In part, the Amendments require an investment company to present distributable earnings in total, rather than showing the three components of distributable earnings. The compliance date for the Amendments is for all filings on or after November 5, 2018. Management has adopted the Amendments and included the required disclosures in the Company’s consolidated financial statements.

In October 2018, the SEC adopted an amendment requiring registrants to report a reconciliation of changes in stockholders’ equity, either as a separate statement or in the notes, and the analysis should reconcile the beginning balance to the ending balance of each caption in stockholders’ equity for each period for which an income statement is required to be filed. The compliance date for the amendment is for all interim period filings on or after November 5, 2018. Management has adopted the amendment and included the required reconciliation in the Company’s Consolidated Statement of Changes in Net Assets.

Note 3. Investments

The following table shows the amortized cost and the fair value of the Company’s portfolio investments as of ~~June~~September 30, 2019:


	Amortized Cost		Percentage		Fair Value		Percentage		Amortized Cost		Percentage		Fair Value		Percentage
Senior secured first lien term loans	$	464,604,012	51.5	%	$	401,886,948	50.0	%	$	419,330,178	50.1	%	$	365,464,032	49.5	%
Senior secured second lien term loans	160,476,041		17.8		149,900,159		18.6		158,038,539		18.8		142,716,810		19.4
Senior secured first lien notes	30,965,000		3.4		30,106,400		3.7		15,965,000		1.9		15,095,000		2.0
Subordinated notes	73,542,052		8.2		67,042,643		8.3		72,058,258		8.6		62,478,039		8.5
Sierra Senior Loan Strategy JV I LLC	92,050,000		10.3		76,555,675		9.5		92,050,000		11.0		73,409,359		10.0
Equity/warrants	79,638,418		8.8		79,530,206		9.9		80,168,137		9.6		77,787,417		10.6
Total	$	901,275,523	100.0	%	$	805,022,031	100.0	%	$	837,610,112	100.0	%	$	736,950,657	100.0	%

The following table shows the amortized cost and the fair value of the Company’s portfolio investments as of December 31, 2018:



	Amortized Cost		Percentage		Fair Value		Percentage
Senior secured first lien term loans	$	532,302,573	52.9	%	$	479,593,279	52.0	%
Senior secured second lien term loans	174,258,971		17.3		169,923,547		18.4
Senior secured first lien notes	37,930,308		3.8		35,495,093		3.8
Subordinated notes	92,050,000		9.2		82,515,860		8.9
Sierra Senior Loan Strategy JV I LLC	77,930,062		7.7		66,187,857		7.2
Equity/warrants	91,194,948		9.1		89,765,126		9.7
Total	$	1,005,666,862	100.0	%	$	923,480,762	100.0	%

The following table shows the composition of the Company’s portfolio investments by industry classification at amortized cost and fair value as of ~~June~~September 30, 2019:


Industry Classification	Amortized Cost		Percentage		Fair Value		Percentage		Amortized Cost		Percentage		Fair Value		Percentage
Services: Business	$	158,200,629	17.6	%	$	133,931,579	16.6	%	$	128,897,870	15.4	%	$	101,604,649	13.8	%
Multi-Sector Holdings	164,378,752		18.2	%	142,385,017		17.7	%	162,902,045		19.4	%	134,674,308		18.3	%
High Tech Industries									93,605,112		11.2	%	88,034,986		11.9	%
Healthcare & Pharmaceuticals	92,131,243		10.2	%	71,205,546		8.8	%	58,131,549		6.9	%	56,763,857		7.7	%
High Tech Industries	71,556,298		7.9	%	66,061,383		8.2	%
Aerospace & Defense	49,874,115		5.5	%	48,953,662		6.1	%
Banking, Finance, Insurance & Real Estate	42,735,656		4.7	%	45,797,605		5.7	%	42,741,241		5.1	%	49,008,235		6.7	%
Construction & Building	45,735,032		5.1	%	44,572,576		5.5	%	44,977,564		5.4	%	41,879,474		5.7	%
Aerospace & Defense									34,875,162		4.2	%	34,492,144		4.7	%
Wholesale	34,570,004		3.8	%	37,137,046		4.6	%	34,545,040		4.1	%	28,872,478		3.9	%
Transportation: Cargo	19,538,627		2.2	%	19,499,335		2.4	%
Hotel, Gaming & Leisure									21,409,970		2.6	%	21,310,730		2.9	%
Automotive	27,046,261		3.0	%	25,585,576		3.2	%	26,947,836		3.2	%	24,397,660		3.3	%
Consumer Goods: Durable	23,235,000		2.6	%	24,157,288		3.0	%	22,948,750		2.7	%	24,283,577		3.3	%
Hotel, Gaming & Leisure	20,533,856		2.3	%	20,446,997		2.5	%
Capital Equipment	17,743,870		2.0	%	17,179,706		2.1	%	17,667,293		2.1	%	17,221,868		2.3	%
Containers, Packaging & Glass	16,626,267		1.8	%	15,761,957		2.0	%	16,445,018		2.0	%	15,788,747		2.1	%
Media: Diversified & Production	14,279,258		1.6	%	10,524,312		1.3	%
Services: Consumer	15,600,000		1.7	%	15,469,960		1.9	%	15,575,000		1.9	%	15,575,000		2.1	%
Energy: Oil & Gas	22,422,175		2.5	%	14,117,361		1.8	%	21,875,222		2.6	%	10,300,082		1.4	%
Transportation: Cargo									13,788,110		1.6	%	13,754,049		1.9	%
Chemicals, Plastics & Rubber	11,432,861		1.3	%	11,363,049		1.4	%	11,426,702		1.4	%	10,979,042		1.5	%
Media: Diversified & Production									14,279,258		1.7	%	10,524,291		1.4	%
Forest Products & Paper									6,478,173		0.8	%	7,073,932		1.0	%
Transportation: Consumer	7,003,197		0.8	%	6,930,182		0.9	%	6,984,666		0.8	%	6,833,805		0.9	%
Forest Products & Paper	6,427,437		0.7	%	6,893,311		0.9	%
Environmental Industries									5,032,333		0.6	%	6,425,492		0.9	%
Media: Advertising, Printing & Publishing	8,860,270		1.0	%	6,749,195		0.8	%	8,865,852		1.1	%	5,116,715		0.7	%
Environmental Industries	5,043,425		0.6	%	6,436,584		0.8	%
Media: Broadcasting & Subscription	10,408,142		1.2	%	4,727,451		0.6	%
Consumer Goods: Non-durable	4,937,500		0.5	%	4,694,081		0.6	%	4,925,000		0.6	%	4,682,197		0.6	%
Metals & Mining	3,335,598		0.4	%	3,335,599		0.4	%	3,364,236		0.4	%	3,467,115		0.5	%
Media: Broadcasting & Subscription									10,496,342		1.3	%	2,195,453		0.3	%
Retail	7,620,050		0.8	%	1,105,673		0.1	%	8,424,768		1.0	%	1,690,771		0.2	%
Total	$	901,275,523	100.0	%	$	805,022,031	100.0	%	$	837,610,112	100.0	%	$	736,950,657	100.0	%

The following table shows the composition of the Company’s portfolio investments by industry classification at amortized cost and fair value as of December 31, 2018:



Industry Classification	Amortized Cost		Percentage		Fair Value		Percentage
Services: Business	$	168,346,878	16.7	%	$	156,398,957	16.9	%
Multi-Sector Holdings	169,027,682		16.8		147,751,337		16.0
Healthcare & Pharmaceuticals	87,119,313		8.7		75,750,145		8.2
High Tech Industries	78,073,842		7.8		72,744,712		7.9
Aerospace & Defense	55,819,556		5.6		55,177,303		6.0
Banking, Finance, Insurance & Real Estate	48,224,496		4.8		53,079,983		5.7
Construction & Building	51,971,781		5.2		50,606,634		5.5
Wholesale	39,508,090		3.9		42,859,121		4.6
Hotel, Gaming & Leisure	34,674,478		3.4		34,305,563		3.7
Transportation: Cargo	26,079,018		2.6		25,736,261		2.8
Automotive	27,246,738		2.7		25,711,838		2.8
Consumer Goods: Durable	23,711,250		2.4		23,617,293		2.6
Chemicals, Plastics & Rubber	22,340,768		2.2		22,245,236		2.4
Containers, Packaging & Glass	17,132,082		1.7		16,165,041		1.8
Media: Advertising, Printing & Publishing	16,288,815		1.6		15,298,916		1.7
Energy: Oil & Gas	25,566,916		2.5		14,779,343		1.6
Media: Diversified & Production	15,247,000		1.5		14,321,399		1.6
Services: Consumer	11,931,429		1.2		11,801,389		1.3
Capital Equipment	11,187,500		1.1		11,187,500		1.2
Retail	11,672,849		1.2		8,605,149		0.9
Forest Products & Paper	7,476,045		0.7		7,690,117		0.8
Consumer Goods: Non-durable	8,767,556		0.9		7,522,988		0.8
Transportation: Consumer	7,402,367		0.7		7,402,367		0.8
Metals & Mining	19,743,260		2.0		6,925,615		0.7
Environmental Industries	4,906,721		0.5		5,164,068		0.6
Media: Broadcasting & Subscription	10,372,207		1.0		5,053,547		0.5
Beverage & Food	4,965,308		0.5		4,742,100		0.5
Telecommunications	862,917		0.1		836,840		0.1
Total	$	1,005,666,862	100.0	%	$	923,480,762	100.0	%

See the Consolidated Schedule of Investments for industry classifications of the underlying total return swap ("TRS") reference assets as December 31, 2018. There were no underlying TRS assets as of ~~June~~September 30, 2019.

The following table shows the composition of the Company’s portfolio investments by geography classification at fair value as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019				December 31, 2018				September 30, 2019				December 31, 2018
Geography	Fair Value		Percentage		Fair Value		Percentage		Fair Value		Percentage		Fair Value		Percentage
United States	$	739,192,689	91.8	%	$	853,885,729	92.4	%	$	675,685,708	91.7	%	$	853,885,729	92.4	%
Cayman Islands	65,829,342		8.2		65,235,477		7.1		61,264,949		8.3		65,235,477		7.1
Canada	—		—		4,359,556		0.5		—		—		4,359,556		0.5
Total	$	805,022,031	100.0	%	$	923,480,762	100.0	%	$	736,950,657	100.0	%	$	923,480,762	100.0	%

Transactions with Controlled/Affiliated Companies

During the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, the Company had investments in portfolio companies designated as controlled/affiliated investments under the 1940 Act. Transactions with controlled/affiliated investments were as follows:


Name of Investment⁽³⁾	Type of Investment	Fair Value at December 31, 2018			Purchases/ (Sales) of Investments			Transfers In/(Out) of Investments		Net change in unrealized appreciation/ (depreciation)			Realized Gain/(Loss)			Fair Value at June 30, 2019			Income Earned		Type of Investment	Fair Value at December 31, 2018			Purchases/ (Sales) of Investments			Transfers In/(Out) of Investments		Net change in unrealized appreciation/ (depreciation)			Realized Gain/(Loss)			Fair Value at September 30, 2019			Income Earned
1888 Industrial Services, LLC	Revolving Credit Facility	$	943,344		$	251,559		$	—	$	—		$	—		$	1,194,903		$	41,090	Revolving Credit Facility	$	943,344		$	566,007		$	—	$	—		$	—		$	1,509,351		$	66,903
																					Senior Secured First Lien Term Loan	3,144,481			—			—		—			—			3,144,481			180,516
	Senior Secured First Lien Term Loan	3,144,481			—			—		—			—			3,144,481			121,706		Senior Secured First Lien Term Loan	6,005,623			(159,607		)	—		(3,892,078		)	—			1,953,938			—
	Senior Secured First Lien Term Loan	6,005,623			1,695			—		(2,099,443		)	—			3,907,875			—		Senior Secured First Lien Term Loan	—			401,814			—		—			—			401,814			7,769
	Senior Secured First Lien Term Loan	—			401,814			—		—			—			401,814			248		Senior Secured First Lien Term Loan	—			78,384											78,384			187
	Membership Units	—			—			—		—			—			—			—		Membership Units	—			—			—		—			—			—			—
Access Media Holdings, LLC	Senior Secured First Lien Term Loan	5,141,747			35,935			—		(362,031		)	—			4,815,651			—		Senior Secured First Lien Term Loan	5,141,747			35,935			—		(2,982,229		)	—			2,195,453			—
	Common Stock	—			—			—		—			—			—			—		Common Stock	—			—			—		—			—			—			—
	Preferred Equity	—			—			—		—			—			—			—		Preferred Equity	—			—			—		—			—			—			—
	Preferred Equity	—			—			—		—			—			—			—		Preferred Equity	—			—			—		—			—			—			—
	Preferred Equity	(88,200		)	—			—		—			—			(88,200		)	—		Preferred Equity	(88,200		)	88,200			—		—			—			—			—
Caddo Investors Holdings 1 LLC	Equity	5,186,935			—			—		258,202			—			5,445,137			—		Equity	5,186,935			54,619			—		390,246			—			5,631,800			—
Capstone Nutrition, Inc.	Senior Secured First Lien Term Loan	9,524,176								(4,515,044		)	—			5,009,132			—		Senior Secured First Lien Term Loan	9,524,176			(1,413,538		)			6,128,103			(14,238,741		)	—			—
	Senior Secured First Lien Delayed Draw Term Loan	4,282,981			—			—		(4,282,981		)	—			—			—		Senior Secured First Lien Delayed Draw Term Loan	4,282,981			(635,662		)	—		2,985,858			(6,633,177		)	—			—
	Senior Secured First Lien Incremental Delayed Draw Term Loan	1,745,510			1,162,092			—		—			—			2,907,602			267,373		Senior Secured First Lien Incremental Delayed Draw Term Loan	1,745,510			(1,745,510		)	—		—			—			—			319,581
	Common Stock	—			—			—		—			—			—			—		Common Stock	—			—			—		9			(9		)	—			—
	Common Stock	—			—			—		—			—			—			—		Common Stock	—			—			—		—			—			—			—
	Common Stock	—			—			—		—			—			—			—		Common Stock	—			—			—		300,002			(300,002		)	—			—
Charming Charlie LLC	Senior Secured First Lien Term Loan	3,121,470			—			—		(3,121,470		)	—			—			—		Senior Secured First Lien Term Loan	3,121,470			—			—		(3,380,178		)	—			(258,708		)	—
	Senior Secured First Lien Term Loan	1,515,547			102,381			—		(1,617,928		)	—			—			—		Senior Secured First Lien Term Loan	1,515,547			(115,404		)	—		(1,400,143		)	—			—			—
	Senior Secured First Lien Term Loan	182,617			—			—		(182,617		)	—			—			18,363		Senior Secured First Lien Term Loan	182,617			—			—		(45,654		)	—			136,963			27,697
	Senior Secured First Lien Term Loan	—			—			—		—			—			—			12,274		Senior Secured First Lien Term Loan	—			1,034,831			—		(304,362		)	—			730,469			91,608
	Common Stock	—			—			—		—			—			—			—		Common Stock	—			—			—		—			—			—			—
Dynamic Energy Services International LLC	Revolving Credit Facility	—			690,428			246,677								937,105			42,479		Revolving Credit Facility	—			40,219			246,677								286,896			54,451
	Senior Secured First Lien Term Loan	—			—			9,828,831		(3,809,572		)	(5,379,805		)	639,454			—		Senior Secured First Lien Term Loan	—			—			9,828,831		(3,783,319		)	(5,379,806		)	665,706			—
	Equity	—			—			—		—			—			—			—		Equity	—			—			—		—			—			—			—
Kemmerer Operations, LLC	Senior Secured First Lien Term Loan	—			1,694,915			—		—			—			1,694,915			7,062		Senior Secured First Lien Term Loan	—			1,694,915			—		71,596			—			1,766,511			72,332
	Senior Secured First Lien Delayed Draw Term Loan	—			677,966			—		—			—			677,966			—		Senior Secured First Lien Delayed Draw Term Loan	—			706,604			—		—			—			706,604			28,933
	Equity	—			962,717			—		—			—			962,717			—		Equity	—			962,717			—		31,283			—			994,000			—
MCM 500 East Pratt Holdings, LLC	Equity	5,000,000			—			—		—			—			5,000,000			183,627		Equity	5,000,000			—			—		2,100,000			—			7,100,000			367,254
MCM Capital Office Park Holdings LLC	Equity	12,499,125			—			—		(1,661,625		)	—			10,837,500			141,234		Equity	12,499,125			—			—		(724,125		)	—			11,775,000			294,935
Medley Chiller Holdings LLC	Equity	9,098,157			(23,360,420		)	—		(470,657		)	14,732,920			—			557,697
Nomida LLC⁽¹⁾	Equity	989,820			(771,420		)	—		1,299,940			(1,518,340		)	—			—
Sierra Senior Loan Strategy JV I LLC⁽²⁾	Equity	82,515,860			—			—		(5,960,185		)	—			76,555,675			4,200,000


Name of Investment⁽³⁾																		Type of Investment	Fair Value at December 31, 2018		Purchases/ (Sales) of Investments			Transfers In/(Out) of Investments		Net change in unrealized appreciation/ (depreciation)			Realized Gain/(Loss)			Fair Value at September 30, 2019		Income Earned
Medley Chiller Holdings LLC																		Equity	9,098,157		(20,531,808		)	—		(470,657		)	11,904,308			—		557,697
Nomida LLC⁽¹⁾																		Equity	989,820		(771,420		)	—		1,299,940			(1,518,340		)	—		—
Sierra Senior Loan Strategy JV I LLC⁽²⁾																		Equity	82,515,860		—			—		(9,106,501		)	—			73,409,359		6,037,500
TwentyEighty, Inc.	Senior Secured First Lien Term Loan	6,975,035		139,415			—		(69,721		)	—		7,044,729		283,208		Senior Secured First Lien Term Loan	6,975,035		(6,975,035		)	—		—			—			—		427,674
	Senior Secured First Lien Term Loan	6,497,461		404,802			—		79,231			—		6,981,494		306,079		Senior Secured First Lien Term Loan	6,497,461		(6,521,105		)	—		(91,097		)	114,741			—		631,186
	Senior Secured First Lien Term Loan	319,870		(118,076		)	—		2,390			513		204,697		15,525		Senior Secured First Lien Term Loan	319,870		(322,723		)	—		2,102			751			—		18,846
	Senior Secured First Lien Term Loan	—		—			—		—			—		—		—		Senior Secured First Lien Term Loan	—		—			—		—			—			—		—
	Equity	404,943		—			—		3,059,439			—		3,464,382		—		Equity	404,943		—			—		5,889,975			—			6,294,918		—
Total		$	165,006,502	$	(17,724,197	)	$	10,075,508	$	(23,454,072	)	$	7,835,288	$	141,739,029	$	6,197,965		$	165,006,502	$	(33,527,567	)	$	10,075,508	$	(6,981,229	)	$	(16,050,275	)	$	118,522,939	$	9,185,069

Name of Investment⁽³⁾
Type of Investment Fair Value at December 31, 2017
Purchases/
(Sales)
of Investments

Transfers
In/(Out)
of Investments

Net change in
unrealized
appreciation/
(depreciation)
Realized Gain/(Loss) Fair Value at June 30, 2018 Income
Earned
1888 Industrial Services, LLC Senior Secured First Lien Term Loan $ 188,669
$ 880,455
$ —
$ —
$ —
$ 1,069,124
$ 20,178
Senior Secured First Lien Term Loan 3,144,481
—
—
—
—
3,144,481
110,574
Senior Secured First Lien Term Loan 7,078,964
450,275
—
(800,634 ) —
6,728,605
368,665
Membership Units —
—
—
—
—
—
—
Access Media Holdings, LLC Senior Secured First Lien Term Loan 7,390,587
31,820
—
(2,280,614 ) —
5,141,793
—
Common Stock —
—
—
—
—
—
—
Preferred Equity —
—
—
—
—
—
—
Preferred Equity —
—
—
—
—
—
—
Preferred Equity 130,200
226,800
—
(434,000 ) —
(77,000 ) —
Capstone Nutrition Senior Secured First Lien Term Loan 12,042,301
—
—
(2,924,653 ) —
9,117,648
—
Senior Secured First Lien Term Loan 5,210,693
—
—
(1,265,494 ) —
3,945,199
—
Senior Secured First Lien Term Loan —
1,617,800
—
—
—
1,617,800
—
Common Stock —
—
—
—
—
—
—
Common Stock —
—
—
—
—
—
—
Common Stock —
—
—
—
—
—
—
Charming Charlie LLC Senior Secured First Lien Term Loan —
2,470,184
—
(35,167 ) —
2,435,017
85,265
Senior Secured First Lien Term Loan —
3,043,620
—
—
—
3,043,620
82,552
Common Stock —
—
—
—
—
—
MCM 500 East Pratt Holdings, LLC Equity 455,871
4,544,129
—
—
—
5,000,000
188,575
MCM Capital Office Park Holdings LLC Equity 7,500,000
—
—
—
—
7,500,000
194,805
Medley Chiller Holdings LLC Equity —
8,627,500
—
(128,614 ) —
8,498,886
—
Nomida LLC⁽¹⁾
Senior Secured First Lien Term Loan 2,935,000
(2,935,000 ) —
—
—
—
71,564
Equity 5,400,000
(606,000 ) —
(504,000 ) —
4,290,000
—
Sierra Senior Loan Strategy JV I LLC⁽²⁾
Equity 79,515,513
7,683,750
—
(2,047,501 ) —
85,151,762
3,937,500
TwentyEighty, Inc. Senior Secured First Lien Term Loan 5,501,849
379,928
—
(192,705 ) —
5,689,072
280,270
Senior Secured First Lien Term Loan 6,696,055
137,785
—
(89,523 ) —
6,744,317
270,794
Senior Secured First Lien Term Loan 3,098,085
(688,902 ) —
(3,002 ) —
2,406,181
1,184
Senior Secured First Lien Term Loan —
—
—
—
—
—
140,655
Equity —
—
—
—
—
—
—
Total $ 146,288,268
$ 25,864,144
$ —
$ (10,705,907 ) $ —
$ 161,446,505
$ 5,752,581



Name of Investment(3)	Type of Investment	Fair Value at December 31, 2017		Purchases/ (Sales) of Investments		Transfers In/(Out) of Investments		Net change in unrealized appreciation/ (depreciation)			Realized Gain/(Loss)		Fair Value at September 30, 2018			Income Earned
1888 Industrial Services, LLC	Senior Secured First Lien Term Loan	$	188,669	$	1,069,123	$	—	$	—		$	—	$	1,257,792		$	43,755
	Senior Secured First Lien Term Loan	3,144,481		—		—		—			—		3,144,481			169,519
	Senior Secured First Lien Term Loan	7,078,964		699,392		—		(874,530		)	—		6,903,826			569,786
	Membership Units	—		—		—		—			—		—			—
Access Media Holdings, LLC	Senior Secured First Lien Term Loan	7,390,587		31,820		—		(2,280,663		)	—		5,141,744			—
	Common Stock	—		—		—		—			—		—			—
	Preferred Equity	—		—		—		—			—		—			—
	Preferred Equity	—		—		—		—			—		—			—
	Preferred Equity	130,200		320,600		—		(602,000		)	—		(151,200		)	—
Caddo Investors Holdings 1 LLC	Equity	—		4,975,000		—		—			—		4,975,000			55,243
Capstone Nutrition, Inc.	Senior Secured First Lien Term Loan	12,042,301		32,381		—		(2,581,434		)	—		9,493,248			—
	Senior Secured First Lien Term Loan	5,210,693		399,652		—		(1,341,273		)	—		4,269,072			—
	Senior Secured First Lien Term Loan	—		1,682,040		—		—			—		1,682,040			197,424
	Common Stock	—		—		—		—			—		—			—
	Common Stock	—		—		—		—			—		—			—
	Common Stock	—		—		—		—			—		—			—
Charming Charlie LLC	Senior Secured First Lien Term Loan	—		3,082,088		—		—			—		3,082,088			194,997



Name of Investment(3)	Type of Investment	Fair Value at December 31, 2017		Purchases/ (Sales) of Investments			Transfers In/(Out) of Investments		Net change in unrealized appreciation/ (depreciation)			Realized Gain/(Loss)		Fair Value at September 30, 2018		Income Earned
	Senior Secured First Lien Term Loan	—		2,602,031			—		(1,086,565		)	—		1,515,466		202,465
	Senior Secured First Lien Term Loan	—		182,617			—		—			—		182,617		406
	Common Stock			—			—		—			—		—		—
MCM 500 East Pratt Holdings, LLC	Equity	455,871		4,544,129			—		—			—		5,000,000		377,150
MCM Capital Office Park Holdings LLC	Equity	7,500,000		—			—		1,875,000			—		9,375,000		292,208
Medley Chiller Holdings LLC	Equity	—		8,627,500			—		(128,613		)	—		8,498,887		—
Nomida LLC(1)	Senior Secured First Lien Term Loan	2,935,000		(2,935,000		)	—		—			—		—		71,564
	Equity	5,400,000		(1,326,000		)	—		(856,545		)	—		3,217,455		—
Sierra Senior Loan Strategy JV I LLC(2)	Equity	79,515,513		12,233,750			—		(4,826,019		)	—		86,923,244		6,037,499
TwentyEighty, Inc.	Senior Secured First Lien Term Loan	6,696,055		206,883			—		(90,429		)	—		6,812,509		410,555
	Senior Secured First Lien Term Loan	5,501,849		575,335			—		(230,898		)	—		5,846,286		427,495
	Senior Secured First Lien Term Loan	3,098,085		(2,733,735		)	—		(11,886		)	7,969		360,433		179,436
	Equity	—		—			—		—			—		—		—
Total		$	146,288,268	$	34,269,606		$	—	$	(13,035,855	)	$	7,969	$	167,529,988	$	9,229,502

(1)

Nomida, LLC ("Nomida") is a non-public real estate investment formed by the Company to purchase and develop a residential property. The Company is the sole equity shareholder of Nomida and has provided 100% of the debt financing to the entity. The Company is Nomida’s sole member responsible for Nomida’s daily operations. In addition, the Chief Financial Officer and Secretary of the Company also serves as President of Nomida. The assets of Nomida are comprised of a residential development property in the city of Chicago, IL and the proceeds of the loan from the Company; the liabilities of Nomida consist of the loan payable to the Company. As of ~~June~~September 30, 2019, the ~~loan payable~~investment has been ~~fully paid off.~~realized.

(2)

The Company and Great American Life Insurance Company ("GALIC") are the members of Sierra Senior Loan Strategy JV I LLC ("Sierra JV"), a joint venture formed as a Delaware limited liability company that is not consolidated by either member for financial reporting purposes. The members of Sierra JV make capital contributions as investments by Sierra JV are completed, and all portfolio and other material decisions regarding Sierra JV must be submitted to Sierra JV’s board of managers, which is comprised of an equal number of members appointed by each of the Company and GALIC. Approval of Sierra JV’s board of managers requires the unanimous approval of a quorum of the board of managers, with a quorum consisting of equal representation of members appointed by each of the Company and GALIC. Because management of Sierra JV is shared equally between the Company and GALIC, the Company does not have operational control over the Sierra JV for purposes of the 1940 Act or otherwise.


(3)	The par amount and additional detail are shown in the consolidated schedule of investments

Purchases/(sales) of investments in controlled/affiliated investments are included in the purchases and sales presented on the Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018. Transfers in/(out) of controlled/affiliated represents the fair value for the month an investment became or was removed as a controlled/affiliates investment. Income received from controlled/affiliated investments is included in total investment income on the Consolidated Statements of Operations for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018.

Sierra Senior Loan Strategy JV I LLC

NAV to determine the fair value of its investment in Sierra JV; therefore, this investment has been presented as a reconciling item within the fair value hierarchy (see Note 4).

As of ~~June~~September 30, 2019 and December 31, 2018, Sierra JV had total capital commitments of $116 million, with the Company providing $101.5 million and GALIC providing $14.5 million. Approximately $105.2 million was funded as of ~~June~~September 30, 2019 and December 31, 2018, relating to these commitments, of which $92.1 million was from the Company. The Company does not have the right to withdraw any of their respective capital commitment, unless in connection with a transfer of its membership interests. The Company may transfer full membership interests as long as it is approved by all members and transferred in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended, or applicable state securities laws.

At ~~June~~September 30, 2019 and December 31, 2018, Sierra JV had a $250 million senior secured revolving credit facility (the "JV Facility") with Deutsche Bank, AG, New York Branch ("DB"). The JV Facility bears interest at a rate of LIBOR (with no minimum) plus 2.50% per annum. On March 29, 2019, the JV amended the Credit Facility and extended the reinvestment period. On March 29, 2019, the JV Facility reinvestment period was extended to June 28, 2019 from March 30, 2019. On June 28, 2019, the JV Facility reinvestment period was further extended to October 28, 2019. ~~The~~On October 28, 2019, the JV Facility reinvestment period was further extended from October 28, 2019 to March 31, 2020 while the interest rate was modified from bearing an interest rate of LIBOR (with no minimum) + 2.50% per annum to LIBOR (with no minimum) + 2.75% per annum.The final maturity date is March 30, 2022 and is secured substantially by all of the SPV's assets, subject certain exclusions set forth in the Credit Facility. As of ~~June~~September 30, 2019 and December 31, 2018, there was $204.9 million outstanding under the JV Facility.

The following table shows a summary of Sierra JV's portfolio as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019			December 31, 2018			September 30, 2019			December 31, 2018
Senior secured loans⁽¹⁾	$	274,383,740		$	284,070,735		$	268,804,900		$	284,070,735
Weighted average current interest rate on senior secured loans⁽²⁾	7.41		%	7.61		%	7.05		%	7.61		%
Number of borrowers in the Sierra JV	60			58			61			58
Investments at fair value	$	265,411,129		$	277,168,454		$	256,366,040		$	277,168,454
Largest loan to a single borrower⁽¹⁾	$	10,942,429		$	11,058,001		$	10,884,644		$	11,058,001
Total of five largest loans to borrowers⁽¹⁾	$	46,624,917		$	48,114,884		$	43,626,877		$	48,114,884


(1)	At par value.


(2)	Computed as the (a) annual stated interest rate on accruing senior secured loans, divided by (b) total senior secured loans at principal amount.

The following is a listing of the individual investments in Sierra JV's portfolio as of ~~June~~September 30, 2019 (unaudited):

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
4Over International, LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽²⁾
6/7/2022 $ 10,942,429
$ 10,942,429
$ 10,691,848
Acrisure, LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor ⁽²⁾
11/22/2023 2,571,557
2,577,749
2,554,327
BW NHHC HOLDCO INC Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 3.75%, 1.00% LIBOR Floor ⁽²⁾
5/15/2025 5,194,895
5,127,411
4,796,446
Callaway Golf Company Consumer Goods: Durable
Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor ⁽²⁾
1/4/2026 2,967,562
2,912,702
2,992,787
Cardenas Markets LLC Retail
Senior Secured First Lien Term Loan LIBOR + 4.50%⁽²⁾
11/29/2023 6,337,500
6,297,506
6,128,996
CD&R TZ Purchaser, Inc. Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor ⁽²⁾
7/21/2023 6,317,772
6,262,457
6,282,392
CHA Consulting, Inc. Construction & Building
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽⁴⁾
4/10/2025 1,957,528
1,951,911
1,924,816
Covenant Surgical Partners, Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽⁴⁾⁽⁵⁾
10/4/2024 9,857,363
9,838,736
9,758,789
CT Technologies Intermediate Holdings, Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 4.50%⁽⁴⁾
12/1/2021 4,142,689
4,071,168
3,397,005
Directbuy Home Improvement, Inc. Retail
Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor ⁽²⁾
6/20/2022 274,413
274,413
274,413
Directbuy Home Improvement, Inc. Retail Common Stock - 201,591 shares 201,591
79,237
78,620
Envision Healthcare Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor ⁽⁴⁾
10/10/2025 1,965,125
1,900,192
1,719,484
GC EOS Buyer, Inc. Automotive
Senior Secured First Lien Term Loan LIBOR + 3.75%, 1.00% LIBOR Floor ⁽⁴⁾
8/1/2025 3,453,786
3,405,940
3,436,517
GK Holdings, Inc. Services: Business
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
1/20/2021 3,926,510
3,919,152
3,508,337
Glass Mountain Pipeline Holdings, LLC Energy: Oil & Gas
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽⁴⁾
12/23/2024 4,912,812
4,898,319
4,802,274
Golden West Packaging Group LLC Forest Products & Paper
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
6/20/2023 4,199,559
4,199,559
4,181,081
High Ridge Brands Co. Consumer Goods: Non-Durable
Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor ⁽²⁾
6/30/2022 3,031,250
3,007,598
2,428,637
Highline Aftermarket Acquisitions, LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor ⁽⁴⁾
4/26/2025 4,076,471
4,065,155
3,758,506
Infogroup, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 3.50%, 1.00% LIBOR Floor ⁽²⁾
4/3/2023 4,887,500
4,856,633
4,756,515
Intermedia Holdings, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor ⁽⁴⁾
7/21/2025 3,980,000
3,945,255
3,901,593
Isagenix International, LLC Wholesale
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽⁴⁾
6/16/2025 2,826,250
2,812,586
2,215,215
Jackson Hewitt Tax Services Inc. Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor ⁽⁴⁾
4/20/2023 5,887,500
5,887,500
5,848,642



Company	Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value⁽¹⁾
4Over International, LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽²⁾	6/7/2022	$	10,884,644	$	10,884,645	$	10,635,385
Acrisure, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽²⁾	11/22/2023	2,565,013		2,570,833		2,550,649
AL Midcoast Holdings, LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor⁽⁴⁾	8/1/2025	5,954,496		5,909,046		5,839,574
Brightspring Health Services	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.50% ⁽²⁾⁽⁵⁾	3/5/2026	3,990,000		3,941,059		3,990,000
Callaway Golf Company	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 4.50%,⁽²⁾	1/4/2026	2,774,187		2,725,217		2,801,929
Cardenas Markets LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor⁽²⁾	11/29/2023	6,321,250		6,283,634		6,113,281
CHA Consulting, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽⁴⁾⁽⁶⁾	4/10/2025	1,354,100		1,348,747		1,324,581
CHA Consulting, Inc.	Construction & Building	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽²⁾	4/10/2025	598,500		598,500		584,908

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
Keystone Acquisition Corp. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 6.25%, 1.00% LIBOR Floor ⁽²⁾
5/1/2024 6,178,421
6,097,672
5,849,729
KNB Holdings Corporation Consumer Goods: Durable
Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor ⁽⁴⁾
4/26/2024 4,903,412
4,835,702
4,784,259
LifeMiles Ltd. Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor ⁽⁴⁾
8/18/2022 4,987,530
4,970,451
5,037,405
Loparex International B.V. Containers, Packaging and Glass
Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor ⁽⁴⁾
4/11/2025 3,626,711
3,611,692
3,617,644
Manna Pro Products, LLC Consumer Goods: Non-Durable
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽⁴⁾
12/8/2023 3,037,083
3,037,083
2,887,355
Manna Pro Products, LLC Consumer Goods: Non-Durable
Senior Secured First Lien Delayed Draw Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽⁴⁾
12/8/2023 616,667
616,667
586,265
Midcoast Energy, LLC Energy: Oil & Gas
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽²⁾⁽⁵⁾
8/1/2025 5,969,532
5,921,991
5,969,532
New Media Holdings II LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor ⁽²⁾⁽⁵⁾
7/14/2022 2,913,799
2,907,408
2,888,158
NGS US Finco, LLC Capital Equipment
Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor ⁽⁴⁾
10/1/2025 2,985,000
2,971,891
2,931,568
Northern Star Industries, Inc. Capital Equipment
Senior Secured First Lien Term Loan LIBOR + 6.25%, 1.00% LIBOR Floor ⁽²⁾
3/28/2025 4,196,875
4,179,570
3,994,166
Nuvei Technologies Corp. Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽⁴⁾
9/29/2025 5,390,302
5,351,640
5,180,619
Nuvei Technologies Corp. Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Delayed Draw Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽⁴⁾
9/29/2025 1,327,196
1,317,676
1,266,387
Offen, Inc. Transportation: Cargo
Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor ⁽⁴⁾
6/21/2026 3,672,566
3,635,841
3,622,566
Peraton Corp. Aerospace and Defense
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾⁽⁵⁾
4/29/2024 3,415,152
3,403,323
3,278,204
PetroChoice Holdings, Inc. Chemicals, Plastics and Rubber
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
8/19/2022 6,858,604
6,840,848
6,818,138
Phoenix Guarantor Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor ⁽⁴⁾
3/5/2026 4,975,000
4,909,917
4,949,627
Plaskolite PPC Intermediate II LLC Chemicals, Plastics and Rubber
Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor ⁽⁴⁾
12/15/2025 3,233,750
3,174,954
3,204,000
Port Townsend Holdings Company, Inc. Forest Products & Paper
Senior Secured First Lien Term Loan LIBOR + 4.50%⁽⁵⁾
4/3/2024 3,049,523
3,025,107
3,012,624
PT Network, LLC Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor ⁽²⁾
11/30/2023 4,412,542
4,125,286
4,125,286
PT Network, LLC Healthcare & Pharmaceuticals Class C Common Stock —
—
—
PVHC Holding Corp Containers, Packaging and Glass
Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor ⁽²⁾
8/5/2024 1,977,331
1,968,839
1,940,229
Quartz Holding Inc High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor ⁽⁴⁾
4/2/2026 6,000,000
5,976,488
5,970,000
Recorded Books Inc. Media: Diversified & Production
Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor ⁽⁴⁾⁽⁵⁾
8/29/2025 5,458,750
5,410,428
5,458,750



Company	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value⁽¹⁾
Covenant Surgical Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽³⁾⁽⁴⁾	7/1/2026	5,000,000	4,951,650	4,940,000
CT Technologies Intermediate Holdings, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽²⁾	12/1/2021	4,131,900	4,067,981	3,770,359
Directbuy Home Improvement, Inc.	Retail	Senior Secured First Lien Term Loan LIBOR + 6.50%, 1.00% LIBOR Floor⁽²⁾	6/20/2022	274,413	274,413	274,193
Directbuy Home Improvement, Inc.	Retail	Common Stock - 201,591 shares⁽⁷⁾		201,591	79,237	64,509
Envision Healthcare Corporation	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 3.75%, 1.00% LIBOR Floor⁽⁴⁾	10/10/2025	1,960,188	1,898,384	1,594,220
GC EOS Buyer, Inc.	Automotive	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽³⁾	8/1/2025	3,445,086	3,399,335	3,400,989
GK Holdings, Inc.	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽⁴⁾	1/20/2021	3,916,231	3,910,077	3,557,113
Glass Mountain Pipeline Holdings, LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽⁵⁾	12/23/2024	4,900,375	4,886,582	4,618,603
Golden West Packaging Group LLC	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor⁽²⁾	6/20/2023	4,188,348	4,188,348	4,163,637
High Ridge Brands Co.	Consumer Goods: Non-Durable	Senior Secured First Lien Term Loan LIBOR + 7.00%, 1.00% LIBOR Floor⁽⁴⁾⁽⁸⁾	6/30/2022	3,031,250	3,009,584	2,368,922
Highline Aftermarket Acquisitions, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.50%, 1.00% LIBOR Floor⁽²⁾	4/26/2025	4,066,176	4,055,374	3,601,412
The Imagine Group, LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor⁽²⁾	6/21/2022	7,800,000	7,757,145	5,187,780
Infogroup, Inc.	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽⁴⁾	4/3/2023	4,875,000	4,846,275	4,748,738
Intermedia Holdings, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽⁴⁾	7/21/2025	3,970,000	3,936,784	3,964,045
Intermediate LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽⁴⁾	7/1/2026	2,750,000	2,732,905	2,732,400
Isagenix International, LLC	Wholesale	Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor⁽⁴⁾	6/16/2025	2,788,268	2,775,360	2,115,738
Jackson Hewitt Tax Service Inc.	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.25%)⁽²⁾	4/20/2023	5,850,000	5,850,000	5,811,390
Jordan Health Products I, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽²⁾	5/15/2025	5,181,776	5,117,349	4,378,601
Keystone Acquisition Corp.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor⁽⁴⁾	5/1/2024	6,162,699	6,086,349	5,972,888
KNB Holdings Corporation	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor⁽⁴⁾	4/26/2024	4,871,364	4,807,608	3,975,033
LifeMiles Ltd.	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor⁽³⁾	8/18/2022	4,836,393	4,821,162	4,759,978
Manna Pro Products, LLC	Consumer Goods: Non-Durable	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽²⁾	12/8/2023	3,029,375	3,029,375	2,880,027
Manna Pro Products, LLC	Consumer Goods: Non-Durable	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽²⁾	12/8/2023	615,125	615,125	584,799

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
Rough Country, LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 4.50%⁽⁴⁾
5/25/2023 4,993,321
4,975,885
4,912,430
Safe Fleet Holdings LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 3.00%, 1.00% LIBOR Floor ⁽²⁾
2/3/2025 3,431,562
3,424,597
3,337,538
Safe Fleet Holdings LLC Automotive
Senior Secured First Lien Delayed Draw Term Loan LIBOR + 3.00%, 1.00% LIBOR Floor ⁽²⁾
2/3/2025 1,339,253
1,294,133
1,303,227
Salient CRGT Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor ⁽²⁾
2/28/2022 4,440,476
4,392,712
4,240,211
SCS Holdings I Inc. Wholesale
Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor ⁽²⁾
10/31/2022 4,695,448
4,679,773
4,671,971
Shift4 Payments, LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
11/29/2024 9,850,000
9,811,793
9,850,000
Sierra Enterprises, LLC Beverage & Food
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
11/11/2024 3,928,939
3,919,082
3,889,650
Simplified Logistics, LLC Services: Business
Senior Secured First Lien Term Loan LIBOR + 3.50%, 1.00% LIBOR Floor ⁽²⁾
2/27/2022 3,491,250
3,410,977
3,491,250
SMB Shipping Logistics, LLC Transportation: Cargo
Senior Secured First Lien Term Loan LIBOR + 6.50%, 1.00% LIBOR Floor ⁽⁴⁾
2/5/2024 2,472,131
2,451,528
2,447,410
Starfish Holdco, LLC High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor ⁽⁴⁾
8/16/2024 3,925,362
3,899,973
3,904,558
Syniverse Holdings, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
3/9/2023 3,945,038
3,915,738
3,621,545
The Imagine Group, LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor ⁽²⁾
6/21/2022 7,820,000
7,773,063
6,437,424
The Octave Music Group, Inc. Media: Diversified & Production
Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor ⁽²⁾
5/28/2021 4,359,998
4,359,998
4,324,682
ThoughtWorks, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor ⁽²⁾
10/11/2024 6,691,842
6,675,422
6,681,135
Tortoise Borrower LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor ⁽²⁾
1/31/2025 2,444,062
2,434,280
2,414,734
United Road Services, Inc. Transportation: Cargo
Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor ⁽²⁾
9/2/2024 3,790,000
3,775,660
3,790,000
Wok Holdings Inc. Retail
Senior Secured First Lien Term Loan LIBOR + 3.50%, 1.00% LIBOR Floor ⁽²⁾
3/1/2026 6,633,375
6,578,153
6,394,574
Wrench Group LLC Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor ⁽²⁾
4/30/2026 2,231,250
2,213,135
2,231,250
Xebec Global Holdings, LLC High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor ⁽²⁾
2/12/2024 8,155,125
8,155,125
8,083,360
Z Medica, LLC Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 6.50%⁽⁴⁾
9/29/2022 2,647,500
2,647,500
2,574,429
Total $ 274,383,740
$ 272,312,609
$ 265,411,129



Company	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value⁽¹⁾
New Media Holdings II LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 6.25%, 1.00% LIBOR Floor⁽²⁾	7/14/2022	2,906,422	2,900,576	2,900,900
NGS US Finco, LLC	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽⁴⁾	10/1/2025	2,977,500	2,965,041	2,903,360
Northern Star Industries, Inc.	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽⁵⁾	3/28/2025	4,186,250	4,169,745	3,984,054
Nuvei Technologies Corp.	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽²⁾⁽⁶⁾	9/29/2025	1,002,408	1,002,408	983,612
Nuvei Technologies Corp.	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽²⁾	9/29/2025	4,961,062	4,916,977	4,868,376
Nuvei Technologies Corp.	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽²⁾	9/29/2025	726,749	726,749	713,123
Offen, Inc.	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 5.00%)⁽⁴⁾⁽⁶⁾	6/22/2026	3,663,385	3,628,060	3,613,477
Peraton Corp.	Aerospace and Defense	Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor⁽²⁾	4/29/2024	3,406,439	3,395,256	3,384,979
PetroChoice Holdings, Inc.	Chemicals, Plastics and Rubber	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽⁴⁾	8/19/2022	6,840,791	6,823,978	6,567,159
Plaskolite PPC Intermediate II LLC	Chemicals, Plastics and Rubber	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽²⁾	12/15/2025	3,225,625	3,169,698	3,194,659
Port Townsend Holdings Company, Inc.	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor⁽⁵⁾	4/3/2024	3,041,842	3,018,776	2,992,564
PT Network, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor, 2% PIK)⁽⁴⁾⁽⁹⁾	11/30/2023	4,416,710	4,159,475	4,129,182
PT Network, LLC	Healthcare & Pharmaceuticals	Class C Common Stock⁽⁷⁾		—	—	—
PVHC Holding Corp	Containers, Packaging and Glass	Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor⁽⁴⁾⁽⁶⁾	8/5/2024	1,972,350	1,964,298	1,912,138
Quantum Spatial, Inc.	Aerospace & Defense	Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor⁽⁴⁾	9/5/2024	5,000,000	5,000,000	5,000,000
Quartz Holding Company	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽⁴⁾	4/2/2026	6,982,500	6,957,448	6,885,443
RB Media, Inc.	Media: Diversified & Production	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽²⁾	8/29/2025	5,445,000	5,398,769	5,445,000
Rough Country, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.75%, 1.00% LIBOR Floor⁽²⁾	5/25/2023	4,993,321	4,977,011	4,912,430
Safe Fleet Holdings LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.00%, 1.00% LIBOR Floor⁽²⁾	2/3/2025	1,335,880	1,292,960	1,288,055
Safe Fleet Holdings LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.75%, 1.00% LIBOR Floor⁽²⁾	2/3/2025	3,422,875	3,416,186	3,297,255
Salient CRGT Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 6.00%, 1.00% LIBOR Floor⁽²⁾	2/28/2022	4,409,226	4,366,278	4,172,451
SCS Holdings I Inc.	Wholesale	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽²⁾	7/1/2026	2,244,375	2,238,962	2,249,986



Company	Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value⁽¹⁾
Shift4 Payments, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽²⁾	11/29/2024	9,825,000		9,788,662		9,825,000
Sierra Enterprises, LLC	Beverage & Food	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽²⁾	11/11/2024	3,918,993		3,909,634		3,821,018
Simplified Logistics, LLC	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.50%, 1.00% LIBOR Floor⁽⁴⁾	2/27/2022	3,482,500		3,406,082		3,482,500
SMB Shipping Logistics, LLC	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽⁵⁾	2/5/2024	2,465,807		2,446,381		2,453,478
Syniverse Holdings, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.00%, 1.00% LIBOR Floor⁽²⁾	3/9/2023	3,935,050		3,907,819		3,695,799
The Octave Music Group, Inc.	Media: Diversified & Production	Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor⁽²⁾	5/28/2021	4,348,644		4,348,644		4,325,596
ThoughtWorks, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.00%, 1.00% LIBOR Floor⁽²⁾	10/11/2024	6,674,943		6,659,347		6,674,943
Tortoise Borrower LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 3.50%, 1.00% LIBOR Floor⁽²⁾	1/31/2025	2,437,875		2,428,557		2,392,287
United Road Services, Inc.	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 5.75%, 1.00% LIBOR Floor⁽²⁾	9/2/2024	3,759,999		3,746,465		3,699,087
Vero Parent, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.50%, 1.00% LIBOR Floor⁽²⁾	8/16/2024	3,915,475		3,891,393		3,886,109
Wawona Delaware Holdings, LLC	Beverage & Food	Senior Secured First Lien Term Loan LIBOR + 4.75%, 1.00% LIBOR Floor⁽²⁾	9/11/2026	4,975,000		4,925,465		4,925,250
Wok Holdings Inc.	Retail	Senior Secured First Lien Term Loan LIBOR + 6.50%, 1.00% LIBOR Floor⁽²⁾	3/1/2026	6,616,750		6,563,917		5,599,756
Wrench Group LLC	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 4.25%, 1.00% LIBOR Floor⁽²⁾⁽⁶⁾	4/30/2026	2,225,672		2,208,233		2,225,672
Xebec Global Holdings, LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.25%, 1.00% LIBOR Floor⁽³⁾	2/12/2024	8,134,734		8,134,734		8,114,397
Z Medica, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.50%, 1.00% LIBOR Floor⁽⁴⁾	9/29/2022	2,640,000		2,640,000		2,541,264
Total				$	268,804,900	$	266,852,067	$	256,366,040

(1)

Represents the fair value in accordance with ASC 820 as determined by the board of managers of Sierra JV. The approval of the fair value of the portfolio investments held by Sierra JV is not included in the valuation process of the Company's board of directors described elsewhere herein. All securities are valued using significant unobservable inputs, which are categorized as Level 3 assets under the definition of ASC 820 fair value hierarchy


(2)	The interest rate on these loans is subject to a base rate plus 1 Month (“1M”) LIBOR, which at ~~June~~September 30, 2019 was ~~2.40%~~2.02%. The interest rate is subject to a minimum LIBOR floor.


(3)	The interest rate on these loans is subject to a base rate plus 2 Month (“2M”) LIBOR, which at ~~June~~September 30, 2019 was ~~2.33%~~2.07%. The interest rate is subject to a minimum LIBOR floor.


(4)	The interest rate on these loans is subject to a base rate plus 3 Month (“3M”) LIBOR, which at ~~June~~September 30, 2019 was ~~2.32%~~2.09%. The interest rate is subject to a minimum LIBOR floor.


(5)	The interest rate on these loans is subject to a base rate plus 6 Month (“6M”) LIBOR, which at September 30, 2019 was 2.06%. The interest rate is subject to a minimum LIBOR floor.


(6)	Includes an analysis of the value of any unfunded loan commitments.


(7)	Security is non-income producing.


(8)	The investment was on non-accrual status as of September 30, 2019.


(9)	Par amount includes accumulated paid-in-kind ("PIK") interest and is net of repayments.

The following is a listing of the individual investments in Sierra JV's portfolio as of December 31, 2018:

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
4Over International, LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽²⁾
6/7/2022 $ 11,058,000
$ 11,058,000
$ 10,803,667
Acrisure, LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾
11/22/2023 5,391,750
5,406,210
5,275,288
Avantor, Inc. Wholesale
Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾
11/22/2024 5,694,738
5,640,336
5,505,104
BW NHHC Holdco Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾
5/15/2025 5,221,132
5,147,587
5,081,727
Cardenas Markets LLC Retail
Senior Secured First Lien Term Loan LIBOR + 5.75% , 1.00% LIBOR Floor ⁽²⁾
11/29/2023 6,370,000
6,325,291
6,240,689
CD&R TZ Purchaser, Inc. Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾
7/21/2023 6,350,272
6,287,883
6,094,356
CHA Consulting, Inc. Construction & Building
Senior Secured First Lien Term Loans LIBOR + 4.50% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁶⁾
4/10/2025 1,364,384
1,358,254
1,360,973
Covenant Surgical Partners, Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 4.50% ⁽⁴⁾⁽⁶⁾
10/4/2024 9,907,386
9,886,903
9,808,312
CT Technologies Intermediate Holdings, Inc. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾
12/1/2021 4,164,266
4,077,669
3,918,573
Deliver Buyer, Inc. Capital Equipment
Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽²⁾
5/1/2024 530,639
529,418
530,640
Elite Comfort Solutions LLC. Chemicals, Plastics & Rubber
Senior Secured First Lien Term Loan LIBOR + 6.50% , 1.00% LIBOR Floor ⁽⁴⁾
1/15/2021 9,053,081
9,053,081
9,053,081
Envision Healthcare Corporation Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽⁴⁾
10/10/2025 1,975,000
1,903,861
1,903,505
GC EOS Buyer, Inc. Automotive
Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾
8/1/2025 2,182,031
2,161,444
2,138,391
GK Holdings, Inc. Services: Business
Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾
1/20/2021 3,947,067
3,937,323
3,550,387
Glass Mountain Pipeline Holdings, LLC Energy: Oil & Gas
Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽⁴⁾
12/23/2024 4,937,686
4,921,803
4,886,336
Golden West Packaging Group LLC Forest Products & Paper
Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽²⁾
6/20/2023 7,227,034
7,227,034
7,227,034
High Ridge Brands Co. Consumer Goods - Non-Durable
Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾
6/30/2022 3,046,875
3,019,176
2,808,914
Highline Aftermarket Acquisitions, LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾
4/26/2025 4,097,059
4,084,725
3,976,605
InfoGroup, Inc Services: Business
Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽⁴⁾
4/3/2023 4,912,500
4,877,385
4,843,725
Intermedia Holdings, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾
7/21/2025 4,000,000
3,962,225
3,992,000
Isagenix International, LLC Wholesale
Senior Secured First Lien Term Loans LIBOR + 5.75% , 1.00% LIBOR Floor ⁽⁴⁾
6/16/2025 2,900,624
2,885,432
2,864,077

Company

Industry

Type of Investment

Maturity

Par Amount

Cost

Fair Value⁽¹⁾

4Over International, LLC

Media: Advertising, Printing & Publishing

Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽²⁾

6/7/2022

11,058,000

10,803,667

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
Jackson Hewitt Tax Services Inc. Services: Consumer
Senior Secured First Lien Term Loans LIBOR + 6.25% , 1.00% LIBOR Floor ⁽²⁾
4/20/2023 5,962,500
5,962,500
5,962,500
Keystone Acquisition Corp. Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾
5/1/2024 6,209,863
6,120,389
6,149,006
KNB Holdings Corporation Consumer Goods: Durable
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
4/26/2024 4,967,510
4,891,868
4,868,159
LifeMiles Ltd. Services: Consumer
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
8/18/2022 5,272,436
5,251,526
5,289,835
Loparex International B.V. Containers, Packaging & Glass
Senior Secured First Lien Term Loans LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾
4/11/2025 6,633,333
6,603,510
6,600,167
Manna Pro Products, LLC Consumer Goods - Non-Durable
Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽²⁾⁽⁶⁾
12/8/2023 3,428,668
3,428,668
3,346,036
Midcoast Energy LLC Energy: Oil & Gas
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
8/1/2025 5,486,250
5,434,568
5,321,663
New Media Holdings II LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 6.25% , 1.00% LIBOR Floor ⁽²⁾
7/14/2022 3,539,854
3,530,822
3,522,155
NGS US Finco, LLC Capital Equipment
Senior Secured First Lien Term Loans LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾
10/1/2025 3,000,000
2,985,602
2,985,000
Northern Star Industries, Inc. Capital Equipment
Senior Secured First Lien Term Loans LIBOR + 4.75% , 1.00% LIBOR Floor ⁽⁴⁾
3/28/2025 4,218,125
4,199,230
4,098,330
Nuvei Technologies Corp. Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾
9/29/2025 6,394,823
6,342,533
6,330,876
Peraton Corp. Aerospace and Defense
Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾
4/29/2024 3,432,576
3,419,467
3,374,908
PetroChoice Holdings, Inc. Chemicals, Plastics & Rubber
Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽⁴⁾
8/19/2022 6,894,231
6,874,605
6,830,803
Plaskolite PPC Chemicals, Plastics & Rubber
Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾
12/13/2025 3,250,000
3,185,563
3,185,000
Port Townsend Holdings Company, Inc. Forest Products & Paper
Senior Secured First Lien Term Loans LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾
4/3/2024 3,064,886
3,037,794
3,064,886
PT Network, LLC Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
11/30/2021 4,412,544
4,412,543
4,321,203
PVHC Holding Corp. Containers, Packaging & Glass
Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁶⁾
8/3/2024 1,987,293
1,977,928
1,977,356
Recorded Books, Inc. Media: Diversified & Production
Senior Secured First Lien Term Loan LIBOR + 4.50% ⁽⁴⁾
8/29/2025 5,486,250
5,433,782
5,431,388
Rough Country, LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾
5/25/2023 6,079,627
6,055,700
6,018,830
Safe Fleet Holdings LLC Automotive
Senior Secured First Lien Term Loan LIBOR + 3.00% , 1.00% LIBOR Floor ⁽²⁾
2/3/2025 5,930,218
5,855,223
5,803,337
Salient CRGT Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.75% , 1.00% LIBOR Floor ⁽²⁾
2/28/2022 4,502,976
4,445,538
4,528,643
SCS Holdings I Inc. (Sirius Computer Wholesale
Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾
10/31/2022 5,062,626
5,043,215
5,006,432
Shift4 Payments, LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾
11/29/2024 9,900,000
9,858,087
9,764,370



Company	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value⁽¹⁾
Acrisure, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾	11/22/2023	5,391,750	5,406,210	5,275,288
Avantor, Inc.	Wholesale	Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾	11/22/2024	5,694,738	5,640,336	5,505,104
BW NHHC Holdco Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾	5/15/2025	5,221,132	5,147,587	5,081,727
Cardenas Markets LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 5.75% , 1.00% LIBOR Floor ⁽²⁾	11/29/2023	6,370,000	6,325,291	6,240,689
CD&R TZ Purchaser, Inc.	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾	7/21/2023	6,350,272	6,287,883	6,094,356
CHA Consulting, Inc.	Construction & Building	Senior Secured First Lien Term Loans LIBOR + 4.50% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁶⁾	4/10/2025	1,364,384	1,358,254	1,360,973
Covenant Surgical Partners, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.50% ⁽⁴⁾⁽⁶⁾	10/4/2024	9,907,386	9,886,903	9,808,312
CT Technologies Intermediate Holdings, Inc.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾	12/1/2021	4,164,266	4,077,669	3,918,573
Deliver Buyer, Inc.	Capital Equipment	Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽²⁾	5/1/2024	530,639	529,418	530,640
Elite Comfort Solutions LLC.	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 6.50% , 1.00% LIBOR Floor ⁽⁴⁾	1/15/2021	9,053,081	9,053,081	9,053,081
Envision Healthcare Corporation	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽⁴⁾	10/10/2025	1,975,000	1,903,861	1,903,505
GC EOS Buyer, Inc.	Automotive	Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾	8/1/2025	2,182,031	2,161,444	2,138,391
GK Holdings, Inc.	Services: Business	Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾	1/20/2021	3,947,067	3,937,323	3,550,387
Glass Mountain Pipeline Holdings, LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽⁴⁾	12/23/2024	4,937,686	4,921,803	4,886,336
Golden West Packaging Group LLC	Forest Products & Paper	Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽²⁾	6/20/2023	7,227,034	7,227,034	7,227,034
High Ridge Brands Co.	Consumer Goods - Non-Durable	Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾	6/30/2022	3,046,875	3,019,176	2,808,914
Highline Aftermarket Acquisitions, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾	4/26/2025	4,097,059	4,084,725	3,976,605
InfoGroup, Inc	Services: Business	Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽⁴⁾	4/3/2023	4,912,500	4,877,385	4,843,725
Intermedia Holdings, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽⁴⁾	7/21/2025	4,000,000	3,962,225	3,992,000
Isagenix International, LLC	Wholesale	Senior Secured First Lien Term Loans LIBOR + 5.75% , 1.00% LIBOR Floor ⁽⁴⁾	6/16/2025	2,900,624	2,885,432	2,864,077
Jackson Hewitt Tax Services Inc.	Services: Consumer	Senior Secured First Lien Term Loans LIBOR + 6.25% , 1.00% LIBOR Floor ⁽²⁾	4/20/2023	5,962,500	5,962,500	5,962,500
Keystone Acquisition Corp.	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾	5/1/2024	6,209,863	6,120,389	6,149,006
KNB Holdings Corporation	Consumer Goods: Durable	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	4/26/2024	4,967,510	4,891,868	4,868,159

Company Industry Type of Investment Maturity Par Amount Cost
Fair Value⁽¹⁾
Sierra Enterprises, LLC Beverage & Food
Senior Secured First Lien Term Loans LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾
11/11/2024 5,198,833
5,184,552
5,133,328
SMB Shipping Logisitics, LLC Transportation: Cargo
Senior Secured First Lien Term Loan LIBOR + 4.00% , 1.00% LIBOR Floor ⁽⁴⁾
2/5/2024 2,487,342
2,464,380
2,474,905
Starfish Holdco, LLC High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾
8/16/2024 3,945,138
3,917,156
3,891,878
Syniverse Holdings, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽²⁾
3/9/2023 3,965,013
3,931,611
3,752,488
The Imagine Group LLC Media: Advertising, Printing & Publishing
Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾
6/21/2022 7,860,000
7,804,967
7,327,092
The KeyW Corporation Aerospace and Defense
Senior Secured First Lien Term Loans LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾
5/8/2024 2,697,675
2,685,199
2,684,186
The Octave Music Group, Inc. Media: Diversified & Production
Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾
5/28/2021 4,382,706
4,382,706
4,376,570
ThoughtWorks, Inc. High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 4.00% , 1.00% LIBOR Floor ⁽²⁾⁽⁶⁾
10/11/2024 5,723,121
5,710,431
5,652,726
Tortoise Borrower LLC Banking, Finance, Insurance & Real Estate
Senior Secured First Lien Term Loan LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾
1/31/2025 2,456,437
2,445,734
2,456,438
United Road Services, Inc Transportation: Cargo
Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽²⁾
9/2/2024 3,850,000
3,834,040
3,826,900
Valence Surface Technologies, Inc. Aerospace and Defense
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
6/13/2021 6,272,913
6,269,062
6,272,913
Xebec Global Holdings, LLC High Tech Industries
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
2/12/2024 8,196,417
8,196,417
8,196,417
Z Gallerie, LLC Retail
Senior Secured First Lien Term Loan LIBOR + 6.50% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁷⁾
10/8/2021 4,924,527
4,924,527
2,861,642
Z-Medica, LLC Healthcare & Pharmaceuticals
Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾
9/29/2022 2,662,500
2,662,500
2,616,704
Total $ 284,070,735
$ 282,514,983
$ 277,168,454



Company	Industry	Type of Investment	Maturity	Par Amount	Cost	Fair Value⁽¹⁾
LifeMiles Ltd.	Services: Consumer	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	8/18/2022	5,272,436	5,251,526	5,289,835
Loparex International B.V.	Containers, Packaging & Glass	Senior Secured First Lien Term Loans LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾	4/11/2025	6,633,333	6,603,510	6,600,167
Manna Pro Products, LLC	Consumer Goods - Non-Durable	Senior Secured First Lien Term Loan LIBOR + 6.00% , 1.00% LIBOR Floor ⁽²⁾⁽⁶⁾	12/8/2023	3,428,668	3,428,668	3,346,036
Midcoast Energy LLC	Energy: Oil & Gas	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	8/1/2025	5,486,250	5,434,568	5,321,663
New Media Holdings II LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 6.25% , 1.00% LIBOR Floor ⁽²⁾	7/14/2022	3,539,854	3,530,822	3,522,155
NGS US Finco, LLC	Capital Equipment	Senior Secured First Lien Term Loans LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾	10/1/2025	3,000,000	2,985,602	2,985,000
Northern Star Industries, Inc.	Capital Equipment	Senior Secured First Lien Term Loans LIBOR + 4.75% , 1.00% LIBOR Floor ⁽⁴⁾	3/28/2025	4,218,125	4,199,230	4,098,330
Nuvei Technologies Corp.	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾	9/29/2025	6,394,823	6,342,533	6,330,876
Peraton Corp.	Aerospace and Defense	Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽⁴⁾	4/29/2024	3,432,576	3,419,467	3,374,908
PetroChoice Holdings, Inc.	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽⁴⁾	8/19/2022	6,894,231	6,874,605	6,830,803
Plaskolite PPC	Chemicals, Plastics & Rubber	Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽⁴⁾	12/13/2025	3,250,000	3,185,563	3,185,000
Port Townsend Holdings Company, Inc.	Forest Products & Paper	Senior Secured First Lien Term Loans LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾	4/3/2024	3,064,886	3,037,794	3,064,886
PT Network, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	11/30/2021	4,412,544	4,412,543	4,321,203
PVHC Holding Corp.	Containers, Packaging & Glass	Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁶⁾	8/3/2024	1,987,293	1,977,928	1,977,356
Recorded Books, Inc.	Media: Diversified & Production	Senior Secured First Lien Term Loan LIBOR + 4.50% ⁽⁴⁾	8/29/2025	5,486,250	5,433,782	5,431,388
Rough Country, LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.75% , 1.00% LIBOR Floor ⁽²⁾	5/25/2023	6,079,627	6,055,700	6,018,830
Safe Fleet Holdings LLC	Automotive	Senior Secured First Lien Term Loan LIBOR + 3.00% , 1.00% LIBOR Floor ⁽²⁾	2/3/2025	5,930,218	5,855,223	5,803,337
Salient CRGT Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.75% , 1.00% LIBOR Floor ⁽²⁾	2/28/2022	4,502,976	4,445,538	4,528,643
SCS Holdings I Inc. (Sirius Computer	Wholesale	Senior Secured First Lien Term Loan LIBOR + 4.25% , 1.00% LIBOR Floor ⁽²⁾	10/31/2022	5,062,626	5,043,215	5,006,432
Shift4 Payments, LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾	11/29/2024	9,900,000	9,858,087	9,764,370
Sierra Enterprises, LLC	Beverage & Food	Senior Secured First Lien Term Loans LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾	11/11/2024	5,198,833	5,184,552	5,133,328
SMB Shipping Logisitics, LLC	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 4.00% , 1.00% LIBOR Floor ⁽⁴⁾	2/5/2024	2,487,342	2,464,380	2,474,905
Starfish Holdco, LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾	8/16/2024	3,945,138	3,917,156	3,891,878



Company	Industry	Type of Investment	Maturity	Par Amount		Cost		Fair Value⁽¹⁾
Syniverse Holdings, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.00% , 1.00% LIBOR Floor ⁽²⁾	3/9/2023	3,965,013		3,931,611		3,752,488
The Imagine Group LLC	Media: Advertising, Printing & Publishing	Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾	6/21/2022	7,860,000		7,804,967		7,327,092
The KeyW Corporation	Aerospace and Defense	Senior Secured First Lien Term Loans LIBOR + 4.50% , 1.00% LIBOR Floor ⁽²⁾	5/8/2024	2,697,675		2,685,199		2,684,186
The Octave Music Group, Inc.	Media: Diversified & Production	Senior Secured First Lien Term Loan LIBOR + 4.75% , 1.00% LIBOR Floor ⁽²⁾	5/28/2021	4,382,706		4,382,706		4,376,570
ThoughtWorks, Inc.	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 4.00% , 1.00% LIBOR Floor ⁽²⁾⁽⁶⁾	10/11/2024	5,723,121		5,710,431		5,652,726
Tortoise Borrower LLC	Banking, Finance, Insurance & Real Estate	Senior Secured First Lien Term Loan LIBOR + 3.50% , 1.00% LIBOR Floor ⁽²⁾	1/31/2025	2,456,437		2,445,734		2,456,438
United Road Services, Inc	Transportation: Cargo	Senior Secured First Lien Term Loan LIBOR + 5.25% , 1.00% LIBOR Floor ⁽²⁾	9/2/2024	3,850,000		3,834,040		3,826,900
Valence Surface Technologies, Inc.	Aerospace and Defense	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	6/13/2021	6,272,913		6,269,062		6,272,913
Xebec Global Holdings, LLC	High Tech Industries	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	2/12/2024	8,196,417		8,196,417		8,196,417
Z Gallerie, LLC	Retail	Senior Secured First Lien Term Loan LIBOR + 6.50% , 1.00% LIBOR Floor ⁽⁴⁾⁽⁷⁾	10/8/2021	4,924,527		4,924,527		2,861,642
Z-Medica, LLC	Healthcare & Pharmaceuticals	Senior Secured First Lien Term Loan LIBOR + 5.50% , 1.00% LIBOR Floor ⁽⁴⁾	9/29/2022	2,662,500		2,662,500		2,616,704
Total				$	284,070,735	$	282,514,983	$	277,168,454


(1)	Represents the fair value in accordance with ASC 820 as determined by the board of managers of Sierra JV. The approval of the fair value of the portfolio investments held by Sierra JV is not included in the valuation process of the Company's board of directors described elsewhere herein.


(2)	The interest rate on these loans is subject to a base rate plus 1 Month (“1M”) LIBOR, which at December 31, 2018 was 2.50%.


(3)	The interest rate on these loans is subject to a base rate plus 2 Month (“2M”) LIBOR, which at December 31, 2018 was 261%.


(4)	The interest rate on these loans is subject to a base rate plus 3 Month (“3M”) LIBOR, which at December 31, 2018 was 2.81%.


(5)	The interest rate on these loans is subject to a base rate plus 6 Month (“6M”) LIBOR, which at December 31, 2018 was 2.88%.


(6)	The interest rate on these loans is subject to a base rate plus 12 Month (“12M”) LIBOR, which at December 31, 2018 was 2.93%.


(7)	The investment was on non-accrual status as of December 31, 2018.


(8)	Par amount includes accumulated paid-in-kind ("PIK") interest and is net of repayments.


(9)	The interest rate on these loans is subject to an adjusted base rate ("ABR") plus a spread.


(10)	Includes an analysis of the value of any unfunded loan commitments.


(11)	Security is non-income producing.

Below is certain summarized financial information for the Sierra JV as of ~~June~~September 30, 2019 and December 31, 2018 and for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018.


	June 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
	(unaudited)				(unaudited)
Selected Consolidated Statement of Assets and Liabilities Information:
Investments in loans at fair value (amortized cost of $272,312,609 and $257,831,412, respectively)	$	265,411,129	$	277,168,454
Investments in loans at fair value (amortized cost of $266,852,067 and $282,514,983, respectively)					$	256,366,040	$	277,168,454
Cash and cash equivalents	29,540,400		20,494,190		31,344,722		20,494,190
Other assets	987,884		1,781,149		1,321,215		1,781,149
Total assets	$	295,939,413	$	299,443,793	$	289,031,977	$	299,443,793

Senior credit facility payable (net of deferred financing costs of $2,145,426 and $1,599,958, respectively)	202,754,574		203,300,042		202,950,742		203,300,042
Other liabilities	885,395		953,352		435,779		411,102
Interest payable	4,034,506		411,102		819,058		953,352
Total liabilities	$	207,674,475	$	204,664,496	$	204,205,579	$	204,664,496
Members’ capital	88,264,938		94,779,297		84,826,398		94,779,297
Total liabilities and members' capital	$	295,939,413	$	299,443,793	$	289,031,977	$	299,443,793


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
Selected Consolidated Statement of Operations Information:
Total investment income	$	5,426,634		$	5,116,742		$	11,025,448		$	9,730,431		$	5,280,076		$	5,401,302		$	16,305,521		$	15,131,733
Total expenses	(3,218,553		)	(2,846,810		)	(6,412,699		)	(5,353,116		)	(3,168,637		)	(3,020,096		)	(9,581,333		)	(8,373,213		)
Net change in unrealized appreciation/(depreciation) of investments	539,007			(2,274,324		)	(1,554,951		)	(2,786,848		)	(3,584,545		)	(2,841,807		)	(5,139,832		)	(5,628,655		)
Net realized gain/(loss) on investments	(4,836,350		)	339,249			(4,772,156		)	548,056			134,566			188,240			(4,637,590		)	736,296
Net income	$	(2,089,262	)	$	334,857		$	(1,714,358	)	$	2,138,523		$	(1,338,540	)	$	(272,361	)	$	(3,053,234	)	$	1,866,161

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, the Company must determine which of its unconsolidated Control Investments, if any, are considered “significant subsidiaries.” In evaluating these investments, there are three tests utilized to determine if any Controlled Investments are considered significant subsidiaries: the investment test, the asset test and the income test. Rule 3-09 of Regulation S-X requires the Company to include separate audited financial statements of any unconsolidated majority-owned subsidiary (Control Investments in which the Company owns greater than 50% of the voting securities) in an annual report if any of the three tests exceed 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information of Control Investments in an annual report if any of the three tests exceeds 10%, and summarized financial information in a quarterly report if any of the three tests exceeds 20% pursuant to Rule 10-01(b)(1) of Regulation S-X.

As of ~~June~~September 30, 2019, excluding Sierra JV, the Company had no single Control Investment which would be deemed to be a significant subsidiary pursuant to Rule 10-01(b)(1) of Regulation S-X.

Note 4. Fair Value Measurements

The Company follows ASC 820 for measuring the fair value of portfolio investments. Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation models involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. The Company’s fair value analysis includes an analysis of the value of any unfunded loan commitments. Financial investments recorded at fair value in the consolidated financial statements are categorized for disclosure purposes based upon the level of judgment associated with the inputs used to measure their value. The valuation hierarchical levels are based upon the transparency of the inputs to the valuation of the investment as of the measurement date. The three levels are defined as follows. Investments which are valued using NAV as a practical expedient are excluded from this hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Valuations based on inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable at the measurement date. This category includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in non-active markets including actionable bids from third parties for privately held assets or liabilities, and observable inputs other than quoted prices such as yield curves and forward currency rates that are entered directly into valuation models to determine the value of derivatives or other assets or liabilities.

Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the Market or Income Approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates, beta and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

In addition to using the above inputs in investment valuations, the Company employs the valuation policy approved by the board of directors that is consistent with ASC 820 (see Note 2). Consistent with the Company’s valuation policy, the Company evaluates the source of inputs, including any markets in which the Company’s investments are trading, in determining fair value.

The following table presents the fair value measurements of the Company’s total investments, by major class according to the fair value hierarchy, as of ~~June~~September 30, 2019:


Type of Investment ⁽¹⁾	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset
Senior secured first lien term loans	$	—	$	—	$	401,886,948	$	401,886,948	$	—	$	—	$	365,464,032	$	365,464,032
Senior secured first lien notes	—		—		30,106,400		30,106,400		—		—		15,095,000		15,095,000
Senior secured second lien term loans	—		—		149,900,159		149,900,159		—		—		142,716,810		142,716,810
Subordinated notes	—		—		67,042,643		67,042,643		—		—		62,478,039		62,478,039
Equity/warrants	35,647,826		—		38,437,243		74,085,069		27,450,133		—		44,705,484		72,155,617
Total	$	35,647,826	$	—	$	687,373,393	$	723,021,219	$	27,450,133	$	—	$	630,459,365	$	657,909,498
Investments measured at net asset value							$	82,000,812							$	79,041,159
Total Investments, at fair value							$	805,022,031							$	736,950,657


(1)	Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in

the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.

The following table presents the fair value measurements of the Company’s total investments, by major class according to the fair value hierarchy, as of December 31, 2018:



Type of Investment⁽¹⁾	Level 1		Level 2		Level 3		Total
Asset
Senior secured first lien term loans	$	—	$	—	$	479,593,279	$	479,593,279
Senior secured first lien notes	—		4,742,100		30,752,993		35,495,093
Senior secured second lien term loans	—		—		169,923,547		169,923,547
Subordinated notes	—		—		66,187,857		66,187,857
Equity/warrants	—		—		75,480,034		75,480,034
Total	$	—	$	4,742,100	$	821,937,710	$	826,679,810
Investments measured at net asset value							$	96,800,952
Total Investments, at fair value							$	923,480,762


(1)	Certain investments that are measured at fair value using NAV have not been categorized in the fair value hierarchy. The fair value amounts presented in

the table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the Consolidated Statements of Assets and Liabilities.



Derivative Instrument-Long Exposure	Level 1		Level 2		Level 3			Total
Asset/(Liability)
Unrealized depreciation on TRS with Citibank, N.A.	$	—	$	—	$	(6,524,904	)	$	(6,524,904	)

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the ~~six~~nine months ended ~~June~~September 30, 2019:


	Senior Secured First Lien Term Loans			Senior Secured First Lien Notes			Senior Secured Second Lien Term Loans			Subordinated Notes			Equity/Warrants			Total Return Swap			Total			Senior Secured First Lien Term Loans			Senior Secured First Lien Notes			Senior Secured Second Lien Term Loans			Subordinated Notes			Equity/Warrants			Total Return Swap			Total
Balance, December 31, 2018	$	479,593,279		$	30,752,993		$	169,923,547		$	66,187,857		$	75,480,034		$	(6,524,904	)	$	815,412,806		$	479,593,279		$	30,752,993		$	169,923,547		$	66,187,857		$	75,480,034		$	(6,524,904	)	$	815,412,806
Purchases	68,000,324			-			9,125,119			7,377,980			878,844			—			85,382,267			96,284,986			-			9,687,252			7,400,227			(7,115,943		)	-			106,256,522
Sales	(110,922,355		)	(271,250		)	(24,485,036		)	(9,784,347		)	(52,396,821		)	—			(197,859,809		)	(165,383,818		)	(15,271,250		)	(27,327,760		)	(11,290,388		)	(43,626,923		)	-			(262,900,139		)
Transfers in	-			-			-			-			-			—			—			-			-			-			-			-			-			—
Transfers out	-			-			-			-			-			—			—			-			-			-			-			-			-			—
Amortization of discount/(premium)	744,007			-			340,534			-			-			—			1,084,541			670,606			-			509,528			-			-			-			1,180,134
Paid-in-kind interest income	1,610,062			-			1,111,867			-			-			—			2,721,929			3,311,294			-			826,220			-			-			-			4,137,514
Net realized gains/(losses)	(27,130,599		)	(1,728,750		)	124,586			(1,981,643		)	15,910,217			—			(14,806,189		)	(47,855,463		)	(1,728,750		)	84,328			(1,981,643		)	15,610,206			-			(35,871,322		)
Net change in unrealized appreciation/(depreciation)	(10,007,770		)	1,353,407			(6,240,458		)	5,242,796			(1,435,031		)	6,524,904			(4,562,152		)	(1,156,852		)	1,342,007			(10,986,305		)	2,161,986			4,358,110			6,524,904			2,243,850
Balance, June 30, 2019	$	401,886,948		$	30,106,400		$	149,900,159		$	67,042,643		$	38,437,243		$	—		$	687,373,393
Change in net unrealized appreciation/ (depreciation) in investments held as of June 30, 2019⁽¹⁾	$	(30,084,046	)	$	216,808		$	(6,777,748	)	$	2,359,670		$	2,600,264		$	—		$	(31,685,052	)
Balance, September 30, 2019																						$	365,464,032		$	15,095,000		$	142,716,810		$	62,478,039		$	44,705,484		$	—		$	630,459,365
Change in net unrealized appreciation/ (depreciation) in investments held as of September 30, 2019⁽¹⁾																						$	(29,669,966	)	$	54,808		$	(11,610,130	)	$	(716,706	)	$	14,153		-			$	(41,927,841	)


(1)	Amount is included in the related amount on investments and total return swap in the Consolidated Statements of Operations.

Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period in which they occur. During the ~~six~~nine months ended ~~June~~September 30, 2019, the Company recorded no transfers from Level 3 to Level 2 and no transfers from Level 2 to Level ~~3 due to availability of market data and observable valuation inputs to support the valuation.~~3. The Company recorded no other transfers between levels.

The following table provides a reconciliation of the beginning and ending balances for total investments that use Level 3 inputs for the ~~six~~nine months ended ~~June~~September 30, 2018:


	Senior Secured First Lien Term Loans			Senior Secured First Lien Notes			Senior Secured Second Lien Term Loans			Subordinated Notes			Equity/Warrants			Total Return Swap			Total			Senior Secured First Lien Term Loans			Senior Secured First Lien Notes			Senior Secured Second Lien Term Loans			Subordinated Notes			Equity/Warrants			Total Return Swap			Total
Balance, December 31, 2017	$	567,414,544		$	30,270,881		$	231,837,617		$	74,341,285		$	65,754,315		$	(5,354,868	)	$	964,263,774		$	567,414,544		$	30,270,881		$	231,837,617		$	74,341,285		$	65,754,315		$	(5,354,868	)	$	964,263,774
Purchases	84,961,422			3,379,999			5,361,078			10,012,005			16,759,809			—			120,474,313			126,033,322			3,379,999			911,186			10,318,059			29,563,879			—			170,206,445
Sales	(116,967,171		)	(1,893,250		)	(42,714,040		)	(5,045,736		)	(606,000		)	—			(167,226,197		)	(161,089,099		)	(1,893,250		)	(52,354,019		)	(5,232,166		)	(6,421,660		)	—			(226,990,194		)
Transfers in	—			—			—			—			—			—			—			—			—			—			—			—			—			—
Transfers out	—			(1,776,200		)	—			—			—			—			(1,776,200		)	—			(6,706,400		)	—			—			—			—			(6,706,400		)
Amortization of discount/(premium)	645,745			—			353,124			—			—			—			998,869			851,612			—			528,248			—			—			—			1,379,860
Paid-in-kind interest income	867,382			—			576,517			—			—			—			1,443,899			1,485,027			—			881,801			—			—			—			2,366,828
Net realized gains/(losses)	(13,247,566		)	(106,750		)	(18,393,588		)	436,466			—			—			(31,311,438		)	(31,950,356		)	(106,750		)	(17,853,861		)	436,466			(1,191,691		)	—			(50,666,192		)
Net change in unrealized appreciation/(depreciation)	(12,658,223		)	709,878			16,587,352			(1,324,510		)	(1,990,523		)	2,634,655			3,958,629			(11,918,005		)	(379,913		)	17,451,080			(2,549,120		)	624,746			3,370,529			6,599,317
Balance, June 30, 2018	$	511,016,133		$	30,584,558		$	193,608,060		$	78,419,510		$	79,917,601		$	(2,720,213	)	$	890,825,649		$	490,827,045		$	24,564,567		$	181,402,052		$	77,314,524		$	88,329,589		$	(1,984,339	)	$	860,453,438
Change in net unrealized appreciation/(depreciation) in investments held as of June 30, 2018⁽¹⁾	$	(12,658,223	)	$	709,878		$	16,587,352		$	(1,324,510	)	$	(1,990,523	)	$	2,634,655		$	3,958,629
Change in net unrealized appreciation/(depreciation) in investments held as of September 30, 2018⁽¹⁾																						$	(43,906,776	)	$	(866,114	)	$	(1,034,295	)	$	(1,849,176	)	$	(189,386	)	$	3,370,529		$	(44,475,218	)


(1)	Amount is included in the related amount on investments and total return swap in the Consolidated Statements of Operations.

Transfers between levels of the fair value hierarchy are reported at the beginning of the reporting period in which they occur. During the ~~six~~nine months ended ~~June~~September 30, 2018, the Company recorded ~~$1,776,200~~$6,706,400 in transfers from Level 3 to Level 2 and ~~$0 in~~no transfers from Level 2 to Level ~~3 due to availability of market data and observable valuation inputs to support the valuation.~~3. The Company recorded no other transfers between levels.

The following table presents the quantitative information about Level 3 fair value measurements of the Company’s total investments, as of ~~June~~September 30, 2019:

Type of Investment

Fair Value

Valuation techniques

Unobservable input⁽¹⁾

Range (weighted average)

Fair Value

Valuation techniques

Unobservable input⁽¹⁾

Range (weighted average)

Senior Secured First Lien Term Loan

299,891,500

Income Approach (DCF)

Market yield

6.47% - 17.19% (9.87%)

255,889,283

Income Approach (DCF)

Market yield

6.98% - 23.64% (10.86%)

Senior Secured First Lien Term Loan

25,565,838

Market Approach (Guideline Comparable)/Income Approach (DCF)/Enterprise Valuation Analysis

Revenue Multiple, EBITDA Multiple, Discount Rate

1.35x - 1.35x (1.35x) / 3.50x-7.50x (6.16x) / 17.00% - 18.50% (17.29%)

11,605,003

Market Approach (Guideline Comparable)/Income Approach (DCF)/Enterprise Valuation Analysis

Revenue Multiple, EBITDA Multiple, Discount Rate

3.00x - 6.50x (5.38x) / 16.75% - 18.75% (17.75%) / 1.25x - 1.45x (1.35x)

Senior Secured First Lien Term Loan

76,429,611

Recent Arms-length transaction

N/A

97,969,746

Recent Arms-length transaction

N/A

Senior Secured First Lien Notes

30,106,400

Income Approach (DCF)

Market Yield

11.56% - 20.77% (13.26%)

15,095,000

Income Approach (DCF)

Market yield

11.42% - 40.34% (21.25%)

Senior Secured Second Lien Term Loan

143,099,921

Income Approach (DCF)

Market yield

8.35% - 20.78% (12.50%)

135,722,452

Income Approach (DCF)

Market yield

9.119% - 29.760% (13.70%)

Senior Secured Second Lien Term Loan

6,800,238

Market Approach (Guideline Comparable)/Income Approach (DCF)

EBITDA Multiple, Discount Rate

6.00x - 7.00x (6.50x) / 17.50% - 19.50% (18.50%)

6,994,358

Market Approach (Guideline Comparable)/Income Approach (DCF)

EBITDA Multiple, Discount Rate

6.00x - 7.00x (6.50x) / 17.50% - 19.50% (18.50%)

Equity/warrants

34,354,637

Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/ Income Approach (DCF)/Enterprise Valuation Analysis

Revenue Multiple, EBITDA Multiple, Discount Rate, Capitalization Rate, Book Value Multiple, Expected Proceeds

1.35x - 1.35x (1.35x) / 3.50x-9.50x (6.06x) / 17.00% - 21.25% 18.00%) / 7.63% - 8.50% (8.22%) / 1.25x - 1.25x (1.25x) / $1.2M - $1.2M ($1.2M)

39,802,575

Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/ Option Model/Income Approach (DCF)/ Enterprise Valuation Analysis

Revenue Multiple, EBITDA Multiple, Discount Rate, Capitalization Rate, book Value Multiple

3.50x - 9.50x (7.94x) / 17.00% - 21.25% (17.67%) / 1.25x - 1.45x (1.35x) / 7.63% - 8.50% (8.17%) / 1.00x - 1.50x (1.25x)

Equity/warrants

4,082,606

Recent Arms-length transaction

N/A

4,100,471

Recent Arms-length transaction

N/A

Equity/warrants

802,438

Enterprise Value Analysis

Expected Proceeds

$10.20M - $15.20M ($12.70M)

Subordinated Notes

65,829,342

Income Approach (DCF)

Discount Rate

9.20% - 22.50% (18.06%)

61,264,948

Income Approach (DCF)

Discount rate

9.20% - 22.50% (18.03%)

Subordinated Notes

952,381

Market Approach (Guideline Comparable)

EBITDA Multiple

7.00x - 8.00x (7.50x)

260,711

Recent Arms-length transaction

N/A

Subordinated Notes

260,919

Recent Arms-length transaction

N/A

952,380

Market Approach (Guideline Comparable)

EBITDA Multiple

7.00x - 8.00x (7.50x)

Total

687,373,393

630,459,365


(1)	Represents the method used when the Company has determined that market participants would use such inputs when measuring the fair value of these investments.

The following table presents the quantitative information about Level 3 fair value measurements of the Company’s total investments, as of December 31, 2018:



Type of Investment	Fair Value			Valuation techniques	Unobservable input⁽¹⁾	Range (weighted average)
Senior Secured First Lien Term Loan	$	264,976,095		Income Approach (DCF)	Market yield	7.69% - 17.93% (10.66%)
Senior Secured First Lien Term Loan	87,515,822			Market Approach (Guideline Comparable)/Income Approach (DCF)/Enterprise Valuation Analysis	Revenue Multiple, EBITDA Multiple, Discount Rate, Expected Proceeds	1.35x - 1.35x (1.35x) / 3.50x-7.50x (6.14x) / 16.25% - 18.50% (17.34%) / $0.0M - $102.5M ($32.1M)
Senior Secured First Lien Term Loan	128,053,745			Recent Arms-length transaction	Recent Arms-length transaction	N/A
Senior Secured First Lien Notes	30,752,993			Income Approach (DCF)	Market yield	12.31% - 28.86% (15.10%)
Senior Secured Second Lien Term Loan	153,447,349			Income Approach (DCF)	Market yield	9.34% - 17.63% (11.86%)
Senior Secured Second Lien Term Loan	9,776,992			Recent Arms-length transaction	Recent Arms-length transaction	N/A
Senior Secured Second Lien Term Loan	6,699,206			Market Approach (Guideline Comparable)/Income Approach (DCF)	EBITDA Multiple, Discount Rate	5.00x - 6.00x (5.50x) / 17.50% - 19.50% (18.50%)
Equity/warrants	46,183,711			Market Approach (Guideline Comparable)/Market Approach (Comparable Transactions)/ Option Model/Income Approach (DCF)/ Enterprise Valuation Analysis	Revenue Multiple, EBITDA Multiple, Book Value Multiple, Discount Rate, Volatility , Average List Price, Expected Proceeds	1.35x - 1.35x (1.35x) / 3.50x-13.50x (8.52x) / 12.50% - 21.25% (20.02%) / 50.00% - 50.00% (50.00%) / $1.1M - $1.1M ($1.1M) / 7.63% - 8.50% (8.25%) / 1.25x - 1.25x (1.25x) / $1.2M - $86.0M ($1.2M)
Equity/warrants	2,000,000			Recent Arms-length transaction	Recent Arms-length transaction	N/A
Equity/warrants	27,296,321			Income Approach (DCF)	Market yield	13.31% - 18.90% (14.47%)
Subordinated Notes	63,437,676			Income Approach (DCF)	Discount rate	13.00% - 25.00% (18.46%)
Subordinated Notes	1,797,800			Income Approach (DCF)	Market yield	9.30%
Total	$	821,937,710
TRS	(6,524,904		)	Income Approach (DCF)	Market yield	6.65% - 16.85% (9.39%)
Total	$	815,412,806


(1)	Represents the method used when the Company has determined that market participants would use such inputs when measuring the fair value of these investments.

The significant unobservable inputs used in the fair value measurement of the Company’s debt and derivative investments are market yields. The significant unobservable inputs used in the fair value measurement of the Company’s equity/warrants investments are comparable company multiples of revenue or EBITDA for the latest twelve months (“LTM”), next twelve months (“NTM”) or a reasonable period a market participant would consider. Increases or decreases in any of the above significant unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.

Note 5. Total Return Swap

On August 27, 2013, the Company, through its wholly-owned financing subsidiary, Arbor, entered into a TRS with Citibank, N.A. (“Citibank”) that is indexed to a basket of loans.

SIC Advisors ~~acts~~acted as the investment manager of Arbor and ~~has~~had discretion over the composition of the basket of loans underlying the TRS. The terms of the TRS ~~are~~were governed by an ISDA 2002 Master Agreement, the Schedule thereto and Credit Support Annex to such Schedule, and the Confirmation exchanged thereunder, between Arbor and Citibank, which collectively ~~establish~~established the TRS, and are collectively referred to herein as the “TRS Agreement”. On March 21, 2014, Arbor amended and restated its Confirmation Letter Agreement (the “Amended Confirmation Agreement”) with Citibank. The Amended Confirmation Agreement increased the maximum market value (determined at the time each such loan becomes subject to the TRS) of the portfolio of loans that Arbor may select from $100 million to $200 million, and increased the interest rate payable to Citibank from LIBOR plus 1.30% per annum to LIBOR plus 1.35% per annum. On July 23, 2014, Arbor entered into the Second Amended and Restated Confirmation Letter Agreement with Citibank to increase the maximum market value (determined at the time each such loan becomes subject to the TRS) of the portfolio of loans that Arbor may select from $200 million to $350 million. On June 8, 2015, Arbor entered into the Third Amended and Restated Confirmation Letter Agreement with Citibank to decrease the maximum market value (determined at the

time each such loan becomes subject to the TRS) of the portfolio of loans that Arbor may select from $350 million to $300 million. On March 21, 2016, Arbor entered into the Fourth Amended and Restated Confirmation Letter Agreement (the “Fourth Amended Confirmation Agreement”) with Citibank to extend the term of the TRS from March 21, 2016 through March 21, 2019 and increase the interest rate payable to Citibank from LIBOR plus 1.35% per annum to LIBOR plus 1.65% per annum. On September 29, 2017, Arbor entered into the Fifth Amended and Restated Confirmation Letter Agreement (the “Fifth Amended Confirmation Agreement”) with Citibank to reduce the maximum portfolio notional (determined at the time each such loan becomes subject to the TRS) from $300,000,000 to $180,000,000, through incremental reductions of $60,000,000 on October 3, 2017 and $20,000,000 on each of November 3, 2017, December 3, 2017 and January 3, 2018. The Fifth Amended Confirmation Agreement also decreased the interest rate payable to Citibank from LIBOR plus 1.65% per annum to LIBOR plus 1.60% per annum. On July 22, 2019 the TRS with Citibank was terminated.

Pursuant to the terms of the TRS Agreement, as amended and subject to conditions customary for transactions of this nature, Arbor ~~may~~could select a portfolio of loans with a maximum market value (determined at the time each such loan becomes subject to the TRS) of $180 million, subject to the Fifth Amended Confirmation Agreement, which is also referred to as the maximum notional amount of the TRS. Arbor ~~receives~~received from Citibank a periodic payment on set dates that is based upon any coupons, both earned and accrued, generated by the loans underlying the TRS, subject to limitations described in the TRS Agreement as well as any fees associated with the loans included in the portfolio. Arbor ~~pays~~paid to Citibank interest at a rate equal to one-month LIBOR plus 1.60% per annum. In addition, upon the termination or repayment of any loan subject to the TRS, Arbor either ~~receives~~received from Citibank the appreciation in the value of such loan, or ~~pays~~paid to Citibank any depreciation in the value of such loan.

~~SIC Advisors may terminate the TRS on behalf of~~ Arbor ~~at any time upon providing 10 days prior notice to Citibank. Citibank may terminate the TRS at any time.~~

~~Arbor is~~was required to pay a minimum usage fee in connection with the TRS of 1.60% on the amount equal to 85% of the average daily unused portion of the maximum amount permitted under the TRS. Such minimum usage fee ~~will~~did not apply during the first 365 days and last 60 days of the term of the TRS. Arbor ~~will~~ also ~~pay~~paid Citibank customary fees in connection with the establishment and maintenance of the TRS. During the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, Arbor paid no minimum usage fees.

Arbor iswas required to initially cash collateralize a specified percentage of each loan (generally 20% to 30% of the market value of such loan) included under the TRS in accordance with margin requirements described in the TRS Agreement. As of ~~June~~September 30, 2019 and December 31, 2018, Arbor has posted ~~$1,208~~$1,216 and $27,000,000, respectively, in collateral to Citibank in relation to the TRS, which is recorded on the Consolidated Statements of Assets and Liabilities as cash collateral on TRS. Arbor iswas restricted from removing the cash collateral posted to Citibank and ~~may be~~was required to post additional collateral from time to time as a result of a decline in the mark-to-market value of the portfolio of loans subject to the TRS. The obligations of Arbor under the TRS Agreement ~~are~~were non-recourse to the Company and the Company’s exposure under the TRS Agreement iswas limited to the value of the Company’s investment in Arbor, which generally ~~equals~~equaled the value of cash collateral provided by Arbor under the TRS Agreement.

In connection with the TRS, Arbor ~~has~~ made customary representations and warranties and iswas required to comply with various covenants, reporting requirements and other customary requirements for similar transactions. In addition to customary events of default and termination events included in the form ISDA 2002 Master Agreement, the TRS Agreement ~~contains~~contained the following termination events: (a) a failure to satisfy the portfolio criteria for at least 30 days; (b) a failure to post initial cash collateral or additional collateral as required by the TRS Agreement; (c) a default by Arbor or the Company with respect to indebtedness in an amount equal to or greater than the lesser of $10,000,000 and 2% of the Company’s NAV at such time; (d) a merger of Arbor or the Company meeting certain criteria; (e) the Company or Arbor amending their respective constituent documents to alter their investment strategy in a manner that has or could reasonably be expected to have a material adverse effect; and (f) SIC Advisors ceasing to be the investment manager of Arbor or to have authority to enter into transactions under the TRS Agreement on behalf of Arbor, and not being replaced by an entity reasonably acceptable to Citibank. As of ~~June~~September 30, 2019 and December 31, 2018, the Company did not have any derivatives with contingent features in net liability positions; therefore, if a trigger event had occurred, no amount would have been required to be posted by the Company.

The Company’s maximum credit risk exposure as of ~~June~~September 30, 2019 and December 31, 2018 is ~~$5,492~~$1,216 and $27,113,252, respectively, which is recorded on the Consolidated Statements of Assets and Liabilities as cash collateral on TRS and receivable due on TRS.

The Company’s receivable from Citibank represents realized amounts from payments on underlying loans in the TRS portfolio that as of ~~June~~September 30, 2019 and December 31, 2018 was ~~$4,284~~$0 and $113,252, respectively, which is recorded on the Consolidated Statements of Assets and Liabilities as receivable due on total return swap. The Company does not offset collateral posted in relation to the TRS with any unrealized appreciation or depreciation outstanding in the Consolidated Statements of Assets and Liabilities as of ~~June~~September 30, 2019 and December 31, 2018.

Transactions in TRS contracts during the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018			2019			2018			2019		2018			2019			2018
Interest income and settlement from TRS portfolio	$	(103,503	)	$	1,222,320		$	(9,632,904	)	$	2,659,675		$	—	$	1,463,986		$	309,388		$	4,123,660
Traded gains/(loss) on TRS loan sales	(43,278		)	(2,265,995		)	309,388			(2,224,728		)	—		(364,450		)	(9,632,904		)	(2,589,178		)
Net realized gains/(loss) on TRS portfolio	$	(146,781	)	$	(1,043,675	)	$	(9,323,516	)	$	434,947		$	—	$	1,099,536		$	(9,323,516	)	$	1,534,482

Net change in unrealized appreciation/(depreciation) on TRS portfolio	$	(144,311	)	$	(306,714	)	$	6,524,904		$	2,634,655		$	—	$	735,874		$	6,524,904		$	3,370,529

The Company held one derivative position as of ~~June~~September 30, 2019 and December 31, 2018, subject to a Master Agreement (“MA”). The following table represents the Company’s gross and net amounts after offset under the MA, of the derivative assets and liabilities presented by derivative type net of the related collateral pledged by the Company as of ~~June~~September 30, 2019 and December 31, 2018:


	Gross Derivative Assets/ (Liabilities) Subject to MA			Derivative Amount Available for Offset		Net Amount Presented in the Consolidated Statements of Assets and Liabilities			Cash Collateral Posted ⁽¹⁾		Net Amount of Derivative Assets/(Liabilities)		Gross Derivative Assets/ (Liabilities) Subject to MA			Derivative Amount Available for Offset		Net Amount Presented in the Consolidated Statements of Assets and Liabilities			Cash Collateral Posted ⁽¹⁾		Net Amount of Derivative Assets/(Liabilities)
June 30, 2019
September 30, 2019
TRS⁽¹⁾ ⁽²⁾	$	—		$	—	$	—		$	—	$	—	$	—		$	—	$	—		$	—	$	—
December 31, 2018
TRS⁽¹⁾	$	(6,524,904	)	$	—	$	(6,524,904	)	$	6,524,904	$	—	$	(6,524,904	)	$	—	$	(6,524,904	)	$	6,524,904	$	—


(1)	As of ~~June~~September 30, 2019 and December 31, 2018, ~~$1,208~~$1,216 and $27,000,000, respectively, of cash was posted for initial margin requirements for the TRS as reported on the Consolidated Statements of Assets and Liabilities as cash collateral on TRS.


(2)	As of ~~June~~September 30, 2019, there were no loans underlying the TRS.

The volume of the Company’s derivative transactions for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 were as follows:

Three Months Ended
June 30, Six Months Ended
June 30,
2019 2018 2019 2018
Average notional amount of contracts⁽¹⁾
$ —
$ 168,753,875
$ 30,563,576
$ 170,174,081



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Average notional amount of contracts⁽¹⁾	$	—	$	168,753,875	$	12,225,430	$	170,174,081


(1)	Average notional amount is based on the average month end balances for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, which is representative of the volume of notional contract amounts held during each year.

Note 6. Borrowings

The following table shows the Company's outstanding debt as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019							December 31, 2018							September 30, 2019							December 31, 2018
	Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment
ING Credit Facility	$	220,000,000	$	88,100,000		$	131,900,000	$	220,000,000	$	115,000,000		$	105,000,000	$	215,000,000	$	88,100,000		$	126,900,000	$	220,000,000	$	115,000,000		$	105,000,000
Alpine Credit Facility	300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000
Total before deferred financing costs	520,000,000		328,100,000			191,900,000		520,000,000		355,000,000			165,000,000		515,000,000		328,100,000			186,900,000		520,000,000		355,000,000			165,000,000
Unamortized deferred financing costs	—		(2,631,660		)	—		—		(3,460,986		)	—		—		(2,660,252		)	—		—		(3,460,986		)	—
Total borrowings outstanding, net of deferred financing costs	$	520,000,000	$	325,468,340		$	191,900,000	$	520,000,000	$	351,539,014		$	165,000,000	$	515,000,000	$	325,439,748		$	186,900,000	$	520,000,000	$	351,539,014		$	165,000,000

As a BDC, the Company is generally allowed to employ leverage to the extent that its asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if certain requirements under the 1940 Act are met) after giving effect to such leverage. The amount of leverage that the Company employs at any time depends on its assessment of the market and other factors at the time of any proposed borrowing.

The fair value of the Company’s debt obligation is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under

current market conditions. The fair value of the Company’s margin borrowings are estimated based upon market interest rates for

its own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. The Company’s debt obligation is recorded at its carrying value, which approximates fair value.

ING Credit Facility

On August 12, 2016, the Company amended its existing senior secured syndicated revolving credit facility (the “ING Credit Facility”) pursuant to a Senior Secured Revolving Credit Agreement (the “Revolving Credit Agreement”) with certain lenders party thereto from time to time and ING Capital LLC, as administrative agent. The ING Credit Facility matures on August 12, 2020 and is secured by substantially all of the Company’s assets, subject to certain exclusions as further set forth in an Amended and Restated Guarantee, Pledge and Security Agreement (the “Security Agreement”) entered into in connection with the Revolving Credit Agreement, among the Company, the subsidiary guarantors party thereto, ING Capital LLC, as Administrative Agent, each Financial Agent and Designated Indebtedness Holder party thereto and ING Capital LLC, as Collateral Agent. The ING Credit Facility also includes usual and customary representations, covenants and events of default for senior secured revolving credit facilities of this nature. On February 13, 2015, commitments to the ING credit facility were expanded from $150,000,000 to $170,000.000. On August 12, 2016, commitments to the ING credit facility were expanded from $170,000,000 to $175,000,000. On April 20, 2017, commitments to the ING Credit Facility were expanded from $175,000,000 to $220,000,000. On February 8, 2019, we amended our ING Credit Facility, among other things, to permit the transactions contemplated by the MCC Merger Agreement and the MDLY Merger Agreement. On July 25, 2019, the Company entered into Amendment No. 2 to the Revolving Credit Agreement (the “Amendment”), with certain lenders party thereto, ING Capital LLC, as administrative agent (the “Administrative Agent”), and, solely with respect to Section 2.10 of the Amendment, SIC AAR LLC, SIC Investment Holdings LLC and Sierra Management, Inc., as subsidiary guarantors. The Amendment amends certain provisions of the Revolving Credit Agreement (as amended by Amendment No. 1, the “Prior Facility” and, as further amended by Amendment No. 2, the “Facility”) to, among other things, (i) reduce the size of the commitments thereunder from $220.0 million to $215.0 million, (ii) extend the Revolver Termination Date (as defined in the Prior Facility) from August 12, 2019 to March 31, 2020 and (iii) extend the Maturity Date (as defined in the Prior Facility) from August 12, 2020 to March 31, 2021.

The ING Credit Facility allows for the Company, at its option, to borrow money at a rate of either (i) an alternate base rate plus 1.50% per annum or (ii) LIBOR plus 2.50% per annum. The interest rate margins are subject to certain step-downs upon the satisfaction of certain conditions described in the Revolving Credit Agreement. The alternate base rate will be the greater of (i) the U.S. Prime Rate set forth in the Wall Street Journal, (ii) the federal funds effective rate plus 1/2 of 1%, and (iii) three month LIBOR plus 1.00%. As of ~~June~~September 30, 2019 and December 31, 2018, the commitment under the ING Credit Facility was ~~$220,000,000.~~$215,000,000 and 220,000,000, respectively. The ING Credit Facility includes an accordion feature that allows for potential future expansion of the ING Credit Facility up to a total of $500,000,000. Availability of loans under the ING Credit Facility is linked to the valuation of the collateral pursuant to a borrowing base mechanism.

The Company is also required to pay a commitment fee to the lenders based on the daily unused portion of the aggregate commitments under the ING Credit Facility. The commitment fee is (i) 1.50% if the used portion of the aggregate commitments is less than or equal to 40%, (ii) 0.75% if the used portion of the aggregate commitments is greater than 40% and less than or equal to 65% or (iii) 0.50% if the used portion of the aggregate commitments is greater than 65%. The ING Credit Facility provides that the Company may use the proceeds of the facility for general corporate purposes, including making investments in accordance with the Company’s investment objective and strategy.

Borrowings under the Revolving Credit Agreement are subject to, among other things, a minimum borrowing base. Substantially all of the Company’s assets are pledged as collateral under the Revolving Credit Agreement. The ING Credit Facility requires the Company to, among other things (i) make representations and warranties regarding the collateral as well the Company’s business and operations, (ii) agree to certain indemnification obligations, and (iii) agree to comply with various affirmative and negative covenants. The documents for the Revolving Credit Agreement also include default provisions, such as the failure to make timely payments under the Revolving Credit Agreement, the occurrence of a change in control, and the failure by the Company to materially perform under the operative agreements governing the Revolving Credit Agreement, which, if not complied with, could accelerate repayment under the Revolving Credit Agreement, thereby materially and adversely affecting the Company’s liquidity, financial condition and results of operations.

In connection with the security interest established under the Security Agreement, the Company, ING Capital LLC, in its capacity as collateral agent, and State Street Bank and Trust Company, in its capacity as the Company’s custodian, entered into a control agreement dated as of December 4, 2013, in order to, among other things, perfect the security interest granted pursuant to the Security Agreement in, and provide for control over, the related collateral.

As of ~~June~~September 30, 2019 and December 31, 2018, the carrying amount of the Company’s borrowings under the ING Credit Facility approximated their fair value. The fair value of the Company’s debt obligation is determined in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants

at the measurement date under current market conditions. The fair value of the Company’s borrowing under the ING Credit Facility is estimated based upon market interest rates of the Company’s borrowing or entities with similar credit risk, adjusted for nonperformance risk, if any. As of ~~June~~September 30, 2019 and December 31, 2018, the ING Credit Facility would be deemed to be Level 3, as defined in Note 4.

As of ~~June~~September 30, 2019 and December 31, 2018, the financing costs of ~~$1,071,608~~$1,344,757 and $1,419,794 related to the ING Credit Facility have been capitalized and are being amortized over the respective terms, respectively. The following table shows additional information about the interest and financing costs related to the ING Credit Facility for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Interest expense related to the ING Credit Facility	$	1,368,135		$	1,694,752		$	2,956,802		$	3,559,859		$	1,322,880		$	1,792,545		$	4,279,682		$	5,352,403
Financing expenses related to the ING Credit Facility	248,749			231,882			488,187			461,496			233,388			234,490			721,574			695,986
Total interest and financing expenses related to the ING Credit Facility	$	1,616,884		$	1,926,634		$	3,444,989		$	4,021,355		$	1,556,268		$	2,027,035		$	5,001,256		$	6,048,389

Weighted average outstanding debt balance of the ING Credit Facility	$	109,383,516		$	138,813,187		$	98,800,552		$	153,132,597		$	88,100,000		$	142,173,913		$	95,194,505		$	149,439,560
Weighted average interest rate of the ING Credit Facility (annualized)	5.8		%	4.8		%	6.0		%	4.6		%	5.9		%	4.9		%	5.9		%	4.7		%

Alpine Credit Facility

On September 29, 2017, the Company’s wholly-owned, special purpose financing subsidiary, Alpine, amended its existing revolving credit facility (the “Alpine Credit Facility”) pursuant to an Amended and Restated Loan Agreement (the “Amendment”) with JPMorgan Chase Bank, National Association (“JPMorgan”), as administrative agent and lender, the Financing Providers from time to time party thereto, SIC Advisors, as the portfolio manager, and the Collateral Administrator, Collateral Agent and Securities Intermediary party thereto (the “Loan Agreement”). The Loan Agreement was amended to, among other things, (i) extend the reinvestment period until December 29, 2020, (ii) extend the scheduled termination date until March 29, 2022, (iii) decrease the applicable margin for advances to 2.85% per annum and (iv) increase the compliance condition for net advances to 55% of net asset value. Alpine’s obligations to JPMorgan under the Alpine Credit Facility are secured by a first priority security interest in substantially all of the assets of Alpine, including its portfolio of loans. The obligations of Alpine under the Alpine Credit Facility are non-recourse to the Company.

The Alpine Credit Facility provides for borrowings in an aggregate principal amount up to $300,000,000 on a committed basis. Borrowings under the Alpine Credit Facility are subject to compliance with a NAV coverage ratio with respect to the current value of Alpine’s portfolio and various eligibility criteria must be satisfied with respect to the initial acquisition of each loan in Alpine’s portfolio. Any amounts borrowed under the Alpine Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on March 29, 2022.

Pricing under the Alpine Credit Facility for each one month calculation period is based on LIBOR for an interest period of one month, plus a spread of 2.85% per annum. If LIBOR is unavailable, pricing will be determined at the prime rate offered by JPMorgan or the federal funds effective rate, plus a spread of 2.85% per annum. Interest is payable monthly in arrears. Alpine is also required to pay a commitment fee of 1.00% on the average daily unused amount of the financing commitments to the extent that $300,000,000 has not been borrowed.

Borrowings of Alpine are considered borrowings of the Company for purposes of complying with the asset coverage requirements under the 1940 Act, applicable to BDCs.

Pursuant to a Sale and Contribution Agreement entered into between the Company and Alpine (the “Sale Agreement”) in connection with the Alpine Credit Facility, the Company may sell loans or contribute cash or loans to Alpine from time to time and will retain a residual interest in any assets contributed through its ownership of Alpine or will receive fair market value for any assets sold to Alpine. In certain circumstances the Company may be required to repurchase certain loans sold to Alpine. In addition to the acquisition of loans pursuant to the Sale Agreement, Alpine may purchase additional assets from various sources. Alpine has appointed SIC Advisors to manage its portfolio of assets pursuant to the terms of a Portfolio Management Agreement between SIC Advisors and Alpine.

As of ~~June~~September 30, 2019 and December 31, 2018, the carrying amount of the Company’s borrowings under the Alpine Credit Facility approximated the fair value of the Company’s debt obligation. The fair value of the Company’s debt obligation is determined

in accordance with ASC 820, which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Company’s borrowings under the Alpine Credit Facility is estimated based upon market interest rates of the Company’s borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. As of ~~June~~September 30, 2019 and December 31, 2018, the Alpine Credit Facility would be deemed to be Level 3, as defined in Note 4.

As of ~~June~~September 30, 2019 and December 31, 2018, the financing costs of ~~$1,560,052~~$1,315,495 and $2,041,192 related to the Alpine Credit Facility has been capitalized and is being amortized over the respective terms, respectively. The following table shows additional information about the interest and financing costs related to the Alpine Credit Facility for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Interest expense related to the Alpine Credit Facility	$	3,376,451		$	3,051,246		$	6,739,338		$	5,889,714		$	3,277,956		$	3,181,772.8		$	10,017,295		$	9,071,488
Financing expenses related to the Alpine Credit Facility	241,899			241,899			481,140			481,140			244,557			244,557			725,697			725,697
Total Interest and financing expenses related to the Alpine Credit Facility	$	3,618,350		$	3,293,145		$	7,220,478		$	6,370,854		$	3,522,513		$	3,426,330		$	10,742,992		$	9,797,185

Weighted average outstanding debt balance of the Alpine Credit Facility	$	240,000,000		$	240,000,000		$	240,000,000		$	241,364,641		$	240,000,000		$	240,000,000		$	240,000,000		$	240,904,762
Weighted average interest rate of the Alpine Credit Facility (annualized)	5.6		%	5.0		%	5.6		%	4.9		%	5.3		%	5.2		%	5.5		%	5.0		%

Note 7. Agreements

Investment Advisory Agreement

On April 5, 2012, the Company entered into an investment advisory agreement (the “Investment Advisory Agreement”) with SIC Advisors to manage the Company’s investment activities. The Investment Advisory Agreement became effective as of April 17, 2012, the date that the Company met its minimum offering requirement. Pursuant to the 1940 Act, the initial term of the Investment Advisory Agreement was for two years from its effective date, with one-year renewals subject to approval by the Company’s board of directors, a majority of whom must be independent directors. On April 4, 2019, the Company’s board of directors approved the renewal of the Investment Advisory Agreement for an additional one-year term at an in-person meeting. Pursuant to the Investment Advisory Agreement, SIC Advisors implements the Company’s business strategy on a day-to-day basis and performs certain services for the Company, subject to oversight by the Company’s board of directors. SIC Advisors is responsible for, among other duties, determining investment criteria, sourcing, analyzing and executing investment transactions, asset sales, financings and performing asset management duties. Under the Investment Advisory Agreement, the Company has agreed to pay SIC Advisors a management fee for investment advisory and management services consisting of a base management fee and an incentive fee.

The base management fee is calculated at an annual rate of 1.75% of the Company’s gross assets payable quarterly in arrears. For purposes of calculating the base management fee, the term “gross assets” includes any assets acquired with the proceeds of leverage. "Gross assets" also includes any cash collateral posted with respect to the TRS, adjusted for realized and unrealized appreciation. The base management fee is calculated based on the gross assets at the end of each completed calendar quarter. Base management fees for any partial quarter are appropriately pro-rated. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, the Company recorded an expense for base management fees of ~~$4,335,538~~$4,180,333 and ~~$8,777,628,~~$12,957,961, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, the Company recorded an expense for base management fees of ~~$4,834,495~~$4,681,915 and ~~9,838,311,~~14,520,226, respectively. As of ~~June~~September 30, 2019 and December 31, 2018, the Company recorded a base management fee payable of ~~$4,335,538~~$4,180,333 and $4,491,234, respectively.

The incentive fee consists of the following two parts:

An incentive fee on net investment income (“Subordinated Incentive Fee on Income”) is calculated and payable quarterly in arrears and is based upon pre-incentive fee net investment income for the immediately preceding quarter. No Subordinated Incentive Fee on Income is payable in any calendar quarter in which pre-incentive fee net investment income does not exceed a quarterly return to stockholders of 1.75% per quarter on the Company’s net assets at the end of the immediately preceding fiscal quarter (the “Preferred Quarterly Return”). All pre-incentive fee net investment income, if any, that exceeds the Preferred Quarterly Return, but is less than or equal to 2.1875% of net assets at the end of the immediately preceding fiscal quarter in any quarter, will be payable to SIC Advisors. The Company refers to this portion of its Subordinated Incentive Fee on Income as the “Catch Up”. It is intended to provide an incentive fee of 20% on pre-incentive fee net investment income when pre-incentive fee net investment income exceeds 2.1875% of net assets at the end of the immediately preceding quarter in any quarter. For any quarter in which the Company’s pre-incentive

fee net investment income exceeds 2.1875% of net assets at the end of the immediately preceding quarter, the Subordinated Incentive Fee on Income shall equal 20% of the amount of pre-incentive fee net investment income, because the Preferred Quarterly Return and Catch Up will have been achieved. There is no incentive fee on net investment income earned on the TRS.

For the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, the Company recorded no$176,061 and $446,703 of incentive fees. As of ~~June~~September 30, 2019 and December 31, 2018, the Company recorded no incentive fees payable.

A capital gains incentive fee will be earned on realized investments and shall be payable in arrears as of the end of each calendar year during which the Investment Advisory Agreement is in effect. If the Investment Advisory Agreement is terminated, the fee will also become payable as of the effective date of such termination. The fee equals 20% of the realized capital gains, less the aggregate amount of any previously paid capital gains incentive fees. The incentive fee on capital gains is equal to realized capital gains on a cumulative basis from inception, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis.

Under GAAP, the Company calculates capital gains incentive fees as if the Company had realized all assets at their fair values and liabilities at their settlement amounts as of the reporting date. GAAP requires that the capital gains incentive fee accrual assume the cumulative aggregate unrealized capital appreciation is realized, even though such unrealized capital appreciation is not payable under the Investment Advisory Agreement. Accordingly, the Company accrues a provisional capital gains incentive fee taking into account any unrealized gains or losses. There can be no assurance that such unrealized capital appreciation will be realized in the future and that the provisional capital gains incentive fee will become payable.

For the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, the Company recorded no capital gains incentive fee. As of ~~June~~September 30, 2019 and December 31, 2018, the Company recorded no capital gains incentive fee payable.

In the event that other organizational and offering expenses exceed 5.25% of the gross proceeds from the sale of shares of the Company’s common stock pursuant to its public offering or one or more private offerings at the time of the completion of the offering or other organizational and offering expenses, together with selling commissions, dealer manager fees and any discounts paid to members of the Financial Industry Regulatory Authority, exceed 15% of the gross proceeds from the sale of shares of the Company’s common stock pursuant to its public offering or one or more private offerings at the time of the completion of the offering, then SIC Advisors shall be required to pay without reimbursement from the Company, or, if already paid by the Company, reimburse the Company, for amounts exceeding such 5.25% and 15% limit, as appropriate.

Administration Agreement

On April 5, 2012, the Company entered into an administration agreement (the “Administration Agreement”) with Medley Capital LLC, pursuant to which Medley Capital LLC furnishes the Company with administrative services necessary to conduct its day-to-day operations. On February 28, 2013, Medley Capital LLC entered into a Sub-Administration Agreement with State Street Bank Global Fund Accounting and Custody to perform certain financial, accounting, administrative and other services on behalf of the Company. On April 4, 2019, the Company’s board of directors approved the renewal of the Administration Agreement for an additional one-year term at an in-person meeting. Medley Capital LLC is reimbursed for administrative expenses it incurs on the Company’s behalf in performing its obligations. Such costs are reasonably allocated to the Company on the basis of assets, revenues, time records or other reasonable methods. The Company does not reimburse Medley Capital LLC for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Medley Capital LLC. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, the Company recorded administrator expenses of ~~$536,352~~$998,134 and ~~$1,158,423,~~$2,156,557, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, the Company recorded administrator expenses of ~~$758,178~~$527,752 and ~~$1,481,713,~~$2,009,465, respectively. As of ~~June~~September 30, 2019 and December 31, 2018, the Company had administrator fees payable of ~~$536,352~~$998,134 and $689,711, respectively.

Expense Support and Reimbursement Agreement

From June 29, 2012 through December 31, 2016, the Company was party to an Expense Support and Reimbursement Agreement with SIC Advisors (the “Expense Support Agreement”). During the term of the Expense Support Agreement, SIC Advisors reimbursed the Company for operating expenses in an amount equal to the difference between the Company’s distributions paid to its stockholders in each month, less the sum of the Company’s net investment income, net realized capital gains and dividends paid to the Company from its portfolio companies, not included in net income and net realized capital gains, during such period (“Expense Support Reimbursement”). To the extent that no dividends or other distributions were paid to the Company’s stockholders in any given month, then the Expense Support Reimbursement for such month was equal to such amount necessary in order for available operating funds for the month to equal zero. From April 1, 2016 until the expiration of the Expense Support Agreement on December 31, 2016, SIC Advisors made expense support payments on a discretionary basis by making an election on the last day of each month to fund an expense support payment in an amount equal to the difference between the Company’s distributions paid to stockholders during such

month less the sum of the Company’s net investment income, net realized capital gains and dividends paid to the Company from its portfolio companies, not included in net income and net realized capital gains during such period.

The purpose of the Expense Support Agreement was to cover distributions to stockholders so as to ensure that the distributions did not constitute a return of capital for GAAP purposes and to reduce operating expenses until the Company had raised sufficient capital to be able to absorb such expenses. The Expense Support Agreement expired on December 31, 2016.

Pursuant to the Expense Support Agreement, the Company will reimburse SIC Advisors for expense support payments it previously made following any calendar quarter for which the Company received net investment income, net realized capital gains and dividends from its portfolio companies (not included in net income and net realized capital gains) in excess of the distributions paid to the Company’s stockholders during such calendar quarter (the “Excess Operating Funds”). Any such reimbursement will be made within three years of the date that the expense support payment obligation was incurred by SIC Advisors, subject to the conditions described below. The amount of the reimbursement during any calendar quarter will equal the lesser of (i) the Excess Operating Funds received during the quarter and (ii) the aggregate amount of all expense payments made by SIC Advisors that have not yet been reimbursed. In addition, the Company will only make reimbursement payments to the extent its current annualized “operating expense ratio” (as described in footnote 1 to the table below) is equal to or less than its operating expense ratio for the quarter during which the corresponding expense obligation was incurred and to the extent the annualized rate of its regular cash dividends to the Company’s stockholders for the month is equal to or greater than the annualized rate of the Company’s regular cash distributions to stockholders for the month during which the corresponding expense payment was incurred.

Repayments of amounts paid by SIC Advisors to the Company under the Expense Support Agreement will be accrued as they become probable and estimable. The Company refers to Expense Support Reimbursements that are eligible for reimbursement to SIC Advisors by virtue of having satisfied the conditions described above as a “Crystalized Reimbursement.” As of ~~June~~September 30, 2019 and December 31, 2018, the Company did not record any Crystalized Reimbursements. As of ~~June~~September 30, 2019 and December 31, 2018, the total remaining amount eligible for reimbursement of the Company to SIC Advisors, net of Crystalized Reimbursements, was ~~$5,389,627~~$0 and $16,228,913, respectively.

The following table provides information regarding liabilities incurred by SIC Advisors pursuant to the Expense Support Agreement as well as other information relating to the Company’s ability to reimburse SIC Advisors for such payments:


Quarter Ended	Amount of Expense Payment Obligation	Amount Repaid to SIC Advisors	Operating Expense Ratio⁽¹⁾		Annualized Distribution Rate⁽²⁾		Eligible to be Repaid Through	Amount of Expense Payment Obligation	Amount Repaid to SIC Advisors	Operating Expense Ratio⁽¹⁾		Annualized Distribution Rate⁽²⁾		Eligible to be Repaid Through
March 31, 2015⁽³⁾	1,993,518	—	0.43	%	8.00	%	March 31, 2018	1,993,518	—	0.43	%	8.00	%	March 31, 2018
June 30, 2015⁽³⁾	2,148,462	—	0.31	%	8.00	%	June 30, 2018	2,148,462	—	0.31	%	8.00	%	June 30, 2018
September 30, 2015⁽³⁾	627,752	—	0.32	%	8.25	%	September 30, 2018	627,752	—	0.32	%	8.25	%	September 30, 2018
December 31, 2015⁽³⁾	3,974,895	—	0.40	%	8.65	%	December 31, 2018	3,974,895	—	0.40	%	8.65	%	December 31, 2018
March 31, 2016⁽³⁾	5,204,896	—	0.37	%	8.89	%	March 31, 2019	5,204,896	—	0.37	%	8.89	%	March 31, 2019
June 30, 2016⁽³⁾	5,634,390	—	0.29	%	8.89	%	June 30, 2019	5,634,390	—	0.29	%	8.89	%	June 30, 2019
September 30, 2016(3)	5,389,627	—	0.45	%	8.84	%	September 30, 2019	5,389,627	—	0.45	%	8.84	%	September 30, 2019


(1)	“Operating Expense Ratio” is as of the date the expense support payment obligation was incurred by the Company’s Advisor and includes all expenses borne by the Company, except for organizational and offering expenses, base management and incentive fees owed to SIC Advisors, and interest expense, as a percentage of net assets.


(2)	“Annualized Distribution Rate” equals the annualized rate of distributions paid to stockholders based on the amount of the regular cash distribution paid immediately prior to the date the expense support payment obligation was incurred by SIC Advisors. “Annualized Distribution Rate” does not include special cash or stock distributions paid to stockholders.


(3)	The unreimbursed part of the expense payment obligation has expired.

Note 8. Related Party Transactions

On October 19, 2011, SIC Advisors entered into a subscription agreement to purchase 110.80 shares of common stock for cash consideration of $1,000. The consideration represented $9.025 per share.

On April 17, 2012, SIC Advisors purchased 1,108,033.24 shares of our common stock for aggregate gross proceeds of $10,000,000. The consideration represented $9.025 per share.

principals of other investment managers affiliated with SIC Advisors that do, and may in the future, manage investment funds, accounts or other investment vehicles with investment objectives similar to ours.

We have entered into an Administration Agreement with Medley Capital LLC, pursuant to which Medley Capital LLC furnishes us with administrative services necessary to conduct our day-to-day operations. Medley Capital LLC is reimbursed for administrative expenses it incurs on our behalf. We do not reimburse Medley Capital LLC for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Medley Capital LLC. Medley Capital LLC is an affiliate of SIC Advisors.

The dealer manager agreement that we entered into with SC Distributors, LLC in connection with our offering was terminated pursuant to its terms in connection with the termination of our offering, effective as of July 31, 2018.

On ~~August 9, 2018,~~July 29, 2019, the Company entered into the Amended MCC Merger Agreement, by and between MCC and the Company, pursuant to which MCC ~~would,~~will, on the terms and subject

to the conditions set forth in the Amended MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC ~~Merger Agreement. Under~~Merger. In the MCC Merger, each share of MCC’s common stock, ~~issued and outstanding immediately prior to the MCC Merger effective time,~~ other than shares of ~~MCC~~MCC’s common stock held by MCC, the Company or their respective wholly owned subsidiaries, ~~would~~will be ~~converted into~~exchanged for the right to receive ~~0.8050~~(i) 0.68 shares of the Company’s common ~~stock.~~ stock if the Plaintiff Attorney Fees are less than or equal to $10,000,000, (ii) 0.66 shares of the Company’s common stock if the Plaintiff Attorney Fees are equal to or greater than $15,000,000, and (iii) between 0.68 and 0.66 per share of the Company’s common stock if the Plaintiff Attorney Fees are greater than $10,000,000 but less than $15,000,000, calculated on a descending basis, based on straight line interpolation between $10,000,000 and $15,000,000; provided that cash will be paid in lieu of fractional shares of the Company’s common stock issuable in the MCC Merger.

In addition, on ~~August 9, 2018,~~July 29, 2019, the Company entered into the Amended MDLY Merger Agreement, by and among MDLY, the Company, and Merger Sub, pursuant to which MDLY ~~would~~will, on the terms and subject to the conditions set forth in the Amended MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY ~~Merger Agreement.~~Merger. In the MDLY Merger, each share of MDLY Class A ~~common stock,~~Common Stock, issued and outstanding immediately prior to the MDLY Merger effective time, other than the Excluded MDLY Shares and the Dissenting Shares (as defined in the Amended MDLY Merger Agreement) ~~and~~, held, immediately prior to the MDLY Merger effective time, by any person other than a Medley LLC Unitholder, will be exchanged for (i) 0.2668 shares of ~~MDLY Class A~~the Company’s common ~~stock held by MDLY, the Company or their respective wholly owned subsidiaries, would~~stock; provided that cash will be ~~converted into the right to receive (i) 0.3836~~paid in lieu of fractional shares of the Company’s common stock; plus (ii) cash in an amount equal to ~~$3.44~~$2.96 per share. In addition, ~~MDLY’s stockholders would have~~in the ~~right~~MDLY Merger, each share of MDLY Class A Common Stock issued and outstanding immediately prior to ~~receive certain dividends and/or~~the MDLY Merger effective time, other ~~payments. The Mergers would occur simultaneously~~than the Excluded MDLY Shares and asthe Dissenting Shares, held, immediately prior to the MDLY Merger effective time, by the Medley LLC Unitholders will be exchanged for (i) 0.2072 shares of the Company’s common stock; provided that cash will be paid in lieu of fractional shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.66 per share.

As a result of the foregoing, the investment management function relating to the operation of the Combined Company aswill be internalized. Pursuant to the ~~surviving company in~~terms of the Amended MCC Merger Agreement, the consummation of the MCC Merger is conditioned upon the satisfaction or waiver of each of the conditions to closing under the Amended MDLY Merger Agreement and the consummation of the MDLY Merger. However, pursuant to the terms of the Amended MDLY Merger Agreement, the consummation of the MDLY Merger is not contingent upon the consummation of the MCC Merger. If the Mergers ~~would~~are, or only the MDLY Merger is consummated, the Company’s common stock will be ~~internalized.~~listed on the New York Stock Exchange under the symbol "SRA, with such listing expected to be effective as of the closing date of the Mergers or only the MDLY Merger, as applicable. If the MCC Merger is also consummated, the Company’s common stock will be listed on the Tel Aviv Stock Exchange, with such listing expected to be effective as of the closing date of the Mergers.

Set forth below is a description of the Decision (as defined below), which should be read in the context of the impact that the Decision and corresponding Settlement ~~Term Sheet may have on the Company with respect to any potential amendment to the Merger Agreements.~~(as defined below).

On February 11, 2019, a ~~putative~~purported stockholder class action ~~related to the MCC Merger~~ was commenced in the Delaware Court of Chancery ~~of the State of Delaware~~ by ~~FrontFour. The action, as consolidated, is~~FrontFour Capital Group LLC and FrontFour Master Fund, Ltd. (together, “FrontFour”), captioned In re Medley Capital Corporation Stockholder Litigation, C.A. No. 2019-0100-KSJM, against defendants Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, the Company, MCC, MCC Advisors LLC, Medley Group LLC, and Medley ~~LLC (the “Class Action”).~~LLC. The complaint, as amended on February 12, 2019, alleged that ~~MCC’s directors (Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, and Arthur S. Ainsberg)~~the individuals named as defendants breached their fiduciary duties to MCC’s stockholders in connection with the MCC Merger, and that MDLY, the Company, MCC Advisors LLC, Medley Group LLC, and Medley LLC aided and abetted those alleged breaches of fiduciary duties. OnThe complaint sought to enjoin the vote of MCC stockholders on the proposed merger and enjoin enforcement of certain provisions of the MCC Merger Agreement. The Court held a trial on the plaintiffs’ claims on March 6-7, 2019 and issued a Memorandum Opinion (the “Decision”) on March 11, ~~2019, following a two-day trial, the~~2019. The

Delaware Court ~~issued the Decision denying~~of Chancery denied FrontFour’s requests to (i) permanently enjoin the MCC Merger and (ii) require MCC to conduct a “shopping process” for MCC on terms proposed by FrontFour in its complaint. The Court held that MCC’s directors breached their fiduciary duties in entering into the MCC Merger, but rejected FrontFour’s claim that the Company aided and abetted those breaches of fiduciary duties. The Court ordered the defendants to issue corrective disclosures consistent with the Decision, and enjoined a vote of MCC’s stockholders on the MCC Merger until such disclosures have been made and stockholders have had the opportunity to assimilate this information. On March 20, 2019, another purported stockholder class action was commenced by Stephen Altman against Brook Taube, Seth Taube, Jeff Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, Mark Lerdal, and John E. Mack in the Delaware Court of Chancery, captioned Altman v. Taube, Case No. 2019-0219 (the “Altman Action”). The complaint alleged that the defendants breached their fiduciary duties to stockholders of MCC in connection with the vote of MCC stockholders on the proposed mergers. On April 8, 2019, the Delaware Court of Chancery granted a stipulation consolidating the MCC Stockholder Action and the Altman Action, designating the amended complaint in the MCC Stockholder Action as the operative complaint, and designating the plaintiffs in the MCC Stockholder Action and their counsel the lead plaintiffs and lead plaintiffs’ counsel, respectively.

On April 15, 2019, certain parties ~~in the Class Action~~ reached agreement on the principal terms of a settlement of the MCC Stockholder Action, which ~~are~~were contained in a term sheet, dated April 15, 2019 (the “Settlement Term Sheet”). On July 29, 2019, MDLY entered into a Stipulation of Settlement (and, as amended, on August 8, 2019, the ~~Settlement Term Sheet,~~“Stipulation”) by and among ~~the~~MCC, Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, MCC Advisors LLC, Medley ~~Parties,~~LLC, and Medley Group LLC (the “Medley Parties”), on the one hand, and FrontFour, on behalf of itself and a class of similarly situated stockholders of MCC, on the other ~~hand.~~ hand, in connection with the MCC Stockholder Action.

The ~~Settlement Term Sheet is intended to form~~Stipulation provides for the ~~basis~~settlement of ~~a definitive stipulation of settlement~~all claims brought against the Medley Parties in the ~~Class~~MCC Stockholder Action. ~~The Settlement Term Sheet provides that~~Under the Stipulation, MCC ~~will~~agreed to seek to obtain the agreement and/or consent of the Company to effect certain amendments to (i) the MCC Merger Agreement and (ii) the MDLY Merger Agreement. If the foregoing amendments are entered into they will, among other matters (as described in further detail in the Settlement Term Sheet): (a) extend the Outside Date (as defined in the Merger Agreements) to October 31, 2019; (b) permit the MCC Special Committee to undertake a sixty-day “go shop” process to solicit superior transactions toAgreement (together with the MCC Merger ~~and (c)~~Agreement, the “Merger Agreements”), which have been reflected in the revised Merger Agreements annexed to the Stipulation. The Stipulation also provides for, if the MCC Merger is consummated, ~~create~~the creation of a settlement fund, consisting of $17 million in cash and $30 million of the Company’s stock, with the number of shares of the Company’s stock to be calculated using the pro forma NAV reported in the future proxy supplement describing the amendments to the MCC Merger Agreement, which will be distributed to eligible members of the Settlement Class (as defined in the ~~Settlement Term Sheet)~~Stipulation). ~~In connection with~~Under the ~~Settlement Term Sheet,~~Stipulation, MDLY ~~has executed an acknowledgement and agreement~~also consented to ~~take~~ certain actions, including consenting to certain amendments to the Merger Agreements That have been reflected in ~~furtherance of~~ the ~~transactions contemplated thereby.~~

~~Under the Settlement Term Sheet, the parties have agreed to cooperate to reduce the agreements reflected therein to the Settlement~~The Stipulation ~~and to obtain approval of Court of Chancery of the State of Delaware as soon as reasonably practicable thereafter. The Settlement Stipulation will provide~~also provides for mutual releases between and among FrontFour and the Settlement Class, on the one hand, and the Medley

Parties, on the other hand, of all claims that were or could have been asserted in the ~~Class~~MCC Stockholder Action. The Medley Parties will also release all claims arising out of or relating to the prosecution and settlement of the ~~Class~~MCC Stockholder Action and all claims that were or could have been asserted (other than claims against ~~NexPoint Advisors, L.P. and its affiliates)~~the Highland Parties, as defined in the Stipulation) in the litigation pending in the United States District Court for the Southern District of New York captioned Medley Capital Corporation v. FrontFour Capital Group LLC, et al., No. 1:19-cv-02055-LTS (S.D.N.Y.) (the “Federal Action”), and FrontFour and the Settlement Class will release all claims arising out of or relating to the prosecution and settlement of the Federal Action.

We have entered into a license agreement with SIC Advisors under which SIC Advisors has agreed to grant us a non-exclusive, royalty-free license to use the name “Sierra” for specified purposes in our business. Under this agreement, we will have a right to use the “Sierra” name, subject to certain conditions, for so long as SIC Advisors or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we will have no legal right to the “Sierra” name.

Opportunities for co-investments may arise when SIC Advisors or an affiliated adviser becomes aware of investment opportunities that may be appropriate for the Company and other clients or affiliated funds. The Company obtained an exemptive order from the SEC on November 25, 2013 (the “Prior Exemptive Order”). On March 29, 2017, the Company, SIC Advisors and certain other affiliated funds and investment advisers received an exemptive order (the "Exemptive Order") that supersedes the Prior Exemptive Order and allows affiliated registered investment companies to participate in co-investment transactions with us that would otherwise have been prohibited under Section 17(d) and 57(a)(4) and Rule 17d-1. On October 4, 2017, the Company, SIC Advisors and certain of our affiliates received an exemptive order that supersedes the Exemptive Order (the “Current Exemptive Order”) and allows, in addition to the entities already covered by the Exemptive Order, Medley LLC and its subsidiary, Medley Capital LLC, to the extent they hold financial assets in a principal capacity, and any direct or indirect, wholly- or majority-owned subsidiary of Medley LLC that is formed in the future, to participate in co-investment transactions with us that would otherwise be prohibited by either or both of Sections 17(d) and 57(a)(4) of the 1940 Act. If the Mergers are successfully consummated, the Company and certain of its affiliates will not be able to rely on the Current Exemptive Order. In this regard, on November 19, 2018, the Company and certain of its affiliates submitted an exemptive application to the SEC for an exemptive order that would supersede the Current Exemptive Order (the “Superseding Exemptive Order”) and would permit the Company to participate in negotiated co-investment transactions with certain affiliates that would otherwise be prohibited by either or both of Sections 17(d) and 57(a)(4) of the 1940 Act. There can be no assurance if and when the Company will receive the Superseding Exemptive Order. The terms of the Superseding Exemptive Order, if received, would be substantially similar to the Current Exemptive Order. Co-investment under the Superseding Exemptive Order is subject to certain conditions therein, including the condition that, in the case of each co-investment transaction, the board of directors determines that it would be in the Company’s best interest to participate in the transaction. The Current Exemptive Order will remain in effect unless and until the Mergers are completed and the Superseding Exemptive Order is granted by the SEC. However, neither we nor the affiliated funds are obligated to invest or co-invest when investment opportunities are referred to us or them. Please see the footnotes to the consolidated schedule of investments as of ~~June~~September 30, 2019 and December 31, 2018 for disclosures regarding securities also held by affiliated funds.

Note 9. Directors Fees

Effective January 1, 2017, each independent director will be compensated as follows: (i) an annual retainer of $85,000; (ii) a fee of $3,000 for each in-person board meeting in which they participate; (iii) a fee of $1,000 for each telephonic board meeting in which they participate; (iv) a fee of $2,500 for each in-person audit committee meeting in which they participate; (v) a fee $1,000 for each telephonic audit committee meeting in which they participate; (vi) a fee of $2,000 for each in-person nominating and corporate governance committee meeting in which they participate; and (vii) a fee of $1,000 for each telephonic nominating and corporate governance committee meeting in which they participate. In addition, each independent director will be reimbursed for reasonable and documented out-of-pocket expenses incurred in connection with attending each board or committee meeting. In addition, the Chair of the audit committee receives an annual retainer of $15,000, while the Chair of any other committee receives an annual retainer of $5,000. The Lead Independent Director receives an annual retainer of $10,000.

Prior to January 1, 2017, each independent director received an annual retainer fee of $50,000, and further received a fee of $4,000 ($2,000 for telephonic attendance) for each regularly scheduled board meeting attended, a fee of $2,000 for each special board

meeting and all committee meetings attended, as well as reimbursement of reasonable and documented out-of-pocket expenses incurred in connection with attending each board or committee meeting.

In addition, the Board established a special committee, which is comprised solely of its independent directors (the “Sierra Special Committee”), for the purpose of assessing the merits of various proposed strategic transactions. On January 26, 2018, as compensation for serving on the Special Committee, the Board approved (i) a one-time retainer of $25,000, (ii) a monthly fee of $15,000 payable to the Chairman of the Sierra Special Committee, (iii) a monthly fee of $10,000 payable to each of the other members of the Sierra Special Committee, and (iv) reimbursement for all out-of-pocket expenses incurred by the members of the Sierra Special Committee in connection with his or her services as a member of the Special Committee consistent with the Company’s policies for reimbursement of members of the Board. On July 2, 2018, the Board approved an increase in (i) the monthly fee payable to the Chariman of the Special Committee from $15,000 to $20,000 and (ii) the monthly fee payable to each of the other members of the Sierra Special Committee from $10,000 to $15,000.

For the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, the Company recorded directors' fees expenses in General and Administrative expenses on the consolidated statement of operations of ~~$243,750~~$246,750 and ~~$537,000~~$783,750 and ~~$169,169~~$258,750 and ~~$460,419,~~$719,169, respectively.

Note 10. Earnings Per Share

In accordance with the provisions of ASC Topic 260 - Earnings per Share, basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of shares outstanding during the period. Other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis.

The following table sets forth the computation of the weighted average basic and diluted net increase in net assets per share from operations for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Net increase/(decrease) in net assets from operations	$	(17,054,078	)	$	(5,327,277	)	$	(2,140,706	)	$	(6,340,350	)	$	(18,812,388	)	$	(5,706,104	)	$	(20,953,094	)	$	(12,046,454	)
Weighted average common shares outstanding	100,135,004			97,385,971			99,649,414			97,190,689			101,035,420			97,047,494			100,116,493			97,142,433
Weighted average basic and diluted earnings per common share	$	(0.17	)	$	(0.05	)	$	(0.02	)	$	(0.07	)	$	(0.19	)	$	(0.06	)	$	(0.21	)	$	(0.12	)

Note 11. Commitments

As of ~~June~~September 30, 2019 and December 31, 2018, the Company had ~~$30,638,770~~$26,758,742 and $49,555,687, respectively, of unfunded commitments under loan and financing agreements. These amounts are primarily composed of commitments for senior secured term loans, revolvers, and additional capital contributions for the Sierra JV. The unrealized gain or loss associated with unfunded commitments is recorded in the financial statements and reflected as an adjustment to the valuation of the related security in the Consolidated Schedule of Investments. The par amount of the unfunded commitments are not recognized by the Company until the commitment is funded.


	As of				As of
	June 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
1888 Industrial Services, LLC	$	314,448	$	566,007	$	—	$	566,007
AAAHI Acquisition Corporation	1,586,982		1,597,633		1,586,982		1,597,633
Access Media Holdings, LLC	88,200		88,200		88,200		88,200
Alpine SG, LLC	1,000,000		1,000,000		1,000,000		1,000,000
Barry's Bootcamp Holdings, LLC	—		3,668,571		—		3,668,571
Black Angus Steakhouses, LLC	3,236,607		4,352,679		2,232,143		4,352,679
Central States Dermatology Services, LLC	—		314,351		—		314,351
Charming Charlie LLC	2,252,279		2,252,279		1,217,448		2,252,279
DataOnline Corp.	1,180,000		1,180,000		1,180,000		1,180,000
Dynamic Energy Services International LLC	1,062,895		1,753,323		1,713,104		1,753,323
Isola USA Corp.	1,138,277		1,138,277		1,138,277		1,138,277
Kemmerer Operations, Inc.	908,475		—		908,475		—
Manna Pro Products, LLC	—		325,000		—		325,000
Offen, Inc.	1,061,947		—		1,061,947		—
Path Medical, LLC	393,600		393,600		—		393,600
PT Network, LLC	—		4,437,433		—		4,437,433
Redwood Services Group, LLC	1,437,500		1,725,000		1,437,500		1,725,000
RMS Holding Company, LLC	813,102		264,454		—		264,454
SavATree, LLC	—		158,889		—		158,889
SFP Holding, Inc.	2,150,000		2,863,985		2,150,000		2,863,985
Sierra Senior Loan Strategy JV I LLC	4,200,000		4,200,000		4,200,000		4,200,000
Simplified Logistics, LLC	5,000,000		5,000,000		5,000,000		5,000,000
Smile Doctors LLC	2,343,400		4,305,655		1,844,666		4,305,655
Elite Comfort Solutions LLC	—		2,499,293		—		2,499,293
SRS Software, LLC	—		5,000,000		—		5,000,000
TwentyEighty, Inc.	471,058		471,058		—		471,058
Total Commitments	$	30,638,770	$	49,555,687	$	26,758,742	$	49,555,687

Note 12. Fee Income

Fee income consists of origination fees, amendment fees, prepayment fees, administrative agent fees and other miscellaneous fees. Origination fees, prepayment fees, amendment fees, and other similar fees are non-recurring fee sources. Such fees are received on a transaction by transaction basis and do not constitute a regular stream of income. The following table shows the Company’s fee income for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018		2019		2018		2019		2018
Origination fees	$	3,401	$	483,103	$	48,090	$	1,078,939	$	4,703	$	1,199,833	$	52,793	$	2,278,772
Prepayment fees	2,170,948		329,104		2,512,536		329,104		192,215		—		2,704,751		329,104
Amendment fees	190,821		98,380		309,855		109,389		110,580		122,414		420,435		231,803
Administrative agent fees	29,391		36,879		58,590		63,606		24,337		54,529		82,927		118,135
Other fees	815		—		815		11,103		7,786		12,018		8,601		23,121
Fee income	$	2,395,376	$	947,466	$	2,929,886	$	1,592,141	$	339,621	$	1,388,794	$	3,269,507	$	2,980,935

Note 13. Distributions and Share Repurchase Program Distributions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid out as a distribution is determined by the Company’s board of directors.

The Company has adopted an “opt in” distribution reinvestment plan (“DRIP”) pursuant to which the Company’s common stockholders may elect to have the full amount of any cash distributions reinvested in additional shares of the Company’s common stock. On June 30, 2017, the Board approved an amendment to the DRIP, pursuant to which the number of newly-issued shares of the Company’s common stock to be issued to a participating stockholder shall be determined by dividing the total dollar amount of the distribution payable to such stockholder by a price equal to 94.5%, rather than 90%, of the Company’s then current offering price.

The Company amended the DRIP as a result of the Company’s revised fee structure, which went into effect on June 16, 2017. Under the Company’s revised fee structure the upfront selling commission was reduced from 7.00% of gross proceeds to up to 3.00% of gross proceeds and the dealer manager fee was reduced from 2.75% of gross proceeds to up to 2.50% of gross proceeds. If the Company declares a cash dividend or other distribution, each stockholder that has “opted in” to the DRIP will have their distributions automatically reinvested in additional shares of the Company’s common stock rather than receiving cash distributions. Stockholders who receive distributions in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash distributions. For the ~~six~~nine months ended ~~June~~September 30, 2019, the Company distributed a total of ~~$31,787,931,~~$47,902,108, of which ~~$19,502,948~~$29,596,806 was in cash and ~~$12,284,983~~$18,305,302 was in the form of common stock associated with the DRIP. For the ~~six~~nine months ended ~~June~~September 30, 2018, the Company distributed a total of ~~$31,076,562,~~$46,592,535, of which ~~$17,902,191,~~$27,043,560, was in cash and ~~$13,174,371~~$19,548,975 was in the form of common stock associated with the DRIP.

The following table reflects the cash distributions per share that the Company has declared or paid to its stockholders during 2019 and 2018. Stockholders of record as of each respective record date were entitled to receive the distribution.



Record Date	Payment Date	Amount per share
January 15 and 31, 2018	January 31, 2018	0.02667
February 15 and 28, 2018	February 28, 2018	0.02667
March 15 and 30, 2018	March 30, 2018	0.02667
April 13 and 30, 2018	April 30, 2018	0.02667
May 15 and 31, 2018	May 31, 2018	0.02667
June 15 and 29, 2018	June 29, 2018	0.02667
July 13 and 31, 2018	July 31, 2018	0.02667
August 15 and 31, 2018	August 31, 2018	0.02667
September 14 and 28, 2018	September 28, 2018	0.02667
October 15 and 31, 2018	October 31, 2018	0.02667
November 15 and 30, 2018	November 30, 2018	0.02667
December 14 and 31, 2018	December 31, 2018	0.02667
January 25, 2019	January 31, 2019	0.05334
February 11, 2019	February 28, 2019	0.05334
March 11, 2019	March 29, 2019	0.05334
April 29, 2019	April 30, 2019	0.05334
May 30, 2019	May 31, 2019	0.05334
June 27, 2019	June 28, 2019	0.05334
July 30, 2019	July 31, 2019	0.05334
August 29, 2019	August 30, 2019	0.05334
September 27, 2019	September 30, 2019	0.05334

The Company’s distributions may be funded from offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Company for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses.

The Company’s previous distributions to stockholders may have been funded from temporary Expense Support Reimbursements that may be subject to repayment to SIC Advisors. The portion of these distributions derived from temporary Expense Support Reimbursements were not based on the Company's investment performance and may not continue in the future. If SIC Advisors had not agreed to make Expense Support Reimbursements, these distributions would have come from paid-in-capital. The repayments of eligible reimbursements owed to SIC Advisors will reduce the future distributions to which stockholders would otherwise be entitled. The Expense Support Agreement expired on December 31, 2016. The Company's contingent obligation to repay eligible reimbursements to SIC Advisors ~~will expire~~expired on September 30, 2019. See Note 7 for more information.

The determination of the tax attributes (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of paid-in-capital surplus which is a nontaxable distribution) of distributions is made annually as of the end of the Company’s fiscal year based upon its taxable income earned and distributions paid during the fiscal year.

Share Repurchase Program

In June 2013, the Company commenced a share repurchase program pursuant to which it conducted quarterly share repurchases of up to 2.5% of the weighted average number of outstanding shares of its common stock in the prior four calendar quarters or 10% of the weighted average number of outstanding shares in the prior 12-month period. In connection with the Mergers, the Company suspended the Share Repurchase Program. The purpose of the share repurchase program was to allow stockholders to sell their shares back to the Company at a price equal to the most recently disclosed NAV per share of the Company's common stock immediately

prior to the date of repurchase. Shares were purchased from stockholders participating in the program on a pro-rata basis. Unless the Company's board of directors determined otherwise, the number of shares repurchased during any calendar year were limited to the proceeds received in association with the sale of shares of common stock under the distribution reinvestment plan.

The following table reflects activity under the Company’s Share Repurchase Program:



Offer Date	Quantity Offered	Price per Share		Repurchase Date	Repurchase Quantity
6/4/2013	16,652	$	9.18	—	—
8/8/2013	32,627	9.13		9/27/2013	3,642
11/7/2013	60,966	9.14		12/19/2013	5,826
3/12/2014	120,816	9.18		4/25/2014	9,835
5/6/2014	199,476	9.20		6/13/2014	17,777
8/5/2014	294,068	9.25		9/12/2014	35,887
11/5/2014	411,894	9.22		12/24/2014	411,894
3/4/2015	535,571	8.97		4/24/2015	68,472
5/6/2015	620,420	8.98		6/24/2015	90,916
8/5/2015	727,654	8.96		9/29/2015	328,353
11/3/2015	853,688	8.56		12/23/2015	285,559
3/2/2016	959,436	8.16		4/29/2016	959,436
5/5/2016	1,005,447	8.04		6/30/2016	855,215
8/4/2016	1,048,412	8.11		9/28/2016	1,048,407
11/25/2016	1,077,370	8.14		12/27/2016	1,077,352
4/4/2017	871,815	8.17		5/4/2017	871,806
5/23/2017	876,277	8.10		6/23/2017	876,254
8/24/2017	870,360	8.02		9/25/2017	870,337
11/22/2017	873,974	7.89		12/22/2017	873,932
3/27/2018	895,070	7.66		5/8/2018	895,036
5/21/2018	890,089	7.49		6/29/2018	890,048

In the event of the death or disability of a stockholder, the Company will repurchase the shares held by such stockholder at a price equal to the NAV per share of our shares as disclosed in the periodic report the Company files with the SEC immediately following the date of the death or disability of such stockholder. The Company's board of directors has the right to suspend or terminate repurchases due to death or disability to the extent that it determines that it is in the Company's best interest to do so. In connection with the Mergers, the Company suspended repurchases due to death or disability. During the three and ~~six~~nine months ended ~~June~~September 30, 2019, the Company repurchased ~~no shares~~144,356 and 144,356, respectively, of certain shareholders due to death or disability. During the three and ~~six~~nine months ended ~~June~~September 30, 2018, the Company repurchased 0168,845 and ~~94,892~~263,737 shares, respectively, of certain shareholders due to death or disability.

Note 14. Financial Highlights

The following is a schedule of financial highlights of the Company for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	2019			2018			2019			2018
Per Share Data:⁽¹⁾	Per Share Data:⁽¹⁾						Per Share Data:⁽¹⁾
Net asset value at beginning of period	$	6.72		$	7.66		$	6.72		$	7.66
Net investment income	0.21			0.24			0.26			0.37
Net realized gains/(losses) on investments and total return swap	(0.15		)	(0.32		)	(0.35		)	(0.51		)
Net unrealized appreciation/(depreciation) on investments and total return swap	(0.08		)	0.01			(0.12		)	0.01
Net increase/(decrease) in net assets	$	(0.02	)	$	(0.07	)	$	(0.21	)	$	(0.13	)
Distributions from return of capital	—			—			—			—
Distributions declared from net investment income⁽²⁾	(0.32		)	(0.32		)	(0.48		)	(0.48		)
Distributions from net realized capital gains	—			—			—			—
Total distributions to shareholders	$	(0.32	)	$	(0.32	)	$	(0.48	)	$	(0.48	)
Issuance of common shares above net asset value⁽³⁾	(0.01		)	—			—			—
Net asset value at end of period	$	6.37		$	7.27		$	6.03		$	7.05
Total return based on net asset value⁽⁴⁾⁽⁵⁾	(0.21		)%	(1.20		)%	(3.11		)%	(1.73		)%
Portfolio turnover rate⁽⁵⁾	13.93		%	11.89		%	22.82		%	18.12		%
Shares outstanding at end of period	100,462,586			96,784,857			101,330,757			97,546,600
Net assets at end of period	$	640,436,545		$	703,973,176		$	610,610,747		$	687,862,214
Ratio/Supplemental Data (annualized):
Ratio of net investment income to average net assets	6.32		%	6.64		%	5.45		%	6.75		%
Ratio of net expenses (including incentive fees) to average net assets	7.39		%	7.03		%	7.54		%	7.03		%
Ratio of incentive fees to average net assets ⁽⁵⁾							0.03		%	0.06		%
Supplemental Data (annualized):
Asset coverage ratio per unit⁽⁶⁾	$	2,952		$	2,385		$	2,861		$	2,407
Percentage of non-recurring fee income⁽⁷⁾	2.27		%	3.73		%	6.76		%	5.19		%
Ratio of net expenses (excluding incentive fees) to average net assets	7.37		%	7.03		%	7.52		%	6.96		%
Ratio of interest and financing related expenses to average net assets	3.26		%	2.89		%	3.25		%	2.96		%
Total Debt Outstanding^:(8)(9)
Revolving Credit Facility	$	328,100,000		$	385,000,000		$	328,100,000		$	370,000,000
Total Return Swap⁽¹⁰⁾	$	—		$	126,316,942		$	—		$	126,316,942


(1)	The per share data was derived by using the weighted average shares outstanding during the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, which were ~~99,649,414~~100,116,493 and ~~97,385,971~~97,142,433 respectively.


(2)	The per share data for distributions is the actual amount of paid distributions per share during the period.


(3)	Shares issued under the DRIP (see Note 13) as well as the continuous issuance of common shares may cause on incremental increase/decrease in NAV per share due to the effect of issuing shares at amounts that differ from the prevailing NAV at each issuance.


(4)	Total annual returns are historical and assume reinvestments of all dividends and distributions at prices obtained under the Company’s DRIP, and no sales charge.


(5)	Not annualized.

(6)

Asset coverage per unit is the ratio of the carrying value of the Company's total consolidated assets for regulatory purposes, which includes the underlying fair value of net TRS, less all liabilities and indebtedness not represented by senior securities to the aggregate amount of Senior Securities representing indebtedness and the implied leverage on the TRS. Asset coverage per unit is expressed in terms of dollars per $1,000 of indebtedness. As of ~~June~~September 30, 2019 and 2018, the Company's Asset Coverage Per Unit including unfunded commitments was ~~$2,700~~$2,645 and ~~$2,135,~~$2,119, respectively.


(7)	Represents the impact of non-recurring fees over total investment income.


(8)	Total amount of each class of senior securities outstanding at the end of the period excluding debt issuance costs.


(9)	Average market value per unit is not applicable as these classes of securities are not registered for public trading.


(10)	The TRS amount is comprised of the outstanding notional amount of the TRS, less the initial amount of any cash collateral required to be posted by Arbor under the TRS.

Note 15. Subsequent Events

Management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the ~~six~~nine months ended ~~June~~September 30, 2019, except as disclosed below.

Amendment amends certain provisions of the Revolving Credit Agreement (as amended by Amendment No. 1, the “Prior Facility” and, as further amended by Amendment No. 2, the “Facility”) to, among other things, (i) reduce the size of the commitments thereunder from $220.0 million to $215.0 million, (ii) extend the Revolver Termination Date (as defined in the Prior Facility) from August 12, 2019 to March 31, 2020 and (iii) extend the Maturity Date (as defined in the Prior Facility) from August 12, 2020 to March 31, 2021. As of July 25, 2019, total commitments under the Facility are $215.0 million.

On ~~July 28,~~October 29, 2019, our board of directors declared a series of monthly distributions for ~~July, August~~October, November and ~~September~~December 2019 in the amount of $0.05334 per share. Stockholders of record as of each respective monthly record date will be entitled to receive the distribution. Below are the details for each respective distribution:



Record Date	Payment Date	Amount per share
~~July~~October 30, 2019	~~July~~October 31, 2019	$0.05334
~~August 29,~~November 28, 2019	~~August 30,~~November 29, 2019	0.05334
~~September 27,~~December 30, 2019	~~September 30,~~December 31, 2019	0.05334

On July 29, 2019, the Company entered into the Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019 (the “Amended MCC Merger Agreement”), by an between MCC and the Company, pursuant to which MCC will, on the terms and subject to the conditions set forth in the Amended MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC Merger. In the MCC Merger, each share of MCC’s common stock (other than shares of MCC’s common stock held by MCC, the Company or their respective wholly owned subsidiaries, will be exchanged for the right to receive (i) 0.68 shares of the Company’s common stock if the attorneys’ fees of plaintiffs’ counsel and litigation expenses paid or incurred by plaintiffs’ counsel or advanced by plaintiffs in connection with the Class Action (such fees and expenses, the “Plaintiff Attorney Fees”) are less than or equal to $10,000,000, (ii) 0.66 shares of the Company’s common stock if the Plaintiff Attorney Fees are equal to or greater than $15,000,000, and (iii) between 0.68 and 0.66 per share of the Company’s common stock if the Plaintiff Attorney Fees are greater than $10,000,000 but less than $15,000,000, calculated on a descending basis, based on straight line interpolation between $10,000,000 and $15,000,000.

In addition, on July 29, 2019, the Company entered into the Amended and Restated Agreement and Plan of Merger (the “Amended MDLY Merger Agreement”) by and among MDLY, the Company, and Merger Sub, pursuant to which MDLY will, on the terms and subject to the conditions set forth in the Amended MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY Merger. In the MDLY Merger, each share of MDLY’s Class A common stock, issued and outstanding immediately prior to the effective date of the MDLY Merger, other than shares of MDLY’s Class A common stock held by MDLY, the Company or their respective wholly owned subsidiaries (the “Excluded MDLY Shares”) and the Dissenting Shares (as defined in the Amended MDLY Merger Agreement), held, immediately prior to the MDLY Merger effective time, by any person other than a Unitholder (as defined below), will be exchanged for (i) 0.2668 shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.96 per share. In addition, in the MDLY Merger, each share of MDLY’s Class A common stock issued and outstanding immediately prior to the MDLY Merger effective time, other than the Excluded MDLY Shares and the Dissenting Shares, held, immediately prior to the MDLY Merger effective time, by holders of the issued and outstanding limited liability company interests of Medley LLC (the “Medley LLC Units” and, holders of the Medley LLC Units at any time on or after July 29, 2019, the “Unitholders”) will be exchanged for (i) 0.2072 shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.66 per share.

Pursuant to terms of the Amended MCC Merger Agreement, the consummation of the MCC Merger is conditioned upon the satisfaction or waiver of each of the conditions to closing under the Amended MDLY Merger Agreement and the consummation of the MDLY Merger. However, pursuant to the terms of the Amended MDLY Merger Agreement, the consummation of the MDLY Merger is not contingent upon the consummation of the MCC Merger. If both Mergers are successfully consummated, our common stock would be listed on the New York Stock Exchange, with such listing expected to be effective as of the closing date of the Mergers, and our common stock will be listed on the Tel Aviv Stock Exchange, with such listing expected to be effective as of the closing date of the MCC Merger. If, however, only the MDLY Merger is consummated, our common stock would be listed on the New York Stock Exchange. If both Mergers are successfully consummated, the investment portfolios of MCC and the Company would be combined, Merger Sub, as a successor to MDLY, would be a wholly owned subsidiary of the Combined Company, and the Combined Company would be internally managed by MCC Advisors LLC, its wholly controlled adviser subsidiary. If only the MDLY Merger is consummated, while the investment portfolios of MCC and the Company would not be combined, the investment management function relating to the operation of the Company, as the surviving company, would still be internalized.

Notwithstanding the suspension of the share repurchase program and, in connection with the Amended MCC Merger Agreement, our board of directors approved the repurchase of shares of our common stock from our stockholder who have requested repurchases in connection with such stockholder’s death or disability.

Effective as of August 31, 2019, Jeff Tonkel is retiring and will be a senior advisor to the Medley platform and will remain a director of MDLY and MCC. Accordingly, Mr. Tonkel will resign from his positions as President of MDLY, the Company, and Sierra Total Return Fund. Mr. Tonkel’s decision to resign as President of MDLY, the Company, and Sierra Total Return Fund was not due to any dispute or disagreement with MDLY, the Company, or Sierra Total Return Fund, or on any matter relating to the operations, policies or practices of MDLY, the Company, or Sierra Total Return Fund.

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

The following discussion and analysis should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this quarterly report on Form 10-Q.

Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refers to Sierra Income Corporation. “SIC Advisors” or “Adviser” refers to SIC Advisors LLC, our investment adviser. SIC Advisors is a wholly owned subsidiary of Medley LLC, which is controlled by Medley Management Inc., a publicly traded asset management firm, which in turn is controlled by Medley Group LLC, an entity wholly-owned by the senior professionals of Medley LLC. “Medley” refers, collectively, to the activities and operations of Medley Capital LLC, Medley LLC, Medley Management Inc., Medley Group LLC, SIC Advisors, associated investment funds and their respective affiliates.

Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements, which relate to future events or our performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties, including, but not limited to, statements as to:

our future operating results;

our business prospects and the prospects of our portfolio companies;

changes in the economy;

risks associated with possible disruptions in our operations or the economy generally;

the effect of investments that we expect to make;

our contractual arrangements and relationships with third parties;

actual and potential conflicts of interest with SIC Advisors and its affiliates;

the dependence of our future success on the general economy and its effect on the industries in which we invest;

the ability of our portfolio companies to achieve their objectives;

the use of borrowed money to finance a portion of our investments;

the adequacy of our financing sources and working capital;

the timing of cash flows, if any, from the operations of our portfolio companies;

the ability of SIC Advisors to locate suitable investments for us and to monitor and administer our investments;

the ability of SIC Advisors and its affiliates to attract and retain highly talented professionals;

our ability to maintain our qualification as a RIC and as a BDC; and

the effect of changes in laws or regulations affecting our operations.

This quarterly report on Form 10-Q also includes “forward-looking” statements regarding the proposed transactions. Because forward-looking statements, such as the date that the parties expect the proposed transactions to be completed and the expectation that the proposed transactions will provide improved liquidity for the Company, MCC, and MDLY’s stockholders and will be accretive to net investment income for both the Company and MCC, include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in each of the Company’s, MCC’s and MDLY’s filings with the SEC, and (i) the satisfaction or waiver of closing conditions relating to the proposed transactions described herein, including, but not limited to, the requisite approvals of the stockholders of each of the Company, MCC, and MDLY; the Company successfully taking all actions reasonably required with respect to certain outstanding indebtedness of MCC and MDLY to prevent any material adverse effect relating thereto; certain required approvals of the SEC (including necessary exemptive relief to consummate the merger transactions), approval by the Court of Chancery of the State of Delaware of the Stipulation of Settlement in connection with the consolidated actions under caption of In re Medley Capital Corporation Stockholder Litigation, C.A. No. 2019-0100-KSJM, the necessary consents of certain third-party advisory clients of MDLY; and any applicable waiting period (and any extension thereof) applicable to the transactions under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated; (ii) the parties’ ability to successfully consummate the proposed transactions, and the timing thereof; (iii) the results of the go-shop process that will be conducted by MCC’s special committee; and (iv) the possibility that competing offers or acquisition proposals related to the proposed transactions will be made and, if made, could be successful. Additional risks and uncertainties specific to the Company, MCC and MDLY include, but are not limited to, (i) the costs and expenses that the Company, MCC and MDLY have, and may incur, in connection with the proposed transactions (whether or not they are consummated); (ii) the impact that any litigation relating to the proposed transactions may have on any of the Company, MCC and MDLY; (iii) that projections with respect to distributions may prove to be incorrect; (iv) the Company’s ability to invest its portfolio of cash in a timely manner following the closing of the proposed transactions; (v) the market performance of the combined portfolio; (vi) the ability of portfolio companies to pay interest and principal in the future; (vii) the ability of MDLY to grow its fee earning assets under management; (viii) whether the Company, as the surviving company, will trade with more volume and perform better than MCC and MDLY prior to the proposed transactions; and (ix) negative effects of entering into the

proposed transactions on the trading volume and market price of MCC’s or MDLY’s common stock. There can be no assurance of the level of any distributions to be paid, if any, following consummation of the proposed transactions.

Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words “trend,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “potential,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. The forward-looking statements contained in this quarterly report involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including due to the factors set forth in “Risk Factors” in this quarterly report on Form 10-Q and in Item 1A “Risk Factors” in Part 1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including quarterly reports on Form 10-Q, annual reports on Form 10-K, and current reports on Form 8-K.

Overview

We are an externally managed non-diversified closed-end management investment company that has elected to be treated as a BDC under the 1940 Act. We are externally managed by SIC Advisors, which is a registered investment adviser under the Advisers Act. SIC Advisors is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. In addition, we have elected, and intend to qualify annually to be treated, for U.S. federal income tax purposes, as a RIC under Subchapter M of the Code.

Under our Investment Advisory Agreement, we pay SIC Advisors a base management fee as well as an incentive fee based on our investment performance. Also, under the Administration Agreement, we reimburse Medley for the allocable portion of overhead and other expenses incurred by Medley Capital LLC in performing its obligations under the Administration Agreement, including our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer and their respective staffs.

We intend to meet our investment objective by primarily lending to, and investing in, the debt of privately owned U.S. middle market companies, which we define as companies with annual revenue between $50 million and $1 billion. We intend to focus primarily on making investments in first lien senior secured debt, second lien secured debt, and to a lesser extent, subordinated debt, of middle market companies in a broad range of industries. We expect that the majority of our debt investments will bear interest at floating interest rates, but our portfolio may also include fixed-rate investments. We will originate transactions sourced through SIC Advisors’ existing network, and, to a lesser extent, expect to acquire debt securities through the secondary market. We may make equity investments in companies that we believe will generate appropriate risk adjusted returns, although we do not expect such investments to be a substantial portion of our portfolio.

The level of our investment activity depends on many factors, including the amount of debt and equity capital available to prospective portfolio companies, the level of merger, acquisition and refinancing activity for such portfolio companies, the availability of credit to finance transactions, the general economic environment and the competitive environment for the types of investments we make. Based on prevailing market conditions, we anticipate that we will invest the proceeds from each subscription closing generally within 30-90 days. The precise timing will depend on the availability of investment opportunities that are consistent with our investment objectives and strategies.

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, we are only allowed to borrow money such that our asset coverage, as defined in the 1940 Act, equals at least 200% (or 150% if, pursuant to recent legislation, certain requirements under the 1940 Act are met) after such borrowing, with certain limited exceptions. To maintain our RIC tax treatment, we must meet specified source-of-income and asset diversification requirements. To be eligible for RIC tax treatment under Subchapter M for U.S. federal income tax purposes, we must distribute at least 90% of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, for the taxable year.

Agreements and Plan of Mergers

On August 9, 2018, the Company entered into definitive agreements to acquire Medley Capital Corporation (NYSE/TASE: MCC, ~~“MCC”)~~MCC) and Medley Management Inc.~~(NYSE:~~ (NYSE:MDLY, ~~“MDLY”~~"MDLY"). Pursuant to the Agreement and Plan of Merger, dated as of August 9, 2018, by and between MCC and ~~Sierra~~the Company (the ~~“MCC~~"MCC Merger ~~Agreement”~~Agreement"), MCC would, on the terms and subject to the conditions set forth in the MCC Merger Agreement, merge with and into the Company, with the Company as the surviving ~~entity~~company (the ~~“Combined Company”~~"Combined Company") in the merger (the ~~“MCC Merger”~~"MCC Merger"). Under the MCC Merger, each share of MCC’s common stock issued and outstanding immediately prior to the MCC Merger effective time, other than shares of MCC’s common stock held by MCC, ~~Sierra~~the Company or their respective wholly owned subsidiaries, would be converted into the right to receive 0.8050 shares of the Company’s common stock.

Simultaneously, pursuant to the Agreement and Plan of Merger (the ~~“MDLY~~"MDLY Merger ~~Agreement”~~Agreement" together with the MCC Merger Agreement, the “Merger Agreements”), dated as of August 9, 2018, by and among MDLY, the Company, and Sierra Management, Inc., a ~~newly formed Delaware corporation and a~~ wholly owned subsidiary of the Company (“("Merger ~~Sub”~~Sub"), MDLY would, on the terms and subject to the conditions set forth in the MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the Merger (the ~~“MDLY Merger”~~MDLY Merger together with the MCC Merger, the ~~“Mergers”~~"Mergers"), and MDLY’s existing asset management business would continue to operate as a wholly owned subsidiary of the Combined Company. In the MDLY Merger, each share of MDLY Class A common stock, issued and outstanding immediately prior to the MDLY Merger effective time, other than Dissenting Shares (as defined in the MDLY Merger Agreement) and shares of MDLY Class A common stock held by MDLY, the Company or their respective wholly owned subsidiaries, would be converted into the right to receive (i) 0.3836 shares of our common stock; plus (ii) cash in an amount equal to $3.44 per share. In addition, ~~MDLY’s~~MDLY's stockholders would have the right to receive certain dividends and/or other payments.

As a result of the foregoing, the investment management function relating to the operation of the Combined Company will be internalized. Pursuant to the terms of the Amended MCC Merger Agreement, the consummation of the MCC Merger is conditioned upon the satisfaction or waiver of each of the conditions to closing under the Amended MDLY Merger Agreement and the consummation of the MDLY Merger. However, pursuant to the terms of the Amended MDLY Merger Agreement, the consummation of the MDLY Merger is not contingent upon the consummation of the MCC Merger. If the Mergers are, ~~successfully~~or only the MDLY Merger is consummated, ~~our~~the Company’s common stock ~~would~~will be listed on the New York Stock Exchange under the symbol ~~“SRA” and the Tel Aviv Stock Exchange,~~"SRA, with such ~~listings~~listing expected to be effective as of the closing date of the ~~Mergers. Upon completion~~Mergers or only the MDLY Merger, as applicable. If the MCC Merger is also consummated, the Company’s common stock will be listed on the Tel Aviv Stock Exchange, with such listing expected to be effective as of the ~~Mergers, the investment portfolios of MCC and the Company would be combined, Merger Sub, as a successor to MDLY, would be a wholly owned subsidiary~~closing date of the ~~Combined Company, and the Combined Company would be internally managed by MCC Advisors LLC, its wholly controlled adviser subsidiary.~~Mergers.

Set forth below is a description of the Decision (as defined below), which should be read in the context of the impact that the Decision and corresponding Settlement Term Sheet (as defined below) may have on the Company with respect to any potential amendment to the Merger Agreements.

Set forth below is a description of the Decision (as defined below), which should be read in the context of the impact that the Decision and corresponding Settlement (as defined below).

On February 11, 2019, a ~~putative~~purported stockholder class action ~~related to the MCC Merger~~ was commenced in the Delaware Court of Chancery ~~of the State of Delaware~~ by FrontFour Capital Group LLC and FrontFour Master Fund, ~~Ltd (collectively,~~Ltd. (together, “FrontFour”)~~. The action, as consolidated, is~~, captioned In re Medley Capital Corporation Stockholder Litigation, C.A. No. 2019-0100-KSJM, against defendants Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, the Company, MCC, MCC Advisors LLC, Medley Group LLC, and Medley ~~LLC (the “Class Action”).~~LLC. The complaint, as amended on February 12, 2019, alleged that ~~MCC’s directors (Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, and Arthur S. Ainsberg)~~the individuals named as defendants breached their fiduciary duties to MCC’s stockholders in connection with the MCC Merger, and that MDLY, the Company, MCC Advisors LLC, Medley Group LLC, and Medley LLC aided and abetted those alleged breaches of fiduciary duties. OnThe complaint sought to enjoin the vote of MCC stockholders on the proposed merger and enjoin enforcement of certain provisions of the MCC Merger Agreement. The Court held a trial on the plaintiffs’ claims on March ~~11,~~6-7, 2019 ~~following a two-day trial, the Court~~and issued a Memorandum Opinion (the “Decision”) ~~denying~~on March 11, 2019. The Delaware Court of Chancery denied FrontFour’s requests to (i) permanently enjoin the MCC Merger and (ii) require MCC to conduct a “shopping process” for MCC on terms proposed by FrontFour in its complaint. The Court held that MCC’s directors breached their fiduciary duties in entering into the MCC Merger, but rejected FrontFour’s claim that the Company aided and abetted those breaches of fiduciary duties. The Court ordered the defendants to issue corrective disclosures consistent with the Decision, and enjoined a vote of MCC’s stockholders on the MCC Merger until such disclosures have been made and stockholders have had the opportunity to assimilate this information. On March 20, 2019, another purported stockholder class action was commenced by Stephen Altman against Brook Taube, Seth Taube, Jeff Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, Mark Lerdal, and John E. Mack in the Delaware Court of Chancery, captioned Altman v. Taube, Case No. 2019-0219 (the “Altman Action”). The complaint alleged that the defendants breached their fiduciary duties to stockholders of MCC in connection with the vote of MCC stockholders on the proposed mergers. On April 8, 2019, the Delaware Court of Chancery granted a stipulation consolidating the MCC Stockholder Action and the Altman Action, designating the amended complaint in the MCC Stockholder Action as the operative complaint, and designating the plaintiffs in the MCC Stockholder Action and their counsel the lead plaintiffs and lead plaintiffs’ counsel, respectively.

The ~~Settlement Term Sheet is intended to form~~Stipulation provides for the ~~basis~~settlement of ~~a definitive stipulation of settlement~~all claims brought against the Medley Parties in the ~~Class~~MCC Stockholder Action. ~~The Settlement Term Sheet provides that~~Under the Stipulation, MCC ~~will~~agreed to seek to obtain the agreement and/or consent of the Company to effect certain amendments to (i) the MCC Merger Agreement and (ii) the MDLY Merger Agreement (together with the MCC Merger Agreement, the “Merger Agreements”)~~. If the foregoing amendments are entered into they will, among other matters (as described in further detail~~, which have been reflected in the ~~Settlement Term Sheet): (a) extend the Outside Date (as defined in the~~revised Merger Agreements) to October 31, 2019; (b) permit MCC’s special committee of independent directors (the “MCC Special Committee”) to undertake a sixty-day “go shop” process to solicit superior transactionsAgreements annexed to the ~~MCC Merger and (c)~~Stipulation. The Stipulation also provides for, if the MCC Merger is consummated, ~~create~~the creation of a settlement fund, consisting of $17 million in cash and $30 million of the Company’s stock, with the number of shares of the Company’s stock to be calculated using the pro forma NAV reported in the future proxy supplement describing the amendments to the MCC Merger

Agreement, which will be distributed to eligible members of the Settlement Class (as defined in the ~~Settlement Term Sheet)~~Stipulation). ~~In connection with~~Under the ~~Settlement Term Sheet,~~Stipulation, MDLY ~~has executed an acknowledgement and agreement~~also consented to ~~take~~ certain actions, including consenting to certain amendments to the Merger Agreements That have been reflected in ~~furtherance of~~ the ~~transactions contemplated thereby.~~

Revenues

We generate revenue in the form of interest on the debt securities that we hold and distributions and capital gains on other interests that we acquire in our portfolio companies. We expect that the senior debt we invest in will generally have stated terms of three to ten years and that the subordinated debt we invest in will generally have stated terms of five to ten years. Our senior and subordinated debt investments bear interest at a fixed or floating rate. Interest on debt securities is generally payable monthly, quarterly or semiannually. In addition, some of our investments provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally will become due at the maturity date. In addition, we may generate revenue in the form of commitment and other fees in connection with transactions. OIDs and market discounts or premiums will be capitalized, and we will accrete or amortize such amounts as interest income. We will record prepayment premiums on loans and debt securities as fee income. Dividend income, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.

Expenses

Our primary annual operating expenses consist of the payment of advisory fees and the reimbursement of expenses under our Investment Advisory Agreement with SIC Advisors and our Administration Agreement with Medley Capital LLC. We bear other expenses, which include, among other things:

corporate, organizational and offering expenses relating to offerings of our common stock, subject to limitations included in our Investment Advisory Agreement;

the cost of calculating our NAV, including the related fees and cost of any third-party valuation services;

the cost of effecting sales and repurchases of shares of our common stock and other securities;

fees payable to third parties relating to, or associated with, monitoring our financial and legal affairs, making investments, and valuing investments, including fees and expenses associated with performing due diligence reviews of prospective investments;

interest payable on debt, if any, incurred to finance our investments;

transfer agent and custodial fees;

fees and expenses associated with marketing efforts subject to limitations included in the Investment Advisory Agreement;

federal and state registration fees and any stock exchange listing fees;

federal, state and local taxes;

independent directors’ fees and expenses, including travel expenses;

costs of director and stockholder meetings, proxy statements, stockholders’ reports and notices;

costs of fidelity bonds, directors and officers/errors and omissions liability insurance and other types of insurance;

direct costs, including those relating to printing of stockholder reports and advertising or sales materials, mailing, long distance telephone and staff subject to limitations included in the Investment Advisory Agreement;

fees and expenses associated with independent audits and outside legal costs, including compliance with the Sarbanes-Oxley Act of 2002, the 1940 Act and applicable federal and state securities laws;

brokerage commissions for our investments;

all other expenses incurred by us or SIC Advisors in connection with administering our investment portfolio, including expenses incurred by SIC Advisors in performing certain of its obligations under the Investment Advisory Agreement; and

the reimbursement of the compensation of our Chief Financial Officer and Chief Compliance Officer and their respective staffs, whose compensation is paid by Medley Capital LLC, to the extent that each such reimbursement amount is annually approved by our independent director committee and subject to the limitations included in our Administration Agreement.

Administrative Services

We reimburse Medley Capital LLC for the administrative expenses necessary for its performance of services to us. However, such reimbursement is made at an amount equal to the lower of Medley Capital LLC’s actual costs or the amount that we would be required to pay for comparable administrative services in the same geographic location. Also, such costs will be reasonably allocated to us on the basis of assets, revenues, time records or other reasonable methods. We will not reimburse Medley Capital LLC for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Medley Capital LLC.

Portfolio and Investment Activity

The following table shows the amortized cost and the fair value of our investment portfolio as of ~~June~~September 30, 2019:


	Amortized Cost		Percentage		Fair Value		Percentage		Amortized Cost		Percentage		Fair Value		Percentage
Senior secured first lien term loans	$	464,604,012	51.5	%	$	401,886,948	50.0	%	$	419,330,178	50.1	%	$	365,464,032	49.5	%
Senior secured second lien term loans	160,476,041		17.8		149,900,159		18.6		158,038,539		18.8		142,716,810		19.4
Senior secured first lien notes	30,965,000		3.4		30,106,400		3.7		15,965,000		1.9		15,095,000		2.0
Subordinated notes	73,542,052		8.2		67,042,643		8.3		72,058,258		8.6		62,478,039		8.5
Sierra Senior Loan Strategy JV I LLC	92,050,000		10.3		76,555,675		9.5		92,050,000		11.0		73,409,359		10.0
Equity/warrants	79,638,418		8.8		79,530,206		9.9		80,168,137		9.6		77,787,417		10.6
Total	$	901,275,523	100.0	%	$	805,022,031	100.0	%	$	837,610,112	100.0	%	$	736,950,657	100.0	%

As of ~~June~~September 30, 2019, our income-bearing investment portfolio, which represented ~~89.4%~~90.3% of our total portfolio, had a weighted average yield based upon the cost of our investment portfolio of ~~9.5%~~9.4%, and ~~7.0%~~4.7% of our income-bearing portfolio bore interest based on fixed rates, while ~~93.0%~~95.3% of our income-bearing portfolio bore interest at floating rates, such as LIBOR.

For the three months ended ~~June~~September 30, 2019, we invested ~~$60.0~~$22.5 million of principal in directly originated transactions across 21eight portfolio companies and ~~$7.0~~$7 million of principal in syndicated transactions across 5one portfolio companies. As of ~~June~~September 30, 2019, the investment portfolio was comprised of ~~$763.7~~$703.6 million of principal in directly originated transactions across 68 portfolio companies and ~~$124.1~~$128.3 million of principal in syndicated transactions across 23 portfolio companies.

The following table shows the amortized cost and the fair value of our investment portfolio as of December 31, 2018:



	Amortized Cost		Percentage		Fair Value		Percentage
Senior secured first lien term loans	$	532,302,573	52.9	%	$	479,593,279	52.0	%
Senior secured second lien term loans	174,258,971		17.3		169,923,547		18.4
Senior secured first lien notes	37,930,308		3.8		35,495,093		3.8
Subordinated notes	77,930,062		7.7		66,187,857		7.2
Sierra Senior Loan Strategy JV I LLC	92,050,000		9.2		82,515,860		8.9
Equity/warrants	91,194,948		9.1		89,765,126		9.7
Total	$	1,005,666,862	100.0	%	$	923,480,762	100.0	%

As of December 31, 2018, our income-bearing investment portfolio, which represented 89.3% of our total portfolio, had a weighted average yield based upon the cost of our investment portfolio of approximately 9.7%, and 9.3% of our income-bearing portfolio bore interest based on fixed rates, while 90.7% of our income-bearing portfolio bore interest at floating rates, such as LIBOR.

The following table shows weighted average current yield to maturity, including the yield of cash collateral on the TRS, based on fair value as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019				December 31, 2018				September 30, 2019				December 31, 2018
	Percentage of Total Investments		Weighted Average Current Yield for Total Investments⁽¹⁾		Percentage of Total Investments		Weighted Average Current Yield for Total Investments⁽¹⁾		Percentage of Total Investments		Weighted Average Current Yield for Total Investments⁽¹⁾		Percentage of Total Investments		Weighted Average Current Yield for Total Investments⁽¹⁾
Senior secured first lien term loans	50.0	%	11.0	%	50.5	%	10.3	%	49.5	%	10.6	%	50.5	%	10.3	%
Senior secured second lien term loans	18.6		13.4		17.8		13.3		19.4		12.5		17.8		13.3
Senior secured first lien notes	3.7		15.0		3.7		13.3		2.0		14.9		3.7		13.3
Subordinated notes	8.3		9.4		7.0		7.2		8.5		10.3		7.0		7.2
Sierra Senior Loan Strategy JV I LLC	9.5		9.7		8.7		9.7		10.0		9.7		8.7		9.7
Equity/warrants	9.9		11.8		12.3		12.2		10.6		9.7		12.3		12.2
Total	100.0	%	11.7	%	100.0	%	10.8	%	100.0	%	11.0	%	100.0	%	10.8	%


(1)	The weighted average current yield for total investments does not represent the total return to our stockholders.

The following table shows the portfolio composition by industry classification based on fair value as of ~~June~~September 30, 2019:


Industry Classification	Investments at Fair Value		Percentage of Total Portfolio		Investments at Fair Value		Percentage of Total Portfolio
Multi-Sector Holdings	$	142,385,017	17.7	%	$	134,674,308	18.3	%
Services: Business	133,931,579		16.6	%	101,604,649		13.8	%
High Tech Industries					88,034,986		11.9	%
Healthcare & Pharmaceuticals	71,205,546		8.8	%	56,763,857		7.7	%
High Tech Industries	66,061,383		8.2	%
Aerospace & Defense	48,953,662		6.1	%
Banking, Finance, Insurance & Real Estate	45,797,605		5.7	%	49,008,235		6.7	%
Construction & Building	44,572,576		5.5	%	41,879,474		5.7	%
Aerospace & Defense					34,492,144		4.7	%
Wholesale	37,137,046		4.6	%	28,872,478		3.9	%
Automotive	25,585,576		3.2	%	24,397,660		3.3	%
Consumer Goods: Durable	24,157,288		3.0	%	24,283,577		3.3	%
Transportation: Cargo	19,499,335		2.4	%
Hotel, Gaming & Leisure	20,446,997		2.5	%	21,310,730		2.9	%
Capital Equipment	17,179,706		2.1	%	17,221,868		2.3	%
Containers, Packaging & Glass	15,761,957		2.0	%	15,788,747		2.1	%
Services: Consumer	15,469,960		1.9	%	15,575,000		2.1	%
Energy: Oil & Gas	14,117,361		1.8	%
Transportation: Cargo					13,754,049		1.9	%
Chemicals, Plastics & Rubber	11,363,049		1.4	%	10,979,042		1.5	%
Media: Diversified & Production	10,524,312		1.3	%	10,524,291		1.4	%
Energy: Oil & Gas					10,300,082		1.4	%
Forest Products & Paper					7,073,932		1.0	%
Transportation: Consumer	6,930,182		0.9	%	6,833,805		0.9	%
Forest Products & Paper	6,893,311		0.9	%
Environmental Industries					6,425,492		0.9	%
Media: Advertising, Printing & Publishing	6,749,195		0.8	%	5,116,715		0.7	%
Environmental Industries	6,436,584		0.8	%
Media: Broadcasting & Subscription	4,727,451		0.6	%
Consumer Goods: Non-durable	4,694,081		0.6	%	4,682,197		0.6	%
Metals & Mining	3,335,599		0.4	%	3,467,115		0.5	%
Media: Broadcasting & Subscription					2,195,453		0.3	%
Retail	1,105,673		0.1	%	1,690,771		0.2	%
Total	$	805,022,031	100.0	%	$	736,950,657	100.0	%

The following table shows the portfolio composition by industry classification, including the TRS underlying loans, based on fair value as of December 31, 2018:



Industry Classification	Investments at Fair Value⁽¹⁾		Percentage of Total Portfolio⁽¹⁾		Value of TRS Underlying Loans		Percentage of TRS Underlying Loans		Total Investments at Fair Value including the value of TRS Underlying Loans		Percentage of Total Portfolio Including the value of TRS Underlying Loans
Services: Business	$	156,398,957	16.9	%	$	10,773,821	15.0	%	$	167,172,778	16.9	%
Multi-Sector Holdings	147,751,337		16.0	%	—		—		147,751,337		14.8
Healthcare & Pharmaceuticals	75,750,145		8.2	%	9,509,395		13.2		85,259,540		8.6
High Tech Industries	72,744,712		7.9	%	4,421,984		6.1		77,166,696		7.8
Banking, Finance, Insurance & Real Estate	53,079,983		5.7	%	3,004,364		4.2		56,084,347		5.6
Aerospace & Defense	55,177,303		6.0	%	—		—		55,177,303		5.5
Construction & Building	50,606,634		5.5	%	—		—		50,606,634		5.1
Wholesale	42,859,121		4.6	%	—		—		42,859,121		4.3
Hotel, Gaming & Leisure	34,305,563		3.7	%	—		—		34,305,563		3.4
Transportation: Cargo	25,736,261		2.8	%	5,338,720		7.4		31,074,981		3.1
Consumer Goods: Durable	23,617,293		2.6	%	7,386,965		10.3		31,004,258		3.1
Automotive	25,711,838		2.8	%	1,708,542		2.4		27,420,380		2.8
Capital Equipment	11,187,500		1.2	%	12,707,317		17.6		23,894,817		2.4
Chemicals, Plastics & Rubber	22,245,236		2.4	%	—		—		22,245,236		2.2
Media: Advertising, Printing & Publishing	15,298,916		1.7	%	5,509,302		7.6		20,808,218		2.1
Energy: Oil & Gas	14,779,343		1.6	%	3,030,789		4.2		17,810,132		1.8
Services: Consumer	11,801,389		1.3	%	4,469,702		6.2		16,271,091		1.6
Containers, Packaging & Glass	16,165,041		1.8	%	—		—		16,165,041		1.6
Media: Diversified & Production	14,321,399		1.6	%	—		—		14,321,399		1.4
Retail	8,605,149		0.9	%	—		—		8,605,149		0.9
Forest Products & Paper	7,690,117		0.8	%	—		—		7,690,117		0.8
Consumer Goods: Non-Durable	7,522,988		0.8	%	—		—		7,522,988		0.8
Transportation: Consumer	7,402,367		0.8	%	—		—		7,402,367		0.7
Metals & Mining	6,925,615		0.7	%	—		—		6,925,615		0.7
Environmental Industries	5,164,068		0.6	%	—		—		5,164,068		0.5
Media: Broadcasting & Subscription	5,053,547		0.5	%	—		—		5,053,547		0.5
Beverage & Food	4,742,100		0.5	%	—		—		4,742,100		0.5
Utilities: Electric	—		—	%	4,165,637		5.8		4,165,637		0.4
Telecommunications	836,840		0.1	%	—		—		836,840		0.1
Total	$	923,480,762	100.0	%	$	72,026,538	100.0	%	$	995,507,300	100.0	%


(1)	Does not include TRS underlying loans

SIC Advisors regularly assesses the risk profile of our portfolio investments and rates each of them based on the categories set forth below, which we refer to as SIC Advisors’ investment credit rating. Investment credit ratings are assigned to each of the investments in our portfolio that are directly held by the Company, but exclude any off-balance sheet interests of the Company, such as the loans underlying the TRS:



Investment Credit Rating	Definition
1	Investments that are performing above expectations.

2	Investments that are performing within expectations, with risks that are neutral or favorable compared to risks at the time of origination or purchase. All new loans are rated ‘2’.

3	Investments that are performing below expectations and that require closer monitoring, but where no loss of interest, dividend or principal is expected. Companies rated ‘3’ may be out of compliance with financial covenants, however, loan payments are generally not past due.

4	Investments that are performing below expectations and for which risk has increased materially since origination or purchase. Some loss of interest or dividend is expected, but no loss of principal. In addition to the borrower being generally out of compliance with debt covenants, loan payments may be past due (but generally not more than 180 days past due).

5	Investments that are performing substantially below expectations and whose risks have increased substantially since origination or purchase. Most or all of the debt covenants are out of compliance and payments are substantially delinquent. Some loss of principal is expected.

The following table shows the distribution of our investment portfolio, not including cash and cash equivalents, on the 1 to 5 investment credit rating scale at fair value as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019				December 31, 2018				September 30, 2019				December 31, 2018
Investment Credit Rating	Investments at Fair Value		Percentage		Investments at Fair Value		Percentage		Investments at Fair Value		Percentage		Investments at Fair Value		Percentage
1	$	109,306,651	13.6	%	$	36,018,931	3.9	%	$	83,983,465	11.4	%	$	36,018,931	3.9	%
2	477,132,860		59.3		701,419,815		75.9		459,337,681		62.3		701,419,815		75.9
3	191,695,102		23.8		140,325,008		15.2		161,030,106		21.9		140,325,008		15.2
4	9,809,875		1.2		3,597,528		0.4		24,494,358		3.3		3,597,528		0.4
5	17,077,543		2.1		42,119,480		4.6		8,105,047		1.1		42,119,480		4.6
Total	$	805,022,031	100.0	%	$	923,480,762	100.0	%	$	736,950,657	100.0	%	$	923,480,762	100.0	%

Results of Operations

The following table shows operating results for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018			2019			2018			2019			2018
Total investment income	$	23,906,563		$	24,890,883		$	44,817,023		$	49,250,923		$	18,160,825		$	24,477,122		$	62,977,848		$	73,728,045
Total expenses	12,047,035			12,630,171			24,162,802			25,575,866			12,403,239			12,119,753			36,566,041			37,695,619
Net investment income	11,859,528			12,260,712			20,654,221			23,675,057			5,757,586			12,357,369			26,411,807			36,032,426
Net realized gain/(loss) from investments and total return swap	1,333,156			(133,829		)	(15,252,439		)	(30,836,305		)	(19,721,169		)	(18,244,576		)	(34,973,608		)	(49,080,881		)
Net change in unrealized appreciation/(depreciation) on investments and total return swap	(33,221,374		)	(17,396,983		)	(7,542,488		)	742,620			(4,405,963		)	562,829			(11,948,451		)	1,305,449
Change in provision for deferred taxes on unrealized gain on investments	2,974,612			(57,177		)	—			78,278			(442,842		)	(381,726		)	(442,842		)	(303,448		)
Net increase/(decrease) in net assets resulting from operations	$	(17,054,078	)	$	(5,327,277	)	$	(2,140,706	)	$	(6,340,350	)	$	(18,812,388	)	$	(5,706,104	)	$	(20,953,094	)	$	(12,046,454	)

Investment Income

Total investment income decreased ~~$984,320,~~$6,316,297, or ~~4.0%~~25.8%, to ~~$23,906,563~~$18,160,825 for the three months ended ~~June~~September 30, 2019, compared to ~~24,890,883~~$24,477,122 for the three months ended ~~June~~September 30, 2018. Total investment income consisted primarily of portfolio interest and dividends, which decreased ~~$2,725,654,~~$5,565,308, or ~~11.4%~~24.2%, to ~~$21,162,663~~$17,409,350 for the three months ended ~~June~~September 30, 2019, compared to ~~$23,888,317~~$22,974,658 for the three months ended ~~June~~September 30, 2018. This decrease was primarily due to a decrease in the size of the underlying portfolio due to our reduced leverage utilization. Fee income decreased $1,049,173, or 75.5%, to $339,621 for the three months ended September 30, 2019, compared to $1,388,794 for the three months ended September 30, 2018, primarily due to an decrease in fees associated with loan originations and loan prepayments.

Total investment income decreased $10,750,197, or 14.6%, to $62,977,848 for the nine months ended September 30, 2019, compared to $73,728,045 for the nine months ended September 30, 2018. Total investment income consisted primarily of portfolio interest and dividends, which decreased $11,892,846, or 16.9%, to $58,662,441 for the nine months ended September 30, 2019, compared to $70,555,287 for the nine months ended September 30, 2018. This decrease was primarily due to a decrease in the size of the underlying portfolio due to our reduced leverage utilization. Fee income increased ~~$1,447,910,~~$288,572, or ~~152.8%~~9.7%, to ~~$2,395,376~~$3,269,507 for the ~~three~~nine months ended ~~June 30, 2019,~~

~~compared to $947,466 for the three months ended June 30, 2018, primarily due to an increase in fees associated with loan originations and loan prepayments.~~

~~Total investment income decreased $4,433,900, or 9.0%, to 44,817,023 for the six months ended June~~September 30, 2019, compared to ~~$49,250,923~~$2,980,935 for the ~~six~~nine months ended June 30, 2018. Total investment income consisted primarily of portfolio interest and dividends, which decreased $6,327,538, or 13.3%, to $41,253,091 for the six months ended June 30, 2019, compared to $47,580,629 for the six months ended June 30, 2018. This decrease was primarily due to a decrease in the size of the underlying portfolio due to our reduced leverage utilization. Fee income increased $1,337,745, or 84.0%, to $2,929,886 for the six months ended June 30, 2019, compared to $1,592,141 for the six months ended JuneSeptember 30, 2018, primarily due to an increase in fees associated with loan originations and loan prepayments.

Operating Expenses

The following table shows operating expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 :


	For the Three Months Ended June 30,				For the Six Months Ended June 30,				For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2019		2018		2019		2018		2019		2018			2019		2018
Base management fees	$	4,335,538	$	4,834,495	$	8,777,628	$	9,838,311	$	4,180,333	$	4,681,915		$	12,957,961	$	14,520,226
Interest and financing expenses	5,235,234		5,219,779		10,665,467		10,392,209		5,078,781		5,453,365			15,744,248		15,845,574
Incentive fees	—		—		—		—		176,061		446,703			176,061		446,703
General and administrative expenses	1,578,495		1,216,840		2,519,993		2,641,958		1,556,514		1,053,799			4,076,507		3,695,757
Administrator expenses	536,352		758,178		1,158,423		1,481,713		998,134		527,752			2,156,557		2,009,465
Offering costs	3,528		187,736		35,836		470,986		6,322		(655,352		)	42,158		(184,366		)
Professional fees	357,888		413,143		1,005,455		750,689		407,094		611,571			1,412,549		1,362,260
Total expenses	$	12,047,035	$	12,630,171	$	24,162,802	$	25,575,866	$	12,403,239	$	12,119,753		$	36,566,041	$	37,695,619

Total expenses ~~decreased $583,136,~~increased $283,486, or ~~4.6%~~2.3%, to ~~$12,047,035~~$12,403,239 for the three months ended ~~June~~September 30, 2019, as compared to ~~$12,630,171~~$12,119,753 for the three months ended ~~June~~September 30, 2018, primarily due to an ~~decrease~~increase in ~~base management fees.~~general and administrative expenses and administrator expenses. Total expenses decreased ~~$1,413,064,~~$1,129,578, or ~~5.5%~~3.0%, to ~~$24,162,802~~$36,566,041 for the ~~six~~nine months ended ~~June~~September 30, 2019, as compared to ~~$25,575,866~~$37,695,619 for the ~~six~~nine months ended ~~June~~September 30, 2018, primarily due to a decrease in base management fees.

Base management fees decreased ~~$498,957,~~$501,582, or ~~10.3%~~10.7%, to ~~$4,335,538~~$4,180,333 for the three months ended ~~June~~September 30, 2019, as compared to ~~$4,834,495~~$4,681,915 for the three months ended ~~June~~September 30, 2018, primarily due to a decrease in our gross assets. Base management fees decreased ~~$1,060,683,~~$1,562,265, or 10.8%, to ~~$8,777,628~~$12,957,961 for the ~~six~~nine months ended ~~June~~September 30, 2019, as compared to ~~$9,838,311~~$14,520,226 for the ~~six~~nine months ended ~~June~~September 30, 2018, primarily due to a decrease in our gross assets.

Interest and financing expenses ~~increased $15,455,~~decreased $374,584, or ~~0.3%~~6.9%, to ~~$5,235,234~~$5,078,781 for the three months ended ~~June~~September 30, 2019, as compared to ~~$5,219,779~~$5,453,365 for the three months ended ~~June~~September 30, 2018, primarily due to ~~an increase~~a decrease in the ~~weighted~~ average ~~interest rate~~outstanding balance of our credit ~~facilities, which is a result of an increase in LIBOR rates of 0.8%, or a 16.3% increase.~~facilities. Interest and financing expenses ~~increased $273,258,~~decreased $101,326, or ~~2.6%~~0.6%, to ~~$10,665,467~~$15,744,248 for the ~~six~~nine months ended ~~June~~September 30, 2019, as compared to ~~$10,392,209~~$15,845,574 for the ~~six~~nine months ended ~~June~~September 30, 2018, primarily due to ~~an increase~~a decrease in the ~~weighted~~ average ~~interest rate~~outstanding balance of our credit ~~facilities, which is a result of an increase in LIBOR rates of 0.9%, or a 18.75% increase.~~facilities.

Expense Support and Reimbursement Agreement

From June 29, 2012 through December 31, 2016, we were party to an Expense Support and Reimbursement Agreement with SIC Advisors (the “Expense Support Agreement”). During the term of the Expense Support Agreement, SIC Advisors reimbursed us for operating expenses in an amount equal to the difference between our distributions paid to stockholders in each month, less the sum of our net investment income, net realized capital gains and dividends paid to us from our portfolio companies, not included in net income and net realized capital gains, during such period (“Expense Support Reimbursement”). To the extent that no dividends or other distributions were paid to our stockholders in any given month, then the Expense Support Reimbursement for such month was equal to such amount necessary in order for available operating funds for the month to equal zero. From April 1, 2016 until the expiration of the Expense Support Agreement on December 31, 2016, SIC Advisors made expense support payments on a discretionary basis by making an election on the last day of each month to fund an expense support payment in an amount equal to the difference between our distributions paid to stockholders during such month less the sum of our net investment income, net realized capital gains and dividends paid to us from our portfolio companies, not included in net income and net realized capital gains during such period.

The purpose of the Expense Support Agreement was to cover distributions to stockholders so as to ensure that the distributions did not constitute a return of capital for GAAP purposes and to reduce operating expenses until we had raised sufficient capital to be able to absorb such expenses. The Expense Support Agreement expired on December 31, 2016.

Pursuant to the Expense Support Agreement, we will reimburse SIC Advisors for expense support payments it previously made following any calendar quarter for which we received net investment income, net realized capital gains and dividends from our portfolio companies (not included in net income and net realized capital gains) in excess of the distributions paid to our stockholders during such calendar quarter (the “Excess Operating Funds”). Any such reimbursement will be made within three years of the date that the expense support payment obligation was incurred by SIC Advisors, subject to the conditions described below. The amount of the reimbursement during any calendar quarter will equal the lesser of (i) the Excess Operating Funds received during the quarter and (ii) the aggregate amount of all expense payments made by SIC Advisors that have not yet been reimbursed. In addition, we will only make reimbursement payments to the extent our current annualized “operating expense ratio” is equal to or less than our operating expense ratio for the quarter during which the corresponding expense obligation was incurred and to the extent the annualized rate of its regular cash dividends to our stockholders for the month is equal to or greater than the annualized rate of our regular cash distributions to stockholders for the month during which the corresponding expense payment was incurred.

Net Realized Gains/Losses on Investments

We measure realized gains or losses by the difference between the net proceeds from the disposition and the amortized cost basis of an investment, without regard to unrealized gains or losses previously recognized. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, we recognized net realized ~~gain~~loss on investments of ~~$1,333,156~~$19,721,169 and net realized loss on investments of ~~$15,252,439,~~$34,973,608, respectively, primarily due to certain non-cash restructuring transactions and the wind-down of our TRS facility. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, we recognized net realized loss on investments of ~~$133,829~~$18,244,576 and net realized loss on investments of ~~$30,836,305,~~$49,080,881, respectively, primarily due to certain non-cash restructuring transactions.

Net Unrealized Appreciation/Depreciation on Investments

Net change in unrealized appreciation/depreciation on investments reflects the net change in the fair value of our investments including the TRS and provision for deferred taxes. For the three and ~~six~~nine months ended ~~June~~September 30, 2019, we recorded a net change in unrealized depreciation of ~~$30,246,762~~$4,848,805 and depreciation of ~~$7,542,488,~~$12,391,293, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, we recorded a net change in unrealized ~~depreciation~~appreciation of ~~$17,454,160~~$181,103 and appreciation of ~~$820,898.~~$1,002,001.

Changes in Net Assets from Operations

For the three and ~~six~~nine months ended ~~June~~September 30, 2019, we recorded a net decrease of ~~$17,054,078~~$18,812,388 and a net decrease of ~~$2,140,706,~~$20,953,094, respectively, in net assets resulting from operations. Based on ~~100,135,004~~101,035,420 and ~~99,649,414~~100,116,493 weighted average common shares outstanding for the three and ~~six~~nine months ended ~~June~~September 30, 2019, our per share net decrease in net assets resulting from operations was ~~$0.17~~$0.19 and ~~$0.02,~~$0.21, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2018, we recorded a net decrease of ~~$5,327,277~~$5,706,104 and a net decrease of ~~$6,340,350,~~$12,046,454, respectively, in net assets resulting from operations. Based on ~~97,385,971~~97,047,494 and ~~97,190,689~~97,142,433 weighted average common shares outstanding for the three and ~~six~~nine months ended ~~June~~September 30, 2018, our per share net decrease in net assets resulting from operations was ~~$0.05~~$0.06 and ~~$0.07,~~$0.12, respectively.

Financial Condition, Liquidity and Capital Resources

As a BDC, we distribute substantially all of our net income to our stockholders and have an ongoing need to raise additional capital for investment purposes. To fund growth, we have a number of alternatives available to increase capital; including raising equity, increasing debt, and funding from operational cash flow.

Our liquidity and capital resources historically have been generated primarily from the net proceeds of our public offering of common stock, use of our credit facilities and our TRS. Currently, our primary source of liquidity derived from the use of our credit facility.

As of ~~June~~September 30, 2019 and December 31, 2018, we had ~~$161,214,258~~$192,205,852 and $59,481,495, respectively, in cash and cash equivalents. In the future, we may generate cash from future offerings of securities, future borrowings and cash flows from operations, including interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. Our primary use of funds is investments in our targeted asset classes, cash distributions to our stockholders, and other general corporate purposes.

In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders substantially all of our taxable income, but we may also elect to periodically spillover certain excess undistributed taxable income from one tax year into the next tax year. In addition, as a BDC, we generally are required to meet a coverage ratio of total assets to total senior securities,

which include borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if certain requirements under the 1940 Act are met). This requirement limits the amount that we may borrow.

The following table shows our net borrowings as of ~~June~~September 30, 2019 and December 31, 2018:


	June 30, 2019							December 31, 2018							September 30, 2019							December 31, 2018
	Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment		Total Commitment		Balance Outstanding			Unused Commitment
ING Credit Facility	$	220,000,000	$	88,100,000		$	131,900,000	$	220,000,000	$	115,000,000		$	105,000,000	$	215,000,000	$	88,100,000		$	126,900,000	$	220,000,000	$	115,000,000		$	105,000,000
Alpine Credit Facility	300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000		300,000,000		240,000,000			60,000,000
Total before deferred financing costs	520,000,000		328,100,000			191,900,000		520,000,000		355,000,000			165,000,000		515,000,000		328,100,000			186,900,000		520,000,000		355,000,000			165,000,000
Unamortized deferred financing costs	—		(2,631,660		)	—		—		(3,460,986		)	—		—		(2,660,252		)	—		—		(3,460,986		)	—
Total borrowings outstanding, net	$	520,000,000	$	325,468,340		$	191,900,000	$	520,000,000	$	351,539,014		$	165,000,000	$	515,000,000	$	325,439,748		$	186,900,000	$	520,000,000	$	351,539,014		$	165,000,000

On August 12, 2016, we amended our ING Credit Facility pursuant to the Revolving Credit Agreement with certain lenders party thereto from time to time and ING Capital LLC, as administrative agent. The ING Credit Facility matures on August 12, 2020 and is secured by substantially all of our assets, subject to certain exclusions as further set forth in the Security Agreement entered into in connection with the Revolving Credit Agreement, among us, the Subsidiary Guarantors party thereto, ING Capital LLC, as Administrative Agent, each Financial Agent and Designated Indebtedness Holder party thereto and ING Capital LLC, as Collateral Agent. The ING Credit Facility also includes usual and customary representations, covenants and events of default for senior secured revolving credit facilities of this nature. On February 13, 2015, commitments to the ING credit facility were expanded from $150 million to $170 million. On August 12, 2016, commitments to the ING credit facility were expanded from $170 million to $175 million. On April 20, 2017, commitments to the ING Credit Facility were expanded from $175 million to $220 million. On February 8, 2019, we amended our ING Credit Facility, among other things, to permit the transactions contemplated by the MCC Merger Agreement and the MDLY Merger Agreement. On July 25, 2019, the Company entered into Amendment No. 2 to the Revolving Credit Agreement (the “Amendment”), with certain lenders party thereto, ING Capital LLC, as administrative agent (the “Administrative Agent”), and, solely with respect to Section 2.10 of the Amendment, SIC AAR LLC, SIC Investment Holdings LLC and Sierra Management, Inc., as subsidiary guarantors. The Amendment amends certain provisions of the Revolving Credit Agreement (as amended by Amendment No. 1, the “Prior Facility” and, as further amended by Amendment No. 2, the “Facility”) to, among other things, (i) reduce the size of the commitments thereunder from $220.0 million to $215.0 million, (ii) extend the Revolver Termination Date (as defined in the Prior Facility) from August 12, 2019 to March 31, 2020 and (iii) extend the Maturity Date (as defined in the Prior Facility) from August 12, 2020 to March 31, 2021.

The ING Credit Facility allows for us, at our option, to borrow money at a rate of either (i) an alternate base rate plus 1.50% per annum or (ii) LIBOR plus 2.50% per annum. The interest rate margins are subject to certain step-downs upon the satisfaction of certain conditions described in the Revolving Credit Agreement. The alternate base rate will be the greatest of (i) the U.S. Prime Rate set forth in the Wall Street Journal, (ii) the federal funds effective rate plus 1/2 of 1%, and (iii) three month LIBOR plus 1%. As of ~~June~~September 30, 2019 the commitment under the ING Credit Facility was $215 million and as December 31, 2018, the commitment under the ING Credit Facility was $220 million and includes an accordion feature that allows for potential future expansion of the ING Credit Facility up to a total of $500 million. Availability of loans under the ING Credit Facility is linked to the valuation of the collateral pursuant to a borrowing base mechanism.

We are also required to pay a commitment fee to the lenders based on the daily unused portion of the aggregate commitments under the ING Credit Facility. The commitment fee is (i) 1.50% if the used portion of the aggregate commitments is less than or equal to 40%, (ii) 0.75% if the used portion of the aggregate commitments is greater than 40% and less than or equal to 65% or (iii) 0.50% if the used portion of the aggregate commitments is greater than 65%. The ING Credit Facility provides that we may use the proceeds of the facility for general corporate purposes, including making investments in accordance with our investment objective and strategy. As of ~~June~~September 30, 2019, our borrowings under the ING Facility totaled $88,100,000 and were recorded as part of revolving credit facility payable on our Consolidated Statements of Assets and Liabilities.

On September 29, 2017, the Company’s wholly-owned, special purpose financing subsidiary, Alpine, amended it's existing revolving credit facility (the “Alpine Credit Facility”) pursuant to an Amended and Restated Loan Agreement (the “Amendment”) with JPMorgan Chase Bank, National Association (“JPMorgan”), as administrative agent and lender, the Financing Providers from time to time party thereto, SIC Advisors, as the portfolio manager, and the Collateral Administrator, Collateral Agent and Securities Intermediary party thereto (the “Loan Agreement”). The Loan Agreement was amended to, among other things, (i) extend the reinvestment period until December 29, 2020, (ii) extend the scheduled termination date until March 29, 2022, (iii) decrease the applicable margin for advances to 2.85% per annum and (iv) increase the compliance condition for net advances to 55% of net asset value. Alpine’s obligations to JPMorgan under the Alpine Credit Facility are secured by a first priority security interest in substantially all of the assets of Alpine, including its portfolio of loans. The obligations of Alpine under the Alpine Credit Facility are non-recourse to the Company.

Borrowings under the Alpine Credit Facility are subject to compliance with a NAV coverage ratio with respect to the current value of Alpine’s portfolio and various eligibility criteria must be satisfied with respect to the initial acquisition of each loan in Alpine’s portfolio. Any amounts borrowed under the Alpine Credit Facility will mature, and all accrued and unpaid interest thereunder will be due and payable, on March 29, 2022. As of ~~June~~September 30, 2019, Alpine’s borrowings under the Alpine Credit Facility totaled $240,000,000 and were recorded as part of revolving credit facility payable on our Consolidated Statements of Assets and Liabilities.

Contractual Obligations

The following table shows our payment obligations for repayment of debt, which total our contractual obligations at ~~June~~September 30, 2019:



	Payment Due By Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
ING Credit Facility	$	88,100,000	$	—	$	88,100,000	$	—	$	—
Alpine Credit Facility	240,000,000		—		240,000,000				—
Total Contractual Obligations	$	328,100,000	$	—	$	328,100,000	$	—	$	—

We have entered into certain contracts under which we have material future commitments. On April 5, 2012, we entered into the Investment Advisory Agreement with SIC Advisors in accordance with the 1940 Act. The Investment Advisory Agreement became effective as of April 17, 2012, the date that we met the minimum offering requirement. Pursuant to the 1940 Act, the initial term of the Investment Advisory Agreement was for two years from its effective date, with one-year renewals subject to approval by our board of directors, a majority of whom must be independent directors. On April 4, 2019, the board of directors approved the renewal of the Investment Advisory Agreement for an additional one-year term at an in-person meeting. SIC Advisors serves as our investment adviser in accordance with the terms of the Investment Advisory Agreement. Payments under our Investment Advisory Agreement in each reporting period consist of (i) a management fee equal to a percentage of the value of our gross assets and (ii) an incentive fee based on our performance.

On April 5, 2012, we entered into the Administration Agreement with Medley Capital LLC with an initial term of two years, pursuant to which Medley Capital LLC furnishes us with administrative services necessary to conduct our day-to-day operations. On April 4, 2019, the board of directors approved the renewal of the Administration Agreement for an additional one-year term at an in-person meeting. Medley Capital LLC is reimbursed for administrative expenses it incurs on our behalf in performing its obligations. Such costs are reasonably allocated to us on the basis of assets, revenues, time records or other reasonable methods. We do not reimburse Medley Capital LLC for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Medley Capital LLC.

If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under the investment advisory agreement and administration agreement. Any new investment advisory agreement would also be subject to approval by our stockholders.

Off-Balance Sheet Arrangements

On August 27, 2013, Arbor, a wholly-owned financing subsidiary of the Company, entered into a TRS with Citibank.

On September 29, 2017, Arbor entered into the Fifth Amended Confirmation Letter Agreement with Citibank. The Fifth Amended Confirmation Agreement reduced the maximum portfolio notional (determined at the time each such loan becomes subject to the TRS) from $300,000,000 to $180,000,000, through incremental reductions of $60,000,000 on October 3, 2017 and $20,000,000 on each of November 3, 2017, December 3, 2017 and January 3, 2018. The Fifth Amended Confirmation Agreement also ~~decreases~~decreased the interest rate payable to Citibank from LIBOR plus 1.65% per annum to LIBOR plus 1.60% per annum. Other than the foregoing, the Fifth Amended Confirmation Agreement did not change any of the other material terms of the TRS. On July 22, 2019 the TRS with Citibank was terminated.

The TRS with Citibank ~~enables~~enabled Arbor to obtain the economic benefit of the loans underlying the TRS, despite the fact that such loans ~~will~~were not be directly held or otherwise owned by Arbor, in return for an interest-type payment to Citibank. Accordingly, the TRS is analogous to Arbor utilizing leverage to acquire loans and incurring an interest expense to a lender.

Transactions in TRS contracts during the three and nine months ended ~~June~~September 30, 2019 and 2018 were ~~$0.1 million in realized losses and $0.1 million in net change in unrealized depreciation, which are recorded on the Consolidated Statements of Operations.~~as follows:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019			2018
Interest income and settlement from TRS portfolio	$	—	$	1,463,986		$	309,388		$	4,123,660
Traded gains/(loss) on TRS loan sales	—		(364,450		)	(9,632,904		)	(2,589,178		)
Net realized gains/(loss) on TRS portfolio	$	—	$	1,099,536		$	(9,323,516	)	$	1,534,482

Net change in unrealized appreciation/(depreciation) on TRS portfolio	$	—	$	735,874		$	6,524,904		$	3,370,529

~~Transactions in TRS contracts during the three months ended June~~

As of September 30, ~~2018 were $1.0 million in realized losses and $0.3 million in net change in unrealized depreciation, which are recorded~~2019, there was no receivable due on the ~~Consolidated Statements of Operations.~~

~~Our derivative asset from Citibank, net of amounts available for offset under a master netting agreement as of June 30, 2019, was $0.0 million, which is~~total return swap recorded on the Consolidated Statements of Assets and ~~Liabilities as a receivable due on total return swap.~~Liabilities.

The volume of the Company’s derivative transactions for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 were as follows:

Three Months Ended
June 30, Six Months Ended
June 30,
2019 2018 2019 2018
Average notional amount of contracts ⁽¹⁾
$ —
$ 168,753,875
$ 30,563,576
$ 170,174,081



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Average notional amount of contracts ⁽¹⁾	$	—	$	168,753,875	$	12,225,430	$	170,174,081


(1)	Average notional amount is based on the average month end balances for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, which is representative of the volume of notional contract amounts held during each year.

On March 27, 2015, the Company and GALIC entered into a limited liability company operating agreement to co-manage Sierra JV. All portfolio and other material decisions regarding Sierra JV must be submitted to Sierra JV's board of managers, which is comprised of four members, two of whom are selected by the Company and the other two are selected by GALIC. The Company has concluded that it does not operationally control Sierra JV. As the Company does not operationally control Sierra JV, it does not consolidate the operations of Sierra JV within the consolidated financial statements. As a practical expedient, the Company uses NAV to determine the fair value of its investment in Sierra JV; therefore, this investment has been presented as a reconciling item within the fair value hierarchy (see Note 4). As of ~~June~~September 30, 2019, there was $204.9 million outstanding under the JV Facility and the Sierra JV had total assets of ~~$295.9~~$289.0 million. As of ~~June~~September 30, 2019, Sierra JV’s portfolio was comprised of 100.0% of senior secured first lien term loans to 6061 different portfolio companies with one portfolio company on non-accrual status. As of December 31, 2018, Sierra JV’s portfolio was comprised of 100% of senior secured first lien term loans to 58 different portfolio companies with one portfolio company on non-accrual status.

On August 4, 2015, Sierra JV entered into a senior secured revolving credit facility the ("JV Facility") led by Credit Suisse, AG ("CS") with commitments of $100 million subject to certain leverage and borrowing base restrictions. On December 29, 2015, the JV Facility was amended and the total commitments were increased to $135 million. On March 30, 2017, the Company amended the JV Facility previously administered by CS and facilitated the assignment of all rights and obligations of CS under the JV Facility to Deutsche Bank AG, New York Branch, ("DB") and increased the total loan commitments to $240 million. On May 26, 2017 commitments to the JV facility were increased from $240 million to $250 million. On June 28, 2019, the JV Facility reinvestment period was further extended to October 28, 2019. ~~The~~On October 28, 2019, the JV Facility ~~bears~~reinvestment period was further extended from October 28, 2019 to March 31, 2020 while the interest ~~at a~~rate was modified from bearing an interest rate of LIBOR (with no minimum) ~~plus~~+ 2.50% per annum ~~and the stated~~to LIBOR (with no minimum) + 2.75% per annum.The final maturity date is March 30, ~~2022.~~2022 and is secured substantially by all of the SPV's assets, subject certain exclusions set forth in the Credit Facility. As of ~~June~~September 30, 2019 and December 31, 2018, there was $204.9 million outstanding under the JV Facility.

We have determined that the Sierra JV is an investment company under ASC 946, however in accordance with such guidance, we will generally not consolidate its investment in a company other than a wholly owned investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we do not consolidate our interest in the Sierra JV.

Distributions

We have elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes, as a RIC under Subchapter M of the Code. To maintain RIC tax treatment, we must, among others things, distribute at least 90% of our net ordinary income and net short-term capital gains in excess of net long-term capital losses, if any, to our stockholders. In order to avoid certain U.S. federal excise taxes imposed on RICs, we must distribute during each calendar year an amount at least equal to the sum of: (i) 98% of our ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the one-year period generally ending on October 31 of the calendar year (unless an election is made by us to use our taxable year) and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax.

While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be distributed to avoid entirely the imposition of the tax. In that event, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.

We currently intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. We can offer no assurance that we will continue to achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we may be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.

Subject to our board of directors’ discretion and applicable legal restrictions, we expect to authorize and pay monthly distributions to our stockholders. Any distributions to our stockholders will be declared out of assets legally available for distribution. We expect to continue making monthly distributions unless our results of operations, our general financial condition, general economic conditions, or other factors prohibit us from doing so. From time to time, but not less than quarterly, we will review our accounts to determine whether distributions to our stockholders are appropriate. We have not established limits on the amount of funds we may use from available sources to make distributions. From the commencement of our offering through September 30, 2016, a portion of our distributions were comprised in part of expense support payments made by SIC Advisors that may be subject to repayment by us within three years of the date of such support payment. The purpose of this arrangement was to cover distributions to stockholders so as to ensure that the distributions did not constitute a return of capital for GAAP purposes. In the future, we may have distributions which could be characterized as a return of capital. Such distributions are not based on our investment performance and can only be sustained if we achieve positive investment performance in future periods and/or SIC Advisors elects to make expense support payments under an expense support agreement. Any future reimbursements to SIC Advisors will reduce the net investment income that may otherwise be available for distribution to stockholders. There can be no assurance that we will achieve the performance necessary to sustain our distributions or that we will be able to pay distributions at all. SIC Advisors has no obligation to enter into a renewed expense support agreement.

Our distributions may exceed our earnings, which we refer to as a return of capital, especially during the period before we have invested substantially all of the proceeds of our offering. As a result, a portion of the distributions we make may represent a return of capital. Our use of the term “return of capital” merely means distributions in excess of our earnings and as such may constitute a return on your individual investments and does not mean a return on capital. Therefore stockholders are advised that they should be aware of the differences with our use of the term “return of capital” and “return on capital.”



Record Date	Payment Date	Amount per share
January 15 and 31, 2018	January 31, 2018	0.02667
February 15 and 28, 2018	February 28, 2018	0.02667
March 15 and 30, 2018	March 30, 2018	0.02667
April 13 and 30, 2018	April 30, 2018	0.02667
May 15 and 31, 2018	May 31, 2018	0.02667
June 15 and 29, 2018	June 29, 2018	0.02667
July 13 and 31, 2018	July 31, 2018	0.02667
August 15 and 31, 2018	August 31, 2018	0.02667
September 14 and 28, 2018	September 28, 2018	0.02667
October 15 and 31, 2018	October 31, 2018	0.02667
November 15 and 30, 2018	November 30, 2018	0.02667
December 14 and 31, 2018	December 31, 2018	0.02667
January 25, 2019	January 31, 2019	0.05334
February 11, 2019	February 28, 2019	0.05334
March 11, 2019	March 29, 2019	0.05334
April 29, 2019	April 30 2019	0.05334
May 30, 2019	May 31, 2019	0.05334



June 27, 2019	June 28, 2019	0.05334
July 30, 2019	July 31, 2019	0.05334
August 29, 2019	August 30, 2019	0.05334
September 27, 2019	September 30, 2019	0.05334

We have adopted an “opt in” distribution reinvestment plan pursuant to which common stockholders may elect to have the full amount of any cash distributions reinvested in additional shares of our common stock. As a result, if we declare a cash distribution, stockholders that have “opted in” to our distribution reinvestment plan will have their distribution automatically reinvested in additional shares of our common stock rather than receiving cash dividends. Stockholders who receive distributions in the form of shares of common stock will be subject to the same federal, state and local tax consequences as if they received cash distributions.

Each year a statement on Internal Revenue Service Form 1099-DIV (or such successor form) identifying the source of the distribution (i.e., paid from ordinary income, paid from net capital gain on the sale of securities, or a return of capital) will be mailed to our stockholders. The tax basis of shares must be reduced by the amount of any return of capital distributions, which will result in an increase in the amount of any taxable gain (or a reduction in any deductible loss) on the sale of shares.

Related Party Transactions

On October 19, 2011, SIC Advisors entered into a subscription agreement to purchase 110.80 shares of common stock for cash consideration of $1,000. The consideration represented $9.025 per share.

On April 17, 2012, SIC Advisors purchased 1,108,033.24 shares of our common stock for aggregate gross proceeds of $10,000,000. The consideration represented $9.025 per share.

We have entered into an Investment Advisory Agreement with SIC Advisors in which our senior management holds an equity interest and were party to the Expense Support Agreement through December 31, 2016. Members of our senior management also serve as principals of other investment managers affiliated with SIC Advisors that do, and may in the future, manage investment funds, accounts or other investment vehicles with investment objectives similar to ours.

On August 9, 2018, the Company entered into the MCC Merger Agreement pursuant to which MCC will, on the terms and subject to the conditions set forth in the MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC Merger Agreement. Under the MCC Merger, each share of MCC’s common stock issued and outstanding immediately prior to the MCC Merger effective time, other than shares of MCC common stock held by MCC, the Company or their respective wholly owned subsidiaries, will be converted into the right to receive 0.8050 shares of the Company’s common stock. In addition, on August 9, 2018, the Company entered into the MDLY Merger Agreement, pursuant to which MDLY will on the terms and subject to the conditions set forth in the MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY Merger Agreement. In the MDLY Merger, each share of MDLY Class A common stock, issued and outstanding immediately prior to the MDLY Merger effective time, other than Dissenting Shares (as defined in the MDLY Merger Agreement) and shares of MDLY Class A common stock held by MDLY, the Company or their respective wholly owned subsidiaries, will be converted into the right to receive (i) 0.3836 shares of the Company’s common stock; plus (ii) cash in an amount equal to $3.44 per share. In addition, MDLY’s stockholders will have the right to receive certain dividends and/or other payments. The Mergers will occur simultaneously and, as a result of the foregoing, the investment management function relating to the operation of the Company, as the surviving company in the Mergers, will be internalized.

The Mergers are subject to the satisfaction or waiver of closing conditions, including, but not limited to: (a) the approval of the MCC Merger and the MDLY Merger by the Company’s stockholders by the affirmative vote of at least a majority of all its stockholders, the approval of the adoption of the MCC Merger Agreement by MCC’s stockholders, and the approval of the adoption of the MDLY Merger Agreement by MDLY’s stockholders, voting separately at their respective special meetings; (b) the receipt of an exemptive order from the SEC, an exemptive application for which has been filed by the Company, MCC and MDLY and certain of their subsidiaries; and (c) the approval by the SBA relating to the transfer of MCC’s Small Business Investment Company

license. No assurance can be given that such SEC exemptive order will be issued or SBA approval will be received or that any of the other closing conditions will be satisfied or waived.

We have entered into a license agreement with SIC Advisors under which SIC Advisors has agreed to grant us a non-exclusive, royalty-free license to use the name “Sierra” for specified purposes in our business. Under the license agreement, we will have a right to use the “Sierra” name, subject to certain conditions, for so long as SIC Advisors or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we will have no legal right to the “Sierra” name.

Management Fee

We pay SIC Advisors a fee for its services under the Investment Advisory Agreement. The fee consists of two components: a base management fee and an incentive fee.

The base management fee is calculated at an annual rate of 1.75% of our gross assets and is payable quarterly in arrears. The incentive fee consists of:

An incentive fee on net investment income (“subordinated incentive fee on income”) is calculated and payable quarterly in arrears and is based upon pre-incentive fee net investment income for the immediately preceding quarter. No subordinated incentive fee on income is payable in any calendar quarter in which pre-incentive fee net investment income does not exceed a quarterly return to stockholders of 1.75% per quarter on our net assets at the end of the immediately preceding fiscal quarter, or the preferred quarterly return. All pre-incentive fee net investment income, if any, that exceeds the preferred quarterly return, but is less than or equal to 2.1875% of net assets at the end of the immediately preceding fiscal quarter in any quarter, will be payable to SIC Advisors. We refer to this portion of our subordinated incentive fee on income as the catch up. It is intended to provide an incentive fee of 20% on pre-incentive fee net investment income when pre-incentive fee net investment income exceeds 2.1875% of net assets at the end of the immediately preceding quarter in any quarter. For any quarter in which our pre-incentive fee net investment income exceeds 2.1875% of net assets at the end of the immediately preceding quarter, the subordinated incentive fee on income shall equal 20% of the amount of pre-incentive fee net investment income, because the preferred return and catch up will have been achieved.

A capital gains incentive fee will be earned on realized investments and shall be payable in arrears as of the end of each calendar year during which the Investment Advisory Agreement is in effect. If the Investment Advisory Agreement is terminated, the fee will become payable as of the effective date of such termination. The capital gains incentive fee is based on our realized capital gains on a cumulative basis from inception, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, which we refer to as “net realized capital gains.” The capital gains incentive fee equals 20% of net realized capital gains, less the aggregate amount of any previously paid capital gains incentive fee.

Under the terms of the Investment Advisory Agreement, SIC Advisors bears all organizational and offering expenses on our behalf. Since June 2, 2014, the date that we raised $300 million in gross proceeds in connection with the sale of shares of our common stock, SIC Advisors was no longer obligated to bear, pay or otherwise be responsible for any ongoing organizational and offering expenses on our behalf, and we have been responsible for paying or otherwise incurring all such organizational and offering expenses. Pursuant to the terms of the Investment Advisory Agreement, we have agreed to reimburse SIC Advisors for any such organizational and offering expenses incurred by SIC Advisors not to exceed 1.25% of the gross subscriptions raised by us over the course of the offering period, which was initially scheduled to terminate two years from the initial offering date, unless extended. On July 2, 2018, the Company’s board of directors determined to terminate the Company’s offering effective as of July 31, 2018. Notwithstanding the foregoing, in the event that organizational and offering expenses, together with sales commissions, the dealer manager fee and any discounts paid to members of the Financial Industry Regulatory Authority, exceed 15% of the gross proceeds from the sale of shares of our common stock pursuant to our registration statement or otherwise at the time of the completion of our offering, then SIC Advisors shall be required to pay or, if already paid by us, reimburse us for amounts exceeding such 15% limit.

Critical Accounting Policies

This discussion of our expected operating plans is based upon our expected consolidated financial statements, which will be prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of these consolidated financial statements will require our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. In addition to the discussion below, we will describe our critical accounting policies in the notes to our future consolidated financial statements.

Valuation of Investments

We apply fair value accounting to all of its financial instruments in accordance with the 1940 Act and ASC Topic 820 — Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework used to measure fair value and requires disclosures for fair value measurements. In accordance with ASC 820, we have categorized its financial instruments carried at fair value, based on the priority of the valuation technique, into a three-level fair value hierarchy as identified below and discussed in Note 4.

Level 1 — Quoted prices are available in active markets for identical investments as of the reporting date. Publicly listed equities and publicly listed derivatives will be included in Level 1. In addition, securities sold, but not yet purchased and call options will be included in Level 1. We will not adjust the quoted price for these investments, even in situations where we hold a large position and a sale could reasonably affect the quoted price.

Level 2 — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. In certain cases, debt and equity securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices, market transactions in comparable investments, and various relationships between investments. Investments which are generally expected to be included in this category include corporate bonds and loans, convertible debt indexed to publicly listed securities, and certain over-the-counter derivatives.

Level 3 — Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant judgment or estimation. Investments that are expected to be included in this category are our private portfolio companies.

Fair value is a market-based measure considered from the perspective of the market participant who holds the financial instrument rather than an entity specific measure. Therefore, when market assumptions are not readily available, our own assumptions are set to reflect those that management believes market participants would use in pricing the financial instrument at the measurement date.

Investments for which market quotations are readily available are valued at such market quotations, which are generally obtained from an independent pricing service or multiple broker-dealers or market makers. We weight the use of third-party broker quotes, if any, in determining fair value based on our understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer. However, debt investments with remaining maturities within 60 days that are not credit impaired are valued at cost plus accreted discount, or minus amortized premium, which approximates fair value. Investments for which market quotations are not readily available are valued at fair value as determined by our board of directors based upon input from management and third party valuation firms. Because these investments are illiquid and because there may not be any directly comparable companies whose financial instruments have observable market values, these loans are valued using a fundamental valuation methodology, consistent with traditional asset pricing standards, that is objective and consistently applied across all loans and through time.

We use third-party valuation firms to assist the board of directors in the valuation of its portfolio investments. The valuation reports generated by the third-party valuation firms consider the evaluation of financing and sale transactions with third parties, expected cash flows and market based information, including comparable transactions, performance multiples, and movement in yields of debt instruments, among other factors. Based on market data obtained from the third-party valuation firms, we use a combined market yield analysis and an enterprise model of valuation. In applying the market yield analysis, the value of our loans are determined based upon inputs such as the coupon rate, current market yield, interest rate spreads of similar securities, the stated value of the loan, and the length to maturity. In applying the enterprise model, we use a waterfall analysis which takes into account the specific capital structure of the borrower and the related seniority of the instruments within the borrower’s capital structure into consideration. To estimate the enterprise value of the portfolio company, we weigh 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 investments 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. For non-performing investments, we may estimate the liquidation or collateral value of the portfolio company’s assets and liabilities using an expected recovery model. We may estimate the fair value of warrants based on a model such as the Black-Scholes model or simulation models or a combination thereof.

We undertake a multi-step valuation process each quarter when valuing investments for which market quotations are not readily available, as described below:

our quarterly valuation process begins with each portfolio investment being initially valued by the valuation professionals;

conclusions are then documented and discussed with senior management; and

an independent valuation firm engaged by our board of directors prepares an independent valuation report for approximately one third of the portfolio investments each quarter on a rotating quarterly basis on non fiscal year-end quarters, such that each of these investments will be valued by an independent valuation firm at least twice per annum when combined with the fiscal year-end review of all the investments by independent valuation firms, exclusive of the TRS underlying portfolio.

In addition, all of our investments are subject to the following valuation process:

management reviews preliminary valuations and their own independent assessment;

the audit committee of our board of directors reviews the preliminary valuations of senior management and independent valuation firms; and

our board of directors discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of SIC Advisors, the respective independent valuation firms and the audit committee.

Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

The valuation procedures described are generally applied to the loans underlying the TRS, except that such assets are not reviewed by independent third party valuation firms. We will value the TRS in accordance with the TRS Agreement. Pursuant to the TRS Agreement, the value of the TRS will be based on the increase or decrease in the value of the assets underlying the TRS, together with accrued interest income, interest expense and certain other expenses incurred under the TRS. The assets underlying the TRS will be valued by Citibank. Citibank will base its valuation on the indicative bid prices provided by an independent third-party pricing service. Bid prices reflect the highest price that market participants may be willing to pay. These valuations are sent to us for review and testing. Our board of directors will review and approve the value of the TRS, as well as the value of the assets underlying the TRS, on a quarterly basis as part of their quarterly determination of NAV. To the extent our board of directors has any questions or concerns regarding the valuation of the assets underlying the TRS, such valuation will be discussed or challenged pursuant to the terms of the TRS. For additional disclosures on the TRS, see “Off-Balance Sheet Arrangements.”

Our investments in subordinated notes are carried at fair value, which is based on a discounted cash flow model. The discounted cash flow model models both the underlying collateral (“assets”) and the liabilities of the CLO capital structure. The discounted cash flow model uses a set of assumptions including projected default rates, recovery rates, reinvestment rates and prepayment rates in order to arrive at estimated cash flows of the assets. The discounted cash flow model distributes the asset cash flows to the liability structure based on the payment priorities and discounts them back using appropriate market discount rates based on discount rates for comparable CLOs. The assumptions are based on available market data as well as management estimates. Additional data is used to validate the results from the discounted cash flow method, such as analysis of relevant data observed in the CLO market, review of quotes, where available, recent acquisitions and observable transactions in the subordinated notes, among other factors.

Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt securities with contractual PIK interest, which represents contractual interest accrued and added to the principal balance, we generally will not accrue PIK interest for accounting purposes if the portfolio company valuation indicates that such PIK interest is not collectible. We do not accrue as a receivable interest on loans and debt securities or accounting purposes if we have reason to doubt our ability to collect such interest. Original issue discounts, market discounts, or premiums are accreted or amortized using the effective interest method as interest income. We record prepayment premiums on loans and debt securities as fee income. Dividend income, if any, is recognized on an accrual basis to the extent that we expect to collect such amount.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Payment-in-Kind Interest

We have investments in our portfolio that contain a PIK interest provision. Any PIK interest is added to the principal balance of such investments and is recorded as income, if the portfolio company valuation indicates that such PIK interest is collectible. In order to maintain our tax treatment as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends, even if we have not collected any cash.

Organizational and Offering Expenses

We have been responsible for all ongoing organizational and offering expenses since June 2, 2014 until the termination of the Company's offering effective as of July 31, 2018.

U.S. Federal Income Taxes

We have elected, and intend to qualify annually, to be treated for U.S. federal income tax purposes as a RIC under Subchapter M of the Code. As a RIC, we generally will not have to pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that we distribute to our stockholders from our tax earnings and profits. To obtain and maintain our RIC tax treatment, we must, among other things, meet specified source-of-income and asset diversification requirements and distribute annually at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any.

Recent Developments

On July 25, 2019, the Company entered into Amendment No. 2 to the Revolving Credit Agreement (the “Amendment”), with certain lenders party thereto, ING Capital LLC, as administrative agent (the “Administrative Agent”), and, solely with respect to Section 2.10 of the Amendment, SIC AAR LLC, SIC Investment Holdings LLC and Sierra Management, Inc., as subsidiary guarantors. The Amendment amends certain provisions of the Revolving Credit Agreement (as amended by Amendment No. 1, the “Prior Facility” and, as further amended by Amendment No. 2, the “Facility”) to, among other things, (i) reduce the size of the commitments thereunder from $220.0 million to $215.0 million, (ii) extend the Revolver Termination Date (as defined in the Prior Facility) from August 12, 2019 to March 31, 2020 and (iii) extend the Maturity Date (as defined in the Prior Facility) from August 12, 2020 to March 31, 2021. As of July 25, 2019, total commitments under the Facility are $215.0 million.

~~On July 28,~~October 29, 2019, our board of directors declared a series of monthly distributions for ~~July, August~~October, November and ~~September~~December 2019 in the amount of $0.05334 per share. Stockholders of record as of each respective monthly record date will be entitled to receive the distribution. Below are the details for each respective distribution:



Record Date	Payment Date	Amount per share
~~July~~October 30, 2019	~~July~~October 31, 2019	$0.05334
~~August 29,~~November 28, 2019	~~August 30,~~November 29, 2019	0.05334
~~September 27,~~December 30, 2019	~~September 30,~~December 31, 2019	0.05334

plus (ii) cash in an amount equal to $2.96 per share. In addition, in the MDLY Merger, each share of MDLY’s Class A common stock issued and outstanding immediately prior to the MDLY Merger effective time, other than the Excluded MDLY Shares and the Dissenting Shares, held, immediately prior to the MDLY Merger effective time, by holders of the issued and outstanding limited liability company interests of Medley LLC (the “Medley LLC Units” and, holders of the Medley LLC Units at any time on or after July 29, 2019, the “Unitholders”) will be exchanged for (i) 0.2072 shares of the Company’s common stock; plus (ii) cash in an amount equal to $2.66 per share.

Notwithstanding the suspension of the share repurchase program and, in connection with the Amended and Restated MCC Merger Agreement, our board of directors approved the repurchase of shares of our common stock from our stockholder who have requested repurchases in connection with such stockholder’s death or disability.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of ~~June~~September 30, 2019, ~~93.0%~~95.3% of our portfolio investments (based on fair value) paid floating interest rates, while ~~7.0%~~4.7% paid fixed interest rates and ~~10.6%~~9.7% were non-income producing investments while ~~89.4%~~90.3% were income producing investments. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we hold and to declines in the value of any fixed rate investments we hold. In addition, a rise in interest rates may increase the likelihood that a portfolio company defaults on a loan. However, many of our variable rate investments provide for an interest rate floor, which may prevent our interest income from increasing until benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the subordinated incentive fee on income under the Investment Advisory Agreement we have entered into with SIC Advisors, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to SIC Advisors with respect to our increased pre-incentive fee net investment income.

Under the terms of the TRS between Arbor and Citibank, Arbor will pay fees to Citibank at a floating rate based on LIBOR in exchange for the right to receive the economic benefit of a portfolio of assets having a maximum notional amount of $180 million. Our interest expense will also be affected by changes in the published LIBOR rate in connection with our credit facilities. We expect any future credit facilities, total return swap agreements or other financing arrangements that we or any of our subsidiaries may enter into will also be based on a floating interest rate. As a result, we are subject to risks relating to changes in market interest rates. In periods of rising interest rates, when we or our subsidiaries have debt outstanding or financing arrangements in effect, our cost of funds would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.

In addition, any investments we make that are denominated in a foreign currency will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved.

Based on our Consolidated Statement of Assets and Liabilities as of ~~June~~September 30, 2019, the following table shows the approximate annual impact on the change in net interest income of hypothetical base rate changes in interest rates, assuming no changes in our investment portfolio and capital structure:


	Change in									Change in
Basis point increase/(decrease)	Interest Income ⁽¹⁾			Interest Expense			Net Interest Income			Interest Income ⁽¹⁾			Interest Expense			Net Interest Income
300	$	19,305,160		$	9,843,000		$	9,462,160		$	17,505,047		$	9,843,000		$	7,662,047
200	12,870,106			6,562,000			6,308,106			11,670,031			6,562,000			5,108,031
100	6,435,053			3,281,000			3,154,053			5,835,016			3,281,000			2,554,016
(100)	(6,435,053		)	(3,281,000		)	(3,154,053		)	(5,835,016		)	(3,281,000		)	(2,554,016		)
(200)	(8,757,358		)	(6,562,000		)	(2,195,358		)	(6,121,137		)	(6,562,000		)	440,863
(300)	(8,757,358		)	(7,867,838		)	(889,520		)	(6,121,137		)	(6,613,282		)	492,145


(1)	Assumes no defaults or prepayments by portfolio companies over the next twelve months.

We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. During the three months ended ~~June~~September 30, 2019, we did not engage in interest rate hedging activities.

In addition, we may have risk regarding portfolio valuation. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies-Valuation of Investments” and “Item 1A. Risk Factors.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on that evaluation, as of the end of the period covered by this quarterly report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. Other Information

Item 1. Legal Proceedings

From time to time, we are involved in various legal proceedings, lawsuits and claims incidental to the conduct of our business. Our businesses are also subject to extensive regulation, which may result in regulatory proceedings against us. Except as described below, we are not currently party to any material legal proceedings.

On January 25, 2019, two purported class actions were commenced in the Supreme Court of the State of New York, County of New York, by alleged stockholders of Medley Capital Corporation, captioned, respectively, Helene Lax v. Brook Taube, et al., Index No. 650503/2019, and Richard Dicristino, et al. v. Brook Taube, et al., Index No. 650510/2019 (together with the Lax Action, the “New York Actions”). Named as defendants in each complaint are Brook Taube, Seth Taube, Jeffrey Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, John E. Mack, Mark Lerdal, Richard T. Allorto, Jr., MCC, MDLY, the Company and Merger Sub. The complaints in each of the New York Actions allege that the individuals named as defendants breached their fiduciary duties in connection with the proposed merger of MCC with and into the Company, and that the other defendants aided and abetted those alleged breaches of fiduciary duties. Compensatory damages in unspecified amounts are sought. On February 27, 2019, the Court entered a stipulated scheduling order requiring that defendants respond to the complaints 45 days following the later of (a) the stockholder vote on the proposed merger and (b) plaintiffs’ filing of a consolidated, amended complaint. A preliminary conference is scheduled to take place on ~~September 24,~~November 19, 2019. The defendants believe the claims asserted in the New York Actions are without merit and they intend to defend these lawsuits vigorously. At this time, we are unable to determine whether an unfavorable outcome from these matters is probable or remote or to estimate the amount or range of potential loss, if any.

Set forth below is a description of the Decision (as defined below), which should be read in the context of the impact that the Decision and corresponding ~~Stipulation~~Settlement (as defined below) ~~may have on the Company with respect to any potential amendment to the Merger Agreements.~~.

On February 11, 2019, a ~~putative~~purported stockholder class action was commenced in the Court of Chancery of the State of Delaware by FrontFour Capital Group LLC and FrontFour Master Fund, Ltd. ~~(collectively,~~(together, “FrontFour”)~~. The action, as consolidated, is~~, captioned In re Medley Capital Corporation Stockholder Litigation, C.A. 2019-0100-KSJM (the “FrontFour Action”), against defendants Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, the Company, MCC, MCC Advisors LLC, Medley Group LLC, and Medley ~~LLC (the “Class Action”).~~LLC. The complaint, as amended on February 12, 2019, alleged that ~~MCC’s directors (directors (Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, and Arthur S. Ainsberg)~~the individuals named as defendants breached their fiduciary duties to MCC stockholders in connection with the MCC Merger, and that MDLY, the Company, MCC Advisors LLC, Medley Group LLC, and Medley LLC aided and abetted those alleged breaches of fiduciary duties. OnThe complaint sought to enjoin the vote of MCC stockholders on the proposed merger and enjoin enforcement of certain provisions of the MCC Merger Agreement. The Court held a trial on the plaintiffs’ claims on March ~~11,~~6-7, 2019 ~~following a two-day trial, the Court~~and issued a Memorandum Opinion (the “Decision”) ~~denying~~on March 11, 2019. The Court denied the FrontFour’s requests to (i) permanently enjoin the MCC Merger and (ii) require MCC to conduct a “shopping process” for MCC on terms proposed by FrontFour in its complaint. The Court held that MCC’s directors breached their fiduciary duties in entering into the MCC Merger, but rejected FrontFour’s claim that ~~Sierra~~the Company aided and abetted those breaches of fiduciary duties. The Court ordered the defendants to issue corrective disclosures consistent with the Decision, and enjoined a vote of MCC stockholders on the MCC Merger until such disclosures have been made and stockholders have had the opportunity to assimilate this information. On March 20, 2019, another purported stockholder class action was commenced by Stephen Altman against Brook Taube, Seth Taube, Jeff Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, Mark Lerdal, and John E. Mack in the Court of Chancery of the State of Delaware, captioned Altman v. Taube, Case No. 2019-0219 (the ~~“Altman~~

“Altman Action”). The complaint alleged that the defendants breached their fiduciary duties to stockholders of MCC in connection with the vote of MCC stockholders

on the proposed mergers. On April 8, 2019, the Court granted a stipulation consolidating the ~~Class~~FrontFour Action and the Altman Action, designating the amended complaint in the ~~Class~~FrontFour Action as the operative complaint, and designating the plaintiffs in the ~~Class~~FrontFour Action and their counsel the lead plaintiffs and lead plaintiffs’ counsel, respectively.

On April 15, 2019, certain parties ~~in the Class Action~~ reached agreement on the principal terms of a settlement of the ~~Class~~FrontFour Action, which ~~are~~were contained in a ~~binding~~ term sheet, dated April 15, 2019 (the “Settlement Term Sheet”). On July 29, 2019, MCC entered into a Stipulation of Settlement (and, as amended, on August 8, 2019, the “Stipulation”) by and among Brook Taube, Seth Taube, Jeff Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, MCC, MCC Advisors LLC, Medley LLC, and Medley Group LLC (the “Medley Parties”), on the one hand, and FrontFour, on behalf of itself and a class of similarly situated stockholders of MCC, on the other hand, in connection with the ~~Class~~FrontFour Action.

The Stipulation provides for the settlement of all claims brought against the Medley Parties in the ~~Class~~FrontFour Action. Under the Stipulation, MCC agreed to seek the agreement and/or consent of ~~Sierra~~the Company to effect certain amendments to (i) the MCC Merger Agreement and (ii) the MDLY Merger Agreement (together with the MCC Merger Agreement, the “Merger Agreements”), which have been reflected in the amended and restated Merger Agreements annexed to the Stipulation. The Stipulation also provides for, if the MCC Merger is consummated, ~~create~~the creation of a settlement fund, consisting of $17 million in cash and $30 million of ~~Sierra~~the Company's stock, with the number of shares of ~~Sierra~~the Company's stock to be calculated using the pro forma net asset value reported in the future proxy supplement describing the amendments to the MCC Merger Agreement, which will be distributed to eligible members of the Settlement Class (as defined in the Stipulation). Under the Stipulation, MDLY also consented to certain amendments to the Merger Agreements that have been reflected in the amended and restated Merger Agreements annexed to the Stipulation. In addition, in connection with the Stipulation, on July 29, 2019, MCC entered into a Governance Agreement with FrontFour Capital Group LLC, FrontFour Master Fund, Ltd., FrontFour Capital Corp., FrontFour Opportunity Fund, David A. Lorber, Stephen E. Loukas and Zachary R. George, pursuant to which, among other matters, FrontFour is subject to customary standstill restrictions and required to vote in favor of the MCC Merger under the ~~amended and restated~~Amended MCC Merger Agreement at a meeting of stockholders to approve the ~~amended and restated~~Amended MCC Merger Agreement.

The Stipulation also provides for mutual releases between and among FrontFour and the Settlement Class, on the one hand, and the Medley Parties, on the other hand, of all claims that were or could have been asserted in the ~~Class~~FrontFour Action. The Medley Parties will also release all claims arising out of or relating to the prosecution and settlement of the ~~Class~~FrontFour Action and all claims that were or could have been asserted (other than claims against the Highland Parties, as defined in the Stipulation) in the litigation pending in the United States District Court for the Southern District of New York captioned Medley Capital Corporation v. FrontFour Capital Group LLC, et al., No. 1:19-cv-02055-LTS (S.D.N.Y.) (the “Federal Action”), and FrontFour and the Settlement Class will release all claims arising out of or relating to the prosecution and settlement of the Federal Action.

The Stipulation further provides that MCC and FrontFour shall work together in good faith to agree to supplemental disclosures relating to the transactions contemplated by the Merger Agreements consistent with the Decision. The Stipulation is subject to the approval of the Court. On September 26, 2019, FrontFour filed a motion seeking an order approving the Stipulation, and also moved for the Court to award plaintiffs’ counsel attorneys’ fees in the amount of $22 million and expenses in the amount of $420,334.97 (the “Fee Application”). The Court ~~is expected~~held a hearing to ~~schedule a hearing~~consider the Stipulation and the Fee Application on October 24, ~~2019~~2019. The parties submitted supplemental briefing with respect to ~~consider~~ the ~~Stipulation.~~Stipulation on October 31, 2019. To date, the Court has not issued a decision with respect to the approval of the Stipulation or the Fee Application.

On April 5, 2019, a purported stockholder class action was commenced in the Supreme Court of the State of New York, County of New York, by alleged stockholders of Sierra Income Corporation, captioned Roger Anderson et al. v. Stephen R. Byers et al., Index No. 652006/2019. Named as defendants are Stephen R. Byers, Oliver T. Kane, Valerie Lancaster-Beal, Brook Taube, Seth Taube, Sierra Income Corporation, and Sierra Management, Inc. The complaint alleges that the individuals named as defendants breached their fiduciary duties to stockholders of Sierra Income Corporation in connection with the proposed mergers of Medley Capital Corporation with and into Sierra Income Corporation and Medley Management Inc. with and into Sierra Management, Inc., and that Brook Taube, Seth Taube, Sierra Income Corporation, and Sierra Management, Inc. aided and abetted those alleged breaches of fiduciary duties. The complaint seeks to enjoin the proposed mergers or, in the alternative, to recover money damages in an unspecified amount. On ~~July 16,~~October 9, 2019, the ~~parties filed~~Court entered a ~~Stipulation and Proposed Scheduling Order,~~stipulated scheduling order, which provides ~~subject to approval of the court,~~ that the plaintiff shall file an amended complaint by ~~September 17,~~November 8, 2019, and that the defendants’ time to respond to the amended complaint will be sixty days following the filing of the amended complaint. On November 8, 2019, pursuant to the scheduling order, the plaintiffs filed an amended complaint that reiterated the allegations of the original complaint and added allegations concerning the new mergers, including that the new mergers are “even more financially unfavorable to Sierra” than the old mergers and that under the new mergers, and that “Sierra would actually be paying more for MDLY . . . when all consideration is taken into account,” based on the erroneous allegation that Sierra is the party responsible for bearing the cost of the MCC settlement fund. Plaintiffs also allege that Brook Taube and Seth Taube

exercised control over Sierra and breached fiduciary duties owed to Sierra in that capacity. A preliminary conference is currently scheduled for ~~September 24,~~November 19, 2019. The defendants believe the claims asserted in the action are without merit and they intend to defend the lawsuit vigorously.

Item 1A. Risk Factors

In addition to other information set forth in this report, you should carefully consider the “Risk Factors” discussed in our annual report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on April 1, 2019, which could materially affect our business, financial condition and/or operating results. Other than the items disclosed below, there have been no material changes during the ~~six~~nine months ended ~~June~~September 30, 2019 to the risk factors discussed in “Item 1A. Risk Factors” of our annual report on Form 10-K. Additional risks or uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

Risks Relating to the Mergers

On August 9, 2018, the Company entered into the MCC Merger Agreement pursuant to which MCC would, on the terms and subject to the conditions set forth in the MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC Merger (the "Combined Company"). In addition, on August 9, 2018, the Company entered into the MDLY Merger Agreement, pursuant to which MDLY would, on the terms and subject to the conditions set forth in the MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY Merger, and MDLY’s existing asset management business would continue to operate as a wholly owned subsidiary of the Combined Company. On July 29, 2019, the Company entered into the Amended MCC Merger Agreement, pursuant to which MCC will, on the terms and subject to the conditions set forth in the Amended MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the MCC Merger. In addition, on July 29, 2019, the Company entered into the Amended MDLY Merger Agreement, pursuant to which the Company will, on the terms and subject to the conditions set forth in the Amended MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the MDLY Merger. For more information, please refer to the Registration Statement on Form N-14 that includes a joint proxy statement of the Company, MCC, and MDLY and, with respect to the Company, constitutes a prospectus, which was first mailed or otherwise delivered to stockholders of the Company, MCC, and MDLY on or about December 21, 2018 (the “Joint Proxy Statement/Prospectus”), as well as the amendment to the Joint Proxy Statement/Prospectus that the Company, MCC, and MDLY intends to file with the SEC and mail to their respective stockholders.

~~There~~The completion of the Mergers is subject to several conditions, including, with respect to the MCC Merger, court approval of the Settlement.There can be no assurances when or if the Mergers will be completed.

Although the Company, MCC and MDLY expect to complete the Mergers or the MDLY Merger, as applicable, as early as the fourth quarter of 2019, there can be no assurances as to the exact timing of completion of MCC Merger and/or the ~~Mergers, that both Mergers will be completed,~~MDLY Merger, as applicable, or that the Mergers will be completed at all. The completion of the Mergers or the MDLY Merger, as applicable, is subject to numerous conditions, including, among others, the continued effectiveness of the Registration Statement on Form N-14; the approval of our common stock (including the Settlement Shares and the shares of our common stock to be issued in the ~~Mergers)~~Mergers or the MDLY Merger, as applicable) for listing on the NYSE; receipt of requisite approvals of each of our stockholders, MCC’s stockholders, and MDLY’s stockholders; receipt of required regulatory approvals, including from the SEC (including necessary exemptive relief to consummate the ~~merger transactions)~~Mergers or the MDLY Merger, as applicable), approval by the Court of Chancery of the State of Delaware of the Stipulation of Settlement in connection with the consolidated actions under caption of In re Medley Capital Corporation Stockholder Litigation, C.A. No. 2019-0100-KSJM, any necessary approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, amended, and, if applicable, state securities regulators; ~~confirmation by~~here having been no rescission of the ~~SEC~~receipt of confirmation that Merger Sub, as the ~~successor to MDLY~~survving company in the MDLY Merger, ~~will~~ be treated as a portfolio investment of the Combined Company ~~following~~or the ~~consummation of the~~ Sierra/MDLY ~~Merger~~Company, as applicable, and reflected in the Company’s consolidated financial statements at fair value for accounting purposes (i.e., not consolidated into the financial statements of the ~~Company)~~Combined Company or the Sierra/MDLY Company, as applicable); the relevant parties having taken all actions reasonably required in order to keep existing indebtedness outstanding following the Mergers; receipt of necessary consents relating to joint ventures of the Company and MCC; receipt of a specified level of consents from third-party advisory clients of MDLY; with respect to the ~~MDLY~~MCC Merger, satisfaction (or appropriate waiver) of the conditions to closing of the ~~MCC~~MDLY Merger; and other customary closing conditions.

The Company, MCC and MDLY cannot assure their respective stockholders that the conditions required to complete the Mergers or the MDLY Merger, as applicable, will be satisfied or waived on the anticipated schedule, or at all. If the Mergers or the MDLY Merger, as applicable, are not completed, the resulting failure of the Mergers or the MDLY Merger, as applicable, could have a material adverse impact on the Company’s, MCC’s, and MDLY’s financial condition, results of operations, assets or business. In ~~accordance with the Amended MCC Merger Agreement, MCC’s special committee announced the commencement of the 60-day “go shop” period, the results of which are uncertain. In~~ addition, if the Mergers are not completed, the Company, MCC, and MDLY will have incurred substantial expenses for which no ultimate benefit will have been received, and if the MDLY Merger is completed and the MCC Merger is not consummated, MCC

will have incurred substantial expenses for which no ultimate benefit will have been received. See “- If the Mergers do not close, we will benefit from the expenses incurred in its pursuit” in the section entitled “Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2018. Moreover, if either the Amended MCC Merger Agreement or the Amended MDLY Merger Agreement is terminated under certain circumstances, the Company, MCC or MDLY may be obligated to pay the other party to the applicable merger agreement a termination fee. See “- Under certain circumstances, the Company, MCC or MDLY may be obligated to pay a termination fee upon termination of the Amended MCC Merger Agreement or the Amended MDLY Merger Agreement.” Any decision that our stockholders, MCC’s stockholders, and MDLY’s stockholder make should be made with the understanding that the completion of the Mergers may not happen as scheduled, or at all.

If the Mergers are or the MDLY Merger is, as applicable, completed, certain additional risks regarding the Combined Company or the Sierra/MDLY Company following the Mergers or the MDLY Merger, as applicable, may be presented.

We ~~may be targets of~~have been named as defendants in various securities class ~~action~~actions and derivative lawsuits and may be named in additional ones in the future, which ~~could~~has resulted in, and which may result in the future in, substantial costs and may delay or prevent the completion of the ~~Mergers.~~Mergers or the MDLY Merger, as applicable.

The Company is currently a defendant in the New York Actions, the Class Actions, and a purported stockholder class action in the Supreme Court of the State of New York, County of New York captioned Roger Anderson et al. v. Stephen R. Byers et al. The Company may be a target of additional securities class action and derivative lawsuits. Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements in an effort to enjoin the merger or seek monetary relief from such companies. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. We cannot predict the outcome of these lawsuits, or others, if any, nor can we predict the amount of time and expense that will be required to resolve any such litigation. An unfavorable resolution of any such litigation surrounding the Mergers could delay or prevent their consummation. In addition, the costs defending the litigation, even if resolved in our favor, could be substantial and such litigation could distract us from pursuing the consummation of the Mergers and other potentially beneficial business opportunities.

Under certain circumstances, we may be obligated to pay a termination fee upon termination of the Amended MCC Merger Agreement or the Amended MDLY Merger Agreement.

The Amended MCC Merger Agreement provides for the payment by the Company or MCC to the other party a termination fee of $6,000,000 in cash if the Amended MCC Merger Agreement is terminated by the Company or MCC under certain circumstances. The Amended MDLY Merger Agreement provides for the payment by the Company or MDLY to the other party a termination fee of $3,000,000 in cash if the Amended MDLY Merger Agreement is terminated by the Company or MDLY under certain circumstances.

The Amended MCC Merger Agreement limits our ability to actively pursue alternatives to the MCC Merger and to accept a superior proposal.

The Amended MCC Merger Agreement contains provisions that limit our ability to actively solicit, discuss or negotiate competing third-party proposals for strategic transactions. Although these provisions, which are customary for transactions of this type, allows us to engage in negotiations regarding, and to ultimately accept, a “Superior Proposal” (as such term is defined in the Amended MCC Merger Agreement), in certain circumstances, subject to the payment of a termination fee, such provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of us from considering or proposing a “Superior Proposal” to us, or might result in a potential competing acquiror proposing to pay a lower price to acquire us than it might otherwise have proposed to pay.

The Amended MDLY Merger Agreement limits each of our ability to actively pursue alternatives to the MDLY Merger and to accept a superior proposal.

The Amended MDLY Merger Agreement contains provisions that limit our ability to actively solicit, discuss or negotiate competing third-party proposals for strategic transactions. Although these provisions, which are customary for transactions of this type, allow us to engage in negotiations regarding, and to ultimately accept, a “Superior Proposal” (as such term is defined in the Amended MDLY Merger Agreement) in certain circumstances, subject to the payment of a termination fee, such provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of us from considering or proposing a “Superior Proposal” to us, or might result in a potential competing acquiror proposing to pay a lower price to acquire us than it might otherwise have proposed to pay.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In June 2013, we commenced a share repurchase program pursuant to which we conducted quarterly share repurchases, of up to 2.5% of the weighted average number of outstanding shares in any 3-month period or 10% of the weighted average number of outstanding shares in any 12-month period. The purpose of the share repurchase program was to allow stockholders to sell their shares back to us at a price equal to the most recently disclosed NAV per share of our common stock immediately prior to the date of repurchase. Shares were purchased from stockholders participating in the program on a pro rata basis. Unless our board of directors determined otherwise, the number of shares to be repurchased during any calendar year were limited to the proceeds received in association with the sale of shares of common stock under the distribution reinvestment plan. Notwithstanding the suspension of the share repurchase program and, in connection with the Amended MCC Merger Agreement, our board of directors approved the repurchase of shares of our common stock from our ~~stockholder~~stockholders who have requested repurchases in connection with such stockholder’s death or disability. See Note 13 to our consolidated financial statements for more information.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits



3.1		Articles of Incorporation of the Registrant
3.2		Articles of Amendment of the Registrant
3.3		Articles of Amendment and Restatement of the Registrant
3.4		Second Articles of Amendment and Restatement of the Registrant
3.5		Form of Articles Supplementary Electing to be Subject to Subtitle 8 of the Maryland General Corporation Law
3.6		Form of Bylaws of the Registrant
10.1		Form of Subscription Agreements
10.2		Second Amended and Restated Distribution Reinvestment Plan
10.3		Investment Advisory Agreement
10.4		Form of Second Amended and Restated Dealer Manager Agreement
10.5		First Amendment to Second Amended and Restated Dealer Manager Agreement
10.6		Form of Participating Broker-Dealer Agreement (Included as Exhibit A to the Form of Amended and Restated Dealer Manager Agreement)
10.7		Custody Agreement
10.8		Form of Administration Agreement
10.9		Form of License Agreement
10.10		Form of Escrow Agreement
10.11		ISDA 2002 Master Agreement, together with the Schedule thereto and Credit Support Annex to such Schedule, each dated as of August 27, 2013, by and between Arbor Funding LLC and Citibank, N.A.
10.12		Amended and Restated Loan Agreement, dated as of September 29, 2017, by and among Alpine Funding LLC as borrower, JPMorgan Chase Bank, National Association, as administrative agent, the Financing Providers from time to time party thereto, SIC Advisors LLC, as the portfolio manager, and the Collateral Administrator, Collateral Agent and Securities Intermediary party thereto
10.13		Fifth Amended and Restated Confirmation Letter Agreement, dated as of September 29, 2017, by and between Arbor Funding LLC and Citibank, N.A.
10.14		Amended and Restated Senior Secured Revolving Credit Agreement among the Company as borrower, the Lenders party thereto, and ING Capital LLC, as Administrative Agent, dated as of August 12, 2016



10.15		Amendment No. 1 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of February 8, 2019, by and among the Borrower, the lenders from time to time party thereto, the Administrative Agent and, solely for the purposes of Section 2.10 thereof, subsidiary guarantors party thereto
10.16		Amendment No. 2 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of July 25, 2019, by and among the Borrower, the lenders from time to time party thereto, the Administrative Agent and, solely for purposes of Section 2.10 thereof, subsidiary guarantors thereto
10.17		Guarantee, Pledge and Security Agreement among the Company, the Subsidiary Guarantors party thereto, ING Capital LLC, as Administrative Agent, each Financial Agent and Designated Indebtedness Holder party thereto and ING Capital LLC, as Collateral Agent, dated December 4, 2013
10.18		Control Agreement among the Company, ING Capital LLC, as collateral agent, and State Street Bank and Trust Company, as the Company’s Custodian, dated December 4, 2013
10.19		Loan Agreement, dated as of July 23, 2014, by and among Alpine Funding LLC, as company, JPMorgan Chase Bank, National Association, as administrative agent, the Financing Providers from time to time party thereto, SIC Advisors LLC, as the portfolio manager, and the Collateral Administrator, Collateral Agent and Securities Intermediary party thereto



10.20		Sale and Contribution Agreement, dated as of July 23, 2014, by and between Sierra Income Corporation, as seller, and Alpine Funding LLC, as purchaser
10.21		Portfolio Management Agreement, dated as of July 23, 2014, by and between Alpine Funding LLC, as borrower and SIC Advisors LLC, as portfolio manager
10.22		Amendment No. 1 to the Loan Agreement, dated as of July 23, 2014, by and among Alpine Funding LLC, as borrower, JPMorgan Chase Bank, National Association, as administrative agent, the Financing Providers from time to time party thereto, SIC Advisors LLC, as the portfolio manager, and the Collateral Administrator, Collateral Agent and Securities Intermediary party thereto
10.23		Limited Liability Company Operating Agreement of Sierra Senior Loan Strategy JV I LLC, dated March 27, 2015
10.24		Agreement and Plan of Merger, dated as of August 9, 2018, by and between Medley Capital Corporation and Sierra Income Corporation
10.25		Agreement and Plan of Merger, dated as of August 9, 2018, by and among Medley Management Inc., Sierra Income Corporation and Sierra Management, Inc.
10.26		Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019, by and between Medley Capital Corporation and Sierra Income Corporation
10.27		Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019, by and among Medley Management Inc., Sierra Income Corporation and Sierra Management, Inc.
11		Computation of Per Share Earnings (included in the notes to the financial statements contained in this report) *
12		Computation of Ratio of Earnings to Fixed Charges (included in the notes to the financial statements contained in this report) *
31.1		Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Dated: ~~August~~November 14, 2019	Sierra Income Corporation

	By	/s/ Seth Taube
		Seth Taube Chief Executive Officer (Principal Executive Officer)

	By	/s/ Richard T. Allorto, Jr.
		Richard T. Allorto, Jr. Chief Financial Officer (Principal Accounting and Financial Officer)

2910



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Average notional amount of contracts⁽¹⁾	$	—	$	168,753,875	$	30,563,576	$	170,174,081