|
|
|
|
|
|
|
Title of Securities Being Registered
|
|
Proposed Maximum Aggregate Offering Price
(1)
|
|
Amount of Registration Fee
(1)
|
Common Stock, $0.01 par value per share
(2)(3)
|
|
|
|
|
Preferred Stock, $0.01 par value per share
(2)
|
|
|
|
|
Warrants
(4)
|
|
|
|
|
Subscription Rights
(3)
|
|
|
|
|
Debt Securities
(5)
|
|
|
|
|
Total
|
|
$ 200,000,000
(6)
|
|
$ 6,225
(6)
|
|
(1)
|
Estimated pursuant to Rule 457(o) under the Securities Act of 1933 solely for the purpose of determining the registration fee. The proposed maximum offering price per security will be determined, from time to time, by the Registrant in connection with the sale by the Registrant of the securities registered under this Registration Statement.
|
(3)
|
Includes such indeterminate number of shares of common stock as may be issued upon, from time to time, conversion or exchange of other securities registered hereunder, to the extent any such securities are, by their terms, convertible or exchangeable for common stock.
|
(4)
|
Subject to Note 6 below, there is being registered hereunder an indeterminate number of warrants as may be sold, from time to time.
|
(5)
|
Subject to Note 6 below, there is being registered hereunder an indeterminate number of debt securities as may be sold, from time to time. If any debt securities are issued at an original issue discount, then the offering price shall be in such greater principal amount as shall result in an aggregate price to investors not to exceed $200.0 million.
|
(6)
|
Pursuant to Rule 415(a)(6) under the Securities Act of 1933, as amended (the “Securities Act”), the registrant is carrying forward to this registration statement $150,000,000 in aggregate offering price of unsold securities that the registrant previously registered on registration statement no. 333-217302, initially filed April 13, 2017 (the “Prior Registration Statement”). Pursuant to Rule 415(a)(6) under the Securities Act, the filing fee previously paid in connection with such unsold securities will continue to be applied to such unsold securities. The amount of the registration fee in the "Calculation of Registration Fee Under the Securities Act of 1933" table relates to the additional $50,000,000 in aggregate offering price of securities being registered hereunder. Pursuant to Rule 415(a)(6) under the Securities Act, the offering of unsold securities under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement.
|
|
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
|
|
|
|
Page
|
•
|
selecting investments that we believe have a very low probability of loss;
|
•
|
requiring a total return on our investments (including both interest and potential equity appreciation) that we believe will compensate us appropriately for credit risk; and
|
•
|
negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility in managing their businesses as possible, consistent with the preservation of our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or rights to a seat on the board of directors under some circumstances.
|
•
|
investment guidelines and/or restrictions, if any, set forth in the applicable organizational, offering or similar documents for the investment vehicles;
|
•
|
risk and return profile of the investment vehicles;
|
•
|
suitability/priority of a particular investment for the investment vehicles;
|
•
|
if applicable, the targeted position size of the investment for the investment vehicles;
|
•
|
level of available cash for investment with respect to the investment vehicles;
|
•
|
total amount of funds committed to the investment vehicles; and
|
•
|
the age of the investment vehicles and the remaining term of their respective investment periods, if any.
|
Stockholder transaction expenses
:
|
|
|
||
Sales load borne by us (as a percentage of offering price)
|
—
|
%
|
(1)
|
|
Offering expenses borne by us (as a percentage of offering price)
|
—
|
%
|
(2)
|
|
Dividend reinvestment plan fees (per sales transaction fee)
|
|
$15.00
|
|
(3)
|
Total Stockholder transaction expenses (as a percentage of offering price)
|
—
|
%
|
|
|
|
|
|
||
Annual expenses (as a percentage of net assets attributable to common stock)
(9)
:
|
|
|
||
Base Management fees payable under the Investment Advisory Agreement
|
3.51
|
%
|
(4)
|
|
Incentive fees payable under the Investment Advisory Agreement
|
2.53
|
%
|
(5)
|
|
Interest payments on borrowed funds
|
4.82
|
%
|
(6)
|
|
Other expenses
|
2.13
|
%
|
(7)
|
|
Acquired fund fees and expenses
|
—
|
%
|
(8)
|
|
Total annual expenses
|
12.99
|
%
|
|
(1)
|
In the event that the securities to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement will disclose the applicable sales load and the following Example will be updated accordingly.
|
(2)
|
The related prospectus supplement will disclose the applicable offering expenses and total stockholder transaction expenses.
|
(3)
|
The expenses of the dividend reinvestment plan are included in “other expenses.” The plan administrator’s fees will be paid by us. There will be no brokerage charges or other charges to stockholders who participate in the plan except that, if a participant elects by written notice to the plan administrator to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a $15.00 transaction fee plus a $0.10 per share brokerage commission from the proceeds. For additional information, see “Distribution Reinvestment Plan.”
|
(4)
|
Our base management fee is 1.75% of the average value of our total assets (other than cash and cash equivalents, and the intangible asset and goodwill resulting from the SBIC Acquisitions; but including assets purchased with borrowed amounts, and including assets owned by any consolidated entity). This item represents actual base management fees incurred for the three months ended March 31, 2018, with pro forma adjustments for the use of proceeds from the 6.375% Notes due 2025, principally the repayment of amounts outstanding on our senior secured revolving credit facility with Pacific Western Bank (the "PWB Credit Facility") and deployment of $33 million into loans yielding 10% annually. See “Management and Other Agreements — Investment Advisory Agreement”.
|
(5)
|
Assumes a Part One and Part Two incentive fee, as defined below, of $4.6 million and $-0-, respectively. The Part One and Part Two incentive fee was calculated based on our statement of operations for the three months ended March 31, 2018, with pro forma adjustments for the use of proceeds from the 6.375% Notes due 2025, principally the repayment of amounts out standing on PWB Credit Facility and deployment of $33 million into loans yielding 10% annually. The Part Two incentive fee is accrued, but not paid, if, on a cumulative basis, the sum of net realized capital gains and losses plus net unrealized appreciation and depreciation is positive. Net realized and unrealized capital gains or losses can vary substantially from period to period.
|
(6)
|
Interest payments on borrowed funds represents an estimate of our annualized interest expenses on our SBA debentures and our expected interest expense under our 6.375% Notes due 2025 over the next twelve months. At March 31, 2018, we had $149.9 million of SBA debentures outstanding with an effective interest rate of 3.43%, which includes amortization of deferred debt issuance costs. In April 2018, we closed the public offering of $50 million in aggregate principal of 6.375% Notes due 2025, with an effective interest rate of 6.975%, including amortization of deferred debt issuance costs. This calculation assumes the 6.375% Notes due 2025 are outstanding for a full year.
|
(7)
|
Includes our overhead expenses, including payments under the Administration Agreement based on our allocable portion of overhead and other expenses incurred by OFS Services. See “Management and Other Agreements — Administration Agreement.” These expenses are based on estimated amounts for the next 12 months.
|
(8)
|
Our stockholders indirectly bear the expenses of underlying funds or other investment vehicles that would be investment companies under section 3(a) of the 1940 Act but for the exceptions to that definition provided for in sections 3(c)(1) and 3(c)(7) of the 1940 Act (“Acquired Funds”) in which we invest. We do not currently invest in underlying funds or other investment companies and therefore do not expect to incur any acquired fund fees and expenses.
|
(9)
|
Estimated.
|
|
1 Year
|
|
3 Years
|
|
5 Years
|
|
10 Years
|
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return
|
$99
|
|
$279
|
|
$440
|
|
$768
|
|
1 Year
|
|
3 Years
|
|
5 Years
|
|
10 Years
|
You would pay the following expenses on a $1,000 investment, assuming a 5.0% annual return
|
$108
|
|
$303
|
|
$473
|
|
$807
|
|
Three Months Ended March 31,
|
|
For the Years Ended December 31,
|
|||||||||||||||||||||||
|
2018
|
|
2017
|
|
2017
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
|
(Dollars in thousands, except per share data)
|
|||||||||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total investment income
|
$
|
9,003
|
|
|
$
|
8,034
|
|
|
33,426
|
|
$
|
31,094
|
|
|
$
|
32,264
|
|
|
$
|
22,820
|
|
|
$
|
17,070
|
|
|
Total expenses
|
5,209
|
|
|
4,694
|
|
|
17,549
|
|
16,949
|
|
|
18,853
|
|
|
13,685
|
|
|
11,352
|
|
|||||||
Net investment income
|
3,816
|
|
|
3,340
|
|
|
15,877
|
|
14,145
|
|
|
13,411
|
|
|
9,135
|
|
|
5,718
|
|
|||||||
Net realized gain (loss) on non-control/non-affiliate investments
|
461
|
|
|
—
|
|
|
(3,248
|
)
|
2,387
|
|
|
(3,033
|
)
|
|
199
|
|
|
87
|
|
|||||||
Net realized gain (loss) on affiliate investment
|
(541
|
)
|
|
—
|
|
|
10,081
|
|
17
|
|
|
1,471
|
|
|
28
|
|
|
—
|
|
|||||||
Net realized gain (loss) on control investment
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(3,586
|
)
|
|
—
|
|
|||||||
Realized gain from SBIC Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,742
|
|
|||||||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
|
(1,563
|
)
|
|
(3,041
|
)
|
|
(9,715
|
)
|
(6,042
|
)
|
|
5,099
|
|
|
534
|
|
|
367
|
|
|||||||
Net unrealized appreciation (depreciation) on affiliate investments
|
1,245
|
|
|
4,024
|
|
|
(5,088
|
)
|
2,684
|
|
|
1,283
|
|
|
1,880
|
|
|
511
|
|
|||||||
Net change in unrealized depreciation on control investment
|
75
|
|
|
543
|
|
|
3
|
|
637
|
|
|
—
|
|
|
1,750
|
|
|
(1,750
|
)
|
|||||||
Net increase in net assets resulting from operations
|
3,493
|
|
|
4,866
|
|
|
7,910
|
|
13,828
|
|
|
18,231
|
|
|
9,940
|
|
|
7,675
|
|
|||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net asset value
|
$
|
13.67
|
|
|
$
|
14.98
|
|
|
$
|
14.12
|
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
$
|
14.24
|
|
|
$
|
14.58
|
|
Net investment income
|
0.29
|
|
|
0.34
|
|
|
1.28
|
|
1.46
|
|
|
1.39
|
|
|
0.95
|
|
|
0.59
|
|
|||||||
Net realized gain (loss) on non-control/non-affiliate investments
|
0.03
|
|
|
—
|
|
|
(0.26
|
)
|
0.25
|
|
|
(0.31
|
)
|
|
0.02
|
|
|
0.01
|
|
|||||||
Net realized gain on affiliate investment
|
(0.04
|
)
|
|
—
|
|
|
0.81
|
|
—
|
|
|
0.14
|
|
|
—
|
|
|
—
|
|
|||||||
Net realized loss on control investment
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(0.37
|
)
|
|
—
|
|
|||||||
Realized gain from SBIC Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.29
|
|
|||||||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
|
(0.12
|
)
|
|
(0.31
|
)
|
|
(0.78
|
)
|
(0.69
|
)
|
|
0.53
|
|
|
0.05
|
|
|
0.04
|
|
|||||||
Net unrealized appreciation (depreciation) on affiliate investments
|
0.09
|
|
|
0.41
|
|
|
(0.40
|
)
|
0.33
|
|
|
0.13
|
|
|
0.19
|
|
|
0.05
|
|
|||||||
Net unrealized appreciation (depreciation) on control investment
|
0.01
|
|
|
0.06
|
|
|
—
|
|
0.07
|
|
|
—
|
|
|
0.18
|
|
|
(0.18
|
)
|
|||||||
Net increase in net assets resulting from operations
|
0.26
|
|
|
0.50
|
|
|
0.64
|
|
1.43
|
|
|
1.89
|
|
|
1.03
|
|
|
0.80
|
|
|||||||
Distributions declared
(1)
|
0.71
|
|
|
0.34
|
|
|
1.36
|
|
1.36
|
|
|
1.36
|
|
|
1.36
|
|
|
1.02
|
|
|
Three Months Ended March 31,
|
|
For the Years Ended December 31,
|
|||||||||||||||||||||||
|
2018
|
|
2017
|
|
2017
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||
|
(Dollars in thousands, except per share data)
|
|||||||||||||||||||||||||
Balance sheet data at period end:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investments, at fair value
|
$
|
335,464
|
|
|
$
|
258,311
|
|
|
$
|
277,499
|
|
$
|
281,627
|
|
|
$
|
257,296
|
|
|
$
|
312,234
|
|
|
$
|
237,919
|
|
Cash and cash equivalents
|
31,926
|
|
|
44,087
|
|
|
72,952
|
|
17,659
|
|
|
32,714
|
|
|
12,447
|
|
|
28,569
|
|
|||||||
Restricted cash and cash equivalents
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450
|
|
|||||||
Other assets
|
7,311
|
|
|
5,031
|
|
|
7,327
|
|
5,744
|
|
|
4,666
(2)
|
|
|
11,823
(2)
|
|
|
9,106
(2)
|
|
|||||||
Total assets
|
374,701
|
|
|
307,429
|
|
|
357,778
|
|
305,030
|
|
|
294,676
(2)
|
|
|
336,504
(2)
|
|
|
276,044
(2)
|
|
|||||||
Debt
|
188,266
|
|
|
154,938
|
|
|
164,823
|
|
156,343
|
|
|
146,460
(2)
|
|
|
194,935
(2)
|
|
|
131,912
(2)
|
|
|||||||
Total liabilities
|
192,248
|
|
|
162,042
|
|
|
169,442
|
|
161,252
|
|
|
151,664
(2)
|
|
|
199,033
(2)
|
|
|
135,666
(2)
|
|
|||||||
Total net assets
|
182,453
|
|
|
145,387
|
|
|
188,336
|
|
143,778
|
|
|
143,012
|
|
|
137,471
|
|
|
140,378
|
|
|||||||
Other data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average annualized yield on performing debt investments at cost
(3)
|
12.57
|
%
|
|
12.18
|
%
|
|
12.11
|
%
|
12.08
|
%
|
|
11.89
|
%
|
|
9.53
|
%
|
|
8.49
|
%
|
|||||||
Weighted average annualized yield on total debt investments at cost
(4)
|
12.12
|
%
|
|
12.03
|
%
|
|
11.59
|
%
|
11.72
|
%
|
|
11.84
|
%
|
|
9.41
|
%
|
|
8.35
|
%
|
|||||||
Weighted average annualized yield on total investments at cost
(5)
|
10.91
|
%
|
|
10.57
|
%
|
|
10.35
|
%
|
10.88
|
%
|
|
10.79
|
%
|
|
8.99
|
%
|
|
8.13
|
%
|
|||||||
Number of portfolio companies at period end
|
39
|
|
|
38
|
|
|
37
|
|
41
|
|
|
39
|
|
|
62
|
|
|
58
|
|
(1)
|
The determination of the tax attributes of our distributions is made annually as of the end of our fiscal year based upon our taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of our distributions for a full year. If the tax characteristics of the Company’s distributions paid during 2018 were determined as of March 31, 2018, none of the Company’s distributions represented a return of capital. The return of capital portion of these distributions for the years December 31, 2017, 2016, 2015, 2014, and 2013, was $0.0, $0.09, $0.23, $0.72, and $0.40, respectively.
|
(2)
|
On January 1, 2016, we adopted Accounting Standards Update (“ASU”) 2015-03 which requires that debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of the debt liability rather than as an asset. Adoption of ASU 2015-03 requires the changes to be applied retrospectively.
|
(3)
|
The weighted average yield on our performing debt investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees divided by (b) amortized cost of our debt investments, excluding assets on non-accrual basis as of the balance sheet date.
|
(4)
|
The weighted average yield on our performing debt investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees divided by (b) amortized cost of our debt investments, including assets on non-accrual basis as of the balance sheet date.
|
(5)
|
The weighted average yield on total investments is computed as (a) the annual stated accruing interest on our debt investments at the balance sheet date, plus the annualized accretion of loan origination fees, original issue discount, market discount or premium, and loan amendment fees, plus the effective yield on our income producing preferred equity investments divided by (b) amortized cost of our total investment portfolio, including assets on non-accrual basis as of the balance sheet date.
|
|
Quarter Ended
|
|||
|
|
March 31,
2018
|
||
Total investment income
|
|
9,003
|
|
|
Net investment income
|
|
3,816
|
|
|
Net gain (loss) on investments
|
|
(323
|
)
|
|
Net increase (decrease) in net assets resulting from operations
|
|
3,493
|
|
|
Net increase (decrease) in net assets resulting from operations per share
(1)
|
|
$
|
0.26
|
|
Net asset value per share
(2)
|
|
$
|
13.67
|
|
|
Quarter Ended
|
||||||||||||||
|
December 31, 2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
||||||||
Total investment income
|
$
|
8,292
|
|
|
$
|
9,122
|
|
|
$
|
7,978
|
|
|
$
|
8,034
|
|
Net investment income
|
3,819
|
|
|
4,402
|
|
|
4,316
|
|
|
3,340
|
|
||||
Net gain (loss) on investments
|
331
|
|
|
(3,227
|
)
|
|
(6,597
|
)
|
|
1,526
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
4,150
|
|
|
1,175
|
|
|
(2,281
|
)
|
|
4,866
|
|
||||
Net increase (decrease) in net assets resulting from operations per share
(1)
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.50
|
|
Net asset value per share
(2)
|
$
|
14.12
|
|
|
$
|
14.15
|
|
|
$
|
14.40
|
|
|
$
|
14.98
|
|
|
Quarter Ended
|
||||||||||||||
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
||||||||
Total investment income
|
$
|
8,209
|
|
|
$
|
7,359
|
|
|
$
|
7,683
|
|
|
$
|
7,843
|
|
Net investment income
|
3,736
|
|
|
3,297
|
|
|
3,457
|
|
|
3,655
|
|
||||
Net gain (loss) on investments
|
1,087
|
|
|
(909
|
)
|
|
881
|
|
|
(1,376
|
)
|
||||
Net increase in net assets resulting from operations
|
4,823
|
|
|
2,388
|
|
|
4,338
|
|
|
2,279
|
|
||||
Net increase in net assets resulting from operations per share
(1)
|
$
|
0.49
|
|
|
$
|
0.25
|
|
|
$
|
0.45
|
|
|
$
|
0.24
|
|
Net asset value per share
(2)
|
$
|
14.82
|
|
|
$
|
14.67
|
|
|
$
|
14.76
|
|
|
$
|
14.65
|
|
(1)
|
Based on weighted average shares outstanding for the respective period.
|
(2)
|
Based on shares outstanding at the end of the respective period.
|
|
For the Three Months Ended March 31, 2018
|
|
For the Year Ended December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
Earnings to Fixed Charges
(1)
|
3.14
|
|
2.36
|
|
3.61
|
|
3.52
|
|
2.58
|
|
2.42
|
(1)
|
Earnings include net realized and unrealized gains or losses. Net realized and unrealized gains or losses can vary substantially from period to period.
|
•
|
investment guidelines and/or restrictions, if any, under law or set forth in the applicable organizational, offering or similar documents for the investment vehicles;
|
•
|
risk and return profile of the investment vehicles;
|
•
|
suitability/priority of a particular investment for the investment vehicles;
|
•
|
if applicable, the targeted position size of the investment for the investment vehicles;
|
•
|
level of available cash for investment with respect to the investment vehicles;
|
•
|
total amount of funds committed to the investment vehicles; and
|
•
|
the age of the investment vehicles and the remaining term of their respective investment periods, if any.
|
•
|
The higher interest or dividend rates of PIK instruments reflect the payment deferral and increased risk associated with these instruments, and PIK instruments often represent a significantly higher risk than non-PIK instruments.
|
•
|
Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
|
•
|
PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. PIK income may also create uncertainty about the source of our cash distributions.
|
•
|
For accounting purposes, any cash distributions to stockholders representing PIK income are not treated as coming from paid-in capital, even though the cash to pay them comes from the offering proceeds. As a result, despite the fact that a distribution representing PIK income could be paid out of amounts invested by our stockholders, the 1940 Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.
|
•
|
PIK interest or dividends have the effect of generating investment income at a compounding rate, thereby further increasing the incentive fees payable to OFS Advisor. Similarly, all things being equal, the deferral associated with PIK interest or dividends also decreases the investment principal-to-value ratio at a compounding rate.
|
•
|
investment guidelines and/or restrictions, if any, set forth in the applicable organizational, offering or similar documents for the investment vehicles;
|
•
|
risk and return profile of the investment vehicles;
|
•
|
suitability/priority of a particular investment for the investment vehicles;
|
•
|
if applicable, the targeted position size of the investment for the investment vehicles
|
•
|
level of available cash for investment with respect to the investment vehicles;
|
•
|
total amount of funds committed to the investment vehicles; and
|
•
|
the age of the investment vehicles and the remaining term of their respective investment periods, if any.
|
|
Assumed Return on Our Portfolio (Net of Expenses)
(1)
|
||||||||
|
(10)%
|
|
(5)%
|
|
—%
|
|
5%
|
|
10%
|
Corresponding return to common stockholder
(2)
|
(24.81)%
|
|
(14.71)%
|
|
(4.61)%
|
|
5.49%
|
|
15.58%
|
(1)
|
The assumed return is required by SEC regulation, and is not a prediction of and does not represent our projected or actual performance.
|
(2)
|
Assumes $368.5 million in investments at fair value, $195.5 million in debt outstanding, $182.5 million in net assets, and average cost of funds of 4.30%. Assumptions are based on our financial condition and our average cost of funds at March 31, 2018, adjusted for the pro forma effects of issuance of our 6.375% Notes due 2025 and use of proceeds therefrom, principally the repayment of amounts outstanding on our PWB Credit Facility and deployment of $33 million into loans.
|
•
|
a comparison of the portfolio company’s securities to publicly traded securities;
|
•
|
the enterprise value of a portfolio company;
|
•
|
the nature and realizable value of any collateral;
|
•
|
the portfolio company’s ability to make payments and its earnings and discounted cash flow;
|
•
|
the markets in which the portfolio company does business; and
|
•
|
changes in the interest rate environment and the credit markets generally that may affect the price at which similar investments may be made in the future and other relevant factors.
|
•
|
increase or maintain in whole or in part our position as a creditor or equity ownership percentage in a portfolio company;
|
•
|
exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
|
•
|
preserve or enhance the value of our investment.
|
•
|
the ability to cause the commencement of enforcement proceedings against the collateral;
|
•
|
the ability to control the conduct of such proceedings;
|
•
|
the approval of amendments to collateral documents;
|
•
|
releases of liens on the collateral; and
|
•
|
waivers of past defaults under collateral documents.
|
•
|
significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;
|
•
|
exclusion of our common stock from certain market indices, such as the Russell 2000 Financial Services Index, which could reduce the ability of certain investment funds to own our common stock and put short-term selling pressure on our common stock;
|
•
|
changes in regulatory policies or tax guidelines, particularly with respect to RICs, SBICs or BDCs;
|
•
|
loss of RIC or BDC status;
|
•
|
failure of SBIC I LP to maintain its status as an SBIC;
|
•
|
inability to obtain a second SBA license;
|
•
|
our origination activity, including the pace of, and competition for, new investment opportunities;
|
•
|
changes or perceived changes in earnings or variations in operating results;
|
•
|
changes or perceived changes in the value of our portfolio of investments;
|
•
|
changes in accounting guidelines governing valuation of our investments;
|
•
|
any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;
|
•
|
potential future sales of common stock or debt securities convertible into or exchangeable or exercisable for our common stock or the conversion of such securities;
|
•
|
departure of OFS Advisor’s, OFSC’s or any of their affiliates’ key personnel;
|
•
|
operating performance of companies comparable to us;
|
•
|
general economic trends and other external factors; and
|
•
|
loss of a major funding source.
|
•
|
the time remaining to the maturity of these debt securities;
|
•
|
the outstanding principal amount of debt securities with terms identical to these debt securities;
|
•
|
the ratings assigned by national statistical ratings agencies;
|
•
|
the general economic environment;
|
•
|
the supply of debt securities trading in the secondary market, if any;
|
•
|
the redemption or repayment features, if any, of these debt securities;
|
•
|
the level, direction and volatility of market interest rates generally; and
|
•
|
market rates of interest higher or lower than rates borne by the debt securities.
|
•
|
the introduction, withdrawal, success and timing of business initiatives and strategies;
|
•
|
changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of our assets;
|
•
|
the relative and absolute investment performance and operations of our investment adviser;
|
•
|
the impact of increased competition;
|
•
|
the impact of future acquisitions and divestitures;
|
•
|
the unfavorable resolution of legal proceedings;
|
•
|
our business prospects and the prospects of our portfolio companies;
|
•
|
the impact, extent and timing of technological changes and the adequacy of intellectual property protection;
|
•
|
the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to us or OFS Advisors;
|
•
|
the ability of OFS Advisors to identify suitable investments for us and to monitor and administer our investments;
|
•
|
our contractual arrangements and relationships with third parties;
|
•
|
any future financings by us, including a second SBIC license;
|
•
|
the ability of OFS Advisors to attract and retain highly talented professionals;
|
•
|
fluctuations in foreign currency exchange rates; and
|
•
|
the impact of changes to tax legislation and, generally, our tax position.
|
|
|
NAV Per Share
(1)
|
|
Price Range
|
|
Premium (Discount) of High Sales Price to NAV
|
|
Premium (Discount) of Low Sales Price to NAV
|
|
Cash Distribution per Share
(2)
|
||||||||||||
Period
|
|
|
High
|
|
Low
|
|
|
|
||||||||||||||
Fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Second Quarter
(3)
|
|
*
|
|
$
|
11.17
|
|
|
$
|
10.65
|
|
|
*
|
|
*
|
|
|
||||||
First Quarter
|
|
$
|
13.68
|
|
|
$
|
12.16
|
|
|
$
|
11.98
|
|
|
(11.1
|
)%
|
|
(12.4
|
)%
|
|
0.71
(4)
|
|
|
Fiscal 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
14.12
|
|
|
$
|
13.18
|
|
|
$
|
11.85
|
|
|
(6.7
|
)%
|
|
(16.1
|
)%
|
|
$
|
0.34
|
|
Third Quarter
|
|
$
|
14.15
|
|
|
$
|
14.34
|
|
|
$
|
12.67
|
|
|
1.3
|
%
|
|
(10.5
|
)%
|
|
$
|
0.34
|
|
Second Quarter
|
|
$
|
14.40
|
|
|
$
|
14.58
|
|
|
$
|
13.50
|
|
|
1.3
|
%
|
|
(6.3
|
)%
|
|
$
|
0.34
|
|
First Quarter
|
|
$
|
14.98
|
|
|
$
|
15.24
|
|
|
$
|
13.55
|
|
|
1.7
|
%
|
|
(9.5
|
)%
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fourth Quarter
|
|
$
|
14.82
|
|
|
$
|
14.09
|
|
|
$
|
12.25
|
|
|
(4.9
|
)%
|
|
(17.3
|
)%
|
|
$
|
0.34
|
|
Third Quarter
|
|
$
|
14.67
|
|
|
$
|
14.25
|
|
|
$
|
12.78
|
|
|
(2.9
|
)%
|
|
(12.9
|
)%
|
|
$
|
0.34
|
|
Second Quarter
|
|
$
|
14.76
|
|
|
$
|
13.75
|
|
|
$
|
11.83
|
|
|
(6.8
|
)%
|
|
(19.9
|
)%
|
|
$
|
0.34
|
|
First Quarter
|
|
$
|
14.65
|
|
|
$
|
13.07
|
|
|
$
|
9.98
|
|
|
(10.8
|
)%
|
|
(31.9
|
)%
|
|
$
|
0.34
|
|
(1)
|
Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low sales prices. The net asset values shown are based on outstanding shares at the end of each period.
|
(2)
|
The distribution during the first quarter of fiscal 2018 was declared on February 12, 2018 by the Company's Board of Directors on, and paid on March 31, 2018, to stockholders of record as of March 17, 2018. The determination of the tax attributes of distributions is made annually as of the end of each fiscal year based upon taxable income for the full year and distributions paid for the full year. If the tax characteristics of the Company’s distributions paid during 2018 were determined as of March 31, 2018, none of the Company’s distributions would have represented a return of capital. The return of capital portion of these distributions for the years ended December 31, 2017, 2016, 2015, 2014, and 2013 (which includes the period December 8, 2012 to December 31, 2012), was $0.0, $0.09, $0.23, $0.72, and $0.40, respectively.
|
(3)
|
Period from April 1, 2018 through
May 17, 2018
.
|
(4)
|
Includes a special dividend of
$0.37
per share representing undistributed net long-term capital gains realized by the Company in 2017.
|
Term
|
Definition or Meaning
|
1940 Act
|
Investment Company Act of 1940, as amended
|
Administration Agreement
|
Administration agreement between the Company and OFS Services dated November 7, 2012
|
Annual Distribution Requirement
|
Distributions to our stockholders, for each taxable year, of at least 90% of our ICTI
|
ASU
|
Accounting Standards Updates, as issued by the FASB
|
BDC
|
Business Development Company under the 1940 Act
|
BLA
|
Business Loan Agreement, as amended, with Pacific Western Bank, as lender, which provides the Company with a senior secured revolving credit facility
|
Board
|
The Company's board of directors
|
Code
|
Internal Revenue Code of 1986, as amended
|
DRIP
|
Distribution reinvestment plan
|
EBITDA
|
Earnings before interest, taxes, depreciation, and amortization
|
Exchange Act
|
Securities Exchange Act of 1934
|
FASB
|
Financial Accounting Standards Board
|
GAAP
|
Accounting principles generally accepted in the United States
|
HPCI
|
Hancock Park Corporate Income, Inc., a non-traded BDC with an investment strategy similar to the Company for whom OFS Advisor serves as investment adviser
|
ICTI
|
Investment company taxable income, which is generally net ordinary income plus net short-term capital gains in excess of net long-term capital losses
|
Investment Advisory Agreement
|
Investment advisory agreement between the Company and OFS Advisor dated November 7, 2012
|
IPO
|
Initial Public Offering
|
LIBOR
|
London Interbank Offered Rate
|
OFS Advisor
|
OFS Capital Management, LLC, a wholly-owned subsidiary of OFSAM and registered investment advisor under the 1940 Act
|
OFS Capital WM
|
OFS Capital WM, LLC, a wholly-owned investment company subsidiary
|
OFS Services
|
OFS Capital Services, LLC, a wholly-owned subsidiary of OFSAM and affiliate of OFS Advisor
|
OFSAM
|
Orchard First Source Asset Management, LLC, a full-service provider of capital and leveraged finance solutions to U.S. corporations
|
Prime Rate
|
United States Prime interest rate
|
PWB Credit Facility
|
Senior secured revolving credit facility between the Company and Pacific Western Bank, as lender
|
RIC
|
Regulated investment company under the Code
|
SBA
|
U.S. Small Business Administration
|
SBIC
|
A fund licensed under the SBA small business investment company program
|
SBIC Acquisition
|
The Company's acquisition of the remaining ownership interests in SBIC I LP and SBIC I GP, LLC on December 4, 2013
|
•
|
a determination as to whether the amendment is
|
◦
|
of such significance to deem it the consummation of the initial investment transaction and the acquisition of new Instruments (i.e., a "significant modification"), or
|
◦
|
a modification of those Instruments to be recognized over their remaining lives, and
|
•
|
an additional allocation of consideration among newly acquired Instruments.
|
|
|
Fair Value at March 31, 2018
|
|
Weighted average discount rate/EBITDA multiple at March 31, 2018
|
|
Discount rate sensitivity
|
|
EBITDA multiple sensitivity
|
||||||||||||||
Valuation Method / Investment Type
|
|
|
-10%
Weighted average |
|
+10%
Weighted average |
|
+0.5x
|
|
-0.5x
|
|||||||||||||
Discounted cash flow
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured
|
|
$
|
163,635
|
|
|
13.09%
|
|
$
|
166,983
|
|
|
$
|
158,680
|
|
|
N/A
|
|
|
N/A
|
|
||
Subordinated
|
|
$
|
43,578
|
|
|
15.08%
|
|
$
|
44,592
|
|
|
$
|
42,261
|
|
|
N/A
|
|
|
N/A
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Enterprise value
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Secured
|
|
$
|
13,403
|
|
|
7.50x
|
|
N/A
|
|
|
N/A
|
|
|
$
|
14,214
|
|
|
$
|
12,591
|
|
||
Subordinated
|
|
$
|
2,559
|
|
|
6.75x
|
|
N/A
|
|
|
N/A
|
|
|
$
|
2,772
|
|
|
$
|
2,345
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred equity
|
|
$
|
17,896
|
|
|
7.79x
|
|
N/A
|
|
|
N/A
|
|
|
$
|
17,966
|
|
|
$
|
15,541
|
|
||
Common equity and warrants
|
|
$
|
13,891
|
|
|
6.48x
|
|
N/A
|
|
|
N/A
|
|
|
$
|
16,054
|
|
|
$
|
11,283
|
|
•
|
The Investment Advisory Agreement with OFS Advisor to manage our operating and investment activities. Under the Investment Advisory Agreement we have agreed to pay OFS Advisor an annual base management fee based on the average value of our total assets (other than cash and cash equivalents but including assets purchased with borrowed amounts and including assets owned by any consolidated entity) as well as an incentive fee based on our investment performance. See Note 3 to the March 31, 2018, consolidated financial statements included elsewhere in this prospectus.
|
•
|
The Administration Agreement with OFS Capital Services, an affiliate of OFS Advisor, to provide us with the office facilities and administrative services necessary to conduct our operations. See Note 3 to the March 31, 2018, consolidated financial statements included elsewhere in this prospectus.
|
•
|
A license agreement with OFSAM, the parent company of OFS Advisor, under which OFSAM has agreed to grant us a non-exclusive, royalty-free license to use the name “OFS.” Under this agreement, we have a right to use the “OFS” name for so long as OFS Advisor or one of its affiliates remains our investment adviser. Other than with respect to this limited license, we have no legal right to the “OFS” name. This license agreement will remain in effect for so long as the Investment Advisory Agreement with OFS Advisor is in effect.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||
Senior secured debt investments
(1)
|
$
|
234,353
|
|
|
$
|
233,324
|
|
|
$
|
196,020
|
|
|
$
|
195,112
|
|
Subordinated debt investments
|
78,904
|
|
|
65,671
|
|
|
63,031
|
|
|
51,198
|
|
||||
Preferred equity
|
26,471
|
|
|
20,456
|
|
|
24,103
|
|
|
19,200
|
|
||||
Common equity and warrants
|
8,447
|
|
|
16,013
|
|
|
6,821
|
|
|
11,989
|
|
||||
|
$
|
348,175
|
|
|
$
|
335,464
|
|
|
$
|
289,975
|
|
|
$
|
277,499
|
|
Total number of portfolio companies
|
39
|
|
|
39
|
|
|
37
|
|
|
37
|
|
(1)
|
Includes debt investments in which we have entered into contractual arrangements with co‑lenders whereby, subject to certain conditions, we have agreed to receive our principal payments after the repayment of certain co‑lenders pursuant to a payment waterfall. The aggregate amortized cost and fair value of these investments was $21,103 and $21,574 at March 31, 2018, respectively, and $21,709 and $21,919, at December 31, 2017, respectively
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||||||
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
South - US
|
$
|
156,922
|
|
|
45.1
|
%
|
|
$
|
126,123
|
|
|
43.5
|
%
|
|
$
|
154,672
|
|
|
46.1
|
%
|
|
$
|
124,699
|
|
|
44.9
|
%
|
Northeast - US
|
104,157
|
|
|
29.8
|
|
|
106,506
|
|
|
36.7
|
|
|
88,474
|
|
|
26.4
|
|
|
91,012
|
|
|
32.8
|
|
||||
West - US
|
72,260
|
|
|
20.8
|
|
|
32,976
|
|
|
11.4
|
|
|
72,595
|
|
|
21.6
|
|
|
33,097
|
|
|
11.9
|
|
||||
Midwest - US
|
14,836
|
|
|
4.3
|
|
|
20,431
|
|
|
7.0
|
|
|
19,723
|
|
|
5.9
|
|
|
24,621
|
|
|
8.9
|
|
||||
Canada
|
—
|
|
|
—
|
|
|
3,939
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
4,070
|
|
|
1.5
|
|
||||
Total
|
$
|
348,175
|
|
|
100.0
|
%
|
|
$
|
289,975
|
|
|
100.0
|
%
|
|
$
|
335,464
|
|
|
100.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||||||
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Up to $4,000
|
$
|
27,646
|
|
|
8.8
|
%
|
|
$
|
28,403
|
|
|
10.9
|
%
|
|
$
|
26,488
|
|
|
8.9
|
%
|
|
$
|
24,745
|
|
|
10.1
|
%
|
$4,001 to $7,000
|
44,120
|
|
|
14.1
|
|
|
53,271
|
|
|
20.5
|
|
|
32,352
|
|
|
10.8
|
|
|
45,765
|
|
|
18.6
|
|
||||
$7,001 to $10,000
|
76,299
|
|
|
24.4
|
|
|
84,596
|
|
|
32.7
|
|
|
65,801
|
|
|
22.0
|
|
|
84,026
|
|
|
34.1
|
|
||||
$10,001 to $13,000
|
24,104
|
|
|
7.7
|
|
|
37,706
|
|
|
14.6
|
|
|
34,198
|
|
|
11.4
|
|
|
38,033
|
|
|
15.4
|
|
||||
Greater than $13,000
|
141,088
|
|
|
45.0
|
|
|
55,075
|
|
|
21.3
|
|
|
140,156
|
|
|
46.9
|
|
|
53,741
|
|
|
21.8
|
|
||||
Total
|
$
|
313,257
|
|
|
100.0
|
%
|
|
$
|
259,051
|
|
|
100.0
|
%
|
|
$
|
298,995
|
|
|
100.0
|
%
|
|
$
|
246,310
|
|
|
100.0
|
%
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||
|
|
Senior
Secured
|
|
Subordinated
|
|
Total
|
|
Senior
Secured
|
|
Subordinated
|
|
Total
|
||||||
Weighted Average Yield
(1)
|
|
Debt
|
|
Debt
|
|
Debt
|
|
Debt
|
|
Debt
|
|
Debt
|
||||||
Less than 8%
|
|
1.7
|
%
|
|
—
|
%
|
|
1.3
|
%
|
|
2.0
|
%
|
|
—
|
%
|
|
1.6
|
%
|
8% - 10%
|
|
9.8
|
|
|
3.2
|
|
|
8.3
|
|
|
26.7
|
|
|
—
|
|
|
21.1
|
|
10% - 12%
|
|
45.7
|
|
|
5.6
|
|
|
36.7
|
|
|
38.4
|
|
|
11.5
|
|
|
32.7
|
|
12% - 14%
|
|
18.7
|
|
|
62.2
|
|
|
28.5
|
|
|
10.1
|
|
|
50.8
|
|
|
18.6
|
|
Greater than 14%
|
|
24.1
|
|
|
29.0
|
|
|
25.2
|
|
|
22.8
|
|
|
37.7
|
|
|
26.0
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Weighted average yield - performing debt investments
(1)
|
|
12.28
|
%
|
|
13.55
|
%
|
|
12.57
|
%
|
|
11.76
|
%
|
|
13.40
|
%
|
|
12.11
|
%
|
Weighted average yield - total debt investments
(2)
|
|
12.28
|
%
|
|
11.64
|
%
|
|
12.12
|
%
|
|
11.76
|
%
|
|
11.05
|
%
|
|
11.59
|
%
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
|
||||||||||||
|
|
Debt
Investments
|
|
Equity
Investments
|
|
Debt
Investments
|
|
Equity
Investments
|
||||||||
Investments in new portfolio companies
|
|
$
|
68.4
|
|
|
$
|
4.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investments in existing portfolio companies
|
|
|
|
|
|
|
|
|
||||||||
Follow-on investments
|
|
23.5
|
|
|
0.3
|
|
|
5.6
|
|
|
—
|
|
||||
Delayed draw / revolver funding
|
|
1.4
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
Total investments in existing portfolio
companies
|
|
24.9
|
|
|
0.3
|
|
|
6.1
|
|
|
—
|
|
||||
Total investments in new and existing portfolio
companies
|
|
$
|
93.3
|
|
|
$
|
4.9
|
|
|
$
|
6.1
|
|
|
$
|
—
|
|
Number of new portfolio company investments
|
|
7
|
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Number of existing portfolio company
investments
|
|
5
|
|
|
1
|
|
|
5
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Proceeds/distributions from principal payments/
equity investments
|
|
$
|
13.0
|
|
|
$
|
—
|
|
|
$
|
32.0
|
|
|
$
|
—
|
|
Proceeds from investments sold or redeemed
|
|
27.1
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
||||
Total proceeds from principal payments, equity
distributions and investments sold
|
|
$
|
40.1
|
|
|
$
|
1.1
|
|
|
$
|
32.0
|
|
|
$
|
—
|
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||||||||||||||
Risk Category
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
1 (Low Risk)
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
2 (Below Average Risk)
|
3,820
|
|
|
1.2
|
|
|
3,823
|
|
|
1.5
|
|
|
3,820
|
|
|
1.3
|
|
|
3,755
|
|
|
1.5
|
|
||||
3 (Average)
|
259,200
|
|
|
82.7
|
|
|
220,332
|
|
|
85.0
|
|
|
260,635
|
|
|
87.1
|
|
|
222,027
|
|
|
90.1
|
|
||||
4 (Special Mention)
|
34,385
|
|
|
11.0
|
|
|
19,114
|
|
|
7.4
|
|
|
31,981
|
|
|
10.7
|
|
|
16,454
|
|
|
6.7
|
|
||||
5 (Substandard)
|
4,762
|
|
|
1.5
|
|
|
4,692
|
|
|
1.8
|
|
|
2,559
|
|
|
0.9
|
|
|
2,873
|
|
|
1.2
|
|
||||
6 (Doubtful)
|
11,090
|
|
|
3.5
|
|
|
11,090
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
1,201
|
|
|
0.5
|
|
||||
7 (Loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
313,257
|
|
|
99.9
|
%
|
|
$
|
259,051
|
|
|
100.0
|
%
|
|
$
|
298,995
|
|
|
100.0
|
%
|
|
$
|
246,310
|
|
|
100.0
|
%
|
•
|
the cost of calculating our net asset value, including the 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 making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;
|
•
|
transfer agent and custodial fees;
|
•
|
out-of-pocket fees and expenses associated with marketing efforts;
|
•
|
federal and state registration fees and any stock exchange listing fees;
|
•
|
U.S. federal, state and local taxes;
|
•
|
independent directors’ fees and expenses;
|
•
|
brokerage commissions;
|
•
|
fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;
|
•
|
direct costs, such as printing, mailing and long-distance telephone;
|
•
|
fees and expenses associated with independent audits and outside legal costs;
|
•
|
costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and
|
•
|
other expenses incurred by either OFS Services or us in connection with administering our business.
|
|
Three Months
Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Investment income
|
|
|
|
||||
Interest income:
|
|
|
|
||||
Cash interest income
|
$
|
7,713
|
|
|
$
|
6,615
|
|
Net Loan Fee amortization
|
275
|
|
|
341
|
|
||
Other interest income
|
94
|
|
|
11
|
|
||
Total interest income
|
8,082
|
|
|
6,967
|
|
||
PIK income:
|
|
|
|
||||
PIK interest income
|
373
|
|
|
314
|
|
||
Preferred equity PIK dividends
|
339
|
|
|
383
|
|
||
Total PIK income
|
712
|
|
|
697
|
|
||
Dividend income:
|
|
|
|
||||
Preferred equity cash dividends
|
163
|
|
|
90
|
|
||
Common equity dividends
|
—
|
|
|
33
|
|
||
Total dividend income
|
163
|
|
|
123
|
|
||
Fee income:
|
|
|
|
||||
Management, valuation and other
|
33
|
|
|
42
|
|
||
Prepayment and other
|
13
|
|
|
205
|
|
||
Total fee income
|
46
|
|
|
247
|
|
||
Total investment income
|
9,003
|
|
|
8,034
|
|
||
Total expenses
|
5,187
|
|
|
4,694
|
|
||
Net investment income
|
3,816
|
|
|
3,340
|
|
||
Net gain (loss) on investments
|
(323
|
)
|
|
1,526
|
|
||
Net increase in net assets resulting from operations
|
$
|
3,493
|
|
|
$
|
4,866
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest income:
|
|
|
|
||||
Senior secured debt investments
|
$
|
6,087
|
|
|
$
|
5,123
|
|
Subordinated debt investments
|
1,995
|
|
|
1,844
|
|
||
Total interest income
|
8,082
|
|
|
6,967
|
|
||
PIK interest income:
|
|
|
|
||||
Senior secured debt investments
|
263
|
|
|
256
|
|
||
Subordinated debt investments
|
110
|
|
|
58
|
|
||
Total PIK interest income
|
$
|
373
|
|
|
$
|
314
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest expense
|
$
|
1,634
|
|
|
$
|
1,387
|
|
Management fees
|
1,360
|
|
|
1,192
|
|
||
Incentive fee
|
736
|
|
|
1,181
|
|
||
Professional fees
|
201
|
|
|
263
|
|
||
Administration fee
|
583
|
|
|
401
|
|
||
Other expenses
|
695
|
|
|
270
|
|
||
Total expenses before incentive fee waiver
|
5,209
|
|
|
4,694
|
|
||
Incentive fee waiver
|
(22
|
)
|
|
—
|
|
||
Total expenses, net of incentive fee waiver
|
5,187
|
|
|
4,694
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2017
|
||||
Senior secured debt
|
$
|
279
|
|
|
$
|
(1,590
|
)
|
Subordinated debt
|
(1,400
|
)
|
|
(223
|
)
|
||
Preferred equity
|
(1,112
|
)
|
|
2,989
|
|
||
Common equity and warrants
|
1,910
|
|
|
350
|
|
||
Net loss on investments
|
$
|
(323
|
)
|
|
$
|
1,526
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Investment income
|
|
|
|
|
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Cash interest income
|
$
|
26,444
|
|
|
$
|
24,901
|
|
|
$
|
25,464
|
|
Net Loan Fee amortization
|
1,450
|
|
|
1,414
|
|
|
2,263
|
|
|||
Other interest income
|
230
|
|
|
85
|
|
|
37
|
|
|||
Total interest income
|
28,124
|
|
|
26,400
|
|
|
27,764
|
|
|||
PIK income:
|
|
|
|
|
|
||||||
PIK interest income
|
1,508
|
|
|
1,194
|
|
|
1,206
|
|
|||
Preferred equity PIK dividends
|
1,399
|
|
|
1,433
|
|
|
1,116
|
|
|||
Total PIK income
|
2,907
|
|
|
2,627
|
|
|
2,322
|
|
|||
Dividend income:
|
|
|
|
|
|
||||||
Preferred equity cash dividends
|
165
|
|
|
168
|
|
|
160
|
|
|||
Common equity dividends
|
317
|
|
|
307
|
|
|
85
|
|
|||
Total dividend income
|
482
|
|
|
475
|
|
|
245
|
|
|||
Fee income:
|
|
|
|
|
|
||||||
Management, valuation, and other
|
163
|
|
|
159
|
|
|
159
|
|
|||
Prepayment, structuring, and other fees
|
1,750
|
|
|
1,433
|
|
|
1,774
|
|
|||
Total fee income
|
1,913
|
|
|
1,592
|
|
|
1,933
|
|
|||
Total investment income
|
33,426
|
|
|
31,094
|
|
|
32,264
|
|
|||
Total expenses
|
17,549
|
|
|
16,949
|
|
|
18,853
|
|
|||
Net investment income
|
15,877
|
|
|
14,145
|
|
|
13,411
|
|
|||
Net gain (loss) on investments
|
(7,967
|
)
|
|
(317
|
)
|
|
4,820
|
|
|||
Net increase in net assets resulting from operations
|
$
|
7,910
|
|
|
$
|
13,828
|
|
|
$
|
18,231
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Interest and PIK interest income:
|
|
|
|
|
|
||||||
Senior secured debt investments
|
$
|
21,785
|
|
|
$
|
19,485
|
|
|
$
|
20,038
|
|
Subordinated debt investments
|
7,847
|
|
|
8,109
|
|
|
8,932
|
|
|||
Total interest and PIK interest income
|
$
|
29,632
|
|
|
$
|
27,594
|
|
|
$
|
28,970
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Amounts in thousands)
|
||||||||||
Interest expense
|
$
|
5,813
|
|
|
$
|
5,302
|
|
|
$
|
6,959
|
|
Management fees
|
4,999
|
|
|
4,516
|
|
|
5,225
|
|
|||
Incentive fee
|
2,962
|
|
|
3,333
|
|
|
2,627
|
|
|||
Professional fees
|
1,115
|
|
|
1,200
|
|
|
1,114
|
|
|||
Administration fee
|
1,314
|
|
|
1,304
|
|
|
1,637
|
|
|||
General and administrative expenses
|
1,346
|
|
|
1,294
|
|
|
1,291
|
|
|||
Total expenses
|
$
|
17,549
|
|
|
$
|
16,949
|
|
|
$
|
18,853
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(Amounts in thousands)
|
||||||||||
Senior secured debt
|
$
|
(4,441
|
)
|
|
$
|
411
|
|
|
$
|
(1,276
|
)
|
Subordinated debt
|
(8,667
|
)
|
|
(2,368
|
)
|
|
(1,106
|
)
|
|||
Preferred equity
|
5,373
|
|
|
(2,584
|
)
|
|
3,351
|
|
|||
Common equity and warrants
|
(232
|
)
|
|
4,224
|
|
|
3,851
|
|
|||
Net gain (loss) on investments
|
$
|
(7,967
|
)
|
|
$
|
(317
|
)
|
|
$
|
4,820
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash from net investment income
|
|
$
|
2,153
|
|
|
$
|
2,362
|
|
Cash received from realized gains
|
|
374
|
|
|
—
|
|
||
Net (purchases and originations) repayments portfolio investments
|
|
(57,354
|
)
|
|
28,833
|
|
||
Net cash provided by (used in) operating activities
|
|
(54,827
|
)
|
|
31,195
|
|
||
Cash distributions paid
|
|
(9,376
|
)
|
|
(3,257
|
)
|
||
Net borrowings (repayments) on PWB Credit Facility
|
|
23,350
|
|
|
(1,500
|
)
|
||
Payment of debt issuance costs and common stock offering expenses
|
|
(173
|
)
|
|
(10
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
|
$
|
(41,026
|
)
|
|
$
|
26,428
|
|
Class and Year
|
|
Total Amount Outstanding
(1)
(in thousands)
|
|
Asset
Coverage
Ratio
(2)
|
||||
PWB Credit Facility
|
|
|
|
|
|
|||
March 31, 2018
|
|
$
|
40,950
|
|
|
539
|
%
|
|
December 31, 2017
|
|
$
|
17,600
|
|
|
1,154
|
%
|
|
Small Business Administration Debentures (SBIC I LP)
(3)
|
|
|
|
|
|
|||
March 31, 2018
|
|
$
|
149,880
|
|
|
$
|
—
|
|
December 31, 2017
|
|
$
|
149,880
|
|
|
$
|
—
|
|
|
|
Payments due by period
|
||||||||||||||||||
|
|
Total
|
|
Less than
year |
|
1-3 years
(2)
|
|
3-5 years
|
|
After 5
years (2) |
||||||||||
Contractual Obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
PWB Credit Facility
|
|
$
|
40,950
|
|
|
$
|
—
|
|
|
$
|
40,950
|
|
|
|
|
$
|
—
|
|
||
SBA Debentures
|
|
149,880
|
|
|
—
|
|
|
—
|
|
|
14,000
|
|
|
135,880
|
|
|||||
Total
|
|
$
|
190,830
|
|
|
$
|
—
|
|
|
$
|
40,950
|
|
|
$
|
14,000
|
|
|
$
|
135,880
|
|
(1)
|
Excludes commitments to extend credit to our portfolio companies.
|
(2)
|
The PWB Credit Facility is scheduled to mature on January 31, 2020. The SBA debentures are scheduled to mature between September 2022 and 2025.
|
Basis point increase
|
|
Interest income
|
|
Interest expense
|
|
Net increase
|
||||||
50
|
|
$
|
1,527
|
|
|
$
|
208
|
|
|
$
|
1,319
|
|
100
|
|
2,723
|
|
|
415
|
|
|
2,308
|
|
|||
150
|
|
3,919
|
|
|
623
|
|
|
3,296
|
|
|||
200
|
|
5,116
|
|
|
830
|
|
|
4,286
|
|
|||
250
|
|
6,312
|
|
|
1,038
|
|
|
5,274
|
|
Basis point decrease
|
|
Interest income
|
|
Interest expense
|
|
Net decrease
|
||||||
50
|
|
$
|
(768
|
)
|
|
$
|
—
|
|
|
$
|
(768
|
)
|
100
|
|
(1,839
|
)
|
|
—
|
|
|
(1,839
|
)
|
|||
150
|
|
(2,374
|
)
|
|
—
|
|
|
(2,374
|
)
|
|||
200
|
|
(2,454
|
)
|
|
—
|
|
|
(2,454
|
)
|
|||
250
|
|
(2,471
|
)
|
|
—
|
|
|
(2,471
|
)
|
•
|
number of employees between 150 and 2,000;
|
•
|
revenues between $15 million and $300 million;
|
•
|
annual EBITDA between $3 million and $50 million;
|
•
|
generally, private companies owned by private equity firms or owners/operators;
|
•
|
enterprise value between $10 million and $500 million;
|
•
|
effective and experienced management teams;
|
•
|
defensible market share;
|
•
|
solid historical financial performance, including a steady stream of cash flow;
|
•
|
high degree of recurring revenue;
|
•
|
diversity of customers, markets, products and geography; and
|
•
|
differentiated products or services.
|
•
|
Prospective Portfolio Company Characteristics
: focusing on primary drivers of the company’s revenues and cash flows, including its key products and services; customer and supplier concentrations, and contractual relationships; depth, breadth, and quality of company management, as well as the extent to which the management team is appropriately compensated with equity incentives; and any regulatory, labor, or litigation matters impacting the company.
|
•
|
Industry and Competitive Overview
: including industry size and the company’s position within it; growth potential and barriers to entry; governmental, regulatory, or technological issues potentially affecting the industry; and cyclicality or seasonality risks associated with the industry.
|
•
|
Financial Analysis
: involving an understanding of the company’s historical financial results, focusing on actual operating trends experienced over time, in order to forecast future performance, including in various sensitized performance scenarios; attention to projected cash flows, debt service coverage, and leverage multiples under such scenarios; and an assessment of enterprise valuations and debt repayment/investment recovery prospects given such sensitized performance scenarios.
|
•
|
Investment Documentation
: focusing on obtaining the best legal protections available to us given our position within the capital structure, including, as appropriate, financial covenants; collateral liens and stock pledges; review of loan documents of other of the prospective portfolio company’s creditors; and negotiation of inter-creditor agreements.
|
•
|
selecting investments that we believe have a very low probability of loss;
|
•
|
requiring a total return on our investments (including both interest and potential equity appreciation) that we believe will compensate us appropriately for credit risk; and
|
•
|
negotiating covenants in connection with our investments that afford our portfolio companies as much flexibility in managing their businesses as possible, consistent with the preservation of our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or rights to a seat on the board of directors under some circumstances.
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Confie Seguros Holdings II Co.
7711 Center Avenue
Suite 200
Huntington Beach, CA 92647
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.48%
|
|
(L +9.50%)
|
|
5/8/2019
|
|
$
|
9,678
|
|
|
$
|
9,597
|
|
|
$
|
9,474
|
|
|
5.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
12018 Sunrise Valley Drive
Suite 140
Reston, Virginia 20191
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.30%
|
|
(L +9.00%)
|
|
4/21/2025
|
|
9,950
|
|
|
9,818
|
|
|
10,059
|
|
|
5.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Eblens Holdings, Inc.
299 Industrial Lane
Torrington, CT 06790
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
12.0% cash / 1.0% PIK
|
|
N/A
|
|
1/13/2023
|
|
8,852
|
|
|
8,775
|
|
|
8,717
|
|
|
4.8
|
|
|||
Common equity (71,250 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
713
|
|
|
768
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,852
|
|
|
9,488
|
|
|
9,485
|
|
|
5.2
|
|
|||
Elgin Fasteners Group
10217 Brecksville Road
Suite 101
Brecksville, OH 44141
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.05%
|
|
(L +6.75%)
|
|
8/27/2018
|
|
3,834
|
|
|
3,827
|
|
|
3,550
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
1740 Eber Rd
Holland, OH 43528 |
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.76%
|
|
(L +8.75%)
|
|
9/8/2024
|
|
5,000
|
|
|
4,880
|
|
|
4,966
|
|
|
2.7
|
|
|||
Common equity (368,852 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
450
|
|
|
434
|
|
|
0.2
|
|
||||
Common equity (40,984 Class B units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
66
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,380
|
|
|
5,466
|
|
|
2.9
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
LRI Holding, LLC (4)
300 Frank W. Burr Blvd., Glenpointe Centre East,
7th Floor
Teaneck, MD 07666
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.56%
|
|
(L +9.25%)
|
|
6/30/2022
|
|
$
|
18,038
|
|
|
$
|
17,903
|
|
|
$
|
17,828
|
|
|
9.8
|
%
|
Preferred Equity (238,095 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
18,038
|
|
|
18,203
|
|
|
18,128
|
|
|
10.0
|
|
|||
Maverick Healthcare Equity, LLC (4)
4601 E. Hilton Ave.,
Suite 100
Phoenix, Arizona 85034-6406
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
109
|
|
|
0.1
|
|
||||
Common Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
109
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
My Alarm Center, LLC (4)
3803 West Chester Pike,
Suite 100
Newton Square, PA 19073
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 units), 8% PIK (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
1,571
|
|
|
1,571
|
|
|
0.9
|
|
||||
Preferred Equity (1,198 units) (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
1,198
|
|
|
826
|
|
|
0.5
|
|
||||
Common Equity (64,149 units) (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
2,769
|
|
|
2,397
|
|
|
1.4
|
|
||||
Online Tech Stores, LLC (4)
190 Monroe Avenue, NW,
Suite 600
Grand Rapids, MI 49503
|
|
Stationary & Office Supply Merchant Wholesaler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.0% PIK
|
|
N/A
|
|
8/1/2023
|
|
16,025
|
|
|
15,715
|
|
|
15,715
|
|
|
8.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
O2 Holdings, LLC (4)
135 E. Martin Street
Suite 201
Raleigh, NC 27601
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
14.88%
|
|
(L +13.00%)
|
|
9/2/2021
|
|
13,850
|
|
|
13,493
|
|
|
14,027
|
|
|
7.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Parfums Holding Company, Inc.
6 High Ridge Park
Stamford, CT 06905
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.06%
|
|
(L +8.75%)
|
|
6/30/2025
|
|
3,520
|
|
|
3,493
|
|
|
3,516
|
|
|
1.9
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Planet Fitness Midwest LLC (4)
4394 Eastgate Square Drive
Cincinnati, OH 45245
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
12/16/2021
|
|
$
|
5,000
|
|
|
$
|
4,966
|
|
|
$
|
4,994
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
2700 Sam Rittenberg Blvd.
Charleston, SC 29407
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 1.0% PIK
|
|
N/A
|
|
10/29/2021
|
|
5,556
|
|
|
5,489
|
|
|
5,383
|
|
|
3.0
|
|
|||
Common equity (499 units) (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
393
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,556
|
|
|
5,988
|
|
|
5,776
|
|
|
3.2
|
|
|||
Resource Label Group, LLC
147 Seaboard Lane
Franklin, TN 37067
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.80%
|
|
(L +8.50%)
|
|
11/26/2023
|
|
4,821
|
|
|
4,758
|
|
|
4,748
|
|
|
2.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
RPLF Holdings, LLC
166 Corporate Drive
Portsmouth, NH 03801
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common Equity (254,110 units) (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
254
|
|
|
254
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (4)
2440 Camino Ramon
Suite 200
San Ramon, CA 94583
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (14)
|
|
|
|
15.31% cash / 0.69% PIK
|
|
(L +13.00%)
|
|
6/19/2020
|
|
12,547
|
|
|
12,471
|
|
|
12,499
|
|
|
6.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
101 Greenwhich Street
New York, NY 10006
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (15)
|
|
|
|
13.38%
|
|
(L +11.50%)
|
|
7/24/2020
|
|
8,880
|
|
|
8,800
|
|
|
8,800
|
|
|
4.8
|
|
|||
Preferred Equity (5,000 units) (10)(13)
|
|
|
|
|
|
|
|
|
|
|
|
537
|
|
|
574
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,880
|
|
|
9,337
|
|
|
9,374
|
|
|
5.1
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Southern Technical Institute, LLC (4)
3940 N. Dean Road
Orlando, FL 32817
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (6)(10)
|
|
|
|
15.00% PIK
|
|
N/A
|
|
12/2/2020
|
|
$
|
3,790
|
|
|
$
|
3,451
|
|
|
$
|
—
|
|
|
—
|
%
|
Preferred Equity (1,764,720 units), 15.75% PIK (7)(10)
|
|
|
|
|
|
|
|
|
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Warrants (2,174,905 units) (10)
|
|
|
|
|
|
|
|
3/30/2026 (12)
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,790
|
|
|
5,591
|
|
|
—
|
|
|
—
|
|
|||
Stancor, L.P. (4)
515 Fan Hill Road
Monroe, CT 06468
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.88%
|
|
(L +8.00%)
|
|
8/19/2019
|
|
11,652
|
|
|
11,633
|
|
|
11,640
|
|
|
6.4
|
|
|||
Preferred Equity (1,250,000 units),
8% PIK (7)(10)
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,461
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
11,652
|
|
|
13,134
|
|
|
13,101
|
|
|
7.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
The Escape Game, LLC (4)
510 East Iris Dr. Unit C
Nashville, TN 37204 |
|
Other amusement and recreation industries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.14%
|
|
(L +8.75%)
|
|
12/22/2022
|
|
7,000
|
|
|
6,950
|
|
|
6,918
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Truck Hero, Inc.
5400 S. State Road
Ann Arbor, Michigan 48108
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.47%
|
|
(L +8.25%)
|
|
4/21/2025
|
|
7,014
|
|
|
6,972
|
|
|
7,083
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
United Biologics Holdings, LLC (4)
70 NE Loop 410
Suite 600
San Antonio, TX 78216
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (151,787 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
20
|
|
|
—
|
|
||||
Warrants (29,374 units) (10)
|
|
|
|
|
|
|
|
03/05/2022 (12)
|
|
|
|
82
|
|
|
107
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
127
|
|
|
0.1
|
|
||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
206,069
|
|
|
215,488
|
|
|
201,947
|
|
|
110.8
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
3rd Rock Gaming Holdings, LLC
75190 Gerald Ford Dr.
Palm Desert, CA 92211
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.59%
|
|
(L +7.50%)
|
|
3/12/2023
|
|
$
|
22,000
|
|
|
$
|
21,673
|
|
|
$
|
21,673
|
|
|
11.9
|
%
|
Preferred Equity (2,547,250 units), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
2,560
|
|
|
2,560
|
|
|
1.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
22,000
|
|
|
24,233
|
|
|
24,233
|
|
|
13.3
|
|
|||
All Metals Holding, LLC (4)
115 Coastline Road
Spartanburg, SC 29301
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.0% cash / 1.0% PIK
|
|
N/A
|
|
12/28/2021
|
|
19,352
|
|
|
18,807
|
|
|
19,059
|
|
|
10.4
|
|
|||
Common Equity (797,443 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
523
|
|
|
2,129
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
19,352
|
|
|
19,330
|
|
|
21,188
|
|
|
11.6
|
|
|||
Contract Datascan Holdings, Inc. (4)
2941 Trade Center Drive
Suite 100
Carrollton, TX 75006
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
2/5/2021
|
|
8,000
|
|
|
7,986
|
|
|
8,000
|
|
|
4.4
|
|
|||
Preferred Equity (3,061 shares), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
4,490
|
|
|
6,107
|
|
|
3.3
|
|
||||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
1,268
|
|
|
0.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
12,580
|
|
|
15,375
|
|
|
8.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
DRS Imaging Services, LLC (4)
43 Fadem Rd
Springfield, NJ 07081
|
|
Data Processing, Hosting, and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (9)
|
|
|
|
12.55%
|
|
(L +10.50%)
|
|
3/8/2023
|
|
5,446
|
|
|
5,343
|
|
|
5,343
|
|
|
2.9
|
|
|||
Common Equity (453 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
454
|
|
|
454
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,446
|
|
|
5,797
|
|
|
5,797
|
|
|
3.1
|
|
|||
Jobson Healthcare Information, LLC (4) (9)
440 9th Avenue 14th Floor New York, NY 10001 |
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
10.13% cash / 5.55% PIK
|
|
(L +8.13%)
|
|
7/21/2019
|
|
15,660
|
|
|
15,452
|
|
|
13,403
|
|
|
7.3
|
|
|||
Common Equity (13 member units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,660
|
|
|
15,452
|
|
|
13,403
|
|
|
7.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Master Cutlery, LLC (4)
700 Penhorn Avenue
Secaucus, NJ 07094
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2020
|
|
$
|
4,819
|
|
|
$
|
4,762
|
|
|
$
|
2,559
|
|
|
1.4
|
%
|
Preferred Equity (3,723 units), 8% PIK (7)(10)
|
|
|
|
|
|
|
|
|
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
||||
Common Equity (15,564 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,819
|
|
|
8,245
|
|
|
2,559
|
|
|
1.4
|
|
|||
NeoSystems Corp. (4)
1861 International Drive,
Suite 200
Tysons Corner, VA 22102
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.25% PIK
|
|
N/A
|
|
8/13/2019
|
|
2,149
|
|
|
2,144
|
|
|
2,149
|
|
|
1.2
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
1,426
|
|
|
2,250
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
2,149
|
|
|
3,570
|
|
|
4,399
|
|
|
2.4
|
|
|||
Pfanstiehl Holdings, Inc. (4)
1219 Glen Rock Avenue
Waukegan, IL 60085-0439
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
9/29/2022
|
|
3,788
|
|
|
3,820
|
|
|
3,820
|
|
|
2.1
|
|
|||
Common Equity (400 shares)
|
|
|
|
|
|
|
|
|
|
|
|
217
|
|
|
5,270
|
|
|
2.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,037
|
|
|
9,090
|
|
|
5.0
|
|
|||
Professional Pipe Holdings, LLC
628 Lanier Road
Norwood, NC 28128
|
|
Plumbing, Heating, and Air-Conditioning Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.11%
|
|
(L +10.25%)
|
|
3/23/2023
|
|
8,486
|
|
|
8,317
|
|
|
8,317
|
|
|
4.6
|
|
|||
Common Equity (1,414 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,414
|
|
|
1,414
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,486
|
|
|
9,731
|
|
|
9,731
|
|
|
5.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TRS Services, LLC (4)
2100 Skinner Road
Houston, TX 77093
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.63% cash / 1.00% PIK
|
|
(L +8.75%)
|
|
12/10/2019
|
|
15,222
|
|
|
15,106
|
|
|
15,028
|
|
|
8.2
|
|
|||
Preferred Equity (329,266 units), 15% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
416
|
|
|
425
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 units), 11% PIK (7)
|
|
|
|
|
|
|
|
|
|
|
|
3,374
|
|
|
1,615
|
|
|
0.9
|
|
||||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,222
|
|
|
19,468
|
|
|
17,068
|
|
|
9.3
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
104,922
|
|
|
122,443
|
|
|
122,843
|
|
|
67.2
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2) |
|
Maturity
|
|
Principal
Amount |
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of
Net Assets |
|||||||
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands)
|
|
|
|||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (4)
c/o Mirage Trailers LLC
2212 Industrial Rd
Nampa, ID 83687
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
13.38% cash / 1.5% PIK
|
|
(L +11.50%)
|
|
11/25/2020
|
|
$
|
7,213
|
|
|
$
|
7,175
|
|
|
$
|
7,218
|
|
|
4.0
|
%
|
Common Equity (554 shares)
|
|
|
|
|
|
|
|
|
|
|
|
3,069
|
|
|
3,456
|
|
|
1.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,213
|
|
|
10,244
|
|
|
10,674
|
|
|
5.9
|
|
|||
Total Control Investments
|
|
|
|
|
|
|
|
|
|
7,213
|
|
|
10,244
|
|
|
10,674
|
|
|
5.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
$
|
318,204
|
|
|
$
|
348,175
|
|
|
$
|
335,464
|
|
|
183.9
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company.
|
(2)
|
A significant proportion of debt investments bear interest at variable rates indexed to LIBOR (L) that reset monthly, quarterly, or semi-annually. Approximately 6% of our LIBOR-referenced investments include a reference-rate floor of 2.00%. The schedule presents the spread over LIBOR and the interest rate in effect at March 31, 2018, for all variable-rate investments. Unless otherwise noted, all investments with a stated PIK rate require payment in the form of additional securities for the entire PIK provision.
|
(3)
|
Determination of fair values required use of significant unobservable inputs for all of our investments.
|
(4)
|
Investment (or portion thereof) held by OFS SBIC I, LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(5)
|
Reserved.
|
(6)
|
Investment on non-accrual status as of March 31, 2018, meaning we have ceased recognition all or a portion of income on the investment.
|
(7)
|
The fair value of the most-recently recognized PIK dividend at March 31, 2018, was $-0-.
|
(8)
|
We have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it receives its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 9.62% at March 31, 2018, includes additional interest of 0.68% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(9)
|
We have entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it receives its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 12.55% at March 31, 2018, includes additional interest of 2.50% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
Non-income producing.
|
(11)
|
The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash, with the issuance of additional securities, or a combination thereof. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of March 31, 2018:
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
13.00% or 12.00%
|
|
1.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.50% to 5.30%
|
|
13.93% to 10.13%
|
|
5.30
|
%
|
MasterCutlery, LLC
|
|
Senior Secured Loan
|
|
0% to 13.00%
|
|
13.00% to 0%
|
|
13.00
|
%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or a portion of investment held through a wholly-owned subsidiary subject to income tax.
|
(14)
|
The PIK provision is reset at the beginning of each interest period equal to the excess of reference rate over the reference rate floor of 1.00%. The PIK interest rate in the schedule represents the current PIK interest rate in effect.
|
(15)
|
Maximum interest rate allowed is 13.50%.
|
Name, Address, and Age
|
|
Position(s) held with Fund
|
|
Term of Office and Length of Time Served
|
|
Principal Occupation, Other Business Experience During the Past Five Years
|
|
Number of Portfolios in Fund Complex Overseen by Director (1)
|
|
Other Directorships Held by Director
|
Independent Directors
|
|
|
|
|
|
|
|
|
||
Robert J. Cresci
10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606
Age: 74
|
|
Director, Audit Committee Member, Compensation Committee Member, Chair of the Nominating and Corporate Governance Committee
|
|
2017-2020; Since 2011
|
|
Mr. Cresci has been a managing director of Pecks Management Partners Ltd., an investment management firm, since 1990. He currently serves on the boards of j2 Global, Inc., Luminex Corporation, CIM Commercial Trust Corporation, Presbia PLC and Hancock Park, another BDC managed by OFS Advisor. Mr. Cresci holds an undergraduate degree in Engineering from the United States Military Academy at West Point and an M.B.A. in Finance from the Columbia University Graduate School of Business. Mr. Cresci’s term as a Class II director will expire in 2020.
Mr. Cresci, the chair of our nominating and corporate governance committee, has broad experience in investment strategies, accounting issues and public company matters. His experience on the board of directors of other public companies and his insight on financial and operational issues are particularly valuable to our board of directors.
|
|
2
|
|
j2 Global, Inc.
Luminex Corporation
CIM Commercial Trust Corporation
Presbia PLC
Hancock Park Corporate Income, Inc., another BDC managed by OFS Advisor
|
Marc Abrams
10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606
Age: 71
|
|
Director, Chair of Audit Committee, Compensation Committee Member, Nominating and Corporate Governance Committee Member
|
|
2015-2018; Since 2011
|
|
Mr. Abrams is the founder and former leader of the public company business sector of SingerLewak LLP, a certified public accounting firm founded in 1995. He has over 40 years of public accounting experience. Mr. Abrams’ expertise includes audits of publicly held companies, initial public offerings, private offerings, corporate reorganizations and acquisitions, evaluating business plans and litigation support. Additionally, Mr. Abrams’ broad practice includes expertise in several industries, including technology, life sciences, real estate, retail and franchise, hotels and casinos, and manufacturing. He currently serves on the board of Hancock Park and previously served on the board of UnifiedOnline, Inc. (f/k/a IceWEB, Inc.). Mr. Abrams graduated from American University in 1967 with a Bachelor of Science in Accounting. Through 2011, he was an active member of AICPA, the California Society of CPAs and the Los Angeles Venture Association.
Mr. Abrams, the chair of our audit committee, brings to our board of directors years of accounting expertise. His knowledge of accounting principles, financial reporting rules and regulations, the evaluation of financial results and the oversight of the financial reporting process makes him an asset to our board of directors.
|
|
2
|
|
Hancock Park Corporate Income, Inc., another BDC managed by OFS Advisor
|
Name, Address, and Age
|
|
Position(s) held with Fund
|
|
Term of Office and Length of Time Served
|
|
Principal Occupation, Other Business Experience During the Past Five Years
|
|
Number of Portfolios in Fund Complex Overseen by Director (1)
|
|
Other Directorships Held by Director
|
Elaine E. Healy
10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606
Age: 55
|
|
Director, Audit Committee Member, Chair of Compensation Committee, Nominating and Corporate Governance Committee Member
|
|
2016-2019; Since 2011
|
|
Ms. Healy is a co-founder and Managing Partner of NexGen Venture Partners, LLC, dba Aura Wireless, a provider of carrier grade, metro-wide Wi-Fi services. Prior to co-founding NexGen, Ms. Healy was a co-founder, president and chief operating officer of Accel Networks, LLC, a fixed cellular wireless broadband service provider founded in November 2002 and acquired in June 2015. She is a senior executive with a broad investment background investing in operating companies ranging from start-ups to emerging growth to publicly traded entities and serving as a director of companies in a wide range of industries prior to becoming an entrepreneur. Throughout her career, she has participated in or been responsible for the periodic valuation of both debt and equity portfolios. Ms. Healy graduated from The Florida State University in 1984 with a Bachelor of Science in Finance. Ms. Healy’s term as a Class I director will expire in 2019.
Ms. Healy, the chair of our compensation committee, has vast experience in the financial and operational aspects of complex businesses, and her skills gained through service as a president and chief operating officer is essential to our board of directors. She brings to our board a unique perspective on a wide range of investment vehicles, including closed-end funds, SBICs, business development companies and both limited and general partnerships. Ms. Healy’s background has enabled her to cultivate an enhanced understanding of operations and strategy with an added layer of risk management experience that is an important aspect of the composition of our board of directors.
|
|
1
|
|
None
|
Name, Address, and Age
|
|
Position(s) held with Fund
|
|
Term of Office and Length of Time Served
|
|
Principal Occupation, Other Business Experience During the Past Five Years
|
|
Number of Portfolios in Fund Complex Overseen by Director (4)
|
|
Other Directorships Held by Director
|
Interested Directors
|
|
|
|
|
|
|
|
|
||
Bilal Rashid
10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606
Age: 47
|
|
Director, Chairman, and Chief Executive Officer
|
|
2017-2020 (Director) Since 2010;
(Chairman and Chief Executive Officer) Since 2014
|
|
Mr. Rashid has served as our Chairman of the Board and Chief Executive Officer since 2014. He is also Chairman of the Board, President and Chief Executive Officer of Hancock Park and OFS Credit, President and a Senior Managing Director of OFSC and OFS Advisor, Chief Executive Officer of OFSAM, and a member of OFSAM’s investment and executive committees. Prior to joining OFSC in 2008, Mr. Rashid was a managing director in the global markets and investment banking division at Merrill Lynch. Mr. Rashid has more than 20 years of experience in investment banking, debt capital markets and investing as it relates to structured credit and corporate credit. Over the years, he has advised and arranged financing for investment management companies and commercial finance companies including business development companies. Before joining Merrill Lynch in 2005, he was a vice president at Natixis Capital Markets, which he joined as part of a large team move from Canadian Imperial Bank of Commerce (“CIBC”). Mr. Rashid’s term as a Class II director will expire in 2020.
Prior to CIBC, he worked as an investment analyst in the project finance area at the International Finance Corporation, which is part of the World Bank. Prior to that, Mr. Rashid was a financial analyst at Lehman Brothers. Mr. Rashid has a B.S. in Electrical Engineering from Carnegie Mellon University and an MBA from Columbia University.
Through his years of work in investment banking, capital markets and in sourcing, leading and managing investments, Mr. Rashid has developed expertise and skills that are relevant to understanding the risks and opportunities that OFS Capital faces and which are critical to implementing our strategic goals and evaluating our operational performance.
|
|
3
|
|
Hancock Park Corporate Income, Inc., another BDC managed by OFS Advisor; OFS Credit Company, Inc., a registered closed-end fund managed by OFS Advisor
|
Name
|
|
Age
|
|
Position
|
Mukya S. Porter
|
|
43
|
|
Chief Compliance Officer
|
Jeffery S. Owen
|
|
53
|
|
Chief Accounting Officer
|
Tod K. Reichert
|
|
56
|
|
Corporate Secretary
|
Name
|
Fees Earned or Paid in Cash
(2)
($) |
Stock Awards
($) |
Total Compensation from
OFS Capital
($) |
Total Compensation from Fund Complex
(3)
($)
|
Marc Abrams
|
100,000
|
—
|
100,000
|
112,500
|
Robert J. Cresci
|
100,000
|
—
|
100,000
|
112,500
|
Elaine E. Healy
|
100,000
|
—
|
100,000
|
100,000
|
Bilal Rashid
(1)
|
—
|
—
|
—
|
—
|
Jeffrey A. Cerny
(1)
|
—
|
—
|
—
|
—
|
|
(1)
|
No compensation is paid to directors who are “interested persons.”
|
(2)
|
The independent directors receive an annual fee of $90,000. In addition, the chairman of each committee receives an
annual
fee of $10,000 for his or her additional services in this capacity. We have obtained directors’ and officers’ liability insurance on behalf of our directors and officers. Independent directors have the option of having their directors’ fees paid in shares of our common stock issued at a price per share equal to the greater of net asset value or the market price at the time of payment.
|
(3)
|
The “Fund Complex” includes the Company, Hancock Park, and OFS Credit Company, Inc.
|
•
|
Three of the five current directors of the Company are independent directors;
|
•
|
All of the members of the audit committee, compensation committee, and nominating and corporate governance committee are independent directors;
|
•
|
The board of directors and its committees regularly conduct scheduled meetings in executive session, out of the presence of Mr. Rashid and other members of management;
|
•
|
The board of directors and its committees regularly conduct meetings that specifically include Mr. Rashid; and
|
•
|
The board of directors and its committees remain in close contact with, and receive reports on various aspects of the Company’s management and enterprise risk directly from, the Company’s senior management and independent auditors.
|
•
|
Presides over all meetings of the directors at which the Chairman is not present, including executive sessions of the independent directors;
|
•
|
Works with the Chairman of the board in the preparation of the agenda for each board meeting and in determining the need for special meetings of the board;
|
•
|
Frequently consults with the Chairman and CEO about strategic policies;
|
•
|
Provides the Chairman and CEO with input regarding board meetings;
|
•
|
Serves as a liaison between the Chairman and CEO and the independent directors;
|
•
|
Consults with the Chairman and CEO on matters relating to corporate governance and board performance; and
|
•
|
Otherwise assumes such responsibilities as may be assigned to him by the independent directors.
|
•
|
appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
|
•
|
overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from such firm;
|
•
|
reviewing and discussing with management our annual and quarterly financial statements and related disclosures;
|
•
|
monitoring our internal control over financial reporting and disclosure controls and procedures;
|
•
|
discussing our risk management processes and procedures, as discussed below under the heading “Board of Directors Role in Risk Oversight”;
|
•
|
establishing policies regarding hiring employees from the independent registered public accounting firm and procedures for the receipt and retention of accounting related complaints and concerns;
|
•
|
meeting independently with our independent registered public accounting firm and management;
|
•
|
reviewing and approving or ratifying any related person transactions; and
|
•
|
preparing the audit committee report required by SEC rules.
|
•
|
reviewing and approving the reimbursement by the Company of the compensation of the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Chief Compliance Officer; and
|
•
|
reviewing and recommending for approval by the board of directors the compensation, if any, paid to directors that are not “interested persons” of the company as such term is defined in Section 2(a)(19) of the 1940 Act.
|
•
|
identifying individuals qualified to become board members;
|
•
|
recommending to the board of directors the persons to be nominated for election as directors and to each of the board’s committees;
|
•
|
reviewing and making recommendations to the board of directors with respect to management succession planning; and
|
•
|
overseeing an annual evaluation of the board of directors.
|
Name
(1)
|
|
Age
|
|
Position
|
Richard S. Ressler
|
|
59
|
|
Chairman of OFSAM, Chairman of Advisor Investment Committees
|
Jeffrey A. Cerny
|
|
54
|
|
Senior Managing Director of OFSC and OFS Advisor
|
Mark S. Hauser
|
|
60
|
|
Senior Managing Director of OFSC and OFS Advisor
|
Bilal Rashid
|
|
47
|
|
Senior Managing Director of OFSC and OFS Advisor
|
(1)
|
The address for each member of the Middle-Market Investment Committee is c/o OFS Capital Management, 10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606. None of these individuals beneficially own any of our equity securities.
|
Name of Portfolio Manager/Investment Support Team
|
|
Dollar Range of Equity Securities Beneficially Owned
(1)
|
Richard S. Ressler
|
|
None
|
Jeffrey A. Cerny
|
|
None
|
Mark S. Hauser
|
|
None
|
Bilal Rashid
|
|
None
|
(1)
|
Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2) of the Securities Exchange Act of 1934, or the “Exchange Act.”
|
•
|
determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
|
•
|
assists us in determining what securities we purchase, retain or sell;
|
•
|
identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
|
•
|
executes, closes, services and monitors the investments we make.
|
•
|
no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does not exceed the hurdle rate;
|
•
|
100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5% in any calendar quarter. We refer to this portion of our pre-incentive fee net investment income (which exceeds the hurdle rate but is less than 2.5%) as the “catch-up” provision. The catch-up is meant to provide OFS Advisor with 20.0% of the pre-incentive fee net investment income as if a hurdle rate did not apply if this pre-incentive fee net investment income exceeds 2.5% in any calendar quarter; and
|
•
|
20.0% of the amount of our pre-incentive fee net investment income, if any, that exceeds 2.5% in any calendar quarter.
|
•
|
Hurdle rate(1) = 2.0%
|
•
|
Management fee(2) = 0.44%
|
•
|
Other estimated expenses (legal, accounting, custodian, transfer agent, etc.)(3) = 0.20%
|
•
|
Investment income (including interest, dividends, fees, etc.) = 1.25%
|
•
|
Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 0.61%
|
•
|
Investment income (including interest, dividends, fees, etc.) = 2.80%
|
•
|
Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 2.16%
|
Incentive Fee
|
=
|
100% × “Catch-Up” + the greater of 0%
AND
(20% × (pre-incentive fee net investment income – 2.5%))
|
|
|
|
|
=
|
(100% ×(2.16% – 2.0%)) + 0%
|
|
|
|
|
=
|
100% × 0.16%
|
|
|
|
|
=
|
0.16%
|
•
|
Investment income (including interest, dividends, fees, etc.) = 3.50%
|
•
|
Pre-incentive fee net investment income (investment income – (management fee + other expenses)) = 2.86%
|
Incentive Fee
|
=
|
100% × “Catch-Up” + the greater of 0%
AND
(20% × (pre-incentive fee net investment income – 2.5%))
|
|
|
|
|
=
|
(100% × (2.5% – 2.0%)) + (20% × (2.86% – 2.5%))
|
|
|
|
|
=
|
0.5% + (20% × 0.36%)
|
|
|
|
|
=
|
0.5% + 0.07%
|
|
|
|
|
=
|
0.57%
|
•
|
Year 1: $20 million investment made in Company A (“Investment A”), and $30 million investment made in Company B (“Investment B”)
|
•
|
Year 2: Investment A is sold for $50 million and fair market value (“FMV”) of Investment B determined to be $32 million
|
•
|
Year 3: FMV of Investment B determined to be $25 million
|
•
|
Year 4: Investment B sold for $31 million
|
•
|
Year 1: None (no sales transactions)
|
•
|
Year 2: $6 million (20% multiplied by $30 million realized capital gains on sale of Investment A)
|
•
|
Year 3: None; $5 million (20% multiplied by $30 million cumulative realized capital gains less $5 million cumulative unrealized capital depreciation) less $6 million (Capital Gains Fee paid in Year 2)
|
•
|
Year 4: $200,000; $6.2 million (20% multiplied by $31 million cumulative realized capital gains) less $6 million (Capital Gains Fee paid in Year 2)
|
•
|
Year 1: $20 million investment made in Company A (“Investment A”), $30 million investment made in Company B (“Investment B”) and $25 million investment made in Company C (“Investment C”)
|
•
|
Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million
|
•
|
Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million
|
•
|
Year 4: FMV of Investment B determined to be $35 million
|
•
|
Year 5: Investment B sold for $20 million
|
•
|
Year 1: None (no sales transactions)
|
•
|
Year 2: $5 million (20% multiplied by $30 million realized capital gains on Investment A less $5 million unrealized capital depreciation on Investment B)
|
•
|
Year 3: $1.4 million; $6.4 million (20% multiplied by $32 million ($35 million cumulative realized capital gains on Investment A and Investment C less $3 million cumulative unrealized capital depreciation on Investment B)) less $5 million (Capital Gains Fee paid in Year 2)
|
•
|
Year 4: $0.6 million; $7 million (20% multiplied by $35 million (cumulative realized capital gains on Investment A and Investment C)) less $6.4 million (cumulative Capital Gains Fee paid in all prior years)
|
•
|
Year 5: None; $5 million (20% multiplied by $25 million ($35 million cumulative realized capital gains on Investments A and C less $10 million realized capital losses on Investment B)) less $7 million (cumulative Capital Gains Fee paid in all prior years))
|
•
|
the cost of calculating our net asset value, including the 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 making investments, including out-of-pocket fees and expenses associated with performing due diligence and reviews of prospective investments;
|
•
|
transfer agent and custodial fees;
|
•
|
out-of-pocket fees and expenses associated with marketing efforts;
|
•
|
federal and state registration fees and any stock exchange listing fees;
|
•
|
U.S. federal, state and local taxes;
|
•
|
independent directors’ fees and expenses;
|
•
|
brokerage commissions;
|
•
|
fidelity bond, directors’ and officers’ liability insurance and other insurance premiums;
|
•
|
direct costs, such as printing, mailing and long-distance telephone;
|
•
|
fees and expenses associated with independent audits and outside legal costs;
|
•
|
costs associated with our reporting and compliance obligations under the 1940 Act and other applicable U.S. federal and state securities laws; and
|
•
|
other expenses incurred by either OFS Services or us in connection with administering our business.
|
•
|
the nature, quality and extent of the advisory and other services to be provided to us by OFS Advisor;
|
•
|
the fee structures of comparable externally managed BDCs that engage in similar investing activities;
|
•
|
our projected operating expenses and expense ratio compared to BDCs with similar investment objectives;
|
•
|
any existing and potential sources of indirect income to OFS Advisor from its relationship with us and the profitability of that relationship, including through the Investment Advisory Agreement;
|
•
|
information about the services to be performed and the personnel performing such services under the Investment Advisory Agreement; and
|
•
|
the organizational capability and financial condition of OFS Advisor and its affiliates.
|
•
|
investment guidelines and/or restrictions, if any, set forth in the applicable organizational, offering or similar documents for the investment vehicles;
|
•
|
risk and return profile of the investment vehicles;
|
•
|
suitability/priority of a particular investment for the investment vehicles;
|
•
|
if applicable, the targeted position size of the investment for the investment vehicles;
|
•
|
level of available capital for investment with respect to the investment vehicles;
|
•
|
total amount of funds committed to the investment vehicles; and
|
•
|
the age of the investment vehicles and the remaining term of their respective investment periods, if any.
|
Name and Address of Beneficial Owner
|
|
Number of
Shares Owned
Beneficially
|
|
Percentage of
Class
|
|
Dollar Range of Equity Securities in the Company (1) (2)
|
||
Other
|
|
|
|
|
|
|
||
OFSAM
(3)
|
|
2,946,474
|
|
|
22.1
|
%
|
|
N/A
|
Interested Directors
|
|
|
|
|
|
|
|
|
Bilal Rashid
|
|
None
|
|
|
None
|
|
|
N/A
|
Jeffrey A. Cerny
|
|
None
|
|
|
None
|
|
|
N/A
|
Independent Directors
|
|
|
|
|
|
|
|
|
Marc Abrams
|
|
2,215
|
|
|
*
|
|
|
$10,001 - $50,000
|
Robert J. Cresci
|
|
None
|
|
|
None
|
|
|
N/A
|
Elaine E. Healy
|
|
None
|
|
|
None
|
|
|
N/A
|
Officers Who Are Not Directors
|
|
|
|
|
|
|
|
|
Mukya S. Porter
|
|
None
|
|
|
None
|
|
|
N/A
|
Jeffery S. Owen
|
|
None
|
|
|
None
|
|
|
N/A
|
Tod K. Reichert
|
|
None
|
|
|
None
|
|
|
N/A
|
Officers and Directors as a group (8 persons)
|
|
2,215
|
|
|
*
|
|
|
|
*
|
Less than 1.0%.
|
(1)
|
The dollar ranges are as follows: none, $1 - $10,000, $10,001 - $50,000, $50,001 - $100,000 or over $100,000. The dollar range of our equity securities beneficially owned is calculated by multiplying the closing price of our common stock as reported on The Nasdaq Global Select Market on
April 10, 2018
, times the number of shares beneficially owned.
|
(2)
|
Beneficial ownership has been determined in accordance with Rule 16a-1(a)(2) of the Exchange Act. None of the reported shares held by our directors or officers are pledged as security.
|
(3)
|
Information is based on a Schedule 13G/A filed with the SEC on April 11, 2017. OFSAM is owned by Bilal Rashid, Jeffrey A. Cerny and other officers of OFS Capital Management, LLC, the Company’s investment adviser, and its affiliates. OFSAM votes its shares of the Company’s stock as determined by OFSAM’s Executive Committee, which is comprised of Richard Ressler and Mark Hauser, as well as Messrs. Rashid and Cerny. Neither of Messrs. Rashid or Cerny is a beneficial owner of the Company’s shares held by OFSAM for purposes of Section 13(d) of the Exchange Act.
|
•
|
For each debt investment, a basic credit risk rating review process is completed. The risk rating on every credit facility is reviewed and either reaffirmed or revised by OFS Advisor’s investment committee.
|
•
|
Each portfolio company or investment is valued by OFS Advisor.
|
•
|
The preliminary valuations are documented and are then submitted to OFS Advisor’s investment committee for ratification.
|
•
|
Third-party valuation firm(s) provide valuation services as requested, by reviewing the investment committee’s preliminary valuations. OFS Advisor’s investment committee’s preliminary fair value conclusions on each of our assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the audit committee of our Board or required by our valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or other valuation method based on the discretion of our Board.
|
•
|
The audit committee of the Board reviews the preliminary valuations of OFS Advisor’s investment committee and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.
|
•
|
Our Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of OFS Advisor, the audit committee and, where appropriate, the respective independent valuation firm.
|
•
|
Level 1
: Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
|
•
|
Level 2:
Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active, (iii) inputs other than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived principally from or corroborated by observable market data.
|
•
|
Level 3:
Unobservable inputs for the asset or liability, and situations where there is little, if any, market activity for the asset or liability at the measurement date.
|
•
|
the net asset value per share of our common stock disclosed in the most recent periodic report that we filed with the SEC;
|
•
|
our management’s assessment of whether any material change in the net asset value per share of our common stock has occurred (including through the realization of gains on the sale of our portfolio securities) during the period beginning on the date of the most recently disclosed net asset value per share of our common stock and ending as of a time within 48 hours (excluding Sundays and holidays) of the sale of our common stock; and
|
•
|
the magnitude of the difference between (i) a value that our board of directors or an authorized committee thereof has determined reflects the current (as of a time within 48 hours, excluding Sundays and holidays) net asset value of our common stock, which is based upon the net asset value of our common stock disclosed in the most recent periodic report that we filed with the SEC, as adjusted to reflect our management’s assessment of any material change in the net asset value of our common stock since the date of the most recently disclosed net asset value of our common stock, and (ii) the offering price of the shares of our common stock in the proposed offering.
|
Title of Class
|
|
Amount Authorized
|
|
Amount Held by Company for its Account
|
|
Amount Outstanding
|
||
Common Stock, $0.01 par value per share
|
|
100,000,000
|
|
—
|
|
|
13,348,774
|
|
Preferred Stock, $0.01 par value per share
|
|
2,000,000
|
|
—
|
|
|
—
|
|
•
|
the designation and number of shares of such series;
|
•
|
the rate and time at which, and the preferences and conditions under which, any dividends or other distributions will be paid on shares of such series, as well as whether such dividends or other distributions are participating or non-participating;
|
•
|
any provisions relating to convertibility or exchangeability of the shares of such series, including adjustments to the conversion price of such series;
|
•
|
the rights and preferences, if any, of holders of shares of such series upon our liquidation, dissolution or winding up of our affairs;
|
•
|
the voting powers, if any, of the holders of shares of such series;
|
•
|
any provisions relating to the redemption of the shares of such series;
|
•
|
any limitations on our ability to pay dividends or make distributions on, or acquire or redeem, other securities while shares of such series are outstanding;
|
•
|
any conditions or restrictions on our ability to issue additional shares of such series or other securities;
|
•
|
if applicable, a discussion of certain U.S. federal income tax considerations; and
|
•
|
any other relative powers, preferences and participating, optional or special rights of shares of such series, and the qualifications, limitations or restrictions thereof.
|
•
|
the period of time the offering would remain open (which shall be open a minimum number of days such that all record holders would be eligible to participate in the offering and shall not be open longer than 120 days);
|
•
|
the title and aggregate number of such subscription rights;
|
•
|
the exercise price for such subscription rights (or method of calculation thereof);
|
•
|
the currency or currencies, including composite currencies, in which the price of such subscription rights may be payable;
|
•
|
if applicable, the designation and terms of the securities with which the subscription rights are issued and the number of subscription rights issued with each such security or each principal amount of such security;
|
•
|
the ratio of the offering (which, in the case of transferable rights, will require a minimum of three shares to be held of record before a person is entitled to purchase an additional share);
|
•
|
the number of such subscription rights issued to each stockholder;
|
•
|
the extent to which such subscription rights are transferable and the market on which they may be traded if they are transferable;
|
•
|
the date on which the right to exercise such subscription rights shall commence, and the date on which such right shall expire (subject to any extension);
|
•
|
if applicable, the minimum or maximum number of subscription rights that may be exercised at one time;
|
•
|
the extent to which such subscription rights include an over-subscription privilege with respect to unsubscribed securities and the terms of such over-subscription privilege;
|
•
|
any termination right we may have in connection with such subscription rights offering;
|
•
|
the terms of any rights to redeem, or call such subscription rights;
|
•
|
information with respect to book-entry procedures, if any;
|
•
|
the terms of the securities issuable upon exercise of the subscription rights;
|
•
|
the material terms of any standby underwriting, backstop or other purchase arrangement that we may enter into in connection with the subscription rights offering;
|
•
|
if applicable, a discussion of certain U.S. federal income tax considerations applicable to the issuance or exercise of such subscription rights; and
|
•
|
any other terms of such subscription rights, including exercise, settlement and other procedures and limitations relating to the transfer and exercise of such subscription rights.
|
•
|
the title and aggregate number of such warrants;
|
•
|
the price or prices at which such warrants will be issued;
|
•
|
the currency or currencies, including composite currencies, in which the price of such warrants may be payable;
|
•
|
if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;
|
•
|
in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at which and the currency or currencies, including composite currencies, in which this principal amount of debt securities may be purchased upon such exercise;
|
•
|
in the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock, as the case may be, purchasable upon exercise of one warrant and the price at which and the currency or currencies, including composite currencies, in which these shares may be purchased upon such exercise;
|
•
|
the date on which the right to exercise such warrants shall commence and the date on which such right will expire (subject to any extension);
|
•
|
whether such warrants will be issued in registered form or bearer form;
|
•
|
if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time;
|
•
|
if applicable, the date on and after which such warrants and the related securities will be separately transferable;
|
•
|
the terms of any rights to redeem, or call such warrants;
|
•
|
information with respect to book-entry procedures, if any;
|
•
|
the terms of the securities issuable upon exercise of the warrants;
|
•
|
if applicable, a discussion of certain U.S. federal income tax considerations; and
|
•
|
any other terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants.
|
•
|
the designation or title of the series of debt securities;
|
•
|
the total principal amount of the series of debt securities;
|
•
|
the percentage of the principal amount at which the series of debt securities will be offered;
|
•
|
the date or dates on which principal will be payable;
|
•
|
the rate or rates (which may be either fixed or variable) and/or the method of determining such rate or rates of interest, if any;
|
•
|
the date or dates from which any interest will accrue, or the method of determining such date or dates, and the date or dates on which any interest will be payable;
|
•
|
the terms for redemption, extension or early repayment, if any;
|
•
|
the currencies in which the series of debt securities are issued and payable;
|
•
|
whether the amount of payments of principal, premium or interest, if any, on a series of debt securities will be determined with reference to an index, formula or other method (which could be based on one or more currencies, commodities, equity indices or other indices) and how these amounts will be determined;
|
•
|
the place or places, if any, other than or in addition to the City of New York, of payment, transfer, conversion and/or exchange of the debt securities;
|
•
|
the denominations in which the offered debt securities will be issued;
|
•
|
the provision for any sinking fund;
|
•
|
any restrictive covenants;
|
•
|
any Events of Default;
|
•
|
whether the series of debt securities are issuable in certificated form;
|
•
|
any provisions for defeasance or covenant defeasance;
|
•
|
if applicable, U.S. federal income tax considerations relating to original issue discount;
|
•
|
whether and under what circumstances we will pay additional amounts in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem the debt securities rather than pay the additional amounts (and the terms of this option);
|
•
|
any provisions for convertibility or exchangeability of the debt securities into or for any other securities;
|
•
|
whether the debt securities are subject to subordination and the terms of such subordination;
|
•
|
the listing, if any, on a securities exchange; and
|
•
|
any other terms.
|
•
|
how it handles securities payments and notices;
|
•
|
whether it imposes fees or charges;
|
•
|
how it would handle a request for the holders’ consent, if ever required;
|
•
|
whether and how you can instruct it to send you debt securities registered in your own name so you can be a holder, if that is permitted in the future for a particular series of debt securities;
|
•
|
how it would exercise rights under the debt securities if there were a default or other event triggering the need for holders to act to protect their interests; and
|
•
|
if the debt securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.
|
•
|
an investor cannot cause the debt securities to be registered in his or her name and cannot obtain certificates for his or her interest in the debt securities, except in the special situations we describe below;
|
•
|
an investor will be an indirect holder and must look to his or her own bank or broker for payments on the debt securities and protection of his or her legal rights relating to the debt securities, as we describe under “- Issuance of Securities in Registered Form” above;
|
•
|
an investor may not be able to sell interests in the debt securities to some insurance companies and other institutions that are required by law to own their securities in non-book-entry form;
|
•
|
an investor may not be able to pledge his or her interest in a global security in circumstances where certificates representing the debt securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to be effective;
|
•
|
the depositary’s policies, which may change from time to time, will govern payments, transfers, exchanges and other matters relating to an investor’s interest in a global security. We and the trustee have no responsibility for any aspect of the depositary’s actions or for its records of ownership interests in a global security. We and the trustee also do not supervise the depositary in any way;
|
•
|
if we redeem less than all the debt securities of a particular series being redeemed, DTC’s practice is to determine by lot the amount to be redeemed from each of its participants holding that series;
|
•
|
an investor is required to give notice of exercise of any option to elect repayment of its debt securities, through its participant, to the applicable trustee and to deliver the related debt securities by causing its participant to transfer its interest in those debt securities, on DTC’s records, to the applicable trustee;
|
•
|
DTC requires that those who purchase and sell interests in a global security deposited in its book-entry system use immediately available funds; your broker or bank may also require you to use immediately available funds when purchasing or selling interests in a global security; and
|
•
|
financial institutions that participate in the depositary’s book-entry system, and through which an investor holds its interest in a global security, may also have their own policies affecting payments, notices and other matters
|
•
|
we do not pay the principal of, or any premium on, a debt security of the series on its due date, and do not cure this default within five days;
|
•
|
we do not pay interest on a debt security of the series when due, and such default is not cured within 30 days;
|
•
|
we do not deposit any sinking fund payment in respect of debt securities of the series on its due date, and do not cure this default within five days;
|
•
|
we remain in breach of a covenant in respect of debt securities of the series for 60 days after we receive a written notice of default stating we are in breach. The notice must be sent by either the trustee or holders of at least 25% of the principal amount of debt securities of the series;
|
•
|
we file for bankruptcy or certain other events of bankruptcy, insolvency or reorganization occur and remain undischarged or unstayed for a period of 60 days;
|
•
|
on the last business day of each of 24 consecutive calendar months, we have an asset coverage of less than 100%; and
|
•
|
any other Event of Default in respect of debt securities of the series described in the applicable prospectus supplement occurs.
|
•
|
the holder must give your trustee written notice that an Event of Default has occurred and remains uncured;
|
•
|
the holders of at least 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action;
|
•
|
the trustee must not have taken action for 60 days after receipt of the above notice and offer of indemnity; and
|
•
|
the holders of a majority in principal amount of the debt securities must not have given the trustee a direction inconsistent with the above notice during that 60 day period.
|
•
|
the payment of principal, any premium or interest; or
|
•
|
in respect of a covenant that cannot be modified or amended without the consent of each holder.
|
•
|
where we merge out of existence or sell our assets, the resulting entity must agree to be legally responsible for our obligations under the debt securities;
|
•
|
immediately after giving effect to such transaction, no Default or Event of Default shall have happened and be continuing;
|
•
|
under the indenture, no merger or sale of assets may be made if as a result any of our property or assets or any property or assets of one of our subsidiaries, if any, would become subject to any mortgage, lien or other encumbrance unless either (a) the mortgage, lien or other encumbrance could be created pursuant to the limitation on liens covenant in the indenture without equally and ratably securing the indenture securities or (b) the indenture securities are secured equally and ratably with or prior to the debt secured by the mortgage, lien or other encumbrance;
|
•
|
we must deliver certain certificates and documents to the trustee; and
|
•
|
we must satisfy any other requirements specified in the prospectus supplement relating to a particular series of debt securities.
|
•
|
change the stated maturity of the principal of or interest on a debt security;
|
•
|
reduce any amounts due on a debt security;
|
•
|
reduce the amount of principal payable upon acceleration of the maturity of a security following a default;
|
•
|
adversely affect any right of repayment at the holder’s option;
|
•
|
change the place (except as otherwise described in the prospectus or prospectus supplement) or currency of payment on a debt security;
|
•
|
impair your right to sue for payment;
|
•
|
adversely affect any right to convert or exchange a debt security in accordance with its terms;
|
•
|
modify the subordination provisions in the indenture in a manner that is adverse to holders of the debt securities;
|
•
|
reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture;
|
•
|
reduce the percentage of holders of debt securities whose consent is needed to waive compliance with certain provisions of the indenture or to waive certain defaults;
|
•
|
modify any other aspect of the provisions of the indenture dealing with supplemental indentures, modification and waiver of past defaults, changes to the quorum or voting requirements or the waiver of certain covenants; and
|
•
|
change any obligation we have to pay additional amounts.
|
•
|
if the change affects only one series of debt securities, it must be approved by the holders of a majority in principal amount of that series; and
|
•
|
if the change affects more than one series of debt securities issued under the same indenture, it must be approved by the holders of a majority in principal amount of all of the series affected by the change, with all affected series voting together as one class for this purpose.
|
•
|
for original issue discount securities, we will use the principal amount that would be due and payable on the voting date if the maturity of these debt securities were accelerated to that date because of a default;
|
•
|
for debt securities whose principal amount is not known (for example, because it is based on an index), we will use a special rule for that debt security described in the prospectus supplement; and
|
•
|
for debt securities denominated in one or more foreign currencies, we will use the U.S. dollar equivalent.
|
•
|
if the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of such debt securities a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates;
|
•
|
we must deliver to the trustee a legal opinion of our counsel confirming that, under current U.S. federal income tax law, we may make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and just repaid the debt securities ourselves at maturity; and
|
•
|
we must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act, as amended, and a legal opinion and officers’ certificate stating that all conditions precedent to covenant defeasance have been complied with.
|
•
|
if the debt securities of the particular series are denominated in U.S. dollars, we must deposit in trust for the benefit of all holders of such debt securities a combination of money and United States government or United States government agency notes or bonds that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates.
|
•
|
we must deliver to the trustee a legal opinion confirming that there has been a change in current U.S. federal tax law or an IRS ruling that allows us to make the above deposit without causing you to be taxed on the debt securities any differently than if we did not make the deposit and just repaid the debt securities ourselves at maturity. Under current U.S. federal tax law, the deposit and our legal release from the debt securities would be treated as though we paid you your share of the cash and notes or bonds at the time the cash and notes or bonds were deposited in trust in exchange for your debt securities and you would recognize gain or loss on the debt securities at the time of the deposit; and
|
•
|
we must deliver to the trustee a legal opinion of our counsel stating that the above deposit does not require registration by us under the 1940 Act, as amended, and a legal opinion and officers’ certificate stating that all conditions precedent to defeasance have been complied with.
|
•
|
our indebtedness (including indebtedness of others guaranteed by us), whenever created, incurred, assumed or guaranteed, for money borrowed (other than indenture securities issued under the indenture and denominated as subordinated debt securities), unless in the instrument creating or evidencing the same or under which the same is outstanding it is provided that this indebtedness is not senior or prior in right of payment to the subordinated debt securities; and
|
•
|
renewals, extensions, modifications and refinancings of any of this indebtedness.
|
(a)
|
Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an eligible portfolio company, or from any person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in the 1940 Act as any issuer that:
|
•
|
is organized under the laws of, and has its principal place of business in, the United States;
|
•
|
is not an investment company (other than a small business investment company wholly-owned by the BDC) or a company that would be an investment company but for certain exclusions under the 1940 Act; and
|
•
|
satisfies either of the following:
|
•
|
does not have any class of securities listed on a national securities exchange or has any class of securities listed on a national securities exchange subject to a $250 million market capitalization maximum; or
|
•
|
is controlled by a BDC or a group of companies including a BDC, the BDC actually exercises a controlling influence over the management or policies of the eligible portfolio company, and, as a result, the BDC has an affiliated person who is a director of the eligible portfolio company.
|
(b)
|
Securities of any eligible portfolio company which we control.
|
(c)
|
Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident to such a private transaction, if the issuer is in bankruptcy and subject to reorganization or if the issuer, immediately prior to the purchase of its securities, was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
|
(d)
|
Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and we already own 60% of the outstanding equity of the eligible portfolio company.
|
(e)
|
Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of warrants or rights relating to such securities.
|
(f)
|
Cash, cash equivalents, U.S. government securities or high-quality debt securities that mature in one year or less from the date of investment.
|
•
|
A citizen or individual resident of the United States including an alien individual who is a lawful permanent resident of the United States or meets the “substantial presence” test under Section 7701(b) of the Code;
|
•
|
A corporation or other entity taxable as a corporation, for United States federal income tax purposes, created or organized in or under the laws of the United States or any political subdivision thereof;
|
•
|
A trust if: (i) a court in the United States has primary supervision over its administration and one or more U.S. persons have authority to control all substantial decisions of such trust, or (ii) such trust validly elects to be treated as a U.S. person for federal income tax purposes; or
|
•
|
An estate, the income of which is subject to United States federal income taxation regardless of its source.
|
•
|
maintain our qualification as a RIC; and
|
•
|
satisfy the Annual Distribution Requirement;
|
•
|
continue to qualify as a BDC under the 1940 Act at all times during each taxable year;
|
•
|
derive in each taxable year at least 90% of our gross income from dividends, interest, certain payments with respect to loans of stock and securities, gains from the sale or other disposition of stock, securities, or foreign currencies and other income (including but not limited to gains from options, futures or forward contracts) derived with respect to our business of investing in such stock, securities or currencies, and net income derived from interests in “qualified publicly traded partnerships,” as such term is defined in the Code (the “90% Income Test”); and
|
•
|
diversify our holdings so that at the end of each quarter of the taxable year:
|
•
|
at least 50% of the value of our assets consists of cash, cash equivalents, U.S. government securities, securities of other RICs, and other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of our assets and 10% of the outstanding voting securities of such issuer; and
|
•
|
no more than 25% of the value of our assets is invested in the securities, other than U.S. government securities or securities of other RICs, of one issuer, of two or more issuers that we control (as determined under applicable tax rules) and that are engaged in the same, similar or related trades or businesses or of one or more qualified publicly traded partnerships (the “Diversification Tests”).
|
Unaudited Financial Statements
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Audited Financial Statements
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Investments, at fair value:
|
|
|
|
||||
Non-control/non-affiliate investments (amortized cost of $215,488 and $209,360, respectively)
|
$
|
201,947
|
|
|
$
|
197,374
|
|
Affiliate investments (amortized cost of $122,443 and $70,402, respectively)
|
122,843
|
|
|
69,557
|
|
||
Control investments (amortized cost of $10,244 and $10,213, respectively)
|
10,674
|
|
|
10,568
|
|
||
Total investments at fair value (amortized cost of $348,175 and $289,975, respectively)
|
335,464
|
|
|
277,499
|
|
||
Cash and cash equivalents
|
31,926
|
|
|
72,952
|
|
||
Interest receivable
|
2,915
|
|
|
2,734
|
|
||
Prepaid expenses and other assets
|
4,396
|
|
|
4,593
|
|
||
Total assets
|
$
|
374,701
|
|
|
$
|
357,778
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Revolving line of credit
|
$
|
40,950
|
|
|
$
|
17,600
|
|
SBA debentures (net of deferred debt issuance costs of $2,564 and $2,657, respectively)
|
147,316
|
|
|
147,223
|
|
||
Interest payable
|
410
|
|
|
1,596
|
|
||
Management and incentive fees payable
|
2,075
|
|
|
1,987
|
|
||
Administration fee payable
|
749
|
|
|
476
|
|
||
Accrued professional fees
|
598
|
|
|
433
|
|
||
Other liabilities
|
150
|
|
|
127
|
|
||
Total liabilities
|
192,248
|
|
|
169,442
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 6)
|
|
|
|
||||
|
|
|
|
||||
Net assets
|
|
|
|
||||
Preferred stock, par value of $0.01 per share, 2,000,000 shares authorized, -0- shares issued and outstanding as of March 31, 2018, and December 31, 2017, respectively
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value of $0.01 per share, 100,000,000 shares authorized, 13,348,774 and 13,340,217 shares issued and outstanding as of March 31, 2018, and December 31, 2017, respectively
|
133
|
|
|
133
|
|
||
Paid-in capital in excess of par
|
187,512
|
|
|
187,398
|
|
||
Accumulated undistributed net investment income
|
7,273
|
|
|
9,404
|
|
||
Accumulated undistributed net realized gain
|
258
|
|
|
3,881
|
|
||
Net unrealized depreciation on investments
|
(12,723
|
)
|
|
(12,480
|
)
|
||
Total net assets
|
182,453
|
|
|
188,336
|
|
||
|
|
|
|
||||
Total liabilities and net assets
|
$
|
374,701
|
|
|
$
|
357,778
|
|
|
|
|
|
||||
Number of shares outstanding
|
13,348,774
|
|
|
13,340,217
|
|
||
Net asset value per share
|
$
|
13.67
|
|
|
$
|
14.12
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Investment income
|
|
|
|
||||
Interest income:
|
|
|
|
||||
Non-control/non-affiliate investments
|
$
|
5,758
|
|
|
$
|
4,612
|
|
Affiliate investments
|
2,085
|
|
|
1,831
|
|
||
Control investment
|
239
|
|
|
524
|
|
||
Total interest income
|
8,082
|
|
|
6,967
|
|
||
Payment-in-kind interest and dividend income:
|
|
|
|
||||
Non-control/non-affiliate investments
|
224
|
|
|
307
|
|
||
Affiliate investments
|
461
|
|
|
352
|
|
||
Control investment
|
27
|
|
|
38
|
|
||
Total payment-in-kind interest and dividend income
|
712
|
|
|
697
|
|
||
Dividend income:
|
|
|
|
||||
Non-control/non-affiliate investments
|
—
|
|
|
5
|
|
||
Affiliate investments
|
130
|
|
|
85
|
|
||
Control investments
|
33
|
|
|
33
|
|
||
Total dividend income
|
163
|
|
|
123
|
|
||
Fee income:
|
|
|
|
||||
Non-control/non-affiliate investments
|
26
|
|
|
156
|
|
||
Affiliate investments
|
2
|
|
|
58
|
|
||
Control investments
|
18
|
|
|
33
|
|
||
Total fee income
|
46
|
|
|
247
|
|
||
Total investment income
|
9,003
|
|
|
8,034
|
|
||
Expenses
|
|
|
|
||||
Interest expense
|
1,634
|
|
|
1,387
|
|
||
Management fee
|
1,360
|
|
|
1,192
|
|
||
Incentive fee
|
736
|
|
|
1,181
|
|
||
Professional fee
|
201
|
|
|
263
|
|
||
Administration fee
|
583
|
|
|
401
|
|
||
Other expenses
|
695
|
|
|
270
|
|
||
Total expenses before incentive fee waiver
|
5,209
|
|
|
4,694
|
|
||
Incentive fee waiver (see Note 3)
|
(22
|
)
|
|
—
|
|
||
Total expenses, net of incentive fee waiver
|
5,187
|
|
|
4,694
|
|
||
Net investment income
|
3,816
|
|
|
3,340
|
|
||
|
|
|
|
||||
Net realized and unrealized gain (loss) on investments
|
|
|
|
||||
Net realized gain on non-control/non-affiliate investments
|
461
|
|
|
—
|
|
||
Net realized loss on affiliate investments
|
(541
|
)
|
|
—
|
|
||
Net unrealized depreciation on non-control/non-affiliate investments
|
(1,563
|
)
|
|
(3,041
|
)
|
||
Net unrealized appreciation on affiliate investments
|
1,245
|
|
|
4,024
|
|
||
Net unrealized appreciation on control investment
|
75
|
|
|
543
|
|
||
|
|
|
|
||||
Net gain (loss) on investments
|
(323
|
)
|
|
1,526
|
|
||
|
|
|
|
||||
Net increase in net assets resulting from operations
|
$
|
3,493
|
|
|
$
|
4,866
|
|
|
|
|
|
||||
Net investment income per common share – basic and diluted
|
$
|
0.29
|
|
|
$
|
0.34
|
|
Net increase in net assets resulting from operations per common share – basic and diluted
|
$
|
0.26
|
|
|
$
|
0.50
|
|
Distributions declared per common share
|
$
|
0.71
|
|
|
$
|
0.34
|
|
Basic and diluted weighted average shares outstanding
|
13,340,502
|
|
|
9,700,329
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Increase in net assets resulting from operations:
|
|
|
|
||||
Net investment income
|
$
|
3,816
|
|
|
$
|
3,340
|
|
Net realized loss on investments
|
(80
|
)
|
|
—
|
|
||
Net unrealized appreciation (depreciation) on investments
|
(243
|
)
|
|
1,526
|
|
||
Net increase in net assets resulting from operations
|
3,493
|
|
|
4,866
|
|
||
Distributions to stockholders from:
|
|
|
|
||||
Accumulated net investment income
|
(4,536
|
)
|
|
(3,298
|
)
|
||
Accumulated net realized gain
|
(4,936
|
)
|
|
—
|
|
||
Total distributions to stockholders
|
(9,472
|
)
|
|
(3,298
|
)
|
||
Common stock transactions:
|
|
|
|
||||
Reinvestment of stockholder distributions
|
96
|
|
|
41
|
|
||
Net increase in net assets resulting from capital transactions
|
96
|
|
|
41
|
|
||
Net increase (decrease) in net assets
|
(5,883
|
)
|
|
1,609
|
|
||
Net assets:
|
|
|
|
||||
Beginning of period
|
188,336
|
|
|
143,778
|
|
||
End of period
|
$
|
182,453
|
|
|
$
|
145,387
|
|
Accumulated undistributed net investment income
|
$
|
7,273
|
|
|
$
|
6,786
|
|
Common stock activity:
|
|
|
|
||||
Common stock issued from reinvestment of stockholder distributions
|
8,557
|
|
|
2,919
|
|
||
Common stock issued and outstanding at beginning of period
|
13,340,217
|
|
|
9,700,297
|
|
||
Common stock issued and outstanding at end of period
|
13,348,774
|
|
|
9,703,216
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net increase in net assets resulting from operations
|
$
|
3,493
|
|
|
$
|
4,866
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
|
|
|
|
||||
Net realized loss on investments
|
80
|
|
|
—
|
|
||
Net unrealized (appreciation) depreciation on investments
|
243
|
|
|
(1,526
|
)
|
||
Amortization of Net Loan Fees
|
(275
|
)
|
|
(341
|
)
|
||
Payment-in-kind interest and dividend income
|
(712
|
)
|
|
(697
|
)
|
||
Amortization of deferred debt issuance costs
|
144
|
|
|
130
|
|
||
Amortization of intangible asset
|
49
|
|
|
49
|
|
||
Purchase and origination of portfolio investments
|
(98,208
|
)
|
|
(3,139
|
)
|
||
Proceeds from principal payments on portfolio investments
|
13,025
|
|
|
31,972
|
|
||
Proceeds from sale or redemption of portfolio investments
|
28,203
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Interest receivable
|
(181
|
)
|
|
706
|
|
||
Interest payable
|
(1,186
|
)
|
|
(1,189
|
)
|
||
Management and incentive fees payable
|
88
|
|
|
255
|
|
||
Administration fee payable
|
273
|
|
|
152
|
|
||
Other assets and liabilities
|
137
|
|
|
(43
|
)
|
||
Net cash provided by (used in) operating activities
|
(54,827
|
)
|
|
31,195
|
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Distributions paid to stockholders
|
(9,376
|
)
|
|
(3,257
|
)
|
||
Borrowings under revolving line of credit
|
46,250
|
|
|
5,000
|
|
||
Repayments under revolving line of credit
|
(22,900
|
)
|
|
(6,500
|
)
|
||
Payment of debt issuance costs
|
(173
|
)
|
|
—
|
|
||
Payment of common stock offering costs
|
—
|
|
|
(10
|
)
|
||
Net cash provided by (used in) financing activities
|
13,801
|
|
|
(4,767
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(41,026
|
)
|
|
26,428
|
|
||
Cash and cash equivalents — beginning of period
|
72,952
|
|
|
17,659
|
|
||
Cash and cash equivalents — end of period
|
$
|
31,926
|
|
|
$
|
44,087
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
2,676
|
|
|
$
|
2,446
|
|
Distributions paid by issuance of common stock
|
96
|
|
|
41
|
|
||
Accrued common stock offering costs
|
—
|
|
|
165
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Aegis Acquisition, Inc.
|
|
Testing Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.79%
|
|
(L +8.50%)
|
|
8/24/2021
|
|
$
|
3,520
|
|
|
$
|
3,473
|
|
|
$
|
3,364
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Armor Holdings II LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.31%
|
|
(L +9.00%)
|
|
12/26/2020
|
|
3,500
|
|
|
3,478
|
|
|
3,570
|
|
|
2.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Baymark Health Services, Inc.
|
|
Outpatient Mental Health & Sub. Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.27%
|
|
(L +8.25%)
|
|
3/1/2025
|
|
4,000
|
|
|
3,960
|
|
|
3,960
|
|
|
2.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carolina Lubes, Inc. (4) (8)
|
|
Automotive Oil Change and Lubrication Shops
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.62%
|
|
(L +7.93%)
|
|
8/23/2022
|
|
21,267
|
|
|
21,103
|
|
|
21,574
|
|
|
11.8
|
|
|||
Senior Secured Loan (Revolver)
|
|
|
|
8.94%
|
|
(L +7.25%)
|
|
8/23/2022
|
|
1,849
|
|
|
1,836
|
|
|
1,849
|
|
|
1.0
|
|
|||
Preferred Equity (811 units) 14% PIK
|
|
|
|
|
|
|
|
|
|
|
|
2,612
|
|
|
2,638
|
|
|
1.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
23,116
|
|
|
25,551
|
|
|
26,061
|
|
|
14.2
|
|
|||
Cirrus Medical Staffing, Inc. (4)
|
|
Temporary Help Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.94%
|
|
(L +8.25%)
|
|
10/19/2022
|
|
7,782
|
|
|
7,706
|
|
|
7,706
|
|
|
4.2
|
|
|||
Senior Secured Loan (Revolver)
|
|
|
|
10.94%
|
|
(L +8.25%)
|
|
10/19/2022
|
|
486
|
|
|
486
|
|
|
486
|
|
|
0.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
8,268
|
|
|
8,192
|
|
|
8,192
|
|
|
4.5
|
|
|||
Community Intervention Services, Inc. (4)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (6) (10) (11)
|
|
|
|
7.0% cash / 6.0% PIK
|
|
N/A
|
|
1/16/2021
|
|
8,658
|
|
|
7,639
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.48%
|
|
(L +9.50%)
|
|
5/8/2019
|
|
9,678
|
|
|
9,597
|
|
|
9,474
|
|
|
5.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.30%
|
|
(L +9.00%)
|
|
4/21/2025
|
|
9,950
|
|
|
9,818
|
|
|
10,059
|
|
|
5.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
Eblens Holdings, Inc.
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
12.0% cash / 1.0% PIK
|
|
N/A
|
|
1/13/2023
|
|
$
|
8,852
|
|
|
$
|
8,775
|
|
|
$
|
8,717
|
|
|
4.8
|
%
|
Common equity (71,250 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
713
|
|
|
768
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,852
|
|
|
9,488
|
|
|
9,485
|
|
|
5.2
|
|
|||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.05%
|
|
(L +6.75%)
|
|
8/27/2018
|
|
3,834
|
|
|
3,827
|
|
|
3,550
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.76%
|
|
(L +8.75%)
|
|
9/8/2024
|
|
5,000
|
|
|
4,880
|
|
|
4,966
|
|
|
2.7
|
|
|||
Common Equity (368,852 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
450
|
|
|
434
|
|
|
0.2
|
|
||||
Common Equity (40,984 Class B units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
66
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,380
|
|
|
5,466
|
|
|
2.9
|
|
|||
LRI Holding, LLC (4)
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.56%
|
|
(L +9.25%)
|
|
6/30/2022
|
|
18,038
|
|
|
17,903
|
|
|
17,828
|
|
|
9.8
|
|
|||
Preferred Equity (238,095 Series B units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
18,038
|
|
|
18,203
|
|
|
18,128
|
|
|
10.0
|
|
|||
Maverick Healthcare Equity, LLC (4)
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
109
|
|
|
0.1
|
|
||||
Common Equity (1,250,000 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
109
|
|
|
0.1
|
|
||||
My Alarm Center, LLC (4)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 Class A units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
1,571
|
|
|
1,571
|
|
|
0.9
|
|
||||
Preferred Equity (1,198 Class B units) (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
1,198
|
|
|
826
|
|
|
0.5
|
|
||||
Common Equity (64,149 units) (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
2,769
|
|
|
2,397
|
|
|
1.4
|
|
||||
Online Tech Stores, LLC (4)
|
|
Stationary & Office Supply Merchant Wholesaler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.0% PIK
|
|
N/A
|
|
8/1/2023
|
|
16,025
|
|
|
15,715
|
|
|
15,715
|
|
|
8.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
O2 Holdings, LLC (4)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
14.88%
|
|
(L +13.00%)
|
|
9/2/2021
|
|
13,850
|
|
|
13,493
|
|
|
14,027
|
|
|
7.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
Parfums Holding Company, Inc.
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.06%
|
|
(L +8.75%)
|
|
6/30/2025
|
|
$
|
3,520
|
|
|
$
|
3,493
|
|
|
$
|
3,516
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Planet Fitness Midwest LLC (4)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
12/16/2021
|
|
5,000
|
|
|
4,966
|
|
|
4,994
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 1.0% PIK
|
|
N/A
|
|
10/29/2021
|
|
5,556
|
|
|
5,489
|
|
|
5,383
|
|
|
3.0
|
|
|||
Common equity (499 units) (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
393
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,556
|
|
|
5,988
|
|
|
5,776
|
|
|
3.2
|
|
|||
Resource Label Group, LLC
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.80%
|
|
(L +8.50%)
|
|
11/26/2023
|
|
4,821
|
|
|
4,758
|
|
|
4,748
|
|
|
2.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
RPLF Holdings, LLC
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Common Equity (254,110 Class A units) (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
254
|
|
|
254
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (4)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (14)
|
|
|
|
15.31% cash / 0.69% PIK
|
|
(L +13.00%)
|
|
6/19/2020
|
|
12,547
|
|
|
12,471
|
|
|
12,499
|
|
|
6.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (15)
|
|
|
|
13.38%
|
|
(L +11.50%)
|
|
7/24/2020
|
|
8,880
|
|
|
8,800
|
|
|
8,800
|
|
|
4.8
|
|
|||
Preferred Equity (5,000 Series C units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
537
|
|
|
574
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,880
|
|
|
9,337
|
|
|
9,374
|
|
|
5.1
|
|
|||
Southern Technical Institute, LLC (4)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (6)(10)
|
|
|
|
15.00% PIK
|
|
N/A
|
|
12/2/2020
|
|
3,790
|
|
|
3,451
|
|
|
—
|
|
|
—
|
|
|||
Preferred Equity (1,764,720 Class SP-1 units), 15.75% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Warrants (2,174,905 Class A units) (10)
|
|
|
|
|
|
|
|
3/30/2026 (12)
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,790
|
|
|
5,591
|
|
|
—
|
|
|
—
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
Stancor, L.P. (4)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.88%
|
|
(L +8.00%)
|
|
8/19/2019
|
|
$
|
11,652
|
|
|
$
|
11,633
|
|
|
$
|
11,640
|
|
|
6.4
|
%
|
Preferred Equity (1,250,000 Class A units), 8% PIK (7) (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,461
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
11,652
|
|
|
13,134
|
|
|
13,101
|
|
|
7.2
|
|
|||
The Escape Game, LLC (4)
|
|
Other amusement and recreation industries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.14%
|
|
(L +8.75%)
|
|
12/22/2022
|
|
7,000
|
|
|
6,950
|
|
|
6,918
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Truck Hero, Inc.
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.47%
|
|
(L +8.25%)
|
|
4/21/2025
|
|
7,014
|
|
|
6,972
|
|
|
7,083
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (4)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (151,787 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
20
|
|
|
—
|
|
||||
Warrants (29,374 units) (10)
|
|
|
|
|
|
|
|
03/05/2022 (12)
|
|
|
|
82
|
|
|
107
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
127
|
|
|
0.1
|
|
||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
206,069
|
|
|
215,488
|
|
|
201,947
|
|
|
110.8
|
|
|||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
3rd Rock Gaming Holdings, LLC
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.59%
|
|
(L +7.50%)
|
|
3/12/2023
|
|
22,000
|
|
|
21,673
|
|
|
21,673
|
|
|
11.9
|
%
|
|||
Preferred Equity (2,547,250 units), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
2,560
|
|
|
2,560
|
|
|
1.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
22,000
|
|
|
24,233
|
|
|
24,233
|
|
|
13.3
|
%
|
|||
All Metals Holding, LLC (4)
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.0% cash / 1.0% PIK
|
|
N/A
|
|
12/28/2021
|
|
19,352
|
|
|
18,807
|
|
|
19,059
|
|
|
10.4
|
|
|||
Common Equity (797,443 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
523
|
|
|
2,129
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
19,352
|
|
|
19,330
|
|
|
21,188
|
|
|
11.6
|
|
|||
Contract Datascan Holdings, Inc. (4)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
2/5/2021
|
|
8,000
|
|
|
7,986
|
|
|
8,000
|
|
|
4.4
|
|
|||
Preferred Equity (3,061 Series A shares), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
4,490
|
|
|
6,107
|
|
|
3.3
|
|
||||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
1,268
|
|
|
0.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
12,580
|
|
|
15,375
|
|
|
8.4
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
DRS IMAGING SERVICES, LLC (4)
|
|
Data Processing, Hosting, and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (9)
|
|
|
|
12.55%
|
|
(L +10.50%)
|
|
3/8/2023
|
|
$
|
5,446
|
|
|
$
|
5,343
|
|
|
$
|
5,343
|
|
|
2.9
|
%
|
Common Equity (453 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
454
|
|
|
454
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,446
|
|
|
5,797
|
|
|
5,797
|
|
|
3.1
|
|
|||
Jobson Healthcare Information, LLC (4) (9)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
10.13% cash / 5.55% PIK
|
|
(L +8.13%)
|
|
7/21/2019
|
|
15,660
|
|
|
15,452
|
|
|
13,403
|
|
|
7.3
|
|
|||
Common Equity (13 member units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,660
|
|
|
15,452
|
|
|
13,403
|
|
|
7.3
|
|
|||
Master Cutlery, LLC (4)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (11)
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2020
|
|
4,819
|
|
|
4,762
|
|
|
2,559
|
|
|
1.4
|
|
|||
Preferred Equity (3,723 Series A units), 8% PIK (7) (10)
|
|
|
|
|
|
|
|
|
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
||||
Common Equity (15,564 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,819
|
|
|
8,245
|
|
|
2,559
|
|
|
1.4
|
|
|||
NeoSystems Corp. (4)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.25% PIK
|
|
N/A
|
|
8/13/2019
|
|
2,149
|
|
|
2,144
|
|
|
2,149
|
|
|
1.2
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK
|
|
|
|
|
|
|
|
|
|
|
|
1,426
|
|
|
2,250
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
2,149
|
|
|
3,570
|
|
|
4,399
|
|
|
2.4
|
|
|||
Pfanstiehl Holdings, Inc. (4)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
9/29/2022
|
|
3,788
|
|
|
3,820
|
|
|
3,820
|
|
|
2.1
|
|
|||
Common Equity (400 Class A shares)
|
|
|
|
|
|
|
|
|
|
|
|
217
|
|
|
5,270
|
|
|
2.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,037
|
|
|
9,090
|
|
|
5.0
|
|
|||
Professional Pipe Holdings, LLC
|
|
Plumbing, Heating, and Air-Conditioning Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.11%
|
|
(L +10.25%)
|
|
3/23/2023
|
|
8,486
|
|
|
8,317
|
|
|
8,317
|
|
|
4.6
|
|
|||
Common Equity (1,414 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,414
|
|
|
1,414
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,486
|
|
|
9,731
|
|
|
9,731
|
|
|
5.4
|
|
Portfolio Company(1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above Index (2)
|
|
Maturity
|
|
Principal Amount
|
|
Amortized Cost
|
|
Fair Value (3)
|
|
Percent of Net Assets
|
|||||||
TRS Services, LLC (4)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.63% cash / 1.00% PIK
|
|
(L +8.75%)
|
|
12/10/2019
|
|
$
|
15,222
|
|
|
$
|
15,106
|
|
|
$
|
15,028
|
|
|
8.2
|
%
|
Preferred Equity (329,266 Class AA units), 15% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
416
|
|
|
425
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 Class A units), 11% PIK (7)
|
|
|
|
|
|
|
|
|
|
|
|
3,374
|
|
|
1,615
|
|
|
0.9
|
|
||||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,222
|
|
|
19,468
|
|
|
17,068
|
|
|
9.3
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
104,922
|
|
|
122,443
|
|
|
122,843
|
|
|
67.2
|
|
|||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (4)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
13.38% cash / 1.5% PIK
|
|
(L +11.50%)
|
|
11/25/2020
|
|
7,213
|
|
|
7,175
|
|
|
7,218
|
|
|
4.0
|
|
|||
Common Equity (554 shares)
|
|
|
|
|
|
|
|
|
|
|
|
3,069
|
|
|
3,456
|
|
|
1.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,213
|
|
|
10,244
|
|
|
10,674
|
|
|
5.9
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
7,213
|
|
|
10,244
|
|
|
10,674
|
|
|
5.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
$
|
318,204
|
|
|
$
|
348,175
|
|
|
$
|
335,464
|
|
|
183.9
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company.
|
(2)
|
Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), and reset monthly, quarterly, or semi-annually. Approximately 6% of the Company's LIBOR referenced investments are subject to a reference rate floor at March 31, 2018, with a reference rate floor of 2.00%. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at March 31, 2018. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See
Note 5
for further details.
|
(4)
|
Investments (or portion thereof) held by OFS SBIC I, LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(5)
|
Reserved.
|
(6)
|
Investment was on non-accrual status as of March 31, 2018, meaning the Company has ceased recognizing all or a portion of income on the investment. See
Note 2
,
Non-accrual loans
for further details.
|
(7)
|
The fair value of the accrued PIK dividend at March 31, 2018 was $-0-.
|
(8)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 9.62% at March 31, 2018, includes additional interest of 0.68% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(9)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 12.55% at March 31, 2018, includes additional interest of 2.5% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
Non-income producing.
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
13.0% or 12.0%
|
|
1.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.5% or 5.55%
|
|
14.18% or 10.13%
|
|
5.55
|
%
|
Master Cultery, LLC
|
|
Senior Secured Loan
|
|
0% to 13.00%
|
|
13.00% to 0%
|
|
13.00
|
%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or portion of investment held by a wholly-owned subsidiary subject to income tax.
|
(14)
|
The PIK provision is reset at the beginning of each interest period equal to the excess of reference rate over the reference rate floor of 1.00%. The PIK interest rate in the schedule represents the current PIK interest rate in effect.
|
(15)
|
Maximum interest rate allowed is 13.50%.
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aegis Acquisition, Inc.
|
|
Testing Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.17%
|
|
(L +8.50%)
|
|
8/24/2021
|
|
$
|
3,520
|
|
|
$
|
3,470
|
|
|
$
|
3,439
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Armor Holdings II LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.70%
|
|
(L +9.00%)
|
|
12/26/2020
|
|
3,500
|
|
|
3,476
|
|
|
3,570
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Avison Young Canada, Inc.
|
|
Offices of Real Estate Agents and Brokers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (5) (6)
|
|
|
|
9.50%
|
|
N/A
|
|
12/15/2021
|
|
4,000
|
|
|
3,939
|
|
|
4,070
|
|
|
2.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
BJ's Wholesale Club, Inc.
|
|
Warehouse Clubs and Supercenters
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.95%
|
|
(L +7.50%)
|
|
2/3/2025
|
|
9,268
|
|
|
9,158
|
|
|
9,063
|
|
|
4.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carolina Lubes, Inc. (5) (9)
|
|
Automotive Oil Change and Lubrication Shops
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.28%
|
|
(L +7.25%)
|
|
8/23/2022
|
|
21,411
|
|
|
21,236
|
|
|
21,430
|
|
|
11.4
|
|
|||
Senior Secured Loan (Revolver)
|
|
|
|
8.59%
|
|
(L +7.25%)
|
|
8/23/2022
|
|
487
|
|
|
473
|
|
|
489
|
|
|
0.3
|
|
|||
Preferred Equity (973 units) 14% PIK
|
|
|
|
|
|
|
|
|
|
|
|
3,039
|
|
|
3,065
|
|
|
1.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
21,898
|
|
|
24,748
|
|
|
24,984
|
|
|
13.3
|
|
|||
Community Intervention Services, Inc. (5)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (7) (11)
|
|
|
|
7.0% cash / 6.0% PIK
|
|
N/A
|
|
1/16/2021
|
|
8,530
|
|
|
7,639
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.98%
|
|
(L +9.50%)
|
|
5/8/2019
|
|
9,678
|
|
|
9,579
|
|
|
9,417
|
|
|
5.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.69%
|
|
(L +9.00%)
|
|
4/21/2025
|
|
9,950
|
|
|
9,813
|
|
|
9,919
|
|
|
5.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
DuPage Medical Group
|
|
Offices of Physicians, Mental Health Specialists
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.42%
|
|
(L +7.00%)
|
|
8/15/2025
|
|
5,600
|
|
|
5,547
|
|
|
5,503
|
|
|
2.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Eblens Holdings, Inc.
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.0% cash / 1.00% PIK
|
|
N/A
|
|
1/13/2023
|
|
$
|
8,830
|
|
|
$
|
8,749
|
|
|
$
|
8,726
|
|
|
4.6
|
%
|
Common Equity (71,250 Class A units)
|
|
|
|
|
|
|
|
|
|
|
|
713
|
|
|
771
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,830
|
|
|
9,462
|
|
|
9,497
|
|
|
5.0
|
|
|||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.44%
|
|
(L +6.75%)
|
|
8/27/2018
|
|
3,888
|
|
|
3,873
|
|
|
3,544
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.23%
|
|
(L +8.75%)
|
|
9/8/2024
|
|
5,000
|
|
|
4,875
|
|
|
4,875
|
|
|
2.6
|
|
|||
Common Equity (368,852 Class A units)
|
|
|
|
|
|
|
|
|
|
|
|
450
|
|
|
450
|
|
|
0.2
|
|
||||
Common Equity (40,984 Class B units)
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
50
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,375
|
|
|
5,375
|
|
|
2.8
|
|
|||
LRI Holding, LLC (5)
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.94%
|
|
(L +9.25%)
|
|
6/30/2022
|
|
18,269
|
|
|
18,125
|
|
|
18,205
|
|
|
9.7
|
|
|||
Preferred Equity (238,095 Series B units)
|
|
|
|
|
|
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
18,269
|
|
|
18,425
|
|
|
18,505
|
|
|
9.9
|
|
|||
Maverick Healthcare Equity, LLC (5)
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
Common Equity (1,250,000 Class A units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
My Alarm Center, LLC (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 Class A units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
1,540
|
|
|
1,540
|
|
|
0.8
|
|
||||
Preferred Equity (1,198 Class B units)
|
|
|
|
|
|
|
|
|
|
|
|
1,198
|
|
|
1,198
|
|
|
0.6
|
|
||||
Common Equity (64,149 units) (13)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
2,738
|
|
|
2,781
|
|
|
1.4
|
|
||||
NVA Holdings, Inc.
|
|
Veterinary Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.69%
|
|
(L +7.00%)
|
|
8/14/2022
|
|
743
|
|
|
743
|
|
|
748
|
|
|
0.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
O2 Holdings, LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
14.56%
|
|
(L +13.00%)
|
|
9/2/2021
|
|
13,350
|
|
|
12,977
|
|
|
13,617
|
|
|
7.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Parfums Holding Company, Inc.
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.45%
|
|
(L +8.75%)
|
|
6/30/2025
|
|
$
|
3,520
|
|
|
$
|
3,492
|
|
|
$
|
3,472
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Planet Fitness Midwest LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
12/16/2021
|
|
5,000
|
|
|
4,964
|
|
|
5,011
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 1.00% PIK
|
|
N/A
|
|
10/29/2021
|
|
6,187
|
|
|
6,108
|
|
|
6,059
|
|
|
3.2
|
|
|||
Common equity (499 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
278
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,187
|
|
|
6,607
|
|
|
6,337
|
|
|
3.3
|
|
|||
Resource Label Group, LLC
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.19%
|
|
(L +8.50%)
|
|
11/26/2023
|
|
4,821
|
|
|
4,755
|
|
|
4,767
|
|
|
2.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (14)
|
|
|
|
14.00% cash / 0.69% PIK
|
|
(L +13.00%)
|
|
6/19/2020
|
|
12,525
|
|
|
12,441
|
|
|
12,364
|
|
|
6.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
13.07%
|
|
(L +11.50%)
|
|
7/24/2019
|
|
4,195
|
|
|
4,156
|
|
|
4,259
|
|
|
2.3
|
|
|||
Preferred Equity (5,000 Series C units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
527
|
|
|
527
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,195
|
|
|
4,683
|
|
|
4,786
|
|
|
2.6
|
|
|||
Southern Technical Institute, LLC (5)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (10)
|
|
|
|
15.00% PIK
|
|
N/A
|
|
12/2/2020
|
|
3,520
|
|
|
3,451
|
|
|
1,201
|
|
|
0.6
|
|
|||
Preferred Equity (1,764,720 Class SP-1 units), 15.75% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Warrants (2,174,905 Class A units) (10)
|
|
|
|
|
|
|
|
3/30/2026
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,520
|
|
|
5,591
|
|
|
1,201
|
|
|
0.6
|
|
|||
Stancor, L.P. (5)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.56%
|
|
(L +8.00%)
|
|
8/19/2019
|
|
$
|
7,919
|
|
|
$
|
7,896
|
|
|
$
|
7,919
|
|
|
4.2
|
%
|
Preferred Equity (1,250,000 Class A units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,486
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,919
|
|
|
9,397
|
|
|
9,405
|
|
|
5.0
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
The Escape Game, LLC (5)
|
|
Other amusement and recreation industries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.32%
|
|
(L +8.75%)
|
|
12/20/2022
|
|
7,000
|
|
|
6,948
|
|
|
6,948
|
|
|
3.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TravelCLICK, Inc.
|
|
Computer Systems Design and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.32%
|
|
(L +7.75%)
|
|
11/6/2021
|
|
7,334
|
|
|
7,303
|
|
|
7,334
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Truck Hero, Inc.
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.89%
|
|
(L +8.25%)
|
|
4/21/2025
|
|
7,014
|
|
|
6,971
|
|
|
7,064
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (5)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
12.00% cash / 2.00% PIK
|
|
N/A
|
|
4/30/2018
|
|
4,266
|
|
|
4,248
|
|
|
4,266
|
|
|
2.3
|
|
|||
Subordinated Loan (10)
|
|
|
|
8.00 % PIK
|
|
N/A
|
|
4/30/2019
|
|
7
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|||
Preferred Equity (151,787 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
92
|
|
|
—
|
|
||||
Warrants (29,374 units) (10)
|
|
|
|
|
|
|
|
3/5/2022
|
|
|
|
82
|
|
|
147
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,273
|
|
|
4,346
|
|
|
4,512
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
199,332
|
|
|
209,360
|
|
|
197,374
|
|
|
104.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
All Metals Holding, LLC (5)
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.00% cash / 1.00% PIK
|
|
N/A
|
|
12/28/2021
|
|
12,869
|
|
|
12,288
|
|
|
12,759
|
|
|
6.8
|
|
|||
Common Equity (637,954 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
565
|
|
|
1,785
|
|
|
0.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
12,869
|
|
|
12,853
|
|
|
14,544
|
|
|
7.7
|
|
|||
Contract Datascan Holdings, Inc. (5)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
2/5/2021
|
|
$
|
8,000
|
|
|
$
|
7,985
|
|
|
$
|
8,000
|
|
|
4.2
|
%
|
Preferred Equity (3,061 Series A shares), 10% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
4,347
|
|
|
5,964
|
|
|
3.2
|
|
||||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
260
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
12,436
|
|
|
14,224
|
|
|
7.5
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Jobson Healthcare Information, LLC (5) (9)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
10.13% cash / 5.30% PIK
|
|
(L +13.43%)
|
|
7/21/2019
|
|
$
|
15,447
|
|
|
$
|
15,241
|
|
|
$
|
12,910
|
|
|
6.9
|
%
|
Common Equity (13 member units)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants (1 member unit) (10)
|
|
|
|
|
|
|
|
7/21/2019
|
|
|
|
454
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,447
|
|
|
15,695
|
|
|
12,910
|
|
|
6.9
|
|
|||
Master Cutlery, LLC (5)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2020
|
|
4,705
|
|
|
4,692
|
|
|
2,873
|
|
|
1.5
|
|
|||
Preferred Equity (3,723 Series A units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
||||
Common Equity (15,564 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,705
|
|
|
8,175
|
|
|
2,873
|
|
|
1.5
|
|
|||
NeoSystems Corp.(5)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.25% PIK
|
|
N/A
|
|
8/13/2019
|
|
2,143
|
|
|
2,136
|
|
|
2,143
|
|
|
1.1
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,390
|
|
|
2,248
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
2,143
|
|
|
3,526
|
|
|
4,391
|
|
|
2.3
|
|
|||
Pfanstiehl Holdings, Inc. (5)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
9/29/2021
|
|
3,788
|
|
|
3,823
|
|
|
3,755
|
|
|
2.0
|
|
|||
Common Equity (400 Class A shares)
|
|
|
|
|
|
|
|
|
|
|
|
217
|
|
|
4,755
|
|
|
2.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,040
|
|
|
8,510
|
|
|
4.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TRS Services, LLC (5)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.07%
|
|
(L +8.50%)
|
|
12/10/2019
|
|
$
|
9,466
|
|
|
$
|
9,330
|
|
|
$
|
9,466
|
|
|
5.0
|
%
|
Preferred Equity (329,266 Class AA units), 15% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
401
|
|
|
409
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 Class A units), 11% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
3,374
|
|
|
2,230
|
|
|
1.2
|
|
||||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
9,466
|
|
|
13,677
|
|
|
12,105
|
|
|
6.4
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
56,418
|
|
|
70,402
|
|
|
69,557
|
|
|
36.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (2) (5)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
13.07% cash / 1.50% PIK
|
|
(L +13.50%)
|
|
11/25/2020
|
|
$
|
7,186
|
|
|
$
|
7,144
|
|
|
$
|
7,118
|
|
|
3.8
|
%
|
Common Equity (554 shares)
|
|
|
|
|
|
|
|
|
|
|
|
3,069
|
|
|
3,450
|
|
|
1.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
$
|
262,936
|
|
|
$
|
289,975
|
|
|
$
|
277,499
|
|
|
147.3
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company.
|
(2)
|
Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), and reset monthly, quarterly, or semi-annually. Approximately 7% of the Company's LIBOR referenced investments are subject to a reference rate floor at December 31, 2017, with a reference rate floor of 2.00%. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at December 31, 2017. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See Note 6 for further details.
|
(4)
|
The negative amount represents the excess of the par value of an unfunded commitment in excess of its fair value.
|
(5)
|
Investments (or portion thereof) held by OFS SBIC I, LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(6)
|
Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets. As of December 31, 2017, 97.53% of the Company's assets were qualifying assets.
|
(7)
|
Investment was on non-accrual status as of December 31, 2017, meaning the Company has ceased recognizing all or a portion of income on the investment. See Note 2,
Non-accrual loans
for further details.
|
(8)
|
The fair value of the most-recently recognized PIK dividend as of December 31, 2017, was $0.
|
(9)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 9.28% at December 31, 2017, includes additional interest of 0.69% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
Non-income producing.
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
13.00% or 12.00%
|
|
1.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.50% to 5.30%
|
|
13.93% to 10.13%
|
|
5.30
|
%
|
United Biologics Holdings, LLC
|
|
Senior Secured Loan
|
|
0% or 2.00%
|
|
14.00% or 12.00%
|
|
2.00
|
%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or portion of investment held by a wholly-owned subsidiary subject to income tax.
|
(14)
|
The PIK provision is reset at the beginning of each interest period equal to the excess of reference rate over the reference rate floor of 1.00%. The PIK interest rate in the schedule represents the current PIK interest rate in effect.
|
|
|
|
|
|
|
Amortized Cost
|
|
Percentage of Net Assets
|
|
Fair Value
|
|
Percentage of Net Assets
|
||||||
Senior secured debt investments
|
$
|
234,353
|
|
|
128.5
|
%
|
|
$
|
233,324
|
|
|
127.9
|
%
|
Subordinated debt investments
|
78,904
|
|
|
43.2
|
|
|
65,671
|
|
|
36.0
|
|
||
Preferred equity
|
26,471
|
|
|
14.5
|
|
|
20,456
|
|
|
11.2
|
|
||
Common equity and warrants
|
8,447
|
|
|
4.6
|
|
|
16,013
|
|
|
8.8
|
|
||
Total
|
348,175
|
|
|
190.8
|
%
|
|
335,464
|
|
|
183.9
|
%
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Security Systems Services (except Locksmiths)
|
|
$
|
15,240
|
|
|
4.4
|
%
|
|
8.4
|
%
|
|
$
|
14,896
|
|
|
4.4
|
%
|
|
8.2
|
%
|
Temporary Help Services
|
|
8,192
|
|
|
2.4
|
|
|
4.5
|
|
|
8,192
|
|
|
2.4
|
|
|
4.5
|
|
||
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fitness and Recreational Sports Centers
|
|
18,459
|
|
|
5.3
|
|
|
10.0
|
|
|
19,021
|
|
|
5.7
|
|
|
10.4
|
|
||
Other amusement and recreation industries
|
|
6,950
|
|
|
2.0
|
|
|
3.8
|
|
|
6,918
|
|
|
2.1
|
|
|
3.8
|
|
||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electrical Contractors and Other Wiring Installation Contractors
|
|
18,203
|
|
|
5.2
|
|
|
10.0
|
|
|
18,128
|
|
|
5.4
|
|
|
9.9
|
|
||
Plumbing, Heating, and Air-Conditioning Contractors
|
|
9,731
|
|
|
2.8
|
|
|
5.3
|
|
|
9,731
|
|
|
2.9
|
|
|
5.3
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
5,591
|
|
|
1.6
|
|
|
3.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Insurance Agencies and Brokerages
|
|
9,597
|
|
|
2.8
|
|
|
5.3
|
|
|
9,474
|
|
|
2.8
|
|
|
5.2
|
|
||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Laboratories
|
|
91
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
0.1
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
11,599
|
|
|
3.3
|
|
|
6.4
|
|
|
3,960
|
|
|
1.2
|
|
|
2.2
|
|
||
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Data Processing, Hosting, and Related Services
|
|
5,797
|
|
|
1.7
|
|
|
3.2
|
|
|
5,797
|
|
|
1.7
|
|
|
3.2
|
|
||
Software Publishers
|
|
24,487
|
|
|
7.0
|
|
|
13.4
|
|
|
24,487
|
|
|
7.3
|
|
|
13.4
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
3,827
|
|
|
1.1
|
|
|
2.1
|
|
|
3,550
|
|
|
1.1
|
|
|
1.9
|
|
||
Commercial Printing (except Screen and Books)
|
|
4,758
|
|
|
1.4
|
|
|
2.6
|
|
|
4,748
|
|
|
1.4
|
|
|
2.6
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
5,380
|
|
|
1.5
|
|
|
2.9
|
|
|
5,466
|
|
|
1.6
|
|
|
3.0
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,037
|
|
|
1.2
|
|
|
2.2
|
|
|
9,090
|
|
|
2.7
|
|
|
5.0
|
|
||
Pump and Pumping Equipment Manufacturing
|
|
13,134
|
|
|
3.8
|
|
|
7.2
|
|
|
13,101
|
|
|
3.9
|
|
|
7.2
|
|
||
Travel Trailer and Camper Manufacturing
|
|
10,244
|
|
|
2.9
|
|
|
5.6
|
|
|
10,674
|
|
|
3.3
|
|
|
5.9
|
|
||
Truck Trailer Manufacturing
|
|
6,972
|
|
|
2.0
|
|
|
3.8
|
|
|
7,083
|
|
|
2.1
|
|
|
3.9
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Oil Change and Lubrication Shops
|
|
25,551
|
|
|
7.3
|
|
|
14.0
|
|
|
26,061
|
|
|
7.8
|
|
|
14.3
|
|
||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
19,468
|
|
|
5.6
|
|
|
10.7
|
|
|
17,068
|
|
|
5.1
|
|
|
9.4
|
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Accounting Services
|
|
$
|
3,570
|
|
|
1.0
|
%
|
|
2.0
|
%
|
|
$
|
4,399
|
|
|
1.3
|
%
|
|
2.4
|
%
|
Other Professional, Scientific, and Technical Services
|
|
28,267
|
|
|
8.1
|
|
|
15.5
|
|
|
26,347
|
|
|
7.9
|
|
|
14.4
|
|
||
Testing Laboratories
|
|
3,473
|
|
|
1.0
|
|
|
1.9
|
|
|
3,364
|
|
|
1.0
|
|
|
1.8
|
|
||
Public Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Justice, Public Order, and Safety Activities
|
|
9,818
|
|
|
2.8
|
|
|
5.4
|
|
|
10,059
|
|
|
3.0
|
|
|
5.5
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Health Equipment Rental
|
|
900
|
|
|
0.3
|
|
|
0.5
|
|
|
109
|
|
|
—
|
|
|
0.1
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
12,580
|
|
|
3.6
|
|
|
6.9
|
|
|
15,375
|
|
|
4.6
|
|
|
8.4
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
3,493
|
|
|
1.0
|
|
|
1.9
|
|
|
3,516
|
|
|
1.0
|
|
|
1.9
|
|
||
Shoe store
|
|
9,488
|
|
|
2.7
|
|
|
5.2
|
|
|
9,485
|
|
|
2.8
|
|
|
5.2
|
|
||
All Other General Merchandise Stores
|
|
5,988
|
|
|
1.7
|
|
|
3.3
|
|
|
5,776
|
|
|
1.7
|
|
|
3.2
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
19,330
|
|
|
5.6
|
|
|
10.6
|
|
|
21,188
|
|
|
6.3
|
|
|
11.6
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,245
|
|
|
2.4
|
|
|
4.5
|
|
|
2,559
|
|
|
0.8
|
|
|
1.4
|
|
||
Stationary & Office Supply Merchant Wholesaler
|
|
15,715
|
|
|
4.5
|
|
|
8.6
|
|
|
15,715
|
|
|
4.7
|
|
|
8.6
|
|
||
|
|
$
|
348,175
|
|
|
100.0
|
%
|
|
190.8
|
%
|
|
$
|
335,464
|
|
|
100.0
|
%
|
|
183.9
|
%
|
|
Amortized Cost
|
|
Percentage of Net Assets
|
|
Fair Value
|
|
Percentage of Net Assets
|
||||||
Senior secured debt investments
|
$
|
196,020
|
|
|
104.1
|
%
|
|
$
|
195,112
|
|
|
103.5
|
%
|
Subordinated debt investments
|
63,031
|
|
|
33.5
|
|
|
51,198
|
|
|
27.2
|
|
||
Preferred equity
|
24,103
|
|
|
12.8
|
|
|
19,200
|
|
|
10.2
|
|
||
Common equity and warrants
|
6,821
|
|
|
3.6
|
|
|
11,989
|
|
|
6.4
|
|
||
Total
|
$
|
289,975
|
|
|
154.0
|
%
|
|
$
|
277,499
|
|
|
147.3
|
%
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Security Systems Services (except Locksmiths)
|
|
$
|
15,179
|
|
|
5.2
|
%
|
|
8.1
|
%
|
|
$
|
15,145
|
|
|
5.5
|
%
|
|
8.0
|
%
|
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fitness and Recreational Sports Centers
|
|
17,941
|
|
|
6.2
|
|
|
9.5
|
|
|
18,628
|
|
|
6.7
|
|
|
9.9
|
|
||
Other Amusement and Recreation Industries
|
|
6,948
|
|
|
2.4
|
|
|
3.7
|
|
|
6,948
|
|
|
2.5
|
|
|
3.7
|
|
||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electrical Contractors and Other Wiring Installation Contractors
|
|
18,425
|
|
|
6.4
|
|
|
9.8
|
|
|
18,505
|
|
|
6.7
|
|
|
9.8
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
5,591
|
|
|
1.9
|
|
|
3.0
|
|
|
1,201
|
|
|
0.4
|
|
|
0.6
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Insurance Agencies and Brokerages
|
|
9,579
|
|
|
3.3
|
|
|
5.1
|
|
|
9,417
|
|
|
3.4
|
|
|
5.0
|
|
||
Offices of Real Estate Agents and Brokers
|
|
3,939
|
|
|
1.4
|
|
|
2.1
|
|
|
4,070
|
|
|
1.5
|
|
|
2.2
|
|
||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Laboratories
|
|
4,346
|
|
|
1.5
|
|
|
2.3
|
|
|
4,512
|
|
|
1.6
|
|
|
2.4
|
|
||
Offices of Physicians, Mental Health Specialists
|
|
5,547
|
|
|
1.9
|
|
|
2.9
|
|
|
5,503
|
|
|
2.0
|
|
|
2.9
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
7,639
|
|
|
2.6
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
3,873
|
|
|
1.3
|
|
|
2.1
|
|
|
3,544
|
|
|
1.3
|
|
|
1.9
|
|
||
Commercial Printing (except Screen and Books)
|
|
4,755
|
|
|
1.6
|
|
|
2.5
|
|
|
4,767
|
|
|
1.7
|
|
|
2.5
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,040
|
|
|
1.4
|
|
|
2.1
|
|
|
8,510
|
|
|
3.1
|
|
|
4.5
|
|
||
Pump and Pumping Equipment Manufacturing
|
|
9,397
|
|
|
3.2
|
|
|
5.0
|
|
|
9,405
|
|
|
3.4
|
|
|
5.0
|
|
||
Travel Trailer and Camper Manufacturing
|
|
10,213
|
|
|
3.5
|
|
|
5.5
|
|
|
10,568
|
|
|
3.7
|
|
|
5.5
|
|
||
Truck Trailer Manufacturing
|
|
6,971
|
|
|
2.4
|
|
|
3.8
|
|
|
7,064
|
|
|
2.5
|
|
|
3.7
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Oil Change and Lubrication Shops
|
|
24,748
|
|
|
8.5
|
|
|
13.1
|
|
|
24,984
|
|
|
9.0
|
|
|
13.3
|
|
||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
13,677
|
|
|
4.8
|
|
|
7.3
|
|
|
12,105
|
|
|
4.4
|
|
|
6.4
|
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computer Systems Design and Related Services
|
|
$
|
7,303
|
|
|
2.5
|
%
|
|
3.9
|
%
|
|
$
|
7,334
|
|
|
2.6
|
%
|
|
3.9
|
%
|
Other Accounting Services
|
|
3,526
|
|
|
1.2
|
|
|
1.9
|
|
|
4,391
|
|
|
1.6
|
|
|
2.3
|
|
||
Other Professional, Scientific, and Technical Services
|
|
23,854
|
|
|
8.2
|
|
|
12.7
|
|
|
21,266
|
|
|
7.7
|
|
|
11.3
|
|
||
Testing Laboratories
|
|
3,470
|
|
|
1.2
|
|
|
1.8
|
|
|
3,439
|
|
|
1.2
|
|
|
1.8
|
|
||
Veterinary Services
|
|
743
|
|
|
0.3
|
|
|
0.4
|
|
|
748
|
|
|
0.3
|
|
|
0.4
|
|
||
Public Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Justice, Public Order, and Safety Activities
|
|
9,813
|
|
|
3.4
|
|
|
5.2
|
|
|
9,919
|
|
|
3.6
|
|
|
5.3
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Health Equipment Rental
|
|
900
|
|
|
0.3
|
|
|
0.5
|
|
|
141
|
|
|
0.1
|
|
|
0.1
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
12,436
|
|
|
4.3
|
|
|
6.6
|
|
|
14,224
|
|
|
5.1
|
|
|
7.6
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
3,492
|
|
|
1.2
|
|
|
1.9
|
|
|
3,472
|
|
|
1.3
|
|
|
1.8
|
|
||
Shoe store
|
|
9,462
|
|
|
3.3
|
|
|
5.0
|
|
|
9,497
|
|
|
3.4
|
|
|
5.0
|
|
||
Warehouse Clubs and Supercenters
|
|
9,158
|
|
|
3.2
|
|
|
4.9
|
|
|
9,063
|
|
|
3.3
|
|
|
4.8
|
|
||
All Other General Merchandise Stores
|
|
6,607
|
|
|
2.3
|
|
|
3.5
|
|
|
6,337
|
|
|
2.3
|
|
|
3.4
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
12,853
|
|
|
4.4
|
|
|
6.8
|
|
|
14,544
|
|
|
5.2
|
|
|
7.7
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,175
|
|
|
2.8
|
|
|
4.3
|
|
|
2,873
|
|
|
1.0
|
|
|
1.5
|
|
||
|
|
$
|
289,975
|
|
|
100.0
|
%
|
|
154.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
147.3
|
%
|
•
|
For each debt investment, a basic credit risk rating review process is completed. The risk rating on every credit facility is reviewed and either reaffirmed or revised by OFS Advisor’s investment committee.
|
•
|
Each portfolio company or investment is valued by OFS Advisor.
|
•
|
The preliminary valuations are documented and are then submitted to OFS Advisor’s investment committee for ratification.
|
•
|
Third-party valuation firm(s) provide valuation services as requested, by reviewing the investment committee’s preliminary valuations. OFS Advisor’s investment committee’s preliminary fair value conclusions on each of the Company’s assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the audit committee of the Company’s Board or required by the Company’s valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or other valuation method based on the discretion of the Company’s Board.
|
•
|
The audit committee of the Board reviews the preliminary valuations of OFS Advisor’s investment committee and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.
|
|
•
|
The Company’s Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of OFS Advisor, the audit committee and, where appropriate, the respective independent valuation firm.
|
|
|
|
Fair Value at March 31, 2018 (1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
||
Senior secured
|
$
|
163,635
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
10.14% - 16.17% (13.09%)
|
|
13,403
|
|
|
Enterprise value
|
|
EBITDA multiple
|
|
7.50x - 7.50x (7.50x)
|
|
|
|
|
|
|
|
|
|
||
Subordinated
|
43,578
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
12.08% - 17.02% (15.08%)
|
|
|
2,559
|
|
|
Enterprise value
|
|
EBITDA multiple
|
|
4.25x - 8.25x (6.75x)
|
|
|
|
|
|
|
|
|
|
||
Equity investments:
|
|
|
|
|
|
|
|
||
Preferred equity
|
17,896
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 13.07x (7.79x)
|
|
Common equity and warrants
|
13,891
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 11.22x (6.48x)
|
(1)
|
Excludes $56,286, $19,534, and $4,682, of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at Transaction Prices.
|
|
Fair Value at December 31, 2017 (1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
||
Senior secured
|
$
|
152,231
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
10.01% - 16.50% (12.24%)
|
|
12,910
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
7.50x - 7.50x (7.50x)
|
|
|
9,063
|
|
|
Indicative Prices
|
|
Broker-dealers' quotes
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
Subordinated
|
47,117
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
11.24% - 16.90% (14.69%)
|
|
|
4,074
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 7.25x (6.37x)
|
|
|
|
|
|
|
|
|
|
||
Equity investments:
|
|
|
|
|
|
|
|
||
Preferred equity
|
19,200
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 13.48x (7.80x)
|
|
Common equity and warrants
|
11,489
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 8.28x (6.27x)
|
(1)
|
Excludes $20,908, $7, and $500 of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at a Transaction Price.
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Senior
Secured Debt Investments |
|
Subordinated
Debt Investments |
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2018
|
$
|
195,112
|
|
|
$
|
51,198
|
|
|
$
|
19,200
|
|
|
$
|
11,989
|
|
|
$
|
277,499
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net realized gain (loss) on investments
|
401
|
|
|
—
|
|
|
60
|
|
|
(541
|
)
|
|
(80
|
)
|
|||||
Net unrealized appreciation (depreciation) on investments
|
(122
|
)
|
|
(1,400
|
)
|
|
(1,112
|
)
|
|
2,398
|
|
|
(236
|
)
|
|||||
Amortization of Net Loan Fees
|
245
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|||||
Capitalized PIK interest and dividends
|
263
|
|
|
110
|
|
|
339
|
|
|
—
|
|
|
712
|
|
|||||
Purchase and origination of portfolio investments
|
72,350
|
|
|
20,930
|
|
|
2,547
|
|
|
2,381
|
|
|
98,208
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(7,828
|
)
|
|
(5,197
|
)
|
|
—
|
|
|
—
|
|
|
(13,025
|
)
|
|||||
Sale and redemption of portfolio investments
|
(27,097
|
)
|
|
—
|
|
|
(578
|
)
|
|
(214
|
)
|
|
(27,889
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 3 assets, March 31, 2018
|
$
|
233,324
|
|
|
$
|
65,671
|
|
|
$
|
20,456
|
|
|
$
|
16,013
|
|
|
$
|
335,464
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Senior
Secured Debt Investments |
|
Subordinated
Debt Investments |
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2017
|
$
|
180,955
|
|
|
$
|
63,410
|
|
|
$
|
23,721
|
|
|
$
|
13,541
|
|
|
281,627
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net unrealized appreciation (depreciation) on investments
|
(1,590
|
)
|
|
(223
|
)
|
|
2,989
|
|
|
350
|
|
|
1,526
|
|
|||||
Amortization of Net Loan Fees
|
348
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
341
|
|
|||||
Capitalized PIK interest, dividends, and fees
|
213
|
|
|
129
|
|
|
383
|
|
|
—
|
|
|
725
|
|
|||||
Purchase and origination of portfolio investments
|
6,082
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,082
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(19,948
|
)
|
|
(12,024
|
)
|
|
—
|
|
|
—
|
|
|
(31,972
|
)
|
|||||
Other
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 3 assets, March 31, 2017
|
$
|
166,060
|
|
|
$
|
51,267
|
|
|
$
|
27,093
|
|
|
$
|
13,891
|
|
|
$
|
258,311
|
|
|
Name of Portfolio Company
|
|
Investment Type
|
|
March 31, 2018
|
||
Carolina Lubes, Inc.
|
|
Senior Secured Loan
|
|
$
|
1,071
|
|
Cirrus Medical Staffing, Inc.
|
|
Senior Secured Loan (Revolver)
|
|
922
|
|
|
The Escape Game, LLC
|
|
Senior Secured Loan
|
|
7,000
|
|
|
TRS Services, LLC
|
|
Senior Secured Loan
|
|
1,000
|
|
|
|
|
|
|
9,993
|
|
|
|
|
|
|
|
|
SBA debentures outstanding
|
|||||||
Pooling Date
|
|
Maturity Date
|
|
Fixed Interest Rate
|
|
March 31, 2018
|
|
December 31, 2017
|
|||||
September 19, 2012
|
|
September 1, 2022
|
|
3.049
|
%
|
|
$
|
14,000
|
|
|
$
|
14,000
|
|
September 25, 2013
|
|
September 1, 2023
|
|
4.448
|
|
|
7,000
|
|
|
7,000
|
|
||
March 26, 2014
|
|
March 1, 2024
|
|
3.995
|
|
|
5,000
|
|
|
5,000
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.819
|
|
|
4,110
|
|
|
4,110
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.370
|
|
|
31,265
|
|
|
31,265
|
|
||
March 25, 2015
|
|
March 1, 2025
|
|
2.872
|
|
|
65,920
|
|
|
65,920
|
|
||
September 23, 2015
|
|
September 1, 2025
|
|
3.184
|
|
|
22,585
|
|
|
22,585
|
|
||
SBA debentures outstanding
|
|
|
|
|
|
149,880
|
|
|
149,880
|
|
|||
Unamortized debt issuance costs
|
|
|
|
|
|
(2,564
|
)
|
|
(2,657
|
)
|
|||
SBA debentures outstanding, net of unamortized debt issuance costs
|
|
|
|
$
|
147,316
|
|
|
$
|
147,223
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Paid-in capital in excess of par
|
|
$
|
18
|
|
|
$
|
18
|
|
Accumulated undistributed net investment income
|
|
14
|
|
|
14
|
|
||
Accumulated net realized gain (loss)
|
|
(32
|
)
|
|
(32
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Tax-basis amortized cost of investments
|
$
|
344,509
|
|
|
$
|
282,401
|
|
Tax-basis gross unrealized appreciation on investments
|
16,168
|
|
|
16,207
|
|
||
Tax-basis gross unrealized depreciation on investments
|
(25,213
|
)
|
|
(21,109
|
)
|
||
Tax-basis net unrealized appreciation (depreciation) on investments
|
(9,045
|
)
|
|
(4,902
|
)
|
||
Fair value of investments
|
$
|
335,464
|
|
|
$
|
277,499
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Per share data:
|
|
|
|
||||
Net asset value per share at beginning of period
|
$
|
14.12
|
|
|
$
|
14.82
|
|
Distributions
(4)
|
(0.71
|
)
|
|
(0.34
|
)
|
||
Net investment income
|
0.29
|
|
|
0.34
|
|
||
Net realized gain on non-control/non-affiliate investments
|
0.03
|
|
|
—
|
|
||
Net realized loss on affiliate investments
|
(0.04
|
)
|
|
—
|
|
||
Net unrealized depreciation on non-control/non-affiliate investments
|
(0.12
|
)
|
|
(0.31
|
)
|
||
Net unrealized appreciation on affiliate investments
|
0.09
|
|
|
0.41
|
|
||
Net unrealized appreciation on control investment
|
0.01
|
|
|
0.06
|
|
||
Net asset value per share at end of period
|
$
|
13.67
|
|
|
$
|
14.98
|
|
|
|
|
|
||||
Per share market value, end of period
|
$
|
11.22
|
|
|
$
|
14.19
|
|
Total return based on market value
(1)
|
0.3
|
%
|
|
5.6
|
%
|
||
Total return based on net asset value
(2)
|
2.0
|
%
|
|
3.3
|
%
|
||
Shares outstanding at end of period
|
13,348,774
|
|
|
9,703,216
|
|
||
Weighted average shares outstanding
|
13,340,502
|
|
|
9,700,329
|
|
||
Ratio/Supplemental Data (in thousands except ratios)
|
|
|
|
||||
Average net asset value
(3)
|
$
|
185,395
|
|
|
$
|
144,583
|
|
Net asset value at end of period
|
$
|
182,453
|
|
|
$
|
145,387
|
|
Net investment income
|
$
|
3,816
|
|
|
$
|
3,340
|
|
Ratio of total expenses to average net assets
(5) (7)
|
11.2
|
%
|
|
13.0
|
%
|
||
Ratio of net investment income to average net assets
(5) (8)
|
8.2
|
%
|
|
9.2
|
%
|
||
Portfolio turnover
(6)
|
13.5
|
%
|
|
2.3
|
%
|
(1)
|
Calculation is ending market value less beginning market value, adjusting for distributions reinvested at prices obtained in the Company’s dividend reinvestment plan for the respective distributions.
|
(2)
|
Calculation is ending net asset value less beginning net asset value, adjusting for distributions reinvested at the Company’s quarter-end net asset value for the respective distributions.
|
(3)
|
Based on the average of the net asset value at the beginning of the indicated period and the preceding calendar quarter.
|
(4)
|
The components of the distributions are presented on an income tax basis. The determination of the tax attributes of the Company’s distributions is made annually as of the end of its fiscal year based upon its ICTI for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of the Company’s distributions for a full year.
|
(5)
|
Annualized.
|
(6)
|
Portfolio turnover rate is calculated using the lesser of period-to-date sales and principal payments or period-to-date purchases over the average of the invested assets at fair value.
|
(7)
|
Ratio of total expenses before incentive fee waiver to average net assets was 11.2% for the three months ended March 31, 2018.
|
(8)
|
Ratio of net investment income before incentive fee waiver to average net assets was 8.2% for the three months ended March 31, 2018.
|
|
|
|
Name of Portfolio Company
|
|
Investment Type(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to Income(2) |
|
December 31, 2017, Fair Value
|
|
Gross
Additions(3) |
|
Gross
Reductions(4) |
|
March 31, 2018, Fair Value (5)
|
||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
MTE Holding Corp.
|
|
Subordinated Loan
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
284
|
|
|
$
|
7,118
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
7,218
|
|
|
|
Common Equity
|
|
—
|
|
|
6
|
|
|
33
|
|
|
3,450
|
|
|
6
|
|
|
—
|
|
|
3,456
|
|
|||||||
|
|
|
|
—
|
|
|
75
|
|
|
317
|
|
|
10,568
|
|
|
106
|
|
|
—
|
|
|
10,674
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Control Investments
|
|
|
|
—
|
|
|
75
|
|
|
317
|
|
|
10,568
|
|
|
106
|
|
|
—
|
|
|
10,674
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
3rd Rock Gaming Holdings, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
21,673
|
|
|
—
|
|
|
21,673
|
|
|||||||
|
|
Preferred Equity (7)
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
2,560
|
|
|
—
|
|
|
2,560
|
|
|||||||
|
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
—
|
|
|
24,233
|
|
|
—
|
|
|
24,233
|
|
|
Name of Portfolio Company
|
|
Investment Type(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to Income(2) |
|
December 31, 2017, Fair Value
|
|
Gross
Additions(3) |
|
Gross
Reductions(4) |
|
March 31, 2018, Fair Value (5)
|
||||||||||||||
All Metals Holding, LLC
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(219
|
)
|
|
$
|
576
|
|
|
$
|
12,759
|
|
|
$
|
6,519
|
|
|
$
|
(219
|
)
|
|
$
|
19,059
|
|
|
|
Common Equity(6)
|
|
(87
|
)
|
|
386
|
|
|
—
|
|
|
1,785
|
|
|
558
|
|
|
(214
|
)
|
|
2,129
|
|
|||||||
|
|
|
|
(87
|
)
|
|
167
|
|
|
576
|
|
|
14,544
|
|
|
7,077
|
|
|
(433
|
)
|
|
21,188
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Contract Datascan Holdings, Inc.
|
|
Subordinated Loan
|
|
—
|
|
|
(1
|
)
|
|
241
|
|
|
8,000
|
|
|
1
|
|
|
(1
|
)
|
|
8,000
|
|
|||||||
|
|
Preferred Equity(6)(7)
|
|
—
|
|
|
—
|
|
|
144
|
|
|
5,964
|
|
|
143
|
|
|
—
|
|
|
6,107
|
|
|||||||
|
|
Common Equity(6)
|
|
—
|
|
|
1,008
|
|
|
—
|
|
|
260
|
|
|
1,008
|
|
|
—
|
|
|
1,268
|
|
|||||||
|
|
|
|
—
|
|
|
1,007
|
|
|
385
|
|
|
14,224
|
|
|
1,152
|
|
|
(1
|
)
|
|
15,375
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
DRS IMAGING SERVICES, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
5,343
|
|
|
—
|
|
|
5,343
|
|
|||||||
|
|
Common Equity (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|
—
|
|
|
454
|
|
|||||||
|
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
5,797
|
|
|
—
|
|
|
5,797
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Jobson Healthcare Information
|
|
Senior Secured Loan
|
|
—
|
|
|
282
|
|
|
608
|
|
|
12,910
|
|
|
528
|
|
|
(35
|
)
|
|
13,403
|
|
|||||||
|
|
Common Equity (6)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
Warrants (6)
|
|
(454
|
)
|
|
454
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|
(454
|
)
|
|
—
|
|
|||||||
|
|
|
|
(454
|
)
|
|
736
|
|
|
608
|
|
|
12,910
|
|
|
982
|
|
|
(489
|
)
|
|
13,403
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Master Cutlery, LLC
|
|
Subordinated Loan
|
|
—
|
|
|
(384
|
)
|
|
110
|
|
|
2,873
|
|
|
115
|
|
|
(429
|
)
|
|
2,559
|
|
|||||||
|
|
Preferred Equity (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Common Equity (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
—
|
|
|
(384
|
)
|
|
110
|
|
|
2,873
|
|
|
115
|
|
|
(429
|
)
|
|
2,559
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
NeoSystems Corp.
|
|
Subordinated Loan
|
|
—
|
|
|
(1
|
)
|
|
71
|
|
|
2,143
|
|
|
8
|
|
|
(2
|
)
|
|
2,149
|
|
|||||||
|
|
Preferred Equity(6)(7)
|
|
—
|
|
|
(34
|
)
|
|
35
|
|
|
2,248
|
|
|
36
|
|
|
(34
|
)
|
|
2,250
|
|
|||||||
|
|
|
|
—
|
|
|
(35
|
)
|
|
106
|
|
|
4,391
|
|
|
44
|
|
|
(36
|
)
|
|
4,399
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pfanstiehl Holdings, Inc
|
|
Subordinated Loan
|
|
—
|
|
|
67
|
|
|
93
|
|
|
3,755
|
|
|
3,855
|
|
|
(3,790
|
)
|
|
3,820
|
|
|||||||
|
|
Common Equity
|
|
—
|
|
|
515
|
|
|
133
|
|
|
4,755
|
|
|
515
|
|
|
—
|
|
|
5,270
|
|
|||||||
|
|
|
|
—
|
|
|
582
|
|
|
226
|
|
|
8,510
|
|
|
4,370
|
|
|
(3,790
|
)
|
|
9,090
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Professional Pipe Holdings, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
8,317
|
|
|
—
|
|
|
8,317
|
|
|||||||
|
|
Common Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,414
|
|
|
—
|
|
|
1,414
|
|
|||||||
|
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
9,731
|
|
|
—
|
|
|
9,731
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Portfolio Company
|
|
Investment Type(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to Income(2) |
|
December 31, 2017, Fair Value
|
|
Gross
Additions(3) |
|
Gross
Reductions(4) |
|
March 31, 2018, Fair Value (5)
|
||||||||||||||
TRS Services, Inc.
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(214
|
)
|
|
$
|
458
|
|
|
$
|
9,466
|
|
|
$
|
7,831
|
|
|
$
|
(2,269
|
)
|
|
$
|
15,028
|
|
|
|
Preferred Equity (Class AA units)(7)
|
|
—
|
|
|
1
|
|
|
15
|
|
|
409
|
|
|
16
|
|
|
—
|
|
|
425
|
|
|||||||
|
|
Preferred Equity (Class A units)(6)(7)
|
|
—
|
|
|
(615
|
)
|
|
—
|
|
|
2,230
|
|
|
—
|
|
|
(615
|
)
|
|
1,615
|
|
|||||||
|
|
Common Equity (6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
—
|
|
|
(828
|
)
|
|
473
|
|
|
12,105
|
|
|
7,847
|
|
|
(2,884
|
)
|
|
17,068
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Affiliate Investments
|
|
|
|
(541
|
)
|
|
1,245
|
|
|
2,678
|
|
|
69,557
|
|
|
61,348
|
|
|
(8,062
|
)
|
|
122,843
|
|
|||||||
Total Control and Affiliate Investments
|
|
|
|
$
|
(541
|
)
|
|
$
|
1,320
|
|
|
$
|
2,995
|
|
|
$
|
80,125
|
|
|
$
|
61,454
|
|
|
$
|
(8,062
|
)
|
|
$
|
133,517
|
|
(1)
|
Principal balance of debt investments and ownership detail for equity investments are shown in the consolidated schedule of investments.
|
(2)
|
Represents the total amount of interest, fees or dividends included in income for the three months ended March 31, 2018, that an investment was included in Control or Affiliate Investment categories, respectively.
|
(3)
|
Gross additions include increases in cost basis resulting from a new portfolio investment, PIK interest, fees and dividends, accretion of OID, and net increases in unrealized net appreciation or decreases in net unrealized depreciation.
|
(4)
|
Gross reductions include decreases in the cost basis of investments resulting from principal repayments and sales, if any, and net decreases in net unrealized appreciation or net increases in unrealized depreciation.
|
(5)
|
Fair value was determined using significant unobservable inputs. See Note 5 for further details.
|
(6)
|
Non-income producing.
|
(7)
|
Dividends credited to income include dividends contractually earned but not declared.
|
(8)
|
Jobson became an affiliate investment effective December 31, 2017, due to an increase in voting ownership interest.
|
(9)
|
Malabar was reclassified from a control investment to an affiliate investment due to a decrease in voting interest.
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Investments, at fair value
|
|
|
|
||||
Non-control/non-affiliate investments (amortized cost of $209,360 and $178,279, respectively)
|
$
|
197,374
|
|
|
$
|
173,219
|
|
Affiliate investments (amortized cost of $70,402 and $76,306, respectively)
|
69,557
|
|
|
81,708
|
|
||
Control investments (amortized cost of $10,213 and $24,722, respectively)
|
10,568
|
|
|
26,700
|
|
||
Total investments at fair value (amortized cost of $289,975 and $279,307, respectively)
|
277,499
|
|
|
281,627
|
|
||
Cash and cash equivalents
|
72,952
|
|
|
17,659
|
|
||
Interest receivable
|
2,734
|
|
|
1,770
|
|
||
Prepaid expenses and other assets
|
4,593
|
|
|
3,974
|
|
||
Total assets
|
$
|
357,778
|
|
|
$
|
305,030
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Revolving line of credit
|
$
|
17,600
|
|
|
$
|
9,500
|
|
SBA debentures (net of deferred debt issuance costs of $2,657 and $3,037, respectively)
|
147,223
|
|
|
146,843
|
|
||
Interest payable
|
1,596
|
|
|
1,599
|
|
||
Management and incentive fees payable
|
1,987
|
|
|
2,119
|
|
||
Administration fee payable
|
476
|
|
|
435
|
|
||
Accrued professional fees
|
433
|
|
|
477
|
|
||
Other liabilities
|
127
|
|
|
279
|
|
||
Total liabilities
|
169,442
|
|
|
161,252
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
|
|
|
||||
|
|
|
|
||||
Net Assets
|
|
|
|
||||
Preferred stock, par value of $0.01 per share, 2,000,000 shares authorized, -0- shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively
|
—
|
|
|
—
|
|
||
Common stock, par value of $0.01 per share, 100,000,000 shares authorized, 13,340,217 and 9,700,297 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively
|
133
|
|
|
97
|
|
||
Paid-in capital in excess of par
|
187,398
|
|
|
134,300
|
|
||
Accumulated undistributed net investment income
|
9,404
|
|
|
6,731
|
|
||
Accumulated undistributed net realized gain (loss)
|
3,881
|
|
|
330
|
|
||
Net unrealized appreciation (depreciation) on investments
|
(12,480
|
)
|
|
2,320
|
|
||
Total net assets
|
188,336
|
|
|
143,778
|
|
||
|
|
|
|
||||
Total liabilities and net assets
|
$
|
357,778
|
|
|
$
|
305,030
|
|
|
|
|
|
||||
Number of shares outstanding
|
13,340,217
|
|
|
9,700,297
|
|
||
Net asset value per share
|
$
|
14.12
|
|
|
$
|
14.82
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Investment income
|
|
|
|
|
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Non-control/non-affiliate investments
|
$
|
20,078
|
|
|
$
|
17,076
|
|
|
$
|
22,561
|
|
Affiliate investments
|
6,506
|
|
|
7,451
|
|
|
5,062
|
|
|||
Control investment
|
1,540
|
|
|
1,873
|
|
|
141
|
|
|||
Total interest income
|
28,124
|
|
|
26,400
|
|
|
27,764
|
|
|||
Payment-in-kind interest and dividend income:
|
|
|
|
|
|
||||||
Non-control/non-affiliate investments
|
1,400
|
|
|
1,070
|
|
|
1,111
|
|
|||
Affiliate investments
|
1,375
|
|
|
1,437
|
|
|
1,211
|
|
|||
Control investment
|
132
|
|
|
120
|
|
|
—
|
|
|||
Total payment-in-kind interest and dividend income:
|
2,907
|
|
|
2,627
|
|
|
2,322
|
|
|||
Dividend income:
|
|
|
|
|
|
||||||
Non-control/non-affiliate investments
|
50
|
|
|
36
|
|
|
—
|
|
|||
Affiliate investments
|
140
|
|
|
170
|
|
|
245
|
|
|||
Control investment
|
292
|
|
|
269
|
|
|
—
|
|
|||
Total dividend income
|
482
|
|
|
475
|
|
|
245
|
|
|||
Fee income:
|
|
|
|
|
|
||||||
Non-control/non-affiliate investments
|
1,086
|
|
|
1,366
|
|
|
1,463
|
|
|||
Affiliate investments
|
675
|
|
|
110
|
|
|
320
|
|
|||
Control investment
|
152
|
|
|
116
|
|
|
150
|
|
|||
Total fee income
|
1,913
|
|
|
1,592
|
|
|
1,933
|
|
|||
|
|
|
|
|
|
||||||
Total investment income
|
33,426
|
|
|
31,094
|
|
|
32,264
|
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Interest expense
|
5,813
|
|
|
5,302
|
|
|
6,959
|
|
|||
Management fees
|
4,999
|
|
|
4,516
|
|
|
5,225
|
|
|||
Incentive fee
|
2,962
|
|
|
3,333
|
|
|
2,627
|
|
|||
Professional fees
|
1,115
|
|
|
1,200
|
|
|
1,114
|
|
|||
Administration fee
|
1,314
|
|
|
1,304
|
|
|
1,637
|
|
|||
General and administrative expenses
|
1,346
|
|
|
1,294
|
|
|
1,291
|
|
|||
|
|
|
|
|
|
||||||
Total expenses
|
17,549
|
|
|
16,949
|
|
|
18,853
|
|
|||
|
|
|
|
|
|
||||||
Net investment income
|
15,877
|
|
|
14,145
|
|
|
13,411
|
|
|||
|
|
|
|
|
|
||||||
Net realized and unrealized gain (loss) on investments
|
|
|
|
|
|
||||||
Net realized gain (loss) on non-control/non-affiliate investments
|
(3,248
|
)
|
|
2,387
|
|
|
(3,033
|
)
|
|||
Net realized gain on affiliate investments
|
10,081
|
|
|
17
|
|
|
1,471
|
|
|||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
|
(9,715
|
)
|
|
(6,699
|
)
|
|
5,099
|
|
|||
Net unrealized appreciation (depreciation) on affiliate investments
|
(5,088
|
)
|
|
3,341
|
|
|
1,283
|
|
|||
Net unrealized appreciation on control investments
|
3
|
|
|
637
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net gain (loss) on investments
|
(7,967
|
)
|
|
(317
|
)
|
|
4,820
|
|
|||
|
|
|
|
|
|
||||||
Net increase in net assets resulting from operations
|
$
|
7,910
|
|
|
$
|
13,828
|
|
|
$
|
18,231
|
|
|
|
|
|
|
|
||||||
Net investment income per common share - basic and diluted
|
$
|
1.28
|
|
|
$
|
1.46
|
|
|
$
|
1.39
|
|
Net increase in net assets resulting from operations per common share - basic and diluted
|
$
|
0.64
|
|
|
$
|
1.43
|
|
|
$
|
1.89
|
|
Distributions declared per common share
|
$
|
1.36
|
|
|
$
|
1.36
|
|
|
$
|
1.36
|
|
Basic and diluted weighted average shares outstanding
|
12,403,706
|
|
|
9,692,634
|
|
|
9,670,153
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Increase in net assets resulting from operations:
|
|
|
|
|
|
||||||
Net investment income
|
$
|
15,877
|
|
|
$
|
14,145
|
|
|
$
|
13,411
|
|
Net realized gain (loss) on investments
|
6,833
|
|
|
2,404
|
|
|
(1,562
|
)
|
|||
Net unrealized appreciation (depreciation) on investments
|
(14,800
|
)
|
|
(2,721
|
)
|
|
6,382
|
|
|||
Net increase in net assets resulting from operations
|
7,910
|
|
|
13,828
|
|
|
18,231
|
|
|||
Distributions to stockholders from:
|
|
|
|
|
|
||||||
Accumulated net investment income
|
(14,158
|
)
|
|
(12,157
|
)
|
|
(10,954
|
)
|
|||
Accumulated net realized gain
|
(2,738
|
)
|
|
(169
|
)
|
|
—
|
|
|||
Return of capital distributions
|
—
|
|
|
(858
|
)
|
|
(2,197
|
)
|
|||
Total distributions to stockholders
|
(16,896
|
)
|
|
(13,184
|
)
|
|
(13,151
|
)
|
|||
Common stock transactions:
|
|
|
|
|
|
||||||
Public offering of common stock, net of expenses
|
53,348
|
|
|
—
|
|
|
—
|
|
|||
Reinvestment of stockholder distributions
|
196
|
|
|
122
|
|
|
461
|
|
|||
Net increase in net assets resulting from capital transactions
|
53,544
|
|
|
122
|
|
|
461
|
|
|||
Net increase in net assets
|
44,558
|
|
|
766
|
|
|
5,541
|
|
|||
Net assets:
|
|
|
|
|
|
||||||
Beginning of year
|
143,778
|
|
|
143,012
|
|
|
137,471
|
|
|||
End of year
|
$
|
188,336
|
|
|
$
|
143,778
|
|
|
$
|
143,012
|
|
Accumulated undistributed net investment income
|
$
|
9,404
|
|
|
$
|
6,371
|
|
|
$
|
4,612
|
|
Common stock activity:
|
|
|
|
|
|
||||||
Public offering of common stock
|
3,625,000
|
|
|
—
|
|
|
—
|
|
|||
Common stock issued from reinvestment of stockholder distributions
|
14,920
|
|
|
9,127
|
|
|
40,336
|
|
|||
Common stock issued and outstanding at beginning of year
|
9,700,297
|
|
|
9,691,170
|
|
|
9,650,834
|
|
|||
Common stock issued and outstanding at end of year
|
13,340,217
|
|
|
9,700,297
|
|
|
9,691,170
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net increase in net assets resulting from operations
|
$
|
7,910
|
|
|
$
|
13,828
|
|
|
$
|
18,231
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net realized (gain) loss on investments
|
(6,833
|
)
|
|
(2,404
|
)
|
|
1,562
|
|
|||
Net change in unrealized appreciation/depreciation on investments
|
14,800
|
|
|
2,721
|
|
|
(6,382
|
)
|
|||
Amortization of Net Loan Fees
|
(1,450
|
)
|
|
(1,414
|
)
|
|
(2,263
|
)
|
|||
Amendment fees collected
|
175
|
|
|
261
|
|
|
112
|
|
|||
Payment-in-kind interest and dividend income
|
(2,907
|
)
|
|
(2,627
|
)
|
|
(2,322
|
)
|
|||
Amortization and write-off of deferred debt issuance costs
|
553
|
|
|
490
|
|
|
2,117
|
|
|||
Amortization of intangible asset
|
195
|
|
|
195
|
|
|
195
|
|
|||
Purchase and origination of portfolio investments
|
(142,900
|
)
|
|
(68,237
|
)
|
|
(123,950
|
)
|
|||
Proceeds from principal payments on portfolio investments
|
105,078
|
|
|
41,404
|
|
|
96,069
|
|
|||
Proceeds from sale or redemption of portfolio investments
|
37,044
|
|
|
5,274
|
|
|
98,895
|
|
|||
Distributions received from portfolio investments
|
—
|
|
|
192
|
|
|
183
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Interest receivable
|
(964
|
)
|
|
(937
|
)
|
|
(113
|
)
|
|||
Interest payable
|
(3
|
)
|
|
51
|
|
|
233
|
|
|||
Management and incentive fees payable
|
(132
|
)
|
|
(119
|
)
|
|
1,009
|
|
|||
Administration fee payable
|
41
|
|
|
(53
|
)
|
|
215
|
|
|||
Other assets and liabilities
|
66
|
|
|
59
|
|
|
(53
|
)
|
|||
Net cash provided by (used in) operating activities
|
10,673
|
|
|
(11,316
|
)
|
|
83,738
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from common stock offering, net of expenses
|
53,423
|
|
|
—
|
|
|
—
|
|
|||
Distributions paid to stockholders
|
(16,700
|
)
|
|
(13,062
|
)
|
|
(12,690
|
)
|
|||
Borrowings under revolving line of credit
|
44,700
|
|
|
9,500
|
|
|
—
|
|
|||
Repayments under revolving line of credit
|
(36,600
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under WM Credit Facility
|
—
|
|
|
—
|
|
|
1,217
|
|
|||
Repayments under WM Credit Facility
|
—
|
|
|
—
|
|
|
(73,829
|
)
|
|||
Draw down on SBA debentures
|
—
|
|
|
—
|
|
|
22,585
|
|
|||
Payment of debt issuance costs
|
(131
|
)
|
|
(177
|
)
|
|
(750
|
)
|
|||
Payment of common stock offering costs
|
(72
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Net cash provided by (used in) financing activities
|
44,620
|
|
|
(3,739
|
)
|
|
(63,471
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
55,293
|
|
|
(15,055
|
)
|
|
20,267
|
|
|||
Cash and cash equivalents — beginning of year
|
17,659
|
|
|
32,714
|
|
|
12,447
|
|
|||
Cash and cash equivalents — end of year
|
$
|
72,952
|
|
|
$
|
17,659
|
|
|
$
|
32,714
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid during the period for interest
|
$
|
5,263
|
|
|
$
|
4,762
|
|
|
$
|
4,609
|
|
Reinvestment of stockholder distributions
|
196
|
|
|
122
|
|
|
461
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aegis Acquisition, Inc.
|
|
Testing Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.17%
|
|
(L +8.50%)
|
|
8/24/2021
|
|
$
|
3,520
|
|
|
$
|
3,470
|
|
|
$
|
3,439
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Armor Holdings II LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.70%
|
|
(L +9.00%)
|
|
12/26/2020
|
|
3,500
|
|
|
3,476
|
|
|
3,570
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Avison Young Canada, Inc.
|
|
Offices of Real Estate Agents and Brokers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (5) (6)
|
|
|
|
9.50%
|
|
N/A
|
|
12/15/2021
|
|
4,000
|
|
|
3,939
|
|
|
4,070
|
|
|
2.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
BJ's Wholesale Club, Inc.
|
|
Warehouse Clubs and Supercenters
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.95%
|
|
(L +7.50%)
|
|
2/3/2025
|
|
9,268
|
|
|
9,158
|
|
|
9,063
|
|
|
4.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Carolina Lubes, Inc. (5) (9)
|
|
Automotive Oil Change and Lubrication Shops
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.28%
|
|
(L +7.25%)
|
|
8/23/2022
|
|
21,411
|
|
|
21,236
|
|
|
21,430
|
|
|
11.4
|
|
|||
Senior Secured Loan (Revolver)
|
|
|
|
8.59%
|
|
(L +7.25%)
|
|
8/23/2022
|
|
487
|
|
|
473
|
|
|
489
|
|
|
0.3
|
|
|||
Preferred Equity (973 units) 14% PIK
|
|
|
|
|
|
|
|
|
|
|
|
3,039
|
|
|
3,065
|
|
|
1.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
21,898
|
|
|
24,748
|
|
|
24,984
|
|
|
13.3
|
|
|||
Community Intervention Services, Inc. (5)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (7) (11)
|
|
|
|
7.0% cash / 6.0% PIK
|
|
N/A
|
|
1/16/2021
|
|
8,530
|
|
|
7,639
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.98%
|
|
(L +9.50%)
|
|
5/8/2019
|
|
9,678
|
|
|
9,579
|
|
|
9,417
|
|
|
5.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Constellis Holdings, LLC
|
|
Other Justice, Public Order, and Safety Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.69%
|
|
(L +9.00%)
|
|
4/21/2025
|
|
9,950
|
|
|
9,813
|
|
|
9,919
|
|
|
5.3
|
|
|||
DuPage Medical Group
|
|
Offices of Physicians, Mental Health Specialists
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.42%
|
|
(L +7.00%)
|
|
8/15/2025
|
|
5,600
|
|
|
5,547
|
|
|
5,503
|
|
|
2.9
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Eblens Holdings, Inc.
|
|
Shoe Store
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.0% cash / 1.00% PIK
|
|
N/A
|
|
1/13/2023
|
|
$
|
8,830
|
|
|
$
|
8,749
|
|
|
$
|
8,726
|
|
|
4.6
|
%
|
Common Equity (71,250 units)
|
|
|
|
|
|
|
|
|
|
|
|
713
|
|
|
771
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,830
|
|
|
9,462
|
|
|
9,497
|
|
|
5.0
|
|
|||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.44%
|
|
(L +6.75%)
|
|
8/27/2018
|
|
3,888
|
|
|
3,873
|
|
|
3,544
|
|
|
1.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
GGC Aerospace Topco L.P.
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.23%
|
|
(L +8.75%)
|
|
9/8/2024
|
|
5,000
|
|
|
4,875
|
|
|
4,875
|
|
|
2.6
|
|
|||
Common Equity (368,852 Class A units)
|
|
|
|
|
|
|
|
|
|
|
|
450
|
|
|
450
|
|
|
0.2
|
|
||||
Common Equity (40,984 Class B units)
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
50
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
5,375
|
|
|
5,375
|
|
|
2.8
|
|
|||
LRI Holding, LLC (5)
|
|
Electrical Contractors and Other Wiring Installation Contractors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.94%
|
|
(L +9.25%)
|
|
6/30/2022
|
|
18,269
|
|
|
18,125
|
|
|
18,205
|
|
|
9.7
|
|
|||
Preferred Equity (238,095 units)
|
|
|
|
|
|
|
|
|
|
|
|
300
|
|
|
300
|
|
|
0.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
18,269
|
|
|
18,425
|
|
|
18,505
|
|
|
9.9
|
|
|||
Maverick Healthcare Equity, LLC (5)
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
Common Equity (1,250,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
141
|
|
|
0.1
|
|
||||
My Alarm Center, LLC (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,485 Class A units), 8% PIK (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
1,540
|
|
|
1,540
|
|
|
0.8
|
|
||||
Preferred Equity (1,198 Class B units)
|
|
|
|
|
|
|
|
|
|
|
|
1,198
|
|
|
1,198
|
|
|
0.6
|
|
||||
Common Equity (64,149 units) (13)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
43
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
2,738
|
|
|
2,781
|
|
|
1.4
|
|
||||
NVA Holdings, Inc.
|
|
Veterinary Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.69%
|
|
(L +7.00%)
|
|
8/14/2022
|
|
743
|
|
|
743
|
|
|
748
|
|
|
0.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
O2 Holdings, LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
14.56%
|
|
(L +13.00%)
|
|
9/2/2021
|
|
13,350
|
|
|
12,977
|
|
|
13,617
|
|
|
7.2
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Parfums Holding Company, Inc.
|
|
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.45%
|
|
(L +8.75%)
|
|
6/30/2025
|
|
$
|
3,520
|
|
|
$
|
3,492
|
|
|
$
|
3,472
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Planet Fitness Midwest LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
12/16/2021
|
|
5,000
|
|
|
4,964
|
|
|
5,011
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50% cash / 1.00% PIK
|
|
N/A
|
|
10/29/2021
|
|
6,187
|
|
|
6,108
|
|
|
6,059
|
|
|
3.2
|
|
|||
Common equity (499 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
278
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,187
|
|
|
6,607
|
|
|
6,337
|
|
|
3.3
|
|
|||
Resource Label Group, LLC
|
|
Commercial Printing (except Screen and Books)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.19%
|
|
(L +8.50%)
|
|
11/26/2023
|
|
4,821
|
|
|
4,755
|
|
|
4,767
|
|
|
2.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (14)
|
|
|
|
14.00% cash / 0.69% PIK
|
|
(L +13.00%)
|
|
6/19/2020
|
|
12,525
|
|
|
12,441
|
|
|
12,364
|
|
|
6.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
13.07%
|
|
(L +11.50%)
|
|
7/24/2019
|
|
4,195
|
|
|
4,156
|
|
|
4,259
|
|
|
2.3
|
|
|||
Preferred Equity (5,000 units) (10) (13)
|
|
|
|
|
|
|
|
|
|
|
|
527
|
|
|
527
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,195
|
|
|
4,683
|
|
|
4,786
|
|
|
2.6
|
|
|||
Southern Technical Institute, LLC (5)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (10)
|
|
|
|
15.00% PIK
|
|
N/A
|
|
12/2/2020
|
|
3,520
|
|
|
3,451
|
|
|
1,201
|
|
|
0.6
|
|
|||
Preferred Equity (1,764,720 units), 15.75% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
2,094
|
|
|
—
|
|
|
—
|
|
||||
Warrants (2,174,905 units) (10)
|
|
|
|
|
|
|
|
3/30/2026
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,520
|
|
|
5,591
|
|
|
1,201
|
|
|
0.6
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Stancor, L.P. (5)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.56%
|
|
(L +8.00%)
|
|
8/19/2019
|
|
$
|
7,919
|
|
|
$
|
7,896
|
|
|
$
|
7,919
|
|
|
4.2
|
%
|
Preferred Equity (1,250,000 units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
1,486
|
|
|
0.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,919
|
|
|
9,397
|
|
|
9,405
|
|
|
5.0
|
|
|||
The Escape Game, LLC (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
Other amusement and recreation industries
|
|
10.32%
|
|
(L +8.75%)
|
|
12/20/2022
|
|
7,000
|
|
|
6,948
|
|
|
6,948
|
|
|
3.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
TravelCLICK, Inc.
|
|
Computer Systems Design and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.32%
|
|
(L +7.75%)
|
|
11/6/2021
|
|
7,334
|
|
|
7,303
|
|
|
7,334
|
|
|
3.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Truck Hero, Inc.
|
|
Truck Trailer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.89%
|
|
(L +8.25%)
|
|
4/21/2025
|
|
7,014
|
|
|
6,971
|
|
|
7,064
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (5)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
12.00% cash / 2.00% PIK
|
|
N/A
|
|
4/30/2018
|
|
4,266
|
|
|
4,248
|
|
|
4,266
|
|
|
2.3
|
|
|||
Subordinated Loan (10)
|
|
|
|
8.00 % PIK
|
|
N/A
|
|
4/30/2019
|
|
7
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|||
Preferred Equity (151,787 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
92
|
|
|
—
|
|
||||
Warrants (29,374 units) (10)
|
|
|
|
|
|
|
|
3/5/2022
|
|
|
|
82
|
|
|
147
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,273
|
|
|
4,346
|
|
|
4,512
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
199,332
|
|
|
209,360
|
|
|
197,374
|
|
|
104.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
All Metals Holding, LLC (5)
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.00% cash / 1.00% PIK
|
|
N/A
|
|
12/28/2021
|
|
12,869
|
|
|
12,288
|
|
|
12,759
|
|
|
6.8
|
|
|||
Common Equity (637,954 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
565
|
|
|
1,785
|
|
|
0.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
12,869
|
|
|
12,853
|
|
|
14,544
|
|
|
7.7
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
Contract Datascan Holdings, Inc. (5)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
2/5/2021
|
|
$
|
8,000
|
|
|
$
|
7,985
|
|
|
$
|
8,000
|
|
|
4.2
|
%
|
Preferred Equity (3,061 shares), 10% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
4,347
|
|
|
5,964
|
|
|
3.2
|
|
||||
Common Equity (11,273 shares) (10)
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
260
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
12,436
|
|
|
14,224
|
|
|
7.5
|
|
|||
Jobson Healthcare Information, LLC (5) (9)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (11)
|
|
|
|
10.13% cash / 5.30% PIK
|
|
(L +13.43%)
|
|
7/21/2019
|
|
15,447
|
|
|
15,241
|
|
|
12,910
|
|
|
6.9
|
|
|||
Common Equity (13 member units)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants (1 member unit) (10)
|
|
|
|
|
|
|
|
7/21/2019
|
|
|
|
454
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
15,447
|
|
|
15,695
|
|
|
12,910
|
|
|
6.9
|
|
|||
Master Cutlery, LLC (5)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2020
|
|
4,705
|
|
|
4,692
|
|
|
2,873
|
|
|
1.5
|
|
|||
Preferred Equity (3,723 units), 8% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
3,483
|
|
|
—
|
|
|
—
|
|
||||
Common Equity (15,564 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,705
|
|
|
8,175
|
|
|
2,873
|
|
|
1.5
|
|
|||
NeoSystems Corp.(5)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 1.25% PIK
|
|
N/A
|
|
8/13/2019
|
|
2,143
|
|
|
2,136
|
|
|
2,143
|
|
|
1.1
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
1,390
|
|
|
2,248
|
|
|
1.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
2,143
|
|
|
3,526
|
|
|
4,391
|
|
|
2.3
|
|
|||
Pfanstiehl Holdings, Inc. (5)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50%
|
|
N/A
|
|
9/29/2021
|
|
3,788
|
|
|
3,823
|
|
|
3,755
|
|
|
2.0
|
|
|||
Common Equity (400 shares)
|
|
|
|
|
|
|
|
|
|
|
|
217
|
|
|
4,755
|
|
|
2.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,040
|
|
|
8,510
|
|
|
4.5
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets
|
|||||||
TRS Services, LLC (5)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.07%
|
|
(L +8.50%)
|
|
12/10/2019
|
|
$
|
9,466
|
|
|
$
|
9,330
|
|
|
$
|
9,466
|
|
|
5.0
|
%
|
Preferred Equity (329,266 Class AA units), 15% PIK (10)
|
|
|
|
|
|
|
|
|
|
|
|
401
|
|
|
409
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 Class A units), 11% PIK (8) (10)
|
|
|
|
|
|
|
|
|
|
|
|
3,374
|
|
|
2,230
|
|
|
1.2
|
|
||||
Common Equity (3,000,000 units) (10)
|
|
|
|
|
|
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
9,466
|
|
|
13,677
|
|
|
12,105
|
|
|
6.4
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
56,418
|
|
|
70,402
|
|
|
69,557
|
|
|
36.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
MTE Holding Corp. (2) (5)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
13.07% cash / 1.50% PIK
|
|
(L +13.50%)
|
|
11/25/2020
|
|
7,186
|
|
|
7,144
|
|
|
7,118
|
|
|
3.8
|
|
|||
Common Equity (554 shares)
|
|
|
|
|
|
|
|
|
|
|
|
3,069
|
|
|
3,450
|
|
|
1.8
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
7,186
|
|
|
10,213
|
|
|
10,568
|
|
|
5.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
$
|
262,936
|
|
|
$
|
289,975
|
|
|
$
|
277,499
|
|
|
147.3
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company.
|
(2)
|
Substantially all of the investments that bear interest at a variable rate are indexed to LIBOR (L), and reset monthly, quarterly, or semi-annually. Approximately 7% of the Company's LIBOR referenced investments are subject to a reference rate floor at December 31, 2017, with a reference rate floor of 2.00%. For each investment, the Company has provided the spread over the reference rate and current interest rate in effect at December 31, 2017. Unless otherwise noted, all investments with a stated PIK rate require interest payments with the issuance of additional securities as payment of the entire PIK provision.
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See
Note 6
for further details.
|
(4)
|
The negative amount represents the excess of the par value of an unfunded commitment in excess of its fair value.
|
(5)
|
Investments (or portion thereof) held by OFS SBIC I, LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(6)
|
Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets. As of December 31, 2017, 97.53% of the Company's assets were qualifying assets.
|
(7)
|
Investment was on non-accrual status as of December 31, 2017, meaning the Company has ceased recognizing all or a portion of income on the investment. See Note 2,
Non-accrual loans
for further details.
|
(8)
|
The fair value of the most-recently recognized PIK dividend as of December 31, 2017, was $0.
|
(9)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 9.28% at December 31, 2017, includes additional interest of 0.69% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
Non-income producing.
|
(11)
|
The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of December 31, 2017:
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Eblens Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 1.00%
|
|
13.00% or 12.00%
|
|
1.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.50% to 5.30%
|
|
13.93% to 10.13%
|
|
5.30
|
%
|
United Biologics Holdings, LLC
|
|
Senior Secured Loan
|
|
0% or 2.00%
|
|
14.00% or 12.00%
|
|
2.00
|
%
|
(12)
|
Represents expiration date of the warrants.
|
(13)
|
All or portion of investment held by a wholly-owned subsidiary subject to income tax. See Note 2,
Income taxes
, for further details.
|
(14)
|
The PIK provision is reset at the beginning of each interest period equal to the excess of reference rate over the reference rate floor of 1.00%. The PIK interest rate in the schedule represents the current PIK interest rate in effect.
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Accurate Group Holdings, Inc. (5)
|
|
Offices of Real Estate Appraisers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
8/23/2018
|
|
$
|
10,000
|
|
|
$
|
10,032
|
|
|
$
|
10,000
|
|
|
7.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Armor Holdings II LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.25%
|
|
(L +9.00%)
|
|
12/26/2020
|
|
3,500
|
|
|
3,469
|
|
|
3,496
|
|
|
2.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AssuredPartners, Inc
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.00%
|
|
(L +9.00%)
|
|
10/20/2023
|
|
5,000
|
|
|
4,854
|
|
|
5,013
|
|
|
3.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Avison Young Canada, Inc.
|
|
Offices of Real Estate Agents and Brokers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (5) (6)
|
|
|
|
9.50%
|
|
N/A
|
|
12/15/2021
|
|
4,000
|
|
|
3,923
|
|
|
3,923
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
BCC Software, LLC (5)
|
|
Custom Computer Programming Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.00%
|
|
(L +8.00%)
|
|
6/20/2019
|
|
5,143
|
|
|
5,105
|
|
|
5,143
|
|
|
3.6
|
|
|||
Senior Secured Loan (Revolver) (11) (4)
|
|
|
|
N/A
|
|
(L +8.00%)
|
|
6/20/2019
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
5,143
|
|
|
5,097
|
|
|
5,143
|
|
|
3.6
|
|
|||
Community Intervention Services, Inc. (5)
|
|
Outpatient Mental Health and Substance Abuse Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (7) (12)
|
|
|
|
7.00% cash / 6.00% PIK
|
|
N/A
|
|
1/16/2021
|
|
8,030
|
|
|
7,639
|
|
|
5,393
|
|
|
3.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Confie Seguros Holdings II Co.
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.25%
|
|
(L +9.00%)
|
|
5/8/2019
|
|
4,000
|
|
|
3,976
|
|
|
3,973
|
|
|
2.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
C7 Data Centers, Inc. (5)
|
|
Other Computer Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (10)
|
|
|
|
12.47%
|
|
(L +8.50%)
|
|
6/22/2020
|
|
14,850
|
|
|
14,738
|
|
|
14,883
|
|
|
10.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Elgin Fasteners Group
|
|
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.50%
|
|
(L +7.25%)
|
|
8/27/2018
|
|
4,104
|
|
|
4,090
|
|
|
3,555
|
|
|
2.5
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
Inhance Technologies Holdings LLC
|
|
Other Basic Inorganic Chemical Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
5.50%
|
|
(L +4.50%)
|
|
2/7/2018
|
|
$
|
2,032
|
|
|
$
|
2,027
|
|
|
$
|
2,017
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Intrafusion Holding Corp. (5)
|
|
Other Outpatient Care Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (9)
|
|
|
|
11.33%
|
|
(L +6.75%)
|
|
9/25/2020
|
|
14,250
|
|
|
14,207
|
|
|
14,393
|
|
|
10.0
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Jobson Healthcare Information, LLC (5)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (12)
|
|
|
|
10.13% cash / 4.295% PIK
|
|
(L +12.425%)
|
|
7/21/2019
|
|
14,762
|
|
|
14,423
|
|
|
12,346
|
|
|
8.6
|
|
|||
Warrants (1,056,428 member units) (11)
|
|
|
|
|
|
|
|
7/21/2019 (12)
|
|
|
|
454
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
14,762
|
|
|
14,877
|
|
|
12,346
|
|
|
8.6
|
|
|||
Maverick Healthcare Equity, LLC (5)
|
|
Home Health Equipment Rental
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (1,250,000 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
1,037
|
|
|
0.7
|
|
||||
Common Equity (1,250,000 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
900
|
|
|
1,037
|
|
|
0.7
|
|
||||
MN Acquisition, LLC (5)
|
|
Software Publishers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
10.50%
|
|
(L + 9.50%)
|
|
8/24/2021
|
|
4,989
|
|
|
4,896
|
|
|
4,949
|
|
|
3.4
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
My Alarm Center, LLC (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.00%
|
|
(L +11.00%)
|
|
7/9/2019
|
|
6,250
|
|
|
6,034
|
|
|
6,260
|
|
|
4.4
|
|
|||
Preferred Equity (100 Class A units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
203
|
|
|
205
|
|
|
0.1
|
|
||||
Preferred Equity (25 Class A-1 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
44
|
|
|
36
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,250
|
|
|
6,281
|
|
|
6,501
|
|
|
4.5
|
|
|||
MYI Acquiror Limited (6)
|
|
Insurance Agencies and Brokerages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
5.75%
|
|
(L +4.50%)
|
|
5/28/2019
|
|
4,686
|
|
|
4,680
|
|
|
4,613
|
|
|
3.2
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
NHR Holdings, LLC
|
|
Other Telecommunications
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
5.50%
|
|
(L +4.25%)
|
|
11/30/2018
|
|
2,666
|
|
|
2,652
|
|
|
2,630
|
|
|
1.8
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
NVA Holdings, Inc.
|
|
Veterinary Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.00%
|
|
(L +7.00%)
|
|
8/14/2022
|
|
$
|
650
|
|
|
$
|
650
|
|
|
$
|
651
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
O2 Holdings, LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.77%
|
|
(L +11.00%)
|
|
9/2/2021
|
|
9,500
|
|
|
9,417
|
|
|
9,430
|
|
|
6.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
PM Acquisition LLC
|
|
All Other General Merchandise Stores
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.50%
|
|
N/A
|
|
10/31/2021
|
|
6,402
|
|
|
6,340
|
|
|
6,340
|
|
|
4.4
|
|
|||
Common equity (499 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
499
|
|
|
499
|
|
|
0.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,402
|
|
|
6,839
|
|
|
6,839
|
|
|
4.7
|
|
|||
Planet Fitness Midwest LLC (5)
|
|
Fitness and Recreational Sports Centers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
12/16/2021
|
|
5,000
|
|
|
4,955
|
|
|
4,980
|
|
|
3.5
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Quantum Spatial, Inc. (f/k/a Aero-Metric, Inc.)
|
|
Other Information Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.75% cash / 1.00% PIK
|
|
(L +6.50%)
|
|
8/27/2017
|
|
2,440
|
|
|
2,427
|
|
|
2,340
|
|
|
1.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ranpak Corp.
|
|
Packaging Machinery Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.25%
|
|
(L +7.25%)
|
|
10/3/2022
|
|
2,000
|
|
|
1,996
|
|
|
1,885
|
|
|
1.3
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Security Alarm Financing Enterprises, L.P. (5)
|
|
Security Systems Services (except Locksmiths)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
14.00%
|
|
(L +13.00%)
|
|
6/19/2020
|
|
12,500
|
|
|
12,382
|
|
|
12,382
|
|
|
8.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sentry Centers Holdings, LLC
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.40%
|
|
(L +11.50%)
|
|
7/24/2019
|
|
4,209
|
|
|
4,145
|
|
|
4,171
|
|
|
2.9
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
smarTours, LLC (5)
|
|
Tour Operators
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Preferred Equity (500,000 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
439
|
|
|
1,019
|
|
|
0.7
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
Southern Technical Institute, LLC (5)
|
|
Colleges, Universities, and Professional Schools
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
9.00% cash / 4.00% PIK
|
|
(L +12.00%)
|
|
12/2/2020
|
|
$
|
3,398
|
|
|
$
|
3,330
|
|
|
$
|
3,158
|
|
|
2.2
|
%
|
Preferred Equity (1,764,720 units), 15.75% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
1,938
|
|
|
1,984
|
|
|
1.4
|
|
||||
Warrants (2,174,905 units) (11)
|
|
|
|
|
|
|
|
3/30/2026 (12)
|
|
|
|
46
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,398
|
|
|
5,314
|
|
|
5,142
|
|
|
3.6
|
|
|||
Stancor, L.P. (5)
|
|
Pump and Pumping Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.75%
|
|
(L +9.00%)
|
|
8/19/2019
|
|
9,450
|
|
|
9,407
|
|
|
9,181
|
|
|
6.4
|
|
|||
Preferred Equity (1,250,000 units), 8% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
1,501
|
|
|
835
|
|
|
0.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
9,450
|
|
|
10,908
|
|
|
10,016
|
|
|
7.0
|
|
|||
TravelCLICK, Inc.
|
|
Computer Systems Design and Related Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
8.75%
|
|
(L +7.75%)
|
|
11/8/2021
|
|
4,000
|
|
|
3,879
|
|
|
3,946
|
|
|
2.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United Biologics Holdings, LLC (5)
|
|
Medical Laboratories
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (12)
|
|
|
|
12.00% cash / 2.00% PIK
|
|
N/A
|
|
4/30/2018
|
|
4,181
|
|
|
4,106
|
|
|
4,034
|
|
|
2.8
|
|
|||
Subordinated Loan (11)
|
|
|
|
8.00% PIK
|
|
N/A
|
|
4/30/2019
|
|
7
|
|
|
7
|
|
|
6
|
|
|
—
|
|
|||
Preferred Equity (151,787 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
20
|
|
|
—
|
|
||||
Warrants (29,374 units) (11)
|
|
|
|
|
|
|
|
3/5/2022 (12)
|
|
|
|
82
|
|
|
114
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,188
|
|
|
4,204
|
|
|
4,174
|
|
|
2.9
|
|
|||
VanDeMark Chemical Inc.
|
|
Other Basic Inorganic Chemical Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
6.50%
|
|
(L +5.25%)
|
|
11/30/2017
|
|
2,406
|
|
|
2,386
|
|
|
2,379
|
|
|
1.7
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Non-control/Non-affiliate Investments
|
|
|
|
|
|
|
|
|
|
174,405
|
|
|
178,279
|
|
|
173,219
|
|
|
120.6
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
All Metals Holding, LLC (5)
|
|
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
12.00% cash / 1.00% PIK
|
|
N/A
|
|
12/28/2021
|
|
$
|
12,867
|
|
|
$
|
12,135
|
|
|
$
|
12,865
|
|
|
8.9
|
%
|
Common Equity (637,954 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
565
|
|
|
1,277
|
|
|
0.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
12,867
|
|
|
12,700
|
|
|
14,142
|
|
|
9.8
|
|
|||
Contract Datascan Holdings, Inc. (5)
|
|
Office Machinery and Equipment Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
12.00%
|
|
N/A
|
|
2/5/2021
|
|
8,000
|
|
|
7,980
|
|
|
7,902
|
|
|
5.5
|
|
|||
Preferred Equity (3,061 shares), 10% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
3,804
|
|
|
5,421
|
|
|
3.8
|
|
||||
Common Equity (11,273 shares) (11)
|
|
|
|
|
|
|
|
|
|
|
|
104
|
|
|
187
|
|
|
0.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,000
|
|
|
11,888
|
|
|
13,510
|
|
|
9.4
|
|
|||
Intelli-Mark Technologies, Inc.(5)
|
|
Other Travel Arrangement and Reservation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (12)
|
|
|
|
13.00%
|
|
N/A
|
|
11/23/2020
|
|
8,750
|
|
|
8,682
|
|
|
8,841
|
|
|
6.2
|
|
|||
Common Equity (2,553,089 shares) (11)
|
|
|
|
|
|
|
|
|
|
|
|
1,500
|
|
|
1,998
|
|
|
1.5
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,750
|
|
|
10,182
|
|
|
10,839
|
|
|
7.7
|
|
|||
Master Cutlery, LLC (5)
|
|
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
13.00%
|
|
N/A
|
|
4/17/2020
|
|
4,741
|
|
|
4,722
|
|
|
4,440
|
|
|
3.1
|
|
|||
Preferred Equity (3,723 units), 5% cash, 3% PIK (8) (11)
|
|
|
|
|
|
|
|
|
|
|
|
3,483
|
|
|
954
|
|
|
0.7
|
|
||||
Common Equity (15,564 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,741
|
|
|
8,205
|
|
|
5,394
|
|
|
3.8
|
|
|||
NeoSystems Corp. (5)
|
|
Other Accounting Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
10.50% cash / 2.75% PIK
|
|
N/A
|
|
8/13/2019
|
|
4,090
|
|
|
4,070
|
|
|
3,656
|
|
|
2.5
|
|
|||
Preferred Equity (521,962 convertible shares), 10% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
1,258
|
|
|
1,255
|
|
|
0.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
4,090
|
|
|
5,328
|
|
|
4,911
|
|
|
3.4
|
|
|||
Pfanstiehl Holdings, Inc. (5)
|
|
Pharmaceutical Preparation Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan (12)
|
|
|
|
10.50%
|
|
N/A
|
|
9/29/2021
|
|
3,788
|
|
|
3,832
|
|
|
3,810
|
|
|
2.6
|
|
|||
Common Equity (400 shares)
|
|
|
|
|
|
|
|
|
|
|
|
217
|
|
|
6,083
|
|
|
4.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
3,788
|
|
|
4,049
|
|
|
9,893
|
|
|
6.8
|
|
Portfolio Company (1)
Investment Type |
|
Industry
|
|
Interest Rate (2)
|
|
Spread Above
Index (2)
|
|
Maturity
|
|
Principal
Amount
|
|
Amortized Cost
|
|
Fair Value
|
|
Percent of
Net Assets |
|||||||
Strategic Pharma Solutions, Inc. (5)
|
|
Other Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
11.32%
|
|
(L +10.00%)
|
|
12/18/2020
|
|
$
|
8,411
|
|
|
$
|
8,344
|
|
|
$
|
8,383
|
|
|
5.8
|
%
|
Preferred Equity (1,191 units), 6% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
1,915
|
|
|
3,026
|
|
|
2.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
8,411
|
|
|
10,259
|
|
|
11,409
|
|
|
7.9
|
|
|||
TRS Services, LLC (5)
|
|
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan
|
|
|
|
9.75% cash / 1.5% PIK
|
|
(L +10.25%)
|
|
12/10/2019
|
|
9,807
|
|
|
9,607
|
|
|
9,549
|
|
|
6.5
|
|
|||
Preferred Equity (329,266 Class AA units), 15% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
346
|
|
|
354
|
|
|
0.2
|
|
||||
Preferred Equity (3,000,000 Class A units), 11% PIK (11)
|
|
|
|
|
|
|
|
|
|
|
|
3,170
|
|
|
1,707
|
|
|
1.2
|
|
||||
Common Equity (3,000,000 units) (11)
|
|
|
|
|
|
|
|
|
|
|
|
572
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
9,807
|
|
|
13,695
|
|
|
11,610
|
|
|
7.9
|
|
|||
Total Affiliate Investments
|
|
|
|
|
|
|
|
|
|
60,454
|
|
|
76,306
|
|
|
81,708
|
|
|
56.7
|
|
|||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Malabar International (5)
|
|
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Subordinated Loan
|
|
|
|
11.25% cash / 2.00% PIK
|
|
N/A
|
|
11/13/2021
|
|
7,617
|
|
|
7,642
|
|
|
7,683
|
|
|
5.3
|
|
|||
Preferred Stock (1,644 shares), 6% cash
|
|
|
|
|
|
|
|
|
|
|
|
4,283
|
|
|
5,868
|
|
|
4.1
|
|
||||
|
|
|
|
|
|
|
|
|
|
7,617
|
|
|
11,925
|
|
|
13,551
|
|
|
9.4
|
|
|||
MTE Holding Corp. (5)
|
|
Travel Trailer and Camper Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Senior Secured Loan (to Mirage Trailers, LLC, a controlled, consolidated subsidiary of MTE Holding Corp.)
|
|
|
|
12.50%
|
|
(L +11.50%)
|
|
11/25/2020
|
|
9,804
|
|
|
9,728
|
|
|
9,766
|
|
|
6.8
|
|
|||
Common Equity (554 shares)
|
|
|
|
|
|
|
|
|
|
|
|
3,069
|
|
|
3,383
|
|
|
2.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
9,804
|
|
|
12,797
|
|
|
13,149
|
|
|
9.2
|
|
|||
Total Control Investment
|
|
|
|
|
|
|
|
|
|
17,421
|
|
|
24,722
|
|
|
26,700
|
|
|
18.6
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total Investments
|
|
|
|
|
|
|
|
|
|
$
|
252,280
|
|
|
$
|
279,307
|
|
|
$
|
281,627
|
|
|
195.9
|
%
|
(1)
|
Equity ownership may be held in shares or units of companies affiliated with the portfolio company.
|
(2)
|
The majority of investments that bear interest at a variable rate are indexed to LIBOR (L) or Prime (P), and reset monthly, quarterly, or semi-annually. Substantially all of the Company's LIBOR referenced investments are subject to a reference rate floor at December 31, 2016, with a weighted average reference rate floor of 1.11%. For each investment, the Company has provided the spread over the reference rate
|
(3)
|
Fair value was determined using significant unobservable inputs for all of the Company's investments. See Note 6 for further details.
|
(4)
|
The negative fair value is the result of the unfunded commitment being below par.
|
(5)
|
Investments held by OFS SBIC I LP. All other investments pledged as collateral under the PWB Credit Facility.
|
(6)
|
Non-qualifying assets under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of the Company's assets, as defined under Section 55 of the 1940 Act, at the time of acquisition of any additional non-qualifying assets. As of December 31, 2016, 98.4% of the Company's assets were qualifying assets.
|
(7)
|
Investment was on non-accrual status as of December 31, 2016, meaning the Company has ceased recognizing all or a portion of income on the investment. See Note 2,
Non-accrual loans
for further details.
|
(8)
|
The fair value of the most-recently recognized PIK dividend as of December 31, 2016, was $0.
|
(9)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 11.33% at December 31, 2016, includes additional interest of 2.08% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(10)
|
The Company has entered into a contractual arrangement with co‑lenders whereby, subject to certain conditions, it has agreed to receive its payment after the repayment of certain co‑lenders pursuant to a payment waterfall. The reported interest rate of 12.47% at December 31, 2016, includes additional interest of 2.97% per annum as specified under the contractual arrangement among the Company and the co‑lenders.
|
(11)
|
Non-income producing.
|
(12)
|
The interest rate on these investments contains a PIK provision, whereby the issuer has the option to make interest payments in cash or with the issuance of additional securities as payment of the entire PIK provision. The interest rate in the schedule represents the current interest rate in effect for these investments. The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed as of December 31, 2016:
|
Portfolio Company
|
|
Investment Type
|
|
Range of PIK
Option
|
|
Range of Cash
Option
|
|
Maximum PIK
Rate Allowed
|
|
Community Intervention Services, Inc.
|
|
Subordinated Loan
|
|
0% or 6.00%
|
|
13.00% or 7.00%
|
|
6.00
|
%
|
Intelli-Mark Technologies, Inc.
|
|
Senior Secured Loan
|
|
0% or 2.00%
|
|
13.00% or 11.50%
|
|
2.00
|
%
|
Jobson Healthcare Information, LLC
|
|
Senior Secured Loan
|
|
1.50% and 4.295%
|
|
10.13% and 12.925%
|
|
4.295
|
%
|
Pfanstiehl Holdings, Inc.
|
|
Subordinated Loan
|
|
0% or 2.00%
|
|
10.50% or % 8.50%
|
|
2.00
|
%
|
United Biologics Holdings, LLC
|
|
Senior Secured Loan
|
|
0% or 2.00%
|
|
14.00% or 12.00%
|
|
2.00
|
%
|
(13)
|
Represents expiration date of the warrants.
|
|
|
|
|
Standard
|
|
Description
|
|
Period of Adoption
|
|
Effect of Adoption on the financial statements
|
Standards that were adopted
|
|
|
|
|
|
|
ASU 2015-02, Consolidation: Amendments to the Consolidation Analysis
|
|
Modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities.
|
|
First Quarter 2016 retrospectively
|
|
No material impact to the Company's consolidated financial statements.
|
ASU 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs
|
|
Changes the presentation of debt issuance costs in the financial statements where an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. ASU 2015-03 did not specifically address presentation or subsequent measurement of debt issuance costs related to line of credit arrangements.
|
|
First Quarter 2016 retrospectively
|
|
Resulted in a $3,420 retrospective reduction of both net deferred debt issuance costs and SBA debentures payable in the consolidated balance sheet as of December 31, 2015 and a reduction of amortization and write-off of deferred debt issuance costs and corresponding increase in interest expense in the consolidated statement of operations for the years ended December 31, 2015 and 2014, of $2,100 and $1,354, respectively. Net deferred debt issuance costs of $2,657 and $3,037, are presented as a direct deduction from the SBA debentures payable in the consolidated balance sheet as of December 31, 2017, and 2016, respectively. Amortization and write-off of deferred debt issuance costs associated with the Company's SBA debentures and the OFS Capital WM revolving line of credit is included in interest expense in the consolidated statement of operations. See Note 8 for more details. There was no impact to consolidated earnings as a result of this adoption.
|
|
Standard
|
|
Description
|
|
Period of Adoption
|
|
Effect of Adoption on the financial statements
|
Standards that were adopted
|
|
|
|
|
|
|
ASU 2015-15, Interest – Imputation of Interest: Presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements - amendments to SEC paragraphs
|
|
Response to SEC views on ASU 2015-03. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line of credit arrangements, the SEC stated it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement.
|
|
First Quarter 2016 retrospectively
|
|
Net deferred debt issuance costs of $297 and $256 associated with the Company's PWB Credit Facility are presented as an asset and included in prepaid expenses and other assets in the consolidated balance sheet as of December 31, 2017 and 2016, respectively. There was no impact to consolidated earnings as a result of this adoption.
|
ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes
|
|
Requires deferred tax liabilities and assets to be classified as noncurrent in the balance sheet.
|
|
First Quarter 2017 prospectively
|
|
No material impact to the Company's consolidated financial statements.
|
|
Standard
|
|
Description
|
|
Effect of Adoption on the financial statements
|
Standards that are not yet adopted
|
|
|
|
|
ASU 2014-09, Revenue from Contracts with Customers
|
|
Supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of the standard is to recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The standard defines a five step process to achieve this core principle. The standard must be adopting using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The adoption will include updates as provided under ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing; ASU 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients; ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers; ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers, Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments and ASU 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers.
|
|
In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09, such that the guidance is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is not permitted. The Company has completed its evaluation and has determined the adoption of new revenue guidance will not have a material impact to its consolidated financial statements, including the presentation of revenues in its consolidated statements of operations.
|
ASU 2016-01, Financial Instruments – Overall
|
|
Modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Entities will have to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value, and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under ASC Topic 820, and as such these investments may be measured at cost.
|
|
Annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is required to record its investments at fair value with changes in fair value recognized in net income in accordance with ASC Topic 946. Therefore, the adoption of ASU 2016-01 is not expected to have a material effect on the Company’s consolidated financial statements
|
|
Standard
|
|
Description
|
|
Effect of Adoption on the financial statements
|
Standards that are not yet adopted
|
|
|
|
|
ASU 2016-15, Statement of Cash Flows
|
|
Addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows.
|
|
Annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years and early adoption is permitted. The Company is currently evaluating the impact of this ASU will have on the Company's consolidated financial position and disclosures.
|
ASU 2016-19, Technical Corrections and Improvements
|
|
Makes minor corrections and clarifications that affect a wide variety of topics in the Accounting Standards Codification, including an amendment to Topic 820, Fair Value Measurement, which clarifies the difference between a valuation approach and a valuation technique when applying the guidance of that Topic. The amendment also requires an entity to disclose when there has been a change in either or both a valuation approach and/or a valuation technique. The transition guidance for the Topic 820 amendment must be applied prospectively because it could potentially involve the use of hindsight that includes fair value measurements.
|
|
Annual reporting periods beginning after December 15, 2017, including interim periods within those years. Early application is permitted for any fiscal year or interim period for which the entity’s financial statements have not yet been issued. The Company is currently evaluating the impact this ASU will have on the Company’s consolidated financial position or disclosures.
|
ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
|
|
Removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
|
|
Annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early application is permitted. The adoption of ASU 2017-04 is not expected to have a material effect on the Company's consolidated financial statements.
|
ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 620-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
|
|
Defines "insubstance nonfinancial asset", unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing sales of real estate, removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures.
|
|
The effective date and transition requirements are the same as the effective date and transition requirements for ASU 2014-09 and is not expected to have a material effect on the Company's consolidated financial statements.
|
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities
|
|
Shortens the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Securities held at a discount are to continue to be amortized to maturity.
|
|
Annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the ASU in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. The adoption of ASU 2017-08 is not expected to have a material effect on the Company's consolidated financial statements.
|
|
Standard
|
|
Description
|
|
Effect of Adoption on the financial statements
|
Standards that are not yet adopted
|
|
|
|
|
ASU 2017-12, Derivatives and Hedging, Targeted Improvements to Accounting for Hedging Activities
|
|
Eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Additionally, the guidance also expands an entity's ability to apply hedge accounting for nonfinancial and financial risk components, simplifies the hedge documentation and hedge effectiveness assessment requirements, and modifies certain disclosure requirements.
|
|
Annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on the Company’s consolidated financial position or disclosures.
|
|
|
|
Amortized Cost
|
|
Percentage of Net Assets
|
|
Fair Value
|
|
Percentage of Net Assets
|
||||||
Senior secured debt investments
|
$
|
196,020
|
|
|
104.1
|
%
|
|
$
|
195,112
|
|
|
103.5
|
%
|
Subordinated debt investments
|
63,031
|
|
|
33.5
|
|
|
51,198
|
|
|
27.2
|
|
||
Preferred equity
|
24,103
|
|
|
12.8
|
|
|
19,200
|
|
|
10.2
|
|
||
Common equity and warrants
|
6,821
|
|
|
3.6
|
|
|
11,989
|
|
|
6.4
|
|
||
Total
|
289,975
|
|
|
154.0
|
%
|
|
277,499
|
|
|
147.3
|
%
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Security Systems Services (except Locksmiths)
|
|
$
|
15,179
|
|
|
5.2
|
%
|
|
8.1
|
%
|
|
$
|
15,145
|
|
|
5.5
|
%
|
|
8.0
|
%
|
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fitness and Recreational Sports Centers
|
|
17,941
|
|
|
6.2
|
|
|
9.5
|
|
|
18,628
|
|
|
6.7
|
|
|
9.9
|
|
||
Other Amusement and Recreation Industries
|
|
6,948
|
|
|
2.4
|
|
|
3.7
|
|
|
6,948
|
|
|
2.5
|
|
|
3.7
|
|
||
Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electrical Contractors and Other Wiring Installation Contractors
|
|
18,425
|
|
|
6.4
|
|
|
9.8
|
|
|
18,505
|
|
|
6.7
|
|
|
9.8
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
5,591
|
|
|
1.9
|
|
|
3.0
|
|
|
1,201
|
|
|
0.4
|
|
|
0.6
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Insurance Agencies and Brokerages
|
|
9,579
|
|
|
3.3
|
|
|
5.1
|
|
|
9,417
|
|
|
3.4
|
|
|
5.0
|
|
||
Offices of Real Estate Agents and Brokers
|
|
3,939
|
|
|
1.4
|
|
|
2.1
|
|
|
4,070
|
|
|
1.5
|
|
|
2.2
|
|
||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Laboratories
|
|
4,346
|
|
|
1.5
|
|
|
2.3
|
|
|
4,512
|
|
|
1.6
|
|
|
2.4
|
|
||
Offices of Physicians, Mental Health Specialists
|
|
5,547
|
|
|
1.9
|
|
|
2.9
|
|
|
5,503
|
|
|
2.0
|
|
|
2.9
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
7,639
|
|
|
2.6
|
|
|
4.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
3,873
|
|
|
1.3
|
|
|
2.1
|
|
|
3,544
|
|
|
1.3
|
|
|
1.9
|
|
||
Commercial Printing (except Screen and Books)
|
|
4,755
|
|
|
1.6
|
|
|
2.5
|
|
|
4,767
|
|
|
1.7
|
|
|
2.5
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
|
5,375
|
|
|
1.9
|
|
|
2.9
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,040
|
|
|
1.4
|
|
|
2.1
|
|
|
8,510
|
|
|
3.1
|
|
|
4.5
|
|
||
Pump and Pumping Equipment Manufacturing
|
|
9,397
|
|
|
3.2
|
|
|
5.0
|
|
|
9,405
|
|
|
3.4
|
|
|
5.0
|
|
||
Travel Trailer and Camper Manufacturing
|
|
10,213
|
|
|
3.5
|
|
|
5.5
|
|
|
10,568
|
|
|
3.7
|
|
|
5.5
|
|
||
Truck Trailer Manufacturing
|
|
6,971
|
|
|
2.4
|
|
|
3.8
|
|
|
7,064
|
|
|
2.5
|
|
|
3.7
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Automotive Oil Change and Lubrication Shops
|
|
24,748
|
|
|
8.5
|
|
|
13.1
|
|
|
24,984
|
|
|
9.0
|
|
|
13.3
|
|
||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
13,677
|
|
|
4.8
|
|
|
7.3
|
|
|
12,105
|
|
|
4.4
|
|
|
6.4
|
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computer Systems Design and Related Services
|
|
$
|
7,303
|
|
|
2.5
|
%
|
|
3.9
|
%
|
|
$
|
7,334
|
|
|
2.6
|
%
|
|
3.9
|
%
|
Other Accounting Services
|
|
3,526
|
|
|
1.2
|
|
|
1.9
|
|
|
4,391
|
|
|
1.6
|
|
|
2.3
|
|
||
Other Professional, Scientific, and Technical Services
|
|
23,854
|
|
|
8.2
|
|
|
12.7
|
|
|
21,266
|
|
|
7.7
|
|
|
11.3
|
|
||
Testing Laboratories
|
|
3,470
|
|
|
1.2
|
|
|
1.8
|
|
|
3,439
|
|
|
1.2
|
|
|
1.8
|
|
||
Veterinary Services
|
|
743
|
|
|
0.3
|
|
|
0.4
|
|
|
748
|
|
|
0.3
|
|
|
0.4
|
|
||
Public Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Justice, Public Order, and Safety Activities
|
|
9,813
|
|
|
3.4
|
|
|
5.2
|
|
|
9,919
|
|
|
3.6
|
|
|
5.3
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Health Equipment Rental
|
|
900
|
|
|
0.3
|
|
|
0.5
|
|
|
141
|
|
|
0.1
|
|
|
0.1
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
12,436
|
|
|
4.3
|
|
|
6.6
|
|
|
14,224
|
|
|
5.1
|
|
|
7.6
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cosmetics, Beauty Supplies, and Perfume Stores
|
|
3,492
|
|
|
1.2
|
|
|
1.9
|
|
|
3,472
|
|
|
1.3
|
|
|
1.8
|
|
||
Shoe store
|
|
9,462
|
|
|
3.3
|
|
|
5.0
|
|
|
9,497
|
|
|
3.4
|
|
|
5.0
|
|
||
Warehouse Clubs and Supercenters
|
|
9,158
|
|
|
3.2
|
|
|
4.9
|
|
|
9,063
|
|
|
3.3
|
|
|
4.8
|
|
||
All Other General Merchandise Stores
|
|
6,607
|
|
|
2.3
|
|
|
3.5
|
|
|
6,337
|
|
|
2.3
|
|
|
3.4
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
12,853
|
|
|
4.4
|
|
|
6.8
|
|
|
14,544
|
|
|
5.2
|
|
|
7.7
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,175
|
|
|
2.8
|
|
|
4.3
|
|
|
2,873
|
|
|
1.0
|
|
|
1.5
|
|
||
|
|
$
|
289,975
|
|
|
100.0
|
%
|
|
154.0
|
%
|
|
$
|
277,499
|
|
|
100.0
|
%
|
|
147.3
|
%
|
|
Amortized Cost
|
|
Percentage of Net Assets
|
|
Fair Value
|
|
Percentage of Net Assets
|
||||||
Senior secured debt investments
|
$
|
182,315
|
|
|
126.8
|
%
|
|
$
|
180,955
|
|
|
125.9
|
%
|
Subordinated debt investments
|
66,591
|
|
|
46.3
|
|
|
63,410
|
|
|
44.1
|
|
||
Preferred equity
|
23,293
|
|
|
16.2
|
|
|
23,721
|
|
|
16.5
|
|
||
Common equity and warrants
|
7,108
|
|
|
4.9
|
|
|
13,541
|
|
|
9.4
|
|
||
Total
|
$
|
279,307
|
|
|
194.2
|
%
|
|
$
|
281,627
|
|
|
195.9
|
%
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Administrative and Support and Waste Management and Remediation Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Travel Arrangement and Reservation Services
|
|
$
|
10,182
|
|
|
3.6
|
%
|
|
7.1
|
%
|
|
$
|
10,839
|
|
|
3.8
|
%
|
|
7.5
|
%
|
Security Systems Services (except Locksmiths)
|
|
18,663
|
|
|
6.7
|
|
|
13.0
|
|
|
18,883
|
|
|
6.7
|
|
|
13.1
|
|
||
Tour Operators
|
|
439
|
|
|
0.2
|
|
|
0.3
|
|
|
1,019
|
|
|
0.4
|
|
|
0.7
|
|
||
Arts, Entertainment, and Recreation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fitness and Recreational Sports Centers
|
|
14,372
|
|
|
5.1
|
|
|
10.0
|
|
|
14,410
|
|
|
5.1
|
|
|
10.0
|
|
||
Education Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Colleges, Universities, and Professional Schools
|
|
5,314
|
|
|
1.9
|
|
|
3.7
|
|
|
5,142
|
|
|
1.8
|
|
|
3.6
|
|
||
Finance and Insurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Insurance Agencies and Brokerages
|
|
13,510
|
|
|
4.8
|
|
|
9.4
|
|
|
13,599
|
|
|
4.8
|
|
|
9.5
|
|
||
Health Care and Social Assistance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Laboratories
|
|
4,204
|
|
|
1.5
|
|
|
2.9
|
|
|
4,174
|
|
|
1.5
|
|
|
2.9
|
|
||
Other Outpatient Care Centers
|
|
14,207
|
|
|
5.2
|
|
|
9.9
|
|
|
14,393
|
|
|
5.1
|
|
|
10.0
|
|
||
Outpatient Mental Health and Substance Abuse Centers
|
|
7,639
|
|
|
2.7
|
|
|
5.3
|
|
|
5,393
|
|
|
1.9
|
|
|
3.8
|
|
||
Information
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Information Services
|
|
2,427
|
|
|
0.9
|
|
|
1.7
|
|
|
2,340
|
|
|
0.8
|
|
|
1.6
|
|
||
Other Telecommunications
|
|
2,652
|
|
|
0.9
|
|
|
1.8
|
|
|
2,630
|
|
|
0.9
|
|
|
1.8
|
|
||
Software Publishers
|
|
4,896
|
|
|
1.8
|
|
|
3.4
|
|
|
4,949
|
|
|
1.8
|
|
|
3.4
|
|
||
Manufacturing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bolt, Nut, Screw, Rivet, and Washer Manufacturing
|
|
4,090
|
|
|
1.5
|
|
|
2.8
|
|
|
3,555
|
|
|
1.3
|
|
|
2.5
|
|
||
Other Aircraft Parts and Auxiliary Equipment Manufacturing
|
|
11,925
|
|
|
4.3
|
|
|
8.3
|
|
|
13,551
|
|
|
4.8
|
|
|
9.4
|
|
||
Other Basic Inorganic Chemical Manufacturing
|
|
4,413
|
|
|
1.6
|
|
|
3.1
|
|
|
4,396
|
|
|
1.6
|
|
|
3.1
|
|
||
Packaging Machinery Manufacturing
|
|
1,996
|
|
|
0.7
|
|
|
1.4
|
|
|
1,885
|
|
|
0.7
|
|
|
1.3
|
|
||
Pharmaceutical Preparation Manufacturing
|
|
4,049
|
|
|
1.4
|
|
|
2.8
|
|
|
9,893
|
|
|
3.5
|
|
|
6.9
|
|
||
Pump and Pumping Equipment Manufacturing
|
|
10,908
|
|
|
3.9
|
|
|
7.6
|
|
|
10,016
|
|
|
3.6
|
|
|
7.0
|
|
||
Travel Trailer and Camper Manufacturing
|
|
12,797
|
|
|
4.6
|
|
|
8.9
|
|
|
13,149
|
|
|
4.7
|
|
|
9.1
|
|
||
Other Services (except Public Administration)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance
|
|
13,695
|
|
|
4.9
|
|
|
9.5
|
|
|
11,610
|
|
|
4.1
|
|
|
8.1
|
|
|
|
|
|
|
Percentage of Total:
|
|
|
|
Percentage of Total:
|
||||||||||||
|
|
Amortized Cost
|
|
Amortized Cost
|
|
Net Assets
|
|
Fair Value
|
|
Fair Value
|
|
Net Assets
|
||||||||
Professional, Scientific, and Technical Services
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Computer Systems Design and Related Services
|
|
$
|
3,879
|
|
|
1.4
|
%
|
|
2.7
|
%
|
|
$
|
3,946
|
|
|
1.4
|
%
|
|
2.7
|
%
|
Custom Computer Programming Services
|
|
5,097
|
|
|
1.8
|
|
|
3.5
|
|
|
5,143
|
|
|
1.8
|
|
|
3.6
|
|
||
Other Accounting Services
|
|
5,328
|
|
|
1.9
|
|
|
3.7
|
|
|
4,911
|
|
|
1.7
|
|
|
3.4
|
|
||
Other Computer Related Services
|
|
14,738
|
|
|
5.3
|
|
|
10.3
|
|
|
14,883
|
|
|
5.3
|
|
|
10.4
|
|
||
Other Professional, Scientific, and Technical Services
|
|
32,750
|
|
|
11.7
|
|
|
22.7
|
|
|
31,422
|
|
|
11.2
|
|
|
21.8
|
|
||
Veterinary Services
|
|
650
|
|
|
0.2
|
|
|
0.5
|
|
|
651
|
|
|
0.2
|
|
|
0.5
|
|
||
Real Estate and Rental and Leasing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home Health Equipment Rental
|
|
900
|
|
|
0.3
|
|
|
0.6
|
|
|
1,037
|
|
|
0.4
|
|
|
0.7
|
|
||
Office Machinery and Equipment Rental and Leasing
|
|
11,888
|
|
|
4.3
|
|
|
8.3
|
|
|
13,510
|
|
|
4.8
|
|
|
9.4
|
|
||
Offices of Real Estate Agents and Brokers
|
|
3,923
|
|
|
1.4
|
|
|
2.7
|
|
|
3,923
|
|
|
1.4
|
|
|
2.7
|
|
||
Offices of Real Estate Appraisers
|
|
10,032
|
|
|
3.6
|
|
|
7.0
|
|
|
10,000
|
|
|
3.6
|
|
|
7.0
|
|
||
Retail Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
All Other General Merchandise Stores
|
|
6,839
|
|
|
2.4
|
|
|
4.8
|
|
|
6,839
|
|
|
2.4
|
|
|
4.8
|
|
||
Wholesale Trade
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Metal Service Centers and Other Metal Merchant Wholesalers
|
|
12,700
|
|
|
4.5
|
|
|
8.8
|
|
|
14,142
|
|
|
5.0
|
|
|
9.8
|
|
||
Sporting and Recreational Goods and Supplies Merchant Wholesalers
|
|
8,205
|
|
|
3.0
|
|
|
5.7
|
|
|
5,394
|
|
|
1.9
|
|
|
3.8
|
|
||
|
|
$
|
279,307
|
|
|
100.0
|
%
|
|
194.2
|
|
|
$
|
281,627
|
|
|
100.0
|
%
|
|
195.9
|
%
|
|
|
|
December 31,
|
||||||
Balance Sheet:
|
|
2017
|
|
2016
|
||||
Current assets
|
|
$
|
7,161
|
|
|
$
|
5,535
|
|
Noncurrent assets
|
|
25,408
|
|
|
24,681
|
|
||
Total Assets
|
|
$
|
32,569
|
|
|
$
|
30,216
|
|
Current liabilities
|
|
$
|
3,116
|
|
|
$
|
2,401
|
|
Noncurrent liabilities
|
|
17,276
|
|
|
16,889
|
|
||
Total liabilities
|
|
20,392
|
|
|
19,290
|
|
||
Non-controlling interest
|
|
5,675
|
|
|
4,878
|
|
||
Total equity
|
|
6,502
|
|
|
6,048
|
|
|
|
Years Ended December 31,
|
||||||||||
Summary of Operations:
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net Sales
|
|
$
|
31,614
|
|
|
$
|
27,704
|
|
|
$
|
1,958
|
|
Gross Profit
|
|
9,857
|
|
|
7,436
|
|
|
508
|
|
|||
Net income (loss)
|
|
2,106
|
|
|
2,232
|
|
|
(967
|
)
|
|||
Net income (loss) attributable to MTE Holding Corp.
|
|
1,594
|
|
|
1,235
|
|
|
(535
|
)
|
•
|
For each debt investment, a basic credit risk rating review process is completed. The risk rating on every credit facility is reviewed and either reaffirmed or revised by OFS Advisor’s investment committee.
|
•
|
Each portfolio company or investment is valued by OFS Advisor.
|
•
|
The preliminary valuations are documented and are then submitted to OFS Advisor’s investment committee for ratification.
|
•
|
Third-party valuation firm(s) provide valuation services as requested, by reviewing the investment committee’s preliminary valuations. OFS Advisor’s investment committee’s preliminary fair value conclusions on each of the Company’s assets for which sufficient market quotations are not readily available is reviewed and assessed by a third-party valuation firm at least once in every 12-month period, and more often as determined by the audit committee of the Company’s Board or required by the Company’s valuation policy. Such valuation assessment may be in the form of positive assurance, range of values or other valuation method based on the discretion of the Company’s Board.
|
•
|
The audit committee of the Board reviews the preliminary valuations of OFS Advisor’s investment committee and independent valuation firms and, if appropriate, recommends the approval of the valuations by the Board.
|
|
•
|
The Company’s Board discusses valuations and determines the fair value of each investment in the portfolio in good faith based on the input of OFS Advisor, the audit committee and, where appropriate, the respective independent valuation firm.
|
|
|
|
Fair Value at December 31, 2017 (1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
||
Senior secured
|
$
|
152,231
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
10.01% - 16.50% (12.24%)
|
|
12,910
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
7.50x - 7.50x (7.50x)
|
|
|
9,063
|
|
|
Indicative Prices
|
|
Broker-dealers' quotes
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
Subordinated
|
47,117
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
11.24% - 16.90% (14.69%)
|
|
|
4,074
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 7.25x (6.37x)
|
|
|
|
|
|
|
|
|
|
||
Equity investments
|
|
|
|
|
|
|
|
||
Preferred equity
|
19,200
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 13.48x (7.80x)
|
|
Common equity and
warrants |
11,489
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.25x - 8.28x (6.27x)
|
(1)
|
Excludes $20,908, $7, and $500 of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at a Transaction Price.
|
|
Fair Value at December 31, 2016 (1)
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
(Weighted average) |
||
Debt investments:
|
|
|
|
|
|
|
|
||
Senior secured
|
$
|
149,128
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
6.70% - 18.71% (12.07%)
|
|
15,901
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
7.25% - 7.50% (7.31%)
|
|
|
|
|
|
|
|
|
|
||
Subordinated
|
45,635
|
|
|
Discounted cash flow
|
|
Discount rates
|
|
10.75% - 21.24% (14.19%)
|
|
|
5,393
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
8.00x - 8.00x (8.00x)
|
|
|
|
|
|
|
|
|
|
||
Equity investments
|
|
|
|
|
|
|
|
||
Preferred equity
|
23,721
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
4.50x - 8.50x (6.82x)
|
|
Common equity and
warrants |
13,042
|
|
|
Enterprise value
|
|
EBITDA multiples
|
|
5.00x - 8.50x (6.07x)
|
(1)
|
Excludes $15,926, $12,382, and $499 of senior secured debt investments, subordinated debt investments, and equity investments, respectively, valued at a Transaction Price.
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Senior
Secured Debt
Investments
|
|
Subordinated
Debt
Investments
|
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2017
|
$
|
180,955
|
|
|
$
|
63,410
|
|
|
$
|
23,721
|
|
|
$
|
13,541
|
|
|
$
|
281,627
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net realized gain on investments
|
(4,908
|
)
|
|
—
|
|
|
10,704
|
|
|
1,037
|
|
|
6,833
|
|
|||||
Net unrealized appreciation (depreciation) on investments
|
467
|
|
|
(8,667
|
)
|
|
(5,331
|
)
|
|
(1,265
|
)
|
|
(14,796
|
)
|
|||||
Amortization of Net Loan Fees
|
1,395
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
1,450
|
|
|||||
Capitalized PIK interest and dividends
|
1,042
|
|
|
466
|
|
|
1,399
|
|
|
—
|
|
|
2,907
|
|
|||||
Amendment fees
|
(280
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(280
|
)
|
|||||
Purchase and origination of portfolio investments
|
127,812
|
|
|
9,244
|
|
|
4,631
|
|
|
1,213
|
|
|
142,900
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(82,137
|
)
|
|
(22,941
|
)
|
|
—
|
|
|
—
|
|
|
(105,078
|
)
|
|||||
Sale and redemption of portfolio investments
|
(17,858
|
)
|
|
—
|
|
|
(17,669
|
)
|
|
(2,537
|
)
|
|
(38,064
|
)
|
|||||
Conversion from debt investment to equity investment (Note 5)
|
(1,745
|
)
|
|
—
|
|
|
1,745
|
|
|
—
|
|
|
—
|
|
|||||
Conversion from subordinated to senior secured debt investment (Note 5)
|
(9,631
|
)
|
|
9,631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 3 assets, December 31, 2017
|
$
|
195,112
|
|
|
$
|
51,198
|
|
|
$
|
19,200
|
|
|
$
|
11,989
|
|
|
$
|
277,499
|
|
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Senior
Secured Debt
Investments
|
|
Subordinated
Debt
Investments
|
|
Preferred Equity
|
|
Common Equity and Warrants
|
|
Total
|
||||||||||
Level 3 assets, January 1, 2016
|
$
|
160,437
|
|
|
$
|
64,240
|
|
|
$
|
22,133
|
|
|
$
|
10,486
|
|
|
$
|
257,296
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net realized gain on investments
|
83
|
|
|
7
|
|
|
—
|
|
|
2,137
|
|
|
2,227
|
|
|||||
Net unrealized appreciation (depreciation) on investments
|
329
|
|
|
(2,376
|
)
|
|
(2,584
|
)
|
|
1,910
|
|
|
(2,721
|
)
|
|||||
Amortization of Net Loan Fees
|
1,012
|
|
|
402
|
|
|
—
|
|
|
—
|
|
|
1,414
|
|
|||||
Capitalized PIK interest and dividends
|
547
|
|
|
602
|
|
|
1,433
|
|
|
—
|
|
|
2,582
|
|
|||||
Amendment fees
|
(442
|
)
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
(539
|
)
|
|||||
Purchase and origination of portfolio investments
|
44,671
|
|
|
22,101
|
|
|
643
|
|
|
822
|
|
|
68,237
|
|
|||||
Proceeds from principal payments on portfolio investments
|
(26,519
|
)
|
|
(14,885
|
)
|
|
—
|
|
|
—
|
|
|
(41,404
|
)
|
|||||
Sale and redemption of portfolio investments
|
(2,840
|
)
|
|
—
|
|
|
—
|
|
|
(2,434
|
)
|
|
(5,274
|
)
|
|||||
Distribution received from equity investment
|
—
|
|
|
—
|
|
|
(324
|
)
|
|
—
|
|
|
(324
|
)
|
|||||
Equity received in connection with purchase of portfolio investments and amendments
|
(743
|
)
|
|
(79
|
)
|
|
248
|
|
|
574
|
|
|
—
|
|
|||||
Conversion from debt investment to equity investment (Note 5)
|
(320
|
)
|
|
(1,765
|
)
|
|
2,039
|
|
|
46
|
|
|
—
|
|
|||||
Conversion from subordinated to senior secured debt investment (Note 5)
|
800
|
|
|
(800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Reclassification from Subordinated to Senior Secured debt
|
3,940
|
|
|
(3,940
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 3 assets, December 31, 2016
|
$
|
180,955
|
|
|
$
|
63,410
|
|
|
$
|
23,721
|
|
|
$
|
13,541
|
|
|
$
|
281,627
|
|
|
Name of Portfolio Company
|
|
Investment Type
|
|
Amount
|
||
Carolina Lubes, Inc.
|
|
Senior Secured Revolver
|
|
$
|
2,433
|
|
The Escape Game, LLC
|
|
Senior Secured Loan
|
|
7,000
|
|
|
TRS Services, LLC
|
|
Senior Secured Loan
|
|
500
|
|
|
|
|
|
|
$
|
9,933
|
|
|
|
|
|
|
Fixed Interest Rate
|
|
SBA debentures outstanding
|
|||||||
Pooling Date
|
|
Maturity Date
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||
September 19, 2012
|
|
September 1, 2022
|
|
3.049
|
%
|
|
$
|
14,000
|
|
|
$
|
14,000
|
|
September 25, 2013
|
|
September 1, 2023
|
|
4.448
|
|
|
7,000
|
|
|
7,000
|
|
||
March 26, 2014
|
|
March 1, 2024
|
|
3.995
|
|
|
5,000
|
|
|
5,000
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.819
|
|
|
4,110
|
|
|
4,110
|
|
||
September 24, 2014
|
|
September 1, 2024
|
|
3.370
|
|
|
31,265
|
|
|
31,265
|
|
||
March 25, 2015
|
|
March 1, 2025
|
|
2.872
|
|
|
65,920
|
|
|
65,920
|
|
||
September 23, 2015
|
|
September 1, 2025
|
|
3.184
|
|
|
22,585
|
|
|
22,585
|
|
||
SBA debentures outstanding
|
|
|
|
|
|
149,880
|
|
|
149,880
|
|
|||
Unamortized debt issuance costs
|
|
|
|
|
|
(2,657
|
)
|
|
(3,037
|
)
|
|||
SBA debentures outstanding, net of unamortized debt issuance costs
|
|
|
|
$
|
147,223
|
|
|
$
|
146,843
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Ordinary taxable income
|
$
|
14,158
|
|
|
$
|
12,157
|
|
|
$
|
10,954
|
|
Long-term capital gain
|
2,738
|
|
|
169
|
|
|
—
|
|
|||
Return of capital
|
—
|
|
|
858
|
|
|
2,197
|
|
|||
Total distributions to stockholders
|
$
|
16,896
|
|
|
$
|
13,184
|
|
|
$
|
13,151
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Ordinary income
|
$
|
—
|
|
|
$
|
—
|
|
Net long-term capital gains
|
4,936
|
|
|
—
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Paid-in capital in excess of par
|
$
|
(409
|
)
|
|
$
|
592
|
|
|
$
|
(198
|
)
|
Accumulated undistributed net investment income
|
954
|
|
|
131
|
|
|
(304
|
)
|
|||
Accumulated net realized gain (loss)
|
(545
|
)
|
|
(723
|
)
|
|
502
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Tax-basis amortized cost of investments
|
$
|
282,401
|
|
|
$
|
273,414
|
|
Tax-basis gross unrealized appreciation on investments
|
16,207
|
|
|
19,554
|
|
||
Tax-basis gross unrealized depreciation on investments
|
(21,109
|
)
|
|
(11,341
|
)
|
||
Tax-basis net unrealized appreciation (depreciation) on investments
|
(4,902
|
)
|
|
8,213
|
|
||
Fair value of investments
|
$
|
277,499
|
|
|
$
|
281,627
|
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Per share data:
|
|
|
|
|
|
||||||
Net asset value per share at beginning of period
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
$
|
14.24
|
|
Distributions
(4)
|
|
|
|
|
|
||||||
From ordinary income
|
(1.14
|
)
|
|
(1.25
|
)
|
|
(1.13
|
)
|
|||
From capital gains
|
(0.22
|
)
|
|
(0.02
|
)
|
|
—
|
|
|||
Return of capital
|
—
|
|
|
(0.09
|
)
|
|
(0.23
|
)
|
|||
Net investment income
|
1.28
|
|
|
1.46
|
|
|
1.39
|
|
|||
Net realized gain (loss) on non-control/non-affiliate investments
|
(0.26
|
)
|
|
0.25
|
|
|
(0.31
|
)
|
|||
Net realized gain on affiliate investments
|
0.81
|
|
|
—
|
|
|
0.14
|
|
|||
Net unrealized appreciation (depreciation) on non-control/non-affiliate investments
|
(0.78
|
)
|
|
(0.69
|
)
|
|
0.53
|
|
|||
Net unrealized appreciation (depreciation) on affiliate investments
|
(0.41
|
)
|
|
0.33
|
|
|
0.13
|
|
|||
Net unrealized appreciation on control investment
|
—
|
|
|
0.07
|
|
|
—
|
|
|||
Issuance of common stock
(5)
|
(0.03
|
)
|
|
—
|
|
|
—
|
|
|||
Other
(6)
|
0.05
|
|
|
—
|
|
|
—
|
|
|||
Net asset value per share at end of period
|
$
|
14.12
|
|
|
$
|
14.82
|
|
|
$
|
14.76
|
|
|
|
|
|
|
|
||||||
Per share market value, end of period
|
$
|
11.90
|
|
|
$
|
13.76
|
|
|
$
|
11.48
|
|
Total return based on market value
(1)
|
(4.7
|
)%
|
|
32.3
|
%
|
|
9.0
|
%
|
|||
Total return based on net asset value
(2)
|
4.3
|
%
|
|
9.7
|
%
|
|
13.4
|
%
|
|||
Shares outstanding at end of period
|
13,340,217
|
|
|
9,700,297
|
|
|
9,691,170
|
|
|||
Weighted average shares outstanding
|
12,403,706
|
|
|
9,693,801
|
|
|
9,670,153
|
|
|||
Ratio/Supplemental Data (in thousands except ratios)
|
|
|
|
|
|
||||||
Average net asset value
(3)
|
$
|
171,631
|
|
|
$
|
142,818
|
|
|
$
|
140,002
|
|
Net asset value at end of period
|
$
|
188,336
|
|
|
$
|
143,778
|
|
|
$
|
143,012
|
|
Net investment income
|
$
|
15,877
|
|
|
$
|
14,145
|
|
|
$
|
13,411
|
|
Ratio of total expenses to average net assets
|
10.2
|
%
|
|
11.9
|
%
|
|
13.5
|
%
|
|||
Ratio of net investment income to net assets at end of period
|
8.4
|
%
|
|
9.8
|
%
|
|
9.6
|
%
|
|||
Portfolio turnover
(7)
|
50.4
|
%
|
|
18.1
|
%
|
|
44.6
|
%
|
(1)
|
Calculation is ending market value less beginning market value, adjusting for dividends and distributions reinvested at prices obtained in the Company’s dividend reinvestment plan for the respective distributions.
|
(2)
|
Calculation is ending net asset value less beginning net asset value, adjusting for dividends and distributions reinvested at the Company’s quarter-end net asset value for the respective distributions.
|
(3)
|
Based on the average of the net asset value at the beginning of the indicated period and the end of each calendar quarter within the period indicated.
|
(4)
|
The components of the distributions are presented on an income tax basis.
|
(5)
|
The issuance of common stock on a per share basis reflects the incremental net asset value change as a result of the Offering.
|
(6)
|
Represents the impact of different share amounts used in calculating per share data as a result of calculating certain per share data based on a weighted average shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.
|
(7)
|
Portfolio turnover rate is calculated using the lesser of period-to-date sales and principal payments or period-to-date purchases over the average of the invested assets at fair value.
|
|
Date Declared
|
|
Record Date
|
|
Payment Date
|
|
Amount
Per Share
|
|
Cash
Distribution
|
|
DRIP Shares
Issued
|
|
DRIP Shares
Value
|
|||||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 4, 2015
|
|
March 17, 2015
|
|
March 31, 2015
|
|
$
|
0.34
|
|
|
$
|
3,133
|
|
|
12,106
|
|
|
$
|
148
|
|
May 4, 2015
|
|
June 16, 2015
|
|
June 30, 2015
|
|
0.34
|
|
|
3,132
|
|
|
12,834
|
|
|
154
|
|
|||
August 6, 2015
|
|
September 16, 2015
|
|
September 30, 2015
|
|
0.34
|
|
|
3,142
|
|
|
14,355
|
|
|
147
|
|
|||
December 2, 2015
|
|
December 17, 2015
|
|
December 31, 2015
|
|
0.34
|
|
|
3,283
|
|
|
1,041
|
|
|
12
|
|
|||
|
|
|
|
|
|
$
|
1.36
|
|
|
$
|
12,690
|
|
|
40,336
|
|
|
$
|
461
|
|
Year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 7, 2016
|
|
March 17, 2016
|
|
March 31, 2016
|
|
$
|
0.34
|
|
|
$
|
3,280
|
|
|
1,154
|
|
|
$
|
15
|
|
May 2, 2016
|
|
June 16, 2016
|
|
June 30, 2016
|
|
0.34
|
|
|
3,269
|
|
|
1,998
|
|
|
26
|
|
|||
August 5, 2016
|
|
September 16, 2016
|
|
September 30, 2016
|
|
0.34
|
|
|
3,258
|
|
|
2,888
|
|
|
38
|
|
|||
October 31, 2016
|
|
December 16, 2016
|
|
December 30, 2016
|
|
0.34
|
|
|
3,255
|
|
|
3,087
|
|
|
43
|
|
|||
|
|
|
|
|
|
$
|
1.36
|
|
|
$
|
13,062
|
|
|
9,127
|
|
|
$
|
122
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 9, 2017
|
|
March 17, 2017
|
|
March 31, 2017
|
|
$
|
0.34
|
|
|
$
|
3,257
|
|
|
2,919
|
|
|
$
|
41
|
|
May 2, 2017
|
|
June 16, 2017
|
|
June 30, 2017
|
|
0.34
|
|
|
4,483
|
|
|
3,439
|
|
|
49
|
|
|||
August 1, 2017
|
|
September 15, 2017
|
|
September 29, 2017
|
|
0.34
|
|
|
4,491
|
|
|
3,196
|
|
|
42
|
|
|||
October 31, 2017
|
|
December 15, 2017
|
|
December 29, 2917
|
|
0.34
|
|
|
4,469
|
|
|
5,366
|
|
|
64
|
|
|||
|
|
|
|
|
|
$
|
1.36
|
|
|
$
|
16,700
|
|
|
14,920
|
|
|
$
|
196
|
|
|
|
Quarter Ended
|
||||||||||||||
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
||||||||
Total investment income
|
$
|
8,292
|
|
|
$
|
9,122
|
|
|
$
|
7,978
|
|
|
$
|
8,034
|
|
Net investment income
|
3,819
|
|
|
4,402
|
|
|
4,316
|
|
|
3,340
|
|
||||
Net gain (loss) on investments
|
331
|
|
|
(3,227
|
)
|
|
(6,597
|
)
|
|
1,526
|
|
||||
Net increase (decrease) in net assets resulting from operations
|
4,150
|
|
|
1,175
|
|
|
(2,281
|
)
|
|
4,866
|
|
||||
Net increase (decrease) in net assets resulting from operations per share (1)
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.50
|
|
Net asset value per share (2)
|
$
|
14.12
|
|
|
$
|
14.15
|
|
|
$
|
14.40
|
|
|
$
|
14.98
|
|
|
Quarter Ended
|
||||||||||||||
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
||||||||
Total investment income
|
$
|
8,209
|
|
|
$
|
7,359
|
|
|
$
|
7,683
|
|
|
$
|
7,843
|
|
Net investment income
|
3,736
|
|
|
3,297
|
|
|
3,457
|
|
|
3,655
|
|
||||
Net gain (loss) on investments
|
1,087
|
|
|
(909
|
)
|
|
881
|
|
|
(1,376
|
)
|
||||
Net increase in net assets resulting from operations
|
4,823
|
|
|
2,388
|
|
|
4,338
|
|
|
2,279
|
|
||||
Net increase in net assets resulting from operations per share (1)
|
$
|
0.49
|
|
|
$
|
0.25
|
|
|
$
|
0.45
|
|
|
$
|
0.24
|
|
Net asset value per share (2)
|
$
|
14.82
|
|
|
$
|
14.67
|
|
|
$
|
14.76
|
|
|
$
|
14.65
|
|
(1)
|
Based on weighted average shares outstanding for the respective period.
|
(2)
|
Based on shares outstanding at the end of the respective period.
|
|
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to
Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||
Control Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Malabar International
|
|
Subordinated Loan
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
536
|
|
|
$
|
7,683
|
|
|
$
|
150
|
|
|
$
|
(7,833
|
)
|
|
$
|
—
|
|
|
|
Preferred Equity
|
|
—
|
|
|
—
|
|
|
65
|
|
|
5,868
|
|
|
1,608
|
|
|
(7,476
|
)
|
|
—
|
|
|||||||
|
|
|
|
—
|
|
|
—
|
|
|
601
|
|
|
13,551
|
|
|
1,758
|
|
|
(15,309
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
MTE Holding Corp.
|
|
Senior Secured Loan
|
|
$
|
—
|
|
|
$
|
(64
|
)
|
|
$
|
1,288
|
|
|
$
|
9,766
|
|
|
$
|
90
|
|
|
$
|
(2,738
|
)
|
|
$
|
7,118
|
|
|
|
Common Equity
|
|
—
|
|
|
67
|
|
|
227
|
|
|
3,383
|
|
|
67
|
|
|
—
|
|
|
3,450
|
|
|||||||
|
|
|
|
—
|
|
|
3
|
|
|
1,515
|
|
|
13,149
|
|
|
157
|
|
|
(2,738
|
)
|
|
10,568
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Control Investments
|
|
|
|
—
|
|
|
3
|
|
|
2,116
|
|
|
26,700
|
|
|
1,915
|
|
|
(18,047
|
)
|
|
10,568
|
|
|||||||
Affiliate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
All Metals Holding, LLC
|
|
Senior Secured Loan
|
|
—
|
|
|
(259
|
)
|
|
1,856
|
|
|
12,865
|
|
|
283
|
|
|
(389
|
)
|
|
12,759
|
|
|||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
508
|
|
|
—
|
|
|
1,277
|
|
|
508
|
|
|
—
|
|
|
1,785
|
|
|||||||
|
|
|
|
—
|
|
|
249
|
|
|
1,856
|
|
|
14,142
|
|
|
791
|
|
|
(389
|
)
|
|
14,544
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Contract Datascan Holdings, Inc.
|
|
Subordinated Loan
|
|
—
|
|
|
93
|
|
|
978
|
|
|
7,902
|
|
|
98
|
|
|
—
|
|
|
8,000
|
|
|||||||
|
|
Preferred Equity
(6)(7)
|
|
—
|
|
|
—
|
|
|
542
|
|
|
5,421
|
|
|
543
|
|
|
—
|
|
|
5,964
|
|
|||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
73
|
|
|
—
|
|
|
187
|
|
|
—
|
|
|
73
|
|
|
260
|
|
|||||||
|
|
|
|
—
|
|
|
166
|
|
|
1,520
|
|
|
13,510
|
|
|
641
|
|
|
73
|
|
|
14,224
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Intelli-Mark Technologies, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
(159
|
)
|
|
613
|
|
|
8,841
|
|
|
68
|
|
|
(8,909
|
)
|
|
—
|
|
|||||||
|
|
Common Equity
(6)
|
|
874
|
|
|
(498
|
)
|
|
—
|
|
|
1,998
|
|
|
|
|
(1,998
|
)
|
|
—
|
|
||||||||
|
|
|
|
874
|
|
|
(657
|
)
|
|
613
|
|
|
10,839
|
|
|
68
|
|
|
(10,907
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to
Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||
Jobson Healthcare Information, LLC
(8)
|
|
Senior Secured Loan
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,910
|
|
|
|
|
12,910
|
|
||||||||
|
|
Common Equity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
Warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||||
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,910
|
|
|
—
|
|
|
12,910
|
|
|
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to
Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||
Malabar International
(9)
|
|
Subordinated Loan
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
7,833
|
|
|
$
|
(7,833
|
)
|
|
$
|
—
|
|
|
|
Preferred Equity
|
|
5,590
|
|
|
(1,585
|
)
|
|
56
|
|
|
—
|
|
|
7,476
|
|
|
(7,476
|
)
|
|
—
|
|
|||||||
|
|
|
|
5,590
|
|
|
(1,626
|
)
|
|
727
|
|
|
—
|
|
|
15,309
|
|
|
(15,309
|
)
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Master Cutlery, LLC
|
|
Subordinated Loan
|
|
—
|
|
|
(1,537
|
)
|
|
640
|
|
|
4,440
|
|
|
653
|
|
|
(2,220
|
)
|
|
2,873
|
|
|||||||
|
|
Preferred Equity
(6)(7)
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
|
954
|
|
|
|
|
(954
|
)
|
|
—
|
|
||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||||
|
|
|
|
—
|
|
|
(2,491
|
)
|
|
640
|
|
|
5,394
|
|
|
653
|
|
|
(3,174
|
)
|
|
2,873
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
NeoSystems Corp.
|
|
Subordinated Loan
|
|
—
|
|
|
421
|
|
|
408
|
|
|
3,656
|
|
|
487
|
|
|
(2,000
|
)
|
|
2,143
|
|
|||||||
|
|
Preferred Equity
(6)(7)
|
|
—
|
|
|
861
|
|
|
133
|
|
|
1,255
|
|
|
993
|
|
|
|
|
2,248
|
|
||||||||
|
|
|
|
—
|
|
|
1,282
|
|
|
541
|
|
|
4,911
|
|
|
1,480
|
|
|
(2,000
|
)
|
|
4,391
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pfanstiehl Holdings, Inc
|
|
Subordinated Loan
|
|
—
|
|
|
(46
|
)
|
|
387
|
|
|
3,810
|
|
|
1
|
|
|
(56
|
)
|
|
3,755
|
|
|||||||
|
|
Common Equity
|
|
—
|
|
|
(1,328
|
)
|
|
84
|
|
|
6,083
|
|
|
|
|
(1,328
|
)
|
|
4,755
|
|
||||||||
|
|
|
|
—
|
|
|
(1,374
|
)
|
|
471
|
|
|
9,893
|
|
|
1
|
|
|
(1,384
|
)
|
|
8,510
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Strategic Pharma Solutions, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
(39
|
)
|
|
904
|
|
|
8,383
|
|
|
67
|
|
|
(8,450
|
)
|
|
—
|
|
|||||||
|
|
Preferred Equity
(6)(7)
|
|
3,617
|
|
|
(1,111
|
)
|
|
81
|
|
|
3,026
|
|
|
81
|
|
|
(3,107
|
)
|
|
—
|
|
|||||||
|
|
|
|
3,617
|
|
|
(1,150
|
)
|
|
985
|
|
|
11,409
|
|
|
148
|
|
|
(11,557
|
)
|
|
—
|
|
|||||||
TRS Services, Inc.
|
|
Senior Secured Loan
|
|
—
|
|
|
194
|
|
|
1,084
|
|
|
9,549
|
|
|
310
|
|
|
(393
|
)
|
|
9,466
|
|
|||||||
|
|
Preferred Equity (Class AA units)
(6)(7)
|
|
—
|
|
|
—
|
|
|
55
|
|
|
354
|
|
|
55
|
|
|
|
|
409
|
|
|
Name of Portfolio Company
|
|
Investment Type
(1)
|
|
Net Realized Gain (Loss)
|
|
Net change in unrealized appreciation/depreciation
|
|
Interest, Fees and
Dividends Credited to
Income
(2)
|
|
December 31, 2016, Fair Value
|
|
Gross
Additions
(3)
|
|
Gross
Reductions
(4)
|
|
December 31, 2017, Fair Value
(5)
|
||||||||||||||
|
|
Preferred Equity (Class A units)
(6)(7)
|
|
—
|
|
|
319
|
|
|
204
|
|
|
1,707
|
|
|
523
|
|
|
|
|
2,230
|
|
||||||||
|
|
Common Equity
(6)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|||||||||
|
|
|
|
—
|
|
|
513
|
|
|
1,343
|
|
|
11,610
|
|
|
888
|
|
|
(393
|
)
|
|
12,105
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Affiliate Investments
|
|
|
|
10,081
|
|
|
(5,088
|
)
|
|
8,696
|
|
|
81,708
|
|
|
32,889
|
|
|
(45,040
|
)
|
|
69,557
|
|
|||||||
Total Control and Affiliate Investments
|
|
|
|
$
|
10,081
|
|
|
$
|
(5,085
|
)
|
|
$
|
10,812
|
|
|
$
|
108,408
|
|
|
$
|
34,804
|
|
|
$
|
(63,087
|
)
|
|
$
|
80,125
|
|
(1)
|
Principal balance of debt investments and ownership detail for equity investments are shown in the consolidated schedule of investments.
|
(2)
|
Represents the total amount of interest, fees or dividends included in 2017 income for the portion of the year ended December 31, 2017, that an investment was included in Control or Affiliate Investment categories, respectively.
|
(3)
|
Gross additions include increases in cost basis resulting from a new portfolio investment, PIK interest, fees and dividends, accretion of OID, and net increases in unrealized net appreciation or decreases in net unrealized depreciation.
|
(4)
|
Gross reductions include decreases in the cost basis of investments resulting from principal repayments and sales, if any, and net decreases in net unrealized appreciation or net increases in net unrealized depreciation, and transfers from Affiliate Investment to Control Investment.
|
(5)
|
Fair value was determined using significant unobservable inputs. See
Note 6
for further details.
|
(6)
|
Non-income producing.
|
(7)
|
Dividends credited to income include dividends contractually earned but not declared.
|
(8)
|
Jobson became an affiliate investment effective December 31, 2017, due to an increase in voting ownership interest.
|
(9)
|
Malabar was reclassified from a control investment to an affiliate investment due to a decrease in voting interest.
|
|
OFS Capital Corporation and Subsidiaries
|
|
|
Unaudited Financial Statements
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Audited Financial Statements
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
(a)(1)
|
|
Certificate of Incorporation of OFS Capital Corporation
(2)
|
(a)(2)
|
|
Certificate of Correction to Certificate of Incorporation of OFS Capital Corporation
(4)
|
(b)
|
|
Bylaws of OFS Capital Corporation
(2)
|
(c)
|
|
Not applicable
|
(d)(1)
|
|
Form of Stock Certificate of OFS Capital Corporation
(2)
|
(d)(2)
|
|
Form of Base Indenture
(6)
|
(d)(3)
|
|
Statement of Eligibility of Trustee on Form T-1*
|
(d)(4)
|
|
Form of Warrant Agreement
(7)
|
(d)(5)
|
|
Form of Subscription Agent Agreement
(7)
|
(d)(6)
|
|
Form of Subscription Certificate
(7)
|
(d)(7)
|
|
Form of Certificate of Designation
(7)
|
(d)(8)
|
|
First Supplemental Indenture dated as of April 16, 2018, between OFS Capital Corporation and U.S. Bank National Association, as trustee
(12)
|
(d)(9)
|
|
Form of 6.375% Note due 2025 (incorporated by reference to Exhibit (d)(7) hereto and Exhibit A therein)
|
(e)
|
|
Form of Dividend Reinvestment Plan
(2)
|
(f)
|
|
Not applicable
|
(g)
|
|
Investment Advisory and Management Agreement between OFS Capital Corporation and OFS Capital Management, LLC
(13)
|
(h)(1)
|
|
Form of Equity Underwriting Agreement
(5)
|
(h)(2)
|
|
Form of Debt Underwriting Agreement
(7)
|
(i)
|
|
Not applicable
|
(j)
|
|
Form of Custody Agreement
(2)
|
(k)(1)
|
|
Administration Agreement between OFS Capital Corporation and OFS Capital Services, LLC
(2)
|
(k)(2)
|
|
License Agreement between the OFS Capital Corporation and Orchard First Source Asset Management, LLC
(2)
|
(k)(3)
|
|
Form of Indemnification Agreement between OFS Capital Corporation and each of its directors and executive officers
(2)
|
(k)(4)
|
|
Form of Registration Rights Agreement between OFS Capital Corporation and Orchard First Source Asset Management, LLC
(3)
|
(k)(5)
|
|
Loan Portfolio Purchase Agreement among OFS Capital WM, LLC and Madison Capital Funding LLC, dated May 28, 2015
(8)
|
(k)(6)
|
|
Business Loan Agreement between OFS Capital Corporation and Pacific Western Bank
dated March 7, 2018
(10)
|
(k)(7)
|
|
Promissory Note between OFS Capital Corporation and Pacific Western Bank dated November 5, 2015
(9)
|
(k)(8)
|
|
Commercial Guaranty Agreement among OFS Capital Corporation, OFS Capital WM, LLC, and Pacific Western Bank dated March 7, 2018
(10)
|
(k)(9)
|
|
Change in terms to the Business Loan Agreement between OFS Capital Corporation and Pacific Western Bank dated March 7, 2018
(10)
|
(k)(10)
|
|
Commercial Guaranty Agreement among OFS Capital Corporation, OFS Capital WM, LLC, and Pacific Western Bank dated March 7, 2018
(10)
|
(l)
|
|
Opinion and Consent of Eversheds Sutherland (US) LLP*
|
(m)
|
|
Not applicable
|
(n)(1)
|
|
Consent of BDO USA, LLP
(1)
|
(n)(2)
|
|
Report of BDO USA, LLP regarding Senior Securities table contained herein
(14)
|
(o)
|
|
Not applicable
|
(p)
|
|
Not applicable
|
(q)
|
|
Not applicable
|
(r)
|
|
Joint Code of Ethics of OFS Capital Corporation and OFS Advisor
(11)
|
(s)(1)
|
|
Form of Prospectus Supplement For Common Stock Offerings
(7)
|
(s)(2)
|
|
Form of Prospectus Supplement For Preferred Stock Offerings
(7)
|
(s)(3)
|
|
Form of Prospectus Supplement For Debt Offerings
(7)
|
(s)(4)
|
|
Form of Prospectus Supplement For Rights Offerings
(7)
|
(s)(5)
|
|
Form of Prospectus Supplement For Warrant Offerings
(7)
|
1.
|
Filed herewith.
|
2.
|
Filed previously in connection with Pre-Effective Amendment No. 3 to the Company’s registration statement on Form N-2 (File No. 333-166363) filed on March 18, 2011.
|
3.
|
Filed previously in connection with Pre-Effective Amendment No. 7 to the Company’s registration statement on Form N-2 (File No. 333-166363) filed on July 24, 2012.
|
4.
|
Filed previously in connection with the Company’s annual report on Form 10-K filed on March 26, 2013.
|
5.
|
Filed previously in connection with Pre-Effective Amendment No. 1 to the Company’s registration statement on Form N-2 (333-196704) filed on November 7, 2014.
|
6.
|
Filed previously in connection with the Company’s registration statement on Form N-2 (File No. 333-200376) filed on November 19, 2014.
|
7.
|
Filed previously in connection with Pre-Effective Amendment No. 1 to the Company’s registration statement on Form N-2 (File No. 333-200376) filed on December 15, 2014.
|
8.
|
Filed previously as part of the Current Report on Form 8-K of the Company, filed on June 2, 2015.
|
9.
|
Filed previously in connection with the Company’s quarterly report on Form 10-Q filed on November 6, 2015.
|
10.
|
Filed previously in connection the Company's annual report on Form 10-K filed on March 12, 2018.
|
11.
|
Filed previously in connection with the Company’s quarterly report on Form 10-Q filed on November 3, 2017.
|
12.
|
Filed previously in connection with Post-Effective Amendment No. 2 to the Company's registration statement on Form N-2 (File No. 333-217302) filed on April 16, 2018.
|
13.
|
Filed previously in connection with the Company's quarterly report on Form 10-Q filed on November 7, 2014.
|
14.
|
Filed previously in connection with Post-Effective Amendment No. 1 to the Company's registration statement on Form N-2 (File No. 333-217302) filed on April 11, 2018.
|
SEC registration fee
|
24,900
|
|
*
|
|
FINRA filing fee
|
30,500
|
|
*
|
|
Nasdaq Global Select Market listing fee
|
65,000
|
|
|
|
Printing and postage
|
40,000
|
|
|
|
Legal fees and expenses
|
125,000
|
|
|
|
Accounting fees and expenses
|
40,000
|
|
|
|
Total
|
$
|
325,400
|
|
|
*
|
This amount has been offset against filing fees associated with unsold securities registered under a previous registration statement.
|
Title of Class
|
Number of Record Holders
|
Common Stock, par value $0.01 per share
|
2
|
1.
|
OFS Capital Corporation, 10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606;
|
2.
|
the transfer agent, American Stock Transfer & Trust Company, LLC, 6201 15
th
Avenue, Brooklyn, NY 11219;
|
3.
|
the custodian, U.S. Bank National Association, One Federal Street, 3
rd
Floor, Boston, MA 02110; and
|
4.
|
OFS Capital Management, LLC, 10 S. Wacker Drive, Suite 2500, Chicago, IL, 60606.
|
(i.)
|
to include any prospectus required by Section 10(a)(3) of the Securities Act;
|
(ii.)
|
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and
|
(iii.)
|
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
|
(i.)
|
any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 497 under the Securities Act;
|
(ii)
|
the portion of any advertisement pursuant to Rule 482 under the Securities Act relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and
|
(iii)
|
any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
Signature
|
|
Title
|
|
Date
|
Bilal Rashid
/s/ Bilal Rashid
|
|
Director and Chief Executive Officer
(Principal Executive Officer)
|
|
May 18, 2018
|
|
|
|
|
|
Marc Abrams
/s/ *
|
|
Director
|
|
May 18, 2018
|
|
|
|
|
|
Robert J. Cresci
/s/ *
|
|
Director
|
|
May 18, 2018
|
|
|
|
|
|
Elaine E. Healy
/s/ *
|
|
Director
|
|
May 18, 2018
|
|
|
|
|
|
Jeffrey A. Cerny
/s/ Jeffrey A. Cerny
|
|
Director and Chief Financial Officer
(Principal Financial Officer)
|
|
May 18, 2018
|
|
|
|
|
|
Jeffery S. Owen
/s/ Jeffery S. Owen
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
May 18, 2018
|