Stockholders' Equity

12 Months Ended

Feb. 28, 2023

Stockholders' Equity Note [Abstract]

Stockholders’ Equity

Note 11. Stockholders’ Equity

On May 16, 2006, GSC Group, Inc. capitalized the LLC, by contributing $1,000 in exchange for 67 shares, constituting all of the issued and outstanding shares of the LLC.

On March 20, 2007, the Company issued 95,995.5 and 8,136.2 shares of common stock, priced at $150.00 per share, to GSC Group and certain individual employees of GSC Group, respectively, in exchange for the general partnership interest and a limited partnership interest in GSC Partners CDO III GP, LP, collectively valued at $15.6 million. At this time, the 6.7 shares owned by GSC Group in the LLC were exchanged for 6.7 shares of the Company.

On March 28, 2007, the Company completed its IPO of 725,000 shares of common stock, priced at $150.00 per share, before underwriting discounts and commissions. Total proceeds received from the IPO, net of $7.1 million in underwriter’s discount and commissions, and $1.0 million in offering costs, were $100.7 million.

On July 30, 2010, our Manager and its affiliates purchased 986,842 shares of common stock at $15.20 per share. Total proceeds received from this sale were $15.0 million.

On August 12, 2010, we effected a one-for-ten reverse stock split of our outstanding common stock. As a result of the reverse stock split, every ten shares of our common stock were converted into one share of our common stock. Any fractional shares received as a result of the reverse stock split were redeemed for cash. The total cash payment in lieu of shares was $230. Immediately after the reverse stock split, we had 2,680,842 shares of our common stock outstanding.

On September 24, 2014, the Company announced the approval of an open market share repurchase plan that allowed it to repurchase up to 200,000 shares of its common stock at prices below its NAV as reported in its then most recently published consolidated financial statements (the “Share Repurchase Plan”). On October 7, 2015, our board of directors extended the Share Repurchase Plan for another year and increased the number of shares the Company is permitted to repurchase at prices below its NAV, as reported in its then most recently published consolidated financial statements, to 400,000 shares of its common stock. On October 5, 2016, our board of directors extended the Share Repurchase Plan for another year to October 15, 2017 and increased the number of shares the Company is permitted to repurchase at prices below its NAV, as reported in its then most recently published consolidated financial statements, to 600,000 shares of its common stock. On October 10, 2017, January 8, 2019 and January 7, 2020, our board of directors extended the Share Repurchase Plan for another year to October 15, 2018, January 15, 2020 and January 15, 2021, respectively, each time leaving the number of shares unchanged at 600,000 shares of its common stock. On May 4, 2020, our board of directors increased the Share Repurchase Plan to 1.3 million shares of common stock. On January 5, 2021 and January 4, 2022, our board of directors extended the Shares Repurchase Plan for another year to January 15, 2022 and January 15, 2023, respectively, each time leaving the number of shares unchanged at 1.3 million shares of common stock. On January 9, 2023, our board of directors extended the Share Repurchase Plan for another year to January 15, 2024, increasing the number of shares to 1.7 million shares of common stock. As of February 28, 2023, the Company purchased 946,627 shares of common stock, at the average price of $21.83 for approximately $20.7 million pursuant to the Share Repurchase Plan. During the three months ended February 28, 2023 the Company purchased 48,594 shares of common stock, at the average price $25.19 for approximately $1.2 million pursuant to the Share Repurchase Plan. During the year ended February 28, 2023, the Company purchased 438,192 shares of common stock, at the average price $24.70 for approximately $10.8 million pursuant to the Share Repurchase Plan.

On March 16, 2017, we entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc., through which we may offer for sale, from time to time, up to $30.0 million of our common stock through an ATM offering. Subsequent to this, BB&T Capital Markets and B. Riley FBR, Inc. were also added to the agreement. On July 11, 2019, the amount of the common stock to be offered was increased to $70.0 million, and on October 8, 2019, the amount of the common stock to be offered was increased to $130.0 million. This agreement was terminated as of July 29, 2021. As of February 28, 2021, the Company sold 3,922,018 shares for gross proceeds of $97.1 million at an average price of $24.77 for aggregate net proceeds of $95.9 million (net of transaction costs). For the year ended February 28, 2021, there was no activity related to the ATM offerings.

On July 13, 2018, the Company issued 1,150,000 shares of its common stock priced at $25.00 per share (par value $0.001 per share) at an aggregate total of $28.75 million. The net proceeds, after deducting underwriting commissions of $1.15 million and offering costs of approximately $0.2 million, amounted to approximately $27.4 million. The Company also granted the underwriters a 30-day option to purchase up to an additional 172,500 shares of its common stock, which was not exercised. 

On July 30, 2021, we entered into an equity distribution agreement with Ladenburg Thalmann & Co. Inc. and Compass Point Research and Trading, LLC (collectively the “Agents”), through which we may offer for sale, from time to time, up to $150.0 million of our common stock through the Agents, or to them, as principal for their account. As of February 28, 2023, the Company sold 4,840,361 shares for gross proceeds of $123.9 million at an average price of $25.61 for aggregate net proceeds of $122.4 million (net of transaction costs). For the year ended February 28, 2023, there was no activity related to the ATM offerings.

The Company adopted Rule 3-04/Rule 8-03(a)(5) under Regulation S-X (Note 2).  Pursuant to Regulation S-X, the Company has presented a reconciliation of the changes in each significant caption of stockholders’ equity as shown in the tables below:

							Capital			Total Distributable
	Common Stock						in Excess			Earnings
	Shares			Amount			of Par Value			(Loss)			Net Assets
Balance at February 28, 2021		11,161,416		$	11,161		$	304,874,957		$	(700,348	)	$	304,185,770
Increase (Decrease) from Operations:
Net investment income		-			-			-			2,555,935			2,555,935
Net realized gain (loss) from investments		-			-			-			1,910,141			1,910,141
Net change in unrealized appreciation (depreciation) on investments		-			-			-			16,812,577			16,812,577
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(230,144	)		(230,144	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(4,799,405	)		(4,799,405	)
Capital Share Transactions:
Proceeds from issuance of common stock		-			-			-			-			-
Stock dividend distribution		38,580			39			914,063			-			914,102
Repurchases of common stock		(40,000	)		(40	)		(1,003,380	)		-			(1,003,420	)
Repurchase fees		-			-			(800	)		-			(800	)
Offering costs		-			-			-			-			-
Balance at May 31, 2021		11,159,995		$	11,160		$	304,784,840		$	15,548,756		$	320,344,756
Increase (Decrease) from Operations:
Net investment income		-			-			-			6,393,261			6,393,261
Net realized gain (loss) from investments		-			-			-			1,501,597			1,501,597
Income tax (provision) benefit from realized gain on investments		-			-			-			(448,883	)		(448,883	)
Realized losses on extinguishment of debt											(1,552,140	)		(1,552,140	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			3,376,540			3,376,540
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(1,328,711	)		(1,328,711	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(4,910,394	)		(4,910,394	)
Capital Share Transactions:
Proceeds from issuance of common stock		5,441			6			157,034			-			157,040
Stock dividend distribution		33,099			33			828,479			-			828,512
Repurchases of common stock		(9,623	)		(10	)		(248,713	)		-			(248,723	)
Repurchase fees		-			-			(192	)		-			(192	)
Offering costs		-			-			(817	)		-			(817	)
Balance at August 31, 2021		11,188,912		$	11,189		$	305,520,631		$	18,580,025		$	324,111,845

							Capital in			Total Distributable
	Common Stock						Excess of			Earnings
	Shares			Amount			Par Value			(Loss)			Net Assets
Increase (Decrease) from Operations:
Net investment income		-			-			-			5,196,635			5,196,635
Net realized gain (loss) from investments		-			-			-			9,916,925			9,916,925
Income tax (provision) benefit from realized gain on investments		-			-			-			(2,447,173	)		(2,447,173	)
Realized losses on extinguishment of debt											(764,123	)		(764,123	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(6,042,616	)		(6,042,616	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			2,480,465			2,480,465
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(5,889,329	)		(5,889,329	)
Capital Share Transactions:
Proceeds from issuance of common stock		520,076			520			15,163,259			-			15,163,779
Stock dividend distribution		38,016			38			1,017,625			-			1,017,663
Repurchases of common stock		-			-			-			-			-
Repurchase fees		-			-			-			-			-
Offering costs		-			-			(142,326	)		-			(142,326	)
Balance at November 30, 2021		11,747,004		$	11,747		$	321,559,189		$	21,030,809		$	342,601,745
Increase (Decrease) from Operations:
Net investment income		-			-			-			5,796,910			5,796,910
Net realized gain (loss) from investments		-			-			-			69,664			69,664
Income tax (provision) benefit from realized gain on investments		-			-			-			9,612			9,612
Realized losses on extinguishment of debt											(118,147	)		(118,147	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			2,873,561			2,873,561
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(226,702	)		(226,702	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(6,434,106	)		(6,434,106	)
Capital Share Transactions:
Proceeds from issuance of common stock		392,826			392			11,513,992			-			11,514,383
Stock dividend distribution		41,520			42			1,114,886			-			1,114,929
Repurchases of common stock		(50,000	)		(50	)		(1,292,843	)		-			(1,292,893	)
Repurchase fees								(1,000	)		-			(1,000	)
Offering costs		-			-			(127,433	)		-			(127,433	)
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles		-			-			(4,704,545	)		4,704,545			-
Balance at February 28, 2022		12,131,350		$	12,131		$	328,062,246		$	27,706,146		$	355,780,523
Increase (Decrease) from Operations:
Net investment income		-			-			-			7,976,222			7,976,222
Net realized gain (loss) from investments		-			-			-			162,509			162,509
Income tax (provision) benefit from realized gain on investments		-			-			-			69,250			69,250
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(9,333,449	)		(9,333,449	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(361,951	)		(361,951	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(6,428,817	)		(6,428,817	)
Capital Share Transactions:
Stock dividend distribution		42,825			43			1,108,637			-			1,108,680
Repurchases of common stock		(142,177	)		(142	)		(3,734,174	)		-			(3,734,316	)
Repurchase fees		-			-			(2,840	)		-			(2,840	)
Balance at May 31, 2022		12,031,998		$	12,032		$	325,433,869		$	19,789,910		$	345,235,811

							Capital in			Total Distributable
	Common Stock						Excess of			Earnings
	Shares			Amount			Par Value			(Loss)			Net Assets
Increase (Decrease) from Operations:
Net investment income		-			-			-			7,698,014			7,698,014
Net realized gain (loss) from investments		-			-			-			7,943,838			7,943,838
Realized losses on extinguishment of debt		-			-			-			(1,204,809	)		(1,204,809	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(13,258,456	)		(13,258,456	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(230,154	)		(230,154	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(6,369,981	)		(6,369,981	)
Capital Share Transactions:
Stock dividend distribution		48,590			49			1,088,139			-			1,088,188
Repurchases of common stock		(153,350	)		(154	)		(3,685,951	)		-			(3,686,105	)
Repurchase fees		-			-			(3,071	)		-			(3,071	)
Balance at August 31, 2022		11,927,238		$	11,927		$	322,832,986		$	14,368,362		$	337,213,275
Increase (Decrease) from Operations:
Net investment income		-			-			-			9,877,437			9,877,437
Net realized gain (loss) from investments		-			-			-			(740,434	)		(740,434	)
Income tax (provision) benefit from realized gain on investments		-			-			-			479,318			479,318
Net change in unrealized appreciation (depreciation) on investments		-			-			-			(3,176,208	)		(3,176,208	)
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(425,848	)		(425,848	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(6,433,298	)		(6,433,298	)
Capital Share Transactions:
Stock dividend distribution		52,312			53			1,150,881			-			1,150,934
Repurchases of common stock		(94,071	)		(95	)		(2,179,600	)		-			(2,179,695	)
Repurchase fees		-			-			(1,881	)		-			(1,881	)
Balance at November 30, 2022		11,885,479		$	11,885		$	321,802,386		$	13,949,329		$	335,763,600
Increase (Decrease) from Operations:
Net investment income		-			-			-			9,649,474			9,649,474
Net realized gain (loss) from investments		-			-			-			80,683			80,683
Realized losses on extinguishment of debt		-			-			-			(382,274	)		(382,274	)
Net change in unrealized appreciation (depreciation) on investments		-			-			-			10,549,981			10,549,981
Net change in provision for deferred taxes on unrealized (appreciation) depreciation on investments		-			-			-			(697,380	)		(697,380	)
Decrease from Shareholder Distributions:
Distributions of investment income – net		-			-			-			(8,081,306	)		(8,081,306	)
Capital Share Transactions:
Stock dividend distribution		53,615			55			1,300,405			-			1,300,460
Repurchases of common stock		(48,594	)		(49	)		(1,224,175	)		-			(1,224,224	)
Repurchase fees		-			-			(972	)		-			(972	)
Tax reclassification of stockholders’ equity in accordance with generally accepted accounting principles		-			-			16,162			(16,162	)		-
Balance at February 28, 2023		11,890,500		$	11,891		$	321,893,806		$	25,052,345		$	346,958,042