8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 08, 2020

Medley Capital Corporation

(Exact Name of Registrant as Specified in its Charter)

	Delaware
1-35040	(State or other jurisdiction of incorporation)	27-4576073
(Commission File Number)		(I.R.S. Employer Identification No.)

280 Park Avenue, 6^th Floor East
New York, NY 10017

(Address of Principal Executive Offices and Zip Code)

Registrant’s telephone number, including area code: (212) 759-0777

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MCC	The New York Stock Exchange
6.500% Notes due 2021	MCX	The New York Stock Exchange
6.125% Notes due 2023	MCV	The New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

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

Item 1.01 Entry into a Material Definitive Agreement.

On October 8, 2020, Medley Capital Corporation (“MCC”), Great American Life Insurance Company (“GALIC”), MCC Senior Loan Strategy JV I LLC (the “MCC JV”), and an affiliate of Golub Capital LLC (“Golub”) entered into a Membership Interest Purchase Agreement (the “Agreement”) pursuant to which a fund affiliated with and managed by Golub concurrently purchased all of MCC’s interest in the MCC JV and all of GALIC’s interest in the MCC JV for a pre-adjusted gross purchase price of $156.4 million and an adjusted gross purchase price (which constitutes the aggregate consideration for the membership interests) of $145.3 million (giving effect to adjustments primarily for principal and interest payments from portfolio companies of MCC JV from July 1, 2020 through October 7, 2020), resulting in net proceeds (before transaction expenses) of $41.0 million and $6.6 million for MCC and GALIC, respectively, on the terms and subject to the conditions set forth in the Agreement, including the representations, warranties, covenants and indemnities contained therein. MCC estimates that transaction expenses will be approximately $1.6 million resulting in net proceeds (including estimated transaction expenses) of $39.5 million. In connection with the closing of the transaction on October 8, 2020, MCC JV repaid in full all outstanding borrowings under, and terminated, its senior secured revolving credit facility, dated as of August 4, 2015, as amended, administered by Deutsche Bank AG, New York Branch.

The foregoing description of the Agreement is not complete and is qualified in its entirety by reference to a copy of the Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 2.01 Completion of Acquisition or Disposition of Assets

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

Item 7.01 Regulation FD Disclosure

On October 9, 2020, MCC issued a press release announcing the entry into the Agreement. The press release is furnished herewith as Exhibit 99.1.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section. The information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Forward-Looking Statements

This Current Report contains “forward-looking statements” within the meaning of Section 21E of the Exchange Act. Such statements include, but are not limited to, statements regarding the ongoing obligations under the Agreement, including the indemnities contained in the Agreement, and the possibility that MCC may explore strategic alternatives and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions. In addition, the estimated transaction expenses and the unaudited pro forma condensed consolidated financial information giving effect to the disposition of the MCC JV and the related notes thereto, which are attached to this Current Report, include certain assumptions as described therein, including, but not limited to, assumptions with respect to estimates of transaction expenses incurred by the Company and the resulting net proceeds received by the Company. Such forward-looking statements represent management's current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of the MCC’s common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to, potential losses of MCC in connection with its indemnification obligations under the Agreement; MCC’s ability to comply with the covenants and conditions under its debt instruments; the effects of changes in MCC’s credit rating; MCC’s ability to arrange and consummate financing or sale transactions or to access capital; whether MCC is able to generate sufficient cash flows and maintain adequate liquidity to meet its liquidity needs, service its indebtedness, repay existing debt obligations, and finance the ongoing obligations of its business; uncertainties associated with the impact from the COVID-19 pandemic, including its impact on the global and U.S. capital markets, the global and U.S. economy, the operational and financial performance of MCC’s portfolio companies, and liquidity, and the important factors discussed under the caption “Risk Factors” in Part 1. Item 1A of MCC’s Form 10-K for the fiscal year ended September 30, 2019, and its other reports filed with the Securities and Exchange Commission. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management’s estimates as of the date of this Current Report. While MCC may elect to update such forward-looking statements at some point in the future, MCC disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing MCC’s views as of any date subsequent to the date of this Current Report.

Item 9.01     Financial Statements and Exhibits.

(a) Not Applicable.

(b) Pro Forma Financial Information.

Unaudited pro forma condensed consolidated financial information of MCC giving effect to the disposition of MCC JV, and the related notes thereto, required by Article 11 of Regulation S-X is attached hereto as Exhibit 99.2.

(c) Not Applicable.

(d) Exhibits.

Exhibit No.	Description
10.1	Membership Interest Purchase Agreement, dated as of October 8, 2020, by and among Medley Capital Corporation, Great American Life Insurance Company, MCC Senior Loan Strategy JV I LLC and GEMS Fund 5, L.P.
99.1	Press Release dated as of October 9, 2020.
99.2	Unaudited Pro Forma Condensed Consolidated Financial Information.

SIGNATURES

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

Date: October 13, 2020		MEDLEY CAPITAL CORPORATION
	By:	/s/ Richard T. Allorto, Jr.
	Name:	Richard T. Allorto, Jr.
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

Medley Capital Corporation Sells the MCC Senior Loan Strategy JV Portfolio to Fund Managed by Golub Capital LLC

New York, NY (October 9, 2020) - The Special Committee of the Board of Directors of Medley Capital Corporation (NYSE: MCC) (“MCC”) is pleased to announce that on October 8, 2020, MCC, MCC Senior Loan Strategy JV I LLC (the “MCC JV”), the other holder of membership interests in the MCC JV (the “Other MCC JV Member”), and an affiliate of Golub Capital LLC (“Golub”) entered into a Membership Interest Purchase Agreement (“the Agreement”) pursuant to which a private fund affiliated with and managed by Golub concurrently purchased all of MCC’s interest in the MCC JV and all of the Other MCC JV Member’s interest in the MCC JV for a total purchase price of $156.4 million (subject to various adjustments), on terms and conditions set forth in the Agreement. In connection with the closing of the transaction, MCC JV repaid in full all outstanding borrowings under, and terminated, its senior secured revolving credit facility, dated as of August 4, 2015, as amended, administered by Deutsche Bank AG, New York Branch. Taking into account the debt repayment and the adjustments, MCC and the Other MCC JV Member received net proceeds (before transaction expenses) of $41.0 million and $6.6 million, respectively.

"We believe this is a significant transaction for MCC as it improves MCC’s liquidity and materially strengthens its balance sheet," said David Lorber, Chair of the MCC Special Committee. He added, "The transaction better positions MCC to meet its other debt repayment obligations."

The Special Committee was advised by Houlihan Lokey for this Transaction.

ABOUT MEDLEY CAPITAL CORPORATION

Medley Capital Corporation is a closed-end, externally managed business development company ("BDC") that has common stock which trades on the New York Stock Exchange (NYSE: MCC) and has outstanding bonds which trade on the New York Stock Exchange under the symbols (NYSE: MCV) and (NYSE: MCX) . Medley Capital Corporation's investment objective is to generate current income and capital appreciation by lending to privately-held middle market companies, primarily through directly originated transactions, to help these companies expand their businesses, refinance and make acquisitions. Our portfolio generally consists of senior secured first lien loans and senior secured second lien loans. Medley Capital Corporation is externally managed by MCC Advisors LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended. For additional information, please visit Medley Capital Corporation at www.medleycapitalcorp.com.

ABOUT MCC ADVISORS LLC

MCC Advisors LLC is a subsidiary of Medley Management Inc. (NYSE: MDLY, “Medley”). Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. Medley’s national direct origination franchise is a premier provider of capital to the middle market in the U.S. Medley has $3.6 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) (TASE: MCC) and Sierra Income Corporation, and several private investment vehicles. Over the past 18 years, we have provided capital to over 400 companies across 35 industries in North America.[1] For additional information, please visit Medley Management Inc. at www.mdly.com.

Medley LLC, the operating company of Medley Management Inc., has outstanding bonds which trade on the New York Stock Exchange under the symbols (NYSE:MDLX) and (NYSE:MDLQ).

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, statements regarding the ongoing obligations under the Agreement, including the indemnities contained in the Agreement, and the possibility that MCC may explore strategic alternatives and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions. Such forward-looking statements represent management's current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of the MCC’s common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to, potential losses of MCC in connection with its indemnification obligations under the Agreement; MCC’s ability to comply with the covenants and conditions under its debt instruments; the effects of changes in MCC’s credit rating; MCC’s ability to arrange and consummate financing or sale transactions or to access capital; whether MCC is able to generate sufficient cash flows and maintain adequate liquidity to meet its liquidity needs, service its indebtedness, repay existing debt obligations, and finance the ongoing obligations of its business; uncertainties associated with the impact from the COVID-19 pandemic, including its impact on the global and U.S. capital markets, the global and U.S. economy, the operational and financial performance of MCC’s portfolio companies, and liquidity; and the important factors discussed under the caption “Risk Factors” in Part 1. Item 1A of MCC’s Form 10-K for the fiscal year ended September 30, 2019, and its other reports filed with the Securities and Exchange Commission. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management’s estimates as of the date of this press release. While MCC may elect to update such forward-looking statements at some point in the future, MCC disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing MCC’s views as of any date subsequent to the date of this press release.

SOURCE: Medley Capital Corporation

Investor Relations Contact:

Sam Anderson

Head of Capital Markets & Risk Management

Medley Management Inc.

212-759-0777

Media Contact:

Jonathan Gasthalter/Nathaniel Garnick

Gasthalter & Co. LP

212-257-4170

[1] Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, “Medley”). Assets under management refers to assets of Medley’s funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of June 30, 2020.

EX-99.2

Exhibit 99.2

Medley Capital Corporation

Unaudited Pro Forma Condensed Consolidated Financial Statements

On October 8, 2020, Medley Capital Corporation (the “Company”), Great American Life Insurance Company (“GALIC”), MCC Senior Loan Strategy JV I LLC (the “MCC JV”), and an affiliate of Golub Capital LLC (“Golub”) entered into a Membership Interest Purchase Agreement (the “Agreement”) pursuant to which a fund affiliated with and managed by Golub concurrently purchased all of the Company’s interest in the MCC JV and all of GALIC’s interest in the MCC JV for a total purchase price of approximately $156.4 million (subject to various adjustments), resulting in net proceeds (less such adjustments, the credit facility repayments and estimated transaction expenses) of approximately $39.5 million for the Company, on the terms and subject to the conditions set forth in the Agreement, including the representations, warranties, covenants and indemnities contained therein (the “MCC JV Sale”). In connection with the closing of the transaction on October 8, 2020, MCC JV repaid in full all outstanding borrowings under, and terminated, its senior secured revolving credit facility, dated as of August 4, 2015, as amended, administered by Deutsche Bank AG, New York Branch (the “DB Credit Facility Repayment”).

The following unaudited pro forma financial statements of the Company are presented in accordance with Article 11 of Regulation S-X under the Securities Exchange Act of 1934, as amended. The unaudited pro forma condensed consolidated financial statements reflect adjustments to give effect to the MCC JV Sale and indirectly the DB Credit Facility Repayment. In that regard, because the MCC JV constituted an off-balance sheet arrangement with respect to the Company’s financial statements the DB Credit Facility Repayment did not directly impact the Company’s liabilities on a pro forma basis. However, the DB Credit Facility Repayment did impact the net proceeds received by the Company following the MCC JV Sale. The pro forma adjustments related to the MCC JV Sale are collectively referred to as the “Transaction Adjustments”.

The Company's historical balance sheet as of June 30, 2020 has been adjusted to give effect to the Transaction Adjustments as if the related events took place on June 30, 2020. The Company’s historical statements of operations for the nine months ended June 30, 2020 and for the fiscal year ended September 30, 2019 have been adjusted to give effect to the Transaction Adjustments as if the transactions were consummated on October 1, 2018.

The unaudited pro forma condensed consolidated financial information are presented for illustrative purposes only and do not necessarily indicate the consolidated results of operations or the financial position that would have resulted had the Transaction Adjustments been completed at the beginning of the applicable period presented, and should not be taken as representative of the Company’s future consolidated results of operations or financial position. The pro forma adjustments are based on available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the historical consolidated financial statements and related notes contained in the Company’s quarterly report Form 10-Q for the fiscal quarter ended June 30, 2020 and annual report on Form 10-K for the fiscal year ended September 30, 2019, both as filed with the Securities and Exchange Commission.

Medley Capital Corporation

Unaudited Pro Forma Consolidated Statements of Assets and Liabilities

As of June 30, 2020

(in thousands, except share and per share data)

	Historical		Transaction Adjustments			Pro Forma
ASSETS
Investments at fair value
Non-controlled/non-affiliated investments	$	116,697				$	116,697
Affiliated investments	80,257					80,257
Controlled investments	53,665		(47,135)		(1)	6,530
Total investments at fair value	250,619		(47,135)			203,484
Cash and cash equivalents	52,203		39,451		(1)	91,654
Other assets	2,042					2,042
Interest receivable	663					663
Receivable for dispositions and investments sold	1,302					1,302
Fees receivable	119					119
Total assets	$	306,948	$	(7,684)		$	299,264
LIABILITIES
Notes payable (net of debt issuance costs of $1,134)	$	150,732				$	150,732
Accounts payable and accrued expenses	4,376					4,376
Interest and fees payable	802					802
Management and incentive fees payable	1,317		(17)		(2)	1,317
			17		(3)
Administrator expenses payable	265					265
Deferred revenue	29					29
Due to affiliate	31					31
Deferred tax liability	50					50
Total liabilities	$	157,602	$	—		$	157,602
NET ASSETS
Common stock, par value $0.001 per share, 100,000,000 common shares authorized, 2,723,711 issued and outstanding	$	3				$	3
Capital in excess of par value	673,584					673,584
Total distributable earnings/(loss)	(524,241)		(7,684)		(1)	(531,925)
Total net assets	149,346		(7,684)			141,662
Total liabilities and net assets	$	306,948	$	(7,684)		$	299,264
NET ASSET VALUE PER SHARE	$	54.83				$	52.01

Medley Capital Corporation

Unaudited Pro Forma Consolidated Statements of Operations

For the Nine Months Ended June 30, 2020

(in thousands, except share and per share data)

	Historical		Transaction Adjustments			Pro Forma
INVESTMENT INCOME
Interest from investments
Non-controlled/non-affiliated investments:
Cash	$	7,499				$	7,499
Payment-in-kind	465					465
Affiliated investments:
Cash	691					691
Payment-in-kind	2,141					2,141
Controlled investments:
Cash	85					85
Payment-in-kind	501					501
Total interest income	11,382		—			11,382
Dividend income	4,725		(4,725)		(4)	—
Interest from cash and cash equivalents	377					377
Fee income	618					618
Total investment income	17,102		(4,725)			12,377
EXPENSES
Base management fees	4,967		(330)		(5)	4,637
Interest and financing expenses	12,312					12,312
General and administrative	3,140					3,140
Administrator expenses	1,743					1,743
Insurance	988					988
Directors fees	960					960
Professional fees, net	(4,797)					(4,797)
Expenses before expense support reimbursement	19,313		(330)			18,983
Expense support reimbursement	(349)		22		(6)	(327)
Total expenses net of expense support reimbursement	18,964		(308)			18,656
NET INVESTMENT INCOME	(1,862)		(4,417)			(6,279)
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) from investments
Non-controlled/non-affiliated investments	(690)					(690)
Affiliated investments	—					—
Controlled investments	(39,076)					(39,076)
Net realized gain/(loss) from investments	(39,766)		—			(39,766)
Net unrealized appreciation/(depreciation) on investments
Non-controlled/non-affiliated investments	(8,423)					(8,423)
Affiliated investments	2,558					2,558
Controlled investments	(17,062)		24,126		(7)	7,064
Net unrealized appreciation/(depreciation) on investments	(22,927)		24,126			1,199
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments	(50)					(50)
Net loss on extinguishment of debt	(2,481)					(2,481)
Net realized and unrealized gain/(loss) on investments	(65,224)		24,126			(41,098)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(67,086)	$	19,709		$	(47,377)
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	(24.63)	$	7.24		$	(17.39)

WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE	$	(0.68)	$	(1.62)	$	(2.31)
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED	2,723,711		2,723,711		2,723,711
DIVIDENDS DECLARED PER COMMON SHARE	$	—	$	—	$	—

Medley Capital Corporation

Unaudited Pro Forma Consolidated Statements of Operations

For the Year Ended September 30, 2019

(in thousands, except share and per share data)

	Historical		Transaction Adjustments		Pro Forma
INVESTMENT INCOME
Interest from investments
Non-controlled/non-affiliated investments:
Cash	$	25,368			$	25,368
Payment-in-kind	1,755				1,755
Affiliated investments:
Cash	2,198				2,198
Payment-in-kind	2,604				2,604
Controlled investments:
Cash	338				338
Payment-in-kind	2,801				2,801
Total interest income	35,064		—		35,064
Dividend income	8,219		(8,050)	(4)	169
Interest from cash and cash equivalents	712				712
Fee income	2,304				2,304
Total investment income	46,299		(8,050)		38,249
EXPENSES
Base management fees	11,190		(598)	(5)	10,592
Interest and financing expenses	24,049				24,049
General and administrative	7,399				7,399
Administrator expenses	3,324				3,324
Insurance	623				623
Directors fees	1,258				1,258
Professional fees, net	19,323				19,323
Total expenses	67,166		(598)		66,568
NET INVESTMENT INCOME	(20,867)		(7,452)		(28,319)
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) from investments
Non-controlled/non-affiliated investments	(24,762)				(24,762)
Affiliated investments	(7,671)				(7,671)
Controlled investments	(79,740)		(39,124)	(8)	(118,864)
Net realized gain/(loss) from investments	(112,173)		(39,124)		(151,297)
Net unrealized appreciation/(depreciation) on investments
Non-controlled/non-affiliated investments	20,727				20,727
Affiliated investments	(6,864)				(6,864)
Controlled investments	24,635		(8,218)	(7)	16,417
Net unrealized appreciation/(depreciation) on investments	38,498		(8,218)		30,280
Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments	—				—

Net loss on extinguishment of debt	(2,033)				(2,033)
Net realized and unrealized gain/(loss) on investments	(75,708)		(47,342)		(123,050)
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(96,575)	$	(54,794)	$	(151,369)
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE	$	(35.46)	$	(20.12)	$	(55.57)
WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE	$	(7.66)	$	(2.74)	$	(10.40)
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED	2,723,711		2,723,711		2,723,711
DIVIDENDS DECLARED PER COMMON SHARE	$	—	$	—	$	—

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(Dollars in thousands)

Pro Forma Assumptions:

(1) Represents pro forma adjustment for the sale of the Company's equity interests in MCC JV as if it took place on June 30, 2020, which incorporated (a) the elimination of the June 30, 2020 fair value of MCC JV ($47,135); (b) proceeds of $41,019 received by MCC on October 8, 2020 less $1,567 of estimated expenses associated with the MCC JV Sale ($39,451) and (c) the balance sheet impact of the resulted net realized loss of $40,686 less the reversal of previously-recognized net unrealized loss of $32,752 ($7,684).

(2) Represents pro forma adjustment for the reduction of base management fees payable to the Company's investment adviser, MCC Advisors LLC ("MCC Advisors") consisting of a reduction in the base management fee payable of $17. The pro forma reduction in the base management fee was attributable to the net realized loss from the MCC JV Sale, which in turn, decreased the average total assets (on which the management fee is calculated) for the quarter then ended.

(3) Represents the reversal of a portion of the expense support agreement waiver (the "ESA waiver") booked for the month ended June 30, 2020 as a result of the decrease in management fees payable.

(4) Represents the elimination of actual dividend income received from MCC JV, assuming the MCC JV Sale took place on October 1, 2018.

(5) Represents pro forma adjustments for the reduction of base management fee expense incurred to MCC Advisors due to the assumed decrease in the average total assets (on which the management fee is calculated), assuming the MCC JV Sale took place on October 1, 2018.

(6) Represents pro forma adjustment to the ESA waiver as a result of the reduction of base management fees incurred to MCC Advisors ($22) during the month ended June 30, 2020, assuming the MCC JV sale took place on October 1, 2018.

(7) Represents elimination of unrealized appreciation/(depreciation) on the MCC JV, assuming the MCC JV Sale took place on October 1, 2018.

(8) Represents realized loss incurred assuming the MCC JV Sale took place on October 1, 2018.

EX-10.1

exhibit101-membershipint