10-K 1 sicp20201231_10k.htm FORM 10-K sicp20201231_10k.htm
 


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


Form 10-K

 


 

(Mark One)

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

For the fiscal year ended December 31, 2020

or

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

For the transition period from              to             

Commission file number: 814-00924

 


Sierra Income Corporation

(Exact Name of Registrant as Specified in its Charter)

 

 


Maryland

 

45-2544432

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

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

 

10017

(Address of Principal Executive Offices)

 

(Zip Code)

(212) 759-0777

(Registrant’s Telephone Number, Including Area Code)

 


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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

 


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ☐    No  ☒

 

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

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☐    No  ☐

 

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

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

Smaller reporting company

 

Emerging growth company

 

  

 

 

 

 

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ☐    No  ☒

As of March 19, 2021, the Registrant had 102,771,530 shares of common stock, $0.001 par value, outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the registrant’s proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s 2021 Annual Meeting of Stockholders, which will be filed subsequent to the date hereof, are incorporated by reference into Part III of this Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission not later than 120 days following the end of the Registrant’s fiscal year ended December 31, 2020.



 

 

 
 

SIERRA INCOME CORPORATION

TABLE OF CONTENTS

 

 

Page

PART I

3

Item 1. Business

3

Item 1A. Risk Factors

30

Item 1B. Unresolved Staff Comments

30

Item 2. Properties

30

Item 3. Legal Proceedings

31

Item 4. Mine Safety Disclosures

31

PART II

31

Item  5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

31

Item 6. Selected Financial Data

33

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

34

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

48

Item 8. Consolidated Financial Statements and Supplementary Data

50

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

95

Item 9A. Controls and Procedures

95

Item 9B. Other Information

95

PART III

95

Item 10. Directors, Executive Officers and Corporate Governance

95

Item 11. Executive Compensation

96

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

96

Item 13. Certain Relationships and Related Transactions, and Director Independence

96

Item 14. Principal Accountant Fees and Services

96

PART IV

96

Item 15. Exhibits and Consolidated Financial Statement Schedules

96

Item 16. Form 10-K Summary

98

Signatures

99

 

 

 

PART I

 

In this annual report on Form 10-K, except as otherwise indicated, the terms:

 

“we”, “us”, “our”, “Sierra” and the “Company” refer to Sierra Income Corporation, a Maryland corporation.

“SIC Advisors” and the “Adviser” refer to SIC Advisors LLC, our investment adviser. SIC Advisors is a wholly owned subsidiary of Medley LLC, which is controlled by Medley Management Inc., a publicly traded asset management firm, which in turn is controlled by Medley Group LLC, an entity wholly-owned by the senior professionals of Medley LLC.

“Medley” refers, collectively, to the activities and operations of Medley Capital LLC, Medley LLC, Medley Management Inc., Medley Group LLC, associated investment funds and their respective affiliates.

 

Item 1. Business

 

GENERAL

 

Sierra Income Corporation is a non-diversified closed-end management investment company incorporated in Maryland that has elected to be treated and is regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has elected, and intends to qualify annually, to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We are externally managed and advised by our investment adviser, SIC Advisors LLC (“SIC Advisors”) pursuant to an investment advisory agreement (the "Investment Advisory Agreement").

 

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

 

Our Adviser

 

Our investment activities are managed by our investment adviser, SIC Advisors, which is an investment adviser registered with the Securities and Exchange Commission (the "SEC") under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and a wholly owned subsidiary of Medley LLC. SIC Advisors is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis.

 

Our Investment Team has extensive experience in the credit business, including originating, underwriting, principal investing and loan structuring. Our Adviser, through Medley, has access to approximately 40 employees, including approximately 20 investment, origination and credit management professionals, and approximately 20 operations, marketing and distribution professionals, each with extensive experience in their respective disciplines. Medley Capital LLC serves as our administrator, provides office space to us, and provides us with equipment and other office services. The responsibilities of our administrator include overseeing our financial records, preparing reports to our stockholders and reports filed with the SEC and generally monitoring the payment of our expenses and the performance of administrative and professional services rendered to us by others. See “Administration Agreement and Fees” below.

 

Formation

 

Sierra Income Corporation was incorporated under the general corporation laws of the State of Maryland on June 13, 2011. On April 17, 2012, we successfully reached our minimum escrow requirement and officially commenced our operations by issuing 1,108,033 shares of common stock to SIC Advisors for gross proceeds of $10,000,000. On July 2, 2018, the Company’s board of directors determined to terminate the Company’s offering effective as of July 31, 2018. We sold a total of 102,630,605 shares of common stock, which includes the shares issued as part of the distribution reinvestment plan (see Note 13), for total gross proceeds of $1.0 billion, which includes the shares sold to SIC Advisors. The proceeds from the issuance of common stock are presented in our consolidated statements of changes in net assets and Consolidated Statements of Cash Flows and are presented net of selling commissions and dealer manager fees.

 

 

Investment Process

 

We believe our Adviser has cultivated a disciplined and repeatable process for executing, monitoring, structuring and exiting investments.

 

Identification and Sourcing. Our Adviser’s experience and reputation have allowed it to generate what we believe to be a substantial and continuous flow of attractive investment opportunities. Our Adviser maintains a strong and diverse network which results in sustained and high quality deal flow. We believe that the breadth and depth of experience of SIC Advisors’ Investment Team across strategies and asset classes, coupled with significant relationships built over the last 20 years, make them particularly qualified to uncover, evaluate and aggressively pursue what we believe to be attractive investment opportunities. We believe that SIC Advisors’ Investment Team, by leveraging the broader Medley platform deal flow network has compiled a robust pipeline of transactions ready for possible inclusion in our portfolio.

 

Disciplined Underwriting. SIC Advisors’ Investment Team performs thorough due diligence and focuses on several key criteria in its underwriting process, including strong underlying business fundamentals, a meaningful equity cushion, experienced management, conservative valuation and the ability to deleverage through cash flows. Our Adviser’s underwriting process also involves engagement of industry experts and third-party consultants.

 

Prior to making an investment, the Investment Team subjects each potential borrower to an extensive credit review process, which typically begins with an analysis of the market opportunity, business fundamentals, company operating metrics and historical and projected financial analysis. The Investment Team also compares liquidity, operating margin trends, leverage, free cash flow and fixed charge coverage ratios for each potential investment to industry metrics. Areas of additional underwriting focus include management or sponsor (typically a private equity firm) experience, management compensation, competitive landscape, regulatory environment, pricing power, defensibility of market share and tangible asset values. Background checks and tax compliance information may also be requested on management teams and key employees. In addition, the Investment Team may contact customers, suppliers and competitors and performs on-site visits as part of a routine business due diligence process.

 

The Investment Team routinely uses third-party consultants and market studies to corroborate valuation and industry specific due diligence, as well as provide quality of earnings analysis. Experienced legal counsel is engaged to evaluate and mitigate regulatory, insurance, tax or other company-specific risks.

 

After the Investment Team completes its final due diligence, each proposed investment is presented to our Adviser’s investment committee (the “Investment Committee”) and subjected to extensive discussion and follow-up analysis, if necessary. A formal memorandum for each investment opportunity typically includes the results of business due diligence, multi-scenario financial analysis, risk-management assessment, results of third-party consulting work, background checks (where applicable) and structuring proposals. The Investment Committee requires a majority vote to approve any investment, although unanimous agreement is sought.

 

Active Credit Management. Our Adviser employs active credit management. Our Adviser’s process includes frequent interaction with management, monthly or quarterly review of financial information and may include attendance at board of directors’ meetings as observers. The Investment Team also evaluates financial reporting packages provided by portfolio companies that detail operational and financial performance. Data is entered in our Adviser’s Asset Management System (“AMS”), a centralized electronic credit management database. AMS creates a centralized, dynamic electronic repository for all of our portfolio company data. Our Adviser’s AMS system generates comprehensive, standardized reports which aggregate operational updates, portfolio company financial performance, asset valuations, macro trends, management call notes and account history. AMS enables the Investment Team to have real-time access to the most recent information on our portfolio investments.

 

In addition to the data provided by our borrowers, our Adviser may also utilize various third parties to provide checks and balances throughout the credit management process. Independent valuation firms may be engaged to provide appraisals of asset and collateral values or external forensic accounting groups may be engaged to verify portfolio company financial reporting or perform cash reconciliation. Our Adviser believes this hands-on approach to credit management is a key contributor to our investment performance.

 

Investment Structure

 

For newly originated investments, SIC Advisors strives to negotiate an optimal combination of current and deferred interest payments, equity participation and prepayment penalties, along with suitable covenants and creditor rights which may generally be greater than the rights normally obtained by institutional investors in comparable transactions and may include such provisions as: specific rights to consult with and advise management, the right to inspect company books, records or facilities, as well as the right to review balance sheets and/or statements of income and cash flows of the company. SIC Advisors determines whether the investment structure, particularly the amount of debt, is appropriate for the portfolio company’s business, sometimes reassessing the investment’s risk/return profile and adjusting pricing and other terms as necessary. The Investment Team has in-depth restructuring, liquidation and bankruptcy experience which is vital to success as a lender over market cycles.

 

 

Investment Committee

 

The purpose of the Investment Committee is to evaluate and approve investments proposed by SIC Advisors’ Investment Team. The Investment Committee is comprised of members selected from senior members of SIC Advisors’ Investment Team. Approval of an investment requires a majority vote of the Investment Committee, although unanimous agreement is sought. The committee process is intended to bring the diverse experience and perspectives of the committee members to the analysis and consideration of every investment. The Investment Committee also serves to provide consistency and adherence to SIC Advisors’ investment philosophies and policies. The Investment Committee also determines appropriate investment sizing and suggests ongoing monitoring requirements.

 

In addition to reviewing investments, the Investment Committee meetings serve as a forum to discuss credit views and outlooks. Potential transactions and deal flow are also reviewed on a regular basis. Members of the Investment Team are encouraged to share information and views on credits with the Investment Committee early in their analysis and throughout the evaluation process. This process improves the quality of the analysis and assists the deal team members to work more efficiently.

 

Managerial Assistance

 

As a BDC, we offer, and must provide upon request, managerial assistance to certain of our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. We may receive fees for these services and will reimburse Medley, as our administrator, for its allocated costs in providing such assistance, subject to review and approval by our board of directors. Medley will provide such managerial assistance on our behalf to portfolio companies that request this assistance.

 

Competition

 

Our primary competitors to provide financing to private and middle-market companies are public and private funds, commercial banks, commercial finance companies, other BDCs, small business investment companies and private equity and hedge funds. Some competitors may have access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Some of our competitors may also choose lower risk and return profiles and strategies that may outperform higher risk profiles and strategies when credit markets or individual companies encounter stressed environments. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or to the distribution and other requirements we must satisfy to maintain our favorable RIC tax treatment.

 

Staffing

 

We do not currently have any employees and do not expect to have any employees. Services necessary for our business are provided by individuals who are employees of SIC Advisors and Medley Capital LLC, pursuant to the terms of the Investment Advisory Agreement and the Administration Agreement (as defined below). Our day-to-day investment operations are managed by our Adviser. In addition, we reimburse Medley Capital LLC for our allocable portion of expenses incurred by it in performing its obligations under the administration agreement, including our allocable portion of the cost of our officers and their respective staffs.

 

Administration

 

We have entered into an administration agreement with Medley Capital LLC (the “Administration Agreement”) pursuant to which Medley Capital LLC furnishes us with administrative services necessary to conduct our day-to-day operations. Medley Capital LLC is reimbursed for administrative expenses it incurs on our behalf in performing its obligations. Such costs are reasonably allocated to us on the basis of assets, revenues, time records or other reasonable methods. We do not reimburse Medley Capital LLC for any services for which it receives a separate fee or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of Medley Capital LLC. Medley Capital LLC is an affiliate of SIC Advisors. See “Administration Agreement and Fees.”

 

Termination of the Agreements and Plan of Mergers

 

On July 29, 2019, the Company entered into the Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019 (the “Amended MCC Merger Agreement”), by and between Medley Capital Corporation (“MCC”) and the Company, pursuant to which MCC would, on the terms and subject to the conditions set forth in the Amended MCC Merger Agreement, merge with and into the Company, with the Company as the surviving company in the merger (the “MCC Merger”). In addition, on July 29, 2019, the Company entered into the Amended and Restated Agreement and Plan of Merger, dated as of July 29, 2019 (the “Amended MDLY Merger Agreement”), by and among MDLY, the Company, and Sierra Management, Inc., a wholly owned subsidiary of the Company (“Merger Sub”), MDLY would, on the terms and subject to the conditions set forth in the Amended MDLY Merger Agreement, merge with and into Merger Sub, with Merger Sub as the surviving company in the merger (the “MDLY Merger” together with the MCC Merger, the “Proposed Mergers”).

 

Section 9.1(c) of the Amended MCC Merger Agreement and Section 9.1(c) of the Amended MDLY Merger Agreement each permits the Company and either MCC or MDLY, as applicable, to terminate the Amended MCC Merger Agreement and the Amended MDLY Merger Agreement, respectively, if the MCC Merger or the MDLY Merger, as applicable, has not been consummated on or before March 31, 2020 (the “Outside Date”). On May 1, 2020, the Company terminated both the Amended MCC Merger Agreement and the Amended MDLY Merger Agreement effective as of May 1, 2020 as the Outside Date had passed and neither the MCC Merger or the MDLY Merger had been consummated. In determining to terminate the Amended MCC Merger Agreement and the Amended MDLY Merger Agreement, the Company considered a number of factors, including, among other factors, changes in the relative valuations of the Company, MCC, and MDLY, the changed circumstances and the unpredictable economic conditions resulting from the global health crisis caused by the coronavirus (COVID-19) pandemic, and the uncertainty regarding the parties’ ability to satisfy the conditions to closing in a timely manner. 

 

Available Information

 

We maintain a website at http://www.sierraincomecorp.com. We make available, free of charge, on our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated by reference into this annual report on Form 10-K and you should not consider information contained on our website to be part of this annual report on Form 10-K or any other report we file with the SEC.

 

 

INVESTMENTS

 

We have built an investment portfolio that includes senior secured first lien term loans, senior secured second lien term loans, senior secured first lien notes, subordinated notes and equity/warrants.

 

The following table shows the investment portfolio composition by industry classification at amortized cost and fair value as of December 31, 2020.

 

   

Amortized Cost

   

Percentage

   

Fair Value

   

Percentage

 

Multi-Sector Holdings

  $ 174,660,001       24.9 %   $ 131,792,864       21.8 %

Services: Business

    79,260,551       11.3 %     73,716,395       12.2 %

High Tech Industries

    75,519,344       10.8 %     71,792,022       11.9 %

Healthcare & Pharmaceuticals

    68,599,968       9.8 %     58,275,198       9.6 %

Consumer Goods: Durable

    32,045,028       4.6 %     41,016,292       6.8 %

Construction & Building

    42,928,750       6.1 %     38,356,358       6.4 %

Banking, Finance, Insurance & Real Estate

    27,848,664       4.0 %     37,620,161       6.2 %

Aerospace & Defense

    33,558,896       4.8 %     29,723,725       4.9 %

Hotel, Gaming & Leisure

    36,326,705       5.2 %     24,013,769       4.0 %

Automotive

    18,886,756       2.7 %     17,404,476       2.9 %

Containers, Packaging & Glass

    15,206,840       2.2 %     15,120,424       2.5 %

Environmental Industries

    5,041,430       0.7 %     10,052,691       1.7 %

Services: Consumer

    9,700,000       1.4 %     9,725,000       1.6 %

Chemicals, Plastics & Rubber

    10,060,861       1.4 %     9,063,498       1.5 %

Forest Products & Paper

    6,477,887       0.9 %     7,770,704       1.3 %

Media: Diversified & Production

    15,474,145       2.2 %     6,780,000       1.1 %

Transportation: Cargo

    6,877,294       1.0 %     6,770,781       1.1 %

Transportation: Consumer

    7,975,416       1.1 %     6,068,082       1.0 %

Metals & Mining

    3,492,436       0.5 %     3,492,479       0.6 %

Energy: Oil & Gas

    20,868,832       3.0 %     2,625,018       0.4 %

Wholesale

    2,212,919       0.3 %     1,746,044       0.3 %

Retail

    7,934,347       1.1 %     1,012,358       0.2 %

Beverage & Food

    46,869       0.0 %     48,141       0.0 %

Total

  $ 701,003,939       100.0 %   $ 603,986,480       100.0 %

 

 

 

The following table sets forth certain information for each portfolio company in which we had an investment as of December 31, 2020. Other than these portfolio investments, our only formal relationships with our portfolio companies are the managerial assistance that we may provide upon their request and the board observer or participation rights we may receive in connection with our investment portfolio.

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

Non-controlled/non-affiliated investments –

  89.9%                                        
                                             

AAAHI Acquisition Corporation

 

Transportation: Consumer

 

Senior Secured First Lien Term Loan LIBOR + 8.250%, 1.000% Floor(4) (5) (13)

 

12/10/2023

  $ 7,110,546     $ 6,975,416     $ 4,977,382       0.9 %
                  7,110,546       6,975,416       4,977,382          

Alpine SG, LLC

 

High Tech Industries

 

Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor(5) (6)

 

11/16/2022

    1,262,051       1,230,864       1,298,524       0.2 %
       

Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.750%, 1.000% Floor(5) (6)

 

11/16/2022

    6,165,725       6,165,633       6,102,218       1.2 %
       

Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor(5) (6)

 

11/16/2022

    12,529,258       12,517,772       12,400,207       2.4 %
       

Senior Secured First Lien Revolving Credit Facility LIBOR + 5.750%, 1.000% Floor(5) (6)

 

11/16/2022

    1,000,000       1,000,000       989,700       0.2 %
                  20,957,034       20,914,269       20,790,649          

American Dental Partners, Inc.

 

Healthcare & Pharmaceuticals

 

Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor(4) (5)

 

9/25/2023

    4,893,750       4,893,750       4,704,362       0.9 %
                  4,893,750       4,893,750       4,704,362          

Amerijet Holdings, Inc.

 

Transportation: Cargo

 

Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor(5) (6)

 

7/15/2021

    2,952,518       2,952,518       2,952,518       0.6 %
                  2,952,518       2,952,518       2,952,518          

AMMC CLO 22, Limited Series 2018-22A

 

Multi-Sector Holdings

 

Subordinated Notes 13.429% effective yield(7) (8) (9)

 

4/25/2031

    7,222,000       5,402,828       4,786,019       0.9 %
                  7,222,000       5,402,828       4,786,019          

AMMC CLO 23, Ltd. Series 2020-23A

 

Multi-Sector Holdings

 

Subordinated Notes 19.100% effective yield(7) (8) (9)

 

10/17/2031

    2,000,000       1,688,071       1,688,000       0.3 %
                  2,000,000       1,688,071       1,688,000          

Answers Finance, LLC

 

High Tech Industries

 

Common Stock - 388,533 shares (10)

          5,076,376       493,437       0.1 %
                        5,076,376       493,437          

Apidos CLO XXIV, Series 2016-24A

 

Multi-Sector Holdings

 

Subordinated Notes 8.894% effective yield(5) (7) (8) (9)

 

7/20/2027

    18,357,647       10,342,024       8,402,295       1.6 %
                  18,357,647       10,342,024       8,402,295          

Arrow International Inc.

 

Hotel, Gaming & Leisure

 

Senior Secured First Lien Term Loan LIBOR + 7.250%, 1.250% Floor(6)

 

12/21/2025

    10,000,000       10,000,000       10,000,000       1.9 %
                  10,000,000       10,000,000       10,000,000          

Avantor, Inc.

 

Wholesale

 

Common Stock - 27,252 shares (5) (8) (10) (11)

          467,171       767,144       0.1 %
                        467,171       767,144          

Aviation Technical Services, Inc.

 

Aerospace & Defense

 

Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor(4) (5)

 

3/31/2022

    25,000,000       25,000,000       21,795,000       4.1 %
                  25,000,000       25,000,000       21,795,000          

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

BRG Sports, Inc.

 

Consumer Goods: Durable

 

Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor(5) (6)

 

6/15/2023

    3,480,384       3,474,606       3,445,232       0.7 %
                  3,480,384       3,474,606       3,445,232          

Brook & Whittle Holding Corp.

 

Containers, Packaging & Glass

 

Senior Secured First Lien Delayed Draw Term Loan LIBOR + 5.250%, 1.000% Floor(4) (5)

 

10/17/2024

    699,967       697,464       682,888       0.1 %
       

Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor(4) (5)

 

10/17/2024

    2,976,219       2,965,575       2,903,599       0.6 %
                  3,676,186       3,663,039       3,586,487          

Callaway Golf Co.

 

Consumer Goods: Durable

 

Senior Secured First Lien Term Loan LIBOR + 4.500%, 1.000% Floor(5) (6)

 

1/4/2026

    46,000       45,422       46,060       %
                  46,000       45,422       46,060          

CM Finance SPV LLC

 

Banking, Finance, Insurance & Real Estate

 

Subordinated Notes 3.000%(5)

 

6/24/2021

    35,600       35,600       35,600       %
                  35,600       35,600       35,600          

CPI International, Inc.

 

Aerospace & Defense

 

Senior Secured Second Lien Term Loan LIBOR + 7.250%, 1.000% Floor(5) (6)

 

7/28/2025

    8,575,302       8,558,896       7,928,725       1.5 %
                  8,575,302       8,558,896       7,928,725          

CT Technologies Intermediate Holdings, Inc.

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor(5) (6)

 

12/16/2025

    7,000,000       6,965,245       6,965,000       1.3 %
                  7,000,000       6,965,245       6,965,000          

DataOnline Corp.

 

High Tech Industries

 

Revolving Credit Facility LIBOR + 6.250%, 1.000% Floor(4) (5) (12)

 

11/13/2025

    1,821,429       1,821,429       1,765,929       0.3 %
       

Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor(4) (5)

 

11/13/2025

    14,850,000       14,850,000       14,465,385       2.8 %
                  16,671,429       16,671,429       16,231,314          

Delta Air Lines, Inc.

 

Transportation: Consumer

 

Senior Secured First Lien Notes 4.750%(5) (7) (8)

 

10/20/2028

    1,000,000       1,000,000       1,090,700       0.2 %
                  1,000,000       1,000,000       1,090,700          

Dryden 38 Senior Loan Fund, Series 2015-38A

 

Multi-Sector Holdings

 

Subordinated Notes 11.373% effective yield(7) (8) (9)

 

7/15/2027

    7,000,000       4,308,139       3,598,000       0.7 %
                  7,000,000       4,308,139       3,598,000          

Dryden 43 Senior Loan Fund, Series 2016-43A

 

Multi-Sector Holdings

 

Subordinated Notes 8.262% effective yield(5) (7) (8) (9)

 

7/20/2029

    3,620,000       2,513,635       1,901,586       0.4 %
                  3,620,000       2,513,635       1,901,586          

Dryden 49 Senior Loan Fund, Series 2017-49A

 

Multi-Sector Holdings

 

Subordinated Notes 9.989% effective yield(5) (7) (8) (9)

 

7/18/2030

    17,233,288       12,375,842       9,498,988       1.8 %
                  17,233,288       12,375,842       9,498,988          

Envision Healthcare Corporation

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 3.750%(5) (6)

 

10/10/2025

    49,000       33,226       40,734       %
                  49,000       33,226       40,734          

First Boston Construction Holdings, LLC

 

Banking, Finance, Insurance & Real Estate

 

Senior Secured First Lien Notes 12.000%(5)

 

2/23/2023

    7,473,750       7,473,750       7,458,055       1.4 %
       

Preferred Equity - 2,304,406 units (5) (10)

          1,868,437       1,307,906       0.2 %
                  7,473,750       9,342,187       8,765,961          

Friedrich Holdings, Inc.

 

Construction & Building

 

Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor(5) (6)

 

2/7/2023

    10,421,300       10,421,300       10,263,938       2.0 %
                  10,421,300       10,421,300       10,263,938          

GK Holdings, Inc.

 

Services: Business

 

Senior Secured Second Lien Term Loan LIBOR + 10.250%, 1.000% Floor(4) (13)

 

1/20/2022

    10,000,000       10,000,000       5,500,000       1.0 %
                  10,000,000       10,000,000       5,500,000          

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

Glass Mountain Pipeline Holdings, LLC

 

Energy: Oil & Gas

 

Senior Secured First Lien Term Loan LIBOR + 4.500%, 1.000% Floor(5) (6) (13)

 

12/23/2024

    48,625       23,389       24,434       %
                  48,625       23,389       24,434          

Golden West Packaging Group LLC

 

Forest Products & Paper

 

Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor(5) (6)

 

6/20/2023

    1,405,738       1,405,738       1,404,332       0.3 %
                  1,405,738       1,405,738       1,404,332          

Holland Acquisition Corp.

 

Energy: Oil & Gas

 

Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor(4) (13) (14)

 

5/29/2020

    3,857,305       3,733,979       108,310       %
                  3,857,305       3,733,979       108,310          

Hylan Datacom & Electrical LLC

 

Construction & Building

 

Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor(4) (5)

 

7/25/2022

    15,255,390       15,255,390       10,983,881       2.1 %
                  15,255,390       15,255,390       10,983,881          

Impact Group, LLC

 

Services: Business

 

Senior Secured First Lien Term Loan LIBOR + 7.370%, 1.000% Floor(4) (5)

 

6/27/2023

    5,734,462       5,734,462       5,548,092       1.1 %
                  5,734,462       5,734,462       5,548,092          

Innovative XCessories & Services, LLC

 

Automotive

 

Senior Secured First Lien Term Loan LIBOR + 5.200%, 1.000% Floor(4) (5)

 

3/5/2027

    2,976,933       2,950,524       2,979,016       0.6 %
                  2,976,933       2,950,524       2,979,016          

Interflex Acquisition Company, LLC

 

Containers, Packaging & Glass

 

Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor(5) (6)

 

8/18/2022

    11,553,578       11,543,801       11,533,937       2.2 %
                  11,553,578       11,543,801       11,533,937          

Iqor US Inc.

 

Services: Business

 

Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor(5) (6)

 

11/19/2024

    3,471,136       3,388,625       3,401,713       0.6 %
       

Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor(5) (6)

 

11/19/2025

    7,734,435       7,734,435       7,734,435       1.5 %
       

Equity - 246,857 Shares

          2,962,285       3,085,713       0.6 %
                  11,205,571       14,085,345       14,221,861          

Isagenix International, LLC

 

Wholesale

 

Senior Secured First Lien Term Loan LIBOR + 5.750%, 1.000% Floor(4) (5)

 

6/16/2025

    1,776,911       1,745,748       978,900       0.2 %
                  1,776,911       1,745,748       978,900          

Isola USA Corp.

 

High Tech Industries

 

Senior Secured Second Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK(4) (12) (13)

 

1/2/2023

    11,331,641       7,016,631       8,498,730       1.6 %
       

Common Units - 10,283,782 units (10)

                      %
                  11,331,641       7,016,631       8,498,730          

Ivanti Software, Inc.

 

High Tech Industries

 

Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor(5) (6)

 

12/1/2028

    6,000,000       6,000,000       5,947,800       1.1 %
                  6,000,000       6,000,000       5,947,800          

JFL-WCS Partners, LLC

 

Environmental Industries

 

Preferred units - 618,876 6.000%, PIK(5)

          659,447       709,806       0.1 %
       

Common Units - 70,412 units (5) (10)

          98,052       5,069,664       1.0 %
                        757,499       5,779,470          

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

Keystone Acquisition Corp.

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor(4) (5)

 

5/1/2024

    1,784,130       1,736,823       1,614,638       0.3 %
       

Senior Secured Second Lien Term Loan LIBOR + 9.250%, 1.000% Floor(4) (5)

 

5/1/2025

    7,000,000       6,921,915       6,127,800       1.2 %
                  8,784,130       8,658,738       7,742,438          

LogMeIn, Inc.

 

High Tech Industries

 

Senior Secured First Lien Term Loan LIBOR + 7.750%, 1.000% Floor(5) (6) (8)

 

8/31/2027

    1,000,000       980,865       995,300       0.2 %
                  1,000,000       980,865       995,300          

Magnetite XIX, Limited

 

Multi-Sector Holdings

 

Subordinated Notes LIBOR + 7.610%(4) (7) (8) (9)

 

7/17/2030

    2,000,000       1,893,387       1,745,800       0.3 %
       

Subordinated Notes 9.779% effective yield(5) (7) (8) (9)

 

7/17/2030

    13,730,209       9,451,985       7,493,948       1.4 %
                  15,730,209       11,345,372       9,239,748          

Midwest Physician Administrative Services, LLC

 

Healthcare & Pharmaceuticals

 

Senior Secured Second Lien Term Loan LIBOR + 7.000%, 0.750% Floor(6)

 

8/15/2025

    2,000,000       1,935,192       1,945,000       0.4 %
                  2,000,000       1,935,192       1,945,000          

Novetta Solutions, LLC

 

High Tech Industries

 

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor(5) (6)

 

10/17/2022

    1,560,779       1,522,514       1,521,291       0.3 %
       

Senior Secured Second Lien Term Loan LIBOR + 8.500%, 1.000% Floor(5) (6)

 

10/16/2023

    11,000,000       10,951,758       10,574,300       2.0 %
                  12,560,779       12,474,272       12,095,591          

Offen Inc.

 

Transportation: Cargo

 

Senior Secured First Lien Term Loan LIBOR + 5.000%(5) (6)

 

6/21/2026

    2,893,982       2,871,192       2,793,272       0.5 %
       

Senior Secured First Lien Term Loan LIBOR + 5.000%(5) (6)

 

6/21/2026

    1,061,947       1,053,584       1,024,991       0.2 %
                  3,955,929       3,924,776       3,818,263          

Path Medical, LLC

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 13.000%, 1.000% Floor, PIK(4) (5) (6) (13)

 

10/11/2021

    10,752,249       8,860,931       1,075,225       0.2 %
       

Senior Secured First Lien Term Loan LIBOR + 9.500%, 1.000% Floor, PIK(4) (5) (6)

 

10/11/2021

    7,943,176       7,943,176       7,943,176       1.5 %
       

Warrants - 36,716 warrants (5) (10)

 

1/9/2027

          669,709             %
                  18,695,425       17,473,816       9,018,401          

PetroChoice Holdings, Inc.

 

Chemicals, Plastics & Rubber

 

Senior Secured Second Lien Term Loan LIBOR + 8.750%, 1.000% Floor(4) (5)

 

8/21/2023

    9,000,000       9,000,000       8,010,000       1.5 %
                  9,000,000       9,000,000       8,010,000          

Polymer Solutions Group Holdings, LLC

 

Chemicals, Plastics & Rubber

 

Senior Secured First Lien Term Loan LIBOR + 7.000%, 1.000% Floor(5) (6)

 

6/30/2021

    1,064,355       1,060,861       1,053,498       0.2 %
                  1,064,355       1,060,861       1,053,498          

Project Silverback Holdings Corp.

 

High Tech Industries

 

Senior Secured First Lien Term Loan LIBOR + 3.500%, 1.000% Floor(4)

 

8/21/2024

    4,837,500       4,403,234       4,819,601       0.9 %
                  4,837,500       4,403,234       4,819,601          

Proppants Holdings, LLC

 

Energy: Oil & Gas

 

Common Units - 161,852 units (10)

          874,363       323,704       0.1 %
        Common Units - 161,852 units (10)           8,832             %
                        883,195       323,704          

PT Network, LLC

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 5.500%, 1.000% Floor, 2.00% PIK(5) (17)

 

11/30/2023

    8,072,834       7,729,742       7,427,007       1.4 %
       

Membership Units - 1.441 units (5) (10)

                      %
                  8,072,834       7,729,742       7,427,007          

 

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

RateGain Technologies, Inc.

 

Hotel, Gaming & Leisure

 

Subordinated Notes (5) (10) (14)

 

7/31/2020

    440,050       440,049             %
       

Subordinated Notes (5) (10)

 

7/31/2021

    476,190       476,190             %
                  916,240       916,239                

Redwood Services Group, LLC

 

Services: Business

 

Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor(5) (6)

 

6/6/2023

    4,000,000       4,000,000       4,000,000       0.8 %
       

Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor(5) (6)

 

6/6/2023

    12,611,712       12,611,712       12,267,412       2.3 %
       

Senior Secured First Lien Term Loan LIBOR + 8.500%, 1.000% Floor(5) (6)

 

6/6/2023

    10,730,528       10,713,091       10,472,305       2.0 %
       

Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor(5) (6) (12)

 

6/6/2023

    287,500       287,500       208,725       %
                  27,629,740       27,612,303       26,948,442          

Resolute Investment Managers, Inc.

 

Banking, Finance, Insurance & Real Estate

 

Senior Secured Second Lien Term Loan LIBOR + 8.000%, 1.000% Floor(5) (6)

 

4/30/2025

    6,000,000       5,970,877       5,943,600       1.1 %
                  6,000,000       5,970,877       5,943,600          

Rhombus Cinema Holdings, LP

 

Media: Diversified & Production

 

Preferred Equity - 7,449 shares 10.000% PIK(5) (10) (13)

          4,584,207             %
       

Common Units - 3,163 units (5) (7) (10)

          2,864,831             %
       

Common Units - 3,163 units (5) (7) (10)

          297,962             %
                        7,747,000                

RTIC Subsidiary Holdings, LLC

 

Consumer Goods: Durable

 

Senior Secured First Lien Term Loan LIBOR + 7.750%, 1.250% Floor(4) (5) (12)

 

9/1/2025

    10,000,000       10,000,000       10,000,000       1.9 %
       

Preferred Class A units - 142.50 units (10)

          142,500       142,500       %
       

Preferred Class B units - 142.50 units (10)

          142,500       142,500       %
       

Common units - 150 units (10)

          15,000       15,000       %
                  10,000,000       10,300,000       10,300,000          

SavATree, LLC

 

Environmental Industries

 

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor(4) (5)

 

6/2/2022

    4,283,931       4,283,931       4,273,221       0.8 %
                  4,283,931       4,283,931       4,273,221          

SFP Holding, Inc.

 

Construction & Building

 

Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor(4) (5) (12)

 

9/1/2022

    16,560,532       16,540,362       16,560,532       3.1 %
       

Equity - 0.803% of outstanding equity (5) (10)

          711,698       548,007       0.1 %
                  16,560,532       17,252,060       17,108,539          

Simplified Logistics, LLC

 

Services: Business

 

Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor(4) (5)

 

2/28/2022

    17,323,831       17,323,831       17,058,776       3.2 %
       

Senior Secured First Lien Term Loan LIBOR + 6.500%, 1.000% Floor(4) (5)

 

2/28/2022

    971,277       971,277       956,417       0.2 %
       

Revolving Credit Facility LIBOR + 6.500%, 1.000% Floor(4) (5)

 

2/28/2022

    3,533,333       3,533,333       3,482,807       0.7 %
                  21,828,441       21,828,441       21,498,000          

SMART Financial Operations, LLC

 

Retail

 

Preferred Equity - 1,000,000 units (5) (10)

          1,000,000       490,000       0.1 %
                        1,000,000       490,000          

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

Smile Doctors, LLC

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor(4) (5)

 

10/6/2022

    13,805,148       13,786,625       13,587,027       2.6 %
                  13,805,148       13,786,625       13,587,027          

Sound Point CLO XX, Ltd.

 

Multi-Sector Holdings

 

Subordinated Notes 8.553% effective yield(5) (7) (8) (9)

 

7/26/2031

    4,489,000       3,508,513       2,824,030       0.5 %
                  4,489,000       3,508,513       2,824,030          

Starfish Holdco, LLC

 

High Tech Industries

 

Senior Secured Second Lien Term Loan LIBOR + 9.000%, 1.000% Floor(4) (5)

 

8/18/2025

    2,000,000       1,982,268       1,919,600       0.4 %
                  2,000,000       1,982,268       1,919,600          

Team Car Care, LLC

 

Automotive

 

Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor(4) (5)

 

2/23/2023

    13,624,819       13,624,819       13,529,446       2.6 %
                  13,624,819       13,624,819       13,529,446          

Team Services Group

 

Services: Consumer

 

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor(5) (6)

 

12/20/2027

    5,000,000       4,850,000       4,825,000       0.9 %
       

Senior Secured Second Lien Term Loan LIBOR + 9.000%, 1.000% Floor(5) (6)

 

12/18/2028

    5,000,000       4,850,000       4,900,000       0.9 %
                  10,000,000       9,700,000       9,725,000          

The Octave Music Group, Inc.

 

Media: Diversified & Production

 

Senior Secured First Lien Term Loan LIBOR + 5.250%, 1.000% Floor, 0.75% PIK(5) (6)

 

5/29/2025

    7,793,103       7,727,145       6,780,000       1.3 %
                  7,793,103       7,727,145       6,780,000          

True Religion Apparel, Inc.

 

Retail

 

Senior Secured First Lien Term Loan 10.000%(13)

 

10/27/2022

    179,437       133,654       12,094       %
       

Common Stock - 2,448 shares (10)

                      %
       

Warrants - 1,122 warrants (10)

                      %
                  179,437       133,654       12,094          

Velocity Pooling Vehicle, LLC

 

Automotive

 

Senior Secured First Lien Term Loan LIBOR + 11.000%, 1.000% Floor(4) (5)

 

4/28/2023

    871,784       838,397       871,784       0.2 %
       

Common Units - 4,676 units (5) (10)

          259,937       11,035       %
       

Warrants - 5,591 warrants (5) (10)

 

3/30/2028

          310,802       13,195       %
                  871,784       1,409,136       896,014          

VOYA CLO 2015-2, LTD.

 

Multi-Sector Holdings

 

Subordinated Notes 0.516% effective yield(5) (7) (8) (9)

 

7/19/2028

    10,735,659       5,792,260       3,657,639       0.7 %
                  10,735,659       5,792,260       3,657,639          

VOYA CLO 2016-2, LTD.

 

Multi-Sector Holdings

 

Subordinated Notes 2.808% effective yield(5) (7) (8) (9)

 

7/19/2028

    11,088,290       7,333,317       4,407,595       0.8 %
                  11,088,290       7,333,317       4,407,595          

Walker Edison Furniture Company LLC

 

Consumer Goods: Durable

 

Senior Secured First Lien Term Loan LIBOR + 8.750%, 1.000% Floor(4) (5)

 

9/26/2024

    1,975,000       1,975,000       1,975,000       0.4 %
       

Senior Secured First Lien Term Loan LIBOR + 6.250%, 1.000% Floor(4) (5)

 

9/26/2024

    14,250,000       14,250,000       14,250,000       2.7 %
       

Common Units - 2,000 units (5) (10)

          2,000,000       11,000,000       2.1 %
                  16,225,000       18,225,000       27,225,000          

Watermill-QMC Midco, Inc.

 

Automotive

 

Equity - 1.62% partnership interest (5) (10)

          902,277             %
                        902,277                

Wawona Delaware Holdings, LLC

 

Beverage & Food

 

Senior Secured First Lien Term Loan LIBOR + 4.750%(4) (5)

 

9/11/2026

    49,375       46,869       48,141       %
                  49,375       46,869       48,141          

West Dermatology, LLC

 

Healthcare & Pharmaceuticals

 

Senior Secured First Lien Term Loan LIBOR + 7.500%, 1.000% Floor(5) (6) (12)

 

2/11/2025

    726,672       726,672       613,498       0.1 %
       

Revolving Credit Facility LIBOR + 6.000%, 1.000% Floor, 0.75% PIK(5) (6)

 

2/11/2025

    1,657,459       1,657,459       1,614,033       0.3 %
       

Senior Secured First Lien Term Loan LIBOR + 6.000%, 1.000% Floor, 0.750% PIK(5) (6)

 

2/11/2025

    4,739,503       4,739,503       4,617,698       0.9 %
                  7,123,634       7,123,634       6,845,229          

Wok Holdings Inc.

 

Retail

 

Senior Secured First Lien Term Loan LIBOR + 6.250%, (5) (6)

 

3/1/2026

    49,125       33,080       42,758       %
                  49,125       33,080       42,758          
                                             

Total non-controlled/non-affiliated investments

          $ 521,483,006     $ 472,813,820       89.9 %

 

 

Company(1)(2)

 

Industry

 

Type of Investment

 

Maturity

 

Par Amount

   

Cost

   

Fair Value

   

% of Net Assets(3)

 

1888 Industrial Services, LLC

 

Energy: Oil & Gas

 

Revolving Credit Facility LIBOR + 5.000%, 1.000% Floor(4) (5) (12)

 

9/30/2021

    1,243,924       1,243,924       1,243,924       0.2 %
       

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor(4) (5) (13)

 

9/30/2021

    431,176       403,717       431,176       0.1 %
       

Senior Secured First Lien Term Loan LIBOR + 5.000%, 1.000% Floor, PIK(4) (5) (13)

 

9/30/2021

    3,534,740       3,315,574             %
       

Senior Secured First Lien Term Loan LIBOR + 8.000%, 1.000% Floor, PIK(4) (5) (13)

 

9/30/2021

    9,286,929       6,816,029             %
       

Units - 6,122.765 units (5) (10)

                      %
                  14,496,769       11,779,244       1,675,100          

Black Angus Steakhouses, LLC

 

Hotel, Gaming & Leisure

 

Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor, PIK(5) (6) (13)

 

6/30/2022

    21,573,552       20,457,589       9,060,892       1.7 %
       

Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor(5) (6)

 

6/30/2022

    1,897,321       1,897,321       1,897,321       0.4 %
       

Senior Secured First Lien Term Loan LIBOR + 9.000%, 1.000% Floor(6) (12)

 

6/30/2022

    3,055,556       3,055,556       3,055,556       0.6 %
       

Equity - 44.60% of outstanding equity (5) (10)

                      %
                  26,526,429       25,410,466       14,013,769          

Caddo Investors Holdings 1 LLC

 

Forest Products & Paper

 

Equity - 12.250% LLC Interest (5) (16)

          5,072,149       6,366,372       1.2 %
                        5,072,149       6,366,372          

Charming Charlie LLC

 

Retail

 

Senior Secured First Lien Delayed Draw Term Loan 20.000%(13) (14)

 

5/15/2020

    769,967       769,968       396,225       0.1 %
       

Senior Secured First Lien Term Loan LIBOR + 10.000%, 1.000% Floor(4) (13)

 

4/24/2023

    7,590,773       5,859,128             %
       

Senior Secured First Lien Term Loan 20.000%(13) (14)

 

5/15/2020

    138,517       138,517       71,281       %
       

Common Stock - 34,923,249 shares (10)

                      %
                  8,499,257       6,767,613       467,506          

Dynamic Energy Services International LLC

 

Energy: Oil & Gas

 

Senior Secured First Lien Term Loan 13.500% PIK(4) (5) (13)

 

12/31/2021

    7,049,577       4,449,025       493,470       0.1 %
       

Common Units - 6,500,000 shares (5) (10)

                      %
                  7,049,577       4,449,025       493,470          

Kemmerer Operations, LLC

 

Metals & Mining

 

Senior Secured First Lien Term Loan 15.000% PIK(5)

 

6/21/2023

    2,130,353       2,130,353       2,130,353       0.4 %
       

Senior Secured First Lien Delayed Draw Term Loan 15.000% PIK(5) (12)

 

6/21/2023

    399,366       399,366       399,366       0.1 %
       

Common Units - 6.7797 units (5) (10)

          962,717       962,760       0.2 %
                  2,529,719       3,492,436       3,492,479          

MCM 500 East Pratt Holdings, LLC

 

Banking, Finance, Insurance & Real Estate

 

Equity - 5,000,000 units (8) (10)

          5,000,000       7,350,000       1.4 %
                        5,000,000       7,350,000          

MCM Capital Office Park Holdings LLC

 

Banking, Finance, Insurance & Real Estate

 

Equity - 7,500,000 units (8) (10)

          7,500,000       15,525,000       3.0 %
                        7,500,000       15,525,000          

Sierra Senior Loan Strategy JV I LLC

 

Multi-Sector Holdings

 

Equity - 89.01% ownership of SIC Senior Loan Strategy JV I LLC (8) (16)

          110,050,000       81,788,964       15.6 %
                        110,050,000       81,788,964          
                                             
                                             

Total controlled/affiliated investments(15)

          $ 179,520,933     $ 131,172,660       25.0 %
                                             

Total investments

          $ 701,003,939     $ 603,986,480       114.9 %
                                             

Money Market Fund - 32.5%

                                           

Federated Institutional Prime Obligations Fund

     

Money Market 0.150%(11)

    25,401,625       25,401,625       25,401,625       4.8 %

State Street Institutional Liquid Reserves Fund

     

Money Market 0.010% (11)

    12,683,935       12,686,471       12,685,203       2.4 %

Total money market fund

  $ 38,085,560     $ 38,088,096     $ 38,086,828       7.2 %

 

 

(1)

All of the Company's investments are domiciled in the United States except for AMMC CLO 22, Limited Series 2018-22A, AMMC CLO 23, Limited Series 2020-23A, Apidos CLO XXIV, Series 2016-24A, Dryden 38 Senior Loan Fund, Series 2015-38A, Dryden 43 Senior Loan Fund, Series 2016-43A, Dryden 49 Senior Loan Fund, 2017-49A, Magnetite XIX, Limited, Sound Point CLO XX, Ltd., VOYA CLO 2016-2, LTD., and VOYA CLO 2015-2, LTD., which are all domiciled in the Cayman Islands. All foreign investments were denominated in US Dollars.

(2)

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

(3)

Percentage is based on net assets of $525,740,939 as of December 31, 2020.

(4)

The interest rate on these loans is subject to a base rate plus 3 Month "3M" LIBOR, which at December 31, 2020 was 0.24%. The interest rate is subject to a minimum LIBOR floor.

(5)

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

(6)

The interest rate on these loans is subject to a base rate plus 1 Month "1M" LIBOR, which at December 31, 2020 was 0.14%. The interest rate is subject to a minimum LIBOR floor.

(7)

Securities are exempt from registration under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"). These securities represent a fair value of $51,094,601 or 9.7% of net assets as of December 31, 2020 and are considered restricted securities.

(8)

The investment is not a qualifying asset under Section 55 of the Investment Company Act of 1940, as amended (the "1940 Act"). Non-qualifying assets represent 30.0% of the Company's portfolio at fair value.

 

 

(9)

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

(10)

Security is non-income producing.

(11)

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

(12) The investment has an unfunded commitment as of December 31, 2020. For further details see Note 11. Fair value includes an analysis of the unfunded commitment.

(13)

The investment was on non-accrual status as of December 31, 2020.

(14) The investment is past due as of December 31, 2020.

(15)

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

(16)

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

(17) The interest rate on these loans is subject to a base rate plus 6 Month "6M" LIBOR, which at December 31, 2020 was 0.34%. The interest rate is subject to a minimum LIBOR floor.

 

As of December 31, 2020, the weighted average yield based upon original cost on our portfolio investments was approximately 8.0%, and approximately 69.2% of our portfolio investments were senior secured. As of December 31, 2020,  of our income-bearing investment portfolio bore interest based on floating rates, such as LIBOR or the Alternate Base Rate ("ABR"), and  bore interest at fixed rates. The weighted average yield on income-producing investments is computed based upon the contractual interest payments and principal amortizations due at maturity for each individual investment, which amount is divided by the total cost borne by us on such income-producing investments as of the end of the applicable reporting period. The yield on our portfolio investments is higher than what our investors will realize because it does not reflect our expenses and the sales load paid by investors.

 

 

 

Overview of Portfolio Companies

 

Set forth below is a brief description of the business of our portfolio companies as of December 31, 2020.

 

Portfolio Company

  

Brief Description of Portfolio Company

1888 Industrial Services, LLC

  

1888 Industrial Services, LLC provides field support services to oil and gas independent producers, drilling companies and midstream companies in the Denver-Julesburg Basin, with headquarters in the heart of the Wattenberg region in Greeley, CO. AAR builds, repairs, modifies and maintains oil and gas production equipment, sites, wells and pipelines.

AAAHI Acquisition Corporation

 

AAAHI Acquisition Corporation (“All Aboard”) is a leading provider of passenger transport services to customers throughout the U.S. Sun Belt Region. All Aboard is comprised of six local operating units, the largest of which include: Hotard, All Aboard America!, and Sun Diego.

Alpine SG, LLC

 

Alpine SG, LLC ("Alpine SG") is an aggregator of niche, vertically oriented software businesses. Each acquired business operates independently with oversight from the Alpine SG management team. The platform includes the following companies:.Aerialink, Minute Menu, Bill4Time, and Exym.

American Dental Partners, Inc.

 

American Dental Partners, Inc., founded in 1995 and headquartered in Wakefield, MA, provides dental groups with critical administrative functions, enabling dentists to focus on clinical care.

Amerijet Holdings, Inc.

 

Amerijet Holdings, Inc., headquartered in Fort Lauderdale, FL, is a leading provider of air cargo and logistics to and from the Caribbean, Mexico and Latin America.

AMMC CLO 22, Limited Series 2018-22A

 

AMMC CLO 22, Limited Series 2018-22A is a collateralized loan obligation vehicle invested in a diversified portfolio of primarily senior secured first lien bank loans and, to a limited extent, senior unsecured loans, second lien loans and first lien last, out loans.
AMMC CLO 23, Ltd. Series 2020-23A   AMMC CLO 23, Ltd. Series 2020-23A is a collateralized loan obligation vehicle invested in a diversified portfolio of primarily senior secured first lien bank loans and, to a limited extent, senior unsecured loans, second lien loans and first lien last-out loans.

Answers Finance, LLC

 

Answers Finance, LLC (“Answers”) is headquartered in St. Louis, MO operates three primary businesses, supported by shared services functions, focused on empowering consumers and brands by connecting them with the information to optimize their decision making.

Apidos CLO XXIV, Series 2016-24A

 

Apidos CLO XXIV, Series 2016-24A is a collateralized loan obligation vehicle invested in a diversified portfolio of primarily senior secured first lien bank loans and, to a limited extent, senior unsecured loans, second lien loans and first lien last-out loans.
Arrow International, Inc.   The Company provides charitable gaming products (pull tabs and charitable bingo supplies) to various social & charitable organizations that rely on Arrow’s products to generate income for various philanthropic causes.

Avantor, Inc.

 

Avantor, Inc. is a global provider of products and services to the biopharma, healthcare, education & government, and advanced technologies & applied materials industries.

Aviation Technical Services, Inc.

 

Aviation Technical Services, Inc., founded in 1970 and headquartered in Everett, WA, is a provider of commercial aerospace aftermarket services to the North American maintenance, repair and overhaul market.

Black Angus Steakhouses, LLC

 

Black Angus Steakhouses, LLC, founded in 1964 and headquartered in Los Altos, CA, operates restaurants across six states including California, Arizona, Alaska, New Mexico, Washington, and Hawaii.

BRG Sports, Inc.

 

BRG Sports, Inc., founded in 1929 and headquartered in Des Plaines, Illinois, is a leading designer and developer of football helmets, protective sports equipment, head impact monitoring technologies, apparel and related accessories.

Brook & Whittle Holding Corp.

 

Brook & Whittle Holding Corp., founded in 1996 and based in North Branford, CT, provides printing and packaging solutions in North America. The company produces and supplies pressure sensitive labels and shrink film packaging products for personal care, beverage, food, and household industry sectors.

Caddo Investors Holdings 1 LLC

 

Caddo Investors Holdings 1 LLC (d/b/a TexMark Timber Treasury, L.P.), consists of ~1.1 million acres of high quality and relatively young timber lands located in East Texas.

Callaway Golf Co.

 

Callaway Golf Company is a premium golf equipment and active lifestyle company with a portfolio of global brands, including Callaway Golf, Odyssey, OGIO, TravisMathew and Jack Wolfskin.

Charming Charlie LLC

 

Charming Charlie LLC is a destination retailer of fashion jewelry and accessories. Charming Charlie is known for its fun, friendly, and fabulous brand which permeates its in-store and online experience.
CM Finance SPV LLC   CM Finance SPV LLC is a wholly-owned subsidiary of Investcorp Credit Management BDC, Inc., a specialty finance company that invests primarily in the debt of U.S. middle-market companies.

CPI International, Inc.

 

CPI Holdings, Inc. develops and manufactures microwave, radio frequency, power, and control products for critical communications, defense and medical applications.

CT Technologies Intermediate Holdings, Inc.

 

CT Technologies Intermediate Holdings, Inc., founded in 1976 and located in Alpharetta, GA, is a provider of outsourced release-of-information services, which involves the interaction between healthcare providers, who possess protected medical information, and authorized requestors, who are entitled to receive that information for various commercial, legal, or personal purposes.

DataOnline Corp.

 

DataOnline Corp ("DataOnline") is a global provider of M2M solutions specifically for the monitoring of both fixed and mobile remote industrial assets. Data