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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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(Address of Principal Executive Office)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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None
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N/A
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N/A
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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Page
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Item 1.
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1
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Item 1A.
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19
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Item 1B.
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36
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Item 1C.
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37
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Item 2.
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38
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Item 3.
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38
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Item 4.
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38
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Item 5.
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38
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Item 6.
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40
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Item 7.
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40
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Item 7A.
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51
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Item 8.
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52
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Item 9.
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52
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Item 9A.
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52
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Item 9B.
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53
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Item 9C.
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53
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Item 10.
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53
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Item 11.
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53
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Item 12.
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53
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Item 13.
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53
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Item 14.
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54
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Item 15.
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54
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56 |
• |
the Company’s future operating results;
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• |
increasing interest rates and interest rate volatility, including volatility associated with the decommissioning of the London Interbank Offered Rate (“LIBOR”) and the transition to new reference rates, including the Secured Overnight
Financing Rate (“SOFR”);
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• |
inflation could adversely affect the business, results of operations and financial condition of the Company’s portfolio companies;
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• |
the Company’s business prospects and the prospects of the Company’s prospective portfolio companies;
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• |
the impact of increased competition;
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• |
the Company’s contractual arrangements and relationships with third parties;
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• |
the dependence of the Company’s future success on the general economy and its impact on the industries in which the Company invests;
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• |
the ability of the Company’s prospective portfolio companies to achieve their objectives;
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• |
the relative and absolute performance of the Advisor;
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• |
the ability of the Advisor and its affiliates to retain talented professionals;
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• |
the Company’s expected financings and investments;
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• |
the Company’s ability to pay dividends or make distributions;
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• |
the adequacy of the Company’s cash resources;
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• |
risks associated with possible disruptions in the Company’s operations or the economy generally due to war or terrorism or other disruptive geopolitical events domestically and/or globally;
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• |
the ongoing conflict in Ukraine and Russia, including sanctions and market volatility related to such conflict, may adversely impact the industries and portfolio companies in which the Company invests;
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• |
the impact of future acquisitions and divestitures;
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• |
the Company’s regulatory structure as a business development company (“BDC”) and tax status as a regulated investment company (a “RIC”); and
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• |
future changes in laws or regulations and conditions in the Company’s operating areas.
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Item 1. |
Business
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(a) |
General Development of Business
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(b) |
Description of Business
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• |
A diversified portfolio of credit investments with equity upside to SMBs, generally not owned by large private equity firms.
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• |
Current income distributions.
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• |
Capital protection through defensive structures with affirmative, negative and financial maintenance covenants and active portfolio management.
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• |
Targeted diversification of assets by vintage, industry and geography through direct originations and acquisitions of loan portfolios.
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• |
Generally low volatility and low correlation to public market indices.
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(i)
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the Company will not acquire any assets other than “qualifying assets” as defined in the 1940 Act (and summarized in “Regulation as a Business Development Company”)
unless, at the time of and after giving effect to such acquisition, at least 70% of the Company’s total assets are qualifying assets;
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(ii)
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the Company will offer, and must provide upon request, significant managerial assistance to its portfolio companies that constitute qualifying assets (as described in greater detail in “Regulation as a Business Development Company” below);
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(iii)
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the Company generally must have at least 150% asset coverage for its debt after incurring any new indebtedness; and
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(iv)
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except for shares of registered money market funds, the Company generally cannot acquire more than 3% of the voting stock of any registered investment company or BDC (either, an “Investment Company”),
invest more than 5% of the value of its total assets in the securities of one Investment Company or invest more than 10% of the value of its total assets in the securities of Investment Companies in the aggregate. Subject to certain
exemptive rules, including Rule 12d1-4, the Company may, subject to certain conditions, invest in other Investment Companies in excess of such thresholds.
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(i) |
Income Incentive Fee
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• |
no Income Incentive Fee in any calendar quarter in which the Company’s Pre- Incentive Fee Net Investment Income does not exceed the Hurdle Amount;
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• |
100% of that portion of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Amount but is less than or equal to a “Catch-up Amount.” The Catch-up Amount is equal to the product of (i) 2.1212% per
quarter (8.4848% annualized) and (ii) the Company’s net assets at the end of the immediately preceding quarter. The Catch-up Amount is meant to provide the Advisor with approximately 17.5% of the Company’s Pre- Incentive Fee Net Investment
Income as if a hurdle rate did not apply; and
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• |
17.5% of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the Catch-up Amount. This reflects that once the Hurdle Amount and the Catch-up Amount are achieved, 17.5% of all Pre-Incentive Fee Net Investment
Income thereafter is allocated to the Advisor.
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(ii)
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Capital Gains Incentive Fee
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(*) |
The hypothetical amount of pre-incentive fee net investment income shown is based on a percentage of total net assets.
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(1) |
Represents 7.0% annualized hurdle rate.
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(2)
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The “catch-up” provision is intended to provide our Advisor with an incentive fee of approximately 17.5% on all of our pre- incentive fee net investment income when our net investment income exceeds 2.1212%
in any calendar quarter.
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• |
whether any Stockholders have requested to tender shares to the Company;
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• |
the liquidity of the Company’s assets (including fees and costs associated with redeeming or otherwise withdrawing from investment funds);
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• |
the investment plans and working capital and reserve requirements of the Company;
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• |
the relative economies of scale of the tenders with respect to the size of the Company;
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• |
the history of the Company in repurchasing shares;
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• |
the availability of information as to the value of the Company’s shares in investment funds;
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• |
the existing conditions of the securities markets and the economy generally, as well as political, national or international developments or current affairs;
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• |
any anticipated tax consequences to the Company of any proposed repurchases of shares; and
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• |
the recommendations of the Advisor.
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• |
Each repurchase offer will generally commence prior to the applicable repurchase date or as disclosed in the Company’s tender offer. A Stockholder choosing to tender shares for repurchase must do so by the applicable deadline, which
generally will be five days before the applicable quarter end repurchase date. Stockholders will be informed in each repurchase offer that tendered Shares will be valued at the net asset value per share calculated as of the applicable
valuation date. The valuation dates are generally expected to be March 31, June 30, September 30 or December 31. Tenders will be revocable upon written notice to the Company until the end of the Notice Period. Payments will be made to
Stockholders within 60 days of the end of the Notice Period.
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• |
Promptly after the Notice Period, the Company will give to each Stockholder whose shares have been accepted for repurchase a promissory note (the “Promissory Note”) entitling the Stockholder to be paid an amount equal to the value,
determined as of the valuation date, of the repurchased shares.
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• |
The Promissory Note will be non-interest bearing and non-transferable.
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• |
Securities purchased in transactions not involving any public offering from the issuer of such securities, which issuer (subject to certain limited exceptions) is an “eligible portfolio company” (as defined in the 1940 Act), or from any
person who is, or has been during the preceding 13 months, an affiliated person of an eligible portfolio company, or from any other person, subject to such rules as may be prescribed by the SEC. An eligible portfolio company is defined in
the 1940 Act as any issuer which:
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• |
is organized under the laws of, and has its principal place of business in, the United States;
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• |
is not an investment company (other than a small business investment company wholly owned by the Company) or a company that would be an investment company but for certain exclusions under the 1940 Act; and
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• |
satisfies any of the following:
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• |
has an equity capitalization of less than $250 million or does not have any class of securities listed on a national securities exchange;
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• |
is controlled by a BDC or a group of companies including a BDC, the BDC actually exercises a controlling influence over the management or policies of the eligible portfolio company, and, as a result thereof, the BDC has an affiliated
person who is a director of the eligible portfolio company; or
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• |
is a small and solvent company having total assets of not more than $4 million and capital and surplus of not less than $2 million.
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• |
Securities of any eligible portfolio company that the Company controls.
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• |
Securities purchased in a private transaction from a U.S. issuer that is not an investment company or from an affiliated person of the issuer, or in transactions incident thereto, if the issuer is in bankruptcy and subject to
reorganization or if the issuer, immediately prior to the purchase of its securities was unable to meet its obligations as they came due without material assistance other than conventional lending or financing arrangements.
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• |
Securities of an eligible portfolio company purchased from any person in a private transaction if there is no ready market for such securities and the Company already owns 60% of the outstanding equity of the eligible portfolio company.
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• |
Securities received in exchange for or distributed on or with respect to securities described above, or pursuant to the exercise of options, warrants or rights relating to such securities.
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• |
Cash, cash equivalents, “U.S. Government securities” (as defined in the 1940 Act) or high-quality debt securities maturing in one year or less from the time of investment.
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• |
pursuant to Rule 13a-14 of the Exchange Act, the President and Chief Financial Officer must certify the accuracy of the consolidated financial statements contained in the Company’s periodic reports;
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• |
pursuant to Item 307 of Regulation S-K, the Company’s periodic reports must disclose the Company’s conclusions about the effectiveness of the Company’s disclosure controls and procedures;
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• |
pursuant to Rule 13a-15 of the Exchange Act, the Company’s management must prepare an annual report regarding its assessment of the Company’s internal control over financial reporting and (once the Company ceases to be an emerging growth
company under the JOBS Act or, if later, for the year following the Company’s first annual report required to be filed with the SEC) must obtain an audit of the effectiveness of internal control over financial reporting performed by the
Company’s independent registered public accounting firm; and
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• |
pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the Exchange Act, the Company’s periodic reports must disclose whether there were significant changes in the Company’s internal controls over financial reporting or in other
factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
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(a)
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at all times during each taxable year maintain its election under the 1940 Act to be treated as a BDC;
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(b)
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derive in each taxable year at least 90% of its gross income from dividends, interest, gains from the sale or other disposition of stock or securities and other specified categories of investment income;
and
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(c)
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diversify its holdings so that, subject to certain exceptions and cure periods, at the end of each quarter of its taxable year,
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(i)
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at least 50% of the value of its total assets is represented by cash and cash items, U.S. government securities, securities of other RICs and “other securities,” provided that such “other securities” shall
not include any amount of any one issuer, if the Company’s holdings of such issuer are greater in value than 5% of its total assets or greater than 10% of the outstanding voting securities of such issuer, and
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(ii)
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no more than 25% of the value of its assets may be invested in securities of any one issuer, the securities of any two or more issuers that are controlled by the Company and are engaged in the same or
similar or related trades or business (excluding U.S. government securities and securities of other RICs), or the securities of one or more “qualified publicly traded partnerships.”
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(1)
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at least 98% of its ordinary income (not taking into account any capital gains or losses) for the calendar year;
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(2) |
at least 98.2% of its capital gains in excess of its capital losses (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year; and
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(3)
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any undistributed amounts from previous years on which the Company paid no U.S. federal income tax.
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(1) |
The Company may make investments that are subject to tax rules that require it to include amounts in income before cash corresponding to that income is received, or that defer or limit the Company’s ability to claim the benefit of
deductions or losses. For example, if the Company holds securities issued with original issue discount, such discount will be included in income in the taxable year of accrual and before any corresponding cash payments are received.
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(2)
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In cases where the Company’s taxable income exceeds its available cash flow, the Company will need to fund distributions with the proceeds of sale of securities or with borrowed money, and will raise funds
for this purpose opportunistically over the course of the year.
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Item 1A. |
Risk Factors
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• |
We have a limited operating history.
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• |
Shares of the Company’s Common Stock are an illiquid investment.
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• |
Investments in private and middle-market companies involves a number of significant risks.
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• |
We are dependent upon Star Mountain’s access to its investment professionals for our success.
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• |
Economic recessions or downturns could impair the portfolio companies, and defaults by the portfolio companies will harm the Company’s operating results.
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• |
Increasing interest rates and interest rate volatility, including volatility associated with the decommissioning of London Interbank Offered Rate (“LIBOR”) and the transition to new reference rates may adversely affect the value of the
financial obligations to be held or issued by us.
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• |
Inflation could adversely affect the business, results of operations and financial condition of the Company’s portfolio companies.
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• |
Our investment portfolio is and will continue to be recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is and will continue to be uncertainty as to the value of our portfolio investments.
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• |
We operate in a highly competitive market for investment opportunities, which could reduce returns and result in losses.
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• |
There are potential conflicts of interest, including the management of other investment funds and accounts by the Advisor and Star Mountain, which could impact our investment returns.
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• |
The fee structure under the Advisory Agreement may induce the Advisor to pursue speculative investments and incur leverage, which may not be in the best interests of our stockholders.
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• |
Regulations governing our operation as a BDC will affect our ability to, and the way in which we, raise additional capital.
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• |
Our financing agreements contain various covenants, which, if not complied with, could accelerate our repayment obligations thereunder, thereby materially and adversely affecting our liquidity, financial condition, results of operations
and ability to pay distributions.
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• |
The information and technology systems of the Company, the Adviser and their respective service providers may be vulnerable to cyber-attacks.
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• |
Stockholders may be subject to significant adverse consequences in the event such a Stockholder defaults on its capital commitment to the Company.
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• |
There is no public market for shares of our common stock, and we do not expect there to be a market for our shares.
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• |
The ongoing conflict in Ukraine and Russia, including sanctions and market volatility related to such conflict, may adversely impact the industries and portfolio companies in which the Company invests.
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• |
The higher yields and interest rates on PIK securities reflects the payment deferral and increased credit risk associated with such instruments and that such investments may represent a significantly higher credit risk than coupon loans.
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• |
PIK securities may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral.
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• |
PIK interest has the effect of generating investment income and increasing the incentive fees payable at a compounding rate. In addition, the deferral of PIK interest also reduces the loan-to-value ratio at a compounding rate.
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• |
PIK securities create the risk that incentive fees will be paid to the Advisor based on non-cash accruals that ultimately may not be realized, but the Advisor will be under no obligation to reimburse the Company for these fees.
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• |
increase or maintain in whole or in part the Company’s equity ownership percentage;
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• |
exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or
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• |
attempt to preserve or enhance the value of the Company’s investment.
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Item 1B. |
Unresolved Staff Comments
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Item 1C. |
Cybersecurity
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Item 2. |
Properties
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Item 3. |
Legal Proceedings
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Item 4. |
Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
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• |
Securities for which no such market prices are available or reliable will be preliminarily valued at such value as the Advisor may reasonably determine, which may include third-party valuations;
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• |
The Audit Committee of the Board will then review these preliminary valuations;
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• |
At least once annually, the valuation for each investment that constitutes a material portion of the Company’s portfolio and that does not have a readily available market quotation will be reviewed by an independent valuation firm; and
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• |
The Board will then discuss valuations and determine the fair value of each investment in the Company’s portfolio in good faith, based on the input of the Advisor, the respective independent valuation firms and the Audit Committee.
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Total Number of
Shares Purchased
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Purchase Price
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Total Number of Shares Purchased as Part
of Publicly Announced Plans or Programs
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||||||||||
January 1, 2023 - January 31, 2023*
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108,930.54
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$
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25.21
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108,930.54
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||||||||
February 1, 2023 - February 28, 2023
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-
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-
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-
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|||||||||
March 1, 2023 - March 31, 2023
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164,813.65
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25.80
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164,813.65
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|||||||||
April 1, 2023 - April 30, 2023
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-
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-
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-
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|||||||||
May 1, 2023 - May 31, 2023
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180,212.21
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26.06
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180,212.21
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|||||||||
June 1, 2023 - June 30, 2023
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-
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-
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-
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|||||||||
July 1, 2023 - July 31, 2023
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-
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-
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-
|
|||||||||
August 1, 2023 - August 31, 2023
|
186,750.79
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26.01
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186,750.79
|
|||||||||
September 1, 2023 - September 30, 2023
|
-
|
-
|
-
|
|||||||||
October 1, 2023 - October 31, 2023
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-
|
-
|
-
|
|||||||||
November 1, 2023 - November 30, 2023
|
189,086.61
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24.78
|
189,086.61
|
|||||||||
December 1, 2023 - December 31, 2023
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-
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-
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-
|
|||||||||
Total
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829,793.80
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829,793.80
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Total Number of
Shares Purchased
|
Purchase Price
|
Total Number of Shares Purchased as Part
of Publicly Announced Plans or Programs
|
||||||||||
October 1, 2022 - October 31, 2022
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-
|
-
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-
|
|||||||||
November 1, 2022 - November 30, 2022
|
99,486.14
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$
|
25.78
|
99,486.14
|
||||||||
December 1, 2022 - December 31, 2022
|
-
|
-
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-
|
|||||||||
Total
|
99,486.14
|
99,486.14
|
December 31, 2023
|
December 31, 2022
|
|||||||||||||||
Fair Value:
|
||||||||||||||||
First Lien Senior Secured Loan
|
$
|
319,229,009
|
84.70
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%
|
$
|
260,982,122
|
86.10
|
%
|
||||||||
Second Lien Senior Secured Loan
|
6,059,372
|
1.60
|
6,250,270
|
2.10
|
||||||||||||
Senior Unsecured Notes
|
1,384,446
|
0.40
|
-
|
-
|
||||||||||||
Preferred Equity Securities
|
41,804,395
|
11.10
|
27,088,732
|
8.90
|
||||||||||||
Warrants and Other Equity Securities
|
5,706,423
|
1.50
|
5,829,429
|
1.90
|
||||||||||||
Fund Investments
|
2,809,327
|
0.70
|
3,045,128
|
1.00
|
||||||||||||
Total
|
$
|
376,992,972
|
100.00
|
%
|
$
|
303,195,681
|
100.00
|
%
|
December 31, 2023
|
December 31, 2022
|
|||||||||||||||
Fair Value:
|
||||||||||||||||
Aerospace & Defense
|
$
|
7,394,163
|
2.00
|
%
|
$
|
5,877,696
|
1.80
|
%
|
||||||||
Chemicals
|
14,538,407
|
3.90
|
-
|
-
|
||||||||||||
Commercial Services & Supplies
|
11,282,346
|
2.90
|
10,629,012
|
3.50
|
||||||||||||
Construction & Engineering
|
55,540,524
|
14.70
|
36,895,770
|
12.20
|
||||||||||||
Consumer Finance
|
3,617,879
|
1.00
|
3,836,822
|
1.30
|
||||||||||||
Distributors
|
13,807,774
|
3.70
|
14,383,702
|
4.70
|
||||||||||||
Diversified Consumer Services
|
15,182,176
|
4.00
|
14,502,291
|
4.80
|
||||||||||||
Diversified Financials
|
2,809,327
|
0.70
|
3,045,128
|
1.00
|
||||||||||||
Diversified Telecommunication Services
|
30,834,843
|
8.20
|
17,241,546
|
5.70
|
||||||||||||
Electrical Equipment
|
8,320,050
|
2.20
|
9,836,785
|
3.20
|
||||||||||||
Entertainment
|
18,478,875
|
4.90
|
19,165,339
|
6.30
|
||||||||||||
Food Products
|
11,682,654
|
3.10
|
6,953,360
|
2.30
|
||||||||||||
Healthcare Providers & Services
|
43,324,687
|
11.50
|
15,185,883
|
5.00
|
||||||||||||
Hotels, Restaurants & Leisure
|
4,909,528
|
1.30
|
4,919,446
|
1.60
|
||||||||||||
Household Durables
|
2,341,518
|
0.60
|
2,586,687
|
0.90
|
||||||||||||
Household Products
|
4,465,076
|
1.20
|
4,073,972
|
1.30
|
||||||||||||
IT Services
|
18,406,891
|
4.90
|
14,001,990
|
4.60
|
||||||||||||
Leisure Products
|
3,852,760
|
1.00
|
4,793,707
|
1.60
|
||||||||||||
Machinery
|
4,687,302
|
1.20
|
6,635,785
|
2.20
|
||||||||||||
Media
|
25,870,278
|
6.90
|
25,659,236
|
8.50
|
||||||||||||
Personal Products
|
4,457,979
|
1.20
|
4,335,304
|
1.40
|
||||||||||||
Professional Services
|
36,611,515
|
9.70
|
34,425,860
|
11.40
|
||||||||||||
Software
|
7,590,857
|
2.00
|
5,961,468
|
2.00
|
||||||||||||
Specialty Retail
|
6,367,578
|
1.70
|
6,318,303
|
2.10
|
||||||||||||
Trading Companies & Distributors
|
10,144,017
|
2.70
|
17,177,873
|
5.70
|
||||||||||||
Transportation Infrastructure
|
10,473,968
|
2.80
|
14,752,716
|
4.90
|
||||||||||||
Total
|
$
|
376,992,972
|
100.00
|
%
|
$
|
303,195,681
|
100.00
|
%
|
Investment Performance
Risk Rating
|
Summary Description
|
|
Grade 1
|
Investment is performing above expectations. Full return of principal, interest and dividend income is expected.
|
|
Grade 2
|
Investment is performing in-line with expectations. Risk factors remain neutral or favorable compared with initial underwriting. All investments are given a “2” at the time of origination
|
|
Grade 3
|
Investment is performing below expectations. Capital impairment or payment delinquency is not anticipated. The investment may also be out of compliance with certain financial covenants.
|
|
Grade 4
|
Investment is performing below expectations. Quantitative or qualitative risks have increased materially. Delinquency of interest and / or dividend payments is anticipated. No loss of principal anticipated.
|
|
Grade 5
|
Investment is performing substantially below expectations. It is anticipated that the Company will not recoup its initial cost basis and may realize a loss upon exit. Most or all of the debt covenants are out
of compliance. Amortization, interest and / or dividend payments are substantially delinquent.
|
December 31, 2023
|
December 31, 2022
|
||||||||||||||||
Investment Performance Risk Rating
|
Investments at
Fair Value
|
Percentage of
Total Investments
|
Investments at
Fair Value
|
Percentage of
Total Investments
|
|||||||||||||
1
|
$
|
25,158,510
|
6.70
|
%
|
$
|
24,011,980
|
7.90
|
%
|
|||||||||
2
|
255,233,299
|
67.70
|
230,159,492
|
75.90
|
|||||||||||||
3
|
41,858,365
|
11.10
|
39,811,785
|
13.10
|
|||||||||||||
4
|
52,401,280
|
13.90
|
6,625,737
|
2.20
|
|||||||||||||
5
|
2,341,518
|
0.60
|
2,586,687
|
0.90
|
|||||||||||||
Total
|
$
|
376,992,972
|
100.00
|
%
|
$
|
303,195,681
|
100.00
|
%
|
For the year ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
For the period
May 14, 2021* to
December 31, 2021
|
||||||||||
Total investment income
|
$
|
47,362,351
|
$
|
21,975,603
|
$
|
4,499,992
|
||||||
Total expenses
|
26,854,649
|
13,673,237
|
2,493,580
|
|||||||||
Net investment income before fee waivers
|
20,507,702
|
8,302,366
|
2,006,412
|
|||||||||
Management fee waiver
|
633,649
|
279,725
|
-
|
|||||||||
Incentive fee waiver
|
1,034,565
|
2,185,968
|
-
|
|||||||||
Net investment income after fee waivers
|
22,175,916
|
10,768,059
|
2,006,412
|
|||||||||
Net realized gain (loss) on investments
|
45,283
|
43,607
|
240,492
|
|||||||||
Net change in unrealized gain (loss) on investments
|
(3,449,646
|
)
|
(817,733
|
)
|
67,642
|
|||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
18,771,553
|
$
|
9,993,933
|
$
|
2,314,546
|
For the year ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
For the period
May 14, 2021* to
December 31, 2021
|
||||||||||
Non-controlled/non-affiliate investment income
|
||||||||||||
Interest income
|
$
|
42,194,403
|
$
|
20,937,595
|
$
|
4,091,514
|
||||||
PIK interest income
|
3,099,419
|
495,426
|
249,427
|
|||||||||
Dividend income
|
1,498,864
|
181,458
|
94,628
|
|||||||||
Other income
|
159,915
|
257,368
|
-
|
|||||||||
Controlled/affiliate investment income
|
||||||||||||
Interest income
|
253,540
|
103,756
|
64,423
|
|||||||||
PIK interest income
|
90,372
|
-
|
-
|
|||||||||
Dividend income
|
47,811
|
-
|
-
|
|||||||||
Other income
|
18,027
|
-
|
-
|
|||||||||
Total investment income
|
$
|
47,362,351
|
$
|
21,975,603
|
$
|
4,499,992
|
For the year ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
For the period
May 14, 2021* to
December 31, 2021
|
||||||||||
Interest and other financing fees
|
$
|
14,194,984
|
$
|
5,798,315
|
$
|
325,901
|
||||||
Management fees (Note 6)
|
5,183,339
|
3,467,163
|
757,520
|
|||||||||
Incentive fees (Note 6)
|
4,996,040
|
1,960,085
|
225,883
|
|||||||||
Professional fees
|
1,525,307
|
1,356,001
|
387,308
|
|||||||||
General and administrative fees
|
535,638
|
609,391
|
206,855
|
|||||||||
Legal expenses
|
328,091
|
393,131
|
266,709
|
|||||||||
Director expenses
|
91,250
|
89,151
|
50,849
|
|||||||||
Organizational expenses
|
-
|
-
|
272,555
|
|||||||||
Total expenses before fee waiver
|
26,854,649
|
13,673,237
|
2,493,580
|
|||||||||
Management fee waiver
|
(633,649
|
)
|
(279,725
|
)
|
-
|
|||||||
Incentive fee waiver
|
(1,034,565
|
)
|
(2,185,968
|
)
|
-
|
|||||||
Total expenses after fee waiver
|
$
|
25,186,435
|
$
|
11,207,544
|
$
|
2,493,580
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
For the year ended December 31, 2023:
|
||||||||||||
March 21, 2023
|
$
|
25.31
|
803,600
|
$
|
20,339,128
|
|||||||
May 15, 2023
|
25.30
|
343,695
|
8,695,500
|
|||||||||
August 28, 2023
|
25.49
|
179,590
|
4,577,750
|
|||||||||
December 8, 2023
|
25.41
|
198,169
|
5,035,468
|
|||||||||
1,525,054
|
$
|
38,647,846
|
||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
January 26, 2023
|
25.34
|
86,086
|
2,181,430
|
|||||||||
May 5, 2023
|
25.38
|
98,060
|
2,488,754
|
|||||||||
July 31, 2023
|
25.56
|
100,593
|
2,571,168
|
|||||||||
November 10, 2023
|
25.55
|
114,935
|
2,936,599
|
|||||||||
399,674
|
$
|
10,177,951
|
||||||||||
Total
|
1,924,728
|
$
|
48,825,797
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
For the year ended December 31, 2022:
|
||||||||||||
March 25, 2022
|
$
|
25.59
|
708,935
|
$
|
18,142,000
|
|||||||
April 21, 2022
|
25.73
|
446,880
|
11,448,234
|
|||||||||
September 12, 2022
|
25.58
|
441,121
|
11,283,885
|
|||||||||
November 22, 2022
|
25.25
|
2,186,113
|
55,199,312
|
|||||||||
3,783,049
|
$
|
96,073,431
|
||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
January 14, 2022
|
25.32
|
24,306
|
615,437
|
|||||||||
May 20, 2022
|
25.64
|
21,875
|
560,883
|
|||||||||
July 29, 2022
|
25.51
|
36,141
|
921,955
|
|||||||||
November 4, 2022
|
25.34
|
49,212
|
1,247,052
|
|||||||||
131,534
|
3,345,327
|
|||||||||||
Total
|
3,914,583
|
$
|
99,418,758
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
Period from May 14, 2021* to December 31, 2021:
|
||||||||||||
May 14, 2021
|
$
|
25.00
|
1,688,601
|
$
|
42,215,029
|
|||||||
June 11, 2021
|
25.19
|
629,240
|
15,851,000
|
|||||||||
August 17, 2021
|
25.10
|
244,608
|
6,139,651
|
|||||||||
November 4, 2021
|
25.88
|
740,397
|
19,161,474
|
|||||||||
3,302,846
|
$
|
83,367,154
|
||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
August 20, 2021
|
25.07
|
11,997
|
300,751
|
|||||||||
November 19, 2021
|
25.78
|
5,631
|
145,176
|
|||||||||
17,628
|
445,927
|
|||||||||||
Total
|
3,320,474
|
$
|
83,813,081
|
•
|
Date of formation of the Company.
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per
Share
|
Amount Paid in
Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
For the year ended December 31, 2023
|
||||||||||||||||||||
April 3, 2023
|
April 3, 2023
|
May 5, 2023
|
$
|
0.69
|
$
|
2,485,103
|
$
|
2,488,754
|
$
|
4,973,857
|
||||||||||
July 3, 2023
|
July 3, 2023
|
July 31, 2023
|
0.69
|
2,583,154
|
2,571,168
|
5,154,322
|
||||||||||||||
October 4, 2023
|
October 4, 2023
|
November 10, 2023
|
0.78
|
2,962,903
|
2,936,599
|
5,899,502
|
||||||||||||||
December 29, 2023
|
December 31, 2023
|
January 31, 2024
|
0.79
|
3,008,410
|
3,064,701
|
6,073,111
|
||||||||||||||
Total
|
$
|
2.95
|
$
|
11,039,570
|
$
|
11,061,222
|
$
|
22,100,792
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per
Share
|
Amount Paid in
Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
For the year ended December 31, 2022:
|
|
|||||||||||||||||||
May 18, 2022
|
May 18, 2022
|
May 20, 2022
|
$
|
0.30
|
$
|
626,388
|
$
|
560,883
|
$
|
1,187,271
|
||||||||||
June 30, 2022
|
June 30, 2022
|
July 29, 2022
|
0.57
|
1,346,329
|
921,955
|
2,268,284
|
||||||||||||||
October 4, 2022
|
October 4, 2022
|
November 4, 2022
|
0.66
|
1,628,714
|
1,247,052
|
2,875,766
|
||||||||||||||
December 31, 2022
|
December 31, 2022
|
January 26, 2023
|
0.66
|
2,169,650
|
2,181,430
|
4,351,080
|
||||||||||||||
Total
|
$
|
2.19
|
$
|
5,771,081
|
$
|
4,911,320
|
$
|
10,682,401
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per
Share
|
Amount Paid in
Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
Period from May 14, 2021* to December 31, 2021:
|
|
|||||||||||||||||||
August 10, 2021
|
August 10, 2021
|
August 20, 2021
|
$
|
0.13
|
$
|
568
|
$
|
300,751
|
$
|
301,319
|
||||||||||
November 10, 2021
|
November 10, 2021
|
November 19, 2021
|
0.18
|
318,225
|
145,175
|
463,400
|
||||||||||||||
December 31, 2021
|
December 31, 2021
|
January 14, 2022
|
0.46
|
662,190
|
615,437
|
1,277,627
|
||||||||||||||
Total
|
|
|
$
|
0.77
|
$
|
980,983
|
$
|
1,061,363
|
$
|
2,042,346
|
As of December 31, 2023
|
As of December 31, 2022
|
|||||||
Secured Credit Facility Lender
|
Commitment
|
Commitment
|
||||||
Webster Bank
|
$
|
67,500,000
|
$
|
67,500,000
|
||||
Blue Ridge Bank
|
25,000,000
|
25,000,000
|
||||||
First Foundation Bank
|
20,000,000
|
20,000,000
|
||||||
Mitsubishi HC Capital America, Inc.
|
20,000,000
|
20,000,000
|
||||||
Woodforest National Bank
|
20,000,000
|
20,000,000
|
||||||
Forbright Bank
|
17,500,000
|
17,500,000
|
||||||
Apple Bank
|
15,000,000
|
15,000,000
|
||||||
Peapack-Gladstone Bank
|
15,000,000
|
15,000,000
|
||||||
Total Commitment
|
$
|
200,000,000
|
$
|
200,000,000
|
For the year ended
|
||||||||||||
December 31, 2023
|
December 31, 2022
|
For the period
May 14, 2021* to December 31, 2021 |
||||||||||
Interest expense - Secured Credit Facility
|
$
|
12,108,069
|
$
|
4,222,007
|
$
|
129,638
|
||||||
Interest expense - Revolving Credit Line
|
38,624
|
433,472
|
-
|
|||||||||
Unused commitment fees
|
278,783
|
277,339
|
149,153
|
|||||||||
Amortization of deferred financing costs
|
627,611
|
440,322
|
37,131
|
|||||||||
Utilization fees
|
1,141,897
|
425,175
|
9,979
|
|||||||||
Total interest and other debt financing fees
|
$
|
14,194,984
|
$
|
5,798,315
|
$
|
325,901
|
• |
the quarterly valuation process commences with each portfolio company or investment being initially evaluated by the investment professionals of the Advisor responsible for the monitoring of the portfolio investment;
|
• |
the Advisor’s Valuation Committee reviews the valuations provided by the independent third-party valuation firm and develops a valuation recommendation. Valuation recommendations are presented to the audit committee of the Board;
|
• |
the audit committee of the Board reviews valuation recommendations of the Advisor incorporating any adjustments or further supplements by the Advisor to the valuations; and
|
• |
the Board discusses these valuations and determines the fair value of each investment in the portfolio in good faith, based on the input of the Advisor, the independent valuation firm, and the audit committee.
|
• |
Level 1 - Quoted prices are available in active markets/exchanges for identical investments as of the reporting date.
|
• |
Level 2 - Pricing inputs are observable inputs including, but not limited to, prices quoted for similar assets or liabilities in active markets/exchanges or prices quoted for identical or similar assets or liabilities in markets that
are not active, and fair value is determined through the use of models or other valuation methodologies.
|
• |
Level 3 - Pricing inputs are unobservable for the investment and include activities where there is little, if any, market activity for the investment. The inputs into determination of fair value require significant management
judgment and estimation.
|
Change in Interest Rates
|
Increase (decrease) in
interest income
|
Increase (decrease) in
interest expense
|
Net increase (decrease) in
net investment income
|
|||||||||
Down 100 basis points
|
$
|
(2,900,277
|
)
|
$
|
(1,765,000
|
)
|
$
|
(1,135,277
|
)
|
|||
Down 50 basis points
|
(1,462,395
|
)
|
(882,500
|
)
|
(579,895
|
)
|
||||||
Down 25 basis points
|
(737,433
|
)
|
(441,250
|
)
|
(296,183
|
)
|
||||||
Up 25 basis points
|
749,141
|
441,250
|
307,891
|
|||||||||
Up 50 basis points
|
1,498,281
|
882,500
|
615,781
|
|||||||||
Up 100 basis points
|
2,996,562
|
1,765,000
|
1,231,562
|
|||||||||
Up 200 basis points
|
5,993,125
|
3,530,000
|
2,463,125
|
|||||||||
Up 300 basis points
|
8,989,687
|
5,295,000
|
3,694,687
|
ITEM 8. |
Consolidated Financial Statements and Supplementary Data
|
ITEM 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9A. |
Controls and Procedures
|
ITEM 9B. |
Other Information
|
ITEM 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
ITEM 11. |
Executive Compensation
|
ITEM 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
ITEM 14. |
Principal Accountant Fees and Services
|
ITEM 15. |
Exhibits and Financial Statement Schedules
|
Certificate of Incorporation (1)
|
||
Certificate of Conversion to a Corporation (2)
|
||
Bylaws (3)
|
||
Description of Securities *
|
||
Form of Subscription Agreement (4)
|
||
Investment Advisory Agreement between Star Mountain Credit Opportunities Fund, LP and Star Mountain Fund Management, LLC (5)
|
||
Amended and Restated Investment Advisory Agreement by and between Star Mountain Lower Middle-Market Capital Corp. and Star Mountain Fund Management, LLC, dated June 14, 2023. (6)
|
||
Administration Agreement between Star Mountain Credit Opportunities Fund, LP, and Star Mountain Fund Management LLC (7)
|
||
Loan and Servicing Agreement, dated as of July 2, 2021, by and among Star Mountain Lower Middle-Market Capital Corp., as borrower, the lenders party thereto and Sterling National Bank, in its capacities as collateral agent and
administrative agent (8)
|
||
First Amendment to Revolving Credit Agreement, dated as of November 10, 2021, by and among the Company, as Borrower, and Sterling National Bank, as Administrative Agent and the Letter of Credit Issuer, and the Lenders party
thereto. (9)
|
||
Second Amendment to Revolving Credit Agreement, dated as of January 12, 2022, by and among the Company, as Borrower, and Sterling National Bank, as Administrative Agent and the Letter of Credit Issuer, and the Lenders party
thereto. (10)
|
||
Amendment to Loan and Servicing Agreement and Joinder Agreement, dated as of May 6, 2022, by and among the Company, as Borrower, and Webster Bank, N.A. (f/k/a Sterling National Bank), as Administrative Agent and the Letter of
Credit Issuer, and the Lenders party thereto (11)
|
||
Loan and Security Agreement, dated as of June 22, 2022, by and among the Company, as Borrower, and East West Bank, as Lender (12)
|
||
Second Amendment to Loan and Servicing Agreement, dated as of September 16, 2022, by and among the Company, as Borrower, and Webster Bank, N.A. (f/k/a Sterling National Bank), as Collateral Agent, Administrative Agent, Swing
Lender, and Sole Lead Arranger, and the Lenders party thereto (13)
|
||
Code of Ethics (14)
|
||
List of Subsidiaries **
|
||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
|
||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
|
||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
|
||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
|
||
101.INS
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Date File because XBRL tags are embedded within the Inline XBRL document*
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document*
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document*
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document*
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document*
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document*
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)*
|
(1)
|
Previously filed as Exhibit 3.1 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(2)
|
Previously filed as Exhibit 10.4 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(3)
|
Previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(4)
|
Previously filed as Exhibit 10.3 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(5)
|
Previously filed as Exhibit 10.1 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(6)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 16, 2023.
|
|
(7)
|
Previously filed as Exhibit 10.2 to the Company’s Registration Statement on Form 10 (File No. 000-56259), filed with the SEC on May 7, 2021.
|
|
(8)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 15, 2021.
|
|
(9)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 12, 2021.
|
|
(10)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on January 14, 2022.
|
|
(11)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on May 12, 2022.
|
|
(12) |
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 23, 2022.
|
|
(13)
|
Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on September 20, 2022.
|
|
(14)
|
Previously filed as Exhibit 14.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2022.
|
|
*
|
Filed herewith
|
|
**
|
Furnished herewith
|
Page
|
|
Report of Independent Registered Public Accounting Firm (PCAOB ID #)
|
F-2
|
Financial Statements:
|
|
Consolidated Statements of Assets and Liabilities as of December 31, 2023 and December 31, 2022
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 and for the period from May 14, 2021 to December 31, 2021
|
F-4
|
Consolidated Statements of Changes in Net Assets for the years ended December 31, 2023 and 2022 and for the period from May 14, 2021 to December 31, 2021
|
F-5
|
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 and for the period from May 14, 2021 to December 31, 2021
|
F-6
|
Consolidated Schedule of Investments as of December 31, 2023 and December 31, 2022
|
F-7
|
Notes to Consolidated Financial Statements
|
F-15
|
Ernst & Young LLP
One Manhattan West
New York, NY 10001
|
Tel: +1 704 372 6300
www.ey.com
|
December 31, 2023
|
December 31, 2022
|
|||||||
ASSETS
|
||||||||
Non-controlled/non-affiliate investments at fair value (amortized cost of $
|
$
|
|
$
|
|
||||
Controlled/affiliate investments at fair value (amortized cost of $
|
|
|
||||||
Cash
|
|
|
||||||
Interest receivable
|
|
|
||||||
Paydown receivable
|
|
|
||||||
Deferred financing cost
|
|
|
||||||
Total assets
|
|
|
||||||
LIABILITIES
|
||||||||
Credit facility payable
|
|
|
||||||
Distributions payable
|
|
|
||||||
Redemptions payable
|
|
|
||||||
Incentive fees payable, net of fee waivers (Note 6)
|
|
|
||||||
Credit facility interest payable
|
|
|
||||||
Management fees payable, net of fee waivers (Note 6)
|
|
|
||||||
Other payables |
|
|
||||||
Professional fees payable
|
|
|
||||||
Reimbursement expense payable
|
|
|
||||||
Legal fees payable
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 11)
|
||||||||
Net assets
|
$
|
|
$
|
|
||||
NET ASSETS
|
||||||||
Common shares, $
|
$
|
|
$
|
|
||||
Contribution receivable
|
(
|
)
|
(
|
)
|
||||
Additional paid-in capital
|
|
|
||||||
Accumulated undistributed (overdistributed) earnings
|
(
|
)
|
|
|||||
Total net assets
|
$
|
|
$
|
|
||||
Net asset value per share
|
$
|
|
$
|
|
For the year ended
|
||||||||||||
December 31, 2023 | December 31, 2022 | For the period May 14, 2021* to December 31, 2021 |
||||||||||
Non-controlled/non-affiliate investment income:
|
||||||||||||
Interest income
|
$
|
|
$
|
|
$ | |||||||
PIK interest income
|
|
|
||||||||||
Dividend income
|
|
|
||||||||||
Other income
|
|
|
||||||||||
Controlled/affiliate investment income:
|
||||||||||||
Interest income
|
|
|
||||||||||
PIK interest income
|
||||||||||||
Dividend income
|
||||||||||||
Other income
|
||||||||||||
Total investment income:
|
|
|
||||||||||
Operating expenses:
|
||||||||||||
Interest and other financing fees
|
|
|
||||||||||
Management fees (Note 6)
|
|
|
||||||||||
Incentive fees (Note 6)
|
|
|
||||||||||
Professional fees
|
|
|
||||||||||
General and administrative fees
|
|
|
||||||||||
Legal expenses
|
|
|
||||||||||
Director expenses
|
|
|
||||||||||
Organizational expenses
|
|
|
||||||||||
Total expenses before fee waivers
|
|
|
||||||||||
Management fee waiver (Note 6)
|
(
|
)
|
(
|
)
|
||||||||
Incentive fee waiver (Note 6)
|
(
|
)
|
(
|
)
|
||||||||
Total expenses after fee waivers
|
|
|
||||||||||
Net investment income
|
|
|
||||||||||
Net gain (loss):
|
||||||||||||
Net realized gain (loss):
|
||||||||||||
Non-controlled/non-affiliate investments
|
|
|
||||||||||
Net realized gain (loss) on investments
|
|
|
||||||||||
Net change in unrealized gain (loss):
|
||||||||||||
Non-controlled/non-affiliate investments
|
(
|
)
|
(
|
)
|
||||||||
Controlled/affiliate investments
|
|
(
|
)
|
|||||||||
Net change in unrealized gain (loss) on investments
|
(
|
)
|
(
|
)
|
||||||||
Net gain (loss)
|
(
|
)
|
(
|
)
|
||||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
|
$
|
|
$ |
|||||||
Per common share data:
|
||||||||||||
Net investment income per share - basic and diluted
|
$
|
|
$
|
|
$ |
|||||||
Net increase (decrease) in net assets resulting from operations per share - basic and diluted
|
$
|
|
$ | $ |
||||||||
Weighted average shares outstanding - basic and diluted
|
|
|
* |
Date of formation of the Company
|
Common Stock
|
Additional paid-
in capital
|
Accumulated
undistributed
(overdistributed)
earnings
|
Total net assets
|
|||||||||||||||||
For the period from May 14, 2021* (commencement of operations) to December 31, 2021
|
Number of
shares
|
Par value of
shares
|
||||||||||||||||||
Balance, May 14, 2021*
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Net investment income
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net change in unrealized gain (loss) on investments
|
-
|
|
|
|
|
|||||||||||||||
Issuance of common shares
|
|
|
|
|
|
|||||||||||||||
Redemption of common shares
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
Distributions declared to stockholders
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Stock issued in connection with dividend reinvestment plan
|
|
|
|
|
|
|||||||||||||||
Return of capital and other tax related adjustments
|
-
|
-
|
(
|
)
|
|
|
||||||||||||||
Balance, December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
For the year ended December 31, 2022
|
||||||||||||||||||||
Balance, December 31, 2021
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Net investment income
|
-
|
|
|
|
|
|||||||||||||||
Net realized gain (loss)
|
-
|
|
|
|
|
|||||||||||||||
Net change in unrealized gain (loss) on investments
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Issuance of common shares
|
|
|
|
|
|
|||||||||||||||
Contribution receivable
|
-
|
-
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Purchases of shares in repurchase offer
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||
Distributions declared to stockholders
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Stock issued in connection with dividend reinvestment plan
|
|
|
|
|
|
|||||||||||||||
Return of capital and other tax related adjustments
|
-
|
-
|
|
(
|
)
|
|
||||||||||||||
Balance, December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
For the year ended December 31, 2023 | ||||||||||||||||||||
Balance, December 31, 2022 |
$ |
$ |
$ |
$ |
||||||||||||||||
Net investment income |
- | |||||||||||||||||||
Net realized gain (loss) |
- | |||||||||||||||||||
Net change in unrealized gain (loss) on investments |
- | ( |
) | ( |
) | |||||||||||||||
Issuance of common shares |
||||||||||||||||||||
Purchases of shares in repurchase offer |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
Distributions declared to stockholders |
- | ( |
) | ( |
) | |||||||||||||||
Stock issued in connection with dividend reinvestment plan |
||||||||||||||||||||
Balance, December 31, 2023 | $ |
$ | $ |
( |
) | $ |
* |
Date of formation of the Company
|
For the year ended | ||||||||||||
December 31, 2023 | December 31, 2022 |
For the period
May 14, 2021* to December 31, 2021 |
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net increase (decrease) in net assets resulting from operations
|
$ |
$
|
|
$
|
|
|||||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided (used in) operating activities:
|
||||||||||||
Net realized (gain) loss on investments
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Net change in unrealized (gain) loss on investments
|
|
(
|
)
|
|||||||||
Net accretion of discounts and amortization of premiums
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Purchases of investments
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Proceeds from sales of investments
|
|
|
||||||||||
Proceeds from principal payments
|
|
|
||||||||||
Amortization of deferred financing costs
|
|
|
||||||||||
Payment-in-kind interest income
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Changes in operating assets and liabilities:
|
||||||||||||
Interest receivable
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Carried interest payable
|
|
(
|
)
|
|||||||||
Management fees payable, net of fee waivers (Note 6)
|
|
|
||||||||||
Incentive fees payable, net of fee waivers (Note 6)
|
(
|
)
|
|
|||||||||
Credit facility interest payable
|
|
|
||||||||||
Other payables
|
|
|
||||||||||
Professional fees payable
|
|
|
||||||||||
Due to Shareholder
|
|
(
|
)
|
|||||||||
Legal fees payable
|
|
(
|
)
|
|||||||||
Reimbursement expense payable
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of common shares, including subscriptions received in advance
|
|
|
||||||||||
Redemption of common shares
|
|
(
|
)
|
|||||||||
Payments in repurchase of shares
|
( |
) |
(
|
)
|
|
|||||||
Proceeds from credit facility
|
|
|
||||||||||
Repayments of credit facility
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Distributions paid
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Deferred financing and debt issuance costs paid
|
(
|
)
|
(
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
|
|
||||||||||
Net increase (decrease) in Cash
|
( |
) |
|
|
||||||||
Cash, beginning of period
|
|
|
||||||||||
Cash, end of period
|
$ |
$
|
|
$
|
|
|||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Non cash operating activities:
|
||||||||||||
Transfer of investments (see Note 1)
|
$ |
$
|
|
$
|
(
|
)
|
||||||
Transfer of cash (see Note 1)
|
|
(
|
)
|
|||||||||
Transfer of carried interest payable (see Note 1)
|
|
|
||||||||||
Transfer of organizational costs payable (see Note 1)
|
|
|
||||||||||
Transfer of other receivables and payables (see Note 1)
|
|
(
|
)
|
|||||||||
Interest received in kind
|
$ |
$ |
|
|
||||||||
Supplemental and non cash financing activities:
|
||||||||||||
Shares issued from BDC conversion (see Note 1)
|
|
|
||||||||||
Shares issued from dividend reinvestment plan (see Note 10)
|
|
|
||||||||||
Supplemental Information:
|
||||||||||||
Cash paid for interest
|
$ |
$
|
|
$
|
|
* |
Date of formation of the Company
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread Above Index (7)
|
Interest Rate
|
Acquisition
Date
|
Maturity
|
Principal,Shares,
Units
|
Amortized Cost(8)
|
Fair Value (9)
|
% of Net Assets
|
|||||||||||||||||||||
Investments
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)(23) |
|
S+ |
$ |
$ |
% |
||||||||||||||||||||||||
|
(13)(18)(23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)/(18)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(15(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(16) |
|
S+ |
|||||||||||||||||||||||||||
|
(17) |
S+ |
||||||||||||||||||||||||||||
|
(17) |
S+ |
||||||||||||||||||||||||||||
|
(13) |
|
||||||||||||||||||||||||||||
|
(10)(17) |
S+ |
|
|||||||||||||||||||||||||||
|
(10)(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(10)(17) |
S+ |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17)(18)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(17)
|
S+ |
|
|
|
|
|
|
||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(16)
|
S+ |
S+ |
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(17)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(10(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)(180)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(19)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17) |
|
S+ |
|||||||||||||||||||||||||||
|
(10(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(16)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(17)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)(18)
|
S+ |
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
Total first lien senior secured term loan
|
|
|
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread Above Index (7)
|
Interest Rate
|
Acquisition
Date
|
Maturity
|
Principal,Shares,
Units
|
Amortized Cost(8)
|
Fair Value (9)
|
% of Net Assets
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(17)
|
|
S+
|
|
|
|
|
|
$
|
|
$
|
|
|
%
|
||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
Total second lien term loan
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
Total senior unsecured notes
|
|
|
|
|||||||||||||||||||||||||||
|
(12)
|
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(13)(20)(21)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(22)
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||
|
(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(13)(21)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(11)(13)(21)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(11)(13)(22)
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(13)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)(22)
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||
|
(13)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
(13)(21)(22)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(21)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
Total preferred equity securities
|
|
|
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread Above Index (7)
|
Interest Rate
|
Acquisition
Date
|
Maturity
|
Principal, Shares,
Units
|
Amortized Cost (8)
|
Fair Value (9)
|
% of Net Assets
|
|||||||||||||||||||||
|
(12)
|
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(14)(22)
|
|
|
|
|
-
|
|
$
|
|
$
|
|
|
%
|
|||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
Total warrants and other equity securities
|
|
|
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(18)
|
|
|
|
|
-
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||
Total fund investments
|
|
|
|
|||||||||||||||||||||||||||
TOTAL INVESTMENTS
|
$
|
|
$
|
|
|
%
|
|
(1)
|
All of the Company’s investments are issued by eligible portfolio companies, as
defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of the Company’s investments are issued by U.S. portfolio companies unless otherwise noted.
|
|
(2)
|
All investments are non-controlled/non-affiliated investments as defined by the 1940 Act, unless otherwise
noted. The 1940 Act classifies investments based on the level of control that the Company maintains in a particular portfolio company.
|
|
(3)
|
All investments are co-investments made with the Company’s affiliates in accordance with the terms of the
exemptive relief that the Company received from the U.S. Securities and Exchange Commission (the “SEC”), unless otherwise noted. See Note 6 “Transactions with Related Parties” in the accompanying notes to the consolidated
financial statements.
|
|
(4)
|
Unless otherwise indicated, all investments are considered Level 3 assets.
|
|
(5)
|
Unless otherwise indicated, the Company’s portfolio companies are pledged as collateral supporting the amounts outstanding under the Secured Credit Facility (as defined herein).
|
|
(6)
|
Except as otherwise noted, all of the Company’s portfolio company investments are subject to legal restrictions on sales.
|
|
(7)
|
|
|
(8)
|
The amortized cost represents the original cost adjusted for the amortization of discounts and premiums, as applicable, on debt investments using the effective interest method.
|
|
(9)
|
Because there is no readily available market value for these investments, the fair value of each of these investments is determined in good faith using significant unobservable inputs by the Company’s board of directors (the
“Board”) as required by the 1940 Act. See Note 4 “Fair Value Measurements” in the accompanying notes to the consolidated financial statements.
|
|
(10)
|
|
|
(11)
|
|
Portfolio Company
|
Type of Investment |
Amount of
Realized
Gain (Loss)
|
Amount of Interest or
Dividends Credited to
Income (a)
|
December 31,
2022 Value
|
Gross
Additions (b)
|
Gross
Reductions (c)
|
Transfers
In/(Out)
of Affiliates
|
Amount of
Unrealized
Gains (Loss)
|
December 31, 2023
Value
|
|||||||||||||||||||||||
Arrow Home Health LLC (dba Acara Home Health) (d)
|
First lien senior securred term loan |
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||||||||
Preferred equity securities (
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|
||||||||||||||||||||||
Preferred equity securities (
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Caregility Corporation
|
First lien senior securred term loan |
|
|
|
|
(
|
)
|
|
|
|
||||||||||||||||||||||
Preferred equity securities (
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Preferred equity securities (
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Warrants (
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Affiliate Investments
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
(a)
|
Represents the total amount of interest, fees or dividends credited to income for the portion of the period an investment was included in the Affiliate category.
|
(b)
|
Gross additions include increase in the cost basis of investments resulting from purchases, PIK interest or amortization of original issue discount.
|
(c)
|
Gross reductions include decreases in the total cost basis of investments resulting from principal repayments or sales.
|
(d)
|
The fair value of the investment was determined using significant unobservable inputs.
|
|
(12)
|
Ownership of certain equity investments may occur through a holding company or partnership.
|
|
(13)
|
Investment contains a fixed rate structure.
|
|
(14)
|
The Company has received
|
|
(15)
|
|
|
(16)
|
|
|
(17)
|
|
|
(18)
|
|
|
(19)
|
The investment is on non-accrual status. See Note 2 “Significant Accounting Policies”.
|
|
(20)
|
The investment includes the fair value and amortized cost of
|
|
(21)
|
Income producing through dividends or distributions.
|
|
(22)
|
Investment is held by a subsidiary of the Company. See Note 2 in the accompanying notes to the
consolidated financial statements for additional information on the Company’s wholly-owned subsidiary.
|
|
(23)
|
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread Above Index (7)
|
Interest Rate
|
Acquisition
Date
|
Maturity
|
Principal, Shares,
Units
|
Amortized Cost (8)
|
Fair Value (9)
|
% of Net Assets
|
|||||||||||||||||||||
Investments
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(11)
|
L+
|
|
|
|
|
|
$
|
|
$
|
|
|
%
|
|||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)(21)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(17)(19)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(11)(19)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(12)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(11)(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(21)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(18)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(12)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(11)
|
L+
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(13)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(11)(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)(21)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(22)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(20)
|
S+
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(11)(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)(11)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(19)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(20)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(10)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(10)(11)
|
L+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)
|
S+
|
|
%
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(11)(19)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
(11)(19)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
|
(20)(21)
|
S+
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||
Total first lien senior secured term loan
|
|
|
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread
Above
Index (7)
|
Interest
Rate
|
Acquisition
Date
|
Maturity
|
Principal, Shares, Units
|
Amortized
Cost (8)
|
Fair Value (9)
|
% of
Net Assets
|
||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(10)
|
|
L+
|
|
|
|
|
|
|
$
|
|
$
|
|
|
%
|
||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
Total second lien term loan
|
|
|
|
||||||||||||||||||||||||||||||
|
(14)
|
|
|||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(23)(24) |
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(24) |
|
|
|
-
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(15)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(24) |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(13)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(15)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
(15)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
(15)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
(15)(24)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
Total preferred equity securities
|
|
|
|
Portfolio Company (1)(2)(3)(4)(5)(6)
|
Footnotes
|
Spread Above Index (7)
|
Interest Rate
|
Acquisition
Date
|
Maturity
|
Principal, Shares, Units
|
Amortized Cost (8)
|
Fair Value (9)
|
% of Net
Assets
|
||||||||||||||||||||||||
|
(14)
|
|
|||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(16)
|
|
|
|
|
-
|
|
$
|
|
$
|
|
|
%
|
||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(18)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
Total warrants and other equity securities
|
|
|
|
||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||
|
(21)
|
|
|
|
|
-
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
Total fund investments
|
|
|
|
||||||||||||||||||||||||||||||
TOTAL INVESTMENTS
|
$
|
|
$
|
|
|
%
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
(6) |
|
(7) |
|
(8) |
|
(9) |
|
(10) |
|
(11) |
|
(12) |
|
(13) |
|
Portfolio Company
|
Type of Investment
|
Amount of
Realized
Gain (Loss)
|
Amount of Interest or
Dividends Credited to
Income (a)
|
December 31,
2021 Value
|
Gross
Additions (b)
|
Gross
Reductions (c)
|
Amount of
Unrealized
Gains (Loss)
|
December 31, 2022
Value
|
|||||||||||||||||||||
Arrow Home Health LLC (dba Acara Home Health) (d)
|
First lien senior secured term loan
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
$
|
(
|
$
|
|
||||||||||||||
|
Preferred equity securities ( |
|
( |
(
|
|
||||||||||||||||||||||||
Total Affiliate Investments
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
$
|
|
$
|
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(14) |
|
(15) |
|
(16) |
|
(17) |
|
(18) |
|
(19) |
|
(20) |
|
(21) |
|
(22) |
|
(23) |
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
First Lien Senior Secured Loan
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Second Lien Senior Secured Loan
|
|
|
|
|
||||||||||||
Senior Unsecured Notes
|
||||||||||||||||
Preferred Equity Securities
|
|
|
|
|
||||||||||||
Warrants and Other Equity Securities
|
|
|
|
|
||||||||||||
Fund Investments
|
|
|
|
|
||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
First Lien Senior Secured Loan
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Second Lien Senior Secured Loan
|
|
|
|
|||||||||||||
Preferred Equity Securities
|
|
|
|
|
||||||||||||
Warrants and Other Equity Securities
|
|
|
|
|
||||||||||||
Fund Investments
|
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Southeast
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Midwest
|
|
|
|
|
||||||||||||
Northeast
|
|
|
|
|
||||||||||||
West
|
|
|
|
|
||||||||||||
East
|
|
|
|
|
||||||||||||
Southwest
|
|
|
|
|
||||||||||||
South
|
|
|
|
|
||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Southeast
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Midwest
|
|
|
|
|
||||||||||||
West
|
|
|
|
|
||||||||||||
Northeast
|
|
|
|
|
||||||||||||
Southwest
|
|
|
|
|
||||||||||||
East
|
|
|
|
|
||||||||||||
South
|
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2023
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Aerospace & Defense
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Chemicals
|
||||||||||||||||
Commercial Services & Supplies
|
|
|
|
|
||||||||||||
Construction & Engineering
|
|
|
|
|
||||||||||||
Consumer Finance
|
|
|
|
|
||||||||||||
Distributors
|
|
|
|
|
||||||||||||
Diversified Consumer Services
|
|
|
|
|
||||||||||||
Diversified Financials
|
|
|
|
|
||||||||||||
Diversified Telecommunication Services
|
|
|
|
|
||||||||||||
Electrical Equipment
|
|
|
|
|
||||||||||||
Entertainment
|
|
|
|
|
||||||||||||
Food Products
|
|
|
|
|
||||||||||||
Healthcare Providers & Services
|
|
|
|
|
||||||||||||
Hotels, Restaurants & Leisure
|
|
|
|
|
||||||||||||
Household Durables
|
|
|
|
|
||||||||||||
Household Products
|
|
|
|
|
||||||||||||
IT Services
|
|
|
|
|
||||||||||||
Leisure Products
|
|
|
|
|
||||||||||||
Machinery
|
|
|
|
|
||||||||||||
Media
|
|
|
|
|
||||||||||||
Personal Products
|
|
|
|
|
||||||||||||
Professional Services
|
|
|
|
|
||||||||||||
Software
|
|
|
|
|
||||||||||||
Specialty Retail
|
||||||||||||||||
Trading Companies & Distributors
|
|
|
|
|
||||||||||||
Transportation Infrastructure
|
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
December 31, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Aerospace & Defense
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
Commercial Services & Supplies
|
|
|
|
|
||||||||||||
Construction & Engineering
|
|
|
|
|
||||||||||||
Consumer Finance
|
|
|
|
|
||||||||||||
Distributors
|
|
|
|
|
||||||||||||
Diversified Consumer Services
|
|
|
|
|
||||||||||||
Diversified Financials
|
|
|
|
|
||||||||||||
Diversified Telecommunication Services
|
|
|
|
|
||||||||||||
Electrical Equipment
|
|
|
|
|
||||||||||||
Entertainment
|
|
|
|
|
||||||||||||
Food Products
|
|
|
|
|
||||||||||||
Healthcare Providers & Services
|
|
|
|
|
||||||||||||
Hotels, Restaurants & Leisure
|
|
|
|
|
||||||||||||
Household Durables
|
|
|
|
|
||||||||||||
Household Products
|
|
|
|
|
||||||||||||
IT Services
|
|
|
|
|
||||||||||||
Leisure Products
|
||||||||||||||||
Machinery
|
||||||||||||||||
Media
|
||||||||||||||||
Personal Products
|
||||||||||||||||
Professional Services
|
||||||||||||||||
Road & Rail
|
||||||||||||||||
Software
|
|
|
|
|
||||||||||||
Specialty Retail
|
||||||||||||||||
Trading Companies & Distributors
|
||||||||||||||||
Total
|
$
|
|
|
%
|
$
|
|
|
%
|
• |
Level 1 - Quoted prices are available in active markets/exchanges for identical investments as of the reporting date.
|
• |
Level 2 - Pricing inputs are observable inputs including, but not limited to, prices quoted for similar assets or liabilities in active markets/exchanges or prices quoted for identical or similar assets or liabilities in markets
that are not active, and fair value is determined through the use of models or other valuation methodologies.
|
• |
Level 3 - Pricing inputs are unobservable for the investment and include activities where there is little, if any, market activity for the investment. The inputs into determination of fair value require significant management
judgment and estimation.
|
Fair Value Measurements
|
||||||||||||||||
December 31, 2023
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
First Lien Senior Secured Loan
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Second Lien Senior Secured Loan
|
|
|
|
|
||||||||||||
Senior Unsecured Notes
|
||||||||||||||||
Preferred Equity Securities
|
|
|
|
|
||||||||||||
Warrants and Other Equity Securities
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fund Investments
|
||||||||||||||||
Total Investments
|
$ |
Fair Value Measurements
|
||||||||||||||||
December 31, 2022
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||
First Lien Senior Secured Loan
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Second Lien Senior Secured Loan
|
|
|
|
|
||||||||||||
Preferred Equity Securities
|
|
|
|
|
||||||||||||
Warrants and Other Equity Securities
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Fund Investments
|
||||||||||||||||
Total Investments
|
Investments | ||||||||||||||||||||||||||||
First Lien Senior
Secured Loan
|
Second Lien Senior
Secured Loan
|
Senior Unsecured
Notes
|
Preferred Equity
Securities
|
Warrants and Other
Equity Securities
|
Fund Investments
|
Total Investments
|
||||||||||||||||||||||
Balance as of December 31, 2022
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||||||
Net realized gain (loss) on investments
|
|
|
|
|
|
|
||||||||||||||||||||||
Net change in unrealized gain (loss) on investments
|
(
|
)
|
|
( |
) |
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||
Purchases of investments and other adjustments to cost (1)
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||||||
Proceeds from sales of investments
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||||||||
Proceeds from principal repayments (2)
|
(
|
)
|
(
|
)
|
|
|
|
(
|
)
|
|||||||||||||||||||
Lien status change
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||||||
Balance as of December 31, 2023
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
$
|
|
$
|
|
(1) |
|
(2) |
|
Investments | ||||||||||||||||||||||||
First Lien Senior
Secured Loan
|
Second Lien Senior
Secured Loan
|
Preferred Equity
Securities
|
Warrants and Other
Equity Securities
|
Fund Investments |
Total
Investments
|
|||||||||||||||||||
Balance as of December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
|||||||||||||
Net realized gain on investments
|
|
|
|
|
|
|||||||||||||||||||
Net change in unrealized gain (loss) on investments
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Purchases of investments and other adjustments to cost (1)
|
|
|
|
|
|
|||||||||||||||||||
Proceeds from sales of investments
|
(
|
)
|
|
|
|
(
|
)
|
|||||||||||||||||
Proceeds from principal repayments (2)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Lien status change
|
( |
) | ||||||||||||||||||||||
Balance as of December 31, 2022
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
(1) |
Includes purchases of new investments, premium and discount accretion and amortization and PIK interest.
|
(2) |
Includes paydowns receivable included in the Consolidated Statements of Assets and Liabilities.
|
|
Range
|
|||||||||||||||||
|
Fair Value
|
Valuation Technique
|
Unobservable
Input
|
Weighted
Average Mean
|
Minimum
|
Maximum
|
||||||||||||
Assets:
|
||||||||||||||||||
First Lien Senior Secured Loan
|
$
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
||||||||
|
EBITDA Multiple
|
|
x | |
|
x
|
|
x | ||||||||||
First Lien Senior Secured Loan
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
|||||||||
|
Revenue Multiple
|
|
x | x |
x |
|||||||||||||
First Lien Senior Secured Loan
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | |||||||||
First Lien Senior Secured Loan
|
|
Enterprise Value Method
|
EBITDA Multiple
|
|
x |
|
x |
|
x | |||||||||
Second Lien Senior Secured Loan
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
|||||||||
|
EBITDA Multiple
|
|
x |
|
x |
|
x | |||||||||||
Senior Unsecured Note
|
Discounted Cash Flow
|
Market Yields | % | % | % | |||||||||||||
EBITDA Multiple | x |
x |
x |
|||||||||||||||
Preferred Equity Securities
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
|||||||||
|
Revenue Multiple
|
|
x |
|
x |
|
x | |||||||||||
Preferred Equity Securities
|
|
Enterprise Value Method
|
Gross Profit Multiple
|
|
x |
|
x |
|
x | |||||||||
|
EBITDA Multiple
|
|
x |
|
x |
|
x | |||||||||||
Preferred Equity Securities
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | |||||||||
Preferred Equity Securities
|
|
Enterprise Value Method
|
EBITDA Multiple
|
|
x |
|
x |
|
x | |||||||||
Warrants and Other Equity Securities
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | |||||||||
Warrants and Other Equity Securities
|
|
Enterprise Value Method
|
EBITDA Multiple
|
|
x |
|
x |
|
x | |||||||||
Fund Investments
|
|
Other
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||
Total Level 3 Assets
|
$
|
|
Range
|
|||||||||||||||||||||
Fair Value
|
Valuation Technique
|
Unobservable
Input
|
Weighted
Average Mean
|
Minimum
|
Maximum
|
||||||||||||||||
Assets:
|
|||||||||||||||||||||
First Lien Senior Secured Loan
|
$
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
|||||||||||
|
EBITDA Multiple
|
|
x |
|
x |
|
x | ||||||||||||||
First Lien Senior Secured Loan
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
||||||||||||
|
Revenue Multiple
|
|
x |
|
x |
|
x | ||||||||||||||
First Lien Senior Secured Loan
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | ||||||||||||
First Lien Senior Secured Loan
|
Recent Transaction | N/A | N/A | N/A | N/A | ||||||||||||||||
Second Lien Senior Secured Loan
|
|
Discounted Cash Flow
|
Market Yields
|
|
%
|
|
%
|
|
%
|
||||||||||||
|
EBITDA Multiple
|
|
x |
|
x |
|
x | ||||||||||||||
Preferred Equity Securities
|
Discounted Cash Flow | Market Yields | % | % | % | ||||||||||||||||
EBITDA Multiple | x | x | x | ||||||||||||||||||
Preferred Equity Securities
|
Discounted Cash Flow | Market Yields | % | % | % | ||||||||||||||||
Revenue Multiple | x | x | |||||||||||||||||||
Preferred Equity Securities
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | ||||||||||||
|
EBITDA Multiple
|
|
x |
|
x |
|
x | ||||||||||||||
Preferred Equity Securities
|
Enterprise Value Method | Revenue Multiple | x | x |
x | ||||||||||||||||
Preferred Equity Securities
|
|
Enterprise Value Method
|
EBITDA Multiple
|
|
x |
|
x |
|
x | ||||||||||||
Preferred Equity Securities
|
|
Recent Transaction
|
N/A |
N/A
|
N/A
|
N/A
|
|||||||||||||||
Warrants and Other Equity Securities
|
|
Enterprise Value Method
|
Revenue Multiple
|
|
x |
|
x |
|
x | ||||||||||||
Warrants and Other Equity Securities
|
|
Enterprise Value Method
|
EBITDA Multiple
|
|
x |
|
x |
|
x | ||||||||||||
Fund Investments
|
Other | N/A | N/A | N/A | N/A | ||||||||||||||||
Total Level 3 Assets
|
$
|
|
December 31, 2023
|
Equity Ownership Held by the Company
|
Equity Ownership Held by
Star Mountain Affiliate Funds
|
||||||
Issuer:
|
||||||||
Arrow Home Health LLC
|
|
%
|
|
%
|
||||
Caregility Corporation
|
% | % |
December 31, 2022
|
Equity Ownership Held by the Company
|
Equity Ownership Held by
Star Mountain Affiliate Funds
|
||||||
Issuer:
|
||||||||
Arrow Home Health LLC
|
|
%
|
|
%
|
• |
no incentive fee in any calendar quarter in which the pre-incentive fee net investment income does not exceed the hurdle rate of
|
• |
|
• |
|
Secured Credit Facility Lender
|
As of December 31, 2023
Commitment
|
As of December 31,2022
Commitment
|
||||||
Webster Bank
|
$
|
|
$ | |||||
Blue Ridge Bank
|
|
|||||||
First Foundation Bank
|
|
|||||||
Mitsubishi HC Capital America, Inc.
|
|
|||||||
Woodforest National Bank
|
|
|||||||
Forbright Bank
|
|
|||||||
Apple Bank
|
|
|||||||
Peapack-Gladstone Bank
|
|
|||||||
Total Commitment
|
$
|
|
$ |
For the year ended
|
||||||||||||
December 31, 2023 | December 31, 2022 |
For the period
May 14, 2021* to
December 31, 2021
|
||||||||||
Interest expense - Secured Credit Facility
|
$
|
|
$
|
|
$ | |||||||
Interest expense - Revolving Credit Line
|
|
|
||||||||||
Unused commitment fees
|
|
|
||||||||||
Amortization of deferred financing costs
|
|
|
||||||||||
Utilization fees
|
|
|
||||||||||
Total interest and other debt financing fees
|
$
|
|
$
|
|
$ | |||||||
Average debt outstanding
|
$
|
|
$
|
|
$ | |||||||
Average stated interest rate
|
% |
|
%
|
% |
*
|
Date of formation of the Company.
|
For the year ended | ||||||||||||
December 31, 2023
|
December 31, 2022
|
For the period May 14, 2021*
to December 31, 2021
|
||||||||||
Increase (decrease) in capital in excess of par value
|
$ |
$
|
|
$
|
|
|||||||
Increase (decrease) in accumulated undistributed (overdistributed) earnings
|
(
|
)
|
(
|
)
|
*
|
Date of Formation of the Company.
|
For the year ended | ||||||||||||
December 31, 2023 |
December 31, 2022
|
For the period May 14, 2021*
to December 31, 2021
|
||||||||||
Net accumulated change in unrealized gain (loss)
|
$ | ( |
) |
$
|
|
$
|
|
|||||
Undistributed ordinary income
|
|
|
||||||||||
Other cumulative effect of timing differences
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Total accumulated undistributed (overdistributed) earnings
|
$ | ( |
) |
$
|
|
$
|
|
*
|
Date of Formation of the Company.
|
For the year ended | ||||||||||||
December 31, 2023 |
December 31, 2022
|
For the period May 14, 2021*
to December 31, 2021
|
||||||||||
Ordinary income
|
$ |
$
|
|
$
|
|
|||||||
Redemption
|
|
|
||||||||||
Long-term capital gains
|
|
|
||||||||||
Total
|
$ |
$
|
|
$
|
|
*
|
Date of Formation of the Company.
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
For the year ended December 31, 2023:
|
||||||||||||
March 21, 2023
|
$
|
|
|
$
|
|
|||||||
May 15, 2023
|
|
|
|
|||||||||
August 28, 2023
|
|
|
|
|||||||||
December 8, 2023
|
|
|
|
|||||||||
|
$
|
|
||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
January 26, 2023
|
|
|
|
|||||||||
May 5, 2023
|
|
|
|
|||||||||
July 31, 2023
|
|
|
|
|||||||||
November 10, 2023
|
|
|
|
|||||||||
|
$
|
|
||||||||||
Total
|
|
$
|
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
For the year ended December 31, 2022:
|
||||||||||||
March 25, 2022
|
$
|
|
|
$
|
|
|||||||
April 21, 2022
|
|
|
|
|||||||||
September 12, 2022
|
|
|
|
|||||||||
November 22, 2022
|
|
|
|
|||||||||
|
|
$
|
|
|||||||||
|
||||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
January 14, 2022
|
|
|
|
|||||||||
May 20, 2022
|
|
|
|
|||||||||
July 29, 2022
|
|
|
|
|||||||||
November 4, 2022
|
|
|
|
|||||||||
|
|
|
|
|||||||||
Total
|
|
$
|
|
Date
|
Price per share
|
Shares Issued
|
Proceeds
|
|||||||||
Period from May 14, 2021* to December 31, 2021:
|
||||||||||||
May 14, 2021
|
$
|
|
|
$
|
|
|||||||
June 11, 2021
|
|
|
|
|||||||||
August 17, 2021
|
|
|
|
|||||||||
November 4, 2021
|
|
|
|
|||||||||
|
$
|
|
||||||||||
Stock issued in connection with dividend reinvestment plan
|
||||||||||||
August 20, 2021
|
|
|
|
|||||||||
November 19, 2021
|
|
|
|
|||||||||
|
|
|||||||||||
Total
|
|
$
|
|
*
|
Date of formation of the Company.
|
Quarter Ended
|
Purchase Price
|
Shares Repurchased
|
Amount Paid in Cash
|
|||||||||
Stock repurchased in connection with tender offer
|
||||||||||||
December 31, 2022*
|
$
|
|
|
$
|
|
|||||||
March 31, 2023
|
|
|
|
|||||||||
June 30, 2023
|
|
|
|
|||||||||
September 30, 2023
|
|
|
|
|||||||||
December 31, 2023**
|
|
|
|
|||||||||
Total
|
|
$
|
|
Quarter Ended
|
Purchase Price
|
Shares Repurchased
|
Amount Paid in Cash
|
|||||||||
Stock repurchased in connection with tender offer
|
||||||||||||
September 30, 2022
|
$
|
|
|
$
|
|
|||||||
Total
|
|
$
|
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per Share
|
Amount Paid in Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
For the year ended December 31, 2023
|
||||||||||||||||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per Share
|
Amount Paid
in Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
For the year ended December 31, 2022:
|
||||||||||||||||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Date Declared
|
Record Date
|
Payment/Issuance Date
|
Amount Per Share
|
Amount Paid in Cash
|
Amount Settled via
Newly Issued Shares
|
Total
|
||||||||||||||
Period from May 14, 2021* to December 31, 2021:
|
|
|||||||||||||||||||
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Total
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2023
|
Outstanding
Commitments
|
|||
Direct Investments
|
||||
Consolidated Machine & Tool Holdings, LLC |
$ |
|||
PPC Event Services, Inc.
|
|
|||
TCP Acquisition, LLC
|
|
|||
The Range NYC, LLC (dba Five Iron Golf)
|
|
|||
YTC Holdings, Inc. (dba Yorktel) |
||||
Total Direct Investments
|
$
|
|
||
Fund Investments
|
||||
Madryn Select Opportunities, LP
|
$
|
|
||
Total Fund Investments
|
$
|
|
||
Total
|
$
|
|
December 31, 2022
|
Outstanding
Commitments
|
|||
Direct Investments
|
||||
Gridsource Incorporated, LLC |
$ |
|||
PPC Event Services, Inc. |
||||
Rock Gate Capital, LLC (dba 160 Driving Academy)
|
|
|
||
TCP Acquisition, LLC |
||||
The Range NYC, LLC (dba Five Iron Golf) |
||||
Total Direct Investments
|
$
|
|
||
Fund Investments |
||||
Madryn Select Opportunities, LP |
$ |
|||
Total Fund Investments
|
$ |
|||
Total
|
$ |
For the year ended |
||||||||||||
December 31, 2023 |
December 31, 2022
|
For the period
May 14, 2021* to
December 31, 2021
|
||||||||||
Per share data:
|
||||||||||||
Net asset value at beginning of period
|
$ |
$
|
|
$
|
|
|||||||
Net investment income (loss) (1)
|
|
|
||||||||||
Net realized and unrealized gain (loss) (1)
|
( |
) |
(
|
)
|
|
|||||||
Net increase (decrease) in net assets resulting from operations (1)
|
|
|
||||||||||
Stockholder distributions (2)
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Dividend reinvestment plan distributions (2)
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Other (3)
|
( |
) |
(
|
)
|
|
|||||||
Net asset value at end of period
|
$ |
$
|
|
$
|
|
|||||||
Net assets at end of period
|
$ |
$
|
|
$
|
|
|||||||
Shares outstanding at end of period
|
|
|
||||||||||
Total return (4)
|
% |
|
%
|
|
%
|
|||||||
Ratio/Supplemental data:
|
||||||||||||
Ratio of expenses to average net assets before incentive fees and waivers(5)
|
% |
|
%
|
|
%
|
|||||||
Ratio of expenses to average net assets after incentive fees and before waivers(5)
|
% |
|
%
|
|
%
|
|||||||
Ratio of expenses to average net assets after incentive fees and waivers (5)
|
% |
|
%
|
|
%
|
|||||||
Ratio of net investment income (loss) to average net assets before incentive fees and waivers(5)
|
% |
|
%
|
|
%
|
|||||||
Ratio of net investment income (loss) to average net assets after incentive fees and before waivers(5)
|
% |
|
%
|
|
%
|
|||||||
Ratio of net investment income (loss) to average net assets after incentive fees and waivers(5)
|
% |
|
%
|
|
%
|
|||||||
Portfolio turnover (6)
|
% | % | % |
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
(6)
|
|
*
|
Date of Formation of the Company. |
Date: March 29, 2024
|
Star Mountain Lower Middle-Market Capital Corp.
|
|||
By:
|
/s/
|
Brett A. Hickey | ||
Name:
|
|
Brett A. Hickey | ||
Title:
|
|
Chief Executive Officer and President |
Date: March 29, 2024
|
By:
|
/s/ |
Christopher J. Gimbert
|
|
Name:
|
Christopher J. Gimbert
|
|||
Title:
|
Chief Financial Officer
|
By:
|
/s/ |
Brett A. Hickey
|
||
Name:
|
Brett A. Hickey
|
|||
Title:
|
Chief Executive Officer, President and Director
|
By:
|
/s/ |
Christopher J. Gimbert
|
||
Name:
|
Christopher J. Gimbert
|
|||
Title:
|
Chief Financial Officer
|
By:
|
/s/ |
Stephen B. Paras
|
||
Name:
|
Stephen B. Paras
|
|||
Title:
|
Director
|
By:
|
/s/ |
Jeffrey Rogers
|
||
Name:
|
Jeffrey Rogers
|
|||
Title:
|
Director
|
By:
|
/s/ |
O. James Sterling
|
||
Name:
|
O. James Sterling
|
|||
Title:
|
Director
|
By:
|
/s/ |
David S. Kimmel
|
||
Name:
|
David S. Kimmel
|
|||
Title:
|
Director
|