Core Insights - The article discusses the author's transition from a potential career in politics to a focus on value investing, emphasizing the importance of risk management and long-term wealth growth [1] Group 1: Career Transition - The author initially pursued a career in politics but shifted to finance after facing challenges in 2019, recognizing the need for financial stability [1] - The decision to study value investing was driven by the desire to make money work effectively and to safeguard against future setbacks [1] Group 2: Professional Experience - From 2020 to 2022, the author worked in a sales role at a law firm, where they became the top-grossing salesman and managed a team, contributing to sales strategy [1] - The experience gained during this period was instrumental in assessing company prospects based on their sales strategies [1] Group 3: Investment Advisory Role - The author served as an investment advisory representative with Fidelity from 2022 to 2023, focusing on 401K planning [1] - Despite excelling in this role and passing Series exams ahead of schedule, the author felt constrained by Fidelity's reliance on modern portfolio theory, leading to a decision to leave after one year [1] Group 4: Current Endeavors - In November 2023, the author began writing for Seeking Alpha, sharing investment opportunities discovered through personal research and experience [1] - The articles serve as a platform for the author to communicate investment strategies and insights to readers, who are seen as partners in this journey [1]

Core Insights - SPARC AI Inc. has amended and refiled its interim management's discussion and analysis for the period ended June 30, 2025, to clarify its disclosures regarding overall performance, operations, product development, and expenditure comparisons [1][2] Company Overview - SPARC AI designs and develops advanced technology solutions for environments where GPS is unavailable, enhancing perception and awareness [3] - The company has created an innovative Target Acquisition System and Autonomous Flight solution that does not rely on GPS, satellite, lidar, radar, image recognition, or other complex hardware or software [3]

Core Viewpoint - Norsemont Mining Inc. has completed the initial diamond drill hole and commenced two additional drill holes as part of its Phase 3 exploration program at the Choquelimpie project in northern Chile, indicating a strong focus on high-grade gold mineralization [1][3]. Group 1: Phase 3 Drill Program - The Phase 3 drill program aims to evaluate down-dip extensions of higher-grade gold mineralization (>1 gram/tonne Au) within hydrothermal breccia zones, consisting of up to 20 holes averaging 250 meters in length [4]. - The program is being conducted using two diamond drill rigs, with a total of up to 5,000 meters of diamond drilling planned, scheduled to continue through late December [1][4]. Group 2: Management Insights - CEO Marc Levy expressed confidence in the potential for substantial high-grade gold zones at depth and along strike below the existing open-pit resource, highlighting the transformative nature of the Phase 3 drill program [3]. - The company anticipates providing further updates to shareholders as drilling progresses and results become available [3]. Group 3: Technical Details - The first drill hole, MV25-DD01, has been completed to a depth of 300 meters, intersecting the Vizcacha hydrothermal breccia with moderate to strong pyrite mineralization [7][11]. - The second hole, MV25-DD02, is also targeting the Vizcacha Hydrothermal Breccia, while the third hole, MV25-DD03, is designed to explore the Choque Zone at depth, below previously calculated higher gold grades [8][11]. Group 4: Operational Aspects - Norsemont has engaged DV Drilling Ltd. to conduct the Phase 3 exploration program, utilizing truck-mounted diamond drills operating on a 24-hour schedule [5]. - Drill core samples will be prepared and analyzed at certified facilities in Chile, ensuring quality control in the exploration process [6].

Financial Data and Key Metrics Changes - For the quarter ended September 30th, core net investment income was $0.28 per share, with GAAP net investment income also at $0.28 per share [5][16] - Net asset value (NAV) decreased by 1.2% to $10.83 per share from $10.96 per share in the previous quarter [16] - The debt to equity ratio was reported at 1.6 times, which was reduced to 1.4 times after subsequent asset sales [16][17] Business Line Data and Key Metrics Changes - The portfolio grew to $2.8 billion, up from $2.4 billion in the prior quarter, with a weighted average yield on debt investments at 10.2% [12][17] - The portfolio consists of 90% first lien senior secured debt, with only 0.4% of the portfolio in non-accrual status [10][17] - The company invested $633 million in 11 new and 105 existing portfolio companies during the quarter, achieving a weighted average yield of 10.5% [13] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans is reported at SOFR plus 475-525 basis points, with leverage ratios remaining reasonable [8][9] - The company noted a steady increase in transaction activity in the private middle market lending sector, which is expected to lead to higher loan origination volumes [8] Company Strategy and Development Direction - The company is focused on enhancing earnings power through scale, diversification, and disciplined capital deployment, as evidenced by a $250 million portfolio acquisition and the formation of a new joint venture [5][6] - The goal is to grow the new joint venture, PSSL2, to over $1 billion in assets, similar to existing joint ventures [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, highlighting strong private equity sponsor relationships and disciplined underwriting as key advantages [8] - The company anticipates that the increase in transaction activity will provide opportunities to exit some equity co-investments and reinvest in income-producing assets [8] Other Important Information - The company has a strong credit quality track record, with a loss ratio on invested capital of only 11 basis points annually since inception [12] - The sectors targeted for investment include business services, consumer, government services and defense, healthcare, and software and technology, which are considered recession resilient [10][11] Q&A Session Summary Question: How did the portfolio acquisition come about? - The acquisition was part of a joint venture with a third party, involving assets that were well-known and originated by the company [21][22] Question: Are there more opportunities like the portfolio acquisition? - The company is optimistic about future opportunities, particularly in sectors where they have existing relationships and expertise [21] Question: What impact did the government shutdown have on portfolio companies? - The company has minimal exposure to civilian government activities, focusing more on defense and intelligence, which were not impacted by the shutdown [24] Question: What is the NII contribution from the sold assets? - The NII contribution from the $310 million of assets sold is expected to ramp up over the next year or two as the new joint venture scales [29][30] Question: How does the current leverage ratio cover the dividend? - The company believes that a leverage ratio of 1.5 should easily cover the dividend, even with potential reductions in SOFR [43] Question: What trends are seen in the underlying portfolio companies? - The company is observing double-digit revenue growth and single-digit EBITDA growth across its portfolio, with a healthy overall portfolio despite some choppier credits [46][47] Question: Any consideration for buybacks given the stock price is below book value? - The board considers all options, including buybacks, especially given the current valuation [59]

Financial Data and Key Metrics Changes - For the quarter ended September 30th, core net investment income was $0.28 per share, with GAAP net investment income also at $0.28 per share [5][16] - Net asset value (NAV) decreased by 1.2% to $10.83 per share from $10.96 per share in the previous quarter [16] - The debt to equity ratio was reported at 1.6 times, which was later reduced to 1.4 times after asset sales [16][17] Business Line Data and Key Metrics Changes - The portfolio grew to $2.8 billion, up from $2.4 billion in the prior quarter, indicating a strong increase in assets under management [12] - The weighted average yield on debt investments was 10.2%, with approximately 99% of the debt portfolio being floating rate [17] - The portfolio maintained a median leverage ratio of 4.5 times and a median interest coverage of 2 times [9][18] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans was reported at SOFR plus 475-525 basis points, with reasonable leverage and meaningful covenant protections [8][9] - The company noted a steady increase in transaction activity in the private middle market lending sector, which is expected to lead to higher loan origination volumes [8] Company Strategy and Development Direction - The company is focused on enhancing earnings power through scale, diversification, and disciplined capital deployment, as evidenced by a $250 million portfolio acquisition and the formation of a new joint venture [5][6] - The goal for the new joint venture, PSSL2, is to grow it to over $1 billion in assets, similar to existing joint ventures [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current market environment, highlighting opportunities for capital deployment in core middle market companies with lower leverage and higher spreads [8][11] - The company remains committed to delivering a stable dividend stream while preserving capital and creating long-term value for stakeholders [19] Other Important Information - The company has a strong credit quality track record, with a loss ratio on invested capital of only 11 basis points annually since inception [12] - The portfolio is well-diversified, comprising 164 companies across 50 industries, with a focus on sectors that are recession resilient [10][12] Q&A Session Summary Question: How did the portfolio acquisition come about? - The acquisition was part of a joint venture with a third party, involving assets that were well-known to the company, which originated a couple of years ago [21][22] Question: Are there more opportunities like the portfolio acquisition? - Management indicated that they are always looking for similar opportunities and emphasized the value of acquiring assets they are familiar with [21][22] Question: What impact did the government shutdown have on portfolio companies? - The company has minimal exposure to civilian government activities, focusing more on defense and intelligence, which were not impacted by the shutdown [24] Question: What is the expected NII contribution from the recent asset sales? - The NII contribution from the $250 million portfolio acquisition is expected to add about 1-2 cents per share for a full quarter [29] Question: How does the current leverage ratio cover the dividend? - Management believes that a leverage ratio of 1.5 should easily cover the dividend, even with potential reductions in SOFR [43] Question: What trends are being observed in the underlying portfolio companies? - The company is seeing double-digit revenue growth and single-digit EBITDA growth across its portfolio, with a healthy overall portfolio despite some choppier credits [46][47] Question: Is there any consideration for stock buybacks given the stock price is trading below book value? - The board considers all options, including buybacks, and acknowledges that the current stock price appears to be a good value [59]

Financial Data and Key Metrics Changes - For the quarter ended September 30, core net investment income was $0.28 per share, with GAAP net investment income also at $0.28 per share [4][14] - As of September 30, net asset value (NAV) was $10.83 per share, down 1.2% from $10.96 per share in the previous quarter [15] - The debt to equity ratio was 1.6 times, which was reduced to 1.4 times after subsequent asset sales [15][16] Business Line Data and Key Metrics Changes - The company invested $633 million in 11 new and 105 existing portfolio companies at a weighted average yield of 10.5% during the quarter [12] - The portfolio grew to $2.8 billion, up from $2.4 billion in the prior quarter [11] - The portfolio remains well-diversified, comprising 164 companies across 50 industries, with 90% in first lien senior secured debt [16] Market Data and Key Metrics Changes - The pricing on high-quality first lien term loans in the core middle market is SOFR plus 475-525 basis points, with leverage being reasonable [8] - The median leverage ratio of the portfolio's debt securities was 4.5 times, and the median interest coverage was 2 times [8][17] - Non-accruals represented only 0.4% of the portfolio at cost and 0.2% at market value, indicating strong credit metrics [9][16] Company Strategy and Development Direction - The company is focused on enhancing earnings power through scale, diversification, and disciplined capital deployment, as evidenced by the $250 million portfolio acquisition and the formation of a new joint venture [4][5] - The goal is to grow the PSSL2 joint venture to over $1 billion in assets, similar to existing joint ventures, which should lead to net investment income exceeding current dividends [5][12] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about a steady increase in transaction activity in private middle market lending, which is expected to lead to higher loan origination volumes [6] - The company believes the current environment favors lenders with strong private equity sponsor relationships and disciplined underwriting, areas where it has a clear advantage [6][10] - Management noted that the average consumer is relatively soft, but sectors like government services, defense, and healthcare remain strong [22] Other Important Information - The company has invested $8.4 billion in 539 companies since inception, with a loss ratio on invested capital of only 11 basis points annually [11] - The weighted average yield on debt investments was 10.2%, and approximately 99% of the debt portfolio is floating rate [16] Q&A Session Summary Question: How did the portfolio acquisition come about? - The acquisition was part of a joint venture with a third party, involving assets that were already well-known to the company, which originated a couple of years ago [20] Question: Are you seeing any bifurcation in the market? - There is a general reversion to the mean in the economy, with some sectors like logistics still dealing with post-COVID issues, while government services and healthcare remain strong [21][22] Question: What is the NII contribution from the assets sold? - The $250 million portfolio acquisition is expected to add about 1-2 cents per share of NII for a full quarter, while the new joint venture will take time to ramp up [28] Question: How are new loan spreads stabilizing? - New loans are being accessed at SOFR plus 175 basis points, with average spreads in the 475-525 range, reflecting a focus on solid credit [36] Question: What is the strength of the underlying portfolio companies? - The portfolio is seeing double-digit revenue growth and mid-single-digit EBITDA growth, with a healthy overall portfolio despite some choppier credits [44][46] Question: Any consideration for buybacks given the stock price? - The board considers all options, including buybacks, especially given the current valuation [58]

Core Insights - For the quarter ended September 2025, PennantPark (PFLT) reported revenue of $68.98 million, reflecting a year-over-year increase of 24.2% and a surprise of +4.65% over the Zacks Consensus Estimate of $65.91 million [1] - EPS for the quarter was $0.28, which is a decrease from $0.32 in the same quarter last year, aligning with the consensus EPS estimate [1] - The stock has returned -0.1% over the past month, compared to the Zacks S&P 500 composite's -1.8% change, and currently holds a Zacks Rank 4 (Sell) [3] Revenue and Earnings Performance - The revenue increase of 24.2% year-over-year indicates strong growth, surpassing analyst expectations [1] - The reported EPS of $0.28 did not deliver a surprise, as it matched the consensus estimate [1] Key Metrics Analysis - Other income from non-controlled, non-affiliated investments was reported at $1.14 million, exceeding the two-analyst average estimate of $1.01 million [4] - Interest income from non-controlled, non-affiliated investments was $56.32 million, surpassing the two-analyst average estimate of $51.78 million, representing a year-over-year change of +41.9% [4] - Dividend income from non-controlled, non-affiliated investments was $0.1 million, significantly below the two-analyst average estimate of $0.55 million, reflecting a year-over-year decline of -80% [4]

Core Insights - PennantPark (PFLT) reported quarterly earnings of $0.28 per share, matching the Zacks Consensus Estimate, but down from $0.32 per share a year ago [1] - The company achieved revenues of $68.98 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 4.65% and up from $55.52 million year-over-year [2] - The stock has underperformed, losing approximately 17.1% since the beginning of the year compared to the S&P 500's gain of 12.3% [3] Earnings and Revenue Performance - The earnings per share (EPS) for the upcoming quarter is estimated at $0.28, with revenues projected at $67.52 million, while the current fiscal year estimates are $1.15 EPS on $274.83 million in revenues [7] - Over the last four quarters, PennantPark has surpassed consensus revenue estimates two times [2] Market Outlook and Industry Context - The Zacks Rank for PennantPark is currently 4 (Sell), indicating expectations of underperformance in the near future [6] - The Financial - Investment Management industry, to which PennantPark belongs, is ranked in the top 31% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Debt and Financing - In July 2024, the Company refinanced the 2031 Asset-Backed Debt through a $351.0 million debt securitization, resulting in the issuance of various classes of notes with a weighted average interest rate of 6.2% as of September 30, 2025[47]. - As of September 30, 2025, the Company had $287.0 million of 2036 Asset-Backed Debt outstanding with a weighted average interest rate of 7.1%[48]. - The Company completed the 2037 Debt Securitization in February 2025, issuing $220.5 million of Class A-1 Notes and having $361.0 million of Asset-Backed Debt outstanding with a weighted average interest rate of 5.9% as of September 30, 2025[49]. - The company had outstanding borrowings totaling $1,782.9 million, with a weighted average annual interest rate of 6.1%[192]. - The company is exposed to risks associated with changes in interest rates, which may affect its cost of capital and net investment income[165]. - An increase in interest rates could lead to higher incentive fees payable to the Investment Adviser with respect to Pre-Incentive Fee Net Investment Income[166]. - Rising interest rates may increase the risk of defaults from portfolio companies holding floating rate securities[168]. - The company is partially dependent on its subsidiary Funding I for cash distributions to meet distribution requirements necessary to maintain RIC status[184]. - If the company incurs additional debt, it could further increase the risk of loss for investors, as lenders have superior claims on assets[189]. Investment Strategy and Portfolio - The Company targets an investment size of $5 million to $30 million in securities of middle-market companies, expecting first lien secured debt to represent at least 65% of its overall portfolio[54]. - The Company may invest up to 30% of its portfolio in non-qualifying assets, including investments in public companies with market capitalizations greater than $250 million[55]. - The Company focuses on investing in stable borrowers with positive cash flow, emphasizing fundamental analysis and a value-oriented approach[63]. - The Investment Adviser seeks to invest in portfolio companies with proven management teams and trusted financial sponsors to ensure quality and stability[64][65]. - The company focuses on investing broadly among portfolio companies across various industries and geographical regions to mitigate risks associated with downturns in specific sectors[66]. - The investment strategy includes targeting companies that generate steady cash flow, with expectations for cash flow to facilitate loan repayments and potential exits through strategic acquisitions or IPOs[67]. - A rigorous due diligence process is employed to evaluate new investment targets, utilizing information from various sources including management teams and financial sponsors[68]. - The company primarily invests in floating rate loans to U.S. middle-market companies, with a focus on industries where the Investment Adviser has expertise[83]. - As of September 30, the top ten portfolio companies represent a diverse range of industries, with Professional Services at 10% and Aerospace and Defense at 10% of consolidated portfolio assets[83]. Management and Fees - The base management fee for the Investment Adviser is set at an annual rate of 1.00% of average adjusted gross assets, with recorded expenses of $23.3 million, $14.9 million, and $11.4 million for the years ended September 30, 2025, 2024, and 2023 respectively[87]. - For the years ended September 30, 2025, 2024, and 2023, the Investment Adviser earned incentive fees of $26.0 million, $18.1 million, and $16.9 million, respectively, based on net investment income[89]. - The hurdle rate for Pre-Incentive Fee Net Investment Income is set at 1.75% per quarter, which annualizes to 7.00%[89]. - The incentive fee structure includes a "catch-up" provision that allows for 50% of the Pre-Incentive Fee Net Investment Income exceeding the hurdle but less than 2.9167%[89]. - The Investment Adviser is not exclusive and may provide similar services to other entities, with oversight from the company's board of directors to manage potential conflicts of interest[86]. - The Investment Adviser is responsible for determining the composition of the portfolio and managing investment changes[90]. - The Investment Adviser provides various investment advisory, research, and related services as needed[90]. Regulatory and Compliance - The company is a Business Development Company (BDC) under the 1940 Act and intends to maintain its election to be treated as a Regulated Investment Company (RIC)[113]. - The company must distribute dividends annually to maintain its RIC tax election, generally at least equal to 90% of the sum of ordinary income and realized net short-term capital gains[138]. - To avoid a 4% nondeductible federal excise tax, the company must distribute at least 98% of its net ordinary income and 98.2% of capital gains exceeding capital losses[139]. - The company is required to provide significant managerial assistance to portfolio companies that constitute qualifying assets under the 1940 Act[118]. - The company has adopted a joint code of ethics and a code of conduct to establish procedures for personal investments and restrict certain personal securities transactions[121]. - The company must maintain its status as a RIC to avoid corporate-level income taxation, which would significantly reduce net assets and income available for debt service and distributions[176]. - The company may face difficulties in meeting its Annual Distribution Requirement if it recognizes income before receiving cash, potentially impacting its ability to qualify as a RIC[177]. - The company has adopted updated policies to comply with SEC Rule 18f-4, which may affect how leverage is calculated under the 1940 Act[253]. Risks and Challenges - The company has identified material weaknesses in its internal controls over financial reporting, which could adversely affect its ability to report financial results accurately and timely[172]. - As of September 30, 2025, the company does not maintain effective internal control over financial reporting, raising concerns about potential misstatements in financial statements[172]. - The company is in the process of remediating identified material weaknesses but cannot estimate when the remediation will be completed, increasing the risk of undetected errors in future financial statements[173]. - The company is exposed to increased risk of loss due to leverage, with a leverage ratio of 166% of net assets as of September 30, 2025, requiring an annual return of at least 3.8% to cover interest payments[191]. - The company may face significant potential conflicts of interest due to overlapping investment objectives with affiliated funds managed by the Investment Adviser[200]. - The company may experience fluctuations in quarterly results due to factors such as interest rates, default rates, and general economic conditions[204]. - The company may face liquidity issues as substantially all investments are subject to legal restrictions on resale, making them less liquid than publicly traded securities[224]. - Economic downturns could impair portfolio companies, leading to increased non-performing assets and decreased portfolio value[235]. - The company primarily invests in floating rate loans, which are often rated below investment grade and carry significant credit risk[230]. - The incentive fee structure may encourage the Investment Adviser to make riskier investments, potentially leading to higher investment losses[243]. Shareholder Considerations - The company may issue additional common stock or senior securities, which could dilute existing shareholders' ownership and voting rights[185]. - The company may seek stockholder approval to issue shares below the current NAV per share, which could materially dilute stockholder interests[254]. - Any issuance of shares below NAV will result in immediate dilution of stockholder interests and a reduction in NAV per share[255]. - The actual dilutive effect of future share issuances below NAV is currently unknown, and the company cannot predict the resulting reduction in NAV per share[255]. - The determination of NAV for share offerings will be made by the board of directors, ensuring compliance with the 1940 Act unless stockholder consent is obtained[257]. - The company intends to make monthly distributions to stockholders but cannot assure specified levels or year-to-year increases due to asset coverage ratio requirements[258]. - There is a risk that stockholders may not receive distributions or that distributions may not grow over time[258]. - Distributions may include a return of capital, which could increase tax liabilities for stockholders upon future sale of common stock[258].

Financial Performance - For the quarter ended September 30, 2025, the investment portfolio totaled $2,773.3 million, with net assets of $1,074.5 million and a GAAP net asset value per share of $10.83, reflecting a quarterly change of (1.2)%[2] - Net investment income for the quarter was $27.5 million or $0.28 per share, compared to $18.0 million or $0.24 per share for the same quarter in 2024, indicating a growth driven by an increase in the debt portfolio size[18] - Total investment income for the year ended September 30, 2025, was $261.4 million, up from $186.4 million in 2024, primarily due to the growth in the debt portfolio[16] - For the year ended September 30, 2025, net investment income was $107.2 million, compared to $77.7 million in 2024, marking an increase of approximately 37.9%[37] - The company declared total distributions of $113.9 million for the year ended September 30, 2025, compared to $80.6 million in 2024, reflecting a year-over-year increase of 41.2%[30] Investment Activities - The company invested $633.0 million in 11 new and 105 existing portfolio companies during the quarter, achieving a weighted average yield on debt investments of 10.5%[9] - The weighted average yield on debt investments at quarter-end was 10.2%, with approximately 99% of the debt portfolio consisting of variable-rate investments[7] - The company formed a joint venture, PennantPark Senior Secured Loan Fund II, LLC, with commitments of $200 million, aiming to invest primarily in middle market loans[31] - In September 2025, the company acquired a portfolio of assets valued at approximately $250 million, projected to be accretive to Core NII by one to two cents per share quarterly[32] Market Conditions - The company reported net realized losses of $(14.3) million for the quarter and $(5.9) million for the year, compared to $(0.3) million and $0.2 million in the prior year, reflecting changes in market conditions[19] - As of September 30, 2025, the portfolio had net unrealized depreciation of $46.1 million, compared to $11.4 million in the previous year, driven by capital market conditions[20] Debt and Equity Management - Regulatory debt to equity ratio stood at 1.66x, indicating a disciplined approach to leverage in the investment strategy[2] - For the year ended September 30, 2025, the annualized weighted average cost of debt decreased to 6.8% from 8.5% in 2024[24] - The company sold $118 million of assets to PSSL and $191 million to PSSL II, using the net proceeds to pay down its Credit Facility and reduce the debt-to-equity ratio to 1.41x[33] Cash and Assets - As of September 30, 2025, the company had cash equivalents of $122.7 million, an increase from $112.1 million in 2024[25] - As of September 30, 2025, total assets were $2.91 billion, an increase from $2.11 billion in 2024, indicating a growth of approximately 37.9%[36] Future Outlook - The company expects its dividend policy to remain stable, supported by growing net investment income and potential spillover income of $0.25 per share[6] - Forward-looking statements made by the company are subject to various risks and uncertainties that could cause actual results to differ materially[41] - The company does not guarantee future performance or results based on forward-looking statements[41] Advisory and Contact Information - The information provided does not constitute specific legal, tax, or accounting advice[43] - The company encourages consultation with qualified professionals for legal and tax advice[43] - Contact information for inquiries includes Richard T. Allorto, Jr. at PennantPark Floating Rate Capital Ltd.[44] Company Overview - PennantPark Investment Advisers, LLC manages approximately $10 billion of investable capital, including potential leverage[40] - The company has been providing access to middle-market credit since its inception in 2007[40] - PennantPark Investment Advisers offers a comprehensive range of creative and flexible financing solutions to private equity firms and middle-market borrowers[40] - The company is headquartered in Miami and has offices in major cities including New York, Chicago, and Los Angeles[40]