Reports Net Investment Income of $0.70 Per Share and Net Asset Value of $21.21 Per Share Amends and Extends Existing Senior Secured Revolving Credit Facility; Upsizes Commitments to $200.0 Million from $115.0 Million, Reduces Interest Rate Margin to 2.50% from 2.80% Continued Share Repurchase Program: Total of 79,722 Shares for an Aggregate Cost of Approximately $1.6 Million Repurchased During the Second Quarter; Accretive to NAV by $0.03 Per Share Announces Third Quarter 2024 Quarterly Distribution of $0.6 ...

Acquisitions - The company completed the acquisition of Garrison Capital Inc. (GARS) on October 28, 2020, with GARS shareholders receiving approximately $1.19 in cash and 1.917 shares of the company's common stock per share of GARS[137]. - The company acquired Harvest Capital Credit Corporation (HCAP) on June 9, 2021, with HCAP stockholders receiving $18.54 million in cash and 15,252,453 shares of the company's common stock[139]. Investment Strategy - The company has a Debt Securities Portfolio focused on generating current income and capital appreciation from investments in senior secured term loans and mezzanine debt, primarily in middle-market companies with EBITDA of $10 million to $50 million[135]. - The company intends to distribute substantially all of its net ordinary taxable income to maintain its status as a regulated investment company (RIC) under U.S. federal income tax laws[135]. - The company has made investments in CLO Fund Securities and may invest in equity securities of privately held middle-market companies, enhancing its investment diversification[135]. - The company’s investment strategy includes a focus on first and second lien term loans, which are expected to have lower default rates and higher recovery rates[135]. - The company has evaluated strategic opportunities, including potential mergers with affiliated funds, to enhance its market position[135]. - The company’s portfolio may include "covenant-lite" loans, which carry higher risks due to fewer borrower restrictions[135]. Portfolio Performance - Fair Value at December 31, 2023, is $467,865,000, a decrease from $576,478,000 at December 31, 2022[141]. - Total Purchases/Originations/Draws for the period ending June 30, 2024, amounted to $55,300,000, compared to $66,492,000 in the previous year[141]. - Total Pay-downs/Pay-offs/Sales for the same period were $(67,536,000), a significant increase from $(160,511,000) in the previous year[141]. - The net change in unrealized appreciation on investments for the period was $(5,895,000), compared to $3,322,000 in the previous year[141]. - The portfolio's Fair Value Percentage of Total Portfolio for First Lien Debt is 72.1% as of June 30, 2024, slightly up from 71.9% at December 31, 2023[142]. - The Fair Value of Joint Ventures is $54,292,000, representing 12.2% of the total portfolio as of June 30, 2024[142]. - The Fair Value of Equity investments increased to $23,830,000, which is 5.4% of the total portfolio[142]. - The total cost/amortized cost of the portfolio decreased from $540,282,000 at December 31, 2023, to $522,683,000 as of June 30, 2024[142]. - The net accretion of interest for the period ending June 30, 2024, was $2,657,000, compared to $8,980,000 in the previous year[141]. - The net realized loss on investments for the period was $(8,021,000), a decrease from $(26,896,000) in the previous year[141]. - As of June 30, 2024, the fair value of the debt investment portfolio was approximately $358.9 million, with an average par balance per entity of approximately $2.6 million[145]. - The weighted average contractual interest rate on the interest-earning Debt Securities Portfolio was approximately 12.4% as of June 30, 2024[144]. - The fair value of CLO Fund Securities decreased from $9.0 million as of December 31, 2023, to $7.4 million as of June 30, 2024[147]. - The investment in the F3C Joint Venture had a fair value of $13.5 million as of June 30, 2024, down from $14.3 million at December 31, 2023[149]. - Nine investments were on non-accrual status as of June 30, 2024, compared to seven as of December 31, 2023[145]. - The total fair value of the company's portfolio was $522.7 million as of June 30, 2024, compared to $444.4 million as of December 31, 2023[143]. - The healthcare and pharmaceuticals sector represented 12.4% of the total portfolio as of June 30, 2024[143]. - The high-tech industries sector saw a significant increase, representing 11.9% of the total portfolio as of June 30, 2024, compared to 15.7% previously[143]. - The banking, finance, insurance, and real estate sector accounted for 11.1% of the total portfolio as of June 30, 2024[143]. - The consumer goods durable sector represented 5.0% of the total portfolio as of June 30, 2024[143]. Investment Income - Investment income for Q2 2024 was approximately $16.3 million, down from $19.6 million in Q2 2023, representing a decrease of 17%[152]. - For the six months ended June 30, 2024, investment income totaled approximately $32.9 million, compared to $40.0 million for the same period in 2023, a decline of 18%[152]. - Interest income from the Debt Securities Portfolio for Q2 2024 was approximately $13.9 million, down from $15.5 million in Q2 2023, a decrease of 10%[152]. - The fair value of the investment in the Great Lakes II Joint Venture was $40.7 million as of June 30, 2024, compared to $45.0 million as of December 31, 2023, a decrease of 5.8%[150]. - As of June 30, 2024, the weighted average contractual interest rate on the interest-earning Debt Securities Portfolio was approximately 12.4%[152]. - The company had an unfunded commitment of $10.1 million to the Great Lakes II Joint Venture as of June 30, 2024, up from $5.5 million as of December 31, 2023[150]. - Investment income from Joint Ventures for Q2 2024 was $1.8 million, down from $2.3 million in Q2 2023, a decrease of 21.7%[154]. - Total investment income for the six months ended June 30, 2024, was $32.9 million, compared to $39.9 million for the same period in 2023, a decline of 17.5%[153]. - The company recognized $0.1 million in fees and other income for Q2 2024, down from $0.9 million in Q2 2023, a decrease of 88.9%[154]. - The fair value of investments in Joint Ventures was approximately $54.3 million as of June 30, 2024, compared to $59.3 million as of December 31, 2023, a decrease of 8.4%[154]. Expenses and Income - Total expenses for the three months ended June 30, 2024, were approximately $9.9 million, a decrease of 15.5% compared to $11.7 million for the same period in 2023[156]. - Management fees for the three months ended June 30, 2024, were approximately $1.7 million, down from $1.9 million in 2023, representing a decrease of 11.4%[156]. - Incentive fees for the three months ended June 30, 2024, were approximately $1.4 million, a decrease of 17.6% from $1.7 million in 2023[156]. - Interest expense and amortization on debt issuance costs for the three months ended June 30, 2024, were approximately $5.4 million, down from $6.4 million in 2023, reflecting a decrease of 15.6%[157]. - Net investment income for the three months ended June 30, 2024, was approximately $(0.4) million, compared to $1.4 million in 2023, indicating a significant decline[159]. - The net change in unrealized appreciation (depreciation) on investments for the three months ended June 30, 2024, was approximately $(6.0) million, compared to $(4.2) million in 2023[160]. - The net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2024, was $(6.4) million, compared to $(3.1) million in 2023[161]. - As of June 30, 2024, the total fair value of investments was approximately $481.0 million, down from $539.4 million as of December 31, 2023[163]. - The average debt outstanding for the three months ended June 30, 2024, was approximately $288.7 million, compared to $360.8 million in 2023, indicating a reduction in leverage[157]. Distributions and Shareholder Returns - Tax-basis distributable income for the six months ended June 30, 2024, was approximately $13.2 million, or $1.42 per basic and diluted share, compared to $14.9 million, or $1.56 per basic and diluted share in 2023[159]. - As of June 30, 2024, the company had approximately $285.1 million of outstanding borrowings with an asset coverage ratio of 169%, exceeding the minimum requirement of 150% under the 1940 Act[164]. - The company issued $108.0 million of 4.875% Notes due 2026, with net proceeds of approximately $104.6 million, and is in compliance with all debt covenants[165]. - The Revolving Credit Facility has an initial principal amount of $115 million, with an accordion feature that could increase total commitments to $215 million, and as of June 30, 2024, approximately $92.0 million was outstanding[166][167]. - The company redeemed approximately $40.6 million of the par value of the 2018-2 Secured Notes during the six months ended June 30, 2024, recognizing a realized loss on extinguishment of approximately $0.3 million[167]. - The company intends to distribute at least 98% of its ordinary net taxable income and 98.2% of capital gains to avoid excise taxes imposed on RICs[168]. - Total declared distributions for 2021 amounted to $2.42 per share[170]. - In Q2 2024, the company reported earnings of $0.69 per share, maintaining the same earnings per share as in Q1 2024, resulting in a total declared earnings of $1.38 for 2024[171]. - For the full year 2023, the company declared total earnings of $2.75 per share, with each quarter contributing $0.69 in Q4, Q3, and Q2, and $0.68 in Q1[171]. - The company repurchased 79,722 shares at an aggregate cost of approximately $1.6 million during Q2 2024, compared to 27,081 shares for $0.6 million in Q2 2023[172]. - As of June 30, 2024, the company had commitments to fund investments totaling approximately $32.7 million, up from $28.6 million as of December 31, 2023[173]. - The company has a long-term debt obligation of $285.07 million, with $108 million due in the next two years[174]. - The company has made an aggregate commitment of $50 million to the Great Lakes II Joint Venture, with an unfunded commitment of $10.1 million as of June 30, 2024[173]. - The company approved a renewed stock repurchase program of up to $10 million effective March 11, 2024, similar to the previous program[172]. Accounting and Valuation - The company’s critical accounting policies involve significant estimates related to the valuation of investments and revenue recognition[174]. - The company’s investments are reported at fair value, with unrealized gains and losses reflected in the statements of operations[175]. - The company follows ASC 820 for fair value measurements, which prioritizes market-based inputs over entity-specific inputs in determining fair value[176]. - As of June 30, 2024, 88.1% of the Debt Securities Portfolio were floating rate, with 81.6% of these loans containing floors between 0.50% and 3.25%[185]. - The company had $285.1 million in borrowings outstanding at a weighted average interest rate of 6.9%, with $108.0 million at a fixed rate and $177.1 million at a floating rate[185]. - Nine investments were on non-accrual status as of June 30, 2024, indicating potential issues with collectability[179]. - Investment income from CLO equity investments is recorded using the effective interest method, with yields revised based on changes in estimated cash flows[180]. - The company intends to distribute at least 90% of its investment company taxable income to qualify for RIC tax treatment[183]. - Fair value determinations for investments are primarily based on a discounted cash flow model, with significant management judgment involved[179]. - The company recognizes unrealized appreciation or depreciation on CLO Fund Securities as market conditions change[180]. - Interest income is recorded on an accrual basis, ceasing when loans become 90 days or more past due[179]. - The company may utilize various valuation methods to determine fair value in accordance with GAAP[178]. - Interest rate risk is a principal market risk, with fluctuations affecting net interest income and the value of the investment portfolio[185]. - A 1% increase in interest rates would lead to an approximate annual increase of $1.8 million in net investment income, while a 2% and 3% increase would result in increases of approximately $3.5 million and $5.3 million, respectively[186]. - Conversely, a 1% decrease in interest rates would decrease net investment income by approximately $1.8 million, with decreases of $3.5 million and $5.3 million for 2% and 3% declines, respectively[186]. - The company values investments at fair value, determined by the Adviser under approved valuation procedures, with market quotations used when available[187]. - For investments without readily available market values, fair value is determined based on various factors including collateral value, third-party valuations, and the portfolio company's earnings potential[187]. - An independent valuation firm is engaged to provide third-party valuation consulting services, reviewing material investments in illiquid securities at least once every 12 months[187]. - The fair value of investments may differ materially from values that would be used if a ready market existed, due to inherent uncertainties in valuation[187]. - Changes in market conditions and other events may cause realized values on investments to differ from assigned valuations[187]. - The Adviser intends to continue engaging the independent valuation firm for quarterly and annual year-end valuation processes[187].

Reduces Interest Rate Margin to 2.50% from 2.80% Under the terms of the amendment, there was a committed increase to the aggregate principal amount of the Credit Facility in an amount not to exceed $85.0 million, for a total of $200.0 million, the applicable margin was reduced from 2.80% per annum to 2.50% per annum, and there was a committed seven-day bridge advance in an aggregate principal amount of approximately $18.3 million. Additionally, the reinvestment period was extended from April 29, 2025 to Aug ...

Core Viewpoint - Portman Ridge Finance Corporation has amended and extended its senior secured revolving credit facility, increasing commitments and reducing interest rate margins, which may enhance its financial flexibility and investment capacity [6][11]. Group 1: Credit Facility Amendments - The company has increased the aggregate principal amount of its credit facility from $115.0 million to $200.0 million [8][11]. - The applicable interest rate margin has been reduced from 2.80% to 2.50% per annum [11]. - A committed seven-day bridge advance of approximately $18.3 million has been included in the terms of the amendment [11]. Group 2: Refinancing and Maturity Extensions - The refinancing of Senior Secured Notes due November 20, 2029, will occur in connection with the increased credit facility, eliminating approximately $18.3 million of the notes and refinancing $85.0 million [9][11]. - The reinvestment period has been extended from April 29, 2025, to August 29, 2026, and the maturity date has been extended from April 29, 2026, to August 29, 2027 [11]. Group 3: Company Overview - Portman Ridge Finance Corporation is a publicly traded investment company regulated as a business development company under the Investment Company Act of 1940, focusing on middle market investments [7]. - The company manages a portfolio that includes term loans, mezzanine investments, and selected equity securities in middle market companies [7].

Group 1 - Portman Ridge Finance Corporation is a publicly traded, externally managed investment company regulated as a business development company under the Investment Company Act of 1940 [2][4] - The company focuses on middle market investments, including term loans, mezzanine investments, and selected equity securities [2] - Portman Ridge's investment activities are managed by Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors, LP [2] Group 2 - The company will release its financial results for the second quarter ended June 30, 2024, on August 8, 2024, after market close [4] - A conference call to discuss these results is scheduled for August 9, 2024, at 10:00 a.m. ET [4] - A replay of the conference call will be available shortly after the live call through August 16th [5]

By Phone: To access the call, please dial (646) 307-1963 approximately 10 minutes prior to the start of the conference call and use the conference ID 9474953. A live audio webcast of the conference call can be accessed via the Internet, on a listen-only basis at https://edge.media-server.com/mmc/p/zqckbjgv. The online archive of the webcast will be available on the Company's website shortly after the call at www.portmanridge.com in the Investor Relations section under Events and Presentations. By Webcast: P ...

Investment Income - Total investment income for Q1 2024 was $16.5 million, down from $20.3 million in Q1 2023, with interest income from the Debt Securities Portfolio contributing $14.2 million[7] - Total investment income for Q1 2024 was $16.526 million, a decrease of 18% from $20.327 million in Q1 2023[33] Net Investment Income - Net investment income (NII) for Q1 2024 was $6.2 million ($0.67 per share), compared to $8.5 million ($0.89 per share) in Q1 2023, reflecting a decrease due to $0.4 million of reversed income on non-accrual loans[9] - Net investment income for Q1 2024 was $6.226 million, down from $8.529 million in Q1 2023, representing a decline of 27%[33] Net Asset Value - Net asset value (NAV) as of March 31, 2024, was $210.6 million ($22.57 per share), a slight decrease from $213.5 million ($22.76 per share) as of December 31, 2023[3] - Net asset value per common share was $22.57 as of March 31, 2024, compared to $22.76 at the end of 2023, a decrease of approximately 0.84%[31] - The company’s total net assets were $210.607 million as of March 31, 2024, compared to $213.518 million at the end of 2023, a decrease of about 1.8%[31] Share Repurchase - The company repurchased 51,015 shares for approximately $1.0 million during Q1 2024, which was accretive to NAV by $0.02 per share[3] Investment Portfolio - Total investments at fair value as of March 31, 2024, were $471.3 million, an increase from $467.9 million as of December 31, 2023, with investments spread across 29 industries and 103 entities[7] - Non-accruals on debt investments represented 0.5% of the investment portfolio at fair value as of March 31, 2024, unchanged from December 31, 2023[7] - The weighted average contractual interest rate on the Debt Securities Portfolio was approximately 12.1% as of March 31, 2024[7] - Approximately 91.1% of the Debt Securities Portfolio at par value were floating rate, with 79.5% containing SOFR floors between 0.50% and 5.25%[15] Borrowings - As of March 31, 2024, the company had $291.7 million in borrowings with a current weighted average interest rate of 6.9%[12] Financial Position - Total assets decreased to $527.382 million as of March 31, 2024, from $549.239 million at the end of 2023, a reduction of approximately 4%[31] - Total liabilities decreased to $316.775 million as of March 31, 2024, down from $335.721 million at the end of 2023, a decline of about 6%[31] Cash and Management Fees - The company’s cash and cash equivalents decreased to $20.829 million as of March 31, 2024, from $26.912 million at the end of 2023, a decline of about 22.6%[31] - Management fees for Q1 2024 were $1.729 million, down from $1.953 million in Q1 2023, a decrease of approximately 11.5%[33] Realized Losses - The company reported net realized losses on investments of $2.057 million for Q1 2024, compared to losses of $3.085 million in Q1 2023[33] Share Count - The weighted average shares of common stock outstanding for Q1 2024 were 9,344,994, compared to 9,555,125 in Q1 2023[33] Distribution - The company declared a distribution of $0.69 per share for Q2 2024, payable on May 31, 2024[4]

Portman Ridge Finance Corporation (NASDAQ:PTMN) Q1 2024 Earnings Conference Call May 9, 2024 9:00 AM ET Company Participants Ted Goldthorpe - Chief Executive Officer, President & Director Patrick Schafer - Chief Investment Officer Brandon Satoren - Chief Financial Officer Conference Call Participants Christopher Nolan - Ladenburg Deepak Sarpangal - Repertoire Partners Steven Martin - Slater Operator Welcome to Portman Ridge Finance Corporation's First Quarter 2024 Earnings Conference Call. An earnings press ...

Credit Quality | --- | --- | --- | --- | --- | --- | |----------------------------------------------------|---------|---------|---------|----------------------------------------|---------| | ($ in '000s) | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | | Investments Credit Quality – Internal Rating (1) | | | | | | | Performing | 95.1% | 95.1% | 93.5% | 93.7% | 93.7% | | Underperforming | 4.9% | 4.9% | 6.5% | 6.3% | 6.3% | | Investments on Non-Accrual Status | | | | | | | Number of Non-Accrual Investments ...

Part I. Financial Information [Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Portman Ridge Finance Corporation, including Balance Sheets, Statements of Operations, and Cash Flows, for the period ended March 31, 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2024, Portman Ridge reported total assets of $527,382 thousand and net assets of $210,607 thousand, with Net Asset Value per common share at $22.57 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Total Investments at Fair Value | $471,255 | $467,865 | | Total Assets | $527,382 | $549,239 | | Total Liabilities | $316,775 | $335,721 | | **Total Net Assets** | **$210,607** | **$213,518** | | **Net Asset Value Per Common Share** | **$22.57** | **$22.76** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2024, total investment income was $16,526 thousand, with net investment income of $6,226 thousand, and a net increase in net assets from operations of $4,486 thousand Q1 2024 vs. Q1 2023 Operating Results (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Investment Income | $16,526 | $20,327 | | Total Expenses | $10,300 | $11,798 | | **Net Investment Income** | **$6,226** | **$8,529** | | Net Realized and Unrealized Loss | ($1,527) | ($8,474) | | **Net Increase in Net Assets** | **$4,486** | **$55** | | Net Investment Income Per Share | $0.67 | $0.89 | | Net Increase in Net Assets Per Share | $0.48 | $0.01 | [Consolidated Statements of Changes in Net Assets](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets decreased by $2,911 thousand in Q1 2024 to $210,607 thousand, primarily due to stockholder distributions and stock repurchases, partially offset by net increase from operations Reconciliation of Net Assets for Q1 2024 (in thousands) | Description | Amount | | :--- | :--- | | Net Assets at Beginning of Period (Jan 1, 2024) | $213,518 | | Net Increase from Operations | $4,486 | | Distributions Declared | ($6,444) | | Stock Repurchases | ($953) | | **Net Assets at End of Period (Mar 31, 2024)** | **$210,607** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $9,391 thousand in Q1 2024, while net cash used in financing activities was $41,351 thousand, leading to a $31,960 thousand decrease in cash Cash Flow Summary for Q1 2024 (in thousands) | Activity | Amount | | :--- | :--- | | Net Cash Provided by Operating Activities | $9,391 | | Net Cash Used in Financing Activities | ($41,351) | | **Change in Cash and Restricted Cash** | **($31,960)** | | Cash and Restricted Cash, Beginning of Period | $71,564 | | **Cash and Restricted Cash, End of Period** | **$39,604** | [Consolidated Schedules of Investments](index=9&type=section&id=Consolidated%20Schedules%20of%20Investments) The total investment portfolio's fair value was $471,255 thousand as of March 31, 2024, primarily comprising senior secured loans and diversified across various industries Portfolio Composition by Security Type (March 31, 2024) | Security Type | Fair Value (in thousands) | % of Total Portfolio | | :--- | :--- | :--- | | Senior Secured Loan | $349,844 | 74% | | Junior Secured Loan | $36,270 | 8% | | Joint Ventures | $53,164 | 11% | | Equity Securities | $23,428 | 5% | | CLO Fund Securities | $8,549 | 2% | | **Total** | **$471,255** | **100%** | Top 5 Industry Concentrations by Fair Value (March 31, 2024) | Industry Classification | Fair Value (in thousands) | % of Total Portfolio | | :--- | :--- | :--- | | High Tech Industries | $72,617 | 15% | | Services: Business | $59,607 | 13% | | Joint Venture | $53,164 | 11% | | Healthcare & Pharmaceuticals | $56,094 | 12% | | Banking, Finance, Insurance & Real Estate | $51,332 | 11% | - As of March 31, 2024, the company held loans to **79 investee companies** with aggregate principal of approximately **$430,400 thousand**, compared to 80 companies and $420,900 thousand at year-end 2023[96](index=96&type=chunk) - **Seven debt investments** were on non-accrual status as of March 31, 2024, with an aggregate fair value of **$2,200 thousand**, representing **0.5%** of the total investment portfolio's fair value[117](index=117&type=chunk) [Consolidated Financial Highlights](index=29&type=section&id=Consolidated%20Financial%20Highlights) For the first quarter of 2024, the company's total net asset value return was 2.7%, with an annualized ratio of net investment income to average net assets of 11.8%, and an asset coverage ratio of 171% Financial Highlights for the Three Months Ended March 31 | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net asset value, end of period | $22.57 | $23.56 | | Total net asset value return | 2.7% | 0.4% | | Total market return | 8.1% | (7.4)% | | Asset coverage ratio | 171% | 162% | | Ratio of net investment income to average net assets (annualized) | 11.8% | 15.1% | | Ratio of total expenses to average net assets (annualized) | 19.5% | 20.9% | [Notes to Consolidated Financial Statements](index=30&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details the company's accounting policies, investment portfolio composition, borrowings, and related party transactions, providing context for the financial statements [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance, portfolio activity, and liquidity, highlighting total investment income of $16,526 thousand and an asset coverage ratio of 171% [Portfolio and Investment Activity](index=50&type=section&id=MD%26A%20-%20Portfolio%20and%20Investment%20Activity) Q1 2024 saw net portfolio deployment of $3,640 thousand, with the total portfolio fair value increasing slightly to $471,255 thousand, remaining diversified across industries Portfolio Activity for Q1 2024 (in thousands) | Activity | Amount | | :--- | :--- | | Fair Value at Dec 31, 2023 | $467,865 | | Purchases / originations / draws | $39,080 | | Pay-downs / pay-offs / sales | ($35,440) | | Net accretion of interest | $1,276 | | Net realized gains (losses) | ($1,597) | | Increase (decrease) in fair value | $71 | | **Fair Value at Mar 31, 2024** | **$471,255** | - The weighted average contractual interest rate on the interest-earning Debt Securities Portfolio was **12.1%** at March 31, 2024, down from **12.5%** at December 31, 2023[299](index=299&type=chunk)[319](index=319&type=chunk) [Results of Operations](index=52&type=section&id=MD%26A%20-%20Results%20of%20Operations) Total investment income for Q1 2024 was $16,526 thousand, with net investment income of $6,226 thousand, and a net increase in net assets from operations of $4,486 thousand, driven by lower unrealized depreciation Core Investment Income Reconciliation (in thousands) | Description | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Investment Income (GAAP) | $16,526 | $20,327 | | Less: Purchase discount accounting | ($73) | ($1,042) | | **Core Investment Income (Non-GAAP)** | **$16,453** | **$19,285** | Expenses Breakdown (in thousands) | Expense Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Management fees | $1,729 | $1,953 | | Performance-based incentive fees | $1,234 | $1,808 | | Interest and amortization of debt issuance costs | $5,725 | $6,332 | | **Total expenses** | **$10,300** | **$11,798** | - The net change in unrealized appreciation for Q1 2024 was a gain of **$100 thousand**, compared to a loss of **$6,000 thousand** in Q1 2023, which primarily drove the higher net increase in net assets[334](index=334&type=chunk) [Financial Condition, Liquidity, and Capital Resources](index=56&type=section&id=MD%26A%20-%20Financial%20Condition%2C%20Liquidity%2C%20and%20Capital%20Resources) As of March 31, 2024, the company maintained a strong liquidity position with $39,604 thousand in cash and restricted cash, an asset coverage ratio of 171%, and $291,700 thousand in outstanding debt - The company's asset coverage ratio was **171%** as of March 31, 2024, comfortably above the required **150%** minimum[338](index=338&type=chunk) - A renewed stock repurchase program of up to **$10,000 thousand** was authorized on March 11, 2024, effective through March 31, 2025[359](index=359&type=chunk) - The company has unfunded commitments of **$33,300 thousand** to portfolio companies and **$10,900 thousand** to the Great Lakes II Joint Venture as of March 31, 2024[361](index=361&type=chunk)[362](index=362&type=chunk) [Critical Accounting Policies](index=59&type=section&id=MD%26A%20-%20Critical%20Accounting%20Policies) The valuation of Level III portfolio investments is identified as the most critical accounting policy, determined by the Adviser using various methodologies, alongside policies for income recognition and RIC taxation - The Board has designated the Adviser as its 'valuation designee' per SEC Rule 2a-5, responsible for determining the fair value of the investment portfolio[366](index=366&type=chunk) - A majority of the company's investments are classified as **Level III** in the fair value hierarchy, requiring significant management judgment and estimation[370](index=370&type=chunk) - The company places loans on non-accrual status when they become 90 days or more past due or collection is not expected, with **seven investments** on non-accrual status as of March 31, 2024[380](index=380&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's principal market risks are interest rate fluctuations and portfolio valuations, with a hypothetical 1% interest rate increase estimated to raise annual net investment income by approximately $1,700 thousand Hypothetical Impact of Interest Rate Changes on Annual Net Investment Income (in thousands) | Change in Interest Rates | Impact on Net Investment Income | | :--- | :--- | | +3% | $5,192 | | +2% | $3,461 | | +1% | $1,731 | | -1% | ($1,693) | | -2% | ($3,368) | | -3% | ($5,042) | - As of March 31, 2024, approximately **91.1%** of the Debt Securities Portfolio consisted of floating-rate investments, while **$183,700 thousand** of the company's **$291,700 thousand** in debt was floating rate[389](index=389&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%204.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure during the period - None reported [Controls and Procedures](index=62&type=section&id=Item%205.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2024, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are effective[398](index=398&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2024[399](index=399&type=chunk) Part II. Other Information [Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in putative stockholder class action lawsuits inherited from the HCAP acquisition, which are expected to be dismissed via a settlement where Portman Ridge will not incur costs - The company is involved in legal proceedings inherited from the HCAP merger, known as the Delaware Actions[402](index=402&type=chunk) - A settlement has been reached where all claims will be dismissed. Portman Ridge will not be responsible for any portion of the settlement payment[405](index=405&type=chunk) [Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to risk factors were reported for the quarter ended March 31, 2024[406](index=406&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2024, no shares were issued under the DRIP, while **51,015 shares** were repurchased for approximately **$1,000 thousand** under a renewed **$10,000 thousand** stock repurchase program - No shares were issued under the DRIP during Q1 2024[408](index=408&type=chunk) Share Repurchases in Q1 2024 | Period | Total Shares Purchased | Average Price Per Share | | :--- | :--- | :--- | | Jan 1 - Mar 31, 2024 | 51,015 | $18.69 (calculated) | - A renewed **$10,000 thousand** stock repurchase program was authorized on March 11, 2024, and is effective until March 31, 2025[410](index=410&type=chunk) [Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None reported [Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2024, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q1 2024[413](index=413&type=chunk) [Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section references the Exhibit List filed as part of the report, which includes certifications from the CEO and CFO, and XBRL data files - The report includes an exhibit list detailing documents filed with the report, such as officer certifications and XBRL data[414](index=414&type=chunk)[416](index=416&type=chunk)