Fidus Investment (FDUS) - 2019 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION Item 1. Financial Statements This section presents Fidus Investment Corporation's unaudited consolidated financial statements and detailed notes for Q1 2019 Consolidated Statements of Assets and Liabilities | ASSETS / LIABILITIES | March 31, 2019 (unaudited) ($ thousands) | December 31, 2018 ($ thousands) | | :----------------------------- | :--------------------------------------- | :------------------------------ | | ASSETS | | | | Investments, at fair value | 670,481 | 642,982 | | Cash and cash equivalents | 26,209 | 42,015 | | Total assets | 704,849 | 693,876 | | LIABILITIES | | | | SBA debentures, net | 167,332 | 186,734 | | Public Notes, net | 115,087 | 48,411 | | Borrowings under Credit Facility, net | (84) | 36,358 | | Total liabilities | 300,033 | 290,891 | - Total assets increased by $10.97 million from December 31, 2018, to March 31, 2019, primarily driven by an increase in investments at fair value, despite a decrease in cash and cash equivalents[12] - Total liabilities increased by $9.14 million, largely due to a significant increase in Public Notes, partially offset by a decrease in SBA debentures and Credit Facility borrowings[12] Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2019 ($ thousands) | Three Months Ended March 31, 2018 ($ thousands) | | :----------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Total investment income | 20,330 | 18,233 | | Total expenses | 10,729 | 10,575 | | Net investment income | 9,599 | 7,527 | | Net realized gain (loss) on investments | (1,591) | 7,278 | | Net change in unrealized appreciation (depreciation) | 3,545 | 2,117 | | Net increase in net assets from operations | 11,372 | 15,025 | | Net investment income per share | $0.39 | $0.31 | | Net increase in net assets per share | $0.46 | $0.61 | | Dividends declared per share | $0.39 | $0.39 | - Net investment income increased by $2.07 million (27.5%) year-over-year, driven by higher total investment income, while total expenses remained relatively stable[17] - The company experienced a net realized loss on investments of $1.59 million in Q1 2019, a significant decline from a $7.28 million gain in Q1 2018[17] Consolidated Statements of Changes in Net Assets | Metric | Three Months Ended March 31, 2019 ($ thousands) | Three Months Ended March 31, 2018 ($ thousands) | | :----------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Balances at December 31 | 402,985 | 393,273 | | Net investment income | 9,599 | 7,527 | | Net realized gain (loss) on investments, net of taxes | (1,583) | 5,531 | | Net unrealized appreciation (depreciation) on investments | 3,545 | 2,117 | | Dividends declared | (9,541) | (9,558) | | Balances at March 31 | 404,816 | 398,158 | - Net assets increased from $402.99 million at December 31, 2018, to $404.82 million at March 31, 2019, primarily due to net investment income and unrealized appreciation, partially offset by realized losses and dividends[20] Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2019 ($ thousands) | Three Months Ended March 31, 2018 ($ thousands) | | :----------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net cash provided by (used for) operating activities | (16,511) | (17,775) | | Net cash provided by (used for) financing activities | 705 | 9,000 | | Net increase (decrease) in cash and cash equivalents | (15,806) | (8,775) | | Cash and cash equivalents, end of period | 26,209 | 32,797 | - Net cash used in operating activities decreased by $1.26 million year-over-year, primarily due to lower purchases of investments and higher proceeds from sales and repayments[25] - Net cash provided by financing activities significantly decreased from $9.00 million in Q1 2018 to $0.71 million in Q1 2019, mainly due to higher repayments of SBA debentures and Credit Facility borrowings, despite increased proceeds from Public Notes[25] Consolidated Schedules of Investments | Investment Type | March 31, 2019 Fair Value ($ thousands) | December 31, 2018 Fair Value ($ thousands) | | :------------------- | :-------------------------------------- | :----------------------------------------- | | Second Lien Debt | 362,680 | 366,517 | | Subordinated Debt | 125,252 | 104,225 | | First Lien Debt | 55,511 | 51,790 | | Equity | 115,952 | 106,707 | | Warrants | 11,086 | 13,743 | | Total Investments | 670,481 | 642,982 | - The total investment portfolio at fair value increased by $27.5 million from December 31, 2018, to March 31, 2019, reaching $670.48 million[98] - Second Lien Debt remains the largest component of the portfolio, though its fair value slightly decreased, while Subordinated Debt and Equity investments saw increases[98] Notes to Consolidated Financial Statements Note 1. Organization and Nature of Business - Fidus Investment Corporation (FIC) operates as an externally managed, closed-end, non-diversified business development company (BDC) and has elected to be treated as a regulated investment company (RIC) for federal income tax purposes[51] - The Company provides customized debt and equity financing solutions to lower middle-market companies, primarily through its three wholly-owned Small Business Investment Company (SBIC) subsidiaries (Fund I, Fund II, and Fund III), which allows access to SBA-guaranteed debentures[52][53] Note 2. Significant Accounting Policies - The financial statements are prepared in accordance with GAAP, ASC 946, and Regulation S-X, requiring management to make estimates and assumptions, particularly for fair value measurements[55][56] - Investment classifications are defined by the 1940 Act as 'Control Investments' (over 25% voting securities or control), 'Affiliate Investments' (5% to 25% voting securities), and 'Non-Control/Non-Affiliate Investments'[61] - The Company changed its presentation of realized losses on extinguishment of debt in 2019, now classifying it separately rather than as part of interest and financing expenses, with retrospective reclassification for prior periods[65] Note 3. Portfolio Company Investments Portfolio Company Metrics | Metric | March 31, 2019 | December 31, 2018 | | :----------------------------------- | :------------- | :---------------- | | Active portfolio companies | 61 | 60 | | Residual investments | 4 | 3 | | Aggregate fair value of total portfolio | $670,481k | $642,982k | | Weighted average effective yield on debt investments | 12.4% | 12.6% | | Equity investments held in portfolio companies | 93.8% | 93.7% | | Weighted average fully diluted equity ownership | 6.4% | 6.6% | Investment Activity | Investment Activity (3 months ended) | March 31, 2019 ($ thousands) | March 31, 2018 ($ thousands) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Purchases of debt and equity investments | 80,473 | 60,913 | | Proceeds from sales and repayments | 57,352 | 36,093 | - As of March 31, 2019, the Company had two debt investments on non-accrual status, totaling $12.63 million at fair value, compared to $20.76 million at December 31, 2018[103] Note 4. Fair Value Measurements - All portfolio investments are valued at fair value using Level 3 inputs due to the lack of readily available market quotations for these privately held debt and equity securities[110] - The Board employs a multi-step valuation process quarterly, involving initial evaluation by investment professionals, discussion with the investment committee, independent appraisals of selected investments, and review by the audit committee[111] Valuation Techniques and Unobservable Inputs | Valuation Technique / Unobservable Input | March 31, 2019 Range (weighted average) | December 31, 2018 Range (weighted average) | | :--------------------------------------- | :-------------------------------------- | :----------------------------------------- | | Debt investments: Discounted cash flow (WACC) | 10.0% - 30.0% (12.1% - 13.4%) | 10.2% - 30.0% (12.3% - 13.5%) | | Equity investments: Enterprise value (EBITDA multiples) | 2.5x - 17.3x (7.0x) | 3.5x - 17.3x (7.0x) | Note 5. Related Party Transactions - The Company pays a base management fee of 1.75% annually on total assets (excluding cash) and an incentive fee to Fidus Investment Advisors, LLC, based on pre-incentive fee net investment income and net capital gains[136][137][143] Related Party Fees | Fee Type | Three Months Ended March 31, 2019 ($ thousands) | Three Months Ended March 31, 2018 ($ thousands) | | :------------------- | :---------------------------------------------- | :---------------------------------------------- | | Base management fee | 2,871 | 2,685 | | Income incentive fee | 2,485 | 2,224 | | Capital gains incentive fee accrued (reversed) | 355 | 1,530 | - The Company also reimburses the Investment Advisor for administrative service expenses, which were $399k for both Q1 2019 and Q1 2018[148] Note 6. Debt - The Credit Facility's commitment was increased to $90 million in October 2018, with allowance for future increases up to $100 million, and it matures on June 16, 2019[149] Outstanding Debt | Debt Type | March 31, 2019 Outstanding ($ thousands) | December 31, 2018 Outstanding ($ thousands) | | :------------------- | :--------------------------------------- | :------------------------------------------ | | SBA debentures | 171,250 | 191,000 | | 2023 Notes | 50,000 | 50,000 | | 2024 Notes | 69,000 | — | | Total outstanding debt | 290,250 | 277,500 | - The Company issued $69 million in 6.000% notes due 2024 (2024 Notes) in February 2019, increasing its Public Notes outstanding[157] Interest and Financing Expenses | Interest and Financing Expenses (3 months ended) | March 31, 2019 ($ thousands) | March 31, 2018 ($ thousands) | | :----------------------------------------------- | :--------------------------- | :--------------------------- | | Stated interest expense | 3,309 | 2,615 | | Amortization of deferred financing costs | 415 | 317 | | Total interest and financing expenses | 3,724 | 2,932 | Note 7. Commitments and Contingencies Unfunded Commitments | Commitment Type | March 31, 2019 Unfunded Commitment ($ thousands) | December 31, 2018 Unfunded Commitment ($ thousands) | | :--------------------------------------------- | :----------------------------------------------- | :-------------------------------------------------- | | Undrawn revolving loans, other debt investments, and capital commitments | 10,174 | 10,846 | - The Company's unfunded commitments to portfolio companies decreased slightly from $10.85 million at December 31, 2018, to $10.17 million at March 31, 2019[165] Note 8. Common Stock - The Company did not repurchase any common stock under its Stock Repurchase Program during the three months ended March 31, 2019, compared to 44,821 shares repurchased for $582k in the same period of 2018[172][174] - As of March 31, 2019, and December 31, 2018, the Company had 24,463,119 shares of common stock outstanding[175] Note 9. Dividends and Distributions Dividends Declared | Dividend Date Declared | Record Date | Payment Date | Per Share Amount ($) | Total Distribution ($ thousands) | | :--------------------- | :---------- | :----------- | :------------------- | :------------------------------- | | 1/31/2019 | 3/8/2019 | 3/22/2019 | 0.39 | 9,541 | - For the three months ended March 31, 2019, the Company declared and paid a regular quarterly dividend of $0.39 per share, totaling $9.54 million[177] - The Company satisfied its DRIP obligation by repurchasing 21,855 shares on the open market for $333k during Q1 2019, at an average price of $15.25 per share[179] Note 10. Financial Highlights Financial Highlights: Per Share Data | Per Share Data (3 months ended) | March 31, 2019 ($) | March 31, 2018 ($) | | :----------------------------------------- | :----------------- | :----------------- | | Net asset value at beginning of period | 16.47 | 16.05 | | Net investment income | 0.39 | 0.31 | | Net realized gain (loss) on investments, net of tax | (0.06) | 0.22 | | Net unrealized appreciation (depreciation) on investments | 0.14 | 0.09 | | Total increase from investment operations | 0.46 | 0.61 | | Dividends to stockholders | (0.39) | (0.39) | | Net asset value at end of period | 16.55 | 16.28 | Financial Highlights: Ratios to Average Net Assets | Ratios to Average Net Assets (Annualized) | March 31, 2019 | March 31, 2018 | | :---------------------------------------- | :------------- | :------------- | | Total expenses | 10.6% | 10.8% | | Net investment income | 9.5% | 7.5% | | Total return based on market value | 32.1% | (14.7%) | | Total return based on net asset value | 2.8% | 3.8% | | Portfolio turnover ratio | 34.8% | 23.5% | Note 11. Subsequent Events - On April 24, 2019, the Credit Facility was amended to increase total commitments from $90 million to $100 million, extend the maturity date to April 24, 2023, and reduce pricing from LIBOR plus 3.50% to LIBOR plus 3.00%[184] - On April 29, 2019, the Board declared a regular quarterly dividend of $0.39 per share, payable on June 21, 2019[185] - The Board approved a minimum asset coverage ratio of 150% under the 1940 Act, effective April 29, 2020, allowing for increased leverage capacity[186] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2019 financial performance, investment strategy, liquidity, and critical accounting policies Overview - Fidus Investment Corporation (FIC) provides customized debt and equity financing solutions to lower middle-market companies (revenues $10M-$150M) with an objective to generate current income and capital appreciation[194] - The Company operates as a BDC and utilizes three wholly-owned SBIC subsidiaries (Fund I, Fund II, Fund III) to access SBA-guaranteed debentures, enhancing investment opportunities and returns[196] Investments - The investment portfolio primarily consists of debt investments (second lien, subordinated, first lien) and equity securities (common/preferred stock, warrants), with typical investment sizes ranging from $5 million to $30 million per company[198][199][200][203][205] - Debt investments often feature fixed interest rates, deferred amortization, payment-in-kind (PIK) interest, and principal prepayment penalties, while equity investments are typically minority interests with protective provisions[199][202][204][205] Revenues - Revenue is generated from interest and fee income on debt investments and dividends on equity investments, with interest accrued daily and dividend income recognized when declared or received[206] - Debt investment origination fees, OID, and market discount/premium are capitalized and accreted into interest income, while prepayment penalties are recorded as fee income when earned[206] - Investments are placed on non-accrual status when payments are materially past due or collection is doubtful, with PIK income ceasing accrual under such conditions[206] Expenses - The Company bears all out-of-pocket operating and transaction costs, including organization, valuation, interest on debt, offering expenses, investment advisory and administration fees, transfer agent fees, federal and state taxes, and professional fees[209] - Investment advisory and management services, along with allocable compensation and routine overhead, are provided and paid for by the investment advisor, not the Company[209] Portfolio Composition, Investment Activity and Yield Investment Activity | Investment Activity (3 months ended) | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Purchases of investments | 80.5 | 60.9 | | Proceeds from sales and repayments | 57.4 | 36.1 | - As of March 31, 2019, the fair value of the investment portfolio was $670.5 million, comprising 61 active and 4 residual portfolio companies, with a net unrealized appreciation of $47.8 million[211][212] - The weighted average yield on debt investments decreased slightly from 12.6% at December 31, 2018, to 12.4% at March 31, 2019[214] Portfolio Asset Quality - The Company uses a five-level internal investment rating system (1-least risk, 5-most risk) to monitor credit profile and expected returns, with new investments typically starting at Rating 2[218] Investment Portfolio by Rating | Investment Rating | March 31, 2019 Fair Value ($ millions) | December 31, 2018 Fair Value ($ millions) | | :---------------- | :------------------------------------- | :---------------------------------------- | | 1 | 108.2 (16.2%) | 123.8 (19.2%) | | 2 | 482.6 (72.0%) | 403.1 (62.7%) | | 3 | 70.0 (10.4%) | 94.3 (14.7%) | | 4 | 8.9 (1.3%) | 21.3 (3.3%) | | 5 | 0.8 (0.1%) | 0.5 (0.1%) | - The weighted average rating of the portfolio remained stable at 2.0 on a fair value basis for both March 31, 2019, and December 31, 2018[220] Non-Accrual Non-Accrual Portfolio Companies | Portfolio Company | March 31, 2019 Fair Value ($ millions) | December 31, 2018 Fair Value ($ millions) | | :-------------------------------------------------------- | :------------------------------------- | :---------------------------------------- | | K2 Industrial Services, Inc. | — (1) | 13.2 | | Oaktree Medical Centre, P.C. (dba Pain Management Associates) | 6.4 (3) | — (2) | | US GreenFiber, LLC | 6.2 | 7.6 | | Total | 12.6 | 20.8 | - The total fair value of debt investments on non-accrual status decreased from $20.8 million at December 31, 2018, to $12.6 million at March 31, 2019, primarily due to the exit of K2 Industrial Services, Inc[221] Discussion and Analysis of Results of Operations Investment Income Investment Income by Category | Investment Income Category (3 months ended) | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | Change ($ millions) | % Change | | :------------------------------------------ | :-------------------------- | :-------------------------- | :------------------ | :------- | | Interest income | 15.2 | 14.7 | 0.5 | 3.5% | | Payment-in-kind interest income | 2.6 | 1.7 | 0.9 | 56.6% | | Dividend income | 0.3 | 0.4 | (0.1) | (12.7%) | | Fee income | 2.1 | 1.4 | 0.7 | 46.1% | | Total investment income | 20.3 | 18.2 | 2.1 | 11.5% | - Total investment income increased by $2.1 million (11.5%) year-over-year, primarily driven by a $1.5 million increase in total interest income (including PIK) due to higher average debt investment balances and a $0.7 million increase in fee income from structuring and prepayment fees[224][225] Expenses Expenses by Category | Expense Category (3 months ended) | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | Change ($ millions) | % Change | | :---------------------------------------- | :-------------------------- | :-------------------------- | :------------------ | :------- | | Interest and financing expenses | 3.7 | 3.0 | 0.7 | 27.0% | | Base management fee | 2.9 | 2.7 | 0.2 | 6.9% | | Income incentive fee | 2.5 | 2.2 | 0.3 | 11.7% | | Capital gains incentive fee | 0.3 | 1.5 | (1.2) | (76.8%) | | Total expenses, including income tax provision | 10.7 | 10.7 | — | NM | - Total expenses remained flat year-over-year at $10.7 million, with a $0.7 million increase in interest and financing expenses and a $0.3 million increase in income incentive fee offset by a $1.2 million decrease in capital gains incentive fee[228] Net Investment Income - Net investment income increased by $2.1 million (27.5%) to $9.6 million for the three months ended March 31, 2019, compared to $7.5 million in the same period of 2018, driven by higher total investment income[229] Net Gain (Loss) on Investments Net Realized Gains (Losses) on Investments | Realized Gains (Losses) (3 months ended) | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | | :--------------------------------------- | :-------------------------- | :-------------------------- | | Net realized gain (loss) on investments | (1.6) | 7.3 | Net Change in Unrealized Appreciation (Depreciation) | Unrealized Appreciation (Depreciation) (3 months ended) | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | | :------------------------------------------------------ | :-------------------------- | :-------------------------- | | Exit, sale or restructuring of investments | 2.0 | (4.0) | | Fair value adjustments to debt investments | (2.3) | (5.2) | | Fair value adjustments to equity investments | 3.8 | 11.3 | | Net change in unrealized appreciation (depreciation) | 3.5 | 2.1 | - The Company recorded a net realized loss of $1.6 million in Q1 2019, primarily from the exit of K2 Industrial Services, Inc. and Consolidated Infrastructure Group Holdings, LP, contrasting with a $7.3 million net realized gain in Q1 2018[230][231] Net Increase in Net Assets Resulting From Operations - Net increase in net assets resulting from operations decreased to $11.4 million for the three months ended March 31, 2019, from $15.0 million in the prior year period, primarily due to the shift from net realized gains to net realized losses on investments[233] Liquidity and Capital Resources - As of March 31, 2019, the Company had $26.2 million in cash and cash equivalents and $404.8 million in net assets, with anticipated funding from future securities offerings, borrowings, and operational cash flows[234] - The Company's SBIC subsidiaries can issue SBA-guaranteed debentures up to $175 million per SBIC or a maximum of $350 million for three or more SBICs under common control, with Fund III having access to $175 million in additional debentures[238] - The Board approved a reduction in the minimum asset coverage ratio from 200% to 150%, effective April 29, 2020, which will increase the Company's leverage capacity[250] Critical Accounting Policies and Use of Estimates - Investment valuation is a critical accounting estimate, as the Company values substantially all illiquid portfolio investments at fair value, determined in good faith by the board of directors using a multi-step process and both market and income approaches[255][256][257][259] - Revenue recognition policies for interest, dividends, PIK income, warrants, and fees are detailed, including accrual methods and non-accrual status criteria[268][269][270][271][272][273][274] Recently Issued Accounting Standards - The Company is evaluating the impact of ASU 2018-13 (Fair Value Measurement disclosure changes), effective after December 15, 2019[275] - The Company adopted SEC Final Rule Release No. 33-10618 (FAST Act Modernization) effective May 2, 2019, which includes presentation changes not significant to current financial position or disclosures[276] Off-Balance Sheet Arrangements Off-Balance Sheet Unfunded Commitments | Commitment Type | March 31, 2019 Unfunded Commitment ($ millions) | December 31, 2018 Unfunded Commitment ($ millions) | | :--------------------------------------------- | :---------------------------------------------- | :-------------------------------------------------- | | Undrawn revolving loans, other debt investments, and capital commitments | 10.2 | 10.9 | - Off-balance sheet arrangements consist of outstanding commitments to fund various undrawn revolving loans, other debt investments, and capital commitments, totaling $10.2 million as of March 31, 2019[278] Related Party Transactions - The Company has business relationships with Fidus Investment Advisors, LLC (investment advisor and administrator) and Fidus Partners, LLC (license agreement for name use)[280][281] - Exemptive relief from the SEC allows FIC and Fund I to operate effectively as one company, including co-investing with affiliated funds under certain conditions and excluding SBA-guaranteed indebtedness from asset coverage requirements[281][282] Recent Developments - On April 24, 2019, the Credit Facility was amended to increase total commitments to $100 million, extend maturity to April 24, 2023, and reduce pricing to LIBOR plus 3.00%[285] - On April 29, 2019, the Board declared a regular quarterly dividend of $0.39 per share and approved a minimum asset coverage ratio of 150%, effective April 29, 2020[286][287] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's interest rate risk exposure, investment and borrowing composition, and sensitivity analysis - The Company is subject to interest rate risk, affecting both funding costs and investment portfolio valuation, with risk management systems in place to monitor and analyze these risks[287][288] - As of March 31, 2019, $80.3 million (fair value) of the portfolio's debt investments bore interest at a variable rate, while SBA debentures and Public Notes carried fixed rates, and the Credit Facility had variable interest rates (though no outstanding borrowings)[287][290] Interest Rate Sensitivity Analysis | Basis Point Increase (Decrease) | Net Increase (Decrease) in Net Investment Income ($ millions) | | :------------------------------ | :---------------------------------------------------------- | | (200) | (0.8) | | (150) | (0.7) | | (100) | (0.6) | | (50) | (0.3) | | 50 | 0.3 | | 100 | 0.6 | | 150 | 1.0 | | 200 | 1.3 | | 250 | 1.6 | | 300 | 1.9 | Item 4. Controls and Procedures CEO and CFO confirm effective disclosure controls and no material changes in internal control for Q1 2019 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2019, providing reasonable assurance that information is recorded, processed, summarized, and reported timely[291] - There were no changes in internal control over financial reporting during the first quarter of 2019 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[292] PART II — OTHER INFORMATION Item 1. Legal Proceedings The Company and its investment advisor are not currently subject to any material legal proceedings - Neither Fidus Investment Corporation nor its investment advisor is currently involved in any material legal proceedings[293] Item 1A. Risk Factors This section highlights increased leverage risk from the Board's approval to reduce the asset coverage ratio to 150% - Recent legislation allows BDCs to increase leverage capacity by reducing the asset coverage ratio from 200% to 150%, which can be approved by stockholders or by a majority of independent directors (effective after one year)[295] - The Board approved a minimum asset coverage ratio of 150% on April 29, 2019, which will become effective on April 29, 2020, increasing the Company's leverage and magnifying both potential gains and losses[297][296] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales or stock repurchases occurred, but shares were bought for DRIP obligations - No unregistered sales of equity securities occurred during the reporting period[298] - The Company did not repurchase any common stock under its Stock Repurchase Program during the three months ended March 31, 2019[301] - To satisfy its dividend reinvestment plan (DRIP) obligation, the Company purchased and reissued 21,855 shares of common stock on the open market at an average price of $15.25 per share during March 2019[301] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[302] Item 4. Mine Safety Disclosures The Company has no mine safety disclosures to report - The Company has no mine safety disclosures[303] Item 5. Other Information No other information was reported in this section - No other information was reported in this section[304] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, primarily consisting of CEO and CFO certifications required by the Sarbanes-Oxley Act - Exhibits include CEO and CFO certifications pursuant to Rule 13a-14 and Section 1350 of the Sarbanes-Oxley Act of 2002[306][307]