Runway Growth Finance (US:RWAY)2023-11-07 21:01markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited financial statements for Q3 2023, including Statements of Assets and Liabilities, Operations, Changes in Net Assets, Cash Flows, and Schedules of Investments [Statements of Assets and Liabilities](index=3&type=section&id=Statements%20of%20Assets%20and%20Liabilities) Total assets decreased to **$1.03 billion** by September 30, 2023, from **$1.14 billion** at December 31, 2022, due to reduced investments and credit facility debt Assets and Liabilities Summary | Metric | Sep 30, 2023 (Unaudited, in thousands) | Dec 31, 2022 (in thousands) | | :-------------------------------------------------------------------------------- | :------------------------------------- | :-------------------------- | | Total investments at fair value | $1,010,927 | $1,126,309 | | Cash and cash equivalents | $14,945 | $5,761 | | Total assets | $1,034,191 | $1,141,766 | | Total debt, less unamortized deferred debt costs | $440,985 | $548,957 | | Total liabilities | $463,700 | $565,714 | | Total net assets | $570,491 | $576,052 | | Net asset value per share | $14.08 | $14.22 | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) Investment income and net investment income rose significantly for Q3 and nine months ended September 30, 2023, driven by higher interest income, despite negative unrealized gains Operating Results Summary | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total investment income | $43,779 | $27,037 | $124,984 | $71,294 | | Total operating expenses | $21,743 | $12,539 | $65,026 | $29,858 | | Net investment income | $22,036 | $14,498 | $59,958 | $41,436 | | Net realized and unrealized gain (loss) on investments | $(7,214) | $(2,776) | $(10,832) | $(27,678) | | Net increase (decrease) in net assets resulting from operations | $14,822 | $11,722 | $49,126 | $13,758 | | Net investment income per common share (basic and diluted) | $0.54 | $0.36 | $1.48 | $1.01 | | Net increase (decrease) in net assets resulting from operations per common share (basic and diluted) | $0.37 | $0.29 | $1.21 | $0.33 | [Statements of Changes in Net Assets](index=5&type=section&id=Statements%20of%20Changes%20in%20Net%20Assets) Net assets slightly decreased for the nine months ended September 30, 2023, from **$576.1 million** to **$570.5 million**, as dividends offset operational increases Changes in Net Assets Summary | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | | Balances at December 31, 2022/2021 | $576,052 | $606,195 | | Net increase (decrease) in net assets resulting from operations | $49,126 | $13,758 | | Dividends paid to stockholders | $(54,687) | $(37,006) | | Balances at September 30, 2023/2022 | $570,491 | $573,661 | [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) Operating activities generated **$174.1 million** cash for the nine months ended September 30, 2023, while financing used **$164.9 million** from debt repayments and dividends Cash Flow Summary | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by (used in) operating activities | $174,080 | $(164,114) | | Net cash (used in) provided by financing activities | $(164,896) | $165,191 | | Net increase (decrease) in cash | $9,184 | $1,077 | | Cash and cash equivalents at end of period | $14,945 | $5,774 | | Interest paid | $27,902 | $3,124 | [Schedule of Investments as of September 30, 2023](index=7&type=section&id=Schedule%20of%20Investments%20as%20of%20September%2030%2C%202023) Total investments at fair value were **$1.01 billion** as of September 30, 2023, primarily Senior Secured Term Loans, diversified across sectors like Application Software and Health Care Technology Investment Portfolio by Type (September 30, 2023) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | Percentage of Total Investments | | :-------------------------------- | :----------------- | :----------------------- | :------------------------------ | | Non-Control/Non-Affiliate Investments | $971,230 | $951,779 | 94.15% | | Affiliate Investments | $55,681 | $47,535 | 4.70% | | Control Investments | $17,963 | $11,613 | 1.15% | | **Total Investments** | **$1,044,874** | **$1,010,927** | **100.00%** | Investment Portfolio by Industry (September 30, 2023) | Industry | Fair Value ($ thousands) | Percentage of Net Assets | | :----------------------------------- | :----------------------- | :----------------------- | | Health Care Technology | $204,760 | 35.89% | | Application Software | $175,305 | 30.72% | | Data Processing & Outsourced Services | $118,247 | 20.72% | | Human Resource & Employment Services | $113,261 | 19.85% | | Internet Software and Services | $90,250 | 15.82% | | System Software | $83,927 | 14.71% | | Property & Casualty Insurance | $75,050 | 13.16% | | Internet & Direct Marketing Retail | $55,878 | 9.80% | | Electronic Equipment & Instruments | $52,127 | 9.14% | | Education Services | $25,592 | 4.49% | | Health Care Equipment | $15,141 | 2.66% | | Technology Hardware, Storage & Peripherals | $922 | 0.16% | | Specialized Consumer Services | $389 | 0.07% | | Biotechnology | $78 | 0.01% | | Computer & Electronics Retail | $- | - | | **Total** | **$1,010,927** | **177.20%** | [Schedule of Investments as of December 31, 2022](index=15&type=section&id=Schedule%20of%20Investments%20as%20of%20December%2031%2C%202022) Total investments at fair value were **$1.13 billion** as of December 31, 2022, predominantly Senior Secured Term Loans, with Health Care Technology and Application Software as leading sectors Investment Portfolio by Type (December 31, 2022) | Investment Type | Cost ($ thousands) | Fair Value ($ thousands) | Percentage of Total Investments | | :-------------------------------- | :----------------- | :----------------------- | :------------------------------ | | Non-Control/Non-Affiliate Investments | $1,126,879 | $1,114,935 | 99.00% | | Affiliate Investments | $4,551 | $2,084 | 0.18% | | Control Investments | $19,172 | $9,290 | 0.82% | | **Total Investments** | **$1,150,602** | **$1,126,309** | **100.00%** | Investment Portfolio by Industry (December 31, 2022) | Industry | Fair Value ($ thousands) | Percentage of Net Assets | | :----------------------------------- | :----------------------- | :----------------------- | | Health Care Technology | $240,844 | 41.81% | | Application Software | $184,084 | 31.96% | | Data Processing & Outsourced Services | $97,404 | 16.91% | | Human Resource & Employment Services | $97,788 | 16.98% | | Internet Software and Services | $149,780 | 26.00% | | System Software | $78,274 | 13.58% | | Property & Casualty Insurance | $49,440 | 8.58% | | Internet & Direct Marketing Retail | $55,986 | 9.72% | | Electronic Equipment & Instruments | $78,114 | 13.56% | | Education Services | $25,305 | 4.39% | | Health Care Equipment | $27,433 | 4.76% | | Technology Hardware, Storage & Peripherals | $1,068 | 0.19% | | Specialized Consumer Services | $796 | 0.14% | | Biotechnology | $39,925 | 6.93% | | Computer & Electronics Retail | $68 | 0.01% | | **Total** | **$1,126,309** | **195.52%** | [Notes to Financial Statements](index=22&type=section&id=Notes%20to%20Financial%20Statements) This section details accounting policies, organizational structure, related party transactions, investment classifications, fair value measurements, credit risk, borrowings, commitments, net assets, income taxes, financial highlights, and subsequent events [Note 1 – Organization](index=22&type=section&id=Note%201%20%E2%80%93%20Organization) Runway Growth Finance Corp. is an externally managed BDC and RIC, aiming to maximize total return through current income from loans and capital appreciation from equity positions - The Company is an externally managed BDC and intends to qualify as a RIC, focusing on lending to and investing in high growth-potential companies in technology, life sciences, healthcare information and services, business services, and other high-growth industries in the United States[62](index=62&type=chunk)[63](index=63&type=chunk) - The Company's investment objective is to maximize total return to stockholders primarily through current income on its loan portfolio and secondarily through capital appreciation on warrants and other equity positions[63](index=63&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=22&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's accounting principles, including U.S. GAAP and ASC Topic 946, detailing policies for cash, debt, investments, foreign currency, non-accrual investments, and fair value measurements, emphasizing Level 3 inputs - The financial statements are prepared in conformity with U.S. GAAP and specialized accounting guidance for investment companies (ASC Topic **946**)[65](index=65&type=chunk) - For the three and nine months ended September 30, 2023, approximately **11.9%** and **12.3%**, respectively, of total investment income was attributable to non-cash Payment-in-Kind (PIK) interest, which affects taxable income for RIC qualification[73](index=73&type=chunk) - As of September 30, 2023, one loan to Pivot3, Inc. with a cost basis of **$18.0 million** and fair value of **$11.6 million** was on non-accrual status, representing **1.1%** of the total investment portfolio[77](index=77&type=chunk) - The majority of the company's investments are considered Level **3** assets under ASC Topic **820**, requiring significant management judgment due to unobservable inputs in valuation models[86](index=86&type=chunk) [Note 3 – Related Party Agreements and Transactions](index=30&type=section&id=Note%203%20%E2%80%93%20Related%20Party%20Agreements%20and%20Transactions) The company has an Advisory Agreement with Runway Growth Capital LLC (RGC) for investment management, an Administration Agreement, and a License Agreement, with Oaktree Capital Management affiliates holding approximately **52%** of outstanding shares - The base management fee is **0.375%** (**1.50%** annualized) of average daily Gross Assets if assets are ≥ **$1.0 billion**, **0.40%** (**1.60%** annualized) if between **$500.0 million** and **$1.0 billion**, and **0.4375%** (**1.75%** annualized) if < **$500.0 million**[107](index=107&type=chunk) Related Party Fees and Expenses | Fee Type | 3 Months Ended Sep 30, 2023 (in thousands) | 3 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2023 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | | :---------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Management fees | $4,302 | $3,066 | $12,598 | $8,488 | | Incentive fees | $5,511 | $3,626 | $14,994 | $8,591 | | Administration agreement expenses | $449 | $459 | $1,647 | $1,331 | - As of September 30, 2023, OCM Growth and Oaktree Opportunities Fund Xb Holdings (Delaware), L.P. (affiliates of Oaktree) collectively own approximately **52%** of the Company's outstanding common stock[122](index=122&type=chunk) [Note 4 – Investments](index=34&type=section&id=Note%204%20%E2%80%93%20Investments) This note details investment classification by affiliation and control, portfolio breakdown by region and industry, and the impact of derivative financial instruments like warrants on gains and losses - Affiliate investments are defined as owning **5.0%** to **25.0%** of voting securities, while control investments involve owning over **25.0%** of voting securities or greater than **50%** board representation[124](index=124&type=chunk) Geographic Investment Breakdown | Geographic Region | Sep 30, 2023 Fair Value ($ thousands) | Sep 30, 2023 % of Net Assets | Dec 31, 2022 Fair Value ($ thousands) | Dec 31, 2022 % of Net Assets | | :------------------------ | :------------------------------------ | :---------------------------- | :------------------------------------ | :---------------------------- | | Western United States | $362,323 | 63.50% | $346,372 | 60.13% | | Northeastern United States | $257,623 | 45.16% | $351,654 | 61.04% | | Midwestern United States | $100,641 | 17.64% | $74,745 | 12.98% | | South Central United States | $86,702 | 15.20% | $85,000 | 14.76% | | United Kingdom | $76,101 | 13.34% | $60,783 | 10.55% | | Germany | $45,039 | 7.89% | $46,499 | 8.07% | | Southeastern United States | $41,622 | 7.30% | $74,797 | 12.98% | | Northwestern United States | $26,468 | 4.64% | $72,615 | 12.61% | | Canada | $14,408 | 2.53% | $13,844 | 2.40% | | **Total** | **$1,010,927** | **177.20%** | **$1,126,309** | **195.52%** | Warrant Realized and Unrealized Gains/Losses | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net realized gain (loss) from warrants | $0 | $(600) | $(1,200) | $(900) | | Net unrealized gain (loss) from warrants | $(500) | $100 | $(3,100) | $300 | [Note 5 – Fair Value of Financial Instruments](index=37&type=section&id=Note%205%20%E2%80%93%20Fair%20Value%20of%20Financial%20Instruments) The majority of portfolio investments (**$998.4 million**) were classified as Level **3** as of September 30, 2023, indicating reliance on unobservable inputs for valuation, with significant purchases and repayments impacting the rollforward Fair Value Hierarchy of Portfolio Investments | Portfolio Investments (in thousands) | Sep 30, 2023 Level 1 | Sep 30, 2023 Level 2 | Sep 30, 2023 Level 3 | Sep 30, 2023 Total | | :----------------------------------- | :------------------- | :------------------- | :------------------- | :------------------- | | Senior Secured Term Loans | $— | $— | $947,515 | $947,515 | | Second Lien Term Loans | $— | $— | $14,178 | $14,178 | | Preferred Stock | $11,219 | $— | $22,039 | $33,258 | | Common Stock | $1,077 | $— | $886 | $1,963 | | Warrants | $— | $197 | $13,816 | $14,013 | | **Total Portfolio Investments** | **$12,296** | **$197** | **$998,434** | **$1,010,927** | Level 3 Assets Rollforward | Level 3 Assets Rollforward (in thousands) | Preferred Stock | Common Stock | Senior Secured Term Loans | Second Lien Term Loans | Warrants | Total | | :--------------------------------------- | :-------------- | :----------- | :------------------------ | :--------------------- | :------- | :------ | | Fair value at December 31, 2022 | $347 | $1,174 | $1,080,121 | $13,654 | $16,650 | $1,111,946 | | Purchases of investments | $25,000 | $— | $78,611 | $— | $1,506 | $105,117 | | PIK interest | $— | $— | $14,895 | $439 | $— | $15,334 | | Sales or repayments of investments | $— | $— | $(232,717) | $— | $— | $(232,717) | | Net realized gain (loss) | $— | $— | $— | $— | $(1,178) | $(1,178) | | Net change in unrealized gain (loss) | $(3,308) | $(288) | $(616) | $— | $(2,271) | $(6,483) | | Fair value at September 30, 2023 | $22,039 | $886 | $947,515 | $14,178 | $13,816 | $998,434 | | Net change in unrealized gain (loss) on Level 3 investments still held as of September 30, 2023 | $(3,308) | $(286) | $(1,207) | $— | $(3,565) | $(8,366) | [Note 6 – Concentration of Credit Risk](index=40&type=section&id=Note%206%20%E2%80%93%20Concentration%20of%20Credit%20Risk) The company faces significant credit risk, with its five largest debt investments representing approximately **38.5%** of the total fair value of debt investments as of September 30, 2023 - The Company's five largest debt investments represented approximately **38.5%** of the total fair value of debt investments as of September 30, 2023, up from **30.0%** at December 31, 2022[141](index=141&type=chunk) - As of September 30, 2023, the Company had debt investments in **13** portfolio companies (compared to **16** at December 31, 2022) that represented **5%** or more of its net assets[141](index=141&type=chunk) [Note 7 – Borrowings](index=41&type=section&id=Note%207%20%E2%80%93%20Borrowings) Total borrowings decreased to **$450.3 million** as of September 30, 2023, from **$559.3 million** at December 31, 2022, with a significant increase in the weighted average cost of debt year-over-year Outstanding Borrowings | Borrowing Type | Sep 30, 2023 Principal ($ thousands) | Dec 31, 2022 Principal ($ thousands) | | :------------------- | :----------------------------------- | :----------------------------------- | | Credit Facility | $203,000 | $337,000 | | April 2026 Notes | $25,000 | $— | | December 2026 Notes | $70,000 | $70,000 | | July 2027 Notes | $80,500 | $80,500 | | August 2027 Notes | $20,000 | $20,000 | | December 2027 Notes | $51,750 | $51,750 | | **Total Borrowings** | **$450,250** | **$559,250** | Debt Financing Expenses and Cost | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Interest and Other Debt Financing Expenses (in thousands) | $10,442 | $4,382 | $32,772 | $8,297 | | Weighted Average Cost of Debt | 8.33% | 6.75% | 8.15% | 6.55% | - The Credit Facility's availability period expires on April **20**, **2025**, with a stated maturity date of April **20**, **2026**[145](index=145&type=chunk) - Borrowings bear interest at Adjusted Term SOFR plus an applicable margin (**2.95%** to **3.35%**)[146](index=146&type=chunk) [Note 8 – Commitments and Contingencies](index=44&type=section&id=Note%208%E2%80%93%20Commitments%20and%20Contingencies) Contractual obligations as of September 30, 2023, included **$450.3 million** in debt and **$8.4 million** in deferred incentive fees, with unfunded loan commitments totaling **$203.5 million**, of which **$75.1 million** was eligible to be drawn Contractual Obligations | Contractual Obligations (in thousands) | Total | Less than 1 Year | 1-3 years | 3-5 years | More than 5 Years | | :----------------------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | Borrowings | $450,250 | $— | $228,000 | $222,250 | $— | | Deferred Incentive Fees | $8,447 | $2,637 | $3,131 | $2,548 | $131 | | **Total** | **$458,697** | **$2,637** | **$231,131** | **$224,798** | **$131** | - Unfunded loan commitments to provide debt financing to portfolio companies totaled **$203.5 million** as of September 30, 2023, a decrease from **$315.7 million** at December 31, 2022[167](index=167&type=chunk) - As of September 30, 2023, approximately **$75.1 million** of available unfunded commitments were eligible to be drawn based on achieved milestones[244](index=244&type=chunk) [Note 9 – Net Assets](index=45&type=section&id=Note%209%20%E2%80%93%20Net%20Assets) The company has **100,000,000** authorized common shares, completed initial and second private offerings and an IPO, and repurchased **$10.8 million** in shares under a program that expired in February 2023 - The company repurchased **871,345** shares of common stock for an aggregate of **$10.8 million** under a repurchase program that expired on February **24**, **2023**[173](index=173&type=chunk) Dividends and Share Repurchases | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Dividends declared and paid | $18,200 | $13,500 | $54,700 | $37,000 | | Cash distributed | $17,500 | $12,800 | $52,400 | $26,700 | | Shares purchased under Dividend Reinvestment Plan | 54,930 | 49,298 | 182,435 | 729,134 | | Total value of shares purchased under Dividend Reinvestment Plan (in thousands) | $700 | $700 | $2,300 | $10,300 | [Note 10 – Income Taxes](index=48&type=section&id=Note%2010%20%E2%80%93%20Income%20Taxes) The company intends to maintain its Regulated Investment Company (RIC) status to avoid federal income taxes on distributed income and gains, with a net unrealized loss on a tax basis of **$31.6 million** as of September 30, 2023 - The Company intends to qualify annually as a RIC to avoid U.S. federal income taxes on distributed income and gains[179](index=179&type=chunk) Tax Basis of Investments | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Tax cost on investments | $1,042,501 | $1,149,902 | | Net unrealized gain (loss) on a tax basis | $(31,574) | $(23,593) | [Note 11 – Financial Highlights](index=49&type=section&id=Note%2011%20%E2%80%93%20Financial%20Highlights) For the nine months ended September 30, 2023, net asset value per share decreased slightly to **$14.08**, with a negative **0.98%** total return based on net asset value, but a positive **22.26%** based on market value Financial Highlights Summary | Metric | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | | Net asset value at beginning of period | $14.22 | $14.65 | | Net asset value at end of period | $14.08 | $14.12 | | Net investment income per common share | $1.48 | $1.01 | | Total return based on net asset value | (0.98)% | (3.62)% | | Total return based on market value | 22.26% | (4.29)% | | Ratio of net investment income to average net assets | 13.88% | 9.32% | | Ratio of total operating expenses to average net assets | 15.05% | 6.72% | | Portfolio turnover rate | 9.63% | 19.59% | | Net assets at end of period (in thousands) | $570,491 | $573,661 | [Note 12 – Subsequent Events](index=50&type=section&id=Note%2012%20%E2%80%93%20Subsequent%20Events) Subsequent to September 30, 2023, the company funded **$47.5 million** in new investments, received a **$24.5 million** prepayment, declared ordinary and supplemental distributions, and approved a new **$25.0 million** share repurchase program - Funded new investments totaling **$47.5 million** to Betterment Holdings, Inc. (**$8.0 million**), Gynesonics, Inc. (**$3.1 million**), Snagajob.com, Inc. (**$1.4 million**), Linxup, LLC (**$30.0 million**), and Route **92** Medical, Inc. (**$5.0 million**) between October **6** and November **6**, **2023**[186](index=186&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Received a partial prepayment of **$24.5 million** from Brivo, Inc. on its senior secured loan on October **6**, **2023**[187](index=187&type=chunk) - On November **2**, **2023**, the Board declared an ordinary distribution of **$0.40** per share and a supplemental distribution of **$0.06** per share, payable on or before November **28**, **2023**[189](index=189&type=chunk) - On November **2**, **2023**, the Board approved a new Share Repurchase Program allowing the company to repurchase up to **$25.0 million** of its outstanding common stock[190](index=190&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial performance, investment strategy, portfolio, and operational results for the three and nine months ended September 30, 2023, including liquidity and capital resources [Forward-Looking Statements](index=51&type=section&id=Forward-Looking%20Statements) This subsection cautions that the report contains forward-looking statements subject to substantial risks and uncertainties, including economic conditions, interest rate volatility, and competition, which may cause actual results to differ materially - The report contains forward-looking statements based on current expectations, estimates, and projections, which are subject to known and unknown risks and uncertainties[194](index=194&type=chunk) - Key risks include changes in economic conditions, interest rate volatility, impact of the COVID-19 pandemic, competition, and the speculative nature of investments[195](index=195&type=chunk) [Overview](index=52&type=section&id=Overview) Runway Growth Finance Corp. is an externally managed BDC and RIC specializing in senior secured loans to high-growth companies, aiming to maximize total return through current income and capital gains, with an SEC order allowing co-investments - Runway Growth Finance Corp. is a specialty finance company providing senior secured loans to high growth-potential companies in technology, life sciences, healthcare information and services, business services, and other high-growth industries[199](index=199&type=chunk) - The company is regulated as a BDC and has elected to be treated as a RIC, requiring compliance with various regulatory requirements, including investing at least **70%** of assets in 'qualifying assets' and distributing at least **90%** of taxable income[200](index=200&type=chunk) - An SEC order, amended on August **30**, **2022**, permits greater flexibility for co-investments with other accounts managed by RGC or its affiliates, aiming for additional investment opportunities and diversification[203](index=203&type=chunk)[204](index=204&type=chunk) [Portfolio Composition and Investment Activity](index=53&type=section&id=Portfolio%20Composition%20and%20Investment%20Activity) The investment portfolio's fair value decreased from **$1.13 billion** at December 31, 2022, to **$1.01 billion** at September 30, 2023, with Senior Secured Term Loans remaining dominant and the dollar-weighted annualized yield on debt investments increasing significantly [Portfolio Composition](index=53&type=section&id=Portfolio%20Composition) As of September 30, 2023, the portfolio comprised **50** companies, with **93.73%** in Senior Secured Term Loans, and the dollar-weighted annualized yield on debt investments increased to **18.3%** for the three months and **16.0%** for the nine months Portfolio Investment Types | Investment Type | Sep 30, 2023 Fair Value ($ thousands) | Sep 30, 2023 % of Total Portfolio | Dec 31, 2022 Fair Value ($ thousands) | Dec 31, 2022 % of Total Portfolio | | :---------------------- | :------------------------------------ | :--------------------------------- | :------------------------------------ | :--------------------------------- | | Senior Secured Term Loans | $947,515 | 93.73% | $1,080,121 | 95.90% | | Second Lien Term Loans | $14,178 | 1.40% | $13,654 | 1.21% | | Preferred Stocks | $33,258 | 3.29% | $12,682 | 1.13% | | Common Stocks | $1,963 | 0.19% | $3,097 | 0.27% | | Warrants | $14,013 | 1.39% | $16,755 | 1.49% | | **Total Investments** | **$1,010,927** | **100.00%** | **$1,126,309** | **100.00%** | Investment Yields | Investment Type | 3 Months Ended Sep 30, 2023 Yield | 3 Months Ended Sep 30, 2022 Yield | 9 Months Ended Sep 30, 2023 Yield | 9 Months Ended Sep 30, 2022 Yield | | :-------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Debt investments | 18.28% | 14.43% | 16.04% | 13.49% | | Equity interest | 2.52% | 3.64% | 2.70% | 3.36% | | All investments | 17.48% | 13.95% | 15.45% | 12.94% | [Investment Activity](index=54&type=section&id=Investment%20Activity) During the nine months ended September 30, 2023, the company funded **$19.8 million** in one new portfolio company and **$85.7 million** in **11** existing companies, while receiving **$225.7 million** in loan prepayments and **$7.0 million** in scheduled principal payments - For the nine months ended September **30**, **2023**, the Company funded **$19.8 million** in one new portfolio company and **$85.7 million** in **11** existing portfolio companies[208](index=208&type=chunk) - The Company received **$225.7 million** in loan prepayments from **10** portfolio companies and **$7.0 million** in scheduled principal payments from two portfolio companies during the nine months ended September **30**, **2023**[208](index=208&type=chunk) [Portfolio Reconciliation](index=54&type=section&id=Portfolio%20Reconciliation) The investment portfolio, including U.S. Treasury Bills, decreased from **$1.13 billion** at the beginning of the period to **$1.01 billion** at September 30, 2023, primarily due to sales and prepayments exceeding new purchases and PIK interest Investment Portfolio Reconciliation | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | | Beginning investment portfolio | $1,126,309 | $729,516 | | Purchases of investments | $105,527 | $392,820 | | PIK interest | $15,334 | $6,345 | | Sales and prepayments of investments | $(225,671) | $(143,144) | | Net realized gain (loss) on investments | $(1,178) | $939 | | Net change in unrealized gain (loss) on investments | $(9,654) | $(28,617) | | Ending investment portfolio | $1,010,927 | $910,169 | [Asset Quality](index=55&type=section&id=Asset%20Quality) The company uses a five-level numeric rating system for its debt investment portfolio, with **77.13%** rated Category **2** (performing at or close to plan) and **16.45%** as Category **3** (performing below plan), while one loan remained on non-accrual status [Investment Rating](index=55&type=section&id=Investment%20Rating) The majority of the debt investment portfolio (**77.13%**) was rated Category **2** as of September 30, 2023, indicating performance at or near plan, while Category **3** investments, performing below plan, increased to **16.45%** from **6.95%** at December 31, 2022 Debt Investment Rating Breakdown | Investment Rating | Sep 30, 2023 Fair Value ($ thousands) | Sep 30, 2023 % of Total Portfolio | Sep 30, 2023 Number of Companies | Dec 31, 2022 Fair Value ($ thousands) | Dec 31, 2022 % of Total Portfolio | Dec 31, 2022 Number of Companies | | :---------------- | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------------------------ | :-------------------------------- | :-------------------------------- | | 1 | $— | —% | — | $— | —% | — | | 2 | $779,670 | 77.13% | 20 | $1,006,247 | 89.34% | 30 | | 3 | $166,346 | 16.45% | 6 | $78,238 | 6.95% | 4 | | 4 | $4,064 | 0.40% | 1 | $— | - | — | | 5 | $11,613 | 1.15% | 1 | $9,290 | 0.82% | 1 | | **Total** | **$961,693** | **95.13%** | **28** | **$1,093,775** | **97.11%** | **35** | [Loans and Debt Securities on Non-Accrual Status](index=55&type=section&id=Loans%20and%20Debt%20Securities%20on%20Non-Accrual%20Status) As of September 30, 2023, one loan to Pivot3, Inc. (cost basis **$18.0 million**, fair value **$11.6 million**) remained on non-accrual status, representing **1.1%** of the total investment portfolio, with cumulative unrecorded interest and OID totaling **$6.3 million** - As of September **30**, **2023**, one loan to Pivot3, Inc. (cost basis **$18.0 million**, fair value **$11.6 million**) was on non-accrual status, representing **1.1%** of the total investment portfolio[212](index=212&type=chunk) - Cumulative unrecorded interest and OID for the Pivot3, Inc. loan from being placed on non-accrual status through September **30**, **2023**, totaled **$6.3 million**[212](index=212&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Net investment income significantly increased for both the three and nine months ended September 30, 2023, driven by higher interest income and market rates, despite continued net unrealized losses on investments [Comparison of the Three and Nine Months Ended September 30, 2023 and 2022](index=56&type=section&id=Comparison%20of%20the%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) Net assets from operations increased to **$14.8 million** for the three months and **$49.1 million** for the nine months ended September 30, 2023, primarily due to increased investment income and smaller net unrealized losses Comparative Operating Results | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total investment income | $43,779 | $27,037 | $124,984 | $71,294 | | Total operating expenses | $21,743 | $12,539 | $65,026 | $29,858 | | Net investment income | $22,036 | $14,498 | $59,958 | $41,436 | | Net realized gain (loss) on investments | $— | $407 | $(1,178) | $939 | | Net change in unrealized gain (loss) on investments | $(7,214) | $(3,183) | $(9,654) | $(28,617) | | Net increase (decrease) in net assets resulting from operations | $14,822 | $11,722 | $49,126 | $13,758 | | Net investment income per share | $0.54 | $0.36 | $1.48 | $1.01 | | Net increase (decrease) in net assets per share | $0.37 | $0.29 | $1.21 | $0.33 | [Investment Income](index=56&type=section&id=Investment%20Income) Total investment income increased significantly to **$43.8 million** for the three months and **$125.0 million** for the nine months ended September 30, 2023, driven by increased capital deployment and higher market interest rates - Total investment income increased by **62.0%** to **$43.8 million** for the three months ended September **30**, **2023**, from **$27.0 million** in the prior year, and by **75.1%** to **$125.0 million** for the nine months, from **$71.3 million**[217](index=217&type=chunk)[218](index=218&type=chunk) - The increase in investment income was primarily due to increased interest income driven by capital deployment and increased market interest rates[217](index=217&type=chunk)[218](index=218&type=chunk) [Operating Expenses](index=57&type=section&id=Operating%20Expenses) Total operating expenses increased to **$21.7 million** for the three months and **$65.0 million** for the nine months ended September 30, 2023, primarily due to higher interest expense from increased leverage, performance-based incentive fees, and management fees - Total operating expenses increased by **73.4%** to **$21.7 million** for the three months ended September **30**, **2023**, from **$12.5 million** in the prior year, and by **117.4%** to **$65.0 million** for the nine months, from **$29.9 million**[219](index=219&type=chunk)[221](index=221&type=chunk) - The increase in operating expenses was primarily due to higher interest expense from increased leverage, performance-based incentive fees, and management fees[220](index=220&type=chunk)[221](index=221&type=chunk) Operating Expense Breakdown | Expense Type (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Management fees | $4,302 | $3,066 | $12,598 | $8,488 | | Incentive fees | $5,511 | $3,626 | $14,994 | $8,591 | | Interest and other debt financing expenses | $10,442 | $4,382 | $32,772 | $8,297 | [Net Investment Income](index=58&type=section&id=Net%20Investment%20Income) Net investment income increased to **$22.0 million** for the three months and **$60.0 million** for the nine months ended September 30, 2023, driven by rising interest rates on investments, partially offset by increased operating expenses - Net investment income increased by **51.9%** to **$22.0 million** for the three months ended September **30**, **2023**, from **$14.5 million** in the prior year, and by **44.8%** to **$60.0 million** for the nine months, from **$41.4 million**[226](index=226&type=chunk)[227](index=227&type=chunk) - The increase was primarily due to rising interest rates on investments, partially offset by higher interest expense, performance-based incentive fees, and management fees[226](index=226&type=chunk)[227](index=227&type=chunk) [Net Realized Gain (Loss) on Investments](index=58&type=section&id=Net%20Realized%20Gain%20(Loss)%20on%20Investments) The company reported no net realized gains or losses for the three months ended September 30, 2023, but net realized losses of **$1.2 million** for the nine-month period, primarily from warrant investments Net Realized Gain (Loss) Summary | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net realized gain (loss) on investments | $— | $407 | $(1,178) | $939 | - Net realized losses for the nine months ended September **30**, **2023**, were attributable to investments in CareCloud, Inc. and Gynesonics, Inc. warrants[229](index=229&type=chunk) [Net Change in Unrealized Gain (Loss) on Investments](index=59&type=section&id=Net%20Change%20in%20Unrealized%20Gain%20(Loss)%20on%20Investments) Net change in unrealized loss on investments was **$7.2 million** for the three months and **$9.7 million** for the nine months ended September 30, 2023, primarily due to decreases in the fair value of preferred stock and senior secured loans Net Change in Unrealized Gain (Loss) Summary | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net change in unrealized gain (loss) on investments | $(7,214) | $(3,183) | $(9,654) | $(28,617) | - The unrealized loss for the three months ended September **30**, **2023**, was primarily due to decreases in the fair value of preferred stock in CareCloud, Inc. and senior secured loans to Snagajob.com, Inc. and Fiscal Note, Inc[230](index=230&type=chunk) - The unrealized loss for the nine months ended September **30**, **2023**, was primarily due to decreases in the fair value of preferred stock in Gynesonics, Inc. and senior secured loans to Gynesonics, Inc. and Snagajob.com, Inc[231](index=231&type=chunk) [Net Increase (Decrease) in Net Assets Resulting from Operations](index=59&type=section&id=Net%20Increase%20(Decrease)%20in%20Net%20Assets%20Resulting%20from%20Operations) Net assets from operations increased to **$14.8 million** for the three months and **$49.1 million** for the nine months ended September 30, 2023, driven by higher net investment income and comparatively smaller net unrealized losses Net Assets from Operations Summary | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net increase (decrease) in net assets resulting from operations | $14,822 | $11,722 | $49,126 | $13,758 | - The increase in net assets from operations for both periods was primarily due to the comparative net change in unrealized gain (loss) and an increase in net investment income[232](index=232&type=chunk)[233](index=233&type=chunk) [Financial Condition, Liquidity, Capital Resources and Obligations](index=59&type=section&id=Financial%20Condition%2C%20Liquidity%2C%20Capital%20Resources%20and%20Obligations) The company's liquidity is derived from securities offerings, debt borrowings, and cash flows from operations, with **$311.9 million** in available liquidity and an asset coverage ratio of **227%** as of September 30, 2023, indicating strong financial health [Available Liquidity and Capital Resources](index=60&type=section&id=Available%20Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had **$311.9 million** in available liquidity, including **$14.9 million** in cash and cash equivalents and **$297.0 million** available under its Credit Facility, with an asset coverage ratio of **227%** - As of September **30**, **2023**, available liquidity totaled **$311.9 million**, including **$14.9 million** in cash and cash equivalents and approximately **$297.0 million** available under the Credit Facility[239](index=239&type=chunk) - The asset coverage ratio was **227%** as of September **30**, **2023**, exceeding the **1940** Act requirement of **150%**[240](index=240&type=chunk) [Commitments and Obligations](index=60&type=section&id=Commitments%20and%20Obligations) Contractual obligations as of September 30, 2023, included **$450.3 million** in debt (none due within one year) and **$8.4 million** in deferred incentive fees (**$2.6 million** due within one year), with unfunded loan commitments totaling **$203.5 million**, of which **$75.1 million** was eligible to be drawn - As of September **30**, **2023**, the Company had **$450.3 million** of debt outstanding, with **$228.0 million** due within **1** to **3** years and **$222.3 million** beyond **3** years[242](index=242&type=chunk) - Deferred incentive fees totaled **$8.4 million**, with **$2.6 million** due within the next year[242](index=242&type=chunk) - Unfunded loan commitments to portfolio companies amounted to **$203.5 million**, with approximately **$75.1 million** currently eligible to be drawn[244](index=244&type=chunk) [Distributions](index=61&type=section&id=Distributions) For the three and nine months ended September 30, 2023, the company declared and paid **$18.2 million** and **$54.7 million** in dividends, respectively, with the majority distributed in cash and the remainder reinvested through the Dividend Reinvestment Plan - For the three and nine months ended September **30**, **2023**, the Company declared and paid dividends of **$18.2 million** and **$54.7 million**, respectively[248](index=248&type=chunk) - Of the total distributions, **$17.5 million** and **$52.4 million** (for the three and nine months, respectively) were distributed in cash, with the remainder distributed in shares via the Dividend Reinvestment Plan[248](index=248&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=Critical%20Accounting%20Estimates) The most significant accounting policies involve Fair Value Measurements and Income Taxes, requiring management estimates and assumptions that can materially affect reported financial amounts - The most significant accounting policies are related to Fair Value Measurements and Income Taxes, which involve significant management estimates and assumptions[250](index=250&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to valuation risk from illiquid investments and interest rate risk from its variable-rate debt portfolio and floating-rate borrowings; a hypothetical **200** basis point interest rate increase could increase investment income by **$18.7 million** annually [Valuation Risk](index=61&type=section&id=Valuation%20Risk) Valuation risk arises from the inherent uncertainty in determining the fair value of illiquid investments, which are valued in good faith by the Board of Directors, potentially leading to material differences from market values - Investments without readily available market prices are valued at fair value by the Board of Directors, involving subjective judgments and estimates[253](index=253&type=chunk) - The fair value of investments may fluctuate significantly from period to period due to the inherent uncertainty of valuation, and actual values could differ materially from estimates[253](index=253&type=chunk) [Interest Rate Risk](index=61&type=section&id=Interest%20Rate%20Risk) The company is exposed to interest rate risk, affecting both funding costs and investment income, with **100%** of its performing debt portfolio bearing variable interest rates; a **200** basis point increase could increase annual investment income by **$18.7 million** - As of September **30**, **2023**, **100.0%** of the performing debt portfolio investments bore interest at variable rates (approximately **65.0%** based on SOFR and **35.0%** based on Prime)[256](index=256&type=chunk) - A hypothetical **200** basis point increase in interest rates on variable-rate debt investments could increase investment income by a maximum of **$18.7 million** annually, while a decrease could reduce it by a maximum of **$17.8 million**[256](index=256&type=chunk) - The Credit Facility bears interest at a floating rate (SOFR plus margin), while other outstanding debt borrowings bear fixed rates[257](index=257&type=chunk) [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September **30**, **2023**[261](index=261&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[262](index=262&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company and RGC are not currently subject to any material legal proceedings, nor are any threatened, and routine legal proceedings are not expected to materially affect financial condition or results of operations - The Company and RGC are not currently subject to any material legal proceedings, nor are any material legal proceedings threatened[264](index=264&type=chunk) - Any legal proceedings in the ordinary course of business are not expected to have a material effect on the company's financial condition or results of operations[264](index=264&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) This section highlights key risks, including susceptibility to economic slowdowns, bank failures, and the magnifying effect of leverage on investment returns, requiring the maintenance of a **150%** asset coverage ratio - The company and its portfolio companies are susceptible to economic slowdowns or recessions and risks related to bank impairments or failures, which could impair operations and funding access[267](index=267&type=chunk) - The use of leverage magnifies potential gains or losses on invested amounts, increasing investment risks for common stockholders[268](index=268&type=chunk)[269](index=269&type=chunk) - As a BDC, the company must maintain an asset coverage ratio of at least **150%**; failure to do so could restrict debt incurrence and force asset sales[270](index=270&type=chunk) Leverage Impact on Stockholder Return | Assumed Return on Our Portfolio (Net of Expenses) | -10% | -5% | 0% | 5% | 10% | | :------------------------------------------------ | :--- | :-- | :-- | :-- | :--- | | Corresponding return to common stockholder | -24.7% | -14.8% | -4.9% | 5.0% | 14.9% | [Item 2. 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) No unregistered sales of equity securities occurred during the reporting period, other than those pursuant to the Dividend Reinvestment Plan - No unregistered sales of equity securities occurred during the period covered by this Form **10-Q**, except for those under the Dividend Reinvestment Plan[273](index=273&type=chunk) [Item 3. 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 - There were no defaults upon senior securities[274](index=274&type=chunk) [Item 4. Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[275](index=275&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section includes disclosures regarding Rule **10b5-1** trading arrangements, insider trading policies, and an update on fees and expenses, providing a hypothetical example illustrating projected cumulative expenses for an investment [Rule 10b5-1 Disclosure](index=65&type=section&id=Rule%2010b5-1%20Disclosure) No director or officer entered into Rule **10b5-1** trading arrangements or non-Rule **10b5-1** trading arrangements during the reporting period, and the company has insider trading policies to ensure compliance - No director or officer entered into Rule **10b5-1** trading arrangements or non-Rule **10b5-1** trading arrangements during the reporting period[277](index=277&type=chunk) - The Company has adopted insider trading policies and procedures to promote compliance with insider trading laws[278](index=278&type=chunk) [Fees and Expenses](index=65&type=section&id=Fees%20and%20Expenses) Total estimated annual expenses as a percentage of net assets attributable to common stock are **14.85%**, including management fees (**2.90%**), incentive fees (**3.33%**), interest payments on borrowed funds (**7.45%**), and other expenses (**1.17%**) Annual Expense Breakdown | Expense Category | Percentage of Net Assets Attributable to Common Stock | | :-------------------------------------- | :---------------------------------------------------- | | Management Fee payable under the Advisory Agreement | 2.90% | | Incentive Fee payable under the Advisory Agreement | 3.33% | | Interest payments on borrowed funds | 7.45% | | Other expenses | 1.17% | | **Total annual expenses** | **14.85%** | [Example](index=66&type=section&id=Example) A hypothetical example illustrates projected cumulative expenses for a **$1,000** investment, assuming a **5%** annual return from realized capital gains, with expenses reaching **$973** in **10** years Projected Cumulative Expenses | Investment Period | Projected Expenses on a $1,000 Investment (assuming 5% annual return) | | :---------------- | :------------------------------------------------------------------- | | 1 year | $149 | | 3 years | $403 | | 5 years | $610 | | 10 years | $973 | - The example assumes a **5%** annual return generated entirely through realized capital gains, triggering the Capital Gains Fee, while the Income Incentive Fee is considered immaterial[283](index=283&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the report or incorporated by reference, including Articles of Amendment, Bylaws, CEO/CFO certifications, and Inline XBRL documents - Exhibits include Articles of Amendment and Restatement, Articles of Amendment, Second Amended and Restated Bylaws, CEO/CFO certifications (pursuant to Rule **13a-14** and Section **906** of Sarbanes-Oxley Act), and various Inline XBRL documents[286](index=286&type=chunk) [SIGNATURES](index=68&type=section&id=SIGNATURES) The report is duly signed on behalf of Runway Growth Finance Corp. by Greg Greifeld, Acting Chief Executive Officer, and Thomas B. Raterman, Acting President, Chief Financial Officer, Treasurer and Secretary, on November 7, 2023 - The report was signed by Greg Greifeld, Acting Chief Executive Officer, and Thomas B. Raterman, Acting President, Chief Financial Officer, Treasurer and Secretary, on November **7**, **2023**[289](index=289&type=chunk)