Silver Spike Investment (US:SSIC)2024-05-09 21:25Financial Performance - Total investment income for the three months ended March 31, 2024, was $2,760,247, an increase of 12.3% compared to $2,457,839 for the same period in 2023[18]. - Net investment loss for the three months ended March 31, 2024, was $(79,809), compared to a net investment income of $1,370,723 for the same period in 2023[18]. - The net increase in net assets resulting from operations for the three months ended March 31, 2024, was $519,811, down from $2,357,080 in the same period of the previous year[18]. - The company reported a net change in unrealized appreciation from investments of $599,620 for the three months ended March 31, 2024, compared to $986,357 for the same period in 2023[18]. - Interest income for the three months ended March 31, 2024, was $2,585,068, compared to $2,317,020 for the same period in 2023, reflecting a year-over-year increase of approximately 11.5%[71]. - The company reported a total interest income of $2,726,497 for the three months ended March 31, 2024, which includes $52,951 from payment-in-kind interest[204]. - The company reported a total return based on market value of 16.82% for the three months ended March 31, 2024, compared to a negative return of (6.22)% in the same period of 2023[145]. Assets and Liabilities - Total assets increased to $90,351,075 as of March 31, 2024, up from $88,576,271 at December 31, 2023, representing a growth of approximately 2.0%[15]. - Total liabilities increased to $5,832,308 as of March 31, 2024, from $3,023,653 at December 31, 2023, reflecting a rise of approximately 92.9%[15]. - Cash and cash equivalents rose to $33,160,294 as of March 31, 2024, compared to $32,611,635 at the end of 2023, indicating a 1.7% increase[15]. - As of March 31, 2024, the total net assets of the company decreased to $84,518,767, down from $86,475,729 as of December 31, 2022, reflecting a decrease of approximately 2.3%[21]. - The net asset value per share decreased to $13.60 as of March 31, 2024, from $13.77 at December 31, 2023[15]. Investment Portfolio - The total investment in securities as of March 31, 2024, was $54,851, which constitutes 64.90% of the company's net assets[27]. - The company’s cash equivalents represented 39.23% of total portfolio investments and cash equivalents as of March 31, 2024[27]. - The total fair value of the investment portfolio was $54,851,000, an increase from $54,120,000 as of December 31, 2023, reflecting a net change in unrealized appreciation of $599,620[197]. - The investment portfolio as of December 31, 2023, had an aggregate fair value of approximately $54.1 million, with approximately $46.0 million in first lien, senior secured loans and approximately $8.1 million in senior secured notes across five portfolio companies[190]. - The geographic composition of the portfolio shows that 46.7% is located in the West, 45.8% in the Midwest, and 7.5% in the Northeast as of March 31, 2024[93]. Management and Strategy - The Company plans to expand its investment strategy to include companies outside of the cannabis and health and wellness sectors effective April 22, 2024[48]. - The Company’s investment objective is to maximize risk-adjusted returns primarily through secured debt investments in private leveraged middle-market cannabis companies[44]. - The company intends to maximize risk-adjusted returns on equity for shareholders by capitalizing on growth in the cannabis industry and generating current income from debt investments[170]. - The company expects loans to typically have final maturities of three to six years, with early repayments often occurring within three years[90]. - The company may invest in "covenant-lite" loans, which provide borrowers more freedom and may increase the risk of loss compared to loans with a complete set of financial maintenance covenants[171]. Dividends and Distributions - The Company declared a quarterly dividend of $0.25 per share on March 8, 2024, totaling $1,553,662, while no distributions were made during the same period in 2023[130]. - For the tax year ended March 31, 2024, total distributions amounted to $9,819,273, all classified as ordinary income[142]. Risk Management - The Company manages various risks, including market risk, credit risk, and interest rate risk, through control mechanisms and diversification[97]. - The portfolio is concentrated in cannabis companies, which may subject the Company to greater price volatility compared to a broader range of industries[99]. - As of March 31, 2024, there were no loan investments placed on non-accrual status, indicating effective management of credit risk[70]. Other Financial Metrics - The ratio of expenses to average net assets increased to 3.32% for the three months ended March 31, 2024, compared to 1.26% in the prior year[145]. - The company incurred management fee expenses of $246,131 for the three months ended March 31, 2024, compared to $238,419 for the same period in 2023, indicating an increase of approximately 3%[115]. - The capital gains incentive fee expenses for the three months ended March 31, 2024, were $119,924, down from $142,602 in the same period of 2023, reflecting a decrease of approximately 16%[118].