Core Insights - Portman Ridge (PTMN) reported quarterly earnings of $0.47 per share, missing the Zacks Consensus Estimate of $0.60 per share, and down from $0.67 per share a year ago, representing an earnings surprise of -21.67% [1] - The company posted revenues of $12.12 million for the quarter, missing the Zacks Consensus Estimate by 13.87%, and down from $16.53 million year-over-year [2] - Portman Ridge shares have declined approximately 25.2% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $14.09 million, and for the current fiscal year, it is $2.52 on revenues of $56.09 million [7] - The estimate revisions trend for Portman Ridge is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Financial - Investment Management industry, to which Portman Ridge belongs, is currently in the bottom 15% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment and stock performance [5]

Core Insights - Portman Ridge Finance Corporation reported a net investment income of $0.47 per share and a net asset value of $18.85 per share as of March 31, 2025 [1][8] - The company deployed approximately $17.5 million and had sales and repayments of approximately $15.7 million, resulting in a net deployment of approximately $1.8 million [1][8] - A regular quarterly base distribution of $0.47 per share was declared, payable on May 29, 2025 [3] Financial Performance - Total investment income for the first quarter of 2025 was $12.1 million, down from $16.5 million in the previous quarter, primarily due to the reversal of previously accrued income [7][8] - Net investment income for the first quarter of 2025 was $4.3 million, compared to $5.5 million in the fourth quarter of 2024 [8][11] - Net asset value as of March 31, 2025, was $173.5 million, a decrease from $178.5 million as of December 31, 2024 [8][11] Management Commentary - The CEO emphasized the disciplined investment strategy and the importance of long-term approaches in the current macroeconomic environment characterized by trade dynamics and inflation [5][6] - The merger with Logan Ridge Finance Corporation is viewed as a strategic opportunity to enhance shareholder value through increased scale and operational efficiency [6][5] Investment Portfolio - The investment portfolio at fair value as of March 31, 2025, was $406.4 million, comprising 93 different portfolio companies [11] - The debt investment portfolio, excluding CLO Funds and equities, totaled $324.8 million at fair value, spread across 24 different industries [11] Liquidity and Capital Resources - As of March 31, 2025, the company had $255.4 million in outstanding borrowings with a weighted average interest rate of 5.9% [14] - Unrestricted cash was reported at $9.2 million, down from $17.5 million as of December 31, 2024 [15]

Portfolio Valuation - The fair value of the total portfolio at December 31, 2024, was $405.021 million, down from $467.865 million at December 31, 2023, reflecting a decrease of approximately 13.4%[279] - The fair value of the portfolio at March 31, 2025, was $406.423 million, showing a slight increase from $405.021 million at December 31, 2024[279] - As of March 31, 2025, the fair value of total investments and cash was approximately $429.9 million, down from $444.9 million as of December 31, 2024[323] - The fair value of investments in Joint Ventures as of March 31, 2025, was approximately $50.5 million, compared to $54.2 million as of December 31, 2024[307] - The fair value of the Company's investment in the F3C Joint Venture was $11.4 million as of March 31, 2025, down from $13.0 million as of December 31, 2024[292] - The fair value of CLO Fund Securities decreased from $5.2 million as of December 31, 2024, to $4.6 million as of March 31, 2025[285] - The majority of the company's investments are classified as Level III in the fair value hierarchy, indicating significant management judgment in valuation[354] - Fair value for investments is determined using various methods, including discounted cash flow and comparable company analysis, with significant judgment involved[362] Investment Activity - Total portfolio investment activity for the three months ended March 31, 2025, included purchases/originations of $20.361 million and pay-downs/sales of $15.660 million[279] - The company has made strategic acquisitions, including OHA Investment Corporation for approximately $0.42 per share and Garrison Capital Inc. for approximately $1.19 per share[273][275] - The company evaluates strategic opportunities, including potential mergers with affiliated funds, to enhance its investment capabilities[270] - The company entered into a Merger Agreement with Logan Ridge Finance Corporation, with the anticipated completion in the second quarter of 2025, subject to stockholder approvals[371] Income and Expenses - For the three months ended March 31, 2025, total investment income was approximately $12.1 million, a decrease of 26.5% from $16.5 million in the same period of 2024[299] - Interest income from the Debt Securities Portfolio for the three months ended March 31, 2025, was approximately $10.3 million, down from $14.2 million in 2024, reflecting a significant decline[301] - Total expenses for the three months ended March 31, 2025, were approximately $7.8 million, a decrease of 24.5% from $10.3 million in 2024, primarily due to lower management and incentive fees[311] - Management fees for the three months ended March 31, 2025, were approximately $1.5 million, down from $1.7 million in 2024[312] - Interest expense and amortization of debt issuance costs for the three months ended March 31, 2025, were approximately $4.3 million, compared to $5.7 million in 2024, reflecting a reduction in average debt outstanding[313] - Core investment income for the three months ended March 31, 2025, was approximately $12.1 million, compared to $16.5 million in 2024, excluding the impact of purchase discount accretion[304] - For the three months ended March 31, 2025, net investment income was approximately $4.3 million, a decrease of 30.6% from $6.2 million in the same period of 2024[318] - The company recognized $0.2 million of net realized losses on investments for the three months ended March 31, 2025, compared to $2.1 million in losses for the same period in 2024[319] - The total net change in unrealized appreciation (depreciation) on investments for the three months ended March 31, 2025, was approximately $(3.9) million, compared to a gain of $0.1 million in 2024[320] - The net increase (decrease) in net assets resulting from operations for the three months ended March 31, 2025, was $(0.1) million, compared to an increase of $4.5 million in 2024[321] Debt and Financing - The company had approximately $255.4 million of outstanding borrowings as of March 31, 2025, with an asset coverage ratio of 168%, exceeding the minimum requirement of 150%[325] - Long-term debt obligations total $255.379 million, with $108 million due in less than two years and $147.379 million due in 2-3 years[346] - The company had $255.4 million in borrowings outstanding at a weighted average interest rate of 5.9%, with $108.0 million at a fixed rate and $147.4 million at a floating rate[375] - A 1% increase in interest rates would increase net investment income by approximately $1.6 million annually, while a 2% and 3% increase would raise it by about $3.3 million and $5.0 million, respectively[378] - Conversely, a 1% decrease in interest rates would decrease net investment income by approximately $1.6 million, with decreases of 2% and 3% resulting in reductions of about $3.2 million and $4.7 million, respectively[379] Distributions - The company intends to maintain its RIC status by distributing substantially all of its net ordinary taxable income to stockholders[269] - The company intends to continue making quarterly distributions to stockholders, aiming to distribute at least 98% of ordinary net taxable income for the calendar year[337] - The company declared a total distribution of $0.54 per share for the first quarter of 2025, including a regular quarterly base distribution of $0.47 and a supplemental cash distribution of $0.07[342] - Total distributions declared in 2024 amounted to $2.76 per share, with each quarter contributing $0.69[342] - In 2023, the company declared total distributions of $2.75 per share, with the first quarter at $0.68 and subsequent quarters at $0.69 each[342] Commitments and Future Plans - The company has a total financial commitment of $35.0 million related to the Externalization Agreement with BC Partners[272] - The company has commitments to fund investments of approximately $26.5 million as of March 31, 2025, down from $27.2 million at the end of 2024[345] - The company plans to grow its portfolio of assets by raising additional capital, including through the prudent use of leverage[322] - The company approved a $10 million stock repurchase program effective March 6, 2023, which may be renewed annually[343] - No shares were repurchased under the Renewed Stock Repurchase Program or the 2025 Stock Repurchase Program during the three months ended March 31, 2025[344] Valuation Methods - The company follows ASC 820 for fair value measurements, which prioritizes market-based inputs over entity-specific inputs[352] - The company values its investments in CLO Fund Securities based on expected cash inflows and outflows, utilizing discounted cash flow models and market comparisons[356] - The company may consider other valuation methods as appropriate under U.S. GAAP to determine fair value of investments[363] - The Adviser has engaged an independent valuation firm for third-party valuation consulting services[382] - Third-party valuations will be performed quarterly on the Company's material investments in illiquid securities[382] - Each material investment will be reviewed at least once during a trailing 12-month period[382] - The independent valuation estimates are considered relevant data inputs for determining fair value[382] - The Adviser plans to continue engaging the independent valuation firm for future valuation services[382] - Valuation services will include the review of certain portfolio assets[382] - The review process will be part of the quarterly and annual year-end valuation process[382] Investment Portfolio Composition - The investment portfolio primarily consists of senior secured loans, junior secured loans, and subordinated/mezzanine debt investments targeting middle-market companies with EBITDA of $10 million to $50 million[266] - The debt investment portfolio was diversified across 24 different industries and 72 different portfolio companies, with a fair value of approximately $324.8 million and an average par balance per entity of approximately $2.6 million[283] - The Company’s portfolio includes 72 different portfolio companies, with six investments on non-accrual status as of March 31, 2025, consistent with the status as of December 31, 2024[283] - The largest industry concentration in the investment portfolio as of March 31, 2025, was in Services: Business, accounting for 13.4% of the total portfolio[281] - The Company has a 62.8% economic interest in the F3C Joint Venture, which primarily invests in middle-market loans[290] - The Company’s investment in the Great Lakes II Joint Venture focuses on underwriting and holding senior, secured unitranche loans made to middle-market companies[293] - The company has invested in "covenant-lite" loans, which may pose a greater risk of loss compared to loans with financial maintenance covenants[268]

Financial Data and Key Metrics Changes - For Q4 2024, Portman generated $14.4 million of investment income, a decrease of $0.8 million compared to $15.2 million in Q3 2024, primarily due to lower investment income from net repayments and sales of $19.2 million and decreases in base rates [14][15] - Total expenses for Q4 2024 were $8.9 million, a decrease of $0.5 million from $9.4 million in Q3 2024, mainly due to lower average debt outstanding and a reduction in spread on the JPMorgan credit facility [15] - Net asset value (NAV) as of 12/31/2024 was $178.5 million, representing a decrease of $9.5 million from $188 million in the prior quarter, with NAV per share declining from $20.36 to $19.41 [15] Business Line Data and Key Metrics Changes - The investment portfolio at year-end remained highly diversified, with a debt investment portfolio (excluding CLO funds, equities, and joint ventures) spread across 26 different industries [10] - Non-accrual investments decreased from nine as of September 30, 2024, to six as of December 31, 2024, improving overall asset quality [7] Market Data and Key Metrics Changes - Approximately 90.1% of the debt securities portfolio was floating rate as of 12/31/2024, linked to interest rate indices such as SOFR, which has seen a decline in rates over the past two quarters [9] - Originations for the quarter were higher than the previous quarter but below repayment and sales levels, resulting in net repayments of approximately $19.2 million [10] Company Strategy and Development Direction - The proposed merger with Logan Ridge is seen as a significant milestone in the long-term growth strategy, expected to create a stronger, more competitive company with increased scale and operational efficiencies [4][5] - The company is focused on disciplined capital management and has made substantial improvements to its debt capital structure, including refinancing efforts [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the credit quality of the portfolio and the ability to drive positive outcomes for shareholders despite challenges in the investment portfolio [3] - The company anticipates being active in the market and net deployers of capital in 2025, aiming to restore net investment income to more normalized levels [8] Other Important Information - The Board of Directors approved a modification of the dividend policy to introduce a quarterly base distribution of $0.47 per share and a supplemental cash distribution of $0.07 per share for Q1 2025 [7] - The company repurchased 202,357 shares of its common stock for approximately $3.8 million, which is accretive to NAV by $0.07 per share [7] Q&A Session Summary Question: What was the generator of the realized loss in the quarter? - The realized loss was primarily from former non-accrual investments in Robert Shaw and Pomeroy, as well as CLOs, with about $10 million of the $10.8 million loss previously reflected in NAV [23][24] Question: How much of the repurchases out of NAV in the quarter? - The repurchases were accretive, contributing about 40 basis points to the change in NAV per share quarter over quarter [25] Question: What sort of levers are being considered to improve returns? - Cost savings from the merger, reduced board and audit fees, and spreading back office functions over a larger base are expected to improve returns [26] Question: Can you provide details on the current mix of the pipeline? - The pipeline has seen a dramatic increase post-election, but recent volatility has caused many deals to be put on hold [30][31] Question: How did the dividend policy restructuring come about? - The restructuring aligns with industry trends, moving towards a base plus supplemental dividend model to adapt to volatility in short-term rates and spreads [42][43] Question: What is the current status of non-accrual investments? - The company is actively working with portfolio companies to resolve non-accrual statuses, with some resolutions achieved in Q4 [35][36] Question: How much of the portfolio is non-sponsored? - The platform is approximately 50/50 in terms of sponsor versus non-sponsor investments, with BDCs leaning slightly more towards sponsor activity [69]

[General Information](index=1&type=section&id=General%20Information) This section provides foundational details about Portman Ridge Finance Corporation's regulatory filings, corporate structure, and cautionary statements regarding forward-looking information [Filing Details and Registrant Information](index=1&type=section&id=Filing%20Details) This section details Portman Ridge Finance Corporation's Form 10-Q filing, including corporate identity, NASDAQ listings, and non-accelerated filer status - Registrant: **Portman Ridge Finance Corporation**, a Delaware corporation[2](index=2&type=chunk) - The registrant is a **non-accelerated filer**[5](index=5&type=chunk) Securities Registered on NASDAQ | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value $0.01 per share | PTMN | The NASDAQ Global Select Market | [Forward-Looking Statements and Disclosures](index=2&type=section&id=Forward-Looking%20Statements%20and%20Disclosures) This section outlines the company's forward-looking statement policy, emphasizing potential material differences in actual results due to various risks - Forward-looking statements are identified by terms such as 'may,' 'will,' 'should,' 'expects,' 'plans,' 'anticipates,' 'could,' 'intends,' 'target,' 'projects,' 'outlook,' 'believes,' 'estimates,' 'predicts,' 'potential' or 'continue' or the negative of these terms or other similar words[10](index=10&type=chunk) - Key factors that could cause actual results to differ include: future operating results, business prospects of portfolio companies, return or impact of current and future investments, contractual arrangements, dependence on general economy, financial condition of portfolio companies, expected financings, ability to operate as a BDC/RIC, liquidity, timing of cash flows, ability of the Adviser to locate/monitor investments, conflicts of interest with the Adviser, legal/tax/regulatory changes, impact of declining credit markets, interest rate fluctuations, valuation of illiquid investments, ability to recover unrealized losses, market conditions, effects of COVID-19, and timing/form/amount of dividend distributions[12](index=12&type=chunk) - Investors should not place undue reliance on forward-looking statements, and the company undertakes no obligation to update them[11](index=11&type=chunk) [Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This part presents the comprehensive financial statements and management's analysis of Portman Ridge Finance Corporation's financial performance and condition [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section provides Portman Ridge Finance Corporation's unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and net assets as of September 30, 2022, and December 31, 2021 Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | September 30, 2022 (Unaudited) | December 31, 2021 | | :-------------------------------------------------------- | :----------------------------- | :---------------- | | Investments at fair value | $571,656 | $549,985 | | Cash and cash equivalents | $16,871 | $28,919 | | Restricted cash | $22,183 | $39,421 | | Total Assets | $629,525 | $648,301 | | LIABILITIES (in thousands) | | | | 2018-2 Secured Notes (net) | $162,593 | $162,460 | | 4.875% Notes Due 2026 (net) | $105,301 | $104,892 | | Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net) | $95,908 | $79,839 | | Total Liabilities | $377,943 | $368,179 | | NET ASSETS (in thousands) | | | | Total Net Assets | $251,582 | $280,122 | | NET ASSET VALUE PER COMMON SHARE | $26.18 | $28.88 | - Total Assets decreased by approximately **$18.78 million** from **$648.301 million** at December 31, 2021, to **$629.525 million** at September 30, 2022[14](index=14&type=chunk) - Total Net Assets decreased by approximately **$28.54 million** from **$280.122 million** at December 31, 2021, to **$251.582 million** at September 30, 2022, leading to a decrease in Net Asset Value per Common Share from **$28.88** to **$26.18**[14](index=14&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, showing investment income, expenses, and net assets from operations for specified periods Consolidated Statements of Operations (in thousands, except share and per share amounts) | (in thousands, except share and per share amounts) | For the Three Months Ended September 30, 2022 | For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total investment income | $19,009 | $22,911 | $50,997 | $62,761 | | Total expenses | $10,617 | $9,193 | $29,175 | $29,120 | | NET INVESTMENT INCOME | $8,392 | $13,718 | $21,822 | $33,641 | | Net realized gain (loss) on investments | $(9,087) | $(3,931) | $(28,631) | $(11,373) | | Net unrealized gain (loss) on investments | $(2,968) | $(642) | $(712) | $7,593 | | NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $(4,205) | $9,145 | $(8,580) | $28,026 | | Basic and Diluted EPS | $(0.44) | $1.00 | $(0.89) | $3.41 | | Net Investment Income Per Common Share | $0.87 | $1.50 | $2.26 | $4.10 | - Net Investment Income decreased significantly for both the three-month period (from **$13.718 million** to **$8.392 million**) and the nine-month period (from **$33.641 million** to **$21.822 million**) year-over-year[18](index=18&type=chunk) - The company experienced a net decrease in net assets from operations for the three and nine months ended September 30, 2022, primarily due to substantial net realized losses and net unrealized depreciation on investments[18](index=18&type=chunk) [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) This section details the changes in the company's net assets, reflecting operational results, distributions, and capital share transactions over time Consolidated Statements of Changes in Net Assets (in thousands, except share and per share amounts) | (in thousands, except share and per share amounts) | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net investment income | $21,822 | $33,641 | | Net realized gains (losses) from investment transactions | $(28,631) | $(11,373) | | Net change in unrealized appreciation (depreciation) on investments | $(712) | $7,593 | | Net increase (decrease) in net assets resulting from operations | $(8,580) | $28,026 | | Stockholder distributions | $(18,223) | $(14,573) | | Net increase (decrease) in net assets resulting from capital share transactions | $(1,737) | $41,331 | | Net assets at end of period | $251,582 | $271,048 | | Net asset value per common share | $26.18 | $29.71 | - Net assets decreased by **$28.54 million** for the nine months ended September 30, 2022, primarily driven by net decrease from operations and stockholder distributions, contrasting with a net increase of **$54.78 million** in the prior year[22](index=22&type=chunk) - Capital share transactions resulted in a net decrease of **$1.737 million** in 2022, compared to a significant net increase of **$41.331 million** in 2021, reflecting changes in stock issuance and repurchases[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2022 and 2021 Consolidated Statements of Cash Flows (in thousands, except share and per share amounts) | (in thousands, except share and per share amounts) | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash (used in) provided by operating activities | $(25,021) | $47,777 | | Net cash (used in) provided by financing activities | $(4,265) | $(81,089) | | CHANGE IN CASH AND RESTRICTED CASH | $(29,286) | $(33,313) | | CASH AND RESTRICTED CASH, END OF PERIOD | $39,054 | $49,591 | - Operating activities shifted from providing **$47.777 million** in cash in 2021 to using **$25.021 million** in 2022, primarily due to increased purchases of investments and net realized losses[26](index=26&type=chunk) - Financing activities used less cash in 2022 (**$4.265 million**) compared to 2021 (**$81.089 million**), largely due to significant debt repayments and repurchases in the prior year[26](index=26&type=chunk) [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) This section provides a detailed breakdown of the company's investment portfolio by security type and fair value at specified reporting dates Consolidated Schedules of Investments (in thousands) | Security Type (in thousands) | September 30, 2022 Fair Value | December 31, 2021 Fair Value | | :--------------------------- | :---------------------------- | :--------------------------- | | Senior Secured Loan | $415,819 | $364,701 | | Junior Secured Loan | $61,535 | $70,549 | | Equity Securities | $24,487 | $22,586 | | CLO Fund Securities | $24,623 | $31,632 | | Joint Ventures | $45,141 | $60,474 | | Total Investments | $571,656 | $547,573 | - The total investment portfolio at fair value increased by approximately **$24.08 million** from **$547.573 million** at December 31, 2021, to **$571.656 million** at September 30, 2022[37](index=37&type=chunk)[60](index=60&type=chunk) - Senior Secured Loans increased by **$51.118 million**, while Junior Secured Loans and CLO Fund Securities decreased by **$9.014 million** and **$7.009 million**, respectively[37](index=37&type=chunk)[60](index=60&type=chunk) [Consolidated Financial Highlights](index=21&type=section&id=Consolidated%20Financial%20Highlights) This section summarizes key financial metrics, including per share data, returns, and ratios, for the nine months ended September 30, 2022 and 2021 Consolidated Financial Highlights (Per Share Data and Ratios) | Per Share Data | 2022 (Nine Months Ended Sep 30) | 2021 (Nine Months Ended Sep 30) | | :----------------------------- | :------------------------------ | :------------------------------ | | Net asset value, at beginning of period | $28.88 | $28.77 | | Net investment income | $2.26 | $4.09 | | Net realized gains (losses) from investments | $(2.97) | $(1.38) | | Net change in unrealized (depreciation) appreciation on investments | $(0.07) | $0.92 | | Net (decrease) increase in net assets resulting from operations | $(0.89) | $3.41 | | Net asset value, end of period | $26.18 | $29.71 | | Total net asset value return | (1.6)% | 9.4% | | Total market return | (8.0)% | 47.7% | | Ratio/Supplemental Data | | | | Portfolio turnover rate | 25.0% | 41.8% | | Asset coverage ratio | 167% | 178% | | Ratio of net investment income to average net assets (annualized) | 11.0% | 18.4% | | Ratio of total expenses to average net assets (annualized) | 14.7% | 16.0% | - Net asset value per share decreased from **$28.88** to **$26.18**, resulting in a negative total net asset value return of **(1.6)%** for the nine months ended September 30, 2022, compared to a positive **9.4%** return in the prior year[65](index=65&type=chunk) - The asset coverage ratio decreased from **178%** to **167%** year-over-year, while the portfolio turnover rate also decreased from **41.8%** to **25.0%**[65](index=65&type=chunk) [Notes to Consolidated Financial Statements](index=22&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, investments, and debt [Note 1. Organization](index=23&type=section&id=Note%201.%20ORGANIZATION) This note describes Portman Ridge Finance Corporation's structure as a BDC and RIC, its investment strategy, and significant corporate events - Portman Ridge Finance Corporation operates as an externally managed, non-diversified closed-end investment company, regulated as a **Business Development Company (BDC)** and a **Regulated Investment Company (RIC)**[70](index=70&type=chunk)[72](index=72&type=chunk) - The company's asset coverage requirement for senior securities changed from **200%** to **150%** effective March 29, 2019, following Board approval under the Small Business Credit Availability Act (SBCA)[73](index=73&type=chunk) - Key acquisitions include **Garrison Capital Inc. (GARS)** on October 28, 2020, and **Harvest Capital Credit Corporation (HCAP)** on June 9, 2021, which significantly expanded the company's portfolio[80](index=80&type=chunk)[81](index=81&type=chunk) - A **1-for-10 reverse stock split** became effective on August 26, 2021, retroactively adjusting all share and per share values presented[87](index=87&type=chunk)[90](index=90&type=chunk) [Note 2. Significant Accounting Policies](index=24&type=section&id=Note%202.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and methodologies applied in preparing the consolidated financial statements, including investment valuation - The financial statements are prepared on the accrual basis in conformity with **U.S. GAAP** for interim financial information, following ASC topic 946 – Financial Services – Investment Companies[91](index=91&type=chunk) - The Board has designated the Adviser as its 'valuation designee' responsible for fair value determinations of all investments, with the Board retaining ultimate oversight[100](index=100&type=chunk) - The company utilizes independent valuation firms for third-party valuations of material illiquid securities at least once every 12 months[101](index=101&type=chunk) - Recent accounting pronouncements include **ASU 2020-04 (Reference Rate Reform)** and **ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions)**, with the latter effective for fiscal years beginning after December 15, 2023, and not expected to have a material impact[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 3. Earnings (Losses) Per Share](index=28&type=section&id=Note%203.%20EARNINGS%20(LOSSES)%20PER%20SHARE) This note details the calculation of basic and diluted net increase (decrease) in net assets per share for the reported periods Earnings (Losses) Per Share (in thousands) | ($ in thousands) | For the Three Months Ended September 30, 2022 | For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :----------------------------------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net increase (decrease) in net assets resulting from operations | $(4,205) | $9,145 | $(8,580) | $28,026 | | Weighted average number of common and common stock equivalent shares outstanding | 9,602,712 | 9,131,456 | 9,644,870 | 8,213,661 | | Net increase (decrease) in net assets per basic common shares and diluted shares | $(0.44) | $1.00 | $(0.89) | $3.41 | - For the three months ended September 30, 2022, net assets per basic and diluted share decreased by **$0.44**, a significant decline from an increase of **$1.00** in the same period of 2021[131](index=131&type=chunk) - For the nine months ended September 30, 2022, net assets per basic and diluted share decreased by **$0.89**, compared to an increase of **$3.41** in the prior year, reflecting a negative shift in operational performance[131](index=131&type=chunk) [Note 4. Investments](index=28&type=section&id=Note%204.%20INVESTMENTS) This note provides a comprehensive breakdown of the investment portfolio, including security types, industry concentration, and fair value measurements Investments by Security Type (in thousands) | Security Type (in thousands) | September 30, 2022 Fair Value | December 31, 2021 Fair Value | | :--------------------------- | :---------------------------- | :--------------------------- | | Senior Secured Loan | $415,819 | $364,701 | | Junior Secured Loan | $61,535 | $70,549 | | Equity Securities | $24,487 | $22,586 | | CLO Fund Securities | $24,623 | $31,632 | | Joint Ventures | $45,141 | $60,474 | | Total Investments | $571,656 | $547,573 | - The weighted average contractual interest rate on the interest-earning Debt Securities Portfolio increased from approximately **8.1%** at December 31, 2021, to **10.0%** at September 30, 2022[325](index=325&type=chunk) - As of September 30, 2022, **89.3%** of the Debt Securities Portfolio were floating rate with a spread to an interest rate index, and **74.8%** of these floating rate loans contained LIBOR floors ranging between **0.50%** and **2.00%**[427](index=427&type=chunk) - A significant portion of the company's investments are classified as **Level III** (unobservable inputs), totaling **$478.236 million** at September 30, 2022, reflecting the illiquid nature of BDC investments[175](index=175&type=chunk)[178](index=178&type=chunk) [Note 5. Related Party Transactions](index=37&type=section&id=Note%205.%20RELATED%20PARTY%20TRANSACTIONS) This note describes transactions with related parties, including advisory and administration fees, and co-investment arrangements - The Adviser receives a Base Management Fee of **1.50%** of average gross assets (excluding cash and cash equivalents) and an Incentive Fee with a **7.00%** hurdle rate, consisting of an Income-Based Fee (**17.50%** of pre-incentive fee net investment income) and a Capital Gains Fee (**17.50%** of cumulative realized capital gains, net of losses and depreciation)[199](index=199&type=chunk) Related Party Fees (in thousands) | Fees (in thousands) | For the Three Months Ended September 30, 2022 | For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Management fees | $2,082 | $2,065 | $6,305 | $5,772 | | Performance-based incentive fees | $1,780 | $1,939 | $4,627 | $6,333 | | Administrative services expense | $862 | $760 | $2,531 | $2,092 | - The SEC granted exemptive relief on October 23, 2018, allowing BDCs managed by the Adviser to co-invest with other affiliated funds in certain private placement transactions, subject to Board approval and fairness conditions[216](index=216&type=chunk)[217](index=217&type=chunk) - For the nine months ended September 30, 2022, the Company purchased **$4.0 million** in total investments from a fund managed by an affiliate of the Investment Advisor under Rule 17a-7 of the 1940 Act[218](index=218&type=chunk) [Note 6. Borrowings](index=40&type=section&id=Note%206.%20BORROWINGS) This note details the company's debt obligations, including secured notes and revolving credit facilities, their terms, and covenant compliance Debt Obligations (in thousands) | Debt Obligations (in thousands) | September 30, 2022 | December 31, 2021 | | :------------------------------------------------------------------------ | :----------------- | :---------------- | | 2018-2 Secured Notes (net) | $162,593 | $162,460 | | 4.875% Notes Due 2026 (net) | $105,301 | $104,892 | | Great Lakes Portman Ridge Funding LLC Revolving Credit Facility (net) | $95,908 | $79,839 | | Total | $363,802 | $347,191 | | Weighted average stated interest rate | 5.0% | 3.2% | | Weighted average maturity | 5.2 years | 5.4 years | - The **4.875% Notes Due 2026** were issued in 2021, with **$108.0 million** aggregate principal outstanding, maturing on April 30, 2026, and bearing interest at **4.875%** annually. The company was in compliance with all debt covenants[220](index=220&type=chunk)[222](index=222&type=chunk)[231](index=231&type=chunk)[377](index=377&type=chunk) - The Revolving Credit Facility was amended on April 29, 2022, replacing three-month LIBOR with SOFR as the benchmark interest rate, reducing the margin to **2.80%**, and extending the reinvestment period to April 29, 2025, and the scheduled termination date to April 29, 2026[242](index=242&type=chunk) - As of September 30, 2022, the company's asset coverage ratio was **167%**, compliant with the minimum **150%** required for a BDC[375](index=375&type=chunk) [Note 7. Distributable Taxable Income](index=43&type=section&id=Note%207.%20DISTRIBUTABLE%20TAXABLE%20INCOME) This note explains the company's RIC status, its policy on distributing taxable income, and reconciliation of GAAP net assets to taxable income - As a RIC, the company aims to distribute substantially all of its taxable income and gains to stockholders to avoid federal income tax at the corporate level[260](index=260&type=chunk) Distributable Taxable Income (in thousands) | ($ in thousands) | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | | :-------------------------------------------------------- | :----------------------------------- | :----------------------------------- | | Net (decrease) increase in net assets resulting from operations | $(8,580) | $28,026 | | Taxable income before deductions for distributions | $22,092 | $20,482 | | Taxable income per weighted average basic and diluted shares | $2.29 | $2.49 | - The company had a net capital loss carryforward of **$416.3 million** at September 30, 2022, which is not subject to expiration, to offset future net capital gains[266](index=266&type=chunk) - Taxable subsidiaries' activity resulted in a provision for income taxes of **$1.1 million** for the nine months ended September 30, 2022, with no deferred tax assets and **$2.9 million** in deferred tax liabilities[267](index=267&type=chunk) [Note 8. Commitments and Contingencies](index=44&type=section&id=Note%208.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's off-balance sheet arrangements, including unfunded commitments and ongoing legal proceedings - As of September 30, 2022, the company had **$54.4 million** in unfunded commitments to extend credit to portfolio companies, an increase from **$47.9 million** at December 31, 2021[269](index=269&type=chunk)[273](index=273&type=chunk) - A significant portion of these commitments includes a **$21.7 million** unfunded commitment to the Great Lakes II Joint Venture[270](index=270&type=chunk)[273](index=273&type=chunk) - The company is involved in the Delaware Actions, putative stockholder class action lawsuits concerning the HCAP merger, and intends to vigorously defend itself, with the outcome and potential losses currently indeterminable[271](index=271&type=chunk)[442](index=442&type=chunk) [Note 9. Stockholders' Equity](index=45&type=section&id=Note%209.%20STOCKHOLDERS%27%20EQUITY) This note details changes in stockholders' equity, including net income, distributions, capital share transactions, and stock repurchase programs Stockholders' Equity (in thousands) | (in thousands) | Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | | :------------------------------------------------------- | :----------------------------------- | :----------------------------------- | | Balance, January 1 | $280,122 | $216,264 | | Net investment income | $21,822 | $33,641 | | Net realized (losses) from investment transactions and extinguishment of debt | $(28,631) | $(11,373) | | Net change in unrealized appreciation on investments | $(712) | $7,593 | | Distributions to Stockholders | $(18,223) | $(14,573) | | Reinvested Dividends | $888 | $444 | | Stock-repurchase | $(3,004) | $(1,827) | | Private placement and other | $379 | $42,714 | | Balance, September 30 | $251,582 | $271,048 | - The Board authorized a renewed stock repurchase program of up to **$10 million** in March 2022, effective until March 31, 2023. For the nine months ended September 30, 2022, the company repurchased **129,617 shares** for approximately **$3.0 million**[276](index=276&type=chunk)[278](index=278&type=chunk) - The total number of common shares outstanding decreased from **9,699,695** at December 31, 2021, to **9,608,913** at September 30, 2022[277](index=277&type=chunk) [Note 10. Acquisitions of Garrison Capital Inc. and Harvest Capital Credit Corporation](index=46&type=section&id=Note%2010.%20ACQUISITIONS%20OF%20GARRISON%20CAPITAL%20INC.%20AND%20HARVEST%20CAPITAL%20CREDIT%20CORPORATION) This note describes the acquisitions of Garrison Capital Inc. and Harvest Capital Credit Corporation, including purchase consideration and acquired assets - The GARS acquisition (October 28, 2020) involved cash and company common stock, with a total purchase consideration of **$64.033 million** and a purchase discount of **$(40.422) million**[279](index=279&type=chunk)[281](index=281&type=chunk) - The HCAP acquisition (June 9, 2021) also involved cash and company common stock, with a total purchase consideration of **$58.632 million** and a purchase discount of **$(3.809) million**[282](index=282&type=chunk)[287](index=287&type=chunk) - In connection with the HCAP acquisition, the company assumed **$28.75 million** in HCAP Notes, which were subsequently redeemed in full on July 23, 2021[288](index=288&type=chunk)[290](index=290&type=chunk) [Note 11. Subsequent Events](index=48&type=section&id=Note%2011.%20SUBSEQUENT%20EVENTS) This note discloses material events occurring after the reporting period, specifically a declared cash distribution to common stockholders - On November 8, 2022, the Board declared a cash distribution of **$0.67 per share** of common stock, payable on December 13, 2022, to stockholders of record as of November 24, 2022[291](index=291&type=chunk) - Management has determined that no other material subsequent events occurred after September 30, 2022, that would require adjustment to, or disclosure in, the unaudited consolidated financial statements[292](index=292&type=chunk) [Item 2. 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) This section provides management's analysis of the company's financial performance, liquidity, capital resources, and critical accounting policies [General Overview](index=49&type=section&id=General) This section provides an overview of Portman Ridge Finance Corporation's investment objective, BDC status, and significant corporate transactions - Portman Ridge Finance Corporation is an externally managed BDC, regulated under the **1940 Act**, with Sierra Crest Investment Management LLC serving as its investment adviser[295](index=295&type=chunk) - The company's investment objective is to generate current income and capital appreciation primarily from secured term loans, mezzanine debt, and selected equity investments in privately-held middle-market companies (EBITDA **$10 million-$50 million**, total debt **$25 million-$150 million**)[297](index=297&type=chunk) - The company maintains RIC status for U.S. federal income tax purposes, intending to distribute substantially all net ordinary taxable income and capital gains to stockholders[300](index=300&type=chunk) - Significant corporate events include the Externalization of management in April 2019, the acquisition of **Garrison Capital Inc. (GARS)** in October 2020, and the acquisition of **Harvest Capital Credit Corporation (HCAP)** in June 2021, followed by a **1-for-10 reverse stock split** in August 2021[302](index=302&type=chunk)[304](index=304&type=chunk)[306](index=306&type=chunk)[312](index=312&type=chunk) [Portfolio and Investment Activity](index=50&type=section&id=Portfolio%20and%20Investment%20Activity) This section details the company's investment portfolio composition, activity, and changes in fair value for various security types Portfolio and Investment Activity (in thousands) | Security Type (in thousands) | Fair Value at December 31, 2021 | Purchases / originations / draws (2022) | Pay-downs / pay-offs / sales (2022) | Increase (decrease) in fair value (2022) | Fair Value at September 30, 2022 | | :--------------------------- | :------------------------------ | :-------------------------------------- | :---------------------------------- | :--------------------------------------- | :------------------------------- | | Senior Secured Loan | $364,701 | $179,217 | $(125,901) | $(5,088) | $415,819 | | Junior Secured Loan | $70,549 | - | $(8,036) | - | $61,535 | | Equity Securities | $22,586 | $7,763 | $(8,036) | $903 | $24,487 | | CLO Fund Securities | $31,632 | - | $(5,571) | $7,140 | $24,623 | | Joint Ventures | $60,474 | $1,700 | $(10,400) | $(6,107) | $45,141 | | Total Portfolio | $547,573 | $188,680 | $(147,833) | $(712) | $571,656 | - The total investment portfolio increased by **$24.083 million** from December 31, 2021, to September 30, 2022, driven by **$188.680 million** in purchases/originations/draws and offset by **$147.833 million** in pay-downs/sales[318](index=318&type=chunk) - The weighted average contractual interest rate on the interest-earning Debt Securities Portfolio increased from approximately **8.1%** at December 31, 2021, to **10.0%** at September 30, 2022[325](index=325&type=chunk) - As of September 30, 2022, **three investments** were on non-accrual status, a decrease from **seven** at December 31, 2021[326](index=326&type=chunk) [Results of Operations](index=54&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including investment income, expenses, and net assets from operations for the reported periods Results of Operations (in thousands) | (in thousands) | For the Three Months Ended September 30, 2022 | For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2021 | | :-------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total investment income | $19,009 | $22,911 | $50,997 | $62,761 | | Total expenses | $10,617 | $9,193 | $29,175 | $29,120 | | NET INVESTMENT INCOME | $8,392 | $13,718 | $21,822 | $33,641 | | Net realized gain (loss) on investments | $(9,087) | $(3,931) | $(28,631) | $(11,373) | | Net unrealized gain (loss) on investments | $(2,968) | $(642) | $(712) | $7,593 | | Net increase (decrease) in net assets resulting from operations | $(4,205) | $9,145 | $(8,580) | $28,026 | - Total investment income decreased by **$3.902 million (17.0%)** for the three months and **$11.764 million (18.7%)** for the nine months ended September 30, 2022, compared to the prior year[349](index=349&type=chunk) - Net investment income decreased by **$5.326 million (38.8%)** for the three months and **$11.819 million (35.1%)** for the nine months ended September 30, 2022, year-over-year[349](index=349&type=chunk) - The company reported a net decrease in net assets from operations of **$(4.205) million** for the three months and **$(8.580) million** for the nine months ended September 30, 2022, a significant reversal from positive results in 2021[349](index=349&type=chunk) [Financial Condition, Liquidity, and Capital Resources](index=57&type=section&id=Financial%20Condition%2C%20Liquidity%2C%20and%20Capital%20Resources) This section discusses the company's financial position, cash management, debt obligations, and capital availability Financial Condition, Liquidity, and Capital Resources (in thousands) | (in thousands) | September 30, 2022 | December 31, 2021 | | :------------------------- | :----------------- | :---------------- | | Cash and cash equivalents | $16,871 | $28,919 | | Restricted Cash | $22,183 | $39,421 | | Total Investments | $571,656 | $547,573 | | Total Debt Outstanding (par value) | $368,934 | $352,434 | | Asset coverage ratio | 167% | 178% | - The company's asset coverage ratio was **167%** at September 30, 2022, remaining compliant with the **150%** minimum required for a BDC[375](index=375&type=chunk) - Total outstanding borrowings (par value) increased by **$16.5 million** from **$352.434 million** at December 31, 2021, to **$368.934 million** at September 30, 2022[375](index=375&type=chunk) - The Board authorized a renewed **$10 million** stock repurchase program in March 2022, effective until March 31, 2023, with **$6.996 million** remaining under the program as of September 30, 2022[395](index=395&type=chunk)[446](index=446&type=chunk) [Critical Accounting Policies](index=60&type=section&id=Critical%20Accounting%20Policies) This section highlights the key accounting policies requiring significant judgment and estimation, particularly investment valuation and income recognition - The most significant estimate in financial statements is the valuation of investments and related unrealized appreciation/depreciation, with fair value determined in good faith by the Board[401](index=401&type=chunk)[402](index=402&type=chunk) - Investments are classified into a three-level hierarchy (Level I, II, III) based on the transparency of inputs to fair value measurement, with a majority of the company's investments being **Level III** due to unobservable inputs[406](index=406&type=chunk) - Interest income is recognized on an accrual basis, but loans are placed on non-accrual status if 90 days or more past due or if collectibility is not expected. As of September 30, 2022, **three investments** were on non-accrual status[417](index=417&type=chunk) - Investment income on CLO equity investments is recorded using the effective interest method based on anticipated yield and estimated cash flows, differing from tax-basis income and cash distributions[419](index=419&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section assesses the company's exposure to market risks, focusing on interest rate fluctuations and their potential impact on net investment income - The company's principal market risks are fluctuations in interest rates and the valuations of its investment portfolio[424](index=424&type=chunk) - As of September 30, 2022, approximately **89.3%** of the Debt Securities Portfolio consisted of floating-rate loans, with **74.8%** of these having LIBOR floors ranging from **0.50%** to **2.00%**[427](index=427&type=chunk) Impact on Net Investment Income from a Change in Interest Rates (in thousands) | Impact on net investment income from a change in interest rates at: (in thousands) | 1% Increase | 2% Increase | 3% Increase | | :--------------------------------------------------------------------------------- | :---------- | :---------- | :---------- | | Increase in interest rate | $2,100 | $4,029 | $5,957 | | Decrease in interest rate | $1,340 | $(561) | $(2,493) | - The fair value of investments, especially those without readily available market quotations, is determined in good faith by the Board using a consistent valuation policy, often with assistance from independent valuation firms[433](index=433&type=chunk)[434](index=434&type=chunk) [Item 4. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=63&type=section&id=Item%204.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section confirms the absence of any changes in or disagreements with accountants regarding accounting and financial disclosure matters - There have been no changes in and disagreements with accountants on accounting and financial disclosure[435](index=435&type=chunk) [Item 5. Controls and Procedures](index=63&type=section&id=Item%205.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and the absence of material changes in internal control over financial reporting - The company's CEO and CFO concluded that the disclosure controls and procedures were effective as of September 30, 2022[436](index=436&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2022[437](index=437&type=chunk) [Part II. Other Information](index=64&type=section&id=Part%20II.%20Other%20Information) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, and other miscellaneous information [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section discloses the company's involvement in putative stockholder class action lawsuits related to the HCAP merger - The company is a defendant in two putative stockholder class action lawsuits (the "Delaware Actions") alleging breaches of fiduciary duties related to the HCAP merger[440](index=440&type=chunk)[441](index=441&type=chunk) - The company became responsible for claims against HCAP and its former officers/directors after the merger[441](index=441&type=chunk) - The outcome of the lawsuits and an estimate of reasonably possible losses are not determinable at this time, but the company maintains directors' and officers' insurance[442](index=442&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section states that there are no material changes to previously disclosed risk factors from the annual report - No material changes to risk factors were identified during fiscal 2021, beyond those in the Annual Report on Form 10-K for December 31, 2021[443](index=443&type=chunk) [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) This section reports on unregistered sales of equity securities through the DRIP and share repurchases under authorized programs - During the nine months ended September 30, 2022, the company issued **38,835 shares** of common stock under its dividend reinvestment plan (DRIP) for approximately **$888 thousand**[444](index=444&type=chunk) Share Repurchase Program (in thousands) | Period | Total Number of Shares Purchased | Average Price Per Share | Dollar Value of Shares that May Yet Be Purchased Under the Program (Thousands) | | :------------------------- | :------------------------------- | :---------------------- | :----------------------------------------------------------------------------- | | March 11-March 31, 2021 | - | - | $10,000 | | April 1-June 30, 2021 | 15,718 | $24.20 | $9,620 | | July 1-September 30, 2021 | 59,659 | $24.24 | $8,174 | | October 1-December 31, 2021| - | - | $8,174 | | Total, December 31, 2021 | 75,377 | | | | March 17-March 31, 2022 | 22,990 | $23.72 | $9,455 | | April 1-April 30, 2022 | 39,014 | $23.75 | $8,528 | | May 1-May 31, 2022 | 42,426 | $22.73 | $7,564 | | June 1-June 30, 2022 | 25,187 | $22.53 | $6,996 | | July 1-September 30, 2022 | - | - | $6,996 | | Total, September 30, 2022 | 129,617 | | | | Total | 204,994 | | | - During the nine months ended September 30, 2022, the company repurchased **129,617 shares** under its Renewed Stock Repurchase program at an aggregate cost of approximately **$3.0 million**[278](index=278&type=chunk)[396](index=396&type=chunk) [Item 3. Defaults Upon Senior Securities](index=65&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[448](index=448&type=chunk) [Item 4. Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[449](index=449&type=chunk) [Item 5. Other Information](index=65&type=section&id=Item%205.%20Other%20Information) This section states that no other material information requires reporting - No other information is reported[450](index=450&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the report, including corporate governance documents and officer certifications - The exhibits include Certificates of Amendment to the Certificate of Incorporation (Form N-2, Form 8-K filings), Third Amended and Restated Bylaws, and certifications from the CEO and CFO (pursuant to Rule 13a-14(a) and 18 U.S.C. 1350)[453](index=453&type=chunk) [Signatures](index=66&type=section&id=Signatures) This section contains the official signatures of the company's President, CEO, and CFO, certifying the report's submission - The report is signed by Edward Goldthorpe, President and Chief Executive Officer, and Jason Roos, Chief Financial Officer, on November 8, 2022[455](index=455&type=chunk)