ptmn-10q_20190930.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to

Commission File No. 814-00735

Portman Ridge Finance Corporation

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

20-5951150

(State or other jurisdiction of

Incorporation or organization)

 

(I.R.S. Employer

Identification Number)

650 Madison Avenue, 23rd Floor

New York, New York 10022

(Address of principal executive offices)

(212) 891-2880

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

6.125% Notes due 2022

 

KCAPL

 

The NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 

The number of outstanding shares of common stock of the registrant as of November 4, 2019 was 37,371,912.

 

 

 

 


TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

Part I. Financial Information

 

 

 

 

Item 1.

Consolidated Financial Statements

 

 

 

 

 

Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

5

 

 

 

 

Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2019 and 2018

6

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) for the nine months ended September 30, 2019 and 2018

7

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2019 and 2018

8

 

 

 

 

Consolidated Schedules of Investments as of September 30, 2019 (unaudited) and December 31, 2018

9

 

 

 

 

Consolidated Financial Highlights (unaudited) for the nine months ended September 30, 2019 and 2018

25

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

26

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

69

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

97

 

 

 

Item 4.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

99

 

 

 

Item 5.

Controls and Procedures

99

 

 

 

 

Part II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

100

 

 

 

Item 1A.

Risk Factors

100

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

100

 

 

 

Item 3.

Defaults Upon Senior Securities

100

 

 

 

Item 4.

Mine Safety Disclosures

101

 

 

 

Item 5.

Other Information

101

 

 

 

Item 6.

Exhibits

101

 

 

 

Signatures

 

103

 

2


NOTE ABOUT REFERENCES TO PORTMAN RIDGE FINANCE CORPORATION

In this Quarterly Report on Form 10-Q, the “Company”, “Portman Ridge”, “we”, “us” and “our” refer to Portman Ridge Finance Corporation and its wholly-owned subsidiaries, Great Lakes KCAP Funding I LLC, Kohlberg Capital Funding I LLC, KCAP Senior Funding I, LLC and KCAP Senior Funding I Holdings, LLC, unless the context otherwise requires.

NOTE ABOUT FORWARD-LOOKING STATEMENTS

The information contained in this item should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report and in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”). In addition, some of the statements in this report constitute forward-looking statements. The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology 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. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

 

our future operating results;

 

our business prospects and the prospects of our existing and prospective portfolio companies;

 

the return or impact of current and future investments;

 

our contractual arrangements and other relationships with third parties;

 

the dependence of our future success on the general economy and its impact on the industries in which we invest;

 

the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives;

 

our expected financings and investments;

 

our regulatory structure and tax treatment;

 

our ability to operate as a business development company (“BDC”) and a regulated investment company (“RIC”), including the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies;

3


 

the adequacy of our cash resources and working capital;

 

the timing of cash flows, if any, from the operations of our portfolio companies;

 

the ability of Sierra Crest Investment Management LLC (the “Adviser”) to locate suitable investments for us to monitor and administer our investments;

 

the ability of the Adviser to attract and retain highly talented professionals;

 

actual and potential conflicts of interest with the Adviser and its affiliates;

 

our ability to qualify and maintain our qualification as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a BDC;

 

the effect of legal, tax, and regulatory changes;

 

the impact of a protracted decline in the liquidity of credit markets on our business;

 

the impact of fluctuations in interest rates on our business;

 

the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

 

our ability to recover unrealized losses;

 

market conditions and our ability to access additional capital; and

 

the timing, form and amount of any dividend distributions.

For a more detailed discussion of factors that could cause our actual results to differ from forward-looking statements contained in this Quarterly Report, please see the discussion in Part II, “Item 1A. Risk Factors”, and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date this Quarterly Report is filed with the SEC.

4


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

2019

 

 

December 31,

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

 

 

Short-term investments (cost: 2019 - $23,180,863; 2018 - $44,756,478)

 

$

23,180,863

 

 

$

44,756,478

 

Debt securities (amortized cost: 2019 - $186,442,505; 2018 - $162,264,482)

 

 

175,624,345

 

 

 

147,861,744

 

CLO Fund Securities managed by affiliates (amortized cost: 2019 - $46,022,111; 2018 - $4,407,106)

 

 

34,451,281

 

 

 

4,473,840

 

CLO Fund Securities managed by non-affiliates (amortized cost: 2019 - $2,803,872; 2018 - $51,073,520)

 

 

2,420,014

 

 

 

39,851,160

 

Equity securities (cost: 2019 - $19,528,755; 2018 - $9,477,763)

 

 

6,279,611

 

 

 

2,038,020

 

Asset Manager Affiliates (cost: 2019 - $17,791,230; 2018 - $17,791,230)

 

 

 

 

 

3,470,000

 

Joint Ventures (cost: 2019 - $49,052,776; 2018 - $37,381,525)

 

 

45,426,006

 

 

 

30,857,107

 

Derivatives (cost: 2019 - $30,609; 2018 - $0)

 

 

9,650

 

 

 

-

 

Total Investments at Fair Value (cost: 2019 - $344,852,721; 2018 - $327,152,104)

 

 

287,391,771

 

 

 

273,308,349

 

Cash

 

 

341,166

 

 

 

5,417,125

 

Restricted cash

 

 

1,010,578

 

 

 

3,907,341

 

Interest receivable

 

 

1,248,372

 

 

 

1,342,970

 

Due from affiliates

 

 

670,946

 

 

 

1,007,631

 

Operating lease right-of-use asset

 

 

1,602,077

 

 

 

 

Other assets

 

 

900,830

 

 

 

481,265

 

Total Assets

 

$

293,165,740

 

 

$

285,464,681

 

LIABILITIES

 

 

 

 

 

 

 

 

6.125% Notes Due 2022 (net of offering costs of: 2019-$1,793,546; 2018 - $2,207,341)

 

$

75,613,654

 

 

$

75,199,858

 

Great Lakes KCAP Funding I, LLC Revolving Credit Facility (net of offering costs of: 2019-$1,154,688; 2018 - $1,155,754)

 

 

46,865,797

 

 

 

25,200,331

 

Operating lease liability

 

 

3,265,081

 

 

 

 

Payable for open trades

 

 

31,489,007

 

 

 

23,204,564

 

Accounts payable and accrued expenses

 

 

1,439,062

 

 

 

3,591,910

 

Accrued interest payable

 

 

262,964

 

 

 

131,182

 

Due to affiliates

 

 

481,163

 

 

 

115,825

 

Management and incentive fees payable

 

 

1,026,000

 

 

 

 

Total Liabilities

 

 

160,442,728

 

 

 

127,443,670

 

COMMITMENTS AND CONTINGENCIES (NOTE 8)

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share, 100,000,000 common shares authorized; 37,566,771 issued, and 37,371,912 outstanding at September 30, 2019, and 37,521,705 issued, and 37,326,846 outstanding at December 31, 2018

 

 

373,719

 

 

 

373,268

 

Capital in excess of par value

 

 

307,210,386

 

 

 

306,784,387

 

Total distributable (loss) earnings

 

 

(174,861,093

)

 

 

(149,136,644

)

Total Stockholders' Equity

 

 

132,723,012

 

 

 

158,021,011

 

Total Liabilities and Stockholders' Equity

 

$

293,165,740

 

 

$

285,464,681

 

NET ASSET VALUE PER COMMON SHARE

 

$

3.55

 

 

$

4.23

 

 

See accompanying notes to consolidated financial statements.

5


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments in debt securities

 

$

3,882,096

 

 

$

4,487,575

 

 

$

10,650,753

 

 

$

11,796,245

 

Payment-in-kind investment income

 

 

311,936

 

 

 

329,365

 

 

 

325,478

 

 

 

1,061,419

 

Interest from cash and time deposits

 

 

13,952

 

 

 

9,767

 

 

 

66,065

 

 

 

71,183

 

Investment income on CLO Fund Securities managed by affiliates

 

 

1,454,086

 

 

 

1,179,463

 

 

 

3,193,840

 

 

 

4,428,032

 

Investment income on CLO Fund Securities managed by non-affiliates

 

 

107,889

 

 

 

94,992

 

 

 

1,894,737

 

 

 

292,694

 

Dividends from Asset Manager Affiliates

 

 

 

 

 

300,000

 

 

 

 

 

 

920,000

 

Investment income - Joint Ventures

 

 

1,300,590

 

 

 

750,000

 

 

 

3,542,257

 

 

 

2,150,000

 

Capital structuring service fees

 

 

5,647

 

 

 

7,588

 

 

 

116,645

 

 

 

114,097

 

Total investment income

 

 

7,076,196

 

 

 

7,158,750

 

 

 

19,789,775

 

 

 

20,833,670

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

1,026,000

 

 

 

 

 

 

2,052,100

 

 

 

 

Performance-based incentive fees

 

 

 

 

 

 

 

 

 

 

 

 

Interest and amortization of debt issuance costs

 

 

2,280,627

 

 

 

1,871,187

 

 

 

6,063,984

 

 

 

5,582,467

 

Compensation

 

 

 

 

 

1,004,323

 

 

 

3,688,578

 

 

 

3,216,710

 

Professional fees

 

 

644,485

 

 

 

867,724

 

 

 

2,827,131

 

 

 

2,489,098

 

Insurance

 

 

129,157

 

 

 

79,152

 

 

 

577,257

 

 

 

236,900

 

Administrative services expense

 

 

438,502

 

 

 

 

 

 

848,102

 

 

 

 

Other general and administrative expenses

 

 

314,992

 

 

 

381,835

 

 

 

1,374,606

 

 

 

1,364,302

 

Impairment of operating lease right-of-use asset

 

 

 

 

 

 

 

 

1,431,030

 

 

 

 

Total expenses

 

 

4,833,763

 

 

 

4,204,221

 

 

 

18,862,788

 

 

 

12,889,477

 

Management and performance-based incentive fees waived

 

 

 

 

 

 

 

 

 

 

 

 

Net Expenses

 

 

4,833,763

 

 

 

4,204,221

 

 

 

18,862,788

 

 

 

12,889,477

 

Net Investment Income

 

 

2,242,433

 

 

 

2,954,529

 

 

 

926,987

 

 

 

7,944,193

 

Realized And Unrealized (Losses) Gains On Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized (losses) gains from investment transactions

 

 

(1,176,073

)

 

 

(136,766

)

 

 

(16,796,465

)

 

 

(137,336

)

Net change in unrealized (depreciation) appreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

(621,192

)

 

 

(1,232,216

)

 

 

3,584,578

 

 

 

(2,357,578

)

Equity securities

 

 

(909,990

)

 

 

(171,775

)

 

 

(5,809,402

)

 

 

(335,348

)

CLO Fund Securities managed by affiliates

 

 

(2,715,673

)

 

 

682,574

 

 

 

(3,330,808

)

 

 

(325,678

)

CLO Fund Securities managed by non-affiliates

 

 

55,174

 

 

 

5,427

 

 

 

2,531,746

 

 

 

200,723

 

Asset Manager Affiliates investments

 

 

 

 

 

(1,035,000

)

 

 

 

 

 

(2,031,000

)

Joint Venture Investments

 

 

(1,104,502

)

 

 

282,076

 

 

 

2,897,649

 

 

 

(142,430

)

Derivatives

 

 

(20,959

)

 

 

 

 

 

(20,959

)

 

 

 

Total net change in unrealized appreciation (depreciation)

 

 

(5,317,142

)

 

 

(1,468,914

)

 

 

(147,196

)

 

 

(4,991,311

)

Net realized and unrealized (depreciation) on investments

 

 

(6,493,215

)

 

 

(1,605,680

)

 

 

(16,943,661

)

 

 

(5,128,647

)

Realized losses on extinguishments of Debt

 

 

 

 

 

 

 

 

 

 

 

(169,074

)

Net (Decrease) Increase In Stockholders’ Equity Resulting From Operations

 

$

(4,250,782

)

 

$

1,348,849

 

 

$

(16,016,674

)

 

$

2,646,472

 

Net (Decrease) Increase In Stockholders' Equity Resulting from Operations per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

(0.11

)

 

$

0.04

 

 

$

(0.43

)

 

$

0.07

 

Diluted:

 

$

(0.11

)

 

$

0.04

 

 

$

(0.43

)

 

$

0.07

 

Net Investment (Loss) Income Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

0.06

 

 

$

0.08

 

 

$

0.02

 

 

$

0.21

 

Diluted:

 

$

0.06

 

 

$

0.08

 

 

$

0.02

 

 

$

0.21

 

Weighted Average Shares of Common Stock Outstanding—Basic

 

 

37,361,746

 

 

 

37,349,904

 

 

 

37,348,835

 

 

 

37,354,449

 

Weighted Average Shares of Common Stock Outstanding—Diluted

 

 

37,361,746

 

 

 

37,349,904

 

 

 

37,348,835

 

 

 

37,354,449

 

 

See accompanying notes to consolidated financial statements.

6


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(1)

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

Operations:

 

 

 

 

 

 

 

 

Net investment (loss) income

 

$

926,987

 

 

$

7,944,193

 

Net realized (losses) gains from investment transactions

 

 

(16,796,465

)

 

 

(137,336

)

Realized losses from extinguishments of debt

 

 

 

 

 

(169,074

)

Net change in unrealized appreciation on investments

 

 

(147,196

)

 

 

(4,991,311

)

Net (decrease) increase in stockholders’ equity resulting from operations

 

 

(16,016,674

)

 

 

2,646,472

 

 

 

 

 

 

 

 

 

 

Stockholder distributions:

 

 

(9,707,773

)

 

 

(11,157,327

)

 

 

 

 

 

 

 

 

 

Capital share transactions:

 

 

 

 

 

 

 

 

Issuance of common stock for:

 

 

 

 

 

 

 

 

Dividend reinvestment plan

 

 

167,512

 

 

 

154,600

 

Common stock withheld for payroll taxes upon vesting of restricted stock

 

 

 

 

 

(86,743

)

Stock based compensation

 

 

258,936

 

 

 

546,927

 

Net increase in net assets resulting from capital share transactions

 

 

426,448

 

 

 

614,784

 

Net assets at beginning of period

 

 

158,021,011

 

 

 

181,804,576

 

Net assets at end of period

 

$

132,723,012

 

 

$

173,908,505

 

Net asset value per common share

 

$

3.55

 

 

$

4.66

 

Common shares outstanding at end of period

 

 

37,371,912

 

 

 

37,349,224

 

 

(1)

Refer to note 10 "Stockholders' Equity" for additional information on changes in components of Stockholders' Equity

See accompanying notes to consolidated financial statements.

7


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net (decrease) increase in stockholder's equity resulting from operations

 

$

(16,016,674

)

 

$

2,646,472

 

Adjustments to reconcile net (decrease) increase in stockholder’s equity resulting from operations to net cash (used in) provided by in operations:

 

 

 

 

 

 

 

 

Net realized losses (gains) on investment transactions

 

 

16,796,465

 

 

 

137,336

 

Net change in unrealized appreciation from investments

 

 

147,196

 

 

 

4,991,311

 

Purchases of investments

 

 

(106,626,968

)

 

 

(75,550,935

)

Proceeds from sales and redemptions of investments

 

 

80,926,508

 

 

 

115,362,645

 

Net accretion of investments

 

 

(5,001,145

)

 

 

(5,408,308

)

Amortization of debt issuance costs

 

 

787,011

 

 

 

665,000

 

Realized losses on extinguishments of debt

 

 

 

 

 

169,074

 

Operating lease impairment

 

 

1,431,030

 

 

 

 

Net amortization of operating lease

 

 

(143,016

)

 

 

 

Payment-in-kind interest income

 

 

(325,478

)

 

 

(1,061,419

)

Stock-based compensation

 

 

258,936

 

 

 

546,927

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Increase (decrease) in payable for open trades

 

 

8,284,443

 

 

 

(34,215,195

)

(Increase) Decrease in receivable for open trades

 

 

 

 

 

2,993,750

 

Decrease (increase) in interest and dividends receivable

 

 

94,598

 

 

 

(1,224,891

)

Increase in accrued interest payable

 

 

131,782

 

 

 

86,133

 

(Increase) decrease in other assets

 

 

(419,565

)

 

 

189,737

 

Decrease (increase) in due from affiliates

 

 

336,685

 

 

 

308,373

 

Increase in management and incentive fees payable

 

 

1,026,000

 

 

 

(24,956

)

(Decrease) increase in due to affiliates

 

 

365,338

 

 

 

 

Decrease (increase) in accounts payable and accrued expenses

 

 

(1,777,859

)

 

 

(342,250

)

Net cash (used in) provided by operating activities

 

 

(19,724,712

)

 

 

10,268,804

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

(372,150

)

 

 

(1,459,899

)

Common stock withheld for payroll taxes upon vesting of restricted stock

 

 

 

 

 

(86,743

)

Distributions to stockholders

 

 

(9,540,261

)

 

 

(11,002,727

)

Repayment 7.375 Notes Due 2019

 

 

 

 

 

(20,000,000

)

Borrowings under Great Lakes KCAP Funding LLC, Revolving Credit Facility

 

 

85,000,000

 

 

 

31,000,000

 

Repayment of Great Lakes KCAP Funding LLC, Revolving Credit Facility

 

 

(63,335,599

)

 

 

(8,051,806

)

Net cash provided by (used in) financing activities

 

 

11,751,990

 

 

 

(9,601,175

)

CHANGE IN CASH AND RESTRICTED CASH

 

 

(7,972,722

)

 

 

667,629

 

CASH AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

9,324,466

 

 

 

2,034,095

 

CASH AND RESTRICTED CASH, END OF PERIOD

 

$

1,351,744

 

 

$

2,701,724

 

Supplemental Information:

 

 

 

 

 

 

 

 

Interest paid during the period

 

$

4,772,071

 

 

$

4,830,690

 

Dividends paid during the period under the dividend reinvestment plan

 

$

167,512

 

 

$

154,600

 

Supplemental non-cash information:

 

 

 

 

 

 

 

 

Realized loss on Asset Manager Affiliates

 

$

3,470,000

 

 

$

 

Initial recognition of operating lease right-of-use asset

 

$

3,309,131

 

 

$

 

Initial recognition for operating lease liability

 

$

3,684,121

 

 

$

 

Amounts per balance sheet

 

 

 

 

 

 

 

 

Cash

 

$

341,166

 

 

$

1,713,906

 

Restricted cash

 

 

1,010,578

 

 

 

987,818

 

Total Cash and Restricted cash

 

$

1,351,744

 

 

$

2,701,724

 

 

See accompanying notes to consolidated financial statements.

8


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2019

(unaudited)

Debt Securities Portfolio

 

Portfolio Company /

Principal Business

 

Investment

Interest Rate¹ / Maturity15

 

Initial

Acquisition

Date

 

Principal

 

 

Amortized

Cost

 

 

Fair Value2

 

Acrisure, LLC

     Banking, Finance, Insurance & Real Estate

(8)(14)

Senior Secured Loan — 2017-2 Refinancing Term Loan (First Lien)

6.4% Cash, 3 month  LIBOR(2.10%) + 4.25%; LIBOR Floor 1.00% , Due 11/23

 

9/30/2019

 

$

1,994,911

 

 

$

1,992,417

 

 

$

1,992,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advanced Lighting Technologies, Inc.

     Consumer goods: Durable

(5)(8)(13)

Junior Secured Loan — Second Lien Notes

19.1% PIK, 1 month LIBOR(2.10%) + -2.10%; LIBOR Floor 1.00% , Due 10/23

 

6/13/2012

 

 

1,163,950

 

 

 

1,069,118

 

 

 

2,474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akumin Corp.

     Healthcare & Pharmaceuticals

(8)(14)

Senior Secured Loan — Initial Term B Loan

8.0% Cash, 3 month  LIBOR(2.04%) + 6.00%; LIBOR Floor 1.00% , Due 5/24

 

5/31/2019

 

 

2,244,375

 

 

 

2,202,509

 

 

 

2,199,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anthem Sports & Entertainment Inc.

     Media: Broadcasting & Subscription

(8)

Senior Secured Loan — Revolving Loan

11.6% Cash, 3 month  LIBOR(2.10%) + 9.50%; LIBOR Floor 1.00% , Due 9/24

 

9/9/2019

 

 

416,667

 

 

 

374,954

 

 

 

400,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anthem Sports & Entertainment Inc.

     Media: Broadcasting & Subscription

(8)

Senior Secured Loan — Term Loan

8.9% Cash, 2.8% PIK, 3 month  LIBOR(2.10%) + 6.75%; LIBOR Floor 1.00% , Due 9/24

 

9/9/2019

 

 

4,590,686

 

 

 

4,406,856

 

 

 

4,414,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BMC Acquisition, Inc. (aka BenefitMall)

     Banking, Finance, Insurance & Real Estate

(8)(13)(14)

Senior Secured Loan — Initial Term Loan

7.4% Cash, 1 month LIBOR(2.26%) + 5.17%; LIBOR Floor 1.00% , Due 12/24

 

1/2/2018

 

 

2,947,500

 

 

 

2,946,198

 

 

 

2,883,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BW NHHC Holdco Inc.

     Healthcare & Pharmaceuticals

(8)(13)(14)

Senior Secured Loan — Initial Term Loan (First Lien)

7.1% Cash, 1 month LIBOR(2.05%) + 5.00% , Due 5/25

 

5/16/2018

 

 

1,975,000

 

 

 

1,951,130

 

 

 

1,793,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carestream Health, Inc.

     Healthcare & Pharmaceuticals

(8)(13)

Junior Secured Loan — Extended Term Loan (Second Lien)

11.5% Cash, 3 month  LIBOR(2.04%) + 9.50%; LIBOR Floor 1.00% , Due 6/21

 

10/7/2014

 

 

1,510,955

 

 

 

1,500,652

 

 

 

1,480,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Child Development Schools, Inc.

     Services: Consumer

(8)(14)

Senior Secured Loan — Term Loan

6.5% Cash, 1 month LIBOR(2.26%) + 4.25% , Due 5/23

 

6/6/2018

 

 

4,588,691

 

 

 

4,580,275

 

 

 

4,594,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Care Health Network, Inc. (aka Matrix Medical Network)

     Healthcare & Pharmaceuticals

(8)(14)

Senior Secured Loan — Closing Date Term Loan

6.8% Cash, 1 month LIBOR(2.04%) + 4.75%; LIBOR Floor 1.00% , Due 2/25

 

2/9/2018

 

 

1,975,000

 

 

 

1,971,196

 

 

 

1,848,108

 

 

9


 

Portfolio Company /

Principal Business

 

Investment

Interest Rate¹ / Maturity15

 

Initial

Acquisition

Date

 

Principal

 

 

Amortized

Cost

 

 

Fair Value2

 

Corsair Gaming, Inc.

     High Tech Industries

(8)

Junior Secured Loan — Term Loan (Second Lien)

10.6% Cash, 1 month LIBOR(2.10%) + 8.50%; LIBOR Floor 1.00% , Due 8/25

 

9/29/2017

 

 

3,000,000

 

 

 

2,966,199

 

 

 

2,947,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CSM Bakery Solutions Limited (fka CSM Bakery Supplies Limited)

     Beverage, Food and Tobacco

(8)

Junior Secured Loan — Term Loan (Second Lien)

10.0% Cash, 1 month LIBOR(2.29%) + 7.75%; LIBOR Floor 1.00% , Due 7/21

 

5/23/2013

 

 

3,000,000

 

 

 

3,004,425

 

 

 

2,790,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.)

     High Tech Industries

(8)(13)(14)

Senior Secured Loan — Term Loan

9.8% Cash, 3 month  LIBOR(2.33%) + 7.50%; LIBOR Floor 1.50% , Due 7/24

 

12/10/2018

 

 

4,962,406

 

 

 

4,919,934

 

 

 

3,706,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drilling Info Holdings, Inc.

     High Tech Industries

(8)(13)(14)

Senior Secured Loan — 2019 Delayed Draw Term Loan (First Lien)

6.0% Cash, 1 month  LIBOR(1.71%) + 4.25%; LIBOR Floor 1.00% , Due 7/25

 

6/27/2019

 

 

-

 

 

 

(4,018

)

 

 

(4,018

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dun & Bradstreet Corporation, The

     Services: Business

(8)(13)(14)

Senior Secured Loan — Initial Term Borrowing

7.1% Cash, 3 month  LIBOR(2.05%) + 5.00% , Due 2/26

 

4/24/2019

 

 

5,000,000

 

 

 

5,043,750

 

 

 

5,043,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Evergreen North America Acquisition, LLC (f/k/a Industrial Services Acquisition, LLC)

     Environmental Industries

(8)(13)(14)

Senior Secured Loan — Term Loan

7.1% Cash, 1 month LIBOR(2.13%) + 5.00%; LIBOR Floor 1.00% , Due 6/22

 

6/21/2016

 

 

1,055,593

 

 

 

1,058,611

 

 

 

1,055,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First American Payment Systems, L.P.

     Banking, Finance, Insurance & Real Estate

(8)(13)(14)

Junior Secured Loan — Tranche B Term Loan (Second Lien)

12.8% Cash, 1 month LIBOR(2.31%) + 10.50%; LIBOR Floor 1.00% , Due 7/24

 

1/4/2017

 

 

1,500,000

 

 

 

1,471,358