UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2019
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☐ |
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)
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Delaware |
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20-5951150 |
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(State or other jurisdiction of Incorporation or organization) |
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(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:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock, par value $0.01 per share |
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PTMN |
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The NASDAQ Global Select Market |
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6.125% Notes due 2022 |
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KCAPL |
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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.
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Large accelerated filer |
☐ |
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Accelerated filer |
☒ |
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Non-accelerated filer |
☐ |
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Smaller reporting company |
☐ |
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Emerging growth company |
☐ |
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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.
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Page |
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Part I. Financial Information |
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Item 1. |
Consolidated Financial Statements |
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Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018 |
5 |
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6 |
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7 |
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8 |
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Consolidated Schedules of Investments as of September 30, 2019 (unaudited) and December 31, 2018 |
9 |
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Consolidated Financial Highlights (unaudited) for the nine months ended September 30, 2019 and 2018 |
25 |
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26 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
69 |
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Item 3. |
97 |
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Item 4. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
99 |
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Item 5. |
99 |
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Item 1. |
100 |
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Item 1A. |
100 |
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Item 2. |
100 |
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Item 3. |
100 |
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Item 4. |
101 |
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Item 5. |
101 |
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Item 6. |
101 |
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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:
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our future operating results; |
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• |
our business prospects and the prospects of our existing and prospective portfolio companies; |
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• |
the return or impact of current and future investments; |
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• |
our contractual arrangements and other relationships with third parties; |
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• |
the dependence of our future success on the general economy and its impact on the industries in which we invest; |
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• |
the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives; |
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• |
our expected financings and investments; |
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• |
our regulatory structure and tax treatment; |
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• |
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
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• |
the timing of cash flows, if any, from the operations of our portfolio companies; |
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the ability of Sierra Crest Investment Management LLC (the “Adviser”) to locate suitable investments for us to monitor and administer our investments; |
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the ability of the Adviser to attract and retain highly talented professionals; |
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• |
actual and potential conflicts of interest with the Adviser and its affiliates; |
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• |
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; |
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• |
the effect of legal, tax, and regulatory changes; |
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• |
the impact of a protracted decline in the liquidity of credit markets on our business; |
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• |
the impact of fluctuations in interest rates on our business; |
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• |
the valuation of our investments in portfolio companies, particularly those having no liquid trading market; |
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• |
our ability to recover unrealized losses; |
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• |
market conditions and our ability to access additional capital; and |
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• |
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
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September 30, 2019 |
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December 31, 2018 |
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(unaudited) |
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ASSETS |
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Investments at fair value: |
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Short-term investments (cost: 2019 - $23,180,863; 2018 - $44,756,478) |
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$ |
23,180,863 |
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$ |
44,756,478 |
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Debt securities (amortized cost: 2019 - $186,442,505; 2018 - $162,264,482) |
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175,624,345 |
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147,861,744 |
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CLO Fund Securities managed by affiliates (amortized cost: 2019 - $46,022,111; 2018 - $4,407,106) |
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|
34,451,281 |
|
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4,473,840 |
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CLO Fund Securities managed by non-affiliates (amortized cost: 2019 - $2,803,872; 2018 - $51,073,520) |
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2,420,014 |
|
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39,851,160 |
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Equity securities (cost: 2019 - $19,528,755; 2018 - $9,477,763) |
|
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6,279,611 |
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|
2,038,020 |
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Asset Manager Affiliates (cost: 2019 - $17,791,230; 2018 - $17,791,230) |
|
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— |
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3,470,000 |
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Joint Ventures (cost: 2019 - $49,052,776; 2018 - $37,381,525) |
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45,426,006 |
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30,857,107 |
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Derivatives (cost: 2019 - $30,609; 2018 - $0) |
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9,650 |
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- |
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Total Investments at Fair Value (cost: 2019 - $344,852,721; 2018 - $327,152,104) |
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287,391,771 |
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273,308,349 |
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Cash |
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341,166 |
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5,417,125 |
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Restricted cash |
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1,010,578 |
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3,907,341 |
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Interest receivable |
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1,248,372 |
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1,342,970 |
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Due from affiliates |
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|
670,946 |
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1,007,631 |
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Operating lease right-of-use asset |
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1,602,077 |
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— |
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Other assets |
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900,830 |
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|
481,265 |
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Total Assets |
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$ |
293,165,740 |
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$ |
285,464,681 |
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LIABILITIES |
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6.125% Notes Due 2022 (net of offering costs of: 2019-$1,793,546; 2018 - $2,207,341) |
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$ |
75,613,654 |
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$ |
75,199,858 |
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Great Lakes KCAP Funding I, LLC Revolving Credit Facility (net of offering costs of: 2019-$1,154,688; 2018 - $1,155,754) |
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46,865,797 |
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25,200,331 |
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Operating lease liability |
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3,265,081 |
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— |
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Payable for open trades |
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31,489,007 |
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23,204,564 |
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Accounts payable and accrued expenses |
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1,439,062 |
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3,591,910 |
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Accrued interest payable |
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|
262,964 |
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|
131,182 |
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Due to affiliates |
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|
481,163 |
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|
|
115,825 |
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Management and incentive fees payable |
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|
1,026,000 |
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|
|
— |
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Total Liabilities |
|
|
160,442,728 |
|
|
|
127,443,670 |
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COMMITMENTS AND CONTINGENCIES (NOTE 8) |
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STOCKHOLDERS' EQUITY |
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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 |
|
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373,719 |
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373,268 |
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Capital in excess of par value |
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307,210,386 |
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306,784,387 |
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Total distributable (loss) earnings |
|
|
(174,861,093 |
) |
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(149,136,644 |
) |
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Total Stockholders' Equity |
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|
132,723,012 |
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|
|
158,021,011 |
|
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Total Liabilities and Stockholders' Equity |
|
$ |
293,165,740 |
|
|
$ |
285,464,681 |
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NET ASSET VALUE PER COMMON SHARE |
|
$ |
3.55 |
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$ |
4.23 |
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See accompanying notes to consolidated financial statements.
5
PORTMAN RIDGE FINANCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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Three Months Ended September 30, |
|
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Nine Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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||||
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Investment Income: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest from investments in debt securities |
|
$ |
3,882,096 |
|
|
$ |
4,487,575 |
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|
$ |
10,650,753 |
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|
$ |
11,796,245 |
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Payment-in-kind investment income |
|
|
311,936 |
|
|
|
329,365 |
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|
325,478 |
|
|
|
1,061,419 |
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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 |
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|
Total investment income |
|
|
7,076,196 |
|
|
|
7,158,750 |
|
|
|
19,789,775 |
|
|
|
20,833,670 |
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Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Management fees |
|
|
1,026,000 |
|
|
|
— |
|
|
|
2,052,100 |
|
|
|
— |
|
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Performance-based incentive fees |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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Interest and amortization of debt issuance costs |
|
|
2,280,627 |
|
|
|
1,871,187 |
|
|
|
6,063,984 |
|
|
|
5,582,467 |
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Compensation |
|
|
— |
|
|
|
1,004,323 |
|
|
|
3,688,578 |
|
|
|
3,216,710 |
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|
Professional fees |
|
|
644,485 |
|
|
|
867,724 |
|
|
|
2,827,131 |
|
|
|
2,489,098 |
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Insurance |
|
|
129,157 |
|
|
|
79,152 |
|
|
|
577,257 |
|
|
|
236,900 |
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Administrative services expense |
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|
438,502 |
|
|
|
— |
|
|
|
848,102 |
|
|
|
— |
|
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Other general and administrative expenses |
|
|
314,992 |
|
|
|
381,835 |
|
|
|
1,374,606 |
|
|
|
1,364,302 |
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|
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 |
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|
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 |
|
|
|
||