8-K/A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K/A

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 28, 2020

 

 

Portman Ridge Finance Corporation

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   814-00735   20-5951150

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

650 Madison Avenue, 23rd Floor

New York, New York

  10022
(Address of Principal Executive Offices)   (Zip Code)

(212) 891-2880

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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 13(a) of the Exchange Act.  ☐

 

 

 


Explanatory Note

This Amendment No. 1 (this “Amendment No. 1”) is being filed to amend the Current Report on Form 8-K filed by Portman Ridge Finance Corporation, a Delaware Corporation (the “Company”) with the Securities and Exchange Commission on October 28, 2020 (the “Initial Form 8-K”). As previously reported in the Initial Form 8-K, on October 28, 2020, the Company completed its acquisition of Garrison Capital Inc., a Delaware corporation. Pursuant to the instructions to Item 9.01 of Form 8-K, the Company hereby files this Amendment No. 1 to amend the Initial Form 8-K in order to include the required financial statements and pro forma financial information that were previously omitted.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The following financial statements are filed as Exhibit 99.1 to this report and incorporated in their entirety herein by reference:

Audited Consolidated Financial Statements of Garrison Capital Inc. as of and for the years ended December 31, 2019 and 2018.

Management’s Report on Internal Control over Financial Reporting

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Financial Condition as of December 31, 2019 and 2018

Consolidated Schedules of Investments as of December 31, 2019 and 2018

Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Changes in Net Assets for the Years Ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017

Notes to the Consolidated Financial Statements

Unaudited Consolidated Financial Statements of Garrison Capital Inc. as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019.

Consolidated Statements of Financial Condition as of June 30, 2020 (unaudited) and December 31, 2019

Consolidated Schedules of Investments as of June 30, 2020 (unaudited) and December 31, 2019

Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2020 and June 30, 2019

Consolidated Statements of Changes in Net Assets (unaudited) for the three and six months ended June 30, 2020 and June 30, 2019

Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2020 and June 30, 2019

Notes to Consolidated Financial Statements (unaudited)

(d) Exhibits

 

23.1    Consent of RSM US LLP
99.1    Audited Consolidated Financial Statements of Garrison Corporation as of and for the years ended December  31, 2019 and 2018 and Unaudited Consolidated Financial Statements of Garrison Corporation as of June 30, 2020 and for the three and six months ended June 30, 2020 and 2019.

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    PORTMAN RIDGE FINANCE CORPORATION
Date: January 11, 2021     By:  

/s/ Edward U. Gilpin

    Name:   Edward U. Gilpin
    Title:   Chief Financial Officer

 

3

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the use in this Form 8-K/A of Portman Ridge Finance Corporation of our reports dated March 16, 2020 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting of Garrison Capital Inc. and its Subsidiaries.

/s/ RSM US LLP                

New York, New York

January 11, 2021

EX-99.1

Exhibit 99.1

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Garrison Capital Inc. and Subsidiaries

Opinion on the Internal Control Over Financial Reporting

We have audited Garrison Capital Inc. and Subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial condition, including the consolidated schedules of investments, of the Company as of December 31, 2019 and 2018, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2019, and the Garrison Capital PL Holdings LLC schedule of investments as of December 31, 2018 included as Exhibit 99.1 (not filed herewith) (collectively, the financial statements) and our report dated March 16, 2020 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

New York, New York

March 16, 2020


Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Garrison Capital Inc. and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial condition, including the consolidated schedules of investments, of Garrison Capital Inc. and Subsidiaries (the Company) as of December 31, 2019 and 2018, and the related consolidated statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2019, the Garrison Capital PL Holdings LLC schedule of investments as of December 31, 2018, included as Exhibit 99.1 (not filed herewith), and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, and the Garrison Capital PL Holdings LLC schedule of investments as of December 31, 2018, included as Exhibit 99.1 (not filed herewith) in conformity with accounting principles generally accepted in the United States of America, and in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 16, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2019 and 2018, by correspondence with the custodians, loan agents or management of the underlying investments, as applicable, or by other appropriate auditing procedures where replies from these parties, as applicable, were not received. We believe that our audits provide a reasonable basis for our opinion.

/s/ RSM US LLP

We have served as the Company’s auditor since 2014.

New York, New York

March 16, 2020


Garrison Capital Inc. and Subsidiaries

Consolidated Statements of Financial Condition

($ in thousands, except share and per share amounts)

 

     December 31,
2019
    December 31,
2018
 

Assets

    

Cash

   $ 1,251     $ 6,191  

Restricted cash

     39,056       39,531  

Due from counterparties

     1,413       58  

Investments, at fair value

    

Non-control/non-affiliate investments (amortized cost of $433,940 and $466,500, respectively)

     417,401       452,347  

Non-control/affiliate investments (amortized cost of $3,663 and $3,715, respectively)

     1,472       1,630  

Accrued interest receivable

     2,887       2,585  

Other assets

     969       1,624  
  

 

 

   

 

 

 

Total assets

   $ 464,449     $ 503,966  
  

 

 

   

 

 

 

Liabilities

    

Due to counterparties

   $ 9,413     $ 23,390  

Debt (Note 4)

     313,750       307,492  

Management fee payable (Note 5)

     1,516       49  

Incentive fee payable (Note 5)

     —         271  

Accrued interest payable

     1,734       3,040  

Accrued expenses and other payables

     1,483       812  
  

 

 

   

 

 

 

Total liabilities

   $ 327,896     $ 335,054  
  

 

 

   

 

 

 

Commitments and contingencies (Note 10)

    

Net assets

    

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 16,758,779 shares issued and 16,049,352 shares outstanding as of both December 31, 2019 and December 31, 2018

   $ 17     $ 17  

Paid-in-capital in excess of par

     249,124       249,124  

Total distributable earnings/(loss)

     (112,588     (80,229
  

 

 

   

 

 

 

Total net assets

     136,553       168,912  
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 464,449     $ 503,966  
  

 

 

   

 

 

 

Shares of common stock outstanding

     16,049,352       16,049,352  

Net asset value per share

   $ 8.51     $ 10.52  
  

 

 

   

 

 

 

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Equity Investments

                    

Building Products

                    

Valterra Products Holdings, LLC, Class A LLC Units

     N/A       N/A       N/A       N/A        185,847      $ 186      $ 1,125        0.82

Valterra Products Holdings, LLC, Class B LLC Units

     N/A       N/A       N/A       N/A        20,650        21        125        0.09  
              

 

 

    

 

 

    

 

 

 
                 207        1,250        0.91  

Commercial Services and Supplies

                    

Faraday Holdings, LLC, LLC Units

     N/A       N/A       N/A       N/A        2,752        140        750        0.55  
              

 

 

    

 

 

    

 

 

 
                 140        750        0.55  

Diversified Financial Services

                    

Prosper Marketplace, Inc., Series B Preferred Stock(1)(2)

     N/A       N/A       N/A       N/A        912,865        551        640        0.47  
              

 

 

    

 

 

    

 

 

 
                 551        640        0.47  

Healthcare Equipment and Services

                    

Juniper TGX Investment Partners, LLC, LLC Units

     N/A       N/A       N/A       N/A        3,146        671        2,640        1.93  
              

 

 

    

 

 

    

 

 

 
                 671        2,640        1.93  

Household Products and Durables

                    

Oneida Group Inc., Common Stock

     N/A       N/A       N/A       N/A        1,085,565        4,160        1,591        1.17  
              

 

 

    

 

 

    

 

 

 
                 4,160        1,591        1.17  

Internet Software and Services

                    

Emtec Global Services Holdings, LLC, Preferred Stock**

     N/A       N/A       N/A       N/A        319,357        —          —          —    
              

 

 

    

 

 

    

 

 

 
                 —          —          —    

Total Equity Investments

               $ 5,729      $ 6,871        5.03
              

 

 

    

 

 

    

 

 

 

Debt Investments

                    

Aerospace and Defense

                    

Constellis Holdings, LLC, Term Loan*

     1.93     5.00     6.93     4/22/2024        3,338      $ 3,297      $ 1,836        1.34

McNally Industries, LLC, Delayed Draw Term Loan**

     1.70     5.75     7.45     8/9/2024        50        50        50        0.04  

McNally Industries, LLC, Revolver**

     1.70     5.75     7.45     8/9/2024        6        6        6        —    

McNally Industries, LLC, Term Loan**

     1.70     5.75     7.45     8/9/2024        6,874        6,779        6,778        4.96  

Novetta Solutions, Term Loan*

     1.80     5.00     6.80     10/17/2022        1,964        1,933        1,926        1.41  

Peraton Corp. (fka MHVC Acquisition Corp.), Initial Term Loan (First Lien)*

     1.80     5.25     7.05     4/29/2024        1,316        1,313        1,311        0.96  
              

 

 

    

 

 

    

 

 

 
                 13,378        11,907        8.71  

Air Freight and Logistics

                    

Gruden Acquisition, Inc., Term Loan (First Lien)*

     1.94     5.50     7.44     8/18/2022        2,440        2,424        2,437        1.78  

Kane is Able, Inc., Term Loan**

     1.89     7.00     8.89     3/13/2024        6,504        6,389        6,385        4.68  
              

 

 

    

 

 

    

 

 

 
                 8,813        8,822        6.46  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Auto Components

                    

Challenge Mfg. Company, LLC, Term Loan B*

     1.80     7.00     8.80     4/20/2022        7,461      $ 7,417      $ 7,461        5.46

GC EOS Buyer, Inc., Initial Term Loan (First Lien)*

     1.80     4.50     6.30     8/1/2025        3,456        3,449        3,358        2.46  

Holley Purchaser, Inc., Term Loan*

     1.93     5.00     6.93     10/24/2025        6,554        6,467        6,128        4.49  

Shipston Equity Holdings, LLC, Term Loan*(4)

     2.10     8.66     10.76     9/28/2023        5,847        5,803        5,801        4.25  

Winter Park Intermediate, Inc., Initial Term Loan (First Lien)*

     1.80     4.75     6.55     4/4/2025        2,625        2,601        2,581        1.89  
              

 

 

    

 

 

    

 

 

 
                 25,737        25,329        18.55  

Building Products

                    

CPG International LLC (fka CPG International Inc.), New Term Loan*

     2.18     3.75     5.93     5/5/2024        1,287        1,270        1,286        0.94  

Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Term Loan**

     1.70     8.25     9.95     2/15/2023        6,638        6,555        6,107        4.47  

Janus International Group, LLC, Tranche B-2 Term Loan*

     1.80     4.50     6.30     2/12/2025        2,216        2,187        2,202        1.61  
              

 

 

    

 

 

    

 

 

 
                 10,012        9,595        7.02  

Chemicals

                    

Ascensus Specialties LLC, Term Loan (First Lien)*

     1.69     4.75     6.44     9/24/2026        1,721        1,713        1,712        1.25  

PeroxyChem LLC, Initial Term Loan*

     2.06     5.00     7.06     10/1/2024        860        856        857        0.63  

Q Holding Company (fka Lexington Precision Corporation), Term B Loan (2019)*

     1.80     5.00     6.80     12/29/2023        2,403        2,392        2,367        1.73  
              

 

 

    

 

 

    

 

 

 
                 4,961        4,936        3.61  

Commercial Services and Supplies

                    

Allied Universal Holdco LLC (f/k/a USAGM Holdco, LLC), Delayed Draw Term Loan*

     1.80     4.25     6.05     7/10/2026        116        116        117        0.09  

Allied Universal Holdco LLC (f/k/a USAGM Holdco, LLC), Initial Term Loan*

     1.80     4.25     6.05     7/10/2026        1,174        1,169        1,180        0.86  

DMT Solutions Global Corporation, Initial Term Loan*

     2.04     7.00     9.04     7/2/2024        6,746        6,595        6,448        4.72  

Interior Logic Group, Initial Term Loan*

     1.80     4.00     5.80     5/30/2025        6,445        6,420        6,123        4.48  

Staples, Inc., 2019 Refinancing New Term B-1 Loan*

     1.69     5.00     6.69     4/16/2026        2,985        2,958        2,930        2.15  

USS Ultimate Holdings, Inc., Initial Term Loan (First Lien)*

     1.93     3.75     5.68     8/25/2024        1,287        1,275        1,290        0.94  

VIP Cinema Holdings, Inc., Initial Term Loan (First Lien)*

     1.91     8.00     9.91     3/1/2023        4,869        4,859        2,824        2.07  
              

 

 

    

 

 

    

 

 

 
                 23,392        20,912        15.31  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Construction and Engineering

                    

Brand Energy & Infrastructure Services, Inc., Term Loan*

     1.99     4.25     6.24     6/21/2024        1,978      $ 1,917      $ 1,971        1.44

GeoStabilization International, Term Loan*

     1.80     5.25     7.05     12/19/2025        3,323        3,295        3,307        2.42  

QualTek USA, LLC, Term Loan*

     1.93     6.25     8.18     7/18/2025        5,810        5,720        5,658        4.14  
              

 

 

    

 

 

    

 

 

 
                 10,932        10,936        8.00  

Containers and Packaging

                    

Ball Metalpack Finco LLC, Term Loan*

     1.91     4.50     6.41     7/31/2025        543        541        477        0.35  

Klockner Pentaplast of America, Inc., Term Loan*(1)

     1.93     4.25     6.18     6/30/2022        4,583        4,487        4,115        3.01  
              

 

 

    

 

 

    

 

 

 
                 5,028        4,592        3.36  

Diversified Financial Services

                    

Acrisure, LLC, Term Loan*

     1.94     4.25     6.19     11/22/2023        1,481        1,472        1,483        1.09  

AIS Holdco, LLC, Term Loan*

     1.93     5.00     6.93     8/15/2025        2,630        2,620        2,499        1.83  

AqGen Ascensus, Inc. (fka JCF Ascensus Holdings, Inc.), Replacement Term Loan (First Lien)*

     1.94     4.00     5.94     12/5/2022        429        427        429        0.31  

PlanMember Financial Corporation, Term
Loan*(1)

     3.00     5.00     8.00     6/21/2024        1,083        1,073        1,083        0.79  
              

 

 

    

 

 

    

 

 

 
                 5,592        5,494        4.02  

Diversified Telecommunication Services

                    

Fusion Connect, Inc., DIP Loan*(1)

     1.71     10.00     11.71     1/14/2020        679        691        679        0.50  

Fusion Connect, Inc., Tranche B Term Loan (First Lien)*(1)(3)(5)

     4.75     6.50    

11.25

PIK


 

    5/4/2023        8,091        7,410        5,414        3.96  

KORE Wireless Group Inc., Term B Loan*

     1.94     5.50     7.44     12/20/2024        8,177        8,110        8,096        5.93  

Onvoy, LLC, Term Loan*

     1.80     4.50     6.30     2/12/2024        2,954        2,947        2,644        1.94  

U.S. Telepacific Corp., Term Loan B*

     1.94     5.00     6.94     5/2/2023        7,190        7,152        6,859        5.02  
              

 

 

    

 

 

    

 

 

 
                 26,310        23,692        17.35  

Electrical Equipment

                    

Energy Acquisition LP, Initial Term Loan (First Lien)*

     1.94     4.25     6.19     6/26/2025        4,937        4,922        4,542        3.33  

Luminii LLC, Term Loan**

     2.10     6.25     8.35     4/11/2023        7,208        7,166        7,164        5.25  

Verifone Systems, Inc., Term Loan*

     1.90     4.00     5.90     8/20/2025        1,980        1,980        1,950        1.43  
              

 

 

    

 

 

    

 

 

 
                 14,068        13,656        10.01  

Energy Equipment and Services

                    

BJ Services, LLC, Term Loan*

     2.10     7.00     9.10     1/3/2023        6,530        6,480        6,478        4.74  

NGS US FinCo, LLC, Term Loan*

     1.80     4.25     6.05     10/1/2025        2,688        2,677        2,681        1.96  
              

 

 

    

 

 

    

 

 

 
                 9,157        9,159        6.70  

Food Products

                    

Mother’s Market & Kitchen, Inc, Term Loan**(4)

     1.80     5.50     7.30     7/26/2023        7,142        7,066        6,785        4.97  

Quirch Foods Holdings, LLC, Initial Term Loan*

     1.90     6.00     7.90     12/19/2025        4,533        4,493        4,510        3.30  

US Salt, LLC, Initial Term Loan*(1)

     1.80     4.75     6.55     1/16/2026        1,329        1,318        1,333        0.98  
              

 

 

    

 

 

    

 

 

 
                 12,877        12,628        9.25  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Healthcare Equipment and Services

                    

AC Merger Sub, Inc. (Analogic), Revolver*

     1.80     6.00     7.80     6/22/2023        32      $ 33      $ 31        0.02

AC Merger Sub, Inc. (Analogic), Term Loan*

     1.80     6.00     7.80     6/24/2024        8,366        8,304        8,300        6.08  

ActivStyle, Inc., Term Loan**

     2.13     7.50     9.63     7/9/2020        9,724        9,705        9,724        7.12  

AG Parent Holdings, LLC, Initial Term Loan (First Lien)*

     1.91     5.00     6.91     7/31/2026        1,343        1,330        1,329        0.97  

Azalea TopCo, Inc., Initial Term Loan (First Lien)*

     1.80     3.50     5.30     7/24/2026        1,288        1,267        1,294        0.95  

Community Care Health Network, LLC, Term Loan*

     1.80     4.75     6.55     2/18/2025        1,379        1,376        1,358        0.99  

LifeScan Global Corp., Term Loan*

     2.06     6.00     8.06     10/1/2024        3,497        3,397        3,320        2.43  

Maxor Acquisition, Inc., Term Loan*

     1.94     5.50     7.44     11/22/2023        8,854        8,797        8,792        6.44  

SSC (Lux) Limited Sarl (Surgical Specialties), Term Loan*(1)

     1.80     5.00     6.80     5/6/2025        4,386        4,346        4,331        3.17  

Theragenics Corporation, Term Loan**

     1.91     8.00     9.91     5/31/2024        8,663        8,624        8,663        6.34  
              

 

 

    

 

 

    

 

 

 
                 47,179        47,142        34.51  

Hotels, Restaurants and Leisure

                    

Bravo Brio Restaurant Group, Inc., Term
Loan*(4)

     1.80     6.67     8.47     5/24/2023        8,302        8,218        4,981        3.65  

CircusTrix Holdings, LLC, Term Loan B*

     1.80     5.50     7.30     12/16/2021        5,925        5,894        5,892        4.31  
              

 

 

    

 

 

    

 

 

 
                 14,112        10,873        7.96  

Household Products and Durables

                    

Brown Jordan International Inc., Term Loan*

     1.80     5.00     6.80     1/31/2023        5,698        5,675        5,442        3.99  

Comfort Holding, LLC (Innocor, Inc.), Term Loan*

     1.80     4.75     6.55     2/5/2024        2,954        2,874        2,934        2.15  

CR Brands, Inc., Term Loan(3)

     1.70     11.25    

12.95

PIK


 

    1/31/2020        6,796        6,796        5,777        4.23  

NBG Acquisition Inc., Term Loan*

     1.94     5.50     7.44     4/26/2024        5,639        5,588        4,276        3.13  
              

 

 

    

 

 

    

 

 

 
                 20,933        18,429        13.50  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Internet Software and Services

                    

Aptos, Inc., Initial Term Loan (First Lien)*

     2.20     5.50     7.70     7/23/2025        7,736      $ 7,675      $ 7,613        5.58

BMC Software Finance, Inc., Initial Term Loan*

     1.80     4.25     6.05     10/2/2025        2,970        2,949        2,933        2.15  

ConvergeOne Holdings, Inc., Initial Term Loan (First Lien)*

     1.80     5.00     6.80     1/4/2026        2,190        2,113        2,087        1.53  

Corel Corporation (Corel Inc.), Initial Term Loan (First Lien)*(1)

     1.91     5.00     6.91     7/2/2026        3,085        2,942        2,962        2.17  

DCert Buyer, Inc., Initial Term Loan (First
Lien)*

     1.80     4.00     5.80     10/16/2026        1,291        1,269        1,294        0.95  

ECi Macola/MAX Holding, LLC, Initial Term Loan*

     1.94     4.25     6.19     9/27/2024        1,844        1,836        1,841        1.35  

Emtec Global Services Holdings, LLC, Term Loan A**

     1.80     8.50     10.30     8/31/2021        2,395        2,395        2,395        1.75  

Emtec Global Services Holdings, LLC, Term Loan B**(3)(5)

     N/A       10.25    

10.25

PIK


 

    8/31/2021        1,577        1,476        1,476        1.08  

Exela Intermediate LLC, 2018 Term Loan (First Lien)*(1)

     1.88     6.50     8.38     7/12/2023        5,642        5,584        3,103        2.27  

HDC/HW Intermediate Holdings, LLC, Revolver*

     1.94     7.50     9.44     12/21/2023        670        659        656        0.48  

HDC/HW Intermediate Holdings, LLC, Term Loan*

     1.95     9.50     11.45     12/21/2023        6,630        6,525        6,498        4.76  

Hyland Software, Inc., 2018 Refinancing Term Loan (First Lien)*

     1.80     3.50     5.30     7/1/2024        1,247        1,243        1,252        0.92  

Intermedia Holdings, Inc., Term Loan*

     1.80     6.00     7.80     7/21/2025        2,723        2,705        2,722        1.99  

Ivanti Software, Inc. (fka LANDesk Group, Inc.), Term Loan (First Lien)*

     1.72     4.25     5.97     1/20/2024        3,662        3,645        3,657        2.68  

Newscycle Solutions, Inc., Delayed Draw Term Loan*

     1.69     7.00     8.69     12/29/2022        761        761        751        0.55  

Newscycle Solutions, Inc., Revolver*

     1.80     7.00     8.80     12/29/2022        603        603        595        0.44  

Newscycle Solutions, Inc., Term Loan*

     1.80     7.00     8.80     12/29/2022        8,206        8,108        8,099        5.93  

Orbit Purchaser LLC (Orion), Delayed Draw Term Loan*

     1.95     4.50     6.45     10/21/2024        753        747        747        0.55  

Orbit Purchaser LLC (Orion), Incremental Term Loan*

     1.95     4.50     6.45     10/21/2024        1,556        1,542        1,542        1.13  

Orbit Purchaser LLC (Orion), Term Loan*

     1.95     4.50     6.45     10/21/2024        2,574        2,554        2,554        1.87  

Perforce Software, Inc., Term Loan (First Lien)*

     1.80     4.50     6.30     7/1/2026        2,672        2,660        2,671        1.96  

Quest Software US Holdings Inc., Term Loan*

     1.93     4.25     6.18     5/16/2025        2,254        2,240        2,230        1.63  

RA Outdoors LLC (Active Network), Term Loan*

     1.80     4.75     6.55     9/11/2024        7,299        7,248        7,246        5.31  

Travelport Finance (Luxembourg) S.àr.l., Term Loan*(1)

     1.94     5.00     6.94     5/29/2026        2,641        2,594        2,462        1.80  

Vero Parent, Inc. (fka Syncsort Incorporated), Initial Term Loan (First Lien)*

     1.91     6.25     8.16     8/16/2024        4,829        4,777        4,708        3.45  
              

 

 

    

 

 

    

 

 

 
                 76,850        74,094        54.28  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Leisure Products

                    

Bass Pro Group, LLC, Initial Term Loan*

     1.80     5.00     6.80     9/25/2024        7,102      $ 7,070      $ 7,075        5.18

Playpower, Inc., Initial Term Loan*

     1.96     5.50     7.46     5/8/2026        5,263        5,215        5,197        3.81  
              

 

 

    

 

 

    

 

 

 
                 12,285        12,272        8.99  

Machinery

                    

Pueblo Mechanical and Controls, LLC, Term Loan**

     2.10     6.00     8.10     12/21/2022        4,975        4,929        4,929        3.61  
              

 

 

    

 

 

    

 

 

 
                 4,929        4,929        3.61  

Media

                    

Project Sunshine IV Pty Ltd, 2017 Incremental Term Loan*(1)

     1.80     7.00     8.80     8/22/2022        1,179        1,170        1,173        0.86  
              

 

 

    

 

 

    

 

 

 
                 1,170        1,173        0.86  

Metals and Mining

                    

Alchemy US Holdco 1, LLC (Kymera), Initial Term Loan*

     1.75     5.50     7.25     10/10/2025        2,150        2,123        2,108        1.54  
              

 

 

    

 

 

    

 

 

 
                 2,123        2,108        1.54  

Pharmaceuticals

                    

Akorn, Inc., Loan*(1)(3)

     1.81    

9.25

Cash +

0.75

PIK


 

 

   


11.06

Cash +
0.75

PIK


 

 

    4/16/2021        2,022        2,005        1,918        1.40  

RiteDose Holdings I, Inc., Term Loan*

     2.10     6.50     8.60     9/13/2023        7,896        7,823        7,846        5.75  
              

 

 

    

 

 

    

 

 

 
                 9,828        9,764        7.15  

Professional Services

                    

Guidehouse LLP, Initial Term Loan (First
Lien)*

     1.80     4.50     6.30     5/1/2025        1,287        1,275        1,275        0.93  

Institutional Shareholder Services Inc., Initial Term Loan (First Lien)*

     1.94     4.50     6.44     3/5/2026        4,818        4,776        4,722        3.46  

Signify Health, LLC (fka Chloe Ox Parent, LLC), Term Loan*

     1.94     4.50     6.44     12/23/2024        1,856        1,843        1,845        1.35  
              

 

 

    

 

 

    

 

 

 
                 7,894        7,842        5.74  

Retail

                    

Sundance Holdings Group, LLC, Term
Loan*(4)

     1.91     6.03     7.94     5/1/2024        6,717        6,664        6,661        4.88  
              

 

 

    

 

 

    

 

 

 
                 6,664        6,661        4.88  

Semiconductors and Semiconductor Equipment

                    

Ultra Clean Holdings, Inc., Term B Loan*(1)

     1.80     4.50     6.30     8/27/2025        2,327        2,299        2,321        1.70  
              

 

 

    

 

 

    

 

 

 
                 2,299        2,321        1.70  

Technology Hardware, Storage and Peripherals

                    

Electronics For Imaging, Inc., Initial Term Loan (First Lien)*

     1.94     5.00     6.94     7/23/2026        2,204        2,101        2,043        1.50  

Elo Touch Solutions, Inc., Term B Loan (First Lien)*

     1.74     6.50     8.24     12/15/2025        2,882        2,760        2,850        2.09  
              

 

 

    

 

 

    

 

 

 
                 4,861        4,893        3.59  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Textiles, Apparel and Luxury Goods

                    

Centric Brands Inc., Term Loan*(1)(4)

     1.93     6.00     7.93     10/30/2023        7,677      $ 7,587      $ 7,582        5.55

Champ Acquisition Corp., Initial Term Loan (First Lien)*(4)

     1.94     5.50     7.44     12/19/2025        3,071        2,992        3,060        2.24  

Keeco Holdings, LLC, Term Loan*

     1.80     7.75     9.55     3/15/2024        5,674        5,615        5,615        4.11  

Triangle Home Fashions, LLC, Term
Loan**(4)

     1.80     6.71     8.51     3/9/2023        10,500        10,383        10,500        7.69  
              

 

 

    

 

 

    

 

 

 
                 26,577        26,757        19.59  

Trading Companies and Distributors

                    

Cook & Boardman Group, LLC, The, Initial Term Loan*

     1.92     5.75     7.67     10/17/2025        3,668        3,637        3,484        2.55  

LJ Ruby Holdings, LLC, Initial Term Loan (First Lien)*(1)

     1.94     5.00     6.94     8/26/2026        3,070        3,012        2,978        2.18  
              

 

 

    

 

 

    

 

 

 
                 6,649        6,462        4.73  

Transportation Services

                    

Airxcel, Inc., Term Loan*

     1.80     4.50     6.30     4/28/2025        985        983        963        0.71  

PS Holdco, LLC, Term Loan*

     1.80     4.75     6.55     3/13/2025        7,408        7,383        6,982        5.11  

Sirva Worldwide, Term Loan*

     1.87     5.50     7.37     8/4/2025        5,304        5,251        5,224        3.83  
              

 

 

    

 

 

    

 

 

 
                 13,617        13,169        9.65  

Total Debt Investments

               $ 428,227      $ 410,547        300.63
              

 

 

    

 

 

    

 

 

 

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

Security Description

   Base Rate      Spread     All In Rate     Maturity      Par /
Shares
     Cost     Fair Value     % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                   

Unfunded Commitments

                   

Aerospace and Defense

                   

McNally Industries, LLC, Revolver**(6)

     N/A        0.50     0.50     8/9/2024        44      $ —       $ (1     —  
               

 

 

   

 

 

   

 

 

 
                  —         (1     —    

Building Products

                   

Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver

     N/A        0.75     0.75     2/15/2023        43        —         —         —    
               

 

 

   

 

 

   

 

 

 
                  —         —         —    

Electrical Equipment

                   

Luminii LLC, Revolver*(6)

     N/A        0.50     0.50     4/11/2023        515        1       (4     —    
               

 

 

   

 

 

   

 

 

 
                  1       (4     —    

Healthcare Equipment and Services

                   

AC Merger Sub, Inc. (Analogic), Revolver*(6)

     N/A        0.50     0.50     6/22/2023        286        —         (2     —    

Maxor Acquisition, Inc., Revolver*(6)

     N/A        0.50     0.50     11/22/2022        585        (4     (4     —    
               

 

 

   

 

 

   

 

 

 
                  (4     (6     —    

Internet Software and Services

                   

Newscycle Solutions, Inc., Revolver*(6)

     N/A        0.50     0.50     12/29/2022        82        (8     (1     —    
               

 

 

   

 

 

   

 

 

 
                  (8     (1     —    

Pharmaceuticals

                   

RiteDose Holdings I, Inc., Revolver*(6)

     N/A        0.50     0.50     9/13/2023        537        (5     (5     —    
               

 

 

   

 

 

   

 

 

 
                  (5     (5     —    

Total Unfunded Commitments

                $ (16   $ (17     (0 )% 
               

 

 

   

 

 

   

 

 

 

Total Non-Control/Non-Affiliate Investments

                $ 433,940     $ 417,401       305.66
               

 

 

   

 

 

   

 

 

 

Common Equity

                   

Oil, Gas and Consumable Fuels

                   

Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.), LLC Units

     N/A        N/A       N/A       N/A        99      $ 3,663     $ 1,472       1.08
               

 

 

   

 

 

   

 

 

 
                  3,663       1,472       1.08  

Total Common Equity

                $ 3,663     $ 1,472       1.08
               

 

 

   

 

 

   

 

 

 

Total Non-Control/Affiliate Investments

                $ 3,663     $ 1,472       1.08
               

 

 

   

 

 

   

 

 

 

Total Investments

                $ 437,603     $ 418,873       306.74
               

 

 

   

 

 

   

 

 

 

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2019

($ in thousands, except share amounts)

 

 

*

Denotes that all or a portion of the investment is held as collateral by Garrison Funding 2018-2 Ltd.

**

Denotes that all or a portion of the investment is held by Garrison Capital SBIC LP.

Base Rate = Our floating rate investments bear interest at a base rate plus a spread. Generally, the borrower has an option to choose whether the base rate is referenced to the London Interbank Offered Rate (“LIBOR”) or the prime rate. The spread may change as a result of the borrower’s choice of base rate. In addition, the floating rate investments that are referenced to LIBOR are generally indexed to 30-day or 90-day U.S. Dollar LIBOR and subject to a minimum LIBOR Floor. The terms disclosed in the consolidated schedule of investments represent the actual base rate and spread in effect as of the reporting date.

All securities above were valued with significant unobservable inputs. Refer to Note 3 of our consolidated financial statements for additional disclosures regarding the unobservable inputs used in fair value measurement.

 

(1)

Not a qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). Under the 1940 Act, Garrison Capital Inc. (the “Company”) may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2019, 90.9% of the Company’s assets were qualifying assets.

(2)

Held through Garrison Capital Equity Holdings II LLC and net of non-controlling member’s interest of 17.5% pursuant to the Amended and Restated Limited Liability Company Agreement of Garrison Capital Equity Holdings II LLC.

(3)

Interest is payable in cash, and/or payment-in-kind (“PIK”), or a combination thereof.

(4)

Investment is structured as a unitranche loan in which the Company holds the last out component. As a result, in addition to the interest earned on the stated base rate and spread of this investment, the Company received additional interest during the year ended December 31, 2019 due to an arrangement between the Company and certain other lenders to the portfolio company. The additional interest received during the quarter has been annualized and included in the spread disclosed for this investment.

(5)

Investment is currently not income producing and placed on non-accrual status.

(6)

The negative fair value is the result of the unfunded commitments being valued below par. These amounts may or may not be funded to the borrowing party currently or in the future.

As required by the 1940 Act, investments are classified by level of control. “Control Investments” are investments in those companies that the Company is deemed to control as defined in the 1940 Act. “Affiliate Investments” are investments in those companies that are affiliated companies, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.

Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if it owns more than 25% of the voting securities of such company. The Company is deemed to be an affiliate of a company in which it has invested if it owns 5% or more of the voting securities of such company.

All debt investments were income producing as of December 31, 2019 unless otherwise noted. Common and preferred equity investments are non income-producing unless otherwise noted.

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Equity Investments

                    

Building Products

                    

Valterra Products Holdings, LLC, Class A LLC Units

     N/A       N/A       N/A       N/A        185,847      $ 186      $ 784        0.46

Valterra Products Holdings, LLC, Class B LLC Units

     N/A       N/A       N/A       N/A        20,650        21        87        0.05  
              

 

 

    

 

 

    

 

 

 
                 207        871        0.51  

Commercial Services and Supplies

                    

Faraday Holdings, LLC, LLC Units

     N/A       N/A       N/A       N/A        2,752        140        742        0.44  
              

 

 

    

 

 

    

 

 

 
                 140        742        0.44  

Healthcare Equipment and Services

                    

Juniper TGX Investment Partners, LLC, LLC Units

     N/A       N/A       N/A       N/A        3,146        671        3,119        1.85  
              

 

 

    

 

 

    

 

 

 
                 671        3,119        1.85  

Household Products and Durables

                    

Oneida Group Inc., Common Stock

     N/A       N/A       N/A       N/A        844,557        3,919        1,350        0.80  
              

 

 

    

 

 

    

 

 

 
                 3,919        1,350        0.80  

Diversified Financial Services

                    

Prosper Marketplace Series B Preferred
Stock(1)(2)

     N/A       N/A       N/A       N/A        912,865        551        640        0.38  
              

 

 

    

 

 

    

 

 

 
                 551        640        0.38  

Total Equity Investments

               $ 5,488      $ 6,722        3.98
              

 

 

    

 

 

    

 

 

 

Debt Investments

                    

Aerospace and Defense

                    

Constellis Holdings, LLC, Term Loan*

     2.52     5.00     7.52     4/22/2024        3,364      $ 3,312      $ 3,196        1.89

Novetta Solutions, Term Loan*

     2.53     5.00     7.53     10/17/2022        1,985        1,942        1,920        1.14  

Vertex Aerospace Services Corp., Initial Term Loan*

     2.52     4.75     7.27     6/30/2025        1,820        1,812        1,798        1.06  
              

 

 

    

 

 

    

 

 

 
                 7,066        6,914        4.09  

Air Freight and Logistics

                    

Gruden Acquisition, Inc., Term Loan (First Lien)*

     2.80     5.50     8.30     8/18/2022        2,465        2,443        2,404        1.42  
              

 

 

    

 

 

    

 

 

 
                 2,443        2,404        1.42  

Auto Components

                    

BBB Industries LLC (GC EOS Buyer), Term Loan*

     2.38     4.50     6.88     8/1/2025        3,491        3,483        3,413        2.02  

Challenge Mfg. Company, LLC, Term
Loan B*

     2.53     6.50     9.03     4/20/2022        7,893        7,826        7,892        4.67  

FRAM Group Holdings Inc. (Autoparts Holdings), Term Loan*

     2.52     6.75     9.27     12/23/2021        6,844        6,763        6,844        4.05  

Shipston Equity Holdings, LLC, Term Loan*(4)

     2.39     6.94     9.33     9/28/2023        5,847        5,791        5,791        3.43  
              

 

 

    

 

 

    

 

 

 
                 23,863        23,940        14.17  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Building Products

                    

Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver

     2.35     8.25     10.60     2/15/2023        36      $ 36      $ 36        0.02

Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Term Loan**

     2.35     8.25     10.60     2/15/2023        7,216        7,097        6,927        4.10  
              

 

 

    

 

 

    

 

 

 
                 7,133        6,963        4.12  

Chemicals

                    

AOC / Aliancys, Term Loan*(1)

     2.58     4.25     6.83     8/1/2025        1,490        1,490        1,449        0.86  

Aristech Surfaces LLC, Term Loan B*

     2.38     7.00     9.38     10/17/2019        8,979        8,954        8,790        5.20  

Profusion Industries, LLC, Term Loan(5)

     2.38     12.25     14.63     6/19/2020        9,270        9,188        2,330        1.38  
              

 

 

    

 

 

    

 

 

 
                 19,632        12,569        7.44  

Commercial Services and Supplies

                    

Del Mar Recovery Solutions, Inc., Term Loan**

     2.50     8.50     11.00     6/28/2021        7,726        7,659        7,649        4.53  

DMT Solutions Global Corporation (Pitney Bowes), Term Loan*

     2.55     7.00     9.55     7/2/2024        7,111        6,916        6,791        4.02  

Interior Logic Group, Term Loan*

     2.80     4.00     6.80     5/30/2025        6,510        6,481        6,348        3.76  

Staples, Inc., Term Loan*

     2.54     4.00     6.54     9/12/2024        5,541        5,487        5,301        3.14  

USAGM Holdco, LLC, Incremental Term Loan*

     2.52     4.25     6.77     7/28/2022        2,903        2,886        2,765        1.64  

USAGM Holdco, LLC, Initial Term Loan (First Lien)*

     2.52     3.75     6.27     7/28/2022        992        984        939        0.56  

VIP Cinema Holdings, Inc., Term Loan*

     2.53     6.00     8.53     3/1/2023        5,077        5,063        4,963        2.94  
              

 

 

    

 

 

    

 

 

 
                 35,476        34,756        20.59  

Construction and Engineering

                    

Brand Energy & Infrastructure Services, Inc., Term Loan*

     2.48     4.25     6.73     6/21/2024        665        642        630        0.37  

GeoStabilization International, Term Loan*

     2.59     5.50     8.09     12/19/2025        3,349        3,315        3,315        1.96  

QualTek USA, LLC, Term Loan*

     2.53     5.75     8.28     7/18/2025        5,841        5,735        5,666        3.35  
              

 

 

    

 

 

    

 

 

 
                 9,692        9,611        5.68  

Containers and Packaging

                    

Ball Metalpack Finco LLC, Term Loan*

     2.52     4.50     7.02     7/31/2025        549        546        531        0.31  

Klockner Pentaplast of America, Inc., Term Loan*(1)

     2.52     4.25     6.77     6/30/2022        4,630        4,495        3,981        2.36  
              

 

 

    

 

 

    

 

 

 
                 5,041        4,512        2.67  

Diversified Financial Services

                    

Acrisure, LLC, Term Loan*

     2.52     4.25     6.77     11/22/2023        1,496        1,485        1,447        0.86  

AIS Holdco, LLC, Term Loan*

     2.80     5.00     7.80     8/15/2025        2,698        2,685        2,631        1.56  

Financial & Risk US Holdings, Inc. (Refinitiv), Term Loan*

     2.52     3.75     6.27     10/1/2025        2,205        2,200        2,062        1.22  

Integrity Marketing Acquisition, LLC, Term Loan*

     2.71     4.25     6.96     11/28/2025        5,266        5,240        5,240        3.10  

PlanMember Financial Corporation, Term Loan*(1)

     3.00     5.00     8.00     12/31/2020        1,586        1,572        1,577        0.93  
              

 

 

    

 

 

    

 

 

 
                 13,182        12,957        7.67  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Diversified Telecommunication Services

                    

Fusion Connect, Inc., Tranche B Term Loan (First Lien)*(1)

     2.59     7.50     10.09     5/4/2023        7,145      $ 6,897      $ 6,788        4.02

KORE Wireless Group Inc., Term Loan*

     2.79     5.50     8.29     12/20/2024        8,260        8,178        8,177        4.84  

Onvoy, LLC, Term Loan*

     2.80     4.50     7.30     2/12/2024        2,984        2,976        2,646        1.57  

U.S. Telepacific Corp., Term Loan B*

     2.80     5.00     7.80     5/2/2023        7,190        7,141        6,794        4.02  
              

 

 

    

 

 

    

 

 

 
                 25,192        24,405        14.45  

Electrical Equipment

                    

Electrical Components International, Inc., Term Loan*

     2.80     4.25     7.05     6/26/2025        4,987        4,969        4,813        2.85  

Luminii LLC, Term Loan*

     2.40     5.75     8.15     4/11/2023        7,281        7,217        7,215        4.27  

Verifone Systems, Inc., Term Loan*

     2.64     4.00     6.64     8/20/2025        2,000        2,000        1,928        1.14  
              

 

 

    

 

 

    

 

 

 
                 14,186        13,956        8.26  

Energy Equipment and Services

                    

NGS US FinCo, LLC, Term Loan*

     2.51     4.25     6.76     10/1/2025        2,715        2,702        2,695        1.60  
              

 

 

    

 

 

    

 

 

 
                 2,702        2,695        1.60  

Food Products

                    

Gold Coast Bakeries, LLC, Revolver*

     2.52     5.75     8.27     9/27/2022        1,583        1,583        1,583        0.94  

Gold Coast Bakeries, LLC, Term Loan**

     2.52     5.75     8.27     9/27/2022        9,379        9,292        8,441        5.00  

Mother’s Market & Kitchen, Inc, Term
Loan**(4)

     2.53     5.71     8.24     7/26/2023        7,814        7,707        7,705        4.56  
              

 

 

    

 

 

    

 

 

 
                 18,582        17,729        10.50  

Healthcare Equipment and Services

                    

AC Merger Sub, Inc. (Analogic), Term Loan*

     2.52     6.00     8.52     6/24/2024        8,561        8,483        8,481        5.02  

ActivStyle, Inc., Term Loan***

     2.44     7.50     9.94     7/9/2020        10,421        10,364        10,421        6.17  

Aurora Diagnostics, LLC, Delayed Draw Term Loan*

     2.53     7.13     9.66     7/31/2019        850        849        850        0.50  

Aurora Diagnostics, LLC, Delayed Draw Term Loan B*

     2.53     7.13     9.66     7/31/2019        598        597        598        0.35  

Aurora Diagnostics, LLC, Delayed Draw Term Loan C*

     2.46     7.13     9.59     7/31/2019        1,056        1,050        1,056        0.63  

Aurora Diagnostics, LLC, Delayed Draw Term Loan D

     2.46     7.13     9.59     7/31/2019        173        171        173        0.10  

Aurora Diagnostics, LLC, Revolver*

     2.48     7.13     9.61     7/31/2019        1,020        1,020        1,020        0.60  

Aurora Diagnostics, LLC, Term Loan*

     2.53     7.13     9.66     7/31/2019        5,243        5,237        5,243        3.10  

Community Care Health Network, LLC, Term Loan*

     2.52     4.75     7.27     2/18/2025        1,393        1,390        1,351        0.80  

LifeScan Global Corp., Term Loan*

     2.40     6.00     8.40     10/1/2024        2,846        2,762        2,683        1.59  

Maxor Acquisition, Inc., Term Loan*

     2.82     6.00     8.82     11/22/2023        8,945        8,872        8,869        5.25  

Theragenics Corporation, Term Loan**

     2.53     12.00     14.53     12/23/2020        8,865        8,783        8,865        5.25  
              

 

 

    

 

 

    

 

 

 
                 49,578        49,610        29.36  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Hotels, Restaurants and Leisure

                    

AP Gaming I, LLC, Term Loan B*

     2.52     3.50     6.02     2/15/2024        6,637      $ 6,639      $ 6,488        3.84

Bravo Brio Restaurant Group, Inc., Term Loan*(4)

     2.53     6.65     9.18     5/24/2023        8,302        8,193        8,190        4.85  

CircusTrix Holdings, LLC, Term Loan B*

     2.52     5.50     8.02     12/16/2021        5,985        5,939        5,938        3.52  

HRI Holding Corp. (Houlihans Restaurants), Term Loan*

     2.81     6.25     9.06     12/17/2020        6,247        6,196        5,934        3.51  
              

 

 

    

 

 

    

 

 

 
                 26,967        26,550        15.72  

Household Products and Durables

                    

Brown Jordan International Inc., Term Loan*

     2.52     5.00     7.52     1/31/2023        5,757        5,726        5,556        3.29  

CR Brands, Inc., Term Loan*(3)

     2.35     11.25    

13.60

PIK


 

    3/29/2019        6,547        6,547        6,547        3.88  

Innocor, Inc. (Comfort Holding, LLC), Term Loan*

     2.52     4.75     7.27     2/5/2024        2,985        2,884        2,795        1.65  

NBG Acquisition Inc., Term Loan*

     2.59     5.50     8.09     4/26/2024        5,788        5,724        5,586        3.31  

University Furnishings, L.P., Term Loan***(4)

     2.44     7.26     9.70     10/13/2022        10,830        10,713        10,830        6.41  
              

 

 

    

 

 

    

 

 

 
                 31,594        31,314        18.54  

Internet Software and Services

                    

Aptos, Inc., Term Loan*

     2.52     5.50     8.02     7/23/2025        7,814        7,741        7,726        4.57  

BMC Software Finance, Inc., Term Loan*

     2.80     4.25     7.05     10/2/2025        3,000        2,975        2,887        1.71  

Corel Corporation, Term Loan*(1)(4)

     2.71     5.00     7.71     6/4/2024        8,652        8,587        8,544        5.06  

Emtec Global Services Holdings, LLC, Revolver(3)

     2.34     16.25    

18.59

PIK


 

    11/30/2020        450        450        450        0.27  

Emtec Global Services Holdings, LLC, Term Loan**(3)

     2.34     16.25    

18.59

PIK


 

    11/30/2020        3,769        3,754        3,769        2.23  

Exela Intermediate LLC, Term Loan*(1)

     2.88     6.50     9.38     7/12/2023        5,389        5,314        5,308        3.14  

HDC/HW Intermediate Holdings, LLC, Term Loan*

     2.81     7.50     10.31     12/21/2023        6,697        6,564        6,563        3.89  

Intermedia Holdings, Inc., Term Loan*

     2.52     6.00     8.52     7/21/2025        2,750        2,729        2,740        1.62  

LANDesk Group, Inc., Term Loan*

     2.35     4.25     6.60     1/22/2024        3,698        3,676        3,522        2.09  

Lionbridge Technologies, Inc., Term Loan*

     2.52     5.50     8.02     2/28/2024        3,220        3,219        3,192        1.89  

Newscycle Solutions, Inc., Delayed Draw Term Loan

     2.35     7.00     9.35     12/29/2022        792        792        778        0.46  

Newscycle Solutions, Inc., Term Loan*

     2.52     7.00     9.52     12/29/2022        8,655        8,517        8,511        5.04  

Orbit Purchaser LLC (Orion), Term Loan*

     2.67     4.50     7.17     10/21/2024        2,594        2,569        2,568        1.52  

Quest Software US Holdings Inc., Term Loan*

     2.53     4.25     6.78     5/16/2025        1,203        1,197        1,160        0.69  

RA Outdoors LLC (Active Network), Term Loan*

     2.52     4.75     7.27     9/11/2024        7,883        7,816        7,815        4.63  

Vero Parent, Inc. (fka Syncsort Incorporated), Initial Term Loan (First Lien)*

     2.52     4.50     7.02     8/16/2024        8,888        8,792        8,799        5.21  
              

 

 

    

 

 

    

 

 

 
                 74,692        74,332        44.02  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost      Fair Value      % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                    

Debt Investments (continued)

                    

Leisure Products

                    

Bass Pro Group, LLC, Initial Term Loan*

     2.52     5.00     7.52     9/25/2024        7,174      $ 7,135      $ 6,848        4.05

Confluence Outdoor, LLC, Delayed Draw Term Loan(3)

     2.35     10.75    

13.10

PIK


 

    4/18/2019        1,000        996        800        0.47  

Confluence Outdoor, LLC, Supplemental Loan(3)

     2.35     10.75    

13.10

PIK


 

    4/18/2019        2,990        3,050        2,256        1.34  

Confluence Outdoor, LLC, Term Loan(3)

     2.35     10.75    

13.10

PIK


 

    4/18/2019        6,668        6,641        5,334        3.16  

Playpower, Inc., Initial Term Loan (First Lien)*

     2.80     4.75     7.55     6/23/2021        1,389        1,386        1,389        0.82  
              

 

 

    

 

 

    

 

 

 
                 19,208        16,627        9.84  

Media

                    

Project Sunshine IV Pty Ltd, 2017 Incremental Term Loan*(1)

     2.52     7.00     9.52     8/22/2022        4,212        4,167        4,159        2.46  
              

 

 

    

 

 

    

 

 

 
                 4,167        4,159        2.46  

Metals and Mining

                    

Alchemy US Holdco 1, LLC (Kymera), Term Loan*

     2.49     5.50     7.99     10/10/2025        2,205        2,173        2,189        1.30  
              

 

 

    

 

 

    

 

 

 
                 2,173        2,189        1.30  

Pharmaceuticals

                    

Akorn, Inc., Loan*(1)

     2.56     5.50     8.06     4/16/2021        2,000        1,968        1,613        0.95  

RiteDose Holdings I, Inc., Term Loan*

     2.40     7.25     9.65     9/13/2023        7,977        7,883        7,879        4.66  
              

 

 

    

 

 

    

 

 

 
                 9,851        9,492        5.61  

Professional Services

                    

Signify Health, LLC (fka Chloe Ox Parent, LLC), Term Loan*

     2.80     4.50     7.30     12/23/2024        1,875        1,859        1,847        1.09  
              

 

 

    

 

 

    

 

 

 
                 1,859        1,847        1.09  

Retail

                    

Sundance Holdings Group, LLC, Term
Loan*(4)

     2.74     6.11     8.85     5/1/2024        6,717        6,652        6,651        3.94  
              

 

 

    

 

 

    

 

 

 
                 6,652        6,651        3.94  

Semiconductors and Semiconductor Equipment

                    

Ultra Clean Holdings, Inc., Term Loan*(1)

     5.50     3.50     9.00     8/27/2025        2,698        2,659        2,550        1.51  
              

 

 

    

 

 

    

 

 

 
                 2,659        2,550        1.51  

Technology Hardware, Storage and Peripherals

                    

Elo Touch Solutions, Inc., Term B Loan (First Lien)*

     2.78     6.50     9.28     12/15/2025        3,125        2,971        2,996        1.77  

Table Top Media, LLC, Lease**

     N/A       10.00     10.00     10/15/2019        1,155        1,152        1,154        0.68  
              

 

 

    

 

 

    

 

 

 
                 4,123        4,150        2.45  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate     Spread     All In Rate     Maturity      Par /
Shares
     Cost     Fair Value     % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                  

Debt Investments (continued)

                  

Textiles, Apparel and Luxury Goods

                  

Centric Brands Inc., Term Loan*(1)(4)

     2.51     6.00     8.51     10/27/2023        7,813      $ 7,698     $ 7,697       4.56

Champ Acquisition Corp., Initial Term Loan (First Lien)*(4)

     2.48     5.50     7.98     12/19/2025        3,125        3,032       3,036       1.80  

Keeco Holdings, LLC, Term Loan*

     2.47     7.00     9.47     9/19/2023        4,358        4,317       4,316       2.56  

Triangle Home Fashions, LLC, Term Loan**(4)

     2.53     6.61     9.14     3/9/2023        10,500        10,346       10,341       6.12  
              

 

 

   

 

 

   

 

 

 
                 25,393       25,390       15.04  

Trading Companies and Distributors

                  

Cook & Boardman Group LLC, The, Term Loan*

     2.80     5.75     8.55     10/17/2025        3,119        3,088       3,072       1.82  

Sprint Industrial Holdings, LLC, Term Loan (First Lien)*

     2.80     5.75     8.55     5/14/2019        4,675        4,673       4,488       2.66  
              

 

 

   

 

 

   

 

 

 
                 7,761       7,560       4.48  

Transportation Services

                  

Airxcel, Inc., Term Loan*

     2.52     4.50     7.02     4/28/2025        995        993       935       0.55  

PS Holdco, LLC, Term Loan*

     2.53     4.75     7.28     3/13/2025        6,416        6,391       6,224       3.68  

Sirva Worldwide, Term Loan*

     2.56     5.50     8.06     8/4/2025        2,654        2,635       2,594       1.54  
              

 

 

   

 

 

   

 

 

 
                 10,019       9,753       5.77  

Total Debt Investments

               $ 460,886     $ 445,585       263.79
              

 

 

   

 

 

   

 

 

 

Financial Assets

                  

Diversified Financial Services

                  

Consumer Loan Pool(1)(6)

     N/A       N/A       N/A       N/A        244      $ 244     $ 232       0.14
              

 

 

   

 

 

   

 

 

 
                 244       232       0.14  

Total Financial Assets

               $ 244     $ 232       0.14
              

 

 

   

 

 

   

 

 

 

Unfunded Commitments

                  

Building Products

                  

Global Integrated Flooring Systems Inc. (Camino Systems, Inc.), Revolver

     N/A       0.75     0.75     2/15/2023        14      $ —       $ —         —  
              

 

 

   

 

 

   

 

 

 
                 —         —         —    

Commercial Services and Supplies

                  

Del Mar Recovery Solutions, Inc., Revolver

     N/A       0.75     0.75     6/28/2021        990        (8     —         —    
              

 

 

   

 

 

   

 

 

 
                 (8     —         —    

Diversified Financial Services

                  

Integrity Marketing Acquisition, LLC, Delayed Draw Term Loan*(7)

     N/A       1.00     1.00     11/28/2025        984        (5     (5     —    
              

 

 

   

 

 

   

 

 

 
                 (5     (5     —    

Electrical Equipment

                  

Luminii LLC, Revolver*(7)

     N/A       0.50     0.50     4/11/2023        515        —         (5     —    
              

 

 

   

 

 

   

 

 

 
                 —         (5     —    

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

Security Description

   Base Rate      Spread     All In Rate     Maturity      Par /
Shares
     Cost     Fair Value     % of Net
Assets
 

Non-Control/Non-Affiliate Investments

                   

Unfunded Commitments (continued)

                   

Healthcare Equipment and Services

                   

AC Merger Sub, Inc. (Analogic), Revolver*(7)

     N/A        0.50     0.50     6/22/2023        318      $ —       $ (3     0.00

Maxor Acquisition, Inc., Revolver*(7)

     N/A        0.50     0.50     11/22/2022        585        (5     (5     —    
               

 

 

   

 

 

   

 

 

 
                  (5     (8     —    

Internet Software and Services

                   

Emtec Global Services Holdings, LLC, Revolver

     N/A        0.00     0.00     11/30/2020        159        (2     —         —    

HDC/HW Intermediate Holdings, LLC, Revolver*(7)

     N/A        1.00     1.00     12/21/2023        670        (13     (13     (0.01

Newscycle Solutions, Inc., Revolver(7)

     N/A        0.50     0.50     12/29/2022        685        (11     (11     (0.01

Orbit Purchaser LLC (Orion), Delayed Draw Term Loan*(7)

     N/A        0.00     0.00     10/21/2024        758        (7     (7     —    
               

 

 

   

 

 

   

 

 

 
                  (33     (31     (0.02

Leisure Products

                   

Confluence Outdoor, LLC, Supplemental
Loan(7)

     N/A        0.00     0.00     4/18/2019        1,359        (61     (136     (0.08
               

 

 

   

 

 

   

 

 

 
                  (61     (136     (0.08

Pharmaceuticals

                   

RiteDose Holdings I, Inc., Revolver*(7)

     N/A        0.50     0.50     9/13/2023        537        (6     (7     —    
               

 

 

   

 

 

   

 

 

 
                  (6     (7     —    

Total Unfunded Commitments

                $ (118   $ (192     (0.10 %) 
               

 

 

   

 

 

   

 

 

 

Total Non-Control/Non-Affiliate Investments

                $ 466,500     $ 452,347       267.81
               

 

 

   

 

 

   

 

 

 

Non-Control/Affiliate Investments

                   

Common Equity

                   

Oil, Gas and Consumable Fuels

                   

Cochon – MWS Holdings LLC (fka Rooster Energy Ltd.), Common

     N/A        N/A       N/A       N/A        99      $ 3,715     $ 1,630       0.97
               

 

 

   

 

 

   

 

 

 
                  3,715       1,630       0.97  

Total Common Equity

                $ 3,715     $ 1,630       0.97
               

 

 

   

 

 

   

 

 

 

Total Non-Control/Affiliate Investments

                $ 3,715     $ 1,630       0.97
               

 

 

   

 

 

   

 

 

 

Total Investments - United States

                $ 470,215     $ 453,977       268.78
               

 

 

   

 

 

   

 

 

 

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments – (continued)

December 31, 2018

($ in thousands, except share amounts)

 

 

*

Denotes that all or a portion of the investment is held as collateral by Garrison Funding 2016-2 Ltd.

**

Denotes that all or a portion of the investment is held by Garrison Capital SBIC LP.

**

Denotes that all or a portion of the investment is held as collateral by both Garrison Funding 2016-2 Ltd. and Garrison Capital SBIC LP.

Base Rate = Our floating rate investments bear interest at a base rate plus a spread. Generally, the borrower has an option to choose whether the base rate is referenced to LIBOR or the prime rate. The spread may change as a result of the borrower’s choice of base rate. In addition, the floating rate investments that are referenced to LIBOR are generally indexed to 30-day or 90-day U.S. Dollar LIBOR and subject to a minimum LIBOR Floor. The terms disclosed in the consolidated schedule of investments represent the actual base rate and spread in effect as of the reporting period date.

All securities above were valued with significant unobservable inputs. Refer to Note 3 of our consolidated financial statements for additional disclosures regarding the unobservable inputs used in fair value measurement.

 

(1)

Not a qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2018, 91.2% of the Company’s assets were qualifying assets.

(2)

Held through Garrison Capital Equity Holdings II LLC and net of non-controlling member’s interest of 17.5% pursuant to the Amended and Restated Limited Liability Company Agreement of Garrison Capital Equity Holdings II LLC.

(3)

Interest is payable in cash, and/or PIK, or a combination thereof.

(4)

Investment is structured as a unitranche loan where the Company holds the last out component. As a result, in addition to the interest earned on the stated base rate and spread of this investment, the Company may have received additional interest for the year ended December 31, 2018 due to an arrangement between the Company and certain other lenders to the portfolio company. The additional interest received during the quarter has been annualized and included in the spread disclosed for this investment.

(5)

Investment is currently not income producing and placed on non-accrual status.

(6)

Consumer Loan Pool includes 186 small balance consumer loans, held within Garrison Capital PL Holdings LLC, with an average par of $1,313, a weighted average rate of 15.82% and a weighted average maturity of April 11, 2019. See Note 3 for additional information. See Exhibit 99.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for detail on underlying loans.

(7)

The negative fair value is the result of the unfunded commitments being valued below par. These amounts may or may not be funded to the borrowing party currently or in the future.

As required by the 1940 Act, investments are classified by level of control. “Control Investments” are investments in those companies that the Company is deemed to control as defined in the 1940 Act. “Affiliate Investments” are investments in those companies that are affiliated companies, as defined in the 1940 Act, other than Control Investments. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.

Generally, under the 1940 Act, the Company is deemed to control a company in which it has invested if it owns more than 25% of the voting securities of such company. The Company is deemed to be an affiliate of a company in which it has invested if it owns 5% or more of the voting securities of such company.

All debt investments were income producing as of December 31, 2018, unless otherwise noted. Common and preferred equity investments are non income-producing unless otherwise noted.

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Statements of Operations

($ in thousands, except share and per share amounts)

 

     Year Ended  
     December 31, 2019     December 31, 2018     December 31, 2017  

Investment income

      

From non-control/non-affiliate investments

      

Interest income

   $ 37,627     $ 34,258     $ 32,815  

Payment-in-kind

     1,416       2,686       2,394  

Other income

     676       1,838       1,263  

From non-control/affiliate investments

      

Interest income

     —         —         148  
  

 

 

   

 

 

   

 

 

 

Total investment income

     39,719       38,782       36,620  

Expenses

      

Interest expense

     14,612       11,725       8,803  

Management fee

     6,471       6,058       5,875  

Incentive fee

     832       271       —    

Professional fees

     2,042       1,212       1,087  

Directors’ fees

     311       306       312  

Administrator expenses

     1,449       1,336       1,203  

Other expenses

     1,627       1,682       2,400  
  

 

 

   

 

 

   

 

 

 

Total expenses

     27,344       22,590       19,680  
  

 

 

   

 

 

   

 

 

 

Management fee waived

     —         —         (310

Incentive fee waived

     (255     —         —    
  

 

 

   

 

 

   

 

 

 

Net expenses

     27,089       22,590       19,370  
  

 

 

   

 

 

   

 

 

 

Net investment income before excise taxes

     12,630       16,192       17,250  

Excise tax expense

     —         —         23  
  

 

 

   

 

 

   

 

 

 

Net investment income

     12,630       16,192       17,227  
  

 

 

   

 

 

   

 

 

 

Realized and unrealized (losses)/gains

      

Net realized loss on investments

      

Non-control/non-affiliate investments

     (17,333     (273     (20,443

Non-control/affiliate investments

     —         —         (4,945

Control/affiliate investments

     (11,209     —         —    

Net change in unrealized (loss)/gain on investments

      

Non-control/non-affiliate investments

     (2,369     (13,189     12,694  

Non-control/affiliate investments

     (107     (2,085     1,694  

Control/affiliate investments

     —         —         —    
  

 

 

   

 

 

   

 

 

 

Net realized and unrealized loss on investments

     (31,018     (15,547     (11,000
  

 

 

   

 

 

   

 

 

 

Loss on extinguishment of debt

     (491     (2,218     —    
  

 

 

   

 

 

   

 

 

 

Net realized and unrealized losses

     (31,509     (17,765     (11,000
  

 

 

   

 

 

   

 

 

 

Net (decrease)/increase in net assets resulting from operations

   $ (18,879   $ (1,573   $ 6,227  
  

 

 

   

 

 

   

 

 

 

Net investment income per common share

   $ 0.79     $ 1.01     $ 1.07  
  

 

 

   

 

 

   

 

 

 

Net (decrease)/increase in net assets resulting from operations per common share

   $ (1.17   $ (0.10   $ 0.39  
  

 

 

   

 

 

   

 

 

 

Basic weighted average common shares outstanding

     16,049,352       16,049,352       16,049,352  

Dividends and distributions declared per common share

   $ 0.84     $ 1.07     $ 1.12  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Statements of Changes in Net Assets

($ in thousands, except share and per share amounts)

 

     Year Ended  
     December 31, 2019     December 31, 2018     December 31, 2017  

(Decrease)/increase in net assets from operations:

      

Net investment income

   $ 12,630     $ 16,192     $ 17,227  

Net realized loss on investments

     (28,542     (273     (25,388

Net change in unrealized loss on investments

     (2,476     (15,274     14,388  

Net loss on extinguishment of debt

     (491     (2,218     —    
  

 

 

   

 

 

   

 

 

 

Net (decrease)/increase in net assets resulting from operations

     (18,879     (1,573     6,227  
  

 

 

   

 

 

   

 

 

 

Dividends and distributions to stockholders:

      

From net investment income

     (13,480     (17,173     (17,977
  

 

 

   

 

 

   

 

 

 

Total dividends and distributions to stockholders

     (13,480     (17,173     (17,977
  

 

 

   

 

 

   

 

 

 

Total decrease in net assets

     (32,359     (18,746     (11,750

Net assets at beginning of period

     168,912       187,658       199,408  
  

 

 

   

 

 

   

 

 

 

Net assets at end of period

   $ 136,553     $ 168,912     $ 187,658  
  

 

 

   

 

 

   

 

 

 

Net asset value per share

   $ 8.51     $ 10.52     $ 11.69  

Shares of common stock outstanding at end of period

     16,049,352       16,049,352       16,049,352  

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Consolidated Statements of Cash Flows

($ in thousands, except share and per share amounts)

 

     Year Ended  
     December 31, 2019     December 31, 2018     December 31, 2017  

Cash flows from operating activities

      

Net decrease in net assets resulting from operations

   $ (18,879   $ (1,573   $ 6,227  

Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by/(used in) operating activities:

      

Net accretion of discounts on investments

     (1,242     (1,289     (1,274

Payment-in-kind

     (1,357     (1,711     (2,394

Amortization of deferred debt issuance costs and discounts on notes payable

     486       461       404  

Net realized loss on investments

     28,542       273       25,388  

Loss on extinguishment of debt

     369       2,218       —    

Net change in unrealized loss on investments

     2,476       15,274       (14,388

Purchases of investments

     (121,586     (285,620     (153,725

Paydowns of investments

     101,625       209,384       119,826  

Sales of investments

     26,646       4,442       8,526  

Changes in operating assets and liabilities:

      

(Increase)/decrease in due from counterparties

     (1,355     4,502       (2,477

Decrease/(increase) in due from affiliates

     —         509       (509

(Increase)/decrease in accrued interest receivable

     (303     908       (105

Decrease in other assets

     268       28       54  

(Decrease)/increase in due to counterparties

     (13,977     21,470       1,921  

Increase in payables to affiliates

     1,195       220       58  

(Decrease)/increase in accrued interest payable

     (1,307     1,732       219  

Increase in accrued expenses and other payables

     671       133       (218
  

 

 

   

 

 

   

 

 

 

Net cash provided by/(used in) operating activities

     2,272       (28,639     (12,467
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities

      

Distributions paid to stockholders

     (13,480     (17,173     (17,977

Payments for financing costs

     (102     (3,050     (438

Proceeds from short-term borrowings

     2,015       —         —    

Net proceeds/(repayments) from senior secured revolving note

     17,000       (11,700     19,700  

Repayment of GLC Trust 2013-2 Class A note

     —         —         (5,048

Net (repayments)/proceeds from Garrison SBIC borrowings

     (13,120     10,200       12,800  

Net proceeds from borrowing on senior secured term notes

     —         76,568       —    
  

 

 

   

 

 

   

 

 

 

Net cash (used in)/provided by financing activities

     (7,687     54,845       9,037  
  

 

 

   

 

 

   

 

 

 

Net (decrease)/increase in cash and restricted cash

     (5,415     26,206       (3,430

Cash and restricted cash at beginning of period

     45,722       19,516       22,946  
  

 

 

   

 

 

   

 

 

 

Cash and restricted cash at end of period

   $ 40,307     $ 45,722     $ 19,516  
  

 

 

   

 

 

   

 

 

 

Supplemental disclosure of cash flow information

      

Non-cash conversion of senior secured revolving note to term note

   $ 25,000     $ —       $ —    

Cash paid for interest expense

   $ 15,665     $ 9,778     $ 8,550  

Non-cash restructuring of portfolio investments

   $ 14,082     $ 4,112     $ —    

See accompanying notes to consolidated financial statements.


Garrison Capital Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2019

1. Organization

Garrison Capital Inc. (“GARS” and, collectively with its subsidiaries, the “Company”, “we”, “us” or “our”) is a Delaware corporation and is an externally managed, closed-end, non-diversified management investment company that has filed an election to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, for tax purposes, GARS has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for the period beginning October 9, 2012 and intends to qualify annually thereafter. GARS’ shares trade on the Nasdaq Global Select Market under the symbol “GARS”.

Our investment objective is to generate current income and capital appreciation by assembling a broad portfolio of loans and debt securities in U.S. based companies. The companies to which we typically extend credit to are moderately leveraged and have been rated below investment grade by national rating agencies. For companies that have not been rated, we believe that they would typically receive a rating below investment grade. In addition, our investments typically range in maturity from one to seven years. However, we may make investments in securities with any maturity or duration. We invest opportunistically in loans and debt securities that we believe have attractive risk adjusted returns. We also, to a lesser extent, may make select minority equity investments (usually in conjunction with a concurrent debt investment) in non-investment grade companies. On November 12, 2019, we announced that our board of directors had retained Keefe, Bruyette & Woods, Inc. as its financial advisor and investment banker to assist in exploring a variety of strategic alternatives to enhance value for our stockholders. Pending completion of our review of strategic alternatives, we expect to limit our investment activities and may hold any prepayments or repayments of principal on our investments in cash rather than redeploying in new investment opportunities.

The Company’s business and affairs are managed and controlled by the Company’s board of directors (the “Board”). The majority of the members of the Board are independent of the Company and its affiliates. Our investment activities and day-to-day operations are managed by Garrison Capital Advisers, LLC (the “Investment Adviser”), and Garrison Capital Administrator, LLC (the “GARS Administrator”) provides the Company with certain administrative services necessary to conduct our day-to-day operations. We are organized as a holding company and conduct our business primarily through our various subsidiaries.

2. Significant Accounting Policies and Recent Updates

Basis of Presentation

The Company is an investment company as defined in the accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 — Financial Services — Investment Companies (“ASC Topic 946”).

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for financial information and pursuant to the requirements for reporting on Form 10-K and Articles 6, 10 and 12 of Regulation S-X. In the opinion of management, the consolidated financial statements reflect all adjustments and reclassifications, consisting solely of normal accruals, that are necessary for the fair presentation of financial results as of and for the periods presented. All intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation, including the consolidation of our various debt facilities into a single line on the consolidated statement of financial condition.


Garrison Capital Inc. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2019

2. Significant Accounting Policies and Recent Updates – (continued)

 

Principles of Consolidation

The consolidated financial statements include the accounts of GARS and its subsidiaries. The accounts of the subsidiaries are prepared using consistent accounting policies and as of the same reporting period as GARS. Under ASC Topic 946, the Company is generally precluded from consolidating any entity other than another investment company. Accordingly, the Company consolidates any investment company when it owns 100% of its equity units or 100% of the economic equity interest. ASC Topic 946 also provides for the consolidation of a controlled operating company that provides substantially all of its services to the investment company or its consolidated subsidiaries.

As a result, as of December 31, 2019 and 2018, GARS has consolidated the results of Garrison Funding 2018-2 Ltd. (“GF 2018-2” formerly, Garrison Funding 2016-2 Ltd.), Garrison Funding 2018-2 LLC (formerly Garrison Funding 2016-2 LLC), Garrison Capital SBIC, LP (“Garrison SBIC”), GLC Trust 2013-2 (“GLC Trust 2013-2”), Garrison Capital PL Holdings LLC, GIG Rooster Holdings I LLC and a series of limited liability companies that GARS created primarily to provide specific tax treatment for the equity and other investments held in these limited liability companies to the extent such entity was in existence as of December 31, 2019 and 2018, respectively.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP r