XML 20 R11.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Portfolio Company Investments | 9 Months Ended
--- | ---
Sep. 30, 2022
Schedule of Investments [Abstract] |
Portfolio Company Investments | Note 3. Portfolio Company Investments The Company’s portfolio investments principally consist of secured and unsecured debt, equity warrants and direct equity investments primarily in privately held companies. The debt investments may or may not be secured by either a first or second lien on the assets of the portfolio company. The debt investments generally bear interest at fixed rates or variable rates, and generally mature between five and seven years from the original investment. In connection with a debt investment, the Company also may receive nominally priced equity warrants and/or make a direct equity investment in the portfolio company. The Company’s warrants or equity investments may be investments in a holding company related to the portfolio company. In addition, the Company periodically makes equity investments in its portfolio companies through Taxable Subsidiaries. In both situations, the investment is generally reported under the name of the operating company on the consolidated schedules of investments. As of September 30, 2022, the Company had active investments in 75 portfolio companies and residual investments in thirteen portfolio companies that have sold their underlying operations. The aggregate fair value of the total portfolio was $856,914 and the weighted average effective yield on the Company’s debt investments was 12.9% as of such date. As of September 30, 2022, the Company held equity investments in 77.3% of its portfolio companies and the average fully diluted equity ownership in those portfolio companies was 3.7%. As of December 31, 2021, the Company had active investments in 70 portfolio companies and residual investments in eight portfolio companies that have sold their underlying operations. The aggregate fair value of the total portfolio was $719,124 and the weighted average effective yield on the Company’s debt investments was 12.3% as of such date. As of December 31, 2021, the Company held equity investments in 82.1% of its portfolio companies and the average fully diluted equity ownership in those portfolio companies was 4.7%. The weighted average yield of the Company’s debt investments is not the same as a return on investment for its stockholders but, rather, relates to a portion of the Company’s investment portfolio and is calculated before the payment of all of the Company’s and its subsidiaries’ fees and expenses. The weighted average yields were computed using the effective interest rates for debt investments at cost as of September 30, 2022 and December 31, 2021, including accretion of OID and debt investment origination fees, but excluding investments on non-accrual status and investments recorded as a secured borrowing, if any. Purchases of debt and equity investments for the nine months ended September 30, 2022 and 2021 totaled $267,950 and $245,544, respectively. Proceeds from sales and repayments, including principal, return of capital distributions and realized gains, of portfolio investments for the nine months ended September 30, 2022 and 2021 totaled $128,255 and $319,036, respectively. Investments by type with corresponding percentage of total portfolio investments consisted of the following:
|  | Fair Value |  |  |  | Cost |  |
|  | September 30, |  |  |  | December 31, |  |  |  | September 30, |  |  |  | December 31, |  |
|  | 2022 |  |  |  | 2021 |  |  |  | 2022 |  |  |  | 2021 |  |
First Lien Debt(1) |  | $ | 488,334 |  |  |  | 57.0 | % |  |  | $ | 354,922 |  |  |  | 49.4 | % |  |  | $ | 487,999 |  |  |  | 59.0 | % |  |  | $ | 353,306 |  |  |  | 56.8 | % |
Second Lien Debt |  |  | 177,222 |  |  |  | 20.7 |  |  |  |  | 158,815 |  |  |  | 22.1 |  |  |  |  | 200,028 |  |  |  | 24.2 |  |  |  |  | 168,573 |  |  |  | 27.1 |  |
Subordinated Debt |  |  | 81,759 |  |  |  | 9.5 |  |  |  |  | 36,064 |  |  |  | 5.0 |  |  |  |  | 80,477 |  |  |  | 9.7 |  |  |  |  | 35,995 |  |  |  | 5.8 |  |
Equity |  |  | 106,951 |  |  |  | 12.5 |  |  |  |  | 166,119 |  |  |  | 23.1 |  |  |  |  | 55,563 |  |  |  | 6.7 |  |  |  |  | 60,589 |  |  |  | 9.8 |  |
Warrants |  |  | 2,648 |  |  |  | 0.3 |  |  |  |  | 3,204 |  |  |  | 0.4 |  |  |  |  | 3,323 |  |  |  | 0.4 |  |  |  |  | 3,323 |  |  |  | 0.5 |  |
Total |  | $ | 856,914 |  |  |  | 100.0 | % |  |  | $ | 719,124 |  |  |  | 100.0 | % |  |  | $ | 827,390 |  |  |  | 100.0 | % |  |  | $ | 621,786 |  |  |  | 100.0 | % |
(1) Includes unitranche investments, which account for 43.1% and 44.4% of our portfolio on a fair value and cost basis as of September 30, 2022, respectively. Includes unitranche investments, which account for 40.2% and 46.3% of our portfolio on a fair value and cost basis as of December 31, 2021, respectively. All investments made by the Company as of September 30, 2022 and December 31, 2021 were made in portfolio companies headquartered in the United States. The following table shows portfolio composition by geographic region at fair value and cost and as a percentage of total investments. The geographic composition is determined by the location of the corporate headquarters of the portfolio company, which may not be indicative of the primary source of the portfolio company’s business.
|  | Fair Value |  |  |  | Cost |  |
|  | September 30, |  |  |  | December 31, |  |  |  | September 30, |  |  |  | December 31, |  |
|  | 2022 |  |  |  | 2021 |  |  |  | 2022 |  |  |  | 2021 |  |
Midwest |  | $ | 185,994 |  |  |  | 21.7 | % |  |  | $ | 157,222 |  |  |  | 21.9 | % |  |  | $ | 140,728 |  |  |  | 17.0 | % |  |  | $ | 89,865 |  |  |  | 14.5 | % |
Southeast |  |  | 250,549 |  |  |  | 29.2 |  |  |  |  | 219,988 |  |  |  | 30.6 |  |  |  |  | 252,173 |  |  |  | 30.5 |  |  |  |  | 197,380 |  |  |  | 31.7 |  |
Northeast |  |  | 123,890 |  |  |  | 14.5 |  |  |  |  | 126,569 |  |  |  | 17.6 |  |  |  |  | 128,203 |  |  |  | 15.5 |  |  |  |  | 127,809 |  |  |  | 20.6 |  |
West |  |  | 154,927 |  |  |  | 18.1 |  |  |  |  | 105,918 |  |  |  | 14.7 |  |  |  |  | 160,958 |  |  |  | 19.4 |  |  |  |  | 100,098 |  |  |  | 16.1 |  |
Southwest |  |  | 141,554 |  |  |  | 16.5 |  |  |  |  | 109,427 |  |  |  | 15.2 |  |  |  |  | 145,328 |  |  |  | 17.6 |  |  |  |  | 106,634 |  |  |  | 17.1 |  |
Total |  | $ | 856,914 |  |  |  | 100.0 | % |  |  | $ | 719,124 |  |  |  | 100.0 | % |  |  | $ | 827,390 |  |  |  | 100.0 | % |  |  | $ | 621,786 |  |  |  | 100.0 | % |
The following table shows portfolio composition by type and by geographic region at fair value as a percentage of net assets.
By Type |  |  |  | By Geographic Region |  |
|  | September 30, |  |  |  | December 31, |  |  |  |  |  | September 30, |  |  |  | December 31, |  |
|  | 2022 |  |  |  | 2021 |  |  |  |  |  | 2022 |  |  |  | 2021 |  |
First Lien Debt |  |  | 102.9 | % |  |  |  | 72.8 | % |  |  | Midwest |  |  | 39.2 | % |  |  |  | 32.2 | % |
Second Lien Debt |  |  | 37.4 |  |  |  |  | 32.6 |  |  |  | Southeast |  |  | 52.8 |  |  |  |  | 45.1 |  |
Subordinated Debt |  |  | 17.2 |  |  |  |  | 7.4 |  |  |  | Northeast |  |  | 26.1 |  |  |  |  | 26.0 |  |
Equity |  |  | 22.5 |  |  |  |  | 34.0 |  |  |  | West |  |  | 32.7 |  |  |  |  | 21.7 |  |
Warrants |  |  | 0.6 |  |  |  |  | 0.6 |  |  |  | Southwest |  |  | 29.8 |  |  |  |  | 22.4 |  |
Total |  |  | 180.6 | % |  |  |  | 147.4 | % |  |  | Total |  |  | 180.6 | % |  |  |  | 147.4 | % |
As of September 30, 2022 and December 31, 2021, the Company had no portfolio company investments that represented more than 10% of the total investment portfolio on a fair value or cost basis. As of September 30, 2022 and December 31, 2021, the Company's investment in Pfanstiehl, Inc. totaled $51,796 and $57,639 or 5.7% and 6.4% of total assets, respectively. As of September 30, 2022, the Company had debt investments in three portfolio companies on non-accrual status. As of December 31, 2021, the Company had a debt investment in one portfolio company on non-accrual status.
|  | September 30, 2022 |  |  | December 31, 2021 |  |
|  | Fair |  |  |  |  |  | Fair |  |  |  |  |
Portfolio Company |  | Value |  |  | Cost |  |  | Value |  |  | Cost |  |
EBL, LLC (EbLens) |  | $ | 2,427 |  |  | $ | 9,333 |  |  | $ | — |  | (1) | $ | — |  | (1)
US GreenFiber, LLC |  |  | — |  |  |  | 5,223 |  |  |  | — |  | (2) |  | 5,223 |  | (2)
K2 Merger Agreement Agent, LLC (fka K2 Industrial Services, Inc.) |  |  | 2,169 |  |  |  | 2,368 |  |  |  | — |  | (1) |  | — |  | (1)
Total |  | $ | 4,596 |  |  | $ | 16,924 |  |  | $ | — |  |  | $ | 5,223 |  |
(1) | Portfolio company debt investment was not on non-accrual status as of December 31, 2021.
(2) | Portfolio company was on PIK-only non-accrual status at December 31, 2021, meaning the Company has ceased recognizing PIK interest income on the investment.
Consolidated Schedule of Investments In and Advances To Affiliates The table below represents the fair value of control and affiliate investments as of December 31, 2021 and any additions and reductions made to such investments during the nine months ended September 30, 2022, the ending fair value as of September 30, 2022, and the total investment income earned on such investments during the period.
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Nine Months Ended September 30, 2022 |
Portfolio Company (1) |  |  | September 30, 2022 Principal Amount - Debt Investments |  |  | December 31, 2021 Fair Value |  |  | Gross Additions (2) |  |  | Gross Reductions (3) |  |  | September 30, 2022 Fair Value |  |  | Net Realized Gains (Losses) (4) |  |  | Net Change in Unrealized Appreciation (Depreciation) |  |  | Interest Income |  |  | Payment-in-kind Interest Income |  |  | Dividend Income |  |  | Fee Income |
Control Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hilco Plastics Holdings, LLC (dba Hilco Technologies) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Mesa Line Services, LLC |  |  |  | — |  |  |  | 2,151 |  |  |  | 134 |  |  |  | (2,285 | ) |  |  | — |  |  |  | 135 |  |  |  | (2,151 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
US GreenFiber, LLC |  |  |  | 5,226 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Control Investments |  |  | $ | 5,226 |  |  | $ | 2,151 |  |  | $ | 134 |  |  | $ | (2,285 | ) |  | $ | — |  |  | $ | 135 |  |  | $ | (2,151 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Affiliate Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Applegate Greenfiber Intermediate Inc. (fka US GreenFiber, LLC) |  |  | $ | 9,602 |  |  | $ | 22,405 |  |  | $ | 12,802 |  |  | $ | (13,587 | ) |  | $ | 21,620 |  |  | $ | — |  |  |  | (785 | ) |  | $ | 728 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
FAR Research Inc. |  |  |  | — |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Medsurant Holdings, LLC |  |  |  | — |  |  |  | 3,662 |  |  |  | — |  |  |  | (1,120 | ) |  |  | 2,542 |  |  |  | — |  |  |  | (1,120 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Mirage Trailers LLC |  |  |  | — |  |  |  | 10,675 |  |  |  | 355 |  |  |  | (11,030 | ) |  |  | — |  |  |  | 324 |  |  |  | (1,694 | ) |  |  | 248 |  |  |  | 29 |  |  |  | — |  |  |  | 132 |
Pfanstiehl, Inc. |  |  |  | 10,000 |  |  |  | 57,639 |  |  |  | 34,332 |  |  |  | (40,175 | ) |  |  | 51,796 |  |  |  | 24,330 |  |  |  | (15,625 | ) |  |  | 166 |  |  |  | — |  |  |  | — |  |  |  | 150 |
Pinnergy, Ltd. (5) |  |  |  | — |  |  |  | 21,178 |  |  |  | 15,300 |  |  |  | (36,478 | ) |  |  | — |  |  |  | 15,300 |  |  |  | (18,178 | ) |  |  | — |  |  |  | — |  |  |  | 656 |  |  |  | — |
Spectra A&D Acquisition, Inc. (fka FDS Avionics Corp.) |  |  |  | 15,000 |  |  |  | 18,359 |  |  |  | 2,627 |  |  |  | (5,058 | ) |  |  | 15,928 |  |  |  | (114 | ) |  |  | (4,934 | ) |  |  | 1,291 |  |  |  | — |  |  |  | — |  |  |  | 170 |
Steward Holding LLC (dba Steward Advanced Materials) |  |  |  | — |  |  |  | 3,338 |  |  |  | 323 |  |  |  | — |  |  |  | 3,661 |  |  |  | — |  |  |  | 323 |  |  |  | — |  |  |  | 1 |  |  |  | 69 |  |  |  | — |
Total Affiliate Investments |  |  | $ | 34,602 |  |  | $ | 137,284 |  |  | $ | 65,739 |  |  | $ | (107,448 | ) |  | $ | 95,575 |  |  | $ | 39,840 |  |  | $ | (42,013 | ) |  | $ | 2,433 |  |  | $ | 30 |  |  | $ | 725 |  |  | $ | 452 |
(1) | The investment type, industry, ownership detail for equity investments, and interest rate (if the investment is income producing) is disclosed in the consolidated schedule of investments.
(2) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest and PIK dividend income, accretion of OID and origination fees, and net unrealized appreciation recognized during the period. Gross additions also include transfers of portfolio companies into the control or affiliate classification during the period, as applicable.
(3) | Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and net unrealized (depreciation) recognized during the period. Gross reductions also include transfers of portfolio companies out of the control or affiliate classification during the period, as applicable.
(4) | The schedule does not reflect realized gains or losses on escrow receivables for investments which were previously exited and were not held during the period presented. Gains and losses on escrow receivables are classified in the consolidated statements of operations according to the control classification at the time the investment was exited. Escrow receivables are presented in prepaid expenses and other assets on the consolidated statements of assets and liabilities.
(5) | Portfolio company was transferred to Non-control/Non-affiliate investments from Affiliate investments during the nine months ended September 30, 2022.
The table below represents the fair value of control and affiliate investments as of December 31, 2020 and any additions and reductions made to such investments during the year ended December 31, 2021, including the total investment income earned on such investments during the period.
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Year Ended Ended December 31, 2021 |
Portfolio Company (1) |  |  | December 31, 2021 Principal Amount - Debt Investments |  |  | December 31, 2020 Fair Value |  |  | Gross Additions (2) |  |  | Gross Reductions (3) |  |  | December 31, 2021 Fair Value |  |  | Net Realized Gains (Losses) (4) |  |  | Net Change in Unrealized Appreciation (Depreciation) |  |  | Interest Income |  |  | Payment-in-kind Interest Income |  |  | Dividend Income |  |  | Fee Income |
Control Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hilco Plastics Holdings, LLC (dba Hilco Technologies)(6) |  |  | $ | — |  |  | $ | — |  |  | $ | 1,577 |  |  | $ | (1,577 | ) |  | $ | — |  |  | $ | (881 | ) |  | $ | — |  |  | $ | 308 |  |  | $ | — |  |  | $ | 568 |  |  | $ | — |
Mesa Line Services, LLC (6) |  |  |  | — |  |  |  | — |  |  |  | 32,708 |  |  |  | (30,557 | ) |  |  | 2,151 |  |  |  | 20,445 |  |  |  | 2,150 |  |  |  | 951 |  |  |  | 903 |  |  |  | — |  |  |  | 1,472 |
Spectra A&D Acquisition, Inc. (fka FDS Avionics Corp.)(5) |  |  |  | — |  |  |  | 7,391 |  |  |  | 1,986 |  |  |  | (9,377 | ) |  |  | — |  |  |  | 957 |  |  |  | 1,028 |  |  |  | 90 |  |  |  | — |  |  |  | — |  |  |  | 400 |
US GreenFiber, LLC |  |  |  | 5,226 |  |  |  | 20,862 |  |  |  | 5,214 |  |  |  | (26,076 | ) |  |  | — |  |  |  | — |  |  |  | (3,144 | ) |  |  | 2,386 |  |  |  | 1,214 |  |  |  | — |  |  |  | — |
Total Control Investments |  |  | $ | 5,226 |  |  | $ | 28,253 |  |  | $ | 41,485 |  |  | $ | (67,587 | ) |  | $ | 2,151 |  |  | $ | 20,521 |  |  | $ | 34 |  |  | $ | 3,735 |  |  | $ | 2,117 |  |  | $ | 568 |  |  | $ | 1,872 |
Affiliate Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Applegate Greenfiber Intermediate Inc. (fka US GreenFiber, LLC) |  |  | $ | 9,602 |  |  | $ | - |  |  | $ | 22,405 |  |  | $ | — |  |  | $ | 22,405 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
FAR Research Inc. |  |  |  | — |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Fiber Materials, Inc. |  |  |  | — |  |  |  | 41 |  |  |  | 94 |  |  |  | (135 | ) |  |  | - |  |  |  | 94 |  |  |  | (42 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Medsurant Holdings, LLC |  |  |  | — |  |  |  | 10,960 |  |  |  | 733 |  |  |  | (8,031 | ) |  |  | 3,662 |  |  |  | — |  |  |  | 687 |  |  |  | 331 |  |  |  | — |  |  |  | — |  |  |  | 91 |
Mirage Trailers LLC |  |  |  | 6,705 |  |  |  | 6,494 |  |  |  | 4,225 |  |  |  | (44 | ) |  |  | 10,675 |  |  |  | — |  |  |  | 3,871 |  |  |  | 761 |  |  |  | 338 |  |  |  | 110 |  |  |  | — |
Pfanstiehl, Inc. |  |  |  | — |  |  |  | 33,505 |  |  |  | 24,134 |  |  |  | — |  |  |  | 57,639 |  |  |  | — |  |  |  | 24,135 |  |  |  | — |  |  |  | — |  |  |  | 1,062 |  |  |  | — |
Pinnergy, Ltd. |  |  |  | — |  |  |  | 20,589 |  |  |  | 589 |  |  |  | — |  |  |  | 21,178 |  |  |  | — |  |  |  | 589 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Spectra A&D Acquisition, Inc. (fka FDS Avionics Corp.)(5) |  |  |  | 13,000 |  |  |  | — |  |  |  | 18,452 |  |  |  | (93 | ) |  |  | 18,359 |  |  |  | — |  |  |  | 1,626 |  |  |  | 1,142 |  |  |  | — |  |  |  | — |  |  |  | 294 |
Steward Holding LLC (dba Steward Advanced Materials) |  |  |  | — |  |  |  | 9,777 |  |  |  | 1,373 |  |  |  | (7,812 | ) |  |  | 3,338 |  |  |  | — |  |  |  | 1,341 |  |  |  | 461 |  |  |  | 30 |  |  |  | — |  |  |  | — |
Total Affiliate Investments |  |  | $ | 29,307 |  |  | $ | 81,394 |  |  | $ | 72,005 |  |  | $ | (16,115 | ) |  | $ | 137,284 |  |  | $ | 94 |  |  | $ | 32,207 |  |  | $ | 2,695 |  |  | $ | 368 |  |  | $ | 1,172 |  |  | $ | 385 |
(1) | The investment type, industry, ownership detail for equity investments, and if the investment is income producing is disclosed in the consolidated schedule of investments.
(2) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments, accrued PIK interest and PIK dividend income, accretion of OID and origination fees, and net unrealized appreciation recognized during the period. Gross additions also include transfers of portfolio companies into the control or affiliate classification during the period, as applicable.
(3) | Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and net unrealized (depreciation) recognized during the period. Gross reductions also include transfers of portfolio companies out of the control or affiliate classification during the period, as applicable.
(4) | The schedule does not reflect realized gains or losses on escrow receivables for investments which were previously exited and were not held during the period presented. Gains and losses on escrow receivables are classified in the consolidated statements of operations according to the control classification at the time the investment was exited. Escrow receivables are presented in prepaid expenses and other assets on the consolidated statements of assets and liabilities.
(5) | Portfolio company was transferred to Affiliate investments from Control investments during the year ended December 31, 2021.
(6) | Portfolio company was transferred to Control investments from Non-control/Non-affiliate investments during the year ended December 31, 2021.

X
- Definition The entire disclosure for investment. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 321 -URI https://asc.fasb.org/topic&trid=75115024 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 325 -URI https://asc.fasb.org/topic&trid=2197064 Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI https://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_InvestmentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ScheduleOfInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration