☒

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Delaware

85-3439073

(State or Other Jurisdiction of Incorporation)

(IRS Employer Identification No.)

2951 28^th Street, Suite 1000

Santa Monica, California

90405

(Address of Principal Executive Offices)

(Zip Code)

None

Not applicable

Not applicable

(Title of each class)

(Trading Symbol(s) )

(Name of each exchange where registered)

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller Reporting company

☐

Emerging growth company

☒

Part I.

Financial Information

Item 1.

Financial Statements

Statements of Assets and Liabilities as of March 31, 2022 (Unaudited) and December 31, 2021

3

Statements of Operations for the three months ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited)

4

Statements of Changes in Net Assets for the three months ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited)

5

Statement of Cash Flows for the three months ended March 31, 2022 (Unaudited) and March 31, 2021 (Unaudited)

6

Schedules of Investments as of March 31, 2022 (Unaudited) and December 31, 2021

7

Notes to Financial Statements (Unaudited)

16

Schedule of Restricted Securities of Unaffiliated Issuers as of March 31, 2022 (Unaudited) and December 31, 2021

28

Item 2.

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

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4.

Controls and Procedures

41

Part II.

Other Information

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

42

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

43

Item 3.

Defaults upon Senior Securities

43

Item 4.

Mine Safety Disclosures

43

Item 5.

Other Information

43

Item 6.

Exhibits

43

March 31, 2022

December 31, 2021

Assets

(Unaudited)

Investments, at fair value:

Non-controlled, non-affiliated investments (cost of $137,665,319 and $114,888,752, respectively)

$

139,026,348

$

116,529,036

Total investments (cost of $137,665,319 and $114,888,752, respectively)

139,026,348

116,529,036

Cash and cash equivalents

3,464,379

1,957,486

Interest receivable

845,480

809,137

Deferred debt issuance costs

375,086

451,461

Deferred offering costs

196,256

196,256

Prepaid expenses and other assets

199,099

98,285

Total assets

144,106,648

120,041,661

Liabilities

Debt (net of deferred issuance costs of $15,575 and $15,709, respectively)

55,094,425

22,094,291

Incentive fees payable (Note 3)

201,710

304,622

Accrued capital gains incentive fees (Note 3)

170,434

165,778

Reimbursements due to the Advisor

131,906

142,784

Interest and debt related payables

96,892

73,441

Payable for investments purchased

—

10,366,640

Accrued expenses and other liabilities

680,863

291,747

Total liabilities

56,376,230

33,439,303

Commitments and contingencies (Note 5)

Net assets

$

87,730,418

$

86,602,358

Composition of net assets applicable to common stockholders

Common stock, $0.001 par value; 300,000,000 shares authorized, 8,371,979 shares issued and outstanding as of March 31, 2022 and December 31, 2021

$

8,372

$

8,372

Paid-in capital in excess of par

85,083,664

85,083,664

Distributable earnings

2,638,382

1,510,322

Total net assets

87,730,418

86,602,358

Total liabilities and net assets

$

144,106,648

$

120,041,661

Net assets per share

$

10.48

$

10.34

Three Months Ended March 31

Investment income

2022

2021

Interest income (excluding Payment-in-Kind ("PIK")):

Non-controlled, non-affiliated investments

$

2,418,590

$

240,590

PIK income:

Non-controlled, non-affiliated investments

69,006

—

Other income:

Non-controlled, non-affiliated investments

18,871

30,000

Total investment income

2,506,467

270,590

Operating expenses

Interest and other debt expenses

306,925

3,388

Management fees

262,050

4,844

Incentive fees earned

201,710

—

Professional fees

113,356

103,757

Administrative expenses

101,230

—

Director fees

43,500

41,500

Custody and transfer agent fees

12,927

10,054

Insurance expense

6,746

6,272

Incentive fees on capital gains⁽¹⁾

4,656

—

Other operating expenses

50,078

2,377

Total operating expenses

1,103,178

172,192

Net investment income

1,403,289

98,398

Realized and unrealized gain (loss)

    Net realized gain (loss):

Non-controlled, non-affiliated investments

4,026

—

Change in net unrealized appreciation (depreciation)

Non-controlled, non-affiliated investments

(279,255

)

188,445

Net realized and unrealized gain (loss)

(275,229

)

188,445

Net increase in net assets from operations

$

1,128,060

$

286,843

Earnings per share⁽²⁾

$

0.14

$

0.10

Basic and diluted weighted average shares outstanding

8,371,979

3,110,057

(1)

Net investment income and per share amounts displayed above are net of the accrual for incentive fees on capital gains which is reflected on a hypothetical liquidation basis in accordance with Generally Accepted Accounting Principles (“GAAP”) for the three months ended March 31, 2022 (see Note 3).

(2)

Computed based on the actual number of shares outstanding and capital activity during the time periods such earnings occurred.

Common Stock

Paid in Capital in

Distributable

Total

Shares

Par Amount

Excess of Par

Earnings (Loss)

Net Assets

Balance at December 31, 2020

3,010,000

$

3,010

$

29,954,394

$

(95,482

)

$

29,861,922

Issuance of common stock

1,500,858

1,501

15,048,499

—

15,050,000

Offering costs charged to paid-in capital

—

—

(11,399

)

—

(11,399

)

Net investment income

—

—

—

98,398

98,398

Net realized and unrealized gain

—

—

—

188,445

188,445

Balance at March 31, 2021

4,510,858

$

4,511

$

44,991,494

$

191,361

$

45,187,366

Common Stock

Paid in Capital in

Distributable

Total

Shares

Par Amount

Excess of Par

Earnings (Loss)

Net Assets

Balance at December 31, 2021

8,371,979

$

8,372

$

85,083,664

$

1,510,322

$

86,602,358

Net investment income

—

—

—

1,403,289

1,403,289

Net realized and unrealized gain

—

—

—

(275,229

)

(275,229

)

Balance at March 31, 2022

8,371,979

$

8,372

$

85,083,664

$

2,638,382

$

87,730,418

Three Months Ended March 31

2022

2021

Operating activities

Net increase (decrease) in net assets resulting from operations

$

1,128,060

$

286,843

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to

   net cash provided by (used in) operating activities:

      Net realized (gain) loss

(4,026

)

—

Change in net unrealized (appreciation)/depreciation of investments

279,255

(188,445

)

Net amortization of investment discounts and premiums

(116,729

)

(19,251

)

Amortization of deferred debt issuance costs

76,509

134

Interest and dividend income paid in kind

(69,006

)

—

Changes in assets and liabilities:

Purchases of investments

(22,841,906

)

(19,305,377

)

Proceeds from disposition of investments

255,100

36,904

Decrease (increase) in interest receivable

(36,343

)

(110,335

)

Decrease (increase) in prepaid expenses and other assets

(100,814

)

5,934

Increase (decrease) in incentive fees payable

(102,912

)

—

Increase (decrease) in accrued capital gains incentive fees

4,656

—

Increase (decrease) in reimbursements due to the Advisor

(10,878

)

(57,131

)

Increase (decrease) in interest and debt related payables

23,451

3,255

Increase (decrease) in payable for investments purchased

(10,366,640

)

(732,150

)

Increase (decrease) in management fees payable

—

4,844

Increase (decrease) in accrued expenses and other liabilities

389,116

59,548

Net cash provided by (used in) operating activities

(31,493,107

)

(20,015,227

)

Financing activities

Draws on credit facilities

33,000,000

—

Proceeds from shares of common stock sold

—

15,050,000

Payments of equity offering costs

—

(227,985

)

Net cash provided by (used in) financing activities

33,000,000

14,822,015

Net increase (decrease) in cash and cash equivalents (including restricted cash)

1,506,893

(5,193,212

)

Cash and cash equivalents (including restricted cash) at beginning of period

1,957,486

30,193,016

Cash and cash equivalents (including restricted cash) at end of period

$

3,464,379

$

24,999,804

Supplemental cash flow information

Interest payments

$

206,964

$

—

Issuer

Instrument

Ref

Floor

Spread

Total

Coupon

Maturity

Principal

Cost

Fair

Value

% of Total

Cash and

Investments

Notes

Debt Investments (A)

Automobiles

ALCV Purchaser, Inc. (AutoLenders)

First Lien Term Loan

LIBOR(Q)

1.00

%

6.75

%

7.75

%

4/15/2026

$

1,032,223

$

1,019,480

$

1,032,223

0.72

%

F

ALCV Purchaser, Inc. (AutoLenders)

First Lien Revolver

LIBOR(Q)

1.00

%

6.75

%

7.75

%

4/15/2026

$

-

(1,120

)

-

0.00

%

E/F

1,018,360

1,032,223

0.72

%

Beverages

JP Intermediate B, LLC (Juice Plus)

First Lien Term Loan

LIBOR(Q)

1.00

%

5.50

%

6.50

%

11/20/2025

$

1,988,090

1,838,303

1,709,758

1.20

%

Building Products

Porcelain Acquisition Corporation (Paramount)

First Lien Term Loan

LIBOR(Q)

1.00

%

5.75

%

6.76

%

4/30/2027

$

869,472

854,215

876,427

0.62

%

F

Porcelain Acquisition Corporation (Paramount)

First Lien Delayed Draw Term Loan

LIBOR(Q)

1.00

%

5.75

%

6.76

%

4/30/2027

$

135,161

128,791

138,164

0.10

%

F

983,006

1,014,591

0.72

%

Commercial Services & Supplies

Thermostat Purchaser III, Inc. (Reedy Industries)

Second Lien Term Loan

LIBOR(Q)

0.75

%

7.25

%

8.00

%

8/31/2029

$

1,076,305

1,061,197

1,062,313

0.75

%

F

Thermostat Purchaser III, Inc. (Reedy Industries)

Second Lien Delayed Draw Term Loan

LIBOR(Q)

0.75

%

7.25

%

8.00

%

8/31/2029

$

-

(1,281

)

(2,394

)

0.00

%

E/F

1,059,916

1,059,919

0.75

%

Construction & Engineering

Homerenew Buyer, Inc. (Project Dream)

First Lien Term Loan

LIBOR(Q)

1.00

%

6.50

%

7.51

%

8/10/2027

$

1,264,230

1,234,780

1,230,096

0.86

%

F

Homerenew Buyer, Inc. (Project Dream)

First Lien Delayed Draw Term Loan

LIBOR(Q)

1.00

%

6.50

%

7.50

%

8/10/2027

$

270,512

252,375

249,644

0.18

%

F

Homerenew Buyer, Inc. (Project Dream)

Sr Secured Revolver

LIBOR(Q)

1.00

%

6.50

%

7.51

%

11/23/2027

$

-

(7,798

)

(8,943

)

(0.01

)%

E/F

PHRG Intermediate, LLC (Power Home)

First Lien Term Loan

LIBOR(M)

0.75

%

6.00

%

6.75

%

12/16/2026

$

4,516,650

4,408,688

4,482,775

3.15

%

F

Sunland Asphalt & Construction, LLC

First Lien Term Loan

LIBOR(Q)

1.00

%

6.00

%

7.01

%

1/13/2026

$

1,000,788

985,279

984,775

0.69

%

F

Sunland Asphalt & Construction, LLC

First Lien Delayed Draw Term Loan

LIBOR(Q)

1.00

%

6.00

%

7.01

%

1/13/2026

$

336,515

331,236

331,131

0.23

%

F

7,204,560

7,269,478

5.10

%

Construction & Material

AHF Parent Holding, Inc.

First Lien Term Loan

SOFR(Q)

0.75

%

6.51

%

7.16

%

2/1/2028

$

2,460,762

2,411,958

2,423,851

1.70

%

D

Containers & Packaging

BW Holding, Inc. (Brook & Whittle)

Second Lien Term Loan

LIBOR(M)

0.75

%

7.50

%

8.25

%

12/14/2029

$

883,647

864,336

860,673

0.60

%

F

BW Holding, Inc. (Brook & Whittle)

Second Lien Delayed Draw Term Loan

LIBOR(M)

0.75

%

7.50

%

8.25

%

12/14/2029

$

-

(3,348

)

(3,989

)

0.00

%

E/F

860,988

856,684

0.60

%

Distributors

Colony Display, LLC

First Lien Term Loan

LIBOR(Q)

1.00

%

6.50

%

7.51

%

6/30/2026

$

973,165

956,500

942,024

0.66

%

F

Colony Display, LLC

First Lien Delayed Draw Term Loan

LIBOR(Q)

1.00

%

6.50

%

7.51

%

6/30/2026

$

-

(8,346

)

(15,688

)

(0.01

)%

E/F

948,154

926,336

0.65

%

Diversified Consumer Services

Elevate Brands OpCo, LLC

First Lien Delayed Draw Term Loan

SOFR(Q)

1.00

%

8.50

%

9.50

%

3/15/2027

$

3,131,544

3,071,733

3,071,323

2.16

%

F

Razor Group GmbH (Germany)

First Lien Delayed Draw Term Loan

LIBOR(M)

1.00

%

9.00

%

10.00

%

9/30/2025

$

4,000,000

4,032,849

4,016,000

2.82

%

B/F

Razor Group GmbH (Germany)

First Lien Sr Secured Convertible Term Loan

Fixed

-

3.50% Cash + 3.50% PIK

7.00

%

10/2/2023

$

542,625

542,625

985,406

0.69

%

B/F

SellerX Germany Gmbh & Co. Kg (Germany)

First Lien Delayed Draw Term Loan

LIBOR(Q)

1.00

%

8.00

%

9.01

%

11/23/2025

$

953,996

931,159

903,996

0.63

%

B/F

Whele, LLC (Perch)

First Lien Incremental Term Loan

LIBOR(M)

1.00

%

7.50

%

8.50

%

10/15/2025

$

2,815,986

2,836,750

2,813,170

1.97

%

F

11,415,116

11,789,895

8.27

%

Diversified Financial Services

2-10 Holdco, Inc.

First Lien Term Loan

LIBOR(Q)

0.75

%

6.00

%

6.75

%

3/26/2026

$

2,636,497

2,609,351

2,616,460

1.84

%

F

2-10 Holdco, Inc.

Sr Secured Revolver

LIBOR(Q)

0.75

%

6.00

%

6.75

%

3/26/2026

$

-

-

(725

)

0.00

%

E/F

GC Agile Holdings Limited (Apex) (United Kingdom)

Second Lien Term Loan

LIBOR(Q)

0.50

%

6.75

%

7.76

%

6/15/2026

$

1,250,000

1,238,365

1,233,500

0.87

%

B/F

Oasis Financial, LLC

Second Lien Term Loan

LIBOR(M)

1.00

%

8.50

%

9.50

%

7/5/2026

$

2,723,829

2,680,056

2,677,523

1.88

%

F

Wharf Street Rating Acquisition LLC (KBRA)

First Lien Term Loan

LIBOR(Q)

0.75

%

6.00

%

6.75

%

12/10/2027

$

2,650,211

2,599,615

2,592,966

1.82

%

F

Wharf Street Rating Acquisition LLC (KBRA)

Sr Secured Revolver

LIBOR(Q)

0.75

%

6.00

%

6.75

%

12/10/2027

$

-

(5,043

)

(5,739

)

0.00

%

E/F

Worldremit Group Limited (United Kingdom)

First Lien Term Loan (3.0% Exit Fee)

LIBOR(Q)

1.00

%

9.25

%

10.25

%

2/11/2025

$

4,000,000

3,938,582

3,904,000

2.74

%

B/F/I

13,060,926

13,017,986

9.15

%

Issuer

Instrument

Ref

Floor

Spread

Total

Coupon

Maturity

Principal

Cost

Fair

Value

% of Total

Cash and

Investments

Notes

Debt Investments (Continued)

Diversified Telecommunication Services

MetroNet Systems Holdings, LLC

Second Lien Term Loan

LIBOR(M)

0.75

%

7.00

%

7.75

%

6/2/2029

$

561,180

$

553,493

$

563,593

0.40

%

F

MetroNet Systems Holdings, LLC

Second Lien Delayed Draw Term Loan

LIBOR(M)

0.75

%

7.00

%

7.75

%

6/2/2029

$

1,155,370

1,134,234

1,160,338

0.81

%

F

1,687,727

1,723,931

1.21

%

Health Care Equipment & Supplies

Touchstone Acquisition, Inc. (Team Technologies)

First Lien Term Loan

LIBOR(Q)

0.75

%

6.00

%

6.75

%

12/29/2028

$

1,806,660

1,771,399

1,768,901

1.24

%

F

Health Care Providers & Services

CBI-Gator Acquisition, LLC

First Lien Term Loan

LIBOR(Q)

0.75

%

5.75

%

6.75

%

10/25/2027

$

1,783,263

1,749,937

1,736,900

1.22

%

F

CBI-Gator Acquisition, LLC

First Lien Delayed Draw Term Loan

LIBOR(Q)

0.75

%

5.75

%

6.75

%

10/25/2027

$

-