UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 10-Q

 

 

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

 

 

For the Quarter Ended March 31, 2025

 

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

 

Commission File Number: 814-01508

 

 

REDWOOD ENHANCED INCOME CORP.

(Exact Name of Registrant as Specified in Charter)

 

 

Maryland	88-0824777
(State or Other Jurisdiction of Incorporation)	(IRS Employer Identification No.)
250 West 55th Street, 26th Floor
New York, NY	10019
(Address of Principal Executive Offices)	(Zip Code)

 

(212) 970‑1400

(Registrant’s telephone number, including area code)

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

 

 

None		Not applicable		Not applicable
(Title of each class)		(Trading Symbol(s) )		(Name of each exchange where registered)

 

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes ☐ No ☒

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

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

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

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller Reporting company	☐
Emerging growth company	☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

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

As of March 31, 2025, there was no established public market for the Registrant’s shares of common stock.

The number of the Registrant’s shares of common stock outstanding on May 14, 2025 was 17,009,499.

 

REDWOOD ENHANCED INCOME CORP.

FORM 10‑Q

TABLE OF CONTENTS

 

Part I.	Financial Information
Item 1.	Financial Statements
	Statements of Assets and Liabilities as of March 31, 2025 (Unaudited) and December 31, 2024	3
	Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited)	4
	Statements of Changes in Net Assets for the three months ended March 31, 2025 and 2024 (Unaudited)	5
	Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)	6
	Schedules of Investments as of March 31, 2025 (Unaudited) and December 31, 2024	7
	Notes to Financial Statements (Unaudited)	15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
Part II.	Other Information	49
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	50
Signatures		51

 

Redwood Enhanced Income Corp.

Statements of Assets and Liabilities

(in thousands, except shares and per share data)

 

	March 31, 2025				December 31, 2024
	(Unaudited)
Assets
Non-controlled/non-affiliated investments, at fair value (1)	$	381,210			$	362,607
Non-controlled/affiliated investments, at fair value (2)		25,262				25,536
Cash and cash equivalents		176				384
Restricted cash		80				—
Derivatives, at fair value		150				299
Receivables for investments sold		1,015				803
Interest and other receivables		5,474				7,530
Deferred debt issuance costs		295				613
Total assets	$	413,662			$	397,772
Liabilities
Debt	$	183,241			$	169,157
Incentive fees payable		388				1,337
Interest and other debt related payables		164				118
Distributions payable		6,432				10,915
Payable for investments purchased		10,124				286
Payable to broker		12				43
Management fees payable		675				477
Accrued expenses and other liabilities		414				450
Total liabilities	$	201,450			$	182,783
Commitments and contingencies (Note 8)
Net assets	$	212,212			$	214,989
Composition of net assets applicable to common shareholders
Common stock, $0.001 par value (1,000,000,000 shares authorized, 16,926,075 and 16,793,031 shares issued and outstanding, respectively)	$	17			$	17
Paid-in capital in excess of par		242,723				241,020
Distributable earnings (deficit)		(30,528	)			(26,048	)
Total net assets		212,212				214,989
Total liabilities and net assets	$	413,662			$	397,772
Shares outstanding		16,926,075				16,793,031
Net asset value per share	$	12.54			$	12.80

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The accompanying notes are an integral part of these financial statements.