Company Quick10K Filing
Alcentra Capital
10-Q 2019-09-30 Filed 2019-11-06
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-06
10-K 2018-12-31 Filed 2019-03-12
10-Q 2018-09-30 Filed 2018-11-06
10-Q 2018-06-30 Filed 2018-08-07
10-Q 2018-03-31 Filed 2018-05-07
10-K 2017-12-31 Filed 2018-03-14
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-03-10
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-03-09
10-Q 2015-09-30 Filed 2015-11-10
10-Q 2015-06-30 Filed 2015-08-11
10-Q 2015-03-31 Filed 2015-05-12
10-K 2014-12-31 Filed 2015-03-18
10-Q 2014-09-30 Filed 2014-11-10
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-06-19
8-K 2020-01-31
8-K 2020-01-29
8-K 2020-01-07
8-K 2019-11-30
8-K 2019-11-05
8-K 2019-10-14
8-K 2019-08-12
8-K 2019-04-04
8-K 2019-03-11
8-K 2019-01-14
8-K 2018-12-11
8-K 2018-09-21
8-K 2018-09-16
8-K 2018-06-26
8-K 2018-06-19
8-K 2018-05-04
8-K 2018-01-04

ABDC 10Q Quarterly Report

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward - Looking Statements
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 tm1921757d1_ex31-1.htm
EX-31.2 tm1921757d1_ex31-2.htm
EX-32.1 tm1921757d1_ex32-1.htm
EX-32.2 tm1921757d1_ex32-2.htm

Alcentra Capital Earnings 2019-09-30

Balance SheetIncome StatementCash Flow

10-Q 1 tm1921757d1_10q.htm FORM 10-Q

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

  x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2019

 

OR

 

  ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

COMMISSION FILE NUMBER: 814-01064

 

ALCENTRA CAPITAL CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland 46-2961489

(State or other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

200 Park Avenue, 7 th Floor  
New York, NY 10166
(Address of Principal Executive Offices) (Zip Code)

 

(212) 922-8240

(Registrant’s Telephone Number, Including Area Code)

 

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

 

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share ABDC The NASDAQ Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x     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 x
       
Non-accelerated filer ¨ Smaller reporting company ¨
       
Emerging growth company x    

 

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.  x

 

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

 

There were 12,875,566 shares of the Registrant’s common stock outstanding as of November 5, 2019.

 

 

 

 

 

ALCENTRA CAPITAL CORPORATION

TABLE OF CONTENTS

 

  Page
   
PART I. FINANCIAL INFORMATION  
   
Item 1. Financial Statements  
   
Consolidated Financial Statements of Alcentra Capital Corporation:  
   
  Consolidated Statements of Assets and Liabilities as of September 30, 2019 (unaudited) and December 31, 2018 3
   
  Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited) 4
   
  Consolidated Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited) 5
   
  Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited) 7
   
  Consolidated Schedules of Investments as of September 30, 2019 (unaudited) and December 31, 2018 8
   
  Notes to Unaudited Consolidated Financial Statements 16
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 44
   
Item 4. Controls and Procedures 45
   
PART II. OTHER INFORMATION 45
   
Item 1. Legal Proceedings 45
   
Item 1A. Risk Factors 45
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 48
   
Item 3. Defaults Upon Senior Securities 49
   
Item 4. Mine Safety Disclosures 49
   
Item 5. Other Information 49
   
Item 6. Exhibits 49
   
SIGNATURES 50

 

 

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Statements of Assets and Liabilities

 

   As of
September 30, 2019 (Unaudited)
   As of
 December 31,
2018
 
Assets          
Portfolio investments, at fair value          
Non-controlled, non-affiliated investments, at fair value (cost of $212,247,572 and $212,280,172, respectively)  $203,117,204   $205,411,779 
Non-controlled, affiliated investments, at fair value (cost of $26,683,798 and $26,385,612, respectively)   15,249,296    12,980,016 
Controlled, affiliated investments, at fair value (cost $0 and $15,212,562, respectively)       16,406,021 
Cash   4,830,119    11,049,499 
Dividends and interest receivable   1,041,343    454,883 
Receivable for investments sold   532,930    644,733 
Deferred financing costs   909,289    1,366,393 
Deferred tax asset   4,266,715    5,385,694 
Prepaid expenses and other assets   253,559    79,410 
Total Assets  $230,200,455   $253,778,428 
           
Liabilities          
Credit facility payable  $28,658,350   $28,536,441 
Notes payable (net of deferred note offering costs of $550,159 and $855,433, respectively)   54,449,841    54,144,567 
Payable for investments purchased       18,550,000 
Other accrued expenses and liabilities   90,121    535,096 
Directors’ fees payable   225,750    36,125 
Professional fees payable   1,071,304    554,173 
Interest and credit facility expense payable   1,558,563    1,069,139 
Management fee payable       765,659 
Income-based incentive fees payable   198,805    890,796 
Distributions payable   2,317,602    2,433,102 
Unearned structuring fee revenue       81,643 
Income tax liability   255,531    379,155 
Total Liabilities   88,825,867    107,975,896 
           
Commitments and Contingencies (Note 12)          
           
Net Assets          
Common stock, par value $0.001 per share (100,000,000 shares authorized, 12,875,566 and 13,105,295 shares issued and outstanding, respectively)   12,876    13,105 
Additional paid-in capital   197,118,476    198,594,662 
Distributable earnings (accumulated loss)   (55,756,764)   (52,805,235)
Total Net Assets   141,374,588    145,802,532 
Total Liabilities and Net Assets  $230,200,455   $253,778,428 
           
Net Asset Value Per Share  $10.98   $11.13 

 

See notes to unaudited consolidated financial statements

 

3

 

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Statements of Operations

 

   For the three
months ended
September 30,
2019
(Unaudited)
   For the three
months ended
September 30,
2018
 (Unaudited)
   For the nine
months ended
September 30,
2019
(Unaudited)
   For the nine
months ended
September 30,
2018
(Unaudited)
 
Investment Income:                    
From non-controlled, non-affiliated investments:                    
Interest income from portfolio investments  $5,386,714   $5,676,759   $16,946,112   $17,284,856 
Paid-in-kind interest income from portfolio investments   27,534    107,164    140,835    352,295 
Other income from portfolio investments   47,920    94,668    332,795    2,213,784 
Dividend income from portfolio investments       30,756        92,268 
From non-controlled, affiliated investments:                    
Interest income from portfolio investments   32,418    58,881    110,659    265,414 
Paid in-kind income from portfolio investments   108,583    96,816    298,186    309,946 
Other income from portfolio investments                
From controlled, affiliated investments:                    
Interest income from portfolio investments       488,036    208,538    1,470,032 
Paid in-kind income from portfolio investments                
Other income from portfolio investments           133,095     
Total investment income   5,603,169    6,553,080    18,170,220    21,988,595 
                     
Expenses:                    
Management fees   835,825    943,360    2,543,009    3,214,345 
Income-based incentive fees/(reversal of accruals)       (43,805)   (691,991)   (43,805)
Professional fees   1,411,837    362,625    2,811,452    1,095,777 
Valuation services   (70,780)   78,346    86,720    132,279 
Interest and credit facility expense   1,455,465    1,705,992    4,195,793    5,146,364 
Amortization of deferred financing costs   157,059    117,587    569,604    325,138 
Directors’ fees   213,270    87,076    587,946    300,104 
Insurance expense   93,524    57,076    240,851    169,583 
Amortization of deferred note offering costs   105,771    97,478    348,474    343,439 
Consulting fees       54,152    244,916    535,892 
Excise tax   (62,468)   29,538    327,945    394,846 
Other expenses   638,307    255,226    952,606    415,737 
Total expenses   4,777,810    3,744,651    12,217,325    12,029,699 
Waiver of management fees   (835,825)   (157,227)   (1,120,356)   (266,508)
Net expenses   3,941,985    3,587,424    11,096,969    11,763,191 
Net investment income and foreign currency transactions   1,661,184    2,965,656    7,073,251    10,225,404 
                     
Realized Gain (Loss) and Net Change in Unrealized Appreciation (Depreciation) From Portfolio Investments                    
Net realized gain (loss) on:                    
Non-controlled, non-affiliated investments       (38,921)   (111,717)   (10,162,013)
Non-controlled, affiliated investments       (12)       (10,167,529)
Controlled, affiliated investments           1,193,459     
Foreign currency transactions   109,732        175,226     
Net realized gain (loss) from portfolio investments and foreign currency transactions   109,732    (38,933)   1,256,968    (20,329,542)
Net change in unrealized appreciation (depreciation) on:                    
Non-controlled, non-affiliated investments   (742,017)   2,355,583    (2,261,975)   6,235,728 
Non-controlled, affiliated investments   573,447    (1,610,661)   1,971,094    7,601,872 
Controlled, affiliated investments           (1,193,459)   220,904 
Foreign currency translation   148,596        136,968     
Net change in unrealized appreciation (depreciation) from portfolio investments and foreign currency translation   (19,974)   744,922    (1,347,372)   14,058,504 
Benefit (Provision) for income taxes on unrealized gain (loss) on investments   3,253    (589,643)   (1,121,422)   427,585 
Net realized gain (loss) and net change in unrealized appreciation (depreciation) from portfolio investments   93,011    116,346    (1,211,826)   (5,843,453)
                     
Net Increase (Decrease) in Net Assets Resulting from Operations  $1,754,195   $3,082,002   $5,861,425   $4,381,951 
                     
Basic and diluted:                    
Net investment income per share  $0.13   $0.22   $0.55   $0.74 
Earnings (loss) per share  $0.14   $0.23   $0.45   $0.32 
Weighted Average Shares of Common Stock Outstanding   12,875,566    13,530,129    12,885,724    13,815,619 
                     

 

See notes to unaudited consolidated financial statements

 

4

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Statements of Changes in Net Assets

(Unaudited)  

 

    Common Stock                
    Shares    Par Amount    Paid in Capital in
Excess of Par
    Distributable
Earnings
    Total
Net Assets
 
Balance at June 30, 2018   13,582,751   $13,583   $202,161,682   $(52,580,521)  $149,594,744 
Increase (decrease) in net assets resulting from operations                         
Net investment income               2,965,656    2,965,656 
Net realized gain (loss) on investments and foreign currency transactions               (38,933)   (38,933)
Net change in unrealized appreciation/(depreciation) on investments and foreign currency translation               744,922    744,922 
Benefit (Provision) for income taxes on unrealized gain (loss) on investments               (589,643)   (589,643)
Shareholder distributions:                         
Repurchase of common stock   (65,517)   (66)   (413,275)       (413,341)
Distributions to shareholders               (2,449,592)   (2,449,592)
Total increase (decrease) for the three months ended September 30, 2018   (65,517)   (66)   (413,275)   632,410    219,069 
Balance at September 30, 2018   13,517,234   $13,517   $201,748,407   $(51,948,111)  $149,813,813 
Dividends declared per common share      $   $   $0.18   $0.18 
                          
Balance at December 31, 2017   14,222,945   $14,223   $206,570,701   $(48,870,749)  $157,714,175 
Increase (decrease) in net assets resulting from operations                         
Net investment income               10,225,404    10,225,404 
Net realized gain (loss) on investments and foreign currency transactions               (20,329,542)   (20,329,542)
Net change in unrealized appreciation/(depreciation) on investments and foreign currency translation               14,058,504    14,058,504 
Benefit (Provision) for income taxes on unrealized gain (loss) on investments               427,585    427,585 
Shareholder distributions:                         
Repurchase of common stock   (705,711)   (706)   (4,822,294)       (4,823,000)
Distributions to shareholders               (7,459,313)   (7,459,313)
Total increase (decrease) for the nine months ended September 30, 2018   (705,711)   (706)   (4,822,294)   (3,077,362)   (7,900,362)
Balance at September 30, 2018   13,517,234   $13,517   $201,748,407   $(51,948,111)  $149,813,813 
Dividends declared per common share      $   $   $0.54   $0.54 

 

See notes to unaudited consolidated financial statements

5

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Statements of Changes in Net Assets

(Unaudited)  

 

    Common Stock                
    Shares    Par Amount    Paid in Capital in
Excess of Par
    Distributable
Earnings
    Total
Net Assets
 
Balance at June 30, 2019   12,875,566   $12,876   $197,118,476   $(55,193,357)  $141,937,995 
Increase (decrease) in net assets resulting from operations                         
Net investment income               1,661,184    1,661,184 
Net realized gain (loss) on investments and foreign currency transactions               109,732    109,732 
Net change in unrealized appreciation/(depreciation) on investments and foreign currency translation               (19,974)   (19,974)
Benefit (Provision) for income taxes on unrealized gain (loss) on investments               3,253    3,253 
Shareholder distributions:                         
Repurchase of common stock                    
Distributions to shareholders               (2,317,602)   (2,317,602)
Total increase (decrease) for the three months ended September 30, 2019               (563,407)   (563,407)
Balance at September 30, 2019   12,875,566   $12,876   $197,118,476   $(55,756,764)  $141,374,588 
Dividends declared per common share      $   $   $0.18   $0.18 
                          
Balance at December 31, 2018   13,105,295   $13,105   $198,594,662   $(52,805,235)  $145,802,532 
Increase (decrease) in net assets resulting from operations                         
Net investment income               7,073,251    7,073,251 
Net realized gain (loss) on investments and foreign currency transactions               1,256,968    1,256,968 
Net change in unrealized appreciation/(depreciation) on investments and foreign currency translation               (1,347,372)   (1,347,372)
Benefit (Provision) for income taxes on unrealized gain (loss) on investments               (1,121,422)   (1,121,422)
Shareholder distributions:                         
Repurchase of common stock   (229,729)   (229)   (1,476,186)       (1,476,415)
Distributions to shareholders               (8,812,954)   (8,812,954)
Total increase (decrease) for the nine months ended September 30, 2019   (229,729)   (229)   (1,476,186)   (2,951,529)   (4,427,944)
Balance at September 30, 2019   12,875,566   $12,876   $197,118,476   $(55,756,764)  $141,374,588 
Dividends declared per common share      $   $   $0.69   $0.69 

 

See notes to unaudited consolidated financial statements

 

6

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Statements of Cash Flows

 

   For the nine months
ended September
30, 2019
(Unaudited)
   For the nine months
ended September
30, 2018
(Unaudited)
 
Cash Flows from Operating Activities          
Net increase/(decrease) in net assets resulting from operations  $5,861,425   $4,381,951 
           
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 from portfolio investments   (1,081,742)   20,329,542 
Net change in unrealized (appreciation) depreciation of portfolio investments   1,484,340    (14,058,504)
Deferred tax asset   1,118,979    (430,507)
Paid in-kind interest income from portfolio investments   (439,021)   (662,241)
Accretion of discount on debt securities   (1,120,276)   (481,690)
Purchases of portfolio investments   (61,229,802)   (50,049,494)
Net proceeds from sales/return of capital of portfolio investments   78,817,817    83,839,981 
Amortization of deferred financing costs   569,604    325,138 
Amortization of deferred note offering costs   348,474    343,439 
(Increase) decrease in operating assets:          
Dividends and interest receivable   (586,460)   541,594 
Receivable for investments sold   111,803    25,000 
Income tax asset       133,627 
Prepaid expenses and other assets   (174,149)   (64,981)
Increase (decrease) in operating liabilities:          
Payable for investments purchased   (18,550,000)    
Other accrued expenses and liabilities   (444,975)   (76,145)
Directors' fees payable   189,625    9,583 
Professional fees payable   517,131    (229,950)
Interest and credit facility expense payable   489,424    93,737 
Management fee payable   (765,659)   447,802 
Income-based incentive fees payable   (691,991)   (43,805)
Unearned structuring fee revenue   (81,643)   (450,633)
Income tax liability   (123,624)    
Net cash provided by (used in) operating activities   4,219,280    43,923,444 
           
Cash Flows from Financing Activities          
Financing costs paid   (112,500)   (1,332,500)
Offering costs paid   (43,200)   (42,000)
Proceeds from credit facility payable   54,805,298    26,253,872 
Repayments of credit facility payable   (54,820,357)   (61,500,000)
Distributions paid to shareholders   (8,928,454)   (8,571,027)
Repurchase of common stock   (1,476,415)   (4,823,000)
Net cash provided by (used in) financing activities   (10,575,628)   (50,014,655)
Effect of exchange rate changes on cash denominated in foreign currency   136,968     
Increase (decrease) in cash and cash equivalents   (6,219,380)   (6,091,211)
Cash at beginning of period   11,049,499    13,882,956 
Cash and Cash Equivalents at End of Period  $4,830,119   $7,791,745 
           
Supplemental and non-cash financing activities:          
Cash paid during the period for interest  $3,706,369   $5,052,627 
Accrued offering costs  $2,485   $2,485 
Accrued distributions payable  $2,317,602   $2,449,591 

 

See notes to unaudited consolidated financial statements

 

7

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments

As of September 30, 2019

(Unaudited)

 

Company(+) ***  Industry  Spread
Above
Index
  Base Rate
Floor
   Interest Rate   Maturity Date  No. Shares/
Principal
Amount
   Cost(1)   Fair Value   % of Net
Assets
 
Investments in Non-Controlled, Non-Affiliated Portfolio Companies — 143.67%       
 
Senior Secured - First Lien — 94.73%       
 
Aegis Sciences Corporation (2),(3)  Consumer Services  LIBOR + 5.50%   1.00%   7.68%  5/9/2025   7,422,519   $7,267,806   $7,107,062    5.03%
Black Diamond Oilfield Rentals, LLC (2),(4)  Oil & Gas Services  LIBOR + 6.50%   1.00%   8.82%  12/17/2020   10,670,863    10,670,863    10,670,863    7.55%
Cambium Learning Group, Inc. (2),(4)  Technology & Telecom  LIBOR + 4.50%        6.61%  12/18/2025   1,980,025    1,891,006    1,953,000    1.38%
CGGR Operations Holdings Corporation (2),(4),(5)  Business Services  LIBOR + 7.00%   1.00%   9.32%  9/30/2022   3,081,471    3,062,949    3,081,471    2.18%
Clanwilliam Group Ltd. (2),(4),(6)  Technology & Telecom  Euribor + 7.00%        7.00%  11/8/2025  5,922,000    6,576,416    6,456,163    4.57%
Digital Room Holdings, Inc. (2),(4)  Business Services  LIBOR + 5.00%        7.11%  5/21/2026   6,982,500    6,882,449    6,883,000    4.87%
Envocore Holding, LLC (2),(4),(7)  Industrial Services  LIBOR + 10.25%   1.00%   12.57%  6/30/2022   17,694,444    17,659,366    16,102,000    11.39%
Epic Healthcare Staffing Intermediate Holdco, LLC (2),(4),(6),(8)  Business Services  LIBOR + 8.25%   1.00%   10.57%  10/19/2022   10,771,646    10,741,574    10,771,646    7.62%
GGC Aperio Holdings, L.P. (2),(4)  Financial Services  LIBOR + 5.00%        7.33%  10/26/2024   8,470,000    8,082,826    8,470,000    5.99%
Healthcare Associates of Texas, LLC (2),(4),(6)  Healthcare Services  LIBOR + 8.25%   1.00%   10.57%  11/8/2022   20,319,475    20,319,474    19,797,088    14.00%
Impact Group, LLC (2),(4)  Consumer Services  LIBOR + 6.50%   1.00%   8.83%  6/27/2023   13,868,647    13,824,033    13,371,481    9.46%
Institutional Shareholder Services, Inc. (2),(4)  Business Services  LIBOR + 4.50%        6.83%  3/5/2026   2,985,000    2,957,446    2,957,000    2.09%
Manna Pro Products, LLC (2),(4),(6)  Consumer Services  LIBOR + 6.00%   1.00%   8.11%  12/8/2023   7,386,039    7,315,460    7,310,000    5.16%
Palmetto Moon LLC (4)  Retail  11.5% Cash, 2.5% PIK        14.00%  10/31/2021   4,356,153    4,343,106    4,225,000    2.99%
Perforce Software Inc. (2),(3)  High Tech Industries  LIBOR + 4.50%        6.61%  7/1/2026   5,000,000    4,975,844    4,995,000    3.53%
Pinstripe Holdings, LLC (2),(4)  Business Services  LIBOR + 6.00%   1.00%   8.12%  1/17/2025   9,950,000    9,772,785    9,778,000    6.92%
Total Senior Secured - First Lien                        136,343,403    133,928,774    94.73%
Senior Secured - Second Lien — 46.27%                                    
                                        
BayMark Health Services, Inc. (2),(4),(6)  Healthcare Services  LIBOR + 8.25%   1.00%   10.21%  3/1/2025   8,000,000   $7,897,541   $8,000,000    5.66%

 

 

See notes to unaudited consolidated financial statements

 

8

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments (continued)

As of September 30, 2019

(Unaudited)

 

Company(+) ***  Industry  Spread
Above
Index
  Base Rate
Floor
   Interest
Rate
   Maturity
Date
  No. Shares/
Principal
Amount
   Cost(1)   Fair Value   % of Net
Assets
 
Cambium Learning Group, Inc. (2),(4)  Technology & Telecom  LIBOR + 8.50%        10.61%  12/18/2026   5,000,000   $4,716,452   $4,726,000    3.34%
CGGR Operations Holdings Corporation (2),(4),(5)  Business Services  LIBOR + 11.50%   1.00%   13.82%  9/30/2023   11,431,579    11,355,258    11,545,895    8.17%
Institutional Shareholder Services, Inc. (2),(4)  Business Services  LIBOR + 8.50%        10.83%  3/5/2027   2,000,000    1,944,135    1,944,000    1.37%
Medsurant Holdings, LLC (4)  High Tech Industries  13.00% Cash        13.00%  6/30/2020   8,729,395    8,715,273    8,729,395    6.17%
Perforce Software Inc. (2),(4)  High Tech Industries  LIBOR + 8.00%        10.10%  7/1/2027   5,000,000    4,854,716    4,952,000    3.50%
Pharmalogic Holdings Corp. (2),(4)  Healthcare Services  LIBOR + 8.00%        10.11%  12/11/2023   16,100,000    16,038,335    16,100,000    11.39%
Sandvine Corporation (2),(4)  Telecommunications  LIBOR + 8.00%        10.11%  11/2/2026   4,500,000    4,416,909    4,420,000    3.13%
WeddingWire, Inc. (2),(4)  Consumer Services  LIBOR + 8.25%        10.36%  12/21/2026   5,000,000    4,953,109    5,000,000    3.54%
Total Senior Secured - Second Lien                        64,891,728    65,417,290    46.27%
CLO/Structured Credit — 1.27%                                    
                                        
Goldentree Loan Management US CLO 2 Ltd. (2),(3)  USD CLO  LIBOR + 4.70%        7.06%  11/28/2030   2,000,000   $1,950,823   $1,793,140    1.27%
Total CLO/Structured Credit                        1,950,823    1,793,140    1.27%
Equity/Other — 1.40%                                       
                                        
Envocore Holding, LLC, Preferred Shares(4),(7),(9)  Industrial Services                   1,139,725   $1,160,360   $     
IGT, Preferred Shares(4),(9)  Industrial Services  11% PIK        11.00%  12/10/2024   1,110,922    1,110,922         
Common Shares(4),(9)                      44,000    44,000         
Preferred AA Shares(4),(9)     15% PIK        15.00%  12/10/2024   326,789    326,790    271,000    0.19%
                            1,481,712    271,000    0.19%
Metal Powder Products, LLC, Common Shares(4),(9)  Industrial Manufacturing                   500,000    500,000    602,000    0.43%
My Alarm Center, LLC, Common Shares(4),(9)  Security                   129,582    256,793         
Junior Preferred Shares(4),(9)                      2,420    2,366,549         

 

 

See notes to unaudited consolidated financial statements

 

9

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments (continued)

As of September 30, 2019

(Unaudited) 

 

Company(+) ***  Industry  Spread
Above
Index
  Base Rate
Floor
   Interest
Rate
   Maturity
Date
  No. Shares/
Principal
Amount
   Cost(1)   Fair Value   % of Net
Assets
 
Senior Preferred Shares(4),(9)     8% PIK       8.00%  7/14/2022   2,998   $2,862,059   $1,024,000    0.72%
                            5,485,401    1,024,000    0.72%
Palmetto Moon LLC, Common Shares(4),(9)  Retail                  61    434,145    81,000    0.06%
Total Equity/Other                           9,061,618    1,978,000    1.40%
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies                  212,247,572    203,117,204    143.67%
Investments in Non-Controlled, Affiliated Portfolio Companies — 10.79%*                             
                                        
Senior Subordinated — 0.87%                                    
                                        
Battery Solutions, Inc. (4)  Environmental/Recycling Services  12% Cash, 2% PIK       14.00%  11/6/2021   1,231,291   $1,231,291   $1,231,292    0.87%
Southern Technical Institute, Inc. (4),(9)  Education  6% PIK        6.00%  12/31/2021   3,528,988    3,528,988         
Total Senior Subordinated                        4,760,279    1,231,292    0.87%
Equity/Other — 9.92%                                       
                                        
Battery Solutions, Inc.,
Class A Units(4),(9),(10)
  Environmental/Recycling Services                   5,000,000   $1,058,000   $     
Class E Units(4)     8% PIK        8.00%  11/6/2021   4,766,685    4,766,685    4,067,003    2.88%
Class F Units(4),(9)                      3,333,333             
                            5,824,685    4,067,003    2.88%
Conisus, LLC, Common Shares(4),(9)  Media: Advertising, Printing & Publishing                   4,914,556             
Preferred Equity(4)     12% PIK        12.00%      12,677,834    12,677,834    9,119,001    6.45%
                            12,677,834    9,119,001    6.45%
Southern Technical Institute, Inc.,
Class A Units(4),(9)
  Education                   3,164,063    2,167,000         
Class A1 Units(4),(9),(11)                      6,000,000             
                            2,167,000         
Xpress Global Systems, LLC, Class B Units (4),(9)  Transportation Logistics                   12,544    1,254,000    832,000    0.59%
Total Equity/Other                           21,923,519    14,018,004    9.92%
Total Investments in Non-Controlled, Affiliated Portfolio Companies                    26,683,798    15,249,296    10.79%
Total Investments                           238,931,370    218,366,500    154.46%
Liabilities In Excess Of Other Assets                          (76,991,912)   (54.46%)
Net Assets                               $141,374,588    100.00%

 

See notes to unaudited consolidated financial statements

 

10

 

 

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments (continued)

As of September 30, 2019

(Unaudited)

 

(+) All investments are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), with the exception of the Company’s investments in Goldentree Loan Management US CLO 2 Ltd., Clanwilliam Group Ltd., and CGGR Operations Holdings Corporation. As of September 30, 2019, non-qualifying assets represented 10.5% of the Company’s total assets, at fair value.
*

Denotes investments in connection with which the Company is deemed to be an “Affiliated Person” under the 1940 Act because it owns 5% or more of the portfolio company’s outstanding voting securities. Transactions as of and during the nine months ended September 30, 2019 in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to Control) are as follows:

 

       Gross       Change in             
   Fair Value at   Additions/       Unrealized       Fair Value at   Interest/ 
   December 31,   (Gross   Transfers   Appreciation   Realized   September 30   Dividend/ 
Name of Issuers  2018   Reductions)   In/Out   (Depreciation)   Gain (Loss)   2019   Other Income 
Battery Solutions, Inc.  $5,699,791   $298,186   $           -   $(699,682)  $              -   $5,298,295   $408,845 
Conisus, LLC   6,554,225    -    -    2,564,776    -    9,119,001    - 
Southern Technical Institute, Inc.   -    -    -    -    -    -    - 
Xpress Global Systems, LLC   726,000    -    -    106,000    -    832,000    - 
   $12,980,016   $298,186   $-   $1,971,094   $-   $15,249,296   $408,845 

 

**

As of September 30, 2019, the Company was not deemed, under the 1940 Act, to "Control" any of its portfolio companies due to owning more than 25% of any such portfolio company's outstanding voting securities or because the Company had the power to exercise control over the management or policies of such portfolio company (including through a management agreement). Transactions during the nine months ended September 30, 2019 in which the issuer was deemed to be Controlled by the Company are as follows:

 

       Gross       Change in             
   Fair Value at   Additions/       Unrealized       Fair Value at   Interest/ 
   December 31,   (Gross   Transfers   Appreciation   Realized   September 30   Dividend/ 
Name of Issuers  2018   Reductions)   In/Out   (Depreciation)   Gain (Loss)   2019   Other Income 
FST Technical Services, LLC(a)  $16,406,021   $(16,406,021)  $            -   $(1,193,459)  $1,193,459   $                 -   $341,633 
   $16,406,021   $(16,406,021)  $-   $(1,193,459)  $1,193,459   $-   $341,633 

 

(a) FST Technical Services, LLC was sold on February 8, 2019.

 

*** Pledged as collateral under the Credit Facility with ING Capital LLC.
(1) The cost of debt securities is adjusted for accretion of discount/amortization of premium and interest paid-in-kind on such securities.
(2) The principal balance outstanding for all floating rate loans is indexed to LIBOR, Euribor or an alternate base rate (e.g., prime rate), which typically resets semi-annually, quarterly, or monthly at the borrower's option. The borrower may also elect to have multiple interest reset periods for each loan. For each of these loans, the Company has provided the applicable margin over LIBOR based on each respective credit agreement.
(3) Security is classified as Level 2 in the Company’s fair value hierarchy (see Note 3).
(4) Security is classified as Level 3 in the Company’s fair value hierarchy (see Note 3).
(5) CGGR Holdings’ Tranche B Loan was reclassified to a second lien investment as a result of a sale of a portion of the Tranche A Loan to an unaffiliated third party.
(6) The investment has an unfunded commitment as of September 30, 2019 which is excluded from the presentation (see Note 12).
(7) The investment was formerly known as LRI Holding, Inc. and Integrated Efficiency Solutions, Inc. On March 16, 2018, the name was changed to Envocore Holding, LLC.
(8) The investment was formerly known as Cirrus Medical Staffing, Inc. On May 25, 2018, the name was changed to Epic Healthcare Staffing Intermediate Holdco, LLC.
(9) Non-income producing security.
(10) The Company has represented its ownership in Class A units in 919 BSI SPV, LLC (70.7% of that entity), which in turn owns 70,700 Class A Shares of Battery Solutions, LLC (representing 18.16% of ownership of Battery Solutions, LLC).
(11) Class A1 units of 1,764,720 are subject to a deferred purchase agreement equal to 95% of future proceeds less $1.00.

 

Abbreviation Legend
LIBOR - London Inter-bank Offered Rate
PIK - Payment-In-Kind

 

See notes to unaudited consolidated financial statements

 

11

 

   

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments

As of December 31, 2018

 

Company(+)***  Industry  Spread
Above
Index
  Base Rate
Floor
   Interest
Rate
   Maturity
Date
  No. Shares/
Principal
Amount
   Cost(1)   Fair Value   % of Net
Assets
 
Investments in Non-Controlled, Non-Affiliated Portfolio Companies — 140.89%
Senior Secured – First Lien — 106.14%                              
Black Diamond Oilfield Rentals, LLC(2),(3),(15)  Oil & Gas Services  LIBOR +
6.50%
   1.00%   8.90%  12/17/2020   11,385,109   $11,385,109   $11,382,254    7.81%
Cambium Learning Group,
Inc.(3),(10)
  Technology &
Telecom
  LIBOR +
4.50%
        7.31%  12/18/2025   4,000,000    3,800,000    3,800,000    2.61%
CGGR Operations Holdings Corporation(2),(3),(8)  Business Services  LIBOR +
11.5%
   1.00%   13.90%  9/30/2023   13,431,579    13,324,053    13,431,579    9.21%
      LIBOR +
7.0%
   1.00%   9.40%  9/30/2022   9,468,421    9,397,345    9,468,421    6.49%
                            22,721,398    22,900,000    15.70%
Champion ONE(2),(3)  Technology &
Telecom
  LIBOR +
10.5%
   1.00%   12.90%  3/17/2022   5,884,230    5,842,683    5,884,230    4.04%
Clanwilliam Group Ltd.(2),(3),(8)  Technology &
Telecom
  Euribor +
7.00%
        7.00%  11/8/2025  5,724,000    6,344,310    6,347,088    4.35%
Envocore Holding, LLC(2),(3),(7)  Industrial Services  LIBOR +
9.25%
   1.00%   11.65%  6/30/2022   18,500,000    18,453,344    18,500,000    12.69%
Epic Healthcare Staffing Intermediate Holdco, LLC(2),(3),(8),(9)  Business Services  LIBOR +
8.25%
   1.00%   10.65%  10/19/2022   13,430,114    13,392,406    13,430,114    9.21%
Healthcare Associates of Texas, LLC(2),(3),(8)  Healthcare Services  LIBOR +
8.0%
   1.00%   10.40%  11/8/2022   20,578,816    20,578,816    20,578,816    14.11%
Impact Group, LLC(2),(3)  Consumer Services  LIBOR +
6.50%
   1.00%   9.21%  6/27/2023   19,965,214    19,965,214    19,965,214    13.69%
Lugano Diamonds & Jewelry, Inc.(2),(3)  Retail  LIBOR +
10.00%
   0.75%   12.40%  10/24/2021   6,750,000    6,229,503    6,365,358    4.37%
Manna Pro Products,
LLC(2),(3),(8)
  Consumer Services  LIBOR +
6.0%
   1.00%   8.31%  12/8/2023   1,322,485    1,316,153    1,322,485    0.91%
Palmetto Moon LLC(2)  Retail  11.5%
Cash, 1.0%
PIK
        12.50%  10/31/2021   4,737,622    4,720,936    4,648,350    3.19%
Pinstripe Holdings, LLC(2),(3)  Business Services  LIBOR +
6.00%
        8.81%  1/17/2025   10,000,000    9,800,000    9,800,000    6.72%
Superior Controls, Inc.(2),(3),(8)  Wholesale/
Distribution
  LIBOR +
7.25%
   1.00%   9.65%  3/22/2021   9,825,000    9,789,394    9,825,000    6.74%
Total Senior Secured – First Lien                       154,339,266    154,748,909    106.14%
Senior Secured – Second Lien — 29.18%                                 
BayMark Health Services,
Inc.(2),(3)
  Healthcare Services  LIBOR +
8.25%
   1.00%   10.60%  3/1/2025   7,000,000    6,938,172    7,000,000    4.80%
Medsurant Holdings, LLC(2)  High Tech Industries  13.00% Cash        13.00%  6/30/2020   8,729,396    8,701,223    8,729,396    5.99%
Pharmalogic Holdings
Corp.(2),(3),(8)
  Healthcare Services  LIBOR +
8.0%
        10.34%  12/11/2023   11,340,000    11,267,485    11,340,000    7.77%
Sandvine Corporation(2),(3)  Telecommunications  LIBOR +
8.00%
        10.35%  11/2/2026   4,500,000    4,410,000    4,410,000    3.02%
VVC Holding Corp.(2),(3),(5)  Healthcare Services  LIBOR +
8.13%
   1.00%   10.56%  7/9/2026   6,000,000    5,943,433    6,120,000    4.20%
WeddingWire, Inc.(2),(3)  Consumer Services  LIBOR +
8.25%
        11.06%  12/21/2026   5,000,000    4,950,000    4,950,000    3.40%
Total Senior Secured – Second Lien                     42,210,313    42,549,396    29.18%
CLO/Structured Credit — 1.20%                                   
Goldentree Loan Management US
CLO 2 Ltd.(3),(10)
  USD CLO  LIBOR +
4.70%
        7.06%  11/28/2030   2,000,000   $1,948,058   $1,739,600    1.20%
Total CLO/Structured Credit                       1,948,058    1,739,600    1.20%

 

See notes to consolidated financial statements

 

12

 

  

Alcentra Capital Corporation and Subsidiary

Consolidated Schedule of Investments (continued)

As of December 31, 2018

Company(+)***  Industry  Spread
Above
Index
  Base Rate
Floor
   Interest
Rate
   Maturity
Date
   No. Shares/
Principal
Amount
   Cost(1)   Fair Value   % of Net
Assets
 
Equity/Other — 4.37%                                      
Champion ONE, Common Shares(2),(4)  Technology &
Telecom
                11,250   $1,125,000   $908,410    0.62%
Envocore Holding, LLC, Preferred
Shares(2),(4),(6),(7)
  Industrial Services                     1,139,725    1,160,360    788,000    0.54%
IGT, Preferred Shares(2),(4)  Industrial Services  11% PIK        11.00%   12/10/2024    1,110,922    1,110,922         
Common Shares(2),(4)                        44,000    44,000         
Preferred AA Shares(2),(4)     15% PIK        15.00%   12/10/2024    326,789    326,789    271,789    0.19%
                              1,481,711    271,789    0.19%
Lugano Diamonds & Jewelry, Inc.,
Warrants(2),(4)
  Retail                     666,615    666,615    1,000,000    0.69%
Metal Powder Products, LLC, Common Shares(2),(4)  Industrial
Manufacturing
                     500,000    500,000    666,047    0.46%
My Alarm Center, LLC, Common
Shares(2),(4)
  Security                     129,582    256,793         
Junior Preferred Shares(2),(4)                        2,420    2,366,549         
Senior Preferred Shares(2),(4)     8% PIK        8.00%   7/14/2022    2,998    2,862,059    1,023,999    0.70%
                              5,485,401    1,023,999    0.70%
Palmetto Moon LLC, Common Shares(2),(4)  Retail                     61    434,145    106,000    0.07%
Superior Controls, Inc., Preferred Shares(2),(4)  Wholesale/
Distribution
                     400,000    400,000    789,192    0.54%
Tunnel Hill, Class B Common Units(2),(4),(11),(14)  Waste Services