Company Quick10K Filing
Quick10K
Kcap Financial
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-08-06 Earnings, Regulation FD, Exhibits
8-K 2019-07-31 Enter Agreement, Other Events, Exhibits
8-K 2019-07-10 Shareholder Vote
8-K 2019-05-09 Accountant, Exhibits
8-K 2019-04-01 Enter Agreement, Leave Agreement, Officers, Amend Bylaw, Other Events, Exhibits
8-K 2019-03-28 Other Events, Exhibits
8-K 2019-03-27 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-03-20 Other Events, Exhibits
8-K 2019-03-04 Other Events, Exhibits
8-K 2019-02-19 Shareholder Vote
8-K 2019-01-31 Earnings, Regulation FD, Exhibits
8-K 2019-01-02 Other Events, Exhibits
8-K 2018-12-31 M&A, Sale of Shares, Exhibits
8-K 2018-12-17 Other Events, Exhibits
8-K 2018-12-14 Enter Agreement, Sale of Shares, Exhibits
8-K 2018-12-12 Other Events, Exhibits
8-K 2018-12-12 Amend Bylaw, Exhibits
8-K 2018-12-04 Other Events
8-K 2018-11-09 Other Events, Exhibits
8-K 2018-11-08 Enter Agreement
8-K 2018-10-29 Earnings, Regulation FD, Exhibits
8-K 2018-10-24 Other Events, Exhibits
8-K 2018-09-18 Other Events, Exhibits
8-K 2018-06-19 Other Events, Exhibits
8-K 2018-05-03 Shareholder Vote
8-K 2018-03-29 Other Events
8-K 2018-03-20 Other Events, Exhibits
ACT Advanced Credit Technologies 1,629
ASG All Soft Gels 114
AQB Aquabounty Technologies 63
OFS OFS Capital 0
TSLX TPG Specialty Lending 0
AIQ Alliance Healthcare Services 0
PSEC Prospect Capital 0
FIF Financial Federal 0
DUSA Dusa Pharmaceuticals 0
CACG Chart Acquisition 0
KCAP 2019-06-30
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 5. 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 ptmn-ex311_9.htm
EX-31.2 ptmn-ex312_8.htm
EX-32.1 ptmn-ex321_6.htm
EX-32.2 ptmn-ex322_7.htm

Kcap Financial Earnings 2019-06-30

KCAP 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 ptmn-10q_20190630.htm 10-Q ptmn-10q_20190630.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

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

For the quarterly period ended June 30, 2019

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

For the transition period from          to

Commission File No. 814-00735

Portman Ridge Finance Corporation

(Exact name of Registrant as specified in its charter)

 

 

Delaware

 

20-5951150

(State or other jurisdiction of

Incorporation or organization)

 

(I.R.S. Employer

Identification Number)

650 Madison Avenue, 23rd Floor

New York, New York 10022

(Address of principal executive offices)

(212) 891-2880

(Registrant's telephone number, including area code)

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: (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 any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

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

 

The number of outstanding shares of common stock of the registrant as of August 2, 2019 was 37,356,061.

 

 

 

 


TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

Part I. Financial Information

 

 

 

 

Item 1.

Consolidated Financial Statements

 

 

 

 

 

Consolidated Balance Sheets as of June 30, 2019 (unaudited) and December 31, 2018

5

 

 

 

 

Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2019 and 2018

6

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) for the three and six months ended June 30, 2019 and 2018

7

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2019 and 2018

8

 

 

 

 

Consolidated Schedule of Investments as of June 30, 2019 (unaudited) and December 31, 2018

9

 

 

 

 

Consolidated Financial Highlights (unaudited) for the six months ended June 30, 2019 and 2018

25

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

26

 

 

 

Item 2.

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

68

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

95

 

 

 

Item 4.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

96

 

 

 

Item 5.

Controls and Procedures

97

 

 

 

 

Part II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

98

 

 

 

Item 1A.

Risk Factors

98

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

98

 

 

 

Item 3.

Defaults Upon Senior Securities

98

 

 

 

Item 4.

Mine Safety Disclosures

98

 

 

 

Item 5.

Other Information

98

 

 

 

Item 6.

Exhibits

98

 

 

 

Signatures

 

100

 

2


NOTE ABOUT REFERENCES TO PORTMAN RIDGE FINANCE CORPORATION

In this Quarterly Report on Form 10-Q, the “Company”, “Portman Ridge”, “we”, “us” and “our” refer to Portman Ridge Finance Corporation and its wholly-owned subsidiaries, Great Lakes KCAP Funding I LLC, Kohlberg Capital Funding I LLC, KCAP Senior Funding I, LLC and KCAP Senior Funding I Holdings, LLC, unless the context otherwise requires.

NOTE ABOUT FORWARD-LOOKING STATEMENTS

The information contained in this item should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report and in conjunction with the financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2018, as filed with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”). In addition, some of the statements in this report constitute forward-looking statements. The matters discussed in this Quarterly Report, as well as in future oral and written statements by management of Portman Ridge Finance Corporation, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook, ”believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Important assumptions include our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital, and the ability to maintain certain debt to asset ratios. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report should not be regarded as a representation by us that our plans or objectives will be achieved. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

 

our future operating results;

 

our business prospects and the prospects of our existing and prospective portfolio companies;

 

the return or impact of current and future investments;

 

our contractual arrangements and other relationships with third parties;

 

the dependence of our future success on the general economy and its impact on the industries in which we invest;

 

the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives;

 

our expected financings and investments;

 

our regulatory structure and tax treatment;

 

our ability to operate as a business development company (“BDC”) and a regulated investment company (“RIC”), including the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies;

3


 

the adequacy of our cash resources and working capital;

 

the timing of cash flows, if any, from the operations of our portfolio companies;

 

the ability of Sierra Crest Investment Management LLC (the “Adviser”) to locate suitable investments for us to monitor and administer our investments;

 

the ability of the Adviser to attract and retain highly talented professionals;

 

actual and potential conflicts of interest with the Adviser and its affiliates;

 

our ability to qualify and maintain our qualification as a RIC under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and as a BDC;

 

the effect of legal, tax, and regulatory changes;

 

the impact of a protracted decline in the liquidity of credit markets on our business;

 

the impact of fluctuations in interest rates on our business;

 

the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

 

our ability to recover unrealized losses;

 

market conditions and our ability to access additional capital; and

 

the timing, form and amount of any dividend distributions.

For a more detailed discussion of factors that could cause our actual results to differ from forward-looking statements contained in this Quarterly Report, please see the discussion in Part II, “Item 1A. Risk Factors”, and in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. You should not place undue reliance on these forward-looking statements. The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date this Quarterly Report is filed with the SEC.

4


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

2019

 

 

December 31,

2018

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investments at fair value:

 

 

 

 

 

 

 

 

Short-term investments (cost: 2019 - $27,443,091; 2018 - $44,756,478)

 

$

27,443,091

 

 

$

44,756,478

 

Debt securities (amortized cost: 2019 - $185,518,733; 2018 - $162,264,482)

 

 

175,321,765

 

 

 

147,861,744

 

CLO Fund Securities managed by affiliates (amortized cost: 2019 - $46,522,911; 2018 - $4,407,106)

 

 

37,667,754

 

 

 

4,473,840

 

CLO Fund Securities managed by non-affiliates (amortized cost: 2019 - $2,777,759; 2018 - $51,073,520)

 

 

2,338,727

 

 

 

39,851,160

 

Equity securities (cost: 2019 - $16,482,841; 2018 - $9,477,763)

 

 

4,143,686

 

 

 

2,038,020

 

Asset Manager Affiliates (cost: 2019 - $17,791,230; 2018 - $17,791,230)

 

 

 

 

 

3,470,000

 

Joint Ventures (cost: 2019 - $42,611,525; 2018 - $37,381,525)

 

 

40,089,257

 

 

 

30,857,107

 

Total Investments at Fair Value (cost: 2019 - $339,148,090; 2018 - $327,152,104)

 

 

287,004,280

 

 

 

273,308,349

 

Cash

 

 

236,828

 

 

 

5,417,125

 

Restricted cash

 

 

3,467,338

 

 

 

3,907,341

 

Interest receivable

 

 

875,396

 

 

 

1,342,970

 

Receivable for Open Trades

 

 

10,457,443

 

 

 

 

Due from affiliates

 

 

695,768

 

 

 

1,007,631

 

Operating lease right-of-use asset

 

 

1,687,901

 

 

 

 

Other assets

 

 

1,068,576

 

 

 

481,265

 

Total Assets

 

$

305,493,530

 

 

$

285,464,681

 

LIABILITIES

 

 

 

 

 

 

 

 

6.125% Notes Due 2022 (net of offering costs of: 2019-$1,933,295; 2018 - $2,207,341)

 

$

75,473,905

 

 

$

75,199,858

 

Great Lakes KCAP Funding I, LLC Revolving Credit Facility (net of offering costs of: 2019-$1,326,443; 2018 - $1,155,754)

 

 

44,032,368

 

 

 

25,200,331

 

Operating lease liability

 

 

3,415,460

 

 

 

 

Payable for open trades

 

 

38,030,859

 

 

 

23,204,564

 

Accounts payable and accrued expenses

 

 

2,162,223

 

 

 

3,591,910

 

Accrued interest payable

 

 

1,386,248

 

 

 

131,182

 

Due to affiliates

 

 

788,776

 

 

 

115,825

 

Management and incentive fees payable

 

 

1,026,100

 

 

 

 

Total Liabilities

 

 

166,315,939

 

 

 

127,443,670

 

COMMITMENTS AND CONTINGENCIES (NOTE 8)

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, par value $0.01 per share, 100,000,000 common shares authorized; 37,550,920 issued, and 37,356,061 outstanding at June 30, 2019, and 37,521,705 issued, and 37,326,846 outstanding at December 31, 2018

 

 

373,561

 

 

 

373,268

 

Capital in excess of par value

 

 

307,172,819

 

 

 

306,784,387

 

Total distributable (loss) earnings

 

 

(168,368,789

)

 

 

(149,136,644

)

Total Stockholders' Equity

 

 

139,177,591

 

 

 

158,021,011

 

Total Liabilities and Stockholders' Equity

 

$

305,493,530

 

 

$

285,464,681

 

NET ASSET VALUE PER COMMON SHARE

 

$

3.73

 

 

$

4.23

 

 

See accompanying notes to consolidated financial statements.

5


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

June 30,

 

 

Six Months Ended

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest from investments in debt securities

 

$

3,831,861

 

 

$

3,910,473

 

 

$

6,768,657

 

 

$

7,308,670

 

Payment-in-kind investment income

 

 

11,520

 

 

 

369,116

 

 

 

13,542

 

 

 

732,053

 

Interest from cash and time deposits

 

 

16,444

 

 

 

12,211

 

 

 

52,113

 

 

 

61,416

 

Investment income on CLO Fund Securities managed by affiliates

 

 

1,607,308

 

 

 

1,414,903

 

 

 

1,739,754

 

 

 

3,248,569

 

Investment income on CLO Fund Securities managed by non-affiliates

 

 

105,574

 

 

 

98,341

 

 

 

1,786,848

 

 

 

197,702

 

Dividends from Asset Manager Affiliates

 

 

 

 

 

300,000

 

 

 

 

 

 

620,000

 

Investment income - Joint Ventures

 

 

1,291,667

 

 

 

700,000

 

 

 

2,241,667

 

 

 

1,400,000

 

Capital structuring service fees

 

 

49,795

 

 

 

43,399

 

 

 

110,998

 

 

 

106,509

 

Total investment income

 

 

6,914,169

 

 

 

6,848,443

 

 

 

12,713,579

 

 

 

13,674,919

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 

1,026,100

 

 

 

 

 

 

1,026,100

 

 

 

 

Performance-based incentive fees

 

 

 

 

 

 

 

 

 

 

 

 

Interest and amortization of debt issuance costs

 

 

1,982,431

 

 

 

1,847,432

 

 

 

3,783,357

 

 

 

3,711,280

 

Compensation

 

 

 

 

 

1,005,050

 

 

 

3,688,578

 

 

 

2,212,387

 

Professional fees

 

 

514,523

 

 

 

906,965

 

 

 

2,182,645

 

 

 

1,621,375

 

Insurance

 

 

359,449

 

 

 

79,726

 

 

 

448,099

 

 

 

157,748

 

Administrative services expense

 

 

409,600

 

 

 

 

 

 

409,600

 

 

 

 

Other general and administrative expenses

 

 

311,296

 

 

 

480,351

 

 

 

1,059,615

 

 

 

982,466

 

Impairment of operating lease right-of-use asset

 

 

1,431,030

 

 

 

 

 

 

1,431,030

 

 

 

 

Total expenses

 

 

6,034,429

 

 

 

4,319,524

 

 

 

14,029,024

 

 

 

8,685,256

 

Management and performance-based incentive fees waived

 

 

 

 

 

 

 

 

 

 

 

 

Net Expenses

 

 

6,034,429

 

 

 

4,319,524

 

 

 

14,029,024

 

 

 

8,685,256

 

Net Investment (Loss) Income

 

 

879,740

 

 

 

2,528,919

 

 

 

(1,315,445

)

 

 

4,989,663

 

Realized And Unrealized (Losses) Gains On Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized (losses) gains from investment transactions

 

 

(2,270,962

)

 

 

(3,671

)

 

 

(15,620,391

)

 

 

(571

)

Net change in unrealized (depreciation) appreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

2,305,906

 

 

 

(682,477

)

 

 

4,205,770

 

 

 

(1,125,361

)

Equity securities

 

 

151,619

 

 

 

(227,169

)

 

 

(4,899,412

)

 

 

(163,573

)

CLO Fund Securities managed by affiliates

 

 

(532,566

)

 

 

(787,433

)

 

 

(615,135

)

 

 

(1,008,252

)

CLO Fund Securities managed by non-affiliates

 

 

(66,680

)

 

 

(154,059

)

 

 

2,476,572

 

 

 

195,296

 

Asset Manager Affiliates investments

 

 

 

 

 

(1,310,000

)

 

 

 

 

 

(996,000

)

Joint Venture Investments

 

 

(1,315,379

)

 

 

(675,882

)

 

 

4,002,150

 

 

 

(424,506

)

Total net change in unrealized appreciation (depreciation)

 

 

542,900

 

 

 

(3,837,020

)

 

 

5,169,945

 

 

 

(3,522,396

)

Net realized and unrealized (depreciation) appreciation on investments

 

 

(1,728,062

)

 

 

(3,840,691

)

 

 

(10,450,446

)

 

 

(3,522,967

)

Realized losses on extinguishments of Debt

 

 

 

 

 

 

 

 

 

 

 

(169,074

)

Net (Decrease) Increase In Stockholders’ Equity Resulting From Operations

 

$

(848,322

)

 

$

(1,311,772

)

 

$

(11,765,891

)

 

$

1,297,622

 

Net (Decrease) Increase In Stockholders' Equity Resulting from Operations per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

(0.02

)

 

$

(0.04

)

 

$

(0.32

)

 

$

0.03

 

Diluted:

 

$

(0.02

)

 

$

(0.03

)

 

$

(0.32

)

 

$

0.03

 

Net Investment (Loss) Income Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

0.02

 

 

$

0.07

 

 

$

(0.04

)

 

$

0.13

 

Diluted:

 

$

0.02

 

 

$

0.07

 

 

$

(0.04

)

 

$

0.13

 

Weighted Average Shares of Common Stock Outstanding—Basic

 

 

37,349,371

 

 

 

37,363,038

 

 

 

37,342,272

 

 

 

37,356,759

 

Weighted Average Shares of Common Stock Outstanding—Diluted

 

 

37,349,371

 

 

 

37,363,038

 

 

 

37,342,272

 

 

 

37,356,759

 

 

See accompanying notes to consolidated financial statements.

6


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS(1)

(unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

Operations:

 

 

 

 

 

 

 

 

Net investment (loss) income

 

$

(1,315,445

)

 

$

4,989,663

 

Net realized (losses) gains from investment transactions

 

 

(15,620,391

)

 

 

(571

)

Realized losses from extinguishments of debt

 

 

 

 

 

(169,074

)

Net change in unrealized appreciation on investments

 

 

5,169,945

 

 

 

(3,522,396

)

Net (decrease) increase in stockholders’ equity resulting from operations

 

 

(11,765,891

)

 

 

1,297,622

 

Stockholder distributions:

 

 

(7,466,254

)

 

 

(7,434,120

)

Capital share transactions:

 

 

 

 

 

 

 

 

Issuance of common stock for:

 

 

 

 

 

 

 

 

Dividend reinvestment plan

 

 

129,789

 

 

 

102,099

 

Common stock withheld for payroll taxes upon vesting of restricted stock

 

 

-

 

 

 

(85,807

)

Stock based compensation

 

 

258,936

 

 

 

460,893

 

Net increase in net assets resulting from capital share transactions

 

 

388,725

 

 

 

477,185

 

Net assets at beginning of period

 

 

158,021,011

 

 

 

181,804,576

 

Net assets at end of period

 

$

139,177,591

 

 

$

176,145,264

 

Net asset value per common share

 

$

3.73

 

 

$

4.72

 

Common shares outstanding at end of period

 

 

37,356,061

 

 

 

37,341,924

 

 

(1)

Refer to note 10 "Stockholders' Equity" for additional information on changes in components of Stockholders' Equity

See accompanying notes to consolidated financial statements.

7


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2019

 

 

2018

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net (decrease) increase in stockholder's equity resulting from operations

 

$

(11,765,891

)

 

$

1,297,622

 

Adjustments to reconcile net (decrease) increase in stockholder’s equity resulting from operations to net cash (used in) provided by in operations:

 

 

 

 

 

 

 

 

Net realized losses (gains) on investment transactions

 

 

15,620,391

 

 

 

571

 

Net change in unrealized appreciation from investments

 

 

(5,169,945

)

 

 

3,522,396

 

Purchases of investments

 

 

(59,016,697

)

 

 

(61,534,043

)

Proceeds from sales and redemptions of investments

 

 

35,658,265

 

 

 

100,935,386

 

Net accretion of investments

 

 

(3,392,422

)

 

 

(3,998,143

)

Amortization of debt issuance costs

 

 

475,507

 

 

 

424,938

 

Realized losses on extinguishments of debt

 

 

 

 

 

169,074

 

Operating lease impairment

 

 

1,431,030

 

 

 

 

Net amortization of operating lease

 

 

55,174

 

 

 

 

Payment-in-kind interest income

 

 

(13,542

)

 

 

(732,053

)

Stock-based compensation

 

 

258,936

 

 

 

460,893

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Increase (decrease) in payable for open trades

 

 

14,826,295

 

 

 

(33,439,015

)

(Increase) Decrease in receivable for open trades

 

 

(10,457,443

)

 

 

2,993,750

 

Decrease (increase) in interest and dividends receivable

 

 

467,574

 

 

 

(469,587

)

Increase in accrued interest payable

 

 

1,255,066

 

 

 

90,664

 

(Increase) decrease in other assets

 

 

(587,311

)

 

 

52,185

 

Decrease (increase) in due from affiliates

 

 

311,863

 

 

 

87,858

 

Increase in management and incentive fees payable

 

 

672,951

 

 

 

(16,393

)

(Decrease) increase in due to affiliates

 

 

1,026,100

 

 

 

-

 

Decrease (increase) in accounts payable and accrued expenses

 

 

1,429,687

 

 

 

(768,275

)

Net cash (used in) provided by operating activities

 

 

(16,914,412

)

 

 

9,077,828

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Debt issuance costs

 

 

(372,150

)

 

 

(1,379,899

)

Issuance (forfeitures) of restricted shares

 

 

 

 

 

(20

)

Common stock withheld for payroll taxes upon vesting of restricted stock

 

 

 

 

 

(85,807

)

Distributions to stockholders

 

 

(7,336,465

)

 

 

(7,332,021

)

Repayment 7.375 Notes Due 2019

 

 

 

 

 

(20,000,000

)

Borrowings under Great Lakes KCAP Funding LLC, Revolving Credit Facility

 

 

45,000,000

 

 

 

27,000,000

 

Repayment of Great Lakes KCAP Funding LLC, Revolving Credit Facility

 

 

(25,997,274

)

 

 

(5,839,813

)

Net cash provided by (used in) financing activities

 

 

11,294,111

 

 

 

(7,637,560

)

CHANGE IN CASH AND RESTRICTED CASH

 

 

(5,620,300

)

 

 

1,440,268

 

CASH AND RESTRICTED CASH, BEGINNING OF PERIOD

 

 

9,324,466

 

 

 

2,034,095

 

CASH AND RESTRICTED CASH, END OF PERIOD

 

$

3,704,166

 

 

$

3,474,363

 

Supplemental Information:

 

 

 

 

 

 

 

 

Interest paid during the period

 

$

1,570,418

 

 

$

3,195,678

 

Dividends paid during the period under the dividend reinvestment plan

 

$

129,789

 

 

$

102,099

 

Supplemental non-cash information:

 

 

 

 

 

 

 

 

Realized loss on Asset Manager Affiliates

 

$

3,470,000

 

 

$

 

Amounts per balance sheet

 

 

 

 

 

 

 

 

Cash

 

$

236,828

 

 

$

2,451,249

 

Restricted cash

 

 

3,467,338

 

 

 

1,023,114

 

Total Cash and Restricted cash

 

$

3,704,166

 

 

$

3,474,363

 

 

See accompanying notes to consolidated financial statements.

8


PORTMAN RIDGE FINANCE CORPORATION

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of June 30, 2019

(unaudited)

Debt Securities Portfolio

 

Portfolio Company /

Principal Business

 

Investment

Interest Rate¹ / Maturity15

 

Initial

Acquisition

Date

 

Principal

 

 

Amortized

Cost

 

 

Fair Value2

 

Advanced Lighting Technologies, Inc.

     Consumer goods: Durable

(5)(8)(13)

Junior Secured Loan — Second Lien Notes

9.3% Cash, 10.0% PIK, 3 month LIBOR(2.29%) + 7.00%; LIBOR Floor 1.00% , Due 10/23

 

6/13/2012

 

$

1,108,051

 

 

$

1,078,343

 

 

$

2,474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akumin Corp.

     Healthcare & Pharmaceuticals

(8)(14)

Senior Secured Loan — Term B Loan

8.4% Cash, 1 month LIBOR(2.44%) + 6.00%; LIBOR Floor 1.00% , Due 5/24

 

5/31/2019

 

 

2,250,000

 

 

 

2,205,764

 

 

 

2,205,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BMC Acquisition, Inc. (aka BenefitMall)

     Banking, Finance, Insurance & Real Estate

(8)(13)(14)

Senior Secured Loan — Initial Term Loan

7.9% Cash, 6 month LIBOR(2.65%) + 5.25%; LIBOR Floor 1.00% , Due 12/24

 

1/2/2018

 

 

2,955,000

 

 

 

2,953,632

 

 

 

2,913,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bristol Hospice, L.L.C.

     Healthcare & Pharmaceuticals

(8)(13)(14)

Junior Secured Loan — Initial Term Loan (Second Lien)

9.7% Cash, 1 month LIBOR(2.40%) + 7.25%; LIBOR Floor 1.00% , Due 1/24

 

3/29/2019

 

 

8,800,000

 

 

 

8,746,520

 

 

 

8,835,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BW NHHC Holdco Inc.

     Healthcare & Pharmaceuticals

(8)(13)(14)

Senior Secured Loan — Initial Term Loan (First Lien)

7.4% Cash, 1 month LIBOR(2.40%) + 5.00% , Due 5/25

 

5/16/2018

 

 

1,980,000

 

 

 

1,954,997

 

 

 

1,848,825

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carestream Health, Inc.

     Healthcare & Pharmaceuticals

(8)(13)

Junior Secured Loan — Extended Term Loan (Second Lien)

11.9% Cash, 1 month LIBOR(2.40%) + 9.50%; LIBOR Floor 1.00% , Due 6/21

 

10/7/2014

 

 

1,510,955

 

 

 

1,499,111

 

 

 

1,480,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Child Development Schools, Inc.

     Services: Business

(8)(14)

Senior Secured Loan — Term Loan

6.7% Cash, 3 month LIBOR(2.48%) + 4.25% , Due 5/23

 

6/6/2018

 

 

4,657,184

 

 

 

4,648,050

 

 

 

4,645,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Community Care Health Network, Inc. (aka Matrix Medical Network)

     Healthcare & Pharmaceuticals

(8)(14)

Senior Secured Loan — Closing Date Term Loan

7.1% Cash, 3 month LIBOR(2.35%) + 4.75%; LIBOR Floor 1.00% , Due 2/25

 

2/9/2018

 

 

1,980,000

 

 

 

1,976,008

 

 

 

1,848,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corsair Gaming, Inc.

     High Tech Industries

(8)(14)

Senior Secured Loan — Term Loan (First Lien)

6.6% Cash, 3 month LIBOR(2.33%) + 4.25%; LIBOR Floor 1.00% , Due 8/24

 

9/29/2017

 

 

1,979,899

 

 

 

1,975,904

 

 

 

1,965,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corsair Gaming, Inc.

     High Tech Industries

(8)

Junior Secured Loan — Term Loan (Second Lien)

10.8% Cash, 3 month LIBOR(2.33%) + 8.50%; LIBOR Floor 1.00% , Due 8/25

 

9/29/2017

 

 

5,000,000

 

 

 

4,941,263

 

 

 

4,900,000

 

 

9


 

Portfolio Company /

Principal Business

 

Investment

Interest Rate¹ / Maturity15

 

Initial

Acquisition

Date

 

Principal

 

 

Amortized

Cost

 

 

Fair Value2

 

CSM Bakery Solutions Limited (fka CSM Bakery Supplies Limited)

     Beverage, Food and Tobacco

(8)

Junior Secured Loan — Term Loan (Second Lien)

10.3% Cash, 3 month LIBOR(2.59%) + 7.75%; LIBOR Floor 1.00% , Due 7/21

 

5/23/2013

 

 

3,000,000

 

 

 

3,005,058

 

 

 

2,801,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CT Technologies Intermediate Holdings, Inc. (Smart Holdings Corp.) (aka HealthPort)

     Healthcare & Pharmaceuticals

(8)(13)(14)

Senior Secured Loan — New Term Loan Facility

6.7% Cash, 1 month LIBOR(2.40%) + 4.25%; LIBOR Floor 1.00% , Due 12/21

 

11/19/2014

 

 

3,943,524

 

 

 

3,938,518

 

 

 

3,420,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Digitran Innovations B.V. (Pomeroy Solutions Holding Company, Inc.)

     High Tech Industries

(8)(13)(14)

Senior Secured Loan — Term Loan

9.8% Cash, 3 month LIBOR(2.33%) + 7.50%; LIBOR Floor 1.50% , Due 7/24

 

12/10/2018

 

 

4,962,406

 

 

 

4,917,720

 

 

 

4,844,090

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drilling Info Holdings, Inc.

     High Tech Industries

(8)(13)(14)

Senior Secured Loan — Initial Term Loan (First Lien)

6.7% Cash, 1 month LIBOR(2.40%) + 4.25% , Due 7/25

 

2/12/2019

 

 

3,369,206

 

 

 

3,359,351

 

 

 

3,352,360

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dun & Bradstreet Corporation, The

     Telecommunications

(8)(13)(14)

Senior Secured Loan — Initial Term Borrowing

7.4% Cash, 1 month LIBOR(2.40%) + 5.00% , Due 2/26

 

4/24/2019

 

 

5,000,000

 

 

 

5,043,248