TRIPLEPOINT VENTURE GROWTH BDC CORP. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)
Juanita 
Forward-Looking Statements
The information contained in this section should be read in conjunction with our consolidated financial statements and related notes and schedules thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to "the Company", "we", "us", and "our" refer toTriplePoint Venture Growth BDC Corp. and its subsidiaries. This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as "anticipates," "expects," "intends," "plans," "will," "may," "continue," "believes," "seeks," "estimates," "would," "could," "should," "targets," "projects," and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q include statements as to:
•our and our portfolio companies’ future operating results and financial
condition, including our and our portfolio companies’ ability to achieve our
respective objectives;
•our business prospects and the prospects of our portfolio companies;
•our relationships with third parties, including but not limited to lenders and
venture capital investors, including other investors in our portfolio companies;
•the impact and timing of our unfunded commitments;
•the expected market for venture capital investments;
•the performance of our existing portfolio and other investments we may make in
the future;
•the impact of investments that we expect to make;
•actual and potential conflicts of interest with TPC, the Adviser and its senior
investment team and Investment Committee;
•our contractual arrangements and relationships with third parties;
•the dependence of our future success on the
including with respect to the industries in which we invest;
•our expected financings and investments;
•the ability of the Adviser to locate suitable investments for us and to monitor
and administer our investments;
•the ability of our Adviser to attract, retain and have access to highly
talented professionals, including our Adviser’s senior management team;
•our ability to maintain our qualification as a RIC and as a BDC;
•the adequacy of our available liquidity, cash resources and working capital and
compliance with covenants under our borrowing arrangements; and
•the timing of cash flows, if any, from the operations of our portfolio
companies.
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:
•changes in laws and regulations, changes in political, economic or industry
conditions, and changes in the interest rate environment or other conditions
affecting the financial and capital markets, including with respect to changes
resulting from or in response to, or potentially even the absence of changes as
a result of, the impact of the Coronavirus ("COVID-19") pandemic;
•the length and duration of the COVID-19 outbreak in the United States as well
as worldwide, and the magnitude of its impact and time required for economic
recovery, including with respect to the impact of travel restrictions and other
isolation and quarantine measures on the ability of the Adviser's investment
professionals to conduct in-person diligence on, and otherwise monitor, existing
and future investments;
•an economic downturn and the time period required for robust economic recovery
therefrom, including relating to the impact of the COVID-19 pandemic, which has
already generally had a material impact on our portfolio companies' results of
operations and financial condition and will likely continue to have a material
impact on our portfolio companies' results of operations and financial condition
for its duration, which could lead to the loss of some or all of our investments
in such portfolio companies and have a material adverse effect on our results of
operations and financial condition;
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•a contraction of available credit, an inability or unwillingness of our lenders
to fund their commitments to us and/or an inability to access capital markets or
additional sources of liquidity, including as a result of the impact and
duration of the COVID-19 pandemic, could have a material adverse effect on our
results of operations and financial condition and impair our lending and
investment activities;
•interest rate volatility could adversely affect our results, particularly given
that we use leverage as part of our investment strategy;
•currency fluctuations could adversely affect the results of our investments in
foreign companies, particularly to the extent that we receive payments
denominated in foreign currency rather than
•risks associated with possible disruption in our or our portfolio companies' operations due to wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics; and •the risks, uncertainties and other factors we identify in "Risk Factors" in this Quarterly Report on Form 10-Q, in our most recent Annual Report on Form 10-K under Part I, Item 1A, and in our other filings with theSEC that we make from time to time. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include, without limitation, our ability to originate new loans and investments, borrowing costs and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.
Overview
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code forU.S. federal income tax purposes. Our shares are currently listed on theNew York Stock Exchange (the "NYSE") under the symbol "TPVG".
We were formed to expand the venture growth stage business segment of TPC’s
investment platform. TPC is widely recognized as a leading global financing
provider devoted to serving venture capital-backed companies with creative,
flexible and customized debt financing, equity capital and complementary
services throughout their lifespan. TPC is located on
Valley
Our investment objective is to maximize our total return to stockholders
primarily in the form of current income and, to a lesser extent, capital
appreciation by lending primarily with warrants to venture growth stage
companies focused in technology and other high growth industries backed by TPC’s
select group of leading venture capital investors.
COVID-19 Developments
The COVID-19 pandemic, and the related effect on theU.S. and global economies, including the uncertainty associated with the timing and likelihood of economic recovery, has had adverse consequences for the business operations of some of our portfolio companies and threatens to continue to adversely affect our operations and the operations of the Adviser. While we have been monitoring, and continue to monitor, the COVID-19 pandemic and its impact on our and our portfolio companies' business, we have continued to raise capital, maintain appropriate levels of available liquidity, support and monitor our existing portfolio companies, fund existing unfunded commitments, and selectively deploy capital in new investment opportunities in venture capital-backed companies. We have seen, and may continue to see, certain of our portfolio companies experience financial distress and, depending on the duration of the COVID-19 pandemic and the extent of its disruption to operations, believe that there is an increased risk of certain of our portfolio companies defaulting on their financial obligations to us and their other capital providers. In addition, as a result of the adverse effects of the COVID-19 pandemic and the related disruption and financial distress, certain portfolio companies may seek to modify their loans from us, which could reduce the amount or extend the time for payment of principal, reduce the rate or extend the time of payment of interest, and/or increase the amount of PIK interest we receive with respect to such investment, among other things. The effects of the COVID-19 pandemic have also impeded, and may continue to impede, the ability of certain of our portfolio companies to raise additional capital and/or pursue asset sales or otherwise execute strategic transactions, which could have a material adverse effect on the valuation of our investments in such companies. Portfolio companies operating in certain industries may be more susceptible to these risks than other portfolio companies in other industries in light of the effects of the COVID-19 pandemic. Some of our portfolio companies previously took steps to significantly reduce, modify, or alter business strategies and operations, and additional portfolio companies may take similar steps if subjected to prolonged and severe financial distress, which may impair their business on a permanent basis. In addition, in part due to the ongoing adverse effects of the COVID-19 pandemic, there can be no assurance that future equity rounds completed by our portfolio companies will be at levels greater than or equal to previous rounds, which may result in net unrealized depreciation on our warrant and equity portfolio in future periods. 51 -------------------------------------------------------------------------------- As ofMarch 31, 2022 , we had one portfolio company in which our investment was on non-accrual status (which was generally caused by events unrelated to the COVID-19 pandemic), with an aggregate cost and fair value of$29.5 million and$9.9 million , respectively. The various effects of the COVID-19 pandemic, including those discussed above, increase the risk that we will place additional investments on non-accrual status in the future. Any significant increase in aggregate unrealized depreciation of our investment portfolio or significant reductions in our net asset value as a result of the effects of the COVID-19 pandemic or otherwise increases the risk of failing to meet the 1940 Act asset coverage requirements and breaching covenants under the Credit Facility, or under the governing agreements for the 2025 Notes, the 2026 Notes and the 2027 Notes, or otherwise triggering an event of default under our borrowing arrangements. Any such breach of covenant or event of default, if we are not able to obtain a waiver from the required lenders or debt holders, would have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders. See "Risk Factors" in this Quarterly Report on Form 10-Q and "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year endedDecember 31, 2021 for more information. As ofMarch 31, 2022 , we were in compliance with the asset coverage requirements under the 1940 Act and with our covenants under the Credit Facility and under the governing agreements for the 2025 Notes, the 2026 Notes and the 2027 Notes. We will continue to monitor the evolving situation relating to the COVID-19 pandemic and related guidance fromU.S. and international authorities, including federal, state and local public health authorities. Given the dynamic nature of this situation and the fact that there may be developments outside of our control that require us or our portfolio companies to adjust plans of operation, we cannot reasonably estimate the full impact of COVID-19 on our financial condition, results of operations or cash flows in the future. However, it could have a material adverse impact for a prolonged period of time on our future net investment income, particularly with respect to our interest income, the fair value of our portfolio investments, and our portfolio companies' respective results of operations and financial condition. See "Risk Factors" in this Quarterly Report on Form 10-Q, and in our other filings with theSEC that we make from time to time, for more information.
Portfolio Composition, Investment Activity and Asset Quality
Portfolio Composition
We originate and invest primarily in venture growth stage companies. Companies at the venture growth stage have distinct characteristics differentiating them from venture capital-backed companies at other stages in their development lifecycle. We invest primarily in (i) growth capital loans that have a secured collateral position and that are generally used by venture growth stage companies to finance their continued expansion and growth, (ii) equipment financings, which may be structured as loans or leases, that have a secured collateral position on specified mission-critical equipment, (iii) on a select basis, revolving loans that have a secured collateral position and that are typically used by venture growth stage companies to advance against inventory, components, accounts receivable, contractual or future billings, bookings, revenues, sales or cash payments and collections including proceeds from a sale, financing or the equivalent and (iv) direct equity investments in venture growth stage companies. In connection with our growth capital loans, equipment financings and revolving loans, we generally receive warrant investments as part of the transaction that allow us to participate in any equity appreciation of our borrowers and enhance our overall investment returns. As ofMarch 31, 2022 , we had 256 investments in 98 companies. Our investments included 107 debt investments, 99 warrant investments, and 50 direct equity and related investments. As ofMarch 31, 2022 , the aggregate cost and fair value of these investments were$783.7 million and$806.4 million , respectively. As ofMarch 31, 2022 , 11 of our portfolio companies were publicly traded. As ofMarch 31, 2022 , the 107 debt investments had an aggregate fair value of$696.0 million and a weighted average loan to enterprise value ratio at the time of underwriting of 8.4%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination. As ofDecember 31, 2021 , we had 246 investments in 91 companies. Our investments included 107 debt investments, 92 warrant investments, and 47 direct equity and related investments. As ofDecember 31, 2021 , the aggregate cost and fair value of these investments were$837.8 million and$865.3 million , respectively. As ofDecember 31, 2021 , 10 of our portfolio companies were publicly traded. As ofDecember 31, 2021 , the 107 debt investments had an aggregate fair value of$757.2 million and a weighted average loan to enterprise value ratio at the time of underwriting of 7.7%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination.
The following tables show information on the cost and fair value of our
investments in companies along with the number of companies in our portfolio as
of
March 31, 2022
Investments by Type Net Unrealized Number of Number of
(dollars in thousands) Cost Fair Value Gains (losses) Investments Companies
Debt investments $ 718,226 $ 696,037 $ (22,189) 107 48
Warrant investments 26,135 52,811 26,676 99 86
Equity investments 39,333 57,599 18,266 50 42
Total Investments in Portfolio Companies
256 98 (1)
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(1)Represents non-duplicative number of companies.
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December 31, 2021
Investments by Type Net Unrealized Number of Number of
(dollars in thousands) Cost Fair Value Gains (losses) Investments Companies
Debt investments $ 774,652 $ 757,222 $ (17,430) 107 49
Warrant investments 25,597 51,756 26,159 92 81
Equity investments 37,600 56,362 18,762 47 40
Total Investments in Portfolio Companies
246 91 (1)
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(1)Represents non-duplicative number of companies.
The following tables show the fair value of the portfolio of investments, by industry and the percentage of the total investment portfolio, as ofMarch 31, 2022 andDecember 31, 2021 : March 31, 2022 Investments in Portfolio Companies by Industry Percentage of Total (dollars in thousands) At Fair Value Investments E-Commerce - Clothing and Accessories$ 120,009 14.9 % Business Applications Software 107,795 13.4 Consumer Products and Services 85,176 10.6 Financial Institution and Services 71,843 8.9 Healthcare Technology Systems 55,918 6.9 Business/Productivity Software 45,255 5.6 Security Services 38,002 4.7 Travel & Leisure 32,664 4.1 Consumer Non-Durables 30,430 3.8 Entertainment 30,114 3.7 Shopping Facilitators 27,817 3.4 Real Estate Services 26,241 3.3 Business Products and Services 23,222 2.9 Consumer Finance 17,700 2.2 Food & Drug 17,630 2.2 Multimedia and Design Software 15,577 1.9 Other Financial Services 15,245 1.9 E-Commerce - Personal Goods 15,166 1.9 Database Software 13,234 1.6 Computer Hardware 7,946 1.0 Consumer Retail 2,684 0.3 Communications Software 2,000 0.2 Network Systems Management Software 1,502 0.2 Commercial Services 1,352 0.2 General Media and Content 1,092 0.1 Educational/Training Software 317 * Healthcare Services 174 * Social/Platform Software 151 * Business to Business Marketplace 144 * Transportation 34 * Advertising / Marketing 13 * Building Materials/Construction Machinery - * Conferencing Equipment / Services - * Medical Software and Information Services - * Total portfolio company investments$ 806,447 100.0 %
_______________
*Amount represents less than 0.05% of the total portfolio investments at fair
value.
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December 31, 2021
Investments in Portfolio Companies by Industry
(dollars in thousands) At Fair Value Percentage of Total Investments
Business Applications Software $ 114,109 13.2 %
E-Commerce - Clothing and Accessories 111,941 12.9
Consumer Products and Services 78,826 9.1
Financial Institution and Services 71,673 8.3
Household & Office Goods 42,470 4.9
Other Financial Services 40,474 4.7
Real Estate Services 38,651 4.5
Security Services 38,282 4.4
Healthcare Technology Systems 37,418 4.3
Network Systems Management Software 37,283 4.3
Travel & Leisure 31,686 3.7
Entertainment 30,881 3.6
Consumer Non-Durables 30,531 3.5
Shopping Facilitators 27,642 3.2
Business Products and Services 22,940 2.7
Business/Productivity Software 17,393 2.0
Consumer Finance 17,345 2.0
Food & Drug 17,316 2.0
Multimedia and Design Software 15,619 1.8
E-Commerce - Personal Goods 15,091 1.7
Database Software 12,876 1.5
Computer Hardware 7,944 0.9
Consumer Retail 2,680 0.3
Communications Software 2,000 0.2
General Media and Content 1,092 0.1
Educational/Training Software 252 *
Commercial Services 238 *
Conferencing Equipment / Services 205 *
Social/Platform Software 151 *
Business to Business Marketplace 144 *
Transportation 111 *
Healthcare Services 61 *
Advertising / Marketing 13 *
Building Materials/Construction Machinery 2 *
Medical Software and Information Services - *
Total portfolio company investments $ 865,340 100.0 %
_______________
*Amount represents less than 0.05% of the total portfolio investments at fair
value.
The following table shows the financing product type of our debt investments as
of
March 31, 2022 December 31 ,
2021
Debt Investments By Financing Product Percentage of Total Debt Percentage of Total Debt (dollars in thousands) Fair Value Investments Fair Value Investments Growth capital loans$ 690,454 99.2 %$ 752,268 99.4 % Revolver loans 4,658 0.7 4,029 0.5 Convertible notes 925 0.1 925 0.1 Total debt investments$ 696,037 100.0 %$ 757,222 100.0 % Growth capital loans in which the borrower held a term loan facility, with or without an accompanying revolving loan, in priority to our senior lien represent 28.6% and 26.2% of our debt investments at fair value as ofMarch 31, 2022 andDecember 31, 2021 , respectively. 54 --------------------------------------------------------------------------------
Investment Activity
During the three months endedMarch 31, 2022 , we entered into debt commitments with eight new portfolio companies and three existing portfolio companies totaling$125.7 million , funded debt investments to 10 portfolio companies for$62.7 million in principal value, acquired warrant investments representing$0.8 million of value, and made equity investments of$2.4 million . Debt investments funded during the three months endedMarch 31, 2022 carried a weighted average annualized portfolio yield of 13.3% at origination.
During the three months ended
with four new portfolio companies and three existing portfolio companies
totaling
principal value, acquired warrant investments representing
value, and made equity investments of
during the three months ended
annualized portfolio yield of 12.6% at origination.
During the three months ended
principal prepayments and
During the three months ended
principal prepayments and
The following table shows the total portfolio investment activity for the three
months ended
For the Three Months Ended March 31,
(in thousands) 2022 2021
Beginning portfolio at fair value $ 865,340 $ 633,779
New debt investments, net(1) 61,459 55,642
Scheduled principal amortization (5,867) (15,069)
Principal prepayments and early repayments (115,535) (35,966)
Net amortization and accretion of premiums and discounts
and end-of term payments
1,934 1,119 Payment-in-kind coupon 1,583 1,981 New warrant investments 814 1,621 New equity investments 2,696 2,643 Proceeds from dispositions of investments (246) (15,000) Net realized gains (losses) on investments (994) (15,703) Net change in unrealized gains (losses) on investments (4,737) 18,649 Ending portfolio at fair value $
806,447
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(1)Debt balance is net of fees and discounts applied to the loan at origination.
Our level of investment activity can vary substantially from period to period as our Adviser chooses to slow or accelerate new business originations depending on market conditions, rate of investment of TPC's select group of leading venture capital investors, our Adviser's knowledge, expertise and experience, our funding capacity (including availability under the Credit Facility and our ability or inability to raise equity or debt capital), and other market dynamics. The following table shows the debt commitments, fundings of debt investments (principal balance) and equity investments, and non-binding term sheet activity for the three months endedMarch 31, 2022 and 2021: Commitments and Fundings For the Three Months Ended March 31, (in thousands) 2022 2021 Debt Commitments New portfolio companies $ 93,732$ 57,179 Existing portfolio companies 32,000 33,219 Total(1) $ 125,732$ 90,398 Funded Debt Investments $ 62,703$ 56,908 Equity Investments $ 2,362$ 2,335 Non-Binding Term Sheets $ 656,629$ 192,172 _______________
(1)Includes backlog of potential future commitments.
We may enter into commitments with certain portfolio companies that permit an
increase in the commitment amount in the future in the event that conditions to
such increases are met ("backlog of potential future commitments"). If such
conditions to increase are met, these amounts may become unfunded commitments if
not drawn prior to expiration. As of March 31, 2022 , this backlog of potential
future commitments totaled $15.0 million . As of December 31, 2021 , we did not
have any backlog of potential future commitments.
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Asset Quality
Consistent with TPC's existing policies, our Adviser maintains a credit watch
list which places borrowers into five risk categories based on our Adviser's
senior investment team's judgment, where 1 is the highest rating and all new
loans are generally assigned a rating of 2.
Category Category Definition Action Item
Clear (1) Performing above expectations and/or Review quarterly.
strong financial or enterprise profile,
value or coverage.
White (2) Performing at expectations and/or
Contact portfolio company periodically;
reasonably close to it. Reasonable in
no event less than quarterly.
financial or enterprise profile, value or
coverage. Generally, all new loans are
initially graded White (2).
Yellow (3) Performing generally below expectations
Contact portfolio company monthly or
and/or some proactive concern. Adequate
more frequently as determined by our
financial or enterprise profile, value or
Adviser’s Investment Committee; contact
coverage. venture capital investors.
Orange (4) Needs close attention due to performance
Contact portfolio company weekly or more
materially below expectations, weak
frequently as determined by our
financial and/or enterprise profile,
Adviser’s Investment Committee; contact
concern regarding additional capital or
venture capital investors regularly; our
exit equivalent.
Adviser forms a workout group to
minimize risk of loss.
Red (5) Serious concern/trouble due to pending or
Maximize value from assets.
actual default or equivalent. May
experience partial and/or full loss.
The following table shows the credit rankings for the portfolio companies that
had outstanding debt obligations to us as of March 31, 2022 and December 31,
2021 :
March 31, 2022 December 31, 2021
Number of Number of
Credit Category Percentage of Total Portfolio Percentage of Total Portfolio
(dollars in thousands) Fair Value Debt Investments Companies Fair Value Debt Investments Companies
Clear (1) $ 48,533 7.0 % 4 $ 166,091 21.9 % 8
White (2) 592,462 85.1 40 538,167 71.1 38
Yellow (3) 45,146 6.5 3 41,628 5.5 2
Orange (4) 9,896 1.4 1 11,336 1.5 1
Red (5) - - - - - -
$ 696,037 100.0 % 48 $ 757,222 100.0 % 49
As of March 31, 2022 and December 31, 2021 , the weighted average investment
ranking of our debt investment portfolio was 2.02 and 1.87, respectively. During
the three months ended March 31, 2022 , portfolio company credit category
changes, excluding fundings and repayments, consisted of the following: one
portfolio company with a principal balance of $2.5 million was downgraded from
White (2) to Yellow (3).
Results of Operations
Comparison of operating results for the three months ended
2021
An important measure of our financial performance is net increase (decrease) in net assets resulting from operations, which includes net investment income (loss), net realized gains (losses) and net unrealized gains (losses). Net investment income (loss) is the difference between our income from interest, dividends, fees and other investment income and our operating expenses including interest on borrowed funds. Net realized gains (losses) on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost. Net unrealized gains (losses) on investments is the net change in the fair value of our investment portfolio. For the three months endedMarch 31, 2022 , our net increase in net assets resulting from operations was$5.7 million , which was comprised of$13.5 million of net investment income and$7.8 million of net realized and unrealized losses. For the three months endedMarch 31, 2021 , our net increase in net assets resulting from operations was$11.9 million , which was comprised of$8.9 million of net investment income and$3.0 million of net realized and unrealized gains. On a per share basis for the three months endedMarch 31, 2022 , net investment income was$0.44 per share and the net increase in net assets from operations was$0.18 per share, as compared to net investment income of$0.29 per share and a net increase in net assets from operations of$0.38 per share for the three months endedMarch 31, 2021 . Investment Income For the three months endedMarch 31, 2022 , total investment and other income was$27.3 million as compared to$20.0 million for the three months endedMarch 31, 2021 . The increase in total investment and other income for the three months endedMarch 31, 2022 , compared to the 2021 period, is primarily due to a greater weighted average principal amount outstanding on our income-bearing debt investment portfolio and increased prepayment activity. 56 -------------------------------------------------------------------------------- For the three months endedMarch 31, 2022 , we recognized$1.4 million in other income consisting primarily of$1.4 million from the realization of certain fees paid and accrued from portfolio companies and other income related to prepayment activity. For the three months endedMarch 31, 2021 , we recognized$0.8 million in other income consisting of$0.3 million from the termination or expiration of unfunded commitments, and$0.5 million from the realization of certain fees paid and accrued from portfolio companies and other income related to prepayment activity.
Operating Expenses
Total operating expenses consist of our base management fee, income incentive fee, capital gains incentive fee, interest expense and amortization of fees, administration agreement expenses, and general and administrative expenses. In determining the base management fee, our Adviser has agreed to excludeU.S. Treasury bill assets acquired at the end of each applicable quarter from the calculation of the gross assets. We anticipate operating expenses will increase over time as our portfolio continues to grow. However, we anticipate operating expenses, as a percentage of totals assets and net assets, will generally decrease over time as our portfolio and capital base expand. We expect base management and income incentive fees will increase as we grow our asset base and our earnings. The capital gains incentive fee will depend on realized and unrealized gains and losses. Interest expenses will generally increase as we utilize more of the Credit Facility and issue additional debt securities, and we generally expect expenses under the administration agreement and general and administrative expenses to increase over time to meet the additional requirements associated with servicing a larger portfolio.
For the three months ended
million
Base management fees for the three months endedMarch 31, 2022 and 2021 totaled$3.7 million and$2.9 million , respectively. Base management fees increased during the three months endedMarch 31, 2022 , as compared to the three months endedMarch 31, 2021 , due to an increase in the average size of our portfolio during the applicable periods used in the calculation. Income incentive fees totaled$3.4 million and$2.2 million for the three months endedMarch 31, 2022 and 2021, respectively. Income incentive fees increased during the three months endedMarch 31, 2022 , as compared to the three months endedMarch 31, 2021 , due to greater pre-incentive fee net investment income for the period.
There was no capital gains incentive fee expense for the three months ended
Interest expense and amortization of fees totaled$5.1 million and$4.4 million for the three months endedMarch 31, 2022 and 2021, respectively. The increase during the three months endedMarch 31, 2022 , as compared to the three months endedMarch 31, 2021 , is due to the issuance of the 2027 Notes in the first quarter of 2022 and a greater weighted-average outstanding principal balance under the Credit Facility. Administration agreement and general and administrative expenses totaled$1.6 million and$1.6 million for the three months endedMarch 31, 2022 and 2021, respectively.
Net Realized Gains and Losses and Net Unrealized Gains and Losses
Realized gains and losses are included in “net realized gains (losses) on
investments” in the consolidated statements of operations.
During the three months endedMarch 31, 2022 , we recognized net realized losses on investments of$3.1 million , resulting fromCasper Sleep Inc. completing its take-private transaction and foreign currency adjustments on prepayments. During the three months endedMarch 31, 2021 , we recognized net realized losses on investments of$15.7 million , consisting primarily of the sale of our investment inKnotel, Inc. , which was rated Red (5) on our credit watch list, and its removal from our investment portfolio.
Unrealized gains and losses are included in “net change in unrealized gains
(losses) on investments” in the consolidated statements of operations.
Net change in unrealized losses during the three months endedMarch 31, 2022 was$4.7 million , resulting primarily from$3.5 million in net unrealized losses from fair value and mark-to-market adjustments, as well as the reversal and recognition of$1.2 million of previously recorded unrealized gains associated with investments realized during the period. Net change in unrealized gains during the three months endedMarch 31, 2021 was$18.6 million , resulting primarily from the reversal and recognition of$15.6 million of previously recorded unrealized losses associated withKnotel, Inc. , as well as net unrealized gains on our investment portfolio resulting from fair value adjustments, partially offset by$1.4 million of unrealized losses due to changes in foreign currency.
Net change in realized and unrealized gains or losses in subsequent periods may
be volatile as such results depend on changes in the market, changes in the
underlying performance of our portfolio companies and their respective
industries, and other market factors.
Portfolio Yield and Total Return
Investment income includes interest income on our debt investments utilizing the
effective yield method including cash interest income as well as the
amortization of any purchase premium, accretion of purchase discount, original
issue discount, facilities fees, and the amortization and payment of the
end-of-term ("EOT") payments. For the three months ended March 31, 2022 ,
interest income totaled $25.9 million , representing a weighted average
annualized portfolio yield on total debt investments for the period held of
15.5%. For the three months ended March 31, 2021 , interest income totaled $19.2
million , representing a weighted average annualized portfolio yield on total
debt investments for the period held of 13.3%.
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We calculate weighted average annualized portfolio yields for periods shown as
the annualized rates of the interest income recognized during the period divided
by the average amortized cost of debt investments in the portfolio during the
period. The weighted average yields reported for these periods are annualized
and reflect the weighted average yields to maturities. Should the portfolio
companies choose to repay their loans earlier, our weighted average yields will
increase for those debt investments affected but may reduce our weighted average
yields on the remaining portfolio in future quarters.
For the three months ended
portfolio, excluding the impact of prepayments, was 12.7%. For the three months
ended
impact of prepayments, was 11.9%.
The following table shows the weighted average annualized portfolio yield on our total debt portfolio comprising of cash interest income, accretion of the net purchase discount, facilities fees and the value of warrant investments received, accretion of EOT payments and the accelerated receipt of EOT payments on prepayments: Ratios For the Three Months Ended March 31, (Percentages, on an annualized basis)(1) 2022 2021 Weighted average annualized portfolio yield on total debt investments(2) 15.5 % 13.3 % Coupon income 10.1 % 9.7 % Accretion of discount 0.8 % 0.9 % Accretion of end-of-term payments 1.8 % 1.3 % Impact of prepayments during the period 2.8 % 1.4 %
_____________
(1)Weighted average portfolio yields on total debt investments for periods shown are the annualized rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. (2)The weighted average portfolio yields on total debt investments reflected above do not represent actual investment returns to our stockholders. Our weighted average annualized portfolio yield on debt investments may be higher than an investor's yield on an investment in shares of our common stock. Our weighted average annualized portfolio yield on debt investments does not reflect operating expenses that may be incurred by us and, thus, by our stockholders. In addition, our weighted average annualized portfolio yield on debt investments and total return figures disclosed in this Quarterly Report on Form 10-Q do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of our common stock. Our weighted average annualized portfolio yield on debt investments and total return figures do not represent actual investment returns to stockholders. Our weighted average annualized portfolio yield on debt investments and total return figures are subject to change and, in the future, may be greater or less than the rates in this Quarterly Report on Form 10-Q. Total return based on NAV is the change in ending NAV per share plus distributions per share paid during the period assuming participation in our dividend reinvestment plan divided by the beginning NAV per share for such period. Total return based on stock price is the change in the ending stock price of our common stock plus distributions paid during the period assuming participation in our dividend reinvestment plan divided by the beginning stock price of our common stock for such period. For the three months endedMarch 31, 2022 , our total return during the period based on the change in NAV plus distributions reinvested as of the respective distribution dates was 0.9%, and our total return during the period based on the change in stock price plus distributions reinvested as of the respective distribution dates was (0.7)%. For the three months endedMarch 31, 2021 , our total return during the period based on the change in NAV plus distributions reinvested as of the respective distribution dates was 3.6%, and our total return during the period based on the change in stock price plus distributions reinvested as of the respective distribution dates was 14.6%. These total return figures are for the periods indicated and are not annualized.
The table below shows our return on average total assets and return on average
NAV for the three months ended
Returns on Net Asset Value and Total Assets
For the Three Months Ended March 31, (dollars in thousands) 2022 2021 Net investment income $ 13,547$ 8,907 Net increase (decrease) in net assets $ 5,705$ 11,859 Average net asset value(1) $ 435,804$ 402,043 Average total assets(1) $ 844,900$ 695,203 Net investment income to average net asset value(2) 12.6 % 9.0 %
Net increase (decrease) in net assets to average net asset
value(2)
5.3 % 12.0 % Net investment income to average total assets(2) 6.5 % 5.2 % Net increase (decrease) in net assets to average total assets(2) 2.7 % 6.9 %
_______________
(1)The average net asset values and the average total assets are computed based
on daily balances.
(2)Percentage is presented on an annualized basis.
58
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Critical Accounting Policies
The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates, including with respect to the valuation of our investments, could cause actual results to differ. Understanding our accounting policies and the extent to which we use management's judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in "Note 2. Significant Accounting Policies" in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 and in this Quarterly Report on Form 10-Q. Critical accounting policies are those that require the application of management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. We have identified the valuation of our investment portfolio, including our investment valuation policy (which has been approved by the Board), as our critical accounting policy and estimates. The critical accounting policies should be read in conjunction with our risk factors in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 and in this Quarterly Report on Form 10-Q.
Investment Valuation
Investment transactions are recorded on a trade-date basis. Our investments are carried at fair value in accordance with the 1940 Act and ASC Topic 946 and measured in accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or "ASC Topic 820," issued by the FASB. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of the market's participant who holds the financial instrument rather than an entity-specific measure. When market assumptions are not readily available, our own assumptions are set to reflect those that the Adviser believes market participants would use in pricing the financial instruments on the measurement date. The availability of observable inputs can vary depending on the financial instrument and is affected by a variety of factors. To the extent the valuation is based on models or inputs that are less observable, the determination of fair value requires more judgment. Our valuation methodology is approved by the Board, and the Board is responsible for the fair values determined. As markets change, new types of investments are made, or pricing for certain investments becomes more or less observable, management, with oversight from the Board, may refine our valuation methodologies to best reflect the fair value of our investments appropriately.
As of
accordance with our Board-approved valuation policy, represented approximately
93.7% of our total assets, as compared to approximately 93.3% of our total
assets as of
See "Note 4. Investments" in the notes to the consolidated financial statements included in our Annual Report on Form 10-K filed with theSEC onMarch 2, 2022 and "Note 4. Investments" in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on our valuation process.
Liquidity and Capital Resources
We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations, including from contractual monthly portfolio company payments and cash flows, prepayments, and the ability to liquidate publicly traded investments, will be adequate to meet our cash needs for our daily operations. This "Liquidity and Capital Resources" section should be read in conjunction with "COVID-19 Developments" above and the risk factors discussed below in this Quarterly Report on Form 10-Q.
Cash Flows
During the three months endedMarch 31, 2022 , net cash provided by operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in "Results of Operations," was$54.2 million , and net cash used in financing activities was$62.1 million due primarily to net repayments under the Credit Facility of$175.0 million and$10.7 million in distributions paid, partially offset by the issuance of the 2027 Notes. As ofMarch 31, 2022 , cash and cash equivalents, including restricted cash, was$51.3 million . During the three months endedMarch 31, 2021 , net cash provided by operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in "Results of Operations," was$5.4 million , and net cash provided by financing activities was$66.1 million due to the issuance of the 2026 Notes, partially offset by net repayments under the Credit Facility of$118.0 million , and$13.6 million in distributions paid. As ofMarch 31, 2021 , cash and cash equivalents, including restricted cash, was$116.1 million . 59
--------------------------------------------------------------------------------
Capital Resources and Borrowings
As a BDC, we generally have an ongoing need to raise additional capital for investment purposes. As a result, we expect, from time to time, to access the debt and equity markets when we believe it is necessary and appropriate to do so. In this regard, we continue to explore various options for obtaining additional debt or equity capital for investments. This may include expanding or extending the Credit Facility or the issuance of additional shares of our common stock or debt securities. If we are unable to obtain leverage or raise equity capital on terms that are acceptable to us, our ability to grow our portfolio could be substantially impacted.
Credit Facility
As ofMarch 31, 2022 , we had$350 million in total commitments available under the Credit Facility, subject to various covenants and borrowing base requirements. The Credit Facility also includes an accordion feature, which allows us to increase the size of the Credit Facility to up to$400 million under certain circumstances. The revolving period under the Credit Facility expires onNovember 30, 2022 , and the maturity date of the Credit Facility isMay 31, 2024 (unless otherwise terminated earlier pursuant to its terms). Borrowings under the Credit Facility bear interest at the sum of (i) a floating rate based on certain indices, including LIBOR and commercial paper rates (subject to a floor of 0.50%), plus (ii) a margin of 2.80% if facility utilization is greater than or equal to 75%, 2.90% if utilization is greater than or equal to 50%, 3.00% if utilization is less than 50% and 4.5% during the amortization period. See "Note 6. Borrowings" in the notes to the consolidated financial statements for more information regarding the terms of the Credit Facility. As ofMarch 31, 2022 andDecember 31, 2021 , we had outstanding borrowings under the Credit Facility of$25.0 million and$200.0 million , respectively, excluding deferred credit facility costs of$1.9 million and$2.2 million , respectively, which is included in the consolidated statements of assets and liabilities. We had$325.0 million and$150.0 million of remaining capacity on our Credit Facility as ofMarch 31, 2022 andDecember 31, 2021 , respectively.
2022 Notes
OnJuly 14, 2017 , we completed a public offering of$65.0 million in aggregate principal amount of the 2022 Notes and received net proceeds of$62.8 million , after the payment of fees and offering costs. OnJuly 24, 2017 , as a result of the underwriters' full exercise of their option to purchase additional 2022 Notes, we issued an additional$9.75 million in aggregate principal amount of the 2022 Notes and received net proceeds of$9.5 million , after the payment of fees and offering costs. The interest on the 2022 Notes accrued at an annual rate of 5.75%, payable quarterly. OnMarch 5, 2021 , we notified the trustee under the indenture governing the 2022 Notes of our election to redeem, in full, the$74.75 million aggregate principal amount of the 2022 Notes outstanding, and instructed the trustee to provide notice of such redemption to the holders of the 2022 Notes in accordance with the terms of the indenture. OnApril 5, 2021 , the entire$74.75 million aggregate principal amount of 2022 Notes was redeemed in full in accordance with the terms of the indenture governing the 2022 Notes. In connection with the redemption, the 2022 Notes were delisted from theNew York Stock Exchange . The redemption was accounted for as a debt extinguishment in accordance with ASC 470-50, Modifications and Extinguishments, which resulted in a realized loss of$0.7 million . See "Note 6. Borrowings" in the notes to the consolidated financial statements for more information regarding the 2022 Notes.
2025 Notes
OnMarch 19, 2020 , we completed a private offering of$70.0 million in aggregate principal amount of the 2025 Notes and received net proceeds of$69.1 million , after the payment of fees and offering costs. The interest on the 2025 Notes, which accrues at an annual rate of 4.50%, is payable semiannually onMarch 19 andSeptember 19 each year. The maturity date of the 2025 Notes is scheduled forMarch 19, 2025 . As ofMarch 31, 2022 andDecember 31, 2021 , we have recorded in the consolidated statements of assets and liabilities our liability for the 2025 Notes, net of deferred issuance costs, of$69.4 million and$69.3 million , respectively. See "Note 6. Borrowings" in the notes to the consolidated financial statements for more information regarding the 2025 Notes.
2026 Notes
OnMarch 1, 2021 , we completed a private offering of$200.0 million in aggregate principal amount of the 2026 Notes and received net proceeds of$197.9 million , after the payment of fees and offering costs. The interest on the 2026 Notes, which accrues at an annual rate of 4.50%, is payable semiannually onMarch 19 andSeptember 19 each year, beginning onSeptember 19, 2021 . The maturity date of the 2026 Notes is scheduled forMarch 1, 2026 . As ofMarch 31, 2022 andDecember 31, 2021 , we have recorded in the consolidated statements of assets and liabilities our liability for the 2026 Notes, net of deferred issuance costs, of$198.3 million and$198.2 million , respectively. See "Note 6. Borrowings" in the notes to the consolidated financial statements for more information regarding the 2026 Notes.
2027 Notes
OnFebruary 28, 2022 , we completed a private offering of$125.0 million in aggregate principal amount of the 2027 Notes and received net proceeds of$123.7 million , after the payment of fees and offering costs. The interest on the 2027 Notes, which accrues at an annual rate of 5.00%, is payable semiannually onFebruary 28 andAugust 28 each year, beginning onAugust 28, 2022 . The maturity date of the 2027 Notes is scheduled forFebruary 28, 2027 . 60 --------------------------------------------------------------------------------
As of
and liabilities our liability for the 2027 Notes, net of deferred issuance
costs, of
consolidated financial statements for more information regarding the 2027 Notes.
Asset Coverage Requirements
OnJune 21, 2018 , our stockholders voted at a special meeting of stockholders to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the special meeting, effectiveJune 22, 2018 , our applicable minimum asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As ofMarch 31, 2022 , our asset coverage for borrowed amounts was 202%.
Contractual Obligations
The following table shows a summary of our payment obligations for repayment of debt as ofMarch 31, 2022 : Payments Due By Period March 31, 2022 (in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Credit Facility$ 25,000 $ -$ 25,000 $ - $ - 2025 Notes 70,000 - 70,000 - - 2026 Notes 200,000 - - 200,000 - 2027 Notes 125,000 - - 125,000 - Total$ 420,000 $ -$ 95,000 $ 325,000 $ - Unfunded Commitments We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As ofMarch 31, 2022 andDecember 31, 2021 , our unfunded commitments totaled$232.2 million and$191.7 million , respectively, of which$51.8 million and$50.3 million , respectively, was dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them. 61
-------------------------------------------------------------------------------- The following table shows our unfunded commitments by portfolio company as ofMarch 31, 2022 andDecember 31, 2021 : Unfunded Commitments(1) (in thousands) March 31, 2022 December 31, 2021 Tempo Interactive Inc.$ 25,000 $ 25,000 The Pill Club Holdings, Inc. 20,000 20,000 Found Health, Inc. 20,000 - Arcadia Power, Inc. 18,000 18,000 Good Eggs, Inc. 14,000 14,000 Foodology Inc. 13,000 - RenoRun US Inc. 12,750 12,750 Savage X, Inc. 12,000 12,000 Activehours, Inc. (d/b/a Earnin) 10,000 10,000 Homeward, Inc. 10,000 10,000 Forum Brands, LLC 9,891 12,951 Merama Inc. 9,718 9,718 Curology, Inc. 9,000 9,000 Demain ES (d/b/a Luko) 7,780 7,940 everdrop GmbH 6,446 - Project 1920, Inc. 5,400 - True Footage Inc. 5,110 5,695 Cart.com, Inc. 5,000 - Don't Run Out, Inc. 5,000 5,000 FlashParking, Inc. 3,490 3,837 Baby Generation, Inc. 3,125 - Trendly, Inc. 3,000 3,000 Thingy Thing Inc. 2,000 2,000 JOKR S.à r.l. 1,496 1,496 Belong Home, Inc. 1,000 - Narvar, Inc. - 3,750 Sonder USA, Inc. - 3,000 VanMoof Global Holding B.V. - 2,025 Alyk, Inc. - 500 Total$ 232,206 $ 191,662 _____________
(1)Does not include backlog of potential future commitments. Refer to
“Investment Activity” above.
The following table shows additional information on our unfunded commitments regarding milestones and expirations as ofMarch 31, 2022 andDecember 31, 2021 : Unfunded Commitments(1) (in thousands) March 31, 2022 December 31, 2021 Dependent on milestones$ 51,750 $ 50,250 Expiring during: 2022$ 139,565 $ 131,429 2023 85,641 50,233 2024 7,000 10,000 Total$ 232,206 $ 191,662 _______________
(1)Does not include backlog of potential future commitments.
As ofMarch 31, 2022 , our unfunded commitments to 25 companies totaled$232.2 million . During the three months endedMarch 31, 2022 ,$7.3 million in unfunded commitments expired or were terminated.
As of
million
commitments expired or were terminated.
62 -------------------------------------------------------------------------------- Our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences material adverse events that affect the financial condition or business outlook for the portfolio company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us. We generally expect 50% - 75% of our gross unfunded commitments to eventually be drawn before the expiration of their corresponding availability periods. The fair value at the inception of the delay draw credit agreements with our portfolio companies is equal to the fees and/or warrants received to enter into these agreements, taking into account the remaining terms of the agreements and the relevant counterparty's credit profile. The unfunded commitment liability reflects the fair value of these future funding commitments. As ofMarch 31, 2022 andDecember 31, 2021 , the fair value for these unfunded commitments totaled$3.9 million and$3.2 million , respectively, and was included in "other accrued expenses and liabilities" in our consolidated statements of assets and liabilities. Distributions We have elected to be treated, and intend to qualify annually, as a RIC under the Code. To maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net realized short-term capital gains in excess of our net realized long-term capital losses, if any, to our stockholders. In order to avoid a non-deductible 4%U.S. federal excise tax on certain of our undistributed income, we would need to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending onOctober 31 of the calendar year (unless an election is made by us to use our taxable year); and (c) certain undistributed amounts from previous years on which we paid noU.S. federal income tax. For the tax years endedDecember 31, 2021 and 2020, we were subject to a 4%U.S. federal excise tax and we may be subject to this tax in future years. In such cases, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement. To the extent our taxable earnings fall below the total amount of our distributions for the year, a portion of those distributions may be deemed a return of capital to our stockholders. Our Adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. We estimate the source of our distributions as required by Section 19(a) of the 1940 Act to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but we will not be able to determine whether any specific distribution will be treated as made out of our taxable earnings or as a return of capital until after the end of our taxable year. Any amount treated as a return of capital will reduce a stockholder's adjusted tax basis in his or her common stock, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale or other disposition of his or her common stock. On a quarterly basis, for any payment of dividends estimated to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods based on the Section 19(a) requirement, we post a Section 19(a) notice through theDepository Trust Company's Legal Notice System and our website, as well as send our registered stockholders a printed copy of such notice along with the dividend payment. The estimates of the source of the distribution are interim estimates based on GAAP that are subject to revision, and the exact character of the distributions for tax purposes cannot be determined until the final books and records are finalized for the calendar year. Therefore, these estimates are made solely in order to comply with the requirements of Section 19(a) of the 1940 Act and should not be relied upon for tax reporting or any other purposes and could differ significantly from the actual character of distributions for tax purposes. The following table shows our cash distributions per share that have been authorized by our Board since our initial public offering toMarch 31, 2022 . FromMarch 5, 2014 (commencement of operations) toDecember 31, 2015 , and during the years endedDecember 31, 2017 andDecember 31, 2018 , distributions represent ordinary income as our earnings exceeded distributions. Approximately$0.24 per share of the distributions during the year endedDecember 31, 2016 represented a return of capital. During the years endedDecember 31, 2021 , 2020 and 2019, distributions represent ordinary income and long term capital gains. Depending on the duration of the COVID-19 pandemic and the extent of its impact on our portfolio companies' operations and our net investment income, any future distributions to our stockholders may be for amounts less than our historical distributions, may be made less frequently than historical practices, and may be made in part cash and part stock (as per each stockholder's election), subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution. 63 --------------------------------------------------------------------------------
Period Ended Date Declared Record Date Payment Date Per Share Amount
March 31, 2014 April 3, 2014 April 15, 2014 April 30, 2014 $ 0.09 (1)
June 30, 2014 May 13, 2014 May 30, 2014 June 17, 2014 0.30
September 30, 2014 August 11, 2014 August 29, 2014 September 16, 2014 0.32
December 31, 2014 October 27, 2014 November 28, 2014 December 16, 2014 0.36
December 31, 2014 December 3, 2014 December 22, 2014 December 31, 2014 0.15 (2)
March 31, 2015 March 16, 2015 March 26, 2015 April 16, 2015 0.36
June 30, 2015 May 6, 2015 May 29, 2015 June 16, 2015 0.36
September 30, 2015 August 11, 2015 August 31, 2015 September 16, 2015 0.36
December 31, 2015 November 10, 2015 November 30, 2015 December 16, 2015 0.36
March 31, 2016 March 14, 2016 March 31, 2016 April 15, 2016 0.36
June 30, 2016 May 9, 2016 May 31, 2016 June 16, 2016 0.36
September 30, 2016 August 8, 2016 August 31, 2016 September 16, 2016 0.36
December 31, 2016 November 7, 2016 November 30, 2016 December 16, 2016 0.36
March 31, 2017 March 13, 2017 March 31, 2017 April 17, 2017 0.36
June 30, 2017 May 9, 2017 May 31, 2017 June 16, 2017 0.36
September 30, 2017 August 8, 2017 August 31, 2017 September 15, 2017 0.36
December 31, 2017 November 6, 2017 November 17, 2017 December 1, 2017 0.36
March 31, 2018 March 12, 2018 March 23, 2018 April 6, 2018 0.36
June 30, 2018 May 2, 2018 May 31, 2018 June 15, 2018 0.36
September 30, 2018 August 1, 2018 August 31, 2018 September 14, 2018 0.36
December 31, 2018 October 31, 2018 November 30, 2018 December 14, 2018 0.36
December 31, 2018 December 6, 2018 December 20, 2018 December 28, 2018 0.10 (2)
March 31, 2019 March 1, 2019 March 20, 2019 March 29, 2019 0.36
June 30, 2019 May 1, 2019 May 31, 2019 June 14, 2019 0.36
September 30, 2019 July 31, 2019 August 30, 2019 September 16, 2019 0.36
December 31, 2019 October 30, 2019 November 29, 2019 December 16, 2019 0.36
March 31, 2020 February 28, 2020 March 16, 2020 March 30, 2020 0.36
June 30, 2020 April 30, 2020 June 16, 2020 June 30, 2020 0.36
September 30, 2020 July 30, 2020 August 31, 2020 September 15, 2020 0.36
December 31, 2020 October 29, 2020 November 27, 2020 December 14, 2020 0.36
December 31, 2020 December 21, 2020 December 31, 2020 January 13, 2021 0.10 (2)
March 31, 2021 February 24, 2021 March 15, 2021 March 31, 2021 0.36
June 30, 2021 April 29, 2021 June 16, 2021 June 30, 2021 0.36
September 30, 2021 July 28, 2021 August 31, 2021 September 15, 2021 0.36
December 31, 2021 October 29, 2021 November 30, 2021 December 15, 2021 0.36
March 31, 2022 February 22, 2022 March 15, 2022 March 31, 2022 0.36
Total cash distributions $ 11.86
_____________
(1)The amount of this initial distribution reflected a quarterly distribution
rate of $0.30 per share, prorated for the 27 days for the period from the
pricing of our initial public offering on March 5, 2014 (commencement of
operations), through March 31, 2014 .
(2)Represents a special distribution.
For the three months ended March 31, 2022 , distributions paid were comprised of
interest-sourced distributions (qualified interest income) in an amount equal to
72.4% of total distributions paid. As of March 31, 2022 , we had estimated
undistributed taxable earnings from net investment income of $12.8 million , or
$0.41 per share.
Recent Accounting Pronouncements
InJanuary 2021 , theFinancial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2021-01, Reference Rate Reform (Topic 848) ("ASU 2021-01"). ASU 2021-01 is an update of ASU 2020-04, which is in response to concerns about structural risks of interbank offered rates, and particularly the risk of cessation of LIBOR; regulators have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The ASU 2021-01 update clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The amendments in this update are effective immediately throughDecember 31, 2022 , for all entities. The adoption of these rules did not have a material impact on the consolidated financial statements. 64 --------------------------------------------------------------------------------
Recent Developments
Distribution
On
distribution, payable on
2022
Recent Portfolio Activity FromApril 1, 2022 throughMay 4, 2022 , we closed$66.0 million of additional debt commitments and funded$49.2 million in new investments. TPC's direct originations platform entered into$223.3 million of additional non-binding signed term sheets with venture growth stage companies. These investment opportunities for us are subject to due diligence, definitive documentation and investment committee approval, as well as compliance with TPC's allocation policy. FromApril 1, 2022 throughMay 4, 2022 , we received$26.4 million of principal prepayments generating more than$1.0 million of accelerated income.
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