Runway Growth Finance Corp

Previous wording

an economic downturn or recession could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

Current wording

an economic downturn or recession, as well as the impairment or failure of financial institutions on both a domestic and global scale, could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

Previous wording

We have based the forward-looking statements included in this Form 10‑Q on information available to us on the date of this Form 10‑Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including our annual reports on Form 10‑K, quarterly reports on Form 10‑Q and current reports on Form 8‑K.

Current wording

We have based the forward-looking statements included in this quarterly report on Form 10‑Q on information available to us on the date of this quarterly report on Form 10‑Q, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including our annual reports on Form 10‑K, quarterly reports on Form 10‑Q and current reports on Form 8‑K.

Previous wording

Runway Growth Finance Corp. ("we," "us," "our," or the "Company"), a Maryland corporation formed on August 31, 2015, is structured as an externally managed, non-diversified closed-end management investment company. On August 18, 2021, we changed our name to "Runway Growth Finance Corp." from "Runway Growth Credit Fund Inc." We are a specialty finance company focused on providing senior secured loans to high growth-potential companies in technology, life sciences, healthcare information and services, business services, financial services, select consumer services and products and other high-growth industries. Our goal is to create significant value for our stockholders and the entrepreneurs we support by providing high growth-potential companies with hybrid debt and equity financing that is more flexible than traditional credit and less dilutive than equity. Our investment objective is to maximize our total return to our stockholders primarily through current income on our loan portfolio, and secondarily through capital gains on our warrants and other equity positions. Our offices are in Chicago, Illinois; Menlo Park, California; and New York, New York.

Current wording

Runway Growth Finance Corp. ("we," "us," "our," or the "Company"), a Maryland corporation formed on August 31, 2015, is structured as an externally managed, non-diversified closed-end management investment company. On August 18, 2021, we changed our name to "Runway Growth Finance Corp." from "Runway Growth Credit Fund Inc." We are a specialty finance company focused on providing senior secured loans to high growth-potential companies in technology, healthcare, business services, financial services, select consumer services and products and other high-growth industries. Our goal is to create significant value for our stockholders and the entrepreneurs we support by providing high growth-potential companies with hybrid debt and equity financing that is more flexible than traditional credit and less dilutive than equity. Our investment objective is to maximize our total return to our stockholders primarily through current income on our loan portfolio, and secondarily through capital gains on our warrants and other equity positions. Our offices are in Chicago, Illinois; Menlo Park, California; and New York, New York.

Previous wording

On August 10, 2020, we, RGC, and certain other funds and accounts sponsored or managed by RGC and/or its affiliates were granted an order (the “Order”), as amended on August 30, 2022, that permits us greater flexibility than the 1940 Act permits to negotiate the terms of co-investments if our Board of Directors determines that it would be advantageous for us to co-invest with other accounts sponsored or managed by RGC or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. We believe that the ability to co-invest with similar investment structures and accounts sponsored or managed by RGC or its affiliates will provide additional investment opportunities and the ability to achieve greater diversification. Under the terms of the Order, a majority of our independent directors are required to make certain determinations in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our and is consistent with our investment strategies and policies.

Current wording

On August 10, 2020, we, RGC, and certain other funds and accounts sponsored or managed by RGC and/or its affiliates were granted an order (the “Order”), as amended on August 30, 2022, that permits us greater flexibility than the 1940 Act permits to negotiate the terms of co-investments if our Board of Directors determines that it would be advantageous for us to co-invest with other accounts sponsored or managed by RGC or its affiliates in a manner consistent with our investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors. We believe that the ability to co-invest with similar investment structures and accounts sponsored or managed by RGC or its affiliates provides additional investment opportunities and the ability to achieve greater diversification. Under the terms of the Order, a majority of our independent directors are required to make certain determinations in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching in respect of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment strategies and policies.

Previous wording

At March 31, 2024, we had investments in 53 portfolio companies, representing 23 companies in which we held loan and warrant investments, three companies in which we held loan investments and shares of common stock, preferred stock, or a combination with warrants, four companies in which we held a loan investment only, 16 companies in which we held warrant investments only, and seven companies in which we held shares of common stock, preferred stock, or equity interests only, or a combination with warrants. At December 31, 2023, we had investments in 52 portfolio companies, representing 22 companies in which we held loan and warrant investments, three companies in which we held loan investments and shares of common, preferred stock, or a combination with warrants, four companies in which we held a loan investment only, 16 companies in which we held warrant investments only, and seven companies in which we held shares of common stock, preferred stock, or equity interests only, or a combination with warrants.

Current wording

At June 30, 2024, we had investments in 55 portfolio companies, representing 25 companies in which we held debt and warrant investments, three companies in which we held debt investments and shares of common stock, preferred stock, or a combination with warrants, three companies in which we held a debt investment only, 16 companies in which we held warrant investments only, and eight companies in which we held shares of common stock, preferred stock, or equity interests only, or a combination with warrants. At December 31, 2023, we had investments in 52 portfolio companies, representing 22 companies in which we held debt and warrant investments, three companies in which we held debt investments and shares of common, preferred stock, or a combination with warrants, four companies in which we held a debt investment only, 16 companies in which we held warrant investments only, and seven companies in which we held shares of common stock, preferred stock, or equity interests only, or a combination with warrants.

Previous wording

For the three months ended March 31, 2024, our debt investment portfolio had a dollar-weighted annualized yield of 17.4%. For thethree months ended March 31, 2023, our debt investment portfolio had a dollar-weighted annualized yield of 15.2%. We calculate the yield on dollar-weighted debt investments for any period measured as (1) total related investment income during the period divided by (2) the daily average of the fair value of debt investments outstanding during the period, including any debt investments on non-accrual status. As of March 31, 2024, our debt investments had a dollar-weighted average outstanding term of 59 months at origination and a dollar-weighted average remaining term of 37 months, or approximately 3.1 years. As of March 31, 2024, substantially all of our debt investments had an original committed principal amount of between $6.0 million and $85.0 million and pay cash interest at annual interest rates of between 8.0% and 14.8%.

Current wording

For the three and six months ended June 30, 2024, our debt investment portfolio had a dollar-weighted annualized yield of 15.1% and 15.9%, respectively. For thethree and six months ended June 30, 2023, our debt investment portfolio had a dollar-weighted annualized yield of 16.7% and 15.7%, respectively. We calculate the yield on dollar-weighted debt investments for any period measured as (1) total related investment income during the period divided by (2) the daily average of the fair value of debt investments outstanding during the period, including any debt investments on non-accrual status. As of June 30, 2024, our debt investments had a dollar-weighted average term of 58 months at origination and a dollar-weighted average remaining term of 35 months, or approximately 2.9 years. As of June 30, 2024, substantially all of our debt investments had a committed principal amount of between $6.0 million and $85.0 million and pay cash interest at annual interest rates of between 8.0% and 15.1%.

Previous wording

The following table shows our dollar-weighted annualized yield by investment type for thethree months ended March 31, 2024 and 2023:

Current wording

The following table shows our dollar-weighted annualized yield by investment type for thethree and six months ended June 30, 2024 and 2023:

Previous wording

The value of our investment portfolio will change over time due to changes in the fair value of our underlying investments, as well as changes in the composition of our portfolio resulting from purchases of new and follow-on investments as well as repayments and sales of existing investments. During the three months ended March 31, 2024, the Company funded $19.7 million in one new portfolio company, and $5.0 million in one existing portfolio company, net of upfront loan origination fees and refinances. The Company also received $34.4 million in loan prepayments from two portfolio companies and $0.4 million in scheduled principal payments from one portfolio company. There were no proceeds from the termination of warrants, sale of preferred stock, or sale of common stock. During the three months ended March 31, 2023, the Company did not fund any new portfolio companies and funded $12.9 million in five existing portfolio companies, net of upfront loan origination fees and refinances. The Company also received $10.2 million in loan repayments from two portfolio companies. There were no proceeds from the termination of warrants, sale of preferred stock, and sale of common stock.

Current wording

The value of our investment portfolio will change over time due to changes in the fair value of our underlying investments, as well as changes in the composition of our portfolio resulting from purchases of new and follow-on investments as well as repayments and sales of existing investments. During the six months ended June 30, 2024, we funded $94.4 million in three new portfolio companies, $0.7 million in one joint venture, and $5.0 million in one existing portfolio company, net of upfront loan origination fees and refinances. We also received $59.8 million in loan prepayments from three portfolio companies and $1.7 million in scheduled principal payments from one portfolio company. There were no proceeds from the termination of warrants, sale of preferred stock, sale of equity interest, or sale of common stock. During the six months ended June 30, 2023, we did not fund any new portfolio companies and funded $63.5 million in eight existing portfolio companies, net of upfront loan origination fees and refinances. We also received $98.9 million in loan prepayments from six portfolio companies and $6.8 million in scheduled principal payments from two portfolio companies. There were no proceeds from the termination of warrants, sale of preferred stock, sale of equity interest, or sale of common stock.

Previous wording

The following is a reconciliation of our investment portfolio, including U.S. Treasury Bills, for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following is a reconciliation of our investment portfolio, including U.S. Treasury Bills, for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

In addition to various risk management and monitoring tools, RGC uses an investment rating system to characterize and monitor the quality of our debt investment portfolio. Equity securities and Treasury Bills are not graded. This debt investment rating system uses a five-level numeric scale. The following is a description of the conditions associated with each investment rating:

Current wording

In addition to various risk management and monitoring tools, RGC uses an investment rating system to characterize and monitor the quality of our debt investment portfolio. Equity securities and U.S. Treasury Bills are not graded. This debt investment rating system uses a five-level numeric scale. The following is a description of the conditions associated with each investment rating:

Previous wording

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of March 31, 2024 and December 31, 2023, we have not written off any accrued and uncollected PIK interest. As of March 31, 2024, we had two loans on non-accrual status: one loan to Mingle Healthcare Solutions, Inc. with a cost basis of $5.0 million and a fair value of $3.2 million, and Snagajob, Inc, with a cost basis of $42.7 million and a fair value of $35.5 million representing 3.8% of the Company’s total investment portfolio. From being placed on non-accrual status through March 31, 2024, cumulative interest of $0.2 million would be receivable and not recorded in "Interest income from control investments" on the Consolidated Statements of Operations. As of December 31, 2023, we had no loans on non-accrual status.

Current wording

Generally, when interest and/or principal payments on a loan become past due, or if we otherwise do not expect the borrower to be able to service its debt and other obligations, we will place the loan on non-accrual status and will cease recognizing interest income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or due to a restructuring such that the interest income is deemed to be collectible. As of June 30, 2024, we had two senior secured term loans on non-accrual status; one loan to Mingle Healthcare Solutions, Inc. with a cost basis of $5.0 million and a fair value of $3.1 million, and one loan to Snagajob, Inc., with a cost basis of $42.7 million and a fair value of $30.0 million which represent 3.1% our total investment portfolio. From being placed on non-accrual status through June 30, 2024, cumulative interest of $0.4 million would be receivable from Mingle Healthcare Solutions, Inc. and not recorded in "Interest income" on the Consolidated Statements of Operations. From being placed on non-accrual status through June 30, 2024, cumulative interest of $1.8 million would be receivable from Snagajob, Inc. and $0.1 million OID would be accreted into the cost basis, for a total of $1.9 million not recorded in "Interest income" on the Consolidated Statements of Operations. As of December 31, 2023, we had no loans on non-accrual status. As of June 30, 2024, we had reversed interest income of $0.3 million related to the senior secured term loans. As of December 31, 2023, we had not reversed any accrued and uncollected interest income related to the senior secured term loans.

Previous wording

An important measure of our financial performance is "Net increase (decrease) in net assets resulting from operations" on the Consolidated Statement of Operations, which includes "Net investment income (loss)", "Net realized gain (loss)" and "Net change in unrealized gain (loss)". "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 gain (loss) on investments" is the difference between the proceeds received from dispositions of portfolio investments, and U.S. Treasury Bills and their amortized cost. "Net change in unrealized gain (loss) on investments" is the net change in the fair value of our investment portfolio.

Current wording

An important measure of our financial performance is "Net increase (decrease) in net assets resulting from operations" on the Consolidated Statement of Operations, which includes "Net investment income (loss)", "Net realized gain (loss) on investments" and "Net change in unrealized gain (loss) on investments". "Net investment income (loss)" is the difference between our income from interest, dividends, fees and other income and our operating expenses, including interest on borrowed funds. "Net realized gain (loss) on investments" is the difference between the proceeds received from dispositions of portfolio investments and U.S. Treasury Bills and their amortized cost. "Net change in unrealized gain (loss) on investments" is the net change in the fair value of our investment portfolio.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

The following table is a comparison of the results of our operations for the three months ended March 31, 2024 and 2023 (dollars in thousands):

Current wording

The following table is a comparison of the results of our operations for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

Previous wording

The basic per share figures noted above are based on weighted averages of 40,392,255 and 40,509,269 shares outstanding for the three months ended March 31, 2024 and 2023, respectively.

Current wording

The basic per share figures noted above are based on weighted averages of 39,180,767 and 40,509,269 shares outstanding for the three months ended June 30, 2024 and 2023, respectively, and 39,786,511 and 40,509,269 shares outstanding for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Investment income for the three months ended March 31, 2024 and 2023 was $40.0 million and $39.3 million, respectively, and includes non-recurring income of $3.7 million and $0.6 million, respectively. Non-recurring income includes, but is not limited to, acceleration of unaccreted OID, prepayment fees and amendment fees. The increase in investment income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to increased payment-in-kind interest income activity from non-control/non-affiliate investments.

Current wording

Investment income for the three months ended June 30, 2024 and 2023 was $34.2 million and $41.9 million, respectively, and includes non-recurring income of $0.4 million and $2.8 million, respectively. Non-recurring income includes, but is not limited to, acceleration of unaccreted OID, prepayment fees and amendment fees. The decrease in investment income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to the decrease in the average outstanding principal on interest-earning debt investments as a result of loan repayments and our loans to Snagajob, Inc., and Mingle Healthcare Solutions, Inc. moving to non-accrual status.

Previous wording

Operating expenses for the three months ended March 31, 2024 and 2023 were $21.3 million and $21.1 million, respectively. Operating expenses increased for the three months ended March 31, 2024 from the three months ended March 31, 2023 primarily due to increased performance-based incentive fees, and credit loss expense associated with the establishment of the CECL reserve. Operating expenses for the three months ended March 31, 2024 and 2023 were $0.53 and $0.52 per share, respectively.

Current wording

Operating expenses for the three months ended June 30, 2024 and 2023 were $19.6 million and $22.2 million, respectively. Operating expenses decreased for the three months ended June 30, 2024 from the three months ended June 30, 2023 primarily due to decreased performance-based incentive fees and interest expense associated with decreased average outstanding borrowings under the Credit Facility. Operating expenses per share for the three months ended June 30, 2024 and 2023 were $0.50 and $0.55, respectively.

Previous wording

Management fees for the three months ended March 31, 2024 and 2023 were $4.0 million and $4.0 million, respectively. Management fees remained flat for the three months ended March 31, 2024 from the three months ended March 31, 2023 primarily due to consistent gross assets when comparing prior quarters in arrears.

Current wording

Management fees for the three months ended June 30, 2024 and 2023 were $3.9 million and $4.3 million, respectively. Management fees decreased for the three months ended June 30, 2024 from the three months ended June 30, 2023 primarily due to decreased daily average gross assets.

Previous wording

Incentive fees for the three months ended March 31, 2024 and 2023 were $4.7 million and $4.6 million, respectively. Incentive fees increased for the three months ended March 31, 2024 from the three months ended March 31, 2023 primarily due to an increase in net investment income and increased prepayment fee income in the current quarter. For the three months ended March 31, 2024, $3.6 million of the incentive fees were payable in cash, and $1.1 million were deferred and accrued. For the three months ended March 31, 2023, $3.5 million of the incentive fees were payable in cash, and $1.1 million were deferred and accrued. Incentive fees related to PIK or deferred interest are accrued and payment is deferred until such interest is collected in cash. Incentive fees for the three months ended March 31, 2024 and 2023 were $0.12 and $0.11 per share, respectively.

Current wording

Incentive fees for the three months ended June 30, 2024 and 2023 were $3.6 million and $4.9 million, respectively. Incentive fees decreased for the three months ended June 30, 2024 from the three months ended June 30, 2023 primarily due to a decrease in net investment income in the current quarter. For the three months ended June 30, 2024, $2.9 million of the incentive fees were payable in cash and $0.7 million were deferred and accrued. For the three months ended June 30, 2023, $3.4 million of the incentive fees were payable in cash, and $1.5 million were deferred and accrued. Incentive fees related to PIK or deferred interest are accrued and payment is deferred until such interest is collected in cash. Incentive fees per share for the three months ended June 30, 2024 and 2023 were $0.09 and $0.12, respectively.

Previous wording

There was no net realized gain (loss) on investments for the three months ended March 31, 2024. The net realized loss on investments of $1.2 million for the three months ended March 31, 2023 was due to a loss of our investments in the warrants of CareCloud, Inc. and Gynesonics, Inc.

Current wording

There were no net realized gain (loss) on investments for the six months ended June 30, 2024. The net realized loss on investments of $1.2 million for the six months ended June 30, 2023 was due to a loss of our investments in the warrants of CareCloud, Inc. and Gynesonics, Inc.

Previous wording

Net change in unrealized loss on investments of $6.6 million for the three months ended March 31, 2024 was primarily due to a decrease in the fair value of our preferred stock investment in CareCloud, Inc., our senior secured loans to Snagajob.com, Inc., Mingle Healthcare Solutions, Inc., and FiscalNote, Inc., and our common stock investment in Coginiti Corp. The net change in unrealized loss on investments of $5.1 million for the three months ended March 31, 2023 was primarily due to decreases in the fair value of our senior secured loan to Gynesonics, Inc. and preferred stock in Gynesonics, Inc., partially offset by an increase in the fair value of our senior secured loan to Pivot3, Inc.

Current wording

Net change in unrealized loss on investments of $12.9 million for the six months ended June 30, 2024 was primarily due to a decrease in the fair value of our convertible note and senior secured loan to Snagajob.com, Inc., our senior secured loans to FiscalNote, Inc., and Vesta Payment Solutions, Inc., and our common stock investment in Coginiti Corp. The net change in unrealized loss on investments of $2.4 million for the six months ended June 30, 2023 was primarily due to decreases in the fair value of our investments in Gynesonics, Inc., offset by an increase in the fair value of our senior secured loans to Brivo, Inc., as well as a recovery of $1.2 million in liquidation of assets related to the senior secured loan to Pivot3, Inc., which released prior unrealized loss recorded on the investment.

Previous wording

We had a net increase in net assets resulting from operations of $12.0 million for the three months ended March 31, 2024, as compared to a net increase in net assets resulting from operations of $12.0 million for the three months ended March 31, 2023.

Current wording

We had a net increase in net assets resulting from operations of $8.3 million for the three months ended June 30, 2024, as compared to a net increase in net assets resulting from operations of $22.3 million for the three months ended June 30, 2023.

Previous wording

During the three months ended March 31, 2024, we principally funded our operations from (i) cash receipts from interest, dividend, and fee income from our investment portfolio and (ii) cash proceeds from the realization of portfolio investments through the repayments of debt investments and the sale of debt and equity investments.

Current wording

During the six months ended June 30, 2024, we principally funded our operations from (i) cash receipts from interest, dividend, and fee income from our investment portfolio and (ii) cash proceeds from the realization of portfolio investments through the repayments of debt investments and the sale of debt and equity investments.

Previous wording

During the three months ended March 31, 2024, our operating activities provided $68.6 million of cash and cash equivalents, compared to $18.5 million used during the three months ended March 31, 2023, respectively. The $87.1 million increase in cash provided by operating activities was primarily due to a $23.2 million decrease in purchases of investments and U.S. Treasury Bills and a $62.7 million increase in sales and repayments of investments and U.S. Treasury Bills.

Current wording

During the six months ended June 30, 2024, our operating activities provided $30.0 million of cash and cash equivalents, compared to $71.6 million provided during the six months ended June 30, 2023. The $41.6 million decrease in cash provided by operating activities was primarily due to a $37.1 million decrease in sales and repayments of investments and U.S. Treasury Bills.

Previous wording

During the three months ended March 31, 2024, our financing activities used $64.7 million of cash, compared to $16.0 million provided by financing activities during the three months ended March 31, 2023. The $80.7 million increase in cash flows used in financing activities was primarily due to decreased net borrowing activity of $70.0 million, increased dividend distributions of $0.8 million, and increased share repurchases of $10.6 million.

Current wording

During the six months ended June 30, 2024, our financing activities used $24.1 million of cash, compared to $39.6 million used by financing activities during the six months ended June 30, 2023. The $15.5 million decrease in cash flows used in financing activities was primarily due to increased net borrowing activity of $39.0 million, offset by increased share repurchases of $23.5 million.

Previous wording

As of March 31, 2024, our net assets totaled $529.5 million, with a net asset value per share of $13.36. We intend to continue to operate in order to generate cash flows from operations, including income earned from investments in our portfolio companies. Our primary use of funds will be investments in portfolio companies and cash distributions to holders of our common stock.

Current wording

As of June 30, 2024, our net assets totaled $506.4 million, with a net asset value per share of $13.14. We intend to continue to operate in order to generate cash flows from operations, including income earned from investments in our portfolio companies. Our primary use of funds will be investments in portfolio companies and cash distributions to holders of our common stock.

Previous wording

As of March 31, 2024, we had $319.9 million in available liquidity, including $6.9 million in cash and cash equivalents, and approximately $313.0 million available under our Credit Facility, subject to borrowing base capacity. As of March 31, 2024, we had $237.0 million of secured debt outstanding under our Credit Facility, which are floating interest rate obligations and $247.3 million of unsecured debt outstanding under 2026 and 2027 Notes, which are all fixed interest rate debt obligations. Refer to "Note 7 – Borrowings" to our consolidated financial statements in Part I, Item 1 of this Form 10-Q for additional discussion of our debt obligations.

Current wording

As of June 30, 2024, we had $249.8 million in available liquidity, including $8.8 million in cash and cash equivalents, and approximately $241.0 million available under our Credit Facility, subject to borrowing base capacity. As of June 30, 2024, we had $309.0 million of secured debt outstanding under our Credit Facility, which are floating interest rate obligations and $247.3 million of unsecured debt outstanding under the 2026 and 2027 Notes, which are all fixed interest rate debt obligations. Refer to "Note 7 – Borrowings" to our consolidated financial statements in Part I, Item 1 of this Form 10-Q for additional discussion of our debt obligations.

Previous wording

Pursuant to the 1940 Act, we are permitted to incur borrowings, issue debt securities, or issue preferred stock unless, immediately after the borrowings or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock is at least 150% (at least 200% prior to June 17, 2022). As of March 31, 2024 and December 31, 2023, our asset coverage ratio was 209% and 205%, respectively.

Current wording

Pursuant to the 1940 Act, we are permitted to incur borrowings, issue debt securities, or issue preferred stock if, immediately after the borrowings or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock is at least 150% (at least 200% prior to June 17, 2022). As of June 30, 2024 and December 31, 2023, our asset coverage ratio was 191% and 205%, respectively.

Previous wording

Our significant contractual payment obligations relate to our borrowings and deferred incentive fees. As of March 31, 2024, we had $484.3 million of debt outstanding, none of which was due within the next year, $332.0 million within 1 to 3 years, and $152.3 million beyond 3 years. As of March 31, 2024, we had $10.2 million of deferred incentive fees, $0.5 million of which was due within the next year, $5.9 million within 1 to 3 years, and $3.8 million beyond 3 years.

Current wording

Our significant contractual payment obligations relate to our borrowings and deferred incentive fees. As of June 30, 2024, we had $556.3 million of debt outstanding, none of which was due within the next year, $404.0 million within 1 to 3 years, and $152.3 million beyond 3 years. As of June 30, 2024, we had $11.0 million of deferred incentive fees, $0.5 million of which was due within the next year, $7.5 million within 1 to 3 years, and $3.0 million beyond 3 years.

Previous wording

Our unfunded commitments may be significant from time to time. As of March 31, 2024, we had a total of $235.8 million in unfunded commitments which was comprised of $200.8 million to provide debt financing to its portfolio companies and $35.0 million in unfunded commitments to provide equity financing to the Runway-Cadma I LLC. Unfunded contractual commitments depend upon a portfolio company reaching certain milestones before the debt commitment is available to the portfolio company, which is expected to affect our funding levels. These commitments are subject to the same underwriting and ongoing portfolio maintenance as the on-balance sheet financial instruments that we hold. From time to time, unfunded contractual commitments may expire without being drawn and thus do not represent future cash requirements. We maintain sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded commitments should the need arise. As of March 31, 2024, we had approximately $42.0 million of available unfunded commitments to portfolio companies that are eligible to be drawn based on achieved milestones and $35.0 million in unfunded capital commitments to Runway-Cadma I LLC. Refer to “Note 8 – Commitments and Contingencies” of our consolidated financial statements in Part I, Item 1 of this Form 10-Q for a summary of unfunded commitments by portfolio company as of March 31, 2024.

Current wording

Our unfunded commitments may be significant from time to time. As of June 30, 2024, we had a total of $254.2 million in unfunded commitments which was comprised of $219.8 million to provide debt financing to our portfolio companies and $34.4 million in unfunded commitments to provide equity financing to the Runway-Cadma I LLC. Unfunded contractual commitments depend upon a portfolio company reaching certain milestones before the debt commitment is available to the portfolio company, which is expected to affect our funding levels. These commitments are subject to the same underwriting and ongoing portfolio maintenance as the on-balance sheet financial instruments that we hold. From time to time, unfunded contractual commitments may expire without being drawn and thus do not represent future cash requirements. We maintain sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded commitments should the need arise. As of June 30, 2024, we had approximately $42.0 million of available unfunded commitments to portfolio companies that are eligible to be drawn based on achieved milestones and $34.4 million in unfunded capital commitments to Runway-Cadma I LLC. Refer to “Note 8 – Commitments and Contingencies” to our consolidated financial statements in Part I, Item 1 of this Form 10-Q for a summary of unfunded commitments by portfolio company as of June 30, 2024.

Previous wording

On February 24, 2022, our Board of Directors approved a repurchase program (the “ Initial Repurchase Program”) under which we could have repurchased up to $25.0 million of our outstanding common stock, prior to its expiration on February 24, 2023. Under the Initial Repurchase Program, we could have repurchased shares at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations. As of March 31, 2024 and December 31, 2023, we had repurchased 871,345 shares of our common stock under the Initial Repurchase Program for an aggregate purchase price of $10.8 million. The Board of Directors did not renew the Initial Repurchase Program, and it expired on February 24, 2023.

Current wording

On February 24, 2022, our Board of Directors approved a repurchase program (the “Initial Repurchase Program”) under which we were authorized to repurchase up to $25.0 million of our outstanding common stock, prior to its expiration on February 24, 2023. Under the Initial Repurchase Program, we were authorized to repurchase shares at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations. We had repurchased 871,345 shares of our common stock under the Initial Repurchase Program for an aggregate purchase price of $10.8 million. The Board of Directors did not renew the Initial Repurchase Program, and it expired on February 24, 2023.

Previous wording

On November 2, 2023, our Board of Directors approved a new share repurchase program (the "Repurchase Program"), under which we may repurchase up to $25.0 million of our outstanding shares of common stock. Under the Repurchase Program, purchases may be made at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations. As of March 31, 2024, we had repurchased 887,096 shares in connection with the Repurchase Program for an aggregate purchase price of $10.6 million. If not renewed, the Repurchase Program will terminate upon the earlier of (i) November 2, 2024 and (ii) the repurchase of $25.0 million of the Company's shares of common stock.

Current wording

On November 2, 2023, our Board of Directors approved a new share repurchase program (the "Repurchase Program"), under which we may repurchase up to $25.0 million of our outstanding shares of common stock. Under the Repurchase Program, purchases may be made at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations. As of June 30, 2024, we had repurchased 1,961,938 shares in connection with the Repurchase Program for an aggregate purchase price of $23.5 million. If not renewed, the Repurchase Program will terminate upon the earlier of (i) November 2, 2024 or (ii) the repurchase of $25.0 million of our shares of common stock.

Previous wording

During the three months ended March 31, 2024, we declared and paid dividends in the amount of $19.0 million, of which $18.8 million were distributed in cash and the remainder distributed in shares to stockholders pursuant to our Dividend Reinvestment Plan. For the three months ended March 31, 2023, we declared dividends in the amount of $18.2 million, of which $17.5 million were distributed in cash and the remainder distributed in shares to stockholders pursuant to our Dividend Reinvestment Plan.

Current wording

During the three and six months ended June 30, 2024, we declared and paid dividends in the amount of $18.5 million and $37.6 million, respectively, of which $18.2 million and $37.0 million, respectively, were distributed in cash and the remainder distributed in shares to stockholders pursuant to our Dividend Reinvestment Plan. For the three and six months ended June 30, 2023, we declared dividends in the amount of $18.2 million and $36.5 million, respectively, of which $17.5 million and $34.9 million, respectively, were distributed in cash and the remainder distributed in shares to stockholders pursuant to our Dividend Reinvestment Plan.