Portman Ridge Finance Corp

Previous wording

We are an externally managed, non-diversified closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Sierra Crest Investment Management LLC (the “Adviser”) is an affiliate of BC Partners LLP (“BC Partners”). Subject to the overall supervision of the Board, the Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals.

Current wording

We are an externally managed, non-diversified closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). Sierra Crest Investment Management LLC (the “Adviser”) is an affiliate of BC Partners LLP (“BC Partners”). Subject to the overall supervision of the Board, the Adviser is responsible for managing our business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals.

Previous wording

Pursuant to the Externalization Agreement with BCP, the Adviser became our investment adviser in exchange for a cash payment from BCP, or its affiliate, of $25 million, or $0.669672 per share of our common stock, directly to our stockholders. In addition, the Adviser (or its affiliate) will use up to $10 million of the incentive fee actually paid to the Adviser prior to the second anniversary of the Closing to buy newly issued shares of our common stock at the most recently determined net asset value per share of our common stock at the time of such purchase. In November 2020, the Adviser purchased approximately $570 thousand newly issued shares of our common stock in connection therewith, and in May 2021, the Adviser purchased approximately $4.0 million of newly issued shares of our common stock in connection therewith. In both cases, the shares were issued at the most recently determined net asset value per share of our common stock. The obligations of the Advisor to use incentive fees to purchase shares expired on April 1, 2021. For the period of one year from the first day of the first quarter following the quarter in which the Closing occurred, the Adviser will permanently forego up to the full amount of the incentive fees earned by the Adviser without recourse against or reimbursement by us, to the extent necessary in order to achieve aggregate net investment income per share of common stock for such one-year period to be at least equal to $0.40 per share, subject to certain adjustments. BCP and the Adviser’s total financial commitment to the transactions contemplated by the Externalization Agreement was $35.0 million.

Current wording

Pursuant to the Externalization Agreement with BCP, the Adviser became our investment adviser in exchange for a cash payment from BCP, or its affiliate, of $25 million, or $0.669672 per share of our common stock, directly to our stockholders. In addition, the Adviser (or its affiliate) will use up to $10 million of the incentive fee actually paid to the Adviser prior to the second anniversary of the Closing to buy newly issued shares of our common stock at the most recently determined net asset value per share of our common stock at the time of such purchase. In November 2020, the Adviser purchased approximately $0.6 million newly issued shares of our common stock in connection therewith, and in May 2021, the Adviser purchased approximately $4.0 million of newly issued shares of our common stock in connection therewith. In both cases, the shares were issued at the most recently determined net asset value per share of our common stock. The obligations of the Advisor to use incentive fees to purchase shares expired on April 1, 2021. For the period of one year from the first day of the first quarter following the quarter in which the Closing occurred, the Adviser will permanently forego up to the full amount of the incentive fees earned by the Adviser without recourse against or reimbursement by us, to the extent necessary in order to achieve aggregate net investment income per share of common stock for such one-year period to be at least equal to $0.40 per share, subject to certain adjustments. BCP and the Adviser’s total financial commitment to the transactions contemplated by the Externalization Agreement was $35.0 million.

Previous wording

In accordance with the terms of the merger agreement for the GARS Acquisition, dated June 24, 2020 (the “GARS Merger Agreement”), each share of common stock, par value $0.001 per share, of GARS (the “GARS Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $1.19 and (ii) approximately 1.917 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of GARS Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.31. In connection with the closing of the GARS Acquisition, the Board approved an increase in the size of the Board from seven members to nine members, and appointed each of Matthew Westwood and Joseph Morea to serve on the Board.

Current wording

In accordance with the terms of the merger agreement for the GARS Acquisition, dated June 24, 2020 (the “GARS Merger Agreement”), each share of common stock, par value $0.001 per share, of GARS (the “GARS Common Stock”) issued and outstanding was converted into the right to receive (i) an amount in cash, without interest, equal to approximately $1.19 and (ii) approximately 1.917 shares of common stock, par value $0.01 per share, of the Company (plus any applicable cash in lieu of fractional shares). Each share of GARS Common Stock issued and outstanding received, as additional consideration funded by the Adviser, an amount in cash, without interest, equal to approximately $0.31.

Previous wording

Total portfolio investment activity (excluding activity in short-term investments) for the nine months ended September 30, 2024 (unaudited) and for the year ended December 31, 2023, was as follows:

Current wording

Total portfolio investment activity (excluding activity in short-term investments) for the three months ended March 31, 2025 (unaudited) and for the year ended December 31, 2024, was as follows:

Previous wording

The debt investment portfolio (excluding our investments in the CLO Funds and Joint Ventures) at September 30, 2024 was spread across 28 different industries and 72 different portfolio companies with a fair value of approximately $347.0 million and average par balance per entity of approximately $2.7 million. As of September 30, 2024, nine of our investments were on non-accrual status. As of December 31, 2023, seven of our investments were on non-accrual status.

Current wording

The debt investment portfolio (excluding our investments in the CLO Funds and Joint Ventures) at March 31, 2025 was spread across 24 different industries and 72 different portfolio companies with a fair value of approximately $324.8 million and average par balance per entity of approximately $2.6 million. As of March 31, 2025, six of our investments were on non-accrual status. As of December 31, 2024, six of our investments were on non-accrual status.

Previous wording

We have made minority investments in the subordinated securities or preferred shares of CLO Funds managed by the Disposed Manager Affiliates and may selectively invest in securities issued by CLO Funds managed by other asset management companies. As of September 30, 2024 and December 31, 2023, the fair value of the CLO Fund Securities was $6.8 million and $9.0 million, respectively.

Current wording

We have made minority investments in the subordinated securities or preferred shares of CLO Funds managed by the Disposed Manager Affiliates and may selectively invest in securities issued by CLO Funds managed by other asset management companies. As of March 31, 2025 and December 31, 2024, the fair value of the CLO Fund Securities was $4.6 million and $5.2 million, respectively.

Previous wording

The fair value of the Company’s investment in the F3C Joint Venture as of September 30, 2024 and December 31, 2023 was $13.0 million and $14.3 million, respectively.

Current wording

The fair value of the Company’s investment in the F3C Joint Venture as of March 31, 2025 and December 31, 2024 was $11.4 million and $13.0 million, respectively.

Previous wording

In August 2022, we invested in Series A – Great Lakes Funding II LLC (the “Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. We treat our investment in the Great Lakes II Joint Venture as a joint venture since an affiliate of the Adviser controls a 50% voting interest in the Great Lakes II Joint Venture. In connection with the launch of the Great Lakes II Joint Venture, we entered into a series of transactions pursuant to which our prior investment in BCP Great Lakes Holdings LP, a vehicle formed as a co-investment vehicle to facilitate the participation of certain co-investors to invest, directly or indirectly, in BCP Great Lakes Funding, LLC (the “Prior Great Lakes Joint

Current wording

In August 2022, the Company invested in Series A – Great Lakes Funding II LLC (the “Great Lakes II Joint Venture,” collectively with the F3C Joint Venture the “Joint Ventures”), a joint venture with a third-party financial institution and certain other parties with an investment strategy to underwrite and hold senior, secured unitranche loans made to middle-market companies. The Company treats its investment in the Great Lakes II Joint Venture as a joint venture since affiliated funds of the Adviser collectively control a 50% voting interest in the Great Lakes II Joint Venture.

Previous wording

The Great Lakes II Joint Venture is a Delaware series limited liability company, and pursuant to the terms of the Great Lakes Funding II LLC Limited Liability Company Agreement (the “Great Lakes II LLC Agreement”), prior to the end of the investment period with respect to each series established under the Great Lakes II LLC Agreement, each member of the predecessor series would be offered the opportunity to roll its interests into any subsequent series of the Great Lakes II Joint Venture. We do not pay any advisory fees in connection with our investment in the Great Lakes II Joint Venture. Certain other funds managed by the Adviser or its affiliates have also invested in the Great Lakes II Joint Venture.

Current wording

The Great Lakes II Joint Venture is a Delaware series limited liability company, and pursuant to the terms of the Great Lakes Funding II LLC Limited Liability Company Agreement (the “Great Lakes II LLC Agreement”), prior to the end of the investment period with respect to each series established under the Great Lakes II LLC Agreement, each member of the predecessor series would be offered the opportunity to roll its interests into any subsequent series of the Great Lakes II Joint Venture. We do not pay any advisory fees in connection with our investment in the Great Lakes II Joint Venture.

Previous wording

The fair value of our investment in the Great Lakes II Joint Venture as of September 30, 2024 and December 31, 2023, was $39.3 million and $45.0 million, respectively. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the Great Lakes II LLC Agreement, we generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon our interests in the Great Lakes II Joint Venture, except that we may sell or otherwise transfer our interests with the consent of the managing members of the Great Lakes II Joint Venture or to an affiliate or a successor to substantially all of our assets.

Current wording

The fair value of our investment in the Great Lakes II Joint Venture as of March 31, 2025 and December 31, 2024, was $39.1 million and $41.1 million, respectively. Fair value has been determined utilizing the practical expedient pursuant to ASC 820-10. Pursuant to the terms of the Great Lakes II LLC Agreement, we generally may not effect any direct or indirect sale, transfer, assignment, hypothecation, pledge or other disposition of or encumbrance upon our interests in the Great Lakes II Joint Venture, except that we may sell or otherwise transfer our interests with the consent of the managing members of the Great Lakes II Joint Venture or to an affiliate or a successor to substantially all of our assets.

Previous wording

As of September 30, 2024 and December 31, 2023, we had an unfunded commitment of $11.2 million and $5.5 million to the Great Lakes II Joint Venture, respectively.

Current wording

As of March 31, 2025 and December 31, 2024, we had an unfunded commitment of $8.7 million and $8.2 million to the Great Lakes II Joint Venture, respectively.

Previous wording

Set forth below is a discussion of our results of operations for the three and nine months ended September 30, 2024 and 2023.

Current wording

Set forth below is a discussion of our results of operations for the three months ended March 31, 2025 and 2024.

Previous wording

Revenues consist primarily of investment income from interest and dividends on our investment portfolio and various ancillary fees related to our investment holdings. Investment income for the three months ended September 30, 2024 and 2023 was approximately $15.2 million and $18.6 million, respectively. Investment income for the nine months ended September 30, 2024 and 2023 was approximately $48.0 million and $58.5 million, respectively.

Current wording

Revenues consist primarily of investment income from interest and dividends on our investment portfolio and various ancillary fees related to our investment holdings. Investment income for the three months ended March 31, 2025 and 2024 was approximately $12.1 million and $16.5 million, respectively.

Previous wording

The majority of investment income is attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the three months ended September 30, 2024 and 2023, approximately $12.7 million and $15.8 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the nine months ended September 30, 2024 and 2023, approximately $40.4 million and $48.1 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio.

Current wording

The majority of investment income is attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the three months ended March 31, 2025 and 2024, approximately $10.3 million and $14.2 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio.

Previous wording

Investment Income on Investments in CLO Fund Securities. For the three months ended September 30, 2024 and 2023, approximately $0.3 million and $0.5 million, respectively, of investment income was attributable to investments in CLO Fund Securities. For the nine months ended September 30, 2024 and 2023, approximately $1.3 million and $1.9 million, respectively, of investment income was attributable to investments in CLO Fund Securities. We generate investment income from our investments in the securities (typically preferred shares or subordinated securities) of CLO Funds. CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which we have an investment are generally diversified secured or unsecured corporate debt. Our CLO Fund Securities that are subordinated securities or preferred shares (“junior securities”) are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the SOFR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior bond holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and resulting cash distributions to us can vary significantly.

Current wording

Investment Income on Investments in CLO Fund Securities. For the three months ended March 31, 2025 and 2024, approximately $0.1 million and $0.6 million, respectively, of investment income was attributable to investments in CLO Fund Securities. We generate investment income from our investments in the securities (typically preferred shares or subordinated securities) of CLO Funds. CLO Funds invest primarily in broadly syndicated non-investment grade loans, high-yield bonds and other credit instruments of corporate issuers. The underlying assets in each of the CLO Funds in which we have an investment are generally diversified secured or unsecured corporate debt. Our CLO Fund Securities that are subordinated securities or preferred shares (“junior securities”) are subordinated to senior note holders who typically receive a return on their investment at a fixed spread relative to the SOFR index. The CLO Funds are leveraged funds and any excess cash flow or “excess spread” (interest earned by the underlying securities in the fund less payments made to senior bond holders and less fund expenses and management fees) is paid to the holders of the CLO Fund’s subordinated securities or preferred shares. The level of excess spread from CLO Fund Securities can be impacted by the timing and level of the resetting of the benchmark interest rate for the underlying assets (which reset at various times throughout the quarter) in the CLO Fund and the related CLO Fund note liabilities (which reset at each quarterly distribution date); in periods of short-term and volatile changes in the benchmark interest rate, the levels of excess spread and resulting cash distributions to us can vary significantly.

Previous wording

Interest income on investments in CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, Beneficial Interests in Securitized Financial Assets (“ASC 325-40”), based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in our U.S. generally accepted accounting principles (“GAAP”) statement of operations differs from both the tax–basis investment income and from the cash distributions actually received by us during the period. As a RIC, we anticipate a timely distribution of our tax-basis taxable income.

Current wording

Interest income on investments in CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, Beneficial Interests in Securitized Financial Assets (“ASC 325-40”), based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in our U.S. GAAP statement of operations differs from both the tax–basis investment income and from the cash distributions actually received by us during the period. As a RIC, we anticipate a timely distribution of our tax-basis taxable income.

Previous wording

Investments in Joint Ventures. For the three months ended September 30, 2024 and 2023, we recognized $1.7 million and $2.1 million, respectively, in investment income from our investments in Joint Ventures. For the nine months ended September 30, 2024 and 2023, we recognized $5.1 million and $6.9 million, respectively, in investment income from our investments in Joint Ventures. As of September 30, 2024, and December 31, 2023, the fair value of our investments in Joint Ventures was approximately $52.3 million and $59.3 million, respectively. The final determination of the tax attributes of distributions from Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.

Current wording

Investments in Joint Ventures. For the three months ended March 31, 2025 and 2024, we recognized $1.4 million and $1.7 million, respectively, in investment income from our investments in Joint Ventures. As of March 31, 2025, and December 31, 2024, the fair value of our investments in Joint Ventures was approximately $50.5 million and $54.2 million, respectively. The final determination of the tax attributes of distributions from Joint Ventures is made on an annual (full calendar year) basis at the end of the year based upon taxable income and distributions for the full year. Therefore, any estimate of tax attributes of distributions made on an interim basis may not be representative of the actual tax attributes of distributions for the full year.

Previous wording

Fees and other income. Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt. For the three months ended September 30, 2024 and 2023, approximately $0.2 million and $0.2 million, respectively, of investment income was attributable to fees and other income. For the nine months ended September 30, 2024 and 2023, approximately $0.5 million and $1.7 million, respectively, of investment income was attributable to fees and other income.

Current wording

Fees and other income. Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt. For the three months ended March 31, 2025 and 2024, less than $0.1 million and $0.2 million, respectively, of investment income was attributable to fees and other income.

Previous wording

Total expenses for the three months ended September 30, 2024 and 2023 were approximately $9.4 million and $11.4 million, respectively. Total expenses for the nine months ended September 30, 2024 and 2023 were approximately $29.5 million and $34.9 million, respectively. The decrease in total expenses for the three and nine months ended September 30, 2024, in comparison to the prior year, was primarily driven by a decrease in average debt outstanding as well as lower incentive fees.

Current wording

Total expenses for the three months ended March 31, 2025 and 2024 were approximately $7.8 million and $10.3 million, respectively. The decrease in total expenses for the three months ended March 31, 2025, in comparison to the prior year, was primarily driven by a decrease in average debt outstanding and lower cost of capital as well as lower management and incentive fees.

Previous wording

Management Fees and Incentive Fees. Management fees for the three months ended September 30, 2024 and 2023 were approximately $1.6 million and $1.8 million, respectively. Management fees for the nine months ended September 30, 2024 and 2023 were approximately $5.0 million and $5.7 million, respectively. Incentive fees for the three months ended September 30, 2024 and 2023 were approximately $1.2 million and $1.5 million, respectively. Incentive fees for the nine months ended September 30, 2024 and 2023 were approximately $3.8 million and $5.0 million, respectively.

Current wording

Management Fees and Incentive Fees. Management fees for the three months ended March 31, 2025 and 2024 were approximately $1.5 million and $1.7 million, respectively. Incentive fees for the three months ended March 31, 2025 and 2024 were approximately $0.9 million and $1.2 million, respectively.

Previous wording

Interest and Amortization of Debt Issuance Costs. Interest expense is dependent on the average outstanding balance on our borrowings and the base index rate for the period. Debt issuance costs represent fees and other direct costs incurred in connection with our borrowings. These amounts are capitalized and amortized over the expected term of the borrowing. For the three months ended September 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $5.1 million and $6.3 million, respectively, on average debt outstanding of $277.3 million and $343.0 million, respectively. For the nine months ended September 30, 2024 and 2023, interest expense and amortization on debt issuance costs and discount for the period was approximately $16.2 million and $19.0 million, respectively, on average debt outstanding of $292.1 million and $359.6 million, respectively.

Current wording

Interest and Amortization of Debt Issuance Costs. Interest expense is dependent on the average outstanding balance on our borrowings and the base index rate for the period. Debt issuance costs represent fees and other direct costs incurred in connection with our borrowings. These amounts are capitalized and amortized over the expected term of the borrowing. For the three months ended March 31, 2025 and 2024, interest expense and amortization on debt issuance costs and discount for the period was approximately $4.3 million and $5.7 million, respectively, on average debt outstanding of $261.5 million and $310.5 million, respectively.

Previous wording

Directors' Expense. Directors' expense for the three months ended September 30, 2024 and 2023 were approximately $0.1 million and $0.1 million, respectively. Directors' expense for the nine months ended September 30, 2024 and 2023 were approximately $0.5 million and $0.5 million, respectively

Current wording

Directors' Expense. Directors' expense for the three months ended March 31, 2025 and 2024 were approximately $0.1 million and $0.2 million, respectively.

Previous wording

For the three months ended September 30, 2024 and 2023, professional fees totaled approximately $0.3 million and $0.5 million, respectively. For the nine months ended September 30, 2024 and 2023, professional fees totaled approximately $1.4 million and $1.5 million, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, professional fees totaled approximately $0.5 million and $0.6 million, respectively.

Previous wording

For the three months ended September 30, 2024 and 2023, administrative services expense was approximately $0.6 million and $0.6 million, respectively. For the nine months ended September 30, 2024 and 2023, administrative services expense was approximately $1.3 million and $1.9 million, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, administrative services expense was approximately $0.4 million and $0.4 million, respectively.

Previous wording

For the three months ended September 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.4 million and $0.4 million, respectively. For the nine months ended September 30, 2024 and 2023, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $1.3 million and $1.3 million, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.1 million and $0.5 million, respectively.

Previous wording

For the nine months ended September 30, 2024, net investment income was approximately $18.5 million, or $1.99 per basic and diluted share, while tax-basis distributable income was approximately $18.5 million, or $1.99 per basic and diluted share. For the nine months ended September 30, 2023, net investment income was approximately $23.6 million, or $2.48 per basic and diluted share, while tax-basis distributable income was approximately $20.3 million, or $2.13 per basic and diluted share.

Current wording

For the three months ended March 31, 2025, net investment income was approximately $4.3 million, or $0.47 per basic and diluted share, while tax-basis distributable income was approximately $4.7 million, or $0.51 per basic and diluted share. For the three months ended March 31, 2024, net investment income was approximately $6.2 million, or $0.67 per basic and diluted share, while tax-basis distributable income was approximately $6.8 million, or $0.73 per basic and diluted share.

Previous wording

Investments are carried at fair value, with changes in fair value recorded as unrealized appreciation (depreciation) in the statement of operations. When an investment is sold or liquidated, any previously recognized unrealized appreciation (depreciation) is reversed and a corresponding amount is recognized as realized gain (loss). During the three and nine months ended September 30, 2024, the Company recognized $11.4 million and $20.4 million of net realized losses on our portfolio investments, respectively. During the three and nine months ended September 30, 2023, we recognized $1.6 million and $11.2 million of net realized losses on our portfolio investments, respectively.

Current wording

Investments are carried at fair value, with changes in fair value recorded as unrealized appreciation (depreciation) in the statement of operations. When an investment is sold or liquidated, any previously recognized unrealized appreciation (depreciation) is reversed and a corresponding amount is recognized as realized gain (loss). During the three months ended March 31, 2025, the Company recognized $0.2 million of net realized losses on our portfolio investments. During the three months ended March 31, 2024, the Company recognized $2.1 million of net realized losses on our portfolio investments.

Previous wording

During the nine months ended September 30, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $(1.4) million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $(1.0) million on CLO Fund Securities, $4.1 million on equity securities, $0.3 million on our Joint Ventures investments, and $(4.8) million on our debt securities. During the nine months ended September 30, 2023, our total investments had net change in unrealized appreciation (depreciation) of approximately $(8.4) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $2.8 million on CLO Fund Securities, $(3.5) million on equity securities, $(3.4) million on our Joint Ventures investments, and $(4.3) million on our debt securities.

Current wording

During the three months ended March 31, 2025, our total investments had net change in unrealized appreciation (depreciation) on investments of approximately $(3.9) million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $1.3 million on equity securities, $(2.8) million on our Joint Ventures investments, $1.0 million on CLO Fund Securities, and $(3.4) million on our debt securities. During the three months ended March 31, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $0.1 million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $(0.1) million on CLO Fund Securities, $0.1 million on equity securities, $0.3 million on our Joint Ventures investments, and $(0.2) million on our debt securities.

Previous wording

The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2024, was $(1.5) million, or $(0.16) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the three months ended September 30, 2023, was $7.4 million, or $0.78 per basic and diluted share.The net increase (decrease) in net assets resulting from operations for the nine months ended September 30, 2024, was $(3.4) million, or $(0.37) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the nine months ended September 30, 2023, was $4.4 million, or $0.46 per basic and diluted share.

Current wording

The net increase (decrease) in net assets resulting from operations for the three months ended March 31, 2025, was $(0.1) million, or $(0.01) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the three months ended March 31, 2024, was $4.5 million, or $0.48 per basic and diluted share.

Previous wording

We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of September 30, 2024, we had approximately $267.5 million of par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 170%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act. We may also borrow amounts of up to 5% of the value of our total assets for temporary purposes.

Current wording

We use borrowed funds, known as “leverage,” to make investments and to attempt to increase returns to our shareholders by reducing our overall cost of capital. As a BDC, we are limited in the amount of leverage we can incur under the 1940 Act. We are only allowed to borrow amounts such that our asset coverage, as defined in the 1940 Act, equals at least 150% after such borrowing. As of March 31, 2025, we had approximately $255.4 million of par value of outstanding borrowings and our asset coverage ratio of total assets to total borrowings was 168%, compliant with the minimum asset coverage level of 150% generally required for a BDC by the 1940 Act. We may also borrow amounts of up to 5% of the value of our total assets for temporary purposes.

Previous wording

During the second quarter of 2021, we issued $108.0 million aggregate principal amount of our 4.875% Notes due 2026. The net proceeds for the 4.875% Notes due 2026, after the payment of underwriting expenses, were approximately $104.6 million. Interest on the 4.875% Notes due 2026 is paid semi-annually on April 30 and October 30, at a rate of 4.875%. The 4.875% Notes due 2026 mature on April 30, 2026 and are general unsecured obligations. The indenture governing the 4.875% Notes Due 2026 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act relating to borrowing and dividends. At September 30, 2024, there was approximately $108.0 million of principal amount outstanding, and we were in compliance with all of our debt covenants on the 4.875% Notes due 2026.

Current wording

During the second quarter of 2021, we issued $108.0 million aggregate principal amount of our 4.875% Notes due 2026. The net proceeds for the 4.875% Notes due 2026, after the payment of underwriting expenses, were approximately $104.6 million. Interest on the 4.875% Notes due 2026 is paid semi-annually on April 30 and October 30, at a rate of 4.875%. The 4.875% Notes due 2026 mature on April 30, 2026 and are general unsecured obligations. The indenture governing the 4.875% Notes Due 2026 contains certain restrictive covenants, including compliance with certain provisions of the 1940 Act relating to borrowing and dividends. As of March 31, 2025, there was approximately $108.0 million of principal amount outstanding, and we were in compliance with all of our debt covenants on the 4.875% Notes due 2026.

Previous wording

At September 30, 2024, GLPRF LLC was in compliance with all of its debt covenants and there was approximately $159.5 million principal amount of borrowings was outstanding under the Revolving Credit Facility.

Current wording

At March 31, 2025, GLPRF LLC was in compliance with all of its debt covenants and there was approximately $147.4 million principal amount of borrowings was outstanding under the Revolving Credit Facility.

Previous wording

The following table sets forth the quarterly distributions paid by us since 2021.

Current wording

The following table sets forth the quarterly distributions paid by us since the beginning of 2022.

Previous wording

On March 6, 2023, the Board of Directors of the Company approved a $10 million stock repurchase program (the “Stock Repurchase Program”) for an approximately one-year period, effective March 6, 2023 and terminating on March 31, 2024. Under this repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise subject to any law or agreement to which we are party including any restrictions under the 1940 Act and in the indenture for our 4.875% Notes due 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This Stock Repurchase Program may be suspended or discontinued at any time. On March 11, 2024, the Board of Directors of the Company authorized a renewed stock repurchase program of up to $10 million (the “Renewed Stock Repurchase Program”) for an approximately one-year period, effective March 11, 2024 and terminating on March 31, 2025. The terms and conditions of the Renewed Stock Repurchase Program are substantially similar to the prior Stock Repurchase Program. The Renewed Stock Repurchase Program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share.

Current wording

On March 6, 2023, the Board of Directors of the Company approved a $10 million stock repurchase program (the “Stock Repurchase Program”) for an approximately one-year period, effective March 6, 2023 and terminating on March 31, 2024. Under this repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise subject to any law or agreement to which we are party including any restrictions under the 1940 Act and in the indenture for our 4.875% Notes due 2026. The timing and actual number of shares repurchased will depend on a variety of factors, including legal requirements, price, and economic and market conditions. This Stock Repurchase Program may be suspended or discontinued at any time. On March 11, 2024, the Board of Directors of the Company authorized a renewed stock repurchase program of up to $10 million (the “Renewed Stock Repurchase Program”) for an approximately one-year period, effective March 11, 2024 and terminating on March 31, 2025. The terms and conditions of the Renewed Stock Repurchase Program are substantially similar to the prior Stock Repurchase Program. The Renewed Stock Repurchase Program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share. On March 12, 2025, the Board of Directors of the Company authorized once more a renewed stock repurchase program of up to $10 million (the “2025 Stock Repurchase Program”) for an approximately one-year period, effective March 12, 2025 and terminating on March 31, 2026. The terms and conditions of the 2025 Stock Repurchase Program are substantially similar to the prior Renewed Stock Repurchase Program. The 2025 Stock Repurchase Program may be suspended or discontinued at any time. Subject to these restrictions, we will selectively pursue opportunities to repurchase shares which are accretive to net asset value per share.

Previous wording

From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our balance sheet. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of September 30, 2024, and December 31, 2023, we had approximately $31.7 million and $28.6 million commitments to fund investments, respectively. We may also enter into derivative contracts with off-balance sheet risk in connection with its investing activities.

Current wording

From time-to-time we are a party to financial instruments with off-balance sheet risk in the normal course of business in order to meet the needs of our investment in portfolio companies. Such instruments include commitments to extend credit and may involve, in varying degrees, elements of credit risk in excess of amounts recognized on our consolidated statements of assets and liabilities. Prior to extending such credit, we attempt to limit our credit risk by conducting extensive due diligence, obtaining collateral where necessary and negotiating appropriate financial covenants. As of March 31, 2025, and December 31, 2024, we had approximately $26.5 million and $27.2 million commitments to fund investments, respectively. We may also enter into derivative contracts with off-balance sheet risk in connection with our investing activities.

Previous wording

Pursuant to ASC 946: Financial Services — Investment Companies (“ASC 946”), we reflect our investments on our balance sheet at their determined fair value with unrealized gains and losses resulting from changes in fair value reflected as a component of unrealized gains or losses on our statements of operations. Fair value is the amount that would be received to sell the investments in an orderly transaction between market participants at the measurement date (i.e., the exit price).

Current wording

Pursuant to ASC 946: Financial Services — Investment Companies (“ASC 946”), we reflect our investments on our consolidated statements of assets and liabilities at their determined fair value with unrealized gains and losses resulting from changes in fair value reflected as a component of unrealized gains or losses on our statements of operations. Fair value is the amount that would be received to sell the investments in an orderly transaction between market participants at the measurement date (i.e., the exit price).

Previous wording

Our Adviser may consider other methods of valuation to determine the fair value of investments as appropriate in conformity with GAAP.

Current wording

Our Adviser may consider other methods of valuation to determine the fair value of investments as appropriate in conformity with U.S. GAAP.

Previous wording

Interest income, including amortization of premium and accretion of discount and accrual payment-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. We generally place a loan on non-accrual status and cease recognizing interest income on such loan or security when a loan or security becomes 90 days or more past due or if we otherwise do not expect the debtor to be able to service its debt obligations. For investments with PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible (i.e. via a partial or full non-accrual). Loans which are on partial or full non-accrual remain in such status until the borrower has demonstrated the ability and intent to pay contractual amounts due or such loans become current. As of September 30, 2024, nine of our investments were on non-accrual status.

Current wording

Interest income, including amortization of premium and accretion of discount and accrual of payment-in-kind (“PIK”) interest, is recorded on the accrual basis to the extent that such amounts are expected to be collected. We generally place a loan or security on non-accrual status and cease recognizing interest income on such loan or security when a loan or security becomes 90 days or more past due or if we otherwise do not expect the debtor to be able to service its debt obligations. For investments with PIK interest, which represents contractual interest accrued and added to the principal balance that generally becomes due at maturity, we will not accrue PIK interest if the portfolio company valuation indicates that the PIK interest is not collectible (i.e. via a partial or full non-accrual). Loans which are on partial or full non-accrual remain in such status until the borrower has demonstrated the ability and intent to pay contractual amounts due or such loans become current. As of March 31, 2025, six of our debt investments were on non-accrual status.

Previous wording

GAAP-basis investment income on CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from both the tax-basis investment income and from the cash distributions actually received by us during the period. For U.S. tax purposes, these CLO equity investments are treated as PFICs. Taxable income is provided on a PFIC statement, where income and capital gains are determined based on the U.S. shareholder's proportionate ownership of the PFIC.

Current wording

U.S. GAAP-basis investment income on CLO equity investments is recorded using the effective interest method in accordance with the provisions of ASC 325-40, based on the anticipated yield and the estimated cash flows over the projected life of the investment. Yields are revised when there are changes in actual or estimated projected future cash flows due to changes in prepayments and/or re-investments, credit losses or asset pricing. Changes in estimated yield are recognized as an adjustment to the estimated yield prospectively over the remaining life of the investment from the date the estimated yield was changed. Accordingly, investment income recognized on CLO equity securities in the U.S. GAAP statement of operations differs from both the tax-basis investment income and from the cash distributions actually received by us during the period. For U.S. tax purposes, these CLO equity investments are generally treated as PFICs. Taxable income is provided on a PFIC statement, where income and capital gains are determined based on the U.S. shareholder's proportionate ownership of the PFIC.

Previous wording

Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt. Commitment and facility fees are generally recognized as income over the life of the underlying loan, whereas due diligence, structuring, transaction service and management service fees are generally recognized as income when the services are rendered.

Current wording

Origination fees (to the extent services are performed to earn such income upon closing), amendment fees, consent fees, and other fees associated with investments in portfolio companies are recognized as income when they are earned. Prepayment penalties received by the Company for debt instruments repaid prior to maturity date are recorded as income upon receipt.