Portman Ridge Finance Corp
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
BCIC$6.17+3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-066919
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-104992
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 179 previous paragraphs and 182 current paragraphs.
147 unchanged; 31 reworded; 1 added; 1 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 11 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
On July 15, 2025, the Company announced the completion of its acquisition of Logan Ridge Finance Corporation, a Maryland corporation (“LRFC”, and such transaction, the “LRFC Acquisition”), pursuant to the terms of the merger agreement, dated January 29, 2025 (the “LRFC Merger Agreement”). To effect the acquisition, a wholly owned merger subsidiary of the Company merged with and into LRFC, with LRFC surviving the merger as the Company’s wholly owned subsidiary. Immediately thereafter and as a single integrated transaction, LRFC consummated a second merger, whereby LRFC merged with and into the Company, with the Company surviving the merger. Based on July 11, 2025 financial data, the combined company had total assets in excess of $600 million. Under the terms of the LRFC Merger Agreement, each share of LRFC common stock issued and outstanding was converted into the right to receive 1.500 newly-issued shares of common stock of the Company with cash to be paid (without interest) in lieu of fractional shares. As additional consideration funded by LRFC’s investment adviser, LRFC shareholders of record as of May 6, 2025 received a cash payment of $0.47 per share. In addition, LRFC shareholders of record as of July 14, 2025 received a tax distribution of $0.38 per share from LRFC. The Company will seek to leverage the combined company's enhanced scale, further diversified portfolio, cost savings due to lower overall operating expenses, and improved stock trading liquidity to deliver compelling risk-adjusted returns for its shareholders. Please see the Company's Current Report on Form 8-K filed on July 16, 2025 for more information.
Removed paragraphs (1)
Previous report
On January 29, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Logan Ridge Finance Corporation, a Maryland corporation (“LRFC”), Portman Ridge Merger Sub, Inc., a Maryland corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub”); solely for the limited purposes set forth therein, Mount Logan Management LLC, a Delaware limited liability company and the external investment adviser to LRFC (“Mount Logan”); and, solely for the limited purposes set forth therein, the Adviser. The Merger Agreement provides that, subject to the conditions set forth therein, (i) at the effective time of the First Merger (the “Effective Time”), Merger Sub will be merged with and into LRFC (the “First Merger”), with LRFC continuing as the surviving company and as a wholly-owned subsidiary of the Company, and (ii) immediately after the Effective Time, LRFC will merge with and into the Company (the “Second Merger” and, together with the First Merger, the “Mergers”), with the Company continuing as the surviving company. Both the Board of Directors of the Company and LRFC’s board of directors, including all of their respective independent directors who are not “interested persons” of either the Company or LRFC or the Adviser or Mount Logan, in each case, on the recommendation of special committees comprised solely of certain independent directors of the Company or LRFC, as applicable (each, a “Special Committee”), have approved, among other things, the Merger Agreement and the transactions contemplated thereby. Consummation of the Mergers, which is currently anticipated to occur in the second quarter of calendar year 2025, is subject to certain closing conditions, including requisite approvals of the Company’s and LRFC’s stockholders. Subject to the terms and conditions of the Merger Agreement, at the Effective Time, each share of LRFC’s common stock issued and outstanding immediately prior to the Effective Time (other than shares owned by the Company or any of its consolidated subsidiaries, including Merger Sub) will be converted into the right to receive 1.500 newly-issued shares of common stock of the Company with cash to be paid (without interest) in lieu of fractional shares. In addition, pursuant to a fee waiver letter executed on January 29, 2025, between the Company and the Adviser, the Adviser has agreed to waive up to $1.5 million of the incentive fees otherwise payable to it by Company over the eight consecutive quarters following the closing of the Mergers, subject to the closing of the Mergers.
Reworded paragraphs (31)
Previous 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:
Current wording
Total portfolio investment activity (excluding activity in short-term investments) for the six months ended June 30, 2025 (unaudited) and for the year ended December 31, 2024, was as follows:
Previous wording
As of March 31, 2025 and December 31, 2024, our Debt Securities Portfolio had a weighted average annualized yield of approximately 11.0% (excluding income from non-accruals and collateralized loan obligations) and and 11.3% (excluding income from non-accruals and collateralized loan obligations), respectively.
Current wording
As of June 30, 2025 and December 31, 2024, our Debt Securities Portfolio had a weighted average annualized yield of approximately 10.7% (excluding income from non-accruals and collateralized loan obligations) and 11.3% (excluding income from non-accruals and collateralized loan obligations), respectively.
Previous 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.
Current wording
The debt investment portfolio (excluding our investments in the CLO Funds and Joint Ventures) at June 30, 2025 was spread across 25 different industries and 69 different portfolio companies with a fair value of approximately $323.1 million and average par balance per entity of approximately $2.6 million. As of June 30, 2025, six of our debt investments were on non-accrual status. However, for a subset of the non-accrual population, the Company continues to recognize interest income on a cash basis, i.e., only when cash payments are actually received. Refer to the Consolidated Schedule of Investments for further details. As of December 31, 2024, six of our debt 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 March 31, 2025 and December 31, 2024, the fair value of the CLO Fund Securities was $4.6 million and $5.2 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 June 30, 2025 and December 31, 2024, the fair value of the CLO Fund Securities was $3.3 million and $5.2 million, respectively.
Previous 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.
Current wording
The fair value of the Company’s investment in the F3C Joint Venture as of June 30, 2025 and December 31, 2024 was $11.3 million and $13.0 million, respectively.
Previous 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.
Current wording
The fair value of our investment in the Great Lakes II Joint Venture as of June 30, 2025 and December 31, 2024, was $33.4 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 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.
Current wording
As of June 30, 2025 and December 31, 2024, we had an unfunded commitment of $13.7 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 months ended March 31, 2025 and 2024.
Current wording
Set forth below is a discussion of our results of operations for the three and six months ended June 30, 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 March 31, 2025 and 2024 was approximately $12.1 million and $16.5 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 June 30, 2025 and 2024 was approximately $12.6 million and $16.3 million, respectively. Investment income for the six months ended June 30, 2025 and 2024, was approximately $24.7 million and $32.9 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 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.
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 June 30, 2025 and 2024, approximately $10.9 million and $13.9 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio. For the six months ended June 30, 2025 and 2024, approximately $21.3 million and $28.1 million, respectively, of investment income was attributable to interest income, inclusive of payment-in-kind income, on our Debt Securities Portfolio.
Previous wording
As of March 31, 2025, our debt investment portfolio, which represented 79.9% of the fair value of our total portfolio, had a weighted average annualized yield of approximately 11.0% (excluding income from non-accruals and collateralized loan obligations). As of March 31, 2025, 11.5% of the fair value of our debt investment portfolio was bearing a fixed rate of interest. As of December 31, 2024, our debt investment portfolio, which represented 79.2% of the fair value of our total portfolio, had a weighted average annualized yield of approximately 11.3% (excluding income from non-accruals and collateralized loan obligations). As of December 31, 2024, 9.9% of the fair value of our debt investment portfolio was bearing a fixed rate of interest.
Current wording
As of June 30, 2025, our debt investment portfolio, which represented 81.8% of the fair value of our total portfolio, had a weighted average annualized yield of approximately 10.7% (excluding income from non-accruals and collateralized loan obligations). As of June 30, 2025, 13.1% of the fair value of our debt investment portfolio was bearing a fixed rate of interest. As of December 31, 2024, our debt investment portfolio, which represented 79.2% of the fair value of our total portfolio, had a weighted average annualized yield of approximately 11.3% (excluding income from non-accruals and collateralized loan obligations). As of December 31, 2024, 9.9% of the fair value of our debt investment portfolio was bearing a fixed rate of interest.
Previous 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.
Current wording
Investment Income on Investments in CLO Fund Securities. For the three months ended June 30, 2025 and 2024, approximately $0.2 million and $0.5 million, respectively, of investment income was attributable to investments in CLO Fund Securities. For the six months ended June 30, 2025 and 2024, approximately $0.3 million and $1.1 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
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.
Current wording
Investments in Joint Ventures. For the three months ended June 30, 2025 and 2024, we recognized $1.2 million and $1.8 million, respectively, in investment income from our investments in Joint Ventures. For the six months ended June 30, 2025 and 2024, we recognized $2.6 million and $3.5 million, respectively, in investment income from our investments in Joint Ventures. As of June 30, 2025, and December 31, 2024, the fair value of our investments in Joint Ventures was approximately $44.6 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 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.
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 June 30, 2025 and 2024, approximately $0.1 million and $0.1 million, respectively, of investment income was attributable to fees and other income. For the six months ended June 30, 2025 and 2024, approximately $0.3 million and $0.3 million, respectively, of investment income was attributable to fees and other income.
Previous 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.
Current wording
Total expenses for the three months ended June 30, 2025 and 2024 were approximately $8.1 million and $9.9 million, respectively. Total expenses for the six months ended June 30, 2025 and 2024 were approximately $15.9 million and $20.2 million, respectively. The decrease in total expenses for the three and six months ended June 30, 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 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.
Current wording
Management Fees and Incentive Fees. Management fees for the three months ended June 30, 2025 and 2024 were approximately $1.4 million and $1.7 million, respectively.Management fees for the six months ended June 30, 2025 and 2024 were approximately $2.9 million and $3.4 million, respectively. Incentive fees for the three months ended June 30, 2025 and 2024 were approximately $1.0 million and $1.4 million, respectively. Incentive fees for the six months ended June 30, 2025 and 2024 were approximately $1.9 million and $2.6 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 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.
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 June 30, 2025 and 2024, interest expense and amortization on debt issuance costs and discount for the period was approximately $4.2 million and $5.4 million, respectively, on average debt outstanding of $255.4 million and $288.7 million, respectively. For the six months ended June 30, 2025 and 2024, interest expense and amortization on debt issuance costs and discount for the period was approximately $8.5 million and $11.1 million, respectively, on average debt outstanding of $258.4 million and $299.7 million, respectively.
Previous 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.
Current wording
Directors' Expense. Directors' expense for the three months ended June 30, 2025 and 2024 were approximately $0.1 million and $0.2 million, respectively. Directors' expense for the six months ended June 30, 2025 and 2024 were approximately $0.3 million and $0.2 million, respectively.
Previous wording
For the three months ended March 31, 2025 and 2024, professional fees totaled approximately $0.5 million and $0.6 million, respectively.
Current wording
For the three months ended June 30, 2025 and 2024, professional fees totaled approximately $0.4 million and $0.6 million, respectively. For the six months ended June 30, 2025 and 2024, professional fees totaled approximately $0.9 million and $1.4 million, respectively.
Previous wording
For the three months ended March 31, 2025 and 2024, administrative services expense was approximately $0.4 million and $0.4 million, respectively.
Current wording
For the three months ended June 30, 2025 and 2024, administrative services expense was approximately $0.5 million and $0.4 million, respectively. For the six months ended June 30, 2025 and 2024, administrative services expense was approximately $0.9 million and $0.7 million, respectively.
Previous 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.
Current wording
For the three months ended June 30, 2025 and 2024, 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 six months ended June 30, 2025 and 2024, other general and administrative expenses, which includes insurance, technology and other office and administrative expenses, totaled approximately $0.5 million and $0.9 million, respectively.
Previous 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.
Current wording
For the three months ended June 30, 2025, net investment income was approximately $4.6 million, or $0.50 per basic and diluted share, while tax-basis distributable income was approximately $4.3 million, or $0.47 per basic and diluted share. For the three months ended June 30, 2024, net investment income was approximately $6.5 million, or $0.70 per basic and diluted share, while tax-basis distributable income was approximately $6.4 million, or $0.69 per basic and diluted share. For the six months ended June 30, 2025, net investment income was approximately $8.9 million, or $0.97 per basic and diluted share, while tax-basis distributable income was approximately $9.0 million, or $0.98 per basic and diluted share. For the six months ended June 30, 2024, net investment income was approximately $12.7 million, or $1.36 per basic and diluted share, while tax-basis distributable income was approximately $13.2 million, or $1.42 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 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.
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 and six months ended June 30, 2025, the Company recognized $15.8 million and $16.0 million of net realized losses on our portfolio investments. During the three and six months ended June 30, 2024, the Company recognized $6.9 million and $9.0 million of net realized losses on our portfolio investments.
Previous 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.
Current wording
During the three months ended June 30, 2025, our total investments had net change in unrealized appreciation (depreciation) on investments of approximately $6.6 million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $0.9 million on equity securities, $(0.7) million on our Joint Ventures investments, $(0.1) million on CLO Fund Securities, and $6.5 million on our debt securities. During the three months ended June 30, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $(6.0) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $(0.9) million on CLO Fund Securities, $3.9 million on equity securities, $0.4 million on our Joint Ventures investments, and $(9.4) million on our debt securities.
Previous 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.
Current wording
The net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2025, was $(4.5) million, or $(0.49) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the three months ended June 30, 2024, was $(6.4) million, or $(0.69) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the six months ended June 30, 2025, was $(4.6) million, or $(0.50) per basic and diluted share. The net increase (decrease) in net assets resulting from operations for the six months ended June 30, 2024 , was $(1.9) million, or $(0.20) 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 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.
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 June 30, 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 165%, 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 three months ended March 31, 2025, the Company did not repurchase shares under the Renewed Stock Repurchase Program or the 2025 Stock Repurchase Program.
Current wording
During the three months ended June 30, 2025, the Company did not repurchase shares under the 2025 Stock Repurchase Program. During the three months ended June 30, 2024, the Company repurchased 79,722 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $1.6 million. During the six months ended June 30, 2025, the Company did not repurchase shares under the Renewed Stock Repurchase Program or the 2025 Stock Repurchase Program. During the six months ended June 30, 2024, the Company repurchased 130,737 shares under the Renewed Stock Repurchase Program at an aggregate cost of approximately $2.6 million.
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 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.
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 June 30, 2025, and December 31, 2024, we had approximately $32.7 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
Our investments in CLO Fund Securities are carried at fair value, which is based either on (i) the present value of the net expected cash inflows for interest income and principal repayments from underlying assets and the cash outflows for interest expense, debt paydown and other fund costs for the CLO Funds which are approaching or past the end of their reinvestment period and therefore are selling assets and/or using principal repayments to pay-down CLO Fund debt, and for which there continue to be net cash distributions to the class of securities we own, or (ii) a discounted cash flow model that utilizes prepayment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow and comparable yields for similar securities or preferred shares to those in which we have invested, or (iii) indicative prices provided by the underwriters or brokers who arrange CLO Funds. We recognize unrealized appreciation or depreciation on our investments in CLO Fund Securities as comparable yields in the market change and/or based on changes in net asset values or estimated cash flows resulting from changes in prepayment or loss assumptions in the underlying collateral pool. As each investment in CLO Fund Securities ages, the expected amount of losses and the expected timing of recognition of such losses in the underlying collateral pool are updated and the revised cash flows are used in determining the fair value of the CLO Fund Securities. We determine the fair value of our investments in CLO Fund Securities on a security-by-security basis.
Current wording
Our investments in CLO Fund Securities are carried at fair value, which is based either on (i) the present value of the net expected cash inflows for interest income and principal repayments from underlying assets and the cash outflows for interest expense, debt paydown and other fund costs for the CLO Funds which are approaching or past the end of their reinvestment period and therefore are selling assets and/or using principal repayments to pay-down CLO Fund debt, and for which there continue to be net cash distributions to the class of securities we own, or (ii) a discounted cash flow model that utilizes prepayment and loss assumptions based on historical experience and projected performance, economic factors, the characteristics of the underlying cash flow and comparable yields for similar securities or preferred shares to those in which we have invested, or (iii) indicative prices provided by the underwriters or brokers who arrange CLO Funds. We recognize unrealized appreciation or depreciation on our investments in CLO Fund
Previous 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.
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 June 30, 2025, six of our debt investments were on non-accrual status. However, for a subset of the non-accrual population, the Company continues to recognize interest income on a cash basis, i.e., only when cash payments are actually received. Refer to the Consolidated Schedule of Investments for further details.
Previous wording
On May 8, 2025, the Company declared a regular quarterly base distribution of $0.47 per share of common stock. The distribution is payable on May 29, 2025 to stockholders of record at the close of business on May 19, 2025.
Current wording
On August 7, 2025, the Company declared a regular quarterly base distribution of $0.47 per share of common stock and a supplemental cash distribution of $0.02 per share of common stock.. The distribution is payable on August 29, 2025 to stockholders of record at the close of business on August 18, 2025.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
During the six months ended June 30, 2025, our total investments had net change in unrealized appreciation (depreciation) on investments of approximately $2.7 million. The net change in unrealized appreciation (depreciation) on investments is made up of approximately $2.1 million on equity securities, $(3.5) million on our Joint Ventures investments, $0.9 million on CLO Fund Securities, and $3.2 million on our debt securities. During the six months ended June 30, 2024, our total investments had net change in unrealized appreciation (depreciation) of approximately $(5.9) million. The net change in unrealized appreciation (depreciation) on investments was made up of approximately $(0.9) million on CLO Fund Securities, $4.0 million on equity securities, $0.6 million on our Joint Ventures investments, and $(9.6) million on our debt securities.
Current report — wording carried from elsewhere
On May 8, 2025, the Company declared a regular quarterly base distribution of $0.47 per share of common stock.
Current report — wording carried from elsewhere
Securities as comparable yields in the market change and/or based on changes in net asset values or estimated cash flows resulting from changes in prepayment or loss assumptions in the underlying collateral pool. As each investment in CLO Fund Securities ages, the expected amount of losses and the expected timing of recognition of such losses in the underlying collateral pool are updated and the revised cash flows are used in determining the fair value of the CLO Fund Securities. We determine the fair value of our investments in CLO Fund Securities on a security-by-security basis.