Stellus Capital Investment Corp

Previous wording

On April 4, 2018, the board of directors of the Company (the “Board”), including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. At our 2018 annual meeting of stockholders our stockholders also approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the asset coverage ratio applicable to us was decreased from 200% to 150%, effective June 29, 2018, which effectively increased the amount of leverage we may incur. As of June 30, 2024, our asset coverage ratio was 229%. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.

Current wording

On April 4, 2018, the board of directors of the Company (the “Board”), including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. At our 2018 annual meeting of stockholders our stockholders also approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act. As a result, the asset coverage ratio applicable to us was decreased from 200% to 150%, effective June 29, 2018, which effectively increased the amount of leverage we may incur. As of September 30, 2024, our asset coverage ratio was 242%. The amount of leverage that we employ at any time depends on our assessment of the market and other factors at the time of any proposed borrowing.

Previous wording

As of June 30, 2024, we had $899.7 million (at fair value) invested in 100 portfolio companies. As of June 30, 2024, our portfolio included approximately 90% of first lien debt, 1% of second lien debt, 1% of unsecured debt and 8% of equity investments at fair value. The composition of our investments at cost and fair value as of June 30, 2024 was as follows:

Current wording

As of September 30, 2024, we had $908.7 million (at fair value) invested in 99 portfolio companies. As of September 30, 2024, our portfolio included approximately 89% of first lien debt, 1% of second lien debt, 1% of unsecured debt and 9% of equity investments at fair value. The composition of our investments at cost and fair value as of September 30, 2024 was as follows:

Previous wording

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms and conditions of the underlying loan agreements. As of June 30, 2024 and December 31, 2023, we had unfunded commitments of $42.7 million and $37.0 million, respectively, to provide financing to 63 and 57 portfolio companies, respectively. As of June 30, 2024, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility (as defined below) to fund such unfunded commitments should the need arise.

Current wording

Our investment portfolio may contain loans that are in the form of lines of credit or revolving credit facilities, which require us to provide funding when requested by portfolio companies in accordance with the terms and conditions of the underlying loan agreements. As of September 30, 2024 and December 31, 2023, we had unfunded commitments of $38.6 million and $37.0 million, respectively, to provide financing to 58 and 57 portfolio companies, respectively. As of September 30, 2024, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility (as defined below) to fund such unfunded commitments should the need arise.

Previous wording

At June 30, 2024, our average portfolio company investment at amortized cost and fair value was approximately $9.1 million and $9.0 million, respectively, and our largest portfolio company investment at amortized cost and fair value was $22.4 million and $19.6 million, respectively. At December 31, 2023, our average portfolio company investment at amortized cost and fair value was approximately $9.7 million and $9.4 million, respectively, and our largest portfolio company investment at amortized cost and fair value was approximately $21.7 million and $18.9 million, respectively.

Current wording

At September 30, 2024, our average portfolio company investment at amortized cost and fair value was approximately $9.2 million and $9.2 million, respectively, and our largest portfolio company investment at amortized cost and fair value was $22.8 million and $20.6 million, respectively. At December 31, 2023, our average portfolio company investment at amortized cost and fair value was approximately $9.7 million and $9.4 million, respectively, and our largest portfolio company investment at amortized cost and fair value was approximately $21.7 million and $18.9 million, respectively.

Previous wording

At both June 30, 2024 and December 31, 2023, 98% of our debt investments bore interest based on floating rates (subject to interest rate floors) and 2% bore interest at fixed rates.

Current wording

At both September 30, 2024 and December 31, 2023, 95% of our debt investments bore interest based on floating rates (subject to interest rate floors) and 5% bore interest at fixed rates.

Previous wording

The weighted average yield on all of our debt investments as of both June 30, 2024 and December 31, 2023 was approximately 11.7%. The weighted average yield on all of our investments, including non-income producing equity positions, as of June 30, 2024 and December 31, 2023 was approximately 10.9% and 11.1%, respectively. The weighted average yield was computed using the effective interest rates for all of our debt investments, including accretion of original issue discount. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders, but rather relates to a portion of our investment portfolio and is calculated before the payment of all of our subsidiaries’ fees and expenses.

Current wording

The weighted average yield on all of our debt investments as of September 30, 2024 and December 31, 2023 was approximately 11.0% and 11.9%, respectively. The weighted average yield on all of our investments, including non-income producing equity positions, as of September 30, 2024 and December 31, 2023 was approximately 10.3% and 11.1%, respectively. The weighted average yield was computed using the effective interest rates for all of our debt investments, including accretion of original issue discount. The weighted average yield of our debt investments is not the same as a return on investment for our stockholders, but rather relates to a portion of our investment portfolio and is calculated before the payment of all of our subsidiaries’ fees and expenses.

Previous wording

As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $35.9 million and $26.1 million, respectively.

Current wording

As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $38.6 million and $26.1 million, respectively.

Previous wording

During the six months ended June 30, 2024, we made an aggregate of $94.9 million of investments in 11 new portfolio companies and 13 existing portfolio companies. During the six months ended June 30, 2024, we received an aggregate of $71.8 million in proceeds from repayments of our investments.

Current wording

During the nine months ended September 30, 2024, we made an aggregate of $112.6 million of investments in 12 new portfolio companies and 18 existing portfolio companies. During the nine months ended September 30, 2024, we received an aggregate of $87.3 million in proceeds from repayments of our investments.

Previous wording

We will not accrue interest on loans and debt securities if we have reason to doubt our ability to collect such interest. As of June 30, 2024, we had loans to five portfolio companies that were on non-accrual status, which represented approximately 4.9% of our loan portfolio at cost and 2.9% at fair value. As of December 31, 2023, we had loans to four portfolio companies that were on non-accrual status, which represented approximately 5.2% of our loan portfolio at cost and 2.3% at fair value. As of June 30, 2024 and December 31, 2023, $4.0 million and $7.5 million of income from investments on non-accrual had not been accrued, respectively.

Current wording

We will not accrue interest on loans and debt securities if we have reason to doubt our ability to collect such interest. As of September 30, 2024, we had loans to six portfolio companies that were on non-accrual status, which represented approximately 6.9% of our loan portfolio at cost and 4.7% at fair value. As of December 31, 2023, we had loans to four portfolio companies that were on non-accrual status, which represented approximately 4.2% of our loan portfolio at cost and 1.3% at fair value. As of September 30, 2024 and December 31, 2023, $5.1 million and $7.5 million of income from investments on non-accrual had not been accrued, respectively.

Previous wording

Comparison of the three and six months ended June 30, 2024 and 2023

Current wording

Comparison of the three and nine months ended September 30, 2024 and 2023

Previous wording

The following shows the breakdown of investment income for the three and six months ended June 30, 2024 and 2023 (in millions).

Current wording

The following shows the breakdown of investment income for the three and nine months ended September 30, 2024 and 2023 (in millions).

Previous wording

The increase in investment income for the six months ended June 30, 2024 was due primarily to growth in the overall investment portfolio.

Current wording

The decrease in investment income for the three months ended September 30, 2024 was due primarily to a decrease in our principal debt outstanding. The increase in investment income for the nine months ended September 30, 2024 was due primarily to growth in the overall investment portfolio.

Previous wording

The following shows the breakdown of operating expenses for the three and six months ended June 30, 2024 and 2023 (in millions).

Current wording

The following shows the breakdown of operating expenses for the three and nine months ended September 30, 2024 and 2023 (in millions).

Previous wording

The decrease in operating expenses for the three and six months ended June 30, 2024 as compared to the three months and six ended June 30, 2023 was due to the Income incentive fee waiver.

Current wording

The decrease in operating expenses for the nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 was due to the income incentive fee waiver, offset by the capital gains incentive fee reversal.

Previous wording

The increase in net investment income over the respective periods was due to higher investment income as a result of a larger investment portfolio, offset by the decrease in expenses as explained in the “Expenses” section above.

Current wording

The increase in net investment income over the respective nine month periods was due to higher investment income as a result of a larger investment portfolio, offset by the decrease in expenses as explained in the “Expenses” section above.

Previous wording

Proceeds from repayments of investments and amortization of certain other investments for the three months ended June 30, 2023 totaled $38.4 million and net realized losses totaled ($0.3) million.

Current wording

Proceeds from repayments of investments and amortization of certain other investments for the nine months ended September 30, 2023 totaled $79.1 million and net realized losses totaled ($0.3) million.

Previous wording

Net change in unrealized depreciation on investments and cash equivalents for the three months ended June 30, 2024 and 2023 totaled ($5.6) million and ($6.3) million, respectively.

Current wording

Net change in unrealized appreciation (depreciation) on investments and cash equivalents for the three months ended September 30, 2024 and 2023 totaled $8.5 million and ($13.8) million, respectively.

Previous wording

Net change in unrealized appreciation (depreciation) on investments and cash equivalents for the six months ended June 30, 2024 and 2023 totaled $17.9 million and ($10.5) million, respectively.

Current wording

Net change in unrealized appreciation (depreciation) on investments and cash equivalents for the nine months ended September 30, 2024 and 2023 totaled $26.4 million and ($24.3) million, respectively.

Previous wording

Provision for Taxes on Unrealized Appreciation on Investments

Current wording

Benefit (Provision) for Taxes on Unrealized Investments

Previous wording

We have direct wholly owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The Taxable Subsidiaries permit us to hold equity investments in portfolio companies, which are “pass through” entities for U.S. federal income tax purposes and continue to comply with the “source income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with us for U.S. federal income tax purposes and may generate U.S. federal income tax expense, benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. The U.S. federal income tax expense, or benefit, if any, and related tax assets and liabilities are reflected in our consolidated financial statements. For the six months ended June 30, 2024 and 2023, we recognized a benefit (provision) for income tax on unrealized investments of $0.2 million and ($0.1) million for the Taxable Subsidiaries, respectively. As of June 30, 2024 and December 31, 2023, there was $0.0 million and $0.2 million of deferred tax liabilities on the Consolidated Statements of Assets and Liabilities, respectively.

Current wording

We have direct wholly owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The Taxable Subsidiaries permit us to hold equity investments in portfolio companies, which are “pass through” entities for U.S. federal income tax purposes and continue to comply with the “source income” requirements contained in RIC tax provisions of the Code. The Taxable Subsidiaries are not consolidated with us for U.S. federal income tax purposes and may generate U.S. federal income tax expense, benefit, and the related tax assets and liabilities, as a result of their ownership of certain portfolio investments. The U.S. federal income tax expense, or benefit, if any, and related tax assets and liabilities are reflected in our consolidated financial statements. For the nine months ended September 30, 2024 and 2023, we recognized a benefit (provision) for income tax on unrealized investments of $0.2 million and ($0.1) million for the Taxable Subsidiaries, respectively. As of September 30, 2024 and December 31, 2023, there was $0.0 million and $0.2 million of deferred tax liabilities on the Consolidated Statements of Assets and Liabilities, respectively.

Previous wording

Net Increase in Net Assets Resulting from Operations

Current wording

For the three months ended September 30, 2024, net increase in net assets resulting from operations totaled $15.5 million, or $0.59 per common share (based on 26,326,426 weighted average shares outstanding for the three months ended September 30, 2024).

Previous wording

For the six months ended June 30, 2023, net increase in net assets resulting from operations totaled $8.4 million, or $0.41 per common share (based on 20,509,995 weighted average shares outstanding for the six months ended June 30, 2023). The net increase in net assets between the respective periods was due to higher unrealized appreciation, offset by increased net realized losses in the current year.

Current wording

The net increase in net assets between the respective periods was due to higher unrealized appreciation, offset by higher realized losses in the current year.

Previous wording

The net increase in net assets between the respective periods was due to lower unrealized depreciation and higher net realized gains in the current year.

Current wording

The net increase in net assets between the respective periods was due to higher unrealized appreciation, offset by increased net realized losses in the current year.

Previous wording

Our operating activities used net cash of $32.0 million for the six months ended June 30, 2023, primarily in connection with the purchase of portfolio investments, offset by sales and repayments of portfolio investments. Our financing activities for the six months ended June 30, 2023 used cash of $1.2 million primarily from stockholder distributions and net paydowns on our Credit Facility, offset by proceeds from the issuance of common stock.

Current wording

Our operating activities used net cash of $42.4 million for the nine months ended September 30, 2023, primarily in connection with the purchase of portfolio investments, offset by sales and repayments of portfolio investments. Our financing activities for the nine months ended September 30, 2023 provided cash of $13.6 million primarily from proceeds from the issuance of common stock, offset by net paydowns on our Credit Facility.

Previous wording

Also, as a BDC, we generally are required to meet an asset coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, over the aggregate amount of the senior securities, which include all of our borrowings and any outstanding preferred stock, of at least 150% effective June 29, 2018 (at least 200% prior to June 29, 2018). This requirement limits the amount that we may borrow. We have received exemptive relief from the SEC to permit us to exclude the debt of the Stellus Capital SBIC, LP (the “SBIC subsidiary”) and Stellus Capital SBIC II, LP (the “SBIC II subsidiary”) (collectively, the “SBIC subsidiaries”) guaranteed by the U.S. Small Business Administration (“SBA”) from the definition of senior securities in the asset coverage test under the 1940 Act. We were in compliance with the asset coverage ratios at all times. As of June 30, 2024 and December 31, 2023, our asset coverage ratio was 229% and 223%, respectively. The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing. As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $35.9 million and $26.1 million, respectively.

Current wording

Also, as a BDC, we generally are required to meet an asset coverage ratio of total assets, less liabilities and indebtedness not represented by senior securities, over the aggregate amount of the senior securities, which include all of our borrowings and any outstanding preferred stock, of at least 150% effective June 29, 2018 (at least 200% prior to June 29, 2018). This requirement limits the amount that we may borrow. We have received exemptive relief from the SEC to permit us to exclude the debt of the Stellus Capital SBIC, LP (the “SBIC subsidiary”) and Stellus Capital SBIC II, LP (the “SBIC II subsidiary”) (collectively, the “SBIC subsidiaries”) guaranteed by the U.S. Small Business Administration (“SBA”) from the definition of senior securities in the asset coverage test under the 1940 Act. We were in compliance with the asset coverage ratios at all times. As of September 30, 2024 and December 31, 2023, our asset coverage ratio was 242% and 223%, respectively. The amount of leverage that we employ will depend on our assessment of market conditions and other factors at the time of any proposed borrowing, such as the maturity, covenant package and rate structure of the proposed borrowings, our ability to raise funds through the issuance of shares of our common stock and the risks of such borrowings within the context of our investment outlook. Ultimately, we only intend to use leverage if the expected returns from borrowing to make investments will exceed the cost of such borrowing. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $38.6 million and $26.1 million, respectively.

Previous wording

Our obligations to the lenders are secured by a first priority security interest in our portfolio of securities and cash not held at the SBIC subsidiaries, but excluding short term investments. The Credit Facility contains certain covenants, including but not limited to: (i) maintaining a minimum liquidity test of at least $10.0 million, including cash, liquid investments and undrawn availability, (ii) maintaining an asset coverage ratio of at least 1.67 to 1.0, and (iii) maintaining a minimum stockholder’s equity, and (iv) maintaining a minimum interest coverage ratio of at least 1.75 to 1.00. As of June 30, 2024 and December 31, 2023, we were in compliance with these covenants.

Current wording

Our obligations to the lenders are secured by a first priority security interest in our portfolio of securities and cash not held at the SBIC subsidiaries, but excluding short term investments. The Credit Facility contains certain covenants, including but not limited to: (i) maintaining a minimum liquidity test of at least $10.0 million, including cash, liquid investments and undrawn availability, (ii) maintaining an asset coverage ratio of at least 1.67 to 1.0, (iii) maintaining a minimum stockholder’s equity, and (iv) maintaining a minimum interest coverage ratio of at least 1.75 to 1.00. As of September 30, 2024 and December 31, 2023, we were in compliance with these covenants.

Previous wording

As of June 30, 2024 and December 31, 2023, $169.4 million and $160.1 million, respectively, was outstanding under the Credit Facility. The carrying amount of the amount outstanding under the Credit Facility approximates its fair value. The fair values of the Credit Facility is determined in accordance with Accounting Standards Codification (“ASC”) Topic 820,Fair Value Measurements and Disclosures(“ASC 820”), which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Credit Facility is estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. We incurred costs of $6.7 million in connection with the current Credit Facility, which are being amortized over the life of the facility. Additionally, $0.3 million of costs from a prior credit facility will continue to be amortized over the remaining life of the Credit Facility. As of June 30, 2024 and December 31, 2023, $3.0 million and $3.5 million of such prepaid loan structure fees and administration fees had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Current wording

As of September 30, 2024 and December 31, 2023, $157.4 million and $160.1 million, respectively, was outstanding under the Credit Facility. The carrying amount of the amount outstanding under the Credit Facility approximates its fair value. The fair values of the Credit Facility is determined in accordance with Accounting Standards Codification (“ASC”) Topic 820,Fair Value Measurements and Disclosures(“ASC 820”), which defines fair value in terms of the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value of the Credit Facility is estimated based upon market interest rates for our own borrowings or entities with similar credit risk, adjusted for nonperformance risk, if any. We incurred costs of $6.7 million in connection with the current Credit Facility, which are being amortized over the life of the facility. Additionally, $0.3 million of costs from a prior credit facility will continue to be amortized over the remaining life of the Credit Facility. As of September 30, 2024 and December 31, 2023, $2.8 million and $3.5 million of such prepaid loan structure fees and administration fees had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Previous wording

Interest is paid quarterly in arrears. The following table summarizes the interest expense and amortized loan fees on the Credit Facility for the three and six months ended June 30, 2024 and 2023 (dollars in millions):

Current wording

Interest is paid quarterly in arrears. The following table summarizes the interest expense and amortized loan fees on the Credit Facility for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):

Previous wording

Due to the SBIC subsidiaries’ status as Small Business Investment Companies (“SBICs”), we have the ability to issue debentures guaranteed by the SBA at favorable interest rates (“SBA-guaranteed debentures”). Under the regulations applicable to SBIC funds, a single licensee can have outstanding SBA-guaranteed debentures, subject to a regulatory leverage limit, up to two times the amount of regulatory capital. As of both June 30, 2024 and December 31, 2023, the SBIC subsidiary had $75.0 million in “regulatory capital”, as such term is defined by the SBA, and $150.0 million of SBA-guaranteed debentures outstanding.

Current wording

Due to the SBIC subsidiaries’ status as Small Business Investment Companies (“SBICs”), we have the ability to issue debentures guaranteed by the SBA at favorable interest rates (“SBA-guaranteed debentures”). Under the regulations applicable to SBICs, a single licensee can have outstanding SBA-guaranteed debentures, subject to a regulatory leverage limit, up to two times the amount of regulatory capital. As of both September 30, 2024 and December 31, 2023, the SBIC subsidiary had $75.0 million in “regulatory capital”, as such term is defined by the SBA, and $150.0 million of SBA-guaranteed debentures outstanding.

Previous wording

On a stand-alone basis, the SBIC subsidiaries held $500.6 million and $485.2 million in assets at June 30, 2024 and December 31, 2023, respectively, which accounted for approximately 52.9% and 52.4% of our total consolidated assets, respectively.

Current wording

On a stand-alone basis, the SBIC subsidiaries held $498.7 million and $485.2 million in assets at September 30, 2024 and December 31, 2023, respectively, which accounted for approximately 52.7% and 53.4% of our total consolidated assets, respectively.

Previous wording

As of June 30, 2024, we have incurred $11.1 million in financing costs related to the SBA-guaranteed debentures since the SBIC subsidiaries received their licenses, which were recorded as prepaid loan fees. As of June 30, 2024 and December 31, 2023, $4.2 million and $4.7 million of prepaid financing costs had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Current wording

As of September 30, 2024, we have incurred $11.1 million in financing costs related to the SBA-guaranteed debentures since the SBIC subsidiaries received their licenses, which were recorded as prepaid loan fees. As of September 30, 2024 and December 31, 2023, $3.9 million and $4.7 million of prepaid financing costs had yet to be amortized, respectively. These prepaid loan fees are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Previous wording

The following table summarizes the interest expense and amortized fees on the SBA-guaranteed debentures for the three and six months ended June 30, 2024 and 2023 (dollars in millions):

Current wording

The following table summarizes the interest expense and amortized fees on the SBA-guaranteed debentures for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):

Previous wording

In connection with the issuance of the Notes Payable, we have incurred $2.3 million of fees, which are being amortized over the term of the Notes Payable, of which $0.8 million and $1.0 million remains to be amortized as of June 30, 2024 and December 31, 2023, respectively. These financing costs are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Current wording

In connection with the issuance of the Notes Payable, we have incurred $2.3 million of fees, which are being amortized over the term of the Notes Payable, of which $0.7 million and $1.0 million remains to be amortized as of September 30, 2024 and December 31, 2023, respectively. These financing costs are presented on the Consolidated Statements of Assets and Liabilities as a deduction from the debt liability.

Previous wording

The following table summarizes the interest expense and deferred financing costs on the Notes Payable for the three and six months ended June 30, 2024 and 2023 (dollars in millions):

Current wording

The following table summarizes the interest expense and deferred financing costs on the Notes Payable for the three and nine months ended September 30, 2024 and 2023 (dollars in millions):

Previous wording

We issued 1,855,356 shares during the three and six months ended June 30, 2024 under the ATM Program, for gross proceeds of $25.8 million and underwriting fees and other expenses of $0.5 million. The average per share offering price of shares issued in the ATM Program during the three and six months ended June 30, 2024 was $13.89. The Advisor agreed to reimburse us for underwriting fees and expenses to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three and six months ended June 30, 2024, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.

Current wording

We issued 1,058,366 and 2,913,722 shares during the three and nine months ended September 30, 2024 under the ATM Program, respectively, for gross proceeds of $14.6 million and $40.4 million and underwriting fees and other expenses of $0.3 million and $0.9 million, respectively. The average per share offering price of shares issued in the ATM Program during the three and nine months ended September 30, 2024 was $13.79 and $13.86, respectively. The Advisor agreed to reimburse us for underwriting fees and expenses to the extent the per share price of the shares to the public, less underwriting fees, was less then net asset value per share. For the three and nine months ended September 30, 2024, the Advisor was not required to reimburse underwriting fees as all shares were issued at a premium to net asset value.

Previous wording

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2024, we had $42.4 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 63 existing portfolio companies. As of December 31, 2023, we had $36.7 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 57 existing portfolio companies. As of June 30, 2024, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

Current wording

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of September 30, 2024, we had $38.3 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 58 existing portfolio companies. As of December 31, 2023, we had $36.7 million in unfunded debt commitments and $0.3 million in unfunded equity commitments to 57 existing portfolio companies. As of September 30, 2024, we had sufficient liquidity (through cash on hand and available borrowings under the Credit Facility) to fund such unfunded loan commitments should the need arise.

Previous wording

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation until realized. Distributions declared and paid by us in a year may differ from taxable income for that year as such dividends may include the distribution of

Current wording

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized appreciation or depreciation until realized. Distributions declared and paid by us in a year may differ from taxable income for that year as such dividends may include the distribution of current year taxable income or the distribution of prior year taxable income carried forward into and distributed in the current year. Distributions also may include returns of capital.

Previous wording

The Company’s management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except for the following described below.

Current wording

Our management has evaluated subsequent events through the date of issuance of the financial statements included herein. There have been no subsequent events that require recognition or disclosure in these financial statements except for the following described below.

Previous wording

The Company invested in the following portfolio companies subsequent to June 30, 2024:

Current wording

We invested in the following portfolio companies subsequent to September 30, 2024:

Previous wording

The Company realized the following portfolio company investment subsequent to June 30, 2024:

Current wording

We realized the following portfolio company investment subsequent to September 30, 2024: