# TriplePoint Venture Growth BDC Corp.: Form 10-Q for the period ended Jun 30, 2023

- Company: [TriplePoint Venture Growth BDC Corp.](/companies/tpvg.md) (CIK 1580345)
- Form: 10-Q
- Filed: 2023-08-02
- Accepted by EDGAR: Aug 2, 2023, 16:33 ET
- Period: 2023-06-30
- Accession: 0001580345-23-000032
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1580345/000158034523000032/tpvg-20230630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1580345/000158034523000032/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | −$20.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | −$13.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.53 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | $1.06 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $0.53 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | $1.06 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 35,398,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-30 | 35,373,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | −$7.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2023-06-30 | $78.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2023-06-30 | $1.04bn | us-gaap:Assets |
| Total liabilities | at 2023-06-30 | $657.9m | us-gaap:Liabilities |
| Long-term debt | at 2023-06-30 | $629.0m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2023-06-30 | $379.4m | us-gaap:StockholdersEquity |
| Shares outstanding | at 2023-06-30 | 35,446,752 shares | dei:EntityCommonStockSharesOutstanding |

## Management's discussion and analysis

As filed, 74,691 characters.

### Forward-Looking Statements

The information contained in this section should be read in conjunction with our consolidated financial statements and related notes and schedules thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Except as otherwise specified, references to “the Company”, “we”, “us”, and “our” refer to TriplePoint Venture Growth BDC Corp. and its subsidiaries.

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Quarterly Report on Form 10-Q include statements as to:

- our and our portfolio companies’ future operating results and financial condition, including our and our portfolio companies’ ability to achieve our respective objectives;
- our business prospects and the prospects of our portfolio companies;
- our relationships with third parties, including but not limited to lenders and venture capital investors, including other investors in our portfolio companies;
- the outcome and impact on the Company of any material pending or threatened legal proceedings to which the Company or its property is subject;
- the impact and timing of our unfunded commitments;
- the expected market for venture capital investments;
- the performance of our existing portfolio and other investments we may make in the future;
- the impact of investments that we expect to make;
- actual and potential conflicts of interest with TPC, the Adviser and its senior investment team and Investment Committee;
- our contractual arrangements and relationships with third parties;
- the dependence of our future success on the U.S. and global economies, including with respect to the industries in which we invest;
- our expected financings and investments;
- the ability of the Adviser to locate suitable investments for us and to monitor and administer our investments;
- the ability of our Adviser to attract, retain and have access to highly talented professionals, including our Adviser’s senior management team;
- our ability to maintain our qualification as a RIC and as a BDC;
- the adequacy of our and our portfolio companies’ available liquidity, cash resources and working capital and compliance with covenants under borrowing arrangements;
- the ability of our portfolio companies to obtain financing on attractive terms or at all; and
- the timing of cash flows, if any, from the operations of our portfolio companies.

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

- changes in laws and regulations, changes in political, economic or industry conditions, and changes in the interest rate environment or other conditions affecting the financial and capital markets;
- the potential widespread re-emergence of COVID-19 or its variants, or a similar health pandemic, and the length and duration thereof in the United States as well as worldwide, and the magnitude of its impact and time required for economic recovery, including with respect to the impact of travel restrictions and other isolation and quarantine measures on the ability of the Adviser’s investment professionals to conduct in-person diligence on, and otherwise monitor, existing and future investments;
- the potential for an economic downturn and the time period required for robust economic recovery therefrom;
- a contraction of available credit, an inability or unwillingness of our lenders to fund their commitments to us and/or an inability to access capital markets or additional sources of liquidity, which could have a material adverse effect on our results of operations and financial condition and impair our lending and investment activities;
- interest rate volatility could adversely affect our results, particularly given that we use leverage as part of our investment strategy;
- currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars;
- risks associated with possible disruption in our or our portfolio companies’ operations due to the effect of, and uncertainties stemming from, adverse developments affecting the financial services industry and the venture banking ecosystem, including the recent failure of certain banking institutions, as well as due to wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics; and
- the risks, uncertainties and other factors we identify in “Risk Factors” in this Quarterly Report on Form 10-Q, in our most recent Annual Report on Form 10-K under Part I, Item 1A, and in our other filings with the SEC that we make from time to time.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include, without limitation, our ability to originate new loans and investments, borrowing costs and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Quarterly Report on Form 10-Q should not be regarded as a representation by us that our plans and objectives will be achieved. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report on Form 10-Q.

### Overview

We are an externally managed, closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. Our shares are currently listed on the New York Stock Exchange (the “NYSE”) under the symbol “TPVG”.

We were formed to expand the venture growth stage business segment of TPC’s investment platform. TPC is widely recognized as a leading global financing provider devoted to serving venture capital-backed companies with creative, flexible and customized debt financing, equity capital and complementary services throughout their lifespan. TPC is located on Sand Hill Road in Silicon Valley and has a primary focus in technology and other high growth industries.

Our investment objective is to maximize our total return to stockholders primarily in the form of current income and, to a lesser extent, capital appreciation by lending primarily with warrants to venture growth stage companies focused in technology and other high growth industries backed by TPC’s select group of leading venture capital investors.

### COVID-19 Developments

The COVID-19 pandemic, and the related effect on the U.S. and global economies, including the recent economic downturn and the uncertainty associated with the timing and likelihood of robust economic recovery, has had adverse consequences for the business operations of some of our portfolio companies and has adversely affected, and threatens to continue to adversely affect, our operations and the operations of the Adviser.

Any significant increase in aggregate unrealized depreciation of our investment portfolio or significant reductions in our net asset value as a result of the effects of the COVID-19 pandemic or otherwise increases the risk of failing to meet the 1940 Act asset coverage requirements and breaching covenants under the Credit Facility, under the governing agreements for the 2025 Notes, the 2026 Notes and the 2027 Notes, or otherwise triggering an event of default under our borrowing arrangements. Any such breach of covenant or event of default, if we are not able to obtain a waiver from the required lenders or debt holders, would have a material adverse effect on our business, liquidity, financial condition, results of operations and ability to pay distributions to our stockholders. See “Risk Factors” in this Quarterly Report on Form 10-Q and “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 for more information. As of June 30, 2023, we were in compliance with the asset coverage requirements under the 1940 Act and with our covenants under the Credit Facility and under the governing agreements for the 2025 Notes, the 2026 Notes and the 2027 Notes.

We will continue to monitor the evolving situation relating to the COVID-19 pandemic and related guidance from U.S. and international authorities, including federal, state and local public health authorities. Given the dynamic nature of this situation and the fact that there may be developments outside of our control that require us or our portfolio companies to adjust plans of operation, we cannot reasonably estimate the full impact of COVID-19 or its variants on our financial condition, results of operations or cash flows in the future. However, it could have a material adverse impact for a prolonged period of time on our future net investment income, the fair value of our portfolio investments, and the respective results of operations and financial condition of us and our portfolio companies. See “Risk Factors” in this Quarterly Report on Form 10-Q, and in our other filings with the SEC that we make from time to time, for more information.

### Portfolio Composition, Investment Activity and Asset Quality

#### Portfolio Composition

We originate and invest primarily in venture growth stage companies. Companies at the venture growth stage have distinct characteristics differentiating them from venture capital-backed companies at other stages in their development lifecycle. We invest primarily in (i) growth capital loans that have a secured collateral position and that are generally used by venture growth stage companies to finance their continued expansion and growth, (ii) equipment financings, which may be structured as loans or leases, that have a secured collateral position on specified mission-critical equipment, (iii) on a select basis, revolving loans that have a secured collateral position and that are typically used by venture growth stage companies to advance against inventory, components, accounts receivable, contractual or future billings, bookings, revenues, sales or cash payments and collections including proceeds from a sale, financing or the equivalent and (iv) direct equity investments in venture growth stage companies. In connection with our growth capital loans, equipment financings and revolving loans, we generally receive warrant investments as part of the transaction that allow us to participate in any equity appreciation of our borrowers and enhance our overall investment returns.

As of June 30, 2023, we had 346 investments in 119 companies. Our investments included 162 debt investments, 123 warrant investments, and 61 direct equity and related investments. As of June 30, 2023, the aggregate cost and fair value of these investments were $1.0 billion and $942.0 million, respectively. As of June 30, 2023, 10 of our portfolio companies were publicly traded. As of June 30, 2023, the 162 debt investments had an aggregate fair value of $853.2 million and a weighted average loan to enterprise value ratio at the time of underwriting of 7.6%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination.

As of December 31, 2022, we had 327 investments in 121 companies. Our investments included 144 debt investments, 124 warrant investments, and 59 direct equity and related investments. As of December 31, 2022, the aggregate cost and fair value of these investments were $959.4 million and $949.3 million, respectively. As of December 31, 2022, 11 of our portfolio companies were publicly traded. As of December 31, 2022, the 144 debt investments had an aggregate fair value of $853.0 million and a weighted average loan to enterprise value ratio at the time of underwriting of 7.8%. Enterprise value of a portfolio company is estimated based on information available, including any information regarding the most recent rounds of equity funding, at the time of origination.

The following tables show information on the cost and fair value of our investments in companies along with the number of companies in our portfolio as of June 30, 2023 and December 31, 2022:

| Investments by Type (dollars in thousands) | June 30, 2023 Cost | Fair Value | Net Unrealized Gains (losses) | Number of Investments | Number of Companies |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Debt investments | $933,263 | $853,197 | $(80,066) | 162 | 56 |  |
| Warrant investments | 28,938 | 44,311 | 15,373 | 123 | 106 |  |
| Equity investments | 42,303 | 44,447 | 2,144 | 61 | 48 |  |
| Total Investments in Portfolio Companies | $1,004,504 | $941,955 | $(62,549) | 346 | 119 | (1) |

(1) Represents non-duplicative number of companies.

| Investments by Type (dollars in thousands) | December 31, 2022 Cost | Fair Value | Net Unrealized Gains (losses) | Number of Investments | Number of Companies |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Debt investments | $888,586 | $852,951 | $(35,635) | 144 | 57 |  |
| Warrant investments | 29,427 | 48,414 | 18,987 | 124 | 107 |  |
| Equity investments | 41,394 | 47,911 | 6,517 | 59 | 48 |  |
| Total Investments in Portfolio Companies | $959,407 | $949,276 | $(10,131) | 327 | 121 | (1) |

(1) Represents non-duplicative number of companies.

The following tables show the fair value of the portfolio of investments, by industry and the percentage of the total investment portfolio, as of June 30, 2023 and December 31, 2022:

| Investments in Portfolio Companies by Industry (dollars in thousands) | June 30, 2023 At Fair Value | Percentage of Total Investments |
| --- | ---: | ---: |
| Consumer Products and Services | $147,968 | 15.7% |
| E-Commerce - Clothing and Accessories | 135,326 | 14.4 |
| Business Applications Software | 75,794 | 8.0 |
| Financial Institution and Services | 71,703 | 7.6 |
| Real Estate Services | 71,308 | 7.6 |
| Business/Productivity Software | 58,189 | 6.2 |
| Healthcare Technology Systems | 55,491 | 5.9 |
| Business Products and Services | 49,352 | 5.2 |
| Other Financial Services | 34,798 | 3.7 |
| Travel & Leisure | 33,171 | 3.5 |
| Security Services | 31,860 | 3.4 |
| Shopping Facilitators | 28,734 | 3.1 |
| Entertainment | 28,236 | 3.0 |
| Application Software | 25,189 | 2.7 |
| E-Commerce - Personal Goods | 21,892 | 2.3 |
| Multimedia and Design Software | 20,349 | 2.2 |
| Food & Drug | 16,382 | 1.7 |
| Consumer Finance | 15,962 | 1.7 |
| Consumer Non-Durables | 9,227 | 1.0 |
| Consumer Retail | 2,169 | 0.2 |
| General Media and Content | 2,162 | 0.2 |
| Information Services (B2C) | 1,990 | 0.2 |
| Network Systems Management Software | 1,829 | 0.2 |
| Financial Software | 1,012 | 0.1 |
| Database Software | 465 | \* |
| Commercial Services | 432 | \* |
| Educational/Training Software | 260 | \* |
| Aerospace and Defense | 192 | \* |
| Business to Business Marketplace | 178 | \* |
| Social/Platform Software | 151 | \* |
| Computer Hardware | 116 | \* |
| Healthcare Services | 55 | \* |
| Advertising / Marketing | 13 | \* |
| Transportation | — | \* |
| Building Materials/Construction Machinery | — | \* |
| Medical Software and Information Services | — | \* |
| Total portfolio company investments | $941,955 | 100.0% |

\* Amount represents less than 0.05% of the total portfolio investments at fair value.

| Investments in Portfolio Companies by Industry (dollars in thousands) | December 31, 2022 At Fair Value | Percentage of Total Investments |
| --- | ---: | ---: |
| Consumer Products and Services | $166,626 | 17.6% |
| E-Commerce - Clothing and Accessories | 131,855 | 13.9 |
| Business Applications Software | 95,772 | 10.1 |
| Financial Institution and Services | 70,083 | 7.4 |
| Real Estate Services | 63,961 | 6.7 |
| Business/Productivity Software | 56,070 | 5.9 |
| Business Products and Services | 49,447 | 5.2 |
| Travel & Leisure | 32,362 | 3.4 |
| Security Services | 31,657 | 3.3 |
| Entertainment | 28,657 | 3.0 |
| Shopping Facilitators | 28,406 | 3.0 |
| Other Financial Services | 24,029 | 2.5 |
| Healthcare Technology Systems | 23,347 | 2.5 |
| Application Software | 22,802 | 2.4 |
| Multimedia and Design Software | 20,174 | 2.1 |
| Healthcare Services | 20,074 | 2.1 |
| Food & Drug | 18,053 | 1.9 |
| Consumer Finance | 17,750 | 1.9 |
| Database Software | 13,702 | 1.4 |
| E-Commerce - Personal Goods | 13,161 | 1.4 |
| Consumer Non-Durables | 11,935 | 1.3 |
| Consumer Retail | 2,169 | 0.2 |
| General Media and Content | 2,162 | 0.2 |
| Network Systems Management Software | 1,925 | 0.2 |
| Commercial Services | 1,310 | 0.1 |
| Financial Software | 997 | 0.1 |
| Aerospace and Defense | 192 | \* |
| Business to Business Marketplace | 178 | \* |
| Social/Platform Software | 151 | \* |
| Educational/Training Software | 140 | \* |
| Computer Hardware | 116 | \* |
| Advertising / Marketing | 13 | \* |
| Transportation | — | \* |
| Building Materials/Construction Machinery | — | \* |
| Medical Software and Information Services | — | \* |
| Total portfolio company investments | $949,276 | 100.0% |

\* Amount represents less than 0.05% of the total portfolio investments at fair value.

The following table shows the financing product type of our debt investments as of June 30, 2023 and December 31, 2022:

| Debt Investments By Financing Product (dollars in thousands) | June 30, 2023 Fair Value | Percentage of Total Debt Investments | December 31, 2022 Fair Value | Percentage of Total Debt Investments |
| --- | ---: | ---: | ---: | ---: |
| Growth capital loans | $825,618 | 96.8% | $822,438 | 96.4% |
| Revolver loans | 27,579 | 3.2 | 29,888 | 3.5 |
| Convertible notes | — | — | 625 | 0.1 |
| Total debt investments | $853,197 | 100.0% | $852,951 | 100.0% |

Growth capital loans in which the borrower held a term loan facility, with or without an accompanying revolving loan, in priority to our senior lien represent 18.4% and 21.4% of our debt investments at fair value as of June 30, 2023 and December 31, 2022, respectively.

#### Investment Activity

During the three months ended June 30, 2023, we entered into debt commitments with one new portfolio company and three existing portfolio companies totaling $18.0 million, funded debt investments to eight portfolio companies for $30.6 million in principal value, acquired warrant investments representing $38,000 of value, and made direct equity investments of $0.1 million. Debt investments funded during the three months ended June 30, 2023 carried a weighted average annualized portfolio yield of 16.4% at origination.

During the six months ended June 30, 2023, we entered into debt commitments with one new portfolio company and 11 existing portfolio companies totaling $21.7 million, funded debt investments to 16 portfolio companies for $88.2 million in principal value, acquired warrant investments representing $0.2 million of value, and made direct equity investments of $0.2 million. Debt investments funded during the six months ended June 30, 2023 carried a weighted average annualized portfolio yield of 14.9%1 at origination.

During the three months ended June 30, 2022, we entered into debt commitments with 13 new portfolio companies and four existing portfolio companies totaling $259.9 million, funded debt investments to 20 portfolio companies for $157.6 million in principal value, acquired warrant investments representing $2.1 million of value, and made direct equity investments of $0.7 million. Debt investments funded during the three months ended June 30, 2022 carried a weighted average annualized portfolio yield of 13.6% at origination.

During the six months ended June 30, 2022, we entered into debt commitments with 21 new portfolio companies and seven existing portfolio companies totaling $385.7 million, funded debt investments to 26 portfolio companies for $220.3 million in principal value, acquired warrant investments representing $3.0 million of value, and made direct equity investments of $3.1 million. Debt investments funded during the six months ended June 30, 2022 carried a weighted average annualized portfolio yield of 13.5% at origination.

During the three months ended June 30, 2023, we received $33.8 million of principal prepayments and $1.7 million of scheduled principal amortization. During the six months ended June 30, 2023, we received $33.8 million of principal prepayments, $3.4 million of early repayments and $18.3 million of scheduled principal amortization.

During the three months ended June 30, 2022, $50.2 million of principal prepayments, $4.8 million of early repayments and $10.3 million of scheduled principal amortization. During the six months ended June 30, 2022, we received $165.8 million of principal prepayments, $4.8 million of early repayments and $16.2 million of scheduled principal amortization.

The following table shows the total portfolio investment activity for the three and six months ended June 30, 2023 and 2022:

*(in thousands)*

|  | For the Three Months Ended June 30, 2023 | 2022 | For the Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: | ---: | ---: |
| Beginning portfolio at fair value | $982,828 | $806,447 | $949,276 | $865,340 |
| New debt investments, net(1) | 30,164 | 154,391 | 86,538 | 215,850 |
| Scheduled principal amortization | (1,666) | (10,296) | (18,257) | (16,164) |
| Principal prepayments and early repayments | (33,750) | (55,038) | (37,150) | (170,572) |
| Net amortization and accretion of premiums and discounts and end-of-term payments | 4,172 | 3,609 | 9,490 | 5,542 |
| Payment-in-kind coupon | 2,597 | 1,352 | 4,682 | 2,935 |
| New warrant investments | 38 | 2,145 | 168 | 2,960 |
| New equity investments | 433 | 1,100 | 936 | 3,796 |
| Proceeds from dispositions of investments | (3,173) | — | (3,173) | (246) |
| Net realized gains (losses) on investments | 1,863 | (670) | 1,863 | (1,664) |
| Net change in unrealized gains (losses) on investments | (41,551) | (26,322) | (52,418) | (31,059) |
| Ending portfolio at fair value | $941,955 | $876,718 | $941,955 | $876,718 |

(1) Debt balance is net of fees and discounts applied to the loan at origination.

Our level of investment activity can vary substantially from period to period as our Adviser chooses to slow or accelerate new business originations depending on market conditions, rate of investment of TPC’s select group of leading venture capital investors, our Adviser’s knowledge, expertise and experience, our funding capacity (including availability under the Credit Facility and our ability or inability to raise equity or debt capital), the amount of our outstanding unfunded commitments and other market dynamics.

1 This yield excludes the impact of $2.0 million in short-term loans that were funded and repaid during the three months ended March 31, 2023, which carried a higher interest rate than our normal course investments, and the impact thereof on our weighted average adjusted annualized yield at origination for the period presented.

The following table shows the debt commitments, fundings of debt investments (principal balance) and equity investments, and non-binding term sheet activity for the three and six months ended June 30, 2023 and 2022:

| Commitments and Fundings (in thousands) 2023 Debt Commitments | For the Three Months Ended June 30, 2022 | 2023 | For the Six Months Ended June 30, 2022 |  |
| --- | ---: | ---: | ---: | ---: |
| New portfolio companies | $5,000 | $214,441 | $5,000 | $308,173 |
| Existing portfolio companies | 13,006 | 45,500 | 16,743 | 77,500 |
| Total(1) | $18,006 | $259,941 | $21,743 | $385,673 |
| **Funded Debt Investments** | $30,595 | $157,554 | $88,157 | $220,257 |
| **Equity Investments** | $60 | $733 | $202 | $3,093 |
| **Non-Binding Term Sheets** | $113,959 | $803,637 | $312,738 | $1,460,266 |

(1) Includes backlog of potential future commitments.

We may enter into commitments with certain portfolio companies that permit an increase in the commitment amount in the future in the event that conditions to such increases are met (“backlog of potential future commitments”). If such conditions to increase are met, these amounts may become unfunded commitments if not drawn prior to expiration. As of June 30, 2023 and December 31, 2022, we did not have any backlog of potential future commitments.

#### Asset Quality

Consistent with TPC’s existing policies, our Adviser maintains a credit watch list which places borrowers into five risk categories based on our Adviser’s senior investment team’s judgment, where 1 is the best rating and all new loans are generally assigned a rating of 2.

| Category | Category Definition | Action Item |
| --- | --- | --- |
| **Clear (1)** | Performing above expectations and/or strong financial or enterprise profile, value or coverage. | Review quarterly. |
| **White (2)** | Performing at expectations and/or reasonably close to it. Reasonable financial or enterprise profile, value or coverage. Generally, all new loans are initially graded White (2). | Contact portfolio company periodically; in no event less than quarterly. |
| **Yellow (3)** | Performing generally below expectations and/or some proactive concern due to industry, business, financial and/or related factors. Adequate financial or enterprise profile, value or coverage. | Contact portfolio company monthly or more frequently as determined by our Adviser’s Investment Committee; contact venture capital investors. |
| **Orange (4)** | Needs close attention due to performance materially below expectations, weak financial and/or enterprise profile, concern regarding additional capital or exit equivalent. | Contact portfolio company weekly or more frequently as determined by our Adviser’s Investment Committee; contact venture capital investors regularly; our Adviser forms a workout group to minimize risk of loss. |
| **Red (5)** | Serious concern/trouble due to pending or actual default or equivalent. May experience partial and/or full loss. | Maximize value from assets. |

The following table shows the credit rankings for the portfolio companies that had outstanding debt obligations to us as of June 30, 2023 and December 31, 2022:

| Credit Category (dollars in thousands) | June 30, 2023 Fair Value | Percentage of Total Debt Investments | Number of Portfolio Companies | December 31, 2022 Fair Value | Percentage of Total Debt Investments | Number of Portfolio Companies |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Clear (1) | $113,825 | 13.3% | 7 | $55,921 | 6.6% | 3 |
| White (2) | 638,248 | 74.8 | 38 | 699,008 | 81.9 | 48 |
| Yellow (3) | 58,507 | 6.9 | 5 | 88,912 | 10.4 | 5 |
| Orange (4) | 14,174 | 1.7 | 2 | 9,110 | 1.1 | 1 |
| Red (5) | 28,443 | 3.3 | 4 | — | — | — |
|  | $853,197 | 100.0% | 56 | $852,951 | 100.0% | 57 |

60

As of June 30, 2023 and December 31, 2022, the weighted average investment ranking of our debt investment portfolio was 2.07 and 2.06, respectively. During the three months ended June 30, 2023, portfolio company credit category changes, excluding fundings and repayments, consisted of the following: three portfolio companies with an aggregate principal balance of $33.2 million were upgraded from White (2) to Clear (1), one portfolio company with a principal balance of $20.0 million2 was upgraded from Yellow (3) to White (2), one portfolio company with a principal balance of $5.0 million was downgraded from White (2) to Yellow (3), one portfolio company with a principal balance of $10.0 million was downgraded from White (2) to Orange (4), two portfolio companies with an aggregate principal balance of $23.4 million were downgraded from Yellow (3) to Red (5), and two portfolio companies with an aggregate principal balance of $47.6 million were downgraded from Orange (4) to Red (5).

As of June 30, 2023, we had investments in six portfolio companies which were on non-accrual status, with an aggregate cost and fair value of $102.6 million and $40.1 million, respectively. As of December 31, 2022, we had an investment in one portfolio company which was on non-accrual status, with an aggregate cost and fair value of $29.5 million and $9.1 million, respectively.

### Results of Operations

#### Comparison of operating results for the three and six months ended June 30, 2023 and 2022

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

For the three months ended June 30, 2023, our net decrease in net assets resulting from operations was $20.9 million, which was comprised of $18.8 million of net investment income and $39.7 million of net realized and unrealized losses. For the three months ended June 30, 2022, our net decrease in net assets resulting from operations was $14.4 million, which was comprised of $12.7 million of net investment income and $27.1 million of net realized and unrealized losses. On a per share basis for the three months ended June 30, 2023, net investment income was $0.53 per share and the net decrease in net assets from operations was $0.59 per share, as compared to net investment income of $0.41 per share and a net decrease in net assets from operations of $0.46 per share for the three months ended June 30, 2022.

For the six months ended June 30, 2023, our net decrease in net assets resulting from operations was $13.2 million, which was comprised of $37.4 million of net investment income and $50.6 million of net realized and unrealized losses. For the six months ended June 30, 2022, our net decrease in net assets resulting from operations was $8.7 million, which was comprised of $26.2 million of net investment income and $34.9 million of net realized and unrealized losses. On a per share basis for the six months ended June 30, 2023, net investment income was $1.06 per share and the net decrease in net assets from operations was $0.37 per share, as compared to net investment income of $0.84 per share and a net decrease in net assets from operations of $0.28 per share for the six months ended June 30, 2022.

#### Investment Income

For the three months ended June 30, 2023, total investment and other income was $35.2 million as compared to $27.4 million for the three months ended June 30, 2022. The increase in total investment and other income for the three months ended June 30, 2023, compared to the 2022 period, is primarily due to a greater weighted average principal amount outstanding on our income-bearing debt investment portfolio and higher investment yields, partially offset by reduced loan prepayment activity.

For the six months ended June 30, 2023, total investment and other income was $68.8 million as compared to $54.8 million for the six months ended June 30, 2022. The increase in total investment and other income for the six months ended June 30, 2023, compared to the 2022 period, is primarily due to a greater weighted average principal amount outstanding on our income-bearing debt investment portfolio and higher investment yields, partially offset by reduced loan prepayment activity.

For the three months ended June 30, 2023, we recognized $0.7 million in other income consisting of $0.1 million due to the termination or expiration of unfunded commitments and $0.6 million from the realization of certain fees paid and accrued from portfolio companies. For the three months ended June 30, 2022, we recognized $0.4 million in other income consisting of $0.4 million from the realization of certain fees paid and accrued from portfolio companies and other income related to prepayment activity.

For the six months ended June 30, 2023, we recognized $2.1 million in other income consisting of $1.1 million due to the termination or expiration of unfunded commitments and $1.0 million from the realization of certain fees paid and accrued from portfolio companies. For the six months ended June 30, 2022, we recognized $1.8 million in other income consisting primarily of $1.8 million from the realization of certain fees paid and accrued from portfolio companies and other income related to prepayment activity.

2 Represents the Hey Favor, Inc. (f/k/a The Pill Club Holdings, Inc.) loans assumed by Thirty Madison, Inc.

#### Operating Expenses

Total operating expenses consist of our base management fee, income incentive fee, capital gains incentive fee, interest expense and amortization of fees, administration agreement expenses, and general and administrative expenses. We anticipate operating expenses will increase over time as our portfolio continues to grow. However, we anticipate operating expenses, as a percentage of totals assets and net assets, will generally decrease over time as our portfolio and capital base expand. We expect base management and income incentive fees will increase as we grow our asset base and our earnings. The capital gains incentive fee will depend on realized gains and losses and unrealized losses. Interest expenses will generally increase as we borrow greater amounts under the Credit Facility, issue additional debt securities, and as interest rates increase. We generally expect expenses under the administration agreement and general and administrative expenses to increase over time to meet the additional requirements associated with servicing a larger portfolio.

For the three months ended June 30, 2023, total operating expenses were $16.3 million as compared to $14.8 million for the three months ended June 30, 2022. For the six months ended June 30, 2023, total operating expenses were $31.4 million as compared to $28.6 million for the six months ended June 30, 2022.

Base management fees for the three months ended June 30, 2023 and 2022 totaled $4.5 million and $3.9 million, respectively. Base management fees for the six months ended June 30, 2023 and 2022 totaled $8.8 million and $7.6 million, respectively. Base management fees increased during the three and six months ended June 30, 2023, as compared to the three and six months ended June 30, 2022, due to increases in the average size of our portfolio during the applicable periods used in the calculations.

There were no income incentive fees for the three and six months ended June 30, 2023. Income incentive fees for the three and six months ended June 30, 2022 totaled $3.2 million and $6.6 million, respectively. For the three and six months ended June 30, 2023, our income incentive fee was reduced by $3.8 million and $7.5 million, respectively, due to the total return requirement under the income component of our incentive fee structure, which resulted in a corresponding increase in net investment income for the three and six months ended June 30, 2023 of $3.7 million and $7.5 million, respectively.

There were no capital gains incentive fee expenses for the six months ended June 30, 2023 and 2022.

Interest expense and amortization of fees totaled $9.9 million and $6.1 million for the three months ended June 30, 2023 and 2022, respectively. The increase during the three months ended June 30, 2023, as compared to the three months ended June 30, 2022, is primarily due to a greater weighted-average outstanding principal balance under the Credit Facility and an increase in interest rates.

Interest expense and amortization of fees totaled $19.2 million and $11.2 million for the six months ended June 30, 2023 and 2022, respectively. The increase during the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, is primarily due to a greater weighted-average outstanding principal balance under the Credit Facility and an increase in interest rates.

Administration agreement and general and administrative expenses totaled $1.9 million and $1.6 million for the three months ended June 30, 2023 and 2022, respectively. Administration agreement and general and administrative expenses totaled $3.4 million and $3.2 million for the six months ended June 30, 2023 and 2022, respectively. The increase for the 2023 periods, as compared to the 2022 periods, was primarily due to higher excise tax accruals.

#### Net Realized Gains and Losses and Net Unrealized Gains and Losses

Realized gains and losses are included in “net realized gains (losses) on investments” in the consolidated statements of operations.

During the three months ended June 30, 2023, we recognized net realized gains on investments of $1.9 million resulting primarily from $2.9 million of realized gains from the sale of publicly traded equity investments, partially offset by $1.0 million of realized losses on investments. During the six months ended June 30, 2023, we recognized net realized gains on investments of $1.8 million.

During the three months ended June 30, 2022, we recognized net realized losses on investments of $0.7 million resulting primarily from the write-off of a warrant investment. During the six months ended June 30, 2022, we recognized net losses on investments of $3.9 million, primarily resulting from the sale of our investment in Casper Sleep Inc., the write-off of a warrant investment and foreign currency adjustments.

Unrealized gains and losses are included in “net change in unrealized gains (losses) on investments” in the consolidated statements of operations.

Net change in unrealized losses during the three months ended June 30, 2023 was $41.6 million, consisting of $37.8 million of net unrealized losses on the debt investment portfolio and $3.8 million of net unrealized losses on the warrant and equity portfolio resulting from fair value adjustments and the reversal of previously recorded unrealized gains from investments realized during the period. Net change in unrealized losses during the six months ended June 30, 2023 was $52.4 million, consisting of $44.4 million of net unrealized losses on the debt investment portfolio and $8.0 million of net unrealized losses on the warrant and equity portfolio resulting from fair value adjustments and the reversal of previously recorded unrealized gains from investments realized during the period.

Net change in unrealized losses during the three months ended June 30, 2022 was $26.3 million, consisting of $16.8 million of net unrealized losses on our debt investment portfolio, of which $13.2 million of unrealized losses relate to the write-down of Pencil and Pixel, Inc., which was rated Red (5) on our credit watch list and $4.9 million of net unrealized losses on our warrant and equity portfolio resulting from fair value and mark-to-market adjustments, as well as $4.6 million of net unrealized losses from foreign currency adjustments. Net change in unrealized losses during the six months ended June 30, 2022 was $31.1 million, consisting of $21.2 million of net unrealized losses on our debt investment portfolio, of which $13.2 million of unrealized losses relate to the write-down of Pencil and Pixel, Inc., which was rated Red (5) on our credit watch list and $4.8 million of net unrealized losses on our warrant and equity portfolio resulting from fair value and mark-to-market adjustments, as well as $5.1 million of net unrealized losses from foreign currency adjustments.

Net change in realized and unrealized gains or losses in subsequent periods may be volatile as such results depend on changes in the market, changes in the underlying performance of our portfolio companies and their respective industries, and other market factors.

#### Portfolio Yield and Total Return

Investment income includes interest income on our debt investments, utilizing the effective yield method, including cash interest income as well as the amortization of any purchase premium, accretion of purchase discount, original issue discount, facilities fees, and the amortization and payment of the end-of-term (“EOT”) payments. For the three months ended June 30, 2023 and 2022, interest income totaled $34.5 million and $27.0 million, respectively, representing a weighted average annualized portfolio yield on total debt investments for the period held of 14.7% and 14.5%, respectively. For the six months ended June 30, 2023 and 2022, interest income totaled $66.8 million and $52.9 million, respectively, representing a weighted average annualized portfolio yield on total debt investments for the period held of 14.7% and 15.0%, respectively.

We calculate weighted average annualized portfolio yields for periods shown as the annualized rates of the interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period. The weighted average yields reported for these periods are annualized and reflect the weighted average yields to maturities. Should the portfolio companies choose to repay their loans earlier, our weighted average yields will increase for those debt investments affected but may reduce our weighted average yields on the remaining portfolio in future quarters.

For the three months ended June 30, 2023 and 2022, the yield on our total debt portfolio, excluding the impact of prepayments, was 14.1% and 12.8%, respectively. For the six months ended June 30, 2023 and 2022, the yield on our total debt portfolio, excluding the impact of prepayments, was 14.4% and 12.8%, respectively.

The following table shows the weighted average annualized portfolio yield on our total debt portfolio comprising of cash interest income, accretion of the net purchase discount, facilities fees and the value of warrant investments received, accretion of EOT payments and the accelerated receipt of EOT payments on prepayments:

| Ratios (Percentages, on an annualized basis)(1) 2023 | For the Three Months Ended June 30, 2022 | 2023 | For the Six Months Ended June 30, 2022 |  |
| --- | ---: | ---: | ---: | ---: |
| Weighted average annualized portfolio yield on total debt investments(2) | 14.7% | 14.5% | 14.7% | 15.0% |
| Coupon income | 11.8% | 10.4% | 11.8% | 10.2% |
| Accretion of discount | 0.7% | 0.7% | 0.9% | 0.8% |
| Accretion of end-of-term payments | 1.6% | 1.7% | 1.7% | 1.8% |
| Impact of prepayments during the period | 0.6% | 1.7% | 0.3% | 2.2% |

(1) Weighted average portfolio yields on total debt investments for periods shown are the annualized rates of interest income recognized during the period divided by the average amortized cost of debt investments in the portfolio during the period.

(2) The weighted average portfolio yields on total debt investments reflected above do not represent actual investment returns to our stockholders.

Our weighted average annualized portfolio yield on debt investments may be higher than an investor’s yield on an investment in shares of our common stock. Our weighted average annualized portfolio yield on debt investments does not reflect operating expenses that may be incurred by us and, thus, by our stockholders. In addition, our weighted average annualized portfolio yield on debt investments and total return figures disclosed in this Quarterly Report on Form 10-Q do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of our common stock. Our weighted average annualized portfolio yield on debt investments and total return figures do not represent actual investment returns to stockholders. Our weighted average annualized portfolio yield on debt investments and total return figures are subject to change and, in the future, may be greater or less than the rates in this Quarterly Report on Form 10-Q. Total return based on NAV is the change in ending NAV per share plus distributions per share paid during the period assuming participation in our dividend reinvestment plan divided by the beginning NAV per share for such period.

Total return based on stock price is the change in the ending stock price of our common stock plus distributions paid during the period assuming participation in our dividend reinvestment plan divided by the beginning stock price of our common stock for such period. For the three months ended June 30, 2023 and 2022, our total return during the period based on the change in NAV plus distributions reinvested as of the respective distribution dates was (5.2)% and (3.2)%, respectively, and our total return during the period based on the change in stock price plus distributions reinvested as of the respective distribution dates was 1.0% and (24.9)%, respectively. For the six months ended June 30, 2023 and 2022, our total return during the period based on the change in NAV plus distributions reinvested as of the respective distribution dates was (3.4)% and (2.3)%, respectively, and our total return during the period based on the change in stock price plus distributions reinvested as of the respective distribution dates was 21.1% and (25.4)%, respectively.

The table below shows our return on average total assets and return on average NAV for the three and six months ended June 30, 2023 and 2022:

| Returns on Net Asset Value and Total Assets (dollars in thousands) 2023 | For the Three Months Ended June 30, 2022 | 2023 | For the Six Months Ended June 30, 2022 |  |
| --- | ---: | ---: | ---: | ---: |
| Net investment income | $18,837 | $12,654 | $37,416 | $26,201 |
| Net increase (decrease) in net assets | $(20,855) | $(14,413) | $(13,176) | $(8,708) |
| Average net asset value(1) | $411,820 | $428,378 | $417,763 | $432,071 |
| Average total assets(1) | $1,043,847 | $891,559 | $1,037,328 | $868,359 |
| Net investment income to average net asset value(2) | 18.3% | 11.8% | 18.1% | 12.2% |
| Net increase (decrease) in net assets to average net asset value(2) | (20.3)% | (13.5)% | (6.4)% | (4.1)% |
| Net investment income to average total assets(2) | 7.2% | 5.7% | 7.3% | 6.1% |
| Net increase (decrease) in net assets to average total assets(2) | (8.0)% | (6.5)% | (2.6)% | (2.0)% |

(1) The average net asset values and the average total assets are computed based on daily balances.

(2) Percentage is presented on an annualized basis.

### Critical Accounting Policies

The preparation of our consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Changes in the economic environment, financial markets, and any other parameters used in determining such estimates, including with respect to the valuation of our investments, could cause actual results to differ.

Understanding our accounting policies and the extent to which we use management’s judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in “Note 2. Significant Accounting Policies” in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in this Quarterly Report on Form 10-Q. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. We have identified the valuation of our investment portfolio, including our investment valuation policy (which has been approved by the Board), as our critical accounting policy and estimates. The critical accounting policies should be read in conjunction with the risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in this Quarterly Report on Form 10-Q.

#### Investment Valuation

Investment transactions are recorded on a trade-date basis. Our investments are carried at fair value in accordance with the 1940 Act and ASC Topic 946 and measured in accordance with Accounting Standards Codification Topic 820, *Fair Value Measurements and Disclosure*, or “ASC Topic 820,” issued by the FASB. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measure considered from the perspective of the market’s participant who holds the financial instrument rather than an entity-specific measure. When market assumptions are not readily available, our own assumptions are set to reflect those that the Adviser believes market participants would use in pricing the financial instruments on the measurement date.

The availability of observable inputs can vary depending on the financial instrument and is affected by a variety of factors. To the extent the valuation is based on models or inputs that are less observable, the determination of fair value requires more judgment. Our valuation methodology is approved by the Board, and the Board is responsible for the fair values determined. As markets change, new types of investments are made, or pricing for certain investments becomes more or less observable, management, with oversight from the Board, may refine our valuation methodologies to best reflect the fair value of our investments appropriately.

As of June 30, 2023, our investment portfolio, valued at fair value in accordance with our Board-approved valuation policy, represented 90.8% of our total assets, as compared to 93.6% of our total assets as of December 31, 2022.

See “Note 4. Investments” in the notes to the consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 1, 2023 and “Note 4. Investments” in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for more information on our valuation process.

### Liquidity and Capital Resources

We believe that our current cash and cash equivalents on hand, our available borrowing capacity under the Credit Facility and our anticipated cash flows from operations, including from net cash proceeds from our ATM Program (described below) and contractual monthly portfolio company payments and cash flows, prepayments, and the ability to liquidate publicly traded investments, will be adequate to meet our cash needs for our daily operations, including to fund our unfunded commitment obligations.

#### Cash Flows

During the six months ended June 30, 2023, net cash used in operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $7.5 million, and net cash provided by financing activities was $37.7 million due primarily to net borrowings under the Credit Facility of $65.0 million partially offset by $27.2 million in distributions paid. As of June 30, 2023, cash and cash equivalents, including restricted cash, was $89.4 million.

During the six months ended June 30, 2022, net cash used in operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $23.2 million, and net cash provided by financing activities was $7.1 million due primarily from the issuance of the 2027 Notes, offset by net repayments under the Credit Facility of $95.0 million and $21.5 million in distributions paid. As of June 30, 2022, cash and cash equivalents, including restricted cash, was $43.1 million.

#### Capital Resources and Borrowings

As a BDC, we generally have an ongoing need to raise additional capital for investment purposes. As a result, we expect, from time to time, to access the debt and equity markets when we believe it is necessary and appropriate to do so. In this regard, we continue to explore various options for obtaining additional debt or equity capital for investments. This may include expanding or extending the Credit Facility or the issuance of additional shares of our common stock, including through our ATM Program (as described below) or debt securities. If we are unable to obtain leverage or raise equity capital on terms that are acceptable to us, our ability to grow our portfolio could be substantially impacted.

#### Credit Facility

As of June 30, 2023, we had $350 million in total commitments available under the Credit Facility, subject to various covenants and borrowing base requirements. The Credit Facility also includes an accordion feature, which allows us to increase the size of the Credit Facility to up to $400 million under certain circumstances. The revolving period under the Credit Facility expires on May 31, 2024, and the maturity date of the Credit Facility is November 30, 2025 (unless otherwise terminated earlier pursuant to its terms). Borrowings under the Credit Facility bear interest at the sum of (i) a floating rate based on certain indices, including SOFR and commercial paper rates (subject to a floor of 0.50%), plus (ii) a margin of 2.80% if facility utilization is greater than or equal to 75%, 2.90% if utilization is greater than or equal to 50%, 3.00% if utilization is less than 50% and 4.5% during the amortization period. See “Note 6. Borrowings” in the notes to the consolidated financial statements for more information regarding the terms of the Credit Facility.

As of June 30, 2023 and December 31, 2022, we had outstanding borrowings under the Credit Facility of $240.0 million and $175.0 million, respectively, excluding deferred credit facility costs of $3.4 million and $4.1 million, respectively, which is included in the consolidated statements of assets and liabilities. We had $110.0 million and $175.0 million of remaining capacity on our Credit Facility as of June 30, 2023 and December 31, 2022, respectively.

#### 2025 Notes

On March 19, 2020, we completed a private offering of $70.0 million in aggregate principal amount of the 2025 Notes and received net proceeds of $69.1 million, after the payment of fees and offering costs. The interest on the 2025 Notes, which accrues at an annual rate of 4.50%, is payable semiannually on March 19 and September 19 each year. The maturity date of the 2025 Notes is scheduled for March 19, 2025.

As of June 30, 2023 and December 31, 2022, we have recorded in the consolidated statements of assets and liabilities our liability for the 2025 Notes, net of deferred issuance costs, of $69.6 million and $69.5 million, respectively. See “Note 6. Borrowings” in the notes to the consolidated financial statements for more information regarding the 2025 Notes.

#### 2026 Notes

On March 1, 2021, we completed a private offering of $200.0 million in aggregate principal amount of the 2026 Notes and received net proceeds of $197.9 million, after the payment of fees and offering costs. The interest on the 2026 Notes, which accrues at an annual rate of 4.50%, is payable semiannually on March 19 and September 19 each year. The maturity date of the 2026 Notes is scheduled for March 1, 2026.

As of June 30, 2023 and December 31, 2022, we have recorded in the consolidated statements of assets and liabilities our liability for the 2026 Notes, net of deferred issuance costs, of $198.8 million and $198.6 million, respectively. See “Note 6. Borrowings” in the notes to the consolidated financial statements for more information regarding the 2026 Notes.

#### 2027 Notes

On February 28, 2022, we completed a private offering of $125.0 million in aggregate principal amount of the 2027 Notes and received net proceeds of $123.7 million, after the payment of fees and offering costs. The interest on the 2027 Notes, which accrues at an annual rate of 5.00%, is payable semiannually on February 28 and August 28 each year. The maturity date of the 2027 Notes is scheduled for February 28, 2027.

As of June 30, 2023 and December 31, 2022, we have recorded in the consolidated statements of assets and liabilities our liability for the 2027 Notes, net of deferred issuance costs, of $124.0 million and $123.8 million, respectively. See “Note 6. Borrowings” in the notes to the consolidated financial statements for more information regarding the 2027 Notes.

#### ATM Program

On September 30, 2022, we entered into a sales agreement (the “Sales Agreement”) with the Adviser, the Administrator and UBS Securities LLC (the “Sales Agent”), providing for the issuance from time to time of up to an aggregate of $50.0 million in shares of our common stock by means of at-the-market offerings (the “ATM Program”). Subject to the terms of the Sales Agreement, the Sales Agent is not required to sell any specific number or dollar amount of securities but will act as our sales agent using commercially reasonable efforts consistent with the Sales Agent’s normal trading and sales practices, on mutually agreed terms between us and the Sales Agent.

As of June 30, 2023, $50.0 million in shares remained available for sale under the ATM Program.

#### Asset Coverage Requirements

On June 21, 2018, our stockholders voted at a special meeting of stockholders to approve a proposal to authorize us to be subject to a reduced asset coverage ratio of at least 150% under the 1940 Act. As a result of the stockholder approval at the special meeting, effective June 22, 2018, our applicable minimum asset coverage ratio under the 1940 Act has been decreased to 150% from 200%. Thus, we are permitted under the 1940 Act, under specified conditions, to issue multiple classes of debt and one class of stock senior to our common stock if our asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after each such issuance. As of June 30, 2023, our asset coverage for borrowed amounts was 160%.

#### Contractual Obligations

The following table shows a summary of our payment obligations for repayment of debt as of June 30, 2023:

| Payments Due By Period (in thousands) Total | June 30, 2023 Less than 1 year | 1-3 years | 3-5 years | More than 5 years |  |
| --- | ---: | ---: | ---: | ---: | ---: |
| Credit Facility | $240,000 | $— | $240,000 | $— | $— |
| 2025 Notes | 70,000 | — | 70,000 | — | — |
| 2026 Notes | 200,000 | — | 200,000 | — | — |
| 2027 Notes | 125,000 | — | — | 125,000 | — |
| Total | $635,000 | $— | $510,000 | $125,000 | $— |

66

#### Unfunded Commitments

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. As of June 30, 2023 and December 31, 2022, our unfunded commitments totaled $205.3 million and $324.0 million, respectively, of which $53.9 million and $88.9 million, respectively, was dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them.

The following table shows our unfunded commitments by portfolio company as of June 30, 2023 and December 31, 2022:

| Unfunded Commitments(1) (in thousands) | June 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Overtime Sports Inc. | $22,857 | $22,857 |
| Corelight, Inc. | 20,000 | 30,000 |
| Athletic Greens (USA) Inc. | 20,000 | 20,000 |
| Found Health, Inc. | 20,000 | 20,000 |
| Frubana Inc. | 16,790 | 25,000 |
| Savage X, Inc. | 12,500 | 12,500 |
| Lower Holding Company | 12,000 | 12,000 |
| Loft Orbital Solutions Inc. | 10,000 | 10,000 |
| Vial Health Technology Inc. | 10,000 | 10,000 |
| Activehours, Inc. (d/b/a Earnin) | 10,000 | 10,000 |
| Avantstay, Inc. | 7,020 | 10,000 |
| Minted, Inc. | 5,509 | 5,100 |
| NewStore Inc. | 5,000 | 5,000 |
| Don't Run Out, Inc. | 5,000 | 5,000 |
| Homeward, Inc. | 5,000 | 5,000 |
| Jerry Services, Inc. | 5,000 | 15,000 |
| Foodology Inc. | 3,720 | 7,976 |
| McN Investments Ltd. | 3,000 | 8,000 |
| Tempus Ex Machina, Inc. | 3,000 | — |
| Quick Commerce Ltd | 2,000 | 4,000 |
| JOKR S.à r.l. | 1,499 | 1,499 |
| TFG Holding, Inc. | 1,400 | — |
| Belong Home, Inc. | 1,000 | 1,000 |
| Open Space Labs, Inc. | 1,000 | 1,000 |
| Substack Inc. | 1,000 | 1,000 |
| Pair EyeWear, Inc. | 1,000 | 1,000 |
| True Footage Inc. | 23 | 1,417 |
| LeoLabs, Inc. | — | 15,000 |
| Kalderos, Inc. | — | 13,000 |
| RenoRun US Inc. | — | 12,750 |
| The Aligned Company (f/k/a Thingy Thing Inc.) | — | 12,000 |
| Merama Inc. | — | 9,718 |
| Mynd Management, Inc. | — | 5,000 |
| FlashParking, Inc. | — | 3,490 |
| Baby Generation, Inc. | — | 2,500 |
| Flo Health, Inc. | — | 2,167 |
| Medly Health Inc. | — | 2,036 |
| Dia Styling Co. | — | 1,000 |
| Mystery Tackle Box, Inc. (d/b/a Catch Co.) | — | 1,000 |
| **Total** | $205,318 | $324,010 |

(1) Does not include backlog of potential future commitments. Refer to “Investment Activity” above.

The following table shows additional information on our unfunded commitments regarding milestones and expirations as of June 30, 2023 and December 31, 2022:

| Unfunded Commitments(1) (in thousands) | June 30, 2023 | December 31, 2022 |
| --- | ---: | ---: |
| Dependent on milestones | $53,943 | $88,917 |
| Expiring during: |  |  |
| 2023 | $120,163 | $224,053 |
| 2024 | 56,790 | 72,000 |
| 2025 | 28,365 | 27,957 |
| Unfunded commitments | $205,318 | $324,010 |

(1) Does not include backlog of potential future commitments.

As of June 30, 2023, our unfunded commitments to 27 companies totaled $205.3 million. During the three and six months ended June 30, 2023, $36.6 million and $52.3 million, respectively, in unfunded commitments expired or were terminated.

As of December 31, 2022, our unfunded commitments to 37 companies totaled $324.0 million. During the year ended December 31, 2022, $43.8 million in unfunded commitments expired or were terminated.

Our credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences material adverse events that affect the financial condition or business outlook for the portfolio company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for us. We generally expect 50% - 75% of our unfunded commitments to eventually be drawn before the expiration of their corresponding availability periods.

The fair value at the inception of the delay draw credit agreements with our portfolio companies is equal to the fees and/or warrants received to enter into these agreements, taking into account the remaining terms of the agreements and the relevant counterparty’s credit profile. The unfunded commitment liability reflects the fair value of these future funding commitments. As of June 30, 2023 and December 31, 2022, the fair value for these unfunded commitments totaled $3.0 million and $5.5 million, respectively, and was included in “other accrued expenses and liabilities” in our consolidated statements of assets and liabilities.

#### Distributions

We have elected to be treated, and intend to qualify annually, as a RIC under the Code. To maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net realized short-term capital gains in excess of our net realized long-term capital losses, if any, to our stockholders. In order to avoid a non-deductible 4% U.S. federal excise tax on certain of our undistributed income, we would need to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which our capital gains exceed our capital losses (adjusted for certain ordinary losses) for a one-year period ending on October 31 of the calendar year (unless an election is made by us to use our taxable year); and (c) certain undistributed amounts from previous years on which we paid no U.S. federal income tax. For the tax years ended December 31, 2022 and 2021, we were subject to a 4% U.S. federal excise tax and we may be subject to this tax in future years. In such cases, we will be liable for the tax only on the amount by which we do not meet the foregoing distribution requirement.

To the extent our taxable earnings fall below the total amount of our distributions for the year, a portion of those distributions may be deemed a return of capital to our stockholders. Our Adviser monitors available taxable earnings, including net investment income and realized capital gains, to determine if a return of capital may occur for the year. We estimate the source of our distributions as required by Section 19(a) of the 1940 Act to determine whether payment of dividends are expected to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods, but we will not be able to determine whether any specific distribution will be treated as made out of our taxable earnings or as a return of capital until after the end of our taxable year. Any amount treated as a return of capital will reduce a stockholder’s adjusted tax basis in his or her common stock, thereby increasing his or her potential gain or reducing his or her potential loss on the subsequent sale or other disposition of his or her common stock. On a quarterly basis, for any payment of dividends estimated to be paid from any other source other than net investment income accrued for the current period or certain cumulative periods based on the Section 19(a) requirement, we post a Section 19(a) notice through the Depository Trust Company’s Legal Notice System and our website, as well as send our registered stockholders a printed copy of such notice along with the dividend payment. The estimates of the source of the distribution are interim estimates based on GAAP that are subject to revision, and the exact character of the distributions for tax purposes cannot be determined until the final books and records are finalized for the calendar year. Therefore, these estimates are made solely in order to comply with the requirements of Section 19(a) of the 1940 Act and should not be relied upon for tax reporting or any other purposes and could differ significantly from the actual character of distributions for tax purposes.

The following table shows our cash distributions per share that have been authorized by our Board since our initial public offering to June 30, 2023. From March 5, 2014 (commencement of operations) to December 31, 2015, and during the years ended December 31, 2022, 2018 and 2017 distributions represent ordinary income as our earnings exceeded distributions. Approximately $0.24 per share of the distributions during the year ended December 31, 2016 represented a return of capital. During the years ended December 31, 2021, 2020 and 2019, distributions represent ordinary income and long term capital gains. Any future distributions to our stockholders may be for amounts less than our historical distributions, may be made less frequently than historical practices, and may be made in part cash and part stock (as per each stockholder’s election), subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution.

| Period Ended | Date Declared | Record Date | Payment Date | Per Share Amount |  |
| --- | --- | --- | --- | ---: | ---: |
| March 31, 2014 | April 3, 2014 | April 15, 2014 | April 30, 2014 | $0.09 | (1) |
| June 30, 2014 | May 13, 2014 | May 30, 2014 | June 17, 2014 | 0.30 |  |
| September 30, 2014 | August 11, 2014 | August 29, 2014 | September 16, 2014 | 0.32 |  |
| December 31, 2014 | October 27, 2014 | November 28, 2014 | December 16, 2014 | 0.36 |  |
| December 31, 2014 | December 3, 2014 | December 22, 2014 | December 31, 2014 | 0.15 | (2) |
| March 31, 2015 | March 16, 2015 | March 26, 2015 | April 16, 2015 | 0.36 |  |
| June 30, 2015 | May 6, 2015 | May 29, 2015 | June 16, 2015 | 0.36 |  |
| September 30, 2015 | August 11, 2015 | August 31, 2015 | September 16, 2015 | 0.36 |  |
| December 31, 2015 | November 10, 2015 | November 30, 2015 | December 16, 2015 | 0.36 |  |
| March 31, 2016 | March 14, 2016 | March 31, 2016 | April 15, 2016 | 0.36 |  |
| June 30, 2016 | May 9, 2016 | May 31, 2016 | June 16, 2016 | 0.36 |  |
| September 30, 2016 | August 8, 2016 | August 31, 2016 | September 16, 2016 | 0.36 |  |
| December 31, 2016 | November 7, 2016 | November 30, 2016 | December 16, 2016 | 0.36 |  |
| March 31, 2017 | March 13, 2017 | March 31, 2017 | April 17, 2017 | 0.36 |  |
| June 30, 2017 | May 9, 2017 | May 31, 2017 | June 16, 2017 | 0.36 |  |
| September 30, 2017 | August 8, 2017 | August 31, 2017 | September 15, 2017 | 0.36 |  |
| December 31, 2017 | November 6, 2017 | November 17, 2017 | December 1, 2017 | 0.36 |  |
| March 31, 2018 | March 12, 2018 | March 23, 2018 | April 6, 2018 | 0.36 |  |
| June 30, 2018 | May 2, 2018 | May 31, 2018 | June 15, 2018 | 0.36 |  |
| September 30, 2018 | August 1, 2018 | August 31, 2018 | September 14, 2018 | 0.36 |  |
| December 31, 2018 | October 31, 2018 | November 30, 2018 | December 14, 2018 | 0.36 |  |
| December 31, 2018 | December 6, 2018 | December 20, 2018 | December 28, 2018 | 0.10 | (2) |
| March 31, 2019 | March 1, 2019 | March 20, 2019 | March 29, 2019 | 0.36 |  |
| June 30, 2019 | May 1, 2019 | May 31, 2019 | June 14, 2019 | 0.36 |  |
| September 30, 2019 | July 31, 2019 | August 30, 2019 | September 16, 2019 | 0.36 |  |
| December 31, 2019 | October 30, 2019 | November 29, 2019 | December 16, 2019 | 0.36 |  |
| March 31, 2020 | February 28, 2020 | March 16, 2020 | March 30, 2020 | 0.36 |  |
| June 30, 2020 | April 30, 2020 | June 16, 2020 | June 30, 2020 | 0.36 |  |
| September 30, 2020 | July 30, 2020 | August 31, 2020 | September 15, 2020 | 0.36 |  |
| December 31, 2020 | October 29, 2020 | November 27, 2020 | December 14, 2020 | 0.36 |  |
| December 31, 2020 | December 21, 2020 | December 31, 2020 | January 13, 2021 | 0.10 | (2) |
| March 31, 2021 | February 24, 2021 | March 15, 2021 | March 31, 2021 | 0.36 |  |
| June 30, 2021 | April 29, 2021 | June 16, 2021 | June 30, 2021 | 0.36 |  |
| September 30, 2021 | July 28, 2021 | August 31, 2021 | September 15, 2021 | 0.36 |  |
| December 31, 2021 | October 29, 2021 | November 30, 2021 | December 15, 2021 | 0.36 |  |
| March 31, 2022 | February 22, 2022 | March 15, 2022 | March 31, 2022 | 0.36 |  |
| June 30, 2022 | April 28, 2022 | June 16, 2022 | June 30, 2022 | 0.36 |  |
| September 30, 2022 | July 27, 2022 | September 15, 2022 | September 30, 2022 | 0.36 |  |
| December 31, 2022 | October 28, 2022 | December 15, 2022 | December 30, 2022 | 0.37 |  |
| December 31, 2022 | December 9, 2022 | December 22, 2022 | December 30, 2022 | 0.10 | (2) |
| March 31, 2023 | February 21, 2023 | March 15, 2023 | March 31, 2023 | 0.40 |  |
| June 30, 2023 | April 26, 2023 | June 15, 2023 | June 30, 2023 | 0.40 |  |
|  |  |  | Total cash distributions | $13.85 |  |

(1) The amount of this initial distribution reflected a quarterly distribution rate of $0.30 per share, prorated for the 27 days for the period from the pricing of our initial public offering on March 5, 2014 (commencement of operations), through March 31, 2014.

(2) Represents a special distribution.

For the three months ended June 30, 2023, distributions paid were comprised of interest-sourced distributions (qualified interest income) in an amount equal to 74.2% of total distributions paid. As of June 30, 2023, we had estimated undistributed taxable earnings from net investment income of $32.1 million, or $0.90 per share.

### Recent Accounting Pronouncements

In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” (“ASU 2022-03”). ASU 2022-03 (1) clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and (2) requires specific disclosures related to such an equity security. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and interim periods within that fiscal year, with early adoption permitted. The adoption of ASU 2022-03 did not have a material impact on the consolidated financial statements.

### Recent Developments

#### Distribution

On July 26, 2023, the Board declared a $0.40 per share regular quarterly distribution payable on September 29, 2023 to stockholders of record on September 15, 2023.

#### Recent Portfolio Activity

From July 1, 2023 through August 1, 2023, we closed $5.2 million of additional debt commitments, funded $6.0 million in new investments and $25.0 million of our unfunded commitments expired or were terminated. From July 1, 2023 through August 1, 2023, we received $6.0 million of principal repayments.

Subsequent to quarter end, VanMoof Global Holding B.V. and its Dutch subsidiaries were declared bankrupt by the District Court of Amsterdam.

## Market risk

As filed, 8,298 characters.

We are subject to financial market risks, including changes in interest rates. We are also subject to risks relating to the capital markets; changes in foreign currency exchange rates; conditions affecting the general economy; legislative reform; and local, regional, national or global political, social or economic instability. U.S. and global capital markets and credit markets have recently been experiencing an increase in the level of volatility across such markets and in the values of publicly-traded securities. Any continuation of the stresses on capital markets and credit markets, or a further increase in volatility, could result in a contraction of available credit for us and/or an inability by us to access the equity or debt capital markets, or could otherwise cause an inability or unwillingness of our lenders to fund their commitments to us, any of which may have a material adverse effect on our results of operations and financial condition.

#### Interest Rate Risk

Interest rate sensitivity refers to the change in our earnings and in the relative values of our portfolio that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a change in market interest rates will not have a material adverse effect on our net investment income.

Changes in interest rates may affect both our cost of funding and our interest income from portfolio investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rates or reference rates to the extent that any debt investments include floating interest rates. Debt investments are made with either floating rates that are subject to contractual minimum interest rates for the term of the investment or fixed interest rates.

A prolonged reduction in interest rates could reduce our gross investment income and could result in a decrease in our net investment income if such decreases in interest rates are not offset by a corresponding increase in the spread over the Prime Rate that we earn on any portfolio investments, a decrease in our operating expenses or a decrease in the interest rate of our floating interest rate liabilities.

As of June 30, 2023, approximately 60.5%, or $559.6 million in principal balance, of the debt investments in our portfolio bore interest at floating rates, which generally are Prime-based, and all of which have interest rate floors of 3.25% or higher. Substantially all of our unfunded commitments float with changes in the Prime Rate from the date we enter into the commitment to the date of the actual draw. In addition, our interest expense will be affected by changes in the interest rate in connection with our Credit Facility to the extent it goes above the interest rate floor; however, our 2025 Notes, 2026 Notes and 2027 Notes bear interest at a fixed rate (subject to a 1.00% increase in the fixed rate in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement (as modified by the First Supplement with respect to the 2026 Notes and the Second Supplement with respect to the 2027 Notes)) occurs).

As of June 30, 2023, our floating rate borrowings totaled $240.0 million, which represented 37.8% of our outstanding debt. As of June 30, 2023, all of our floating rate debt investments were subject to interest-rate floors set at 3.25% or higher. Because the Prime Rate as of June 30, 2023 was 8.25%, which is at or above the interest-rate floors applicable to our floating rate debt investments, decreases in interest rates will impact our interest income to a limited extent until the Prime Rate reaches 3.25%, while increases in interest rates will increase our interest income to the extent that such rates exceed the applicable interest-rate floor. In addition, with respect to interest expense on our floating rate borrowings under the Credit Facility, we will benefit from any decreases in interest rates up to the point that the SOFR rate decreases to 0.50%, which is the SOFR interest-rate floor under the Credit Facility as of June 30, 2023. However, because current interest rates exceed the SOFR interest-rate floor under our Credit Facility as of June 30, 2023, our interest expense on floating rate borrowings will increase as rates rise. The following table illustrates the annual impact on our net investment income of hypothetical base rate changes in interest rates (considering interest rate floors for variable rate instruments) assuming no changes in our investment and borrowing structure from the June 30, 2023 consolidated statement of assets and liabilities:

| Change in Interest Rates (in thousands) | Increase (decrease) in interest income | (Increase) decrease in interest expense | Net increase (decrease) in net investment income |
| --- | ---: | ---: | ---: |
| Up 300 basis points | $16,789 | $(7,200) | $9,589 |
| Up 200 basis points | $11,193 | $(4,800) | $6,393 |
| Up 100 basis points | $5,596 | $(2,400) | $3,196 |
| Up 50 basis points | $2,798 | $(1,200) | $1,598 |
| Down 50 basis points | $(2,748) | $1,200 | $(1,548) |
| Down 100 basis points | $(5,408) | $2,400 | $(3,008) |
| Down 200 basis points | $(10,551) | $4,800 | $(5,751) |
| Down 300 basis points | $(15,116) | $7,200 | $(7,916) |

This analysis is indicative of the potential impact on our investment income as of June 30, 2023, assuming an immediate and sustained change in interest rates as noted. It should be noted that we anticipate growth in our portfolio funded in part with additional borrowings and such additional borrowings, all else being equal, will increase our investment income sensitivity to interest rates to the extent such borrowings have floating interest rates, and such changes could be material. In addition, this analysis does not adjust for potential changes in our portfolio or our borrowing facilities after June 30, 2023 nor does it take into account any changes in the credit performance of our loans that might occur should interest rates change.

Because it is our intention to hold loans to maturity, the fluctuating relative value of these loans that may occur due to changes in interest rates may have an impact on unrealized gains and losses during quarterly reporting periods. Based on our assessment of the interest rate risk, as of June 30, 2023, we had no hedging transactions in place as we deemed the risk acceptable, and we did not believe it was necessary to mitigate this risk at that time.

#### Foreign Currency Exchange Rate Risk

We may also have exposure to changes in foreign currency exchange rates in connection with certain investments. Such investments are translated into U.S. dollars based on the spot rate at the relevant balance sheet date, exposing us to movements in the exchange rate. Based on our assessment of the foreign currency exchange rate risk, as of June 30, 2023, we had no hedging transactions in place as we deemed the risk acceptable, and we did not believe it was necessary to mitigate this risk at that time.

While hedging activities may mitigate our exposure to adverse fluctuations in interest rates or foreign currency exchange rates, certain hedging transactions that we may enter into in the future, such as interest rate swap agreements or foreign currency forward contracts, may also limit our ability to participate in the benefits of higher interest rates or beneficial movements in foreign currency exchange rates with respect to our portfolio investments. In addition, there can be no assurance that we will be able to effectively hedge our interest rate risk or foreign currency exchange rate risk.

Substantially all of our assets and liabilities are financial in nature. As a result, changes in interest rates, foreign currency exchange rates and other factors drive our performance more directly than does inflation. Changes in interest rates and foreign currency exchange rates do not necessarily correlate with changes in inflation rates.

## Controls and procedures

As filed, 1,725 characters.

### Evaluation of Disclosure Controls and Procedures

As of June 30, 2023 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance that the desired control objectives will be achieved, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

### Changes in Internal Control Over Financial Reporting

Management has not identified any change in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 1,380 characters.

You should carefully consider the risks referenced below and all other information contained in this Quarterly Report on Form 10-Q, including our interim financial statements and the related notes thereto, before making a decision to purchase our securities. Any such risks and uncertainties are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the market price of our securities.

In addition to the other information set forth in this report, you should carefully consider the risk factors previously disclosed in our Annual Report on Form 10‑K for the year ended December 31, 2022 (filed with the SEC on March 1, 2023) and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (filed with the SEC on May 3, 2023), which could materially affect our business, financial condition or operating results.

***Short sellers may engage in manipulative activity in order to drive down the price of our common stock.***

Short sellers have in the past, and may in the future, issue reports designed to drive down the price of our common stock so that they can profit from market fluctuations, which could have a material adverse effect on the value of your investment.

Filed Aug 2, 2023.
Source: SEC EDGAR, the filing index for accession 0001580345-23-000032. Last ingested by Listed: Nov 4, 2026, 18:08 ET. No prices; not investment advice.