Growth Capital Loan (12.00% interest rate, 10.50% EOT payment)
10/30/2019
20,000
21,001
20,781
1/31/2027
Growth Capital Loan (12.00% interest rate, 10.50% EOT payment)
3/27/2020
10,000
10,472
10,363
1/31/2027
Total Travel & Leisure - 8.55%*
30,000
31,473
31,144
Total Debt Investments - 166.00%*
$
654,143
$
653,214
$
604,677
10
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Warrant Investments(8)
Advertising / Marketing
InMobi Pte Ltd.(1)(3)
Ordinary Shares(2)
12/13/2013
48,500
$
35
$
13
Total Advertising / Marketing - 0.00%*
35
13
Aerospace and Defense
Loft Orbital Solutions Inc.
Common Stock(2)
7/15/2022
22,488
192
308
Total Aerospace and Defense - 0.08%*
192
308
Application Software
Flo Health, Inc.(1)(3)
Preferred Stock
5/10/2022
13,487
123
274
Total Application Software - 0.08%*
123
274
Business Applications Software
Arcadia Power, Inc.
Preferred Stock
12/10/2021
55,458
138
143
Preferred Stock
6/29/2022
27,714
164
41
302
184
Cresta Intelligence, Inc.
Common Stock(2)
6/6/2024
9,935
8
23
DialPad, Inc.
Preferred Stock(2)
8/3/2020
28,980
102
23
Envoy, Inc.
Preferred Stock(2)
5/8/2020
358,930
82
208
Farmer's Business Network, Inc.
Preferred Stock(2)
1/3/2020
37,666
33
24
Filevine, Inc.
Preferred Stock(2)
4/20/2021
186,160
38
882
FlashParking, Inc.
Preferred Stock(2)
6/15/2021
210,977
810
1,314
Preferred Stock(2)
6/26/2024
51,677
140
140
950
1,454
Narvar, Inc.
Preferred Stock(2)
8/28/2020
87,160
102
102
NewStore Inc.
Preferred Stock(2)
11/16/2022
122,353
36
3
Passport Labs, Inc.
Preferred Stock(2)
9/28/2018
21,929
303
590
Project Affinity, Inc.
Preferred Stock(2)
4/26/2024
88,370
21
21
Quantcast Corporation
Cash Exit Fee(2)(5)
8/9/2018
213
161
Uniphore Technologies Inc.
Common Stock(2)
12/22/2021
35,000
34
100
Total Business Applications Software - 1.04%*
2,224
3,775
Business Products and Services
Cart.com, Inc.
Common Stock(2)
12/30/2021
32,731
477
640
Preferred Stock(2)
3/31/2022
4,532
25
51
502
691
LeoLabs, Inc.
Preferred Stock(2)
1/20/2022
218,512
197
227
Substack Inc.
Preferred Stock(2)
7/13/2022
1,141
6
6
Total Business Products and Services - 0.25%*
705
924
Business/Productivity Software
Forum Brands Holdings, Inc.
Preferred Stock
7/6/2021
49,892
626
157
Metropolis Technologies, Inc.
Common Stock(2)
3/30/2022
87,385
87
1,039
Total Business/Productivity Software - 0.33%*
713
1,196
Business to Business Marketplace
Optoro, Inc.
Preferred Stock(2)
7/13/2015
10,346
40
67
RetailNext, Inc.
Preferred Stock(2)
11/16/2017
123,420
80
111
Total Business to Business Marketplace - 0.05%*
120
178
Commercial Services
Transfix, Inc.
Preferred Stock(2)
5/31/2019
133,502
188
188
Total Commercial Services - 0.05%*
188
188
11
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Computer Hardware
Grey Orange International Inc.
Preferred Stock(2)
3/16/2021
52,773
$
183
$
121
Total Computer Hardware - 0.03%*
183
121
Consumer Finance
Activehours, Inc. (d/b/a Earnin)
Preferred Stock(2)
10/8/2020
114,327
370
726
Total Consumer Finance - 0.20%*
370
726
Consumer Non-Durables
Athletic Greens International, Inc.
Ordinary Shares(2)
6/3/2022
2,262
85
84
Don't Run Out, Inc.
Preferred Stock
12/30/2021
42,929
30
13
Total Consumer Non-Durables - 0.03%*
115
97
Consumer Products and Services
AvantStay, Inc.
Common Stock
12/12/2022
24,495
151
188
Baby Generation, Inc.
Common Stock(2)
1/26/2022
33,964
25
25
everdrop GmbH(1)(3)
Preferred Stock(2)
3/16/2022
14
25
25
FitOn Inc.
Common Stock(2)
2/29/2024
73,807
162
162
Flink SE(1)(3)
Preferred Stock
4/13/2022
178
339
—
Foodology Inc.(1)(3)
Preferred Stock(2)
3/25/2022
26,619
116
86
Frubana Inc.(1)(3)
Preferred Stock(2)
9/30/2022
15,987
334
13
Hydrow, Inc.
Common Stock
2/9/2021
103,267
143
—
Preferred Stock
8/6/2021
53,903
89
—
232
—
JOKR S.à r.l.(1)(3)
Preferred Stock
7/24/2023
12,056
339
196
Lower Holding Company
Preferred Stock
12/28/2022
146,431
189
29
Nakdcom One World AB(1)(3)
Preferred Stock(2)
6/2/2022
894,182
1,258
1,119
Pair Eyewear, Inc.
Common Stock(2)
7/12/2022
2,288
5
7
Project 1920, Inc.
Preferred Stock(2)
3/25/2022
41,140
23
—
Quip NYC, Inc.
Preferred Stock(2)
11/26/2018
41,272
455
1,020
Tempo Interactive Inc.
Preferred Stock(2)
3/31/2021
14,709
93
14
The Black Tux, Inc.
Preferred Stock(2)
11/5/2021
142,939
139
460
Total Consumer Products and Services - 0.92%*
3,885
3,344
Consumer Retail
LovePop, Inc.
Preferred Stock(2)
10/23/2018
163,463
168
128
Savage X, Inc.
Preferred Stock
4/7/2020
28,977
471
282
Total Consumer Retail - 0.11%*
639
410
Database Software
Sisense, Inc.
Cash Exit Fee(2)(5)
12/28/2021
190
465
Total Database Software - 0.13%*
190
465
Educational/Training Software
Panorama Education, Inc.
Preferred Stock
7/30/2024
5,154
28
28
Total Educational/Training Software - 0.01%*
28
28
E-Commerce - Clothing and Accessories
FabFitFun, Inc.
Preferred Stock(2)
11/20/2017
331,048
940
314
Common Stock
9/29/2023
117,338
375
310
1,315
624
Minted, Inc.
Preferred Stock
9/30/2020
51,979
516
249
Outfittery GMBH(1)(3)
Cash Exit Fee(2)(5)
8/10/2017
1,850
1,121
Rent the Runway, Inc.
Preferred Stock(2)
11/25/2015
4,402
213
—
Common Stock(2)
11/25/2015
7,460
1,081
—
1,294
—
12
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Stance, Inc.
Preferred Stock(2)
3/31/2017
75,000
$
41
$
70
Trendly, Inc.
Preferred Stock
5/27/2021
574,742
381
598
Preferred Stock
6/7/2022
57,924
44
39
425
637
Untuckit LLC
Cash Exit Fee(2)(5)
5/11/2018
39
57
Total E-Commerce - Clothing and Accessories - 0.76%*
5,480
2,758
E-Commerce - Personal Goods
Grove Collaborative, Inc.
Common Stock(2)
4/2/2018
62,128
219
—
Common Stock(2)
5/22/2019
25,664
228
—
447
—
Merama Inc.
Preferred Stock(2)
4/28/2021
191,274
406
1,502
Total E-Commerce - Personal Goods - 0.41%*
853
1,502
Entertainment
Mind Candy, Inc.(1)(3)
Preferred Stock(2)
3/24/2017
278,209
922
—
Total Entertainment - 0.00%*
922
—
Financial Institution and Services
BlueVine Capital, Inc.
Preferred Stock(2)
9/15/2017
271,293
361
909
Prodigy Investments Limited(1)(3)
Ordinary Shares(2)
12/5/2017
56,241
869
948
Revolut Ltd(1)(3)
Ordinary Shares(2)
4/16/2018
6,253
40
5,663
Ordinary Shares(2)
10/29/2019
7,945
324
6,841
364
12,504
WorldRemit Group Limited(1)(3)
Preferred Stock(2)
12/23/2015
128,290
382
1,104
Preferred Stock(2)
12/23/2015
46,548
136
341
518
1,445
Total Financial Institution and Services - 4.34%*
2,112
15,806
Financial Software
Ocrolus, Inc.
Common Stock
8/14/2024
116,887
96
96
Synapse Financial Technologies, Inc.
Nonvoting Stock
7/29/2022
3,913
23
—
Total Financial Software - 0.03%*
119
96
Food & Drug
Capsule Corporation
Preferred Stock
1/17/2020
202,533
437
34
Cash Exit Fee(5)
12/28/2018
129
123
Total Food & Drug - 0.04%*
566
157
General Media and Content
Overtime Sports, Inc.
Preferred Stock(2)
5/4/2022
33,510
70
70
Thrillist Media Group, Inc.
Common Stock(2)
9/24/2014
774,352
624
1,092
Total General Media and Content - 0.32%*
694
1,162
Healthcare Services
Found Health, Inc.
Preferred Stock(2)
3/25/2022
49,304
22
16
Vial Health Technology, Inc.
Preferred Stock(2)
12/14/2022
48,889
33
33
Total Healthcare Services - 0.01%*
55
49
Healthcare Technology Systems
Curology, Inc.
Preferred Stock(2)
5/23/2019
36,020
58
21
Kalderos, Inc.
Preferred Stock
12/27/2022
73,606
167
54
K Health, Inc.
Common Stock(2)
7/14/2023
61,224
187
263
Thirty Madison, Inc.
Preferred Stock
12/30/2022
167,494
445
457
Total Healthcare Technology Systems - 0.22%*
857
795
13
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Information Services (B2C)
Infinite Athlete, Inc. (f/k/a Tempus Ex Machina, Inc.)
Preferred Stock
5/1/2023
11,974
$
9
$
5
Total Information Services (B2C) - 0.00%*
9
5
Medical Software and Information Services
AirStrip Technologies, Inc.
Preferred Stock(2)
10/9/2013
8,036
112
—
Total Medical Software and Information Services - 0.00%*
112
—
Multimedia and Design Software
Hover Inc.
Preferred Stock
9/30/2022
183,642
309
360
Open Space Labs, Inc.
Preferred Stock(2)
11/15/2022
2,954
7
4
Total Multimedia and Design Software - 0.10%*
316
364
Network Systems Management Software
Cohesity, Inc.
Preferred Stock(2)
1/10/2020
18,945
54
107
Signifyd, Inc.
Preferred Stock(2)
12/19/2019
33,445
132
441
Corelight, Inc.
Common Stock(2)
9/29/2022
45,977
235
258
Total Network Systems Management Software - 0.22%*
421
806
Other Financial Services
Jerry Services, Inc.
Preferred Stock
6/13/2022
41,936
169
120
Monzo Bank Limited(1)(3)
Ordinary Shares(2)
3/8/2021
64,813
161
455
N26 GmbH(1)(3)
Preferred Stock(2)
9/14/2021
11
324
238
Upgrade, Inc.
Preferred Stock(2)
1/18/2019
1,488,450
223
595
Total Other Financial Services - 0.39%*
877
1,408
Real Estate Services
Belong Home, Inc.
Preferred Stock(2)
2/15/2022
7,730
6
15
HomeLight, Inc.
Preferred Stock(2)
12/21/2018
54,004
44
186
Preferred Stock(2)
11/5/2020
55,326
76
139
120
325
Homeward, Inc.
Preferred Stock
12/10/2021
71,816
211
6
McN Investments Ltd.(1)(3)
Preferred Stock(2)
5/27/2022
37,485
295
116
Roofstock, Inc.
Preferred Stock(2)
5/25/2022
56,839
19
194
Sonder Holdings Inc.
Common Stock(2)
12/28/2018
10,024
232
—
Common Stock(2)
3/4/2020
1,049
42
—
274
—
True Footage Inc.
Preferred Stock
11/24/2021
88,762
147
282
Total Real Estate Services - 0.26%*
1,072
938
Shopping Facilitators
Moda Operandi, Inc.
Preferred Units
12/30/2021
36,450
169
—
OfferUp Inc.
Preferred Stock(2)
12/23/2019
131,006
42
138
Total Shopping Facilitators - 0.04%*
211
138
Social/Platform Software
ClassPass Inc.
Preferred Stock(2)
3/18/2019
84,507
281
151
Total Social/Platform Software - 0.04%*
281
151
Travel & Leisure
OmioCorp. (fka. GoEuro Corp.)(1)(3)
Preferred Stock
9/18/2019
12,027
361
405
Preferred Stock
8/26/2022
16,261
611
697
Preferred Stock
4/5/2024
17,904
385
1,080
Total Travel & Leisure - 0.60%*
1,357
2,182
Total Warrant Investments - 11.08%*
$
26,024
$
40,364
14
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Equity Investments(8)
Business Applications Software
Arcadia Power, Inc.
Preferred Stock(2)
9/21/2021
16,438
$
167
$
105
Cresta Intelligence, Inc.
Preferred Stock(2)
9/30/2024
110,882
500
500
DialPad, Inc.
Preferred Stock(2)
9/22/2020
15,456
120
107
Envoy, Inc.
Preferred Stock(2)
12/30/2021
212,160
667
541
FlashParking, Inc.
Preferred Stock(2)
7/19/2022
33,116
455
451
Filevine, Inc.
Preferred Stock(2)
2/4/2022
56,353
357
486
Farmer's Business Network, Inc.
Preferred Stock(2)
7/31/2020
860
28
13
Preferred Stock(2)
9/28/2023
4,181
138
12
166
25
Passport Labs, Inc.
Preferred Stock(2)
6/11/2019
1,302
100
103
Uniphore Technologies Inc.
Preferred Stock(2)
1/28/2022
28,233
350
287
Total Business Applications Software - 0.72%*
2,882
2,605
Business Products and Services
Quick Commerce Ltd(1)(3)
Preferred Stock(2)
4/5/2024
418,182
8,028
7,052
Ordinary Shares(2)
4/5/2024
1,448,528,650
311
1,729
Total Business Products and Services - 2.41%*
8,339
8,781
Business/Productivity Software
Forum Brands Holdings, Inc.
Preferred Stock(2)
7/16/2021
822
150
42
Total Business/Productivity Software - 0.01%*
150
42
Commercial Services
MXP Prime GmbH(1)(3)
Common Stock(2)
2/3/2022
165
1,140
12
Preferred Stock(2)
6/29/2023
23
—
136
Preferred Stock(2)
6/29/2023
46
50
51
1,190
199
Printify, Inc.
Preferred Stock(2)
8/24/2021
13,850
50
50
Total Commercial Services - 0.07%*
1,240
249
Consumer Finance
Activehours, Inc. (d/b/a Earnin)
Preferred Stock(2)
11/10/2020
14,788
150
227
Total Consumer Finance - 0.06%*
150
227
Consumer Non-Durables
Misfits Market, Inc. (f/k/a Imperfect Foods, Inc.)
Preferred Stock(2)
12/31/2022
1,615
142
153
Preferred Stock(2)
12/31/2022
7,196
358
385
Total Consumer Non-Durables - 0.15%*
500
538
Consumer Products and Services
everdrop GmbH(1)(3)
Preferred Stock(2)
8/1/2022
78
310
336
Frubana Inc.(1)(3)
Preferred Stock(2)
7/13/2022
7,993
500
19
GrubMarket, Inc.
Common Stock(2)
8/2/2024
7,758
7,758
Hydrow, Inc.
Preferred Stock(2)
12/14/2020
85,542
333
11
Preferred Stock(2)
3/19/2021
46,456
335
11
668
22
JOKR S.à r.l.(1)(3)
Preferred Stock(2)
12/7/2021
2,843
187
126
Preferred Stock(2)
11/3/2022
787
37
35
224
161
Pair Eyewear, Inc.
Preferred Stock(2)
6/27/2023
1,880
10
10
Total Consumer Products and Services - 2.28%*
9,470
8,306
15
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Consumer Retail
Savage X, Inc.
Preferred Stock(2)
1/20/2021
17,249
$
500
$
319
Preferred Stock(2)
11/30/2021
10,393
500
385
Total Consumer Retail - 0.19%*
1,000
704
E-Commerce - Clothing and Accessories
FabFitFun, Inc.
Preferred Stock(2)
1/17/2019
67,934
500
466
Total E-Commerce - Clothing and Accessories - 0.13%*
500
466
E-Commerce - Personal Goods
Grove Collaborative, Inc.
Common Stock(2)(10)
6/5/2018
31,576
500
43
Merama Inc.
Preferred Stock(2)
4/19/2021
18,518
33
194
Preferred Stock(2)
4/19/2021
14,490
83
168
Preferred Stock(2)
9/1/2021
10,298
167
160
283
522
Total E-Commerce - Personal Goods - 0.16%*
783
565
Educational/Training Software
Nerdy Inc. (f/k/a Varsity Tutors LLC)
Common Stock(2)(10)
1/5/2018
60,926
250
60
Total Educational/Training Software - 0.02%*
250
60
Entertainment
Luminary Roli Limited(1)(3)
Ordinary Shares(2)
8/31/2021
434,782
2,525
—
Mind Candy, Inc.(1)(3)
Preferred Stock(2)
3/9/2020
511,665
1,000
—
Total Entertainment - 0.00%*
3,525
—
Financial Institution and Services
Prodigy Investments Limited(1)(3)
Preference Shares(2)
12/31/2020
1,552
20,930
19,406
Revolut Ltd(1)(3)
Preferred Stock(2)
8/3/2017
25,920
292
24,417
Total Financial Institution and Services - 12.03%*
21,222
43,823
Food & Drug
Capsule Corporation
Preferred Stock(2)
7/25/2019
128,423
716
369
Total Food & Drug - 0.10%*
716
369
General Media and Content
Overtime Sports, Inc.
Preferred Stock(2)
8/2/2022
127,656
1,000
1,000
Total General Media and Content - 0.27%*
1,000
1,000
Healthcare Technology Systems
Curology, Inc.
Preferred Stock(2)
11/26/2019
66,000
196
145
Common Stock(2)
1/14/2020
142,855
404
73
600
218
Kalderos, Inc.
Preferred Stock(2)
12/27/2022
45,403
325
292
Talkspace, LLC (f/k/a Groop Internet Platfom, Inc.)
Common Stock(2)(10)
5/15/2019
146,752
378
307
Thirty Madison, Inc.
Preferred Stock(2)
5/31/2019
81,708
1,000
725
Total Healthcare Technology Systems - 0.42%*
2,303
1,542
Multimedia and Design Software
Hover Inc.
Preferred Stock(2)
9/30/2022
42,378
231
263
Total Multimedia and Design Software - 0.07%*
231
263
Network Systems Management Software
Cohesity, Inc.
Preferred Stock(2)
3/24/2017
60,342
400
1,003
Preferred Stock(2)
4/7/2020
9,022
125
153
Total Network Systems Management Software - 0.32%*
525
1,156
16
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(unaudited)
(dollars in thousands)
As of September 30, 2024
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Other Financial Services
Jerry Services, Inc.
Preferred Stock(2)
5/6/2022
8,231
$
104
$
82
Monzo Bank Limited(1)(3)
Ordinary Shares(2)
3/8/2021
92,901
1,000
1,426
Ordinary Shares(2)
1/5/2022
26,281
516
507
1,516
1,933
N26 GmbH(1)(3)
Preferred Stock(2)
12/9/2021
22
1,264
1,514
Redesign Health Inc.
Preferred Stock(2)
7/12/2022
5,919
100
100
Total Other Financial Services - 1.00%*
2,984
3,629
Real Estate Services
Belong Home, Inc.
Preferred Stock(2)
4/18/2022
6,033
29
29
McN Investments Ltd.(1)(3)
Preferred Stock(2)
5/6/2022
11,246
300
209
Sonder Holdings Inc.
Common Stock(2)(10)
5/21/2019
2,186
312
10
True Footage Inc.
Preferred Stock(2)
10/18/2021
18,366
100
122
Total Real Estate Services - 0.10%*
741
370
Travel & Leisure
OmioCorp. (fka. GoEuro Corp.)(1)(3)
Preferred Stock(2)
10/5/2017
2,362
300
295
Preferred Stock(2)
5/9/2022
9,169
623
918
923
1,213
Inspirato LLC
Common Stock(2)(4)(10)
9/11/2014
6,081
288
25
Total Travel & Leisure - 0.34%*
1,211
1,238
Total Equity Investments - 20.85%*
$
59,722
$
75,933
Total Investments in Portfolio Companies - 197.92%*(9)(11)
$
738,960
$
720,974
Cash Equivalents
Money Market Fund
Type of Investment
Ticker
Cost
Fair Value
Federated Government Obligations Fund
Cash Equivalents
PRM
$
47,419
$
47,419
Total Cash Equivalents - 13.02%*
$
47,419
$
47,419
_______________
(1)Investment is a non-qualifying asset under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). As of September 30, 2024, non-qualifying assets represented 39.1% of the Company’s total assets, at fair value.
(2)As of September 30, 2024, this investment was not pledged as collateral as part of the Company’s revolving credit facility.
(3)Entity is not domiciled in the United States and does not have its principal place of business in the United States.
(4)Investment is owned by TPVG Investment LLC, a wholly owned taxable subsidiary of the Company.
(5)Investment is a cash success fee or a cash exit fee payable on the consummation of certain trigger events.
(6)Gross unrealized gains, gross unrealized losses, and net unrealized losses for federal income tax purposes totaled $52.3 million, $52.8 million and $0.5 million, respectively, for the September 30, 2024 investment portfolio. The tax cost of investments is $721.4 million.
(7)Debt is on non-accrual status as of September 30, 2024 and is therefore considered non-income producing. Non-accrual investments as of September 30, 2024 had a total cost and fair value of $28.9 million and $17.9 million, respectively.
(8)Non-income producing investments.
(9)Except for equity in five public companies, all investments were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Company’s board of directors (the “Board”).
(10)Investment is publicly traded and listed on either the New York Stock Exchange or the Nasdaq, and is not subject to restrictions on sales.
(11)The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). Unless otherwise indicated, all of the Company’s portfolio company investments are subject to restrictions on sales. As of September 30, 2024, the Company’s portfolio company investments that were subject to restrictions on sales totaled $720.5 million at fair value and represented 197.8% of the Company’s net assets. In addition, unless otherwise indicated, as of September 30, 2024, all investments are pledged as collateral as part of the Company’s revolving credit facility.
(12)Acquisition date represents the date of the investment in the portfolio investment.
* Value as a percentage of net assets.
_______________
17
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
Growth Capital Loan (12.00% interest rate, 10.50% EOT payment)
10/30/2019
20,000
20,673
20,093
1/31/2027
Growth Capital Loan (12.00% interest rate, 10.50% EOT payment)
3/27/2020
10,000
10,299
10,011
1/31/2027
Total Travel & Leisure - 8.69%*
30,000
30,972
30,104
Total Debt Investments - 210.88%*
$
776,930
$
780,172
$
730,295
24
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Warrant Investments(8)
Advertising / Marketing
InMobi Pte Ltd.(1)(3)
Ordinary Shares(2)
12/13/2013
48,500
$
35
$
13
Total Advertising / Marketing - 0.00%*
35
13
Aerospace and Defense
Loft Orbital Solutions Inc.
Common Stock(2)
7/15/2022
22,488
192
67
Total Aerospace and Defense - 0.02%*
192
67
Application Software
Flo Health, Inc.(1)(3)
Preferred Stock
5/10/2022
14,536
123
172
Total Application Software - 0.05%*
123
172
Business Applications Software
Arcadia Power, Inc.
Preferred Stock
12/10/2021
55,458
138
240
Preferred Stock
6/29/2022
27,714
164
72
302
312
DialPad, Inc.
Preferred Stock(2)
8/3/2020
28,980
102
23
Envoy, Inc.
Preferred Stock(2)
5/8/2020
358,930
82
208
Farmer's Business Network, Inc.
Preferred Stock(2)
1/3/2020
37,666
33
24
Filevine, Inc.
Preferred Stock(2)
4/20/2021
186,160
38
253
FlashParking, Inc.
Preferred Stock
6/15/2021
210,977
810
1,295
Narvar, Inc.
Preferred Stock(2)
8/28/2020
87,160
102
102
NewStore Inc.
Preferred Stock(2)
11/16/2022
48,941
18
12
OneSource Virtual, Inc.
Preferred Stock(2)
6/25/2018
70,773
161
168
Passport Labs, Inc.
Preferred Stock(2)
9/28/2018
21,929
303
590
Quantcast Corporation
Cash Exit Fee(2)(5)
8/9/2018
213
161
Uniphore Technologies Inc.
Common Stock(2)
12/22/2021
35,000
34
100
Total Business Applications Software - 0.94%*
2,198
3,248
Business Products and Services
Cart.com, Inc.
Common Stock(2)
12/30/2021
32,731
477
640
Preferred Stock(2)
3/31/2022
4,532
25
51
502
691
LeoLabs, Inc.
Preferred Stock(2)
1/20/2022
218,512
197
227
Quick Commerce Ltd(1)(3)
Preferred Stock
5/4/2022
1,390,448
311
111
Substack Inc.
Preferred Stock(2)
7/13/2022
1,141
6
6
Total Business Products and Services - 0.30%*
1,016
1,035
Business/Productivity Software
Forum Brands Holdings, Inc.
Preferred Stock
7/6/2021
49,892
626
738
Metropolis Technologies, Inc.
Common Stock(2)
3/30/2022
87,385
87
523
Total Business/Productivity Software - 0.36%*
713
1,261
Business to Business Marketplace
Optoro, Inc.
Preferred Stock(2)
7/13/2015
10,346
40
67
RetailNext, Inc.
Preferred Stock(2)
11/16/2017
123,420
80
111
Total Business to Business Marketplace - 0.05%*
120
178
Commercial Services
Transfix, Inc.
Preferred Stock(2)
5/31/2019
133,502
188
188
Total Commercial Services - 0.05%*
188
188
Computer Hardware
Grey Orange International Inc.
Preferred Stock(2)
3/16/2021
52,773
183
121
Total Computer Hardware - 0.03%*
183
121
25
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Consumer Finance
Activehours, Inc. (d/b/a Earnin)
Preferred Stock(2)
10/8/2020
108,468
$
346
$
703
The Aligned Company (f/k/a Thingy Thing Inc.)
Preferred Stock(2)
10/21/2021
5,855
17
191
Preferred Stock(2)
4/1/2022
163
2
2
19
193
Total Consumer Finance - 0.26%*
365
896
Consumer Non-Durables
Athletic Greens International, Inc.
Ordinary Shares(2)
6/3/2022
2,262
85
84
Don't Run Out, Inc.
Preferred Stock
12/30/2021
42,929
30
13
Hims & Hers Health, Inc. (f/k/a Hims, Inc.)
Preferred Stock(2)
11/27/2019
98,723
73
407
Total Consumer Non-Durables - 0.15%*
188
504
Consumer Products and Services
AvantStay, Inc.
Common Stock
12/12/2022
24,495
151
199
Baby Generation, Inc.
Common Stock(2)
1/26/2022
33,964
25
25
everdrop GmbH(1)(3)
Preferred Stock(2)
3/16/2022
14
25
25
Flink SE(1)(3)
Preferred Stock
4/13/2022
178
339
—
Foodology Inc.(1)(3)
Preferred Stock(2)
3/25/2022
26,619
116
86
Frubana Inc.(1)(3)
Preferred Stock(2)
9/30/2022
15,987
334
239
Good Eggs, Inc.
Preferred Stock
8/12/2021
154,633
401
22
Hydrow, Inc.
Common Stock
2/9/2021
150,561
143
—
Preferred Stock
8/6/2021
53,903
89
—
232
—
JOKR S.à r.l.(1)(3)
Preferred Stock
7/24/2023
8,120
275
44
Lower Holding Company
Preferred Stock
12/28/2022
146,431
189
26
Nakdcom One World AB(1)(3)
Preferred Stock(2)
6/2/2022
894,182
1,258
1,107
Outdoor Voices, Inc.
Common Stock
2/26/2019
732,387
369
7
Pair Eyewear, Inc.
Common Stock(2)
7/12/2022
2,288
5
7
Project 1920, Inc.
Preferred Stock(2)
3/25/2022
41,140
23
—
Quip NYC, Inc.
Preferred Stock(2)
11/26/2018
41,272
455
1,020
Tempo Interactive Inc.
Preferred Stock(2)
3/31/2021
14,709
93
14
The Black Tux, Inc.
Preferred Stock(2)
11/5/2021
142,939
139
460
Total Consumer Products and Services - 0.95%*
4,429
3,281
Consumer Retail
LovePop, Inc.
Preferred Stock(2)
10/23/2018
163,463
168
128
Savage X, Inc.
Preferred Stock(2)
4/7/2020
28,977
471
617
Total Consumer Retail - 0.22%*
639
745
Database Software
Sisense, Inc.
Cash Exit Fee(2)(5)
12/28/2021
190
465
Total Database Software - 0.13%*
190
465
E-Commerce - Clothing and Accessories
FabFitFun, Inc.
Preferred Stock(2)
11/20/2017
331,048
940
463
Common Stock
9/29/2023
117,338
375
375
1,315
838
Minted, Inc.
Preferred Stock
9/30/2020
51,979
516
249
Outfittery GMBH(1)(3)
Cash Exit Fee(2)(5)
8/10/2017
1,850
1,109
Rent the Runway, Inc.
Preferred Stock(2)
11/25/2015
88,037
213
—
Common Stock(2)
11/25/2015
149,203
1,081
—
1,294
—
26
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Stance, Inc.
Preferred Stock(2)
3/31/2017
75,000
$
41
$
70
TFG Holding, Inc.
Common Stock
11/30/2020
229,330
762
—
Trendly, Inc.
Preferred Stock
5/27/2021
574,742
381
914
Preferred Stock
6/7/2022
57,924
44
69
425
983
Untuckit LLC
Cash Exit Fee(2)(5)
5/11/2018
39
57
Total E-Commerce - Clothing and Accessories - 0.95%*
6,242
3,306
E-Commerce - Personal Goods
Grove Collaborative, Inc.
Common Stock(2)
4/2/2018
62,128
219
4
Common Stock(2)
5/22/2019
25,664
228
—
447
4
Merama Inc.
Preferred Stock
4/28/2021
191,274
406
1,502
Total E-Commerce - Personal Goods - 0.43%*
853
1,506
Entertainment
Mind Candy, Inc.(1)(3)
Preferred Stock(2)
3/24/2017
278,209
922
—
Total Entertainment - 0.00%*
922
—
Financial Institution and Services
BlueVine Capital, Inc.
Preferred Stock(2)
9/15/2017
271,293
361
909
Prodigy Investments Limited(1)(3)
Ordinary Shares(2)
12/5/2017
56,241
869
609
Revolut Ltd(1)(3)
Ordinary Shares(2)
4/16/2018
6,253
40
1,504
Ordinary Shares(2)
10/29/2019
7,945
324
1,639
364
3,143
WorldRemit Group Limited(1)(3)
Preferred Stock(2)
12/23/2015
128,290
382
1,050
Preferred Stock(2)
12/23/2015
46,548
136
324
518
1,374
Total Financial Institution and Services - 1.74%*
2,112
6,035
Financial Software
Synapse Financial Technologies, Inc.
Nonvoting Stock
7/29/2022
3,913
23
—
Total Financial Software - 0.00%*
23
—
Food & Drug
Capsule Corporation
Preferred Stock
1/17/2020
202,533
437
34
Cash Exit Fee(5)
12/28/2018
129
123
Total Food & Drug - 0.05%*
566
157
General Media and Content
Overtime Sports, Inc.
Preferred Stock(2)
5/4/2022
33,510
70
70
Thrillist Media Group, Inc.
Common Stock(2)
9/24/2014
774,352
625
1,092
Total General Media and Content - 0.34%*
695
1,162
Healthcare Services
Found Health, Inc.
Preferred Stock(2)
3/25/2022
49,304
22
16
Vial Health Technology, Inc.
Preferred Stock(2)
12/14/2022
48,889
33
33
Total Healthcare Services - 0.01%*
55
49
Healthcare Technology Systems
Curology, Inc.
Preferred Stock(2)
5/23/2019
36,020
58
24
Kalderos, Inc.
Preferred Stock
12/27/2022
73,606
167
92
K Health, Inc.
Common Stock(2)
7/14/2023
61,224
187
187
Thirty Madison, Inc.
Preferred Stock
12/30/2022
167,494
445
451
Total Healthcare Technology Systems - 0.22%*
857
754
27
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Warrant
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Information Services (B2C)
Tempus Ex Machina, Inc.
Preferred Stock
5/1/2023
11,974
$
9
$
9
Total Information Services (B2C) - 0.00%*
9
9
Medical Software and Information Services
AirStrip Technologies, Inc.
Preferred Stock(2)
10/9/2013
8,036
112
—
Total Medical Software and Information Services - 0.00%*
112
—
Multimedia and Design Software
Hover Inc.
Preferred Stock
9/30/2022
183,642
309
360
Open Space Labs, Inc.
Preferred Stock(2)
11/15/2022
2,954
7
4
Total Multimedia and Design Software - 0.11%*
316
364
Network Systems Management Software
Cohesity, Inc.
Preferred Stock(2)
1/10/2020
18,945
54
106
Signifyd, Inc.
Preferred Stock(2)
12/19/2019
33,445
132
441
Corelight, Inc.
Common Stock(2)
9/29/2022
45,977
235
202
Total Network Systems Management Software - 0.22%*
421
749
Other Financial Services
Jerry Services, Inc.
Preferred Stock
6/13/2022
41,936
169
100
Monzo Bank Limited(1)(3)
Ordinary Shares(2)
3/8/2021
64,813
161
446
N26 GmbH(1)(3)
Preferred Stock(2)
9/14/2021
11
324
235
Upgrade, Inc.
Preferred Stock(2)
1/18/2019
1,488,450
223
588
Total Other Financial Services - 0.40%*
877
1,369
Real Estate Services
Belong Home, Inc.
Preferred Stock(2)
2/15/2022
7,730
6
15
HomeLight, Inc.
Preferred Stock(2)
12/21/2018
54,004
44
89
Preferred Stock(2)
11/5/2020
55,326
76
61
120
150
Homeward, Inc.
Preferred Stock
12/10/2021
71,816
211
33
McN Investments Ltd.(1)(3)
Preferred Stock(2)
5/27/2022
37,485
295
116
Mynd Management, Inc.
Preferred Stock
5/25/2022
26,765
19
18
Sonder Holdings Inc.
Common Stock(2)
12/28/2018
10,024
232
—
Common Stock(2)
3/4/2020
1,049
42
—
274
—
True Footage Inc.
Preferred Stock
11/24/2021
88,762
147
282
Total Real Estate Services - 0.18%*
1,072
614
Shopping Facilitators
Moda Operandi, Inc.
Preferred Units
12/30/2021
36,450
169
80
OfferUp Inc.
Preferred Stock(2)
12/23/2019
131,006
42
139
Total Shopping Facilitators - 0.06%*
211
219
Social/Platform Software
ClassPass Inc.
Preferred Stock(2)
3/18/2019
84,507
281
151
Total Social/Platform Software - 0.04%*
281
151
Travel & Leisure
GoEuro Corp.(1)(3)
Preferred Stock
9/18/2019
12,027
362
405
Preferred Stock
8/26/2022
24,066
996
1,032
Total Travel & Leisure - 0.41%*
1,358
1,437
Total Warrant Investments - 8.68%*
$
27,561
$
30,055
28
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Equity Investments(8)
Business Applications Software
Arcadia Power, Inc.
Preferred Stock(2)
9/21/2021
16,438
$
167
$
174
DialPad, Inc.
Preferred Stock(2)
9/22/2020
15,456
120
107
Envoy, Inc.
Preferred Stock(2)
12/30/2021
212,160
667
541
FlashParking, Inc.
Preferred Stock(2)
7/19/2022
33,116
455
446
Filevine, Inc.
Preferred Stock(2)
2/4/2022
56,353
357
277
Farmer's Business Network, Inc.
Preferred Stock(2)
7/31/2020
860
28
13
Preferred Stock(2)
9/28/2023
4,181
138
12
166
25
Passport Labs, Inc.
Preferred Stock(2)
6/11/2019
1,302
100
103
Uniphore Technologies Inc.
Preferred Stock(2)
1/28/2022
28,233
350
287
Total Business Applications Software - 0.57%*
2,382
1,960
Business/Productivity Software
Forum Brands Holdings, Inc.
Preferred Stock(2)
7/16/2021
822
150
51
Total Business/Productivity Software - 0.01%*
150
51
Commercial Services
MXP Prime GmbH(1)(3)
Common Stock(2)
2/3/2022
165
1,140
12
Preferred Stock(2)
6/29/2023
23
—
134
Preferred Stock(2)
6/29/2023
46
50
51
1,190
197
Printify, Inc.
Preferred Stock(2)
8/24/2021
13,850
50
50
Total Commercial Services - 0.07%*
1,240
247
Consumer Finance
Activehours, Inc. (d/b/a Earnin)
Preferred Stock(2)
11/10/2020
14,788
150
227
Total Consumer Finance - 0.07%*
150
227
Consumer Non-Durables
Hims & Hers Health, Inc. (f/k/a Hims, Inc.)
Common Stock(2)(10)
4/29/2019
78,935
500
703
Misfits Market, Inc. (f/k/a Imperfect Foods, Inc.)
Preferred Stock(2)
12/31/2022
1,615
142
152
Preferred Stock(2)
12/31/2022
7,196
358
385
500
537
Total Consumer Non-Durables - 0.36%*
1,000
1,240
Consumer Products and Services
everdrop GmbH(1)(3)
Preferred Stock(2)
8/1/2022
78
310
333
Frubana Inc.(1)(3)
Preferred Stock(2)
7/13/2022
7,993
500
363
Hydrow, Inc.
Preferred Stock(2)
12/14/2020
85,542
333
11
Preferred Stock(2)
3/19/2021
46,456
335
11
668
22
JOKR S.à r.l.(1)(3)
Preferred Stock(2)
12/7/2021
2,843
188
164
Preferred Stock(2)
11/3/2022
787
37
47
225
211
Pair Eyewear, Inc.
Preferred Stock(2)
6/27/2023
1,880
10
10
Total Consumer Products and Services - 0.27%*
1,713
939
Consumer Retail
Savage X, Inc.
Preferred Stock(2)
1/20/2021
17,249
500
587
Preferred Stock(2)
11/30/2021
10,393
500
467
Total Consumer Retail - 0.30%*
1,000
1,054
29
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
E-Commerce - Clothing and Accessories
FabFitFun, Inc.
Preferred Stock(2)
1/17/2019
67,934
$
500
$
499
Total E-Commerce - Clothing and Accessories - 0.14%*
500
499
E-Commerce - Personal Goods
Grove Collaborative, Inc.
Common Stock(2)(10)
6/5/2018
31,576
500
56
Merama Inc.
Preferred Stock(2)
4/19/2021
18,518
33
194
Preferred Stock(2)
4/19/2021
14,490
83
168
Preferred Stock(2)
9/1/2021
10,298
167
160
283
522
Total E-Commerce - Personal Goods - 0.17%*
783
578
Educational/Training Software
Nerdy Inc. (f/k/a Varsity Tutors LLC)
Common Stock(2)(10)
1/5/2018
60,926
250
209
Total Educational/Training Software - 0.06%*
250
209
Entertainment
Luminary Roli Limited(1)(3)
Ordinary Shares(2)
8/31/2021
434,782
2,525
315
Mind Candy, Inc.(1)(3)
Preferred Stock(2)
3/9/2020
511,665
1,000
—
Total Entertainment - 0.09%*
3,525
315
Financial Institution and Services
Prodigy Investments Limited(1)(3)
Preference Shares(2)
12/31/2020
1,552
19,714
17,773
Revolut Ltd(1)(3)
Preferred Stock(2)
8/3/2017
25,920
292
7,020
Total Financial Institution and Services - 7.16%*
20,006
24,793
Food & Drug
Capsule Corporation
Preferred Stock(2)
7/25/2019
128,423
716
369
Total Food & Drug - 0.11%*
716
369
General Media and Content
Overtime Sports, Inc.
Preferred Stock(2)
8/2/2022
127,656
1,000
1,000
Total General Media and Content - 0.29%*
1,000
1,000
Healthcare Technology Systems
Curology, Inc.
Preferred Stock(2)
11/26/2019
66,000
196
155
Common Stock(2)
1/14/2020
142,855
404
93
600
248
Kalderos, Inc.
Preferred Stock(2)
12/27/2022
45,403
325
303
Talkspace, LLC (f/k/a Groop Internet Platfom, Inc.)
Common Stock(2)(10)
5/15/2019
146,752
378
373
Thirty Madison, Inc.
Preferred Stock(2)
5/31/2019
81,708
1,000
757
Total Healthcare Technology Systems - 0.49%*
2,303
1,681
Multimedia and Design Software
Hover Inc.
Preferred Stock(2)
9/30/2022
42,378
231
263
Total Multimedia and Design Software - 0.08%*
231
263
Network Systems Management Software
Cohesity, Inc.
Preferred Stock(2)
3/24/2017
60,342
400
1,004
Preferred Stock(2)
4/7/2020
9,022
125
153
Total Network Systems Management Software - 0.33%*
525
1,157
30
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
(dollars in thousands)
As of December 31, 2023
Portfolio Company
Type of Equity
Acquisition Date(12)
Shares
Cost(6)
Fair Value
Other Financial Services
Jerry Services, Inc.
Preferred Stock(2)
5/6/2022
8,231
$
104
$
74
Monzo Bank Limited(1)(3)
Ordinary Shares(2)
3/8/2021
92,901
1,000
1,430
Ordinary Shares(2)
1/5/2022
26,281
516
510
1,516
1,940
N26 GmbH(1)(3)
Preferred Stock(2)
12/9/2021
22
1,264
1,497
Redesign Health Inc.
Preferred Stock(2)
7/12/2022
5,919
100
100
Total Other Financial Services - 1.04%*
2,984
3,611
Real Estate Services
Belong Home, Inc.
Preferred Stock(2)
4/18/2022
6,033
29
29
McN Investments Ltd.(1)(3)
Preferred Stock(2)
5/6/2022
11,246
300
209
Sonder Holdings Inc.
Common Stock(2)(10)
5/21/2019
2,186
312
7
True Footage Inc.
Preferred Stock(2)
10/18/2021
18,366
100
122
Total Real Estate Services - 0.11%*
741
367
Travel & Leisure
GoEuro Corp.(1)(3)
Preferred Stock(2)
10/5/2017
2,362
300
295
Preferred Stock(2)
5/9/2022
9,169
623
918
923
1,213
Inspirato LLC
Common Stock(2)(4)(10)
9/11/2014
6,081
287
22
Total Travel & Leisure - 0.36%*
1,210
1,235
Total Equity Investments - 12.07%*
$
42,409
$
41,795
Total Investments in Portfolio Companies - 231.63%*(9)(11)
$
850,142
$
802,145
Cash Equivalents
Money Market Fund
Type of Investment
Ticker
Cost
Fair Value
Federated Government Obligations Fund
Cash Equivalents
PRM
$
151,910
$
151,910
Total Cash Equivalents - 43.87%*
$
151,910
$
151,910
_______________
(1)Investment is a non-qualifying asset under Section 55(a) of the 1940 Act. As of December 31, 2023, non-qualifying assets represented 28.7% of the Company’s total assets, at fair value.
(2)As of December 31, 2023 this investment was not pledged as collateral as part of the Company’s revolving credit facility.
(3)Entity is not domiciled in the United States and does not have its principal place of business in the United States.
(4)Investment is owned by TPVG Investment LLC, a wholly owned taxable subsidiary of the Company.
(5)Investment is a cash success fee or a cash exit fee payable on the consummation of certain trigger events.
(6)Gross unrealized gains, gross unrealized losses, and net unrealized losses for federal income tax purposes totaled $21.9 million, $53.1 million and $31.2 million, respectively, for the December 31, 2023 investment portfolio. The tax cost of investments is $833.4 million.
(7)Debt is on non-accrual status as of December 31, 2023 and is therefore considered non-income producing. Non-accrual investments as of December 31, 2023 had a total cost and fair value of $41.7 million and $29.0 million, respectively.
(8)Non-income producing investments.
(9)Except for equity in six public companies, all investments were valued at fair value using Level 3 significant unobservable inputs as determined in good faith by the Board.
(10)Investment is publicly traded and listed on either the New York Stock Exchange or the Nasdaq, and is not subject to restrictions on sales.
(11)The Company generally acquires its investments in private transactions exempt from registration under the Securities Act. Unless otherwise indicated, all of the Company’s portfolio company investments are subject to restrictions on sales. As of December 31, 2023, the Company’s portfolio company investments that were subject to restrictions on sales totaled $800.8 million at fair value and represented 231.2% of the Company’s net assets. In addition, unless otherwise indicated, as of December 31, 2023, all investments are pledged as collateral as part of the Company’s revolving credit facility.
(12)Acquisition date represents the date of the investment in the portfolio investment.
* Value as a percentage of net assets.
_______________
31
Notes applicable to the investments presented in the foregoing schedules of investments:
•Unless otherwise noted as an “Affiliate Investment” or a “Control Investment,” no investment represents a 5% or greater interest in any outstanding class of voting security of the portfolio company. As of September 30, 2024 and December 31, 2023, none of the Company’s investments represent a 5% or greater interest in any outstanding class of voting security of the portfolio company.
Notes applicable to the debt investments presented in the foregoing schedules of investments:
•Unless otherwise noted, interest rate is the annual cash interest rate on the debt investment and does not include any original issue discount (“OID”), end-of-term (“EOT”) payment, or any additional fees related to the investments, such as deferred interest, commitment fees or prepayment fees.
•For each debt investment tied to the U.S. Prime rate (“Prime Rate”) as of September 30, 2024, the Prime Rate was 8.00%. As of September 30, 2024, approximately 60.0%, or $364.1 million in principal balance, of the debt investments in the Company’s portfolio bore interest at floating rates, which generally are Prime-based and all of which had interest rate floors of 3.25% or higher. As of December 31, 2023, approximately 60.1% or $467.3 million in principal balance, of the debt investments in the Company’s portfolio bore interest at floating rates, which generally are Prime-based and all of which had interest rate floors of 3.25% or higher.
•The EOT payments are contractual and fixed interest payments due in cash at the maturity date of the loan, including upon prepayment, and are a fixed percentage of the original principal balance of the loan unless otherwise noted. The EOT payment is amortized and recognized as non-cash income over the loan or lease prior to its payment.
•Some of the terms noted in the foregoing schedules of investments are subject to change based on certain events such as prepayments.
32
TRIPLEPOINT VENTURE GROWTH BDC CORP. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2024
(unaudited)
Note 1. Organization
TriplePoint Venture Growth BDC Corp. (the “Company”), a Maryland corporation, was formed on June 28, 2013 and commenced investment operations on March 5, 2014. The Company is structured as an externally-managed, closed-end investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). The Company has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company was formed to expand the venture growth stage business segment of TriplePoint Capital LLC’s (“TPC”) 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 lifespans. The Company’s investment objective is to maximize its 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. The Company is externally managed by TriplePoint Advisers LLC (the “Adviser”), which is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and is a wholly owned subsidiary of TPC. The Adviser is responsible for sourcing, reviewing and structuring investment opportunities, underwriting and performing due diligence on investments and monitoring the investment portfolio on an ongoing basis. The Adviser was organized in August 2013 and, pursuant to an investment advisory agreement entered into between the Company and the Adviser, the Company pays the Adviser a base management fee and an incentive fee for its investment management services. The Company has also entered into an administration agreement (the “Administration Agreement”) with TriplePoint Administrator LLC (the “Administrator”), a wholly owned subsidiary of the Adviser, pursuant to which the Administrator provides or arranges for the provision of all administrative services necessary for the Company to operate.
The Company has two wholly owned subsidiaries: TPVG Variable Funding Company LLC (the “Financing Subsidiary”), a bankruptcy remote special purpose entity established for utilizing the Company’s revolving credit facility, whose creditors have a claim on its assets prior to those assets becoming available to the Financing Subsidiary’s equity holder, and TPVG Investment LLC, an entity established for holding certain of the Company’s investments without negatively impacting the Company’s RIC tax status. These subsidiaries are consolidated in the financial statements of the Company.
Note 2. Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures required by GAAP for the annual reporting of consolidated financial statements are omitted.
The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All adjustments and reclassifications that are necessary for the fair representation of financial results as of and for the periods presented have been included and all intercompany account balances and transactions have been eliminated.
Certain items in the prior period’s consolidated financial statements have been conformed to the current period’s presentation. These presentation changes, if any, did not impact any prior amounts of reported total assets, total liabilities, net assets or results of operations.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 6, 2024, including the significant accounting policies described in “Note 2. Significant Accounting Policies” in the Company’s consolidated financial statements included therein.
Note 3. Related Party Agreements and Transactions
Investment Advisory Agreement
In accordance with the Board approved investment advisory agreement (the “Advisory Agreement”), subject to the overall supervision of the Board and in accordance with the 1940 Act, the Adviser manages the day-to-day operations and provides investment advisory services to the Company. Under the terms of the Advisory Agreement, the Adviser:
•determines the composition of the Company’s portfolio, the nature and timing of changes to the Company’s portfolio and the manner of implementing such changes;
•identifies, evaluates and negotiates the structure of investments;
33
•executes, closes, services and monitors investments;
•determines the securities and other assets purchased, retained or sold;
•performs due diligence on prospective investments; and
•provides the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.
As consideration for the investment advisory and management services provided, and pursuant to the Advisory Agreement, the Company has agreed to pay the Adviser a fee consisting of two components—a base management fee and an incentive fee. The cost of both the base management fee and incentive fee is ultimately borne by the Company’s stockholders.
Base Management Fee
The base management fee is calculated at an annual rate of 1.75% of the Company’s average adjusted gross assets, including assets purchased with borrowed funds. For services rendered under the Advisory Agreement, the base management fee is payable quarterly in arrears. The base management fee is calculated based on the average value of the Company’s gross assets at the end of its two most recently completed calendar quarters. Such amount is appropriately adjusted (based on the actual number of days elapsed relative to the total number of days in such calendar quarter) for any share issuances or repurchases during a calendar quarter. Base management fees for any partial month or quarter are appropriately pro-rated.
Incentive Fee
The incentive fee, which provides the Adviser with a share of the income it generates for the Company, consists of two components—net investment income and net capital gains—which are largely independent of each other, and may result in one component being payable in a given period even if the other is not payable.
Under the investment income component, the Company pays the Adviser each quarter 20.0% of the amount by which the Company’s pre-incentive fee net investment income for the quarter exceeds a hurdle rate of 2.0% (8.0% annualized) of the Company’s net assets at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision pursuant to which the Adviser receives all of such income in excess of 2.0% but less than 2.5%, subject to a total return requirement. The effect of the “catch-up” provision is that, subject to the total return provision discussed below, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, the Adviser receives 20.0% of the Company’s pre-incentive fee net investment income as if the 2.0% hurdle rate did not apply. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital gains or losses. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of the Company’s pre-incentive fee net investment income is payable except to the extent that 20.0% of the cumulative net increase in net assets resulting from operations since the effective date of the Company’s election to be regulated as a BDC exceeds the cumulative incentive fees accrued and/or paid since the effective date of the Company’s election to be regulated as a BDC. In other words, any investment income incentive fee that is payable in a calendar quarter is limited to the lesser of (i) 20.0% of the amount by which the Company’s pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle, subject to the “catch-up” provision and (ii) (x) 20.0% of the cumulative net increase in net assets resulting from operations since the effective date of the Company’s election to be regulated as a BDC minus (y) the cumulative incentive fees accrued and/or paid since the effective date of the Company’s election to be regulated as a BDC. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum of the Company’s pre-incentive fee net investment income, realized gains and losses and unrealized appreciation and depreciation since the effective date of the Company’s election to be regulated as a BDC. The Company elected to be regulated as a BDC under the 1940 Act on March 5, 2014.
Under the capital gains component of the incentive fee, the Company pays the Adviser at the end of each calendar year (or upon termination of the Advisory Agreement) 20.0% of the Company’s aggregate cumulative realized capital gains from inception through the end of that year (or upon termination of the Advisory Agreement), computed net of aggregate cumulative realized capital losses and aggregate cumulative unrealized losses through the end of such year, less the aggregate amount of any previously paid capital gain incentive fees. For the foregoing purpose, the Company’s “aggregate cumulative realized capital gains” does not include any unrealized gains. It should be noted that the Company accrues an incentive fee for accounting purposes taking into account any unrealized gains in accordance with GAAP. The capital gains component of the incentive fee is not subject to any minimum return to stockholders. If such amount is negative, then no capital gains incentive fee is payable for such year. Additionally, if the Advisory Agreement is terminated as of a date that is not a calendar year end, the termination date will be treated as though it were a calendar year end for purposes of calculating and paying the capital gains incentive fee.
The base management fee, income incentive fee and capital gains incentive fee earned by the Adviser are included in the Company’s consolidated financial statements and summarized in the table below. Base management and incentive fees are paid in the quarter following that in which they are earned. The Company had cumulative realized and unrealized losses as of September 30, 2024 and 2023, and, as a result, no capital gains incentive fees were recorded for the three and nine months ended September 30, 2024 and 2023.
Management and Incentive Fees (in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Base management fee
$
3,418
$
4,596
$
11,552
$
13,403
Income incentive fee
$
—
$
—
$
—
$
—
Capital gains incentive fee
$
—
$
—
$
—
$
—
34
Administration Agreement
The Board-approved Administration Agreement provides that the Administrator is responsible for furnishing the Company with office facilities and equipment and providing the Company with clerical, bookkeeping, recordkeeping services and other administrative services at such facilities. Under the Administration Agreement, the Administrator performs, or oversees, or arranges for, the performance of the Company’s required administrative services, which includes being responsible for the financial and other records which the Company is required to maintain and preparing reports to the Company’s stockholders and reports and other materials filed with the SEC and any other regulatory authority. In addition, the Administrator assists the Company in determining and publishing net asset value (“NAV”), overseeing the preparation and filing of the Company’s tax returns and printing and disseminating reports and other materials to the Company’s stockholders, and generally oversees the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others. Under the Administration Agreement, the Administrator also provides significant managerial assistance on the Company’s behalf to those companies that have accepted the Company’s offer to provide such assistance.
In consideration of the provision of the services of the Administrator, the Company reimburses the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities under the Administration Agreement. Payments under the Administration Agreement are equal to the Company’s allocable portion (subject to the review of the Board) of the Administrator’s overhead resulting from its obligations under the Administration Agreement, including rent and the allocable portion of the cost of the chief compliance officer and chief financial officer and their respective staffs. In addition, if requested to provide significant managerial assistance to the Company’s portfolio companies, the Administrator is paid an additional amount based on the services provided, which shall not exceed the amount the Company receives from such companies for providing this assistance.
For the three months ended September 30, 2024 and 2023, expenses paid or payable by the Company to the Administrator under the Administration Agreement were $0.6 million and $0.6 million, respectively.
For the nine months ended September 30, 2024 and 2023, expenses paid or payable by the Company to the Administrator under the Administration Agreement were $1.8 million and $1.7 million, respectively.
Note 4. Investments
The Company measures the fair value of its investments 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.
The Valuation Committee of the Board is responsible for assisting the Board in valuing investments for which current market quotations are not readily available. Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from pricing services, broker-dealers or market makers.
The Company values its investments for which market quotations are not readily available at fair value as determined in good faith by the Board, with the assistance of the Adviser and independent valuation agents, in accordance with Rule 2a-5 of the 1940 Act and GAAP, and in accordance with the Company’s valuation methodologies. If more than one valuation method is used to measure fair value, the results are evaluated and weighted, as appropriate, considering the reasonableness of the range indicated by those results. The Adviser considers a range of fair values based upon the valuation techniques utilized and selects a value within that range that most accurately represents fair value based on current market conditions as well as other factors the Adviser’s valuation committee considers relevant. The Board determines fair value of its investments on at least a quarterly basis or at such other times when the Board feels it would be appropriate to do so given the circumstances. A determination of fair value involves subjective judgments and estimates and depends on the facts and circumstances present at each valuation date. Due to the inherent uncertainty of determining fair value of portfolio investments that do not have a readily available market value, fair value of investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.
ASC Topic 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. ASC Topic 820 also provides guidance regarding a fair value hierarchy, which prioritizes information used to measure fair value and the effect of fair value measurements on earnings and provides for enhanced disclosures determined by the level of information used in the valuation. In accordance with ASC Topic 820, these inputs are summarized in the three levels listed below.
•Level 1—Valuations are based on quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
•Level 2—Valuations are based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly, and model-based valuation techniques for which all significant inputs are observable.
•Level 3—Valuations are based on inputs that are unobservable and significant to the overall fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models incorporating significant unobservable inputs, such as discounted cash flow models and other similar valuations techniques. The valuation of Level 3 assets and liabilities generally requires significant management judgment due to the inability to observe inputs to valuation.
35
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of observable input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the investment.
Under ASC Topic 820, the fair value measurement also assumes that the transaction to sell an asset occurs in the principal market for the asset or, in the absence of a principal market, the most advantageous market for the asset, which may be a hypothetical market, excluding transaction costs. The principal market for any asset is the market with the greatest volume and level of activity for such asset in which the reporting entity would or could sell or transfer the asset. In determining the principal market for an asset or liability under ASC Topic 820, it is assumed that the reporting entity has access to such market as of the measurement date. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable and willing and able to transact.
For purposes of Section 2(a)(41) and Rule 2a-5 under the 1940 Act, a market quotation is readily available only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the Company can access at the measurement date, provided that a quotation will not be readily available if it is not reliable. Any portfolio investment that is not priced using a Level 1 input shall be subject to the fair value determination requirements under Rule 2a-5 and subject to the Company’s valuation procedures.
With respect to investments for which market quotations are not readily available, the Board undertakes a multi-step valuation process each quarter, as described below:
•The quarterly valuation process begins with each portfolio company or investment receiving a proposed valuation by the Adviser. The Adviser’s internal valuation committee (the “Adviser Valuation Committee”) is responsible for the valuation process, including making preliminary valuation conclusions and recommendations to the Valuation Committee and Board. The Adviser Valuation Committee does not include any voting members who are portfolio managers or investment professionals.
•The Adviser’s Portfolio Valuation, Monitoring and Analytics (“VMA”) group is responsible for aiding and supporting the Adviser Valuation Committee in the Adviser Valuation Committee’s role of overseeing the valuation process, including for calculating and overseeing the valuation process and valuation conclusions, and including making recommendations with respect to discount rates, liquidity adjustments and other key inputs into the valuation process.
•Proposed valuations are then documented and discussed with the Adviser Valuation Committee and other members of the Adviser’s senior management, including members of the VMA and the Adviser’s Finance, Operations, Legal and Compliance groups.
•At least 25% of the total dollar value of the Company’s investment portfolio will receive valuation recommendations from an independent third-party valuation firm each quarter, as selected in accordance with the Company’s valuation policy. Each new portfolio investment will be reviewed by an independent third-party valuation firm within 12 months of the date of investment, and thereafter will be reviewed by an independent third-party valuation firm no later than the fourth quarter following its most recent inclusion in such review process. However, a valuation review by an independent third-party valuation firm is not required for an investment whose total dollar value is less than 1% of the total dollar value of the Company’s aggregate investment portfolio (up to an aggregate of 10% of the total dollar value of the Company’s aggregate investment portfolio) or for those assets that the Board and/or Valuation Committee has agreed to waive from such requirement.
•The Adviser and the independent third-party valuation firms, if applicable, then present their proposed valuations to the Valuation Committee and Board, and the Board makes a fair valuation determination for each portfolio investment that is to be fair valued.
Debt Investments
The debt investments identified on the consolidated schedules of investments are loans made to venture growth stage companies focused in technology and other high growth industries which are backed by a select group of leading venture capital investors. These investments are considered Level 3 assets under ASC Topic 820 as there is no known or accessible market or market indices for these types of debt instruments and thus the Company must estimate the fair value of these investment securities based on models utilizing unobservable inputs.
To estimate the fair value of debt investments, the Company compares the cost basis of each debt investment, including any OID, to the resulting fair value determined using a discounted cash flow model, unless another model is more appropriate based on the circumstances at the measurement date. The discounted cash flow approach entails analyzing the interest rate spreads for recently completed financing transactions which are similar in nature to these debt investments, in order to determine a comparable range of effective market interest rates. The range of interest rate spreads utilized is based on borrowers with similar credit profiles. All remaining expected cash flows of the investment are discounted using this range of interest rates to determine a range of fair values for the debt investment.
The valuation process includes, among other things, evaluating the underlying investment performance of the portfolio company’s current financial condition and ability to raise additional capital, as well as macro-economic events that may impact valuations. These events include, but are not limited to, current market yields and interest rate spreads of similar securities as of the measurement date. Changes in these unobservable inputs could result in significantly different fair value measurements.
36
Under certain circumstances, an alternative technique may be used to value certain debt investments that better reflect the fair value of the investment, such as the price paid or realized in a recently completed transaction or a binding offer received in an arm’s length transaction, the use of multiple probability weighted cash flow models when the expected future cash flows contain elements of variability or estimates of proceeds that would be received in a liquidation scenario.
Warrant Investments
Warrant fair values are primarily determined using a Black Scholes option pricing model. Privately held warrants and equity-related securities are valued based on an analysis of various factors, including, but not limited to, those listed below. Increases or decreases in any of the unobservable inputs described below could result in a material change in fair value:
•Underlying enterprise value of the issuer based on available information, including any information regarding the most recent financing round of borrower. Valuation techniques to determine enterprise value include market multiple approaches, income approaches or the use of recent rounds of financing and the portfolio company’s capital structure. Valuation techniques are also utilized to allocate the enterprise fair value of a portfolio company to the specific class of common or preferred stock exercisable in the warrant. Such techniques take into account the rights and preferences of the portfolio company’s securities, expected exit scenarios, and volatility associated with such outcomes to allocate the fair value to the specific class of stock held in the portfolio. Such techniques include option pricing models, including back solve techniques, probability weighted expected return models and other techniques determined to be appropriate.
•Volatility, or the amount of uncertainty or risk about the size of the changes in the warrant investment price, is based on comparable publicly traded companies within indices similar in nature to the underlying company issuing the warrant.
•The risk-free interest rates are derived from the U.S. Treasury yield curve. The risk-free interest rates are calculated based on a weighted average of the risk-free interest rates that correspond closest to the expected remaining life of the warrant investment.
•Other adjustments, including a marketability discount on private company warrant investments, are estimated based on the Adviser’s judgment about the general industry environment.
•Historical portfolio experience on cancellations and exercises of warrant investments are utilized as the basis for determining the estimated life of the warrant investment in each financial reporting period. Warrant investments may be exercised in the event of acquisitions, mergers or initial public offerings, and cancelled due to events such as bankruptcies, restructuring activities or additional financings. These events cause the expected remaining life assumption to be shorter than the contractual term of the warrant investment.
Under certain circumstances alternative techniques may be used to value certain warrants that more accurately reflect the warrants' fair values, such as an expected settlement of a warrant in the near term, a model that incorporates a put feature associated with the warrant, or the price paid or realized in a recently completed transaction or binding offer received in an arm’s-length transaction. The fair value may be determined based on the expected proceeds to be received from such settlement or based on the net present value of the expected proceeds from the put option.
Equity Investments
The fair value of an equity investment in a privately held company is initially the amount invested. The Company adjusts the fair value of equity investments in private companies upon the completion of a new third party round of equity financing subsequent to its investment. The Company may adjust the fair value of an equity investment absent a new equity financing event based upon positive or negative changes in a portfolio company’s financial or operational performance. The Company may also reference comparable transactions and/or secondary market transactions of comparable companies to estimate fair value. These valuation methodologies involve a significant degree of judgment.
The fair value of an equity investment in a publicly traded company is based upon the closing public share price on the date of measurement. These assets are recorded at fair value on a recurring basis.
Investment Valuation
The above-described valuation methodologies involve a significant degree of judgment. There is no single standard for determining the estimated fair value of investments that do not have an active observable market. Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time. The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed. In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a single estimate may then be determined.
Investments measured at fair value on a recurring basis are categorized in the following table based upon the lowest level of significant input to the valuations as of September 30, 2024 and December 31, 2023. The Company transfers investments in and out of Levels 1, 2 and 3 as of the beginning balance sheet date, based on changes in the use of observable and unobservable inputs utilized to perform the valuation for the period.
37
Investment Type (in thousands)
September 30, 2024
December 31, 2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Debt investments
$
—
$
—
$
604,677
$
604,677
$
—
$
—
$
730,295
$
730,295
Warrant investments
—
—
40,364
40,364
—
—
30,055
30,055
Equity investments
444
—
75,489
75,933
1,370
—
40,425
41,795
Total portfolio company investments
$
444
$
—
$
720,530
$
720,974
$
1,370
$
—
$
800,775
$
802,145
The following tables show information about Level 3 portfolio company investments measured at fair value for the nine months ended September 30, 2024 and 2023. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. As a result, the net unrealized gains and losses for assets within the Level 3 category may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.
Level 3 Investment Activity (in thousands)
For the Nine Months Ended September 30, 2024
Debt Investments
Warrant Investments
Equity Investments
Total Portfolio Company Investments
Fair value as of December 31, 2023
$
730,295
$
30,055
$
40,425
$
800,775
Funding and purchases of investments, at cost
83,555
560
1,716
85,831
Principal payments and sale proceeds received from investments
(176,056)
(889)
—
(176,945)
Net amortization and accretion of premiums and discounts and end-of-term payments
3,343
—
—
3,343
Net realized gains (losses) on investments
(33,847)
(824)
—
(34,671)
Net change in unrealized gains (losses) included in earnings
1,340
11,846
17,251
30,437
Payment-in-kind coupon
11,833
—
—
11,833
Transfers between investment types
(15,786)
(384)
16,170
—
Gross transfers out of Level 3(1)
—
—
(73)
(73)
Fair value as of September 30, 2024
$
604,677
$
40,364
$
75,489
$
720,530
Net change in unrealized gains (losses) on Level 3 investments held as of September 30, 2024
$
(10,112)
$
10,427
$
17,251
$
17,566
__________
(1)Transfers out of Level 3 are measured as of the date of the transfer. During the nine months ended September 30, 2024, transfers relate to equity investments in publicly traded companies.
Level 3 Investment Activity (in thousands)
For the Nine Months Ended September 30, 2023
Debt Investments
Warrant Investments
Equity Investments
Total Portfolio Company Investments
Fair value as of December 31, 2022
$
852,951
$
48,414
$
44,599
$
945,964
Funding and purchases of investments, at cost
98,967
1,502
1,320
101,789
Principal payments and sale proceeds received from investments
(127,688)
(274)
—
(127,962)
Net amortization and accretion of premiums and discounts and end-of-term payments
9,528
—
—
9,528
Net realized gains (losses) on investments
(25,850)
(704)
—
(26,554)
Net change in unrealized gains (losses) included in earnings
(33,001)
(6,304)
(2,410)
(41,715)
Payment-in-kind coupon
7,946
—
—
7,946
Gross transfers out of Level 3(1)
—
—
—
—
Fair value as of September 30, 2023
$
782,853
$
42,634
$
43,509
$
868,996
Net change in unrealized gains (losses) on Level 3 investments held as of September 30, 2023
$
(35,412)
$
(6,681)
$
(2,409)
$
(44,502)
_______________
(1)Transfers out of Level 3 are measured as of the date of the transfer. There were no transfers out of Level 3 during the nine months ended September 30, 2023.
38
Realized gains and losses are included in “net realized gains (losses) on investments” in the consolidated statements of operations.
During the three months ended September 30, 2024, the Company recognized net realized losses on investments of $5.0 million. During the three months ended September 30, 2023, the Company recognized net realized losses on investments of $25.6 million.
During the nine months ended September 30, 2024, the Company recognized net realized losses on investments of $32.7 million. During the nine months ended September 30, 2023, the Company recognized net realized losses on investments of $23.7 million.
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 gains during the three months ended September 30, 2024 was $13.9 million. Net change in unrealized gains during the three months ended September 30, 2023 was $8.6 million.
Net change in unrealized gains during the nine months ended September 30, 2024 was $30.0 million. Net change in unrealized losses during the nine months ended September 30, 2023 was $43.8 million.
The following tables show a summary of quantitative information about the Level 3 fair value measurements of portfolio company investments as of September 30, 2024 and December 31, 2023. In addition to the techniques and inputs noted in the tables below, the Company may also use other valuation techniques and methodologies when determining fair value measurements.
Level 3 Investments (dollars in thousands)
September 30, 2024
Fair Value
Valuation Technique
Unobservable Inputs
Range
Weighted Average
Debt investments
$
519,717
Discounted Cash Flows
Discount Rate
10.57% - 36.06%
18.63%
84,960
Probability-Weighted Expected Return Method
Probability Weighting of Alternative Outcomes
5.00% - 100.00%
72.14%
Warrant investments
38,437
Black Scholes Option Pricing Model
Revenue Multiples
0.15x - 21.00x
10.69x
Volatility
25.00% - 90.00%
53.15%
Term
0.20 - 4.50 Years
2.37
Discount for Lack of Marketability
10.00% - 20.00%
11.69%
Risk Free Rate
0.09% - 5.03%
3.65%
—
Option-Pricing Method and Probability-Weighted Expected Return Method
Term
1.50 - 2.25 Years
2.18
1,927
Discounted Expected Return
Discount Rate
20.00% - 30.00%
27.41%
Term
1.00 - 4.00 Years
2.52
Expected Recovery Rate
18.75% - 100.00%
89.44%
Equity investments
74,332
Black Scholes Option Pricing Model
Revenue Multiples
0.35x - 21.00x
10.23x
Volatility
25.00% - 90.00%
53.00%
Term
1.00 - 4.00 Years
1.97
Discount for Lack of Marketability
10.00% - 10.00%
10.00%
Risk Free Rate
0.13% - 5.03%
4.15%
1,157
Option-Pricing Method and Probability-Weighted Expected Return Method
Discount Rate
20.00% - 20.00%
20.00%
Term
0.50 - 1.50 Years
1.00
Total portfolio company investments
$
720,530
39
Level 3 Investments (dollars in thousands)
December 31, 2023
Fair Value
Valuation Technique
Unobservable Inputs
Range
Weighted Average
Debt investments
$
688,937
Discounted Cash Flows
Discount Rate
14.62% - 42.03%
19.79%
41,358
Probability-Weighted Expected Return Method
Probability Weighting of Alternative Outcomes
5.00% - 100.00%
61.36%
Warrant investments
27,730
Black Scholes Option Pricing Model
Revenue Multiples
0.18x - 14.00x
4.79x
Volatility
35.00% - 90.00%
60.99%
Term
0.20 - 4.50 Years
3.04
Discount for Lack of Marketability
17.50% - 20.00%
18.60%
Risk Free Rate
0.09% - 5.03%
3.37%
411
Option-Pricing Method and Probability-Weighted Expected Return Method
Term
3.00 - 4.00 Years
3.01
1,914
Discounted Expected Return
Discount Rate
20.00% - 30.00%
27.41%
Term
1.00 - 4.00 Years
2.52
Expected Recovery Rate
18.75% - 100.00%
89.37%
Equity investments
39,268
Black Scholes Option Pricing Model
Revenue Multiples
0.70x - 14.00x
5.60x
Volatility
35.00% - 90.00%
66.01%
Term
1.50 - 4.00 Years
2.82
Discount for Lack of Marketability
17.50% - 17.50%
17.50%
Risk Free Rate
0.13% - 5.03%
3.82%
1,157
Option-Pricing Method and Probability-Weighted Expected Return Method
Discount Rate
20.00% - 20.00%
20.00%
Term
0.50 - 1.50 Years
1.00
Total portfolio company investments
$
800,775
Increases or decreases in any of the above unobservable inputs in isolation would result in a lower or higher fair value measurement for such assets.
Note 5. Credit Risk
Debt investments may be affected by business, financial market or legal uncertainties. Prices of investments may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic, economic and political developments, may significantly affect the value of these investments. In addition, the value of these investments may fluctuate as the general level of interest rates fluctuates.
In many instances, the portfolio company’s ability to repay the debt investments is dependent on additional funding by its venture capital investors, a future sale or an initial public offering. The value of these investments may be detrimentally affected to the extent a borrower defaults on its obligations, there is insufficient collateral and/or there are extensive legal and other costs incurred in collecting on a defaulted loan.
Note 6. Borrowings
The following table shows the Company’s outstanding debt as of September 30, 2024 and December 31, 2023:
Liability (in thousands)
September 30, 2024
December 31, 2023
Total Commitment
Balance Outstanding
Unused Commitment
Total Commitment
Balance Outstanding
Unused Commitment
Revolving Credit Facility
$
300,000
$
10,000
$
290,000
$
350,000
$
215,000
$
135,000
2025 Notes
70,000
70,000
—
70,000
70,000
—
2026 Notes
200,000
200,000
—
200,000
200,000
—
2027 Notes
125,000
125,000
—
125,000
125,000
—
Total before deferred financing and issuance costs
695,000
405,000
290,000
745,000
610,000
135,000
Unamortized deferred financing and issuance costs
—
(5,981)
—
—
(4,818)
—
Total borrowings outstanding, net of deferred financing and issuance costs
$
695,000
$
399,019
$
290,000
$
745,000
$
605,182
$
135,000
40
Interest expense on these borrowings includes the interest cost charged on borrowings, the unused fee on the Credit Facility (as defined below), paying and administrative agent fees, and the amortization of deferred Credit Facility fees and expenses and costs and fees relating to the Company’s unsecured notes outstanding. These expenses are shown in the table below:
Interest Expense and Amortization of Fees (in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Revolving Credit Facility
Interest cost
$
1,355
$
3,751
$
5,739
$
11,944
Unused fee
329
225
959
594
Amortization of costs and other fees
631
484
1,657
1,448
Revolving Credit Facility Total
$
2,315
$
4,460
$
8,355
$
13,986
2025 Notes
Interest cost
$
788
$
787
$
2,363
$
2,362
Amortization of costs and other fees
52
52
165
155
2025 Notes Total
$
840
$
839
$
2,528
$
2,517
2026 Notes
Interest cost
$
2,250
$
2,250
$
6,750
$
6,750
Amortization of costs and other fees
111
115
332
336
2026 Notes Total
$
2,361
$
2,365
$
7,082
$
7,086
2027 Notes
Interest cost
$
1,562
$
1,563
$
4,687
$
4,688
Amortization of costs and other fees
70
70
209
209
2027 Notes Total
$
1,632
$
1,633
$
4,896
$
4,897
Total interest expense and amortization of fees
$
7,148
$
9,297
$
22,861
$
28,486
Credit Facility
In February 2014, the Company, along with its Financing Subsidiary as borrower, entered into a credit agreement with Deutsche Bank AG, New York Branch acting as administrative agent and the other lenders party thereto, which provided the Company with a $150.0 million commitment, subject to borrowing base requirements (as amended and restated from time to time, the “Credit Facility”). On July 22, 2022, the Credit Facility was amended to, among other things, extend the revolving period from November 30, 2022 to May 31, 2024 and the scheduled maturity date from May 31, 2024 to November 30, 2025 (unless otherwise terminated earlier pursuant to its terms), as well as change the floating rate from LIBOR to SOFR. On April 29, 2024, the Company and the Financing Subsidiary amended the Credit Facility to, among other things, extend the revolving period to August 31, 2024. On August 6, 2024, the Company and the Financing Subsidiary amended the Credit Facility to, among other things, (i) further extend the revolving period from August 31, 2024 to November 30, 2025, (ii) extend the scheduled maturity date from November 30, 2025 to May 30, 2027, (iii) adjust the advance rates based on the underlying asset type, (iv) revise certain events of default provisions and affirmative and negative covenants; and (v) reduce the total commitments to $300 million from $350 million. As of September 30, 2024, the Company had $300 million in total commitments available under the Credit Facility, which includes an accordion feature that allows the Company to increase the size of the Credit Facility to up to $400 million under certain circumstances.
As of September 30, 2024 borrowings under the Credit Facility bore 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 3.20% if facility utilization is greater than or equal to 75%, 3.35% if utilization is greater than or equal to 50% but less than 75%, 3.50% if utilization is less than 50% and 4.5% during the amortization period. Borrowings under the Credit Facility are secured only by the assets of the Financing Subsidiary. The Company agreed to pay Deutsche Bank AG a syndication fee and to pay to Deutsche Bank AG a fee to act as administrative agent under the Credit Facility as well as to pay each lender (i) a commitment fee based on each lender’s commitment and (ii) a fee of 0.50% per annum for any unused borrowings under the Credit Facility on a monthly basis. The Credit Facility contains affirmative and restrictive covenants including, but not limited to, an advance rate of up to 50.0% of the applicable balance of net assets held by the Financing Subsidiary, maintenance of minimum net worth, a ratio of total assets to total indebtedness of not less than the greater of 3:2 and the amount so required under the 1940 Act, a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava, and eligibility requirements, including but not limited to geographic and industry concentration limitations and certain loan grade classifications. Furthermore, events of default under the Credit Facility include, among other things, (i) a payment default; (ii) a change of control; (iii) bankruptcy; (iv) a covenant default; and (v) failure by the Company to maintain its qualification as a BDC under the 1940 Act. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the Credit Facility.
41
As of September 30, 2024 and December 31, 2023, the Company had outstanding borrowings under the Credit Facility of $10.0 million and $215.0 million, respectively, excluding deferred credit facility costs of $4.6 million and $2.7 million, respectively, which is included in the Company’s consolidated statements of assets and liabilities. The book value of the Credit Facility approximates fair value due to the relatively short maturity, cash repayments and market interest rates of the instrument. The fair value of the Credit Facility would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
During the three months ended September 30, 2024 and 2023, the Company had average outstanding borrowings under the Credit Facility of $61.7 million and $173.5 million, respectively, at a weighted average interest rate, inclusive of unused fees, of 9.08% and 9.09%, respectively
During the nine months ended September 30, 2024 and 2023, the Company had average outstanding borrowings under the Credit Facility of $59.1 million and $193.3 million, respectively, at a weighted average interest rate, inclusive of unused fees, of 9.04% and 8.77%, respectively.
As of September 30, 2024 and December 31, 2023, $329.7 million and $518.3 million, respectively, of the Company’s assets, including restricted cash, were pledged for borrowings under the Credit Facility, leaving $448.6 million and $460.5 million of assets unencumbered, respectively.
2025 Notes
On March 19, 2020, the Company completed a private debt offering of $70.0 million in aggregate principal amount of its 4.50% unsecured notes due March 19, 2025 (the “2025 Notes”) in reliance on Section 4(a)(2) of the Securities Act. The interest on the 2025 Notes is payable semiannually on March 19 and September 19 each year.
The 2025 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the 2025 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2025 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided, however, in the event that the Company creates, incurs, assumes or permits to exist liens on or with respect to any of its property or assets in connection with future secured indebtedness of more than an aggregate principal amount of $25 million, the 2025 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness.
The Master Note Purchase Agreement (the “Note Purchase Agreement”) under which the 2025 Notes were issued contains customary terms and conditions for unsecured notes issued in a private placement, including, without limitation, affirmative and negative covenants such as information reporting, maintenance of the Company’s status as a BDC within the meaning of the 1940 Act, a minimum asset coverage ratio of 1.50 to 1.00, a minimum interest coverage ratio of 1.25 to 1.00, and minimum stockholders’ equity of $216.1 million, as adjusted upward by an amount equal to 65% of the net proceeds from the issuance of shares of the Company’s common stock subsequent to December 31, 2019. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2025 Notes will bear interest at a fixed rate of 5.50% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing.
The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of the Company or subsidiary guarantors, certain judgments and orders, certain events of bankruptcy, and breach of a key man clause relating to the Company’s Chief Executive Officer, James P. Labe, and the Company’s President and Chief Investment Officer, Sajal K. Srivastava. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the 2025 Notes.
The 2025 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $0.1 million of deferred issuance cost as of September 30, 2024, which is amortized and expensed over the five-year term of the 2025 Notes based on an effective yield method. As of September 30, 2024 and December 31, 2023, the fair value of the 2025 Notes was $68.9 million and $67.5 million, respectively, and would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
2026 Notes
On March 1, 2021, the Company completed a private debt offering of $200.0 million in aggregate principal amount of its 4.50% unsecured notes due March 1, 2026 (the “2026 Notes”) in reliance on Section 4(a)(2) of the Securities Act. The interest on the 2026 Notes is payable semiannually on March 19 and September 19 each year.
42
The 2026 Notes are governed by the terms of the First Supplement, dated as of March 1, 2021 (the “First Supplement”), to the Note Purchase Agreement. The 2026 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the 2026 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2026 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided, however, in the event that the Company creates, incurs, assumes or permits to exist liens on or with respect to any of its property or assets in connection with future secured indebtedness of more than an aggregate principal amount of $25 million, the 2026 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2026 Notes will bear interest at a fixed rate of 5.50% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing. The other terms and conditions applicable to the 2026 Notes under the Note Purchase Agreement, as modified by the First Supplement, including events of default and affirmative and negative covenants, are substantially similar to the terms and conditions applicable to the 2025 Notes. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the 2026 Notes.
The 2026 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $0.6 million of deferred issuance cost as of September 30, 2024, which is amortized and expensed over the five-year term of the 2026 Notes based on an effective yield method. As of September 30, 2024 and December 31, 2023, the fair value of the 2026 Notes was $191.7 million and $188.2 million, respectively, and would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
2027 Notes
On February 28, 2022, the Company completed a private debt offering of $125.0 million in aggregate principal amount of its 5.00% unsecured notes due February 28, 2027 (the “2027 Notes”) in reliance on Section 4(a)(2) of the Securities Act. The interest on the 2027 Notes is payable semiannually on February 28 and August 28 each year.
The 2027 Notes are governed by the terms of the Second Supplement, dated as of February 28, 2022 (the “Second Supplement”), to the Note Purchase Agreement. The 2027 Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, the Company is obligated to offer to prepay the 2027 Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. The 2027 Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company; provided, however, in the event that the Company creates, incurs, assumes or permits to exist liens on or with respect to any of its property or assets in connection with future secured indebtedness of more than an aggregate principal amount of $25 million, the 2027 Notes will generally become secured concurrently therewith, equally and ratably with such indebtedness. In addition, in the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the 2027 Notes will bear interest at a fixed rate of 6.00% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event is no longer continuing. The other terms and conditions applicable to the 2027 Notes under the Note Purchase Agreement, as modified by the Second Supplement, including events of default and affirmative and negative covenants, are substantially similar to the terms and conditions applicable to the 2025 Notes and the 2026 Notes. As of September 30, 2024 and December 31, 2023, the Company was in compliance with all covenants under the 2027 Notes.
The 2027 Notes are recorded at amortized cost in the consolidated statements of assets and liabilities. Amortized cost includes $0.7 million of deferred issuance cost as of September 30, 2024, which is amortized and expensed over the five-year term of the 2027 Notes based on an effective yield method. As of September 30, 2024 and December 31, 2023, the fair value of the 2027 Notes was $118.2 million and $116.5 million, respectively, and would be categorized as Level 3 of the fair value hierarchy if determined as of the reporting date.
The following table shows additional information about the level in the fair value hierarchy of the Company’s liabilities as of September 30, 2024 and December 31, 2023:
Liability (in thousands)
September 30, 2024
December 31, 2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Revolving Credit Facility
$
—
$
—
$
10,000
$
10,000
$
—
$
—
$
215,000
$
215,000
2025 Notes, net(1)
—
—
68,763
68,763
—
—
67,275
67,275
2026 Notes, net(2)
—
—
191,032
191,032
—
—
187,255
187,255
2027 Notes, net(3)
—
—
117,480
117,480
—
—
115,632
115,632
Total
$
—
$
—
$
387,275
$
387,275
$
—
$
—
$
585,162
$
585,162
_______________
(1)Net of debt issuance costs as of September 30, 2024 and December 31, 2023 of $0.1 million and $0.3 million, respectively.
(2)Net of debt issuance costs as of September 30, 2024 and December 31, 2023 of $0.6 million and $1.0 million, respectively.
(3)Net of debt issuance costs as of September 30, 2024 and December 31, 2023 of $0.7 million and $0.9 million, respectively.
43
Note 7. Commitments and Contingencies
Commitments
As of September 30, 2024 and December 31, 2023, the Company’s unfunded commitments totaled $74.0 million to nine portfolio companies and $118.1 million to 14 portfolio companies, respectively, of which $5.0 million and $29.2 million, respectively, was dependent upon the portfolio companies reaching certain milestones before the debt commitment becomes available to them.
The Company’s credit agreements contain customary lending provisions that allow it relief from funding obligations for previously made commitments in instances where the underlying company experiences material adverse events that affect the financial condition or business outlook for the company. Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company.
The following table shows the Company’s unfunded commitments by portfolio company as of September 30, 2024 and December 31, 2023:
September 30, 2024
December 31, 2023
Unfunded Commitments(1)
(in thousands)
Unfunded Commitments
Fair Value of Unfunded Commitment Liability
Unfunded Commitments
Fair Value of Unfunded Commitment Liability
Overtime Sports Inc.
$
22,858
$
122
$
22,858
$
122
ActiveHours Inc.
15,000
61
15,000
—
Cresta Intelligence Inc.
10,000
33
—
—
Corelight, Inc.
9,000
301
20,000
415
Project Affinity, Inc.
5,500
61
—
—
Panorama Education
4,280
—
—
—
Hover, Inc.
4,000
40
—
—
Ocrolus, Inc.
2,856
37
—
—
FlashParking, Inc.
500
7
—
—
McN Investments Ltd.
—
—
15,000
78
Savage X, Inc.
—
—
12,500
575
Frubana Inc.
—
—
8,790
205
Minted Inc.
—
—
8,500
—
NewStore Inc.
—
—
5,000
68
Foodology, Inc.
—
—
3,720
—
Infinite Athlete, Inc. (f/k/a Tempus Ex Machina, Inc.)
—
—
3,000
—
Jokr S.a.r.l.
—
—
1,499
95
Substack Inc.
—
—
1,000
13
Pair EyeWear, Inc.
—
—
1,000
10
Forum Brands Inc.
—
—
244
8
Total
$
73,994
$
662
$
118,111
$
1,589
_______________
(1)The Company did not have any backlog of potential future commitments as of September 30, 2024 and December 31, 2023. Refer to the “Backlog of Potential Future Commitments” below.
The table above also shows the fair value of the Company’s unfunded commitment liability totaling $0.7 million and $1.6 million as of September 30, 2024 and December 31, 2023, respectively. The fair value at the inception of the delay draw credit agreements is equal to the fees and 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 and is included in “Other accrued expenses and liabilities” in the Company’s consolidated statements of assets and liabilities.
44
These liabilities are considered Level 3 liabilities under ASC Topic 820 as there is no known or accessible market or market indices for these types of financial instruments. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. The following table shows additional details regarding the Company's unfunded commitment activity during the three and nine months ended September 30, 2024 and 2023:
Commitments Activity (in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Unfunded commitments at beginning of period(1)
$
71,427
$
205,318
$
118,111
$
324,010
New commitments(1)
41,020
5,577
103,020
27,320
Fundings
(33,033)
(12,706)
(85,207)
(100,863)
Expirations / Terminations
(5,420)
(54,799)
(61,930)
(107,077)
Unfunded commitments and backlog of potential future commitments at end of period
$
73,994
$
143,390
$
73,994
$
143,390
Backlog of potential future commitments
—
1,500
—
1,500
Unfunded commitments at end of period
$
73,994
$
141,890
$
73,994
$
141,890
_______________
(1)Includes backlog of potential future commitments. Refer to the “Backlog of Potential Future Commitments” below.
The following table shows additional information on the Company’s unfunded commitments regarding milestones and expirations as of September 30, 2024 and December 31, 2023:
Unfunded Commitments(1)
(in thousands)
September 30, 2024
December 31, 2023
Dependent on milestones
$
5,000
$
29,220
Expiring during:
2024
$
—
$
86,754
2025
73,214
31,357
2026
780
—
Unfunded commitments
$
73,994
$
118,111
_______________
(1)Does not include backlog of potential future commitments. Refer to the “Backlog of Potential Future Commitments” below.
Backlog of Potential Future Commitments
The Company may enter into commitments with certain portfolio companies that permit an increase in the commitment amount in the future in the event that certain conditions to make such increases are met. If such conditions to increase are met, these amounts may become unfunded commitments, if not drawn prior to expiration. As of September 30, 2024 and December 31, 2023, the Company did not have any backlog of potential future commitments.
45
Note 8. Financial Highlights
The following table shows the financial highlights for the nine months ended September 30, 2024, and 2023:
Financial Highlights (in thousands, except per share data)
For the Nine Months Ended September 30,
2024
2023
Per Share Data(1)
Net asset value at beginning of period
$
9.21
$
11.88
Changes in net asset value due to:
Net investment income
1.08
1.59
Net realized gains (losses) on investments
(0.84)
(0.67)
Net change in unrealized gains (losses) on investments
0.74
(1.24)
Net increase (decrease) from capital share transactions(1)
0.01
0.01
Distributions from net investment income
(1.10)
(1.20)
Net asset value at end of period
$
9.10
$
10.37
Net investment income per share
$
1.08
$
1.59
Net increase (decrease) in net assets resulting from operations per share
$
1.01
$
(0.31)
Weighted average shares of common stock outstanding for period
38,782
35,453
Shares of common stock outstanding at end of period
40,049
36,086
Ratios / Supplemental Data
Net asset value at beginning of period
$
346,306
$
419,940
Net asset value at end of period
$
364,271
$
374,100
Average net asset value
$
350,890
$
404,725
Stock price at end of period
$
7.06
$
10.46
Total return based on net asset value per share(2)
13.5
%
(2.7)
%
Total return based on stock price(3)
(25.3)
%
11.8
%
Net investment income to average net asset value(4)
16.0
%
18.7
%
Net increase (decrease) in net assets to average net asset value(4)
14.9
%
(3.6)
%
Ratio of expenses to average net asset value(4)
15.6
%
15.9
%
Operating expenses excluding incentive fees to average net asset value(4)
15.6
%
15.9
%
Income incentive fees to average net asset value(4)
—
%
—
%
Capital gains incentive fees to average net asset value(4)
—
%
—
%
_____________
(1)All per share activity is calculated based on the weighted average shares outstanding for the relevant period, except net increase from capital share transactions, which is based on the common shares outstanding as of the relevant balance sheet date.
(2)Total return based on NAV is the change in ending NAV per share plus distributions per share paid during the period assuming participation in the Company’s dividend reinvestment plan divided by the beginning NAV per share. Total return does not reflect sales charges that may be incurred by stockholders. The total return is for the period shown and is not annualized.
(3)Total return based on stock price is the change in the ending stock price of the Company’s common stock plus distributions paid during the period assuming participation in the Company’s dividend reinvestment plan divided by the beginning stock price of the Company’s common stock. Total return does not reflect sales charges that may be incurred by stockholders. The total return is for the period shown and is not annualized.
(4)Percentage is presented on an annualized basis.
The following table shows the weighted average annualized portfolio yield on debt investments for the nine months ended September 30, 2024 and 2023:
Ratios
(Percentages, on an annualized basis)(1)
For the Nine Months Ended September 30,
2024
2023
Weighted average portfolio yield on debt investments(2)
15.6
%
14.8
%
Coupon income
12.2
%
11.7
%
Accretion of discount
0.9
%
0.9
%
Accretion of end-of-term payments
1.4
%
1.7
%
Impact of prepayments during the period
1.1
%
0.5
%
_____________
(1)Weighted average portfolio yields on 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. The calculation of weighted average portfolio yields on debt investments excludes any non-income producing debt investments, but includes debt investments on non-accrual status. The weighted average yields reported for these periods are annualized and reflect the weighted average yields to maturities.
(2)The weighted average portfolio yields on debt investments reflected above do not represent actual investment returns to our stockholders.
46
Note 9. Net Increase (Decrease) in Net Assets per Share
The following table shows the computation of basic and diluted net increase/(decrease) in net assets per share for the three and nine months ended September 30, 2024 and 2023:
Basic and Diluted Share Information (in thousands, except per share data)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Net investment income
$
13,785
$
19,104
$
41,912
$
56,520
Net increase (decrease) in net assets resulting from operations
$
22,634
$
2,148
$
39,230
$
(11,028)
Weighted average shares of common stock outstanding
39,954
35,609
38,782
35,453
Net investment income per share of common stock
$
0.35
$
0.54
$
1.08
$
1.59
Net increase (decrease) in net assets resulting from operations per share of common stock
$
0.57
$
0.06
$
1.01
$
(0.31)
Note 10. Equity
Since inception through September 30, 2024, the Company issued 34,999,352 shares of common stock through an initial public offering and a concurrent private placement offering in 2014, a registered follow-on offering in 2015, a private placement offering in 2017, a registered follow-on offering and concurrent private placement offering in 2018, a registered follow-on offering in 2020 and a registered follow-on offering in 2022. The Company received net proceeds from these offerings of $488.1 million, net of the portion of the underwriting sales load and offering costs paid by the Company. Included in the $488.1 million of net proceeds from these offerings is $55.3 million in net proceeds from the Company’s issuance in August 2022 of an aggregate of 4,161,807 shares of common stock in a registered follow-on offering pursuant to an underwriting agreement by and among the Company, the Adviser and the Administrator, on the one hand, and Wells Fargo Securities, LLC and Morgan Stanley & Co. LLC, as representatives of the several underwriters named in the underwriting agreement. 411,807 of the shares issued in August 2022 were issued pursuant to the underwriters’ option to purchase additional shares.
On September 30, 2022, the Company entered into a sales agreement (the “2022 Sales Agreement”) with the Adviser, the Administrator and UBS Securities LLC (the “Sales Agent”), providing for the issuance and sale from time to time of up to an aggregate of $50.0 million in shares of the Company’s common stock by means of at-the-market offerings (the “Prior ATM Program”). Subject to the terms of the 2022 Sales Agreement, the Sales Agent was not required to sell any specific number or dollar amount of securities but acted as the Company’s sales agent using commercially reasonable efforts consistent with the Sales Agent’s normal trading and sales practices, on mutually agreed terms between the Company and the Sales Agent.
On May 2, 2024, the Company entered into a new sales agreement (the “2024 Sales Agreement”) with the Adviser, the Administrator and the Sales Agent, providing for the issuance and sale from time to time of up to an aggregate of $75.0 million in shares of the Company’s common stock by means of at-the-market offerings (the “Current ATM Program” and, together with the Prior ATM Program, the “ATM Programs”). Concurrently upon entry into the 2024 Sales Agreement, the Company, the Adviser, the Administrator and the Sales Agent agreed to the termination of the 2022 Sales Agreement. Subject to the terms of the 2024 Sales Agreement, the Sales Agent is not required to sell any specific number or dollar amount of securities but will act as the Company’s sales agent using commercially reasonable efforts consistent with the Sales Agent’s normal trading and sales practices, on mutually agreed terms between the Company and the Sales Agent.
During the nine months ended September 30, 2024, the Company sold 2,126,711 shares of common stock under the 2022 Sales Agreement and the 2024 Sales Agreement. For the same period, the Company received total net proceeds of $19.4 million. As of September 30, 2024,$56.5 million in shares remained available for sale under the Current ATM Program.
The Company has adopted a dividend reinvestment plan for its stockholders, which is an “opt out” dividend reinvestment plan. Under this plan, if the Company declares a cash distribution to stockholders, the amount of such distribution is automatically reinvested in additional shares of common stock unless a stockholder specifically “opts out” of the dividend reinvestment plan. If a stockholder opts out, that stockholder receives cash distributions.
47
The following tables show information on the proceeds raised along with any related underwriting sales load and associated offering expenses, and the price at which common stock was issued by the Company, during the nine months ended September 30, 2024 and for the year ended December 31, 2023:
Issuance of Common Stock for the Nine Months Ended September 30, 2024 (in thousands, except for share data)
Date
Number of Shares of Common Stock Issued
Gross Proceeds Raised
Underwriting Sales Load
Offering Expenses
Gross Offering Price per Share
First quarter 2024 distribution reinvestment
3/29/2024
93
$
828
$
—
$
—
$
8.87
First quarter 2024 ATM offering(1)
3/12/2024
133
1,308
20
33
$
9.88
Second quarter 2024 distribution reinvestment
6/28/2024
113
859
—
—
$
7.63
Second quarter 2024 ATM offering
(2)
1,994
18,511
278
63
$
9.28
Third quarter 2024 distribution reinvestment
9/30/2024
96
646
—
—
$
6.71
Total issuance
2,429
$
22,152
$
298
$
96
_______________
(1)Gross offering price per share represents the weighted average price per share issued on March 12, 2024 under the 2022 Sales Agreement.
(2)Gross offering price per share represents the weighted average price per share issued during the period from May 7, 2024 to June 10, 2024 under the 2024 Sales Agreement.
Issuance of Common Stock for the Year Ended December 31, 2023 (in thousands, except for share data)
Date
Number of Shares of Common Stock Issued
Gross Proceeds Raised
Underwriting Sales Load
Offering Expenses
Gross Offering Price per Share
First quarter 2023 distribution reinvestment
3/31/2023
49
$
566
$
—
$
—
$
11.48
Second quarter 2023 distribution reinvestment
6/30/2023
49
553
—
—
$
11.19
Third quarter 2023 distribution reinvestment
9/29/2023
76
751
—
—
$
9.94
Third quarter 2023 ATM offering(1)
(1)
564
6,286
95
30
$
11.15
Fourth quarter 2023 distribution reinvestment
12/29/2023
80
821
—
—
$
10.32
Fourth quarter 2023 ATM offering(2)
(2)
1,454
15,445
232
118
$
10.61
Total issuance
2,272
$
24,422
$
327
$
148
_______________
(1)Gross offering price per share represents the weighted average price per share issued during the period from August 14, 2023 to September 18, 2023 under the 2022 Sales Agreement.
(2)Gross offering price per share represents the weighted average price per share issued during the period from November 16, 2023 to December 28, 2023 under the 2022 Sales Agreement.
The Company had 40,049,002 and 37,620,109 shares of common stock outstanding as of September 30, 2024 and December 31, 2023, respectively.
Note 11. Distributions
The Company has elected to be treated, and intends to comply with the requirements to continue to qualify annually, as a RIC under the Code. In order to maintain its ability to be subject to tax as a RIC, among other things, the Company is required to distribute at least 90% of its net ordinary income and net realized short-term capital gains in excess of its net realized long-term capital losses, if any, to its stockholders. Additionally, to avoid a nondeductible 4% U.S. federal excise tax on certain of the Company’s undistributed income, the Company must distribute during each calendar year an amount at least equal to the sum of: (a) 98% of the Company’s ordinary income (not taking into account any capital gains or losses) for such calendar year; (b) 98.2% of the amount by which the Company’s capital gains exceed the Company’s 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 the Company to use its taxable year); and (c) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax.
For the tax years ended December 31, 2023 and December 31, 2022, the Company was subject to a 4% U.S. federal excise tax and the Company may be subject to this tax in future years. In such cases, the Company is liable for the tax only on the amount by which the Company does not meet the foregoing distribution requirement. The character of income and gains that the Company distributes is determined in accordance with income tax regulations that may differ from GAAP. Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified to paid-in capital. The Company incurred a non-deductible U.S. federal excise tax of $1.4 million and $726,000 for the tax years ended December 31, 2023 and December 31, 2022, respectively.
48
The following table shows the Company's cash distributions per share that have been authorized by the Board since the Company's initial public offering to September 30, 2024. From March 5, 2014 (commencement of operations) to December 31, 2015, and during the years ended December 31, 2023, 2022, 2018 and 2017, distributions represent ordinary income as the Company's 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.
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
September 30, 2023
July 26, 2023
September 15, 2023
September 29, 2023
0.40
December 31, 2023
October 26, 2023
December 15, 2023
December 29, 2023
0.40
March 31, 2024
February 27, 2024
March 14, 2024
March 29, 2024
0.40
June 30, 2024
April 24, 2024
June 14, 2024
June 28, 2024
0.40
September 30, 2024
July 31, 2024
September 16, 2024
September 30, 2024
0.30
Total cash distributions
$
15.75
_______________
(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 the Company’s initial public offering on March 5, 2014 (commencement of operations) through March 31, 2014.
(2)Represents a special distribution.
49
It is the Company’s intention to distribute all or substantially all of its taxable income earned over the course of the year. However, the Company may choose not to distribute all of its taxable income for a number of reasons, including retaining excess taxable income for investment purposes and/or to defer the payment of distributions associated with the excess taxable income for future calendar years. During the three months ended September 30, 2024 and 2023, the Company recorded $0.4 million and $0.6 million, respectively, for an excise tax accrual. During the nine months ended September 30, 2024 and 2023, the Company recorded $1.1 million and $1.0 million, respectively, for an excise tax accrual. For the three months ended September 30, 2024 and 2023, total distributions of $0.30 per share and $0.40 per share were declared and paid, respectively, and represented distributions from ordinary income. For the nine months ended September 30, 2024 and 2023, total distributions of $1.10 per share and $1.20 per share were declared and paid, respectively, and represented distributions from ordinary income. No provision for income tax was recorded in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023. As of September 30, 2024, the Company estimated it had undistributed taxable earnings from net investment income of $41.5 million, or $1.03 per share. Since March 5, 2014 (commencement of operations) to September 30, 2024, total distributions of $15.75 per share have been paid.
Note 12. Subsequent Events
The Company's management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Quarterly Report on Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three and nine months ended September 30, 2024, except as discussed below.
Income Incentive Fee Waiver
Commencing with the quarter ending March 31, 2025, until and including the quarter ending December 31, 2025, the Adviser has agreed to waive the portion of the income incentive fee payable for a quarter under the Advisory Agreement if and to the extent that, after payment of such income incentive fee, the Company’s net investment income per share for such quarter is below the Company’s quarterly distribution per share for such quarter.
Distribution
On October 30, 2024, the Board declared a $0.30 per share regular quarterly distribution payable on December 27, 2024 to stockholders of record on December 13, 2024.
Recent Portfolio Activity
From October 1, 2024 through November 5, 2024, TPC’s direct originations platform entered into $70.0 million of additional non-binding signed term sheets with venture growth stage companies. These investment opportunities for the Company are subject to due diligence, definitive documentation and investment committee approval, as well as compliance with the Adviser’s allocation policy.
50
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 our borrowing arrangements;
•the ability of our portfolio companies to obtain financing on attractive terms or at all
•the timing of cash flows, if any, from the operations of our portfolio companies; and
•the declaration, payment, amount and/or timing of future dividends or distributions.
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;
•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;
51
•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 potential for the failure of additional 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 lifespans. 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.
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) on a select basis, 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 September 30, 2024, we had 309 investments in 107 companies. Our investments included 137 debt investments, 110 warrant investments, and 62 direct equity and related investments. As of September 30, 2024, the aggregate cost and fair value of these investments were $739.0 million and $721.0 million, respectively. As of September 30, 2024, six of our portfolio companies were publicly traded. As of September 30, 2024, the 137 debt investments had an aggregate fair value of $604.7 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.
52
As of December 31, 2023, we had 321 investments in 109 companies. Our investments included 151 debt investments, 111 warrant investments, and 59 direct equity and related investments. As of December 31, 2023, the aggregate cost and fair value of these investments were $850.1 million and $802.1 million, respectively. As of December 31, 2023, seven of our portfolio companies were publicly traded. As of December 31, 2023, the 151 debt investments had an aggregate fair value of $730.3 million and a weighted average loan to enterprise value ratio at the time of underwriting of 7.9%. 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 September 30, 2024 and December 31, 2023:
September 30, 2024
Investments by Type (dollars in thousands)
Cost
Fair Value
Net Unrealized Gains (losses)
Number of Investments
Number of Companies
Debt investments
$
653,214
$
604,677
$
(48,537)
137
44
Warrant investments
26,024
40,364
14,340
110
95
Equity investments
59,722
75,933
16,211
62
48
Total Investments in Portfolio Companies
$
738,960
$
720,974
$
(17,986)
309
107
(1)
_______________
(1)Represents non-duplicative number of companies.
December 31, 2023
Investments by Type (dollars in thousands)
Cost
Fair Value
Net Unrealized Gains (losses)
Number of Investments
Number of Companies
Debt investments
$
780,172
$
730,295
$
(49,877)
151
49
Warrant investments
27,561
30,055
2,494
111
97
Equity investments
42,409
41,795
(614)
59
46
Total Investments in Portfolio Companies
$
850,142
$
802,145
$
(47,997)
321
109
(1)
_______________
(1)Represents non-duplicative number of companies.
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The following tables show the fair value of the portfolio of investments, by industry and the percentage of the total investment portfolio, as of September 30, 2024 and December 31, 2023:
September 30, 2024
Investments in Portfolio Companies by Industry (dollars in thousands)
At Fair Value
Percentage of Total Investments
Consumer Products and Services
$
123,515
17.1
%
E-Commerce - Clothing and Accessories
113,222
15.7
Financial Institution and Services
95,799
13.3
Healthcare Technology Systems
65,016
9.0
Business Applications Software
38,682
5.4
Travel & Leisure
34,563
4.8
Other Financial Services
32,384
4.5
Business/Productivity Software
31,538
4.4
Entertainment
26,839
3.7
Shopping Facilitators
25,121
3.5
Application Software
25,092
3.5
Real Estate Services
23,217
3.2
Business Products and Services
19,128
2.7
Multimedia and Design Software
16,480
2.3
Consumer Retail
13,183
1.8
Aerospace and Defense
10,186
1.4
Financial Software
7,199
1.0
Educational/Training Software
6,355
0.9
Consumer Non-Durables
2,339
0.3
General Media and Content
2,162
0.3
E-Commerce - Personal Goods
2,067
0.3
Information Services (B2C)
2,032
0.3
Network Systems Management Software
1,962
0.3
Consumer Finance
953
0.1
Food & Drug
526
0.1
Database Software
465
0.1
Commercial Services
437
0.1
Business to Business Marketplace
178
*
Social/Platform Software
151
*
Computer Hardware
121
*
Healthcare Services
49
*
Advertising / Marketing
13
*
Medical Software and Information Services
—
*
Total portfolio company investments
$
720,974
100.0
%
_______________
*Amount represents less than 0.05% of the total portfolio investments at fair value.
54
December 31, 2023
Investments in Portfolio Companies by Industry (dollars in thousands)
At Fair Value
Percentage of Total Investments
E-Commerce - Clothing and Accessories
$
126,350
15.8
%
Consumer Products and Services
125,422
15.6
Financial Institution and Services
64,537
8.0
Healthcare Technology Systems
63,799
8.0
Business/Productivity Software
61,294
7.6
Business Applications Software
57,134
7.1
Real Estate Services
46,213
5.8
Travel & Leisure
32,776
4.1
Other Financial Services
31,092
3.9
Entertainment
30,377
3.8
Shopping Facilitators
29,196
3.6
Application Software
24,970
3.1
Business Products and Services
23,699
3.0
E-Commerce - Personal Goods
22,366
2.8
Multimedia and Design Software
20,595
2.6
Food & Drug
16,467
2.1
Aerospace and Defense
9,779
1.2
Consumer Non-Durables
4,649
0.6
General Media and Content
2,162
0.3
Information Services (B2C)
2,008
0.3
Network Systems Management Software
1,906
0.2
Consumer Retail
1,799
0.2
Consumer Finance
1,123
0.1
Financial Software
811
0.1
Database Software
465
0.1
Commercial Services
435
0.1
Educational/Training Software
209
*
Business to Business Marketplace
178
*
Social/Platform Software
151
*
Computer Hardware
121
*
Healthcare Services
49
*
Advertising / Marketing
13
*
Medical Software and Information Services
—
*
Total portfolio company investments
$
802,145
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 September 30, 2024 and December 31, 2023:
September 30, 2024
December 31, 2023
Debt Investments By Financing Product (dollars in thousands)
Fair Value
Percentage of Total Debt Investments
Fair Value
Percentage of Total Debt Investments
Growth capital loans
$
574,663
95.0
%
$
719,328
98.5
%
Revolver loans
27,257
4.5
8,240
1.1
Convertible notes
2,757
0.5
2,727
0.4
Total debt investments
$
604,677
100.0
%
$
730,295
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 8.8% and 14.5% of our debt investments at fair value as of September 30, 2024 and December 31, 2023, respectively.
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Investment Activity
During the three months ended September 30, 2024, we entered into debt commitments with two new portfolio companies and two existing portfolio companies totaling $41.0 million, funded debt investments to four portfolio companies for $33.0 million in principal value, acquired warrant investments representing $0.1 million at fair value, and made direct equity investments of $0.5 million. Debt investments funded during the three months ended September 30, 2024 carried a weighted average annualized portfolio yield of 13.4% at origination.
During the nine months ended September 30, 2024, we entered into debt commitments with five new portfolio companies and four existing portfolio companies totaling $103.0 million, funded debt investments to 10 portfolio companies for $85.2 million in principal value, acquired warrant investments representing $0.6 million at fair value, and made direct equity investments of $0.5 million. Debt investments funded during the nine months ended September 30, 2024 carried a weighted average annualized portfolio yield of 14.5% at origination.
During the three months ended September 30, 2023, we entered into debt commitments with one new portfolio company and two existing portfolio companies totaling $5.6 million, funded debt investments to five portfolio companies for $12.7 million in principal value and acquired warrant investments representing $1.3 million at fair value. Debt investments funded during the three months ended September 30, 2023 carried a weighted average annualized portfolio yield of 14.2% at origination.
During the nine months ended September 30, 2023, we entered into debt commitments with two new portfolio companies and six existing portfolio companies totaling $27.3 million, funded debt investments to 19 portfolio companies for $100.9 million in principal value, acquired warrant investments representing $1.5 million at fair value, and made direct equity investments of $0.2 million. Debt investments funded during the nine months ended September 30, 2023 carried a weighted average annualized portfolio yield of 14.7%1 at origination.
During the three months ended September 30, 2024, we received $35.7 million of principal prepayments and $4.6 million of scheduled principal amortization. During the nine months ended September 30, 2024, we received $117.8 million of principal prepayments and $39.3 million of scheduled principal amortization.
During the three months ended September 30, 2023, we received $37.3 million of principal prepayments, $15.0 million of early repayments and $20.0 million of scheduled principal amortization. During the nine months ended September 30, 2023, we received $71.0 million of principal prepayments, $18.4 million of early repayments and $38.3 million of scheduled principal amortization.
The following table shows the total portfolio investment activity for the three and nine months ended September 30, 2024 and 2023:
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
(in thousands)
2024
2023
2024
2023
Beginning portfolio at fair value
$
713,770
$
941,955
$
802,145
$
949,276
New debt investments, net(1)
32,672
12,428
83,555
98,967
Scheduled principal amortization
(4,618)
(20,031)
(39,314)
(38,288)
Principal prepayments and early repayments
(35,739)
(52,250)
(117,820)
(89,400)
Net amortization and accretion of premiums and discounts and end-of-term payments
756
38
3,343
9,528
Payment-in-kind coupon
4,224
3,265
11,833
7,946
New warrant investments
124
1,334
560
1,502
New equity investments
916
384
1,716
1,320
Proceeds from dispositions of investments
—
—
(22,142)
(3,173)
Net realized gains (losses) on investments
(5,019)
(25,545)
(32,913)
(23,682)
Net change in unrealized gains (losses) on investments
13,888
8,600
30,011
(43,818)
Ending portfolio at fair value
$
720,974
$
870,178
$
720,974
$
870,178
_______________
(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.
1This 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.
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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 nine months ended September 30, 2024 and 2023:
Commitments and Fundings (in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Debt Commitments
New portfolio companies
$
20,600
$
5,000
$
47,100
$
10,000
Existing portfolio companies
20,420
577
55,920
17,320
Total(1)
$
41,020
$
5,577
$
103,020
$
27,320
Funded Debt Investments
$
33,033
$
12,706
$
85,207
$
100,863
Equity Investments
$
500
$
—
$
500
$
202
Non-Binding Term Sheets
$
93,380
$
58,118
$
412,199
$
370,856
_______________
(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 September 30, 2024 and December 31, 2023, 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 September 30, 2024 and December 31, 2023:
September 30, 2024
December 31, 2023
Credit Category (dollars in thousands)
Fair Value
Percentage of Total Debt Investments
Number of Portfolio Companies
Fair Value
Percentage of Total Debt Investments
Number of Portfolio Companies
Clear (1)
$
72,188
12.0
%
4
$
100,309
13.8
%
7
White (2)
392,092
64.8
29
471,195
64.5
28
Yellow (3)
107,822
17.8
6
117,792
16.1
8
Orange (4)
32,519
5.4
4
40,091
5.5
5
Red (5)
56
—
1
908
0.1
1
$
604,677
100.0
%
44
$
730,295
100.0
%
49
As of September 30, 2024 and December 31, 2023, the weighted average investment ranking of our debt investment portfolio was 2.17 and 2.14, respectively. During the three months ended September 30, 2024, portfolio company credit category changes, excluding fundings and repayments, consisted of the following: one portfolio company with a principal balance of $20.0 million was upgraded from White (2) to Clear (1), one portfolio company with a principal balance of $5.9 million was upgraded from Yellow (3) to White (2), one portfolio company with a principal balance of $26.7 million was upgraded from Orange (4) to Yellow (3), and one portfolio company with a principal balance of $10.0 million was downgraded from Clear (1) to White (2).
57
As of September 30, 2024, we had investments in three portfolio companies which were on non-accrual status, with an aggregate cost and fair value of $28.9 million and $17.9 million, respectively. As of December 31, 2023, we had investments in five portfolio companies which were on non-accrual status, with an aggregate cost and fair value of $41.7 million and $29.0 million, respectively.
Results of Operations
Comparison of operating results for the three and nine months ended September 30, 2024 and 2023
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 September 30, 2024, our net increase in net assets resulting from operations was $22.6 million, which was comprised of $13.8 million of net investment income and $8.8 million of net realized and unrealized gains. For the three months ended September 30, 2023, our net increase in net assets resulting from operations was $2.1 million, which was comprised of $19.1 million of net investment income and $17.0 million of net realized and unrealized losses. On a per share basis for the three months ended September 30, 2024, net investment income was $0.35 per share and the net increase in net assets from operations was $0.57 per share, as compared to net investment income of $0.54 per share and a net increase in net assets from operations of $0.06 per share for the three months ended September 30, 2023.
For the nine months ended September 30, 2024, our net increase in net assets resulting from operations was $39.2 million, which was comprised of $41.9 million of net investment income and $2.7 million of net realized and unrealized losses. For the nine months ended September 30, 2023, our net decrease in net assets resulting from operations was $11.0 million, which was comprised of $56.5 million of net investment income and $67.5 million of net realized and unrealized losses. On a per share basis for the nine months ended September 30, 2024, net investment income was $1.08 per share and the net increase in net assets from operations was $1.01 per share, as compared to net investment income of $1.59 per share and a net decrease in net assets from operations of $0.31 per share for the nine months ended September 30, 2023.
Investment Income
For the three months ended September 30, 2024, total investment and other income was $26.5 million as compared to $35.7 million for the three months ended September 30, 2023. The decrease in total investment and other income for the three months ended September 30, 2024, compared to the 2023 period, is primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio.
For the nine months ended September 30, 2024, total investment and other income was $82.9 million as compared to $104.5 million for the nine months ended September 30, 2023. The decrease in total investment and other income for the nine months ended September 30, 2024, compared to the 2023 period, is primarily due to a lower weighted average principal amount outstanding on our income-bearing debt investment portfolio.
For the three months ended September 30, 2024, we recognized $0.6 million in other income consisting of $0.1 million due to the termination or expiration of unfunded commitments and $0.4 million from the realization of certain fees paid and accrued from portfolio companies. For the three months ended September 30, 2023, we recognized $1.7 million in other income consisting of $0.7 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 nine months ended September 30, 2024, we recognized $1.8 million in other income consisting of $0.4 million due to the termination or expiration of unfunded commitments and $1.4 million from the realization of certain fees paid and accrued from portfolio companies. For the nine months ended September 30, 2023, we recognized $3.7 million in other income consisting of $1.7 million due to the termination or expiration of unfunded commitments and $2.0 million from the realization of certain fees paid and accrued from portfolio companies and other income related to prepayment activity.
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 would increase over time to the extent that our investment portfolio grows. However, we anticipate operating expenses, as a percentage of total assets and net assets, would generally decrease over time to the extent that our portfolio and capital base expand. We expect that base management and income incentive fees would increase to the extent that we grow our asset base and our earnings. The capital gains incentive fee depends 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 if interest rates increase. We generally expect expenses under the administration agreement and general and administrative expenses to increase over time to the extent that our investment portfolio grows, to meet the additional requirements associated with servicing a larger portfolio.
58
For the three months ended September 30, 2024, total operating expenses were $12.7 million as compared to $16.6 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, total operating expenses were $41.0 million as compared to $48.0 million for the nine months ended September 30, 2023.
Base management fees for the three months ended September 30, 2024 and 2023 totaled $3.4 million and $4.6 million, respectively. Base management fees for the nine months ended September 30, 2024 and 2023 totaled $11.6 million and $13.4 million, respectively. Base management fees decreased during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, due primarily to decreases 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 nine months ended September 30, 2024 or the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2024, our income incentive fee was reduced by $2.8 million and $8.4 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 of $2.8 million and $8.4 million, respectively. For the three and nine months ended September 30, 2023 our income incentive fee was reduced by $3.8 million and $11.3 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 of $3.8 million and $11.3 million, respectively.
There were no capital gains incentive fee expenses for the nine months ended September 30, 2024 and 2023.
Interest expense and amortization of fees totaled $7.1 million and $9.3 million for the three months ended September 30, 2024 and 2023, respectively. The decrease during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, is primarily due to a lower weighted-average outstanding principal balance under the Credit Facility. Interest expense and amortization of fees totaled $22.9 million and $28.5 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, is primarily due to a lower weighted-average outstanding principal balance under the Credit Facility.
Administration Agreement and general and administrative expenses totaled $2.2 million and $2.7 million for the three months ended September 30, 2024 and 2023, respectively, which includes $0.4 million and $0.6 million of excise tax accruals, respectively. The decrease during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023 is primarily due to a reduction in legal fee expenses and excise tax accruals. Administration Agreement and general and administrative expenses totaled $6.6 million and $6.1 million for the nine months ended September 30, 2024 and 2023, respectively, which includes $1.1 million and $1.0 million of excise tax accruals, respectively. The increase for the 2024 periods, as compared to the 2023 periods, was primarily due to higher excise tax accruals and other professional fee expenses.
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 September 30, 2024, we recognized net realized losses on investments of $5.0 million, resulting primarily from the acquisition of one portfolio company. During the nine months ended September 30, 2024, we recognized net realized losses on investments of $32.7 million, consisting primarily of $33.6 million of net realized losses on debt investments from the write-off and restructures of investments, partially offset by $0.9 million of net warrant and equity gains from the sale and dispositions of investments.
During the three months ended September 30, 2023, we recognized net realized losses on investments of $25.6 million, resulting primarily from the write-off of a debt investment. During the nine months ended September 30, 2023, we recognized net realized losses on investments of $23.7 million.
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 gains during the three months ended September 30, 2024 was $13.9 million, consisting of $9.4 million of net unrealized gains on the existing warrant and equity portfolio resulting from fair value adjustments and $5.2 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $0.7 million of net unrealized losses on the debt investment portfolio resulting from fair value adjustments. Net change in unrealized gains during the nine months ended September 30, 2024 was $30.0 million, consisting of $27.5 million of net unrealized gains on the warrant and equity portfolio resulting from fair value adjustments and $12.7 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $10.1 of net unrealized losses on the debt investment portfolio resulting from fair value adjustments.
Net change in unrealized gains during the three months ended September 30, 2023 was $8.6 million, consisting of $17.6 million of net unrealized gains from the reversal of previously recorded unrealized losses from investments realized during the period, offset by $6.2 million of net unrealized losses on the existing debt investment portfolio and $2.8 million of net unrealized losses on the warrant and equity portfolio resulting from fair value adjustments. Net change in unrealized losses during the nine months ended September 30, 2023 was $43.8 million, consisting of $33.0 million of net unrealized losses on the debt investment portfolio and $10.8 million of net unrealized losses on the warrant and equity portfolio resulting from fair value 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.
59
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.
The following table shows the weighted average annualized portfolio yield on our debt investments, 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)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Weighted average portfolio yield on debt investments(2)
15.7
%
15.1
%
15.6
%
14.8
%
Coupon income
12.7
%
11.6
%
12.2
%
11.7
%
Accretion of discount
0.9
%
0.9
%
0.9
%
0.9
%
Accretion of end-of-term payments
1.3
%
1.6
%
1.4
%
1.7
%
Impact of prepayments during the period
0.8
%
1.0
%
1.1
%
0.5
%
_____________
(1)Weighted average portfolio yields on 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. The calculation of weighted average portfolio yields on debt investments excludes any non-income producing debt investments, but includes debt investments on non-accrual status. The weighted average yields reported for these periods are annualized and reflect the weighted average yields to maturities.
(2)The weighted average portfolio yields on 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 September 30, 2024 and 2023, our total return during the periods based on the change in NAV plus distributions reinvested as of the respective distribution dates was 7.6% and 0.7%, respectively, and our total return during the periods based on the change in stock price plus distributions reinvested as of the respective distribution dates was (8.1)% and (7.6)%, respectively. For the nine months ended September 30, 2024 and 2023, our total return during the period based on the change in NAV plus distributions reinvested as of the respective distribution dates was 13.5% and (2.7)%, 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 (25.3)% and 11.8%, respectively.
The table below shows our return on average total assets and return on average NAV for the three and nine months ended September 30, 2024 and 2023:
Returns on Net Asset Value and Total Assets (dollars in thousands)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2024
2023
2024
2023
Net investment income
$
13,785
$
19,104
$
41,912
$
56,520
Net increase (decrease) in net assets
$
22,634
$
2,148
$
39,230
$
(11,028)
Average net asset value(1)
$
355,908
$
379,074
$
350,890
$
404,725
Average total assets(1)
$
824,276
$
968,997
$
816,697
$
1,014,301
Net investment income to average net asset value(2)
15.4
%
20.0
%
16.0
%
18.7
%
Net increase (decrease) in net assets to average net asset value(2)
25.3
%
2.2
%
14.9
%
(3.6)
%
Net investment income to average total assets(2)
6.7
%
7.8
%
6.9
%
7.5
%
Net increase (decrease) in net assets to average total assets(2)
10.9
%
0.9
%
6.4
%
(1.5)
%
_______________
(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.
60
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, 2023 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, 2023 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 September 30, 2024, our investment portfolio, valued at fair value in accordance with our Board-approved valuation policy, represented 92.6% of our total assets, as compared to 81.9% of our total assets as of December 31, 2023.
See “Note 2. Significant Accounting Policies” and “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 6, 2024 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, as may be extended or renewed from time to time, and our anticipated cash flows from operations, including from net cash proceeds from our Current ATM Program (described below), as may be extended or renewed from time to time, 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.
From time to time, including at or near the end of each fiscal quarter, we consider using various temporary investment strategies for our business. One strategy includes taking proactive steps by utilizing cash equivalents as temporary assets with the objective of enhancing our investment flexibility pursuant to Section 55 of the 1940 Act. More specifically, from time to time we may purchase U.S. Treasury bills or other high-quality, short-term debt securities at or near the end of the quarter and typically close out the position on a net cash basis subsequent to quarter end. We may also utilize repurchase agreements or other balance sheet transactions, including drawing down on the Credit Facility, as deemed appropriate.
Cash Flows
During the nine months ended September 30, 2024, net cash provided by operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $106.3 million, and net cash used in financing activities was $229.3 million due primarily to net repayments under the Credit Facility of $205.0 million and $40.7 million in distributions paid, partially offset by $19.4 million from the issuance of common stock under the Current ATM Program and the Prior ATM Program. As of September 30, 2024, cash and cash equivalents, including restricted cash, was $48.6 million.
61
During the nine months ended September 30, 2023, net cash provided by operating activities, consisting primarily of purchases, sales and repayments of investments and the items described in “Results of Operations,” was $63.0 million, and net cash provided by financing activities was $0.2 million due primarily to net borrowings under the Credit Facility of $35.0 million and $6.2 million from the issuance of common stock under the Prior ATM Program, partially offset by $40.8 million in distributions paid. As of September 30, 2023, cash and cash equivalents, including restricted cash, was $122.5 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 Current ATM Program, as may be extended or renewed, 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 September 30, 2024, we had $300.0 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 $400.0 million under certain circumstances. The revolving period under the Credit Facility is scheduled to expire on November 30, 2025, and the scheduled maturity date of the Credit Facility is May 30, 2027 (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 3.20% if facility utilization is greater than or equal to 75%, 3.35% if utilization is greater than or equal to 50% but less than 75%, 3.50% 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 September 30, 2024 and December 31, 2023, we had outstanding borrowings under the Credit Facility of $10.0 million and $215.0 million, respectively, excluding deferred credit facility costs of $4.6 million and $2.7 million, respectively, which is included in the consolidated statements of assets and liabilities. We had $290.0 million and $135.0 million of remaining capacity on our Credit Facility as of September 30, 2024 and December 31, 2023, 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 September 30, 2024 and December 31, 2023, we have recorded in the consolidated statements of assets and liabilities our liability for the 2025 Notes, net of deferred issuance costs, of $69.9 million and $69.7 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 September 30, 2024 and December 31, 2023, we have recorded in the consolidated statements of assets and liabilities our liability for the 2026 Notes, net of deferred issuance costs, of $199.4 million and $199.0 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 September 30, 2024 and December 31, 2023, we have recorded in the consolidated statements of assets and liabilities our liability for the 2027 Notes, net of deferred issuance costs, of $124.3 million and $124.1 million, respectively. See “Note 6. Borrowings” in the notes to the consolidated financial statements for more information regarding the 2027 Notes.
62
ATM Programs
On May 2, 2024, we entered into the 2024 Sales Agreement with the Adviser, the Administrator and the Sales Agent, providing for the issuance from time to time in the Current ATM Program of up to an aggregate of $75.0 million in shares of our common stock. Subject to the terms of the 2024 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. Concurrently upon entry into the 2024 Sales Agreement, we, the Adviser, the Administrator and the Sales Agent agreed to the termination of the 2022 Sales Agreement.
As of September 30, 2024, $56.5 million in shares remained available for sale under the Current 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 September 30, 2024, our asset coverage for borrowed amounts was 190%.
Contractual Obligations
The following table shows a summary of our payment obligations for repayment of debt as of September 30, 2024:
Payments Due By Period (in thousands)
September 30, 2024
Total
Less than 1 year
1-3 years
3-5 years
More than 5 years
Credit Facility
$
10,000
$
—
$
10,000
$
—
$
—
2025 Notes
70,000
70,000
—
—
—
2026 Notes
200,000
—
200,000
—
—
2027 Notes
125,000
—
125,000
—
—
Total
$
405,000
$
70,000
$
335,000
$
—
$
—
63
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 September 30, 2024 and December 31, 2023, our unfunded commitments totaled $74.0 million and $118.1 million, respectively, of which $5.0 million and $29.2 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 September 30, 2024 and December 31, 2023:
Unfunded Commitments(1)
(in thousands)
September 30, 2024
December 31, 2023
Overtime Sports Inc.
$
22,858
$
22,858
ActiveHours Inc.
15,000
15,000
Cresta Intelligence Inc.
10,000
—
Corelight, Inc.
9,000
20,000
Project Affinity, Inc.
5,500
—
Panorama Education
4,280
—
Hover, Inc.
4,000
—
Ocrolus, Inc.
2,856
—
FlashParking, Inc.
500
—
McN Investments Ltd.
—
15,000
Savage X, Inc.
—
12,500
Frubana Inc.
—
8,790
Minted Inc.
—
8,500
NewStore Inc.
—
5,000
Foodology, Inc.
—
3,720
Infinite Athlete, Inc. (f/k/a Tempus Ex Machina, Inc.)
—
3,000
Jokr S.a.r.l.
—
1,499
Substack Inc.
—
1,000
Pair EyeWear, Inc.
—
1,000
Forum Brands Inc.
—
244
Total
$
73,994
$
118,111
_____________
(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 September 30, 2024 and December 31, 2023:
Unfunded Commitments(1)
(in thousands)
September 30, 2024
December 31, 2023
Dependent on milestones
$
5,000
$
29,220
Expiring during:
2024
$
—
$
86,754
2025
73,214
31,357
2026
780
—
Unfunded commitments
$
73,994
$
118,111
_______________
(1)Does not include backlog of potential future commitments.
As of September 30, 2024, our unfunded commitments to nine companies totaled $74.0 million. During the three and nine months ended September 30, 2024, $5.4 million and $61.9 million in unfunded commitments expired or were terminated, respectively.
As of December 31, 2023, our unfunded commitments to 14 companies totaled $118.1 million. During the year ended December 31, 2023, $112.2 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.
64
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 September 30, 2024 and December 31, 2023, the fair value for these unfunded commitments totaled $0.7 million and $1.6 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, 2023 and 2022, 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 September 30, 2024. From March 5, 2014 (commencement of operations) to December 31, 2015, and during the years ended December 31, 2023, 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.
65
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
September 30, 2023
July 26, 2023
September 15, 2023
September 29, 2023
0.40
December 31, 2023
October 26, 2023
December 15, 2023
December 29, 2023
0.40
March 31, 2024
February 27, 2024
March 14, 2024
March 29, 2024
0.40
June 30, 2024
April 24, 2024
June 14, 2024
June 28, 2024
0.40
September 30, 2024
July 31, 2024
September 16, 2024
September 30, 2024
0.30
Total cash distributions
$
15.75
_____________
(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 September 30, 2024, distributions paid were comprised of interest-sourced distributions (qualified interest income) in an amount equal to 70.5% of total distributions paid. As of September 30, 2024, we had estimated undistributed taxable earnings from net investment income of $41.5 million, or $1.03 per share.
66
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This change is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures and providing new disclosure requirements for entities with a single reportable segment, among other new disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. We are currently evaluating the impact of adopting this guidance with respect to the consolidated financial statements and disclosures.
Recent Developments
Income Incentive Fee Waiver
Commencing with the quarter ending March 31, 2025, until and including the quarter ending December 31, 2025, the Adviser has agreed to waive the portion of the income incentive fee payable for a quarter under the Advisory Agreement if and to the extent that, after payment of such income incentive fee, our net investment income per share for such quarter is below the quarterly distribution per share for such quarter.
Distribution
On October 30, 2024, the Board declared a $0.30 per share regular quarterly distribution payable on December 27, 2024 to stockholders of record on December 13, 2024.
Recent Portfolio Activity
From October 1, 2024 through November 5, 2024, TPC’s direct originations platform entered into $70.0 million of additional non-binding signed term sheets with venture growth stage companies. These investment opportunities for us are subject to due diligence, definitive documentation and investment committee approval, as well as compliance with the Adviser’s allocation policy.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
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.
67
As of September 30, 2024, approximately 60.0%, or $364.1 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 remains 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 September 30, 2024, our floating rate borrowings totaled $10.0 million, which represented 2.5% of our outstanding debt. As of September 30, 2024, 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 September 30, 2024 was 8.00%, 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 September 30, 2024. However, because current interest rates exceed the SOFR interest-rate floor under our Credit Facility as of September 30, 2024, our interest expense on floating rate borrowings will increase if 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 September 30, 2024 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
$
10,649
$
(300)
$
10,349
Up 200 basis points
$
7,055
$
(200)
$
6,855
Up 100 basis points
$
3,462
$
(100)
$
3,362
Up 50 basis points
$
1,665
$
(50)
$
1,615
Down 50 basis points
$
(1,654)
$
50
$
(1,604)
Down 100 basis points
$
(3,209)
$
100
$
(3,109)
Down 200 basis points
$
(5,860)
$
200
$
(5,660)
Down 300 basis points
$
(7,796)
$
300
$
(7,496)
This analysis is indicative of the potential impact on our investment income as of September 30, 2024, 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 September 30, 2024 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 September 30, 2024, 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 September 30, 2024, 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.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act 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 Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Interim Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective. It should be noted that any system of controls, however well-designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
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 September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In June 2023, a shareholder filed a putative securities class action complaint against the Company and certain of its directors and officers. Case No. 3:23-cv-02980 (N.D. Cal.). The complaint alleged violations of federal securities laws during a class period between March 4, 2020 and May 1, 2023. As relief, the plaintiff sought, among other things, unspecified damages and fees and costs. The Court appointed a lead plaintiff in September 2023, and an amended complaint was filed on December 5, 2023. Defendants filed a motion to dismiss on January 10, 2024, and the Court held a hearing on the motion on February 20, 2024. The Court granted the motion to dismiss without leave to amend on August 7, 2024, and entered final judgment for defendants and against the plaintiff on September 19, 2024.
In December 2023, a shareholder filed a derivative complaint against certain of the Company’s officers and directors, with the Company as a nominal defendant. Case No. 4:23-cv-06557 (N.D. Cal.). The complaint alleged breaches of fiduciary duty and related state and federal claims. As relief, the plaintiff sought, among other things, unspecified damages and fees and costs, and corporate governance reforms. In January 2024, a shareholder filed a substantially similar derivative complaint. Case No. 4:24-cv-00245 (N.D. Cal.). The cases were consolidated on March 1, 2024. Lead Case No. 4:23-cv-06557 (N.D. Cal.). On September 17, 2024, the plaintiffs stipulated to dismiss the case without prejudice, and the Court dismissed the case.
Item 1A. Risk Factors
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, 2023 (filed with the SEC on March 6, 2024) which could materially affect our business, financial condition or operating results.
The amount and frequency of any distributions we may make is uncertain. You may not receive distributions or our distributions may not grow over time.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution, including offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to us on account of equity investments in portfolio companies and fee and expense reimbursement or fee waivers from the Adviser, if any. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. Any distributions made from sources other than cash flow from operations or relying on fee waivers or expense reimbursement, if any, from the Adviser are not based on our investment performance, and can be sustained only if we achieve positive investment performance in future periods and/or the Adviser continues to waive such fees or make such expense reimbursements, if any. The extent to which we pay distributions from sources other than cash flow from operations will depend on various factors, including the performance of our investments, the level of participation in our distribution reinvestment plan and how quickly we invest the proceeds from any offering. Stockholders should also understand that any future repayments to the Adviser, if applicable, will reduce the distributions that stockholders would otherwise receive. There can be no assurance that we will achieve such performance in order to sustain our distributions, or be able to pay distributions at all. Except with respect to its agreement to waive all or a portion of the quarterly income incentive fee under certain circumstances through the quarter ending December 31, 2025, the Adviser has no obligation to waive fees.
Our ability to pay distributions might be materially and adversely affected by the impact of one or more of the risks described in our SEC filings, including herein and in our Annual Report on Form 10‑K for the year ended December 31, 2023 (filed with the SEC on March 6, 2024). Due to the asset coverage test applicable to us under the 1940 Act as a BDC, we may be limited in our ability to make distributions. All distributions will be made at the discretion of our Board and will depend on our earnings, financial condition, maintenance of RIC status and covenants under our borrowing arrangements, compliance with applicable BDC, SBA regulations (when and if applicable) and such other factors as our Board may deem relevant from time to time. We cannot assure you that we will make distributions to our stockholders in the future.
70
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We did not sell any equity securities during the period covered by this Quarterly Report on Form 10-Q that were not registered under the Securities Act. Similarly, we did not repurchase any shares of our equity securities during the quarter ended September 30, 2024.
Dividend Reinvestment Plan
During the three months ended September 30, 2024, we issued 96,312 shares of common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements under the Securities Act. The cash paid for shares of common stock issued under our dividend reinvestment plan during the three months ended September 30, 2024 was $0.6 million.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Income Incentive Fee Waiver
Commencing with the quarter ending March 31, 2025, until and including the quarter ending December 31, 2025, the Adviser has agreed to waive the portion of the income incentive fee payable for a quarter under the Advisory Agreement if and to the extent that, after payment of such income incentive fee, the Company’s net investment income per share for such quarter is below the Company’s quarterly distribution per share for such quarter.
Rule 10b5-1 Trading Plans
During the fiscal quarter ended September 30, 2024, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Fees and Expenses
The information in the following table is being provided to update, as of September 30, 2024, certain information in the Company’s effective shelf registration statement on Form N-2 (File No. 333-277680), declared effective by the SEC on April 18, 2024, as supplemented by the prospectus supplement relating to our Current ATM Program. The information is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. Except where the context suggests otherwise, whenever this Quarterly Report on Form 10-Q, or any filing under the Securities Act into which this Quarterly Report on Form 10-Q is incorporated by reference, contains a reference to fees or expenses paid by “you,” “us” or “the Company,” or that “we” will pay fees or expenses, our stockholders will indirectly bear such fees or expenses as investors in us.
Except as noted below, the following annualized percentages were calculated based on actual expenses incurred in the nine months ended September 30, 2024 and net assets as of September 30, 2024, and do not include events occurring subsequent thereto. The table and examples below include all fees and expenses of our consolidated subsidiaries.
Stockholder Transaction Expenses:
Sales load or other commission payable by us (as a percentage of offering price)
—
%
(1)
Offering expenses (as a percentage of offering price)
—
%
(2)
Dividend reinvestment plan expenses
—
%
(3)
Total Stockholder Transaction Expenses (as a percentage of offering price)
—
%
Annual Expenses (as a percentage of net assets attributable to common stock):
Base management fee payable under the Advisory Agreement
4.24
%
(4)
Incentive fee payable under the Advisory Agreement (20% of net investment income and realized capital gains)
3.07
%
(5)
Interest payments on borrowed funds
8.38
%
(6)
Other expenses
2.41
%
(7)
Total annual expenses
18.10
%
__________
(1)The amounts set forth in this table do not reflect the impact of any sales load, sales commission or other offering expenses borne by us and our stockholders. The maximum agent commission with respect to the shares of our common stock sold by us in the Current ATM Program is 2.0% of gross proceeds, with the exact amount of such compensation to be mutually agreed upon by us and the Sales Agent from time to time. In the event that securities are sold to or through underwriters or agents, a corresponding prospectus or prospectus supplement will disclose the applicable sales load or commission.
(2)The prospectus supplement corresponding to each offering will disclose the applicable estimated amount of offering expenses, the offering price and the offering expenses borne by us as a percentage of the offering price.
(3)The expenses associated with the administration of the dividend reinvestment plan are included in “Other expenses.” The plan administrator’s fees will be paid by us. We will not charge any brokerage charges or other charges to stockholders who participate in the plan. However, your own broker may impose brokerage charges in connection with your participation in the plan.
(4)Our base management fee, payable quarterly in arrears, is calculated at an annual rate of 1.75% of our average adjusted gross assets, including assets purchased with borrowed amounts and other forms of leverage. See “Item 1. Business-Management Agreements-Investment Advisory Agreement” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for more information.
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(5)Assumes that annual incentive fees earned by our Adviser remain consistent with the incentive fees that would have been earned by our Adviser (if not for the cumulative “catch-up” provision explained below) for the nine months ended September 30, 2024 adjusted for any equity issuances. The incentive fee consists of two components, investment income and capital gains, which are largely independent of each other, with the result that one component may be payable even if the other is not payable. Under the investment income component, we pay our Adviser each quarter 20.0% of the amount by which our pre-incentive fee net investment income for the quarter exceeds a hurdle rate of 2.0% (which is 8.0% annualized) of our net assets at the end of the immediately preceding calendar quarter, subject to a “catch-up” provision pursuant to which our Adviser receives all of such income in excess of the 2.0% level but less than 2.5% and subject to a total return requirement. The effect of the “catch-up” provision is that, subject to the total return provision discussed below, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, our Adviser receives 20.0% of our pre-incentive fee net investment income as if the 2.0% hurdle rate did not apply. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of our pre-incentive fee net investment income is payable except to the extent that 20.0% of the cumulative net increase in net assets resulting from operations since March 5, 2014 exceeds the cumulative incentive fees accrued and/or paid since March 5, 2014. In other words, any investment income incentive fee that is payable in a calendar quarter will be limited to the lesser of (i) 20.0% of the amount by which our pre-incentive fee net investment income for such calendar quarter exceeds the 2.0% hurdle rate, subject to the “catch-up” provision and (ii) (x) 20.0% of the cumulative net increase in net assets resulting from operations since March 5, 2014 minus (y) the cumulative incentive fees accrued and/or paid since March 5, 2014. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum of our pre-incentive fee net investment income, realized gains and losses and unrealized appreciation and depreciation since March 5, 2014. Under the capital gains component of the incentive fee, we pay our Adviser at the end of each calendar year 20.0% of our aggregate cumulative realized capital gains from inception through the end of that year, computed net of our aggregate cumulative realized capital losses and our aggregate cumulative unrealized depreciation through the end of such year, less the aggregate amount of any previously paid capital gain incentive fees. For the foregoing purpose, our “aggregate cumulative realized capital gains” does not include any unrealized appreciation. It should be noted that we accrue an incentive fee for accounting purposes taking into account any unrealized appreciation in accordance with GAAP. The capital gains component of the incentive fee is not subject to any minimum return to stockholders.
(6)“Interest payments on borrowed funds” represent our estimated annual interest payment, fees and credit facility expenses and are based on results of operations for the nine months ended September 30, 2024 (annualized), including with respect to the Credit Facility, the 2025 Notes, the 2026 Notes and the 2027 Notes. The costs associated with any outstanding indebtedness are indirectly borne by our common stockholders. The amount of leverage we employ at any particular time will depend on, among other things, the Board’s and our Adviser’s assessment of the market and other factors at the time at any proposed borrowing. We may also issue preferred stock, subject to our compliance with applicable requirements under the 1940 Act.
(7)“Other expenses” represent our estimated amounts for the current fiscal year, which are based upon the results of our operations for the nine months ended September 30, 2024, including payments under the Administration Agreement based on our allocable portion of overhead and other expenses incurred by our Administrator.
Example
The following example demonstrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage and that our annual operating expenses would remain at the levels set forth in the table above.
1 Year
3 Years
5 Years
10 Years
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return (1)
$
150
$
407
$
615
$
978
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return entirely from realized capital gains
$
160
$
430
$
643
$
1,002
__________________
(1) Assumes no return from net realized capital gains or net unrealized capital appreciation.
While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. As noted, the example includes the realized capital gains fee from the Advisory Agreement but does not include the income incentive fee under the Advisory Agreement, which, assuming a 5% annual return, would either not be payable or have an immaterial impact on the expense amounts shown above. If we achieve sufficient returns on our investments to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher.
Further, while the example assumes reinvestment of all distributions at NAV, participants in our dividend reinvestment plan will receive a number of shares of our common stock determined by dividing the total dollar amount of the distribution payable to a participant by (a) 95% of the market price per share of our common stock at the close of trading on the payment date fixed by the Board in the event that newly issued shares of our common stock are used to implement the dividend reinvestment plan, or (b) the average purchase price of all shares of common stock purchased by the plan administrator in the event that shares are purchased in the open market to implement the requirements of the dividend reinvestment plan, which may be at, above or below NAV.
This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.
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Price Range of Common Stock and Distributions
Our common stock is traded on the NYSE under the symbol “TPVG.” The following table shows, for each fiscal quarter during the last two full fiscal years and the current fiscal year to date, the net asset value (“NAV”) per share of our common stock, the high and low closing sales prices for our common stock, such sales prices as a percentage of NAV per share and quarterly distributions per share.
Closing Sales Price(2)
Premium/(Discount) of High Sales Price to NAV(3)
Premium/(Discount) of Low Sales Price to NAV(3)
Declared Distributions
Period
NAV(1)
High
Low
Fourth Quarter of 2024 (through November 5, 2024)
*
$
6.90
$
6.50
*
*
$
0.30
Third Quarter of 2024
$
9.10
$
8.99
$
6.86
(1.2)
%
(24.6)
%
$
0.30
Second Quarter of 2024
$
8.83
$
9.63
$
7.97
9.1
%
(9.7)
%
$
0.40
First Quarter of 2024
$
9.02
$
11.48
$
9.01
27.3
%
(0.1)
%
$
0.40
Fourth Quarter of 2023
$
9.21
$
10.99
$
9.20
19.3
%
(0.1)
%
$
0.40
Third Quarter of 2023
$
10.37
$
12.62
$
10.12
21.7
%
(2.4)
%
$
0.40
Second Quarter of 2023
$
10.70
$
12.27
$
9.81
14.7
%
(8.3)
%
$
0.40
First Quarter of 2023
$
11.69
$
12.72
$
10.75
8.8
%
(8.0)
%
$
0.40
Fourth Quarter of 2022
$
11.88
$
13.31
$
10.43
12.0
%
(12.2)
%
$
0.47
(4)
Third Quarter of 2022
$
12.69
$
14.47
$
10.46
14.0
%
(17.6)
%
$
0.36
Second Quarter of 2022
$
13.01
$
17.88
$
12.17
37.4
%
(6.5)
%
$
0.36
First Quarter of 2022
$
13.84
$
18.07
$
15.80
30.6
%
14.2
%
$
0.36
_______________
(1)NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.
(2)Closing sales price as provided by the NYSE.
(3)Calculated as of the respective high or low closing sales price divided by the quarter-end NAV and subtracting 1.
(4)Includes a $0.10 per share special distribution.
* Not determinable at the time of filing.
On November 5, 2024, the reported closing sales price of our common stock was $6.52 per share. As of November 5, 2024, we had 7 stockholders of record, which did not include stockholders for whom shares are held in “nominee” or “street name”.
Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. The possibility that shares of our common stock will trade at a discount from NAV or at premiums that are unsustainable over the long term are separate and distinct from the risk that our NAV will decrease. It is not possible to predict whether the shares offered hereby will trade at, above or below NAV.
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Item 6. Exhibits
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the United States Securities and Exchange Commission:
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.(*)
Cover Page Interactive Data File (embedded within the Inline XBRL document)
(1)Incorporated by reference to Exhibit (a) to the Registrant’s Pre-Effective Amendment No. 1 to TriplePoint Venture Growth BDC Corp.’s registration statement on Form N-2 (File No. 333-191871) filed on January 22, 2014.
(2)Incorporated by reference to Exhibit (b) to the Registrant’s Pre-Effective Amendment No. 1 to TriplePoint Venture Growth BDC Corp.’s registration statement on Form N-2 (File No. 333-191871) filed on January 22, 2014.
(3)Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 814-01044) filed on August 7, 2024.
(*) Filed herewith.
(**) Furnished herewith.
(***) Exhibits and/or schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and/or schedules to the SEC upon its request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TriplePoint Venture Growth BDC Corp.
Date: November 6, 2024
By:
/s/ James P. Labe
James P. Labe
Chief Executive Officer and Chairman of the Board of Directors