☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Maryland
|
86-2872887
|
|
(State or other jurisdiction of
|
||
incorporation or organization)
|
(IRS Employer Identification No.)
|
|
600 Madison Avenue, Suite 1800
|
||
New York, NY
|
||
10022
|
||
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, par value $0.01 per share
|
SSIC
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐ |
Non-accelerated filer
|
☒ |
Smaller reporting company
|
☐ |
Emerging growth company
|
☒ |
PAGE
NO.
|
||
PART I
|
FINANCIAL INFORMATION
|
|
Item 1
|
3
|
|
3
|
||
4
|
||
5
|
||
7
|
||
8
|
||
9
|
||
Item 2
|
19
|
|
Item 3
|
28
|
|
Item 4
|
29
|
|
PART II
|
OTHER INFORMATION
|
|
Item 1
|
29
|
|
Item 1A
|
29
|
|
Item 2
|
29
|
|
Item 3
|
29
|
|
Item 4
|
29
|
|
Item 5
|
29
|
|
Item 6
|
29
|
|
31 |
Item 1. |
Financial Statements
|
September 30,
2022
|
March 31,
2022
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Investments at fair value:
|
||||||||
Non-control/non-affiliate investments at fair value (amortized cost of $24,467,466 and $0, respectively)
|
$
|
24,467,466
|
$
|
-
|
||||
Cash & cash equivalents
|
61,055,847
|
84,766,060
|
||||||
Prepaid expenses
|
119,787
|
256,512
|
||||||
Interest receivable
|
252,547
|
9,215
|
||||||
Total assets
|
$
|
85,895,647
|
$
|
85,031,787
|
||||
LIABILITIES
|
||||||||
Legal fees payable
|
$
|
155,139
|
$
|
33,983
|
||||
Audit fees payable
|
123,083
|
50,000
|
||||||
Management fee payable
|
110,426
|
-
|
||||||
Administrator fees payable
|
73,908
|
47,151
|
||||||
Professional fees payable
|
50,185
|
-
|
||||||
Director's fee payable
|
32,049
|
24,370
|
||||||
Due to affiliate
|
869
|
85
|
||||||
Organizational costs payable
|
-
|
34,168
|
||||||
Offering cost payable
|
-
|
264,581
|
||||||
Other payables
|
26,238
|
25,359
|
||||||
Total liabilities
|
$
|
571,897
|
$
|
479,697
|
||||
Commitments and contingencies (Note 6)
|
-
|
-
|
||||||
NET ASSETS
|
||||||||
Common Stock, $0.01 par value, 100,000,000 shares authorized, 6,214,672 and 6,214,672 shares issued and outstanding as of September 30, 2022 and March 31, 2022,
respectively
|
$
|
62,147
|
$
|
62,147
|
||||
Additional paid-in-capital
|
84,917,788
|
84,917,788
|
||||||
Distributable earnings/(Accumulated losses)
|
343,815
|
(427,845
|
)
|
|||||
Total net assets
|
$
|
85,323,750
|
$
|
84,552,090
|
||||
NET ASSET VALUE PER SHARE
|
$
|
13.73
|
$
|
13.61
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
September 30, 2022
|
September 30, 2021
|
September 30, 2022
|
September 30, 2021
|
|||||||||||||
INVESTMENT INCOME:
|
||||||||||||||||
Non-control/non-affiliate investment income:
|
||||||||||||||||
Interest income
|
$
|
1,180,517
|
$
|
-
|
$
|
1,580,108
|
$
|
-
|
||||||||
Fee income
|
-
|
-
|
410,000
|
-
|
||||||||||||
Total investment income:
|
1,180,517
|
-
|
1,990,108
|
-
|
||||||||||||
EXPENSES:
|
||||||||||||||||
Legal expenses
|
167,497
|
-
|
390,479
|
-
|
||||||||||||
Management fee
|
110,426
|
-
|
165,467
|
-
|
||||||||||||
Audit expense
|
81,917
|
10,000
|
165,667
|
20,000
|
||||||||||||
Insurance fees
|
76,373
|
-
|
151,915
|
-
|
||||||||||||
Administrator fees
|
65,035
|
-
|
127,581
|
-
|
||||||||||||
Director expenses
|
32,049
|
-
|
67,796
|
-
|
||||||||||||
Professional fees
|
39,903 |
-
|
45,868
|
-
|
||||||||||||
Custodian fees
|
12,000
|
12,000
|
24,000
|
12,000 |
||||||||||||
Organizational expenses
|
-
|
106,186
|
-
|
260,248
|
||||||||||||
Other expenses
|
44,902
|
-
|
79,675
|
-
|
||||||||||||
Total expenses
|
630,102
|
128,186
|
1,218,448
|
292,248
|
||||||||||||
NET INVESTMENT INCOME (LOSS)
|
550,415
|
(128,186
|
)
|
771,660
|
(292,248
|
)
|
||||||||||
NET REALIZED GAIN (LOSS) FROM INVESTMENTS
|
-
|
-
|
-
|
-
|
||||||||||||
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) FROM INVESTMENTS:
|
||||||||||||||||
Non-controlled/non-affiliate investments
|
9,508
|
-
|
-
|
-
|
||||||||||||
Net change in unrealized appreciation/(depreciation) from investments
|
9,508
|
-
|
-
|
-
|
||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
559,923
|
$
|
(128,186
|
)
|
$
|
771,660
|
$
|
(292,248
|
)
|
||||||
NET INVESTMENT INCOME (LOSS) PER SHARE - BASIC AND DILUTED
|
$
|
0.09
|
$
|
(332.09
|
)
|
$
|
0.12
|
$
|
(757.12
|
)
|
||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - BASIC AND DILUTED
|
$
|
0.09
|
$
|
(332.09
|
)
|
$
|
0.12
|
$
|
(757.12
|
)
|
||||||
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
|
6,214,672
|
386
|
6,214,672
|
386
|
|
Common Stock
|
|||||||||||||||||||
Three Months Ended
September 30, 2022
|
Shares
|
Par Value
|
Additional
paid-in-capital
|
Distributable Earnings/
(Accumulated Loss)
|
Total net assets/
(net liabilities)
|
|||||||||||||||
Balance, June 30, 2022
|
6,214,672
|
$
|
62,147
|
$
|
84,917,788
|
$
|
(216,108
|
)
|
$
|
84,763,827
|
||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
-
|
-
|
550,415
|
550,415
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
-
|
-
|
9,508
|
9,508
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total increase (decrease) in net assets
|
-
|
-
|
-
|
559,923
|
559,923
|
|||||||||||||||
Balance, September 30, 2022
|
6,214,672
|
$
|
62,147
|
$
|
84,917,788
|
$
|
343,815
|
$
|
85,323,750
|
Common Stock
|
||||||||||||||||||||
Three Months Ended
September 30, 2021
|
Shares
|
Par value
|
Additional
paid-in-capital
|
Distributable Earnings/
(Accumulated Loss)
|
Total net assets/
(net liabilities)
|
|||||||||||||||
Balance, June 30, 2021
|
386
|
$
|
4
|
$
|
5,396
|
$
|
(323,777
|
)
|
$
|
(318,377
|
)
|
|||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
-
|
-
|
(128,186
|
)
|
(128,186
|
)
|
|||||||||||||
Net realized gain (loss) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock, net of offering cost
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total increase (decrease) in net assets
|
-
|
-
|
-
|
(128,186
|
)
|
(128,186
|
)
|
|||||||||||||
Balance, September 30, 2021
|
386
|
$
|
4
|
$
|
5,396
|
$
|
(451,963
|
)
|
$
|
(446,563
|
)
|
|
Common Stock
|
|||||||||||||||||||
Six Months Ended
September 30, 2022
|
Shares
|
Par Value
|
Additional
paid-in-capital
|
Distributable Earnings/
(Accumulated Loss)
|
Total net assets/
(net liabilities)
|
|||||||||||||||
Balance, March 31, 2022
|
6,214,672
|
$
|
62,147
|
$
|
84,917,788
|
$
|
(427,845
|
)
|
$
|
84,552,090
|
||||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
-
|
-
|
771,660
|
771,660
|
|||||||||||||||
Net realized gain (loss) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total increase (decrease) in net assets
|
-
|
-
|
-
|
771,660
|
771,660
|
|||||||||||||||
Balance, September 30, 2022
|
6,214,672
|
$
|
62,147
|
$
|
84,917,788
|
$
|
343,815
|
$
|
85,323,750
|
Common Stock
|
||||||||||||||||||||
Six Months Ended
September 30, 2021
|
Shares
|
Par value
|
Additional
paid-in-capital
|
Distributable Earnings/
(Accumulated Loss)
|
Total net assets/
(net liabilities)
|
|||||||||||||||
Balance, March 31, 2021
|
-
|
$
|
-
|
$
|
-
|
$
|
(159,715
|
)
|
$
|
(159,715
|
)
|
|||||||||
Net increase (decrease) in net assets resulting from operations
|
||||||||||||||||||||
Net investment income (loss)
|
-
|
-
|
-
|
(292,248
|
)
|
(292,248
|
)
|
|||||||||||||
Net realized gain (loss) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net change in unrealized appreciation (depreciation) from investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Capital transactions
|
||||||||||||||||||||
Issuance of common stock, net of offering cost
|
386
|
4
|
5,396
|
-
|
5,400
|
|||||||||||||||
Total increase (decrease) in net assets
|
386
|
4
|
5,396
|
(292,248
|
)
|
(286,848
|
)
|
|||||||||||||
Balance, September 30, 2021
|
386
|
$
|
4
|
$
|
5,396
|
$
|
(451,963
|
)
|
$
|
(446,563
|
)
|
Six Months Ended
|
||||||||
September 30, 2022
|
September 30, 2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
771,660
|
$
|
(292,248
|
)
|
|||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
|
||||||||
Net change in unrealized (appreciation) depreciation from investments
|
-
|
-
|
||||||
Net (accretion of discounts) and amortization of premiums
|
(49,966
|
)
|
-
|
|||||
Purchase of investments
|
(24,417,500
|
)
|
-
|
|||||
(Increase)/Decrease in operating assets:
|
||||||||
Prepaid expenses
|
136,725
|
-
|
||||||
Interest receivable
|
(243,332
|
)
|
-
|
|||||
Increase/(Decrease) in operating liabilities:
|
||||||||
Legal fees payable
|
121,156
|
-
|
||||||
Management fee payable
|
110,426
|
-
|
||||||
Other payables
|
879
|
12,000
|
||||||
Professional fees payable
|
50,185
|
-
|
||||||
Director's fee payable
|
7,679
|
-
|
||||||
Due to affiliate
|
784
|
378,100
|
||||||
Deferred offering cost
|
-
|
(920,668
|
)
|
|||||
Offering cost payable
|
(264,581
|
)
|
555,670
|
|||||
Audit fees payable
|
73,083
|
20,000
|
||||||
Administrator fees payable
|
26,757
|
-
|
||||||
Organizational costs payable
|
(34,168
|
)
|
247,146
|
|||||
Net cash provided by (used in) operating activities
|
(23,710,213
|
)
|
-
|
|||||
Cash flows from financing activities:
|
||||||||
Issuance of common stock, net of offering cost
|
-
|
5,400
|
||||||
Net cash provided by (used in) financing activities
|
-
|
5,400
|
||||||
Net increase (decrease) in cash & cash equivalents
|
(23,710,213
|
)
|
5,400
|
|||||
Cash & cash equivalents, beginning of period
|
84,766,060
|
-
|
||||||
Cash & cash equivalents, end of period
|
$
|
61,055,847
|
$
|
5,400
|
Portfolio
Company (1)
|
Type of
Investment (2)
|
Investment
Date (3)
|
Maturity
Date
|
Interest
Rate (4) |
Fair Value
Hierarchy (5)
|
Geographic
Region (6)
|
Non-
Qualifying Asset (7)
|
Principal
Amount (8)
|
Amortized
Cost |
Fair
Value (9)
|
% of
Net
Assets
|
|||||||||||||||
Debt Securities - United States
|
|
|
|
|
|
|
||||||||||||||||||||
Wholesale Trade (10)
|
|
|
|
|
|
|
||||||||||||||||||||
Shryne Group, Inc.
|
Senior Secured First Lien Term Loan
|
5/26/2022
|
5/26/2026
|
Variable interest rate PRIME(11) + 8.5% (4.0% PRIME Floor )
|
3
|
West
|
No
|
$
|
21,000
|
$
|
20,455
|
$
|
20,455
|
23.98
|
%
|
|||||||||||
PharmaCann, Inc.
|
Senior Secured First Lien Term Loan
|
6/30/2022
|
6/30/2025
|
Fixed interest rate 12%
|
3
|
Midwest
|
No
|
4,250
|
4,012
|
4,012
|
4.70
|
|||||||||||||||
|
|
|
|
|
|
|
$
|
25,250
|
24,467
|
24,467
|
28.68
|
|||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Total: Debt Securities - United States (28.68%):
|
|
|
|
|
|
|
24,467
|
24,467
|
28.68
|
|||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Total: Debt Securities (28.68%):
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Total Investment in Securities (28.68%):
|
|
|
|
|
|
|
$
|
24,467
|
$
|
24,467
|
28.68
|
%
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
||||||||||||||||||||
State Street Institutional U.S. Government Money Market Fund (12)
|
|
|
|
|
1
|
|
|
$
|
60,355
|
$
|
60,355
|
70.75
|
%
|
|||||||||||||
Cash equivalents (70.75%):
|
|
|
|
|
|
|
60,355
|
60,355
|
70.75
|
|||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Total Portfolio Investments and Cash equivalents (99.43%):
|
|
|
|
|
|
|
$
|
84,822
|
$
|
84,822
|
99.43
|
%
|
(1) |
All portfolio companies are located in the United States.
|
(2) |
All debt investments are income producing as of September 30, 2022.
|
(3) |
Investment date represents the date of initial investment, at which date interest began accruing.
|
(4) |
Interest rate is the fixed or variable rate of the debt investments and does not include any original issue discount or any additional fees related to such investments, such as closing
fees.
|
(5) |
See Note 2 – Significant Accounting Policies and Note 4 - Fair Value of Financial Instruments in the accompanying notes to the financial statements.
|
(6) |
Geographic regions are determined by the respective portfolio company’s operations’ location.
|
(7) |
Under the Investment Company Act of 1940, as amended (the “1940 Act”), a business development company ("BDC") may not acquire any “non-qualifying asset” (i.e., an asset other than
assets of the type listed in Section 55(a) of the 1940 Act, which are referred to as “qualifying assets”), unless, at the time the acquisition is made, qualifying assets represent at least 70% of the BDC’s total assets.
|
(8) |
Principal is net of repayments, if any, as per the terms of the debt instrument’s contract.
|
(9) |
All investments were valued at fair value. See Note 4 - Fair Value of Financial Instruments in the accompanying notes to the financial statements.
|
(10) |
The Company uses the North American Industry Classification System (“NAICS”) code for classifying the industry grouping of its portfolio companies.
|
(11) |
As of September 30, 2022 PRIME is 6.25%.
|
(12) |
The annualized seven-day yield as of September 30, 2022 is 2.94%.
|
- |
With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;
|
- |
With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which may be based on
valuations provided by independent valuation firm(s);
|
- |
Preliminary valuations are documented and discussed by the Adviser’s valuation committee; and
|
- |
The Adviser determines the fair value of each investment.
|
• |
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
|
• |
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or for which all significant inputs are
observable, either directly or indirectly; and
|
• |
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
September 30, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Industry
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Wholesale Trade
|
$
|
24,467,466
|
100.0
|
%
|
$
|
24,467,466
|
100.0
|
%
|
||||||||
Total
|
$
|
24,467,466
|
100.0
|
%
|
$
|
24,467,466
|
100.0
|
%
|
September 30, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Geographic Location
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
West
|
$
|
20,455,483
|
83.6
|
%
|
$
|
20,455,483
|
83.6
|
%
|
||||||||
Midwest
|
4,011,983
|
16.4
|
4,011,983
|
16.4
|
||||||||||||
Total
|
$
|
24,467,466
|
100.0
|
%
|
$
|
24,467,466
|
100.0
|
%
|
September 30, 2022
|
||||||||||||||||
Amortized Cost
|
Fair Value
|
|||||||||||||||
Investment
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Senior Secured First Lien Term Loan
|
$
|
24,467,466
|
100.0
|
%
|
$
|
24,467,466
|
100.0
|
%
|
||||||||
Total
|
$
|
24,467,466
|
100.0
|
%
|
$
|
24,467,466
|
100.0
|
%
|
● |
Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;
|
● |
Current and projected financial condition of the portfolio company;
|
● |
Current and projected ability of the portfolio company to service its debt obligations;
|
● |
Type and amount of collateral, if any, underlying the investment;
|
● |
Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/EBITDA ratio) applicable to the investment;
|
● |
Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);
|
● |
Pending debt or capital restructuring of the portfolio company;
|
● |
Projected operating results of the portfolio company;
|
● |
Current information regarding any offers to purchase the investment;
|
● |
Current ability of the portfolio company to raise any additional financing as needed;
|
● |
Changes in the economic environment, which may have a material impact on the operating results of the portfolio company;
|
● |
Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;
|
● |
Qualitative assessment of key management;
|
● |
Contractual rights, obligations or restrictions associated with the investment; and
|
● |
Time to exit.
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||||||
Assets
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Total
|
||||||||||||
Senior Secured First Lien Term Loan
|
$
|
-
|
$
|
-
|
$
|
24,467,466
|
$
|
24,467,466
|
||||||||
Total
|
$
|
-
|
$
|
-
|
$
|
24,467,466
|
$
|
24,467,466
|
Investment Type
|
Fair Value as of
September 30, 2022
|
Valuation Techniques/
Methodologies
|
Unobservable
Input
|
Range
|
Weighted Average (1)
|
|||||||||
Senior Secured First Lien Term Loan
|
$
|
24,467,466
|
Discounted Cash Flows
|
Discount Rate
|
14.8% - 17.5
|
%
|
16.4
|
%
|
||||||
Total
|
$
|
24,467,466
|
Senior Secured
First Lien Term
Loan
|
Total
Investments
|
|||||||
Fair Value as of March 31, 2022
|
$
|
-
|
$
|
-
|
||||
Net realized gain (loss) on investments
|
-
|
-
|
||||||
Net change in unrealized appreciation (depreciation) on investments
|
-
|
-
|
||||||
Payment in-kind
|
-
|
-
|
||||||
Purchases of investments
|
24,417,500
|
24,417,500
|
||||||
Accretion of discount and fees (amortization of premium), net
|
49,966
|
49,966
|
||||||
PIK interest
|
-
|
-
|
||||||
Proceeds from sales of investments
|
-
|
-
|
||||||
Proceeds from principal repayments
|
-
|
-
|
||||||
Balance as of September 30, 2022
|
$
|
24,467,466
|
$
|
24,467,466
|
||||
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of September 30, 2022
|
$
|
-
|
$
|
-
|
|
Three Months
Ended
September 30, 2022
|
Three Months
Ended
September 30, 2021
|
Six Months
Ended
September 30, 2022
|
Six Months
Ended
September 30, 2021
|
||||||||||||
Net investment income (loss)
|
$
|
550,415
|
$
|
(128,186
|
)
|
$
|
771,660
|
$
|
(292,248
|
)
|
||||||
Net increase (decrease) in net assets resulting from operations
|
$
|
559,923
|
$
|
(128,186
|
)
|
$
|
771,660
|
$
|
(292,248
|
)
|
||||||
Weighted Average Shares Outstanding - basic and diluted
|
6,214,672
|
386
|
6,214,672
|
386
|
||||||||||||
Net investment income (loss) per share - basic and diluted
|
$
|
0.09
|
$
|
(332.09
|
)
|
$
|
0.12
|
$
|
(757.12
|
)
|
||||||
Net increase (decrease) in net assets resulting from operations per share - basic and diluted
|
$
|
0.09
|
$
|
(332.09
|
)
|
$
|
0.12
|
$
|
(757.12
|
)
|
September 30, 2022
|
||||
Tax Cost of Investments
|
$
|
24,467,466
|
||
-
|
||||
Unrealized appreciation
|
$
|
-
|
||
Unrealized depreciation
|
-
|
|||
Net unrealized appreciation (depreciation) from investments
|
$
|
-
|
Three Months Ended
|
Six Months Ended
|
|||||||
September 30, 2022
|
September 30, 2022
|
|||||||
Per share data:
|
||||||||
Net asset value at beginning of period
|
$
|
13.64
|
$
|
13.61
|
||||
Net investment income (loss) (1)
|
0.09
|
0.12
|
||||||
Net realized and unrealized gains/(losses) on investments(1)
|
-
|
-
|
||||||
Net increase/(decrease) in net assets resulting from operations
|
0.09
|
0.12
|
||||||
Net asset value at end of period
|
$
|
13.73
|
$
|
13.73
|
||||
Net assets at end of period
|
$
|
85,323,750
|
$
|
85,323,750
|
||||
Shares outstanding at end of period
|
6,214,672
|
6,214,672
|
||||||
Weighted average net assets
|
$
|
84,769,913
|
$
|
84,661,597
|
||||
Weighted average shares outstanding
|
6,214,672 |
6,214,672
|
||||||
Per share market value at end of period
|
$
|
10.00
|
$
|
10.00
|
||||
Total return based on market value (2)
|
2.25
|
%
|
(24.81
|
)%
|
||||
Total return based on net asset value (2)
|
0.66
|
%
|
0.88
|
%
|
||||
Ratio/Supplemental data:
|
||||||||
Ratio of expenses to average net assets(3)
|
0.74
|
%
|
1.44
|
%
|
||||
Ratio of net investment income (loss) to weighted average net assets(3)
|
0.65
|
%
|
0.91
|
%
|
||||
Portfolio turnover
|
N/A
|
N/A
|
(1) |
The per share data was derived by using the weighted average shares outstanding during the periods presented.
|
(2) |
Total return based on market value is based on the change in market price per share between the beginning and ending market prices per share in each period and assumes that common stock
dividends are reinvested in accordance with our common stock dividend reinvestment plan. Total return based on net asset value is based upon the change in net asset value per share between the beginning and ending net asset values per share
in each period and assumes that dividends are reinvested in accordance with our common stock dividend reinvestment plan. For periods less than a year, total return is not annualized.
|
(3) |
Ratio is not annualized.
|
Item 2. |
• |
the cost of our organization and offerings;
|
• |
the cost of calculating our NAV, including the cost of any third-party valuation services;
|
• |
the cost of effecting sales and repurchases of shares of our common stock and other securities;
|
• |
fees and expenses payable under any underwriting agreements, if any;
|
• |
debt service and other costs of borrowings or other financing arrangements;
|
• |
costs of hedging;
|
• |
expenses, including travel expenses, incurred by the Adviser, or members of the investment team, or payable to third-parties, performing due diligence on prospective portfolio companies and, if necessary, enforcing our rights;
|
• |
management and incentive fees payable pursuant to the Investment Advisory Agreement;
|
• |
fees payable to third-parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms);
|
• |
costs, including legal fees, associated with compliance under cannabis laws;
|
• |
transfer agent and custodial fees;
|
• |
fees and expenses associated with marketing efforts (including attendance at industry and investor conferences and similar events);
|
• |
federal and state registration fees;
|
• |
any exchange listing fees and fees payable to rating agencies;
|
• |
federal, state and local taxes;
|
• |
independent directors’ fees and expenses, including travel expenses;
|
• |
cost of preparing financial statements and maintaining books and records and filing reports or other documents with the SEC (or other regulatory bodies) and other reporting and compliance costs, and the compensation of professionals
responsible for the preparation of the foregoing;
|
• |
the cost of any reports, proxy statements or other notices to our stockholders (including printing and mailing costs), the costs of any stockholder or director meetings and the compensation of investor relations personnel responsible for
the preparation of the foregoing and related matters;
|
• |
brokerage commissions and other compensation payable to brokers or dealers;
|
• |
research and market data;
|
• |
fidelity bond, directors’ and officers’ errors and omissions liability insurance and other insurance premiums;
|
• |
direct costs and expenses of administration, including printing, mailing and staff;
|
• |
fees and expenses associated with independent audits, and outside legal and consulting costs;
|
• |
costs of winding up;
|
• |
costs incurred in connection with the formation or maintenance of entities or vehicles to hold our assets for tax or other purposes;
|
• |
extraordinary expenses (such as litigation or indemnification); and
|
• |
costs associated with reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws.
|
September 30, 2022
|
||||||||
Type
|
Amortized Cost
|
Fair Value
|
||||||
Senior Secured First Lien Term Loan
|
100.00
|
%
|
100.00
|
%
|
||||
Total
|
100.00
|
%
|
100.00
|
%
|
September 30, 2022
|
||||||||
Geographic Region
|
Amortized Cost
|
Fair Value
|
||||||
West
|
83.60
|
%
|
83.60
|
%
|
||||
Midwest
|
16.40
|
%
|
16.40
|
%
|
||||
Total
|
100.00
|
%
|
100.00
|
%
|
September 30, 2022
|
||||||||
Industry
|
Amortized Cost
|
Fair Value
|
||||||
Wholesale Trade
|
100.00
|
%
|
100.00
|
%
|
||||
Total
|
100.00
|
%
|
100.00
|
%
|
Six Months Ended
September 30, 2022
|
Year Ended March 31,
2022
|
|||||||
Beginning Portfolio, at fair value
|
$
|
-
|
$
|
-
|
||||
Purchases
|
24,417,500
|
-
|
||||||
Accretion of discount and fees (amortization of premium), net
|
49,966
|
-
|
||||||
PIK interest
|
-
|
-
|
||||||
Principal payments received on investments
|
-
|
-
|
||||||
Proceeds from early debt repayments
|
-
|
-
|
||||||
Sale of investments
|
-
|
-
|
||||||
Accretion of OID
|
-
|
-
|
||||||
Net realized gain/(loss)
|
-
|
-
|
||||||
Net change in unrealized appreciation/(depreciation)
|
-
|
-
|
||||||
Ending Portfolio, at fair value
|
$
|
24,467,466
|
$
|
-
|
Investment
Performance
Risk Rating
|
Summary Description
|
|
Grade 1
|
Investment is performing above expectations. Full return of principal, interest and dividend income is expected.
|
|
Grade 2
|
Investment is performing in-line with expectations. Risk factors remain neutral or favorable compared with initial underwriting. All investments are given a “2” at the time of origination
|
|
Grade 3
|
Investment is performing below expectations. Capital impairment or payment delinquency is not anticipated. The investment may also be out of compliance with certain financial covenants.
|
|
Grade 4
|
Investment is performing below expectations. Quantitative or qualitative risks have increased materially. Delinquency of interest and / or dividend payments is anticipated. No loss of
principal anticipated.
|
|
Grade 5
|
Investment is performing substantially below expectations. It is anticipated that the Company will not recoup its initial cost basis and may realize a loss upon exit. Most or all of the
debt covenants are out of compliance. Amortization, interest and / or dividend payments are substantially delinquent.
|
September 30, 2022
|
|||||||||
Investment Performance Risk Rating
|
Investments at Fair
Value
|
Percentage of Total
Investments
|
|||||||
1
|
$
|
-
|
-
|
%
|
|||||
2
|
24,467,466
|
100
|
|||||||
3
|
-
|
-
|
|||||||
4
|
-
|
-
|
|||||||
5
|
-
|
-
|
|||||||
Total
|
$
|
24,467,466
|
100
|
%
|
|
Three Months Ended
September 30, 2022
|
Three Months Ended
September 30, 2021
|
Six Months Ended
September 30, 2022
|
Six Months Ended
September 30, 2021
|
||||||||||||
Stated interest income
|
$
|
1,140,059
|
$
|
-
|
$
|
1,530,142
|
$
|
-
|
||||||||
Accretion of discount and fees (amortization of premium), net
|
40,458
|
-
|
49,966
|
-
|
||||||||||||
Acceleration of amortization of original issue discount
|
-
|
-
|
-
|
-
|
||||||||||||
Payment in-kind interest
|
-
|
-
|
-
|
-
|
||||||||||||
Prepayment penalty and related fees
|
-
|
-
|
-
|
-
|
||||||||||||
Other fee income
|
-
|
-
|
410,000
|
-
|
||||||||||||
Total investment income
|
$
|
1,180,517
|
$
|
-
|
$
|
1,990,108
|
$
|
-
|
Three Months Ended
September 30, 2022
|
Three Months Ended
September 30, 2021
|
Six Months Ended
September 30, 2022
|
Six Months Ended
September 30, 2021
|
|||||||||||||
Net realized gain (loss) on investments:
|
||||||||||||||||
Gross realized gains
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Gross realized losses
|
-
|
-
|
-
|
-
|
||||||||||||
Total net realized gains/(losses) on investments
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
Three Months Ended
September 30, 2022
|
Three Months Ended
September 30, 2021
|
Six Months Ended
September 30, 2022
|
Six Months Ended
September 30, 2021
|
|||||||||||||
Gross unrealized appreciation
|
$
|
9,508
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Gross unrealized depreciation
|
-
|
-
|
-
|
-
|
||||||||||||
Total net unrealized gains (losses) on investments
|
$
|
9,508
|
$
|
-
|
$
|
-
|
$
|
-
|
- |
With respect to investments for which market quotations are readily available, those investments will typically be valued at the bid price of those market quotations;
|
- |
With respect to investments for which market quotations are not readily available, the valuation process begins with the Adviser’s valuation committee establishing a preliminary valuation of each investment, which may be based on
valuations provided by independent valuation firm(s);
|
- |
Preliminary valuations are documented and discussed by the Adviser’s valuation committee; and
|
- |
The Adviser determines the fair value of each investment.
|
• |
Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date;
|
• |
Level 2 – Valuations based on quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or for which all significant inputs are
observable, either directly or indirectly; and
|
• |
Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
|
Price Range
|
|||||||||||||||||||||||
Class and Period
|
Net Asset
Value(1)
|
High
|
Low
|
High Sales
Price
Premium
(Discount) to
Net Asset
Value(2)
|
Low Sales
Price
Premium
(Discount) to
Net Asset
Value(2)
|
Cash
Dividend Per
Share(3)
|
||||||||||||||||||
Year Ended March 31, 2023
|
||||||||||||||||||||||||
Third Quarter (through November 8, 2022)
|
*
|
$
|
10.55
|
$
|
9.75
|
*
|
*
|
*
|
||||||||||||||||
Second Quarter
|
$
|
13.73
|
$
|
10.74
|
$
|
9.00
|
-21.8
|
%
|
-34.5
|
%
|
-
|
|||||||||||||
First Quarter
|
$
|
13.64
|
$
|
13.50
|
$
|
7.80
|
-1.0
|
%
|
-42.8
|
%
|
-
|
|||||||||||||
Year Ended March 31, 2022
|
||||||||||||||||||||||||
Fourth Quarter(4)
|
$
|
13.61
|
$
|
14.41
|
$
|
12.57
|
5.9
|
%
|
-7.6
|
%
|
$
|
-
|
(1) |
Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on
outstanding shares at the end of the relevant quarter.
|
(2) |
Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the end of the applicable quarter).
|
(3) |
Represents the dividend or distribution declared in the relevant quarter.
|
(4) |
Shares of our common stock began trading on the Nasdaq Global Market on February 4, 2022 under the trading symbol “SSIC.”
|
* |
Not determined at time of filing.
|
Item 3. |
Change in Interest Rates
|
Interest Income
|
Interest expense
|
Net Income/(Loss)
|
|||||||||
Up 300 basis points
|
$
|
630
|
$
|
-
|
$
|
630
|
||||||
Up 200 basis points
|
420
|
-
|
420
|
|||||||||
Up 100 basis points
|
210
|
-
|
210
|
|||||||||
Down 100 basis points
|
(158
|
)
|
-
|
(158
|
)
|
|||||||
Down 200 basis points
|
(158
|
)
|
-
|
(158
|
)
|
|||||||
Down 300 basis points
|
(158
|
)
|
-
|
(158
|
)
|
Item 4. |
Item 1. |
Item 1A. |
Item 2. |
Item 3. |
Item 4. |
Item 5. |
Item 6. |
Exhibit
Number
|
Description of Exhibit
|
Articles of Amendment and Restatement of the Company(1)
|
|
Amended and Restated Bylaws of the Company(1)
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Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
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Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
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Filed herewith.
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(1) |
Incorporated by reference to the Company’s annual report on Form 10-K/A, filed on June 30, 2022.
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SILVER SPIKE INVESTMENT CORP.
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By:
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/s/ Scott Gordon
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Scott Gordon
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Chief Executive Officer (Principal Executive Officer)
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By:
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/s/ Gregory Gentile
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Gregory Gentile
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Chief Financial Officer (Principal Financial and Accounting Officer)
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Date: November 10, 2022
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By:
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/s/ Scott Gordon
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Scott Gordon
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Chief Executive Officer
(Principal Executive Officer)
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Date: November 10, 2022
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By:
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/s/ Gregory Gentile
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Gregory Gentile
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Chief Financial Officer
(Principal Financial Officer)
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Date: November 10, 2022
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By:
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/s/ Scott Gordon
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Scott Gordon
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Chief Executive Officer
(Principal Executive Officer)
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Date: November 10, 2022
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By:
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/s/ Gregory Gentile
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Gregory Gentile
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Chief Financial Officer
(Principal Financial Officer)
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