TriLinc Global Impact Fund LLC - FORM 10-Q

Attached files

file	filename
EX-32.1 - EX-32.1 - TriLinc Global Impact Fund LLC	trilinc-ex321_8.htm
EX-31.2 - EX-31.2 - TriLinc Global Impact Fund LLC	trilinc-ex312_7.htm
EX-31.1 - EX-31.1 - TriLinc Global Impact Fund LLC	trilinc-ex311_9.htm
EX-10.3 - EX-10.3 - TriLinc Global Impact Fund LLC	trilinc-ex103_6.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-55432

TriLinc Global Impact Fund, LLC

(Exact name of registrant as specified in its charter)

Delaware

36-4732802

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1230 Rosecrans Avenue, Suite 605,

Manhattan Beach, CA 90266

(Address of principal executive offices)

(310) 997-0580

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 10, 2017, the Company had outstanding 18,072,865 Class A units, 8,203,229 Class C units, 9,643,832 Class I units, 0 Class W units and 0 Class Y units.

Table of Contents

Part I. Financial Information		1

Item 1. Consolidated Financial Statements		1

Consolidated Statements of Assets and Liabilities as of March 31, 2017 (unaudited) and December 31, 2016		1

Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (unaudited)		2

Consolidated Statements of Changes in Net Assets for the three months ended March 31, 2017 and 2016 (unaudited)		3

Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (unaudited)		4

Consolidated Schedules of Investments as of March 31, 2017 (unaudited) and December 31, 2016		5-8

Notes to Consolidated Financial Statements (unaudited)		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27

Item 3. Quantitative and Qualitative Disclosures About Market Risk		39

Item 4. Controls and Procedures		40

Part II. Other Information		41

Item 1. Legal Proceedings		41

Item 1A. Risk Factors		41

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		41

Item 3. Defaults Upon Senior Securities		42

Item 4. Mine Safety Disclosures		42

Item 5. Other Information		42

Item 6. Exhibits		42

Part I. Financial Information

Item 1. Consolidated Financial Statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Assets and Liabilities

	As of
	March 31,			December 31,
	2017			2016
	(Unaudited)
ASSETS
Investments owned, at fair value (amortized cost of $218,269,140 and $203,854,890, respectively)	$	218,210,063		$	203,795,813
Cash		68,634,169			44,790,312
Unit subscriptions receivable (see Note 8)		14,574,746			—
Interest receivable		8,264,047			6,866,432
Due from affiliates (see Note 5)		3,287,475			3,175,656
Prepaid expenses		44,167			50,122
Total assets		313,014,667			258,678,335

LIABILITIES
Due to unitholders		1,071,891			934,805
Management fee payable		1,520,975			1,166,147
Notes payable		1,860,000			1,635,000
Unit repurchases payable		3,125,167			2,158,255
Due to affiliates (see Note 5)		560,818			68,312
Accrued distribution fees		2,140,000			1,907,000
Other payables		62,073			52,901
Total liabilities		10,340,924			7,922,420
Commitments and Contingencies (see Note 5)
NET ASSETS	$	302,673,743		$	250,755,915

ANALYSIS OF NET ASSETS:
Net capital paid in on Class A units	$	162,253,634		$	138,912,711
Net capital paid in on Class C units		71,300,367			59,498,965
Net capital paid in on Class I units		86,065,286			66,887,930
Offering costs		(16,945,544	)		(14,543,691	)
Net assets (equivalent to $8.469 and $8.469, respectively per unit based on total units outstanding of 35,739,018 and 29,607,381, respectively)	$	302,673,743		$	250,755,915
Net assets, Class A (units outstanding of 18,022,123 and 15,391,991, respectively)	$	153,708,501		$	131,351,882
Net assets, Class C (units outstanding of 8,157,299 and 6,803,985, respectively)		67,432,609			56,156,722
Net assets, Class I (units outstanding of 9,559,596 and 7,411,405, respectively)		81,532,633			63,247,311
NET ASSETS	$	302,673,743		$	250,755,915

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Operations

(Unaudited)

	Three months ended
	March 31,			March 31,
	2017			2016
INVESTMENT INCOME
Interest income	$	6,590,163		$	3,249,585
Interest from cash		87,922			92,269
Total investment income		6,678,085			3,341,854
EXPENSES
Management fees		1,520,974			816,326
Incentive fees		960,348			650,348
Professional fees		365,179			289,031
General and administrative expenses		300,297			201,876
Board of managers fees		54,375			46,875
Total expenses		3,201,173			2,004,456
Expense support payment from Sponsor		(1,324,828	)		(1,914,344	)
Net expenses		1,876,345			90,112
NET INVESTMENT INCOME		4,801,740			3,251,742
Net change in unrealized depreciation on investments		—			(59,077	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,801,740		$	3,192,665

NET INVESTMENT INCOME PER UNITS - BASIC AND DILUTED	$	0.15		$	0.18
EARNINGS PER UNITS - BASIC AND DILUTED	$	0.15		$	0.18
WEIGHTED AVERAGE UNITS OUTSTANDING - BASIC AND DILUTED		31,423,215			17,816,842

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Changes in Net Assets

(Unaudited)

	Three months ended
	March 31,			March 31,
	2017			2016
INCREASE FROM OPERATIONS
Net investment income	$	4,801,740		$	3,251,742
Net change in unrealized depreciation on investments		—			(59,077	)
Net increase from operations		4,801,740			3,192,665
DECREASE FROM DISTRIBUTIONS
Distributions to Class A unitholders		(2,869,276	)		(1,872,086	)
Distributions to Class C unitholders		(1,285,860	)		(300,798	)
Distributions to Class I unitholders		(1,410,597	)		(1,016,190	)
Net decrease from distributions		(5,565,733	)		(3,189,074	)
INCREASE FROM CAPITAL TRANSACTIONS
Issuance of Class A units		24,443,996			13,383,247
Issuance of Class C units		12,212,344			12,803,403
Issuance of Class I units		21,785,501			4,621,436
Repurchase of units		(3,125,167	)		(4,611,631	)
Class C units distribution fee		(233,000	)		—
Offering costs		(2,401,853	)		(1,645,498	)
Net increase from capital transactions		52,681,821			24,550,957
NET INCREASE IN NET ASSETS		51,917,828			24,554,548
Net assets at beginning of period		250,755,915			138,620,607
Net assets at end of period	$	302,673,743		$	163,175,155

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Statements of Cash Flows

(Unaudited)

	Three months ended
	March 31,			March 31,
	2017			2016
Cash flows from operating activities
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	4,801,740		$	3,192,665
ADJUSTMENT TO RECONCILE NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES
Purchase of investments		(74,703,583	)		(49,897,194	)
Maturity of investments		60,583,156			24,994,660
Net change in unrealized depreciation on investments		—			59,077
Accretion of discounts on investments		(293,823	)		(5,000	)
Increase in interest receivable		(1,397,615	)		(198,946	)
Increase in due from affiliates		(111,819	)		(270,053	)
Decrease in prepaid expenses		5,955			7,286
Increase in due to unitholders		137,086			113,406
Increase in management and incentive fees payable		354,828			90,112
Increase in other payable		9,172			7,244
NET CASH USED IN OPERATING ACTIVITIES		(10,614,903	)		(21,906,743	)
Cash flows from financing activities
Net proceeds from issuance of units		48,836,929			29,476,761
Distributions paid to unitholders		(3,060,697	)		(1,857,749	)
Payments of offering costs		(1,909,347	)		(1,970,845	)
Repurchase of units		(9,633,125	)		(108,667	)
Proceeds from issuance of notes payable		225,000			—
NET CASH PROVIDED BY FINANCING ACTIVITIES		34,458,760			25,539,500
TOTAL INCREASE IN CASH		23,843,857			3,632,757
Cash at beginning of period		44,790,312			33,246,769
Cash at end of period	$	68,634,169		$	36,879,526
Supplemental non-cash information
Issuance of units in connection with distribution reinvestment plan	$	2,505,036		$	1,331,325
Unit subscriptions receivable	$	14,574,746		$	—
Change in accrual of Class C unit distribution fee	$	233,000		$	—

See accompanying notes to the consolidated financial statements.

TriLinc Global Impact Fund, LLC

Consolidated Schedule of Investments

As of March 31, 2017

(Unaudited)

Investment Type / Country	Portfolio Company	Sector	Description	Interest		Fees (2)			Maturity (3)	Principal Amount		Participation % (4)		Amortized Cost		Fair Value		% of Net Assets
Senior Secured Term Loan (1)
Brazil	Other Investments (13)	Programming and Data Processing	IT Service Provider		13.50%		2.0	%	10/31/2019	$	9,545,749	N/A		$	9,497,722	$	9,497,722		3.1	%
Indonesia	Other Investments (14)	Primary Nonferrous Metals	Tin Producer		12.00%		0.0	%	6/30/2020		3,000,000	N/A			3,000,000		3,000,000		1.0	%
Peru	Pure Biofuels del Peru S.A.C. (10), (16)	Bulk Fuel Stations and Terminals	Clean Diesel Distributor		11.50%		0.0	%	8/1/2019		15,000,000	N/A			15,703,374		15,703,374		5.2	%
Total Senior Secured Term Loan (1)															28,201,096		28,201,096		9.3	%
Senior Secured Term Loan Participations (1)
Brazil	Usivale Industria E Commercio (6)	Agricultural Products	Sugar Producer		12.43%		0.0	%	2/28/2021		2,851,296		100%		2,851,296		2,851,296		0.9	%
Cabo Verde	TRG Cape Verde Holdings Limited (14)	Hotels and Motels	Hospitality Service Provider		13.50%		0.0	%	8/21/2021		17,000,000		100%		17,000,000		17,000,000		5.6	%
Indonesia	PT Titan Mining Indonesia (14)	Street Construction	Infrastructure and Logistics Provider		18.00%		0.0	%	11/22/2019		15,000,000		100%		14,933,436		14,933,436		4.9	%
Malaysia	Other Investments (14)	Chemicals and Allied Products	Wholesale Distributor		12.00%		0.0	%	3/31/2020		5,027,157		100%		5,027,157		5,027,157		1.7	%
Namibia	Trustco Group Limited (7)	Land Subdividers and Developers	Property Developer		12.50%		0.0	%	8/15/2021		15,000,000		100%		14,858,037		14,858,037		4.9	%
Nigeria	Helios Maritime I Ltd. (8)	Water Transportation	Marine Logistics Provider		15.96%		0.8	%	9/16/2020		13,633,870		100%		13,564,703		13,564,703		4.5	%
Peru	Corporacion Prodesa S.R.L. (5)	Consumer Products	Diaper Manufacturer	12.00% - 13.00%			0.0	%	7/28/2021		4,790,000		100%		4,790,000		4,790,000		1.6	%
South Africa	Other Investments (14)	Rental of Railroad Cars	Railway Equipment Provider		12.00%		0.0	%	1/31/2020		4,136,861		82%		4,136,861		4,136,861		1.4	%
Zambia	Other Investments (14)	Soap, Detergents, and Cleaning	FMCG Manufacturer		11.00%		0.0	%	11/16/2019		1,810,151		16%		1,810,151		1,810,151		0.6	%
Total Senior Secured Term Loan Participations															78,971,640		78,971,640		26.1	%
Senior Secured Trade Finance Participations (1)
Argentina	Other Investments (15)	Agricultural Products	Agriculture Distributor		9.00%		0.0	%	7/16/2017		12,500,000		83%		12,500,000		12,500,000		4.1	%
Argentina	Other Investments (15)	Consumer Products	Dairy Co-Operative		10.67%		0.0	%	7/29/2017		6,000,000		17%		6,000,000		6,000,000		2.0	%
Argentina	Other Investments (16)	Meat, Poultry & Fish	Beef Exporter		11.50%		0.0	%	6/30/2017		9,000,000		32%		9,000,000		9,000,000		3.0	%
Argentina	Other Investments (16)	Fats and Oils	Oilseed Distributor	8.75% - 9.00%			0.0	%	8/31/2017 - 2/22/2018		12,000,000		100%		12,000,000		12,000,000		4.0	%
Chile	Other Investments (15)	Farm Products	Chia Seed Exporter		10.90%		0.0	%	12/11/2016 - 3/11/2017		1,464,901		100%		1,464,901		1,464,901		0.5	%
Ecuador	Other Investments (15)	Fresh or Frozen Packaged Fish	Shrimp Exporter		9.25%		0.0	%	6/6/2017 - 10/22/2017		8,770,449		75%		8,770,449		8,770,449		2.9	%
Ecuador	Other Investments (15)	Commercial Fishing	Fish Processor & Exporter		9.00%		0.0	%	6/19/2017		611,550		100%		611,550		611,550		0.2	%
Ecuador	Other Investments (15)	Commercial Fishing	Tuna Processor		9.50%		0.0	%	5/9/2017 - 8/7/2017		4,276,044		100%		4,276,044		4,276,044		1.4	%
Ghana	Genser Energy Ghana Ltd. (17)	Electric Services	Power Producer		11.50%		0.0	%	3/10/2017 - 10/9/2017		14,500,000		49%		14,500,000		14,500,000		4.8	%
Guatemala	Other Investments (11)	Farm Products	Sesame Seed Exporter		12.00%		0.0	%	3/31/2016		907,565		24%		907,565		907,565		0.3	%
Italy	Other Investments (17)	Lumber and Other Construction Materials	International Development Logistic Provider		9.50%		0.0	%	12/31/2017		4,099,375		72%		4,099,375		4,099,375		1.4	%
Kenya	Other Investments (17)	Miscellaneous Plastics Products	Plastic Products Manufacturer		11.50%		0.0	%	10/9/2017		161,018		15%		161,018		161,018		0.1	%
Mauritius	Other Investments (17)	Groceries and Related Products	Vanilla Exporter	10.98% - 11.04%			0.0	%	9/23/2017 - 11/23/2017		7,468,625		74%		7,468,625		7,468,625		2.5	%
Morocco	Other Investments (17)	Secondary Nonferrous Metals	Scrap Metal Recycler		11.00%		0.0	%	7/17/2017		5,849,626		59%		5,849,626		5,849,626		1.9	%
Namibia	Other Investments (16)	Packaged Foods & Meats	Consumer Goods Distributor		12.00%		0.0	%	10/29/2017		500,000		26%		500,000		500,000		0.2	%
South Africa	Other Investments (17)	Communications Equipment	Electronics Assembler	12.00% - 13.00%			0.0	%	11/10/2017 - 11/20/2017		1,644,431		22%		1,644,431		1,644,431		0.5	%
South Africa	Other Investments (17)	Meat, Poultry & Fish	Meat Processor		14.50%		0.0	%	5/19/2017		302,324		40%		302,324		302,324		0.1	%
South Africa	Other Investments (9)	Food Products	Fruit & Nut Distributor		12.00%		0.0	%	5/22/2015		785,806		18%		785,806		726,729		0.2	%
South Africa	Other Investments (16)	Metals & Mining	Mine Remediation Company		17.50%		0.0	%	9/28/2017		1,234,145		22%		1,234,145		1,234,145		0.4	%
United Kingdom	Other Investments (17)	Coal and Other Minerals and Ores	Metals Trader	9.43% - 9.52%			0.0	%	4/15/2017 - 12/31/2017		7,150,949		90%		7,150,949		7,150,949		2.4	%
Uruguay	Other Investments (15)	Food Products	Citrus Producer		9.00%		0.0	%	2/3/2018 - 3/24/2018		791,070		100%		791,070		791,070		0.3	%

Investment Type / Country	Portfolio Company	Sector	Description	Interest		Fees (2)			Maturity (3)	Principal Amount		Participation % (4)		Amortized Cost		Fair Value		% of Net Assets
Zambia	Other Investments (12)	Fertilizer & Agricultural Chemicals	Farm Supplies Distributor	12.08% - 12.50%			0.0	%	10/25/15 - 5/3/2016		5,078,526		24%		5,078,526		5,078,526		1.7	%
Zambia	Other Investments (15)	Primary Metal Industries	Integrated Steel Producer		13.00%		0.0	%	8/14/2017 - 9/2/2017		6,000,000		86%		6,000,000		6,000,000		2.0	%
Total Senior Secured Trade Finance Participations															111,096,404		111,037,327		36.7	%

Total Investments														$	218,269,140	$	218,210,063

See accompanying notes to the consolidated financial statements.

¹	Refer to Note 3 and 4 of the consolidated financial statements for additional information on the Company’s investments.

²	Fees may include upfront, origination, commitment, facility and/or other fees that the borrower must contractually pay to the Company. Fees, if any, are typically received in connection with term loan transactions and are rarely applicable to trade finance transactions.

Trade finance borrowers may be granted flexibility with respect to repayment relative to the stated maturity date to accommodate specific contracts and/or business cycle characteristics. This flexibility in each case is agreed upon between the Company and the sub-advisor and between the sub-advisor and the borrower.

⁴	Percentage of the Company’s participation in total borrowings outstanding under sub-advisor provided financing facility.

⁵	In connection with a restructure of the underlying facilities, all maturity dates were extended to 7/28/21. Please refer to Note 3 for additional information.

⁶	Principal and interest paid annually. While the original maturity date was 5/15/2017, the maturity date was extended to 2/28/2021 in connection with a restructure of the loan. Refer to Note 3 for additional information.

⁷	Quarterly payments of principal and interest in the amount of $2,143,500 are due starting on 2/15/2020.

⁸	Interest accrues at a variable rate of one-month Libor + 10.5%, which is paid currently, and also includes 4.68% of deferred interest due at maturity.

⁹

The Company, together with its Sub-Advisor, have agreed to extend the principal maturity date to facilitate the strategic sale of this borrower. The borrower has been experiencing some cash flow difficulties, but has made some partial payments of principal. The amortized cost includes $152,923 of interest which was capitalized as of March 31, 2016. This investment was on non-accrual status as of March 31, 2017. Refer to Note 3 for additional information.

₁₀	This loan was issued at a discount. The entire principal, amounting to $18,462,024, is due at maturity. Interest is paid quarterly.

₁₁	Refer to Note 3 for additional information.

₁₂

$4.1 million of this investment has a maturity date of 10/25/15. The Zambian government, as the purchaser of fertilizer from the borrower, is responsible for the repayment of this trade finance transaction. The Company has access to credit insurance should the Zambian government not pay. In addition, the Company ultimately has recourse to the borrower for repayment. This investment was on non-accrual status as of March 31, 2017. Refer to Note 3 for additional information.

₁₃	Principal and interest paid monthly.

₁₄	Principal and interest paid quarterly.

₁₅	Monthly interest only payment. Principal due at maturity.

₁₆	Quarterly interest only payment. Principal due at maturity.

₁₇	Principal and interest paid at maturity.

TriLinc Global Impact Fund, LLC

Consolidated Schedule of Investments

December 31, 2016

Investment Type / Country	Portfolio Company	Sector	Description	Interest		Fees (2)			Maturity (3)	Principal Amount		Participation % (4)		Amortized Cost		Fair Value		% of Net Assets
Senior Secured Term Loan (1)
Brazil	Other Investments (13)	Programming and Data Processing	IT Service Provider		13.50%		2.0	%	10/31/2019	$	10,292,686	N/A		$	10,236,013	$	10,236,013		4.0	%
Indonesia	Other Investments (14)	Primary Nonferrous Metals	Tin Producer		12.00%		0.0	%	6/30/2020		3,000,000	N/A			3,000,000		3,000,000		1.2	%
Peru	Pure Biofuels del Peru S.A.C. (10)	Bulk Fuel Stations and Terminals	Clean Diesel Distributor		11.50%		0.0	%	8/1/2019		15,000,000		30%		15,437,474		15,437,474		6.2	%
Total Senior Secured Term Loan (1)															28,673,487		28,673,487		11.4	%
Senior Secured Term Loan Participations (1)
Brazil	Usivale Industria E Commercio (6)	Agricultural Products	Sugar Producer		12.43%		0.0	%	2/28/2021		2,851,296		100%		2,851,296		2,851,296		1.1	%
Cabo Verde	TRG Cape Verde Holdings Limited (14)	Hotels and Motels	Hospitality Service Provider		13.50%		0.0	%	8/21/2021		17,000,000		100%		17,000,000		17,000,000		6.8	%
Indonesia	PT Titan Mining Indonesia (14)	Street Construction	Infrastructure and Logistics Provider		18.00%		0.0	%	11/22/2019		15,000,000		75%		14,927,195		14,927,195		6.0	%
Nigeria	Helios Maritime I Ltd. (8)	Water Transportation	Marine Logistics Provider		15.80%		0.8	%	9/16/2020		13,434,786		100%		13,360,620		13,360,620		5.3	%
Peru	Corporacion Prodesa S.R.L. (5)	Consumer Products	Diaper Manufacturer	11.50% - 13.50%			0.0	%	12/22/2016 - 7/05/2017		3,900,000		100%		3,900,000		3,900,000		1.6	%
South Africa	Other Investments (14)	Rental of Railroad Cars	Railway Equipment Provider		12.00%		0.0	%	1/31/2020		4,411,650		98%		4,411,650		4,411,650		1.8	%
Zambia	Other Investments (14)	Soap, Detergents, and Cleaning	FMCG Manufacturer		11.00%		0.0	%	11/16/2019		2,000,000		16%		2,000,000		2,000,000		0.8	%
Total Senior Secured Term Loan Participations															58,450,761		58,450,761		23.3	%
Senior Secured Trade Finance Participations (1)
Argentina	Other Investments (15)	Agricultural Products	Agriculture Distributor		9.00%		0.0	%	7/16/2017		10,000,000		67%		10,000,000		10,000,000		4.0	%
Argentina	Other Investments (15), (18)	Consumer Products	Dairy Co-Operative		10.67%		0.0	%	7/29/2017		6,000,000		17%		6,000,000		6,000,000		2.4	%
Argentina	Other Investments (16)	Meat, Poultry & Fish	Beef Exporter		11.50%		0.0	%	11/29/2017		9,000,000		32%		9,000,000		9,000,000		3.6	%
Argentina	Other Investments (16)	Fats and Oils	Oilseed Distributor		8.75%		0.0	%	10/15/2016 - 12/15/2016		6,000,000		100%		6,000,000		6,000,000		2.4	%
Chile	Other Investments (15)	Farm Products	Chia Seed Exporter		10.90%		0.0	%	12/11/2016		2,234,915		100%		2,234,915		2,234,915		0.9	%
Ecuador	Other Investments (15)	Fresh or Frozen Packaged Fish	Shrimp Exporter		9.25%		0.0	%	6/6/2017 - 7/24/2017		5,037,134		46%		5,037,134		5,037,134		2.0	%
Ecuador	Other Investments (15)	Commercial Fishing	Fish Processor & Exporter		9.00%		0.0	%	6/19/2017		1,058,273		100%		1,058,273		1,058,273		0.4	%
Ghana	Genser Energy Ghana Ltd. (17)	Electric Services	Power Producer		11.50%		0.0	%	3/10/2017 - 10/9/2017		19,500,000		49%		19,500,000		19,500,000		7.8	%
Guatemala	Other Investments (11)	Farm Products	Sesame Seed Exporter		12.00%		0.0	%	3/31/2016		907,565		24%		907,565		907,565		0.4	%
Kenya	Other Investments (17)	Miscellaneous Plastics Products	Plastic Products Manufacturer		11.50%		0.0	%	10/9/2017		161,018		27%		161,018		161,018		0.1	%
Mauritius	Other Investments (17)	Groceries and Related Products	Vanilla Exporter	10.98% - 11.10%			0.0	%	7/31/2017 - 11/23/2017		11,195,862		74%		11,195,862		11,195,862		4.5	%
Morocco	Other Investments (17)	Secondary Nonferrous Metals	Scrap Metal Recycler		11.00%		0.0	%	7/17/2017		7,649,945		83%		7,649,945		7,649,945		3.1	%
Namibia	Other Investments (16)	Packaged Foods & Meats	Consumer Goods Distributor		12.00%		0.0	%	10/29/2017		500,000		26%		500,000		500,000		0.2	%
Singapore	Other Investments (7) (17)	Agricultural Products	Agricultural Products Exporter		11.50%		0.0	%	07/02/17		10,000,000		25%		10,000,000		10,000,000		4.0	%
South Africa	Other Investments (17)	Communications Equipment	Electronics Assembler	12.00% - 13.00%			0.0	%	5/21/2017 - 11/20/2017		6,111,941		23%		6,111,941		6,111,941		2.4	%
South Africa	Other Investments (17)	Meat, Poultry & Fish	Meat Processor		14.50%		0.0	%	5/19/2017		675,717		40%		675,717		675,717		0.3	%
South Africa	Other Investments (9)	Food Products	Fruit & Nut Distributor		12.00%		0.0	%	5/22/2015		799,767		18%		799,767		740,690		0.3	%
South Africa	Other Investments (16)	Metals & Mining	Mine Remediation Company		17.50%		0.0	%	6/15/2016 - 8/15/2016		2,234,145		22%		2,234,145		2,234,145		0.9	%
United Kingdom	Other Investments (17)	Coal and Other Minerals and Ores	Metals Trader	9.43% - 9.83%			0.0	%	2/25/2017 - 12/31/17		6,574,351		91%		6,574,351		6,574,351		2.6	%
United Kingdom	Other Investments (17)	Machinery, Equipment, and Supplies	Machinery and Equipment Provider		12.00%		0.0	%	1/29/2017		11,483		1%		11,483		11,483		0.0	%

Investment Type / Country	Portfolio Company	Sector	Description	Interest		Fees (2)			Maturity (3)	Principal Amount		Participation % (4)		Amortized Cost		Fair Value		% of Net Assets
Zambia	Other Investments (12)	Fertilizer & Agricultural Chemicals	Farm Supplies Distributor	12.08% - 12.50%			0.0	%	10/07/15 - 5/3/2016		5,078,526		24%		5,078,526		5,078,526		2.0	%
Zambia	Other Investments (15)	Primary Metal Industries	Integrated Steel Producer		13.00%		0.0	%	8/14/2017 - 9/2/2017		6,000,000		86%		6,000,000		6,000,000		2.4	%
Total Senior Secured Trade Finance Participations															116,730,642		116,671,565		46.5	%

Total Investments														$	203,854,890	$	203,795,813

See accompanying notes to the consolidated financial statements.

¹	Refer to Note 3 and 4 of the consolidated financial statements for additional information on the Company’s investments.

²	Fees may include upfront, origination, commitment, facility and/or other fees that the borrower must contractually pay to the Company. Fees, if any, are typically received in connection with term loan transactions and are rarely applicable to trade finance transactions.

⁴	Percentage of the Company’s participation in total borrowings outstanding under sub-advisor provided financing facility.

⁵

While the original maturity date for the $750,000 warrant facility was 2/15/2015, the maturity date was extended to 12/22/2016 in connection with a restructure of the underlying facility. While the original maturity date for the $1,750,000 inventory facility was 9/30/2016, the maturity date was extended to 12/31/2020 in connection with a restructure of the underlying facility. Please refer to Note 3 for additional information.

⁶	Principal and interest paid annually. While the original maturity date was 5/15/2017, the maturity date was extended to 2/28/2021 in connection with a restructure of the loan. Refer to Note 3 for additional information.

⁷	The transaction is secured by specific collateral held by the borrower’s subsidiaries in Kenya, Tanzania, and Zambia.

⁸	Interest accrues at a variable rate of one-month Libor + 10.5%, which is paid currently, and also includes 4.68% of deferred interest due at maturity.

⁹

The Company, together with its Sub-Advisor, have agreed to extend the principal maturity date to facilitate the strategic sale of this borrower. The borrower has been experiencing some cash flow difficulties, but has made some partial payments of principal. The amortized cost includes $152,923 of interest which was capitalized as of March 31, 2016. This investment was on non-accrual status as of December 31, 2016. Refer to Note 3 for additional information.

₁₀	This loan was issued at a discount. The entire principal, amounting to $18,462,024, is due at maturity. Interest is paid quarterly.

₁₁	Refer to Note 3 for additional information.

₁₂

$4.1 million of this investment has a maturity date of 10/25/15. The Zambian government, as the purchaser of fertilizer from the borrower, is responsible for the repayment of this trade finance transaction. The Company has access to credit insurance should the Zambian government not pay. In addition, the Company ultimately has recourse to the borrower for repayment. This investment was on non-accrual status as of December 31, 2016. Refer to Note 3 for additional information.

₁₃	Principal and interest paid monthly.

₁₄	Principal and interest paid quarterly.

₁₅	Monthly interest only payment. Principal due at maturity.

₁₆	Quarterly interest only payment. Principal due at maturity.

₁₇	Principal and interest paid at maturity.

₁₈	While the original maturity date was 10/27/2016, the maturity date was extended to 7/29/2017 in connection with a restructure of the underlying facility. Please refer to Note 3 for additional information.

TRILINC GLOBAL IMPACT FUND, LLC

Notes to Consolidated Financial Statements

March 31, 2017

(Unaudited)

Note 1. Organization and Operations of the Company

TriLinc Global Impact Fund, LLC (the “Company”) was organized as a Delaware limited liability company on April 30, 2012 and formally commenced operations on June 11, 2013. The Company makes impact investments in Small and Medium Enterprises, known as SMEs, which the Company defines as those business having less than 500 employees, primarily in developing economies that provide the opportunity to achieve both competitive financial returns and positive measurable impact. The Company uses the proceeds raised from the issuance of units to invest in SMEs through local market sub-advisors in a diversified portfolio of financial assets, including direct loans, convertible debt instruments, trade finance, structured credit and preferred and common equity investments. To a lesser extent, the Company may also make impact investments in companies that may not meet the Company’s technical definition of SMEs due to a larger number of employees but that also provide the opportunity to achieve both competitive financial returns and positive measurable impact. The Company generally expects that such investments will have similar investment characteristics as SMEs as defined by the Company. The Company’s investment objectives are to generate current income, capital preservation and modest capital appreciation primarily through investments in SMEs. The Company is externally managed by TriLinc Advisors, LLC (the “Advisor”). The Advisor is an investment advisor registered with the SEC.

TriLinc Global, LLC (the “Sponsor”) owns 85% of the units of the Advisor, and is the sponsor of the Company. Strategic Capital Advisory Services, LLC (“SCAS”) owns 15% of the Advisor, and is considered an affiliate of the Company. The Sponsor employs staff who operate both the Advisor and the Company. The Sponsor, the Advisor and SCAS are Delaware limited liability companies.

In May 2012, the Advisor purchased 22,161 Class A units for aggregate gross proceeds of $200,000. The Company commenced its initial public offering of up to $1.5 billion in units of limited liability company interest (the “Offering”) on February 25, 2013. On June 11, 2013, the Company satisfied its minimum offering requirement of $2,000,000 when the Sponsor purchased 321,330 Class A units for aggregate gross proceeds of $2,900,000 and the Company commenced operations. The Company elected to extend the offering period for its primary offering. The primary offering officially terminated on March 31, 2017. The Company continues to offer and sell units pursuant to its Distribution Reinvestment Plan (“DRP”)

Although the Company was organized and intends to conduct its business in a manner so that it is not required to register as an investment company under the Investment Company Act of 1940, as amended, the consolidated financial statements are prepared using the specialized accounting principles of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies. Overall, the Company’s management believes the use of investment company accounting makes the Company’s financial statements more useful to investors and other financial statement users since it allows a more appropriate basis of comparison to other entities with similar objectives.

To assist the Company in achieving its investment objective, the Company makes investments via wholly owned subsidiaries (the “Subsidiaries”), all of which are Cayman Islands exempted companies. In June 2016, the Company ~~created TriLinc Global Impact Fund Cayman, Ltd. (“TGIFC”) to allow the Company to use financial leverage.~~ The Company transferred all of the shares of all of its Subsidiaries to TGIFC. The Subsidiaries own all of the Company’s investments. As of March 31, 2017, the Company’s Subsidiaries are as follows:

•

TriLinc Global Impact Fund – Asia, Ltd.

•

TriLinc Global Impact Fund – Latin America, Ltd.

•

TriLinc Global Impact Fund – Trade Finance, Ltd.

•

TriLinc Global Impact Fund – African Trade Finance, Ltd.

•

TriLinc Global Impact Fund – Africa, Ltd.

•

TriLinc Global Impact Fund – Latin America II, Ltd.

•

TriLinc Global Impact Fund – African Trade Finance II, Ltd.

•

TriLinc Global Impact Fund – Latin America III, Ltd.

•

TriLinc Global Impact Fund – Asia II, Ltd.

•

TriLinc Global Impact Fund – Asia III, Ltd.

•

TriLinc Global Impact Fund – Cayman, Ltd.

Through March 31, 2017, the Company has made, through its subsidiaries, loans in several countries located in South America, Asia, Africa, and Europe.

Note 2. Significant Accounting Policies

Basis of Presentation

The Company’s financial information is prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company follows the accounting and reporting guidance in the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946 — Financial Services, Investment Companies (“ASC 946”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements are presented in United States (“U.S.”) dollars, which is the functional and reporting currency of the Company and all its subsidiaries.

The interim consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q. Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP is not required for interim reporting purposes and has been omitted herein. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the Securities and Exchange Commission (“SEC”) on March 31, 2017.

The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results that ultimately may be achieved for the full year ending December 31, 2017.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, which were established to hold certain investments of the Company. The Company owns 100% of each subsidiary and, as such, the subsidiaries are consolidated into the Company’s consolidated financial statements. Transactions between subsidiaries, to the extent they occur, are eliminated in consolidation. The consolidated financial statements reflect all adjustments, consisting solely of normal recurring accruals, that, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition as of and for the periods presented.

Cash

Cash consists of demand deposits at a financial institution located in the U.S. Such deposits may be in excess of the Federal Deposit Insurance Corporation insurance limits. The Company considers the credit risk of this financial institution to be remote and has not experienced and does not expect to experience any losses in any such accounts.

Prepaid expenses

Prepaid expenses represent prepaid insurance which is being amortized over the term of the insurance policy, which is one year. The amortization of prepaid expenses for the three months ended March 31, 2017 and 2016 is reimbursable to the Company by the Sponsor under the Amended and Restated Operating Expense Responsibility Agreement.

Revenue Recognition

The Company records interest income on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans for accounting purposes if there is reason to doubt the ability to collect such interest. Structuring, upfront and similar fees are recorded as a discount on investments purchased and are accreted into interest income, on a straight line basis, which the Company has determined not to be materially different from the effective yield method.

The Company records prepayment fees for loans and debt securities paid back to the Company prior to the maturity date as income upon receipt.

The Company generally places loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that principal or interest will be collected. If, however, management believes the principal and interest will be collected, a loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment of the financial condition of the borrower. Non-accrual loans are generally restored to accrual status when past due principal and interest is paid and, in the Company’s management’s judgment, is likely to remain current over the remainder of the term. At March 31, 2017, two portfolio companies were on non-accrual status with an aggregate fair value of $5,805,255 or 2.7% of the fair value of the Company’s total investments. Interest income not recorded

relative to the original terms of the loans to the two companies on non-accrual status amounted to approximately $192,300 for the three months ended March 31, 2017.

Valuation of Investments

The Company applies fair value accounting to all of its investments in accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, the Company has categorized its investments into a three-level fair value hierarchy as discussed in Note 4.

ASC 820 establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability of inputs used in measuring investments at fair value. Market price observability is affected by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Based on the observability of the inputs used in the valuation techniques, the Company is required to provide disclosures on fair value measurements according to the fair value hierarchy. The fair value hierarchy ranks the observability of the inputs used to determine fair values. Investments carried at fair value are classified and disclosed in one of the following three categories:

•

Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2 — Valuations based on inputs other than quoted prices included in Level 1, which are either directly or indirectly observable.

•

Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market or cost approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. Certain investments may be valued based upon estimated value of underlying collateral and include adjustments deemed necessary for estimates of costs to obtain control and liquidate available collateral. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

The inputs used in the determination of fair value may require significant judgment or estimation.

Investments for which market quotations are readily available are valued at those quotations. Most of the Company’s investments are loans to private companies, which are not actively traded in any market and for which quotations are not available. For those investments for which market quotations are not readily available, or when such market quotations are deemed by the Advisor not to represent fair value, the Company’s board of managers has approved a multi-step valuation process to be followed each fiscal quarter, as described below:

Each investment is valued by the Advisor in collaboration with the relevant sub-advisor;

For all investments with a maturity of greater than 12 months, the Company has engaged Duff & Phelps, LLC (“Duff & Phelps”) to conduct a review on the reasonableness of the Company’s internal estimates of fair value on each asset on a quarterly rotating basis, with each of such investments being reviewed at least annually, and provide an opinion that the Advisor’s estimate of fair value for each investment is reasonable;

The audit committee of the Company’s board of managers reviews and discusses the preliminary valuation prepared by the Advisor and any opinion rendered by Duff & Phelps; and

The board of managers discusses the valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on the input of the Advisor, Duff & Phelps and the audit committee. The board of managers is ultimately responsible for the determination, in good faith, of the fair value of each investment.

Below is a description of factors that the Company’s board of managers may consider when valuing the Company’s investments.

Fixed income investments are typically valued utilizing a market approach, income approach, cost approach, or all combinations of these approaches (and any others, as appropriate) and is used less frequently due to the private nature of the Company’s investments. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including the sale of a business). The income approach uses valuation techniques to convert future amounts (for example, interest and principal payments) to a single present value amount (discounted) calculated based on an appropriate discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts. The cost approach is a valuation technique that uses the concept of replacement cost as an indicator of value. The premise of the cost approach holds that a prudent investor would pay no more for an asset than the amount for which the asset could be replaced. To clarify, the cost approach as a method for valuing an investment is to be distinguished from holding an investment at cost as of the initial investment date. In following a given approach, the types of factors that the Company may take into account in valuing the Company’s investments include, as applicable:

•

Macro-economic factors that are relevant to the investment or the underlying obligor

•

Industry factors that are relevant to the investment or the underlying obligor

•

Historical and projected financial performance of the obligor based on most recent financial statements

•

Borrower draw requests and payment track record

•

Loan covenants, duration and drivers

•

Performance and condition of the collateral (nature, type & value) that supports the investment

•

Sub-Advisor recommendation as to possible impairment or reserve, including updates and feedback

•

For participations, the Fund’s ownership percentage of the overall facility

•

Key inputs and assumptions that are believed to be most appropriate for the investment and the approach utilized

The Company may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. The Company may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors the Company deems relevant in measuring the fair values of the Company’s investments.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

The Company measures net realized gains or losses by the difference between the net proceeds from the repayment or sale on investments and the amortized cost basis of the investment including unamortized upfront fees and prepayment penalties. Realized gains or losses on the disposition of an investment are calculated using the first in first out (FIFO) method, utilizing the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Payment-in-Kind Interest

The Company may have investments that contain a payment-in-kind, or PIK, interest provision. For loans with contractual PIK interest, any interest will be added to the principal balance of such investments and be recorded as income, if the valuation indicates that such interest is collectible.

Distribution Fee and Out-of-Period Adjustment

The Company pays a distribution fee equal to 0.8% per annum of the Company’s current estimated value per share for each Class C unit sold in the Offering. The aggregate amount of underwriting compensation for the Class A, Class C and Class I units, including the distribution fee for the Class C units, cannot exceed the Financial Industry Regulatory Authority’s 10% cap on underwriting compensation. The distribution fee is not paid at the time of purchase. The distribution fee is payable monthly in arrears, as it becomes contractually due.

In prior periods, the Company had been recording the fees as a periodic charge to equity as they are incurred. Starting in June 2016, the Company determined to account for the fees as a charge to equity at the time each Class C unit is sold in its Offering and record a corresponding liability for the estimated amount to be paid in future periods. At March 31, 2017, the estimated unpaid distribution fee amounted to $2,140,000. The adjustments for the amounts of distribution fees which were not previously recorded as a liability amounted to approximately $812,000 and $366,000, respectively, as of March 31, 2016 and December 31, 2015 and were deemed immaterial.

Income Taxes

The Company is classified as a partnership for U.S. Federal income tax purposes. As such, it allocates all income or loss to its unitholders according to their respective percentage of ownership, and is generally not subject to tax at the entity level. Therefore, no provision for federal or state income taxes has been included in these financial statements.

The Company may be subject to withholding taxes on income and capital gains imposed by certain countries in which the Company invests. The withholding tax on income is netted against the income accrued or received. Any reclaimable taxes are recorded as income. The withholding tax on realized or unrealized gain is recorded as a liability.

The Company follows the guidance for uncertainty in income taxes included in the ASC 740, Income Taxes. This guidance requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including the resolution of any related appeals or litigation processes, based on the technical merits of the position.

As of March 31, 2017, no tax liability for uncertain tax provision had been recognized in the accompanying financial statements nor did the Company recognize any interest and penalties related to unrecognized tax benefits. The earliest year that the Company’s income tax returns are subject to examination is the period ending December 31, 2013.

Unitholders are individually responsible for reporting income or loss, to the extent required by the federal and state income tax laws and regulations, based upon their respective share of the Company’s income and expense as reported for income tax purposes.

Calculation of Net Asset Value

The Company’s net asset value is calculated on a quarterly basis and commenced with respect to the first full quarter after the Company commenced operations. The Company calculates its net asset value per unit by subtracting total liabilities from the total value of the Company’s assets on the date of valuation and dividing the result by the total number of outstanding units on the date of valuation. The net asset value per Class A, Class C and Class I units is calculated on a pro-rata basis based on units outstanding.

Net Income (Loss) per Unit

Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units outstanding during the period. Diluted net income or loss per unit is computed by dividing net income (loss) by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. The Company did not have any potentially dilutive units outstanding at March 31, 2017 and 2016.

Organization and Offering Costs

The Sponsor has incurred organization and offering costs on behalf of the Company. Organization and offering costs are reimbursable to the Sponsor to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of the gross offering proceeds (the “O&O Reimbursement Limit”) raised from the Offering and will be accrued and payable by the Company only to the extent that such costs do not exceed the O&O Reimbursement Limit. Reimbursement of organization and offering costs that exceed the O&O Reimbursement Limit will be expensed in the period they become reimbursable, which is dependent on the gross offering proceeds raised in such period, and are therefore not included on the Statements of Assets and Liabilities as of March 31, 2017 and December 31, 2016. These expense reimbursements are subject to regulatory caps and approval by the Company’s board of managers. If the Company had sold the maximum amount of the Offering, it anticipated that such expenses would have equaled approximately 1.25% of the gross proceeds raised. However, such expenses will exceed this percentage because the Primary Offering has terminated and the maximum amount was not raised. Based on the subscriptions processed through March 31, 2017, such expenses equaled to 4.79% of the gross proceeds. Reimbursements to the Sponsor are included as a reduction to net assets on the Consolidated Statement of Changes in Net Assets.

The Company may reimburse the dealer manager for certain expenses that are deemed underwriting compensation. Assuming an aggregate selling commission and a dealer manager fee of 9.75% of the gross offering proceeds (which assumes all offering proceeds come from Class A units), the Company would reimburse the dealer manager in an amount up to 0.25% of the gross offering proceeds. Because the aggregate selling commission and dealer manager fees will be less than 9.75% of the gross offering proceeds due to a portion of the offering proceeds coming from the sale of Class C and Class I units, the Company may reimburse the dealer manager for expenses in an amount greater than 0.25% of the gross offering proceeds, provided that the Company will not pay or reimburse any of the foregoing costs to the extent such payment would cause total underwriting compensation to exceed 10.0% of the

gross proceeds of the Primary Offering as of the termination of the Offering, as required by the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”).

Operating Expense Responsibility Agreement

On May 10, 2017, the Company, Advisor and the Sponsor entered into an Amended and Restated Operating Expense Responsibility Agreement (“Responsibility Agreement”) originally effective as of June 11, 2013 and covering expenses through March 31, 2017. Since the inception of the Company through March 31, 2017, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $10,476,300 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $3,662,300 of expenses, which have been accrued by the Sponsor as of March 31, 2017. Such expenses may not be reimbursable to the Sponsor until the Company has raised $200 million of gross proceeds, provided any such reimbursement does not cause the Company’s net asset value per unit to fall below the prior quarter’s net asset value per unit (the “Gross Proceeds Hurdle”). To the extent the Company does not meet the Gross Proceeds Hurdle in any quarter, no amount will be payable by the Company for reimbursement to the Sponsor. While the Company has raised over $200 million of gross proceeds in the Offering as of March 31, 2017, the Company has not met the Gross Proceeds Hurdle for the quarter ended March 31, 2017 because any reimbursement would have caused the Company’s net asset value per unit to fall below the prior quarter. Therefore, expenses of the Company covered by the Responsibility Agreement have not been recorded as expenses of the Company as of March 31, 2017. In accordance with ASC 450, Contingencies, such expenses will be accrued and payable by the Company in the period that they become both probable and estimable. Following the end of the Offering, the Sponsor could demand the reimbursement of operating expenses covered by the Responsibility Agreement to the extent it does not cause a drop in the net asset value per unit.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the “JOBS Act”), emerging growth companies can delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. The Company is choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, the Company’s financial statements may not be comparable to those of companies that comply with public company effective dates. There are no new or revised accounting standards that the Company has not adopted.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The update supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In July 2015, the FASB deferred the implementation of this standard by one year. ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. The adoption of the amended guidance in ASU 2014-09 is not expected to have a significant effect on the Company’s financial statements.

In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40).” ASU 2014-15 addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter. Management has adopted this guidance effective for the fourth quarter of 2016.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance requires companies to apply the requirements in the year of adoption through cumulative adjustment with some aspects of the update requiring a prospective transition approach. We are currently evaluating the potential impact of the pending adoption of ASU 2016-13 on our consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: (i) debt prepayment or debt extinguishment, (ii) settlement of zero-coupon bonds, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interest in securitizations transactions, and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. If it is impracticable for a company to apply ASU 2016-15 retrospectively, requirements may be applied prospectively as of the earliest date practicable. We are currently evaluating the potential impact of the pending adoption of ASU 2016-15 on our consolidated financial statements.

Risk Factors

The Company has limited operating history and is subject to the business risks and uncertainties associated with any new business. As an externally-managed Company, the Company is largely dependent on the efforts of the Advisor and other service providers and is dependent on the Sponsor for financial support.

The Company is subject to financial market risks, including changes in interest rates. Global economies and capital markets can and have experienced significant volatility, which has increased the risks associated with investments in collateralized private debt instruments. Investment in the Company carries risk and there are no guarantees that the Company’s investment objectives will be achieved. The Company is also exposed to credit risk related to maintaining all of its cash at a major financial institution.

The Company’s investments consist of loans, loan participations and trade finance that are illiquid and non-traded, making purchase or sale of such financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.

The value of the Company’s investments in loans may be detrimentally affected to the extent, among other things, that a borrower defaults on its obligations, there is insufficient collateral securing the loan and/or there are extensive legal and other costs incurred in collecting on a defaulted loan, observable secondary or primary market yields for similar instruments issued by comparable companies increase materially or risk premiums required in the market between smaller companies, such as the Company’s borrowers, and those for which market yields are observable increase materially. In addition, as of March 31, 2017, all the Company’s investment are denominated in U.S. dollars. If the U.S. dollar rises, it may become more difficult for borrowers to make loan payments if the borrowers are operating in markets where the local currencies are depreciating relative the U.S. dollar.

At March 31, 2017, the Company’s investment portfolio included 35 companies and was comprised of $28,201,096 or 12.9% in senior secured term loans, $78,971,640 or 36.2% in senior secured term loan participations, and $111,037,327 or 50.9% in senior secured trade finance participations. The Company’s largest loan by value was $17,000,000 or 7.8% of total investments. The Company’s 5 largest loans by value comprised 35.3% of the Company’s portfolio at March 31, 2017. Participation in loans amounted to 87.1% of the Company’s total portfolio at March 31, 2017.

Note 3. Investments

As of March 31, 2017, the Company’s investments consisted of the following:

					Percentage
	Amortized Cost		Fair Value		of Total Investments
Senior secured term loans	$	28,201,096	$	28,201,096		12.9	%
Senior secured term loan participations		78,971,640		78,971,640		36.2	%
Senior secured trade finance participations		111,096,404		111,037,327		50.9	%
Total investments	$	218,269,140	$	218,210,063		100.0	%

Participations

The majority of the Company’s investments are in the form of Participation Interests (“Participations”). Participations are interests, which may be divided or undivided, in financing facilities. Participations may be interests in one specific loan or trade finance transaction, several loans or trade finance transactions under a facility, or may be interests in an entire facility. The

Company’s rights under Participations include, without limitations, all corresponding rights in payments, collaterals, guaranties, and any other security interests obtained in the underlying financing facilities.

Interest Receivable

Depending on the specific terms of the Company’s investments, interest earned by the Company is payable either monthly, quarterly, or, in the case of most trade finance investments, at maturity. As such, some of the Company’s trade finance investments have up to 300 days of accrued interest receivable as of March 31, 2017. In addition, certain of the Company’s investments in term loans accrue deferred interest which is not payable until the maturity of the loans. Accrued deferred interest included in the interest receivable balance as of March 31, 2017 and December 31, 2016 amounted to $2,171,976 and $1,403,416, respectively. The Company’s interest receivable balances at March 31, 2017 and December 31, 2016 are recorded at the amounts that the Company expects to collect.

Trade Finance

Trade finance encompasses a variety of lending structures that support the export, import or sale of goods between producers and buyers in various countries and across various jurisdictions. The strategy is most prevalent in the financing of commodities. The Company’s trade finance positions typically fall into two broad categories: pre-export financing and receivable/inventory financing. Pre-export financing represent advances to borrower based on proven orders from buyers. For trade finance, the structure and terms vary according to the nature of the transaction being financed. The structure can take the form of a revolver (up to one year) with draw requests with maturity up to one year based on collateral and performance requirements. The structure can also be specific to the individual transaction being financed, which typically have shorter durations of 60 – 180 days. In terms of underwriting, particular consideration is given to the following:

•

nature of the goods or transaction being financed,

•

the terms associated with the sale and repayment of the goods,

•

the execution risk associated with producing, storing and shipment of the goods,

•

the financial and performance profile of both the borrower and end buyer(s),

•

the underlying advance rate and subsequent LTV associated with lending against the goods that serve to secure the facility or transaction,

•

collateral and financial controls (collection accounts and inventory possession),

•

third party inspections and insurance, and

•

the region, country or jurisdiction in which the financing is being completed.

Collateral varies by transaction, but is typically raw or finished goods inventory, and/or receivables. In the case of pre-export finance, the transaction is secured by purchase orders from buyers or offtake contracts, which are agreements between a buyer and seller to purchase/sell a future product.

Terms depend on the nature of the facility or transaction being financed. As such, they depend on the credit profile of the underlying financing, as well as the speed and detail associated with the request for financing. Interest can be paid as often as monthly or quarterly on revolving facilities (one year in duration) or at maturity when dealing with specific transactions with shorter duration, which is the case for the majority of the Company’s trade finance positions. At times, settlement can be delayed due to documentation, shipment, transportation or port clearing issues, delays associated with the end buyer or off-taker assuming possession, possible changes to contract or offtake terms, and the aggregation of settlement of multiple individual transactions. Conversely, at times payments are made ahead of schedule as transactions either clear faster than expected, borrowers decide to prepay or pay down ahead of schedule, counterparties clear multiple individual transactions in one settlement, or less expensive financing is secured by the borrower.

On occasion, the Company may receive notice that a borrower or counterparty intends to pay ahead of schedule or in one lump sum (settling multiple draw requests all at once). Depending on timing and the ability to redeploy these funds, combined with projected inflows of fund capital, these outsize payments can negatively impact the Company’s performance. In these situations, the credit profile of the borrower, and the transaction in general, is reviewed with the sub-advisor and a request may be made to either stagger payments, where at all possible, or request that payment only be made at the end of that specific financial quarter. These requests or accommodations, which happen very rarely, will only be made where the Company has strong comfort in and around the credit profile of the transaction or borrower.

Prodesa

As of March 31, 2017, the Company’s investment in Corporacion Prodesa S.R.L. (“Prodesa”) is comprised of two senior secured term loan participations with an aggregate balance of $3,040,000 and $1,750,000 due under a senior secured purchase order revolving credit facility. The Company has been working with Prodesa to re-align its operations since 2015, starting with a senior secured purchase order revolving credit facility. The purchase order facility is secured by specific purchase orders from customers of Prodesa, as well as pledges of additional unencumbered assets and all shares of Prodesa. A number of draws and repayments have occurred under this facility. For example, during the year ended December 31, 2016, the Company funded seven additional draws under the purchase order facility for an aggregate of $1,750,000.

On January 31, 2017, the Company entered into a series of loan amendments with Prodesa. First, the $2,000,000 term loan facility with an original maturity date of July 15, 2016 was amended to increase the commitment to $3,540,000 to finance the acquisition of additional machinery and equipment and refinance existing property. As part of the amendment, the loan facility also extended the maturity date to July 28, 2021, and amended the interest rate on the $3,540,000 loan to 12.00% per annum, reflecting the increased and improved collateral supporting the loan facility. Separately, the Company simultaneously entered into amendments for the $750,000 inventory loan facility and the $1,750,000 purchase order facility to extend those facilities to mature concurrently with the amended term loan facility above, as each facility is cross-defaulted and cross-collateralized. The $750,000 inventory loan, with an original maturity date February 15, 2015 and previously extended to December 22, 2016, now matures on July 28, 2021. The $1,750,000 purchase order facility, with an original maximum term of December 31, 2020, now matures on July 28, 2021.

The Company has estimated the fair value of the Prodesa loans as of March 31, 2017 at $4,790,000 based on the income valuation approach as further described in Note 4.

Usivale

In May 2015, one of the Company’s borrowers, Usivale Industria E Commercio (“Usivale”), with an aggregate principal balance of $3,000,000, notified the Company that it would be unable to make its monthly interest payment for May 2015 and requested the deferment of interest payments until October 2015. Usivale is a sugar producer located in Brazil that has been in business since 1958. Usivale’s business is highly cyclical and it generates the majority of its revenues during the first and fourth quarters of any calendar year. In accordance with the terms of the loans, the Company originally increased the annual interest rate charged Usivale from 12.43% to 17.43%. On August 27, 2015, Usivale filed for judicial recuperation or recovery (the “Filing”) with the local court in Brazil. The Filing was led by the ongoing pricing pressure within the sugar market, leading up to the material drop in the month of August, when prices reached a seven year low. The Filing provided for a 180 day “standstill” period relative to any claim for payment by Usivale’s creditors. During this period, Usivale was permitted to operate as usual, but was required to develop and present a recovery plan to its creditors to allow it to emerge from judicial recovery. Usivale submitted an initial plan to the judicial court for review at the end of November 2015, which was published by the court on January 19, 2016. Creditors had 30 days to review and either approve or reject the plan. As the only secured creditor within the greater credit group, the Company’s acceptance of any plan was required. The Company placed Usivale on non-accrual status effective August 27, 2015, the date of the judicial recovery filing.

On February 17, 2016, the Company filed a rejection of the plan presented by Usivale. In accordance with the judicial recovery process, a general assembly of Usivale’s creditors was held on June 14, 2016 and an agreed upon restructure plan was submitted to the court and subsequently approved by the court on October 7, 2016. Under the restructure plan, interest on the principal started accruing effective July 1, 2016 at an annual rate of 12.43% and Usivale is required to make annual principal payments starting in the fourth quarter of 2016. On November 10, 2016, the Company received payments of principal and interest of $316,777 and $144,390, respectively. The Company recorded the $144,390 payment as interest income and stated accruing interest on the unpaid principal effective November 10, 2016. As of March 31, 2017, the principal balance of the Usivale loans amounted to $2,851,296 and the Company has estimated the fair value of the Usivale loans at $2,851,296, which is based on a discounted cash flow analysis (income approach).

Fruit and Nut Distributor

one of the Company’s sub-advisors now owns 40% of the Distributor. Accordingly, the Company placed this participation on non-accrual status effective February 1, 2016 and interest not recorded relative to the original terms of this participation amounted to approximately $34,500 for the three months ended March 31, 2017. Based on the information available to the Company and according to its valuation policies, the Company had estimated the fair value of its investment in the Distributor to be $726,729 as of March 31, 2017.

Farm Supplies Distributor

The Company has several trade finance participations in a facility to a farm supplies distributor, Neria Investment Ltd. (“Neria”), located in Zambia with an aggregate principal balance of $5,078,526 and net accrued interest of $550,370 as of March 31, 2017. The participations have maturity dates ranging from October 25, 2015 to May 3, 2016. The facility serves to finance the shipment of fertilizer to the Zambian government and is secured by receivables. The delay in repayment is due to slow payment of the receivables by the Zambian Government caused by a national budget deficit. The Company placed this participation on non-accrual status effective July 1, 2016 and interest not recorded relative to the original terms of this participation amounted to approximately 157,800 for the three months ended March 31, 2017. In addition, during the year ended December 31, 2016, the Company reversed $550,370 of interest income that had been previously accrued. On December 1, 2016, the Company’s sub-advisor declared an event of default and filed a claim against the credit insurance policy. The insurer has 180 days from time of filing (June 1, 2017) to conclude its collection process and make payment against the policy. The Company has determined that there is sufficient collateral, including a credit insurance policy, should the Zambian government or subsequently Neria not pay, to cover the entire principal and interest balance due from Neria and has determined, in accordance with its valuation policy that the fair value should remain at $5,078,526 as of March 31, 2017.

Sesame Seed Exporter

The Company has a trade finance participation with a Sesame Seed Exporter (“the Exporter”) located in Guatemala, with a principal balance outstanding of $907,565 and accrued interest of $36,605 as of March 31, 2017. The participation has a maturity date of March 31, 2016 and is secured by inventory. During 2016, the Exporter lost a major customer, which resulted in a slowdown in business, affecting its ability to repay the amount due under the participation. However, the Exporter has been able to secure new customers to replace the lost order(s), which will enable the Exporter to start making payments to the Company. In addition, the Exporter has made three principal payments totaling $92,435 during October and November 2016 and one interest payment of $90,402 in February 2017. The Company has determined that there is sufficient collateral to support the repayment of this participation and has determined, in accordance with its valuation policy, that the fair value of this investment should remain at $907,565 as of March 31, 2017.

As of December 31, 2016, the Company’s investments consisted of the following:

					Percentage
	Amortized Cost		Fair Value		of Total Investments
Senior secured term loan	$	28,673,487	$	28,673,487		14.1	%
Senior secured term loan participations		58,450,761		58,450,761		28.7	%
Senior secured trade finance participations		116,730,642		116,671,565		57.2	%
Total investments	$	203,854,890	$	203,795,813		100.0	%

The industry composition of the Company’s portfolio, at fair market value as of March 31, 2017 and December 31, 2016, was as follows:

	As of March 31, 2017					As of December 31, 2016
	Fair		Percentage			Fair		Percentage
Industry	Value		of Total			Value		of Total
Agricultural Products	$	15,351,295		7.0	%	$	22,851,296		11.2	%
Bulk Fuel Stations and Terminals		15,703,374		7.2	%		15,437,474		7.6	%
Chemicals and Allied Products		5,027,157		2.3	%		—		—
Coal and Other Minerals and Ores		7,150,949		3.3	%		6,574,351		3.2	%
Commercial Fishing		4,887,594		2.2	%		1,058,273		0.5	%
Communications Equipment		1,644,431		0.8	%		6,111,941		3.0	%
Consumer Products		10,790,000		4.9	%		9,900,000		4.9	%
Electric Services		14,500,000		6.6	%		19,500,000		9.6	%
Farm Products		2,372,466		1.1	%		3,142,480		1.5	%
Fats and Oils		12,000,000		5.5	%		6,000,000		2.9	%
Fertilizer & Agricultural Chemicals		5,078,526		2.3	%		5,078,526		2.5	%
Fresh or Frozen Packaged Fish		8,770,449		4.0	%		5,037,134		2.5	%
Food Products		1,517,799		0.7	%		740,690		0.4	%
Groceries and Related Products		7,468,625		3.4	%		11,195,862		5.5	%
Hotels and Motels		17,000,000		7.8	%		17,000,000		8.3	%
Land Subdividers and Developers		14,858,037		6.8	%		—		—
Lumber and Other Construction Materials		4,099,375		1.9	%		11,483		0.0	%
Meat, Poultry & Fish		9,302,324		4.3	%		9,675,717		4.7	%
Metals & Mining		1,234,145		0.6	%		2,234,145		1.1	%
Miscellaneous Plastics Products		161,018		0.1	%		161,018		0.1	%
Packaged Foods & Meats		500,000		0.2	%		500,000		0.2	%
Primary Nonferrous Metals		3,000,000		1.4	%		3,000,000		1.5	%
Primary Metal Industries		6,000,000		2.7	%		6,000,000		2.9	%
Programming and Data Processing		9,497,722		4.4	%		10,236,013		5.0	%
Rental of Railroad Cars		4,136,861		1.9	%		4,411,650		2.2	%
Secondary Nonferrous Metals		5,849,626		2.7	%		7,649,945		3.8	%
Soap, Detergents, and Cleaning		1,810,151		0.8	%		2,000,000		1.0	%
Street Construction		14,933,436		6.8	%		14,927,195		7.3	%
Water Transportation		13,564,703		6.2	%		13,360,620		6.6	%
Total	$	218,210,063		100.0	%	$	203,795,813		100.0	%

The table below shows the portfolio composition by geographic classification at fair value as of March 31, 2017 and December 31, 2016:

	As of March 31, 2017					As of December 31, 2016
	Fair		Percentage			Fair		Percentage
Country	Value		of Total			Value		of Total
Argentina	$	39,500,000		18.1	%	$	31,000,000		15.2	%
Brazil		12,349,016		5.7	%		13,087,309		6.4	%
Cabo Verde		17,000,000		7.8	%		17,000,000		8.3	%
Chile		1,464,901		0.7	%		2,234,915		1.1	%
Ecuador		13,658,044		6.3	%		6,095,407		3.0	%
Ghana		14,500,000		6.6	%		19,500,000		9.6	%
Guatemala		907,565		0.4	%		907,565		0.4	%
Indonesia		17,933,436		8.2	%		17,927,195		8.8	%
Italy		4,099,375		1.9	%		—		—
Kenya		161,018		0.1	%		161,018		0.1	%
Malaysia		5,027,157		2.3	%		—		—
Mauritius		7,468,625		3.4	%		11,195,862		5.5	%
Morocco		5,849,626		2.7	%		7,649,945		3.8	%
Namibia		15,358,037		7.0	%		500,000		0.2	%
Nigeria		13,564,703		6.2	%		13,360,620		6.6	%
Peru		20,493,374		9.4	%		19,337,474		9.5	%
Singapore		-		—			10,000,000		4.9	%
South Africa		8,044,490		3.7	%		14,174,143		7.0	%
United Kingdom		7,150,949		3.3	%		6,585,834		3.2	%
Zambia		12,888,677		5.9	%		13,078,526		6.4	%
Uruguay		791,070		0.4	%		—		—
Total	$	218,210,063		100.0	%	$	203,795,813		100.0	%

Note 4. Fair Value Measurements

The following table summarizes the valuation of the Company’s investments by the fair value hierarchy levels required under ASC 820 as of March 31, 2017:

	Fair
	Value		Level 1		Level 2		Level 3
Senior secured term loans	$	28,201,096	$	—	$	—	$	28,201,096
Senior secured term loan participations		78,971,640		—		—		78,971,640
Senior secured trade finance participations		111,037,327		—		—		111,037,327
Total	$	218,210,063	$	—	$	—	$	218,210,063

The following table summarizes the valuation of the Company’s investments by the fair value hierarchy levels required under ASC 820 as of December 31, 2016:

	Fair
	Value		Level 1		Level 2		Level 3
Senior secured term loan	$	28,673,487	$	—	$	—	$	28,673,487
Senior secured term loan participations	$	58,450,761						58,450,761
Senior secured trade finance participations		116,671,565		—		—		116,671,565
Total	$	203,795,813	$	—	$	—	$	203,795,813

The following is a reconciliation of activity for the three months ended March 31, 2017, of investments classified as Level 3:

	Fair Value at December 31, 2016		Purchases		Maturities or Prepayments			Accretion of discounts		Net change in unrealized appreciation (depreciation)		Fair Value at March 31, 2017
Senior secured term loans	$	28,673,487			$	(746,937	)	$	274,546	$	—	$	28,201,096
Senior secured term loan participations		58,450,761		21,317,157		(815,555	)		19,277		—		78,971,640
Senior secured trade finance participations		116,671,565		53,386,426		(59,020,664	)		—		—		111,037,327
Total	$	203,795,813	$	74,703,583	$	(60,583,156	)	$	293,823	$	-	$	218,210,063

There were no realized gains or losses for any of the Company’s investments classified as Level 3 during the three months ended March 31, 2017 and 2016.

As of March 31, 2017, all of the Company’s portfolio investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the Company’s investments as of March 31, 2017:

Fair value

Valuation technique

Unobservable input

Range (weighted average)

Senior secured trade finance participations (1)

110,310,598

Cost Approach

Recent transactions

N/A

Senior secured trade finance participations (2)

726,729

Income approach (DCF)

Market yield

15.75%

Senior secured term loans

28,201,096

Income approach (DCF)

Market yield

11.50% - 13.50% (12.50%)

Senior secured term loan participations

78,971,640

Income approach (DCF)

Market yield

11.50% - 15.70% (13.99%)

(1)

Given the short duration (less than one year) and nature of trade finance positions, the Company uses the cost approach to determine the fair value of trade finance positions, unless circumstances would indicate that another approach would be more appropriate.

(2)

Income approach used for the Fruit and Nut Distributor based on expected terms as listed in Note 3 above.

As of December 31, 2016, all of the Company’s portfolio investments utilized Level 3 inputs. The following table presents the quantitative information about Level 3 fair value measurements of the Company’s investments as of December 31, 2016:

Fair value

Valuation technique

Unobservable input

Range (weighted average)

Senior secured trade finance participations (1)

115,930,875

Cost Approach

Recent transactions

N/A

Senior secured trade finance participations (2)

740,690

Income approach (DCF)

Yield

15.75%

Senior secured term loans

28,673,487

Income approach (DCF)

Yield

11.50% - 13.50% (12.50%)

Senior secured term loan participations (3)

58,450,761

Income approach (DCF)

Yield

11.50% - 15.70% (13.99%)

(1)

(2)

Income approach used for the Fruit and Nut Distributor based on expected terms as listed in Note 3 above.

(3)

As of December 31, 2016, with respect to the loans to Prodesa, the Company has returned to using an income approach to estimate their fair value. As of December 31, 2015, the Company had chosen to determine their estimated fair value based on a collateral valuation approach. The Company’s decision to do so was not based upon a belief that the Company will need to liquidate the collateral securing the loans to Prodesa, but rather because the Company considered the collateral valuation approach to be the most appropriate due to the availability and reliability of inputs. In addition, the Company is working with Prodesa to re-align its operations and restructure the loans (see Note 3).

The significant unobservable Level 3 inputs used in the fair value measurement of the Company’s investments are market yields. Significant increases in market yields would result in significantly lower fair value measurements.

For details of the country-specific risk concentrations for the Company’s investments, refer to the Consolidated Schedule of Investments and Note 3.

Note 5. Related Parties

Agreements

Advisory Agreement

On March 3, 2017, the Company’s board of managers determined to extend the Amended and Restated Advisory Agreement (the “Advisory Agreement”) until February 25, 2018.

Asset management fees payable to the Advisor are remitted quarterly in arrears and are equal to 0.50% (2.00% per annum) of Gross Asset Value, as defined in the Advisory Agreement between the Company and the Advisor. Asset management fees are paid to the Advisor in exchange for fund management and administrative services. Although the Advisor manages, on the Company’s behalf, many of the risks associated with global investments in developing economies, management fees do not include the cost of any hedging instruments or insurance policies that may be required to appropriately manage the Company’s risk.

If certain financial goals are reached by the Company, the Company is required to pay the Advisor an incentive fee which is comprised of two parts: (i) a subordinated fee on net investment income and (ii) an incentive fee on capital gains. The subordinated incentive fee on income is calculated and payable quarterly in arrears and is based upon the Company’s pre-incentive fee net investment income for the immediately preceding quarter. No subordinated incentive fee is earned by the Advisor in any calendar quarter in which the Company’s pre-incentive fee net investment income does not exceed the quarterly preferred return rate of 1.50% (6.00% annualized) (the “Preferred Return”). In any quarter, all of the Company’s pre-incentive fee net investment income, if any, that exceeds the quarterly Preferred Return, but is less than or equal to 1.875% (7.50% annualized) at the end of the immediately preceding fiscal quarter, is payable to the Advisor. For any quarter in which the Company’s pre-incentive fee net investment income exceeds 1.875% on its net assets at the end of the immediately preceding fiscal quarter, the subordinated incentive fee on income equals 20% of the amount of the Company’s pre-incentive fee net investment income.

An incentive fee on capital gains will be earned on investments sold and shall be determined and payable to the Advisor in arrears as of the end of each calendar year. The incentive fee on capital gains is equal to 20% of the Company’s realized capital gains on a cumulative basis from inception, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fees on capital gains. The Company had no capital gains and therefore did not accrue an incentive fee on capital gains for the three months ended March 31, 2017 and 2016.

Transactions

As discussed in Note 2, for the three months ended March 31, 2017 and 2016, the Sponsor assumed responsibility for $1,324,828 and $1,914,344, respectively, of the Company’s operating expenses, management fees and incentive fees, which are deferred under the Responsibility Agreement.

For the three months ended March 31, 2017 and 2016, the Advisor earned $1,520,974, and $816,326, respectively, in management fees and $960,348 and $650,348, respectively, in incentive fees.

Since the inception of the Company through March 31, 2017, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $10,476,300 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $3,662,300 of expenses, which have been accrued by the Sponsor as of March 31, 2017. Such expenses, in the aggregate of $14,138,600 since the Company’s inception, may be expensed and payable by the Company to the Sponsor once the Company has raised gross proceeds of $200 million in the Offering and such reimbursement does not cause the Company’s net asset value per unit to fall below the prior quarter’s net asset value per unit, as further described in Note 2.

As of March 31, 2017 and December 31, 2016, due from affiliates on the Consolidated Statement of Assets and Liabilities in the amounts of $3,287,475 and $3,175,656, respectively, was due from the Sponsor in connection with the Responsibility Agreement for operating expenses which were paid by the Company, but, under the terms of the Responsibility Agreement, are the responsibility of the Sponsor. The Sponsor anticipates paying this receivable in the due course of business.

As of March 31, 2017 and December 31, 2016, due to affiliates on the Consolidated Statement of Assets and Liabilities in the amounts of $560,818 and $68,312, respectively, was due to the Sponsor for reimbursements of offering costs.

For the three months ended March 31, 2017 and 2016, the Company paid $625,676 and $477,699, respectively, in dealer manager fees and $2,426,442 and $1,633,388, respectively, in selling commissions to the Company’s dealer manager, SC Distributors, LLC. These fees and commissions were paid in connection with the sales of the Company’s units to investors and, as such, were recorded against the proceeds from the issuance of units and are not reflected in the Company’s Consolidated Statements of Operations.

Note 6. Organization and Offering Costs

As of March 31, 2017, the Sponsor has paid approximately $16,709,600 of offering costs and $236,000 of organization costs, all of which were paid directly by the Sponsor on behalf of the Company, and will be reimbursed to the Sponsor as disclosed in Note 2 of the consolidated financial statements. Such amounts include approximately $2,386,000 and $990,000 of offering costs, which were incurred by the Sponsor during the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2017 and 2016, the Company paid $2,401,853 and $1,645,498, respectively, in reimbursement of offering costs to the Sponsor. Such offering costs reimbursed by the Company have been recognized against the proceeds from the issuance of units.

Since the Company started operations to March 31, 2017, the Company has reimbursed the Sponsor a total of approximately 16,945,600 of offering costs and there is no remaining balance of offering and organization costs due to the Sponsor.

Note 7. Promissory Notes

On October 14, 2016, TGIFC issued $1.635 million in the first series of notes pursuant to a private offering of senior secured promissory notes (the “Notes”). The Notes were issued under an ongoing private offering targeting $100 million in the aggregate amount and will be comprised of four different series with four different issuance and maturity dates. The Notes issued on October 14, 2016 comprised the first series of the Notes.

The Notes have an interest rate of 3.0% per annum plus the one year LIBOR (1.59%) and will be payable quarterly in arrears within 15 days after the end of each calendar quarter. The interest rate is determined on each issuance date and adjusted on each anniversary of the issuance date and shall not exceed the maximum rate of non-usurious interest permitted by applicable law, with excess interest to be applied to the principal amount of the Note.

On February 17, 2017, TGIFC issued $0.225 million in the second series of the Notes pursuant to such private offering. The notes issued on February 17, 2017 comprised the second series of the Notes and bear interest at a rate of 3.0% per annum plus one year LIBOR (1.74%) as determined on their issuance date.

The entire principal balance of each Note (and any unpaid interest) is due in one balloon payment on the “Maturity Date,” which is the first anniversary of the issuance date that either TGIFC or the applicable noteholder has designated as the Maturity Date by not less than 30 days’ prior written notice to the other party. The principal balance of each Note may not be prepaid, in whole or in part, prior to the Maturity Date.

TGIFC’s obligations under the Notes are secured by an equitable mortgage pursuant to the Equitable Mortgage Over Shares by and between TGIFC and Noteholders, dated as of October 14, 2016 granting the holders of Notes a mortgage over all of the issued and outstanding shares of the Subsidiaries.

For the three months ended March 31, 2017, the Company recognized $19,742 in interest expense.

Note 8. Unit Capital

As of March 31, 2017, the Company has three classes of units: Class A units, Class C units and Class I units. The unit classes have different sales commissions and dealer manager fees, and there is an ongoing distribution fee with respect to Class C units. As of March 31, 2017, the Company recorded a liability in the amount of $2,140,000 for the estimated future amount of Class C distribution fee payable. The estimated liability is calculated based on a net asset value per Class C unit of $9.025 with distribution fees of 0.8% per annum applied to the net asset value, during the expected period that Class C unit remains outstanding, and discounted using an annual rate of 4%. All units participate in the income and expenses of the Company on a pro-rata basis based on the number of units outstanding. As of March 31, 2017, the Class A and I units have a net asset value per unit of $8.529, and the Class C units have a net asset value of $8.267. The following table is a summary of unit activity during the three months ended March 31, 2017:

	Units							Units
	Outstanding				Units			Outstanding
	as of		Units Issued		Repurchased			as of
	December 31,		During		During			March 31,
	2016		the Period		the Period			2017
Class A units		15,391,991		2,708,818		(78,686	)		18,022,123
Class C units		6,803,985		1,353,325		(11	)		8,157,299
Class I units		7,411,405		2,415,773		(267,582	)		9,559,596
Total		29,607,381		6,477,916		(346,279	)		35,739,018

The total of 6,477,916 units issued during the three months ended March 31, 2017 included 336,950 units issued under the DRP at a value of $2,505,036. Subscriptions executed on or before March 31, 2017 were still being processed following the end of the quarter. Accordingly, as of March 31, 2017, the Company recorded a receivable in the amount of $14,574,746 which has been deposited subsequent to quarter end.

Beginning June 11, 2014, the Company commenced a unit repurchase program pursuant to which the Company may conduct quarterly unit repurchases of up to 5% of the weighted average number of outstanding units in any 12-month period to allow the Company’s unitholders, who have held units for a minimum of one year, to sell their units back to the Company at a price equal to the then current offering price less the sales fees associated with that class of units. The unit repurchase program includes numerous restrictions, including a one-year holding period, that limit the ability of the Company’s unitholders to sell their units. Unless the Company’s board of managers determines otherwise, the Company will limit the number of units to be repurchased during any calendar year to the number of units that can be repurchased with the proceeds the Company receives from the sale of units under the Company’s DRP. At the sole discretion of the Company’s board of managers, the Company may also use cash on hand, cash available from borrowings and cash from the repayment or liquidation of investments as of the end of the applicable quarter to repurchase units.

During the three months ended March 31, 2017, the Company received 19 repurchase requests for a total of 346,279 units at a repurchase price of $9.025 per unit. As of March 31, 2017, these repurchase requests were pending processing and were completed by the Company on April 6, 2017.

Note 9. Distributions

Starting in July 2013, the Company has paid monthly distributions for all classes of units. The following table summarizes the distributions paid for the three months ended March 31, 2017:

		Daily Rate		Cash		Distributions		Total
Months ended	Date Declared	Per Unit		Distributions		Reinvested		Declared
January 31, 2017	January 19, 2017	$	0.00197808	$	1,002,022	$	837,472	$	1,839,494
February 28, 2017	February 23, 2017	$	0.00197808	$	944,453	$	782,125	$	1,726,578
March 31, 2017	March 3, 2017	$	0.00197808	$	1,114,222	$	885,439	$	1,999,661
Total for 2017				$	3,060,697	$	2,505,036	$	5,565,733

Note 10. Financial Highlights

The following is a schedule of financial highlights of the Company for the three months ended March 31, 2017 and 2016. The Company’s income and expense is allocated pro-rata across the outstanding Class A, Class C and Class I units, as applicable, and, therefore, the financial highlights are equal for each of the outstanding classes.

	Three Months Ended
	March 31,			March 31,
	2017			2016
Per unit data (1):
Net proceeds before offering costs (2)	$	9.025		$	9.025
Offering costs		(0.474	)		(0.495	)
Net Proceeds after offering costs		8.551			8.530
Net investment income		0.153			0.182
Net change in unrealized depreciation on investments		-			(0.003	)
Distributions		(0.177	)		(0.179	)
Net change in accrued distribution fees		(0.060	)		—
Net increase/(decrease) in net assets		(0.084	)		—
Net asset value at end of period		8.467			8.530
Total return based on net asset value (3)(4)		1.79	%		2.10	%
Net assets at end of period	$	302,673,743		$	163,175,155
Units Outstanding at end of period		35,739,018			19,129,421
Ratio/Supplemental data (annualized) (4)(5):
Ratio of net investment income to average net assets		7.04	%		8.49	%
Ratio of net operating expenses to average net assets		2.75	%		0.24	%

1	The per unit data was derived by using the weighted average units outstanding during the three months ended March 31, 2017 and 2016 which were 31,423,215 and 17,816,842.

2	Represents net asset value at the beginning of the period.

Net asset value would have been lower if the Sponsor had not made capital contributions as of March 31, 2014 and December 31, 2013 of $31,750 and $51,034, respectively or had not absorbed and deferred reimbursement for a substantial portion of the Company’s operating expenses since the Company began operations.

Total return, ratio of net investment income and ratio of operating expenses to average net assets for the three months ended March 31, 2017 and 2016, prior to the effect of the Responsibility Agreement were as follows; total return: 1.30% and 0.84%, ratio of net investment income; 5.12% and 3.40%, and ratio of operating expenses to average net assets: 4.67% and 5.33%.

5	The Company’s net investment income has been annualized assuming consistent results over a full fiscal year, however, this may not be indicative of actual results over a full fiscal year.

Note 11. 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 the Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three months ended March 31, 2017, except as discussed below.

Distributions

On April 18, 2017, with the authorization of the Company’s board of managers, the Company declared distributions for Class A, Class C and Class I units for the period from April 1 through April 30, 2017. These distributions were calculated based on unitholders of record for each day in an amount equal to $0.00197808 per unit per day (less the distribution fee with respect to Class C units). On May 1, 2017, $1,103,372 of these distributions were paid in cash and on April 28, 2017, $929,660 were reinvested in units for those unitholders participating in the DRP.

On May 10, 2017, with the authorization of the Company’s board of managers, the Company declared distributions for Class A, Class C and Class I units for the period from May 1 through May 31, 2017. These distributions will be calculated based on unitholders of record for each day in an amount equal to $0.00197808 per unit per day (less the distribution fee with respect to Class C units). These distributions will be paid in cash or reinvested in units, for those unitholders participating in the DRP on or about June 1, 2017.

Investments

Subsequent to March 31, 2017 through May 10, 2017, the Company funded approximately $25.3 million in new investments and received proceeds from repayment of investments of approximately $22.3 million.

Agreements

On May 10, 2017, the Company entered into an Amended and Restated Operating Expenses Responsibility Agreement with the Company’s Sponsor and Advisor. Pursuant to the terms of this agreement, the Sponsor agreed to be responsible for the Company’s cumulative operating expenses incurred through March 31, 2017, including management and incentive fees earned by the Advisor during the quarter ended March 31, 2017. For additional information refer to Notes 2 and 5.

Amended and Restated Operating Agreement

Effective as of April 18, 2017, the Company amended and restated its Second Amended and Restated Operating Agreement (as amended, the “Third Amended and Restated Operating Agreement”) to authorize additional units of limited liability company interest designated as Class W units and Class Y units and to make related changes.

Each Class W unit shall initially be issued for a purchase price of $8.620, subject to certain possible discounts, until such time as the board of managers adjusts the purchase price of Class W units. The Class W units shall not be subject to sales commissions. In addition, with respect to Class W units, the Company shall pay the dealer manager on a monthly basis, an annual dealer-manager fee that accrues daily equal to 1/365^th of .50% of the amount of the net asset value for the Class W units for such day on a continuous basis from year to year for a maximum of five years from the admission date of the investor. Additionally, the Company shall pay the dealer manager on a monthly basis, an annual service fee that accrues daily equal to 1/365^th of .25% of the amount of the net asset value for the Class W units for such day on a continuous basis from year to year for a maximum of six years from the admission date of the investor. All underwriting compensation and any other fees are subject to change in subsequent offerings.

Each Class Y unit shall initially be issued for a purchase price of $8.577, subject to certain possible discounts, until such time as the board of managers adjusts the purchase price of Class Y units. The Class Y units shall not be subject to sales commissions or a dealer manager fees. Underwriting compensation and other fees may be imposed in subsequent offerings.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Company’s financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q.

Except as otherwise specified, references to “we,” “us,” “our,” or the “Company,” refer to TriLinc Global Impact Fund, LLC.

Forward Looking Statements

Some of the statements in this Form 10-Q constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this Quarterly Report involve risks and uncertainties, including statements as to:

•

our future operating results;

•

our ability to purchase or make investments in a timely manner;

•

our business prospects and the prospects of our borrowers;

•

the economic, social and/or environmental impact of the investments that we expect to make;

•

our contractual arrangements and relationships with third parties;

•

our ability to make distributions to our unitholders;

•

the dependence of our future success on the general economy and its impact on the companies in which we invest;

•

the availability of cash flow from operating activities for distributions and payment of operating expenses;

•

the performance of our Advisor, our sub-advisors and our Sponsor;

•

our dependence on our Advisor and our dependence on and the availability of the financial resources of our Sponsor;

•

the ability of our borrowers to make required payments;

•

our Advisor’s ability to attract and retain sufficient personnel to support our growth and operations;

•

the lack of a public trading market for our units;

•

our limited operating history;

•

our ability to borrow funds;

•

our expected financings and investments;

•

the adequacy of our cash resources and working capital;

•

performance of our investments relative to our expectations and the impact on our actual return on invested equity, as well as the cash provided by these investments;

•

any failure in our Advisor’s or sub-advisors’ due diligence to identify all relevant facts in our underwriting process or otherwise;

•

the ability of our sub-advisors and borrowers to achieve their objectives;

•

the effectiveness of our portfolio management techniques and strategies;

•

failure to maintain effective internal controls; and

•

the loss of our exemption from the definition of an “investment company” under the Investment Company Act of 1940, as amended.

We use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason.

The foregoing list of factors is not exhaustive. We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we may file in the future with the SEC.

Overview

We make impact investments in SMEs that provide the opportunity to achieve both competitive financial returns and positive measurable impact. We were organized as a Delaware limited liability company on April 30, 2012. We have operated and intend to continue to operate our business in a manner that will permit us to maintain our exemption from registration under the Investment Company Act of 1940. We use the proceeds raised from the issuance of units to invest in SMEs through local market sub-advisors in a diversified portfolio of financial assets, including direct loans, loan participations, convertible debt instruments, trade finance, structured credit and preferred and common equity investments. A substantial portion of our assets consists of collateralized private debt instruments, which we believe offer opportunities for competitive risk-adjusted returns and income generation. We are externally managed and advised by TriLinc Advisors.

Our business strategy is to generate competitive financial returns and positive economic, social and environmental impact by providing financing to SMEs, which we define as those business having less than 500 employees, primarily in developing economies. To a lesser extent, we may also make impact investments in companies that may not meet our technical definition of SMEs due to a larger number of employees but that also provide the opportunity to achieve both competitive financial returns and positive measurable impact. We generally expect that such investments will have similar investment characteristics as SMEs as defined by us. Our style of investment is referred to as impact investing, which J.P. Morgan Global Research and Rockefeller Foundation in a 2010 report called “an emerging alternative asset class” and defined as investing with the intent to create positive impact beyond financial return. We believe it is possible to generate competitive financial returns while creating positive, measurable impact. We measure the economic, social and environmental impact of our investments using industry-standard metrics, including the Impact Reporting and Investment Standards. Through our investments in SMEs, we intend to enable job creation and stimulate economic growth.

We commenced the Offering on February 25, 2013. Pursuant to the Offering, we were offering on a continuous basis up to $1.5 billion in units of our limited liability company interest, consisting of up to $1.25 billion of units in the Primary Offering consisting of Class A and Class C units at initial offering prices of $10.00 and $9.576 per unit, respectively, and Class I units at $9.025 per unit, and up to $250 million of units pursuant to the DRP. SC Distributors, LLC was the dealer manager for the Offering. The Company’s Primary Offering terminated on March 31, 2017.

In May 2012, the Advisor purchased 22,161 Class A units for aggregate gross proceeds of $200,000. On June 11, 2013, we satisfied the minimum offering requirement of $2,000,000 when the Sponsor purchased 321,330 Class A units for aggregate gross proceeds of $2,900,000 and we commenced operations. As of March 31, 2017, we had processed subscriptions for and issued 37,259,816 of our units, including 1,537,114 units issued under our DRP, for gross proceeds of approximately $357,719,000 including approximately $13,337,000 reinvested under our DRP (before dealer manager fees of approximately $4,762,000 and selling commissions of $16,746,000, for net proceeds of $336,211,000).

We are offering a maximum of $75,000,000 in Class A, Class C and Class I units of our limited liability company interest to our existing unitholders pursuant to the DRP. Units issued pursuant to the DRP are being offered at the greater of $9.025 per unit or the most recently determined net asset value per unit of each class of units, which as of March 31, 2017 was $8.529 for Class A and I units, and $8.267 for Class C units. Accordingly, units will initially be offered at $9.025 per Class A, Class C and Class I units.

We will offer units pursuant to the DRP until we sell all $75,000,000 worth of units in this offering, although our board may determine to terminate this offering prior thereto. This offering must be registered or exempt from registration in every state in which we offer or sell units. If this offering is not exempt from registration, the required registration generally is for a period of one year. Therefore, we may have to stop selling units in any state in which the registration is not renewed annually and the offering is not otherwise exempt from registration.

Investments

Our investment objectives are to provide our unitholders current income, capital preservation, and modest capital appreciation. These objectives are achieved primarily through SME trade finance and term loan financing, while employing rigorous risk-mitigation and due diligence practices, and transparently measuring and reporting the economic, social and environmental impacts of our investments. The majority of our investments are senior and other collateralized loans to SMEs with established, profitable businesses in developing economies. With the nine sub-advisors that we have contracted to assist the Advisor in implementing the Company’s investment program, we expect to provide growth capital financing generally ranging in size from $5-15 million per transaction for direct SME loans and $500,000 to $10 million for trade finance transactions. We seek to protect and grow investor capital by: (1) targeting countries with favorable economic growth and investor protections; (2) partnering with sub-advisors with significant experience in local markets; (3) focusing on creditworthy lending targets who have at least 3-year operating histories and demonstrated cash flows enabling loan repayment; (4) making primarily debt investments, backed by collateral and borrower guarantees; (5) employing best practices in our due diligence and risk mitigation processes; and (6) monitoring our portfolio on an ongoing basis.

Investments will continue to be primarily credit facilities to developing economy SMEs, including trade finance and term loans, through TriLinc Advisor’s team of professional sub-advisors with a local presence in the markets where they invest. As of March 31, 2017, more than a majority of our investments were in the form of participations and we expect that future investments will continue to be primarily participations. We typically provide financing that is collateralized, has a short to medium-term maturity and is self-liquidating through the repayment of principal. By providing additional liquidity to growing small businesses, we believe we support both economic growth and the expansion of the global middle class.

Revenues

Since we anticipate that the majority of our assets will consist of trade finance instruments and term loans, we expect that the majority of our revenue will continue to be generated in the form of interest. Our senior and subordinated debt investments may bear interest at a fixed or floating rate. Interest on debt securities is generally payable monthly, quarterly or semi-annually. In some cases, some of our investments may provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally is due at the maturity date. In addition, we generate revenue in the form of acquisition and other fees in connection with some transactions. Original issue discounts and market discounts or premiums are capitalized, and we accrete or amortize such amounts as interest income. We record prepayment premiums on loans and debt securities as interest income. Dividend income, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.

Expenses

Our primary operating expenses include the payment of asset management fees and expenses reimbursable to our Advisor under the Advisory Agreement. We bear all other costs and expenses of our operations and transactions.

Since our inception through March 31, 2017, our Sponsor has assumed substantially all our operating expenses under the terms of the Responsibility Agreement. As of March 31, 2017, the Sponsor has agreed to pay a cumulative total of approximately $14.1 million of operating expenses.

Portfolio and Investment Activity

During the three months ended March 31, 2017, we invested approximately $74,854,000 across 14 separate portfolio companies, including four new borrowers. Our investments consisted of senior secured trade finance participations, senior secured term loan participations, and senior secured term loans. Additionally, we received proceeds from repayments of investment principal of approximately $60,583,000.

At March 31, 2017 and December 31, 2016, the Company’s investment portfolio included 35 and 32 companies, respectively, and the fair value of our portfolio was comprised of the following:

	As of March 31, 2017					As of December 31, 2016
	Investments		Percentage of			Investments		Percentage of
	at Fair Value		Total Investments			at Fair Value		Total Investments
Senior secured term loans	$	28,201,096		12.9	%	$	28,673,487		14.1	%
Senior secured term loan participations		78,971,640		36.2	%		58,450,761		28.7	%
Senior secured trade finance participations		111,037,327		50.9	%		116,671,565		57.2	%
Total investments	$	218,210,063		100.0	%	$	203,795,813		100.0	%

As of March 31, 2017, the weighted average yield, based upon the cost of our portfolio, on trade finance participations, term loan participations, and senior secured term loans were 10.5%, 14.8%, and 12.2%, respectively, for a weighted average yield on investments of approximately 12.1% on our total portfolio.

As of December 31, 2016, the weighted average yield, based upon the cost of our portfolio, on trade finance participations, term loan participations, and senior secured term loans were 11.1%, 14.9%, and 12.3%, respectively, for a weighted average yield on investments of approximately 12.3% on our total portfolio.

Prodesa

Prodesa, as well as pledges of additional unencumbered assets and all shares of Prodesa. A number of draws and repayments have occurred under this facility. For example, during the year ended December 31, 2016, the Company funded seven additional draws under the purchase order facility for an aggregate of $1,750,000.

The Company has estimated the fair value of the Prodesa loans as of March 31, 2017 at $4,790,000 based on the income valuation approach as further described in Note 4.

Usivale

On February 17, 2016, the Company filed a rejection of the plan presented by Usivale. In accordance with the judicial recovery process, a general assembly of Usivale’s creditors was held on June 14, 2016 and an agreed upon restructure plan was submitted to the court and subsequently approved by the court on October 7, 2016. Under the restructure plan, interest on the principal started accruing effective July 1, 2016 at an annual rate of 12.43% and Usivale is required to make annual principal payments starting in the fourth quarter of 2016. On November 10, 2016, the Company received payments of principal and interest of $316,777 and $144,390, respectively. The Company recorded the $144,390 payment as interest income and started accruing interest on the unpaid principal effective November 10, 2016. As of March 31, 2017, the principal balance of the Usivale loans amounted to $2,851,296 and the Company has estimated the fair value of the Usivale loans at $2,851,296, which is based on a discounted cash flow analysis (income approach).

Fruit and Nut Distributor

The Company has a trade finance participation with a fruit and nut distributor (“the Distributor”) located in South Africa, with a total balance outstanding of $785,806 of as March 31, 2017. The Distributor trade finance has a stated maturity date of May 22, 2015, which the Company agreed to extend. The Distributor had made partial payments of principal during 2015 and 2016 (the original loan from the Company to the Distributor was for $1,250,000), with the most recent payment being made in October 2016. Through the latter part of 2015, the depreciation in the South African Rand had proven to be problematic for the Distributor given that it has to purchase its inventory in U.S. Dollars and then sells in South African Rand. This situation has led the Distributor to experience some cash flow difficulties and operating losses. As of March 31, 2017, the Company, together with its sub-advisor, had agreed to extend further the principal maturity date to facilitate the strategic sale of the Distributor, which closed in June 2016. As a result of the sale, one of the Company’s sub-advisors now owns 40% of the Distributor. Accordingly, the Company placed this participation on non-accrual status effective February 1, 2016 and interest not recorded relative to the original terms of this participation amounted to approximately $34,500 for the three months ended March 31, 2017. Based on the information available to the Company and according to its valuation policies, the Company had estimated the fair value of its investment in the Distributor to be $726,729 as of March 31, 2017.

Farm Supplies Distributor

The Company has several trade finance participations in a facility to a farm supplies distributor, Neria Investment Ltd. (“Neria”), located in Zambia with an aggregate principal balance of $5,078,526 and net accrued interest of $550,370 as of March 31, 2017. The participations have maturity dates ranging from October 25, 2015 to May 3, 2016. The facility serves to finance the shipment of fertilizer to the Zambian government and is secured by receivables. The delay in repayment is due to slow payment of the receivables by the Zambian Government caused by a national budget deficit. The Company placed this participation on non-accrual status effective July 1, 2016 and interest not recorded relative to the original terms of this participation amounted to approximately $157,800 for the three months ended March 31, 2017. In addition, during the year ended December 31, 2016, the Company reversed $550,370 of interest income that had been previously accrued. On December 1, 2016, the Company’s sub-advisor declared an event of default and filed a claim against the credit insurance policy. The insurer has 180 days from time of filing (June 1, 2017) to conclude its collection process and make payment against the policy. The Company has determined that there is sufficient collateral, including a credit insurance policy, should the Zambian government or subsequently Neria not pay, to cover the entire principal and interest balance due from Neria and has determined, in accordance with its valuation policy that the fair value should remain at $5,078,526 as of March 31, 2017.

Sesame Seed Exporter

Results of Operations

Consolidated operating results for the three months ended March 31, 2017 and 2016 are as follows:

	Three months ended
	March 31, 2017			March 31, 2016
Interest income	$	6,590,163		$	3,249,585
Interest from cash		87,922			92,269
Total investment income		6,678,085			3,341,854
Management fees		1,520,974			816,326
Incentive fees		960,348			650,348
Professional fees		365,179			289,031
General and administrative expenses		300,297			201,876
Board of managers fees		54,375			46,875
Total expenses		3,201,173			2,004,456
Expense support payment from Sponsor		(1,324,828	)		(1,914,344	)
Net expenses		1,876,345			90,112
Net investment income	$	4,801,740		$	3,251,742

Revenues

For the three months ended March 31, 2017 and 2016, total investment income amounted to $6,678,085 and $3,341,854, respectively. Interest income increased by $3,340,578 during the three months ended March 31, 2017 from the same period in 2016 as a result of an increase in our weighted average investment portfolio of approximately $113,472,000 offset by a decrease in the weighted average yield of approximately 0.3% from a weighted average yield of 12.3% for the three months ended March 31, 2016 to approximately 12.0% for the three months ended March 31, 2017. The decrease in yield was primarily due to a change in our investments portfolio mix.

During the three months ended March 31, 2017, $5,699,044 or 86.5% of the interest income earned came from loan and trade finance participations and $891,119 or 13.5% came from direct loans. In addition, we earned $87,922 in interest income on our cash balances.

During the three months ended March 31, 2016, $2,946,394 or 90.7% of the interest income earned came from loan and trade finance participations and $303,191 or 9.3% came from direct loans. In addition, we earned $92,269 in interest income on our cash balances.

Expenses

Total operating expenses, excluding the management and incentive fees, incurred for the three months ended March 31, 2017 increased by $182,069 to $719,851 from $537,782 for the three months ended March 31, 2017. The increase was primarily due to the following: 1) an increase in general and administrative expenses of $98,421, which was attributable to increases in a number of expenses, the largest being a $39,867 increase in fees paid to our transfer agent, $32,365 increase in printing expense, and $17,836 increase in fund accounting; and 2) an increase in professional fees of $76,148. Our Sponsor assumed responsibility for our operating expenses in the amount of $364,480 and $537,782 under the Responsibility Agreement for expenses paid or incurred by the Company for the three months ended March 31, 2017 and 2016, respectively.

For the three months ended March 31, 2017 and 2016, the management fees amounted to $1,520,974 and $816,326, respectively. The incentive fees for the three months ended March 31, 2017 and 2016 amounted to $960,348 and $650,348, respectively. A portion of the management fees, amounting to $726,214 for 2016 was assumed by our Sponsor under the Responsibility Agreement while none of the management fee for the three months ended March 31, 2017 was assumed by our Sponsor. In addition, for the three months ended March 31, 2017 and 2016, the entire amounts of the incentive fees for both periods were assumed by the Sponsor under the Responsibility Agreement. The increases in both the management and incentive fees were due to our increase in net asset value.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments. We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale of an investment and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized. We had no realized gains or losses for the three months ended March 31, 2017 and 2016. We had no unrealized gains or losses for the three months ended March 31, 2017. We recorded a $59,077 unrealized loss for the three months ended March 31, 2016.

Changes in Net Assets from Operations. For the three months ended March 31, 2017 and 2016, we recorded a net increase in net assets resulting from operations, which consisted entirely of net investment income, of $4,801,740 and $3,192,665, respectively.

Financial Condition, Liquidity and Capital Resources

As of March 31, 2017, we had approximately $68.6 million in cash. We generate cash primarily from cash flows from interest, dividends and fees earned from our investments and principal repayments, and proceeds from sales of our investments and from sales of promissory notes. We may also generate cash in the future from debt financing. Our primary use of cash will be to make loans, either directly or through participations, payments of our expenses, payments on our notes and any other borrowings, and cash distributions to our unitholders. We expect to maintain cash reserves from time to time for investment opportunities, working capital and distributions. From the beginning of the Company’s operations to date, our Sponsor has absorbed substantially all of our operating expenses under the Responsibility Agreement. The Company may only reimburse the Sponsor for expenses covered under the Responsibility Agreement if we raise $200 million of gross proceeds in the Offering and such reimbursement does not cause the Company’s net asset value per unit to fall below the prior’s quarter’s net asset value per unit. While the Company has raised gross proceeds of over $200 million in the Offering as of March 31, 2017 any such reimbursement would cause the Company’s net asset value per unit to fall below the prior quarter’s net asset value per unit. Thus, such amounts are not yet payable by the Company to the Sponsor. Following the end of the Offering, which terminated on March 31, 2017, the Sponsor can demand the reimbursement of operating expenses covered by the Responsibility Agreement if it does not cause a drop in the net asset value per unit. Such reimbursements to the Sponsor could affect the amount of cash available to the Company to pay distributions and/or make investments.

The Company’s net asset value has not changed since the commencement of the Offering but it would have decreased for all unit classes if the Sponsor has not made a capital contribution in the amount of $31,750 as of March 31, 2014 and $51,034 as of December 31, 2013 and had not absorbed and deferred reimbursement for substantially all of the Company’s operating expenses since it began its operations.

As of March 31, 2017, the Company had processed subscriptions and issued approximately 37.3 million total units in the Offering (including units pursuant to the DRP) for total gross offering proceeds of approximately $358 million.

We may borrow funds to make investments. We have not decided to what extent going forward, we will finance portfolio investments using debt or the specific form that any such financing would take, but we believe that obtaining financing is necessary

for the Company to fully achieve its long term goals. We have been actively seeking financing and are currently talking with development banks and several commercial banks but have not yet received any commitments for financing. Accordingly, we cannot predict with certainty if we will be able to obtain financing and what terms any such financing would have or the costs we would incur in connection with any such arrangement. On October 14, 2016, TriLinc Global Impact Fund Cayman, Ltd. (“TGIFC”), a wholly owned subsidiary of the Company, issued $1.635 million in the first series of four issuances of notes pursuant to an ongoing private offering of senior secured promissory notes targeting $100 million. On February 17, 2017, TGIFC issued an additional $225,000 in the second series of notes under the private offering. As of March 31, 2017, we had raised $1.86 million in the note offering and such debt was outstanding.

Contractual Obligations and Commitments

The Company does not include a contractual obligations table herein as all obligations of the Company are short-term. We have included the following information related to commitments of the Company to further assist investors in understanding the Company’s outstanding commitments.

We have entered into certain contracts under which we have material future commitments. Our Advisory Agreement between us and the Advisor, dated as of February 25, 2014, had previously been renewed and is subject to an unlimited number of one-year renewals upon mutual consent of the Company and the Advisor. On February 23, 2017, our board of managers approved an interim extension of our Advisory Agreement until March 3, 2017. On March 3, 2017, our board of managers determined to extend our Advisory Agreement, effective March 3, 2017, through February 25, 2018. The Advisor will serve as our advisor in accordance with the terms of our Advisory Agreement. Payments under our Advisory Agreement in each reporting period will consist of (i) an asset management fee equal to a percentage of the value of our gross assets, as defined in the agreement, and (ii) the reimbursement of certain expenses. Certain subordinated fees based on our performance are payable after our subordination is met.

If any of our contractual obligations discussed above are terminated, our costs may increase under any new agreements that we enter into as replacements. We would also likely incur expenses in locating alternative parties to provide the services we expect to receive under our Advisory Agreement.

Off-Balance Sheet Arrangements

Other than contractual commitments and other legal contingencies incurred in the normal course of our business, we do not expect to have any off-balance sheet financings or liabilities. The Company reimburses organization and offering expenses to the Sponsor to the extent that the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0 % of the gross offering proceeds raised from the offering. As of March 31, 2017, there was no amount that would be due to be reimbursed to the Sponsor.

Pursuant to the terms of the Responsibility Agreement between the Company, the Advisor and the Sponsor, the Sponsor has paid expenses on behalf of the Company through March 31, 2017 and will pay additional accrued operating expenses of the Company, which may not be reimbursable to the Sponsor until the Company has raised $200 million of gross proceeds in the Offering and such reimbursement does not cause the Company’s net asset value per unit to fall below the prior quarter’s net asset value per unit. Such expenses will be expensed and payable by the Company in the period they become reimbursable and are estimated to be approximately $14.1 million through March 31, 2017.

Distributions

We have paid distributions commencing with the month beginning July 1, 2013, and we intend to continue to pay distributions on a monthly basis. From time to time, we may also pay interim distributions at the discretion of our board. Distributions are subject to the board of managers’ discretion and applicable legal restrictions and accordingly, there can be no assurance that we will make distributions at a specific rate or at all. Distributions are made on all classes of our units at the same time. The cash distributions received by our unitholders with respect to the Class C units are and will continue to be lower than the cash distributions with respect to Class A and Class I units because of the distribution fee relating to Class C units, which is an expense specific to Class C unitholders. Amounts distributed to each class are allocated among the unitholders in such class in proportion to their units. Distributions are paid in cash or reinvested in units, for those unitholders participating in the DRP. For the three months ended March 31, 2017, we paid a total of $5,565,733 in distributions, comprised of $3,060,697 paid in cash and $2,505,036 reinvested under our DRP.

The following table summarizes our distributions declared since we commenced operations on June 11, 2013, including the breakout between the distributions paid in cash and those reinvested pursuant to our DRP:

									Sources
Quarters ended	Amount per Unit		Cash Distributions		Distributions Reinvested		Total Declared		Cash Flows from Operating Activities		Cash Flows from Financing Activities (1)
March 31, 2017	$	0.15577	$	3,060,697	$	2,505,036	$	5,565,733	$	3,060,697	$	—
Total for 2017			$	3,060,697	$	2,505,036	$	5,565,733	$	3,060,697	$	-

March 31, 2016	$	0.17570	$	1,857,749	$	1,331,325	$	3,189,074	$	1,857,749	$	—
June 30, 2016	$	0.17570		2,102,173		1,622,213		3,724,386		2,102,173		—
September 30, 2016	$	0.17764		2,515,274		1,983,370		4,498,644		2,515,274
December 31, 2016	$	0.17764		2,782,973		2,275,594		5,058,567		2,782,973
Total for 2016			$	9,258,169	$	7,212,502	$	16,470,671	$	9,258,169	$	—

Related Party Transactions

For the three months ended March 31, 2017 and 2016, the Sponsor assumed responsibility for $1,324,828 and $1,914,344 of the Company’s operating expenses, management fees and incentive fees, which are deferred under the Responsibility Agreement.

For the three months ended March 31, 2017 and 2016, the Advisor earned $1,520,974 and $816,326, respectively, in management fees and $960,348 and $650,348, respectively, in incentive fees.

As of March 31, 2017 and December 31, 2016, due from affiliates on the Consolidated Statement of Assets and Liabilities in the amounts of $3,287,475 and $3,175,656, respectively, was due from the Sponsor in connection with the Responsibility Agreement for operating expenses which were paid by the Company, but, under the terms of the Responsibility Agreement, are the responsibility of the Sponsor. The Sponsor anticipated paying this receivable in the due course of business.

As March 31, 2017 and December 31, 2016, due to affiliates on the Consolidated Statement of Assets and Liabilities in the amounts of $560,818 and $68,312, respectively, was due to the Sponsor for reimbursements of offering costs.

Legal Proceedings

The Company is not party to any material legal proceedings.

Recent Events

Distributions

Investments

Subsequent to March 31, 2017 through May 10, 2017, the Company funded approximately $25.3 million in new trade finance participations and received proceeds from repayment of trade finance participations of approximately $22.3 million.

Agreements

Amended and Restated Operating Agreement

Critical Accounting Policies and Use of Estimates

The following discussion addresses the accounting policies that we utilize based on our current operations. Our most critical accounting policies involve decisions and assessments that could affect our reported assets and liabilities, as well as our reported revenues and expenses. We believe that all of the decisions and assessments upon which our financial statements are based are reasonable at the time made and based upon information available to us at that time. Our critical accounting policies and accounting estimates will be expanded over time as we continue to implement our business and operating strategy. In addition to the discussion below, we also describe our critical accounting policies in the notes to our financial statements.

Basis of Presentation

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which requires the use of estimates, assumptions and the exercise of subjective judgment as to future uncertainties.

Although we were organized and conduct our business in a manner so that we are not required to register as an investment company under the Investment Company Act of 1940, our financial statements are prepared using the specialized accounting principles of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies. Overall, we believe that the use of investment company accounting makes our financial statements more useful to investors and other financial statement users since it allows a more appropriate basis of comparison to other entities with similar objectives.

Valuation of Investments

Our board of managers has established procedures for the valuation of our investment portfolio in accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”). ASC 820 requires enhanced disclosures about assets and liabilities that are measured and reported at fair value. As defined in ASC 820, fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

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Level 2 — Valuations based on inputs other than quoted prices included in Level 1, which are either directly or indirectly observable.

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Level 3 — Valuations based on inputs that are unobservable and where there is little, if any, market activity at the measurement date. The inputs for the determination of fair value may require significant management judgment or estimation and is based upon management’s assessment of the assumptions that market participants would use in pricing the assets or liabilities. These investments include debt and equity investments in private companies or assets valued using the market, income, or cost approach and may involve pricing models whose inputs require significant judgment or estimation because of the absence of any meaningful current market data for identical or similar investments. The inputs in these valuations may include, but are not limited to, capitalization and discount rates and earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples. The information may also include pricing information or broker quotes that include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence.

The inputs used in the determination of fair value may require significant judgment or estimation.

Investments for which market quotations are readily available are valued at those quotations. Most of our investments are private investments in companies whose securities are not actively traded in the market and for which quotations are not be available. For those investments for which market quotations are not readily available, or when such market quotations are deemed by the Advisor not to represent fair value, our board of managers has approved a multi-step valuation process to be followed each fiscal quarter, as described below:

Each investment is valued by the Advisor in collaboration with the relevant sub-advisor;

For all investments with a maturity of greater than 12 months, we have engaged Duff & Phelps, LLC (“Duff & Phelps”) to conduct a review on the reasonableness of our internal estimates of fair value on each asset on a quarterly rotating basis, with each of such investments being reviewed at least annually, and provide an opinion that the Advisor’s estimate of fair value for each investment is reasonable;

The audit committee of our board of managers reviews and discusses the preliminary valuation prepared by the Advisor and any opinion rendered by Duff & Phelps; and

Our board of managers discusses the valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Advisor, Duff & Phelps and the audit committee. Our board of managers is ultimately responsible for the determination, in good faith, of the fair value of each investment.

Below is a description of factors that our board of managers may consider when valuing our investments.

Fixed income investments are typically valued utilizing a market approach, income approach, cost approach, or a combination of these approaches, (and any others, as appropriate). The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including the sale of a business) and is used less frequently due to the private nature of the Company’s investments. The income approach uses valuation techniques to convert future amounts (for example, interest and principal payments) to a single present value amount (discounted) calculated based on an appropriate

discount rate. The measurement is based on the net present value indicated by current market expectations about those future amounts. The cost approach is a valuation technique that uses the concept of replacement cost as an indicator of value. The premise of the cost approach holds that a prudent investor would pay no more for an asset than the amount for which the asset could be replaced. To clarify, the cost approach as a method for valuing an investment is to be distinguished from holding an investment at cost as of the initial investment date. In following a given approach, the types of factors that the Company may take into account in valuing the Company’s investments include, as applicable:

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Macro-economic factors that are relevant to the investment or the underlying obligor

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Industry factors that are relevant to the investment or the underlying obligor

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Historical and projected financial performance of the obligor based on most recent financial statements

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Borrower draw requests and payment track record

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Loan covenants, duration and drivers

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Performance and condition of the collateral (nature, type & value) that supports the investment

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Sub-Advisor recommendation as to possible impairment or reserve, including updates and feedback

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For participations, the Fund’s ownership percentage of the overall facility

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Key inputs and assumptions that are believed to be most appropriate for the investment and the approach utilized

We may also look to private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. We may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, as well as any other factors we deem relevant in measuring the fair values of our investments.

Revenue Recognition

The Company records interest income on an accrual basis to the extent that the Company expects to collect such amounts. The Company does not accrue as a receivable interest on loans for accounting purposes if there is reason to doubt the ability to collect such interest. Structuring, upfront and similar fees are recorded as a discount on investments purchased and are accreted into interest income, on a straight line basis, which we have determined not to be materially different from the effective yield method.

We generally place loans on non-accrual status when principal and interest are past due 90 days or more or when there is a reasonable doubt that we will collect principal or interest. If, however, management believes the principal and interest will be collected, a loan may be left on accrual status during the period the Company is pursuing repayment of the loan. Accrued interest is generally reversed when a loan is placed on non-accrual. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment of the financial condition of the borrower. Non-accrual loans are generally restored to accrual status when past due principal and interest is paid and, in the Advisor’s judgment, is likely to remain current over the remainder of the term. At March 31, 2017, two portfolio companies were on non-accrual status with an aggregate fair value of $5,805,255 or 2.7% of the fair value of the Company’s total investments. Interest income not recorded relative to the original terms of the two companies on non-accrual status amounted to approximately $192,300 for the three months ended March 31, 2017.

Structuring and similar fees are recorded as a discount on investments purchased and are accreted into income, on a straight line basis, which we have determined not to be materially different from the effective yield method. Structuring and similar fees are included in interest income.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation on Investments

We measure net realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, including unamortized upfront fees and prepayment penalties. Realized gains or losses on the disposition of an investment are calculated using the first in first out (FIFO) method, utilizing the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Payment-in-Kind Interest

We may have investments that contain a payment-in-kind, or PIK, interest provision. For loans with contractual PIK interest, any interest will be added to the principal balance of such investments and be recorded as income, if the valuation indicates that such interest is collectible.

Distribution Fee and Out-of-Period Adjustment

In prior periods, the Company has been recording the fees as a periodic charge to equity as they are incurred. Starting in the three months period ended June 30, 2016, the Company has determined to account for the fees as a charge to equity at the time each Class C unit is sold in its Offering and record a corresponding liability for the estimated amount to be paid in future periods. At March 31, 2017, the estimated unpaid distribution fee amounts to $2,062,000.

Organization and Offering Expenses

The Sponsor has incurred organization and offering costs on behalf of the Company. Organization and offering costs are reimbursable to the Sponsor to the extent the aggregate of selling commissions, dealer manager fees and other organization and offering costs do not exceed 15.0% of the gross offering proceeds (the “O&O Reimbursement Limit”) raised from the Offering and will be accrued and payable by the Company only to the extent that such costs do not exceed the O&O Reimbursement Limit. Reimbursement of organization and offering costs that exceed the O&O Reimbursement Limit will be expensed in the period they become reimbursable, which is dependent on the gross offering proceeds raised in such period, and are therefore not included on the Statements of Assets and Liabilities as of March 31, 2017 and December 31, 2016. These expense reimbursements are subject to regulatory caps and approval by the Company’s board of managers. If the Company had sold the maximum amount of the Offering, it anticipated that such expenses would have equaled approximately 1.25% of the gross proceeds raised. However, such expenses will exceed this percentage because the Primary Offering has terminated and the maximum amount was not raised. Based on the subscriptions processed through March 31, 2017, such expenses equaled to 4.7% of the gross proceeds. Reimbursements to the Sponsor are included as a reduction to net assets on the Consolidated Statement of Changes in Net Assets.

We may reimburse our dealer manager for certain expenses that are deemed underwriting compensation. Assuming an aggregate selling commission and a dealer manager fee of 9.75% of the gross offering proceeds (which assumes all offering proceeds come from Class A units), we would reimburse the dealer manager in an amount up to 0.25% of the gross offering proceeds. Because the aggregate selling commission and dealer manager fees will be less than 9.75% of the gross offering proceeds (due to a portion of the offering proceeds coming from the sale of Class C and Class I units), we may reimburse the dealer manager for expenses in an amount greater than 0.25% of the gross offering proceeds, provided that we will not pay or reimburse any of the foregoing costs to the extent such payment would cause total underwriting compensation to exceed 10.0% of the gross proceeds of the Primary Offering as of the termination of the offering, as required by the rules of FINRA.

Expense Responsibility Agreement

Pursuant to the terms of the Responsibility Agreement, the Sponsor has paid expenses on behalf of the Company through March 31, 2017 and will additionally pay the accrued operating expenses of the Company as of on behalf of the Company. Since the inception of the Company through March 31, 2017, pursuant to the terms of the Responsibility Agreement, the Sponsor has paid approximately $10,476,300 of operating expenses, management fees, and incentive fees on behalf of the Company and will pay or reimburse to the Company an additional $3,662,300 of expenses, which have been accrued by the Sponsor as of March 31, 2017. Such expenses may not be reimbursable to the Sponsor until the Company has raised $200 million of gross proceeds, provided any such reimbursement does not cause the Company’s net asset value per unit to fall below the prior quarter’s net asset value per unit (the “Gross Proceeds Hurdle”). To the extent the Company does not meet the Gross Proceeds Hurdle in any quarter, no amount will be payable by the Company for reimbursement to the Sponsor. While the Company has raised over $200 million of gross proceeds in the Offering as of March 31, 2017, the Company has not met the Gross Proceeds Hurdle for the quarter ending March 31, 2017 because any reimbursement would cause the Company’s net asset value per unit to fall below the prior quarter. Therefore, expenses of the Company covered by the Responsibility Agreement have not been recorded as expenses of the Company as of March 31, 2017. In accordance with ASC 450, Contingencies, such expenses will be accrued and payable by the Company in the period that they become both probable and estimable.

Income Taxes

We believe we are properly characterized as a partnership for U.S. federal income tax purposes, and expect to continue to qualify as a partnership (and not be treated as a publicly traded partnership or otherwise be treated as a taxable corporation) for such purposes. As a partnership, we are generally not subject to U.S. Federal income tax at the entity level.

Calculation of Net Asset Value

The Company’s net asset value is calculated on a quarterly basis and commenced with respect to the first full quarter after the Company commenced operations. The Company calculates its net asset value per unit by subtracting total liabilities from the total value of our assets on the date of valuation and dividing the result by the total number of outstanding units on the date of valuation. The net asset value per Class A, Class C and Class I units are calculated on a pro-rata basis based on units outstanding.

Recently Issued Accounting Pronouncements

Under the Jumpstart Our Business Startups Act (the “JOBS Act”), emerging growth companies can delay the adoption of new or revised accounting standards until such time as those standards apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates. There are no new or revised accounting standards that we have not adopted.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force).” ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: (i) debt prepayment or debt extinguishment, (ii) settlement of zero-coupon bonds, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method invitees, (vii) beneficial interest in securitizations transactions, and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented. If it is impracticable for a company to apply ASU 2016-15 retrospectively, requirements may be applied prospectively as of the earliest date practicable. We are currently evaluating the potential impact of the pending adoption of ASU 2016-15 on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. Our investments are currently structured with both fixed and floating interest rates. Those structured with floating rates are referenced to LIBOR and incorporate fixed interest rate floors.

If rates go down further, interest income will not decrease from current levels. To the extent that interest rates go up substantially, these investments will accrue higher amounts of income than currently being realized. Returns on investments that carry fixed rates are not subject to fluctuations in interest rates, and will not adjust should rates move up or down.

To the extent that we borrow money to make investments, our net investment income will be dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

Although we operate in a number of foreign markets, all investments are currently denominated in U.S. Dollars. Therefore, the current portfolio does not present currency risk to U.S. unitholders. In the future, we may hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.

Item 4. Controls and Procedures

In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that the disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings.

There are no pending material legal proceedings to which the Company or any of our subsidiaries or any of our property is subject.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 31, 2017 (“2016 Form 10-K”), which could materially affect our business, financial condition, and/or future results. The risks described in our 2016 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

There have been no material changes to the risk factors disclosed in our 2016 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2017, we did not sell or issue any equity securities that were not registered under the Securities Act.

Use of Proceeds from Registered Securities

On February 25, 2013, the Registration Statement on Form S-1, File No. 333-185676 covering the Offering, of up to $1.5 billion in units of our limited liability company interest, was declared effective under the Securities Act of 1933 by the SEC. The Offering commenced on February 25, 2013, and terminated on March 31, 2017.

We are offering up to $75 million of units pursuant to our DRP. Units issued under the DRP are offered at the greater of $9.025 or the most recently determined net asset value per unit for each class of units.

As of March 31, 2017, we had processed subscriptions for and issued 37,259,816 of our units, including 1,537,114 units issued under our DRP, for gross proceeds of approximately $357,719,000 including approximately $13,337,000 reinvested under our DRP (before dealer-manager fees of approximately $4,762,000 and selling commissions of $16,745,000, for net proceeds of $336,211,000). From the net offering proceeds, we paid and accrued a total of $16,945,544 towards reimbursement to our Sponsor for our organization and offering costs and we have financed a total of approximately $218 million in senior secured trade finance, senior secured term loan transactions, short term notes and bridge loans.

As of March 31, 2017, no amount remained payable to our Sponsor for costs related to our organization and offering.

Unit Repurchase Program

Beginning June 11, 2014, we commenced a unit repurchase program pursuant to which we may conduct quarterly unit repurchases of up to 5% of our weighted average number of outstanding units in any 12-month period to allow our unitholders, who have held our units for a minimum of one year, to sell their units back to us at a price equal to the then current offering price less the sales fees associated with that class of units. Our unit repurchase program includes numerous restrictions, including a one-year holding period, that limit the ability of our unitholders to sell their units. Unless our board of managers determines otherwise, we will limit the number of units to be repurchased during any calendar year to the number of units we can repurchase with the proceeds we receive from the sale of units under our DRP. At the sole discretion of our board of managers, we may also use cash on hand, cash available from borrowings and cash from liquidation of investments as of the end of the applicable quarter to repurchase units.

Our board of managers has the right to amend, suspend or terminate the unit repurchase program to the extent that it determines that it is in our best interest to do so. We will promptly notify our unitholders of any changes to the unit repurchase program, including any amendment, suspension or termination of it in our periodic or current reports or by means of other notice. Moreover, the unit repurchase program will terminate on the date that our units are listed on a national securities exchange, are included for quotation in a national securities market or, in the sole determination of our board of managers, a secondary trading market for the units otherwise develops.

The above description of the unit repurchase program is a summary of certain of the terms of the unit repurchase program, which was amended effective June 30, 2017. Please see the full text of the unit repurchase program, which was filed as Exhibit 4.2 to a current report on Form 8-K filed with the SEC on March 14, 2017, for all the terms and conditions.

During the three months ended March 31, 2017, we fulfilled the following request pursuant to our unit repurchase program:

Period	Total Number of Units Purchased		Average Price Paid Per Unit		Total Number of Units Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Units that May Yet be Purchased Under the Program
01/01/2017 - 01/31/2017		239,142	$	9.025		239,142		239,142
02/01/2017 - 02/28/2017		—		—		—		239,142
03/01/2017 - 03/31/2017		—		—		—		239,142
Total		239,142	$	9.025		239,142

During the three months ended March 31, 2017, we repurchased 239,142 units for a total of $2,158,255. In addition, as of March 31, 2017, there were 19 repurchase requests for a total of 346,279 units that were pending which were processed by the Company on April 6, 2017 at a price of $9.025 per unit.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

Number		Description

3.1		Certificate of Formation of TriLinc Global Impact Fund, LLC. Incorporated by reference to Exhibit 3.1 to the Draft Registration Statement on Form S-1 (File No. 377-00015) filed with the Securities and Exchange Commission (the “SEC”) on November 1, 2012.

3.2		Third Amended and Restated Limited Liability Company Operating Agreement. Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on April 19, 2017.

4.1		Second Amended and Restated Distribution Reinvestment Plan. Incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on March 14, 2017.

4.2		Second Amended and Restated Unit Repurchase Program. Incorporated by reference to Exhibit 4.2 D to the Form 8-K filed with the SEC on March 14, 2017.

10.1		Form of Promissory Notes. Incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on October 20, 2016.
10.2		Equitable Mortgage Over Shares by and between TriLinc Global Impact Fund Cayman, Ltd. and Noteholders, dated as of October 14, 2016. Incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on October 20, 2016.

10.3*		Amended and Restated Operating Expense Responsibility Agreement among TriLinc Global Impact Fund, LLC, TriLinc Global, LLC and TriLinc Advisors, LLC dated May 10, 2017.

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

32.1*		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Number		Description
101		The following materials from TriLinc Global Impact Fund LLC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 11, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Assets and Liabilities, (ii) Consolidated Statement of Operations, (iii) Consolidated Statement of Changes in Net Assets, (iv) Consolidated Statements of Cash Flows, and (v) Notes to the Consolidated Financial Statements.

*	Filed herewith

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.

	TRILINC GLOBAL IMPACT FUND, LLC.

May 11, 2017	By:	/s/ Gloria S. Nelund
		Gloria S. Nelund
		Chief Executive Officer

May 11, 2017	By:	/s/ Brent L. VanNorman
		Brent L. VanNorman
		Chief Financial Officer

Attached files

TriLinc Global Impact Fund LLC Reports

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