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EX-31.2 - EXHIBIT 31.2 - Audax Credit BDC Inc.tm2111730d1_ex31-2.htm
EX-32.2 - EXHIBIT 32.2 - Audax Credit BDC Inc.tm2111730d1_ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - Audax Credit BDC Inc.tm2111730d1_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - Audax Credit BDC Inc.tm2111730d1_ex31-1.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

(Mark One)

 

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

 

For the quarterly period ended March 31, 2021

 

OR

 

¨ 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: 814-01154

 

 

 

AUDAX CREDIT BDC INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   47-3039124

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

     
101 HUNTINGTON AVENUE    
BOSTON, MASSACHUSETTS   02199
(Address of principal executive office)   (Zip Code)

 

(617) 859-1500

(Registrant’s telephone number, including area code)

 

Not Applicable

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

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

None.

 

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   x     No  

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12 b-2 of the Exchange Act.

 

Large accelerated filer   ¨   Accelerated filer   ¨
       
Non-accelerated filer   x   Smaller reporting company   ¨
             
Emerging growth company   x        

 

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   x

 

The registrant had 39,009,531 shares of common stock, par value $0.001 per share, outstanding as of May 14, 2021.

 

 

 

 

 

AUDAX CREDIT BDC INC.

TABLE OF CONTENTS

 

PART I.   FINANCIAL INFORMATION:    
       
Item 1.   Financial Statements    
       
    Statements of Assets and Liabilities as of March 31, 2021 (unaudited) and December 31, 2020   2  
    Statements of Operations for the three months ended March 31, 2021 (unaudited) and 2020 (unaudited) 3  
    Statements of Changes in Net Assets for the three months ended March 31, 2021 (unaudited) and 2020 (unaudited) 4  
    Statements of Cash Flows for the three months ended March 31, 2021 (unaudited) and 2020 (unaudited) 5  
    Schedules of Investments as of March 31, 2021 (unaudited) and December 31, 2020 6  
    Notes to Financial Statements (unaudited) 16  
       
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations    
       
    Overview 36  
    Results of Operations 38  
    Financial Condition, Liquidity and Capital Resources 39  
       
Item 3.   Quantitative and Qualitative Disclosures About Market Risk 46  
       
Item 4.   Controls and Procedures 47  
       
PART II.   OTHER INFORMATION:    
       
Item 1.   Legal Proceedings 48  
       
Item 1A.   Risk Factors 48  
       
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds 48  
       
Item 3.   Defaults Upon Senior Securities 48  
       
Item 4.   Mine Safety Disclosures 49  
       
Item 5.   Other Information 49  
       
Item 6.   Exhibits 49  
     
SIGNATURES 50  

 

 

 

Audax Credit BDC Inc.

Statements of Assets and Liabilities

March 31, 2021 and December 31, 2020

(Expressed in U.S. Dollars)

 

   March 31, 2021     
   (unaudited)   December 31, 2020 
Assets          
Investments, at fair value          
Non-Control/Non-Affiliate investments (Cost of $369,765,279 and $358,990,792, respectively)  $367,260,244   $355,359,843 
Cash and cash equivalents   13,622,836    4,289,122 
Interest receivable   1,119,275    954,012 
Receivable from bank loan repayment   34,970    - 
Other assets   146,250    - 
           
Total assets  $382,183,575   $360,602,977 
           
Liabilities          
Accrued expenses and other liabilities  $313,148   $316,522 
Fee due to administrator(a)   66,250    66,250 
Fees due to investment advisor, net of waivers(a)   623,262    614,844 
Payable for investments purchased   13,020,700    2,722,500 
           
Total liabilities  $14,023,360   $3,720,116 
Commitments and contingencies(b)          
           
Net Assets          
Common stock, $0.001 par value per share, 100,000,000 shares authorized,  39,009,531 and 38,343,580 shares issued and outstanding, respectively  $39,009   $38,343 
Capital in excess of par value   370,025,442    363,826,108 
Total distributable earnings   (1,904,236)   (6,981,590)
Total Net Assets  $368,160,215   $356,882,861 
           
Net Asset Value per Share of Common Stock at End of Period  $9.44   $9.31 
           
Shares Outstanding   39,009,531    38,343,580 

 

  (a) Refer to Note 4-Related Party Transactions for additional information.
  (b) Refer to Note 8-Commitments and Contingencies for additional information.

 

The accompanying notes are an integral part of these financial statements.

 

2

 

Audax Credit BDC Inc.

Statements of Operations

(Expressed in U.S. Dollars)

(unaudited)

 

   Three Months Ended   Three Months Ended 
   March 31, 2021   March 31, 2020 
Investment Income          
Interest income          
Non-Control/Non-Affiliate  $4,768,685   $5,202,708 
Other   274    28,670 
Total interest income   4,768,959    5,231,378 
Other income          
Non-Control/Non-Affiliate   47,514    14,740 
Total income   4,816,473    5,246,118 
           
Expenses          
Base management fee(a)  $914,050   $880,852 
Incentive fee(a)   291,293    661,359 
Administrative fee(a)   66,250    66,250 
Directors' fees   56,250    52,500 
Professional fees   93,318    97,942 
Other expenses   89,223    48,385 
           
Expenses before waivers from investment adviser and administrator   1,510,384    1,807,288 
Base management fee waivers(a)   (319,917)   (308,298)
Incentive fee waivers(a)   (262,164)   (563,778)
Total expenses, net of waivers   928,303    935,212 
Net Investment Income   3,888,170    4,310,906 
           
Realized and Unrealized Gain (Loss) on Investments          
Net realized gain (loss) on investments   63,270    (3,776)
Net change in unrealized appreciation (depreciation) on investments   1,125,914    (15,537,533)
Net realized and unrealized gain (loss) on investments   1,189,184    (15,541,309)
           
Net Increase (Decrease) in Net Assets Resulting from Operations  $5,077,354   $(11,230,403)
           
Basic and Diluted per Share of Common Stock:          
Net investment income  $0.10   $0.12 
Net increase (decrease) in net assets resulting from operations  $0.13   $(0.31)
           
Weighted average shares of common stock outstanding basic diluted   38,957,735    36,541,077 

 

  (a)Refer to Note 4-Related Party Transactions for additional information

 

The accompanying notes are an integral part of these financial statements.

 

3

 

Audax Credit BDC Inc.

Statements of Changes in Net Assets

(Expressed in U.S. Dollars)

(unaudited)

 

   Three Months Ended
March 31, 2021
   Three Months Ended
March 31, 2020
 
Operations          
Net investment income  $3,888,170   $4,310,906 
Net realized gain (loss) on investments   63,270    (3,776)
Net change in unrealized appreciation (depreciation) on investments   1,125,914    (15,537,533)
Net increase (decrease) in net assets resulting from operations   5,077,354    (11,230,403)
           
Capital Share Transactions:          
Issuance of common stock   6,200,000    15,000,000 
Net increase in net assets from capital share transactions   6,200,000    15,000,000 
           
Net Increase in Net Assets   11,277,354    3,769,597 
           
Net Assets, Beginning of Period   356,882,861    331,399,673 
           
Net Assets, End of Period  $368,160,215   $335,169,270 

 

The accompanying notes are an integral part of these financial statements.

 

4

 

Audax Credit BDC Inc.

Statements of Cash Flows 

(Expressed in U.S. Dollars) 

(unaudited)

 

   Three Months Ended   Three Months Ended 
   March 31, 2021   March 31, 2020 
Cash flows from operating activities:          
Net increase (decrease) in net assets resulting from operations  $5,077,354   $(11,230,403)
Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by operating activities:          
Net realized (gain) loss on investments   (63,270)   3,776 
Net change in unrealized (appreciation) depreciation on investments   (1,125,914)   15,537,533 
Accretion of original issue discount interest and payment-in-kind interest   (159,050)   (93,473)
Decrease in receivable from investments sold   -    1,993,379 
(Increase) decrease in interest receivable   (165,263)   43,544 
Increase in receivable from bank loan repayment   (34,970)   (4,904,256)
(Increase) decrease in other assets   (146,250)   (147,795)
(Decrease) increase in accrued expenses and other liabilities   (3,374)   117,974 
Increase (decrease) in fees due to investment advisor(a)   8,418    (18,001)
Increase in payable for investments purchased   10,298,200    11,924,115 
Investment activity:          
Investments purchased   (31,758,494)   (34,327,808)
Proceeds from investments sold   5,113,536    5,743,556 
Repayment of bank loans   16,092,791    18,146,113 
Total investment activity   (10,552,167)   (10,438,139)
           
Net cash provided by operating activities   3,133,714    2,788,254 
           
Cash flows from financing activities:          
Issuance of shares of common stock   6,200,000    15,000,000 
           
Net cash provided by financing activities   6,200,000    15,000,000 
           
Net increase in cash and cash equivalents   9,333,714    17,788,254 
           
Cash and cash equivalents:          
Cash and cash equivalents, beginning of period   4,289,122    5,506,217 
           
Cash and cash equivalents, end of period  $13,622,836   $23,294,471 
           
Supplemental non-cash information          
Payment-in-kind ("PIK") interest income  $40,499   $- 

 

(a)Refer to Note 4-Related Party Transactions for additional information

 

The accompanying notes are an integral part of these financial statements.

 

5

 

Audax Credit BDC Inc. 

Schedule of Investments 

As of March 31, 2021 

(Expressed in U.S. Dollars) 

(unaudited)

 

             
Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (99.5%)(g)(h):               
                
Healthcare & Pharmaceuticals               
Radiology Partners, Senior Secured Term B Loan (First Lien), 4.44% (Libor + 4.25%), maturity 7/9/25(i)  $4,215,792   $4,348,811   $4,197,723 
Advarra, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/26   4,177,412    4,144,447    4,177,411 
Young, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/7/24   3,785,011    3,776,607    3,728,235 
Confluent Health, Senior Secured Initial Term Loan, 5.19% (Libor + 5.00%), maturity 6/24/26   3,444,968    3,416,994    3,444,967 
Specialty Care, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 9/1/23   3,300,315    3,302,737    3,300,314 
PharMedQuest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 10/31/24(i)(j)   3,298,398    3,264,486    3,265,413 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 3/14/25(i)   3,247,592    3,263,336    3,235,412 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 8/1/25   3,145,267    3,131,000    3,098,088 
Waystar, Senior Secured Term Loan B, 4.19% (Libor + 4.00%), maturity 10/22/26(i)   2,972,494    2,963,816    2,983,994 
Physicians Endoscopy, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 8/18/23   2,874,893    2,859,204    2,759,897 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/30/27(i)   2,500,000    2,491,171    2,504,796 
Soliant, Senior Secured Term Loan, 5.00% (Libor + 4.25%), maturity 3/24/28(i)   2,500,000    2,481,250    2,481,250 
Zelis RedCard, Senior Secured Initial Term Loan, 3.69% (Libor + 3.50%), maturity 9/30/26(i)   2,438,979    2,426,383    2,435,382 
MedRisk, Senior Secured Initial Term Loan (First Lien), 2.94% (Libor + 2.75%), maturity 12/27/24(i)   2,418,750    2,422,809    2,418,750 
Eating Recovery Center, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 9/23/24(i)   2,415,396    2,399,484    2,415,396 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/1/24(i)   2,429,746    2,421,612    2,397,568 
OB Hospitalist Group, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/1/24   2,316,088    2,308,067    2,316,088 
Premise Health, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 7/10/25   2,300,295    2,306,338    2,300,295 
MedRisk, Senior Secured Initial Loan (Second Lien), 6.94% (Libor + 6.75%), maturity 12/29/25(i)   2,100,000    2,079,842    2,100,000 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 7/24/26(i)   1,970,000    1,964,068    1,958,098 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 4.69% (Libor + 4.50%), maturity 12/22/25   1,955,000    1,942,247    1,940,338 
CareCentrix, Senior Secured Initial Term Loan, 4.69% (Libor + 4.50%), maturity 4/3/25   1,850,000    1,844,150    1,850,000 
Alpaca, Senior Secured Term Loan, 7.75% (Libor + 6.75%), maturity 4/19/24(j)   1,653,095    1,633,228    1,570,440 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27(i)   1,500,000    1,477,500    1,507,632 
nThrive, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.75%), maturity 1/29/29   1,500,000    1,470,000    1,488,750 
Upstream Rehabilitation, Senior Secured Term Loan, 4.69% (Libor + 4.50%), maturity 11/20/26(i)   1,485,000    1,483,084    1,486,248 
CPS, Unitranche, 6.50% (Libor + 5.50%), maturity 2/28/25(j)   1,473,885    1,458,313    1,444,407 
Stepping Stones, Unitranche, 7.25% (Libor + 6.25%), maturity 2/5/25(i)(j)   1,377,998    1,362,295    1,364,218 
Wedgewood Pharmacy, Senior Secured TL, 5.25% (Libor + 4.50%), maturity 2/24/28(i)   1,000,000    990,000    998,750 
nThrive, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 1/28/28(i)   1,000,000    995,000    996,794 
Athena, Senior Secured Term B-1 Loan (First Lien), 4.69% (Libor + 4.50%), maturity 2/11/26(i)   987,443    979,954    991,789 
Allied Benefit Systems, Senior Secured Initial Term B Loan, 5.50% (Libor + 4.75%), maturity 11/18/26   997,500    983,593    990,019 
Veritext, Senior Secured Initial Term Loan (Second Lien), 7.19% (Libor + 7.00%), maturity 7/31/26   1,000,000    996,264    987,500 
Ensemble, Senior Secured Closing Date Term Loan, 3.94% (Libor + 3.75%), maturity 8/3/26(i)   985,000    981,047    985,696 
Dermatologists of Central States, Senior Secured Term Loan, 8.00% (Libor + 7.00%), maturity 4/20/22(j)   964,895    964,895    954,040 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 6.50% (Libor + 5.50%), maturity 5/9/25   966,861    957,297    945,107 
Alcami, Senior Secured Initial Term Loan (First Lien), 4.44% (Libor + 4.25%), maturity 7/14/25   975,000    971,739    943,313 
ATI Physical Therapy, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/10/23(i)   910,079    913,261    910,656 
Specialty Care, Senior Secured Initial Term Loan (Second Lien), 9.25% (Libor + 8.25%), maturity 9/1/24   850,000    844,834    850,000 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 7/24/26(i)   498,750    494,048    501,026 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/6/25(i)   500,000    495,000    495,000 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/6/25   427,845    427,378    426,776 
Alpaca, Senior Secured Revolver, 7.75% (Libor + 6.75%), maturity 4/19/24(j)   129,426    125,543    122,955 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24   -    (7,619)   - 
                
High Tech Industries               
Qlik, Senior Secured 2021 Refinancing Term Loan, 4.44% (Libor + 4.25%), maturity 4/26/24(i)   3,930,150    3,911,514    3,930,261 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/1/27(i)   3,500,000    3,485,400    3,504,523 
Masergy, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/16/24   3,428,571    3,422,286    3,428,571 
Syncsort, Senior Secured 2018 Refinancing Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 8/16/24(i)   3,378,570    3,360,112    3,378,570 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 8/14/26(i)   3,114,817    3,110,517    3,120,172 
EverCommerce, Senior Secured Initial Term Loan, 5.69% (Libor + 5.50%), maturity 8/23/25   3,114,766    3,051,900    3,114,766 
Ivanti Software, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 12/1/27(i)   3,000,000    2,958,278    3,018,762 
Infogroup, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 4/3/23   2,882,406    2,866,513    2,867,994 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27(i)   2,652,231    2,625,643    2,658,014 
Idera, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 3/2/28(i)   2,618,959    2,617,660    2,608,871 
Precisely, Senior Secured Term Loan B, 5.00% (Libor + 4.25%), maturity 3/19/28(i)   2,500,000    2,487,500    2,493,750 
Flexera Software, Senior Secured Term B-1 Loan (First Lien), 4.25% (Libor + 3.25%), maturity 3/3/28(i)   2,408,853    2,408,853    2,417,572 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/9/27(i)   1,995,000    1,986,796    1,994,986 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 3/5/27(i)(q)   1,985,003    1,877,968    1,971,185 
QuickBase, Senior Secured Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 4/2/26   1,965,000    1,957,659    1,945,350 
Intermedia , Senior Secured New Term Loan (First Lien), 7.00% (Libor + 6.00%), maturity 7/21/25   1,955,000    1,944,255    1,940,338 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 4/18/25(i)   1,701,875    1,709,631    1,704,466 
OEConnection, Senior Secured Initial Term Loan, 4.19% (Libor + 4.00%), maturity 9/25/26   1,613,361    1,607,498    1,605,294 
Navex Global, Senior Secured Initial Term Loan (First Lien), 3.44% (Libor + 3.25%), maturity 9/5/25(i)   1,462,500    1,451,253    1,453,520 
Corsair, Senior Secured Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 8/28/24   1,268,108    1,259,778    1,268,108 

 

The accompanying notes are an integral part of these financial statements.

 

6

 

Audax Credit BDC Inc. 

Schedule of Investments (Continued) 

As of March 31, 2021 

(Expressed in U.S. Dollars) 

(unaudited)

 

             
Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
High Tech Industries (continued)               
Infoblox, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 12/1/27(i)  $1,000,000   $995,364   $1,001,538 
Veracode, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 11/5/27   1,000,000    990,669    997,500 
SmartBear, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.25%), maturity 11/20/27   1,000,000    990,000    992,500 
Imperva, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/12/26(i)   993,680    985,027    996,842 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/12/25(i)   995,000    995,000    996,588 
Insurity, Senior Secured Closing Date Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 7/31/26(i)   987,500    983,545    989,969 
Unison, Unitranche, 8.00% (Libor + 7.00%), maturity 6/25/26(j)   992,500    970,067    987,538 
Community Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 12/2/22   823,635    820,832    815,399 
Global Knowledge, Senior Secured Initial Term Loan (Second Lien), 13.25% (Libor + 12.25%), maturity 1/20/22(i)(m)   1,000,000    998,052    600,000 
HelpSystems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/19/26(i)   495,000    493,894    498,552 
Liaison, Senior Secured 2021 Term Loan, 4.50% (Libor + 3.75%), maturity 3/11/28(i)   498,750    497,503    497,503 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 4.00%), maturity 10/16/26(i)   495,000    469,620    495,499 
Masergy, Senior Secured 2017 Replacement Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 12/15/23   478,658    477,589    478,658 
GlobalLogic, Senior Secured Initial Term Loan, 2.94% (Libor + 2.75%), maturity 8/1/25(i)   214,763    213,972    214,227 
                
Services: Business               
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 9/23/25   3,940,000    3,910,488    3,920,300 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.44% (Libor + 4.25%), maturity 10/11/25(i)   3,910,000    3,906,506    3,910,324 
Addison, Senior Secured Initial Term Loan, 4.94% (Libor + 4.75%), maturity 4/15/26   2,947,500    2,905,208    2,947,500 
Fleetwash, Senior Secured Incremental Term Loan, 5.75% (Libor + 4.75%), maturity 10/1/24   2,925,394    2,906,768    2,918,080 
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.94% (Libor + 3.75%), maturity 2/9/26(i)   2,947,462    2,930,547    2,914,083 
Aimbridge, Senior Secured Initial Term Loan (2019) (First Lien), 3.94% (Libor + 3.75%), maturity 2/2/26(i)   2,945,150    2,937,360    2,869,343 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/9/27(i)   2,481,250    2,459,181    2,490,277 
HireRight, Senior Secured Initial Term Loan (Second Lien), 7.44% (Libor + 7.25%), maturity 7/10/26   2,500,000    2,483,617    2,462,500 
Allied Universal, Senior Secured Initial Term Loan, 4.44% (Libor + 4.25%), maturity 7/10/26(i)   2,459,894    2,445,560    2,459,397 
Newport Group, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 9/12/25(i)   2,439,950    2,429,647    2,434,186 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 6/19/24   2,363,523    2,363,523    2,336,933 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/10/25   2,335,958    2,331,934    2,335,958 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27   2,069,231    2,044,941    2,053,712 
Veregy, Senior Secured Incremental Term Loan, 7.00% (Libor + 6.00%), maturity 11/3/27   1,995,000    1,938,134    1,985,025 
Quantum Health, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 5.00%), maturity 12/22/27(i)   1,500,000    1,477,500    1,503,750 
Eliassen Group, Senior Secured Initial Term B Loan, 4.44% (Libor + 4.25%), maturity 11/5/24   1,483,744    1,478,836    1,483,744 
First Advantage, Senior Secured Term B-1 Loan (First Lien), 3.19% (Libor + 3.00%), maturity 1/31/27(i)   1,489,994    1,477,008    1,481,528 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 5.50% (Libor + 4.50%), maturity 3/27/24   1,455,641    1,452,231    1,439,265 
DBi Services, Senior Secured Term B Loan (Second Lien), 9.00% (Libor + 9.00%), maturity 2/2/26   1,379,149    1,379,149    1,379,149 
Epic Staffing Group, Senior Secured Initial Term Loan, 7.25% (Libor + 6.25%), maturity 2/5/27   1,094,595    1,064,595    1,086,385 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/4/27(i)   996,237    996,237    999,140 
WCG, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/8/27(i)   992,500    983,636    994,803 
Franklin Energy, Senior Secured Term B Loan (First Lien), 4.19% (Libor + 4.00%), maturity 8/14/26(i)   985,000    982,872    960,375 
Diversified, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 12/23/23   944,744    940,168    935,297 
Worley Claims Services, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 6/3/26   542,479    539,312    542,479 
System One, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 3/2/28   500,000    497,500    496,250 
Therma Holdings, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/16/27   418,306    414,113    415,169 
                
Chemicals, Plastics & Rubber               
Plaskolite, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 12/15/25(i)   3,910,000    3,858,367    3,923,815 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/30/24   3,383,880    3,374,264    3,307,743 
DuBois Chemicals, Senior Secured Term Loan (Second Lien), 8.69% (Libor + 8.50%), maturity 9/30/27   3,000,000    2,970,648    2,977,500 
Vertellus, Senior Secured Term Loan Facility, 7.00% (Libor + 6.00%), maturity 12/21/27   2,994,750    2,919,750    2,972,289 
Universal Fiber Systems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 10/4/21   2,723,577    2,722,029    2,587,398 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 1/31/25(i)   2,648,100    2,655,442    2,537,017 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.94% (Libor + 3.75%), maturity 12/12/25(i)   2,444,975    2,425,348    2,331,430 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 6.94% (Libor + 6.75%), maturity 9/6/26   2,000,000    2,001,884    1,985,000 
Q Holding, Senior Secured Term B Loan (2019), 6.00% (Libor + 5.00%), maturity 12/29/23   1,970,000    1,962,576    1,920,750 
Zep, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/12/24(i)   1,931,209    1,929,726    1,916,674 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 4.69% (Libor + 4.50%), maturity 9/30/26(i)   1,790,841    1,754,641    1,777,410 
Prince Minerals, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 3/31/25(i)   970,000    966,939    948,144 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 10/28/24(i)   974,811    961,884    931,196 
Spartech, Senior Secured Term Loan, 5.50% (Libor + 4.50%), maturity 10/17/25   820,833    810,422    820,833 
Polytek, Senior Secured Term Loan, 6.00% (Libor + 5.00%), maturity 9/20/24   498,747    493,747    497,501 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 9/6/25(i)   496,183    464,458    489,498 
Vertellus, Senior Secured Revolving Facility, 7.00% (Libor + 6.00%), maturity 12/22/25   -    (12,156)   - 

 

The accompanying notes are an integral part of these financial statements.

 

7

 

Audax Credit BDC Inc. 

Schedule of Investments (Continued) 

As of March 31, 2021 

(Expressed in U.S. Dollars) 

(unaudited)

 

             
Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
Aerospace & Defense               
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 7/26/24  $5,262,071   $5,215,268   $5,222,606 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.69% (Libor + 3.50%), maturity 4/6/26(i)   3,296,253    3,287,874    3,211,209 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 4/30/26   2,000,000    2,008,006    1,945,000 
Whitcraft, Unitranche, 7.00% (Libor + 6.00%), maturity 4/3/23   1,977,439    1,968,611    1,928,003 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.69% (Libor + 3.50%), maturity 4/6/26(i)   1,772,179    1,767,674    1,726,457 
Eton, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 5/1/25(i)   1,493,645    1,489,031    1,497,295 
Tronair, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 9/8/23   1,437,323    1,433,153    1,302,215 
Amentum, Senior Secured Tranche 2 Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 1/29/27(i)   1,000,000    981,457    1,005,573 
Peraton, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/1/28(i)   1,000,000    995,000    1,002,887 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 1/29/27(i)   992,500    963,722    987,332 
API Technologies, Senior Secured Initial Term Loan (First Lien), 4.44% (Libor + 4.25%), maturity 5/9/26(i)   987,437    960,733    975,296 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/30/25(i)   491,514    489,457    478,751 
Novaria Group, Senior Secured Initial Term Loan, 6.50% (Libor + 5.50%), maturity 1/27/27   481,818    477,388    477,000 
                
Services: Consumer               
A Place For Mom, Senior Secured Term Loan, 4.75% (Libor + 3.75%), maturity 8/10/24   2,632,050    2,631,659    2,579,409 
Weld North, Senior Secured Term Loan B (First Lien), 4.75% (Libor + 4.00%), maturity 12/21/27(i)   2,438,756    2,438,756    2,440,061 
Cambium Learning, Senior Secured Initial Term Loan (First Lien), 4.69% (Libor + 4.50%), maturity 12/18/25(i)   2,257,836    2,175,053    2,263,891 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.44% (Libor + 3.25%), maturity 5/14/26(i)   2,063,750    2,059,951    2,044,241 
LegalShield, Senior Secured Initial Term Loan (First Lien), 3.44% (Libor + 3.25%), maturity 5/1/25(i)   1,927,000    1,916,989    1,909,099 
Ned Stevens, Senior Secured Term A Loan, 6.75% (Libor + 5.75%), maturity 9/30/25(j)   1,477,124    1,456,428    1,469,739 
Smart Start, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 8/19/27   995,000    985,731    992,513 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.44% (Libor + 4.25%), maturity 7/30/25(i)   975,000    973,362    935,874 
LegalShield, Senior Secured New Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/1/25   497,500    490,447    493,769 
StubHub, Senior Secured USD Term B Loan, 3.69% (Libor + 3.50%), maturity 2/12/27(i)   493,750    491,543    480,051 
Ned Stevens, Senior Secured Revolver, 5.75% (Libor + 4.75%), maturity 9/30/25(j)   -    (2,614)   - 
                
Banking, Finance, Insurance & Real Estate               
American Beacon Advisors, Senior Secured Tranche C Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 4/30/23   2,500,000    2,506,109    2,500,000 
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 3/18/27(i)   2,481,533    2,466,978    2,481,533 
Kestra Financial, Senior Secured Initial Term Loan, 4.44% (Libor + 4.25%), maturity 6/3/26   1,970,000    1,954,715    1,965,075 
Integro Insurance Brokers, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%), maturity 10/31/22   1,951,993    1,938,898    1,937,353 
Orion, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 9/24/27(i)   1,496,250    1,481,250    1,497,853 
HighTower, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 1/31/25(i)   1,493,104    1,474,316    1,493,104 
EPIC Insurance, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 9/6/24   1,451,250    1,449,429    1,447,622 
Advisor Group, Senior Secured Term B-1 Loan, 4.69% (Libor + 4.50%), maturity 7/31/26(i)   1,037,312    1,029,981    1,038,791 
Mitchell International, Senior Secured Amendment No. 2 New Term Loan Facility (First Lien), 4.75% (Libor + 4.25%), maturity 11/29/24(i)   995,000    945,092    998,644 
Sedgwick Claims, Senior Secured Initial Term Loan, 3.44% (Libor + 3.25%), maturity 12/31/25(i)   493,687    493,135    487,865 
                
Containers, Packaging & Glass               
ProAmpac, Senior Secured 2020-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/3/25(i)   2,977,335    2,977,335    2,983,016 
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 4.19% (Libor + 4.00%), maturity 7/18/26   2,901,829    2,888,791    2,901,829 
Potters Industries, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/14/27(i)   1,500,000    1,486,093    1,505,625 
TricorBraun, Senior Secured Closing Date Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 3/3/28(i)   1,511,246    1,503,690    1,502,001 
Lacerta, Senior Secured Term Loan, 6.50% (Libor + 5.75%), maturity 12/30/26   997,500    987,500    990,019 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 3.94% (Libor + 3.75%), maturity 7/31/26(i)   987,500    985,563    982,267 
Tank Holding, Senior Secured 2020 Refinancing Term Loan (First Lien), 3.44% (Libor + 3.25%), maturity 3/26/26(i)   985,000    981,681    973,169 
Pregis Corporation, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/31/26   500,000    497,682    500,000 
Applied Adhesives, Senior Secured Term A Loan, 5.75% (Libor + 5.00%), maturity 3/12/27(i)   500,000    494,351    495,000 
Berlin Packaging, Senior Secured Initial Term Loan (First Lien), 3.00% (Libor + 3.00%), maturity 11/7/25(i)   493,655    474,075    486,618 
Alpha Packaging, Senior Secured Tranche B-1 Term Loan, 7.00% (Libor + 6.00%), maturity 11/12/21   476,962    476,538    476,962 
Applied Adhesives, Senior Secured Revolving Loan, 5.75% (Libor + 5.00%), maturity 3/12/27(i)   -    (711)   - 
                
Automotive               
Mavis, Senior Secured Closing Date Term Loan (First Lien), 3.44% (Libor + 3.25%), maturity 3/20/25(i)   3,819,706    3,808,288    3,819,706 
Highline, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 11/9/27(i)   2,863,636    2,790,623    2,877,239 
Les Schwab Tire, Senior Secured Initial Term Loan, 4.25% (Libor + 3.50%), maturity 11/2/27(i)   1,995,000    1,985,649    2,001,691 
Truck Hero, Senior Secured Initial Term Loan, 4.50% (Libor + 3.75%), maturity 1/31/28(i)   1,500,000    1,500,000    1,500,577 
Safe Fleet, Senior Secured Tranche B-1 Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 2/3/25   975,000    955,582    960,375 
IXS, Senior Secured Initial Term Loan, 5.00% (Libor + 4.25%), maturity 3/5/27(i)   800,637    798,173    803,099 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 6.75%), maturity 2/2/26   500,000    490,069    492,500 
                
Capital Equipment               
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 3.94% (Libor + 3.75%), maturity 9/30/24(i)   2,037,185    2,037,185    1,963,615 
BAS, Senior Secured Repricing Term Loan, 4.75% (Libor + 3.75%), maturity 5/21/24(i)   1,944,289    1,946,772    1,944,352 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/1/25(i)   1,500,000    1,480,138    1,503,081 
Edward Don, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 7/2/25   1,460,050    1,455,775    1,375,367 
Flow Control Group, Senior Secured Term Loan (1st Lien), 4.25% (Libor + 3.75%), maturity 3/17/28(i)   1,000,000    997,500    1,000,000 
Cole-Parmer, Senior Secured Term B-1 Loan (First Lien), 4.19% (Libor + 4.00%), maturity 11/4/26(i)   990,000    986,359    991,306 
TriMark, Senior Secured Initial Term Loan (First Lien), 3.69% (Libor + 3.50%), maturity 8/28/24   981,071    892,374    598,453 
Infinite Electronics, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.75%), maturity 3/2/28(i)   500,000    498,750    501,875 
Restaurant Technologies, Senior Secured Initial Loan (Second Lien), 6.69% (Libor + 6.50%), maturity 10/1/26   500,000    503,385    496,250 
Duravant, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/19/24   493,687    493,687    493,687 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/2/24(i)   487,406    490,318    488,001 

  

The accompanying notes are an integral part of these financial statements.

 

8

 

Audax Credit BDC Inc. 

Schedule of Investments (Continued) 

As of March 31, 2021 

(Expressed in U.S. Dollars) 

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
Construction & Building               
PlayPower, Senior Secured Initial Term Loan, 5.69% (Libor + 5.50%), maturity 5/8/26  $1,853,945   $1,853,945   $1,821,500 
Tangent, Senior Secured Closing Date Term Loan (First Lien), 4.94% (Libor + 4.75%), maturity 11/30/24   1,806,601    1,795,370    1,802,085 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 9/29/25   1,500,000    1,471,144    1,492,500 
DiversiTech Corporation, Senior Secured Tranche B-2 Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 6/3/24   1,455,972    1,447,172    1,452,332 
PlayCore, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 9/30/24(i)   964,420    962,944    958,451 
CHI Overhead Doors, Senior Secured Third Amendment Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 7/31/25   620,416    618,499    620,416 
Hoffman Southwest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 8/14/23   517,526    516,071    513,645 
DiversiTech Corporation, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 6/2/25   500,000    490,488    498,750 
Acuren, Senior Secured Initial Term Loan, 4.44% (Libor + 4.25%), maturity 1/23/27(i)   495,000    492,793    497,382 
                
Transportation: Cargo               
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 10/12/24(i)   3,599,675    3,596,287    3,549,288 
Transplace, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 10/7/24(i)   2,435,078    2,430,374    2,444,876 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27   1,995,000    1,974,664    1,980,038 
Kenan Advantage Group, Senior Secured U.S. Term B-1 Loan, 4.50% (Libor + 3.75%), maturity 3/24/26(i)   997,500    992,513    996,335 
                
Wholesale               
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 3/20/25   3,885,858    3,886,342    3,856,714 
PetroChoice, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 8/19/22   1,890,184    1,878,508    1,842,930 
ABB Optical, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 6/15/23   1,436,108    1,435,743    1,403,796 
                
Consumer Goods: Non-durable               
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 10/26/23   2,196,149    2,186,341    2,146,736 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 6.25% (Libor + 5.00%), maturity 9/11/23   1,906,766    1,899,000    1,882,931 
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/16/24(i)   974,836    979,883    944,791 
                
Forest Products & Paper               
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/21/23(i)   2,412,668    2,405,973    2,245,241 
Loparex, Senior Secured Initial Term Loan (First Lien), 4.69% (Libor + 4.50%), maturity 7/31/26   1,477,500    1,465,635    1,470,113 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 10.50% (Libor + 9.50%), maturity 11/21/24   1,250,000    1,250,000    1,215,625 
                
Beverage, Food & Tobacco               
Sovos Brands, Senior Secured Initial Term Loan (2018), 4.94% (Libor + 4.75%), maturity 11/20/25   2,452,455    2,437,148    2,452,455 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien) , 4.75% (Libor + 3.75%), maturity 8/25/25   1,950,000    1,944,113    1,920,750 
                
Media: Advertising, Printing & Publishing               
Ansira, Unitranche, 7.50% (Libor + 6.50%), maturity 12/20/24   2,052,010    2,043,748    1,539,008 
Northstar, Senior Secured Term Loan, 6.75% (Libor + 6.25%), maturity 6/7/24   1,387,533    1,387,533    1,342,439 
Vestcom International, Senior Secured L/C Collaterilized, 5.00% (Libor + 4.00%), maturity 12/19/23   777,728    779,713    773,839 
                
Environmental Industries               
Denali Water Solutions, Senior Secured Term Loan, 5.00% (Libor + 4.25%), maturity 3/17/28(i)   2,000,000    1,980,000    2,000,000 
                
Metals & Mining               
Dynatect, Senior Secured Term B Loan, 5.50% (Libor + 4.50%), maturity 9/30/22   985,476    984,947    970,694 
                
Hotel, Gaming & Leisure               
Auto Europe, Senior Secured Initial Dollar Term Loan, 6.00% (Libor + 5.00%), maturity 10/21/23   1,119,231    1,113,509    895,385 
                
Health Care Equipment & Services               
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.44% (Libor + 4.25%), maturity 8/31/26(i)   530,742    526,508    527,522 
                
Consumer Goods: Durable               
Careismatic Brands, Senior Secured Initial Term Loan (First Lien), 3.75% (Libor + 3.25%), maturity 1/6/28(i)   500,000    498,750    498,995 
                
 Total Bank Loans       $368,457,656   $366,318,420 

 

The accompanying notes are an integral part of these financial statements.

 

9

 

Audax Credit BDC Inc. 

Schedule of Investments (Continued) 

As of March 31, 2021 

(Expressed in U.S. Dollars) 

(unaudited)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)   Par  Cost   Value 
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.3%)(g)(h):              
               
Services: Business              
DBi Services, Class A-1 Preferred Units (800.53 units)(k)      $800,535   $520,348 
DBi Services, Class B Common Shares (169,362.31 shares)(l)(m)       -    - 
             
Services: Consumer              
Ned Stevens, Class B Common Units (261,438 Common B units, Fair value of $2,191)(j)(m)(n)(o)       261,438    249,076 
             
Chemicals, Plastics & Rubber              
Vertellus, Series A Units (1,651 Series A units, Fair value of $165,138)(m)(r)       165,138    160,087 
             
Healthcare & Pharmaceuticals              
Alpaca, Class A Units (45,745.61 Class A Units, Fair value of $12,313)(j)(m)(o)(p)       80,512    12,313 
               
 Total Equity and Preferred Shares      $1,307,623   $941,824 
             
Total Portfolio Investments(s)      $369,765,279   $367,260,244 

 

(a)All companies are located in the United States of America, unless otherwise noted.
(b)Interest rate percentages represent actual interest rates which are indexed from then 30-day London Interbank Offered Rate ("LIBOR") unless otherwise noted. LIBOR rates are subject to interest rate floors which can vary based on the contractual agreement with the borrower.  Due dates represent the contractual maturity date.
(c)All loans are income-producing, unless otherwise noted.
(d)All investments are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act") unless otherwise noted.
(e)All investments are exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act.
(f)Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the FASB Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.
(g)Percentages are calculated using fair value of investments over net assets.
(h)As defined in 1940 Act, the Company is not deemed to be an “Affiliated Person” of or “Control” this portfolio company because it neither owns 5% or  more of the portfolio company’s outstanding voting securities nor has the power to exercise control over the management or policies of such portfolio company (including through a management agreement).
(i)Investment was valued using Level 2 inputs within the ASC 820 fair value hierarchy.  Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.
(j)Three of our affiliated funds, Audax Direct Lending Solutions Fund - A, L.P., Audax Direct Lending Solutions Fund - C, L.P., and Audax Direct Lending Solutions Fund - D, L.P., 'co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission.
(k)Represents an investment owned by APD Dbi Preferred, Inc., a holding company for the investment in DBi.
(l)Represents an investment owned by APD Dbi Common, Inc., a holding company for the investment in DBi.
(m)Investment is non-income producing.
(n)Represents an investment in APD NS Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(o)Other net assets of $0 at the aggregator levels are included in the fair value of the investments when using the net asset value as a practical expedient.
(p)Represents an investment in APD ALP Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(q)The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.
(r)Represents an investment in ADP VERT Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(s)At March 31, 2021, the cost of investments for income tax purposes was $369,765,279, the gross unrealized depreciation for federal tax purposes was $4,314,152, the gross unrealized appreciation for federal income tax purposes was $1,809,117, and the net unrealized depreciation was $2,505,035.

 

The accompanying notes are an integral part of these financial statements.

 

10

 

Audax Credit BDC Inc.

Schedule of Investments

As of December 31, 2020

(Expressed in U.S. Dollars)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS - (99.3%)(g)(h):               
                
Healthcare & Pharmaceuticals               
Advarra, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/26  $4,188,729   $4,154,267   $4,188,728 
Radiology Partners, Senior Secured Term B Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/25(i)   4,215,792    4,347,260    4,176,926 
Tecomet, Senior Secured 2017 Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/1/24   3,918,622    3,904,639    3,879,434 
Young, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/7/24   3,794,840    3,786,074    3,737,916 
Confluent Health, Senior Secured Initial Term Loan, 5.24% (Libor + 5.00%), maturity 6/24/26   3,453,734    3,424,590    3,453,733 
Specialty Care, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 9/1/23   3,308,843    3,311,499    3,308,842 
Zest Dental, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 3/14/25(i)   3,247,592    3,264,389    3,125,437 
Veritext, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 8/1/25(i)   3,153,327    3,139,037    3,090,261 
Physicians Endoscopy, Senior Secured Initial Term Loan (First Lien), 6.50% (Libor + 5.50%), maturity 8/18/23   2,880,590    2,864,047    2,786,971 
Packaging Coordinators, Senior Secured Term B Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/30/27(i)   2,500,000    2,490,762    2,511,458 
Waystar, Senior Secured Term Loan B, 4.24% (Libor + 4.00%), maturity 10/22/26   2,481,250    2,472,081    2,462,641 
MedRisk, Senior Secured Initial Term Loan (First Lien), 2.99% (Libor + 2.75%), maturity 12/27/24   2,425,000    2,429,293    2,425,000 
Eating Recovery Center, Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 9/23/24   2,421,519    2,404,861    2,409,412 
OB Hospitalist Group, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/1/24   2,316,088    2,307,504    2,316,088 
Premise Health, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 7/10/25   2,306,194    2,312,549    2,306,194 
PharMedQuest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 10/31/24(j)   2,298,398    2,272,767    2,298,398 
MedRisk, Senior Secured Initial Loan (Second Lien), 6.99% (Libor + 6.75%), maturity 12/29/25   2,100,000    2,078,820    2,100,000 
Press Ganey, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 7/24/26(i)   1,975,000    1,968,810    1,967,793 
Zelis RedCard, Senior Secured Initial Term Loan, 4.99% (Libor + 4.75%), maturity 9/30/26(i)   1,945,092    1,931,721    1,955,747 
Avalign Technologies, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 12/22/25   1,960,000    1,946,588    1,937,950 
CareCentrix, Senior Secured Initial Term Loan, 4.74% (Libor + 4.50%), maturity 4/3/25(i)   1,862,500    1,856,296    1,831,763 
Alpaca, Senior Secured Term Loan, 7.75% (Libor + 6.75%), maturity 4/19/24(j)   1,657,302    1,636,678    1,591,010 
Symplr, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 12/22/27(i)   1,500,000    1,477,500    1,488,750 
Upstream Rehabilitation, Senior Secured Term Loan, 4.74% (Libor + 4.50%), maturity 11/20/26(i)   1,488,750    1,486,743    1,473,863 
CPS, Unitranche, 6.50% (Libor + 5.50%), maturity 2/28/25(j)   1,477,608    1,461,164    1,444,361 
Stepping Stones, Unitranche, 6.75% (Libor + 5.75%), maturity 12/12/24(j)   1,469,147    1,463,066    1,436,091 
Allied Benefit Systems, Senior Secured Term Loan B, 5.50% (Libor + 4.75%), maturity 11/18/26   1,000,000    985,273    992,500 
Ensemble, Senior Secured Closing Date Term Loan, 3.99% (Libor + 3.75%), maturity 8/3/26(i)   987,500    983,378    990,414 
Athena, Senior Secured Term B Loan (First Lien), 4.74% (Libor + 4.50%), maturity 2/11/26(i)   987,443    979,417    989,278 
Veritext, Senior Secured Initial Term Loan (Second Lien), 7.24% (Libor + 7.00%), maturity 7/31/26   1,000,000    996,131    987,500 
Aegis Sciences, Senior Secured Initial Term Loan (2018) (First Lien), 6.50% (Libor + 5.50%), maturity 5/9/25   977,423    967,355    955,431 
Alcami, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 7/14/25   977,500    974,068    945,731 
Dermatologists of Central States, Senior Secured Term Loan, 8.00% (Libor + 7.00%), maturity 4/20/22(j)   967,378    967,378    935,938 
ATI Physical Therapy, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/10/23(i)   912,467    915,992    902,122 
Specialty Care, Senior Secured Initial Term Loan (Second Lien), 9.25% (Libor + 8.25%), maturity 9/1/24   850,000    844,525    850,000 
Press Ganey, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 7/24/26(i)   500,000    495,149    498,750 
Waystar, Senior Secured 2020 Incremental Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/22/26   498,750    497,500    495,009 
RMP & MedA/Rx, Senior Secured Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/6/25   430,606    430,014    430,606 
Alpaca, Senior Secured Revolver, 7.75% (Libor + 6.75%), maturity 4/19/24(j)   232,967    229,084    223,648 
Advarra, Senior Secured Initial Revolving Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/9/24   114,286    106,667    114,286 
Stepping Stones, Senior Secured COVID-19 Revolving Loan, 6.75% (Libor + 5.75%), maturity 6/30/21(j)   30,537    30,537    29,850 
                
High Tech Industries               
Qlik, Senior Secured 2019 Incremental Term Loan, 4.49% (Libor + 4.25%), maturity 4/26/24   3,940,000    3,919,979    3,910,450 
Netsmart, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/1/27(i)   3,500,000    3,484,841    3,513,749 
Masergy, Senior Secured Initial Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/16/24   3,428,571    3,421,842    3,428,571 
Syncsort, Senior Secured 2018 Refinancing Term Loan (First Lien), 6.49% (Libor + 6.25%), maturity 8/16/24(i)   3,387,038    3,367,343    3,385,883 
Jaggaer, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 8/14/26(i)   3,122,723    3,118,268    3,128,371 
Ivanti Software, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 12/1/27(i)   3,000,000    2,955,819    3,009,205 
EverCommerce, Senior Secured Initial Term Loan, 5.74% (Libor + 5.50%), maturity 8/23/25   2,978,453    2,920,009    2,978,453 
Infogroup, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 4/3/23(i)   2,889,912    2,872,270    2,737,616 
Idera, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 6/28/24(i)   2,618,959    2,617,482    2,622,683 
ECi Software, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 11/9/27(i)   2,000,000    1,991,387    2,004,324 
Sophos, Senior Secured Dollar Tranche Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 3/5/27(i)(q)   1,990,000    1,878,212    1,983,324 
Flexera Software, Senior Secured Initial Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 2/26/25(i)   1,945,000    1,950,930    1,953,467 
QuickBase, Senior Secured Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 4/2/26   1,970,000    1,962,273    1,950,300 
Intermedia , Senior Secured New Term Loan (First Lien), 7.00% (Libor + 6.00%), maturity 7/21/25   1,960,000    1,948,624    1,945,300 
Planview, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 12/17/27(i)   1,750,000    1,732,500    1,750,000 
GlobalLogic, Senior Secured Initial Term Loan, 2.99% (Libor + 2.75%), maturity 8/1/25   1,715,313    1,708,011    1,702,448 
Bomgar, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 4/18/25(i)   1,706,250    1,714,482    1,693,453 
OEConnection, Senior Secured Initial Term Loan, 4.24% (Libor + 4.00%), maturity 9/25/26   1,617,452    1,611,336    1,609,365 
Liaison, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 12/20/26   1,485,000    1,481,489    1,485,000 
Navex Global, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 9/5/25(i)   1,466,250    1,454,411    1,448,683 
Corsair, Senior Secured Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 8/28/24   1,386,885    1,377,896    1,386,885 

 

The accompanying notes are an integral part of these financial statements.

 

11

 

Audax Credit BDC Inc.

Schedule of Investments

As of December 31, 2020 (Continued)

(Expressed in U.S. Dollars)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
High Tech Industries (continued)               
                
Infoblox, Senior Secured Term Loan, 4.50% (Libor + 3.75%), maturity 12/1/27(i)  $1,000,000   $995,091   $1,002,861 
SmartBear, Senior Secured Term Loan, 4.75% (Libor + 4.25%), maturity 11/20/27(i)   1,000,000    990,000    1,000,000 
Imperva, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/12/26(i)   996,209    987,170    999,433 
Barracuda, Senior Secured 2020 Term Loan (First Lien), 4.50% (Libor + 3.75%), maturity 2/12/25(i)   997,500    997,500    999,242 
Veracode, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 11/5/27   1,000,000    990,167    992,500 
Unison, Senior Secured 2020 Term Loan, 8.00% (Libor + 7.00%), maturity 6/25/26(j)   995,000    971,706    990,025 
Insurity, Senior Secured Closing Date Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 7/31/26(i)   990,000    985,877    978,863 
Community Brands, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 12/2/22   825,760    822,759    815,438 
Sparta, Senior Secured New Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 8/21/24(i)   787,901    788,125    787,901 
Global Knowledge, Senior Secured Initial Term Loan (Second Lien), 13.25% (Libor + 12.25%), maturity 1/20/22(i)(m)   1,000,000    997,516    600,000 
Idera, Senior Secured Loan (Second Lien), 10.00% (Libor + 9.00%), maturity 6/28/27   500,000    504,610    500,000 
DigiCert, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 4.00%), maturity 10/16/26(i)   496,250    469,743    497,274 
HelpSystems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/19/26(i)   496,250    495,095    496,786 
Masergy, Senior Secured 2017 Replacement Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 12/15/23   479,908    478,749    479,908 
MultiPlan, Senior Secured Initial Term Loan, 3.75% (Libor + 2.75%), maturity 6/7/23(i)   431,919    428,247    431,919 
Endurance Int'l Group, Senior Secured Refinancing Loan (2018), 4.75% (Libor + 3.75%), maturity 2/9/23(i)   386,371    385,875    386,675 
                
Services: Business               
CoAdvantage, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 9/23/25   3,950,000    3,919,209    3,940,125 
RevSpring, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 10/11/25   3,920,000    3,916,337    3,880,800 
Addison, Senior Secured Initial Term Loan, 4.99% (Libor + 4.75%), maturity 4/15/26   2,955,000    2,910,360    2,947,613 
Fleetwash, Senior Secured Incremental Term Loan, 5.75% (Libor + 4.75%), maturity 10/1/24   2,932,838    2,913,011    2,918,173 
Cast & Crew, Senior Secured Initial Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 2/9/26(i)   2,954,981    2,937,415    2,900,853 
Aimbridge, Senior Secured Initial Term Loan (2019) (First Lien), 3.99% (Libor + 3.75%), maturity 2/2/26(i)   2,952,625    2,944,493    2,812,180 
Duff & Phelps, Senior Secured Initial Dollar Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/9/27(i)   2,487,500    2,464,451    2,505,517 
Allied Universal, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 7/10/26(i)   2,466,122    2,450,635    2,468,305 
HireRight, Senior Secured Initial Term Loan (Second Lien), 7.49% (Libor + 7.25%), maturity 7/10/26   2,500,000    2,482,759    2,462,500 
Newport Group, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 9/12/25(i)   2,446,206    2,435,371    2,391,166 
Sterling Backcheck, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 6/19/24   2,369,662    2,369,662    2,343,003 
Vistage, Senior Secured Term B Loan (First Lien), 5.00% (Libor + 4.00%), maturity 2/10/25   2,335,958    2,331,487    2,335,958 
Service Logic, Senior Secured Closing Date Initial Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 10/29/27   2,030,769    2,005,370    2,015,538 
Veregy, Senior Secured Incremental Term Loan, 7.00% (Libor + 6.00%), maturity 11/3/27(i)   2,000,000    1,940,783    1,980,000 
Eliassen Group, Senior Secured Initial Term B Loan, 4.49% (Libor + 4.25%), maturity 11/5/24   1,485,620    1,480,402    1,485,620 
First Advantage, Senior Secured Term Facility (First Lien), 3.49% (Libor + 3.25%), maturity 1/31/27(i)   1,493,747    1,480,164    1,481,489 
Quantum Health, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 5.00%), maturity 12/22/27(i)   1,500,000    1,477,500    1,477,500 
OSG Billing Services, Senior Secured Term B Loan (First Lien), 5.50% (Libor + 4.50%), maturity 3/27/24   1,459,391    1,455,728    1,442,973 
DBi Services, Senior Secured Term B Loan (Second Lien), 9.00% (Libor + 9.00%), maturity 2/2/26   1,379,149    1,379,149    1,379,149 
WCG, Senior Secured Term Loan, 5.00% (Libor + 4.00%), maturity 1/8/27(i)   995,000    985,758    1,000,060 
Diversified, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 12/23/23   982,575    977,610    980,119 
Franklin Energy, Senior Secured Term B Loan (First Lien), 4.24% (Libor + 4.00%), maturity 8/14/26   987,500    985,288    970,219 
eResearch (ERT), Senior Secured Initial Term Loan (First Lien), 5.50% (Libor + 4.50%), maturity 2/4/27(i)   498,747    498,747    498,231 
Worley Claims Services, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 6/3/26   493,734    490,417    493,734 
Therma Holdings, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/16/27(i)   419,355    415,161    419,355 
                
Chemicals, Plastics & Rubber               
Plaskolite, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 12/15/25(i)   3,920,000    3,865,981    3,919,776 
Transcendia, Senior Secured 2017 Refinancing Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 5/30/24   3,392,624    3,382,274    3,316,290 
DuBois Chemicals, Senior Secured Term Loan (Second Lien), 8.74% (Libor + 8.50%), maturity 9/30/27   3,000,000    2,969,107    2,977,500 
Vertellus, Senior Secured Term Loan Facility, 7.00% (Libor + 6.00%), maturity 12/21/27(i)   3,000,000    2,925,000    2,925,000 
Universal Fiber Systems, Senior Secured Initial Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 10/4/21   2,731,078    2,728,788    2,642,318 
Spectrum Plastics, Senior Secured Closing Date Term Loan (First Lien), 4.25% (Libor + 3.25%), maturity 1/31/25(i)   2,654,925    2,662,649    2,533,273 
Unifrax, Senior Secured USD Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 12/12/25(i)   2,451,228    2,431,275    2,272,229 
Boyd Corp, Senior Secured Initial Loan (Second Lien), 6.99% (Libor + 6.75%), maturity 9/6/26   2,000,000    2,001,952    1,980,000 
Q Holding, Senior Secured Term B Loan (2019), 6.00% (Libor + 5.00%), maturity 12/31/23   1,975,000    1,967,237    1,925,625 
Zep, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 8/12/24(i)   1,936,212    1,934,630    1,904,232 
DuBois Chemicals, Senior Secured Term Loan B (First Lien), 4.74% (Libor + 4.50%), maturity 9/30/26   1,795,385    1,757,677    1,781,919 
Prince Minerals, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 3/31/25   972,500    969,266    962,775 
Vantage Specialty Chemicals, Senior Secured Closing Date Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 10/28/24(i)   977,330    963,591    933,996 
Spartech, Senior Secured Term Loan, 5.50% (Libor + 4.50%), maturity 10/17/25   823,333    812,351    823,333 
Polytek, Senior Secured Term Loan, 6.00% (Libor + 5.00%), maturity 9/20/24(i)   500,000    495,000    495,000 
Boyd Corp, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 9/6/25(i)   497,455    464,093    485,309 
Vertellus, Senior Secured Revolving Facility, 7.00% (Libor + 6.00%), maturity 12/22/25(i)   -    (12,156)   - 

 

The accompanying notes are an integral part of these financial statements.

 

12

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of December 31, 2020

(Expressed in U.S. Dollars)

  

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
Aerospace & Defense               
CPI International, Senior Secured Second Amendment Incremental Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 7/26/24  $5,275,326   $5,226,445   $5,248,949 
StandardAero, Senior Secured 2020 Term B-1 Loan, 3.74% (Libor + 3.50%), maturity 4/6/26(i)   3,304,620    3,295,719    3,180,284 
Consolidated Precision Products, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 4/30/26   2,000,000    2,008,327    1,945,000 
Whitcraft, Unitranche, 7.00% (Libor + 6.00%), maturity 4/3/23   1,982,452    1,973,233    1,942,803 
StandardAero, Senior Secured 2020 Term B-2 Loan, 3.74% (Libor + 3.50%), maturity 4/6/26(i)   1,776,677    1,771,892    1,709,830 
Tronair, Senior Secured Initial Term Loan (First Lien), 4.99% (Libor + 4.75%), maturity 9/8/23   1,441,086    1,436,497    1,305,624 
Amentum, Senior Secured Tranche 2 Term Loan (First Lien), 5.50% (Libor + 4.75%), maturity 1/29/27(i)   1,000,000    980,364    1,010,710 
Eton, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 5/1/25(i)   993,645    990,088    997,154 
Amentum, Senior Secured Tranche 1 Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 1/29/27(i)   995,000    964,975    995,630 
API Technologies, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 5/9/26   989,950    962,144    978,813 
Eton, Senior Secured Initial Term Loan (Second Lien), 8.24% (Libor + 8.00%), maturity 5/1/26   500,000    495,340    498,750 
Novaria Group, Senior Secured Initial Term Loan, 6.25% (Libor + 5.25%), maturity 1/27/27   481,818    477,197    477,000 
Consolidated Precision Products, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 4/30/25(i)   492,718    490,562    464,492 
                
Banking, Finance, Insurance & Real Estate               
American Beacon Advisors, Senior Secured Tranche C Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 4/30/23   2,500,000    2,506,156    2,500,000 
AmeriLife, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 3/18/27(i)   2,487,768    2,472,789    2,468,652 
Kestra Financial, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 6/3/26   1,975,000    1,959,039    1,970,063 
Integro Insurance Brokers, Senior Secured Initial Term Loan (First Lien), 6.75% (Libor + 5.75%), maturity 10/31/22   1,959,163    1,941,037    1,944,469 
Orion, Senior Secured Initial Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 9/24/27(i)   1,496,250    1,481,250    1,505,340 
Advisor Group, Senior Secured Initial Term B Loan, 5.24% (Libor + 5.00%), maturity 7/31/26(i)   1,485,000    1,473,076    1,478,274 
EPIC Insurance, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 9/6/24   1,455,000    1,453,049    1,447,725 
HighTower, Senior Secured Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 1/31/25   1,254,919    1,234,708    1,245,507 
Mitchell International, Senior Secured Amendment No. 2 New Term Loan Facility (First Lien), 4.75% (Libor + 4.25%), maturity 11/29/24(i)   997,500    945,583    1,001,159 
Aperio, Senior Secured Initial Commitment, 5.24% (Libor + 5.00%), maturity 10/25/24   933,889    930,413    933,889 
Sedgwick Claims, Senior Secured Initial Term Loan, 3.49% (Libor + 3.25%), maturity 12/31/25(i)   494,949    494,373    489,808 
                
Services: Consumer               
A Place For Mom, Senior Secured Term Loan, 4.75% (Libor + 3.75%), maturity 8/10/24   2,638,868    2,638,424    2,586,091 
Cambium Learning, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 12/18/25(i)   2,449,960    2,356,145    2,449,996 
Weld North, Senior Secured Term Loan B (First Lien), 4.75% (Libor + 4.00%), maturity 12/21/27(i)   2,444,868    2,444,868    2,438,756 
Mister Car Wash, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 5/14/26(i)   2,069,000    2,064,997    2,032,545 
LegalShield, Senior Secured Initial Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 5/1/25(i)   1,927,000    1,916,403    1,916,690 
Ned Stevens, Senior Secured Term A Loan, 6.75% (Libor + 5.75%), maturity 9/30/25(j)   1,501,961    1,480,069    1,486,941 
Smart Start, Senior Secured Initial Term Loan, 5.75% (Libor + 4.75%), maturity 8/19/27   997,500    987,865    995,006 
Spring Education, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 7/30/25(i)   977,500    975,779    932,975 
LegalShield, Senior Secured New Term Loan (First Lien), 4.75% (Libor + 4.00%), maturity 5/1/25   498,750    491,474    495,009 
StubHub, Senior Secured USD Term B Loan, 3.74% (Libor + 3.50%), maturity 2/12/27   495,000    492,695    475,200 
Ned Stevens, Senior Secured Revolver, 5.75% (Libor + 4.75%), maturity 9/30/25(j)   -    (2,614)   - 
                
Automotive               
Mavis, Senior Secured Closing Date Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 3/20/25(i)   3,829,530    3,817,514    3,788,854 
Highline, Senior Secured Initial Term Loan (First Lien), 5.25% (Libor + 4.50%), maturity 11/9/27   2,863,636    2,786,320    2,849,318 
Les Schwab Tire, Senior Secured Initial Term Loan, 4.25% (Libor + 3.50%), maturity 11/2/27   2,000,000    1,990,162    1,985,000 
Truck Hero, Senior Secured Initial Term Loan (Second Lien), 9.25% (Libor + 8.25%), maturity 4/21/25(i)   1,800,000    1,798,743    1,800,000 
Safe Fleet, Senior Secured Tranche B-1 Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 2/3/25   975,849    955,515    961,212 
Safe Fleet, Senior Secured Initial Term Loan (Second Lien), 7.75% (Libor + 6.75%), maturity 2/2/26   500,000    489,628    492,500 
IXS, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 3/5/27(i)   302,710    300,050    302,710 
                
Containers, Packaging & Glass               
ProAmpac, Senior Secured 2020-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/3/25   2,977,335    2,977,335    2,955,005 
Anchor Packaging, Senior Secured Initial Term Loan (First Lien), 4.24% (Libor + 4.00%), maturity 7/18/26(i)   2,909,213    2,895,839    2,880,121 
Potters Industries, Senior Secured Initial Term Loan, 4.75% (Libor + 4.00%), maturity 12/14/27(i)   1,500,000    1,485,273    1,498,125 
Pregis Corporation, Senior Secured Initial Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 7/31/26   990,000    987,979    990,000 
Tank Holding, Senior Secured 2020 Refinancing Term Loan (First Lien), 3.49% (Libor + 3.25%), maturity 3/26/26(i)   987,500    984,017    972,735 
Pregis Corporation, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.00% (Libor + 4.25%), maturity 7/31/26(i)   500,000    497,546    497,500 
Berlin Packaging, Senior Secured Initial Term Loan (First Lien), 3.00% (Libor + 3.00%), maturity 11/7/25(i)   494,924    474,388    490,252 
TricorBraun, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 11/30/23(i)   482,347    482,347    481,141 
Alpha Packaging, Senior Secured Tranche B-1 Term Loan, 7.00% (Libor + 6.00%), maturity 11/12/21   480,087    479,657    478,887 
                
Capital Equipment               
MW Industries, Senior Secured 2018 New Term Loan (First Lien), 3.99% (Libor + 3.75%), maturity 9/30/24(i)   2,037,185    2,037,185    1,951,145 
BAS, Senior Secured Repricing Term Loan, 4.75% (Libor + 3.75%), maturity 5/21/24   1,949,363    1,951,659    1,944,490 
Excelitas, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 12/1/25   1,500,000    1,479,256    1,496,250 
Edward Don, Senior Secured Initial Term Loan, 5.25% (Libor + 4.25%), maturity 7/2/25   1,463,794    1,459,176    1,378,894 
Cole-Parmer, Senior Secured Closing Date Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 11/4/26   992,500    988,663    987,538 
TriMark, Senior Secured Initial Term Loan (First Lien), 3.74% (Libor + 3.50%), maturity 8/28/24   983,612    889,075    600,003 
Restaurant Technologies, Senior Secured Initial Loan (Second Lien), 6.74% (Libor + 6.50%), maturity 10/1/26   500,000    503,507    496,250 
Duravant, Senior Secured Incremental Amendment No. 2 Term Loan (First Lien), 5.25% (Libor + 4.25%), maturity 7/19/24   494,949    494,949    493,712 
Excelitas, Senior Secured Initial USD Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/2/24   488,665    491,752    486,222 

 

13

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of December 31, 2020

(Expressed in U.S. Dollars)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
BANK LOANS: NON-CONTROL/NON-AFFILIATE INVESTMENTS(h) (Continued):               
                
Construction & Building               
PlayPower, Senior Secured Initial Term Loan, 5.74% (Libor + 5.50%), maturity 5/8/26  $1,858,806   $1,858,806   $1,826,277 
Tangent, Senior Secured Closing Date Term Loan (First Lien), 4.99% (Libor + 4.75%), maturity 11/30/24   1,811,195    1,799,386    1,802,139 
PlayCore, Senior Secured Initial Term Loan (Second Lien), 8.75% (Libor + 7.75%), maturity 9/29/25   1,500,000    1,469,821    1,488,750 
DiversiTech Corporation, Senior Secured Tranche B-1 Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 6/3/24(i)   1,459,711    1,450,295    1,456,062 
PlayCore, Senior Secured Initial Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 9/30/24   966,918    965,369    959,666 
CHI Overhead Doors, Senior Secured Third Amendment Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 7/31/25   621,975    618,961    621,975 
Hoffman Southwest, Senior Secured Initial Term Loan, 6.00% (Libor + 5.00%), maturity 8/14/23   517,526    515,491    513,645 
DiversiTech Corporation, Senior Secured Initial Term Loan (Second Lien), 8.50% (Libor + 7.50%), maturity 6/2/25   500,000    489,906    498,750 
Acuren, Senior Secured Initial Term Loan, 4.49% (Libor + 4.25%), maturity 1/23/27(i)   496,250    493,945    496,809 
                
Transportation: Cargo               
Odyssey Logistics & Technology , Senior Secured New Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 10/12/24(i)   3,608,953    3,605,359    3,551,633 
Transplace, Senior Secured Closing Date Term Loan (First Lien), 4.75% (Libor + 3.75%), maturity 10/7/24(i)   2,441,354    2,436,251    2,437,864 
Capstone Logistics, Senior Secured Closing Date Term Loan (First Lien), 5.75% (Libor + 4.75%), maturity 11/12/27   2,000,000    1,978,572    1,985,000 
                
Wholesale               
Carlisle FoodService, Senior Secured Initial Term Loan (First Lien), 4.00% (Libor + 3.00%), maturity 3/20/25   3,895,820    3,896,287    3,866,602 
PetroChoice, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 8/19/22   1,895,184    1,881,515    1,847,805 
ABB Optical, Senior Secured Initial Term Loan (First Lien), 6.00% (Libor + 5.00%), maturity 6/15/23   1,439,868    1,439,074    1,407,471 
                
Consumer Goods: Non-durable               
Augusta Sportswear Group, Senior Secured Initial Term Loan, 5.50% (Libor + 4.50%), maturity 10/26/23(i)   2,202,584    2,191,908    2,040,686 
Badger Sportswear, Senior Secured Initial Term Loan (First Lien), 6.25% (Libor + 5.00%), maturity 9/11/23   1,906,766    1,898,262    1,885,315 
Varsity Brands, Senior Secured Initial Term Loan (First Lien), 4.50% (Libor + 3.50%), maturity 12/16/24(i)   977,352    982,680    942,014 
                
Forest Products & Paper               
Hoffmaster Group, Senior Secured Tranche B-1 Term Loan (First Lien), 5.00% (Libor + 4.00%), maturity 11/21/23(i)   2,418,968    2,411,531    2,162,916 
Loparex, Senior Secured Initial Term Loan (First Lien), 4.74% (Libor + 4.50%), maturity 7/31/26(i)   1,481,250    1,468,881    1,470,141 
Hoffmaster Group, Senior Secured Initial Term Loan (Second Lien), 10.50% (Libor + 9.50%), maturity 11/21/24   1,250,000    1,250,000    1,209,375 
                
Beverage, Food & Tobacco               
Sovos Brands, Senior Secured Initial Term Loan (2018), 4.99% (Libor + 4.75%), maturity 11/20/25   2,458,728    2,442,754    2,458,728 
Kettle Cuisine, Senior Secured Initial Term Loan (First Lien) , 4.75% (Libor + 3.75%), maturity 8/25/25   1,955,000    1,948,780    1,935,450 
                
Media: Advertising, Printing & Publishing               
Ansira, Unitranche, 7.50% (Libor + 6.50%), maturity 12/20/24   2,014,998    2,005,963    1,611,999 
Northstar, Senior Secured Term Loan, 6.75% (Libor + 6.25%), maturity 6/7/24   1,394,653    1,394,653    1,349,327 
Vestcom International, Senior Secured L/C Collaterilized, 5.00% (Libor + 4.00%), maturity 12/19/23   779,751    781,907    773,903 
                
Consumer Goods: Durable               
Strategic Partners, Senior Secured Initial Term Loan, 4.75% (Libor + 3.75%), maturity 6/30/23(i)   2,285,922    2,283,635    2,285,922 
                
Retail               
Grocery Outlet, Senior Secured 2020 Term Loan (First Lien), 2.99% (Libor + 2.75%), maturity 10/22/25(i)   1,269,483    1,267,698    1,270,891 
                
Metals & Mining               
Dynatect, Senior Secured Term B Loan, 5.50% (Libor + 4.50%), maturity 9/30/22   987,897    987,367    968,139 
                
Hotel, Gaming & Leisure               
Auto Europe, Senior Secured Initial Dollar Term Loan, 6.00% (Libor + 5.00%), maturity 10/21/23   1,119,231    1,112,979    895,385 
                
Health Care Equipment & Services               
MyEyeDr, Senior Secured Initial Term Loan (First Lien), 4.49% (Libor + 4.25%), maturity 8/31/26(i)   532,087    527,684    526,939 
                
Total Bank Loans       $357,702,705   $354,395,516 

 

14

 

Audax Credit BDC Inc.

Schedule of Investments (Continued)

As of December 31, 2020

(Expressed in U.S. Dollars)

 

Portfolio Investments (a) (b) (c) (d) (e) (f)  Par   Cost   Value 
EQUITY AND PREFERRED SHARES:  NON-CONTROL/NON-AFFILIATE INVESTMENTS- (0.3%)(g)(h):               
                
Services: Business               
DBi Services, Class A-1 Preferred Units (800.53 units)(k)       $800,535   $576,385 
DBi Services, Class B Common Shares (169,362.31 shares)(l)(m)        -    - 
               
Chemicals, Plastics & Rubber               
Vertellus, Series A Units (1,651 Series A units, Fair value of $165,138)(i)(m)(r)        165,138    165,138 
               
Healthcare & Pharmaceuticals               
Alpaca, Class A Units (33,300.04 Class A Units, Fair value of $3,679)(j)(m)(o)(p)        60,976    3,679 
                
Services: Consumer               
Ned Stevens, Class B Common Units (261,438 Common B units, Fair value of $2,191)(j)(m)(n)(o)        261,438    219,125 
               
 Total Equity and Preferred Shares       $1,288,087   $964,327 
               
Total Portfolio Investments(s)       $358,990,792   $355,359,843 

 

(a) All companies are located in the United States of America, unless otherwise noted.
(b) Interest rate percentages represent actual interest rates which are indexed from then 30-day London Interbank Offered Rate ("LIBOR") unless otherwise noted. LIBOR rates are subject to interest rate floors which can vary based on the contractual agreement with the borrower.  Due dates represent the contractual maturity date.
(c) All loans are income-producing, unless otherwise noted.
(d) All investments are qualifying assets under Section 55(a) of the Investment Company Act of 1940, as amended (the "1940 Act") unless otherwise noted.
(e) All investments are exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. 
(f) Unless indicated otherwise, all of our investments are valued using Level 3 inputs within the FASB Accounting Standard Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) fair value hierarchy. Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional information.   
(g) Percentages are calculated using fair value of investments over net assets.
(h) As defined in 1940 Act, the Company is not deemed to be an “Affiliated Person” of or “Control” this portfolio company because it neither owns 5% or more of the portfolio company’s outstanding voting securities nor has the power to exercise control over the management or policies of such portfolio company (including through a management agreement).
(i) Investment was valued using Level 2 inputs within the ASC 820 fair value hierarchy.  Refer to Note 3 – Investments in the accompanying Notes to Financial Statements for additional  information. 
(j) Three of our affiliated funds, Audax Direct Lending Solutions Fund - A, L.P., Audax Direct Lending Solutions Fund - C, L.P., and Audax Direct Lending Solutions Fund - D, L.P., 'co-invested with us in this portfolio company pursuant to an exemptive order granted by the U.S. Securities and Exchange Commission. 
(k) Represents an investment owned by APD Dbi Preferred, Inc., a holding company for the investment in DBi.
(l) Represents an investment owned by APD Dbi Common, Inc., a holding company for the investment in DBi.
(m) Investment is non-income producing.
(n) Represents an investment in APD NS Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(o) Other net assets of $0 at the aggregator levels are included in the fair value of the investments when using the net asset value as a practical expedient.
(p) Represents an investment in APD ALP Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(q) The borrower for Sophos, Surf Holdings S.a.r.l., is located in United Kingdom.
(r) Represents an investment in ADP VERT Equity, L.P., a holding company, made through an affiliated equity aggregator vehicle.
(s) At December 31, 2020, the cost of investments for income tax purposes was $358,990,792 the gross unrealized depreciation for federal tax purposes was $5,143,320, the gross unrealized appreciation for federal income tax purposes was $1,512,371, and the net unrealized depreciation was $3,630,949.

 

15

 

Audax Credit BDC Inc.

Notes to Financial Statements

March 31, 2021

(unaudited)

 

Note 1. Organization

 

Audax Credit BDC Inc. (the “Company”) is a Delaware corporation that was formed on January 29, 2015. The Company is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). In addition, effective with the Company’s taxable year ended December 31, 2015, the Company has elected to be treated for federal income tax purposes, and intends to comply with the requirements to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the “Code”).

 

The Company commenced business operations on July 8, 2015, the date on which the Company made its first investment. The Company was formed for the purpose of investing primarily in the debt of leveraged, non-investment grade middle market companies, with the principal objective of generating income and capital appreciation. The Company’s investment strategy is to invest primarily in first lien senior secured loans and selectively in second lien loans to middle market companies. During the period prior to July 8, 2015, the Company was a development stage company, as defined in Paragraph 915-10-05, Development Stage Entity, of the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standards Codification, as amended (“ASC”). During this time, the Company was devoting substantially all of its efforts to establishing its business and its planned principal operations had not commenced. All losses incurred during the period prior to July 8, 2015 have been considered a part of the Company’s development stage activities.

 

Audax Management Company (NY), LLC (the “Adviser”) is the investment adviser of the Company. The Adviser is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended.

 

Note 2. Significant Accounting Policies

 

Basis of Presentation

 

As an investment company, the accompanying financial statements of the Company are prepared in accordance with the investment company accounting and reporting guidance of ASC Topic 946, “Financial Services – Investment Companies,” as amended (“ASC Topic 946”), which incorporates the requirements for reporting on Form 10-Q and Articles 6 and 10 of Regulation S-X, as well as generally accepted accounting principles in the United States of America (“GAAP”).

 

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 condensed or omitted herein. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management of the Company, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair presentation of financial statements for the interim period included herein. The current period’s results of operations are not necessarily indicative of the operating results to be expected for future periods. The accounting records of the Company are maintained in U.S. dollars.

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that may affect the reported amounts and disclosures in the financial statements. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ, and these differences could be material.

 

16

 

Cash and Cash Equivalents

Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments purchased with maturities of three months or less and money market mutual funds to be cash equivalents. No cash equivalent balances were held at March 31, 2021 and December 31, 2020. At such dates, cash was not subject to any restrictions on withdrawal.

 

Expenses

The Company is responsible for investment expenses, legal expenses, auditing fees and other expenses related to the Company’s operations. Such fees and expenses, including expenses initially incurred by the Adviser, may be reimbursed by the Company.

 

Investment Valuation Policy

The Company conducts the valuation of the Company’s investments, pursuant to which the Company’s net asset value is determined, at all times consistent with GAAP and the 1940 Act. The Company’s Board of Directors (the “Board of Directors”), with the assistance of the Company’s Audit Committee (the “Audit Committee”), determines the fair value of the Company’s investments, for investments with a public market and for investments with no readily available public market, on at least a quarterly basis, in accordance with the terms of ASC Topic 820, “Fair Value Measurement,” (“ASC 820”). The Company’s valuation procedures are set forth in more detail below.

 

ASC 820 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same – to estimate the price when an orderly transaction to sell the asset or transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

 

ASC 820 establishes a hierarchal disclosure framework which ranks the observability of inputs used in measuring financial instruments at fair value. The observability of inputs is impacted by a number of factors, including the type of financial instruments and their specific characteristics. Financial instruments with readily available quoted prices, or for which fair value can be measured from quoted prices in active markets, generally will have a higher degree of market price observability and a lesser degree of judgment applied in determining fair value.

 

The three-level hierarchy for fair value measurement is defined as follows:

 

Level 1 —  Inputs to the valuation methodology are quoted prices available in active markets for identical financial instruments as of the measurement date. The types of financial instruments in this category include unrestricted securities, including equities and derivatives, listed in active markets. The Company does not adjust the quoted price for these instruments, even in situations where the Company holds a large position, and a sale could reasonably be expected to impact the quoted price.

 

Level 2 —  Inputs to the valuation methodology are quoted prices in markets that are not active or for which all significant inputs are either directly or indirectly observable as of the measurement date. The types of financial instruments in this category include less liquid and restricted securities listed in active markets, securities traded in markets that are not active, government and agency securities, and certain over-the-counter derivatives where the fair value is based on observable inputs.

 

17

 

Level 3 —  Inputs to the valuation methodology are unobservable and significant to the overall fair value measurement, and include situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of financial instruments in this category include investments in privately held entities, non-investment grade residual interests in securitizations, collateralized loan obligations, and certain over-the-counter derivatives where the fair value is based on unobservable inputs.

 

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given financial instrument is based on the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

 

Pursuant to the framework set forth above, the Company values securities traded in active markets on the measurement date by multiplying the exchange closing price of such traded securities/instruments by the quantity of shares or amount of the instrument held. The Company may also obtain quotes with respect to certain of its investments from pricing services, brokers or dealers’ quotes, or counterparty marks in order to value liquid assets that are not traded in active markets.

 

Pricing services aggregate, evaluate and report pricing from a variety of sources including observed trades of identical or similar securities, broker or dealer quotes, model-based valuations and internal fundamental analysis and research. When doing so, the Company determines whether the quote obtained is sufficient in accordance with GAAP to determine the fair value of the security. If determined adequate, the Company uses the quote obtained.

 

Securities that are illiquid or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Board of Directors, does not represent fair value, are each valued as of the measurement date using all techniques appropriate under the circumstances and for which sufficient data are available. These valuation techniques vary by investment but include comparable public market valuations, comparable precedent transaction valuations and discounted cash flow analyses. Inputs for these valuation techniques include relative credit information, observed market movement, industry sector information, and other market data, which may include benchmarking of comparable securities, issuer spreads, reported trades, and reference data, such as market research publications, when available. The process used to determine the applicable value is as follows:

 

(i) Each portfolio company or investment is initially valued by the investment professionals of the Adviser responsible for the portfolio investment using a standardized template designed to approximate fair market value based on observable market inputs and updated credit statistics and unobservable inputs. Additionally, as a part of the Company’s valuation process, the Adviser may employ the services of one or more independent valuation firms engaged by the Company;

 

(ii) Preliminary valuation conclusions are documented and discussed with the Company’s senior management and members of the Adviser’s valuation team;

 

(iii) The Audit Committee reviews the assessments of the Adviser or independent valuation firm (to the extent applicable) and provides the Board of Directors with recommendations with respect to the fair value of the investments in the Company’s portfolio; and

 

(iv) The Board of Directors discusses the valuation recommendations of the Audit Committee and determines the fair value of the investments in the Company’s portfolio in good faith based on the input of the Adviser, the independent valuation firm (to the extent applicable) and in accordance with the Company’s valuation policy.

 

18

 

The Audit Committee’s recommendation of fair value is generally based on its assessment of the following factors, as relevant:

 

·the nature and realizable value of any collateral;

 

·call features, put features and other relevant terms of debt;

 

·the portfolio company’s ability to make payments;

 

·the portfolio company’s actual and expected earnings and discounted cash flow;

 

·prevailing interest rates for like securities and expected volatility in future interest rates;

 

·the markets in which the portfolio company does business and recent economic and/or market events; and

 

·comparisons to publicly traded securities.

 

Investment performance data utilized are the most recently available as of the measurement date, which in many cases may reflect up to a one quarter lag in information.

 

Securities for which market quotations are not readily available or for which a pricing source is not sufficient may include the following:

 

·private placements and restricted securities that do not have an active trading market;

 

·securities whose trading has been suspended or for which market quotes are no longer available;

 

·debt securities that have recently gone into default and for which there is no current market;

 

·securities whose prices are stale; and

 

·securities affected by significant events.

 

The Board of Directors is responsible for the determination, in good faith, of the fair value of the Company’s portfolio investments.

 

Determination of fair value involves subjective judgments and estimates. Accordingly, these notes to the

 

Company’s financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on the Company’s financial statements.

 

Security transactions are recorded on the trade date (the date the order to buy or sell is executed or, in the case of privately issued securities, the closing date, which is when all terms of the transactions have been defined).

 

Realized gains and losses on investments are determined based on the identified cost method.

 

In addition, on December 3, 2020, the SEC announced that it adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards can satisfy their valuation obligations in light of recent market developments. The rule will permit boards, subject to board oversight and certain other conditions, to designate certain parties to perform the fair value determinations. The Company will continue to review the new rule and its impact on the Company and its valuation policies.

 

Refer to Note 3 — Investments for additional information regarding fair value measurements and the Company’s application of ASC 820.

 

19

 

Interest Income Recognition

Interest income, adjusted for amortization of premium, acquisition costs, and amendment fees and the accretion of original issue discount (“OID”), are recorded on an accrual basis to the extent that such amounts are expected to be collected. Generally, when a loan becomes 120 days or more past due, or if the Company’s qualitative assessment indicates that the debtor is unable to service its debt or other obligations, the Company will place the loan on non-accrual status and cease recognizing interest income on that loan for financial reporting purposes until the borrower has demonstrated the ability and intent to pay contractual amounts due. However, the Company will remain contractually entitled to this interest. Interest payments received on non-accrual loans are restored to accrual status when past due principal and interest are paid and, in management’s judgment, are likely to remain current or, due to a restructuring, the interest income is deemed to be collectible. As of March 31, 2021, the Company had one investment on non-accrual which represented 0.27% and 0.16% of its total portfolio at cost and fair market value, respectively. As of December 31, 2020, the Company had one investment on non-accrual which represented 0.28% and 0.17% of its total portfolio at cost and fair market value, respectively.

 

The Company currently holds loans in the portfolio that contain OID and that contain payment-in-kind (“PIK”) provisions. The Company recognizes OID for loans originally issued at a discount and recognizes the income over the life of the obligation based on an effective yield calculation. PIK interest, computed at the contractual rate specified in a loan agreement, is added to the principal balance of a loan and recorded as income over the life of the obligation. Therefore, the actual collection of PIK income may be deferred until the time of debt principal repayment. To maintain the ability to be taxed as a RIC, the Company may need to pay out of both OID and PIK non-cash income amounts in the form of distributions, even though the Company has not yet collected the cash on either.

 

As of March 31, 2021, the Company held 204 investments in loans with OID. The Company accrued OID income of $118,551 for the three months ended March 31, 2021. The unamortized balance of OID on debt investments as of March 31, 2021 totaled $2,356,925. As of December 31, 2020, the Company held 197 investments in loans with OID. The Company accrued OID income of $93,473 for the three months ended March 31, 2020. The unamortized balance of OID investments as of December 31, 2020, totaled $2,299,058.

 

As of March 31, 2021, the Company held three investments which had a PIK interest component. The Company recorded $40,499 in PIK interest income for the three months ended March 31, 2021. As of March 31, 2020, the Company held one investment which had a PIK interest component. The Company did not record any PIK interest income for the three months ended March 31, 2020.

 

As of March 31, 2021 and December 31, 2020, the Company held $13,622,836 and $4,289,122 in cash and cash equivalents, respectively. For the three months ended March 31, 2021 and 2020, the Company earned $274 and $28,670, respectively, of interest income related to cash, which is included in other interest income within the accompanying statement of operations.

 

Other Income Recognition

The Company generally records prepayment fees and amendment fees upon receipt of cash or as soon as the Company becomes aware of the prepayment or amendment.

 

Dividend income on equity investments is accrued to the extent that such amounts are expected to be collected and if the Company has the option to collect such amounts in cash.

 

Prepayment fees, amendment fees and dividend income are accrued in other income in the accompanying statements of operations.

 

For the three months ended March 31, 2021 and 2020, the Company accrued $47,514 and $14,740 of other income, respectively, related to amendment fees.

 

20

 

New Accounting Pronouncements

In March 2020, FASB issued Accounting Standards Update No. 2020-04 (“ASU 2020-04”), “Reference Rate Reform (Topic 848)”. In response to concerns about structural risks of interbank offered rates, and particularly the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the guidance.

 

Note 3. Investments

 

Fair Value

 

In accordance with ASC 820, the fair value of the Company’s investments is determined to be the price that would be received for an investment in a current sale, assuming an orderly transaction between willing market participants on the measurement date. This fair value definition focuses on exit price in the principal, or most advantageous, market and prioritizes, within a measurement of fair value, the use of market-based inputs over entity-specific inputs. ASC 820 also establishes the three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of a financial instrument as of the measurement date as described in Note–2 – Significant Accounting Policies.

 

As of March 31, 2021, $174,269,967 of the Company’s investments were valued using unobservable inputs, and $192,990,277 were valued using observable inputs. During the three months ended March 31, 2021, $23,375,318 transferred into Level 3 due to a decrease in observable prices in the market and $46,631,514 transferred out of Level 3 due to the liquidity in the market and transparency of inputs.

 

As of December 31, 2020, $199,000,205 of the Company’s investments were valued using unobservable inputs, and $156,359,638 were valued using observable inputs. During the three months ended March 31, 2020, $65,946,077 transferred into Level 3 due to a decrease in observable prices in the marker and $20,650,498 transferred out of Level 3 due to the liquidity in the market and transparency of inputs.

 

The following table presents the Company’s investments carried at fair value as of March 31, 2021 and December 31, 2020, by caption on the Company’s accompanying statements of assets and liabilities and by security type.

 

   Assets at Fair Value as of March 31, 2021 
   Level 1   Level 2   Level 3   Total 
First lien debt   $-   $188,787,196   $149,128,548   $337,915,744 
Second lien debt   -    4,203,081    24,199,595    28,402,676 
Equity and Preferred Shares   -    -    941,824    941,824 
Total  $-   $192,990,277   $174,269,967   $367,260,244 

 

   Assets at Fair Value as of December 31, 2020 
   Level 1   Level 2   Level 3   Total 
First lien debt   $-   $153,794,500   $170,910,171   $324,704,671 
Second lien debt   -    2,400,000    27,290,845    29,690,845 
Equity and Preferred Shares   -    165,138    799,189    964,327 
Total  $-   $156,359,638   $199,000,205   $355,359,843 

 

21

 

In accordance with ASC 820, the following table provides quantitative information about the Level 3 fair value measurements of the Company’s investments as of March 31, 2021. The weighted average calculations in the table below are based on the fair value balances for all debt related calculations for the particular input.

 

                  As of March 31, 2021   
    Fair     Valuation   Unobservable         Weighted  
    Value     Technique   Inputs (1)   Range (2)       Average (3)  
First lien debt   $ 140,830,722     Matrix Pricing    Senior Leverage     1.54x - 10.28x       5.04x  
                Total Leverage     1.54x - 14.73x       6.03x  
                Interest Coverage     0.46x - 7.30x       2.52x  
                Debt Service Coverage     0.42x - 6.81x       2.07x  
                TEV Coverage     1.17x - 6.71x       2.53x  
                Liquidity     22.10% - 593.81%       173.10%  
                Spread Comparison     300bps - 700bps       458bps  
                               
      8,297,826     Market Analysis    Senior Leverage     (9.14)x - 18.16x       9.04x  
                Total Leverage     (9.14)x - 20.33x       10.39x  
                Interest Coverage     (1.75)x - 1.67x       0.59x  
                Debt Service Coverage     (2.71)x - 1.51x       0.36x  
                TEV Coverage     (0.77)x - 1.35x       0.80x  
                Liquidity     26.19% - 222.79%       96.10%  
                Spread Comparison     350bps - 650bps       493bps  
                               
Second lien debt     22,820,446     Matrix Pricing    Senior Leverage     4.40x - 11.73x       6.54x  
                Total Leverage     4.40x - 11.73x       6.54x  
                Interest Coverage     0.94x - 3.10x       2.10x  
                Debt Service Coverage     0.79x - 2.75x       1.77x  
                TEV Coverage     0.70x - 3.12x       1.94x  
                Liquidity     100.00% - 298.07%       150.05%  
                Spread Comparison     650bps - 950bps       767bps  
                               
Total   $ 171,948,994                        

(1)For any portfolio company, the unobservable input "Liquidity" is a fraction, expressed as a percentage, the numerator of which is the sum of the company's undrawn revolving credit facility capacity plus cash, and the denominator of which is the total amount that may be borrowed under the company's revolving credit facility.  The unobservable input "Spread Comparison" is a comparison of the spread over LIBOR for each investment to the spread over LIBOR for general leveraged loan transactions.
(2)Each range represents the variance of outputs from calculating each statistic for each portfolio company within a specific credit seniority.  The range may be a single data point when there is only one company represented in a specific credit seniority.
(3)Inputs are weighted based on the fair value of the investments included in the range.

 

The table above does not include $2,320,973 of debt, equity and preferred shares which management values using other unobservable inputs, such as earnings before interest, taxes, depreciation and amortization (“EBITDA”) and EBITDA multiples, as well as other qualitative information, including company specific information.

 

In accordance with ASC 820, the following table provides quantitative information about the Level 3 fair value measurements of the Company’s investments as of December 31, 2020. The weighted average calculations in the table below are based on the fair value balances for all debt related calculations for the particular input.

 

22

 

                  As of December 31, 2020   
    Fair     Valuation   Unobservable         Weighted  
    Value     Technique   Inputs (1)   Range (2)       Average (3)  
First lien debt   $ 165,118,266     Matrix Pricing    Senior Leverage     1.92x - 28.58x       5.22x  
                Total Leverage     1.92x - 32.80x       6.31x  
                Interest Coverage     0.46x - 5.97x       2.38x  
                Debt Service Coverage     0.42x - 5.75x       1.98x  
                TEV Coverage     0.58x - 7.42x       2.44x  
                Liquidity     34.64% - 675.62%       173.68%  
                Spread Comparison     275bps - 700bps       442bps  
                               
Second lien debt     25,911,696     Matrix Pricing    Senior Leverage     4.40x - 11.03x       6.29x  
                Total Leverage     4.40x - 11.03x       6.29x  
                Interest Coverage     0.88x - 3.10x       2.15x  
                Debt Service Coverage     0.77x - 2.75x       1.82x  
                TEV Coverage     0.74x - 3.10x       1.98x  
                Liquidity     100.90% - 326.75%       162.79%  
                Spread Comparison     650bps - 950bps       761bps  
                               
Total   $ 191,029,962                        

(1)For any portfolio company, the unobservable input "Liquidity" is a fraction, expressed as a percentage, the numerator of which is the sum of the company's undrawn revolving credit facility capacity plus cash, and the denominator of which is the total amount that may be borrowed under the company's revolving credit facility. The unobservable input "Spread Comparison" is a comparison of the spread over LIBOR for each investment to the spread over LIBOR for general leveraged loan transactions.
(2)Each range represents the variance of outputs from calculating each statistic for each portfolio company within a specific credit seniority.  The range may be a single data point when there is only one company represented in a specific credit seniority.
(3)Inputs are weighted based on the fair value of the investments included in the range.

 

The table above does not include $7,970,243 of debt, equity and preferred shares which management values using other unobservable inputs, such as EBITDA and EBITDA multiples, as well as other qualitative information, including company specific information.

 

Fair value measurements can be sensitive to changes in one or more of the valuation inputs. Changes in market yields, discounts rate, leverage, EBITDA or EBITDA multiples (or revenue or revenue multiples), each in isolation, may change the fair value of certain of the Company’s investments. Generally, an increase or decrease in market yields, discount rates or leverage or an increase/decrease in EBITDA or EBITDA multiples (or revenue or revenue multiples) may result in a corresponding decrease or increase, respectively, in the fair value of certain of the Company’s investments.

 

The following tables provide the changes in fair value, broken out by security type, during the three months ended March 31, 2021 and 2020 for all investments for which the Company determines fair value using unobservable (Level 3) factors.

 

23

 

Three Months Ended March 31, 2021  First lien debt   Second lien debt   Equity and
Preferred
Shares
   Total 
Fair Value as of December 31, 2020  $170,910,171   $27,290,845   $799,189   $199,000,205 
Transfers into Level 3   23,210,180    -    165,138    23,375,318 
Transfers out of Level 3   (43,035,264)   (3,596,250)   -    (46,631,514)
Total gains:                    
Net realized gain(a)   52,639    123    -    52,762 
Net unrealized appreciation (depreciation)(b)   217,423    29,877    (42,039)   205,261 
New investments, repayments and settlements:(c)                    
Purchases   4,460,138    1,470,000    19,536    5,949,674 
Settlements/repayments   (6,783,665)   (1,000,000)   -    (7,783,665)
Net amortization of premiums, PIK, discounts and fees   96,926    5,000    -    101,926 
Sales   -    -    -    - 
Fair Value as of March 31, 2021  $149,128,548   $24,199,595   $941,824   $174,269,967 

(a)Included in net realized gain on the accompanying Statement of Operations for the three months ended March 31, 2021.
(b)Included in net change in unrealized appreciation on the accompanying Statement of Operations for the three months ended March 31, 2021.
(c)Includes increases in the cost basis of investments resulting from portfolio investments, the amortization of discounts, and PIK, as well as decreases in the costs basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.

 

Three Months Ended March 31, 2020  First lien debt   Second lien debt   Equity and
Preferred
Shares
   Total 
Fair Value as of December 31, 2019  $227,392,535   $21,340,798   $719,257   $249,452,590 
Transfers into Level 3   65,946,077    -    -    65,946,077 
Transfers out of Level 3   (11,659,069)   (8,991,429)   -    (20,650,498)
Total gains:                    
Net realized (loss) gain(a)   (53,247)   -    -    (53,247)
Net unrealized (depreciation) appreciation(b)   (13,839,089)   (1,220,061)   (29,931)   (15,089,081)
New investments, repayments and settlements:(c)                    
Purchases   11,440,787    6,708,438    -    18,149,225 
Settlements/repayments   (9,624,849)   -    -    (9,624,849)
Net amortization of premiums, PIK, discounts and fees   85,455    4,351    -    89,806 
Sales   (5,743,556)   -    -    (5,743,556)
Fair Value as of March 31, 2020  $263,945,044   $17,842,097   $689,326   $282,476,467 

  (a) Included in net realized gain on the accompanying Statement of Operations for the three months ended March 31, 2020.
  (b) Included in net change in unrealized depreciation on the accompanying Statement of Operations for the three months ended March 31, 2020.
     
  (c) Includes increases in the cost basis of investments resulting from portfolio investments, the amortization of discounts, and PIK, as well as decreases in the costs basis of investments resulting from principal repayments or sales, the amortization of premiums and acquisition costs and other cost-basis adjustments.
     

 

The change in unrealized value attributable to investments still held at March 31, 2021 and 2020 was $200,397 and $(1,046,694), respectively.

 

Investment Activities

 

The Company held a total of 223 investments with an aggregate fair value of $367,260,244 as of March 31, 2021. During the three months ended March 31, 2021, the Company invested in 24 new investments for a combined $24,915,797 and in existing investments for a combined $6,842,697. The Company also received $16,092,791 in repayments from investments and $5,113,536 from investments sold during the three months ended March 31, 2021.

 

24

 

  

The Company held a total of 216 investments with an aggregate fair value of $355,359,843 as of December 31, 2020. During the three months ended March 31, 2020, the Company invested in 28 new investments for a combined $25,224,701 and in existing investments for a combined $9,103,107. The Company also received $18,146,113 in repayments from investments and $5,743,556 from investments sold during the three months ended March 31, 2020.

 

Investment Concentrations

 

As of March 31, 2021, the Company’s investment portfolio consisted of investments in 192 companies located in 35 states across 22 different industries, with an aggregate fair value of $367,260,244. The five largest investments at fair value as of March 31, 2021 totaled $21,451,816, or 5.84%, of the Company’s total investment portfolio as of such date. As of March 31, 2021, the Company’s average investment was $1,658,140 at cost.

 

As of December 31, 2020, the Company’s investment portfolio consisted of investments in 186 companies located in 35 states across 22 different industries, with an aggregate fair value of $355,359,843. The five largest investments at fair value as of December 31, 2020 totaled $21,474,504, or 6.04%, of the Company’s total investment portfolio as of such date. As of December 31, 2020, the Company’s average investment was $1,661,994 at cost.

 

The following table outlines the Company’s investments by security type as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020
       Percentage       Percentage       Percentage       Percentage 
       of Total       of Total       of Total       of Total 
   Cost   Investment   Fair Value   Investment   Cost   Investment   Fair Value   Investment 
First lien debt  $339,611,741    91.85%  $337,915,744    92.01%  $327,535,610    91.24%  $324,704,671    91.37%
Second lien debt   28,845,915    7.80%   28,402,676    7.73%   30,167,095    8.40%   29,690,845    8.36%
Total Debt Investments   368,457,656    99.65%   366,318,420    99.74%   357,702,705    99.64%   354,395,516    99.73%
Equity and Preferred Shares   1,307,623    0.35%   941,824    0.26%   1,288,087    0.36%   964,327    0.27%
Total Equity Investments   1,307,623    0.35%   941,824    0.26%   1,288,087    0.36%   964,327    0.27%
Total Investments  $369,765,279    100.00%  $367,260,244    100.00%  $358,990,792    100.00%  $355,359,843    100.00%

 

25

 

Investments at fair value consisted of the following industry classifications as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020 
Industry  Fair Value   Percentage of
Total Investments
   Fair Value   Percentage of
Total Investments
 
Healthcare & Pharmaceuticals  $82,282,844    22.40%  $76,049,509    21.40%
High Tech Industries   60,987,386    16.61    61,586,355    17.33 
Services: Business   52,275,300    14.23    50,490,828    14.21 
Chemicals, Plastics & Rubber   32,084,285    8.74    31,878,575    8.97 
Aerospace & Defense   21,759,624    5.92    20,755,039    5.84 
Services: Consumer   15,857,723    4.32    15,809,209    4.45 
Banking, Finance, Insurance & Real Estate   15,847,840    4.32    16,984,886    4.78 
Containers, Packaging & Glass   13,796,506    3.76    11,243,766    3.16 
Automotive   12,455,187    3.39    12,179,594    3.43 
Capital Equipment   11,355,987    3.09    9,834,504    2.77 
Construction & Building   9,657,061    2.63    9,664,073