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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 001-39958
TRINITY CAPITAL INC.
(Exact name of registrant as specified in its charter)
Maryland
35-2670395
(State or other jurisdiction of incorporation ororganization)
(IRS Employer Identification No.)
1 N. 1st StreetSuite 302Phoenix, Arizona
85004
(Address of principal executive offices)
(Zip Code)
(480) 374‑5350
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
TRIN
Nasdaq Global Select Market
7.00% Notes Due 2025
TRINL
7.875% Notes Due 2029
TRINZ
Securities registered pursuant to Section 12(g) 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 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 (§232.405 of this chapter) 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 12b‑2 of the Exchange Act:
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes ☐ No ☒
As of April 30, 2024, the registrant had 49,478,520 shares of common stock ($0.001 par value per share) outstanding.
FORM 10‑Q FOR THE QUARTER ENDED MARCH 31, 2024
TABLE OF CONTENTS
PAGE NO.
PART I
FINANCIAL INFORMATION
3
Item 1.
Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities as of March 31, 2024 (unaudited) and December 31, 2023
Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (unaudited)
4
Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2024 and 2023 (unaudited)
5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (unaudited)
6
Consolidated Schedule of Investments as of March 31, 2024 (unaudited)
8
Consolidated Schedule of Investments as of December 31, 2023
33
Notes to Consolidated Financial Statements (unaudited)
58
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
93
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
109
Item 4.
Controls and Procedures
111
PART II
OTHER INFORMATION
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
112
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
SIGNATURES
113
PART I: FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities
(In thousands, except share and per share data)
March 31,
December 31,
2024
2023
(Unaudited)
ASSETS
Investments at fair value:
Control investments (cost of $43,972 and $43,807, respectively)
$
34,989
32,861
Affiliate investments (cost of $13,421 and $11,006, respectively)
14,004
11,335
Non-Control / Non-Affiliate investments (cost of $1,362,605 and $1,264,503, respectively)
1,314,869
1,230,984
Total investments (cost of $1,419,998 and $1,319,316, respectively)
1,363,862
1,275,180
Cash and cash equivalents
11,967
4,761
Interest receivable
13,312
11,206
Deferred credit facility costs
1,955
2,144
Other assets
18,596
17,691
Total assets
1,409,692
1,310,982
LIABILITIES
KeyBank Credit Facility
190,000
213,000
2025 Notes, net of $1,531 and $2,015, respectively, of unamortized deferred financing costs
180,969
180,485
August 2026 Notes, net of $1,382 and $1,526, respectively, of unamortized deferred financing costs
123,618
123,474
March 2029 Notes, net of $3,191 and $0, respectively, of unamortized deferred financing costs
111,809
—
December 2026 Notes, net of $1,008 and $1,102, respectively, of unamortized deferred financing costs
73,992
73,898
Convertible Notes, net of $1,084 and $1,243, respectively, of unamortized deferred financing costs and discount
48,916
48,757
Distribution payable
24,808
23,162
Security deposits
11,114
12,287
Accounts payable, accrued expenses and other liabilities
18,150
24,760
Total liabilities
783,376
699,823
Commitments and contingencies (Note 6)
NET ASSETS
Common stock, $0.001 par value per share (200,000,000 authorized, 48,643,194 and 46,323,712 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)
49
46
Paid-in capital in excess of par
659,194
633,740
Distributable earnings/(accumulated deficit)
(32,927
)
(22,627
Total net assets
626,316
611,159
Total liabilities and net assets
NET ASSET VALUE PER SHARE
12.88
13.19
See accompanying notes to unaudited consolidated financial statements.
Consolidated Statements of Operations
Three Months Ended
March 31, 2024
March 31, 2023
INVESTMENT INCOME:
Interest and dividend income:
Control investments
852
1,116
Affiliate investments
385
34
Non-Control / Non-Affiliate investments
48,155
39,381
Total interest and dividend income
49,392
40,531
Fee and other income:
866
453
195
554
Total fee and other income
1,061
1,007
Total investment income
50,453
41,538
EXPENSES:
Interest expense and other debt financing costs
12,144
11,081
Compensation and benefits
9,864
7,617
Professional fees
720
1,417
General and administrative
1,929
1,495
Total expenses
24,657
21,610
NET INVESTMENT INCOME/(LOSS) BEFORE TAXES
25,796
19,928
Excise tax expense
639
597
NET INVESTMENT INCOME
25,157
19,331
NET REALIZED GAIN/(LOSS) FROM INVESTMENTS:
1,351
(365
Net realized gain/(loss) from investments
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) FROM INVESTMENTS:
1,963
408
254
976
(14,217
2,136
Net change in unrealized appreciation/(depreciation) from investments
(12,000
3,520
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
14,508
22,486
NET INVESTMENT INCOME PER SHARE - BASIC
0.54
0.55
NET INVESTMENT INCOME PER SHARE - DILUTED
0.52
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - BASIC
0.31
0.64
NET CHANGE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE - DILUTED
0.30
0.60
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC
46,748,386
35,074,076
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED
50,595,651
38,740,871
Consolidated Statements of Changes in Net Assets
Three Months Ended March 31, 2024:
Distributable
Paid In Capital
Earnings /
Common Stock
in Excess of
(Accumulated
Total
Shares
Par Value
Loss)
Net Assets
Balance as of December 31, 2023
46,323,712
Issuance of common stock pursuant to distribution reinvestment plan
23,456
340
Stock-based compensation
2,459
Issuance of restricted stock awards
753,051
1
(1
Issuance of common stock, net of issuance costs
1,652,632
2
24,238
24,240
Retired and forfeited shares of restricted stock
(109,657
(1,582
Stock repurchase and cancellation of shares
Distributions to stockholders
(24,808
Net increase/(decrease) in net assets resulting from operations
Balance as of March 31, 2024
48,643,194
Three Months Ended March 31, 2023:
Balance as of December 31, 2022
34,960,672
35
480,532
(20,918
459,649
54,185
663
1,765
783,100
302,980
4,048
(83,482
(1,053
(91,691
(1,003
(16,885
Balance as of March 31, 2023
35,925,764
36
484,951
(15,317
469,670
Consolidated Statements of Cash Flows
(In thousands)
Cash flows provided by/(used in) operating activities:
Adjustments to reconcile net increase/(decrease) in net assets resulting from operation to net cash provided by/(used in) operating activities:
Purchase of investments, net of deferred fees
(240,700
(70,080
Proceeds from sales and paydowns of investments
148,541
82,795
Net change in unrealized appreciation/(depreciation) from investments, net of third party participation
12,000
(3,520
(1,351
365
Accretion of original issue discounts and end of term payments on investments
(7,172
(6,684
Amortization of deferred financing costs
1,075
1,070
Change in operating assets and liabilities
(Increase)/Decrease in interest receivable
(2,106
(500
(Increase)/Decrease in other assets
(872
(1,354
Increase/(Decrease) in security deposits
(1,173
177
Increase/(Decrease) in accounts payable, accrued expenses and other liabilities
(6,610
(5,774
Net cash provided by/(used in) operating activities
(81,401
20,746
Cash flows provided by/(used in) investing activities:
Disposal/(Acquisition) of fixed assets
(33
(343
Net cash provided by/(used in) investing activities
Cash flows provided by/(used in) financing activities
Stock repurchase and cancellation of shares, net of costs
Retirement of employee shares
Cash distributions paid
(22,821
(20,663
Issuance of debt, net of issuance costs
111,803
Borrowings under Credit Facilities
148,000
54,000
Repayments under Credit Facilities
(171,000
(58,000
Net cash provided by/(used in) financing activities
88,640
(22,671
Net increase/(decrease) in cash, cash equivalents and restricted cash
7,206
(2,268
Cash, cash equivalents and restricted cash at beginning of period
10,612
Cash, cash equivalents and restricted cash at end of period
8,344
Supplemental and non-cash investing and financing activities:
Cash paid for interest
10,338
9,580
Non-cash settlement of investments
21
Accrued but unpaid distributions
16,885
Distributions reinvested
Income tax, including excise tax, paid
2,524
2,304
7
Consolidated Schedule of Investments
Portfolio Company (1)
Type of Investment (2)
Investment Date (3)
Maturity Date
Interest Rate (4)
Principal Amount (5)
Cost
Fair Value (6)
Debt Securities- United States
Artificial Intelligence & Automation
Ambient Photonics, Inc.
Secured Loan⁽¹⁴⁾
July 28, 2022
July 1, 2025
Variable interest rate Prime + 6.0% or Floor rate 9.5%; EOT 4.0% ⁽⁸⁾
2,006
2,145
2,160
November 17, 2022
May 1, 2025
2,210
2,352
2,234
December 20, 2022
June 1, 2025
375
396
379
Total Ambient Photonics, Inc.
4,591
4,893
4,773
Applied Digital Corporation
Equipment Financing⁽¹⁴⁾
March 13, 2024
October 1, 2025
Variable interest rate 0 + 0.0% or Floor rate 0.0%; EOT 0.0% -
12,467
12,465
March 25, 2024
March 1, 2026
Fixed interest rate 19.0%; EOT 0.0%
21,287
21,286
Total Applied Digital Corporation
33,754
33,751
Rigetti & Co, Inc.
Secured Loan
March 10, 2021
April 1, 2025
Variable interest rate Prime + 7.5% or Floor rate 11.0%; EOT 2.8% ⁽⁸⁾
5,768
6,048
6,041
May 18, 2021
4,387
4,561
4,552
November 10, 2021
December 1, 2025
5,182
5,298
5,277
January 27, 2022
February 1, 2026
4,004
4,100
4,085
Total Rigetti & Co, Inc.
19,341
20,007
19,955
Stratifyd, Inc.
September 3, 2021
July 1, 2026
Variable interest rate Prime + 7.8% or Floor rate 11.0%; EOT 6.8% ⁽⁸⁾
4,457
4,631
3,714
Sub-total: Artificial Intelligence & Automation (4.4%)*
62,143
63,282
62,193
Biotechnology
Greenlight Biosciences Inc.
June 17, 2021
July 1, 2024
Fixed interest rate 15.3%; EOT 8.0%
279
476
563
August 31, 2021
September 1, 2024
Fixed interest rate 22.6%; EOT 8.0%
180
251
321
Fixed interest rate 19.3%; EOT 8.0%
104
145
185
Total Greenlight Biosciences Inc.
872
1,069
Pendulum Therapeutics, Inc.
December 31, 2021
Variable interest rate Prime + 6.8% or Floor rate 10.0%; EOT 3.0% ⁽⁸⁾
4,292
4,448
4,400
February 28, 2022
4,581
4,737
4,695
March 30, 2022
4,722
4,878
4,839
May 6, 2022
5,000
5,156
5,122
June 17, 2022
February 1, 2024
Variable interest rate Prime + 6.8% or Floor rate 10.0%; EOT 4.0% ⁽⁸⁾
1,405
775
Total Pendulum Therapeutics, Inc.
25,000
25,150
24,953
Taysha Gene Therapies, Inc.
Secured Loan(9)
November 13, 2023
December 1, 2028
Variable interest rate Prime + 4.5% or Floor rate 12.8%; EOT 5.0% ⁽⁸⁾
30,000
29,858
30,585
Sub-total: Biotechnology (4.0%)*
55,563
55,880
56,607
Debt Securities- United States, Continued
Connectivity
Vertical Communications, Inc.(20)
August 23, 2021
November 1, 2026
Variable interest rate Prime + 4.0% or Floor rate 11.0%; EOT 23.8% ⁽⁸⁾
12,600
15,322
viaPhoton, Inc.
March 31, 2022
April 1, 2027
Variable interest rate Prime + 6.6% or Floor rate 9.9%; EOT 5.0%
15,000
15,384
14,391
Sub-total: Connectivity (2.1%)*
27,600
30,706
29,713
Consumer Products & Services
Eterneva, Inc.
November 24, 2021
Fixed interest rate 10.6%; EOT 11.5%
259
312
309
Equipment Financing
March 16, 2022
April 1, 2026
Fixed interest rate 10.4%; EOT 11.5%
416
480
473
Fixed interest rate 16.2%; EOT 11.5%
1,206
1,349
1,311
Total Eterneva, Inc.
1,881
2,141
2,093
Happiest Baby, Inc.
January 22, 2021
May 1, 2024
Fixed interest rate 8.4%; EOT 9.5%
29
125
153
Molekule, Inc.
Equipment Financing(14)(18)
June 19, 2020
December 31, 2024
Fixed interest rate 8.8%; EOT 10.0%
595
400
September 29, 2020
Fixed interest rate 12.3%; EOT 10.0%
273
347
350
December 18, 2020
Fixed interest rate 11.9%; EOT 10.0%
584
607
August 25, 2021
Fixed interest rate 11.3%; EOT 10.0%
454
495
Total Molekule, Inc.
1,443
1,980
1,852
Ogee, Inc.
February 14, 2023
March 1, 2027
Variable interest rate Prime + 5.8% or Floor rate 12.0%; EOT 3.8% ⁽⁸⁾
4,996
4,989
September 29, 2023
4,948
5,028
Total Ogee, Inc.
10,000
9,944
10,017
Portofino Labs, Inc.
April 1, 2021
November 1, 2025
Variable interest rate Prime + 8.3% or Floor rate 11.5%; EOT 4.0% ⁽⁸⁾
1,488
1,567
1,551
Quip NYC, Inc.
March 9, 2021
Variable interest rate Prime + 8.0% or Floor rate 11.3%; EOT 3.0% ⁽⁸⁾
12,153
12,503
12,586
February 10, 2022
1,736
1,792
1,808
Total Quip NYC, Inc.
13,889
14,295
14,394
Rinse, Inc.
May 10, 2022
June 1, 2027
Variable interest rate Prime + 8.0% or Floor rate 11.3%; EOT 3.8% ⁽⁸⁾
4,730
4,780
4,838
September 22, 2023
October 1, 2028
4,000
3,944
4,041
Total Rinse, Inc.
8,730
8,724
8,879
SI Tickets, Inc.
May 11, 2022
September 1, 2026
Variable interest rate Prime + 8.3% or Floor rate 11.5%; EOT 3.0% ⁽⁸⁾
2,598
2,624
2,486
UnTuckIt, Inc.
January 16, 2020
Fixed interest rate 12.0%; EOT 3.8%
6,908
7,663
7,488
VitaCup, Inc.
June 23, 2021
January 1, 2026
Variable interest rate Prime + 7.5% or Floor rate 11.5%; EOT 5.0% ⁽⁸⁾
6,000
5,871
5,597
Whoop, Inc.
May 17, 2023
June 1, 2028
Variable interest rate Prime + 5.3% or Floor rate 13.0%; EOT 2.5% ⁽⁸⁾
23,625
23,194
23,303
March 1, 2024
April 1, 2029
10,125
9,422
Total Whoop, Inc.
33,750
32,616
32,725
Sub-total: Consumer Products & Services (6.2%)*
86,716
87,550
87,235
9
Diagnostics & Tools
Metabolon, Inc.
March 28, 2024
Variable interest rate Prime + 4.5% or Floor rate 11.9%; EOT 4.8% ⁽⁸⁾
42,500
41,437
Sub-total: Diagnostics & Tools (2.9%)*
Digital Assets Technology and Services
Cleanspark, Inc.(10)
April 22, 2022
Fixed interest rate 10.3%; EOT 5.0%
7,891
8,748
8,578
Sub-total: Digital Assets Technology and Services (0.6%)*
Education Technology
Edblox, Inc.
March 19, 2024
Variable interest rate Prime + 4.5% or Floor rate 11.8%; EOT 2.5% ⁽⁸⁾
24,506
Medical Sales Training Holding Company
March 18, 2021
Variable interest rate Prime + 8.8% or Floor rate 12.0%; EOT 6.3% ⁽⁸⁾
5,175
5,505
5,196
July 21, 2021
August 1, 2025
1,825
1,933
1,800
Total Medical Sales Training Holding Company
7,000
7,438
6,996
Yellowbrick Learning, Inc.
February 1, 2021
Fixed interest rate 2.0%; EOT 5.0%
7,500
7,875
5,911
August 10, 2021
2,500
2,625
1,973
Total Yellowbrick Learning, Inc.
10,500
7,884
Sub-total: Education Technology (2.8%)*
42,000
42,444
39,386
10
Finance and Insurance
Bestow, Inc.
April 25, 2022
May 1, 2027
Variable interest rate Prime + 6.5% or Floor rate 10.0%; EOT 1.5% ⁽⁸⁾
25,156
25,062
May 12, 2022
15,088
15,125
Total Bestow, Inc.
40,000
40,244
40,187
Cherry Technologies, Inc.
March 29, 2024
Variable interest rate PRIME + 4.5% or Floor rate 12.0%+PIK Fixed Interest Rate 1.0%; EOT 2.0%(8)(15)
20,000
19,803
Empower Financial, Inc.
October 13, 2023
May 1, 2028
Variable interest rate Prime + 4.8% or Floor rate 11.5%; EOT 3.8% ⁽⁸⁾
11,741
12,152
January 5, 2024
3,000
2,849
February 8, 2024
4,500
4,268
Total Empower Financial, Inc.
19,500
18,858
19,269
Eqis Capital Management, Inc.
June 15, 2022
Variable interest rate Prime + 7.5% or Floor rate 10.8%; EOT 3.0% ⁽⁸⁾
6,809
7,019
6,879
Kafene, Inc.
February 1, 2029
Variable interest rate Prime + 4.0% or Floor rate 12.0%; EOT 1.0% ⁽⁸⁾
12,500
12,340
Openly Holdings Corp.
November 18, 2022
December 1, 2027
Variable interest rate Prime + 6.3% or Floor rate 10.5%; EOT 2.8% ⁽⁸⁾
3,125
3,147
3,160
January 31, 2023
6,250
6,284
6,365
June 22, 2023
15,625
15,672
16,111
Total Openly Holdings Corp.
25,103
25,636
Parafin SPV 2, LLC(10)
Secured Loan(12)(14)
February 22, 2024
December 21, 2026
Variable interest rate SOFR 30 Day Forward + 10.8% or Floor rate 12.8%; EOT 0.0% ⁽⁸⁾
8,042
7,768
Petal Card, Inc.
Variable interest rate Prime + 7.5% or Floor rate 11.0%+PIK Interest Rate 1.0%; EOT 11.0% (8)(15)
10,804
10,064
9,089
August 6, 2021
7,563
7,045
6,362
July 27, 2023
August 1, 2026
Variable interest rate Prime + 7.5% or Floor rate 11.75%+PIK Interest Rate 4.25%; EOT 0.0%(8)(15)
21,939
18,706
16,750
Total Petal Card, Inc.
40,306
35,815
32,201
Slope Tech, Inc.(10)
October 5, 2022
March 14, 2025
Variable interest rate SOFR 30 Day Forward + 11.8% or Floor rate 11.8%; EOT 0.0% ⁽⁸⁾
3,433
3,298
3,482
ZenDrive, Inc.
July 16, 2021
Variable interest rate Prime + 7.0% or Floor rate 10.3%; EOT 3.0% ⁽⁸⁾
12,599
12,879
Sub-total: Finance and Insurance (12.8%)*
188,189
183,127
180,877
11
Food and Agriculture Technologies
Athletic Brewing Company, LLC
December 7, 2021
Fixed interest rate 11.1%; EOT 7.0%
19,866
20,611
20,040
Fixed interest rate 11.2%; EOT 7.0%
4,962
5,134
5,002
Equipment Financing(9)
December 15, 2023
January 1, 2028
Fixed interest rate 11.2%; EOT 8.0%
5,675
5,721
6,019
Total Athletic Brewing Company, LLC
30,503
31,466
31,061
Bowery Farming, Inc.
Secured Loan(14)(18)
September 10, 2021
September 10, 2026
Variable interest rate SOFR 30 Day Forward + 10.0% or Floor rate 1.0%(8)(15)
8,660
7,947
3,810
Daring Foods, Inc.
April 8, 2021
Fixed interest rate 9.6%; EOT 7.5%
16
53
69
Fixed interest rate 10.0%; EOT 7.5%
95
140
138
November 1, 2021
December 1, 2024
Fixed interest rate 9.4%; EOT 7.5%
262
337
333
March 8, 2022
Fixed interest rate 9.5%; EOT 7.5%
831
979
961
April 29, 2022
Fixed interest rate 10.2%; EOT 7.5%
395
458
450
July 6, 2022
Fixed interest rate 10.9%; EOT 7.5%
218
245
241
August 25, 2022
September 1, 2025
Fixed interest rate 12.1%; EOT 7.5%
543
603
596
Total Daring Foods, Inc.
2,360
2,815
2,788
DrinkPak, LLC
February 17, 2023
Fixed interest rate 12.9%; EOT 7.0%
11,422
11,942
11,941
Emergy, Inc.
January 8, 2021
Fixed interest rate 6.8%; EOT 8.5%
84
66
December 15, 2021
Fixed interest rate 9.2%; EOT 11.5%
4,671
5,658
4,795
December 13, 2022
Fixed interest rate 12.6%; EOT 11.5%
7,716
8,269
7,377
Total Emergy, Inc.
12,421
14,011
12,238
Intelligent Brands, Inc. (f.k.a. Sun Basket, Inc.)
December 31, 2020
June 30, 2024
Variable interest rate Prime + 9.5% or Floor rate 11.8%; EOT 5.8% ⁽⁸⁾
9,412
10,495
10,808
The Fynder Group, Inc.
October 14, 2020
Fixed interest rate 9.1%; EOT 10.0%
19
81
80
Fixed interest rate 9.3%; EOT 10.0%
1,387
1,586
1,455
Total The Fynder Group, Inc.
1,406
1,667
1,535
Sub-total: Food and Agriculture Technologies (5.3%)*
76,184
80,343
74,181
12
Green Technology
Bolb, Inc.
October 12, 2021
November 1, 2024
Fixed interest rate 10.3%; EOT 6.0%
374
475
466
Commonwealth Fusion Systems, LLC
October 1, 2024
Fixed interest rate 9.5%; EOT 8.5%
437
631
621
October 20, 2021
Fixed interest rate 9.7%; EOT 8.5%
147
203
199
Equipment Financing(9)(14)
June 16, 2023
July 1, 2030
Fixed interest rate 13.0%; EOT 10.0%
5,052
5,107
5,323
Total Commonwealth Fusion Systems, LLC
5,636
5,941
6,143
Crusoe Energy Systems LLC
March 1, 2029
Fixed interest rate 12.7%; EOT 0.0%
14,000
13,862
Dandelion Energy, Inc.
October 27, 2020
Fixed interest rate 9.2%; EOT 12.5%
164
158
November 19, 2020
Fixed interest rate 9.1%; EOT 12.5%
132
216
208
December 29, 2020
January 1, 2025
Fixed interest rate 10.8%; EOT 12.5%
144
223
219
March 25, 2021
420
594
566
December 1, 2021
Fixed interest rate 8.8%; EOT 12.5%
652
789
743
April 8, 2022
May 1, 2026
Fixed interest rate 10.4%; EOT 12.5%
1,076
1,237
1,196
May 27, 2022
June 1, 2026
590
677
June 13, 2022
Fixed interest rate 9.9%; EOT 12.5%
982
934
August 24, 2022
Fixed interest rate 11.1%; EOT 12.5%
359
384
November 10, 2022
December 1, 2026
Fixed interest rate 11.6%; EOT 12.5%
338
370
361
April 12, 2023
Fixed interest rate 12.1%; EOT 12.5%
784
828
817
June 29, 2023
July 1, 2027
Fixed interest rate 12.7%; EOT 12.5%
653
682
676
Total Dandelion Energy, Inc.
6,109
7,162
6,901
Electric Hydrogen Co.
September 12, 2022
Fixed interest rate 9.0%; EOT 10.0%
1,234
1,370
1,348
December 22, 2023
January 1, 2029
Fixed interest rate 12.5%; EOT 15.0%
5,741
5,800
5,968
Total Electric Hydrogen Co.
6,975
7,170
7,316
Hi-Power, LLC
September 30, 2021
Fixed interest rate 12.4%; EOT 1.0%
2,295
2,357
2,372
September 30, 2022
Fixed interest rate 14.7%; EOT 1.0%
2,637
2,650
2,670
Total Hi-Power, LLC
4,932
5,007
5,042
SeaOn Global, LLC
June 16, 2022
Fixed interest rate 9.3%; EOT 11.0%
4,579
4,368
August 17, 2022
2,097
2,316
2,227
Total SeaOn Global, LLC
6,182
6,895
6,595
Edeniq, Inc.(20)
November 30, 2021
Fixed interest rate 11.0%; EOT 5.7%
2,406
2,022
2,591
Footprint International Holding, Inc.
February 18, 2022
Variable interest rate Prime + 7.3% or Floor rate 10.5%; EOT 3.5% ⁽⁸⁾
19,283
19,600
April 20, 2022
19,225
19,538
Total Footprint International Holding, Inc.
38,508
39,138
Mainspring Energy, Inc.
March 18, 2022
October 1, 2026
Fixed interest rate 11.0%; EOT 3.8%
26,399
26,989
26,315
RTS Holding, Inc.
January 1, 2027
Variable interest rate Prime + 7.3% or Floor rate 10.5%+PIK Interest Rate 4.3%; EOT 3.0% (15)
13,800
14,988
15,052
October 21, 2022
November 1, 2027
Variable interest rate Prime + 7.25% or Floor rate 13.5%; EOT 3.0%
7,200
7,222
7,251
January 19, 2024
Variable interest rate Prime + 4.3% or Floor rate 12.5%; EOT 3.0% ⁽⁸⁾
5,578
Total RTS Holding, Inc.
27,000
27,788
27,881
Sub-total: Green Technology (10.1%)*
140,013
141,819
142,250
13
Healthcare Technology
Emerald Cloud Lab, Inc.
July 13, 2021
August 1, 2024
Fixed interest rate 9.7%; EOT 7.0%
1,331
2,066
2,035
Dentologie Enterprises, Inc.
October 14, 2022
October 1, 2027
Variable interest rate Prime + 6.9% or Floor rate 10.9%; EOT 3.0% ⁽⁸⁾
3,018
3,023
4,200
4,129
4,326
7,147
7,349
Lark Technologies, Inc.
September 30, 2020
Variable interest rate Prime + 8.3% or Floor rate 11.5% or ceiling rate of 13.5%; EOT 4.0%(8)
2,037
2,208
2,174
June 30, 2021
3,291
3,403
3,322
July 7, 2023
4,965
5,045
Total Lark Technologies, Inc.
10,328
10,576
10,541
Moxe Health Corporation
December 29, 2023
Variable interest rate Prime + 5.5% or Floor rate 13.0%; EOT 3.8% ⁽⁸⁾
12,364
12,189
RXAnte, Inc.
November 21, 2022
Variable interest rate Prime + 4.48% or Floor rate 9.98%+PIK Fixed Interest Rate 1.5%; EOT 3.5% (15)
9,167
9,207
9,177
April 14, 2023
3,040
3,010
3,114
October 19, 2023
3,017
2,973
3,051
Total RXAnte, Inc.
15,224
15,190
15,342
TMRW Life Sciences, Inc.
Variable interest rate Prime + 5.0% or Floor rate 8.8%; EOT 4.0% ⁽⁸⁾
5,087
4,832
March 3, 2023
15,148
15,215
December 8, 2023
9,982
10,032
Total TMRW Life Sciences, Inc.
30,217
30,079
WorkWell Prevention & Care Inc.
Secured Loan(14)
December 31, 2022
Variable interest rate Prime + 5.0% or Floor rate 6.0%; EOT 0.0% ⁽⁸⁾
500
Sub-total: Healthcare Technology (5.5%)*
77,083
78,060
78,035
14
Human Resource Technology
Nomad Health, Inc.
March 29, 2022
Variable interest rate Prime + 5.5% or Floor rate 9.3%; EOT 4.0% ⁽⁸⁾
30,612
30,294
Sub-total: Human Resource Technology (2.1%)*
Industrials
3DEO, Inc.
February 23, 2022
March 1, 2025
Fixed interest rate 9.1%; EOT 9.0%
1,335
1,645
1,515
April 12, 2022
Fixed interest rate 9.0%; EOT 9.0%
851
Total 3DEO, Inc.
2,055
2,496
Formlogic Corporation
December 28, 2023
Fixed interest rate 12.1%; EOT 1.5%
4,603
4,590
4,680
Sub-total: Industrials (0.5%)*
6,658
7,086
6,984
Marketing, Media, and Entertainment
Drone Racing League, Inc.
October 17, 2022
April 17, 2027
Variable interest rate Prime + 7.5% or Floor rate 11.0%; EOT 2.5%(8)(15)
10,067
10,025
8,911
Grabit Interactive Media, Inc.
Variable interest rate Prime + 7.5% or Floor rate 10.8%; EOT 2.5% ⁽⁸⁾
4,099
4,146
4,120
Incontext Solutions, Inc.
Fixed interest rate 11.8%; EOT 11.4%
2,659
3,809
3,276
PebblePost, Inc.
May 7, 2021
Variable interest rate Prime + 8.8% or Floor rate 11.5%; EOT 3.8% ⁽⁸⁾
10,559
10,891
10,867
Vox Media Holdings, Inc.
October 18, 2022
Variable interest rate Prime + 6.3% or Floor rate 11.8%; EOT 2.5% ⁽⁸⁾
12,022
12,275
December 29, 2022
5,997
6,120
Total Vox Media Holdings, Inc.
18,000
18,019
18,395
Sub-total: Marketing, Media, and Entertainment (3.2%)*
45,384
46,890
45,569
15
Medical Devices
Convergent Dental, Inc.
April 21, 2023
Variable interest rate Prime + 5.8% or Floor rate 13.5%; EOT 4.0% ⁽⁸⁾
11,803
11,964
February 29, 2024
Variable interest rate Prime + 5.8% or Floor rate 13.5%; EOT 5.5% ⁽⁸⁾
5,843
Total Convergent Dental, Inc.
17,646
17,807
Neurolens, Inc.
Variable interest rate Prime + 3.0% or Floor rate 11.0%; EOT 3.0% ⁽⁸⁾
19,883
20,475
Neuros Medical, Inc.
August 10, 2023
September 1, 2027
Variable interest rate Prime + 6.0% or Floor rate 14.3%; EOT 4.0% ⁽⁸⁾
5,939
6,170
Revelle Aesthetics, Inc.
May 30, 2023
May 30, 2028
14,937
15,098
Shoulder Innovations, Inc.
August 7, 2023
September 1, 2028
Variable interest rate Prime + 3.5% or Floor rate 11.5%; EOT 3.0% ⁽⁸⁾
11,250
11,163
11,651
Sub-total: Medical Devices (5.1%)*
70,250
69,568
71,201
Multi-Sector Holdings
Senior Credit Corp 2022 LLC (10)(20)
January 30, 2023
December 5, 2028
Fixed interest rate 8.5%; EOT 0.0%
9,394
Sub-total: Multi-Sector Holdings (0.7%)*
Real Estate Technology
BlueGround US, Inc.
June 6, 2022
Fixed interest rate 9.6%; EOT 8.0%
2,405
2,639
July 26, 2022
Fixed interest rate 11.1%; EOT 8.0%
3,474
3,782
3,788
August 12, 2022
Fixed interest rate 11.6%; EOT 8.0%
2,798
3,027
3,055
September 26, 2022
Fixed interest rate 11.9%; EOT 8.0%
3,454
3,777
October 25, 2022
Fixed interest rate 12.6%; EOT 8.0%
2,922
3,124
3,181
November 30, 2022
Fixed interest rate 12.7%; EOT 8.0%
1,948
2,072
2,131
Total BlueGround US, Inc.
17,001
18,358
18,556
BoardRE, Inc.
October 15, 2021
Variable interest rate Prime + 8.3% or Floor rate 11.5%; EOT 4.5% ⁽⁸⁾
5,232
4,548
Knockaway, Inc.
Variable interest rate Prime + 6.8% or Floor rate 15.3%; EOT 0.0% ⁽⁸⁾
23,644
21,399
20,912
Secured Loan(12)
December 6, 2023
December 6, 2024
Variable interest rate SOFR 30 Day Forward + 10.0% or Floor rate 11.8%; EOT 0.0% ⁽⁸⁾
1,742
Total Knockaway, Inc.
25,386
23,141
22,654
Maxwell Financial Labs, Inc.
Variable interest rate Prime + 6.0% or Floor rate 10.0%; EOT 5.0% ⁽⁸⁾
14,163
14,770
14,328
Orchard Technologies, Inc.
January 1, 2024
Variable interest rate Prime + 8.0% or Floor rate 15.0%; EOT 3.0% ⁽⁸⁾
28,540
28,599
28,380
Sub-total: Real Estate Technology (6.3%)*
90,090
90,100
88,466
Software as a Service ("SaaS")
BackBlaze, Inc.
April 17, 2020
Fixed interest rate 7.3%; EOT 11.5%
204
237
July 27, 2020
Fixed interest rate 7.4%; EOT 11.5%
303
September 4, 2020
Fixed interest rate 7.2%; EOT 11.5%
64
63
March 29, 2021
Fixed interest rate 7.5%; EOT 11.5%
771
1,072
1,040
Total BackBlaze, Inc.
1,649
1,643
Cart.com, Inc.
Secured Loan(9)(14)
November 17, 2023
November 1, 2028
Variable interest rate Prime + 4.0% or Floor rate 12.5%; EOT 0.0% ⁽⁸⁾
17,484
18,249
Cpacket Networks, Inc.
January 29, 2024
Variable interest rate PRIME + 4.8% or Floor rate 13.3%+PIK Fixed Interest Rate 1.3%; EOT 3.0%(8)(15)
27,031
26,611
Sub-total: SaaS (3.3%)*
46,013
45,744
46,503
Space Technology
Astranis Space Technology Corporation
April 13, 2023
Fixed interest rate 12.1%; EOT 5.0%
11,614
11,903
12,310
Axiom Space, Inc.
May 28, 2021
Variable interest rate Prime + 6.0% or Floor rate 9.3%; EOT 2.5% ⁽⁸⁾
22,500
22,999
23,083
Hadrian Automation, Inc.
March 2, 2022
Fixed interest rate 12.6%; EOT 0.0%
243
Fixed interest rate 12.9%; EOT 0.0%
2,597
2,619
July 15, 2022
Fixed interest rate 14.3%; EOT 0.0%
1,917
1,912
1,942
Fixed interest rate 15.2%; EOT 0.0%
3,470
3,464
3,555
December 22, 2022
Fixed interest rate 16.1%; EOT 0.0%
867
858
901
Fixed interest rate 16.4%; EOT 0.0%
813
810
March 29, 2023
2,534
2,525
September 28, 2023
Fixed interest rate 15.7%; EOT 0.0%
1,296
1,290
Total Hadrian Automation, Inc.
13,735
13,691
14,080
Hermeus Corporation
August 9, 2022
Fixed interest rate 9.6%; EOT 6.0%
640
685
October 11, 2022
Fixed interest rate 11.8%; EOT 6.0%
1,187
1,252
1,225
Fixed interest rate 12.6%; EOT 6.0%
1,671
1,700
1,692
October 24, 2023
Fixed interest rate 14.0%; EOT 6.0%
959
949
958
Fixed interest rate 13.7%; EOT 6.0%
1,413
1,382
Total Hermeus Corporation
5,870
5,920
Rocket Lab USA, Inc.(10)
Fixed interest rate 12.6%; EOT 1.0%
52,310
51,421
51,910
Space Perspective, Inc.
March 3, 2022
Variable interest rate Prime + 7.8% or Floor rate 11.0%; EOT 5.0% ⁽⁸⁾
4,087
4,205
4,093
Sub-total: Space Technology (7.9%)*
110,116
110,187
111,396
17
Supply Chain Technology
Macrofab, Inc.
July 21, 2023
August 1, 2027
Variable interest rate Prime + 5.5% or Floor rate 13.3%; EOT 4.0% ⁽⁸⁾
19,818
20,103
Sub-total: Supply Chain Technology (1.4%)*
Transportation Technology
NextCar Holding Company, Inc.
Secured Loan(18)
December 14, 2021
Variable interest rate Prime + 5.8% or Floor rate 9.0%; EOT 5.3%(8)(15)
4,573
4,834
2,462
2,274
2,379
1,224
2,843
2,974
1,530
3,411
3,569
1,836
April 18, 2022
May 17, 2022
5,685
5,948
3,060
June 22, 2022
Total NextCar Holding Company, Inc.
27,315
28,626
14,702
Get Spiffy, Inc.
July 14, 2023
January 14, 2028
Variable interest rate Prime + 4.5% or Floor rate 12.3%; EOT 6.0% ⁽⁸⁾
9,000
8,944
8,842
February 1, 2027
Fixed interest rate 12.1%; EOT 4.0%
367
307
Total Get Spiffy, Inc.
9,379
9,311
9,149
Zuum Transportation, Inc.
December 17, 2021
Variable interest rate Prime + 6.0% or Floor rate 10.8%; EOT 2.5% ⁽⁸⁾
5,070
4,787
Sub-total: Transportation Technology (2.0%)*
41,694
43,007
28,638
Total: Debt Securities- United States (89.3%)*
1,275,481
1,285,802
1,259,040
18
Debt Securities- Canada
Construction Technology
Nexii Building Solutions, Inc. (10)
August 27, 2021
August 27, 2025
Variable interest rate Prime + 7.0% or Floor rate 10.3%; EOT 2.5%(8)(15)
10,641
11,037
3,179
June 8, 2022
June 8, 2026
5,329
5,527
1,592
June 21, 2023
Variable interest rate Prime + 7.0% or Floor rate 10.3%(8)(15)
2,631
768
Total Nexii Building Solutions, Inc.
18,601
19,195
5,539
Sub-total: Construction Technology (0.4%)*
GoFor Industries, Inc. (10)(20)
January 21, 2022
Variable interest rate Prime + 8.8% or Floor rate 12.0%; EOT 2.5% ⁽⁸⁾
9,760
9,575
4,414
May 10, 2024
200
65
Total GoFor Industries, Inc.
9,960
9,775
4,479
Sub-total: Supply Chain Technology (0.3%)*
Total: Debt Securities- Canada (0.7%)*
28,561
28,970
10,018
Debt Securities- Europe
Aledia, Inc. (10)
Fixed interest rate 9.0%; EOT 7.0%
6,583
7,703
7,577
June 30, 2022
527
593
585
August 5, 2022
Fixed interest rate 10.7%; EOT 7.0%
774
855
846
Fixed interest rate 12.0%; EOT 7.0%
1,302
1,424
1,415
Total Aledia, Inc.
9,186
10,575
10,423
Sub-total: Industrials (0.7%)*
All.Space Networks, Limited.(10)
August 22, 2022
Variable interest rate Prime + 7.0% or Floor rate 11.5%; EOT 2.5% ⁽⁸⁾
9,060
9,112
8,910
Sub-total: Space Technology (0.6%)*
Total: Debt Securities- Europe (1.4%)*
18,246
19,687
19,333
Total: Debt Securities (91.4%)(19)*
1,322,288
1,334,459
1,288,391
Type of Investment (2)(14)
Expiration Date
Series
Strike Price
Warrant Investments- United States
Warrant
July 27, 2022
July 27, 2032
159,760
48
Everalbum, Inc.
July 29, 2026
Preferred Series A⁽¹⁷⁾
851,063
0.10
25
32
Hologram, Inc.
January 31, 2020
January 27, 2030
193,054
0.26
240
Presto Automation, Inc.
Warrant(7)
April 28, 2027
402,679
0.37
July 28, 2027
170,993
5.85
28
Total Presto Automation, Inc.
213
September 3, 2031
Preferred Series B-2⁽¹⁷⁾
106,719
2.53
56
Sub-Total: Artificial Intelligence & Automation (0.0%)*
391
October 9, 2029
Preferred Series B⁽¹⁷⁾
55,263
1.90
43
23
June 1, 2020
July 15, 2030
36,842
December 31, 2031
Preferred Series C⁽¹⁷⁾
322,251
3.24
118
87
February 5, 2024
February 5, 2034
1,143,690
1.03
588
666
785
792
Sub-Total: Biotechnology (0.1%)*
Tarana Wireless, Inc.
June 30, 2031
5,027,629
0.19
967
2,017
Vertical Communications, Inc. (20)
Warrant⁽¹¹⁾
July 11, 2026
828,479
1.00
March 31, 2032
15,839
22
Sub-Total: Connectivity (0.1%)*
989
2,018
Project Frog, Inc. (20)
July 26, 2026
Preferred Series AA-1⁽¹⁷⁾
211,649
180,340
August 3, 2021
Preferred Series CC⁽¹⁷⁾
250,000
0.01
20
Total Project Frog, Inc.
38
Sub-total: Construction Technology (0.0%)*
Warrant Investments- United States, Continued
BaubleBar, Inc.
March 29, 2027
531,806
1.96
April 20, 2028
60,000
72
Total BaubleBar, Inc.
711
54
Boosted eCommerce, Inc.
December 14, 2030
Preferred Series A-1⁽¹⁷⁾
759,263
0.84
May 16, 2029
182,554
0.33
193
Madison Reed, Inc.
March 23, 2027
194,553
2.57
July 18, 2028
43,158
0.99
71
107
June 30, 2029
36,585
1.23
86
Total Madison Reed, Inc.
526
February 14, 2033
Preferred Series A-3⁽¹⁷⁾
259,221
0.68
57
42
September 29, 2033
52
December 31, 2030
99,148
1.53
160
123
April 1, 2031
39,912
1.46
99
51
Total Portofino Labs, Inc.
174
March 9, 2031
10,833
48.46
May 10, 2032
278,761
1.13
524
May 11, 2032
53,029
2.52
162
Super73, Inc.
177,305
3.16
105
220
Trendly, Inc.
August 10, 2026
245,506
1.14
222
June 23, 2031
68,996
2.79
November 22, 2023
November 22, 2033
51,225
0.41
Total VitaCup, Inc.
Warrant(9)
May 17, 2033
2,487,590
0.43
1,142
2,001
Sub-Total: Consumer Products & Services (0.3%)*
3,804
3,728
March 28, 2034
Preferred Series 3⁽¹⁷⁾
2,288,462
0.65
644
Sub-total: Diagnostics & Tools (0.0%)*
March 19, 2034
185,765
1.71
255
260
March 18, 2031
130,853
7.74
108
318
September 30, 2028
222,222
0.90
120
Sub-Total: Education Technology (0.0%)*
483
578
DailyPay, Inc.
September 30, 2030
89,264
3.00
151
1,597
Dynamics, Inc.
March 10, 2024
17,000
10.59
October 13, 2033
339,947
1.43
627
June 15, 2032
Preferred Class B⁽¹⁷⁾
904,000
January 5, 2034
44,452
4.03
Parafin, Inc.(10)
February 16, 2024
February 16, 2034
24,623
7.09
November 27, 2029
250,268
1.32
January 11, 2021
January 11, 2031
135,835
August 6, 2031
111,555
1.60
197
June 20, 2023
June 20, 2033
402,434
1,523
378
July 27, 2033
1,760,651
1,653
4,679
2,031
RealtyMogul, Co.
December 18, 2027
954,979
0.95
285
1,626
September 14, 2022
September 14, 2032
90,971
0.88
481
August 30, 2023
August 30, 2033
21,303
Total Slope Tech, Inc.
221
July 16, 2031
30,466
2.46
Sub-Total: Finance and Insurance (0.5%)*
6,264
7,269
October 28, 2022
October 28, 2032
3,741
140.21
287
308
June 10, 2029
68,863
5.08
410
December 22, 2020
December 22, 2030
29,925
6.24
September 10, 2028
21,577
617
December 29, 2030
114,725
Total Bowery Farming, Inc.
1,216
April 8, 2031
68,100
0.27
106
September 13, 2022
September 13, 2032
2,387
19.12
102
February 17, 2033
13,618
18.89
582
Total DrinkPak, LLC
684
October 5, 2032
40,516
3.96
181
GrubMarket, Inc.
June 15, 2020
June 15, 2030
405,000
1.10
115
4,055
Intelligent Brands, Inc. (f.k.a. PSB Holdings, Inc.)
October 5, 2027
103,636
14.47
December 29, 2032
33,348
3.17
546
Total Intelligent Brands, Inc.
657
October 14, 2030
36,445
0.49
68
Zero Acre Farms, Inc.
December 23, 2022
December 23, 2032
20,181
2.13
79
60
Sub-Total: Food and Agriculture Technologies (0.4%)*
2,745
5,301
October 12, 2031
181,784
0.07
Edeniq, Inc.
Warrant(11)
December 23, 2026
2,685,501
0.22
2,184,672
407
June 29, 2027
5,106,972
0.44
November 2, 2028
3,850,294
1,248
November 29, 2021
November 29, 2031
Preferred Series D⁽¹⁷⁾
154,906,320
1,785
Total Edeniq, Inc.(20)
3,635
February 14, 2020
February 14, 2030
38,171
February 18, 2032
77,524
4,246
June 23, 2022
June 23, 2032
14,624
4,614
July 9, 2029
140,186
1.15
283
257
November 20, 2020
November 20, 2030
81,294
226
149
March 18, 2032
137,692
1.66
344
Total Mainspring Energy, Inc.
853
651
December 10, 2021
December 10, 2031
2,314
205.28
75
214
October 10, 2022
October 10, 2032
917
196.50
January 19, 2034
Preferred Series D-1⁽¹⁷⁾
3,079
203.47
418
295
580
604
Sub-Total: Green Technology (0.3%)*
6,090
4,899
October 14, 2034
51,632
0.76
192
Exer Holdings, LLC
November 19, 2021
November 19, 2031
281
527.51
27
Hospitalists Now, Inc.
March 30, 2026
Preferred Series D-2⁽¹⁷⁾
135,807
5.89
655
December 6, 2026
750,000
3,616
Total Hospitalists Now, Inc.
462
4,271
76,231
1.76
79,325
258
December 22, 2032
97,970
2.49
493
December 29, 2033
155,438
3.62
135
136
November 21, 2032
Preferred A
10.00
94
167
April 7, 2023
April 6, 2033
October 17, 2023
October 16, 2033
40
163
April 29, 2032
Preferred Class A⁽¹⁷⁾
268,983
2.09
March 3, 2033
Sub-Total: Healthcare Technology (0.4%)*
1,572
4,941
BetterLeap, Inc.
April 20, 2032
88,435
2.26
Qwick, Inc.
33,928
96
Sub-Total: Human Resource Technology (0.0%)*
134
288
February 23, 2032
37,218
1.81
SBG Labs, Inc.
September 18, 2024
25,714
0.70
March 24, 2025
12,155
May 6, 2024
11,145
June 9, 2024
7,085
May 20, 2024
342,857
110
709
March 26, 2025
200,000
414
Total SBG Labs, Inc.
1,239
Sub-total: Industrials (0.1%)*
October 17, 2032
253,824
6.76
Firefly Systems, Inc.
January 29, 2030
133,147
282
141
April 8, 2034
142,828
September 28, 2028
2,219
220.82
May 7, 2031
657,343
0.75
751
Sub-Total: Marketing, Media, and Entertainment (0.1%)*
798
957
April 21, 2033
446,982
1.61
492
277
Delphinus, Inc.
June 27, 2023
June 27, 2033
Preferred Series E⁽¹⁷⁾
294,289
0.69
August 10, 2033
798,085
0.38
70
May 30, 2033
Preferred Series A-2⁽¹⁷⁾
549,056
2.16
August 7, 2033
623,615
Sub-Total: Medical Devices (0.0%)*
863
608
24
Homelight, Inc.
October 1, 2022
October 1, 2032
5,434
18.40
May 24, 2029
880
852.69
209
November 10, 2031
16,350
2.20
265
2,804,355
December 6, 2033
Preferred Series AA⁽¹⁷⁾
457,778
474
October 7, 2020
October 7, 2030
106,735
0.29
154
110,860
September 30, 2031
79,135
1.04
148
98
Total Maxwell Financial Labs, Inc.
202
February 12, 2024
February 12, 2034
Preferred Series 1⁽¹⁷⁾
228,000
Sub-Total: Real Estate Technology (0.0%)*
SaaS
All Seated, Inc.
February 28, 2032
5,101
15.72
November 17, 2033
30,666
15.87
441
539
January 29, 2034
Preferred Class B Common⁽¹⁷⁾
665,821
0.36
190
Crowdtap, Inc.
December 16, 2025
442,233
1.09
731
December 11, 2027
100,000
165
Total Crowdtap, Inc.
896
Gtxcel, Inc.
September 24, 2025
1,000,000
0.21
83
Total Gtxcel, Inc.
166
Lucidworks, Inc.
June 27, 2026
619,435
0.77
806
769
Reciprocity, Inc.
September 25, 2020
September 25, 2030
114,678
4.17
45
April 29, 2021
April 29, 2031
57,195
Total Reciprocity, Inc.
Smartly, Inc.
May 16, 2022
May 16, 2034
48,097
The Tomorrow Companies, Inc.
December 14, 2022
December 14, 2032
26,124
1.70
Sub-Total: SaaS (0.2%)*
1,991
2,620
April 13, 2033
96,847
7.89
334
May 28, 2031
1,773
169.24
121
882
340.11
39
Total Axiom Space, Inc.
August 9, 2032
28,624
61
Rocket Lab USA, Inc.
December 29, 2027
572,656
4.87
1,772
1,354
March 3, 2032
221,280
2.75
256
Sub-Total: Space Technology (0.1%)*
2,497
2,036
July 21, 2033
622,353
2.02
284
Sub-Total: Supply Chain Technology (0.0%)*
July 14, 2033
874,527
317
December 14, 2026
Preferred Stock(17)
328,369
(13)
1.29
February 23, 2027
25,653
March 16, 2027
30,784
April 18, 2027
282,192
September 29, 2022
September 29, 2027
410,462
170
Sub-Total: Transportation Technology (0.0%)*
626
Total: Warrant Investments- United States (2.8%)*
32,011
39,413
26
Warrant Investments- Canada
August 27, 2026
63,175
15.83
June 8, 2027
24,123
20.73
614
Sub-Total: Construction Technology (0.0%)*
Total: Warrant Investments- Canada (0.0%)*
Warrant Investments- Europe
Preferred Series D-3⁽¹⁷⁾
11,771
149.01
130
444
Sub-Total: Information (0.0%)*
All.Space Networks, Limited. (10)
August 22, 2032
71,203
21.79
73
Sub-Total: Space Technology (0.0%)*
Total: Warrant Investments- Europe (0.0%)*
517
Total: Warrant Investments- (2.8%)*
32,868
39,930
Shares / Principal
Equity Investments- United States
Equity(7)
February 25, 2022
50,000
77
757,297
506
1,159
1,006
1,236
Sub-Total: Artificial Intelligence & Automation (0.1%)*
Equity⁽¹⁴⁾
611,246
Preferred Series 6⁽¹⁷⁾
498
Vertical Communications, Inc.
Equity⁽¹¹⁾⁽¹⁴⁾
3,892,485
5,500
Convertible Note⁽¹⁶⁾
3,966
2,565
Total Vertical Communications, Inc. (20)
Sub-Total: Connectivity (0.2%)*
4,466
3,063
Project Frog, Inc.
Equity
4,383,497
351
3,401,678
Preferred Series BB⁽¹⁷⁾
1,333
6,633,486
1,684
3,129,887
1,253
Total Project Frog, Inc. (20)
4,621
256,291
Preferred Series B-1⁽¹⁷⁾
694
August 17, 2021
3,320
Sub-Total: Consumer Products & Services (0.0%)*
1,000
Core Scientific, Inc.
January 24, 2024
3,494,967
17,546
12,372
Sub-Total: Digital Assets Technology and Services (0.9%)*
17,726
390
May 9, 2023
44,725
Series D
501
64,654
511
Sub-Total: Finance and Insurance (0.1%)*
1,390
1,012
June 28, 2021
75,958
116
Intelligent Brands, Inc. (f.k.a. Pruvit Ventures, Inc.)
30,357
537
Sub-Total: Food and Agriculture Technologies (0.0%)*
1,037
126
Equity Investments- United States, Continued
Equity⁽¹¹⁾
7,807,499
1,499
3,657,487
1,218
133,766,138
3,121
Total Edeniq, Inc. (20)
5,838
April 6, 2023
87,087
528
65,614
Preferred Series E-1⁽¹⁷⁾
354
Equity(9)
July 5, 2022
February 15, 2023
1,966
405
503
739
1,014
Sub-Total: Green Technology (0.5%)*
1,739
7,734
August 3, 2023
72,338
300
380
June 3, 2022
199,537
249
August 19, 2021
32,416
92
7,000,000
3,450
Preferred Series P⁽¹⁷⁾
3,170
3,219
Total WorkWell Prevention & Care Inc. (20)
6,720
Sub-Total: Healthcare Technology (0.1%)*
8,020
721
37,920
July 29, 2023
21,730
October 10, 2023
6,332
January 12, 2024
12,205
91
Sub-Total: Industrials (0.0%)*
Senior Credit Corp 2022 LLC(10)(20)
-
Preferred ⁽¹⁷⁾
4,026
4,609
Sub-Total: Multi-Sector Holdings (0.3%)*
30,458
2,956,320
250
Total Knockaway Inc.
750
74,406
March 16, 2023
Total Orchard Technologies, Inc.
Maxwell Financial Labs, Inc
135,641
381
2,250
382
136,388
515
July 5, 2023
108,088
325
212
Sub-total: SaaS (0.1%)*
825
727
April 5, 2023
13,685
Series C Prime Preferred⁽¹⁷⁾
64,223
600
900
742
August 11, 2021
3,624
521
567
53,154
Preferred A-4⁽¹⁷⁾
488
December 11, 2023
31,831
Preferred B-1⁽¹⁷⁾
292
800
780
Sub-total: Space Technology (0.1%)*
2,221
2,089
3Q GoFor Holdings, LP (21)
January 17, 2023
Total 3Q GoFor Holdings, LP (21)
January 30, 2024
247,173
Preferred C-1 Preferred⁽¹⁷⁾
502
Sub-total: Supply Chain Technology (0.0%)*
1,500
Total: Equity Investments- United States (2.5%)*
52,171
35,541
Equity Investments- Canada
24,418
Total: Equity Investments- Canada (0.0%)*
Total: Equity Investments (2.5%)*
52,671
Total Investment in Securities (96.7%)*
1,419,998
Cash and Cash Equivalents
Goldman Sachs Financial Square Government Institutional Fund
4,879
Other cash accounts
7,088
Cash and Cash Equivalents (0.8%)*
Total Portfolio Investments and Cash and Cash Equivalents (97.6% of total assets)
1,431,965
1,375,829
* Value as a percent of net assets
30
31
Net change in
Unrealized
Fair Value at
Gross
Realized
(Depreciation)/
Interest and
December 31, 2023
Additions (1)
Reductions (2)
Gain/(Loss)
Appreciation
Dividend Income
For the Three Months Ended March 31, 2024
Control Investments
11,386
302
(443
819
12,064
372
3Q GoFor Holdings, LP
4,222
(133
59
16,745
(150
1,226
17,887
463
WorkWell Prevention and Care Inc.
Total Control Investments
758
(593
Affiliate Investments
Senior Credit Corp 2022 LLC
2,415
Total Affiliate Investments
Total Control and Affiliate Investments
44,196
3,173
2,217
48,993
2,383
2,502
2,528
2,684
2,803
2,832
467
5,517
5,772
5,833
6,964
7,220
7,202
5,164
5,320
5,303
5,812
5,905
5,876
4,442
4,527
4,507
22,382
22,972
22,888
Variable interest rate Prime + 7.8% or Floor rate 11.0%; EOT 4.8% ⁽⁸⁾
4,592
4,369
Sub-total: Artificial Intelligence & Automation (2.5%)*
32,356
33,336
33,090
April 1, 2024
Fixed interest rate 11.4%; EOT 8.0%
268
469
496
Fixed interest rate 14.9%; EOT 8.0%
562
767
849
280
348
423
Fixed interest rate 18.3%; EOT 8.0%
207
247
1,275
1,791
2,015
July 15, 2020
Fixed interest rate 9.8%; EOT 6.0%
88
4,355
4,731
4,648
4,872
4,792
5,150
5,073
23,623
24,433
24,028
Taysha Gene Therapies, Inc.(10)
29,752
Sub-total: Biotechnology (4.3%)*
54,898
55,976
55,795
12,750
15,406
15,330
14,209
Sub-total: Connectivity (2.3%)*
27,750
30,736
29,615
294
343
497
1,315
1,441
1,402
2,071
2,305
2,224
210
Equipment Financing(18)
266
233
403
329
1,231
4,975
4,967
4,921
5,010
9,896
9,977
1,531
1,610
1,588
13,611
13,919
14,023
1,944
1,996
15,555
15,915
16,038
5,031
5,099
3,928
4,033
8,959
9,132
2,817
2,719
8,170
8,928
8,721
5,515
23,106
23,226
Sub-total: Consumer Products & Services (6.1%)*
80,314
81,498
80,578
9,591
10,376
10,137
674
700
759
Fixed interest rate 10.7%; EOT 5.0%
10,132
10,437
11,406
December 13, 2021
Fixed interest rate 10.5%; EOT 5.0%
3,753
3,853
4,225
February 9, 2022
8,018
8,179
9,026
Total Core Scientific, Inc.
22,577
23,169
25,416
Sub-total: Digital Assets Technology and Services (2.7%)*
32,168
33,545
35,553
5,834
6,144
5,841
2,000
2,103
1,971
7,834
8,247
7,812
5,581
1,863
7,444
Sub-total: Education Technology (1.2%)*
17,834
18,747
15,256
25,130
24,993
15,071
15,096
40,201
40,089
11,686
7,210
7,012
3,141
3,153
6,270
6,356
15,637
16,105
25,048
25,614
10,358
9,372
8,256
7,250
6,560
5,779
Variable interest rate Prime + 7.5% or Floor rate 11.75%+PIK Interest Rate 4.25%; EOT 0.0% (8)(15)
20,853
17,203
15,068
38,461
33,135
29,103
Slope Tech, Inc.
1,235
1,099
1,265
13,655
13,901
13,898
Sub-total: Finance and Insurance (9.8%)*
137,351
132,280
128,667
19,878
20,510
20,166
4,964
5,105
5,032
9,992
34,842
35,607
35,190
5,521
100
150
194
191
356
427
421
1,026
1,162
1,141
276
629
678
2,959
3,381
3,334
12,414
12,816
13,002
Fixed interest rate 9.1%; EOT 8.5%
117
114
Fixed interest rate 9.3%; EOT 11.5%
5,176
5,771
8,101
8,652
8,244
13,345
14,912
14,129
9,518
10,609
10,545
76
137
1,600
1,776
1,718
1,676
1,913
1,853
Sub-total: Food and Agriculture Technologies (6.4%)*
83,414
87,185
83,574
37
606
648
835
818
261
5,181
5,202
5,442
6,037
6,298
6,515
March 17, 2020
Fixed interest rate 9.0%; EOT 12.5%
224
520
687
737
865
811
Fixed interest rate 8.9%; EOT 12.5%
1,400
1,581
1,481
729
686
Fixed interest rate 9.5%; EOT 12.5%
999
1,110
1,045
426
409
364
392
383
868
8,259
7,886
1,373
1,492
1,469
9,965
11,373
11,457
11,434
2,826
2,884
2,885
2,916
2,921
2,934
5,742
5,805
5,819
4,489
4,926
2,288
2,478
6,777
7,404
7,078
2,163
2,993
19,061
19,434
18,995
19,364
38,056
38,798
28,579
29,068
28,286
14,766
14,871
7,232
21,000
21,968
22,103
Sub-total: Green Technology (10.0%)*
130,054
131,099
131,518
Healthcare Technology **
2,302
2,953
3,075
4,107
7,117
7,182
2,467
2,623
2,575
3,680
3,768
3,670
4,942
5,029
11,147
11,333
11,274
12,316
12,315
9,144
9,146
9,324
3,033
2,985
3,009
2,948
15,186
15,079
15,442
5,072
4,785
15,086
15,160
9,924
30,082
29,869
Sub-total: Healthcare Technology (6.1%)*
78,835
79,445
79,535
30,508
30,120
Sub-total: Human Resource Technology (2.3%)*
1,453
1,763
1,593
754
801
2,207
2,394
6,500
6,469
8,707
9,128
8,863
Variable interest rate Prime + 7.5% or Floor rate 11.0%; EOT 2.5% ⁽⁸⁾
9,919
9,021
4,402
4,437
4,463
3,059
4,209
3,557
11,500
11,804
11,644
11,995
12,264
5,983
6,114
17,978
18,378
Sub-total: Marketing, Media, and Entertainment (3.6%)*
46,961
48,347
47,063
11,719
11,842
Delphinus Medical Technologies, Inc.
June 22, 2027
4,470
19,845
20,461
5,909
6,161
14,888
15,062
11,138
11,650
Sub-total: Medical Devices (5.3%)*
68,750
67,969
69,856
7,704
Sub-total: Multi-Sector Holdings (0.6%)*
2,717
2,928
2,913
3,896
4,168
4,182
3,119
3,321
3,360
3,831
4,056
4,140
3,224
3,397
3,472
2,140
2,244
2,319
18,927
20,114
20,386
5,234
4,433
21,222
21,253
January 31, 2024
22,958
22,989
14,843
14,909
March 11, 2021
Variable interest rate Prime + 7.5% or Floor rate 11.0%; EOT 4.0% ⁽⁸⁾
4,083
4,230
4,156
July 23, 2021
11,211
11,554
11,368
August 2, 2022
12,701
12,569
27,794
28,485
28,093
Sub-total: Real Estate Technology (6.9%)*
91,950
91,951
90,810
41
January 20, 2020
128
February 1, 2020
127
March 26, 2020
139
306
242
399
955
1,245
1,204
1,465
2,339
2,277
29,030
Sub-total: SaaS (2.4%)*
31,465
31,369
31,307
12,558
12,744
12,904
25,439
25,306
278
2,940
2,933
2,955
2,135
3,835
3,828
3,923
945
935
983
870
912
2,696
2,687
2,808
1,361
1,355
1,398
15,065
15,017
15,420
715
755
728
1,364
1,806
1,815
1,020
998
4,852
4,867
Fixed interest rate 12.5%; EOT 1.0%
70,000
68,422
Fixed interest rate 12.5%; EOT 0.0%
39,999
Total Rocket Lab USA, Inc.
110,000
108,421
4,441
4,531
4,403
Sub-total: Space Technology (13.1%)*
171,916
171,084
171,321
19,696
19,990
Sub-total: Supply Chain Technology (1.5%)*
6,012
6,014
5,053
3,006
3,607
5,055
30,060
30,062
25,275
8,900
8,785
406
9,406
9,300
9,106
5,061
4,757
Sub-total: Transportation Technology (3.0%)*
44,466
44,423
Total: Debt Securities- United States (90.8%)*
1,196,893
1,206,026
1,189,353
Nexii Building Solutions, Inc.(10)
10,659
11,055
4,091
2,045
669
17,773
18,367
6,805
Sub-total: Construction Technology (0.5%)*
GoFor Industries, Inc.(10)(20)
9,570
9,385
Total: Debt Securities- Canada (0.8%)*
27,343
27,752
11,027
Aledia, Inc.(10)
8,139
9,171
8,981
625
673
899
970
1,498
1,602
1,590
11,161
12,427
12,202
Sub-total: Industrials (0.9%)*
9,539
9,565
9,495
Sub-total: Space Technology (0.7%)*
Total: Debt Securities- Europe (1.7%)*
20,700
21,992
21,697
Total: Debt Securities (93.3%)(19)*
1,244,936
1,255,770
1,222,077
44
47
550
Sub-Total: Biotechnology (0.0%)*
2,673
2,697
Project Frog, Inc.(20)
February 28, 2027
455
1,741,313
516
799
Sub-Total: Consumer Products & Services (0.2%)*
3,178
2,422
28,732
228
209,198
342
234,421
3.88
1,706
484
Sub-Total: Finance and Insurance (0.2%)*
5,729
3,672
196
586
688
3,535
4,809
205
1,326
1,047
3,029
891
310
Sub-Total: Green Technology (0.4%)*
5,672
4,365
103
628
3,467
4,095
172
1,573
4,667
291
330
January 14, 2024
21,492
1,357
293
201
Sub-Total: Marketing, Media, and Entertainment (0.0%)*
297,988
377
217
748
464
852.70
51,110
733
730
861
2,063
50
1,122
31,398
146
728,835
2,255
Sub-Total: Space Technology (0.3%)*
3,001
795,785
394
601
Total: Warrant Investments- United States (2.4%)*
29,387
32,824
11,573
622
Total: Warrant Investments- Europe (0.1%)*
703
Total: Warrant Investments- (2.4%)*
30,244
33,527
746
795
569
1,338
Total Vertical Communications, Inc.(20)
1,907
352
Total Project Frog, Inc.(20)
4,622
January 12, 2023
2,361
445
Sub-Total: Consumer Products & Services (0.1%)*
722
504
1,005
230
324
1,293
2,542
5,365
602
1,192
Sub-Total: Green Technology (0.6%)*
7,396
304
327
Total WorkWell Prevention & Care Inc.(20)
3,302
3,631
2,956,224
355
143
211
Preferred Series C Prime⁽¹⁷⁾
572
456
756
1,621
1,634
3Q GoFor Holdings, LP(21)
Total 3Q GoFor Holdings, LP(21)
Total: Equity Investments- United States (1.5%)*
32,802
19,576
Total: Equity Investments (1.5%)*
33,302
Total Investment in Securities (97.3%)*
1,319,316
3,088
1,673
Cash and Cash Equivalents (0.4%)*
1,324,077
1,279,941
** Where appropriate, certain current year industry classifications may have been revised to more precisely reflect the business of the Company's investments.
55
For the Year Ended December 31, 2023
11,879
1,717
(1,655
(555
2,116
7,521
(3,799
(131
17,274
(550
(399
1,997
37,313
(2,205
(4,884
4,179
FemTec Health, Inc.
1,528
(2,328
(26,251
27,051
11,006
1,025
27,380
38,841
13,643
(4,533
22,496
5,204
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Organization and Basis of Presentation
Trinity Capital Inc. (“Trinity Capital” and, together with its subsidiaries, the “Company”) is a specialty lending company focused on providing debt, including loans and equipment financings, to growth-stage companies, including venture-backed companies and companies with institutional equity investors. Trinity Capital was formed on August 12, 2019 as a Maryland corporation and commenced operations on January 16, 2020. Prior to January 16, 2020, Trinity Capital had no operations, except for matters relating to its formation and organization as a business development company (“BDC”).
Trinity Capital is an internally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended (the “1940 Act”). Trinity Capital has elected to be treated, currently qualifies, and intends to continue to qualify annually as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), for U.S. federal income tax purposes.
On September 27, 2019, Trinity Capital was initially capitalized with the issuance of 10 shares of its common stock for $150 to its sole stockholder.
On January 16, 2020, Trinity Capital completed a private offering of shares of its common stock (the “Private Common Stock Offering”) pursuant to which it issued and sold 8,333,333 shares of its common stock for total aggregate gross proceeds of approximately $125.0 million, inclusive of an over-allotment option that was exercised in full on January 29, 2020.
Concurrent with the initial closing of the Private Common Stock Offering, the Company completed a private debt offering (the “144A Note Offering” and together with the Private Common Stock Offering, the “Private Offerings”), pursuant to which it issued and sold $125.0 million in aggregate principal amount of the Company's unsecured 7.00% Notes due 2025 (the “2025 Notes”), inclusive of the over-allotment option that was exercised in full on January 29, 2020.
On January 16, 2020, Trinity Capital completed a series of transactions, the Private Offerings, and the acquisition of Trinity Capital Investment, LLC, Trinity Capital Fund II, L.P. (“Fund II”), Trinity Capital Fund III, L.P., Trinity Capital Fund IV, L.P., and Trinity Sidecar Income Fund, L.P. (collectively, the “Legacy Funds”) through mergers of the Legacy Funds with and into Trinity Capital as well as Trinity Capital’s acquisition of Trinity Capital Holdings, LLC (“Trinity Capital Holdings”) (collectively, the “Formation Transactions”).
Trinity Capital’s common stock began trading on the Nasdaq Global Select Market on January 29, 2021, under the symbol “TRIN” in connection with its initial public offering of shares of its common stock (“IPO”).
Basis of Presentation
The Company’s interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of management, the unaudited financial results included herein contain all adjustments, consisting solely of normal accruals, considered necessary for the fair statement of the results for the interim period included herein. The current period’s consolidated results of operations are not necessarily indicative of results that may be achieved for the year. The interim consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on March 6, 2024. As an investment company, the Company follows accounting and reporting guidance determined by the Financial
Accounting Standards Board (“FASB”), in Accounting Standards Codification, as amended (“ASC”) 946, Financial Services – Investment Companies (“ASC 946”).
Principles of Consolidation
Under ASC 946, the Company is precluded from consolidating portfolio company investments, including those in which it has a controlling interest, unless the portfolio company is another investment company. An exception to this general principle occurs if the Company holds a controlling interest in an operating company that provides all or substantially all of its services directly to the Company or to its portfolio companies. None of the portfolio investments made by the Company qualify for this exception. Therefore, the Company’s investment portfolio is carried on the Consolidated Statements of Assets and Liabilities at fair value, as discussed further in “Note 3 - Investments,” with any adjustments to fair value recognized as “Net unrealized appreciation/(depreciation) from investments” on the Consolidated Statements of Operations.
The Company’s consolidated operations include the activities of its wholly owned subsidiaries, Trinity Funding 1, LLC (“TF1”), and TrinCap Funding, LLC (“TCF”). TF1 was formed on August 14, 2019, as a Delaware limited liability company with Fund II as its sole equity member. On January 16, 2020, in connection with the Formation Transactions, Trinity Capital acquired TF1 through Fund II and became a party to, and assumed, a $300 million credit agreement with Credit Suisse AG (the “Credit Suisse Credit Facility”) through TF1 which matured on January 8, 2022 in accordance with its terms. TCF was formed on August 5, 2021, as a Delaware limited liability company with Trinity Capital as its sole equity member for purposes of securing lending in conjunction with a $350 million credit agreement, as amended, with KeyBank National Association (“KeyBank”) (such credit facility, the “KeyBank Credit Facility”). TF1 and TCF are special purpose bankruptcy-remote entities and are separate legal entities from Trinity Capital. Any assets conveyed to TF1 or TCF are not available to creditors of the Company or any other entity other than TF1's or TCF’s respective lenders. TF1 and TCF are consolidated for financial reporting purposes and in accordance with GAAP, and the portfolio investments held by these subsidiaries, if any, are included in the Company’s consolidated financial statements and recorded at fair value. All intercompany balances and transactions have been eliminated. As part of the Formation Transactions, Trinity Capital acquired 100% of the equity interests of Trinity Capital Holdings. There has been no activity in Trinity Capital Holdings since acquisition.
In accordance with Rule 10-01(b)(1) of Regulation S-X, as amended, the Company must determine which of its unconsolidated controlled subsidiaries, if any, are considered “significant subsidiaries.” In evaluating these unconsolidated controlled subsidiaries, there are two significance tests utilized per Rule 1-02(w) of Regulation S-X to determine if any of the Company’s investments or unconsolidated controlled subsidiaries are considered significant: the investment test and the income test. As of March 31, 2024 and December 31, 2023, none of the Company’s investments or unconsolidated controlled subsidiaries met either of these two significance tests.
On December 5, 2022, the Company entered into a joint venture agreement with certain funds and accounts managed by a specialty credit manager (collectively, the “JV Partner”) to co-manage Senior Credit Corp 2022 LLC (the “JV”). The JV invests in secured loans and equipment financings to growth-stage companies that have been originated by the Company. The Company and the JV Partner committed to initially contribute $21.4 million and $150.0 million, respectively, of capital in the form of 8.5% notes and preferred equity in the JV. The JV is capitalized as investment transactions are completed and all portfolio decisions and generally all other actions in respect of the JV must be approved by the board of managers of the JV consisting of an equal number of representatives of the Company and the JV Partner. Capital contributions are called from each JV member on a pro-rata basis based on their total capital commitments, with 70% of each such capital contribution invested in the JV’s 8.5% notes and the remaining 30% invested in the JV's preferred equity. As of March 31, 2024, the Company's and the JV Partner's ownership of the JV was 12.5% and 87.5%, respectively.
The Company has agreed to offer the JV the opportunity to purchase up to 40% in dollar amount, but not less than 25% in dollar amount, of the entire amount of each secured loan and equipment financing advance originated by the Company during the period commencing on September 1, 2022 and ending on June 5, 2026. The JV is required to pay the Company a fee equal to 100 basis points of the total principal amount of each loan or equipment
financing advance acquired by the JV from the Company, with 50% of the fee for each such particular loan or advance payable by the JV to the Company within two business days of the date of such acquisition or advance and the remaining 50% payable in equal monthly installments over 24 months following the date of such acquisition or advance. In addition, the JV shall pay the Company an administrative agent fee equal to 75 basis points of the daily average aggregate value of the JV's outstanding loans and equipment financings.
As permitted under Regulation S-X and consistent with the guidance in ASC 946-810-45-3, the Company will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to the Company. As the Company’s representatives do not comprise the majority of the board of managers of the JV and the Company does not hold a majority of the economic interests in the JV, the Company does not consolidate the JV in its financial statements.
As of March 31, 2024, the Company contributed $13.4 million of capital to the JV, which consisted of a debt investment of $9.4 million and an equity investment of $4.0 million. As of December 31, 2023, the Company contributed $11.0 million of capital to the JV, which consisted of a debt investment of $7.7 million and an equity investment of $3.3 million. As of March 31, 2024 and December 31, 2023, the Company's unfunded commitment was $8.0 million and $10.4 million, respectively.
As of March 31, 2024 and December 31, 2023, the JV's total investment portfolio on a fair value basis was $202.0 million and $151.6 million, respectively. During the three months ended March 31, 2024, the Company received $52.4 million in net proceeds from the sale of investments to the JV. During the year ended December 31, 2023, the Company received $146.2 million in net proceeds from the sale of investments to the JV.
During the three months ended March 31, 2024 and March 31, 2023, the Company earned approximately $0.9 million and $0.5 million, respectively, for originations and administrative agent fees which are recognized as fee income on the Consolidated Statements of Operations. As of March 31, 2024 and December 31, 2023, the Company had approximately $1.0 million and $0.8 million, respectively, in unsettled receivables due from the JV that were included in other assets in the accompanying Consolidated Statements of Assets and Liabilities.
Note 2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ materially from these estimates.
Investment Transactions
Loan originations are recorded on the date of the legally binding commitment. Realized gains or losses are recorded using the specific identification method as the difference between the net proceeds received, excluding prepayment fees, if any, and the amortized cost basis of the investment without regard to unrealized gains or losses previously recognized, and include investments written off during the period, net of recoveries. The net change in unrealized gains or losses primarily reflects the change in investment fair values as of the last business day of the reporting period and also includes the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.
Valuation of Investments
The most significant estimate inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded.
The Company’s investments are carried at fair value in accordance with the 1940 Act and ASC 946 and measured in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that each of the portfolio investments is sold in a hypothetical transaction in the principal or, as applicable, most advantageous market using market participant assumptions as of the measurement date. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. The Company values its investments at fair value as determined in good faith pursuant to a consistent valuation policy by the Company’s Board of Directors (the “Board”) in accordance with the provisions of ASC 820 and the 1940 Act.
The SEC adopted Rule 2a-5 under the 1940 Act (“Rule 2a-5”), which establishes a framework for determining fair value in good faith for purposes of the 1940 Act. As adopted, Rule 2a-5 permits boards of directors to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. The SEC also adopted Rule 31a-4 under the 1940 Act (“Rule 31a-4”), which provides the recordkeeping requirements associated with fair value determinations. While the Company's Board has not elected to designate a valuation designee, the Company has adopted certain revisions to its valuation policies and procedures to comply with the applicable requirements of Rule 2a-5 and Rule 31a-4.
While the Board is ultimately and solely responsible for determining the fair value of the Company’s investments, the Company has engaged independent valuation firms, on a discretionary basis, to provide the Company with valuation assistance with respect to its investments. Specifically, on a quarterly basis, the Company identifies portfolio investments with respect to which an independent valuation firm assists in valuing such investments. The Company selects these portfolio investments based on a number of factors, including, but not limited to, the potential for material fluctuations in valuation results, size, credit quality and the time lapse since the last valuation of the portfolio investment by an independent valuation firm.
Investments recorded on the Company’s Consolidated Statements of Assets and Liabilities are categorized based on the inputs to the valuation techniques as follows:
Level 1 — Investments whose values are based on unadjusted quoted prices for identical assets in an active market that the Company has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).
Level 2 — Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment.
Level 3 — Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.
Given the nature of lending to venture capital-backed growth-stage companies, 98.6%, based on fair value, of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC 820 because there is no known or accessible market or market index for these investment securities to be traded or exchanged. Transfers between levels, if any, are recognized at the beginning of the period in which the transfers occur. The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis, and investment valuation procedures. This system takes into account both quantitative and qualitative factors of the portfolio companies. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
Debt Securities
The debt securities identified on the Consolidated Schedule of Investments are secured loans and equipment financings made to growth-stage companies. For portfolio investments in debt securities for which the Company has determined that third-party quotes or other independent pricing are not available, the Company generally estimates the fair value based on the assumptions that hypothetical market participants would use to value the investment in a current hypothetical sale using an income approach.
In its application of the income approach to determine the fair value of debt securities, the Company bases its assessment of fair value on projections of the discounted future free cash flows that the security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the security, as set forth in the associated loan and equipment financing agreements, as well as market yields and the financial position and credit risk of the portfolio company (the “Hypothetical Market Yield Method”). The discount rate applied to the future cash flows of the security is based on the calibrated yield implied by the terms of the Company’s investment adjusted for changes in market yields and performance of the subject company. The Company’s estimate of the expected repayment date of its loans and equipment financings securities is either the maturity date of the instrument or the anticipated pre-payment date, depending on the facts and circumstances. The Hypothetical Market Yield Method also considers changes in leverage levels, credit quality, portfolio company performance, market yield movements, and other factors. If there is deterioration in credit quality or if a security is in workout status, the Company may consider other factors in determining the fair value of the security, including, but not limited to, the value attributable to the security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.
Equity Securities and Warrants
Often the Company is issued warrants by issuers as yield enhancements. These warrants are recorded as assets at estimated fair value on the grant date. The Company determines the cost basis of the warrants or other equity securities received based upon their respective fair values on the date of receipt in proportion to the total fair value of the debt and warrants or other equity securities received. Depending on the facts and circumstances, the Company generally utilizes a combination of one or several forms of the market approach and contingent claim analyses (a form of option analysis) to estimate the fair value of the securities as of the measurement date and determines the cost basis using a relative fair value methodology. As part of its application of the market approach, the Company estimates the enterprise value of a portfolio company utilizing customary pricing multiples, based on the development stage of the underlying issuers, or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations that are assessed to be indicative of fair value of the respective portfolio company. If appropriate, based on the facts and circumstances, the Company performs an allocation of the enterprise value to the equity securities utilizing a contingent claim analysis and/or other waterfall calculation by which it allocates the enterprise value across the portfolio company’s securities in order of their preference relative to one another.
Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The carrying amounts of the Company’s financial instruments, consisting of cash, investments, receivables, payables, and other liabilities, approximate the fair values of such items due to the short-term nature of these instruments. Refer to “Note 4 – Fair Value of Financial Instruments” for further discussion.
Cash, cash equivalents and restricted cash consist of funds deposited with financial institutions and short-term (original maturity of three months or less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level 1 assets and are valued using the net asset value (“NAV”) per share of the money market fund. As of March 31, 2024 and December 31, 2023, cash and cash equivalents consisted of $12.0 million and $4.8 million, respectively, of which $4.9 million and $3.1 million, respectively, was held in the Goldman Sachs Financial Square Government Institutional Fund. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and therefore is subject to credit risk. All of the Company’s cash deposits are held at large, established, high credit quality financial institutions, and management believes that the
62
risk of loss associated with any uninsured balances is remote. As of March 31, 2024 and December 31, 2023, the Company did not have any restricted cash.
Other Assets
Other assets generally consist of fixed assets net of accumulated depreciation, leasehold improvements net of accumulated depreciation, right-of-use assets, prepaid expenses, escrow receivables, deferred offering costs, and security deposits for operating leases.
Escrow Receivables
Escrow receivables are collected in accordance with the terms and conditions of the escrow agreement. Escrow balances are typically distributed over a period of one year and may accrue interest during the escrow period. Escrow balances are measured for collectability on at least a quarterly basis and fair value is determined based on the amount of the estimated recoverable balances and the contractual maturity date. As of March 31, 2024, and December 31, 2023, there were no material past due escrow receivables. The escrow receivable balance as of March 31, 2024, and December 31, 2023 totaled $2.4 million and $2.4 million, respectively, and was measured at fair value and held in accordance with ASC 820.
Equity Offering Costs
Equity offering costs consist of fees and costs incurred in connection with the sale of the Company’s common stock, including legal, accounting and printing fees. These costs are deferred at the time of incurrence and are subsequently charged as a reduction to capital when the offering takes place or as shares are issued. Equity offering costs are periodically reviewed and expensed if the related registration is no longer active.
Security Deposits
Security deposits are collected upon funding equipment financings and are applied in lieu of regular payments at the end of the term.
Debt Financing Costs
The Company records costs related to the issuance of debt obligations as deferred debt financing costs. These costs are deferred and amortized using the straight-line method over the stated maturity life of the obligations. Debt financing costs related to secured or unsecured notes are netted with the outstanding principal balance on the Company’s Consolidated Statements of Assets and Liabilities. Debt financing costs related to the KeyBank Credit Facility are recorded as a separate asset on the Company’s Consolidated Statements of Assets and Liabilities.
Income Recognition
Interest and Dividend Income
The Company recognizes interest income on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan agreement to the extent that such amounts are expected to be collected. Original issue discount (“OID”) initially includes the estimated fair value of detachable warrants obtained in conjunction with the origination of debt securities and is accreted into interest income over the term of the loan as a yield enhancement based on the effective yield method. In addition, the Company may also be entitled to an end-of-term (“EOT”) payment. EOT payments to be paid at the termination of the debt agreements are accreted into interest income over the contractual life of the debt based on the effective yield method. When a portfolio company pre-pays their indebtedness prior to the scheduled maturity date, the acceleration of the unaccreted OID and EOT payment is recognized as interest income.
The Company has a limited number of debt investments in its portfolio that contain a payment-in-kind (“PIK”) provision. Contractual PIK interest, which represents contractually deferred interest added to the loan
balance that is generally due at the end of the loan term, is generally recorded on an accrual basis to the extent such amounts are expected to be collected. The Company will generally cease accruing PIK interest if there is insufficient value to support the accrual or management does not expect the portfolio company to be able to pay all principal and interest due. The Company recorded $4.1 million and $0.3 million in PIK interest income during the three months ended March 31, 2024 and 2023, respectively.
Income related to application or origination payments, including facility commitment fees, net of related expenses and generally collected in advance, is amortized into interest income over the contractual life of the loan. The Company recognizes nonrecurring fees and additional OID and EOT payment received in consideration for contract modifications commencing in the quarter relating to the specific modification.
The Company records dividend income on an accrual basis to the extent amounts are expected to be collected. Dividend income is recorded when dividends are declared by the portfolio company or at such other time that an obligation exists for the portfolio company to make a distribution. The Company recorded $0.2 million in dividend income during the three months ended March 31, 2024 and no dividend income was recorded during the three months ended March 31, 2023.
Fee and Other Income
The Company recognizes one-time fee income, including, but not limited to, structuring fees, prepayment penalties, and exit fees related to a change in ownership of the portfolio company, as other income when earned. These fees are generally earned when the portfolio company enters into an equipment financing arrangement or pays off their outstanding indebtedness prior to the scheduled maturity. In addition, fee income may include fees for originations and administrative agent services rendered by the Company to the JV. Such fees are earned in the period that the services are rendered.
Non-Accrual Policy
When a debt security becomes 90 days or more past due, or if management otherwise does not expect that principal, interest, and other obligations due will be collected in full, the Company will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or the Company believes the borrower has demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, the Company may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection.
As of March 31, 2024, loans to four portfolio companies and equipment financings to one portfolio company were on non-accrual status, with a total cost of approximately $67.5 million, and a total fair value of approximately $30.4 million, or 2.4% of the fair value of the Company’s debt investment portfolio. As of December 31, 2023, loans to three portfolio companies and equipment financings to two portfolio companies were on non-accrual status, with a total cost of approximately $60.8 million, and a total fair value of approximately $43.2 million, or 3.5%, of the fair value of the Company’s debt investment portfolio.
Net Realized Gains / (Losses)
Realized gains / (losses) are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net proceeds exclude any prepayment penalties, exit fees, and OID and EOT acceleration. Prepayment penalties and exit fees received at the time of sale or redemption are included in fee income on the Consolidated Statements of Operations. OID and EOT acceleration is included in interest income on the Consolidated Statements of Operations.
Net Unrealized Appreciation / (Depreciation)
Net change in unrealized appreciation / (depreciation) reflects the net change in the fair value of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.
Stock-Based Compensation
The Company has issued and may, from time to time, issue restricted stock to its officers and employees under the 2019 Trinity Capital Inc. Long Term Incentive Plan and to its non-employee directors under the Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan. The Company accounts for its stock-based compensation plans using the fair value method, as prescribed by ASC 718, Compensation – Stock Compensation. Accordingly, for restricted stock awards, the Company measures the grant date fair value based upon the market price of its common stock on the date of the grant and amortizes the fair value of the awards as stock-based compensation expense over the requisite service period, which is generally the vesting term.
The Company has also adopted Accounting Standards Update (“ASU”) 2016-09, Compensation—Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which requires that all excess tax benefits and tax deficiencies (including tax benefits of dividends on stock-based payment awards) be recognized as income tax expense or benefit in the income statement and not delay recognition of a tax benefit until the tax benefit is realized through a reduction to taxes payable. Accordingly, the tax effects of exercised or vested awards are treated as discrete items in the reporting period in which they occur. Additionally, the Company has elected to account for forfeitures as they occur.
Earnings Per Share
The Company's earnings per share (“EPS”) amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Basic earnings per share is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted-average number of common shares outstanding for the period. In accordance with ASC 260, Earnings Per Share, the unvested shares of restricted stock awarded pursuant to Trinity Capital’s equity compensation plans are participating securities and, therefore, are included in the basic earnings per share calculation. Diluted EPS is computed by dividing net increase (decrease) in net assets resulting from operations by the weighted average number of shares of common stock assuming all potential shares had been issued and the additional shares of common stock were dilutive. Diluted EPS, if any, reflects the potential dilution from the assumed conversion of the Company’s 6.00% Convertible Notes due 2025 (the “Convertible Notes”).
Income Taxes
The Company has elected to be treated, currently qualifies, and intends to continue to qualify annually as a RIC under Subchapter M of the Code for U.S. federal tax purposes. In order to maintain its treatment as a RIC, the Company is generally required to distribute at least annually to its stockholders at least the sum of 90% of its investment company taxable income (which generally includes its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its net tax-exempt income (if any). The Company generally will not be subject to U.S. federal income tax on these distributed amounts but will pay U.S. federal income tax at corporate rates on any retained amounts.
The Company evaluates tax positions taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority in accordance with ASC 740, Income Taxes (“ASC 740”), as modified by ASC 946. Tax benefits of positions not deemed to meet the more-likely-than-not threshold, or uncertain tax positions, would be recorded as tax expense in the current year. It is the Company’s policy to recognize accrued interest and penalties related to uncertain tax benefits in income tax expense. The Company has no material uncertain tax positions as of March 31, 2024 and December 31, 2023. All the Company’s tax returns remain subject to examination by U.S. federal and state tax authorities.
Based on federal excise distribution requirements applicable to RICs, the Company will be subject to a 4% nondeductible federal excise tax on undistributed taxable income and gains unless the Company distributes in a timely manner an amount at least equal to the sum of (1) 98% of its ordinary income for each calendar year, (2) 98.2% of capital gain net income (both long-term and short-term) for the one-year period ending October 31 in that calendar year and (3) any income or gain realized, but not distributed, in the preceding years. For this purpose, however, any ordinary income or capital gain net income retained by the Company and on which the Company paid corporate income tax is considered to have been distributed. The Company, at its discretion, may determine to carry forward taxable income or gain and pay a 4% excise tax on the amount by which it falls short of this calendar-year distribution requirement. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders. The Company will accrue excise tax on estimated undistributed taxable income and capital gains as required on an annual basis.
Distributions
Distributions to common stockholders are recorded on the record date. The amount of taxable income to be paid out as a distribution is determined by the Board each quarter and is generally based upon the earnings estimated by management. Capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay U.S. federal income tax at corporate rates on those retained amounts. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders.
Note 3. Investments
The Company provides debt, including loans and equipment financings, to growth-stage companies, including venture capital-backed companies and companies with institutional equity investors, primarily in the United States. The Company’s investment strategy includes making investments consisting primarily of term loans and equipment financings, and, to a lesser extent, working capital loans, equity, and equity-related investments. In addition, the Company may obtain warrants or contingent exit fees at funding from many of its portfolio companies.
The Company’s debt securities primarily consist of direct investments in interest-bearing secured loans and equipment financings to privately held companies based in the United States. Secured loans are generally secured by a blanket first lien or a blanket second lien on the assets of the portfolio company. Equipment financings typically include a specific asset lien on mission-critical assets as well as a second lien on the assets of the portfolio company. These debt securities typically have a term of between three and five years from the original investment date. Certain of the debt securities are “covenant-lite” loans, which generally are loans that do not have a complete set of financial maintenance covenants and have covenants that are incurrence-based, meaning they are only tested and can only be breached following an affirmative action of the borrower rather than by a deterioration in the borrower’s financial condition. The equipment financings in the investment portfolio generally have fixed interest rates. The secured loans in the investment portfolio generally have floating interest rates subject to interest rate floors. Both equipment financings and secured loans generally include an EOT payment.
The specific terms of each debt security vary depending on the creditworthiness of the portfolio company and the projected value of the financed assets. Companies with stronger creditworthiness may receive an initial period of lower financing factor, which is analogous to an interest-only period on a traditional term loan. Equipment financings may include upfront interim payments and security deposits. Equipment financing arrangements have various structural protections, including customary default penalties, information and reporting rights, material adverse change or investor abandonment provisions, consent rights for any additions or changes to senior debt, and, as needed, intercreditor agreements with cross-default provisions to protect the Company’s second lien positions.
Warrant Investments
In connection with the Company’s debt investments, the Company may receive warrants in the portfolio company. Warrants received in connection with a debt investment typically include a potentially discounted contract
price to exercise, and thus, as a portfolio company appreciates in value, the Company may achieve additional investment return from this equity interest. The warrants typically contain provisions that protect the Company as a minority-interest holder, as well as secured or unsecured put rights, or rights to sell such securities back to the portfolio company, upon the occurrence of specified events. In certain cases, the Company may also obtain follow-up rights in connection with these equity interests, which allow the Company to participate in future financing rounds.
Equity Investments
In specific circumstances, the Company may seek to make direct equity investments in situations where it is appropriate to align the interests of the Company with key management and stockholders of the portfolio company, and to allow for participation in the appreciation in the equity values of the portfolio company. These equity investments are generally made in connection with debt investments. The Company seeks to maintain fully diluted equity positions in its portfolio companies of 5% to 50% and may have controlling equity interests in some instances.
Portfolio Composition
The Company’s portfolio investments are in companies conducting business in a variety of industries. Industry classifications have been updated to a preferred presentation and the prior year has been amended to conform with the new preferred presentation. The following table summarizes the composition of the Company’s portfolio investments by industry at cost and fair value and as a percentage of the total portfolio as of March 31, 2024 and December 31, 2023 (dollars in thousands):
Fair Value
Industry
Amount
%
190,781
13.3
189,158
13.9
139,399
10.6
133,344
10.5
149,648
154,883
11.4
138,510
143,279
11.2
124,130
8.7
124,504
9.1
185,384
14.1
186,335
14.6
92,354
6.5
91,657
6.7
85,683
83,722
6.6
93,027
94,878
7.2
91,344
87,652
6.2
83,697
6.1
89,038
6.8
84,917
84,125
5.9
79,608
5.8
90,967
6.9
88,707
7.0
70,431
5.0
71,809
5.3
68,717
5.2
70,320
5.5
64,679
4.6
63,905
4.7
34,732
2.6
34,435
2.7
56,665
4.0
57,399
4.2
56,173
4.3
55,810
4.4
48,560
3.4
49,850
3.7
34,257
34,440
47,688
46,526
49,145
47,526
42,081
3.0
3.1
42,927
39,964
2.9
18,975
1.4
15,285
1.2
36,161
2.5
34,794
36,191
34,219
31,246
2.2
30,708
2.3
31,142
2.4
30,595
43,633
28,955
2.1
45,024
39,532
31,426
25,368
1.9
30,414
24,556
26,294
20,950
1.5
2.8
18,102
1.3
19,181
21,995
1.7
23,113
1.8
Multi-Sector Holdings (1)
13,420
0.9
14,003
1.0
0.8
24,968
5,598
0.4
24,141
6,813
0.5
100.0
67
The geographic composition of the Company's investment portfolio is determined by the location of the corporate headquarters of the portfolio company. The following table summarizes the composition of the Company’s portfolio investments by geographic region of the United States and other countries at cost and fair value and as a percentage of the total portfolio as of March 31, 2024 and December 31, 2023 (dollars in thousands):
Geographic Region
United States:
West
451,413
31.9
436,480
32.1
468,917
35.5
464,909
36.5
Northeast
409,086
28.8
398,610
29.2
392,739
29.8
383,008
29.9
South
189,131
194,746
14.3
169,014
12.8
172,746
13.5
Mountain
135,732
9.6
128,827
9.4
118,126
9.0
110,681
Southeast
86,865
84,516
43,878
3.3
42,129
Midwest
84,336
76,810
5.6
64,535
4.9
56,945
4.5
Senior Credit Corp 2022 LLC (1)
13,421
International:
Western Europe
19,930
19,850
22,235
22,400
Canada
30,084
10,019
0.7
28,866
The following table summarizes the composition of the Company’s portfolio investments by investment type at cost and fair value and as a percentage of the total portfolio as of March 31, 2024 and December 31, 2023 (dollars in thousands):
Investment
Secured Loans
1,055,348
74.3
1,010,841
74.1
918,836
69.7
885,299
69.5
279,111
19.7
277,550
20.4
336,934
25.5
336,778
26.4
Warrants
Certain Risk Factors
In the ordinary course of business, the Company manages a variety of risks, including market risk, credit risk and liquidity risk. The Company identifies, measures and monitors risk through various control mechanisms, including investment limits and diversifying exposures and activities across a variety of instruments, markets and counterparties.
Market risk is the risk of potential adverse changes to the value of financial instruments because of changes in market conditions, including as a result of changes in the credit quality of a particular issuer, credit spreads, interest rates, and other movements and volatility in security prices or commodities. In particular, the Company may invest in issuers that are experiencing or have experienced financial or business difficulties (including difficulties resulting from the initiation or prospect of significant litigation or bankruptcy proceedings), which involves significant risks.
The Company manages its exposure to market risk through the use of risk management strategies and various analytical monitoring techniques.
The Company’s investments are generally comprised of securities and other financial instruments or obligations that are illiquid or thinly traded, making purchase or sale of such securities and financial instruments at desired prices or in desired quantities difficult. Furthermore, the sale of any such investments may be possible only at substantial discounts, and it may be extremely difficult to value any such investments accurately.
The Company’s investments consist of growth-stage companies, many of which have relatively limited operating histories and may experience variation in operating results. Many of these companies conduct business in regulated industries and could be affected by changes in government regulations. Most of the Company’s borrowers will need additional capital to satisfy their continuing working capital needs and other requirements, and in many instances, to service the interest and principal payments on the debt.
Note 4. Fair Value of Financial Instruments
ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. The Company accounts for its investments at fair value in accordance with ASC 820. As of March 31, 2024 and December 31, 2023, the Company’s portfolio investments consisted primarily of investments in secured loans and equipment financings. The fair value amounts have been measured as of the reporting date and have not been reevaluated or updated for purposes of these financial statements subsequent to that date. As such, the fair values of these financial instruments subsequent to the reporting date may be different than amounts reported.
In accordance with ASC 820, the Company has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3). See “Note 2 – Summary of Significant Accounting Policies.”
As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).
The fair value determination of each portfolio investment categorized as Level 3 requires one or more of the following unobservable inputs:
The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of the Company’s investments, are (i) earnings before interest, tax, depreciation, and amortization (“EBITDA”) and revenue multiples (both projected and historic), and (ii) volatility assumptions. Significant increases (decreases) in EBITDA and revenue multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. Similarly, significant increases (decreases) in volatility inputs in isolation would result in a significantly higher (lower) fair value assessment. Conversely, significant increases (decreases) in weighted average cost of capital inputs in isolation would result in a significantly lower (higher) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.
The Company’s assets measured at fair value by investment type on a recurring basis as of March 31, 2024 were as follows (in thousands):
Fair Value Measurements at Reporting Date Using
Quoted Prices
Significant
in Active
Other
Markets for
Observable
Unobservable
Identical Assets
Inputs
Measured at
Assets
(Level 1)
(Level 2)
(Level 3)
Net Asset Value(1)
Equipment Financings
1,363
38,567
13,607
17,325
Total Investments at fair value
1,344,283
Escrow Receivable (2)
2,441
25,574
1,346,724
1,378,270
The Company’s assets measured at fair value by investment type on a recurring basis as of December 31, 2023 were as follows (in thousands):
2,326
31,201
15,150
1,268,428
5,556
1,270,869
1,282,382
The methodology for determining the fair value of the Company’s investments is discussed in “Note 2 – Summary of Significant Accounting Policies”. The significant unobservable input used in the fair value measurement of the Company’s escrow receivables is the amount recoverable at the contractual maturity date of the escrow receivable. The following table provides a summary of the significant unobservable inputs used to measure the fair value of the Level 3 portfolio investments as of March 31, 2024.
Fair Value as of
Valuation Techniques/
Weighted
Investment Type
(in thousands)
Methodologies
Inputs (1)
Range
Average (2)
Debt investments
984,939
Discounted Cash Flows
Hypothetical Market Yield
11.4% - 34.6%
16.6
227,760
Cost approximates fair value (6)
n/a
66,298
Scenario Analysis
Probability Weighting of Alternative Outcomes
2.0% - 100%
Debt investment in the JV
Enterprise Value (7)
Equity investments
Market Approach
Revenue Multiple (3)
0.9x - 10.4x
3.2
x
Volatility (5)
43.5% - 102.3%
55.8
Risk-Free Interest Rate
4.3% - 5.0%
3.9
Estimated Time to Exit (in years)
1.0 - 3.8
0.3x - 10.4x
Company Specific Adjustment (4)
38.2% - 119.5%
64.2
4.0% - 5.2%
0.7- 4.6
Total Level 3 Investments
The following table provides a summary of the significant unobservable inputs used to fair value the Level 3 portfolio investments as of December 31, 2023.
858,870
11.6% - 34.6%
17.3
253,250
Transaction Precedent (7)
Transaction Price
97,573
5.0% - 100.0%
Enterprise Value (8)
0.4x - 15.0x
44.2% - 131.3%
62.5
3.0% - 4.8%
1.0 - 4.0
33.3% - 131.3%
68.8
2.9% - 4.8%
1.0 - 4.8
The following table provides a summary of changes in the fair value of the Company’s Level 3 debt, including loans and equipment financings (collectively “Debt”), equity, warrant and escrow receivable portfolio investments for the three months ended March 31, 2024 (in thousands):
Type of Investment
Debt
Escrow Receivable
Fair Value as of December 31, 2023
Purchases, net of deferred fees
235,447
1,100
3,428
239,975
Non-cash conversions (1)
(7
Transfers into/(out of) Level 3 (2)
(28,316
Proceeds from sales and paydowns
(139,892
(314
(140,206
Accretion of OID, EOT, and PIK payments
7,172
Net realized gain/(loss)
4,277
Net change in unrealized appreciation/(depreciation)
(12,374
1,068
4,259
(7,047
Fair Value as of March 31, 2024
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of March 31, 2024
(10,290
(4,963
The following table provides a summary of changes in the fair value of the Company’s Level 3 debt, including loans and equipment financings (collectively “Debt”), equity, and warrant portfolio investments for the year ended December 31, 2023 (in thousands):
Fair Value as of December 31, 2022
1,048,829
13,245
30,989
1,095,504
613,853
4,676
8,670
627,199
Non-cash conversion (1)
538
(17
Transfers into/(out of) of Level 3 (2)
(468,760
(461
(2,705
(471,926
Accretion of OID and EOT payments
32,953
(15,292
(13,546
(28,071
Change in unrealized appreciation/(depreciation)
10,994
10,698
(6,496
15,196
Net change in unrealized appreciation/depreciation on Level 3 investments still held as of December 31, 2023
(8,420
(2,501
(6,987
(17,908
Fair Value of Financial Instruments Carried at Cost
As of March 31, 2024 and December 31, 2023, the carrying value of the KeyBank Credit Facility was approximately $190.0 million and $213.0 million, respectively. The carrying value of the KeyBank Credit Facility as of March 31, 2024 and December 31, 2023 approximates the fair value, which was estimated using a relative market yield approach with Level 3 inputs.
As of March 31, 2024 and December 31, 2023, the carrying value of the 2025 Notes was approximately $181.0 million and $180.5 million, respectively, net of unamortized deferred financing costs of $1.5 million and $2.0 million, respectively. The 2025 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the 2025 Notes as of March 31, 2024 and December 31, 2023 was approximately $183.4 million and $183.4 million, respectively, based on the market closing price of these notes, which trade on the Nasdaq Global Select Market under the symbol “TRINL”.
As of March 31, 2024 and December 31, 2023, the carrying value of the Convertible Notes was approximately $48.9 million and $48.8 million, respectively, net of unamortized deferred financing costs and discount of $1.1 million and $1.2 million, respectively. The Convertible Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s Convertible Notes as of March 31, 2024 and December 31, 2023 was approximately $50.0 million and $50.6 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.
As of March 31, 2024 and December 31, 2023, the carrying value of the 4.375% Notes due 2026 (the “August 2026 Notes”) was approximately $123.6 million and $123.5 million, respectively, net of unamortized deferred financing costs and discount of $1.4 million and $1.5 million, respectively. The August 2026 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s August 2026 Notes as of March 31, 2024, and December 31, 2023, was approximately $104.4 million and $111.5 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.
As of March 31, 2024, and December 31, 2023, the carrying value of the Company’s 4.25% Notes due 2026 (the “December 2026 Notes”) was approximately $74.0 million, and $73.9 million, respectively, net of unamortized
74
deferred financing fees of $1.0 million and $1.1 million, respectively. The December 2026 Notes have a fixed interest rate as discussed in “Note 5 – Borrowings.” The fair value of the Company’s December 2026 Notes as of March 31, 2024 and December 31, 2023 was approximately $62.5 million and $66.8 million, respectively, which was estimated using a relative market yield approach with Level 3 inputs.
As of March 31, 2024, the carrying value of the Company's 7.875% Notes due 2029 (the “March 2029 Notes”) was approximately $111.8 million, net of unamortized deferred financing fees of $3.2 million. The March 2029 Notes have a fixed interest rate as discussed “Note 5 – Borrowings.” The cost of the March 2029 Notes as of March 31, 2024 approximates the fair value, based on the recent funding completed in March 2024. The March 2029 Notes trade on the Nasdaq Global Select Market under the symbol “TRINZ”.
Note 5. Borrowings
On October 27, 2021, TCF, a wholly owned subsidiary of the Company, as borrower, and the Company, as servicer, entered into a credit agreement (as amended, the “KeyBank Credit Agreement”) with the lenders from time-to-time party thereto, KeyBank, as administrative agent and syndication agent, and Wells Fargo, National Association, as collateral custodian and paying agent.
The KeyBank Credit Facility includes a commitment of $350.0 million from KeyBank and other banks and allows the Company, through TCF, to borrow up to $400.0 million. Borrowings under the KeyBank Credit Agreement bear interest at a rate equal to Adjusted Term SOFR plus 2.85%, subject to the number of eligible loans in the collateral pool. The KeyBank Credit Facility provides for a variable advance rate of up to 60% on eligible term loans and up to 64% on eligible equipment finance loans.
The KeyBank Credit Facility includes a three-year revolving period and a two-year amortization period and matures on October 27, 2026, unless extended. Such credit facility is collateralized by all investment assets held by TCF. The KeyBank Credit Agreement contains representations and warranties and affirmative and negative covenants customary for secured financings of this type, including certain financial covenants such as a consolidated tangible net worth requirement and a required asset coverage ratio.
The KeyBank Credit Agreement also contains customary events of default (subject to certain grace periods, as applicable), including but not limited to the nonpayment of principal, interest or fees; breach of covenants; inaccuracy of representations or warranties in any material respect; voluntary or involuntary bankruptcy proceedings; and change of control of the borrower without the prior written consent of KeyBank.
During the three months ended March 31, 2024, the Company borrowed $148.0 million and made repayments of $171.0 million under the KeyBank Credit Facility. The Company incurred approximately $3.6 million of financing costs in connection with the KeyBank Credit Facility that were capitalized and deferred using the straight-line method over the life of the facility. As of March 31, 2024, and December 31, 2023, unamortized deferred financing costs related to the KeyBank Credit Facility were $2.0 million and $2.1 million, respectively. As of March 31, 2024 and December 31, 2023, the Company had a borrowing availability of approximately $160.0 million and $137.0 million, respectively.
The summary information regarding the KeyBank Credit Facility is as follows (dollars in thousands):
Stated interest expense
4,843
3,868
206
Total interest and amortization of deferred financing costs
5,049
4,072
Weighted average effective interest rate
8.3
Weighted average outstanding balance
221,086
197,111
2025 Notes
Concurrent with the completion of the Private Common Stock Offering, on January 16, 2020, the Company completed its offering of $105.0 million in aggregate principal amount of the unsecured 2025 Notes in reliance upon the available exemptions from the registration requirements of the Securities Act (the “144A Note Offering”). Keefe, Bruyette & Woods, Inc. (“KBW”), as the initial purchaser, exercised in full its option to purchase or place additional 2025 Notes and on January 29, 2020, the Company issued and sold an additional $20.0 million in aggregate principal amount of the 2025 Notes. As a result, the Company issued and sold a total of $125.0 million in aggregate principal amount of the 2025 Notes pursuant to the 144A Note Offering.
Concurrent with the closing of the 144A Note Offering, on January 16, 2020, the Company entered into a registration rights agreement for the benefit of the purchasers of the 2025 Notes in the 144A Note Offering. Pursuant to the terms of this registration rights agreement, the Company filed with the SEC a registration statement, which was initially declared effective on October 20, 2020, registering the public resale of the 2025 Notes by the holders thereof that elected to include their 2025 Notes in such registration statement.
The 2025 Notes were issued pursuant to an Indenture dated as of January 16, 2020 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (together with its successor in interest, U.S. Bank Trust Company, National Association, the “Trustee”), and a First Supplemental Indenture, dated as of January 16, 2020 (the “First Supplemental Indenture” and together with the Base Indenture, the “2025 Notes Indenture”), between the Company and the Trustee. The 2025 Notes mature on January 16, 2025 (the “Maturity Date”), unless repurchased or redeemed in accordance with their terms prior to such date. The 2025 Notes are redeemable, in whole or in part, at any time, or from time to time, at the Company’s option, on or after January 16, 2023 at a redemption price equal to 100% of the outstanding principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of redemption. The holders of the 2025 Notes do not have the option to have the notes repaid or repurchased by the Company prior to the Maturity Date.
On July 22, 2022, the Company issued $50.0 million in aggregate principal amount of the 2025 Notes in an additional issuance of such 2025 Notes. On July 27, 2022, the underwriters exercised, in full, their option to purchase from the Company an additional $7.5 million in aggregate principal amount of the 2025 Notes solely to cover over-allotments in accordance with the Underwriting Agreement. The 2025 Notes issued pursuant to this offering are treated as a single series with the existing 2025 Notes under the 2025 Notes Indenture (the “Existing 2025 Notes”) and have the same terms as the Existing 2025 Notes (other than issue date and issue price). The 2025 Notes have the same CUSIP number and are fungible and rank equally. Following this additional issuance of the 2025 Notes, the outstanding aggregate principal amount of the 2025 Notes is $182.5 million.
In connection with the additional issuance of the 2025 Notes, the 2025 Notes began trading on the Nasdaq Global Select Market under the symbol “TRINL” on July 29, 2022.
The 2025 Notes bear interest at a fixed rate of 7.00% per year payable quarterly on March 15, June 15, September 15, and December 15 of each year, commencing on March 15, 2020. The 2025 Notes are direct, general unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated.
Aggregate offering costs in connection with the 2025 Notes issuance, including the underwriters' discount and commissions, were approximately $7.8 million, which were capitalized and deferred. As of March 31, 2024 and December 31, 2023, unamortized deferred financing costs related to the 2025 Notes were $1.5 million and $2.0 million, respectively.
The components of interest expense and related fees for the 2025 Notes are as follows (in thousands):
3,194
3,692
3,698
8.1
182,500
For additional information regarding the 2025 Notes, see “Note 14. Subsequent Events.”August 2026 Notes
On August 24, 2021, the Company issued and sold $125.0 million in aggregate principal amount of its unsecured August 2026 Notes under its shelf Registration Statement on Form N-2. The August 2026 Notes were issued pursuant to the Base Indenture and a Third Supplemental Indenture, dated as of August 24, 2021 (together with the Base Indenture, the “August 2026 Notes Indenture”), between the Company and the Trustee. The August 2026 Notes mature on August 24, 2026, unless repurchased or redeemed in accordance with their terms prior to such date. The August 2026 Notes are redeemable, in whole or in part, at any time, or from time to time, at the Company’s option, at a redemption price equal to the greater of (1) 100% of the principal amount of the August 2026 Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the August 2026 Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest to the redemption date; provided, however, that if the Company redeems any August 2026 Notes on or after July 24, 2026, the redemption price for the August 2026 Notes will be equal to 100% of the principal amount of the August 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, if a change of control repurchase event (as defined in the August 2026 Notes Indenture) occurs prior to the maturity date of the August 2026 Notes or the Company’s redemption of all outstanding August 2026 Notes, the Company will be required, subject to certain conditions, to make an offer to the holders thereof to repurchase for cash some or all of the August 2026 Notes at a repurchase price equal to 100% of the principal amount of the August 2026 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The August 2026 Notes bear interest at a fixed rate of 4.375% per year payable semiannually on February 15 and August 15 of each year, commencing on February 15, 2022. The August 2026 Notes are direct, general unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated.
Aggregate offering costs in connection with the August 2026 Notes issuance, including the underwriters’ discount and commissions, were approximately $2.9 million, which were capitalized and deferred. As of
March 31, 2024 and December 31, 2022, unamortized deferred financing costs related to the August 2026 Notes were $1.4 million and $1.5 million, respectively.
The components of interest expense and related fees for the 2026 Notes are as follows (in thousands):
1,367
1,511
4.8
125,000
March 2029 Notes
On March 28, 2024, the Company issued and sold $115.0 million in aggregate principal amount of its unsecured March 2029 Notes under its shelf Registration Statement on Form N-2, which amount includes the underwriters' exercise, in full, of their option to purchase an additional $15.0 million in aggregate principal amount of the March 2029 Notes.
The March 2029 Notes were issued pursuant to the Base Indenture and a Fifth Supplemental Indenture, dated as of March 28, 2024 (together with the Base Indenture, the “March 2029 Notes Indenture”), between the Company and the Trustee. The March 2029 Notes mature on March 30, 2029, unless repurchased and redeemed in accordance with their terms prior to such date. The March 2029 Notes are redeemable, in whole or in part, at any time, or from time to time, at the Company's option on or after March 30, 2026 upon not less than 30 days’ nor more than 60 days’ written notice prior to the date fixed for redemption thereof, at a redemption price equal to 100% of the outstanding principal amount of the March 2029 Notes, plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption. In addition, if a change of control repurchase event (as defined in the March 2029 Notes Indenture) occurs prior to maturity, unless the Company has exercised its right to redeem the March 2029 Notes in full, holders will have the right, at their option, to require the Company to repurchase for cash some or all of the March 2029 Notes at a repurchase price equal to 100% of the principal amount of the March 2029 Notes being repurchased, plus accrued and unpaid interest to, but not including, the repurchase date.
The March 2029 Notes bear interest at a fixed rate of 7.875% per year payable quarterly on March 30, June 30, September 30 and December 30, commencing on June 30, 2024. The March 2029 Notes are direct, general unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated.
Aggregate offering costs in connection with the March 2029 Notes issuance, including the underwriters’ discount and commissions, were approximately $3.2 million, which were capitalized and deferred. As of March 31, 2024, unamortized deferred financing costs related to the March 2029 Notes were $3.2 million.
The components of interest expense and related fees for the March 2029 Notes are as follows (in thousands):
8.5
3,791
78
December 2026 Notes
On December 15, 2021, the Company issued and sold $75.0 million in aggregate principal amount of its unsecured December 2026 Notes under its shelf Registration Statement on Form N-2. The December 2026 Notes were issued pursuant to the Base Indenture and a Fourth Supplemental Indenture, dated as of December 15, 2021 (together with the Base Indenture, the “December 2026 Notes Indenture”), between the Company and the Trustee. The December 2026 Notes mature on December 15, 2026, unless repurchased or redeemed in accordance with their terms prior to such date. The December 2026 Notes are redeemable, in whole or in part, at any time, or from time to time, at the Company’s option, at a redemption price equal to the greater of (1) 100% of the principal amount of the December 2026 Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the December 2026 Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest to the redemption date; provided, however, that if the Company redeems any December 2026 Notes on or after November 15, 2026, the redemption price for the December 2026 Notes will be equal to 100% of the principal amount of the December 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, if a change of control repurchase event (as defined in the December 2026 Notes Indenture) occurs prior to the maturity date of the December 2026 Notes or the Company’s redemption of all outstanding December 2026 Notes, the Company will be required, subject to certain conditions, to make an offer to the holders thereof to repurchase for cash some or all of the December 2026 Notes at a repurchase price equal to 100% of the principal amount of the December 2026 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The December 2026 Notes bear interest at a fixed rate of 4.25% per year payable semiannually on June 15 and December 15 of each year, commencing on June 15, 2022. The December 2026 Notes are direct, general unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated.
Aggregate offering costs in connection with the December 2026 Notes issuance, including the underwriters’ discount and commissions, were approximately $1.9 million, which were capitalized and deferred. As of March 31, 2024 and December 31, 2023, unamortized deferred financing costs related to the December 2026 Notes were $1.0 million and $1.1 million, respectively.
The components of interest expense and related fees for the December 2026 Notes are as follows (in thousands):
797
890
75,000
6.00% Convertible Notes due 2025
On December 11, 2020, the Company completed a private offering (the “Private Convertible Note Offering”) of $50.0 million in aggregate principal amount of its unsecured Convertible Notes in reliance upon the available exemptions from the registration requirements of the Securities Act. KBW acted as the initial purchaser and placement agent in connection with the Private Convertible Note Offering pursuant to a purchase/placement agreement dated December 4, 2020, by and between the Company and KBW.
The Convertible Notes were issued pursuant to the Base Indenture and a Second Supplemental Indenture, dated as of December 11, 2020 (the “Second Supplemental Indenture” and together with the Base Indenture, the
“Convertible Notes Indenture”), between the Company and the Trustee. Concurrent with the closing of the Convertible Note Offering, on December 11, 2020, the Company entered into a registration rights agreement for the benefit of the holders of the Convertible Notes and the shares of common stock issuable upon conversion thereof. Aggregate offering costs in connection with the Convertible Note Offering, including the initial purchaser and placement agent discount and commissions, were approximately $1.9 million, which were capitalized and deferred.
The Convertible Notes bear interest at a fixed rate of 6.00% per year, subject to additional interest upon certain events, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2021. If an investment grade rating is not maintained with respect to the Convertible Notes, additional interest of 0.75% per annum will accrue on the Convertible Notes until such time as the Convertible Notes have received an investment grade rating of “BBB-” (or its equivalent) or better. The rating remained at investment grade as of March 31, 2024. The Convertible Notes mature on December 11, 2025 (the “Convertible Notes Maturity Date”), unless earlier converted or repurchased in accordance with their terms.
Holders may convert their Convertible Notes, at their option, at any time on or prior to the close of business on the business day immediately preceding the Convertible Notes Maturity Date. The conversion rate was initially 66.6667 shares of the Company’s common stock, per $1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of approximately $15.00 per share of common stock). Effective immediately after the close of business on March 28, 2024, the conversion rate changed to 78.0543 shares of the Company’s common stock, per $1,000 principal amount of the Convertible Notes (equivalent to a conversion price of approximately $12.81 per share of common stock) as a result of a certain cash dividend of the Company. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events, further described in the Convertible Note Indenture, that occur prior to the Convertible Notes Maturity Date, the Company will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, per $1,000 principal amount of the Convertible Notes, equal to the then existing conversion rate.
At the Company’s option, it may cause holders to convert all or a portion of the then outstanding principal amount of the Convertible Notes plus accrued but unpaid interest, at any time on or prior to the close of business on the business day immediately preceding the Convertible Notes Maturity Date, if the closing sale price of the Company’s common stock for any 30 consecutive trading days exceeds 120% of the conversion price, as may be adjusted. Upon such conversion, the Company will pay or deliver, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at the Company’s election, per $1,000 principal amount of the Convertible Notes, equal to the then existing conversion rate, and a forced conversion make-whole payment (as defined in the Second Supplemental Indenture), if any, in cash. Otherwise, the Company may not redeem the Convertible Notes at its option prior to maturity.
In addition, if the Company undergoes a fundamental change (as defined in the Second Supplemental Indenture), holders may require the Company to repurchase for cash all or part of such holders’ Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Convertible Notes are direct unsecured obligations of the Company and rank pari passu, or equal in right of payment, with all of the Company’s existing and future unsecured indebtedness or other obligations that are not so subordinated, and senior in right of payment to all of the Company’s future indebtedness or other obligations that are expressly subordinated, or junior, in right of payment to the Convertible Notes.
The Convertible Notes are accounted for in accordance with ASC 470-20, Debt Instruments with Conversion and Other Options. In accounting for the Convertible Notes, the Company estimated at the time of issuance that the values of the debt and the embedded conversion feature of the Convertible Notes were approximately 99.1% and 0.9%, respectively. The original issue discount of 0.9%, or approximately $0.5 million, attributable to the conversion feature of the Convertible Notes was recorded in “capital in excess of par value” in the Consolidated Statements of Assets and Liabilities as of December 31, 2020.
The components of the carrying value of the Convertible Notes were as follows (in thousands):
Principal amount of debt
Unamortized debt financing cost
(638
(1,015
Original issue discount, net of accretion
(446
(707
Carrying value of Convertible Notes
48,278
The components of interest expense and related fees for the Convertible Notes were as follows (in thousands):
Amortization of deferred financing costs and original issue discount
Total interest and amortization of deferred financing costs and original issue discount
916
910
7.3
As of March 31, 2024 and December 31, 2023, the Company was in compliance with the terms of the KeyBank Credit Agreement, the 2025 Notes Indenture, the August 2026 Notes Indenture, the December 2026 Notes Indenture, the March 2029 Notes Indenture and the Convertible Notes Indenture.
Note 6. Commitments and Contingencies
Unfunded Commitments
The Company’s commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans or equipment financings to the Company’s portfolio companies. A portion of these unfunded contractual commitments as of March 31, 2024 and December 31, 2023 are generally dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the Company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments as of March 31, 2024 and December 31, 2023 includes only those commitments that are available at the request of the portfolio company and are unencumbered by milestones or additional lending provisions. As of March 31, 2024 and December 31, 2023, the Company had unfunded commitments of $8.0 million and $10.4 million, respectively, which represented the Company's uncalled capital commitment to the JV.
The Company did not have any other off-balance sheet financings or liabilities as of March 31, 2024 or December 31, 2023. The Company will fund its unfunded commitments, if any, from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under its KeyBank Credit Facility) and maintains adequate liquidity to fund its unfunded commitments through these sources.
In the normal course of business, the Company enters into contracts that provide a variety of representations and warranties, and general indemnifications. Such contracts include those with certain service providers, brokers and trading counterparties. Any exposure to the Company under these arrangements is unknown as it would involve future claims that may be made against the Company; however, based on the Company’s experience, the risk of loss is remote and no such claims are expected to occur. As such, the Company has not accrued any liability in connection with such indemnifications.
Leases
ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”) requires that a lessee evaluate its leases to determine whether they should be classified as operating or finance leases. The Company identified significant operating leases for its headquarters in Phoenix, AZ and office space in San Diego, CA. The lease for the Company's Phoenix headquarters commenced on July 10, 2021, and was amended on October 31, 2023 to (i) include additional office space and (ii) extend the term of the lease through May 31, 2031. As of March 31, 2024, the remaining lease term for the Phoenix headquarters was 7.2 years. The lease for the San Diego office commenced March 10, 2023, and expires on January 31, 2026. As of March 31, 2024, the remaining lease term for the San Diego office was 1.8 years.
The total lease expense incurred for the three months ended March 31, 2024 and 2023 was $0.3 million and $0.1 million, respectively. As of March 31, 2024 and December 31, 2023, the right of use assets related to the office operating leases were $5.3 million and $5.3 million, respectively, and the lease liabilities were $5.5 million and $5.4 million, respectively. The discount rates determined for the Phoenix headquarters and San Diego office leases were 8.66% and 7.64%, respectively.
The following table shows future minimum payments under the Company’s operating leases as of March 31, 2024 (in thousands):
For the Years Ended December 31,
2025
1,108
2026
943
2027
950
2028
974
Thereafter
2,421
7,139
The Company may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to seek to impose liability on the Company in connection with the activities of its portfolio companies. As of March 31, 2024, there are no material legal matters or material litigation pending of which the Company is aware.
Note 7. Stockholders' Equity
The Company authorized 200,000,000 shares of its common stock with a par value of $0.001 per share. On September 27, 2019, the Company was initially capitalized by the issuance of 10 shares of its common stock for an aggregate purchase price of $150 to its sole stockholder.
Private Common Stock Offerings
On January 16, 2020, the Company completed the Private Common Stock Offering in reliance upon the available exemptions from the registration requirements of the Securities Act. As a result, the Company issued and sold a total of 7,000,000 shares of its common stock for aggregate net proceeds of approximately $105.0 million. The related over-allotment option was exercised in full on January 29, 2020, pursuant to which the Company issued and sold an additional 1,333,333 shares of its common stock for gross proceeds of approximately $20.0 million. As a result, the Company issued and sold a total of 8,333,333 shares of its common stock pursuant to the Private Common Stock Offering for aggregate net proceeds of approximately $114.4 million, net of offering costs of approximately $10.6 million.
Concurrent with the closing of the Private Common Stock Offering, on January 16, 2020, the Company entered into a registration rights agreement for the benefit of the purchasers of shares of its common stock in such offering and the certain of the investors in the Legacy Funds (the “Legacy Investors”) that received shares of its common stock in connection with the Formation Transactions that were not the Company’s directors, officers and
82
affiliates. Pursuant to the terms of this registration rights agreement, the Company no longer has any registration obligations with respect to such shares because (i) such shares may be sold by any such stockholder in a single transaction without registration pursuant to Rule 144 under the Securities Act, (ii) the Company has been subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, for a period of at least 90 days and is current in the filing of all such required reports and (iii) such shares have been listed for trading on the Nasdaq Global Select Market.
Formation Transactions
On January 16, 2020, immediately following the initial closings of the Private Offerings, the Company used the proceeds from the Private Offerings to complete the Formation Transactions, pursuant to which the Company acquired the Legacy Funds and Trinity Capital Holdings. As consideration for the Legacy Funds, the Company issued 9,183,185 shares of common stock at $15.00 per share for a total value of approximately $137.7 million and paid approximately $108.7 million in cash to certain of the Legacy Investors. As consideration for all of the equity interests in Trinity Capital Holdings, the Company issued 533,332 shares of its common stock at $15.00 per share for a total value of approximately $8.0 million and paid approximately $2.0 million in cash.
Initial Public Offering
On February 2, 2021, the Company completed its initial public offering of 8,006,291 shares of common stock at a price of $14.00 per share, inclusive of the underwriters’ option to purchase additional shares, which was exercised in full. The Company’s common stock began trading on the Nasdaq Global Select Market on January 29, 2021, under the symbol “TRIN.” Proceeds from this offering were primarily used to pay down a portion of the Company's existing indebtedness outstanding under the Credit Suisse Credit Facility.
ATM Program
On November 9, 2021, the Company established the “ATM Program”, pursuant to which the Company can issue and sell, from time to time, up to $50.0 million in aggregate offering price of shares of its common stock by any method permitted by law and deemed to be part of an “at-the-market” offering (as defined in Rule 415 under the Securities Act). On December 1, 2023, the Company (i) increased the maximum aggregate offering price of shares of its common stock to be sold through the ATM Program by $145.7 million and (ii) added one additional sales agent to the ATM Program.
The Company generally uses net proceeds from the ATM Program to make investments in accordance with its investment objective and investment strategy and for general corporate purposes.
During the three months ended March 31, 2024, the Company issued and sold 1,652,632 shares of its common stock at a weighted-average price of $14.84 per share and raised $24.3 million of net proceeds after deducting commissions to the sales agents on shares sold under the ATM Program.
During the year ended December 31, 2023, the Company issued and sold 4,976,061 shares of its common stock at a weighted-average price of $14.53 per share and raised $71.1 million of net proceeds after deducting commissions to the sales agent on shares sold under the ATM Program.
Stock Repurchase Program
On November 14, 2022, the Company and its Board authorized a program for the purpose of repurchasing up to $25.0 million of the Company's common stock (the “Repurchase Program”). Under the Repurchase Program, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time, provided that the Company complies with the prohibitions under its Rule 38a-1 Compliance Manual and Rule 17j-1 Code of Ethics and the guidelines specified in Rule 10b-18 of the Securities Exchange Act of 1934, as amended, including certain price, market, volume, and timing constraints. In addition, any repurchases will be conducted in accordance with the 1940 Act, as amended. The Repurchase Program was not renewed by the Board and expired on November 11, 2023.
The Company did not repurchase outstanding common stock during the three months ended March 31, 2024. During the year ended December 31, 2023, the Company repurchased 91,691 shares of its outstanding common stock at a weighted average price of $10.91. The repurchased shares were immediately canceled and thus Trinity Capital holds no treasury stock.
Equity Offerings
On April 7, 2022, the Company issued 2,754,840 shares of the Company’s common stock, par value $0.001 per share, at a public offering price of $18.15 per share, resulting in net proceeds to the Company of approximately $47.9 million, after deducting discounts and commissions and offering expenses. In addition, the underwriters exercised their option to purchase an additional 413,226 shares of common stock, resulting in additional net proceeds to the Company of $7.2 million, after deducting discounts, commissions and offering expenses.
On August 18, 2022, the Company issued 3,587,736 shares of the Company’s common stock, par value $0.001 per share, at a public offering price of $15.33 per share, resulting in net proceeds to the Company of approximately $53.3 million, after deducting discounts and commissions and offering expenses. In addition, the underwriters exercised their option in part to purchase an additional 132,168 shares of common stock, resulting in additional net proceeds to the Company of $2.0 million, after deducting discounts, commissions and offering expenses.
On August 8, 2023, the Company issued 5,190,312 shares of the Company’s common stock, par value $0.001 per share, at a public offering price of $14.45 per share, resulting in net proceeds to the Company of approximately $72.5 million, after deducting discounts and commissions and offering expenses. In addition, the underwriters exercised their option in part to purchase an additional 500,000 shares of common stock, resulting in additional net proceeds to the Company of $6.9 million, after deducting discounts, commissions and offering expenses.
Distribution Reinvestment Plan
The Company’s amended and restated distribution reinvestment plan (“DRIP”) provides for the reinvestment of distributions in the form of common stock on behalf of its stockholders, unless a stockholder has elected to receive distributions in cash. As a result, if the Company declares a cash distribution, its stockholders who have not “opted out” of the DRIP by the opt out date will have their cash distribution automatically reinvested into additional shares of the Company’s common stock. The share requirements of the DRIP may be satisfied through the issuance of common shares or through open market purchases of common shares by the DRIP plan administrator. Newly issued shares will be valued based upon the final closing price of the Company’s common stock on the valuation date determined for each distribution by the Board.
The Company’s DRIP is administered by its transfer agent on behalf of the Company’s record holders and participating brokerage firms. Brokerage firms and other financial intermediaries may decide not to participate in the Company’s DRIP but may provide a similar distribution reinvestment plan for their clients. During the three months ended March 31, 2024, the Company issued 23,456 shares of common stock for a total of approximately $0.3 million under the DRIP. During the year ended December 31, 2023, the Company issued 165,962 shares of common stock for a total of approximately $2.2 million under the DRIP.
The following table summarizes distributions declared and/or paid by the Company since inception:
DeclarationDate
Type
RecordDate
PaymentDate
Per ShareAmount
May 7, 2020
Quarterly
May 29, 2020
June 5, 2020
August 10, 2020
August 21, 2020
November 9, 2020
December 4, 2020
December 30, 2020
January 15, 2021
March 23, 2021
March 31, 2021
April 16, 2021
0.28
June 15, 2021
July 15, 2021
September 13, 2021
December 16, 2021
January 14, 2022
March 15, 2022
April 15, 2022
0.40
Supplemental
0.15
0.42
September 15, 2022
0.45
December 15, 2022
December 30, 2022
January 13, 2023
0.46
March 14, 2023
0.47
June 14, 2023
June 30, 2023
0.48
0.05
September 13, 2023
September 30, 2023
December 14, 2023
0.50
March 14, 2024
April 15, 2024
0.51
7.17
Note 8. Equity Incentive Plans
2019 Long Term Incentive Plan
The Company’s Board adopted and approved the 2019 Trinity Capital Inc. Long Term Incentive Plan (the “2019 Long Term Incentive Plan”) on October 17, 2019 and the Company’s stockholders approved the 2019 Long Term Incentive Plan on June 17, 2021 at the Company’s 2021 Annual Meeting of Stockholders, with the 2019 Long Term Incentive Plan becoming effective on June 17, 2021. Under the 2019 Long Term Incentive Plan, awards of restricted stock, incentive stock options and non-statutory stock options (together with incentive stock options, “Options”) may be granted to certain of the Company’s executive officers, employee directors and other employees (collectively, the “Employee Participants”) in accordance with the SEC exemptive order the Company received on May 27, 2021 (the “SEC Exemptive Order”). While the 2019 Long Term Incentive Plan contemplates grants of restricted stock, restricted stock units, Options, dividend equivalent rights, performance awards and other stock-based awards to the Employee Participants, the Company only sought and received exemptive relief from the SEC pursuant to the SEC Exemptive Order to grant awards of restricted stock and Options. As a result, the Company will only grant awards of such securities under the 2019 Long Term Incentive Plan. The Employee Participants will have the right to receive dividends on such awarded restricted stock, unless and until the restricted stock is forfeited.
Subject to certain adjustments under the 2019 Long Term Incentive Plan, the maximum aggregate number of shares of the Company’s common stock authorized for issuance under the 2019 Long Term Incentive Plan is 3,600,000 shares. The 2019 Long Term Incentive Plan is to be administered by the Compensation Committee of the Board (the “Compensation Committee”) in accordance with the terms of the 2019 Long Term Incentive Plan. The 2019 Long Term Incentive Plan will terminate on the day prior to the tenth anniversary of the date it was initially adopted by the Board, unless terminated sooner by action of the Board or the Compensation Committee, as applicable.
85
For additional information regarding the 2019 Long Term Incentive Plan, please refer to the Company’s Current Report on Form 8-K filed with the SEC on June 23, 2021, and the Company’s definitive proxy statement filed with the SEC on April 26, 2024. The following table summarizes issuances, vesting, and retirement of shares under the plan as well as the fair value of granted stock for the three months ended March 31, 2024 and 2023 (dollars in thousands).
Weighted Average
Grant Date Fair Value
Unvested as of Beginning of Period
1,326,891
14.56
1,041,721
16.98
Shares Granted
14.80
12.85
Shares Vested and Forfeited
(287,793
14.19
(217,411
17.12
Unvested as of Ending of Period
1,792,149
14.72
1,607,410
14.95
Fair Value of Granted Stock
10,063
Compensation cost recognized
2,391
1,716
As of March 31, 2024, there was approximately $25.8 million of total unrecognized compensation costs related to the non-vested restricted stock awards. These costs are expected to be recognized over a weighted average period of 3.1 years. As of December 31, 2023, there was approximately $17.1 million of total unrecognized compensation costs related to non-vested restricted stock awards. These costs were expected to be recognized over a weighted average period of 2.5 years.
2019 Restricted Stock Plan
The Company’s Board adopted and approved the Trinity Capital Inc. 2019 Non-Employee Director Restricted Stock Plan (the “2019 Restricted Stock Plan”) on October 17, 2019 and the Company’s stockholders approved the 2019 Restricted Stock Plan on June 17, 2021 at the Company’s 2021 Annual Meeting of Stockholders. The 2019 Restricted Stock Plan became effective on June 17, 2021 and provides for grants of restricted stock awards (“Non-Employee Director Awards”) to the Company’s non-employee directors (the “Non-Employee Director Participants”), which are directors who are not “interested persons” of the Company (as such term is defined in Section 2(a)(19) of the 1940 Act) in accordance with the SEC Exemptive Order. The Non-Employee Director Participants will have the right to receive dividends on such awarded restricted stock, unless and until the restricted stock is forfeited.
Subject to certain adjustments under the 2019 Restricted Stock Plan, the total number of shares of the Company’s common stock that may be subject to Non-Employee Director Awards is 60,000 shares. The 2019 Restricted Stock Plan is to be administered by the Compensation Committee, subject to the discretion of the Board. The 2019 Restricted Stock Plan will terminate on the day prior to the tenth anniversary of the date it was approved by the Company’s stockholders, unless terminated sooner by action of the Board.
For additional information regarding the 2019 Restricted Stock Plan, please refer to the Company’s Current Report on Form 8-K, filed with the SEC on June 23, 2021, and the Company’s definitive proxy statement filed with the SEC on April 26, 2024. The following table summarizes issuances, vesting, and retirement of shares under the plan as well as the fair value of granted stock for the three months ended March 31, 2024 and 2023 (dollars in thousands).
Unvested as of Beginning of Period,
13.16
13,540
14.77
Unvested as of Ending of Period,
As of March 31, 2024, there was less than $0.1 million of total unrecognized compensation costs related to non-vested restricted stock awards. These costs are expected to be recognized over a three-month period. As of December 31, 2023, there was approximately $0.1 million of total unrecognized compensation costs related to non-vested restricted stock awards. These costs are expected to be recognized over a six-month period.
Note 9. Earnings Per Share
The following table sets forth the computation of the basic and diluted earnings per common share for the three months ended March 31, 2024 and 2023 (in thousands except shares and per share information):
Earnings per common share - basic
Numerator for basic earnings per share
Denominator for basic weighted average shares
Earnings/(Loss) per common share - basic
Earnings per common share - diluted
Numerator for increase in net assets per share
Adjustment for interest expense, fees, and deferred financing costs on Convertible Notes
Numerator for diluted earnings per share
15,424
23,396
Adjustment for dilutive effect of Convertible Notes
3,847,265
3,666,795
Denominator for diluted weighted average shares
Earnings/(Loss) per common share - diluted
In certain circumstances, at the Company's election, the Convertible Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, which can be dilutive to common stockholders. Diluted earnings (loss) available to each share of common stock outstanding during the reporting period included any additional shares of common stock that would be issued if all potentially dilutive securities were exercised. In accordance with ASU 2020-06, the Company is required to disclose diluted EPS using the if-converted method that assumes conversion of convertible securities at the beginning of the reporting period and is intended to show the maximum dilution effect to common stockholders regardless of how the conversion can occur.
Note 10. Income Taxes
The Company has elected to be treated, currently qualifies, and intends to continue to qualify annually as, a RIC under Subchapter M of the Code for U.S. federal tax purposes. In order to maintain its treatment as a RIC, the Company is generally required to distribute at least annually to its stockholders at least the sum of 90% of its investment company taxable income (which generally includes its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its net tax-exempt income (if
any). The Company generally will not be subject to U.S. federal income tax on these distributed amounts, but will pay U.S. federal income tax at corporate rates on any retained amounts.
The amount of taxable income to be paid out as a distribution is determined by the Board each quarter and is generally based upon the annual earnings estimated by management of the Company. Net capital gains, if any, are distributed at least annually, although the Company may decide to retain all or some of those capital gains for investment and pay U.S. federal income tax at corporate rates on those retained amounts. If the Company chooses to do so, this generally will increase expenses and reduce the amount available to be distributed to stockholders. In the event the Company’s taxable income (including any net capital gains) for a fiscal year falls below the amount of distributions declared and paid with respect to that year, however, a portion of the total amount of those distributions may be deemed a return of capital for tax purposes to the Company’s stockholders.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Differences may be permanent or temporary in nature. Permanent differences are reclassified among capital accounts in the financial statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
For the three months ended March 31, 2024 and 2023, $0.6 million and $0.6 million, respectively, was recorded for U.S. federal excise tax.
The following table sets forth the tax cost basis and the estimated aggregate gross unrealized appreciation and depreciation from investments for federal income tax purposes as of March 31, 2024 and December 31, 2023 (in thousands):
Tax Cost of Investments (1)
1,431,239
1,325,006
Unrealized appreciation
42,537
36,468
Unrealized depreciation
(97,947
(81,534
Net unrealized appreciation/(depreciation) from investments
(55,410
(45,066
Note 11. Financial Highlights
The following presents financial highlights (in thousands except share and per share information):
Per Share Data: (1)
Net asset value, beginning of period
13.15
Net investment income
Net realized and unrealized gains/(losses) on investments (2)
(0.23
0.09
Offering costs
(0.01
Effect of shares issued and repurchased (3)
(0.10
(0.25
Distributions (4)
(0.51
(0.47
Total increase/(decrease) in net assets
(0.31
(0.08
Net asset value, end of period
13.07
Shares outstanding, end of period
Weighted average shares outstanding
Total return based on net asset value (5)(9)
Total return based on market value (6)(9)
22.3
Ratio/Supplemental Data:
Per share market value at end of period
14.68
12.73
Net assets, end of period
Ratio of total expenses to average net assets (10)
16.4
19.4
Ratio of net investment income to average net assets (10)
16.3
16.9
Ratio of interest and credit facility expenses to average net assets (10)
7.9
9.7
Portfolio turnover rate (7)(9)
Asset coverage ratio (8)
184.9
176.2
89
Senior Securities
Information about the Company’s senior securities (including debt securities and other indebtedness) is shown in the following table as of March 31, 2024, and December 2023, 2022, 2021 and 2020. No senior securities were outstanding as of December 31, 2019.
Class and Period
Total Amount Outstanding Exclusive of TreasurySecurities (1) (in thousands)
Asset Coverage per Unit (2)
Involuntary Liquidating Preference per Unit (3)
Average Market Value per Unit (4)
Credit Suisse Credit Facility
March 31, 2024 (Unaudited)
December 30, 2023(5)
December 31, 2022(5)
1,958
135,000
1,770
1,849
1,947
187,500
1,741
81,000
1,011
Convertible Notes
August 2026 Notes
115,000
737,500
645,500
620,000
466,000
90
Note 12. Related Party Transactions
During the three months ended March 31, 2024 and the year ended December 31, 2023, certain related parties received distributions from the Company relating to their shares held. Refer to “Note 7 – Stockholder’s Equity” for further details on the Company’s DRIP and the distributions declared. During the three months ended March 31, 2024 and the year ended December 31, 2023, the Company’s directors and executive officers and certain employees received restricted stock awards under the 2019 Long Term Incentive Plan and the 2019 Restricted Stock Plan. Refer to “Note 8 – Equity Incentive Plans” for further details on the Company’s stock-based compensation plans.
The Company has entered into indemnification agreements with its directors and executive officers. The indemnification agreements are intended to provide the Company’s directors and executive officers the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that the Company shall indemnify the director or executive officer who is a party to the agreement, or an “Indemnitee,” including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.
The Company and its executives and directors are covered by directors and officers insurance. In addition, each of our directors and officers have entered into an indemnification agreement with us pursuant to which our directors and officers are indemnified by us to the maximum extent permitted by Maryland law subject to the restrictions of the 1940 Act.
On December 5, 2022, the Company and the JV Partner formed an unconsolidated joint venture to co-invest with the Company. Refer to “Note 1 – Organization and Basis of Presentation” for further details on the Company’s investment in the JV.
Note 13. Recent Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This change is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss and assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM“), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures and providing new disclosure requirements for entities with a single reportable segment, among other new disclosure requirements. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance with respect to the consolidated financial statements and disclosures.
Note 14. Subsequent Events
The Company’s management evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. Except as noted below, there have been no subsequent events that occurred during such period that would require recognition or disclosure.
On April 16, 2024, the Company caused notice to be issued to the holders of its 2025 Notes regarding the Company’s exercise of its option to redeem a portion of the issued and outstanding 2025 Notes. The Company will redeem $30.0 million in aggregate principal amount of the $182.5 million in aggregate principal amount of outstanding 2025 Notes on May 17, 2024 (the “Redemption Date”). The 2025 Notes will be redeemed at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from March 15, 2024, to, but excluding, the Redemption Date.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Except where the context suggests otherwise, the terms “we,” “us,” “our,” and “the Company” refer to Trinity Capital Inc. and its consolidated subsidiaries. The information contained in this section should be read in conjunction with our consolidated financial statements and related notes thereto appearing elsewhere in this Quarterly Report on Form 10‑Q.
Forward-Looking Statements
This quarterly report contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors discussed under Item 1A. “Risk Factors” of Part II of this quarterly report and Item 1A. "Risk Factors" of Part I of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on March 6, 2024, including but not limited to the following:
Additionally, there may be other risks that are otherwise described from time to time in the reports that we file with the SEC. Any forward-looking statements in this report should be considered in light of various important factors, including the risks and uncertainties listed above, as well as others. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this quarterly report. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Because we are an investment company, the forward-looking statements and projections contained in this quarterly report are excluded from the safe harbor protections provided by Section 27A(b)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995).
Overview
We are a specialty lending company providing debt, including loans and equipment financings, to growth-stage companies, including venture capital-backed companies and companies with institutional equity investors. We are an internally managed, closed-end, non-diversified management investment company that has elected to be regulated as a BDC under the 1940 Act. We have elected to be treated, and intend to qualify annually, as a RIC under Subchapter M of the Code for U.S. federal income tax purposes. As a BDC and a RIC, we are required to comply with certain regulatory requirements.
Our investment objective is to generate current income and, to a lesser extent, capital appreciation through our investments. We seek to achieve our investment objective by making investments consisting primarily of term loans and equipment financings and, to a lesser extent, working capital loans, equity and equity-related investments. In addition, we may obtain warrants or contingent exit fees at funding from many of our portfolio companies, providing an additional potential source of investment returns. We generally are required to invest at least 70% of our total assets in qualifying assets in accordance with the 1940 Act but may invest up to 30% of our total assets in non-qualifying assets, as permitted by the 1940 Act.
We target investments in growth-stage companies, which are typically private companies, including venture-backed companies and companies with institutional equity investors. We define “growth-stage companies” as companies that have significant ownership and active participation by sponsors, such as institutional investors or private equity firms, and expected annual revenues of up to $100 million. Subject to the requirements of the 1940 Act, we are not limited to investing in any particular industry or geographic area and seek to invest in under-financed segments of the private credit markets.
Our loans generally may have initial interest-only periods of up to 24 months, and our equipment financings generally begin amortizing immediately. Our loans and equipment financings generally have a total term of up to 60 months. These investments are typically secured by a blanket first position lien, a specific asset lien on mission-critical assets and/or a blanket second position lien. We may also make a limited number of direct equity and equity-related investments in conjunction with our debt investments. We target growth-stage companies that have recently issued equity to raise cash to offset potential cash flow needs related to projected growth, have achieved positive cash flow to cover debt service, or have institutional investors committed to providing additional funding. A loan or equipment financing may be structured to tie the amortization of the loan or equipment financing to the portfolio company’s projected cash balances while cash is still available for operations. As such, the loan or equipment financing may have a reduced risk of default. We believe that the amortizing nature of our investments will mitigate risk and significantly reduce the risk of our investments over a relatively short period. We focus on protecting and recovering principal in each investment and structure our investments to provide downside protection.
Our History
Trinity Capital Inc. was incorporated under the general corporation laws of the State of Maryland on August 12, 2019 and commenced operations on January 16, 2020. Prior to January 16, 2020, we had no operations, except for matters relating to our formation and organization as a BDC.
On January 16, 2020, through a series of transactions, we acquired Trinity Capital Investment, LLC, Trinity Capital Fund II, L.P., Trinity Capital Fund III, L.P., Trinity Capital Fund IV, L.P., and Trinity Sidecar Income Fund, L.P. (collectively, the "Legacy Funds") and all of their respective assets, including their respective investment portfolio, as well as Trinity Capital Holdings, LLC, a holding company whose subsidiaries managed and/or had the right to receive fees from certain of the Legacy Funds. In order to complete these transactions, we used a portion of the proceeds from our private equity offering and private debt offering that occurred on January 16, 2020.
On February 2, 2021, we completed our initial public offering of 8,006,291 shares of our common stock at a price of $14.00 per share, inclusive of the underwriters’ option to purchase additional shares, which was exercised in full. Our common stock began trading on the Nasdaq Global Select Market on January 29, 2021 under the symbol “TRIN.” Proceeds from this offering were primarily used to pay down a portion of our existing indebtedness outstanding.
On December 5, 2022, the Company entered into a joint venture agreement with certain funds and accounts managed by a specialty credit manager (collectively, the “JV Partner”) to co-manage Senior Credit Corp 2022 LLC (the “JV”). The JV invests in secured loans and equipment financings to growth-stage companies that have been originated by the Company. To achieve these goals, the Company has agreed to offer the JV the opportunity to purchase up to 40% in dollar amount, but not less than 25% in dollar amount, of the entire amount of each secured loan and equipment financing advance originated by the Company during the period commencing on September 1, 2022 and ending on June 5, 2026.
Critical Accounting Estimates and Policies
The preparation of our financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ materially. Our critical accounting estimates, including those relating to valuation of investments and income recognition, are described below. Please refer to “Note 2 – Summary of Significant Accounting Policies” in the notes to the consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our significant accounting policies.
The most significant estimate inherent in the preparation of the Company’s consolidated financial statements is the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. The Company’s investments are carried at fair value in accordance with the 1940 Act and Accounting Standards Codification (“ASC”) 946, Financial Services — Investment Companies (“ASC 946”) and measured in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the observability of inputs used to measure fair value, and provides disclosure requirements for fair value measurements. ASC 820 requires the Company to assume that each of the portfolio investments is sold in a hypothetical transaction in the principal or, as applicable, most advantageous market using market participant assumptions as of the measurement date. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. The Company values its investments at fair value as determined in good faith by the Company’s Board of Directors (“Board”) in accordance with the provisions of ASC 820 and the 1940 Act.
The SEC adopted Rule 2a-5 under the 1940 Act ("Rule 2a-5"), which establishes a framework for determining fair value in good faith for purposes of the 1940 Act. As adopted, Rule 2a-5 permits boards of directors to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. The SEC also adopted Rule 31a-4 under the 1940 Act (“Rule 31a-4”), which provides the recordkeeping requirements associated with fair value determinations. While the Company's Board has not elected to designate a valuation designee, the Company has adopted certain revisions to its valuation policies and procedures to comply with the applicable requirements of Rule 2a-5 and Rule 31a-4.
While the Board is ultimately and solely responsible for determining the fair value of the Company’s investments, the Company has engaged independent valuation firms to provide the Company with valuation assistance with respect to its investments. The Company engages independent valuation firms on a discretionary basis. Specifically, on a quarterly basis, the Company identifies portfolio investments with respect to which an independent valuation firm assists in valuing certain investments. The Company selects these portfolio investments based on a number of factors, including, but not limited to, the potential for material fluctuations in valuation results, size, credit quality and the time lapse since the last valuation of the portfolio investment by an independent valuation firm.
Investments recorded on our Consolidated Statements of Assets and Liabilities are categorized based on the inputs to the valuation techniques as follows:
Given the nature of lending to venture capital-backed growth-stage companies, substantially all of the Company’s investments in these portfolio companies are considered Level 3 assets under ASC 820 because there is no known or accessible market or market indexes for these investment securities to be traded or exchanged. The Company uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures. This system takes into account both quantitative and qualitative factors of the portfolio companies. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been reported had a ready market for the investments existed, and it is reasonably possible that the difference could be material.
Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. The carrying amounts of the Company’s financial instruments, consisting of cash, investments, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.
Interest and Dividend Income. The Company recognizes interest income on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan agreement to the extent that such amounts are expected to be collected. Original issue discount (“OID”) initially includes the estimated fair value of detachable warrants obtained in conjunction with the origination of debt securities, and is accreted into interest income over the term of the loan as a yield enhancement based on the effective yield method. Interest income from payment-in-kind ("PIK") represents contractually deferred interest added to the loan balance recorded on an accrual basis to the extent such amounts are expected to be collected.
In addition, the Company may also be entitled to an end-of-term (“EOT”) payment. EOT payments to be paid at the termination of the debt agreement are accreted into interest income over the contractual life of the debt based on the effective yield method. When a portfolio company pre-pays their indebtedness prior to the scheduled maturity date, the acceleration of the unaccreted OID and EOT is recognized as interest income.
Income related to application or origination payments, including facility commitment fees, net of related expenses and generally collected in advance, are accreted into interest income over the contractual life of the loan. The Company recognizes nonrecurring fees and additional OID and EOT received in consideration for contract modifications commencing in the quarter relating to the specific modification.
Fee and Other Income. The Company recognizes one-time fee income, including, but not limited to, structuring fees, prepayment penalties, and exit fees related to a change in ownership of the portfolio company, as other income when earned. These fees are generally earned when the portfolio company enters into an equipment financing arrangement or pays off their outstanding indebtedness prior to the scheduled maturity. In addition, fee income may include fees for originations and administrative agent services rendered by the Company to the JV. Such fees are earned in the period that the services are rendered.
Portfolio Composition and Investment Activity
As of March 31, 2024, our investment portfolio had an aggregate fair value of approximately $1,363.9 million and was comprised of approximately $1,010.8 million in secured loans, $277.6 million in equipment financings, and $75.5 million in equity and warrants, across 128 portfolio companies. As of December 31, 2023, our investment portfolio had an aggregate fair value of approximately $1,275.2 million and was comprised of approximately $885.3 million in secured loans, $336.8 million in equipment financings, and $53.1 million in equity and warrants, across 120 portfolio companies.
A summary of the composition of our investment portfolio at cost and fair value as a percentage of total investments are shown in the following table as of March 31, 2024 and December 31, 2023:
Fair
Value
97
The following table shows the composition of our investment portfolio by geographic region at cost and fair value as a percentage of total investments as of March 31, 2024 and December 31, 2023. The geographic composition is determined by the location of the corporate headquarters of the portfolio company.
United States
Set forth below is a table showing the industry composition of our investment portfolio at cost and fair value as a percentage of total investments as of March 31, 2024 and December 31, 2023:
As of March 31, 2024 and December 31, 2023, the debt, including loans and equipment financings, in our portfolio had a weighted average time to maturity of approximately 3.1 and 3.2 years, respectively. Additional information regarding our portfolio is set forth in the Consolidated Schedule of Investments and the related notes thereto included with this Quarterly Report on Form 10-Q.
Concentrations of Credit Risk
Credit risk is the risk of default or non-performance by portfolio companies, equivalent to the investment’s carrying amount. Industry and sector concentrations will vary from period to period based on portfolio activity.
As of March 31, 2024 and December 31, 2023, the Company’s ten largest portfolio companies represented approximately 27.1% and 31.6%, respectively, of the total fair value of the Company’s investments in portfolio companies. As of March 31, 2024 and December 31, 2023, the Company had eight and four portfolio companies, respectively, that represented 5% or more of the Company’s net assets.
Investment Activity
During the three months ended March 31, 2024, we invested approximately $182.9 million in eight new portfolio companies, approximately $57.4 million in 12 existing portfolio companies, and approximately $2.4 million in the JV, excluding deferred fees. During the three months ended March 31, 2024, we received an aggregate of $148.5 million in proceeds from repayments and sales of our investments, including proceeds of approximately $43.4 million from early repayments on our debt investments and $55.4 million sales of debt investments.
During the year ended December 31, 2023, we invested approximately $414.3 million in 17 new portfolio companies, approximately $216.5 million in 25 existing portfolio companies, and approximately $11.0 million in the JV, excluding deferred fees. During the year ended December 31, 2023, we received an aggregate of $471.9 million in proceeds from repayments and sales of our investments, including proceeds of approximately $326.6 million from early repayments on our debt investments and sales of debt investments.
The following table provides a summary of the changes in the investment portfolio for the three months ended March 31, 2024 and the year ended December 31, 2023 (in thousands):
Year Ended
Beginning Portfolio, at fair value
1,094,386
240,700
632,754
Non-cash conversion
Principal payments received on investments
(41,902
(142,113
Proceeds from early debt repayments
(43,411
(169,745
Sales of investments
(63,228
(160,068
15,063
Ending Portfolio, at fair value
The level of our investment activity can vary substantially from period to period depending on many factors, including the amount of debt, including loans and equipment financings, and equity capital required by growth-stage companies, the general economic environment and market conditions and the competitive environment for the types of investments we make.
Portfolio Asset Quality
Our portfolio management team uses an ongoing investment risk rating system to characterize and monitor our outstanding loans and equipment financings. Our portfolio management team monitors and, when appropriate, recommends changes to the investment risk ratings. Our investment committee reviews the recommendations and/or changes to the investment risk ratings, which are submitted on a quarterly basis to the Board and its audit committee.
For our investment risk rating system, we review seven different criteria and, based on our review of such criteria, we assign a risk rating on a scale of 1 to 5, as set forth in the following illustration.
The following table shows the distribution of our secured loan and equipment financing investments on the 1 to 5 investment risk rating scale range at fair value as of March 31, 2024 and December 31, 2023 (dollars in thousands):
Investment Risk Rating
Investments at
Percentage of
Scale Range
Designation
Total Portfolio
4.0 - 5.0
Very Strong Performance
56,991
40,584
3.0 - 3.9
Strong Performance
275,107
21.4
277,867
22.9
2.0 - 2.9
Performing
875,950
68.0
805,730
65.9
1.6 - 1.9
Watch
65,410
5.1
56,740
1.0 - 1.5
Default/Workout
33,452
Total Debt Investments excluding Senior Credit Corp 2022 LLC
1,278,997
99.3
1,214,373
99.4
.
0.6
Total Debt Investments
As of both March 31, 2024 and December 31, 2023, our debt investments had a weighted average risk rating score of 2.7.
Debt Investments on Non-Accrual Status
When a debt security becomes 90 days or more past due, or if our management otherwise does not expect that principal, interest, and other obligations due will be collected in full, we will generally place the debt security on non-accrual status and cease recognizing interest income on that debt security until all principal and interest due has been paid or we believe the borrower has demonstrated the ability to repay its current and future contractual obligations. Any uncollected interest is reversed from income in the period that collection of the interest receivable
101
is determined to be doubtful. However, we may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection.
As of March 31, 2024, loans to four portfolio companies and equipment financings to one portfolio company were on non-accrual status with a total cost of approximately $67.5 million, and a total fair value of approximately $30.4 million, or 2.4%, of the fair value of the Company’s debt investment portfolio. As of December 31, 2023, loans to three portfolio companies and equipment financings to two portfolio companies were on non-accrual status with a total cost of approximately $60.8 million, and a total fair value of approximately $43.2 million, or 3.5%, of the fair value of the Company’s debt investment portfolio.
Results of Operations
The following discussion and analysis of our results of operations encompasses our consolidated results for the three months ended March 31, 2024 and 2023.
Investment Income
The following table sets forth the components of investment income (in thousands). The components of investment income have been updated to a preferred presentation and the prior year has been amended to conform with the new preferred presentation.
Stated interest income
37,840
33,804
Amortization of OID and EOT
6,310
Acceleration of OID and EOT
951
1,332
PIK interest income
346
Dividend income
Other fee income
For the three months ended March 31, 2024, total investment income was approximately $50.5 million, which represents an approximate effective yield of 15.8% on the average investments during the year. For the three months ended March 31, 2023, total investment income was approximately $41.5 million, which represents an approximate effective yield of 15.2% on the average investments during the year. The increase in investment income for the three months ended March 31, 2024 is due to higher interest income and amortization of OID and EOT based on an increased principal value of income producing debt investments and higher stated interest rates.
Operating Expenses and Excise Taxes
Our operating expenses are comprised of interest and fees on our borrowings, employee compensation, professional fees, general and administrative expenses, and excise taxes. Our operating expenses totaled approximately $25.3 million and $22.2 million for the three months ended March 31, 2024 and 2023, respectively. The increase in our operating expenses for the three months ended March 31, 2024 is discussed with respect to each component of such expenses below.
Interest Expense and Other Debt Financing Costs
Our interest expense and other debt financing costs are primarily comprised of interest and fees related to our secured borrowings, the 7.00% Notes due 2025 (the “2025 Notes”), the 4.375% Notes due 2026 (the “August 2026 Notes”), the 4.25% Notes due 2026 (the “December 2026 Notes”), the 7.875% Notes due 2029 (the “March 2029 Notes”), and the 6.00% Convertible Notes due 2025 (the “Convertible Notes”). Interest expense and other debt financing costs on our borrowings totaled approximately $12.1 million and $11.1 million for the three months ended March 31, 2024 and 2023, respectively. Our weighted average effective interest rate, comprised of interest and
amortization of fees and discounts, was approximately 7.4% and 7.0% for three months ended March 31, 2024 and 2023, respectively. The increase in interest expense for the three months ended March 31, 2024 was primarily due to increased borrowings and increased base rate under our credit facility with KeyBank, National Association (the “KeyBank Credit Facility”).
Employee Compensation and Benefits
Employee compensation and benefits totaled approximately $9.9 million and $7.6 million for the three months ended March 31, 2024 and 2023, respectively. The increase in employee compensation expenses for the three months ended March 31, 2024 relates primarily to the increased variable compensation related to a higher headcount and stock-based compensation. As of March 31, 2024 and 2023, the Company had 73 and 55 employees, respectively.
Professional Fees Expenses
Professional fees expenses, consisting of legal fees, accounting fees, third-party valuation fees, and talent acquisition fees, totaled approximately $0.7 million and $1.4 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in professional fees expenses for the three months ended March 31, 2024 resulted primarily from a decrease in legal fees, third-party valuation fees and other consulting fees.
General and Administrative Expenses
General and administrative expenses include insurance premiums, rent, state taxes and various other expenses related to our ongoing operations. Our general and administrative expenses totaled approximately $2.0 million and $1.5 million for the three months ended March 31, 2024 and 2023, respectively. The increase in general and administrative expenses for the three months ended March 31, 2024 was primarily due to additional office rent and related expenses.
Excise Taxes
Our excise taxes totaled approximately $0.6 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively.
Net Investment Income
For the three months ended March 31, 2024, we recognized approximately $50.5 million in total investment income as compared to approximately $25.3 million in total expenses, including excise tax expense, resulting in net investment income of $25.2 million. For the three months ended March 31, 2023 we recognized approximately $41.5 million in total investment income as compared to approximately $22.2 million in total expenses including excise tax expense, resulting in net investment income of $19.3 million.
Net Realized Gains and Losses
Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written off during the period.
During the three months ended March 31, 2024, our gross realized gains primarily consisted of the repayment of one equipment financing, and our gross realized losses primarily consisted of the partial sale of one equity position in a portfolio company. During the three months ended March 31, 2023, our gross realized gains primarily consisted of the repayment of one equipment financing, and our gross realized losses primarily consisted of the repayment of our debt positions in two portfolio companies.
The net realized gains (losses) from the sales, repayments, or exits of investments for the three months ended March 31, 2024 and 2023 were comprised of the following (in thousands):
Net realized gain/(loss) on investments:
Gross realized gains
Gross realized losses
(2,926
(904
Total net realized gains/(losses) on investments
Net Change in Unrealized Appreciation / (Depreciation) from Investments
Net change in unrealized appreciation/(depreciation) from investments primarily reflects the net change in the fair value of the investment portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.
Net unrealized appreciation and depreciation on investments for the three months ended March 31, 2024 and 2023 is comprised of the following (in thousands):
Gross unrealized appreciation
19,057
17,803
Gross unrealized depreciation
(28,980
(14,600
Net unrealized appreciation/(depreciation) reclassified related to net realized gains or losses
(2,077
Total net unrealized gains/(losses) on investments
During the three months ended March 31, 2024, our net unrealized depreciation totaled approximately $12.0 million, which included net unrealized appreciation of $3.8 million from our warrant investments, net unrealized depreciation of $3.4 million from our equity investments and net unrealized depreciation of $12.4 million from our debt investments.
During the three months ended March 31, 2023, our net unrealized appreciation totaled approximately $3.5 million, which included net unrealized depreciation of $4.8 million from our warrant investments, net unrealized appreciation of $0.1 million from our equity investments and net unrealized appreciation of $8.2 million from our debt investments.
Net Increase (Decrease) in Net Assets Resulting from Operations
Net increase in net assets resulting from operations during the three months ended March 31, 2024, totaled approximately $14.5 million. Net increase in net assets resulting from operations during the three months ended March 31, 2023, totaled approximately $22.5 million.
Net Increase (Decrease) in Net Assets Resulting from Operations and Earnings Per Share
For the three months ended March 31, 2024, basic and diluted net increase in net assets per common share were $0.31 and 0.30, respectively. For the three months ended March 31, 2023, basic and diluted net decrease in net assets per common share was $0.64 and $0.60, respectively.
Financial Condition, Liquidity and Capital Resources
Our liquidity and capital resources are generated primarily from the net proceeds of offerings of our securities, including our “at-the-market” offering, the 2025 Notes offering, the Convertible Notes offering, the August 2026
Notes offering, the December 2026 Notes offering and the March 2029 Notes offering, borrowings under the KeyBank Credit Facility, and cash flows from our operations, including investment sales and repayments, as well as income earned on investments and cash equivalents. Our primary use of our funds includes investments in portfolio companies, payments of interest on our outstanding debt, and payments of fees and other operating expenses we incur. We also expect to use our funds to pay distributions to our stockholders. We have used, and expect to continue to use, our borrowings, including under the KeyBank Credit Facility or any future credit facility, as well as proceeds from the turnover of our portfolio, to finance our investment objectives and activities.
From time to time, we may enter into additional credit facilities, increase the size of our existing KeyBank Credit Facility, or issue additional securities in private or public offerings. Any such incurrence or issuance would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions, and other factors.
For the three months ended March 31, 2024, we experienced a net increase in cash and cash equivalents in the amount of $7.2 million, which is the net result of $88.6 million of cash provided by financing activities, offset by $81.4 million of cash used in operating activities and less than $0.1 million of cash used in investing activities. During the three months ended March 31, 2023, we experienced a net decrease in cash and cash equivalents in the amount of $2.3 million, which is the net result of $22.7 million of cash used in financing activities and $0.3 million of cash used in investing activities, offset by $20.7 million of cash provided by operating activities.
As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $12.0 million and $4.8 million, respectively, of which $4.9 million and $3.1 million, respectively, was held in the Goldman Sachs Financial Square Government Institutional Fund. Cash held in demand deposit accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limit and therefore is subject to credit risk. All of the Company’s cash deposits are held at large established high credit quality financial institutions, and management believes that the risk of loss associated with any uninsured balances is remote.
As of March 31, 2024 and December 31, 2023, we had approximately $160.0 million and $137.0 million, respectively, of available borrowings under the KeyBank Credit Facility, subject to its terms and regulatory requirements. Cash and cash equivalents, taken together with available borrowings under the KeyBank Credit Facility, as of March 31, 2024, are expected to be sufficient for our investing activities and to conduct our operations in the near term and long term.
Refer to “Note 5 – Borrowings” in the notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our borrowings.
Asset Coverage Requirements
In accordance with the 1940 Act, with certain limited exceptions, we are only allowed to incur borrowings, issue debt securities or issue preferred stock, if immediately after the borrowing or issuance, the ratio of total assets (less total liabilities other than indebtedness) to total indebtedness plus preferred stock, is at least 150%. On September 27, 2019, the Board, including a “required majority” (as such term is defined in Section 57(o) of the 1940 Act) and our initial stockholder approved the application to us of the 150% minimum asset coverage ratio set forth in Section 61(a)(2) of the 1940 Act. As a result, we are permitted to potentially borrow $2 for investment purposes of every $1 of investor equity. As of March 31, 2024, our asset coverage ratio was approximately 184.9% and our asset coverage ratio per unit was approximately $1,849. As of December 31, 2023, our asset coverage ratio was approximately 194.7% and our asset coverage ratio per unit was approximately $1,947.
Commitments and Off-Balance Sheet Arrangements
The Company has entered into a capital commitment with the JV to fund capital contributions through June 2026 in the amount of $21.4 million, of which $8.0 million and $10.4 million was unfunded as of March 31, 2024 and December 31, 2023, respectively. The Company did not have any other off-balance sheet financings or liabilities as of March 31, 2024 or December 31, 2023, respectively.
The Company’s commitments and contingencies consist primarily of unfunded commitments to extend credit in the form of loans to the Company’s portfolio companies. A portion of these unfunded contractual commitments as of March 31, 2024 and December 31, 2023 are dependent upon the portfolio company reaching certain milestones before the debt commitment becomes available. Furthermore, the Company’s credit agreements with its portfolio companies generally contain customary lending provisions that allow the Company relief from funding obligations for previously made commitments in instances where the underlying portfolio company experiences materially adverse events that affect the financial condition or business outlook for the company. Since a portion of these commitments may expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements. As such, the Company’s disclosure of unfunded contractual commitments includes only those which are available at the request of the portfolio company and unencumbered by milestones. As of March 31, 2024 and December 31, 2023, the Company did not have any outstanding unfunded commitments. The Company will fund future unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the KeyBank Credit Facility).
Contractual Obligations
A summary of our contractual payment obligations as of March 31, 2024, is as follows:
Payments Due by Period
Less than 1
year
1 - 3 years
4 - 5 years
After 5 years
Operating Leases
1,429
Total Contractual Obligations
183,243
443,001
116,966
744,639
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All distributions will be paid at the discretion of the Board and will depend on our earnings, financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as the Board may deem relevant from time to time.
Price Range of Common Stock
Our common stock began trading on the Nasdaq Global Select Market (“Nasdaq”) on January 29, 2021 under the symbol “TRIN” in connection with our IPO, which closed on February 2, 2021. Prior to our IPO, the shares of our common stock were offered and sold in transactions exempt from registration under the Securities Act. As such, there was no public market for shares of our common stock during year ended December 31, 2020. Since our IPO, our common stock has traded at prices both above and below our net asset value per share.
The following table sets forth the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock reported on Nasdaq, the closing sales price as a premium (discount) to net asset value and the dividends declared by us in each fiscal quarter since we began trading on Nasdaq. On April 30, 2024, the last reported closing sales price of our common stock on Nasdaq was $15.17 per share, which represented a premium of approximately 17.8% to our net asset value per share of $12.88 as of March 31, 2024. As of April 30,
2024, we had approximately 56 stockholders of record, which does not include stockholders for whom shares are held in nominee or “street” name.
Price Range
High
Low
High Sales Price Premium (Discount) to Net Asset Value(2)
Low Sales Price Premium (Discount) to Net Asset Value(2)
Cash Dividend Per Share(3)
Year Ending December 31, 2024
Second Quarter (through April 30, 2024)
*
15.26
14.03
First Quarter
15.08
13.68
17.1
Year Ending December 31, 2023
Fourth Quarter
15.40
13.33
16.7
Third Quarter
13.17
15.29
13.75
16.1
(4)
Second Quarter
13.91
11.36
(13.6
0.53
14.26
10.91
(16.5
Year Ending December 31, 2022
13.82
10.24
(22.1
0.61
13.74
16.28
12.07
18.5
(12.2
14.62
19.44
14.27
33.0
(2.4
0.57
15.15
20.11
17.00
32.7
12.2
Not determined at time of filing.
Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. At times, our shares of common stock have traded at prices both above and below our net asset value per share. The possibility that our shares of common stock will trade at a discount from net asset value per share or at premiums that are unsustainable over the long term are separate and distinct from the risk that our net asset value per share will decrease. It is not possible to predict whether our common stock will trade at, above, or below net asset value per share.
Related Party Transactions
Certain members of management as well as employees of the Company hold shares of the Company’s stock.
We have entered into indemnification agreements with our directors and executive officers. The indemnification agreements are intended to provide our directors and executive officers with the maximum indemnification permitted under Maryland law and the 1940 Act. Each indemnification agreement provides that we shall indemnify the director or executive officer who is a party to the agreement, or an “Indemnitee,” including the advancement of legal expenses, if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, to the maximum extent permitted by Maryland law and the 1940 Act.
Refer to “Note 12 – Related Party Transactions” included in the notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Recent Developments
On April 16, 2024, we caused notice to be issued to the holders of our 2025 Notes regarding our exercise of our option to redeem a portion of the issued and outstanding 2025 Notes. We will redeem $30.0 million in aggregate principal amount of the $182.5 million in aggregate principal amount of outstanding 2025 Notes on May 17, 2024 (the “Redemption Date”). The 2025 Notes will be redeemed at 100% of their principal amount ($25 per Note), plus the accrued and unpaid interest thereon from March 15, 2024, to, but excluding, the Redemption Date.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including valuation risk and interest rate risk. Uncertainty with respect to the economic effects of the overall market conditions has introduced significant volatility in the financial markets, and the effect of the volatility could materially impact our market risks, including those listed below.
Valuation Risk
Our investments may not have readily available market quotations (as such term is defined in Rule 2a-5), and those investments which do not have readily available market quotations are valued at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and it is possible that the difference could be material.
In accordance with Rule 2a-5, our Board periodically assesses and manages material risks associated with the determination of the fair value of our investments.
Interest Rate Risk
Interest rate sensitivity and risk refer to the change in earnings that may result from changes in the level of interest rates. To the extent that we borrow money to make investments, including under the KeyBank Credit Facility or any future financing arrangement, our net investment income will be affected by the difference between the rate at which we borrow funds and the rate at which we invest these funds. In periods of rising interest rates, our cost of borrowing funds would increase, which may reduce our net investment income. As a result, there can be no assurance that a significant change in market interest rates, including as a result of inflation, will not have a material adverse effect on our net investment income. Inflation is likely to continue in the near to medium-term, particularly in the United States and Europe, with the possibility that monetary policy may tighten in response. Persistent inflationary pressures could affect our portfolio companies’ profit margins.
As of March 31, 2024, approximately 75.4% of our debt investments based on outstanding principal balance represented floating-rate investments based on Prime or SOFR, and approximately 24.6% of our debt investments based on outstanding principal balance represented fixed rate investments. In addition, borrowings under the KeyBank Credit Facility are subject to floating interest rates based on SOFR, generally bearing interest at a rate of the Adjusted Term SOFR Reference Rate plus 2.85%, subject to the number of eligible debt investments in the collateral pool.
Based on our Consolidated Statements of Operations as of March 31, 2024, the following table shows the annualized impact on net income of hypothetical base rate changes in the Prime rate on our debt investments (considering interest rate floors for floating-rate instruments) and the hypothetical base rate changes in the SOFR on
our KeyBank Credit Facility, assuming that there are no changes in our investment and borrowing structure (in thousands):
Interest
Net
Income
Expense
Income/(Loss)
Up 300 basis points
27,369
5,700
21,669
Up 200 basis points
18,307
3,800
14,507
Up 100 basis points
9,455
1,900
7,555
Down 100 basis points
(7,392
(1,900
(5,492
Down 200 basis points
(12,571
(3,800
(8,771
Down 300 basis points
(17,240
(5,700
(11,540
Currency Risk
Any investments we make that are denominated in a foreign currency will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. These risks will vary depending upon the currency or currencies involved. As of March 31, 2024, we had four foreign domiciled portfolio companies. Our exposure to currency risk related to these debt investments is minimal as payments from such portfolio companies are received in U.S. dollars. No other investments as of March 31, 2024 were subject to currency risk.
Hedging
We do not currently engage in any hedging activities. However, we may, in the future, hedge against interest rate and currency exchange rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. We may also borrow funds in local currency as a way to hedge our non-U.S. denominated investments.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
In accordance with Rules 13a-15(b) and 15d-15(b) under the Exchange Act, we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q and determined that our disclosure controls and procedures are effective as of the end of the period covered by this Quarterly Report on Form 10-Q.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against us. From time to time, we may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. Furthermore, third parties may seek to impose liability on us in connection with the activities of our portfolio companies. Our business is also subject to extensive regulation, which may result in regulatory proceedings against us. While the outcome of any future legal or regulatory proceedings cannot be predicted with certainty, we do not expect that any such future proceedings will have a material effect upon our financial condition or results of operations.
Item 1A. Risk Factors
Investing in our securities involves a number of significant risks. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K filed with the SEC on March 6, 2024, all of which could materially affect our business, financial condition and/or results of operations. Although the risks described in our other SEC filings referenced above represent the principal risks associated with an investment in us, they are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, might materially and adversely affect our business, financial condition and/or results of operations.
During the three months ended March 31, 2024, there have been no material changes to the risk factors discussed in our SEC filings referenced above.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Dividend Reinvestment Plan
On April 15, 2024, pursuant to its amended and restated distribution reinvestment plan, the Company issued 22,578 shares of its common stock, at a price of $14.03 per share, to stockholders of record as of March 28, 2024 that did not opt out of the Company’s amended and restated distribution reinvestment plan in order to satisfy the reinvestment portion of the Company’s distribution. This issuance was not subject to the registration requirements of the Securities Act. See “Item 1. Consolidated Financial Statements – Note 7. Stockholder’s Equity – Distribution Reinvestment Plan” for more information.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the fiscal quarter ended March 31, 2024, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
Item 6. Exhibits
The following exhibits are filed as part of this Quarterly Report on Form 10‑Q or hereby incorporated by reference to exhibits previously filed with the SEC:
ExhibitNumber
Description of Exhibits
Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 30, 2023).
Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10 filed on January 16, 2020).
4.1
Fifth Supplemental Indenture, dated as of March 28, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed March 28, 2024).
Form of 7.875% Note due 2029 (included as part of and incorporated by reference to Exhibit 4.1 hereto).
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a 14(a) and 15d 14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a 14(a) and 15d 14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline XBRL Instance Document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith
** Furnished herewith
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 1, 2024
By:
/s/ Kyle Brown
Kyle Brown
Chief Executive Officer, President and Chief
Investment Officer
(Principal Executive Officer)
/s/ Michael Testa
Michael Testa
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)