SBA DebenturesThe Corporation had $11,000,000 in outstanding SBA
debentures at September 30, 2021 and December 31, 2020, respectively, with a weighted average interest rate, including the SBA annual fee, of 3.45% at September 30, 2021. The debentures are presented net of deferred debenture costs
(See Note 6. SBA Debentures). The $11,000,000 in outstanding SBA leverage matures from 2022 through 2029. Subsequent to the quarter ended September 30, 2021, the Corporation repaid its $11,000,000 of outstanding SBA debentures. See Note 10.
Subsequent Event, for additional information.
In the event of a future default of such SBA obligations, the Corporation has consented to
the exercise, by the SBA, of all rights of the SBA under 13 C.F.R. 107.1810(i) SBA remedies for automatic events of default and has agreed to take all actions that the SBA may so require. These actions may include the Corporations
automatic consent to the appointment of the SBA, or its designee, as receiver under Section 311© of the Small Business Investment Act of 1958.
Net Assets per ShareNet assets per share are based on the number of shares of common stock outstanding, adjusted
retroactively for the reverse stock split that occurred in May 2020. The Corporation does not have any common stock equivalents outstanding.
Supplemental Cash Flow InformationIncome taxes paid (refunded) during the nine months ended September 30, 2021 and
2020 were $63,276 and ($380,890), respectively. Interest paid during the nine months ended September 30, 2021 and 2020 was $379,085 and $380,124, respectively. The Corporation converted $199,848 and $280,724 of interest receivable into
investments during the nine months ended September 30, 2021 and 2020, respectively.
Accounting EstimatesThe
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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Stockholders Equity (Net Assets)At September 30, 2021 and December 31, 2020, there were 500,000 shares of
$10.00 par value preferred stock authorized and unissued.
On April 22, 2021, the Board of Directors approved a new share repurchase
plan, which authorizes the Corporation to repurchase shares of the Corporations outstanding common stock with an aggregate cost of up to $1,500,000 at prices per share of common stock no greater than the then current net asset value. This new
share repurchase authorization lasts for a period of 12 months from the authorization date until April 22, 2022. This new share repurchase plan replaces the share repurchase authorization that was previously approved by the Board of Directors
in April 2020. During the nine months ended September 30, 2021, the Corporation repurchased 1,148 shares of common stock at a cost of $20,771. During the nine months ended September 30, 2020, the Corporation repurchased 3,397 shares of
common stock for a cost of $37,988.
In May 2020, the Corporation effected a 1-for-9 reverse stock split of its common stock (the Reverse Stock Split). The Reverse Stock Split affected all issued and outstanding shares of its common stock, including shares held in
treasury. The Reverse Stock Split reduced the number of issued and outstanding shares of the Corporations common stock from 23,845,470 shares and 23,304,424 shares, respectively, to 2,648,916 shares and 2,588,800 shares, respectively. The
Reverse Stock Split did not change the authorized number of shares or the par value of the Corporations common stock. Share and per share data included herein has been retroactively restated to reflect the effect of the Reverse Stock Split, as
applicable. The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholders percentage interest in the Corporations outstanding common stock, except for minor adjustments resulting from the cash payment
received for any fractional shares that would have been received as a result of the Reverse Stock Split.
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