UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

FORM 10-Q

 

  x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2021

 

  ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission
File Number
  Exact name of registrant as specified in its charter,
address of principal executive office, telephone number, and
state or other jurisdiction of incorporation or organization
  I.R.S. Employer
Identification Number
814-01022  

Logan Ridge

Finance Corporation 

650 Madison Avenue

New York, New York 10022   

State of Incorporation: Maryland  

Telephone: (212) 891-2880 

  90-0945675

 

Capitala Finance Corp.

4201 Congress St., Suite 360, Charlotte, North Carolina 28209

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

 

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 $0.01 per share  

5.75% Convertible Notes due 2022  

6.00% Notes due 2022 

 

LRFC  

CPTAG

 CPTAL 

 

NASDAQ Global Select Market  

NASDAQ Capital Market  

NASDAQ Global Select Market 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

    Yes   x No   ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§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 x Smaller reporting company ¨
         
      Emerging growth company   ¨

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

    Yes  ¨ No  x

 

The number of shares of Logan Ridge Finance Corporation’s common stock, $0.01 par value, outstanding as of August 16, 2021 was 2,711,068.

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION 3
     
Item 1. Consolidated Financial Statements 3
     
  Consolidated Statements of Assets and Liabilities as of June 30, 2021 (unaudited) and December 31, 2020 3
     
  Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited) 4
     
  Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2021 and 2020 (unaudited) 5
     
  Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited) 6
     
  Consolidated Schedules of Investments as of June 30, 2021 (unaudited) and December 31, 2020 7
     
  Notes to Consolidated Financial Statements as of and for the period ended June 30, 2021 (unaudited) 17
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 46
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 65
     
Item 4. Controls and Procedures 66
     
PART II. OTHER INFORMATION 66
     
Item 1. Legal Proceedings 66
     
Item 1A. Risk Factors 67
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68
     
Item 3. Defaults Upon Senior Securities 68
     
Item 4. Mine Safety Disclosures 68
     
Item 5. Other Information 68
     
Item 6. Exhibits 68
   
Signatures 69

 

  2  

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

    As of  
    June 30, 2021     December 31, 2020  
    (unaudited)        
ASSETS                
Investments at fair value:                
Non-control/non-affiliate investments (amortized cost of $143,555 and $187,744, respectively)   $ 139,097     $ 172,848  
Affiliate investments (amortized cost of $65,163 and $80,961, respectively)     81,659       93,425  
Control investments (amortized cost of $8,850 and $8,947, respectively)     7,292       8,419  
Total investments at fair value (amortized cost of $217,568 and $277,652, respectively)     228,048       274,692  
Cash and cash equivalents     26,144       49,942  
Interest and dividend receivable     1,101       2,286  
Prepaid expenses     629       1,077  
Receivable for unsettled trades     7,234       -  
Total assets   $ 263,156     $ 327,997  
                 
LIABILITIES                
SBA-guaranteed debentures (net of deferred financing costs of $0 and $485, respectively)   $ -     $ 90,515  
2022 Notes (net of deferred financing costs of $556 and $846, respectively)     72,277       71,987  
2022 Convertible Notes (net of deferred financing costs of $362 and $552, respectively)     51,726       51,536  
KeyBank Credit Facility (net of deferred financing costs of $450 and $546, respectively)     24,550       (546 )
Management and incentive fees payable     70       3,842  
Interest and financing fees payable     778       1,688  
Accounts payable and accrued expenses     8       28  
Total liabilities   $ 149,409     $ 219,050  
                 
Commitments and contingencies (Note 2)                
                 
NET ASSETS                
Common stock, par value $0.01, 100,000,000 common shares authorized, 2,711,068 and 2,711,068 common shares
issued and outstanding, respectively
  $ 27     $ 27  
Additional paid in capital     229,481       229,481  
Total distributable loss     (115,761 )     (120,561 )
Total net assets   $ 113,747     $ 108,947  
Total liabilities and net assets   $ 263,156     $ 327,997  
                 
Net asset value per share   $ 41.96     $ 40.19  

 

See accompanying notes to consolidated financial statements.

 

  3  

 

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

    For the Three Months Ended June 30,     For the Six Months Ended June 30,  
    2021     2020     2021     2020  
INVESTMENT INCOME                                
Interest and fee income:                                
Non-control/non-affiliate investments   $ 3,073     $ 4,693     $ 6,269     $ 9,400  
Affiliate investments     1,188       1,632       2,494       3,311  
Control investments     98       103       196       206  
Total interest and fee income     4,359       6,428       8,959       12,917  
Payment-in-kind interest and dividend income:                                
Non-control/non-affiliate investments     24       378       95       714  
Affiliate investments     99       188       198       368  
Total payment-in-kind interest and dividend income     123       566       293       1,082  
Dividend income:                                
Non-control/non-affiliate investments     560       -       560       -  
Affiliate investments     -       -       155       25  
Total dividend income     560       -       715       25  
Interest income from cash and cash equivalents     2       5       3       49  
Total investment income     5,044       6,999       9,970       14,073  
                                 
EXPENSES                                
Interest and financing expenses     2,728       4,885       5,765       8,711  
Base management fee     1,272       1,666       2,670       3,423  
Administrative service fees     350       350       700       700  
General and administrative expenses     660       707       1,584       1,861  
Total expenses     5,010       7,608       10,719       14,695  
                                 
NET INVESTMENT INCOME (LOSS)     34       (609 )     (749 )     (622 )
                                 
REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS                                
Net realized gain (loss) on investments:                                
Non-control/non-affiliate investments     4,732       (14,142 )     (9,291 )     (13,174 )
Affiliate investments     2,215       1,341       2,215       1,341  
Control investments     -       (484 )     -       (484 )
Net realized gain (loss) on investments     6,947       (13,285 )     (7,076 )     (12,317 )
Net unrealized (depreciation) appreciation investments:                                
Non-control/non-affiliate investments     (12,774 )     16,993       10,438       (11,532 )
Affiliate investments     60       (1,003 )     4,032       (14,731 )
Control investments     (1,006 )     1,004       (1,030 )     (138 )
Net unrealized (depreciation) appreciation on investments     (13,720 )     16,994       13,440       (26,401 )
Total net realized and unrealized (loss) gain on investments     (6,773 )     3,709       6,364       (38,718 )
Net realized loss on extinguishment of debt     (815 )     -       (815 )     -  
                                 
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ (7,554 )   $ 3,100     $ 4,800     $ (39,340 )
                                 
NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED(1)   $ (2.79 )   $ 1.14     $ 1.77     $ (14.53 )
                                 
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED (1)     2,711,068       2,711,068       2,711,068       2,707,256  
                                 
DISTRIBUTIONS PAID PER SHARE (2)   $ -     $ -     $ -     $ 1.50  

 

 

 

(1) Basic and diluted shares of Logan Ridge Finance Corporation's (the "Company") common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.
(2) Dividends paid per share of the Company's common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.

 

See accompanying notes to consolidated financial statements.

 

  4  

 

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Changes in Net Assets

 (in thousands, except share data)

 (unaudited)

 

    Common Stock (1)                    
For the Three Months Ended June 30, 2021 and 2020   Number of Shares     Par Value     Additional Paid
in Capital (1)
    Total Distributable
Loss
    Total  
BALANCE, March 31, 2021     2,711,068     $ 27     $ 229,481     $ (108,207 )   $ 121,301  
   Net investment income     -       -       -       34       34  
   Net realized gain on investments     -       -       -       6,947       6,947  
   Net unrealized depreciation on investments     -       -       -       (13,720 )     (13,720 )
   Net realized loss on extinguishment of debt     -       -       -       (815 )     (815 )
BALANCE, June 30, 2021     2,711,068     $ 27     $ 229,481     $ (115,761 )   $ 113,747  
                                         
                                         
BALANCE, March 31, 2020     2,711,068     $ 27     $ 238,356     $ (136,428 )   $ 101,955  
   Net investment loss     -       -       -       (609 )     (609 )
   Net realized loss on investments     -       -       -       (13,285 )     (13,285 )
   Net unrealized appreciation on investments     -       -       -       16,994       16,994  
 BALANCE, June 30, 2020     2,711,068     $ 27     $ 238,356     $ (133,328 )   $ 105,055  

 

    Common Stock (1)                    
For the Six Months Ended June 30, 2021 and 2020   Number of Shares     Par Value     Additional Paid
in Capital (1)
    Total Distributable
Loss
    Total  
BALANCE, December 31, 2020     2,711,068     $ 27     $ 229,481     $ (120,561 )   $ 108,947  
Net investment loss     -       -       -       (749 )     (749 )
Net realized loss on investments     -       -       -       (7,076 )     (7,076 )
Net unrealized appreciation on investments     -       -       -       13,440       13,440  
Net realized loss on extinguishment of debt     -       -       -       (815 )     (815 )
 BALANCE, June 30, 2021     2,711,068     $ 27     $ 229,481     $ (115,761 )   $ 113,747  
                                         
                                         
BALANCE, December 31, 2019     2,700,628     $ 27     $ 238,021     $ (89,935 )   $ 148,113  
Net investment loss     -       -       -       (622 )     (622 )
Net realized loss on investments     -       -       -       (12,317 )     (12,317 )
Net unrealized depreciation on investments     -       -       -       (26,401 )     (26,401 )
Fractional shares settled in cash as part of one-for-six reverse stock split     (13 )     -       -       -       -  
Distributions to Shareholders:                                        
Stock issued under dividend reinvestment plan     10,453       -       335       -       335  
Distributions declared     -       -       -       (4,053 )     (4,053 )
BALANCE, June 30, 2020     2,711,068     $ 27     $ 238,356     $ (133,328 )   $ 105,055  

  

 

 

(1) Shares of the Company's common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.

 

See accompanying notes to consolidated financial statements.

 

  5  

 

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Cash Flows

 (in thousands)

 

    For the Six Months Ended June 30,  
    2021     2020  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net increase (decrease) in net assets resulting from operations   $ 4,800     $ (39,340 )
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:                
Purchase of investments     (10,000 )     (20,820 )
Repayments and sales of investments     63,444       58,888  
Net realized loss on investments     7,076       12,317  
Net realized loss on extinguishment of debt     815       -  
Net unrealized (appreciation) depreciation on investments     (13,440 )     26,401  
Payment-in-kind interest and dividends     (293 )     (1,082 )
Accretion of original issue discount on investments     (143 )     (438 )
Amortization of deferred financing fees     765       2,090  
Changes in assets and liabilities:                
Interest and dividend receivable     1,185       (333 )
Prepaid expenses     448       (16 )
Receivable for unsettled trades     (7,234 )     (186 )
Management and incentive fees payable     (3,772 )     (127 )
Interest and financing fees payable     (910 )     (10 )
Accounts payable and accrued expenses     (20 )     (507 )
NET CASH PROVIDED BY OPERATING ACTIVITIES     42,721       36,837  
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Paydowns on SBA-guaranteed debentures     (91,000 )     -  
Prepayment penalty on SBA-guaranteed debentures     (519 )     -  
Proceeds from KeyBank Credit Facility     25,000       -  
Distributions paid to shareholders     -       (3,718 )
Deferred financing fees paid     -       (214 )
NET CASH USED IN FINANCING ACTIVITIES     (66,519 )     (3,932 )
                 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS     (23,798 )     32,905  
CASH AND CASH EQUIVALENTS, beginning of period     49,942       62,321  
CASH AND CASH EQUIVALENTS, end of period   $ 26,144     $ 95,226  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                
Cash paid for interest   $ 5,724     $ 6,409  
                 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS                
Distributions paid through dividend reinvestment plan share issuances   $ -     $ 335  

 

See accompanying notes to consolidated financial statements.

 

  6  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition
Date
  Principal
Amount
    Cost     Fair Value     % of
Net Assets
 
Non-control/non-affiliated investments - 122.3%                                            
                                             
Non-control/non-affiliated investments - United States                                            
                                             
3 Bridge Solutions, LLC   IT Consulting   First Lien Debt (13.0% Cash, Due 12/4/22)   12/4/2017   $ 8,466     $ 8,466     $ 8,466       7.4 %
                                             
3 Bridge Solutions, LLC   IT Consulting   Preferred Units (965 units)   12/4/2017             1,090       1,250       1.1 %
                                             
3 Bridge Solutions, LLC   IT Consulting   Membership Units (39,000 units)   12/4/2017             10       990       0.9 %
                                             
                          9,566       10,706       9.4 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   First Lien Debt (8.0% Cash, Due 12/18/22)   6/25/2020     7,119       7,119       6,732       5.9 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series A Preferred Units (13,811 units)   6/25/2020             1,275       804       0.7 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series B Preferred Units (48,025 units)   6/25/2020             3,943       -       0.0 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series C Preferred Units (78,900 units)   6/25/2020             -       -       0.0 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Membership Units (20,092 units)   12/18/2017             800       -       0.0 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Membership Unit Warrants (49,295 units)   6/25/2020             -       -       0.0 %
                                             
                          13,137       7,536       6.6 %
                                             
American Clinical Solutions, LLC   Healthcare   First Lien Debt (7.0% Cash, Due 12/31/22)   12/31/2019     3,500       3,500       3,327       2.9 %
                                             
American Clinical Solutions, LLC   Healthcare   First Lien Debt (7.0% Cash, Due 12/31/21) (6)   4/13/2020     250       250       238       0.2 %
                                             
American Clinical Solutions, LLC   Healthcare   Class A Membership Units (6,030,384 units)   4/13/2020             3,198       4,905       4.3 %
                                             
                          6,948       8,470       7.4 %
                                             
AmeriMark Direct, LLC   Consumer Products   First Lien Debt (12.8% Cash, Due 9/8/21)   9/8/2016     9,270       9,261       9,177       8.1 %
                                             
                          9,261       9,177       8.1 %
                                             
BigMouth, Inc.   Consumer Products   First Lien Debt (9.0% Cash (1 month LIBOR + 8.5%, 0.5% Floor), Due 11/14/21) (7)   11/14/2016     1,866       1,268       998       0.9 %
                                             
                          1,268       998       0.9 %
                                             
BLST Operating Company, LLC   Online Merchandise Retailer   Second Lien Debt (10.0% (1 month LIBOR + 8.5%, 1.5% Floor), Due 8/28/25) (8)   8/28/2020     1,953       1,953       1,943       1.7 %
                                             
BLST Operating Company, LLC   Online Merchandise Retailer   Class A Common Units (217,013 units)   8/28/2020             286       2,699       2.4 %
                                             
                          2,239       4,642       4.1 %
                                             
Burke America Parts Group, LLC   Home Repair Parts Manufacturer   Membership Units (14 units)   4/30/2015             5       3,220       2.8 %
                                             
                          5       3,220       2.8 %
                                             
Chicken Soup for the Soul, LLC   Multi-platform media and consumer products   First Lien Debt (10.0% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 2/22/22) (6)   12/14/2018     10,045       10,045       10,045       8.8 %
                                             
                          10,045       10,045       8.8 %

  

  7  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition
Date
  Principal
Amount
    Cost     Fair Value     % of
Net Assets
 
Chief Fire Intermediate, Inc.   Security System Services   First Lien Debt (8.6% Cash (1 month LIBOR + 7.0%, 1.6% Floor), Due 11/8/24) (7)   11/8/2019    $ 8,100      $ 8,100      $ -       0.0 %
                                             
Chief Fire Intermediate, Inc.   Security System Services   Class A Preferred Units (34,740 units)   11/8/2019             913       -       0.0 %
                                             
Chief Fire Intermediate, Inc.   Security System Services   Class B Common Units (3,510 units)   11/8/2019             -       -       0.0 %
                                             
                          9,013       -       0.0 %
                                             
Corporate Visions, Inc.   Sales & Marketing Services   Second Lien Debt (11.0%, Due 11/29/21) (9)   5/29/2015     19,425       19,425       19,425       17.1 %
                                             
Corporate Visions, Inc.   Sales & Marketing Services   Common Stock (15,750 shares)   5/29/2015             1,575       2,510       2.2 %
                                             
                          21,000       21,935       19.3 %
                                             
Freedom Electronics, LLC   Electronic Machine Repair   First Lien Debt (7.0% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23)   6/1/2020     2,601       2,601       2,601       2.3 %
                                             
Freedom Electronics, LLC   Electronic Machine Repair   First Lien Debt (8.7% Cash, Due 12/20/23) (10)(11)   12/20/2018     5,676       5,676       5,676       5.0 %
                                             
Freedom Electronics, LLC   Electronic Machine Repair   Membership Units (181,818 units)   12/20/2018             182       220       0.2 %
                                             
                          8,459       8,497       7.5 %
                                             
HUMC Opco, LLC   Healthcare   First Lien Debt (9.0% Cash, Due 9/9/21) (6)   8/8/2019     4,833       4,833       4,833       4.2 %
                                             
                          4,833       4,833       4.2 %
                                             
J5 Infrastructure Partners, LLC   Wireless Deployment Services   First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24) (12)   12/20/2019     -       -       -       0.0 %
                                             
J5 Infrastructure Partners, LLC   Wireless Deployment Services   First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24)   12/20/2019     5,826       5,826       5,826       5.1 %
                                             
                          5,826       5,826       5.1 %
                                             
Jurassic Quest Holdings, LLC   Entertainment   First Lien Debt (9.5% Cash (1 month LIBOR + 7.5%, 2.0% Floor), Due 5/1/24)   5/1/2019     8,605       8,605       8,651       7.6 %
                                             
Jurassic Quest Holdings, LLC   Entertainment   Preferred Units (467,784 units)   5/1/2019             480       1,188       1.0 %
                                             
                          9,085       9,839       8.6 %
                                             
MicroHoldco, LLC   General Industrial   Preferred Units (740,237 units) (13)   7/25/2019             749       749       0.7 %
                                             
                          749       749       0.7 %
                                             
Rapid Fire Protection, Inc.   Security System Services   First Lien Debt (5.5% Cash (1 month LIBOR + 3.8%, 1.7% Floor), Due 11/22/24) (14)   6/1/2020     608       608       608       0.6 %
                                             
Rapid Fire Protection, Inc.   Security System Services   First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% floor), Due 2/28/22)   5/3/2021     3,000       3,000       3,000       2.6 %
                                             
Rapid Fire Protection, Inc.   Security System Services   First Lien Debt (8.9% Cash, Due 11/22/24) (10)(15)   11/22/2019     4,111       4,111       4,111       3.6 %
                                             
Rapid Fire Protection, Inc.   Security System Services   Common Stock (363 shares)   11/22/2019             500       5,469       4.8 %
                                             
                          8,219       13,188       11.6 %
                                             
Seitel, Inc.   Data Services   First Lien Debt (9.3% Cash (3 month LIBOR + 8.3%, 1.0% Floor), 2.0% PIK, Due 3/15/23)   3/15/2019     4,709       4,709       3,720       3.3 %
                                             
                          4,709       3,720       3.3 %

 

  8  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

  

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition
Date
  Principal
Amount
    Cost     Fair Value     % of
Net Assets
 
Sequoia Healthcare Management, LLC   Healthcare Management   First Lien Debt (12.8% Cash, Due 9/9/21) (6)(7)   8/21/2018    $ 11,935      $ 11,935      $ 8,763       7.7 %
                                             
                          11,935       8,763       7.7 %
                                             
Taylor Precision Products, Inc.   Household Product Manufacturer   Series C Preferred Stock (379 shares)   12/23/2014             758       287       0.3 %
                                             
                          758       287       0.3 %
                                             
U.S. BioTek Laboratories, LLC   Testing laboratories   First Lien Debt (7.0% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23)   6/1/2020     1,128       1,128       1,120       1.0 %
                                             
U.S. BioTek Laboratories, LLC   Testing laboratories   First Lien Debt (9.3% Cash, Due 12/14/23) (10) (11)   12/14/2018     3,509       3,509       3,479       3.1 %
                                             
U.S. BioTek Laboratories, LLC   Testing laboratories   Class A Preferred Units (500 Units)   12/14/2018             540       642       0.5 %
                                             
U.S. BioTek Laboratories, LLC   Testing laboratories   Class C Units (578 Units)   12/14/2018             1       116       0.1 %
                                             
U.S. BioTek Laboratories, LLC   Testing laboratories   Class D Preferred Units (78 Units)   4/3/2020             78       95       0.1 %
                                             
                          5,256       5,452       4.8 %
                                             
U.S. Well Services, Inc.   Oil & Gas Services   Class A Common Stock (1,202,499 shares) (16)   11/9/2018             1,244       1,214       1.1 %
                                             
                          1,244       1,214       1.1 %
                                             
                                             
Sub Total Non-control/non-affiliated investments - United States                       $ 143,555     $ 139,097       122.3 %
                                             
Affiliate Investments- 71.8%                                            
                                             
Affiliate investments - United States                                            
                                             
Burgaflex Holdings, LLC   Automobile Part Manufacturer   Common Stock Class B (1,085,073 shares)   5/7/2019           $ 362     $ 1,444       1.3 %
                                             
Burgaflex Holdings, LLC   Automobile Part Manufacturer   Common Stock Class A (1,253,198 shares)   7/15/2014             1,504       945       0.8 %
                                             
                          1,866       2,389       2.1 %
                                             
Eastport Holdings, LLC   Business Services   Second Lien Debt (13.5% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 12/29/21) (6)   1/12/2016     16,500       16,414       16,500       14.5 %
                                             
Eastport Holdings, LLC   Business Services   Membership Units (22.9% ownership)   1/12/2016             3,263       23,259       20.5 %
                                             
                          19,677       39,759       35.0 %
                                             
GA Communications, Inc.   Advertising & Marketing Services   Series A-1 Preferred Stock (1,998 shares)   10/14/2011             3,477       4,150       3.7 %
                                             
GA Communications, Inc.   Advertising & Marketing Services   Series B-1 Common Stock (200,000 shares)   10/14/2011             2       360       0.3 %
                                             
                          3,479       4,510       4.0 %
                                             
LJS Partners, LLC   QSR Franchisor   Preferred Units (202,336 units)   8/12/2019             437       783       0.7 %
                                             
LJS Partners, LLC   QSR Franchisor   Common Membership Units (2,593,234 units)   1/1/2012             1,224       4,944       4.3 %
                                             
                          1,661       5,727       5.0 %

  

  9  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition
Date
  Principal
Amount
    Cost     Fair Value     % of
Net Assets
 
MMI Holdings, LLC   Medical Device Distributor   First Lien Debt (12.0% Cash, Due 9/30/21) (6)   10/17/2011    $ 2,600      $ 2,600      $ 2,600       2.3 %
                                             
MMI Holdings, LLC   Medical Device Distributor   Second Lien Debt (6.0% Cash, Due 9/30/21) (6)   10/17/2011     400       388       400       0.4 %
                                             
MMI Holdings, LLC   Medical Device Distributor   Preferred Units (1,000 units, 6.0% PIK Dividend) (17)   10/17/2011             1,731       1,850       1.5 %
                                             
MMI Holdings, LLC   Medical Device Distributor   Common Membership Units (45 units)   10/17/2011             -       80       0.1 %
                                             
                          4,719       4,930       4.3 %
                                             
Navis Holdings, Inc.   Textile Equipment Manufacturer   First Lien Debt (9.0% Cash, 2.0% PIK, Due 6/30/23) (6)   2/1/2011     10,640       10,640       10,377       9.1 %
                                             
Navis Holdings, Inc.   Textile Equipment Manufacturer   Class A Preferred Stock (1,000 shares)   2/1/2011             1,000       1,000       0.9 %
                                             
Navis Holdings, Inc.   Textile Equipment Manufacturer   Common Stock (60,000 shares)   2/1/2011             -       463       0.4 %
                                             
                          11,640       11,840       10.4 %
                                             
Nth Degree Investment Group, LLC   Business Services   Membership Units (6,088,000 Units)   12/3/2019             6,088       -       0.0 %
                                             
                          6,088       -       0.0 %
                                             
RAM Payment, LLC   Financial Services   First Lien Debt (6.5% Cash (1 month LIBOR + 5.0%), 1.5% Floor), Due 1/4/24)   6/1/2020     2,035       2,035       2,035       1.8 %
                                             
RAM Payment, LLC   Financial Services   First Lien Debt (9.8% Cash, Due 1/4/24) (10)   1/4/2019     5,516       5,516       5,516       4.8 %
                                             
RAM Payment, LLC   Financial Services   Preferred Units (86,000 units, 8.0% PIK Dividend) (17)   1/4/2019             1,031       3,494       3.1 %
                                             
                          8,582       11,045       9.7 %
                                             
Sierra Hamilton Holdings Corporation   Oil & Gas Engineering and Consulting Services   Second Lien Debt (15.0%, Due 9/12/23) (18)   9/12/2019     3       3       3       0.0 %
                                             
Sierra Hamilton Holdings Corporation   Oil & Gas Engineering and Consulting Services   Common Stock (15,068,000 shares)   7/31/2017             6,958       955       0.8 %
                                             
                          6,961       958       0.8 %
                                             
V12 Holdings, Inc.   Data Processing & Digital Marketing   Second Lien Debt (13)   11/21/2016             490       501       0.5 %
                                             
                          490       501       0.5 %
                                             
Sub Total Affiliate investments - United States                       $ 65,163     $ 81,659       71.8 %

  

  10  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition
Date
  Principal
Amount
    Cost     Fair Value     % of
Net Assets
 
Control Investments - 6.4%                                            
                                             
Control investments - United States                                            
                                             
Vology, Inc.   Information Technology   First Lien Debt (10.5% Cash (1 month LIBOR + 8.5%, 2.0% Floor), Due 12/31/21)   11/25/2019   $ 3,635     $ 3,635     $ 3,635       3.2 %
                                             
Vology, Inc.   Information Technology   Class A Preferred Units (9,041,810 Units)   11/25/2019             5,215       3,657       3.2 %
                                             
Vology, Inc.   Information Technology   Membership Units (5,363,982 Units)   11/25/2019             -       -       0.0 %
                                             
                          8,850       7,292       6.4 %
                                           
Sub Total Control investments - United States                       $ 8,850     $ 7,292       6.4 %
                                             
TOTAL INVESTMENTS - 200.5%                       $ 217,568     $ 228,048       200.5 %

 

 

 

(1) All investments valued using unobservable inputs (Level 3), unless otherwise noted.

(2) All investments valued by the Logan Ridge Finance Corporation's (the "Company") board of directors.

(3) All debt investments are income producing, unless otherwise noted. Equity and warrant investments are non-income producing, unless otherwise noted.

(4) Percentages are based on net assets as of June 30,2021.

(5) The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act.

(6) The maturity date of the original investment has been extended.

(7) Non-accrual investment.

(8) 1.0% of interest rate payable in cash. 9.0% of interest rate payable in cash or paid-in-kind at borrower's election. The borrower is currently paying all interest in cash.

(9) 9.0% of interest rate payable in cash. 2.0% of interest rate payable in cash or paid-in-kind at borrower's election. The borrower is currently paying all interest in cash.

(10) The cash rate equals the approximate current yield on our last-out portion of the unitranche facility.

(11) The investment has a $1.0 million unfunded commitment.

(12) The investment has a $3.5 million unfunded commitment.

(13) The investment has been exited or sold. The residual value reflects estimated earnout, escrow, or other proceeds expected post-closing.

(14) The investment has a $3.0 million unfunded commitment.

(15) The investment has a $1.3 million unfunded commitment.

(16) Investment is valued using observable inputs (Level 1). The stock of the company is traded on the NASDAQ Capital Market under the ticker "USWS."

(17) The equity investment is income producing, based on rate disclosed.

(18) 15.0% of interest rate payable in cash or paid-in-kind at borrower's election.

 

  11  

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2020

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry   Type of Investment   Acquisition Date   Principal Amount     Cost     Fair Value     % of
Net Assets
 
Non-control/non-affiliated investments - 158.7%                                            
                                             
Non-control/non-affiliated investments - United States                                            
                                             
3 Bridge Solutions, LLC   IT Consulting   First Lien Debt (13.0% Cash, Due 12/4/22)   12/4/2017   $ 12,083     $ 12,083     $ 12,083       11.1 %
                                             
3 Bridge Solutions, LLC   IT Consulting   Preferred Units (965 units)   12/4/2017             1,090       1,116       1.0 %
                                             
3 Bridge Solutions, LLC   IT Consulting   Membership Units (39,000 units)   12/4/2017             10       -       0.0 %
                                             
                          13,183       13,199       12.1 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   First Lien Debt (8.0% Cash, Due 12/18/22)   6/25/2020     7,119       7,119       7,119       6.5 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series A Preferred Units (13,275 units)   6/25/2020             1,275       1,327       1.2 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series B Preferred Units (46,160 units)   6/25/2020             3,943       2,898       2.7 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Series C Preferred Units (78,900 units)   6/25/2020             -       -       0.0 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Membership Units (20,092 units)   12/18/2017             800       -       0.0 %
                                             
Alternative Biomedical Solutions, LLC   Healthcare   Membership Unit Warrants (49,295 units)   6/25/2020             -       -       0.0 %
                                             
                          13,137       11,344       10.4 %
                                             
American Clinical Solutions, LLC   Healthcare   First Lien Debt (7.0% Cash, Due 12/31/22)   12/31/2019     3,500       3,500       3,474       3.2 %
                                             
American Clinical Solutions, LLC   Healthcare   First Lien Debt (7.0% Cash, Due 6/30/21) (6)   4/13/2020     250       250       250       0.2 %
                                             
American Clinical Solutions, LLC   Healthcare   Class A Membership Units (6,030,384 units)   4/13/2020             3,198       3,831       3.5 %
                                             
                          6,948       7,555       6.9 %
                                             
AmeriMark Direct, LLC   Consumer Products   First Lien Debt (14.0% Cash, 1.3% PIK, Due 9/8/21)   9/8/2016     14,705       14,649       14,649       13.5 %
                                             
                          14,649       14,649       13.5 %
                                             
BigMouth, Inc.   Consumer Products   First Lien Debt (9.0% Cash (1 month LIBOR + 8.5%, 0.5% Floor), Due 11/14/21) (7)   11/14/2016     1,866       1,268       1,000       0.9 %
                                             
                          1,268       1,000       0.9 %
                                             
BLST Operating Company, LLC   Online Merchandise Retailer   Second Lien Debt (10.0% (1 month LIBOR + 8.5%, 1.5% Floor), Due 8/28/25) (8)   8/28/2020     1,953       1,953       1,953       1.8 %
                                             
BLST Operating Company, LLC   Online Merchandise Retailer   Class A Common Units (217,013 units)   8/28/2020             286       300       0.3 %
                                             
                          2,239       2,253       2.1 %
                                             
Burke America Parts Group, LLC   Home Repair Parts Manufacturer   Membership Units (14 units)   4/30/2015             5       2,461       2.3 %