RESULTS OF OPERATIONS
Results comparisons are for the three and six months ended June 30, 2021 and 2020:
Investment Income
For the three and six
months ended June 30, 2021, gross investment income totaled $7.5 million and $14.1 million, respectively. For the three and six months ended June 30, 2020, gross investment income totaled $7.9 million and $16.6 million,
respectively. The decrease in gross investment income for the year over year three month periods was primarily due to a reduction in the size of the income producing portfolio.
Expenses
Net expenses totaled
$3.6 million and $7.0 million, respectively, for the three and six months ended June 30, 2021, of which $1.0 million and $1.9 million, respectively, were gross base management fees and gross performance-based incentive fees
and $1.7 million and $3.5 million, respectively, were interest and other credit facility expenses. Over the same periods, no management or performance-based incentive fees were waived. Administrative services and other general and
administrative expenses totaled $0.9 million and $1.6 million, respectively, for the three and six months ended June 30, 2021. Net expenses totaled $2.8 million and $5.9 million, respectively, for the three and six months
ended June 30, 2020, of which $1.1 million and $2.2 million, respectively, were gross base management fees and gross performance-based incentive fees and $2.1 million and $4.2 million, respectively, were interest and other
credit facility expenses. Over the same periods, $1.0 and $2.0 million, respectively, of base management and incentive fees were waived. Administrative services and other general and administrative expenses totaled $0.6 million and
$1.5 million, respectively, for the three months ended June 30, 2020. Expenses generally consist of management fees, performance-based incentive fees, administrative services expenses, insurance, legal expenses, directors expenses,
audit and tax expenses, transfer agent fees and expenses, and other general and administrative expenses. Interest and other credit facility expenses generally consist of interest, unused fees, agency fees and loan origination fees, if any, among
others. The increase in net expenses year over year is primarily due to a decrease in the waivers of fees.
Net Investment
Income
The Companys net investment income totaled $4.0 million and $7.1 million, or $0.25 and $0.44, per average
share, respectively, for the three and six months ended June 30, 2021. The Companys net investment income totaled $5.1 million and $10.8 million, or $0.32 and $0.67, per average share, respectively, for the three and six months
ended June 30, 2020.
Net Realized Gain (Loss)
The Company had investment sales and prepayments totaling approximately $39.8 million and $52.6 million, respectively, for the three
and six months ended June 30, 2021. Net realized gains (losses) over the same periods were ($0.01) million and ($0.04) million, respectively. The Company had investment sales and prepayments totaling approximately $3.8 million and
$76.9 million, respectively, for the three and six months ended June 30, 2020. Net realized gains (losses) over the same periods were ($0.01) million and $0.1 million, respectively. Net realized losses for the above periods were
immaterial.
Net Change in Unrealized Gain (Loss)
For the three and six months ended June 30, 2021, net change in unrealized gain (loss) on the Companys assets and liabilities
totaled $0.3 million and $1.9 million, respectively. For the three and six months ended June 30, 2020, net change in unrealized gain (loss) on the Companys assets and liabilities totaled $15.4 million and ($12.4) million,
respectively. Net unrealized gain for the three months ended June 30, 2021 is primarily due to appreciation on our investments in Foundation Consumer Brands, LLC, Composite Technology Acquisition Corp. and PPT Management Holdings, LLC, among
others, as well as the reversal of previously recognized unrealized depreciation in our investment in World Insurance LLC, partially offset by depreciation in our investment in American Teleconferencing Services, Ltd., among others, as well as the
reversal of previously recognized unrealized appreciation in our investment in Genmark Diagnostics, Inc. Net unrealized gain for the six months ended June 30, 2021 is primarily due to appreciation on our investments in Composite Technology
Acquisition Corp., DISA Holdings Acquisition Subsidiary Corp. and Foundation Consumer Brands, LLC, among others, as well as the reversal of previously recognized unrealized depreciation in our investment in World Insurance LLC, partially offset by
depreciation in our investments in American Teleconferencing Services, Ltd. and Logix Holding Company, LLC, among others. Net unrealized gain for the three months ended June 30, 2020 is primarily due to appreciation on our investments in North
Mill Holdco LLC, Confie Seguros Holding II Co., Capstone Logistics Acquisition, Inc. and Aegis Toxicology Sciences Corp., among others. Net unrealized loss for the six months ended June 30, 2020 is primarily due to depreciation on our
investments in North Mill Capital LLC, Confie Seguros Holding II Co., Composite Technology Acquisition Corp. and Gemino Healthcare Finance, LLC, among others.
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