Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
There is currently no market for our securities, and we do not expect that a market for our shares will develop in the future. We are prohibited under the 1940 Act from selling our shares of Common Stock at an offering price, after deducting selling commissions and dealer manager fees, that is below our net asset value per share unless we obtain stockholder approval. In connection with any issuance of shares of our Common Stock, our Board of Directors or a committee thereof will review the then current offering price per share against the current estimated net asset value per share to ensure that we were not selling shares of our common stock at a price which, after deducting selling commissions and dealer manager fees, was below our net asset value per share.
Set forth below is a chart describing the classes of our securities outstanding as of December 31, 2020:
Title of Class Amount Authorized Amount Issued
Common Stock, par value $0.001 per share 450,000,000 100
As of December 31, 2020, we issued 100 shares of Common Stock to BSP Fund Holdco (Debt Strategy) L.P., a wholly-owned subsidiary of Benefit Street Partners, in connection with the Conversion.
Distributions
To maintain our RIC qualification, we must, among other things, distribute at least 90% of our net ordinary income and net short-term capital gain in excess of net long-term capital loss, if any, to our stockholders. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute, or be deemed to distribute, during each calendar year an amount at least equal to the sum of: (1) 98% of our net ordinary income for the calendar year; (2) 98.2% of our capital gain in excess of capital loss for the calendar year; and (3) any net ordinary income and net capital gain for preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. We can offer no assurance that we will achieve results that will permit the payment of any distributions and, if we issue senior securities, we will be prohibited from paying distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.
Our Board of Directors intends to declare and pay distributions on a quarterly basis. We have a distribution reinvestment plan (the “DRIP”) pursuant to which we reinvest all cash dividends or distributions declared by our Board of Directors on behalf of investors who do not elect to receive their distributions in cash as described below (the “Participants”). As a result, if our Board of Directors declares a distributions, then stockholders who have not elected to “opt out” of the DRIP will have their distributions automatically reinvested in additional shares of our Common Stock at a price equal to NAV per share as estimated in good faith by us on the payment date. The timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of our Board of Directors.
We have not established limits on the amount of funds we may use from available sources to fund distributions. We may have distributions which could be characterized as a return of capital for tax purposes.
Sales of Unregistered Securities
The Company was formed on January 29, 2020 as a limited liability company. Effective September 23, 2020, the Company converted into a Delaware corporation. Immediately after the conversion, the Company sold 100 shares of its common stock, par value $0.001 per share, to BSP Fund Holdco (Debt Strategy) L.P., a wholly-owned subsidiary of Benefit Street Partners, at a price of $15.00 per share, which was paid in cash to the Company. The shares of Common Stock were sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act.
We have entered into Subscription Agreements with a number of investors for the private placement of shares of Common Stock. Under the terms of the Subscription Agreements, investors are required to make capital contributions to purchase shares of our Common Stock at a price at least equal to the net asset value per share as determined within no more than 48 hours of share issuance up to the amount of their respective Capital Commitments on an as-needed basis as determined by us with at least 10 business days’ prior notice.
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ITEM 6. SELECTED FINANCIAL DATA
The statement of operations data, per share data, and statement of assets and liabilities data as of and for the period from January 29, 2020 (date of inception) to December 31, 2020 are derived from our audited financial statements which are filed with the SEC. This selected financial data should be read in conjunction with our financial statements and related notes thereto and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report.
As of and for the period from January 29, 2020 (date of inception) to December 31, 2020
Statement of Operations Data:
Total investment income $ —
Total expenses 413,515
Net loss (413,515)
Net decrease in net assets resulting from operations $ (413,515)
Per Share Data:
Net loss $ (4,135)
Net decrease in net assets resulting from operations $ (4,135)
Distributions declared $ —
Statement of Assets and Liabilities Data:
Total assets $ 604,628
Total liabilities $ 1,016,643
Total net assets $ (412,015)
Other Data:
Number of portfolio company investments at year end —
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