What changed in this filing

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Item 1A. Risk Factors

2021-04-30 compared with 2020-10-30 · 27 added, 25 removed, 788 unchanged (6% of the section changed)

2 unchanged sentences

The risk factors generally have been separated into the following categories:

risks related to our business, risks related to our Manager, risks related to taxation and risks related to our common shares.

risks related to our business, risks related to our Manager, risks related to taxation, risks related to our common shares and general risks.

However, these categories do overlap and should not be considered exclusive.

Risks Related to Our Business

The current outbreak of the novel coronavirus (COVID-19) has severely disrupted the global economy and may have, and the emergence of similar crises could have, material adverse effects on our business, results of operations or financial condition.

The COVID-19 pandemic has severely disrupted the global economy and may have, and the emergence of similar crises could have, material adverse effects on our business, results of operations or financial condition.

In recent years, the outbreaks of certain highly contagious diseases have increased the risk of a pandemic resulting in economic disruptions.

In particular, the COVID-19 outbreak, which has been declared a global pandemic, has led to severe disruptions in the market and the global, U.S.

In particular, the ongoing COVID-19 pandemic has led to severe disruptions in the market and the global, U.S.

and regional economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown.

In response, various governmental bodies and private enterprises have implemented numerous measures to mitigate the outbreak, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

The COVID-19 outbreak continues to be dynamic and expanding, and its ultimate scope, duration and effects remain uncertain.

The COVID-19 outbreak continues to be dynamic and evolving, including a resurgence of COVID-19 cases in certain geographies, and its ultimate scope, duration, effects and the availability of vaccines remain uncertain.

We expect that this pandemic, and any future epidemic or pandemic crises, could result in direct and indirect adverse effects on our industry and customers, which in turn may impact our business, results of operations and financial condition.

1 unchanged sentence

• deterioration of worldwide, regional or national economic conditions and activity, which could further reduce or prolong the recent significant declines in energy prices, or adversely affect global demand for crude oil and petroleum products, demand for our services, and time charter and spot rates;

• disruptions to our operations as a result of the potential health impact on our employees and crew, and on the workforces of our customers and business partners;

• disruptions to our operations as a result of the potential health impact, such as the availability and efficacy of vaccines, on our employees and crew, and on the workforces of our customers and business partners;

• disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions, increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements;

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For some years, the world has experienced weakened economic conditions and volatility following adverse changes in global capital markets.

Excess supply in oil and gas markets can put significant downward pressure on prices for these commodities, and may affect demand for assets

used in production, refining and transportation of oil and gas.

Excess supply in oil and gas markets can put significant downward pressure on prices for these commodities, and may affect demand for assets used in production, refining and transportation of oil and gas.

In the past, a significant decline in oil prices has led to lower offshore exploration and production budgets worldwide.

These conditions have resulted in significant contraction, deleveraging and reduced liquidity in the credit markets.

These conditions have resulted in significant contraction, deleveraging

and reduced liquidity in the credit markets.

A number of governments have implemented, or are considering implementing, a broad variety of governmental actions or new regulations for the financial markets.

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Financial services regulators and industry groups are evaluating the phase-out of LIBOR and the development of alternate reference rate indices or reference rates.

On November 30, 2020, ICE Benchmark Administration, or the IBA, the administrator of LIBOR, with the support of the United States Federal Reserve and the FCA, announced plans to consult on ceasing publication of LIBOR on December 31, 2021, for only the one-week and two-month LIBOR tenors, and on June 30, 2023, for all other LIBOR tenors.

Federal Reserve concurrently issued a statement advising banks to stop new LIBOR issuances by the end of 2021.

On March 5, 2021, the IBA Benchmark Administration confirmed its intention to cease publication of (i) one week and two month USD LIBOR settings after December 31, 2021 and (ii) the remaining USD LIBOR settings after June 30, 2023.

In the United States, the Alternative Reference Rate Committee (“ARRC”), a group of diverse private-market participants assembled by the Federal Reserve Board and the Federal Reserve Bank of New York, was tasked with identifying alternative reference rates to replace LIBOR.

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At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from LIBOR is anticipated to be gradual over the coming years.

As of September 30, 2020, we had $25.0 million of total debt outstanding under facilities with interest rates based on floating-rate indices.

As of March 31, 2021, we had $175.0 million of total debt outstanding under facilities with interest rates based on floating-rate indices.

We cannot predict what reference rate would be agreed upon or what the impact of any such replacement rate would be to our interest expense.

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government securities and cash items) on an unconsolidated basis.

Excluded from the term “investment

securities,” among other things, are U.S.

Excluded from the term “investment securities,” among other things, are U.S.

government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company for certain privately-offered investment vehicles set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

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From time to time, affiliates of Fortress focus on investments in assets with a similar profile as our target assets that we may seek to acquire.

These affiliates may have meaningful purchasing capacity, which may change over time depending upon a variety of factors, including, but not limited to, available equity capital and debt financing, market conditions and cash on hand.

affiliates may have meaningful purchasing capacity, which may change over time depending upon a variety of factors, including, but not limited to, available equity capital and debt financing, market conditions and cash on hand.

Fortress has multiple existing and planned funds focused on investing in one or more of our target sectors, each with significant current or expected capital commitments.

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Our asset acquisition strategy may evolve in light of existing market conditions and investment opportunities, and this evolution may involve additional risks depending upon the nature of the assets we target and our ability to finance such assets on a short or long-term basis.

Opportunities that present unattractive risk-return profiles relative to other available opportunities under particular market conditions may become relatively attractive under changed market conditions and changes in market conditions may therefore result in changes in the assets we target.

may therefore result in changes in the assets we target.

Decisions to make acquisitions in new asset categories present risks that may be difficult for us to adequately assess and could therefore reduce or eliminate our ability to pay dividends on our common shares or have adverse effects on our liquidity or financial condition.

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In such event, U.S.

holders of our common shares will be subject to imputed interest charges and other disadvantageous tax treatment with respect

to certain “excess distributions” from the PFIC and gain realized upon the direct or indirect sale of the PFIC (including through the sale our common shares).

holders of our common shares will be subject to imputed interest charges and other disadvantageous tax treatment with respect to certain “excess distributions” from the PFIC and gain realized upon the direct or indirect sale of the PFIC (including through the sale our common shares).

Prospective investors should consult their tax advisors regarding the potential impact of the rules regarding CFCs and PFICs before investing in our shares.

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corporation) at any time during such 5-year period because of our current or previous ownership of U.S.

real property interests above a certain

threshold, such non-U.S.

real property interests above a certain threshold, such non-U.S.

person may be subject to U.S.

36 unchanged sentences

Such a limitation could occur if our corporate subsidiaries were to experience an “ownership change” as defined under Section 382 of the Code.

The rules for determining ownership changes are complex, and changes in the ownership of our shares could cause an ownership change in one or more of our corporate subsidiaries.

The rules for determining ownership changes are complex, and changes in the ownership of our shares could

cause an ownership change in one or more of our corporate subsidiaries.

Sales of our shares by our shareholders, as well as future issuances of our shares, could contribute to a potential ownership change in our corporate subsidiaries.

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federal income tax law for which no clear precedent or authority may be available.

were previously made, and could adversely affect the value of our shares or cause us to change the way we conduct our business.

federal income tax treatment of our shareholders may also be modified by administrative, legislative or judicial interpretation at any time, possibly on a retroactive basis, and any such action may affect our investments and commitments that were previously made, and could adversely affect the value of our shares or cause us to change the way we conduct our business.

Our organizational documents and agreements permit the board of directors to modify our operating agreement from time to time, without the consent of shareholders, in order to address certain changes in Treasury regulations, legislation or interpretation.

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Similarly, if a shareholder acquires additional common shares, it might be allocated income, gain, loss, and deduction realized by us prior to its ownership of such common shares.

Consequently, our shareholders may recognize income in excess of cash distributions received from us, and any income so included by a shareholder would increase the basis such shareholder has in its common shares and would offset any gain (or increase the amount of loss) realized by such shareholder on a subsequent disposition of its common shares.

Consequently, our shareholders may recognize income in excess of cash distributions received from us, and any income so included by a shareholder would increase the basis such

shareholder has in its common shares and would offset any gain (or increase the amount of loss) realized by such shareholder on a subsequent disposition of its common shares.

Rules regarding U.S.

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We have initially reserved 30,000,000 common shares for issuance under the Incentive Plan.

As of September 30, 2020, rights relating to 2,243,692 of our common shares were outstanding under the Incentive Plan.

In the future on the date of any equity issuance by us during the ten-year term of the Incentive Plan (including in respect of securities issued as consideration in an acquisition), the maximum number of shares available for issuance under the Plan will be increased to include an additional number of common shares equal to ten percent (10%) of either (i) the total number of common shares newly issued by us in such equity issuance or (ii) if such equity issuance relates to equity securities other than our common shares, a number of our common shares equal to 10% of (A) the gross capital raised in an equity issuance of equity

securities other than common shares during the ten-year term of the Incentive Plan, divided by (B) the fair market value of a common share as of the date of such equity issuance.

As of March 31, 2021, rights relating to 2,599,624 of our common shares were outstanding under the Incentive Plan.

Sales or issuances of our common shares could adversely affect the market price of our common shares.

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Our net cash provided by operating activities has been less than the amount of distributions to our shareholders.

The declaration and payment of dividends to holders of our common shares will be at the discretion of our board of directors in accordance with applicable law after taking into account various factors, including actual results of operations, liquidity and financial condition, net cash provided by operating activities, restrictions imposed by applicable law, our taxable income, our operating expenses and other factors our board of directors deem relevant.

liquidity and financial condition, net cash provided by operating activities, restrictions imposed by applicable law, our taxable income, our operating expenses and other factors our board of directors deem relevant.

Our long term goal is to maintain a payout ratio of between 50-60% of funds available for distribution, with remaining amounts used primarily to fund our future acquisitions and opportunities.

30 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors