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
Common Stock
Our common stock began trading on the Nasdaq Global Market on February 4, 2022 under the symbol “SSIC” in connection with our IPO of shares of our common stock.
The following table lists the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock
reported on the Nasdaq Global Market, the closing sale prices as a premium (or discount) to our net asset value per share and dividends per share for each fiscal quarter since our common stock began trading on the Nasdaq Global Market. On March
22, 2024, the last reported closing sales price of our common stock on the Nasdaq Global Market was $9.80 per share, which represented a discount of approximately 28.8% to our net asset value per share of $13.77 as of December 31, 2023.
Price Range
Class and Period
Net Asset Value (1)
High
Low
High Sales Price Premium (Discount) to Net Asset Value (2)
Low Sales Price Premium (Discount) to Net Asset Value (2)
Cash Dividend Per Share (3)
Year Ended December 31, 2024
First Quarter (Through March 22, 2024)
*
$
10.28
$
7.65
*
*
0.25
(6)
Year Ended December 31, 2023
Fourth Quarter
$
13.77
$
9.81
$
8.32
-28.8
%
-39.6
%
0.70
(7)
Third Quarter
$
14.06
$
10.37
$
7.65
-26.3
%
-45.6
%
0.63
(7)
Second Quarter
$
14.49
$
9.19
$
7.82
-36.3
%
-45.8
%
-
First Quarter
$
14.29
$
9.98
$
8.25
-30.2
%
-42.3
%
-
Year Ended December 31, 2022 (4)
Fourth Quarter
$
13.91
$
10.55
$
9.57
-24.2
%
-31.2
%
-
Third Quarter
$
13.73
$
10.74
$
9.00
-21.8
%
-34.5
%
-
Second Quarter
$
13.64
$
13.50
$
7.80
-1.0
%
-42.8
%
-
First Quarter (5)
$
13.61
$
14.41
$
12.57
5.9
%
-7.6
%
-
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(1)
Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset
values shown are based on outstanding shares at the end of the relevant quarter.
(2)
Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the end of the applicable quarter).
(3)
Represents the dividend or distribution declared in the relevant quarter.
(4)
On November 8, 2022, our Board of Directors approved a change to our fiscal year end from March 31 to December 31 .
(5)
Shares of our common stock began trading on the Nasdaq Global Market on February 4, 2022 under the trading symbol “SSIC.”
(6)
The dividend is payable on March 28, 2024 to stockholders of record on March 20, 2024.
(7)
Consists of a quarterly dividend and a special dividend.
* Not determined at time of filing.
Shares of BDCs may trade at a market price that is less than the value of the net assets attributable to those shares. At times, our shares of common stock have traded at prices both above and below our net asset value
per share. The possibility that our shares of common stock will trade at a discount from net asset value per share or at premiums that are unsustainable over the long term are separate and distinct from the risk that our net asset value per share
will decrease. It is not possible to predict whether our common stock will trade at, above, or below net asset value per share.
Holders
As of March 22, 2024, there were approximately 3 holders of record of our common stock, which does not include stockholders for whom shares are held in
“nominee” or “street name.”
Distributions
To the extent that we have income available, we intend to make quarterly distributions to our stockholders beginning after our first full year of operations. The amount of our distributions, if any, will be determined
by our Board of Directors.
We have elected to be treated, and intend to qualify annually to be treated, as a RIC under Subchapter M of the Code, for U.S. federal income tax purposes, commencing with our taxable year ended March 31, 2022. As long
as we qualify as a RIC, we will not be taxed on our investment company taxable income or realized net capital gains, to the extent that such taxable income or gains are distributed, or deemed to be distributed, to stockholders on a timely basis.
To obtain and maintain RIC tax treatment, we must distribute (or be deemed to distribute) at least 90% of the sum of our: investment company taxable income (which is generally our ordinary income plus the excess of
realized short-term capital gains over realized net long-term capital losses), determined without regard to the deduction for dividends paid, for such taxable year; and net tax-exempt interest income (which is the excess of our gross tax-exempt
interest income over certain disallowed deductions) for such taxable year.
As a RIC, we (but not our stockholders) generally will not be subject to U.S. federal tax on investment company taxable income and net capital gains that we distribute to our stockholders. The discussion below assumes
that we will qualify to be treated as a RIC for U.S. federal tax purposes each year.
We intend to distribute annually all or substantially all of such income. To the extent that we retain our net capital gains or any investment company taxable income, we generally will be subject to corporate-level
U.S. federal income tax. We can be expected to carry forward our net capital gains or any investment company taxable income in excess of current-year dividend distributions, and pay the U.S. federal excise tax as described below.
Depending on the level of taxable income earned in a tax year, we may choose to carry forward taxable income in excess of current-year distributions into the next tax year. We will be subject to a 4% excise tax on a
certain portion of these undistributed amounts. Please refer to “Item 1. Business — Material U.S. Federal Income Tax Considerations” for further information regarding the consequences of our retention of net capital gains. We may, in the future, make
actual distributions to our stockholders of our net capital gains. We can offer no assurance that we will achieve results that will permit the payment of any cash distributions and, if we issue senior securities, we may be prohibited from making
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. See “Item 1. Business — Business Development Company Regulations” and
“Item 1. Business —Material U.S. Federal Income Tax Considerations.”
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While we intend to distribute any income and capital gains in the manner necessary to minimize imposition of the 4% U.S. federal excise tax, sufficient amounts of our taxable income and capital gains may not be
distributed and as a result, in such cases, the excise tax will be imposed. In such an event, we will be liable for this tax only on the amount by which we do not meet the foregoing distribution requirement.
We intend to pay quarterly distributions to our stockholders out of assets legally available for distribution. All distributions will be paid at the discretion of our Board of Directors and will depend on our earnings,
financial condition, maintenance of our tax treatment as a RIC, compliance with applicable BDC regulations and such other factors as our Board of Directors may deem relevant from time to time.
To the extent our current taxable earnings for a year fall below the total amount of our distributions for that year, a portion of those distributions may be deemed a return of capital to our stockholders for U.S.
federal income tax purposes. Thus, the source of a distribution to our stockholders may be the original capital invested by the stockholder rather than our income or gains. Stockholders should read written disclosure carefully and should not assume
that the source of any distribution is our ordinary income or gains.
A return of capital is a return of a portion of your original investment in shares of our common stock. As a result, a return of capital will (i) lower your tax basis in your shares and thereby increase the amount of
capital gain (or decrease the amount of capital loss) realized upon a subsequent sale or redemption of such shares and (ii) reduce the amount of funds we have for investment in portfolio companies. We have not established any limit on the extent to
which we may use offering proceeds to fund distributions. However, our Board of Directors, including a majority of our independent directors, will be required to determine that making return of capital distributions from our offering proceeds is in
the best interests of our stockholders based upon our then-current financial condition and our expected future growth prospects.
The following table summarizes distributions declared and/or paid by the Company since inception:
Declaration Date
Type
Record Date
Payment Date
Per Share
Amount
Dividends Paid
August 10, 2023
Quarterly
September 15, 2023
September 29, 2023
$
0.23
$
1,429,375
August 10, 2023
Special
September 15, 2023
September 29, 2023
$
0.40
$
2,485,869
November 9, 2023
Quarterly
December 20, 2023
December 29, 2023
$
0.25
$
1,553,676
November 9, 2023
Special
December 20, 2023
December 29, 2023
$
0.45
$
2,796,617
Dividend Reinvestment Plan
We have adopted an “opt out” dividend reinvestment plan (the “DRIP”) for our stockholders. As a result, if we declare a dividend, then stockholders’
cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions. Stockholders who receive distributions in the
form of shares of our common stock generally are subject to the same U.S. federal income tax consequences as are stockholders who elect to receive their distributions in cash.
During the year ended December 31, 2023, the Company issued the following shares of common stock under the DRIP:
Declaration Date
Type
Record Date
Payment Date
Shares
August 10, 2023
Quarterly
September 15, 2023
September 29, 2023
12
August 10, 2023
Special
September 15, 2023
September 29, 2023
21
November 9, 2023
Quarterly
December 20, 2023
December 29, 2023
84
November 9, 2023
Special
December 20, 2023
December 29, 2023
152
During the year ended December 31, 2022, the Company issued no new shares of common stock under the DRIP.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the fiscal years ended December 31, 2023 or December 31, 2022.
Unregistered Sales of Equity Securities
During the year ended December 31, 2023, we issued 269 shares of common stock for a total of approximately
$2,318 under the DRIP. These issuances were not subject to the registration requirements of the Securities Act. During the year ended December 31, 2022, we issued no new shares of common stock under the DRIP.
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Performance Graph
The following stock performance graph compares the cumulative stockholder return of an investment in our common stock, and the S&P BDC Index, S&P 500 Index and NASDAQ Financial 100 Index.
The graph measures total shareholder return, which takes into account both changes in stock price and distributions. It assumes that distributions paid are reinvested in like securities prior to any tax effect.
* Assumes $100 invested on 2/4/2022 (first date our common stock began trading on the Nasdaq Global Market) in each of our common stock and the S&P BDC
Index, S&P 500 Index and NASDAQ Financial 100 Index, including reinvestment of dividends.
The stock price performance included in the above performance graph is based on historical data and is not necessarily indicative of future stock performance. The performance graph and other
information furnished under Part II. Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.
Item 6.
[Reserved]