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• Economic, political and market conditions may adversely affect our business, results of operations and financial condition.
−Removed: • We are exposed to risks associated with changes in interest rates.
+Added: • We are exposed to risks associated with changes in interest rates and inflation rates.
• We operate in a highly competitive market for direct equity investment opportunities.
7 unchanged sentences
• Our stockholders may experience dilution upon the issuance of additional shares of our common stock.
−Removed: • If we default under any future credit facility or any other future indebtedness, we may not be able to make payments on the 4.75% Convertible Senior Notes due 2023.
−Removed: • We may not have, or have the ability to raise, the funds necessary to repurchase the 4.75% Convertible Senior Notes due 2023 upon a fundamental change, and our debt may contain limitations on our ability to deliver shares of our common stock upon conversion or pay cash upon repurchase of the 4.75% Convertible Senior Notes due 2023.
−Removed: • We will be subject to corporate-level U.S.
−Removed: federal income tax if we are profitable and are unable to qualify as a RIC, which could have a material adverse effect on us and our stockholders.
+Added: • If we default under any future credit facility or any other future indebtedness, we may not be able to make payments on the 6.00% Notes due 2026.
+Added: • We may choose to redeem the 6.00% Notes due 2026 when prevailing interest rates are relatively low.
+Added: • An active trading market for the 6.00% Notes due 2026 may not develop or be maintained, which could limit a holder's ability to sell the 6.00% Notes due 2026 and/or adversely impact the market price of the 6.00% Notes due 2026.
+Added: • We will be subject to U.S.
+Added: federal income tax at corporate rates if we are profitable and are unable to qualify as a RIC, which could have a material adverse effect on us and our stockholders.
Risks Related to Our Investments
19 unchanged sentences
The types of factors that the Valuation Committee takes into account in providing its fair value recommendation to the Board of Directors with respect to such non-traded investments include, as relevant and, to the extent available, the portfolio company’s earnings, the markets in which the portfolio company does business, comparison to valuations of publicly traded companies, comparisons to recent sales of comparable companies, the discounted value of the cash flows of the portfolio company and other relevant factors.
−Removed: This information may not be available because it is difficult to obtain financial and other information with respect to private companies, and even when we are able to obtain such information, there
−Removed: can be no assurance that it is complete or accurate.
+Added: This information may not be available because it is difficult to obtain financial and other information with respect to private companies, and even when we are able to obtain such information, there can be no assurance that it is complete or accurate.
Because such valuations are inherently uncertain and may be based on estimates, our determinations of fair value may differ materially from the values that would be assessed if a readily available market for these securities existed.
−Removed: Due to this uncertainty, our fair value determinations with respect to any non-traded investments we hold may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize on one or more of our investments.
+Added: Due to this uncertainty, our fair value determinations with respect to any non-traded
+Added: investments we hold may cause our net asset value on a given date to materially understate or overstate the value that we may ultimately realize on one or more of our investments.
As a result, investors purchasing our securities based on an overstated net asset value would pay a higher price than the value of our investments might warrant.
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Given the experience of our executive officers and investment professionals within the technology space, a number of the companies in which we have invested and intend to invest operate in technology-related sectors.
−Removed: Investments in such companies are subject to substantial risks.
+Added: Investments in such companies
+Added: are subject to substantial risks.
The revenue, income (or losses) and valuations of technology-related companies can and often do fluctuate suddenly and dramatically.
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Value % of Net
−Removed: Palantir Technologies, Inc.
−Removed: $ 12,875,126 $ 94,635,398 31.4%
−Removed: Coursera, Inc.
−Removed: 17,359,536 53,182,137 17.6%
Course Hero, Inc.
$ 14,999,972 $ 87,831,743 24.1%
−Removed: Nextdoor.com, Inc.
−Removed: 10,002,666 12,832,208 4.3%
−Removed: Ozy Media, Inc.
+Added: Forge Global, Inc.
2,526,223 21,015,781 5.8%
1 unchanged sentence
15,004,340 14,315,526 4.0%
−Removed: Forge Global, Inc.
−Removed: 2,383,703 9,897,059 3.3%
−Removed: GreenAcreage Real Estate Corp.
+Added: Nextdoor Holdings, Inc.
10,002,666 12,439,522 3.4%
Stormwind, LLC 6,387,741 11,830,722 3.2%
+Added: Aspiration Partners, Inc.
1,283,005 11,055,743 3.0%
−Removed: Enjoy Technology, Inc.
10,005,748 10,370,299 2.8%
+Added: Architect Capital PayJoy SPV, LLC 10,006,745 10,000,000 2.7%
+Added: Orchard Technologies, Inc.
+Added: 10,004,034 9,999,996 2.7%
+Added: Skillsoft Corp.
+Added: 9,818,430 8,983,863 2.5%
Total $ 90,038,904 $ 197,843,195 54.2%
5 unchanged sentences
We may elect not to make follow-on investments, or may otherwise lack sufficient funds to make those investments or lack access to desired follow-on investment opportunities.
−Removed: We have the discretion to make any follow-on investments, subject
−Removed: to the availability of capital resources and of the investment opportunity.
+Added: We have the discretion to make any follow-on investments, subject to the availability of capital resources and of the investment opportunity.
The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation.
1 unchanged sentence
In addition, we may be unable to complete follow-on investments in our portfolio companies that have conducted an IPO as a result of regulatory or financial restrictions.
+Added: This or any of the preceding rationales for failing to undertake a follow-on investment could impact our portfolio companies' performance and, thus, its value.
Because we will generally not hold controlling equity interests in our portfolio companies, we will likely not be in a position to exercise control over our portfolio companies or to prevent decisions by substantial stockholders or management of our portfolio companies that could decrease the value of our investments.
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This risk will increase as the SPAC gets closer to the timeframe described above.
−Removed: In addition, the SPAC may have limited time to conduct due diligence and may enter into a business combination on terms that it would have rejected upon a more comprehensive investigation.
+Added: In addition, the SPAC may have limited time to conduct due
+Added: diligence and may enter into a business combination on terms that it would have rejected upon a more comprehensive investigation.
The foregoing could undermine the SPAC’s ability to complete a business combination on terms that would produce value for us.
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These new requirements will apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules.
−Removed: Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company,
−Removed: if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due.
+Added: Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due.
Collectively, these requirements may limit our ability to use derivatives and/or enter into certain other financial contracts.
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For example, BDCs are required to invest at least 70% of their gross assets in specified types of securities, primarily in private companies or thinly-traded U.S.
−Removed: public companies, cash, cash equivalents, U.S.
+Added: public companies,
+Added: cash, cash equivalents, U.S.
government securities and other high quality debt investments that mature in one year or less.
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Our financial condition and results of operations will depend on our ability to achieve our investment objective.
−Removed: Our ability to achieve our investment objective will depend on our management team’s and investment professional’s ability to identify, analyze and invest in companies that meet our investment criteria.
−Removed: Accomplishing this result on a cost-effective basis is largely a function of our management team’s and investment professional’s structuring of the investment process and its ability to provide competent, attentive and efficient services to us.
+Added: Our ability to achieve our investment objective will depend on our management team’s and investment professionals' ability to identify, analyze and invest in companies that meet our investment criteria.
+Added: Accomplishing this result on a cost-effective basis is largely a function of our management team’s and investment professionals' structuring of the investment process and their ability to provide competent, attentive and efficient services to us.
We seek a specified number of investments in rapidly growing venture-capital-backed emerging companies, which may be extremely risky.
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Investments in private companies, including through private secondary marketplaces, also entail additional legal and regulatory risks which expose participants to the risk of liability due to the imbalance of information among participants and participant qualification and other transactional requirements applicable to private securities transactions, the non-compliance with which could result in rescission rights and monetary and other sanctions.
−Removed: The application of these laws within the context of private secondary marketplaces and related market practices are still evolving, and, despite our efforts to comply with
−Removed: applicable laws, we could be exposed to liability.
+Added: The application of these laws within the context of private secondary marketplaces and related market practices are still evolving, and, despite our efforts to comply with applicable laws, we could be exposed to liability.
The regulation of private secondary marketplaces is also evolving.
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We are subject to changing rules and regulations of federal and state government as well as the stock exchange on which our common stock is listed.
−Removed: These entities, including the Public Company Accounting Oversight Board, the SEC and the Nasdaq Capital Market, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations and requirements in response to laws enacted by Congress.
+Added: These entities, including the Public Company Accounting Oversight Board, the SEC and the Nasdaq Global Select Market, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations and requirements in response to laws enacted by Congress.
In addition, there are significant corporate governance and executive compensation-related provisions in the Dodd-Frank Act, and the SEC has adopted, and may continue to adopt, additional rules and regulations that may impact us.
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Without sufficient access to the capital markets or credit markets, we may be forced to curtail our business operations, or we may not be able to pursue new business opportunities.
−Removed: From time to time, capital markets may experience periods of disruption and instability.
+Added: From time to time, capital markets may experience periods of disruption and instability, including as recently as 2020 as a result of the COVID-19 pandemic.
During such periods of market disruption and instability, we and other companies in the financial services sector may have limited access, if available, to alternative markets for debt and equity capital.
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In addition, this volatility and disruption, has had, and in the future may have, a negative effect on the valuations of our investments and on the potential for liquidity events involving these investments.
−Removed: While most of our investments are not publicly traded, applicable accounting standards require us to assume, as part of our valuation process, that our investments are sold in orderly market-to-market transactions between market participants.
+Added: While most of our investments are not publicly traded, applicable accounting standards require us to assume, as part of our valuation process, that our investments are sold in orderly mark-to-market transactions between market participants.
As a result, volatility in the capital markets can adversely affect our investment valuations.
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and worldwide financial markets, and may cause economic uncertainties or deterioration in the United States and worldwide.
−Removed: and global capital markets experienced extreme volatility and disruption during the economic downturn that began in mid-2007, and the U.S.
−Removed: economy was in a recession for several consecutive calendar quarters during the same period.
−Removed: In 2010, a financial crisis emerged in Europe, triggered by high budget deficits and rising direct and contingent sovereign debt, which created concerns about the ability of certain nations to continue to service their sovereign debt obligations.
−Removed: Risks resulting from such debt crisis, including any austerity measures taken in exchange for bailout of certain nations, and any future debt crisis in Europe or any similar crisis elsewhere could have a detrimental impact on the global economic recovery, sovereign and non-sovereign debt in certain countries and the financial condition of financial institutions generally.
−Removed: In June 2016, the United Kingdom held a referendum in which voters approved an exit from the European Union (“Brexit”).
−Removed: Brexit created political and economic uncertainty and instability in the global markets (including currency and credit markets), and especially in the United Kingdom and the European Union.
−Removed: The United Kingdom formally left the European Union on January 31, 2020 and on December 24, 2020, the United Kingdom and European Union signed a trade deal that became provisionally effective on January 1, 2021 and that now governs the relationship between the United Kingdom and the European Union (the “Trade Agreement”).
−Removed: The Trade Agreement implements significant regulation around trade, transport of goods and travel restrictions between the United Kingdom and the European Union.
−Removed: There is continued concern about national-level support for the Euro and the accompanying coordination of fiscal and wage policy among European Economic and Monetary Union member countries.
−Removed: In addition, the fiscal and monetary policies of foreign nations, such as Russia and China, may have a severe impact on the worldwide and U.S.
−Removed: financial markets.
−Removed: The Chinese capital markets have also experienced periods of instability over the past several years.
−Removed: The current political climate has also intensified concerns about a potential trade war between the U.S.
−Removed: and China in connection with each country’s recent or proposed tariffs on the other country’s products.
−Removed: These market and economic disruptions and the potential trade war with China have affected, and may in the future affect, the U.S.
+Added: Downgrades by rating agencies to the U.S.
+Added: government’s credit rating or concerns about its credit and deficit levels in general could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with debt investments and our ability to access the debt markets on favorable terms.
+Added: In addition, a decreased U.S.
+Added: government credit rating could create broader financial turmoil and uncertainty, which may weigh heavily on our financial performance and the value of our common stock.
+Added: Deterioration in the economic conditions in the Eurozone and other regions or countries globally and the resulting instability in global financial markets may pose a risk to our business.
+Added: Financial markets have been affected at times by a number of global macroeconomic events, including the following:
+Added: large sovereign debts and fiscal deficits of several countries in Europe and in emerging markets jurisdictions, levels of non‑performing loans on the balance sheets of European banks, the effect of the United Kingdom (the “U.K.”) leaving the European Union (the “EU”), instability in the Chinese capital markets and the COVID-19 pandemic.
+Added: Global market and economic disruptions have affected, and may in the future affect, the U.S.
capital markets, which could adversely affect our business, financial condition or results of operations.
−Removed: The current global financial market situation, as well as various social and political circumstances in the United States and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide.
−Removed: For example, the global outbreak of COVID-19 continues to adversely impact global commercial activity, and has contributed to significant volatility in financial markets.
−Removed: The outbreak of COVID-19 may have a material adverse impact on the ability of our portfolio companies to fulfill their end customers’ orders due to supply chain delays, limited access to key commodities or technologies or other events that impact their manufacturers or their suppliers.
−Removed: Such events have affected, and may in the future affect, the global and U.S.
−Removed: capital markets, and our business, financial condition or results of operations.
−Removed: Additionally, the U.S.
−Removed: government’s credit and deficit concerns, the European sovereign debt crisis, and the potential trade war with China could cause interest rates to be volatile, which may negatively impact our ability to access the debt markets on favorable terms.
−Removed: The Democratic Party currently controls the executive branch and the legislative branch of government, which increases the likelihood that legislation may be adopted that could significantly affect the regulation of U.S.
−Removed: financial markets.
−Removed: The United States may also potentially withdraw from or renegotiate various trade agreements and take other actions that would change current trade policies of the United States.
−Removed: We cannot predict which, if any, of these actions will be taken or, if taken, their effect on the financial stability of the United States.
−Removed: Such actions could have a significant adverse effect on our business, financial condition and results of operations.
−Removed: We cannot predict the effects of these or similar events in the future on the U.S.
−Removed: economy and securities markets or on our investments.
−Removed: We monitor developments and seek to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that we will be successful in doing so.
−Removed: On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which increased from $50 billion to $250 billion the asset threshold for designation of “systemically important financial institutions” or “SIFIs” subject to enhanced prudential standards set by the Federal Reserve Board, staggering application of this change based on the size and risk of the covered bank holding company.
−Removed: On May 30, 2018, the Federal Reserve Board voted to consider changes to the Volcker Rule that would loosen compliance requirements for all banks.
−Removed: The effect of this change and any further rules or regulations are and could be complex and far-reaching, and the change and any future laws or
−Removed: regulations or changes thereto could negatively impact our operations, cash flows or financial condition, impose additional costs on us, intensify the regulatory supervision of us or otherwise adversely affect our business, financial condition and results of operations.
+Added: We cannot assure you that market disruptions in Europe and other regions or countries, including the increased cost of funding for certain governments and financial institutions, will not impact the global economy, and we cannot assure you that assistance packages will be available, or if available, be sufficient to stabilize countries and markets in Europe or elsewhere affected by a financial crisis.
+Added: To the extent uncertainty regarding any economic recovery in Europe or elsewhere negatively impacts consumer confidence and consumer credit factors, our and our portfolio companies’ business, financial condition and results of operations could be significantly and adversely affected.
+Added: Moreover, there is a risk of both sector-specific and broad-based corrections and/or downturns in the equity and credit markets.
+Added: Any of the foregoing could have a significant impact on the markets in which we operate and could have a material adverse impact on our business prospects and financial condition.
+Added: Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may also contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide.
+Added: Such events, including rising trade tensions between the United States and China, other uncertainties regarding actual and potential shifts in U.S.
+Added: and foreign, trade, economic and other policies with other countries, the Russian invasion of Ukraine, and the COVID-19 pandemic, could adversely affect our business, financial condition or results of operations.
+Added: These market and economic disruptions could negatively impact the operating results of our portfolio companies.
+Added: Additionally, the Federal Reserve may raise, or may announce its intention to raise, the Federal Funds Rate in 2022.
+Added: These developments, along with the U.S.
+Added: government’s credit and deficit concerns, global economic uncertainties and market volatility and the impacts of COVID-19, could cause interest rates to be volatile, which may negatively impact our ability to access the debt markets and capital markets on favorable terms.
Events outside of our control, including public health crises, may negatively affect our results of operations and financial performance.
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In addition, rising interest rates may increase pressure on us to provide fixed rate loans to our portfolio companies, which could adversely affect our net investment income, as increases in our cost of borrowed funds would not be accompanied by increased interest income from such fixed-rate investments.
−Removed: On July 27, 2017, the United Kingdom’s Financial Conduct Authority (the "FCA"), which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021.
−Removed: It is unclear if at that time whether LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021.
−Removed: Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.
−Removed: financial institutions, is considering replacing U.S.
−Removed: dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities called the Secured Overnight Financing Rate (“SOFR”).
−Removed: The first publication of SOFR was released in April 2018.
−Removed: Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR at this time is uncertain.
−Removed: In addition, on March 25, 2020, the FCA stated that although the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed, the outbreak of COVID-19 has delayed the timing of many firms’ transition planning, and the FCA will continue to assess the impact of the COVID-19 outbreak on transition timelines and update the marketplace as soon as possible.
−Removed: Furthermore, on November 30, 2020, Intercontinental Exchange, Inc.
−Removed: (“ICE”) announced that the ICE Benchmark Administration Limited, a wholly-owned subsidiary of ICE and the administrator of LIBOR, will consider extending the LIBOR transition deadline to June 30, 2023.
−Removed: The announcement was
−Removed: supported by the FCA and the U.S.
−Removed: Federal Reserve.
−Removed: Despite the announcement, regulators continue to emphasize the importance of LIBOR transition planning.
+Added: On March 5, 2021, the United Kingdom's Financial Conduct Authority (the "FCA"), which regulates LIBOR, announced that the 1-week and 2-month U.S.
+Added: dollar LIBOR settings will cease publication after December 31, 2021 and the overnight 1, 3, 6 and 12 months U.S.
+Added: dollar LIBOR settings will cease publication after June 30, 2023.
+Added: However, the FCA has indicated it will not compel panel banks to continue to contribute to LIBOR after the end of 2021 and the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have encouraged banks to cease entering into new contracts that use U.S.
+Added: dollar LIBOR as a reference rate no later than December 31, 2021.
+Added: To identify a successor rate for U.S.
+Added: dollar LIBOR, the Alternative Reference Rates Committee ("ARRC"), a U.S.-based group convened by the U.S.
+Added: Federal Reserve Board and the Federal Reserve Bank of New York, was formed.
+Added: On July 29, 2021, the ARCC formally recommended the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative replacement rate for LIBOR.
+Added: SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S.
+Added: Treasury securities, and is based on directly observable U.S.
+Added: Treasury-backed repurchase transactions.
+Added: Whether or not SOFR attains market traction as a LIBOR replacement remains a question.
Although SOFR appears to be the preferred replacement rate for U.S.
1 unchanged sentence
The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the market for or value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.
−Removed: In addition, if LIBOR ceases to exist, we may need to renegotiate credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor in determining the interest rate, in order to replace LIBOR with the new standard that is established, which may have an adverse effect on our overall financial condition or results of operations.
−Removed: Following the replacement of LIBOR, some or all of these credit agreements may bear interest a lower interest rate, which could have an adverse impact on our results of operations.
−Removed: Moreover, if LIBOR ceases to exist, we may need to renegotiate certain terms of our credit facilities, if any.
−Removed: If we are unable to do so, amounts drawn under our credit facilities (if any) may bear interest at a higher rate, which would increase the cost of our borrowings and, in turn, affect our results of operations.
+Added: In connection with the cessation of LIBOR, we may need to renegotiate credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR, if any, to provide for an alternative reference rate, to the extent any exist and they do not already provide for such a transition upon the cessation of LIBOR, which may have an adverse effect on our financial condition or results of operations.
+Added: Further, the transition from LIBOR to SOFR or other alternative reference rates may also introduce operational risks in our accounting, financial reporting, loan servicing, liability management and other aspects of our business.
+Added: We are assessing the impact of a transition from LIBOR;
+Added: however, we cannot reasonably estimate the impact of the transition at this time.
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
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We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a financially distressed or defaulting portfolio company.
−Removed: In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and circumstances, we would typically be last in line behind any creditors and would likely experience a complete loss on our investment.
+Added: In addition, if one of our portfolio companies were to go bankrupt, depending on the facts and
+Added: circumstances, we would typically be last in line behind any creditors and would likely experience a complete loss on our investment.
Any disruptive conditions in the financial industry and the impact of new legislation in response to those conditions could restrict our business operations and could adversely impact our results of operations and financial condition.
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Economic sanction laws in the United States and other jurisdictions may prohibit us from transacting with certain countries, individuals and companies.
−Removed: Economic sanction laws in the United States and other jurisdictions may prohibit us from transacting with certain countries, individuals and companies.
In the United States, the U.S.
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government has indicated that it is particularly focused on FCPA enforcement, which may increase the risk that an issuer or us becomes the subject of such actual or threatened enforcement.
−Removed: In addition, certain commentators have suggested that private investment firms and the funds that they manage may face increased scrutiny and/or liability with respect to the
−Removed: activities of their underlying portfolio companies.
+Added: In addition, certain commentators have suggested that private investment firms and the funds that they manage may face increased scrutiny and/or liability with respect to the activities of their underlying portfolio companies.
As such, a violation of the FCPA or other applicable regulations by us or an issuer of our portfolio investments could have a material adverse effect on us.
−Removed: We are committed to complying with the FCPA and other anti-corruption laws and regulations, as well as anti-boycott regulations, to which it is subject.
+Added: We are committed to complying with the FCPA and other anti-corruption laws and regulations, as well as anti-boycott regulations.
As a result, we may be adversely affected because of our unwillingness to enter into transactions that violate any such laws or regulations.
+Added: Inflation may adversely affect the business, results of operations and financial condition of our portfolio companies.
+Added: Certain of our portfolio companies may be impacted by inflation.
+Added: If such portfolio companies are unable to pass any increases in their costs along to their customers, it could adversely affect their results, which could in turn adversely impact our results of operations.
+Added: In addition, any projected future decreases in our portfolio companies’ operating results due to inflation could adversely impact the fair value of our investments.
+Added: Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce our net assets resulting from operations.
+Added: We are subject to risks related to corporate social responsibility.
+Added: Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities.
+Added: We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering ESG factors in our investment processes.
+Added: Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations.
+Added: Additionally, new regulatory initiatives related to ESG could adversely affect our business.
Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of investment strategy and impact our stock price.
2 unchanged sentences
While we are currently not subject to any securities litigation or stockholder activism, due to the potential volatility of our stock price and for a variety of other reasons, we may in the future become the target of securities litigation or stockholder activism.
−Removed: Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and resources from our business.
+Added: Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and our Board of Directors’ attention and
+Added: resources from our business.
Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel.
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Also, as a result of this competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make direct equity investments that are consistent with our investment objective.
−Removed: Borrowings, such as the 4.75% Convertible Senior Notes due 2023, can magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.
+Added: Borrowings, such as the 6.00% Notes due 2026, can magnify the potential for gain or loss on amounts invested and may increase the risk of investing in us.
Borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities.
−Removed: In addition to the 4.75% Convertible Senior Notes due 2023, we may borrow from and issue senior debt securities to banks, insurance companies and other lenders.
+Added: In addition to the 6.00% Notes due 2026, we may borrow from and issue senior debt securities to banks, insurance companies and other lenders.
Lenders of such senior securities would have fixed dollar claims on our assets that are superior to the claims of our common stockholders.
3 unchanged sentences
Leverage is generally considered a speculative investment technique.
−Removed: Our ability to service the 4.75% Convertible Senior Notes due 2023, borrowings under any other future debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures.
+Added: Our ability to service the 6.00% Notes due 2026, borrowings under any other future debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures.
As a result of our use of leverage, we have experienced a substantial increase in operating expenses and may continue to do so in the future.
8 unchanged sentences
__________________
−Removed: (1) Assumes $280.8 million in total portfolio assets excluding U.S.
−Removed: Treasuries, $38,215,000 in outstanding 4.75% Convertible Senior Notes due March 28, 2023 as of December 31, 2020.
+Added: (1) Assumes $260.1 million in total portfolio assets and $75.0 million in outstanding 6.00% Notes due 2026 as of December 31, 2021.
Our use of borrowed funds to make investments exposes us to risks typically associated with leverage.
13 unchanged sentences
If the value of our assets declines, we may be unable to satisfy this test and we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our senior securities at a time when such sales may be disadvantageous.
−Removed: If we default under any future credit facility or any other future indebtedness, we may not be able to make payments on the 4.75% Convertible Senior Notes due 2023.
−Removed: Any default under any future credit facility or any other future indebtedness to which we may be a party that is not waived by the required lenders or holders, and the remedies sought by the holders of such indebtedness, could make us unable to pay principal, premium, if any, and interest on the 4.75% Convertible Senior Notes due 2023 and substantially decrease the market value of the 4.75% Convertible Senior Notes due 2023.
−Removed: If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments
−Removed: governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness.
−Removed: In the event of such default, the holders of such indebtedness may have the ability to elect to declare all the funds borrowed thereunder due and payable, together with accrued and unpaid interest, the lenders under any credit future facility or other future debt we may incur in the future may elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.
−Removed: If our operating performance declines, we may in the future need to seek to obtain waivers from the required lenders under any future credit facility or other future debt that we may incur in the future to avoid being in default.
−Removed: If we breach our covenants under any future credit facility or other future debt and seek a waiver, we may not be able to obtain a waiver from the required lenders or holders.
−Removed: If this occurs, we may be in default under the relevant credit facility or other debt, the lenders or holders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation.
−Removed: If we are unable to repay debt, lenders having secured obligations, including the lenders under any future credit facility or other future indebtedness, could proceed against the collateral securing the debt.
−Removed: Because any future credit facilities will likely have, customary cross-default provisions, if the indebtedness under the 4.75% Convertible Senior Notes due 2023, or under any future credit facility is accelerated, we may be unable to repay or finance the amounts due.
If we default under any future borrowing facility we enter into or are unable to amend, repay or refinance any such facility on commercially reasonable terms, or at all, we may suffer material adverse effects on our business, financial condition, results of operations and cash flows.
9 unchanged sentences
Accordingly, in order to maintain our qualification as a RIC, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investments to meet these distribution requirements.
−Removed: If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus would be subject to corporate-level U.S.
−Removed: federal income tax.
+Added: If we are not able to obtain cash from other sources, we may fail to qualify for RIC tax treatment and thus would be subject to U.S.
+Added: federal income tax at corporate rates.
Regulations governing our operation as a BDC affect our ability to, and the way in which we, raise additional capital, which may expose us to risks, including the typical risks associated with leverage.
−Removed: We may in the future issue additional debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively (along with the 4.75% Convertible Senior Notes due 2023) as “senior securities,” up to the maximum amount permitted by the 1940 Act.
+Added: We may in the future issue additional debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively (along with the 6.00% Notes due 2026) as “senior securities,” up to the maximum amount permitted by the 1940 Act.
Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 200% (or 150% if certain requirements are met) of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities.
2 unchanged sentences
Furthermore, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders.
−Removed: All of the costs of offering and servicing the 4.75% Convertible Senior Notes due 2023 and any additional debt or preferred stock we may issue in the future, including interest or preferential dividend payments thereon, will be borne by our common stockholders.
−Removed: The interests of the holders of the 4.75% Convertible Senior Notes due 2023, any additional debt or preferred stock we may issue will not necessarily be aligned with the interests of our common stockholders.
−Removed: In particular, the rights of holders of the 4.75% Convertible Senior Notes due 2023 and our debt or preferred stock to receive interest, dividends or principal repayment will be senior to those of our common stockholders.
+Added: All of the costs of offering and servicing the 6.00% Notes due 2026 and any additional debt or preferred stock we may issue in the future, including interest payments thereon, will be borne by our common stockholders.
+Added: The interests of the holders of the 6.00% Notes due 2026, any additional debt or preferred stock we may issue will not necessarily be aligned with the interests of our common stockholders.
+Added: In particular, the rights of holders of the 6.00% Notes due 2026 and our debt or preferred stock to receive interest or principal repayment will be senior to those of our common stockholders.
Also, in the event we issue preferred stock, the holders of such preferred stock will have the ability to elect two members of our Board of Directors.
10 unchanged sentences
There are no assurances that we will be able to comply with these covenants.
−Removed: Failure to comply with these covenants would result in a default which, if we were unable to obtain a waiver under any such loan agreement, would have a material adverse impact on our liquidity, financial condition, results of operations and ability to pay dividends.
−Removed: We will be subject to corporate-level U.S.
−Removed: federal income tax if we are profitable and are unable to qualify as a RIC, which could have a material adverse effect on us and our stockholders.
+Added: Failure to comply with these
+Added: covenants would result in a default which, if we were unable to obtain a waiver under any such loan agreement, would have a material adverse impact on our liquidity, financial condition, results of operations and ability to pay dividends.
+Added: We will be subject to U.S.
+Added: federal income tax at corporate rates if we are profitable and are unable to qualify as a RIC, which could have a material adverse effect on us and our stockholders.
We elected to be treated as a RIC under the Code beginning with our taxable year ended December 31, 2014, have qualified to be treated as a RIC for subsequent taxable years and expect to continue to operate in a manner so as to qualify for the tax treatment applicable to RICs.
−Removed: See “Business—Material U.S.
+Added: Business—Material U.S.
Federal Income Tax Considerations” and “Note 2—Significant Accounting Policies— U.S.
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Management generally believes that it will be in our best interest to be treated as a RIC in any year in which we are profitable.
−Removed: If we fail to qualify for tax treatment as a RIC for any year in which we are profitable and such profits exceed certain loss carryforwards that we are entitled to utilize, we will be subject to corporate-level U.S.
−Removed: federal income tax, which could substantially reduce our net assets, the amount of income available for distribution or reinvestment and the amount of our distributions.
+Added: If we fail to qualify for tax treatment as a RIC for any year in which we are profitable and such profits exceed certain loss carryforwards that we are entitled to utilize, we will be subject to U.S.
+Added: federal income tax at corporate rates, which could substantially reduce our net assets, the amount of income available for distribution or reinvestment and the amount of our distributions.
Such a failure could have a material adverse effect on us and our stockholders.
1 unchanged sentence
To qualify for the special treatment accorded to RICs, we must meet certain income source, asset diversification and annual distribution requirements.
−Removed: In order to satisfy the income source requirement, we must derive in each taxable year at least 90% of
−Removed: our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities or foreign currencies, other income derived with respect to our business of investing in such stock or securities or income from “qualified publicly traded partnerships.” To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each quarter of our taxable year.
+Added: In order to satisfy the income source requirement, we must derive in each taxable year at least 90% of our gross income from dividends, interest, payments with respect to certain securities loans, gains from the sale of stock or other securities or foreign currencies, other income derived with respect to our business of investing in such stock or securities or income from “qualified publicly traded partnerships.” To qualify as a RIC, we must also meet certain asset diversification requirements at the end of each quarter of our taxable year.
Failure to meet these tests in any year in which we intend to be treated as a RIC may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status.
2 unchanged sentences
We will be subject to certain asset coverage ratio requirements under the 1940 Act and financial covenants under the terms of our indebtedness that could, under certain circumstances, restrict us from making distributions necessary to satisfy the annual distribution requirement.
−Removed: If we are unable to dispose of investments quickly enough to meet the asset diversification requirements at the end of a quarter or obtain cash from other sources in order to meet the annual distribution requirement, we may fail to qualify for special tax treatment accorded to RICs and, thus, be subject to corporate-level U.S.
−Removed: federal income tax.
−Removed: The comprehensive tax reform bill could adversely affect our business and financial condition.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law and significantly changed the Code.
−Removed: The Tax Act, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), limitation of the deduction or net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits.
−Removed: federal net operating loss carryovers created in 2018 and thereafter will be carried forward indefinitely pursuant to the Tax Act.
−Removed: We continue to examine the impact this tax legislation may have on our business.
−Removed: Notwithstanding the reduction in the corporate income tax rate, the overall impact of the Tax Act is uncertain and our business and financial condition could be adversely affected.
−Removed: The impact of this Tax Act on holders of the 4.75% Convertible Senior Notes due 2023 or our common stock is also uncertain and could be adverse.
−Removed: We urge such holders to consult with their legal and tax advisors with respect to such legislation and the potential tax consequences of investing in our convertible notes and common stock.
+Added: If we are unable to dispose of investments quickly enough to meet the asset diversification requirements at the end of a quarter or obtain cash from other sources in order to meet the annual distribution requirement, we may fail to qualify for special tax treatment accorded to RICs and, thus, be subject to U.S.
+Added: federal income tax at corporate rates.
+Added: Legislative or regulatory tax changes could adversely affect our business and financial condition.
+Added: Changes in tax laws, regulations or administrative interpretations or any amendments thereto could adversely affect us, the entities in which we invest, or the holders of our securities, including our common stock and the 6.00% Notes due 2026.
+Added: The Biden Administration has announced a number of tax law proposals, including American Families Plan and Made in America Tax Plan, which include increases in the corporate and individual tax rates, and impose a minimum tax on book income and profits of certain multinational corporations.
+Added: The impact of any new legislation on us, the entities in which we invest, and the holders of our securities is uncertain.
+Added: Investors are urged to consult with their tax advisors with respect to the impact of this legislation and the status of any other regulatory or administrative developments and proposals and their potential effect on an investment in our securities.
Because we expect to distribute substantially all of our net investment income and net realized capital gains to our stockholders, we will need additional capital to finance our growth and such capital may not be available on favorable terms or at all.
1 unchanged sentence
federal income tax purposes as a RIC under Subchapter M of the Code.
−Removed: If we meet certain requirements, including source of income, asset diversification and distribution requirements, and if we continue to qualify as a BDC, we will continue to qualify for tax treatment as a RIC under the Code and will not have to pay corporate-level income taxes on income we distribute to our stockholders as dividends, allowing us to substantially reduce or eliminate our U.S.
−Removed: federal corporate-level income tax liability.
+Added: If we meet certain requirements, including source of income, asset diversification and distribution requirements, and if we continue to qualify as a BDC, we will continue to qualify for tax treatment as a RIC under the Code and will not be subject to U.S.
+Added: income taxes on income we distribute to our stockholders as dividends, allowing us to substantially reduce or eliminate our U.S.
+Added: federal income tax liability.
As a BDC, we are generally required to meet a coverage ratio of total assets to total senior securities, which includes all of our borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if certain requirements are met) at the time we issue any debt or preferred stock.
8 unchanged sentences
In accordance with certain applicable U.S.
−Removed: Treasury regulations and published guidance issued by the Internal Revenue Service (“IRS”), a RIC may treat a distribution of its own common stock as fulfilling the RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or common stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must be at least 20% of the aggregate declared distribution.
−Removed: If too many stockholders elect to
−Removed: receive cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock).
+Added: Treasury regulations and published guidance issued by the Internal Revenue Service (“IRS”), a RIC may treat a distribution of its own common stock as fulfilling the RIC distribution requirements if each stockholder may elect to receive his or her entire distribution in either cash or common stock of the RIC, subject to a limitation that the aggregate amount of cash to be distributed to all stockholders must not exceed more than 50% of the aggregate declared distribution.
+Added: If too many stockholders elect to receive cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of the distribution paid in stock).
In no event will any stockholder electing to receive cash, receive less than the lesser of (a) the portion of the distribution such stockholder has elected to receive in cash or (b) an amount equal to his or her entire distribution times the percentage limitation on cash available for distribution.
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However, the Small Business Credit Availability Act (the “SBCA") modified the 1940 Act to allow BDCs to decrease their asset coverage requirement from 200% to 150% (i.e.
−Removed: the amount of debt may not exceed 66.7% of the value of our total
−Removed: assets), if certain requirements are met.
+Added: the amount of debt may not exceed 66.7% of the value of our total assets), if certain requirements are met.
Under the SBCA, we are allowed to reduce our asset coverage requirement to 150%, and thereby increase our leverage capacity, if shareholders representing at least a majority of the votes cast, when a quorum is present, approve a proposal to do so.
6 unchanged sentences
If the value of our assets increases, then leveraging would cause the net asset value attributable to our common stock to increase more sharply than it would have had we not leveraged.
−Removed: Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged our business.
+Added: Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not
+Added: leveraged our business.
Similarly, any increase in our income in excess of interest payable on the borrowed funds would cause our net investment income to increase more than it would without the leverage, while any decrease in our income would cause net investment income to decline more sharply than it would have had we not borrowed.
1 unchanged sentence
Leverage is generally considered a speculative investment technique.
−Removed: We cannot predict how tax reform legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.
+Added: We cannot predict how new tax legislation will affect us, our investments, or our stockholders, and any such legislation could adversely affect our business.
Legislative or other actions relating to taxes could have a negative effect on us.
−Removed: In December 2017, the U.S.
−Removed: House of Representatives and U.S.
−Removed: Senate passed tax reform legislation, which was signed into law.
−Removed: Such legislation significantly changed the Code, including significant changes to the taxation of business entities, the deductibility of interest expense, and the tax treatment of capital investment.
−Removed: We cannot predict with certainty how any changes in the tax laws might affect us, our stockholders, or our portfolio investments.
−Removed: New legislation and any U.S.
+Added: The rules dealing with U.S.
+Added: federal income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service and the U.S.
+Added: Treasury Department.
+Added: The Biden Administration has proposed significant changes to the existing U.S.
+Added: tax rules, and there are a number of proposals in Congress that would similarly modify the existing U.S.
+Added: The likelihood of any such legislation being enacted is uncertain, but new legislation and any U.S.
Treasury regulations, administrative interpretations or court decisions interpreting such legislation could significantly and negatively affect our ability to qualify for tax treatment as a RIC or the U.S.
−Removed: federal income tax consequences to us and our stockholders of such qualification or could have other adverse consequences.
−Removed: Stockholders are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.
+Added: federal income tax consequences to us and our investors of such qualification, or could have other adverse consequences.
+Added: Investors are urged to consult with their tax advisor regarding tax legislative, regulatory, or administrative developments and proposals and their potential effect on an investment in our securities.
Certain investors are limited in their ability to make significant investments in us.
8 unchanged sentences
Preferred stock, which is another form of leverage, has the same risks to our common stockholders as borrowings because the dividends on any preferred stock we issue must be cumulative.
−Removed: Payment of such dividends and repayment of the liquidation preference of such preferred stock must take preference over any dividends or other payments to our common stockholders, and
−Removed: preferred stockholders are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference.
+Added: Payment of such dividends and repayment of the liquidation preference of such preferred stock must take preference over any dividends or other payments to our common stockholders, and preferred stockholders are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference.
Our Board of Directors is authorized to reclassify any unissued shares of stock into one or more classes of preferred stock, which could convey special rights and privileges to its owners.
6 unchanged sentences
In addition, the 1940 Act provides that holders of preferred stock are entitled to vote separately from holders of common stock to elect two directors.
−Removed: As a result, our preferred stockholders will have the ability to reject a director that would otherwise be elected by our common stockholders.
+Added: As a result, our preferred stockholders will have the ability
+Added: to reject a director that would otherwise be elected by our common stockholders.
In addition, while Maryland law generally requires directors to act in the best interests of all of a corporation’s stockholders, there can be no assurance that a director elected by our preferred stockholders will not choose to act in a manner that tends to favors our preferred stockholders, particularly where there is a conflict between the interests of our preferred stockholders and our common stockholders.
14 unchanged sentences
However, we will amend our bylaws to be subject to the Control Share Act only if our Board of Directors determines that it would be in our best interests and if the SEC staff does not object to our determination that our being subject to the Control Share Act does not conflict with the 1940 Act.
−Removed: We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors, without stockholder action, to classify or reclassify shares of our stock in one or more classes or series, including preferred stock, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have
−Removed: authority to issue.
+Added: We have also adopted measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our Board of Directors in three classes serving staggered three-year terms, and authorizing our Board of Directors, without stockholder action, to classify or reclassify shares of our stock in one or more classes or series, including preferred stock, to cause the issuance of additional shares of our stock, to amend our charter without stockholder approval to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue.
These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.
6 unchanged sentences
• natural disasters such as earthquakes, tornadoes and hurricanes;
−Removed: • disease pandemics (including the recent coronavirus outbreak);
+Added: • disease pandemics (including the COVID-19 pandemic);
• events arising from local or larger scale political or social matters, including terrorist acts;
1 unchanged sentence
These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.
−Removed: Risks Related to the 4.75% Convertible Senior Notes due 2023
−Removed: Our stockholders may experience dilution upon the conversion of the 4.75% Convertible Senior Notes due 2023.
−Removed: The 4.75% Convertible Senior Notes due 2023 are convertible into shares of our common stock.
−Removed: Upon conversion, we must deliver shares of our common stock.
−Removed: The current conversion rate of the 4.75% Convertible Senior Notes due 2023 is 108.0505 shares of common stock per $1,000 principal amount of the 4.75% Convertible Senior Notes due 2023, which is equivalent to a conversion price of approximately $9.25 per share of common stock.
−Removed: Based on the current conversion rate, as of March 11, 2021, the maximum number of shares of common stock that would be issued upon conversion of the $37,215,000 of 4.75% Convertible Senior Notes due 2023 currently outstanding is approximately 4,021,099.
−Removed: If we deliver shares of common stock upon a conversion at the time our net asset value per share exceeds the conversion price in effect at such time, our stockholders will incur dilution.
−Removed: In addition, our stockholders will experience dilution in their ownership percentage of our common stock upon our issuance of common stock in connection with the conversion of the 4.75% Convertible Senior Notes due 2023 and any dividends paid on our common stock will also be paid on shares issued in connection with such conversion after such issuance.
−Removed: We may not have, or have the ability to raise, the funds necessary to repurchase the 4.75% Convertible Senior Notes due 2023 upon a fundamental change, and our debt may contain limitations on our ability to deliver shares of our common stock upon conversion or pay cash upon repurchase of the 4.75% Convertible Senior Notes due 2023.
−Removed: Holders of the 4.75% Convertible Senior Notes due 2023 will have the right to require us to repurchase their notes upon the occurrence of certain significant corporate events involving us, including if our common stock ceases to trade on any national securities exchange or we consolidate or merge into another entity in certain circumstances, at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any.
−Removed: We refer to such a corporate event as a “fundamental change.” However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 4.75% Convertible Senior Notes due 2023 surrendered therefor.
−Removed: In addition, our ability to repurchase the 4.75% Convertible Senior Notes due 2023 or deliver shares of our common stock upon conversions of the 4.75% Convertible Senior Notes due 2023 may be limited by law, by regulatory authority or by agreements governing our indebtedness.
−Removed: For example, any future credit facility may generally prohibit us from prepaying indebtedness other than borrowings under any such credit facility.
−Removed: As a result, before making any such repurchase of the 4.75% Convertible Senior Notes due 2023, we would have to obtain consent from the lender under any such credit facility to the extent such requirement is in effect at such time.
−Removed: Our failure to repurchase the 4.75% Convertible Senior Notes due 2023 at a time when the repurchase is required by the indenture relating to the 4.75% Convertible Senior Notes due 2023 or to deliver any shares of our common stock deliverable on future conversions of such 4.75% Convertible Senior Notes due 2023 as required by such indenture would constitute a default under such indenture.
−Removed: A default under the indenture relating to the 4.75% Convertible Senior Notes due 2023 or the occurrence of a fundamental change itself could also lead to a default under agreements governing any future credit facility or our future
−Removed: indebtedness.
−Removed: If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 4.75% Convertible Senior Notes due 2023.
−Removed: Provisions of the 4.75% Convertible Senior Notes due 2023 could discourage an acquisition of us by a third party.
−Removed: Certain provisions of the 4.75% Convertible Senior Notes due 2023 could make it more difficult or more expensive for a third party to acquire us.
−Removed: Upon the occurrence of certain transactions constituting a fundamental change, the holders of the 4.75% Convertible Senior Notes due 2023 will have the right, at their option, to require us to repurchase all or a portion of their 4.75% Convertible Senior Notes due 2023, plus accrued and unpaid interest.
−Removed: We may also be required to increase the conversion rate of the 4.75% Convertible Senior Notes due 2023 in certain other circumstances, including in the event of certain transactions constituting fundamental changes or a make-whole adjustment event.
−Removed: These provisions could discourage an acquisition of us by a third party.
−Removed: Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt.
−Removed: Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the 4.75% Convertible Senior Notes due 2023, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
−Removed: Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures.
−Removed: If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets (including interests in our portfolio companies if permitted pursuant to the terms of our investment) under terms that may be disadvantageous for us, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
−Removed: Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
−Removed: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
−Removed: Any adverse rating of the 4.75% Convertible Senior Notes due 2023 may negatively affect the trading price and liquidity of the 4.75% Convertible Senior Notes due 2023 and the price of our common stock.
−Removed: We do not intend to seek a rating on the 4.75% Convertible Senior Notes due 2023.
−Removed: However, if a rating service were to rate the 4.75% Convertible Senior Notes due 2023, and if such rating service were to assign the 4.75% Convertible Senior Notes due 2023 a rating lower than the rating expected by investors or were to lower its rating on the 4.75% Convertible Senior Notes due 2023 below the rating initially assigned to the 4.75% Convertible Senior Notes due 2023 or otherwise announce its intention to put the 4.75% Convertible Senior Notes due 2023 on credit watch, the trading price or liquidity of the 4.75% Convertible Senior Notes due 2023 and the price of our common stock could decline.
−Removed: Holders of the 4.75% Convertible Senior Notes due 2023 may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the 4.75% Convertible Senior Notes due 2023, even though such holders do not receive a corresponding cash distribution.
−Removed: The conversion rate of the 4.75% Convertible Senior Notes due 2023 is subject to adjustment in certain circumstances, including the payment of cash dividends.
−Removed: If the conversion rate is adjusted as a result of a distribution that is taxable to our common stockholders, holders of the 4.75% Convertible Senior Notes due 2023 may be deemed to have received a dividend subject to U.S.
−Removed: federal income tax without the receipt of any cash.
−Removed: In addition, a failure to adjust (or to adjust adequately) the conversion rate after an event that increases a noteholder’s proportionate interest in us could be treated as a deemed taxable dividend to such holder.
−Removed: If a make-whole adjustment event occurs on or prior to the business day immediately preceding the stated maturity date of the 4.75% Convertible Senior Notes due 2023, under some circumstances, we will increase the conversion rate for the 4.75% Convertible Senior Notes due 2023 converted in connection with the make-whole adjustment event.
−Removed: Such increase may also be treated as a distribution subject to U.S.
−Removed: federal income tax as a dividend.
−Removed: In addition, if a holder is a Non-U.S.
−Removed: Holder, such holder may be subject to U.S.
−Removed: federal withholding tax in connection with such a deemed distribution.
−Removed: If withholding tax is paid on a noteholder’s behalf as a result of an adjustment to the conversion rate of the 4.75% Convertible Senior Notes due 2023, the withholding agent may offset such payments against payments of cash and common stock on the 4.75% Convertible Senior Notes due 2023.
−Removed: Refer to the prospectus supplement related to the offering of the 4.75% Convertible Senior Notes due 2023, dated March 22, 2018, for more information.
−Removed: Certain adverse consequences could result if the 4.75% Convertible Senior Notes due 2023 are treated as equity interests in us for purposes of regulations under the Employee Retirement Income Security Act of 1974.
−Removed: Pursuant to regulations under the Employee Retirement Income Security Act of 1974 (“ERISA”), it is possible that, due to their convertibility feature, the 4.75% Convertible Senior Notes due 2023 could be treated as equity interests in us.
−Removed: In that event, if employee benefit plans subject to Title I of ERISA, plans that are not subject to ERISA but that are subject to Section 4975 of the Code, such as individual retirement accounts, and entities that are deemed to hold the assets of such plans or accounts (such plans, accounts, and entities, “Benefit Plan Investors”) were to acquire 25% or more of the aggregate value of the 4.75% Convertible Senior Notes due 2023, among other consequences, we and our management would be subject to ERISA fiduciary duties, and certain transactions we might enter into, or may have entered into, in the ordinary course of our business might constitute non-exempt “prohibited transactions” under Section 406 of ERISA or Section 4975 of the Code and might have to be rescinded at significant cost to us.
−Removed: Moreover, if our underlying assets were deemed to be assets constituting plan assets, (i) our assets could be subject to ERISA’s reporting and disclosure requirements, (ii) a fiduciary causing a Benefit Plan Investor to make an investment in our equity interests could be deemed to have delegated its responsibility to manage the assets of the Benefit Plan Investor, and (iii) various providers of fiduciary or other services to us, and any other parties with authority or control with respect to our assets, could be deemed to be plan fiduciaries or otherwise parties in interest or disqualified persons by virtue of their provision of such services.
−Removed: We do not believe that the 4.75% Convertible Senior Notes due 2023 should be treated as equity interests in us for purposes of ERISA in light of the relevant regulations.
−Removed: No assurance can be given, however, that the 4.75% Convertible Senior Notes due 2023 will not be so treated.
−Removed: The accounting for convertible debt securities is complex and subject to uncertainty.
−Removed: The accounting for convertible debt securities is complex and subject to frequent scrutiny by the accounting regulatory bodies and is subject to change.
−Removed: The issuance of the 4.75% Convertible Senior Notes due 2023 may affect our earnings per share on a fully diluted basis in certain periods.
−Removed: Further, we cannot predict if or when changes in the accounting for convertible debt securities could be made and whether any such change could have an adverse impact on our reported or future financial results.
−Removed: Any such impacts could adversely affect the market price or value of our common stock.
+Added: Risks Related to the 6.00% Notes due 2026
+Added: The 6.00% Notes due 2026 are unsecured and therefore effectively subordinated to any future secured indebtedness we could incur;
+Added: however, we have agreed under the indenture to not incur any secured or unsecured indebtedness that would be senior to the 6.00% Notes due 2026 while the 6.00% Notes due 2026 are outstanding, subject to certain exceptions.
+Added: The 6.00% Notes due 2026 rank pari passu with, or equal to, all outstanding and future unsecured, unsubordinated indebtedness issued by us and our general liabilities.
+Added: The 6.00% Notes due 2026 are not secured by any of our assets or any of the assets of any of our subsidiaries.
+Added: As a result, the 6.00% Notes due 2026 are effectively subordinated to any future secured indebtedness we or our subsidiaries may incur in the future (or any indebtedness that is initially unsecured as to which we subsequently grant a security interest) to the extent of the value of the assets securing such indebtedness.
+Added: However, we have agreed under the governing indenture to not incur any secured or unsecured indebtedness that would be senior to the 6.00% Notes due 2026 while the 6.00% Notes due 2026 are outstanding, subject to certain exceptions.
+Added: In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our future secured indebtedness or secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness in order to receive full payment of their indebtedness before the assets may be used to pay other creditors.
+Added: The 6.00% Notes due 2026 rank pari passu , which means equal in right of payment, with all outstanding and future unsecured, unsubordinated indebtedness issued by us.
+Added: The 6.00% Notes due 2026 also rank pari passu with, or equal to, our general liabilities (total liabilities, less debt).
+Added: In total, these general liabilities were approximately $24.4 million as of December 31, 2021.
+Added: In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of such indebtedness may assert rights equal to the holders of the 6.00% Notes due 2026, which may limit recovery by the holders of the 6.00% Notes due 2026.
+Added: The 6.00% Notes due 2026 are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
+Added: The 6.00% Notes due 2026 are obligations exclusively of SuRo Capital Corp., and not of any of our subsidiaries.
+Added: None of our subsidiaries will be a guarantor of the 6.00% Notes due 2026, and the 6.00% Notes due 2026 are not be required to be guaranteed by any subsidiary we may acquire or create in the future.
+Added: Any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the 6.00% Notes due 2026.
+Added: Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such entities (and therefore the claims of our creditors, including holders of the 6.00% Notes due 2026) with respect to the assets of such entities.
+Added: Even if we are recognized as a creditor of one or more of these entities, our claims would still be effectively subordinated to any security interests in the assets of any such entity and to any indebtedness or other liabilities of any such entity senior to our claims.
+Added: Consequently, the 6.00% Notes due 2026 are structurally subordinated to all indebtedness and other liabilities, including trade payables, of any of our existing or future subsidiaries.
+Added: The indenture under which the 6.00% Notes due 2026 were issued contains limited protection for holders of the 6.00% Notes due 2026.
+Added: The indenture under which the 6.00% Notes due 2026 were issued offers limited protection to holders of the 6.00% Notes due 2026.
+Added: The terms of the indenture and the 6.00% Notes due 2026 do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have a material adverse impact on an investment in the 6.00% Notes due 2026.
+Added: In particular, the terms of the indenture and the 6.00% Notes due 2026 do not place any restrictions on our or our subsidiaries’ ability to:
+Added: • issue securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the 6.00% Notes due 2026, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the 6.00% Notes due 2026 to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the 6.00% Notes due 2026 and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in those entities and therefore rank structurally senior to the 6.00% Notes due 2026 with respect to the assets of our subsidiaries, in each case other than an incurrence of indebtedness or other obligation that would cause a violation of Section 18(a)(1)(A) as modified by such provisions of Section 61(a) of the 1940 Act as may be applicable to us from
+Added: time to time or any successor provisions, whether or not we continue to be subject to such provisions of the 1940 Act, but giving effect, in each case, to any exemptive relief granted to us by the SEC.
+Added: Currently, these provisions generally prohibit us from making additional borrowings, including through the issuance of additional debt or the sale of additional debt securities, unless our asset coverage, as defined in the 1940 Act, equals 200% (or 150% if certain requirements are met) after such borrowings.
+Added: Notwithstanding the foregoing, for the period of time during which the 6.00% Notes due 2026 are outstanding, we will not seek the requisite approval under the 1940 Act of our board of directors or our shareholders to reduce our asset coverage below 200%.
+Added: In addition, we have agreed under the indenture that, for the period of time during which the 6.00% Notes due 2026 are outstanding, we will not incur any indebtedness, unless at the time of the incurrence of such indebtedness we have an asset coverage (as defined in the 1940 Act) of at least 300% after giving effect to the incurrence of such indebtedness and the application of the net proceeds therefrom;
+Added: • pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities ranking junior in right of payment to the 6.00% Notes due 2026, including subordinated indebtedness, except that we have agreed under the indenture that, for the period of time during which the 6.00% Notes due 2026 are outstanding, we will not violate Section 18(a)(1)(B) as modified by (i) Section 61(a) of the 1940 Act or any successor provisions thereto, whether or not we are subject to such provisions of the 1940 Act and after giving effect to any exemptive relief granted to us by the SEC and (ii) the following two exceptions:
+Added: (A) we will be permitted to declare a cash dividend or distribution notwithstanding the prohibition contained in Section 18(a)(1)(B) as modified by Section 61(a) of the 1940 Act or any successor provisions, but only up to such amount as is necessary for us to maintain our status as a RIC under Subchapter M of the Code;
+Added: and (B) this restriction will not be triggered unless and until such time as our asset coverage has not been in compliance with the minimum asset coverage required by Section 18(a)(1)(B) as modified by Section 61(a) of the 1940 Act or any successor provisions (after giving effect to any exemptive relief granted to us by the SEC) for more than six consecutive months.
+Added: Currently, these provisions would generally prohibit us from declaring any cash dividend or distribution upon any class of our capital stock, or purchasing any such capital stock if our asset coverage, as defined in the 1940 Act, were below 200% (or 150% if certain requirements are met) at the time of the declaration of the dividend or distribution or the purchase and after deducting the amount of such dividend, distribution or purchase.
+Added: Notwithstanding the foregoing, for the period of time during which the 6.00% Notes due 2026 are outstanding, we will not seek the requisite approval under the 1940 Act of our board of directors or our shareholders to reduce our asset coverage below 200%.
+Added: In addition, we have agreed under the indenture that, for the period of time during which the 6.00% Notes due 2026 are outstanding, we will not purchase any shares of our outstanding capital stock, unless at the time of any such purchase we have an asset coverage (as defined in the 1940 Act) of at least 300% after deducting the amount of such purchase price;
+Added: • sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets);
+Added: • enter into transactions with affiliates;
+Added: • create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions, except that we have agreed under the indenture to not incur any secured or unsecured indebtedness that would be senior to the 6.00% Notes due 2026 while the 6.00% Notes due 2026 are outstanding, subject to certain exceptions;
+Added: • make investments;
+Added: • create restrictions on the payment of dividends or other amounts to us from our subsidiaries.
+Added: In addition, the indenture governing the 6.00% Notes due 2026 does not require us to make an offer to purchase the 6.00% Notes due 2026 in connection with a change of control or any other event.
+Added: Furthermore, the terms of the indenture and the 6.00% Notes due 2026 do not protect holders of the 6.00% Notes due 2026 in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, if any, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity.
+Added: Our ability to recapitalize, incur additional debt (including additional debt that matures prior to the maturity of the 6.00% Notes due 2026), and take a number of other actions that are not limited by the terms of the 6.00% Notes due 2026 may have important consequences for a holder of the 6.00% Notes due 2026, including making it more difficult for us to satisfy our obligations with respect to the 6.00% Notes due 2026 or negatively affecting the trading value of the 6.00% Notes due 2026.
+Added: Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the 6.00% Notes due 2026, including additional covenants and events of default.
+Added: The issuance or incurrence of any such debt with incremental protections could affect the market for, trading levels, and prices of the 6.00% Notes due 2026.
+Added: An active trading market for the 6.00% Notes due 2026 may not develop or be maintained, which could limit a holder’s ability to sell the 6.00% Notes due 2026 and/or adversely impact the market price of the 6.00% Notes due 2026.
+Added: The 6.00% Notes due 2026 are a new issue of debt securities for which there initially was no trading market.
+Added: The 6.00% Notes due 2026 are listed on the Nasdaq Global Select Market under the symbol “SSSSL”.
+Added: We cannot provide any assurances that an active trading market will develop or be maintained for the 6.00% Notes due 2026 or that a holder will be able to sell its 6.00% Notes due 2026.
+Added: The 6.00% Notes due 2026 may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, if any, general economic conditions, our financial condition, performance and prospects and other factors.
+Added: The underwriters of the public offering of the 6.00% Notes due 2026 have advised us that they intend to make a market in the 6.00% Notes due 2026, but they are not obligated to do so.
+Added: Such underwriters may discontinue any market-making in the 6.00% Notes due 2026 at any time at their sole discretion.
+Added: Accordingly, we can provide no assurance that a liquid trading market will develop or be maintained for the 6.00% Notes due 2026, that a holder will be able to sell its 6.00% Notes due 2026 at a particular time or that the price a holder may receive when it sells its 6.00% Notes due 2026 will be favorable.
+Added: To the extent an active trading market does not develop, the liquidity and trading price for the 6.00% Notes due 2026 may be harmed.
+Added: Accordingly, a holder may be required to bear the financial risk of an investment in the 6.00% Notes due 2026 for an indefinite period of time.
+Added: If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the 6.00% Notes due 2026.
+Added: Any default under any agreements governing any of our future indebtedness that is not waived by the required lenders or holders of such indebtedness, and the remedies sought by lenders or the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the 6.00% Notes due 2026 and substantially decrease the market value of the 6.00% Notes due 2026.
+Added: If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, if any, or if we otherwise fail to comply with any covenants, including financial and operating covenants, as applicable, in the instruments governing our indebtedness, if any, we could be in default under the terms of the agreements governing such indebtedness and the 6.00% Notes due 2026.
+Added: In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under any credit facility or other debt we may enter into or incur in the future could elect to terminate their commitment, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation.
+Added: Our ability to generate sufficient cash flow in the future is, to some extent, subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control.
+Added: We can provide no assurance that our business will generate cash flow from operations, or that future borrowings will be available to us, in an amount sufficient to enable us to meet our payment obligations under the 6.00% Notes due 2026, our other debt, and to fund other liquidity needs.
+Added: If our operating performance declines and we are not able to generate sufficient cash flow to service our debt obligations, we may in the future need to refinance or restructure our debt, including any 6.00% Notes due 2026 sold, sell assets, reduce or delay capital investments, seek to raise additional capital or seek to obtain waivers from the lenders under any credit facility or other debt we may enter into or incur in the future to avoid being in default.
+Added: If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the 6.00% Notes due 2026 and any other debt.
+Added: If we are unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt.
+Added: Because any future credit facilities will likely have customary cross-default provisions, if we have a default under the terms of the 6.00% Notes due 2026, the obligations under any future credit facility may be accelerated and we may be unable to repay or finance the amounts due.
+Added: We may choose to redeem the 6.00% Notes due 2026 when prevailing interest rates are relatively low.
+Added: On or after December 30, 2024, we may choose to redeem the 6.00% Notes due 2026 from time to time, especially if prevailing interest rates are lower than the rate borne by the 6.00% Notes due 2026.
+Added: If prevailing rates are lower at the time of redemption, and we redeem the 6.00% Notes due 2026, a holder likely would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the 6.00% Notes due 2026 being redeemed.
+Added: Our redemption right also may adversely impact a holder’s ability to sell the 6.00% Notes due 2026 as the optional redemption date or period approaches.
+Added: A downgrade, suspension or withdrawal of the credit rating assigned by a rating agency to us or our securities, if any, could cause the liquidity or market value of the 6.00% Notes due 2026 to decline significantly.
+Added: Our credit ratings, if any, are an assessment by rating agencies of our ability to pay our debts when due.
+Added: Consequently, real or anticipated changes in our credit ratings will generally affect the market value of the 6.00% Notes due 2026.
+Added: These credit ratings may not reflect the potential impact of risks relating to the structure or marketing of the 6.00% Notes due 2026.
+Added: Credit ratings are paid for by the issuer and are not a recommendation to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion.
+Added: An explanation of the significance of any ratings of us or our securities may be obtained from the applicable rating agency.
+Added: Generally, rating agencies base their ratings on such material and information, and their own investigations, studies and assumptions, as they deem appropriate.
+Added: Neither we nor any underwriter undertakes any obligation to maintain any such credit ratings or to advise holders of 6.00% Notes due 2026 of any changes in credit ratings of us or our securities.
+Added: There can be no assurance that our credit ratings will remain at their current levels for any given period of time or that such credit ratings will not be lowered or withdrawn entirely by the rating agency if in their judgment future circumstances relating to the basis of the credit ratings, such as adverse changes in our company, so warrant.
+Added: Pursuant to the terms of the indenture governing the 6.00% Notes due 2026, we will use commercially reasonable efforts to maintain a credit rating on the 6.00% Notes due 2026 by a “nationally recognized statistical rating organization” (as such term is defined in Section 3(a)(62) of the Exchange Act) during the period of time that the 6.00% Notes due 2026 are outstanding;
+Added: provided that no minimum credit rating is required.
+Added: We offer no assurance that such rating, should it be maintained, will comport to any particular minimum level of creditworthiness.
Risks Related to an Investment in Our Securities
19 unchanged sentences
Due to the potential volatility of our stock price, we may therefore be the target of securities litigation in the future.
−Removed: Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
+Added: Securities litigation could result in substantial costs and divert management’s attention and
+Added: resources from our business.
+Added: For more information, see "Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expenses, hinder the execution of our investment strategy, and impact our stock price."
Shares of our common stock have recently traded, and may in the future trade, at discounts from net asset value or at premiums that may prove to be unsustainable.
4 unchanged sentences
The risk of purchasing shares of a BDC that might trade at a discount or unsustainable premium is more pronounced for investors who wish to sell their shares in a relatively short period of time because, for those investors, realization of a gain or loss on their investments is likely to be more dependent upon changes in premium or discount levels than upon increases or decreases in net asset value per share.
−Removed: As of March 11, 2021, the closing price of our common stock on the Nasdaq Capital Market was $13.58 per share, which represented an approximately 10.3% discount to our net asset value of $15.14 per share as of December 31, 2020.
+Added: As of March 10, 2022, the closing price of our common stock on the Nasdaq Global Select Market was $8.92 per share, which represented an approximately 23.9% discount to our net asset value of $11.72 per share as of December 31, 2021.
We may not be able to pay distributions to our stockholders and our distributions may not grow over time, particularly since we invest primarily in securities that do not produce current income, and a portion of distributions paid to our stockholders may be a return of capital, which is a distribution of the stockholders’ invested capital.
7 unchanged sentences
When we make distributions, we will be required to determine the extent to which such distributions are paid out of current or accumulated taxable earnings, recognized capital gains or capital.
−Removed: To the extent there is a return of capital, investors will be required to reduce their basis in our stock for federal tax purposes, which may result in higher tax liability when the shares are sold, even if they have not increased in value or have lost value.
+Added: To the extent there is a return of capital, investors will be required to reduce their basis in our stock for U.S.
+Added: federal tax purposes, which may result in higher tax liability when the shares are sold, even if they have not increased in value or have lost value.
In addition, any return of capital will be net of any sales load and offering expenses associated with sales of shares of our common stock.
3 unchanged sentences
We cannot assure you that we will be able to successfully utilize the proceeds within the time frame contemplated.
−Removed: We will also pay
−Removed: operating expenses, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of any offering.
+Added: We will also pay operating expenses, and may pay other expenses such as due diligence expenses of potential new investments, from the net proceeds of any offering.
Our ability to achieve our investment objective may be limited to the extent that the net proceeds of an offering, pending full investment, are used to pay operating expenses.
9 unchanged sentences
Further, in connection with internalizing our operating structure, we may experience difficulty integrating these functions as a stand-alone entity, and we could have difficulty retaining our personnel, including those performing management, investment and general and administrative functions.
−Removed: These personnel have a great deal of know-how and experience.
+Added: These personnel have a great deal of know-how and experience, and replacing such personnel may prove challenging.
We may also fail to properly identify the appropriate mix of personnel and capital needs to operate successfully as a stand-alone entity.
4 unchanged sentences
General Risk Factors
−Removed: We will likely experience fluctuations in our quarterly results and we may be unable to replicate past investment opportunities or make the types of investments we have made to date in future periods.
−Removed: We will likely experience fluctuations in our quarterly operating results due to a number of factors, including the rate at which we make new investments, the level of our expenses, changes in the valuation of our portfolio investments, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions.
+Added: We will likely experience fluctuations in our results and we may be unable to replicate past investment opportunities or make the types of investments we have made to date in future periods.
+Added: We will likely experience fluctuations in our operating results due to a number of factors, including the rate at which we make new investments, the level of our expenses, changes in the valuation of our portfolio investments, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions.
For example, since inception through December 31, 2021, we have experienced substantial cumulative negative cash flows from operations.
31 unchanged sentences
Significant changes to U.S.
−Removed: trade policy may occur as a result of the administration change, including the United States re-entering, withdrawing from or renegotiate various trade agreements or other actions that would change current trade policies of the United States.
+Added: trade policy may occur as a result of the administration change, including the United States re-entering, withdrawing from or renegotiating various trade agreements or other actions that would change current trade policies of the United States.
We cannot predict which, if any, of these actions will be taken or, if taken, their effect on the
3 unchanged sentences
As a publicly traded company, we incur legal, accounting and other expenses, including costs associated with the periodic reporting requirements applicable to a company whose securities are registered under the Exchange Act as well as additional corporate governance requirements, including requirements under the Sarbanes-Oxley Act, and other rules implemented by the SEC.
+Added: These costs may divert capital from other areas of operation and thus adversely affect our business, financial condition and results of operations.
Terrorist attacks, acts of war or natural disasters may affect any market for our securities, impact the businesses in which we invest and harm our business, operating results and financial condition.
Terrorist acts, acts of war or natural disasters may disrupt our operations, as well as the operations of the businesses in which we invest.
−Removed: Such acts have created, and continue to create, economic and political uncertainties and have contributed to global economic instability.
−Removed: Future terrorist activities, military or security operations, or natural disasters could further weaken the domestic/global economies and create additional uncertainties, which may negatively impact the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results and financial condition.
+Added: Such acts have created, and may continue to create, economic and political uncertainties and have contributed to global economic instability.
+Added: Terrorist activities, military or security operations, or natural disasters could further weaken domestic and/or global economies and create additional uncertainties, which may negatively impact the businesses in which we invest directly or indirectly and, in turn, could have a material adverse impact on our business, operating results and financial condition.
Losses from terrorist attacks and natural disasters are generally uninsurable.
3 unchanged sentences
Network, system, application and data breaches could result in operational disruptions or information misappropriation, which could have a material adverse effect on our business, results of operations and financial condition.
−Removed: We and our service providers are currently impacted by quarantines and similar measures being enacted by governments in response to COVID-19, which are obstructing the regular functioning of business workforces (including requiring employees to work from external locations and their homes).
−Removed: In response to the outbreak, we instituted a work from home policy until it is deemed safe to return to the office.
+Added: We and our service providers have been - and may in the future be - impacted by quarantines and similar measures being enacted by governments in response to COVID-19, which may obstruct the regular functioning of business workforces (including by requiring employees to work from external locations and their homes).
Policies of extended periods of remote working, whether by us or our service providers, could strain technology resources, introduce operational risks and otherwise heighten the risks described above.
Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic.
−Removed: Accordingly, the risks described above, are heightened under the current conditions.
+Added: Accordingly, the risks described above are heightened under remote conditions.
The failure in cyber-security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively.
18 unchanged sentences
If we fail to comply with the relevant laws and regulations, we could suffer financial losses, a disruption of our businesses, liability to investors, regulatory intervention or reputational damage.
−Removed: We are subject to risks related to corporate social responsibility.
−Removed: Our business faces increasing public scrutiny related to environmental, social and governance (“ESG”) activities.
−Removed: We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as environmental stewardship, corporate governance and transparency and considering ESG factors in our investment processes.
−Removed: Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations.
−Removed: Additionally, new regulatory initiatives related to ESG could adversely affect our business.
Unresolved Staff Comments
Not applicable.
−Removed: We do not own any real estate or other physical properties materially important to our operations.
−Removed: We have entered into a 5-year operating lease for primary office space at One Sansome Street, Suite 730, San Francisco, CA 94104.
−Removed: We believe that our office facilities are suitable and adequate for our business as it is presently conducted.
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.