What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 371 added, 276 removed, 1236 unchanged (34% of the section changed)

2 unchanged sentences

Statements of Assets and Liabilities

March 31, 2021

June 30, 2021

December 31, 2020

8 unchanged sentences

Other accounts receivable

Prepaid expenses

Prepaid and deferred expenses

Credit facilities

20 unchanged sentences

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Investment income

23 unchanged sentences

Realized and unrealized gain (loss) on investments

Realized (loss) on non-control/non-affiliate investments, including U.S.

Realized gain (loss) on non-control/non-affiliate investments, including U.S.

Treasury Bills

Net change in unrealized (depreciation) on non-control/non-affiliate investments, including U.S.

Net change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S.

Treasury Bills

Net change in unrealized appreciation on control/affiliate investments

Net realized and unrealized (loss) on investments

Net realized and unrealized gain (loss) on investments

Net increase in net assets resulting from operations

7 unchanged sentences

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Net increase in net assets from operations

Net investment income

Realized (loss) on non-control/non-affiliate investments, including U.S.

Realized gain (loss) on non-control/non-affiliate investments, including U.S.

Treasury Bills

Net change in unrealized (depreciation) on non-control/non-affiliate investments, including U.S.

Net change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S.

Treasury Bills

19 unchanged sentences

Statements of Cash Flows

Three Months Ended

March 31, 2021

March 31, 2020

Six Months Ended

June 30, 2021

June 30, 2020

Cash flows from operating activities

2 unchanged sentences

Purchases of investments

(133,681,004)

(100,537,492)

Purchases of U.S.

6 unchanged sentences

Treasury Bills

Net change in unrealized depreciation on investments, including U.S.

Net change in unrealized appreciation (depreciation) on investments, including U.S.

Treasury Bills

4 unchanged sentences

Other accounts receivable

Prepaid expenses

Payable for securities purchased

Prepaid and deferred expenses

Deferred revenue

Accrued incentive fees

4 unchanged sentences

Cash flows from financing activities

Deferred credit facility fees

Borrowings under credit facilities

2 unchanged sentences

Repayments of reverse repurchase agreements

(124,345,001)

Dividends paid to stockholders

12 unchanged sentences

Schedule of Investments (Unaudited)

March 31, 2021

June 30, 2021

Portfolio Companies

10 unchanged sentences

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 7/31/2021 (4)

LIBOR+12.00% PIK, 12.00% floor, due 4/30/21 (4)

Total Senior Secured Term Loans

9 unchanged sentences

Non-control/non-affiliate investments

Corporate Bond

TriplePoint Venture Growth BDC Corp.

Specialty Finance

Bonds, 5.75% Interest rate, due 7/15/2022 (3)

Senior Secured Term Loans (8)

2 unchanged sentences

LIBOR+9.00%, 11.35% floor, 4.50% ETP, due 12/15/2021

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

Portfolio Companies

Investment Description (1),(5),(10)

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Senior Secured Term Loans (13) (continued)

Aria Systems, Inc.

Application Software

LIBOR+9.00%, 11.35% floor, 4.50% ETP, due 12/15/2021

LIBOR+9.00%, 11.35% floor, due 12/15/2021

Allurion Technologies, Inc.

8 unchanged sentences

LIBOR+8.25%, 9.25% floor, 0.75% ETP, due 10/15/2023

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments (Unaudited) — (continued)

June 30, 2021

Portfolio Companies

Investment Description (1),(5),(10)

Fair Value (2),(6)

Non-control/non-affiliate investments (continued)

Senior Secured Term Loans (8) (continued)

Circadence Corporation

1 unchanged sentence

LIBOR+9.50%, 12.00% floor, 7.50% ETP, due 12/15/2022

CloudPassage, Inc.

Data Processing & Outsourced Services

LIBOR+7.50%, 1.00% PIK, 10.00% floor, 2.75% ETP, due 6/13/2023 (4)

CloudPay Solutions Ltd.

5 unchanged sentences

LIBOR+8.35% , 2.00% PIK on overadvance, 10.25% floor, due 5/15/2023 (4)

CrossRoads Extremity Systems, LLC

Health Care Technology

LIBOR+8.15%, 1.50% PIK, 8.65% floor, 3.50% ETP, due 7/1/2025 (4)

Dtex Systems, Inc.

4 unchanged sentences

LIBOR+10.50%, 11.00% floor, 3.00% ETP, due 12/15/2024

Fidelis Cybersecurity, Inc.

Internet Software and Services

LIBOR+11.00%, 12.0% Floor, 2.44% ETP, due 5/13/2024

8 unchanged sentences

LIBOR+8.00%, 10.50% floor, 2.50% ETP, due 7/15/2023

Longtail Ad Solutions, Inc.

(dba JW Player)

Internet Software and Services

Marley Spoon AG

Internet Retail

LIBOR+8.50%, 1.25% PIK, 9.00% floor, due 6/15/2025 (3),(4),(12)

Mingle Healthcare Solutions, Inc.

Health Care Technology

LIBOR+9.50%, 11.75% floor, .25% PIK, 10.00% ETP, due 8/15/2022 (4)

Pivot3 Holdings, Inc.

Data Processing & Outsourced Services

LIBOR+8.50% PIK, 11.00% floor, 4.00% ETP, due 11/15/2022 (4)

LIBOR+8.50% PIK, 11.00% floor, due 11/15/2022 (4)

Tranched III:

LIBOR+8.50% PIK, 11.00% floor, 4.00% ETP, due 11/15/2022 (4)

Porch Group, Inc.

Application Software

LIBOR+8.00%, 8.55% floor, 4.99% ETP, due 12/15/2024 (3), (16)

2 unchanged sentences

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

June 30, 2021

Portfolio Companies

3 unchanged sentences

Senior Secured Term Loans (8) (continued)

Massdrop, Inc.

Computer & Electronics Retail

LIBOR+8.25%, 10.65% floor, 4.00% ETP, due 1/15/2023

LIBOR+8.25%, 10.65% floor, due 1/15/2023

Mingle Healthcare Solutions, Inc.

SetPoint Medical Corporation

Health Care Technology

LIBOR+8.75%, 9.25% floor, 4.00% ETP, due 12/1/2025

Pivot3 Holdings, Inc.

Data Processing & Outsourced Services

LIBOR+8.50% PIK, 11.00% floor, 4.00% ETP, due 11/15/2022 (4)

LIBOR+8.50% PIK, 11.00% floor, due 11/15/2022 (4)

LIBOR+8.50% PIK, 11.00% floor, 4.00% ETP, due 11/15/2022 (4)

Porch Group, Inc.

Application Software

LIBOR+8.00%, 8.55% floor, 4.99% ETP, due 12/15/2024 (3), (15)

ShareThis, Inc.

24 unchanged sentences

Total Preferred Stocks

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

Portfolio Companies

Investment Description (1),(5),(10)

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Common Stocks (7)

6 unchanged sentences

Total Common Stocks

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments (Unaudited) — (continued)

June 30, 2021

Portfolio Companies

Investment Description (1),(5),(10)

Fair Value (2),(6)

Non-control/non-affiliate investments (continued)

AllClear ID, Inc.

25 unchanged sentences

Warrant for Series A-6 Preferred Stock, exercise price $1.17/share, expires 10/31/2029

CloudPassage, Inc.

Data Processing & Outsourced Services

Warrant for Series D-1 Preferred Stock, exercise price $1.60/share, expires 6/13/2029

CloudPay Solutions Ltd.

4 unchanged sentences

Warrant for Common Stock, exercise price $0.01/share, expires 1/7/2030

CrossRoads Extremity Systems, LLC

Health Care Technology

Warrant for Series C Preferred Stock, exercise price $3.79/share, expires 6/29/2031

Dejero Labs Inc.

1 unchanged sentence

Warrant for Common Stock, exercise price $0.01/share, expires 5/31/2029 (3),(11)

Dtex Systems, Inc.

Application Software

Warrant for Series C-Prime Preferred Stock, exercise price $0.6000/share, expires 6/1/2025

Warrant for Series C-Prime Preferred Stock, exercise price $0.6000/share, expires 7/11/2026

See notes to financial statements.

1 unchanged sentence

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

June 30, 2021

Portfolio Companies

3 unchanged sentences

Warrants (7) (continued)

Dtex Systems, Inc.

Application Software

Warrant for Series C-Prime Preferred Stock, exercise price $0.6000/share, expires 6/1/2025

Warrant for Series C-Prime Preferred Stock, exercise price $0.6000/share, expires 7/11/2026

Echo 360 Holdings, Inc.

1 unchanged sentence

Warrant for Series E Preferred Stock, exercise price $1.5963/share, expires 5/3/2029

Warrant for Series E Preferred Stock, exercise price $1.5963/share, expires 6/21/2031

Fidelis Cybersecurity, Inc.

Internet Software and Services

Warrant for Common Stock, exercise price $337.50/share, expires 5/13/2031 (17)

FiscalNote, Inc.

30 unchanged sentences

Warrant for Common Stock, exercise price $0.80/share, expires 3/29/2029

SendtoNews Video, Inc.

SetPoint Medical Corporation

Health Care Technology

Warrant for Class B Preferred Stock, exercise price $1.00/share, expires 6/29/2031 (3),(7)

ShareThis, Inc.

Data Processing & Outsourced Services

Warrant for Series D-3 Preferred Stock, exercise price $2.4320/share, expires 12/3/2028

STN Video Inc.

Warrant for Class B Non-Voting Stock, exercise price $0.67/share, expires 6/30/2027 (3),(7)

The Kairn Corporation

Application Software

Warrant for Common Stock, exercise price $0.01/share, expires 3/9/2030

See notes to financial statements.

1 unchanged sentence

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

June 30, 2021

Portfolio Companies

3 unchanged sentences

Warrants (7) (continued)

ShareThis, Inc.

Data Processing & Outsourced Services

Warrant for Series D-3 Preferred Stock, exercise price $2.4320/share, expires 12/3/2028

The Kairn Corporation

Application Software

Warrant for Common Stock, exercise price $0.01/share, expires 3/9/2030

VERO Biotech LLC

4 unchanged sentences

Treasury Bill, 0.025%, due 07/08/2021 (9)

Treasury Bill, 0.005%, due 07/06/2021

Total U.S.Treasury

Total Investments

1 unchanged sentence

Unless otherwise indicated, all of the Company’s variable rate debt investments bear interest at a rate that is determined by reference to the 3-Month London Interbank Offered Rate (“LIBOR”) or the U.S.

At March 31, 2021, the 3-Month LIBOR was 0.19% and the U.S.

At June 30, 2021, the 3-Month LIBOR was 0.15% and the U.S.

Prime Rate was 3.25%.

(2) All investments in portfolio companies, which as of March 31, 2021 represented 124.64% of the Company’s net assets, are restricted as to resale and were valued at fair value as determined in good faith by the Company’s Board of Directors.

(2) All investments in portfolio companies, which as of June 30, 2021 represented 123.00% of the Company’s net assets, are restricted as to resale and were valued at fair value as determined in good faith by the Company’s Board of Directors.

(3) Investment is not a qualifying asset as defined under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”).

Non-qualifying assets at fair value represent 13.01% of total assets as of March 31, 2021.

Non-qualifying assets at fair value represent 16.00% of total assets as of June 30, 2021.

Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

2 unchanged sentences

PIK interest is accrued and will be paid at maturity.

(5) All investments are domiciled in the United States, unless otherwise noted.

(6) Investment is domiciled in Canada.

(7) Investments are non-income producing.

(5) Disclosures of end-of-term-payments (“ETP”) are one-time payments stated as a percentage of original principal amount.

(6) Investments are held at Fair Value net of the Fair Value of Unfunded Commitments.

See Note 3 for additional detail.

(9) Treasury bill with $25,000,000 par value was purchased pursuant to a 0.25% reverse repurchase agreement with Goldman Sachs dated March 29, 2021, due April 6, 2021, with a repurchase price to the Company of $24,874,914 collateralized by a 0.05% U.S.

Treasury Bill due April 8, 2021 with a par value of 25,000,000 and fair value of $24,999,969.

(10) Disclosures of end-of-term-payments (“ETP”) are one-time payments stated as a percentage of original principal amount.

(7) Investments are non-income producing.

(8) The Credit Agreement (as defined in Note 10) is secured by a perfected first priority security interest in each of the Company’s senior secured term loan investments, except for the Mojix, Inc., Pivot3 Holdings, Inc., and The Kairn Corporation senior secured term loans.

(9) Treasury bill with $20,000,000 par value was purchased pursuant to a 0.30% reverse repurchase agreement with Goldman Sachs dated June 30, 2021, due July 8, 2021, with a repurchase price of $19,900,000 collateralized by a 0.025% U.S.

Treasury Bill due July 8, 2021 with a par value of 20,000,000 and fair value of $19,999,889.

(10) All investments are domiciled in the United States, unless otherwise noted.

(11) Investment is domiciled in Canada.

(12) Investment is domiciled in Germany.

(13) Investment is domiciled in the United Kingdom.

(14) Investment is either a cash success fee payable or earnout of shares based on the consummation of certain trigger events.

(13) The Credit Agreement (as defined in Note 10) is secured by a perfected first priority security interest in each of the Company’s senior secured term loan investments, except for the Mojix, Inc., Pivot3, Inc., and The Kairn Corporation senior secured term loans.

(15) Control investment, as defined under the 1940 Act, in which the Company owns at least 25% of the investment’s voting securities or has greater than 50% representation on its board.

(16) Investment is publicly traded and listed on NASDAQ.

(16) 260,000 shares of CareCloud, Inc.

preferred stock, with a fair value of $1,778,026 have restrictions on the sale of the shares due to escrow claims, and such fair value is considered a Level 2 fair value measurement under the fair value hierarchy.

(17) The warrant count is based upon a percentage of ownership of Fidelis Cybersecurity, Inc..

See notes to financial statements.

1 unchanged sentence

Schedule of Investments (Unaudited) — (continued)

March 31, 2021

June 30, 2021

The following table shows the fair value of the portfolio company investments in which we are deemed to exercise a controlling influence over the management or policies of the portfolio company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the portfolio company as of June 30, 2021, along with the transactions during the six months ended June 30, 2021:

For the Six Months Ended June 30, 2021

Net Change in

Portfolio Company (4)

Investment Description

December 31, 2020

Additions (1)

Reductions (2)

(Depreciation)

June 30, 2021 (3)

Senior Secured Term Loans

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 7/15/2021

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 7/31/2021

LIBOR+12.00% PIK, 12.00% floor, due 4/30/21

Total Senior Secured Term Loans

Preferred Stocks

Series A-1 Preferred Stock

Warrant for Common Stock, exercise price $1.286/share, expires 12/13/2030

Warrant for Common Stock, exercise price $2.1286/share, expires 12/13/2030

Warrant for Common Stock, exercise price $5.57338/share, expires 12/13/2030

Total Warrants

Total Control/affiliate investments

(1) Gross additions includes increases in the basis of investments resulting from new portfolio investments, PIK interest, accretion of OID, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company into this category from a different category.

(2) Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing investments for one or more new investments and the movement of an existing portfolio company out of this category into a different category.

(3) All investments in the portfolio company, which as of June 30, 2021 represented 2.52% of the Company’s net assets, are restricted as to resale and were valued at fair value as determined in good faith by the Company’s Board of Directors.

(4) The Company earned no investment income from control investments.

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments (Unaudited) — (continued)

June 30, 2021

The following tables show the fair value of our portfolio of investments (excluding any U.S.

Treasury Bills held) by geographic region and industry as of March 31, 2021:

March 31, 2021

Treasury Bills held) by geographic region and industry as of June 30, 2021:

June 30, 2021

Investments at

7 unchanged sentences

South Central United States

March 31, 2021

June 30, 2021

Investments at

2 unchanged sentences

Healthcare Technology

Internet Software & Services

Internet Retail

Data Processing & Outsourced Services

Internet Software & Services

Specialized Consumer Services

Data Processing & Outsourced Services

Human Resource & Employment Services

Computer & Electronics Retail

Education Services

Technology Hardware, Storage & Peripherals

Specialty Finance

System Software

Computer & Electronics Retail

See notes to financial statements.

282 unchanged sentences

December 31, 2020

The following table shows the fair value of the portfolio company investments in which we are deemed to exercise a controlling influence over the management or policies of the portfolio company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the portfolio company as of December 31, 2020, along with the transactions during the year ended December 31, 2020:

For the Year Ended December 31, 2020

Net Change in

Portfolio Company (4)

Investment Description

December 31, 2019

Additions (1)

Reductions (2)

(Depreciation)

December 31, 2020 (3)

Senior Secured Term Loans

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 7/15/2021

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 7/31/2021

Total Senior Secured Term Loans

Preferred Stocks

Series A-1 Preferred Stock

Warrant for Common Stock, exercise price $1.286/share, expires 12/13/2030

Warrant for Common Stock, exercise price $2.1286/share, expires 12/13/2030

Warrant for Common Stock, exercise price $5.57338/share, expires 12/13/2030

Total Warrants

Total Control/affiliate investments

(2) Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing Investments for one or more new investments and the movement of an existing portfolio company out of this category into a different category.

(3) All investments in the portfolio company, which as of December 31, 2020 represented 2.11% of the Company’s net assets, are restricted as to resale and were valued at fair value as determined in good faith by the Company’s Board of Directors.

(4) The Company earned no investment income from control investments.

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments — (continued)

December 31, 2020

The following tables show the fair value of our portfolio of investments (excluding any U.S.

33 unchanged sentences

In addition, the Company has elected to be treated, has qualified, and intends to continue to qualify annually as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”).

The Company was formed primarily to lend to, and selectively invest in, small, fast-growing companies in the United States.

The Company was formed primarily to lend to, and selectively invest in, high growth-potential companies in technology, life sciences, healthcare information and services, business services, select consumer services and products in other high-growth industries in the United States.

The Company’s investment objective is to maximize its total return to its stockholders primarily through current income on its loan portfolio, and secondarily through capital appreciation on its warrants and other equity positions.

4 unchanged sentences

The sale of shares of common stock was approved by the unanimous consent of the Company’s sole director at the time.

In December 2016, the Company completed the initial closing of capital commitments in its first private offering of shares of common stock to investors (the “Initial Private Offering”) in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and other applicable securities laws.

The final closing of the Initial Private Offering occurred on December 1, 2017.

As of March 31, 2021, in connection with the Initial Private Offering, the Company had total capital commitments of $275,000,000 and had issued 18,241,157 shares of its common stock for a total purchase price of $275,000,000.

The Company has issued an additional 5,435,688 shares as part of the dividend reinvestment program.

Between December 2016 and December 2017, the Company completed its first private offering of shares of common stock to investors (the “Initial Private Offering”) in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and other applicable securities laws.

As of June 30, 2021, in connection with the Initial Private Offering, the Company had issued 18,241,157 shares of its common stock for a total purchase price of $275,000,000.

As of June 30, 2021, the Company has completed multiple closings under its second private offering (the “Second Private Offering”) and had accepted aggregate capital commitments of $181,473,500.

As of June 30, 2021, the Company has issued 8,352,251 shares of its common stock for a total purchase price of $125,283,766 in connection with the Second Private Offering and $56,189,734 of capital commitments remain undrawn.

As of June 30, 2021, the Company has issued 22,564 shares as an additional direct investment by Runway Growth Holdings LLC, an affiliate of RGC, at a per-share price of $15.00 for total proceeds of $338,453.

As of June 30, 2021, the Company has issued an additional 6,072,815 shares as part of the dividend reinvestment program.

Refer to Note 6 for further detail.

As of March 31, 2021, the Company had completed multiple closings under its second private offering (the “Second Private Offering”) and had accepted aggregate capital commitments of $174,673,500.

The Company has issued 8,352,251 shares of its common stock for a total purchase price of $125,283,766 in connection with the Second Private Offering.

As of March 31, 2021, $49,389,734 of capital commitments remain undrawn.

As of March 31, 2021, the Company has issued 22,564 shares as an additional direct investment by Runway Growth Holdings LLC, an affiliate of RGC, at a per-share price of $15.00 for total proceeds of $338,453.

Note 2 – Summary of Significant Accounting Policies

7 unchanged sentences

The interim unaudited financial statements and notes hereto should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 11, 2021.

Certain items in the March 31, 2020 financial statements have been reclassified to conform to the March 31, 2021 presentation with no net effect on the net increase in net assets resulting from operations.

Certain items in the June 30, 2020 financial statements have been reclassified to conform to the June 30, 2021 presentation with no net effect on the net increase in net assets resulting from operations.

Use of Estimates

7 unchanged sentences

Deferred Credit Facility Fees

The fees and expenses associated with opening the KeyBank loan facilities or Credit Agreement (each as defined below) and CIBC USA Credit Facilities (as defined below) are being deferred and amortized as part of interest expense using the effective interest method over the term of the Credit Agreement and the Credit Facilities in accordance with ASC 470, Debt.

The fees and expenses associated with opening the KeyBank loan facilities or Credit Agreement (as defined below) and Credit Facilities (as defined below) are being deferred and amortized as part of interest expense using the effective interest method over the term of the Credit Agreement and the Credit Facilities in accordance with ASC 470, Debt.

Debt issuance costs associated with the Credit Agreement and the Credit Facilities are classified as a direct reduction of the carrying amount of borrowings with the Credit Agreement and the Credit Facilities, unless there are no outstanding borrowings, in which case the debt issuance costs are presented as an asset.

7 unchanged sentences

If the seller defaults or enters an insolvency proceeding, realization of the collateral by the Company may be delayed, limited or wholly denied.

Pursuant to a reverse repurchase agreement with Goldman Sachs, which expired on April 6, 2021, the Company purchased a U.S.

Treasury Bill, due April 8, 2021.

The fair value of the related collateral that the Company received for this agreement was $24,999,969 at March 31, 2021.

Pursuant to a reverse repurchase agreement with Goldman Sachs, which expired on July 7, 2021, the Company purchased a U.S.

Treasury Bill, due July 8, 2021.

The fair value of the related collateral that the Company received for this agreement was $19,999,889 at June 30, 2021.

Pursuant to a reverse repurchase agreement with Goldman Sachs which expired on January 6, 2021, the Company purchased a U.S.

1 unchanged sentence

The value of the related collateral that the Company received for this agreement was $70,002,060 at December 31, 2020.

At March 31, 2021 and December 31, 2020, the repurchase liability was $24,874,914 and $69,650,000, respectively, which is reflected as Reverse repurchase agreement on the Statement of Assets and Liabilities.

At June 30, 2021 and December 31, 2020, the repurchase liability was $19,900,000 and $69,650,000, respectively, which is reflected as Reverse repurchase agreement on the Statement of Assets and Liabilities.

Investment Transactions and Related Investment Income

1 unchanged sentence

Realized gains or losses from the repayment or sale of investments are measured using the specific identification method.

The amortized cost basis of investments represents the original cost

adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees.

The Company reports changes from the prior period in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation (depreciation) on investments on the Statements of Operations.

The amortized cost basis of investments represents the original cost adjusted for the accretion/amortization of discounts and premiums and upfront loan origination fees.

The Company reports changes from

the prior period in fair value of investments that are measured at fair value as a component of net change in unrealized appreciation (depreciation) on investments on the Statements of Operations.

Dividends are recorded on the applicable ex-dividend date.

10 unchanged sentences

Generally, when current cash interest and/or principal payments on a loan become past due, or if the Company otherwise does not expect the borrower to be able to service its debt and other obligations, the Company will place the investment on non-accrual status and will generally cease recognizing PIK interest and dividend income on that loan for financial reporting purposes until all principal and interest have been brought current through payment or through a restructuring such that the interest and dividend income is deemed to be collectible.

As of March 31, 2021, and December 31, 2020, the Company has not written off any accrued and uncollected PIK interest and dividends.

As of March 31, 2021, the Company had seven loans to Mojix, Inc.

representing an aggregate principal funded of $11,500,000 at a fair market value of $10,135,424, on non-accrual status, which represents 2.14% of the Company’s net assets.

The non-accrual loans as of March 31, 2021 had total interest of $2,123,527 that would have been accrued into income.

As of June 30, 2021, and December 31, 2020, the Company has not written off any accrued and uncollected PIK interest and dividends.

As of June 30, 2021, the Company had six loans to Mojix, Inc.

representing an aggregate principal funded of $11,000,000 at a fair value of $10,913,998, on non-accrual status, which represents 2.28% of the Company’s net assets.

The non-accrual loans as of June 30, 2021 had total interest of $2,561,665 that would have been accrued into income.

Had the loans not been on non-accrual status, $2,039,925 would be payable, and $521,740 would be original issue discount.

As of December 31, 2020, the Company had six loans to Mojix, Inc.

representing an aggregate principal funded of $11,000,000 at a fair market value of $8,961,080, on non-accrual status, which represented 1.92% of the Company's net assets.

representing an aggregate principal funded of $11,000,000 at a fair value of $8,961,080, on non-accrual status, which represented 1.92% of the Company's net assets.

The non-accrual status loans as of December 31, 2020 had total interest of $1,627,725 that would have been accrued into income.

Had the loan not been on non-accrual status, $1,213,861 would be payable, and $413,864 would be original issue discount.

For the three months ended March 31, 2021, approximately 5.8% of the Company’s total investment income was attributable to non-cash PIK interest and dividend income.

For the three months ended March 31, 2020, approximately 3.5% of the Company’s total investment income was attributable to non-cash PIK interest and dividend income.

For the three and six months ended June 30, 2021, approximately 5.6% and 5.7%, respectively, of the Company’s total investment income was attributable to non-cash PIK interest and dividend income.

For the three and six months ended June 30, 2020, approximately 2.1% and 2.9%, respectively, of the Company’s total investment income was attributable to non-cash PIK interest and dividend income.

Valuation of Investments

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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The COVID-19 pandemic and its resultant impact on economic activity and capital market volatility has impacted and may continue to have an impact on the fair market values of the Company’s portfolio investments.

As a result, the fair market values of the Company’s portfolio investments may be negatively impacted after March 31, 2021 by circumstances and events that are not yet known, including the complete or continuing impact of the COVID-19 pandemic and the resulting measures taken in response thereto.

The Company’s valuation process carefully considers the impact of COVID-19-related uncertainties in the various inputs utilized in the determination of the fair market value of its portfolio investments.

The audit committee of the Company’s Board of Directors (the “Audit Committee”) assists the Board of Directors in valuing investments that are not publicly traded or for which current market values are not readily available.

Investments for which market quotations are readily available are valued using market quotations, which are generally obtained from independent pricing services, broker-dealers or market makers.

With respect to portfolio investments for which market quotations are not readily available, the Company’s Board of Directors, with the assistance of the Audit Committee, RGC and its senior investment team and independent valuation agents, is responsible for determining, in good faith, the fair value of such investments in accordance with the valuation policy

approved by the Board of Directors.

If more than one valuation method is used to measure fair value, the results are evaluated and weighted, as appropriate, considering the reasonableness of the range indicated by those results.

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● Preliminary valuation conclusions are then documented and discussed with RGC’s senior investment team;

● At least once annually, the valuation for each portfolio investment, determined to be a Level 3 asset, is reviewed by one or more independent valuation firms.

● At least once annually, the valuation for each portfolio investment, is reviewed by one or more independent valuation firms.

Certain investments, however, may not be evaluated by the applicable independent valuation firm if the net asset value and other aspects of such investments in the aggregate do not exceed certain thresholds;

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● The Company’s Board of Directors reviews the recommended preliminary valuations and determines the fair value of each investment in the Company’s portfolio, in good faith, based on the input of RGC, the independent valuation firm and the Audit Committee.

The Company’s investments are primarily loans made to and equity and warrants of small, fast-growing companies focused in technology, life sciences, health care information and services, business services and other high-growth industries.

The Company’s investments are primarily loans made to and equity and warrants of high growth-potential companies focused in technology, life sciences, healthcare information and services, business services, select consumer services and products and other high-growth industries.

These investments are considered Level 3 assets under ASC Topic 820 because there is no known or accessible market or market indices for these types of debt instruments and, thus, RGC’s senior investment team must estimate the fair value of these investment securities based on models utilizing unobservable inputs.

Rule 2a-5 under the 1940 Act was recently adopted by the SEC and establishes requirements for determining fair value in good faith for purposes of the 1940 Act.

The Company is evaluating the impact of adopting Rule 2a-5 on the financial statements and intends to comply with the new rule’s requirements on or before the compliance date in September 2022.

Investment Valuation Techniques

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Significant increases or decreases in these unobservable inputs could result in a significantly higher or lower fair value measurement;

however, a significantly higher or lower fair value measurement of any of the Company’s portfolio investments may occur regardless of whether there is a signficiant increase or decrease in these unobservable inputs.

Under certain circumstances, the Company may use an alternative technique to value the debt investments to be acquired by the Company that better reflects the fair value of the investment, such as the price paid or realized in a recently completed transaction or a binding offer received in an arms-length transaction, the use of multiple probability-weighted cash flow models when the expected future cash flows contain elements of variability or estimates of proceeds that would be received in a liquidation scenario.

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The risk-free interest rates are calculated based on a weighted average of the risk-free interest rates that correspond closest to the expected remaining life of the warrant.

Significant increases (decreases) in this unobservable input could result in a significantly higher (lower) fair value, but a significantly higher or lower fair value measurement of any of the Company’s portfolio investments may occur regardless of whether there is a significant increase or decrease in this unobservable input.

increases (decreases) in this unobservable input could result in a significantly higher (lower) fair value, but a significantly higher or lower fair value measurement of any of the Company’s portfolio investments may occur regardless of whether there is a significant increase or decrease in this unobservable input.

● Other adjustments, including a marketability discount on private company warrants, are estimated based on judgment about the general industry environment.

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As defined in the 1940 Act, control investments are those where the investor has the ability or power to exercise a controlling influence over the management or policies of a company.

Control is generally deemed to exist when a company or individual

possesses, or has the right to acquire within 60 days or less, beneficial ownership of more than 25.0% of the voting securities of a company.

Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist through the possession outright, or via the right to acquire within 60 days or less, beneficial ownership of 5.0% or more of the outstanding voting securities of a company.

Control is generally deemed to exist when a company or individual possesses, or has the right to acquire within 60 days or less, beneficial ownership of more than 25.0% of the voting securities of a company.

Affiliated investments and affiliated companies are defined by a lesser degree of influence and are deemed to exist through

the possession outright, or via the right to acquire within 60 days or less, beneficial ownership of 5.0% or more of the outstanding voting securities of a company.

Investments are recognized when the Company assumes an obligation to acquire a financial instrument and assumes the risks for gains or losses related to that instrument.

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The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.

There were no material uncertain income tax positions at March 31, 2021 or December 31, 2020.

There were no material uncertain income tax positions at June 30, 2021 or December 31, 2020.

Although we file federal and state tax returns, our major tax jurisdiction is federal.

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The Company would not be able to deduct distributions to stockholders, nor would it be required to make distributions.

In order to requalify as a RIC, in addition to the other requirements discussed above, the Company would be required to distribute all of its previously undistributed earnings attributable to the period it failed to qualify as a RIC by the end of the first year that it intends to requalify as a

If the Company fails to requalify as a RIC for a period greater than two taxable years, it may be subject to regular corporate-level U.S.

federal income tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including items of income, over aggregate losses that would have been realized with respect to such assets if the Company had been liquidated) that it elects to recognize on requalification or when recognized over the next five years.

federal income tax on any net built-in gains with respect to certain of its assets (i.e., the excess of the aggregate gains, including

items of income, over aggregate losses that would have been realized with respect to such assets if the Company had been liquidated) that it elects to recognize on requalification or when recognized over the next five years.

Per Share Information

Basic and diluted earnings per common share is calculated using the weighted-average number of common shares outstanding for the period presented.

For the three months ended March 31, 2021 and 2020, basic and diluted earnings per share of common stock were the same because there were no potentially dilutive securities outstanding.

For the three and six months ended June 30, 2021 and 2020, basic and diluted earnings per share of common stock were the same because there were no potentially dilutive securities outstanding.

Per share data is based on the weighted-average shares outstanding.

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The Company generally intends to distribute, out of assets legally available for distribution, substantially all of its available earnings, on a quarterly basis, subject to the discretion of the Board of Directors.

For the three months ended March 31, 2021, the Company declared and paid dividends in the amount of $11,623,199, of which $2,439,979 was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

For the three months ended March 31, 2020, the Company declared dividends in the amount of $10,324,486, of which $1,939,063 was distributable in cash and the remainder distributable in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

Of these distributions for the three months ended March 31, 2020, $10,307,027 was paid as of March 31, 2020, of which $1,921,604, was cash distributed and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

For the three and six months ended June 30, 2021, the Company declared and paid dividends in the amount of $11,859,731 and $23,482,930, respectively, of which $2,449,360 and $4,889,338, respectively, was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

For the threeand six months ended June 30, 2020, the Company declared dividends in the amount of $9,242,578 and $19,567,064, respectively, of which $1,704,037 and $3,643,100, respectively, was distributable in cash and the remainder distributable in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

Organization and Offering Costs

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Offering costs include, among other things, legal fees and other costs pertaining to the preparation of the Company’s private placement memorandum and other offering documents, including travel-related expenses related to the Initial Private Offering.

Pursuant to the investment advisory agreement between the Company and RGC, as subsequently amended and restated (the “Advisory Agreement”), the Company and RGC agreed that organization and offering costs incurred in connection with the Initial Private Offering would be borne by the Company up to a maximum amount of $1,000,000, provided that the amount of such costs in excess of $1,000,000 would be paid by RGC.

Pursuant to the investment advisory agreement in place between the Company and RGC at the time of the Initial Private Offering, the Company and RGC agreed that organization and offering costs incurred in connection with the Initial Private Offering would be borne by the Company up to a maximum amount of $1,000,000, provided that the amount of such costs in excess of $1,000,000 would be paid by RGC.

As of December 31, 2016, the Company had already incurred the maximum amount of $1,000,000 in organization and offering costs incurred in connection with the Initial Private Offering.

As a result, for the three months ended March 31, 2021 and 2020, the Company did not incur any organization or offering expenses in connection with the Initial Private Offering.

As a result, for the three and six months ended June 30, 2021 and 2020, the Company did not incur any organization or offering expenses in connection with the Initial Private Offering.

Offering costs related to new or follow-on offerings, including the Second Private Offering, were accumulated and charged to additional paid in capital at the time of closing beginning in 2019.

These offering costs related to the Second Private Offering are subject to a cap of $600,000, excluding placement agent fees which have no cap, of which the Company will bear the cost.

As of March 31, 2021 and December 31, 2020, respectively, the Company had accumulated and recorded $613,510 and $608,989 of deferred offering costs.

As of each of March 31, 2021 and December 31, 2020, respectively, $154,738 and $123,009 in placement agent fees had been incurred.

As of June 30, 2021 and December 31, 2020, respectively, the Company had accumulated and recorded $613,820 and $608,989 of offering costs related to the Second Private Offering.

As of each of June 30, 2021 and December 31, 2020, respectively, $154,738 and $123,009 in placement agent fees had been incurred.

Under the terms of the Second Private Offering, offering costs in excess of $600,000, excluding placement agent fees, will be reimbursed by RGC.

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The new guidance is effective as of March 12, 2020 through December 21, 2022.

The Company is currently evaluating its effective date for

adoption and the impact the adoption of this new accounting standard will have on its financial statements, however the impact of the adoption is not expected to be material.

The Company is currently evaluating its effective date for adoption and the impact the adoption of this new accounting standard will have on its financial statements, however the impact of the adoption is not expected to be material.

Note 3 – Commitments and Contingencies

In the normal course of business, the Company may enter into investment agreements under which it commits to make an investment in a portfolio company at some future date or over a specified period of time.

At March 31, 2021, the Company had $58,085,569 in unfunded loan commitments to provide debt financing to its portfolio companies.

The balance of unfunded commitments to extend financing as of March 31, 2021 was as follows:

At June 30, 2021, the Company had $122,560,569 in unfunded loan commitments to provide debt financing to its portfolio companies.

The balance of unfunded commitments to extend financing as of June 30, 2021 was as follows:

Portfolio Company

Investment Type

March 31, 2021

June 30, 2021

Allurion Technologies, Inc.

Senior Secured Term Loan

CloudPassage, Inc.

Senior Secured Term Loan

Credit Sesame, Inc.

Revolving Line

Senior Secured Term Loan

CrossRoads Extremity Systems, LLC

Senior Secured Term Loan

Dtex Systems, Inc.

Senior Secured Term Loan

Fidelis Cybersecurity, Inc.

Senior Secured Term Loan

Gynesonics, Inc.

Senior Secured Term Loan

Marley Spoon AG

Senior Secured Term Loan

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Senior Secured Term Loan

SetPoint Medical Corporation

Senior Secured Term Loan

ShareThis, Inc.

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Total unused commitments to extend financing

The Company’s management believes that its available cash balances, availability under the Credit Agreement and/or ability to drawdown capital from investors provides sufficient funds to cover its unfunded commitments as of March 31, 2021.

The Company has evaluated the expected net future cash flows related to unfunded commitments and determined the fair value to be zero as of March 31, 2021 and December 31, 2020.

The Company has evaluated the expected net future cash flows related to unfunded commitments and determined the fair value to be zero as of June 30, 2021 and December 31, 2020.

The Company is currently not subject to any material legal proceedings, nor, to its knowledge, is any material proceeding threatened against the Company.

From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of its rights under contracts with its portfolio companies.

While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that these proceedings will have a material effect upon its business, financial condition or results of operations.

While the outcome of any such legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its business, financial condition or results of operations.

Note 4 – Concentration of Credit Risk

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Note 5 – Net Increase in Net Assets Resulting from Operations per Common Share

The following information sets forth the computation of basic income per common share for the three months ended March 31, 2021 and 2020:

The following information sets forth the computation of basic income per common share for the three and six months ended June 30, 2021 and 2020:

Three Months Ended

Six Months Ended

Net increase in net assets resulting from operations

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The Company has the authority to issue 100,000,000 shares of common stock, $0.01 par value per share.

During the three months ended March 31, 2021, the Company issued 618,815 shares for $9,183,220 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the three months ended March 31, 2021:

During the three months ended June 30, 2021, the Company issued 637,127 shares for $9,410,371 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the three months ended June 30, 2021:

Distributable

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Balance, end of period

During the three months ended March 31, 2020, the Company issued 575,132 shares for $8,385,423 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the three months ended March 31, 2020:

During the six months ended June 30, 2021, the Company issued 1,255,942 shares for $18,593,591 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the six months ended June 30, 2021:

Distributable

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Balance, end of period

The shares of common stock issued, the price per share and the proceeds raised, from inception through March 31, 2021, are detailed in the following table:

During the three months ended June 30, 2020, the Company issued 529,020 shares for $7,538,541 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the three months ended June 30, 2020:

Distributable

Balance, beginning of period

Issuance of common stock

Reinvestment of dividends

Offering costs

Net investment income

Net realized gain (loss) on investments

Net change in unrealized appreciation

(depreciation) on investments

Dividends declared

Tax reconciliation of stockholders'

equity in accordance with U.S.

Balance, end of period

During the six months ended June 30, 2020, the Company issued 1,104,152 shares for $15,923,964 in connection with the reinvestment of dividends.

The following table summarizes capital activity during the six months ended June 30, 2020:

Distributable

Balance, beginning of period

Issuance of common stock

Reinvestment of dividends

Offering costs

Net investment income

Net realized gain (loss) on investments

Net change in unrealized appreciation

(depreciation) on investments

Dividends declared

Tax reconciliation of stockholders'

equity in accordance with U.S.

Balance, end of period

The shares of common stock issued, the price per share and the proceeds raised, from inception through June 30, 2021, are detailed in the following table:

Issuance Date

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March 24, 2021

May 13, 2021 (1)

Shares were issued as part of the dividend reinvestment plan.

In connection with the Initial Private Offering, the Company issued 18,241,157 shares of its common stock to stockholders for a total purchase price of $275,000,000.

Between June 14, 2019 and March 31, 2021, the Company accepted $174,673,500 in capital commitments under its Second Private Offering.

As of March 31, 2021 and December 31, 2020, respectively, the Company issued 8,352,251 and 8,352,251 shares of its common stock for aggregate proceeds of $125,283,766 and $125,283,766 under the Second Private Offering.

As of March 31, 2021, the Company has issued 22,564 shares as an additional direct investment at $15.00 per share for total proceeds of $338,453 by Runway Growth Holdings LLC, an affiliate of RGC.

Capital commitments may be drawn down from investors by the Company on a pro rata basis, as needed, upon not less than ten (10) days’ prior written notice for the purposes of funding the Company’s investments (including follow-on investments), paying the Company’s expenses, including fees under the Advisory Agreement, by and between the Company and RGC, and/or maintaining a reserve account for the payment of future expenses or liabilities.

Between June 14, 2019 and June 30, 2021, the Company accepted $181,473,500 in capital commitments under its Second Private Offering.

As of June 30, 2021 and December 31, 2020, respectively, the Company issued 8,352,251 and 8,352,251 shares of its common stock for aggregate proceeds of $125,283,766 and $125,283,766 under the Second Private Offering.

As of June 30, 2021, the Company has issued 22,564 shares as an additional direct investment by Runway Growth Holdings LLC, an affiliate of RGC, at $15.00 per share for total proceeds of $338,453.

Capital commitments may be drawn down from investors by the Company on a pro rata basis, as needed, upon not less than ten (10) days’ prior written notice for the purposes of funding the Company’s investments (including follow-on investments), paying the Company’s expenses, including fees under the second amended and restated investment advisory agreement, by and between the Company and RGC (the “Advisory Agreement”), and/or maintaining a reserve account for the payment of future expenses or liabilities.

Note 7 – Related Party Agreements and Transactions

Amended and Restated Advisory Agreement

On November 29, 2016, the Company’s Board of Directors approved an investment advisory agreement between RGC and the Company, under which RGC, subject to the overall supervision of the Board of Directors, manages the day-to-day operations of and provides investment advisory services to the Company (the “Prior Agreement”).

On August 3, 2017, the Board of Directors approved the Advisory Agreement and recommended that the Company’s stockholders approve the Advisory Agreement.

The Advisory Agreement became effective on September 12, 2017 upon approval by the stockholders at a special meeting of stockholders of the Company and was most recently renewed by the Company’s Board of Directors at a virtual meeting on August 5, 2020.

In reliance upon certain exemptive relief granted by the SEC in connection with the global COVID-19 pandemic, the Board of Directors undertook to ratify the Advisory Agreement at its next in-person meeting.

On April 7, 2021, the Board of Directors approved the Advisory Agreement at a virtual meeting and recommended that the Company’s stockholders approve the Advisory Agreement.

The Advisory Agreement amended the Prior Advisory Agreement to include certain revisions to the management and incentive fee calculation mechanisms and clarify language relating to liquidity events.

The Advisory Agreement became effective on May 27, 2021 upon approval by the stockholders at a special meeting of stockholders of the Company.

Under the terms of the Advisory Agreement, RGC:

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Base Management Fee

The base management fee is payable on the first day of each calendar quarter, is subject to an annual cap based on RGC’s actual operating expenses and is calculated based on the Capital Commitments (as defined below) and assets purchased with borrowed funds or other forms of leverage (collectively, the “Pre-Spin-Off Gross Assets”) during the preceding calendar quarter.

For purposes of the Advisory Agreement, “Capital Commitments” is defined as the aggregate amount of capital committed to the Company by investors as of the end of the most recently completed calendar quarter.

On September 12, 2017, without changing the base management fee percentage, the Prior Agreement was amended to provide clarification as to the calculation of the base management fee.

Prior to amendment, the base management fee was collected on the first day of each quarter based on an estimate of actual operating expenses,

not to exceed 1.75% per annum, for the following quarter with an implied, though not defined “true-up” mechanism effected once all actual costs were known.

The Advisory Agreement defines the process and timing of the true-up and base management fee.

The base management fee is now collected at the maximum annualized rate of 1.75% per annum with a comparison of actual expenses for the immediately preceding calendar year to occur on or before March 31 of the subsequent calendar year, with any excess management fee collected when compared to actual operating expenses credited against the base management fee payable for subsequent quarters.

Until the earlier of (1) the consummation of an initial public offering (“IPO”) of the Public Fund (defined below) in connection with a Spin-Off transaction (defined below) and (2) the earliest date at which (a) all Capital Commitments have been called for investments and/or expenses and (b) the Company holds no more than 10.0% of its total assets in cash, the base management fee will be an amount equal to 0.4375% (1.75% annualized) of the Pre-Spin-Off Gross Assets at the end of the most recently completed calendar quarter, provided, however, that the base management fee payable in a calendar year will not exceed the actual operating expenses incurred by RGC during such calendar year (the “Management Fee Cap”).

No later than March 31 of each calendar year, RGC will provide the Company a reconciliation of the actual operating expenses incurred by RGC for the prior calendar year and the base management fee paid to RGC for such prior calendar year.

To the extent the base management fee paid to RGC for such prior calendar year exceeds the Management Fee Cap (the “Excess Fee”) for such prior calendar year, the base management fee payable to RGC for the second calendar quarter and each subsequent quarter immediately following such calendar year will be reduced by the Excess Fee until such time as the Excess Fee for the prior calendar year has been reduced to zero.

For the avoidance of doubt, actual operating expenses of RGC for a particular year will not include any reduction in base management fees as a result of Excess Fees paid by the Company.

For purposes of the Advisory Agreement, a “Spin-Off transaction” includes a transaction whereby the Company offers its stockholders the option to elect to either (i) retain their ownership of shares of the Company’s common stock;

(ii) exchange their shares of the Company’s common stock for shares of common stock in a newly formed entity (the “Public Fund”) that will elect to be regulated as a BDC under the 1940 Act and treated as a RIC under Subchapter M of the Code, and will use its commercially reasonable best efforts to complete an IPO of shares of its common stock not later than three years after the Company’s final closing of the Initial Private Offering, which occurred on December 1, 2017;

or (iii) exchange their shares of the Company’s common stock for interests of one or more newly formed entities (each, a “Liquidating Fund”) that will each be organized as a limited liability company, and which will, among other things, seek to complete an orderly wind down and/or liquidation of any such Liquidating Fund.

Following the earlier of (1) the consummation of an IPO of the Public Fund in connection with a Spin-Off transaction and (2) the earliest date at which (a) all Capital Commitments have been called for investments and/or expenses and (b) the Company holds no more than 10.0% of its total assets in cash, the base management fee will be an amount equal to 0.4375% (1.75% annualized) of the Company’s average daily Gross Assets (defined below) during the most recently completed calendar quarter for so long as the aggregate amount of Gross Assets of the Company as of the end of the most recently completed calendar quarter is less than $500,000,000.

The base management fee is payable on the first day of each calendar quarter.

For purposes of the Advisory Agreement, a “Spin-Off transaction” includes either a transaction whereby (a) the Company offers its stockholders the option to elect to either (i) retain their ownership of shares of the Company’s common stock, or (ii) exchange their shares of the Company’s common stock for shares of common stock in a newly formed entity (the “Public Fund”) that will elect to be regulated as a BDC under the 1940 Act and treated as a RIC under Subchapter M of the Code (the “Public Fund Spin Off”);

or (b) the Company completes a listing of the Company’s securities on any securities exchange (an “Exchange Listing”).

The base management fee will be an amount equal to 0.40% (1.60% annualized) of the Company’s average daily Gross Assets (defined below) during the most recently completed calendar quarter for so long as the aggregate amount of Gross Assets of the Company as of the end of the most recently completed calendar quarter is equal or greater than $500,000,000 but less than $1,000,000.

For purposes of the Advisory Agreement, “Gross Assets” is defined as the Company’s gross assets, including assets purchased with borrowed funds or other forms of leverage, as well as any paid-in-kind interest, as of the end of the most recently completed fiscal quarter.

If the aggregate amount of the Company’s Gross Assets as of the end of the most recently completed calendar quarter is equal to or greater than $500,000,000, but less than $1,000,000,000, the base management fee will be an amount equal to 0.40% (1.60% annualized) of the Company’s average daily Gross Assets during the most recently completed calendar quarter.

If the aggregate amount of the Company’s Gross Assets as of the end of the most recently completed calendar quarter is less than $500,000,000the base management fee will be an amount equal to 0.4375% (1.75% annualized) of the Company’s average daily Gross Assets during the most recently completed calendar quarter.

If the aggregate amount of the Company’s Gross Assets as of the end of the most recently completed calendar quarter is equal to or greater than $1,000,000,000, the base management fee will be an amount equal to 0.375% (1.50% annualized) of the Company’s average daily Gross Assets during the most recently completed calendar quarter.

RGC earned base management fees of $2,069,209 and $1,536,948 for the three months ended March 31, 2021 and 2020, respectively.

RGC earned base management fees of $2,276,341 and $4,345,550 for the three and six months ended June 30, 2021, respectively, and $1,758,729 and $3,295,677 for the three and six months ended June 30, 2020, respectively.

Incentive Fee

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Under the investment-income component (the “Income Incentive Fee”), the Company pays RGC each quarter an incentive fee with respect to the Company’s Pre-Incentive Fee net investment income.

The Income Incentive Fee is calculated and payable quarterly

in arrears based on the Pre-Incentive Fee net investment income for the immediately preceding fiscal quarter.

The Income Incentive Fee is calculated and payable quarterly in arrears based on the Pre-Incentive Fee net investment income for the immediately preceding fiscal quarter.

Payments based on Pre-Incentive Fee net investment income will be based on the Pre-Incentive Fee net investment income earned for the quarter.

For this purpose, “Pre-Incentive Fee net investment income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial and consulting fees or other fees that the Company receives from portfolio companies) that the Company accrues during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the administration agreement with the Administrator (the “Administration Agreement”), and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee);

provided however, that Pre-Incentive Fee net investment income will be reduced by multiplying the Pre-Incentive Fee net investment income earned for the quarter by a fraction, the numerator of which is the Company’s average daily Gross Assets during the immediately preceding fiscal quarter minus average daily borrowings during the immediately preceding fiscal quarter, and the denominator of which is the Company’s average daily Gross Assets during the immediately preceding fiscal quarter.

For this purpose, “Pre-Incentive Fee net investment income” means interest income, dividend income and any other income (including any other fees, such as commitment, origination, structuring, diligence, managerial and consulting fees or other fees that the Company receives from portfolio companies) that the Company accrues during the fiscal quarter, minus the Company’s operating expenses for the quarter (including the base management fee, expenses payable under the amended and restated administration agreement with the Administrator (the “Administration Agreement”), and any dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee).

Pre-Incentive Fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with pay in kind interest and zero coupon securities), accrued income the Company has not yet received in cash;

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and (3) 20.0% of the amount of the Company’s Pre-Incentive Fee net investment income, if any, that exceeds 2.667% in any calendar quarter (10.668% annualized) payable to RGC (once the hurdle is reached and the catch-up is achieved, 20.0% of all Pre-Incentive Fee net investment income thereafter is allocated to RGC).

Until the consummation of an IPO of the Public Fund in connection with a Spin-Off transaction, in the event that (a) the sum of the Company’s cumulative net realized losses since the date of the Company’s election to be regulated as a BDC exceeds 2.0% of the total non-control/non-affiliate investments made by the Company since the date of the Company’s election to be regulated as a BDC through the end of the quarter and (b) the Pre-Incentive Fee net investment income adjusted to include any realized capital gains and losses (“Adjusted Pre-Incentive Fee net investment income”), expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), since the Company’s election to be regulated as a BDC through the end of the quarter is less than 10.0%, no Income Incentive Fee will be payable for such quarter until the first subsequent quarter in which either (x) the sum of the Company’s cumulative net realized losses since the date of the Company’s election to be regulated as a BDC is equal to or less than 2.0% of the total non-control/non-affiliate investments made by the Company since the date of the Company’s election to be regulated as a BDC through the end of such subsequent quarter or (y) the Adjusted Pre-Incentive Fee net investment income, expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), since the Company’s election to be regulated as a BDC through the of the end of the quarter equals or exceeds 10.0%;

Until the consummation of a Spin-Off transaction, in the event that (a) the sum of the Company’s cumulative net realized losses since the date of the Company’s election to be regulated as a BDC exceeds 2.0% of the total non-control/non-affiliate investments made by the Company since the date of the Company’s election to be regulated as a BDC through the end of the quarter and (b) the Pre-Incentive Fee net investment income adjusted to include any realized capital gains and losses (“Adjusted Pre-Incentive Fee net investment income”), expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), since the Company’s election to be regulated as a BDC through the end of the quarter is less than 10.0%, no Income Incentive Fee will be payable for such quarter until the first subsequent quarter in which either (x) the sum of the Company’s cumulative net realized losses since the date of the Company’s election to be regulated as a BDC is equal to or less than 2.0% of the total non-control/non-affiliate investments made by the Company since the date of the Company’s election to be regulated as a BDC through the end of such subsequent quarter or (y) the Adjusted Pre-Incentive Fee net investment income, expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), since the Company’s election to be regulated as a BDC through the of the end of the quarter equals or exceeds 10.0%;

provided, however, that in no event will any Income Incentive Fee be payable for any prior quarter after the three-year anniversary of the end of such quarter.

After the consummation of an IPO of the Public Fund in connection with a Spin-Off transaction, in the event that (a) the sum of the Company’s cumulative net realized losses for the previous four fiscal quarters or, if fewer than four fiscal quarters have passed since such IPO, that number of fiscal quarters since such IPO (the “Look-Back Period”), exceeds 2.0% of the total non-control/non-affiliate investments (i) made by the Company during the Look-Back Period or (ii) transferred to the Public Fund in connection with a Spin-Off transaction during the Look-Back Period and (b) the Adjusted Pre-Incentive Fee net investment income, expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), during the Look-

Back Period is less than 10.0% no Income Incentive Fee will be payable for such quarter until the first subsequent quarter in which (x) the sum of the Company’s cumulative net realized losses for the Look-Back Period is equal to or less than 2.0% of the total non-control/non-affiliate investments (i) made by the Company during the Look-Back Period or (ii) transferred to the Public Fund in connection with a Spin-Off transaction during the Look-Back Period or (y) the Adjusted Pre-Incentive Fee net investment income, expressed as an annualized rate of return on the value of the Company’s average daily net assets (defined as total assets less liabilities), during the Look-Back Period equals or exceeds 10.0%;

provided, however, that in no event will any Income Incentive Fee be paid for any prior quarter after the three-year anniversary of the end of such quarter.

Under the capital-gains component of the incentive fee (the “Capital Gains Fee”), the Company will pay RGC, as of the end of each calendar year, 20.0% of the Company’s aggregate cumulative realized capital gains, if any, from the date of the Company’s election to be regulated as a BDC through the end of that calendar year, computed net of the Company’s aggregate cumulative realized capital losses and aggregate cumulative unrealized capital depreciation through the end of such year, less the aggregate amount of any previously paid Capital Gains Fee.

provided, however, that the Company will not pay the Capital Gains Fee to RGC for any calendar year in which the sum of the Company’s (1) Pre-Incentive Fee net investment income and (2) realized gains less realized losses and unrealized capital depreciation from the date of the Company’s election to be regulated as a BDC through the end of such calendar year, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less liabilities) at the end of such calendar year is less than 8.0% until the first subsequent calendar quarter in which the sum of the Company’s (1) Pre-Incentive Fee net investment income and (2) realized gains less realized losses and unrealized capital depreciation from the date of the Company’s election to be regulated as a BDC through, and including, the end of such subsequent calendar quarter, expressed as a rate of return on the value of the Company’s net assets (defined as total assets less liabilities) at the end of such calendar quarter is equal to or exceeds 8.0%;

provided, further, that in no event will any Capital Gains Fee be paid for any prior year after the three-year anniversary of the end of such year.

For the foregoing purpose, the Company’s “aggregate cumulative realized capital gains” will not include any unrealized appreciation.

If such amount is negative, then no Capital Gains Fee will be payable for such year.

RGC earned incentive fees of $975,704 for the three months ended March 31, 2021;

$739,231 of the incentive fees for the three months ended March 31, 2021 were earned, payable in cash, and $236,473 of the incentive fees for the three months ended March 31, 2021 were accrued and generated from deferred interest (i.e., PIK interest and certain discount accretion) and are not payable pending receipt of cash by the Company.

RGC earned incentive fees for the three months ended March 31, 2020 of $2,315,118;

$1,846,533 of the incentive fees for the three months ended March 31, 2020 were earned, payable in cash, and $468,585 of the incentive fees for the three months ended March 31, 2020 were accrued and deferred (i.e., PIK interest and certain discount accretion) and are not payable pending receipt of cash by the Company.

RGC earned incentive fees of $2,836,303 and $3,812,007, respectively, for the three and six months ended June 30, 2021;

$2,229,639 and $2,968,870, respectively, of the incentive fees for the three and six months ended June 30, 2021 were earned, payable in cash, and $606,664 and $843,137, respectively, of the incentive fees for the three and six months ended June 30, 2021 were accrued and generated from deferred interest (i.e., PIK interest and certain discount accretion) and are not payable pending receipt of cash by the Company.

RGC earned incentive fees for the three and six months ended June 30, 2020 of $905,858 and $3,220,976, respectively;

$686,221 and $2,532,754, respectively, of the incentive fees for the three and six months ended June 30, 2020 were earned, payable in cash, and $219,637 and $688,222, respectively, of the incentive fees for the three and six months ended June 30, 2020 were accrued and deferred (i.e., PIK interest and certain discount accretion) and are not payable pending receipt of cash by the Company.

The capital gains incentive fee consists of fees related to realized gains, realized capital losses and unrealized capital depreciation.

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GAAP requires that the capital gains invective fee accrual consider the cumulative aggregate unrealized appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized appreciation were realized even though such unrealized appreciation is not permitted to be considered in calculating the fee actually payable under the Advisory Agreement.

As of each of March 31, 2021 and December 31, 2020, there was no capital gains incentive fee accrued, earned or payable to RGC under the Advisory Agreement.

As of each of June 30, 2021 and December 31, 2020, there was no capital gains incentive fee accrued, earned or payable to RGC under the Advisory Agreement.

Spin-Off Incentive Fee

The Income Incentive Fee will be payable in connection with a Spin-Off transaction.

The Income Incentive Fee will be calculated as of the date of the completion of each Spin-Off transaction and will equal the amount of Income Incentive Fee that would be payable to RGC if (1) all of the Company’s investments were liquidated for their current value and any unamortized deferred portfolio investment-related fees would be deemed accelerated, (2) the proceeds from such liquidation were used to pay all of the Company’s outstanding liabilities, and (3) the remainder were distributed to the Company’s stockholders and paid as incentive fee in accordance with the Income Incentive Fee described in clauses (1) and (2) above for determining the amount of the Income Incentive Fee;

provided, however, that in no event will the Income Incentive Fee paid in connection with the completion of a Spin-Off transaction (x) include the portion of the Income Incentive Fee attributable to deferred interest features of a particular investment that is not transferred pursuant to a Spin-Off transaction until such time as the deferred interest is received in cash, or (y) exceed 20.0% of the Company’s Pre-Incentive Fee net investment income accrued by the Company for the fiscal quarter as of the date of the completion of the Spin-Off transaction.

The Company will make the payment of the Income Incentive Fee paid in connection with the completion of a Spin-Off transaction in cash on or immediately following the date of the completion of a Spin-Off transaction.

After a Spin-Off transaction, all calculations relating to the incentive fee payable will be made beginning on the day immediately following the completion of the Spin-Off transaction

without taking into account the exchanged shares of the Company’s common stock (or contributions, distributions or proceeds relating thereto).

The Capital Gains Fee will be payable in respect of the exchanged shares of the Company’s common stock in connection with a Spin-Off transaction and will be calculated as of the date of the completion of a Spin-Off transaction as if such date were a calendar year-end for purposes of calculating and paying the Capital Gains Fee.

No Income Incentive Fee or Capital Gains Fee will be payable in connection with a Spin-Off transaction unless, on the date of the completion of a Spin-Off transaction, the sum of the Company’s (i) Pre-Incentive Fee net investment income and (ii) realized capital gains less realized capital losses and unrealized capital depreciation from the date of the Company’s election to be regulated as a BDC through, and including, the date of the completion of such Spin-Off transaction, is greater than 8.0% of the cumulative net investments made by the Company since the Company’s election to be regulated as a BDC.

The Income Incentive Fee will be payable in connection with a Public Fund Spin-Off as follows.

The Income Incentive Fee will be calculated as of the date of the completion of each Public Fund Spin-Off and will equal the amount of Income Incentive Fee that would be payable to RGC if (1) all of the Company’s investments were liquidated for their current value and any unamortized deferred portfolio investment-related fees would be deemed accelerated, (2) the proceeds from such liquidation were used to pay all of the Company’s outstanding liabilities, and (3) the remainder were distributed to the Company’s stockholders and paid as incentive fee in accordance with the Income Incentive Fee described in clauses (1) and (2) above for determining the amount of the Income Incentive Fee;

provided, however, that in no event will the Income Incentive Fee paid in connection with the completion of the Public Fund Spin-Off(x) include the portion of the Income Incentive Fee attributable to deferred interest features of a particular investment that is not transferred pursuant to the Public Fund Spin-Off until such time as the deferred interest is received in cash, or (y) exceed 20.0% of the Company’s Pre-Incentive Fee net investment income accrued by the Company for the fiscal quarter as of the date of the completion of the Public-Fund Spin-Off.

The Company will make the payment of the Income Incentive Fee paid in connection with the completion of the Public Fund Spin-Off in cash on or immediately following the date of the completion of the Public-Fund Spin-Off.

After the Public Fund Spin-Off, all calculations relating to the incentive fee payable will be made beginning on the day immediately following the completion of the Public Fund Spin-Off without taking into account the exchanged shares of the Company’s common stock (or contributions, distributions or proceeds relating thereto).

The Capital Gains Fee will be payable in respect of the exchanged shares of the Company’s common stock in connection with the Public Fund Spin-Off and will be calculated as of the date of the completion of the Public Fund Spin-Off as if such date were a calendar year-end for purposes of calculating and paying the Capital Gains Fee.

No Income Incentive Fee or Capital Gains Fee will be payable in connection with the Public Fund Spin-Off unless, on the date of the completion of the Public Fund Spin-Off, the sum of the Company’s (i) Pre-Incentive Fee net investment income and (ii) realized capital gains less realized capital losses and unrealized capital depreciation from the date of the Company’s election to be regulated as a BDC through, and including, the date of the completion of the Public Fund Spin-Off, is greater than 8.0% of the cumulative net investments made by the Company since the Company’s election to be regulated as a BDC.

Administration Agreement

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In addition, the Company reimburses the Administrator for the fees and expenses associated with performing compliance functions, and the Company’s allocable portion of the compensation of certain of its officers, including the Company’s Chief Financial Officer, Chief Compliance Officer and any administrative support staff.

Pursuant to the terms of the Administration Agreement, the amounts payable to the Administrator by the Company in any fiscal year will not exceed the greater of (i) 0.75% of the aggregate capital commitments as of the end of the most recently completed fiscal year and (ii) $1.0 million.

The Company reimbursed the Administrator $315,540 during the three months ended March 31, 2021.

As of March 31, 2021, the Company had accrued a net payable to the Administrator of $32,858.

Of the total amount reimbursed and accrued during the three months ended March 31, 2021, $285,915 was related to overhead allocation expense.

The Company reimbursed the Administrator $162,123 during the three months ended March 31, 2020.

As of March 31, 2020, the Company accrued a net payable to the Administrator of $117,681.

Of the total amount reimbursed and accrued during the three months ended March 31, 2020, $132,793 was related to overhead allocation expense.

The Company reimbursed the Administrator $163,842 and $479,382, respectively, during the three and six months ended June 30, 2021.

As of June 30, 2021, the Company had accrued a net payable to the Administrator of $116,544.

Of the total amount reimbursed and accrued during the three and six months ended June 30, 2021, $151,524 and $437,439, respectively, was related to overhead allocation expense.

The Company reimbursed the Administrator $144,206 and $306,329, respectively, during the three and six months ended June 30, 2020.

As of June 30, 2020, the Company accrued a net payable to the Administrator of $84,432.

Of the total amount reimbursed and accrued during the three and six months ended June 30, 2020, $141,901 and $274,694, respectively, was related to overhead allocation expense.

As of December 31, 2020, the Company had accrued a net payable to the Administrator of $143,515.

Administration fees, which include fees payable by the Administrator to third-party service providers who provide additional administration services for the Company, were $148,100 for the three months ended March 31, 2021.

License Agreement

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Oaktree Strategic Relationship

In December 2016, RGC entered into a strategic relationship with Oaktree Capital Management, L.P.

In connection with the strategic relationship, OCM Growth Holdings, LLC, a Delaware limited liability company (“OCM”) managed by Oaktree, made an initial $125.0 million capital commitment to the Company, which was subsequently increased to $139.0 million (the “Initial OCM Commitment”).

In December 2016, the Company and RGC entered into a strategic relationship with Oaktree Capital Management, L.P.

As part of the strategic relationship, OCM Growth Holdings, LLC, a Delaware limited liability company (“OCM”) managed by Oaktree, made an initial $125.0 million capital commitment to the Company, which was subsequently increased to $139.0 million (the “Initial OCM Commitment”).

On September 14, 2019, in connection with the Second Private Offering, the Company accepted a capital commitment from OCM in the amount of $112.5 million (the “Subsequent OCM Commitment and, together with the Initial OCM Commitment, the “OCM Commitment”).

As of March 31, 2021, OCM owns 18,305,267 shares of our common stock or 57% of our total issued and outstanding shares.

OCM has granted a proxy to the Company pursuant to which the shares held by OCM will be voted in the same proportion as the Company’s other stockholders vote their shares.

Brian Laibow was appointed to the Company’s Board of Directors as OCM’s representative.

OCM also holds an interest in RGC and has the right to appoint a member of RGC’s board of managers and a member of RGC’s investment committee.

As of June 30, 2021, OCM owns 18,763,829 shares of our common stock or 57% of our total issued and outstanding shares.

Pursuant to an irrevocable proxy, the shares of the Company’s common stock held by OCM must be voted in the same manner that our other stockholders vote their shares.

In connection with the OCM Commitment, the Company entered into a stockholder agreement, dated December 15, 2016, with OCM, pursuant to which OCM has a right to nominate a member of the Company’s Board of Directors for election for so long as OCM holds shares of the Company’s common stock in an amount equal to, in the aggregate, at least one-third (33%) of OCM’s initial $125 million capital commitment.

Brian Laibow, Co-Head of North America & Managing Director Opportunities Funds, serves on the Company’s Board of Directors as OCM’s director nominee and is considered an interested director.

OCM also holds a minority interest in RGC and has the right to appoint a member of RGC’s board of managers and a member of RGC’s investment committee.

Brian Laibow is OCM’s appointee to RGC’s board of managers and investment committee.

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See Note 2 for discussion of the Company’s valuation policies.

The following tables present information about the Company’s assets and liabilities measured at fair value as of March 31, 2021 and December 31, 2020, respectively:

As of March 31, 2021

The following tables present information about the Company’s assets and liabilities measured at fair value as of June 30, 2021 and December 31, 2020, respectively:

As of June 30, 2021

Portfolio Investments

Corporate Bonds

Senior Secured Term Loans

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The Company recognizes transfers into and out of the levels indicated above at the end of each reporting period.

During the period ended March 31, 2021, the Company had a warrant investment converted to a common stock investment, resulting in an asset transfer out of Level 3 and into Level 2 at the fair value of $9,492,345.

During the period ended June 30, 2021, the Company had a warrant investment converted to a common stock investment, resulting in an asset transfer out of Level 3 and into Level 2 at the fair value of $9,492,345.

There were no transfers into or out of the levels during the year ended December 31, 2020.

The following table presents a rollforward of Level 3 assets measured at fair value as of March 31, 2021:

The following table presents a rollforward of Level 3 assets measured at fair value as of June 30, 2021:

Senior Secured

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Transfers out of Level 3

Realized gain (loss)

Change in unrealized (depreciation)

Fair value at March 31, 2021

Change in unrealized (depreciation) on Level 3 investments still held as of March 31, 2021

Realized (loss)

Change in unrealized appreciation (depreciation)

Fair value at June 30, 2021

Change in unrealized appreciation (depreciation) on Level 3 investments still held as of June 30, 2021

(1) Includes PIK interest, net of reorganization and restructuring of investments.

The following table presents a rollforward of Level 3 assets measured at fair value as of March 31, 2020:

The following table presents a rollforward of Level 3 assets measured at fair value as of June 30, 2020:

Senior Secured

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Change in unrealized appreciation (depreciation)

Fair value at March 31, 2020

Change in unrealized (depreciation) on Level 3 investments still held as of March 31, 2020

Fair value at June 30, 2020

Change in unrealized appreciation (depreciation) on Level 3 investments still held as of June 30, 2020

(1) Includes PIK interest, net of reorganization and restructuring of investments.

The following table provides quantitative information regarding Level 3 fair value measurements as of March 31, 2021:

The following table provides quantitative information regarding Level 3 fair value measurements as of June 30, 2021:

Valuation Technique

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The significant unobservable inputs used in the fair value measurement of the Company’s warrant and equity-related securities are inputs used in the option pricing model (“OPM”), which include industry volatility, risk free interest rate and estimated time to exit.

The Equity Allocation model and the Black Scholes model were the main OPMs used during the period ended March 31, 2021 and the year ended December 31, 2020.

The Equity Allocation model and the Black Scholes model were the main OPMs used during the period ended June 30, 2021 and the year ended December 31, 2020.

Probability Weighted Expected Return Models (“PWERM”) and other techniques were used as determined appropriate.

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The Company’s volume of warrant investment activity is closely correlated to its primary senior secured loans to portfolio companies.

For the three months ended March 31, 2021, the Company had a net realized loss of $216,610 and a net change in unrealized depreciation of $2,262,612 from

its investments in warrants.

For the three months ended March 31, 2020, the Company had net realized gains of $1,179,751 and a net change in unrealized depreciation of $1,630,167 from its investment in warrants.

Realized gains from warrants is included in Realized gain (loss) on non-control/non-affiliate investments, including U.S.

For the three and six months ended June 30, 2021, the Company had a net realized loss of $273,798 and $490,408, respectively, and a net change in unrealized appreciation of $2,875,080 and $612,468, respectively, from its investments in warrants.

For the three and six months ended June 30, 2020, the Company had net realized gains of $0 and $1,179,751, respectively, and a net change in unrealized appreciation of $3,445,598 and $1,815,431, respectively, from its investments in warrants.

Realized loss from warrants is included in Realized gain (loss) on non-control/non-affiliate investments, including U.S.

Treasury Bills on the Statement of Operations.

Net change in unrealized depreciation from investments in warrants in the amount of $2,262,612 is included in Net Change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S.

Net change in unrealized appreciaiont/depreciation from investments in warrants is included in Net Change in unrealized appreciation (depreciation) on non-control/non-affiliate investments, including U.S.

Treasury Bills.

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(ii) increase the accordion amount under the Credit Facility from a $200 million maximum aggregate commitment amount to a $300 million maximum aggregate commitment amount;

and (iii) add

Bank of Hope and First Foundation Bank as new Lenders and Managing Agents under the Credit Agreement.

and (iii) add Bank of Hope and First Foundation Bank as new Lenders and Managing Agents under the Credit Agreement.

Borrowing under the Credit Facility remains subject to the leverage restrictions contained in the 1940 Act.

On June 1, 2021, the Company entered into an amendment (the “June Credit Facility Amendment”) to the Credit Agreement.

The June Credit Facility Amendment amended the Credit Agreement to:

(i) allow the Company to incur permitted indebtedness without the prior written consent of the Keybank National Association, as administrative agent, subject to the limitations described in the Credit Agreement;

(ii) increase the accordion amount under the Credit Agreement from a $300 million maximum aggregate commitment amount to a $350 million maximum aggregate commitment amount;

and (iii) amend certain other terms of the Credit Agreement.

The Credit Agreement is secured by a perfected first priority security interest in substantially all of the Company’s assets and portfolio investments.

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maintenance of a minimum liquidity amount as of the last day of each fiscal quarter;

net income not being negative for two consecutive fiscal quarters or any trailing 12-month period;

income not being negative for two consecutive fiscal quarters or any trailing 12-month period;

a limitation on incurring additional indebtedness without the prior written consent of the administrative agent (subject to limited exceptions);

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and certain bankruptcy and liquidation events.

On June 22, 2018, the Company entered into a demand loan agreement (the "Uncommitted Facility") and a revolving loan agreement (the "Committed Facility,"

and together with the Uncommitted Facility, the "Credit Facilities") with CIBC Bank USA ("CIBC").

An amendment to the Credit Facilities was entered into on September 24, 2018 between the Company and CIBC.

On May 31, 2019, in conjunction with securing and entering into the Credit Agreement, the Company terminated the Credit Facilities.

Prior to termination on May 31, 2019, the current maximum principal amount of available borrowings under each of the Uncommitted Facility and the Committed Facility was $30 million (for a combined maximum principal amount under the Credit Facilities of $60 million), subject in each case to availability under the borrowing base, which was based on unused capital commitments.

Borrowings under the Credit Facilities bore interest, at the Company's election at the time of drawdown, at a rate per annum equal to (i) in the case of LIBOR rate loans, the LIBOR rate for the applicable interest period plus 2.50% or (ii) in the case of prime rate loans, CIBC's prime commercial rate at the time of the borrowing minus 0.50%.

For the three months ended March 31, 2021 and 2020, the weighted average outstanding debt balance was $82,688,889 and $7,538,462, respectively, and the weighted average effective interest rate under the Credit Agreement and Credit Facilities was 3.5% and 4.91%, respectively.

As of March 31, 2021, the Company had $117,000,000 outstanding under the Credit Agreement with maturity as follows:

For the three and six months ended June 30, 2021, the weighted average outstanding debt balance was $86,010,989 and $84,359,116, respectively, and the weighted average effective interest rate under the Credit Agreement and Credit Facilities was 3.5% and 3.5%, respectively.

For the three and six months ended June 30, 2020, the weighted average outstanding debt balance was $274,725 and $3,906,593, respectively, and the weighted average effective interest rate under the Credit Agreement and Credit Facilities was 3.98% and 4.88%, respectively.

As of June 30, 2021, the Company had $117,000,000 outstanding under the Credit Agreement with maturity as follows:

Loan Facility

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Three Months Ended

Six Months Ended

Per Share Data (1) :

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The total returns are not annualized.

(3) Return from investment operations was 2.43% and 2.54% for the three months ended March 31, 2021 and 2020, respectively.

(3) Return from investment operations was 2.37% and 2.11% for the three months ended June 30, 2021 and 2020, respectively.

Return from investment operations was 4.78% and 4.60% for the six months ended June 30, 2021 and 2020, respectively.

Return from investment operations represents returns on net investment income (loss) from operations.

(4) Return from accretion was 0.07% and 0.07% for the three months ended March 31, 2021 and 2020, respectively.

(5) The annualized ratio of net investment income to average net assets was 10.46% and 11.94% for the three months ended March 31, 2021 and 2020, respectively.

Incentive fees are not annualized.

(6) The annualized ratio of net operating expenses excluding incentive fees, to average net assets was 3.39% and 3.00% for the three months ended March 31, 2021 and 2020, respectively.

(4) Return from accretion was 0.00% and (0.07)% for the three months ended June 30, 2021 and 2020, respectively.

Return from accretion was 0.00% and (0.06)% for the six months ended June 30, 2021 and 2020, respectively.

(5) The annualized ratio of net investment income to average net assets was 11.22% and 8.97% for the three months ended June 30, 2021 and 2020, respectively.

The annualized ratio of net investment income to average net assets was 10.45% and 10.03% for the six months ended June 30, 2021 and 2020, respectively.

(6) The annualized ratio of net operating expenses excluding incentive fees, to average net assets was 3.81% and 3.17% for the three months ended June 30, 2021 and 2020, respectively.

The annualized ratio of net operating expenses excluding incentive fees, to average net assets was 3.60% and 3.09% for the six months ended June 30, 2021 and 2020, respectively

(7) Incentive fees are not annualized .

Note 12 - Subsequent Events

The Company evaluated events subsequent to March 31, 2021 through May 6, 2021.

On April 5, 2021, TriplePoint Venture Growth BDC Corp.

redeemed its outstanding corporate bonds from the Company for cash proceeds of $334,900.

On April 7, 2021, the Board approved the second amended and restated investment advisory agreement between RGC and the Company (the “Second A&R Advisory Agreement”).

If the Second A&R Advisory Agreement is approved by the Company’s shareholders at the annual meeting to be held on May 27, 2021, it would become effective on that date.

Further, if approved by the Company’s shareholders, the Second A&R Advisory Agreement would make certain changes to the management and incentive fee calculation mechanisms and clarify language relating to liquidity events.

On April 19, 2021, the Company funded an investment of $800,000 to Pivot3 Holdings, Inc.

On April 23, 2021, the Company funded an investment of $1,000,000 to Aria Systems, Inc.

On April 23, 2021, Longtail Ad Solutions, Inc.

(dba JW Player) prepaid its outstanding principal balance of $30,000,000.

In addition, the Company received cash proceeds of $1,862,708 in conjunction with ETP, prepayment fees, and interest for total proceeds of $31,862,708.

On April 26, 2021, Massdrop, Inc.

The Company evaluated events subsequent to June 30, 2021 through August 5, 2021.

Effective July 1, 2021, the Company placed three loans to Pivot3 Holdings, Inc.

on non-accrual status, representing an aggregate principal funded of $26,201,092 at a fair market value of $13,797,915 and comprises 2.89% of the investment portfolio as of June 30, 2021.

On July 20, 2021, the Company also received cash proceeds of $5,000,000 from the sale of a portion of assets held by Pivot3 Holdings, Inc.

On July 1, 2021, Aria Systems, Inc.

prepaid its outstanding principal balance of $28,500,000.

In addition, the Company received cash proceeds of $1,658,136 in conjunction with ETP, prepayment fees, and interest for total proceeds of $30,158,136.

On April 29, 2021, the Company declared a dividend of $0.37 per share payable on May 13, 2021 to shareholders of record as of April 30, 2021.

The Company set March 31, 2021 as the valuation date for shares issued in connection with the dividend pursuant to the Company’s dividend reinvestment plan.

On July 19, 2021, the Company declared a dividend of $0.34 per share payable on August 12, 2021 to shareholders of record as of July 20, 2021.

The Company set June 30, 2021 as the valuation date for shares issued in connection with the dividend pursuant to the Company’s dividend reinvestment plan.

On August 4, 2021, the Company entered into an amendment (the “August Amendment”) to the Credit Agreement to clarify the fee payment schedule and to amend certain other terms of the Credit Agreement.

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

What changed 10-Q

Item 1. Financial Statements