What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2022-03-03 compared with 2021-03-12 · 683 added, 458 removed, 1117 unchanged (51% of the section changed)

9 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Runway Growth Credit Fund Inc.

To the Stockholders and the Board of Directors of Runway Growth Finance Corp.

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Runway Growth Credit Fund Inc.

(the Company) as of December 31, 2020 and 2019, and the related statements of operations, changes in net assets and cash flows for each of the three years in the period ended December 31, 2020, and the related notes to the financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying statements of assets and liabilities of Runway Growth Finance Corp.

(the Company), including the schedules of investments, as of December 31, 2021 and 2020, the related statements of operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes, which include the senior securities table, to the financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations, changes in net assets, and cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

10 unchanged sentences

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our procedures included confirmation of investments owned as of December 31, 2020, by correspondence with the custodians and portfolio companies and other appropriate procedures where replies were not received.

Our procedures included confirmation of investments owned as of December 31, 2021 and 2020, by correspondence with the custodians and portfolio companies and other appropriate procedures where replies were not received.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

4 unchanged sentences

March 3, 2022

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Statements of Assets and Liabilities

December 31, 2021

December 31, 2020

Investments at fair value:

7 unchanged sentences

Other accounts receivable

Prepaid expenses

Prepaid and deferred expenses

Credit facilities

Deferred credit facility fees (net of accumulated amortization of $383,873 and $129,290, respectively)

Total debt, less unamortized deferred financing costs

2026 Senior Notes

Deferred debt costs (net of accumulated amortization of $855,295 and $383,873, respectively)

Total debt, less unamortized deferred debt costs

Reverse repurchase agreement

9 unchanged sentences

Additional paid-in capital

Distributable (losses) earnings

Distributable (losses)

Total net assets

1 unchanged sentence

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Statements of Operations

7 unchanged sentences

Other income from non-investment sources

From control/affiliate:

Interest income

Payment in-kind interest income

Total investment income

6 unchanged sentences

Administration fee

Facility fees

Debt financing fees

Directors’ fees

Consulting fees

Insurance expense

General and administrative expenses

Other expenses

13 unchanged sentences

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Statements of Changes in Net Assets

23 unchanged sentences

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Statements of Cash Flows

22 unchanged sentences

Amortization of fixed income premiums or accretion of discounts

Amortization of deferred credit facility fees

Amortization of deferred debt costs

Changes in operating assets and liabilities:

1 unchanged sentence

Other accounts receivable

Prepaid expenses

Prepaid and deferred expenses

Payable for securities purchased

1 unchanged sentence

Accrued incentive fees

Due to portfolio company

Due to affiliate

4 unchanged sentences

(133,575,637)

(172,930,555)

Cash flows from financing activities

Deferred offering costs

Deferred credit facility fees

Deferred financing costs

Borrowings under credit facilities

2 unchanged sentences

(162,500,000)

(160,750,000)

Proceeds from 2026 Senior Notes

Proceeds from reverse repurchase agreements

2 unchanged sentences

(253,693,279)

(294,351,749)

Dividends paid to stockholders

10 unchanged sentences

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments

12 unchanged sentences

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 1/31/2022 (4)

Pivot3 Holdings, Inc.

Data Processing & Outsourced Services

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

Total Senior Secured Term Loans

2 unchanged sentences

Series A-1 Preferred Stock

Pivot3 Holdings, Inc.

Data Processing & Outsourced Services

Series 1 Preferred Stock

Total Preferred Stocks

Application Software

5 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)

Aria Systems, Inc.

Application Software

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

Brilliant Earth, LLC

Internet Retail

LIBOR+8.25%, 9.25% floor, 4.50% ETP, due 10/15/2023

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

Circadence Corporation

Aginity, Inc.

Application Software

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

LIBOR+9.50% PIK, 10.81% floor, due 12/15/2022 (4)

Fixed 6.50% PIK, due 3/9/2027 (4)

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

5 unchanged sentences

Senior Secured Term Loans (8) (continued)

CloudPassage, Inc.

Data Processing & Outsourced Services

Allurion Technologies, Inc.

Health Care Technology

LIBOR+9.00%, 9.50% floor, 3.00% ETP, due 12/30/2025

Bombora, Inc.

Internet Software and Services

LIBOR+5.00%, 5.50% floor, 3.75% PIK, 2.00% ETP, due 3/31/2025 (4)

Brilliant Earth, LLC

Internet Retail

LIBOR+7.75%, 8.25% floor, 4.50% ETP, due 10/15/2023

LIBOR+7.75%, 8.25% floor, 0.75% ETP, due 10/15/2023

Circadence Corporation

Application Software

LIBOR+9.50% PIK, 12.00% floor, 7.50% ETP, due 12/15/2022 (4)

CloudPay Solutions Ltd.

CloudPay, Inc.

Human Resource & Employment Services

LIBOR+9.50%, 1.25% PIK, 11.25% floor, 3.00% ETP, due 12/15/2023 (3),(4),(12)

Credit Sesame, Inc.

Specialized Consumer Services

LIBOR+8.75%, 9.25% floor, 2.00% ETP, due 8/17/2025 (3)(13)

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.

1 unchanged sentence

LIBOR+9.50%, 10.00% floor, 1.75% ETP, due 6/1/2025

Echo 360 Holdings, Inc.

Education Services

LIBOR+9.25%, 12.05% floor, 4.00% ETP, due 5/3/2023

Fidelis Cybersecurity, Inc.

Internet Software and Services

LIBOR+11.00%, 12.0% floor, 2.39% ETP, due 5/13/2024

2 unchanged sentences

LIBOR+9.25%, 9.75% floor, 5.00% ETP, due 8/21/2023

Gynesonics, Inc.

3 unchanged sentences

LIBOR+9.00%, 9.50% floor, 2.50% ETP, due 11/15/2025

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

Longtail Ad Solutions, Inc.

(dba JW Player)

Internet Software and Services

LIBOR+8.75%, 10.75% floor, 3.00% ETP, due 6/15/2023

Massdrop, Inc.

Computer & Electronics Retail

Intellisite Holdings, Inc.

(dba Epic IO Technologies, Inc.)

Electronic Equipment & Instruments

LIBOR+9.75%, 10.25% floor, 2.00% ETP, due 12/17/2025

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, 10.00% ETP, due 8/15/2022

(dba NationBuilder)

Application Software

LIBOR+9.00%, 11.50% floor, 5.50% ETP, due 4/15/2023

Technology Hardware, Storage & Peripherals

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

Route 92 Medical, Inc.

Health Care Technology

LIBOR+8.48%, 8.98% floor, 3.95% ETP, due 7/1/2026

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)

Porch Group, Inc.

Application Software

LIBOR+8.50%, 2.00% PIK, 9.05% floor, 3.50% ETP, due 7/22/2024 (4)

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

5 unchanged sentences

Senior Secured Term Loans (8) (continued)

SetPoint Medical Corporation

Health Care Technology

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

ShareThis, Inc.

4 unchanged sentences

LIBOR+8.25%, 10.60% floor, 3.00% ETP, due 7/15/2023

The Kairn Corporation

Application Software

LIBOR+9.50% PIK, 10.81% floor, due 12/15/2022 (4)

Fixed 6.50% PIK, due 3/9/2027 (4)

Snagajob.com, Inc.

Human Resource & Employment Services

LIBOR+8.50%, 9.00% floor, 2.75% ETP, due 9/1/2025

Turning Tech Intermediate, Inc.

Education Services

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

VERO Biotech LLC

1 unchanged sentence

LIBOR+9.05%, 9.55% floor, 3.00% ETP, due 12/1/2024

VTX Intermediate Holdings, Inc.

(dba VertexOne)

Application Software

LIBOR+9.00%, 9.50% floor, 4.50% ETP, due 12/28/2026

Total Senior Secured Term Loans

Second Lien Term Loans

Dejero Labs Inc.

System Software

LIBOR+5.00%, 5.50 floor, 5.00% PIK, 3.00% ETP, due 12/22/2025 (3)(4)(11)

Total Second Lien Term Loans

Preferred Stocks

2 unchanged sentences

Series G Preferred Stock (7)

CareCloud, Inc.

Health Care Technology

2 unchanged sentences

Common Stocks (7)

Brilliant Earth, LLC

Internet Retail

Class P Units (18)

Porch Group, Inc.

1 unchanged sentence

Common Stock (16)(19)

Quantum Corporation

Technology Hardware, Storage & Peripherals

Common Stock (3)(16)(19)

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2021

Portfolio Companies

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

Fair Value (2),(6)

Non-control/non-affiliate investments (continued)

Common Stocks (7) (continued)

Technology Hardware, Storage & Peripherals

Total Common Stocks

Aginity, Inc.

Application Software

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

AllClear ID, Inc.

1 unchanged sentence

Warrant for Common Stock, exercise price $0.01/share, expires 9/1/2027

Allurion Technologies, Inc.

Health Care Technology

Warrant for Series C Preferred Stock, exercise price $6.58/share, expires 3/30/2031

Aria Systems, Inc.

4 unchanged sentences

Warrant for Common Stock, exercise price $6.87/share, expires 7/25/2022

Brilliant Earth, LLC

Internet Retail

Warrant for Class P Units, exercise price $5.25/share, expires 9/30/2029

Warrant for Class P Units, exercise price $10.00/share, expires 12/17/2030

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments – (continued)

December 31, 2020

Portfolio Companies

Investment Description (1),(5),(6),(11)

Fair Value (2),(9)

Non-control/non-affiliate investments (continued)

Warrants (8) (continued)

Bombora, Inc.

Internet Software and Services

Warrant for Common Stock, exercise price $3.29/share, expires 3/31/2031

CareCloud, Inc.

Health Care Technology

Warrant for Common Stock, exercise price $7.50/share, expires 1/8/2022

Warrant for Common Stock, exercise price $10.00/share, expires 1/8/2023

Circadence Corporation

2 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.

CloudPay, Inc.

Human Resource & Employment Services

Warrant for Series B Preferred Stock, exercise price $66.53/share, expires 6/30/2030 (3)(13)

Warrant for Series D Preferred Stock, exercise price $171.3182/share, expires 8/17/2031 (3)(13)

Credit Sesame, Inc.

1 unchanged sentence

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)

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2021

Portfolio Companies

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

Fair Value (2),(6)

Non-control/non-affiliate investments (continued)

Warrants (7) (continued)

Dtex Systems, Inc.

2 unchanged sentences

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

Echo 360 Holdings, Inc.

Education Services

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

Fidelis Cybersecurity, Inc.

Internet Software and Services

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

FiscalNote, Inc.

3 unchanged sentences

Health Care Technology

Success fee, expires 12/1/2027 (13)

Warrant for Series G Convertible Preferred Stock, exercise price $0.04021/share, expires 11/19/2031

Internet Software and Services

Warrant for Common Stock, exercise price $9.29/share, expires 7/26/2029

Intellisite Holdings, Inc.

(dba Epic IO Technologies, Inc.)

Electronic Equipment & Instruments

Success fee, expires 12/17/2024 (14)

Longtail Ad Solutions, Inc.

8 unchanged sentences

Warrant for Series AA Preferred Stock, exercise price $0.24/share, expires 8/15/2028

Health Care Technology

Warrant for Common Stock, exercise price $7.50/share, expires 1/8/2022

Warrant for Common Stock, exercise price $10.00/share, expires 1/8/2023

(dba NationBuilder)

1 unchanged sentence

Warrant for Series C-1 Preferred Stock, exercise price $1.46432/share, expires 12/28/2028

Technology Hardware, Storage & Peripherals

Warrant for Series B Preferred Stock, exercise price $0.3323/share, expires 11/27/2028

Data Processing & Outsourced Services

Warrant for Series D Preferred Stock, exercise price $0.59/share, expires 5/13/2029

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments – (continued)

December 31, 2020

Portfolio Companies

Investment Description (1),(5),(6),(11)

Fair Value (2),(9)

Non-control/non-affiliate investments (continued)

Warrants (8) (continued)

Porch Group, Inc.

6 unchanged sentences

Warrant for Series A Preferred Stock, exercise price $6.78/share, expires 6/27/2029

Route 92 Medical, Inc.

Health Care Technology

Success fee, expires 8/17/2031 (14)

Scale Computing, Inc.

1 unchanged sentence

Warrant for Common Stock, exercise price $0.8031/share, expires 3/29/2029

SendtoNews Video, Inc.

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

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2021

Portfolio Companies

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

Fair Value (2),(6)

Non-control/non-affiliate investments (continued)

Warrants (7) (continued)

SetPoint Medical Corporation

Health Care Technology

Warrant for Series B' Preferred Stock, exercise price $1.00/share, expires 6/29/2031

ShareThis, Inc.

1 unchanged sentence

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

Snagajob.com, Inc.

Human Resource & Employment Services

Warrant for Series B-1 Preferred Stock, exercise price $1.30/share, expires 9/29/31

STN Video Inc.

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

VERO Biotech LLC

9 unchanged sentences

Prime Rate was 3.25%.

All investments in portfolio companies, which as of December 31, 2020 represented 118.36% 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.

The Company's investments are generally acquired in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") and, therefore, except as otherwise noted, are subject to limitations on resale, may be deemed to be "restricted securities"

under the Securities Act, and were valued as determined in good faith by the Company's Board of Directors.

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

4 unchanged sentences

PIK interest will be accrued and paid at maturity.

All investments are valued using unobservable inputs, except Corporate Bonds and U.S.

Treasury Bills, which are valued using observable inputs.

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

Investment is domiciled in Canada.

Investments are non-income producing.

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

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

See Note 3 for additional detail.

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

Schedule of Investments – (continued)

December 31, 2020

Treasury bills with $70,000,000 in aggregate of par value were purchased pursuant to a 0.40% reverse repurchase agreement with Goldman Sachs, dated December 30, 2020 and due to the Company on January 12, 2021, with a repurchase price to the Company of $69,650,000, collateralized by a 0.40% U.S.

Treasury Bill due January 12, 2021 with an aggregate par value of $70,000,000 and fair value of $70,002,060

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

Investments are non-income producing.

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 Pivot3, Inc., Marley Spoon AG, Mojix, Inc., and The Kairn Corporation senior secured term loans.

Treasury bill with $45,000,000 par value purchased pursuant to a 0.25% reverse repurchase agreement with Goldman Sachs, dated December 30, 2021, due January 6, 2022, with a repurchase price of $44,774,963 and collateralized by a 0.033% U.S.

Treasury Bill due January 11, 2022 with a par value of $45,000,000 and fair value of $45,001,560.

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

Investment is domiciled in Canada.

Investment is domiciled in Germany.

Investment is domiciled in the United Kingdom.

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

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.

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.

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2021

Investment is publicly traded and listed on NASDAQ.

260,000 shares of MTBC, Inc.

preferred stock with a fair value of $1,429,600 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.

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

As a result of Brilliant Earth Group Inc.'s (the Public Company) IPO though an Up-C structure, the Company received a share of Class B common stock in Brilliant Earth Group, Inc.

for every Class P unit it held in Brilliant Earth, LLC.

On a one-to-one basis, both the Class B common stock and Class P units can be surrendered for Class A common stock in the Public Company.

Investment is not a "restricted security"

under the Securities Act.

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 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 December 31, 2021, along with the transactions during year ended December 31, 2021:

For the year ended December 31, 2021

Net Change in

Portfolio Company (4)

Investment Description

December 31, 2020

Additions (1)

Reductions (2)

(Depreciation)

December 31, 2021 (3)

Senior Secured Term Loans

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 1/15/2022 (4)

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 1/31/2022 (4)

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 4/30/2021

Pivot3 Holdings, Inc.

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

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

Total Senior Secured Term Loans

Preferred Stocks

Series A-1 Preferred Stock

Pivot3 Holdings, Inc.

Series 1 Preferred Stock

Total Preferred Stocks

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 original issue discount (“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 companies, which as of December 31, 2021 represented 4.81% 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) For the year ended December 31, 2021, the Company earned no investment income from control investments, except for $117,340 from Pivot3 Holdings, Inc.

See notes to financial statements

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2021

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

6 unchanged sentences

Northeastern United States

South Central United States

Southeastern United States

Northwestern United States

United Kingdom

Southeastern United States

South Central United States

Midwestern United States

December 31, 2021

5 unchanged sentences

Internet Software & Services

Data Processing & Outsourced Services

Specialized Consumer Services

Human Resource & Employment Services

Data Processing & Outsourced Services

Education Services

Computer & Electronics Retail

Technology Hardware, Storage & Peripherals

Specialty Finance

Electronic Equipment & Instruments

System Software

Technology Hardware, Storage & Peripherals

Specialized Consumer Services

Computer & Electronics Retail

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments

3 unchanged sentences

Fair Value (2),(8)

Non-control/non-affiliate investments

Control/affiliate investments (14)

Senior Secured Term Loans (13)

Aginity, Inc.

Application Software

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 5/15/2021 (4)

LIBOR+10.5% PIK, 11.50% floor, Extension line, due 2/15/2020 (4),(8),(12)

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 5/15/2021 (4)

LIBOR+12.00% PIK, 12.00% floor, 5% ETP, due 4/30/2021 (4)

Total Senior Secured Term Loans

Preferred Stocks

Application Software

Series A-1 Preferred Stock (7)

Application Software

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

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 (13)

Aria Systems, Inc.

1 unchanged sentence

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

See notes to financial statements.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2020

Portfolio Companies

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

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Senior Secured Term Loans (13) (continued)

Brilliant Earth, LLC

1 unchanged sentence

LIBOR+8.25%, 9.25% floor, 4.50% ETP, due 10/15/2023

CareCloud Corporation

Healthcare Technology

Prime+7.0%, 11.75% floor, 3.5% ETP, due 6/15/2022

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

Circadence Corporation

4 unchanged sentences

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

Dejero Labs Inc.

Data Processing & Outsourced Services

CloudPay Solutions Ltd.

Human Resource & Employment Services

LIBOR+9.50%, 1.25% PIK, 11.25% floor, 3.00% ETP, due 12/15/2023 (3),(4),(11)

Credit Sesame, Inc.

Specialized Consumer Services

LIBOR+8.35%, 10.25% floor, 2.50% ETP, due 12/15/2023

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

Dtex Systems, Inc.

Application Software

LIBOR+10.65% PIK, 13% floor, 4.875% ETP, due 11/15/2021

LIBOR+9.15%, 11.50% floor, 5.13% ETP, due 11/15/2021

Echo 360 Holdings, Inc.

2 unchanged sentences

LIBOR+9.25%, 12.05% floor, 4.00% ETP, due 5/3/2023

eSilicon Corporation

Semiconductors

LIBOR+10.50%, 13% floor, 5% ETP, due 7/15/2020

FiscalNote, Inc.

Application Software

LIBOR+9.25%, 9.75% floor, 5.00% ETP, due 8/21/2023

Gynesonics, Inc.

Health Care Technology

LIBOR+8.75%, 9.25% floor, 3.50% ETP, due 12/1/2025

Prime+2.75%, Revolving line, due 6/15/2020

Internet Software and Services

4 unchanged sentences

Internet Software and Services

10.75% Floor, 3% ETP, due 6/15/2023

LIBOR+8.75%, 10.75% floor, 3.00% ETP, due 6/15/2023

Massdrop, Inc.

1 unchanged sentence

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

MingleHealth Care Solutions, Inc.

Healthcare Technology

Mingle Healthcare Solutions, Inc.

Health Care Technology

LIBOR+9.50%, 11.75% floor, 10.00% ETP, due 8/15/2022

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

5 unchanged sentences

Senior Secured Term Loans (13) (continued)

Application Software

LIBOR+12% PIK, 11.00% floor, 5% ETP, due 5/15/2021

LIBOR+12% PIK, 11.00% floor, due 1/31/2020

3DNA Corp.(dba NationBuilder)

(dba NationBuilder)

Application Software

4 unchanged sentences

Data Processing & Outsourced Services

LIBOR+8.50%, 11.00% floor, 4% ETP, due 11/15/2022

RealWear, Inc.

Technology Hardware, Storage & Peripherals

LIBOR+8%, 10.35% floor, 5% ETP, due 6/28/2023

Scale Computing, Inc.

System Software

LIBOR+9.25%, 11.75% floor, 4.5% ETP, due 9/15/2022

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)

Porch Group, Inc.

Application Software

LIBOR+8.50%, 2.00% PIK, 9.05% floor, 3.50% ETP, due 7/22/2024 (4)

ShareThis, Inc.

3 unchanged sentences

LIBOR+9.25%, 11.60% floor, 3.00% ETP, due 12/31/2022

LIBOR+8.25%, 10.60% floor, 3.00% ETP, due 12/31/2022

The Kairn Corporation

Application Software

LIBOR+9.50% PIK, 10.81% floor, due 12/15/2022 (4)

Fixed 6.50% PIK, due 3/9/2027 (4)

VERO Biotech LLC

Health Care Technology

LIBOR+9.05%, 9.55% floor, 3.00% ETP, due 12/1/2024

Total Senior Secured Term Loans

Preferred Stock (8)

Preferred Stocks

Aria Systems, Inc.

1 unchanged sentence

Series G Preferred Stock (7)

Aginity, Inc.

Application Software

Warrant for Series A Preferred Stock, exercise price $1.949/share, expires 5/25/2028 (12)

Warrant for Series A-1 Preferred Stock, exercise price $0.01/share, expires 2/25/2029

Health Care Technology

11% Series A Cumulative Redeemable Perpetual Preferred Stock (15),(16)

Total Preferred Stocks

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

2 unchanged sentences

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

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Warrants (8) (continued)

Common Stocks (7)

Porch Group, Inc.

Application Software

Common Stock (15)

Technology Hardware, Storage & Peripherals

Total Common Stocks

AllClear ID, Inc.

10 unchanged sentences

Warrant for Class P Units, exercise price $5.25/share, expires 9/30/2029

CareCloud Corporation

Healthcare Technology

Warrant for Series A-1 Preferred Stock, exercise price $0.8287/share, expires 6/16/2025

Warrant for Class P Units, exercise price $10.00/share, expires 12/17/2030

Circadence Corporation

5 unchanged sentences

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

CloudPay Solutions Ltd.

Human Resource & Employment Services

Warrant for Series B Preferred Stock, exercise price $66.53/share, expires 6/30/2030 (3),(11)

GROWTH Sesame, Inc.

Specialized Consumer Services

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

Dejero Labs Inc.

Data Processing & Outsourced Services

System Software

Warrant for Common Stock, exercise price $0.01/share, expires 5/31/2029 (3),(6)

6 unchanged sentences

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

eSilicon Corporation

Semiconductors

Warrant for Series H Preferred Stock, exercise price $1.01/share, expires 7/31/2027

Warrant for Series H Preferred Stock, exercise price $1.01/share, expires 6/21/2029

Internet Software and Services

Warrant for Common Stock, exercise price $9.29/share, expires 7/26/2029

Longtail Ad Solutions, Inc.

(dba JW Player)

Internet Software and Services

Warrant for Common Stock, exercise price $1.49/share, expires 12/12/2029

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

2 unchanged sentences

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

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Warrants (7) (continued)

FiscalNote, Inc.

Application Software

Warrant for Common Stock, exercise price $0.01/share, expires 10/19/2030

Gynesonics, Inc.

Health Care Technology

Success fee, expires 12/1/2027 (12)

Internet Software and Services

Warrant for Common Stock, exercise price $9.29/share, expires 7/26/2029

Longtail Ad Solutions, Inc.

(dba JW Player)

Internet Software and Services

Warrant for Common Stock, exercise price $1.49/share, expires 12/12/2029

Massdrop, Inc.

Computer & Electronics Retail

Warrant for B Series Preferred Stock, exercise price $1.1938/share, expires 7/22/2019

MingleHealth Care Solutions, Inc.

Healthcare Technology

Warrant for Series B Preferred Stock, exercise price $1.1938/share, expires 7/22/2029

Mingle Healthcare Solutions, Inc.

Health Care Technology

Warrant for Series AA Preferred Stock, exercise price $0.24/share, expires 8/15/2028

Application Software

Health Care Technology

Warrant for Common Stock, exercise price $7.50/share, expires 1/8/2022

Warrant for Series 1 Preferred Stock, exercise price $0.28/share, expires 12/20/2028

Warrant for Series 1 Preferred Stock exercise price $0.28/share, expires 5/30/2029

Warrant for Series 1 Preferred Stock exercise price $0.28/share, expires 12/17/2029

3DNA Corp.(dba NationBuilder)

Warrant for Common Stock, exercise price $10.00/share, expires 1/8/2023

(dba NationBuilder)

Application Software

1 unchanged sentence

Technology Hardware, Storage & Peripherals

Warrant for Series A Preferred Stock, exercise price $11.3158/share, expires 11/27/2028

Warrant for Series B Preferred Stock, exercise price $0.3323/share, expires 11/27/2028

Data Processing & Outsourced Services

Warrant for Series D Preferred Stock, exercise price $0.59/share, expires 5/13/2029

Porch Group, Inc.

Application Software

Earnout, expires 12/23/2023 (12)

RealWear, Inc.

2 unchanged sentences

Warrant for Series A Preferred Stock, exercise price $4.4464/share, expires 12/28/2028

Warrant Series A Preferred Stock, exercise price $6.78/share, expires 6/27/2029

Warrant for Series A Preferred Stock, exercise price $6.78/share, expires 6/27/2029

Scale Computing, Inc.

System Software

Warrant for Series F-1 Preferred Stock, exercise price $0.8031/share, expires 3/29/2029

Warrant for Common Stock, exercise price $0.8031/share, expires 3/29/2029

SendtoNews Video, Inc.

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

ShareThis Inc.

Data Processing & Outsourced Services

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

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

2 unchanged sentences

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

Fair Value (2),(8)

Non-control/non-affiliate investments (continued)

Warrants (7) (continued)

Technology Hardware, Storage & Peripherals

Warrant for Series E Preferred Stock, exercise price $0.90/share, expires 12/29/2027

Warrant for Series E Preferred Stock, exercise price $0.90/share, expires 2/11/2029

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

Health Care Technology

Success fee, expires 12/29/2025 (12)

Total Warrants

1 unchanged sentence

Treasury Bill, 0.40%, due 01/12/2021 (9)

Treasury Bill, 0.97%, due 1/2/2020

Total Investments

4 unchanged sentences

(2) All investments in portfolio companies, which as of December 31, 2020 represented 118.36% 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.

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

(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 represent 10.68% of total investments at fair value as of December 31, 2020.

2 unchanged sentences

(4) Represents a PIK security.

PIK interest will be accrued and paid at maturity.

All investments are valued using unobservable inputs, except Corporate Bonds and U.S.

Treasury Bills, which are valued using observable inputs.

PIK interest is accrued and will be paid at maturity.

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

6 unchanged sentences

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

In the occurrence of a sale by the borrower, Aginity, Inc.

will satisfy the repayment of the Extension line first from the proceeds available to the Company.

(11) Investment is domiciled in the United Kingdom.

(12) 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.

(14) 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.

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

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

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Schedule of Investments – (continued)

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

(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 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 FINANCE CORP.

Schedule of Investments – (continued)

December 31, 2020

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

5 unchanged sentences

Western United States

Northeastern United States

Northwestern United States

United Kingdom

Southeastern United States

South Central United States

Midwestern United States

Northeastern United States

December 31, 2020

2 unchanged sentences

Application Software

Data Processing & Outsourced Services

Technology Hardware, Storage & Peripherals

Internet Retail

Semiconductors

Healthcare Technology

Internet Retail

Internet Software & Services

Data Processing & Outsourced Services

Specialized Consumer Services

Human Resource & Employment Services

Education Services

Computer & Electronics Retail

Technology Hardware, Storage & Peripherals

Specialty Finance

System Software

Specialized Consumer Services

See notes to financial statements.

RUNWAY GROWTH CREDIT FUND INC.

RUNWAY GROWTH FINANCE CORP.

Notes to Financial Statements as of December 31, 2021

Note 1 — Organization

Runway Growth Credit Fund Inc.

(the “Company”) is a Maryland corporation that was formed on August 31, 2015.

The Company is an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

Runway Growth Finance Corp.

(formerly known as Runway Growth Credit Fund Inc.) (the “Company”), is a Maryland corporation that was formed on August 31, 2015.

On August 18, 2021, the Company changed its name to “Runway Growth Finance Corp.” from “Runway Growth Credit Fund Inc.” The Company is an externally managed, non-diversified, closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”).

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.

The Company’s investment activities are managed by its external investment adviser, Runway Growth Capital LLC (“RGC”).

Runway Administrator Services LLC (the “Administrator”) is a wholly owned subsidiary of RGC and provides administrative services necessary for the Company to operate.

The Company’s administrator, Runway Administrator Services LLC (the “Administrator”) is a wholly owned subsidiary of RGC and provides administrative services necessary for the Company to operate.

In October 2015, in connection with the Company’s formation, the Company issued and sold 1,667 shares of common stock to R.

1 unchanged sentence

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.

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

The Company has issued an additional 4,816,873 shares as part of the dividend reinvestment program.

Refer to Note 6 for further detail.

As of December 31, 2020, the Company had completed multiple closings under its second private offering (the “Second Private Offering”) and had accepted 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.

In March 2020, the Company issued 2,103 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 $31,542.

On December 1, 2017, we completed our Initial Private Offering, in which we issued 18,241,157 shares of our common stock to stockholders for a total purchase price of $275,000,000 in reliance on exemptions from the registration requirements of the Securities Act, and other applicable securities laws.

As of December 31, 2021, the Company had completed multiple closings under its second private offering (the “Second Private Offering”) and had accepted aggregate capital commitments of $181,673,500.

As of December 31, 2021, in connection with the Second Private Offering the Company has issued 9,617,379 shares of its common stock for a total purchase price of $144,260,683.

Concurrent with the IPO, all undrawn commitments under the Second Private Offering were cancelled.

On October 25, 2021, the Company closed its initial public offering ("IPO"), issuing 6,850,000 shares of its common stock at a public offering price of $14.60 per share.

Net of underwriting fees and offering costs, the Company received net cash proceeds of approximately $93 million.

The Company’s common stock began trading on the Nasdaq Global Select Market under the symbol “RWAY” on October 21, 2021.

As of December 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 in a private offering pursuant to an exemption from registration under Regulation D of the Securities Act and purchased an additional 23,346 shares in the public markets for a total purchase price of $315,251.

The Company has issued an additional 6,647,847 shares as part of the dividend reinvestment plan.

For more information, see “Note 6 – Net Assets.”

Note 2 — Summary of Significant Accounting Policies

5 unchanged sentences

Certain items in the December 31, 2020 and December 31, 2019 financial statements have been reclassified to conform to the December 31, 2021 presentation with no effect on net income.

Certain items in the December 31, 2020 and December 31, 2019 financial statements have been reclassified to conform to the December 31, 2021 presentation with no net effect on the net increase in net assets resulting from operations.

Use of Estimates

2 unchanged sentences

Actual results could differ from those estimates.

RUNWAY GROWTH CREDIT FUND INC.

Notes to Financial Statements as of December 31, 2020

Cash and cash equivalents

2 unchanged sentences

Cash and cash equivalents are held at large, established, high credit-quality financial institutions, and management believes that risk of loss associated with any uninsured balance is remote.

Deferred Credit Facility Fees

The fees and expenses associated with opening the KeyBank loan facilities or Credit Agreement (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.

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.

Deferred Debt Costs

The fees and expenses associated with opening the KeyBank credit facilities, including entering into the Credit Agreement (as defined below) (see “Note 10 – Borrowings”), and the issuance of the 2026 Senior Notes (as defined below) pursuant to the Note Purchase Agreement (as defined below) (see “Note 10 – Borrowings”) are being deferred and amortized as part of interest expense using the effective interest method over the term of the Credit Agreement and the Note Purchase Agreement in accordance with ASC 470, Debt.

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

Reverse Repurchase agreement

The Company has, and may in the future, enter into reverse repurchase agreements, under the terms of a Master Repurchase Agreement, with selected commercial banks and broker-dealers, under which the Company acquires securities as collateral (debt obligation) subject to an obligation of the counterparty to repurchase and the Company to resell the securities (obligation) at an agreed upon time and price.

The Company, through the custodian or a sub-custodian, receives delivery of the underlying securities collateralizing repurchase agreements.

The Company requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian’s vault, all securities held as collateral for repurchase agreements.

The Company, through the custodian or a sub-custodian, receives delivery of the underlying securities collateralizing reverse repurchase agreements.

The Company and the counterparties are permitted to sell, re-pledge, or use the collateral associated with the transaction.

It is the Company’s policy that the market value of the collateral be at least equal to 100 percent of the repurchase price in the case of a repurchase agreement of one-day duration and 102 percent of the repurchase price in the case of all other repurchase agreements.

It is the Company’s policy that the market value of the collateral be at least equal to 100 percent of the repurchase price in the case of a reverse repurchase agreement of one-day duration and 102 percent of the repurchase price in the case of all other reverse repurchase agreements.

Upon an event of default under the terms of the Master Repurchase Agreement, both parties have the right to set-off.

10 unchanged sentences

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 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.

1 unchanged sentence

Interest income, if any, adjusted for amortization of market premium and accretion of market discount, is recorded on an accrual basis to the extent that the Company expects to collect such amounts.

capitalized and accreted or amortized into interest income over the life of the respective security using the effective interest method.

Original issue discount, principally representing the estimated fair value of detachable equity, warrants, or contractual success fees obtained in conjunction with the Company’s debt investments, loan origination fees, end of term payments, and market discount or premium are capitalized and accreted or amortized into interest income over the life of the respective security using the effective interest method.

Loan origination fees received in connection with the closing of investments are reported as unearned income, which is included as amortized cost of the investment;

6 unchanged sentences

federal income tax purposes, even though the Company has not yet collected the cash.

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 due to a restructuring such that the interest and dividend income is deemed to be collectible.

As of December 31, 2020, and December 31, 2019, the Company has not written off any accrued and uncollected PIK interest and dividends.

Non-Accrual of Investments

Debt investments are placed on non-accrual status when principal, interest, and other obligations become materially past due or when there is a reasonable doubt that principal, interest or other obligations will be collected in full.

At the point of non-accrual, the Company will cease recognizing interest income on the debt investment until all principal and interest due has been paid or the Company believes the borrower has demonstrated the ability to repay its current and future contractual obligations.

Additionally, any original issue discount associated with the debt investment is no longer accreted to interest income as of the date the loan is placed on non-accrual status.

Any payments received on non-accrual loans are first applied to principal prior to recovery of any foregone interest or end of term payment fees.

Non-accrual loans are restored to accrual status when past due principal or interest are paid, and, in management’s judgment are likely to remain current.

The Company may make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection such that the Company will be made whole on the investment, inclusive of interest and end of term payment fees.

As of December 31, 2021, the Company had six loans to Mojix, Inc.

and one loan to Pivot3 Holdings, Inc., representing an aggregate principal funded of $30,278,707 at a fair market value of $28,259,976, on non-accrual status, which represents 4.66% of the Company’s net assets.

The non-accrual loans as of December 31, 2021 had total interest of $4,760,387 that would have been accrued into income.

Had the loans not been on non-accrual status, $4,064,620 would be payable, and $695,767 would be original issue discount.

For the year ended December 31, 2021, approximately 4.2% of the Company’s total investment income was attributable to non-cash PIK interest.

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 represents 1.92% of the Company’s net assets.

7 unchanged sentences

For the year ended December 31, 2019, approximately 2.4% of the Company’s total investment income was attributable to non-cash PIK interest.

The Company did not have non-cash PIK interest and dividend income for the year ended December 31, 2018.

Valuation of Investments

1 unchanged sentence

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 December 31, 2020 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.

4 unchanged sentences

The Company’s Board of Directors makes this fair value determination on a quarterly basis and any other time when a decision regarding the fair value of the portfolio investments is required.

A determination of fair value involves subjective judgments and

estimates and depends on the facts and circumstances.

A determination of fair value involves subjective judgments and estimates and depends on the facts and circumstances.

Due to the inherent uncertainty of determining the fair value of portfolio investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

18 unchanged sentences

● At least once annually, the valuation for each portfolio investment is reviewed by an independent valuation firm.

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

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

● The Audit Committee then reviews these preliminary valuations from RGC and the independent valuation firm, if any, and makes a recommendation to our Board of Directors regarding such valuations;

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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.

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.

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 and equity 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 adopted by the SEC in December 2020 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

Valuation methodologies involve a significant degree of judgment.

There is no single standard for determining the fair value of investments that do not have an active public market.

Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time.

The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed.

In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a fair value may then be determined.

Debt Investments:

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The fair value may be determined based on the expected proceeds to be received from such settlement or based on the net present value of the expected proceeds from the put option.

These valuation methodologies involve a significant degree of judgment.

There is no single standard for determining the fair value of investments that do not have an active public market.

Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time.

The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed.

In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a fair value may then be determined.

Equity Investments.

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These assets are recorded at fair value on a recurring basis.

These valuation methodologies involve a significant degree of judgment.

There is no single standard for determining the fair value of investments that do not have an active public market.

Valuations of privately held investments are inherently uncertain, as they are based on estimates, and their values may fluctuate over time.

The determination of fair value may differ materially from the values that would have been used if an active market for these investments existed.

In some cases, the fair value of such investments is best expressed as a range of values derived utilizing different methodologies from which a fair value may then be determined.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, including cash and accrued liabilities, approximate fair value due to their short-term nature.

Fair value of the Company’s Credit Agreement is estimated by discounting remaining payments using applicable market rates or market quotes for similar instruments at the measurement date, if applicable.

As of both December 31, 2021 and December 31, 2020, the Company believes that the carrying value of its Credit Agreement approximates fair value.

The 2026 Senior Notes are carried at cost and with their longer maturity dates, fair value is estimated by discounting remaining payments using current market rates for similar instruments and considering such factors as the legal maturity date and the ability of market participants to prepay the notes.

As of December 31, 2021, the Company believes that the carrying value of the 2026 Senior Notes approximates fair value.

Investment Classification

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Generally, a RIC is not subject to federal income taxes on distributed income and gains so long as it meets certain source-of-income and asset diversification requirements and it distributes at least 90% of its net ordinary income and net short-term capital gains in excess of its net long-term capital losses, if any, to its stockholders.

So long as the Company obtains and maintains its status as a RIC, it generally will not pay corporate-level U.S.

federal income taxes on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends.

So long as the Company obtains and maintains its status as a RIC, it generally will not be subject to U.S.

federal income tax on any ordinary income or capital gains that it distributes at least annually to its stockholders as dividends.

Rather, any tax liability related to income earned by the Company represents obligations of the Company’s investors and will not be reflected in the financial statements of the Company.

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In accordance with Section 946-205-45-3 of the ASC, permanent tax differences are reclassified from accumulated undistributed earnings to paid-in-capital at the end of each year and have no impact on total net assets.

For the years ended December 31, 2020, 2019, and 2018, the Company reclassified for book purposes amounts arising from permanent book/tax differences related to non-deductible excise taxes paid as follows:

For the years ended December 31, 2021, 2020, and 2019, the Company

reclassified for book purposes amounts arising from permanent book/tax differences primarily related to non-deductible excise taxes paid as follows:

Additional paid-in capital

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The net unrealized appreciation (depreciation) on investments owned at December 31, 2021, 2020 and 2019 was $2,547,686, $2,330,420, and $(12,136,672), respectively.

For the year ended December 31, 2020, gross

unrealized appreciation and depreciation was $21,395,985 and $(19,065,565), respectively.

For the year ended December 31, 2021, gross unrealized appreciation and depreciation was $23,598,138 and $(21,050,452), respectively.

For the year ended December 31, 2020, gross unrealized appreciation and depreciation was $21,395,985 and $(19,065,565), respectively.

For the year ended December 31, 2019, gross unrealized appreciation and depreciation was $6,121,374 and $(18,258,046), respectively.

At December 31, 2021, 2020 and 2019, the components of distributable earnings on a tax basis detailed below differ from the amounts reflected in the Company’s Statements of Assets and Liabilities by temporary and other book/tax differences, primarily relating to the tax treatment of debt modifications, as follows:

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The Company had no long-term capital loss carryforward for the year ended December 31, 2019.

For the years ended December 31, 2021, 2020 and 2019, the Company utilized capital loss carryforward in the amount of $1,427,932, $0, and $0, respectively, to offset realized capital gains.

The Company accounts for income taxes in conformity with ASC Topic 740 — Income Taxes (“ASC 740”).

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ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority.

Tax positions deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current period.

positions deemed to meet a “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current period.

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

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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 RIC.

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.

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

federal income tax at corporate rates 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

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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 year ended December 31, 2020, the Company declared and paid dividends in the amount of $39,709,233 of which $7,265,785 was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment program.

For the year ended December 31, 2019, the Company declared and paid dividends in the amount of $40,651,334 of which $8,192,547 was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment program.

For the year ended December 31, 2018, the Company declared and paid dividends in the amount of $7,283,810 of which $1,428,498 was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment program.

For the year ended December 31, 2021, the Company declared and paid dividends in the amount of $44,942,937 of which $17,948,131 was distributed in cash and the remainder distributed in shares to stockholders pursuant to the Company’s dividend reinvestment plan.

Organization and Offering Costs

Organization costs include, among other things, the cost of organizing as a Maryland corporation, including the cost of legal services and other fees pertaining to our organization, all of which are expensed as incurred.

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.

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.

Offering costs include, among other things, legal fees and other costs pertaining to the preparation of the Company’s public and private offering materials as well as travel-related expenses related to the Company’s public and private offerings.

Pursuant to the Advisory Agreement (as defined below), 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 years ended December 31, 2021, December 31, 2020 and December 31, 2019, 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 will be accumulated and charged to additional paid in capital at the time of closing beginning in 2019.

These offering costs 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 December 31, 2020, the Company had accumulated and recorded $608,989 of deferred offering costs.

As of December 31, 2020, $154,738 in placement agent fees had been incurred.

As of December 31, 2019, the Company had accumulated and recorded $510,027 of deferred offering costs.

As of December 31, 2019, $123,009 in placement agent fees had been incurred.

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 December 31, 2021 and December 31, 2020, the Company had accumulated and recorded $651,991 and $608,989, respectively, of offering costs related to the Second Private Offering.

As of December 31, 2021 and December 31, 2020, $186,198 and $154,738, respectively, 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.

Offering costs related to the IPO were accumulated and charged to additional paid in capital at the time of closing in 2021.

As of December 31, 2021 and December 31, 2020, respectively, we had accumulated and recorded $6,970,599 and $0 of offering costs related to the Company’s IPO.

The offering costs are fully born by the Company and include underwriting fees, legal fees, and other costs pertaining to the preparation of the Company’s offering materials as well as travel-related expenses.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13 Financial Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments to replace the incurred loss model for loans and other financial assets with an expected loss model, which is referred to as the current expected credit loss (CECL) model.

The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to maturity debt securities.

It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, stand-by letters of credit, financial guarantees, and other similar instruments) and net investments in certain leases recognized by a lessor.

Effective January 1, 2020, the Company adopted ASU 2016-13 under a modified retrospective approach for all financial assets measured at amortized cost.

There was no adjustment recorded to distributable losses for the cumulative effect of adopting ASU 2016-13 as amortized cost has approximated fair value.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement , which changes the fair value measurement disclosure requirements of ASC 820.

The key provisions include new, eliminated and modified disclosure requirements.

The new guidance is effective for fiscal years

beginning after December 15, 2019, including interim periods therein.

Early application is permitted.

The Company adopted ASU 2018-13 effective January 1, 2020.

The adoption of this accounting standard had no material effect on the Company’s financial statements.

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848) - Facilitation of the effects of reference rate reform on financial reporting.

The amendments in this update provide optional expedients and exceptions for applying U.S.

GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities.

The Company has agreements that have LIBOR as a reference rate with certain portfolio companies and also with certain lenders.

These agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate.

Such contract modifications are required to be evaluated in determining whether the modifications result in the establishment of new contracts or the continuation of existing contracts.

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.

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848),” which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

In January 2021, the FASB issued ASU No.

2021-01, “Reference Rate Reform (Topic 848),” which expanded the scope of Topic 848 to include derivative instruments impacted by the discounting transition.

ASU 2020-04 and ASU 2021-01 are effective for all entities through December 31, 2022.

2021-01 provides increased clarity as the Company continues to evaluate the transition of reference rates and is currently evaluating the impact of adopting ASU No.

2020-04 and 2021-01 on the consolidated financial statements.

The Company did not utilize the optional expedients and exceptions provided in this guidance during the year ended December 31, 2021.

Note 3 — Commitments and Contingencies

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December 31, 2021

CloudPassage, Inc.

Allurion Technologies, Inc.

Senior Secured Term Loan

Credit Sesame, Inc.

Revolving Line

CloudPay, Inc.

Senior Secured Term Loan

CrossRoads Extremity Systems, LLC

Senior Secured Term Loan

Dtex Systems, Inc.

Senior Secured Term Loan

Gynesonics, Inc.

Senior Secured Term Loan

Intellisite Holdings, Inc.

(dba Epic IO Technologies, Inc.)

Senior Secured Term Loan

Marley Spoon AG

Senior Secured Term Loan

Route 92 Medical, Inc.

Senior Secured Term Loan

SetPoint Medical Corporation

Senior Secured Term Loan

ShareThis, Inc.

Senior Secured Term Loan

Snagajob.com, Inc.

Senior Secured Term Loan

VERO Biotech LLC

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December 31, 2020

Aria Systems, Inc.

Senior Secured Term Loan

Brilliant Earth, LLC

Senior Secured Term Loan

CloudPassage, Inc.

Senior Secured Term Loan

Dejero Labs Inc.

Senior Secured Term Loan

Dtex Systems, Inc.

Senior Secured Term Loan

eSilicon Corporation

Credit Sesame, Inc.

Revolving Line

Gynesonics, Inc.

Senior Secured Term Loan

Longtail Ad Solutions, Inc.

(dba JW Player)

ShareThis, Inc.

Senior Secured Term Loan

Massdrop Inc.

VERO Biotech LLC

Senior Secured Term Loan

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 December 31, 2020.

The Company’s management believes that its available cash balances and/or availability under the Credit Agreement provides sufficient funds to cover its unfunded commitments as of December 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 December 31, 2021 and December 31, 2020.

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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 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.

Note 4 — Concentration of Credit Risk

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

On October 25, 2021, the Company closed its IPO, issuing 6,850,000 shares of its common stock at a public offering price of $14.60 per share.

Net of underwriting fees and offering costs, the Company received net cash proceeds of approximately $93 million.

The Company’s common stock began trading on the Nasdaq Global Select Market under the symbol “RWAY” on October 21, 2021.

Prior to October 25, 2021, the Company entered into subscription agreements (the “Subscription Agreements”) with investors providing for the private placement of the Company’s common shares.

Under the terms of the Subscription Agreements, investors were required to fund drawdowns to purchase the Company’s common shares up to the amount of their respective capital commitment on an as-needed basis each time the Company delivered a drawdown notice to its investors.

Concurrent with the IPO, all undrawn commitments under the Second Private Offering were cancelled.

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

Between June 14, 2019 and December 31, 2021, the Company accepted $181,673,500 in capital commitments under its Second Private Offering.

As of December 31, 2021 and December 31, 2020, respectively, the Company issued 9,617,379 and 8,352,251 shares of common stock for aggregate proceeds of $144,260,683 and $125,283,766 under the Second Private Offering.

As of December 31, 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 in a private offering pursuant to an exemption from registration under Regulation D of the Securities Act.

During the year ended December 31, 2021, the Company issued 1,830,974 shares for $26,994,806 in connection with the reinvestment of dividends.

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Distributable

Balance, beginning of year

Balance, beginning of period

Issuance of common stock

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Dividends declared

Repurchase of common stock

Tax reconciliation of stockholders'

equity in accordance with U.S.

Balance, end of year

Balance, end of period

During the year ended December 31, 2020, the Company issued 2,248,483 shares for $32,443,448 in connection with the reinvestment of dividends.

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Distributable

Balance, beginning of year

Balance, beginning of period

Issuance of common stock

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equity in accordance with U.S.

Balance, end of year

Balance, end of period

During the year ended December 31, 2019, the Company issued 2,177,466 shares for $32,458,787 in connection with the reinvestment of dividends.

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November 12, 2020 (1)

Shares were issued as part of the dividend reinvestment program.

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

Between June 14, 2019 and December 31, 2020, the Company accepted $174,673,500 in capital commitments under its Second Private Offering.

As of December 31, 2020 and December 31, 2019, respectively, the Company issued 8,352,251 and 5,000,000 shares of common stock for aggregate proceeds of $125,283,766 and $75,000,000 under the Second Private Offering, respectively.

In March 2020, the Company issued 2,103 shares as an additional direct investment at $15.00 per share for total proceeds of $31,542 by Runway Growth Holdings LLC, an affiliate of RGC.

Capital commitments may be drawn down 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, and/or maintaining a reserve account for the payment of future expenses or liabilities.

March 19, 2021 (1)

March 24, 2021

May 13, 2021 (1)

August 12, 2021 (1)

September 29, 2021

October 25, 2021

Shares were issued as part of the dividend reinvestment plan .

Note 7 — Related Party Agreements and Transactions

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.

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.

Second Amended and Restated Advisory Agreement

On August 3, 2017, the Board of Directors approved certain amendments to the Prior Agreement (the “First Amended and Restated Advisory Agreement”) and recommended that the Company’s stockholders approve the First Amended and Restated Advisory Agreement.

The First Amended and Restated Advisory Agreement became effective on September 12, 2017 upon approval by the stockholders at a special meeting of stockholders of the Company.

On April 7, 2021, the Board of Directors approved certain additional amendments to the advisory agreement (the “Advisory Agreement”) at a virtual meeting and recommended that the Company’s stockholders approve the Advisory Agreement.

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 which was held in July 2021.

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

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.

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 $1,000,000,000.

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 $500,000,000 the 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 $8,988,920, $6,831,566 and $5,105,009 for the years ended December 31, 2021, 2020 and 2019, respectively.

There were no excess fees paid during any of these years.

Incentive Fee

The incentive fee, which provides RGC with a share of the income that RGC generates for the Company, consists of an investment-income component and a capital-gains component, which are largely independent of each other, with the result that one component may be payable even if the other is not.

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

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.

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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Pre-Incentive Fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation.

Pre-Incentive Fee net investment income, 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 the immediately preceding fiscal quarter, will be compared to a “hurdle rate” of 2.0% per quarter

(8.0% annualized).

The Company will pay RGC an Income Incentive Fee with respect to the Company’s Pre-Incentive Fee net investment income in each calendar quarter as follows:

The Company pays RGC an Income Incentive Fee with respect to the Company’s Pre-Incentive Fee net investment income in each calendar quarter as follows:

(1) no Income Incentive Fee in any calendar quarter in which the Company’s Pre-Incentive Fee net investment income does not exceed the hurdle rate of 2.0%;

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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%;

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.

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 exceeded 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 was less than 10.0%, no Income Incentive Fee would 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 was 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 would any Income Incentive Fee be payable 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.

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RGC earned incentive fees for the year ended December 31, 2021 of $9,231,830.

$5,407,305 of the incentive fees for the year ended December 31, 2020 were earned, payable in cash, and $1,853,351 of the incentive fees for the year ended December 31, 2020 were accrued and generated from deferred interest (i.e., PIK and certain discount accretion) and are not payable pending receipt of cash by the Company.

$7,384,498 of the incentive fees for the year ended December 31, 2021 were earned, payable in cash, and $1,847,332 of the incentive fees for the year ended December 31, 2021 were

accrued and generated from deferred interest (i.e., PIK and certain discount accretion) and are not payable pending receipt of cash by the Company.

RGC earned incentive fees for the year ended December 31, 2020 of $7,260,656.

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RGC earned incentive fees for the year ended December 31, 2019 of $8,349,449.

$711,868 of the incentive fees for the year ended December 31, 2018 were earned, payable in cash, and $359,698 of the incentive fees for the year ended December 31, 2018 were accrued and deferred (i.e., PIK and certain discount accretion) and are not payable pending receipt of cash by the Company.

$6,500,502 of the incentive fees for the year ended December 31, 2019 were earned, payable in cash, and $1,848,947 of the incentive fees for the year ended December 31, 2019 were accrued and generated from deferred interest (i.e., PIK and certain discount accretion) and are not payable pending receipt of cash by the Company.

Both currently payable in cash, $2,493,508 and $1,892,430, and deferred incentive fees, $3,516,742 and $3,114,635, are included in accrued incentive fees on the Statements of Assets and Liabilities as of December 31, 2021 and December 31, 2020, respectively.

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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

The Company reimburses the Administrator for the allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including furnishing the Company with office facilities, equipment and clerical, bookkeeping and recordkeeping services at such facilities, as well as providing other administrative services.

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 $942,320 during the year ended December 31, 2021.

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License Agreement

The Company has entered into a license agreement with RGC (the “License Agreement”) pursuant to which RGC has granted the Company a personal, non-exclusive, royalty-free right and license to use the name “Runway Growth Credit Fund”.

Under the License Agreement, the Company has the right to use the “Runway Growth Credit Fund” name for so long as RGC or one of its affiliates remains the Company’s investment adviser.

Other than with respect to this limited license, the Company has no legal right to the “Runway Growth Credit Fund” name.

Under the License Agreement, the Company has the right to use the “Runway Growth Finance” name for so long as RGC or one of its affiliates remains the Company’s investment adviser.

Other than with respect to this limited license, the Company has no legal right to the “Runway Growth Finance” name.

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”).

On June 14, 2019, 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”).

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.

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

In connection with the strategic relationship, OCM purchased an aggregate of 14,571,334 shares of our common stock for an aggregate purchase price of $219.3 million in our Initial Private Offering and our Second Private Offering.

As of December 31, 2021, OCM owns 19,979,688 shares of our common stock or 48% of our total issued and outstanding shares.

OCM has granted a proxy to us pursuant to which the shares held by OCM will be voted in the same proportion as 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.

In connection with the Subsequent OCM Commitment, OCM also purchased additional equity in RGC.

Note 8 — Fair Value Measurements

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As of December 31, 2021

As of December 31, 2021 (Unaudited)

Portfolio Investments

Corporate Bonds

Senior Secured Term Loans

Second Lien Term Loans

Preferred Stock

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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 the reporting period.

There were no transfers into or out of the levels during the years ended December 31, 2020 and 2019.

During the period ended December 31, 2021, the Company had warrant investments converted to common stock investments, resulting in an asset transfer out of Level 3 and into Level 2 at the fair value of $15,305,039.

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 December 31, 2021:

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(293,747,564)

Realized gain (loss)

Transfers out of Level 3

Realized (loss)

Change in unrealized appreciation (depreciation)

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

Includes PIK interest, and is net of reorganization and restructuring of investments.

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 December 31, 2020:

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(106,590,124)

Realized gain

Realized gain (loss)

Change in unrealized appreciation (depreciation)

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

Includes PIK interest, and is net of reorganization and restructuring of investments.

Includes PIK interest, net of reorganization and restructuring of investments .

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

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16.3% - 25.0% (20.8%)

Second Lien Term Loans (1)

Discounted Cash Flow analysis

Discount rate

12.2% - 12.2% (12.2%)

Option pricing model

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Estimated time to exit

0.3-9.2 (1.5)

0.5 - 5.7 (2.0 yrs)

Revenue multiples

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Preferred Stock

Recent private market

and merger and acquisition transaction prices

Recent private market and merger and acquisition transaction prices

Senior Secured Term Loans (1)

Discounted Cash Flow

Discounted Cash Flow analysis

Discount Rate

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Estimated time to exit

0.5 years–5.9 years (3.1 years)

0.3-9.2 (1.5) years

Revenue Multiples

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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 significant increase or decrease in the unobservable inputs.

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 OPM’s used.

The significant unobservable inputs used in the fair value measurement of the Company’s warrant and equity-related securities are inputs used in the 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 years ended December 31, 2021 and December 31, 2020.

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

Significant increases (decreases) in the inputs in isolation would result in a significantly higher (lower) fair value measurement, depending on the materiality of the investment.

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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 year ended

December 31, 2020, the Company had realized gains of $1,175,229 and a net change in unrealized appreciation of $14,161,969 from its investments in warrants.

For the year ended December 31, 2019, the Company had realized gains of $228,171 and a net change in unrealized (depreciation) of $(609,169) from its investments in warrants.

For the year ended December 31, 2021, the Company had realized losses of $824,936 and a net change in unrealized appreciation of $2,795,307 from its investments in warrants.

For the year ended December 31, 2020, the Company had realized gains of $1,175,229 and a net change in unrealized appreciation of $14,161,969 from its investments in warrants.

For the year ended December 31, 2019, the Company had realized gains of $228,171 and a net change in unrealized (depreciation) of $(609,169) from its investments in warrants.

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

Treasury Bills, except for $358,682, $0 and $0, respectively for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, included in Net change in unrealized appreciation on control/affiliate investments.

Treasury Bills, except for $216,610, $358,682, and

$0, respectively for the years ended December 31, 2021, December 31, 2020 and December 31, 2019, included in Net change in unrealized appreciation on control/affiliate investments.

Counterparty risk exists from the potential failure of an issuer of warrants to settle its exercised warrants.

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The Company’s Board of Directors considers the effects of counterparty risk when determining the fair value of its investments in warrants.

Note 10 — Credit Facilities

Note 10 — Borrowings

On December 10, 2021, the Company entered into a Master Note Purchase Agreement (the “Note Purchase Agreement”) governing the issuance of $70,000,000 in aggregate principal amount of 4.25% Series 2021A Senior Notes due 2026 (the “2026 Senior Notes”) to institutional accredited investors (as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)) in a private placement.

The 2026 Senior Notes were issued in two closings.

The initial issuance of $20 million 2026 Senior Notes closed on December 10, 2021 and the second and final issuance of $50 million closed on February 10, 2022.

See “—Subsequent Events.”

The 2026 Senior Notes bear an interest rate of 4.25% per year and are due on December 10, 2026, unless redeemed, purchased or prepaid prior to such date by the Company or its affiliates in accordance with their terms.

Interest on the 2026 Senior Notes will be due semiannually.

The interest rate is subject to a 1.00% increase in the event that, subject to certain exceptions, the 2026 Senior Notes cease to have an investment grade rating or receive an investment grade rating below the Investment Grade (as defined in the Note Purchase Agreement).

The 2026 Senior Notes are general unsecured obligations of the Company that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.

Aggregate offering costs in connection with the 2026 Senior Notes issuance, including the underwriter’s discount and commissions, were $380,606 which were capitalized and deferred.

As of December 31, 2021, unamortized deferred debt costs related to the 2026 Senior Notes were $376,029 and were included in the Total debt, less unamortized deferred debt costs on the Consolidated Statements of Assets and Liabilities.

For the year ended December 31, 2021, the components of interest expense and related fees for the 2026 Senior Notes are as follows:

Stated interest expense

Amortization of deferred debt costs

Total interest and amortization of deferred debt costs

Weighted average cost of debt

On May 31, 2019, the Company entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, as borrower, KeyBank National Association, as administrative agent, syndication agent, and a lender, CIBC Bank USA, as documentation agent and a lender, U.S.

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Borrowings under the Credit Agreement bear interest on a per annum basis equal to a three-month adjusted LIBOR rate (with a LIBOR floor of zero), plus an applicable margin rate that varies from 3.00% to 2.50% per annum depending on utilization and other factors.

During the availability period, the applicable margin rate (i) is 3.00% per annum for interest periods during which the average utilization is less than 60% and (ii) varies from 3.00% to 2.50% per annum when the average utilization equals or exceeds 60% (with 3.00% applying when the eligible loans in the collateral consist of 9 or fewer unaffiliated obligors, 2.75% applying when the eligible loans consist of between 10 and 29 unaffiliated obligors, and 2.50% applying when the eligible loans consist of 30 or more unaffiliated obligors).

During the availability period, the applicable margin rate (i) is 3.00% per annum for interest periods during which the average

utilization is less than 60% and (ii) varies from 3.00% to 2.50% per annum when the average utilization equals or exceeds 60% (with 3.00% applying when the eligible loans in the collateral consist of 9 or fewer unaffiliated obligors, 2.75% applying when the eligible loans consist of between 10 and 29 unaffiliated obligors, and 2.50% applying when the eligible loans consist of 30 or more unaffiliated obligors).

During the amortization period, the applicable margin rate will be 3.00%.

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and (vii) revise certain of the borrowing base concentration limits.

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

On December 2, 2020, the Company entered into an amendment (the “Credit Facility Amendment”) to the Credit Agreement.

The Credit Facility Amendment is effective as of December 2, 2020.

The Credit Facility Amendment amended the Credit Agreement to:

On December 2, 2020, the Company entered into an amendment (the “December Credit Facility Amendment”) to the Credit Agreement.

The December Credit Facility Amendment amended the Credit Agreement to:

(i) increase the size of the aggregate commitments under the Credit Facility to $215 million from $175 million;

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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 Investment Company Act of 1940, as amended.

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.

On August 3, 2021, the Company further amended the fee letter (the “Second Amended and Restated Fee Letter”) to amend the first payment date of the minimum earnings fee, which will be payable annually starting on May 31, 2022.

Under the Second Amended and Restated Fee Letter, the Company will also pay a supplemental fee on the 15th calendar day of each month beginning August 16, 2021 and ending July 15, 2022 in an aggregate amount equal to $66,367, which is paid pro rata to the lenders listed in Schedule A of the Second Amended and Restated Fee Letter.

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

8 unchanged sentences

RGC ceases to be the Company’s investment adviser;

maintenance of business-development-company status and regulated-investment-company status;

maintenance of business-development-company

status and regulated-investment-company status;

misrepresentation of representations and warranties;

6 unchanged sentences

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 years ended December 31, 2020 and December 31, 2019, the weighted average outstanding debt balance was $27,449,454 and $12,355,311, respectively, and the weighted average effective interest rate under the Credit Agreement and Credit Facilities was 3.43% and 4.66%, respectively.

As of December 31, 2020, the Company had $99,000,000 outstanding under the Credit Agreement and the Credit Facilities with maturities as follows:

Loan Facility

For the years ended December 31, 2021 and December 31, 2020, the weighted average outstanding debt balance was $71,435,616 and $27,900,273, respectively, and the weighted average effective interest rate was 3.54% and 3.54%, respectively.

For the years ended December 31, 2021, December 31, 2020, and December 31, 2019 the components of interest expense and related fees for the KeyBank Credit Agreement are as follows:

Stated interest expense

Amortization of deferred debt costs

Total interest and amortization of deferred debt costs

Weighted average cost of debt

As of December 31, 2021, the Company had $61,000,000 outstanding under the Credit Agreement and $20,000,000 of 2026 Senior Notes outstanding under the Note Purchase Agreement, each with maturities as follows:

KeyBank National Association Loan Facility

As of December 31, 2019, the Company had $61,000,000 outstanding under the Credit Facilities with maturities as follows:

Series 2021A Senior Notes due 2026

As of December 31, 2020, the Company had $99,000,000 outstanding under the Credit Agreement with a maturity as follows:

Loan Facility

1 unchanged sentence

Senior Securities

Information about the Company’s senior securities is shown in the following table for the fiscal years ended December 31, 2018 through 2020.

No senior securities were outstanding for the fiscal years ended December 31, 2016 and 2017.

Class and Year

Information about the Company’s senior securities is shown in the following table for the fiscal years ended December 31, 2021, 2020, 2019 and 2018.

No senior securities were outstanding for the fiscal years ended December 31, 2017 and prior.

Class and Period

Treasury Securities (1)

2026 Senior Notes

December 31, 2021

December 31, 2020

December 31, 2019

December 31, 2018

Credit Agreement

Year Ended 12/31/2020

Year Ended 12/31/2019

Year Ended 12/31/2018

December 31, 2021

December 31, 2020

December 31, 2019

December 31, 2018

Credit Facilities (5)

Year Ended 12/31/2020

Year Ended 12/31/2019

Year Ended 12/31/2018

Year Ended 12/31/2020

Year Ended 12/31/2019

Year Ended 12/31/2018

December 31, 2021

December 31, 2020

December 31, 2019

December 31, 2018

December 31, 2021

December 31, 2020

December 31, 2019

December 31, 2018

(1) Total amount of each class of senior securities outstanding at the end of the period presented .

(2) Asset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table to the aggregate amount of senior securities representing indebtedness.

(2) A sset coverage per unit is the ratio of the carrying value of total assets, less all liabilities excluding indebtedness represented by senior securities in this table to the aggregate amount of senior securities representing indebtedness.

Asset coverage per unit is express in terms of dollar amounts per $1,000 of indebtedness and is calculated on a consolidated basis.

21 unchanged sentences

Ratio of net increase (decrease) in net assets resulting from operations to average net assets

Portfolio turnover rate (7)

Financial highlights are based on weighted-average shares outstanding.

5 unchanged sentences

Ratio of net operating expenses excluding incentive fees, to average net assets was 3.47%, 3.04%, 3.64%, 5.42%, 12.46%, and 595.95% for the years ended December 31, 2021, 2020, 2019, 2018,2017, and 2016, respectively.

The portfolio turnover rate for the years ended December 31, 2021, 2020, 2019, 2018 and 2017 equals the lesser of investment portfolio purchases or sales during the period, divided by the average investment portfolio value during the period.

As such, portfolio turnover rate is not annualized.

Note 12 — Selected Quarterly Financial Data (Unaudited)

11 unchanged sentences

Total operating expenses

Net investment income (loss)

Net realized gain on investments

Net investment income

Net realized gain (loss) on investments

Net change in unrealized appreciation (depreciation) on investments

Increase (decrease) in net assets resulting from operations

Increase (decrease) in net assets resulting from operations per share

Increase in net assets resulting from operations

Increase in net assets resulting from operations per share

Net asset value per share as of the end of the period

1 unchanged sentence

The Company evaluated events subsequent to December 31, 2021 through March 3, 2022, the date the financial statements were issued.

On January 26, 2021, the Company funded an investment of $250,000 to The Kairn Corporation.

On January 27, 2021, as part of an overall reorganization of Pivot3, Inc., Pivot3, Inc.

changed its name to Pivot3 Holdings, Inc.

and the Company:

(i) funded a $1,000,000 investment of Series 1 Preferred Stock, and (ii) converted the $1,000,000 Convertible Bridge Loan into Series 1 Preferred Stock.

Further, in conjunction with the reorganization, our Series D warrants were effectively canceled and as such we recorded a $216,610 realized loss.

On February 11, 2021, the Company funded an investment of $500,000 to Mojix, Inc.

On February 23, 2021, the Company funded an investment of $2,000,000 to Massdrop, Inc.

On March 2, 2021, 3DNA Corp.

prepaid its outstanding principal balance of $7,500,000.

In addition, the Company received cash proceeds of $598,438 in conjunction with ETP, prepayment fees, and interest for total proceeds of $8,098,438.

On March 4, 2021, the Company declared a dividend of $0.37 per share payable on March 19, 2021 to shareholders of record as of March 5, 2021.

The Company set December 31, 2020 as the valuation date for shares issued in connection with the dividend pursuant to the Company’s dividend reinvestment plan.

On February 9, 2022, in conjunction with its sale to Johnson & Johnson, CrossRoads Extremity Systems, LLC prepaid its outstanding principal balance of $7,562,722 on the senior secured loan.

In addition, the Company received cash proceeds of $805,188 in consideration of its warrants, interest, and fees for total proceeds $8,367,910

On February 10, 2022, the Company issued the remaining $50 million 2026 Senior Notes pursuant to the Note Purchase Agreement.

The initial issuance of $20 million 2026 Senior Notes closed on December 10, 2021.

The 2026 Senior Notes bear an interest rate of 4.25% per year and are due on December 10, 2026, unless redeemed, purchased, or prepaid prior to such date by the Company or its affiliates in accordance with their terms.

Interest on the 2026 Senior Notes will be due semiannually.

For more information, see “Note 10 — Borrowings.”

On February 24, 2022, the Board of Directors declared a distribution of $0.27 per share for stockholders of record on March 8, 2022 payable on or before March 22, 2022.

On February 24, 2022, the Board of Directors approved a repurchase program (the “Repurchase Program”) under which the Company may repurchase up to $25 million of our outstanding common stock .

Under the Repurchase Program, purchases may be made at management’s discretion from time to time in open-market transactions, in accordance with all applicable securities laws and regulations.

Unless extended by the Board of Directors, the repurchase program will terminate 12-months from the date it was approved.

On February 28, 2022, the Company funded an investment of $3,000,000 to Intellisite Holdings, Inc.

(dba Epic IO Technologies, Inc.).

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 8. Financial Statements and Supplementary Data