What changed in this filing

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Item 1A. Risk Factors

2020-08-04 compared with 2020-05-07 · 220 added, 114 removed, 20 unchanged (94% of the section changed)

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors

in the February 20, 2020 filing of our Annual Report on Form 10-K, which could materially affect our business, financial condition and/or operating results.

The risks described in our Annual

Report are not the only risks facing our Company.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating

Other than the risk factors set forth below, there have been no material changes during the period ended March 31, 2020 to the risk factors discussed in Risk Factors in the February 20, 2020 filing of our Annual Report

on Form 10-K.

Events outside of our control, including public health crises, could negatively affect our

portfolio companies and our results of our operations.

Periods of market volatility have occurred and could continue to occur in

response to pandemics or other events outside of our control.

in the February 20, 2020 filing of our Annual Report on Form 10-K, which could

materially affect our business, financial condition and/or operating results.

The risks described in our Annual Report are not the only risks facing our Company.

Additional risks and

uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

Aside from the below updated risk factors, there have been no

material changes during the period ended June 30, 2020 to the risk factors discussed in Risk Factors in the February 20, 2020 filing of our Annual Report on Form 10-K.

Events outside of our control, including public health crises, could negatively affect our portfolio companies and our results of our operations.

Periods of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our

These types of events have adversely affected and could continue to adversely affect operating results for us and for our portfolio companies.

For example, in December 2019, a novel

strain of coronavirus (also known as COVID-19) surfaced in China and has since spread to other countries, including the United States, which has resulted in restrictions on travel and the temporary

closure of many corporate offices, retail stores, and manufacturing facilities and factories in the affected jurisdictions.

In addition to these developments having adverse consequences for us and our portfolio companies have been, and could

continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel or

service providers.

As the potential impact of COVID-19 is difficult to predict, the extent to which COVID-19 could negatively affect our and our portfolio

companies operating results or the duration of any potential business or supply-chain disruption, is uncertain.

Any potential impact to our results of operations will depend to a large extent on future developments and new information that

could emerge regarding the duration and severity of COVID-19 and the actions taken by authorities and other entities to contain COVID-19 or treat its impact, all of

which are beyond our control.

For example, in December 2019, a novel strain of coronavirus (also known as COVID-19) surfaced in China and has since spread and continues to spread to other countries, including the United States This outbreak has led and for an unknown period of time will continue

to lead to disruptions in local, regional, national and global markets and economies affected thereby.

With respect to the U.S.

credit markets (in particular for middle market loans), this outbreak has resulted in, and until fully resolved is likely

to continue to result in, the following among other things:

(i) government imposition of various forms of shelter-in-place orders and the closing of non-essential businesses, resulting in significant disruption to the businesses of many middle-market loan borrowers including supply chains, demand and practical aspects of their operations, as well as

in lay-offs of employees, and, while these effects are hoped to be temporary, some effects could be persistent or even permanent;

(ii) increased draws by borrowers on revolving lines of credit;

(iii) increased requests by borrowers for amendments and waivers of their credit agreements to avoid default, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans;

(iv) volatility and disruption of these markets including greater volatility in pricing and spreads and difficulty in valuing loans during periods of increased volatility, and liquidity issues;

and (v) rapidly evolving proposals and/or

actions by state and federal governments to address problems being experienced by the markets and by businesses and the economy in general which will not necessarily adequately address the problems facing the loan market and middle market

This outbreak is having, and any future outbreaks could have, an adverse impact on the markets and the economy in general, which could have a material adverse impact on, among other things, the ability of lenders to originate loans, the

volume and type of loans originated, and the volume and type of amendments and waivers granted to borrowers and remedial actions taken in the event of a borrower default, each of which could negatively impact the amount and quality of loans

available for investment by us and returns to us, among other things.

As of the date of this 10-Q, it is impossible to determine the scope of this outbreak, or any future outbreaks, how long any such outbreak,

market disruption or uncertainties may last, the effect any governmental actions will have or the full potential impact on us and our portfolio companies.

Any potential impact to our results of operations will depend to a large extent on future

developments and new information that could emerge regarding the duration and severity of COVID-19 and the actions taken by authorities and other entities to

contain COVID-19 or treat its impact, all of which are beyond our control.

These potential impacts, while uncertain, could adversely affect our and our portfolio companies operating results.

We are currently operating in a period of capital markets disruption and economic uncertainty.

capital markets have experienced extreme volatility and disruption following the global outbreak of

COVID-19 that began in December 2019.

If the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan

delinquencies, loan non-accruals, problem assets, and bankruptcies may increase.

In addition, collateral for our loans may decline in value, which could cause loan losses to increase and the net worth and

liquidity of loan guarantors could decline, impairing their ability to honor commitments to us.

An increase in loan delinquencies and non-accruals or a decrease in loan collateral and guarantor net worth could

result in increased costs and reduced income which would have a material adverse effect on our business, financial condition or results of operations.

We will also be negatively affected if our operations and effectiveness or the operations and effectiveness of a portfolio company (or any of

the key personnel or service providers of the foregoing) is compromised or if necessary or beneficial systems and processes are disrupted.

Any public health emergency, including the COVID-19

pandemic or any outbreak of other existing or new epidemic diseases, or the threat thereof, and the resulting financial and economic market uncertainty could have a significant adverse impact on us and the fair value of our investments.

potential impacts, while uncertain, could adversely affect our and our portfolio companies operating results.

We are currently operating in a

period of capital markets disruption and economic uncertainty.

capital markets have experienced extreme volatility and

disruption following the global outbreak of COVID-19 that began in December 2019.

The global impact of the outbreak is rapidly evolving, and many countries have reacted by instituting quarantines,

prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues.

Businesses are also implementing similar precautionary measures.

Such measures, as well as the general uncertainty surrounding the dangers

and impact of COVID-19, have created significant disruption in supply chains and economic activity.

The impact of COVID- 19 has led to significant volatility and declines in the global public equity markets

and it is uncertain how long this volatility will continue.

As COVID-19 continues to spread, the potential impacts, including a global, regional or other economic recession, are increasingly uncertain and

difficult to assess.

Some economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a world-wide economic downturn.

in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets.

These and future market disruptions and/or illiquidity would be expected

to have an adverse effect on our business, financial condition, results of operations and cash flows.

Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a

decision by lenders not to extend credit to us.

These events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt

and equity investments.

If the current period of capital market disruption and instability continues for an extended period of time, there is a

risk that investors in our equity securities may not receive distributions consistent with historical levels or at all or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

Disruptions in the capital markets caused by the COVID-19 pandemic have increased the spread between

the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets.

These and future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial

condition, results of operations and cash flows.

Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.

events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the fair values of our debt and equity investments.

Additionally, the recent disruption in economic activity caused by the COVID-19 pandemic has had, and

may continue to have, a negative effect on the potential for liquidity events involving our investments.

The illiquidity of our investments may make it difficult for us to sell such investments to access capital if required, and as a result, we

could realize significantly less than the value at which we have recorded our investments if we were required to sell them for liquidity purposes.

An inability to raise or access capital, and any required sale of all or a portion of our investments

as a result, could have a material adverse effect on our business, financial condition or results of operations.

Adverse developments in the credit

markets may impair our ability to secure debt financing.

In past economic downturns, such as the financial crisis in the United

States that began in mid-2007 and during other times of extreme market volatility, many commercial banks and other financial institutions stopped lending or significantly curtailed their lending activity.

addition, in an effort to stem losses and reduce their exposure to segments of the economy deemed to be high risk, some financial institutions limited routine refinancing and loan modification transactions and even reviewed the terms of existing

facilities to identify bases for accelerating the maturity of existing lending facilities.

If these conditions recur, for example as a result of the COVID-19 pandemic, it may be difficult for us to obtain

desired financing to finance the growth of our investments on acceptable economic terms, or at all.

So far, the COVID-19 pandemic has resulted in, and until fully resolved is likely to continue to result in, among other things, increased draws by borrowers on revolving lines of credit and increased requests by borrowers for

amendments, modifications and waivers of their credit agreements to avoid default or change payment terms, increased defaults by such borrowers and/or increased difficulty in obtaining refinancing at the maturity dates of their loans.

the duration and effectiveness of responsive measures implemented by

governments and central banks cannot be predicted.

The commencement, continuation, or cessation of government and central bank policies and economic stimulus programs, including changes in

monetary policy involving interest rate adjustments or governmental policies, may contribute to the development of or result in an increase in market volatility, illiquidity and other adverse effects that could negatively impact the credit markets

and the Company.

If we are unable to consummate credit facilities on commercially reasonable terms, our liquidity may be reduced

significantly.

If we are unable to repay amounts outstanding under any facility we may enter into and are declared in default or are unable to renew or refinance any such facility, it would limit our ability to initiate significant originations or

to operate our business in the normal course.

These situations may arise due to circumstances that we may be unable to control, such as inaccessibility of the credit markets, a severe decline in the value of the U.S.

dollar, a further economic

downturn or an operational problem that affects third parties or us, and could materially damage our business.

Moreover, we are unable to predict when economic and market conditions may become more favorable.

Even if such conditions improve broadly

and significantly over the long term, adverse conditions in particular sectors of the financial markets could adversely impact our business.

Changes relating to the LIBOR calculation process may adversely affect the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

LIBOR, the London Interbank Offered Rate, is the basic rate of interest used in lending transactions between banks on the London

interbank market and is widely used as a reference for setting the interest rate on loans globally.

We typically use LIBOR as a reference rate in floating-rate loans we extend to portfolio companies such that the interest due to us pursuant to a

term loan extended to a portfolio company is calculated using LIBOR.

The terms of our debt investments generally include minimum interest rate floors which are calculated based on LIBOR.

In the recent past, concerns have been publicized that some of

the member banks surveyed by the British Bankers Association (BBA) in connection with the calculation of LIBOR across a range of maturities and currencies may have been under-reporting or otherwise manipulating the inter-bank

lending rate applicable to them in order to profit on their derivative positions or to avoid an appearance of capital insufficiency or adverse reputational or other consequences that may have resulted from reporting inter-bank lending rates higher

than those they actually submitted.

A number of BBA member banks entered into settlements with their regulators and law enforcement agencies with respect to alleged manipulation of LIBOR, and investigations by regulators and governmental authorities

in various jurisdictions are ongoing.

Actions by the ICE Benchmark Administration, regulators or law enforcement agencies as a result of

these or future events, may result in changes to the manner in which LIBOR is determined.

Potential changes, or uncertainty related to such potential changes may adversely affect the market for LIBOR-based securities, including our portfolio of

LIBOR-indexed, floating-rate debt securities.

In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on

the market for LIBOR-based securities or the value of our portfolio of LIBOR-indexed, floating-rate debt securities, loans, and other financial obligations or extensions of credit held by or due to us.

On July 27, 2017, the U.K.

Financial Conduct Authority (the FCA), which regulates LIBOR, announced that it intends to stop

persuading or compelling banks to submit LIBOR rates after 2021.

In addition, on March 25, 2020, the FCA stated that although the central assumption that firms cannot rely on LIBOR being published after the end of 2021 has not changed, the

outbreak of COVID-19 has impacted the timing of many firms transition planning, and the FCA will continue to assess the impact of the COVID-19 pandemic on

transition timelines and update the marketplace as soon as possible.

It is unclear if after 2021 LIBOR will cease to exist or if new methods of calculating LIBOR will be established such that it continues to exist after 2021.

We have exposure to

LIBOR, including in financial instruments that mature after 2021.

Our exposure arises from the value of our portfolio of LIBOR-indexed, floating-rate debt securities.

In the United States, the Federal Reserve Board and the Federal Reserve Bank of New York, in

conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.

dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by

Treasury securities called the Secured Overnight Financing Rate (SOFR).

The Federal Reserve Bank of New York began publishing SOFR in April 2018.

Whether or not SOFR attains market traction as a LIBOR replacement remains a question and

the future of LIBOR at this time is uncertain, including whether the COVID-19 pandemic will have further effect on LIBOR transition plans.

The elimination of LIBOR or any other changes or reforms to the determination or supervision of LIBOR could have an adverse impact on the

market for or value of any LIBOR-indexed, floating-rate debt securities, loans, and other financial obligations or extensions of credit held by or due to us or on our overall financial condition or results of operations.

If LIBOR ceases to exist, we

may need to renegotiate the credit agreements extending beyond 2021 with our portfolio companies that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established.

In the event that the LIBOR

Rate is no longer available or published on a current basis or no longer made available or used for determining the interest rate of loans, our administrative agent that manages our loans will generally select a comparable successor rate;

that (i) to the extent a comparable or successor rate is approved by the administrative agent, the approved rate shall be applied in a manner consistent with market practice;

and (ii) to the extent such market practice is not

administratively feasible for the administrative agent, such approved rate shall be applied as otherwise reasonably determined by the administrative agent.

If the current period of capital market disruption and instability continues for an extended period of time, there is a risk that investors in our

equity securities may not receive distributions consistent with historical levels or at all or that our distributions may not grow over time and a portion of our distributions may be a return of capital.

We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution.

We cannot assure you

that we will achieve investment results that will allow us to make a specified level of cash distributions.

Our ability to pay distributions might be adversely affected by the impact of one or

more of the risk factors described in this quarterly report or incorporated herein by reference, including the COVID-19 pandemic described above.

example, if the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories in the jurisdictions, including the United States, affected by the COVID-19 pandemic were

to continue for an extended period of time it could result in reduced cash flows to us from our existing portfolio companies, which could reduce cash available for distribution to our stockholders.

If we violate certain covenants under our existing

or future credit facilities or other leverage, we may be limited in our ability to make distributions.

If we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan,

we may be forced to sell some of our investments in order to make cash distribution payments.

To the extent we make distributions to stockholders that include a return of capital, such portion of the distribution essentially constitutes a return of

the stockholders investment.

Although such return of capital may not be taxable, such distributions would generally decrease a stockholders basis in our common stock and may therefore increase such stockholders tax liability for

capital gains upon the future sale of such stock.

A return of capital distribution may cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase

We cannot assure

you that we will achieve investment results that will allow us to make a specified level of cash distributions.

Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this quarterly

report or incorporated herein by reference, including the COVID-19 pandemic described above.

For example, if the temporary closure of many corporate offices, retail stores, and manufacturing

facilities and factories in the jurisdictions, including the United States, affected by the COVID-19 pandemic were to continue for an extended period of time, it could result in reduced cash flows to

us from our existing portfolio companies, which could reduce cash available for distribution to our stockholders.

If we violate certain covenants under our existing or future credit facilities or other leverage, we may be limited in our ability to

make distributions.

If we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash

distribution payments.

To the extent we make distributions to stockholders that include a return of capital, such portion of the distribution essentially constitutes a return of the stockholders investment.

Although such return of capital may

not be taxable, such distributions would generally decrease a stockholders basis in our common stock and may therefore increase such stockholders tax liability for capital gains upon the future sale of such stock.

A return of capital

distribution may cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares for less than the original purchase price.

Due to the recent COVID-19 pandemic, shares of BDCs have traded below their respective NAVs.

shares of common stock trade at a discount from NAV, it could limit our ability to raise equity capital.

As a result of the COVID-19 pandemic, the stocks of BDCs as an industry, including shares of our common stock, have traded below NAV, at or near historic lows as a result of concerns over liquidity, leverage restrictions and

distribution requirements.

If our common stock trades below its NAV, we will generally not be able to issue additional shares of our common stock at its market price without first obtaining the approval for such issuance from our stockholders and

our independent directors.

At our 2019 Annual Stockholders Meeting, our stockholders approved our ability to sell or otherwise issue shares of our common stock, not exceeding 25% of our then outstanding common stock immediately prior to each such

offering, at a price or prices below the then current net asset value per share, in each case subject to the approval of our board of directors and compliance with the conditions set forth in the proxy statement pertaining thereto, during a period

beginning on October 8, 2019 and expiring on the earlier of the one-year anniversary of the date of the 2019 Annual Stockholders Meeting and the date of our 2020 Annual Stockholders Meeting.

However, notwithstanding such stockholder approval, since our initial public offering on February 9, 2010, we have not sold any shares of our common stock in an offering that resulted in proceeds to us of less than our then current net asset

value per share.

Any offering of our common stock that requires stockholder approval must occur, if at all, within one year after receiving such stockholder approval.

If additional funds are not available to us, we could be forced to curtail or

cease our new lending and investment activities, and our net asset value could decrease and our level of distributions could be impacted.

and distribution requirements.

If our common stock trades below its NAV, we will generally not be able to issue

additional shares of our common stock at its market price without first obtaining the approval for such issuance from our stockholders and our independent directors.

At our 2019 Annual

Stockholders Meeting, our stockholders approved our ability to sell or otherwise issue shares of our common stock, not exceeding 25% of our then outstanding common stock immediately prior to each such offering, at a price or prices below the then

current net asset value per share, in each case subject to the approval of our board of directors and compliance with the conditions set forth in the proxy statement pertaining thereto, during a period beginning on October 8, 2019 and expiring

on the earlier of the one-year anniversary of the date of the 2019 Annual Stockholders Meeting and the date of our 2020 Annual Stockholders Meeting.

However, notwithstanding such

stockholder approval, since our initial public offering on February 9, 2010, we have not sold any shares of our common stock in an offering that resulted in proceeds to us of less than our then current net asset value per share.

Any offering of

our common stock that requires stockholder approval must occur, if at all, within one year after receiving such stockholder approval.

If additional funds are not available to us, we could be forced to curtail or cease our new lending and investment

activities, and our net asset value could decrease and our level of distributions could be impacted.

the COVID-19 pandemic or other disruptions in the economy, we may not be able to increase our dividends and may reduce or defer our dividends and choose to incur U.S.

federal excise tax in order preserve cash

and maintain flexibility.

As a BDC, we are not required to make any distributions to shareholders other than in connection with our

election to be taxed as a RIC under subchapter M of the Code.

In order to maintain our tax treatment as a RIC, we must distribute to shareholders for each taxable year at least 90% of our investment company taxable income (i.e., net ordinary

income plus realized net short-term capital gains in excess of realized net long-term capital losses).

If we qualify for taxation as a RIC, we generally will not be subject to corporate-level US federal income tax on our investment company

taxable income and net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) that we timely distribute to shareholders.

federal excise tax in order

preserve cash and maintain flexibility.

As a BDC, we are not required to make any distributions to shareholders other than in

connection with our election to be taxed as a RIC under subchapter M of the Code.

In order to maintain our tax treatment as a RIC, we must distribute to shareholders for each taxable year at least 90% of our investment company taxable income

(i.e., net ordinary income plus realized net short-term capital gains in excess of realized net long-term capital losses).

If we qualify for taxation as a RIC, we generally will not be subject to corporate-level US federal income tax on our

investment company taxable income and net capital gains (i.e., realized net long-term capital gains in excess of realized net short-term capital losses) that we timely distribute to shareholders.

We will be subject to a 4% U.S.

federal excise tax on undistributed

earnings of a RIC unless we distribute each calendar year at least the sum of (i) 98.0% of our ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for the

one-year period ending on October 31 of the calendar year, and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years and on which we paid no

federal income tax.

Under the Code, we may satisfy certain of our RIC distributions with dividends paid after

the end of the current year.

In particular, if we pay a distribution in January of the following year that was declared in October, November, or December of the current year and is payable to shareholders of record in the current year, the

dividend will be treated for all US federal income tax purposes as if it were paid on December 31 of the current year.

In addition, under the Code, we may pay dividends, referred to as spillover dividends, that are paid during

the following taxable year that will allow us to maintain our qualification for taxation as a RIC and eliminate our liability for corporate-level U.S.

federal excise

tax on undistributed earnings of a RIC unless we distribute each calendar year at least the sum of (i) 98.0% of our ordinary income for the calendar year, (ii) 98.2% of our capital gains in excess of capital losses for

the one-year period ending on October 31 of the calendar year, and (iii) any ordinary income and net capital gains for preceding years that were not distributed during such years and on

which we paid no federal income tax.

Under the Code, we may satisfy certain of our RIC distributions with dividends paid after the end of

the current year.

be treated for all US federal income tax purposes as if it were paid on December 31 of the current year.

In addition, under the Code, we may pay dividends, referred to as spillover dividends, that are paid during the following

taxable year that will allow us to maintain our qualification for taxation as a RIC and eliminate our liability for corporate-level U.S.

federal income tax.

Under these spillover dividend procedures, we may defer distribution of

income earned during the current year until December of the following year.

Under these spillover dividend procedures, we may defer distribution of income earned

during the current year until December of the following year.

For example, we may defer distributions of income earned during 2020 until as late as December 31, 2021.

If we choose to pay a spillover dividend, we will

incur the 4% U.S.

If we choose to pay a spillover dividend, we will incur the 4% U.S.

federal excise tax on some or all of the distribution.

Due to the COVID-19

pandemic or other disruptions in the economy, we may take certain actions with respect to the timing and amounts of our distributions in order to preserve cash and maintain flexibility.

For example, we may not be able to increase our

In addition, we may reduce our dividends and/or defer our dividends to the following taxable year.

Due to the COVID-19 pandemic or

other disruptions in the economy, we may take certain actions with respect to the timing and amounts of our distributions in order to preserve cash and maintain flexibility.

For example, we may not be able to increase our dividends.

addition, we may reduce our dividends and/or defer our dividends to the following taxable year.

If we defer our dividends, we may choose to utilize the spillover dividend rules discussed above and incur the 4% U.S.

excise tax on such amounts.

To further preserve cash, we may combine these reductions or deferrals of dividends with one or more distributions that are payable partially in our stock as discussed below under We may choose to pay

distributions in our own stock, in which case our stockholders may be required to pay U.S.

federal excise tax on such

own stock, in which case our stockholders may be required to pay U.S.

federal income taxes in excess of the cash distributions they receive.

We may choose to pay distributions in our own common stock, in which case our stockholders may be required to pay U.S.

federal income taxes in excess of

the cash distributions they receive.

We may distribute taxable distributions that are payable in cash or shares of our common

stock at the election of each stockholder.

Under certain applicable provisions of the Code and the published guidance, distributions payable of a publicly offered RIC that are in cash or in shares of stock at the election of stockholders may be

treated as taxable distributions.

The Internal Revenue Service has issued a revenue procedure indicating that this rule will apply if the total amount of cash to be distributed is not less than 20% (which has been temporarily reduced to 10% for

distributions declared on or after April 1, 2020, and on or before December 31, 2020) of the total distribution.

Under this revenue procedure, if too many stockholders elect to receive their distributions in cash, the cash available for

distribution must be allocated among the stockholders electing to receive cash (with the balance of distributions paid in stock).

If we decide to make any distributions consistent with this revenue procedure that are payable in part in our stock,

taxable stockholders receiving such distributions will be required to include the full amount of the distribution (whether received in cash, our stock, or a combination thereof) as ordinary income (or as long-term capital gain to the extent such

distribution is properly reported as a capital gain distribution) to the extent of our current and accumulated earnings and profits for U.S.

We may choose to pay distributions in our own common stock, in which case our stockholders may be

required to pay U.S.

federal income taxes in excess of the cash distributions they receive.

We may distribute taxable

distributions that are payable in cash or shares of our common stock at the election of each stockholder.

Under certain applicable provisions of the Code and the published guidance, distributions payable of a publicly offered RIC that are in cash or

in shares of stock at the election of stockholders may be treated as taxable distributions.

The Internal Revenue Service has issued a revenue procedure indicating that this rule will apply if the total amount of cash to be distributed is not less

than 20% (which has been temporarily reduced to 10% for distributions declared on or after April 1, 2020, and on or before December 31, 2020) of the total distribution.

Under this revenue procedure, if too many stockholders elect to

receive their distributions in cash, the cash available for distribution must be allocated among the stockholders electing to receive cash (with the balance of distributions paid in stock).

If we decide to make any distributions consistent with this

revenue procedure that are payable in part in our stock, taxable stockholders receiving such distributions will be required to include the full amount of the distribution (whether received in cash, our stock, or a combination thereof) as ordinary

income (or as long-term capital gain to the extent such distribution is properly reported as a capital gain distribution) to the extent of our current and accumulated earnings and profits for U.S.

federal income tax purposes.

As a result, a U.S.

stockholder may be required to pay tax with respect to such

distributions in excess of any cash received.

stockholder sells the stock it receives as a distribution in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the distribution, depending

on the market price of our stock at the time of the sale.

stockholder may be required to pay tax with respect to such distributions in excess of any cash received.

stockholder sells the stock it receives as a distribution in order to pay this tax, the sales proceeds may be less than the amount

included in income with respect to the distribution, depending on the market price of our stock at the time of the sale.

Furthermore, with respect to non-U.S.

stockholders, we may be required to withhold U.S.

tax with respect to such distributions, including in

respect of all or a portion of such distribution that is payable in stock.

If a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on distributions, it may put downward pressure on the trading

price of our stock.

Unregistered Sales of Equity Securities and Use of Proceeds

We did not engage in unregistered sales of securities during the quarter ended March 31, 2020.

stockholders, we may be

required to withhold U.S.

tax with respect to such distributions, including in respect of all or a portion of such distribution that is payable in stock.

If a significant number of our stockholders determine to sell shares of our stock in order to

pay taxes owed on distributions, it may put downward pressure on the trading price of our stock.

Sales of Equity Securities and Use of Proceeds

We did not engage in unregistered sales of securities during the quarter ended

June 30, 2020.

Defaults Upon Senior Securities

2 unchanged sentences

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

What changed 10-Q

Item 1A. Risk Factors