33 unchanged sentences
Interest Income
−Removed: Dividend Income
Operating Expenses:
4 unchanged sentences
Director's Fees
+Added: Interest Expense
Net Investment Gain
−Removed: For the year ended December 31, 2021, we earned $11,480 in interest payments from one eligible portfolio company- DBR Enclave US Investors, LLC - an aggregate of $2,099,684 from twenty-six promissory note investments;
+Added: For the year ended December 31, 2022, we earned $3,397,443 from 31 different short-term loans;
+Added: and an aggregate of $802,010 in related origination fees.
+Added: For the year ended December 31, 2021, we earned $11,480 in interest payments from one equity investment company, an aggregate of $2,099,684 from 26 short-term loans;
an additional $25,037 in bank interest on cash balances and note receivable;
−Removed: an aggregate of $467,500 in origination fees;
+Added: an aggregate of $467,500 in origination fees relating to our short-term loans;
and an additional $52,500 in late fee penalties.
−Removed: For the year ended December 31, 2020, we earned $44,026 in interest payments from one investment- DBR Enclave US Investors, LLC;
−Removed: - an aggregate of $993,795 from six promissory note investments;
−Removed: an aggregate of $26,994 in bank interest on cash balances and note receivable;
−Removed: an aggregate of $217,360 in origination fees;
−Removed: and an aggregate of $15,462 in dividend payments from four investments-Manning & Napier, Inc., Educational Development Corp., Manhattan Bridge Capital, Inc.;
−Removed: and Windstream Holdings, Inc.
As the table above indicates, we incurred operating expenses aggregating $2,758,877 for the year ended December 31, 2022, and $1,354,751 for the year ended December 31, 2021.
−Removed: A discussion of the various components of our operating expenses for these periods is set forth below.
+Added: A summary of the various components of our operating expenses for these periods is set forth below.
General Operating Expenses.
Our general operating expenses were $140,993 for the year ended December 31, 2022 and $107,203 for the year ended December 31, 2021.
−Removed: The increase in the current period is primarily related to an increase in corporate franchise taxes.
+Added: The increase in the current period is primarily related to fees incurred during 2022 in relation to our line of credit (see Liquidity and Capital Resources below for more information on the “Loan Agreement” comprising our line of credit).
Legal and Accounting Expenses.
Our legal and accounting expenses were $1,592,218 for the year ended December 31, 2022 and $453,440 for the year ended December 31, 2021.
−Removed: The increase in the current period is primarily related to increased costs incurred on consulting and underwriting endeavors, as well as an increased cost in our audit and tax services.
−Removed: Executive Management Compensation.
−Removed: Our executive management compensation was $556,432 for the year ended December 31, 2020 and $301,494 for the year ended December 31, 2020.
−Removed: The increase in the current period is primarily related to a one-time bonus payment made during the year 2021.
+Added: The increase in the current period is primarily related to legal, consulting and underwriting fees and costs incurred in connection with our public offering and listing on the Nasdaq Capital Market tier of the Nasdaq exchange.
+Added: Director’s Fees.
+Added: Our director’s fees were $177,073 for the year ended December 31, 2022 and $120,000 for the year ended December 31, 2021.
+Added: The increase is due to a one-time director’s stock bonus in April, 2022.
+Added: Interest Expense.
+Added: Our interest expense was $195,893 for the year ended December 31, 2022 and $9,511 for the year ended December 31, 2021.
+Added: The increase is due to our use of the line of credit arrangement we entered into in 2022 (see Liquidity and Capital Resources below for more information on the “Loan Agreement” comprising our line of credit).
For the year ended December 31, 2022 our net investment gain was $1,440,576.
For the year ended December 31, 2021, our net investment gain was $1,301,450.
−Removed: The increased net investment gain during 2021 was primarily the result of higher interest income earned during 2021 from the short-term specialty finance solutions we provided in the form of short-term promissory notes bearing higher rates of interest and return, including related origination fees, than we were able to obtain when operating as a BDC.
+Added: The increased net investment gain during 2022 was primarily the result of higher interest income earned during 2022 from the short-term specialty finance solutions we provided in the form of short-term promissory notes bearing higher rates of interest and return, including related origination fees.
Financial Condition
For the year ended December 31, 2022, we had an increase in net assets of $4,928,290.
−Removed: This increase in net assets was primarily due to the increase in our interest income earned from short-term specialty financing.
−Removed: Our net assets increased by $1,572,354 for the year ended December 31, 2020, primarily due to the appreciation of our portfolio holdings.
+Added: This increase in net assets was primarily due to the capital we raised during our August 2022 public offering and an increase in our interest income earned from the short-term loans we provided.
+Added: Our net assets increased by $1,773,162 for the year ended December 31, 2021, primarily due to the increase in our interest income earned from the short-term loans we provided.
Liquidity and Capital Resources
Summary cash flow data is as follows:
−Removed: For the Year Ended December 31,
+Added: For the Year Ended
Cash flows used by:
Operating activities
+Added: $ (4,888,302 )
+Added: $ (1,886,094 )
Financing activities
6 unchanged sentences
The Loan Agreement provides us with a $5 million revolving line of credit to use in the ordinary course of our short-term specialty finance business.
−Removed: Amounts drawn under the Loan Agreement will accrue interest at the per annum rate of 8%, and all our obligations under the Loan Agreement are secured by a grant of a collateral security interest in substantially all of our assets.
−Removed: The Loan Agreement, together with our cash and cash equivalents, together comprises our sources of liquidity.
+Added: Amounts drawn under the Loan Agreement accrues interest at the per annum rate of 8%, and all our obligations under the Loan Agreement are secured by a grant of a collateral security interest in substantially all of our assets.
+Added: The Loan Agreement, together with our cash and cash equivalents, together comprise our sources of liquidity.
Management believes that these sources of liquidity, together with cash obtained through maturing investments earlier made, will be sufficient for the Company to fund its operations through the entirety of fiscal 2023.
Accordingly, at present we have no definitive plans to obtain other sources of liquidity through borrowing.
−Removed: On February 11, 2022, we filed a registration statement on Form S-1 seeking to register an offering of five-year common stock warrants we intend to distribute to our shareholders as a dividend, and up to 2,697,603 shares of our common stock purchasable upon the exercise of the warrants.
−Removed: The warrants are contemplated to be exercisable at a price of $4.00 per share of common stock.
−Removed: We intend to apply to have the warrants listed for trading on the OTC Markets.
−Removed: The offering is subject to the effectiveness of the S-1 registration statement.
−Removed: Accordingly, no record date has been established for the associated dividend contemplated as part of the offering.
−Removed: The warrants will not be issued until the registration statement is declared effective, and the warrants will not be exercisable unless such registration statement remains effective.
−Removed: If the offering is consummated, we expect to use net proceeds from the offering for general corporate purposes, including but not limited to extending specialty finance solutions and credit to borrowers and repaying credit facility borrowings.
+Added: On February 11, 2022, we filed a registration statement on Form S-1 seeking to register an offering of five-year common stock warrants that we intended to distribute to our shareholders as a dividend, and up to 2,697,603 shares of our common stock purchasable upon the exercise of those warrants.
+Added: The warrants were contemplated to be exercisable at a price of $9.00 per share of common stock (adjusted to account for the August 2022 reverse stock split we effected on a 1-for-2.25 ratio).
+Added: We recently determined to abandon this contemplated offering, and expect to file a withdrawal of this registration statement with the Commission soon after the filing of this report.
Capital Expenditures
3 unchanged sentences
Critical Accounting Policies
−Removed: Critical accounting policies are policies that are both most important to the portrayal of the Company’s financial condition and results, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about
−Removed: the effect of matters that are inherently uncertain.
+Added: Critical accounting policies are policies that are both most important to the portrayal of the Company’s financial condition and results, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Our critical accounting policies relate to investment valuation and interest and dividend income as an investment company.
5 unchanged sentences
In order to validate market quotations, we look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations.
−Removed: Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by the Valuation Committee of our Board of Directors, based on, among other things, the input of our executive management, Audit Committee and independent third party valuation expert that may be engaged by management to assist in the valuation of our portfolio investments.
+Added: Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued at fair value as determined in good faith by our Board of Directors, based on, among other things, the input of our executive management, the Audit Committee of our Board of Directors and any independent third party valuation expert that may be engaged by management to assist in the valuation of our portfolio investments.
Valuation determinations are in all cases made in conformity with the written valuation policies and procedures respecting the valuation of company investments.
1 unchanged sentence
Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.
−Removed: The application of GAAP requires that we make estimates that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
+Added: The application of GAAP requires that we make estimates that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of investment income and expenses during the reporting period.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
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.