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As filed with the Securities and Exchange Commission on April 17, 2020
Securities Act File No. 333-      
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.

Post-Effective Amendment No.
MONROE CAPITAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
311 South Wacker Drive, Suite 6400
Chicago, Illinois 60606
(Address of Principal Executive Offices)
(312) 258-8300
(Registrant’s Telephone Number, including Area Code)
Theodore L. Koenig
Chief Executive Officer
311 South Wacker Drive, Suite 6400
Chicago, Illinois 60606
(Name and Address of Agent for Service)
WITH COPIES TO:
Jonathan H. Talcott
E. Peter Strand
Nelson Mullins Riley & Scarborough LLP
101 Constitution Avenue, NW, Suite 900
Washington, D.C. 20001
Telephone: (202) 689-2806
Facsimile: (202) 689-2862
Approximate date of proposed public offering: As soon as practicable after the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box. ☑
It is proposed that this filing will become effective (check appropriate box):
☐ when declared effective pursuant to section 8(c).
Title of Securities Being Registered
Amount
Being Registered
Proposed Maximum
Offering Price
Per Unit
Proposed Maximum
Aggregate
Offering Price(1)
Amount of
Registration Fee
Common Stock, $0.001 par value(2)
Preferred Stock, $0.001 par value(2)
Warrants(2)
Subscription Rights(3)
Debt Securities(4)
Total
$ 300,000,000(5) $ 38,940(6)
(1)
Estimated pursuant to Rule 457(o) solely for the purposes of determining the registration fee. The proposed maximum offering price per security will be determined, from time to time, by the Registrant in connection with the sale by the Registrant of the securities registered under this registration statement.
(2)
Subject to Note 5 below, there is being registered hereunder an indeterminate number of shares of common stock, preferred stock, or warrants as may be sold, from time to time. Warrants represent rights to purchase common stock, preferred stock or debt securities.
(3)
Subject to Note 5 below, there is being registered hereunder an indeterminate number of subscription rights as may be sold, from time to time, representing rights to purchase common stock.
(4)
Subject to Note 5 below, there is being registered hereunder an indeterminate principal amount of debt securities as may be sold, from time to time. If any debt securities are issued at an original issue discount, then the offering price shall be in such greater principal amount as shall result in an aggregate price to investors not to exceed $300,000,000.
(5)
In no event will the aggregate offering price of all securities issued from time to time pursuant to this registration statement exceed $300,000,000.
(6)
In accordance with Rule 415(a)(6) under the Securities Act of 1933, as amended (the “Securities Act”), the securities registered pursuant to this registration statement include unsold securities in the amount of $136,730,954.72 that had previously been registered for primary offerings under the Registrant’s registration statement on Form N-2 (File No. 333-216665), initially effective on April 28, 2017 (the “Prior Registration Statement”), and that are being carried forward to this registration statement. Pursuant to Rule 415(a)(6) under the Securities Act, the registration fees with respect to such unsold securities will continue to be applied to such unsold securities. The registrant has paid an additional $21,192.32 to register an additional $163,269,045.28 in securities. Pursuant to Rule 415(a)(6) under the Securities Act, the offering of unsold securities under the Prior Registration Statement will be deemed terminated as of the date of effectiveness of this registration statement.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS APRIL 17, 2020
$300,000,000
Monroe Capital Corporation
Common Stock
Preferred Stock
Warrants
Subscription Rights
Debt Securities
We are a specialty finance company focused on providing financing solutions primarily to lower middle-market companies in the United States and Canada. We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. Our investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through investment in senior secured, unitranche secured and junior secured debt and, to a lesser extent, unsecured subordinated debt and equity investments. We use our extensive leveraged finance origination infrastructure and broad expertise in sourcing loans to invest in primarily senior secured, unitranche secured and junior secured debt of middle-market companies.
We invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities are often referred to as “high yield” or “junk.” In addition, many of the debt securities we hold do not fully amortize prior to maturity, which heightens the risk that we may lose all or a part of our investment.
We may offer, from time to time, in one or more offerings or series, together or separately, up to $300,000,000 of our common stock, preferred stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities (consisting of debentures, notes or other evidence of indebtedness), subscription rights or debt securities, which we refer to, collectively, as the “securities.” We may sell our common stock through underwriters or dealers, “at-the-market” to or through a market maker into an existing trading market or otherwise directly to one or more purchasers or through agents or through a combination of methods of sale. The identities of such underwriters, dealers, market makers or agents, as the case may be, will be described in one or more supplements to this prospectus.
Monroe Capital BDC Advisors, LLC serves as our investment advisor. Monroe Capital Management Advisors, LLC serves as our administrator. Each of Monroe Capital BDC Advisors, LLC and Monroe Capital Management Advisors, LLC is affiliated with Monroe Capital, LLC, a leading lender to middle-market companies.
Our common stock is listed on The Nasdaq Global Select Market under the symbol “MRCC.” If our shares trade at a discount to our net asset value, it may increase the risk of loss for purchasers in this offering. On April 16, 2020, the last reported sale price of our stock on The Nasdaq Global Select Market was $7.11 per share. Our net asset value as of December 31, 2019 was $12.20 per share.
Shares of closed-end investment companies, including business development companies, frequently trade at a discount to their net asset value. If our shares trade at a discount to our net asset value, it will likely increase the risk of loss for purchasers in this offering. On June 19, 2019, our stockholders voted to allow us to issue common stock at a price below net asset value per share for a period of twelve months subject to certain conditions. Sales of common stock at prices below net asset value per share dilute the interests of existing stockholders, have the effect of reducing our net asset value per share and may reduce our market price per share. In addition, continuous sales of common stock below net asset value may have a negative impact on total returns and could have a negative impact on the market price of our shares of common stock. See “Risk Factors” and “Sales of Common Stock Below Net Asset Value” incorporated by reference herein.
An investment in our securities is subject to risks, including a risk of total loss of investment. In addition, the companies in which we invest are subject to special risks. Substantially all of the debt instruments in which we invest (i) have and will have variable interest rate provisions that may make it more difficult for borrowers to make debt repayments to us in a rising interest rate environment and (ii) will likely have a principal amount outstanding at maturity, that may lead to a substantial loss to us if the borrower is unable to refinance or repay. See “Risk Factors” included in, or incorporated by reference into, the applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the other documents that are incorporated by reference into this prospectus to read about factors you should consider, including the risk of leverage, before investing in our securities.
This prospectus describes some of the general terms that may apply to an offering of our securities. We will provide the specific terms of these offerings and securities in one or more supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus supplement and any related free writing prospectus may also add, update, or change information contained in this prospectus. You should carefully read this prospectus, the applicable prospectus supplement, and any related free writing prospectus, and the documents incorporated by reference, before buying any of the securities being offered and keep them for future reference. We file annual, quarterly and current reports, proxy statements and other information about us with the Securities and Exchange Commission, or the SEC. This information is available free of charge by contacting us at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Investor Relations, by calling us collect at (312) 258-8300, or on our website at www.monroebdc.com. The SEC also maintains a website at www.sec.gov that contains such information.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This prospectus may not be used to consummate sales of securities unless accompanied by a prospectus supplement.
The date of this prospectus is          , 2020

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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with the SEC using the “shelf” registration process. Under the shelf registration process, we may offer from time to time up to $300,000,000 of our common stock, preferred stock, warrants representing rights to purchase shares of our common stock, preferred stock or debt securities, subscription rights or debt securities (consisting of debentures, notes or other evidence of indebtedness) on the terms to be determined at the time of the offering. We may sell our common stock through underwriters or dealers, “at-the-market” to or through a market maker, into an existing trading market or otherwise directly to one or more purchasers or through agents or through a combination of methods of sale. The identities of such underwriters, dealers, market makers or agents, as the case may be, will be described in one or more supplements to this prospectus. The securities may be offered at prices and on terms described in one or more supplements to this prospectus. This prospectus provides you with a general description of the securities that we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering.
We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings. In a prospectus supplement or free writing prospectus, we may also add, update, or change any of the information contained in this prospectus or in the documents we incorporate by reference into this prospectus. This prospectus, together with the applicable prospectus supplement, any related free writing prospectus, and the documents incorporated by reference into this prospectus and the applicable prospectus supplement, will include all material information relating to the applicable offering. Before buying any of the securities being offered, you should carefully read both this prospectus and the applicable prospectus supplement and any related free writing prospectus, together with any exhibits and the additional information described in the sections titled “Available Information,” “Incorporation by Reference,” “Summary” and “Risk Factors.”
You should rely only on the information contained or incorporated by reference in this prospectus, any prospectus supplement or in any free writing prospectus prepared by, or on behalf of, us or to which we have referred you. We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained in this prospectus, any prospectus supplement or in any free writing prospectus prepared by, or on behalf of, us or to which we have referred you. You must not rely upon any information or representation not contained in this prospectus, any such prospectus supplements or free writing prospectuses as if we had authorized it. This prospectus, any such prospectus supplements or free writing prospectuses do not constitute an offer to sell or a solicitation of any offer to buy any security other than the registered securities to which they relate, nor do they constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction. The information contained in, or incorporated by reference in, this prospectus, any such prospectus supplements or free writing prospectuses is, or will be, accurate as of the dates on their respective covers. Our business, financial condition, results of operations and prospects may have changed since then.
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SUMMARY
This summary highlights some of the information in this prospectus or incorporated by reference. It is not complete and may not contain all of the information that you may want to consider. You should read this entire prospectus, together with any accompanying prospectus supplements or free writing prospectuses and information incorporated by reference, carefully, including, in particular, the more detailed information set forth under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and under similar headings in any other documents that are incorporated by reference into this prospectus, and the information set forth under the caption “Available Information” in this prospectus.
As used in this prospectus, except as otherwise indicated, the terms:

“we,” “us” and “our” refer to Monroe Capital Corporation, a Maryland corporation;

MC Advisors refers to Monroe Capital BDC Advisors, LLC, our investment advisor and a Delaware limited liability company;

MC Management refers to Monroe Capital Management Advisors, LLC, our administrator and a Delaware limited liability company;

Monroe Capital refers to Monroe Capital LLC, a Delaware limited liability company, and its subsidiaries and affiliates;

SLF refers to MRCC Senior Loan Fund I, LLC, an unconsolidated Delaware limited liability company, in which we co-invest with NLV Financial Corporation (“NLV”) primarily in senior secured loans;

MRCC SBIC refers to Monroe Capital Corporation SBIC, LP, a Delaware limited partnership, our wholly-owned subsidiary that operates as a small business investment company pursuant to a license received from the United States Small Business Administration; and

LIBOR refers to the one-month, three-month or six-month London Interbank Offered Rate as reported by the British Bankers’ Association. Unless stated otherwise herein, LIBOR refers to the one-month rate.
Monroe Capital Corporation
We are an externally managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended, or the 1940 Act, and that has elected to be treated as a regulated investment company, or RIC, for tax purposes under the U.S. Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2012. We provide customized financing solutions to lower middle-market companies in the United States and Canada focused primarily on senior secured, junior secured and unitranche secured (a combination of senior secured and junior secured debt in the same facility in which we syndicate a “first out” portion of the loan to an investor and retain a “last out” portion of the loan) debt and, to a lesser extent, unsecured subordinated debt and equity, including equity co-investments in preferred and common stock and warrants.
Our investment objective is to maximize the total return to our stockholders in the form of current income and capital appreciation through investment in senior secured, unitranche secured and junior secured debt and, to a lesser extent, unsecured subordinated debt and equity investments. We seek to use our extensive leveraged finance origination infrastructure and broad expertise in sourcing loans to invest in primarily senior secured, unitranche secured and junior secured debt of middle-market companies. We believe that our primary focus on lending to lower middle-market companies offers several advantages as compared to lending to larger companies, including more attractive economics, lower leverage, more comprehensive and restrictive covenants, more expansive events of default, relatively small debt facilities that provide us with enhanced influence over our borrowers, direct access to borrower management and improved information flow.
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In this prospectus, the term “middle-market” generally refers to companies having annual revenue of between $10 million and $1 billion and/or annual earnings before interest, taxes, depreciation and amortization, or EBITDA, of between $3 million and $100 million. Within the middle-market, we consider companies having annual revenues of less than $250 million and/or EBITDA of less than $35 million to be in the “lower middle-market.”
Our Investment Advisor
Our investment activities are managed by our investment advisor, MC Advisors. MC Advisors is responsible for sourcing potential investments, conducting research and due diligence on prospective investments and their private equity sponsors, analyzing investment opportunities, structuring our investments and managing our investments and portfolio companies on an ongoing basis. MC Advisors was organized in February 2011 and is a registered investment adviser under the Investment Advisers Act of 1940, as amended, or the Advisers Act.
Under the investment advisory and management agreement with MC Advisors, or the Investment Advisory Agreement, we pay MC Advisors a base management fee and an incentive fee for its services. See “Management and Other Agreements — Investment Advisory Agreement — Management and Incentive Fee” for a discussion of the base management fee and incentive fee payable by us to MC Advisors. While not expected to review or approve each investment, our independent directors periodically review MC Advisors’ services and fees as well as its portfolio management decisions and portfolio performance. In connection with these reviews, our independent directors consider whether our fees and expenses (including those related to leverage) remain appropriate.
MC Advisors seeks to capitalize on the significant deal origination, credit underwriting, due diligence, investment structuring, execution, portfolio management and monitoring experience of Monroe Capital’s investment professionals. The senior management team of Monroe Capital, including Theodore L. Koenig and Aaron D. Peck, provides investment services to MC Advisors pursuant to a staffing agreement, or the Staffing Agreement, between MC Management, an affiliate of Monroe Capital, and MC Advisors. Messrs. Koenig and Peck have developed a broad network of contacts within the investment community and average more than 30 years of experience investing in debt and equity securities of lower middle-market companies. In addition, Messrs. Koenig and Peck have extensive experience investing in assets that constitute our primary focus and have expertise in investing throughout all periods of the economic cycle. MC Advisors is an affiliate of Monroe Capital and is supported by experienced investment professionals of Monroe Capital under the terms of the Staffing Agreement. Monroe Capital’s core team of investment professionals has an established track record in sourcing, underwriting, executing and monitoring transactions. From Monroe Capital’s formation in 2004 through December 31, 2019, Monroe Capital’s investment professionals invested in over 1,300 loan and related investments in an aggregate amount of over $17.0 billion.
In addition to their roles with Monroe Capital and MC Advisors, Messrs. Koenig and Peck serve as interested directors. Mr. Koenig has more than 35 years of experience in structuring, negotiating and closing transactions on behalf of asset-backed lenders, commercial finance companies, financial institutions and private equity investors at organizations including Monroe Capital, which Mr. Koenig founded in 2004, and Hilco Capital LP, where he led investments in over 20 companies in the lower middle-market. Mr. Peck has more than 25 years of public company management, leveraged finance and commercial lending experience at organizations including Deerfield Capital Management LLC, Black Diamond Capital Management LLC and Salomon Smith Barney Inc. Messrs. Koenig and Peck are joined on the investment committee of MC Advisors by Michael J. Egan and Jeremy T. VanDerMeid, each of whom is a senior investment professional at Monroe Capital. Mr. Egan has more than 35 years of experience in commercial finance, credit administration and banking at organizations including Hilco Capital, The CIT Group/Business Credit, Inc., The National Community Bank of New Jersey (The Bank of New York) and KeyCorp. Mr. VanDerMeid has more than 20 years of lending and corporate finance experience at organizations including Morgan Stanley Investment Management, Dymas Capital Management Company, LLC and Heller Financial. See “Portfolio Management — Investment Committee.”
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About Monroe Capital
Monroe Capital, a Delaware limited liability company that was founded in 2004, is a leading lender to middle-market companies. As of January 1, 2020, Monroe Capital had approximately $9.2 billion in assets under management. Over its sixteen-year history, Monroe Capital has developed an established lending platform that we believe generates consistent deal flow from a network of proprietary relationships. Monroe Capital’s assets under management are comprised of a diverse portfolio of over 500 current investments that were either originated directly by Monroe Capital or sourced from Monroe Capital’s third-party relationships. From Monroe Capital’s formation in 2004 through December 31, 2019, Monroe Capital’s investment professionals invested in over 1,300 loans and related investments in an aggregate amount of over $17.0 billion. The senior investment team of Monroe Capital averages more than 30 years of experience and has developed a proven investment and portfolio management process that has performed through multiple market cycles. In addition, Monroe Capital’s investment professionals are supported by a robust infrastructure of administrative and back-office personnel focused on compliance, operations, finance, treasury, legal, accounting and reporting, marketing, information technology and office management.
MRCC SBIC
On February 28, 2014, our wholly-owned subsidiary, MRCC SBIC, received a license from the U.S. Small Business Administration (“SBA”) to operate as a Small Business Investment Company (“SBIC”) under Section 301(c) of the Small Business Investment Company Act of 1958. MRCC SBIC commenced operations on September 16, 2013. As our wholly-owned subsidiary, MRCC SBIC relies on one or more exclusions from the definition of “investment company” under the 1940 Act and does not elect to be regulated as a business development company under the 1940 Act. MRCC SBIC has an investment objective substantially similar to ours and makes similar types of investments in accordance with SBIC regulations.
As of December 31, 2019, MRCC SBIC had $57.6 million in leverageable capital (approximately 8.8% of our total assets) and $115.0 million in SBA-guaranteed debentures outstanding.
We have received exemptive relief from the SEC to permit us to exclude the debt of MRCC SBIC guaranteed by the SBA from the definition of senior securities for the purposes of the 150% asset coverage ratio we are required to maintain under the 1940 Act, which provides us with increased flexibility, but also increases our risks associated with leverage.
Corporate Information
We were incorporated under the laws of Maryland on February 9, 2011. Our principal executive offices are located at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, and our telephone number is (312) 258-8300. We maintain a website at www.monroebdc.com and make all of our periodic and current reports, proxy statements and other information available, free of charge, on or through our website. Information on our website is not incorporated into or part of this prospectus.
Risk Factors
The value of our assets, as well as the market price of our securities will fluctuate. Our investments may be risky, and you may lose all or part of your investment in us. A material portion of our portfolio may have exposure to specific industries. See “Risk Factors” in the applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the documents that are incorporated by reference into this prospectus, including the section titled “Risk Factors” included in our most recent Annual Report on Form 10-K, as well as in any of our subsequent SEC filings.
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FEES AND EXPENSES
The following table is intended to assist you in understanding the costs and expenses that an investor in our common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and actual amounts and percentages may vary. Except where the context suggests otherwise, whenever this prospectus contains a reference to fees or expenses paid by “you,” “us,” “the Company” or “Monroe Capital Corporation,” or that “we” will pay fees or expenses, stockholders will indirectly bear such fees or expenses as investors in Monroe Capital Corporation.
Stockholder transaction expenses:
Sales load (as a percentage of offering price)
%(1)
Offering expenses (as a percentage of offering price)
%(2)
Dividend reinvestment plan expenses
%(3)
Total stockholder transaction expenses (as a percentage of offering price)
%(2)
Estimated annual expenses (as a percentage of net assets attributable to common stock):
Base management fee
4.39%(4)
Incentive fees payable under the Investment Advisory Agreement
2.88%(5)
Interest payments on borrowed funds
8.38%(6)
Other expenses (estimated)
1.52%(7)
Acquired fund fees and expenses
1.53%(8)
Total annual expenses (estimated)
18.70%(9)
(1)
In the event that the securities to which this prospectus relates are sold to or through underwriters or agents, a corresponding prospectus supplement will disclose the applicable sales load.
(2)
The related prospectus supplement will disclose the estimated amount of total offering expenses (which may include offering expenses borne by third parties on our behalf), the offering price and the offering expenses borne by us as a percentage of the offering price.
(3)
The expenses of the dividend reinvestment plan are included in “other expenses.” See “Dividend Reinvestment Plan.”
(4)
Our base management fee is calculated initially at an annual rate of 1.75% of our average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage); provided however, the base management fee is calculated at an annual rate equal to 1.00% of our average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage) that exceeds the product of (i) 200% and (ii) our average net assets. For the avoidance of doubt, the 200% is calculated in accordance with the asset coverage limitation as defined in the 1940 Act to give effect to our exemptive relief with respect to MRCC SBIC’s SBA debentures. We may from time to time decide it is appropriate to change the terms of the Investment Advisory Agreement. Under the 1940 Act, any material change to the Investment Advisory Agreement generally must be submitted to our stockholders for approval. The “base management fee” percentage is calculated as a percentage of net assets attributable to common stockholders, rather than total assets, including assets that have been funded with borrowed monies, because common stockholders bear all of this cost. The base management fee in the table above assumes the base management fee remains consistent with fees incurred for the three months ended December 31, 2019 of $2.8 million, based on average total assets (excluding cash) for the period of $647.1 million, as a percentage of our average net assets for the period of $250.9 million. See “Management and Other Agreements — Investment Advisory Agreement.”
(5)
Estimated assuming that annual incentive fees earned by MC Advisors remains consistent with the incentive fees earned, gross of the Incentive Fee Limitation due to the total return requirement, for the three months ended December 31, 2019 of $1.8 million, as a percentage of our average net assets of $250.9 million for the period. For information about our Incentive Fee Limitation and incentive fee waiver, see “Management and Other Agreements — Investment Advisory Agreement” and “Consolidated Statements of Operations” in our financial statements incorporated by reference into this prospectus.
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The incentive fee consists of two parts:
The first part of the incentive fee, payable quarterly in arrears, equals 20% of our pre-incentive fee net investment income (including interest that is accrued but not yet received in cash), subject to a 2% quarterly (8% annualized) rate of return on the value of our net assets, or hurdle rate, and a “catch-up” provision measured as of the end of each calendar quarter. Under this provision, in any calendar quarter, MC Advisors receives no incentive fee until our net investment income equals the hurdle rate of 2% but then receives, as a “catch-up,” 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.5%. The effect of this provision is that, if pre-incentive fee net investment income exceeds 2.5% in any calendar quarter, MC Advisors will receive 20% of our pre-incentive fee net investment income as if a hurdle rate did not apply. The first component of the incentive fee will be computed and paid on income that includes, in the case of investments with a deferred interest feature such as market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero coupon securities, accrued income that we have not yet received in cash. Since the hurdle rate is fixed, as interest rates rise, it will be easier for the MC Advisors to surpass the hurdle rate and receive an incentive fee based on net investment income. The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of our pre-incentive fee net investment income will be payable except to the extent that 20% of the cumulative net increase in net assets resulting from operations over the then current and 11 preceding calendar quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. In other words, any ordinary income incentive fee that is payable in a calendar quarter will be limited to the lesser of (i) 20% of the amount by which our pre-incentive fee net investment income for such calendar quarter exceeds the 2% hurdle, subject to the “catch-up” provision, and (ii) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum of our pre-incentive fee net investment income, base management fees, realized gains and losses and unrealized appreciation and depreciation for the then current and 11 preceding calendar quarters.
The second part of the incentive fee, payable annually in arrears, equals 20% of our realized capital gains on a cumulative basis from inception through the end of the fiscal year, if any (or upon the termination of the Investment Advisory Agreement, as of the termination date), computed net of all realized capital losses on a cumulative basis and unrealized capital depreciation, less the aggregate amount of any previously paid capital gain incentive fees. We will accrue (but not pay) an expense for potential payment of capital gain incentive fees with respect to any unrealized appreciation on our portfolio.
See “Management and Other Agreements — Investment Advisory Agreement.”
(6)
We may borrow funds from time to time to make investments to the extent we determine that it is appropriate to do so. The costs associated with any outstanding borrowings are indirectly borne by our investors. The table assumes borrowings are consistent with the average borrowings for the three months ended December 31, 2019 of $422.5 million, no preferred stock issued or outstanding and average net assets of $250.9 million. For the three months ended December 31, 2019, we had interest expense of $5.3 million (including fees for unused portions of commitments and amortization of deferred financing costs). As of December 31, 2019, the weighted average interest rate of our revolving credit facility (excluding debt issuance costs) was 4.02%, the weighted average interest rate on our SBA-guaranteed debentures (excluding debt issuance costs) was 3.42% and the interest rate on our senior unsecured notes was 5.75%. Although we do not have any current plans to issue debt securities or preferred stock in the next twelve months, we may issue debt securities or preferred stock, subject to our compliance with applicable requirements under the 1940 Act.
(7)
Includes our estimated overhead expenses, including payments under the Administration Agreement based on our allocable portion of overhead and other expenses incurred by MC Management. The table above assumes “other expenses” remain consistent with the $1.0 million incurred during the three months ended December 31, 2019 and average net assets for the period of $250.9 million.
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(8)
Our stockholders indirectly bear the expenses of our investment in SLF. SLF does not pay any fees to MC Advisors or its affiliates; however, SLF has entered into an administration agreement with MC Management, pursuant to which certain loan servicing and administrative functions are delegated to MC Management. SLF may reimburse MC Management for its allocable share of overhead and other expenses incurred by MC Management. For the three months ended December 31, 2019, SLF incurred $57 thousand of allocable expenses. The table above assumes “acquired fund fees and expenses” remain consistent with the $1.0 million of expenses incurred for the three months ended December 31, 2019 and average net assets for the period of $250.9 million. Future expenses for SLF may be substantially higher or lower because certain expenses may fluctuate over time.
(9)
“Total annual expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage our net assets and increase our total assets. We calculate the “total annual expenses” percentage as a percentage of net assets (defined as total assets less indebtedness and after taking into account any incentive fees payable during the period), rather than the total assets, including assets that have been purchased with borrowed amounts. The terms of our indebtedness may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Borrowings” incorporated by reference into this prospectus. If the “total annual expenses” percentage were calculated instead as a percentage of average consolidated total assets for the three months ended December 31, 2019, our “total annual expenses” would be 6.96% of average consolidated total assets for the period of $674.0 million. With certain limited exceptions, we are only allowed to borrow amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150%. We have received exemptive relief from the SEC to permit us to exclude the debt of our SBIC subsidiary guaranteed by the SBA from the definition of senior securities for the purposes of the asset coverage ratio. We have included our estimated leverage expenses (consistent with the assumptions in footnote (7)) in “total annual expenses.”
Example
The following example illustrates the projected dollar amount of total cumulative expenses over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we would have no additional leverage, that none of our assets are cash or cash equivalents and that our annual operating expenses would remain at the levels set forth in the table above. Transaction expenses are not included in the following example:
You would pay the following expenses on a $1,000 investment
1 Year
3 Years
5 Years
10 Years
Assuming a 5% annual return (assumes no return from net realized capital gains or net unrealized capital appreciation)
$ 158 $ 475 $ 791 $ 1,582
Assuming a 5% annual return (assumes entire return is from realized capital gains and thus subject to the capital gains incentive fee)
$ 168 $ 506 $ 846 $ 1,707
This table is to assist you in understanding the various costs and expenses that an investor in our common stock will bear directly or indirectly. While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. As incentive fees vary based on the character of the 5% return, the example above provides (i) expenses assuming no return from capital gains (therefore not meeting the hurdle rate for the first part of the incentive fee) and (ii) expenses assuming the entire return is from realized capital gains (resulting in a capital gains incentive fee). For the three months ended December 31, 2019, our return included net realized and unrealized capital losses. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher. In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, if our board of directors authorizes and we declare a cash distribution, participants in our dividend reinvestment plan who have not otherwise elected to receive cash will receive a number of shares of our common stock, determined by dividing the total dollar amount of the distribution payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the distribution. See “Dividend Reinvestment Plan” for additional information regarding our dividend reinvestment plan.
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This example and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.
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AVAILABLE INFORMATION
This prospectus is part of a registration statement on Form N-2 we filed with the SEC under the Securities Act. This prospectus does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and the securities we are offering under this prospectus, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or other document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit.
We file with or submit to the SEC annual, quarterly and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act. We maintain a website at www.monroebdc.com and make all of our annual, quarterly and current reports, proxy statements and other publicly filed information available, free of charge, on or through our website. Information contained on our website is not incorporated into this prospectus, and you should not consider information on our website to be part of this prospectus. You may also obtain such information by contacting us in writing at 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606, Attention: Investor Relations. The SEC maintains a website that contains reports, proxy and information statements and other information we file with the SEC at www.sec.gov.
INCORPORATION BY REFERENCE
This prospectus is part of a registration statement that we have filed with the SEC. Pursuant to the Small Business Credit Availability Act (“SBCAA”), we are allowed to “incorporate by reference” the information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to comprise a part of this prospectus from the date we file that document. Any reports filed by us with the SEC subsequent to the date of this prospectus and before the date that any offering of any securities by means of this prospectus and any accompanying prospectus supplement is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated by reference in this prospectus.
We incorporate by reference into this prospectus our filings listed below and any future filings that we may file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, subsequent to the date of this prospectus until all of the securities offered by this prospectus and any accompanying prospectus supplement have been sold or we otherwise terminate the offering of these securities; provided, however, that information “furnished” under Item 2.02 or Item 7.01 of Form 8-K or other information “furnished” to the SEC which is not deemed filed is not and will not be incorporated by reference:

our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 3, 2020;

our Current Report on Form 8-K filed with the SEC on February 14, 2020; and

the description of our common stock contained in our Registration Statement on Form 8-A filed with the SEC on October 23, 2012.
To obtain copies of these filings, see “Available Information.”
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RISK FACTORS
Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risks and uncertainties described in the section titled “Risk Factors” in the applicable prospectus supplement and any related free writing prospectus, and discussed in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC on March 3, 2020, and any subsequent filings we have made with the SEC that are incorporated by reference into this prospectus, together with other information in this prospectus, the documents incorporated by reference, and any free writing prospectus that we may authorize for use in connection with this offering. The risks described in these documents are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed. This could cause our net asset value and the trading price of our securities to decline, resulting in a loss of all or part of your investment. Please also read carefully the section titled “Special Note Regarding Forward-Looking Statements.”
Risks Relating to Our Business and Structure
The risks described below supplement the risks in Part I, Item 1A of our 2019 Annual Report on Form 10-K under the caption “Risk Factors — Risks Relating to our Business and Structure.”
The COVID-19 pandemic could materially and adversely affect our portfolio companies and the results of our operations.
In late 2019 and early 2020, a novel coronavirus (SARS-CoV-2) and related respiratory disease (COVID 19) emerged in China and spread rapidly to across the world, including to 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 “stay at home” 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 businesses. This outbreak is having, and any future outbreaks could have, an adverse impact on our portfolio companies and us and on the markets and the economy in general, and that impact could be material.
Further, from an operational perspective, MC Advisor’s investment professionals are currently working remotely. An extended period of remote work arrangements could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. In addition, we are highly dependent on third party services providers for certain communication and information systems. As a result, we rely upon the successful implementation and execution of the business continuity planning of such providers in the current environment. If one or more of these third parties to whom we outsource certain critical business activities experience operational failures as a result of the impacts from the spread of COVID-19, or claim that they cannot perform due to a force majeure, it may have a material adverse effect on our business, financial condition, results of operations, liquidity and cash flows.
We are currently operating in a period of capital markets disruption and economic uncertainty.
The U.S. capital markets have experienced extreme volatility and disruption following the spread of COVID-19 in the United States. Some economists and major investment banks have expressed concern that
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the continued spread of the virus globally could lead to a world-wide economic downturn. Disruptions 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.
Risks Relating to Our Common Stock
The risks described below supplement the risks in Part I, Item 1A of our 2019 Annual Report on Form 10-K under the caption “Risk Factors — Risks Relating to Our Common Stock.”
The market price of our securities may fluctuate significantly.
The market price and liquidity of the market for our securities may be higher or lower than the price you pay and may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors may include:

significant volatility in the market price and trading volume of securities of BDCs or other companies in our sector, which is not necessarily related to the operating performance of these companies;

changes in regulatory policies or tax guidelines, particularly with respect to RICs or BDCs;

loss of RIC or BDC status;

the ability of MRCC SBIC, or any other SBIC subsidiary we may form to obtain and maintain an SBIC license;

changes or perceived changes in earnings or variations in operating results;

changes or perceived changes in the value of our portfolio of investments;

changes in accounting guidelines governing valuation of our investments;

any shortfall in revenue or net income or any increase in losses from levels expected by investors or securities analysts;

departure of MC Advisors’ key personnel;

the occurrence of one or more natural disasters, pandemic outbreaks or other health crises (including but not limited to the COVID-19 outbreak);

operating performance of companies comparable to us;

general economic trends and other external factors, including the current COVID-19 pandemic; and

loss of a major funding source.
If the current period of capital market disruption and instability continues for an extended period of time, there is a risk that our stockholders may not receive distributions or that our distributions may decline over time and a portion of our distributions to you may be a return of capital for U.S. federal income tax purposes.
We intend to make distributions 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 or maintain a specified level of cash distributions and we may choose to pay a portion of dividends in our own stock. Our ability to pay distributions might be adversely affected by the impact of one or more of the risk factors described in this prospectus 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
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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. In addition, due to the asset coverage test applicable to us as a BDC, we may be limited in our ability to make distributions. Our revolving credit facility may also limit our ability to declare dividends if we default under certain provisions. Further, if we invest a greater amount of assets in equity securities that do not pay current dividends, it could reduce the amount available for distribution. See “Price Range of Common Stock and Distributions.” The above referenced restrictions on distributions may also inhibit our ability to make required interest payments to holders of our debt, which may cause a default under the terms of our debt agreements. Such a default could materially increase our cost of raising capital, as well as cause us to incur penalties under the terms of our debt agreements.
The distributions we pay to our stockholders in a year may exceed our taxable income for that year and, accordingly, a portion of such distributions may constitute a return of capital for U.S. federal income tax purposes that would reduce a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock and correspondingly increase such stockholder’s gain, or reduce such stockholder’s loss, on disposition of such shares. Distributions in excess of a stockholder’s adjusted tax basis in its shares of our common stock or preferred stock will constitute capital gains to such stockholder.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains, and any applicable prospectus supplement or free writing prospectus, including the documents we incorporate by reference, may contain, forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about us, our current and prospective portfolio investments, our industry, our beliefs, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “should,” “targets,” “projects,” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including:

our dependence on key personnel;

our ability to maintain or develop referral relationships;

the ability of MC Advisors to identify, invest in and monitor companies that meet our investment criteria;

actual and potential conflicts of interest with MC Advisors and its affiliates;

possession of material nonpublic information;

potential divergent interests of MC Advisors and our stockholders arising from our incentive fee structure;

restrictions on affiliate transactions;

competition for investment opportunities;

our ability to maintain our qualification as a RIC and as a business development company;

the impact of a protracted decline in the liquidity of credit markets on our business and portfolio investments, and the impact of the COVID-19 pandemic thereon;

the adequacy of our financing sources;

the timing, form and amount of any payments, dividends or other distributions from our portfolio companies, and the impact of the COVID-19 pandemic thereon;

our use of leverage;

changes in interest rates;

SBA regulations affecting MRCC SBIC or any other wholly-owned SBIC subsidiary;

uncertain valuations of our portfolio investments, and the impact of the COVID-19 pandemic thereon;

fluctuations in our quarterly operating results;

our ability to issue securities at a discount to net asset value per share;

changes in laws or regulations applicable to us or our portfolio companies; and

general economic and political conditions and their impact on the industries in which we invest, and the impact of the COVID-19 pandemic thereon.
We have based the forward-looking statements on information available to us on the applicable date of this prospectus, free writing prospectus and documents incorporated by reference into this prospectus. Actual results could differ materially from those anticipated in our forward-looking statements, and future results could differ materially from historical performance. You should not place undue reliance on these forward-looking statements, which are based on information available to us as of the applicable date of this prospectus, any applicable prospectus supplement or free writing prospectus, including any documents incorporated by reference, and while we believe such information forms, or will form, a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.
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USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement or a free writing prospectus, we intend to use all or substantially all of the net proceeds from the sale of our securities to invest in portfolio companies directly in accordance with our investment objective and strategies and for general corporate purposes. We will also pay operating expenses, including management and administrative fees, and may pay other expenses from the net proceeds of any offering of our securities.
We anticipate that we will use substantially all of the net proceeds of an offering for the above purposes within approximately six months after the completion of any offering of our securities, depending on the availability of appropriate investment opportunities consistent with our investment objective and market conditions. It may take more or less time for us to identify, negotiate and enter into investments and fully deploy any proceeds we raise, and we cannot assure you that we will achieve our targeted investment pace.
Until such appropriate investment opportunities can be found, we will invest the net proceeds of any offering of our securities primarily in cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less from the date of investment. These temporary investments may have lower yields than our other investments and, accordingly, may result in lower distributions, if any, during such period. Our ability to achieve our investment objective may be limited to the extent that the net proceeds from an offering, pending full investment, are held in lower yielding interest-bearing deposits or other short-term instruments. See “Regulation — Temporary Investments” for additional information about temporary investments we may make while waiting to make longer-term investments in pursuit of our investment objective.
The prospectus supplement to this prospectus relating to an offering will more fully identify the use of the proceeds from such offering.
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PRICE RANGE OF COMMON STOCK AND DISTRIBUTIONS
Our common stock began trading on The Nasdaq Global Market under the ticker symbol “MRCC” on October 25, 2012. Prior to that date, there was no established trading market for our common stock. Our common stock is now traded on the Nasdaq Global Select Market. Our common stock has historically traded both above and below net asset value (“NAV”).
The following table sets forth the high and low closing sales prices of our common stock, the closing sales price as a percentage of our NAV and the distributions declared by us since January 1, 2018.
Closing Sales Price
Premium
(Discount) of
High Sales
Price to
NAV(2)
Premium
(Discount) of
Low Sales
Price to
NAV(2)
Declared
Distributions(3)
NAV(1)
High
Low
Year ending December 31, 2020
Second Quarter (through April 16, 2020)
(4) $ 7.16 $ 6.01 (4) (4)
First Quarter
(4) $ 12.07 $ 4.90 (4) (4) $ 0.35(5)
Year ended December 31, 2019
Fourth Quarter
$ 12.20 $ 11.86 $ 10.09 (2.8)% (17.3)% $ 0.35(6)
Third Quarter
$ 12.34 $ 11.83 $ 9.99 (4.1)% (19.0)% $ 0.35(6)
Second Quarter
$ 12.52 $ 12.47 $ 11.29 (0.4)% (9.8)% $ 0.35(6)
First Quarter
$ 12.67 $ 13.25 $ 9.58 4.6% (24.4)% $ 0.35(6)
Year ended December 31, 2018
Fourth Quarter
$ 12.66 $ 13.56 $ 9.16 7.1% (27.6)% $ 0.35(7)
Third Quarter
$ 12.95 $ 14.00 $ 13.22 8.1% 2.1% $ 0.35(7)
Second Quarter
$ 13.35 $ 14.52 $ 12.31 8.8% (7.8)% $ 0.35(7)
First Quarter
$ 13.49 $ 14.28 $ 12.20 5.9% (9.6)% $ 0.35(7)
(1)
NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.
(2)
Calculated by taking the respective high or low closing sales price divided by the quarter end NAV and subtracting 1.
(3)
Represents the distribution declared in the specified quarter. We have adopted an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions. See “Dividend Reinvestment Plan.”
(4)
NAV calculation is not yet available.
(5)
Our management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent that our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to our stockholders. The tax character of distributions will be determined at the end of the fiscal year.
(6)
There was no return of capital for tax purposes for the year ended December 31, 2019.
(7)
There was no return of capital for tax purposes for the year ended December 31, 2018.
To the extent we have income available, we intend to make quarterly distributions to our stockholders. Our quarterly distributions, if any, are determined by our board of directors. Any distributions to our stockholders are declared out of assets legally available for distribution.
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We elected to be treated as a RIC under the Code beginning with our taxable year ending December 31, 2012, have qualified in each taxable year since, and intend to qualify annually hereafter. To obtain and maintain RIC tax treatment, we must distribute at least 90% of our net ordinary income and net short-term capital gains in excess of our net long-term capital losses, if any. In order to avoid certain excise taxes imposed on RICs, we currently intend to distribute during each calendar year an amount at least equal to the sum of: (a) 98% of our net ordinary income for such calendar year; (b) 98.2% of our net capital gains in excess of capital losses for the one-year period ending on October 31 of the calendar year; and (c) any net ordinary income and net capital gains for preceding years that were not distributed during such years and on which we previously paid no U.S. federal income tax.
We currently intend to distribute net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually out of the assets legally available for such distributions. However, we may decide in the future to retain such capital gains for investment and elect to treat such gains as deemed distributions to you. If this happens, you will be treated for U.S. federal income tax purposes as if you had received an actual distribution of the capital gains that we retain and reinvested the net after tax proceeds in us. In this situation, you would be eligible to claim a tax credit (or, in certain circumstances, a tax refund) equal to your allocable share of the tax we paid on the capital gains deemed distributed to you. See “Material U.S. Federal Income Tax Considerations.” We cannot assure you that we will achieve results that will permit us to continue to pay any cash distributions, and if we issue senior securities, we will be prohibited from making distributions if doing so would cause us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if such distributions are limited by the terms of any of our borrowings.
Our management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent that our taxable earnings fall below the total amount of our distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to our stockholders. The tax character of distributions will be determined at the end of the fiscal year. A return of capital distribution is not a distribution from earnings and profits, but is rather a return of the money initially invested and while it may not be currently taxable, it lowers the stockholder’s basis in the stock, which may result in higher capital gains when the stockholder’s investment in us is ultimately sold.
Unless you elect to receive your dividends in cash, we intend to make such distributions in additional shares of our common stock under our dividend reinvestment plan. Although distributions paid in the form of additional shares of our common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, investors participating in our dividend reinvestment plan will not receive any corresponding cash distributions with which to pay any such applicable taxes. If you hold shares of our common stock in the name of a broker or financial intermediary, you should contact such broker or financial intermediary regarding your election to receive distributions in cash in lieu of shares of our common stock. Any dividends reinvested through the issuance of shares through our dividend reinvestment plan will increase our assets on which the base management fee and the incentive fee are determined and paid to MC Advisors. See “Dividend Reinvestment Plan.”
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Senior Securities
Information about our senior securities is shown in the following table as of December 31, 2019 and for the years indicated in the table (dollars in thousands). This annual information has been derived from our audited consolidated financial statements for each respective period, which have been audited by RSM US LLP, our independent registered public accounting firm, and are incorporated by reference into this prospectus. RSM US LLP’s report on the senior securities table as of December 31, 2019 is attached as an exhibit to the registration statement of which this prospectus is a part.
Class and Year
Total
Amount
Outstanding
Exclusive of
Treasury
Securities(1)
Asset Coverage per
Unit(2)
Involuntary
Liquidating
Preference per
Unit(3)
Average Market
Value per Unit(4)
Revolving Credit Facility
December 31, 2019
$ 180,294 $ 1,862 N/A
December 31, 2018
136,026 2,262 N/A
December 31, 2017
117,092 3,380 N/A
December 31, 2016
129,000 2,848 N/A
December 31, 2015
123,700 2,462 N/A
December 31, 2014
82,300 2,547 N/A
December 31, 2013
76,000 2,644 N/A
December 31, 2012
55,000 2,521 N/A
5.75% Notes due 2023
December 31, 2019
$ 109,000 $ 1,862 $ 1,005(5)
December 31, 2018
69,000 2,262 $ 986(5)
Secured Borrowings(6)
December 31, 2019
$ $ 1,862 N/A
December 31, 2018
2,262 N/A
December 31, 2017
3,380 N/A
December 31, 2016(7)
1,320 2,848 N/A
December 31, 2015(8)
2,535 2,462 N/A
December 31, 2014(9)
4,134 2,547 N/A
December 31, 2013(10)
7,997 2,644 N/A
December 31, 2012
2,521 N/A
(1)
Total amount of each class of senior securities outstanding at the end of the period presented.
(2)
The asset coverage ratio of senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the Asset Coverage per Unit (including for the 5.75% Notes due 2023, which were issued in $25 increments). On October 2, 2014, we received exemptive relief from the SEC to permit us to exclude the debt of MRCC SBIC guaranteed by the SBA from our asset coverage test under the 1940 Act.
(3)
The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it. The “—” in this column indicates that the SEC expressly does not require this information to be disclosed for certain types of senior securities.
(4)
Not applicable, except for with respect to the 5.75% Notes due 2023, as senior securities are not registered for public trading.
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(5)
The average market value for the 5.75% Notes due 2023 is calculated as the average daily closing prices of such notes on the Nasdaq Global Select Market for the year divided by the par value per unit of such notes. This average market value is multiplied by $1,000 to determine the Average Market Value per Unit.
(6)
Certain partial loan sales do not qualify for sale accounting under ASC Topic 860 — Transfers and Servicing (“ASC Topic 860”) because these sales do not meet the definition of a “participating interest,” as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain as an investment on the accompanying consolidated statements of assets and liabilities and the portion sold is recorded as a secured borrowing in the liabilities section of the consolidated statements of assets and liabilities. Amounts presented in this table represent the par amount outstanding.
(7)
The secured borrowings have a weighted average stated interest rate of 6.26%, a weighted average years to maturity of 1.0 year and a fair value as of December 31, 2016 of  $1,314.
(8)
The secured borrowings have a weighted average stated interest rate of 5.75%, a weighted average years to maturity of 2.0 years and a fair value as of December 31, 2015 of  $2,476.
(9)
The secured borrowings have a weighted average stated interest rate of 5.45%, a weighted average years to maturity of 3.0 years and a fair value as of December 31, 2014 of  $4,008.
(10)
The secured borrowings have a weighted average stated interest rate of 4.33%, a weighted average years to maturity of 4.0 years and a fair value as of December 31, 2013 of  $7,943.
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PORTFOLIO COMPANIES
The following table sets forth certain information as of December 31, 2019, for each portfolio company in which we had a debt or equity investment. Other than equity investments, we expect that our only formal relationships with our portfolio companies will be the managerial assistance we may provide, and the board observation or participation rights we may receive. Except as identified in a footnote below, we do not “control” and are not an “affiliate” of any of our portfolio companies, as each term is defined in the 1940 Act. In general, under the 1940 Act, we would “control” a portfolio company if we owned more than 25.0% in voting securities and would be an “affiliate” of a portfolio company if we owned 5.0% or more of its voting securities.
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
777 SPV I LLC
600 Brickell Ave, 19th floor
Miami, FL 33131
Banking, Finance, Insurance & Real Estate Delayed Draw (e) (f) 10.30% (LIBOR + 8.50%, 1.75% Floor)
4/14/2023
4/15/2019 5,325 $ 5,341
AdTheorent, Inc.
315 Hudson Street, 9th Floor
New York, NY 10013
Media: Advertising,
Printing &
Publishing
Senior Secured 10.19% (LIBOR + 8.50%, 0.50% Floor)
12/22/2021
12/22/2016 3,398 3,393
Class A Voting Units
(128,866 Units) (g) (h)
(i)
12/22/2016 395 0.50%
American Community Homes, Inc.
250 West 57th Street, Suite 816
New York, NY 10107
Banking, Finance, Insurance & Real Estate Senior Secured(j) 11.80% PIK (LIBOR + 10.00%, 1.50% Floor)
12/31/2020
7/22/2014 8,830 6,764
Senior Secured(j) 16.30% PIK (LIBOR + 14.50%, 1.50% Floor)
12/31/2020
7/22/2014 5,599 4,289
Senior Secured(j) 11.80% PIK (LIBOR + 10.00%, 1.50% Floor)
12/31/2020
3/17/2016 668 512
Senior Secured(j) 11.80% PIK (LIBOR + 10.00%, 1.50% Floor)
12/31/2020
5/24/2017 535 410
Senior Secured(j) 16.30% PIK (LIBOR + 14.50%, 1.50% Floor)
12/31/2020
5/24/2017 301 230
Senior Secured(j) 9.80% PIK (LIBOR +
8.00%, 1.50% Floor)
12/31/2020
8/10/2018 1,922 1,472
Senior Secured(j) 9.80% PIK (LIBOR +
8.00%, 1.50% Floor)
12/31/2020
3/29/2019 3,603 2,760
Senior Secured(j) 9.80% PIK (LIBOR +
8.00%, 1.50% Floor)
12/31/2020
9/30/2019 14 11
Senior Secured(j) 9.80% PIK (LIBOR +
8.00%, 1.50% Floor)
12/31/2020
12/30/2019 1,186 1,168
Warrant to purchase
up to 22.3% of the
equity (h) (j)
(i)
12/18/2024
10/9/2014
American Optics Holdco, Inc.
40 Washington Street, Suite 250
Wellesley, MA 02481
Healthcare & Pharmaceuticals
Senior Secured(f) (k)
8.80% (LIBOR + 7.00%, 1.00% Floor)
9/13/2022
9/13/2017 4,210 4,185
Senior Secured(f)(k) 8.80% (LIBOR + 7.00%, 1.00% Floor)
9/13/2022
9/13/2017 1,637 1,627
Revolver(f)(k)(l) 8.80% (LIBOR + 7.00%, 1.00% Floor)
9/13/2022
9/13/2017 440
Revolver(f)(k)(l) 8.80% (LIBOR + 7.00%, 1.00% Floor)
9/13/2022
9/13/2017 440
Answers Finance, LLC
6665 Delmar Boulevard
Saint Louis, MO 63130
High Tech Industries Common stock
(76,539 shares)(g)(h)
(i)
4/14/2017 52 0.77%
APCO Worldwide, Inc.
1299 Pennsylvania Avenue, NW #300
Washington, DC 20004
Services: Business Senior Secured 9.80% (LIBOR + 8.00%, 0.50% Floor)
6/30/2022
6/30/2017 4,625 4,590
Class A voting
common stock (100
shares)(g)(h)
(i)
11/1/2017 281 0.98%
Apotheco, LLC
722 Courtyard Drive
Hillsborough, NJ 08844
Healthcare & Pharmaceuticals Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
4/8/2024
4/8/2019 3,482 3,482
Delayed Draw(e) (l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
4/8/2024
4/8/2019 1,647
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
4/8/2024
4/8/2019 909 341
Arcserve (USA), LLC
8855 Columbine Rd
Eden Prairie, MN 55347
Services: Business Senior Secured 7.91% (LIBOR + 6.00%, 1.00% Floor)
5/1/2024
5/1/2019 4,755 4,785
Atlas Sign Industries of FLA, LLC
1077 West Blue Heron Boulevard
West Palm Beach, FL 33404
Services: Business Senior Secured(m) 12.30% Cash/ 1.00%
PIK (LIBOR +
11.50%, 1.00% Floor)
5/15/2023
5/14/2018 3,527 3,255
Warrants to
purchase up to 0.8%
of the equity(g)(h)
(i)
5/14/2026
5/14/2018 84
Attom Intermediate Holdco, LLC
1 Venture, Suite 300
Irvine, CA 92618
Media: Diversified & Production Senior Secured 7.55% (LIBOR + 5.75%, 1.00% Floor)
1/4/2024
1/4/2019 1,980 1,971
Revolver(l) 7.55% (LIBOR + 5.75%, 1.00% Floor)
1/4/2024
1/4/2019 320
Class A Units
(260,000 units)(g)(h)
(i)
1/4/2019 255 0.48%
BJ Services, LLC
11211 FM 2920 Road
Tomball, TX 77375
Energy: Oil & Gas Senior Secured 8.91% (LIBOR + 7.00%, 1.50% Floor)
1/3/2023
1/28/2019 4,331 4,306
Bluestem Brands, Inc.
7075 Flying Cloud Drive
Eden Prairie, MN 55344
Retail Senior Secured 9.30% (LIBOR + 7.50%, 1.00% Floor)
11/6/2020
6/26/2015 2,275 1,707
Burroughs, Inc.
41100 Plymouth Road
Plymouth, MI 48170
Services: Business Senior Secured(m) 9.19% (LIBOR + 7.50%, 1.00% Floor)
12/22/2022
12/22/2017 5,757 5,635
Revolver(l) 9.19% (LIBOR + 7.50%, 1.00% Floor)
12/22/2022
12/22/2017 1,219 1,129
Cali Bamboo, LLC
6675 Mesa Ridge Road #100
San Diego, CA 92121
Construction & Building Senior Secured 8.80% (LIBOR + 7.00%, 0.50% Floor)
7/10/2020
7/10/2015 7,855 7,602
Revolver(l) 8.80% (LIBOR + 7.00%, 0.50% Floor)
7/10/2020
7/10/2015 2,165 900
California Pizza Kitchen, Inc.
12181 Bluff Creek Drive
Playa Vista, CA 90094
Beverage, Food & Tobacco Senior Secured 7.91% (LIBOR + 6.00%, 1.00% Floor)
8/23/2022
8/19/2016 6,772 5,910
Certify, Inc.
20 York Street, Suite 201
Portland, ME 04101
Services: Business Senior Secured 7.55% (LIBOR + 5.75%, 1.00% Floor)
2/28/2024
2/28/2019 9,000 8,938
Delayed Draw(e)(l) 7.55% (LIBOR + 5.75%, 1.00% Floor)
2/28/2024
2/28/2019 1,227 609
Revolver(l) 7.55% (LIBOR + 5.75%, 1.00% Floor)
2/28/2024
2/28/2019 409 61
Crownpeak Technology, Inc.
707 17th Street, Floor 38
Denver, CO 80202
Media: Diversified
& Production
Senior Secured 7.94% (LIBOR + 6.25%, 1.00% Floor)
2/28/2024
2/28/2019 4,000 4,011
Delayed Draw(e)(l) 7.94% (LIBOR + 6.25%, 1.00% Floor)
2/28/2024
2/28/2019 333 60
Revolver(l) 7.94% (LIBOR + 6.25%, 1.00% Floor)
2/28/2024
2/28/2019 167
CSM Bakery Supplies, LLC
1912 Montreal Road W
Tucker, GA 30084
Beverage, Food & Tobacco Junior Secured 9.78% (LIBOR + 7.75%, 1.00% Floor)
7/5/2021
5/23/2013 5,792 5,538
Curion Holdings, LLC
3548 Route 9 South, 2nd Floor
Old Bridge, NJ 08857
Services: Business
Senior Secured(j) (m)
14.00% PIK(n)
5/2/2022
5/2/2017 4,226 3,279
Revolver(j)(l) 14.00% PIK(n)
5/2/2022
5/2/2017 478 441
Junior Secured(j)(m)
15.00% PIK(n)
1/2/2023
8/17/2018 1,720
Junior Secured(j)(m)
15.00% PIK(n)
1/2/2023
8/17/2018 44
Common stock (58,779 shares)(h)(j) (i)
8/17/2018 12.10%
Destination Media, Inc.
1070 Woodward Avenue
Detroit, MI 48226
Media: Advertising,
Printing &
Publishing
Senior Secured(m) 7.30% (LIBOR + 5.50%, 1.00% Floor)
4/7/2022
4/7/2017 4,725 4,772
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
4/7/2022
4/7/2017 542
Dude Solutions Holdings, Inc.
11000 Regency Pkwy, Suite 110
Cary, NC 27518
Construction & Building Senior Secured 8.80% (LIBOR + 7.00%, 1.00% Floor)
6/13/2025
6/14/2019 10,000 9,970
Revolver(l) 8.80% (LIBOR + 7.00%, 1.00% Floor)
6/13/2025
6/14/2019 1,304
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Echelon Funding I, LLC
1625 S. Congress Avenue
Delray Beach, FL 33445
Banking, Finance, Insurance & Real Estate Senior Secured(f) 9.28% (LIBOR + 7.50%, 0.50% Floor)
1/11/2021
12/31/2019 2,205 2,204
Delayed Draw (e)(f)(l)
9.19% (LIBOR + 7.50%, 0.50% Floor)
1/11/2021
2/24/2017 14,175 10,197
Education Corporation of America
1033 Skokie Boulevard, Suite 360
Northbrook, IL 60062
Services: Consumer
Junior Secured 7.46% Cash/ 5.50% PIK (LIBOR + 11.00%)(n)
3/31/2020
9/3/2015 833 774
Series G Preferred Stock (8,333 shares)(g)(h) 12.00% PIK(n)
9/3/2015 5,117 20.83%
Energy Services Group, LLC
141 Longwater Drive, Suite 113
Norwell, MA 02061
High Tech Industries Unitranche(f)(o)(p) 9.42% (LIBOR + 8.42%, 1.00% Floor)
5/4/2022
5/4/2017 4,979 4,965
Unitranche(p)
10.22% (LIBOR + 8.42%, 1.00% Floor)
5/4/2022
5/4/2017 4,170 4,154
Unitranche(p)
10.22% (LIBOR + 8.42%, 1.00% Floor)
5/4/2022
5/4/2017 1,187 1,182
Familia Dental Group Holdings, LLC
2050 East Algonquin Road, Suite 610
Schaumburg, IL 60173
Healthcare & Pharmaceuticals Senior Secured(m) 9.80% Cash/ 0.75%
PIK (LIBOR + 8.75%,
0.50% Floor)
4/8/2021
4/8/2016 5,019 4,726
Senior Secured 9.80% Cash/ 0.75%
PIK (LIBOR + 8.75%,
0.50% Floor)
4/8/2021
4/8/2016 483 455
Revolver(l) 9.80% Cash/ 0.75%
PIK (LIBOR + 8.75%,
0.50% Floor)
4/8/2021
4/8/2016 573 351
Forman Mills, Inc.
1070 Thomas Busch Memorial Highway
Pennsauken, NJ 08110
Retail Senior Secured(m) 9.30% Cash/ 2.00%
PIK (LIBOR + 9.50%,
1.00% Floor)
10/4/2021
10/4/2016 8,202 5,885
Hastings Manufacturing Company
325 N Hanover Street
Hastings, MI 49058
Automotive Senior Secured 10.05% (LIBOR + 8.25%, 1.00% Floor)
4/24/2023
4/24/2018 2,812 2,705
HaystackID LLC
Six Beacon Street, Suite 815
Boston, MA 02108
Services: Business Senior Secured 8.30% (LIBOR + 6.50%, 1.00% Floor)
1/12/2024
1/14/2019 4,950 4,965
Revolver(l) 8.30% (LIBOR + 6.50%, 1.00% Floor)
1/12/2024
1/14/2019 403 40
HFZ Capital Group, LLC
600 Madison Avenue, Fifteenth Floor
New York, NY 10022
Banking, Finance, Insurance & Real Estate Senior Secured(f) 12.10% (LIBOR +
10.00%, 1.00% Floor)
11/25/2020
10/20/2017 18,000 17,995
HFZ Member RB Portfolio LLC
600 Madison Avenue, Fifteenth Floor
New York, NY 10022
Banking, Finance, Insurance & Real Estate Senior Secured(f) 14.10% (LIBOR +
12.00%, 1.00% Floor)
10/29/2021
10/30/2018 9,780 9,765
Host Analytics, Inc.
555 Twin Dolphin Drive, Suite 400
Redwood City, CA 94065
High Tech Industries Senior Secured 7.69% (LIBOR + 6.00%, 1.00% Floor)
12/28/2023
12/28/2018 9,500 9,519
Revolver(l) 7.69% (LIBOR + 6.00%, 1.00% Floor)
12/28/2023
12/28/2018 442
Class A Units
(441,860 units)(g)(h)
(i)
12/28/2018 603 0.45%
HS4 Acquisitionco, Inc.
6504 Bridge Point Parkway, Suite 425
Austin, TX 78730
Services: Business Senior Secured 8.71% (LIBOR + 6.75%, 1.00% Floor)
7/9/2025
7/9/2019 10,050 10,010
Revolver(l) 8.54% (LIBOR + 6.75%, 1.00% Floor)
7/9/2025
7/9/2019 817 122
Incipio, LLC
3347 Michelson, Suite 100
Irvine, CA 92612
Consumer Goods: Non-Durable Unitranche(j)(p)(q) 10.41% PIK (LIBOR
+ 8.72%, 1.00%
Floor)(r)
8/22/2022
12/26/2014 14,573 12,343
Unitranche(j)(p)(s) 10.19% PIK (LIBOR
+ 8.50%, 1.00% Floor)
8/22/2022
3/9/2018 3,815 3,750
Unitranche(j)(p) 10.19% PIK (LIBOR
+ 8.50%, 1.00% Floor)
8/22/2022
7/6/2018 1,621 1,606
Unitranche(j)(p) 10.19% PIK (LIBOR
+ 8.50%, 1.00% Floor)
8/22/2022
4/17/2019 692 686
Junior Secured(j)(u) 10.70% PIK(n)
8/22/2022
6/18/2018 3,766
Junior Secured(j)(t) 10.70% PIK(n)
8/22/2022
6/18/2018 7,194
Series C
common units (1,774
shares)(h)(j)
(i)
7/6/2018 17.74%
20

TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Inland Pipe Rehabilitation LLC
1510 Klondike Road, Suite 400
Conyers, GA 30094
Construction & Building Unitranche(p) 7.46% (LIBOR + 5.50%, 1.00% Floor)
12/26/2024
12/27/2018 12,375 12,415
InMobi Pte, Ltd.
2951 28th Street, Suite 1000
Santa Monica, CA 90405
Media: Advertising,
Printing &
Publishing
Right to purchase 2.8% of the equity(f)(g)(h)(k) (i)
9/18/2025
9/18/2015 188
IT Global Holding LLC
222 W. Las Colinas Blvd, Suite 1650E
Irving, TX 75039
Services: Business Senior Secured 10.30% (LIBOR + 8.50%, 1.00% Floor)
11/10/2023
11/15/2018 10,237 10,160
Senior Secured 10.30% (LIBOR + 8.50%, 1.00% Floor)
11/10/2023
7/19/2019 3,816 3,787
Revolver 10.30% (LIBOR + 8.50%, 1.00% Floor)
11/10/2023
11/15/2018 875 875
Kaseya Traverse, Inc.
701 Brickell Avenue, Suite 400
Miami, FL 33131
Services: Business Senior Secured 7.72% Cash/ 1.00%
PIK (LIBOR + 6.50%,
1.00% Floor)
5/2/2025
5/3/2019 6,026 6,011
Delayed Draw(e)(l) 7.69% Cash/ 1.00%
PIK (LIBOR + 6.50%,
1.00% Floor)
5/2/2025
5/3/2019 723 94
Revolver(l) 8.30% (LIBOR + 6.50%, 1.00% Floor)
5/2/2025
5/3/2019 506 289
Kudu Investment Holdings, LLC
286 Madison Avenue, Suite 2002
New York, NY 10017
Banking, Finance, Insurance & Real Estate Senior Secured(f) 8.18% (LIBOR + 6.25%, 1.00% Floor)
12/23/2025
12/23/2019 5,500 5,404
Delayed Draw(e)(f)(l)
8.18% (LIBOR + 6.25%, 1.00% Floor)
12/23/2025
12/23/2019 3,667
Revolver(f)(l) 8.18% (LIBOR + 6.25%, 1.00% Floor)
12/23/2025
12/23/2019 482
Liftforward SPV II, LLC
180 Maiden Lane, 10th Floor
New York, NY 10038
Banking, Finance, Insurance & Real Estate Senior Secured(e)(f) 12.55% (LIBOR +
10.75%, 0.50% Floor)
11/10/2020
11/10/2016 3,240 3,240
LuLu’s Fashion Lounge, LLC
195 Humboldt Avenue
Chico, CA 95928
Retail Senior Secured 10.80% (LIBOR + 9.00%, 1.00% Floor)
8/29/2022
8/21/2017 4,156 4,073
Luxury Optical Holdings Co.
260 West 39th Street – 12th Floor
New York, NY 10018
Retail Senior Secured(j) 9.80% PIK (LIBOR +
8.00%, 1.00% Floor)(n)
9/30/2020
9/12/2014 4,953 3,457
Delayed Draw(e)(j) 13.30% (LIBOR + 11.50%, 1.00% Floor)(n)
9/30/2020
9/29/2017 624 620
Revolver(j) 9.80% PIK (LIBOR +
8.00%, 1.00% Floor)(n)
9/30/2020
9/12/2014 228 159
Common stock (86 shares)(h)(j) (i)
9/29/2017 9.56%
Madison Logic, Inc.
257 Park Avenue South, 5th Floor
New York, NY 10010
Services: Business Senior Secured(m) 9.80% (LIBOR + 8.00%, 0.50% Floor)
11/30/2021
11/30/2016 9,621 9,621
Revolver(l) 9.80% (LIBOR + 8.00%, 0.50% Floor)
11/30/2021
11/30/2016 988
Magneto & Diesel Acquisition, Inc.
7902 FM 1960 Bypass Rd. W.
Humble, Texas 77338
Automotive Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
12/18/2023
12/18/2018 4,950 4,957
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
12/18/2023
12/18/2018 500 125
Mammoth Holdings, LLC
1380 West Paces Ferry Road NW Suite 2160
Atlanta, GA 30327
Services: Consumer
Senior Secured 8.10% (LIBOR + 6.00%, 1.00% Floor)
10/16/2023
10/16/2018 1,980 1,984
Senior Secured 7.79% (LIBOR + 6.00%, 1.00% Floor)
10/16/2023
10/16/2018 4,156 4,165
Revolver(l) 8.10% (LIBOR + 6.00%, 1.00% Floor)
10/16/2023
10/16/2018 500
MC Sign Lessor Corp.
8959 Tyler Boulevard
Mentor, OH 44060
Media: Advertising,
Printing &
Publishing
Senior Secured 8.69% (LIBOR + 7.00%, 1.00% Floor)
8/30/2024
12/22/2017 15,720 15,674
Revolver(l) 8.69% (LIBOR + 7.00%, 1.00% Floor)
8/30/2024
12/22/2017 3,490 1,047
Common units (686
units)(g)(h)
(i)
8/30/2019 864 0.85%
MFG Chemical, LLC
1804 Kimberly Park Drive
Dalton, GA 30720
Chemicals, Plastics
& Rubber
Unitranche(m)(p) 7.80% (LIBOR + 6.00%, 0.50% Floor)
6/23/2022
6/23/2017 10,477 10,173
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Unitranche(p) 7.80% (LIBOR + 6.00%, 0.50% Floor)
6/23/2022
3/15/2018 1,121 1,088
Micro Holdings Corp.
909 N. Sepulveda Boulevard, 11th Floor
El Segundo, CA 90245
High Tech Industries Junior Secured 9.30% (LIBOR + 7.50%)
8/18/2025
8/16/2017 3,000 3,009
Midwest Composite Technologies, LLC
1050 Walnut Ridge Drive
Hartland, WI 53029
Chemicals, Plastics
& Rubber
Senior Secured(m) 8.30% (LIBOR + 6.50%, 1.00% Floor)
8/31/2023
12/2/2019 14,962 14,980
Senior Secured 8.30% (LIBOR + 6.50%, 1.00% Floor)
8/31/2023
8/31/2018 889 890
Delayed Draw(e)(l) 8.30% (LIBOR + 6.50%, 1.00% Floor)
8/31/2023
8/31/2018 510 60
Revolver(l) 8.30% (LIBOR + 6.50%, 1.00% Floor)
8/31/2023
8/31/2018 90
Mindbody, Inc.
4051 Broad Street, Suite 220
San Luis Obispo, CA 93401
High Tech Industries Senior Secured 8.79% (LIBOR + 7.00%, 1.00% Floor)
2/14/2025
2/15/2019 6,333 6,311
Revolver(l) 8.79% (LIBOR + 7.00%, 1.00% Floor)
2/14/2025
2/15/2019 667
Mnine Holdings, Inc.
12000 Biscayne Boulevard, Suite 600
Miami, FL 33181
High Tech Industries Unitranche(p) 12.50% (PRIME + 7.75%, 1.00% Floor)
11/2/2023
11/2/2018 7,940 7,919
MRCC Senior Loan Fund I, LLC
311 South Wacker Drive, Suite 6400
Chicago, IL 60606
Investment Funds &
Vehicles
LLC Equity Interest
(50.0% of the equity
interest)(f)(h)(v)
10/31/2017 42,412 50.00%
Nearly Natural, Inc.
695 E 10th Avenue
Hialeah, FL 33010
Wholesale Senior Secured(m) 8.96% (LIBOR + 7.00%, 1.00% Floor)
12/15/2022
12/15/2017 6,860 6,771
Delayed Draw(e)(l)(m) 8.96% (LIBOR + 7.00%, 1.00% Floor)
12/15/2022
8/28/2019 1,924 344
Revolver(l) 8.96% (LIBOR + 7.00%, 1.00% Floor)
12/15/2022
12/15/2017 1,522 761
Class A Units
(152,174 units)(g)(h)
(i)
12/15/2017 148 0.44%
New England College of Business and Finance, LLC
1033 Skokie Boulevard, Suite 360
Northbrook, IL 60062
Services: Consumer
Revolver(j)(l) 12.69% (LIBOR +
11.00%, 1.00% Floor)
6/30/2021
6/25/2019 1,275 1,148
LLC Units
(1,458,332 units)(h)(j)
(i)
6/21/2019 318 20.83%
Newforma, Inc.
1750 Elm Street
Manchester, NH 03104
High Tech Industries Senior Secured(m) 7.46% (LIBOR + 5.50%, 1.00% Floor)
6/30/2022
6/30/2017 13,251 13,251
Revolver(l) 7.46% (LIBOR + 5.50%, 1.00% Floor)
6/30/2022
6/30/2017 1,250
Nova Wildcat Amerock, LLC
10115 Kincey Avenue, Suite 210
Huntersville, NC 28078
Consumer Goods: Durable Senior Secured 7.55% (LIBOR + 5.75%, 1.00% Floor)
10/12/2023
10/12/2018 9,182 9,138
Revolver(l) 7.55% (LIBOR + 5.75%, 1.00% Floor)
10/12/2023
10/12/2018 931
Parterre Flooring & Surface
Systems, LLC
500 Research Drive
Wilmington, MA 01887
Consumer Goods: Durable Senior Secured(m) 10.80% (LIBOR + 9.00%, 1.00% Floor)
8/22/2022
8/22/2017 8,550 7,486
Revolver 10.80% (LIBOR + 9.00%, 1.00% Floor)
8/22/2022
8/22/2017 696 609
PeopleConnect Intermediate, LLC
1501 4th Avenue, Suite 400
Seattle, WA 98101
Services: Consumer
Senior Secured 8.45% (LIBOR + 6.50%, 1.00% Floor)
7/1/2020
7/1/2015 4,030 4,030
Senior Secured 14.45% (LIBOR +
12.50%, 1.00% Floor)
7/1/2020
7/1/2015 4,515 4,515
Revolver(l) 11.45% (LIBOR + 9.50%, 1.00% Floor)
7/1/2020
7/1/2015 236
PKS Holdings, LLC
18 Corporate Woods Blvd.
Albany, NY 12211
Banking, Finance, Insurance & Real Estate Senior Secured(f) 15.94% (LIBOR +
14.25%, 0.50% Floor)
11/30/2022
11/30/2017 1,645 1,656
Revolver(f)(l) 15.94% (LIBOR +
14.25%, 0.50% Floor)
11/30/2022
11/30/2017 80
Warrant to purchase
up to 0.8% of the
equity(f)(g)(h)
(i)
11/30/2027
11/30/2017 14
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Priority Ambulance, LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Healthcare & Pharmaceuticals Unitranche(p)(w) 8.46% (LIBOR + 6.50%, 1.00% Floor)
4/12/2022
7/18/2018 10,015 10,015
Unitranche(p)(x) 8.46% (LIBOR + 6.50%, 1.00% Floor)
4/12/2022
4/12/2017 1,253 1,256
Delayed Draw(e)(l) 8.46% (LIBOR + 6.50%, 1.00% Floor)
4/12/2022
12/13/2018 2,480 691
Prototek Sheetmetal Fabrication, LLC
244 Burnham Intervale Rd
Contoocook, NH 03229
High Tech Industries Senior Secured 9.30% (LIBOR + 7.50%, 1.00% Floor)
12/12/2022
12/11/2017 3,360 3,335
Senior Secured 9.30% (LIBOR + 7.50%, 1.00% Floor)
12/12/2022
6/27/2019 1,596 1,584
Senior Secured 9.30% (LIBOR + 7.50%, 1.00% Floor)
12/12/2022
12/11/2017 2,295 2,277
Revolver(l) 9.30% (LIBOR + 7.50%, 1.00% Floor)
12/12/2022
12/11/2017 233
Quirch Foods Holdings, LLC
2701 South Le Jeune Road, 12th Floor
Coral Gables, FL 33134
Consumer Goods: Non-Durable Senior Secured 7.79% (LIBOR + 6.00%)
12/19/2025
2/14/2019 1,980 1,980
Recorded Future, Inc.
363 Highland Avenue
Somerville, MA 02144
High Tech Industries Senior Secured 8.55% (LIBOR + 6.75%, 1.00% Floor)
7/3/2025
7/3/2019 7,333 7,331
Delayed Draw(e)(l)
8.55% (LIBOR + 6.75%, 1.00% Floor)
7/3/2025
7/3/2019 587
Revolver(l) 8.55% (LIBOR + 6.75%, 1.00% Floor)
7/3/2025
7/3/2019 880
Class A Units
(80,080 units)(g)(h)(y)
(i)
7/3/2019 84
RedZone Robotics, Inc.
91 43rd Street Suite 250
Pittsburgh, PA 15201
Services: Business Senior Secured 8.55% Cash/ 2.00%
PIK (LIBOR + 8.75%,
1.00% Floor)
6/5/2023
6/1/2018 646 596
Revolver(l) 8.55% (LIBOR + 6.75%, 1.00% Floor)
6/5/2023
6/1/2018 158
Rockdale Blackhawk, LLC
1700 Brazos Avenue
Rockdale, TX 76567
Healthcare & Pharmaceuticals Senior Secured 15.10%
n/a(z)
8/30/2018 198 198
Senior Secured 15.10%
n/a(z)
8/6/2018 8,877 10,169
Senior Secured 14.80% (LIBOR + 13.00%, 1.00% Floor)(n)
3/31/2020
3/31/2015 10,923 19,171
RPL Bidco Limited
67-74 Saffron Hill
London, England, EC1N 8QX
High Tech Industries Senior Secured(f)(k)(o) 8.28% (LIBOR + 7.50%)
11/9/2023
11/9/2017 14,225 14,225
Senior Secured(f)(k)(o) 8.28% (LIBOR + 7.50%)
11/9/2023
5/22/2018 1,723 1,723
Revolver(f)(k)(l)(o) 8.28% (LIBOR + 7.50%)
11/9/2023
11/9/2017 530
RugsUSA, LLC
8 Santa Fe Way
Cranbury, NJ 08512
Consumer Goods: Durable Unitranche(p) 8.45% (LIBOR + 6.50%, 1.00% Floor)
4/28/2023
5/2/2018 4,000 4,004
Security Services Acquisition Sub Corp.
90 Town Center Street, Suite 202
Daleville, VA 24083
Services: Business
Delayed Draw(e)(l)(m)
7.74% (LIBOR + 6.00%, 1.00% Floor)
2/15/2024
2/15/2019 2,491 1,765
Delayed Draw(e)(l)(m)
7.74% (LIBOR + 6.00%, 1.00% Floor)
2/15/2024
2/15/2019 2,186 1,067
Senior Secured(m) 7.74% (LIBOR + 6.00%, 1.00% Floor)
2/15/2024
2/15/2019 3,474 3,479
Revolver(l) 7.74% (LIBOR + 6.00%, 1.00% Floor)
2/15/2024
2/15/2019 1,563 104
SHI Holdings, Inc.
620 Newport Center Drive, 8th Floor
Newport Beach, CA 92660
Healthcare & Pharmaceuticals
Senior Secured(j)(m)
12.05% PIK (LIBOR
+ 10.25%)
12/31/2020
7/10/2014 2,899 2,459
Revolver(j)(l) 12.05% PIK (LIBOR
+ 10.25%)
12/31/2020
7/10/2014 4,667 3,601
Common stock (24 shares)(h)(j) (i)
12/14/2016 19.09%
StormTrap, LLC
1287 Windham Parkway
Romeoville, IL 60446
Environmental Industries Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
12/8/2023
12/10/2018 7,920 7,609
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
12/8/2023
12/10/2018 432
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Summit Container Corporation
17 South Middlesex Ave
Monroe Township, NJ 08831
Containers,
Packaging & Glass
Senior Secured(j)(m)
9.80% (LIBOR + 8.00%, 1.00% Floor)
1/6/2021
12/5/2013 3,259 2,971
Revolver(j)(l)(m) 9.80% (LIBOR + 8.00%, 1.00% Floor)
1/6/2021
6/15/2018 7,300 5,406
Warrant to purchase
up to 19.5% of the
equity(h)(j)
(i)
1/6/2024
1/6/2014
Synergy Environmental Corporation
369-399 Old Water Works Rd
Old Bridge, NJ 08857
Environmental Industries Senior Secured(m) 9.80% (LIBOR + 8.00%, 0.50% Floor)
9/30/2021
4/29/2016 2,893 2,884
Senior Secured(m) 9.80% (LIBOR + 8.00%, 0.50% Floor)
9/30/2021
4/29/2016 484 482
Senior Secured 9.80% (LIBOR + 8.00%, 0.50% Floor)
9/30/2021
4/29/2016 827 824
Revolver(l) 9.80% (LIBOR + 8.00%, 0.50% Floor)
9/30/2021
4/29/2016 671 202
TCP-NG (U.S.), LLC
649 San Ramon Valley Blvd
Danville, CA 94526
Banking, Finance, Insurance & Real Estate Senior Secured(f) 9.21% (LIBOR + 7.25%, 1.50% Floor)
8/22/2024
8/23/2019 2,925 2,919
Revolver(f)(l) 9.21% (LIBOR + 7.25%, 1.50% Floor)
8/22/2024
8/23/2019 180
The Octave Music Group, Inc.
850 Third Avenue, Suite 15C
New York, NY 10022
Media: Diversified
& Production
Junior Secured 9.95% (LIBOR + 8.25%, 1.00% Floor)
5/27/2022
5/29/2015 4,355 4,355
The Tie Bar Operating Company, LLC
123 Ambassador Drive, Suite 123
Naperville, IL 60540
Retail Class A Preferred Units (1,275 units)(g)(h)
6/25/2013 63 0.26%
Class B Preferred Units (1,275 units)(g)(h)
6/25/2013 0.26%
The Worth Collection, Ltd.
520 Eighth Avenue, 23rd Floor
New York, NY 10018
Retail Senior Secured(m) 6.05% Cash/ 4.25%
PIK (LIBOR + 8.50%,
0.50% Floor)(n)
9/29/2021
9/29/2016 10,587 1,034
Toojay’s Management LLC
3654 Georgia Avenue
West Palm Beach, FL 33405
Beverage, Food & Tobacco Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
10/26/2022
10/26/2018 3,465 3,472
Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
10/26/2022
10/26/2018 476 476
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
10/26/2022
10/26/2018 318 238
TRP Construction Group, LLC
2213 Moneda Street
Haltom City, TX 76117
Services: Business Senior Secured(m) 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/5/2022
10/5/2017 7,863 7,815
Senior Secured 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/5/2022
9/5/2018 6,682 6,642
Revolver(l) 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/5/2022
10/5/2017 2,133
Valudor Products LLC
11260 EL Camino Real, Suite 210
San Diego, CA 92130
Chemicals, Plastics
& Rubber
Senior Secured 9.30% (LIBOR + 7.50%, 1.00% Floor)
6/19/2023
6/18/2018 1,563 1,522
Senior Secured(aa) 9.30% (LIBOR + 7.50%, 1.00% Floor)
6/19/2023
6/18/2018 211 205
Revolver(l) 11.30% (LIBOR + 9.50%, 1.00% Floor)
6/19/2023
6/18/2018 818 318
Class A-1 Units
(501,014 Units)(g)(h)
10.00% PIK
6/18/2018 273 5.27%
Vice Group Holding, Inc.
49 S 2nd St
Brooklyn, NY 11211
Media: Broadcasting & Subscription Senior Secured 5.92% Cash/ 8.00%
PIK (LIBOR +
12.00%, 1.50% Floor)
11/2/2022
5/2/2019 1,250 1,251
Senior Secured 5.92% Cash/ 8.00%
PIK (LIBOR +
12.00%, 1.50% Floor)
11/2/2022
11/4/2019 240 240
Delayed Draw(e)(l) 13.92% (LIBOR +
12.00%, 1.50% Floor)
11/2/2022
5/2/2019 400
Delayed Draw(e)(l) 13.92% (LIBOR +
12.00%, 1.50% Floor)
11/2/2022
5/2/2019 160
VPS Holdings, LLC
30012 Ivy Glenn Drive, Suite 210
Laguna Niguel, CA 92677
Services: Business Senior Secured 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/4/2024
10/5/2018 4,537 4,448
Senior Secured 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/4/2024
10/5/2018 3,700 3,627
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TABLE OF CONTENTS
Name and Address of Portfolio Company(a)
Industry
Type of
Investment
Interest Rate(b)
Maturity
Date
Acquisition
Date (c)
Principal
Due at
Maturity
Fair Value of
Investment(d)
Percentage
of
Class Held
(in thousands)
Revolver(l) 8.80% (LIBOR + 7.00%, 1.00% Floor)
10/4/2024
10/5/2018 1,000 100
WillowTree, LLC
107 5th Street Southeast, Suite B
Charlottesville, VA 22902
High Tech Industries Senior Secured 7.30% (LIBOR + 5.50%, 1.00% Floor)
10/9/2023
10/9/2018 7,900 7,916
Revolver(l) 7.30% (LIBOR + 5.50%, 1.00% Floor)
10/9/2023
10/9/2018 1,000 945
(a)
All of our investments are issued by eligible portfolio companies, as defined in the Investment Company Act of 1940 (the “1940 Act”), unless otherwise noted. All of our investments are issued by U.S. portfolio companies unless otherwise noted.
(b)
The majority of the investments bear interest at a rate that may be determined by reference to the London Interbank Offered Rate (“LIBOR” or “L”) or Prime Rate (“Prime” or “P”), which reset daily, monthly, quarterly, or semiannually. For each such investment, the Company has provided the spread over LIBOR or Prime and the current contractual interest rate in effect at December 31, 2019. Certain investments are subject to a LIBOR or Prime interest rate floor, or rate cap.
(c)
Except as otherwise noted, all of the Company’s portfolio company investments, which as of December 31, 2019 represented 247.1% of the Company’s net assets or 94.1% of the Company’s total assets, are subject to legal restrictions on sales.
(d)
Because there is no readily available market value for these investments, the fair value of these investments is determined in good faith using significant unobservable inputs by our board of directors as required by the Investment Company Act of 1940. (See Note 4 in the accompanying notes to the consolidated financial statements.)
(e)
This delayed draw loan requires that certain financial covenants be met by the portfolio company prior to any fundings.
(f)
This investment is treated as a non-qualifying investment under Section 55(a) of the 1940 Act. Under the 1940 Act, the Company may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of the Company’s total assets. As of December 31, 2019, non-qualifying assets totaled 19.6% of the Company’s total assets.
(g)
Represents less than 5% ownership of the portfolio company’s voting securities.
(h)
Ownership of certain equity investments may occur through a holding company or partnership.
(i)
Represents a non-income producing security.
(j)
As defined in the 1940 Act, the Company is deemed to be an “Affiliated Person” of the portfolio company as it owns 5% or more of the portfolio company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was an Affiliated Person (but not a portfolio company that the Company is deemed to control).
(k)
This is an international company.
(l)
All or a portion of this commitment was unfunded at December 31, 2019. As such, interest is earned only on the funded portion of this commitment.
(m)
All of this loan is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(n)
This position was on non-accrual status as of December 31, 2019, meaning that the Company has ceased accruing interest income on the position. See Note 2 in the accompanying notes to the consolidated financial statements for additional information on the Company’s accounting policies.
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TABLE OF CONTENTS
(o)
This loan is denominated in Great Britain pounds and is translated into U.S. dollars as of the valuation date.
(p)
The Company structures its unitranche secured loans as senior secured loans. The Company obtains security interests in the assets of these portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first-priority liens on the assets of a portfolio company. Generally, the Company syndicates a “first out” portion of the loan to an investor and retains a “last out” portion of the loan, in which case the “first out” portion of the loan will generally receive priority with respect to payments of principal, interest and any other amounts due thereunder. Unitranche structures combine characteristics of traditional first lien senior secured as well as second lien and subordinated loans and the Company’s unitranche secured loans will expose the Company to the risks associated with second lien and subordinated loans and may limit the Company’s recourse or ability to recover collateral upon a portfolio company’s bankruptcy. Unitranche secured loans typically provide for moderate loan amortization in the initial years of the facility, with the majority of the amortization deferred until loan maturity. Unitranche secured loans generally allow the borrower to make a large lump sum payment of principal at the end of the loan term, and there is a risk of loss if the borrower is unable to pay the lump sum or refinance the amount owed at maturity. In many cases the Company, together with its affiliates, are the sole or majority lender of these unitranche secured loans, which can afford the Company additional influence with a borrower in terms of monitoring and, if necessary, remediation in the event of underperformance.
(q)
A portion of this loan (principal of $5,343) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(r)
The PIK portion of the interest rate for Incipio Technologies, Inc. is structured as a fee paid upon the termination of the commitment. The fee currently accrues at 0.22% per annum.
(s)
A portion of this loan (principal of $48) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(t)
A portion of this loan (principal of $1,015) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(u)
A portion of this loan (principal of $1,938) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(v)
As defined in the 1940 Act, the Company is deemed to be both an “Affiliated Person” of and to “Control” this portfolio company as it owns more than 25% in company’s voting securities. See Note 5 in the accompanying notes to the consolidated financial statements for additional information on transactions in which the issuer was both an Affiliated Person and a portfolio company that the Company is deemed to Control.
(w)
A portion of this loan (principal of $9,258) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(x)
A portion of this loan (principal of $525) is held in the Company’s wholly-owned subsidiary, Monroe Capital Corporation SBIC, LP, and is therefore not collateral to the Company’s revolving credit facility.
(y)
As of December 31, 2019, the Company was party to a subscription agreement with a commitment to fund an additional equity investment of $16.
(z)
This is a demand note with no stated maturity.
(aa)
This investment represents a note convertible to preferred shares of the borrower.
n/a — not applicable
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TABLE OF CONTENTS
PORTFOLIO MANAGEMENT
Investment Committee
The investment committee of MC Advisors responsible for our investments meets regularly to consider our investments, direct our strategic initiatives and supervise the actions taken by MC Advisors on our behalf. In addition, the investment committee reviews and determines whether to make prospective investments identified by MC Advisors and monitors the performance of our investment portfolio. The investment committee consists of Theodore L. Koenig, Aaron D. Peck, Michael J. Egan and Jeremy T. VanDerMeid.
Information regarding members of MC Advisors’ investment committee who are not also our directors is as follows:
Michael J. Egan has more than 35 years of experience in commercial finance, credit administration and banking. Mr. Egan joined Monroe Capital in 2004 and is responsible for credit policies and procedures along with portfolio and asset management. Mr. Egan also served as Executive Vice President and Chief Credit Officer of Hilco Capital from 1999 to 2004. Prior to joining Hilco Capital LP, Mr. Egan was with The CIT Group/Business Credit, Inc. for a ten-year period beginning in 1989, where he served as Senior Vice President and Regional Manager for the Midwest U.S. Region responsible for all credit, new business and operational functions. Prior to joining The CIT Group, Mr. Egan was a commercial lending officer with The National Community Bank of New Jersey (The Bank of New York) and a credit analyst with KeyCorp, where he completed a formal management and credit training program.
Jeremy T. VanDerMeid has more than 20 years of lending and corporate finance experience and is responsible for portfolio management, capital markets and all trading functions for Monroe Capital. Prior to joining Monroe Capital in 2007, Mr. VanDerMeid was with Morgan Stanley Investment Management in the Van Kampen Senior Loan Group. Mr. VanDerMeid managed a portfolio of bank loans for Van Kampen and also led the firm’s initiative to increase its presence with middle-market lenders and private equity firms. Prior to his work at Morgan Stanley, he worked for Dymas Capital and Heller Financial where he originated, underwrote, and managed various middle-market debt transactions.
Portfolio Management
Each investment opportunity requires the consensus and receives the unanimous approval of MC Advisors’ investment committee. Follow-on investments in existing portfolio companies require the investment committee’s approval beyond that obtained when the initial investment in the company was made. In addition, the investment committee oversees any temporary investments, such as those in cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less. The day-to-day management of investments approved by the investment committee is overseen by the investment committee.
Each of Messrs. Koenig, Peck, Egan and VanDerMeid has ownership and financial interests in, and may receive compensation and/or profit distributions from, MC Advisors. None of Messrs. Koenig, Peck, Egan and VanDerMeid receives any direct compensation from us.
The table below shows the dollar range of shares of our common stock beneficially owned by each member of the investment committee of MC Advisors responsible for our investments as of the end of our most recently completed fiscal year.
Investment Committee of MC Advisors
Dollar Range of Equity Securities
in Monroe Capital Corporation(1)(2)
Theodore L. Koenig
over $1,000,000
Aaron D. Peck
$100,001 –  $500,000
Michael J. Egan
$100,001 –  $500,000
Jeremy T. VanDerMeid
$50,001 – $100,000
(1)
Dollar ranges are as follows: None, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000, $100,001 – $500,000, $500,001 – $1,000,000 or over $1,000,000.
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(2)
The dollar range of equity securities beneficially owned by the members of our investment committee is based on a closing stock price of $10.86 per share as of December 31, 2019.
Messrs. Koenig, Peck, Egan and VanDerMeid, through their roles with Monroe Capital, are also primarily responsible for the day-to-day management of 19 other pooled investment vehicles, a private BDC and nine other accounts in which their affiliates may receive incentive fees, with a total amount of approximately $9.2 billion of capital under management as of January 1, 2020.
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TABLE OF CONTENTS
MANAGEMENT AND OTHER AGREEMENTS
We are externally managed by MC Advisors, an affiliate of ours, pursuant to the Investment Advisory Agreement and another of our affiliates, MC Management, provides administrative services to us pursuant to an Administration Agreement. Each of MC Advisors and MC Management are privately-held companies that are indirectly owned and controlled by Theodore L. Koenig, our chairman and chief executive officer. The management services and fees in effect under the Investment Advisory Agreement and the administrative services under the Administration Agreement are described further below. In addition, we pay our direct expenses including, but not limited to, directors’ fees, legal and accounting fees and stockholder related expenses under the Investment Advisory Agreement.
The principal executive office of MC Advisors and MC Management is 311 South Wacker Drive, Suite 6400, Chicago, Illinois 60606.
Investment Advisory Agreement
MC Advisors is a registered investment adviser under the Advisers Act. Subject to the overall supervision of our board of directors and in accordance with the 1940 Act, MC Advisors manages our day-to-day operations and provides investment advisory services to us. Under the terms of the Investment Advisory Agreement, MC Advisors:

determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;

assists us in determining what securities we purchase, retain or sell;

identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and

executes, closes, services and monitors the investments we make.
MC Advisors’ services under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.
Management and Incentive Fee
Under the Investment Advisory Agreement with MC Advisors and subject to the overall supervision of our board of directors, MC Advisors provides investment advisory services to us. For providing these services, MC Advisors receives a fee from us, consisting of two components — a base management fee and an incentive fee.
On November 4, 2019, our board of directors approved a change to the Investment Advisory Agreement to amend the base management fee structure. Effective July 1, 2019, the base management fee is calculated initially at an annual rate equal to 1.75% of average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage); provided, however, the base management fee is calculated at an annual rate equal to 1.00% of our average invested assets (calculated as total assets excluding cash, which includes assets financed using leverage) that exceeds the product of (i) 200% and (ii) our average net assets. For the avoidance of doubt, the 200% is calculated in accordance with the asset coverage limitation as defined in the 1940 Act to give effect to our exemptive relief with respect to MRCC SBIC’s SBA debentures. This change has the effect of reducing our base management fee rate on assets in excess of regulatory leverage of 1:1 debt to equity to 1.00% per annum. The base management fee is payable quarterly in arrears.
Prior to July 1, 2019, the base management fee was calculated at an annual rate equal to 1.75% of average invested assets (calculated as total assets excluding cash, which included assets financed using leverage) and was payable quarterly in arrears.
The incentive fee consists of two parts. The first part is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the preceding quarter subject to a total return requirement. 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 and consulting
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fees or other fees that we receive from portfolio companies but excluding fees for providing managerial assistance) accrued during the calendar quarter, minus operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense and dividends paid on any 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 market discount, debt instruments with PIK interest, preferred stock with PIK dividends and zero-coupon securities, accrued income that we have not yet received in cash. MC Advisors is not under any obligation to reimburse us for any part of the incentive fee it received that was based on accrued interest that we never actually receive.
The foregoing incentive fee is subject to a total return requirement, which provides that no incentive fee in respect of our pre-incentive fee net investment income will be payable except to the extent 20.0% of the cumulative net increase in net assets resulting from operations over the then-current and 11 preceding quarters exceeds the cumulative incentive fees accrued and/or paid for the 11 preceding quarters (the “Incentive Fee Limitation”). Therefore, any ordinary income incentive fee that is payable in a calendar quarter will be limited to the lesser of (i) 20% of the amount by which our pre-incentive fee net investment income for such calendar quarter exceeds the 2% hurdle described below, subject to the “catch-up” provision, and (ii) (x) 20% of the cumulative net increase in net assets resulting from operations for the then current and 11 preceding calendar quarters minus (y) the cumulative incentive fees accrued and/or paid for the 11 preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is