UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2018

 

¨      Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission
File Number
  Exact name of registrant as specified in its charter, 
address of principal executive office, telephone number and
state or other jurisdiction of incorporation or organization
  I.R.S. Employer
Identification Number
814-01022  

Capitala Finance Corp.

4201 Congress St., Suite 360

Charlotte, North Carolina

Telephone: (704) 376-5502

State of Incorporation: Maryland

  90-0945675

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

  Capitala Finance Corp. Yes   x No   ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 

  Capitala Finance Corp. Yes   ¨ No   ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Capitala Finance Corp. Large accelerated filer   ¨ Accelerated filer x
         
  Non-accelerated filer ¨ Smaller reporting company ¨
         
      Emerging growth company   x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.           ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

  Capitala Finance Corp. Yes  ¨ No   x

 

 

The number of shares of Capitala Finance Corp.’s common stock, $0.01 par value, outstanding as of August 3, 2018 was 16,001,205.

  

 

 

 

 

  

TABLE OF CONTENTS

 

      Page
       
PART I. FINANCIAL INFORMATION   3
       
Item 1. Consolidated Financial Statements   3
       
  Consolidated Statements of Assets and Liabilities as of June 30, 2018 (unaudited) and December 31, 2017   3
       
  Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)   4
       
  Consolidated Statements of Changes in Net Assets for the six months ended June 30, 2018 and 2017 (unaudited)   5
       
  Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)   6
       
  Consolidated Schedules of Investments as of June 30, 2018 (unaudited) and December 31, 2017   7
       
  Notes to Consolidated Financial Statements as of June 30, 2018 (unaudited)   22
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   52
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   72
       
Item 4. Controls and Procedures   73
       
PART II. OTHER INFORMATION   73
       
Item 1. Legal Proceedings   73
       
Item 1A. Risk Factors   74
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   74
       
Item 3. Defaults Upon Senior Securities   74
       
Item 4. Mine Safety Disclosures   74
       
Item 5. Other Information   74
       
Item 6. Exhibits   75
     
Signatures   76

 

 2 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Capitala Finance Corp.

 

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

   As of 
   June 30, 2018   December 31, 2017 
   (unaudited)     
ASSETS        
Investments at fair value          
Non-control/non-affiliate investments (amortized cost of $236,344 and $298,132, respectively)  $253,813   $288,374 
Affiliate investments (amortized cost of $98,046 and $77,336, respectively)   118,664    103,957 
Control investments (amortized cost of $92,357 and $89,559, respectively)   110,784    107,608 
Total investments at fair value (amortized cost of $426,747 and $465,027, respectively)   483,261    499,939 
Cash and cash equivalents   40,826    31,221 
Interest and dividend receivable   3,420    2,976 
Due from related parties   -    95 
Prepaid expenses   260    309 
Deferred tax asset, net   6    - 
Other assets   84    55 
Total assets  $527,857   $534,595 
           
LIABILITIES          
SBA debentures (net of deferred financing costs of $1,995 and $2,300, respectively)  $168,705   $168,400 
2022 Notes (net of deferred financing costs of $2,245 and $2,496, respectively)   72,755    72,504 
2022 Convertible Notes (net of deferred financing costs of $1,423 and $1,583, respectively)   50,665    50,505 
Credit Facility (net of deferred financing costs of $1,078 and $1,293, respectively)   3,922    7,707 
Management and incentive fees payable   2,560    2,172 
Interest and financing fees payable   3,111    3,141 
Trade settlement payable   -    175 
Deferred tax liability, net   -    1,289 
Written call option at fair value (proceeds of $20 and $20, respectively)   6,815    6,815 
Accounts payable and accrued expenses   7    - 
Total liabilities  $308,540   $312,708 
           
Commitments and contingencies (Note 2)          
           
NET ASSETS          
Common stock, par value $.01, 100,000,000 common shares authorized, 15,994,690 and 15,951,231 common shares issued and outstanding, respectively  $160   $160 
Additional paid in capital   241,350    241,027 
Undistributed net investment income   16,541    15,854 
Accumulated net realized losses from investments   (88,459)   (61,982)
Net unrealized appreciation on investments, net of deferred taxes   56,520    33,623 
Net unrealized depreciation on written call option   (6,795)   (6,795)
Total net assets  $219,317   $221,887 
Total liabilities and net assets  $527,857   $534,595 
           
Net asset value per share  $13.71   $13.91 

 

See accompanying notes to consolidated financial statements.

 

 3 

 

 

Capitala Finance Corp.

 

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

 

   For the Three Months Ended June 30   For the Six Months Ended June 30 
   2018   2017   2018   2017 
INVESTMENT INCOME                    
Interest and fee income:                    
Non-control/non-affiliate investments  $6,867   $7,405   $14,223   $17,043 
Affiliate investments   2,077    1,112    4,018    2,156 
Control investments   1,838    1,583    3,687    3,571 
Total interest and fee income   10,782    10,100    21,928    22,770 
Payment-in-kind interest and dividend income:                    
Non-control/non-affiliate investments   427    1,530    1,132    2,708 
Affiliate investments   289    411    775    642 
Control investments   254    162    420    408 
Total payment-in-kind interest and dividend income   970    2,103    2,327    3,758 
Dividend income:                    
Non-control/non-affiliate investments   59    -    59    168 
Affiliate investments   29    29    58    58 
Control investments   25    25    50    305 
Total dividend income   113    54    167    531 
Other income   -    77    -    77 
Interest income from cash and cash equivalents   17    28    32    41 
Total investment income   11,882    12,362    24,454    27,177 
                     
EXPENSES                    
Interest and financing expenses   4,331    5,488    8,695    10,141 
Loss on extinguishment of debt   -    2,732    -    2,732 
Base management fee   2,314    2,505    4,617    5,019 
Incentive fees   -    -    244    1,308 
General and administrative expenses   1,006    934    2,229    2,041 
Expenses before incentive fee waiver   7,651    11,659    15,785    21,241 
Incentive fee waiver (See Note 6)   -    -    -    (958)
Total expenses, net of fee waivers   7,651    11,659    15,785    20,283 
                     
NET INVESTMENT INCOME   4,231    703    8,669    6,894 
                     
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND WRITTEN CALL OPTION:                    
Net realized gain (loss) from investments:                    
Non-control/non-affiliate investments   (21,115)   214    (25,694)   5,045 
Affiliate investments   139    4,473    863    4,489 
Control investments   (1,646)   -    (1,646)   - 
Net realized gain (loss) from investments   (22,622)   4,687    (26,477)   9,534 
Net unrealized appreciation (depreciation) on investments:                    
Non-control/non-affiliate investments   25,093    (6,454)   27,227    (12,849)
Affiliate investments   (5,227)   746    (6,003)   972 
Control investments   2,128    (4,280)   378    (2,782)
Net unrealized appreciation (depreciation) on investments   21,994    (9,988)   21,602    (14,659)
Net unrealized depreciation on written call option   -    (927)   -    (2,412)
Net realized and unrealized loss on investments and written call option   (628)   (6,228)   (4,875)   (7,537)
Tax benefit   1,345    -    1,295    - 
Total net realized and unrealized gain (loss) on investments and written call option, net of taxes   717    (6,228)   (3,580)   (7,537)
                     
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS  $4,948   $(5,525)  $5,089   $(643)
                     
NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC (SEE NOTE 11)  $0.31   $(0.35)  $0.32   $(0.04)
                     
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC   15,981,857    15,889,682    15,970,599    15,881,712 
                     
NET INCREASE (DECREASE) IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – DILUTED (SEE NOTE 11)  $0.26   $(0.35)  $0.27   $(0.04)
                     
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - DILUTED   19,297,331    15,889,682    19,286,073    15,881,712 
                     
DISTRIBUTIONS PAID PER SHARE  $0.25   $0.39   $0.50   $0.78 

 

See accompanying notes to consolidated financial statements.

 

 4 

 

 

Capitala Finance Corp.

 

Consolidated Statements of Changes in Net Assets

(in thousands, except share data)

(unaudited)

 

   Common Stock   Additional   Undistributed Net   Accumulated Net Realized   Net Unrealized Appreciation (Depreciation) on Investments, net of   Net Unrealized Depreciation on     
   Number of
Shares
   Par Value   Paid in
Capital
   Investment
Income
   Gains
(Losses)
   Deferred
Taxes
   Written
Call Option
   Total 
                                 
BALANCE, December 31, 2016   15,868,045  $159  $240,184  $22,973  $(37,881)  $27,863   $(2,716)  $250,582 
Net investment income   -    -    -    6,894    -    -    -    6,894 
Net realized gain from investments   -    -    -    -    9,534    -    -    9,534 
Net change in unrealized depreciation on investments   -    -    -    -    -    (14,659)   -    (14,659)
Net change in unrealized depreciation on written call option   -    -    -    -    -    -    (2,412)   (2,412)
Distributions to Shareholders:                                        
Stock issued under dividend reinvestment plan   34,450    -    449    -    -    -    -    449 
Distributions declared   -    -    -    (12,388)   -    -    -    (12,388)
BALANCE, June 30, 2017   15,902,495   $159   $240,633   $17,479   $(28,347)  $13,204   $(5,128)  $238,000 
                                         
BALANCE, December 31, 2017   15,951,231  $160  $241,027  $15,854  $(61,982)  $33,623   $(6,795)  $221,887 
Net investment income   -    -    -    8,669    -    -    -    8,669 
Net realized loss from investments   -    -    -    -    (26,477)   -    -    (26,477)
Net change in unrealized appreciation on investments   -    -    -    -    -    21,602    -    21,602 
Tax benefit   -    -    -    -    -    1,295    -    1,295 
Distributions to Shareholders:                                        
Stock issued under dividend reinvestment plan   43,459    -    323    -    -    -    -    323 
Distributions declared   -    -    -    (7,982)   -    -    -    (7,982)
BALANCE, June 30, 2018   15,994,690   $160   $241,350   $16,541   $(88,459)  $56,520   $(6,795)  $219,317 

 

See accompanying notes to consolidated financial statements.

 

 5 

 

  

Capitala Finance Corp.

 

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   For the Six Months Ended June 30 
   2018   2017 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net increase (decrease) in net assets resulting from operations  $5,089   $(643)
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:          
Purchase of investments   (38,976)   (28,249)
Repayments and sales of investments   53,656    82,336 
Net realized (gain) loss on investments   26,477    (9,534)
Net unrealized (appreciation) depreciation on investments   (21,602)   14,659 
Payment-in-kind interest and dividends   (2,327)   (3,758)
Accretion of original issue discount on investments   (550)   (790)
Net unrealized depreciation on written call option   -    2,412 
Amortization of deferred financing fees   931    1,174 
Loss on extinguishment of debt   -    2,732 
Tax benefit   (1,295)   - 
Changes in assets and liabilities:          
Interest and dividend receivable   (444)   2,127 
Due from related parties   95    53 
Prepaid expenses   49    367 
Other assets   (29)   (26)
Due to related parties   -    39 
Management and incentive fees payable   388    (4,159)
Interest and financing fees payable   (30)   356 
Accounts payable and accrued expenses   7    (501)
Trade settlement payable   (175)   - 
NET CASH PROVIDED BY OPERATING ACTIVITIES   21,264    58,595 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from Credit Facility   21,000    - 
Payments to Credit Facility   (25,000)   (14,000)
Issuance of 2022 Notes   -    75,000 
Issuance of 2022 Convertible Notes   -    52,088 
Repayment of 2021 Notes   -    (113,438)
Distributions paid to shareholders   (7,659)   (11,939)
Deferred financing fees paid   -    (5,720)
NET CASH USED IN FINANCING ACTIVITIES   (11,659)   (18,009)
           
NET INCREASE IN CASH AND CASH EQUIVALENTS   9,605    40,586 
CASH AND CASH EQUIVALENTS, beginning of period   31,221    36,281 
CASH AND CASH EQUIVALENTS, end of period  $40,826   $76,867 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION          
Cash paid for interest  $7,158   $8,233 
           
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS          
Distributions paid through dividend reinvestment plan share issuances  $323   $449 

 

See accompanying notes to consolidated financial statements.

 

 6 

 

  

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Non-control/non-affiliated investments - 115.7%                          
                           
Non-control/non-affiliated investments - United States                          
                           
3 Bridge Solutions, LLC  IT Consulting  First Lien Debt (11.0% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 12/4/22)  $11,109   $11,109   $11,109    5.1%
                           
3 Bridge Solutions, LLC  IT Consulting  Preferred Units (965,250 units, 8.0% PIK) (5)        1,010    1,010    0.5%
                           
3 Bridge Solutions, LLC  IT Consulting  Membership Units (39,000 units)        10    36    0.0%
                           
               12,129    12,155    5.6%
                           
Alternative Biomedical Solutions, LLC  Healthcare  First Lien Debt (12.2% Cash, Due 12/18/22) (6)   13,000    13,000    13,000    5.9%
                           
Alternative Biomedical Solutions, LLC  Healthcare  Membership Units (20,092 units)        800    128    0.1%
                           
               13,800    13,128    6.0%
                           
American Clinical Solutions, LLC  Healthcare  First Lien Debt (10.5% Cash, 2.0% PIK, Due 6/11/20) (7)   9,114    9,091    6,731    3.1%
                           
               9,091    6,731    3.1%
                           
AmeriMark Direct, LLC  Consumer Products  First Lien Debt (12.8% Cash, Due 9/8/21)   18,800    18,470    18,800    8.6%
                           
               18,470    18,800    8.6%
                           
B&W Quality Growers, LLC  Farming  Membership Unit Warrants (91,739 Units)        -    5,673    2.6%
                           
               -    5,673    2.6%
                           
BigMouth, Inc.  Consumer Products  First Lien Debt (14.0% Cash, Due 11/14/21) (6)   9,442    9,442    9,442    4.3%
                           
BigMouth, Inc.  Consumer Products  Series A Preferred Stock (350,000 shares, 8.0% PIK) (5)        396    681    0.3%
                           
               9,838    10,123    4.6%
                           
Bluestem Brands, Inc.  Online Merchandise Retailer  First Lien Debt (9.6% Cash (1 month LIBOR + 7.5%, 1.0% Floor), Due 11/7/20)   3,904    3,864    3,526    1.6%
                           
               3,864    3,526    1.6%
                           
Burke America Parts Group, LLC  Home Repair Parts Manufacturer  Membership Units (14 units)        5    1,759    0.8%
                           
               5    1,759    0.8%
                           
California Pizza Kitchen, Inc.  Restaurant  Second Lien Debt (12.1% Cash (1 month LIBOR + 10.0%, 1.0% Floor), Due 8/23/23)   5,000    4,892    4,892    2.2%
                           
               4,892    4,892    2.2%
                           
Cedar Ultimate Parent, LLC  Consumer Electronics  Series C Preferred Stock (4,759,250 units)        958    1,130    0.5%
                           
Cedar Ultimate Parent, LLC  Consumer Electronics  Series D Preferred Stock (16,562,190 units)        -    -    0.0%
                           
Cedar Ultimate Parent, LLC  Consumer Electronics  Series E Common Units (190,370 units)        -    -    0.0%
                           
               958    1,130    0.5%

 

 7 

 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
CIS Secure Computing, Inc.  Government Services  First Lien Debt (10.6% Cash (1 month LIBOR + 8.5%, 1.0% Floor), 1.0% PIK, Due 9/14/22)   $10,621   $ 10,621   $ 10,621    4.8%
                           
CIS Secure Computing, Inc.  Government Services  Common Stock (46,163 shares)        1,000    1,596    0.7%
                           
               11,621    12,217    5.5%
                           
Corporate Visions, Inc.  Sales & Marketing Services  Subordinated Debt (9.0% Cash, 2.0% PIK, Due 11/29/21)   18,342    18,342    17,596    8.0%
                           
Corporate Visions, Inc.  Sales & Marketing Services  Common Stock (15,750 shares)        1,575    645    0.3%
                           
               19,917    18,241    8.3%
                           
Currency Capital, LLC  Financial Services  First Lien Debt (13.0% Cash (1 month LIBOR + 11.0%, 0.5% Floor), Due 1/20/22) (8)   17,000    17,000    17,000    7.8%
                           
Currency Capital, LLC  Financial Services  Class A Preferred Units (2,000,000 units) (8)        2,000    1,818    0.8%
                           
               19,000    18,818    8.6%
                           
Flavors Holdings, Inc.  Food Product Manufacturer  First Lien Debt (8.1% Cash (3 month LIBOR + 5.8%, 1.0% Floor), Due 4/3/20)   6,326    6,243    5,790    2.6%
                           
Flavors Holdings, Inc.  Food Product Manufacturer  Second Lien Debt (12.3% Cash (3 month LIBOR + 10.0%, 1.0% Floor), Due 10/3/21)   12,000    11,774    10,850    5.0%
                           
               18,017    16,640    7.6%
                           
Installs, LLC  Logistics  First Lien Debt (9.1% Cash (1 month LIBOR + 7.0%, 1.8% Floor), Due 6/20/23)   2,750    2,750    2,750    1.2%
                           
Installs, LLC  Logistics  First Lien Debt (9.1% Cash (1 month LIBOR + 7.0%, 1.8% Floor), Due 6/20/23)   3,000    3,000    3,000    1.4%
                           
               5,750    5,750    2.6%
                           
MC Sign Lessor Corp.  Advertising & Marketing Services  First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% Floor), Due 12/22/22)(9)   327    327    327    0.1%

 

 8 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
MC Sign Lessor Corp.  Advertising & Marketing Services  First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% Floor), Due 12/22/22)(10)   $3,925  $  3,925   $ 3,925    1.8%
                           
               4,252    4,252    1.9%
                           
Nth Degree, Inc.  Business Services  First Lien Debt (13.5% Cash (1 month LIBOR + 11.5%, 1.0% Floor), 2.0% PIK, Due 12/14/20)   7,272    7,272    7,272    3.3%
                           
Nth Degree, Inc.  Business Services  Preferred Stock (2,400 Units, 10.0% PIK dividend) (5)        3,086    13,188    6.0%
                           
               10,358    20,460    9.3%
                           
Sequoia Healthcare Management, LLC  Healthcare Management  First Lien Debt (12.0% Cash, 4.0% PIK, Due 7/17/19)   8,445    8,414    8,445    3.9%
                           
               8,414    8,445    3.9%
                           
Sur La Table, Inc.  Retail  First Lien Debt (12.0% Cash, Due 7/28/20)   15,000    15,000    15,000    6.8%
                           
               15,000    15,000    6.8%
                           
Taylor Precision Products, Inc.  Household Product Manufacturer  Series C Preferred Stock (379 shares)        758    758    0.3%
                           
               758    758    0.3%
                           
Vology, Inc.  Information Technology  Subordinated Debt (15.0% Cash (3 month LIBOR + 14.0%, 1.0% Ceiling), 4.0% PIK Due 6/30/20)   8,544    8,544    8,544    3.9%
                           
               8,544    8,544    3.9%
                           
Western Windows Systems, LLC  Building Products  First Lien Debt (12.3% Cash, Due 7/31/20) (6)   10,500    10,500    10,500    4.8%
                           
Western Windows Systems, LLC  Building Products  Membership Units (39,860 units)        3,000    12,769    5.8%
                           
               13,500    23,269    10.6%
                           
Xirgo Technologies, LLC  Information Technology  Subordinated Debt (11.5% Cash, Due 3/1/22)   15,750    15,750    15,750    7.2%
                           
Xirgo Technologies, LLC  Information Technology  Membership Units (600,000 units)        600    838    0.4%
                           
               16,350    16,588    7.6%
                           
Sub Total Non-control/non-affiliated investments - United States              224,528    246,899    112.5%
                           
Non-control/non-affiliated investments - Brazil                          
                           
Velum Global Credit Management, LLC  Financial Services  First Lien Debt (15.0% PIK, Due 12/31/17) (7) (8) (11)    13,230    11,816    6,914    3.2%
                           
               11,816    6,914    3.2%
                           
Sub Total Non-control/non-affiliated investments - Brazil              11,816    6,914    3.2%
                           
Sub Total Non-control/non-affiliated investments             $236,344   $253,813    115.7%

 

 9 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                           
Affiliate investments - 54.1%                          
                           
Affiliate investments - United States                          
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Second Lien Debt (8.0% Cash, 4.0% PIK, Due 8/24/19) (11)  $16,165   $16,165   $16,039    7.3%
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Membership Units (2.2% fully diluted)        17    -    0.0%
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Warrants (37.8% fully diluted)        -    -    0.0%
                           
               16,182    16,039    7.3%
                           
Burgaflex Holdings, LLC  Automobile Part Manufacturer  First Lien Debt (12.0% Cash, 1.0% PIK, Due 3/23/21)   14,726    14,726    14,453    6.6%
                           
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Common Stock Class A (1,253,198 shares)        1,504    -    0.0%
                           
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Common Stock Class B (900,000 shares)        300    -    0.0%
                           
               16,530    14,453    6.6%
                           
City Gear, LLC  Footwear Retail  Subordinated Debt (13.0% Cash, Due 10/20/19) (11)   8,231    8,231    8,231    3.7%
                           
City Gear, LLC  Footwear Retail  Preferred Membership Units (2.8% fully diluted, 9.0% Cash Dividend) (5)        1,269    1,269    0.6%
                           
City Gear, LLC  Footwear Retail  Membership Unit Warrants (11.4% fully diluted)        -    7,407    3.4%
                           
               9,500    16,907    7.7%
                           
GA Communications, Inc.  Advertising & Marketing Services  Series A-1 Preferred Stock (1,998 shares, 8.0% PIK Dividend) (5)        3,036    3,350    1.5%
                           
GA Communications, Inc.  Advertising & Marketing Services  Series B-1 Common Stock (200,000 shares)        2    1,442    0.7%
                           
               3,038    4,792    2.2%
                           
J&J Produce Holdings, Inc.  Produce Distribution  Subordinated Debt (13.0% Cash, Due 6/16/19) (11)   6,406    6,406    6,162    2.8%
                           
J&J Produce Holdings, Inc.  Produce Distribution  Common Stock (8,182 shares)        818    -    0.0%
                           
J&J Produce Holdings, Inc.  Produce Distribution  Common Stock Warrants (6,369 shares)        -    -    0.0%
                           
               7,224    6,162    2.8%
                           
LJS Partners, LLC  QSR Franchisor  Common Stock (1,500,000 shares)        896    6,245    2.8%
                           
               896    6,245    2.8%

 

 10 

 

  

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
MMI Holdings, LLC  Medical Device Distributor  First Lien Debt (12.0% Cash, Due 1/31/19) (11)   $2,600   2,600   2,600    1.2%
                           
MMI Holdings, LLC  Medical Device Distributor  Subordinated Debt (6.0% Cash, Due 1/31/19) (11)   400    388    400    0.2%
                           
MMI Holdings, LLC  Medical Device Distributor  Preferred Units (1,000 units, 6.0% PIK Dividend) (5)        1,426    1,566    0.7%
                           
MMI Holdings, LLC  Medical Device Distributor  Common Membership Units (45 units)        -    191    0.1%
                           
               4,414    4,757    2.2%
                           
Sierra Hamilton Holdings Corporation  Oil & Gas Engineering and Consulting Services  Common Stock (15,068,000 shares)        6,958    8,909    4.1%
                           
               6,958    8,909    4.1%
                           
Source Capital Penray, LLC  Automotive Chemicals & Lubricants  Membership Units (11.3% ownership) (12)        -    101    0.0%
                           
               -    101    0.0%
                           
US Bath Group, LLC  Building Products  First Lien Debt (11.0% Cash (1 month LIBOR + 9.0%, 1.0% Floor), Due 1/2/23)   13,375    13,375    13,375    6.1%
                           
US Bath Group, LLC  Building Products  Membership Units (500,000 units)        500    2,047    0.9%
                           
               13,875    15,422    7.0%
                           
U.S. Well Services, LLC  Oil & Gas Services  First Lien Debt (8.0% Cash (1 month LIBOR + 6.0%, 1.0% floor), Due 2/2/22) (13)   2,299    2,299    2,299    1.0%
                           
U.S. Well Services, LLC  Oil & Gas Services  First Lien Debt (11.0% Cash (1 month LIBOR + 9.0%, 1.0% floor), Due 2/2/22)   9,616    9,616    9,616    4.4%
                           
U.S. Well Services, LLC  Oil & Gas Services  Class A Units (5,680,688 Units)        6,260    11,155    5.1%
                           
U.S. Well Services, LLC  Oil & Gas Services  Class B Units (2,076,298 Units)        441    772    0.4%
                           
               18,616    23,842    10.9%
                           
V12 Holdings, Inc.  Data Processing & Digital Marketing  Subordinated Debt (14)        813    1,035    0.5%
                           
               813    1,035    0.5%
                           
Sub Total Affiliate investments - United States            $98,046   $118,664    54.1%

 

 11 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)  Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                           
Control investments - 50.5%                          
                           
Control investments - United States                          
                           
CableOrganizer Acquisition, LLC  Computer Supply Retail  First Lien Debt (10.0% Cash, Due 6/30/19) (15)  $1,708   $1,708   $1,708    0.8%
                           
CableOrganizer Acquisition, LLC  Computer Supply Retail  First Lien Debt (12.0% Cash, 4.0% PIK, Due 6/30/19) (11)   8,709    8,709    8,709    3.9%
                           
CableOrganizer Acquisition, LLC  Computer Supply Retail  Preferred Units (4,000,000 units)        2,354    2,354    1.1%
                           
CableOrganizer Acquisition, LLC  Computer Supply Retail  Common Stock (21.3% fully diluted)        1,394    -    0.0%
                           
CableOrganizer Acquisition, LLC  Computer Supply Retail  Common Stock Warrants (10.0% fully diluted )        -    -    0.0%
                           
               14,165    12,771    5.8%
                           
Eastport Holdings, LLC  Business Services  Subordinated Debt (15.3% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 4/29/20)   16,500    15,115    16,500    7.5%
                           
Eastport Holdings, LLC  Business Services  Membership Units (33.3% ownership) (16)        4,733    26,449    12.1%
                           
               19,848    42,949    19.6%
                           
Kelle's Transport Service, LLC  Transportation  First Lien Debt (4.0% Cash, Due 2/15/20) (17)   3,300    3,300    3,300    1.5%
                           
Kelle's Transport Service, LLC  Transportation  First Lien Debt (2.2% Cash, Due 2/15/20) (11)   13,674    13,668    10,000    4.6%
                           
Kelle's Transport Service, LLC  Transportation  Membership Units (27.5% fully diluted)        -    -    0.0%
                           
               16,968    13,300    6.1%
                           
Micro Precision, LLC  Conglomerate  Subordinated Debt (10.0% Cash, Due 9/15/18) (11)   1,862    1,862    1,862    0.9%
                           
Micro Precision, LLC  Conglomerate  Subordinated Debt (14.0% Cash, 4.0% PIK, Due 9/15/18) (11)   4,238    4,238    4,238    1.9%
                           
Micro Precision, LLC  Conglomerate  Series A Preferred Units (47 units)        1,629    1,629    0.7%
                           
               7,729    7,729    3.5%
                           
Navis Holdings, Inc.  Textile Equipment Manufacturer  First Lien Debt (15.0% Cash, Due 10/30/20) (11)   7,500    7,500    7,500    3.4%
                           
Navis Holdings, Inc.  Textile Equipment Manufacturer  Class A Preferred Stock (1,000 shares, 10.0% Cash Dividend) (5)        1,000    1,000    0.5%
                           
Navis Holdings, Inc.  Textile Equipment Manufacturer  Common Stock (300,000 shares)      1   5,309   2.4%
                           
               8,501    13,809    6.3%

 

 12 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2018

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
On-Site Fuel Services, Inc.  Fuel Transportation Services  First Lien Debt (18.0% Cash, Due 12/19/18) (7) (11)  $15,525   $11,020   $12,134    5.5%
                           
On-Site Fuel Services, Inc.  Fuel Transportation Services  Series A Preferred Stock (32,782 shares)        3,278    -    0.0%
                           
On-Site Fuel Services, Inc.  Fuel Transportation Services  Series B Preferred Stock (23,648 shares)        2,365    -    0.0%
                           
On-Site Fuel Services, Inc.  Fuel Transportation Services  Common Stock (33,058 shares)        33    -    0.0%
                           
               16,696    12,134    5.5%
                           
Portrait Studio, LLC  Professional and Personal Digital Imaging  First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% floor, 2.0% ceiling), Due 12/31/22) (18)   1,500    1,500    1,500    0.7%
                           
Portrait Studio, LLC  Professional and Personal Digital Imaging  First Lien Debt (9.0% Cash (1 month LIBOR + 7.0%, 1.0% floor, 5.0% ceiling), Due 12/31/22)   4,500    4,500    4,500    2.1%
                           
Portrait Studio, LLC  Professional and Personal Digital Imaging  Preferred Units (4,350,000 Units)        2,450    2,092    0.9%
                           
Portrait Studio, LLC  Professional and Personal Digital Imaging  Membership Units (150,000 Units)        -    -    0.0%
                           
               8,450    8,092    3.7%
                           
Sub Total Control investments - United States             $92,357   $110,784    50.5%
                           
TOTAL INVESTMENTS - 220.3%             $426,747   $483,261    220.3%
                           
Derivatives - (3.1)%                          
                           
Derivatives - United States                          
                           
Eastport Holdings, LLC  Business Services  Written Call Option (16)       $(20)  $(6,815)   (3.1%)
                           
Sub Total Derivatives - United States             $(20)  $(6,815)   (3.1%)
                           
TOTAL DERIVATIVES - (3.1)%             $(20)  $(6,815)   (3.1%)

 

(1) All investments valued using unobservable inputs (Level 3).

(2) All investments valued by the Board of Directors.

(3) All debt investments are income producing, unless otherwise noted. Equity and warrant investments are non-income producing, unless otherwise noted.

(4) Percentages are based on net assets of $219,317 as of June 30, 2018.

(5) The equity investment is income producing, based on rate disclosed.

(6) The cash rate equals the approximate current yield on our last-out portion of the unitranche facility.

(7) Non-accrual investment.

(8) Indicates assets that the Company believes do not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended. Qualifying assets must represent at least 70% of the Company's total assets at the time of acquisition of any additional non-qualifying assets. As of June 30, 2018, 4.9% of the Company's total assets were non-qualifying assets.

(9) The investment has a $0.2 million unfunded commitment.

(10) The investment has a $0.6 million unfunded commitment.

(11) The maturity date of the original investment has been extended.

(12) The investment has been exited. The residual value reflects estimated escrow to be settled post-closing.

(13) The investment has a $0.7 million unfunded commitment.

(14) The investment has been exited. The residual value reflects estimated escrow and earnout to be settled post-closing.

(15) The investment has a $0.3 million unfunded commitment.

(16) The Company has written a call option that enables CapitalSouth Partners Florida Sidecar Fund II, L.P. to purchase up to 31.25% of the Company's interest at a strike price of $1.5 million. As of June 30, 2018, the fair value of the written call option is approximately $6.8 million. See Note 4 to the consolidated financial statements for further detail on the written call option transaction.

(17) The investment has a $1.4 million unfunded commitment.

(18) The investment has a $3.8 million unfunded commitment.

 

See accompanying notes to consolidated financial statements.

 

 13 

 

  

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2017

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Non-control/non-affiliated investments - 130.0%                          
                           
Non-control/non-affiliated investments - United States                          
                           
3 Bridge Solutions, LLC  IT Consulting  First Lien Debt (10.38% Cash (1 month LIBOR + 9.0%, 1% Floor), Due 12/4/22)  $11,250   $11,250   $11,250    5.1%
                           
3 Bridge Solutions, LLC  IT Consulting  Preferred Units (965,250 units, 8% PIK) (5)        971    971    0.4%
                           
3 Bridge Solutions, LLC  IT Consulting  Membership Units (39,000 units)        10    10    0.0%
                           
               12,231    12,231    5.5%
                           
Alternative Biomedical Solutions, LLC  Healthcare  First Lien Debt (11.74% Cash, Due 12/18/22) (6)   13,000    13,000    13,000    5.9%
                           
Alternative Biomedical Solutions, LLC  Healthcare  Membership Units (20,092 units)        800    800    0.4%
                           
               13,800    13,800    6.3%
                           
American Clinical Solutions, LLC  Healthcare  First Lien Debt (10.5% Cash, 1% PIK, Due 6/11/20)   9,068    9,068    7,568    3.4%
                           
               9,068    7,568    3.4%
                           
American Exteriors, LLC  Replacement Window Manufacturer  First Lien Debt (10% PIK, Due 1/1/19) (7)(8)   8,287    5,679    1,880    0.8%
                           
American Exteriors, LLC  Replacement Window Manufacturer  Common Stock Warrants (10% fully diluted)        -    -    0.0%
                           
               5,679    1,880    0.8%
                           
AmeriMark Direct, LLC  Consumer Products  First Lien Debt (12.75% Cash, Due 9/8/21)   19,100    18,713    19,100    8.6%
                           
               18,713    19,100    8.6%
                           
B&W Quality Growers, LLC  Farming  Membership Unit Warrants (91,739 Units)        -    5,581    2.5%
                           
               -    5,581    2.5%
                           
BigMouth, Inc.  Consumer Products  First Lien Debt (13.3% Cash, Due 11/14/21) (6)   9,790    9,790    9,790    4.4%
                           
BigMouth, Inc.  Consumer Products  Series A Preferred Stock (350,000 shares, 8% PIK) (5)        382    722    0.3%
                           
               10,172    10,512    4.7%

 

 14 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2017

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Bluestem Brands, Inc.  Online Merchandise Retailer  First Lien Debt (9.07% Cash (1 month LIBOR + 7.5%, 1% Floor), Due 11/7/20)  $4,029   $3,965   $3,755   1.7%
                           
               3,965    3,755    1.7%
                           
Brunswick Bowling Products, Inc.  Bowling Products  First Lien Debt (8% Cash (1 month LIBOR + 6%, 2% Floor), Due 5/22/20)   1,600    1,600    1,600    0.7%
                           
Brunswick Bowling Products, Inc.  Bowling Products  First Lien Debt (16.25% Cash (1 month LIBOR + 14.25%, 2% Floor), Due 5/22/20)   5,586    5,586    5,586    2.5%
                           
               7,186    7,186    3.2%
                           
Burke America Parts Group, LLC  Home Repair Parts Manufacturer  Membership Units (14 units)        5    2,767    1.2%
                           
               5    2,767    1.2%
                           
California Pizza Kitchen, Inc.  Restaurant  Second Lien Debt (11.57% Cash (1 month LIBOR + 10%, 1% Floor), Due 8/23/23)   5,000    4,880    4,880    2.2%
                           
               4,880    4,880    2.2%
                           
Caregiver Services, Inc.  In-Home Healthcare Services  Common Stock (293,186 shares)        258    54    0.0%
                           
Caregiver Services, Inc.  In-Home Healthcare Services  Common Stock Warrants (655,908 units) (9)        264    120    0.1%
                           
               522    174    0.1%
                           
Cedar Electronics Holding Corp.  Consumer Electronics  Subordinated Debt (12% Cash, Due 12/26/20) (7)   21,550    21,550    3,498    1.6%
                           
               21,550    3,498    1.6%
                           
CIS Secure Computing, Inc.  Government Services  First Lien Debt (9.88% Cash (1 month LIBOR + 8.5%, 1% Floor), 1% PIK, Due 9/14/22) (10)   9,116    9,116    9,116    4.1%
                           
CIS Secure Computing, Inc.  Government Services  Common Stock (46,163 shares)        1,000    1,204    0.5%
                           
               10,116    10,320    4.6%
                           
Corporate Visions, Inc.  Sales & Marketing Services  Subordinated Debt (9% Cash, 2% PIK, Due 11/29/21)   18,159    18,159    16,995    7.7%
                           
Corporate Visions, Inc.  Sales & Marketing Services  Common Stock (15,750 shares)        1,575    393    0.2%
                           
               19,734    17,388    7.9%
                           
Currency Capital, LLC  Financial Services  First Lien Debt (12.38% Cash (1 month LIBOR + 11%, 0.50% Floor) Due 1/20/22) (11)   17,000    17,000    17,000    7.7%
                           
Currency Capital, LLC  Financial Services  Class A Preferred Units (2,000,000 units) (11)       2,000   1,905   0.9%
                           
               19,000    18,905    8.6%

 

 15 

 

  

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2017

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Flavors Holdings, Inc.  Food Product Manufacturer  First Lien Debt (7.44% Cash (3 month LIBOR + 5.75%, 1% Floor), Due 4/3/20)  $6,700   $6,589   $5,911    2.7%
                           
Flavors Holdings, Inc.  Food Product Manufacturer  Second Lien Debt (11.69% Cash (3 month LIBOR + 10%, 1% Floor), Due 10/3/21)   12,000    11,740    10,311    4.6%
                           
               18,329    16,222    7.3%
                           
Nth Degree, Inc.  Business Services  First Lien Debt (8.38% Cash (1 month LIBOR + 7%, 1% Floor), 1% PIK, Due 12/14/20)   8,833    8,833    8,833    4.0%
                           
Nth Degree, Inc.  Business Services  First Lien Debt (12.88% Cash (1 month LIBOR + 11.5%, 1% Floor), 2% PIK, Due 12/14/20)   7,200    7,200    7,200    3.2%
                           
Nth Degree, Inc.  Business Services  Preferred Stock (2,400 Units, 10% PIK dividend) (5)        2,938    11,140    5.0%
                           
               18,971    27,173    12.2%
                           
Sequoia Healthcare Management, LLC  Healthcare Management  First Lien Debt (12% Cash, 4% PIK, Due 7/17/19)   9,014    8,964    9,014    4.1%
                           
               8,964    9,014    4.1%
                           
Spectra Services Holdings, LLC  Refrigeration / HVAC services  First Lien Debt (10% Cash, 4% PIK, Due 12/27/22)   7,450    7,450    7,450    3.4%
                           
Spectra Services Holdings, LLC  Refrigeration / HVAC services  Class A Units (1,283,824 units, 4% Cash dividend, 11% PIK dividend) (5)        1,286    1,286    0.6%
                           
Spectra Services Holdings, LLC  Refrigeration / HVAC services  Class B Units (257 units)        -    -    0.0%
                           
               8,736    8,736    4.0%
                           
Sur La Table, Inc.  Retail  First Lien Debt (12% Cash, Due 7/28/20)   15,000    15,000    15,000    6.8%
                           
               15,000    15,000    6.8%
                           
Taylor Precision Products, Inc.  Household Product Manufacturer  Series C Preferred Stock (379 shares)        758    1,316    0.6%
                           
               758    1,316    0.6%
                           
Vintage Stock, Inc.  Specialty Retail  First Lien Debt (13.86% Cash (1 month LIBOR + 12.5%, 0.5% floor), 3% PIK, Due 11/3/21)   20,713    20,713    20,713    9.3%
                           
             20,713   20,713   9.3%

 

 16 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2017

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Vology, Inc.  Information Technology  Subordinated Debt (15% Cash (3 month LIBOR + 14%, 1% Ceiling), 4% PIK Due 6/30/20)  $8,374   $8,374   $8,374    3.8%
                           
               8,374    8,374    3.8%
                           
Western Windows Systems, LLC  Building Products  First Lien Debt (11.9% Cash, Due 7/31/20) (6)   10,500    10,500    10,500    4.7%
                           
Western Windows Systems, LLC  Building Products  Membership Units (39,860 units)        3,000    7,379    3.3%
                           
               13,500    17,879    8.0%
                           
Xirgo Technologies, LLC  Information Technology  Subordinated Debt (11.5% Cash, Due 3/1/22)   15,750    15,750    15,750    7.1%
                           
Xirgo Technologies, LLC  Information Technology  Membership Units (600,000 units)        600    637    0.3%
                           
               16,350    16,387    7.4%
                           
Sub Total Non-control/non-affiliated investments - United States              286,316    280,359    126.4%
                           
Non-control/non-affiliated investments - Brazil                          
                           
Velum Global Credit Management, LLC  Financial Services  First Lien Debt (15% PIK, Due 12/31/17) (7) (8) (11) (12)   12,275    11,816    8,015    3.6%
                           
               11,816    8,015    3.6%
                           
Sub Total Non-control/non-affiliated investments - Brazil              11,816    8,015    3.6%
                           
Sub Total Non-control/non-affiliated investments             $298,132   $288,374    130.0%
                           
Affiliate investments - 46.8%                          
                           
Affiliate investments - United States                          
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Second Lien Debt (8% Cash, 4% PIK, Due 8/24/19) (8)  $15,846   $15,846   $15,603    7.0%
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Membership Units (2.19% fully diluted)        17    -    0.0%
                           
AAE Acquisition, LLC  Industrial Equipment Rental  Warrants (37.78% fully diluted)        -    -    0.0%
                           
               15,863    15,603    7.0%

 

 17 

 

 

Capitala Finance Corp.

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2017

 

Portfolio Company, Country (1), (2), (3), (4)   Industry  Type of Investment  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
                       
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Subordinated Debt (14% Cash, Due 8/9/19) (13)  $3,000   $3,000   $3,000    1.4%
                           
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Subordinated Debt (12% Cash, Due 8/9/19) (13)   5,828    5,828    5,828    2.6%
                           
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Common Stock (1,253,198 shares)        1,504    457    0.2%
                           
               10,332    9,285    4.2%
                           
City Gear, LLC  Footwear Retail  Subordinated Debt (13% Cash, Due 10/20/19) (8)   8,231    8,231    8,231    3.7%
                           
City Gear, LLC  Footwear Retail  Preferred Membership Units (2.78% fully diluted, 9% Cash Dividend) (5)        1,269    1,269    0.6%
                           
City Gear, LLC  Footwear Retail  Membership Unit Warrants (11.38% fully diluted)        -    8,248    3.7%
                           
               9,500    17,748    8.0%
                           
GA Communications, Inc.  Advertising & Marketing Services  Series A-1 Preferred Stock (1,998 shares, 8% PIK Dividend) (5)        2,902    3,225    1.5%
                           
GA Communications, Inc.  Advertising & Marketing Services  Series B-1 Common Stock (200,000 shares)        2    1,932    0.9%
                           
               2,904    5,157    2.4%
                           
J&J Produce Holdings, Inc.  Produce Distribution  Subordinated Debt (6% Cash, 7% PIK, Due 6/16/19) (8)   6,368    6,368    6,170    2.8%
                           
J&J Produce Holdings, Inc.  Produce Distribution  Common Stock (8,182 shares)        818    -