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, 2021

 

  ¨ 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  

Logan Ridge

Finance Corporation 

650 Madison Avenue

New York, New York 10022   

State of Incorporation: Maryland  

Telephone: (212) 891-2880 

  90-0945675

 

Capitala Finance Corp.

4201 Congress St., Suite 360, Charlotte, North Carolina 28209

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading symbol(s)   Name of Each Exchange on Which
Registered

Common Stock, par value $0.01 per share  

5.75% Convertible Notes due 2022  

6.00% Notes due 2022 

 

LRFC  

CPTAG

 CPTAL 

 

NASDAQ Global Select Market  

NASDAQ Capital Market  

NASDAQ Global Select Market 

 

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.

 

    Yes   x No   ¨

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

    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.

 

  Large accelerated filer   ¨ Accelerated filer ¨
         
  Non-accelerated filer x Smaller reporting company ¨
         
      Emerging growth company   ¨

 

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 13(a) of the Exchange Act.                                   

 

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

 

    Yes  ¨ No  x

 

The number of shares of Logan Ridge Finance Corporation’s common stock, $0.01 par value, outstanding as of August 16, 2021 was 2,711,068.

 

 

 

 

 

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, 2021 (unaudited) and December 31, 2020 3
     
  Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited) 4
     
  Consolidated Statements of Changes in Net Assets for the three and six months ended June 30, 2021 and 2020 (unaudited) 5
     
  Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited) 6
     
  Consolidated Schedules of Investments as of June 30, 2021 (unaudited) and December 31, 2020 7
     
  Notes to Consolidated Financial Statements as of and for the period ended June 30, 2021 (unaudited) 17
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 46
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 65
     
Item 4. Controls and Procedures 66
     
PART II. OTHER INFORMATION 66
     
Item 1. Legal Proceedings 66
     
Item 1A. Risk Factors 67
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68
     
Item 3. Defaults Upon Senior Securities 68
     
Item 4. Mine Safety Disclosures 68
     
Item 5. Other Information 68
     
Item 6. Exhibits 68
   
Signatures 69

 

 2 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Assets and Liabilities

(in thousands, except share and per share data)

 

   As of 
   June 30, 2021   December 31, 2020 
   (unaudited)     
ASSETS          
Investments at fair value:          
Non-control/non-affiliate investments (amortized cost of $143,555 and $187,744, respectively)  $139,097   $172,848 
Affiliate investments (amortized cost of $65,163 and $80,961, respectively)   81,659    93,425 
Control investments (amortized cost of $8,850 and $8,947, respectively)   7,292    8,419 
Total investments at fair value (amortized cost of $217,568 and $277,652, respectively)   228,048    274,692 
Cash and cash equivalents   26,144    49,942 
Interest and dividend receivable   1,101    2,286 
Prepaid expenses   629    1,077 
Receivable for unsettled trades   7,234    - 
Total assets  $263,156   $327,997 
           
LIABILITIES          
SBA-guaranteed debentures (net of deferred financing costs of $0 and $485, respectively)  $-   $90,515 
2022 Notes (net of deferred financing costs of $556 and $846, respectively)   72,277    71,987 
2022 Convertible Notes (net of deferred financing costs of $362 and $552, respectively)   51,726    51,536 
KeyBank Credit Facility (net of deferred financing costs of $450 and $546, respectively)   24,550    (546)
Management and incentive fees payable   70    3,842 
Interest and financing fees payable   778    1,688 
Accounts payable and accrued expenses   8    28 
Total liabilities  $149,409   $219,050 
           
Commitments and contingencies (Note 2)          
           
NET ASSETS          
Common stock, par value $0.01, 100,000,000 common shares authorized, 2,711,068 and 2,711,068 common shares
issued and outstanding, respectively
  $27   $27 
Additional paid in capital   229,481    229,481 
Total distributable loss   (115,761)   (120,561)
Total net assets  $113,747   $108,947 
Total liabilities and net assets  $263,156   $327,997 
           
Net asset value per share  $41.96   $40.19 

 

See accompanying notes to consolidated financial statements.

 

 3 

 

 

Logan Ridge Finance Corporation

 

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, 
   2021   2020   2021   2020 
INVESTMENT INCOME                    
Interest and fee income:                    
Non-control/non-affiliate investments  $3,073   $4,693   $6,269   $9,400 
Affiliate investments   1,188    1,632    2,494    3,311 
Control investments   98    103    196    206 
Total interest and fee income   4,359    6,428    8,959    12,917 
Payment-in-kind interest and dividend income:                    
Non-control/non-affiliate investments   24    378    95    714 
Affiliate investments   99    188    198    368 
Total payment-in-kind interest and dividend income   123    566    293    1,082 
Dividend income:                    
Non-control/non-affiliate investments   560    -    560    - 
Affiliate investments   -    -    155    25 
Total dividend income   560    -    715    25 
Interest income from cash and cash equivalents   2    5    3    49 
Total investment income   5,044    6,999    9,970    14,073 
                     
EXPENSES                    
Interest and financing expenses   2,728    4,885    5,765    8,711 
Base management fee   1,272    1,666    2,670    3,423 
Administrative service fees   350    350    700    700 
General and administrative expenses   660    707    1,584    1,861 
Total expenses   5,010    7,608    10,719    14,695 
                     
NET INVESTMENT INCOME (LOSS)   34    (609)   (749)   (622)
                     
REALIZED AND UNREALIZED LOSS (GAIN) ON INVESTMENTS                    
Net realized gain (loss) on investments:                    
Non-control/non-affiliate investments   4,732    (14,142)   (9,291)   (13,174)
Affiliate investments   2,215    1,341    2,215    1,341 
Control investments   -    (484)   -    (484)
Net realized gain (loss) on investments   6,947    (13,285)   (7,076)   (12,317)
Net unrealized (depreciation) appreciation investments:                    
Non-control/non-affiliate investments   (12,774)   16,993    10,438    (11,532)
Affiliate investments   60    (1,003)   4,032    (14,731)
Control investments   (1,006)   1,004    (1,030)   (138)
Net unrealized (depreciation) appreciation on investments   (13,720)   16,994    13,440    (26,401)
Total net realized and unrealized (loss) gain on investments   (6,773)   3,709    6,364    (38,718)
Net realized loss on extinguishment of debt   (815)   -    (815)   - 
                     
NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM OPERATIONS  $(7,554)  $3,100   $4,800   $(39,340)
                     
NET (DECREASE) INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED(1)  $(2.79)  $1.14   $1.77   $(14.53)
                     
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING – BASIC AND DILUTED (1)   2,711,068    2,711,068    2,711,068    2,707,256 
                     
DISTRIBUTIONS PAID PER SHARE (2)  $-   $-   $-   $1.50 

 

 

 

(1) Basic and diluted shares of Logan Ridge Finance Corporation's (the "Company") common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.
(2) Dividends paid per share of the Company's common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.

 

See accompanying notes to consolidated financial statements.

 

 4 

 

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Changes in Net Assets

 (in thousands, except share data)

 (unaudited)

 

   Common Stock (1)             
For the Three Months Ended June 30, 2021 and 2020  Number of Shares   Par Value   Additional Paid
in Capital (1)
   Total Distributable
Loss
   Total 
BALANCE, March 31, 2021   2,711,068   $27   $229,481   $(108,207)  $121,301 
   Net investment income   -    -    -    34    34 
   Net realized gain on investments   -    -    -    6,947    6,947 
   Net unrealized depreciation on investments   -    -    -    (13,720)   (13,720)
   Net realized loss on extinguishment of debt   -    -    -    (815)   (815)
BALANCE, June 30, 2021   2,711,068   $27   $229,481   $(115,761)  $113,747 
                          
                          
BALANCE, March 31, 2020   2,711,068   $27   $238,356   $(136,428)  $101,955 
   Net investment loss   -    -    -    (609)   (609)
   Net realized loss on investments   -    -    -    (13,285)   (13,285)
   Net unrealized appreciation on investments   -    -    -    16,994    16,994 
 BALANCE, June 30, 2020   2,711,068   $27   $238,356   $(133,328)  $105,055 

 

   Common Stock (1)             
For the Six Months Ended June 30, 2021 and 2020  Number of Shares   Par Value   Additional Paid
in Capital (1)
   Total Distributable
Loss
   Total 
BALANCE, December 31, 2020   2,711,068   $27   $229,481   $(120,561)  $108,947 
Net investment loss   -    -    -    (749)   (749)
Net realized loss on investments   -    -    -    (7,076)   (7,076)
Net unrealized appreciation on investments   -    -    -    13,440    13,440 
Net realized loss on extinguishment of debt   -    -    -    (815)   (815)
 BALANCE, June 30, 2021   2,711,068   $27   $229,481   $(115,761)  $113,747 
                          
                          
BALANCE, December 31, 2019   2,700,628   $27   $238,021   $(89,935)  $148,113 
Net investment loss   -    -    -    (622)   (622)
Net realized loss on investments   -    -    -    (12,317)   (12,317)
Net unrealized depreciation on investments   -    -    -    (26,401)   (26,401)
Fractional shares settled in cash as part of one-for-six reverse stock split   (13)   -    -    -    - 
Distributions to Shareholders:                         
Stock issued under dividend reinvestment plan   10,453    -    335    -    335 
Distributions declared   -    -    -    (4,053)   (4,053)
BALANCE, June 30, 2020   2,711,068   $27   $238,356   $(133,328)  $105,055 

  

 

 

(1) Shares of the Company's common stock have been adjusted for the three and six months ended June 30, 2020 to reflect the one-for-six reverse stock split effected on August 21, 2020 on a retroactive basis, as described in Note 1.

 

See accompanying notes to consolidated financial statements.

 

 5 

 

 

Logan Ridge Finance Corporation

 

Consolidated Statements of Cash Flows

 (in thousands)

 

   For the Six Months Ended June 30, 
   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net increase (decrease) in net assets resulting from operations  $4,800   $(39,340)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities:          
Purchase of investments   (10,000)   (20,820)
Repayments and sales of investments   63,444    58,888 
Net realized loss on investments   7,076    12,317 
Net realized loss on extinguishment of debt   815    - 
Net unrealized (appreciation) depreciation on investments   (13,440)   26,401 
Payment-in-kind interest and dividends   (293)   (1,082)
Accretion of original issue discount on investments   (143)   (438)
Amortization of deferred financing fees   765    2,090 
Changes in assets and liabilities:          
Interest and dividend receivable   1,185    (333)
Prepaid expenses   448    (16)
Receivable for unsettled trades   (7,234)   (186)
Management and incentive fees payable   (3,772)   (127)
Interest and financing fees payable   (910)   (10)
Accounts payable and accrued expenses   (20)   (507)
NET CASH PROVIDED BY OPERATING ACTIVITIES   42,721    36,837 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Paydowns on SBA-guaranteed debentures   (91,000)   - 
Prepayment penalty on SBA-guaranteed debentures   (519)   - 
Proceeds from KeyBank Credit Facility   25,000    - 
Distributions paid to shareholders   -    (3,718)
Deferred financing fees paid   -    (214)
NET CASH USED IN FINANCING ACTIVITIES   (66,519)   (3,932)
           
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS   (23,798)   32,905 
CASH AND CASH EQUIVALENTS, beginning of period   49,942    62,321 
CASH AND CASH EQUIVALENTS, end of period  $26,144   $95,226 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION          
Cash paid for interest  $5,724   $6,409 
           
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS          
Distributions paid through dividend reinvestment plan share issuances  $-   $335 

 

See accompanying notes to consolidated financial statements.

 

 6 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition
Date
  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
Non-control/non-affiliated investments - 122.3%                             
                              
Non-control/non-affiliated investments - United States                             
                              
3 Bridge Solutions, LLC  IT Consulting  First Lien Debt (13.0% Cash, Due 12/4/22)  12/4/2017  $8,466   $8,466   $8,466    7.4%
                              
3 Bridge Solutions, LLC  IT Consulting  Preferred Units (965 units)  12/4/2017        1,090    1,250    1.1%
                              
3 Bridge Solutions, LLC  IT Consulting  Membership Units (39,000 units)  12/4/2017        10    990    0.9%
                              
                  9,566    10,706    9.4%
                              
Alternative Biomedical Solutions, LLC  Healthcare  First Lien Debt (8.0% Cash, Due 12/18/22)  6/25/2020   7,119    7,119    6,732    5.9%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series A Preferred Units (13,811 units)  6/25/2020        1,275    804    0.7%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series B Preferred Units (48,025 units)  6/25/2020        3,943    -    0.0%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series C Preferred Units (78,900 units)  6/25/2020        -    -    0.0%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Membership Units (20,092 units)  12/18/2017        800    -    0.0%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Membership Unit Warrants (49,295 units)  6/25/2020        -    -    0.0%
                              
                  13,137    7,536    6.6%
                              
American Clinical Solutions, LLC  Healthcare  First Lien Debt (7.0% Cash, Due 12/31/22)  12/31/2019   3,500    3,500    3,327    2.9%
                              
American Clinical Solutions, LLC  Healthcare  First Lien Debt (7.0% Cash, Due 12/31/21) (6)  4/13/2020   250    250    238    0.2%
                              
American Clinical Solutions, LLC  Healthcare  Class A Membership Units (6,030,384 units)  4/13/2020        3,198    4,905    4.3%
                              
                  6,948    8,470    7.4%
                              
AmeriMark Direct, LLC  Consumer Products  First Lien Debt (12.8% Cash, Due 9/8/21)  9/8/2016   9,270    9,261    9,177    8.1%
                              
                  9,261    9,177    8.1%
                              
BigMouth, Inc.  Consumer Products  First Lien Debt (9.0% Cash (1 month LIBOR + 8.5%, 0.5% Floor), Due 11/14/21) (7)  11/14/2016   1,866    1,268    998    0.9%
                              
                  1,268    998    0.9%
                              
BLST Operating Company, LLC  Online Merchandise Retailer  Second Lien Debt (10.0% (1 month LIBOR + 8.5%, 1.5% Floor), Due 8/28/25) (8)  8/28/2020   1,953    1,953    1,943    1.7%
                              
BLST Operating Company, LLC  Online Merchandise Retailer  Class A Common Units (217,013 units)  8/28/2020        286    2,699    2.4%
                              
                  2,239    4,642    4.1%
                              
Burke America Parts Group, LLC  Home Repair Parts Manufacturer  Membership Units (14 units)  4/30/2015        5    3,220    2.8%
                              
                  5    3,220    2.8%
                              
Chicken Soup for the Soul, LLC  Multi-platform media and consumer products  First Lien Debt (10.0% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 2/22/22) (6)  12/14/2018   10,045    10,045    10,045    8.8%
                              
                  10,045    10,045    8.8%

  

 7 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition
Date
  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
Chief Fire Intermediate, Inc.  Security System Services  First Lien Debt (8.6% Cash (1 month LIBOR + 7.0%, 1.6% Floor), Due 11/8/24) (7)  11/8/2019   $8,100    $8,100    $-    0.0%
                              
Chief Fire Intermediate, Inc.  Security System Services  Class A Preferred Units (34,740 units)  11/8/2019        913    -    0.0%
                              
Chief Fire Intermediate, Inc.  Security System Services  Class B Common Units (3,510 units)  11/8/2019        -    -    0.0%
                              
                  9,013    -    0.0%
                              
Corporate Visions, Inc.  Sales & Marketing Services  Second Lien Debt (11.0%, Due 11/29/21) (9)  5/29/2015   19,425    19,425    19,425    17.1%
                              
Corporate Visions, Inc.  Sales & Marketing Services  Common Stock (15,750 shares)  5/29/2015        1,575    2,510    2.2%
                              
                  21,000    21,935    19.3%
                              
Freedom Electronics, LLC  Electronic Machine Repair  First Lien Debt (7.0% Cash (1 month LIBOR + 5.0%, 2.0% Floor), Due 12/20/23)  6/1/2020   2,601    2,601    2,601    2.3%
                              
Freedom Electronics, LLC  Electronic Machine Repair  First Lien Debt (8.7% Cash, Due 12/20/23) (10)(11)  12/20/2018   5,676    5,676    5,676    5.0%
                              
Freedom Electronics, LLC  Electronic Machine Repair  Membership Units (181,818 units)  12/20/2018        182    220    0.2%
                              
                  8,459    8,497    7.5%
                              
HUMC Opco, LLC  Healthcare  First Lien Debt (9.0% Cash, Due 9/9/21) (6)  8/8/2019   4,833    4,833    4,833    4.2%
                              
                  4,833    4,833    4.2%
                              
J5 Infrastructure Partners, LLC  Wireless Deployment Services  First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24) (12)  12/20/2019   -    -    -    0.0%
                              
J5 Infrastructure Partners, LLC  Wireless Deployment Services  First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% Floor), Due 12/20/24)  12/20/2019   5,826    5,826    5,826    5.1%
                              
                  5,826    5,826    5.1%
                              
Jurassic Quest Holdings, LLC  Entertainment  First Lien Debt (9.5% Cash (1 month LIBOR + 7.5%, 2.0% Floor), Due 5/1/24)  5/1/2019   8,605    8,605    8,651    7.6%
                              
Jurassic Quest Holdings, LLC  Entertainment  Preferred Units (467,784 units)  5/1/2019        480    1,188    1.0%
                              
                  9,085    9,839    8.6%
                              
MicroHoldco, LLC  General Industrial  Preferred Units (740,237 units) (13)  7/25/2019        749    749    0.7%
                              
                  749    749    0.7%
                              
Rapid Fire Protection, Inc.  Security System Services  First Lien Debt (5.5% Cash (1 month LIBOR + 3.8%, 1.7% Floor), Due 11/22/24) (14)  6/1/2020   608    608    608    0.6%
                              
Rapid Fire Protection, Inc.  Security System Services  First Lien Debt (8.3% Cash (1 month LIBOR + 6.5%, 1.8% floor), Due 2/28/22)  5/3/2021   3,000    3,000    3,000    2.6%
                              
Rapid Fire Protection, Inc.  Security System Services  First Lien Debt (8.9% Cash, Due 11/22/24) (10)(15)  11/22/2019   4,111    4,111    4,111    3.6%
                              
Rapid Fire Protection, Inc.  Security System Services  Common Stock (363 shares)  11/22/2019        500    5,469    4.8%
                              
                  8,219    13,188    11.6%
                              
Seitel, Inc.  Data Services  First Lien Debt (9.3% Cash (3 month LIBOR + 8.3%, 1.0% Floor), 2.0% PIK, Due 3/15/23)  3/15/2019   4,709    4,709    3,720    3.3%
                              
                  4,709    3,720    3.3%

 

 8 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

  

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition
Date
  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
Sequoia Healthcare Management, LLC  Healthcare Management  First Lien Debt (12.8% Cash, Due 9/9/21) (6)(7)  8/21/2018   $11,935    $11,935    $8,763    7.7%
                              
                  11,935    8,763    7.7%
                              
Taylor Precision Products, Inc.  Household Product Manufacturer  Series C Preferred Stock (379 shares)  12/23/2014        758    287    0.3%
                              
                  758    287    0.3%
                              
U.S. BioTek Laboratories, LLC  Testing laboratories  First Lien Debt (7.0% Cash (3 month LIBOR + 5.0%, 2.0% Floor), Due 12/14/23)  6/1/2020   1,128    1,128    1,120    1.0%
                              
U.S. BioTek Laboratories, LLC  Testing laboratories  First Lien Debt (9.3% Cash, Due 12/14/23) (10) (11)  12/14/2018   3,509    3,509    3,479    3.1%
                              
U.S. BioTek Laboratories, LLC  Testing laboratories  Class A Preferred Units (500 Units)  12/14/2018        540    642    0.5%
                              
U.S. BioTek Laboratories, LLC  Testing laboratories  Class C Units (578 Units)  12/14/2018        1    116    0.1%
                              
U.S. BioTek Laboratories, LLC  Testing laboratories  Class D Preferred Units (78 Units)  4/3/2020        78    95    0.1%
                              
                  5,256    5,452    4.8%
                              
U.S. Well Services, Inc.  Oil & Gas Services  Class A Common Stock (1,202,499 shares) (16)  11/9/2018        1,244    1,214    1.1%
                              
                  1,244    1,214    1.1%
                              
                              
Sub Total Non-control/non-affiliated investments - United States                $143,555   $139,097    122.3%
                              
Affiliate Investments- 71.8%                             
                              
Affiliate investments - United States                             
                              
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Common Stock Class B (1,085,073 shares)  5/7/2019       $362   $1,444    1.3%
                              
Burgaflex Holdings, LLC  Automobile Part Manufacturer  Common Stock Class A (1,253,198 shares)  7/15/2014        1,504    945    0.8%
                              
                  1,866    2,389    2.1%
                              
Eastport Holdings, LLC  Business Services  Second Lien Debt (13.5% Cash (3 month LIBOR + 13.0%, 0.5% Floor), Due 12/29/21) (6)  1/12/2016   16,500    16,414    16,500    14.5%
                              
Eastport Holdings, LLC  Business Services  Membership Units (22.9% ownership)  1/12/2016        3,263    23,259    20.5%
                              
                  19,677    39,759    35.0%
                              
GA Communications, Inc.  Advertising & Marketing Services  Series A-1 Preferred Stock (1,998 shares)  10/14/2011        3,477    4,150    3.7%
                              
GA Communications, Inc.  Advertising & Marketing Services  Series B-1 Common Stock (200,000 shares)  10/14/2011        2    360    0.3%
                              
                  3,479    4,510    4.0%
                              
LJS Partners, LLC  QSR Franchisor  Preferred Units (202,336 units)  8/12/2019        437    783    0.7%
                              
LJS Partners, LLC  QSR Franchisor  Common Membership Units (2,593,234 units)  1/1/2012        1,224    4,944    4.3%
                              
                  1,661    5,727    5.0%

  

 9 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition
Date
  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
MMI Holdings, LLC  Medical Device Distributor  First Lien Debt (12.0% Cash, Due 9/30/21) (6)  10/17/2011   $2,600    $2,600    $2,600    2.3%
                              
MMI Holdings, LLC  Medical Device Distributor  Second Lien Debt (6.0% Cash, Due 9/30/21) (6)  10/17/2011   400    388    400    0.4%
                              
MMI Holdings, LLC  Medical Device Distributor  Preferred Units (1,000 units, 6.0% PIK Dividend) (17)  10/17/2011        1,731    1,850    1.5%
                              
MMI Holdings, LLC  Medical Device Distributor  Common Membership Units (45 units)  10/17/2011        -    80    0.1%
                              
                  4,719    4,930    4.3%
                              
Navis Holdings, Inc.  Textile Equipment Manufacturer  First Lien Debt (9.0% Cash, 2.0% PIK, Due 6/30/23) (6)  2/1/2011   10,640    10,640    10,377    9.1%
                              
Navis Holdings, Inc.  Textile Equipment Manufacturer  Class A Preferred Stock (1,000 shares)  2/1/2011        1,000    1,000    0.9%
                              
Navis Holdings, Inc.  Textile Equipment Manufacturer  Common Stock (60,000 shares)  2/1/2011        -    463    0.4%
                              
                  11,640    11,840    10.4%
                              
Nth Degree Investment Group, LLC  Business Services  Membership Units (6,088,000 Units)  12/3/2019        6,088    -    0.0%
                              
                  6,088    -    0.0%
                              
RAM Payment, LLC  Financial Services  First Lien Debt (6.5% Cash (1 month LIBOR + 5.0%), 1.5% Floor), Due 1/4/24)  6/1/2020   2,035    2,035    2,035    1.8%
                              
RAM Payment, LLC  Financial Services  First Lien Debt (9.8% Cash, Due 1/4/24) (10)  1/4/2019   5,516    5,516    5,516    4.8%
                              
RAM Payment, LLC  Financial Services  Preferred Units (86,000 units, 8.0% PIK Dividend) (17)  1/4/2019        1,031    3,494    3.1%
                              
                  8,582    11,045    9.7%
                              
Sierra Hamilton Holdings Corporation  Oil & Gas Engineering and Consulting Services  Second Lien Debt (15.0%, Due 9/12/23) (18)  9/12/2019   3    3    3    0.0%
                              
Sierra Hamilton Holdings Corporation  Oil & Gas Engineering and Consulting Services  Common Stock (15,068,000 shares)  7/31/2017        6,958    955    0.8%
                              
                  6,961    958    0.8%
                              
V12 Holdings, Inc.  Data Processing & Digital Marketing  Second Lien Debt (13)  11/21/2016        490    501    0.5%
                              
                  490    501    0.5%
                              
Sub Total Affiliate investments - United States                $65,163   $81,659    71.8%

  

 10 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

June 30, 2021

(unaudited)

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition
Date
  Principal
Amount
   Cost   Fair Value   % of
Net Assets
 
Control Investments - 6.4%                             
                              
Control investments - United States                             
                              
Vology, Inc.  Information Technology  First Lien Debt (10.5% Cash (1 month LIBOR + 8.5%, 2.0% Floor), Due 12/31/21)  11/25/2019  $3,635   $3,635   $3,635    3.2%
                              
Vology, Inc.  Information Technology  Class A Preferred Units (9,041,810 Units)  11/25/2019        5,215    3,657    3.2%
                              
Vology, Inc.  Information Technology  Membership Units (5,363,982 Units)  11/25/2019        -    -    0.0%
                              
                  8,850    7,292    6.4%
         \                    
Sub Total Control investments - United States                $8,850   $7,292    6.4%
                              
TOTAL INVESTMENTS - 200.5%                $217,568   $228,048    200.5%

 

 

 

(1) All investments valued using unobservable inputs (Level 3), unless otherwise noted.

(2) All investments valued by the Logan Ridge Finance Corporation's (the "Company") 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 as of June 30,2021.

(5) The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). These investments are generally subject to certain limitations on resale, and may be deemed to be "restricted securities" under the Securities Act.

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

(7) Non-accrual investment.

(8) 1.0% of interest rate payable in cash. 9.0% of interest rate payable in cash or paid-in-kind at borrower's election. The borrower is currently paying all interest in cash.

(9) 9.0% of interest rate payable in cash. 2.0% of interest rate payable in cash or paid-in-kind at borrower's election. The borrower is currently paying all interest in cash.

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

(11) The investment has a $1.0 million unfunded commitment.

(12) The investment has a $3.5 million unfunded commitment.

(13) The investment has been exited or sold. The residual value reflects estimated earnout, escrow, or other proceeds expected post-closing.

(14) The investment has a $3.0 million unfunded commitment.

(15) The investment has a $1.3 million unfunded commitment.

(16) Investment is valued using observable inputs (Level 1). The stock of the company is traded on the NASDAQ Capital Market under the ticker "USWS."

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

(18) 15.0% of interest rate payable in cash or paid-in-kind at borrower's election.

 

 11 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2020

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition Date  Principal Amount   Cost   Fair Value   % of
Net Assets
 
Non-control/non-affiliated investments - 158.7%                             
                              
Non-control/non-affiliated investments - United States                             
                              
3 Bridge Solutions, LLC  IT Consulting  First Lien Debt (13.0% Cash, Due 12/4/22)  12/4/2017  $12,083   $12,083   $12,083    11.1%
                              
3 Bridge Solutions, LLC  IT Consulting  Preferred Units (965 units)  12/4/2017        1,090    1,116    1.0%
                              
3 Bridge Solutions, LLC  IT Consulting  Membership Units (39,000 units)  12/4/2017        10    -    0.0%
                              
                  13,183    13,199    12.1%
                              
Alternative Biomedical Solutions, LLC  Healthcare  First Lien Debt (8.0% Cash, Due 12/18/22)  6/25/2020   7,119    7,119    7,119    6.5%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series A Preferred Units (13,275 units)  6/25/2020        1,275    1,327    1.2%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series B Preferred Units (46,160 units)  6/25/2020        3,943    2,898    2.7%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Series C Preferred Units (78,900 units)  6/25/2020        -    -    0.0%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Membership Units (20,092 units)  12/18/2017        800    -    0.0%
                              
Alternative Biomedical Solutions, LLC  Healthcare  Membership Unit Warrants (49,295 units)  6/25/2020        -    -    0.0%
                              
                  13,137    11,344    10.4%
                              
American Clinical Solutions, LLC  Healthcare  First Lien Debt (7.0% Cash, Due 12/31/22)  12/31/2019   3,500    3,500    3,474    3.2%
                              
American Clinical Solutions, LLC  Healthcare  First Lien Debt (7.0% Cash, Due 6/30/21) (6)  4/13/2020   250    250    250    0.2%
                              
American Clinical Solutions, LLC  Healthcare  Class A Membership Units (6,030,384 units)  4/13/2020        3,198    3,831    3.5%
                              
                  6,948    7,555    6.9%
                              
AmeriMark Direct, LLC  Consumer Products  First Lien Debt (14.0% Cash, 1.3% PIK, Due 9/8/21)  9/8/2016   14,705    14,649    14,649    13.5%
                              
                  14,649    14,649    13.5%
                              
BigMouth, Inc.  Consumer Products  First Lien Debt (9.0% Cash (1 month LIBOR + 8.5%, 0.5% Floor), Due 11/14/21) (7)  11/14/2016   1,866    1,268    1,000    0.9%
                              
                  1,268    1,000    0.9%
                              
BLST Operating Company, LLC  Online Merchandise Retailer  Second Lien Debt (10.0% (1 month LIBOR + 8.5%, 1.5% Floor), Due 8/28/25) (8)  8/28/2020   1,953    1,953    1,953    1.8%
                              
BLST Operating Company, LLC  Online Merchandise Retailer  Class A Common Units (217,013 units)  8/28/2020        286    300    0.3%
                              
                  2,239    2,253    2.1%
                              
Burke America Parts Group, LLC  Home Repair Parts Manufacturer  Membership Units (14 units)  4/30/2015        5    2,461    2.3%
                              
                  5    2,461    2.3%
                              
Chicken Soup for the Soul, LLC  Multi-platform media and consumer products  First Lien Debt (10.0% Cash (1 month LIBOR + 8.5%, 1.5% Floor), Due 2/22/22) (6)  12/14/2018   13,000    13,000    13,000    11.9%
                              
                  13,000    13,000    11.9%

 

 12 

 

 

Logan Ridge Finance Corporation

 

Consolidated Schedule of Investments

(in thousands, except for units/shares)

December 31, 2020

 

Portfolio Company, Country (1), (2), (3), (4), (5)   Industry  Type of Investment  Acquisition Date  Principal Amount   Cost   Fair Value   % of
Net Assets
 
Chief Fire Intermediate, Inc.  Security System Services  First Lien Debt (8.6% Cash (1 month LIBOR + 7.0%, 1.6% Floor), Due 11/8/24) (7)<